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HomeMy WebLinkAboutOrdinance 2015-013 Bond Fire Apparatus CITY OF ARLINGTON, WASHINGTON ORDINANCE NO. 2015-013 AN ORDINANCE of the City of Arlington, Washington, establishing a line of credit and providing for the issuance and sale of a limited tax general obligation bond in the aggregate principal amount of not to exceed $1,500,000 to evidence the line of credit to be used to purchase equipment; and fixing the form, covenants and terms of the bond. 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) "Authorized Officer" means the City Administrator or Finance Director. (b) "Bank"means Cashmere Valley Bank. (c) "Bond"means the"City of Arlington, Washington Limited Tax General Obligation Bond, 2015" authorized by this ordinance. (d) "Bond Account" means the Limited Tax General Obligation Bond Account, 2015, of the City created for the payment of the principal of and interest on the Bond. (e) "Bond Register" means the registration records for the Bond maintained by the Bond Registrar. (f) "Bond Registrar" means the City Finance Director, whose duties include registering and authenticating the Bond,maintaining the Bond Register,transferring ownership of the Bond, and paying the principal of and interest on the Bond. (g) "City" means the City of Arlington, Washington, a municipal corporation duly organized and existing under the laws of the State of Washington. (h) "City Council" means the legislative authority of the City, as duly and regularly constituted from time to time. (i) "Code" means the United States Internal Revenue Code of 1986, as amended, and applicable rules and regulations promulgated thereunder. (j) "Date of Delivery"means the date of the delivery of the Bond to the Bank. (k) "Interest Rate" means 65.01% of the previous monthly average of the 5-year interest rate swap as published in the Selected Interest Rates — H.15 release by the Board of ORDINANCE NO. 2015-013 - 1 - 51450634.2 Governors of the Federal Reserve System, plus 1.45%. At the end of the fifth year of the Bond, the Interest Rate will reset based on the above formula. (1) "Outstanding Principal Balance of the Bond"means the aggregate of all funds that the City has drawn from the Bank pursuant to the Bond less the aggregate of all principal payments on the Bond made by the City. (m) "Proposal" means an offer to purchase the Bond, setting forth certain terms and conditions of the issuance, sale and delivery of the Bond. (n) "Request for Draw" means a written request by an Authorized Officer for a draw from the line of credit authorized to be established by this ordinance. Section 2. Findings and Determinations. The City takes note of the following facts and makes the following findings and determinations: (a) Authority and Description of the Project. The City is in need of two firefighting apparatus (the "Acquisitions"). The City Council therefore finds that it is in the best interests of the City to carry out the Acquisitions. (b) Plan of Financing. Pursuant to applicable law, including without limitation chapters 35.37, 39.36, 39.44 and 39.46 RCW, the City is authorized to issue general obligation bonds for the purpose of financing the Acquisitions. The total expected cost of the Acquisitions is approximately $1,500,000, which is expected to be made up of proceeds of the Bond. (c) Debt Capacity. The maximum amount of indebtedness authorized by this ordinance is $1,500,000. Based on the following facts, this amount is to be issued within the amount permitted to be issued by the City for general municipal purposes without a vote: (1) The assessed valuation of the taxable property within the City as ascertained by the last preceding assessment for City purposes for collection in the calendar year 2015 is $2,003,794,121. (2) As of December 31, 2014, the City has limited tax general obligation indebtedness, consisting of leases and conditional sales contracts outstanding in the principal amount of$17,810,962 (including the full principal amount of the City's Limited Tax General Obligation Bond,2014),which is incurred within the limit of up to 1'/z%of the value of the taxable property within the City permitted for general municipal purposes without a vote. (3) As of June 1, 2015, the City has no unlimited tax general obligation indebtedness outstanding. Section 3. Authorization of the Bond; Payment, Registration and Transfer. In order to finance the Acquisitions, the City shall establish a non-revolving line of credit and issue and sell a bond to evidence such line. The Bond shall be designated the "City of Arlington, Washington Limited Tax General Obligation Bond, 2015" and issued in the denomination of not to exceed ORDINANCE NO. 2015-013 - 2 - 514506342 $1,500,000 (the "Bond"). The Bond shall be dated the date of delivery to the Bank (the "Date of Delivery"). It is expected that the City will make a draw of approximately$784,765 on the closing date of the Bond and a subsequent draw on or about October 2015, upon delivery of the Acquisitions. Additional draws may be required if changes for the timing of the Acquisitions are needed. Draws can be made on the Bond within 12 months from the Date of Delivery. The Bond will bear interest at the Interest Rate. Each draw pursuant to a Request for Draw on the Bond shall bear interest at the Interest Rate at the time of the draw. Interest on the Bond shall accrue from the date money is drawn, pursuant to a Request for Draw, until paid and shall be computed on the principal amount outstanding on the basis of a 360-day year, of 12 30-day months. Interest on the Bond shall be repaid in semi-annual installments, beginning December 1, 2015, and every six months thereafter, to and including the maturity date of June 1, 2025 (the "Maturity Date"). Principal on the Bond shall be repaid in semi-annual installments, beginning approximately six months after the final draw on the Bond, expected to be October 2015. The amortization schedule of interest and principal will be created after the final draw so that amortization payments will be in approximately equal semi-annual installments due on dates as agreed to by the City and the Bank. The amortization schedule will be adjusted at the end of the fifth year following the Date of Delivery to again reflect approximately equal semi-annual payments. The Outstanding Principal Balance of the Bond on any particular day shall be the aggregate of all funds which the City has drawn from the date of the Bond to that day less the aggregate of all principal payments made by the City on or before that day. Interest on a particular principal amount so advanced shall be determined from the date of the draw of Bond proceeds pursuant to a Request for Draw by the City. The Bond shall be issued in fully registered form. Both principal of and interest on the Bond shall be payable in lawful money of the United States of America by check, warrant, wire transfer or automatic clearinghouse funds,to the registered owner of the Bond at the address shown on the Bond Register. A Request for Draw pursuant to the Bond may be made on any business day by an Authorized Officer in writing. A Request for Draw made prior to 11:00 a.m. and confirmed by the Bank will be funded on that business day. The City hereby delegates to the Authorized Officers authority to make a written Request for Draw pursuant to this ordinance. The Bank shall incur no liability to the City or to any other person in acting upon any written communication which the Bank believes in good faith to have been given by an official authorized to borrow on behalf of the City, or otherwise acting in good faith in making advances pursuant to this ordinance. Bond proceeds shall be deposited into the appropriate City account determined by an Authorized Officer. The Bond may be assigned or transferred only in whole and only if endorsed in the manner provided thereon and surrendered to the Bond Registrar, subject to the Bank's representations in a certificate to be provided on the Date of Delivery. Any such transfer shall be without cost to the owner or transferee and shall be noted in the Bond Register. The Bond may only be assigned by ORDINANCE NO. 2015-013 - 3 - 51450634.2 the Bank to another qualified investor satisfying the requirements set forth in the certificate to be signed by the Bank on the Date of Delivery. Section 4. Form and Execution of the Bond. (a) Form of the Bond; Signatures and Seal. The Bond shall be prepared in a form consistent with the provisions of this ordinance and Washington law. The Bond shall be signed by the Mayor and the City Clerk,either or both of whose signatures may be manual or in facsimile, and the seal of the City or a facsimile reproduction thereof shall be impressed or printed thereon. If any officer whose manual or facsimile signature appears on the Bond ceases to be 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, the Bond nevertheless may be authenticated, issued and delivered and, when authenticated,issued and delivered, shall be as binding on the City as though that person had continued to be an officer of the City authorized to sign bonds. The Bond also may be signed on behalf of the City by any person who, on the actual date of signing of the Bond, is an officer of the City authorized to sign bonds, although he or she did not hold the required office on its Date of Delivery. (b) Authentication. Only the Bond bearing a Certificate of Authentication in substantially the following form, manually signed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance: "Certificate of Authentication. This Bond is the fully registered City of Arlington, Washington, Limited Tax General Obligation Bond, 2015." 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 5. Bond Account. A special fund or account of the City known as the"Limited Tax General Obligation Bond Account, 2015" (the "Bond Account") is hereby authorized to be created and shall be drawn upon for the sole purpose of paying and securing the payment of the Bond. The City hereby covenants and agrees to deposit in the Bond Account proceeds of bonds, a refunding note, loans,taxes and/or grants, if any,received by the City for the Acquisitions, in an amount sufficient to pay the principal of and interest on the Bond as the same becomes due. Section 6. Prepayment. The City reserves the right to prepay principal of the Bond in advance of the scheduled payment, in whole or in part, at any time, with no prepayment penalty. The City will notify the Bank at least 15 days in advance of its intent to prepay. At any time there is a partial prepayment, the remaining installment payments shall be recalculated as mutually agreed upon, in writing, by the City and the Bank to reflect either a reduction in the installment payment amount, or the earlier maturity date of the Bond. Within seven business days of a partial prepayment, the Bank shall provide to the City and Bond Registrar a recalculated payment schedule. Section 7. Pledge of Taxes. The Bond constitutes a general indebtedness of the City and is payable from tax revenues of the City and such other money as is lawfully available and pledged by the City for the payment of principal of and interest on the Bond. For as long as the Bond is outstanding, the City irrevocably pledges that it shall, in the manner provided by law within the constitutional and statutory limitations provided by law without the assent of the voters, ORDINANCE NO. 2015-013 - 4 - 51450634 2 include in its annual property tax levy amounts sufficient, together with other money that is lawfully available, to pay principal of and interest on the Bond as the same become due. The full faith, credit and resources of the City are pledged irrevocably for the prompt payment of the principal of and interest on the Bond and such pledge shall be enforceable in mandamus against the City. Section 8. Tax Covenants. (a) Tax Certificate. The City hereby covenants that it will not make any use of the proceeds of sale of the Bond or any other funds of the City which may be deemed to be proceeds of such Bond pursuant to Section 148 of the Code and the applicable regulations thereunder which will cause the Bond to be an "arbitrage bond" within the meaning of such section and such regulations. The City will comply with the requirements of Section 148 of the Code (or any successor provision thereof applicable to the Bond) and the applicable regulations thereunder through the term of the Bond. The City further covenants that it will not take any action or permit any action to be taken that would cause the Bond to constitute a "private activity bond" under Section 141 of the Code. (b) Post-Issuance Compliance. The Finance Director is authorized and directed to review and revise 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 draws on the Bond from being included in gross income for federal tax purposes. (c) Designation of the Bond as a "Qualified Tax-Exempt Obligation." The City designates the Bond as a "qualified tax-exempt obligation" for the purposes of Section 265(b)(3) of the Code, and makes the following findings and determinations: (1) the Bond does not constitute a "private activity bond" within the meaning of Section 141 of the Code; (2) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds and other obligations not required to be 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 Bond is issued will not exceed $10,000,000; and (3) the amount of tax-exempt obligations, including the Bond, 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 Bond is issued does not exceed $10,000,000. Section 9. Sale of the Bond. The sale of the Bond to the Bank, under the terms and conditions of this ordinance and the Proposal to purchase the Bond is hereby approved and confirmed. The Bank will not charge a fee to the City for this Bond. ORDINANCE NO. 2015-013 - 5 - 51450634 2 Section 10. Reporting Requirements. While the Bond is outstanding, the City shall submit its annual financial reports to the Bank along with such additional information as the Bank may reasonably request. Section 11. Governing Law. The Bond shall be governed and interpreted according to the laws of Washington. Nothing in this paragraph shall be construed to limit or otherwise affect any rights or remedies of the Bank under federal law. Section 12. General Authorization and Ratification. The Mayor, City Administrator, Finance Director and other appropriate officers of the City are severally authorized to take such actions and to execute such documents as in their judgment may be necessary or desirable to carry out the transactions contemplated in connection with this ordinance, and to do everything necessary for the prompt delivery of the Bond to the Bank thereof and for the proper application, use and investment of the proceeds of the Bond. All actions taken prior to the effective date of this ordinance in furtherance of the purposes described in this ordinance and not inconsistent with the terms of this ordinance are ratified and confirmed in all respects. Section 13. 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 14. 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 6th day of July, 2015. Barbara Tolbert, Mayor ATTEST: t , i Kristi Banfie , City Clerk APPROVE AS TO FORM: Stev Peif e, ' y ey ORDINANCE NO. 2015-013 - 6 - 51450634 2 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. 2015-013 (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 6, 2015, 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 9, 2015. 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 7, 2015. CITY OF ARLINGTON, WASHINGTON a Kristi Ban field, City Clerk 514506342