HomeMy WebLinkAbout2013-007CITY OF ARLINGTON, WASHINGTON
ORDINANCE NO.2013-007
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 June 3, 2013
This document prepared by:
Foster Pepper PLLC
1111 Third Avenue, Suite 3400
Seattle, Washington 98101
(206) 447-4400
512930982
Section 1.
Section 2.
Section 3.
Section 4.
Section 5.
Section 6.
Section 7.
Section 8.
Section 9.
Section 10.
Section 11.
Section 12.
Section 13.
Section 14.
Section 15.
Section 16.
Section 17.
Section 18.
Section 19.
Section 20.
Section 21.
Section 22.
Section 23.
TABLE OF CONTENTS*
Definitions...............................................................................................................1
Findings and Determinations...................................................................................4
Authorization of Bonds............................................................................................5
Description of the Bonds; Appointment of Designated Representative ..................5
Bond Registrar; Registration and Transfer of Bonds..............................................7
Form and Execution of Bonds.................................................................................8
Paymentof Bonds....................................................................................................8
BondAccount..........................................................................................................8
Redemption Provisions and Purchase of Bonds......................................................9
FailureTo Pay Bonds............................................................................................10
Pledgeof Taxes......................................................................................................10
T !Y , r� • , rr � cc� i r � m r.
Obligations."....................................................
Refunding or Defeasance of the Bonds ...........
Refunding of the Refunded Bonds ..................
Call for Redemption of the Refunded Bonds..
Findings with Respect to Refunding ................
Sale and Delivery of the Bonds .......................
Official Statement ............................................
Continuing Disclosure .....................................
Supplemental and Amendatory Ordinances ....
General Authorization and Ratification...........
Severability......................................................
Effective Date of Ordinance .............................
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*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.
512930982
CITY OF ARLINGTON, WASHINGTON
ORDINANCE NO. 2013-007
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, 2013, 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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(h) "Bond Register" means the books or records maintained by the Bond Registrar for
the purpose of identifying ownership of the each Bond.
(i) "Bond Registrar" means the Fiscal Agent, or any successor bond registrar
selected by the City.
0) "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.
(1) "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 (if the refunding
bonds are issued for savings purposes.
(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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(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 June 1, 2014, and the call, payment, and
redemption on June 1, 2014, 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 I5c2-12" 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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(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.
6j) "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.
(11) "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 2013 is $1,727,872,805.
(2) As of May 1, 2013, the City has limited tax general obligation
indebtedness, consisting of bonds, notes and conditional sales contracts
outstanding in the principal amount of $19,916,221 which is incurred
within the limit of up to 11/z% of the value of the taxable property within
the City permitted for general municipal purposes without a vote.
(3) As of May 1, 2013, 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 December 1, 2013.
(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 5.0%, and the true interest cost to the City for each Series of Bonds may not exceed
4.0%.
(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 10'/z 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, and the underwriters' discount may
not exceed 0.70% of the stated principal amount of that Series.
Bonds.
(i) Savings. There is a minimum net present value savings of 5.0% of the Refunded
0) 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, 2013." 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 prices) 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 are not "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 June 1, 2014, 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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512930982
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 refunding portion of 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 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 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, 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 that 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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(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, 2013; 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.
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(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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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 3`d day of June, 2013.
Mayor
ATTEST:
ROO—, I V�—'- -
APPROVED AS TO FORM:
Bond Counsel
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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. 2013-007 (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 June 3, 2013, 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 June 6, 2013.
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: June 4, 2013.
CITY OF ARLINGTON, WASHINGTON
City Cl k
512930982
SUMMARY OF ORDINANCE ADOPTION
You are hereby notified that on June 3, 2013, the City Council of the City of Arlington,
Washington, did adopt Ordinance No. 2013-007 entitled,
"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."
This ordinance is effective five days from its passage and publication.
The full text of the ordinance is available to interested persons and will be mailed upon
request.
Kristi Banfield
City Cie k
City of Arlington