HomeMy WebLinkAboutCity Council Committees - Operations Committee - 04/05/2016 (2)
Unless otherwise noted, the Operations Committee meets at 4 p.m. on the first and third
Tuesday of each month in Kent City Hall, Council Chambers East, 220 4th Ave S, Kent, 98032.
For additional information please contact Jennifer Hays at 253-856-5700.
Any person requiring a disability accommodation should contact the City Clerk’s
Office at 253-856-5725 in advance. For TDD relay service call Washington
Telecommunications Relay Service at 1-800-833-6388.
Operations Committee Agenda
Councilmembers: Bill Boyce – Les Thomas – Dana Ralph, Chair
April 5, 2016
4 p.m.
Item Description Action Speaker Time Page
1. Call to order Chair Ralph 1
2. Roll Call Chair Ralph 1
3. Changes to the Agenda Chair Ralph 1
4. Approval of Check Summary Report dated
3/1/2016 thru 3/15/2016
YES Chair Ralph 2
5. Approval of Meeting Minutes Dated
March 15, 2016
YES Chair Ralph 2 1
6. Drug Forfeiture Funds – Amend Budget and
Authorize Expenditure - Recommend
YES Chief Ken
Thomas
5 5
7. Ordinance Approving 2015 Internal Financing
– 72nd Avenue South Improvements Project -
Recommend
YES Aaron BeMiller 5 11
8. 2016 Bond Refunding - Recommend YES Aaron BeMiller
Deanna Gregory
10 17
9. 2016 Refunding Savings Strategy NO Aaron BeMiller 5 85
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OPERATIONS COMMITTEE MINUTES
March 15, 2016
Committee Members Present: Les Thomas; Bill Boyce; Dana Ralph, Chair, absent
The meeting was called to order by Les Thomas at 4:01 p.m.
1. ROLL CALL.
2. CHANGES TO THE AGENDA.
There were no changes to the agenda.
3. APPROVAL OF THE CHECK SUMMARY REPORT DATED 2/16/2016 THRU
2/29/2016.
B. Boyce moved to approve the check summary report dated 2/16/16 through
2/29/16. L. Thomas seconded the motion, which passed 2-0.
4. APPROVAL OF MINUTES DATED MARCH 1, 2016.
B. Boyce moved to approve the Operations Committee minutes dated March 1, 2016. L.
Thomas seconded the motion, which passed 2-0.
5. AIA AGREEMENT WITH ARC ARCHITECTS FOR THE CITY HALL SPACE
EFFCIENCY PLAN PHASE II - RECOMMEND.
Parks Director Jeff Watling requested approval for the second phase of the project
which initiates conceptual design and cost estimating. Completion of this work will
allow the city to determine projected costs, ideas for phasing/sequencing the
work and options for funding the work for all four buildings that comprise the
City Hall Campus: City Hall, the Police Department, Centennial building, and
the annexed City Hall building directly east of Centennial.
Results of the space efficiency study were presented to Council last fall. The
results of the analysis identified the opportunity to address the City’s current
space needs for the Police Department through renovation and modernization
of the current campus.
At the end of 2015, the City transferred $100,000 of available general fund monies into
this account to help fund the second phase of this contract. Finance is recommending
the remaining $68,364 come from available monies in the Capital Resources Fund
(formerly the CIP fund) which will be part of the second quarter supplemental budget
adjustment. The timeframe for this next phase should be complete mid to late fall.
B. Boyce moved to recommend authorizing the Mayor to sign all documents necessary
to enter into an AIA Agreement with ARC Architects for the City Hall Space Efficiency
Plan – Phase II, subject to terms and conditions acceptable to the Parks Director and
the City Attorney. L. Thomas seconded the motion, which passed 2-0.
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Operations Committee Minutes
March 15, 2016
Page: 2
6. SCHOOL ZONE TRAFFIC SAFETY CAMERA PROGRAM FUND EXPENDITURES -
RECOMMEND.
Police Chief Thomas presented information on budgeting funds derived from the use of
school zone traffic safety cameras. The current balance in the fund is in excess of $1
million.
An excess fund in the amount of $329,000 was requested to be used for criminal justice
related purposes. After researching, the Police Department has determined two
separate items to spend funds on:
Set aside $50,000 for city-matching funds for the Traffic Safety Grant Program
that the Police Department and the Public Works Department is applying for, and
Use $279,000 to replace seven of the Department’s aging police vehicles.
School speed zones are located in areas occupied by a high number of pedestrians,
especially before, during, and after school, and driver inattention and speeding can
have devastating consequences. The strategic placement of automated traffic safety
cameras in school zones has been shown to reduce vehicle speeds, thereby reducing
the risks to pedestrians.
It was noted that the Public Safety Committee previously passed this motion 3-0.
B. Boyce moved to recommend Council authorize the Mayor to approve the
expenditure of $329,000 from the School Zone Traffic Safety Camera fund that include
$50,000 for matching funds for the traffic safety grant program and $279,000 to
replace seven of the Police Department’s aging police vehicles, and authorize the
Mayor to sign all necessary documents, subject to the approval of the Police Chief and
City Attorney. L. Thomas seconded the motion, which passed 2-0.
7. CITY INVESTMENT REPORT.
Finance Director Aaron BeMiller, Senior Financial Analyst Joe Bartlemay, and Accounting
and Reporting Manager Levina Brennecke reported on the City’s diversified investment
strategy that includes opportunities outside of the Local Government Investment Pool
(LGIP).
The summary provided to the City’s investment portfolio is current through December 31,
2015 and has been previously presented to the Advisory Investment Committee. The list
of portfolio investments includes:
Nearly $17 million in government securities, just over $80 million in local
government investment pool, and started out the 2016 year with just under $1
million in other investments, and
In the last quarter of 2015, purchased roughly $8 million in new investments that
are similar to past investments, and
The City has an average rate of return of 1.6 percent (does not include the LGIP
rate of 2.59 percent), has an average days to maturity of 981 days, and average
years to maturity is 2.69 years, and
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Operations Committee Minutes
March 15, 2016
Page: 3
With new investments purchased, the City has earned about $88,000 in additional
interest for the 2015 year.
The Advisory Investment Committee is comprised of Mayor (or designee), one member of
the City’s Operations Committee, the Public Works director, and the Finance director. The
investment committee meets quarterly.
The meeting was adjourned at 4:27 p.m. by Les Thomas.
J. Hays
Jennifer Hays
Operations Committee Secretary
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POLICE DEPARTMENT
Ken Thomas, Chief of Police
Phone: 253-856-5800
Fax: 253-856-6802
Address: 220 Fourth Avenue S.
Kent, WA. 98032-5895
DATE: April 5, 2016
TO: Operations Committee
FROM: Chief Thomas
SUBJECT: Drug Forfeiture Funds – Amend Budget and Authorize
Expenditure - Recommend
MOTION: Recommend Council amend the budget and authorize the Mayor
to issue funds, in the total amount of $175,000, to the Suburban King
County Coordinating Council on Gangs, in support of Youth LINC and grants
to promote youth education, payable from funds seized and forfeited to the
Kent Police Department under the state’s drug forfeiture statutes.
SUMMARY: Youth LINC is a program managed by the Suburban King County
Coordinating Council on Gangs (SKCCCG) and the Center for Children & Youth
Justice (CCYJ). Through the Youth LINC Program, SKCCCG delivers direct services
to referred gang-involved youth in Kent through its Intervention Team. The
Intervention Team process, goals and function adhere to the requirements of the
federal Office of Juvenile Justice and Delinquency Prevention (OJJDP)
Comprehensive Gang Model (CGM). In accordance with the OJJDP CGM, the
Intervention Team serves to implement the social intervention and opportunities
provision strategies of the CGM. Funds would be used to support education,
outreach, and enforcement of drug-related activities in our community.
Under state law, money and other assets derived from the illegal sale, delivery, or
receipt of a controlled substance are subject to seizure and forfeiture by a law
enforcement agency. Once forfeited, these assets may be retained by the seizing
law enforcement agency and used for the expansion and improvement of controlled
substances-related law enforcement activity, though forfeited funds may not be
used to supplant preexisting funding sources. The City’s Chief Prosecutor has
advised that forfeiture funds may be used to support education, outreach, and
enforcement of drug-related activities in the Kent community, including the efforts
of SKCCCG through Youth LINC and grants supporting youth education. Therefore,
the Kent Police Department requests Council grant the necessary authorization to
amend the budget and authorize the expenditure of drug forfeiture funds as
requested.
Exhibits: Youth LINC Intervention Team Overview, OJJDP CGM Overview, and
SKCCCG Full Overview
Budget Impact: $175,000 to come from drug forfeiture funds
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YOUTH LINC INTERVENTION TEAM OVERVIEW
Youth LINC is program managed by the Suburban King County Coordinating Council on Gangs (SKCCCG)
and Center for Children & Youth Justice (CCYJ). SKCCCG will deliver direct service to referred gang-involved
youth through implementation of the Youth LINC Pilot Intervention Team beginning in January 2015.
Intervention Team process, goals and function will adhere to the requirements of the OJJDP Comprehensive
Gang Model (CGM). SKCCCG will continue to oversee all strategy and policy designs regarding Intervention
Team function.
Purpose:
In accordance with the OJJDP CGM, The Intervention Team serves to implement the social intervention and
opportunities provision strategies of the CGM. Facilitated by the SKCCCG Project Manager, this
multidisciplinary team facilitates information-sharing and collaboration among agencies serving youth who are
gang-involved. The team-based approach helps ensure that all agencies working with these clients have a
common goal and shared strategies for each client, as well as diversity in expertise and experience.
Youth LINC Intervention Team goals:
Short term:
• Create individualized intervention plans with participation of the gang-involved youth
• Engage gang-involved youth in direct services to address their specific needs
• Work together to dismantle or surmount barriers to service access and success
Long Term:
• Improve coordination and effectiveness of agencies serving gang-involved clients
• Leverage existing resources to better serve gang-involved clients
• Reduce gang-related crime and youth violence in the community
• Support implementation of CGM strategies throughout the target community
Youth LINC Intervention Team Location
The Youth LINC Intervention Team will serve youth within the Renton Supervision Unit of King County Juvenile
Probation Department. The Renton Supervision Unit includes SKCCCG School districts Renton, Highline and
Tukwila. The Intervention Team may serve youth from outside the Renton supervision unit on a case by case
basis as recommended by King County Juvenile Probation.
Client Referral Process
The Youth LINC Intervention Team will receive referrals from King County Juvenile Probation. King County
Juvenile Probation identify youth as gang-involved during intake or at some point during probation. All youth
identified as gang-involved are assigned to a specific set of specially trained Juvenile Probation Counselors
(JPCs). Beginning in January 2015, youth identified as gang-involved in the pilot area (Renton Supervision
unit) will be referred to the Youth LINC Intervention Team by the assigned JPC for review and program
acceptance. Receiving referrals from Probation during the Youth LINC Intervention Team period will allow
SKCCCG to:
• Adhere to consistent client criteria based on a validated risk assessment
• Encourage client participation through JPCs
• Leverage existing services and resources for court-involved youth
• Track specific client data and monitor client and intervention team outcomes
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• Ensure strict fidelity to the CGM through type of clients served, data collected, and Intervention
Team function
Each Youth LINC Intervention Team Client will sign a participant consent form prior to participation in the
program. If clients are under 18, parental consent will be obtained.
Youth LINC Intervention Team Clients
The Youth LINC Intervention Team will serve:
• Clients ages 14-21
• Clients Identified as gang-involved by King County Juvenile Probation
Youth LINC Intervention Team Member Agencies
• Renton School District
• Tukwila School District
• Highline School District
• Valley Cities
• Consejo Counseling and Referral Services
• Safe Futures Youth Center
• Renton Area Youth and Family Services
• Southwest Youth and Family Services
• Boys and Girls Club
• YMCA- Alive & Free
• King County Employment and Education Resources
• Renton Police Department
• Des Moines Police Department
• Tukwila Police Department
• King County Sheriff’s Office
• King County Juvenile Probation
• Center for Children & Youth Justice
Youth LINC Intervention Team Procedure
Youth LINC Intervention Team will meet bi-weekly to accept referrals, establish client case management plans,
and review client progress. Facilitated by the SKCCCG Project Manager, the Youth LINC Intervention Team
will:
• Review and accept referrals
• Establish initial case management plans through consensus-based decision-making
• Review client case management plans and client progress
• Collect data and track client outcomes
• Provide regular progress updates to SKCCCG Councilmembers
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Office of Juvenile Justice and Delinquency Prevention Comprehensive Gang Model
MODEL OVERVIEW
In 1987, the Office of Juvenile Justice and Delinquency Prevention (OJJDP), a division of the U.S. Department of
Justice, began designing a comprehensive approach to reduce and prevent youth gang violence. This effort
resulted in the development and adoption of the OJJDP Comprehensive Gang Model (CGM). This model is now
used as a national best practice for gang intervention and prevention throughout many communities in the United
States. The CGM assumes that many factors contribute to gang involvement. These include: poverty, lack of
education and opportunity, socio-economic and geographic status, family histories of violence and trauma, and
drug and alcohol use. The CGM posits that successful reduction in gang violence must be based on a theoretical
understanding of gangs, as well as monitored data collection and evaluation of many different types and scales of
interventions. The CGM includes five key strategies to address gang-involved youth and families. Communities
committed to implementing the CGM are encouraged to use a combination of all five strategies in order to achieve
a comprehensive, sustainable result. Each strategy is briefly outline d below. In addition to these strategies, the
CGM encourages communities use both policy change and direct service provision to create multidisciplinary
partnerships and leverage existing programs and resources to better serve the affected population.
FIVE STRATEGIES
I. COMMUNITY MOBILIZATION
Community mobilization is the act of mobilizing members of a community around an issue. This CGM strategy
requires participation of agencies and organizations that work with youth grassroots and cultural community
groups, community members, parents, and youth. In order to begin this process, the model recommends that
participating communities form a steering committee. This group is comprised of key organizational and
community leaders representative of the larger population. The steering committee serves as the governing body
of the project, and works to define the gang problem, develop a plan to address the problem, and implement the
project.
II. OPPORTUNITIES PROVISION
Gang-involved youth and families need viable opportunities as a positive alternative to gang involvement and
associated violence. The CGM encourages communities to establish realistic plans and strategies to provide
education, training, and job prospects. These strategies are to be integrated with existing social service activities
such as mental health or substance abuse counseling. Community agencies and grassroots organizations play a
key role in providing services such as tutoring, mentoring, apprenticeships, and job development and placement.
III. SOCIAL INTERVENTION
The CGM conducts social intervention through implementation of a multidisciplinary Intervention Team. This
Team works to provide coordinated service delivery to gang-involved youth and families. Community agencies,
Law enforcement, service providers, school representatives, probation staff and others are active participants in
this team approach. The Team works together to leverage existing agency resources and provide or refer clients
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to services such as such as tutoring and credit retrieval, internships and job placement, drug and alcohol
counseling, and extracurricular activities such as arts workshops and sports. The CGM brings many youth-
serving organizations together in a regularly-scheduled Intervention Team meeting. Team members review and
enroll new referrals, create coordinated case management plans and ensures that clients benefit from an
organized and well-documented network of coordinated services.
Street Outreach staff are key members of the Intervention Team. Outreach workers connect face to face with
hard-to-serve youth and function as a liaison between clients and team members. The outreach staff’s role is to
identify a client’s needs and goals, provide mentorship, coordinate crisis responses to violence, assist the family
in meeting basic needs and addressing conflict, and participate in team based case management provided by the
intervention team. The main goal of Street Outreach staff is to advocate for clients and help them progress toward
meeting their goals.
IV. SUPPRESSION
In the context of the CGM, suppression closely resembles community policing, and includes formal and informal
methods. Law enforcement works collaboratively with the Intervention Team to address safety concerns and
collect data on gang related incidents consistently. Local law enforcement is also involved in ongoing gang crime
data collection and analysis, joint police and community activities and continuing professional development.
V. ORGANIZATIONAL CHANGE AND DEVELOPMENT
Organizational change and development requires that policies and practices of key organizations, especially
those represented on the Intervention Team and Steering Committee, conform to the goals and objectives of the
CGM. Developing and adapting policies and practices to become more inclusive and community-oriented ensures
the optimal use of agency resources. Key organization change and development strategies include legislative
change, re-entry policy reform, uniform data collection across agencies and increased collaboration and resource
sharing.
IMPLEMENTATION
In order to successfully implement the CGM, the community must acknowledge and commit to addressing an
existing gang issue. Next a lead agency is chosen and a Steering Committee comprised of elected officials, policy
makers, school superintendents, community leaders, service agency directors and Law Enforcement leaders is
convened. The Steering Committee serves as the governing body for the project and guides all project activities
and policy decisions. In the initial stage of implementation the lead agency or research partner will conduct a
thorough assessment to understand the nature and scope of the current issues faced by the community. Based
on the key findings of the community assessment, the Steering Committee and other representatives will develop
a comprehensive plan that incorporates all five strategies of the model to address the problem. The Intervention
Team is a key component of this comprehensive plan, and supplements the policy initiatives of the model with the
provision of targeted direct service to gang-involved youth and families. In order to evaluate success and inform
future project efforts, the community must conduct ongoing evaluation of model implementation and outcome
data. For further information please visit http://ccyj.org/initiatives/council-on-gangs/, or contact Anica Stieve,
SKCCCG Project Manager at astieve@ccyj.org.
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SUBURBAN KING COUNTY COORDINATING COUNCIL ON GANGS – IMPLEMENTATION PLAN OVERVIEW
Implementation Plan
In accordance with the Office of Juvenile Justice and Delinquency Prevention’s Comprehensive Gang Model, the
Suburban King County Coordinating Council on Gangs (SKCCCG) and The Center for Children & Youth Justice (CCYJ)
completed a Community Assessment in spring 2013. Based on key findings, SKCCCG identified six problem areas and
developed corresponding goals to address each. Below is an outline of SKCCCG’s multi-strategy, comprehensive
implementation plan to address gang violence in Suburban King County.
Community Resources
Increase collaboration between service providers in order to maximize efficiency of
existing services for SKCCCG youth and families.
Convene a Service Provider Workgroup to guide related project efforts
Increase communication and data analysis among service providers
Support creation and launch of the Youth Program Directory – County-wide
online directory of youth programs
Community Engagement
Increase community awareness and participation in gang prevention strategies and
services.
Design and distribute a parent and community information campaign
Expand G.R.E.A.T. (Gang Resistance Education and Training) program sites
across SKCCCG districts
Host training for community groups and law enforcement to achieve community mobilization
Students and Schools
Equip school-based staff and after school program staff with culturally appropriate tools to meet the educational
social and emotional needs of gang affiliated youth.
Convene a workgroup of middle school counselors to guide prevention efforts
Conduct training for school staff and School Resource Officers (SROs) using National Gang Center resources
Partner with Road Map Project to integrate efforts and identify areas of collaboration
Participate in Road Map Project’s Opportunity Youth Initiative
Gang-Involved Population
Promote public safety and awareness of youth violence and gun and gang-related crime.
SKCCCG law enforcement agencies will implement a uniform data collection protocol across the region
Support and promote a public information campaign on home gun safety, in partnership with Public Health
SKCCCG Law enforcement workgroup will work to increase communication between schools, service providers
and law enforcement to foster pro-social relationships with SKCCCG youth and families
Targeted Intervention – Youth LINC Intervention Team
Convene a multidisciplinary intervention team to deliver targeted intervention services to appropriate gang-involved
clients.
The Youth LINC Intervention Team delivers comprehensive services to gang-involved youth in the project region
Re-Entry
Utilize direct service and policy reform to reduce barriers to successful re-entry and employment for gang involved
youth and young adults
Create pro-work policies and support juvenile record sealing legislation
Engage local businesses and increase internship and employment opportunities for Youth LINC clients
Serve Youth LINC clients comprehensively to address and surmount barriers to successful re-entry
SKCCCG serves the
following school
districts:
Auburn
Bellevue
Federal Way
Highline
Kent
Renton
Tukwila
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Kent Council Operations Committee 2015 Internal Financing for
LED Lighting Replacement Project
FINANCE
Aaron BeMiller, Director
Phone: 253-856-5260
Fax: 253-856-6255
Address: 220 Fourth Avenue S.
Kent, WA. 98032-5895
DATE: April 5, 2016
TO: Operations Committee
FROM: Aaron BeMiller, Director
SUBJECT: Ordinance Approving 2015 Internal Financing – 72nd Avenue South
Improvements Project - Recommend
MOTION: Recommend adoption of Ordinance No. , approving an
internal financing for the 72nd Avenue South Improvements Project in an
amount not to exceed $1,000,000 and, to be repaid over an eight year
repayment schedule.
SUMMARY: The Public Works Committee has requested that an internal financing
for the Public Works 72nd Avenue South Improvements Project be brought before
the Operations Committee for consideration. The estimated total cost for the
project is $3,760,000. The funding for the project comes from four (4) sources: WA
State Transportation Improvement Board grant ($1,182,420), Drainage District #1
matching contribution ($20,000), City matching contribution ($1,357,600), and the
City of Kent Regional Fire Authority ($1,200,000).
The City has entered into an interlocal agreement with the City of Kent Regional
Fire Authority (RFA) whereby the RFA will remit to the City ten (10) annual
payments of $120,000. Because of the timing of the RFA funding, it is necessary for
the City to internally fund $1,000,000 of the project cost through an internal loan
from the Sewerage Operating Fund.
The $1,000,000 internal loan will be financed over eight (8) years and will include
interest. The annual payments of $120,000 from the RFA will be applied to pay
down the outstanding internal debt. Annual debt payments will be made by the
Public Works Street Fund to the Sewerage fund as summarized and set forth in
Exhibit A of the ordinance.
Unless modified by the City Council, the term of the internal financing shall not
exceed eight (8) years and the annual interest rate is to be the higher of 1.25
percent or the annualized interest rate earned on the investments in the LGIP
(Local Government Investment Pool). The interest rate will be reviewed at the end
of each fiscal year and the debt service recalculated if necessary.
BUDGET IMPACT: $1,000,000, plus annual debt service through 2024
BACKGROUND:
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1 2016 Internal Financing
72nd Avenue South Project
ORDINANCE NO.
AN ORDINANCE of the City Council of the
City of Kent, Washington, approving internal
financing for the 72nd Avenue South Improvements
Project not to exceed $1,000,000 and, to be
repaid over an eight (8) year repayment schedule.
THE CITY COUNCIL OF THE CITY OF KENT, WASHINGTON, DOES
HEREBY ORDAIN AS FOLLOWS:
ORDINANCE
SECTION 1.
Internal Financing. The City Council approves the internal funding
for the 72nd Avenue South Improvements Project to come from the
following source and amount:
Sewerage Operating Fund: $1,000,000
The $1,000,000 internal loan will be internally financed over eight (8)
years and will include interest.
Repayment. The City and the City of Kent Regional Fire Authority
(RFA) have entered into an Interlocal Agreement (ILA) where the RFA will
remit to the City ten annual payments of not less than $120,000 beginning
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2 2016 Internal Financing
72nd Avenue South Project
in 2016. The payments from the RFA to the City are to be used to fund a
portion of the cost of the 72nd Avenue South Improvements project as
outlined in the ILA. The total cost of the project is estimated to be
$3,760,000. The annual payments of $120,000 from the RFA will be
applied to pay down the outstanding internal debt. Annual debt payments
will be made by the Public Works Street Fund to the Sewerage fund as
summarized and set forth in Exhibit A, which is attached and incorporated
into this ordinance.
Financing Terms. Unless modified by the City Council, the term of
the internal financing shall not exceed eight (8) years and the annual
interest rate is to be the higher of 1.25% or the annualized interest rate
earned on the investments in the LGIP (Local Government Investment
Pool). The interest rate will be reviewed at the end of each fiscal year and
the debt service recalculated if necessary.
SECTION 2. – Severability. If any one or more section, subsection,
or sentence of this ordinance is held to be unconstitutional or invalid, such
decision shall not affect the validity of the remaining portion of this
ordinance and that remaining portion shall maintain its full force and
effect.
SECTION 3. – Corrections by City Clerk or Code Reviser. Upon
approval of the City Attorney, the City Clerk and the code reviser are
authorized to make necessary corrections to this ordinance, including the
correction of clerical errors; ordinance, section, or subsection numbering;
or references to other local, state or federal laws, codes, rules, or
regulations.
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3 2016 Internal Financing
72nd Avenue South Project
SECTION 4. – Effective Date. This ordinance shall take effect and
be in force five (5) days from and after its passage and publication, as
provided by law.
SUZETTE COOKE, MAYOR
ATTEST:
RONALD F. MOORE, CITY CLERK
APPROVED AS TO FORM:
TOM BRUBAKER, CITY ATTORNEY
PASSED: day of , 2016.
APPROVED: day of , 2016.
PUBLISHED: day of , 2016.
I hereby certify that this is a true copy of Ordinance No.
passed by the City Council of the City of Kent, Washington, and approved
by the Mayor of the City of Kent as hereon indicated.
(SEAL)
RONALD F. MOORE, CITY CLERK
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4 2016 Internal Financing
72nd Avenue South Project
EXHIBIT A
Internal Note
Funding of 72nd Street Improvements Project
Interfund Note from Drainage Fund to General Fund
Repayment Schedule
Original Principal Amount 1,000,000.00$
Interest Rate 1 1.25%
Loan Years 8
Note Dated 3/1/2016
Maturity 12/31/2024
Payments $120,000.00
Date
Beginning
Balance
Estimated/
Actual Interest
Estimated/
Actual
Principal Total Payment New Balance
12/31/2016 1,000,000.00$ 12,500.00 107,500.00 120,000.00 892,500.00
12/31/2017 892,500.00 11,156.25 108,843.75 120,000.00 783,656.25
12/31/2018 783,656.25 9,795.70 110,204.30 120,000.00 673,451.95
12/31/2019 673,451.95 8,418.15 111,581.85 120,000.00 561,870.10
12/31/2020 561,870.10 7,023.38 112,976.62 120,000.00 448,893.48
12/31/2021 448,893.48 5,611.17 114,388.83 120,000.00 334,504.65
12/31/2022 334,504.65 4,181.31 115,818.69 120,000.00 218,685.96
12/31/2023 218,685.96 2,733.57 117,266.43 120,000.00 101,419.53
12/31/2024 101,419.53 1,267.74 101,419.53 102,687.27 -
62,687.27 1,000,000.00 1,062,687.27
Notes:
The Kent Regional Fire Authority is to pay the City $120,000 per year for 10 years to fund their
portion of this project. These funds will be used to repay this loan.
1 The annual interest rate is to be the higher of 1.25% or the annualized interest rate earned on
the investments in the LGIP (State investment pool). The inteerest rate will be reveiwed at the
end of each fiscal year and the debt service recalculated if necessary.
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Kent Council Operations Committee
FINANCE
Aaron BeMiller, Director
Phone: 253-856-5260
Fax: 253-856-6255
Address: 220 Fourth Avenue S.
Kent, WA. 98032-5895
DATE: April 5, 2016
TO: Operations Committee
FROM: Aaron BeMiller, Director
SUBJECT: 2016 Bond Refunding - Recommend
MOTION: Move to recommend council adopt Ordinance No. ,
providing for the issuance of one or more series of limited tax general
obligation refunding bonds in an aggregate principal amount not to exceed
$80,000,000, to refund certain outstanding city limited tax general
obligation bonds, to refund certain outstanding sales tax bonds of the City
of Kent Special Events Center Public Facilities District, and to pay costs of
issuing the bonds; providing the form and terms of the bonds; and
delegating the authority to approve the final terms of the bonds, subject to
the approval of final terms by the city’s finance director and city attorney.
SUMMARY: The finance department has been working with our financial advisor,
Piper Jaffray & Co, and Bond Counsel, Pacifica Law Group LLP, to refund the City’s
2008A General Obligations bonds. Additionally, in participation with the City of Kent
Public Facility District (PFD) and its Bond Counsel, Foster Pepper PLLC, the City and
PFD are working jointly to refund the PFD’s 2008 sales tax bonds (Sales Tax
Bonds).
The City will be refunding the Sales Tax Bonds at the PFD Board’s request. This
action will formally incorporate the Sales Tax Bonds onto the City’s books.
However, the City already includes these bonds in our bond capacity, accounts for
the City’s portion of the outstanding obligation of the bonds on our financial
statements per GASB (Governmental Accounting Standards Board) rules, and
budgets the City’s annual estimated obligation for debt service.
In 2008, the PFD sold $63,280,000 in bonds - $10,130,000 of taxable revenue
bonds and $53,150,000 in tax exempt Sales Tax Bonds. The City, with cooperation
of the PFD, is refunding only the tax exempt Sales Tax Bonds. The taxable bonds
are not impacted. When the PFD bonds were sold, the City and the PFD entered into
a Contingent Loan and Support Agreement. That agreement will remain intact until
final maturity (2020) of the taxable revenue bonds.
Through the adoption of this ordinance, the City will approve a new Interlocal
Financing Agreement (Exhibit B) between the City and the PFD. This agreement
17
Kent Council Operations Committee
essentially duplicates the language in the current Contingent Loan and Support
Agreement except that it reverses the flow of cash between the City and PFD. The
new financing agreement ensures that the sales taxes collected by the PFD will be
used to help pay for the debt service on the portion of the City’s bonds used to
refund and Sales Tax Bonds.
The bond market fluctuates and therefore the most favorable market conditions
may occur on a day other than a regular meeting of the Council. The refunding
ordinance allows for the designated representative to approve the final refunding as
long as the following conditions are met:
The aggregate principal amount of the Bonds does not exceed $80M, and
The final maturity date is no later than December 1, 2037, and
Each series of Bonds are sold in the aggregate at a price not less than 97
percent and not greater than 130 percent, and
Any Bonds sold for the purpose of refunding must result in a minimum net
present value savings of at least 3.00 percent and,
The true interest cost for each series of Bonds, in the aggregate, does not
exceed 4.00 percent and,
Any refunding must take place before December 31, 2016.
The refunding ordinance requires that the Finance Director provide a report to the
Council describing the final terms of the refunding(s). The scheduled closing date
on the refundings is June 2, 2016.
BUDGET IMPACT: Current estimates (February 2016) on the refundings are a net
present value savings of $7,569,510 or 10.80 percent on the refunded bonds, and a
true interest cost of 3.11 percent.
BACKGROUND: The purposes of the 2008 bonds included financing the design and
construction of the public works East Hill maintenance facility, purchase and
renovate the municipal court facility, construction at the ShoWare Center, and
implement the capital components of the City’s 2008 technology plan.
The purpose of the Sales Tax Bonds was to fund the construction of the Special
Events Center (ShoWare Center).
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NO. _______
AN ORDINANCE OF THE CITY OF KENT,
WASHINGTON, PROVIDING FOR THE ISSUANCE OF ONE OR
MORE SERIES OF LIMITED TAX GENERAL OBLIGATION
REFUNDING BONDS OF THE CITY IN THE AGGREGATE
PRINCIPAL AMOUNT OF NOT TO EXCEED $80,000,000 TO
REFUND CERTAIN OUTSTANDING LIMITED TAX GENERAL
OBLIGATION BONDS OF THE CITY, TO REFUND CERTAIN
OUTSTANDING SPECIAL EVENTS CENTER SALES TAX BONDS,
2008 OF THE CITY OF KENT SPECIAL EVENTS CENTER
PUBLIC FACILITIES DISTRICT, AND TO PAY COSTS OF
ISSUING THE BONDS; PROVIDING THE FORM AND TERMS OF
THE BONDS; DELEGATING THE AUTHORITY TO APPROVE THE
FINAL TERMS OF THE BONDS; AND APPROVING CERTAIN
MATTERS RELATED THERETO.
PASSED: April 19, 2016
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 ...................................... 4
SECTION 2. - Authorization of Bonds and Bond Details .................................. 12
SECTION 3. - Registration, Exchange and Payments ....................................... 13
SECTION 4. - Redemption Prior to Maturity and Purchase
of Bonds ............................................................................................................. 19
SECTION 5. - Form of Bonds ...................................................................................... 24
SECTION 6. - Execution of Bonds ............................................................................ 24
SECTION 7. - Refunding Plan; Application of Bond
Proceeds ............................................................................................................. 25
SECTION 8. - Tax Covenants ..................................................................................... 28
SECTION 9. - Bond Fund and Provision for Tax Levy
Payments ........................................................................................................... 30
SECTION 10. - Defeasance ............................................................................................ 32
SECTION 11. - Sale of Bonds ....................................................................................... 33
SECTION 12. - Undertaking to Provide Ongoing Disclosure ............................. 36
SECTION 13. - Lost, Stolen or Destroyed Bonds .................................................. 41
SECTION 14. - Severability; Ratification.................................................................. 41
SECTION 15. - Corrections by City Clerk or Code Reviser ................................ 41
SECTION 16. - Effective Date of Ordinance ............................................................ 42
Exhibit A – Form of Bond
Exhibit B – Form of Interlocal Financing Agreement
* 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, PROVIDING FOR THE ISSUANCE
OF ONE OR MORE SERIES OF LIMITED TAX
GENERAL OBLIGATION REFUNDING BONDS OF
THE CITY IN THE AGGREGATE PRINCIPAL
AMOUNT OF NOT TO EXCEED $80,000,000 TO
REFUND CERTAIN OUTSTANDING LIMITED TAX
GENERAL OBLIGATION BONDS OF THE CITY,
TO REFUND CERTAIN OUTSTANDING SPECIAL
EVENTS CENTER SALES TAX BONDS, 2008 OF
THE CITY OF KENT SPECIAL EVENTS CENTER
PUBLIC FACILITIES DISTRICT, AND TO PAY
COSTS OF ISSUING THE BONDS; PROVIDING
THE FORM AND TERMS OF THE BONDS;
DELEGATING THE AUTHORITY TO APPROVE THE
FINAL TERMS OF THE BONDS; AND APPROVING
CERTAIN MATTERS RELATED THERETO.
RECITALS
A. The City of Kent, Washington (the “City”) has outstanding its
Limited Tax General Obligation Bonds, 2008A, issued pursuant to
Ordinance No. 3889 passed by the City Council (the “Council”) on
August 19, 2008 (the “2008A Bond Ordinance”), which remain outstanding
in the aggregate principal amount of $19,265,000 (the “2008A Bonds”);
and
B. The 2008A Bond Ordinance provides that the City may call
the 2008A Bonds maturing on or after December 1, 2019 for redemption
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on or after December 1, 2018, in whole or in part at any time, at a price of
par plus accrued interest, if any, to the date of redemption; and
C. After due consideration it appears to the Council that all or a
portion of the 2008A Bonds maturing on or after December 1, 2019 (as
further defined herein, the “Refunded 2008A Bonds”) may be defeased
and refunded by the proceeds of limited tax general obligation refunding
bonds at a savings to the City and its taxpayers; and
D. Pursuant to chapter 35.57 of the Revised Code of Washington
(“RCW”) and Ordinance No. 3852 passed by the Council on August 7,
2007, the City created the City of Kent Special Events Center Public
Facilities District (the “District”) as a separate municipal corporation for
the purpose of acquiring, constructing, and maintaining a regional center
as defined in RCW 35.57.020; and
E. Pursuant to Resolution No. 2008-2 adopted by the Board of
Directors (the “Board”) of the District on February 20, 2008 (the “District
Bond Resolution”), the District issued its Special Events Center Sales Tax
Bonds, 2008 which currently remain outstanding in the aggregate principal
amount of $53,150,000 (the “Sales Tax Bonds”) to finance the acquisition
and construction of a multi-purpose arena for hockey and other public
uses, together with related parking facilities (the "Special Events Center");
and
F. The principal of and interest on the Sales Tax Bonds are
payable from revenues of a sales and use tax (the “Sales Tax”) imposed
by the District pursuant to Resolution No. 2007-1 adopted by the Board on
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September 14, 2007 and authorized by RCW 35.57.040(1)(d) and
RCW 82.14.390 (the “Sales Tax Revenue”), and other revenues of the
Special Events Center pledged therefor; and
G. The principal of and interest on the Sales Tax Bonds is also
payable from and secured by amounts received by the District under the
terms of the Contingent Loan and Support Agreement Regarding Financing
for Kent Special Events Center dated February 20, 2008 between the City
and the District (the “Contingent Loan Agreement”), pursuant to which the
City agreed to make loans to the District in the event that the District did
not have on deposit sufficient Sales Tax Revenue or other available
revenues of the Special Events Center to pay any scheduled payment of
principal of or interest on the Sales Tax Bonds; and
H. The obligation of the City under the Contingent Loan
Agreement to make loans to the District in the amounts and at the times
specified therein is an absolute and unconditional obligation of the City,
secured by the full faith, credit and resources of the City; and
I. The District Bond Resolution provides that the District may
call the Sales Tax Bonds for redemption on or after June 1, 2018, on any
date, at a price of par plus accrued interest, if any, to the date of
redemption; and
J. After due consideration it appears to the Council that all of
the outstanding Sales Tax Bonds (the “Refunded Sales Tax Bonds”) may
be defeased and refunded with proceeds of limited tax general obligation
refunding bonds issued by the City for debt service savings; and
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K. The Board has or will adopt a resolution authorizing the
defeasance and redemption of the Sales Tax Bonds with proceeds of
limited tax general obligation refunding bonds issued by the City; and
L. The Council deems it in the best interest of the City to issue
one or more series of limited tax general obligation refunding bonds in the
aggregate principal amount of not to exceed $80,000,000 (the “Bonds”) to
redeem and defease the Refunded 2008A Bonds and the Refunded Sales
Tax Bonds and to pay costs of issuing the Bonds and administrative costs
of the refundings; and
M. 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 each series of Bonds within the parameters set by this ordinance; and
N. The City expects to receive a proposal from KeyBanc Capital
Markets Inc. (the “Underwriter”) and now desires to authorize the
acceptance of such proposal and the issuance and sale of the Bonds to the
Underwriter as set forth herein;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF KENT,
WASHINGTON DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. - Definitions and Interpretation of Terms.
(a) Definitions. As used in this ordinance, the following words
shall have the following meanings:
Acquired Obligations means the Government Obligations acquired
by the City under the terms of this ordinance and the Escrow Agreement
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to effect the defeasance and refunding of the Refunded Bonds, but only to
the extent that the same are acquired at Fair Market Value.
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).
Board means the Board of Directors of the District.
Bond Counsel means Pacifica Law Group LLP or an attorney at law
or a firm of attorneys, selected by the City, of nationally recognized
standing in matters pertaining to the tax-exempt nature of interest on
bonds issued by states and their political subdivisions.
Bond Fund means the “City of Kent Limited Tax General Obligation
Bond Debt Service Fund.”
Bond Purchase Contract means the contract for the purchase of the
Bonds between the Underwriter and the City, executed pursuant to
Section 11.
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 agent of the State of
Washington, for the purposes of registering and authenticating each series
of Bonds, maintaining the Bond Register, effecting transfer of ownership of
the Bonds and paying interest on and principal of the Bonds.
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Bonds mean the not to exceed $80,000,000 aggregate principal
amount of City of Kent, Washington, Limited Tax General Obligation
Refunding Bonds, 2016, authorized to be issued in one or more series
pursuant to this ordinance.
Call Date means the dates specified in the Escrow Deposit
Agreement for the refunding of each series of the Refunded Bonds.
Chief Administrative Officer means the Chief Administrative Officer
of the City or the successor to such officer.
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 in effect on the
date of issuance of the Bonds or (except as otherwise referenced herein)
as it may be amended to apply to obligations issued on the date of
issuance of the Bonds, together with applicable proposed, temporary and
final regulations promulgated, and applicable official public guidance
published, under the Code.
Commission means the Securities and Exchange Commission.
Contingent Loan Agreement means the Contingent Loan and
Support Agreement Regarding Financing for the Kent Special Events
Center between the City and the District dated February 20, 2008, as it
may be amended from time to time.
Council or City Council means the legislative body of the City as
duly and regularly constituted from time to time.
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Designated Representative means the City Mayor, or his or her
designee. If the Mayor is absent or otherwise unavailable and has not
designated another representative, the Mayor Pro Tempore of the City, or
his or her designee, shall serve as the Designated Representative.
District means the City of Kent Special Events Center Public
Facilities District, established by the City under chapter 35.57 RCW.
District Bond Resolution means Resolution No. 2008-2 adopted by
the Board of the District on February 20, 2008 authorizing the issuance of
the Sales Tax Bonds.
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 3.
Escrow Agent means U.S. Bank National Association, Seattle,
Washington.
Escrow Deposit Agreement means the Escrow Deposit Agreement(s)
between the City, the Escrow Agent, and the District (with respect to the
Refunded Sales Tax Bonds) to be dated as of the date of closing of a
series of Bonds.
Fair Market Value means the price at which a willing buyer would
purchase the investment from a willing seller in a bona fide, arm’s length
transaction (determined as of the date the contract to purchase or sell the
investment becomes binding) if the investment is traded on an established
securities market (within the meaning of Section 1273 of the Code) and,
otherwise, the term “Fair Market Value” means the acquisition price in a
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bona fide arm’s length transaction (as referenced above) if (i) the
investment is a certificate of deposit that is acquired in accordance with
applicable regulations under the Code, (ii) the investment is an agreement
with specifically negotiated withdrawal or reinvestment provisions and a
specifically negotiated interest rate (for example, a guaranteed investment
contract, a forward supply contract or other investment agreement) that is
acquired in accordance with applicable regulations under the Code, (iii) the
investment is a United States Treasury Security--State and Local
Government Series that is acquired in accordance with applicable
regulations of the United States Bureau of Public Debt, or (iv) any
commingled investment fund in which the City and related parties do not
own more than a 10% beneficial interest therein if the return paid by the
fund is without regard to the source of the investment. To the extent
required by the applicable regulations under the Code, the term
“investment” will include a hedge.
Federal Tax Certificate means the certificate executed by the
Finance Director setting forth the requirements of the Code for
maintaining the tax exemption of interest on the Bonds to be dated as of
the date of closing for a series of Bonds, and attachments thereto.
Finance Director means the Finance Director of the City or the
successor to such officer.
Financing Agreement means the Interlocal Financing Agreement
between the City and the District, substantially in the form attached
hereto in Exhibit B, as it may be amended from time to time.
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Government Obligations means those obligations now or hereafter
defined as such in chapter 39.53 RCW, as this chapter may be hereafter
amended or restated.
Letter of Representations means the Blanket Issuer Letter of
Representations from the City to DTC, as amended from time to time.
Mayor means the duly appointed and acting Mayor of the City or the
successor to the duties of that office.
MSRB means the Municipal Securities Rulemaking Board or any
successors to its functions.
Official Statement means the disclosure documents prepared and
delivered in connection with the issuance of the Bonds.
Refunded Bonds mean the Refunded 2008A Bonds and the
Refunded Sales Tax Bonds.
Refunded Sales Tax Bonds mean the outstanding Sales Tax Bonds
maturing on or after December 1, 2020 designated by the Designated
Representative for defeasance and/or refunding pursuant to Section 7 and
Section 11.
Refunded 2008A Bonds mean all or a portion of the 2008A Bonds
maturing on or after December 1, 2019, which are designated by the
Designated Representative for defeasance and/or refunding pursuant to
Section 7 and Section 11.
Refunding Account means the account by that name established
pursuant to Section 7.
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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.
Sales Tax means the sales and use taxes imposed by the District
pursuant to Resolution No. 2007-1 of the Board adopted on September 14,
2007 and authorized by RCW 35.57.040(1)(d) and RCW 82.14.390 at the
rate of 0.037% of the selling price (in the case of a sales tax) or the value
of the article used (in the case of a use tax).
Sales Tax Bonds mean the District’s Special Events Center Sales Tax
Bonds, 2008 issued pursuant to the District Bond Resolution as described
in the recitals of this ordinance.
Sales Tax Revenue means all the money received by the District
from the Washington State Department of Revenue on account of the
Sales Tax imposed by and collected for the District.
Special Events Center means the land, real property improvements,
buildings, facilities, fixtures, equipment, support facilities and related
parking facilities comprising a special events center of approximately
153,000 square feet, including an ice arena, as such facilities may be
expanded from time to time, located in the City and constituting a
"regional center" within the meaning of chapter 35.57 RCW, as it may be
amended from time to time.
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Special Events Center Revenues has the meaning set forth in the
Financing Agreement, and includes all revenue, earnings, and money
received by the City from or on account of the operation and/or ownership
of the Special Events Center, including but not limited to license fees,
facility fees, concession revenues, advertising revenues, suite license
revenues, club seat revenues, parking revenues, and naming rights
revenues.
2008A Bond Ordinance means Ordinance No. 3889 adopted by the
Council on August 19, 2008 authorizing the issuance of the 2008A Bonds.
2008A Bonds mean the City of Kent, Washington, Limited Tax
General Obligation Bonds, 2008A issued pursuant to the 2008A Bond
Ordinance as described in the recitals of this ordinance.
Underwriter means KeyBanc Capital Markets Inc., or its successors.
(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 “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;
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(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. - Authorization of Bonds and Bond Details. For the
purpose of refunding the Refunded Bonds and paying costs of issuance of
the Bonds and the administrative costs of the refunding, the City is hereby
authorized to issue and sell one or more series of limited tax general
obligation refunding bonds in the aggregate principal amount of not to
exceed $80,000,000 (the “Bonds”).
The Bonds of each series shall be general obligations of the City,
shall be designated “City of Kent, Washington, Limited Tax General
Obligation Refunding Bonds, 2016” with other such designation as set
forth in the Bond Purchase Contract and approved by the Designated
Representative.
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The Bonds may be sold in one or more series, with each series
dated the date of its initial delivery. 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 within a
maturity, shall be numbered separately in the manner and with any
additional designation as the Bond Registrar deems necessary for
purposes of identification and control, and shall bear interest payable on
the dates set forth in the Bond Purchase Contract. The Bonds shall bear
interest at the rates set forth in the Bond Purchase Contract; and shall
mature on the dates and in the principal amounts set forth in the Bond
Purchase Contract and as approved by a Designated Representative
pursuant to Section 11.
SECTION 3. - 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 of the
state fiscal agent. 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 designated 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
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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 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
of each series as the absolute owner thereof for all purposes (except as
provided in Section 12 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 3(g), but such
Bond may be transferred as herein provided. All such payments made as
described in Section 3(g) 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. 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
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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 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 maturing on each of the
maturity dates for the Bonds within a series in a denomination
corresponding to the total principal therein designated to mature on such
date. 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.
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(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 Bonds of a series, together with a written request on behalf of
the Finance Director, issue a single new Bond for each maturity of a 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
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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 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, maturity, series,
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, maturity, series, and interest rate, in any authorized
denomination. The Bond Registrar shall not be obligated to register the
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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) Place and Medium of Payment. Both principal of and interest
on the Bonds shall be payable in lawful money of the United States of
America. 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
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presentation and surrender of such Bonds by the Registered Owners at the
designated 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 4. - Redemption Prior to Maturity and Purchase of Bonds.
(a) Mandatory Redemption of Term Bonds and Optional
Redemption, if any. Each series of Bonds shall be subject to mandatory
redemption to the extent, if any, set forth in the Bond Purchase Contract
approved by the Designated Representative pursuant to Section 11. Each
series of Bonds shall be subject to optional redemption on the dates, at
the prices and under the terms set forth in the Bond Purchase Contract
approved by the Designated Representative pursuant to Section 11.
(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. For as long as the Bonds
are held in book-entry only form, the selection of particular Bonds within a
series and maturity to be redeemed shall be made in accordance with the
operational arrangements then in effect at DTC. If the Bonds are no
longer held in uncertificated form, the selection of such Bonds to be
redeemed and the surrender and reissuance thereof, as applicable, shall
be made as provided in the following provisions of this subsection (c). If
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the City redeems at any one time fewer than all of the Bonds within a
series having the same maturity date, the particular Bonds or portions of
Bonds of such series and maturity to be redeemed shall be selected by lot
(or in such manner determined by the Bond Registrar) in increments of
$5,000. In the case of a Bond of a denomination greater than $5,000, the
City and the Bond Registrar shall treat each Bond of such series and
maturity as representing such number of separate Bonds each of the
denomination of $5,000 as is obtained by dividing the actual principal
amount of such Bond of such series and maturity by $5,000. In the event
that only a portion of the principal sum of a Bond is redeemed, upon
surrender of such Bond at the designated office of the Bond Registrar
there shall be issued to the Registered Owner, without charge therefor, for
the then unredeemed balance of the principal sum thereof, at the option of
the Registered Owner, a Bond or Bonds of like maturity, series, and
interest rate in any of the denominations herein authorized.
(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
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redemption shall be given by the Bond Registrar on behalf of the City by
mailing a copy of an official redemption notice by 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.
All official notices of redemption shall be dated and shall state:
(A) the redemption date,
(B) the redemption price,
(C) if fewer than all outstanding Bonds are to be
redeemed, the identification by series and maturity (and, in the case of
partial redemption, the respective principal amounts) of the Bonds to be
redeemed,
(D) conditions to redemption;
(E) that (unless such notice is conditional) on the
redemption date the redemption price will become due and payable upon
each such Bond or portion thereof called for redemption, and that interest
thereon shall cease to accrue from and after said date, and
(F) the place where such Bonds are to be
surrendered for payment of the redemption price, which place of payment
shall be the designated office of the Bond Registrar.
On or prior to any redemption date, unless any condition to such
redemption has not been satisfied or waived or notice of such redemption
has been rescinded, the City shall deposit with the Bond Registrar an
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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. The City retains
the right to rescind any redemption notice and the related optional
redemption of Bonds by giving notice of rescission to the affected
registered owners at any time on or prior to the scheduled redemption
date. Any notice of optional redemption that is so rescinded shall be of no
effect, and the Bonds for which the notice of optional redemption has been
rescinded shall remain outstanding.
(2) Effect of Notice; Bonds Due. If notice of redemption
has been given and not rescinded, or if the conditions set forth in a
conditional notice of redemption have been satisfied or waived, the Bonds
or portions of Bonds to be redeemed shall, on the redemption date,
become due and payable at the redemption price therein specified, and, if
the Bond Registrar then holds sufficient funds to pay such Bonds at the
redemption price, then 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.
(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
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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 12 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 4, 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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SECTION 5. - Form of Bonds. The Bonds shall be in substantially
the form set forth in Exhibit A, which is incorporated herein by this
reference, with appropriate or necessary insertions, depending upon the
omissions and variations as permitted or required hereby.
SECTION 6. - Execution of Bonds. The Bonds of each series 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 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
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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 7. - Refunding Plan; Application of Bond Proceeds.
(a) Refunding Plan. For the purpose of realizing a debt service
savings, upon the issuance of the Bonds, the City shall loan a portion of
the proceeds of the Bonds to the District pursuant to the terms of the
Financing Agreement for the purpose of refunding the Refunded Sales Tax
Bonds and paying costs of issuance allocable to that portion of the Bonds
and administrative costs of the refunding. Such portion of the proceeds of
the Bonds shall be deposited, on behalf of the District, with the Escrow
Agent pursuant to the Escrow Deposit Agreement, to be used immediately
upon receipt thereof to defease the Refunded Sales Tax Bonds as
authorized by the District Bond Resolution and to pay costs of issuance
allocable to that portion of the Bonds and administrative costs of the
refunding.
For the purpose of realizing a debt service savings, the City also
proposes to defease and refund the Refunded 2008A Bonds as set forth
herein. The Refunded 2008A Bonds shall include all or a portion of the
2008A Bonds maturing on or after December 1, 2019, which are
designated by the Designated Representative for refunding and set forth in
the Bond Purchase Contract. A portion of the proceeds of the Bonds shall
be deposited with the Escrow Agent pursuant to the Escrow Deposit
Agreement to be used immediately upon receipt thereof to defease the
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Refunded 2008A Bonds as authorized by the 2008A Bond Ordinance and
to pay costs of issuance allocable to that portion of the Bonds and
administrative costs of the refunding.
The proceeds of the Bonds deposited with the Escrow Agent shall be
used to defease the Refunded Bonds and discharge the obligations thereon
by the purchase of Acquired Obligations bearing such interest and
maturing as to principal and interest in such amounts and at such times
which, together with any necessary beginning cash balance, will provide
for the payment of:
(1) interest on the Refunded Bonds as such becomes due
on and prior to the applicable Call Date; and
(2) the redemption price (100% of the principal amount)
of the Refunded Bonds on the applicable Call Date.
Such Acquired Obligations shall be purchased at a yield not greater
than the yield permitted by the Code and regulations relating to acquired
obligations in connection with refunding bond issues.
(b) Escrow Agent/Escrow Deposit Agreement. The City hereby
appoints U.S. Bank National Association, Seattle, Washington, as the
Escrow Agent for the Refunded Bonds. A beginning cash balance, if any,
and the Acquired Obligations shall be deposited irrevocably with the
Escrow Agent in an amount sufficient to defease the Refunded Bonds. The
proceeds of the Bonds remaining after acquisition of the Acquired
Obligations and provision for the necessary beginning cash balance shall
be utilized to pay expenses of the acquisition and safekeeping of the
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Acquired Obligations and costs of issuance of the Bonds and the
administrative costs of the refunding.
In order to carry out the purposes of this Section 7, the Finance
Director is authorized and directed to execute and deliver to the Escrow
Agent, one or more Escrow Deposit Agreements.
(c) Call for Redemption of Refunded Bonds. The City hereby sets
aside sufficient funds out of the purchase of Acquired Obligations from
proceeds of the Bonds to make the payments described above.
The City hereby directs the District and the Escrow Agent to call the
Refunded Sales Tax Bonds for redemption on their Call Date in accordance
with the provisions of the District Bond Resolution authorizing the
redemption and retirement of the Refunded Sales Tax Bonds prior to their
stated maturity dates.
The City further calls the Refunded 2008A Bonds for redemption on
their Call Date in accordance with the provisions of the 2008A Bond
Ordinance authorizing the redemption and retirement of the 2008A Bonds
prior to their fixed maturities.
Said defeasance and call for redemption of the Refunded Bonds
shall be irrevocable after the issuance of the Bonds and delivery of the
Acquired Obligations to the Escrow Agent.
The Escrow Agent is hereby authorized and directed to provide for
the giving of notices of the redemption of the Refunded Bonds in
accordance with the applicable provisions of the 2008A Bond Ordinance
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and the District Bond Resolution. The costs of publication of such notices
shall be an expense of the City.
The Escrow Agent is hereby authorized and directed to pay to the
Finance Director, or, at the direction of the Finance Director, to the paying
agent for the Refunded Bonds, sums sufficient to pay, when due, the
payments specified in this Section 7. All such sums shall be paid from the
moneys and Acquired Obligations deposited with the Escrow Agent, and
the income therefrom and proceeds thereof. All such sums so paid to or
to the order of the Finance Director shall be credited to the Refunding
Account (which is hereby authorized to be created) or other funds created
under the Escrow Deposit Agreement. All moneys and Acquired
Obligations deposited with the Escrow Agent and any income therefrom
shall be held, invested (but only at the direction of the Finance Director)
and applied in accordance with the provisions of this ordinance, the
Escrow Deposit Agreement, and with the laws of the State of Washington
for the benefit of the City and owners of the Refunded Bonds.
The City will take such actions as are found necessary to see that all
necessary and proper fees, compensation and expenses of the Escrow
Agent for the Refunded Bonds shall be paid when due.
SECTION 8. - Tax Covenants. The City will take all actions
necessary to assure the exclusion of interest on the Bonds from the gross
income of the owners of the Bonds to the same extent as such interest is
permitted to be excluded from gross income under the Code as in effect
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on the date of issuance of the Bonds, including but not limited to the
following:
(a) Private Activity Bond Limitation. The City will assure that the
proceeds of the Bonds are not so used as to cause the Bonds to satisfy the
private business tests of Section 141(b) of the Code or the private loan
financing test of Section 141(c) of the Code.
(b) Limitations on Disposition of Project. The City will not sell or
otherwise transfer or dispose of (i) any personal property components of
the projects refinanced with proceeds of the Bonds, including the Special
Events Center (together, the “Projects”) other than in the ordinary course
of an established government program under Treasury Regulation 1.141-
2(d)(4) or (ii) any real property components of the Projects, unless it has
received an opinion of Bond Counsel to the effect that such disposition will
not adversely affect the treatment of interest on the Bonds as excludable
from gross income for federal income tax purposes.
(c) Federal Guarantee Prohibition. The City will not take any
action or permit or suffer any action to be taken if the result of such action
would be to cause any of the Bonds to be “federally guaranteed” within
the meaning of Section 149(b) of the Code.
(d) Rebate Requirement. The City will take any and all actions
necessary to assure compliance with Section 148(f) of the Code, relating
to the rebate of excess investment earnings, if any, to the federal
government, to the extent that such section is applicable to the Bonds.
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(e) No Arbitrage. The City will not take, or permit or suffer to be
taken by the Escrow Agent or otherwise, any action with respect to the
proceeds of the Bonds which, if such action had been reasonably expected
to have been taken, or had been deliberately and intentionally taken, on
the date of issuance of the Bonds would have caused the Bonds to be
“arbitrage bonds” within the meaning of Section 148 of the Code.
(f) Registration Covenant. The City will maintain a system for
recording the ownership of each Bond that complies with the provisions of
Section 149 of the Code until all Bonds have been surrendered and
canceled.
(g) Record Retention. The City will retain its records of all
accounting and monitoring it carries out with respect to the Bonds for at
least three years after the Bonds mature or are redeemed (whichever is
earlier); however, if the Bonds are redeemed and refunded, the City will
retain its records of accounting and monitoring at least three years after
the earlier of the maturity or redemption of the obligations that refunded
the Bonds.
(h) Compliance with Federal Tax Certificate. The City will comply
with the provisions of the Federal Tax Certificate with respect to the
Bonds, which are incorporated herein as if fully set forth herein. The
covenants of this Section will survive payment in full or defeasance of the
Bonds.
SECTION 9. - Bond Fund and Provision for Tax Levy Payments.
The City hereby authorizes the creation of one or more accounts in the
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City’s previously established Bond Fund to be used for the payment of
debt service on the Bonds. No later than the date each payment of
principal of or interest on the Bonds becomes due, the City shall transmit
sufficient funds, from the Bond Fund or from other legally available
sources, to the Bond Registrar for the payment of such principal or
interest. Money in the Bond Fund may be invested in legal investments
for City funds, but only to the extent that the same are acquired, valued
and disposed of at Fair Market Value.
The City hereby irrevocably covenants and agrees for as long as any
of the Bonds are outstanding and unpaid that each year it will include in
its budget and levy an ad valorem tax upon all the property within the City
subject to taxation in an amount that will be sufficient, together with Sales
Tax Revenue and Special Events Center Revenues (with respect to the
portion of the Bonds issued to refund and defease the Refunded Sales Tax
Bonds and to pay related costs of issuance and the administrative costs of
the refunding) and all other revenues and money of the City legally
available for such purposes, to pay the principal of and interest on the
Bonds when due.
The City hereby irrevocably pledges that the annual tax provided for
herein to be levied for the payment of such principal and interest shall be
within and as a part of the regular property tax levy permitted to cities
without a vote of the people, and that a sufficient portion of each annual
levy to be levied and collected by the City prior to the full payment of the
principal of and interest on the Bonds will be and is hereby irrevocably set
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aside, pledged and appropriated for the payment of the principal of and
interest on the Bonds. The full faith, credit and resources of the City are
hereby irrevocably pledged for the annual levy and collection of said taxes
and for the prompt payment of the principal of and interest on the Bonds
when due.
The City hereby also irrevocably pledges Sales Tax Revenue and
Special Events Center Revenues received by the City from the District
under the terms of the Financing Agreement to the payment of the
principal of and interest on the portion of the Bonds allocated to defease
and refund the Refunded Sales Tax Bonds and to pay related costs of
issuance and the administrative costs of the refunding.
SECTION 10. - 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
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,
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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 in accordance with Section 12.
SECTION 11. - Sale of Bonds.
(a) Bond Sale. The Bonds shall be sold at negotiated sale to the
Underwriter pursuant to the terms of the Bond Purchase Contract. 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, aggregate principal amount, principal
amounts of each maturity of the Bonds, redemption rights, whether to
issue the Bonds in one or more series, and selection of the Refunded
Bonds.
The Designated Representative is hereby authorized to determine
whether to issue the Bonds in one or more series and to approve the final
interest rates, aggregate principal amount, principal amounts of each
maturity of the Bonds, selection of the Refunded Bonds, and redemption
rights for the Bonds in the manner provided hereafter so long as:
(i) the aggregate principal amount of Bonds issued
pursuant to this ordinance does not exceed $80,000,000,
(ii) the final maturity date for the Bonds is no later than
December 1, 2037,
(iii) each series of Bonds are sold (in the aggregate) at a
price not less than 97% and not greater than 130%,
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(v) any Bonds sold for the purpose of refunding the 2008A
Bonds are sold for a price that results in a minimum aggregate net present
value debt service savings over the Refunded 2008A Bonds of at least
3.00%,
(iv) any Bonds sold for the purpose of refunding the
Refunded Sales Tax Bonds are sold for a price that results in a minimum
aggregate net present value debt service savings over the Refunded Sales
Tax Bonds of at least 3.00%,
(vi) the true interest cost for each series of Bonds (in the
aggregate) does not exceed 4.00%, and
(vii) the Bonds conform to all other terms of this ordinance.
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 applicable series of Bonds approved pursuant to the authority
delegated in this section. The authority granted to the Designated
Representative by this Section 11 shall expire on December 31, 2016. If
the Bonds authorized herein have not been sold by December 31, 2016,
the Bonds shall not be issued nor their sale approved unless such Bonds
shall have been re-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
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the form of an amendatory ordinance approving a bond purchase contract
or establishing terms and conditions for the authority delegated under this
Section 11.
(b) Delivery of Bonds; Documentation. Upon the passage and
approval of this ordinance, the proper officials of the City, including the
Designated Representative, the Finance Director and Chief Administrative
Officer, are authorized and directed to undertake all action necessary for
the prompt execution and delivery of each series of Bonds to the
Underwriter and further to execute all closing certificates and documents
required to effect the closing and delivery of each series of Bonds in
accordance with the terms of this ordinance and the Bond Purchase
Contract. Such documents may include, but are not limited to, documents
related to a municipal bond insurance policy delivered by an insurer to
insure the payment when due of the principal of and interest on the Bonds
as provided therein, if such insurance is determined by the Designated
Representative to be in the best interest of the City.
The Mayor is further authorized to execute the Financing Agreement
with the District in substantially the form attached hereto as Exhibit B and
incorporated herein by this reference, with any such modifications as
determined by the Mayor and Bond Counsel to the City to be necessary to
carry out the purposes of this ordinance, and any other documents and
agreements necessary for the issuance of the Bonds, the operation of the
Special Events Center, and the transfer of Sales Tax Revenue and Special
Events Center Revenues for the purposes set forth herein.
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(c) Preliminary and Final Official Statements. The Finance
Director is hereby authorized to approve and to deem final the preliminary
Official Statement for the purposes of the Rule. The Finance Director is
further authorized to approve for purposes of the Rule, on behalf of the
City, the final Official Statement relating to the issuance and sale of each
series of Bonds and the distribution of the final Official Statement pursuant
thereto with such changes, if any, as may be deemed by him or her to be
appropriate.
SECTION 12. - 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.
(b) Financial Statements/Operating Data. With respect to each
series of Bonds issued pursuant to this ordinance, the City agrees to
provide or cause to be provided to the MSRB the following annual financial
information and operating data for the prior fiscal year (commencing in
2016 for the fiscal year ended December 31, 2015):
1. Annual financial statements, which statements may or
may not be audited, showing ending fund balances for the City’s general
fund prepared in accordance with the Budgeting Accounting and Reporting
System prescribed by the Washington State Auditor pursuant to
RCW 43.09.200 (or any successor statute) and generally of the type
specified in the official statement for the Bonds;
2. The assessed valuation of taxable property in the City;
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3. Ad valorem taxes due and percentage of taxes
collected;
4. Property tax levy rate per $1,000 of assessed
valuation;
5. Outstanding general obligation debt of the City; and
6. So long as the portion of the Bonds allocated to
defease and refund the Refunded Sales Tax Bonds and to pay related costs
of issuance are outstanding, the amount of Sales Tax Revenue and Special
Events Center Revenues received by the City under the Financing
Agreement.
Items 2-6 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 the end of nine months (September 30) after the end of the City’s
fiscal year. The City’s current fiscal year ends on 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 prepared in accordance with the Budgeting
Accounting and Reporting System prescribed by the Washington State
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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 10 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;
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Release, substitution, or sale of property securing repayment
of the Bonds, if material;
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.
(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 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 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 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
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section shall be limited to a right to obtain specific enforcement of the
City’s obligations under this section, and any failure by the City to comply
with the provisions of this undertaking shall not be an event of default
with respect to the Bonds.
SECTION 13. - 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, series, 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 14. - Severability; Ratification. If any one or more
section, subsection, or sentence of this ordinance is held to be
unconstitutional or invalid, such decision shall not affect the validity of the
remaining portion of this ordinance or the Bonds and the same shall
remain in full force and effect. All acts taken pursuant to the authority
granted in this ordinance but prior to its effective date are hereby ratified
and confirmed.
SECTION 15. - Corrections by City Clerk or Code Reviser. Upon
approval of the City Attorney, the City Clerk and the Code Reviser are
authorized to make necessary corrections to this ordinance, including the
correction of clerical errors; ordinance, section or subsection numbers; or
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references to other local, state or federal laws, codes, rules, or
regulations.
SECTION 16. - Effective Date of Ordinance. This ordinance shall
take effect thirty (30) days after its passage as provided by law.
Adopted by the City Council of the City of Kent, Washington, at a
regular meeting thereof held this 19th of April, 2016.
SUZETTE COOKE, MAYOR
ATTEST
RONALD F. MOORE, MMC, CITY CLERK
APPROVED AS TO FORM:
PACIFICA LAW GROUP LLP
Bond Counsel to the City
PASSED: _____ day of ____________________, 2016.
APPROVED: day of , 2016.
PUBLISHED: day of , 2016.
I hereby certify that this is a true copy of Ordinance No. ___
passed by the city council of the city of Kent, Washington, and approved
by the Mayor of the city of Kent as hereon indicated.
(SEAL)
RONALD F. MOORE, CITY CLERK
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Exhibit A
Form of Bond
[DTC LANGUAGE]
UNITED STATES OF AMERICA
NO. $
STATE OF WASHINGTON
CITY OF KENT
LIMITED TAX GENERAL OBLIGATION REFUNDING BOND, 2016
INTEREST RATE: % MATURITY DATE: CUSIP NO.:
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
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, or registered assigns, on the Maturity Date
identified above, the Principal Amount indicated above and to pay interest
thereon from ___________, 20___, or the most recent date to which
interest has been paid or duly provided for until payment of this bond at
the Interest Rate set forth above, payable on ______________, and
semiannually thereafter on the first days of each succeeding _______ and
____. Both principal of and interest on this bond are payable in lawful
money of the United States of America. The fiscal agent 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.
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 Ordinance No. _______ duly passed by the City Council
on April 19, 2016 (the “Bond Ordinance”). Capitalized terms used in this
bond have the meanings given such terms in the Bond Ordinance.
This bond shall not be valid or become obligatory for any purpose or
be entitled to any security or benefit under the Bond Ordinance until the
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Certificate of Authentication hereon shall have been manually signed by or
on behalf of the Bond Registrar or its duly designated agent.
This bond is one of an authorized issue of bonds of like series, date,
tenor, rate of interest and date of maturity, except as to number and
amount in the aggregate principal amount of $__________ and is issued
pursuant to the Bond Ordinance to provide a portion of the funds
necessary [to defease and refund the City’s Limited Tax General Obligation
Bonds, 2008A and the City of Kent Special Events Center Public Facilities
District’s Special Events Center Sales Tax Bonds, 2008], and to pay costs
of issuance.
The bonds of this issue are subject to redemption as provided in the
Bond Ordinance and the Bond Purchase Contract.
The City hereby irrevocably covenants and agrees with the owner of
this bond that it will include in its annual budget and levy taxes annually,
within and as a part of the tax levy permitted to the City without a vote of
the electorate, upon all the property subject to taxation in amounts
sufficient, together with other money legally available therefor, to pay the
principal of and interest on this bond as the same shall become due. The
full faith, credit and resources of the City are hereby irrevocably pledged
for the annual levy and collection of such taxes and the prompt payment
of such principal and interest. [The City hereby also irrevocably pledges
Sales Tax Revenue and Special Events Center Revenues received by the
City from the City of Kent Special Events Center Public Facilities District
(the “District”) under the terms of the Interlocal Financing Agreement
between the City and the District to the payment of the principal of and
interest on the portion of the bonds of this issue allocated to refund and
defease the District’s Special Events Center Sales Tax Bonds, 2008 and to
pay related costs of issuance.]
The bonds of this issue have not been designated by the City as
“qualified tax-exempt obligations” for investment by financial institutions
under Section 265(b) of the Code.
The pledge of tax levies for payment of principal of and interest on
the bonds may be discharged prior to maturity of the bonds by making
provision for the payment thereof on the terms and conditions set forth in
the Bond Ordinance.
It is hereby certified that all acts, conditions and things required by
the Constitution and statutes of the State of Washington to exist 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 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.
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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 ___________, 20___.
[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 Limited Tax General Obligation
Refunding Bonds, 2016 of the City of Kent, Washington, dated
____________, 2016.
WASHINGTON STATE FISCAL
AGENT, as Bond Registrar
By
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Exhibit B
Form of Financing Agreement
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INTERLOCAL FINANCING AGREEMENT
between
CITY OF KENT, WASHINGTON
and
THE CITY OF KENT SPECIAL EVENTS CENTER PUBLIC FACILITIES DISTRICT
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INTERLOCAL FINANCING AGREEMENT
THIS INTERLOCAL FINANCING AGREEMENT (this “Agreement”) dated
________________ 2016, entered into by and between the CITY OF KENT, a municipal
corporation of the State of Washington (the “City”), and THE CITY OF KENT SPECIAL
EVENTS CENTER PUBLIC FACILITIES DISTRICT, a municipal corporation of the State of
Washington (the “District”);
WITNESSETH:
WHEREAS, the City is authorized by chapter 67.28 RCW to acquire and operate
“tourism-related facilities;” and
WHEREAS, the District is authorized by chapter 35.57 RCW to acquire, construct, own,
remodel, maintain, equip, repair, finance, and operate one or more “regional centers” as defined
in RCW 35.57.020, including related parking facilities, serving a regional population; and
WHEREAS, the City and the District previously entered into an Interlocal Agreement for
Development of Special Events Center dated September 14, 2007, as amended (the “Interlocal
Agreement”), in connection with the design, development, construction, ownership, and
operation of a regional center comprised of a multi-purpose arena for hockey and other public
uses, together with related parking facilities, as such facilities may be expanded from time to
time, located in the City and constituting a “regional center” within the meaning of chapter 35.57
RCW, as it may be amended from time to time (as further defined herein, the “Special Events
Center”); and
WHEREAS, under the Interlocal Agreement, the District agreed to promptly pay, or
cause to be paid, all funds collected by or on behalf of the District from revenues of a sales and
use tax imposed by the District pursuant to Resolution No. 2007-1 adopted by the Board of
Directors of the District (the “Board”) on September 14, 2007, as amended, and authorized by
RCW 35.57040(1)(d) and RCW 82.14.390 (the “Sales Tax”), and other funds pledged therefor,
to the City as intergovernmental project payments for the purposes set forth in the Interlocal
Agreement, which may include paying debt service on bonds issued by the City to pay costs of
the design and construction of the Special Events Center; and
WHEREAS, construction of the Special Events Center was financed, in part, with
proceeds of the District’s Special Events Center Sales Tax Bonds, 2008 (the “Sales Tax Bonds”)
issued on February 29, 2008, pursuant to Resolution No. 2008-2 adopted by the Board on
February 20, 2008 (the “Sales Tax Bond Resolution”); and
WHEREAS, the principal of and interest on the Sales Tax Bonds are payable from
revenues of the Sales Tax (“Sales Tax Revenue”), Special Events Center Revenues (as defined
herein), and amounts loaned to the District by the City under the terms of the Contingent Loan
and Support Agreement dated February 20, 2008, between the City and the District (the
“Contingent Loan Agreement”); and
WHEREAS, pursuant to the terms of the Contingent Loan Agreement, the City has
loaned the District funds to pay the majority of the debt service due on the Sales Tax Bonds and
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the Revenue Bonds (as defined herein) for years 2009 through 2015, inclusive, and the City
expects that it will continue to be required to make loans to the District to pay some portion of
the debt service due on the Sales Tax Bonds and the Revenue Bonds in the future; and
WHEREAS, pursuant to an ordinance adopted by the City Council on April 19, 2016 (the
“2016 Bond Ordinance”), the City has determined to issue its Limited Tax General Obligation
Refunding Bonds, 2016 (the “2016 Bonds”) and to loan a portion of the proceeds thereof to the
District for the purpose of providing funds to be used by the District and the City to refund,
defease, pay and redeem all of the District’s outstanding Sales Tax Bonds on their first optional
redemption date of June 1, 2018, in order to realize a savings in interest costs that otherwise
would be incurred with respect to the Sales Tax Bonds, and to pay related costs of issuance of
that portion of the bonds and the administrative costs of the refunding (the portion of the 2016
Bonds allocated for such purpose is referred to herein as the “2016 Sales Tax Refunding
Bonds”); and
WHEREAS, debt service on the 2016 Sales Tax Refunding Bonds will be payable by the
City from Sales Tax Revenue and Special Events Center Revenues, and to the extent required,
City Advances pursuant to the terms of this Agreement; and
WHEREAS, the City and the District now desire to enter into this Agreement to
memorialize the obligation of the District, as evidenced by the District Bond (defined below), to
pay Sales Tax Revenue and Special Events Center Revenues to the City for the purposes of
enabling the City to pay debt service on the 2016 Sales Tax Refunding Bonds, and for the
District’s repayment to the City of City Contingent Loan Payments made by the City to the
District pursuant to the Contingent Loan Agreement and any City Advances by the City to the
District pursuant to this Agreement, and the pledge of Sales Tax Revenue and Special Events
Center Revenues for such purposes; and
WHEREAS, for purposes of RCW 35.57.020(4) and RCW 82.14.390(4), the District’s
obligation to pay the amounts due under this Agreement will be evidenced by a bond issued by
the District in favor of the City (as further defined herein, the “District Bond”);
NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained; the
parties agree as follows.
Section 1. Definitions. Unless the context clearly requires otherwise, capitalized
terms used in this Agreement have the meanings given such terms in the recitals hereof and in
the 2016 Bond Ordinance. The following terms shall have the following meanings:
“Additional Revenue Bonds” shall have the meaning set forth in the Contingent Loan
Agreement.
“City” means the City of Kent, Washington.
“City Advance” has the meaning set forth in Section 4(c) of this Agreement.
“City Contingent Loan Payments” means any loan payments made by the City to the
District for Required Debt Service pursuant to the Contingent Loan Agreement that are derived
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from City funds other than Special Events Center Revenues.
“City Special Events Center Payments” means all payments required to be made by the
City to the District for the First through Fourth purposes listed in Section 4.2 of the Contingent
Loan Agreement and Section 6(b) of this Agreement that are derived from and represent Special
Events Center Revenues.
“Contingent Loan Agreement” means the Contingent Loan and Support Agreement
Regarding Financing for the Kent Special Events Center between the City and the District dated
February 20, 2008, as it may be amended from time to time.
“District” means the City of Kent Special Events Center Public Facilities District,
established by the City under chapter 35.57 RCW.
“District Bond” means the bond issued by the District solely for purposes of
RCW 35.57.020(4) and RCW 82.14.390(4).to evidence its payment obligations to the City under
the terms of this Agreement (a) to pay debt service on the 2016 Sales Tax Refunding Bonds as
the same shall come due on their scheduled maturity dates, mandatory installment redemption
dates or redemption dates, (b) to repay City Contingent Loan Payments, and (c) to repay any City
Advances to the District under this Agreement, consistent with Section 6 of this Agreement
“Interlocal Agreement” means the Interlocal Agreement for Development of the Special
Events Center between the District and the City, dated September 14, 2007, as it may be
amended from time to time.
“License Agreement” means the License Agreement dated August 7, 2007 between the
City and the Team, as it may be amended from time to time.
“Operation and Maintenance Expenses” means all reasonable expenses incurred in
causing the Special Events Center to be operated and maintained in good repair, working order
and condition, including without limitation: management fees or other payments to third parties
payable in respect of the operation of the Special Events Center; personnel costs; the cost of
ordinary maintenance and repair; utilities; supplies; food and beverage service and supply costs;
equipment purchase and lease payments; administrative expenses, including administrative
expenses of the District; the costs of advertising, marketing and business promotion; deposits,
premiums, assessments or other payments for insurance; and taxes and assessments; all as
determined in accordance with generally accepted accounting principles applicable to the City
and its operations. The term “Operation and Maintenance Expenses” does not include any
depreciation of or capital expenditure for the Special Events Center.
“Required Debt Service” means, for any calendar year, with respect to the Revenue
Bonds, any Additional Revenue Bonds, and the Sales Tax Bonds, the amount required to make
scheduled payment of principal of (including mandatory redemption payments with respect to
Term Bonds) and interest on such bonds in that calendar year.
“Revenue Bond Debt Service Fund” has the meaning set forth in the Contingent Loan
Agreement.
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“Revenue Bond Insurance Policy” has the meaning set forth in the Contingent Loan
Agreement.
“Revenue Bond Insurer” has the meaning set forth in the Contingent Loan Agreement.
“Revenue Bonds” mean the District’s Special Events Center Revenue Bonds, 2008
(Taxable), issued in the original principal amount of $10,130,000 pursuant to Resolution
No. 2008-3 adopted by the Board on February 20, 2008 and maturing on December 1, 2020.
“Sales Tax” means the sales and use taxes imposed by the District pursuant to Resolution
No. 2007-1 adopted by the Board on September 14, 2007 and authorized by
RCW 35.57.040(1)(d) and RCW 82.14.390 at the rate of 0.037% of the selling price (in the case
of a sales tax) or the value of the article used (in the case of a use tax).
“Sales Tax Bond Resolution” means Resolution No. 2008-2 adopted by the Board on
February 20, 2008 authorizing the issuance of the Sales Tax Bonds.
“Sales Tax Bonds” mean the District’s Special Events Center Sales Tax Bonds, 2008,
issued on December 20, 2007 pursuant to the Sales Tax Bond Resolution.
“Sales Tax Revenue” means all the money received by the District from the Washington
State Department of Revenue on account of the Sales Tax imposed by and collected for the
District.
“Special Events Center” means the land, real property improvements, buildings, facilities,
fixtures, equipment, support facilities and related parking facilities comprising a special events
center of approximately 153,000 square feet, including an ice arena, as such facilities may be
expanded from time to time, located in the City and constituting a “regional center” within the
meaning of chapter 35.57 RCW, as it may be amended from time to time.
“Special Events Center Revenues” means all revenue, earnings and money received by
the City from or on account of the operation and/or ownership of the Special Events Center,
including but not limited to license fees received by the Team pursuant to the License
Agreement, facility fees, concession revenues, advertising revenues, suite license revenues, club
seat revenues, parking revenues and naming rights revenues.
“State” means the State of Washington.
“Team” means Thunderbird Hockey Enterprises, LLC, or its successor.
“2016 Bond Ordinance” means Ordinance No. __________ passed by the City Council
on April 19, 2016 authorizing the issuance of the 2016 Bonds.
“2016 Bonds” means the City’s Limited Tax General Obligation Refunding Bonds, 2016
issued in the aggregate principal amount of $____________ pursuant to the 2016 Bond
Ordinance.
“2016 Sales Tax Refunding Bonds” means the portion of the 2016 Bonds allocated to and
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issued for the purpose of refunding, defeasing, paying and redeeming the Sales Tax Bonds and
paying costs of issuance and the administrative costs of the refunding, and any bonds issued to
refund and/or defease the allocable portion of such 2016 Bonds.
Section 2. Joint Development of the Special Events Center. The City and the District
have developed and will operate the Special Events Center in accordance with this Agreement
and the Interlocal Agreement, as both a “tourism related facility” within the meaning of
RCW 67.28.080(7) and a “regional center” within the meaning of RCW 35.57.020. The Special
Events Center is intended to serve the City, the District and their residents, as well as serving a
broader population in the region and the State.
Section 3. Special Events Center Operations. Pursuant to the Interlocal Agreement,
the Contingent Loan Agreement and this Agreement, the City shall directly or through third
parties, manage and operate the Special Events Center and make all decisions relative to the
management and operation of the Special Events Center. The City shall own and operate the
Special Events Center for and on behalf of the District and the City. The District’s interest in the
Special Events Center shall terminate and revert to the City upon the retirement, redemption or
defeasance of all bonds issued to finance or refinance the Special Events Center, the final
distribution to the District of Sales Tax Revenue, the termination of the District’s obligation to
make project payments to the City, or when mutually agreed between the District and the City
consistent with applicable law. The District’s ownership interests in the Special Events Center
also shall be transferred to the City if the District ceases to exist; provided that any District
obligations with respect to the Special Events Center shall have been retired or fully provided
for, or, if not, that the City shall assume all remaining obligations of the District. The City, on
behalf of the District and itself, will: (a) be the agency with the primary responsibility for the
operation of the Special Events Center as both a “tourism-related facility” within the meaning of
RCW 67.28.080(7) and a “regional center” within the meaning of RCW 35.57.020; (b) refinance,
operate and maintain the Special Events Center; and (c) otherwise administer the operation of the
Special Events Center for the benefit of itself and the Special Events Center and in cooperation
with the District.
Section 4. Repayment of 2016 Sales Tax Refunding Bonds, Loans and Advances.
(a) Loans to the District pursuant to the Contingent Loan Agreement. Pursuant to
Section 3 of the Contingent Loan Agreement, in the event that the District has been or is unable
to timely provide for Required Debt Service, the City agreed to lend the District the amount
necessary to make such timely payment (“City Contingent Loan Payments”). The District agreed
to borrow the amounts described therein from the City pursuant to the Contingent Loan
Agreement and to apply those amounts immediately for the purpose of paying Required Debt
Service. As of the date of this Agreement, the City has made City Contingent Loan Payments to
the District in the amount of $____________ to pay Required Debt Service.
The District shall repay to the City the principal amount or amounts of City Contingent
Loan Payments made to the District made pursuant to Section 3 of the Contingent Loan
Agreement as revenues for that purpose become available consistent with Section 6 below, and
the outstanding principal amount of any such City Contingent Loan Payments shall bear interest
at a rate set by the City’s Finance Director on the date a loan is made, based on the then-current
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yield of the City’s pooled investments. The rate of interest on the outstanding principal amount
of any City Contingent Loan Payments shall be revised each year during the City’s budget
process based on the then-current yield of the City’s pooled investments, and effective on the
same date that the City’s interfund loan interest rate is adjusted for all City interfund loans.
(b) 2016 Sales Tax Refunding Bonds. The City hereby agrees to lend the District the
principal sum of $____________, derived solely from the proceeds of the 2016 Sales Tax
Refunding Bonds, and the District hereby borrows said sum from the City pursuant to this
Agreement for the purpose of refunding, defeasing, paying and redeeming the Sales Tax Bonds
on June 1, 2018, the earliest optional redemption date for the Sales Tax Bonds, and paying costs
of issuance of the 2016 Sales Tax Refunding Bonds and the administrative costs of the
refunding. Pursuant to the Interlocal Agreement and this Agreement, the District agrees, in
satisfaction of the District Bond, to remit all Sales Tax Revenue and City Special Events Center
Payments which are received by and available to the District to the City for the purpose of
enabling the City to pay the principal of and interest on the 2016 Sales Tax Refunding Bonds as
the same shall come due on their scheduled maturity dates or earlier mandatory installment
redemption dates, in accordance with the terms of the 2016 Bond Ordinance, consistent with
Section 6 below.
(c) City Advances. If Sales Tax Revenue and City Special Events Center Payments
collected by or on behalf of the District and allocated consistent with Section 6 below are at any
time insufficient to provide for the payment of principal of and interest on the 2016 Sales Tax
Refunding Bonds, the City shall provide for that deficiency from other available City revenues (a
“City Advance”), and the amount of the City Advance shall be deemed an additional loan by the
City to the District. The District shall repay any City Advances from available Sales Tax
Revenue and City Special Events Center Payments, consistent with Section 6 below. The
outstanding principal amount of any City Advance shall bear interest at the same rate that applies
to City Contingent Loan Payments made pursuant to the Contingent Loan Agreement as
described in Section 4(a) above.
Section 5. District Payments; Issuance of District Bond. The District agrees to pay,
or cause to be paid, all Sales Tax Revenue and City Special Events Center Payments that are
received by and available to the District to the City for application by the City (a) to pay debt
service on the 2016 Sales Tax Refunding Bonds as the same shall come due on their scheduled
maturity dates, mandatory installment redemption dates or redemption dates, (b) to repay City
Contingent Loan Payments, and (c) to repay City Advances to the District under this Agreement,
consistent with Section 6 below.
The obligation of the District to make the payments to the City solely from the sources
identified herein and to perform and observe the other obligations on its part contained herein
shall be absolute and unconditional and shall not be subject to diminution by setoff,
counterclaim, abatement or otherwise.
Solely purposes of RCW 35.57.020(4) and RCW 82.14.390(4), the District’s payment
obligations to the City under this Agreement shall be evidenced by a bond (the “District Bond”).
The District Bond shall be payable from and secured solely by Sales Tax Revenue and Special
Events Center Revenues received by and available to be used by or on behalf of the District for
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that purpose under this Agreement. Any failure or inability of the District to meet its payment
obligations to the City under this Agreement with respect to the 2016 Sales Tax Refunding
Bonds as a result of any deficiency in receipts of Sales Tax Revenue and/or Special Events
Center Revenues required for that purpose shall not constitute a default by the District under the
District Bond or this Agreement, provided that the amount of principal of and interest of any
such deficiency shall be deemed to be a City Advance in a principal amount equal to the total
amount of the deficiency, bearing interest as set forth in Section 4(c), above, and to be repaid to
the City from the sources and in the priority as provided by Section 6(a) and Section 6(b) of this
Agreement.
The District Bond shall be nontransferable. The District Bond shall be executed and
delivered by the District to the City, at a price of par, upon the effective date of this Agreement.
The District Bond shall be payable in the amounts and on the dates as described in the payment
schedules attached to the District Bond, which may be modified, added to, or replaced from time
to time to reflect any payments made by the District to the City under this Agreement, or to
include any additional City Advance. In no event, however, shall the principal amount of the
District Bond cause the District to exceed its debt capacity for nonvoter-approved general
obligation indebtedness as specified by RCW 35.57.030(1).
The District shall inform the City immediately if the District fails to make any such
deposit in full, and the District shall also inform the City at any time that the District determines
that there is a reasonable possibility that the District may not be able to timely and fully provide
for a debt service payment on such obligations when due.
Section 6. Priority of Payment from District Revenues (“Flow of Funds”).
(a) Sales Tax Revenue. Consistent with the Contingent Loan Agreement and the
Interlocal Agreement, all Sales Tax Revenue shall be transferred to and deposited into the Sales
Tax Revenue Fund when and as received by the District or by the Finance Director of the City,
as ex officio Treasurer of the District. Sales Tax Revenue deposited into the Sales Tax Revenue
Fund shall be allocated and applied in the priority set forth below, and the following “flow of
funds” for those revenues shall supplement and supersede the provisions of Section 4.1 of the
Contingent Loan Agreement to the extent of any inconsistency:
First, payment of principal of and interest on the 2016 Sales Tax Refunding Bonds;
Second, repayment of principal of and interest on City Contingent Loan Payments due
under the Contingent Loan Agreement and Section 4(a) of this Agreement;
Third, repayment of principal of and interest on any City Advances under Section 4(c) of
this Agreement; and
Fourth, to provide for costs of and reserves for long-term capital repairs, renewals and
replacements of the Special Events Center, and for other lawful purposes, in no particular order
of preference and all as determined by the City in consultation with the District.
(b) Special Events Center Revenues. Consistent with the Contingent Loan Agreement
and the Interlocal Agreement, the City for itself and on behalf of the District shall collect Special
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Events Center Revenues and shall transfer City Special Events Center Payments to the District
for deposit into the District Revenue Fund. Special Events Center Revenues deposited into the
District Revenue Fund shall be allocated and applied in the priority set forth below, and the
following “flow of funds” for those revenues shall supplement and supersede the provisions of
Section 4.2 of the Contingent Loan Agreement to the extent of any inconsistency:
First, to make the required deposits to the Revenue Bond Debt Service Fund for the
payment of interest due on the Revenue Bonds and any Additional Revenue Bonds;
Second, to make the required deposits into the Revenue Bond Debt Service Fund for the
payment of principal of the Revenue Bonds and any Additional Revenue Bonds at maturity or
upon mandatory sinking fund redemption prior to scheduled maturity;
Third, to reimburse any Revenue Bond Insurer for any payments made under any
Revenue Bond Insurance Policy and other amounts due and owing to any Revenue Bond Insurer
in respect of the Revenue Bonds and any Additional Revenue Bonds;
Fourth, to repay principal of and interest on any City Contingent Loan Payments made
by the City to the District as provided in Section 3.3 of the Contingent Loan Agreement and
Section 4(a) of this Agreement, and, after taking into account Sales Tax Revenue available to the
District for the payment of principal of and interest on the 2016 Sales Tax Refunding Bonds, to
pay principal of and interest on the 2016 Sales Tax Refunding Bonds; and
Fifth, to provide for costs of and reserves for long-term capital repairs, renewals and
replacement of the Special Events Center, and for other lawful purposes, in no particular order of
preference and all as determined by the City in consultation with the District.
The District and the City shall exercise due regard for the anticipated financial
requirements to be satisfied as priorities First through Fourth of this Section 6(b) in each
calendar year prior to authorizing or making any disbursement of money in the Special Events
Center Revenue Fund for the purposes identified as priority Fifth.
Any amounts received by the City or the District as governmental grants or private
contributions for the Special Events Center shall be deposited in a special capital account in the
Public Facilities District Special Events Center Revenue Fund and be used for the construction,
renewal and replacement of facilities comprising the Special Events Center, unless another use is
required by the terms of any such governmental grant or private contribution.
Section 7. Pledge of Funds. The full faith and credit of the District is hereby pledged
for payment of the District’s obligations under this Agreement, as evidenced by the District
Bond, specifically including the District’s obligation to pay Sales Tax Revenue and City Special
Events Center Payments to the City for application by the City (a) to pay debt service on the
2016 Sales Tax Refunding Bonds, (b) to repay City Contingent Loan Payments, and (c) to repay
any City Advances. Sales Tax Revenue and City Special Events Center Payments are hereby
pledged to the City and for the equal and ratable benefit of the owners from time to time of the
2016 Sales Tax Refunding Bonds, for payment of the principal of and interest on the 2016 Sales
Tax Refunding Bonds, and to the City for payment of principal of and interest on City
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Contingent Loan Payments and any City Advances to the District under the Agreement, subject
to the priorities set forth in Section 6 hereof.
The District’s obligation to impose the sales tax under RCW 82.14.390 and to distribute
Sales Tax Revenue and City Special Events Center Payments under this Agreement and the
District Bond shall be absolute and unconditional, and shall not be subject to diminution by
setoff, counterclaim, abatement or otherwise. Except to the extent that the District’s legal
authority to impose and collect the Sales Tax expires pursuant to RCW 82.14.390, as amended,
or any applicable successor statute, the District’s obligations under this Agreement shall continue
in effect and shall survive until the full repayment, defeasance, or early redemption of (a) the
2016 Sales Tax Refunding Bonds, (b) City Contingent Loan Payments, and (c) any City
Advances, together with any costs owed to the City hereunder.
Section 8. Remittance of Sales Tax Revenue. The District shall remit, or enter into an
agreement with the State Department of Revenue to directly remit, all Sales Tax Revenue to the
City when received for deposit into the Sales Tax Revenue Fund to be used in the order of
priority as set forth in Section 6.
Section 9. District Acknowledgments. The District acknowledges and agrees that its
pledge of Sales Tax Revenue and City Special Events Center Payments pursuant to the terms of
this Agreement to the City for the payment of the 2016 Sales Tax Refunding Bonds will be
material to the offer and sale of the 2016 Sales Tax Refunding Bonds, and will be disclosed to
potential purchasers and purchasers of the 2016 Sales Tax Refunding Bonds. The City and the
District consider this Agreement to be a binding contract and acknowledge that 2016 Sales Tax
Refunding Bond owners and financial institutions providing credit support for the 2016 Sales
Tax Refunding Bonds, if any, will rely on the terms of this Agreement, including the
commitment by the District to remit Sales Tax Revenue and City Special Events Center
Payments to the City as set forth in Section 6.
Section 10. Imposition of Sales Tax. The District hereby irrevocably covenants, for as
long as any of the 2016 Sales Tax Refunding Bonds are outstanding or any amounts remain due
and owing to the City hereunder and under the District Bond, including City Contingent Loan
Payments or any City Advances, that each year it will continue to impose the sales tax at the rate
of not less than 0.037 percent of the selling price (in the case of a sales tax) or value of the article
used (in the case of a use tax) and apply Sales Tax Revenue as provided in this Agreement;
provided however, this covenant shall not extend beyond the maximum period of time the Sales
Tax may be imposed under RCW 82.14.390; provided further, this covenant shall automatically
be extended to reflect any amendments to such statute to extend the maximum period of time
such tax may be imposed.
Section 11. City Event Center Payments; Operation of the Special Events Center.
(a) City Events Center Payments. For so long as any Revenue Bonds, Additional
Revenue Bonds, 2016 Sales Tax Refunding Bonds, City Contingent Loan Payments, or City
Advances remain outstanding, the City for itself and on behalf of the District shall collect Special
Events Center Revenues and shall transfer City Special Events Center Payments to the District
for deposit into the District Revenue Fund sufficient to pay the First through Fourth purposes
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listed in Section 6 of this Agreement. The City Special Events Center Payments shall have
priority over other uses of Special Events Center Revenues, including but not limited to for the
payment of Operation and Maintenance Expenses.
(b) Operation and Maintenance of Special Events Center. For so long as any
Revenue Bonds, Additional Revenue Bonds, 2016 Sales Tax Refunding Bonds, City Contingent
Loan Payments, or City Advances are outstanding, the City, for itself and on behalf of the
District, shall take all actions necessary to: (i) operate or cause the Special Events Center to be
operated properly as a “regional center” (as that term is defined in RCW 35.57) and a “tourism-
related facility” (as that term is defined in chapter 67.28 RCW) in a sound and economical
manner consistent with commercially reasonable industry practices and standards for facilities
similar to the Special Events Center and in accordance with the License Agreement, (ii) maintain
or cause the Special Events Center to be maintained in compliance with all applicable legal
requirements and promptly remedy (or contest in good faith) any violations thereof, and (iii)
maintain, preserve and keep the Special Events Center, or cause the Special Events Center to be
maintained, preserved and kept, with the appurtenances and every part and parcel thereof, in
lawful order and in good repair, working order and condition, from time to time to make or,
cause to be made, all necessary and proper repairs, replacements and renewals so that at all times
the operation thereof may be properly and advantageously conducted, and not commit or suffer
any unreasonable waste with respect thereto.
(c) Payment of Operation and Maintenance Expenses. The City shall pay or cause to
be paid all Operation and Maintenance Expenses from Special Events Center Revenues and other
City money legally available therefor.
(d) District Not Responsible for Operation and Maintenance of the Special Events
Center. It is understood that the District shall have no responsibility for the operation or
maintenance of the Special Events Center or for the acts of the City, its employees, agent, users
of the Special Events Center or its or their officers, directors, managers, members or
shareholders, or any party acting by, through or on behalf of any such parties. The District shall
not be responsible for payment of Operation and Maintenance Expenses. As of the date of this
agreement and at any time that Revenue Bonds are insured by the Revenue Bond Insurer, the
District does not and shall not conduct any management operations or own any property.
(e) Fees, Rates and Charges for Use of Special Events Center. Subject to the terms of
the License Agreement, the City for itself and on behalf of the District shall cause fees, rates and
charges to be fixed, maintained and collected for the use of the services and facilities and all
commodities sold, furnished or supplied by or through the Special Events Center, which fees,
rates and charges shall be adjusted from time to time as necessary, so that (i) such fees, rates and
charges will be at optimal levels to produce total Special Events Center Revenues that will at all
times be at least sufficient to enable the City to make City Special Events Center Payments to the
District in the amounts required, together with Sales Tax Revenue, for the District to meet
Required Debt Service, as and when the same shall become due and payable, and to make all
other payments which the District is required to make pursuant to the bond resolution authorizing
the issuance of the Revenue Bonds, to make any payments required to be made on account of the
Revenue Bonds as and when the same shall become due and payable, and to make any payments
required to be made on account of the 2016 Sales Tax Refunding Bonds and under this
Agreement as and when the same shall become due and payable.
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(f) Insurance. The City shall acquire and maintain insurance in form and amounts
consistent with the coverage of comparable special events center facilities and undertakings
related to said facilities as contemplated by the Interlocal Agreement and shall name the District
as an additional named insured for at least so long as any Revenue Bonds, Additional Revenue
Bonds, 2016 Sales Tax Refunding Bonds, City Contingent Loan Payments, or City Advances
remain outstanding. Such insurance may, without limitation, including self-insurance and/or pool
insurance.
(g) Sale, Transfer or Disposition of the Special Events Center. Neither the City nor
the District will sell, transfer or otherwise dispose of (each such sale, transfer or other disposition
a “transfer”) any interest in the real or personal properties, facilities or other part of the Special
Events Center that are owned by it, except for a transfer by the City to the District, unless the
conditions of paragraph (1) are satisfied and the transfer is consistent with one or more of the
subparagraphs of paragraph (2), as follows:
(1) The transfer (other than a transfer to the District):
(A) is carried out in a bonafide, arm’s-length transaction,
(B) the City or the District, as applicable, receives from the transferee
consideration equal to the fair market value of the portion of the Special Events
Center transferred, for which purpose “fair market value” means the most
probable price that a property should bring in a competitive and open market
under all conditions requisite to a fair sale, the willing buyer and willing seller
each acting prudently and knowledgeably and
(C) the transfer is approved by ordinance of the City or by resolution
of the District, as applicable; and
(2) The City or the District in its discretion may carry out a transfer of
facilities or property owned by it that is consistent with one or more of the following:
(A) the facilities or property to be transferred are not material to the
operation of the Special Events Center, or shall have become unserviceable,
inadequate, obsolete or unfit to be used in the operation of the Special Events
Center or are no longer necessary, material or useful to the operation of the
Special Events Center; or
(B) the Special Events Center Revenues received from the operation of
those facilities or property to be transferred during the twelve full calendar
months before the transfer was less than 10% of total Special Events Center
Revenues received during that same period.
The proceeds of any transfer shall be used (i) to promptly redeem, or irrevocably set aside for the
redemption of, first, the Revenue Bonds, second, the 2016 Sales Tax Refunding Bonds, City
Contingent Loan Payments, and any City Advances, in the order determined by the City, and/or
(ii) to provide for all or part of the cost of capital improvements and/or additions to or
expansions of the Special Events Center and/or for other regional center or tourism-related
facilities authorized under chapters 35.57 and 67.28 RCW, as directed by the City.
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Section 12. Covenants of the District.
(a) Dissolution. The District hereby covenants, for so long as any of the Revenue
Bonds or the 2016 Sales Tax Refunding Bonds are outstanding, or any amounts remain due and
owing to the City hereunder, including City Contingent Loan Payments and all City Advances,
that it will not voluntarily commence proceedings under Washington law to dissolve the District.
(b) Reporting Requirements. The District shall provide the City (at the notice address
set forth in this Agreement) with a quarterly report summarizing actual financial activity and
financial expectations for the following four quarters.
(c) Restriction on Issuance of Additional Debt. So long as the City is not in default of
its obligations under this Agreement, the District shall not (1) issue any bonds or other
obligations payable from the Sales Tax without the City’s prior written approval; or (2) borrow
money or incur any obligations, without the City’s prior written approval.
(d) Preservation of Tax Exemption for Interest on the 2016 Sales Tax Refunding
Bonds. The District hereby agrees that it will take all actions necessary to prevent interest on the
2016 Sales Tax Refunding Bonds from being included in gross income for federal tax purposes,
and it will neither take any action nor make or permit any use of the Special Events Center at any
time while the 2016 Sales Tax Refunding Bonds are outstanding which will cause interest on the
2016 Sales Tax Refunding Bonds to be included in gross income for federal income tax
purposes.
Section 13. Remedies of City on Default. Upon the occurrence of a default by the
District in its obligations hereunder, the City may proceed to protect and enforce its rights in
equity or at law, either in mandamus or for the specific performance of any covenant or
agreement contained herein, or for the enforcement of any other appropriate legal or equitable
remedy, as the City may deem most effectual to protect and enforce any of its rights or interests
hereunder.
Section 14. Remedies of District on Default. Upon the occurrence of a default by the
City in its obligations hereunder, the District may proceed to protect and enforce its rights in
equity or at law, either in mandamus or for the specific performance of any covenant or
agreement contained herein, or for the enforcement of any other appropriate legal or equitable
remedy, as the District may deem most effectual to protect and enforce any of its rights or
interests hereunder.
Section 15. No Remedy Exclusive. No remedy conferred upon or reserved to either
party by this Agreement is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative. Either party shall be free to pursue, at the
same time, each and every remedy, at law or in equity, which it may have under this Agreement,
or otherwise.
Section 16. No Implied Waiver. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised from time to time and as often as
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may be deemed expedient. For the exercise of any remedy, it shall not be necessary to give any
notice, other than such notice as may be expressly required herein.
Section 17. Agreement to Pay Attorneys’ Fees and Expenses. If a default arises under
any of the provisions of this Agreement and either party hereto should employ attorneys or incur
other expenses for the collection of amounts due under this Agreement or the enforcement of
performance or observance of any obligation or agreement on the part of the other party
contained in this Agreement, on demand therefor, the nonprevailing party shall pay or reimburse
the prevailing party for the reasonable fees of such attorneys and such other expenses so
incurred.
Section 18. Continuing Disclosure.
(a) Annual Financial Information To Be Provided. To meet the conditions of
paragraph (b)(5) of United States Securities and Exchange Commission Rule 15c2-12 (the
“Rule”), as applicable to a participating underwriter for the 2016 Sales Tax Refunding Bonds,
the District shall undertake for the benefit of holders of the 2016 Sales Tax Refunding Bonds to
provide, or cause to be provided, annual financial information as provided in a continuing
disclosure certificate (“Continuing Disclosure Certificate”) executed by the District in
connection with the issuance of the 2016 Sales Tax Refunding Bonds.
(b) Agreement To Assist District’s Undertaking. The City agrees to submit copies of
the District’s annual financial information, as and when required of the District under the
Continuing Disclosure Certificate. The District hereby authorizes and directs the City to make
such filings on its behalf.
Section 19. Initial Disclosure. The District Agrees to assist the City in preparation of
information about or pertaining to the District for inclusion in a primary offering document to be
prepared in connection with the issuance and sale of the City’s 2016 Bonds.
Section 20. Interlocal Cooperation Act Provisions. The parties acknowledge that:
(i) they have entered into this Agreement pursuant to the express authority granted to them by
chapter 35.57 RCW and RCW 67.28.130; (ii) pursuant to RCW 39.34.100, the powers and
authority conferred by the Interlocal Cooperation Act (chapter 39.34 RCW) are supplemental to
powers or authority conferred by RCW 67.28.130 and chapter 35.57 RCW; and (iii) nothing
contained in the Interlocal Cooperation Act limits the power or authority of either party to
contract pursuant to RCW 67.28.130 and chapter 35.57 RCW. To avail themselves of the
supplemental powers and authority granted by the Interlocal Cooperation Act, the parties agree
that:
(a) No separate legal or administrative entity within the meaning of
RCW 39.34.030(3)(b) or “joint board” within the meaning of RCW 39.34.030(4)(a) is created by
this Agreement;
(b) The Mayor is appointed as the “administrator” within the meaning of
RCW 39.34.030(4)(a) responsible for administering the City’s rights and duties set forth in this
Agreement, and the District’s Chair is appointed as the “administrator” within the meaning of
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RCW 39.34.030(4)(a) responsible for administering the District’s rights and duties set forth in
this Agreement;
(c) The City and the District will file or post this Agreement as required by
RCW 39.34.040.
Nothing set forth in this Agreement is intended to limit the rights and duties of the parties
relating to the Special Events Center that are established through other contracts between the
parties.
Section 21. Governing Law: Venue. This Agreement is governed by and shall be
construed in accordance with the substantive laws of the State of Washington and shall be
liberally construed so as to carry out the purposes hereof. Except as otherwise required by
applicable law, any action under this Agreement shall be brought in the Superior Court of the
State of Washington in and for King County.
Section 22. Notices. Except as otherwise provided herein, all notices, consents or
other communications required hereunder shall be in writing and shall be sufficiently given if
addressed and hand delivered or mailed by first-class mail, as follows:
To the City: City of Kent
220 Fourth Avenue South
Kent WA 98032
Attention : Finance Director
To the District City of Kent Special Events Center PFD
220 Fourth Avenue South
Kent WA 98032
Attention : Treasurer
The City or the District may, by notice given hereunder, designate any further or different
addresses to which subsequent notices, certificates, requests or other communications shall be
sent. Notices shall be deemed served upon deposit of such notices in the United States mail in the
manner provided above.
Section 23. Binding Effect. This Agreement shall inure to the benefit of and shall be
binding upon the City and the District and their successors. This Agreement may not be
assigned.
Section 24. Severability. In the event any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate
or render unenforceable any other provision hereof.
Section 25. Amendments. This Agreement may be amended in writing by the City and
the District (or their successors in title).
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Section 26. Third Party Rights. The terms of this Agreement are not intended to
establish nor to create any rights in any persons or entities other than the City, the District and
the respective successors and assigns of each.
Section 27. Time of Essence. Time and all terms and conditions shall be of the essence
in this Agreement.
Section 28. Effective Date of and Termination of Agreement. This Agreement shall
become effective on the date of issuance of the 2016 Sales Tax Refunding Bonds. This
Agreement shall terminate upon payment in full of all principal of and interest on the 2016 Sales
Tax Refunding Bonds, and any amounts due and owing to the City hereunder, including the City
Contingent Loan Payments and any City Advances.
Section 29. Disclaimers with Respect to Loans and the District. ORAL
AGREEMENTS OR ORAL COMMITMENTS TO LEND MONEY, EXTEND CREDIT, OR
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE
UNDER WASHINGTON LAW.
Section 30. Termination of Contingent Loan Agreement. Pursuant to Section 10.1 of
the Contingent Loan Agreement, the Contingent Loan Agreement shall terminate upon the
repayment or defeasance of all of the Sales Tax Bonds and the Revenue Bonds and the
repayment of any obligations owed by the District to the City under the Contingent Loan
Agreement, or to a credit enhancement provider.
Section 31. Effect on Existing Agreements; Contingent Loan Agreement to Remain
Outstanding. This Agreement supplements the Interlocal Agreement and the Contingent Loan
Agreement, and except as provided in Section 6 and Section 11, does not modify the parties’
respective obligations under the earlier agreements or under any other agreements between the
City and the District. Except as provided in Section 6 and Section 11, above, all such existing
agreements shall remain in full force and effect. Notwithstanding anything in this Agreement
to the contrary, nothing in this Agreement shall be construed to terminate, limit, or
otherwise impair the District’s right to receive from the City, and the City’s obligation to
pay to the District, City Special Events Center Payments and City Contingent Loan
Payments when and as required under the Contingent Loan Agreement so long as the
Revenue Bonds remain outstanding.
[signature page follows]
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IN WITNESS WHEREOF, the City and the District have caused this Agreement to be
executed in their respective names by their duly authorized officers, and have caused this
Agreement to be dated as of the date set forth on the first page hereof.
CITY OF KENT, WASHINGTON
Mayor
THE CITY OF KENT SPECIAL EVENTS
CENTER PUBLIC FACILITIES DISTRICT
Chair and Board Member
ATTEST:
Finance Director
ATTEST:
Secretary and Board Member
Approved as to Form: Approved as to Form:
Effective Date of Agreement: ___________________________
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A-1
10069 00012 fb246p08c8
ACKNOWLEDGMENTS
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this _____ day of _________________, 2016, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn, personally appeared
Suzette Cooke, to me known to be the Mayor of the CITY OF KENT, a municipal corporation of
the State of Washington that executed the within and foregoing instrument, and acknowledged
the said instrument to be the free and voluntary act and deed of said city, for the uses and
purposes therein mentioned, and on oath stated that she was authorized to execute the said
instrument.
WITNESS my hand and official seal hereto affixed the day and year in this certificate
above written.
NOTARY PUBLIC in and for the State of
Washington, residing at
Print Name:
My commission expires:
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this _____ day of _________________, 2016, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn, personally appeared
____________________, to me known to be the Chair of THE CITY OF KENT SPECIAL
EVENTS CENTER PUBLIC FACILITIES DISTRICT, a municipal corporation of the State of
Washington that executed the within and foregoing instrument, and acknowledged the said
instrument to be the free and voluntary act and deed of said district, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute the said instrument.
WITNESS my hand and official seal hereto affixed the day and year in this certificate
above written.
NOTARY PUBLIC in and for the State of
Washington, residing at
Print Name:
My commission expires
84
Kent Council Operations Committee Consolidating Budget Adjustment
FINANCE
Aaron BeMiller, Director
Phone: 253-856-5260
Fax: 253-856-6255
Address: 220 Fourth Avenue S.
Kent, WA. 98032-5895
DATE: April 5, 2016
TO: Operations Committee
FROM: Aaron BeMiller, Director
SUBJECT: 2016 Refunding Savings Strategy
MOTION: No motion: Non-action item
SUMMARY: On February 2, 2016, Finance presented to the Council at Workshop a
presentation on potential bond refundings. One of the discussion points during that
Workshop was the possibilities for how the City will want to structure the savings
from the refunding. Generally, savings from refundings are uniformly spread over
the life of the bond. However, depending on the needs of an organization, the
savings can be structured/modified in a myriad of ways to fit those organizational
needs.
The Finance Department is recommending that the savings from the 2016
refunding be structured to achieve maximum savings between 2020 and 2024 for
the following reasons:
The City will lose the Panther Lake Sales Tax Credit in 2020; and
The City’s GO debt reduces significantly in 2025 and again in 2026; and
The only GO debt on our books beginning 2026 is the refunded bonds; and
The City will have an opportunity to refund these bonds again in 2026 or
afterward if the market conditions are favorable (this would also be true if we
use a uniform savings structure).
The proposed modified savings structure will result in a reduced overall savings
from the uniform structure, currently estimated to be $650,000 over the life of the
bonds (final maturity date of 2037).
BUDGET IMPACT: No adverse budget impact from the refunding.
BACKGROUND:
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