HomeMy WebLinkAboutord2003-028WHATCOM COUNTY COUNCIL AGENDA BILL NO. 2003 -156
CLEARANCES
Initial
Date
Date Received in Council Office
Agenda Date
Assignment:
Originator: Karen Thomas
4/22/03
Introduction
Division Head:
_. �..
5/6/03
Finance / Council
Dept. Head: Barbara Coq.
ar
AFR ' 2603
Prosecutor
Puridaso,giBudger
Exernuce:
SUBJECT: Introduction of Ordinance No. 10WOOMAuthorizing the Issuance of Limited Tax General
Obligation Refunding Bonds in the Amount of $ 51415 1000
ATTACHMENTS: Draft ordinance
SEPA review required? ( ) Yes ( x ) NO
Should Clerk schedule a hearing ? ( ) Yes ( x )
SEPA review completed? ( ) Yes ( x ) NO
NO
Re nested Date:
SUMMARYSTATEMENT:
Distribution Request
The Administrative Finance Committee (consisting of the County
Treasurer, Council Chair and County Auditor) recommends that
Indicate those who should reretveoaopy after Council action
List specific names to the right.
the County Council authorize the ordinance to refund the County's
ADS Facilities Management
1993 LTGO bonds. It is an extremely attractive time to refinance
ADS Finance
debt, and the General Fund will be able to realize a significant
amount of savings.
ADS Human Resources
ADS Info Services
Assessor
Auditor
Cooperative Extension
District Court
Executive
Health
Hearing Examiner
Jail
COUNCIL ACTION TAKEN:
Juvenile
Parks
2003-156 4/8/2003'. Pulled from Introduction
412212003: Introduced
516/2003: Adopted 1 -0, Ord. #2003 -028
Planning
Prosecutor
Public Works
Sheri
Superior Court
Treasurer
Related County Contract #:
Omer
Ordinance or Reso tion Number
Related File Numbers:
(this item): 2
OCT 3 0 2003
NHAIGOMt;Cldii ,
ORDINANCE NO. 2003 -j' 8
AUTHORIZING THE ISSUANCE OF LIMITED TAX GENERAL OBLIGATION
REFUNDING BONDS
IN THE AMOUNT OF $3,3851000
Table Of Contents*
Section1.
Definit ions ............................................................................... ..............................2
Section 2.
Authorization of Bonds .......................................................... ...............................
5
Section 3.
Registration, Exchange and Payments .................................... ..............................6
Section 4.
Redemption and Purchase of Bonds .................................... ...............................
11
Section5.
Form of Bonds ..................................................................... ...............................
12
Section6.
Execution of Bonds .............................................................. ...............................
14
Section 7.
Application of Bond Proceeds and Redemption of the Refunded Bonds...........
15
Section 8.
Pledge of Taxes and Credit .................................................. ...............................
18
Section9.
Def easance ........................................................................... ...............................
18
Section 10.
Tax Covenants and Designation .......................................... ...............................
19
Section 11.
Undertaking to Provide Ongoing Discl osure ....................... ...............................
21
Section 12.
Lost or Destroyed Bonds ...................................................... ...............................
25
Section13.
Sale of Bonds ....................................................................... ...............................
25
Section14.
Bond Insurance .................................................................... ...............................
26
Section 15.
Amending Section 7 of Ordinance No. 98- 084 .................... ...............................
26
Section16.
Severability .......................................................................... ...............................
26
Section17.
Effective Date ...................................................................... ...............................
28
Exhibit A
Form of Escrow Deposit Agreement
* This table of contents is not a part of this ordinance; it is included for convenience
of the
reader only.
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I INTRODUCED BY: Consent
2 PROPOSED BY: Treasurer
3 DATE INTRODUCED: 04/22/03
4
5 ORDINANCE NO. 2003 -028
6
7 AN ORDINANCE OF THE COUNTY COUNCIL OF WHATCOM
8 COUNTY, WASHINGTON, PROVIDING FOR THE ISSUANCE
9 AND SALE OF LIMITED TAX GENERAL OBLIGATION
10 REFUNDING BONDS OF THE COUNTY IN THE
11 AGGREGATE PRINCIPAL AMOUNT OF $35385,000 TO
12 REFUND CERTAIN OUTSTANDING OBLIGATIONS OF THE
13 COUNTY; PROVIDING THE DATE, FORM, TERMS,
14 MATURITIES, AND REDEMPTION PROVISIONS OF THE
15 BONDS; PROVIDING FOR THE DISPOSITION OF THE BOND
16 PROCEEDS; PROVIDING FOR THE ANNUAL LEVY OF
17 TAXES TO PAY THE PRINCIPAL OF AND INTEREST ON
18 THE BONDS; AUTHORIZING THE SALE OF THE BONDS;
19 AND AMENDING ORDINANCE NO. 98 -084 OF THE
20 COUNTY.
21
22 WHEREAS, Whatcom County, Washington (the "County ") has issued its Limited Tax
23 General Obligation Bonds, 1993 under date of March 1, 1993 in the aggregate principal amount
24 of $8,400,000, pursuant to Ordinance No. 93 -010, (the `Refunded Bond Ordinance ") which
25 remain outstanding in the aggregate principal amount of $4,265,000, as follows:
26
Maturity Years Principal Interest
(December 1) Amount Rate
2003 $ 325,000 4.90%
2004 3459000 5.10
2005 365,000 5.20
2006 385,000 5.35
2007 405,000 5.60
2008 4305000 5.70
2009 4603000 5.75
2010 485,000 5.80
2012 1,065,000 5.75
27
28 (the "1993 Bonds "); and
1 WHEREAS, the Refunded Bond Ordinance authorizes the defeasance and redemption of
2 the 1993 Bonds maturing on and after December 1, 2004 (the "Refunded Bonds ") in advance of
3 their scheduled maturity on December 1, 2003, in whole at any time, or in part on any interest
4 payment date, at a price of par plus accrued interest to the date of redemption; and
5 WHEREAS, it appears to the Whatcom County Council (the "Council") that the
6 Refunded Bonds may be refunded at savings to the County by the issuance of the limited tax
7 general obligation refunding bonds authorized herein;
8 WHEREAS, it appears to the Council that it is in the best interest of the County that the
9 written offer of Seattle- Northwest Securities Corporation, Seattle, Washington, to underwrite the
10 bonds herein authorized be accepted;
11 NOW, THEREFORE, THE WHATCOM COUNTY COUNCIL DOES ORDAIN, as
12 follows:
13 Section 1. Definitions. As used in this ordinance, the following words shall have the
14 following meanings:
15 Acquired Obligations means the Government Obligations acquired by the County under
16 the terms of this ordinance and the Escrow Agreement to effect the defeasance and refunding of
17 the Refunded Bonds.
IS Bond Fund means the special fund of the County designated as the "2003 General
19 Obligation Refunding Bond Redemption Fund" and maintained in the office of the Treasurer.
20 Bond Insurance Policy means the policy of bond insurance issued with respect to the
21 Bonds by the Insurer.
22 Bond Register means the registration books for the Bonds, maintained by the Bond
23 Registrar, for the purpose of complying with the requirements of Section 149 of the Internal
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I Revenue Code of 1986, as amended, and listing, inter alia, the names and addresses of all
2 registered owners of Bonds.
3 Bond Registrar means the fiscal agency of the State of Washington in New York, New
4 York, for the purposes of registering and authenticating the Bonds, maintaining the Bond
5 Register, effecting transfer of ownership of the Bonds and paying interest on and principal of the
6 Bonds or such other entity as may hereafter be appointed by the Treasurer to perform the duties
7 of the Bond Registrar.
8 Bonds means the $3,385,000 of Whatcom County, Washington, Limited Tax General
9 Obligation Refunding Bonds, 2003, issued pursuant to this ordinance.
10 Code means the federal Internal Revenue Code of 1986, as amended from time to time,
11 and the applicable regulations thereunder.
12 Commission means the Securities and Exchange Commission.
13 Council means the duly constituted County Council of Whatcom County as the general
14 legislative authority of the County.
15 County means Whatcom County, Washington, a political subdivision, duly organized and
16 existing under and by virtue of its Charter and the laws of the State of Washington.
17 DTC means The Depository Trust Company, New York, New York, a limited purpose
18 trust company organized under the laws of the State of New York, as depository for the Bonds
19 pursuant to Section 3 hereof.
20 Escrow Agent means U.S. Bank National Association, Seattle, Washington.
21 Escrow Agreement means the Escrow Deposit Agreement to be dated as of the date of
22 closing and delivery of the Bonds substantially in the form attached hereto as Exhibit A.
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I Government Obligations means those obligations now or hereafter defined as such in
2 chapter 39.53RCW.
3 Insurer means Financial Security Assurance, Inc., a New York stock insurance company,
4 or any successor thereto or assignee thereof, as issuer of a Bond Insurance Policy for the Bonds.
5 Letter of Representation means a blanket issuer letter of representations from the County
6 to DTC.
7 MSRB means the Municipal Securities Rulemaking Board or any successor to its
8 functions.
9 Net Proceeds, when used with reference to the Bonds, means the principal amount of the
10 Bonds, plus accrued interest and original issue premium, if any, and less original issue discount.
11 1993 Bonds means the County's Limited Tax General Obligation Bonds, 1993 issued
12 under date of March 1, 1993 in the aggregate principal amount of $8,400,000, pursuant to
13 Ordinance No. 93 -010, which remain outstanding in the aggregate principal amount of
14 $4,265,000.
15 NRMSIR means a nationally recognized municipal securities information repository.
16 Private Person means any natural person engaged in a trade or business or any trust,
17 estate, partnership, association, company or corporation.
18 Private Person Use means the use of property in a trade or business by a Private Person if
19 such use is other than as a member of the general public. Private Person Use includes ownership
20 of the property by the Private Person as well as other arrangements that transfer to the Private
21 Person the actual or beneficial use of the property (such as a lease, management or incentive
22 payment contract or other special arrangement) in such a manner as to set the Private Person
23 apart from the general public. Use of property as a member of the general public includes
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I attendance by the Private Person at municipal meetings or business rental of property to the
2 Private Person on a day -to -day basis if the rental paid by such Private Person is the same as the
3 rental paid by any Private Person who desires to rent the property. Use of property by nonprofit
4 community groups or community recreational groups is not treated as Private Person Use if such
5 use is incidental to the governmental uses of property, the property is made available for such use
6 by all such community groups on an equal basis and such community groups are charged only a
7 de minimis fee to cover custodial expenses.
8 Refunded Bond Ordinance means Ordinance No. 93 -010 of the County which authorized
9 the 1993 Bonds.
10 Refunded Bonds means the 1993 Bonds maturing on and after December 1, 2004.
11 Registered Owner means the person in whose name a Bond is registered on the Bond
12 Register. For so long as the Bonds are held in book -entry only form, DTC shall be deemed to be
13 the sole Registered Owner.
14 Rule means the Commission's Rule 15c2 -12 under the Securities Exchange Act of 1934,
15 as the same may be amended from time to time.
16 SID means a state information depository for the State of Washington.
17 Treasurer means the Treasurer of the County.
18 Underwriter means Seattle - Northwest Securities Corporation, Seattle, Washington.
19 Section 2. Authorization of Bonds. The County shall issue and sell the Bonds in the
20 principal amount of $3,385,000 for the purpose of advance refunding the Refunded Bonds. The
21 Bonds shall be designated as the "Whatcom County, Washington, Limited Tax General
22 Obligation Refunding Bonds, 2003" (the "Bonds "), shall be dated as of June 1, 2003, shall be
23 fully registered as to both principal and interest, shall be in the denomination of $5,000 each or
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1 any integral multiple thereof, provided further that no Bond shall represent more than one
2 maturity, shall be numbered separately in such manner and with any additional designation as the
3 Bond Registrar deems necessary for purposes of identification and control, and shall bear interest
4 payable on December 1, 2003, and semiannually thereafter on the first days of June and
5 December. The Bonds shall bear interest at the following rates and mature on December 1 of the
6 following years in the following principal amounts:
Maturity
(December 1) Principal Amounts Interest Rates
2004 $ 340,000 2.00%
2005 345,000 2.00
2006 355,000 2.00
2007 360,000 2.10
2008 3709000 2.45
2009 385,000 2.75
2010 395,000 3.05
2011 4109000 3.20
2012 425,000 3.35
7 Section 3. Registration, Exchange and payments.
8 (a) Bond Registrar /Bond Register. The Board hereby requests that the
9 Treasurer specify and adopt the system of registration approved by the Washington State Finance
10 Committee from time to time through the appointment of state fiscal agencies. The County shall
11 cause a bond register to be maintained by the Bond Registrar. So long as any Bonds remain
12 outstanding, the Bond Registrar shall make all necessary provisions to permit the exchange or
13 registration or transfer of Bonds at its principal corporate trust office. The Bond Registrar may
14 be removed at any time at the option of the County Treasurer upon prior notice to the Bond
15 Registrar, the Insurer, DTC, each NRMSIR and SID, if any, and a successor Bond Registrar
16 appointed by the County Treasurer. No resignation or removal of the Bond Registrar shall be
17 effective until a successor shall have been appointed and until the successor Bond Registrar shall
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I have accepted the duties of the Bond Registrar hereunder. The Bond Registrar is authorized, on
2 behalf of the County, to authenticate and deliver Bonds transferred or exchanged in accordance
3 with the provisions of such Bonds and this ordinance and to carry out all of the Bond Registrar's
4 powers and duties under this ordinance. The Bond Registrar shall be responsible for its
5 representations contained in the Certificate of Authentication of the Bonds.
6 (b) Registered Ownership. The County and the Bond Registrar, each in its
7 discretion, may deem and treat the Registered Owner of each Bond as the absolute owner thereof
8 for all purposes (except as provided in Section 11 of this ordinance), and neither the County nor
9 the Bond Registrar shall be affected by any notice to the contrary. Payment of any such Bond
10 shall be made only as described in this Section 3, but such Bond may be transferred as herein
11 provided. All such payments made as described in this Section 3 shall be valid and shall satisfy
12 and discharge the liability of the County upon such Bond to the extent of the amount or amounts
13 so paid.
14 (c) DTC Acceptance /Letters of Representations. The Bonds initially shall be
15 held in fully immobilized form by DTC acting as depository. To induce DTC to accept the
16 Bonds as eligible for deposit at DTC, the County has executed and delivered to DTC a Blanket
17 Issuer Letter of Representations. Neither the County nor the Bond Registrar will have any
18 responsibility or obligation to DTC participants or the persons for whom they act as nominees (or
19 any successor depository) with respect to the Bonds in respect of the accuracy of any records
20 maintained by DTC (or any successor depository) or any DTC participant, the payment by DTC
21 (or any successor depository) or any DTC participant of any amount in respect of the principal of
22 or interest on Bonds, any notice which is permitted or required to be given to Registered Owners
23 under this ordinance (except such notices as shall be required to be given by the County to the
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I Bond Registrar or to DTC (or any successor depository)), or any consent given or other action
2 taken by DTC (or any successor depository) as the Registered Owner. For so long as any Bonds
3 are held in fully- immobilized form hereunder, DTC or its successor depository shall be deemed
4 to be the Registered Owner for all purposes hereunder, and all references herein to the Registered
5 Owners shall mean DTC (or any successor depository) or its nominee and shall not mean the
6 owners of any beneficial interest in such Bonds.
7 If any Bond shall be duly presented for payment and funds have not been duly provided
8 by the County on such applicable date, then interest shall continue to accrue thereafter on the
9 unpaid principal thereof at the rate stated on such Bond until it is paid.
10 (d) Use of Depository.
11 (i) The Bonds shall be registered initially in the time of "Cede &
12 Co. ", as nominee of DTC, with one Bond maturing on each of the maturity dates for the Bonds in
13 a denomination corresponding to the total principal therein designated to mature on such date.
14 Registered ownership of such immobilized Bonds, or any portions thereof, may not thereafter be
15 transferred except (A) to any successor of DTC or its nominee, provided that any such successor
16 shall be qualified under any applicable laws to provide the service proposed to be provided by it;
17 (B) to any substitute depository appointed by the Treasurer pursuant to subsection (it) below or
18 such substitute depository's successor; or (C) to any person as provided in subsection (iv) below.
19 (ii) Upon the resignation of DTC or its successor (or any substitute
20 depository or its successor) from its functions as depository or a determination by the Board to
21 discontinue the system of book entry transfers through DTC or its successor (or any substitute
22 depository or its successor), the Board may hereafter appoint a substitute depository. Any such
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1 substitute depository shall be qualified under any applicable laws to provide the services
2 proposed to be provided by it.
3 (iii) In the case of any transfer pursuant to clause (A) or (B) of
4 subsection (i) above, the Bond Registrar shall, upon receipt of all outstanding Bonds, together
5 with a written request on behalf of the Board, issue a single new Bond for each maturity then
6 outstanding, registered in the name of such successor or such substitute depository, or their
7 nominees, as the case may be, all as specified in such written request of the Board.
8 (iv) In the event that (A) DTC or its successor (or substitute depository
9 or its successor) resigns from its functions as depository, and no substitute depository can be
10 obtained, or (B) the Treasurer determines that it is in the best interest of the beneficial owners of
11 the Bonds that such owners be able to obtain such bonds in the form of Bond certificates, the
12 ownership of such Bonds may then be transferred to any person or entity as herein provided, and
13 shall no longer be held in fully- immobilized form. The Treasurer shall deliver a written request
14 to the Bond Registrar, together with a supply of definitive Bonds, to issue Bonds as herein
15 provided in any authorized denomination. Upon receipt by the Bond Registrar of all then
16 outstanding Bonds together with a written request on behalf of the Treasurer to the Bond
17 Registrar, new Bonds shall be issued in the appropriate denominations and registered in the
18 names of such persons as are requested in such written request.
19 (e) Registration of Transfer of Ownership or Exchange; Change in
20 Denominations. The transfer of any Bond may be registered and Bonds may be exchanged, but
21 no transfer of any such Bond shall be valid unless it is surrendered to the Bond Registrar with the
22 assignment form appearing on such Bond duly executed by the Registered Owner or such
23 Registered Owner's duly authorized agent in a manner satisfactory to the Bond Registrar. Upon
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I such surrender, the Bond Registrar shall cancel the surrendered Bond and shall authenticate and
2 deliver, without charge to the Registered Owner or transferee therefor, a new Bond (or Bonds at
3 the option of the new Registered Owner) of the same date, series, maturity and interest rate and
4 for the same aggregate principal amount in any authorized denomination, naming as Registered
5 Owner the person or persons listed as the assignee on the assignment form appearing on the
6 surrendered Bond, in exchange for such surrendered and cancelled Bond. Any Bond may be
7 surrendered to the Bond Registrar and exchanged, without charge, for an equal aggregate
8 principal amount of Bonds of the same date, maturity and interest rate, in any authorized
9 denomination. The Bond Registrar shall not be obligated to register the transfer or to exchange
10 any Bond during the 15 days preceding any interest payment or principal payment date any such
11 Bond is to be redeemed.
12 (f) Bond Registrar's Ownership of Bonds. The Bond Registrar may become
13 the Registered Owner of any Bond with the same rights it would have if it were not the Bond
14 Registrar, and to the extent permitted by law, may act as depository for and permit any of its
15 officers or directors to act as member of, or in any other capacity with respect to, any committee
16 formed to protect the right of the Registered Owners of Bonds.
17 (g) Registration Covenant. The County covenants that, until all Bonds have
18 been surrendered and canceled, it will maintain a system for recording the ownership of each
19 Bond that complies with the provisions of Section 149 of the Code.
20 (h) Place and Medium of Payment. Both principal of and interest on the
21 Bonds shall be payable in lawful money of the United States of America. Interest on the Bonds
22 shall be calculated on the basis of a year of 360 days and twelve 30 -day months. For so long as
23 all Bonds are in fully immobilized form, payments of principal and interest thereon shall be made
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as provided in accordance with the operational arrangements of DTC referred to in the Letter of
Representations. In the event that the Bonds are no longer in fully immobilized form, interest on
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. Principal of the Bonds shall be payable upon presentation
and surrender of such Bonds by the Registered Owners at the principal office of the Bond
Registrar.
Section 4. Redemption and Purchase of Bonds.
(a) Optional Redemption. The Bonds are not subject to redemption prior to
maturity.
(b) Purchase of Bonds. The County reserves the right to purchase any of the
Bonds offered to it at any time at a price deemed reasonable by the County Treasurer.
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P�MWICMWSpB 0A 03
I Section 5. Form of Bonds. The Bonds shall be in substantially the following form:
2 STATEMENT OF INSURANCE
3
4 Financial Security Assurance Inc. ( "Financial Security"), New York, New York,
5 has delivered its municipal bond insurance policy with respect to the scheduled
6 payments due of principal of and interest on this Bond to The Bank of New York,
7 New York, New York, or its successor, as paying agent for the Bonds (the
8 "Paying Agent'). Said Policy is on file and available for inspection at the
9 principal office of the Paying Agent and a copy thereof may be obtained from
10 Financial Security or the Paying Agent.
11
12 UNITED STATES OF AMERICA
13 NO. $
14 STATE OF WASHINGTON
15 WHATCOM COUNTY
16 LIMITED TAX GENERAL OBLIGATION REFUNDING BOND, 2003
17
18 INTEREST RATE: MATURITY DATE: CUSIP NO.:
19
20 Registered Owner: CEDE & Co.
21
22 Principal Amount:
23
24 WHATCOM COUNTY, WASHINGTON (the "County"), hereby acknowledges itself to
25 owe and for value received promises to pay to the Registered Owner identified above, or
26 registered assigns, on the Maturity Date identified above, the Principal Amount indicated above
27 and to pay interest thereon from June 1, 2003, or the most recent date to which interest has been
28 paid or duly provided for until payment of this bond at the Interest Rate set forth above, payable
29 on the first days of each June and December, commencing on December 1, 2003. Both principal
30 of and interest on this bond are payable in lawful money of the United States of America. Both
31 principal of and interest on this Bond shall be paid as provided in the operational arrangements
32 referred to in the Blanket Issuer Letter of Representations (the "Letter of Representations ")
33 between the State and The Depository Trust Company ( "DTC" ). The fiscal agency of the State
34 of Washington has been appointed by the County Treasurer(the "Bond Registrar").
35
36 This bond is one of an authorized issue of bonds of like date and tenor, except as to
37 number, amount, rate of interest and date of maturity in the aggregate principal amount of
38 $3,385,000, and is issued to refund outstanding limited tax general obligation bonds of the
39 County.
40
41 The bonds of this issue are issued under and in accordance with the provisions of the
42 Constitution and applicable statutes of the State of Washington and ordinances duly adopted by
43 the County Council, including Ordinance No. 2003 - =of the County Council (the "Bond
44 Ordinance ").
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2 The bonds of this issue are not subject to optional redemption prior to their stated
3 maturities.
4
5 The bonds of this issue are not "private activity bonds" as such term is defined in the
6 Internal Revenue Code of 1986, as amended (the "Code "). The bonds of this issue are qualified
7 tax - exempt obligations under Section 265(b) of the Code for banks, thrift institutions and other
8 financial institutions.
9
10 The County hereby irrevocably covenants that it will levy taxes annually upon all the
11 taxable property in the County within and as a part of the tax levy permitted to the County
12 without a vote of the electors in amounts sufficient, with other monies legally available therefor,
13 to pay the principal of and interest on the bonds of this issue as the same shall become due. The
14 full faith, credit and resources of the County are hereby irrevocably pledged for the annual levy
15 and collection of such taxes and the prompt payment of such principal and interest. The pledge
16 of tax levies may be discharged prior to maturity of the bonds of this issue by making provision
17 for the payment thereof on the terms and conditions set forth in the Bond Ordinance.
18
19 This bond shall not be valid or become obligatory for any purpose or be entitled to any
20 security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall
21 have been manually signed by the Bond Registrar.
22
23 It is hereby certified that all acts, conditions and things required by the Constitution and
24 statutes of the State of Washington to exist, to have happened, been done and performed
25 precedent to and in the issuance of this bond have happened, been done and performed and that
26 the issuance of this bond and the bonds of this issue does not violate any constitutional, statutory
27 or other limitation upon the amount of bonded indebtedness that the County may incur.
28
29 IN WITNESS WHEREOF, Whatcom County, Washington has caused this bond to be
30 executed by the facsimile signatures of the Chair and Clerk of its County Council as of this 1 at
31 day of June, 2003.
32
33 WHATCOM COUNTY, WASHINGTON
34
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36 By /s/ facsimile
37 Chair, County Council
38 ATTEST:
39
40
41 /s/ facsimile
42 Clerk, County Council
43
44
The Bond Registrar's
Certificate of Authentication on the
Bonds shall be in substantially
45
the following form:
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IS
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CERTIFICATE OF AUTHENTICATION
Date 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 Refunding Bonds, 2003 of Whatcom County, dated
June 1, 2003.
WASHINGTON STATE FISCAL
AGENCY as Bond Registrar
as
Authorized Officer
Section 6. Execution of Bonds. The Bonds shall be executed on behalf of the County
with the manual or facsimile signature of the Chair of the Council, attested by the manual or
facsimile signature of the Clerk of the Council. In case either or both of the officers who have
signed or attested any of the Bonds cease to be such officer before such Bonds have been actually
issued and delivered, such Bonds shall be valid nevertheless and may be issued by the County
with the same effect as though the persons who had signed or attested such Bonds had not ceased
to be such officers, and any Bond may be signed or attested on behalf of the County by officers
who at the date of actual execution of such Bond are the proper officers, although at the nominal
date of execution of such Bond such officer was not an officer of the County.
Only Bonds that bear a Certificate of Authentication in the form set forth in Section 5,
manually executed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled
to the benefits of this ordinance. Such Certificate of Authentication shall be conclusive evidence
that the Bonds so authenticated have been duly executed, authenticated and delivered and are
entitled to the benefits of this ordinance.
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1 Section 7. Application of Bond Proceeds and Redemption of the Refunded Bonds.
2 (a) Accrued Interest. Interest accrued on the Bonds from their date to the date
3 of issuance shall be deposited in the Bond Fund and shall be used to pay interest on the Bonds
4 coming due on December 1, 2003.
5 (b) Refunding Account. There is hereby authorized to be created in the bond
6 redemption fund for the Refunded Bonds an account known as the "Refunding Account' which
7 Account is to be drawn upon for the sole purpose of paying the principal of and interest on the
8 Refunded Bonds until their date of redemption and of paying costs related to the refunding of the
9 Refunded Bonds.
10 The proceeds of the sale of the Bonds (exclusive of (i) accrued interest thereon, which
11 shall be paid into the Bond Fund and used to pay interest on the Bonds on December 1, 2003, and
12 (it) a proportionate share of the costs of issuance of the Bonds) shall be credited to the Refunding
13 Account.
14 Money in the Refunding Account together with a cash contribution from the County shall
15 be used upon receipt thereof to defease the Refunded Bonds as authorized by the Refunded Bond
16 Ordinance and pay costs of issuance. The County shall defease the Refunded Bonds no later than
17 30 days from the date of the issuance of the Bonds and discharge such obligations by the use of
18 money in the Refunding Account together with a cash contribution from the County to purchase
19 certain Government Obligations (which obligations so purchased, are herein called "Acquired
20 Obligations "), bearing such interest and maturing as to principal and interest in such amounts and
21 at such times which, together with any necessary beginning cash balance, will provide for the
22 payment of.
-15- PzMWIC WB 0S wl
1 (1) Interest on the Refunded Bonds which will become due on
2 December 1, 2003; and
3 (2) The redemption price (100% of the principal amount thereof) on
4 December 1, 2003, of the Refunded Bonds.
5 Such Acquired Obligations shall be purchased at a yield not greater than the yield
6 permitted by the Code and regulations relating to acquired obligations in connection with
7 refunding bond issues.
8 The County hereby appoints the corporate trust department of U.S. Bank National
9 Association, Seattle, Washington, as the Escrow Agent for the Refunded Bonds (the "Escrow
10 Agent'). A beginning cash balance, if any, and Acquired Obligations shall be deposited
11 irrevocably with the Escrow Agent in an amount sufficient to defease the Refunded Bonds. The
12 proceeds of the Bonds remaining in the Refunding Account after acquisition of the Acquired
13 Obligations and provision for the necessary beginning cash balance shall be utilized to pay
14 expenses of the acquisition and safekeeping of the Acquired Obligations and expenses of the
15 issuance of the Bonds.
16 (c) Escrow Agreement. The Treasurer is authorized and directed to execute
17 and deliver to the Escrow Agent an Escrow Agreement substantially in the form attached to this
18 ordinance as Exhibit A, with such changes or modifications as the Treasurer, with the advice of
19 bond counsel to the County, consider necessary or advisable.
20 The County hereby irrevocably sets aside for and pledges to the payment of the Refunded
21 Bonds the moneys and obligations to be deposited with the Escrow Agent pursuant to the Escrow
22 Agreement to accomplish the plan of refunding and defeasance of the Refunded Bonds set forth
23 herein and in the Escrow Agreement. When all of the Refunded Bonds shall have been redeemed
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and retired, the County may cause to be transferred from the Refunding Account to the Bond
Fund any moneys not required for the purposes set forth above.
(d) Redemption of the Refunded Bonds. The County hereby irrevocably calls
for redemption on December 1, 2003, the Refunded Bonds in accordance with Sections 6 and 7
of the Refunded Bond Ordinance. Such call for redemption shall be irrevocable upon the
delivery of the Bonds to the initial purchasers thereof and the final establishment of the
Refunding Account and delivery of the Acquired Obligations and other funds specified herein to
the Escrow Agent.
The Escrow Agent is hereby authorized and directed to pay to the fiscal agency or
agencies of the State of Washington, sums sufficient to pay, when due, the payments specified in
subparagraphs (1) and (2) of subsection (a) above. All such sums shall be paid from the monies
and Acquired Obligations deposited with said Escrow Agent and the income therefrom and
proceeds thereof. All such sums so paid to said Agent shall be credited to the Refunding
Account. All moneys and Acquired Obligations deposited with said Escrow Agent and any
income therefrom shall be held, invested and applied in accordance with the provisions of this
ordinance and with the laws of the State of Washington for the benefit of the County and holders
of the Refunded Bonds.
The County will take such actions as are found necessary to see that all necessary and
proper fees, compensation and expenses of the Escrow Agent for the Refunded Bonds shall be
paid when due.
The Escrow Agent, acting in concert with the Treasurer, is hereby authorized and directed
to provide for the giving of notice of the redemption of such Refunded Bonds in accordance with
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P�MVNC WB 05XN 3
I the provisions of the Refunded Bond Ordinance. The costs of giving such notice shall be an
2 expense of the County.
3 (f) Finding of Defeasance. The Board hereby finds and determines that the
4 moneys and Acquired Obligations to be deposited with the Escrow Agent to pay the principal
5 and interest due and to become due on the Refunded Bonds are sufficient to pay such amounts
6 and will discharge and satisfy the obligations of the County under the Bond Ordinance and the
7 pledges, charges, trusts, covenants and agreements of the County therein made. The Refunded
8 Bonds shall be deemed to be defeased and no longer outstanding immediately upon the deposit of
9 such moneys and Acquired Obligations with the Escrow Agent.
10 Section 8. Pledge of Taxes and Credit. The Treasurer is hereby authorized to
11 establish a special fund of the County to be designated as the 2003 General Obligation Refunding
12 Bond Redemption Fund (the "Bond Fund "). On or before each date on which a payment of
13 principal of and interest on the Bonds is due and payable, the Treasurer shall deposit the amount
14 necessary to make such principal and /or interest payment into the Bond Fund and shall remit the
15 same to the Bond Registrar for the purpose of making such payment. The County hereby
16 irrevocably covenants that, unless the principal of and interest on the Bonds are paid from other
17 sources, it will make annual levies of taxes within and as a part of the tax levy permitted to the
18 County without a vote of its electors upon all of the property in the County subject to taxation in
19 amounts sufficient to pay such principal and interest as the same shall become due. The full
20 faith, credit and resources of the County are hereby irrevocably pledged for the annual levy and
21 collection of such taxes and for the prompt payment of such principal and interest.
22 Section 9. Defeasance. In the event that money and/or Government Obligations
23 maturing at such time or times and bearing interest to be earned thereon in amounts (together
-18- P \CM4 MW5P8 OSN 3
1 with such money, if necessary) sufficient to redeem and retire part or all of the Bonds in
2 accordance with their terms, are set aside in a special account of the County to effect such
3 redemption and retirement, and such moneys and the principal of and interest on such obligations
4 are irrevocably set aside and pledged for such purpose, then no further payments need be made
5 into the Bond Fund for the payment of the principal of and interest on the Bonds so provided for,
6 and such Bonds shall cease to be entitled to any lien, benefit or security of this ordinance except
7 the right to receive the moneys so set aside and pledged, and such Bonds shall be deemed not to
8 be outstanding hereunder.
9 Within 60 days of any defeasance of Bonds the Bond Registrar shall provide notice of
10 defeasance of Bonds to registered owners and to each NRMSIR and SID, if any, in accordance
11 with Section 11.
12 Section 10. Tax Covenants and Desienation.
13 (a) Arbitrage Covenant. The County hereby covenants that it will not make
14 any use of the proceeds of sale of the Bonds or any other funds of the County which may be
15 deemed to be proceeds of such Bonds pursuant to Section 148 of the Code which will cause the
16 Bonds to be "arbitrage bonds" within the meaning of said section and said Regulations. The
17 County will comply with the requirements of Section 148 of the Code (or any successor
18 provision thereof applicable to the Bonds) and the applicable Regulations thereunder throughout
19 the term of the Bonds.
20 (b) Private Person Use Limitation for Bonds. The County covenants that for
21 as long as the Bonds are outstanding, it will not permit:
22 (i) More than 10% of the Net Proceeds of the Bonds to be used for
23 any Private Person Use; and
19' PZ"%CMWSPB OW"3
I (ii) More than 10% of the principal or interest payments on the Bonds
2 in a Bond Year to be directly or indirectly: (A) secured by any interest in property used or to be
3 used for any Private Person Use or secured by payments in respect of property used or to be used
4 for any Private Person Use, or (B) derived from payments (whether or not made to the County) in
5 respect of property, or borrowed money, used or to be used for any Private Person Use.
6 The County further covenants that, if
7 (iii) More than five percent of the Net Proceeds of the Bonds are to be
8 used for any Private Person Use; and
9 (iv) More than five percent of the principal or interest payments on the
10 Bonds in a Bond Year are (under the terms of this ordinance or any underlying arrangement)
11 directly or indirectly: (A) secured by any interest in property used or to be used for any Private
12 Person Use or secured by payments in respect of property used or to be used for any Private
13 Person Use, or (B) derived from payments (whether or not made to the County) in respect of
14 property, or borrowed money, used or to be used for any Private Person Use, then, (1) any Private
15 Person Use of the projects described in subsection (iii) hereof or Private Person Use payments
16 described in subsection (iv) hereof that is in excess of the five percent limitations described in
17 such subsections (iii) or (iv) will be for a Private Person Use that is related to the state or local
18 governmental use of the project financed or refinanced with Bond proceeds, and (2) any Private
19 Person Use will not exceed the amount of Net Proceeds of the Bonds used for the state or local
20 governmental use portion of the projects to which the Private Person Use of such portion of such
21 project relates. The County further covenants that it will comply with any limitations on the use
22 of the projects by other than state and local governmental users that are necessary, in the opinion
23 of its bond counsel, to preserve the tax exemption of the interest on the Bonds. The covenants of
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1 this section are specified solely to assure the continued exemption from regular income taxation
2 of the interest on the Bonds.
3 (c) Bonds Designated "Qualified Tax- Exempt Obligations." The County
4 hereby designates the Bonds as "qualified tax- exempt obligations" for purchase by financial
5 institutions pursuant to Section 265 of the Code. The County does not anticipate that it will issue
6 more than $10,000,000 in "qualified tax - exempt obligations" during the year 2003.
7 Section 11. Undertaking to Provide Ongoing Disclosure.
8 (a) ContractlUndertaking. This section constitutes the County's written
9 undertaking for the benefit of the owners of the Bonds as required by Section (b)(5) of the Rule.
10 (b) Financial Statements /Operating Data. The County agrees to provide or
11 cause to be provided to each NRMSIR and to the SID, if any, in each case as designated by the
12 Council in accordance with the Rule, the following annual financial information and operating
13 data for the prior fiscal year (commencing September 30, 2004 for the fiscal year ending
14 December 31, 2003):
15 1. Annual financial statements showing ending fund balances
16 prepared in accordance with regulations prescribed by the State Auditor pursuant to
17 RCW 43.09.200 (or any successor statutes) from time to time and generally of the type included
18 in the official statement for the Bonds under the headings "Comparative General Fund Statement
19 of Revenues, Expenditures & Changes in Fund Balance";
20 2. The assessed valuation of taxable property in the County;
21 3. Property taxes due and property taxes collected;
22 4. Property tax levy rates per $1,000 of assessed valuation; and
23 5. Outstanding general obligation debt of the County.
-21- P1cMMCMW5PB OS 03
1 Such annual information and operating data described above shall be so provided on or
2 before the expiration of nine months after the end of the County's fiscal year. The County may
3 adjust such date if the County changes its fiscal year by providing written notice of the change of
4 fiscal year and the new reporting date to each then existing NRMSIR and the SID, if any. In lieu
5 of providing such annual financial information and operating data, the County may cross -
6 reference to other documents provided to the NRMSIR's, the SID or to the Council and, if such
7 document is a final official statement within the meaning of the Rule, available from the MSRB.
8 If not provided as part of the annual financial information discussed above, the County
9 shall provide the County's audited annual financial statement prepared in accordance with
10 regulations prescribed by the State Auditor pursuant to RCW 43.09.200 (or any successor
11 statutes), when and if available, to each then existing NRMSIR and the SID, if any.
12 (c) Material Events. The County agrees to provide or cause to be provided, in
13 a timely manner, to the SID, if any, and to each NRMSIR or to the MSRB notice of the
14 occurrence of any of the following events with respect to the Bonds, if material:
15 • Principal and interest payment delinquencies;
16 • Non - payment related defaults;
17 • Unscheduled draws on debt service reserves reflecting financial
18 difficulties;
19 • Unscheduled draws on credit enhancements reflecting financial
20 difficulties;
21 • Substitution of credit or liquidity providers, or their failure to perform;
22 • Adverse tax opinions or events affecting the tax- exempt status of the
23 Bonds;
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1 • Modifications to rights of owners;
2 • Optional, contingent or unscheduled Bond calls other than scheduled
3 sinking fund redemptions for which notice is given pursuant to
4 Exchange Act Release 34- 23856;
5 • Defeasances;
6 • Release, substitution or sale of property securing the repayment of the
7 Bonds; and
8 • Rating changes.
9 Solely for purposes of disclosure, and not intending to modify this undertaking, the
10 County advises that there is no property securing repayment of the Bonds, and there is no debt
11 service reserve fund or account for the Bonds, as the County lacks legal authority for either
12 measure. If further changes in the law permit such measures, and if the County subsequently
13 chooses to establish such reserves or provide such property as security for the Bonds, the County
14 will provide notice of such establishment or provision and undertake to provide notices of
15 material events relating thereto, should such events occur.
16 (d) Notification Upon Failure to Provide Financial Data. The County agrees
17 to provide or cause to be provided, in a timely manner, to each NRMSIR or to the MSRB and to
18 the SID, if any, notice of its failure to provide the annual financial information described in
19 subsection (b) above on or prior to the date set forth in subsection (b) above.
20 (e) Termination /Mod fcation. The County's obligations to provide annual
21 financial information and notices of material events shall terminate upon the defeasance, prior
22 redemption or payment in full of all of the Bonds. This section, or any provision hereof, shall be
23 null and void if the County (1) obtains an opinion of nationally recognized bond counsel to the
-23- Pw�M5PR oSIC 3
I effect that those portions of the Rule which require this section, or any such provision, we
2 invalid, have been repealed retroactively or otherwise do not apply to the Bonds; and (2) notifies
3 each then existing NRMSIR and the SID, if any, of such opinion and the cancellation of this
4 section. Notwithstanding any other provision of this ordinance, the County may amend this
5 Section 11 and any provision of this Section 11 may be waived with an approving opinion of
6 nationally recognized bond counsel.
7 In the event of any amendment of or waiver of a provision of this Section 11, the County
8 shall describe such amendment in the next annual report, and shall include, as applicable, a
9 narrative explanation of the reason for the amendment or waiver and its impact on the type (or in
10 the case of a change of accounting principles, on the presentation) of financial information or
I1 operating data being presented by the County. In addition, if the amendment relates to the
12 accounting principles to be followed in preparing financial statements, (1) notice of such change
13 shall be given in the same manner as for a material event under Subsection (c), and (II) the
14 annual report for the year in which the change is made should present a comparison (in narrative
15 form and also, if practical, in quantitative form) between the financial statements as prepared on
16 the basis of the new accounting principles and those prepared on the basis of the former
17 accounting principles.
18 (f) Bond Owner's Remedies Under This Section. A Bond owner's right to
19 enforce the provisions of this section shall be limited to a right to obtain specific enforcement of
20 the County's obligations hereunder, and any failure by the County to comply with the provisions
21 of this undertaking shall not be an event of default with respect to the Bonds under this
22 ordinance.
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1 (g) Compliance. The County is currently in compliance with its prior
2 undertakings for ongoing disclosure.
3 Section 12. Lost or Destroyed Bonds. If any Bonds are lost, stolen or destroyed, the
4 Bond Registrar may authenticate and deliver a new Bond or Bonds of like amount, maturity and
5 tenor to the Registered Owner upon the owner paying the expenses and charges of the Bond
6 Registrar and the County in connection with preparation and authentication of the replacement
7 Bond or Bonds and upon his or her filing with the Bond Registrar and the County evidence
8 satisfactory to both that such Bond or Bonds were actually lost, stolen or destroyed and of his or
9 her ownership, and upon furnishing the County and the Bond Registrar with indemnity
10 satisfactory to both.
I1 Section 13. Sale of Bonds. The Bonds shall be sold by negotiated sale to the
12 Underwriter, under the terms and conditions thereof as provided in its purchase contract
13 presented to the Council on this date and in this ordinance. Said purchase contract is hereby in
14 all respects accepted and approved, and either the County Executive or the Chair of the Council
15 is authorized to execute the purchase contract on behalf of the County.
16 The County Executive is hereby authorized to review and approve on behalf of the
17 County the preliminary and final Official Statements relative to the Bonds with such additions
18 and changes as may be deemed necessary or advisable to him. The Preliminary Official
19 Statement for the Bonds, is hereby deemed final for purposes of the Rule. The proper County
20 officials are hereby authorized and directed to do everything necessary for the prompt execution
21 and delivery of the Bonds to said purchaser and for the proper application and use of the
22 proceeds of sale thereof.
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I Section 14. Bond Insurance. In accordance with the offer of the Underwriter to
2 purchase the Bonds, the Council hereby approves the commitment of the Insurer to provide a
3 bond insurance policy guaranteeing the payment when due of principal of and interest on the
4 Bonds (the "Bond Insurance Policy"). The Council further authorizes and directs all proper
5 officers, agents, attorneys and employees of the County to cooperate with the Insurer in preparing
6 such additional agreements, certificates, and other documentation on behalf of the County as
7 shall be necessary or advisable in providing for the Bond Insurance Policy.
8 Section 15. Amending Section 7 of Ordinance No 98 -084. Section 7 of Ordinance
9 No. 98 -084 shall be amended to read as follows (deletions are shown as stricken text and
10 additions are shown as underscored):
11 Section 7. Disposition of Bond Proceeds. The accrued interest
12 received with respect to the Bonds shall be deposited into the Bond Fond and used
13 to pay interest on the Bonds coming due on June 1, 1999. The Treasurer has
14 heretofore established a special fund of the County designated as the "Civic
15 Center Building Improvement Fund" (the `Project Fund "). The balance of the
16 proceeds of sale of the Bonds shall be deposited in the Project Fund and shall be
17 expended solely to pay the cost of issuing and selling the Bonds and, together with
18 other available moneys of the County, shall be used to reimburse the County for
19 previously incurred costs and to complete the Project. Money in the Project Fund
20 shall be invested by the Treasurer, pending disbursement, in any legal investment
21 for County funds. [After completion of the Project, the proceeds of the Bond
22 may be used for other capital improvements or may be 11 ed to pay or defease the
23 Bonds or other outstanding general obligation bonds of the County.]
24
25 As amended by this ordinance, Ordinance No. 98 -084 is hereby ratified, approved and
26 confirmed.
27 Section 16. Severabilitv. If any one or more of the covenants or agreements provided
28 in this ordinance to be performed on the part of the County shall be declared by any court of
29 competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or
30 agreements, shall be null and void and shall be deemed separable from the remaining covenants
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and agreements of this ordinance and shall in no way affect the validity of the other provisions of
this ordinance or of the Bonds.
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Section 17. Effective Date. This ordinance shall become effective immediately upon
its adoption.
ADOPTED this nth day of May, 2003.
ATTEST:
Dana Brown - Davis,
Clerk of the County Council
COUNTY COUNCIL OF
WHATCOM COUNTY, WASHINGTON
Dan McShane, Chair
Barbara Brenner, Councilmember
Laurie Caskey- Schreiber, Councilmember
Crawford,
M.
L. Ward i ouncilmember
Sharon Roy,
APPROVED DENIED
Pete Kremen,
County Executive
Dated as of: , 2003
9"
P%CMW1CMW5PB OS "3
EXHIBIT A
ESCROW DEPOSIT AGREEMENT
WHATCOM COUNTY, WASHINGTON
LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, 2003
THIS ESCROW AGREEMENT, dated as of June 2, 2003 (herein, together with
any amendments or supplements hereto, called the "Agreement') is entered into by and between
Whatcom County, Washington (herein called the "County") and U.S. Bank National Association,
Seattle, Washington, as escrow agent (herein, together with any successor in such capacity, called
the "Escrow Agent'). The notice addresses of the County and the Escrow Agent are shown on
Exhibit A attached hereto and made a part hereof.
WITNESSETH:
WHEREAS, the County heretofore has issued and there presently remain
outstanding the obligations described in Exhibit B attached hereto (the "Refunded Bonds "); and
WHEREAS, pursuant to Ordinance No. 2003 - $adopted on May 6, 2003, (the
"Bond Ordinance "), the County has determined to issue its Limited Tax General Obligation
Refunding Bonds, 2003 (the `Bonds "); and
WHEREAS, the proceeds of the Bonds together with a cash contribution from
the County are being used for the purpose of providing funds to pay the costs of refunding the
Refunded Bonds; and
WHEREAS, the Escrow Agent has reviewed the Bond Ordinance and this
Agreement, and is willing to serve as Escrow Agent hereunder.
WHEREAS, Grant Thornton LLP, Certified Public Accountants, of Minneapolis,
Minnesota, have prepared a verification report which is dated June 2, 2003 (the "Verification
Report") relating to the source and use of funds available to accomplish the refunding of the
Refunded Bonds, the investment of such funds and the adequacy of such funds and investments
to provide for the payment of the debt service due on the Refunded Bonds.
WHEREAS, pursuant to the Bond Ordinance, the Refunded Bonds have been
designated for redemption prior to their scheduled maturity dates and, after provision is made for
such redemption, the Refunded Bonds will come due on December 1, 2003 (the "Call Date ") as
set forth in Exhibit C attached hereto and made a part hereof; and
WHEREAS, the County desires that, concurrently with the delivery of the Bonds
to the purchasers thereof, the proceeds of the Bonds, together with certain other available funds
of the County, shall be applied to purchase certain direct obligations of the United States of
America hereinafter defined as the "Escrowed Security" for deposit to the credit of the Escrow
A -1 P>cM %cmw5n DWM3
Fund created pursuant to the terms of this Agreement and to establish a beginning cash balance
(if needed) in such Escrow Fund;
NOW, THEREFORE, in consideration of the mutual undertakings, promises and
agreements herein contained, the sufficiency of which hereby are acknowledged, and to secure
the full and timely payment of principal of and the interest on the Refunded Bonds, the County
and the Escrow Agent mutually undertake, promise and agree for themselves and their respective
representatives and successors, as follows:
Article 1. Definitions
Section 1.1. Definitions.
Unless the context clearly indicates otherwise, the following terms shall have the
meanings assigned to them below when they are used in this Agreement:
Treasurer means the County Treasurer, or any successor to the functions of the
Treasurer.
Escrow Fund means the fund created by this Agreement to be established, held
and administered by the Escrow Agent pursuant to the provisions of this Agreement.
Escrowed Security means the United States Treasury Note described in Exhibit D
attached to this Agreement, or cash or other noncallable obligations substituted therefor pursuant
to Section 4.2 of this Agreement.
Paying Agent means the fiscal agency of the State of Washington, as the paying
agent for the Refunded Bonds, or any other fiscal agency appointed by the Treasurer.
Section 1.2. Other Definitions.
The terms "Agreement ,° "County," "Escrow Agent," "Bond Ordinance,"
"Verification Report ," "Refunded Bonds," and "Bonds" when they are used in this Agreement,
shall have the meanings assigned to them in the preamble to this Agreement.
Section 1.3. Interpretations.
The titles and headings of the articles and sections of this Agreement have been
inserted for convenience and reference only and are not to be considered a part hereof and shall
not in any way modify or restrict the terms hereof. This Agreement and all of the terns and
provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to
achieve the intended purpose of providing for the refunding of the Refunded Bonds in
accordance with applicable law.
A-2 PCMWzMW5P9 05/ 3
Article 2. Deposit of Funds and Escrowed Security
Section 2.1. Deposits in the Escrow Fund.
Concurrently with the sale and delivery of the Bonds the County shall deposit, or
cause to be deposited, with the Escrow Agent, for deposit in the Escrow Fund, the funds
sufficient to purchase the Escrowed Security and pay costs of issuance described in Exhibit D
attached hereto, and the Escrow Agent shall, upon the receipt thereof, acknowledge such receipt
to the County in writing.
Article 3. Creation and Operation of Escrow Fund
Section 3.1. Escrow Fund.
The Escrow Agent has created on its books a special trust fund and irrevocable
escrow to be known as the Refunding Account (the "Escrow Fund "). The Escrow Agent hereby
agrees that upon receipt thereof it will deposit to the credit of the Escrow Fund the funds and the
Escrowed Security described in Exhibit D attached hereto. Such deposit, all proceeds therefrom,
and all cash balances from time to time on deposit therein (a) shall be the property of the Escrow
Fund, (b) shall be applied only in strict conformity with the terms and conditions of this
Agreement, and (c) are hereby irrevocably pledged to the payment of the principal of and interest
on the Refunded Bonds, which payment shall be made by timely transfer of such amounts as
provided for in Section 3.2 hereof When the final transfer has been made for the payment of
such principal of and interest on the Refunded Bonds, any balance then remaining in the Escrow
Fund shall be transferred to the County, and the Escrow Agent shall thereupon be discharged
from any further duties hereunder.
Section 3.2. Payment of Principal and Interest.
The Escrow Agent is hereby irrevocably instructed to transfer to the Paying Agent
from the cash balances on deposit in the Escrow Fond, the amounts required to pay the principal
of the Refunded Bonds on the Call Date and interest thereon to the Call Date as shown in
Exhibit C attached hereto.
Section 3.3. Sufficiency of Escrow Fund.
The County represents that, based upon the information provided in the
Verification Report, the receipt of the principal of and interest on the Escrowed Security will
assure that the cash balance on deposit from time to time in the Escrow Fund will be at all times
sufficient to provide moneys for transfer to the Paying Agent to pay the interest on and
redemption price (100 %) of the Refunded Bonds on the Call Date, all as more fully set forth in
Exhibit E attached hereto. If, for any reason, at any time, the cash balances on deposit or
scheduled to be on deposit in the Escrow Fund shall be insufficient to transfer the amounts
required by the Paying Agent to make the payments set forth in Section 3.2. hereof, the County
shall timely deposit in the Escrow Fund, from any funds that we lawfully available therefor,
A-3 P\CM MWSPB 05ro 3
additional funds in the amounts required to make such payments. Notice of any such
insufficiency shall be given promptly as hereinafter provided, but the Escrow Agent shall not in
any manner be responsible for any insufficiency of funds in the Escrow Fund or the County's
failure to make additional deposits thereto.
Section 3.4. Trust Fund.
The Escrow Agent shall hold at all times the Escrow Fund, the Escrowed Security
and all other assets of the Escrow Fund, wholly segregated from all other funds and securities on
deposit with the Escrow Agent; it shall never allow the Escrowed Security or any other assets of
the Escrow Fund to be commingled with any other funds or securities of the Escrow Agent; and
it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The Escrowed
Security and other assets of the Escrow Fund shall always be maintained by the Escrow Agent as
trust funds for the benefit of the owners of the Refunded Bonds; and a special account thereof
shall at all times be maintained on the books of the Escrow Agent. The amounts received by the
Escrow Agent under this Agreement shall not be considered as a banking deposit by the County,
and the Escrow Agent shall have no right to title with respect thereto except as a trustee and
Escrow Agent under the terms of this Agreement.
Article 4. Limitation on Investments
Section 4.1. Investments.
Except for the initial investment in the Escrowed Security, and except as provided
in Section 4.2 hereof, the Escrow Agent shall not have any power or duty to invest or reinvest
any money held hereunder, or to make substitutions of the Escrowed Security, or to sell, transfer,
or otherwise dispose of the Escrowed Security.
Article 5. Application of Cash Balances
Section 5.1. In General.
Except as provided in Sections 2.1, 3.2 and 4.2 hereof, no withdrawals, transfers,
or reinvestment shall be made of cash balances in the Escrow Fund. Cash balances shall be held
by the Escrow Agent in United States currency as cash balances as shown on the books and
records of the Escrow Agent and, except as provided herein, shall not be reinvested by the
Escrow Agent provided, however, a conversion to currency shall not be required (i) for so long
as the Escrow Agent's internal rate of return does not exceed 20 %, or (ii) if the Escrow Agent's
internal rate of return exceeds 20 %, the Escrow Agent receives a letter of instructions,
accompanied by the opinion of nationally recognized bond counsel, approving the assumed
reinvestment of such proceeds at such higher yield.
A-4 P1 MWZMMPB MOM3
Article 6. Redemption of Refunded Bonds
Section 6.1. Call for Redemption.
The County hereby irrevocably calls the Refunded Bonds for redemption on the
Call Date, as shown in the Verification Report and on Appendix A attached hereto.
Section 6.2. Notice of Redemption/Notice of Defeasance.
The Escrow Agent agrees to give a notice of defeasance and a notice of the
redemption of the Refunded Bonds to the Paying Agent for dissemination in accordance with the
terms of Ordinance No. 93 -010 of the County Council and in substantially the forms attached
hereto as Appendices A and B attached hereto and as described on said Appendices A and B to
the Paying Agent for distribution as described therein. The notice of defeasance shall be given
immediately following the execution of this Agreement, and the notice of redemption shall be
given in accordance with said Ordinance No. 93 -010. The Escrow Agent hereby certifies that
provision satisfactory and acceptable to the Escrow Agent has been made for the giving of notice
of redemption of the Refunded Bonds.
Article 7. Records
Section 7.1. Records.
The Escrow Agent will keep books of record and account in which complete and
accurate entries shall be made of all transactions relating to the receipts, disbursements,
allocations and application of the money and Escrowed Security deposited to the Escrow Fund
and all proceeds thereof, and such books shall be available for inspection during business hours
and after reasonable notice.
Article 8. Concerning the Paying Agent and Escrow Agent
Section 8.1. Representations.
The Escrow Agent hereby represents that it has all necessary power and authority
to enter into this Agreement and undertake the obligations and responsibilities imposed upon it
herein, and that it will carry out all of its obligations hereunder.
Section 8.2. Limitation on Liability.
The liability of the Escrow Agent to transfer funds for the payment of the
principal of and interest on the Refunded Bonds shall be limited to the proceeds of the Escrowed
Security and the cash balances from time to time on deposit in the Escrow Fund.
Notwithstanding any provision contained herein to the contrary, the Escrow Agent shall have no
liability whatsoever for the insufficiency of funds from time to time in the Escrow Fund or any
A-J P%CMMCMWSPB OS WM
failure of the obligors of the Escrowed Security to make timely payment thereon, except for the
obligation to notify the County promptly of any such occurrence.
The recitals herein and in the proceedings authorizing the Bonds shall be taken as
the statements of the County and shall not be considered as made by, or imposing any obligation
or liability upon, the Escrow Agent.
The Escrow Agent is not a party to the proceedings authorizing the Bonds or the
Refunded Bonds and is not responsible for nor bound by any of the provisions thereof (except to
the extent that the Escrow Agent may be a place of payment and paying agent and/or a paying
agent/registrar therefor). In its capacity as Escrow Agent, it is agreed that the Escrow Agent need
look only to the terms and provisions of this Agreement.
The Escrow Agent makes no representations as to the value, conditions or
sufficiency of the Escrow Fund, or any part thereof, or as to the title of the County thereto, or as
to the security afforded thereby or hereby, and the Escrow Agent shall not incur any liability or
responsibility in respect to any of such matters.
It is the intention of the parties hereto that the Escrow Agent shall never be
required to use or advance its own funds or otherwise incur personal financial liability in the
performance of any of its duties or the exercise of any of its rights and powers hereunder.
The Escrow Agent shall not be liable for any action taken or neglected to be taken
by it in good faith in any exercise of reasonable care and believed by it to be within the discretion
or power conferred upon it by this Agreement, nor shall the Escrow Agent be responsible for the
consequences of any error ofjudgment; and the Escrow Agent shall not be answerable except for
its own action, neglect or default, nor for any loss unless the same shall have been through its
negligence or want of good faith.
Unless it is specifically otherwise provided herein, the Escrow Agent has no duty
to determine or inquire into the happening or occurrence of any event or contingency or the
performance or failure of performance of the County with respect to arrangements or contracts
with others, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund, to
dispose of and deliver the same in accordance with this Agreement. If, however, the Escrow
Agent is called upon by the terms of this Agreement to determine the occurrence of any event or
contingency, the Escrow Agent shall be obligated, in making such determination, only to exercise
reasonable care and diligence, and in event of error in making such determination the Escrow
Agent shall be liable only for its own misconduct or its negligence. In determining the
occurrence of any such event or contingency the Escrow Agent may request from the County or
any other person such reasonable additional evidence as the Escrow Agent in its discretion may
deem necessary to determine any fact relating to the occurrence of such event or contingency, and
in this connection may make inquiries of, and consult with, among others, the County at any
time.
A'6 PIL MWSPB 0A 3
Section 8.3. Compensation.
The County shall pay to the Escrow Agent fees for performing the services
hereunder and for the expenses incurred or to be incurred by the Escrow Agent in the
administration of this Agreement pursuant to the terms of the Fee Schedule attached hereto as
Appendix B. The Escrow Agent hereby agrees that in no event shall it ever assert any claim or
lien against the Escrow Fund for any fees for its services, whether regular or extraordinary, as
Escrow Agent, or in any other capacity, or for reimbursement for any of its expenses as Escrow
Agent or in any other capacity.
Section 8.4. Successor Escrow Agents.
If at any time the Escrow Agent or its legal successor or successors should
become unable, through operation or law or otherwise, to act as escrow agent hereunder, or if its
property and affairs shall be taken under the control of any state or federal court or administrative
body because of insolvency or bankruptcy or for any other reason, a vacancy shall forthwith exist
in the office of Escrow Agent hereunder. In such event the County, by appropriate action,
promptly shall appoint an Escrow Agent to fill such vacancy. If no successor Escrow Agent shall
have been appointed by the County within 60 days, a successor may be appointed by the owners
of a majority in principal amount of the Refunded Bonds then outstanding by an instrument or
instruments in writing filed with the County, signed by such owners or by their duly authorized
attorneys -in -fact. If, in a proper case, no appointment of a successor Escrow Agent shall be made
pursuant to the foregoing provisions of this section within three months after a vacancy shall
have occurred, the owner of any Refunded Bond may apply to any court of competent
jurisdiction to appoint a successor Escrow Agent. Such court may thereupon, after such notice, if
any, as it may deem proper, prescribe and appoint a successor Escrow Agent.
Any successor Escrow Agent shall be a corporation organized and doing business
under the laws of the United States or the State of Washington, authorized under such laws to
exercise corporate trust powers, having an office and place of business in the State of
Washington, having a combined capital and surplus of at least $100,000,000 and subject to the
supervision or examination by federal or state authority.
Any successor Escrow Agent shall execute, acknowledge and deliver to the
County and the Escrow Agent an instrument accepting such appointment hereunder, and the
Escrow Agent shall execute and deliver an instrument transferring to such successor Escrow
Agent, subject to the terms of this Agreement, all the rights, powers and trusts of the Escrow
Agent hereunder. Upon the request of any such successor Escrow Agent, the County shall
execute any and all instruments in writing for more fully and certainly vesting in and confirming
to such successor Escrow Agent all such rights, powers and duties.
The obligations assumed by the Escrow Agent pursuant to this Agreement may be
transferred by the Escrow Agent to a successor Escrow Agent if (a) the requirements of this
Section 8.4 are satisfied; (b) the successor Escrow Agent has assumed all the obligations of the
Escrow Agent under this Agreement; and (c) all of the Escrowed Security and money held by the
A -7 vicM%CMwsvB MOMI
Escrow Agent pursuant to this Agreement have been duly transferred to such successor Escrow
Agent.
Article 9. Miscellaneous
Section 9.1. Notice.
Any notice, authorization, request, or demand required or permitted to be given
hereunder shall be in writing and shall be deemed to have been duly given when mailed by
registered or certified mail, postage prepaid addressed to the County, the Treasurer or the Escrow
Agent at the address shown on Exhibit attached hereto. The United States Post Office
registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence
of the date and fact of delivery. Any party hereto may change the address to which notices are to
be delivered by giving to the other parties not less than ten days prior notice thereof.
Section 9.2. Termination of Responsibilities.
Upon the taking of all the actions as described herein by the Escrow Agent, the
Escrow Agent shall have no further obligations or responsibilities hereunder to the County, the
owners of the Refunded Bonds or to any other person or persons in connection with this
Agreement.
Section 9.3. Binding Agreement.
This Agreement shall be binding upon the County and the Escrow Agent and their
respective successors and legal representatives, and shall inure solely to the benefit of the owners
of the Refunded Bonds, the County, the Escrow Agent and their respective successors and legal
representatives.
Section 9.4. Severability.
In case any one or more of the provisions contained in this Agreement shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Agreement, but this Agreement
shall be construed as if such invalid or illegal or unenforceable provision had never been
contained herein.
Section 9.5. Washington Law Governs.
This Agreement shall be governed exclusively by the provisions hereof and by the
applicable laws of the State of Washington.
A -g PZM %CMWSPB 0"W3
Section 9.6. Time of the Essence.
Time shall be of the essence in the performance of obligations from time to time
imposed upon the Escrow Agent by this Agreement.
Section 9.7. Amendments.
This Agreement shall not be amended except to cure any ambiguity or formal
defect or omission in this Agreement. No amendment shall be effective unless the same shall be
in writing and signed by the parties thereto. No such amendment shall adversely affect the rights
of the holders of the Refunded Bonds. No such amendment shall be made without first receiving
written confirmation from the rating agencies, (if any) which have rated the Refunded Bonds that
such administrative changes will not result in a withdrawal or reduction of its rating then
assigned to the Refunded Bonds. If this Agreement is amended, prior written notice and copies
of the proposed changes shall be given to the rating agencies which have rated the Refunded
Bonds.
EXECUTED as of the date first written above.
WHATCOM COUNTY, WASHINGTON
IWO
A-9 P \CM4 m5P0 0S &03
Authorized Signer
Exhibit A
- Addresses of the County /County Treasurer and the Escrow Agent
Exhibit B
- Description of the Refunded Bonds
Exhibit C
- Schedule of Debt Service on Refunded Bonds
Exhibit D
- Description of Beginning Cash Deposit (if any) and Escrowed Security
Exhibit E
- Escrow Fund Cash Flow
Appendix A
- Notice of Redemption
Appendix B
- Notice of Defeasance
Appendix C
- Fee Schedule
A-9 P \CM4 m5P0 0S &03
EXHIBIT A
Addresses of the County /County Treasurer and Escrow Agent
County: Whatcom County Treasurer
311 Grand Avenue, Suite 104
P.O. Box 5268
Bellingham, WA 98225
Escrow Agent: U.S. Bank National Association
1420 Fifth Avenue, Seventh Floor
Seattle, WA 98101
Attention: Corporate Trust Department
A -A -1 PCMWICMW5PB 05KK 3
EXHIBIT B
Description of the Refunded Bonds
Whatcom County, Washington
Limited Tax General Obligation Bonds, 1993
Maturity Years
(December 1) Principal Amounts Interest Rates
2004 $ 345,000 5.10%
2005 365,000 5.20
2006 385,000 5.35
2007 405,000 5.60
2008 430,000 5.70
2009 460,000 5.75
2010 485,000 5.80
2012 1,065,000 5.75
A -B -1 PkCa %cawsve OVOW3
EXHIBIT C
Schedule of Debt Service on Refunded Bonds
Principal/
Date Interest Redemption Price Total
12/01/2003 $ 110,090.00 $ 3,940,000.00 $ 43050,090.00
Total $ 110,090.00 $ 35940,000.00 $ 4,050,090.00
A -C -1 p %CM %CM 5PB OWM3
EXHIBIT D
Escrow Deposit
1. Cash $240.00
II. Other Obligations
Maturity Principal
Interes Accrued
Description Date
Amount
t Rate Cost
Interest
Escrow Verification Fee (Grant Thornton)
2,500.00
OS Printing and Mailing Costs (SNW)
T -Note 11/30/2003
$3,990,000.00
3.00% $4,032,376.03
$654.1 0
TOTAL
$3,990,000.00
$4,032,376.03
$654.10
III. Costs of Issuance
Escrow Agent Fee (U.S. Bank)
$ 750.00
Bond Counsel Fee (PGE)
8,600.00
Escrow Verification Fee (Grant Thornton)
2,500.00
OS Printing and Mailing Costs (SNW)
15300.00
Rating Agency (Moody's)
6,500.00
TOTAL: $ 19,650.00
T43U33,U3U. 13
$4,0335030.13
A-D-1 P,CM�"M B 05 "3
Date
06/02/2003
11/30/2003
12/01/2003
EXHIBIT E
Escrow Fund Cash Flow
Escrow
Net Escrow
Excess
Cash
Requirement
Receipts
Receipts
Balance
$ —
$ 240.00
$ 240.00
$ 240.00
--
4,049,850.00
4,049,850.00
4,050,090.00
4.050 090.00
(4,050,090.00
0.00
$ 4,050,090.00
$ 4,050,090.00
$ 0.00
A -E -1
P%CMMCMWSPB OS W3
APPENDIX A -1
Notice of Redemption'
Whatcom County, Washington
Limited Tax General Obligation Bonds, 1993
NOTICE IS HEREBY GIVEN that Whatcom County, Washington has called for
redemption on December 1, 2003, its then outstanding Limited Tax General Obligation Bonds,
1993 (the "Bonds ").
The Bonds will be redeemed at a price of one hundred percent (100 %) of their
principal amount, plus interest accrued to December 1, 2003. The redemption price of the Bonds
is payable on presentation and surrender of the Bonds at the office of:
The Bank of New York
Wells Fargo Bank, National
Fiscal Agency -State of
Association
Washington -or-
Corporate Trust Department
101 Barclay, 7" Floor East
14th Floor - M/S 257
New York, NY 10286
999 Third Avenue
962455GPO
Seattle, WA 98104
Interest on all Bonds or portions thereof which are redeemed shall cease to accrue
on December 1, 2003.
The following
Maturity Years
(December l)
Bonds are being redeemed:
Principal Interest
Amounts Rates
CUSIP Nos.
2004
$ 345,000
5.10%
962455GN5
2005
365,000
5.20
962455GPO
2006
385,000
5.35
962455GQ8
2007
405,000
5.60
962455GR6
2008
430,000
5.70
962455GS4
2009
460,000
5.75
962455GT2
2010
485,000
5.80
962455GU9
2012
1,065,000
5.75
962455GW5
' This notice shall be given not more than 60 nor less than 30 days prior to December 1, 2003 by first
class mail to each registered owner of the Refunded Bonds. In addition notice shall be mailed at least 35
days prior to December 1, 2003 to The Depository Trust Company of New York, New York; Midwest
Securities Trust Company of Chicago, Illinois; Philadelphia Depository Trust Company of Philadelphia,
Pennsylvania; Seattle- Northwest Securities Corporation Seattle, Washington; Moody's Investors Service
and Standard & Poor's.
Page 1 - Appendix A -1 P,cM %CMw5P9 Ce W3
By Order of Whatcom County, Washington
The Bank of New York, as Paying Agent
Dated:
Under the Interest and Dividend Tax Compliance Act of 1983, payor may be
required to withhold 30% of the redemption price from any Bondowner who fails to provide to
payor and certify under penalties of perjury, a correct taxpayer identifying number (employer
identification number or social security number, as appropriate) or an exemption certificate on or
before the date the Bonds are presented for payment. Bondowners who wish to avoid the
application of these provisions should submit a completed Form W -9 when presenting their
Bonds.
Page 2 - Appendix A -1 PZMw m 5PB 0s &03
APPENDIX B -1
Notice of Defeasance
Whatcom County, Washington
Limited Tax General Obligation Bonds, 1993
NOTICE IS HEREBY GIVEN to the owners of that portion of the above captioned bonds
with respect to which, pursuant to an Escrow Agreement dated June 2, 2003, by and between
Whatcom County, Washington (the "County") and U.S. Bank National Association, Seattle,
Washington (the "Escrow Agent'), the County has deposited into an escrow account, held by the
Escrow Trustee, cash and non- callable direct obligations of the United States of America, the
principal of and interest on which, when due, will provide money to pay each year, to and
including the respective maturity or redemption dates of such bonds so provided for, the principal
thereof and interest thereon (the "Defeased Bonds "). Such Defeased Bonds are therefore deemed
to be no longer outstanding pursuant to Ordinance No. 93 -010 of the County authorizing the
Defeased Bonds, but will be paid by application of the assets in such escrow.
The Defeased Bonds are described as follows:
Whatcom County, Washington Limited Tax General Obligation Bonds, 1993.
(Dated March
1, 1993)
Maturity Years
Par Amount
Interest
Call Date
(December 1)
Defeased
Rates
(100 %).
2004
$ 345,000
5.10%
12/01/2003
2005
365,000
5.20
12/01/2003
2006
385,000
5.35
12/01/2003
2007
405,000
5.60
12/01/2003
2008
430,000
5.70
12/01/2003
2009
460,000
5.75
12/01/2003
2010
485,000
5.80
12/01/2003
2012
1,065,000
5.75
12/01/2003
Page 1 - Appendix B -1 RCMWl MWSPB MW3
APPENDIX C
Fee Schedule
Escrow Agent Fee: $750.00
Page 1 - Appendix C pftc am 5PB Ov W3
CERTIFICATE
1, the undersigned, Clerk of the County Council of Whatcom County, Washington, (the
"County ") and keeper of the records of the County Council ( "Council'), DO HEREBY
CERTIFY:
That the attached ordinance is a true and correct copy of Ordinance No. 2003 -a
of the Council (herein called the "Ordinance "), duly adopted at a regular meeting thereof held on
the 6th day of May, 2003.
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 regular meeting was given;
that a legal quorum was present throughout the meeting and a legally sufficient number of
members of the Council voted in the proper manner for the adoption of the Ordinance; that all
other requirements and proceedings incident to the proper adoption 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 6`h day of May, 2003.
k l'
County
P1 WCMMPB OSM3
CERTIFICATE OF BOND COUNSEL REGARDING
BOND ORDINANCE
I, the undersigned, bond counsel to Whatcom County, Washington (the "County') in
connection with the issuance of their Limited Tax General Obligation Refunding Bonds, 2003
(the "Bonds ") hereby certify that the Ordinance authorizing the issuance of the Bonds and having
the following title:
AUTHORIZING THE ISSUANCE OF LIMITED TAX GENERAL OBLIGATION
REFUNDING BONDS
IN THE AMOUNT OF $35385,000
is approved as to legal form.
Dated as of this 6`h day of May, 2003.
Cynthia M. Weed
N QM520�WC ;CM MW 0330E