910 LID #2CITY OF YELM, WASHINGTON
LOCAL IMPROVEMENT DISTRICT N0.2 BOND, 2009 (TAXABLE}
ORDINANCE NO.910
AN ORDINANCE OF THE CITY OF YELM, WASHINGTON,
AUTHORIZING THE ISSUANCE AND SALE OF A LOCAL
IMPROVEMENT DISTRICT N0.2 BOND IN THE PRINCIPAL
AMOUNT OF $10,139,000; PROVIDING THE FORM, TERMS,
CONDITIONS AND COVENANTS OF SAID BOND;
PROVIDING FOR THE SALE THEREOF; PROVIDING FOR
THE DISPOSITION OF THE PROCEEDS OF THE SALE; AND
AMENDING ORDINANCE N0.903.
APPROVED ON SEPTEMBER 25, 2009
FREPARED BY:
K&L GATES LLP
SEATTLE, WASWINGTON
CITY OF YELM, WASHINGTON
ORDINANCE NO. 910
TABLE OF CONTENTS*
Page
Section 1. Definitions ............................................................................................................... 4
Section 2. Authorization of Bond .......................................................................................... .. 5
Section 3. Registrar; Bond Register ....................................................................................... .. 6
Section 4. Redemption ........................................................................................................... .. 7
Section 5. Payment of Assessments; Interest on Assessments .............................................. .. 7
Section 6. Form of Bond ........................................................................................................ .. 8
Section 7. Execution of Bond ................................................................................................ 11
Section 8. Defeasance ............................................................................................................ 12
Section 9. Sale of the Bond .................................................................................................... 12
Section 10. Disposition of Bond Proceeds ............................................................................... 13
Section 11. Guaranty Fund ....................................................................................................... 13
Section l2. Lost or Destroyed Bond ........................................................................................ 13
Section 13. USDA Rural Development Guaranteed Loan Program ........................................ 14
Section 14. Covenants .............................................................................................................. 14
Section 15. Severability ........................................................................................................... 14
Section 16. Prior Acts; Genera! Authorization ........................................................................ 14
Section 17. Amending Ordinance No. 903 .............................................................................. 15
Section 18. Ratification and Confirmation .............................................................................. 15
Section 19. Effective Date ....................................................................................................... 16
* This Table of Content and the cover page are provided for convenience only and are not a part
of this ordinance.
ORDINANCE N0.910
AN ORDINANCE OF THE CITY OF YELM, WASHINGTON,
AUTHORIZING THE ISSUANCE AND SALE OF A LOCAL
IMPROVEMENT DISTRICT N0.2 BOND IN THE PRINCIPAL
AMOUNT OF $10,139,000; PROVIDING THE FORM, TERMS,
CONDITIONS AND COVENANTS OF SAID BOND;
PROVIDING FOR THE SALE THEREOF; PROVIDING FOR
THE DISFOSITION OF THE PROCEEDS OF THE SALE; AND
AMENDING ORDINANCE N0.903.
WHEREAS, the City Council of the City of Yelm, Washington (the "City"), by
Ordinance No. 847, created Local [mprovement District No. 2, also known as and referred to
herein as the Killion Road Local Improvement District (the "District"); and
WHEREAS, for the purpose of providing interim financing for the costs of improvements
within the District, the City issued its Killion Road Local Improvement District Bond
Anticipation Notes, 2006 in the aggregate principal amount of $5,100,000 which aze due on
October 1, 2009 (the "200b Notes"), and its Killion Road Local Improvement District Bond
Anticipation Notes, 2007 in the aggregate principal amount of $4,300,000 which are due on
October 1, 2009 (the "2007 Notes"}; and
WHEREAS, the assessment rolt for the District has been confirmed in the manner
required by law by Ordinance No. 903 in the amount of $10,478,617, of which $339,000 has
been prepaid; and
WHEREAS, in order to pay the ZOOb Notes and the 2007 Notes (together, the "Notes"), it
is found to be in the best interest of the City to issue and sell its Local Improvement District No.
2 Bond in the principal amount of $10,139,000; and
WHEREAS, the City has heretofore accepted the offer of Thurston First Bank to purchase
the Bond on the teams and conditions set forth therein and herein;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YELM,
WASHINGTON, DO ORDAIN, as follows:
Section 1. Definitions. As used in this ordinance the following terms shall have the
following meanings, unless a different meaning clearly appears from the context:
Assessments means the assessments levied in Local Improvement District No. 2, which
assessments are pledged to be paid into the LID No. 2 Fund, including installments thereof and
any interest and penalties due or which may become due thereon.
Bank means Thurston First Bank, or its successor or assigns.
Bond Register means the books or records maintained by the Registraz containing the
Warne and mailing address of the owner of the Bond or nominee of such owner and the principal
amount of the Bond owned by such owner or nominee.
City means the City of Yelm, Washington, a municipal corporation duly organized and
existing under and by virtue of the Constitution and laws of the State of Washington.
Council means the general legislative authority of the City as the same shall be duly and
regularly constituted from time to time.
District means Local Improvement District No. 2 of the City, also known and referred to
as the Killion Road Local Improvement District.
Government means the United States of America, acting through its Department of
Agriculture
Government Obligations has the meaning given such term in chapter 39.53 RCW, as
such chapter may be hereafter amended or restated.
Guaranteed Portion means $9,125,100 of the original principal amount of the Bond and
during the life of the Bond, an amount equal to 90% of the outstanding principal balance.
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Guaranty Fund means the Guaranty Fund of the City authorized and maintained
pursuant to chapter 35.54 RCW.
Killion Road LID No. 2 Repayment Fund means the Killion Road LID No. 2 Repayment
Fund, created in the office of the Treasurer by Section S of Ordinance No. 859.
LID No. 2 Fund means the Local Improvement District No. 2 Fund created by Ordinance
No. 847 of the City.
Loan Agreement means the Business Loan Agreement between the City and the Bank
dated as of September 30, 2009, as it may be amended from time to time.
Notes mean the 2006 Notes and the 2007 Notes.
Registrar means the Treasurer for the purposes of registering and authenticating the
Bond, maintaining the Bond Register, and paying the principal of and interest on the Bond as the
same become due and payable.
Treasurer means the Finance & Administrative Services Director of the City, or other
officer or officers succeeding to the duties of such office.
2006 Notes means the City's Killion Road Local Improvement District Bond Anticipation
Notes, 2006 issued in the aggregate principal amount of $5,100,000 on November 7, 2006.
2047 Notes means the City's Killion Road Local Improvement District Bond Anticipation
Notes, 2006 issued in the aggregate principal amount of $4,300,000 on November 7, 2007.
Section 2. Authorization of Bond. For the purpose of paying the Notes, making an
initial deposit to the Guazanty Fund and paying costs associated with the issuance of the Bond,
the City shall issue its Local Improvement District Nv. 2 Bond, 2009 (Taxable) {the "Bond") in
the principal amount of $10,139,000. The Bond shall be dated as of the date of its delivery to the
Bank, shall be in fully registered form, shall be numbered for the purpose of identification and
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control, shall be in the denomination of $10,139,000, and shall bear interest from its date at the
per annum rate of 8.25%, computed on the basis of the actual number of days elapsed over a year
of 365 days. Interest shall be payable annually beginning September 1, 2010, and thereafter on
the 151 day of September of each year, and the Bond shall mature September I, 2026. Principal
on the Bond may be prepaid as provided in Section 4 hereof.
The Bond shall be an obligation only of the LID No. 2 Fund and the Guaranty Fund and
shall not be a general obligation of the City. All money received by the City in payment of,
penalties, if any, and interest on the Assessments levied in the District shall be paid into the LID
No. 2 Fund and used to pay the principal of and interest on the Bond, and as security for such
payment the LID No. 2 Fund is hereby pledged.
Both the principal of and interest on the Bond shall be payable in lawful money of the
United States of America. Interest on the Bond shall be paid by check or draft mailed to the
registered owner or assigns at the address appearing on the Bond Register as of the 15th day of
the month prior to which an interest payment is due. All principal payments shall be paid by
check or draft mailed to the Bank, as the registered owner of the Bond, and the amount of the
principal paid shall be noted on the Bond. Upon receipt of the final payment of principal and
interest, the Bank shall surrender the Bond at the office of the Registrar for cancellation in
accordance with law.
Section 3. Registrar; Bond Register. The Treasurer shall serve as registrar and
paying agent for the Bond. The Registrar shall keep, or cause to be kept, suffcient books or
records for the registration of the Bond. The Registrar is authorized to authenticate and deliver
the Bond in accordance with the provisions of this ordinance and to cant' out all of the
Registrar's powers and duties under this ordinance. The Bond Register shall be maintained by
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the Registrar, and shall contain the name and mailing address of the owner of the Bond or
nominee of such owner and the principal amount of the Bond.
Section 4. Redemption. The principal amount of the Bond shall be prepaid without
penalty by application of Assessments and prepayments thereof, in whole or in part, on any
interest payment date whenever there shall be sufficient money in the LID No. 2 Fund to pay the
same over and above an amount sufficient for the payment of the interest next accruing on the
Bond. Prepayments of principal shall be noted on the Bond. No prepayments may be made from
sources other than Assessments and prepayments thereof.
Notice of any such permitted intended prepayment of principal shall be given not less
than 3 days prior to the date fixed for prepayment by telephone or in writing to the registered
owner of the Bond. The requirements of this section shall be deemed to be complied with when
notice is mailed as herein provided regardless of whether or not it is actually received by the
owner of the Bond.
Section 5. Payment of Assessments: Interest on Assessments. The City has
heretofore levied Assessments payable into the LID No.2 Fund in the total amount of
$10,478,617 pursuant to Ordinance No. 903, of which $339,000 was prepaid prior to the passage
of this ordinance and $10, 139,000 remains payable in annual installments together with interest
and penalties thereon in the manner and at the times specified in Ordinance No. 903. The
balance of Assessments remaining unpaid at the end of the thirty-day prepayment period shall
bear interest at a rate of 9.25%, which is one percent greater than the interest rate on the Bond.
Both principal of and interest on the Bond are payable solely out of the LID No. 2 Fund and from
the Guaranty Fund.
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Section b. Form of Bond. The Bond shall be in substantially the following form:
UNITED STATES OF AMERICA
NO. 1 $10,139,000
STATE OF WASHINGTON
CITY OF YELM
LOCAL IMPROVEMENT DISTRICT N0.2 BOND, 2009 {Taxable)
REGISTERED OWNER: Thurston First Bank
PRINCIPAL AMOUNT: TEN MILLION ONE HUNDRED THIRTY-NINE THOUSAND
AND NO/100 DOLLARS ($10,139,000)
INTEREST RATE: 8.25%
MATURITY DATE: September 1, 2026
Laws of Washington 1965, Chapter 7, § 35.45.070 provides, in part, as follows:
Neither the holder nor owner of any bond, interest coupon, or warrant issued
against a local improvement fund shall have any claim therefor against the city or
town by which it is issued, except for payment from the special assessments made
for the improvement for which the bond or warrant was issued and except also for
payment from the local improvement guazanty fund of the city or town as to bonds
issued after the creation of a local improvement guaranty fund of the city or town.
The city or town shall not be liable to the holder or owner of any bond, interest
coupon, or warrant for any loss to the local improvement guazanty fund occurring
in the lawful operation thereof.
The City of Yelm, Washington, a municipal corporation of the State of Washington (the
"City"), hereby acknowledges itself to owe and for value received promises to pay to the
Registered Owner identified above, solely out of the sources referred to herein, on the Maturity
Date set forth above, the Principal Amount set forth above in lawful money of the United States
of America, with interest on the unpaid balance hereof from the date hereof at the Interest Rate
per annum set forth above, payable September 1, 2010, and annually thereafter on September 1st
of each year until payment of the principal sum has been made or duly provided for. Interest on
and principal of this bond is payable by check or draft mailed on the date such interest is due to
the registered owner hereof at the address appearing on the bond registration books as of the 15th
day of the month prior to which an interest payment is due. Upon receipt of the final payment of
principal and interest, the Registered Owner shall present and surrender this bond at the office of
the City's Treasurer (the "Registrar") for cancellation in accordance with law.
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Principal of this bond is subject to prepayment in advance of its scheduled maturity, in
whole or in part on any interest payment date whenever there shall be Buff cient money in the
LID No. 2 Fund to pay the same over and above an amount sufficient for the payment of the
interest next accruing on this bond. Prepayments of principal shall be entered below. Native of
any such intended prepayment shall be given by telephone or in writing to the Registered Owner
not fewer than 3 days prior to such prepayment.
This bond, both principal and interest, is payable only out of the Local Improvement
District No. 2 Fund (the "LID No. 2 Fund") created by Ordinance No. 847 of the City, and from
the local improvement guaranty fund of the City created pursuant to Chapter 209, Session Laws,
1927, and acts amendatory thereof. The City has irrevocably obligated and bound itself to pay
into the LID No. 2 Fund all special assessments levied within LID No. 2. The owner of this bond
shall have no claim therefor against the City except for payment from the special assessments
made for the improvements for which this bond was issued, and except as against the local
improvement guaranty fund of the City, and the City shall not be liable to any owner of this bond
for any loss to the guaranty fund occurring in the lawful operation thereof by the City. The
remedy of the owner of this bond in case of nonpayment of either principal or interest shall be
confined to the enforcement of the assessments and to the guaranty fund. This bond is not a
general obligation of the City.
This bond is authorized by Ordinance No. 910 of the City, passed on September 25, 2009
(the "Bond Ordinance"), and is issued to pay certain bond anticipation notes of the City issued to
finance improvements in Local Improvement District No. 2, also known and referred to as the
Killion Road Local Improvement District; to make an initial deposit into the guaranty fund; and
to pay costs of issuance of this bond.
The City has taken no action to cause the interest on this bond to be exempt from federal
income taxation.
The City hereby covenants and agrees with the owner of this band that it will keep and
perform all the covenants of this bond and of the Bond Ordinance to be by it kept and performed.
Reference is hereby made to the Bond Ordinance for the definitions of defined terms used herein.
Reference to the Bond Ordinance and any and all modifications and amendments thereto
is made for a description of the nature and extent of the security for this bond, the funds pledged,
and the terms and conditions upon which this bond is issued.
It is hereby certified and declared that this bond is issued pursuant to and in strict
compliance with the Constitution and laws of the State of Washington and ordinances of the
City, and that acts, conditions, and things required to be done precedent to and in the issuance of
this bond have happened, been done, and performed.
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IN WITNESS WHEREOF, the City of Yelm, Washington, has caused this bond to be
signed on behalf of the City with the manual or facsimile signature of its Mayor, to be attested by
the manual or facsimile signature of its Clerk this day of , 2009.
CITY OF YELM, WASHINGTON
[SEAL)
By /s/
Mayor
ATTEST:
/s/
Clerk
CERTIFICATE OF AUTHENTICATION
Date of Authentication:
This bond is the bond described in the within-mentioned Bond Ordinance and is the Local
Improvement District No. 2 Bond, 2009 (Taxable}, of the City of Yelm, Washington.
CITY OF YELM
City Treasurer, Registrar
By /s/
Principal Amount Paid Payment Date
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER OF
TRANSFEREE
{Please print or typewrite name and address, including zip code, of Transferee)
the within bond and does hereby irrevocably constitute and appoint of
or its successor, as Registraz to transfer said bond on the books
kept for registration thereof with full power of substitution in the premises.
DATED:
SIGNATURE GUARANTEED:
NOTE: The signature on this Assignment must
correspond with the name of the registered owner as
it appears upon the face of the within bond in every
particular, without alteration or enlargement or any
change whatever.
Section 7. Execution of Bond. The Bond shall be signed on behalf of the City by the
manual or facsimile signature of the Mayor, and shall be attested by the manual or facsimile
signature of the Clerk.
The Bond shall be valid or obligatory for any purpose or entitled to the benefits of this
ordinance only if the Certificate of Authentication thereon in the form hereinbefore recited has
been manually executed by the Registrar. 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.
In case either of the officers who shall have executed the Bond shall cease to be such
officer or officers of the City before the Bond so signed shall have been authenticated or
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delivered by the Registrar, or issued by the City, such Bond 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.
The Bond may also be signed and attested on behalf of the City by such persons as at the actual
date of execution of such Bond shall be the proper officers of the City although at the original
date of such Bond any such person shall not have been such officer of the City.
Section 8. Defeasance. In the event that money and/or Government Obligations
maturing at such time or times and bearing interest to be earned thereon in amounts (together
with such money if necessary) sufficient to redeem and retire the Bond in accordance with its
terms are set aside in a special account to effect such redemption or retirement and such money
and/or the principal of and interest on such obligations are irrevocably set aside and pledged for
such purpose, then no further payments need be made into the LID No. 2 Fund for the payment of
the principal of and interest on the Bond, and the owner of the Bond shall cease to be entitled to
any lien, benefit or security of this ordinance except the right to receive the funds sa set aside and
pledged, and the Bond shall be deemed not to be outstanding hereunder.
Section 9. Sale of the Bond. The proposal of the Bank dated September 3, 2009 for
sale of the Bond to the Bank, heretofore approved by the Council, is hereby ratified and
confirmed, and the City agrees to pay a fee of one percent of the principal amount of the Bond to
the Bank and a fee of one percent of the Guaranteed Portion to the Government at closing. The
Mayor is hereby authorized and directed to execute the Loan Agreement in substantially the form
presented to this Council with such changes as may be deemed necessary and advisable by the
Treasurer and bond counsel to the City, and to take all actions necessary to accomplish the
purposes set forth therein. The appropriate City officials are hereby authorized and directed to do
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everything necessary for the prompt issuance, execution and delivery of the Bond and for the
proper application and use of the proceeds thereof.
Section 10. Disposition of Bond Proceeds. A portion of the proceeds of the Bond in
the amount necessary to pay principal of and interest on the Notes shall be deposited in the
Killion Road LID No. 2 Repayment Fund on the date of issue of the Bond and shall be caused to
be transmitted to the state fiscal agency and used to pay and redeem the Notes on October I,
2009. Upon the payment of the Notes the Killion Road LID No. 2 Repayment Fund shall be
closed. The remaining proceeds of the Bond shall be used to pay costs of issuance of the Bond
and to make the initial deposit into the Guaaanty Fund.
Section I I . Guarant~Fund. The City hereby covenants that on or before January 28,
2010, the City shall establish a balance in the Guaranty Fund equal to not less than 10% of the
then outstanding principal balance of the Bond. The Guaranty Fund shall thereafter be drawn on,
administered and funded as provided in chapter 35.54 RCW; provided, however, that the City
shall maintain a balance therein not less than 10% of the outstanding principal amount of the
Bond. Upon a withdrawal from the Guaranty Fund which reduces the balance on hand to an
amount less than the 10% requirement, the City shall re-establish the balance to the 10%
requirement within 180 days of that withdrawal.
Section ] 2. Lost or Destroyed Bond. In case the Bond shall be lost, stolen or
destroyed, the Registrar may execute and deliver a new Bond of like amount, date, and tenor to
the registered owner thereof upon the owner paying the expenses and charges of the City in
connection therewith and upon his/her filing with the Registrar evidence satisfactory to the
Registraz that such Bond was actually lost, stolen or destroyed and of his/her ownership thereof,
and upon furnishing the Registrar with indemnity satisfactory to the Registraz.
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Section 13. USDA Rural Development Guaranteed Loan Program. The City has been
advised that the Bank is applying to participate in the Government's USDA Rural Development
Community Facilities Guaranteed Loan Program. The appropriate City officials are hereby
authorized and directed to assist in the application process and execute such documents and
agreements as shall be required to confirm the City's participation in this Guaranteed Loan
Program.
Section 14. Covenants.
(a) The City shall deliver its audited financial statements to the Bank promptly upon
the receipt thereof (each two years).
(b) The City shall provide to the Bank on an annual basis copies of its annual
financial report.
{c) The City shall take all action promptly to foreclose upon defaulted Assessments as
the same may be legally foreclosed.
Section 15. Severability. If any one or more of the covenants or agreements provided
in this ordinance to be performed on the part of the City shall be declared by any court of
competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or
agreements, shall be null and void and shall be separable from the remaining covenants and
agreements in this ordinance and shall in no way affect the validity of the other provisions of
this ordinance or of the Bond.
Section 16. Prior Acts: General Authorization. Any act taken pursuant to the authority
of this ordinance but prior to its effective date is hereby ratified and confirmed. The Mayor and
Treasurer and other appropriate officers of the City are authorized to take any actions and to
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execute documents as in their judgment may be necessary or desirable in order to carry out the
terms of, and complete the transactions contemplated by, this ordinance.
Section 17. Amending_Ordinance No. 903. The following language in Section 4 of
Ordinance No. 903 approved by City Council on May 12, 2009 is hereby amended as follows
(deletions are stricken and additions are double underlined):
Section 4. The amount of any assessment, or any portion thereof, against property
in the Killion Road LID not paid within the 30-day period from the date of the
first publication of the Finance Director notice shall be payable in fifteen (15)
equal annual installments, together with interest on the diminishing principal
balance thereof at a rate of Qne n rcent f 1%1 ^~~ ~°~~ ~~~~~~' r, ~'o~' per annum
higher than the interest rate of the bonds sold in the Killion Road LID. Interest
shall commence on the 30th day following first publication of such notice. The
first installment shall become due and payable one year from the expiration of the
30-day prepayment period. Annual installments, including interest and any
penalty, shall be paid in full when due, and no partial payments shall be accepted
by the City's Finance Director.
Section 18. Ratification and Confirmation. Ordinance No. 903 and as amended by this
ordinance is hereby ratified and confirmed.
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Section ! 9. Effective Date. This ordinance shall become effective five days from its
passage and publication as required by law.
PASSED by the City Council at a meeting held this 25th day of September, 2009.
CITY OF YELM, WA
By
yor
ATTEST:
i ~
GC~~,/cr
Clerk
Date Adopted: September 25, 2009
Date of Publication: ~ , 2009
Effective Date: 7 , 2009
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