RES 2011-17 APPROVING THE SALE AND PROVIDING FOR THE DELIVERY OF THE LTGO REFUNDING BONDSCITY OF BAINBRIDGE ISLAND, WASHINGTON
RESOLUTION NO. 2011-17
A RESOLUTION of the City of Bainbridge Island, Washington,
approving the sale and providing for the delivery of the Limited Tax General
Obligation Improvement and Refunding Bonds, 2011 of the City, in the aggregate
principal amount of $5,700,000; fixing the interest rates, maturity schedule and
other terms of those bonds; and providing for other matters properly relating
thereto.
ADOPTED: August 10, 2011
This document prepared by:
Foster Pepper PLLC
1111 Third Avenue, Suite 3400
Seattle, Washington 98101
(206)447-4400
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Table of Contents
Section 1.
Recitals and Findings.............................................................................................. 1
Section2.
Definitions...............................................................................................................
3
Section 3.
Description of the Bonds........................................................................................
6
Section 4.
Redemption Provisions...........................................................................................
6
SectionS.
Pledge of Taxes.......................................................................................................
7
Section 6.
Pledge of Sewer System Revenue; Flow of Funds .................................................
7
Section 7.
Bond Fund; Project Fund and Deposit of Refunding Bond Proceeds ....................
7
Section 8.
Refunding of the Refunded Bonds..........................................................................
8
Section 9.
Call for Redemption of the Refunded Bonds..........................................................
8
Section 10.
Approval of Sale of the Bonds................................................................................
9
Section 11.
Official Statement................................................................................................... 9
Section 12.
Designation of Bonds as "Qualified Tax -Exempt Obligations" ............................. 9
Section 13.
Undertaking to Provide Continuing Disclosure....................................................
10
Section 14.
Effective Date; Contract; Severability..................................................................
13
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51144080.7
RESOLUTION NO. 2011-17
A RESOLUTION of the City of Bainbridge Island, Washington,
approving the sale and providing for the delivery of the Limited
Tax General Obligation Improvement and Refunding Bonds, 2011
of the City, in the aggregate principal amount of $5,700,000; fixing
the interest rates, maturity schedule and other terms of those
bonds; and providing for other matters properly relating thereto.
THE CITY COUNCIL OF THE CITY OF BAINBRIDGE ISLAND, WASHINGTON,
DOES RESOLVE AS FOLLOWS:
Section 1. Recitals and Findings. Capitalized terms not otherwise defined below are
defined in Section 2 of this resolution.
(a) Authorization and Purpose. In the Bond Ordinance, the City Council previously
authorized the issuance of the Project Bonds and the Refunding Bonds (together, the "Bonds"),
as limited tax general obligation bonds additionally secured by a pledge of available Sewer
System Revenue, for the purpose of (1) paying or reimbursing the City for the costs of the
Project, including without limitation repayment of interfund loans and the City's Sewer Revenue
Bond Anticipation Note (Line of Credit), 2010 (the "Note"); (2) carrying out a current refunding
of the City's outstanding Limited Tax General Obligation Improvement and Refunding Bonds,
1998 (the "Refunded Bonds"); and (3) paying the costs of issuance and sale of the Bonds and the
administrative costs of carrying out the Refunding Plan.
(b) Debt Capacity. The value of the taxable property within the City as ascertained
by the last preceding assessment for City purposes for taxes levied for collection in the calendar
year 2011 is $5,642,373,993. The City has outstanding general indebtedness evidenced by
limited tax general obligation bonds and capital leases in the principal amount (excluding the
Refunded Bonds) of $20,587,755 incurred within the limit of up to 1117% of the value of the
taxable property within the City permitted for general municipal purposes without a vote of the
qualified voters. The City has, unlimited tax general obligation bonds in the principal amount of
$6,390,000 incurred within the additional limit of up to 2%% of the value of the taxable property
within the City for parks, open space and economic development purposes, issued pursuant to a
vote of the qualified voters of the City.
(c) The 2010 Note. In order to provide interim financing for the Project, the City
authorized the issuance of the Note pursuant to the Bond Ordinance, Resolution No. 2009-08 of
the City Council adopted on April 22, 2009, and Resolution No. 2010-05 of the City Council
adopted on January 13, 2010. A portion of the proceeds of the Project Bonds will be used to
refund the outstanding Note, which will be accomplished by the payment and redemption on the
closing date of all of the outstanding principal of and accrued interest on the outstanding Note
(the "Note Redemption Plan"). The City Council finds that the carrying out of the Note
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Redemption Plan shall discharge all obligations of the City with respect to the Note under the
2010 Note Legislation and is in the best interests of the City and its tax and ratepayers.
(d) The 1998 Refunding. The Refunding Bonds are authorized to be issued in the
amount necessary to carry out the Refunding Plan.
(1) The Refunded Bonds. Pursuant to the 1998 Bond Ordinance, the City
previously issued its 1998 Bonds for various purposes, including paying the cost of
refunding, paying and redeeming the callable portion of the City's outstanding Limited
Tax General Obligation Bonds, 1994 (which were issued to pay a part of the cost of
improvements to the City's Sewage Treatment Plant) and pledged to the refunding
portion of the 1998 Bonds the net revenue of the City's combined Waterworks Utility. In
the 1998 Bond Ordinance, the City reserved the right to redeem the 1998 Bonds prior to
their maturity on or after December 1, 2008, at a price of par plus accrued interest to the
date fixed for redemption. There are presently outstanding $860,000 principal amount of
the 1998 Bonds, maturing on December 1 of each of the years 2011 through 2014. The
outstanding 1998 Bonds are allocated to. the refunding portion of that issue and are
secured by a pledge of the City's combined Waterworks Utility Revenue.
(2) Authorization for the Refunding. In order to effect the segregation of the
utilities at the earliest time practicable, the City Council on June 8, 2011, passed the
Separate Utility Ordinance, authorizing the refunding of all outstanding limited tax
general obligation bonds that are secured by a pledge of combined Waterworks Utility
Revenues, including the 1998 Bonds, without regard to the level of savings to be
achieved.
(3) Findings with Respect to the Refunding. The City Council finds that the
Refunding Plan is necessary in order to accomplish a change in covenants such that the
combined Waterworks Utility may be segregated into its component utility systems.
Further, in order to carry out the Refunding Plan in the manner that will be most
advantageous to the City, the City Council finds that: (i) the money to be deposited with
the Refunding Trustee in accordance with the Refunding Plan will discharge and satisfy
the obligations of the City under Ordinance No. 98-54 with respect to the Refunded
Bonds; and (ii) the Refunded Bonds shall no longer be deemed outstanding under such
ordinance immediately upon the deposit of such money with the Refunding Trustee.
(4) The Refunding Trust Agreement. The City Council finds that it is
necessary and advisable to enter into the Refunding Trust Agreement with the Refunding
Trustee and to direct the Refunding Trustee to accomplish the refunding out of the
proceeds of the Refunding Bonds.
(e) The Purchase Offer. The Purchaser has offered to purchase the Bonds under the
terms and conditions provided in the Bond Purchase Contract, which is on file with the City
Finance Director. The Council finds that entering into the Bond Purchase Contract is in the
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City's best interest and therefore accepts the offer in that contract and authorizes its execution by
the City Manager.
Section 2. Definitions. The definitions provided in this section apply throughout this
resolution. Capitalized terms used but not otherwise defined in this resolution have the meanings
given in the Bond Ordinance, which definitions are incorporated by this reference.
(a) "1998 Bond Ordinance" means Ordinance No. 98-54 of the City, passed on
December 10, 1998.
(b) "2010 Note Legislation" means the Bond Ordinance, together with Resolution
No. 2009-08 and Resolution No. 2010-05 of the City.
(c) "Bond Fund" means that special fund of the City designated as the Limited Tax
General Obligation Bond Fund, 2011, established for the purpose of paying principal and interest
on the Bonds.
(d) "Bond Legislation" means the Bond Ordinance, the Separate Utility Ordinance
and this Bond Sale Resolution.
(e) "Bond Ordinance means Ordinance No. 2009-02 of the City, passed on
March 11, 2009, as amended by Ordinance No. 2009-07, passed on April 22, 2009.
(f) "Bond Purchase Contact" means the bond purchase contract between the City and
the Purchaser provided for in Section 10 of this resolution.
(g) "Bonds" means the Limited Tax General Obligation Improvement and Refunding
Bonds, 2011, authorized to be issued pursuant to, under the authority of and for the purposes
provided in the Bond Legislation.
(h) "Bond Sale Resolution" means this resolution of the City Council approving and
,fixing the par amount, date, form, maturities, interest rates, terms and covenants of the Bonds
and approving their issuance and sale to the Purchaser.
(i) "Maintenance and Operation Expense of the Sewer System" means all reasonable
expenses incurred by the City in causing the Sewer System to be operated and maintained in
good repair, working order and condition, including without limitation: payments (other than
payments out of proceeds of Future Parity Bonds) into reasonable reserves in any revenue
account of the Sewer System for items of operating or maintenance expense the payment of
which is not immediately required; payments of premiums for insurance on the Sewer System;
payments of any State -imposed taxes; payments made to any other municipal corporation for
sewage collection, treatment and disposal services in the event the City enters into one or more
contracts for such services; and payments with respect to any other expenses of the Sewer
System that are properly treated as maintenance and operation expenses under generally accepted
accounting principles applicable to municipal corporations such as the City. The term does not
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include any depreciation or capital additions or capital replacements to the Sewer System or any
taxes levied or imposed by the City or payments made in lieu of taxes to the City.
(j) "Net Sewer System Revenue" means Sewer System Revenues less Maintenance
and Operation Expense of the Sewer System.
(k) "Note" means the Sewer Revenue Bond Anticipation Note (Line of Credit), 2010,
of the City in a principal amount not to exceed $1,900,000, authorized by the 2010 Note
Legislation, issued to provide interim financing for the Project, the repayment of which will be
accomplished with proceeds from the sale and issuance of the Project Bonds.
(1) "Note Redemption Plan" means the application of proceeds of the Project Bonds
to the payment and redemption on the closing date of all of the outstanding principal of and
accrued interest on the Note.
(m) "Refunded Bonds" means the outstanding 1998 Bonds allocated to utility purposes
(as shown in the Bond Ordinance), which are presently outstanding in the aggregate principal
amount of $860,000, the refunding of which has been provided for by the Bond Legislation and
the Separate Utility Ordinance.
(n) "Refunding Plan" means:
(1) The deposit with the Refunding Trustee of proceeds of the Refunding
Bonds (together with proceeds of the Project Bonds allocated to paying the cost of
issuance and other money of the City, if necessary) in an amount sufficient to call, pay
and redeem the Refunded Bonds on September 23, 2011 and to pay the cost of issuance
of the Bonds and the administrative costs of carrying out the Refunding Plan;
(2) The application of such proceeds to the call, payment and redemption on
September 23, 2011 of all the Refunded Bonds at a price of par plus interest accrued to
that date; and
(3) The payment of the administrative costs of carrying out the foregoing
elements of the Refunding Plan and the payment of costs of issuing the Bonds. Any
excess amounts remaining shall then be transferred to the City for deposit into the Bond
Fund to be used to pay interest on the first interest payment date.
(o) "Refunding Trust Agreement" means a Refunding Trust Agreement between the
City and the Refunding Trustee in substantially the form attached as Exhibit B and incorporated
by this reference.
(p) "Refunding Trustee" means The Bank of New York Mellon Trust Company,
N.A., of Seattle, Washington, serving as trustee or escrow agent or any successor trustee or
escrow agent.
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(q) "Rule", means Rule 15c2 -12(b)(5) of the United States Securities and Exchange
Commission.
(r) "Separate Utility Ordinance" means Ordinance No. 2011-07 of the City passed on
.lune 8, 2011, segregating the City's existing water, sewer and stormwater utilities.
(s) "Sewer Fund" means the special fund previously established for revenues and
expenditures .allocable to the Sewer System, which was separated from the combined
Waterworks Utility pursuant to the Separate Utility Ordinance.
(t) "Sewer System" means the City's sewer utility, as separated from the combined
Waterworks Utility pursuant to the Separate Utility Ordinance.
(u) "Sewer System Obligation" means any obligation, whether issued previously or in
the future, that is payable solely from and secured by a pledge of the Sewer System Revenues,
and which has a lien and charge that is prior and superior to any other lien and charge on Net
Sewer System Revenues and Sewer ULID Assessments, if any. Sewer System Obligations are
not general obligations of the City and do not include any portion of any obligation secured by a
general obligation pledge.
(v) "Sewer System Revenues" means the gross revenue of the Sewer System,
including: all of the earnings and revenues received by the City from the maintenance and
operation of the Sewer System; all earnings from the investment of money in a debt service fund
established for the payment of any outstanding Sewer System Obligations; and all connection
and capital improvement charges collected for the purpose of defraying the costs of capital
facilities of the Sewer System. The following are excluded from Sewer System Revenues:
Sewer ULID Assessments; government grants (including any direct subsidy payments received
or to be received with respect to bonds issued as tax credit bonds); proceeds from the sale of
Sewer System property; amounts collected in respect of city or state taxes imposed on the Sewer
System; principal proceeds of bonds or other obligations and earnings or proceeds from any
investments in a trust, defeasance or escrow fund created to defease or refund Sewer System
obligations (until commingled with other earnings and revenues of the Sewer System) or held in
a special account for the purpose of paying a rebate to the United States Government under the
Code; and earnings of a separate utility system that may be created by the City (if any).
(w) "Sewer ULID Assessments" means, for the purposes of this resolution, all
assessments levied and collected in a ULID of the City created for the acquisition or construction
of additions to and betterments and extensions of the Sewer System if (and only if) those
assessments are pledged to be paid into a debt service fund established for the payment of Sewer
System Obligations, not including any prepaid assessments paid into a construction fund or
account. Sewer ULID Assessments shall include installments thereof and any interest or
penalties thereon.
(x) "Subordinate Obligation" means any borrowing, whether issued previously or in
the future, that is payable from and has a lien and charge on the Net Sewer System Revenue and
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Sewer ULID Assessments (if any) that is subordinate to the lien and charge with respect to any
Sewer System Obligations, but superior to any Public Works Trust Fund Loans.
(y) "Undertaking" means the City's written undertaking set forth in Section 13 of this
resolution, undertaken for the benefit of holders of the Bonds, in order to meet the requirements
of the Rule as applicable to a participating underwriter for the Bonds.
Section 3. Description of the Bonds. The Bonds shall be issued in the aggregate principal
amount of $5,700,000. They shall bear interest (computed on the basis of a 360 -day year of
twelve 30 -day months) payable semiannually on each June 1 and December 1, commencing
December 1, 2011, to maturity or earlier redemption, at the rates, payable on the dates and
maturing at the times and in the amounts set forth in the maturity schedule attached as Exhibit A
to this Sale Resolution, which is incorporated by this reference. The Bonds shall conform in all
other respects to the terms and conditions specified in the Bond Legislation and the Bond
Purchase Contract. The various maturities of the Bonds are designated as Project Bonds or
Refunding Bonds as set forth in the allocation table shown in Exhibit A, which is incorporated
herein by this reference.
Section 4. Redemption Provisions. The Bonds maturing on or prior to December 1, 2020
shall be issued without the right or option of the City to redeem such Bonds prior to their stated
maturity dates. The City reserves the right and option to redeem the Bonds maturing on or after
December 1, 2021 prior to their stated maturity dates at any time on or after June 1, 2021, 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 a price of par plus, accrued
interest to the date fixed for redemption.
The Bonds maturing in the years 2026 and 2030 are Term Bonds, and if not redeemed under the
optional redemption provisions set forth in the Bond Legislation or purchased in the open market
under the provisions in the Bond Legislation, shall be called for redemption randomly (in such
manner as the Bond Registrar shall determine) at a price of par, plus accrued interest to the date
fixed for redemption, on December 1 in years and amounts .as follows:
2026 Term Bond
Mandatory
Redemption Years
2024
2025
2026*
*Maturity
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W
Mandatory
Redemption Amounts
$275,000
290,000
300,000
2030 Term Bond
Mandatory
Redemption Years
Mandatory
Redemption Amounts
2027
$310,000
2028
325,000
2029
335,000
2030*
350,000
*Mahirity
Section 5 Pledge of Taxes. For as long as any of the Bonds are outstanding, the City
irrevocably pledges to include in its budget and annually to levy taxes within the constitutional
and statutory tax limitations provided by law without a vote of the electors of the City on all of
the taxable property within the City in an amount sufficient, together with other money legally
available and to be used therefor, to pay when due the principal of and interest on the Bonds. The
full faith, credit and resources of the City are pledged irrevocably for the annual levy and
collection of those taxes and the prompt payment of that principal and interest.
Section 6. Pledge of Sewer System Revenue; Flow of Funds. For as long as any of the
Bonds are outstanding, the City further pledges to use available Net Sewer System Revenues
after satisfaction of any covenant or pledge with respect to any Sewer System Obligation, to
repay debt service on the Bonds. The Bonds shall constitute Subordinate Obligations and
nothing herein shall prevent the City from issuing Sewer System Obligations with a lien prior
and superior to or on a parity with the lien with regard to the Bonds. In accordance with the
Bond Ordinance, Sewer System Revenues shall be available to pay, in the following order: (a)
Maintenance and Operation Expenses of the Sewer System; (b) the principal of and interest on
all outstanding Sewer System Obligations, if any, for which payment has not otherwise been
provided and all amounts that the City is obligated to set aside into a bond fund (including any
debt service fund and any reserve fund) securing payment of such Sewer System Obligations,
and all other payment obligations related thereto; (c) payment of the principal of and interest on
(in the following order): (i) Sewer System Obligations, (ii) Subordinate Obligations, and (iii) all
amounts that the City is obligated to set aside in the debt service fund and into a reserve fund (if
any) established for payment of such bonds; and (d) for the payment of any and all other
expenses of the Sewer System that the City is obligated to pay from Net Sewer System
Revenues, including without limitation any Public Works Trust Fund Loans.
Section 7. Bond Fund; Project Fund and Deposit of Refunding Bond Proceeds.
(a) Bond Fund. The Bond Fund is created and established as a special fund for the
purpose of paying principal of and interest on the Bonds. All taxes collected for and other money
allocated to the payment of the principal of and interest on the Bonds shall be deposited in the
Bond Fund.
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(b) Project Fund and Deposit of Refunding Bond Proceeds. The proceeds of the
Project Bonds shall be deposited in the Project Fund and used (1) to carry out the current
refunding of the Note in accordance with the Note Redemption Plan, and (2) to pay or reimburse
the City for costs of the Project (including repayment of interfund loans), and (3) to be deposited
with the Refunding Trustee to be used to pay the costs of issuance allocated to the Project Bonds.
The proceeds of the Refunding Bonds shall be deposited with the Refunding Trustee, to be used
to carry out the Refunding Plan in accordance with Section 8 of this resolution.
Section 8. Refunding of the Refunded Bonds.
(a) Appointment of Refunding Trustee. The Bank of New York Mellon Trust
Company, N.A., is appointed Refunding Trustee.
(b) Use of Bond Proceeds; Acquisition of Acquired Obligations. The proceeds of the
sale of the Refunding Bonds shall be deposited with the Refunding Trustee and used to discharge
the obligations of the City relating to the Refunded Bonds under Ordinance No. 98-54 by
providing for the payment of the ,amounts required to be paid by the Refunding Plan. Any Bond
proceeds or other money deposited with the Refunding Trustee not needed for the payment of the
amount required to be paid by the Refunding Plan and to pay the costs of issuance of the Bonds
shall be returned to the City at the time of delivery of the Bonds to the initial purchaser thereof
and deposited in the Bond Fund to pay interest on the Bonds on the first interest payment date.
(c) Administration of Refunding Plan. The money deposited with the Refunding
Trustee shall be held irrevocably, invested and applied in accordance with the provisions of
Ordinance No. 98-54, the Bond Legislation, chapter 39.53 RCW and other applicable statutes of
the State of Washington and the Refunding Trust Agreement. All necessary and proper fees,
compensation, and expenses of the Refunding Trustee for the Bonds and all other costs
incidental to the setting up of the escrow to accomplish the refunding of the Refunded Bonds and
costs related to the issuance and delivery of the Bonds, including bond printing, verification fees,
Bond Counsel and disclosure counsel fees, financial advisory fees, and other related expenses,
shall be paid out of the proceeds of the Bonds.
(d) Authorization for Refunding Trust Agreement. To carry out the Refunding Plan
provided for by this resolution, the City Manager is authorized and directed to execute and
deliver to the Refunding Trustee the Refunding Trust Agreement. Prior to executing the
Refunding Trust Agreement, the City Manager is authorized to make such changes as are
necessary or convenient to the carrying out of the Refunding Plan as set forth in the Bond
Legislation and the Separate Utility Ordinance, and to assure that the escrow provided for in the
Refunding Trust Agreement and the Bonds are in compliance with the requirements of federal
law governing the exclusion of interest on the Bonds from gross income for federal income tax
purposes.
Section 9. Call for Redemption of the Refunded Bonds and the 2010 Note. The City
calls for redemption on September 23, 2011, all of the Refunded Bonds at par plus accrued
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interest to that date. The City also calls for redemption, on the date of delivery of the Bonds, the
outstanding Note, at a price of the total outstanding principal amount plus accrued interest to that
date. Such call for redemption shall be irrevocable after the delivery of the Bonds to the
Purchaser. The proper City officials are authorized and directed to give or cause to be given
such notices as required, at the times and in the manner required, pursuant to Ordinance No. 98-
54 and the 2010 Note Legislation in order to effect the redemption prior to their maturity of the
Refunded Bonds.
Section 10. Approval of Sale of the Bonds. The Purchaser has presented the Bond Purchase
Contract to the City offering to purchase the Bonds under the terms and conditions provided in
therein. The City Council finds that entering into the Bond Purchase Contract is in the City's
best interest and therefore accepts the offer in that contract and authorizes its execution by the
City Manager. 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 legal opinion of Foster
Pepper PLLC, municipal bond counsel of Seattle, Washington, regarding the Bonds. The City
Manager and the Finance Director and each of the other appropriate officers of the City are each
authorized and directed to do everything as in their judgment may be necessary, desirable, or
appropriate in order to ensure payment of the costs of issuance of the Bonds, as set forth in the
Refunding Trust Agreement and to otherwise carry out the terms and provisions of, and complete
the transactions contemplated by, the Bond Ordinance and this resolution.
Section 11. Official Statement. The City Council and appropriate City officials have
reviewed the Preliminary Official Statement, dated August 3, 2011, prepared in connection with
the sale of the Bonds. For the sole purpose of the Underwriter's compliance with paragraph
(b)(1) of Rule 15c2-12, the City "deems final" that Preliminary Official Statement as of its date
(except for the omission of information permitted to be omitted by Rule 15c2-12), and ratifies
the distribution by the Purchaser of that Preliminary Official Statement to potential purchasers of
the Bonds.
The City authorizes and approves the preparation, execution by City officials and delivery to the
Purchaser of a final Official Statement for the -Bonds, in the form of the Preliminary Official
Statement, with such modifications and amendments thereto as shall be deemed necessary or
desirable by the City. The City authorizes and approves the distribution by the Purchaser of that
final Official Statement to purchasers and potential purchasers of the Bonds.
Section 12. Designation of Bonds as "Qualified Tax -Exempt Obligations." The City has
determined and certifies that (a) the Bonds are not "private activity bonds" within the meaning of
Section 141 of the Code; (b) the reasonably anticipated amount of tax-exempt obligations (other
than private activity bonds and other obligations not required to be included in such calculation)
which the City and any entity subordinate to the City (including any entity that the City controls,
that derives its authority to issue tax-exempt obligations from the City, or that issues tax-exempt
obligations on behalf of the City) will issue during the calendar year in which the Bonds are
issued will not exceed $10,000,000; and (c) the amount of tax-exempt obligations, including the
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51144080.7.
Bonds, designated by the City as "qualified tax-exempt obligations" for the purposes of Section
265(b)(3) of the Code during the calendar year in which the Bonds are issued does not exceed
$10,000,000. The City designates the Bonds as a "qualified tax-exempt obligations" for the
purposes of Section 265(b)(3) of the Code.
Section 13. Undertaking to Provide Continuing Disclosure. To meet the requirements of
the Rule, as applicable to a participating underwriter for the Bonds, the City makes the following
written Undertaking for the benefit of holders of the Bonds:
(a) Undertaking to Provide Annual Financial Information and Notice of Listed
Events. The City undertakes to provide or cause to be provided, either directly or through a
designated agent, to the MSRB, in an electronic format as prescribed by the MSRB,
accompanied by identifying information as prescribed by the MSRB:
(1) 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");
(2) Timely notice (not in excess of ten business days after the occurrence of
the event) of the occurrence of any of the following events with respect to the Bonds:
1. principal and interest payment delinquencies;
2. non-payment related defaults, if material;
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, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notice of Proposed Issue
(IRS Form 5701 — TEB) or other material notices or determinations with
respect to the tax status of the Bonds;
7. modifications to rights of holders of the Bonds, if material;
8. bond calls (other than scheduled mandatory redemptions of Term Bonds),
if material, and tender offers;
9. defeasances;
10. release, substitution, or sale of property securing repayment of the Bonds,
if material;
11. rating changes;
12. bankruptcy, insolvency, receivership or similar event of the City described
in Rule 15c2-12;
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13. the consummation of a merger, consolidation, or acquisition involving the
City or the sale of all or substantially all of the assets of the City other than
in the ordinary course of business, the entry into a definitive agreement to
undertake such an action or the termination of a definitive agreement
relating to any such actions, other than pursuant to its terms, if material;
and
14. appointment of a successor or additional trustee or the change of name of
a trustee, if material.
(3) 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:
(1) Shall consist of (i) annual financial statements prepared (except as noted
in the financial statements) in accordance with generally accepted accounting principles
applicable to governmental units such as the City, as such principles may be changed
from time to time and as permitted by State law, 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; (ii) a statement of authorized, issued and
outstanding balance of general obligation debt; (iii) the assessed value of property within
the City subject to ad valorem taxation; (iv) ad valorem tax levy rates and amounts and
percentage of taxes collected; and (v) a statement of revenues and expenditures for the
sewer fund;
(2) Shall be provided 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, 2010; and
(3) May be provided in a single or multiple documents, and may be
incorporated by specific reference to documents available to the public on the Internet
website of the MSRB or filed with the SEC.
(c) Amendment of Undertaking. The Undertaking is subject to amendment after the
primary offering of the Bonds without the consent of any holder of any Bond, or of any broker,
dealer, municipal securities dealer, participating underwriter, rating agency or the MSRB, under
the circumstances and in the manner permitted by the Rule. The City will give notice to the
MSRB 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 effect of that change on the type
of information to be provided.
-11-
51144080.7
(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 the MSRB.
(f) Remedy for 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 with 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) Designation of Official Responsible to Administer Undertaking. The Finance
Director 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 Undertaking of
the City in respect of the Bonds set forth in this section and in accordance with the Rule,
including, without limitation, the following actions:
(1) Preparing and filing the annual financial information undertaken to be
provided;
(2) Determining whether any event specified in subsection (a) has occurred,
assessing its materiality, where necessary, with respect to the Bonds, and .preparing and
disseminating any required notice of its occurrence;
(3) Determining 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
listed events for that person in accordance with the Rule;
(4) 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
(5) Effecting any necessary amendment of the Undertaking.
-12-
51144080.7
Section 14. Effective Date; Contract; Severability. This resolution shall take effect
immediately upon passage. The covenants contained in this resolution and the Bond Ordinance
shall constitute a contract between the City and the registered owners of the Bonds. If any one or
more of the covenants or agreements to be performed on the part of the City shall be declared by
any court of competent jurisdiction and final appeal (if any appeal be taken) 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 in this resolution and shall in
no way affect the validity of the other provisions of this resolution, the Bond Legislation or of
the Bonds.
PASSED BY THE CITY COUNCIL this 10th day of August, 2011.
APPROVED BY THE MAYOR this 10th day of August, 2011.
Kirst n flytopoulos, Mayor
ATTEST:
Rosalind D. Lassoff, City Clerk
APPROVED AS TO FORM:
/,t4
F ste epper PLLC, Bon cWounsel
FILED WITH THE CITY CLERK: August 5, 2011
PASSED BY THE CITY COUNCIL: August 10, 2011
RESOLUTION NUMBER: 2011-17
-13-
51144080.7'
Exhibit A
Maturity Schedule
$5,700,000 Limited Tax General Obligation Improvement and Refunding Bonds, 2011
(Wastewater Treatment Plant)
Maturity
(Dec. 1)
Principal
Amount
Interest
Rate
Maturity
(Dec. 1)
Principal
Amount
Interest
Rate
2011
$210,000
2.00%
2019
$ 230,000
4.00%
2012
405,000
2.00
2020
235,000
4.00
2013
410,000
2.00
2021
245,000
4.00
2014
425,000
2.00
2022
255,000
4.00
2015
200,000
3.00
2023
265,000
4.00
2016
205,000
3.00
2026*
865,000
4.00
2017
210,000
3.00
2030*
1,320,000
4.00
2018
220,000
4.00
.2023
265,000
-
*Tenn Bond
2024
275,000
-
275,000
2025
Various Purpose Bond Allocation Schedule
Year of Maturity or
Mandatory Redem tion
Allocation of Principal
Project Bonds Refunding Bonds
Total
Principal Due
2011
-
$210,000
$210,000
2012
$190,000'
215,000
405,000
2013
195,000
215,000
410,000
2014
195,000
230,000
425,000
2015
200,000
-
200,000
2016
205,000
-
205,000
2017
210,000
-
210,000
2018
220,000
-
220,000
2019
230,000
-
230,000
2020
235,000
-
235,000
2021
245,000
-
245,000
2022
255,000
-
255,000
.2023
265,000
-
265,000
2024
275,000
-
275,000
2025
290,000
-
290,000
2026
300,000
-
300,000
2027
310,000
-
310,000
2028
325,000
-
325,000
2029
335,000
-
335,000
2030
350,000
-
350,000
TOTAL
$4,830,000
$870,000
$5,700,000
1 $1,009.66 of the Bonds maturing in 2012 and shown under the column labeled "Project Bonds" (or such other amount as may
be necessary to provide part of the cost of carrying out the Refunding Plan) shall be added to the amounts under the heading
"Refunding Bonds" and applied to carry out the Refunding Plan.
EXHIBIT A
51144080.7
Exhibit B
REFUNDING TRUST AGREEMENT
THIS AGREEMENT is made and entered into as of the 24th day of August, 2011, by and
between the CITY OF BAINBRIDGE ISLAND, WASHINGTON (the "City"), a municipal
corporation, and THE BANK OF NEW YORK MELLON TRUST COMPANY N.A. of Seattle,
Washington (the "Refunding Trustee"). Capitalized terms used and not otherwise defined herein
have the meanings given in Ordinance No. 2009-02, as amended by Ordinance No. 2009-07, and
Resolution No. 2011-17 of the City (together, the "Bond Legislation").
In consideration of the mutual covenants hereinafter contained and for the benefit of the
City, the City and the Refunding Trustee agree as follows:
Section 1. Recitals.
1.1 There is now outstanding $860,000 par value of the City's Limited Tax General
Obligation Improvement and Refunding Bonds, 1998, maturing on December 1 of each of the
years 2011 through 2014, inclusive, and bearing interest at various rates ranging from 4.30% to
4.50% (the "Refunded Bonds").
1.2 By Ordinance No. 98-54 (the "Refunded Bond Ordinance"), the City reserved the
right to redeem the Refunded Bonds prior to their maturity on or after December 1, 2008, at a
price of par plus accrued interest to the date fixed for redemption.
1.3 In the Bond Legislation that approved the issuance and sale of the City's
$5,700;000 par value Limited Tax General Obligation Improvement and Refunding Bonds, 2011
(the "Bonds"), and in Ordinance No. 2011-07 of the City that segregated the City's waterworks
utility into its component utility systems (the "Separate Utility Ordinance"), the City found and
determined that the Refunded Bonds may be refunded out of a portion the proceeds of the sale of
the Bonds, in order to accomplish a change in bond covenants.
1.4 The payment, through the current refunding of the Refunded Bonds, will be
accomplished pursuant to this Agreement and the Bond Legislation, which documents provide
for and, for the purpose of Sections 103, 148, and 149(d) of the Internal Revenue Code of 1986,
as amended (the "Code"), are to be considered as the Refunding Plan, by:
(a) Immediately upon issuance of the Bonds, the deposit of a portion the
proceeds of the Bonds (the "Refunding Funds") with the Refunding Trustee who shall hold such
funds uninvested;
(b) The delivery to the City and the Refunding Trustee of a certificate of
escrow sufficiency prepared by Seattle -Northwest Securities Corporation dated August 24, 2011
(the "Certification") verifying the mathematical accuracy of the computations (which
computations shall be attached to that certificate) showing that the Refunding Funds deposited
with the Refunding Trustee will provide sufficient money to call, pay, and redeem on
September 23, 2011 all of the outstanding Refunded Bonds at a price of par plus accrued interest
thereon;
EXHIBIT B-1
51144080.7
Exhibit B
(c) The Refunding Trustee's payment to the fiscal agent of the State of
Washington (the "Fiscal Agent") of money sufficient to carry out the redemption of the
Refunded Bonds as set forth in subparagraph (b) above; and
(d) The payment of the cost of issuance of the Bonds and administrative costs
of carrying out the Refunding Plan.
1.5 The City Council, pursuant to the Bond Legislation and the Separate Utility
Ordinance, has duly and validly authorized the execution and delivery of this Agreement, the
delivery of proceeds of the Refunding Funds to the Refunding Trustee and the carrying out of the
Refunding Plan.
1.6 Upon the deposit of the Refunding Funds with the Refunding Trustee to carry out
the Refunding Plan under the authority of chapter 39.53 RCW and other laws of the State of
Washington (collectively, the "Refunding Bond Act"), the principal amount of the Refunded
Bonds no longer shall be considered outstanding pursuant to the provisions of the Refunded
Bond Ordinance.
Section 2. Delivery of Money to Refunding Trustee and Expenditure of Funds. On
the date the Bonds are delivered to the original purchaser thereof and the City receives full
payment therefor (the "Date of Closing"), the City shall cause to be delivered to the Refunding
Trustee the Refunding Funds in the amount of. $953,651.67. The Refunding Trustee shall apply
$871,751.67 to the escrow account to carry out the Refunding Plan, and apply the remaining
proceeds in the amount of $81,900.00 to pay certain costs of issuance of the Bonds and the
administrative costs of the Refunding Plan, as shown in Exhibit A.
Section 3. Sufficiency of Refunding Funds. The City represents that the Refunding
Funds delivered to the Refunding Trustee pursuant to this. Refunding Trust Agreement, shall be
sufficient to make when due the payments required by the Refunding Plan. Such amounts
coming due are sometimes referred to hereinafter as the "payments described in Section 3."
Section 4. Application of Refunding Funds. The Refunding Trustee shall make the
payments described in Section 3, but only from the Refunding Funds delivered to the Refunding
Trustee pursuant to this Refunding Trust Agreement, in a timely manner to the Fiscal Agent of
the amount required to redeem the Refunded Bonds on the call date.. Those payments shall be
made by check, wire transfer, or such other method of transfer of funds as shall be agreed upon
by the Refunding Trustee and the Fiscal Agent.
Section 5. Notice of Redemption and Defeasance. The Refunding Trustee agrees to
give a notice of defeasance and redemption of the Refunded Bonds pursuant to the terms of the
Refunded Bonds, and in substantially the form attached hereto as Exhibit B, to the Fiscal Agent
for distribution as described therein. The notice shall be given immediately following the
execution of this Agreement. The cost of giving the notice shall be paid by the City.
Section 6. All Refunding Funds Held in Trust. The Refunding Trustee irrevocably
agrees to hold the Refunding Funds, and any other money it may receive pursuant to this
Refunding Trust Agreement, in trust and separate at all times from all other funds and.
investments held by the Refunding Trustee, solely for the purpose of making the payments
EXHIBIT B-2
51144080.7
Exhibit B
described in Section 3. The City irrevocably conveys, transfers, and assigns to the Refunding
Trustee the Refunding Funds and any other money and investments deposited with the
Refunding Trustee pursuant to this Refunding Trust Agreement, for the purpose of making such
payments.
Section 7. Amendments to Agreement. The Refunding Trustee and the City
recognize that the owners of the Refunded Bonds and the Bonds from time to time have a
beneficial interest in the Refunding Funds to be held by the Refunding Trustee as herein
provided. Therefore, this Agreement is irrevocable and shall not be subject to amendment except
for the purpose of clarifying any ambiguity herein, increasing the protection of the rights of the
owners of the Refunded Bonds or the Bonds, or preserving the exclusion of the interest on the
Refunded Bonds and the Bonds from gross income for federal income tax purposes, and only if
such amendment is accompanied by an opinion addressed to the City and the Refunding Trustee
from Foster Pepper PLLC, its successor or other nationally recognized bond counsel to the City,
to the effect that such change is necessary for one of the above reasons and does not
detrimentally affect the owners of the outstanding Refunded Bonds and the Bonds or that it
strengthens the protection of the owners of the Refunded Bonds and the Bonds and does not
detrimentally affect the owners of the Refunded Bonds and the Bonds. If such amendment
affects the amount of money and investments in the escrow account or the application thereof,
prior to the amendment's taking effect there also shall be a verification by a nationally
recognized independent certified public accounting firm satisfactory to the Refunding Trustee to
the effect that after such amendment the Refunding Funds in the escrow account will be
sufficient to make the payments described in Section 3. A copy of such verification shall be
delivered to the Refunding Trustee.
Section 8. Limitation of Liability of Refunding Trustee. None of the provisions
contained in this Agreement shall require the Refunding Trustee to risk, use or advance its own
funds in the performance of any of its duties or the exercise of any of its rights or powers
hereunder. The Refunding Trustee shall be under no liability for the payment of interest on any
funds or other property received by it hereunder.
The Refunding Trustee's liabilities and obligations in connection with this Agreement are
confined to those specifically described herein and no implied covenants or obligations shall be
read into this Agreement against the Refunding Trustee. The Refunding Trustee is authorized
and directed to comply with the provisions of this Agreement and is relieved from all liability for
so doing notwithstanding any demand or notice to the contrary by any party hereto. The
Refunding Trustee shall not be responsible or liable for the sufficiency of the Refunding Funds
deposited with it; or any loss which may occur by reason of forgeries, false representations, or
the exercise of the Refunding Trustee's discretion in any particular manner unless such exercise
is grossly negligent or constitutes willful misconduct.
If any controversy arises between the City and any third person, the Refunding Trustee
shall not be required to determine the same or to take any action in the premises, but it may
institute, in its discretion, an interpleader or other proceedings in connection therewith as it may
deem proper, and in following either course, it shall not be liable.
EXHIBIT B-3
51144080.7
Exhibit B
The Refunding Trustee may conclusively rely and shall be fully protected in acting or
refraining from acting upon any ordinance, resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties. The Refunding
Trustee shall not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice, request, consent, entitlement
order, approval or other paper or document. The Refunding Trustee may consult with counsel
and shall be entitled to rely on the advice or any opinion of counsel; provided that prior to
relying on such counsel's opinion the Refunding Trustee shall provide a copy of the opinion to
the City and its bond counsel. The Refunding Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through agents, attorneys,
custodians or nominees appointed with due care, and shall not be responsible for any willful
misconduct or gross negligence on the part of any agent, attorney, custodian or nominee so
appointed; provided, however, that the Refunding Trustee shall be responsible for the
performance of its duties hereunder.
Neither the Refunding Trustee nor any of its officers, directors, employees or agents shall
be liable for any action taken or omitted under this Agreement or in connection herewith except
to the extent caused by the Refunding Trustee's gross negligence or willful misconduct, as
determined by the final judgment of a court of competent jurisdiction, no longer subject to appeal
or review. Anything in this Agreement to the contrary notwithstanding, in no event shall the
Refunding Trustee be liable for special, indirect, punitive or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits), even if the Refunding Trustee has
been advised of the likelihood of such loss or damage and regardless of the form of action. The
Refunding Trustee shall not be liable to the parties hereto or deemed in breach or default
hereunder if and to the extent its performance hereunder is prevented by reason of force majeure.
The term "force majeure" means an occurrence that is beyond the control of the Refunding
Trustee and could not have been avoided by exercising due care. Force majeure shall include
acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar
occurrences.
The Refunding Trustee agrees to accept and act upon instructions or directions pursuant
to the Bond Legislation sent by unsecured e-mail, facsimile transmission or other similar
unsecured electronic methods, provided, however, that, the Refunding Trustee shall have
received an incumbency certificate listing persons designated to give such instructions or
directions and containing specimen signatures of such designated persons, which such
incumbency certificate shall be amended and replaced whenever a person is to be added or
deleted from the listing. If the City elects to give the Refunding Trustee e-mail or facsimile
instructions (or instructions by a similar electronic method) and the Refunding Trustee in its
discretion elects to act upon such instructions, the Refunding Trustee's reasonable understanding
of such instructions shall be deemed controlling. The Refunding Trustee shall not be liable for
any losses, costs or expenses arising directly or indirectly from the Refunding Trustee's reliance
upon and compliance with such instructions notwithstanding such instructions conflict or are
inconsistent with a subsequent written instruction. The City agrees to assume all risks arising out
of the use of such electronic methods to submit instructions and directions to the Refunding
Trustee, including without limitation the risk of the Refunding Trustee acting on unauthorized
instructions, and the risk of interception and misuse by third parties.
EXHIBIT B-4
51144080.7
Exhibit B
Section 9. Remittance of Funds When Refunded Bonds Paid in Full. At such time as
the Refunding Trustee has received the representation of the City that all of the payments
described in Section 3 have been made and the confirmation of such representation by the Fiscal
Agent, together with such other evidence of such payments as shall be satisfactory to the City
and the Refunding Trustee, the Refunding Trustee shall deliver forthwith or remit to the City any
remaining money held pursuant to this Agreement.
Section 10. Compensation of Refunding Trustee. The payment arrangement
heretofore made between the Refunding Trustee and the City on compensation and expenses of
the Refunding Trustee for services rendered by it pursuant to the provisions of this Agreement is
satisfactory to it and to the City, and no further payment to the Refunding Trustee shall be
required for such purpose, except that out of pocket expenses incurred by the Refunding Trustee
hereunder shall be reimbursed to it by the City. Such arrangement for compensation and
expenses is intended as compensation for the ordinary services as contemplated by this
Agreement, and if the Refunding Trustee renders any service hereunder not provided for in this
Agreement, or the Refunding Trustee is made a party to or intervenes in any litigation pertaining
to this Agreement or institutes interpleader proceedings relative hereto, the Refunding Trustee
shall be compensated reasonably by the City for such extraordinary services and reimbursed for
all fees, costs, liability, and expenses (including reasonable attorneys' fees and expenses)
occasioned thereby. The Refunding Trustee shall not have a lien against or otherwise be
compensated for its services and expenses from the money held pursuant to this Agreement to
make the payments described in Section 3.
Section It. Successor Refunding Trustee. The obligations assumed by the Refunding
Trustee pursuant to this Agreement may be transferred by the Refunding Trustee to a successor if
(a) the Refunding Trustee has presented evidence satisfactory to the City and to Foster Pepper
PLLC, its successor or other nationally recognized bond counsel to the City that the successor
trustee meets the requirements of RCW 39.53.070, as now in effect or hereafter amended; (b) the
City approves the appointment of the successor trustee; (c) the successor trustee has assumed all
of the obligations of the Refunding Trustee under this Agreement and has been compensated;
and (d) all of the money then held by the Refunding Trustee pursuant to this Agreement have
been duly transferred to such successor trustee.
Notwithstanding anything to the contrary contained in this Agreement, any company into
which the Refunding Trustee may be merged or converted or with which it may be consolidated
or any company resulting from any merger, conversion, or consolidation to which the Refunding
Trustee is a party, or any company to which the Refunding Trustee may sell or transfer all or
substantially all of its corporate trust business shall be the successor to the Refunding Trustee
without execution or filing of any paper or further act, if such company is eligible to serve as
Refunding Trustee under RCW 39.53.070.
Section 12. Miscellaneous. This Agreement is governed by Washington law without
regard to the conflict of laws provisions thereof and may not be modified except by a writing
signed by the parties and subject to the limitations of Section 8. If any one or more of the
provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any
EXHIBIT B-5
51144080.7
Exhibit B
other provisions of this Agreement, but this Agreement shall be construed as if such invalid,
illegal, or unenforceable provision had never been contained herein.
Section 13. Notice to Rating Agencies. The Refunding Trustee shall notify all
national rating agencies maintaining (at the request of the City) a rating on the Refunded Bonds
or the Bonds, in writing upon timely receipt of notice or evidence of either of the following
circumstances:
(a) Prior to their taking effect, any amendments to this Agreement under
Section 8, enclosing the proposed amendatory documents; and
(b) The holding (referred to in Section 12) that one or more provisions of this
Agreement are invalid, illegal, or unenforceable in any respect, enclosing a copy of that holding.
Such notices shall be sent to the applicable rating agencies by first class mail to the addresses
advised by those rating agencies.
Section 14. Counterparts. This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
pursuant to due and proper authorization, all as of the date and year first above written.
CITY OF BAINBRIDGE ISLAND,
WASHINGTON
By _
Title:
THE BANK OF NEW YORK MELLON
TRUST COMPANY N.A.,
as Refunding Trustee
By _
Title:
EXHIBIT B-6
51144080.7
EXHIBIT A
COSTS OF ISSUANCE
LIMITED TAX GENERAL OBLIGATION
IMPROVEMENT AND REFUNDING BONDS, 2011
Costs of issuance to be paid by the Refunding Trustee upon receipt of invoice:
Description Firm
Financial Advisor DB Advisors Northwest, LLC
Bond Counsel Fee Foster Pepper PLLC
Disclosure Counsel Fee Foster Pepper PLLC
Rating Fee Moody's Investors Service
Total
EXHIBIT B-7
51144080.7
Exhibit B
Total
$ 20,000.00
38,400.00
12,500.00
11,000.00
$ 81,900.00
Exhibit B
EXHIBIT B
Notice of Redemption/Defeasance*
City of Bainbridge Island, Washington
Limited Tax General Obligation Improvement and Refunding Bonds, 1998
NOTICE IS HEREBY GIVEN that the City of Bainbridge Island, Washington (the "City"), has
called for redemption on September 23, 2011, all of its then -outstanding Limited Tax General Obligation
Improvement and Refunding Bonds, 1998 (the "Refunded Bonds"). The Refunded Bonds will be
redeemed at a price of one hundred percent (100%) of their par amount, plus accrued interest to
September 23, 2011. The redemption price of the Refunded Bonds is payable on presentation and
surrender of the Refunded Bonds at the office of:
[By Mail or in Person] -or-
The Bank of New York Mellon
Worldwide Securities Processing
2001 Bryan Street, 9t' Floor
Dallas, TX 75201
[In Person Only]
Any branch of Wells Fargo
Bank, National Association in the
State of Washington
Interest on all of the Refunded Bonds or portions thereof which are redeemed shall cease to
accrue on September 23, 2011.
The following Refunded Bonds are being redeemed:
City of Bainbridge Island, Washington
Limited Tax General Obligation Improvement and Refunding Bonds, 1998
(Dated December 1, 1998)
Maturity Date
Par Amount
Interest
CUSIP
(December 1)
Redeemed
Rate
No.
2011
$200,000
4.30%
056890DE3
2012
210,000
4.35
05689ODFO
2013
215,000
4.40
056890DG8
2014
235,000
4.50
056890DH6
The City and The Bank of New York Mellon Trust Company, N.A. (the "Refunding Trustee")
shall not be responsible for the selection or use of the CUSIP numbers selected, nor is any representation
made as to their correctness indicated in the notice or as printed on any Bond. They are included solely
for the convenience of the holders.
NOTICE IS FURTHER GIVEN to the owners of the Refunded Bonds with respect to which,
pursuant to the Refunding Trust Agreement dated August 24, 2011, by and between the City and the
. This notice shall be given immediately by first class mail to each registered owner of the Refunded Bonds, to the
MSRB, Moody's Investor Services, Inc. and Standard & Poor's at their principal offices in New York, New York,
and to MBIA Insurance Corporation.
EXHIBIT B-8
51144080.7
Exhibit B
Refunding Trustee, there has been deposited into an escrow account, held by the Refunding Trustee, cash
which will provide money to pay to the redemption date, the principal of and interest on the Refunded
Bonds. Such Refunded Bonds are therefore deemed to be no longer outstanding pursuant to Section 16 of
Ordinance No. 98-54 of the City relating to the Refunded Bonds, but will be paid by application of the
assets in such escrow account.
By Order of the City of Bainbridge Island, Washington
The Bank of New York Mellon, as Paying Agent
Dated:
Under Section 3406(a)(1) of the Internal Revenue Code the Registrar may be obligated to withhold a percentage of
the principal of a holder who has failed to furnish the Registrar with a valid taxpayer identification number and a
certification that the owner is not subject to backup withholding. Owners who wish to avoid the application of these
provisions should submit a completed IRS Form W-9 when presenting their certificates for payment.
EXHIBIT B-9
51144080.7
CERTIFICATION
I, Rosalind D. Lassoff, City Clerk of the City of Bainbridge Island, Washington (the
"City"), hereby certify as follows:
1. The attached copy of Resolution No. 2011-17 (the "Resolution") is a full, true and
correct copy of a Resolution duly adopted at a regular meeting of the City Council of the City
held at the regular meeting place thereof on August 10, 2011, as that Resolution appears on the
minute book of the City; and the Resolution is in full force and effect from and after its date of
adoption; and
2. A quorum of the members of the City Council was present throughout the meeting
and a majority of the members voted in the proper manner for the adoption of the Resolution.
IN WITNESS WHEREOF, I have hereunto set my hand this 10th day of August, 2011.
CITY OF BAINBRIDGE ISLAND,
WASHINGTON
City Clerk
51144080.7