Ord 93-180
ORDINANCE NO.
93-180
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
FEDERAL WAY, WASHINGTON, PROVIDING FOR THE ISSUANCE
OF A PROMISSORY NOTE IN THE PRINCIPAL AMOUNT OF
$2,660,651.00 IN ORDER TO PROVIDE INTERIM FINANCING
FOR THE ACQUISITION OF PROPERTY; FIXING THE MAXIMUM
AMOUNT OF THE NOTE, THE MAXIMUM AMOUNT WHICH MAY BE
OUTSTANDING, THE MAXIMUM TERM AND INTEREST RATES TO
BE BORNE THEREBY, AND ESTABLISHING THE METHOD FOR
PAYMENT OF THE DEBT.
WHEREAS, the city of Federal Way, Washington ("city") has
determined that approximately 12.02 acres of property and
appurtenances on such property at 3200 Southwest Dash Point
should be acquired by the City ("Subject Property"); and
WHEREAS, the City has received a grant from the State of
Washington in the amount of $405,000, which the City intends
to use solely to fund acquisition of the improvements on the
property; and
WHEREAS, the City has applied to receive King county Open
Space Bond Money proceeds, which the city intends to use to
acquire a portion of the property; and
WHEREAS, the City has applied to receive conservation
futures to cover the price of acquiring and improving the
property that is not covered by the State grants or King
County Bond proceeds; and
WHEREAS, pending the receipt of the grant monies, the
City
shall
issue
Limited
Tax
General
Obligation
Bond
Anticipation Notes ("Notes") to provide interim financing for
acquisition and improvement of the property; and
Ord. # 93-180
, p. 1
COpy
WHEREAS,
proceeds
from
the
Notes
shall
not
become
available until July 15, 1993; and
WHEREAS, changes to the State Excise Tax law support the
City's closing the acquisition of this property prior to
July 1,1993, which date is prior to the city's receipt of the
note proceeds; and
WHEREAS, the 1993 state legislature amended the state law
which
had
previously
exempted
sales
of
property
to
municipalities from excise tax payment.
The change in the law
is effective July 1,
and if applied to the sale of this
property would translate to an excise tax payment of $41,310;
and
WHEREAS, in order to avoid this additional tax liability,
it is in the best interest of the citizens of the City of
Federal Way that the closing of this transaction take place no
later than June 30; and
WHEREAS,
in order to effectuate the closing of this
transaction on or before June 30, it is necessary that the
City
issue at closing to
Sellers
a non-interest bearing
Promissory Note in an amount equal to the purchase price less
transaction costs; and
WHEREAS, the Promissory Note shall be paid in full on or
before July 16 with the proceeds of grant monies, or from the
issuance of the Notes, the sales of Bonds, or from any funds
of the city legally available therefore, including proceeds
from any sales of property; and
Ord. # 93-180
, p. 2
WHEREAS,
the
Sellers
have
agreed
to
this
closing
structure; and
WHEREAS, RCW 39.50.030 authorizes the issuance of short-
term obligations such as this Promissory Note by cities in
anticipation of the issuance of notes, bonds or other funds;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL
WAY, WASHINGTON, DO HEREBY ORDAIN AS FOLLOWS:
section 1.
Authorization of Issue of Promissory Note.
In consideration of its receipt of the Subject Property, the
city Council hereby authorizes the issuance of a non-interest
bearing promissory note in the amount of Two Million Six
Hundred sixty Thousand six Hundred Fifty-One Dollars and
NO/100
($2,660,651.00)
to be designated "Promissory Note,"
Federal Way, Washington, June, 1993 (the IIPromissory Note") to
the
sisters
of
the
Visitation,
a
Washington
non-profit
corporation
("Holder") .
The Promissory Note shall be in
substantially the form attached as Exhibit A hereto, shall be
dated June 30, 1993, and shall bear no interest.
Section 2.
PaYment of Promissory Note.
The Promissory
Note is payable from any funds of the city legally available
therefor, including proceeds from any sale of property or from
the proceeds of the sale of limited tax general obligation
bonds of the City, or refunding bond anticipation notes to be
issued by the city.
The City hereby covenants with the Holder
of the Promissory Note that it will issue the bonds, refunding
bond anticipation notes, or a combination of the foregoing in
Ord. # 93-180
, p. 3
an amount sufficient, with any legally available funds, to pay
when due
the principal
of
the
Promissory Note
and will
thereupon
redeem
the
Promissory Note.
The
ci ty hereby
covenants to pay and redeem the Promissory Note as the same
becomes due and payable with all legally available funds of
the city, including but not limited to, the proceeds from any
sales of property and/or the levying of sufficient taxes upon
all taxable property within the city subject to taxation in an
amount within and as a part of the levy permitted to cities
without a vote of the electors and at time sufficient to pay
and redeem the Promissory Note.
section 3.
Authorization of Bonds.
If the City does not
receive grant monies, or the proceeds from the issuance of the
Limited Tax General Obligation Note
or have other
funds
available to repay the Promissory Note, there shall be issued
and sold Limited Tax General Obligation Bonds of the City to
be designated "Federal Way, Washington Limited Tax Journal
Obligation Bonds, 199_" (liThe Bonds").
The Bonds shall be in such denomination and form, shall
be dated and bear interest at such rate or rates; shall be
payable at such place or places; and shall have such option of
payment prior to maturity as provided hereafter by ordinance
of the council.
The proceeds of the Bonds shall be paid into
a special fund of the City designated as the Promissory Note
Fund, 1993, authorized to be created by section 4 hereof, and
Ord. # 93-180
, p. 4
shall be applied to the extent necessary together with all
available funds, to pay and redeem the Promissory Note.
section 4.
Promissory Note Fund.
The city Manager or
his designee is hereby authorized and directed to create a
special fund of the city to be known as the "Promissory Note
Fund, 1993" ("Promissory Note Fund") , which Promissory Note
Fund shall be drawn upon for the sole purpose of paying the
Promissory Note.
Money on deposit in the Promissory Note Fund
not immediately needed to pay such interest or principal may
be temporarily deposited in such institutions or invested in
any obligations which are legal investments for City funds.
Any interest or profit from the investment of such money shall
be deposited in the Promissory Note Fund.
The City hereby
covenants it will deposit money into the Promissory Note Fund
as provided in section 2 of this Ordinance in the amount and
at the time sufficient to pay the Promissory Note as the same
becomes due and payable.
section 5.
Maturity.
The Promissory Note shall mature
on or before July 16,
1993.
On or before the date of
maturity, the full amount of the Promissory Note shall be paid
in full, pursuant to section 2 herein.
section 6.
Method of Pavrnent.
All principal due on the
Promissory Note shall be paid in lawful money of the united
states and shall be paid to Holder at 3200 Southwest Dash
Point Road, Federal Way, Washington, 98032, or through proper
escrow established at Transamerica Title Company of Seattle.
Ord. # 93-180
, p. 5
section 7.
PrepaYment.
The City shall have the right to
prepay all or any portion of the principal at any time without
penalty.
section 8.
Execution and Deliverv of the Promissory
Note.
The Promissory Note shall be executed on behalf of the
city by the manual signature of the City Manager and attested
by the manual signature of the City Clerk.
section 9.
Transmittal of the Promissory Note.
The
Promissory Note shall be transmitted to the Holder through
escrow services of Transamerica Title company in accordance
with escrow instructions approved by the city Attorney.
Section 10.
Section Severable.
If anyone or more of
the provisions of this ordinance and/or the covenants or
agreements provided in the ordinance to be performed on the
part of the City shall be declared by any court of competent
jurisdiction
to
be
contrary
to
law,
then
such
section,
covenant, or covenants, agreement or agreements, shall be null
and void and shall be deemed severable from the remaining
section, covenants, and/or agreements in this ordinance and
shall
in no way affect
the validity
of
other
sections,
provisions of this ordinance, or the promissory note.
section 11.
Effective Date.
The city Council finds that
sufficient basis exists in the interest of the health, safety
and welfare of the citizens of Federal Way so as to support
emergency
passage
of
this
ordinance
in
order
that
the
provisions herein be effective immediately upon passage.
The
Ord. # 93-180
, p. 6
findings in support of the emergency are contained in the
recitals herein.
PASSED by the City council of the City of Federal Way
this
15th
day of June, 1993.
CITY OF FEDERAL WAY
~7~
MAYOR, ROBERT STEAD
. SWANEY, CMC
TO FORM:
CITY ATTORNEY, CAROLYN A. LAKE
FILED WITH THE CITY CLERK:
PASSED BY THE CITY COUNCIL:
PUBLISHED: June 19, 1993
EFFECTIVE DATE: June 15, 1993
ORDINANCE NO. 93-180
June 9,1993
June 15, 1993
(emergency passage)
KATHLEER IORDINISISTBOND .ORD
Ord. # 93-180
, p. 7
EXHIBIT A
PROMISSORY NOTE
$2,660,651.00
Federal Way, Washington
June 30, 1993
FOR VALUE RECEIVED, the City of Federal Way, a Washington
municipal corporation ("Maker") , promises to pay to the sisters of
the Visitation, a Washington non-profit corporation (IIHolder"), the
principal sum of Two Million six Hundred Sixty Thousand six Hundred
Fifty-One Dollars and NO/100 ($2,660,651.00), on the terms and
conditions set forth below.
1. Maturitv, This promissory note matures on or before July
l6, 1993. On the date of maturity, a final installment shall be
due and must be paid in the full amount of the principal due under
this Note.
2. Repavrnent. This promissory note is payable from any
funds of the city legally available therefor including proceeds
from any sale of property or from the proceeds of the sale of
limited tax general obligation bonds of the city or refunding bond
anticipation notes to be issued by the city. The City hereby
covenants with the Holder that it will issue the foregoing bonds,
refunding bond anticipation notes, or a combination of the
foregoing in an amount sufficient, with any legally available
funds, to pay when due the principal of this promissory note and
will thereupon redeem this promissory note. The City hereby
covenants to pay and redeem this promissory note as the same
becomes due and payable with all legally available funds of the
Maker, including but not limited to, the proceeds from any sales of
property and/or the levying of sufficient taxes upon all taxable
property within the City of Federal Way subject to taxation in an
amount within and as a part of the levy permitted to cities without
a vote of the electors and at time sufficient to pay and redeem
this promissory note.
3. Method of Pavrnent. All principal shall be paid in lawful
money of the united States with currently available funds. All
payments shall be made to Holder at 3200 S.W. Dash Point Road,
Federal Way, Washington 98023, or through escrow at Transamerica
Title Company.
4. Prepavrnent. The Maker shall have the right to prepay all
or any portion of the principal at any time without penalty.
5. Waiver of Presentment. Presentation for payment, notice
of dishonor, protest, and notice of protest are hereby waived.
6. Non-Waiver. Failure to exercise any right or option of
Holder shall not constitute a waiver of the right to exercise such
right or option if Maker is in default under this Note or the Deed
of Trust.
7. Principal Execution.
principal and not as a surety.
The Maker executes this Note as
MAKER
THE CITY OF FEDERAL WAY
By:
J. Brent McFall
city Manager
ATTEST:
city Clerk, Maureen M. Swaney, CMC
MARYKlPROMNOTE\ VISIT.2ND
2