HomeMy WebLinkAbout3778Ordinance No. 3778
(Amending or Repealing Ordinances)
CFN=104 - LTGO Bonds
Passed - 12/13/2005
LTGO Bonds, 2006
ORDINANCE NO. -� 770
AN ORDINANCE of the City of Kent,
Washington, relating to contracting indebtedness; providing
for the issuance of $12,000,000 par value of Limited Tax
General Obligation Bonds, 2006, of the City for general
City purposes to provide funds with which to pay costs of
completing construction of existing City recreational parks
and the acquisition of additional land for park purposes;
fixing the date, form, maturities, interest rates, terms and
covenants of the bonds; establishing a bond redemption
fund and a construction and acquisition fund; providing for
bond insurance; and approving the sale and providing for
the delivery of the bonds to Banc of America Securities
LLC of Seattle, Washington.
PASSED: December 13, 2005
This document prepared by -
Foster Pepper & Shefelman PLLC
1111 Third Avenue, Suite 3400
Seattle, Washington 98101
(206) 447-4400
LTGO Bonds, 2006
TABLE OF CONTENTS
Page
SECTION1. — Debt Capacity........................................................................................2
SECTION 2. — Authorization of Bonds.........................................................................2
SECTION 3. — Description of Bonds.............................................................................2
SECTION 4. — Registration and Transfer of Bonds.......................................................3
SECTION 5. — Payment of Bonds.................................................................................. 5
SECTION 6. — Redemption of Provisions and Open Market Purchase of Bonds.........
5
SECTION 7. — Notice of Redemption............................................................................ 6
SECTION S. — Failure To Redeem Bonds..................................................................... 7
SECTION9. — Pledge of Taxes.....................................................................................7
SECTION 10. — Form and Execution of Bonds.............................................................7
SECTION11. — Bond Registrar.....................................................................................
8
SECTION 12. — Preservation of Tax Exemption for Interest on Bonds ........................ 9
SECTION 13. — Refunding or Defeasance of the Bonds...............................................9
SECTION 14. — Bond Fund and Deposit of Bond Proceeds........................................10
SECTION 15. — Approval of Bond Purchase Agreement............................................11
SECTION 16 — Preliminary Official Statement Deemed Final .................................. I l
SECTION 17. — Undertaking to Provide Continuing Disclosure................................12
SECTION 18. — Bond Insurance..................................................................................15
SECTION 19. — Effective Date of Ordinance..............................................................19
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CITY OF KENT, WASHINGTON
ORDINANCE NO. 3 7 7 �
AN ORDINANCE of the City of Kent,
Washington, relating to contracting indebtedness;
providing for the issuance of $12,000,000 par value of
Limited Tax General Obligation Bonds, 2006, of the City
for general City purposes to provide funds with which to
pay costs of completing construction of existing City
recreational parks and the acquisition of additional land
for park purposes, fixing the date, form, maturities,
interest rates, terms and covenants of the bonds;
establishing a bond redemption fund and a construction
and acquisition fund; providing for bond insurance; and
approving the sale and providing for the delivery of the
bonds to Banc of America Securities LLC of Seattle,
Washington.
RECITALS
A. The City of Kent, Washington (the "City"), is in need of
completing construction of the City's Service Club Ballfields, East Hill Skate Park,
Town Square Plaza and acquiring additional land for park purposes, the estimated cost
of which is in excess of $12,000,000, and the City does not have available sufficient
funds to pay the cost; and
B. MBIA Insurance Corporation of Armonk, New York (the "Bond
Insurer', has made a commitment to issue an insurance policy (the "Financial
Guaranty Insurance Policy") insuring the payment when due of the principal of and
interest on the Bonds as provided therein, and the City Council of the City deems that
the purchase of the Financial Guaranty Insurance Policy is in the best interest of the
City; and
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C. Banc of America Securities LLC has offered to purchase the
Bonds under the terms and conditions hereinafter set forth;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF
KENT, WASHINGTON, DO ORDAIN AS FOLLOWS:
SECTION I — Debt Capacity. The assessed valuation of the taxable
property within the City as ascertained by the last preceding assessment for City
purposes for the calendar year 2005 is $8,798,031,223, and the City has outstanding
general indebtedness evidenced by limited tax general obligation bonds, notes, leases
and conditional sales contracts in the principal amount of $81,041,132 incurred within
the limit of up to 1-1/2% of the value of the taxable property within the City permitted
for general municipal purposes without a vote of the qualified voters therein, unlimited
tax general obligation bonds in the principal amount of $4,950,000 incurred within the
limit of up to 2 1/2% of the value of the taxable property within the City for capital
purposes only, issued pursuant to a vote of the qualified voters of the City, and the
amount of indebtedness for which bonds are authorized herein to be issued is
$12,000,000.
SECTION 2. — Authorization of Bonds. The City shall borrow money
on the credit of the City and issue negotiable limited tax general obligation bonds
evidencing that indebtedness in the amount of $12,000,000 for general City purposes
to provide the funds to pay costs of completing construction of the City's Service Club
Ballfields, East Hill Skate Park, Town Square Plaza and acquiring additional land for
park purposes (the "Project") and to pay the costs of issuance and sale of the bonds
(the "costs of issuance"). The general indebtedness to be incurred shall be within the
limit of up to 1-1/2% 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, 2006, of the City (the "Bonds"); shall be in the
aggregate principal amount of $12,000,000; shall be dated the date of their initial
delivery; shall be in the denomination of $5,000 or any integral multiple thereof within
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a single maturity; shall he numbered separately in the manner and with any additional
designation as the fiscal agent of the state of Washington (as the same may be
designated by the state of Washington from time to time) (the "Bond Registrar") deems
necessary for purposes of identification; shall bear interest (computed on the basis of a
360 day year of twelve 30 day months) payable semiannually on each June 1 and
December 1, commencing June 1, 2006, to the maturity or earlier redemption of the
Bonds; and shall mature on December 1 in years and amounts and bear interest at the
rates per annum as follows:
Maturity Interest
Years Amounts Rates
2008
$ 200,000
4.000%
2009
400,000
4.000
2010
300,000
4.000
2011
300,000
4.000
2012
300,000
4.000
2013
300,000
4.000
2014
800,000
4.500
2015
800,000
5.000
2016
800,000
4.000
2017
800,000
4.000
2018
800,000
4.250
2019
700,000
4 250
2020
800,000
4 375
2021
1,100,000
4.250
2022
1,200,000
4.375
2023
1,400,000
4.500
2024
1,000,000
4.500
The life of the capital facilities to be constructed and land to be acquired with the
proceeds of the Bonds exceeds the term of the Bonds.
SECTION 4. — Registration and Transfer of Bonds. The Bonds shall
be issued only in registered form as to both principal and interest and shall be recorded
on books or 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 amount and number of each of the Bonds held by each owner.
Bonds surrendered to the Bond Registrar may be exchanged for Bonds
in any authorized denomination of an equal aggregate principal amount and of the
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same interest rate and maturity. Bonds may be transferred only if endorsed in the
manner provided thereon and surrendered to the Bond Registrar. Any exchange or
transfer shall be without cost to the owner or transferee. The Bond Registrar shall not
be obligated to exchange or transfer any Bond during the 15 days preceding any
principal payment or redemption date.
The Bonds initially shall be registered in the name of Cede & Co., as
the nominee of The Depository Trust Company, New York, New York ("DTC"). The
Bonds so registered shall be held in fully immobilized form by DTC as depository in
accordance with the provisions of a Blanket Issuer Letter of Representations dated
March 16, 1999, between the City and DTC (as it may be amended). Neither the City
nor the Bond Registrar shall have any responsibility or obligation to DTC participants
or the persons for whom they act as nominees with respect to the Bonds regarding
accuracy of any records maintained by DTC or DTC participants of any amount in
respect of principal of or interest on the Bonds, or any notice which is permitted or
required to be given to registered owners hereunder (except such notice as is required
to be given by the Bond Registrar to DTC).
For as long as any Bonds are held in fully immobilized form, DTC, its
nominee or its successor depository shall be deemed to be the registered owner for all
purposes hereunder and all references to registered owners, bondowners, bondholders
or the tike shall mean DTC or its nominee and shall not mean the owners of any
beneficial interests in the Bonds. Registered ownership of such Bonds, or any portions
thereof, may not thereafter be transferred except: (i) to any successor of DTC or its
nominee, if that successor shall be qualified under any applicable laws to provide the
services proposed to be provided by it; (ii) to any substitute depository appointed by
the City or such substitute depository's successor; or (iii) to any person if the Bonds
are no longer held in immobilized form.
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 that it no longer wishes to continue the system of book entry transfers through
DTC or its successor (or any substitute depository or its successor), the City may
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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.
If (i) DTC or its successor (or substitute depository or its successor)
resigns from its functions as depository, and no substitute depository can be obtained,
or (ii) the City determines that the Bonds are to be in certificated form, the ownership
of Bonds may be transferred to any person as provided herein and the Bonds no longer
shall be held in fully immobilized form.
SECTION S — Payment of Bonds. Both principal of and interest on the
Bonds shall be payable in lawful money of the United States of America. Interest on
the Bonds shall be paid by checks or drafts of the Bond Registrar mailed on the interest
payment date to the registered owners at the addresses appearing on the Bond Register
on the 15s' day of the month preceding the interest payment date or, if requested in
writing by a registered owner of Bonds prior to the applicable record date, by wire
transfer on the interest payment date, provided that, the costs of such wire transfer shall
be paid by the requesting registered owner. Principal of the Bonds shall be payable
upon presentation and surrender of the Bonds by the registered owners to the Bond
Registrar. Notwithstanding the foregoing, for as long as the Bonds are registered in the
name of DTC or its nominee, payment of principal of and interest on the Bonds shall
be made in the manner set forth in the Letter of Representations.
SECTION 6. — Redemption of Provisions and Open Market Purchase
of Bonds Bonds maturing in the years 2008 through 2015, inclusive, shall be issued
without the right or option of the City to redeem those Bonds prior to their stated
maturity dates. The City reserves the right and option to redeem the Bonds maturing
on or after December 1, 2016, prior to their stated maturity dates at any time on or after
December 1, 2015, as a whole or in part (within one or more maturities selected by the
City and randomly within a maturity in such manner as the Bond Registrar shall
determine), at par plus accrued interest to the date fixed for redemption.
Portions of the principal amount of any Bond, in installments of $5,000
or any integral multiple thereof, may be redeemed. If less than all of the principal
amount of any Bond is redeemed, upon surrender of that Bond to the Bond Registrar,
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there shall be issued to the registered owner, without charge therefor, a new Bond (or
Bonds, at the option of the registered owner) of the same maturity and interest rate in
any of the denominations authorized by this ordinance in the aggregate principal
amount remaining unredeemed.
The City further reserves the right and option to purchase any or all of
the Bonds in the open market at any time at any price acceptable to the City plus
accrued interest to the date of purchase.
All Bonds purchased or redeemed under this section shall be canceled.
Notwithstanding the foregoing, for as long as the Bonds are registered
in the name of DTC or its nominee, selection of Bonds for redemption shall be in
accordance with the Letter of Representations.
SECTION 7 — Notice of Redemption. The City shall cause notice of
any intended redemption of Bonds to be given not less than 30 nor more than 60 days
prior to the date fixed for redemption by first-class mail, postage prepaid, to the
registered owner of any Bond to be redeemed at the address appearing on the Bond
Register at the time the Bond Registrar prepares the notice, and the requirements of
this sentence shall be deemed to have been fulfilled when notice has been mailed as so
provided, whether or not it is actually received by the owner of any Bond. Interest on
Bonds called for redemption shall cease to accrue on the date fixed for redemption
unless the Bond or Bonds called are not redeemed when presented pursuant to the call.
In addition, the redemption notice shall be mailed within the same period, postage
prepaid, to Moody's Investors Service, Inc., and Standard & Poor's at their offices in
New York, New York, or their successors, to the Bond Insurer, at its principal office in
Armonk, New York, or its successor, to each NRMSIR or the MSRB and to such other
persons, including registered securities depositories, and with such additional
information as the City Finance Director shall determine, but these additional mailings
shall not be a condition precedent to the redemption of Bonds. Notwithstanding the
foregoing, for as long as the Bonds are registered in the name of DTC or its nominee,
notice of redemption shall be given in accordance with the Letter of Representations.
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SECTION 8. — Failure To Redeem Bonds. If any Bond is not
redeemed when properly presented at its maturity or call date, the City shall be
obligated to pay interest on that Bond at the same rate provided in the Bond from and
after its maturity or call date until that Bond, both principal and interest, is paid in full
or until sufficient money for its payment in full is on deposit in the bond redemption
fund hereinafter created and the Bond has been called for payment by giving notice of
that call to the registered owner of each of those unpaid Bonds.
SECTION 9 — Pledge of Taxes. For as long as any of the Bonds are
outstanding, the City irrevocably pledges to include in its budget and levy taxes
annually within the constitutional and statutory tax limitations provided by law without
a vote of the electors of the City on all of the taxable property within the City in an
amount sufficient, together with other money legally available and to be used therefor,
to pay when due the principal of and interest on the Bonds, 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.
SECTION 10. — Form and 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 and shall be signed by the Mayor and City Clerk, either or
both of whose signatures may be manual or in facsimile, and the seal of the City or a
facsimile reproduction thereof shall be impressed or printed thereon.
Only Bonds bearing a Certificate of Authentication in the following
form, manually signed by the Bond Registrar, shall be valid or obligatory for any
purpose or entitled to the benefits of this ordinance:
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CERTIFICATE OF AUTHENTICATION
This Bond is one of the fully registered City of Kent,
Washington, Limited Tax General Obligation Bonds, 2006, described in the
Bond Ordinance.
WASHINGTON STATE FISCAL AGENT
Bond Registrar
Authorized Signer
The authorized signing of a Certificate of Authentication shall be conclusive evidence
that the Bond so authenticated has been duly executed, authenticated and delivered and
is entitled to the benefits of this ordinance.
If any officer whose facsimile signature appears on the Bonds ceases to
be an officer of the City authorized to sign bonds before the Bonds bearing his or her
facsimile signature are authenticated or delivered by the Bond Registrar or issued by
the City, those Bonds nevertheless may be authenticated, issued and delivered and,
when authenticated, issued and delivered, shall be as binding on the City as though that
person had continued to be an officer of the City authorized to sign bonds. Any Bond
also may be signed on behalf of the City by any person who, on the actual date of
signing of the Bond, is an officer of the City authorized to sign bonds, although he or
she did not hold the required office on the date of issuance of the Bonds.
SECTION II. — Bond Re.2istrar. The Bond Registrar shall keep, or
cause to be kept, sufficient books for the registration and transfer of the Bonds, which
shall be open to inspection by the City at all times. The Bond Registrar is authorized,
on behalf of the City, to authenticate and deliver Bonds transferred or exchanged in
accordance with the provisions of the Bonds and this ordinance, to serve as the City's
paying agent for the Bonds and to carry out all of the Bond Registrar's powers and
duties under this ordinance 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 representations
contained in the Bond Registrar's Certificate of Authentication on the Bonds. The
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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 12 — Preservation of Tax Exemption for Interest on Bonds.
The City covenants that it will take all actions necessary to prevent interest on the
Bonds from being included in gross income for federal income tax purposes, and it will
neither take any action nor make or permit any use of proceeds of the Bonds or other
funds of the City treated as proceeds of the Bonds at any time during the term of the
Bonds which will cause interest on the Bonds to be included in gross income for
federal income tax purposes. The City also covenants that it will, to the extent the
arbitrage rebate requirement of Section 148 of the Internal Revenue Code of 1986, as
amended (the "Code"), is applicable to the Bonds, take all actions necessary to comply
(or to be treated as having complied) with that requirement in connection with the
Bonds, including the calculation and payment of any penalties that the City has elected
to pay as an alternative to calculating rebatable arbitrage, and the payment of any other
penalties if required under Section 148 of the Code to prevent interest on the Bonds
from being included in gross income for federal income tax purposes.
SECTION 13. — Refund:nF or Defeasance of the Bonds. The City may
issue refunding bonds pursuant to the laws of the State of Washington or use money
available from any other lawful source to pay when due the principal of and interest on
the Bonds, or any portion thereof included in a refunding or defeasance plan, and to
redeem and retire, refund or defease all such then -outstanding Bonds (hereinafter
collectively called the "defeased Bonds") and to pay the costs of the refunding or
defeasance. If money and/or direct obligations of the United States of America
maturing at a time or times and bearing interest in amounts (together with money, if
necessary) sufficient to redeem and retire, refund or defease the defeased Bonds in
accordance with their terms are set aside in a special trust fund or escrow account
irrevocably pledged to that redemption, retirement or defeasance of defeased Bonds
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(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 the defeased Bonds shall cease and become void. The
owners of defeased Bonds shall have the right to receive payment of the principal of
and interest on the defeased Bonds from the trust account. The City shall include in
the refunding or defeasance plan such provisions as the City deems necessary for the
random selection of any defeased Bonds that constitute less than all of a particular
maturity of the Bonds, for notice of the defeasance to be given to the owners of the
defeased Bonds and to such other persons as the City shall determine, and for any
required replacement of Bond certificates for defeased Bonds. The defeased Bonds
shall be deemed no longer outstanding, and the City 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.
Notwithstanding anything in this section to the contrary, if the principal
of and/or interest due on the Bonds is paid by the Bond Insurer pursuant to the
Financial Guaranty Insurance Policy, the Bonds shall be treated as remaining
outstanding for all purposes, not defeased or otherwise satisfied and shall not be
considered paid by the City, and the assignment and pledge of the taxes and all other
covenants, agreements and other obligations of the City to the registered owners of the
Bonds shall continue to exist and shall run to the benefit of the Bond Insurer, and the
Bond Insurer shall be subrogated to the rights of those registered owners.
If the Bonds are registered in the name of DTC or its nominee, notice of
any defeasance of Bonds shall be given to DTC in the manner prescribed in the Letter
of Representations for notices of redemption of Bonds.
SECTION 14. — Bond Fund and Deposit of Bond Proceeds. There is
created and established in the office of the City Finance Director a special fund
designated as the Limited Tax General Obligation Bond Fund, 2006 (the "Bond
Fund"), for the purpose of paying principal of and interest on the Bonds. Accrued
interest on the Bonds, if any, received from the sale and delivery of the Bonds shall be
paid into the Bond Fund. All taxes collected for and allocated to the payment of the
principal of and interest on the Bonds shall be deposited in the Bond Fund.
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There also is created and established in the office of the City Finance
Director a special fund designated as the Capital Projects Fund, 2006 (the "Project
Fund"). The principal proceeds received from the sale and delivery of the Bonds shall
be paid into the Project Fund and used for the purposes specified in Section 2 of this
ordinance. Until needed to pay the costs of the Project and costs of issuance of the
Bonds, the City may invest principal proceeds temporarily in any legal investment, and
the investment earnings may be retained in the Project Fund and be spent for the
purposes of that fund except that earnings subject to a federal tax or rebate requirement
may be withdrawn from the Project Fund and used for those tax or rebate purposes.
SECTION 15. — Approval of Bond Purchase Agreement. Banc of
America Securities LLC of Seattle, Washington, has presented a purchase agreement
(the "Bond Purchase Agreement") to the City offering to purchase the Bonds under the
terms and conditions provided in the Bond Purchase Agreement, which written Bond
Purchase Agreement is on file with the City Finance Director and is incorporated
herein by this reference. The City Council finds that entering into the Bond Purchase
Agreement is in the City's best interest and therefore accepts the offer contained
therein and authorizes its execution by City officials.
The Bonds will be printed at City expense and will be delivered to the
purchaser in accordance with the Bond Purchase Agreement, with the approving legal
opinion of Foster Pepper & Shefelman PLLC, municipal bond counsel of Seattle,
Washington, regarding the Bonds.
The proper City officials are authorized and directed to do everything
necessary for the prompt delivery of the Bonds to the purchaser and for the proper
application and use of the proceeds of the sale thereof.
SECTION 16. — Prehminary Oficial Statement Deemed Final. The
City Council has been provided with copies of a preliminary official statement dated
December 5, 2005 (the "Preliminary Official Statement', prepared in connection with
the sale of the Bonds. For the sole purpose of the Bond purchaser's compliance with
Securities and Exchange Commission Rule 15c2 -12(b)(1), the City "deems final" that
Preliminary Official Statement as of its date, except for the omission of information as
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to offering prices, interest rates, selling compensation, aggregate principal amount,
principal amount per maturity, maturity dates, options of redemption, delivery dates,
ratings and other terms of the Bonds dependent on such matters.
SECTION 17. — Undertakinz to Provide Continuing Disclosure. To
meet the requirements of United States Securities and Exchange Commission ("SEC")
Rule 15c2 -12(b)(5) (the "Rule"), as applicable to a participating underwriter for the
Bonds, the City makes the following written undertaking (the "Undertaking") for the
benefit of holders of the Bonds:
(a) Undertaking to Provide Annual Financial Information
and Notice of Material Events. The City undertakes to provide or cause
to be provided, either directly or through a designated agent:
(i) To each nationally recognized municipal
securities information repository designated by the SEC in accordance
with the Rule ("NKMSIR") and to a state information depository, if any,
established in the State of Washington (the "SID") annual financial
information and operating data of the type included in the final official
statement for the Bonds and described in subsection (b) of this section
("annual financial information';
(ii) To each NRMSIR or the Municipal Securities
Rulemaking Board ("MSRB"), and to the SID, timely notice of the
occurrence of any of the following events with respect to the Bonds, if
material: (1) principal and interest payment delinquencies; (2) non-
payment related defaults; (3) unscheduled draws on debt service
reserves reflecting financial difficulties; (4) unscheduled draws on
credit enhancements reflecting financial difficulties; (5) substitution of
credit or liquidity providers, or their failure to perform; (6) adverse tax
opinions or events affecting the tax-exempt status of the Bonds;
(7) modifications to rights of holders of the Bonds; (S) Bond calls (other
than scheduled mandatory redemptions of Term Bonds);
(9) defeasances; (10) release, substitution, or sale of property securing
repayment of the Bonds; and (11) rating changes; and
(iii) To each NRMSIR or to the MSRB, and to the
SID, timely notice of a failure by the City to provide required annual
financial information on or before the date specified in subsection (b) of
this section.
(b) Type of Annual Financial Information Undertaken to be
Provided. The annual financial information that the City undertakes to
provide in subsection (a) of this section:
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(i) Shall consist of (1) annual financial statements
prepared (except as noted in the financial statements) in accordance
with applicable generally accepted accounting principles applicable to
governmental units, as such principles may be changed from time to
time and as permitted by State law, which statements shall not be
audited, except, however, that if and when audited financial statements
are otherwise prepared and available to the City they will be provided;
(2) authorized, issued and outstanding balance of general obligation
bonds; (3) assessed valuation for the fiscal year; and (4) regular
property tax levy rate and regular property tax levy rate limit for the
fiscal year;
(ii) Shall be provided to each NRMSIR and the SID,
not later than the last day of the ninth month after the end of each fiscal
year of the City (currently, a fiscal year ending December 31), as such
fiscal year may be changed as required or permitted by State law,
commencing with the City's fiscal year ending December 31, 2006; and
(iii) May be provided in a single or multiple
documents, and may be incorporated by reference to other documents
that have been filed with each NRMSIR and the SID, or, if the
document incorporated by reference is a "final official statement" with
respect to other obligations of the City, that has been filed with the
MSRB.
(c) Amendment of Undertaking. The Undertaking is subject
to amendment after the primary offering of the Bonds without the
consent of any holder of any Bond, or of any broker, dealer, municipal
securities dealer, participating underwriter, rating agency, NRMSIR, the
SID or the MSRB, under the circumstances and in the manner permitted
by the Rule.
The City will give notice to each NRMSIR or the MSRB, and
the SID, of the substance (or provide a copy) of any amendment to the
Undertaking and a brief statement of the reasons for the amendment. If
the amendment changes the type of annual financial information to be
provided, the annual financial information containing the amended
financial information will include a narrative explanation of the effect
of that change on the type of information to be provided.
(d) Beneficiaries. The Undertaking evidenced by this
section shall inure to the benefit of the City and any holder of Bonds,
and shall not inure to the benefit of or create any rights in any other
person.
(e) Termination of Undertaking. The City's obligations
under this Undertaking shall terminate upon the legal defeasance of all
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of the Bonds. In addition, the City's obligations under this Undertaking
shall terminate if those provisions of the Rule which require the City to
comply with this Undertaking become legally inapplicable in respect of
the Bonds for any reason, as confirmed by an opinion of nationally
recognized bond counsel or other counsel familiar with federal
securities laws delivered to the City, and the City provides timely notice
of such termination to each NRMSIR or the MSRB and the SID.
(f) Remedy for Failure to Comply with Undertaking. As
soon as practicable after the City learns of any failure to comply with
the Undertaking, the City will proceed with due diligence to cause such
noncompliance to be corrected. No failure by the City or other
obligated person to comply with the Undertaking shall constitute a
default in respect of the Bonds. The sole remedy of any holder of a
Bond shall be to take such actions as that holder deems necessary,
including seeking an order of specific performance from an appropriate
court, to compel the City or other obligated person to comply with the
Undertaking.
(g) Desisnation of Official Responsible to Administer
Undertakine. The Finance Director of the City (or such other officer of
the City who may in the future perform the duties of that office) or his
or her designee is authorized and directed in his or her discretion to take
such further actions as may be necessary, appropriate or convenient to
carry out the Undertaking of the City in respect of the Bonds set forth in
this section and in accordance with the Rule, including, without
limitation, the following actions:
(i) Preparing and filing the annual financial
information undertaken to be provided;
(ii) Determining whether any event specified in
subsection (a) has occurred, assessing its materiality with respect to the
Bonds, and, if material, preparing and disseminating notice of its
occurrence,
(iii) Determining whether any person other than the
City is an "obligated person" within the meaning of the Rule with
respect to the Bonds, and obtaining from such person an undertaking to
provide any annual financial information and notice of material events
for that person in accordance with the Rule;
(iv) Selecting, engaging and compensating designated
agents and consultants, including but not limited to financial advisors
and legal counsel, to assist and advise the City in carrying out the
Undertaking, and
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LTGD Bonds, 2006
$0595"2 4
(v) Effecting any necessary amendment of the
Undertaking.
(h) Centralized Dissemination Agent. To the extent
authorized by the SEC, the City may satisfy the Undertaking by
transmitting the required filings using http://www.disclosureusa.org (or
such other centralized dissemination agent as may be approved by the
SEC).
SECTION 18. — Bond Insurance. The City Council finds that it is in
the City's best interest to purchase, and that a savings will result from purchasing, the
Financial Guaranty Insurance Policy for the Bonds. The City shall purchase from the
Bond Insurer the Financial Guaranty Insurance Policy insuring the prompt payment of
the principal of and interest on the Bonds and agrees to the conditions for obtaining
that policy, including the payment of the premium therefor and the following
provisions entitled "Payments under the Policy" required by the Bond Insurer to be
included in this ordinance:
"A. In the event that, on the second Business Day, and again
on the Business Day, prior to the payment date on the Obligations, the
Paying Agent [the Bond Registrar] has not received sufficient moneys
to pay all principal of and interest on the Obligations due on the second
following or following, as the case may be, Business Day, the Paying
Agent shall immediately notify the Insurer or its designee on the same
Business Day by telephone or telegraph, confirmed in writing by
registered or certified mail, of the amount of the deficiency.
`B. If the deficiency is made up in whole or in part prior to
or on the payment date, the Paying Agent shall so notify the Insurer or
its designee.
"C. In addition, if the Paying Agent has notice that any
Bondholder has been required to disgorge payments of principal or
interest on the Obligations to a trustee in bankruptcy or creditors or
others pursuant to a final judgment by a court of competent jurisdiction
that such payment constitutes an avoidable preference to such
Bondholder within the meaning of any applicable bankruptcy laws, then
the Paying Agent shall notify the Insurer or its designee of such fact by
telephone or telegraphic notice, confirmed in writing by registered or
certified mail.
15
50593fi62 6 LTGO Bonds, 2006
"D. The Paying Agent is hereby irrevocably designated,
appointed, directed and authorized to act as attorney-in-fact for Holders
of the Obligations as follows:
66
1. If and to the extent there is a deficiency in
amounts required to pay interest on the Obligations, the Paying
Agent shall (a) execute and deliver to U.S. Bank Trust National
Association, or its successors under the Policy (the "Insurance
Paying Agent"), in form satisfactory to the Insurance Paying
Agent, an instrument appointing the Insurer as agent for such
Holders in any legal proceeding related to the payment of such
interest and an assignment to the Insurer of the claims for
interest to which such deficiency relates and which are paid by
the Insurer, (b) receive as designee of the respective Holders
(and not as Paying Agent) in accordance with the tenor of the
Policy payment from the Insurance Paying Agent with respect to
the claims for interest so assigned, and (c) disburse the same to
such respective Holders; and
662. If and to the extent of a deficiency in amounts
required to pay principal of the Obligations, the Paying Agent
shall (a) execute and deliver to the Insurance Paying Agent in
form satisfactory to the Insurance Paying Agent an instrument
appointing the Insurer as agent for such Holder in any legal
proceeding relating to the payment of such principal and an
assignment to the Insurer of any of the Obligation surrendered to
the Insurance Paying Agent of so much of the principal amount
thereof as has not previously been paid or for which moneys are
not held by the Paying Agent and available for such payment
(but such assignment shall be delivered only if payment from the
Insurance Paying Agent is received), (b) receive as designee of
the respective Holders (and not as Paying Agent) in accordance
with the tenor of the Policy payment therefor from the Insurance
Paying Agent, and (c) disburse the same to such Holders.
`E. Payments with respect to claims for interest on and
principal of Obligations disbursed by the Paying Agent from proceeds
of the Policy shall not be considered to discharge the obligation of the
Issuer with respect to such Obligations, and the Insurer shall become the
owner of such unpaid Obligations and claims for the interest in
accordance with the tenor of the assignment made to it under the
provisions of this subsection or otherwise.
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LTGO Bonds, 2006
50597662.
'T. Irrespective of whether any such assignment is executed
and delivered, the Issuer and the Paying Agent hereby agree for the
benefit of the Insurer that:
66
1. They recognize that to the extent the Insurer
makes payments, directly or indirectly (as by paying through the
Paying Agent), on account of principal of or interest on the
Obligations, the Insurer will be subrogated to the rights of such
Holders to receive the amount of such principal and interest
from the Issuer, with interest thereon as provided and solely
from the sources stated in this Indenture and the Obligations;
and
662. They will accordingly pay to the Insurer the
amount of such principal and interest (including principal and
interest recovered under subparagraph (ii) of the first paragraph
of the Policy, which principal and interest shall be deemed past
due and not to have been paid), with interest thereon as provided
in this Indenture and the Obligations, but only from the sources
and in the manner provided herein for the payment of principal
of and interest on the Obligations to Holders, and will otherwise
treat the Insurer as the owner of such rights to the amount of
such principal and interest.
"G. In connection with the issuance of additional
Obligations, the Issuer shall deliver to the Insurer a copy of the
disclosure document, if any, circulated with respect to such additional
Obligations.
"H. Copies of any amendments made to the documents
executed in connection with the issuance of the Obligations which are
consented to by the Insurer shall be sent to Standard & Poor's
Corporation.
"I. The Insurer shall receive notice of the resignation or
removal of the Paying Agent and the appointment of a successor
thereto.
"J. The Insurer shall receive copies of all notices required to
be delivered to Bondholders and, on an annual basis, copies of the
Issuer's audited financial statements and Annual Budget.
"Notices: Any notice that is required to be given to a holder of
the Obligation or to the Paying Agent pursuant to the Indenture shall
also be provided to the Insurer. All notices required to be given to the
Insurer under the Indenture shall be in writing and shall be sent by
17
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LTGO Bonds, 2006
registered or certified mail addressed to MBIA Insurance Corporation,
113 King Street, Armonk, New York 10504 Attention: Surveillance."
"K. The Issuer/Obligor agrees to reimburse the Insurer
immediately and unconditionally upon demand, to the extent permitted
by law, for all reasonable expenses, including attorneys' fees and
expenses, incurred by the Insurer in connection with (i) the enforcement
by the Insurer of the Issuer's/Obligator's obligations, or the preservation
or defense of any rights of the Insurer, under this Resolution/Indenture
and any other document executed in connection with the issuance of the
Obligations, and (ii) any consent, amendment, waiver or other action
with respect to the Resolution/Indenture or any related document,
whether or not granted or approved, together with interest on all such
expenses from and including the date incurred to the date of payment at
Citibank's Prime Rate plus 3% or the maximum interest rate permitted
by law, whichever is less. In addition, the Insurer reserves the right to
charge a fee in connection with its review of any such consent,
amendment or waiver, whether or not granted or approved.
"L. The Issuer/Obligor agrees not to use MBIA's name in
any public document including, without limitation, a press release or
presentation, announcement or forum without MBIA's prior consent;
provided, however, such prohibition on the use of the Insurer's name
shall not relate to the use of the Insurer's standard approved form of
disclosure in public documents issued in connection with the current
Obligations to be issued in accordance with the terms of the
Commitment; and provided further such prohibition shall not apply to
the use of the Insurer's name in order to comply with public notice,
public meeting or public reporting requirements.
"M. The Issuer/Obligor shall not enter into any agreement nor
shall it consent to or participate in any arrangement pursuant to which
Bonds are tendered or purchased for any purpose other than the
redemption and cancellation or legal defeasance of such Bonds without
the prior written consent of MBIA."
Any notices required to be given under the terms of this resolution shall also be given
to the Bond Insurer, Attn.: Insured Portfolio Management.
18
LTGO Bonds, 2006
50595604
SECTION 19. — Effective Date of Ordinance. This ordinance shall take
effect and be in force from and after its passage and five days following its publication
as required by law.
ATTEST:
z�
BRENDA JACOBER, CIV CLERK
APPROVED AS TO FORM: •,.••••••••.`�
% i
(/ /A` Imo`^ ���I,V �� • y
FOSTER PEPPER & SHEFELMAN PLLC
1100 % •:
Special Counsel and Bond Counsel..,•••,, '
PASSED: day of December, 2005.
APPROVED: day of December, 2005.
PUBLISHED: day of December, 2005.
19
sossssax4
LTGO Bonds, 2006
CERTIFICATION
I, the undersigned, City Clerk of the City of Kent, Washington (the "City',
hereby certify as follows:
1. The attached copy of Ordinance No. -;2ff(the "Ordinance's is a full,
true and correct copy of an ordinance duly passed at a regular meeting of the City
Council of the City held at the regular meeting place thereof on December 13, 2005, as
that ordinance appears on the minute book of the City; and the Ordinance will be in
full force and effect five days after publication in the City's official newspaper; and
2. A quorum of the members of the City Council was present throughout
the meeting and a majority of those members present voted in the proper manner for
the passage of the Ordinance.
IN WITNESS WHEREOF, I have hereunto set my hand this 13th day of
December, 2005.
SOM662 4
CITY OF KENT, WASHINGTON
c� G�
Brenda Jacober, City rk