ORD 99-51 GENERAL OBLIGATION BONDSCITY OF BAINBRIDGE ISLAND, WASFIINGTON
ORDINANCE NO. 99-51
AN ORDINANCE of the City of Bainbridge Island, Washington, relating to
contracting indebtedness; providing for the issuance of $4,900,000 par value of
Limited Tax General Obligation Bonds, 1999, of the City for general City purposes
to provide funds with which to pay costs of a water reservoir, certain road
improvements in the City's Winslow Master Plan of the Comprehensive Plan and
improvements to transportation, parking, drainage and various capital projects
identified in the City's Capital Facilities Plan and purchasing open space property or
development rights to maintain urban agricultural land; fixing the date, form,
maturities, interest rates, terms and covenants of the bonds; establishing a bond
redemption fund and project funds; providing for bond insurance; and approving the
sale and providing for the delivery of the bonds to Dain Rauscher Incorporated of
Seattle, Washington.
PASSED OCTOBER 13, 1999
Prepared by:
Foster Pepper & Shefelman PLLC
1111 Third Avenue, Suite 3400
Seattle, kFA 98101
(206) 447-4400
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CITY OF BA1NBRIDGE ISLAND, WASFIINGTON
ORDNANCE NO. 99-51
AN ORDINANCE of the City of Bainbridge Island, Washington, relating to
contracting indebtedness; providing for the issuance of $4,900,000 par value of
Limited Tax General Obligation Bonds, 1999, of the City for general City purposes
to provide funds with which to pay costs of a water reservoir, certain road
improvements in the City's Winslow Master Plan of the Comprehensive Plan and
improvements to transportation, parking, drainage and various capital projects
identified in the City's Capital Facilities Plan and purchasing open space property or
development rights to maintain urban agriculture land; fixing the date, form,
maturities, interest rates, terms and covenants of the bonds; establishing a bond
redemption fund and project funds; providing for bond insurance; and approving the
sale and providing for the delivery of the bonds to Dain Rauscher Incorporated of
Seattle, Washington.
WHEREAS, the City of Bainbridge Island, Washington (the "City"), is in need of a water
reservoir; certain road improvements as provided in the City's Winslow Master Plan of the
Comprehensive Plan including but not limited to High School Road, Winslow Way West, Grow
Avenue, Madison Avenue, Ericksen Avenue, Wyatt Way and Manitou Beach Drive; and
improvements to transportation, parking, drainage and various other capital projects identified in the
City's Capital Facilities Plan, and of purchasing open space property or development fights to
maintain urban agriculture land, the estimated cost of which exceeds $5, I00,000, and the City does
not have available sufficient funds to pay the cost; and
WHEREAS, MBIA Insurance Corporation, a stock insurance company CMBIA'' or the
"Bond Insurer"), has made a commitment to issue an insurance policy (the "Municipal Bond
Insurance Policy") insuring the payment when due of the principal of and interest on the Bonds as
provided therein, and the City Council of the City deems that the purchase of the Municipal Bond
Insurance Policy is in the best interest of the City: NOW, THEREFORE
THE CITY COUNCIL OF THE CITY OF BAINBRIDGE ISLAND, WASHINGTON,
DO ORDAIN AS FOLLOWS:
Section 1. Debt Capacity. The assessed valuation of the taxable property within the City
as ascertained by the last preceding assessment for City purposes for the calendar year 1998 for
collection in 1999 is $2,266,575,933, and the City has outstanding general indebtedness
evidenced by limited tax general obligation bonds, capital leases, and interagency loans, and
estimated accounts payable in the principal amount of $23,750,382 incurred within the limit of
up to 1-1/2% of the value of the taxable property within the City permitted for general municipal
purposes without a vote of the qualified voters therein, including the amount of indebtedness for
which bonds are authorized herein to be issued is $4,900,000.
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Maturity Interest
Years Amounts Rates
2016 $330,000 5.400%
2017 345,000 5.450
2018 365,000 5.500
2019 385,000 5.500
The above maturity amounts are allocated to paying the respective costs of the Utility Project
and the Road and Capital Projects, including a ratable share of proceeds used to pay the costs of
issuance of the Bonds, in accordance with the scheduled attached hereto as Exhibit A and
incorporated herein by this reference. The life of the Projects to be carried out with the proceeds
of the Bonds exceeds the term of the Bonds.
Section 5. ReGistration and Transfer of Bonds. The Bonds shall be issued only in
registered form as to both principal and interest and shall be recorded on books or records
maintained by the Bond Registrar (the "Bond Register"). The Bond Register shall contain the
name and mailing address of the owner of each Bond and the principal amount and number of
each of the Bonds held by each owner.
Bonds surrendered to the Bond Registrar may be exchanged for Bonds in any authorized
denomination of an equal aggregate principal amount and of the same interest rate and maturity.
Bonds may be transferred only if endorsed in the manner provided thereon and surrendered to
the Bond Registrar. Any exchange or transfer shall be without cost to the owner or transferee.
The Bond Registrar shall not be obligated to exchange or transfer any Bond during the 15 days
preceding any principal payment or redemption date.
The Bonds initially shall be registered in the name of CEDE & CO., as the nominee of
The Depository Trust Company, New York, New York CDTC'). The Bonds so registered shall
be held in fully iramobilized form by DTC as depository in accordance with the provisions of a
Blanket Issuer Letter of Representations dated December 10, 1998, between the City and DTC
(the "Letter of Representations"). Neither the City nor the Bond Registrar shall have any
responsibility or obligation to DTC participants or the persons for whom they act as nominees
with respect to the Bonds regarding accuracy of any records maintained by DTC or DTC
participants of any amount in respect of principal of or interest on the Bonds, or any notice which
is permitted or required to be given to registered owners hereunder (except such notice as is
required to be given by the Bond Registrar to DTC).
For so long as any Bonds are held in fully immobilized form, DTC or its successor
depository shall he deemed to be the registered owner for all purposes hereunder and all
references to registered owners, bondo~vners, bondholders or the like shall mean DTC or its
nominees and shall not mean the o~vners of any beneficial interests in the Bonds Registered
ownership of such Bonds, or any portions thereof, may not thereafter be transferred except: (i) to
any successor of DTC or its nominee, if that successor shall be qualified under any applicable
laws to provide the services proposed to be provided by it; (ii)to any substitute depository.
appointed by the City or such substitute deposito~"s successor; or (iii) to any person if the
Bonds are no Longer held in immobilized furre.
-3-
Upon the resignation of DTC or its successor (or any substitute depository or its
successor) from its functions as depository, or a determination by the City that it no longer
wishes to continue the system of book entry transfers through DTC or its successor (or any
substitute depository or its successor), the City may appoint a substitute depository. Any such
substitute depository shall be qualified under any applicable laws to provide the services
proposed to be provided by it.
If (i) DTC or its successor (or substitute depository or its successor) resigns from its
functions as depository, and no substitute depository can be obtained, or (ii) the City determines
that the Bonds are to be in certificated form, the ownership of Bonds may be transferred to any
person as provided herein and the Bonds no longer shall be held in fully immobilized form.
Section 6. Payment of Bonds. 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
checks or drafts of the Bond Registrar mailed on the interest payment date to the registered
owners at the addresses 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 the Bonds by the registered owners at either of the principal offices of the Bond
Registrar at the option of the owners. Notwithstanding the foregoing, as long as the Bonds are
registered in the name of DTC or its nominee, payment of principal of and interest on the Bonds
shall be made in the manner set forth in the Letter of Representations (as it may be changed).
Section 7. Redemption Provisions and Open Market Purchase of Bonds. Bonds maturing
in the years 2000 through 2009, inclusive, shall be issued without the right or option of the City
to redeem those Bonds prior to their stated maturity dates. The City reserves the right and option
to redeem the Bonds maturing on or after October 1, 2010, prior to their stated maturity dates at
any time on or after October I, 2009, as a whole or in part (within one or more maturities
selected by the City and randomly within a maturity in such manner as the Bond Registrar shall
determine), at par plus accrued interest to the date fixed for redemption.
Portions of the principal amount of any Bond, in installments of $5,000 or any integral
multiple thereof, may be redeemed. If less than all of the principal amount of any Bond is
redeemed, upon surrender of that Bond at either of the principal offices of the Bond Registrar,
there shall be issued to the registered owner, without charge therefor, a new Bond (or Bonds, at
the option of the registered owner) of the same maturity and interest rate in any of the
denominations authorized by this ordinance in the aggregate principal amount remaining
unredeemed
The City further reserves the right and option to purchase any or all of the Bonds in the
open market at any time at any price acceptable to the City plus accrued interest to the date of
purchase
All Bonds purchased or redeemed under this section shall be canceled.
Notwithstanding the foregoing, for so long as the Bonds are registered in the name of
Cede & Co., as nominee of DTC, selection of Bonds ti3r redemption shall be in accordance ~vith
the Letter of Representations (as it may be changed).
Section 8 Notice of Redemption The City shall cause notice of any intended
redemption of Bonds to be given not less than 30 nor more than 60 days prior to the date fixed
ti3r 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 at the time the Bond Registrar prepares
the notice, and the requirements of this sentence shall be deemed to have been fulfilled when
notice has been mailed as so provided, whether or not it is actually received by the owner of any
Bond Interest on Bonds called for redemption shall cease to accrue on the date fixed for
redemption unless the Bond or Bonds called are not redeemed when presented pursuant to the
call. In addition, the redemption notice shall be mailed ~vithin the same period, postage prepaid,
to Moody's Investors Service, Inc., and Standard & Poor's at their offices in New York,
New York, or their successors, to the Bond Insurer at its principal office in Armonk, New York, to
Dain Rauscher Incorporated, at its principal office in Seattle, Washington, or its successor, and to
such other persons and with such additional information as the City shall determine, but these
additional mailings shall not be a condition precedent to the redemption of Bonds.
Notwithstanding the foregoing, for so long as the Bonds are registered in the name of Cede &
Co, as nominee of DTC, notice of redemption shall be given in accordance with the Letter of
Representations (as it may be changed).
Section 9. Failure To Redeem Bonds. If any Bond is not redeemed when properly
presented at its maturity or call date, the City shall be obligated to pay interest on that Bond at
the same rate provided in the Bond from and after its maturity or call date until that Bond, both
principal and interest, is paid in full or until sufficient money for its payment in full is on deposit
in the bond redemption fund hereinat~er created and the Bond has been called for payment by
giving notice of that call to the registered owner of each of those unpaid Bonds.
Section 10. Pledt~e of Taxes. Rates, Char~es and other Revenues. For as long as any of
the Bonds are outstanding, the City irrevocably pledges to include in its budget and levy the
taxes, rates and charges established by and under the conditions and repealers in Ordinances
Nos. 99-47, 99-48, 99-49, 99-53 and 99-54, and ad valorem taxes levied annually within the
constitutional and statutory tax limitations provided by law without a vote of the electors of the
City, including under Ordinances Nos 99-56 and 99-57 (subject to the conditions and repealers
in those ordinances) on all taxable property within the City, in the amounts sufficient, together
with other money legally available and to be used therefor, including gross revenue of the
Waterworks Utility of the City at the rates established under Ordinance No. 99-55 (but only to
the extent of principal and interest requirements of that portion of the Bonds allocated to the cost
of the Utility Project as shown on Exhibit A, which pledge of gross revenue of the Waterworks
Utility is subordinate to payment of operation and maintenance expenses of the Waterworks
Utility and to payment of principal of and interest on any revenue obligations of the City to
which such gross revenue is pledged), together with applicable implementing provisions of
Resolutions Nos. 99-14, 99-26, and 99-27, to pay when due the principal of and interest on the
Bonds, and the full faith, credit and resources of the City are pledged irrevocably for the annual
levv and collection of those taxes and the prompt payment of that principal and interest.
Section I I Form and Execution of Bonds. The Bonds shall be printed or lithographed
on good bond paper in a ti3rm consistent with the provisions of this ordinance and state law and
shall be signed by the Mayor and City Clerk, either or both of whose signatures may be manual
or in Facsimile, and the seal of the City or a t~csimile reproduction thereof shall be impressed or
printed thereon
Only Bonds bearing a Certificate of Authentication in the follo~ving form, manually
signed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the
benefits of this ordinance:
CERTIFICATE OF AUTHENT1CATION
This Bond is one of the fully registered City of Bainbridge Island,
Washington, Limited Tax General Obligation Bonds, 1999, described in the Bond
Ordinance.
WASHINGTON STATE FISCAL AGENCY
Bond Registrar
By
Authorized Signer
The authorized signing of a Certificate of Authentication shall be conclusive evidence that the
Bonds so authenticated have been duly executed, authenticated and delivered and are entitled to the
benefits of this ordinance.
If any officer whose facsimile signature appears on the Bonds ceases to be an officer of
the City authorized to sign bonds before the Bonds bearing his or her facsimile signature are
authenticated or delivered by the Bond Registrar or issued by the City, those Bonds nevertheless
may be authenticated, issued and delivered and, when authenticated, issued and delivered, shall
be as binding on the City as though that person had continued to be an officer of the City
authorized to sign bonds. Any Bond also may be signed on behalf of the City by any person
~vho, on the actual date of signing of the Bond, is an officer of the City authorized to sign bonds,
although he or she did not hold the required office on the date of issuance of the Bonds.
Section 12 Bond Reaistrar. The Bond Registrar shall keep, or cause to be kept, at its
principal corporate trust office, sufficient books for the registration and transfer of the Bonds,
which shall be open to inspection by the City at all times. The Bond Registrar is authorized, on
behalf of the City, to authenticate and deliver Bonds transferred or exchanged in accordance with
the provisions of the Bonds and this ordinance, to serve as the City's paying agent for the Bonds
and to carry out all of the Bond Registrar's powers and duties under this ordinance and City
Ordinance No. 83-10 establishing a system of registration for the City's bonds and obligations.
The Bond Registrar shall be responsible for its representations contained in the Bond
Registrar's 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 depository for and permit any of its officers or directors to
act as members of, or in any other capacity with respect to, any committee formed to protect the
rights of Bond owners.
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apply any money in any other fund or account established for the payment or redemption of the
defeased Bonds to any la~vful purposes as it shall determine.
Notwithstanding anything in this section to the contrary, if the principal of and/or interest
due on the Bonds is paid by the Bond Insurer pursuant to the Municipal Bond Insurance Policy,
the Bonds shall be treated as remaining outstanding for all purposes, not defeased or otherwise
satisfied and shall not be considered paid by the City, and the covenants, agreements and other
obligations of the City to the registered owners of the Bonds shall continue to exist and shall run
to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogated to the rights of those
registered owners
Section 16. Bond Fund and Deposit of Bond Proceeds. There is created and established
in the office of the City Finance Director a special fund designated as the Limited Tax General
Obligation Bond Fund, 1999 (the "Bond Fund"), for the purpose of paying principal of and
interest on the Bonds. Accrued interest on the Bonds, if any, received from the sale and delivery
of the Bonds shall be paid into the Bond Fund. All taxes collected for and allocated to the
payment of the principal of and interest on the Bonds shall be deposited in the Bond Fund.
There also is created and established in the office of the City Finance Director a special
fund designated as the 1999 LTGO Disbursement Sub-Fund of the City's Capital Construction
Fund, (the "Construction/Acquisition Fiind"). The principal proceeds received from the sale and
delivery of the Bonds shall be paid into the Construction/Acquisition Fund and used for the
purposes specified in Section 2 of this ordinance. Until needed to pay the costs of the Project
and costs of issuance of the Bonds, the City may invest principal proceeds temporarily in any
legal investment, and the investment earnings may be retained in the Construction/Acquisition
Fund and be spent for the purposes of that fund.
Section 17. Approval of Bond Purchase Contract. Dain Rauscher Incorporated of
Seattle, Washington, has presented a purchase contract (the "Bond Purchase Contract") to the
City offering to purchase the Bonds under the terms and conditions provided in the Bond
Purchase Contract, which written Bond Purchase Contract is on file with the City Clerk and is
incorporated herein by this reference. The City Council finds that entering into the Bond
Purchase Contract is in the City's best interest and therefore accepts the offer contained therein
and authorizes its execution by City officials.
The Bonds will be printed at City expense and will be delivered to the purchaser in
accordance with the Bond Purchase Contract, with the approving Iegal opinion of Foster
Pepper & Shefelman PLLC, municipal bond counsel of Seattle, Washington, regarding the
Bonds
The proper City officials are authorized and directed to do everything necessary for the
prompt delivery of the Bonds to the purchaser and for the proper application and use of the
proceeds of the sale thereof.
Section 18 Preliminary Official Statement Deemed Final. The City Council has been
provided with copies of a preliminary official statement dated September30, 1999 (the
"Preliminary Official Statement"), prepared in connection with the sale of the Bonds. For the
sole purpose of the Bond purchaser's compliance xvith Securities and Exchange Commission
Rule 15c2-12(b)(1), the City "deems final" that Preliminary Official Statement as of its date,
except for the omission of information as to offering prices, interest rates, selling compensation,
aggregate principal amount, principal amount per maturity, maturity dates, options of
redemption, delivery dates, ratings and other terms of the Bonds dependent on such matters,
Section 19 Undertaking to Provide Continuin~ Disclosure. To meet the requirements of
United States Securities and Exchange Commission ("SEC") Rule 15c2-12(b)(5) (the "Rule"), as
applicable to a participating underwriter for the Bonds, the City makes the following written
undertaking (the "Undertaking") for the benefit of holders of the Bonds:
(a) Undertakina to Provide Annual Financial Information and Notice of
Material Events. The City undertakes to provide or cause to be provided, either
directly or through a designated agent:
(i) To each nationally recognized municipal securities
information repository designated by the SEC in accordance with the Rule
CNRMSIR'') and to a state information depository, if any, established in the
State of Washington (the "SID") annual financial information and operating
data of the type included in the final official statement for the Bonds and
described in subsection (b) of this section ("annual financial information");
(ii) To each NRMSIR or the Municipal Securities Rulemaking
Board CMSRB"), and to the SID, timely notice of the occurrence of any of
the following events with respect to the Bonds, if material: (1) principal and
interest payment delinquencies; (2) non-payment related defaults; (3)
unscheduled draws on debt service reserves reflecting financial difficulties;
(4) unscheduled draws on credit enhancements reflecting financial
difficulties; (5) substitution of credit or liquidity providers, or their failure to
perform; (6) adverse tax opinions or events affecting the tax-exempt status of
the Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond calls
(other than scheduled mandatory redemptions of Term Bonds); (9)
defeasances; (10) release, substitution, or sale of property securing
repayment of the Bonds; and (1 I) rating changes; and
(iii) To each NRMSIR or to the MSRB, and to the S1D, timely
notice of a failure by the City to provide required annual financial
information on or before the date specified in subsection (b) of this section.
(b) Type of Annual Financial Information Undertaken to be Provided.
The annual financial information that the City undertakes to provide in subsection
(a) of this section:
(i) Shall consist of (1) annual financial statements prepared
(except as noted in the financial statements) in accordance with applicable
generally accepted accounting principles promulgated by the Government
Accounting Standards Board ("GASB"), as such principles may be changed
tl-om time to time, which statements shall not be audited, except, however,
that if and when audited financial statements are otherwise prepared and
available to the City they will be provided; (2) authorized, issued and
outstanding balance ofgeneraI obligation bonds; (3) assessed valuation for
the fiscal year; and (4) regular property tax levy rate and regular property
tax levy rate limit for the fiscal year;
(ii) Shall be provided to each NRMSIR and the SID, not later
than the last day of the ninth month after the end of each fiscal year of the
City (currently, a fiscal year ending December 31), as such fiscal year may
be changed as required or permitted by State law, commencing with the
City's fiscal year ending December 31, 1999; and
(iii) May be provided in a single or multiple documents, and may
be incorporated by reference to other documents that have been filed with
each NRMSIR and the S1D, or, if the document incorporated by reference is
a "final official statement" with respect to other obligations of the City, that
has been filed with the MSRB
(c) Amendment of Undertakina. The Undertaking is subject to
amendment after the primary offering of the Bonds without the consent of any
holder of any Bond, or of .ap.y broker, dealer, municipal securities dealer,
participating underwriter, rating agency, NRMSIR, the SD or the MSRB, under the
circumstances and in the manner permitted by the Rule.
The City will give notice to each NRMSIR or the MSRB, and the SID, of the
substance (or provide a copy) of any amendment to the Undertaking and a brief
statement of the reasons for the amendment. If the amendment changes the type of
annual financial information to be provided, the annual financial information
containing the amended financial information will include a narrative explanation of
the efl¥ct of that change on the type of information to be provided.
(d) Beneficiaries. The Undertaking evidenced by this section shall inure
to the benefit of the City and any holder of Bonds, and shall not inure to the benefit
of or create any rights in any other person.
(e) Termination of Undertaking. The City's obligations under this
Undertaking shall terminate upon the legal defeasance of all of the Bonds. In
addition, the City's obligations under this Undertaking shall terminate if those
provisions of the Rule which require the City to comply with this Undertaking
become legally inapplicable in respect of the Bonds for any reason, as confirmed by
an opinion of nationally recognized bond counsel or other counsel familiar with
federal securities laws delivered to the City, and the City provides timely notice of
such termination to each NRMSIR or the MSRB and the S1D
(f) Remedy tBr Failure to Comply with Undertaking. As soon as
practicable after the City learns of any failure to comply with the Undertaking, the
City will proceed ~vith due diligence to cause such noncompliance to be corrected.
No failure by the City or other obligated person to comply with the Undertaking
shall constitute a default in respect of the Bonds The sole remedy of any holder of a
Bond shall be to take such actions as that holder deems necessary, including seeking
an order of specific performance from an appropriate court, to compel the City or
other obligated person to comply with the Undertaking.
(g) Desmnation of Official Responsible to Administer Undertakin.o. The
Finance Director of the City (or such other officer of the City who may in the future
perform the duties of that office) or his or her designee is authorized and directed in
his or her discretion to take such further actions as may be necessary, appropriate or
convenient to carry out the Undenaking of the City in respect of the Bonds set forth
in this section and in accordance with the Rule, including, without limitation, the
tbllowing actions:
(i) Preparing and filing the annual financial information
undertaken to be provided;
(ii) Determining whether any event specified in subsection (a)
has occurred, assessing its materiality with respect to the Bonds, and, if
material, preparing and disseminating notice of its occurrence;
(iii) DeterminiDg whether any person other than the City is an
"obligated person" within the meaning of the Rule with respect to the Bonds,
and obtaining from such person an undertaking to provide any annual
financial information and notice of material events for that person in
accordance with the Rule;
(iv) Selecting, engaging and compensating designated agents and
consultants, including but not limited to financial advisors and legal counsel,
to assist and advise the City in carrying out the Undertaking; and
(v) Effecting any necessary amendment of the Undertaking.
Section 20 Bond Insurance. The City Council finds that it is in the City's best interest to
purchase, and that a savings will result from purchasing, the Municipal Bond Insurance Policy
for the Bonds. The City shall purchase from the Bond Insurer the Municipal Bond Insurance
Policy insuring the prompt payment of the principal of and interest on the Bonds and agrees to
the conditions for obtaining that policy, including the payment of the premium therefor and the
following provisions entitled "Payments under the Policy" required by the Bond Insurer to be
included in this ordinance:
"A. In the event that, on the second Business Day, and again on the
Business Day, prior to the payment date on the Obligations, the Paying Agent [the
Bond Registrar] has not received sufficient moneys to pay all principal of and
interest on the Obligations due on the second fbllowing or following, as the case
may be, Business Day, the Paying Agent shall immediately notify the Insurer or its
designee on the same Business Day by telephone or telegraph, confirmed in writing
by registered or cerdfied mail, of the amount of the deficiency.
'~B. If the deficiency is made up in whole or in part prior to or on the
payment date, the Paying Agent shall so notify the Insurer or its designee.
"C In addition, if the Paying Agent has notice that any Bondholder has
been required to disgorge payments of principal or interest on the Obligation to a
trustee in Ba'nkruptcy or creditors or others pursuant to a final judgment by a court of
competent jurisdiction that such payment constitutes a voidable preference to such
Bondholder within the meaning of any applicable bankruptcy laws, then the Paying
Agent shall notify the Insurer or its designee of such fact by telephone or telegraphic
notice, confirmed in writing by registered or certified mail.
"D. The Paying Agent is hereby irrevocably designated, appointed,
directed and authorized to act as attorney-in-fact for Holders of the Obligations as
follo~vs:
"1. If and to the extent there is a deficiency in amounts required
to pay interest on the Obligations, the Paying Agent shall (a) execute and
deliver to State Street Bank and Trust Company, N.A., or its successors
under the Policy (the "Insurance Paying Agent"), in form satisfactory to the
Insurance Paying Agent, an instrument appointing the Insurer as agent for
such Holders in any legaf'proceeding related to the payment of such interest
and an assignment to the Insurer of the claims for interest to which such
deficiency relates and which are paid by the Insurer, (b) receive as designee
of the respective Holders (and not as Paying Agent) in accordance with the
tenor of the Policy payment from the Insurance Paying Agent with respect to
the claims for interest so assigned, and (c) disburse the same to such
respective Holders; and
"2. If and to the extent of a deficiency in amounts required to pay
principal of the Obligations, the Paying Agent shall (a) execute and deliver
to the Insurance Paying Agent in form satisfactory to the Insurance Paying
Agent an instrument appointing the Insurer as agent for such Holder in any
legal proceeding relating to the payment of such principal and an assignment
to the Insurer of any of the Obligation surrendered to the Insurance Paying
agent of so much of the principal amount thereof as has not previously been
paid or for which moneys are not held by the Paying Agent and available for
such payment (but such assignment shall be delivered only if payment from
the Insurance Paying Agent is received), (b) receive as designee of the
respective Holders (and not as Paying Agent) in accordance with the tenor of
the Policy payment therefor from the Insurance Paying Agent, and (c)
disburse the same to such Holders.
"E Payments with respect to claims for interest on and principal of
Obligations disbursed by the Paying Agent from proceeds of the Policy shall not be
considered to discharge the obligation of the Issuer with respect to such Obligations,
and the Insurer shall become the owner of such unpaid Obligations and claims for
the interest in accordance with the tenor of the assignment made to it under the
provisions of this subsection or otherwise.
"F. Irrespective of whether any such assignment is executed and
delivered, the Issuer and the Paying Agent hereby agree for the benefit of the Insurer
that:
"1. They recognize that to the extent the Insurer makes
payments, directly or indirectly (as by paying through the Paying Agent), on
account of principal of or interest on the Obligations, the Insurer wilI be
subrogated to the rights of such Holders to receive the amount of such
principal and interest from the lssuer, with interest thereon as provided and
solely from the sources stated in this Indenture and the Obligations; and
'~2. They will accordingly pay to the Insurer the amount of such
principal and interest (including principal and interest recovered under
subparagraph (ii) of the first paragraph of the Policy, which principal and
interest shall be deemed past due and not to have been paid), with interest
thereon as provided in this Indenture and the Obligations, but only from the
sources and in the manner provided herein for the payment of principal of
and interest on the Obligations to Holders, and will otherwise treat the
Insurer as the owner of such rights to the amount of such principal and
interest.
"G. In connection with the issuance of additional Obligations, the Issuer
shall deliver to the Insurer a copy of the disclosure document, if any, circulated with
respect to such additional Obligations.
"H. Copies of any amendments made to the documents executed in
connection with the issuance of the Obligations which are consented to by the
Insurer shall be sent to Standard & Poor's Corporation.
"1. The Insurer shall receive notice of the resignation or removal of the
Paying Agent and the appointment of a successor thereto.
"J. The Insurer shall receive copies of all notices required to be
delivered to Bondholders and, on an annual basis, copies of the Issuer's audited
financial statements and Annual Budget.
"Notices: Any notice that is required to be given to a holder of the
Obligation or to the Paying Agent pursuant to the Indenture shall also be provided to
the Insurer. All notices required to be given to the Insurer under the Indenture shall
be in writing and shall be sent by registered or certified mail addressed to MBIA
Insurance Corporation, 113 King Street, Armonk, New York 10504 Attention:
Surveillance."
Section 21. Etti:ctive Date of Ordinance. This ordinance shall take efii~ct and be in force
from and after its passage and five days following its publication as required by law.
PASSED by the City Council and APPROVED by the Mayor of the City of Bainbridge
Island, Washington, at regular open public meet~,eZ~ 13th day of October, 1999.
a ~ ' 'g ,
MaY°r~ ~
ATTEST:
Ci'ty Clerk
APPROVED AS TO FORM:
City Attorney
1, SUSAN P KASPER~ City Clerk of the City of Bainbridge Island, Washin~on, certify
that the attached copy of Ordinance No. 99-51 is a true and correct copy of the original ordinance
passed on the 13th day of October, 1999, as such ordinance appears on the Minute Book of the City.
DATED this /,~/._.Z/ day of October, I999.
City Clerk