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HomeMy WebLinkAboutOrdinance No. 0914AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF MEDINA, WASHINGTON, AUTHORIZING THE ISSUANCE AND SALE OF A LIMITED TAX GENERAL OBLIGATION BOND OF THE CITY IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED $1,350,000 FOR THE PURPOSE OF PROVIDING FUNDS TO PURCHASE PROPERTY. PROVIDING THE FORM OF THE BOND; AUTHORIZING THE SALE OF THE BOND TO U.S. BANK NATIONAL ASSOCIATION� AND DELEGATING THE AUTHORITY TO APPROVE THE FINAL TERMS OF THE BOND. WHEREAS, the City Council (the "Council") of the City of Medina, Washington (the "City"), has deemed it in the best interest of the City and its citizens that the City purchase certain property located within the City and leased to the United States Post Office (the "Project"); and WHEREAS, the City is a noncharter code city organized under the laws of the State of Washington and has the authority to purchase real property for the common benefit pursuant to RCW 35A.1 1.010 and RCW 35A.1 1 .020; and WHEREAS, the City is authorized by RCW 35.21.395 and by chapters 35A.40 and 39.46 RCW to issue limited tax general obligation bonds to pay costs of the Project; and WHEREAS, the City has received an offer (the "Proposal") from U.S. Bank National Association (the "Bank"), to purchase a limited tax general obligation bond of the City in the principal amount of not to exceed $1,350,000 (the "Bond") for the purpose of financing the Project; and WHEREAS, it is deemed necessary and advisable that the City accept the Bank's offer and issue the Bond as set forth herein. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MEDINJ WASHINGTON, DOES 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: Bank means U.S. Bank National Association. Bond means the $1,350,000 City of Medina, Washington, Limited Tax General Obligation Bond, 2014 (Taxable) authorized to be issued pursuant to this ordinance. Bond Fund means the "Bond Redemption Fund" authorized to be created pursuant to Section 8 of this ordinance. Bond Register means the registration records for the Bond maintained by the Bond Registrar. Bond Registrar means the Finance Director, whose duties include registering and authenticating the Bond, maintaining the Bond Register, transferring ownership of the Bond, and paying the principal of and interest on the Bond. City means the City of Medina, Washington, a municipal corporation duly organized and existing under the laws of the State of Washington, City Council or Council means the City Council of the City as the general legislative authority of the City, as the same shall be duly and regularly constituted from time to time. City Manager means the City Manager, or the successor of such office, Default Interest Rate means the Interest Rate plus 3%, Event of Default means (i) the City has failed to pay principal or interest on the Bond within 30 days after the due date specified in the payment schedule attached to the Bond, (ii) the City has failed to comply with any of its obligations or perform any of its duties to the under this ordinance or under the Bond for a period of more than 90 days after the Bank has made written demand of such failure, or (iii) there has been a material representation by the City to the Bank. office. Finance Director means the Finance Director of the City, or the successor of such Interest Rate means the rate of interest set foi th in Section 10. Pr oyeet means the project described in Section 2 of this ordinance, Project Fund means the "Project ect Fund" authorized to be created pursuant to Section 7 Pro of this ordinance, Registered Owner means the person in whose name the Bond is registered on the Bond Register. Reset Date means each five year anniversary from the dated date of the Bond, Rule means the Securities and Exchange Commission's Rule 15c2-12 under the Securities Exchange Act of 1934, as the same may be amended from time to time. M (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 neutral genders and words importing the singular number shall mean and include the plural number and vice versa; (3) Words importing persons shall include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public bodies, as well as natural persons; (4) Any headings preceding the text of the several articles and sections of this ordinance, and any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this ordinance, nor shall they affect its meaning, construction or effect; and (5) All references herein to "articles," "sections" and other subdivisions or clauses are to the corresponding articles, sections, subdivisions or clauses hereof. Section 2. Findings and Authorization of the Project. The City finds that it is in the best interests of the citizens of the City that the City acquires certain property located within the City and used as a United States Post Office building (the "Projeef'), The costs of the Project and the costs of issuing the Bond shall be paid out of the proceeds of the Bond. Section 3. Authorization of the Bond. For the purpose of financing costs of the Project and paying costs of issuance for the Bond, the City hereby authorizes the issuance and sale of its limited tax general obligation bond in the principal amount of not to exceed $1,350,000. The bond shall be designated the "City of Medina, Washington, Limited Tax General Obligation Bond, 2014 (Taxable)," or other such designation as set forth in the Bond and approved by the Finance Director, The Bond shall be dated as of its date of delivery, shall be fully registered as to both principal and interest, shall be in one denomination, and shall mature five years from its dated date; provided, however, principal shall be amortized over a period of not to exceed 20 years, as approved by the Finance Director and set forth in the Bond. The Bond shall bear interest from its dated date or the most recent date to which interest has been paid at the Interest Rate, as the same may be adjusted pursuant to the Proposal and set forth herein. Interest on the principal amount of the Bond shall be calculated per annum on a 30/360 basis, or as otherwise provided in the Bond. Principal of and interest on the Bond shall be payable annually as set forth in the payment schedule attached to the Bond. N At the option of the Bank and with the consent of the City Council, the term of the Bond maybe extended on each five year anniversary of its dated date (each, a "Reset Date") for an additional five year term. Under the terms of the Proposal, the Bank is required to provide the City notice of its intent to extend the term of the Bond at least 120 days' prior to each Reset Date. If the Bank offers to extend the term of the Bond, and the City Council determines that it is in the best interest of the City to approve such extension, the City Council shall authorize the extension by the adoption of a new ordinance or an amendatory ordinance establishing the terms and conditions, including any adjustment to the Interest Rate, for such extension. If the Bank has not offered to extend the term of the Bond, or if the City has determined that it is in the best interest of the City to prepay and redeem the Bond as provided in Section 9 hereof, all principal on the Bond, plus accrued interest, shall become due and payable on the Reset Date. (a) RegistrarlBond Registrar. The Finance Director shall act as Bond Registrar. The Bond Registrar is authorized, on behalf of the City, to authenticate and deliver the Bond if transferred or exchanged in accordance with the provisions of the Bond and this ordinance and to carry out all of the Bond Registrar's powers and duties under this ordinance. (b) Registered Ownership. The City and the Bond Registrar may deem and treat the Registered Owner of the Bond as the absolute owner for all purposes, and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. The Bond shall not be registered with The Depository Trust Company or any other securities depository. Payment of the Bond shall be made only as described in subsection, (e) below. All such payments made as described in subsection (e) below shall be valid and shall satisfy the liability of the City upon the Bond to the extent of the amount so paid. (c) Transfer or Exchange of Registered Ownership. The Bond shall not be transferrable without the consent of the City unless (i) the Bank's corporate name is changed and the transfer is necessary to reflect such change; or (ii) the transferee is a successor in interest of the Bank by means of a corporate merger, an exchange of stock, or a sale of assets. (d) Registration Covenant. The City covenants that, until the Bond has been surrendered and canceled, it will maintain a system for recording the ownership of the Bond that complies with the provisions of Section 149 of the Code. (e) Place and Alledium of Payment. Both principal of and interest on the Bond shall be payable in lawful money of the United States of America. Principal and interest on the Bond shall be payable by check, warrant, ACH transfer or by other means mutually acceptable to the Bank and the City. Upon final payment of principal and interest of the Bond, the Registered Owner shall surrender the Bond for cancellation at the office of the Bond Registrar in accordance with this Section 4 and Section 12. M Section 5. Form of Bond. The Bond shall be in substantially the following form: 101610 OF STATE OF WASHINGTON CITY OF MEDINA INTEREST RATE. -% MATURITY DATE: 20[_] REGISTERED OWNER: U.S. BANK NATIONAL ASSOCIATION PRINCIPAL AMOUNT: ONE MILLION, THREE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS The City of Medina, Washington, a municipal corporation organized and existing under and by virtue of the laws 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, on or before the Maturity Date identified above, the Principal Amount identified above. This bond shall bear interest at the fixed rate stated above (the "Interest Rate"). Interest on this bond shall accrue from its dated date until paid and shall be computed per annum on the principal amount outstanding on a 30/360 basis. Principal of and accrued interest on this bond shall be payable annually on the dates set forth in the payment schedule attached hereto, The Maturity Date of this bond may be extended at the option of U.S. Bank National Association and with the consent of the City for an additional five year term resulting in a final maturity of not to exceed years, as provided in the hereinafter defined Bond Ordinance. Both principal of and interest on this bond shall be payable in lawful money of the United States of America. Principal and interest on this bond shall be payable by check or warrant or by other means mutually acceptable to the Registered Owner and the City. Upon final payment of principal and interest of this bond, the Registered Owner shall surrender this bond for cancellation at the office of the Bond Registrar in accordance with Ordinance No. [9] of the City (the "Bond Ordinance"), This bond is issued pursuant to the Bond Ordinance to finance the costs related to purchasing property (the "Project") and to pay costs of issuance for the bond. Capitalized terms used in this bond have the meanings given such terms in the Bond Ordinance. The City may prepay this bond as provided in the Bond Ordinance. The City has in the Bond Ordinance authorized the creation of a fund to be used for the payment of debt service on this bond, designated as the "Bond Redemption Fund" (the "Bond Fund"), The Bond Fund shall be drawn upon far the sole purpose of paying the principal of and interest on this bond, N 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. Any proceeds of this bond not expended on the Project or costs of issuance shall be pledged to payment of this bond and deposited in the Bond Fund for such purpose. 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 Bond Registrar or its duly designated agent. This bond is issued pursuant to the Constitution and laws of the State of Washington, and duly adopted ordinances of the City. This bond is transferable upon compliance with the 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, to have happened, been done and performed precedent to and in the issuance of this bond exist, 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 bonded indebtedness that the City may incur. IN WITNESS WHEREOF, the City of Medina, 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 I" day f December, 2014� ---� f- NEURM y' � . r Ve"- e �T�- r"-n— Aimee Kellerman, City Clerk EON This bond is registered in the name of the Registered Owner on the books of the City, in the office of the Finance Director of the City (the "Bond Registrar"), as to both principal and interest, as noted in the registration blank below. All payments of principal, of and interest on this bond shall be made by the City from the Bond Fund. Date of Name and Address of Signature of Registration Registered Owner Bond Registrar December _, 2014 PAYMENT SCHEDULE Finance Director Principal and interest on this bond shall be payable as set forth in the following schedule: Date Principal Interest Total Payment Section 6. Execution of Bond. The Bond shall be executed on behalf of the City with the manual or facsimile signatures of the Mayor and City Clerk of the City and the seal of the City shall be impressed, imprinted or otherwise reproduced thereon. Only such Bond as shall bear thereon a Certificate of Authentication in the form earlier 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 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 an officer or officers of the City before the Bond so signed shall have been authenticated or delivered by the Bond Registrar, or issued by the City, such Bond may nevertheless be -7- 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 who at the date of the actual execution of the 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. Application of Bond Proceeds, The City shall establish a fund designated the "Project Fund" (the "Project Fund") into which the proceeds of the Bond shall be deposited. Money in the Project Fund shall be used to pay the costs of the Project and costs of issuance for the Bond. The Finance Director may invest money in the Project Fund in legal investments for City funds. Earnings on such investments shall accrue to the benefit of the Project Fund. Money remaining in the Project Fund after all costs of the Project and costs of issuance for the Bond have been paid shall be pledged to payment of the principal of the Bond and deposited in the Bond Fund for such purpose. Section 8. Pledge of Funds and Credit; General Obligation. The City hereby authorizes the creation of a fund to be used for the payment of debt service on the Bond, designated as the "Bond Redemption Fund" (the "Bond Fund"). No later than the date each payment of principal of or interest on the Bond 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. The City hereby irrevocably covenants and agrees for as long as the Bond is 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 other revenues and money of the City legally available for such purposes, to pay the principal of and interest on the Bond 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 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 Bond will be and is hereby irrevocably set aside, pledged and appropriated for the payment of the principal of and interest on the Bond. 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 Bond when due. Section 9. Right of Prepayment. The Bond may be prepaid, in whole or in part, on any Reset Date without prepayment penalty or fee. If the Bond is prepaid in accordance with this Section 9, interest shall cease to accrue on the date the Bank receives such prepayment. Section 10. Sale of the Bond. The City hereby accepts the Bank's Proposal in substantially the fon-n on file with the City and in accordance with the terms contained in this N ordinance. The Finance Director is hereby authorized to approve the principal amount of the Bond, the Interest Rate, and the amortization period for the Bond so long as: (a) the principal amount of the Bond does not exceed $1,350,000; (b) the amortization period is no later than 20 years; and (c) the Interest Rate does not exceed 4.0%. The Finance Director and other appropriate City officials are hereby authorized and directed to do everything necessary for the prompt issuance, execution and delivery of the Bond and for the proper application and use of the proceeds thereof. The Finance Director is hereby further authorized to execute any documents and to agree to any other terms, conditions and covenants with the Bank that are in the best interest of the City and in accordance with the Proposal. In the event that there are any conflicts or discrepancies between any such documents and this ordinance, this ordinance shall control. Section 11. Ongoing Disclosure; Covenants. (a) Ongoing Disclosure. The Bond is exempt from ongoing disclosure requirements of the Rule. (b) Covenants. So long as the Bond is outstanding, the City hereby covenants and agrees as follows: (1) To maintain rates, fees and revenues of the City at least equal to I M times the annual debt service on all limited tax general obligation debt of the City, including the Bond. Failure to maintain such ratio may result in an automatic adjustment of the Interest Rate to the Default Interest Rate at the option of the Bank; (2) To provide the Bank copies of the City's audited financial statements within 330 days of the end of each fiscal year; (3) To provide the Bank copies of the City's final budget within 45 days after its adoption; (4) To promptly notify the Bank of any development which is likely to have a material, adverse effect on the financial condition of the City; and (5) To provide the Bank financial or other information as may be reasonably requested from time to time. (6) The Bonds shall not be (i) assigned a separate rating by any rating agency, (ii) issued pursuant to any type of offering document or official statement, and (iii) assigned a CUSIP number by;Standard & Poor's CUSIP service, 6 Section 12. Default. If an Event of Default occurs, the Bank may exercise any remedy available at law or in equity, provided that the Bond shall not be subject to acceleration. Subsequent to the occurrence of an Event of Default, unless such Event of Default is waived by the Bank, the Bond shall bear interest at the Default Interest Rate. Should the Bank exercise any remedy at law or in equity with respect to the Bond, the prevailing party in such action shall recover, in addition to all other relief, its reasonable attorney's fees and court costs to be fixed by the court, to the extent permitted by Washington law, Section 13. Lost, Stolen or Destroyed Bond. In case the Bond shall be lost, stolen or destroyed while in the Registered Owner's possession, the Bond Registrar may at the request of the Registered Owner execute and deliver a new Bond of like date, number and tenor to the Registered Owner thereof upon the Registered Owner's paying the expenses and charges of the City and the Bond Registrar in connection therewith and upon its filing with the City written certification that such Bond was actually lost, stolen or destroyed and of its ownership thereof. In the case the Bond shall be lost, stolen, or destroyed while in the Registered Owner's possession, the Registered Owner may elect upon final payment of principal and interest of the Bond to surrender a photocopy of the Bond for cancellation at the office of the Bond Registrar together with written certification that such Bond was actually lost, stolen or destroyed and of its ownership thereof. Section 14. Severability; Ratification. If any one or more of the covenants or agreements provided in this ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements of this ordinance and shall in no way affect the validity of the other provisions of this ordinance or of the Bond. All acts taken pursuant to the authority granted in this ordinance but prior to its effective date are hereby ratified and confirmed. -10- Section 15. Effective Date of Ordinance. This ordinance shall be effective five days after its passage as provided by law. ADOPTED BY THE CITY COUNCIL OF THE CITY OF MEDINA, WASHINGTON, ON THIS I ST DAY OF DECEMBER, 2014. ATTEST/AUTHENTICATED: Aimee Kellerman, City Clerk I Ordinance No. 0 Date of Publication: _jaw_w_ Effective Date: -11- CERTIFICATE 1, the undersigned, the Clerk of the City Council (the "City Council") of the City of Medina, Washington (herein called the "City"), DO HEREBY CERTIFY: 1. That the attached ordinance numbered 9 (herein called the "Ordinance") is a true and correct copy of an ordinance of the City, as finally adopted at a special meeting of the City Council held on the I st day of December, 2014, and duly recorded in my office. 2. That the 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 of the City Council was present throughout the meeting and a legally sufficient number of members of the City Council voted in the proper manner for the passage of said Ordinance; that all other requirements and proceedings incident to the proper adoption of said 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 I st day of December, 2014, T���ILn ain Aimee Kellerman, City Clerk