HomeMy WebLinkAbout3541 CITY OF PORT ANGELES, WASHINGTON
ORDINANCE NO. 355
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PORT ANGELES, WASHINGTON; AUTHORIZING THE
ISSUANCE OF A LIMITED TAX GENERAL OBLIGATION
REFUNDING BOND OF THE CITY IN THE PRINCIPAL
AMOUNT OF NOT TO EXCEED $2,050,000 FOR THE
PURPOSE OF REFUNDING CERTAIN OUTSTANDING
LIMITED TAX GENERAL OBLIGATION BONDS OF THE
CITY; PROVIDING THE FORM OF THE BOND;
AUTHORIZING THE ISSUANCE OF THE BOND TO U.S.
BANK NATIONAL ASSOCIATION; AND DELEGATING
AUTHORITY TO APPROVE THE FINAL TERMS OF THE
BOND.
Passed September 15, 2015
PREPARED BY:
PACIFICA LAW GROUP LLP
Seattle, Washington
CITY OF PORT ANGELES
ORDINANCE NO.
TABLE OF CONTENTS*
Page
Section 1. Definitions and Interpretation of Terms...................................................................2
Section 2. Authorization of the Bond .......................................................................................5
Section3. Bond Details.............................................................................................................6
Section 4. Registration, Exchange and Payments.....................................................................6
Section5. Form of Bond...........................................................................................................7
Section 6. Execution of Bond .................................................................................................10
Section 7. Application of Bond Proceeds; Plan of Refunding................................................1 l
Section 8. Tax Covenants .......................................................................................................12
Section 9. Pledge of Funds and Credit; General Obligation...................................................13
Section 10. Right of Prepayment ..............................................................................................14
Section 11. Issuance of the Bond..............................................................................................14
Section 12. Ongoing Disclosure; Covenants.............................................................................15
Section 13. Lost, Stolen or Destroyed Bond.............................................................................15
Section 14. Severability; Ratification.......................................................................................16
Section 15. Effective Date of Ordinance ..................................................................................17
Exhibit A: Proposal
* This Table of Contents is provided for convenience only and is not a part of this ordinance.
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CITY OF PORT ANGELES, WASHINGTON
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PORT ANGELES, WASHINGTON, AUTHORIZING THE
ISSUANCE OF A LIMITED TAX GENERAL OBLIGATION
REFUNDING BOND OF THE CITY IN THE PRINCIPAL
AMOUNT OF NOT TO EXCEED $2,050,000 FOR THE
PURPOSE OF REFUNDING CERTAIN OUTSTANDING
LIMITED TAX GENERAL OBLIGATION BONDS OF THE
CITY; PROVIDING THE FORM OF THE BOND;
AUTHORIZING THE ISSUANCE OF THE BOND TO U.S.
BANK NATIONAL ASSOCIATION: AND DELEGATING
AUTHORITY TO APPROVE THE FINAL TERMS OF THE
BOND.
WHEREAS, the City of Port Angeles, Washington (the "City") has outstanding its
Limited Tax General Obligation Bonds, 2005, issued on August 16, 2005, pursuant to Ordinance
No. 3212 passed by the City Council (the "Council") on August 2, 2005 (the "2005 Bond
Ordinance"), which remain outstanding as follows:
Maturity Dates
(August 1) Principal Amounts Interest Rates
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
WHEREAS, the 2005 Bond Ordinance provides that the City may call the 2005 Bonds
maturing on or after August 1, 2016 (the "Refunding Candidates"), for redemption on or after
August 1, 2015, in whole or in part on any date, at the price of par plus accrued interest, if any, to
the date of redemption; and
WHEREAS, after due consideration it appears that all or a portion of the Refunding
Candidates (the "Refunded Bonds") may be defeased and refunded by the proceeds of limited tax
general obligation bonds at a savings to the City and its taxpayers; and
WHEREAS, the Council deems it in the best interest of the City to issue a limited tax
general obligation refunding bond in the principal amount of not to exceed $2,050,000 (the
"Bond") to redeem and defease the Refunded Bonds and to pay costs of issuing the Bond; and
WHEREAS, the City has received the offer of U.S. Bank National Association (the
"Bank") set forth in Exhibit A attached hereto (the"Proposal"), to acquire the Bond; and
WHEREAS, it is deemed necessary and advisable that the City accept the Bank's offer
and issue the Bond as set forth herein;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PORT ANGELES,
WASHINGTON, DO ORDAIN, as follows:
Section 1. Definitions and Interpretation of Terms.
(a) Definitions. As used in this ordinance, the following words shall have the
following meanings:
Acquired Obligations means the Government Obligations acquired by the City under the
terms of this ordinance and the Escrow Agreement to effect the defeasance and refunding of the
Refunded Bonds.
Bank means U.S. Bank National Association.
Bond means the Limited Tax General Obligation Refunding Bond, 2015 authorized to be
issued by the City pursuant to this ordinance.
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Bond Counsel means Pacifica Law Group LLP, Seattle, Washington.
Bond Fund means the `Bond Redemption Fund" authorized to be created pursuant to
Section 9 of this ordinance.
Bond Register means the registration records for the Bond maintained by the Bond
Registrar.
Bond Registrar means the Chief Financial Officer of the City, 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.
Call Date means the date set forth in the Escrow Agreement for the redemption of the
Refunded Bonds.
Chief Financial Officer means the duly appointed and acting Chief Financial Officer of
the City or the successor to the duties of that office.
City means the City of Port Angeles, Washington, a municipal corporation duly organized
and existing under the laws of the State of Washington.
City Council or Council means the City Council of the City as the general legislative
authority of the City, as the same shall be duly and regularly constituted from time to time.
Clerk means the duly appointed and acting City Clerk or the successor to the duties of
that office.
Code means the Internal Revenue Code of 1986, as amended, and shall include all
applicable regulations and rulings relating thereto.
Default Interest Rate means the Interest Rate plus 3%.
Escrow Agent means U.S. Bank National Association.
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Escrow Agreement means the Escrow Deposit Agreement between the City and the
Escrow Agent authorized to be entered into pursuant to this ordinance.
Government Obligations mean those obligations now or hereafter defined as such in
chapter 39.53 RCW.
Interest Rate means a fixed rate of interest of 2.59%, as the same may be adjusted
pursuant to the Proposal and set forth herein.
Proposal means the proposal letter- submitted by the Bank substantially in the form
attached hereto as Exhibit A.
Refunded Bonds mean those Refunding Candidates designated by the Chief Financial
Officer for refunding pursuant to Section 7 and Section 11.
Refunding Account means the account by that name established pursuant to Section 7.
Refunding Candidates mean the outstanding 2005 Bonds as shown in the recitals to this
ordinance.
Registered Owner means the person in whose name the Bond is registered on the Bond
Register.
Rule means the Securities and Exchange Commission's Rule 15c2-12 under the
Securities Exchange Act of 1934, as the same may be amended from time to time.
Treasurer means the duly appointed and acting Treasurer of the City or the successor to
the duties of that office.
2005 Bond Ordinance means Ordinance No. 3212 adopted by the Council on August 2,
2005, authorizing the issuance of the 2005 Bonds.
2005 Bonds mean the Limited Tax General Obligation Bonds, 2005 of the City, issued
pursuant to the 2005 Bond Ordinance as described in the recitals of this ordinance.
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(b) Interpretation. In this ordinance, unless the context otherwise requires:
(1) The terms "hereby," "hereof," "hereto," "herein," "hereunder' and any
similar teens, as used in this ordinance, refer to this ordinance as a whole and not to any
particular article, section, subdivision or clause hereof, and the tern "hereafter" shall mean after,
and the tern "heretofore" shall mean before, the date of this ordinance;
(2) Words of the masculine gender shall mean and include correlative words
of the feminine and neutral genders and words importing the singular number shall mean and
include the plural number and vice versa;
(3) Words importing persons shall include finns, associations, partnerships
(including limited partnerships), trusts, corporations and other legal entities, including public
bodies, as well as natural persons;
(4) Any headings preceding the text of the several articles and sections of this
ordinance, and any table of contents or marginal notes appended to copies hereof, shall be solely
for convenience of reference and shall not constitute a part of this ordinance, nor shall they affect
its meaning, construction or effect; and
(5) All references herein to "articles," "sections" and other subdivisions or
clauses are to the corresponding articles, sections, subdivisions or clauses hereof.
Section 2. Authorization of the Bond. For the purpose of refunding the Refunded
Bonds and paying costs of issuance and the costs of the refunding, the City is hereby authorized
to issue and sell a limited tax general obligation refunding bond in the principal amount of not to
exceed $2,050,000 (the "Bond").
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Section 3. Bond Details. The Bond shall be designated the "City of Port Angeles,
Washington, Limited Tax General Obligation Refunding Bond, 2015," or other such designation
as set forth in the Bond and approved by the Chief Financial Officer.
The Bond shall be dated as of its date of delivery, shall be fully registered as to both
principal and interest, shall be in one denomination, and shall mature on the date set forth in the
Bond. The Bond shall bear- interest from its dated date or the most recent date to which interest
has been paid at the Interest Rate, as the same may be adjusted pursuant to the Proposal and set
forth herein. Interest on the principal amount of the Bond shall be calculated per annum on a
30/360 basis, or as otherwise provided in the Bond. Principal shall be payable armually on each
August 1, and interest on the Bond shall be payable semiannually each August 1 and February 1,
as set forth in the payment schedule attached to the Bond.
Section 4. Registration, Exchange and Payments.
(a) RegistrarlBond Registrar. The Chief Financial Officer of the City shall act as
Bond Registrar. The Bond Registrar is authorized, on behalf of the City, to authenticate and
deliver the Bond if transferred or exchanged in accordance with the provisions of the Bond and
this ordinance and to carry out all of the Bond Registrar's powers and duties under this
ordinance.
(b) Registered Ownership. The City and the Bond Registrar may deem and treat the
Registered Owner of the 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 the Bond shall be
made only as described in subsection (e) below. All such payments made as described in
subsection (e) below shall be valid and shall satisfy the liability of the City upon the Bond to the
extent of the amount so paid.
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(c) No Transfer or Exchange of Registered Ownership. The Bond shall not be
transferrable without the consent of the City unless (i) the Bank's corporate name is changed and
the transfer is necessary to reflect such change; or (ii) the transferee is a successor in interest of
the Bank by means of a corporate merger, an exchange of stock, or a sale of assets.
(d) Registration Covenant. The City covenants that, until the Bond has been
surrendered and canceled, it will maintain a system for recording the ownership of the Bond that
complies with the provisions of Section 149 of the Code.
(e) Place and Medium of Pavinent. Both principal of and interest on the Bond shall
be payable in lawful money of the United States of America. Principal and interest on the Bond
shall be payable by check, warrant, Automated Clearing House/electronic funds transfer or by
other means mutually acceptable to the Registered Owner and the City. Payment of principal of
and interest on the Bond will be made by the City directly to the Registered Owner and not
through a third party paying agent. Upon final payment of principal and interest of the Bond, the
Registered Owner shall surrender the Bond for cancellation at the office of the Bond Registrar in
accordance with this Section 4 and Section 13.
(f) Additional Provisions. The Bond will not be registered with The Depository
Trust Company, New York, New York, or any other securities depository. No official statement,
prospectus, offering circular or other offering statement containing material information with
respect to the City or the Bond will be provided in comlection with the issuance of the Bond, the
Bond will be unrated, and the Bond will not be assigned a CUSIP number.
Section 5. Form of Bond. The Bond shall be in substantially the following form:
UNITED STATES OF AMERICA
NO. R-1 $
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STATE OF WASHINGTON
CITY OF PORT ANGELES
LIMITED TAX GENERAL OBLIGATION REFUNDING BOND, 2015
INTEREST RATE: 2.59%, SUBJECT TO ADJUSTMENT AS SET FORTH BELOW
MATURITY DATE: [SEPTEMBER [1, 2025]
REGISTERED OWNER: U.S. BANK NATIONAL ASSOCIATION
PRINCIPAL AMOUNT: MILLION AND NO/100 DOLLARS
The City of Port Angeles, Washington, a municipal corporation organized and existing
under and by virtue of the laws 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, on
or before the Maturity Date identified above, the Principal Amount identified above. This bond
shall bear interest at the fixed rate stated above (the "Interest Rate"); provided, however, the rate
of interest on this bond may be adjusted to a default rate as provided in the hereinafter defined
Bond Ordinance. Interest on this bond shall accrue from its dated date until paid and shall be
computed per annum on the principal amount outstanding on a 30/360 basis. Principal of and
accrued interest on this bond shall be payable on the dates set forth in the payment schedule
attached hereto.
Both principal of and interest on this bond shall be payable in lawful money of the United
States of America. Principal and interest on this bond shall be payable by check or warrant or by
other means mutually acceptable to the Registered Owner and the City. Upon final payinent of
principal and interest of this bond, the Registered Owner shall surrender this bond for
cancellation at the office of the Bond Registrar in accordance with Ordinance No. of the
City(the "Bond Ordinance").
This bond is issued pursuant to the Bond Ordinance, to refund certain outstanding limited
tax general obligation bonds of the City and to pay costs of issuance and costs associated with the
refunding. Capitalized terns used in this bond have the meanings given such terns in the Bond
Ordinance.
The City may prepay this bond as provided in the Bond Ordinance without prepayment
penalty or fee.
This bond has been designated by the City as a "qualified tax-exempt obligation" within
the meaning of Section 265(b) of the Code.
The City has in the Bond Ordinance authorized the creation of a fund to be used for the
payment of debt service on this bond, designated as the "Bond Redemption Fund" (the "Bond
Fund"). The Bond Fund shall be drawn upon for the sole purpose of paying the principal of and
interest on this bond.
The City hereby irrevocably covenants and agrees with the owner of this bond that it will
include in its annual budget and levy taxes annually, within and as a part of the tax levy
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permitted to the City without a vote of the electorate, upon all the property subject to taxation in
amounts sufficient, together with other money legally available therefor, to pay the principal of
and interest on this bond 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.
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 hereon shall
have been manually signed by or on behalf of the Bond Registrar or its duly designated agent.
This bond is issued pursuant to the Constitution and laws of the State of Washington, and
duly adopted ordinances of the City. This bond is transferable upon compliance with the
conditions set forth in the Bond Ordinance.
It is hereby certified that all acts, conditions and things required by the Constitution and
statutes of the State of Washington to exist, to have happened, been done and performed
precedent to and in the issuance of this bond exist, have happened, been done and performed and
that the issuance of this bond does not violate any constitutional, statutory or other limitation
upon the amount of bonded indebtedness that the City may incur.
IN WITNESS WHEREOF, the City of Port Angeles, Washington, has caused this bond to
be executed by the manual or facsimile signature of the Mayor of the City Council and attested
by the manual or facsimile signature of the Clerk, as of this day of , 2015.
[SEAL] CITY OF PORT ANGELES, WASHINGTON
By /s/
Mayor
ATTEST:
/s/
City Clerk
REGISTRATION CERTIFICATE
This bond is registered in the name of the Registered Owner on the books of the City, in
the office of the Chief Financial Officer of the City (the "Bond Registrar"), as to both principal
and interest, as noted in the registration blank below. All payments of principal of and interest
on this bond shall be made by the City from the Bond Fund.
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Date of Name and Address of Signature of
Registration Registered Owner Bond Registrar
2015 U.S. Bank National Association
Government Banking Division Chief Financial Officer
9"' Floor(EP-MN-S9GB)
101 East 5`I' Street
St. Paul, MN 55101-1860
PAYMENT SCHEDULE
Principal and interest on this bond shall be payable as set forth in the following schedule:
Date Principal Interest Total Payment
Section 6. Execution of Bond. The Bond shall be executed on behalf of the City with
the manual or facsimile signature of the City Mayor, and shall be attested by the manual or
facsimile signature of the Clerk.
Only such Bond as shall bear thereon a Certificate of Authentication in the fonn earlier
recited, 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 Bond so authenticated has been duly executed, authenticated and delivered
hereunder and is entitled to the benefits of this ordinance.
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In case either of the officers who shall have executed the Bond shall cease to be an officer
or officers of the City before the Bond so signed shall have been authenticated or delivered by the
Bond Registrar, or issued by the City, such Bond may nevertheless be authenticated, delivered
and issued and upon such authentication, delivery and issuance, shall be as binding upon the City
as though those who signed the same had continued to be such officers of the City. The Bond
may also be signed and attested on behalf of the City by such persons who at the date of the
actual execution of the Bond, are the proper officers of the City, although at the original date of
such Bond any such person shall not have been such officer of the City.
Section 7. Application of Bond Proceeds; Plan of Refunding. For the purpose of debt
service savings, the City proposes to defease and/or refund the Refunded Bonds as set forth
herein. The Chief Financial Officer shall designate all or a portion of the Refunding Candidates
as Refunded Bonds and such designation shall be set forth in the Escrow Agreement.
A portion of the proceeds of the Bond shall be deposited with the Escrow Agent pursuant
to the Escrow Agreement to be used immediately upon receipt thereof to defease the Refunded
Bonds as authorized by the 2005 Bond Ordinance and to pay costs of issuance of the Bond. The
net proceeds deposited with the Escrow Agent and any interest earnings on any Acquired
Obligations will provide for the payment o£
(1) interest on the Refunded Bonds as such becomes due on and prior
to the Call Date; and
(2) the redemption price (100 percent of the principal amount) of the
Refunded Bonds on the Call Date.
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Such Acquired Obligations shall be purchased at a yield not greater than the yield
permitted by the Code and regulations relating to acquired obligations in connection with
refunding bond issues.
A beginning cash balance, if any, and the Acquired Obligations, if any, shall be deposited
irrevocably with the Escrow Agent in an amount sufficient to defease the Refunded Bonds. In
order to carry out the purposes of this Section 7, the Chief Financial Officer is authorized and
directed to execute and deliver to the Escrow Agent, an Escrow Agreement.
The City hereby calls the Refunded Bonds for redemption on their Call Date in
accordance with the provisions of the 2005 Bond Ordinance authorizing the redemption and
retirement of the 2005 Bonds prior to their fixed maturities.
Said defeasance and call for redemption of the Refunded Bonds shall be irrevocable after
the issuance of the Bond and delivery of the proceeds of such Bond and/or Acquired Obligations
to the Escrow Agent.
The Escrow Agent is hereby authorized and directed to provide for the giving of notices
of the defeasance and/or redemption of the Refunded Bonds in accordance with the applicable
provisions of the 2005 Bond Ordinance. The costs of publication of such notices shall be an
expense of the City.
The City will take such actions as are found necessary to see that all necessary and proper
fees, compensation and expenses of the Escrow Agent for the Refunded Bonds shall be paid
when due.
Section 8. Tax Covenants. The City shall comply with the provisions of this section
unless, in the written opinion of Bond Counsel to the City, such compliance is not required to
maintain the exemption of the interest on the Bond from federal income taxation.
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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 that will cause the Bond to
be an "arbitrage bond" within the meaning of such Section and 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 throughout the term of the
Bond.
The City further covenants that it will not take any action or pennit any action to be taken
that would cause the Bond to constitute a "private activity bond"under Section 141 of the Code.
The City hereby designates the Bond as a "qualified tax-exempt obligation" within the
meaning of Section 265(b) of the Code. The City reasonably does not expect to issue more than
$10,000,000 in qualifying tax-exempt debt during calendar year 2015.
Section 9. Pledge of Funds and Credit; General Obligation. The City hereby
authorizes the creation of a fund to be used for the payment of debt service on the Bond,
designated as the `Bond Redemption Fund" (the "Bond Fund"). No later than the date each
payment of principal of or interest on the Bond becomes due, the City shall transmit sufficient
funds, from the Bond Fund or from other legally available sources, to the Bond Registrar for the
payment of such principal or interest. Money in the Bond Fund may be invested in legal
investments for City funds.
The City hereby irrevocably covenants and agrees for as long as the Bond is outstanding
and unpaid that each year it will include in its budget and levy an ad valorem tax upon all the
property within the City subject to taxation in an amount that will be sufficient, together with
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other revenues and money of the City legally available for such purposes, to pay the principal of
and interest on the Bond when due.
The City hereby irrevocably pledges that the annual tax provided for herein to be levied
for the payment of such principal and interest shall be within and as a part of the tax levy
permitted to cities without a vote of the people, and that a sufficient portion of each annual levy
to be levied and collected by the City prior to the full payment of the principal of and interest on
the Bond will be and is hereby irrevocably set aside, pledged and appropriated for the payment of
the principal of and interest on the Bond. The full faith, credit and resources of the City are
hereby irrevocably pledged for the annual leery and collection of said taxes and for the prompt
payment of the principal of and interest on the Bond when due.
Section 10. Right of Prepa iquent. The Bond may be prepaid, in whole or in part, on
any date without prepayment penalty or fee. If the Bond is prepaid in accordance with this
Section 10, interest shall cease to accrue on the date the Bank receives such prepayment.
Section 11. Issuance of the Bond. The Bond shall be issued to the Bank pursuant to
the terns of this ordinance and the Bank's Proposal. The City hereby accepts the Bank's
Proposal, which is attached as Exhibit A. The Chief Financial Officer is hereby authorized to
approve the principal amount of the Bond and to agree to any other terns, conditions and
covenants that are in the best interest of the City and in accordance with the Bank's Proposal so
long as the principal amount of the Bond does not exceed $2,050,000.
The appropriate City officials, including but not limited to the Chief Financial Officer and
the Treasurer, are hereby authorized and directed to do everything necessary for the prompt
issuance, execution and delivery of the Bond and for the proper application and use of the
proceeds thereof.
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Section 12. Ongoing Disclosure; Covenants.
(a) Ongoing Disclosure. The Bond is exempt from ongoing disclosure requirements
of the Rule.
(b) Covenants. So long as the Bond is outstanding, the City hereby covenants and
agrees as follows:
(1) To maintain rates, fees and revenues of the City at least equal to 1.00 times
the annual debt service on all limited tax general obligation debt of the City, including the Bond.
Failure to maintain such ratio for two consecutive years will result in an automatic adjustment of
the Interest Rate to the Default Interest Rate;
(2) To timely pay all payments of principal of and interest on the Bond.
Failure to timely pay principal of or interest on the Bond shall result in a late payinent fee at the
rate of 0.25% per month or portion thereof as of the date of the late payment until such payment
is made.
(3) To provide the Bank copies of the City's audited financial statements (or
make such budget available on the City's website) within 330 days of the end of each fiscal year;
(4) To provide the Bank copies of the City's annual budget (or make such
budget available on the City's website) within 45 days of adoption;
(5) To promptly notify the Bank of any development which is likely to have a
material, adverse effect on the financial condition of the City; and
(6) To provide the Bank financial or other information as may be reasonably
requested from time to time.
Section 13. Lost, Stolen or Destroyed Bond. In case the Bond shall be lost, stolen or
destroyed while in the Registered Owner's possession, the Bond Registrar may at the request of
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the Registered Owner execute and deliver a new Bond of like date, number and tenor to the
Registered Owner thereof upon the Registered Owner's paying the expenses and charges of the
City and the Bond Registrar in connection therewith and upon its filing with the City written
certification that such Bond was actually lost, stolen or destroyed and of its ownership thereof
In the case the Bond shall be lost, stolen, or destroyed while in the Registered Owner's
possession, the Registered Owner may elect upon final payment of principal and interest of the
Bond to surrender a photocopy of the Bond for cancellation at the office of the Bond Registrar
together with written certification that such Bond was actually lost, stolen or destroyed and of its
ownership thereof.
Section 14. Severability; Ratification. If any one or more of the covenants or
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 Bond. All acts taken pursuant to the authority
granted in this ordinance but prior to its effective date are hereby ratified and confirmed.
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Section 15. Effective Date of Ordinance. This ordinance will become effective five
days from and after its passage and publication.
PASSED by the City Council of the City of Port Angeles, Washington, at a regular
meeting of the City Council held on September 15, 2015.
CITY OF PORT ANGELES, WASHINGTON
yor
ATTEST:
City er
APPROVED AS TO FORM:
Pacifica Law Group L , Boi d Counsel
PUBLISHED: September aS, 2015
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Exhibit A
Bank's Proposal
(attached)
[Mbank,
Herbert F. Neufeld
Vice President & Community Banking Credit Liaison
U.S. Bank National Association
Government Banking Division
October 8, 2015
Bryan Olson, CFO
Trina Nevaril, Treasurer
City of Port Angeles
321 E. 5`" Street
Port Angeles, WA 98362
U.S. Bank National Association ("U.S. Bank") is pleased to consider your request to provide
financing to the City of Port Angeles, Washington ("City"). A summary of some of the terms
U.S. Bank is considering for this financing package is as follows:
Re: $2,054,700
City of Port Angeles, Washington
LTGO Tax-Exempt Loan ("Loan")
The Loan financing to the City is for the permanent refinancing of the City's 2005 LTGO bonds. i
Fixed Rate Loan:
Amount: $2.055 Million (approximate)
Length: 10 years or less
Amortization: 10 years (approximate)
Interest Rate Features: All rates are subject to change with market conditions
until formally locked by an agreement between the City and U.S. Bank. However, the fixed rate,
below, is being held as a courtesy to the City until closing but not later than Friday, October 16,
2015. All rates assume a 30/360-day interest accrual basis. All rates assume that the City and
legal counsel will designate the Loan as tax-exempt (bank qualified) under existing federal tax
regulations.
Fixed Interest Rate option: A fixed rate, based upon an indicative rate of 2.59%
per annum as of October 8, 2015.
Variable Interest Rate option: A variable interest rate (currently 1.01%), based
upon the 30-day LIBOR index plus a fixed spread and then factored by the then current U.S.
Bank's "Bank Qualified" rate factor (which changes approximately each quarter but is quite
stable). The rate will be recalculated (automatically reset each month) using the 30-day LIBOR
rate (rounded up 1/1 6th) as of the first business day of each calendar month and that rate would
be in effect for that month. The resultant calculation would be: (LIBOR + Spread) x 0.67 =
monthly rate. The effective interest rate using today's 30-day LIBOR rate would be:
(0.25 + 1.25) x 0.67 = 1.01%.
Payments: Rates, above, assume semiannual interest (beginning February 1, 2016)
and annual principal payments (beginning August 1, 2016) that result in, essentially, level
annual debt service requirements over the 10-year amortization period.
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Prepayments: Prepayment is allowed, in whole or in part, on any rate reset date without
prepayment fee. A three business day notice is required.
Default Interest Rate: The default interest rate will be the stated rate plus 3%.
Alternatively, a late payment fee will be assessed at the rate of 0.25% per month or portion
thereof as of the date of default and until the default condition is rectified.
Security: The Loan will be a non-voted full faith and credit and resources obligation of
the City. U.S. Bank will not take a subordinate lien position or be in a less than senior parity
level position to any other financing.
Loan Counsel: The loan documents and an unqualified legal opinion must be provided
by a nationally recognized bond counsel, at the expense of the City, that is currently listed in the
"Red Book" more formally known as The Bond Buyer's Municipal Marketplace ("Loan Counsel").
The law firm of Pacifica Law Group LLP meets or exceeds this requirement.
Loan Agreement: In addition to the standard financing documents produced by Loan
Counsel, there must be either a separate loan agreement to be executed by the City and U.S.
Bank or modifications must be made to the standard financing documents which will contain
covenants, default features, and other components of a relatively standard, municipal loan from
U.S. Bank.
Costs: Various costs, expenses and fees relating to due diligence and Loan
documentation, including all legal fees and expenses are the responsibility of the City. U.S.
Bank does not expect to require separate Bank Counsel for this financing. U.S. Bank must be
explicitly allowed to rely on the documents and legal opinion of the City's Loan Counsel. U.S.
Bank is not charging its customary Loan set up fee as a goodwill gesture toward the City.
Covenants/Provisions: Documentation will include standard covenants regarding
maintenance of business operations, adequate insurance coverage, and to collect fees, taxes
and other revenues in an amount sufficient to meet all City obligations, including debt service on
this Loan. In addition to standard covenants, the Loan documents, especially the Loan
Agreement (or modifications to the authorizing ordinance), will specifically include most of the
following covenants/provisions:
1. The City will covenant to automatically provide the Government Banking Division of
U.S. Bank with copies of its annual, audited financial statements within 330 days of
the end of each fiscal year for the duration of the Loan.
2. The City will provide U.S. Bank with a copy of the City's final budget within 45 days
after its adoption.
3. The City will provide the Bank financial or other information as may be reasonably
requested from time to time.
4. The City will covenant to maintain rates, fees, and revenues to result in a minimum
debt service coverage (funds available for debt service debt service divided by the
outstanding current debt service on all non-voted general obligation debt) of 1.0
times. Failure to maintain this coverage ratio will result in an automatic adjustment of
the interest rate to the Default Interest Rate.
5. The City will agree to take all actions necessary to preserve tax-exempt status of the
obligation. Should the tax designation change, the interest rate will change
Direct: 651.233.0589 Herbert.Neufeld @US Bank.corn www.USBank.co
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accordingly and to be effective the same date as the tax designation.
6. The default interest rate will be the stated rate plus 3%. Alternatively, a default fee
will be charged at the rate of 0.25% per month or portion thereof as of the default
date and until the default condition is rectified.
7. There will not be a 3rd party paying agent.
8. The Loan will not be registered with the Depository Trust Company or any other
securities depository.
9. The City will promptly notify the Bank of any development which is likely to have a
material, adverse effect on the financial condition of the City.
10. The Loan shall not be:
(i) assigned a separate rating by any rating agency;
(ii) issued pursuant to any type of offering document or official statement; and,
(iii) assigned a CUSIP number by Standard & Poor's CUSIP service.
11. During the life of the Loan, the Loan cannot be securitized.
Other: U.S. Bank's continued involvement with this financing is predicated upon U.S.
Bank obtaining credit approval of the various terms, conditions, and creditworthiness of the City.
The credit approval process includes the mandatory analysis of the City's most recent three
years of audited financial statements. We hereby acknowledge possession of the requisite
audited financial statements.
This Loan has not yet been formally approved by U.S. Bank. Formal approval is expected
within three weeks following award of the Loan to U.S. Bark. Prior to formal credit approval, the
loan documents must be modified to include at least most of the loan provisions listed in the
"Covenants/Provisions" section above.
All funds transfers must be directly deposited to a U.S. Bank account.
This Letter of Interest automatically expires 20 calendar days from the date of this letter. The
courtesy rate hold is effective until Friday, October 16, 2015.
Documentation for the transaction will be prepared by Loan Counsel for the Loan and will
include an appropriate authorizing resolution or ordinance, 8038 filing, and Loan Counsel
opinion that the Loan is a legal, valid, binding, enforceable and properly authorized obligation of
the City. The City will designate the Loan as a "tax-exempt, bank qualified obligation" under
section 265(b) of the Internal Revenue Code of 1986, as amended, for investment by financial
institutions.
As we obtain more information, additional substantive conditions will be required and terms may
be changed or be supplemented. In addition, upon completion of our analysis and due diligence
and if we obtain credit approval of this proposal, Loan Counsel will prepare loan documentation
which will include terms and conditions customary to U.S. Bank, as well as warranties and
covenants specific to this transaction. Further, Loan Counsel will explicitly allow U.S. Bank to
rely upon its documents and legal opinion.
To that end, this letter is an expression of interest only, and it is not a contract,
commitment nor intent to be bound. U.S. Bank does not intend that this letter or
discussions relative to the terms of this letter create any legal rights or obligations,
implicit or explicit, in favor of or against the other party. Also, no oral discussions and/or
Direct: 651.233.0589 Herbert.Neufeld(d),USl3ank.com wvvw.USBank.com
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written agreements shall be in place of or supersede written loan agreements executed
by your business and accepted by U.S. Bank.
Please note that this proposal is for your review only. It may not be disclosed to any
third party other than your attorney, accountant and authorized agents representing you.
Thank you for discussing your financing needs with U.S. Bank. Should you wish us to continue
to consider your credit request, you will be responsible for all of U.S. Bank's out-of-pocket
expenses related to this financing request. We look forward to the opportunity to consider your
credit request.
If you have any questions regarding this letter, please contact Herb Neufeld at (651) 233-0589.
Very truly yours,
U.S. BANK NATIONAL ASSOCIATION U.S. BANK NATIONAL ASSOCIATION
e4,-b- N ftt&2& La ,w Cel 13 a ex
Herb Neufeld Laurie Baker
Vice President& Senior Lender Vice President& Relationship Manager
Government Banking Division Government Banking Division
Direct: 651.233.0589 Herbert.Neufeld(d-,)US Bank.com www.USBank.com
CERTIFICATE
I, the undersigned, City Clerk of the City of Port Angeles, Washington, DO HEREBY
CERTIFY:
1. That the attached is a true and correct copy of Ordinance No. 35g 1
(the"Ordinance') of the City, duly passed at a regular meeting of the City Council
(the"Council") of the City held on September 15, 2015.
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
legal quorum 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 passage of said Ordinance have been fully
fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificate.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of September,
2015.
„p City Cl
Summary of Ordinance Adopted by the
Port Angeles City Council
On September 15, 2015
Ordinance No. 3541
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PORT ANGELES,
WASHINGTON, authorizes the issuance of a limited tax general obligation refunding bond of the City
in the principal amount of not to exceed $2,050,000 for the purpose of refunding certain outstanding
limited tax general obligation bonds of the city;providing the form of the bond; authorizing the issuance
of the bond to U.S. Bank National Association; and delegating authority to approve the final terms of the
bond.
This Ordinance shall take effect five days after passage and publication of summary.
The full texts of the Ordinances are available at City Hall in the City Clerk's office, on the City's
website at www.cityofpa.us, or will be mailed upon request. Office hours are Monday through
Friday 8:00 a.m. to 5:00 p.m.
Kari Martinez-Bailey
Acting City Clerk
Published: September 25, 2015
Summary of Ordinance Adopted by the
Port Angeles City Council
On September 15, 2015
Ordinance No. 3541
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PORT ANGELES,
WASHINGTON, authorizes the issuance of a limited tax general obligation refunding bond of the City
in the principal amount of not to exceed $2,050,000 for the purpose of refunding certain outstanding
limited tax general obligation bonds of the city;providing the form of the bond; authorizing the issuance
of the bond to U.S. Bank National Association; and delegating authority to approve the final terms of the
bond.
This Ordinance shall take effect five days after passage and publication of summary.
The full texts of the Ordinances are available at City Hall in the City Clerk's office, on the City's
website at www.cityofpa.us, or will be mailed upon request. Office hours are Monday through
Friday 8:00 a.m. to 5:00 p.m.
Kari Martinez-Bailey
Acting City Clerk
Published: September 25, 2015