Ord 89-001
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\
ORDINANCE NO. 89-1
AN ORDINANCE OF THE CITY COUNCIL OF FEDERAL WAY,
WASHINGTON, PROVIDING FOR THE ISSUANCE AND
SALE OF A TAX ANTICIPATION NOTE OF THE CITY
IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO
EXCEED $1,000,000; PROVIDING FOR THE
DISPOSITION OF THE PROCEEDS OF SALE OF SUCH
NOTE; FIXING THE DATE, FORM, INTEREST RATE,
TERMS, MATURITY AND COVENANTS OF SUCH NOTE;
CREATING A NOTE FUND FROM WHICH THE PRINCIPAL
OF AND INTEREST ON SUCH NOTE SHALL BE PAID;
AND CONFIRMING THE SALE OF SUCH NOTE.
WHEREAS, at a special election held March 14, 1989, the
formation of the City of Federal Way, Washington (the "City") was
approved; and
WHEREAS, RCW 35.02 requires that the City must incorporate
by March 8, 1990; and
WHEREAS,
the
City
needs
money
to
finance
the
costs
of
operating and maintaining the City pending receipt of taxes and
other revenues; and
WHEREAS, RCW 35.02.130 authorizes the City to issue a tax
anticipation note prior to its incorporation; and
WHEREAS,
RCW
39.46.050
authorizes
local
governments
to
establish lines of credit with any qualified public depository to
be drawn upon in exchange for its obligations; and
WHEREAS, pending receipt of taxes and other revenues, it is
in the best interests of the residents of the City that the City
eo~,
issue a tax anticipation note to pay for the city's operation and
maintenance expenses; and
WHEREAS, Security Pacific Securities,
Seattle, Washington,
has offered to purchase the note; and
WHEREAS, the City Council deems it in the best interest of
the City that it sell the note to such bank;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
WASHINGTON DO ORDAIN AS FOLLOWS:
section 1.
Definitions.
As used in this ordinance, the
following terms shall have the following meanings:
"Bank"
means
Security
Pacific
Securities,
Seattle,
washington.
"City" means the City of Federal Way, Washington.
"council" means the general legislative body of the City as
the same shall be duly constituted from time to time.
"Issuing Officer" means the Mayor of the City, the Chairman
of the city Council Committee on Finance, Budget and Insurance,
or
the
City Manager
or
City
Finance
Director
or Treasurer,
including any interim appointees,
when duly appointed by the
Mayor.
"Note" means the "Federal Way, Washington Tax Anticipation
Note, 1989" authorized by this ordinance.
"Note Fund" means the "Federal Way Tax Anticipation Note
Redemption Fund, 1989" created by section 3 of this ordinance.
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"Note Proceeds Account" means the "Federal Way Note Proceeds
Account" created by Section 5 of this ordinance.
"Outstanding
Principal
Balance
of
the
Note"
means
the
aggregate of all funds which the ci ty has drawn from the Bank
pursuant to the Note less the aggregate of all principal paYments
on the Note made by the city.
"prime Rate" means the rate of interest publicly announced
from time to time by Security Pacific Bank Washington, N .A.
in
Seattle,
Washington as its Large Business Prime Rate or Prime
Rate.
Any change in the Prime Rate shall take effect on the day
specified in the public announcement of such change.
The Prime
Rate is set by the Bank based upon various factors including the
Bank's costs and desired return, general economic conditions and
other factors and is used as a reference point for pricing some
loans.
The Bank may make loans at,
above or below the Prime
Rate.
The Prime Rate is not necessarily the lowest rate offered
by the Bank to its most creditworthy customers from time to time.
"Request for Draw" means an oral or written request by an
Issuing Officer for a draw from the line of credit authorized to
be established by this ordinance, all as more fully described in
section 2 of this ordinance.
section
2.
Issuance
of
Note.
In
anticipation
of
the
receipt of general tax revenues or revenues from other sources,
the City shall,
for the purpose of
funding general
operating
expenses of the City, issue its Note in the principal amount of
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not to exceed $1,000,000 outstanding at anyone time.
Said
short-term
obligation
shall
be
designated
the
"Federal
Way,
Washington, Tax Anticipation Note, 1989," shall be dated the date
of its delivery to the Bank and shall mature no later than
~tn~ .....,td f,'_-n-. .J:.<.: ri.~-c ~Q~.
----~---L_1.~--=.. The Outstanding Principal Balance on the Note
shall be payable at maturity.
The Note shall bear interest on the outstanding Principal
Balance at a rate of 72% of the Prime Rate of the Bank.
Interest
shall be payable every six months from the dated date of the Note
and at maturity or prior redemption of the Note.
Interest on the
Note
shall
be
calculated
on
the
basis
of
a
360-day
year
consisting of 12 months of 30 days each.
The Note shall be fully negotiable and issued in bearer
form.
Both principal
of and
interest on the Note
shall be
payable in lawful money of the United states of America at the
office of the Treasurer of the City in Federal Way, Washington,
and shall be a general obligation of the City to the extent
provided herein.
The
Outstanding
Principal
Balance
of
the
Note
on
any
particular day shall be the aggregate of all funds which the City
has
drawn
from the
date
of
the
Note
to
that
day
less
the
aggregate of all principal paYments made by the City on or before
that day.
Interest on a particular principal amount so advanced
shall be determined from the date of the advance of Note proceeds
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pursuant to a Request
for Draw by which the ci ty drew that
principal amount from the Bank.
A Request for Draw pursuant to the Note may be made by an
Issuing Officer either orally or in writing at any time prior to
the maturity date of the Note.
include requests by telephone,
Oral Requests for Draw shall
telegraph,
telex or any other
means of communication other than by a writing signed by an
Issuing
Officer.
The
City hereby
delegates
to
the
Issuing
Officer authority to make a written or oral Request for Draw
pursuant to this ordinance.
The Bank shall incur no liability to
. the City or to any other person in acting upon any oral
or
written notice or other communication which the Bank believ~s in
good faith to have been given by an official or other person
authorized to borrow on behalf of the City,
or in otherwise
acting
in
good
faith
in
making
advances
pursuant
to
this
ordinance.
section 3.
Note Redemption Fund.
A special fund of the
City to be known
as
the
"Federal
Way Tax Anticipation Note
Redemption Fund, 1989" (the "Note Fund") is hereby authorized to
be created by the city.
The Note Fund shall be a trust account
and shall be drawn upon
for the sole purpose of paying the
principal of and interest on the Note.
Money on deposit in the
Note
Fund
not
immediately
needed
to
pay
such
interest
or
principal may temporarily be deposited in such institutions or
invested in such obligations which are legal investments for City
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funds.
Any interest or profit from the investment of such money
shall be deposited in the Note Fund.
Any money remaining in the
Note Fund after paYment in full of the principal of and interest
on the Note may be transferred to the general operating fund of
the City, and the Note Fund shall be closed.
The City covenants and agrees that on or before the maturity
date of the Note, it will deposit in the Note Fund, out of all
taxes
levied by the
City within and as
a part of the
levy
permitted
by
law
without
a
vote
of
the
electors
and
when
permitted to be levied by state law, and out of other revenues
received by the City, such tax receipts and other revenue in an
am~)Unt which,
together with other money of the ci ty ,
if any,
legally available for such purposes, will be sufficient to pay
the principal of and interest on the Note.
The
City
hereby
irrevocably
pledges
that
a
sufficient
portion of such tax receipts and other revenues to be collected
by the City prior to the full paYment of the principal of and
interest on the Note will be and is hereby irrevocably set aside,
pledged and appropriated for the paYment of the principal of and
interest on the Note as aforesaid.
Such taxes and other revenue
so pledged shall be paid directly into the Note Fund in amounts
sufficient to pay the principal of and interest on the Note at
maturity, and none of the money in such Fund shall be used for
any
other purpose than the paYment
of
the principal
of
and
interest on the Note as the same shall become due.
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Section 4.
Redemption Prior to Maturity.
The Note may be
pre-paid prior to its maturity in whole or in part at any time.
Section 5.
Application of the Proceeds of the Note.
All
proceeds received from a Request for Draw under this ordinance
shall be deposited into a special account designated the "Note
Proceeds Account" that is hereby created in the City's General
Fund, and may be used by the City to pay the general operating
and maintenance expenses of the city.
section
6.
Form
of
the
Note.
The
Note
shall
be
in
substantially the following form:
UNITED STATES OF AMERICA
NO.
$
STATE OF WASHINGTON
FEDERAL WAY
TAX ANTICIPATION NOTE, 1989
Federal Way, Washington (the "City"), a municipal
corporation organized and existing under and by virtue of the
Constitution and laws of the State of Washington, hereby
acknowledges itself to owe and for value received promises to pay
to bearer on " solely from the sources
hereinafter mentioned, the principal sum of not to exceed
$1,000,000, together with interest on the outstanding Principal
Balance, from the date hereof at the rate per annum of 72% of the
Prime Rate of security Pacific Bank washington, N.A., computed on
a 360-day year consisting of 12 months of 30 days each, on each
. and (upon'presentation and
surrender of this note at the office of the Treasurer of the
City) .
The City has reserved the right to repay the principal
amount of this note in whole or in part prior to its maturity.
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This note is issued pursuant to Ordinance No. of the
City, adopted on October, 1989 (the "Note ordinance"), for
the purpose of financing expenses of operating and maintaining
the City, in anticipation of the receipt of taxes and other
revenues, all in conformity with the Constitution and laws of the
state of Washington.
The City hereby irrevocably covenants that it will deposit
in the Tax Anticipation Note Redemption Fund, 1989 of the City
authorized to be maintained by the Note Ordinance, taxes levied
within and as a part of the levy permitted to the City without a
vote of the people, and other revenues received by the City, in
amounts which, together with other moneys of the City legally
available therefor, will be sufficient to pay the principal of
and interest on this note as the same shall become due.
The full faith, credit and resources of the City are hereby
irrevocably pledged for the prompt paYment of such principal and
interest.
The City has designated this note as a qualified tax-exempt
obligation for investment by financial institutions.
It is hereby certified and declared that this note is issued
pursuant to and in strict compliance with the Constitution and
laws of the state of Washington and duly adopted ordinances of
the City, and that all acts, condi tions and things required to
have happened, been done and performed precedent to and in the
issuance hereof have happened, been done and performed.
IN WITNESS WHEREOF, Federal Way, Washington, has caused this
note to be signed with the manual signature of the Mayor as of
this day of , 1989.
FEDERAL WAY, WASHINGTON
By
Mayor
section
7.
Execution of the Note.
The Note shall be
executed on behalf of the City by the manual signature of the
Mayor.
Section 8.
Lost, Destroyed or Mutilated Note.
In the event
the Note is lost, destroyed, or mutilated, the City will cause to
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be issued a new Note, substantially similar to the original, to
replace the same, in such manner and upon such reasonable terms
and conditions as the Council may determine.
Section 9 .
Sale of Note;
Authorization to Officials and
Agents;
Ratification
of
Prior
Actions.
The
Council
hereby
authorize the sale of the Note to the Bank pursuant to its offer
attached hereto.
The
appropriate
City
officials,
agents and
representatives
are
hereby
authorized
and
directed
to
do
everything
necessary
for
the
prompt
issuance,
execution
and
delivery of the Note and for the proper use and application of
the proceeds of the sale thereof as provided in this ordinance.
All actions heretofore taken by the City's officials, agents
and representatives in connection with the issuance and sale of
the Note are hereby ratified, approved and confirmed.
Section 10.
Note Not Arbitraqe Bond; Not Private Activity
Bond.
The City covenants and agrees that throughout the term of
the Note no part of the proceeds of the Note or any other moneys
or obligations held under this ordinance shall at any time be
used for any purpose or invested in such a manner, nor shall the
City take any other action, which would cause the Note to be (i)
an "arbitrage bond" under the Internal Revenue Code of 1986, as
amended,
and
applicable
regulations
(the
"Code")
or
(ii) a
"private
activity
bond"
under
the
Code.
The
City
further
covenants that the amount of a Request for Draw will not exceed
the City's projected expenditures.
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The County hereby designates the Note as a "qualified tax-
exempt obligation" under section 265(b)
of the Code.
The City
does not expect to issue tax-exempt obligations in an aggregate
principal amount in excess of ten million dollars during calendar
year 1989.
section 11.
Effective Date.
This ordinance shall become
effective five days after its passage and publication as required
by law.
ADOPTED by the City Council of the City of Federal Way at a
regular meeting held this J~ T,,-- day of October, 1989.
FEDERAL WAY, WASHINGTON
C¡bkJ l&-/
Mayor
ATTEST:
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cting City Cler
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