HomeMy WebLinkAboutCity Council Committees - Operations Committee - 03/19/2013
Operations Committee Agenda
Councilmembers: Dennis Higgins * Jamie Perry * Les Thomas, Chair
Unless otherwise noted, the Operations Committee meets at 4:00 p.m. on the first and third Tuesday of each
month. Council Chambers East, Kent City Hall, 220 4th Avenue South, Kent, 98032 -5895. Dates and times are
subject to change. For information please contact Satwinder Kaur at (253) 856-5705.
Any person requiring a disability accommodation should contact the City Clerk’s Office at (253) 856-
5725 in advance.
For TDD relay service call the Washington Telecommunications Relay Service at
1-800-833-6388.
March 19, 2013
4:00 p.m.
Item Description Action Speaker Time Page
1. Approval of Minutes YES 1
dated March 5, 2013.
2. Approval of Check Summary YES
Report dated 2/16/2013 through
2/28/2013.
3. Gambling Tax for House Banked YES B. Nachlinger 5 Min 3
Card Rooms.
4. Issuance of the Consolidated YES B. Nachlinger 5 Min 7
LID #363 Bonds- Authorize.
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OPERATIONS COMMITTEE MINUTES
March 5, 2013
Committee Members Present: Les Thomas, Chair, Dennis Higgins and Jamie Perry
The meeting was called to order by L. Thomas at 4:02 p.m.
1. APPROVAL OF MINUTES DATED FEBRUARY 5, 2013.
J. Perry moved to approve the Operations Committee minutes dated
February 5, 2013. D. Higgins seconded the motion, which passed 3-0.
2. APPROVAL OF CHECK SUMMARY REPORTS DATED 1/15/2013 THROUGH
1/31/2013 AND 2/1/2013 THROUGH 2/15/2013.
D. Higgins moved to recommend that the City Council approve the Check Summary
Reports dated January 15, 2013 through January 31, 2013 and February 1, 2013 through
February 15, 2013. J. Perry seconded the motion, which passed 3-0.
3. WRITE-OFFS OF UNCOLLECTABLE AMOUNTS- AUTHORIZE.
B. Nachlinger presented the write-offs of uncollectable accounts which are in bankruptcy or have
passed the six year collection period. These accounts have already gone through collections. They
do not have any budget impact as they were already reserved as doubtful accounts.
J. Perry moved to recommend that the City Council authorize the write-off of
uncollectable accounts in the amount of $48,069.62. D. Higgins seconded the motion,
which passed 3-0.
The meeting was adjourned at 4:09 p.m. by D. Higgins.
___________________
Satwinder Kaur
Operations Committee Secretary
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OFFICE OF THE MAYOR
Suzette Cooke, Mayor
Phone: 253-856-5700
Fax: 253-856-6700
220 Fourth Avenue S.
Kent, WA. 98032-5895
DATE: March 19, 2013
TO: Kent City Council Operations Committee
FROM: John Hodgson, Chief Administrative Officer
THROUGH: Suzette Cooke, Mayor
SUBJECT: Reducing Gambling Tax for House Banked Card Rooms
MOTION: Move to reduce the amount of gambling tax from 11% to __% of the
gross amount of revenue from Housed Banked Social Cards games, with a
sunset of December 31, 2016.
SUMMARY: The Great American Casino is the only housed banked social card room in
Kent. The city of Kent has authority to impose a 20% tax rate on gross revenues for
house banked social card rooms. The current rate is 11%.
The Great American Casino has requested that the city reduce the rate from 11% to 4%
now through December 31, 2016. The Great American Casino notes that they need the
reduction to correct the impact on their business and ability to remain viable. Staff will
present information for city council to make a decision.
BUDGET IMPACT: The reduction in the gambling tax would amount to approximately
$30,230 for each 1% reduction.
EXHIBITS: Letter of Request and back up information from Great American Casino,
comparative chart of tax rates of Kent and neighboring cities.
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GREAT AMERICAN CASINO 20500 108th Ave SE Kent, WA 98031 tel:253-813-8355
February 26, 2013
To whom it may concern:
In connection with the current economic conditions existing within the State and in
particular those that affect our local Kent market, revenues from the social card game
activity at our location have suffered significantly. This reduction in business has also
significantly reduced tax revenues to the city of Kent.
In 2012, we reinvested in our facility with the expectation that improvements to the décor
and comfort of our guests would result in increased visitation and improved revenues.
To date we have not realized any meaningful improve to our revenues.
In order to provide relief during this economic downturn, we ask that the City of Kent
adopt an ordinance to reduce the amount of tax applicable from 11% down to four
percent of the gross amount of revenue received from the social card games (gambling
tax), with a sunset term of 12/31/16. Alternatively, the lower tax rate would also remain
in place for a minimum of two years of operation should a relocation be approved
outside the Panther Lake area in the original city limits.
Our neighboring competitor in Auburn successfully achieved this reduction for a second
two year term to end 12/31/14. Reference Auburn ordinance no. 6427.
The chart below shows the trends we’ve experienced over the last 5 year period. The
gambling tax paid has declined significantly from 2008 to 2102 and is consistent with the
profitability of our business. As shown on our attached audited financial statements, the
net operating loss in 2011 was $649,177 and 2012 was $533,038. In order for Great
American Casino to remain open and continue to employ just over 100 staff, we ask for
your consideration on this relief in our gambling tax.
Sincerely,
GREAT AMERICAN CASINO - KENT
Shannon Younker
General Manager
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Great American Casino – Kent
Taxes Paid 2008 to 2012
2008 2009 2010 2011 2012 TOTAL
Gambling Tax 582,674 470,510 418,006 333,473 332,066 2,136,730
Property Tax 11,204 9,091 7,767 7,800 8,360 60,916
B&O Taxes 85,600 70,935 71,141 60,393 60,764 348,833
WA Sales/Use Taxes 25,910 22,937 28,226 22,919 23,380 123,372
City Sales/Use Taxes 11,560 18,452 12,922 10,578 10,791 64,303
Payroll Taxes 328,153 298,515 249,942 224,232 232,099 1,332,941
Wa SUI & L&I Taxes 79,610 72,248 73,534 64,380 71,461 361,233
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Gambling Tax Rates - 2013
Activity Kent Renton Tukwila Auburn Federal Way
Card Rooms 11% - gross 10% - gross(1)10% - gross(2)4% - gross(3)10% - gross
Pull Tabs-Commercial 10% - gross less awards 5% - gross 5% - gross 10% - gross less awards(4)3% - gross
Pull Tabs-Non Profit 10% - gross less awards 10% - gross less awards 10% - gross less awards 10% - gross less awards(4)10% - gross less awards
Punchboards 10% - gross less awards 5% - gross 10% - gross less awards 10% - gross less awards(4)3% - gross
Bingo 5% - gross less awards 5% - gross less awards 5% - gross less awards 5% - gross less awards 5% - gross less awards
Raffles 5% - gross less awards 5% - gross less awards 5% - gross less awards 5% - gross less awards 5% - gross less awards
Amusement 2% - gross less awards 2% - gross less awards 2% - gross less awards 2% - gross less awards 2% - gross less awards
(1) Or $125 per quarter, whichever is greater
(2) The rate increases to 15% when the number of card rooms exceed 5 and when the number exceeds 6 the rate is 20%.
(3) Temporary reduction from 12% effective 10/1/12 through 12/31/14
(4) Change from 5% of gross revenue to 10% of gross receipts less amount awarded as cash/merchandise (eff. 2/27/12)
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OFFICE OF THE MAYOR
Suzette Cooke, Mayor
Phone: 253-856-5700
Fax: 253-856-6700
220 Fourth Avenue S.
Kent, WA. 98032-5895
Date: March 19, 2013
To: Kent City Council Operations Committee
From: R. J. Nachlinger, Finance Director
Through: John Hodgson, Chief Administrative Officer
Subject: Ordinance authorizing the issuance of the Consolidated LID #363
Bonds
SUMMARY: The Administration recommends the issuance of LID Bonds for LID’s
#359 and #362 to reimburse the City for the costs incurred prior to the bonds
being issued. LID #363 is included as the largest of the three LID’s to provide the
funds necessary to construct the project.
BUDGET IMPACT: The budget impact of this bond issuance is negligible as the
bonds payments are from collections of the assessments and are not payable from
City revenues.
BACKGROUND: The assessment roll for LID #359 was authorized by City Council
in January, 2009 with an original assessment of $1,307,177.40. We collected, to
date, $328,633.60 leaving $978,543.90 outstanding from this assessment. This LID
was financed in house until enough LID’s had been issued to justify the issuance of
Bonds. The assessment roll for LID #362 was authorized by City Council in June,
2011 with an original assessment of $2,412,942.02. We have collected to date
$476,817.90 leaving $1,936,124.12 outstanding from this assessment. This LID
was also financed in house until the amount of internally financed LID’s was enough
to issue LID Bonds. LID #363 has been assessed to provide the funds necessary to
Motion: I move to recommend Council approve the ordinance authorizing
the issuance of the Consolidated #363 LID Bonds and authorizing the
Mayor to execute all documents necessary for the issuance, subject the
final terms and conditions acceptable to the City Attorney and Finance
Director.
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undertake the project. The assessment roll was finalized by City Council in
November, 2012 at the amount of $9,150,627.14 and $1,547,715.06 was collected
in the prepayment period leaving $7,602,912.08 in the amount to be financed. The
total of the outstanding assessments outstanding on these three LID’s is
$10,517,580.10 and we will be issuing a like amount over the fifteen year term of
the assessment.
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ORDINANCE NO. _______
AN ORDINANCE OF THE CITY OF KENT, WASHINGTON,
ESTABLISHING CONSOLIDATED LOCAL IMPROVEMENT DISTRICT
NO. 359 ET AL. BY CONSOLIDATING LOCAL IMPROVEMENT DISTRICTS
NO. 359, 362, AND 363; AUTHORIZING THE ISSUANCE OF ITS
CONSOLIDATED LOCAL IMPROVEMENT DISTRICT NO. 359 ET AL.
BONDS IN ONE OR MORE SERIES IN AN AGGREGATE PRINCIPAL
AMOUNT OF NOT TO EXCEED $_____________; PROVIDING THE
FORM AND TERMS OF THE BONDS; AND DELEGATING THE
AUTHORITY TO APPROVE THE FINAL TERMS OF THE BONDS.
PASSED: MARCH 19, 2013
PREPARED BY:
PACIFICA LAW GROUP LLP
Seattle, Washington
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CITY OF KENT
ORDINANCE NO. ____________
TABLE OF CONTENTS*
Page
SECTION 1. - Definitions and Interpretation of Terms .......................................2
SECTION 2. - Consolidation of Local Improvement Districts ...........................7
SECTION 3. - Authorization of Bonds ........................................................................8
SECTION 4. - Registration, Exchange and Payments .........................................9
SECTION 5. - Redemption Prior to Maturity and Purchase of Bonds ..........14
SECTION 6. - Form of Bonds ......................................................................................18
SECTION 7. - Execution of Bonds .............................................................................20
SECTION 8. - Application of Bond Proceeds .........................................................21
SECTION 9. - Tax Covenants ......................................................................................22
SECTION 10. - Bond Fund ..............................................................................................24
SECTION 11. - Pledge of Assessment Payments ...................................................25
SECTION 12. - Defeasance ............................................................................................25
SECTION 13. - Sale of Bonds ........................................................................................26
SECTION 14. - Undertaking to Provide Ongoing Disclosure .............................28
SECTION 15. - Interest Rate on Installments and Delinquent
Payments ............................................................................................................33
SECTION 16. - Lost, Stolen or Destroyed Bonds ..................................................33
SECTION 17. - Severability; Ratification ..................................................................33
SECTION 18. - Effective Date of Ordinance ............................................................34
* This Table of Contents is provided for convenience only and is not a part of this
ordinance.
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CITY OF KENT, WASHINGTON
ORDINANCE NO. _______
AN ORDINANCE OF THE CITY OF KENT, WASHINGTON,
ESTABLISHING CONSOLIDATED LOCAL IMPROVEMENT DISTRICT
NO. 359 ET AL. BY CONSOLIDATING LOCAL IMPROVEMENT DISTRICTS
NO. 359, 362, AND 363; AUTHORIZING THE ISSUANCE OF ITS
CONSOLIDATED LOCAL IMPROVEMENT DISTRICT NO. 359 ET AL.
BONDS IN ONE OR MORE SERIES IN AN AGGREGATE PRINCIPAL
AMOUNT OF NOT TO EXCEED $_____________; PROVIDING THE
FORM AND TERMS OF THE BONDS; AND DELEGATING THE
AUTHORITY TO APPROVE THE FINAL TERMS OF THE BONDS.
A. The City Council of the City of Kent, Washington (the “City”),
previously created Local Improvement District No. 359 (“LID No. 359”), Local
Improvement District No. 362 (“LID No. 362”) and Local Improvement District
No. 363 (“LID No. 363”, and together with LID No. 359 and LID No. 362, the
“LIDs”) for various purposes; and
B. RCW 35.45.160 authorizes the establishment of consolidated local
improvement districts for the purpose of issuing bonds only and provides that if the
governing body of any municipality orders the creation of such consolidated local
improvement district, the money received from the installment payment of the
principal of and interest on assessments levied within the original local improvement
districts shall be deposited in a consolidated local improvement district bond
redemption fund to be used to redeem outstanding consolidated local improvement
district bonds; and
C. After due consideration it appears to the Council that it is in the best
interest of the City that the City establish such a consolidated local improvement
district for the purpose of issuing bonds for the LIDs; and
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D. The Council deems it in the best interest of the City to issue one or
more series of such consolidated local improvement district bonds in the aggregate
principal amount of not to exceed $_________________ (the “Bonds”) to finance
the costs of certain improvements (including repaying, with interest, interfund loans
drawn upon during construction), to make a deposit into the Guaranty Fund, and to
pay costs of issuance of the Bonds; and
E. The Council wishes to delegate authority to the Mayor (the
“Designated Representative”), for a limited time, to approve the interest rates,
maturity dates, redemption terms and principal maturities for the Bonds within the
parameters set by this ordinance; and
F. The City expects to receive a proposal from Piper Jaffray & Co. and
KeyBanc Capital Markets Inc. (together, the “Underwriters”) and now desires to
issue and sell the Bonds to the Underwriters as set forth herein;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF KENT, 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:
Assessments mean the assessments levied pursuant to the LID Ordinances
and not prepaid during the respective legal prepayment period for each LID.
Beneficial Owner means any person that has or shares the power, directly or
indirectly, to make investment decisions concerning ownership of any Bonds
(including persons holding Bonds through nominees, depositories or other
intermediaries).
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Bond Fund means the “City of Kent Consolidated Local Improvement District
No. 359 et al. Bond Redemption Fund” authorized to be created pursuant to this
ordinance.
Bond Purchase Contract means the contract for the purchase of the Bonds
between the Underwriters and the City, executed pursuant to Section 13.
Bond Register means the registration books showing the name, address and
tax identification number of each Registered Owner of the Bonds, maintained
pursuant to Section 149(a) of the Code.
Bond Registrar means, initially, the fiscal agency of the State of Washington,
for the purposes of registering and authenticating the Bonds, maintaining the Bond
Register, effecting transfer of ownership of the Bonds and paying interest on and
principal of the Bonds.
Bond Year means each one-year period that ends on the date selected by the
City. The first and last Bond Years may be short periods. If no date is selected by
the City before the earlier of the final maturity date of any series of Tax-
Exempt Bonds or the date that is five years after the date of issuance of any series
of Tax-Exempt Bonds, Bond Years end on each anniversary of the date of issue and
on the final maturity date of such series of the Tax-Exempt Bonds.
Bonds mean the not to exceed $______________ aggregate principal
amount of City of Kent, Washington, Consolidated Local Improvement District No.
359 et al. Bonds, 2013, authorized to be issued in one or more series pursuant to
this ordinance.
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
City means the City of Kent, Washington, a municipal corporation duly
organized and existing under and by virtue of the Constitution and laws of the State
of Washington.
Code means the Internal Revenue Code of 1986, as amended, and shall
include all applicable regulations and rulings relating thereto.
Commission means the Securities and Exchange Commission.
Council or City Council means the legislative body of the City as duly and
regularly constituted from time to time.
Designated Representative means the Mayor, or his or her designee.
DTC means The Depository Trust Company, New York, New York, a limited
purpose trust company organized under the laws of the State of New York, as
depository for the Bonds pursuant to Section 4.
Finance Director means the Finance Director of the City or the successor to
such officer.
Government Obligations mean those obligations now or hereafter defined as
such in chapter 39.53 RCW.
Guaranty Fund means the Local Improvement District Guaranty Fund of the
City authorized and maintained pursuant to chapter 35.54 RCW and
Section 3.40.500 of the Kent City Code.
Improvements Funds means the Local Improvements Fund established for
each LID by the respective LID Ordinance.
Letter of Representations means the blanket issuer letter of representations
from the City to DTC.
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LID No. 359 means Local Improvement District No. 359 created pursuant to
Ordinance No. 3808 of the City adopted on September 5, 2006.
LID No. 362 means Local Improvement District No. 362 created pursuant to
Ordinance No. 3833 of the City adopted on April 17, 2007.
LID No. 363 means Local Improvement District No. 363 created pursuant to
Ordinance No. 3896 of the City adopted on January 9, 2008.
LID Ordinances mean Ordinance No. 3808, Ordinance No. 3833 and
Ordinance No. 3896, approved by the Council to create LID No. 359, LID No. 362
and LID No. 363, respectively.
LIDs mean LID No. 359, LID No. 362 and LID No. 363.
MSRB means the Municipal Securities Rulemaking Board or any successors to
its functions.
Net Proceeds, when used with reference to any series of Tax-Exempt Bonds,
means the principal amount of such Tax-Exempt Bonds, plus accrued interest and
original issue premium, if any, and less original issue discount, if any.
Private Person means any natural person engaged in a trade or business or
any trust, estate, partnership, association, company or corporation.
Private Person Use means the use of property in a trade or business by a
Private Person if such use is other than as a member of the general public. Private
Person Use includes ownership of the property by the Private Person as well as
other arrangements that transfer to the Private Person the actual or beneficial use
of the property (such as a lease, management or incentive payment contract or
other special arrangement) in such a manner as to set the Private Person apart
from the general public. Use of property as a member of the general public
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includes attendance by the Private Person at municipal meetings or business rental
of property to the Private Person on a short-term basis in accordance with
regulations under the Code if the rental paid by such Private Person is the same as
the rental paid by any Private Person who desires to rent the property. Use of
property by nonprofit community groups or community recreational groups is not
treated as Private Person Use if such use is incidental to the governmental uses of
property, the property is made available for such use by all such community groups
on an equal basis and such community groups are charged only a de minimis fee to
cover custodial expenses.
Registered Owner means the person named as the registered owner of a
Bond in the Bond Register. For so long as the Bonds are held in book-entry only
form, DTC or its nominee shall be deemed to be the sole Registered Owner.
Rule means the Commission’s Rule 15c2-12 under the Securities Exchange
Act of 1934, as the same may be amended from time to time.
Tax-Exempt Bonds mean any Bonds determined to be issued on a tax-
exempt basis under the Code pursuant to this ordinance.
Taxable Bonds mean any Bonds determined to be issued on a taxable basis
pursuant to this ordinance.
Underwriters mean Piper Jaffray & Co. and KeyBanc Capital Markets Inc.
(b) Interpretation. In this ordinance, unless the context otherwise
requires:
(1) The terms “hereby,” “hereof,” “hereto,” “herein,” “hereunder”
and any similar terms, 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 term
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
“hereafter” shall mean after, and the term “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 neuter genders and words importing the
singular number shall mean and include the plural number and vice versa;
(3) Words importing persons shall include firms, 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. - Consolidation of Local Improvement Districts. For the purpose
of issuing bonds only, those local improvement districts of the City established by
the following ordinances, respectively, the 30 day period for making cash payment
of assessments without interest in each local improvement district having expired in
the case of the assessments for each local improvement district, are hereby
consolidated into a consolidated local improvement district to be known and
designated as Consolidated Local Improvement District No. 359 et al.:
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
Local Improvement
District No.
Created by
Ordinance No.
Assessment Balance After
30-day Prepayment Period
359 3808 $
362 3833
363 3896
SECTION 3. - Authorization of Bonds. For the purpose of financing the costs
of certain improvements (including repaying, with interest, interfund loans drawn
upon during construction), making a deposit into the Guaranty Fund, and paying
costs of issuance of the Bonds, the City shall issue and sell one or more series of its
consolidated local improvement district bonds (the “Bonds”) in the aggregate
principal amount of not to exceed $_________, such amount being the total
amount on the assessment rolls of the LIDs remaining uncollected after the
expiration of the respective 30-day interest-free prepayment periods for
assessments on those assessment rolls.
The Bonds shall be designated “City of Kent, Washington, Consolidated Local
Improvement District No. 359 et al. Bonds, 2013” with additional series designation
or other designation as set forth in the Bond Purchase Contract and approved by
the Designated Representative.
The Bonds of a series shall be dated as of their date of initial delivery, shall
bear interest from their dated date or from the most recent date to which interest
has been paid, whichever is later, at the rates and payable on the days set forth in
the Bond Purchase Contract to their maturity or earlier redemption (each, an
“Interest Payment Date”), shall be subject to redemption prior to maturity at the
prices, in the amounts and in the manner, and shall be subject to such other terms
and provisions as established in the Bond Purchase Contract.
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
The Bonds of each series shall be fully registered as to both principal and
interest, shall be in the denomination of $5,000 each or any integral multiple
thereof (except that one certificate may be issued in a different denomination if the
principal amount of the Bonds of such series then outstanding is not a multiple of
$5,000), and shall be numbered separately in such manner and with such additional
designation as the Bond Registrar may deem necessary for the purpose of
identification and control.
The Bonds are an obligation only of the Bond Fund and the Guaranty Fund
and are not general obligations of the City.
SECTION 4. - Registration, Exchange and Payments.
(a) Bond Registrar/Bond Register. The City hereby specifies and adopts
the system of registration approved by the Washington State Finance Committee
from time to time through the appointment the state fiscal agency. The City shall
cause a Bond Register to be maintained by the Bond Registrar. So long as any
Bonds remain outstanding, the Bond Registrar shall make all necessary provisions
to permit the exchange or registration or transfer of Bonds at its principal corporate
trust office. The Bond Registrar may be removed at any time at the option of the
Finance Director upon prior notice to the Bond Registrar and a successor Bond
Registrar appointed by the Finance Director. No resignation or removal of the Bond
Registrar shall be effective until a successor shall have been appointed and until the
successor Bond Registrar shall have accepted the duties of the Bond Registrar
hereunder. The Bond Registrar is authorized, on behalf of the City, to authenticate
and deliver Bonds transferred or exchanged in accordance with the provisions of
such Bonds and this ordinance and to carry out all of the Bond Registrar’s powers
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
and duties under this ordinance. The Bond Registrar shall be responsible for its
representations contained in the Certificate of Authentication of the Bonds.
(b) Registered Ownership. The City and the Bond Registrar, each in its
discretion, may deem and treat the Registered Owner of each Bond as the absolute
owner thereof for all purposes (except as provided in Section 14 of this ordinance),
and neither the City nor the Bond Registrar shall be affected by any notice to the
contrary. Payment of any such Bond shall be made only as described in
Section 4(h), but such Bond may be transferred as herein provided. All such
payments made as described in Section 4(h) shall be valid and shall satisfy and
discharge the liability of the City upon such Bond to the extent of the amount or
amounts so paid.
(c) DTC Acceptance/Letters of Representations. The Bonds initially shall
be held in fully immobilized form by DTC acting as depository. To induce DTC to
accept the Bonds as eligible for deposit at DTC, the City has executed and delivered
to DTC a Blanket Issuer Letter of Representations. Neither the City nor the Bond
Registrar will have any responsibility or obligation to DTC participants or the
persons for whom they act as nominees (or any successor depository) with respect
to the Bonds in respect of the accuracy of any records maintained by DTC (or any
successor depository) or any DTC participant, the payment by DTC (or any
successor depository) or any DTC participant of any amount in respect of the
principal of or interest on Bonds, any notice which is permitted or required to be
given to Registered Owners under this ordinance (except such notices as shall be
required to be given by the City to the Bond Registrar or to DTC (or any successor
depository)), or any consent given or other action taken by DTC (or any successor
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
depository) as the Registered Owner. For so long as any Bonds are held in fully
immobilized form by a depository, DTC or its successor depository shall be deemed
to be the Registered Owner for all purposes hereunder, and all references herein to
the Registered Owners shall mean DTC (or any successor depository) or its
nominee and shall not mean the owners of any beneficial interest in such Bonds.
(d) Use of Depository.
(1) The Bonds shall be registered initially in the name of “Cede &
Co.”, as nominee of DTC, with one Bond for each estimated redemption date for a
series. Registered ownership of such Bonds, or any portions thereof, may not
thereafter be transferred except (A) to any successor of DTC or its nominee,
provided that any such successor shall be qualified under any applicable laws to
provide the service proposed to be provided by it; (B) to any substitute depository
appointed by the Finance Director pursuant to subsection (2) below or such
substitute depository’s successor; or (C) to any person as provided in
subsection (4) below.
(2) 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 Finance Director to discontinue the system of book entry transfers through DTC
or its successor (or any substitute depository or its successor), the Finance Director
may hereafter 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.
(3) In the case of any transfer pursuant to clause (A) or (B) of
subsection (1) above, the Bond Registrar shall, upon receipt of all outstanding
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Bonds of a series, together with a written request on behalf of the Finance Director,
issue a single new Bond for each maturity of that series then outstanding,
registered in the name of such successor or such substitute depository, or their
nominees, as the case may be, all as specified in such written request of the
Finance Director.
(4) In the event that (A) DTC or its successor (or substitute
depository or its successor) resigns from its functions as depository, and no
substitute depository can be obtained, or (B) the Finance Director determines that it
is in the best interest of the beneficial owners of the Bonds that such owners be
able to obtain physical Bond certificates, the ownership of such Bonds may then be
transferred to any person or entity as herein provided, and such Bonds shall no
longer be held by a depository. The Finance Director shall deliver a written request
to the Bond Registrar, together with a supply of physical Bonds, to issue Bonds as
herein provided in any authorized denomination. Upon receipt by the Bond
Registrar of all then outstanding Bonds of a series together with a written request
on behalf of the Finance Director to the Bond Registrar, new Bonds of such series
shall be issued in the appropriate denominations and registered in the names of
such persons as are requested in such written request.
(e) Registration of Transfer of Ownership or Exchange; Change in
Denominations. The transfer of any Bond may be registered and Bonds may be
exchanged, but no transfer of any such Bond shall be valid unless it is surrendered
to the Bond Registrar with the assignment form appearing on such Bond duly
executed by the Registered Owner or such Registered Owner’s duly authorized
agent in a manner satisfactory to the Bond Registrar. Upon such surrender, the
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
Bond Registrar shall cancel the surrendered Bond and shall authenticate and
deliver, without charge to the Registered Owner or transferee therefor, a new Bond
(or Bonds at the option of the new Registered Owner) of the same date, series,
maturity and interest rate and for the same aggregate principal amount in any
authorized denomination, naming as Registered Owner the person or persons listed
as the assignee on the assignment form appearing on the surrendered Bond, in
exchange for such surrendered and cancelled Bond. Any Bond may be surrendered
to the Bond Registrar and exchanged, without charge, for an equal aggregate
principal amount of Bonds of the same date, series, maturity and interest rate, in
any authorized denomination. The Bond Registrar shall not be obligated to register
the transfer or to exchange any Bond during the 15 days preceding any principal
payment date any such Bond is to be redeemed.
(f) Bond Registrar’s Ownership of Bonds. The Bond Registrar may
become the Registered Owner of any Bond with the same rights it would have if it
were not the Bond Registrar, and to the extent permitted by law, may act as
depository for and permit any of its officers or directors to act as a member of, or in
any other capacity with respect to, any committee formed to protect the right of the
Registered Owners of Bonds.
(g) Registration Covenant. The City covenants that, until all Bonds have
been surrendered and canceled, it will maintain a system for recording the
ownership of each Bond that complies with the provisions of Section 149 of the
Code.
(h) Place and Medium of Payment. Both principal of and interest on the
Bonds shall be payable solely out of the Bond Fund and the Guaranty Fund, and
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
shall be payable in lawful money of the United States of America. Interest on the
Bonds shall be calculated on the basis of a year of 360 days and twelve 30-day
months. For so long as all Bonds are held by a depository, payments of principal
and interest thereon shall be made as provided in accordance with the operational
arrangements of DTC referred to in the Letter of Representations. In the event that
the Bonds are no longer held by a depository, interest on the Bonds shall be paid by
check or draft mailed to the Registered Owners at the addresses for such
Registered Owners appearing on the Bond Register on the fifteenth day of the
month preceding the interest payment date, or upon the written request of a
Registered Owner of more than $1,000,000 of Bonds (received by the Bond
Registrar at least 15 days prior to the applicable payment date), such payment shall
be made by the Bond Registrar by wire transfer to the account within the United
States designated by the Registered Owner. Principal of the Bonds shall be payable
upon presentation and surrender of such Bonds by the Registered Owners at the
principal office of the Bond Registrar.
If any Bond shall be duly presented for payment and funds have not been
duly provided by the City on such applicable date, then interest shall continue to
accrue thereafter on the unpaid principal thereof at the rate stated on such Bond
until it is paid.
SECTION 5. - Redemption Prior to Maturity and Purchase of Bonds.
(a) The City reserves the right to redeem the Bonds prior to their stated
maturity on any Interest Payment Date, in order of the estimated redemption
schedule set forth in the Bond Purchase Contract and shall call Bonds for
redemption in order of the estimated redemption schedule whenever there shall be
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
sufficient money in the Bond Fund to pay the Bonds so called over and above the
amount required for the payment of the interest payable on that interest payment
date on all unpaid Bonds.
(b) Purchase of Bonds. The City reserves the right to purchase any of the
Bonds offered to it at any time at a price deemed reasonable by the Finance
Director.
(c) Selection of Bonds for Redemption. With respect to a series of Bonds,
if fewer than all of the outstanding Bonds estimated to be redeemed in a particular
year on the estimated redemption schedule (an “annual group”) are to be called for
redemption, the selection of specific Bonds for redemption within that annual group
shall be at random, and for as long as the Bonds are registered in the name of DTC
or its nominee, the selection shall be made in accordance with the operational
arrangements then in effect at DTC.
(d) Notice of Redemption.
(1) Official Notice. For so long as the Bonds are held in
uncertificated form, notice of redemption (which notice may be conditional) shall be
given in accordance with the operational arrangements of DTC as then in effect, and
neither the City nor the Bond Registrar will provide any notice of redemption to any
Beneficial Owners. Thereafter (if the Bonds are no longer held in uncertificated
form), notice of redemption shall be given in the manner hereinafter provided.
Unless waived by any owner of Bonds to be redeemed, official notice of any such
redemption (which redemption may be conditioned by the Bond Registrar on the
receipt of sufficient funds for redemption or otherwise) shall be given by the Bond
Registrar on behalf of the City by mailing a copy of an official redemption notice by
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
first class mail at least 20 days and not more than 60 days prior to the date fixed
for redemption to the Registered Owner of the Bond or Bonds to be redeemed at
the address shown on the Bond Register or at such other address as is furnished in
writing by such Registered Owner to the Bond Registrar.
On or prior to any redemption date (unless such notice is conditional), the
City shall deposit with the Bond Registrar an amount of money sufficient to pay the
redemption price of all the Bonds or portions of Bonds which are to be redeemed on
that date.
(2) Effect of Notice; Bonds Due. If an unconditional notice of
redemption has been given as aforesaid, or if the conditions to redemption have
been satisfied or waived, the Bonds or portions of Bonds so to be redeemed shall,
on the redemption date, become due and payable at the redemption price therein
specified, and from and after such date such Bonds or portions of Bonds shall cease
to bear interest. Upon surrender of such Bonds for redemption in accordance with
said notice, such Bonds shall be paid by the Bond Registrar at the redemption price.
Installments of interest due on or prior to the redemption date shall be payable as
herein provided for payment of interest. All Bonds which have been redeemed shall
be canceled by the Bond Registrar and shall not be reissued.
If a conditional notice of redemption has been given and the conditions to
redemption have not been satisfied or waived, notice of redemption given pursuant
to this ordinance may be rescinded by written notice given by the Bond Registrar on
behalf of the City as soon as practicable in the same manner, and to the same
Registered Owners of the Bond or Bonds, as notice of such redemption was given
pursuant to this Section 5(d). If notice of recession has been provided, the Bonds
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
or portions of Bonds so to be redeemed, on the redemption date, shall not become
due and payable and from and after such date such Bonds or portions of Bonds
shall continue to bear interest at the rate or rates set forth therein until paid or until
due provision is made for the payment of the same.
(3) Additional Notice. In addition to the foregoing notice, further
notice shall be given by the City as set out below, but no defect in said further
notice nor any failure to give all or any portion of such further notice shall in any
manner defeat the effectiveness of a call for redemption if notice thereof is given as
above prescribed. Each further notice of redemption given hereunder shall contain
the information required above for an official notice of redemption plus (A) the
CUSIP numbers of all Bonds being redeemed; (B) the date of issue of the Bonds as
originally issued; (C) the rate of interest borne by each Bond being redeemed;
(D) the series and maturity date of each Bond being redeemed; and (E) any other
descriptive information needed to identify accurately the Bonds being redeemed.
Each further notice of redemption may be sent at least 20 days before the
redemption date to each party entitled to receive notice pursuant to Section 14 and
with such additional information as the City shall deem appropriate, but such
mailings shall not be a condition precedent to the redemption of such Bonds.
(4) Amendment of Notice Provisions. The foregoing notice
provisions of this Section 5, including but not limited to the information to be
included in redemption notices and the persons designated to receive notices, may
be amended by additions, deletions and changes in order to maintain compliance
with duly promulgated regulations and recommendations regarding notices of
redemption of municipal securities.
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
SECTION 6. - Form of Bonds. The Bonds shall be in substantially the
following form with appropriate or necessary insertions, depending upon the
omissions and variations as permitted or required hereby:
UNITED STATES OF AMERICA
NO. $ ___
STATE OF WASHINGTON
CITY OF KENT
CONSOLIDATED LOCAL IMPROVEMENT DISTRICT NO. ____ BOND, 2013
INTEREST RATE: % MATURITY DATE: CUSIP NO.:
ESTIMATED REDEMPTION DATE:
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
RCW 35.45.070 provides, in part, as follows:
Neither the holder nor owner of any bond, interest coupon, or warrant
issued against a local improvement fund shall have any claim therefor
against the city or town by which it is issued, except for payment from
the special assessments made for the improvement for which the bond
or warrant was issued and except also for payment from the local
improvement guaranty fund of the city or town as to bonds issued
after the creation of a local improvement guaranty fund of the city or
town. The city or town shall not be liable to the holder or owner of any
bond, interest coupon, or warrant for any loss to the local
improvement guaranty fund occurring in the lawful operation thereof.
The City of Kent, Washington (the “City”), hereby acknowledges itself to owe
and for value received promises to pay to the Registered Owner identified above
from the City’s Consolidated Local Improvement District No. 359 et al. Bond
Redemption Fund (the "Bond Fund") created by Ordinance No. _____ (the "Bond
Ordinance"), the Principal Amount indicated above and to pay interest thereon from
_______________ on _____________, 20___, and on each ________ 1 thereafter
to maturity or earlier redemption (each, an “Interest Payment Date”). Both
principal of and interest on this bond are payable in lawful money of the United
States of America. The fiscal agency of the State of Washington has been
appointed by the City as the authenticating agent, paying agent and registrar for
the bonds of this issue (the “Bond Registrar”). For so long as the bonds of this
issue are held in fully immobilized form, payments of principal and interest thereon
shall be made as provided in accordance with the operational arrangements of The
Depository Trust Company (“DTC”) referred to in the Blanket Issuer Letter of
Representations (the “Letter of Representations”) from the City to DTC.
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
The bonds of this issue are issued under and in accordance with the
provisions of the Constitution and applicable statutes of the State of Washington
and the Bond Ordinance. Capitalized terms used in this bond have the meanings
given such terms in the Bond Ordinance.
This bond is one of an authorized issue of bonds of like series, date, tenor,
and date of maturity, except as to number, interest rate, estimated redemption
date and amount in the aggregate principal amount of $__________ and is issued
pursuant to the Bond Ordinance to provide a portion of the funds necessary (a) to
pay costs of improvements within Local Improvement District No. 359, Local
Improvement District No. 362, and Local Improvement District No. 363 (together,
the “LIDs”), (b) to fund the Guaranty Fund, and (b) to pay costs of issuance for the
bonds of this issue. Pursuant to the Bond Ordinance, the City consolidated the
LIDs, for the purpose of issuing bonds only, into Consolidated Local Improvement
District No. 359 et al..
The bonds of this issue may be redeemed prior to, on or after their estimated
redemption date on any Interest Payment Date if sufficient assessment payments
are available in the Bond Fund over and above the amount necessary to pay
interest currently due on all outstanding bonds of this issue.
This bond is not a general obligation of the City. This bond is payable solely
from the Bond Fund and from the City's Local Improvement Guaranty Fund. The
City has irrevocably obligated and bound itself to pay into the Bond Fund all
assessments levied within the LIDs and received after the respective legal
prepayment period.
The City hereby covenants and agrees with the owner of this bond that it will
keep and perform all the covenants of this bond and of the Bond Ordinance to be by
it kept and performed. Reference is hereby made to the Bond Ordinance for the
definitions of defined terms used herein. Reference to the Bond Ordinance and any
and all modifications and amendments thereto is made for a description of the
nature and extent of the security for this bond, the funds pledged, and the terms
and conditions upon which this bond is issued.
[The City has not designated this bond as a "qualified tax-exempt obligation"
for investment by financial institutions under Section 265(b)(3) of the Code.]
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 the Bond Registrar.
It is hereby certified that all acts, conditions and things required by the
Constitution and statutes of the State of Washington to exist and to have
happened, been done and performed precedent to and in the issuance of this bond
exist and have happened, been done and performed and that the issuance of this
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
bond and the bonds of this issue 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 Kent, Washington has caused this bond to
be executed by the manual or facsimile signatures of the Mayor and the City Clerk
and the seal of the City imprinted, impressed or otherwise reproduced hereon as of
this ____ day of ___________, 2013.
[SEAL]
CITY OF KENT, WASHINGTON
By /s/ manual or facsimile
Mayor
ATTEST:
/s/ manual or facsimile
City Clerk
The Bond Registrar’s Certificate of Authentication on the Bonds shall be in
substantially the following form:
CERTIFICATE OF AUTHENTICATION
This bond is one of the bonds described in the within-mentioned Bond
Ordinance and is one of the Consolidated Local Improvement District No. 359 et al.
Bonds, 2013 of the City of Kent, Washington, dated ____________, 2013.
WASHINGTON STATE FISCAL
AGENCY, as Bond Registrar
By
SECTION 7. - Execution of Bonds. The Bonds shall be executed on behalf of
the City with the manual or facsimile signature of the Mayor and attested by the
manual or facsimile signature of the City Clerk and the seal of the City shall be
impressed, imprinted or otherwise reproduced thereon.
Only such Bonds as shall bear thereon a Certificate of Authentication in the
form hereinbefore recited, manually executed by the Bond Registrar, shall be valid
or obligatory for any purpose or entitled to the benefits of this ordinance. Such
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
Certificate of Authentication shall be conclusive evidence that the Bonds so
authenticated have been duly executed, authenticated and delivered hereunder and
are entitled to the benefits of this ordinance.
In case either of the officers who shall have executed the Bonds shall cease
to be an 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
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. Any Bond
may be signed and attested on behalf of the City by such persons who at the date
of the actual execution of such 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 8. - Application of Bond Proceeds. Proceeds of the Bonds and
prepaid assessments shall be applied as follows:
(a) An amount shall be deposited into the Guaranty Fund sufficient,
together with other available funds in the Guaranty Fund, to equal at least 10% of
the principal amount of all local improvement bonds of the City then outstanding,
including the Bonds; and
(b) The balance of the Bond proceeds and prepaid assessments shall be
deposited into the Improvements Funds to finance and/or refinance costs of the
improvements constructed in the respective LID, including the repayment of any
interfund loans, with interest, for purposes of the LIDs, and to pay all expenses
incidental thereto and to the issuance of the Bonds.
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
SECTION 9. - Tax Covenants. The City covenants that it will not take or
permit to be taken on its behalf any action that would adversely affect the
exemption from federal income taxation of the interest on the Tax-Exempt Bonds
and will take or require to be taken such acts as may reasonably be within its ability
and as may from time to time be required under applicable law to continue the
exemption from federal income taxation of the interest on the Tax-Exempt Bonds.
(a) Arbitrage Covenant. Without limiting the generality of the foregoing,
the City covenants that it will not take any action or fail to take any action with
respect to the proceeds of sale of the Tax-Exempt Bonds or any other funds of the
City which may be deemed to be proceeds of the Tax-Exempt Bonds pursuant to
Section 148 of the Code and the regulations promulgated thereunder which, if such
use had been reasonably expected on the dates of delivery of the Tax-Exempt
Bonds to the initial purchasers thereof, would have caused the Tax-Exempt Bonds
to be treated as “arbitrage bonds” within the meaning of such term as used in
Section 148 of the Code. The City will comply with the requirements of Section 148
of the Code and the applicable regulations thereunder throughout the term of the
Tax-Exempt Bonds.
(b) Private Person Use Limitation for Tax-Exempt Bonds. The City
covenants that for as long as the Tax-Exempt Bonds are outstanding, it will not
permit:
(1) More than 10% of the Net Proceeds of the Tax-Exempt Bonds to
be allocated to any Private Person Use; and
(2) More than 10% of the principal or interest payments on the Tax-
Exempt Bonds in a Bond Year to be directly or indirectly: (A) secured by any
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
interest in property used or to be used for any Private Person Use or secured by
payments in respect of property used or to be used for any Private Person Use, or
(B) derived from payments (whether or not made to the City) in respect of
property, or borrowed money, used or to be used for any Private Person Use.
The City further covenants that, if:
(3) More than five percent of the Net Proceeds of the Tax-Exempt
Bonds are allocable to any Private Person Use; and
(4) More than five percent of the principal or interest payments on
the Tax-Exempt Bonds in a Bond Year are (under the terms of this ordinance or any
underlying arrangement) directly or indirectly:
(A) secured by any interest in property used or to be used for any
Private Person Use or secured by payments in respect of property used or to
be used for any Private Person Use, or
(B) derived from payments (whether or not made to the City) in
respect of property, or borrowed money, used or to be used for any Private
Person Use, then, (i) any Private Person Use of the projects described in
subsection (3) hereof or Private Person Use payments described in
subsection (4) hereof that is in excess of the five percent limitations
described in such subsections (3) or (4) will be for a Private Person Use that
is related to the state or local governmental use of the projects funded by the
proceeds of the Tax-Exempt Bonds, and (ii) any Private Person Use will not
exceed the amount of Net Proceeds of the Tax-Exempt Bonds allocable to the
state or local governmental use portion of the projects(s) to which the
Private Person Use of such portion of the projects funded by the proceeds of
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
the Tax-Exempt Bonds relate. The City further covenants that it will comply
with any limitations on the use of the projects funded by the proceeds of the
Tax-Exempt Bonds by other than state and local governmental users that are
necessary, in the opinion of its bond counsel, to preserve the tax exemption
of the interest on the Tax-Exempt Bonds.
(c) Modification of Tax Covenants. The covenants of this section are
specified solely to assure the continued exemption from regular income taxation of
the interest on the Tax-Exempt Bonds. To that end, the provisions of this section
may be modified or eliminated without any requirement for formal amendment
thereof upon receipt of an opinion of the City’s bond counsel that such modification
or elimination will not adversely affect the tax exemption of interest on any Tax-
Exempt Bonds.
(d) Designation under Section 265(b). [The City has not designated the
Tax-Exempt Bonds as “qualified tax-exempt obligations” under Section 265(b)(3) of
the Code.]
SECTION 10. - Bond Fund. There is created and established in the office
of the Finance Director a special consolidated local improvement district fund to be
known and designated as “City of Kent Consolidated Local Improvement District
No. 359 et al. Bond Redemption Fund” (the “Bond Fund”). The Bond Fund shall be
a trust fund and shall be drawn upon only for the payment of the principal of and
interest on the Bonds. All money presently on hand representing collections
pertaining to installments of Assessments and interest thereon in each of the LIDs
shall be transferred to and deposited in the Bond Fund, and all collections pertaining
to Assessments on the assessment rolls of those LIDs when hereafter received shall
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
be deposited in the Bond Fund to redeem outstanding Bonds. The Bonds shall be
obligations only of the Bond Fund and the Guaranty Fund and are not general
obligations of the City.
The City hereby covenants and agrees to foreclose assessment liens on all
delinquent Assessments at the earliest opportunity available under state law and
ordinances of the City, to pursue those foreclosure actions diligently, and to deposit
promptly into the Bond Fund or the Guaranty Fund, as applicable, the sale proceeds
and all other payments received as a result of such foreclosure actions.
The City may invest funds in the Bond Fund in any legal investment and the
investment earnings shall be retained therein and applied to the purposes of the
Bond Fund.
SECTION 11. - Pledge of Assessment Payments. Assessments collected
in the LIDs, together with interest and penalties, if any, are pledged to the payment
of the Bonds which are payable solely out of the Bond Fund and the Guaranty Fund
in the manner provided by law. The Bonds are not general obligations of the City.
SECTION 12. - Defeasance. In the event that the City, to effect the
payment, retirement or redemption of any Bond, sets aside in the Bond Fund or in
another special account, cash or noncallable Government Obligations, or any
combination of cash and/or noncallable Government Obligations, in amounts and
maturities which, together with the known earned income therefrom, are sufficient
to redeem or pay and retire such Bond in accordance with its terms and to pay
when due the interest and redemption premium, if any, thereon, and such cash
and/or noncallable Government Obligations are irrevocably set aside and pledged
for such purpose, then no further payments need be made into the Bond Fund for
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
the payment of the principal of and interest on such Bond. The owner of a Bond so
provided for shall cease to be entitled to any lien, benefit or security of this
ordinance except the right to receive payment of principal, premium, if any, and
interest from the Bond Fund or such special account, and such Bond shall be
deemed to be not outstanding under this ordinance.
The City shall give written notice of defeasance to the owners of all Bonds so
provided for within 30 days of the defeasance and to each party entitled to receive
notice in accordance with Section 14.
SECTION 13. - Sale of Bonds.
(a) Bond Sale. The Bonds shall be sold at negotiated sale to the
Underwriters pursuant to the terms of the Bond Purchase Contract. The
Underwriters have advised the Council that market conditions are fluctuating and,
as a result, the most favorable market conditions may occur on a day other than a
regular meeting date of the Council. The Council has determined that it would be in
the best interest of the City to delegate to the Designated Representative for a
limited time the authority to approve the final interest rates, final maturity date,
aggregate principal amount, redemption rights (including the estimated redemption
schedule for the Bonds), whether to issue the Bonds in one or more series, and
whether to designate the Bonds (or the Bonds of a series) as Tax-Exempt Bonds or
Taxable Bonds.
The Designated Representative is hereby authorized to determine whether
the Bonds shall be issued in one or more series, to determine whether the Bonds
(or the Bonds of a series) shall be issued as Taxable Bonds or Tax-Exempt Bonds,
and to approve the final interest rates, final maturity date, aggregate principal
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
amount, and redemption rights (including the estimated redemption schedule) for
the Bonds in the manner provided hereafter so long as (i) the aggregate principal
amount of the Bonds does not exceed $________________, (ii) the final maturity
date for the Bonds is no later than ____________________, 20__, (iii) the Bonds
are sold (in the aggregate) at a price not less than 98% and not greater than
120%, (iv) the true interest cost for the Bonds (in the aggregate) does not exceed
_____%; and (v) the Bonds conform to all other terms of this ordinance.
In determining whether the Bonds shall be issued in one or more series and
final interest rates, final maturity date, aggregate principal amount, and redemption
rights (including the estimated redemption schedule), the Designated
Representative shall take into account those factors that, in his or her judgment,
will result in the lowest true interest cost on the Bonds to their maturity or date of
prior redemption, including, but not limited to current financial market conditions
and current interest rates for obligations comparable in tenor and quality to the
Bonds. Subject to the terms and conditions set forth in this section, the Designated
Representative is hereby authorized to execute the Bond Purchase Contract.
Following the execution of the Bond Purchase Contract, the Finance Director
shall provide a report to the Council describing the final terms of the Bonds
approved pursuant to the authority delegated in this section. The authority granted
to the Designated Representative by this Section 13 shall expire 120 days after the
effective date of this ordinance. If a Bond Purchase Contract for the Bonds has not
been executed within 120 days after the effective date of this ordinance, the
authorization for the issuance of the Bonds shall be rescinded, and the Bonds shall
not be issued nor their sale approved unless such Bonds shall have been re-
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
authorized by ordinance of the Council. The ordinance re-authorizing the issuance
and sale of such Bonds may be in the form of a new ordinance repealing this
ordinance in whole or in part or may be in the form of an amendatory ordinance
approving a bond purchase contract or establishing terms and conditions for the
authority delegated under this Section 13.
(b) Delivery of Bonds; Documentation. Upon the passage and approval of
this ordinance, the proper officials of the City, including the Finance Director and
Mayor, are authorized and directed to undertake all action necessary for the prompt
execution and delivery of the Bonds to the Underwriters and further to execute all
closing certificates and documents required to effect the closing and delivery of the
Bonds in accordance with the terms of this ordinance and the Bond Purchase
Contract.
(c) Preliminary and Final Official Statements. The Finance Director is
hereby authorized to ratify and to deem final the preliminary Official Statement
relating to the Bonds for the purposes of the Rule. The Finance Director is further
authorized to ratify and to approve for purposes of the Rule, on behalf of the City,
the final Official Statement relating to the issuance and sale of the Bonds and the
distribution of the final Official Statement pursuant thereto with such changes, if
any, as necessary. The use and public distribution of the Official Statement by the
Underwriters in connection with the reoffering of the Bonds is hereby authorized.
SECTION 14. - Undertaking to Provide Ongoing Disclosure.
(a) Contract/Undertaking. This section constitutes the City’s written
undertaking for the benefit of the owners, including Beneficial Owners, of the Bonds
as required by Section (b)(5) of the Rule.
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Consolidated Local Improvement District No. 359 et al. Bonds, 2013
(b) Financial Statements/Operating Data. The City agrees to provide or
cause to be provided to the Municipal Securities Rulemaking Board (“MSRB”), the
following annual financial information and operating data for the prior fiscal year
(commencing in 2013 for the fiscal year ended December 31, 2012):
1. Annual financial statements, which statements may or may not
be audited, showing ending fund balances prepared in accordance with the
Budgeting Accounting and Reporting System prescribed by the Washington State
Auditor pursuant to RCW 43.09.200 (or any successor statute);
2. A statement of the outstanding balance of obligations secured
by the Guaranty Fund at fiscal year-end;
3. The balance of cash and investments (based on market value) in
the Guaranty Fund at fiscal year-end; and
4. A statement of the amount of Assessment installments that the
City billed in that fiscal year, and the amount collected.
Items 2-4 shall be required only to the extent that such information is not included
in the annual financial statements.
The information and data described above shall be provided on or before
nine months after the end of the City’s fiscal year. The City’s current fiscal year
ends December 31. The City may adjust such fiscal year by providing written notice
of the change of fiscal year to the MSRB. In lieu of providing such annual financial
information and operating data, the City may cross-reference to other documents
available to the public on the MSRB’s internet website or filed with the Commission.
If not provided as part of the annual financial information discussed above,
the City shall provide to the MSRB the City’s audited annual financial statements
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prepared in accordance with the Budgeting Accounting and Reporting System
prescribed by the Washington State Auditor pursuant to RCW 43.09.200 (or any
successor statute) when and if available.
(c) Listed Events. The City agrees to provide or cause to be provided to
the MSRB, in a timely manner not in excess of ten business days after the
occurrence of the event, notice of the occurrence of any of the following events with
respect to the Bonds:
Principal and interest payment delinquencies;
Non-payment related defaults, if material;
Unscheduled draws on debt service reserves reflecting financial
difficulties;
Unscheduled draws on credit enhancements reflecting financial
difficulties;
Substitution of credit or liquidity providers, or their failure to perform;
Adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed
Issue (IRS Form 5701-TEB) or other material notices or
determinations with respect to the tax status of the Bonds, or other
material events affecting the tax status of the Bonds;
Modifications to the rights of Bondholders, if material;
Bond calls, if material, and tender offers;
Defeasances;
Release, substitution, or sale of property securing repayment of the
Bonds, if material;
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Rating changes;
Bankruptcy, insolvency, receivership or similar event of the City;
The consummation of a merger, consolidation, or acquisition involving
the City or the sale of all or substantially all of the assets of the City,
other than in the ordinary course of business, the entry into a
definitive agreement to undertake such an action or the termination of
a definitive agreement relating to any such actions, other than
pursuant to its terms, if material; and
Appointment of a successor or additional trustee or the change of
name of a trustee, if material.
The City shall promptly determine whether the events described above are material.
Solely for purposes of disclosure, and not intending to modify this
undertaking, the City advises that no debt service reserves or property secures
payment of the Bonds.
(d) Format for Filings with the MSRB. All notices, financial information and
operating data required by this undertaking to be provided to the MSRB must be in
an electronic format as prescribed by the MSRB. All documents provided to the
MSRB pursuant to this undertaking must be accompanied by identifying information
as prescribed by the MSRB.
(e) Notification Upon Failure to Provide Financial Data. The City agrees to
provide or cause to be provided, in a timely manner, to the MSRB notice of its
failure to provide the annual financial information described in Subsection (b) above
on or prior to the date set forth in Subsection (b) above.
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(f) Termination/Modification. The City’s obligations to provide annual
financial information and notices of certain listed events shall terminate upon the
legal defeasance, prior redemption or payment in full of all of the Bonds. Any
provision of this section shall be null and void if the City (1) obtains an opinion of
nationally recognized bond counsel to the effect that the portion of the Rule that
requires that provision is invalid, has been repealed retroactively or otherwise does
not apply to the Bonds and (2) notifies the MSRB of such opinion and the
cancellation of this section.
The City may amend this section with an opinion of nationally recognized
bond counsel in accordance with the Rule. In the event of any amendment of this
section, the City shall describe such amendment in the next annual report, and shall
include a narrative explanation of the reason for the amendment and its impact on
the type (or in the case of a change of accounting principles, on the presentation)
of financial information or operating data being presented by the City. In addition,
if the amendment relates to the accounting principles to be followed in preparing
financial statements, (A) notice of such change shall be given in the same manner
as for a listed event under Subsection (c), and (B) the annual report for the year in
which the change is made shall present a comparison (in narrative form and also, if
feasible, in quantitative form) between the financial statements as prepared on the
basis of the new accounting principles and those prepared on the basis of the
former accounting principles.
(g) Bond Owner’s Remedies Under This Section. The right of any
bondowner or Beneficial Owner of Bonds to enforce the provisions of this section
shall be limited to a right to obtain specific enforcement of the City’s obligations
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under this section, and any failure by the City to comply with the provisions of this
undertaking shall not be an event of default with respect to the Bonds.
(h) No Default. Except as otherwise disclosed in the City’s official
statement relating to the Bonds, the City is not and has not been in default in the
performance of its obligations of any prior undertaking for ongoing disclosure with
respect to its obligations.
SECTION 15. - Interest Rate on Installments and Delinquent Payments.
The interest rate on the installments and delinquent payments of Assessments in
the LIDs is established at a rate per annum equal to the [________________] plus
[___] percent.
SECTION 16. - Lost, Stolen or Destroyed Bonds. In case any Bond or
Bonds shall be lost, stolen or destroyed, the Bond Registrar may execute and
deliver a new Bond or Bonds 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 his/her filing with
the City evidence satisfactory to the City that such Bond was actually lost, stolen or
destroyed and of his/her ownership thereof, and upon furnishing the City and/or the
Bond Registrar with indemnity satisfactory to the City and the Bond Registrar.
SECTION 17. - 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
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this ordinance or of the Bonds. All acts taken pursuant to the authority granted in
this ordinance but prior to its effective date are hereby ratified and confirmed.
SECTION 18. - Effective Date of Ordinance. This ordinance shall take
effect and be in force five days after its passage, approval, and publication as
provided by law.
Adopted by the City Council of the City of Kent, Washington, at a regular
meeting thereof held this 19th of March, 2013.
By
Suzette Cooke, Mayor
ATTEST
Brenda Jacober, City Clerk
APPROVED AS TO FORM:
PACIFICA LAW GROUP LLP
Bond Counsel
PASSED: ________ of _____________, 2013
APPROVED: ________ of _____________, 2013
PUBLISHED: ________ of _____________, 2013
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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. ___________ (the “Ordinance”) is
a full, true and correct copy of an ordinance duly passed at a regular meeting of the
City Council of the City held at the regular time and meeting place thereof on
March 19, 2013, as that ordinance appears on the minute book of the City; and the
Ordinance will be in full force and effect after its passage; 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 19th day of March,
2013.
CITY OF KENT, WASHINGTON
Brenda Jacober, City Clerk
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