Drafter
Clerk 10/18/2010
title
A MOTION of the county council accepting a bid for the purchase of the county's Unlimited Tax General Obligation Refunding Bonds, 2010, Series A, in the aggregate principal amount of $19,805,000, and establishing certain terms of such bonds and the plan of refunding, all in accordance with Ordinance 16657.
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WHEREAS, pursuant to Ordinance 16657 (the "UTGO Bond Ordinance"), the county council authorized the issuance of one or more series of its unlimited tax general obligation refunding bonds in an outstanding aggregate principal amount not to exceed $45,000,000 to refund all or a portion of the county's Unlimited Tax General Obligation Refunding Bonds, 2000 and Unlimited Tax General Obligation Bonds, 2001 (Harborview Medical Center), and
WHEREAS, the UTGO Bond Ordinance provided that such bonds may be publicly sold in one or more series, any of which may be sold in a combined offering with other bonds of the county, either by negotiated sale or by competitive bid, as determined by the Finance Director in consultation with the county's financial advisors, and
WHEREAS, the Finance Director has determined that a series of the bonds authorized pursuant to the UTGO Bond Ordinance, to be designated as the county's Unlimited Tax General Obligation Refunding Bonds, 2010, Series A (the "UTGO Bonds") be sold by competitive bid as provided herein, and
WHEREAS, $19,570,000 of the bonds authorized by the UTGO Bond Ordinance are currently outstanding. The aggregate principal amount of all such bonds (including the UTGO Bonds) to be outstanding on the date of issuance of the UTGO Bonds, computed as provided in the UTGO Bond Ordinance, will be $39,375,000, which amount does not exceed $45,000,000, and
WHEREAS, a preliminary official statement dated October 8, 2010, has been prepared for the public sale of the UTGO Bonds, the official notice of such sale dated October 8, 2010 (the "Notice"), has been duly published, and bids have been received in accordance with the Notice, and
WHEREAS, the attached bid of Banc of America Merrill Lynch to purchase the UTGO Bonds is the best bid received for the UTGO Bonds, and it is in the best interest of the county that the UTGO Bonds be sold to Banc of America Merrill Lynch on the terms set forth in the Notice, the attached bid, the UTGO Bond Ordinance and this motion;
NOW, THEREFORE, BE IT MOVED by the Council of King County:
A. Definitions. Except as expressly authorized herein, terms used in this motion have the meanings set forth in the UTGO Bond Ordinance.
B. Ratification of Notice of Sale, Acceptance of Bids, and Authorization of UTGO Bonds. The issuance of the UTGO Bonds, designated as the county's Unlimited Tax General Obligation Refunding Bonds, 2010, Series A, in the aggregate principal amount of $19,805,000, and the terms and conditions thereof, as set forth in the Notice attached hereto as Attachment A, are hereby ratified and confirmed. The offer to purchase the UTGO Bonds, as set forth in the bid of Banc of America Merrill Lynch attached hereto as Attachment B, which shall be deemed to be adjusted to reflect the changed aggregate principal amount of the UTGO Bonds and the changed principal amounts of all of the maturities thereof, as and to the extent permitted by the Notice, is hereby accepted. The UTGO Bonds shall be dated their date of issue and delivery, and shall be subject to optional redemption as set forth in the Notice. The UTGO Bonds shall mature on the dates and in the amounts, and shall bear interest at the rates specified in Attachment C to this motion. In all other respects, the UTGO Bonds shall conform to the terms and conditions specified in the Notice and the UTGO Bond Ordinance.
C. Application of UTGO Bond Proceeds; Refunding of Refunded 2000 Bonds.
1. Application of UTGO Bond Proceeds. All of the net proceeds of the UTGO Bonds shall be applied to: (a) the refunding of $20,610,000 of the county's Unlimited Tax General Obligation Refunding Bonds, 2000 maturing on December 1, 2011, June 1, 2012, December 1 in the years 2012 through 2015, inclusive, and June 1, 2016 (the "Refunded 2000 Bonds"), by providing for the payment of the interest on those Refunded 2000 Bonds that will become due and payable on or before December 1, 2010 (the "Refunded 2000 Bond Redemption Date"), and the redemption price of the Refunded 2000 Bonds that will be called for redemption on the Refunded 2000 Bond Redemption Date; and (b) the payment of the costs and expenses incurred in issuing the UTGO Bonds.
2. Plan of Refunding. The proper county officials are authorized to carry out the refunding plan in accordance with Section 11 of the UTGO Bond Ordinance. The amounts, maturities and redemption dates of the Refunded 2000 Bonds shall be as identified in Attachment D to this motion. The amounts, maturities and interest rates of the Government Obligations to be purchased to accomplish the refunding of the Refunded 2000 Bonds shall be as identified in Attachment E to this motion.
3. Escrow Trustee. The selection of U.S. Bank National Association as Escrow Trustee for the refunding of the Refunded 2000 Bonds is hereby ratified and confirmed.
4. Finding of Savings and Defeasance. The county council finds and determines that a substantial savings will be effected by the difference between the principal and interest cost over the life of the UTGO Bonds and the principal and interest cost over the life of the Refunded 2000 Bonds but for such refunding, and that such Government Obligations to be deposited with the Escrow Trustee and the income therefrom, together with any necessary beginning cash balance, are sufficient to defease and redeem the Refunded 2000 Bonds and will discharge and satisfy the obligations of the county with respect to the Refunded 2000 Bonds under the ordinance pursuant to which the Refunded 2000 Bonds were issued, and the pledge of the county in such ordinance. Immediately upon delivery of such Government Obligations to the Escrow Trustee and the deposit of any necessary beginning cash balance, the Refunded 2000 Bonds shall be deemed not to be outstanding under the ordinance pursuant to which they were issued and shall cease to be entitled to any lien, benefit or security under such ordinance except the right to receive payment from such Government Obligations and beginning cash balance so set aside and pledged.
D. Undertaking to Provide Ongoing Disclosure.
1. Contract/Undertaking. This section D. constitutes the county's written undertaking for the benefit of the owners and beneficial owners of the UTGO Bonds as required by section (b)(5) of rule 15c2(the "rule") of the Securities and Exchange Commission (the "SEC").
2. Financial Statements/Operating Data. The county agrees to provide or cause to be provided to the Municipal Securities Rulemaking Board (the "MSRB") the following annual financial information and operating data for the prior fiscal year (commencing in 2011 for the fiscal year ended December 31, 2010):
(a) annual financial statements prepared in accordance with the Budget Accounting and Reporting System ("BARS") prescribed by the Washington State Auditor pursuant to RCW 43.09.200 (or any successor statutes) and generally of the type attached to the official statement as "Appendix B," which statements will not be audited, except that if and when audited financial statements are otherwise prepared and available to the county they will be provided;
(b) a summary of the assessed value of taxable property in the county;
(c) a summary of budgeted General Fund revenues and appropriations;
(d) a summary of ad valorem property tax levy rates per $1,000 of assessed value and delinquency rates;
(e) a summary of outstanding taxindebtedness of the county; and
(f) a schedule of the aggregate annual debt service on taxindebtedness of the county.
Items (b) through (f) shall be required only to the extent that such information is not included in the annual financial statements.
Such annual information and operating data described above shall be provided on or before the end of seven months after the end of the county's fiscal year. The county's fiscal year currently ends on December 31. The county may adjust such fiscal year by providing written notice of the change of fiscal year to the MSRB. In lieu of providing such annual financial information and operating data, the county may cross-reference to other documents available to the public on the MSRB's internet web site or filed with the SEC.
If not provided as part of the annual financial information discussed above, the county shall provide the county's audited annual financial statements prepared in accordance with BARS when and if available to the MSRB.
3. Material Events. The county agrees to provide or cause to be provided, in a timely manner, to the MSRB, notice of the occurrence of any of the following events with respect to the UTGO Bonds, if material:
(a) principal and interest payment delinquencies;
(b) non-payment related defaults;
(c) unscheduled draws on debt service reserves reflecting financial difficulties;
(d) unscheduled draws on credit enhancements reflecting financial difficulties;
(e) substitution of credit or liquidity providers, or their failure to perform;
(f) adverse tax opinions or events affecting the tax-exempt status of the UTGO Bonds;
(g) modifications to rights of UTGO Bondholders;
(h) optional, contingent or unscheduled calls of any UTGO Bonds other than scheduled sinking fund redemptions for which notice is given pursuant to Exchange Act Release 34-23856;
(i) defeasances;
(j) release, substitution or sale of property securing repayment of the UTGO Bonds; and
(k) rating changes.
Solely for purposes of disclosure, and not intending to modify this undertaking, the county advises with reference to section D.3.(c) and (j) of this motion that no debt service reserves secure payment of the UTGO Bonds and no property secures repayment of the UTGO Bonds.
4. Notification Upon Failure to Provide Financial Data. The county agrees to provide or cause to be provided, in a timely manner, to the MSRB, notice of its failure to provide the annual financial information described in section D.2. of this motion on or prior to the date set forth in section D.2. of this motion.
5. Electronic Format; Identifying Information. The county agrees that all documents provided to the MSRB pursuant to this section D. shall be provided in an electronic format and accompanied by such identifying information, each as prescribed by the MSRB.
6. Termination/Modification. The county's obligations to provide annual financial information and notices of material events shall terminate upon the legal defeasance, prior redemption or payment in full of all of the UTGO Bonds. This section D., or any provision hereof, shall be null and void if the county (i) obtains an opinion of nationally recognized bond counsel to the effect that those portions of the rule which require this section D., or any such provision, are invalid, have been repealed retroactively or otherwise do not apply to the UTGO Bonds; and (ii) notifies the MSRB of such opinion and the cancellation of this section D.
Notwithstanding any other provision of this motion, the county may amend this section D., and any provision of this section D. may be waived, with an approving opinion of nationally recognized bond counsel and in accordance with the rule.
In the event of any amendment or waiver of a provision of this section D., the county shall describe such amendment in the next annual report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the county. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a material event under section D.3. of this motion, and (ii) the annual report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.
7. UTGO Bond Owners' Remedies Under This Section D. The right of any UTGO Bond owner or beneficial owner of UTGO Bonds to enforce the provisions of this section D. shall be limited to a right to obtain specific enforcement of the county's obligations hereunder, and any failure by the county to comply with the provisions of this undertaking shall not be an event of default with respect to the UTGO Bonds. For purposes of this section D., "beneficial owner" means any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any UTGO Bonds, including persons holding UTGO Bonds through nominees or depositories.
E. Further Authority. The proper county officials, their agents, and representatives are hereby authorized and directed to do everything necessary for the prompt issuance and delivery of the UTGO Bonds, for the preparation, execution and delivery of the final official statement for the sale of the UTGO Bonds and the county's Limited Tax General Obligation Refunding Bonds, 2010, Series A, and for the proper use and application of the proceeds of such sale.
F. Severability. The covenants contained in this motion shall constitute a contract between the county and the owners of each and every UTGO Bond. If any one or more of the covenants or agreements provided in this motion to be performed on the part of the county shall be declared by any court of competent jurisdiction 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 of this
motion and shall in no way affect the validity of the other provisions of this motion or of the UTGO Bonds.