Loading...
HomeMy WebLinkAbout3212CITY OF PORT ANGELES, WASHINGTON LIMITED TAX GENERAL OBLIGATION BONDS, 2005 $3,230,000 ORDINANCE NO. 3212 AN ORDINANCE of the City of Port Angeles, Washington, providing for the issuance and sale of limited tax general obligation bonds of the City in the aggregate principal amount of $3,230,000 to finance the acquisition, construction and equipping of utility improvements within the City's western urban growth annexation area and to pay costs of issuance of such bonds; providing the date, form, terms and maturities of the bonds; providing for the annual levy of taxes to pay the principal of and interest on the bonds; and authorizing the sale of the bonds. Passed: August 2, 2005 Prepared By PRESTON GATES & ELLIS LLP 925 Fourth Avenue, Suite 2900 Seattle, Washington 98104 -1158 (206) 623-7580 TABLE OF CONTENTS Page Section 1. Definitions 1 Section 2. Findings 3 Section 3. Purpose, Authorization and Description of Bonds 3 Section 4. Registration, Exchange and Payments 4 Section 5. Redemption; Purchase 7 Section 6. Lost or Destroyed Bonds 8 Section 7. Execution of Bonds 8 Section 8. Form of Bonds 9 Section 9. Bond Fund 12 Section 10. Pledge of Taxation and Credit 12 Section 11. Tax Covenant; Special Designation 13 Section 12. Defeasance 13 Section 13. Project Fund; Application of Bond Proceeds 14 Section 14. Official Statement 14 Section 15. Sale of the Bonds 14 Section 16. Bond Insurance 14 Section 17. Undertaking for Ongoing Disclosure 17 Section 18. General Authorization, Ratification of Prior Acts 19 Section 19. Severability 19 Section 20. Effective Date 19 -i- P: \DOT\DOT1 PF 08/02/05 ORDINANCE NO. 3212 AN ORDINANCE of the City of Port Angeles, Washington, providing for the issuance and sale of limited tax general obligation bonds of the City in the aggregate principal amount of $3,230,000 to finance the acquisition, construction and equipping of various utility improvements within the City's western urban growth annexation area and to pay costs of issuance of such bonds; providing the date, form, terms and maturities of the bonds; providing for the annual levy of taxes to pay the principal of and interest on the bonds; and authorizing the sale of the bonds. WHEREAS, the City of Port Angeles, Washington (the "City ") has annexed approximately 358 acres within the western urban growth area of the City and wishes to acquire, construct and equip various utility improvements to serve this area (as further described herein, the "Project "); and WHEREAS, the Council has determined that it is in the best interest of the City and its residents to finance costs of the Project by the issuance and sale of limited tax general obligation bonds of the City in the aggregate principal amount of $3,230,000 (the "Bonds "); and WHEREAS, Seattle- Northwest Securities Corporation, Seattle, Washington (the "Underwriter ") has offered to purchase the Bonds on the terms and conditions set forth in such offer and in this ordinance; and WHEREAS, it appears to the Council that it is in the best interests of the City that the Bonds be sold to the Underwriter on the terms set forth in its purchase offer and in this ordinance; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PORT ANGELES, WASHINGTON, DO ORDAIN, as follows: Section 1. Definitions. As used in this ordinance, the following words shall have the following meanings, unless a different meaning clearly appears from the context: "Bond Fund" means the "Limited Tax General Obligation Bond Redemption Fund, 2005" established pursuant to Section 9 hereof. "Bond Insurance Policy" means the municipal bond insurance policy issued by the Insurer insuring the payment when due of the principal of and interest on the Bonds as provided therein. "Bond Register" means the registration records for the Bonds maintained by the Bond Registrar. "Bond Registrar" means the fiscal agency of the State of Washington in either Seattle, Washington, or New York, New York, whose duties include registering and authenticating the Bonds, maintaining the Bond Register, transferring ownership of the Bonds, and paying the principal of and interest on the Bonds. "Bonds" means the $3,230,000 aggregate principal amount of City of Port Angeles, Washington, Limited Tax General Obligation Bonds, 2005, issued pursuant to this ordinance. "City" means the City of Port Angeles, Washington, a municipal corporation duly organized and existing under the laws of the State of Washington. "City Clerk" means the duly qualified, appointed and acting City Clerk of the City or any other officer who succeeds to the duties now delegated to that office. "Code" means the Internal Revenue Code of 1986, as amended, together with corresponding and applicable final, temporary or proposed regulations and revenue rulings issued or amended with respect thereto by the United States Treasury Department or the Internal Revenue Service, to the extent applicable to the Bonds. "Council" means the duly constituted City Council as the general legislative authority of the City. "DTC" means The Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York, as depository for the Bonds pursuant to Section 4 hereof, or any successor depository for the Bonds. "Finance Director" means the duly qualified, appointed and acting Finance Director of the City or any other officer who succeeds to the duties now delegated to that office. "Insurer" means XL Capital Assurance Inc., a stock insurance company incorporated under the laws of the State of New York, or any successor thereto or assignee thereof, as issuer of the Bond Insurance Policy. "Letter of Representations" means the Blanket Issuer Letter of Representations from the City to DTC dated September 23, 1998. "MSRB" means the Municipal Securities Rulemaking Board or any successor to its functions. "NRMSIR" means a nationally recognized municipal securities information repository. -2- 08/02/05 "Project" means the acquisition, construction and equipping of utility improvements described in Section 2 of this ordinance. "Project Fund" means the Western Annexation Project Fund created pursuant to Section 13 hereof and into which the Bond proceeds shall be deposited to pay and reimburse costs of the Project. "Registered Owner" means the person in whose name a Bond is registered on the Bond Register. For so long as the City utilizes the book -entry system for the Bonds, DTC shall be deemed to be the Registered Owner. "Rule" means the SEC's Rule 15c2 -12 under the Securities Exchange Act of 1934. "SEC" means the Securities and Exchange Commission. "SID" means a state information depository for the State of Washington (if one is created). "Underwriter" means Seattle- Northwest Securities Corporation, Seattle, Washington. Section 2. Findings. The Council hereby finds that it is in the public interest for the City to acquire, construct and equip the following utility improvements (the "Project "): • water line extensions to provide domestic and fire flow service; • electric utility improvements to provide residential, commercial and industrial service; • sanitary sewer line extensions; and • conduit for fiber optic service. The cost of the Project, including costs of issuance of the Bonds, is estimated to be $3,230,000, of which amount approximately $3,230,000 shall be provided from the proceeds of sale of the Bonds. Section 3. Purpose, Authorization and Description of Bonds. For the purposes of providing funds to pay and reimburse costs of the Project and to pay costs of issuing the Bonds, the City shall issue and sell the Bonds in the aggregate principal amount of $3,230,000. The Bonds shall be designated the "City of Port Angeles, Washington, Limited Tax General Obligation Bonds, 2005," shall be dated as of the date of their delivery to the Underwriter, shall be fully registered as to both principal and interest, shall be in the denomination of $5,000 each or any integral multiple thereof, provided that no Bond shall represent more than one maturity, shall be numbered separately in such manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification and control, and shall bear interest payable on February 1, 2006, and semiannually thereafter on the first days of February and August. Interest on the Bonds shall be calculated based on a 360 -day year of twelve 30 -day months. The Bonds shall bear interest at the following rates and mature on August 1 in the following years and in the following amounts: -3- 08/02/05 Maturity Year (August 1) Principal Amount Interest Rate 2007 $ 115,000 3.00% 2008 120,000 4.00 2009 125,000 4.00 2010 130,000 4.00 2011 135,000 4.00 2012 140,000 4.00 2013 145,000 4.00 2014 155,000 4.00 2015 160,000 4.00 2016 165,000 4.50 2017 175,000 3.95 2018 180,000 4.05 2019 185,000 4.10 2020 195,000 4.15 2021 205,000 4.20 2022 210,000 4.25 2023 220,000 4.30 2024 230,000 4.35 2025 240,000 4.40 Section 4. Registration Exchange and Payments. (a) Registrar /Bond Register. The City hereby adopts the system of registration approved by the Washington State Finance Committee, which utilizes the fiscal agencies of the State of Washington in Seattle, Washington, and New York, New York, as registrar, authenticating agent, paying agent and transfer agent (collectively, the "Bond Registrar "). The Bond Registrar shall keep, or cause to be kept, at its principal corporate trust office, sufficient records for the registration and transfer of the Bonds (the "Bond Register "), which shall be open to inspection by the City. The Bond Registrar is authorized, on behalf of the City, to authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of such Bonds and this ordinance 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 Certificate of Authentication on the Bonds. (b) Registered Ownership. The City and the Bond Registrar may deem and treat the Registered Owner of each Bond as the absolute owner for all purposes, and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. Payment of any such Bond shall be made only as described in Section 4(h) hereof, but such registration may be transferred as herein provided. All such payments made as described in Section 4(h) shall be valid and shall satisfy the liability of the City upon such Bond to the extent of the amount so paid. -4- 08/02/05 (c) DTC Acceptance /Letter of Representations. The Bonds shall initially be held in fully immobilized form by DTC acting as depository. To induce DTC to accept the Bonds as eligible for deposit at DTC, the City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the "Letter of Representations "). Neither the City nor the Bond Registrar will have any responsibility or obligation to DTC participants or the persons for whom they act as nominees with respect to the Bonds for the accuracy of any records maintained by DTC or any DTC participant, the payment by DTC or any DTC participant of any amount in respect of the principal of or interest on Bonds, any notice that is permitted or required to be given to Registered Owners under this resolution (except such notices as shall be required to be given by the City to the Bond Registrar or to DTC), the selection by DTC or any DTC participant of any person to receive payment in the event of a partial redemption of the Bonds, or any consent given or other action taken by DTC as the Registered Owner. For so long as any Bonds are held in fully immobilized form hereunder, DTC or its successor depository shall be deemed to be the Registered Owner for all purposes, and all references in that resolution to the Registered Owners shall mean DTC or its nominee and shall not mean the owners of any beneficial interest in any Bonds. (d) Use of Deposawy. (i) The Bonds shall be registered initially in the name of Cede & Co., as nominee of DTC, with a single Bond for each maturity in a denomination equal to the total principal amount of such maturity. Registered ownership of such immobilized Bonds, or any portions thereof, may not thereafter be transferred except (A) to any successor of DTC or its nominee, provided that any such successor shall be qualified under any applicable laws to provide the service proposed to be provided by it; (B) to any substitute depository appointed by the City pursuant to subsection (ii) below or such substitute depository's successor; or (C) to any person as provided in subsection (iv) below. (ii) Upon the resignation of DTC or its successor (or any substitute depository or its successor) from its functions as depository or a determination by the City to discontinue the system of book entry transfers through DTC or its successor (or any substitute depository or its successor), the City may appoint a substitute depository. Any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it. (iii) In the case of any transfer pursuant to clause (A) or (B) of subsection (i) above, the Bond Registrar shall, upon receipt of all outstanding Bonds, together with a written request on behalf of the City, issue a single new Bond for each maturity then outstanding, registered in the name of such successor or substitute depository, or its nominee, all as specified in such written request of the City. (iv) In the event that (A) DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained, or (B) the City determines that it is in the best interest of the beneficial owners of the Bonds that the Bonds be provided in certificated form, the ownership -5- 08/02/05 of such Bonds may then be transferred to any person or entity as herein provided, and shall no longer be held in fully immobilized form. The City shall deliver a written request to the Bond Registrar, together with a supply of definitive Bonds in certificated form, to issue Bonds in any authorized denomination. Upon receipt by the Bond Registrar of all then outstanding Bonds together with a written request on behalf of the City to the Bond Registrar, new Bonds shall be issued in the appropriate denominations and registered in the names of such persons as are provided in such written request. (e) Transfer or Exchange of Registered Ownership; Change in Denominations. The registered ownership of any Bond may be transferred or exchanged, but no transfer of any Bond shall be valid unless it is surrendered to the Bond Registrar with the assignment form appearing on such Bond duly executed by the Registered Owner or such Registered Owner's duly authorized agent in a manner satisfactory to the Bond Registrar. Upon such surrender, the Bond Registrar shall cancel the surrendered Bond and shall authenticate and deliver, without charge to the Registered Owner or transferee, a new Bond (or Bonds at the option of the new Registered Owner) of the same date, maturity and interest rate and for the same aggregate principal amount in any authorized denomination, naming as Registered Owner the person or persons listed as the assignee on the assignment form appearing on the surrendered Bond, in exchange for such surrendered and canceled Bond. Any Bond may be surrendered to the Bond Registrar and exchanged, without charge, for an equal aggregate principal amount of Bonds of the same date, maturity and interest rate, in any authorized denomination. The Bond Registrar shall not be obligated to transfer or exchange any Bond during a period beginning at the opening of business on the 15th day of the month next preceding any interest payment date and ending at the close of business on such interest payment date, or, in the case of any proposed redemption of the Bonds, after the mailing of notice of the call of such Bonds for redemption. (f) Bond Registrar's Ownership of Bonds. The Bond Registrar may become the Registered Owner of any Bond 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 member of, or in any other capacity with respect to, any committee formed to protect the rights of the Registered Owners of the Bonds. (g) Registration Covenant. The City covenants that, until all Bonds have been surrendered and canceled, it will maintain a system for recording the ownership of each Bond that complies with the provisions of Section 149 of the Code. (h) Place and Medium of Payment. Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America. For so long as all Bonds are in fully immobilized form, payments of principal and interest shall be made as provided in accordance with the operational arrangements of DTC referred to in the Letter of Representations. In the event that the Bonds are no longer in fully immobilized form, interest on the Bonds shall be paid by check or draft mailed to the Registered Owners at the addresses for such Registered Owners appearing on the Bond Register on the 15th day of the month preceding the interest payment date, and principal of the Bonds shall be payable upon presentation and surrender of such Bonds by the Registered Owners at the principal office of -6- 0802/05 the Bond Registrar; provided, however, that if so requested in writing by the Registered Owner of at least $1,000,000 principal amount of Bonds, interest will be paid by wire transfer on the date due to an account with a bank located within the United States. Section 5. Redemption; Purchase. (a) Optional Redemption. The Bonds maturing on or prior to August 1, 2015, are not subject to redemption prior to their scheduled maturity. The Bonds maturing on and after August 1, 2016, are subject to redemption at the option of the City on and after August 1, 2015, in whole or in part on any date (and if in part, with maturities to be selected by the City), at a price of par plus accrued interest, if any, to the date of redemption. (b) Partial Redemption. If less than all of the principal amount of any Bond is redeemed, upon surrender of such Bond at the principal office of the Bond Registrar, there shall be issued to the registered owner, without charge, for the then unredeemed balance of the principal amount, a new Bond or Bonds, at the option of the registered owner, of like maturity and interest rate in any authorized denomination. (c) Notice of Redemption. Written notice of any redemption of Bonds shall be given by the Bond Registrar on behalf of the City by first class mail, postage prepaid, not less than 30 days nor more than 60 days before the redemption date to the registered owners of Bonds that are to be redeemed at their last addresses shown on the Bond Register. So long as the Bonds are in book -entry form, notice of redemption shall be given as provided in the Letter of Representations. The Bond Registrar shall provide additional notice of redemption (at least 30 days) to each NRMSIR and SID, if any, in accordance with Section 14. The requirements of this section shall be deemed complied with when notice is mailed, whether or not it is actually received by the owner. Each notice of redemption shall contain the following information: (1) the redemption date, (2) the redemption price, (3) if less than all outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the Bonds to be redeemed, (4) that on the redemption date the redemption price will become due and payable upon each Bond or portion called for redemption, and that interest shall cease to accrue from the redemption date, (5) that the Bonds are to be surrendered for payment at the principal office of the Bond Registrar, (6) the CUSIP numbers of all Bonds being redeemed, (7) the dated date of the Bonds, (8) the rate of interest for each Bond being redeemed, (9) the date of the notice, and (10) any other information needed to identify the Bonds being redeemed. Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. -7- 08/02/05 (d) Effect of Redemption. Unless the City has revoked a notice of redemption, the City shall transfer to the Bond Registrar amounts that, in addition to other money, if any, held by the Bond Registrar, will be sufficient to redeem, on the redemption date, all the Bonds to be redeemed. From the redemption date interest on each Bond to be redeemed shall cease to accrue. (e) Amendment of Notice Provisions. The foregoing notice provisions of this section, including but not limited to the information to be included in redemption notices and the persons designated to receive notices, may be amended by additions, deletions and changes in order to maintain compliance with duly promulgated regulations and recommendations regarding notices of redemption of municipal securities. (f) Purchase on Open Market. The City reserves the right to purchase any of the Bonds offered to the City at any price deemed reasonable by the City at any time. Section 6. Lost or Destroyed Bonds. If any Bonds are lost, stolen or destroyed, the Bond Registrar may authenticate and deliver a new Bond or Bonds of like amount, maturity and tenor to the Registered Owner upon the owner paying the expenses and charges of the Bond Registrar and the City in connection with preparation and authentication of the replacement Bond or Bonds and upon his or her filing with the Bond Registrar and the City evidence satisfactory to both that such Bond or Bonds were actually lost, stolen or destroyed and of his or her ownership, and upon furnishing the City and the Bond Registrar with indemnity satisfactory to both. Section 7. Execution of Bonds. The Bonds shall be executed on behalf of the City with the manual or facsimile signature of the Mayor, attested by the manual or facsimile signature of the City Clerk, and shall have the seal of the City impressed or imprinted thereon. In case either or both of the officers who have signed or attested any of the Bonds cease to be such officer before such Bonds have been actually issued and delivered, such Bonds shall be valid nevertheless and may be issued by the City with the same effect as though the persons who had signed or attested such Bonds had not ceased to be such officers, and any Bond may be signed or attested on behalf of the City by officers who at the date of actual execution of such Bond are the proper officers, although at the nominal date of execution of such Bond such officer was not an officer of the City. Only Bonds that bear a Certificate of Authentication in the form set forth in Section 8, manually executed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance. Such Certificate of Authentication shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered and are entitled to the benefits of this ordinance. -8- 08/02/05 form: Section 8. Form of Bonds. The Bonds shall be in substantially the following UNITED STATES OF AMERICA NO. $ [STATEMENT OF INSURANCE] STATE OF WASHINGTON CITY OF PORT ANGELES LIMITED TAX GENERAL OBLIGATION BOND, 2005 INTEREST RATE: % MATURITY DATE: REGISTERED OWNER: CEDE & Co. PRINCIPAL AMOUNT: CUSIP NO.: DOLLARS The City of Port Angeles, Washington, a municipal corporation organized and existing under and by virtue of the laws and Constitution of the State of Washington, (the "City "), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount indicated above and to pay interest from , 2005, or the most recent date to which interest has been paid or duly provided for until payment of this bond at the Interest Rate set forth above, payable on February 1, 2006, and semiannually thereafter on the first days of each succeeding February and August. Both principal of and interest on this bond are payable in lawful money of the United States of America. For so long as the Bonds are in fully immobilized form, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of DTC referred to in the Blanket Issuer Letter of Representations from the City to The Depository Trust Company. In the event that the Bonds are no longer in fully immobilized form, interest on this bond shall be paid by check or draft mailed to the Registered Owner at the address appearing on the Bond Register on the fifteenth day of the month preceding the interest payment date, and principal of this bond shall be payable upon presentation and surrender of this bond by the Registered Owner at the principal office at the principal office of the fiscal agency of the State of Washington in either Seattle, Washington, or New York, New York (collectively the "Bond Registrar "). This bond is one of an issue of limited tax general obligation bonds of like date and tenor, except as to number, amount, rate of interest and date of maturity, in the aggregate principal amount of $3,230,000 (the "Bonds "), and is issued pursuant to Ordinance No. (the "Bond Ordinance ") passed by the City Council on August 2, 2005, to finance the acquisition, construction and equipping of utility improvements. The Bonds are subject to optional redemption as provided in the Bond Ordinance. -9- P \DOT\DOT1PF 08/02/05 The City has designated the Bonds as qualified tax- exempt obligations under Section 265(b) of the Internal Revenue Code of 1986, as amended. The City has irrevocably covenanted with the owner of this bond that it will annually include in its budget and levy taxes on all taxable property in the City, within and as part of the property taxes authorized by law to be levied by the City without a vote of the people, in an amount that, together with other lawfully available funds, will be sufficient 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 are hereby irrevocably pledged for the annual levy and collection of such taxes and the prompt payment of such principal and interest. The pledge of taxes for payment of the principal of and interest on the Bonds may be discharged prior to maturity of the Bonds by making provisions for the payment thereof on the terms and conditions set forth in the Bond Ordinance. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication has been manually signed by the Bond Registrar. This Bond is transferable only on the records maintained by the Bond Registrar for that purpose upon the surrender of this Bond by the Registered Owner or his /her duly authorized agent and only if endorsed in the manner provided hereon, and a new fully registered Bond of like principal amount, maturity and interest rate shall be issued to the transferee in exchange. Such exchange or transfer shall be without cost to the Registered Owner or transferee. The City and Bond Registrar may deem the person in whose name this Bond is registered to be the absolute owner for the purpose of receiving payment of the principal of and interest on this Bond and for all other purposes. It is hereby certified that all acts, conditions and things required by the Constitution and statutes of the State of Washington and the ordinances of the City to exist, to have happened, been done and performed precedent to and in the issuance of this Bond have happened, been done and performed and that the issuance of this bond and the bonds of this series does not violate any constitutional, statutory or other limitation upon the amount of bonded indebtedness that the City may incur. -10- P\DOT\DOTIPF 08/02/05 The City has caused this Bond to be executed by the manual or facsimile signature of the Mayor and to be attested by the manual or facsimile signature of the City Clerk, and has caused the seal of the City to be impressed or imprinted on this bond, as of this day of , 2005 ATTEST: City Clerk CITY OF PORT ANGELES, W! GTON By CERTIFICATE OF AUTHENTICATION Mayor This is one of the Limited Tax General Obligation Bonds, 2005, of the City of Port Angeles, Washington, dated , 2005, is described in the Bond Ordinance. WASHINGTON STATE FISCAL AGENCY, as Bond Registrar By Authorized Signatory The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM — as tenants in common TEN ENT — as tenants by the entireties JT TEN — as joint tenants with right of survivorship and not as tenants in common UNIF GIFT (TRANSFERS) MIN ACT - Custodian (Cust) (Minor) under Uniform Gifts (Transfers) to Minors Act (State) Additional abbreviations may also be used, though not in the above list. P \DOT\DOT1 PF 08/02/05 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto PLEASE INSERT SOCIAL, SECURITY OR TAXPAYER IDENTIFICATION NUMBER OF TRANSFEREE (Please print or typewrite name and address, including zip code, of transferee) the within bond and does hereby irrevocably constitute and appoint as attorney -in -fact to transfer said bond on the books kept for registration thereof with full power of substitution in the premises. DATED: SIGNATURE GUARANTEED: NOTICE: Signature(s) must be guaranteed pursuant to law. NOTE: The signature on this Assignment must correspond with the name of the Registered Owner as it appears upon the face of the within bond in every particular, without alteration or enlargement or any change whatever. Section 9. Bond Fund. There is hereby authorized and directed to be created in the office of the Finance Director a special fund to be drawn upon for the purpose of paying the principal of and interest on the Bonds to be known as the "Limited Tax General Obligation Bond Redemption Fund, 2005" (the "Bond Fund "). The Bond Fund shall be drawn upon for the sole purpose of paying the principal of and interest on the Bonds. The taxes hereafter levied for the purpose of paying principal of and interest on the Bonds and other funds to be used to pay the Bonds shall be deposited in the Bond Fund no later than the date such funds are required for the payment of principal of and interest on the Bonds. Money in the Bond Fund not needed to pay the interest or principal next coming due may temporarily be deposited in such institutions or invested in such obligations as may be lawful for the investment of City funds. Any interest or profit from the investment of such money shall be deposited in the Bond Fund. Section 10. Pledge of Taxation and Credit. The City hereby irrevocably covenants for as long as any of the Bonds are outstanding and unpaid that each year it will include in its budget and levy an ad valorem tax on all taxable property in the City, within and as part of the -12- P: \DOT\DOTI PF 08/02/05 property taxes authorized by law to be levied by the City without a vote of the people, in an amount that, together with other lawfully available funds, will be sufficient to pay the principal of and interest on the Bonds as the same shall become due. All of such taxes so collected and any other money to be used for such purposes shall be paid into the Bond Fund. The City hereby irrevocably pledges that a sufficient portion of each annual levy to be levied and collected by the City prior to the full payment of the principal and interest on the Bonds will be and is hereby irrevocably set aside, pledged and appropriated for the payment of the principal of and interest on the Bonds. The full faith, credit and resources of the City are hereby irrevocably pledged for the annual levy and collection of said taxes and for the prompt payment of the principal of and interest on the Bonds as the same shall become due. Section 11. Tax Covenant; Special Designation. The City hereby covenants that it will not make any use of the proceeds of sale of the Bonds or any other funds of the City that may be deemed to be proceeds of the Bonds pursuant to Section 148 of the federal Internal Revenue Code of 1986, as amended, and the applicable regulations thereunder, that will cause the Bonds to be "arbitrage bonds" within the meaning of said section and said regulations. The City will comply with the requirements of Section 148 of the Internal Revenue Code of 1986, as amended (or any successor provision thereof applicable to the Bonds), and the applicable regulations thereunder throughout the term of the Bonds. The City further covenants that it will not take any action or permit any action to be taken that would cause the Bonds to constitute "private activity bonds" under Section 141 of the federal Internal Revenue Code of 1986, as amended. The City hereby designates the Bonds as "qualified tax - exempt obligations" under Section 265(b)(3) of the Code for banks, thrift institutions and other financial institutions. The City does not expect to issue more than $10,000,000 of "qualified tax - exempt obligations" during 2005. Section 12. Defeasance. In the event that the City, in order to effect the payment, retirement or redemption of any Bond, sets aside in the Bond Fund or in another special account, held in trust by a trustee, cash or noncallable government obligations, as such obligations are now or hereafter defined in Chap. 39.53 RCW, or any combination of cash and /or noncallable government obligations, in amounts and maturities which, together with the known earned income therefrom, are sufficient to redeem or pay and retire such Bond in accordance with its terms and to pay when due the interest and redemption premium, if any, thereon, and such cash and /or noncallable government obligations are irrevocably set aside and pledged for such purpose, then no further payments need be made into the Bond Fund for the payment of the principal of and interest on such Bond. The owner of a Bond so provided for shall cease to be entitled to any lien, benefit or security of this ordinance except the right to receive payment of principal, premium, if any, and interest from such special account, and such Bond shall be deemed to be not outstanding under this ordinance. -13- P:DOT\DOTI PF 08/02/05 Within 30 days of any defeasance of Bonds, the Bond Registrar shall provide notice of defeasance of Bonds to Registered Owners and to each NRMSIR and SID, if any, in accordance with Section 17 of this ordinance. Section 13. Project Fund; Application of Bond Proceeds. There is hereby authorized to be created in the office of the Finance Director a special fund of the City known as the Western Annexation Project Fund (the "Project Fund "). Proceeds of the Bonds (except for the accrued interest, which shall be deposited into the Bond Fund) shall be deposited into the Project Fund and used to pay costs of the Project and costs of issuance of the Bonds. Money in the Project Fund shall be invested as directed by the Finance Director in legal investments for City funds. Section 14. Official Statement. The City approves the preliminary official statement dated July 26, 2005, presented to the Council and ratifies the Underwriter's distribution of the preliminary official statement in connection with the offering of the Bonds. Pursuant to Section (b)(1) of the Rule, the City deems the preliminary official statement final as of its date except for the omission of information dependent upon the pricing of the Bonds and the completion of the purchase contract. The City agrees to cooperate with the Underwriter to deliver or cause to be delivered, within seven business days from the date of the sale of the Bonds and in sufficient time to accompany any confirmation that requests payment from any customer of the Underwriter, copies of a final official statement in sufficient quantity to comply with the rules of the MSRB. The City authorizes the Underwriter to use the official statement, substantially in the form of the preliminary official statement, in connection with the sale of the Bonds. The Mayor and Finance Director are hereby authorized to review and approve on behalf of the City the final Official Statement relative to the Bonds with such additions and changes as may be deemed necessary or advisable to them. Section 15. Sale of the Bonds. The Council finds that the purchase contract dated August 2, 2005, which has been distributed to the Council is reasonable and that it is in the best interest of the City that the Bonds be sold to the Underwriter on the terms set forth in the purchase contract and in this ordinance. The City accepts the purchase contract and authorizes the Mayor to execute the purchase contract and deliver it to the Underwriter. The Bonds shall be issued and delivered to the Underwriter upon payment of the purchase price specified in the purchase contract. Section 16. Bond Insurance. (a) Approval of Bond Insurance Policy. In accordance with the offer of the Underwriter to purchase the Bonds, the Council hereby approves the commitment of the Insurer to provide a bond insurance policy guaranteeing the payment when due of principal of and interest on the Bonds (the `Bond Insurance Policy"). The Council further authorizes and directs all proper officers, agents, attorneys and employees of the City to execute a commitment letter with the Insurer and to cooperate with the Insurer in preparing such additional agreements, certificates, and other documentation on behalf of the City as shall be necessary or advisable in providing for the Bond Insurance Policy. -14- P:\DOT\DOTI PF 08/02/05 (b) Payments Under the Bond Insurance Policy. As long as the Bond Insurance Policy is in full force and effect, the City and the Bond Registrar shall comply with the following provisions: (i) If on the Business Day immediately preceding a scheduled interest payment date or principal payment date ( "Payment Date "), there is not on deposit with the Bond Registrar money sufficient to pay the principal of and interest on the Bonds due on such Payment Date, the City or the Bond Registrar shall give notice to the Insurer and to its designated agent (if any) (the "Insurer's Fiscal Agent "), by telephone or telecopy, of the amount of such deficiency by 12:00 noon, New York City time, on such Business Day. If, on such Payment Date, there is not on deposit with the Bond Registrar money sufficient to pay the principal of, and interest on, the Bonds due on such Payment Date, the Bond Registrar shall make a claim under the Insurance Policy and give notice to the Insurer and the Insurer's Fiscal Agent (if any) by telephone of the amount of any deficiency in the amount available to pay principal and interest, and the allocation of such deficiency between the amount required to pay interest on the Bonds and the amount required to pay principal of the Bonds, confirmed in writing to the Insurer and the Insurer's Fiscal Agent by 12:00 noon, New York City time, on such Payment Date, by delivering the Notice of Nonpayment and Certificate. For the purposes of the preceding paragraph, "Notice" means telephonic or telecopied notice, subsequently confirmed in a signed writing, or written notice by registered or certified mail, from the City or Bond Registrar to the Insurer, which notice shall specify (a) the name of the entity making the claim, (b) the policy number, (c) the claimed amount and (d) the date such claimed amount will become Due for Payment. "Nonpayment" means the failure of the City to have provided sufficient funds to the Bond Registrar for payment in full of all principal of, and interest on, the Bonds that are Due for Payment. "Due for Payment," when referring to the principal of insured bonds, means when the stated maturity date or mandatory redemption date for the application of a required sinking fund installment has been reached and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by application of required sinking fund installments or other advancement of maturity, unless the Insurer shall elect, in its sole discretion, to pay such principal); and when referring to interest on Bonds, means when the stated date for payment of interest has been reached. "Certificate" means a certificate in form and substance satisfactory to the Insurer as to the Bond Registrar's right to receive payment under the Insurance Policy. (ii) The Bond Registrar shall designate any portion of payment of principal on Bonds paid by the Insurer at maturity on its books as a reduction in the principal amount of Bonds registered to the then current Registered Owner, whether DTC or its nominee or otherwise, and shall issue a replacement Bond to the Insurer, registered in the name of the Insurer, as the case may be, in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided, however, that the Bond Registrar's failure to so designate any payment or issue any replacement Bond shall have no effect on the amount of principal or interest payable by the City on any Bond or the subrogation rights of the Insurer. -15- P \DOT\DOT1 PF 08/02/05 (iii) The Bond Registrar shall keep a complete and accurate record of all funds deposited by the Insurer into the Policy Payments Account (as hereinafter defined) and the allocation of such funds to payment of interest on and principal paid with respect to any Bond. The Insurer shall have the right to inspect such records at reasonable times upon reasonable notice to the Bond Registrar. (iv) Upon payment of a claim under the Bond Insurance Policy, the Bond Registrar shall establish a separate special purpose trust account for the benefit of owners of Bonds referred to herein as the "Policy Payments Account" and over which the Bond Registrar shall have exclusive control and sole right of withdrawal. The Bond Registrar shall receive any amount paid under the Bond Insurance Policy in trust on behalf of owners of Bonds and shall deposit any such amount in the Policy Payments Account and distribute such amount only for purposes of making the payments for which a claim was made. Such amounts shall be disbursed by the Bond Registrar to owners of Bonds in the same manner as principal and interest payments are to be made with respect to the Bonds under Section 3 hereof. It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or wire transfer used to pay debt service with other funds available to make such payments. Funds held in the Policy Payments Account shall not be invested by the Bond Registrar and may not be applied to satisfy any costs, expenses or liabilities of the Bond Registrar. Any funds remaining in the Policy Payments Account following an insured Bond payment date shall promptly be remitted to the Insurer. (c) Provisions Relating to Bond Insurance Policy. As long as the Bond Insurance Policy is in full force and effect, the City shall comply with the following provisions: (i) Notice to the Insurer. Any notices required to be given by the City shall also be given to the Insurer, Attn: Surveillance. (ii) Amendments. Prior written consent of the Insurer is required for any amendment to this ordinance. The City shall give the Insurer notice of any such proposed amendment. A copy of any amendment to this ordinance that is consented to by the Insurer shall be sent to Standard & Poor's Rating Services, a Division of The McGraw -Hill Companies, Inc. (iii) Remedies. The Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to owners of the Bonds. The Insurer shall be recognized as the owner of each Bond for the purposes of exercising all rights and privileges available to owners of the Bonds. The Insurer shall have the right to institute any suit, action, or proceeding at law or in equity under the same terms as an owner of the Bonds. (iv) The Insurer as Third Party Beneficiary. The Insurer shall be a third -party beneficiary under this ordinance. -16- P: \DOT\DOTI PF 08/02/05 (v) Subrogation. If principal and /or interest due on the Bonds is paid by the Insurer, such Bonds shall remain outstanding under this ordinance for all purposes, and shall not be deemed defeased or otherwise satisfied, or paid by the City, and the pledge of taxes and all covenants, agreements and other obligations of the City to the owners of the Bonds shall continue to exist and shall run to the benefit of the Insurer, and the Insurer shall be subrogated to the rights of such owners. Section 17. Undertaking for Ongoing Disclosure. (a) Contract /Undertaking. This section constitutes the City's written undertaking for the benefit of the owners and beneficial owners of the Bonds as required by Section (b)(5) of the Rule. The City is an obligated person with respect to less than $10,000,000 of municipal securities, including the Bonds. (b) Financial Statements /Operating Data. The City agrees to provide or cause to be provided to each NRMSIR and to the SID, if any, in each case as designated by the Commission in accordance with the Rule, the following annual financial information and operating data for the prior fiscal year (commencing in 2006 for the fiscal year ended December 31, 2005): 1. Annual financial statements, which statements may or may not be audited, showing ending fund balances for the City's general fund prepared in accordance with the Budget Accounting and Reporting System prescribed by the Washington State Auditor pursuant to RCW 43.09.200 (or any successor statute) and generally of the type included in the official statement for the Bonds under "Appendix A: City of Port Angeles 2003 Audited Financial Statements"; 2. The assessed valuation of taxable property in the City; 3. Property taxes due, property taxes collected and property taxes delinquent; 4. Property tax levy rates per $1,000 of assessed valuation; and 5. Outstanding general obligation debt of the City. Items 2 -5 shall be required only to the extent that such information is not included in the annual financial statements. The information and data described above shall be provided on or before nine months after the end of the City's fiscal year. The City's current fiscal year ends December 31. The City may adjust such fiscal year by providing written notice of the change of fiscal year to each then existing NRMSIR and the SID, if any. In lieu of providing such annual financial information and operating data, the City may cross - reference to other documents provided to the NRMSIR's, the SID or to the Commission and, if such document is a final official statement within the meaning of the Rule, available from the MSRB. -17- P: \DOT\DOT1PF 08/02/05 If not provided as part of the annual financial information discussed above, the City shall provide the City's audited annual financial statement prepared in accordance with the Budget Accounting and Reporting System prescribed by the Washington State Auditor pursuant to RCW 43.09.200 (or any successor statutes), when and if available, to each then existing NRMSIR and the SID, if any. (c) Material Events. The City agrees to provide or cause to be provided, in a timely manner, to the SID, if any, and to each NRMSIR or to the MSRB notice of the occurrence of any of the following events with respect to the Bonds, if material: • Principal and interest payment delinquencies; • Non - payment related defaults; • Unscheduled draws on debt service reserves reflecting financial difficulties; • Unscheduled draws on credit enhancements reflecting financial difficulties; • Substitution of credit or liquidity providers, or their failure to perform; • Adverse tax opinions or events affecting the tax - exempt status of the Bonds; • Modifications to the rights of Bond owners; • Bond calls (optional, contingent or unscheduled Bond calls other than scheduled sinking fund redemptions for which notice is given pursuant to Exchange Act Release 34- 238560); • Defeasances; • Release, substitution or sale of property, securing repayment of the Bonds; and • Rating changes Solely for purposes of disclosure, and not intending to modify this undertaking, the City advises that no debt service reserves and no property secure payment of the Bonds. (d) Termination /Modification. The City's obligations to provide notices of material events shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. Any provision of this section shall be null and void if the City (1) obtains an opinion of nationally recognized bond counsel to the effect that the portion of the Rule that requires that provision is invalid, has been repealed retroactively or otherwise does not apply to the Bonds and (2) notifies each NRMSIR and the SID, if any, of such opinion and the cancellation of this section. The City may amend this section with an approving opinion of nationally recognized bond counsel in accordance with the Rule. (e) DisclosureUSA. Any filing required to be made with any NRMSIR or SID under this Section 17 may be made by transmitting such filing solely to the Texas Municipal Advisory Council (the "MAC ") as provided at http: / /www.disclosureusa.org unless the United States Securities and Exchange Commission has withdrawn the interpretive advice in its letter to the MAC dated September 7, 2004. -18- P:OOTDOTI PF 08/02/05 (1) Bond Owner's Remedies Under This Section. The right of any bondowner or beneficial owner of Bonds to enforce the provisions of this section shall be limited to a right to obtain specific enforcement of the City's obligations under this section, and any failure by the City to comply with the provisions of this undertaking shall not be an event of default with respect to the Bonds. For purposes of this section, "beneficial owner" means any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds, including persons holding Bonds through nominees or depositories. Section 18. General Authorization. Ratification of Prior Acts. The Mayor, the Finance Director, City Clerk, and other appropriate officers and agents of the City are authorized to take any actions and to execute documents as in their judgment may be necessary or desirable in order to carry out the terms of, and complete the transactions contemplated by, this ordinance. All acts taken pursuant to the authority of this ordinance but prior to its effective date are hereby ratified. Section 19. Severability. If any one or more of the covenants and agreements provided in this ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements of this ordinance and shall in no way affect the validity of the other provisions of this ordinance or of the Bonds. Section 20. Effective Date. This ordinance shall become effective five days after its passage and publication, as required by law. PASSED by the City Council of the City of Port Angeles, Washington, at a regular meeting thereof held August 2, 2005. ATTEST: City Clerk i� c: City Clerk Publish: August 7, 2005 By Summary -19- CITY OF PORT ANGELES, INGTON Mayor P \UOT\DOT1PF 08/02/05 CITY CLERK'S CERTIFICATE I, the undersigned, City Clerk of the City of Port Angeles, Washington (the "City ") and keeper of the records of the City Council of the City (the "Council "), DO HEREBY CERTIFY: 1. That the attached Ordinance is a true and correct copy of Ordinance No. 3a /A of the City (the "Ordinance "), as finally passed at a regular meeting of the Council of the City held on August 2, 2005, and duly recorded in my office. 2. That said meeting was duly convened and held in all respects in accordance with law, and to the extent required by law, due and proper notice of such meeting was given; that a quorum of the Council was present throughout the meeting and a legally sufficient number of members of the Council voted in the proper manner for the passage of said Ordinance; that all other requirements and proceedings incident to the proper adoption or passage of said Ordinance have been duly fulfilled, carried out and otherwise observed, and that I am authorized to execute this certificate. r4i IN WITNESS WHEREOF, I have hereunto set my hand this ) day of , 2005. City Cler P. \DOT DOTI PF 08/02/05 Summary of An Ordinance Adopted by the Port Angeles City Council on August 2, 2005 Ordinance No. 3212 This Ordinance of the City of Port Angeles, Washington, provides for the issuance and sale of limited tax general obligation bonds of the City in the aggregate principal amount of $3,270,000 to finance the acquisition, construction and equipping of various utility improvements within the City's western urban growth annexation area and to pay costs of issuance of such bonds; providing the date, form, terms and maturities of the bonds; providing for the annual levy of taxes to pay the principal of and interest on the bonds; and authorizing the sale of the bonds. The full text of the Ordinance is available at City Hall in the City Clerk's office or will be mailed upon request. Office hours are Monday through Friday from 8:00 a.m. to 5:00 p.m. This Ordinance shall take effect five days following the date of publication by summary Becky J. Upton City Clerk Publish: August 7, 2005