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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