HomeMy WebLinkAbout06-23-2014
City of Arlington
Council Agenda Bill
Item:
WS #2
Attachment
A
COUNCIL MEETING DATE:
June 23, 2014
SUBJECT:
Bond Sale to refinance 2004 and 2009 LTGO Bonds
ATTACHMENTS:
Preliminary Official Statement
Draft Bond Ordinance
DEPARTMENT OF ORIGIN
Finance; Contact Jim Chase – 360-403-3422
EXPENDITURES REQUESTED: -0-
BUDGET CATEGORY: N/A
LEGAL REVIEW:
DESCRIPTION:
It advantageous to refinance the both the 2004 and the 2009 Limited Tax General Obligation
Bonds to take advantage of current low interest rates. The 2004 bonds were issued to finance
the construction of Police Station/City Hall Annex, and the 2009 bonds were used to finance
the Airport Office expansion.
We will be meeting with Standard and Poor’s to obtain a bond rating for this issue.
HISTORY:
Lindsay Sovde, a Managing Director with Piper Jaffray & Co., has determined the City could
save an estimated $668,000 (May Calculations) in net present value savings over the next 20
years by refinancing the 2004 LTGO Bonds. The Bonds currently pay interest ranging from
4.6% to 4.85%. It is estimated by refinancing the rates could be in the 2.00% to 5.00% range.
By refinancing the 2009 bonds, currently paying interest at 4.75%, the estimated net present
value savings could amount to $51,000 over the next ten years. Interest rates could also be in
the 2% to 5% range.
The City has utilized the services of Piper Jaffray in the past. Ms. Sovde has extensive
experience in municipal bond refinancing. She will be attending the June 23rd meeting. Nancy
Neraas, with Foster Pepper, has more than 25 years of experience as bond counsel for cities,
counties, and special districts. She will also be attendance at the meeting.
ALTERNATIVES
Table for additional review.
Do not refinance the 2004 LTGO Bonds.
Do not refinance the 2009 LTGO Bonds.
RECOMMENDED MOTION:
Discussion only.
PRELIMINARY OFFICIAL STATEMENT DATED _________________________, 2014
$7,735,000*
City of Arlington, Washington
Limited Tax General Obligation Refunding Bonds, 2014
DATED: Date of Initial Delivery (estimated to be August 19, 2014) DUE: December 1, as shown on the inside cover
STANDARD & POOR’S RATING—Applied for; see “Rating” herein.
BANK QUALIFIED—The City of Arlington, Washington (the “City”) has designated its Limited Tax General Obligation
Refunding Bonds, 2014 (the “Bonds”) as “qualified tax-exempt obligations” under Section 265(b)(3)(B) of the Internal
Revenue Code of 1986, as amended (the “Code”) for banks, thrift institutions and other financial institutions. See “Tax
Matters” herein.
BOOK-ENTRY ONLY—The Bonds will be issued as fully registered bonds in denominations of $5,000, or integral multiples
thereof within a single maturity, and will be registered in the name of Cede & Co., as bond owner and nominee for The
Depository Trust Company (“DTC”). DTC will act as securities depository for the Bonds. Purchasers will not receive
certificates representing their interest in the Bonds purchased.
PRINCIPAL AND INTEREST PAYMENTS—Interest on the Bonds will be payable semiannually on each June 1 and
December 1, commencing on December 1, 2014, to maturity or earlier redemption. Principal of and interest on the
Bonds will be payable by the fiscal agency of the State of Washington, currently The Bank of New York Mellon (the
“Bond Registrar”), as further described herein. For so long as the Bonds remain in a “book -entry only” transfer system,
the fiscal agent will make such payments only to DTC, which in turn is obligated to remit such principal and interest to
its Participants for subsequent disbursement to Beneficial Owners of the Bonds as further described herein in
Appendix B—Book-Entry Transfer System.
MATURITY SCHEDULE LOCATED ON INSIDE COVER
REDEMPTION—The Bonds are subject to optional redemption prior to their stated maturities as further described herein.
SECURITY—The Bonds are limited tax general obligations of the City. The City has irrevocably covenanted and agreed that
it will include in its annual budget and levy ad valorem taxes annually, within the constitutional and statutory tax
limitations provided by law without a vote of the electors of the City, upon all the taxable property within the City in
amounts sufficient, together with all other money of the City legally available for such purposes, to pay the principal of
and interest on the Bonds as the same shall become due. The full faith, credit and resources of the City have been
pledged irrevocably for the annual levy and collection of such taxes and the prompt payment of such principal and
interest. The Bonds do not constitute a debt or indebtedness of the State of Washington (the “State”) or any political
subdivision thereof other than the City. See “Security for the Bonds” and “Taxing Authority” herein.
TAX EXEMPTION—In the opinion of Bond Counsel, under existing federal law and assuming compliance with applicable requirements
of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied subsequent to the issue date of the Bonds,
interest on the Bonds 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, while interest on the Bonds also is not an item of tax preference
for purposes of the alternative minimum tax applicable to corporations, interest on the Bonds received by corporations is tak en into
account in the computation of adjusted current earnings for purposes of the alternative minimum tax applicable to corporation s,
interest on Bonds received by certain S corporations may be subject to tax, and interest on the Bonds received by foreign
corporations with United States branches may be subject to a foreign branch profits tax. Receipt of interest on the Bonds may have
other federal tax consequences for certain taxpayers. See “TAX MATTERS.”
DELIVERY—The Bonds are offered for sale to the original purchaser subject to the final approving legal opinion of Bond
Counsel. It is expected that the Bonds will be available for delivery to the Bond Registrar on behalf of DTC by Fast
Automated Securities Transfer, on or about August 19, 2014.
* Preliminary, subject to change.
This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read the entire
Official Statement to obtain information essential to the making of an informed investment decision.
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City of Arlington, Washington
MATURITY SCHEDULE
$7,735,000*
Limited Tax General Obligation Refunding Bonds, 2014
Due Interest Due Interest
Dec. 1 Amounts* Rates Yields Price CUSIP Dec. 1 Amounts* Rates Yields Price CUSIP
2014 $ 105,000 % % 2025 $ 455,000 % %
2015 65,000 2026 480,000
2016 65,000 2027 505,000
2017 70,000 2028 530,000
2018 70,000 2029 555,000
2019 70,000 2030 585,000
2020 70,000 2031 610,000
2021 75,000 2032 645,000
2022 455,000 2033 680,000
2023 475,000 2034 710,000
2024 460,000
* Preliminary; subject to change.
ii
City of Arlington
238 N. Olympic Avenue
Arlington, Washington 98223
Phone: (360) 403-3421
www.arlingtonwa.gov*
Mayor and City Council
Barbara Tolbert Mayor
Richard Butner Council Member
Marilyn Oertle Council Member
Debora Nelson Council Member
Chris Raezer Council Member
Jan Schuette Council Member
Jesica Stickles Council Member
Randy Tendering Council Member
Certain City Officials
Allen Johnson City Administrator
James W. Chase Finance Director
Kristin Banfield Assistant City Administrator/City Clerk
Steve J. Peiffle City Attorney
Bond Counsel
Foster Pepper PLLC
Seattle, Washington
(206) 447-4400
Bond Registrar
The Bank of New York Mellon
Dallas, Texas
1-800-438-5473
* The City’s website is not part of this Official Statement, and investors should not rely on information presented in
the City’s website in determining whether to purchase the Bonds. This inactive textual reference to the City’s
website is not a hyperlink and does not incorporate the City’s website by reference.
This Official Statement does not constitute an offer to sell the Bonds in any jurisdiction in which or to a person to whom it is
unlawful to make such an offer. No dealer, salesperson or other person has been authorized by the City or the Underwriter to
give any information or to make any representations, other than those contained herein, in connection with the offering of th e
Bonds and, if given or made, such information or representations must not be relied upon. The information and expressions of
opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made
hereunder will, under any circumstances, create an implication that there has been no chan ge in the affairs of the City since the
date hereof.
The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed t he
information in this Official Statement in accordance with, and as part of, its responsibility to investors under the federal
securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy
or completeness of such information.
This Preliminary Official Statement will be “deemed final” by the City, pursuant to Rule 15c2 -12 promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended, except for information which is permitted to
be excluded from this Preliminary Official Statement under Rule 15c2-12.
In connection with this offering, the Underwriter may over-allot or effect transactions that stabilize or maintain the market price
of the Bonds at levels above those which might otherwise prevail in the open market. Such s tabilizing, if commenced, may be
discontinued at any time.
The CUSIP numbers are included on the inside cover of this Official Statement for convenience of the holders and potential
holders of the Bonds. No assurance can be given that the CUSIP numbers for the Bonds will remain the same after the date of
issuance and delivery of the Bonds.
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iv
Table of Contents
Page
Description of the Bonds ............................................................................................................................................................... 1
Authorization for Issuance .................................................................................................................................................. 1
Principal Amount, Date, Interest Rates and Maturities ................................................................................................... 1
Redemption Provisions ........................................................................................................................................................ 1
Open Market Purchase ......................................................................................................................................................... 2
Bond Registrar and Registration Features ......................................................................................................................... 2
Book-Entry Bonds ................................................................................................................................................................. 2
Termination of Book-Entry System .................................................................................................................................... 2
Refunding or Defeasance of the Bonds .............................................................................................................................. 3
Purpose and Use of Proceeds ....................................................................................................................................................... 3
Purpose ................................................................................................................................................................................... 3
Plan of Refunding ................................................................................................................................................................. 3
Verification of Mathematical Calculations ........................................................................................................................ 4
Estimated Sources and Uses of Funds ................................................................................................................................ 4
Security for the Bonds ................................................................................................................................................................... 4
General ................................................................................................................................................................................... 4
Bonded Indebtedness .................................................................................................................................................................... 5
Outstanding Debt .................................................................................................................................................................. 6
Other Non-Voted Debt Secured by the General Fund ..................................................................................................... 6
Summary of Limited Tax General Obligation Bond Debt Service Requirements ........................................................ 6
Summary of Overlapping Debt ........................................................................................................................................... 7
Net Direct and Overlapping Debt ....................................................................................................................................... 7
Debt Payment Record ........................................................................................................................................................... 7
Future Financings ................................................................................................................................................................. 7
Taxing Authority............................................................................................................................................................................ 8
Authorized Property Tax Levies ......................................................................................................................................... 8
Overlapping Taxing Districts .............................................................................................................................................. 9
General Property Taxes ........................................................................................................................................................ 9
Regular Property Tax Limitations..................................................................................................................................... 10
Assessed Value .................................................................................................................................................................... 11
Property Tax Collection Procedure................................................................................................................................... 11
2014 Major Property Taxpayers ........................................................................................................................................ 12
Collection of Other Taxes ................................................................................................................................................... 13
Authorized Investments ............................................................................................................................................................. 14
Local Government Investment Pool ................................................................................................................................. 14
Authorized Investments for Bond Proceeds .................................................................................................................... 15
Financial Information .................................................................................................................................................................. 16
The City ......................................................................................................................................................................................... 18
Principal City Officers ........................................................................................................................................................ 18
City Staff ............................................................................................................................................................................... 18
Labor Relations .................................................................................................................................................................... 19
Pension System .................................................................................................................................................................... 19
Other Post-Employment Benefits...................................................................................................................................... 20
Insurance .............................................................................................................................................................................. 20
Accounting and Budgeting Policies .................................................................................................................................. 21
Auditing of City Finances .................................................................................................................................................. 21
Initiative and Referendum .......................................................................................................................................................... 26
Tax Matters ................................................................................................................................................................................... 26
Exclusion From Gross Income ........................................................................................................................................... 26
Continuing Requirements .................................................................................................................................................. 26
Alternative Minimum Tax ................................................................................................................................................. 26
Tax on Certain Passive Investment Income of S Corporations ..................................................................................... 26
Foreign Branch Profits Tax ................................................................................................................................................ 27
Possible Consequences of Tax Compliance Audit .......................................................................................................... 27
Certain Other Federal Tax Consequences ........................................................................................................................ 27
Preservation of Tax Exemption .................................................................................................................................................. 28
Rating ............................................................................................................................................................................................ 28
Continuing Disclosure................................................................................................................................................................. 28
Legal and Underwriting.............................................................................................................................................................. 29
Approval of Counsel .......................................................................................................................................................... 29
Absence of Material Litigation .......................................................................................................................................... 29
Underwriting ....................................................................................................................................................................... 30
Conflicts of Interest ............................................................................................................................................................. 30
Concluding Statement ........................................................................................................................................................ 30
Form of the Opinion of Bond Counsel ..................................................................................................................... Appendix A
Book-Entry Transfer System ...................................................................................................................................... Appendix B
2012 Audited Financial Statements .......................................................................................................................... Appendix C
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OFFICIAL STATEMENT
City of Arlington, Washington
$7,735,000*
Limited Tax General Obligation Refunding Bonds, 2014
The City of Arlington, Washington (the “City”), a municipal corporation duly organized and existing under
and by virtue of the laws of the State of Washington (the “State”), furnishes this Official Statement in
connection with the offering of $7,735,000* aggregate principal amount of its Limited Tax General Obligation
Refunding Bonds, 2014 (the “Bonds”). This Official Statement provides information concerning the City and
the Bonds.
Description of the Bonds
Authorization for Issuance
Under and in accordance with State laws, the Bonds are issued pursuant to Ordinance No. ____ (the “Bond
Ordinance”), passed by the City Council (the “Council”) on ________________, 2014, and the authority of
chapters 39.36, 39.46 and 39.53 of the Revised Code of Washington (“RCW”). The Bonds do not require voter
approval.
Principal Amount, Date, Interest Rates and Maturities
The Bonds will be dated and bear interest from the date of initial delivery to the Underwriter. The Bonds will
mature on the dates and in the principal amounts and will bear interest (payable semiannually on each June 1
and December 1, commencing December 1, 2014) until the maturity or earlier redemption of the Bonds at the
rates set forth on the inside cover of this Official Statement. Interest on the Bonds will be computed on the
basis of a 360-day year consisting of twelve 30-day months. Principal of and interest on the Bonds will be
payable by the fiscal agency of the State of Washington, currently The Bank of New York Mellon (the “Bond
Registrar”).
Redemption Provisions
Optional Redemption. The Bonds maturing on or after _____________ may be redeemed at the option of the
City at any time on or after June 1, 2024, as a whole or in part at par plus accrued interest to the date of
redemption.
Partial Redemption. Portions of the principal amount of any Bond, in authorized denominations of $5,000 or
any integral multiple thereof within a single maturity (“Authorized Denomination”), may be redeemed. If less
than all of the principal amount of any Bond is redeemed, upon surrender of that Bond to the Bond Registrar,
there will be issued to the Registered Owner, without charge therefor, a new Bond (or Bonds, at the option of
the Registered Owner) of the same series, maturity and interest rate in any Authorized Denomination in the
aggregate principal amount remaining unredeemed.
Selection of Bonds for Redemption. Each series, if fewer than all of the Bonds are to be redeemed prior to
maturity, the City will select the maturity or maturities to be redeemed. For each series, if fewer than all of the
outstanding Bonds within a maturity are to be redeemed prior to maturity, the Bonds to be redeemed will be
selected randomly in such manner as the Bond Registrar determines. Notwithstanding the foregoing, for as
long as the Bonds are registered in the name of DTC or its nominee, such Bonds will be selected in accordance
with the Letter of Representations between the City and DTC.
Notice of Redemption. While the Bonds are held by DTC in book-entry only form, any notice of redemption will
be given at the time, to the entity and in the manner required by DTC in accordance with the Letter of
Representations, and the Bond Registrar will not be required to give any other notice of redemption. If the
Bonds cease to be in book-entry only form, the City will cause notice of any intended redemption of Bonds to
* Preliminary, subject to change.
be given by the Bond Registrar not less than 20 nor more than 60 days prior to the date fixed for redemption
by first-class mail, postage prepaid, to the Registered Owner of any Bond to be redeemed at the address
appearing on the Bond Register at the Bond Registrar’s close of business on the date on which the Bond
Registrar prepares the notice of redemption, and the requirements of this sentence will be deemed to have
been fulfilled when notice has been mailed as so provided, whether or not it is actually received by the
Registered Owner of any Bond.
In the case of an optional redemption, the notice may state that the City retains the right to rescind the
redemption notice and the related optional redemption of Bonds by giving a notice of rescission to the affected
Registered Owners at any time prior to the scheduled optional redemption date. Any notice of optional
redemption that is so rescinded will be of no effect, and the Bo nds for which the notice of optional redemption
has been rescinded will remain outstanding.
Effect of Redemption. Interest on Bonds called for redemption will cease to accrue on the date fixed for
redemption unless either the notice of redemption is rescinded as set forth above or money sufficient to effect
such redemption is not on deposit in the Bond Fund .
Open Market Purchase
The City reserves the right and option to purchase any or all of the Bonds in the open market at any time at
any price acceptable to the City. All Bonds so purchased shall be canceled.
Bond Registrar and Registration Features
The Bonds will be issued as fully registered bonds and, when issued, will be registered in the name of Cede &
Co. as Registered Owner and as nominee for DTC. DTC will act as initial securities depository for the Bonds.
Individual purchases and sales of the Bonds may be made in book -entry form only in Authorized
Denominations. Purchasers (“Beneficial Owners”) will not receive certificates representing their interest in the
Bonds.
Principal of and interest on the Bonds will be payable by the Bond Registrar (or such other fiscal agency or
agencies as the State may from time to time designate). So long as Cede & Co. is the Registered Owner of the
Bonds, principal of and interest on the Bonds are payable by wire transfer by the Bond Registrar to DTC,
which in turn is obligated to remit such principal and interest to its Participants for subsequent disbursement
to the Beneficial Owners of the Bonds, as further described herein in Appendix B-“Book-Entry Transfer
System.”
Book-Entry Bonds
DTC will act as securities depository for the Bonds. The ownership of one fully registered Bond for each
maturity of each series of the Bonds, as set forth on the cover of this Official Statement, each in the aggregate
principal amount of such maturity, will be registered in the name of Cede & Co., as nominee for DTC. See
Appendix B attached hereto for additional information.
As indicated herein, certain information in Appendix B has been provided by DTC. The City makes no
representation as to the accuracy or completeness thereof. Purchasers of the Bonds should confirm this
information with DTC or its participants.
Termination of Book-Entry System
If DTC resigns as the securities depository and no substitute can be obtained, or if the City has determined that
the Bonds are to be in certificated form, the City will execute, authenticate and deliver at no cost to the
Beneficial Owners of the Bonds or their nominees, Bonds in fully registered form, in any Authorized
Denomination. Thereafter, interest on the Bonds will be paid by electronic transfer on the interest payment
date, or by check or draft of the Bond Registrar mailed on the interest payment da te to the persons in whose
names such Bonds are registered at the address appearing upon the Bond Register on the 15th day of the
month next preceding an interest payment date. However, the City is not required to make electronic transfers
except pursuant to a request by a registered owner in writing received at least 10 days before an interest
payment date and at the sole expense of the requesting registered owner. Principal of a Bond will be payable
upon presentation and surrender of the Bond by the reg istered owner to the Bond Registrar. The Bonds will
be transferable as provided in the Bond Ordinance.
Refunding or Defeasance of the Bonds
The City may issue refunding bonds pursuant to State law and use money available from any other lawful
sources to carry out a refunding or defeasance plan, which may include (a) paying when due the principal of
and interest on the affected Bonds (the “defeased Bonds”); (b) redeeming the defeased Bonds prior to their
maturity; and (c) paying the costs of the refunding or defeasance. If the City sets aside in a special trust fund
or escrow account irrevocably pledged to that redemption or defeasance (the “trust account”), money and/or
Government Obligations maturing at such time or times and bearing interest in amounts sufficient to redeem,
refund or defease the defeased Bonds in accordance with their terms, then all right and interest of the owners
of the defeased Bonds in the covenants of the Bond Ordinance and in the funds and accounts obligated to the
payment of such defeased Bonds, other than the right to receive the funds so set aside and pledged, thereafter
shall cease and become void. Thereafter, the owners of the Defeased Bonds will hav the right to receive
payment of the principal of and interest on the defeased Bonds solely from the trust account and the defeased
Bonds will be deemed no longer outstanding. In that event, the City may apply money remaining in any fund
or account (other than the trust account) established for the payment or redemption of the defeased Bonds to
any lawful purpose.
If the Bonds are registered in the name of DTC or its nominee, notice of any defeasance of Bonds will be given
to DTC in the manner prescribed in the Letter of Representations for notices of redemption of Bonds.
Purpose and Use of Proceeds
Purpose
The proceeds from the sale of the Bonds will be used to (i) refund a portion of the City’s outstanding limited
tax general obligation debt for debt service savings (see “Plan of Refunding” below); (ii) prepay the City’s
Limited Tax General Obligation Bond, 2009 issued to provide part of the funds to expand the administrative
building at the City’s municipal airport (the “2009 Bond”), currently outstanding in the principal amount of
$535,249.57; and (iii) pay the costs of issuance of the Bonds.
Plan of Refunding
Depending on market conditions on the day of pricing, a portion of the proceeds from the sale of the Bonds
will be used to refund on a current basis all or a portion of the City’s Limited Tax General Obligation Bon ds,
2004 maturing on December 1 in the years 2022 through 2028 and 2034 currently outstanding in the aggregate
principal amount of $7,700,000 (the “Refunding Candidates,” and as selected on the pricing date, the
“Refunded Bonds”).
Information on the Refunding Candidates is as follows:
Refunding Candidates
Maturity Years Principal Interest CUSIP
(December 1) Amounts Rates Numbers
2022 $ 440,000 4.60% 042038BG3
2023 460,000 4.65 042038BH1
2024 485,000 4.75 042038BJ7
2025 505,000 4.75 042038BK4
2026 530,000 4.75 042038BL2
2027 555,000 4.75 042038BM0
2028 585,000 4.75 042038BN8
2034* 4,140,000 4.85 042038BU2
* Term Bonds.
From a portion of the proceeds of the Bonds, the City will irrevocably set aside funds to provide payment of:
(a) interest on the Refunded Bonds when due up to and including September 18, 2014; and
(b) on September 18, 2014, the redemption price (par) of the Refunded Bonds.
The funds, interest earned thereon, and necessary cash balance, if any, will irrevocably be pledged to and held
in trust for the benefit of the owners of the Refunded Bonds by U.S. Bank National Association (the
“Refunding Trustee”), pursuant to an escrow deposit agreement to be executed by the City and the Refunding
Trustee.
Verification of Mathematical Calculations
Piper Jaffray & Co., Seattle, Washington, will verify the accuracy of the mathematical computations concerning
the adequacy of the funds to be placed in the escrow account to pay on the call date, pursuant the call for
redemption, the principal of and interest on the Refunded Bonds.
Estimated Sources and Uses of Funds
The proceeds of the Bonds are estimated to be applied as follows:
Sources of Funds
Par Amount of the Bonds (1) $ 7,735,000
Net Premium/(Discount)
Total Sources of Funds $
Use of Funds
Prepayment of the 2009 Bond $
Refunding of the Refunded Bonds
Issuance Costs (2)
Additional Proceeds
Total Use of Funds $
(1) Preliminary, subject to change.
(2) Includes Bond Counsel fees, rating fees, underwriter’s discount, and other costs associated with the issuance of the
Bonds.
Security for the Bonds
General
The Bonds are limited tax general obligation bonds of the City. For as long as any of the Bonds are
outstanding, the City has irrevocably pledged that it will, in the manner provided by law within the
constitutional and statutory limitations provided by law without the assent of the voters, include in its annual
levy amounts sufficient, together with other money that is lawfully available, to pay principal of and interest
on the Bonds as the same becomes due. The full faith, credit and resources of the City have been pledged
irrevocably for the prompt payment of the principal of and interest on the Bonds and such pledge is
enforceable in mandamus against the City. See “Bonded Indebtedness” and “Taxing Authority.”
The City may, subject to applicable laws, apply other funds available to make payments with respect to the
Bonds and thereby reduce the amount of future tax levies for such purpose.
The Bonds do not constitute a debt or indebtedness of the State or any political subdivision thereof other than
the City.
Bonded Indebtedness
The City may, without a vote of the electorate, issue debt as follows:
(1) Pursuant to an ordinance specifying the amount and object of the expenditure of the proceeds,
the City Council may borrow money for corporate purposes and issue bonds and notes within
the constitutional and statutory limitations on indebtedness. The Bonds will represent this type
of indebtedness.
(2) The City may execute conditional sales contracts for the purchase of real or personal property.
(3) The City may execute capital or financing leases with or without an option to purchase.
The Bonds are limited tax general obligations, issued without a vote of the electorate.
As prescribed by State statutes, the unlimited tax general obligation indebtedness permitted for cities, subject to
a 60 percent majority vote of registered voters, is limited to 2.5 percent of assessed value for general purposes, 2.5
percent for utilities and 2.5 percent for open space/park facilities. Within the 2.5 percent of assessed value for
general purposes, the City may, without a vote of the electors, incur general obligation indebtedness in an
amount not to exceed 1.5 percent of assessed value. Within that 1.5 percent of assessed value for general
purposes issued without a vote of the electors, the City may enter into capital or financing leases if the total
principal component of the lease payments, together with the other nonvoted general obligation indebtedness
of the City, does not exceed 1.5 percent of assessed value. The combination of unlimited tax and limited tax
general obligation debt for general purposes, including leases, cannot exceed 2.5 percent of assessed value and
for all purposes cannot exceed 7.5 percent of assessed value. The Bonds are issued without a vote.
Computation of Debt Capacity
(As of August 19, 2014)
2014 Tax Collection Year Assessed Value $ 1,816,314,125
Nonvoted Debt Capacity
1.5% of Assessed Value $ 27,244,711
Less: Outstanding Nonvoted Debt (1) (11,089,550)
Less: The Bonds (2) (7,735,000)
Remaining Nonvoted Debt Capacity $ 8,420,161
Voted and Nonvoted Debt Capacity for General Purposes
2.5% of Assessed Value $ 45,407,853
Less: Outstanding Nonvoted Debt (1) (11,089,550)
Less: The Bonds (2) (7,735,000)
Less: Outstanding Voted Debt 0
Total Remaining Voted and Nonvoted Debt Capacity for General Purposes $ 26,583,303
(1) Includes limited tax general obligation debt and other nonvoted general obligation debt; excludes the Refunding
Candidates.
(2) Preliminary, subject to change.
Source: City of Arlington.
Outstanding Debt
Long Term Borrowing
General Obligations: Non-voted
Dated Date of Amount Amount
Limited Tax General Obligation Bonds (1) Date Maturity Issued Outstanding
LTGO & Ref., 2007 06/12/07 12/01/27 $ 3,630,000 $ 2,825,000
LTGO & Ref., 2010 08/18/10 12/01/30 6,010,000 5,045,000
The Bonds 08/19/14 12/01/34 7,735,000 (2) 7,735,000 (2)
LTGO Bond Total $ 17,375,000 $ 15,605,000
(1) Excludes the Refunding Candidates and the 2009 Bond.
(2) Preliminary, subject to change.
Other Non-Voted Debt Secured by the General Fund
As of June 1, 2014, the City has a general obligation note payable for land purchase outstanding in the amount
of $3,200,000 with a final maturity of May 1, 2040. Additionally, t he City has two lease agreements
outstanding in the total amount of $19,550 with a final maturity of April 1, 2015.
Summary of Limited Tax General Obligation Bond Debt Service Requirements (1)
(1) Totals may not foot due to rounding. Includes only bonds and does not include other evidences of indebtedness
shown on previous page.
(2) Any principal and/or interest payments made prior to August 19, 2014 have been excluded. Excludes the Refunding
Candidates and the 2009 Bond.
(3) Preliminary, subject to change; assumes interest rates range from 2.00% to 5.00%.
Cal.Outstanding LTGO Bonds (2)Total Debt
Years Principal Interest Principal Interest Service
2014 600,000$ 161,778$ 105,000$ 103,728$ 970,506$
2015 605,000 303,705 65,000 364,000 1,337,705
2016 630,000 278,005 65,000 362,700 1,335,705
2017 670,000 251,255 70,000 360,750 1,352,005
2018 695,000 222,786 70,000 358,650 1,346,436
2019 730,000 195,268 70,000 356,550 1,351,818
2020 755,000 166,349 70,000 353,750 1,345,099
2021 730,000 136,461 75,000 350,950 1,292,411
2022 300,000 106,961 455,000 347,950 1,209,911
2023 310,000 94,471 475,000 329,750 1,209,221
2024 325,000 81,498 460,000 310,750 1,177,248
2025 340,000 67,911 455,000 287,750 1,150,661
2026 355,000 53,683 480,000 265,000 1,153,683
2027 370,000 38,118 505,000 241,000 1,154,118
2028 145,000 21,890 530,000 215,750 912,640
2029 150,000 14,920 555,000 189,250 909,170
2030 160,000 7,700 585,000 161,500 914,200
2031 - - 610,000 132,250 742,250
2032 - - 645,000 101,750 746,750
2033 - - 680,000 69,500 749,500
2034 - - 710,000 35,500 745,500
Total 7,870,000$ 2,202,758$ 7,735,000$ 5,298,778$ 23,106,536$
The Bonds (3)
Summary of Overlapping Debt
(As of June 1, 2014)
Estimated
2014 Assessed Percent Outstanding Overlapping
Overlapping Taxing District Value Overlap (1) GO Debt Debt
Arlington School District No. 16 $ 3,009,796,561 46.84% $ 36,660,000 $ 17,172,029
Public Hospital District No. 3 3,127,846,977 44.69 55,595,000 23,951,312
Fire Protection District No. 19 347,199,148 7.41 1,717,000 127,320
Snohomish County 79,448,742,407 2.29 456,786,655 10,442,809
Marysville School District No. 25 5,606,282,153 0.01 82,260,000 9,206
Total $ 51,702,677
(1) Represents the percentage of each taxing district’s assessed value within the City.
Source: Snohomish County Assessor and Treasurer and individual taxing districts.
Net Direct and Overlapping Debt
The following tables present information regarding the City’s direct debt (including the Bonds) and the
estimated portion of the debt of overlapping taxing districts allocated to the City’s residents.
Regular Assessed Value (2014 Collection Year) $ 1,816,314,125
Estimated 2014 Population (1)
Debt Information
Direct Debt (2) $ 18,824,550
Estimated Overlapping Debt (as previously detailed herein) 51,702,677
Total Net Direct and Overlapping Debt $ 70,527,227
(1) Estimate derived from the State of Washington, Office of Financial Management, Forecasting Division.
(2) Preliminary, subject to change; includes the Bonds plus limited tax general obligation bonds and other nonvoted debt.
Excludes the Refunding Candidates and the 2009 Bond.
Bonded Debt Ratios
Direct Debt to Assessed Value 1.04%
Direct and Overlapping Debt
to Assessed Value 3.88%
Per Capita Assessed Value $
Per Capita Direct Debt $
Per Capita Total Direct and Overlapping Debt $
Debt Payment Record
The City has promptly met all debt service requirements on outstanding obligations. No refunding bonds
have been issued to prevent an impending default.
Future Financings
Other than the Bonds, the City has no authorized but unissued general obligation bonds outstanding. The
City is currently in the process of setting up a $500,000 line of credit with a bank to finance the purchase of
police vehicles, computer equipment and emergency radio equipment from 2014 to 2016. Approximately
$186,000 will be financed in 2014
Taxing Authority
Authorized Property Tax Levies
The City’s regular levy for the 2014 collection year is $1.37469/$1,000. The regular levy is imposed without a
vote of the people for general purposes, including payment of debt service on the Bonds, and is subject to
limitations (see “Taxing Authority – General Property Taxes” and “– Regular Property Tax Limitations”
herein).
The maximum regular levy rate that the City is authorized to impose may not exceed $3.60/$1,000 of assessed
value, less the regular levy rates actually imposed in any given year by the Sno-Isle Intercounty Rural County
Rural Library District (the “Library District”) into which the City is annexed. Voter-approved excess levies by
the Library District do not affect the City’s maximum levy rate. The Library District’s maximum levy rate may
not exceed $0.50/$1,000. The Library District’s 201 4 regular levy rate is $0.50/$1,000 assessed value.
Of the maximum levy rate of $3.60/$1,000, $0.225/$1,000 must be used for fire pension funding purposes, if
required; otherwise this tax may be levied and used for any other municipal purpose. The City may also,
upon voter approval, impose certain additional levies for specified purposes (e.g., a levy for emergency
medical services) and excess levies (unlimited as to rate or amount), to pay debt service on unlimited tax
general obligation bonds. An excess levy also may be imposed without a vote to prevent the impairment of a
contract (RCW 84.52.052).
In April 2014, taxpayers voted to increase property taxes by $0.58 per $1,000 of assessed value. The increase is
expected to result in an increase of $1,044,000 in property taxes in 2015. This is a permanent increase in
property taxes.
The following table shows the City’s levy rates and dollar amounts levied since 2010.
Ad Valorem Tax Levies
(Dollars per $1,000 of Assessed Value)
Collection Levy Rates Levy Amounts
Year General EMS Total General EMS Total
2014 $1.37469 $0.50000 $1.87469 $2,496,862 $908,157 $3,405,019
2013 1.41986 0.50000 1.91986 2,457,063 865,251 3,322,313
2012 1.31274 0.50000 1.81274 2,395,563 912,430 3,307,993
2011 1.16941 0.46460 1.63401 2,359,636 937,468 3,297,104
2010 1.03410 0.41072 1.44482 2,315,625 919,701 3,235,326
Source: Snohomish County Assessor’s and Treasurer’s Offices.
Overlapping Taxing Districts
The overlapping taxing districts within the City have the statutory power to levy regular property taxes at the
following rates subject to the limitations provided by chapter 84.55 RCW, and to levy certain other voter
approved property taxes. For purposes of demonstration, representative levy rates for “levy code 110” of
Snohomish County (the “County”), as well as the statutory regular levy rate limitation of each type of
potential overlapping district, are listed below. Levy code 110 is wholly within the City, however it does not
include all of the property within the City; as a result, additional taxing districts, not listed below, levy taxes
within the City.
Representative Levy Rates for the 2014 Tax Collection Year
Representative Statutory
Levy Rates Regular Levy Rate Limit
Per $1,000 of Per $1,000 of
Assessed Value (1) Assessed Value
Snohomish County $ 1.07871 $1.800 (4)
County (Road Levy) n/a (2) 2.25
Rural Library District 0.50000 0.500
Port District n/a (2) 0.450
Fire Protection District n/a (2) 1.50
The City 1.37469 3.600 (5)(6)
Hospital District No. 3 1.37121 (3) 0.75
State Schools 2.38435 3.600 (7)
School District No. 16 5.29836 n/a (8)
Emergency Medical Services 0.50000
Total rate for the County levy code 110: $ 12.50732
(1) Includes both “regular” and “excess” (voter approved) levies.
(2) The County levy code 110 is included within the City and therefore does not have a County Road levy. Likewise, it
does not contain a port district or fire protection district.
(3) Includes voter-approved bond levies totaling $0.97357.
(4) Pursuant to RCW 84.52.043(1), a county may increase its levy from $1.80 per $1,000 of assessed value to a rate not to
exceed $2.475 per $1,000 of assessed value for general county purposes if (i) the total levies for both the county and
any road levy imposed within the county do not exceed $4.05 per $1,000 of assessed value and (ii) no other taxing
district has its levy reduced as a result of the increased county levy. Road levies are collected only within the
unincorporated portions of a county and therefore do not apply to any territory within the City. The County imposes
a road levy at a rate of $1.74055 per $1,000 of assessed value.
(5) Pursuant to RCW 41.16.060, $0.225 of the total $3.60 must be used for fire pension funding purposes, if required;
otherwise this tax may be levied and used for any other municipal purpose.
(6) The City’s levy authority of $3.60 per $1,000 of assessed value is reduced by the actual rate levied by the Library
District which has the authority to levy up to $0.50 per $1,000 of assessed value.
(7) Pursuant to RCW 84.52.043(1), the levy by the State may not exceed $3.60 per $1,000 of assessed value adjusted to the
State equalized value in accordance with the indicated ratio fixed by the State Department of Revenue, which levy is
to be used exclusively for the support of the common schools.
(8) Washington school districts do not have nonvoted regular levy authority.
Source: Snohomish County Assessor’s Office.
General Property Taxes
The following provides a general description of the City’s authority to levy property taxes and limitations
thereon, the method of determining the assessed value of real and personal property, tax collection
procedures, and tax collection information.
Authorized Property Taxes. The City is authorized to levy both “regular” property taxes and “excess” property
taxes.
(1) Regular Property Taxes. Regular property taxes are subject to constitutional and statutory limitations
as to rates and amounts and commonly are imposed by taxing districts for general municipal
purposes, including the payment of debt service on limited tax general obligation indebtedness, such
as the Bonds. Regular property taxes do not require voter approval except for certain increases and
for certain special additional levies for limited specified purposes.
(2) Excess Property Taxes. Excess property taxes are not subject to limitation as to rates or amounts but
must be authorized by a 60 percent approving popular vote, as provided in Article VII, Section 2, of
the State Constitution and RCW 84.52.052. To be valid, such popular vote must have a minimum
voter turnout of 40 percent of the number who voted at the last City general election, except that one -
year excess tax levies also are valid if the turnout is less than 40 percent and the measure receives a
number of affirmative votes equal to or greater than 24 percent of the number who voted at the last
City general election. Excess levies may be imposed without a popular vote when necessary to
prevent impairment of the obligations of contracts.
Regular Property Tax Limitations
The authority of a city to levy taxes without a vote of the people for general city purposes, including the
payment of debt service on limited tax general obligation indebtedness, such as the Bonds, is subject to the
limitations described below. Information relating to regular property tax limitations is based on existing
statutes and constitutional provisions. Changes in such laws could alter th e impact of other interrelated tax
limitations on the City.
Regular property tax levies are subject to rate limitations and amount limitations and to the uniformity
requirement of Article VII, Section 1 of the Washington Constitution, which specifies that a taxing district must
levy the same rate on similarly classified property throughout the district. Aggregate property taxes vary
within the County because of its different overlapping taxing districts. In the event th at the maximum
permissible levy varies within the City, the lowest permissible rate for any part of the City would be applied to
the entire City.
Maximum Rate Limitation. For general City purposes, Title 84 RCW authorizes the imposition of tax levies at
rates not to exceed statutory maximums (see “Overlapping Taxing Districts” herein). RCW 84.52.043 allows a
city to levy taxes of up to $3.375 per $1,000 of taxable property in the city. In addition, if not needed to fund a
firefighters pension fund, the city may levy an additional $0.225 for general municipal purposes, bringing the
maximum levy rate to $3.60 per $1,000. These taxes may be levied without a vote of the people. This
limitation is exclusive of a levy for the maintenance of a local improvement guaranty fund. See “Assessed
Value and Property Tax Collection Procedure” herein.
The One Percent Aggregate Regular Levy Limitation. Article VII, Section 2 of the Washington Constitution, as
amended in 1973, limits aggregate regular property tax levi es imposed by the State and all taxing districts,
except port districts and public utility districts, to one percent of the true and fair value of property.
RCW 84.52.050 provides the same limitation by statute.
$5.90/$1,000 Aggregate Regular Levy Limitation. Within the one percent limitation described above,
RCW 84.52.043(2) imposes an aggregate limitation on regular tax levies by all taxing districts, other than the
State, of $5.90/$1,000 of assessed value, except levies for any port or public utility d istrict; excess levies
authorized in Article VII, Section 2 of the Washington Constitution; certain metropolitan park district levies;
ferry district levies; a portion of certain levies by fire protection districts; transit levies by certain counties; and
certain levies for acquiring conservation futures, for emergency medical services or care, and to finance
affordable housing, county criminal justice levies, and a portion of certain flood district levies .
Uniformity Requirement. Article VII, Section 1 of the Washington Constitution requires that property taxes be
levied at a uniform rate upon the same class of property within the territorial limits of a taxing district levying
such taxes. It is possible because of different overlapping taxing districts in different areas of the City that the
maximum permissible levy might vary within the City. In that event, to comply with the constitutional
requirement for uniformity of taxation, the lowest permissible rate for any part of the City would be applied to
the entire City.
Prioritization of Levies. RCW 84.52.010 provides that if aggregate levies certified by all taxing districts exceed
the aggregate levy limitations described above, levies certified by junior taxing districts are reduced or
eliminated in order to bring the aggregate levy into compliance with the statutory maximum prescribed by
RCW 84.52.050 and 84.52.043. RCW 84.52.043 defines “junior taxing districts” as all taxing districts other than
the state, counties, road districts, cities, towns, port districts, and public utility districts. The City is not a
junior taxing district.
The Levy Amount Increase Limitation. The regular property tax increase limitation (chapter 84.55 RCW) limits
the total dollar amount of regular property taxes levied by an individual local taxing district such as the City
to the amount of such taxes levied in the highest of the three most recent years multiplied by a “limit factor,”
plus a full value adjustment to account for taxes on new construction, annexations, impr ovements and State-
assessed property at the previous year's rate. The limit factor is the lesser of 101 percent of the highest levy in
the three previous years (excluding new construction, improvements, and State -assessed property) or 100
percent plus inflation, unless a supermajority of the Council approves a limit factor of 101 percent. Any
increase in excess of this amount must be approved by a simple majority of the voters, pursuant to a “levy lid
lift” ballot proposition, as described below.
RCW 84.55.092 allows the property tax levy to be set at the amount that would be allowed if the tax levy for
taxes due in each year since 1986 had been set at the full amount allowed under chapter 84.55 RCW. Thus, if
any year a taxing district levies an amount that is less than the maximum allowed under the limit described
above, the amount that was not levied will nevertheless be included in the base for determining levy limit in
future years. This is sometimes referred to as “banked” levy capacity. The City do not have any banked levy
capacity.
With a majority vote of its electors, a taxing district may levy a greater amount than what otherwise would be
allowed by the tax increase limitation. This increase may be imposed indefinitely or for a limited period, and
revenues may be (but are not required to be) dedicated to satisfy a limited purpose, all as allowed by RCW
84.55.050. This is known as a “levy lid lift.” A levy lid lift may not be used to increase the levy if it would
cause the taxing district’s levy to exceed the rate limitations above.
Since the regular property tax increase limitation applies to the total dollar amount levied rather than to levy
rates, increases in the assessed value of all property in the taxing district (excluding new c onstruction,
improvements, certain wind farm property, and State-assessed property) which exceed the rate of growth in
taxes allowed by the limit factor result in decreased regular tax levy rates, unless voters authorize a higher
levy or the taxing district uses banked levy capacity. Decreases in the assessed value of all property in the
taxing district (including new construction, improvements, certain wind farm property, and State-assessed
property) or increases in such assessed value that are less than the rate of growth in taxes imposed, among
other events, may result in increased regular tax levy rates.
Assessed Value
The Snohomish County Assessor, or equivalent thereof (“Assessor”), determines the value of all real and
personal property throughout the County that is subject to ad valorem taxation, except certain utility properties
which are valued by the State Department of Revenue. The Assessor is an elected official whose duties and
methods of determining value are prescribed and controlled by statute and by detailed regulations
promulgated by the State Department of Revenue.
For tax purposes, the assessed value of property is 100 percent of its market value. Three approaches may be
used to determine real property value: market data, replacement cost and income generating capacity. In the
County, all property is subject to an annual property valuation and an on-site revaluation every four years.
The property is listed by the Assessor on a roll at its current assessed value and the roll is file d in the
Assessor’s office. The Assessor’s determinations are subject to revisions by the County Board of Equalization
and, for certain property, subject to further revisions by the State Board of Tax Appeals.
Property Tax Collection Procedure
Property taxes are levied in specific amounts and the rate for all taxes levied for all taxing districts in the
County is determined, calculated and fixed by the Assessor based upon the assessed value of the property
within the various taxing districts. The Assessor extends the taxes to be levied within each taxing district on a
tax roll that contains the total amount of taxes to be so levied and collected. By January 15 of each year, the tax
roll is delivered to the Snohomish County Treasurer (the “Treasurer”), or equivalent thereof, who creates a tax
account for each taxpayer and is responsible for the collection of taxes due to each account. All such taxes are
due and payable on April 30 of each year, but if the amount due from a taxpayer exceeds $50, one-half may be
paid then and the balance no later than October 31 of that year. Delinquent taxes are subject to interest at the
rate of 12 percent per year computed on a monthly basis from the date of delinquency until paid. In addition,
a penalty of three percent is assessed on June 1st of the year in which the tax was due and eight percent on
December 1st of the year due. All collections of interest on delinquent taxes are credited to the County’s
current expense fund.
The method of giving notice o f payment of taxes due, the accounting for the money collected, the division of
the taxes among the various taxing districts, notices of delinquency, and collection procedures are covered by
detailed statutes. The lien on property taxes is prior to all ot her liens or encumbrances of any kind on real or
personal property subject to taxation. By law the Treasurer may not commence foreclosure of a tax lien on real
property until three years have passed since the first delinquency. The State’s courts have no t decided
whether the Homestead Law (chapter 6.13 RCW) may give the occupying homeowner a right to retain the first
$125,000 of proceeds (effective July 22, 2007) of the forced sale of the family residence or other “homestead”
property for delinquent general property taxes. (See Algona v. Sharp, 30 Wn. App. 837, 638 P.2d 627 (1982),
holding the homestead right superior to the improvement district assessments.) The United States Bankruptcy
Court for the Western District of Washington has held that the home stead exemption applies to the lien for
property taxes, while the State Attorney General has taken the position that it does not.
Property Tax Collection Record
Tax Collection
Collection Assessed Ad Valorem Year As of
Year Valuation (1) Tax Levy of Levy 05/31/14
2014 $1,816,314,125 $3,405,019 (2) (2)
2013 1,727,872,805 3,322,313 97.0% 98.5%
2012 1,822,509,261 3,307,993 96.9 99.1
2011 2,018,675,444 3,297,104 96.8 99.7
2010 2,239,257,103 3,235,326 96.0 99.8
2009 2,306,249,447 3,132,395 95.2 99.9
(1) Assessed value is based upon 100 percent of estimated actual valuation.
(2) In process of collection.
NOTE: Taxes are due and payable on April 30 of each year of the levy. The entire tax or first half must be paid on or
before April 30, otherwise the total amount becomes delinquent on May 1. The second half of the tax is payable
on or before October 31, becoming delinquent November 1.
Source: Snohomish County Assessor and Treasurer’s Offices.
2014 Major Property Taxpayers
Percent of
2014 Collection Year City’s
Taxpayer Type of Business Assessed Valuation Total A.V.
Smokey Point Properties Property management $ 30,415,025 1.67%
Senior Operations LLC Military tank components 29,974,766 1.65
Arlington Advanced Mfg. Park Property mgmt/development 19,687,700 1.08
Lowe’s Companies of 61 Retail home improvement 17,106,200 0.94
Wal-Mart Retail department and grocery 16,338,000 0.90
Safeway Inc. Retail grocer 14,450,650 0.80
M&M Arlington LLC Retail shopping center 13,292,000 0.73
Cook Investments NW Indust. Park Financial planning/investments 10,828,500 0.60
MGP X Porperties Property mgmt/development 10,261,000 0.56
Ramo Realty & Construction Property mgmt/development 10,079,700 0.55
Subtotal – Ten of the City’s Largest Taxpayers 172,433,541 9.49
All Other City Taxpayers 1,643,880,584 90.51
Total City Taxpayers $ 1,816,314,125 100.00%
Sources: Snohomish County Assessor’s Office.
Collection of Other Taxes
In addition to regular property tax levies, the City is also authorized to impose various other taxes, including
those described below. Neither the State nor any municipal corporation of the State is authorized under the
Constitution to impose a tax on net income.
Local Sales and Use Tax. In addition to the State, the City imposes a sales and use tax as a percent of the selling
price on any retail sale or use of tangible personal property within the City, upon which the State also imposes
a sales and use tax. A portion of the total sales and use tax collected i s a local tax and is returned to the city or
county or certain other local jurisdictions where the sales transaction took place. The City’s sales and use tax is
collected by the State Department of Revenue (the “Department”) under a contract with the City that provides
for a deduction by the Department of 1% (not exceeding 2% of the tax collected) for the Department’s
administration costs. Of the remaining 99%, the Department distributes 15% to the County and distributes the
remaining 85% to the City for retail sales and use tax on a monthly basis. In 2013, the amount of the City’s
distribution was $3,279,622.
In addition to the 1% sales tax, the City receives a portion of a 1/10 of 1% sales tax for criminal justice
purposes. This tax is distributed with 10% going to the County and the remaining 90% distributed to cities
and the County based on population. The City received $259,803 in 2013 for this tax.
Streamlined Sales and Use. In 2003, the State Legislature approved legislation authorizing the State’s
membership in the Streamlined Sales and Use Tax Agreement (the “SSUTA”), in an effort to make sales and
use taxes in the State more uniform with other states. Congress has requi red that state sales taxes be more
uniform before Congress will permit taxation of interstate catalogue and Internet sales. In 2007, the State
Legislature adopted legislation fully conforming to the SSUTA. Effective July 1, 2008, the sales tax system
changed in the State from an origin-based system to a destination-based system. Under destination sourcing,
sales taxes on goods delivered to customers in the State are credited to the taxing jurisdiction where the goods
are delivered (as opposed to the point of sale) and the rate of the tax is determined by the local rate in the
destination taxing jurisdiction.
The State Legislature enacted certain provisions to mitigate net losses in sales and use tax collections of local
taxing jurisdictions resulting from the change to a destination-based system. To qualify, the local taxing
jurisdiction must be negatively impacted by the legislation and the local sales tax must be in effect before
July 1, 2008, among other requirements. Money for mitigation is subjec t to appropriation by the State
Legislature. In 2013, the amount of the mitigation for the impact of the SSUTA received by the City was
$97,310.
Utility Taxes. Utility taxes are taxes applied to utilities providing services in the City including City -owned
and privately-owned utilities. The City levies a tax of 5% on City owned utilities (Water, Sewer and
Stormwater) and 6% tax on telephone, electric and natural gas utilities. In addition, the City levies a tax of 8%
on solid waste disposal and cable television services.
The City collects revenues from the following major types of taxes: ad valorem property taxes, retails sales
and use taxes, utility taxes and others (including gambling taxes, leasehold excise taxes and admission taxes).
The following table shows the historical general fund collections from these major tax sources.
Historical General Fund Revenue Sources
Budget Actual Actual Actual Actual
2014 2013 2012 2011 2010
Source: City of Arlington.
In addition to these general fund tax revenues, the City collects a real estate excise taxes from property sales,
some of which goes directly towards the payment of general obligation debt service. A table showing
historical revenue from this source is as follows:
Budget Actual Actual Actual Actual
2014 2013 2012 2011 2010
Source: City of Arlington.
Authorized Investments
Chapter 35.39 RCW limits the investment by cities and towns of its inactive funds or other funds in excess of
current needs to the following authorized investments: United States bonds; United States certificates of
indebtedness; bonds or warrants of the S tate and any local government in the State; its own bonds or warrants
of a local improvement district which are within the protection of the local improvement guaranty fund law;
and any other investment authorized by law for any other taxing district or the State Treasurer. Under chapter
43.84 RCW, the State Treasurer may invest in non-negotiable certificates of deposit in designated qualified
public depositories; in obligations of the US government, its agencies and wholly owned corporations; in
bankers’ acceptances; in commercial paper; in the obligations of the federal home loan bank, federal national
mortgage association and other government corporations subject to statutory provisions and may enter into
repurchase agreements. Utility revenue bonds and warrants of any city and bonds or warrants of a local
improvement district are also eligible investments (RCW 35.39.030).
Money available for investment may be invested on an individual fund basis or may, unless otherwise
restricted by law, be commingled within one common investment portfolio. All income derived from such
investment may be either apportioned to and used by the various participating funds or for the benefit of the
general government in accordance with city ordinances or resolutions. Funds derived from the sale of bonds
or other instruments of indebtedness will be invested or used in such manner as the authorizing ordinances,
resolutions or bond covenants may lawfully prescribe.
Local Government Investment Pool
The State Treasurer’s Office administers the Washington State Local Government Investment Pool (the
“LGIP”), which invests money on behalf of more than 640 cities, counties and special taxing districts. In its
management of LGIP, the State Treasurer is required to adhere, at all times, to the principles appropriate for
the prudent investment of public funds. These are, in priority order, (i) the safety of principal; (ii) the
assurance of sufficient liquidity to meet cash flow demands; and (iii) to attain the highest possible yiel d within
the constraints of the first two goals. Historically, the LGIP has had sufficient liquidity to meet all cash flow
demands.
The LGIP, authorized by chapter 43.250 RCW, is a voluntary pool which provides its participants the
opportunity to benefit from the economies of scale inherent in pooling. It is also intended to offer participants
increased safety of principal and the ability to achieve a higher investment yield than would otherwise be
available to them. The pool is restricted to investments with maturities of one year or less, and the average life
typically is less than 90 days. Investments permitted under the pool’s guidelines include U.S. government and
agency securities, bankers’ acceptances, high quality commercial paper, repurchase and reverse repurchase
agreements, motor vehicle fund warrants, and certificates of deposit issued by qualified Washington State
depositories.
As of May 31, 2014, the City’s investments at market value totaled $17,428,678, 20 percent of which was
invested in the LGIP.
Authorized Investments for Bond Proceeds
In addition to the eligible investments discussed above, bond proceeds may also be invested in mutual funds
with portfolios consisting of U.S. government and guaranteed agency securities with aver age maturities of less
than four years; municipal securities rated in one of the four highest categories; and money market funds
consisting of the same, so long as municipal securities held in the fund(s) are in one of the two highest rating
categories of a nationally recognized rating agency. Bond proceeds may also be invested in shares of money
market funds with portfolios of securities otherwise authorized by law for investment by local governments
(RCW 39.59.030).
Financial Information
Comparative General Fund
Resources and Uses Arising from Cash Transactions
(Fiscal Years Ended December 31)
(1) In 2010, the Program Development Fund balance of $125,063 was added into the General Fund beginning cash balance.
(2) In 2009, the Recycling Fund balance of $21,989 was added into the General Fund beginning cash balance.
Source: City of Arlington.
Preliminary
2013 2012 2011 2010 2009 2008
Beginning Cash and Investments 553,433$ 22,891$ 474,190$ 478,276$ (1)289,109$ (2)452,007$
Operating Revenues
Taxes 8,952,185 8,619,811 8,230,965 7,959,680 7,239,817 7,496,817
Licenses and Permits 498,397 679,185 534,711 415,516 306,187 368,856
Intergovernmental Revenues 509,035 744,330 810,183 1,523,112 604,647 603,707
Charges for Goods and Services 1,029,968 2,565,326 2,732,811 2,443,562 2,329,636 1,715,365
Fines and Penalties 199,553 251,820 266,759 326,256 314,546 297,204
Miscellaneous Revenues 37,241 256,725 42,383 37,378 36,559 28,398
Other Financing Sources 12,785 4,900 169,402 4,048,253 1,636,857 671,698
Total Operating Revenues 11,239,164 13,122,097 12,787,213 16,753,757 12,468,249 11,182,045
Total Resources 11,792,597 13,144,988 13,261,403 17,232,033 12,757,358 11,634,052
Operating Expenditures
General Government 1,349,550 2,511,228 2,956,314 3,239,293 3,275,180 3,359,850
Public Safety 6,866,517 6,800,430 6,977,391 6,583,093 6,375,424 5,871,624
Utilities and Environment 292,871 597,394 515,856 643,232 688,844 29,009
Economic Environment 583,822 574,872 885,292 826,021 1,120,273 1,357,858
Culture and Recreation 397,127 354,226 460,887 522,785 616,884 679,402
Total Operating Expenditures 9,489,887 10,838,150 11,795,740 11,814,424 12,076,605 11,297,742
Debt Service 876,847 867,549 811,425 4,059,123 0 0
Capital Outlay 146,393 206,999 45,493 252,341 56,362 63,541
Total Expenditures 10,513,127 11,912,698 12,652,658 16,125,888 12,132,967 11,361,284
Other Financing Uses 707,385 650,000 562,577 621,238 250,149 45,989
Total Expenditures and Other Uses 11,220,512 12,562,698 13,215,235 16,747,126 12,383,116 11,407,272
Excess (Deficit) of Resources Over Uses 572,085 582,290 46,168 484,907 374,242 226,780
Non-revenues 218,050 303,064 187,810 256,571 255,827 310,426
Non-expenditures 148,220 331,921 211,087 267,288 276,857 270,086
Ending Net Cash and Investments 641,915$ 553,433$ 22,891$ 474,190$ 353,212$ (1)267,120$ (2)
Actual
Budget – General Fund Revenues & Expenditures
(Fiscal Years Ended December 31)
Source: City of Arlington.
Adopted Projected
2014 2015
Revenues
Taxes 8,951,100$ 10,189,000
Licenses and Permits 596,800 561,000
Intergovernmental Revenues 505,992 512,100
Charges for Services 2,263,588 2,284,588
Fines and Forfeits 320,200 320,200
Miscellaneous Revenues 18,750 20,750
Non-Revenues 259,000 259,000
Other Financing Sources 70,100 40,100
Total Operating Expenditures 12,985,530 14,186,738
Beginning Fund Balance 500,000 500,000
Total Revenues 13,485,530 14,686,738
Operating Expenditures
Salaries 6,199,068 6,321,467
Benefits 2,089,366 2,165,268
Supplies 127,600 116,150
Charges for Services 1,153,161 1,116,688
Intergovernmental 862,339 881,800
Non-Expenditures 259,000 259,000
Capital Outlay 57,600 37,800
Debt Service 872,720 923,380
Interfund Charges and Transfers 1,314,676 1,865,094
Transfer to Building Reserve 0 50,000
Transfer to Mandatory Reserve 50,000 50,000
Total Operating Expenditures 12,985,530 13,786,647
Ending Fund Balance 500,000 900,091
Total Expenditures 13,485,530$ 14,686,738$
The City
The City is a non-charter, code city incorporated in 1903. The City encompasses an area of 9.25 square miles in
northwestern Snohomish County along Interstate 5 and has a 2014 population of approximately ________.
The City operates under the laws of the State applicable to a code city with a Mayor-Council form of
government. City elected officials consist of the Mayor and seven council members. The six Council members
are elected to four-year terms, as is the Mayor. The seventh member is at-large and elected to a two-year term.
Council members serve staggered terms. The Council is responsible, among other things, for passing
ordinances and resolutions, adopting the budget, appointing committees, and adopting general policies and
goals for the City. The Mayor appoints, subject to Council approval, a City Administrator who serves as chief
administrator of the City and oversees the entire City government under the direction of the Mayor and the
policies of the Council. All City department managers report to the City Administrator.
The City is a general-purpose government and provides public safety, fire prevention, street improvement,
parks and recreation, health and social services, and general administrative services. In addition, the City
operates facilities for water supply/treatment/distribution, sewage collection/treatment, storm water (drainage)
collection and a municipal airport. Other local governments provide public education and library services.
The Council holds regular meetings the first and third Mondays of each month and workshop meetings on the
second and fourth Mondays, and special meetings as needed. All meetings are open to the public as provided
by law and agenda items are prepared in advance.
Principal City Officers
Current members of the Council are:
Member Position Term Expires
Barbara Tolbert Mayor January 1, 2016
Richard Butner Council Member January 1, 2016
Marilyn Oertle Council Member January 1, 2016
Debora Nelson Council Member January 1, 2018
Chris Raezer Council Member January 1, 2018
Jan Schuette Council Member January 1, 2018
Jesica Stickles Council Member January 1, 2018
Randy Tendering Council Member January 1, 2016
City Staff
Barbara Tolbert, Mayor. Ms. Tolbert was elected Mayor in November 2011 and took office on January 1, 2012.
She also serves at the Executive Director for the Arlington Fly-In. Ms. Tolbert studied Business Administration
at Grand Valley State University. Her current term expires on January 1, 2016.
Allen Johnson, City Administrator. Mr. Johnson was appointed as City Administrator in May, 2005. Mr. Johnson
holds a Masters Degree in Administration from the University of Missouri an d the University of Colorado.
Mr. Johnson has worked in public administration for over 30 years in the states of Colorado, Montana and
now Washington.
Kristin Banfield, Assistant City Administrator/City Clerk. Mrs. Banfield was appointed City Clerk in November,
2009. She served as City Administrator from January 2001 through June 2004, and also served as A ssistant to
the Administrator. She holds a Bachelor of Science, Public Administration from the University of Southern
California.
Jim Chase, Finance Director. Mr. Chase was appointed Finance Director in November, 2009. He was previously
with the City of Pasco, Washington for over 22 years, the last 10 years as Finance Manager. He attended
Whitworth College in Spokane, Washington.
Labor Relations
Approximately 129 full-time and part-time employees are currently employed by the City. The majority of
City employees who are eligible under State law to be represented by a labor organization are employed under
provisions of negotiated contracts with the bargaining units listed below. The City strives to complete
agreements with all groups in a timely manner, consistent with all applicable State law and to promote labor
relation policies mutually beneficial to management and employees. The City considers its relationships with
the bargaining units to be satisfactory.
No. of Employees
Union Represented Agreement Expires
IAFF Local 3728 (Fire) 27 December 31, 2014
Arlington Police Officers 24 December 31, 2014
AFSCME 48 December 25, 2014
Pension System
Substantially all of the City’s employees are enrolled in cost-sharing multiple-employer pension plans
administered by the State Department of Retirement Systems: Public Employees Retirement System (“PERS”)
and the Law Enforcement Officers and Fire Fighters Retirement System (“LEOFF”). Contributions by both
employees and employers are based on gross wages. PERS and LEOFF participants who joined the system by
September 30, 1977 are Plan 1 members. PERS participants who joined on or after October 1, 1977 and by
August 31, 2002 are Plan 2 members, unless they exercise an option to transfer to Plan 3. PERS participants
joining on or after September 1, 2002 have the irrevocable option of choosing membership in Pla n 2 or Plan 3.
LEOFF participants who joined on or after October 1, 1977 are Plan 2 members. PERS Plans 1 and 2 and
LEOFF are defined-benefit pension plans. PERS Plan 3 is a hybrid defined -benefit and defined-contribution
pension plan.
The following tables outline the contribution rates of employees and employers under PERS and LEOFF. In
2013, the City contributed $1,028,854 to PERS and $291,748 to LEOFF.
PERS Contribution Rates as of December 31, 2013
PERS Plan 1 PERS Plan 2 PERS Plan 3
(1)
(1) Includes a 0.18% administration fee.
LEOFF Contribution Rates as of December 31, 2013
Employee 0.00% 8.41%
Employer (1) 0.18% 5.23%
State 0.00% 3.36%
(1) Includes a 0.18% administration fee.
Information regarding all of these plans is presented in annual financial report of the State Department of
Retirement Systems, which may be obtained from:
Department of Retirement Systems
1025 East Union Street
P.O. Box 48380
Olympia, WA 98504-8380
Internet Address: www.drs.wa.gov (which website is not incorporated herein by reference)
While the City’s contributions in 2013 represented its full current liability under PERS and LEOFF, any
unfunded pension benefit obligations within the systems could be reflected in future years as higher
contribution rates. The website of the Office of the State Actuary includes information regarding the values
and funding levels of these retirement plans.
According to the Office of the State Actuary, as of June 30, 2012, PERS Plans 2 and 3 and LEOFF 1 and 2 and
PERS 2 had no unfunded actuarial accrued liability. However, during the years 2001 through 2010 the rates
adopted by the Legislature were lower than those that would have been required to produce actuarially
required contributions to PERS Plan 1, a closed plan with a large proportion of the retirees. According to a
report issued by the Office of the State Actuary in August 2013, and subject to the assumptions therein, the
total unfunded actuarial accrued liability of PERS Plan 1 was $3.847 billion (69% funded on an actuarial basis)
as of June 30, 2012. The assumptions used by the State Actuary in calculating the unfunded liability as of June
30, 2012 of PERS and LEOFF are 7.9 percent annual rate of investment return (7.5% for LEOFF—Plan 2), 3.75
percent salary increases, 3.0 percent inflation and 0.95 percent growth in membership (1.25% for LEOFF). To
report funded status, liabilities were valued using the “Projected Unit Credit” cost method and assets valued
using the actuarial value of assets.
Assets for one plan may not be used to fund benefits for another plan; however, all employers in PERS are
required to make contributions at rates (percentage of payroll) determined by the Offi ce of the State Actuary
every two years for the purpose of amortizing within a rolling 10 -year period the unfunded actuarial accrued
liability in PERS Plan 1. The State Legislature in 2009 established certain maximum contribution rates that
began in 2009 and continue until 2015 and certain minimum contribution rates that are to become effective in
2015 and remain in effect until the actuarial value of assets in PERS Plan 1 equal 100 percent of actuarial
accrued liability of PERS Plan 1. These rates are subject to change by future legislation enacted by the State
Legislature to address future changes in actuarial and economic assumptions and investment performance.
Other Post-Employment Benefits
In accordance with chapter 41.26 RCW, the City provides continuation of medical insurance coverage to
employees that retire under the LEOFF retirement system, which includes all police officers and fire fighters
who were hired prior to October 1, 1977. Medical coverage continues for the life of the retiree. The plan is a
closed, single-employer defined benefit healthcare plan administered by the City. As of December 31, 2013, six
retirees and no active employees received benefits, and a total of $63,494 was paid out for those benefits
during the year. The City’s annual other post-employment benefit (“OPEB”) cost is calculated based on the
annual required contribution (“ARC”), an amount actuarially determined in accordance with the parameters
of Governmental Accounting Standards Board (“GASB”) Statement 45. The ARC represents a level of funding
that, if paid on an ongoing basis, is projected to cover the normal cost each year and to amortize any unfunded
actuarial liabilities over a period not to exceed thirty years.
Insurance
The City is a member of the Washington Cities Insurance Authority (“WCIA”) of Washington and its
insurance pool (the “Pool”). WCIA is fully funded by its members, who make annual assessments on a
prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss
adjustment and administrative expenses. WCIA retains the right to additionally assess the membership for
any funding shortfall. WCIA offers a combination of self-insurance and standard insurance to cover liability
and property risks and provides related risk management services.
Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general,
automobile, police professional, public officials errors and omissions, stop gap and employee be nefits liability.
Limits are $4 million per occurrence in the self-insured layer, and $16 million per occurrence in the reinsured
excess layer. The excess layer is insured by the purchase of reinsurance and insurance and is subject to
aggregate limits. Total limits are $20 million per occurrence subject to aggregate and sub-limits in the excess
layer. The Board of Directors of WCIA determines the limits and terms of the coverage annually.
Insurance coverage for property, automobile physical damage, fidelity, inland marine, and boiler and
machinery are purchased on a group basis. Various deductibles apply by type of coverage. Property insurance
and auto physical damage are self-funded from the members’ deductible to $750,000, for all perils other tha n
flood and earthquake, and insured above that amount by the purchase of insurance.
Accounting and Budgeting Policies
The accounts of the City are organized on the basis of funds and account groups, each of which is considered a
separate accounting entity. Each fund is accounted for with a separate set of revenues and expenditures, as
appropriate. The City's resources are allocated to and accounted for in individual funds depending on their
intended purpose.
Annual appropriated budgets are adopted at the fund level, except in the general fund, where expenditures
are adopted at the department level. The budgets constitute the legal authority for expenditures at that level.
Annual appropriations for all funds lapse at the fiscal period end.
The Finance Director is authorized to transfer budgeted amounts between departments within any fund/object
within departments; however, any revisions that alter the total expenditures of a fund must be approved by
the City Council. The City Council approves all expenditures for payroll and claims.
Auditing of City Finances
Accounting systems and budgetary controls are prescribed by the Office of the State Auditor in accordance
with RCW 43.09.200 and RCW 43.09.230. State statutes require audits for cities to be conducted by the Office
of the State Auditor. The City complies with the systems and controls prescribed by the Office of the State
Auditor and establishes procedures and records which reasonably assure safeguarding of assets and the
reliability of financial reporting.
The State Auditor is required to examine the affairs of cities at least once every two years. The City i s audited
annually. The examination must include, among other things, the financial condition and resources of the
City, whether the laws and constitution of the State are being complied with, and the methods and accuracy of
the accounts and reports of the City. Reports of the auditor’s examinations are required to be filed in the office
of the State Auditor and in the finance department of the City.
The audited financial statements of the City for the year ended December 31, 201 2, attached as Appendix C,
are incorporated by reference to this Official Statement.
Demographic Information
Incorporated in 1903, the City is located in northern Snohomish County
approximately 10 miles north of Everett and 40 miles north of Seattle. The City limits
cover an area of approximately 9.25 square miles, and is roughly bounded by the
Stillaguamish River and its flood plain on the north-northwest. The City of
Marysville lies to the south and the Tulalip Indian Reservation to the southwest.
Further east up the Stillaguamish Valley is the Town of Darrington.
The City and the immediate area is primarily suburban and rural residential with
supporting retail and commercial enterprises. Light industrial and manufacturing
businesses are located in the central portions of the City around the city-owned
Arlington Airport.
Population
2014
2013 730,500 18,270 104,200
2012 722,900 17,970 103,300
2011 717,000 17,930 103,100
2010(1) 713,335 17,926 103,019
(1) Official 2010 U.S. Census figure.
Source: Washington State Office of Financial Management, June 2014.
Income. Historic personal income and per capita income levels for the County and the State are shown below:
Total Personal and Per Capita Income
2012 $33,570,183 $45,796 $317,574,707 $46,045
2011 32,343,174 44,755 303,087,834 44,420
2010 30,355,325 42,420 286,743,785 42,521
2009 29,950,211 42,404 280,778,028 42,112
2008 30,712,925 44,215 289,801,024 44,162
Source: U.S. Department of Commerce, Bureau of Economic Analysis, May 2014.
Snohomish County
Washington
Median Household Income. Median household income estimation is based on 1990 and 2000 Census data, and on
the Census Bureau's American Community Surveys' estimates for 2006-2010.
Year
Snohomish
County
State of
Washington
(1)
(2)
(1) The Revenue Forecast Council's November 2013 forecast of the state personal income is used in the projection of 2012
median household income.
(2) In addition to the state personal income data published by BEA, the payroll data compiled by the state Employment
Security Department are used in the Preliminary estimates of 2010 median household income.
Source: Washington State Department of Revenue, May 2014.
Taxable Retail Sales. Taxable retail sales reflect only those sales subject to retail sales tax. Historic taxable retail
sales for the County and the City of Everett are shown below:
Taxable Retail Sales
2013(1) $ 10,764,550,209 $ 374,821,421
2012 9,970,619,243 352,324,480
2011 9,392,065,498 339,677,936
2010 9,327,727,607 335,207,293
2009 9,275,209,987 335,217,861
(1) Unofficial figure through fourth quarter.
Source: Washington State Department of Revenue, June 2014.
Building Permits. The number and valuation of new single-family and multi-family residential building
permits in the County are listed below:
Snohomish County
Residential Building Permits
New Single Family Units New Multi-Family Units Total
Year Number Construction Cost Number Construction Cost Construction Cost
(1)
(1) Estimates with imputations through March.
Source: U.S. Bureau of the Census, May 2014.
Employment. Major employers located within the County include the following:
Snohomish County
2014 Major Employers
The Boeing Company Aircraft Manufacturing 40,000
Naval Station Everett U.S. Navy Base 6,350
Washington State (includes colleges) State Government 5,400
Providence Regional Medical Center Medical Services 3,500
Tulalip Tribes Enterprises Gaming, Real Estate, Gov't Services 3,500
Snohomish County Government County Government 2,700
The Everett Clinic Healthcare 2,500
Premera Blue Cross Heath Insurer 2,400
Walmart Retail 2,056
Everett School District School District 2,025
Philips Medical Systems Ultrasound Technology 2,000
Edmonds School District School District 1,865
Safeway Retail - Grocery 1,700
Swedish Edmonds Hospital Healthcare 1,700
Fred Meyer Retail - Grocery 1,600
Fluke Corp. (Danaher) Electronic Test & Measurement 1,200
Marysville School District School District 1,200
Albertson's Retail - Grocery 1,200
City of Everett City Government 1,136
Aviation Technical Services Aircraft Repair / Maintenance / Parts 1,000
Source: Economic Development Council of Snohomish County and InfoUSA, May 2014.
Employment within the County is described in the following tables.
Civilian Labor Force data is based on household surveys of residents. NAICS data are estimates based on
surveys of employers and benchmarked based on covered employment as reported by all employers.
Snohomish County
Nonagricultural Wage & Salary Workers(1)
and Labor Force and Employment Data
Annual Average
(2)
Civilian Labor Force 397,330 390,210 388,250 386,390 389,310
Total Employment 374,730 367,430 358,940 350,280 348,260
Total Unemployment 22,600 22,780 29,310 36,110 41,050
Percent of Labor Force 5.7% 5.8% 7.5% 9.3% 10.5%
(3)2014(2) 2013 2012 2011 2010
(1) Excludes proprietors, self-employed, members of the armed services, workers in private households, and agriculture.
Includes all full- and part-time wage and salary workers receiving pay during the pay period including the 12th of the
month.
(2) Data through April 2014.
(3) North American Industry Classification System.
Source: Washington State Employment Security Department, May 2014.
Initiative and Referendum
Under the State Constitution, the voters of the State have the ability to initiate legislation and modify existing
legislation through the powers of initiative and referendum, respectively. The initiative power in the State
may not be used to amend the St ate Constitution. Initiatives and referenda are submitted to the voters upon
receipt of a petition signed by at least 8% (initiative) and 4% (referenda) of the number of voters registered and
voting for the office of Governor at the preceding regular gubernatorial election. Any law approved in this
manner by a majority of the voters may not be amended or repealed by the State Legislature within a period of
two years following enactment, except by a vote of two-thirds of all the members elected to each house of the
Legislature. After two years, the law is subject to amendment or repeal by the Legislature in the same manner
as other laws.
Tax Matters
Exclusion From Gross Income
In the opinion of Bond Counsel, under existing federal law and assuming compli ance by the City with
applicable requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied
subsequent to the issue date of the Bonds, interest on the Bonds will be 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.
Continuing Requirements
The City is required to comply with certain requirements of the Code after the date of issuance of the Bonds in
order to maintain the exclusion of the interest on the Bonds 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 proce eds, limitations on investing gross proceeds of the Bonds in
higher yielding investments in certain circumstances, and the requirement to comply with the arbitrage rebate
requirement to the extent applicable to the Bonds. The City has covenanted in the Bo nd Ordinance to comply
with those requirements, but if the City fails to comply with those requirements, interest on the Bonds could
become taxable retroactive to the date of issuance of the Bonds. Bond Counsel has not undertaken and does
not undertake to monitor the City’s compliance with such requirements.
Alternative Minimum Tax
Interest on the Bonds is not an item of tax preference under the Code and is not subject to the federal
alternative minimum tax applicable to individuals. However, under Secti on 55 of the Code, tax exempt
interest, including interest on the Bonds, received by corporations is taken into account in the computation of
adjusted current earnings for purposes of the alternative minimum tax applicable to corporations (as defined
for federal income tax purposes). Under the Code, alternative minimum taxable income of a corporation will
be increased by 75% of the excess of the corporation's adjusted current earnings (including any tax exempt
interest) over the corporation's alternative minimum taxable income determined without regard to such
increase. A corporation's alternative minimum taxable income, so computed, that is in excess of an exemption
of $40,000, which exemption will be reduced (but not below zero) by 25% of the amount by w hich the
corporation's alternative minimum taxable income exceeds $150,000, is then subject to a 20% minimum tax.
A small business corporation is exempt from the corporate alternative minimum tax for any taxable year
beginning after December 31, 1997, if its average annual gross receipts during the three-taxable-year period
beginning after December 31, 1993, did not exceed $5,000,000, and its average annual gross receipts during
each successive three-taxable-year period thereafter ending before the relevant taxable year did not exceed
$7,500,000.
Tax on Certain Passive Investment Income of S Corporations
Under Section 1375 of the Code, certain excess net passive investment income, including interest on the Bonds,
received by an S corporation (a corporation treated as a partnership for most federal tax purposes) that has
Subchapter C earnings and profits at the close of the taxable year may be subject to federal income taxation at
the highest rate applicable to corporations if more than 25% of the gross receipts of such S corporation is
passive investment income.
Foreign Branch Profits Tax
Interest on the Bonds may be subject to the foreign branch profits tax imposed by Section 884 of the Code
when the Bonds are owned by, and effectively connected with a trade or business of, a United States branch of
a foreign corporation.
Possible Consequences of Tax Compliance Audit
The Internal Revenue Service (the “IRS”) has established a general audit program to determine whether
issuers of tax-exempt obligations, such as the Bonds, are in compliance with requirements of the Code that
must be satisfied in order for interest on those obligations to be, and continue to be, excluded from gross
income for federal income tax purposes. Bond Counsel cannot predict whether the IRS would commence an
audit of the Bonds. Depending on all the facts and circumstances and the type of audit involved, it is possible
that commencement of an audit of the Bonds could adversely affect the market value and liquidity of the
Bonds until the audit is concluded, regardless of its ultimate outcome.
Certain Other Federal Tax Consequences
Bonds “Qualified Tax-Exempt Obligations” for Financial Institutions. Section 265 of the Code generally provides
that 100% of any interest expense incurred by banks and other financial institutions that is allocable to tax -
exempt obligations acquired after August 7, 1986, will be disallowed as a tax deduction. However, if the tax-
exempt obligations are obligations other than certain private activity bonds, are issued by a governmental unit
that, together with all entities subordinate to it, does not reasonably anticipate issuing more than $10,000,000
of tax-exempt obligations (other than certain private activity bonds and other obligations not required to be
included in such calculation) in the current calendar year, and are designated by the governmental unit a s
“qualified tax-exempt obligations,” only 20% of any interest expense deduction allocable to those obligations
will be disallowed.
The City is a governmental unit that, together with all subordinate entities, reasonably anticipates issuing less
than $10,000,000 of tax exempt obligations (other than private activity bonds and other obligations not
required to be included in such calculation) during the current calendar year and has designated the Bonds as
“qualified tax exempt obligations” for purposes of the 80% financial institution interest expense deduction.
Therefore, only 20% of the interest expense of a financial institution allocable to the Bonds will be disallowed
for federal income tax purposes.
Reduction of Loss Reserve Deductions for Property and Casualty Insurance Companies. Under Section 832 of the
Code, interest on the Bonds received by property and casualty insurance companies will reduce tax deductions
for loss reserves otherwise available to such companies by an amount equal to 15 perce nt of tax exempt
interest received during the taxable year.
Effect on Certain Social Security and Retirement Benefits. Section 86 of the Code requires recipients of certain
Social Security and certain Railroad Retirement benefits to take receipts or accr uals of interest on the Bonds
into account in determining gross income.
Other Possible Federal Tax Consequences. Receipt of interest on the Bonds may have other federal tax
consequences as to which prospective purchasers of the Bonds may wish to consult their own tax advisors.
Potential Future Federal Tax Law Changes. From time to time, there are legislative proposals in Congress which,
if enacted, could require changes in the description of federal tax matters relating to the Bonds set forth above
or adversely affect the market value of the Bonds. It cannot be predicted whether future legislation may be
proposed or enacted that would affect the federal tax treatment of interest received on the Bonds. Prospective
purchasers of the Bonds should consult with their own tax advisors regarding any proposed or pending
legislation that would change the federal tax treatment of interest on the Bonds.
Preservation of Tax Exemption
The City has covenanted in the Bond Ordinance that it will take all actions nece ssary to prevent interest on the
Bonds from being included in gross income for federal income tax purposes, and it will neither take any action
nor make or permit any use of proceeds of the Bonds or other funds of the City treated as proceeds of the
Bonds at any time during the term of the Bonds which will cause interest on the Bonds to be included in gross
income for federal income tax purposes.
Rating
As noted on the cover page of this Official Statement, the City has applied for a rating for the Bonds from
Standard & Poor’s Rating Services, a division of the McGraw-Hill Companies, Inc. When and if obtained, the
rating will reflect only the views of the rating agency and an explanation of the significance of the rating may
be obtained from the rating agency. There is no assurance that the rating, once obtained, will be retained for
any given period of time or that the rating will not be revised downward or withdrawn entirely by the rating
agency if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of the
rating will be likely to have an adverse effect on the market price of the Bonds.
Continuing Disclosure
To meet the requirements of United States Securities and Exchange Commission (“SEC”) Rule 15c2-12(b)(5)
(the “Rule”), as applicable to a participating underwriter for the Bonds, the City will undertake (the
“Undertaking”) for the benefit of holders of the Bonds to provide or cause to be provided, either directly or
through a designated agent, to the Municipal Securities Rulemaking Board (“MSRB”), in an electronic format
as prescribed by the MSRB, accompanied by identifying information as prescribed by the MSRB: (a) annual
financial information and operating data of the type included in this Official Statement as generally described
below (“annual financial information”) and (b) timely notice (not in excess of ten business days after the
occurrence of the event) of the occurrence of any of the following events with respect to the Bonds:
(i) principal and interest payment delinquencies; (ii) non-payment related defaults, if material;
(iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on
credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their
failure to perform; (vi) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final
determinations of taxability, Notice of Proposed Issue (IRS Form 5701 – TEB) or other material notices or
determinations with respect to the tax status of the Bonds; (vii) modifications to rights of holders of the Bonds,
if material; (viii) Bond calls (other than scheduled mandatory redemption of Term Bonds), if material, and
tender offers; (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the Bonds, if
material; (xi) rating changes; (xii) bankruptcy, insolvency, receivership or similar event of the City , as such
“Bankruptcy Events” are defined in Rule 15c2-12; (xiii) the consummation of a merger, consolidation, or
acquisition involving the City or the sale of all or substantially all of the assets of the City other than in the
ordinary course of business, the entry into a definitive agreement to u ndertake such an action or the
termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;
and (xiv) appointment of a successor or additional trustee or the change of name of a trustee, if material.
The City will also provide to the MSRB timely notice of a failure by the City to provide required annual
financial information on or before the date specified below.
Type of Annual Financial Information Undertaken to be Provided . The annual financial information that the City
undertakes to provide will consist of: (1) annual financial statements prepared (except as noted in the financial
statements) in accordance with applicable generally accepted accounting principles applicab le to local
governmental units of the State such as the City, as such principles may be changed from time to time, which
statements may be unaudited, provided, that if and when audited financial statements are prepared and
available they will be provided; (2) principal amount of general obligation bonds outstanding at the end of the
applicable fiscal year; (3) assessed valuation for that fiscal year; and (4) property tax levy amounts and rates
for that fiscal year.
The annual financial information that the City undertakes to provide will be provided to the MSRB not later
than the last day of the ninth month after the end of each fiscal year of the City (currently, a fiscal year ending
December 31), as such fiscal year may be changed as permitted or required by State law, commencing with the
City’s fiscal year ending December 31, 2014.
The annual financial information may be provided in a single or multiple documents and may be incorporated
by specific reference to documents available to the public on the Internet website of the MSRB or filed with the
SEC.
Amendment of Undertaking. The Undertaking is subject to amendment after the primary offering of the Bonds
without the consent of any holder of any Bond, or of any broker, dealer, municipal securities deal er,
participating underwriter, rating agency or the MSRB, under the circumstances and in the manner permitted
by the Rule. The City will give notice to the MSRB of the substance (or provide a copy) of any amendment to
the Undertaking and a brief statement of the reasons for the amendment. If the amendment changes the type
of annual financial information to be provided, the annual financial information containing the amended
financial information will include a narrative explanation of the effect of that change in the type of information
to be provided.
Beneficiaries. The Undertaking evidenced by this section shall inure to the benefit of the City and the Beneficial
Owner holder of a Bond, and shall not inure to the benefit of or create any rights in any o ther person.
Termination of Undertaking. The City’s obligations under the Undertaking shall terminate upon the legal
defeasance of all of the Bonds. In addition, the City’s obligations under the Undertaking shall terminate if the
provisions of Rule 15c2-12 that require the City to comply with the Undertaking become legally inapplicable in
respect of the Bonds for any reason, as confirmed by an opinion of Bond Counsel delivered to the City, and the
City provides timely notice of such termination to the MSRB.
Remedy for Failure to Comply with Undertaking. If the City or any other obligated person fails to comply with the
Undertaking, the City will proceed with due diligence to cause such noncompliance to be corrected as soon as
practicable after the City learns of that failure. No failure by the City or other obligated person to comply with
the Undertaking will constitute a default in respect of the Bonds. The sole remedy of any holder of a Bond will
be to take such actions as that holder deems necessary, including seeking an order of specific performance
from an appropriate court, to compel the City or other obligated person to comply with the Undertaking.
Other Continuing Disclosure Undertakings of the City. The City has entered into undertakings to provide annual
information and the notice of the occurrence of certain events with respect to all bonds issued by the City and
is in compliance with all such undertakings.
Legal and Underwriting
Approval of Counsel
Legal matters incident to the authorization, issuance and sale of Bonds by the City are subject to the approving
legal opinion of Foster Pepper PLLC, Seattle, Washington, Bond Counsel. The form of the opinion of Bond
Counsel with respect to the Bonds is attached as Appendix A. The opinion of Bond Counsel is given based on
factual representations made to Bond Counsel, and under existing law, as of the date of initial delivery of the
Bonds, and Bond Counsel assumes no obligation to revise or supplement its opinion to reflect any facts or
circumstances that may thereafter come to its attention, or any changes in law that may thereafter occur. The
opinion of Bond Counsel is an expression of its professional judgment on the matters expressly addressed in
its opinion and does not constitute a guarantee of result. Bond Counsel will be compensated only upon the
issuance and sale of the Bonds.
Absence of Material Litigation
There is no litigation pending or threatened questioning the validity of the Bonds nor t he power and authority
of the City to issue the Bonds. There is no litigation pending or threatened which would materially affect the
City’s ability to meet debt service requirements on the Bonds. Because of the nature of its activities, the City is
subject to certain pending legal actions which arise in the ordinary course of business. Based on the
information presently known, the City believes that the ultimate liability for any of such legal actions will not
be material to the financial position of the City.
Underwriting
The Bonds are being purchased by Piper Jaffray & Co. (the “Underwriter”). The purchase contract provides
that the Underwriter will purchase all of the Bonds, if any are purchased, at a price of _____ percent of the par
value of the Bonds. The Bonds will be reoffered at an average price of _____ percent of the par value of the
Bonds. After the initial public offering, the public offering prices may be varied from time to time.
Piper Jaffray & Co. and Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation, entered into
an agreement (the “Agreement”) which enables Pershing LLC to distribute certain new issue municipal
securities underwritten by or allocated to Piper Jaffray & Co., inc luding the Bonds. Under the Agreement,
Piper Jaffray & Co. will share with Pershing LLC a portion of the fee or commission paid to Piper Jaffray & Co.
Piper Jaffray & Co. has entered into a distribution agreement (“Distribution Agreement”) with Charles
Schwab & Co., Inc. (“CS&Co”) for the retail distribution of certain securities offerings at the original issue
prices. Pursuant to the Distribution Agreement, CS&Co. may purchase Bonds from Piper Jaffray & Co. at the
original issue price less a negotiated portion of the selling concession applicable to any Bonds that CS&Co.
sells.
Conflicts of Interest
Some or all of the fees of the Underwriter and Bond Counsel are contingent upon the issuance and sale of the
Bonds. Furthermore, Bond Counsel from time to time serves as counsel to the Underwriter with respect to
issuers other than the City and transactions other than the issuance of the Bonds. None of the Council
members or other officers of the City have interests in the issuance of the Bonds that are pr ohibited by
applicable law.
Concluding Statement
All estimates, assumptions, statistical information and other statements contained herein, while taken from
sources considered reliable, are not guaranteed by the City or the Underwriter. So far as any sta tement herein
includes matters of opinion, or estimates of future expenses and income, whether or not expressly so stated,
they are intended merely as such and not as representations of fact.
The information contained herein should not be construed as representing all conditions affecting the City or
the Bonds. Additional information may be obtained directly from the City or the Underwriter.
The foregoing statements relating to the Bond Ordinance and other documents are in all respects subject to
and qualified in their entirety by provisions of such documents.
This Official Statement, starting with the cover page and all subsequent pages, including any appendices,
comprise the entire Official Statement, which has been approved by the City. The City has represented to the
Underwriter that the portions of this Official Statement directly pertaining to the City neither contain any
misrepresentation of material fact nor omit any material fact necessary to understand the financial, economic
or legal nature of the City or any information presented herein.
Appendix A
Form of the Opinion of Bond Counsel
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Appendix B
Book-Entry Transfer System
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The Depository Trust Company
A subsidiary of The Depository Trust & Clearing Corporation
Sample Offering Document Language
Describing DTC and Book-Entry-Only Issuance
1. The Depository Trust Company (“DTC”), New York, NY, will act as securities
depository for the securities (the “Securities”). The Securities will be issued as fully-registered
securities registered in the name of Cede & Co. (D TC’s partnership nominee) or such other name as
may be requested by an authorized representative of DTC. One fully-registered Security certificate
will be issued for [each issue of] the Securities, [each] in the aggregate principal amount of such
issue, and will be deposited with DTC. [If, however, the aggregate principal amount of [any] issue
exceeds $500 million, one certificate will be issued with respect to each $500 million of principal
amount, and an additional certificate will be issued with respect to any remaining principal amount of
such issue.]
2. DTC, the world’s largest securities depository, is a limited-purpose trust company
organized under the New York Banking Law, a “banking organization” within the meaning of the
New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within
the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and
provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and
municipal debt issues, and money market instruments (from over 100 countries) that DTC’s
participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement
among Direct Participants of sales and other securities transactions in deposited securities, through
electronic computerized book-entry transfers and pl edges between Direct Participants’ accounts. This
eliminates the need for physical movement of securities certificates. Direct Participants include both
U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and
certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing
Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing
Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies.
DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available
to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and
clearing corporations that clear through or maintain a custodial relationship with a Direct P articipant,
either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor’s rating of AA+.
The DTC Rules applicable to its Participants are on file with the Securities and Exchange
Commission. More information about DTC can be found at www.dtcc.com.
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3. Purchases of Securities under the DTC system must be m ade by or through Direct
Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of
each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct
and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from
DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their holdings, from the Direct
or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Securities are to be accomplished by entries made on the books of Direct
and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Securities, except in the event that use of the
book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with
DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as
may be requested by an authorized representative of DTC. The deposit of Securities with DTC and
their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities;
DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities
are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants
will remain responsible for keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by
Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time. [Beneficial Owners of Securities may
wish to take certain steps to augment the transmission to them of notices of significant events with
respect to the Securities, such as redem ptions, tenders, defaults, and proposed amendments to the
Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the
nominee holding the Securities for their benefit has agreed to obtain and transmit notices to
Beneficial Owners. In the alternative, Beneficial Owners m ay wish to provide their names and
addresses to the registrar and request that copies of notices be provided directly to them.]
6. Redemption notices shall be sent to DTC. If less than all of the Securities within an
issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each
Direct Participant in such issue to be redeemed.
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SOL 08-10-11
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with
respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI
Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those
Direct Participants to whose accounts Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
8. Redemption proceeds, distributions, and dividend payments on the Securities will be
made to Cede & Co., or such other nominee as may be requested by an authorized representative of
DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and
corresponding detail information from Issuer or Agent, on payable date in accordance with their
respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case with securities held for the
accounts of customers in bearer form or registered in “street name,” and will be the responsibility of
such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements
as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend
payments to Cede & Co. (or such other nominee as may be requested by an authorized representative
of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct
Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial
Owners will be the responsibility of Direct and Indirect Participants.
9. A Beneficial Owner shall give notice to elect to have its Securities purchased or
tendered, through its Participant, to [Tender/Remarketing] Agent, and shall effect delivery of such
Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on
DTC’s records, to [Tender/Remarketing] Agent. The requirement for physical delivery of Securities in
connection with an optional tender or a m andatory purchase will be deemed satisfied when the
ownership rights in the Securities are transferred by Direct Participants on DTC’s records and
followed by a book-entry credit of tendered Securities to [Tender/Remarketing] Agent’s DTC
account.
10. DTC may discontinue providing its services as depository with respect to the Securities at
any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that
a successor depository is not obtained, Security certificates are required to be printed and delivered.
11. Issuer may decide to discontinue use of the system of book-entry-only transfers through
DTC (or a successor securities depository). In that event, Security certificates will be printed and
delivered to DTC.
12. The information in this section concerning DTC and DTC’s book-entry system has
been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for
the accuracy thereof.
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Appendix C
2012 Audited Financial Statements
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51293098.5
CITY OF ARLINGTON, WASHINGTON
ORDINANCE NO. ______
AN ORDINANCE of the City of Arlington, Washington, providing for the
issuance, sale and delivery of not to exceed $9,000,000 aggregate principal
amount of limited tax general obligation refunding bonds to refund the City’s
outstanding Limited Tax General Obligation Bonds, 2004, to prepay the City’s
Limited Tax General Obligation Bond, 2009, and to pay the costs of issuance and
sale of the bonds; fixing or setting parameters with respect to certain terms and
covenants of the bonds; appointing the City’s designated representative to
approve the final terms of the sale of the bonds; and providing for other related
matters.
Passed July 7, 2014
This document prepared by:
Foster Pepper PLLC
1111 Third Avenue, Suite 3400
Seattle, Washington 98101
(206) 447-4400
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51293098.5
TABLE OF CONTENTS*
Section 1. Definitions............................................................................................................... 1
Section 2. Findings and Determinations .................................................................................. 4
Section 3. Authorization of Bonds ........................................................................................... 5
Section 4. Description of the Bonds; Appointment of Designated Representative ................. 5
Section 5. Bond Registrar; Registration and Transfer of Bonds .............................................. 7
Section 6. Form and Execution of Bonds ................................................................................ 8
Section 7. Payment of Bonds ................................................................................................... 8
Section 8. Bond Account ......................................................................................................... 8
Section 9. Redemption Provisions and Purchase of Bonds ..................................................... 9
Section 10. Failure To Pay Bonds............................................................................................ 10
Section 11. Pledge of Taxes ..................................................................................................... 10
Section 12. Tax Covenants; Designation of Bonds as “Qualified Tax-Exempt
Obligations” .......................................................................................................... 10
Section 13. Refunding or Defeasance of the Bonds ................................................................ 11
Section 14. Refunding of the Refunded Bonds ........................................................................ 12
Section 15. Call for Redemption of the Refunded Bonds ........................................................ 13
Section 16. Findings with Respect to Refunding ..................................................................... 14
Section 17. Sale and Delivery of the Bonds. ........................................................................... 14
Section 18. Official Statement ................................................................................................. 14
Section 19. Continuing Disclosure .......................................................................................... 15
Section 20. Supplemental and Amendatory Ordinances.......................................................... 17
Section 21. General Authorization and Ratification ................................................................ 17
Section 22. Severability ........................................................................................................... 18
Section 23. Effective Date of Ordinance ................................................................................. 18
*The cover page, table of contents and section headings of this ordinance are for convenience of reference only,
and shall not be used to resolve any question of interpretation of this ordinance.
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51293098.5
CITY OF ARLINGTON, WASHINGTON
ORDINANCE NO. _______
AN ORDINANCE of the City of Arlington, Washington, providing for the
issuance, sale and delivery of not to exceed $9,000,000 aggregate principal
amount of limited tax general obligation refunding bonds to refund the City’s
outstanding Limited Tax General Obligation Bonds, 2004, to prepay the City’s
Limited Tax General Obligation Bond, 2009, and to pay the costs of issuance and
sale of the bonds; fixing or setting parameters with respect to certain terms and
covenants of the bonds; appointing the City’s designated representative to
approve the final terms of the sale of the bonds; and providing for other related
matters.
THE CITY COUNCIL OF THE CITY OF ARLINGTON, WASHINGTON, DO
ORDAIN AS FOLLOWS:
Section 1. Definitions. As used in this ordinance, the following capitalized terms
shall have the following meanings:
(a) “Acquired Obligations” means those United States Treasury Certificates of
Indebtedness, Notes, and Bonds--State and Local Government Series and other direct,
noncallable obligations of the United States of America purchased to accomplish the refunding
of the Refunded Bonds as authorized by this ordinance.
(b) “Authorized Denomination” means $5,000 or any integral multiple thereof within
a maturity of a Series.
(c) “Beneficial Owner” means, with respect to a Bond, the owner of any beneficial
interest in that Bond.
(d) “Bond” means each bond issued pursuant to and for the purposes provided in this
ordinance.
(e) “Bond Counsel” means the firm of Foster Pepper PLLC, its successor, or any
other attorney or firm of attorneys selected by the City with a nationally recognized standing as
bond counsel in the field of municipal finance.
(f) “Bond Account” means the Limited Tax General Obligation Refunding Bond
Account, 2014, of the City created for the payment of the principal of and interest on the Bonds.
(g) “Bond Purchase Contract” means an offer to purchase a Series of the Bonds,
setting forth certain terms and conditions of the issuance, sale and delivery of those Bonds,
which offer is authorized to be accepted by the Designated Representative on behalf of the City,
if consistent with this ordinance.
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51293098.5
(h) “Bond Register” means the books or records maintained by the Bond Registrar for
the purpose of identifying ownership of each Bond.
(i) “Bond Registrar” means the Fiscal Agent, or any successor bond registrar
selected by the City.
(j) “City” means the City of Arlington, Washington, a municipal corporation duly
organized and existing under the laws of the State.
(k) “City Council” means the legislative authority of the City, as duly and regularly
constituted from time to time.
(l) “Code” means the United States Internal Revenue Code of 1986, as amended, and
applicable rules and regulations promulgated thereunder.
(m) “DTC” means The Depository Trust Company, New York, New York, or its
nominee.
(n) “Designated Representative” means the officer of the City appointed in Section 4
of this ordinance to serve as the City’s designated representative in accordance with
RCW 39.46.040(2).
(o) “Final Terms” means the terms and conditions for the sale of a Series of the
Bonds including the amount, date or dates, denominations, interest rate or rates (or mechanism
for determining interest rate or rates), payment dates, final maturity, redemption rights, price, and
other terms or covenants, including minimum savings for refunding bonds.
(p) “Fiscal Agent” means the fiscal agent of the State, as the same may be designated
by the State from time to time.
(q) “Government Obligations” has the meaning given in RCW 39.53.010, as now in
effect or as may hereafter be amended.
(r) “Issue Date” means, with respect to a Bond, the date of initial issuance and
delivery of that Bond to the Purchaser in exchange for the purchase price of that Bond.
(s) “Letter of Representations” means the Blanket Issuer Letter of Representations
between the City and DTC, dated July 15, 1997, as it may be amended from time to time, and
any successor or substitute letter relating to the operational procedures of the Securities
Depository.
(t) “MSRB” means the Municipal Securities Rulemaking Board.
(u) “Owner” means, without distinction, the Registered Owner and the Beneficial
Owner.
(v) “Purchaser” means Piper Jaffray & Co. of Seattle, Washington.
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51293098.5
(w) “Rating Agency” means any nationally recognized rating agency then maintaining
a rating on the Bonds at the request of the City.
(x) “Record Date” means the Bond Registrar’s close of business on the 15th day of
the month preceding an interest payment date. With respect to redemption of a Bond prior to its
maturity, the Record Date shall mean the Bond Registrar’s close of business on the date on
which the Bond Registrar sends the notice of redemption in accordance with Section 9.
(y) “Refunded Bonds” means all or a portion of the Refunding Candidates selected by
the Designated Representative to be refunded with proceeds of Bonds and included in a
Refunding Plan.
(z) “Refunding Candidates” means the outstanding Limited Tax General Obligation
Bonds, 2004, of the City maturing in the years 2022 through 2028, inclusive, and 2034, issued
pursuant to Ordinance No. 1321, the refunding of which has been provided for by this ordinance.
(aa) “Refunding Plan” means:
(1) the placement of sufficient proceeds of the Bonds which, with other
money of the City, if necessary, will be used to acquire the Acquired
Obligations to be deposited, with cash, if necessary, with the Refunding
Trustee;
(2) the payment of the principal of and interest on the Refunded Bonds when
due up to and including a date that is approximately 30 days from the
Issue Date, and the call, payment, and redemption on such date, of all of
the then-outstanding Refunded Bonds at a price of par; and
(3) may include the payment of the costs of issuing the Bonds and the costs of
carrying out the foregoing elements of the Refunding Plan.
(bb) “Refunding Trust Agreement” means a Refunding Trust Agreement between the
City and the Refunding Trustee.
(cc) “Refunding Trustee” means the trustee or escrow agent or any successor trustee or
escrow agent serving as refunding trustee to carry out the Refunding Plan.
(dd) “Registered Owner” means, with respect to a Bond, the person in whose name
that Bond is registered on the Bond Register. For so long as the City utilizes the book–entry only
system for the Bonds under the Letter of Representations, Registered Owner shall mean the
Securities Depository.
(ee) “Rule 15c2-12” means Rule 15c2-12 promulgated by the SEC under the
Securities Exchange Act of 1934, as amended.
(ff) “SEC” means the United States Securities and Exchange Commission.
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51293098.5
(gg) “Securities Depository” means DTC, any successor thereto, any substitute
securities depository selected by the City that is qualified under applicable laws and regulations
to provide the services proposed to be provided by it, or the nominee of any of the foregoing.
(hh) “Series of the Bonds” or “Series” means a series of the Bonds issued pursuant to
this ordinance.
(ii) “State” means the State of Washington.
(jj) “Term Bond” means each Bond designated as a Term Bond and subject to
mandatory redemption in the years and amounts set forth in the Bond Purchase Contract.
(kk) “2004 Bonds” means the City’s outstanding Limited Tax General Obligation
Bonds, 2004, issued pursuant to Ordinance No. 1321.
(ll) “2009 Bond” means the City’s outstanding Limited Tax General Obligation
Bond, 2009, issued pursuant to Ordinance No. 1470.
(mm) “Undertaking” means the undertaking to provide continuing disclosure entered
into pursuant to Section 18 of this ordinance.
Section 2. Findings and Determinations. The City takes note of the following facts
and makes the following findings and determinations:
(a) Pursuant to Ordinance No. 1321, the City heretofore issued its $7,700,000 par
value Limited Tax General Obligation Bonds, 2004 (the “2004 Bonds”), for the purpose of
providing funds to finance a police station/City Hall annex, and by that ordinance reserved the
right to redeem the 2004 Bonds prior to their maturity on or after June 1, 2014, at a price of par
plus accrued interest to the date fixed for redemption.
(b) All 2004 Bonds are presently outstanding (the “Refunding Candidates”).
(c) After due consideration, it appears to the City Council that all or a portion of the
Refunding Candidates may be refunded by the issuance and sale of the limited tax general
obligation refunding bonds authorized herein so that a savings will be effected by the difference
between the principal and interest cost over the life of the Bonds and the principal and interest
cost over the life of the Refunded Bonds but for such refunding, which refunding will be effected
by carrying out the Refunding Plan.
(d) To effect that refunding in the manner that will be most advantageous to the City
it may be found necessary and advisable that certain Acquired Obligations bearing interest and
maturing at such time or times as necessary to accomplish the refunding as aforesaid be
purchased out of a portion of the proceeds of the Bonds.
(e) Pursuant to Ordinance No. 1470, the City heretofore issued its $720,448 par value
Limited Tax General Obligation Bond, 2009 (the “2009 Bond”), for the purpose of providing
part of the funds to expand the administrative building at the City’s municipal airport, and by
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that ordinance reserved the right to prepay the 2009 Bond prior to its maturity date upon 15 days
written notice to Cashmere Valley Bank, purchaser of the 2009 Bond.
(f) The maximum amount of indebtedness authorized by this ordinance is
$9,000,000. Based on the following facts, this amount is to be issued within the amount
permitted to be issued by the City for general municipal purposes without a vote.
(1) The assessed valuation of the taxable property within the City as
ascertained by the last preceding assessment for City purposes for
collection in the calendar year 2014 is $1,816,314,125.
(2) As of June 1, 2014, the City has limited tax general obligation
indebtedness, consisting of bonds, notes and leases outstanding in the
principal amount of $18,385,250 which is incurred within the limit of up
to 1½% of the value of the taxable property within the City permitted for
general municipal purposes without a vote.
(3) As of June 1, 2014, the City has no unlimited tax general obligation
indebtedness outstanding.
(g) For the purpose of providing the funds necessary to carry out the Refunding Plan,
to prepay the 2009 Bond and to pay the costs of issuance and sale of the Bonds, the City Council
finds that it is in the best interests of the City and its taxpayers to issue and sell the Bonds to the
Purchaser, pursuant to the terms set forth in the Bond Purchase Contract as approved by the
City’s Designated Representative consistent with this ordinance.
Section 3. Authorization of Bonds. The City is authorized to borrow money on the
credit of the City and issue negotiable limited tax general obligation refunding bonds evidencing
indebtedness in the amount of not to exceed $9,000,000 to provide funds necessary to carry out
the Refunding Plan and to pay the costs of issuance and sale of the Bonds.
Section 4. Description of the Bonds; Appointment of Designated Representative. The
Finance Director, or in his absence, the City Administrator, is appointed as the Designated
Representative of the City and is authorized and directed to conduct the sale of the Bonds in the
manner and upon the terms deemed most advantageous to the City, and to approve the Final
Terms of the Bonds, with such additional terms and covenants as the Designated Representative
deems advisable, within the following parameters:
(a) Principal Amount. The Bonds may be issued in one or more Series and shall not
exceed the aggregate principal amount of $9,000,000.
(b) Date or Dates. Each Bond shall be dated the Issue Date, which date may not be
later than June 1, 2015.
(c) Denominations, Series Designation, etc. The Bonds shall be issued in Authorized
Denominations and shall be numbered separately in the manner and shall bear any name and
additional designation as deemed necessary or appropriate by the Designated Representative.
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(d) Interest Rate(s). Each Bond shall bear interest at a fixed rate per annum
(computed on the basis of a 360-day year of twelve 30-day months) from the Issue Date or from
the most recent date for which interest has been paid or duly provided for, whichever is later.
One or more rates of interest may be fixed for the Bonds. No rate of interest for any Bond may
exceed 5.5%, and the true interest cost to the City for each Series of Bonds may not exceed
5.0%.
(e) Payment Dates. Interest shall be payable at fixed rates semiannually on dates
acceptable to the Designated Representative, commencing no later than one year following the
Issue Date. Principal payments shall commence on a date acceptable to the Designated
Representative and shall be payable at maturity or in mandatory redemption installments on
dates acceptable to the Designated Representative.
(f) Final Maturity. The Bonds shall mature no later than December 1, 2034.
(g) Redemption Rights. The Designated Representative may approve in the Bond
Purchase Contract provisions for the optional and mandatory redemption of Bonds, subject to the
following:
(1) Optional Redemption. Any Bond may be designated as being (A) subject
to redemption at the option of the City prior to its maturity date on the
dates and at the prices set forth in the Bond Purchase Contract; or (B) not
subject to redemption prior to its maturity date. If a Bond is designated as
subject to optional redemption prior to its maturity, it must be subject to
such redemption on one or more dates occurring not more than 10½ years
after the Issue Date.
(2) Mandatory Redemption. Any Bond may be designated as a Term Bond,
subject to mandatory redemption prior to its maturity on the dates and in
the amounts set forth in the Bond Purchase Contract.
(h) Price. The purchase price for each Series of Bonds may not be less than 95% or
more than 120% of the stated principal amount of that Series.
(i) Savings. There is a minimum net present value savings of 3.0% of the Refunded
Bonds.
(j) Other Terms and Conditions.
(1) A Series of Bonds may not be issued if it would cause the indebtedness of
the City to exceed the City’s legal debt capacity on the Issue Date.
(2) The Designated Representative may determine whether it is in the City’s
best interest to provide for bond insurance or other credit enhancement;
and may accept such additional terms, conditions and covenants as he may
determine are in the best interests of the City, consistent with this
ordinance.
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Section 5. Bond Registrar; Registration and Transfer of Bonds.
(a) Registration of Bonds. Each Bond shall be issued only in registered form as to
both principal and interest and the ownership of each Bond shall be recorded on the Bond
Register.
(b) Bond Registrar; Duties. The Fiscal Agent is appointed as initial Bond Registrar.
The Bond Registrar shall keep, or cause to be kept, sufficient books for the registration and
transfer of the Bonds, which shall be open to inspection by the City at all times. The Bond
Registrar is authorized, on behalf of the City, to authenticate and deliver Bonds transferred or
exchanged in accordance with the provisions of the Bonds and this ordinance, to serve as the
City’s paying agent for the Bonds and to carry out all of the Bond Registrar’s powers and duties
under this ordinance. The Bond Registrar shall be responsible for its representations contained in
the Bond Registrar’s Certificate of Authentication on each Bond. The Bond Registrar may
become an Owner with the same rights it would have if it were not the Bond Registrar and, to the
extent permitted by law, may act as depository for and permit any of its officers or directors to
act as members of, or in any other capacity with respect to, any committee formed to protect the
rights of Owners.
(c) Bond Register; Transfer and Exchange. The Bond Register shall contain the name
and mailing address of each Registered Owner and the principal amount and number of each
Bond held by each Registered Owner. A Bond surrendered to the Bond Registrar may be
exchanged for a Bond or Bonds in any Authorized Denomination of an equal aggregate principal
amount and of the same Series, interest rate and maturity. A Bond may be transferred only if
endorsed in the manner provided thereon and surrendered to the Bond Registrar. Any exchange
or transfer shall be without cost to the Owner or transferee. The Bond Registrar shall not be
obligated to exchange any Bond or transfer registered ownership during the period between the
applicable Record Date and the next upcoming interest payment or redemption date.
(d) Securities Depository; Book-Entry Only Form. DTC is appointed as initial
Securities Depository. Each Bond initially shall be registered in the name of Cede & Co., as the
nominee of DTC. Each Bond registered in the name of the Securities Depository shall be held
fully immobilized in book-entry only form by the Securities Depository in accordance with the
provisions of the Letter of Representations. Registered ownership of any Bond registered in the
name of the Securities Depository may not be transferred except: (i) to any successor Securities
Depository; (ii) to any substitute Securities Depository appointed by the City; or (iii) to any
person if the Bond is no longer to be held in book-entry only form. Upon the resignation of the
Securities Depository, or upon a termination of the services of the Securities Depository by the
City, the City may appoint a substitute Securities Depository. If (i) the Securities Depository
resigns and the City does not appoint a substitute Securities Depository, or (ii) the City
terminates the services of the Securities Depository, the Bonds no longer shall be held in book-
entry only form and the registered ownership of each Bond may be transferred to any person as
provided in this ordinance.
Neither the City nor the Bond Registrar shall have any obligation to participants of any
Securities Depository or the persons for whom they act as nominees regarding accuracy of any
records maintained by the Securities Depository or its participants. Neither the City nor the Bond
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Registrar shall be responsible for any notice that is permitted or required to be given to a
Registered Owner except such notice as is required to be given by the Bond Registrar to the
Securities Depository.
Section 6. Form and Execution of Bonds.
(a) Form of Bonds; Signatures and Seal. Each Bond shall be prepared in a form
consistent with the provisions of this ordinance and State law. Each Bond shall be signed by the
Mayor and the City Clerk, either or both of whose signatures may be manual or in facsimile, and
the seal of the City or a facsimile reproduction thereof shall be impressed or printed thereon. If
any officer whose manual or facsimile signature appears on a Bond ceases to be an officer of the
City authorized to sign bonds before the Bond bearing his or her manual or facsimile signature is
authenticated by the Bond Registrar, or issued or delivered by the City, that Bond nevertheless
may be authenticated, issued and delivered and, when authenticated, issued and delivered, shall
be as binding on the City as though that person had continued to be an officer of the City
authorized to sign bonds. Any Bond also may be signed on behalf of the City by any person who,
on the actual date of signing of the Bond, is an officer of the City authorized to sign bonds,
although he or she did not hold the required office on its Issue Date.
(b) Authentication. Only a Bond bearing a Certificate of Authentication in
substantially the following form, manually signed by the Bond Registrar, shall be valid or
obligatory for any purpose or entitled to the benefits of this ordinance: “Certificate of
Authentication. This Bond is one of the fully registered City of Arlington, Washington, Limited
Tax General Obligation Refunding Bonds, 2014.” The authorized signing of a Certificate of
Authentication shall be conclusive evidence that the Bond so authenticated has been duly
executed, authenticated and delivered and is entitled to the benefits of this ordinance.
Section 7. Payment of Bonds. Principal of and interest on each Bond shall be payable
in lawful money of the United States of America. Principal of and interest on each Bond
registered in the name of the Securities Depository is payable in the manner set forth in the
Letter of Representations. Interest on each Bond not registered in the name of the Securities
Depository is payable by electronic transfer on the interest payment date, or by check or draft of
the Bond Registrar mailed on the interest payment date to the Registered Owner at the address
appearing on the Bond Register on the Record Date. However, the City is not required to make
electronic transfers except pursuant to a request by a Registered Owner in writing received on or
prior to the Record Date and at the sole expense of the Registered Owner. Principal of each Bond
not registered in the name of the Securities Depository is payable upon presentation and
surrender of the Bond by the Registered Owner to the Bond Registrar. The Bonds are not subject
to acceleration under any circumstances.
Section 8. Bond Account. The Bond Account is created as a special account of the
City for the sole purpose of paying principal of and interest and any redemption premium, if any,
on the Bonds. Bond proceeds in excess of the amounts needed to pay the costs of the Refunding
Plan and the costs of issuance, if any, shall be deposited into the Bond Account. All amounts
allocated to the payment of the principal of and interest on the Bonds shall be deposited in the
Bond Account as necessary for the timely payment of amounts due with respect to the Bonds.
The principal of and interest on the Bonds shall be paid out of the Bond Account. Until needed
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for that purpose, the City may invest money in the Bond Account temporarily in any legal
investment, and the investment earnings shall be retained in the Bond Account and used for the
purposes of that account.
Section 9. Redemption Provisions and Purchase of Bonds.
(a) Optional Redemption. The Bonds shall be subject to redemption at the option of
the City on terms acceptable to the Designated Representative, as set forth in the Bond Purchase
Contract, consistent with the parameters set forth in Section 4.
(b) Mandatory Redemption. Each Bond that is designated as a Term Bond in the
Bond Purchase Contract, consistent with the parameters set forth in Section 4, if not previously
redeemed under any optional redemption provisions, defeased or purchased and surrendered for
cancellation under the provisions set forth below, shall be called for redemption at a price equal
to the stated principal amount to be redeemed, plus accrued interest, on the dates and in the
amounts as set forth in the Bond Purchase Contract. If a Term Bond is redeemed under the
optional redemption provisions, defeased or purchased by the City and surrendered for
cancellation, the principal amount of the Term Bond so redeemed, defeased or purchased
(irrespective of its actual redemption or purchase price) shall be credited against one or more
scheduled mandatory redemption installments for that Term Bond. The City shall determine the
manner in which the credit is to be allocated and shall notify the Bond Registrar in writing of its
allocation prior to the earliest mandatory redemption date for that Term Bond for which notice of
redemption has not already been given.
(c) Selection of Bonds for Redemption; Partial Redemption. If fewer than all of the
outstanding Bonds are to be redeemed at the option of the City, the City shall select the Series
and maturities to be redeemed. If fewer than all of the outstanding Bonds of a maturity of a
Series are to be redeemed, the Securities Depository shall select Bonds registered in the name of
the Securities Depository to be redeemed in accordance with the Letter of Representations, and
the Bond Registrar shall select all other Bonds to be redeemed randomly in such manner as the
Bond Registrar shall determine. All or a portion of the principal amount of any Bond that is to be
redeemed may be redeemed in any Authorized Denomination. If less than all of the outstanding
principal amount of any Bond is redeemed, upon surrender of that Bond to the Bond Registrar,
there shall be issued to the Registered Owner, without charge, a new Bond (or Bonds, at the
option of the Registered Owner) of the same Series, maturity and interest rate in any Authorized
Denomination in the aggregate principal amount to remain outstanding.
(d) Notice of Redemption. Notice of redemption of each Bond registered in the name
of the Securities Depository shall be given in accordance with the Letter of Representations.
Notice of redemption of each other Bond, unless waived by the Registered Owner, shall be given
by the Bond Registrar not less than 20 nor more than 60 days prior to the date fixed for
redemption by first-class mail, postage prepaid, to the Registered Owner at the address appearing
on the Bond Register on the Record Date. The requirements of the preceding sentence shall be
satisfied when notice has been mailed as so provided, whether or not it is actually received by an
Owner. In addition, the redemption notice shall be mailed or sent electronically within the same
period to the MSRB (if required under the Undertaking), to each Rating Agency, and to such
other persons and with such additional information as the Designated Representative shall
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determine, but these additional mailings shall not be a condition precedent to the redemption of
any Bond.
(e) Rescission of Optional Redemption Notice. In the case of an optional redemption,
the notice of redemption may state that the City retains the right to rescind the redemption notice
and the redemption by giving a notice of rescission to the affected Registered Owners at any time
on or prior to the date fixed for redemption. Any notice of optional redemption that is so
rescinded shall be of no effect, and each Bond for which a notice of redemption has been
rescinded shall remain outstanding.
(f) Effect of Redemption. Interest on each Bond called for redemption shall cease to
accrue on the date fixed for redemption, unless either the notice of optional redemption is
rescinded as set forth above, or money sufficient to effect such redemption is not on deposit in
the Bond Fund or in a trust account established to refund or defease the Bond.
(g) Purchase of Bonds. The City reserves the right to purchase any or all of the Bonds
offered to the City at any time at any price acceptable to the City plus accrued interest to the date
of purchase.
Section 10. Failure To Pay Bonds. If the principal of any Bond is not paid when the
Bond is properly presented at its maturity date or date fixed for redemption, the City shall be
obligated to pay interest on that Bond at the same rate provided in the Bond from and after its
maturity or date fixed for redemption until that Bond, both principal and interest, is paid in full
or until sufficient money for its payment in full is on deposit in the Bond Account, or in a trust
account established to refund or defease the Bond, and the Bond has been called for payment by
giving notice of that call to the Registered Owner.
Section 11. Pledge of Taxes. The Bonds constitute a general indebtedness of the City
and are payable from tax revenues of the City and such other money as is lawfully available and
pledged by the City for the payment of principal of and interest on the Bonds. For as long as any
of the Bonds are outstanding, the City irrevocably pledges that it shall, in the manner provided
by law within the constitutional and statutory limitations provided by law without the assent of
the voters, include in its annual property tax levy amounts sufficient, together with airport
revenue for the portion of the Bonds used to prepay the 2009 Bond, other money that is lawfully
available, to pay principal of and interest on the Bonds as the same become due. The full faith,
credit and resources of the City are pledged irrevocably for the prompt payment of the principal
of and interest on the Bonds and such pledge shall be enforceable in mandamus against the City.
Section 12. Tax Covenants; Designation of Bonds as “Qualified Tax-Exempt
Obligations.”
(a) Preservation of Tax Exemption for Interest on Bonds. The City covenants that it
will take all actions necessary to prevent interest on the Bonds from being included in gross
income for federal income tax purposes, and it will neither take any action nor make or permit
any use of proceeds of the Bonds or other funds of the City treated as proceeds of the Bonds that
will cause interest on the Bonds to be included in gross income for federal income tax purposes.
The City also covenants that it will, to the extent the arbitrage rebate requirements of Section 148
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of the Code are applicable to the Bonds, take all actions necessary to comply (or to be treated as
having complied) with those requirements in connection with the Bonds.
(b) Post-Issuance Compliance. The Designated Representative is authorized and
directed to adopt and implement the City’s written procedures to facilitate compliance by the
City with the covenants in this ordinance and the applicable requirements of the Code that must
be satisfied after the Issue Date to prevent interest on the Bonds from being included in gross
income for federal tax purposes.
(c) Designation of Bonds as “Qualified Tax-Exempt Obligations.” The Bonds may
be designated as “qualified tax-exempt obligations” for the purposes of Section 265(b)(3) of the
Code, if the following conditions are met:
(1) the Bonds do not constitute “private activity bonds” within the meaning of
Section 141 of the Code;
(2) the reasonably anticipated amount of tax-exempt obligations (other than
private activity bonds and other obligations not required to be included in
such calculation) that the City and any entity subordinate to the City
(including any entity that the City controls, that derives its authority to
issue tax-exempt obligations from the City, or that issues tax-exempt
obligations on behalf of the City) will issue during the calendar year in
which the Bonds are issued will not exceed $10,000,000; and
(3) the amount of tax-exempt obligations, including the Bonds, designated by
the City as “qualified tax-exempt obligations” for the purposes of
Section 265(b)(3) of the Code during the calendar year in which the Bonds
are issued does not exceed $10,000,000.
Section 13. Refunding or Defeasance of the Bonds. The City may issue refunding
bonds pursuant to State law or use money available from any other lawful source to carry out a
refunding or defeasance plan, which may include (a) paying when due the principal of and
interest on any or all of the Bonds (the “defeased Bonds”); (b) redeeming the defeased Bonds
prior to their maturity; and (c) paying the costs of the refunding or defeasance. If the City sets
aside in a special trust fund or escrow account irrevocably pledged to that redemption or
defeasance (the “trust account”), money and/or Government Obligations maturing at a time or
times and bearing interest in amounts sufficient to redeem, refund or defease the defeased Bonds
in accordance with their terms, then all right and interest of the Owners of the defeased Bonds in
the covenants of this ordinance and in the funds and accounts obligated to the payment of the
defeased Bonds shall cease and become void. Thereafter, the Owners of defeased Bonds shall
have the right to receive payment of the principal of and interest on the defeased Bonds solely
from the trust account and the defeased Bonds shall be deemed no longer outstanding. In that
event, the City may apply money remaining in any fund or account (other than the trust account)
established for the payment or redemption of the defeased Bonds to any lawful purpose.
Unless otherwise specified by the City in a refunding or defeasance plan, notice of
refunding or defeasance shall be give, and selection of Bonds for any partial refunding or
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defeasance shall be conducted, in the manner prescribed in this ordinance for the redemption of
Bonds.
Section 14. Refunding of the Refunded Bonds.
(a) Appointment of Refunding Trustee. The Designated Representative is authorized
to appoint a Refunding Trustee in connection with the Bonds.
(b) Use of Bond Proceeds; Acquisition of Acquired Obligations. A sufficient amount
of the proceeds of the sale of the Bonds shall be deposited immediately upon the receipt thereof
with the Refunding Trustee and used to discharge the obligations of the City relating to the
Refunded Bonds under Ordinance No. 1321 by providing for the payment of the amounts
required to be paid by the Refunding Plan. To the extent practicable, such obligations shall be
discharged fully by the Refunding Trustee’s simultaneous purchase of the Acquired Obligations,
bearing such interest and maturing as to principal and interest in such amounts and at such times
so as to provide, together with a beginning cash balance, if necessary, for the payment of the
amount required to be paid by the Refunding Plan. The Acquired Obligations, if acquired, will be
listed and more particularly described in an exhibit to be attached to the Refunding Trust
Agreement between the City and the Refunding Trustee, but are subject to substitution as set
forth below. Any Bond proceeds or other money deposited with the Refunding Trustee not
needed to purchase the Acquired Obligations and provide a beginning cash balance, if any, and
pay the costs of issuance of the Bonds shall be returned to the City at the time of delivery of the
Bonds to the initial purchaser thereof and deposited in the Bond Account to pay interest on the
Bonds.
If payment of the costs of issuance of the Bonds is not included in the Refunding Plan,
the Bond proceeds that are not deposited with the Refunding Trustee will be deposited with the
City to be used to pay the costs of issuance of the Bonds.
The remaining proceeds of the sale of the Bonds shall be used to prepay the 2009 Bond
on or about the Issue Date of the Bonds.
(c) Substitution of Acquired Obligations. Prior to the purchase of any Acquired
Obligations by the Refunding Trustee, the City reserves the right to substitute other direct,
noncallable obligations of the United States of America (“Substitute Obligations”) for any of the
Acquired Obligations and to use any savings created thereby for any lawful City purpose if,
(a) in the opinion of the City’s bond counsel, the interest on the Bonds and the Refunded Bonds
will remain excluded from gross income for federal income tax purposes under Sections 103,
148, and 149(d) of the Code, and (b) such substitution shall not impair the timely payment of the
amounts required to be paid by the Refunding Plan, as verified by a nationally recognized
independent certified public accounting firm.
After the purchase of the Acquired Obligations by the Refunding Trustee, the City
reserves the right to substitute therefor cash or Substitute Obligations subject to the conditions
that such money or securities held by the Refunding Trustee shall be sufficient to carry out the
Refunding Plan, that such substitution will not cause the Bonds or the Refunded Bonds to be
arbitrage bonds within the meaning of Section 148 of the Code and regulations thereunder in
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effect on the date of such substitution and applicable to obligations issued on the issue dates of
the Bonds and the Refunded Bonds, as applicable, and that the City obtain, at its expense: (1) a
verification by a nationally recognized independent certified public accounting firm acceptable
to the Refunding Trustee confirming that the payments of principal of and interest on the
substitute securities, if paid when due, and any other money held by the Refunding Trustee will
be sufficient to carry out the Refunding Plan; and (2) an opinion from a nationally recognized
bond counsel to the City, to the effect that the disposition and substitution or purchase of such
securities, under the statutes, rules, and regulations then in force and applicable to the Bonds,
will not cause the interest on the Bonds or the Refunded Bonds to be included in gross income
for federal income tax purposes and that such disposition and substitution or purchase is in
compliance with the statutes and regulations applicable to the Bonds. Any surplus money
resulting from the sale, transfer, other disposition, or redemption of the Acquired Obligations and
the substitutions therefor shall be released from the trust estate and transferred to the City to be
used for any lawful City purpose.
(d) Administration of Refunding Plan. The Refunding Trustee is authorized and
directed to purchase the Acquired Obligations (or substitute obligations), if so directed by the
Designated Representative, and to make the payments required to be made by the Refunding
Plan from the Acquired Obligations (or substitute obligations) and money deposited with the
Refunding Trustee pursuant to this ordinance. All Acquired Obligations (or substitute
obligations) and the money deposited with the Refunding Trustee and any income therefrom
shall be held irrevocably, invested and applied in accordance with the provisions of Ordinance
No. 1321, this ordinance, chapter 39.53 RCW and other applicable statutes of the State of
Washington and the Refunding Trust Agreement. All necessary and proper fees, compensation,
and expenses of the Refunding Trustee for the Bonds and all other costs incidental to the setting
up of the escrow to accomplish the refunding of the Refunded Bonds and costs related to the
issuance and delivery of the Bonds, including bond printing, Bond Counsel’s fees, and other
related expenses, shall be paid out of the proceeds of the Bonds.
(e) Authorization for Refunding Trust Agreement. To carry out the Refunding Plan
provided for by this ordinance, the Designated Representative is authorized and directed to
execute and deliver to the Refunding Trustee a Refunding Trust Agreement setting forth the
duties, obligations and responsibilities of the Refunding Trustee in connection with the payment,
redemption, and retirement of the Refunded Bonds as provided herein and stating that the
provisions for payment of the fees, compensation, and expenses of such Refunding Trustee set
forth therein are satisfactory to it. Prior to executing the Refunding Trust Agreement, the
Designated Representative of the City is authorized to make such changes therein that do not
change the substance and purpose thereof or that assure that the escrow provided therein and the
Bonds are in compliance with the requirements of federal law governing the exclusion of interest
on the Bonds from gross income for federal income tax purposes.
Section 15. Call for Redemption of the Refunded Bonds. The City calls for
redemption on a date that is approximately 30 days from the Issue Date, all of the Refunded
Bonds at par plus accrued interest. Such call for redemption shall be irrevocable after the
delivery of the Bonds to the initial purchaser thereof.
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The proper City officials are authorized and directed to give or cause to be given such
notices as required, at the times and in the manner required, pursuant to Ordinance No. 1321 in
order to effect the redemption prior to their maturity of the Refunded Bonds.
Section 16. Findings with Respect to Refunding. The City Council authorizes the
Designated Representative to issue the Bonds if it will achieve debt service savings to the City
and is in the best interest of the City and its taxpayers. In making such finding and determination,
the Designated Representative will give consideration to the fixed maturities of the Bonds and
the Refunded Bonds, the costs of issuance of the Bonds and the known earned income from the
investment of the proceeds of the issuance and sale of the Bonds and other money of the City
used in the Refunding Plan, if any, pending payment and redemption of the Refunded Bonds.
The Designated Representative may also purchase Acquired Obligations to be deposited
with the Refunding Trustee, together with the income therefrom, and with any necessary
beginning cash balance, which will be sufficient to redeem the Refunded Bonds and will
discharge and satisfy the obligations of the City under Ordinance No. 1321 with respect to the
Refunded Bonds, and the pledges, charges, trusts, covenants, and agreements of the City therein
made or provided for as to the Refunded Bonds, and that the Refunded Bonds shall no longer be
deemed to be outstanding under such ordinance immediately upon the deposit of such money
with the Refunding Trustee.
Section 17. Sale and Delivery of the Bonds.
(a) Manner of Sale of Bonds; Delivery of Bonds. The Designated Representative is
authorized to sell each Series of the Bonds by negotiated sale based on the assessment of the
Designated Representative of market conditions, in consultation with appropriate City officials
and staff, Bond Counsel and other advisors. In determining and accepting the Final Terms, the
Designated Representative shall take into account those factors that, in the judgment of the
Designated Representative, may be expected to result in the lowest true interest cost to the City.
(b) Preparation, Execution and Delivery of the Bonds. The Bonds will be prepared at
City expense and will be delivered to the Purchaser in accordance with the Bond Purchase
Contract, together with the approving legal opinion of Bond Counsel regarding the Bonds.
Section 18. Official Statement.
(a) Preliminary Official Statement Deemed Final. The Designated Representative
shall review and, if acceptable to him, approve the form of the preliminary official statement
prepared in connection with each sale of a Series of the Bonds to the public. For the sole purpose
of the Purchaser’s compliance with paragraph (b)(1) of Rule 15c2-12, the Designated
Representative is authorized to deem that preliminary official statement final as of its date,
except for the omission of information permitted to be omitted by Rule 15c2-12. The City
approves the distribution to potential purchasers of the Bonds of a preliminary official statement
that has been approved by the Designated Representative and deemed final in accordance with
this subsection.
(b) Approval of Final Official Statement. The City approves the preparation of a final
official statement for each Series of the Bonds to be sold to the public in the form of the
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preliminary official statement that has been approved and deemed final in accordance with
subsection (a), with such modifications and amendments as the Designated Representative deems
necessary or desirable, and further authorizes Designated Representative to execute and deliver
such final official statement to the Purchaser. The City authorizes and approves the distribution
by the Purchaser of the final official statement to purchasers and potential purchasers of the
Bonds.
(c) Undertaking to Provide Continuing Disclosure.
Section 19. Continuing Disclosure. To meet the requirements of paragraph (b)(5) of
Rule 15c2-12, as applicable to a participating underwriter for the Bonds, the City makes the
following written Undertaking for the benefit of holders of the Bonds:
(a) Undertaking to Provide Annual Financial Information and Notice of Listed
Events. The City undertakes to provide or cause to be provided, either directly or through a
designated agent, to the MSRB, in an electronic format as prescribed by the MSRB,
accompanied by identifying information as prescribed by the MSRB:
(1) Annual financial information and operating data of the type included in
the final official statement for the Bonds and described in paragraph (b)
(“annual financial information”);
(2) Timely notice (not in excess of 10 business days after the occurrence of
the event) of the occurrence of any of the following events with respect to
the Bonds: (1) principal and interest payment delinquencies; (2) non-
payment related defaults, if material; (3) unscheduled draws on debt
service reserves reflecting financial difficulties; (4) unscheduled draws on
credit enhancements reflecting financial difficulties; (5) substitution of
credit or liquidity providers, or their failure to perform; (6) adverse tax
opinions, the issuance by the Internal Revenue Service of proposed or
final determinations of taxability, Notice of Proposed Issue (IRS Form
5701 – TEB) or other material notices or determinations with respect to
the tax status of the Bonds; (7) modifications to rights of holders of the
Bonds, if material; (8) bond calls (other than scheduled mandatory
redemptions of Term Bonds), if material, and tender offers;
(9) defeasances; (10) release, substitution, or sale of property securing
repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy,
insolvency, receivership or similar event of the City, as such “Bankruptcy
Events” are defined in Rule 15c2-12; (13) the consummation of a merger,
consolidation, or acquisition involving the City or the sale of all or
substantially all of the assets of the City other than in the ordinary course
of business, the entry into a definitive agreement to undertake such an
action or the termination of a definitive agreement relating to any such
actions, other than pursuant to its terms, if material; and (14) appointment
of a successor or additional trustee or the change of name of a trustee, if
material.
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51293098.5
(3) Timely notice of a failure by the City to provide required annual financial
information on or before the date specified in paragraph (b).
(b) Type of Annual Financial Information Undertaken to be Provided. The annual
financial information that the City undertakes to provide in paragraph (a):
(4) Shall consist of (1) annual financial statements prepared (except as noted
in the financial statements) in accordance with applicable generally
accepted accounting principles applicable to local governmental units of
the State such as the City, as such principles may be changed from time to
time, which statements may be unaudited, provided, that if and when
audited financial statements are prepared and available they will be
provided; (2) principal amount of general obligation bonds outstanding at
the end of the applicable fiscal year; (3) assessed valuation for that fiscal
year; and (4) property tax levy amounts and rates for that fiscal year;
(5) Shall be provided not later than the last day of the ninth month after the
end of each fiscal year of the City (currently, a fiscal year ending
December 31), as such fiscal year may be changed as required or
permitted by State law, commencing with the City’s fiscal year ending
December 31, 2014; and
(6) May be provided in a single or multiple documents, and may be
incorporated by specific reference to documents available to the public on
the Internet website of the MSRB or filed with the SEC.
(c) Amendment of Undertaking. The Undertaking is subject to amendment after the
primary offering of the Bonds without the consent of any holder of any Bond, or of any broker,
dealer, municipal securities dealer, participating underwriter, Rating Agency or the MSRB,
under the circumstances and in the manner permitted by Rule 15c2-12. The City will give notice
to the MSRB of the substance (or provide a copy) of any amendment to the Undertaking and a
brief statement of the reasons for the amendment. If the amendment changes the type of annual
financial information to be provided, the annual financial information containing the amended
financial information will include a narrative explanation of the effect of that change on the type
of information to be provided.
(d) Beneficiaries. The Undertaking evidenced by this section shall inure to the benefit
of the City and the Beneficial Owner holder of a Bond, and shall not inure to the benefit of or
create any rights in any other person.
(e) Termination of Undertaking. The City’s obligations under the Undertaking shall
terminate upon the legal defeasance of all of the Bonds. In addition, the City’s obligations under
the Undertaking shall terminate if the provisions of Rule 15c2-12 that require the City to comply
with the Undertaking become legally inapplicable in respect of the Bonds for any reason, as
confirmed by an opinion of Bond Counsel delivered to the City, and the City provides timely
notice of such termination to the MSRB.
-17-
51293098.5
(f) Remedy for Failure to Comply with Undertaking. As soon as practicable after the
City learns of any failure to comply with the Undertaking, the City will proceed with due
diligence to cause such noncompliance to be corrected. No failure by the City or other obligated
person to comply with the Undertaking shall constitute a default in respect of the Bonds. The
sole remedy of any holder of a Bond shall be to take action to compel the City or other obligated
person to comply with the Undertaking, including seeking an order of specific performance from
an appropriate court.
(g) Designation of Official Responsible to Administer Undertaking. The Designated
Representative of the City (or such other officer of the City who may in the future perform the
duties of that office) or his or her designee is authorized and directed in his or her discretion to
take such further actions as may be necessary, appropriate or convenient to carry out the
Undertaking and in accordance with Rule 15c2-12 including the following actions:
(1) Preparing and filing the annual financial information undertaken to be
provided;
(2) Determining whether any event specified in paragraph (a) has occurred,
assessing its materiality, where necessary, with respect to the Bonds, and
preparing and disseminating any required notice of its occurrence;
(3) Determining whether any person other than the City is an “obligated
person” within the meaning of Rule 15c2-12 with respect to the Bonds,
and obtaining from such person an undertaking to provide any annual
financial information and notice of listed events for that person required
under Rule 15c2-12;
(4) Selecting, engaging and compensating designated agents and consultants,
including financial advisors and legal counsel, to assist and advise the City
in carrying out the Undertaking; and
(5) Effecting any necessary amendment of the Undertaking.
Section 20. Supplemental and Amendatory Ordinances. The City may supplement or
amend this ordinance for any one or more of the following purposes without the consent of any
Owners of the Bonds:
(a) To add covenants and agreements that do not materially adversely affect the
interests of Owners, or to surrender any right or power reserved to or conferred upon the City.
(b) To cure any ambiguities, or to cure, correct or supplement any defective provision
contained in this ordinance in a manner that does not materially adversely affect the interest of
the Beneficial Owners of the Bonds.
Section 21. General Authorization and Ratification. The Mayor, City Clerk,
Designated Representative and other appropriate officers of the City are severally authorized to
take such actions and to execute such documents as in their judgment may be necessary or
desirable to carry out the transactions contemplated in connection with this ordinance, and to do
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51293098.5
everything necessary for the prompt delivery of the Bonds to the Purchaser and for the proper
application, use and investment of the proceeds of the Bonds. All actions taken prior to the
effective date of this ordinance in furtherance of the purposes described in this ordinance and not
inconsistent with the terms of this ordinance are ratified and confirmed in all respects.
Section 22. Severability. The provisions of this ordinance are declared to be separate
and severable. If a court of competent jurisdiction, all appeals having been exhausted or all
appeal periods having run, finds any provision of this ordinance to be invalid or unenforceable as
to any person or circumstance, such offending provision shall, if feasible, be deemed to be
modified to be within the limits of enforceability or validity. However, if the offending provision
cannot be so modified, it shall be null and void with respect to the particular person or
circumstance, and all other provisions of this ordinance in all other respects, and the offending
provision with respect to all other persons and all other circumstances, shall remain valid and
enforceable.
Section 23. Effective Date of Ordinance. This ordinance shall take effect and be in
force from and after its passage and five days following its publication as required by law.
PASSED by the City Council and APPROVED by the Mayor of the City of Arlington,
Washington, at an open public meeting thereof, this 7th day of July, 2014.
Mayor
ATTEST:
City Clerk
APPROVED AS TO FORM:
Bond Counsel
51293098.5
CERTIFICATION
I, the undersigned, City Clerk of the City of Arlington, Washington (the “City”), hereby
certify as follows:
1. The attached copy of Ordinance No. ____ (the “Ordinance”) is a full, true and correct
copy of an ordinance duly passed at a regular meeting of the City Council of the City held at the
regular meeting place thereof on July 7, 2014, as that ordinance appears on the minute book of
the City.
2. The Ordinance will be in full force and effect five days after publication in the City’s
official newspaper, which publication date was July __, 2014.
3. A quorum of the members of the City Council was present throughout the meeting
and a majority of the members voted in the proper manner for the passage of the Ordinance.
Dated: July __, 2014.
CITY OF ARLINGTON, WASHINGTON
_____________________________________
City Clerk
City of Arlington
Council Agenda Bill
Item:
WS #3
Attachment
B
COUNCIL MEETING DATE:
June 23, 2014
SUBJECT:
May 2014 Financial Report
ATTACHMENTS:
May 2014 Financial Reports –
General Fund Operating Statement for May
All Other Funds Operating Statements for May
DEPARTMENT OF ORIGIN
Finance; Contact Jim Chase – 360-403-3422
EXPENDITURES REQUESTED: -0-
BUDGET CATEGORY: N/A
LEGAL REVIEW:
DESCRIPTION:
Staff will answer any questions regarding the attached Financial Reports.
HISTORY:
ALTERNATIVES
RECOMMENDED MOTION:
Workshop, discussion only.
May 2014 Financial Report - Jim Chase, Finance Director
General Fund –
Building permits revenues continue to be slow. We have collected just 9.25% of our budget in that
category. The percentage collected should be at 42.67% through the end of May.
Leasehold Excise Taxes show just 17.73% of the budget collected. June is historically a large
collection month, coinciding with how many of the airport leases are structured. The General Fund
receives Leasehold Excise Taxes collected on Airport property rent. The City owns the property but
does not pay property taxes. When the City leases the property to individual (non-governmental)
tenants, we are required to collect leasehold excises taxes in lieu of property taxes. The rate is
12.84% of the lease amount.
Intergovernmental Revenues show just 21.97% of the budget collected. One of the larger pieces of
Intergovernmental Revenue is the PUD Privilege Tax. This tax is imposed on Public Utility Districts
that operate electric generating facilities for the privilege of engaging in the business of generating
electricity within the state. The City will receive approximately $110,000 within the next few
months for this tax.
We will continue to closely monitor these revenues and will review any proposed expenditure
adjustments with Allen and the Mayor as necessary to address any shortfalls
On the expenditure side, legal fees have already exceeded the budgeted amount for the year.
Several cases had not been completed from 2013 which carried over to this year. These cases
included the Holden McDaniel case, which now appears to be headed to trial in June 2015, and the
Dwayne Lane permit appeal. We have also experienced additional labor negotiation related costs,
with all three contracts being under negotiation until recently. We will be returning to the table in
the fall on two of the labor contracts (ACE and APOA), which will add additional costs. In addition,
the Administration Department will have exceeded their budget at the end of the year due to the
Matrix Study. Council authorized the spending up to $35,000 on the Matrix study in January. This
will be included in the budget amendments that are completed annually.
Emergency Medical Services Fund –
In the last report, and at the workshop meeting on May 27th, transport fee revenues were discussed.
Council asked information on the mileage fee reimbursement rate. Arlington EMS currently charges
$16.74 per mile, while Medicare only reimburses at $7.16 per mile. The average mileage rate of the
114 clients our billing company provides services for is $14.60. Twenty-eight of Systems Design
clients charge more than our current rate.
Water/Sewer and Storm Water Funds –
City staff processed 5,196 Water bills, 4,586 Sewer bills and 4,843 Storm water bills in May.
Payment is due 20 days from the billing date. Late fees (5%) are added to unpaid balances
immediately prior to processing the next monthly bills. A total of $11,895 in Late Fees was billed in
May. We had 69 customers on the disconnect/turn-off list and charged a reconnect fee. Only 338
accounts have elected to go paperless and not receive a bill in the mail. All of those customers use
Xpress bill pay, a third party payment processing company. These customers receive an e-mail from
Xpress letting them know another billing is available to pay. We will look at doing another push on
the Xpress Bill pay and going paperless in the fall Arlington Update and on social media.
Following this page are the operating statements for each fund.
General Fund Revenue Charts
Property Taxes
2009 2010 2011 2012 2013 2014
Jan 9,953$ 10,730$ 43,863$ 13,735$ 17,528$ 13,051$ Jan
Feb 6,463 4,965 6,939 8,731 11,473 20,864 Feb
March 47,312 50,930 36,300 69,232 49,570 26,373 March
April 89,039 180,793 121,892 213,717 203,950 338,280 April
May 1,006,203 874,964 1,021,034 935,094 988,890 848,191 May
June (15,120) 56,580 24,760 21,831 26,875 - June
July 14,530 12,989 8,241 23,700 16,701 - July
Aug 7,679 (68,052) 9,547 4,589 16,062 - August
Sept 44,029 18,000 37,485 40,360 12,664 - Sept
Oct 79,762 94,000 318,247 157,685 182,363 - October
Nov 894,923 878,989 743,089 886,365 913,874 - Nov
Dec 8,876 50,453 17,201 35,571 21,448 - Dec
2,193,649 2,165,341 2,388,598 2,410,610 2,461,398 1,246,759
2014 Budget 2,500,000
49.87%
Retail Sales Taxes - 1%
2009 2010 2011 2012 2013 2014
Jan 221,227$ 226,180$ 231,247$ 248,861$ 250,760$ 269,131$ Jan
Feb 280,181 271,533 327,957 285,164 307,572 315,250 Feb
March 224,708 200,501 198,195 219,727 204,765 242,354 March
April 206,233 240,071 236,714 234,622 237,322 244,563 April
May 240,634 258,531 276,830 270,011 286,357 279,418 May
June 236,531 252,005 244,488 242,401 291,441 - June
July 251,301 252,678 250,540 265,711 279,283 - July
August 302,202 284,617 277,164 265,845 299,857 - August
Sept 287,843 256,168 250,027 251,684 284,347 - Sept
October 241,080 250,811 247,503 270,521 289,400 - October
Nov 276,283 270,709 250,547 280,060 283,972 - Nov
Dec 237,530 211,020 242,434 252,952 264,547 - Dec
3,005,753 2,974,824 3,033,646 3,087,559 3,279,623 1,350,717
2014 Budget 3,200,000
2007 Total was 4,012,997 42.21%
2008 Total was 3,496,118
Snoh. Co. Criminal Justice Sales Tax - 0.1%
2009 2010 2011 2012 2013 2014
Jan 17,595$ 17,577$ 18,911$ 18,796$ 20,472$ 22,137$ Jan
Feb 23,312 23,396 23,935 24,853 26,163 27,956 Feb
March 16,671 15,746 16,203 16,396 18,838 20,165 March
April 16,111 16,622 15,930 17,518 18,252 19,843 April
May 18,775 18,464 18,149 19,753 21,828 23,201 May
June 16,809 16,923 19,007 18,864 19,858 - June
July 17,565 17,595 18,988 19,693 21,119 - July
Aug 20,156 20,382 20,627 20,735 22,504 - August
Sept 18,447 19,363 19,160 20,877 22,602 - Sept
Oct 18,646 18,608 19,420 21,149 22,886 - October
Nov 19,417 20,368 20,146 22,012 23,632 - Nov
Dec 17,356 18,100 18,477 20,247 21,650 - Dec
220,861 223,144 228,953 240,894 259,805 113,302
2014 Budget 260,000
43.58%
$1,050,000
$1,100,000
$1,150,000
$1,200,000
$1,250,000
$1,300,000
$1,350,000
$1,400,000
2009 2010 2011 2012 2013 2014
Retail Sales Tax - 1%
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
2009 2010 2011 2012 2013 2014
Crim. Justice Sales Tax
$1,000,000
$1,050,000
$1,100,000
$1,150,000
$1,200,000
$1,250,000
$1,300,000
2009 2010 2011 2012 2013 2014
Property Taxes
2
Streamlined Sales Tax Mitigation Payments
2009 2010 2011 2012 2013 2014
Jan -$ -$ -$ -$ -$ -$ Jan
Feb - - - - - - Feb
March 32,850 29,743 25,024 25,377 23,888 24,876 March
April - - - - - - April
May - - - - - - May
June 14,024 29,860 25,161 21,824 23,603 - June
July - - - - - - July
Aug - - - - - - August
Sept 23,290 29,672 25,321 24,388 24,848 - Sept
Oct - - - - - - October
Nov - - - - - - Nov
Dec 29,911 25,000 25,266 24,403 24,971 - Dec
100,074 114,275 100,771 95,992 97,310 24,876
2014 Budget 95,000
26.19%
Utility Tax - Water
2009 2010 2011 2012 2013 2014
Jan 12,919$ 13,013$ 15,779$ 16,437$ 15,712$ 17,366$ Jan
Feb 10,737 13,288 15,103 16,565 15,734 14,380 Feb
March 14,718 15,760 16,090 14,824 14,469 15,900 March
April 12,023 15,815 16,578 15,535 16,293 14,732 April
May 13,328 18,173 15,477 15,627 15,891 14,671 May
June 12,398 19,322 15,690 15,025 15,062 - June
July 13,207 18,713 15,706 16,427 16,341 - July
Aug 15,319 19,145 16,400 16,612 17,941 - August
Sept 16,481 18,250 18,282 18,174 20,613 - Sept
Oct 16,890 15,748 19,126 19,380 18,538 - October
Nov 18,323 16,826 15,220 16,455 15,745 - Nov
Dec 16,399 16,765 14,820 16,317 16,274 - Dec
172,744 200,818 194,271 197,378 198,613 77,049
2014 Budget 209,100 Tax is currently at 5% of gross revenues.
36.85%
Utility Tax - Sewer
2009 2010 2011 2012 2013 2014
Jan 15,610$ 15,073$ 18,513$ 20,707$ 22,301$ 24,441$ Jan
Feb 10,737 15,058 17,132 20,725 21,327 20,813 Feb
March 17,565 17,034 20,022 21,603 22,450 23,951 March
April 13,377 18,369 18,484 19,030 23,445 21,567 April
May 16,063 19,702 20,239 21,424 23,664 23,108 May
June 13,970 23,506 18,908 21,994 21,804 - June
July 16,063 18,734 19,883 21,987 24,262 - July
Aug 15,480 17,617 19,567 22,954 21,466 - August
Sept 16,445 18,174 19,746 21,957 24,269 - Sept
Oct 14,719 16,143 21,101 22,633 23,241 - October
Nov 16,854 18,069 18,874 22,016 22,321 - Nov
Dec 15,368 18,097 20,577 22,210 24,229 - Dec
182,252 215,576 233,046 259,240 274,779 113,880
2014 Budget 275,400 Tax is currently at 5% of gross revenues.
41.35%
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
2009 2010 2011 2012 2013 2014
Streamlined Sales Tax
$0
$20,000
$40,000
$60,000
$80,000
$100,000
2009 2010 2011 2012 2013 2014
Utility Tax - Water
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
2009 2010 2011 2012 2013 2014
Utility Tax - Sewer
3
Utility Tax - Natural Gas
2009 2010 2011 2012 2013 2014
Jan 76,095$ -$ 36,179$ 35,573$ 26,378$ 37,322$ Jan
Feb - 78,413 41,081 33,778 32,351 41,502 Feb
March - - 30,449 29,154 30,760 39,463 March
April 154,007 94,519 39,426 32,759 27,275 31,323 April
May - - 25,634 24,199 20,087 24,769 May
June - - 23,779 15,727 16,081 - June
July 67,871 - 13,874 11,422 9,893 - July
Aug - 62,496 9,629 9,355 7,694 - August
Sept - - 8,946 7,886 6,282 - Sept
Oct 17,739 31,198 8,717 7,252 6,215 - October
Nov 8,348 12,042 12,464 11,960 12,981 - Nov
Dec - 21,772 22,809 18,929 18,820 - Dec
324,061 300,440 272,987 237,994 214,817 174,379
2014 Budget 260,000 Tax is currently at 6% of gross revenues.
67.07%To raise this tax over 6%, a public vote is needed.
Utility Tax - Cable TV
2009 2010 2011 2012 2013 2014
Jan -$ 57,070$ 19,754 20,349$ 28,936$ -$ Jan
Feb 54,091 - 20,393 - 28,669 60,794 Feb
March - - 20,296 40,313 28,387 29,935 March
April - - 19,945 20,432 - 30,620 April
May 53,136 56,981 20,130 20,416 58,132 30,943 May
June - - 19,714 20,436 28,908 - June
July 53,857 59,413 19,761 49,691 29,195 - July
Aug - - 20,146 - - - August
Sept - - 19,641 58,417 58,179 - Sept
Oct 55,308 59,514 19,687 - 31,533 - October
Nov - 20,979 20,862 58,231 29,938 - Nov
Dec - 20,345 20,360 27,961 30,654 - Dec
216,392 274,302 240,689 316,246 352,531 152,292
2014 Budget 345,000 Tax is currently at 8% of gross revenues.
44.14%
Utility Tax - Telephone
2009 2010 2011 2012 2013 2014
Jan 88,965$ 86,694$ 49,514$ 48,104$ 48,733$ 41,935$ Jan
Feb 37,525 30,381 47,162 46,413 46,420 49,795 Feb
March 35,359 39,877 47,001 45,922 44,971 43,391 March
April 86,993 88,806 49,593 47,991 49,639 45,166 April
May 36,626 38,157 48,868 44,896 43,514 44,431 May
June 36,283 39,605 47,980 45,113 46,181 - June
July 85,034 84,164 49,151 47,858 44,795 - July
Aug 38,005 29,395 47,501 46,408 43,252 - August
Sept 36,847 30,590 48,418 47,018 48,896 - Sept
Oct 84,934 91,407 48,145 46,568 45,845 - October
Nov 37,066 49,004 46,999 47,039 44,276 - Nov
Dec 35,740 51,966 47,294 46,622 44,780 - Dec
639,376 660,046 577,626 559,952 551,302 224,718
2014 Budget 560,000 Tax currently at 6% of gross revenues.
40.13%To raise this tax over 6%, a public vote is needed.
$0
$50,000
$100,000
$150,000
$200,000
$250,000
2009 2010 2011 2012 2013 2014
Utility Tax - Nat. Gas
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
2009 2010 2011 2012 2013 2014
Utility Tax - Cable TV
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
2009 2010 2011 2012 2013 2014
Utility Tax - Telephone
4
Utility Tax - Electricity
2009 2010 2011 2012 2013 2014
Jan 85,254$ 89,193$ 85,675$ 90,775$ 103,172$ 114,147$ Jan
Feb 45,564 47,266 45,924 52,732 67,082 71,787 Feb
March 88,361 84,004 85,151 91,009 112,114 119,425 March
April 46,327 49,177 52,944 54,791 62,768 67,965 April
May 74,454 73,938 78,401 95,590 94,693 95,928 May
June 35,509 38,623 42,306 49,079 49,929 - June
July 63,927 62,864 66,531 80,553 77,961 - July
Aug 32,027 35,312 33,892 45,026 48,437 - August
Sept 61,434 61,005 66,854 70,885 82,008 - Sept
Oct 33,812 34,659 30,989 49,563 42,735 - October
Nov 68,237 68,018 70,805 87,318 92,901 - Nov
Dec 33,372 44,113 39,772 45,967 45,579 - Dec
668,279 688,172 699,244 813,288 879,379 469,252
2014 Budget 890,000 Tax is currently at 6% of gross revenues.
52.72%To raise this tax over 6%, a public vote is needed.
Utility Tax - Solid Waste (Garbage)
2009 2010 2011 2012 2013 2014
Jan 8,266$ 9,204$ 10,912$ 10,959$ 20,047$ 20,913$ Jan
Feb 8,165 8,907 10,495 10,516 - 20,757 Feb
March 8,696 9,912 10,794 11,108 39,805 21,220 March
April 9,914 9,901 10,148 10,678 19,544 20,799 April
May 10,282 10,132 10,848 11,279 20,758 21,746 May
June 9,786 10,013 10,104 10,929 20,056 - June
July 10,497 10,452 10,781 11,397 20,321 - July
Aug 10,088 9,906 9,984 18,774 20,500 - August
Sept 10,936 10,477 10,419 46,317 20,762 - Sept
Oct 9,556 9,959 10,586 19,156 20,655 - October
Nov 9,912 10,754 11,150 21,807 21,346 - Nov
Dec 9,929 10,178 10,479 19,927 22,002 - Dec
116,028 119,795 126,700 202,847 245,796 105,435
2014 Budget 240,000 Tax is currently at 8% of gross revenues.
43.93%
Gambling Taxes
2009 2010 2011 2012 2013 2014
Jan 1,665$ 2,141$ 9,892$ 10,232$ 11,104$ 4,485$ Jan
Feb 38,202 26,034 4,270 9,479 3,156 3,928 Feb
March - - 12,809 9,781 3,109 5,167 March
April 4,988 5,619 7,503 12,224 2,930 4,776 April
May 43,661 22,153 5,894 10,528 4,974 4,983 May
June - - 8,238 9,011 3,543 - June
July 2,020 2,081 8,521 7,626 5,504 - July
Aug 49,602 26,093 7,435 10,036 2,177 - August
Sept - 1,580 6,790 8,374 3,694 - Sept
Oct 1,787 22,631 7,404 8,389 5,570 - October
Nov 39,154 9,846 7,689 10,799 4,335 - Nov
Dec - 9,517 8,479 9,354 4,837 - Dec
181,077 127,695 94,924 115,833 54,933 23,339
2014 Budget 40,000 Tax on Pull tabs is 5% of gross receipts.
58.35%Tax on card games is 9% in 2014 and will increase 1%
per year and max at 12%.
$0
$100,000
$200,000
$300,000
$400,000
$500,000
2009 2010 2011 2012 2013 2014
Utility Tax - Electricity
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
2009 2010 2011 2012 2013 2014
Utility Tax - Garbage
$0
$20,000
$40,000
$60,000
$80,000
$100,000
2009 2010 2011 2012 2013 2014
Gambling Taxes
5
Cable TV Franchise Fees
2009 2010 2011 2012 2013 2014
Jan 704$ 45,192$ 48,268$ 48,935$ 18,224$ -$ Jan
Feb - - - - 16,488 38,906 Feb
March - - - - 16,324 17,192 March
April 1,205 411 47,913 48,344 1,490 17,624 April
May - 44,678 - - 33,481 22,092 May
June 11,900 - - 33,896 16,642 - June
July 14,364 48,158 47,913 23,436 18,361 - July
Aug - - - 16,402 - - August
Sept - - - 16,052 33,441 - Sept
Oct 44,951 47,041 47,707 3,771 19,807 - October
Nov - - - 33,622 17,243 - Nov
Dec - - - 14,235 17,644 - Dec
73,124 185,480 191,801 238,693 209,145 95,814
2014 Budget 205,000 Tax is 5% of gross revenues.
46.74%
Building Permits
2009 2010 2011 2012 2013 2014
Jan 21,462$ 82,320$ 9,672$ 52,758$ 6,763$ 923$ Jan
Feb 21,621 1,380 5,597 45,748 6,304 10,535 Feb
March 34,857 12,071 52,830 50,294 13,513 6,366 March
April 9,617 5,181 8,303 10,982 17,948 6,246 April
May 3,742 1,206 5,445 11,055 79,689 3,672 May
June 7,216 4,784 4,461 19,105 12,034 - June
July 12,029 7,256 15,101 39,249 4,929 - July
Aug 9,805 6,351 14,043 38,617 4,944 - August
Sept 7,988 2,072 16,702 36,642 21,237 - Sept
Oct 3,603 10,989 50,782 23,863 16,112 - October
Nov 6,569 10,118 56,511 6,297 3,945 - Nov
Dec 9,594 8,687 15,540 8,400 5,651 - Dec
148,103 152,415 254,987 343,010 193,069 27,742
2014 Budget 300,000
2007 Total was 346,953 9.25%
2008 Total was 307,424
Liquor Excise Taxes
2009 2010 2011 2012 2013 2014
Jan 20,240$ 21,047$ 20,972$ 21,133$ -$ 12,113$ Jan
Feb - - - - - - Feb
March - - - - - - March
April 21,914 22,553 22,886 23,235 - 5,600 April
May - - - - - - May
June - - - - - - June
July 19,542 20,196 21,077 21,738 - - July
Aug - - - - - - August
Sept - - - - - - Sept
Oct 21,721 21,541 22,244 - 12,050 - October
Nov - - - - - - Nov
Dec - - - - - - Dec
83,417 85,337 87,179 66,106 12,050 17,713
2014 Budget 40,000
44.28%
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
2009 2010 2011 2012 2013 2014
Building Permits
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
2009 2010 2011 2012 2013 2014
Cable Franchise Fees
$0
$10,000
$20,000
$30,000
$40,000
$50,000
2009 2010 2011 2012 2013 2014
Liquor Excise Tax
6
Liquor Profits
2009 2010 2011 2012 2013 2014
Jan -$ -$ -$ -$ -$ -$ Jan
Feb - - - - - - Feb
March 28,271 39,961 33,151 23,858 40,428 40,633 March
April - - - - - - April
May - - - - - - May
June 29,750 31,625 37,009 73,882 40,416 - June
July - - - - - - July
Aug - - - - - - August
Sept 34,486 33,192 25,535 40,674 40,427 - Sept
Oct - - - - - - October
Nov - - - - - - Nov
Dec 24,930 32,982 29,280 40,660 40,423 - Dec
117,437 137,760 124,975 179,074 161,694 40,633
2014 Budget 155,000
26.21%
Traffic Infractions
2009 2010 2011 2012 2013 2014
Jan 21,068 24,910 24,336 20,217 15,782 18,009$ Jan
Feb 20,599 31,691 22,741 16,844 21,485 17,749 Feb
March 26,005 26,876 21,711 24,490 17,436 17,508 March
April 25,855 34,754 29,060 24,522 22,793 25,526 April
May 22,540 31,967 20,085 18,988 21,143 18,319 May
June 27,289 25,789 22,028 22,774 14,513 - June
July 21,091 28,503 21,780 21,702 11,950 - July
Aug 30,197 24,379 19,147 21,814 16,910 - August
Sept 28,098 23,818 20,860 23,095 17,762 - Sept
Oct 28,358 22,846 22,151 19,022 14,578 - October
Nov 24,580 28,175 22,401 18,531 15,686 - Nov
Dec 23,285 22,548 20,459 19,821 9,514 - Dec
298,965$ 326,256$ 266,759$ 251,820 199,552 97,111
2014 Budget 320,200
30.33%
$0
$10,000
$20,000
$30,000
$40,000
$50,000
2009 2010 2011 2012 2013 2014
Liquor Profits
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
2009 2010 2011 2012 2013 2014
Fines & Forfeitures
7
Other Funds Revenue Charts
Street Fund
Motor Vehicle Fuel Taxes
2009 2010 2011 2012 2013 2014
Jan 29,365$ 29,365$ 28,999$ 26,401$ 29,006$ 29,968$ Jan
Feb 25,560 31,059 29,651 31,775 29,032 30,543 Feb
March 29,880 28,088 29,230 26,930 29,003 29,588 March
April 28,049 27,051 28,331 28,741 26,956 26,218 April
May 30,897 31,140 32,958 30,583 31,095 31,216 May
June 29,937 30,446 30,897 28,815 30,115 - June
July 33,359 32,377 31,626 31,834 33,270 - July
Aug 32,554 31,621 33,033 31,981 30,860 - August
Sept 34,329 34,057 30,629 32,675 34,562 - Sept
Oct 33,887 33,710 34,751 34,224 38,816 - October
Nov 31,514 31,670 31,765 30,509 26,508 - Nov
Dec 32,226 32,441 32,080 32,364 32,639 - Dec
371,557 373,025 373,950 366,833 371,862 147,533
2014 Budget 380,000
38.82%
Emergency Medical Services Fund
Ambulance Transport Fees
2009 2010 2011 2012 2013 2014
Jan 48,382$ 62,999$ 71,482$ 50,563$ 120,025$ 56,024$ Jan
Feb 40,721 72,652 65,114 46,148 94,156 47,811 Feb
March 39,041 78,115 71,991 57,465 67,761 93,481 March
April 63,533 71,986 67,123 71,528 98,736 92,429 April
May 45,237 65,024 78,858 65,711 78,850 60,552 May
June 52,574 58,261 59,627 54,976 67,994 - June
July 47,741 55,550 66,288 83,368 86,256 - July
Aug 56,235 67,303 64,907 58,235 59,020 - August
Sept 56,512 57,123 56,753 65,913 73,762 - Sept
Oct 58,141 68,644 97,429 83,831 79,623 - October
Nov 41,371 45,428 64,636 65,494 61,295 - Nov
Dec 99,207 62,757 49,362 63,072 60,673 - Dec
648,695$ 765,842$ 813,570$ 766,304 948,151 350,297
2014 Budget 975,500
35.91%
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
2009 2010 2011 2012 2013 2014
Motor Vehicle Fuel Taxes
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
2009 2010 2011 2012 2013 2014
Ambulance Transport Fees
8
GENERAL FUND OPERATING STATEMENT
THROUGH MAY 2014
YTD % OF YTD TOTAL % OF
2014 2014 ANNUAL 2013 2013 TOTAL
ACTUAL BUDGET BUDGET ACTUAL ACTUAL ACTUAL
REVENUE SOURCES
TAXES:
-PROPERTY 1,246,759$ 2,500,000$ 49.87%1,271,411$ 2,464,431$ 51.59%
-SALES - 1% City 1,350,717 3,200,000 42.21%1,286,776 3,279,622 39.24%
-SALES - 0.1% SnoCo Crim Just.113,302 260,000 43.58%105,553 259,804 40.63%
-UTILITY 1,341,065 2,831,100 47.37%1,266,462 2,768,899 45.74%
-LEASEHOLD EXCISE 21,276 120,000 17.73%22,873 124,497 18.37%
-GAMBLING 23,338 40,000 58.35%25,273 54,933 46.01%
LICENSES & PERMITS 156,416 596,800 26.21%250,627 498,397 50.29%
INTERGOV REVENUE 118,877 540,992 21.97%135,158 516,040 26.19%
CHARGES FOR SERVICES 852,688 2,228,588 38.26%919,750 2,344,063 39.24%
FINES & FORFEITURES 97,111 320,200 30.33%98,639 199,553 49.43%
MISC REVENUE 125,278 18,750 668.15%3,594 37,241 9.65%
OTHER FIN SOURCES - 70,100 0.00%4,004 92,630 4.32%
NON-REVENUES 53,649 259,000 20.71%76,643 138,204 55.46%
TOTAL REVENUES 5,500,476 12,985,530 42.36%5,466,763 12,778,314 42.78%
BEGINNING CASH BALANCE 505,494 500,000 377,749 377,749
TOTAL SOURCES 6,005,970 13,485,530 5,844,512 13,156,063
EXPENDITURES
LEGISLATIVE 51,479 122,145 42.15%53,073 120,918 43.89%
EXECUTIVE 386,895 773,381 50.03%321,458 794,251 40.47%
FINANCE 332,686 822,871 40.43%324,118 812,986 39.87%
LEGAL 83,715 70,000 119.59%26,874 102,912 26.11%
INFORM TECHNOLOGY 215,299 388,312 55.44%180,676 344,173 52.50%
MISC - DUES & ASSESSMNTS 186,240 277,396 67.14%197,462 294,771 66.99%
LAW ENFORCEMENT 1,936,608 5,069,852 38.20%1,902,255 4,808,042 39.56%
FIRE CONTROL 1,082,232 2,464,645 43.91%989,776 2,418,813 40.92%
RECYCLING 16,926 20,000 84.63%3,456 5,599 61.73%
COMMUNITY DEVELOPMENT 354,466 738,007 48.03%352,259 878,091 40.12%
LIBRARY SERVICES 15,000 36,200 41.44%15,695 36,696 42.77%
NON-EXPENDITURES 54,245 259,000 20.94%60,276 148,220 40.67%
DEBT SERVICE 1,211 872,720 0.14%- 876,847 0.00%
INTERFUND TRANSACTIONS 354,589 1,071,001 33.11%426,250 1,008,250 42.28%
TOTAL EXPENSES 5,071,591 12,985,530 39.06%4,853,628 12,650,569 38.37%
ENDING FUND BALANCE 500,000 505,494
TOTAL EXPEND & FUND BALANCE 13,485,530 13,156,063
AVAILABLE CASH BALANCE 934,379$ 990,884$
Percentage of budget allocated to May 41.67%
9
OTHER FUNDS OPERATING STATEMENTS YTD
MAY BUDGET
FUND NAME 2014 2014 %
FUND 004 GENERAL MANDATORY RESERVE FUND
This fund will be used to accumulate a reserve amount for the General Fund in accordance with the City's Financial Policy.
Begin Fund Balance -$ -$
YTD Revenues -Transfers-in- General Fund 12,500 50,000 25.0%
YTD Expenditures - - 0.0%
End Fund Balance 12,500$ 50,000$
SPECIAL REVENUE FUNDS (100 - 199)
- to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to
expenditurse for specified purposes. These funds cannot be used for General Fund purposes.
The General Fund can be reimbursed for services provided to these funds (utility Billing and collection, Acctg. And Admin.,
payroll, personnel, Information Technoloy, etc.)
FUND 101 STREET MAINTENANCE FUND
This fund is responsible for maintaining all public streets and roadways (patching, paving and sealing of roads, sidewalk
repair and maint., and other roadway functions including sweeping and snow removal)
Begin Fund Balance 79,241$ 77,000$
MV Fuel Taxes 147,533 380,000 38.8%
Interfund Transfers 122,919 460,000 26.7%
Misc. Revenues 14,847 27,200 54.6%
YTD Revenues 285,299 867,200 32.9%
Salaries & Wages 150,382 348,509 43.2%
Personnel Benefits 59,299 146,310 40.5%
Supplies 3,529 47,525 7.4%
Other Services & Charges 74,391 281,100 26.5%
Intergov Serv & Taxes 1,889 6,000 31.5%
Capital Outlays 519 - 0.0%
Interfnd Payment for Svcs 45,831 110,000 41.7%
YTD Expenditures 335,840 939,444 35.7%
Ending Fund Balance 28,700$ 4,756$
FUND 104 PROGRAM DEVELOPMENT FUND
This fund is dedicated to the purchase of public safety vehicles and equipment from a donation from the Stillaguamish Tribe
received at the beginning of 2012.
Begin Fund Balance 136,421$ 148,000$
YTD Revenues - Interest Income - 100 0.0%
YTD Police Expenditures 9,433 22,100 42.7%
YTD Fire Expenditures 5,600 1,000 560.0%
YTD Expenditures 15,033 23,100
End Fund Balance 121,388$ 125,000$
FUND 107 GROWTH MANAGEMENT FUND
This fund is used to track mitigation fees paid to the City for new construction impacts. These funds must be used within 6 years
of receipt and expended for improvements relating to growth and infrastructure needs as a direct result of growth.
Begin Fund Balance 1,829,337$ 1,315,000$
Mitigation Fees 10,163 220,000 4.6%
Interest Income 3,882 40,000 9.7%
Loan Repayment-EMS 225,170 - 0.0%
YTD Revenues 239,215 260,000 12.1%
YTD Expenditures 418,222 500,000 83.6%
End Fund Balance 1,650,330$ 1,075,000$
10
YTD
MAY BUDGET
SPECIAL REVENUE FUNDS - Cont.FUND NAME 2014 2014 %
FUND 108 EMERGENCY MEDICAL SERVICES FUND
The EMS Fund is responsible for providing medical care for emergency calls that have a high potential for acute trauma or
loss of life and emergency medical coverage for special events. The majority of the revenue in this fund are from the 50 cent
EMS property tax levy and the levies from Fire Dist. No. 21, 24 and 25, and from transport fees.
The other fire districts contract with us to help with EMS services in their areas.
Begin Fund Balance 137,651$ 100,000$
Property Taxes Arlington 527,292 912,000 57.8%
Property Taxes FD #24 - Darrington - 83,000 0.0%
Property Taxes FD #21 - Arlington Rural - 385,756 0.0%
Property Taxes FD #25 - Oso - 46,000 0.0%
Intergovernmental Grants - 1,600 0.0%
Transport Fees 350,297 975,500 35.9%
Interfund Payments-Airport 53,375 128,100 41.7%
Other Misc.544 82,800 0.7%
Interfund Loan 285,716 - 0.0%
YTD Revenues 1,217,224 2,614,756 46.6%
Salaries & Wages 614,850 1,552,332 39.6%
Overtime 92,510 109,000 84.9%
Personnel Benefits 173,807 440,913 39.4%
Supplies 27,620 77,400 35.7%
Other Services & Charges 101,536 253,550 40.0%
Intergov Serv & Taxes 8,282 9,600 86.3%
Debt Repayment 225,233 - 0.0%
Capital Outlays 2,872 4,000 71.8%
Interfnd Payment for Svcs 108,162 259,600 41.7%
YTD Expenditures 1,354,872 2,706,395 50.1%
End Fund Balance 3$ 8,361$
FUND 109 STREAM COORIDOR RESTORATION FUND
This fund is used for capital improvements to streams within the City.
Begin Fund Balance 37,899$ 24,000$
YTD Revenues - Stilly Tribe/Int. Income 512 250 204.8%
YTD Expenditures - 7,000 0.0%
End Fund Balance 38,411$ 17,250$
FUND 114 LODGING TAX FUND
The City collects a 2% tax on lodging stays. This moneys in this fund is then used to promote tourism in and around the City.
The Lodging Tax Advisory Committee makes a recommendation to the City Council for the distribution of funds to local non-profit
and marketing organizations, following a competetive grant process.
Begin Fund Balance 59,715$ 35,000$
Hotel/Motel Tax 29,755 75,000 39.7%
Interest Income 126 1,000 12.6%
YTD Revenues 29,881 76,000 39.3%
YTD Expenditures 27,618 84,000 32.9%
End Fund Balance 61,978$ 27,000$
11
YTD
MAY BUDGET
SPECIAL REVENUE FUNDS - Cont.FUND NAME 2014 2014 %
FUND 116 CEMETERY OPERATIONS FUND
This Fund provides for the operation and maintenance of the Arlington Cemetery.
Services provided include internment services, and maintenance of the landscape and the various structures.
Begin Fund Balance 58,086$ 68,000$
Charges for Services 116,818 196,000 59.6%
Misc 141 575 24.5%
Non-Revenues 6,355 9,000 70.6%
Transfer In - 100 0.0%
YTD Revenues 123,314 205,675 60.0%
Salaries & Wages 42,344 100,700 42.0%
Personnel Benefits 18,829 46,612 40.4%
Supplies 17,789 24,700 72.0%
Other Services & Charges 8,216 24,000 34.2%
Intergov Serv & Taxes 6,257 10,000 62.6%
Capital Outlays - 575 0.0%
Interfnd Payment for Svcs 17,445 34,375 50.7%
Interfund Transfers/to Cap Improv - 10,000 0.0%
YTD Expenditures 110,880 250,962 44.2%
End Fund Balance 70,520$ 22,713$
DEBT SERVICE FUNDS (200 - 299)
- to account for the accumulation of resources for, and the payment of, general long-term debt
FUND 212 LOCAL IMPROVEMENT DISTRICT #21 FUND
This Fund is used to collect the remaining outstanding local improvement district property assessments.
Begin Fund Balance 105,093$ 5,000$
YTD Revenues - Assessment Collections/Interest 73,850 57,100 129.3%
YTD Expenditures - 60,000 0.0%
End Fund Balance 178,943$ 2,100$
CAPITAL PROJECTS FUNDS (300 - 399)
- to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those
financed by proprietary funds and trust funds).
These funds cannot be transferred and used for General Fund purposes.
FUND 303 REAL ESTATE EXCISE TAX 1 FUND (FIRST 1/4% TAX)
This fund is used to collect the first 1/4% of real estate excise tax on property sales and can be used for capital projects within
the City, maintenance, and for debt service.
Begin Fund Balance 138,267$ 110,000$
REET Tax Collections 92,512 251,000 36.9%
Interest Income 240 2,000 12.0%
YTD Revenues 92,752 253,000 36.7%
800 Mhz Radio Maintenance 67,638 60,000 112.7%
Debt Service 30,000 123,600 24.3%
Transfer to Street Fund 25,000 60,000 41.7%
Capital Expenditures 2,500 - 0.0%
125,138 243,600 51.4%
End Fund Balance 105,881$ 119,400$
12
YTD
MAY BUDGET
CAP. PROJECT FUNDS - cont.FUND NAME 2014 2014 %
FUND 304 REAL ESTATE EXCISE TAX 2 FUND (SECOND 1/4% TAX)
This fund is used to collect the second 1/4% of real estate excise tax on property sales and can be used for capital projects
within the City and for debt service.
Begin Fund Balance 13,245$ 1,000$
REET Tax Collections 92,512 286,000 32.3%
Interest Income 86 100 86.0%
YTD Revenues 92,598 286,100 32.4%
Debt Service Costs - 285,600 0.0%
End Fund Balance 105,843$ 1,500$
FUND 305 CAPITAL FACILITIES/BUILDING FUND
This fund is used to fund future building needs.
Begin Fund Balance 4$ 1,800$
Transf In from REET1 & General Fund 30,000 72,000 41.7%
Misc Revenue 100 0.0%
YTD Revenues 30,000 72,100 41.6%
YTD Expenditures 30,000 72,000 41.7%
End Fund Balance 4$ 1,900$
FUND 310 TRANSPORTATION IMPROVEMENT FUND
This fund accounts for all transporation related capital improvements (not including the TBD projects)
Begin Fund Balance 3,655$ 140,000$
Grant Receipts 1,805,078 3,683,109 49.0%
Misc. Revenues 4,957 12,400 40.0%
Transfers-In-Growth Fund 132,506 500,000 26.5%
YTD Revenues 1,942,541 4,195,509 46.3%
YTD Expenditures 1,946,195 4,144,958 47.0%
End Fund Balance 1$ 190,551$
FUND 311 PARKS IMPROVEMENT FUND
This fund is to account for all Parks related capital improvement projects.
Begin Fund Balance 156,634$ 180,000$
YTD Revenues - Haller Park Donations/Interest Inc.3,406 26,100 13.0%
Country Charm Park Debt - Interest 63,333 152,000 41.7%
Haller Playground 27,133 25,000 108.5%
YTD Expenditures 90,466 177,000 51.1%
End Fund Balance 69,574$ 29,100$
13
YTD
MAY BUDGET
FUND NAME 2014 2014 %
FUND 312 LIBRARY CAPITAL IMPROVEMENT FUND
This fund is used to account for any improvments made at the Arlington Library.
Begin Fund Balance 13,693$ 14,000$
YTD Revenues - Interest Income 31 200 15.5%
YTD Expenditures - - 0.0%
End Fund Balance 13,724$ 14,200$
FUND 316 CEMETERY CAPITAL IMPROVEMENT FUND
This fund is used to account for any improvments made at the Arlington Cemetery.
Begin Fund Balance 5,607$ 13,500$
YTD Revenues - Transf. In-Cemetery Fund/Interest Inc.13 10,100 0.1%
YTD Expenditures - - 0.0%
End Fund Balance 5,620$ 23,600$
ENTERPRISE FUNDS (400 - 499)
- an enterprise fund may be used to report activity for which a fee is charged to external users for goods or services.
An enterprise fund is also required for any activity whose principal revenue sources meet any of the following criteria -
- Debt backed solely by fees and charges
- Legal requirement to recover costs
- Policy decision to recover costs
These funds cannot be transferred and used for General Fund purposes.
FUND 401 WATER/SEWER FUND
The Water Division's responsibility is to provide clean, clear, potable water to utility customers, to maintain a high quality
and deliver the product economically and plentifully to the customers.
Begin Fund Balance-Unreserved-Water 2,003,693$ 1,895,000$
Charges for Services 1,503,516 3,666,650 41.0%
Fines & Penalties 29,064 70,000 41.5%
Miscellaneous-Int. Income 7,778 17,500 44.4%
Non-Revenues 824 1,000 82.4%
YTD Revenues-Water 1,541,182 3,755,150 41.0%
Salaries & Wages 303,882 747,148 40.7%
Personnel Benefits 110,149 291,468 37.8%
Supplies 54,551 172,500 31.6%
Other Services & Charges 161,762 322,600 50.1%
Intergov Serv & Taxes 154,058 378,800 40.7%
Debt Service - 93,530 0.0%
Interfund Payment for Services 325,883 782,115 41.7%
Interfund Transfers - 701,700 0.0%
YTD Expenditures-Water 1,110,285 3,489,861 31.8%
End Fund Balance-Unreserved-Water 2,434,590$ 2,160,289$
14
YTD
MAY BUDGET
ENTERPRISE FUNDS - cont.FUND NAME 2014 2014 %
The Wastewater or Sewer Division is charged with treating industial and domestic wastes. Sewer maintenance insures that the
system is leak and seepage proof, unblocked by sand, grease, or roots, and properly graded to move wasts efficiently to the treatment
plant after which the treated water can be sent back to the Stilliguamish River cleaner than when it was originally taken out.
Begin Fund Balance-Unreserved - Sewer 1,514,307$ 1,050,000$
Charges for Services 2,258,797 5,403,600 41.8%
Fines & Penalties 12,527 30,000 41.8%
Miscellaneous-Interest Income 6,388 13,000 49.1%
YTD Revenues-Sewer 2,277,712 5,446,600 41.8%
Salaries & Wages 246,357 596,016 41.3%
Personnel Benefits 88,364 236,169 37.4%
Supplies 76,566 263,500 29.1%
Other Services & Charges 248,615 526,350 47.2%
Intergov Serv & Taxes 157,084 343,100 45.8%
Non-Expenditures - 1,000 0.0%
Debt Service 511,349 2,658,396 19.2%
Interfund Payment for Services 342,240 819,590 41.8%
Interfund Transfers - 101,700 0.0%
YTD Expenditures-Sewer 1,670,575 5,545,821 30.1%
End Fund Balance-Unreserved-Sewer 2,121,444$ 950,779$
FUND 402 AIRPORT FUND
The operation of the Airport Fund includes airport land facility management and maintanance; aviation, industrial and
commercial development; security and administrative services; and airport planning.
Begin Fund Balance 726,139$ 400,000$
Rental Income 1,799,816 2,897,916 62.1%
Intergov. Revenues 4,950 45,000 11.0%
Other Misc Revenues 9,628 23,000 41.9%
Non-Revenues 231,769 394,139 58.8%
TYD Revenues 2,046,163 3,360,055 60.9%
Salaries & Wages 106,827 266,094 40.1%
Personnel Benefits 35,292 110,668 31.9%
Supplies 11,975 31,450 38.1%
Other Services & Charges 90,403 221,481 40.8%
Intergov Serv & Taxes 124 800 15.5%
Non-Expenditures 180,928 382,139 47.3%
Capital Outlays 105,369 781,000 13.5%
Debt Service 55,869 120,520 46.4%
Interfund Payment for Services 634,773 1,543,642 41.1%
Interfund Transfers 281,668 293,368 96.0%
YTD Expenditures 1,503,228 3,751,162 40.1%
End Fund Balance 1,269,074$ 8,893$
15
YTD
MAY BUDGET
ENTERPRISE FUNDS - cont.FUND NAME 2014 2014 %
FUND 405 WATER CAPITAL IMPROVEMENT FUND
This fund is used to account for major capital projects constructed by the Water division. All revenues from new connection fees
are receipted into this fund as well as a small portion of the monthly utility rate.
Begin Fund Balance 4,641,426$ 5,100,000$
Interst Income 9,467 30,000 31.6%
Water Connection Fees 43,000 86,000 50.0%
Loan Repaymt-Stormwater - 50,000 0.0%
Non-Revenues 923 - 0.0%
Transfer-In-Water Fund - 700,000 0.0%
YTD Revenues 53,390 866,000 6.2%
YTD Expenditures 541,585 1,227,000 44.1%
End Fund Balance 4,153,231$ 4,739,000$
FUND 406 SEWER CAPITAL IMPROVEMENT FUND
This fund is used to account for major capital projects constructed by the Sewer division. All revenues from new connection fees
are receipted into this fund as well as a small portion of the monthly utility rate.
Begin Fund Balance 3,570,011$ 2,490,000$
Interest Income 7,421 15,000 49.5%
Sewer Connection Fees 67,200 168,000 40.0%
Non-Revenues 1,675 - 0.0%
Transfer-In-Sewer Fund - 100,000 0.0%
YTD Revenues 76,296 283,000 27.0%
YTD Expenditures 536,984 1,335,000 40.2%
End Fund Balance 3,109,323$ 1,438,000$
FUND 407 PUBLIC WORKS-UTILITIES ADMINISTRATION FUND
This fund is responsible for the management of the three utilities - Water, Sewer and Storm water.
This includes financial management, regulatory compliance and personnel management.
Begin Fund Balance 127,858$ 120,000$
Charges for Services 346,893 832,560 41.7%
Misc. Revenue 473 1,600 29.6%
YTD Revenues 347,366 834,160 41.6%
Salaries & Wages 205,455 497,969 41.3%
Personnel Benefits 81,481 204,304 39.9%
Supplies 2,935 6,500 45.2%
Other Services & Charges 17,455 101,940 17.1%
Interfund Payment for Services 18,311 - 0.0%
Capital Outlays - 6,000 0.0%
YTD Expenditures 325,637 816,713 39.9%
End Fund Balance 149,587$ 137,447$
16
YTD
MAY BUDGET
ENTERPRISE FUNDS - cont.FUND NAME 2014 2014 %
FUND 409 STORM WATER CAPITAL IMPROVEMENT FUND
This fund is used to fund any major capital projects constructed by the Storm Water Utility.
Begin Fund Balance 160,531$ 43,000$
Grant Revenues 504,420 2,051,000 24.6%
Interest Income 823 100 823.0%
Transfers-In-Stormwater Fund - 160,000 0.0%
YTD Revenues 505,243 2,211,100 22.9%
YTD Expenditures 68,009 2,216,000 3.1%
End Fund Balance 597,765$ 38,100$
FUND 410 AIRPORT RESERVE FUND
This fund is used to fund emergency repairs and large capital projects at the Municipal Airport.
Begin Fund Balance 342,314$ 345,346$
Interest Income 1,073 500 214.6%
Transfers-In-Airport Fund 281,668 281,668 100.0%
YTD Revenues 282,741 282,168 100.2%
YTD Expenditures - 195,000 0.0%
End Fund Balance 625,055$ 432,514$
FUND 411 WATER/SEWER BOND RESERVE FUND
The legal requirements in Bond and Loan documents required the City hold an amount in reserve that totals the smaller of
1) the maximum annual debt service of the W/S Revenue Bonds and Loans
2) 125% of the annual debt service of the utility, or
3) 10% of the stated principal amount of the bonds
The current amount in this fund is sufficient to satisfy the reserve requirement.
Investment Interest is going to the Water/Sewer Funds.
Begin Fund Balance 1,501,946$ 679,000$
YTD Revenues - - 0.0%
YTD Expenditures - - 0.0%
End Fund Balance 1,501,946$ 679,000$
17
YTD
MAY BUDGET
ENTERPRISE FUNDS - cont.FUND NAME 2014 2014 %
FUND 412 STORM WATER MANAGEMENT FUND
This fund was created to administer, amange, develop, operate and maintain the City's Storm Water Management Plan. This is our
communities effort to provide flood management and water quality protection. The Plan includes building and maintaining the
storm water systems, providing errosion control, and creating public awareness programs that help to protect our water quality.
Begin Fund Balance 245,834$ 120,000$
Charges for Sevices 359,000 775,000 46.3%
Misc revenue 1,904 53,000 3.6%
YTD Revenues 360,904 828,000 43.6%
Salaries & Wages 68,194 164,649 41.4%
Personnel Benefits 25,112 64,899 38.7%
Supplies 1,003 15,000 6.7%
Other Services & Charges 25,373 84,600 30.0%
Intergov Serv & Taxes 22,168 159,500 13.9%
Interfund Payment for Services 51,081 - 0.0%
Debt Service - 51,500 0.0%
Interfund Transfers 47,919 275,000 17.4%
YTD Expenditures 240,850 815,148 29.5%
End Fund Balance 365,888$ 132,852$
FUND 413 AIRPORT CAPITAL IMPROVEMENT (FAA) FUND
This fund accounts for capital improvements at the Airport that are eligible for, and receive grant funding from the Federal
Aviation Administration (FAA).
Begin Fund Balance 499,066$ 371,500$
Grant Receipts 605,325 367,735 164.6%
Interest Income 1,589 1,000 158.9%
Interfund Loan Payment 30,000 70,000 42.9%
636,914 438,735 145.2%
YTD Expenditures 984,452 650,500 151.3%
End Fund Balance 151,528$ 159,735$
18
YTD
MAY BUDGET
FUND NAME 2014 2014 %
INTERNAL SERVICE FUNDS (500 - 599)
- to account for the financing of goods and or services provided by one department or agency or to other departments or agencies
of the governmental unit, or to other governmental units, on a cost-reimbursement basis.
FUND 501 EQUIPMENT RENTAL - MAINT & OPERATIONS FUND
This fund pays for all fleet expenditures (the majority being Fuel and Repairs and Maintenance) for all city vehicles and equipment.
The fleet ranges from Police and Fire vehicles and automobiles, utility vehicles and heavy construction equipment, and parks
vehicles and maintenance equipment.
Begin Fund Balance 121$ 4,000$
Rental Fees 225,668 524,290 43.0%
Misc revenue 1,008 - 0.0%
YTD Revenues 226,676 524,290 43.2%
Operating Supplies 2,413 6,300 38.3%
Fuel 76,053 225,000 33.8%
Other services/Charges 51,154 95,172 53.7%
Vehicle Repairs & Maint.Police 10,653 52,000 20.5%
Vehicle Repairs & Maint.Fire 10,686 52,800 20.2%
Vehicle Repairs & Maint.EMS 15,487 33,000 46.9%
Vehicle Repairs & Maint.Other 20,654 37,200 55.5%
Interfund Payment for Services 8,046 20,500 39.2%
YTD Expenditures 195,146 521,972 37.4%
End Fund Balance 31,651$ 6,318$
FUND 503 EQUIPMENT RENTAL REPLACEMENT FUND
This fund is used to account for the accumulation of resources for the future replacement of vehicles and equipment when the
useful lives of those vehicles and equipment is nearing the end.
Begin Fund Balance 1,193,577$ 1,325,000$
Rental Fees 94,736 415,810 22.8%
Interest Income 2,586 8,000 32.3%
YTD Revenues 97,322 423,810 23.0%
YTD Expenditures 277,743 384,900 72.2%
End Fund Balance 1,013,156$ 1,363,910$
19
YTD
MAY BUDGET
INTERNAL SERVICE FUNDS - cont.FUND NAME 2014 2014 %
FUND 504 PUBLIC WORKS GROUNDS & FACILITIES MAINTENANCE & OPERATIONS FUND
This fund is responsible for the maintenance and operations of the airport, cemetery, parks and public areas, and
all City owned facilities.
Begin Fund Balance 9,106$ 8,000$
Other Misc. Revenues - General Fund Support 307,089 737,001 41.7%
Other Misc. Revenues - Airport Support 159,579 362,062 44.1%
Other Misc. Revenues - Utility Fund Support 5,000 12,000 41.7%
Other Misc. Revenues - Cemetery Support 3,125 7,500 41.7%
Other Misc. Revenues - Building Rental Income 7,435 17,300 43.0%
Charges for Services - Ball Field Use 6,912 8,300 83.3%
Interest Income 73 1,000 7.3%
Non-Revenues - 29,000 0.0%
489,213 1,174,163 41.7%
Salaries & Wages 177,895 539,523 33.0%
Personnel Benefits 59,715 199,715 29.9%
Supplies 27,293 55,350 49.3%
Other services/Charges 116,189 289,975 40.1%
Interfund Payment for Services 49,651 87,600 56.7%
Capital Expenditures 692 - 0.0%
Interfund Transfers - 1,500 0.0%
YTD Expenditures 431,435 1,173,663 36.8%
End Fund Balance 66,884$ 8,500$
PRIVATE PURPOSE TRUST FUNDS (620 - 629)
- to report all trust arangements under which principal and interest benefit individualS, private organizations and other
governments.
FUND 622 CEMETERY PRE-NEED TRUST FUND
This funds is used to account for dollars where individuals have pre-paid for their items needed at the time of burial.
Begin Fund Balance 20,356$ 16,000$
Sale of Liner/Vaults 2,090 10,000 20.9%
Interest Income 48 200 24.0%
2,138 10,200 21.0%
YTD Expenditures - 10,100 0.0%
End Fund Balance 22,494$ 16,100$
20
YTD
MAY BUDGET
FUND NAME 2014 2014 %
AGENCY FUNDS (630 - 699)
- used to account for assets held by a government as an agent for individuals, private organizations, other governments,
and/or funds.
FUND 630 ARLINGTON TRANSPORTATION BENEFIT DISTRICT (TBD)
The TBD began receiving sales tax revenues in March 2014 to be used to fund street improvments.
This is a separate entity from the City and will be audited separately by the State Auditor's Office.
Begin Fund Balance -$ -$
Sales Tax 177,434 600,000 29.6%
Interest Income - 500 0.0%
YTD Revenues 177,434 600,500 29.5%
YTD Expenditures 25,950 468,500 5.5%
End Fund Balance 151,484$ 132,000$
PERMANENT FUNDS ( 700-799)
- to report resources that are resticted to the extent that only earnings (interest), not principal, can be used to support the local
government's applicable program.
FUND 702 CEMETERY ENDOWMENT FUND
The Cemetery collects a perpetual care fee for each plot sold, either at the time of need or on a pre-need sale. Those funds are held
in this fund and the interest earned can be transferred to the Cemetery Fund, if needed, to help cover the costs of maintaining
the grounds of the Cemetery into perpetuity.
Begin Fund Balance 227,745$ 220,000$
Endowed Care Funds 9,359 12,000 78.0%
Interest Income 524 1,500 34.9%
YTD Revenues 9,883 13,500 73.2%
YTD Expenditures - 2,500 0.0%
End Fund Balance 237,628$ 231,000$
21
City of Arlington
Council Agenda Bill
Item:
WS #4
Attachment
C
COUNCIL MEETING DATE:
June 23, 2014
SUBJECT:
Settlement Agreement with Busy Beaver Recycling
ATTACHMENTS:
Settlement Agreement and Release between the City of Arlington and Timothy Riddle
DEPARTMENT OF ORIGIN
Community & Economic Development
EXPENDITURES REQUESTED: NONE
BUDGET CATEGORY: N/A
LEGAL REVIEW:
DESCRIPTION:
The attached Settlement Agreement and Release requires Council approval for Mayoral
signature.
The Dismissal of the Lawsuit requires Council authorization.
HISTORY:
Timothy Riddle began operating a construction debris recycling facility on January 8, 2014, in
the City of Arlington, located at 20015 67th Avenue NE, without first securing necessary
permits. The City issued a Notice of Violation on April 8, 2014, specifying corrective action
required to avoid penalties. Timothy Riddle did not appeal the Notice of Violation within 10
days, and as a result the Notice of Violation is a final determination. The City commenced
the lawsuit under Snohomish County Superior Court Case Number 14-2-03548-7 against
Riddle. The parties wish to resolve the lawsuit without incurring substantial additional cost.
ALTERNATIVES
Approve Staff’s Recommendation with Modifications
Table Staff’s Recommendation
Deny Staff’s Recommendation
RECOMMENDED MOTION:
No action at this time.
City of Arlington
Council Agenda Bill
Item:
WS #5
Attachment
D
COUNCIL MEETING DATE:
June 23, 2014
SUBJECT:
Bystrom House Recovery, Salvage and Removal Project Apparent Low Bidder
ATTACHMENTS:
- Bid Tabulation
DEPARTMENT OF ORIGIN
Public Works – Jim Kelly
EXPENDITURES REQUESTED: $ 19,257.60 (Apparent Low Bidder)
BUDGET CATEGORY: Water Capital Funds
LEGAL REVIEW:
DESCRIPTION:
The Bystrom House Recovery, Salvage and Removal Project advertised on the Small
Works Roster with five bids received by 2:00 PM, Thursday June 12, 2014; a summary of
received bids is on the attached bid list. The Engineers Estimate was $25,000.
HISTORY:
The Bystrom Residence is a 1,977 square foot a two-story single family residence building
located on the southwest corner of West Cox Ave and West Ave. The Water Department
purchased the former Bystrom property and house in 2012 in order to plan for future
expansion of the utility plant. City Council declared the property surplus in April 2014
and the Recovery, Salvage and Removal Project was advertised to contractors on the Small
Works Roster. Five bids were received and staff has reviewed the low bid submitted by
Sky Corp LTD. and determined they are qualified to complete the project.
ALTERNATIVES
• Reject Bids, re-advertise the project
• Remand to staff for further evaluation
RECOMMENDED MOTION:
No action at this time – discussion/workshop only.
City of Arlington
Council Agenda Bill
Item:
WS #6
Attachment
E
COUNCIL MEETING DATE:
June 23, 2014
SUBJECT:
Amendment to the Snohomish County Housing & Community Development Urban County
Consortium Interlocal Agreement
ATTACHMENTS:
Letter from Snohomish County Human Services
Amendment to the Snohomish County Housing & Community Development Urban County
Consortium Interlocal Agreement
Original Interlocal Agreement executed July 1999.
DEPARTMENT OF ORIGIN
Administration, Kristin Banfield – 360-403-3444
EXPENDITURES REQUESTED: -0-
BUDGET CATEGORY: N/A
LEGAL REVIEW:
DESCRIPTION:
The cities and Snohomish County formed the Urban County Consortium in 1999 to increase the
level of assured annual funding from the US Department of Housing and Urban Development
(HUD) to help meet affordable housing and community development needs in our greater
Snohomish County community. Every three years, HUD requires Snohomish County to renew
the Interlocal Agreement. For this renewal period, the participating jurisdictions must adopt
revised language in the Interlocal Agreement.
Membership in the Consortium allows jurisdictions to apply for funding under three different
HUD grant programs: Community Development Block Grant (CDBG), HOME Investment
Partnership (HOME), and Emergency Solutions Grant (ESG). If we do not participate in the
consortium, we will have to apply for funding from the state, if any funding is available.
HISTORY:
The City has been a member of the Urban County Consortium since 1999.
ALTERNATIVES
RECOMMENDED MOTION:
Workshop; discussion only.
City of Arlington
Council Agenda Bill
Item:
WS #7
Attachment
F
COUNCIL MEETING DATE:
June 23, 2014
SUBJECT:
Draft ordinance addressing aggressive solicitation, begging, and camping issues
ATTACHMENTS:
Draft Ordinance
DEPARTMENT OF ORIGIN
Legal, Steve Peiffle – 360-435-2168; Police, Commander Brian DeWitt & Sergeant Jon
Ventura
EXPENDITURES REQUESTED: -0-
BUDGET CATEGORY: N/A
LEGAL REVIEW:
DESCRIPTION:
The city has received a significant number of complaints in the past few weeks
regarding transients and their behaviors. Members of the Police department worked
with the City Attorney and the City’s Prosecutor to develop the attached draft
ordinance which will provide our police officers with some tools to help address some
of the behaviors that are objectionable to the community. The proposed tools are
currently being used in other local jurisdictions in Snohomish County with a relative
amount of success.
HISTORY:
ALTERNATIVES
RECOMMENDED MOTION:
Workshop; discussion only.
ORDINANCE NO. 2014-XXX 1
ORDINANCE NO. 2014--XXX
AN ORDINANCE OF THE CITY OF ARLINGTON, WASHINGTON
AMENDING ARLINGTON MUNICIPAL CODE TITLE 9 AND ADOPTING A NEW
CHAPTER RELATING TO PEDESTRIAN INTERFERENCE, UNLAWFUL CAMPING AND
RELATED MATTERS
WHEREAS, the City of Arlington, Washington has the authority to enact laws to protect
citizens and visitors to the City; and
WHEREAS, the City Council believes it is in the best interests of its citizens to amend
certain provisions of the City criminal code as it relates to camping and pedestrian interference;
NOW, THEREFORE, the City Council of the City of Arlington do hereby ordain as
follows:
Section 1. Arlington Municipal Code section 9.08.030 shall be and hereby is repealed.
Section 2. A new chapter of the Arlington Municipal Code shall be and hereby is
adopted to read as follows:
PUBLIC SOLICITATION AND CAMPING
9.56.010 Findings.
9.56.020 Definitions.
9.56.030 Pedestrian interference.
9.56.040 Pedestrian interference - Exceptions
9.56.050 Coercive solicitation – Prohibited.
9.56.060 Time of Solicitation
9.56.070 Place of Solicitation
9.56.080 Penalty for pedestrian interference, coercive solicitation, or any violation of
the time and/or place of solicitation restrictions.
9.56.090 Unlawful camping.
9.56.100 Storage of personal property in public places.
9.56.110 Penalty for camping violations.
9.56.120 Parked recreational vehicles exempt.
9.56.130 Permit.
ORDINANCE NO. 2014-XXX 2
9.56.010 Findings.
Consistent with the findings of other Washington State Cities, the city council finds that
it is important to the general welfare of the citizens and residents of the city to protect and
preserve the public safety of pedestrians and to insure the safe and efficient movement of
pedestrian and vehicular traffic in public places. The city council further finds that public places
as defined in this section serve the primary purpose of enabling pedestrian and vehicular traffic
to safely and efficiently mover about from place to place and that public places have become
increasingly congested and should be maintained to serve their primary purpose. Arlington, as
well as other cities in Washington, has experienced an increase in the number of incidents of
aggressive solicitation by individuals towards pedestrians and vehicular traffic and that such
interference in public places deteriorates from the primary purpose and threatens public health,
safety and welfare. The city has a compelling interest in protecting its citizens from threatening,
intimidating or harassing behavior caused by aggressive solicitations, in preserving the quality of
life and in protecting and preserving public health, safety and welfare while discouraging the use
of public parks as temporary living quarters.
9.56.020 Definitions.
The following definitions apply in this chapter:
(1) “Coercive solicitation” means to solicit with the intent to intimidate or coerce another
person into giving money or goods.
(2) “Solicit” means to ask for money or goods as a charity, whether by words, bodily
gestures, signs, or other means.
(3) “Camp” means to pitch or occupy camp facilities, to use camp paraphernalia.
(4) “Camp facilities” include, but are not limited to, tents, huts or temporary shelters.
(5) “Camp paraphernalia” includes, but is not limited to, tarpaulins, cots, beds, sleeping bags,
hammocks or non-city designated cooking facilities and similar equipment.
(6) “Coerce” or “coercive” means to do any of the following with intent:
(a) To approach, speak or gesture to a person in such a manner as would cause a
reasonable person to believe that the person is being threatened with a commission of a criminal
act upon the person, another person or property in the person’s possession; or
(b) To approach within one foot of a person for the purpose of making a solicitation
without obtaining said person’s initial consent; or
(c) To persist in a solicitation after the person solicited has given a negative response; or
(d) To impede the passage of a person, pedestrian traffic, a vehicle or vehicular traffic
while making a solicitation including, but not limited to, public places adjacent to any public
roadway where the solicitation is directed or intended to attract the attention of the occupant of
any vehicle stopped or traveling on the roadway, unless said vehicle is legally parked; or
(e) To engage in conduct that would reasonably be construed as intended to compel or
force a person being solicited to accede to demands; or
(f) To make any false or misleading representation in the course of making a solicitation.
(g) Soliciting in a manner that exploits children.
(h) Solicit under the influence of alcohol and or controlled substances.
(7) “Intimidate” means to engage in conduct which would make a reasonable person fearful
or feel compelled.
ORDINANCE NO. 2014-XXX 3
(8) “Obstruct pedestrian or vehicular traffic” means to walk, stand, sit, lie, or place an object
in such a manner as to block passage by another person or a vehicle, or to require another person
or a driver of a vehicle to take evasive action to avoid physical contact. Acts authorized as an
exercise of one’s constitutional right to picket or to legally protest, and acts authorized by a
permit issued pursuant to Chapter 5.44 of the Arlington Municipal Code, shall not constitute
obstruction of pedestrian or vehicular traffic.
(9) “Park” means those areas subject to the executive and administrative responsibility of the
city parks, arts and recreation commission established by Chapter 2.40 of the Arlington
Municipal Code.
(10) “Public place” means an area generally visible to public view and includes alleys,
bridges, buildings, driveways, parking lots, parks, park paths and trails, plazas, sidewalks and
streets open to the general public, and rights of way open to the use of the public, including those
that serve food or drink or provide entertainment, and the doorways and entrances to buildings or
dwellings and the grounds enclosing them.
(11) “Solicitation” for the purposes of this chapter is any means of asking, begging,
requesting, or pleading made in person, orally or in a written or printed manner, directed to
another person, requesting an immediate donation of money, contribution, alms, financial aid,
charity, gifts of items or service of value, or the purchase of an item or service for an amount far
exceeding its value, under circumstances where a reasonable person would understand that the
purchase is in substance a donation.
(12) “Store” means to put aside or accumulate for use when needed, to put for safekeeping,
to place or leave in a location.
(13) “Street” means any highway, lane, road, street, right-of-way, boulevard, alley and every
way or place within Arlington open as a matter of right to public vehicular travel.
(14) “Automated Teller Machine” means a machine, other than a telephone; (1) that is
capable of being operated by a customer of a financial institution; (2) by which the customer may
communicate with the financial institution a request to withdraw, deposit, transfer funds, make
payment, or otherwise conduct financial business for the customer or for another person directly
from the customer’s account or from the customer’s account under a line of credit previously
authorized by the financial institution for the customer; and (3) the use of which may or may not
involve personnel of a financial institution.
(15) “Financial Institution” means any banking corporation, credit union, foreign exchange
office. For purposes of this section, it shall also include any check cashing business.
(16) “Exploit children” shall mean using children in an unethical, selfish, or abusive manner
or in any other manner that gives unfair advantage.
(17) “Public Transportation Facility” means a facility or designated location that is owned,
operated, or maintained by a city, county, county transportation authority, public transportation
benefit area, regional transit authority, or municipal corporation within the state for the purpose
of facilitating bus or other public transportation.
(18) “Public Transportation Vehicle” means any vehicle that is owned by a city, county,
county transportation authority, public transportation benefit area, regional transit authority, or
municipal corporation with the state for the purpose of facilitating bus or other public
transportation.
ORDINANCE NO. 2014-XXX 4
(19) “On and off ramps” refers to the areas commonly used to enter and exit public state
route or interstate highway from any city roadway or overpass.
9.56.030 Pedestrian interference.
A person is guilty of pedestrian interference if, in a public place, he or she intentionally:
(1) Obstructs pedestrian or vehicular traffic; or
(2) Coercively solicits.
9.56.040 Pedestrian interference – Exceptions
The prohibitions in AMC 9.56.030 shall not apply to any person:
(1) Sitting or lying down on a public sidewalk due to a medical emergency;
(2) Who, as the result of a disability, utilizes a wheelchair, walker, or similar device to
move about the public sidewalk;
(3) Operating or patronizing a commercial establishment conducted on the public
sidewalk pursuant to a street use permit; or a person participating in or attending a
parade, festival, performance, rally, demonstration, meeting, or similar event conducted
on the public sidewalk pursuant to a street use or other applicable permit;
(4) Sitting on a chair or bench located on the public sidewalk which is supplied by a
public agency; or
(5) Sitting on a bench or public sidewalk within a public transportation facility.
9.56.050 Coercive solicitation – Prohibited.
It shall be unlawful for a person to make coercive solicitation.
9.56.060 Time of Solicitation
It shall be unlawful to make solicitation to a person, pedestrian traffic, a vehicle or vehicular
traffic on public property after sunset or before sunrise.
9.56.070 Place of Solicitation
It shall be unlawful to solicit at the following places:
(1) Within 300 feet of an on or off ramp;
(2) Within 300 feet of any roadway intersection, City Park, school zone or
daycare/preschool if children are present, nursing home or assisted living facility,
financial institution or automated teller machine, public transportation facility or
public parking lot;
(3) On private property, unless the solicitor has prior written permission from the
owner or occupant;
(4) On any public transportation vehicle; or
(5) Within 25 feet of any occupied handicapped parking space.
9.56.080 Penalty for pedestrian interference, coercive solicitation, or any violation of the
time and/or place of solicitation restrictions.
Pedestrian interference is a misdemeanor. Coercive solicitation is a misdemeanor.
Violation of the time and/or place of solicitation restrictions is a misdemeanor.
ORDINANCE NO. 2014-XXX 5
(1) First Offense. Any person violating any of the provisions of this chapter shall, upon
conviction of such violation, be punished by a fine of not more than $1,000 or by
imprisonment not to exceed 90 days, or by both such fine and imprisonment.
(2) Second Offense. Every person who violates any of the provisions of this chapter a
second time within a five-year period shall be guilty of a misdemeanor, punishable by a
fine of not more than $1,000 or by imprisonment not to exceed 90 days, or by both such
fine and imprisonment. One hundred dollars of the fine and one day of imprisonment
shall not be suspended or deferred.
(3) Third or Subsequent Offense. Every person who violates any of the provisions of this
chapter a third or more times within a five-year period shall be guilty of a misdemeanor,
punishable by a fine of not more than $1,000 or by imprisonment not to exceed 90 days,
or by both such fine and imprisonment. Five hundred dollars of the fine and five days’
imprisonment shall not be suspended or deferred.
9.56.090 Unlawful camping.
It shall be unlawful for any person to camp, occupy camp facilities or use camp paraphernalia in
the following areas, except as otherwise provided by ordinance or as permitted pursuant to AMC
9.56.130:
(1) Any park;
(2) Any street;
(3) Any publicly owned parking lot or publicly owned area, improved or unimproved; or
(4) On private property, without prior written permission from the owner or occupant.
9.56.100 Storage of personal property in public places.
It shall be unlawful for any person to store personal property, including camp facilities and camp
paraphernalia, in the following areas, except as otherwise provided by ordinance or as permitted
pursuant to AMC 9.56.130:
(1) Any park;
(2) Any street;
(3) Any publicly owned parking lot or publicly owned area, improved or unimproved.
(4) On private property, without prior written permission from the owner or occupant.
9.56.110 Penalty for camping violations.
Violation of any of the provisions of this chapter is a misdemeanor, and shall be punished as
follows:
(1) First Offense. Any person violating any of the provisions of this chapter shall, upon
conviction of such violation, be punished by a fine of not more than $1,000 or by
imprisonment not to exceed 90 days, or by both such fine and imprisonment.
(2) Second Offense. Every person who violates any of the provisions of this chapter a
second time within a five-year period shall be guilty of a misdemeanor, punishable by a
fine of not more than $1,000 or by imprisonment not to exceed 90 days, or by both such
fine and imprisonment. One hundred dollars of the fine and one day of imprisonment
shall not be suspended or deferred.
ORDINANCE NO. 2014-XXX 6
(3) Third or Subsequent Offense. Every person who violates any of the provisions of this
chapter a third or more times within a five-year period shall be guilty of a misdemeanor,
punishable by a fine of not more than $1,000 or by imprisonment not to exceed 90 days,
or by both such fine and imprisonment. Five hundred dollars of the fine and five days’
imprisonment shall not be suspended or deferred.
9.56.120 Parked recreational vehicles exempt.
The provisions of AMC sections 9.56.090 through 9.56.100 shall not apply to recreational
vehicles parked on any residential street for a period of not greater than 24 hours. For purposes
of this chapter, “recreational vehicle” means a travel trailer, motor home, truck camper, or
camping trailer that is primarily designed and used as temporary living quarters, is either self-
propelled or mounted on or drawn by another vehicle, is transient, is not occupied as a primary
residence, and is not immobilized or permanently affixed to a mobile home lot; provided, that
recreational vehicles not owned by the owner or tenant of real property may park on the real
property of another for a period not exceeding 14 consecutive days in a one-year period.
9.56.130 Permit.
(1) The chief of police or his or her designee is authorized to permit persons to camp, occupy
camp facilities, use camp paraphernalia, or store personal property in parks, streets, or any
publicly owned parking lot or publicly owned area, improved or unimproved, in the city of
Arlington.
(2) The chief of police or his or her designee shall approve a permit as provided under this
section when, from a consideration of the application and from such other information as may
otherwise be obtained, the chief or his or her designee finds that:
(a) Adequate sanitary facilities are provided and accessible at or near the camp site;
(b) Adequate trash receptacles and trash collection is to be provided;
(c) The camping activity will not unreasonably disturb or interfere with the peace,
comfort and repose of private property owners; and
(d) The camping activity is not reasonably likely to cause injury to persons or property, to
provoke disorderly conduct or create a disturbance.
(3) The chief of police or his or her designee is authorized to promulgate rules and regulations
regarding the implementation and enforcement of this chapter.
(4) No permit shall be issued for a period of time in excess of seven calendar days.
(5) Any person denied a permit may appeal the denial to city council. Notice of appeal must be
in writing, and filed with the city clerk within seven calendar days from the date notice of the
denial is received.
Section 3. Severability. If any provision, section, or part of this ordinance shall be
adjudged to be invalid or unconstitutional, such adjudication shall not affect the validity of the
ordinance as a whole or any section, provision or part thereof not adjudged invalid or
unconstitutional.
ORDINANCE NO. 2014-XXX 7
Section 4. Effective Date. This ordinance shall be effective five days from its adoption
and publication as required by law.
PASSED BY the City Council and APPROVED by the Mayor this _____ day of
_______________, 2014.
CITY OF ARLINGTON
Barbara Tolbert, Mayor
Attest:
Kristin Banfield, City Clerk
Approved as to form:
Steven J. Peiffle
City Attorney