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730 Ltd Tax Gen Oblig Refunding BondORDINANCE NO. 730 AN ORDINANCE OF THE CITY OF YELM, WASHINGTON, PROVIDING FOR THE ISSUANCE AND SALE OF A LIMITED TAX GENERAL OBLIGATION REFUNDING BOND IN THE PRINCIPAL AMOUNT OF $251,189.50 FOR THE PURPOSE OF REFUNDING AN OUTSTANDING OBLIGATION OF THE CITY; PROVIDING THE FORM, TERMS AND MATURITY OF SAID BOND; AND APPROVING THE SALE OF THE BOND. WHEREAS, City of Yelm, Washington (the "City") received a loan from KeyBank National Association, Yelm, Washington (the "Bank") on July 22, 1996 in the original principal amount of $301,500 (the "1996 Loan") for the purpose of financing the Five Corners Street Improvements project (the "Project"), and said 1996 Loan remains outstanding in the principal amount of $248,241; and WHEREAS, the City has received an offer from the Bank to purchase a limited tax general obligation bond of the City in the principal amount of $251,189.50 to refinance the 1996 Loan under the terms and conditions set forth herein; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YELM, WASHINGTON, DOES ORDAIN, as follows: Section 1. Definitions. As used in this ordinance, the following words shall have the following meanings: Act means Chapter 39.50 RCW. Bank means KeyBank National Association, Yelm, Washington. Bond means the City of Yelm, Washington, Limited Tax General Obligation Refunding Bond, 2001, the sale and issuance of which is authorized herein. Bond Fund means the Limited Tax General Obligation Refunding Bond Fund, 2001established pursuant to Section 6. Bond Register means the registration books showing the name, address and tax identification number of each registered owner of the Bond, initially the Bank, maintained pursuant to Section 149(a) of the Code. Bond Registrar, initially, means the Treasurer. At any time following the issuance of the Bond, however, the Treasurer may determine to appoint a different Bond Registrar, including, but not limited to the fiscal agency of the State of Washington in either Seattle, Washington, or New York, New York. The term "Bond Registrar" also shall include any successor Bond Registrar appointed by the Treasurer as permitted by law. City means City of Yelm, Washington, a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington. Change Date means the first day of the calendar month following the fifth annual anniversary of the Dated Date. Code means the federal Internal Revenue Code of 1986, as amended from time to time, and the applicable regulations thereunder. Council means the duly constituted City Council as the general legislative body of the City. Dated Date means March 15, 2001, the date of the Bond, which is the date from which interest on the Bond commences to accrue. Event of Default means any of the following: (a) The City fails to make any payment when due; or (b) The City is in default of any covenant hereunder. -2- P:\CMW\cMW4Pa 01/03/27 Index means the weekly average yield on United States Treasury Securities adjusted to a constant maturity of five (5) years as made available by the Federal Reserve Board. If the Index is no longer available, a substitute Index may be used by the Bank; provided that (a) at least 90 days prior notice is given to the City and (b) Bond Counsel to the City delivers an opinion to the Bank to the effect that the tax exempt status of interest will not be adversely affected by the use of a substitute Index. Interest Rate means, commencing as of the Dated Date and until the Change Date, a fixed annual rate of interest equal to 5.68%, and from and after the Change Date shall be a fixed rate equal to the Index as of the date that is forty five (45) days prior to the Change Date, plus one percent per annum. The Bank will notify the City in writing of the Index at least thirty days prior to the Change Date. 1996 Loan means the loan to the City from the Bank on July 22, 1996 in the original principal amount of $301,500 for the purpose of financing the Project, which loan remains outstanding in the principal amount of $251,189.50. Project means the Five Corners Improvements project. Treasurer means the Clerk-Treasurer of the City, or any successor to the functions of the Clerk-Treasurer. Section 2. Authorization of Bond. For the purpose of refunding the 1996 Loan, the Council hereby authorizes the issuance and sale of its limited tax general obligation bond in the principal amount of $251,189.50 (the "Bond"). The Bond shall be designated as the "City of Yelm, Washington, Limited Tax General Obligation Refunding Bond, 2001" shall be dated as of the Dated Date, shall be issued in fully registered form in the denomination of $251,189.50, shall bear interest on unpaid principal from the Dated Date at the Interest Rate, and shall mature on -3- P:\CMW\CMW4P4 01/03/27 March 15, 2011. Interest on the Bond shall be calculated on the basis of a 365/366-day year and actual days elapsed, and shall be payable in combined quarterly payments of principal and interest in the amount of $8,485.79, commencing June 15, 2001, and on each March 15, June 15, September 15 and December 15 thereafter, with final payment including all principal and accrued interest nevertheless due on March 15, 2011. Installment payments shall apply first to interest and then to principal. The Bond shall be in registered form as to both principal and interest, and the Treasurer shall be the "Bond Registrar." Both principal of and interest on the Bond shall be payable in lawful money of the United States of America, and shall be a general obligation of the City to the extent provided herein. Upon the final payment of all principal and interest on the Bond, the Bond shall be surrendered to the Bond Registrar for cancellation. Section 3. Prior Redemption. The Bond may be prepaid in whole or in part at any time without penalty, with prepayments to apply first to interest and then to principal. Section 4. Registration. The City hereby appoints the Treasurer to act as the Bond Registrar. The duties of the Bond Registrar hereunder shall be limited to authenticating the Bond and to remitting money to the Bank on the payment dates as provided therein. The Bond shall not be transferable, except to a successor in interest (through merger, corporate reorganization or purchase of the Bank). The Treasurer may determine at any time that she no longer wishes to act as Bond Registrar and thereupon appoint a successor Bond Registrar, which may or may not be the fiscal agency of the State of Washington. The Bond Registrar is authorized, on behalf of the City, to authenticate and deliver the Bond and to carry out all of the Bond Registrar's powers and duties under this ordinance. -4- P:\CMW\CMW4P4 01/03/27 Section 5. Bond Redemption Fund and Security for the Bond. A special fund of the City to be known as the "Limited Tax General Obligation Refunding Bond Fund, 2001" (the "Bond Fund") is hereby authorized to be created by the Treasurer. The Bond Fund shall be a trust account and shall be drawn upon for the sole purpose of paying the principal of and interest on the Bond. Money on deposit in the Bond Fund not immediately needed to pay such interest or principal may temporarily be deposited in such institutions or invested in such obligations that are legal investments for City funds. Any interest or profit from the investment of such money shall be deposited in the Bond Fund. Any money remaining in the Bond Fund after payment in full of the principal of and interest on the Bond may be transferred to the general fund of the City, and the Bond Fund shall be closed. The Bond is a general obligation of the City. The City hereby irrevocably covenants and agrees for as long as the Bond is outstanding and unpaid that it will include in its budget, and levy an ad valorem tax upon all the taxable property in the City within and as part of the tax levy permitted to cities without a vote of the electors and in amounts sufficient, with other money legally available therefor, to pay the principal of and interest on the 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 pledge of tax levies maybe discharged prior to maturity of the Bond by making full provision for the payment thereof. Section 6. Execution and Delivery of Bond. The Bond shall be executed on behalf of the City by the manual or facsimile signature of the Mayor and attested by the manual or facsimile signature of the City Clerk-Treasurer. In case any officer whose signature shall appear on the Bond shall cease to be an officer before the delivery of the Bond, such signature shall -J- P:\CMW\CMW4P4 01/03/27 nevertheless be valid and sufficient for all purposes, and the Bond may be authenticated and delivered as if such officer had remained in office until such delivery. Only such Bond as shall bear thereon a Certificate of Authentication in the form hereinafter specified in Section 12, manually executed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance. Such Certificate of Authentication shall be conclusive evidence that the Bond so authenticated has been duly executed, authenticated and delivered hereunder and is entitled to the benefits of this ordinance. Section 7. Sale of the Bond. The Bond shall be sold to KeyBank National Association, Yelm, Washington (the "Bank") in accordance with the terms of this ordinance. The proper officials of the City are hereby authorized and directed to do all things necessary for the prompt execution and delivery of the Bond and the items required to be delivered to the Bank under the terms of its commitment and for proper use and application of the proceeds of sale thereof. Section 8. Use of Bond Proceeds, Refunding the 1996 Loan. All of the proceeds of the Bond shall be applied to the immediate payment of the 1996 Loan and the costs of Bank's attorney fees in connection with the Bond. Section 9. Lost, Destroyed or Mutilated Bond. In the event the Bond is lost, destroyed, or mutilated, the City will cause to be issued a new Bond, substantially similar to the original, to replace the same, in such manner and upon such reasonable terms and conditions as the Bond Registrar may from time to time determine. Section 10. Representations and Warranties. The City hereby makes the following representations, warranties and agreements. -6- P:\CMW\CMW4P4 01/03/27 (a) The City has full legal right, power and authority (i) to pass this ordinance, (ii) to sell, issue and deliver the Bond as provided herein and (iii) to carry out and consummate all other transactions contemplated by this ordinance. (b) By all necessary official action prior to or concurrently herewith, the City has duly authorized and approved the execution and delivery of, and the performance by the City of its obligations contained in the Bond and this ordinance and the consummation by it of all other transactions contemplated by this ordinance in connection with the issuance of the Bond, and such authorizations and approvals are in full force and effect and have not been amended, modified or supplemented in any material respect. (c) This ordinance constitutes the legal, valid and binding obligation of the City. (d) The Bond, when issued, authenticated and delivered, will constitute a legal, valid and binding obligation of the City, in accordance with its terms. Section 11. Covenants of the City. The City hereby makes the following covenants with the Bank. (a) Punctual Payment of Bond. The City covenants that amounts on deposit in the Bond Fund shall be drawn upon solely for the purpose of paying the principal of and interest on the Bond. The City further covenants that it will duly and punctually pay or cause to be paid the principal of and interest on the Bond at the place or places, on the date or dates and in the manner provided in the Bond and herein. (b) Bond to Remain Tax Exempt. The City hereby covenants that it will not make any use of the proceeds from the sale of the Bond or any other funds of the City which may be deemed to be proceeds of such Bond pursuant to Section 148 of the Code and the applicable -7- P:\CMW\CMW4P4 01/03/27 regulations thereunder which will cause the Bond to be "an arbitrage bond" within the meaning of said section and said regulations. The City will comply with the applicable requirements of Section 148 of the Code (or any successor provision thereof applicable to the Bond) and the applicable regulations thereunder throughout the term of the Bond. The City further covenants that it will not take any action or permit any action to be taken that would cause the Bond to constitute "a private activity bond" under Section 141 of the Code. Section 12. Form of Bond and Certificate of Authentication. The Bond shall be in substantially the following form: UNITED STATES OF AMERICA No. R-1 $251,189.50 STATE OF WASHINGTON CITY OF YELM LIMITED TAX GENERAL OBLIGATION REFUNDING BOND, 2001 MATURITY DATE: March 15, 2011 REGISTERED OWNER: KEYBANK NATIONAL ASSOCIATION Yelm, Washington TAXPAYER ID: 91-0403940 PRINCIl'AL AMOUNT: $251,189.50 The City of Yelm, 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 the Principal Amount, together with interest thereon at the Interest Rate, which initially is 5.68%, subject to an adjustment as provided in the hereinafter defined Bond Ordinance. Both principal of and interest on this bond are payable in lawful money of the United States of America, and shall be paid in quarterly combined payments of principal and interest in the amount of $8,485.79, commencing June 15, 2001, and on each March 15, June 15, September 15, and December 15 thereafter, with final payment of all principal and accrued interest nevertheless due on March 15, 2011. Interest on the Bond shall be calculated on the basis of a 365/366-day year and actual days elapsed. The Bond is issued pursuant to Ordinance No. 730 of the City passed March 28, 2001 (the "Bond Ordinance"). The. definitions contained in the Bond Ordinance shall apply to -8- P:\CMW\CMW4P4 01/03/27 capitalized terms contained herein. Both principal and interest shall be payable upon presentation of the Bond to the Clerk-Treasurer of the City in Yelm, Washington. This bond is issued under and in accordance with the provisions of the Constitution and applicable statutes of the State of Washington and the Bond Ordinance for the purpose of refunding an outstanding obligation of the City and paying the costs of the Bank's attorney fees in connection with this Bond. The City hereby irrevocably covenants and agrees with the owner of this Bond that it will include in its annual budget and levy taxes annually, within and as a part of the tax levy permitted to the City without a vote of the electors, in amounts sufficient, together with all other money legally available therefor, to pay the principal of and interest on this Bond as the same shall become due. The full faith, credit and resources of the City are hereby irrevocably pledged for the annual levy and collection of such taxes and the prompt payment of such principal and interest. This bond maybe prepaid at any time, with prepayments to apply first to interest and then to principal. This Bond is not transferable, except as provided in the Bond Ordinance. This bond is not a "private activity bond." The City has designated this bond as a qualified tax exempt obligation for investment by financial institutions pursuant to Section 265(b) of the Internal Revenue Code of 1986, as amended. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall have been manually signed by or on behalf of the City Treasurer as Bond Registrar. It is hereby certified that all acts, conditions and things required by the Constitution and statutes of the State of Washington to exist, to have happened, been done and performed precedent to and in the issuance of this bond have happened, been done and performed and that the issuance of this bond does not violate any constitutional, statutory or other limitation upon the amount of indebtedness that the City may incur. IN WITNESS WHEREOF, the City of Yelm, Washington, has caused this bond to be signed with the manual or facsimile signature of the Mayor and attested by the manual or facsimile signature of the Clerk-Treasurer, as of this 15th day of March, 2001. CITY OF YELM, WASHINGTON By Mayor -9- P:\CMW\CMW4P4 01/03/27 ATTEST: City Clerk The Bond Registrar's Certificate of Authentication on the Bond shall be in substantially the following form: CERTIFICATE OF AUTHENTICATION This bond is the Bond described in the within-mentioned Bond Ordinance and is the Limited Tax General Obligation Refunding Bond, 2001 of the City of Yelm, Washington, dated March 15, 2001. By Clerk-Treasurer, City of Yelm Section 13. Tax Designation. The City hereby designates the Bond as a "qualified tax exempt obligation" for purchase by financial institutions pursuant to Section 265(b) of the Code. The City does not anticipate that it will issue more than $10,000,000 in "qualified tax-exempt obligations" during the year 2001. Section 14. General Authorization. The officials of the City are hereby authorized to do and perform from time to time any and all acts and things consistent with this ordinance necessary or appropriate to carry the same into effect. Section 15. Effect of Partial Invalidity. In case any one or more of the provisions of this ordinance or of the Bond shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this ordinance or of the Bond, but this ordinance and the Bond shall be construed and enforced as if such illegal or invalid provision had not been contained therein. In case any covenant, obligation or agreement contained in the Bond or in this ordinance shall for any reason be held to be in violation of law, then such covenant, -10- P:\CMW\CMW4P4 01!03/27 obligation or agreement shall be deemed to be the covenant,. obligation or agreement of the City to the full extent permitted by law. Section 16. Effect of Covenants, Etc. All covenants, obligations and agreements of the City contained in this ordinance shall be deemed to be covenants, obligations and agreements of the City to the full extent permitted by the Constitution of the State of Washington. No covenant, obligation or agreement contained herein shall be deemed to be a covenant, obligation or agreement of any present. or future official, member, agent or employee of the City in his or her individual capacity, and neither the members of the City Council nor any officer thereof executing the Bond shall be liable personally on the Bond or be subject to any personal liability or accountability by reason of the issuance thereof. No member, officer, agent or employee of the City shall incur any liability in acting or proceeding or in not acting or proceeding, in good faith in accordance with the terms of this ordinance. Section 17. Ordinance to Constitute Contract. In consideration of the purchase and acceptance of the Bond authorized to be issued hereunder by the owner of the Bond, this ordinance shall be deemed to be and shall constitute a contract between the City and such owner, and the covenants and agreements set forth in this ordinance to be performed on behalf of the City shall be for the equal benefit, protection and security of the owner of the Bond. Upon the occurrence of an Event of Default, the Bank may exercise any remedy available to it by law. Section 18. Effective Date. This ordinance shall become effective five days following its passage and publication as required by law. -11- P:\CMW\cMW4Pa 01/03/27 PASSED by the City Council of City of Yelm, Washington, at a regular meeting thereof held this 28th day of March, 2001. CITY OF YELM, WASHINGTON Ma r ATTEST: ~~ ~~~ ~"~ C1 -Treasurer -12- P:\CMW\CMW4P4 01/03/27 CERTIFICATE I, the undersigned, City Clerk of City of Yelm, Washington (the "City") and keeper of the records of the City Council (the "Council"), DO HEREBY CERTIFY: 1. That the attached ordinance is a true and correct copy of Ordinance No. 730 of the Council (the "Ordinance"), duly passed at a regular meeting thereof held on the 28th day of March, 2001. 2. That said meeting was duly convened and held in all respects in accordance with law, and to the extent required by law, due and proper notice of such meeting was given; that a legal quorum was present throughout the meeting and a legally sufficient number of members of the Council voted in the proper manner for the passage of the Ordinance; that all other requirements and proceedings incident to the proper passage of the Ordinance have been duly fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificate. IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of March, 2001. ... / Clerk-Treasurer P:\CMW\CMW4P4 01/03/27