ORD 08-588
ORDINANCE NO. 08-588
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
FEDERAL WAY, WASHINGTON AMENDING ORDINANCE
NO. 06-541 TO EXTEND THE MATURITY DATE AND
CHANGE THE INTEREST RATE OF THE CITY'S LIMITED
TAX GENERAL OBLIGATION BOND, 2006 IN THE
PRINCIPAL AMOUNT OF $4,100,000.
WHEREAS, the City Council (the "Council") ofthe City of Federal Way, Washington (the
"City") passed Ordinance No. 06-541 on December 19,2006 providing for the issuance of the City's
Limited Tax General Obligation Bond, 2006 (the "Bond") to finance public projects, including
property acquisition, demolition, planning, construction and refinancing (collectively, the "Project");
and
WHEREAS, the City issued the Bond to Bank of America, N.A. (the "Bank") with a maturity
date of December 28,2008; and
WHEREAS, the City has received a proposal from the Bank dated November 10,2008 (the
Bank's Proposal") extending the maturity date and changing the interest rate of the Bond;
WHEREAS, it is in the best interest ofthe City to accept the Bank's Proposal;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS:
Section 1.
Amendment of Ordinance No. 06-541. Section 3 of Ordinance No. 06-541, is
hereby amended to read as follows (additions are double underscored, and deletions are stricken
through):
Section 3. Authorization of the Bond. The Council hereby authorizes the
issuance and sale of a limited tax general obligation bond of the City in the total principal
amount of$4, 100,000. The bond shall be designated the "City of Federal Way, Washington,
Ordinance No. 08-588
Page 1 of7
Limited Tax General Obligation Bond, 2006," (the "Bond"). The Bond shall be issued in
fully registered form, shall be numbered, shall be dated as of its date of delivery to the Bank,
shall bear interest at the rate per annum of3.35% 3.53%, until the Bond has been paid or its
payment duly provided for and shall mature on December 29. 2009 tV/O years from the date
of its delivery.
Interest shall be calculated on the basis of a 360-day year comprised of twelve 30-day
months. Interest shall be payable on the first day ofthe month that is at least 90 days from
the date of closing, and quarterly thereafter, and at maturity or upon prepayment. All
principal of the Bond shall be paid at maturity or upon prepayment.
Principal of and interest on the Bond shall be payable as described in Section 4 of
Ordinance No. 06-541 belew. If the Bond is not redeemed when properly presented at its
maturity or call date, the City shall be obligated to pay interest on the Bond at two percentage
points in excess ofthe rates specified above, from and after the maturity or call date until the
Bond, both principal and interest, is paid in full.
Section 2.
Bank's Proposal. The City hereby approves and accepts the Bank's Proposal.
The City agrees to pay the fees specified in the Bank's Proposal and comply with all other terms and
conditions set forth therein. Upon delivery ofthe new Bond, the City shall pay to the Bank: (a) a fee
of $2,000 and (b) reimburse the Bank for its legal fees in the amount of not to exceed $300.
Section 3.
Confirmation of Ordinance No. 06-541. as amended. Ordinance No. 06-541
as amended by this amendatory ordinance is hereby ratified and confirmed.
Section 4.
Ratification~ General Authorization. The Mayor, City Manager or the
Assistant City Manager/CFO and other appropriate officers of the City are authorized to deliver a
new Bond to the Bank reflecting the terms of this amendatory ordinance and to take any actions and
to execute documents as in their judgment may be necessary or desirable in order to carry out the
terms of, and complete the transactions contemplated by, this ordinance. All acts taken pursuant to
the authority of this ordinance but prior to its effective date are hereby ratified.
Section 5.
Effective Date. This ordinance shall become effective five days after its
passage and publication as required by law.
Ordinance No. 08-588
Page 2 of7
PASSED by the City Council ofthe City of Federal Way this 2nd day of December, 2008.
ATTEST:
{!M~'Ec~~
CITY CLERK, AR L MC L Y
APPROVED AS TO FORM:
~~a~
CITY ATTORNEY, PATRICIA A.
RICHARDSON
FILED WITH THE CITY CLERK: 11-11-2008
PASSED BY THE CITY COUNCIL: 12-2-2008
PUBLISHED: 12-6-2008
EFFECTIVE DATE: 12/11/2008
ORDINANCE NO.: 08-588
Ordinance No. 08-588
Page 3 of7
CERTIFICATE
I, the undersigned, Clerk ofthe City of Federal Way, Washington (the "City"), and keeper of
the records of the City Council (herein called the "Council"), DO HEREBY CERTIFY:
I. That the attached ordinance is a true and correct copy of Ordinance No. 08-588 ofthe
Council (herein called the "Ordinance"), duly passed at a regular meeting thereofheld on the 2nd day
of December, 2008.
2. That said meeting was duly convened and held in all respects in accordance with law,
and to the extent required by law, due and proper notice of such meeting was given; that a legal
quorum was present throughout the meeting and a legally sufficient number of members of the
Council voted in the proper manner for the passage of said Ordinance; that all other requirements and
proceedings incident to the proper passage of said Ordinance have been duly fulfilled, carried out and
otherwise observed; and that I am authorized to execute this certificate.
I have hereunto set my hand this ~",d day of December, 2008.
~~!&!J4UY
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EXHIBIT "A"
BANK'S PROPOSAL
lukafAmllrtca.
Nancy D. Nuerenberll
Senior Vice President
Government Banking
WAI-SOI-34-03
800 5th Avenue, 34th Floor
Seettle, WA 98104
Tel 206,358,6279
Fax 206.358,8818
nancy. d.nuefenber~bankciam erica.com
November 10, 2008
Mr. Bryant En ge
Assistant City Manager and CFO
City of Federal Way
333258th Ave S
PO Box 9718
Federal Way, W A 98063-9718
Re: $4,100,000 Limited Tax General Obligation Bond, 2006
Dear Bryant:
Bank of America N, A. is pleased to provide the attached proposal to extend the maturity date
of the above referenced Bond The Bond proceeds were used to finance public projects,
including property acquisition, demolition, planning, construction and refinancing (collectively,
the 'Project"). The extension of the Credit Facility will allow the City time for completion of the
Project.
The rates and terms for the extension are attached to this letter, as Exhibit A, Summary of Terms
and Conditions. The terms and conditions are not all-inclusive, but generally describe the
proposal offered to the City.
The terms of this letter are confidential and, except for disclosure on a confidential basis to the
accountants, attorneys and other professional advisors retained by the City in connection with the
products and services therein or as may be required by law (including any public meeting or
public disclosure law), may not be disclosed by the City or any of such advisers in whole or in part
to any other person or entity without our prior written consent,
We appreciate the opportunity to present you with this proposal. Please call me at (206)358-6279,
or Tana Aardal at (206)358-8935, to discuss any questions or comments you may have.
Sin c erely,
Bank of America, N.A.
r7-11~
Nancy D. Nueren berg , SVP
Sr. Product Delivery Officer
cc: Nancy Neraas, K&L Preston Gates Ellis LLP
Alan Schulkin, Schulkin Law
Tana Aardal, Bank of America
Brennan Church, Bank of America
A-I
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City of Federal Way
November 10, 2008
Page 2 of 3
BORROWER:
LENDER:
CREDIT FACILITY:
SECURITY:
CLOSING DATE:
MA TURITY DATE:
INTEREST RA TE:
EXTENSION FEE:
REPA YMENT:
PREPA YMENT FEES:
BanluriAlMrica ...
Exhibit A
Summary of Terms and Conditions
(For Discussion Purposes Only)
November 10,2008
City of Federal Way, Washington (the" Borrower")
Bank of America N A. ("Bank")
$4,100,000 Limited Tax General Obligation Bond, Tax-
Exempt Bank Qualified (the "Credit Facility"),
Limited Tax General Obligation of the Borrower,
December 28, 2008,
The maturity date of the Credit Facility shall be extended by
one yearto December 28, 2009.
A rate per year equal to a Fixed Rate which is set for the full
term of the Credit Facility.
Final rate to be set based on then current market rates upon
approval of the Bond Ordinance. An indicative fixed rate as of
November7, 2008 is 3,35%,
Interest is calculated on the basis of a 360-day year
comprised of 3D-day months.
Borro'iNer agrees to pay Bank an extension fee of $2,000,
This fee shall be deemed fully earned and payable upon
closing.
Interest on the Credit Facility shall be payable quarterly,
beginning April 1, 2009 and at maturity or upon early
prepayment.
Principal outstanding on the Credit Facility is payable in full
on the Maturity Date.
Borrower may prepay the Credit Facility in whole or in part prior
to its scheduled Maturity Date by paying the principal amount
thereof to be prepaid together with accrued interest to the date
of prepayment.
Any such prepayment may result in the imposition of a
prepaymentfee. The prepayment fee shall be in an amount
sufficient to compensate Bank for any loss incurred by it as a
result ofthe prepayment, as documented by the Bank, including
any loss arising from the liquidation or reemployment of funds
obtained by it to maintain the funds used to purchase the Credit
Facility orfrom fees payable to terminate the deposits from
which such funds were obtained. For purposes of this
paragraph, Bank shall be deemed to have funded the purchase
of the Credit Facility by a matching deposit or other borrowing
in the applicable interbank market, whether or not the Credit
Facility was in fact so funded. In no case shall a prepayment
fee apply if the Bank's internally derived cost of funds is higher
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City of Federal Way
November 10, 2008
Page 3 of 3
EVENTS OF DEFAULT:
FINANCIAL REPORTING
REQUIREMENTS:
EXPENSES:
DOCUMENTA TION:
ALL OTHER TERMS AND
CONDITIONS:
STA TUTORY
DISCLOSURES:
BukofAmedea.
on the date of prepayment than itwas on the date the fixed rate
of the Credit FacUity was set
If there occurs any nonpayment of principal, interest, fees or
other amounts When due, the Bank may increase the interest
rate by two percentage points,
State Audit Report of the Borrower within 10 days of
receipt from State auditor.
Borrovver's internally prepared unaudited annual
financial statement within seven months of its fiscal year
end.
Borrovver's biennial budget, within 45 days of
commencement ofthe new budget cycle.
Borrovver will pay all reasonable costs and expenses
associated with the preparation and review of all
documentation executed in connection with the Credit
FacUity, including Bank's attorneys' fees, whether or not the
Credit Facility is closed; Borrower's outside legal counsel
fees; and any other costs associated with documenting and
closing the Credit Facility,
Borrovver agrees to execute loan documents in a form and in
substance satisfactory to Bank and its legal counsel, Alan
Schulkin, Final loan documents may contain terms and
conditions that are different from or in addition to those stated in
this letter.
No change to existing terms and conditions other than
those described above.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO
LOAN MONEY, TO EXTEND CREDIT, OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
This Summary of Terms and Conditions does not constitute a commitment to lend by Bank of
America or any of its affiliates and is presented for discussion purposes only, The actual terms and
conditions upon which Bank of America may extend credit to Borrower is subject to satisfactory
completion of due diligence, necessary credit approval and such other terms and conditions as
determined by Bank of America, in its sole discretion.
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