2581CITY OF MOSES LAKE,WASHINGTON
LIMITED TAX GENERAL OBLIGATION BONDS,2010
ORDINANCE NO.2581
AN ORDINANCE of the City of Moses Lake, Washington,
providing for the issuance and sale of limited tax general
obligation bonds of the City in the principal amount of
$5,925,000 to provide funds for paying a portion ofthe costs of
constructing, designing and furnishing a new Civic Center
building; providing the date, form, terms and maturities of said
bonds; authorizing a preliminaryofficial statement; providing for
the disposition of the proceeds of sale;and approving the sale of
such bonds.
APPROVED ON AUGUST 24,2010
PREPARED BY:
K&L Gates llp
Seattle,Washington
Section 1.
Section 2.
Section 3.
Section 4.
Section 5.
Section 6.
Section 7.
Section 8.
Section 9.
Section 10.
Section 11.
Section 12.
Section 13.
Section 14.
Section 15.
Section 16.
TABLE OF CONTENTS*
Page
Definitions 1
The Project 5
Authorization ofBonds and Bond Details 5
Registration,Exchange and Payments 6
Redemption and Purchase H
Form of Bonds H
Execution of Bonds 13
Tax Covenants;Special Designation 14
Bond Fund and Provision forTax Levy Payments 16
Defeasance 17
Sale ofBonds 17
Undertaking toProvide Ongoing Disclosure 18
Project Fund and Application ofProceeds ofBonds 22
Lost,Stolenor Destroyed Bonds 23
Severability 23
Effective Date 24
* Thistableofcontentsandthe coverpagearenot a partofthis ordinance;theyareincludedfor
convenience ofthe reader only.
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ORDINANCE NO.2581
AN ORDINANCE of the City of Moses Lake, Washington,
providing for the issuance and sale of limited tax general
obligation bonds of the City in the principal amount of
$5,925,000 to provide funds for paying a portion ofthe costs of
constructing,designing and furnishing a new Civic Center
building;providing the date,form,terms and maturities of said
bonds;authorizing a preliminary official statement;providing for
the disposition ofthe proceeds of sale;and approving the sale of
such bonds.
WHEREAS, the best interests of the inhabitants ofthe City of Moses Lake,Washington
(the "City")require that the City construct,design and furnish a new Civic Center building (the
"Project"); and
WHEREAS,in order to provide the funds required for such purpose,theCitynow desires
to authorize the issuance of limited tax general obligation bonds in the principal amount of
$5,925,000 (the"Bonds")and to authorize the sale ofthe Bonds;and
WHEREAS, the City has received the offer from D.A.Davidson & Co.,Spokane,
Washingtonto underwrite the Bondsatterms acceptable to this City Council;
NOW,THEREFORE, THE CITY COUNCIL OF THE CITY OF MOSES LAKE,
WASHINGTON,DO ORDAIN as follows:
Section 1.Definitions.As used in this ordinance, the following words shall have the
following meanings:
Beneficial Owner means any personthat has or shares the power,directly orindirectlyto
make investment decisions concerning ownership of any Bonds (including persons holding
Bonds through nominees,depositories orother intermediaries).
Bond Fund means the "Building Maintenance Limited Tax General Obligation Bond,
2010 Redemption Fund 538" established pursuantto Section 9 hereof.
Bond Register means the registration books showing the name, address and tax
identification number of each Registered Owner of the Bonds, maintained pursuant to
Section 149(a)ofthe Code.
Bonds means the $5,925,000 principal amount of the City of Moses Lake,Washington
Limited Tax General Obligation Bonds,2010issued pursuant to this ordinance forthe purpose of
payingcosts authorized by Section2 hereof.
Bond Year means each one-year period that ends on the date selectedby the City.The
firstand lastBond Yearsmaybe short periods.If no day isselectedbythe Citybeforetheearlier
of the final maturity dateof the Bonds or the datethat is five years afterthe dateof issuance of
the Bonds, Bond Years end on each anniversary ofthe date of issue and on the final maturity date
ofthe Bonds.
City meansthe Cityof MosesLake,Washington,a municipal corporation of the Stateof
Washington.
Code means the Internal Revenue Code of 1986, as amended,and shall include all
applicable regulations and rulings relating thereto.
Commission means the Securities and Exchange Commission.
Council means the City Council as the general legislative authority of the City, as the
same shall be duly and regularly constituted from time to time.
DTC means The Depository Trust Company,New York,New York, a limited purpose
trust company organized under the laws of the State ofNew York, as depository for the Bonds
pursuant to Section 4 hereof.
Finance Director means the duly qualified,appointed and acting Finance Director ofthe
City or any other officer who succeeds to the duties now delegated to that office.
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Government Obligations means those obligations now or hereafter defined as such in
chapter 39.53 RCW.
Letter ofRepresentations meansthe blanketissuerletterof representations fromthe City
to DTC.
MSRB means the Municipal Securities Rulemaking Board or any successor to its
functions.
Net Proceeds,when used with reference with the Bonds, means the principal amount of
the Bonds,plus accrued interest and original issue premium,if any,and less original issue
discount.
Private Person means any natural person engaged in a trade or business or any trust,
estate,partnership,association,company or corporation.
Private Person Use means the use ofproperty in a trade or business by a Private Person if
such use is other than as a member ofthe general public. Private Person Use includes ownership
of the property by the Private Person as well as other arrangements that transfer to the Private
Person the actual or beneficial use of the property (such as a lease,management or incentive
payment contract or other special arrangement)in such a manner as to set the Private Person
apart from the general public. Use of property as a member of the general public includes
attendance by the Private Person at municipal meetings or business rental of property to the
Private Person on a day-to-daybasis if the rental paid by such Private Person is the same as the
rentalpaid by anyPrivate Person who desires to rent the property.Useof property by nonprofit
community groups or communityrecreational groups is not treated as Private Person Use if such
use is incidentalto the governmental uses ofproperty,the propertyis madeavailablefor suchuse
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by all such community groups onan equal basis and such community groups are charged only a
de minimis fee to cover custodial expenses.
Project means the construction,design,and furnishing a new Civic Center building.
Registered Owner means the person named as the registered owner ofa Bond inthe Bond
Register.For so long as the Bonds are held inbook-entry only form,DTC shall be deemed to be
the sole Registered Owner.
Registrar means,initially,the fiscal agency of the State of Washington for the purposes
of registering and authenticating the Bonds,maintaining the Bond Register,effecting transfer of
ownership of the Bonds and paying interest on and principal ofthe Bonds.
Rule means the Commission's Rule 15c2-12 under the Securities Exchange Act of 1934,
as the same.maybe amendedfrom time to time.
Underwriter means D.A. Davidson & Co., Spokane, Washington.
Rules ofInterpretation.In this ordinance,unless the context otherwise requires:
(a)The terms "hereby,""hereof,""hereto,""herein,"hereunder"and any similar
terms, as used in this ordinance, refer to this ordinance as a whole and not to any particular
article, section, subdivision or clause hereof, and the term "hereafter"shall mean after, and the
term "heretofore"shall mean before,the date ofthis ordinance;
(b) Words of the masculine gender shall mean and include correlative words of the
feminine and neuter genders and words importing the singular number shall mean and include
the plural number and vice versa;
(c) Words importing persons shall include firms,associations,partnerships (including
limited partnerships), trusts, corporations and other legal entities, including public bodies, as well
as natural persons;
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(d)Any headings preceding the text of the several articles and Sections of this
ordinance,and any table ofcontents or marginal notes appended to copies hereof,shall be solely
for convenience of reference and shall not constitute a partofthis ordinance,nor shall they affect
its meaning,construction or effect;
(e)All references herein to "articles,""sections"and other subdivisions orclauses are
to the corresponding articles,sections,subdivisions orclauses hereof.
(f)Words importing the singular number include the plural number and vice versa.
Section 2. The Project.The City is undertaking the construction,design and
furnishing ofa new Civic Center building (the "Project").Proceeds ofthe Bonds will be used to
pay a part ofthe costs of the Project and topay costs ofissuance ofthe Bonds.
Section 3. Authorization of Bonds and Bond Details. For the purpose of providing
funds forthe Project,the City shall issue its limited tax general obligation bonds inthe aggregate
principal amount of $5,925,000.The bonds shall be general obligations of the City,shall be
designated "City of Moses Lake,Washington Limited Tax General Obligation Bonds,2010"(the
"Bonds");shall be dated asofthedateoftheir initial delivery;shallbe fully registered asto both
principal and interest,shall be in the denomination of $5,000 each or any integral multiple
thereof, provided that no Bond shall represent more than one maturity,shall be numbered
separately in such manner and with any additional designation as the Registrar deems necessary
for purposes of identification, and shall bear interest from their date payable on the first days of
each June and December, commencing on December 1, 2010. The Bonds shall mature in the
following years and in the following amounts,bearing interest at the following rates:
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Maturity Dates
(December 1)Principal Amounts Interest Rates
2011 $530,000 3.00%
2012 545,000 2.00
2013 560,000 2.00
2014 570,000 2.00
2015 580,000 2.25
2016 595,000 2.50
2017 610,000 2.75
2018 625,000 3.00
2019 645,000 3.00
2020 665,000 3.25
Section 4.Registration.Exchange and Pavments.
(a)Registrar/Bond Register.The City hereby specifies and adopts the system of
registration approved bythe Washington StateFinance Committee from timetotime through the
appointment ofstate fiscal agencies.TheCityshall cause abond register to be maintained bythe
Registrar.So long as any Bonds remain outstanding, the Registrar shall make all necessary
provisions to permit the exchange or registration or transfer of Bonds at its principal corporate
trust office. The Registrar may be removed at any time at the option of the Finance Director
upon prior notice to the Registrar and a successor Registrar appointed by the Finance Director.
No resignation or removal of the Registrar shall be effective until a successor shall have been
appointed and until the successor Registrar shall have accepted the duties of the Registrar
hereunder.The Registrar is authorized,on behalf of the City, to authenticate and deliver Bonds
transferred or exchanged in accordance with the provisions ofsuch Bonds and this ordinance and
to carry out all ofthe Registrar's powers and duties under this ordinance.The Registrar shall be
responsible for its representations contained in the Certificate ofAuthentication ofthe Bonds.
(b)Registered Ownership.The City and the Registrar, each in its discretion, may
deem and treat the Registered Owner ofeach Bond as the absolute owner thereof for all purposes
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(except as provided in Section 12 ofthis ordinance),and neither the City nor the Registrar shall
be affected by any notice to the contrary.Payment of any such Bond shall be made only as
described in Section 4(h)hereof,but such Bond may be transferred as herein provided.All such
payments made as described in Section 4(h)shall be valid and shall satisfy and discharge the
liability ofthe City upon such Bond to the extent ofthe amount or amounts so paid.
(c)DTC Acceptance/Letters ofRepresentations.The Bonds initially shall be held in
fully immobilized form by DTC acting as depository.To induce DTC to accept the Bonds as
eligible for deposit at DTC,the City has executed and delivered to DTC a Blanket Issuer Letter
ofRepresentations.Neither the City nor the'Registrar will have any responsibility or obligation
to DTC participants orthe persons for whom they act as nominees (or any successor depository)
with respect to the Bonds in respect of the accuracy of any records maintained by DTC (or any
successor depository)orany DTC participant,the payment by DTC (or any successor depository)
or any DTC participant of any amount in respect of the principal ofor interest on Bonds,any
notice which is permitted or required to be given to Registered Owners under this ordinance
(except such notices as shall be required to be given by the City to the Registrar orto DTC (or
any successor depository)),or any consent given or other action taken byDTC(orany successor
depository)as the Registered Owner.Forso long as any Bonds are held in fully-immobilized
form hereunder,DTC or its successordepositoryshall be deemedto be the Registered Ownerfor
all purposes hereunder,and all references hereinto the Registered Owners shall mean DTC (or
any successor depository)or its nomineeand shallnot meanthe owners ofanybeneficialinterest
in such Bonds.
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If any Bond shall be duly presented for payment and funds have not been duly provided
by the City on such applicable date,then interest shall continue to accrue thereafter on the unpaid
principal thereof atthe rate stated onsuch Bond until itis paid.
(d)Use ofDepository.
(1)The Bonds shall be registered initially in the name of "Cede &Co.",as
nominee of DTC,with one Bond maturing on each of the maturity dates for the Bonds in a
denomination corresponding to the total principal therein designated to mature on such date.
Registered ownership of such immobilized Bonds,orany portions thereof,may not thereafter be
transferred except (A)to any successor of DTC orits nominee,provided that any such successor
shall bequalified under any applicable laws to provide the service proposed to be provided by it;
(B)to any substitute depository appointed by the Finance Director pursuant to subsection (2)
below or such substitute depository's successor;or (C)to any person as provided in
subsection (4)below.
(2)Upon the resignation of DTC orits successor (oranysubstitute depository
or its successor)from its functions as depository or a determination by the Finance Director to
discontinue the system of book entry transfers through DTC or its successor (or any substitute
depository or its successor),the Finance Directormay hereafter appoint a substitute depository.
Any such substitute depository shall be qualified under any applicable laws to provide the
services proposed to be provided by it.
(3) In the case of any transfer pursuant to clause (A) or (B)of subsection (1)
above, the Registrar shall, upon receipt of all outstanding Bonds,together with a written request
ofthe Finance Director,issue a single new Bond for each maturity then outstanding,registered in
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the name of suchsuccessor or suchsubstitute depository,or their nominees,as the case may be,
allas specified in such written request ofthe Finance Director.
(4)In the event that (A)DTC or its successor (or substitute depository or its
successor)resigns from its functions as depository,and no substitute depository can be obtained,
or (B)the Finance Director determines that it is inthe best interest ofthe beneficial owners ofthe
Bondsthat such owners be ableto obtainthe Bonds in theformof certificates,the ownership of
such Bonds may then be transferred to any person or entity as herein provided,and shall no
longer be held in fully-immobilized form.The Finance Director shall deliver a written request to
the Registrar,together with a supply of definitive Bonds,to issue Bonds as herein provided in
any authorized denomination.Upon receipt by the Registrar of all then outstanding Bonds
together with a written request of the Finance Director to the Registrar,new Bonds shall be
issued in the appropriate denominations and registered in the names of such persons as are
requested in such written request.
(e)Registration ofTransfer of Ownership or Exchange;Change in Denominations.
The transfer ofany Bond maybe registered and Bonds maybe exchanged,butno transfer ofany
such Bond shall be valid unless it is surrendered to the Registrar with the assignment form
appearing onsuchBondduly executed bytheRegistered Owner orsuch Registered Owner'sduly
authorized agent in a manner satisfactory to the Registrar. Upon such surrender, the Registrar
shall cancel the surrendered Bond and shall authenticate and deliver,without charge to the
Registered Owner or transferee therefor, a new Bond (or Bonds at the option of the new
Registered Owner)of the same date, maturity and interest rate and for the same aggregate
principal amount in any authorized denomination,naming as Registered Owner the person or
persons listed as the assignee on the assignment form appearing on the surrendered Bond, in
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exchange for such surrendered and cancelled Bond.Any Bond may be surrendered to the
Registrar and exchanged,without charge,for an equal aggregate principal amount of Bonds of
the same date,maturity and interest rate,inany authorized denomination.The Registrar shall not
be obligated to register the transfer orto exchange any Bond during the 15 days preceding any
interest payment or principal payment date any such Bond is to be redeemed.
(f)Registrar's Ownership of Bonds.The Registrar may become the Registered
Owner of any Bond with the same rights it would have ifit were not the Registrar,and to the
extent permitted by law,may act as depository for and permit any of its officers or directors to
act as member of,orin any other capacity with respect to,any committee formed to protect the
rightofthe Registered Owners of Bonds.
(g)Registration Covenant.The City covenants that,until all Bonds have been
surrendered and canceled,it will maintain a system for recording the ownership of each Bond
that complies withthe provisions of Section 149 ofthe Code.
(h)Place and Medium ofPayment.Both principal of and interest on the Bonds shall
be payable in lawful money of the United States of America.Interest on the Bonds shall be
calculated onthe basis ofayearof 360 days andtwelve 30-day months.Forso long asall Bonds
are in fully immobilized form,payments of principal and interest thereon shall be made as
provided in accordance withthe operational arrangements of DTC referred to in the Letter of
Representations.In the eventthat the Bondsareno longerin fully immobilized form,intereston
the Bonds shall be paid by check or draft mailed to the Registered Owners at the addresses for
such Registered Owners appearing on the Bond Register on the fifteenth day of the month
preceding the interest payment date, or upon the written request ofa Registered Owner of more
than $1,000,000 of Bonds (received by the Registrar at least 15 days prior to the applicable
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payment date),such payment shall be made by the Registrar by wire transfer to the account
within the continental United States designated bythe Registered Owner.Principal oftheBonds
shall be payable upon presentation and surrender ofsuch Bonds by the Registered Owners atthe
principal office ofthe Registrar.
Section 5.Redemption and Purchase.
(a)No Optional Redemption.The Bonds are not subject to optional redemption prior
to their stated maturities.
(b)Purchase ofBonds for Retirement.The City reserves the right to purchase any of
the Bonds offered totheCity atanyprice deemed reasonable tothe Finance Director.
Section 6. Form ofBonds. The Bonds shall be in substantially the following form:
UNITED STATES OF AMERICA
NO.
STATE OF WASHINGTON
CITY OF MOSES LAKE,WASHINGTON
LIMITED TAX GENERAL OBLIGATION BOND,2010
INTEREST RATE:%MATURITY DATE:CUSIPNO.:
REGISTERED OWNER:CEDE &CO.
PRINCIPAL AMOUNT:
The City ofMoses Lake, Washington(the"City"), hereby acknowledgesitself to owe and
for value received promises to pay to the Registered Owner identified above, or registered
assigns, on the Maturity Date identified above, the Principal Amount indicated above and to pay
interest thereon from September 8,2010,or the most recent date to which interest has been paid
or duly provided for until payment of this bond at the Interest Rate set forth above, payable on
December 1, 2010, and semiannually thereafter on the first days of each succeeding June and
December.Both principal of and interest on this bond are payable in lawful money ofthe United
States of America. The fiscal agency of the State of Washington has been appointed by the City
as the authenticating agent, paying agent and registrar for the bonds of this issue (the
"Registrar").For so long as the bonds ofthis issue are held in fully immobilized form,payments
of principal and interest thereon shall be made as provided in accordance with the operational
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arrangements of The DepositoryTrust Company ("DTC") referred to in the Blanket Issuer Letter
ofRepresentations (the "Letter ofRepresentations") from the Cityto DTC.
The bonds of this issue are issued under and in accordance with the provisions of the
Constitution and applicable statutes of the State of Washington and Ordinance No.2581 duly
passed bythe City Council on August 24,2010 (the"Bond Ordinance").Capitalized terms used
in this bond have the meanings given such terms in the Bond Ordinance.
This bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall
have been manuallysignedbyor on behalf ofthe Registraror its dulydesignatedagent.
This bond is one of an authorized issue ofbonds of like date,tenor,rate of interest and
date of maturity,except as to number and amount in the aggregate principal amount of
$5,925,000 and is issued pursuant to the Bond Ordinance for providing funds forthe Projectand
costs ofissuance.
The bonds of this issue are not subject to redemption prior to their stated maturities as
stated in the Bond Ordinance.
The City hereby irrevocably covenantsand agreeswith the owner of this bond that it will
include in its annual budget and levy taxes annually, within and as a part of the tax levy
permitted to cities without a vote of the electorate, upon all the property subject to taxation in
amounts sufficient, together with other money legally available therefor, to pay the principal of
and interest on this bond as the same shall become due.The full faith,credit and resources ofthe
City are hereby irrevocably pledged for the annual levy and collection of such taxes and the
prompt payment ofsuch principal and interest.
The City has designated the bonds of this issue as "qualified tax-exempt obligations"for
investment by financial institutions under Section 265(b)ofthe Code.
The pledge of tax levies for payment of principal of and interest on the bonds may be
discharged prior to maturity of the bonds by making provision for the payment thereof on the
terms and conditions set forth in the Bond Ordinance.
It is hereby certified that all acts, conditions and things required by the Constitution and
statutes of the State of Washington to exist, to have happened,been done and performed
precedentto and in the issuanceof this bond have happened,been done and performedand that
the issuance of this bond and the bonds ofthis issue does notviolate any constitutional,statutory
or otherlimitationupontheamountof bonded indebtedness thatthe Citymay incur.
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IN WITNESS WHEREOF, the City ofMoses Lake has caused this bond to be signed by
the manual or facsimile signature ofits Mayor and attested by the manual or facsimile signature
of its Finance Director, and the seal of the City to be impressed or imprinted hereon, as of this
8th day of September,2010.
CITY OF MOSES LAKE,WASHINGTON
(SEAL)
/s/facsimile ormanual signature
Mayor
Attest:
/s/facsimile or manual signature
Finance Director
The Registrar's Certificate of Authentication on the Bonds shall be in substantially the
following form:
CERTIFICATE OF AUTHENTICATION
This bond is one of the bonds described in the within-mentioned Bond Ordinance and is
one of the Limited Tax General Obligation Bonds,2010 ofthe City ofMoses Lake, Washington,
dated September 8,2010.
WASHINGTON STATE FISCAL
AGENCY,as Registrar
By
Section 7.Execution of Bonds. The Bonds shall be executed on behalf of the City
with the manual or facsimile signatures of the Mayor and Finance Director,and the seal of the
City shall be impressed, imprinted or otherwise reproduced thereon.
Only such Bonds as shall bear thereon a Certificate of Authentication in the form
hereinbefore recited,manually executed by the Registrar,shall be valid or obligatory for any
purpose or entitled to the benefits ofthis ordinance.Such Certificate of Authentication shall be
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conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and
delivered hereunder and are entitled to the benefits ofthis ordinance.
In case either of the officers who shall have executed the Bonds shall cease to be an
officer or officers of the City before the Bonds so signed shall have been authenticated or
delivered bythe Registrar,or issued bythe City,such Bonds may nevertheless be authenticated,
delivered and issued and upon such authentication,delivery and issuance,shall be as binding
upon the City asthough those who signed the same had continued tobe such officers of the City.
Any Bond may be signed and attested on behalf of the City by such persons who at the date of
the actual execution of such Bond, are the proper officers of the City,although at the original
date ofsuchBondanysuchpersonshallnot havebeen suchofficerofthe City.
Section 8.Tax Covenants:Special Designation.
(a)Arbitrage Covenant.The City hereby covenants that it will not make any use of
the proceeds of sale of the Bonds or any other funds of the City which may be deemed to be
proceeds of such Bonds pursuant to Section 148 of the Code and applicable regulations
thereunder which will cause the Bonds to be "arbitrage bonds"within the meaning ofsaid section
and regulations. The City will comply with the requirements ofSection 148 ofthe Code (or any
successor provision thereof applicable to the Bonds) and the applicable regulations thereunder
throughout the term ofthe Bonds.
(b)Private Person Use Limitationfor Bonds.The City covenants that for as long as
the Bonds are outstanding,it will not permit:
(1) More than 10%of the Net Proceeds of the Bonds to be allocated to any
Private Person Use;and
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(2) More than 10%of the principal or interest payments on the Bonds in a
Bond Year to be directlyor indirectly:(A)securedby anyinterest in propertyused or to be used
for any PrivatePerson Use or securedby payments in respect of propertyused or to be used for
any Private Person Use,or (B)derived from payments (whether or not made to the City)in
respectof property,or borrowed money,usedorto be usedforanyPrivatePersonUse.
The City further covenants that, if:
(3)More than five percent of the Net Proceeds of the Bonds are allocable to
any Private Person Use; and
(4) More than five percent of the principal or interest payments on the Bonds
in a Bond Year are (under the terms of this resolution or any underlyingarrangement)directly or
indirectly: (A) secured by any interest in property used or to be used for any Private Person Use
or secured by payments in respect of property used or to be used for any Private Person Use, or
(B) derived from payments (whether or not made to the City) in respect of property, or borrowed
money, used or to be used for any Private Person Use, then, (i) any Private Person Use of the
projects described in subsection (3)hereof or Private Person Use payments described in
subsection (4)hereof that is in excess of the five percent limitations described in such
subsections (3) or (4) will be for a Private Person Use that is related to the state or local
governmental use of the Project financed with Bond proceeds,and (ii) any Private Person Use
will not exceed the amount ofNet Proceeds of the Bonds used for the state or local governmental
use portion ofthe Project to which the Private Person Use ofsuch portion of such Project relates.
The City further covenantsthat it will comply with any limitations on the use ofthe Project by
other than state and local governmental users that are necessary,in the opinion of its bond
counsel, to preserve the tax exemption of the interest on the Bonds. The covenants of this
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section are specified solely to assure the continued exemption from regular income taxation of
the interest on the Bonds.
(c)Designation.The City hereby designates the Bonds as "qualified tax-exempt
obligations"for purchase by financial institutions pursuant to Section 265(b)(3)ofthe Code.The
City does not anticipate that it will issue more than $30,000,000 in qualified tax-exempt
obligations during 2010.
Section 9. Bond Fund and Provision for Tax Lew Payments.There is hereby created
in the office of the Finance Director a special fund to be drawn upon forthe purpose of paying
the principal of and interest on the Bonds to be known as the "Building Maintenance Limited
Tax General Obligation Bond,2010 Redemption Fund 538"(the "Bond Fund").The taxes
hereafter levied forthe purpose of paying principal ofand interest onthe Bonds and other funds
tobeused topaythe Bonds shall be deposited inthe Bond Fund no later than thedate such funds
are required forthe payment of principal of and interest onthe Bonds.Money inthe Bond Fund
not needed to paythe interest or principal next coming duemay temporarily be deposited insuch
institutions or invested in such obligations as may be lawful for the investment of City funds.
The City hereby irrevocably covenants and agrees for as long as any of the Bonds are
outstanding and unpaid that each year it will include in its budget and levy an ad valorem tax
upon all the property within the City subject to taxation in an amount that will be sufficient,
together with all other revenues and money ofthe City legally available for such purposes, to pay
the principal of and interest on the Bonds as the same shall become due. All of such taxes so
collected and any other money to be used for such purposes shall be paid into the Bond Fund.
The City hereby irrevocably pledges that the annual tax provided for herein to be levied
for the payment of such principal and interest shall be within and as a part of the tax levy
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permitted to cities without a vote of the people,andthata sufficient portion ofeach annual levy
to be leviedand collected bythe Citypriorto thefull payment of the principal of and interest on
the Bonds willbe and is hereby irrevocably set aside,pledged and appropriated forthe payment
ofthe principal of and interest on the Bonds.The full faith,credit and resources ofthe City are
hereby irrevocably pledged for the annual levy and collection of said taxes andfor the prompt
payment of the principal ofand interest ontheBonds asthe same shall become due.
Section 10.Defeasance. In the event that the City, in order to effect the payment,
retirement or redemption ofany Bond,sets aside inthe Bond Fund orin another special account,
cash or noncallable Government Obligations,or any combination of cash and/or noncallable
Government Obligations,in amounts and maturities which,together with the known earned
income therefrom,are sufficientto redeem or pay and retire such Bond in accordance with its
terms andto paywhenduethe interest and redemption premium,if any,thereon,andsuchcash
and/or noncallable Government Obligations are irrevocably set aside and pledged for such
purpose, then no further payments need be made into the Bond Fund for the payment of the
principal of and interest on such Bond. The owner ofa Bond so provided for shall cease to be
entitled to any lien;benefit or security of this ordinance except the right to receive payment of
principal, premium, if any, and interest from such special account, and such Bond shall be
deemed to be not outstanding under this ordinance.
Within 60 days of any defeasance of Bonds the Registrar shall provide notice of
defeasance of Bonds to Registered Owners and to each party entitled to receive notice in
accordance with Section 12 ofthis ordinance.
Section 11.Sale of Bonds. The City hereby accepts the offer of D.A.Davidson & Co.,
Spokane,Washington (the "Underwriter")to purchase the Bonds on the terms and conditions set
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forth in its purchase agreement dated as of this date and presented to the Council on this date,
and in this ordinance (the "Purchase Contract").The Mayor and/or City Manager are hereby
authorizedto execute the PurchaseContract on behalf of the City. The proper City officialsare
hereby authorized and directed to do everything necessary for the prompt issuance,execution and
delivery of the Bonds to the Underwriter and for the proper use and application ofthe proceeds
ofsuch sale.
The City hereby approves the Preliminary Official Statement presented herewith to the
Council and authorizes the Underwriter's distribution of the Preliminary Official Statement in
connection with the offering of the Bonds.Pursuant to Securities and Exchange Commission
Rule 15c2-12 (the "Rule"),the City hereby deems the Preliminary Official Statement as final as
ofits date except for the omission ofinformation dependent upon the pricing ofthe issue and the
completion ofthe Purchase Contract,such asoffering prices,interest rates,selling compensation,
aggregate principal amount,principal amount per maturity,delivery dates,and other terms ofthe
Bonds dependent on the foregoing matters.
The City Manager and/or Finance Director are hereby authorized to review and
approve on behalf of the City the final official statement relative to the Bonds with such
additions and changesas maybe deemednecessaryor advisableto either ofthem.
Section 12.Undertaking to Provide Ongoing Disclosure.
(a)Contract/Undertaking.This sectionconstitutesthe City's written undertaking for
the benefit of the owners, including Beneficial Owners,of the Bonds as required by
Section (b)(5)ofthe Rule.
(b)Financial Statements/Operating Data.The City agrees to provide or cause to be
provided to the Municipal Securities Rulemaking Board ("MSRB"), the following annual
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financial information and operating data for the prior fiscal year (commencing in 2011 for the
fiscal year ended December 31,2010):
1.Annual financial statements,which statementsmayor maynot be audited,
showing ending fund balances for the City's general fund prepared in accordance with the
Budgeting Accounting and Reporting System prescribed by the Washington State Auditor
pursuant to RCW 43.09.200 (or any successor statute)and generally ofthe type included in the
official statement for the Bonds under the heading "Historical and Budgeted General Fund
Operating Results";
2. The assessed valuation oftaxable property in the City;
3.Advaloremtaxesdueand percentage oftaxes collected;
4.Property tax levy rate per$1,000 of assessed valuation;and
5.Outstanding general obligationdebtofthe City.
Items 2-5 shall be required only tothe extent that such information isnot included inthe annual
financial statements.
The information and data described above shall be provided on or before nine months
aftertheendofthe City's fiscal year.TheCity's current fiscal yearendsDecember 31.TheCity
may adjust such fiscal year byproviding written notice ofthe change of fiscal year totheMSRB.
In lieu of providing such annual financial information and operating data, the City may
cross-reference to other documents available to the public on the MSRB's internet website.
If not providedas part of the annual financial information discussed above,the Cityshall
providethe City's auditedannual financial statementprepared in accordance withthe Budgeting
Accounting and Reporting System prescribed by the Washington State Auditor pursuant to
RCW 43.09.200 (or any successor statute) when and ifavailable to the MSRB.
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(c)Material Events.The City agrees to provide or cause to be provided,in a timely
mannerto the MSRBnotice of the occurrence of any of the following eventswithrespectto the
Bonds,ifmaterial:
• Principal and interestpaymentdelinquencies;
•Non-payment related defaults;
•Unscheduled draws on debt service reserves reflecting financial
difficulties;
•Unscheduled draws on credit enhancements reflecting financial
difficulties;
•Substitution ofcreditor liquidity providers,or theirfailureto perform;
• Adverse tax opinions or events affecting the tax-exempt status of the
Bonds;
•Modifications to the rights ofBond owners;
• Bond calls (optional, contingent or unscheduled Bond calls other than
scheduled sinking fund redemptions for which notice is given pursuant to
Exchange Act Release 34-238560);
•Defeasances;
• Release, substitution or sale ofproperty, securing repayment ofthe Bonds;
and
•Rating changes.
Solely for purposes of disclosure, and not intending to modify this undertaking, the City
advises that no debt service reserves or property secure payment ofthe Bonds.
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(d)Notification Upon Failureto Provide FinancialData.The City 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 Subsection (b) above on or prior to the date set forth in
Subsection (b)above.
(e)Emma;Format for Filings with the MSRB.Until otherwise designated by the
MSRB or the Commission, any information or notices submitted to the MSRB in compliance
with the Rule are to be submitted through the MSRB's Electronic Municipal Market Access
system ("EMMA"),currently located at www.emma.msrb.org.All notices,financial information
and operating data required by this undertaking to be provided to the MSRB must be in an
electronic format as prescribed by the MSRB. All documents provided to the MSRB pursuant to
this undertakingmust be accompanied byidentifyinginformationasprescribedbythe MSRB.
(f)Termination/Modification.The City's obligations to provide annual financial
information and notices of material events shall terminate upon the legal defeasance,prior
redemptionor paymentin fullof all ofthe Bonds. Anyprovisionof this sectionshallbe nulland
void if the City (1) obtains an opinion ofnationallyrecognized bond counsel to the effect that the
portion of the Rule that requires that provision is invalid, has been repealed retroactively or
otherwise does not apply to the Bonds and (2) notifies the MSRB of such opinion and the
cancellation ofthis section.
The City may amend this section with an opinion of nationally recognized bond counsel
in accordance with the Rule. In the event of any amendment of this section,the City shall
describe such amendment in the next annual report, and shall include, a narrative explanation of
the reason for the amendment and its impact on the type (or in the case ofa change ofaccounting
principles,on the presentation)offinancial information or operating data being presented by the
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City. In addition,if the amendment relates to the accounting principles to be followed in
preparing financial statements,(A)notice of such change shall be given in the same manner as
for a material event under Subsection(c), and (B)the annual report for the year in which the
change is made shall present a comparison (in narrative form and also,if feasible,in quantitative
form) betweenthe financial statements as preparedon the basisof the new accounting principles
and those prepared on the basis of the former accountingprinciples.
(g)Bond Owner's Remedies Under This Section.The right of any bondowner or
Beneficial Owner of Bonds to enforce the provisions of this section shall be limited to a right to
obtain specific enforcement of the City's obligations underthis section,and any failure by the
City to comply with the provisions of this undertaking shall not be an event of default with
respect to the Bonds.
(h)No Default.The City is not and has not been in default in the performanceof its
obligations ofanypriorundertakingfor ongoingdisclosurewith respectto its obligations.
Section 13.Project Fund and Application of Proceeds of Bonds. The City has
previously established a fund designated the "Capital Projects 2010 Fund" (the "Project Fund")
into which the proceeds of the Bonds (other than accrued interest,if any) shall be deposited.
Money on hand in the Project Fund shall be used to pay the costs of or reimbursement for the
costs of the Project and costs of issuance ofthe Bonds. The Finance Director may invest money
in the Project Fund in legal investments for City funds.Earnings on such investments shall
accrue to the benefit ofsuch fund earning such interest.Any part ofthe proceeds ofthe Bonds
remaining in the Project Fund after all costs of the Project have been paid (including costs of
issuance) may be used for any capital purpose of the City or may be transferred to the Bond
Fund.
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Section 14.Lost,Stolen or Destroyed Bonds.In case any Bond or Bonds shall be lost,
stolen or destroyed, the Registrar may execute and deliver a new Bond or Bonds of like date,
number and tenor to the Registered Owner thereof upon the Registered Owner's paying the
expenses and charges of the City in connection therewith and upon his/her filing with the City
evidence satisfactory to the City that such Bond was actually lost, stolen or destroyed and of
his/her ownershipthereof, and upon furnishingthe Citywith indemnity satisfactoryto the City.
Section 15.Severability. If any one or more of the covenants or agreements provided
in this 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 covenant or covenants,agreement or
agreements, shall be null and void and shall be deemed separable from the remaining covenants
and agreements of this ordinance and shall in no way affect the validity ofthe other provisions of
this ordinance or ofthe Bonds.
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Section 16. Effective Date. The City Council declares that this ordinance shall take
effect immediately as provided by law upon one reading if two-thirds (2/3) of the entire City
Council present vote in favor ofpassage.
Adopted by the City Council and signed by its Mayor on August 24,2010.
^
Mayo
ATTEST:
7*L
Finance Director
APPROVED AS TO FORM
fty Attorney
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CERTIFICATE OF FINANCE DIRECTOR
I DO HEREBY CERTIFY that I am the duly qualified, appointed and acting Finance
Director of the City of Moses Lake, Washington (the "City"), and keeper of the records of the
City Council; and
I HEREBY CERTIFY:
1. That the attached ordinance is a true and correct copy of Ordinance No.2581 of
the City (the "Ordinance"), as finally passedat a regular meeting ofthe City Council held on the
24th day ofAugust,2010 and duly recorded in my office.
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
quorum was present throughout the meeting and a legally sufficient number of members of the
City Council voted in the proper manner for the passage of the Ordinance; that all other
requirements and proceedings incident to the proper passage of the Ordinance have been duly
fulfilled,carried out and otherwise observed,and that I am authorized to execute this certificate.
IN WITNESS WHEREOF,I have hereunto set my hand this 24th day ofAugust,2010.
1/Fin»np.p.Dirpr.tnr
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