678 LID BondCITY OF YELM
LOCAL IMPROVEMENT DISTRICT NO. 1 BONDS, 1999
ORDINANCE NO. 678
AN ORDINANCE OF THE CITY OF YELM, WASHINGTON,
AUTHORIZING THE ISSUANCE AND SALE OF LOCAL
IMPROVEMENT DISTRICT NO. 1 BONDS IN THE AGGREGATE
PRINCIPAL AMOUNT OF $1,952,537; PROVIDING THE FORM,
TERMS, RATES, MATURITY, CONDITIONS AND COVENANTS OF
SAID BONDS; PROVIDING FOR THE DISPOSITION OF THE
PROCEEDS OF THEIR SALE; AUTHORIZING A PRELIMINARY
OFFICIAL STATEMENT; AND CONFIRMING THE SALE OF SUCH
BONDS.
PASSED NOVEMBER 16, 1999
PREPARED BY:
PRESTON GATES & ELLIS LLP
Seattle, Washington
TABLE OF CONTENTS
Section1.
Definitions .................................................................................... ............................... 2
Section 2.
Authorization of the Bonds and Bond Details ............................. ...............................
4
Section3.
Redemption .................................................................................. ...............................
6
Section 4.
Registration, Exchange and Payments ......................................... ...............................
7
Section 5.
Bond Fund -- Security and Sources of Payment of Bonds ............ ...............................
9
Section 6.
Execution and Delivery of Bonds .............................................. ...............................
10
Section7.
Form of Bonds ........................................................................... ...............................
10
Section8.
Sale of the Bonds ....................................................................... ...............................
15
Section9.
Defeasance ................................................................................. ...............................
15
Section 10.
Bonds to Remain Tax Exempt; Nonarbitrage ............................ ...............................
16
Section 11.
Bonds Designated Qualified Tax - Exempt Obligations .............. ...............................
16
Section 12.
Lost or Destroyed Bonds ........................................................... ...............................
16
Section 13.
Payment of Assessments and Interest on Assessments .............. ...............................
16
Section 14.
Undertaking to Provide Ongoing Disclosure ............................. ...............................
17
Section 15.
Application of Proceeds ............................................................. ...............................
20
Section16.
Effective Date ............................................................................ ...............................
20
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ORDINANCE NO. 678
AN ORDINANCE OF THE CITY OF YELM, WASHINGTON,
AUTHORIZING THE ISSUANCE AND SALE OF LOCAL
IMPROVEMENT DISTRICT NO. 1 BONDS IN THE AGGREGATE
PRINCIPAL AMOUNT OF $1,952,537; PROVIDING THE FORM,
TERMS, RATES, MATURITY, CONDITIONS AND COVENANTS OF
SAID BONDS; PROVIDING FOR THE DISPOSITION OF THE
PROCEEDS OF THEIR SALE; AUTHORIZING A PRELIMINARY
OFFICIAL STATEMENT; AND CONFIRMING THE SALE OF SUCH
BONDS.
WHEREAS, the City Council (the "Council ") of the City of Yelm (the "City ") formed
Local Improvement District No. 1 (the "LID No. I") by Ordinance No. 654, passed
February 10, 1999; and
WHEREAS, the assessment roll for LID No. 1 has been confirmed in the manner
required by law by Ordinance No. 674 in the amount of $1,994,530.55, of which $41,993.55 has
been prepaid and $1,952,537 remains unpaid; and
WHEREAS, for the purpose of issuing bonds to provide long -term financing for the
Project within LID No. 1, it is deemed necessary and desirable that the City issue Local
Improvement District No. 1 Bonds in the amount of $1,952,537 (the "Bonds "); and
WHEREAS, the City has received a written offer to purchase the Bonds from Martin
Nelson & Company, and has determined that it is in the best interest of the City to accept such
o ffer.
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 words shall have the
following meanings:
Assessments means the assessments levied in LID No. 1 of the City by Ordinance
No. 674, which assessments are pledged to be paid into the Bond Fund, including installments
thereof and any interest and penalties due or which may become due thereon.
Bond Fund means the Local Improvement District No. 1 Bond Redemption Fund created
by Section 5 of this ordinance.
Bond Register means the books or records maintained by the Bond Registrar containing
the name and mailing address of the owner of each Bond or nominee of such owner and the
principal amount and number of Bonds owned by each owner or nominee.
Bond Registrar means the fiscal agency of the State of Washington in either Seattle,
Washington, or New York, New York, for the purposes of registering and authenticating the
Bonds, maintaining the Bond Register, effecting the transfer of ownership of the Bonds and
paying the principal of and interest on the Bonds as the same become due and payable.
Bonds means the City of Yelm, Washington, Local Improvement District No. 1
Bonds, 1999 authorized by this ordinance to be issued.
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 as a code
city.
City Treasurer means the chief financial officer of the City.
Code means the Internal Revenue Code of 1986, as amended, together with all applicable
regulations promulgated thereunder.
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Council means the legislative body of the City as the same shall be duly and regularly
constituted from time to time.
Government Obligations have the meaning given to such term in RCW Ch. 39.53, as the
same may be amended from time to time.
Guaranty Fund means the Guaranty Fund of the City authorized and maintained
pursuant to RCW Ch. 35.54.
LID No. I means Local Improvement District No. 1 of the City.
MSRB means the Municipal Securities Rulemaking Board or any successor to its
functions.
Note Fund means the City of Yelm, 1999 LID No. 1 Note Redemption Fund created in
the Office of the City Treasurer pursuant to Ordinance No. 655 of the City.
Notes means the City of Yelm, Washington Local Improvement District No. 1 Bond
Anticipation Notes, 1999, issued pursuant to Ordinance No. 655 of the City.
NRMSIR means a nationally recognized municipal securities information repository.
Registered Owner means the person named as the registered owner of a Bond in the
Bond Register.
SEC means the Securities and Exchange Commission.
SID means a state information depository for the State of Washington if one is hereafter
created.
Underwriter means Martin Nelson & Company, Seattle, Washington.
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Section 2. Authorization of the Bonds and Bond Details.
(a) Authorization of Bonds. For the purpose of financing part of the cost and
expense of the improvements ordered by Ordinance No. 654 and constructed in Local
Improvement District No. 1, the City shall issue its Local Improvement District No.I
Bonds, 1999 (the "Bonds ") in the aggregate principal amount of $1,952,537.
(b) Bond Details. The Bonds shall be dated as of December 1, 1999, shall be
numbered in such manner and with any additional designation as the Bond Registrar deems
necessary for the purpose of identification and control, shall be in the denomination of $5,000
each or any integral multiple thereof, except for the first which shall be in the denomination of
$7,537, shall bear interest from their date at the following rates per annum in the following
principal amounts on December 1 of the following years:
Maturity years Bond
(December 1) Numbers
Interest
Amount Rates
2000
1 -21
$ 107,537
4.20%
2001
22 -41
100,000
4.50
2002
42 -61
100,000
4.70
2003
62 -81
100,000
4.85
2004
82 -101
100,000
4.95
2005
102 -121
100,000
5.05
2006
122 -141
100,000
5.15
2007
142 -156
75,000
5.25
2008
157 -171
75,000
5.35
2009
172 -186
75,000
5.45
2010
187 -201
75,000
5.55
2011
202 -216
75,000
5.65
2012
217 -226
50,000
5.75
2013
227 -236
50,000
5.85
2014
237 -246
50,000
5.95
2016
247 -390
720,000
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*The Bonds maturing on December 1, 2016 bear interest according to their bond numbers
as follows:
Bond
Interest
Numbers
Amount
Rates
247
-250
$ 20,000
4.40%
251
-266
80,000
4.70
267
-281
75,000
4.90
282
-296
75,000
5.05
297
-306
50,000
5.15
307
-314
40,000
5.25
315
-321
35,000
5.35
322
-331
50,000
5.45
332
-341
50,000
5.55
342
-349
40,000
5.65
350
-355
30,000
5.75
356
-361
30,000
5.85
362
-370
45,000
5.95
371
-390
100,000
6.10
Interest on the Bonds shall be payable annually beginning December 1, 2000, and
annually thereafter on the first day of December of each year, and shall be calculated on the basis
of a 360 -day year with 30 -day months.
The Bonds shall be obligations only of the Bond Fund and the Guaranty Fund of the City
and shall not be general obligations of the City.
Both the principal of and interest on the Bonds shall be payable in lawful money of the
United States of America. Interest on the Bonds shall be paid by check or draft mailed to
registered owners or assigns at the addresses appearing on the Bond Register as of the fifteenth
(15th) day of the month preceding the interest payment date. Principal of the Bonds shall be
payable upon presentation and surrender of the Bonds by the registered owners at the principal
offices of the Bond Registrar.
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Section 3. Redemption. Bonds maturing on December 1, 2000 through and including
December 1, 2006 are not callable for redemption prior to their scheduled maturity. The Bonds
maturing on December 1, 2007 through and including December 1, 2014 shall be called for
redemption prior to maturity on any December 1 on and after December 1, 2004 if sufficient
assessment payments are on hand in the Bond Fund (over and above the amounts necessary to
meet the next maturing interest and principal) and available for such purpose at a price of par
plus accrued interest to the date of redemption from assessment payments only, in order of
maturity and in numerical order within a maturity. All Bonds maturing before December 1, 2016
shall be called for redemption pursuant to this Section 3 only after Bonds maturing on
December 1, 2016 have been redeemed. The Bonds maturing on December 1, 2016 shall be
redeemed from assessment payments only in numerical order beginning on December 1, 2000 if
sufficient assessment payments are on hand in the Bond Fund (over and above the amounts
necessary to meet the next maturing interest and principal) and available for such purpose. In
addition, the City may purchase the Bonds offered to it at any time at any price deemed
reasonable by the Treasurer. The City is not retaining the right to issue refunding bonds for the
purpose of advance refunding the outstanding Bonds, it being understood that the Bonds shall be
payable only from the sources identified in this ordinance.
Notice of any such intended redemption shall be given not less than 30 days nor more
than 60 days prior to the date fixed for redemption by first class mail, postage prepaid, to the
registered owner of any Bond to be redeemed at the address appearing on the Bond Register.
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 any Bond. In
addition, such redemption notice shall also be mailed within the same time period, postage
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prepaid, to the Underwriter at its main office in Seattle, Washington or to its corporate or
business successor, if any, at its main place of business, but mailing of such notice shall not be a
condition precedent to the call of any Bonds for redemption.
Interest on any Bond so called for redemption shall cease to accrue on the date fixed for
redemption unless such Bond or Bonds so called are not redeemed upon presentation made
pursuant to such call.
Section 4. Registration, Exchange and Payments.
(a) Registrar /Bond Register. The City hereby adopts the system of
registration approved by the Washington State Finance Committee. The City shall cause a Bond
register to be maintained by the Bond Registrar. So long as any Bonds remain outstanding, the
Bond Registrar shall make all necessary provisions to permit the exchange or registration or
transfer of Bonds at its principal office. The Bond Registrar shall keep, or cause to be kept, at its
principal corporate trust office, sufficient records for the registration and transfer of the Bonds
which shall at all times be open to inspection by the City. 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 on the Bonds. The Bond Registrar
may become the owner of Bonds with the same rights it would have if it were not the Bond
Registrar, and to the extent permitted by law, may act as depositary 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 rights of Bond owners.
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(b) Registered Ownership. The City and the Bond Registrar, each in its
discretion, may deem and treat the Registered Owner of each Bond as the absolute owner thereof
for all purposes, and neither the City nor the Bond Registrar shall be affected by any notice to the
contrary. Payment of any such Bond shall be made only as described in Section 4(f) hereof, but
such registration may be transferred as herein provided. All such payments made as described in
Section 4(f) 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) Transfer or Exchange of Registered Ownership; Change in
Denominations. The registered ownership of any Bond may be transferred or exchanged, but no
transfer of any Bond shall be valid unless it is surrendered to the Bond Registrar with the
assignment form appearing on the 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, a new Bond (or Bonds at the
option of the new Registered Owner) of the same date, maturity and interest rates 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 canceled 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 and interest rates, in any authorized denomination. The Bond
Registrar shall not be obligated to transfer or exchange any Bond during a period beginning at
the opening of business on the 15th day of the month next preceding any interest payment date
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and ending at the close of business on such interest payment date, or, in the case of any proposed
redemption of the Bonds, after the mailing of notice of the call of such Bonds for redemption.
(d) 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 member of, or in any other capacity with respect to, any committee
formed to protect the rights of the Registered Owners of the Bonds.
(e) Registration Covenant. The City covenants that, until all Bonds have been
surrendered and canceled, it will maintain a system for recording the ownership of each Bond
that complies with the provisions of Section 149 of the Code.
(f) 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 paid by check or draft mailed to the Registered Owners at the addresses for such
Registered Owners appearing on the Bond Register on the 15th day of the month preceding the
interest payment date. Principal of the Bonds shall be payable upon presentation and surrender
of such Bonds by the Registered Owners at the principal office of the Bond Registrar.
Section 5. Bond Fund -- Security and Sources of Payment of Bonds. There is hereby
authorized to be established and the Treasurer is authorized and requested to establish a special
fund of the City to be known as the "Local Improvement District No. 1 Bond Redemption Fund"
(the "Bond Fund "), which fund shall be a trust fund and shall be drawn upon only for the
payment of the principal of and interest on the Bonds. The City hereby covenants and agrees
that assessments levied within LID No. 1 and interest and penalties thereon shall be deposited in
the Bond Fund.
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The Bonds shall be obligations only of the Bond Fund and the Guaranty Fund of the City.
Section 6. Execution and Delivery of Bonds. The Bonds 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. The official seal of the City shall be impressed or a
facsimile thereof imprinted on each Bond. In case any officer whose signature shall appear on
any Bond shall cease to be an officer before the delivery of such Bond, such signature shall
nevertheless be valid and sufficient for all purposes, and such Bond may be authenticated and
delivered the same as if such officer had remained in office until such delivery.
Only such Bonds as shall bear thereon a Certificate of Authentication in the form
hereinafter specified in Section 7, 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.
NO.
Section 7. Form of Bonds. The Bonds shall be in substantially the following form:
UNITED STATES OF AMERICA
STATE OF WASHINGTON
CITY OF YELM
LOCAL IMPROVEMENT DISTRICT
NO. 1 BONDS, 1999
INTEREST RATE: %
REGISTERED OWNER:
PRINCIPAL AMOUNT:
MATURITY DATE: December 1,
DOLLARS
Laws of Washington 1965, Chapter 7, § 35.45.070 provides, in part, as follows:
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Neither the holder nor owner of any bond, interest coupon, or warrant
issued against a local improvement fund shall have any claim therefor against the
city or town by which it is issued, except for payment from the special
assessments made for the improvement for which the bond or warrant was issued
and except also for payment from the local improvement guaranty fund of the city
or town as to bonds issued after the creation of a local improvement guaranty fund
of the city or town. The city or town shall not be liable to the holder or owner of
any bond, interest coupon, or warrant for any loss to the local improvement
guaranty fund occurring in the lawful operation thereof.
The City of Yelm, Washington (the "City ") hereby acknowledges itself to owe and for
value received promises to pay to the Registered Owner identified above from the Local
Improvement District No. 1 Bond Redemption Fund (the "Bond Fund ") created by Ordinance
No. 678 (the "Bond Ordinance "), the Principal Amount indicated above and to pay interest
thereon from December 1, 1999, 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
December 1, 2000 and annually thereafter on the first day of each December.
Both principal of and interest on this bond are payable in lawful money of the United
States of America. Interest shall be paid by mailing a check or draft to the Registered Owner or
assigns at the address shown on the Bond Register as of the 15th day of the month prior to the
interest payment date. Principal shall be paid to the Registered Owner or assigns upon
presentation and surrender of this bond at the principal office of the fiscal agency of the State of
Washington in either Seattle, Washington, or New York, New York (collectively, the "Bond
Register ").
Reference is hereby made to additional provisions of this bond set forth on the reverse
side hereof and such additional provisions shall for all purposes have the same effect as if set
forth in this space.
This bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall
have been manually signed by the Bond Registrar.
It is hereby certified and declared that this bond and the bonds of this issue are issued
pursuant to and in compliance with the Constitution and laws of the State of Washington and
ordinances of the City, and that all 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 City Clerk, and the official seal of the City to be
impressed or imprinted hereon this 1 st day of December, 1999.
SEAL
CITY OF YELM, WASHINGTON
t
Mayor
ATTEST:
City Clerk
CERTIFICATE OF AUTHENTICATION
Date of Authentication:
This bond is one of the bonds described in the within - mentioned Bond Ordinance and is
one of the Local Improvement District No. I Bonds, 1999 of the City of Yelm.
WASHINGTON STATE FISCAL
AGENCY, Bond Registrar
UZZ
Authorized Officer
ADDITIONAL BOND PROVISIONS
This bond is one of an authorized issue of bonds of like date and tenor, except as to
number, interest rate, and amount in the aggregate principal amount of $1,952,537 issued to
provide a portion of the funds necessary for certain improvements within Local Improvement
District No. 1 of the City. The bonds of this issue are payable solely from the Bond Fund and
out of the Local Improvement District Guaranty Fund of the City. The City has irrevocably
obligated and bound itself to pay into the Bond Fund all assessments levied within Local
Improvement District No. 1. The bonds of this issue are not general obligations of the City. The
bonds of this issue have been designated as "qualified tax - exempt obligations" for purposes of
Section 265(b) of the Internal Revenue Code of 1986, as amended.
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The bonds of this issue maturing December 1, 2000 through and including 2006 are not
callable prior to their scheduled maturity. The bonds of this issue maturing on December 1, 2007
through and including December 1, 2014 shall be called for redemption prior to maturity on any
December 1 on and after December 1, 2004 if sufficient assessment payments are on hand in the
Bond Fund (over and above the amounts necessary to meet the next maturing interest and
principal) and available for such purpose at a price of par plus accrued interest to the date of
redemption from assessment payments only, in order of maturity and in numerical order within a
maturity. All bonds of this issue maturing before December 1, 2016 shall be called for
redemption only after bonds maturing on December 1, 2016 have been redeemed. The bonds of
this issue maturing on December 1, 2016 shall be redeemed from assessment payments only in
numerical order beginning on December 1, 2000 if sufficient assessment payments are on hand
in the Bond Fund (over and above the amounts necessary to meet the next maturing interest and
principal) and available for such purpose.
Notice of any such intended redemption shall be given not less than 30 nor more than
60 days prior to the redemption date by first class mail, postage prepaid, to the registered owner
of any bond to be redeemed at the address appearing on the Bond Register. The requirements of
the Bond Ordinance 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 any bond. Interest
on all of such bonds so called for redemption shall cease to accrue on the date fixed for
redemption unless such bond or bonds so called for redemption are not redeemed upon
presentation made pursuant to such call.
The bonds of this issue are interchangeable for bonds of any authorized denomination of
equal aggregate principal amount and of the same interest rate and maturity upon presentation
and surrender to the Bond Registrar.
The City hereby covenants and agrees with the owner of this bond that it will keep and
perform all the covenants of this bond and of the Bond Ordinance to be by it kept and performed.
Reference is hereby made to the Bond Ordinance for the definitions of defined terms used herein.
Reference to the Bond Ordinance and any and all modifications and amendments thereto
is made for a description of the nature and extent of the security for the bonds, the funds or
revenues pledged, and the terms and conditions upon which the bonds are issued.
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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 Bond Registrar to transfer said bond on the
books kept for registration thereof with full power of substitution in the premises.
DATED:
SIGNATURE GUARANTEED:
Notice: Signature(s) must be
guaranteed pursuant to law.
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.
The following abbreviations, when used in the inscription on the face of the within Bond,
shall be construed as thou_ gh they were written out in full according to applicable laws or
regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
under Uniform Gifts to Minors Act
(State)
Abbreviations may also be used though not in list above.
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Section 8. Sale of the Bonds. The City Council finds that the purchase contract that
has been distributed to the City Council is reasonable and that it is in the best interest of the City
that the Bonds shall be sold upon the conditions set forth in the purchase contract. The City
accepts the purchase contract and authorizes the Mayor to execute the purchase contract and
deliver it to the Martin Nelson & Co., Inc. Seattle , Washington (the "Underwriter "). The Bonds
shall be issued and delivered to the Underwriter upon payment of the purchase price specified in
the purchase contract.
The Mayor and City Treasurer are hereby authorized to review and approve on behalf of
the City the preliminary and final Official Statements relative to the Bonds with such additions
and changes as may be deemed necessary or advisable to them. The Preliminary Official
Statement for the Bonds, dated November 2, 1999, is hereby deemed final for purposes of
Securities and Exchange Commission Rule 15c2 -12. The proper City officials are hereby
authorized and directed to do everything necessary for the prompt execution and delivery of the
Bonds to said purchaser and for the proper application and use of the proceeds of sale thereof.
Section 9. 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 Bonds or any of them in
accordance with their 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 Bond Fund for the payment of the principal of and interest on the Bonds so provided for, and
the owners of such Bonds shall cease to be entitled to any lien, benefit or security of this
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ordinance except the right to receive the funds so set aside and pledged, and such Bonds shall be
deemed not to be outstanding hereunder.
Section 10. Bonds to Remain Tax Exempt; Nonarbitrage. The City covenants with the
owners of the Bonds that it will not use or invest the proceeds of the Bonds or any other funds of
the City for any purpose or in any manner or take any other action that would cause the Bonds to
be "arbitrage bonds" as defined in Section 148 of the Code, or would result in interest on the
Bonds becoming taxable income to the owners thereof under Section 103 of the Code.
Section 11. Bonds Designated Qualified Tax - Exempt Obligations. The Bonds are
hereby designated as "qualified tax - exempt obligations" for purposes of Section 265(b) of the
Code. The City does not anticipate issuing more than $10,000,000 of qualified tax - exempt
obligations during 1999.
Section 12. Lost 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 amount,
date, and tenor to the registered owner thereof upon the 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
Treasurer and the Bond Registrar evidence satisfactory to said City Treasurer and Bond Registrar
that such Bond or Bonds were actually lost, stolen or destroyed and of his/her ownership thereof,
and upon furnishing the City and Bond Registrar with indemnity satisfactory to such City
Treasurer and Bond Registrar.
Section 13. Payment of Assessments and Interest on Assessments. The City has
heretofore levied Assessments for LID No. 1 in the total amount of $1,994,530.55, of which
$41,993.55 was prepaid prior to the passage of this ordinance and the remaining amount,
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$1,952,537.00, is payable in equal annual installments, together with interest and penalties
thereon in the manner and at the times specified in Ordinance No. 674.
The balance of Assessments remaining unpaid at the end of the thirty -day prepayment
period shall bear interest at the rate of 6.20 %.
Section 14. Undertaking to Provide Ongoing Disclosure.
(a) Contract /Undertaking. This section constitutes the City's written
undertaking for the benefit of the owners of the Bonds as required by Section (b)(5) of the Rule.
The City is an obligated person with respect to less than $10,000,000 in Municipal Securities,
including the Bonds.
(b) Financial Statements /Operating Data. The City agrees to provide or
cause to be provided to each person upon request or to the SID, if any, a copy of its latest
publicly available annual financial statements prepared in accordance with the Budget
Accounting and Reporting System prescribed by the Washington State Auditor pursuant to
RCW 43.09.200 (or any successor statute). Such annual statements shall be available upon
request to the office of the City Treasurer, the current address for whom is City of Yelm, 105
Yelm Avenue West, P.O. Box 479, Yelm, WA 98597; telephone number: (360) 458 -3244.
(c) Material Events. The City agrees to provide or cause to be provided, in a
timely manner, to the SID, if any, and to each NRMSIR or to the MSRB notice of the occurrence
of any of the following events with respect to the Bonds, if material:
• Principal and interest payment delinquencies;
• Non - payment related defaults;
• Unscheduled draws on debt service reserves reflecting financial
difficulties;
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• Unscheduled draws on credit enhancements reflecting financial
difficulties;
• Substitution of credit or liquidity providers, or their failure to
perform;
• Adverse tax opinions or events affecting the tax - exempt status of
the Bonds;
• Modifications to the rights of Bond owners;
• Bond calls (optional, contingent or unscheduled Bond calls other
than scheduled sinking fund redemptions for which notice is given
pursuant to Exchange Act Release 34- 23856);
• Defeasances;
Release, substitution or sale of property, securing repayment of the
Bonds; and
• Rating changes.
Solely for purposes of disclosure and not intending to modify this undertaking, the City
advises that the only debt service reserve is the guaranty fund, the Bonds are not rated, there is
no credit enhancement for the Bonds and the City does not intend to provide notice if property in
LID No. 1 changes ownership or an Assessment is paid unless the City is aware that property has
been sold and the Assessment has not been paid and the lien on the property securing the
Assessment has been released (which may occur if the property is sold to a non - exempt owner,
including the federal government or a housing authority).
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(d) Notification Upon Failure to Provide Financial Data. The City agrees to
provide or cause to be provided, in a timely manner, to each NRMSIR or to the MSRB and to the
SID, if any, 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.
(e) Termination /Modification. The City's obligations to provide annual
financial information and notices of material events shall terminate upon the legal defeasance,
prior redemption or payment in full of all of the Bonds. Any provision of this section shall be
null and void if the City (1) obtains an opinion of nationally recognized bond counsel to the
effect that the portion of the Rule that requires that provision is invalid, has been repealed
retroactively or otherwise does not apply to the Bonds and (2) notifies each NRMSIR and the
SID, if any, of such opinion and the cancellation of this section.
The City may amend this section with an opinion of nationally recognized bond counsel
in accordance with the Rule. In the event of any amendment of this section, the City shall
describe such amendment in the next annual report, and shall include a narrative explanation of
the reason for the amendment and its impact on the type (or in the case of a change of accounting
principles, on the presentation) of financial information or operating data being presented by the
City. In addition, if the amendment relates to the accounting principles to be followed in
preparing financial statements, (i) notice of such change shall be given in the same manner as for
a material event under subsection (c), and (ii) 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.
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(f) Bond Owner's Remedies Under This Section. The right of any bondowner
or beneficial owner of Bonds to enforce the provisions of this section shall be limited to a right to
obtain specific enforcement of the City's obligations 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. For purposes of this section, "beneficial owner" means any person who has
the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of,
any Bonds, including persons holding Bonds through nominees or depositories.
Section 15. Application of Proceeds. So much of the proceeds of the sale of the
Bonds as shall be specified by the City shall be paid into the Note Fund and shall be used to pay
and redeem the Notes on the earliest practicable date. Accrued interest, if any, on the Bonds
shall be deposited in the Bond Fund and shall be applied to the payment of interest first coming
due on the Bonds. The balance of the proceeds of the Bonds shall be deposited in the Bond Fund
and shall be used to pay the remaining costs of issuance of the Bonds.
Section 16. Effective Date. This ordinance shall be in full force and effect from and
after its passage, approval and publication as provided by law.
ADOPTED at a special meeting of the City Council of the City of Yelm, held the
16th day of November, 1999.
ATTEST:
CITY CLERK
CITY OF YELM
By c. J
MW OR'
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CLERK'S CERTIFICATE
I, the undersigned, the duly chosen, qualified and acting Clerk of the City of Yelm,
Washington (the "City "), and keeper of the records of the City Council of the City (herein called
the "Council "), DO HEREBY CERTIFY:
1. That the attached Ordinance No. 678 (herein called the "Ordinance ") is a true and
correct copy of an ordinance of the City, as finally passed at a special meeting of the Council
held on the 16th of November, 1999 and duly recorded in my office.
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
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 16th day of
November, 1999.
City Clerk
City of Yelm, Washington
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