HomeMy WebLinkAboutord1997-009WHATCOM COUNTY COUNCIL AGENDA BILL NO. 1997 - 75
.LEARANCES Date Date Received in Council Office Agenda Date Assigned To
SUBJECT.-
Ordinance authorizing issuance limited Tax General Obligation & Refunding Bonds
ATTACHMENTS
Bond Ordinance
SUMMARY STATEMENT.•
Related County Contract #: I Should the Clerk schedule a hearing? (Y/N) N Requested Date:
This bond ordinance authorizes the issuance of bonds for $10 Million for Whatcom County. A major portion of the issue will be
designated to refund the 1991 Whatcom County Limited Tax General Obligation Bonds. This will save approximately $400,000 -
'600,000 in interest payments for Whatcom County tax payers. In addition, $2,045,365 is a new debt issue to repay a loan made
the Current Expense fund from the Road fund for the courthouse construction settlement agreement.
RECOMMENDED MOTION (for final action):
COUNCIL ACTION TAKEN
2/11/97: Introduced
2/25/97: Adopted 5 - 2, Brown & Brenner opposed. Ord. #97 -009
alated File Numbers: Ordinance or Resolution Number (this item only):
097 -009
Orig. Dept.: Treasurer
Introduction
Division Head:
Dept. Head:
Prosecutor:
Budget:
Executive:
SUBJECT.-
Ordinance authorizing issuance limited Tax General Obligation & Refunding Bonds
ATTACHMENTS
Bond Ordinance
SUMMARY STATEMENT.•
Related County Contract #: I Should the Clerk schedule a hearing? (Y/N) N Requested Date:
This bond ordinance authorizes the issuance of bonds for $10 Million for Whatcom County. A major portion of the issue will be
designated to refund the 1991 Whatcom County Limited Tax General Obligation Bonds. This will save approximately $400,000 -
'600,000 in interest payments for Whatcom County tax payers. In addition, $2,045,365 is a new debt issue to repay a loan made
the Current Expense fund from the Road fund for the courthouse construction settlement agreement.
RECOMMENDED MOTION (for final action):
COUNCIL ACTION TAKEN
2/11/97: Introduced
2/25/97: Adopted 5 - 2, Brown & Brenner opposed. Ord. #97 -009
alated File Numbers: Ordinance or Resolution Number (this item only):
097 -009
ORDINANCE NO. 97 -009
AUTHORIZING THE ISSUANCE OF LIMITED TAX GENERAL OBLIGATION AND
REFUNDING BONDS IN THE AMOUNT OF $9,990,000
Table Of Contents*
Section1.
Definitions ...........................................................................
..............................3
Section 2.
Authorization of Bonds ........................................................
..............................6
Section 3.
Place and Medium of Payment ..............................................
..............................8
Section4.
Registration ..........................................................................
..............................8
Section 5.
Redemption and Purchase of Bonds ....................................
.............................12
Section 6.
Form of Bonds ....................................................................
.............................15
Section 7.
Execution of Bonds ..............................................................
.............................18
Section 8.
Advance Refunding Account ...............................................
.............................19
Section 9.
Call For Redemption of Refunded Bonds .............................
.............................20
Section 10.
Interfund Loan ....................................................................
.............................21
Section 11.
Pledge of Taxes and Credit ..................................................
.............................22
Section 12.
Defeasance ..........................................................................
.............................22
Section 13.
Tax Covenants and Designation .........................................
.............................23
Section 14.
Undertaking to Provide Ongoing Disclosure ........................
.............................24
Section15.
Sale of Bonds ...................:.....................................:............
.............................27
Section 16.
Payments Under the Policy ..................................................
.............................28
Section17..
Severability .........................................................................
.............................30
Section 18.
Effective Date ...................................................................
............................... 31
* This table of contents is not a part of this ordinance; it is included for convenience of the
reader only.
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INTRODUCED BY: Consent
PROPOSED BY: Treasurer
DATE INTRODUCED: 2/11/97
ORDINANCE NO. 97 -009
AN ORDINANCE OF THE COUNTY COUNCIL OF WHATCOM
COUNTY, WASHINGTON, PROVIDING FOR THE ISSUANCE
AND SALE OF GENERAL OBLIGATION AND REFUNDING
BONDS OF THE COUNTY IN THE AGGREGATE PRINCIPAL
AMOUNT OF $9,990,000 FOR THE PURPOSE OF REPAYING
AN INTERFUND LOAN INCURRED IN PAYING PART OF
THE COSTS OF THE COUNTY COURTHOUSE AND
ADMINISTRATION BUILDING AS AUTHORIZED BY
ORDINANCE OF THE COUNTY COUNCIL, AND FOR THE
PURPOSE OF REFUNDING CERTAIN OUTSTANDING
GENERAL OBLIGATION BONDS OF THE COUNTY;
PROVIDING AND AUTHORIZING THE PURCHASE OF
CERTAIN OBLIGATIONS WITH THE PROCEEDS OF THE
SALE OF A PORTION OF SUCH BONDS AND FOR THE USE
AND APPLICATION OF THE MONEYS TO BE DERIVED
FROM SUCH INVESTMENTS; PROVIDING FOR THE
REDEMPTION OF THE OUTSTANDING BONDS TO BE
REFUNDED; PROVIDING THE DATE, FORM, TERMS AND
MATURITIES OF THE BONDS TO BE ISSUED AND FOR
LIMITED TAX LEVIES TO PAY THE PRINCIPAL THEREOF
AND INTEREST THEREON; AUTHORIZING A
PRELIMINARY OFFICIAL STATEMENT AND APPROVING
THE SALE OF SUCH BONDS.
WHEREAS, the County Council (the "Council ") of Whatcom County, Washington (the
"County ") for the purpose of paying a portion of the costs of the County Courthouse and
Administration Building (the "Courthouse Project ") issued $10,750,000 of limited tax general
obligation bonds, pursuant to Ordinance No. 91 -045 (the "1991 Bond Ordinance ") which remain
outstanding in the principal amount of $9,575,000 and mature and bear interest as follows:
Maturities
(August 1) Principal Amounts Interest Rates
1997 $ 350,000 6.1%
1998 375,000 6.2
1999
425,000
6.3
2000
475,000
6.4
2001
500,000
7.5
2002
550,000
6.6
2003
575,000
6.7
2004
625,000
6.8
2005
650,000
6.9
2006
700,000
7.0
2007
750,000
7.0
2008
800,000
7.0
2011
2,800,000
7.0
1 (the " 1991 Bonds "); and
2 WHEREAS, the 1991 Bond Ordinance authorizes the defeasance and redemption of the
3 1991 Bonds maturing on August 1, 2002, in advance of their scheduled maturity on August 1,
4 2001, or any date thereafter, at a price of par plus accrued interest to the date of redemption; and
5 WHEREAS, after due consideration it appears to this Council that the 1991 Bonds
6 maturing on and after August 1, 2002 t(the "Refunded Bonds ") may be defeased and refunded by
7 the proceeds of a portion of the bonds herein authorized (hereinafter defined as the "Advance
8 Refunding Bonds ") at a substantial savings to the County and its taxpayers; and
9 WHEREAS, in order to effect such refunding in the manner that will be most
10 advantageous to the County and its taxpayers, it is hereby found necessary and advisable that
11 certain "Acquired Obligations" (hereinafter identified) be purchased out of the proceeds of sale of
12 the Advance Refunding Bonds; and
13 WHEREAS, pursuant to Ordinance No. AB91 -182A, and the County established an
14 interfund loan from the Whatcom County Road Fund to the Courthouse Expansion Fund in the
15 amount of $2,045,365; and
16 WHEREAS, Ordinance No. AB91 -182A provided that the repayment of the Interfund
17 Loan would be made from a future financing; and
18 WHEREAS, it.appears to the Council that it is in the best interest of the County that the
19 Interfund Loan be refinanced and the Refunded Bonds be refunded with the proceeds of the
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I Advance Refunding Bonds through a single issue of general obligation and refunding bonds in the
2 aggregate principal amount of $9,990,000 (the "1997 Bonds "); and
3 WHEREAS, it appears. to the Council that it is in the best interest of the County that the
4 written offer of Seattle- Northwest Securities Corporation, Seattle, Washington, to underwrite the
5 Bonds be accepted;
6 NOW, THEREFORE, THE WHATCOM COUNTY COUNCIL DOES ORDAIN, as
7 follows:
8 Section 1. Definitions. As used in this ordinance, the following words shall have the
9 following meanings:
10 "Acquired Obligations" means the Government Obligations acquired by the County under
11 the terms of this ordinance and the Escrow. Agreement to effect the defeasance and refunding of
12 the Refunded Bonds.
13 "Advance Refunding Account" means the account by that name established within the
14 1991 Bond Fund pursuant to Section 8 of this ordinance.
15 "Advance Refunding Bonds" means the $7,960,000 portion of the Bonds issued pursuant
16 to this ordinance for the purpose of refunding the Refunded Bonds.
17 "Bond Fund" means the special fund of the County designated as the "1997 General
18 Obligation Bond Redemption Fund" and maintained in the office of the Treasurer.
19 "Bond Register" means the registration books for the Bonds, maintained by the Bond
20 Registrar, for the purpose of complying with the requirements of Section 149 of the Internal
21 Revenue Code of 1986, as amended, and listing, inter alia, the names and addresses of all
22 registered owners of Bonds.
23 "Bond Registrar" means the fiscal agency of the State of Washington in either Seattle,
24 Washington, or New York, New York, for the purposes of registering and authenticating the
25 Bonds, maintaining the Bond Register, effecting transfer of ownership of the Bonds and paying
26 interest on and principal of the Bonds.
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I "Bonds" means the $9,990,000 of Whatcom County, Washington, Limited Tax General
2 Obligation and Refunding Bonds, 1997, issued pursuant to this ordinance, consisting of the
3 Refunding Bonds and the Advance Refunding Bonds.
4 "Code" means the federal Internal Revenue Code of 1986, as amended from time to time,
5 and the applicable regulations thereunder.
6 "Commission" means the Securities and Exchange Commission.
7 "Council" means the duly constituted County Council of Whatcom County as the general
8 legislative authority of the County.
9 "County" means Whatcom County, Washington, a political subdivision, duly organized
10 and existing under and by virtue of its Charter and the laws of the State of Washington.
11 "Courthouse Project" means the renovated and expanded County Courthouse and
12 Administration Building project, approved pursuant to Ordinance No. 91 -019, passed on April 2,
13 1991.
14 "DTC" means The Depository Trust Company, New York, New York, a limited purpose
15 trust company organized under the laws of the State of New York, as depository for the Bonds
16 pursuant to Section 4 hereof.
17 "Escrow Agreement" means the Escrow Deposit Agreement to be dated as of the date of
18 closing and delivery of the Advance Refunding Bonds substantially in the form attached hereto as
19 Exhibit A.
20 "Escrow Agent" means First Trust National Association.
21 "Government Obligations" means those 'obligations now or hereafter defined as such in
22 chapter 39.53 RCW.
23 "Insurer" means MBIA Insurance Corporation, a stock insurance company incorporated
24 under the laws of the State of New York.
25 "Interfund Loan" means the loan of $2,045,365 from the County's Road Fund to the
26 Courthouse Expansion Fund for the purpose of paying costs and a settlement agreement related
27 to the Courthouse Project.
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I "Letter of Representation" means a blanket issuer letter of representations from the
2 County to DTC.
3 "MSRB" means the Municipal Securities Rulemaking Board or any successor to its
4 functions.
5 "Net Proceeds." when used with reference to the Bonds, means the principal amount of
6 the Bonds, plus accrued interest and original issue premium, if any, and less original issue
7 discount.
8 "NRMSIR" means a nationally recognized municipal securities information repository.
9 "1991 Bond Fund" means the Whatcom County, Limited Tax General Obligation Bond
10 Redemption Fund, 1991 created pursuant to the 1991 Bond Ordinance.
11 "1991 Bond Ordinance" means Ordinance No. 91 -045, passed by the County Council of
12 Whatcom County on July 23, 1991.
13 "1991 Bonds" means the Whatcom County, Washington Limited Tax General Obligation
14 Bonds, 1991 of Whatcom County in the original aggregate principal amount of $10,750,000,
15 issued under date of August 1, 1991 and currently outstanding in the aggregate principal amount
16 of $9,575,000.
17 "Policy" means the policy of bond insurance issued with respect to the Bonds by the
18 Insurer.
19 "Private Person" means any natural person engaged in a trade or business or any trust,
20 estate, partnership, association, company or corporation.
21 "Private Person Use" means the use of property in a trade or business by a Private Person
22 if such use is other than as a member of the general public. Private Person Use includes
23 ownership of the property by the Private Person as well as other arrangements that transfer to the
24 Private Person the actual or beneficial use of the property (such as a lease, management or
25 incentive payment contract or other special arrangement) in such a manner as to set the Private
26 Person apart from the general public. Use of property as a member of the general public includes
27 attendance by the Private Person at municipal meetings or business rental of property to the
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I Private Person on a day -to -day basis if the rental paid by such Private Person is the same as the
2 rental paid by any Private Person who desires to rent the property. Use of property by nonprofit
3 community groups or community recreational groups is not treated as Private Person Use if such
4 use is incidental to the governmental uses of property, the property is made available for such use
5 by all such community groups on an equal basis and such community groups are charged only a
6 de minimis fee to cover custodial expenses.
7 "Refunded Bonds" means all of the 1991 Bonds maturing on and after August •1, 2002
8 collectively aggregating $7,960,000 in principal amount.
9 "Refunding Bonds" means $2,030,000 of the Bonds herein authorized to be used for the
10 refunding of the Interfund Loan and the payment of allocable costs of issuance.
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 and Exchange Act of
15 1934, 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. For the purpose of refinancing the Interfund Loan
20 and paying an allocable share of costs of issuance, the County shall now issue and sell $2,030,000
21 of general obligation bonds (the "Refunding Bonds ").
22 For the purpose of advance refunding the Refunded Bonds (and an allocable share of costs
23 of issuance) and thereby effecting a substantial savings to the County and its taxpayers, the
24 County shall issue its general obligation refunding bonds in the aggregate principal amount of
25 $7,960,000 (the "Advance Refunding Bonds ").
26 The Refunding Bonds and the Advance Refunding Bonds shall be combined and sold as a
27 . single issue and shall be designated as the "Whatcom County, Washington, Limited Tax General
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Obligation and Refunding Bonds, 1997" and shall be issued in the aggregate principal amount of
$9,990,000 (the 'Bonds ").
The Bonds shall be dated as of March 1, 1997, shall be fully registered as to both principal
and interest, shall be in the denomination of $5,000 each, or any integral multiple thereof, and
provided further that no Bond shall represent more than one maturity, shall be numbered
separately in such manner and with any additional designation as the Bond 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 June 1, 1997 at the following per annum
interest rates and shall mature on June 1 of the following years in the following principal amounts:
Maturity
(June 1)
Principal Amounts
Interest Rates
1997
$ 60,000R
4.00%
1998
90,0008
4.00
3 5, 000
1999
95,0008
4.10
3 5, 000
2000
l 00,0008
4.20
40,000
2001
l 00,0008
4.30
40,000
2002
105,0008
5.50
605,000
2003
115,0008
5.50
630,000
2004
120,0008
5.50
675,000
2005
125,0008
5.50
700,000
2006
13.5,0008
5.50
745,000
2007
140,0008
5.50
785,000
2008
155,0008
4.95
845,000
2009
155,0008
5.05
895,000
2010
175,0008
5.15
945,000
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97/02/24
2011 175,0008 5.20
985,000
2012 185,0008 5.15
1 *R - designates an amount paying the Refunding Bonds.
2 Section 3. Place and Medium of Payment. The principal of and interest on the Bonds
3 shall be payable in lawful money of the United States of America. Interest on the Bonds shall be
4 calculated on the basis of a 360 -day year and twelve 30 -day months. For so long as all Bonds are
5 in fully- immobilized form, such payments of principal and interest thereon shall be made as
6 provided in the operational arrangements of DTC as referred to in the Letter of Representations.
7 In the event that the Bonds are no longer in fully- immobilized form, interest on the Bonds
8 shall be paid by check or draft mailed to the Registered Owners of the Bonds at the addresses for
9 such Registered Owners appearing on the Bond Register on the 15th day of the month preceding
10 the interest payment date. Principal of the Bonds shall be payable upon presentation and
11 surrender of such Bonds by the Registered Owners at the principal office of the Bond Registrar.
12 Section 4. Registration.
13 (a) Bond Registrar /Bond Register. The County hereby requests that the
14 Treasurer specify and adopt the system of registration and transfer for the Bonds approved by the
15 Washington State Finance Committee from time to time through the appointment of state fiscal
16 agencies. The County shall cause a bond register to be maintained by the Bond Registrar. So
17 long as any Bonds remain outstanding, the Bond Registrar shall make all necessary provisions to
18 permit the exchange or registration of transfer of Bonds at its principal corporate trust office. The
19 Bond Registrar may be removed at any time at the option of the Treasurer upon prior notice to
20 the Bond Registrar, DTC, each. NRMSIR and SID, if any, and a successor Bond Registrar
21 appointed by the Treasurer. No resignation or removal of the Bond Registrar shall be effective
22 until a successor shall have been appointed and until the successor Bond Registrar shall have
23 accepted the duties of the Bond Registrar hereunder. The Bond Registrar is authorized, on behalf
24 of the County, to authenticate and deliver Bonds transferred or exchanged in accordance with the
25 provisions of such Bonds and this ordinance and to carry out all of the Bond Registrar's powers
-8- CMW2JA.DOC 97102t24
I and duties under this ordinance. The Bond Registrar shall be responsible for its representations
2 contained in the Certificate of Authentication on the Bonds.
3 (b) Registered Ownership. The County and the Bond Registrar, each in its
4 discretion, may deem and treat the Registered Owner of each Bond as the absolute owner thereof
5 for all purposes (except as provided in Section 14 of this ordinance), and neither the County nor
6 the Bond Registrar shall be affected by any notice to the contrary. Payment of any such Bond
7 shall be made only as described in Section 3 hereof, but such Bond may be transferred as herein
8 provided. All such payments made as described in Section 3 shall be valid and shall satisfy and
9 discharge the liability of the County. upon such Bond to the extent of the amount or amounts so
10 paid.
11 (c) DTC Acceptance /Letter of Representations. To induce ' DTC to accept the
12 Bonds as eligible for deposit at DTC, the County will execute and deliver to DTC a Letter of
13 Representations.
14 Neither the County nor the Bond Registrar will have any responsibility or obligation to
15 DTC participants or the persons for whom they act as nominees (or any successor depository)
16 with respect to the Bonds in respect of the accuracy of any records maintained by DTC (or any
17 successor depository) or any DTC participant, the payment by DTC (or any successor depository)
18 or any DTC participant of any amount in respect of the principal of or interest on Bonds, any
19 notice which is permitted or required to be given to Registered Owners under this ordinance
20 (except such notices as shall be required to be given by the County to the Bond Registrar or to
21 DTC (or any successor depository), or any consent given or other action taken by DTC (or any
22 successor depository) as the Registered Owner. For so long as any Bonds are held in fully -
23 immobilized form hereunder, DTC or its successor depository shall be deemed to be the
24 Registered Owner for all purposes hereunder, and all references herein to the Registered Owners
25 shall mean DTC (or any successor depository) or its nominee and shall not mean the owners of
26 any beneficial interest in such Bonds.
-9- CMW 2JA. DOC 97/02/24
I If any Bond shall be duly presented for payment and funds have not been duly provided by
2 the County on such applicable date, then interest shall continue to accrue thereafter on the unpaid
3 principal thereof at the rate stated on such Bond until such Bond is paid.
4 (d) Use of Depository.
5 (i) The Bonds shall be registered initially in the name of "CEDE &
6 Co.", as nominee of DTC, with one Bond maturing on each of the maturity dates for the Bonds in
7 a denomination corresponding to the total principal therein designated to mature on such date.
8 Registered ownership of such immobilized Bonds, or any portions thereof, may not thereafter be
9 transferred except (A) to any successor of DTC or its nominee, provided that any such successor
10 shall be qualified under any applicable laws to provide the service proposed to be provided by it;
11 (B) to any substitute depository appointed by the Board pursuant to subsection (ii) below or such
12 substitute depository's successor; or (C) to any person as provided in subsection (iv) below.
13 (ii) Upon the resignation of DTC or its successor (or any substitute
14 depository or its successor) from its functions as depository or a determination by the Board to
15 discontinue the system of book entry transfers through DTC or its successor (or any substitute
16 depository or its successor), the Board may hereafter appoint a substitute depository. Any such
17 substitute depository shall be qualified under any applicable laws to provide the services proposed
18 to be provided by it.
19. (iii) In the case of any transfer pursuant to clause (A) or (B) of
20 subsection (i) above, the Bond Registrar shall, upon receipt of all outstanding Bonds, together
21 with a written request on behalf of the Board, issue a single new Bond for each maturity then
22 outstanding, registered in the name of such successor or such substitute depository, or their
23 nominees, as the case may be, all as specified in such written request of the Board.
24 (iv) In the event that (A) DTC or its successor (or substitute depository
25 or its successor) resigns from its functions as depository, and no substitute depository can be
26 obtained, or (B) the Board determines that it is in the best interest of the beneficial owners of the
27 Bonds that such owners be able to obtain such bonds in the form of Bond certificates, the
-10- CMW2JA.DOC 97/02/24
I ownership of such Bonds may then be transferred to any person or entity as herein provided, and
2 shall no longer be held in fully- immobilized form. The Board shall deliver a written request to the
3 Bond Registrar, together with a supply of definitive Bonds, to issue Bonds as herein provided in
4 any authorized denomination.. Upon receipt by the Bond Registrar of all then outstanding Bonds
5 together with a written request on behalf of the Board to the Bond Registrar, new Bonds shall be
6 issued in the appropriate denominations and registered in the names of such persons as are
7 requested in such written request.
8 (e) Registration of Transfer of Ownership or Exchange; Change in
9 Denominations. The transfer of any Bond may be registered and Bonds may be exchanged, but
10 no transfer of any such Bond shall be valid unless such Bond is surrendered to the Bond Registrar
11 with the assignment form appearing on such Bond duly executed by the Registered Owner or such
12 Registered Owner's duly authorized agent in a manner satisfactory to the Bond Registrar. Upon
13 such surrender, the Bond Registrar shall cancel the surrendered Bond and shall authenticate and
14 deliver, without charge to the Registered Owner or transferee therefor, a new Bond (or Bonds at
15 the option of the new Registered Owner) of the same date, maturity and interest rate and for the
16 same aggregate principal amount in any authorized denomination, naming as Registered Owner
17 the person or persons listed as the assignee on the assignment form appearing on the surrendered
18 Bond, in exchange for such surrendered and cancelled Bond. Any. Bond may be surrendered to
19 the Bond Registrar and exchanged, without charge, for an equal aggregate principal amount of
20 Bonds of the same date, maturity and interest rate, in any authorized denomination. The Bond,
21 Registrar shall not be obligated to register the transfer or to exchange any Bond during the 15
22 days preceding the date any such Bond is to be redeemed.
23 (f) Bond Registrar's Ownership of Bonds. The Bond Registrar may become
24 the Registered Owner of any Bond with the same rights it would have if it were riot the Bond
25 Registrar, and to the extent permitted by law, may act as depository for and permit any of its
26 officers or directors to act as member of, or in any other capacity with respect to, any committee
27 formed to protect the right of the Registered Owners of Bonds.
-11- CMW2JA.DOC 97102124
I (g) Registration Covenant. The County covenants that, until all Bonds have
2 been surrendered and cancelled, it will maintain a system for recording the ownership of each
3 Bond that complies with the provisions of Section 149 of the Code.
4 Section 5. Redemption and Purchase of Bonds.
5 (a) Optional Redemption. The Bonds maturing on or prior to June 1, 2007 are
6 not subject to redemption prior to their scheduled maturity. The Bonds maturing on or after
7 June 1, 2008, are subject to redemption at the option of the County on and after June 1, 2007, in
8 whole or in part on any date (with maturities to be selected by the County), at a price of par plus
9 accrued interest, if any, to the date of redemption.
10 (b) Selection of Bonds for Redemption. As long as the Bonds are held in
11 book -entry only form, the selection of Bonds to be redeemed shall be made in accordance with
12 the operational arrangements then in effect at DTC. If the Bonds are no longer held in
13 uncertificated form, the selection of such Bonds to be redeemed shall be made as provided in this
14 subsection (b). If the County redeems at any one time fewer than all of the Bonds having the
15 same maturity date, the particular Bonds or portions of Bonds of such maturity to be redeemed
16 shall be selected by lot (or in such other manner determined by the Bond Registrar) in increments
17 of $5,000. In the case of a Bond of a denomination greater than $5,000, the County and Bond
18 Registrar shall treat each Bond as representing such number of separate Bonds each of the
19 denomination of $5,000 as is obtained by dividing the actual principal amount of such Bond by,
20 $5,000. In the event that only a portion of the principal sum of a Bond is redeemed, upon
21 surrender of the such Bond at the principal office of the Bond Registrar there shall be issued to
22 the Registered Owner, without charge therefor, for the then unredeemed balance of the principal
23 sum thereof, at the option of the Registered Owner, a Bond or Bonds of like maturity and interest
24 rate in any of the denominations herein authorized. If Bonds are called for optional redemption,
25 portions of the principal amount of such Bonds, in installments of $5,000 or any integral multiple
26 of $5,000, may be redeemed. If less than all of the principal amount of any Bond is redeemed,
27 upon surrender of such Bond at the principal office of the Bond Registrar there shall be issued to
-12- CMW2JA.D0C 97/02/24
I the registered owner, without charge therefor, for the then unredeemed balance of the principal
2 amount thereof, a new Bond or Bonds, at the option of the registered owner, of like maturity and
3 interest rate in any denomination authorized by this ordinance.
4 (c) Purchase of Bonds. The County also reserves the right to purchase any of
5 the Bonds offered to the County at any time at a price deemed reasonable by the Treasurer.
6 (d) Notice of Redemption
7 (i) Official Notice. Unless waived by any owner of Bonds to be
8 redeemed, official notice of any such redemption shall be given by the Bond Registrar on behalf of
9 the County by mailing a copy of an official redemption notice by first class mail at least 30 days
10 and not more than 60 days prior to the date fixed for redemption to the Registered Owner of the
11 Bond or Bonds to be redeemed at the address shown on the Bond Register or at such other
12 address as is furnished in writing by such registered owner to the Bond Registrar.
13 All official notices of redemption shall be dated and shall state:
14 (A) the redemption date,
15 (B) the redemption price,
16 (C) if fewer than all outstanding Bonds are to be redeemed, the
17 identification by series and maturity (and, in the case of partial redemption, the respective
18 principal amounts) of the Bonds to be redeemed,
19 (D) that on the redemption date the redemption price will
20 become due and payable upon each such Bond or portion thereof called for redemption, and that
21 interest thereon shall cease to accrue from and after said date, and
22 (E) the place where such Bonds are to be surrendered for
23 payment of the redemption price, which place of payment shall be the principal office of the Bond
24 Registrar.
25 On or prior to any redemption date, the County shall deposit with the Bond Registrar an
26 amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds
27 which are to be redeemed on that date.
-13- CMW2JA.DOC 97102/24
I (ii) Effect of Notice: Bonds Due. Official notice of redemption having
2 been given as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the
3 redemption date, become due and payable at the redemption price therein specified, and from and
4 after such date (unless the County shall default in the payment of the redemption price) such
5 Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for
6 redemption in accordance with said notice, such Bonds shall be paid by the Bond Registrar at the
7 redemption price. Installments of interest due on or prior to the redemption date shall be payable
8 as herein provided for payment of interest. Upon surrender for any partial redemption of any
9 Bond, there shall be prepared for the Registered Owner a new Bond or Bonds of the same
10 maturity in the amount of the unpaid principal. All Bonds which have been redeemed shall be
11 canceled and destroyed by the Bond Registrar and shall not be reissued.
12 (iii) Additional Notice. In addition to the foregoing notice, further
13 notice shall be given by the County as set out below, but no defect in said further notice nor any
14 failure to give all or any portion of such further notice shall in any manner defeat the effectiveness
15 of a call for redemption if notice thereof is given as above prescribed. Each further notice of
16 redemption given hereunder shall contain the information required above for an official notice of
17 redemption plus (A) the CUSIP numbers of all Bonds being redeemed; (B) the date of issue of the
18 Bonds as originally issued; (C) the rate of interest borne by each Bond being redeemed; (D) the
19 maturity date of each Bond being redeemed; and (E) any other descriptive information needed to
20 identify accurately the Bonds being redeemed. Each further notice of redemption may be sent at
21 least 35 days before the redemption date to each NRMSIR, the SID, if any, and to the
22 Underwriter or to its business successor, if any, and to such persons and with such additional
23 information as the Treasurer shall deem appropriate, but such mailings shall not be 'a condition
24 precedent to the redemption of such Bonds.
25 (iv) Upon the payment of the redemption price of Bonds being
26 redeemed, each check or other transfer of funds issued for such purpose shall bear the CUSIP
-14- CMW2JA.DOC 97/02/24
number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such
2 check or other transfer.
3 (v) Amendment of Notice Provisions. The foregoing notice provisions
4 of this Section 5; including but not limited to the information to be included in redemption notices
5 and the persons designated to receive notices, may be amended by additions, deletions and
6 changes in order to maintain compliance with duly promulgated regulations and recommendations
7 regarding notices of redemption of municipal securities.
8 Section 6. Form of Bonds. The Bonds shall be in substantially the following form:
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STATEMENT OF INSURANCE
The MBIA Insurance Corporation (the "Insurer ") has issued a policy containing the
following provisions, such policy being on file at the principal office of the Fiscal Agency of the
State of Washington in Seattle, Washington, or New York, New York.
The Insurer, in consideration of the payment of the premium and subject to the terms of
the policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter defined,
of the following described obligations, the full and complete payment required to be made by or
on behalf of Whatcom County (the "Issuer ") to the Fiscal Agency of the State of Washington, or
its successor (the "Paying Agent "), of an amount equal to (i) the principal of (either at the stated
maturity or by any advancement of maturity pursuant to a mandatory sinking fund payment) and
interest on, the Obligations (as that term is defined below) as such payments shall become due but
shall not be so paid (except that in the event of any acceleration of the due date of such principal
by reason of mandatory or optional redemption or acceleration resulting from default or
otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund
payment, the payments guaranteed hereby shall be made in such amounts and at such times as
such payments of principal would have been due had there not been any such acceleration); and
(ii) the reimbursement of any such payment which is subsequently recovered from any owner
pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an
avoidable preference to such owner within the meaning of any applicable bankruptcy law. The
amounts referred to in clauses (i) and (ii) of the preceding sentence shall be referred to herein
collectively as the "Insured Amounts." "Obligations" shall mean:
$9,990,000
Whatcom County Limited Tax General Obligation and Refunding Bonds, 1997
Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in
writing by registered or certified mail, or upon receipt of written notice by registered or certified
mail, by the Insurer from the Paying Agent or any owner of an Obligation the payment of an
Insured Amount for which is then due, that such required payment has not been made, the Insurer
-15- CMW2JA.DOC 97102/24
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on the due date of such payment or within one business day after receipt of notice of such
nonpayment, whichever is later, will make a deposit of funds, in an account with State Street
Bank and Trust Company, N.A., in New York, New York, or its successor, sufficient for the
payment of any such Insured Amounts which are then due. Upon presentment and surrender of
such Obligations or presentment of such other proof of ownership of the Obligations, together
with any appropriate instruments of assignment to evidence the assignment of the Insured
Amounts due on the Obligations as are paid by the Insurer, and appropriate instruments to effect
the appointment of the Insurer as agent for such owners of the Obligations in any legal proceeding
related to payment of Insured Amounts on the Obligations, such instruments being in a form
satisfactory to State Street Bank and Trust Company, N.A., State Street Bank and Trust
Company, N.A. shall disburse to such owners or the Paying Agent payment of the Insured
Amounts due on such Obligations, less any amount held by the Paying Agent for the payment of
such Insured Amounts and legally available therefor. This policy does not insure against loss of
any prepayment premium which may at any time be payable with respect to any Obligation.
As used herein, the term "owner" shall mean the registered owner of any Obligation as
indicated in the books maintained by the Paying Agent, the Issuer, or any designee of the Issuer
for such purpose. The term owner shall not include the Issuer or any party whose agreement with
the Issuer constitutes the underlying security for the Obligations.
Any service of process on the Insurer may be made to the Insurer at its offices located at
113 King Street, Armonk, New York 10504 and such service of process shall be valid and
binding.
This policy is non - cancelable for any reason. The premium on this policy is not refundable
for any reason including the payment prior to maturity of the Obligations.
NO.
MBIA Insurance Corporation
UNITED STATES OF AMERICA'
STATE OF WASHINGTON
WHATCOM COUNTY
LIMITED TAX GENERAL OBLIGATION AND REFUNDING BOND, 1997
INTEREST RATE: MATURITY DATE: CUSIP NO.:
Registered Owner:
Principal Amount:
-16- CMW2JA.D0C
97/02/24
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WHATCOM COUNTY, WASHINGTON (the "County "), hereby acknowledges itself 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 March 1, 1997, 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 the first days of each June and December, commencing on June 1, 1997. Both
principal of and interest on this bond are payable in lawful money of the United States of America.
Both principal of and interest on this Bond shall be paid as provided in the operational
arrangements referred to in the Blanket Issuer Letter of Representations (the "Letter of
Representations ") between the State and The Depository Trust Company ( "DTC "). The principal
hereunder shall be paid to the Registered Owner or assigns upon presentation and surrender of
this bond at the principal office of the fiscal agencies of the State of Washington in either Seattle,
Washington or New York, New York (collectively the "Bond Registrar ").
This bond is one of an authorized issue of bonds of like date and tenor, except as to
number, amount, rate of interest and date of .maturity in the aggregate principal amount of
$9,990,000, and is issued to provide term funding for certain obligations of the County.
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 resolutions duly adopted by
the County Council, including Ordinance No. _ of the County Council (the 'Bond Ordinance ").
The bonds of this issue maturing on and prior to June 1, 2007 are not callable for
redemption prior_ to their scheduled maturities. The bonds of this issue maturing on and after
June 1, 2008 are callable for redemption prior to their scheduled maturity at the option of the
County on and after June 1, 2007 on any date at a price of par plus accrued interest to the date of
redemption.
The bonds of this issue are not "private activity bonds" as such term is defined in the
Internal Revenue Code of 1986, as amended (the "Code "). The bonds of this issue are qualified
tax- exempt obligations under Section 265(b) of the Code for banks, thrift institutions and. other
financial institutions.
The County hereby irrevocably covenants that it will levy taxes annually upon all the
taxable property in the County within and as a part of the tax levy permitted to counties without a
vote of the electors in amounts sufficient, with other monies legally available therefor, to pay the
principal of and interest on the bonds of this issue as the same shall become due. The full faith,
credit and resources of the County are hereby irrevocably pledged for the annual levy and
collection of such taxes and the prompt payment of such principal and interest. The pledge of tax
levies may be discharged prior to maturity of the bonds of this issue by making provision for the
payment thereof on the terms and conditions set forth 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 manually signed by the Bond Registrar.
-17- CMW2JA.DOC 97/02/24
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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
precedent to and in the issuance of this bond have happened, been done and performed and that
the issuance of this bond and the bonds of this issue does not violate any constitutional, statutory
or other limitation upon the amount of bonded indebtedness that the County may incur.
IN WITNESS WHEREOF, Whatcom County, Washington has caused this bond to be
executed by the facsimile signatures of the Chair and Clerk of its County Council as of this 1 st day
of March, 1997.
WHATCOM COUNTY, WASHINGTON
By /s/ facsimile
Chair, County Council
ATTEST:
/s/ facsimile
Clerk, County Council
The Bond Registrar's Certificate of Authentication on the Bonds shall be in substantially
the following form:
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 and Refunding Bonds, 1997 of Whatcom County,
dated March 1, 1997.
WASHINGTON STATE FISCAL
AGENCY as Bond Registrar
Authorized Officer
39 Section 7. Execution of Bonds. The Bonds shall be executed on behalf of the County
40 with the manual or facsimile signature of the Chair of its Council and shall be attested by the
-18- CMW2JA.DOC 97/02124
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manual or facsimile signature of the Clerk of the Council, and the seal of the County shall be
impressed or facsimile thereof imprinted on the Bonds.
Only such Bonds as shall bear thereon a Certificate of Authentication in the form
hereinbefore recited, 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 hereunder and are entitled to the benefits of this ordinance.
In case either of the officers who shall have executed the Bonds shall cease to be officer or
officers of the County before the Bonds so signed shall have been authenticated or delivered by
the Bond Registrar, or issued by the County, such Bonds may nevertheless be authenticated,
delivered and issued and upon such authentication, delivery and issuance, shall be as binding upon
the County as though those who signed the same had continued to be such officers of the County.
Any Bond may also be signed and attested on behalf of the County by such persons who are at the
actual date of delivery of such Bond the proper officers of the County although at the original
date of such Bond any such person shall not have been such officer of the County.
16 Section 8. Advance Refundinz Account. There is hereby authorized to be created in
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the 1991 Bond Fund an account known as the "Advance Refunding Account" which Account is
to be drawn upon for the sole purpose of paying the principal of and interest on the Refunded
Bonds until their date of redemption and of paying costs related to the advance refunding of the
Refunded Bonds.
The proceeds of sale of the Advance Refunding Bonds (exclusive of accrued interest
thereon, which shall be paid into the Bond Fund and used to pay interest on the Advance
Refunding Bonds on June 1, 1997) shall be credited to the Advance Refunding Account.
Money in the Advance Refunding Account shall be used immediately upon receipt thereof
to defease the Refunded Bonds as authorized by the 1991 Bond Ordinance and pay costs of
issuance. The County shall defease the Refunded Bonds and discharge such obligations by the
use of money in the Advance Refunding Account to purchase certain Government Obligations
-19- CMW2JA.DOC 97/02/24
I (which obligations so purchased, are herein called "Acquired Obligations "), bearing such interest
2 and maturing as to principal and interest in such amounts and at such times which, together with
3 any necessary beginning cash balance, will provide for the payment of
4 (a) interest on the Refunded Bonds due and payable from the date hereof
5 through August 1, 2001; and
6 (b) the redemption price (100% of the principal amount thereof) on August 1,
7 2001, of the Refunded Bonds.
8 Such Acquired Obligations shall be purchased at a yield not greater than the yield
9 permitted by the Code and regulations relating to acquired obligations in connection with
10 refunding bond issues.,
11 The County hereby appoints the corporate trust department of First Trust National
12 Association, as the Escrow Agent for the Refunded Bonds (the "Escrow Agent "). A beginning
13 cash balance, if any, and Acquired Obligations shall be deposited irrevocably with the Escrow
14 Agent in an amount sufficient to defease the Refunded Bonds. The proceeds of the Bonds
15 remaining in the Advance Refunding Account after acquisition of the Acquired Obligations and
16 provision for the necessary beginning cash balance shall be utilized to 'pay expenses of the
17 acquisition and safekeeping of the Acquired Obligations and expenses of the issuance of the
18 Bonds.
19 Section 9. Call For Redemption of Refunded Bonds. The County hereby irrevocably
20 sets aside sufficient funds out of the purchase of Acquired Obligations from proceeds of the
21 Advance Refunding Bonds to make the payments described in Section 8 of this ordinance.
22 The County hereby irrevocably calls the Refunded Bonds for redemption on August 1,
23 2001 in accordance with the provisions of Section 6 of the 1991 Bond Ordinance, authorizing the
24 redemption and retirement of the 1991 Bonds prior to their fixed maturities.
25 Said defeasance and call for redemption of the Refunded Bonds shall be irrevocable after
26 the final establishment of the escrow account and delivery of the Acquired Obligations to the
27 Escrow Agent.
-20- CMW2JA.DOC 97/02/24
I The Escrow Agent is hereby authorized and directed to provide for the giving of notices
2 of the redemption of the Refunded Bonds in accordance with the applicable provisions of the
3 1991 Bond Ordinance. The Treasurer is authorized and requested to provide whatever assistance
4 is necessary to accomplish such redemption and the giving of notices therefor. The costs of
5 publication of such notices shall be an expense of the County.
6 The Escrow Agent is hereby authorized and directed to pay to the Treasurer, or, at the
7 direction of the Treasurer, to the fiscal agency or agencies of the State of Washington, sums
8 sufficient to pay, when due, the payments specified in of Section 8 of this ordinance. All such
9 sums shall be paid from the moneys and Acquired Obligations deposited with said Escrow Agent
10 pursuant to the previous section of this ordinance, and the income therefrom and proceeds
11 thereof. All such sums so paid to said Treasurer shall be credited to the Advance Refunding
12 Account. All moneys and Acquired Obligations deposited with said bank and any income
13 therefrom shall be held, invested (but only at the direction of the Treasurer) and applied in
14 accordance with the provisions of this ordinance and with the laws of the State of Washington for
15 the benefit of the County and owners of the Refunded Bonds.
16 The County will take such actions as are found necessary to see that all necessary and
17 proper fees, compensation and expenses of the Escrow Agent for the Refunded Bonds shall be
18 paid when due.
19 In order to carry out the purposes of the preceding section of this ordinance and this
20 section, either the Chair or the Clerk of the Council or the County Executive is authorized and
21 directed to execute and deliver to First Trust National Association, Seattle, Washington, an
22 Escrow Deposit Agreement, substantially in the form of Exhibit A attached to this ordinance.
23 Section 10. Interfund Loan. The proceeds of the Refunding Bonds (exclusive of
24 accrued interest thereon, which shall be paid into the Bond Fund and used to pay interest on the
25 Refunding Bonds on June 1, 1997) shall be deposited into the Courthouse Expansion Fund and
26 used immediately, together with other funds of the County, as necessary, to repay the County's
27 Road Fund and retire the Interfund Loan, including the payment of interest thereon. The balance
-21- CMW2JA.DOC 97102124
I of the proceeds of the Refunding Bonds, if any, shall be used to pay an allocable share of the
2 County's costs of issuance of the Refunding Bonds.
3 Section 11. Pledge of Taxes and Credit. The Treasurer is hereby authorized to
4 establish a special fund of the County to be designated as the 1997 General Obligation Bond
5 Redemption Fund (the "Bond Fund "). On or before each date on which a payment of principal of
6 and interest on the Bonds is due and payable, the Treasurer shall deposit the amount necessary to
7 make such principal and/or interest payment into the Bond Fund and shall remit the same to the
8 Bond Registrar for the purpose of making such payment. The County hereby irrevocably
9 covenants that, unless the principal of and interest on the Bonds are paid from other sources, it
10 will make annual levies of taxes within and as a part of the tax levy permitted to counties without
11 a vote of its electors upon all of the property in the County subject to taxation in amounts
12 sufficient to pay such principal and interest as the same shall become due. The full faith, credit
13 and resources of the County are hereby irrevocably pledged for the annual levy and collection of
14 such taxes and for the prompt payment of such principal and interest.
15 Section 12. Defeasance. In the event that money and /or Government Obligations as
16 now or hereafter amended, maturing at such time or times and bearing interest to be earned
17 thereon in amounts (together with such money, if necessary) sufficient to redeem and retire part
18 or all of the Bonds in accordance with their terms, are set aside in a special account of the County
19 to effect such redemption and retirement, and such moneys and the principal of and interest on
20 such obligations are irrevocably set aside and pledged for such purpose, then no further payments
21 need be made into the Bond Fund for the payment of the principal of and interest on the Bonds so
22 provided for, and such. Bonds shall cease. to be entitled to any lien, benefit or security of this
23 ordinance except the right to receive the moneys so set aside and pledged, and such Bonds shall
24 be deemed not to be outstanding hereunder.
25 Within 60 days of any defeasance of Bonds the Bond Registrar shall provide notice of
26 defeasance of Bonds to registered owners and to each NRMSIR and SID, if any, in accordance
27 with Section 14.
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I Section 13. Tax Covenants and Designation.
2 (a) Arbitrage Covenant. The County hereby covenants that it will not make
3 any use of the proceeds of sale of the Bonds or any other funds of the County which may be
4 deemed to be proceeds of such Bonds pursuant to Section 148 of the Code which will cause the
5 Bonds to be "arbitrage bonds" within the meaning of said section and said Regulations. The
6 County will comply with the requirements of Section 148 of the Code (or any successor provision
7 thereof applicable to the Bonds) and the applicable Regulations thereunder throughout the term of
8 the Bonds.
9 (b) Private Person Use Limitation for Bonds. The County covenants that for
10 as long as the Bonds are outstanding, it will not permit:
11 (i) More than 10% of the Net Proceeds of the Bonds to be used for
12 any Private Person Use; and
13 (ii) More than 10% of the principal or interest payments on the Bonds
14 , in a Bond Year to be directly or indirectly: (A) secured by any interest in property used or to be
15 used for any Private Person Use or secured by payments in respect of property used or to be used
16 for any Private Person Use, or (B) derived from payments (whether or not made to the County) in
17 respect of property, or borrowed money, used or to be used for any Private Person Use.
18 The County further covenants that, if:
19 (iii) More than five percent of the Net Proceeds of the Bonds are to be
20 used for any Private Person Use; and
21 (iv) More than five percent of the principal or interest payments on the
22 Bonds in a Bond Year are (under the terms of this ordinance or any underlying arrangement)
23 directly or indirectly: (A) secured by any interest in property used or to be used for any Private
24 Person Use or secured by payments in respect of property used or to be used for any Private
25 Person Use, or (B) derived from payments (whether or not made to the County) in respect of
26 property, or borrowed money, used or to be used for any Private Person Use, then, (1) any
27 Private Person Use of the projects described in subsection (iii) hereof or Private Person Use
-23- CMW2JA.DOC 97/02/24
I payments described in subsection (iv) hereof that is in excess of the five percent limitations
2 described in such subsections (iii) or (iv) will be for a Private Person Use that is related to the
3 state or local governmental use of the projects financed or refinanced with Bond proceeds, and
4. (2) any Private Person Use will not exceed the amount of Net Proceeds of the Bonds used for the
5 state or local governmental use portion of the projects to which the Private Person Use of such
6 portion of such projects relates. The County further covenants that it will comply with any
7 limitations on the use of the projects by other than state and local governmental users that are
8 necessary, in the opinion of its bond counsel, to preserve the tax exemption of the interest on the
9 Bonds. The covenants of this section are specified solely to assure the continued exemption from
10 regular income taxation of the interest on the Bonds.
11 (c) Bonds Designated "Qualified Tax- Exempt Obligations. " The County
12 hereby designates the Bonds as "qualified tax- exempt obligations" for purchase by financial
13 institutions pursuant to Section 265 of the Code. The County does not anticipate that it will issue
14 more than $10,000,000 in "qualified tax- exempt obligations" during -the year 1997.
15 Section 14. Undertaking to Provide Ongoing Disclosure.
16 (a) Contract /Undertaking. This section constitutes the County's written
17 undertaking for the benefit of the owners of the Bonds as required by Section (b)(5) of the Rule.
18 (b) Financial Statements /Operating Data. The County agrees to provide or
19 cause to be provided to each NRMSIR and to the SID, if any, in each case as designated by the
20 Council in accordance with the Rule, the following annual financial information and operating
21 data for the prior fiscal year (commencing July 31, 1998 for the fiscal year ending December 31,
22 1997):
23 1. Annual financial statements showing ending fund balances prepared
24 in accordance with regulations prescribed by the State Auditor pursuant to RCW 43.09.200 (or
25 any successor statutes) from time to time and generally of the type included in the official
26 statement for the Bonds under the headings "Combining Statement of Revenues, Expenditures &
27 Changes in Fund Balance -- Debt Service Funds ";
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1 2. The assessed valuation of taxable property in the County;
2 3. Property taxes due, property taxes collected and property taxes
3 delinquent;
4 4. Property tax levy rates per $1,000 of assessed valuation; and
5 5. Outstanding general obligation debt of the County.
6 Such annual information and operating data described above shall be so provided on or
7 before the expiration of seven months after the end of the County's fiscal year. The County may
8 adjust such date if the County changes its fiscal year by providing written notice of the change of
9 fiscal year and the new reporting date to each then existing NRMSIR and the SID, if any. In lieu
10 of providing such annual financial information and operating data, the County may cross - reference
11 to other documents provided to the NRMSIR's, the SID or to the Council and, if such document
12 is a final official statement within the meaning of the Rule, available from the MSRB.
13 If not provided as part of the annual financial information discussed above,. the County
14 shall provide the County's audited annual financial statement prepared in accordance with
15 regulations prescribed by the State Auditor pursuant to RCW 43.09.200 (or any successor
16 statutes), when and if available, to each then existing NRMSIR and the SID, if any.
17 (c) Material Events. The County agrees to provide or cause to be provided, in
18 a timely manner, to the SID, if any, and to each NRMSIR or to the MSRB notice of the
19 occurrence of any of the following events with respect to the Bonds, if material:
20 1. Principal and interest payment delinquencies;
21 2. Non - payment related defaults;
22 3. Unscheduled draws on debt service reserves reflecting financial
23 difficulties;
24 4. Unscheduled draws on credit enhancements reflecting financial
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difficulties;
26 5. Substitution of credit or liquidity providers, or their failure to
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perform;
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1 6. Adverse tax opinions or events affecting the tax - exempt status of
RA
the Bonds;
3 7. Modifications to rights of owners;
4 8. Optional, contingent or unscheduled Bond calls other than
5 scheduled sinking fund redemptions for which notice is given
6 pursuant to Exchange Act Release 34- 23856;
7 9. Defeasances;
8 10. Release, substitution or sale of property securing the repayment of
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the Bonds; and
10 11. Rating changes.
11 Solely for purposes of disclosure, and not intending to modify this undertaking, the
12 County advises that there is no property securing repayment of the Bonds, and there is no debt
13 service reserve fund or account for the Bonds, as the County lacks legal authority for either
14 measure. If further changes in the law permit such measures, and if the County subsequently
15 chooses to establish such reserves or provide such property as security for the Bonds, the County
16 will provide notice of such establishment or provision and undertake to provide notices of
17 material events relating thereto, should such events occur.
18 (d) Notification Upon Failure to Provide Financial Data. The County agrees
19 to provide or cause to be provided, in a timely manner, to each NRMSIR or to the MSRB and to
20 the SID, if any, notice of its failure to provide the annual financial information described in
21 subsection (b) above on or prior to the date set forth in subsection (b) above.
22 (e) Termination/Modification. The County's obligations to provide annual
23 financial information and notices of material events shall terminate upon the defeasance, prior
24 redemption or payment in full of all of the Bonds. This section, or any provision hereof, shall be
25 null and void if the County (1) obtains an opinion of nationally recognized bond counsel to the
26 effect that those portions of the Rule which require this section, or any such provision, are invalid,
27 have .been repealed retroactively or otherwise do not apply to the Bonds; and (2) notifies each
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I then existing NRMSIR and the SID, if any, of such opinion and the cancellation of this section.
2 Notwithstanding any other provision of this ordinance, the County may amend this Section 14 and
3 any provision of this Section 14 may be waived with an approving opinion of nationally
4 recognized bond counsel.
5 In the event of any amendment of or waiver of a provision of this Section 14, the County
6 shall describe such amendment in the next annual report, and shall include, as applicable, a
7 narrative explanation of the reason for the amendment or waiver and its impact on the type (or in
8 the case of a change of accounting principles, on the presentation) of financial information or
9 operating data being presented by the County. In addition, if the, amendment relates to the
10 accounting principles to be followed in preparing financial statements, (I) notice of such change
11 shall be given in the same manner as for a material event under Subsection (c), and (II) the annual
12 report for the year in which the change is made should present a comparison (in narrative form
13 and also, if practical, in quantitative form) between.the financial statements as prepared on the
14 basis of the new accounting principles and those prepared on the basis of the former accounting
15 principles.
16 (f) Bond Owner's Remedies Under This Section.. A Bond owner's right to
17 enforce the provisions of this section shall be limited to a right to obtain specific enforcement of
18 the County's obligations hereunder, and any failure by the County to comply with the provisions
19 of this undertaking shall not be an event of default with respect to the Bonds under this ordinance.
20 Section 15. Sale of Bonds. The Bonds shall be sold by negotiated sale to Seattle -
21 Northwest Securities Corporation., Seattle, Washington (the "Underwriter "), under the terms and
22 conditions thereof as provided in its purchase offer and in this ordinance.
23 The County Executive is hereby authorized to review and approve on behalf of the County
24 the preliminary and final Official Statements relative to the Bonds with such additions and changes
25 as may be deemed necessary or advisable to him. The Preliminary Official Statement for the
26 Bonds, is hereby deemed final for purposes of the Rule. The proper County officials are hereby
-27- CMW2JA.DOC 97/02/24
I authorized and directed to do everything necessary for the prompt execution and delivery of the
2 Bonds to said purchaser and for the proper application and use of the proceeds of sale thereof.
3 Section 16. Payments Under the Policy. In the event that, on the payment date on the
4 Bonds, the County or the Bond Registrar determines that there will not be sufficient moneys
5 available in the County's Bond Fund to pay all principal of and interest on the Bonds due on such
6 payment date, the County or the Bond Registrar shall immediately notify the Insurer or its
7 designee on the same day by telephone or telegraph, confirmed in writing by registered or
8 certified mail, of the amount of the deficiency.
9 If the deficiency is made up in whole or in part, the Bond Registrar shall so notify the
10 Insurer or its designee.
11 In addition, if the Bond Registrar has notice that any Bondholder has been required to
12 disgorge payments of principal or interest on the Bonds to a trustee in bankruptcy or creditors or
13 others pursuant to a final judgment by a court of competent jurisdiction that such payment
14 constitutes a voidable preference to such Bondholder within the meaning of any applicable
15 bankruptcy laws, then the Bond Registrar shall notify the Insurer or its designee of such fact by
16 telephone or telegraphic notice, confirmed in writing by registered or certified mail.
17 The Bond Registrar is hereby irrevocably designated, appointed, directed and authorized
18 to act as attorney -in -fact for Bondholders as follows:
19 1. If and to the extent there is a deficiency in amounts required to pay interest
20 on the Bonds, the Bond Registrar shall (a) execute and deliver to State Street Bank and
21 Trust Company, N.A., or its successors under the Policy (the "Insurance Paying Agent "),
22 in form satisfactory to the Insurance Paying Agent, an instrument appointing the Insurer as
23 agent for such Bondholders in any legal proceeding related to the payment of such interest
24 and an assignment to the Insurer of the claims for interest to which such deficiency relates
25 and which are paid by the Insurer, (b) receive as designee of the respective Bondholders
26 (and not as Bond Registrar) in accordance with the tenor of the Policy payment from the
-28- CMW2JA.DOC 97102!24
I Insurance Paying Agent with respect to the claims for interest so assigned, and (c)
2 disburse the same to such respective Bondholders; and
3 2. If and to the extent of a deficiency in amounts required to pay principal of
4 any Bonds, the Bond Registrar shall (a) execute and deliver to the Insurance Paying Agent
5 in form satisfactory to the Insurance Paying Agent an instrument appointing the Insurer as
6 agent for such Bondholder in any legal proceeding relating to the payment of such
7 principal and an assignment to the Insurer of any of the Bonds surrendered to the
8 Insurance Paying Agent of so much of the principal amount thereof as has not previously
9 been paid or for which moneys are not held by the Bond Registrar and available for such
10 payment '(but such assignment shall be delivered only if payment from the Insurance
11 Paying Agent is received), (b) receive as designee of the respective Bondholders (and not
12 as Bond Registrar) in accordance with the tenor of the Policy payment therefor from the
13 Insurance Paying Agent, and (c) disburse the same to such Bondholders.
14 Payments with respect to claims for interest on and principal of Bonds disbursed by the
15 Bond Registrar from proceeds of the Policy shall not be considered to discharge the obligation of
16 the County with respect to such Interest, and the Insurer shall become the owner of such unpaid
17 Interest and claims for the interest in accordance with the tenor. of the assignment made to it
18 under the provisions of this subsection or otherwise.
19 Irrespective of whether any such assignment is executed and delivered, the County and the
20 Bond Registrar:
21 1. Recognize that to the extent the Insurer makes payments directly or
22 indirectly (as by paying through the Bond Registrar), on account of principal of or interest
23 on the Bonds, the Insurer will. be subrogated to the rights of such Bondholders to receive
24 the amount of such principal and interest for the County, with interest thereon as provided
25 and solely from the sources stated in this Ordinance and the Bonds; and
26 2. Will accordingly pay to the Insurer the amount of such principal and
27 interest (including principal and interest recovered under subparagraph (ii) of the first
-29- CMW2JA.DOC 97/02124
I paragraph of the Policy), with interest thereon as provided in this Ordinance and the
2 Bonds, but only from the sources and in the manner provided herein for the payment of
3 principal of and interest on the Bond to holders, and will otherwise treat the Insurer as the
4 owner of such rights to the amount of such principal and interest.
5 In connection with the issuance of additional bonds, the County shall deliver to the Insurer
6 a copy of the disclosure document, if any, circulated with respect to such additional bonds.
7 Copies of any amendments made to the documents executed in connection with the
8 issuance of the Bonds which are consented to by the Insurer shall be sent to Standard & Poor's
9 Ratings Services, a Division of The McGraw -Hill Companies.
10 The Insurer shall receive notice of the resignation or removal of the Bond Registrar and
11 the appointment of a successor thereto.
12 The Insurer shall receive copies of all notices required to be delivered to Bondholders and,
13 on an annual basis (or as soon as available from the office of the State Auditor) copies of the
14 County's audited financial statements, and Annual Budget.
15 Any notice that is required to be given to a holder of Bonds or to the Bond Registrar
16 pursuant to this Ordinance shall also be provided to the Insurer. All notices required to be given
17 to the Insurer under this Ordinance shall be in writing and shall be sent by registered or certified
18 mail addressed to 1VI13IA Insurance Corporation, 113 King Street, Armonk, New York 10504
19 Attention: Surveillance.
20 The provisions of this section shall be in effect only so long as the policy is in full force
21 and effect.
22 Section 17. Severability. If any one or more of the covenants or agreements provided
23 in this ordinance to be performed on the part of the County shall be declared by any court of
24 competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or
25 agreements, shall be null and void and shall be deemed separable from the remaining covenants
26 and agreements of this ordinance and shall in no way affect the validity of the other provisions of
27 this ordinance or of the Bonds.
-30- CMW2JA.DOC 97!0224
1
2
3
4
Section 18. Effective Date. This ordinance shall become effective immediately upon its
adoption.
ADOPTED this 25th day of February, 1997.
ATTEST:
Dana -F3rown-
Clerk of the County Council
COUNTY COUNCIL, OF
WHATCOM COUNTY, WASHINGTON
4Jz.
Ward Nelson,
IA0.
Alvin Star enburg, Vi fe CLhaii
tter,
Tdm Brown, Councilmember
Declined to sign
Barbara Brenner, Councilmember
Ma ene Dawson, Councilmember
APPROVED DENIED
e Kremen
County Executive
Dated as of ' cxi alp, 1997
-31-
CMW2JA.00C 97/02124
EXHIBIT A
ESCROW DEPOSIT AGREEMENT
WHATCOM COUNTY, WASHINGTON
LIMITED TAX GENERAL OBLIGATION AND REFUNDING BONDS, 1997
THIS ESCROW AGREEMENT, dated as of March 17, 1997 (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 First Trust 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. 97 -009 adopted on February 25, 1997
(the 'Bond Ordinance "), the County has determined to issue its Limited Tax General Obligation
and Refunding Bonds, 1997 (the "1997 Bonds "). A portion of the 1997 Bonds 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, Ernst & Young LLP, Tucson, Arizona, Certified Public
Accountants, of Tucson, Arizona, have prepared a verification report which is dated March 17,
1997 (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 in such years, bear interest at such rates, and
be payable at such times and in such amounts as are set forth in Exhibit C attached hereto and
made a part hereof, and
WHEREAS, when Escrowed Securities have been deposited with the Escrow
Agent for the payment of all principal and interest of the Refunded Bonds when due, then the
Refunded Bonds shall no longer be regarded as outstanding except for the purpose of receiving
payment from the funds provided for such purpose; and
A -1 CMW2JA.DOC 97/02/24
WHEREAS, the issuance, sale, and delivery of the 1997 Bonds have been duly
authorized to be issued, sold, and delivered for the purpose of obtaining the funds required to
provide for the payment of the principal of, interest on and redemption premium (if any) on the
1997 Bonds when due as shown on Exhibit C attached hereto; and
WHEREAS, the County desires that, concurrently with the delivery of the 1997
Bonds to the purchasers thereof, the proceeds of the 1997 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 Securities" for deposit to the credit of the
Escrow Fund created pursuant to the terms of this Agreement and to establish a beginning cash
balance (if needed) in such Escrow Fund; and
WHEREAS, the Escrowed Securities shall mature and the interest thereon shall
be payable at such times and in such amounts so as to provide moneys which, together with cash
balances from time to time on deposit in the Escrow Fund, will be sufficient to pay interest on the
Refunded Bonds as it accrues and becomes payable and the principal of the Refunded Bonds as it
becomes due and payable; and
WHEREAS, to facilitate the receipt and transfer of proceeds of the Escrowed
Securities, particularly those in book entry form, the County desires to establish the Escrow Fund
at the principal corporate trust.office of the Escrow Agent; and
WHEREAS, the Escrow Agent is a party to this Agreement to acknowledge its
acceptance of the terms and provisions hereof,
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.
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:
"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 Securities" means the noncallable Government Obligations described in
Exhibit D attached to this Agreement, or cash or other noncallable obligations substituted therefor
pursuant to Section 4.2 of this Agreement.
A-2 CMW2JA. DOC 97/02/24
"Government Obligations" means direct, noncallable (a) United States Treasury
Obligations, (b) United States Treasury Obligations - State and Local Government Series,
(c) non - prepayable obligations which are unconditionally guaranteed as to full and timely payment
of principal and interest by the United States of America or (d) REFCORP debt obligations
unconditionally guaranteed by the United States.
"Paying Agent" means the fiscal agency of the State of Washington, as the paying
agent for the Refunded Bonds.
Section 1.2. Other Definitions.
The terms "Agreement," "County," "Escrow Agent," "Bond Ordinance,"
"Verification Report," "Refunded Bonds," and "1997 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 terms 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.
Article 2. Deposit of Funds and Escrowed Securities
Section 2.1. Deposits in the Escrow Fund.
Concurrently with the sale and delivery of the 1997 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 Securities 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 Securities 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
A-3 CMW2JA.DOC 97/02124
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 transfers of such amounts
at such times as are provided for in Section 3.2 hereof. When the final transfers have 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 from time to time on deposit in the Escrow Fund, the amounts required to
pay the principal of the Refunded Bonds at their respective redemption dates and interest thereon
to such redemption dates in the amounts and at the times 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 successive receipts of the principal of and interest on the Escrowed
Securities 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 at the times and in the
amounts required to pay the interest on the Refunded Bonds as such interest comes due and the
principal of the Refunded Bonds as the Refunded Bonds are paid on an optional redemption date
prior to maturity, 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
are lawfully available therefor, 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
Securities 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 Securities 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 Securities 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
owners of the Refunded Bonds shall be entitled to the same preferred claim and first lien upon the
Escrowed Securities, the proceeds thereof, and all other assets of the Escrow Fund to which they
are entitled as owners of the Refunded Bonds. 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
A-4 CMW2JA.DOC 97/02/24
shall have no right to title with respect thereto except as a trustee and Escrow Agent under the
terms of this Agreement. The amounts received by the Escrow Agent under this Agreement shall
not be subject to warrants, drafts or checks drawn by the County or, except to the extent
expressly herein provided, by the Paying Agent.
Article 4. Limitation on Investments
Section 4.1. Investments.
Except for the initial investment in the Escrowed Securities, 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 Securities, or to
sell, transfer, or otherwise dispose of the Escrowed Securities.
Section 4.2. Substitution of Securities.
At the written request of the County, and upon compliance with the conditions
hereinafter stated, the Escrow Agent shall utilize cash balances in the Escrow Fund, or sell,
transfer, otherwise dispose of or request the redemption of the Escrowed Securities and apply the
proceeds therefrom to purchase Refunded Bonds or Government Obligations which do not permit
the redemption thereof at the option of the obligor. Any such transaction may be effected by the
Escrow Agent only if (a) the Escrow Agent shall have received a written opinion from a firm of
certified public accountants that such transaction will not cause the amount of money and
securities in the Escrow Fund to be reduced below an amount sufficient to provide for the full.and
timely payment of principal of and interest on all of the remaining Refunded Bonds as they
become due, taking into account any optional redemption thereof exercised by the County in
connection with such transaction; and (b) the Escrow Agent shall have received the unqualified
written legal opinion of its bond counsel or tax counsel to the effect that such transaction will not
cause any of the 1997 Bonds or Refunded Bonds to be an "arbitrage bond" within the meaning of
Section 148 of the Internal Revenue Code of 1986, as amended.
Article 5.. Application of Cash Balances
Section 5.1. In General.
Except as provided in Section 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 U.S. currency and as cash balances as shown on the books and records of
the Escrow Agent and shall not be reinvested by the Escrow Agent.
A-5 CMW2JA.DOC 97/02/24
Article 6. Redemption of Refunded Bonds
Section 6.1. Call for Redemption.
The County hereby irrevocably calls the Refunded Bonds for redemption on their
earliest redemption dates, as shown in the Verification Report and on Appendix A attached
hereto.
Section 6.2. Notice of Redemption.
The Escrow Agent agrees to give notice of the redemption of the Refunded Bonds
pursuant to the terms of the Refunded Bonds and in substantially the form attached hereto as
Appendix A attached hereto and as described on said Appendix A. 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 and Reports
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 Securities deposited to the Escrow Fund
and all proceeds thereof, and such books shall be available for inspection during business hours
and after reasonable notice.
Section 7.2. Reports.
While this Agreement remains in effect, the Escrow Agent annually shall prepare
and send to the County a written report summarizing all transactions relating to the Escrow Fund
during the preceding year, including, without limitation, credits to the Escrow Fund as a result of
interest payments on or maturities of the Escrowed Securities and transfers from the Escrow Fund
for payments on the Refunded Bonds or otherwise, together with a detailed statement of all
Escrowed Securities and the cash balance on deposit in the Escrow Fund as of the end of such
period.
Article 8. Concerning the Paying Agents 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.
A -6 CM W 2JA. DOC 97/02/24
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 Securities
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 failure of the obligors
of the Escrowed Securities 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 1997 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 1997 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 of judgment; 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
A -7 CMW2JA.DOC 97/02/24
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.
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 its principal 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.
A-8 CMW2JA.DOC 97/02f24
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 Securities and money held by
the 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 or the Escrow Agent at the
address shown on Exhibit A 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.
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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.
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. Notice to Moody's and S &P.
In the event that this agreement or any provision thereof is severed, amended or
revoked, the County shall provide written notice of such severance, amendment or revocation to
Moody's Investors Service at 99 Church Street, New York, New York, 10007, Attention: Public
Finance Rating Desk/ Refunded Bonds and to Standard & Poor's Ratings Services, a Division of
The McGraw -Hill Companies, 25 Broadway, New York, New York 10004, Attention: Municipal
Bond Department.
Section 9.8. 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
Chair, Cou ty Council
FIRST TRUST NATIONAL
ASSOCIATION
Title:
A -10 CMW2JA OOC 97102124
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Appendix A
Appendix B
Addresses of the County, the County Treasurer and the Escrow Agent
- Description of the Refunded Bonds
- Schedule of Debt Service on Refunded Bonds
- Description of Beginning Cash Deposit (if any) and Escrowed Securities
- Escrow Fund Cash Flow
- Notice of Redemption - 1991 Bonds
- Fee Schedule
A -11
CMW2JA.DOC . 97/02/24
EXHIBIT A
Addresses of the County, the Treasurer and Escrow Agent
County: Whatcom County Council
Whatcom County Administration Building
311 Grand Avenue
Bellingham, WA 98225
County Treasurer: Whatcom County Treasurer
Whatcom County Courthouse
311 Grand Avenue
P. O. Box 5268
Bellingham, WA 98227 -5268
Escrow Agent: First Trust National Association
Two Union Square
601 Union Street, Suite 2120
Attention: Shirley Young
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Maturities
(August 1)
2002
2003
2004
2005
2006
2007
2008
2011
EXHIBIT B
Description of the Refunded Bonds
1991 Refunded Bonds
Principal Amounts
$ 550,000
575,000
625,000
650,000
700,000
750,000
800,000
2,800,000
Interest Rates
6.6%
6.7
6.8
6.9
7.0
7.0
7.0
7.0
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EXHIBIT C
Schedule of Debt Service on Refunded Bonds
Date Principal/
(June 1) Interest Redemption Price
Total
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I. Cash $1
H. Other Obligations
Description Maturity Date
M. Costs of Issuance
Bond Counsel
Moody's
S &P's
Ernst & Young
First Trust National Association
Printing costs
EXHIBIT D
Escrow Deposit
Principal
Amount Interest Rate Total Cost
8,275
7,000
2,500
2,400
725
A -D -1
CMW2JA.D0C 97/02/24
EXHIBIT E
Escrow Fund Cash Flow
Escrow Net Escrow Excess
Date Requirement Receipts Receipts
Cash Balance
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APPENDIX A
Notice of Redemption'
Whatcom County, Washington
Limited Tax General Obligation Bonds, 1991
NOTICE IS HEREBY GIVEN that the Whatcom County, Washington has called
for redemption on August 1, 2001, a portion of its then outstanding Limited Tax General
Obligation Bonds, 1991 (the 'Bonds ").
The Bonds will be redeemed at a price of one hundred percent (100 %) of their
principal amount, plus interest accrued to August 1, 2001. The redemption price of the Bonds is
payable on presentation and surrender of the Bonds at the office of:
The Bank of New York
Fiscal Agency Department
Ground Floor
10.1 Barclay Street
7 East
New York, NY 10286
Wells Fargo Bank, N.A.
Corporate Trust Department
-or- 14th Floor - M/S 257
999 Third Avenue
Seattle, WA 98104
Interest on all Bonds or portions thereof which are redeemed shall cease to accrue
on August 1, 2001.
The following Bonds are being redeemed:
Maturities
(August 1)
2002
2003
2004
2005
2006
2007
2008
2011.
Principal Amounts
$ 550,000
575,000
625,000
650,000
700,000
750,000
800,000
2,800,000
Interest Rates
6.6%
6.7
6.8
6.9
7.0
7.0
7.0
7.0
* This notice shall be given not more than 60 nor less than 30 days prior to August 1, 2001 by first
class mail to each registered owner of the Refunded Bonds. In addition notice shall be mailed at least 35
days prior to August 1, 2001 to The Depository Trust Company of New York, New York; Midwest
Securities Trust Company of Chicago, Illinois; Pacific Securities Depository Trust Company of San
Francisco, California; Philadelphia Depository Trust Company of Philadelphia, Pennsylvania; Seattle -
Northwest Securities Corporation, Seattle, Washington.
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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 31% 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.
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APPENDIX B
Fee Schedule
Escrow Agent Fee: $2,400
CERTIFICATE
I, 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:
1. That the attached ordinance is a true and correct copy of Ordinance No. 9V09 of
the Council (herein called the "Ordinance "), duly adopted at a regular meeting thereof held on the
25th day of February, 1997.
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 25th day of February, 1997.
`Ole my Council
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