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HomeMy WebLinkAbout2739CITY OF KENT, WASHINGTON ORDINANCE NO. 2739 AN ORDINANCE of the City of Kent, Washington, relating to contracting indebtedness; providing for the issuance of $3,440,000 par value of Limited Tax General Obligation Bonds, 1987, of the City for strictly City purposes to provide funds with which to acquire land for and construct a new library, as well as to finance the move from and remodeling of the current library for other City use; fixing the date, form, maturities, interest rates, terms and covenants of such bonds; establishing a bond redemption fund and an acquisition and construction fund; and ap- proving the sale and providing for the delivery of such bonds to Shearson Lehman Brothers Inc., Foster & Marshall Division, Seattle, Washington. WHEREAS, the City of Kent, Washington (the "City"), is in need of acquiring land for and constructing a new library to be operated in conjunction with King County, as well as purchasing King County's share of the current library and remodeling such facility for use by the City, the estimated cost of which is $6,328,159, and the City does not have available sufficient funds to pay the cost; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF KENT, WASHINGTON, DO ORDAIN as follows: Section 1. Debt Capacity. The assessed valuation of the taxable property of the City as ascertained by the last pre- ceding assessment for City purposes for taxes to be collected in the calendar year 1987 is $2,284,807,926, and the City has outstanding general indebtedness evidenced by limited tax general obligation bonds and conditional sales contracts in the principal amount of $14,182,050 incurred within the limit of up to 3/4 of 1% of the value of the taxable property within the City permitted for general municipal purposes without a vote of the qualified electors therein, unlimited tax general obligation bonds in the principal amount of $12,753,000 incurred within the limit of up to 2-1/2% of the value of the taxable property within the City for capital purposes only pursuant to a vote of the qualified electors of the City, and the amount of indebted- ness for which bonds are authorized herein to be issued is $3,440,000. Section 2. Purpose and Authorization of Bonds. The City shall borrow money on the credit of the City and issue nego- tiable limited tax general obligation bonds evidencing such indebtedness in the amount of $3,440,000 for general City pur- poses to provide the funds to acquire land for and construct a new library, as well as to finance the move from and remodeling of the current library, as above described, and to pay the costs of issuance and sale of the bonds. Such general indebtedness to be incurred shall be within the limit of up to 3/4 of 1% of the value of the taxable property within the City permitted for general municipal purposes without a vote of the qualified voters therein. Section 3. Description of Bonds. The bonds shall be called Limited Tax General Obligation Bonds, 1987 (the "Bonds"), of the City; shall be dated August 15, 1987; shall be in the denomination of $5,000 or any integral multiple thereof within a single maturity; shall be numbered separately in the manner and with any additional designation as the Bond Registrar (collec- tively, the fiscal agencies of the State of Washington located in Seattle, Washington, and New York, New York) deems necessary for purposes of identification; shall bear interest at the rates set forth below (computed on the basis of a 360 -day year of twelve 30 -day months), payable on June 1, 1988, and semiannually thereafter on each succeeding December 1 and June 1; and shall bear interest at the rates and mature on December 1 in years and amounts as follows: - 2 - Maturity Interest Years Amounts Rates 1988 $ 20,000 4.75% 1989 95,000 5.10 1990 100,000 5.40 1991 105,000 5.65 1992 115,000 5.90 1993 120,000 6.10 1994 125,000 6.30 1995 135,000 6.50 1996 145,000 6.70 1997 155,000 6.90 1998 165,000 7.10 1999 175,000 7.25 2000 190,000 7.40 2001 205,000 7.50 2002 220,000 7.60 2003 235,000 7.70 2004 250,000 7.80 2005 270,000 7.85 2006 295,000 7.90 2007 320,000 7.90 If any Bond is not redeemed upon proper presentment at its maturity or call date, the City shall be obligated to pay inter- est at the same rate for each such Bond from and after its maturity or call date until such Bond, both principal and inter- est, is paid in full or until sufficient money for such payment in full is on deposit in the bond redemption fund hereinafter created and such Bond has been called for payment. The Bonds shall be issued only in registered form as to both principal and interest and recorded in the books and records maintained by the Bond Registrar (the "Bond Register"). The Bond Register shall contain the name and mailing address of the owner of each Bond and the principal amounts and numbers of Bonds held by each owner. Upon surrender thereof to the Bond Registrar, the Bonds may be exchanged for Bonds in any authorized denomination of an equal aggregate principal amount and of the same interest rate and maturity. Bonds may be transferred only if endorsed in the manner provided thereon and surrendered to the Bond Registrar. Such exchange or transfer shall be without cost to the owner or - 3 - transferee. The Bond Registrar shall not be obligated to ex- change or transfer any Bond during the fifteen days preceding any principal payment or redemption date. Both principal of and interest on the Bonds shall be pay- able in lawful money of the United States of America. Interest on the Bonds shall be paid by check or draft mailed to the registered owners at the addresses appearing on the Bond Register on the fifteenth day of the month preceding the inter- est payment date. Principal of the Bonds shall be payable upon presentation and surrender of the Bonds by the registered owners at either office of the Bond Registrar at the option of such owners. Section 4. Redemption and Open Market Purchase of Bonds. Bonds maturing in the years 1988 through 1997, inclusive, shall be issued without the right or option of the City to redeem the same prior to their stated maturities. The City reserves the right and option to redeem the Bonds maturing on or after December 1, 1998, as a whole, or in part in inverse order of maturity (and by lot within a maturity in such manner as the Bond Registrar shall determine), on December 1, 1997, and on any interest payment date thereafter, at par plus accrued interest to the date of redemption. Portions of the principal amount of any Bond, in installments of $5,000 or any integral multiple of $5,000, may be redeemed. 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 therefor, a new Bond (or Bonds at the option of the registered owner) of like maturity and interest rate in any of the denominations autho- rized by this ordinance. Notice of any such intended redemption shall be given not less than 30 nor more than 60 days prior to the date fixed for - 4 - redemption by first-class mail, postage prepaid, to the regis- tered owner of any Bond to be redeemed at the address appearing on the Bond Register. The requirements of this section shall be deemed to be complied with when notice is mailed as herein provided, whether or not it is actually received by the owner of any Bond. The interest on the Bonds so called for redemption shall cease on the date fixed for redemption unless such Bond or Bonds so called are not redeemed upon presentation made pursuant to such call. In addition, such redemption notice shall be mailed within the same period, postage prepaid, to Moody's Investors Service, Inc., and Standard & Poor's Corporation at their offices in New York, New York, or their successors, and to Shearson Lehman Brothers Inc., Foster & Marshall Division, in Seattle, Washington, or its successor, and to such other persons and with such additional information as the City Finance Director shall deem appropriate, but such mailings shall not be a condition precedent to the redemption of such Bonds. The City further reserves the right and option to purchase any or all of the Bonds in the open market at any time at a price not in excess of par plus accrued interest to the date of such purchase. Section 5. Pledge of Bonds. The City irrevocably pledges to levy taxes annually, for as long as any of the Bonds are outstanding, within the constitutional and statutory tax limita- tions provided by law without a vote of the electors of the City on all of the property in the City subject to taxation in an amount sufficient, together with other money legally available and to be used therefor, to pay the principal of and interest on the Bonds as the same shall become due, and the full faith, credit and resources of the City are pledged irrevocably for the annual levy and collection of those taxes and the prompt payment of that principal and interest. - 5 - Section 6. Execution of Bonds. The Bonds shall be printed or lithographed on good bond paper in a form consistent with the provisions of this ordinance and state law, shall be signed by the Mayor and City Clerk, both of whose signatures shall be in facsimile, and a facsimile reproduction of the seal of the City shall be printed thereon. Only such Bonds as shall bear thereon a Certificate of Authentication in the following form, manually executed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance: CERTIFICATE OF AUTHENTICATION This bond is one of the fully registered City of Kent, Washington, Limited Tax General Obligation Bonds, 1987, described in the Bond Ordinance. WASHINGTON STATE FISCAL AGENCY Bond Registrar By Authorized Officer Such executed Certificate of Authentication shall be conclusive evidence that the Bonds so authenticated have been duly exe- cuted, authenticated and delivered hereunder and are entitled to the benefits of this ordinance. In case either or both of the officers whose facsimile signatures appear on the Bonds shall cease to be such officer or officers of the City before the Bonds so signed shall have been authenticated or delivered by the Bond Registrar or issued by the City, such Bonds nevertheless may be authenticated, deliv- ered and issued and upon such authentication, delivery and issuance, shall be as binding upon the City as though those whose facsimile signatures appear on the Bonds had continued to be such officers of the City. Any Bond also may be signed on behalf of the City by such persons as at the actual date of execution of such Bond shall be proper officers of the City - 6 - authorized to execute bonds although on the original date of such Bond such persons were not such officers of the City. Section 7. Registration of Bonds. The Bond Registrar shall keep, or cause to be kept, at its principal corporate trust office, sufficient books for the registration and transfer of the Bonds which shall at all times 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 ordi- nance, to serve as the City's paying agent for the Bonds and to carry out all of the Bond Registrar's powers and duties under this ordinance and City Ordinance No. 2418 establishing a system of registration for the City's bonds and obligations. The Bond Registrar shall be responsible for its representa- tions contained in the Bond Registrar's Certificate of Authenti- cation on the Bonds. The Bond Registrar may become the owner of Bonds with the same rights it would have if it were not the Bond Registrar and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as members of, or in any other capacity with respect to, any committee formed to protect the rights of Bond owners. Section 8. Negotiability of Bonds. The Bonds shall be negotiable instruments to the extent provided by RCW 62A.8-102 and 62A.8-105. Section 9. Non -Arbitrage and Arbitrage Rebate Covenants. The City covenants that it will take all actions necessary to prevent the interest on the Bonds from being included in gross income for federal income tax purposes, and it will neither take any action nor make or permit any use of proceeds of the Bonds or other funds of the City at any time during the term of the Bonds which will cause the interest on the Bonds to be included in gross income for federal income tax purposes. Further, the - 7 - City covenants that, to the extent required by law, if all proceeds of the Bonds have not been spent within six months from the date of issuance of the Bonds, it will calculate, or cause to be calculated, and rebate to the United States all earnings from the investment of Bond proceeds that are in excess of the amount that would have been earned had the yield on such invest- ments been equal to the yield on the Bonds, plus all income derived from such excess earnings, to the extent and in the manner required by Section 148 of the United States Internal Revenue Code of 1986 and applicable regulations. In the event the City shall fail to meet the rebate requirements applicable to the Bonds under Section 148 of such Code, the City covenants that, to the extent permitted by that Section, it shall pay the penalty provided in subsection 148(f)(7)(C) if required to prevent a loss of the exclusion from gross income for federal tax purposes of interest on the Bonds. The City further covenants that it has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifi- cations may not be relied upon. Section 10. Advance Refunding and Defeasance of Bonds. The City may issue advance refunding bonds pursuant to the laws of the State of Washington or use money available from any other lawful source to pay the principal of and interest on the Bonds, or such portion thereof included in a refunding or defeasance plan, as the same become due and payable and to redeem and retire or refund all such then -outstanding Bonds (hereinafter collectively called the "defeased Bonds") and to pay the costs of such refunding or defeasance. If money and/or "government obligations" (as defined in Chapter 39.53 RCW, as now or here- after amended) maturing at a time or times and bearing interest in amounts (together with money, if necessary) sufficient to - 8 - redeem and retire or refund the defeased Bonds in accordance with their terms are set aside irrevocably in a special trust fund irrevocably pledged to that redemption and retirement of defeased Bonds (hereinafter called the "trust account"), then all right and interest of the owners of the defeased Bonds in the covenants of this ordinance and in the funds and accounts obligated to the payment of such defeased Bonds thereafter shall cease and become void. Such owners thereafter shall have the right to receive payment of the principal of and interest on the defeased Bonds from the trust account, and the defeased Bonds shall be deemed not to be outstanding hereunder. The City then may apply any money in any other fund or account established for the payment or redemption of the defeased Bonds to any lawful purposes as it shall determine. Section 11. Creation of Special Funds. There is created and established in the office of the City Finance Director a special fund to be known and designated as the Limited Tax General Obligation Bond Fund, 1987 (the "Bond Fund"). The accrued interest received, if any, upon the sale and delivery of the Bonds shall be paid into the Bond Fund. There also is created and established in the office of the City Finance Director a special fund to be known and designated as the Library Acquisition and Construction Fund, 1987 (the "Acquisition/Construction Fund"), of the City. The principal proceeds received from the sale and delivery of the Bonds shall be paid into the Acquisition/Construction Fund, and used for the purposes specified in Section 2 of this ordinance and to pay the costs of issuance and sale of the Bonds. Pending the expendi- ture of such principal proceeds, the City temporarily may invest such proceeds in any legal investment and the investment earnings may be retained in the Acquisition/Construction Fund and expended for the purposes of such fund, subject to the - 9 - provisions of Section 9 of this ordinance. All taxes collected for and allocated to the payment of the principal of and inter- est on the Bonds hereafter shall be deposited in the Bond Fund. Section 12. Sale and Delivery of Bonds. Shearson Lehman Brothers Inc., Foster & Marshall Division, of Seattle, Washington, has presented a purchase contract dated August 18, 1987 (the "Bond Purchase Contract"), to the City offering to purchase the Bonds under the terms and conditions provided in the Bond Purchase Contract, which is on file with the City Clerk and is incorporated herein by this reference. The City Council finds that entering into the Bond Purchase Contract is in the City's best interest and therefore accepts the offer contained therein and authorizes the execution thereof by City officials. The Bonds will be printed at City expense and will be delivered to the purchaser in accordance with the Bond Purchase Contract, with the approving legal opinion of Roberts & Shefelman, municipal bond counsel of Seattle, Washington, rela- tive to the issuance of the Bonds, printed on each Bond. Bond counsel has not been retained to and shall not be required to review and shall express no opinion concerning the completeness or accuracy of any official statement, offering circular or other sales material issued or used in connection with the Bonds, and bond counsel's opinion shall so state. The appropriate City officers are authorized to execute such documents, including the official statement, and perform such other requirements as may be necessary to effect the prompt delivery of the Bonds to the purchaser. Section 13. Temporary Bond. Pending the printing, execu- tion and delivery to the purchaser of the definitive Bonds, the City may cause to be executed and delivered to such purchaser a single temporary Bond in the total principal amount of the - 10 - Bonds. Such temporary Bond shall bear the same date of issu- ance, interest rates, principal payment dates and terms and covenants as the definitive Bonds, shall be issued as a fully registered Bond in the name of such purchaser, and shall be in such form as is acceptable to such purchaser. Such temporary Bond shall be exchanged for the definitive Bonds as soon as the same are printed, authenticated and available for delivery. Section 14. Effective Date. This ordinance shall take effect and be in force five days from and after its passage, approval and publication as provided by law. DPO-KE-L&E-HER, Mayor fez; ATTEST: MARIE JENSF CITY CLERK APPR VED AS TO FORM: SANDRA DRISCOLL, CIT TTORNEY PASSED the / , day of Com/ 1987. C_J APPROVED the _�kO day of 1987. PUBLISHED the ori day of 1987. Lj I hereby certify that this is a true and correct copy of Ordinance No. 2739, passed by the City Council of the City of Kent, Washington, and approved by the Mayor of the City of Kent as hereon indicated. (Seal) MARIE JENS_DY, City Clerk 3256k