HomeMy WebLinkAbout03-16-20 REVISED Council MeetingSPECIAL ACCOMMODATIONS: The City of Arlington strives to provide accessible meetings for people with disabilities. Please contact the
ADA coordinator at (360) 403-3441 or 711 (TDD only) prior to the meeting date if special accommodations are required.
CALL TO ORDER
Mayor Barb Tolbert
PLEDGE OF ALLEGIANCE
ROLL CALL
Mayor Barb Tolbert – Wendy
APPROVAL OF THE AGENDA
Mayor Pro Tem Jesica Stickles
INTRODUCTION OF SPECIAL GUESTS AND PRESENTATIONS
PROCLAMATIONS
PUBLIC COMMENT
For members of the public who wish to speak to the Council about any matter not on the Public Hearing
portion of the meeting. Please limit remarks to three minutes.
CONSENT AGENDA
Mayor Pro Tem Jesica Stickles
1.Minutes of the March 2 and March 9, 2020 Council meetings ATTACHMENT A
2.Accounts Payable
3.Professional Services Agreement with Karen Reed Consulting, LLC ATTACHMENT B
4. Ordinance Amending Ordinance No. 2019-012 Regarding Legal Description ATTACHMENT C
PUBLIC HEARING
1. Resolution Declaring Certain Vehicles as Surplus ATTACHMENT D
Staff Presentation: Sheri Amundson
Council Liaison: Mayor Pro Tem Jesica Stickles
NEW BUSINESS
1.Resolution for Emergency Declaration for Burn Road Waterline ATTACHMENT E
Break and Repair
Staff Presentation: Jim Kelly
Council Liaison: Debora Nelson
2.Financing for New Fire Station 48 ATTACHMENT F
Staff Presentation: Kristin Garcia
Council Liaison: Marilyn Oertle
Arlington City Council Meeting
March 16, 2020 at 7:00 pm
City Council Chambers – 110 E Third Street
SPECIAL ACCOMMODATIONS: The City of Arlington strives to provide accessible meetings for people with disabilities. Please contact the
ADA coordinator at (360) 403-3441 or 711 (TDD only) prior to the meeting date if special accommodations are required.
COMMENTS FROM COUNCILMEMBERS
INFORMATION/ADMINISTRATOR & STAFF REPORTS
MAYOR’S REPORT
EXECUTIVE SESSION
RECONVENE
ADJOURNMENT
Mayor Barb Tolbert
DRAFT
Page 1 of 4
Council Chambers 110 East Third Street March 2, 2020
Councilmembers Present: Mike Hopson, Michele Blythe, Jan Schuette, Marilyn Oertle, Jesica Stickles, Debora Nelson, and Don Vanney.
Council Members Absent: None.
Staff Present: Mayor Barb Tolbert, James Trefry, Kristin Garcia, Dave Ryan, Jim Kelly, City Attorney Steve Peiffle, and Ashleigh Scott
Also Known to be Present: Avery Hufford, Lindsay Dunn, Holly Sloan-Buchanan, Cory Ferris, Mark Tingley and Dan Rankin. Mayor Barb Tolbert called the meeting to order at 7:00 p.m., and the Pledge of Allegiance and roll call followed.
APPROVAL OF THE AGENDA Mayor Pro Tem Jesica Stickles moved to approve the agenda as presented. Councilmember Marilyn Oertle seconded the motion, which passed with a unanimous vote.
INTRODUCTION OF SPECIAL GUESTS AND PRESENTATIONS Shawn Fredrick from the Snohomish Health District was scheduled to present, but due to the current Coronavirus concerns and workload, he cancelled his presentation.
PROCLAMATIONS None.
PUBLIC COMMENT Lindsay Dunn spoke to City Council with concerns regarding the 172nd intersection signal timing and semi-trucks. He also brought to Council’s attention Arlington’s “quiet zones.” Cory Ferris spoke to City Council with concerns regarding the growth of Arlington without sustainable expandable infrastructure. He requested that expansion be kept down until road expansion has been addressed, established, and completed. He also was concerned about zoning issues and not being able to afford a home within Arlington City limits because lots are increasing and developers are purchasing ones that were affordable.
CONSENT AGENDA Mayor Pro Tem Jesica Stickles moved and Councilmember Marilyn Oertle seconded the motion to approve the Consent Agenda that was unanimously carried:
Minutes of the Arlington
City Council Meeting
Minutes of the City of Arlington City Council Meeting March 2, 2020
Page 2 of 4
1.Minutes of the February 18th and February 24th of 2020 Council meetings, andFebruary 19, 2020 Special Meeting.2. Accounts Payable of EFT Payments and Claims Checks #99055 through #99156dated February 19, 2020 through March 2, 2020 for $456,162.08.
PUBLIC HEARING None.
NEW BUSINESS
Airport Commission Appointment Airport Director Dave Ryan requested Council approve the appointment of Don Munson to the Airport Commission. On January 22nd and 23rd of 2020, an interview panel consisting of City Councilmember Jan Schuette, Airport Commissioner Ruth Gonzales, Airport Director David Ryan, and Airport Operations Manager Marty Wray, held interviews with five candidates for the open Airport Commissioner position. Don Munson, who has 11 years’ experience on the commission, was selected for the position. Councilmember Michele Blythe moved and Councilmember Jan Schuette seconded the motion to appoint Don Munson to the Airport Commission. The motion passed unanimously.
Ordinance for Bond Refunding Finance Director Kristin Garcia requested Council adopt the ordinance to refund bonds. The bond ordinance is the document that sets the parameters for the bond sale, such as how much can be issued, which bonds can be refunded, target interest rate savings, The refinance of the 2007 – 2010 General Obligation Bonds and Promissory Note that we hold for the Graafstra property is to lower the interest rate and overall cost to the City for the remaining life of the bonds. With the three obligation bonds, the estimated net savings, including any costs to refund, would be around one million dollars. Pricing on the bonds will set the interest rate on March 17th and the bond proceeds will available with closing on April 1, 2020. Mayor Pro Tem Jesica Stickles moved and Councilmember Mike Hopson seconded the motion to approve the Ordinance to refund one or more series of limited tax general obligation bonds, to repay a promissory note and to pay costs of issuance and sales of the bonds in an amount not to exceed $7,500,000 and authorized the Mayor to sign it. The motion passed unanimously.
BNSF Rail Trail Crossing Bid Award Public Works Director Jim Kelly requested Council award the BNSF Rail Trail Crossing project to PNW Civil in the amount of $63,845.
Minutes of the City of Arlington City Council Meeting March 2, 2020
Page 3 of 4
City Staff applied for and received a FHWA Safety Grant to improve the Centennial Trail railroad crossing along 67th Ave. The proposed improvement will realign Centennial Trail so that it crosses the railroad tracks at a more perpendicular angle. Work on this project includes traffic control, demolition, grading, paving, and pavement markings. Councilmember Marilyn Oertle moved and Councilmember Debora Nelson seconded the motion to award the 67th Avenue Rail/Trail Crossing Project to PNW Civil, Inc., and authorized the Mayor to sign the contract, subject to final review by the City Attorney.
Sixth Amendment to the Interlocal Agreement for Marysville Municipal Court
Services City Attorney Steve Peiffle requested Council approve two Interlocal Agreements between the City of Marysville and the City of Arlington to update Interlocal Agreements for Municipal Court Services and providing for the transition of those services to Cascade District Court and transfer of outstanding arrest warrants and/or court orders to the Arlington Police Department. On February 18, 2020 Council approved an Interlocal agreement with Snohomish County to provide District Court Services beginning March 1, 2020. Cases filed into the Marysville Municipal Court prior to March 1, 2020 can be dismissed and refiled into the District Court for additional fees, or can continue through Marysville Municipal Court through the end of 2020. Long term probation cases should be transferred to the District Court for continued monitoring. Additionally, the Marysville Police Department, through its relationship with Marysville Municipal Court, has maintained Arlington’s outstanding misdemeanor arrest warrants and some court orders issued by the court that should be transferred to the Arlington Police Department for future management. Councilmember Marilyn Oertle moved and Jesica Stickles seconded the motion to approve the Interlocal Agreements between the City of Marysville and the City of Arlington providing for the transition of court services to include the transfer of court orders and outstanding arrest warrants and authorized the Mayor to sign the agreements, subject to final review by the City Attorney.
COMMENTS FROM COUNCILMEMBERS None.
ADMINISTRATOR & STAFF REPORTS City Administrator Paul Ellis is out at a Washington Cities Insurance seminar, but wanted to provide an update regarding how the City is responding to the Coronavirus. The police and fire chiefs are reminding first responders to practice good hygiene, and Kurt is coordinating with the janitorial service for additional surface cleaning in public areas. Mayor Rankin from the Town of Darrington, who is serving as Snohomish Health District Board of Health Representative for all small cities in County Council District #1, provided a brief update directly from the Health District, regarding the Coronavirus.
Minutes of the City of Arlington City Council Meeting March 2, 2020
Page 4 of 4
MAYOR’S REPORT None.
EXECUTIVE SESSION None.
ADJOURNMENT With no further business to come before the Council, the meeting was adjourned at 7:24pm. _________________________________________ Barbara Tolbert, Mayor
DRAFT
Page 1 of 4
Council Chambers 110 East Third Street March 9, 2020
Councilmembers Present: Mike Hopson, Marilyn Oertle, Debora Nelson, Don Vanney, Jan Schuette, Jesica Stickles and Michele Blythe.
Council Members Absent: None.
Staff Present: Mayor Barb Tolbert, Paul Ellis, James Trefry, Kristin Garcia, Sheri Amundson, Jonathan Ventura, Jim Kelly, Kris Wallace, Dave Kraski, City Attorney Steve Peiffle, and Wendy Van Der Meersche.
Also Known to be Present: Mark Tingley, Sid Logan, Heather Logan, Sarah Arney, Holly Sloan-Buchanan, Steve Corsi, Peggy Ray, Andy Egloff, and Tony Warner. Mayor Barb Tolbert called the meeting to order at 7:00 pm, and the Pledge of Allegiance and roll call followed.
APPROVAL OF THE AGENDA Mayor Pro Tem Jesica Stickles moved to approve the agenda as presented. Councilmember Debora Nelson seconded the motion, which passed with a unanimous vote.
INTRODUCTION OF SPECIAL GUESTS AND PRESENTATIONS Mayor Tolbert introduced Steve Corsi, CEO and President of Volunteers of America Western Washington, who provided an overview. The group has taken over management of the Arlington Community Resource Center. Discussion followed with Dr. Corsi answering Council questions, and he distributed a handout to Councilmembers.
WORKSHOP ITEMS – NO ACTION WAS TAKEN
Resolution for Emergency Declaration for Burn Road Waterline Break and Repair Public Works Director Jim Kelly reviewed the resolution declaring an emergency for water main repair at 207th Street and Burn Road. On February 5, 2020, there was a water main break in the vicinity of 207th Street and Burn Road. The break occurred in a 10-inch asbestos concrete water main located on an inaccessible hillside. This water main break interrupted water service to three residential services located at the top of the hill. Since the break location was not accessible to repair, a new high density polyethylene (HDPE) pipe was installed from the base of the hill to the top of the hill using horizontal directional drilling construction method. Approximately 425-feet of replacement HDPE pipe was installed to restore service. Residents without water service
Minutes of the Arlington
City Council Workshop
Minutes of the City of Arlington City Council Workshop March 9, 2020
Page 2 of 4
were placed in a local hotel until water service could be fully restored. Discussion followed with Mr. Kelly answering Council questions.
Resolution Declaring Certain Vehicles as Surplus Assistant Finance Director Sheri Amundson reviewed a request to declare vehicles as surplus. The City currently has several vehicles that are beyond their useful life that need to be declared as surplus in order to be properly auctioned off. In addition, there are fixed assets that were determined to be missing during the 2019 Fixed Asset Inventory that must be declared as surplus. They are included in Exhibit A. Discussion followed with Ms. Amundson answering Council questions.
Financing for New Fire Station 48 Finance Director Kristin Garcia reviewed financing options for new Fire Station 48. The City is currently leasing space for Fire Station 48. The lease agreement was entered into April 1, 2018 and can be terminated by either party, at any time. The current owner of the facility would like the City to vacate as soon as possible as they would like to the use the facility for a different purpose. The short term nature of the lease agreement is driving the City’s need for a new fire station as there isn’t an alternative facility that can be used. The City issued a Request for Proposal (RFP) to seek financing options for construction of a new fire station. The RFPs were sent to 12 banks and posted on the City’s website. The RFP was also sent to two bond underwriting firms. A total of five proposals were received, three were from banks and two were from bond underwriting firms. The City also reviewed the State’s Local Program. The Local Program’s interest rate is competitive at 2.49%, however, funding is only available three times per year and is based on an application process with no guarantee that funding will be awarded. The Local Program wasn’t deemed a viable option at this time due to time constraints of when project funding would need to be available. After reviewing all proposals, staff is recommending Sterling Bank for the following reasons; competitive fixed interest rate, flexibility in prepayment terms, flexibility in drawing down bond proceeds instead of receiving all proceeds up front (which lowers the overall cost of financing) and the bank does not require any fees. Staff is requesting approval from Council to sign a term sheet with Sterling Bank which only authorizes continued negotiations with the bank and allows the bank to go through a credit approval process. A bond ordinance will be brought forward to Council as the final authorizing document to enter into a financing arrangement with Sterling Bank. Discussion followed with Ms. Garcia answering Council questions.
Professional Services Agreement with Karen Reed Consulting, LLC City Administrator Paul Ellis reviewed the professional services agreement with Karen Reed Consulting, LLC.
Minutes of the City of Arlington City Council Workshop March 9, 2020
Page 3 of 4
The professional services agreement with Karen Reed Consulting, LLC is for work related to the Arlington-North County RFA Annexation Committee. The cost is estimated at NOT TO EXCEED $50,000, but will be billed based on time and materials used. North County Regional Fire Authority has agreed to share the cost of the facilitation. The Consultant will facilitate meetings of the Arlington-North County RFA Annexation Committee, including developing agendas, providing strategic advice, reviewing materials prepared by staff, developing materials related to governance issues, facilitating meetings, finalizing draft meeting summaries prepared by Arlington or RFA staff. The consultant will also participate in staff team meetings, developing agendas and facilitating meetings. Karen Reed has extensive experience working with public agencies in the formation and annexation of regional fire authorities. Discussion followed with Mr. Ellis answering Council questions.
Ordinance Amending Ordinance No. 2019-012 regarding Legal Description City Administrator Paul Ellis reviewed the Ordinance of the City of Arlington, Washington Amending Ordinance No. 2019-012 to Correct the Legal Description for the Butler Wetland Annexation. On May 6, 2019, Council approved Ordinance 2019-012, annexing the Butler property. Two parcels were unintentionally omitted from the legal description of the ordinance. Staff is requesting Council approve the new Ordinance to include the two parcels, for submission to the Office of Financial Management. The City purchased this 51.53-acre property in 2000 with assistance from a Snohomish County Conservation futures grant. The intention was for passive recreation, open space, and wetland restoration. Since that time the Old Town Stormwater Wetland has been constructed on the property. The City applied to the Snohomish County Docketing process in October 2010 to include the property in the Arlington UGA. The docket was approved in May 2019, and the property is within the Arlington UGA. Discussion followed with Mr. Ellis answering Council questions.
Regional Fire Authority Update City Administrator Paul Ellis provided an update to the Arlington-North County Regional Fire Authority (RFA) and the annexation committee meetings. Discussion followed with Mr. Ellis answering Council questions.
ADMINISTRATOR AND STAFF REPORTS City Administrator Paul Ellis addressed the possibility of conducting remote Council meetings. He thanked Councilmembers for responding to his email regarding changing the spring retreat from Semiahmoo to a City facility and/or postponing the retreat.
MAYOR’S REPORT Mayor Tolbert indicated City staff is closely tracking the local and national news regarding the COVID-19 epidemic. All employees are taking the highest level of precautions.
Minutes of the City of Arlington City Council Workshop March 9, 2020
Page 4 of 4
COMMENTS FROM COUNCILMEMBERS None.
COUNCILMEMBER REPORTS Councilmembers Michele Blythe, Jan Schuette, Mike Hopson, Marilyn Oertle, Debora Nelson, and Don Vanney provided brief updates, while Councilmember Jesica Stickles had nothing to report this evening.
PUBLIC COMMENT Sarah Arney spoke of the old high school building and wondered if the City has plans to save the building and purchase to use as a community center. Mayor Tolbert stated the City is waiting to see what the school district’s plans are.
REVIEW OF CONSENT AGENDA ITEMS FOR NEXT MEETING Council discussed and agreed to place the following items on the Consent Agenda for the March 16, 2020 Council meeting: 4. Professional Services Agreement with Karen Reed Consulting, LLC5. Ordinance Amending Ordinance No. 2019-012 regarding Legal Description
EXECUTIVE SESSION None.
ADJOURNMENT With no further business to come before the Council, the meeting was adjourned at 8:09 p.m.
_________________________________________ Barbara Tolbert, Mayor
City of Arlington Council Agenda Bill Item: CA #3 Attachment B
the Arlington-North County RFA Annexation Committee. The cost is estimated at NOT TO EXCEED $50,000 but will be billed based on time and materials used. North County Regional Fire Authority has agreed to share the cost of the facilitation. HISTORY: The Consultant will facilitate meetings of the Arlington-North County RFA Annexation Committee, including developing agendas, providing strategic advice, reviewing materials prepared by staff, developing materials related to governance issues, facilitating meetings, finalizing draft meeting summaries prepared by Arlington or RFA staff. The consultant will also participate in staff team
Arlington - North County RFA Annexation Project
Draft Consultant Scope of Work
Draft dated 1.27.20
The Consultant will facilitate meetings of the Arlington-North County RFA Annexation Committee,
including developing agendas, providing strategic advice, reviewing materials prepared by staff,
developing materials related to governance issues, facilitating meetings, finalizing draft meeting
summaries prepared by Arlington or RFA staff. Consultant will also participate in staff team meetings,
developing agendas and facilitating meetings.
The scope anticipates, in addition to project start up work, two (2) planning committee meetings and
two (2) staff work group meetings each month from February 2020 through November 2020, except for
the months of August and November which include only 1 meeting of staff and 1 meeting of the
committee. Two additional meetings are included in November, one with the City Council, and one with
the RFA Board of Commissioners. The project scope assumes 6 staff meetings will be conducted in
person, and all other staff meetings will be conducted telephonically. The Consultant will be present for
all scheduled planning committee meetings identified within this scope. No other briefings or
participation in public hearings are included in this scope.
The scope assumes the Client provides all necessary legal advice, and all substantive staff work on
operations and finance issues, logistics for all meetings and copying of all meeting materials. Scope also
assumes the Client will engage a separate communications consultant to guide the public education
campaign, messaging and materials development. Consultant does not provide legal services.
The City shall pay Consultant for services hourly, billable in quarter hour increments at a rate of $210
per hour, plus actual expenses (none presently anticipated), in an amount not to exceed $50,000.
Actual expenses shall be reimbursed at cost. Travel time in excess of 1 hour per trip shall be billed to the
client at regular hourly rates. Client will not be billed for Consultant’s mileage for meetings.
Cost estimated detail:
Planning Committee
Per planning committee meeting cost estimated based on:
2.75 hours on site.
1.5 hours travel time charge (expect 3 hours total travel time for each trip on average).
1-1.5 hours prep work in advance of each meeting (separate from staff team work)
5.75 hours per planning committee meeting X 19 meetings =109.25 hrs. @ $210/hr. =$22,942.50
Planning Committee, Commission, Board meetings assumptions
Staff Team
19 staff team meetings @ 1.5 -2 hours each, plus 3 - 4 hours prep work for each meeting (drafting and
reviewing, editing documents) = max 114 hours + 9 hours for travel time to 6 meetings = 125 hours @
$210/hr. = $26,250
Total Estimated cost, w/o contingency
Committee & Council/Commission 22,942.50
Staff team, work 26,250.00
Total 49,192.5
City of Arlington Council Agenda Bill Item: CA #4 Attachment C COUNCIL MEETING DATE: March 16, 2020 SUBJECT: An Ordinance of the City of Arlington, Washington Amending Ordinance No. 2019-012 to Correct the Legal Description for the Butler Wetland Annexation ATTACHMENTS: Ordinance with Exhibit A and Map DEPARTMENT OF ORIGIN Administration; Paul Ellis, City Administrator – 360-403-4603 EXPENDITURES REQUESTED: 0 BUDGET CATEGORY: N/A BUDGETED AMOUNT: N/A LEGAL REVIEW: DESCRIPTION: On May 6, 2019, Council approved Ordinance 2019-012, annexing the Butler property. Two parcels were unintentionally omitted from the legal description of the ordinance. Staff is requesting Council approve the new Ordinance to include the two parcels, for submission to the Office of Financial Management. HISTORY: The City purchased this 51.53-acre property in 2000 with assistance from a Snohomish County Conservation futures grant. The intention was for passive recreation, open space, and wetland restoration. Since that time the Old Town Stormwater Wetland has been constructed on the property. The City applied to the Snohomish County Docketing process in October 2010 to include the property in
ORDINANCE NO. 2020-XXX 2
ORDINANCE NO. 2020--XXX
AN ORDINANCE OF THE CITY OF ARLINGTON, WASHINGTON
AMENDING ORDINANCE NO. 2019-012 TO CORRECT THE LEGAL DESCRIPTION FOR THE
BUTLER WETLAND ANNEXATION
WHEREAS, the City of Arlington, Washington adopted Ordinance No. 2019-012, entitled
“AN ORDINANCE ANNEXING TO THE CITY OF ARLINGTON A PORTION OF SECTION 2 OF
TOWNSHIP 31 NORTH, RANGE 5 EAST, W.M., SNOHOMISH COUNTY, WASHINGTON,
COMMONLY KNOWN AS THE BUTLER WETLAND ANNEXATION”; and
WHEREAS, the City has determined that the legal description contained in said
ordinance did not encompass the entire legal description of the property intended to be
annexed by omitting the legal description for two tax parcels; and
WHEREAS, the City wishes to correct the error;
NOW, THEREFORE, the City Council of the City of Arlington do hereby ordain as follows:
Section 1. The Exhibit “A” attached hereto shall be substituted for the legal description
previously attached as Exhibit “A” to City of Arlington Ordinance 2019-012.
Section 2. Effective Date. This ordinance or a summary thereof consisting of the
title shall be published in the official newspaper of the City, and shall take effect and be in full
force five (5) days after publication.
PASSED BY the City Council and APPROVED by the Mayor this _____ day of
_______________, 2020.
CITY OF ARLINGTON
______________________________
Barbara Tolbert, Mayor
Attest:
______________________________
Wendy Van Der Meersche, City Clerk
Approved as to form:
______________________________
Steven J. Peiffle
City Attorney
ORDINANCE NO. 2020-XXX 1
EXHIBIT “A”
PARCEL A
BEGINNING AT THE SOUTH QUARTER CORNER OF SECTION 2, TOWNSHIP 31 NORTH, RANGE
5 EAST, W.M.;
THENCE NORTH 88°42'50" WEST FOR 241.8 FEET;
THENCE NORTH 1°06'00" WEST 502.4 FEET;
THENCE NORTH 9°23'00" WEST 942.74 FEET;
THENCE SOUTH 89°24'30" WEST 1452.22 FEET TO THE TRUE POINT OF BEGINNING;
THENCE NORTH 00°22'00" EAST 687.43 FEET;
THENCE NORTH 56°42'00" EAST 590.28 FEET;
THENCE NORTH 71°34'30" EAST 515 FEET MORE OR LESS TO THE EASTERLY MARGIN OF
VACATED MARKET STREET EXTENDED NORTHERLY AS SHOWN ON THE PLAT OF HALLER CITY;
THENCE SOUTHERLY ALONG THE EXTENDED EASTERLY MARGIN OF THE AFORESAID MARKET
STREET TO THE NORTHERLY MARGIN OF RIVERSIDE AVENUE;
THENCE EASTERLY ALONG SAID NORTHERLY MARGIN OF RIVERSIDE AVENUE TO THE WESTERLY
MARGIN OF MINOR STREET;
THENCE SOUTHERLY ALONG SAID WESTERLY MARGIN OF MINOR STREET TO THE NORTHERLY
MARGIN OF DIVISION AVENUE;
THENCE WESTERLY ALONG SAID NORTHERLY MARGIN OF DIVISION AVENUE TO THE TRUE
POINT OF BEGINNING;
EXCEPT DIKE ROAD;
EXCEPT STATE HIGHWAY SR 530;
EXCEPT STATE HIGHWAY SR 9;
TOGETHER WITH ALL THAT PORTION OF GOVERNMENT LOTS 13 AND 14, SECTION 2,
TOWNSHIP 31 NORTH, RANGE 5 EAST, W.M., DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTH QUARTER CORNER OF SAID SECTION;
THENCE NORTH 88°42'50" WEST 241.8 FEET;
THENCE NORTH 01°6' WEST 502.4 FEET;
THENCE NORTH 09°23' WEST 942.74 FEET;
THENCE SOUTH 89°24'30" WEST 1452.22 FEET TO THE TRUE POINT OF BEGINNING;
THENCE NORTH 00°22' EAST 687.43 FEET;
THENCE NORTH 56°42' EAST 590.28 FEET;
THENCE NORTH 71°34'30" EAST 1032.17 FEET;
THENCE NORTH 18°25'30" WEST 280.0 FEET;
THENCE SOUTH 71°34'30" WEST 1790.25 FEET;
THENCE SOUTH 45°36'30" WEST 1099.83 FEET;
THENCE SOUTH 48°12'30" EAST 455.95 FEET;
THENCE NORTH 84°04'30" EAST 299.86 FEET;
THENCE NORTH 89°24'30" EAST 457.7 FEET TO THE TRUE POINT OF BEGINNING.
EXCEPT THAT PORTION ACQUIRED BY THE STATE OF WASHINGTON BY CONDEMNATION IN
ORDINANCE NO. 2020-XXX 2
SNOHOMISH COUNTY SUPERIOR COURT CAUSE NO. 97-2-07732-8.
SITUATE IN THE COUNTY OF SNOHOMISH, STATE OF WASHINGTON.
PARCEL B
Lots 6 to 18 inclusive, Block 43, Haller City,
EXCEPT portion conveyed to the State of Washington for Primary State Highway 1-A, under
Warranty Deed File No. 1160787, records of Snohomish County; as per plat recorded in Volume
2 of Plats on page 22, records of Snohomish County;
Situate in the County of Snohomish, State of Washington.
Maps and GIS data are distributed “AS-IS” without warranties of any kind, either express or implied, including but not limitedto warranties of suitability for a particular purpose or use. Map data are compiled from a variety of sources which may containerrors and users who rely upon the information do so at their own risk. Users agree to indemnify, defend, and hold harmlessthe City of Arlington for any and all liability of any nature arising out of or resulting from the lack of accuracy or correctness ofthe data, or the use of the data presented in the maps.
Butler Wetland Annexation
±
City of Arlington
Date:
File:
Cartographer:
Scale:ButlerAnnexOFM8.5x11_19
3/2/2020 kdh
1 inch = 517 feet
Butler WetlandAnnexation Parcels
?|?Ó
Centennial Trail
W 4TH ST
NORTH ST
N WEST AVE
W BURKE AVE
SR530
W 5TH ST
W HALLER AVE
SR 9
W DIVISION ST
W COX AVE
E 3RD ST
W GILMAN AVE
BROADWAY ST
E DIVISION ST
RAILROAD
ST
E GILMAN AVE
E HALLER AVE
E 4TH ST N MACLEOD AVEN OLYMPIC AVE
DIKE RD
67TH AVE NE
SCHLOMANRD
SouthForkStillaguamishRiver
North
Fork
StillaguamishRiver
StillaguamishRiver
00461804301100
31050200300400
00461804300600
31050200300200
Legend
Annexation
City Limits
Arlington UGA
Assessor Parcels
Private Road
Public Right of Way
Parks
City of Arlington Council Agenda Bill Item: PH #1 Attachment DCOUNCIL MEETING DATE: March 16, 2020 SUBJECT: Resolution Declaring Property as Surplus ATTACHMENTS: Resolution with Exhibit A DEPARTMENT OF ORIGIN Finance EXPENDITURES REQUESTED: 0 BUDGET CATEGORY: N/A BUDGETED AMOUNT: N/A LEGAL REVIEW: DESCRIPTION: The City currently has several vehicles that are beyond their useful life that need to be declared as surplus in order to be properly auctioned off. In addition, there are fixed assets that were determined to be missing during the 2019 Fixed Asset Inventory that must be declared as surplus. They are included in Exhibit A. HISTORY: The City has found that the most expedient way to deal with surplus vehicles and equipment is to utilize the services of an on-line auction site.
ALTERNATIVES: None
RECOMMENDED MOTION: I move to approve the Resolution Declaring Property as Surplus, and authorize the Mayor to sign the resolution.
RESOLUTION NO. 2020–XXX
A RESOLUTION OF THE CITY OF ARLINGTON DECLARING CERTAIN PROPERTY AS SURPLUS AND AUTHORIZING ITS SALE
WHEREAS, the City has purchased the equipment listed on the attached Exhibit “A”; and
WHEREAS, the equipment identified on Exhibit “A” is surplus to the needs of the City; and
NOW, THEREFORE, the City of Arlington, acting by and through its City Council, does hereby resolve as follows: 1. The equipment/property described on the attached Exhibit “A” is declaredSurplus to the needs of the City.2. Staff is instructed to trade in all items for the best available price, sell allitems for the best price or properly dispose of items that it is unable tosell. Staff is further authorized to dispose of the property via anintergovernmental transfer pursuant to RCW 39.33.010.Passed by the City Council of the City of Arlington at a regular meeting on this 16th day of March, 2020. _____________________________________ Barbara Tolbert Mayor ATTEST: __________________________________________ Wendy Van Der Meersche, City Clerk
APPROVED AS TO FORM: _______________________________________ Steven J. Peiffle, City Attorney
EXHIBIT A
PF-21 1997 Ford F-250 Utility Body 1FTHF26H1VEB26632 103,740
P-27 2000 Chevrolet 1500 Pickup 1GCEK19V1YE330720 111,529
S-47 1975 Ford Patch Truck N80FVW48559/2262 46,955
2533 2004 Chevrolet Aveo KLITJ52654B242406 Unknown
W-10 2006 Ford Escape 1FMCU92Z76KC13294 51,803
ENG-10 2000 Ford Explorer 1FMZU71E7YUB76669 47,515
L-72 2005 Dodge Caravan 1D8GP24R45B185567 148,700
WW-70 2000 Chevrolet S-10 Pickup 1GCCS1444Y8176430 60,440
WW-91 2002 Ford F-250 1FTNX21S82EC89485 127,578
W-44 2002 Ford Supercab 4X4 Pickup 1FTNX21SX2EC89486 113,900
W-15 2008 Ford Ranger 2X4 Pickup 1FT2R44U18PA99206 100,650
W-22 2007 Chevrolet Colorado 4X4 1GCDT19E578211512 99,012
W-45 2001 Ford F-250 4X4 1FTNX21S21EC20550 143,077
WW-94 2004 Hyster H50XM Fork Lift H177B47598B 627 HRS (Approx.)
ASSETS REPORTED AS MISSING
2862 Stihl Line Trimmer - Airport 276317548 N/A
3781 Stihl Pole Hedge Trimmer –
Airport
Unknown N/A
3370 Motorola Mobile Radio – M&O 511ISU0033 N/A
3788 Stihl Hand Held Blower – M&O 501459382 N/A
1323 Hydraulic Circular Saw – M&O Unknown N/A
4076 Dewalt Miter Saw – Tool Library 340977 N/A
3691 Stihl Line Trimmer – DOC Tools 295646441 N/A
2069 1999 Deere Hedge Trimmer -
Cemetery
JT0800194 N/A
2855 2002 Snapper Push Mower -
Cemetery
11190109 N/A
City of Arlington Council Agenda Bill Item: NB #1 Attachment E COUNCIL MEETING DATE: March 16, 2020 SUBJECT: Resolution declaring an emergency for water main repair at 207th St and Burn Road ATTACHMENTS: Draft Resolution DEPARTMENT OF ORIGIN Public Works; Jim Kelly, Director – 360-403-3505 EXPENDITURES REQUESTED: $60,000 estimate BUDGET CATEGORY: Water Utility Capital Funds 2020 BUDGETED AMOUNT: $250,000 (Water Distribution System Repairs) LEGAL REVIEW: DESCRIPTION: Request for Council to declare an emergency condition in response to a water main break and waive Public Works Bid Requirements allowing staff to restore water service. HISTORY: On February 5, 2020 there was a water main break in the vicinity of 207th St and Burn Road. The break occurred in a 10-inch asbestos concrete water main located on an inaccessible hillside. This water main break interrupted water service to three residential services located at the top of the hill. Since the break location was not accessible to repair, a new high density polyethylene (HDPE) pipe was installed from the base of the hill to the top of the hill using horizontal directional drilling construction method. Approximately 425-feet of replacement HDPE pipe was installed to restore
RESOLUTION NO. 2020 – XXX
A RESOLUTION DECLARING AN EMERGENCY AND
WAIVING COMPETITIVE BIDDING REQUIREMENTS DUE
TO A BREAK IN THE BURN ROAD WATER MAIN
WHEREAS, a February 5, 2020 break in the Burn Road water main pipe has impacted
residences in the Burn Road, 207th St. NE neighborhood; and
WHEREAS, the Burn Road water main is located in an unstable hillside and the old
asbestos concrete water main cracked and broke during recent heavy rain events, and
WHEREAS, the City’s investigation of the water main at Burn Road clearly show a
broken pipeline in need of immediate repair; and
WHEREAS, this major water main failure left several residents without water service
and fire protection, requiring immediate action;
NOW, THEREFORE, the City Council of the City of Arlington Washington does hereby
resolve as follows:
1. The City Council finds an emergency was caused by the February 5, 2020 break in
the Burn Road water main pipe which presented a real and immediate threat to
the proper performance of essential functions, and potential loss or damage to
property, bodily injury, or loss of life if immediate action was not taken. Pursuant
to RCW 39.04.280, the City Council waives the competitive bidding requirements
for the work necessary as a result of the emergency.
Approved by the City Council of the City of Arlington this 16th day of March 2020.
CITY OF ARLINGTON
Barbara Tolbert, Mayor
ATTEST:
Wendy Van Der Meersche, City Clerk
APPROVED AS TO FORM:
Steven J. Peiffle
City Attorney
City of Arlington Council Agenda Bill Item: NB #2 Attachment FCOUNCIL MEETING DATE: March 16, 2020 SUBJECT: Fire Station Financing Options ATTACHMENTS: Request for Proposal Summary, Request for Proposal for a Limited Tax General Obligation Bond, Bond Underwriters Proposal Summary, RFP Responses DEPARTMENT OF ORIGIN Finance; Kristin Garcia – Finance Director 360-403-3431 EXPENDITURES REQUESTED: N/A BUDGET CATEGORY: N/A BUDGETED AMOUNT: N/A LEGAL REVIEW: DESCRIPTION: The City issued a Request for Proposal (RFP) to seek financing options for construction of a new fire station. The RFP’s were sent to 12 banks and posted on the city’s website. The RFP was also sent to two bond underwriting firms. A total of five proposals were received, three were from banks and two were from bond underwriting firms. A summary of the proposals are attached. The City also reviewed the State’s Local Program. The Local Program’s interest rate is competitive at 2.49%, however funding is only available three times per year and is based on an application process so there is no guarantee that funding would be awarded. The Local Program wasn’t deemed a viable option at this time due to time constraints of when project funding would need to be available. After reviewing all proposals, staff is recommending moving forward with Sterling Bank for the following reasons; competitive fixed interest rate, flexibility in prepayment terms, flexibility in drawing down bond proceeds instead of receiving all proceeds up front (which lowers the overall cost of financing) and the bank does not require any fees. Staff is requesting approval from Council to sign a term sheet with Sterling Bank which only authorizes continued negotiations with the bank and allows the
TO: Prospective Long-term Finance Providers
FROM: Paul Ellis, City Administrator, City of Arlington
Kristin Garcia, Finance Director, City of Arlington
DATE: January 8, 2020
CC: Nancy Neraas, Bond Attorney, Foster Garvey PLLC
RE: City of Arlington –Limited Tax General Obligation Bond - Request for Proposals
The City of Arlington (the “City”), is requesting proposals for the purchase of its tax-exempt Limited Tax
General Obligation Bond, 2020 (the “Bond”) for the purpose of funding a new fire station and to pay
for costs of issuance of the bonds. The City is requesting an amortization period of at least 20 years but
no more than 30 years. The preferred terms are set forth in the Term Sheet attached hereto and by
this reference is incorporated herein. The City’s Tax ID# 91-6001401. The population of the City is
19,740.
Proposals are due to the City by or before 3:00 PM (PST) on January 21, 2020. The Closing/Delivery
Date is currently scheduled to take place on or about July 1, 2020. Please direct your email proposals
to:
Paul Ellis, City Administrator
City of Arlington, WA 98223
Phone: (360) 403-3441
E-mail: pellis@arlingtonwa.gov
CC: kgarcia@arlingtonwa.gov
If you have any questions, please contact Paul Ellis or Kristin Garcia at (360) 403 -3441.
THIS REQUEST FOR PROPOSALS DOES NOT CONSTITUTE AN OFFER TO SELL BONDS
Term Sheet
CITY OF ARLINGTON, WASHINGTON
LIMITED TAX GENERAL OBLIGATION BOND, 2020
Par Amount- $5,500,000*.
Use of Bond Proceeds - Proceeds of the Bond will be used to finance a new fire station and to pay the
cost of issuance of the bonds.
Maturity Date - December 1, 2050 or earlier.
Prepayment - The City prefers to have the Bond pre-payable at any time without a prepayment penalty
and without an impact on the quoted interest rate. Other redemption options will be considered.
Rating - The Bond will be nonrated. The City’s current bond rating by Moody’s is Aa3.
Insurance - No.
Tax Status - Interest on the Bond will be excludable from gross income and will not be an item of tax
preference for federal income tax purposes.
Bank Qualified - The City will designate the Bond as a “qualified tax-exempt obligation” within the
meaning of Section 265(b)(3)(B) of the Internal Revenue Code of 1986, as amended.
Form - Fully-registered, single bond. The Bond will be physically registered in the name of and delivered
to the successful proposer to this request for proposal (the “City”). No CUSIP number will be assigned
to the Bond.
Legal Opinion - Furnished by Nancy Neraas of Foster Garvey, as bond counsel.
Bond Registrar - Expected to be the City.
Closing Date - Anticipated to be on or about July 1, 2020.
Payment - Interest is due semiannually on each June 1 and December 1. The first interest payment is
due on December 1, 2020. Principal is due annually on each December 1, commencing December 1,
2020. If you cannot lock in a rate for 20 or 30 years, please specify the maximum maturity for a fixed
rate. We understand that any interest rate quote would be an indicative rate.
Option A (20-years, Level Debt, final maturity 12/1/2040),
PLEASE SPECIFY YOUR FIXED INTEREST RATE FOR 20 YEARS.
Option B (30-years, Level Debt, final maturity 12/1/2050),
PLEASE SPECIFY YOUR FIXED INTEREST RATE FOR 20 YEARS.
*Preliminary and subject to change
Interest - Fixed rate, computed on the basis of a 360-day year of twelve 30-day months.
Purchase Price - 100%.
Structure - Level Debt payments. Other options may be considered.
Method of Sale/Transferability- The Bond will be sold in a private placement to either a financial
institution or “qualified institutional buyer” (as defined in Rule 144A of the Securities and Exchange
Commission (“SEC”). The Bond will not be registered with the SEC or any other regulatory body.
Accordingly, the Bond will be held by its Purchaser for the Purchaser’s own account and will not be
reoffered to the public. The Bond may be transferred only in whole and only to a “qualified institutional
buyer.” The proposer should consult with their legal counsel with respect to the purchase of the Bond.
Purchaser Receipt and Certificate – The Purchaser will be expected to sign a purchaser letter and issue
price certificate in substantially the forms attached.
Selection Criteria - The City intends to select the Purchaser of the Bond from among those proposers
that respond to this request for proposals.
The City reserves the right to seek additional information and/or clarification from any proposer, the
right to reject any and all proposals received with or without cause, the right to negotiate with any
proposer that submits a proposal and the right to waive any irregularity or informality if deemed to
be in the best interests of the City.
Bond issuance subject to:
1. Closing on documents, to be prepared by bond counsel, usual and customary in the private
placement of a tax-exempt municipal bond.
2. Formal adoption of the Bond Ordinance.
3. Under Washington law, all proposals are subject to disclosure as a public record.
PLEASE IDENTIFY ANY BANK AND/OR LEGAL FEES AND PROVIDE A TIMELINE FOR YOUR CREDIT
APPROVAL.
PLEASE PROVIDE AN ESTIMATED PAYMENT SCHEDULE FOR EACH OPTION A AND OPTION B SHOWING
ANNUAL PRINCIPAL AND INTEREST PAYMENT AND TOTAL DEBT SERVICE.
LEGAL OPINION
___________, 2020
City of Arlington, Washington
Re: City of Arlington, Washington
Limited Tax General Obligation Bond, 2020 - $5,500,000
We have served as bond counsel to the City of Arlington, Washington (the “City”), in connection
with the issuance of the above-referenced bond (the “Bond”), and in that capacity have examined such
law and such certified proceedings and other documents as we have deemed necessary to render this
opinion. As to matters of fact material to this opinion, we have relied upon representations contained in
the certified proceedings and other certifications of public officials furnished to us, without undertaking
to verify the same by independent investigation.
The Bond is issued by the City pursuant to Ordinance No. ______ (the “Bond Ordinance”) to
provide the funds to pay for the costs of a new fire station and to pay the costs of issuance and sale of
the Bond, all as set forth in the Bond Ordinance.
Reference is made to the Bond and the Bond Ordinance for the definitions of capitalized terms
used and not otherwise defined herein.
We express no opinion herein concerning the completeness or accuracy of any official statement,
offering circular or other sales or disclosure material relating to the issuance of the Bond or otherwise
used in connection with the Bond.
Under the Internal Revenue Code of 1986, as amended (the “Code”), the City is required to
comply with certain requirements after the date of issuance of the Bond in order to maintain the exclusion
of the interest on the Bond from gross income for federal income tax purposes, including, without
limitation, requirements concerning the qualified use of Bond proceeds and the facilities financed or
refinanced with Bond proceeds, limitations on investing gross proceeds of the Bond in higher yielding
investments in certain circumstances and the arbitrage rebate requirement to the extent applicable to the
Bond. The City has covenanted in the Bond Ordinance to comply with those requirements, but if the
City fails to comply with those requirements, interest on the Bond could become taxable retroactive to
the date of issuance of the Bond. We have not undertaken and do not undertake to monitor the City's
compliance with such requirements.
City of Arlington, Washington
_________, 2020
Page 2
Based upon the foregoing, as of the date of initial delivery of the Bond to the purchaser thereof
and full payment therefor, it is our opinion that under existing law:
1. The City is a duly organized and legally existing code city under the laws of the
State of Washington.
2. The Bond has been duly authorized and executed by the City and is issued in full
compliance with the provisions of the Constitution and laws of the State of Washington and the
ordinances of the City relating thereto.
3. The Bond constitutes a valid and binding general obligation of the City payable
from tax revenue of the City, and such other money as it lawfully available and pledged by the
City, within the constitutional and statutory limitations provided by law without the assent of the
voters , except only to the extent that enforcement of payment may be limited by bankruptcy,
insolvency or other laws affecting creditors’ rights and by the application of equitable principles
and the exercise of judicial discretion in appropriate cases.
4. The Bond is a general obligation of the City.
5. Assuming compliance by the City after the date of issuance of the Bond with
applicable requirements of the Code, the interest on the Bond is excluded from gross income for
federal income tax purposes and is not an item of tax preference for purposes of the alternative
minimum tax applicable to individuals; however, interest on the Bond received by certain S
corporations may be subject to tax, and interest on the Bond received by foreign corporations
with United States branches may be subject to a foreign branch profits tax. We express no
opinion regarding any other federal tax consequences of receipt of interest on the Bond.
This opinion is given as of the date hereof, and we assume no obligation to revise or supplement
this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes
in law that may hereafter occur.
We bring to your attention the fact that the foregoing opinions are expressions of our professional
judgment on the matters expressly addressed and do not constitute guarantees of result.
Respectfully submitted,
FOSTER GARVEY P.C.
PURCHASER’S RECEIPT AND CERTIFICATE
I, __________________ of __________________ (the “Purchaser”) do hereby certify and
acknowledge on behalf of the Purchaser as follows:
1. The Purchaser acknowledges receipt this day of the $_______ principal amount of the
Fire Station Bond, 2020 (the “Bond”), of the City of Arlington, Washington (the “Issuer”), dated
___________, 2020. The Bond is authorized pursuant to Ordinance No. ____ of the Issuer (the “Bond
Ordinance”). [The Purchaser is receiving a fee of $______.] The Purchaser is not acting as an
“Underwriter” with respect to the Bond. For purposes hereof, “Underwriter” means (i) any person that
agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting
syndicate) to participate in the initial sale of the Bond to the “Public”, and (ii) any person that agrees
pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph
to participate in the initial sale of the Bond to the Public (including a member of a selling group or a
party to a retail distribution agreement participating in the initial sale of the Bond to the Public). For
purposes hereof, “Public” means any person (including an individual, trust, estate, partnership,
association, company, or corporation) other than an Underwriter or a related party. The term “related
party” for purposes hereof generally means any two or more persons who have greater than 50% common
ownership, directly or indirectly.
2. The Purchaser has no present intention to sell, reoffer, or otherwise dispose of the Bond
(or any portion of the Bond). The Purchaser has not contracted with any person pursuant to a written
agreement to have such person participate in the initial sale of the Bond and the Purchaser has not agreed
with the Issuer pursuant to a written agreement to sell the Bond to persons other than the Purchaser or a
related party of the Purchaser. The Purchaser reserves the right to assign or transfer the Bond, upon the
written notice to the Issuer, to a successor to substantially all of the assets of the Purchaser or to another
entity upon the written consent of the Issuer. Any successor to the Purchaser must sign a certificate
substantially in the form of this certificate.
3. The Bond is dated __________, 2020, is in the form of a single, fully registered,
physically certificated Bond in the principal amount of $________, registered in the name of the
Purchaser, maturing on [December 1, 20XX], and bearing interest at the [rate of ____% per annum/rates
set forth in the Bond Ordinance].
4. The aggregate issue price of the Bond is the principal amount thereof and resulted from
an “arm’s length,” commercial transaction between the Purchaser and the Issuer.
5. The Purchaser is acquiring the Bond for its own account as evidence of a loan and not
with a present view to, or for sale in connection with, any distribution of the Bond or any part thereof.
6. The Purchaser is a lender that regularly extends credit by purchasing loans in the form of
the Bond; has knowledge and experience in financial and business matters that make it capable of
evaluating the Bond and the risks associated with the purchase of the Bond; has the ability to bear the
economic risk of an acquisition of the Bond; and is a “qualified institutional buyer” as defined in
Rule 144A promulgated under the 1933 Act, and is able to bear the economic risks of such investment.
7. The Purchaser has conducted its own investigation of the financial condition of the Issuer
in the transaction effecting the execution and delivery of the Bond, the purposes for which the Bond
were delivered and of the security for the payment of the principal of and interest on the Bond, and has
obtained such information regarding the Bond and the Issuer and its operations, financial condition and
financial prospects as the Purchaser deemed necessary to make an informed investment decision with
respect to the purchase of the Bond.
8. The Purchaser is acting solely for its own loan account and not as a fiduciary for the
Issuer, or in the capacity of broker, dealer, placement agent, municipal securities underwriter, municipal
advisor or fiduciary and has not provided, and will not provide, financial, legal (including securities law),
tax, accounting or other advice to or on behalf of the Issuer (including to any financial advisor or any
placement agent engaged by the Issuer) with respect to the structuring, execution, sale or delivery of the
Bond.
9. The undersigned, on behalf of the Purchaser, does further hereby acknowledge that (a) the
Bond has not been registered under the Securities Act of 1933, as amended, and has not been registered
or otherwise qualified for sale under the securities laws of any state, (b) the Bond will not be listed on
any securities exchange, (c) there is no established market for the Bond and none is likely to develop,
(d) the offering of the Bond is not intended to be subject to the requirements of Rule 15c2 -12
promulgated under the Securities Exchange Act of 1934, as amended, (e) in connection with its purchase
of the Bond, the Issuer has not prepared or caused to be prepared, an official statement, private placement
memorandum or other offering document in connection with the sale and purchase of the Bond, (f) no
CUSIP has been requested or obtained for the Bond, and (g) the acquisition of the Bond will not be
closed through The Depository Trust Company or in book-entry form.
10. The signatory of this Certificate is a duly authorized officer of the Purchaser with the
authority to sign this Certificate on behalf of the Purchaser, and this Certificate has been duly authorized,
executed and delivered.
11. The Purchaser is a bank[1], any entity directly or indirectly controlled by the bank or under
common control with the bank, other than a broker, dealer or municipal securities dealer registered under
the Securities Exchange Act of 1934, or a consortium of such entities; or a municipal entity with funds
that are, at least in part, proceeds of, or fully or partially secure or pay, the purchaser’s issue of municipal
obligations (e.g., state revolving fund or bond bank).
[1] A) a banking institution organized under the laws of the United States or a Federal savings association, as defined in section 2(5) of the
Home Owners' Loan Act [12 USCS § 1462(5)], (B) a member bank of the Federal Reserve System, (C) any other banking institution or
savings association, as defined in section 2(4) of the Home Owners' Loan Act [12 USCS § 1462(4)], whether incorporated or not, doing
business under the laws of any State or of the United States, a substantial portion of the business of which consists of receiving deposits or
exercising fiduciary powers similar to those permitted to national banks under the authority of the Comptroller of the Currency pursuant to
the first section of Public Law 87-722 (12 U.S.C. 92a), and which is supervised and examined by State or Federal authority having
supervision over banks or savings associations, and which is not operated for the purpose of evading the provisions of this title, a nd (D) a
receiver, conservator, or other liquidating agent of any institution or firm included in clauses (A), (B), or (C) of this paragraph.” 15 U.S.C.S.
§ 78c(a)(6).
DATED as of ___________, 2020.
[PURCHASER]
[Name/Title]
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A B C D E F G H
# 1 AMORTIZATION SCHEDULE
City of Arlingtom - BANNER PRIVATE PLACEMENT BOND
20-year Limited Tax General Obligation Bond - Total Bond Amount $5,500,000 17-Jan-20
Estimated Amortization Schedule with NO Draw Down Provision
Repayments: Principal Payments December 1; Interest Payments June 1 and December 1.
Dated & Closing 7/1/2020 - 1st Payment Interest 12/1/2020; 1st Payment P&I 12/1/2020.
2.77%Annual P&I Payment Amount 343,449.44$
Payment Days Principal Interest Payment Unpaid Annual Forecast
Date 360*Amount Amount Amount Balance Payment Draw $
7/1/2020 5,500,000.00 5,500,000
8/1/2020 30 12,695.83 5,500,000.00
9/1/2020 30 12,695.83 5,500,000.00 -
10/1/2020 30 12,695.83 5,500,000.00 -
11/1/2020 30 12,695.83 5,500,000.00 -
12/1/2020 30 279,970.27 12,695.83 343,449.44 5,220,029.73 343,449.44 -
1/1/2021 30 12,049.57 5,220,029.73 -
2/1/2021 30 12,049.57 5,220,029.73 -
3/1/2021 30 12,049.57 5,220,029.73 -
4/1/2021 30 12,049.57 5,220,029.73 -
5/1/2021 30 12,049.57 5,220,029.73 -
6/1/2021 30 12,049.57 72,297.41 5,220,029.73 -
7/1/2021 30 12,049.57 5,220,029.73 -
8/1/2021 30 12,049.57 5,220,029.73 -
9/1/2021 30 12,049.57 5,220,029.73 -
10/1/2021 30 12,049.57 5,220,029.73 -
11/1/2021 30 12,049.57 5,220,029.73 -
12/1/2021 30 198,854.62 12,049.57 271,152.03 5,021,175.11 343,449.44 -
6/1/2022 180 69,543.28 69,543.28 5,021,175.11
12/1/2022 180 204,362.89 69,543.28 273,906.16 4,816,812.22 343,449.44
6/1/2023 180 66,712.85 66,712.85 4,816,812.22
12/1/2023 180 210,023.74 66,712.85 276,736.59 4,606,788.48 343,449.44
6/1/2024 180 63,804.02 63,804.02 4,606,788.48
12/1/2024 180 215,841.40 63,804.02 279,645.42 4,390,947.08 343,449.44
6/1/2025 180 60,814.62 60,814.62 4,390,947.08
12/1/2025 180 221,820.21 60,814.62 282,634.82 4,169,126.87 343,449.44
6/1/2026 180 57,742.41 57,742.41 4,169,126.87
12/1/2026 180 227,964.63 57,742.41 285,707.03 3,941,162.25 343,449.44
6/1/2027 180 54,585.10 54,585.10 3,941,162.25
12/1/2027 180 234,279.25 54,585.10 288,864.34 3,706,883.00 343,449.44
6/1/2028 180 51,340.33 51,340.33 3,706,883.00
12/1/2028 180 240,768.78 51,340.33 292,109.11 3,466,114.22 343,449.44
6/1/2029 180 48,005.68 48,005.68 3,466,114.22
12/1/2029 180 247,438.08 48,005.68 295,443.76 3,218,676.15 343,449.44
6/1/2030 180 44,578.66 44,578.66 3,218,676.15
12/1/2030 180 254,292.11 44,578.66 298,870.78 2,964,384.04 343,449.44
6/1/2031 180 41,056.72 41,056.72 2,964,384.04
12/1/2031 180 261,336.00 41,056.72 302,392.72 2,703,048.03 343,449.44
6/1/2032 180 37,437.22 37,437.22 2,703,048.03
12/1/2032 180 268,575.01 37,437.22 306,012.22 2,434,473.02 343,449.44
Interest Rate =
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A B C D E F G H
6/1/2033 180 33,717.45 33,717.45 2,434,473.02
12/1/2033 180 276,014.54 33,717.45 309,731.99 2,158,458.49 343,449.44
6/1/2034 180 29,894.65 29,894.65 2,158,458.49
12/1/2034 180 283,660.14 29,894.65 313,554.79 1,874,798.35 343,449.44
6/1/2035 180 25,965.96 25,965.96 1,874,798.35
12/1/2035 180 291,517.53 25,965.96 317,483.48 1,583,280.82 343,449.44
6/1/2036 180 21,928.44 21,928.44 1,583,280.82
12/1/2036 180 299,592.56 21,928.44 321,521.00 1,283,688.26 343,449.44
6/1/2037 180 17,779.08 17,779.08 1,283,688.26
12/1/2037 180 307,891.28 17,779.08 325,670.36 975,796.98 343,449.44
6/1/2038 180 13,514.79 13,514.79 975,796.98
12/1/2038 180 316,419.86 13,514.79 329,934.65 659,377.12 343,449.44
6/1/2039 180 9,132.37 9,132.37 659,377.12
12/1/2039 180 325,184.69 9,132.37 334,317.07 334,192.43 343,449.44
6/1/2040 180 4,628.57 4,628.57 334,192.43
12/1/2040 180 334,192.43 4,628.57 338,820.99 - 343,449.56
5,500,000.00 1,712,438.36 7,212,438.36 7,212,438.36 5,500,000
*Interest calculated on the basis of 30-day months and a 360-day year (30/360)..
2.77%Annual P&I Payment Amount 343,449.44$ Input Interest Rate
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A B C D E F G H
# 2 AMORTIZATION SCHEDULE
City of Arlingtom - BANNER PRIVATE PLACEMENT BOND
20-year Limited Tax General Obligation Bond - Total Bond Amount $5,500,000 17-Jan-20
Estimated Amortization Schedule With Draw Down Provision
Repayments: Principal Payments December 1; Interest Payments June 1 and December 1.
Dated & Closing 7/1/2020 - 1st Payment Interest 12/1/2020; 1st Payment P&I 12/1/2020.
2.77%Annual P&I Payment Amount 336,557.10$
Payment Days Principal Interest Payment Unpaid Annual Forecast
Date 360*Amount Amount Amount Balance Payment Draw $
7/1/2020 51,000.00 51,000
8/1/2020 30 117.73 371,525.00 320,525
9/1/2020 30 857.60 692,050.00 320,525
10/1/2020 30 1,597.48 1,012,576.00 320,526
11/1/2020 30 2,337.36 1,333,102.00 320,526
12/1/2020 30 328,569.68 3,077.24 336,557.10 1,325,058.32 336,557.10 320,526
1/1/2021 30 3,058.68 1,645,584.32 320,526
2/1/2021 30 3,798.56 1,966,110.32 320,526
3/1/2021 30 4,538.44 2,286,642.32 320,532
4/1/2021 30 5,278.33 2,607,174.32 320,532
5/1/2021 30 6,018.23 2,927,706.32 320,532
6/1/2021 30 6,758.12 29,450.35 3,248,238.32 320,532
7/1/2021 30 7,498.02 3,568,770.32 320,532
8/1/2021 30 8,237.91 3,889,302.32 320,532
9/1/2021 30 8,977.81 4,209,834.32 320,532
10/1/2021 30 9,717.70 4,530,366.32 320,532
11/1/2021 30 10,457.60 4,850,898.32 320,532
12/1/2021 30 251,020.23 11,197.49 307,106.75 4,920,410.09 336,557.10 320,532
6/1/2022 180 68,147.68 68,147.68 4,920,410.09
12/1/2022 180 200,261.74 68,147.68 268,409.42 4,720,148.35 336,557.10
6/1/2023 180 65,374.05 65,374.05 4,720,148.35
12/1/2023 180 205,808.99 65,374.05 271,183.05 4,514,339.36 336,557.10
6/1/2024 180 62,523.60 62,523.60 4,514,339.36
12/1/2024 180 211,509.90 62,523.60 274,033.50 4,302,829.46 336,557.10
6/1/2025 180 59,594.19 59,594.19 4,302,829.46
12/1/2025 180 217,368.72 59,594.19 276,962.91 4,085,460.74 336,557.10
6/1/2026 180 56,583.63 56,583.63 4,085,460.74
12/1/2026 180 223,389.84 56,583.63 279,973.47 3,862,070.90 336,557.10
6/1/2027 180 53,489.68 53,489.68 3,862,070.90
12/1/2027 180 229,577.74 53,489.68 283,067.42 3,632,493.16 336,557.10
6/1/2028 180 50,310.03 50,310.03 3,632,493.16
12/1/2028 180 235,937.04 50,310.03 286,247.07 3,396,556.12 336,557.10
6/1/2029 180 47,042.30 47,042.30 3,396,556.12
12/1/2029 180 242,472.50 47,042.30 289,514.80 3,154,083.63 336,557.10
6/1/2030 180 43,684.06 43,684.06 3,154,083.63
12/1/2030 180 249,188.98 43,684.06 292,873.04 2,904,894.65 336,557.10
6/1/2031 180 40,232.79 40,232.79 2,904,894.65
12/1/2031 180 256,091.52 40,232.79 296,324.31 2,648,803.13 336,557.10
6/1/2032 180 36,685.92 36,685.92 2,648,803.13
12/1/2032 180 263,185.25 36,685.92 299,871.18 2,385,617.87 336,557.10
Interest Rate =
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
72
73
74
75
A B C D E F G H
6/1/2033 180 33,040.81 33,040.81 2,385,617.87
12/1/2033 180 270,475.48 33,040.81 303,516.29 2,115,142.39 336,557.10
6/1/2034 180 29,294.72 29,294.72 2,115,142.39
12/1/2034 180 277,967.66 29,294.72 307,262.38 1,837,174.73 336,557.10
6/1/2035 180 25,444.87 25,444.87 1,837,174.73
12/1/2035 180 285,667.36 25,444.87 311,112.23 1,551,507.37 336,557.10
6/1/2036 180 21,488.38 21,488.38 1,551,507.37
12/1/2036 180 293,580.35 21,488.38 315,068.72 1,257,927.03 336,557.10
6/1/2037 180 17,422.29 17,422.29 1,257,927.03
12/1/2037 180 301,712.52 17,422.29 319,134.81 956,214.51 336,557.10
6/1/2038 180 13,243.57 13,243.57 956,214.51
12/1/2038 180 310,069.96 13,243.57 323,313.53 646,144.55 336,557.10
6/1/2039 180 8,949.10 8,949.10 646,144.55
12/1/2039 180 318,658.90 8,949.10 327,608.00 327,485.65 336,557.10
6/1/2040 180 4,535.68 4,535.68 327,485.65
12/1/2040 180 327,485.65 4,535.68 332,021.33 - 336,557.00
5,500,000.00 1,567,699.00 7,067,699.00 7,067,699.00 5,500,000
*Interest calculated on the basis of 30-day months and a 360-day year (30/360)..
Input Annual P&I Payment Amount 336,557.10$
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
A B C D E F G H
# 3 AMORTIZATION SCHEDULE
City of Arlingtom - BANNER PRIVATE PLACEMENT BOND
20-year Limited Tax General Obligation Bond - Total Bond Amount $5,500,000 21-Jan-20
Estimated Amortization Schedule with BREAKEVEN INTEREST RATE
Repayments: Principal Payments December 1; Interest Payments June 1 and December 1.
Dated & Closing 7/1/2020 - 1st Payment Interest 12/1/2020; 1st Payment P&I 12/1/2020.
2.55%Annual P&I Payment Amount 336,553.00$
Payment Days Principal Interest Payment Unpaid Annual Forecast
Date 360*Amount Amount Amount Balance Payment Draw $
7/1/2020 5,500,000.00 5,500,000
8/1/2020 30 11,687.50 5,500,000.00
9/1/2020 30 11,687.50 5,500,000.00 -
10/1/2020 30 11,687.50 5,500,000.00 -
11/1/2020 30 11,687.50 5,500,000.00 -
12/1/2020 30 278,115.50 11,687.50 336,553.00 5,221,884.50 336,553.00 -
1/1/2021 30 11,096.50 5,221,884.50 -
2/1/2021 30 11,096.50 5,221,884.50 -
3/1/2021 30 11,096.50 5,221,884.50 -
4/1/2021 30 11,096.50 5,221,884.50 -
5/1/2021 30 11,096.50 5,221,884.50 -
6/1/2021 30 11,096.50 66,579.03 5,221,884.50 -
7/1/2021 30 11,096.50 5,221,884.50 -
8/1/2021 30 11,096.50 5,221,884.50 -
9/1/2021 30 11,096.50 5,221,884.50 -
10/1/2021 30 11,096.50 5,221,884.50 -
11/1/2021 30 11,096.50 5,221,884.50 -
12/1/2021 30 203,394.95 11,096.50 269,973.97 5,018,489.55 336,553.00 -
6/1/2022 180 63,985.74 63,985.74 5,018,489.55
12/1/2022 180 208,581.52 63,985.74 272,567.26 4,809,908.04 336,553.00
6/1/2023 180 61,326.33 61,326.33 4,809,908.04
12/1/2023 180 213,900.35 61,326.33 275,226.67 4,596,007.69 336,553.00
6/1/2024 180 58,599.10 58,599.10 4,596,007.69
12/1/2024 180 219,354.80 58,599.10 277,953.90 4,376,652.89 336,553.00
6/1/2025 180 55,802.32 55,802.32 4,376,652.89
12/1/2025 180 224,948.35 55,802.32 280,750.68 4,151,704.54 336,553.00
6/1/2026 180 52,934.23 52,934.23 4,151,704.54
12/1/2026 180 230,684.53 52,934.23 283,618.77 3,921,020.00 336,553.00
6/1/2027 180 49,993.01 49,993.01 3,921,020.00
12/1/2027 180 236,566.99 49,993.01 286,559.99 3,684,453.01 336,553.00
6/1/2028 180 46,976.78 46,976.78 3,684,453.01
12/1/2028 180 242,599.45 46,976.78 289,576.22 3,441,853.57 336,553.00
6/1/2029 180 43,883.63 43,883.63 3,441,853.57
12/1/2029 180 248,785.73 43,883.63 292,669.37 3,193,067.83 336,553.00
6/1/2030 180 40,711.61 40,711.61 3,193,067.83
12/1/2030 180 255,129.77 40,711.61 295,841.39 2,937,938.06 336,553.00
6/1/2031 180 37,458.71 37,458.71 2,937,938.06
12/1/2031 180 261,635.58 37,458.71 299,094.29 2,676,302.48 336,553.00
6/1/2032 180 34,122.86 34,122.86 2,676,302.48
12/1/2032 180 268,307.29 34,122.86 302,430.14 2,407,995.20 336,553.00
Interest Rate =
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
72
73
74
75
A B C D E F G H
6/1/2033 180 30,701.94 30,701.94 2,407,995.20
12/1/2033 180 275,149.12 30,701.94 305,851.06 2,132,846.07 336,553.00
6/1/2034 180 27,193.79 27,193.79 2,132,846.07
12/1/2034 180 282,165.43 27,193.79 309,359.21 1,850,680.65 336,553.00
6/1/2035 180 23,596.18 23,596.18 1,850,680.65
12/1/2035 180 289,360.64 23,596.18 312,956.82 1,561,320.00 336,553.00
6/1/2036 180 19,906.83 19,906.83 1,561,320.00
12/1/2036 180 296,739.34 19,906.83 316,646.17 1,264,580.66 336,553.00
6/1/2037 180 16,123.40 16,123.40 1,264,580.66
12/1/2037 180 304,306.19 16,123.40 320,429.60 960,274.47 336,553.00
6/1/2038 180 12,243.50 12,243.50 960,274.47
12/1/2038 180 312,066.00 12,243.50 324,309.50 648,208.47 336,553.00
6/1/2039 180 8,264.66 8,264.66 648,208.47
12/1/2039 180 320,023.68 8,264.66 328,288.34 328,184.79 336,553.00
6/1/2040 180 4,184.36 4,184.36 328,184.79
12/1/2040 180 328,184.79 4,184.36 332,369.14 - 336,553.50
5,500,000.00 1,567,613.50 7,067,613.50 7,067,613.50 5,500,000
*Interest calculated on the basis of 30-day months and a 360-day year (30/360)..
2.55%Annual P&I Payment Amount 336,553.00$ Input Interest Rate
1410 Rocky Ridge Drive, Suite 140
Roseville, CA 95661
Tel: 916-945-5133
Letter of Intent Rev. 5/18/15 Page 1 of 4
March 3, 2020
Mr. Paul Ellis
Ms. Kristin Garcia
City of Arlington
238 N. Olympic Avenue
Arlington, WA 98223
Subject: Term Sheet for the City of Arlington
Based upon our discussions and preliminary review of the information provided to -date, Opus Bank (“Bank”) is pleased to present to the
City of Arlington (“Borrower”) this Letter of Intent which provides for approximately $5,500,000 in limited tax general obligation financing
(Credit Facility).
This letter is not meant to contain, nor shall it be construed as a commitment to make a loan, nor does this letter necessari ly contain all of
the terms and conditions involved in the proposed financing. Rather it is intended only to outline the basic terms of the proposed financing
that the Bank is prepared to consider, subject to the Bank’s credit approval, and from which final terms and documents will b e structured in
the event that a credit commitment is made and accepted . Naturally, a final commitment must be in writing, will be subject to various
conditions and will require the execution of a loan agreement and other documentation acceptable to the Bank.
In an effort to be responsive to your needs, we would like to be assured that the general terms we have outlined are acceptable to you before
we continue the loan application process and initiate our due diligence. Therefore we suggest you review the following term sheet and if
acceptable, please indicate your desire to proceed by signing and returning a copy to continue the due diligence process. Acceptance of this
Letter of Intent will constitute your instruction to the Bank to commence its due diligence and continue its loan approval pr ocess.
Once we have received your acceptance, we will begin the due diligence and credit approval process. This proposal, if not accepted in
writing and returned to us, will expire on 03/10/2020. The terms and conditions contained in this proposal will supersede any prior proposal.
If you have any questions, you can reach me at (916) 945-5133 or dsemenov@opusbank.com.
We appreciate the opportunity to build our relationship with you by proposing this financing and we look forward to a favorable response
from you.
Sincerely,
Dmitry A. Semenov
Senior Vice President, Public Finance
Page 2 of 4
TERM CREDIT FACILITY:
Borrower: City of Arlington
Proposed Loan Amount: Approximately $5,500,000 (amount to be finalized during due diligence process)
Purpose: Finance fire station construction and fund costs of issuance
Interest Rate: 2.64% (tax-exempt; bank-qualified; computed on the basis of a 360-day year of
twelve 30-day months)
Draw Funding: If the project schedule allows, the Credit Facility will be funded in monthly draws
over an 18-month Project Period. At the end of the Project Period, the Borrower
will have an opportunity to cancel any portion of the remaining unfunded
commitment without penalty, with the cancelled portion applied against the back
end of the amortization schedule. The remaining unfunded commitment will be
funded into an escrow account at the Bank to be used for future project costs.
Repayment: Annual principal payments on December 1, beginning on December 1, 2020.
Semi-annual interest payments on June 1 and December 1, commencing June 1,
2020.
Maturity: December 1, 2040
Average Life: Not to exceed 11.5 years
Prepayment: The following prepayment options are available:
A. Prepayment penalty of 5-5-5-5-5-4-4-4-4-4-3-3-2-2-1-(0-0-0-0-0)%,
corresponding to each year of the term; or
B. No prepayment is allowed in the first 10 years and then Credit Facility
can be prepaid without prepayment penalty.
Under both options above, up to 10% of outstanding principal amount can be
prepaid each year without penalty or limitation, as long as such prepayment is not
through refinancing.
Collateral: The Credit Facility will constitute a general obligation of the Borrower. It will be
secured by the Borrower’s irrevocable pledge to include in its budget and to levy
taxes annually on all taxable property within the Borrower’s assessment area as a
part of the property taxes authorized by law to be levied by the Borrower without
a vote of the people, in an amount sufficient, together with other money legally
available, to pay when due the debt service on the Credit Facility. The full faith,
credit and resources of the Borrower will be pledged irrevocably for the annual
levy and collection of the taxes and the prompt payment of the debt service on the
Credit Facility.
SUBJECT TO:
Standard and reasonable representations and warranties of the Borrower for a financing of this type including but not limited to
existence and authority, capitalization, accuracy of information presented, no litigation, etc.
Completion of due diligence and documentation customary for this type of transaction.
LETTER OF INTENT
City of Arlington
03/03/2020
Page 3 of 4
COVENANTS AND CONDITIONS:
Financial Reporting:
Annual audited financial statements
Annual budget
Annual report on property tax base, revenues, and collections
Other information as may be determined during due diligence process
Financial and Other Covenants: n/a
OTHER REQUIREMENTS:
Borrower is responsible for all costs of issuance, including, but not limited to bond counsel and bank’s counsel costs. The bank’s
counsel fees should not exceed $6,000.
Loan fee of $1,000 will cover the costs of issuance wires and draw processing, if necessary.
Failure to provide required financial information will be considered an event of default.
The default interest rate will be Interest Rate + 3.00%. The Borrower will be given a reasonable notice and opportunity to cure
the default before the default interest rate is assessed. Once an event of default is remedied to mutual satisfaction of the parties,
the default interest rate will be removed and the interest will accrue at the Interest Rate.
Should the Credit Facility become taxable for any reason, the Borrower will be required to pay a taxable rate equivalent (3.34%).
The bond counsel shall provide the tax opinion.
The Credit Facility will be funded within a reasonable time after completion of due diligence. Assuming efficient process, w e
estimate the funding date to be within 5-7 weeks of the award of the transaction. If the Credit Facility is not closed on or before
March 20, 2020, the Bank reserves the right to adjust the interest rate to reflect changes in market rates.
DISCLOSURES:
The Bank will book the Credit Facility as a loan, and, therefore, the additional provisions and conditions set forth in this letter shall be
included in the documentation, which shall include the following: the Credit Facility will be registered to the Bank, DTC will not be holding
the Credit Facility and the Credit Facility will not have a CUSIP; the Credit Facility will not be rated; there will not be a disclosure document;
authorized denominations shall be in the minimum amount of $250,000 and integral multiples of $1 thereof or as a single bond; and no
amendments to the issuing documents without the Bank’s prior consent. The Bank shall not be required to surrender the Credit Facility or
assignment thereof for payment of principal, other than for the final payment at maturity thereof .
Inasmuch as the Credit Facility represents a negotiated transaction, the Borrower understands, and hereby confirms, that the Bank is not
acting as a fiduciary of the Borrower, but rather is acting solely in its capacity as a lender, for its own account. The Bor rower acknowledges
and agrees that (i) the transaction contemplated herein is an arm’s length commercial transaction between the Borrower and the Bank and
its affiliates, (ii) in connection with such transaction, the Bank and its affiliates are acting solely as a principal and no t as an advisor including,
without limitation, a “Municipal Advisor” as such term is defined in Section 15B of the Securities and Exchange Act of 1934, as amended,
and the related final rules (the “Municipal Advisor Rules”), (iii) the Bank and its affiliate s are relying on the Bank exemption in the
Municipal Advisor Rules, (iv) the Bank and its affiliates have not provided any advice or assumed any advisory or fiduciary r esponsibility
in favor of the Borrower with respect to the transaction contemplated here by and the discussions, undertakings and procedures leading
thereto, (v) the Bank and its affiliates have financial and other interests that differ from those of the Borrower, and (vi) the Borrower has
consulted with its own financial, legal, accounting, tax and other advisors, as applicable, to the extent it deemed appropriate.
This letter is provided solely for your information and is delivered to you with the understanding that neither it, nor its substance, shall be
disclosed to any third person, except those who are in confidential relationship to you or where same is required by law.
If your application for business credit is denied, you have the right to a written statement of the specific reasons for the denial. To obtain
the statement, please contact Opus Bank Loan Servicing Department, 131 West Commonwealth Ave., Fullerton, CA 92832 or by telephone
at (855) 678-7562 within 60 days from the date you are notified of our decision. We will send you a written statement of reasons for the
denial within 30 days of receiving your request for the statement.
Page 4 of 4
NOTICE: The federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the ba sis of race,
color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all
or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exer cised any right
under the Consumer Credit Protection Act. The federal agency that administers compliance with this law concerning this creditor is: FDIC
Consumer Response Center, 1100 Walnut Street, Box #11, Kansas City, MO 64106.
This proposal is for discussion purposes only. It does not repre sent a commitment to lend on the part of Opus Bank. If the proposal meets
with your approval, it is then subject to credit approval based upon due diligence, execution and delivery of all documentati on required by
the Bank in form and substance satisfactory to Opus Bank and its counsel.
Borrower: City of Arlington
Date:
Signature
Print Name: Title:
Prepayment Option Selected:
March 2, 2020
Paul Ellis
City Administrator
City of Arlington, WA 98223
Project: CITY OF ARLINGTON 2020 LIMITED TAX GENERAL OBLIGATION BOND
Sterling National Bank (“SNB”) is pleased to present this financing proposal (the “Term Sheet”) to the City
of Arlington, subject to final credit approval, in connection with the above-referenced project. Working
with SNB has several major advantages, including:
Experience and Expertise: Each member of the SNB Public Finance team has significant
experience regarding the financing of essential governmental equipment and projects, and can
help you document your financing in a manner that complies with applicable local laws.
Financial Capability: The SNB Public Finance team is part of Sterling National Bank, a publicly
traded commercial bank, which has the capability of funding tax-exempt financings on a
nationwide basis.
Reliability: The SNB Public Finance team prides itself on excellent customer service and the
prompt closing of awarded transactions.
Simplified Financing Structure: SNB is proposing to finance 100% of the City’s funding of a new
fire station and costs of issuance of the bonds.
We look forward to working with you and your team on this assignment, and please do not hesitate to
contact us with any questions, comments or concerns. We are positive that you’ll enjoy working with
SNB.
Very truly yours,
John Riddle
John Riddle
Managing Director
jriddle@snb.com
John Riddle
Managing Director
Sterling National Bank
999 Corporate Drive Suite 100
Ladera Ranch, CA 92649
949-370-2907
Email: jriddle@snb.com
Website: www.snb.com
2 | P a g e
SNB Confidential Term Sheet
TERM SHEET
TYPE OF FINANCING: Limited Tax General Obligation Bond (the “Bond”) to be directly
purchased through a private placement.
ISSUER/BORROWER: City of Arlington, WA (the “City”)
PURCHASER/LENDER: Sterling National Bank, or its designee or assignee (the
“Purchaser”)
PURCHASER’S COUNSEL: Gilmore & Bell, P.C.
BOND COUNSEL: Foster Garvey
AMOUNT OF BOND: $5,500,000 (subject to adjustment)
FINAL MATURITY: December 1, 2039
INTEREST RATES: 2.35% -20 year- Fixed for the term of the financing
TAX STATUS: Bank Qualified & Tax-exempt
ANTICIPATED CLOSING DATE: Expected to be on or before July 1, 2020
INTEREST RATE LOCK: The Interest Rates quoted above will remain locked through the
Anticipated Closing Date of July 1, 2020.
PRINCIPAL PAYMENT STRUCTURE: Due annually, commencing on 12/1/2020 through final maturity
and as further outlined in the City’s request for proposal dated
January 8, 2020.
INTEREST PAYMENT STRUCTURE: Due annually, commencing on 12/1/2020 through final maturity.
Based on a 30/360 calculation.
PREPAYMENT/CALL OPTION: The City shall have the right to prepay the Bond, in whole or in
part, in accordance with the following, provided that the City
gives the Purchaser at least thirty (30) days prior written notice
of its intent to do so.
John Riddle
Managing Director
Sterling National Bank
999 Corporate Drive Suite 100
Ladera Ranch, CA 92649
949-370-2907
Email: jriddle@snb.com
Website: www.snb.com
3 | P a g e
SNB Confidential Term Sheet
FEES OF THE PURCHASER: None. Sterling National Bank does not charge any fees.
Any costs of issuance incurred by the City such as financial
advisory, placement agent and bond counsel shall be the
responsibility of the City and can be included in the borrowed
amount.
DOCUMENTATION: This financing is subject to the execution of mutually acceptable
documentation to be prepared by Bond Counsel at the City’s
expense. Documents, including validity and tax opinions, will
include those that are normal and customary for a transaction of
this type and size.
IRS CIRCULAR 230 DISCLOSURE: The Purchaser and its affiliates do not provide tax advice.
Accordingly, any discussion of U.S. tax matters contained herein
(including any attachments) is not written or intended to be used,
and cannot be used, in connection with the promotion,
marketing or recommendation by anyone unaffiliated with the
Purchaser of any of the matters addressed herein or for the
purpose of avoiding U.S. tax-related penalties.
ADVISORY DISCLOSURE: The Purchaser is not a registered municipal advisor as defined
under the Dodd-Frank Wall Street Reform and Consumer
Protection Act and its related rules and regulations. In providing
this Term Sheet, the Purchaser is not providing any advice,
advisory services, or recommendations with respect to the
structure, timing, terms, or similar matters concerning an
issuance of municipal securities. This Term Sheet is a
commercial, arms-length proposal that does not create a
fiduciary duty by the Purchaser to the City. The City may engage,
separately and at its own cost, an advisor to review this Term
Sheet and the proposed transaction on the City’s behalf.
Prepayment Period Prepayment Premium
Closing Date – 12/1/2023 102%
12/2/2023 – 12/1/2025 101%
12/2/2025 and thereafter 0
4 | P a g e
SNB Confidential Term Sheet
DIRECT BANK LOAN: The Purchaser intends to classify the financing as a privately
placed loan. As such, the financing will feature (but will not be
limited to) the following restrictions:
The financing will not be assigned a CUSIP
The financing will not be registered with the DTC;
The financing will feature transfer restrictions such that
transfer is restricted to Bank affiliates, or to Qualified
Institutional Buyers, each of which is a commercial bank
with minimum capital, etc.;
The financing cannot be marketed pursuant to an
offering document.
CREDIT APPROVAL: This Term Sheet is subject to formal credit approval by the
Purchaser and the negotiation of mutually acceptable
documentation.
PROPOSAL EXPIRATION: Unless accepted by the City or extended in writing by the
Purchaser at its sole discretion, this Term Sheet shall expire on
March 18, 2020. Once accepted, this Term Sheet shall expire if
the Bond is not issued and purchased by July 2, 2020.
Upon receipt of the signed Term Sheet, we will endeavor to provide you with a timely commitment and
we will use good faith efforts to negotiate and purchase the Bond based on the terms herein. It is a
pleasure to offer this financing proposal to the City, and we look forward to your favorable response.
Respectfully –
Sterling National Bank
John Riddle
John Riddle
Managing Director
5 | P a g e
SNB Confidential Term Sheet
Nominal Annual Rate: 2.350%
Date Payment Interest Principal Balance
Loan 7/1/2020 5,500,000.00
1 12/1/2020 343,190.93 54,178.77 289,012.16 5,210,987.84
2 12/1/2021 343,190.93 122,458.21 220,732.72 4,990,255.12
3 12/1/2022 343,190.93 117,271.00 225,919.93 4,764,335.19
4 12/1/2023 343,190.93 111,961.88 231,229.05 4,533,106.14
5 12/1/2024 343,190.93 106,527.99 236,662.94 4,296,443.20
6 12/1/2025 343,190.93 100,966.42 242,224.51 4,054,218.69
7 12/1/2026 343,190.93 95,274.14 247,916.79 3,806,301.90
8 12/1/2027 343,190.93 89,448.09 253,742.84 3,552,559.06
9 12/1/2028 343,190.93 83,485.14 259,705.79 3,292,853.27
10 12/1/2029 343,190.93 77,382.05 265,808.88 3,027,044.39
11 12/1/2030 343,190.93 71,135.54 272,055.39 2,754,989.00
12 12/1/2031 343,190.93 64,742.24 278,448.69 2,476,540.31
13 12/1/2032 343,190.93 58,198.70 284,992.23 2,191,548.08
14 12/1/2033 343,190.93 51,501.38 291,689.55 1,899,858.53
15 12/1/2034 343,190.93 44,646.68 298,544.25 1,601,314.28
16 12/1/2035 343,190.93 37,630.89 305,560.04 1,295,754.24
17 12/1/2036 343,190.93 30,450.22 312,740.71 983,013.53
18 12/1/2037 343,190.93 23,100.82 320,090.11 662,923.42
19 12/1/2038 343,190.93 15,578.70 327,612.23 335,311.19
20 12/1/2039 343,190.93 7,879.74 335,311.19 0.00
343,190.93 7,879.74 335,311.19
Grand Totals 6,863,818.60 1,363,818.60 5,500,000.00
Agreed to and Accepted by:
City of Arlington, WA
(Name)
(Title)
(Date)
Mar 4, 2020 1:59 pm Prepared by Piper Sandler & Co. (k:\analysis\dbc\city\Arlington:ARLNGTN‐2020LTGO)
TABLE OF CONTENTS
City of Arlington, Washington
Proposed 2020 LTGO Bonds
BQ Option
10‐Year Call
Report Page
Disclaimer ...................................1
Sources and Uses of Funds ............................ 2
Bond Debt Service ................................3
Bond Pricing ..................................5
Bond Summary Statistics ............................. 7
Mar 4, 2020 1:59 pm Prepared by Piper Sandler & Co. (k:\analysis\dbc\city\Arlington:ARLNGTN‐2020LTGO) Page 1
DISCLAIMER
City of Arlington, Washington
Proposed 2020 LTGO Bonds
BQ Option
10‐Year Call
Piper Sandler is providing the information contained herein for discussion purposes only in anticipation of being engaged to serve as underwriter or
placement agent on a future transaction and not as a financial advisor or municipal advisor. In providing the information contained herein, Piper
Sandler is not recommending an action to you and the information provided herein is not intended to be and should not be construed as a '
recommendation' or 'advice' within the meaning of Section 15B of the Securities Exchange Act of 1934. Piper Sandler is not acting as an advisor to
you and does not owe a fiduciary duty pursuant to Section 15B of the Exchange Act or under any state law to you with respect to the information
and material contained in this communication. As an underwriter or placement agent, Piper Sandler's primary role is to purchase or arrange for the
placement of securities with a view to distribution in an arm's‐length commercial transaction, is acting for its own interests and has financial and
other interests that differ from your interests. You should discuss any information and material contained in this communication with any and all
internal or external advisors and experts that you deem appropriate before acting on this information or material.
The information contained herein may include hypothetical interest rates or interest rate savings for a potential refunding. Interest rates used
herein take into consideration conditions in today's market and other factual information such as credit rating, geographic location and market
sector. Interest rates described herein should not be viewed as rates that Piper Sandler expects to achieve for you should we be selected to act as
your underwriter or placement agent. Information about interest rates and terms for SLGs is based on current publically available information and
treasury or agency rates for open‐market escrows are based on current market interest rates for these types of credits and should not be seen as
costs or rates that Piper Sandler could achieve for you should we be selected to act as your underwriter or placement agent. More particularized
information and analysis may be provided after you have engaged Piper Sandler as an underwriter or placement agent or under certain other
exceptions as describe in the Section 15B of the Exchange Act.
Mar 4, 2020 1:59 pm Prepared by Piper Sandler & Co. (k:\analysis\dbc\city\Arlington:ARLNGTN‐2020LTGO) Page 2
SOURCES AND USES OF FUNDS
City of Arlington, Washington
Proposed 2020 LTGO Bonds
BQ Option
10‐Year Call
Dated Date 04/01/2020
Delivery Date 04/01/2020
Sources:
Bond Proceeds:
Par Amount 5,015,000.00
Premium 559,803.55
5,574,803.55
Uses:
Project Fund Deposits:
Project Fund (Fire Station) 5,500,000.00
Cost of Issuance:
Other Cost of Issuance 35,000.00
Delivery Date Expenses:
Underwriter's Discount 35,105.00
Other Uses of Funds:
Additional Proceeds 4,698.55
5,574,803.55
Mar 4, 2020 1:59 pm Prepared by Piper Sandler & Co. (k:\analysis\dbc\city\Arlington:ARLNGTN‐2020LTGO) Page 3
BOND DEBT SERVICE
City of Arlington, Washington
Proposed 2020 LTGO Bonds
BQ Option
10‐Year Call
Dated Date 04/01/2020
Delivery Date 04/01/2020
Annual
Period Debt Debt
Ending Principal Coupon Interest Service Service
06/01/2020 ‐ ‐ 25,075 25,075 ‐
12/01/2020 125,000 3.000% 75,225 200,225 225,300
06/01/2021 ‐ ‐ 73,350 73,350 ‐
12/01/2021 195,000 3.000% 73,350 268,350 341,700
06/01/2022 ‐ ‐ 70,425 70,425 ‐
12/01/2022 200,000 3.000% 70,425 270,425 340,850
06/01/2023 ‐ ‐ 67,425 67,425 ‐
12/01/2023 205,000 3.000% 67,425 272,425 339,850
06/01/2024 ‐ ‐ 64,350 64,350 ‐
12/01/2024 215,000 3.000% 64,350 279,350 343,700
06/01/2025 ‐ ‐ 61,125 61,125 ‐
12/01/2025 220,000 3.000% 61,125 281,125 342,250
06/01/2026 ‐ ‐ 57,825 57,825 ‐
12/01/2026 225,000 3.000% 57,825 282,825 340,650
06/01/2027 ‐ ‐ 54,450 54,450 ‐
12/01/2027 235,000 3.000% 54,450 289,450 343,900
06/01/2028 ‐ ‐ 50,925 50,925 ‐
12/01/2028 240,000 3.000% 50,925 290,925 341,850
06/01/2029 ‐ ‐ 47,325 47,325 ‐
12/01/2029 245,000 3.000% 47,325 292,325 339,650
06/01/2030 ‐ ‐ 43,650 43,650 ‐
12/01/2030 255,000 3.000% 43,650 298,650 342,300
06/01/2031 ‐ ‐ 39,825 39,825 ‐
12/01/2031 260,000 3.000% 39,825 299,825 339,650
06/01/2032 ‐ ‐ 35,925 35,925 ‐
12/01/2032 270,000 3.000% 35,925 305,925 341,850
06/01/2033 ‐ ‐ 31,875 31,875 ‐
12/01/2033 280,000 3.000% 31,875 311,875 343,750
06/01/2034 ‐ ‐ 27,675 27,675 ‐
12/01/2034 285,000 3.000% 27,675 312,675 340,350
06/01/2035 ‐ ‐ 23,400 23,400 ‐
12/01/2035 295,000 3.000% 23,400 318,400 341,800
06/01/2036 ‐ ‐ 18,975 18,975 ‐
12/01/2036 305,000 3.000% 18,975 323,975 342,950
06/01/2037 ‐ ‐ 14,400 14,400 ‐
12/01/2037 310,000 3.000% 14,400 324,400 338,800
06/01/2038 ‐ ‐ 9,750 9,750 ‐
12/01/2038 320,000 3.000% 9,750 329,750 339,500
06/01/2039 ‐ ‐ 4,950 4,950 ‐
12/01/2039 330,000 3.000% 4,950 334,950 339,900
5,015,000 1,695,550 6,710,550 6,710,550
Mar 4, 2020 1:59 pm Prepared by Piper Sandler & Co. (k:\analysis\dbc\city\Arlington:ARLNGTN‐2020LTGO) Page 4
BOND DEBT SERVICE
City of Arlington, Washington
Proposed 2020 LTGO Bonds
BQ Option
10‐Year Call
Dated Date 04/01/2020
Delivery Date 04/01/2020
Period Debt
Ending Principal Coupon Interest Service
12/01/2020 125,000 3.000% 100,300 225,300
12/01/2021 195,000 3.000% 146,700 341,700
12/01/2022 200,000 3.000% 140,850 340,850
12/01/2023 205,000 3.000% 134,850 339,850
12/01/2024 215,000 3.000% 128,700 343,700
12/01/2025 220,000 3.000% 122,250 342,250
12/01/2026 225,000 3.000% 115,650 340,650
12/01/2027 235,000 3.000% 108,900 343,900
12/01/2028 240,000 3.000% 101,850 341,850
12/01/2029 245,000 3.000% 94,650 339,650
12/01/2030 255,000 3.000% 87,300 342,300
12/01/2031 260,000 3.000% 79,650 339,650
12/01/2032 270,000 3.000% 71,850 341,850
12/01/2033 280,000 3.000% 63,750 343,750
12/01/2034 285,000 3.000% 55,350 340,350
12/01/2035 295,000 3.000% 46,800 341,800
12/01/2036 305,000 3.000% 37,950 342,950
12/01/2037 310,000 3.000% 28,800 338,800
12/01/2038 320,000 3.000% 19,500 339,500
12/01/2039 330,000 3.000% 9,900 339,900
5,015,000 1,695,550 6,710,550
Mar 4, 2020 1:59 pm Prepared by Piper Sandler & Co.(k:\analysis\dbc\city\Arlington:ARLNGTN‐2020LTGO) Page 5
BOND PRICING
City of Arlington, Washington
Proposed 2020 LTGO Bonds
BQ Option
10‐Year Call
Maturity Yield to Call Call Call Date Call Price Premium
Bond Component Date Amount Rate Yield Price Maturity Date Price for Arb Yield for Arb Yield (‐Discount)
Serial Bonds:
12/01/2020 125,000 3.000% 0.810% 101.452 ‐ ‐ ‐ ‐ ‐ 1,815.00
12/01/2021 195,000 3.000% 0.840% 103.566 ‐ ‐ ‐ ‐ ‐ 6,953.70
12/01/2022 200,000 3.000% 0.870% 105.601 ‐ ‐ ‐ ‐ ‐ 11,202.00
12/01/2023 205,000 3.000% 0.890% 107.594 ‐ ‐ ‐ ‐ ‐ 15,567.70
12/01/2024 215,000 3.000% 0.910% 109.527 ‐ ‐ ‐ ‐ ‐ 20,483.05
12/01/2025 220,000 3.000% 0.940% 111.341 ‐ ‐ ‐ ‐ ‐ 24,950.20
12/01/2026 225,000 3.000% 1.010% 112.797 ‐ ‐ ‐ ‐ ‐ 28,793.25
12/01/2027 235,000 3.000% 1.100% 113.931 ‐ ‐ ‐ ‐ ‐ 32,737.85
12/01/2028 240,000 3.000% 1.190% 114.861 ‐ ‐ ‐ ‐ ‐ 35,666.40
12/01/2029 245,000 3.000% 1.270% 115.689 ‐ ‐ ‐ ‐ ‐ 38,438.05
12/01/2030 255,000 3.000% 1.340% 115.002 C 1.475% 12/01/2029 100.000 12/01/2029 100.000 38,255.10
2,360,000 254,862.30
Term Bonds:
12/01/2031 260,000 3.000% 1.630% 112.205 C 2.083% 12/01/2029 100.000 12/01/2029 100.000 31,733.00
12/01/2032 270,000 3.000% 1.630% 112.205 C 2.083% 12/01/2029 100.000 12/01/2029 100.000 32,953.50
12/01/2033 280,000 3.000% 1.630% 112.205 C 2.083% 12/01/2029 100.000 12/01/2029 100.000 34,174.00
12/01/2034 285,000 3.000% 1.630% 112.205 C 2.083% 12/01/2029 100.000 12/01/2029 100.000 34,784.25
12/01/2035 295,000 3.000% 1.630% 112.205 C 2.083% 12/01/2029 100.000 12/01/2029 100.000 36,004.75
1,390,000 169,649.50
Term Bonds:
12/01/2036 305,000 3.000% 1.790% 110.695 C 2.320% 12/01/2029 100.000 12/01/2029 100.000 32,619.75
12/01/2037 310,000 3.000% 1.790% 110.695 C 2.320% 12/01/2029 100.000 12/01/2029 100.000 33,154.50
12/01/2038 320,000 3.000% 1.790% 110.695 C 2.320% 12/01/2029 100.000 12/01/2029 100.000 34,224.00
12/01/2039 330,000 3.000% 1.790% 110.695 C 2.320% 12/01/2029 100.000 12/01/2029 100.000 35,293.50
1,265,000 135,291.75
5,015,000 559,803.55
Mar 4, 2020 1:59 pm Prepared by Piper Sandler & Co.(k:\analysis\dbc\city\Arlington:ARLNGTN‐2020LTGO) Page 6
BOND PRICING
City of Arlington, Washington
Proposed 2020 LTGO Bonds
BQ Option
10‐Year Call
Dated Date 04/01/2020
Delivery Date 04/01/2020
First Coupon 06/01/2020
Par Amount 5,015,000.00
Premium 559,803.55
Production 5,574,803.55 111.162583%
Underwriter's Discount ‐35,105.00 ‐0.700000%
Purchase Price 5,539,698.55 110.462583%
Accrued Interest ‐
Net Proceeds 5,539,698.55
Mar 4, 2020 1:59 pm Prepared by Piper Sandler & Co. (k:\analysis\dbc\city\Arlington:ARLNGTN‐2020LTGO) Page 7
BOND SUMMARY STATISTICS
City of Arlington, Washington
Proposed 2020 LTGO Bonds
BQ Option
10‐Year Call
Dated Date 04/01/2020
Delivery Date 04/01/2020
Last Maturity 12/01/2039
Arbitrage Yield 1.494187%
True Interest Cost (TIC) 1.936348%
Net Interest Cost (NIC) 2.071631%
All‐In TIC 2.002833%
Average Coupon 3.000000%
Average Life (years) 11.270
Weighted Average Maturity (years) 11.333
Duration of Issue (years) 9.638
Par Amount 5,015,000.00
Bond Proceeds 5,574,803.55
Total Interest 1,695,550.00
Net Interest 1,170,851.45
Total Debt Service 6,710,550.00
Maximum Annual Debt Service 343,900.00
Average Annual Debt Service 341,214.41
Underwriter's Fees (per $1000)
Average Takedown ‐
Other Fee 7.000000
Total Underwriter's Discount 7.000000
Bid Price 110.462583
Par Average Average PV of 1 bp
Bond Component Value Price Coupon Life change
Serial Bonds 2,360,000.00 110.799 3.000% 6.107 1,446.65
Term Bonds 1,390,000.00 112.205 3.000% 13.728 1,320.50
Term Bonds 1,265,000.00 110.695 3.000% 18.200 1,189.10
5,015,000.00 11.270 3,956.25
All‐In Arbitrage
TIC TIC Yield
Par Value 5,015,000.00 5,015,000.00 5,015,000.00
+ Accrued Interest ‐ ‐ ‐
+ Premium (Discount) 559,803.55 559,803.55 559,803.55
‐ Underwriter's Discount ‐35,105.00 ‐35,105.00
‐ Cost of Issuance Expense ‐35,000.00
‐ Other Amounts ‐ ‐ ‐
Target Value 5,539,698.55 5,504,698.55 5,574,803.55
Target Date 04/01/2020 04/01/2020 04/01/2020
Yield 1.936348% 2.002833% 1.494187%
Proposal to Provide
Underwriter or Private Placement Services
to
THE CITY OF ARLINGTON, WASHINGTON
March 4, 2020 JIM NELSON SENIOR VICE PRESIDENT D.A. DAVIDSON & CO. COLUMBIA CENTER, 701 FIFTH AVE., SUITE 4050 SEATTLE, WA 98104 PHONE: (206) 389-4062 CELL: (206) 713-9354 EMAIL: JNELSON@DADCO.COM
Fixed Income Capital Markets Columbia Center • 701 5th Avenue, Suite 4050 • Seattle, WA 98104 • (206) 389-4062 • 1-888-389-8001 • jnelson@dadco.com
March 4, 2020 Mr. Paul Ellis, City Administrator Ms. Kristin Garcia, Finance Director City of Arlington, 238 N. Olympic Avenue, Arlington, Washington 98223 Dear Paul and Kristin: Thank you for the opportunity to present our qualifications to serve as bond underwriter or placement agent to the City of Arlington. We hope you will consider our key strengths in your evaluation: Extensive Relevant Bond Financing Experience – Lead banker or placement agent Jim Nelson has been in the local public finance business for over 30 years and has originated over $5 billion of tax-exempt financings. He serves a number of Snohomish County municipalities, as well as a large number of Washington cities. Secondary banker Dave Trageser has served municipal clients for over 30 years and has also originated over $5 billion of tax-exempt financings. Together, we serve the largest number of cities in Washington State. Our unmatched Snohomish County financing knowledge and expertise will help us to deliver an optimal debt structure efficiently, treating your time and effort as the valuable resources they are. Our clients include: Mukilteo, Mukilteo Water & Wastewater District, Lake Stevens, Lake Stevens Sewer District, Stanwood, North County Regional Fire Authority, Snohomish County Fire District No. 21, Snohomish County Fire District No. 7, Monroe, Sultan, Snohomish, Mill Creek, Arlington School District, Marysville School District, Everett School District, and Edmonds School District, among others. Underwriting and Distribution Capabilities – D.A. Davidson will provide the City with resources and a perspective not found at other underwriting firms. As the only financial services firm with a full-time underwriting desk in Washington, we have extensive firsthand knowledge of the municipal bond market and patterns of investor demand for Washington general obligation bonds. We are therefore best equipped to price your bonds to achieve the lowest borrowing cost, and to recognize when bank placement rates are competitive with public sales. Creative Financing Solutions – For the Smokey Point Fire Station project, we can provide various payment structures and show you the impact on the interest rate if you consider a shorter prepayment option, such as a 5-year Call Date. Our fire station financing expertise (Jim Nelson has completed the largest number of fire station projects in Washington for fire districts and cities) and rating expertise (Maura Lentini, a former Moody’s rating analyst in our Seattle office) will benefit the City by making the strongest case for the City to rating analysts. Team Depth and Expertise – Our team brings over 145 years of combined experience to evaluate bond structures and placement options. Suzanne Eide has provided quantitative analysis for over 300 Washington issues totaling a par amount over $4.5 billion since 2010, including bond issues for municipalities in Snohomish County. The Davidson team is rounded out by Maura Lentini, who brings credit and rating expertise, Mark Froio, who manages our Seattle municipal underwriting desk, and Crystal Vogl, who brings continuing disclosure expertise to our clients. We would be honored to devote our experience and resources to serve the City of Arlington. Best Regards, Jim Nelson Senior Vice President D.A. Davidson & Co.
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1. Structuring and Marketing Approach We understand that the City will be funding $5,500,000 for the new fire station. We propose doing some analysis to support discussions with the City about the optimal final maturity for the bond issuance, taking into account the useful life of the improvements, the interest rate sensitivity of the bonds, your goals for the City’s debt service structure, and the term preferences of potential buyers of the bonds. The City of Arlington is in an excellent credit position. With the General Fund cash position rising to 31%, low pro forma direct debt, and rapid growth of the City’s population and AV, there is the possibility for a further rating upgrade, particularly from S&P. We believe some of the approaches below could benefit the City. 1. Bank Qualification (BQ). We highly recommend designating the bonds as bank qualified if you have no additional debt plans in 2020, or can stay under the $10 million tax-exempt reasonable expectation test. 2. Delayed Closing Date. The City can close up to 6 weeks after the pricing date without a yield penalty, thus locking in favorable rates without paying unnecessary interest before construction funds are needed. Private Placement Option. As part of our service to the City, we are happy to re-visit the private placement option. As Placement Agent, Davidson develops and circulates a Request for Indicative Rates with an accompanying Term Sheet (and supporting information that banks typically request) to active bank purchasers (approximately 30 banks). Our process and the information distributed creates competition amongst the banks, resulting in rates that are often competitive with a public bond sale. 2. Firm Qualifications and Experience
Established in 1935, D.A. Davidson & Co. is a super-regional investment bank, with over 1,310 employees across 85 offices, that is a subsidiary of the holding company D.A. Davidson Companies, together with other affiliates. D.A. Davidson & Co. (“Davidson”) is the most active municipal negotiated underwriter by number of issues in Washington in 2013-2019 (according to Thomson Reuters). Davidson is the largest full-service independent broker-dealer headquartered in the Western U.S., based on total financial consultants. In total, the firm has $54.09 billion of assets under management as of December 31, 2019. Davidson’s public finance investment banking staff totals 40 professionals located in Seattle, Spokane, Denver, Great Falls, Bozeman, Omaha, Kansas City, Norman, Des Moines, Roseville (California) and Portland. Davidson’s commitment to public finance in the Northwest is illustrated by having the only local full-time underwriting and trading desk in Washington and assembling a team comprised of the most seasoned public finance bankers and quantitative analysts in the Northwest. During 2019, Davidson senior-managed 31 Washington public finance transactions for a total par amount of over $734 million (not including all of the private placements we worked on). Despite our regional focus in the Northwest, Davidson ranks among the nation’s top investment banks in municipal underwriting activity. Davidson underwrote 367 public finance transactions with volume in excess of $4.7 billion in 2019. Benefit to the City of Selecting Davidson Market Leadership. With 166 professionals in 28 locations, Davidson’s Fixed Income Capital Markets group offers nationwide municipal bond underwriting, sales and trading with a powerful retail distribution network. We underwrote over 2,350 municipal bond issues totaling over $24.3 billion from 2013-2019. Expert Structuring Guidance. Due to our depth of relevant experience and lead banker Jim Nelson’s financing expertise, Davidson is uniquely positioned to help you evaluate your structuring alternatives. We believe the City of Arlington will benefit most from selecting Davidson as underwriter or placement agent because of the time and resources we devote to the planning, design and implementation of financing plans. Rating Experience. Davidson’s team is expert in the ratio analysis used by the credit rating agencies to measure the relative credit quality of municipal bond issuers. Davidson’s own proprietary models assist us in preparing rating
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presentations, anticipating rating outcomes, and structuring financing solutions for our clients. As an example, we assisted the following municipalities in achieving benchmark ratings: City of Mukilteo (AAA), Mukilteo Water & Wastewater District (AA+), City of DuPont (AA+), City of Fircrest (AA+), Central Whidbey Island Fire & Rescue (1 st AAA in Washington for a Fire District), and King County Fire District No. 16 (2 nd AAA in Washington for a Fire District). Smooth Process. Davidson’s team has worked with the City’s bond attorney and potential private placement buyers on many bond issues. Our excellent working relationships with the parties involved will ensure a smooth bond issuance for the City. We strive to produce a trouble-free financing that fully meets the City’s needs and closes on time. Snohomish County Expertise. Snohomish County issuers are a high priority for Davidson – Jim Nelson and Dave Trageser have completed the largest number of financings for issuers within Snohomish County. Our team is able to apply this in-depth knowledge base to credit rating presentations and/or negotiating with banks, as well as highlighting the economic developments occurring in the County. We consider ourselves the “Snohomish County Experts” – representing more Snohomish County issuers than any other firm.
Mr. Nelson’s References City of Stanwood Mr. David Hammond, Finance Director Phone: (360) 629-2181 Email: david.hammond@ci.stanwood.wa.us
North County Regional Fire Authority Mr. John Cermak, Fire Chief (or Randy Krumm, Fin. Director) Phone: (360) 629-2184 Email:jcermak@northcountyfireems.com City of Mill Creek Ms. Jodie Gunderson, Administrative Supervisor Phone: (425) 921-5734 Email: jodieg@cityofmillcreek.com
Snohomish County Fire District No. 7 Ms. Camille Tabor, Chief Financial Officer Phone: (360) 282-3965 Email: ctabor@snofire7.org City of Sultan Mr. Will Ibershof, City Administrator Phone: (360) 793-1149 Email: will.ibershof@ci.sultan.wa.us
Mukilteo Water & Wastewater District Mr. Jim Voetberg, General Manager Phone: (425) 355-3355 Email: jimv@mukilteowwd.org Municipal Distribution Capabilities Sales Force That Specializes in Selling Municipal Bonds: Given the importance of municipal bonds at Davidson, we attract salespeople who have a strong base of municipal buyers for these bond issues. The Davidson sales force knows the type of municipal products that investors are looking for and how to address buyer concerns regarding length of maturity, coupon structure, security features and call features. Municipal Underwriting/Trading Desks: Davidson will underwrite the City of Arlington’s bonds from Seattle, where we are known for an in-depth knowledge of the Washington municipal marketplace that contributes to the aggressive pricing we deliver to clients. We are the major market-maker in Washington municipal bonds. We maintain regional trading desks in Seattle, Denver, and Omaha staffed with 15 trading and syndicate underwriting professionals. Our secondary market activity ensures that our traders and underwriters are knowledgeable about current market rates and changing investor preferences. Institutional Sales: Davidson’s institutional sales force is composed of 57 experienced specialists located in 16 offices nationwide with over 1,200 national, regional and local accounts and strong institutional relationships. These sales professionals provide us with extensive access to both regional and major national institutional portfolio and fund managers who are active buyers of municipal bonds. D.A. Davidson’s distribution capabilities and financial strength as a firm enable us to provide the capital and expertise to underwrite bonds in any market situation.
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3. Project Team Members: Roles, Location, and Biographical Information
Jim Nelson will be the lead banker or placement agent for the City of Arlington’s LTGO bonds, managing the Davidson staff and coordinating with City staff, the bond attorney, and other parties to the financing. Jim will devote his full attention and expertise through the successful completion of the City’s LTGO issuance. Jim is available to attend meetings with City staff and City Council. Dave Trageser will provide backup banking capability.
Mr. James Nelson Senior Vice President Phone: (206) 389-4062 Primary Banking Contact E-mail: JNelson@dadco.com Seattle, WA Mr. Nelson joined D.A. Davidson & Co. in 2013 as a Senior Vice President in the Public Finance department. He has been in the local public finance business for 32 years, originating over $5 billion of tax-exempt financing. Previously, he was with Martin Nelson & Co. for 17 years. Mr. Nelson specializes in general municipal finance with cities, counties, water & sewer districts, fire districts, and park districts, as well as other special districts. Mr. Nelson works with a large number of Washington municipalities, including Stanwood, Mill Creek, Lake Forest Park, Duvall, Sultan, Oak Harbor, Burlington, Port Townsend, Bonney Lake, Washougal, Kelso, DuPont, Fircrest, Moses Lake, West Richland, Airway Heights, and North Bend, among others. Mr. Nelson holds Series 50, Series 52 and Series 63 FINRA licenses. He has a BA from the University of Washington. Mr. David Trageser Managing Director Phone: (206) 903-8699 Secondary Banking Contact E-mail: DTrageser@dadco.com Seattle, WA Mr. Trageser joined D.A. Davidson & Co. in 2007 as a Senior Vice President in the Public Finance department, becoming Managing Director in 2013. He has been in the local public finance business for 32 years, originating over $5 billion of tax-exempt financing. Previously, he was with Banc of America Securities for 7 years and with Dain Rauscher Inc. for 15 years. He has been the lead banker for over 50 Washington local government issuers and 400 financings. A partial list of his clients includes the cities of Aberdeen, Bainbridge Island, Bellingham, Bothell, Bremerton, Ferndale, Fife, Gig Harbor, Kent, Lacey, Lake Stevens, Monroe, Port Orchard, Puyallup, Seattle, Shelton, Sumner, Tacoma, Toppenish, Tumwater, University Place, and Wenatchee, among others. Mr. Trageser holds Series 7, Series 53, and Series 63 licenses. He has a Bachelor’s in Business Administration from Pacific Lutheran University and an MBA from Seattle University. Ms. Suzanne Eide Vice President Phone: (206) 903-8690 Financial and Quantitative Analysis E-mail: SEide@dadco.com Seattle, WA Ms. Eide joined D.A. Davidson & Co. in 2007. Previously, Ms. Eide was with Banc of America Securities for 6 years. Ms. Eide has served as the lead debt structuring professional for senior-managed financings on behalf of Washington municipal clients including Snohomish County and the cities of Stanwood, Lake Stevens, Mt. Vernon, Burlington, Granite Falls, Monroe, Sultan, Snohomish, Mill Creek, Bothell, and Mukilteo, among others. She will provide technical support on a day-to-day basis including quantitative analysis, debt structuring and pricing research. Her analysis takes into consideration the issuer’s outstanding issues, debt policies, cash flow concerns, and financing alternatives to optimize financing results for the client. Ms. Eide has a BS in Finance from the University of Illinois, an MBA from the University of Washington, and holds Series 7 and Series 63 FINRA licenses. Mr. Mark Froio Senior Vice President Phone: (206) 903-8664 Marketing and Sales, and Pricing E-mail: MFroio@dadco.com Seattle, WA Mr. Froio joined D.A. Davidson in 2000, and is responsible for northwestern regional municipal trading and underwriting. He manages the competitive and negotiated underwriting accounts for Washington, Oregon, Montana, and Idaho. His experience in trading and underwriting municipal issues covers a 32-year span. Prior to joining D.A. Davidson, Mr. Froio held positions with Merrill Lynch, Prudential Securities and U.S. Bancorp Piper Jaffray.
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He holds a BA from Hamilton College in Clinton, New York. Mr. Froio holds 4 FINRA securities licenses and has earned the prestigious Chartered Financial Analyst designation in investment management and investment research analysis. Ms. Maura Lentini Vice President Phone: (206) 903-8687 Credit Analysis E-mail: MLentini@dadco.com Seattle, WA Ms. Lentini joined D.A. Davidson in 2002 with previous experience as a municipal rating analyst at Moody’s Investors Service in New York. At Davidson, Ms. Lentini’s focus is on credit rating analysis to help clients evaluate structuring alternatives and to present the strongest case possible to investors and rating agencies. She holds an MPA from Syracuse University and a BA from Cornell University, and FINRA Series 7 and Series 66 securities licenses. Ms. Crystal Vogl Vice President, Public Finance Phone (406) 791-7214 Disclosure Specialist E-Mail: CVogl@dadco.com Great Falls, MT Ms. Vogl joined D.A. Davidson in 2000, focusing on municipal transactions for clients in Washington, Montana and Oregon. Ms. Vogl provides analytics, disclosure and document review, and continuing disclosure assistance for our clients. She holds a BS in Business Finance from Montana State University-Bozeman and FINRA Series 7 and Series 63 securities licenses.
4. Cost Proposal
If selected to serve as Placement Agent, we propose a flat fee of $10,000. Alternatively, to be sole manager (for funding net proceeds of $5,500,000) negotiated underwriting, Davidson proposes an underwriting spread of $4.50 per $1,000 (or 0.45% times the total principal amount). This is a lower underwriting fee compared to the City’s previous bond financings. We are assuming Bond Counsel will prepare the Preliminary Official Statement and final Official Statement. The City would make no payments to Davidson, nor enter into any financial obligation, prior to the completion of the bond sale. We will not require underwriter’s counsel for this issue. We’d be glad to talk with the City about our cost proposal. We are proud of our track record in producing consistent reasonable spreads, but more importantly, achieving low bond yields and low all-in borrowing costs for our customers.
5. Estimated Net Borrowing Cost and Payments
Assuming a 19-year financing to fund a Construction Deposit of $5,500,000, rated Aa3, bank-qualified, our estimated True Interest Cost percent (which includes the Underwriting fee) is 1.91% based on March 2, 2020 interest rates. The estimated All-In True Interest Cost percent (which includes all fees for Underwriting, Bond Counsel, Official Statement preparation, Rating fee) is 1.97%. The estimated average annual payment is $352,034. (See details on page 6.) Assuming a 20-year financing to fund a Construction Deposit of $5,500,000, rated Aa3, bank-qualified, our estimated True Interest Cost percent (which includes the Underwriting fee) is 1.96%. The estimated All-In True Interest Cost percent (which includes all fees for Underwriting, Bond Counsel, Official Statement preparation, Rating fee) is 2.02%. The estimated average annual payment is $339,270. (See details on page 7.) Based on our experience working with banks, the total financing costs with a bank loan are lower, however the interest rate is typically higher for a financing that is longer than 15-years. As an example, if a bank quoted a 20-year fixed interest rate of 2.35%, the estimated All-In Interest Cost percent (with Bond Counsel fee, bank set-up fee, placement agent fee) is approximately 2.40%. The estimated average annual payment (with a bank’s 2.40%) would be $352,187. This demonstrates how a public bond sale (i.e., $339,270 payment for 20-years) achieves a lower annual payment by $12,917 per year. Over a 20-year period, the public bond sale saves the General Fund approximately $258,000 via lower payments.
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Conclusion Jim Nelson and Dave Trageser are the most experienced bankers in Washington, and we believe that no other firm can meet the City’s needs with the same performance Davidson is able to deliver. It would be a privilege to serve as Placement Agent or Underwriter to the City of Arlington, and we sincerely appreciate your consideration.
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19-Year Financing, Estimated Payments with Sources & Uses of Funds Estimated All-In True Interest Cost percent (which includes ALL fees) is 1.97%. Fund a deposit to Construction Fund of $5,500,000Interest payments on 6/1 and 12/1, first interest is 6/1/2021Principal payments on 12/1, first principal is 12/1/2021Assumed Prepayment Date begins on 6/1/2029DatePrincipal (1)Coupon Interest (1)Annual (1)2021 135,000 #215,390 350,3902022 195,000 #158,850 353,8502023 200,000 #153,000 353,0002024 205,000 #147,000 352,0002025 215,000 #138,800 353,8002026 220,000 #130,200 350,2002027 230,000 #121,400 351,4002028 240,000 #112,200 352,2002029 250,000 #102,600 352,6002030 260,000 #92,600 352,6002031 270,000 #82,200 352,2002032 280,000 #74,100 354,1002033 285,000 #65,700 350,7002034 295,000 #57,150 352,1502035 305,000 #48,300 353,3002036 315,000 #39,150 354,1502037 320,000 #29,700 349,7002038 330,000 #20,100 350,1002039 340,000 #10,200 350,2002040 0 #0 0 0 #0 0Total: 4,890,000 1,798,640 6,688,640
Est. Average Annual Payment:352,034Est. True Interest Cost (with Underwriting fee):1.91%Est. All-In True Interest Cost (with all fees):1.97%(1) Preliminary and subject to change.
Sources of Funds (1) Par Amount of Bonds: $4,890,000 Plus Original Issue Premium (from investors):$666,035Total Sources of Funds: $5,556,035
Uses of Funds (1) Deposit to Construction Fund: $5,500,000 Est. Bond Counsel Fee:$10,689 Est. Official Statmt Prep Fee (Bond Counsel):$7,500 Est. Moody's Rating Fee: $13,000 Est. Underwriter Fee ($4.50/1,000): $22,005 Est. Contingency to Const. Fund: $2,841Total Uses of Funds: $5,556,035(1) Preliminary and subject to change.
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20-Year Financing, Estimated Payments with Sources & Uses of Funds Estimated All-In True Interest Cost percent (which includes ALL fees) is 2.02%.
Fund a deposit to Construction Fund of $5,500,000Interest payments on 6/1 and 12/1, first interest is 6/1/2021Principal payments on 12/1, first principal is 12/1/2021Assumed Prepayment Date begins on 6/1/2029DatePrincipal (1)Coupon Interest (1)Annual (1)2018 0 #0 02021 125,000 #214,398 339,3982022 180,000 #158,400 338,4002023 185,000 #153,000 338,0002024 190,000 #147,450 337,4502025 200,000 #139,850 339,8502026 205,000 #131,850 336,8502027 215,000 #123,650 338,6502028 225,000 #115,050 340,0502029 235,000 #106,050 341,0502030 245,000 #96,650 341,6502031 250,000 #86,850 336,8502032 260,000 #79,350 339,3502033 270,000 #71,550 341,5502034 275,000 #63,450 338,4502035 285,000 #55,200 340,2002036 295,000 #46,650 341,6502037 300,000 #37,800 337,8002038 310,000 #28,800 338,8002039 320,000 #19,500 339,5002040 330,000 #9,900 339,900Total: 4,900,000 1,885,398 6,785,398
Est. Average Annual Payment:339,270Est. True Interest Cost (with Underwriting fee):1.96%Est. All-In True Interest Cost (with all fees):2.02%(1) Preliminary and subject to change.
Sources of Funds (1) Par Amount of Bonds: $4,900,000 Plus Original Issue Premium (from investors):$656,747Total Sources of Funds: $5,556,747
Uses of Funds (1) Deposit to Construction Fund: $5,500,000 Est. Bond Counsel Fee:$10,702 Est. Official Statmt Prep Fee (Bond Counsel):$7,500 Est. Moody's Rating Fee: $13,000 Est. Underwriter Fee ($4.50/1,000): $22,050 Est. Contingency to Const. Fund: $3,496Total Uses of Funds: $5,556,747(1) Preliminary and subject to change.
Neither this material nor any of its contents may be disclosed, sold, or redistributed, electronically or otherwise, without prior written consent of Davidson Companies. The information presented herein is based on public information we believe to be reliable, prevailing market conditions, as well as our views at this point in time. We make no representation or warranty with respect to the accuracy or completeness of this material. Past performance is not necessarily indicative of future results. Davidson Companies does not assume any liability for any loss which may result from the reliance by any person upon such material. We make no representations regarding the legal, tax, regulatory, or accounting implications of entering into a Transaction Davidson is very interested in serving as underwriter for the proposed issuance. Pursuant to MSRB Rule G-23: As underwriter, Davidson’s primary role will be to purchase as principal, or arrange for the placement of the securities in a commercial arm’s length transaction with the issuer, and may have financial and other interests that differ from those of the issuer. In its capacity as underwriter and not as financial advisor, Davidson may provide incidental financial advisory services at the issuer’s request, including advice regarding the structure, timing, terms and other similar matters concerning the issuance. However, Davidson does not assume any financial advisory or fiduciary responsibilities with respect to the issuer.