10-24-2011 AgendaCITY OF WOODBURN
CITY COUNCIL AGENDA
OCTOBER 24, 2011 - 7:00 P.M.
KATHRYN FIGLEY, MAYOR
DICK PUGH, COUNCILOR WARD I
J. MEL SCHMIDT, COUNCILOR WARD II
PETER MCCALLUM, COUNCILOR WARD III
JAMES COX, COUNCILOR WARD IV
FRANK LONERGAN, COUNCILOR WARD V
ERIC MORRIS, COUNCILOR WARD VI
CITY HALL COUNCIL CHAMBERS - 270 MONTGOMERY STREET
1. CALL TO ORDER AND FLAG SALUTE
2. ROLL CALL
3. ANNOUNCEMENTS AND APPOINTMENTS
Announcements
A. City Hall and the Library will be closed Friday, November 11,
2011 in observance of Veterans Day. The Aquatic Center will
be open during normal business hours.
Appointments
None
4. COMMUNITY /GOVERNMENT ORGANIZATIONS
A. Chamber of Commerce
B. Woodburn School District
C. Woodburn Unidos
5. PROCLAMATIONS /PRESENTATIONS
Proclamations
None
Presentations
A. 2009/10 Audit
6. COMMUNICATIONS
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7. BUSINESS FROM THE PUBLIC -This allows the public to introduce items for
Council consideration not already scheduled on the agenda.
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October 24, 2011 Council Agenda Page i
8. CONSENT AGENDA - Items listed on the consent agenda are considered
routine and may be adopted by one motion. Any item may be removed
for discussion at the request of a Council member.
A. Woodburn City Council minutes of October 10, 2011
Recommended Action Approve the minutes.
B. Woodburn City Council Executive Session minutes of October
10, 2011
Recommended Action Approve the minutes.
C. Audit Report
Recommended Action
Accept the report.
D. Woodburn Recreation and Park Board minutes of October 11,
2011
Recommended Action Accept the minutes.
E. Crime Statistics through September 2011
Recommended Action Accept the report.
9. TABLED BUSINESS
None
10. PUBLIC HEARINGS
1110=@ _
11. GENERAL BUSINESS - Members of the public wishing to comment on items of
general business must complete and submit a speaker's card to the City
Recorder prior to commencing this portion of the Council's agenda.
Comment time may be limited by Mayoral prerogative.
A. Council Bill No. 2878 - An Ordinance Relating to
Reapportionment of Ward Boundaries, Repealing Ordinance
2304, and Declaring an Emergency
Recommended Action Adopt the Ordinance.
B. Council Bill No. 2879 - A Resolution Authorizing the Issuance of
Water System Revenue Refunding Bonds and a Master Water
System Bond Declaration
Recommended Action: Approve the attached resolution
authorizing the issuance of Water System Revenue Refunding
Bonds and a Master Water System Bond Declaration.
1
6
7
13
17
22
October 24, 2011 Council Agenda Page ii
C. Council Bill No. 2880 - A Resolution Authorizing the Issuance of 107
Wastewater Revenue and Refunding Bonds and a Master
Wastewater System Bond Declaration
Recommended Action Approve the attached resolution
authorizing the issuance of Wastewater Revenue and Refunding
Bonds and a Master Wastewater System Bond Declaration.
12. PLANNING COMMISSION OR ADMINISTRATIVE LAND USE ACTIONS - These
are Planning Commission or Administrative Land Use actions that may be
called up by the City Council.
None
13. CITY ADMINISTRATOR'S REPORT
14. MAYOR AND COUNCIL REPORTS
15. ADJOURNMENT
October 24, 2011 Council Agenda Page iii
COUNCIL MEETING MINUTES
OCTOBER 10, 2011
0:00 DATE COUNCIL CHAMBERS, CITY HALL, CIT Y OF WOODBURN, COUNTY
OF MARION, STATE OF OREGON, OCTOBER 10, 2011.
CONVENED The meeting convened at 7:00 p.m. with Mayor Figley presiding.
ROLL CALL
Mayor Figley
Present
Councilor Cox
Present
Councilor Lonergan
Present
Councilor McCallum
Present
Councilor Morris
Present
Councilor Pugh
Present
Councilor Schmidt
Present
Staff Present: City Administrator Derickson, City Attorney Shields, Community
Services Director Row, Public Works Director Brown, Police Chief Russell, Police
Captain Garrett, Recreation Services Manager Spence, Community Relations Officer
Stowers, Recorder Shearer.
0:00 ANNOUNCEMENTS
Grand Reopening of the Woodburn Aquatic Center on Wednesday October 12 at 4pm.
0:01 COMMUNITY /GOVERNMENT REPORTS
A. Woodburn Area Chamber of Commerce — Don Judson, Executive Director, provided an
update on upcoming Chamber events. Don also announced that the Chamber will be
relocating their offices. In addition, Don, provided a report on the 2011 Fiesta
Mexicana.
B. Woodburn Downtown Unidos — Erubio Valladares, President, provided a video
overview of the Mexican Independence Day event.
0:22 PROCLAMATION
Mayor Figley read proclamation: "Keeping the Lights on After School"
0:26 PRESENTATIONS
A. Street Trees — Public Works Director Brown provided an informational overview of the
City's treatment of street trees and notified Council that four large black walnut trees
will need to be removed soon. He discussed the City process for evaluating trees for
removal and ensuring appropriate replacements. He provided a copy of Ordinance 2424
which is the primary policy for trees. He also discussed the kinds of tree situations
where removal is appropriate, either due to the health of the tree or because of damage to
infrastructure. Public works staff has the expertise to evaluate trees without the need for
a certified arborist, however staff could pursue certification if necessary. Director
Brown also described the financial obligations and dilemmas that face property owners
Page 1 - Council Meeting Minutes, October 10, 2011
COUNCIL MEETING MINUTES
OCTOBER 10, 2011
when street tree issues arise. He also talked about the options to save trees that are
damaging right of way (such as sidewalks).
Councilor McCallum asked if there were lessons to be learned from the Ironwood Street
Tree Local Improvement District (LID) project. Director Brown stated that there were
ways to prevent or mitigate street tree damage to infrastructure, but that the Ironwood
LID was possible due to the presence of a Homeowner's Association that facilitated the
formation of the LID. Director Brown stated that many Woodburn neighborhoods do
not have the financial means to take on as a large project as Ironwood.
Director Brown gave an overview of suggestions made by Durrell Crays regarding
preserving the Downtown canopy including the use of fees and requiring certified
arborist reports. Mr. Crays is also concerned about replacement tree replanting
compliance and the size of the replacement trees required. Administrator Derickson
discussed the need to establish a funding source if the City wished to pursue a more
involved Street Tree program.
Councilor Pugh would like the City to pursue alternatives to tree removal when
infrastructure is damaged. Director Brown discussed a few examples of how that has
been and could be accomplished.
Councilor Cox appreciates the report and agrees with the objectives of the program. He
also acknowledges the burden that is placed on property owners when dealing with this
issue. He does believe the City needs to take more responsibility and wants to take some
of the financial burden from the low to moderate income property owners. Director
Brown stated that the City spends approximately $15,000 on urban forestry issues, but
this varies year to year. Councilor Cox feels that trees area community asset, not just a
private property asset and does not believe an LID is the answer due to the year to year
variability. He feels it should be absorbed by the City budget.
Councilor Pugh commented on street trees in the Montebello neighborhood. There was
discussion among Council and Director Brown regarding the street trees in the
Montebello neighborhood. Director Brown discussed the process staff has established
for the Montebello neighborhood. Councilors discussed the narrow planting strips
utilized in that neighborhood that were not appropriate for street trees.
Councilor Schmidt discussed the cost differences between different tree sizes, and the
rate of growth that can be expected from replacement trees of different sizes. Councilor
McCallum commended staff for being proactive in addressing the street tree issue and
for being creative in working within the financial limitations of the City and property
owners. He encouraged staff to look for alternative funding mechanisms.
Page 2 - Council Meeting Minutes, October 10, 2011
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COUNCIL MEETING MINUTES
OCTOBER 10, 2011
City Administrator Derickson discussed what would be involved in developing a more
robust urban forestry program and committed to investigating such a program for the
next budget cycle. Councilor Cox agrees, but doesn't necessarily agree with pursuing a
Tree City USA designation or with the need for arborist certifications. Councilor
Lonergan suggests that establishing a list of approved arborists may accomplish the
City's goals.
Durrell Crays provided Council with a written statement that includes several policy
suggestions (appended to official packet). He also stated that he concurred with the
assessment that the four large black walnut trees needed removal. He emphasizes the
need to preserve the existing canopy and to accelerate the replenishment of the canopy
when trees need to be preserved. His emphasis is within the Neighborhood
Conservation Overlay District (NCOD), but feels his suggestions could be extended to
other areas of the City if desired.
Councilor Morris commented on the cost to maintain large trees. He also expressed the
need to establish City wide standards, not just within the NCOD. Councilor Lonergan
also commented on the damage done to trees by PGE through their pruning efforts to
protect their overhead lines.
1:19 B. Ward Redistricting — Lesley Hegewald, GIS Analyst with the Mid- Willamette Council
of Governments (COG), provided a presentation (appended to the official packet) on her
work to develop new Ward boundaries reflecting data from the 2010 census. The City
contracted for the COG's assistance with this mandated project. The criterion for the
ward boundaries is set by the Oregon Secretary of State. Only those census blocks
within the City limits were utilized. Three alternatives were developed — minimal
change, most balanced population, and major roads used as boundaries. All are
compliant with the Secretary of State's criteria. The bulk of the City's growth has
occurred in the current Ward #1.
Ms. Hegewald outlined the timeline necessary to comply with County election
requirements, which requires that new boundaries be submitted by November 1 City
Administrator Derickson went on to state that the plan was for Council to tentatively
select an alternative tonight, and formally adopt that selection at the next Council
meeting.
Council discussed the options briefly and generally felt that alternatives 1 and 2 were
acceptable, while discarding alternative 3. Cox/McCallum... approve alternative 2 for
ward redistricting authorize the Council of Governments to proceed with that alternative
for County election purposes, and direct staff to return to the October 24 with legislation
for adoption. The motion passed unanimously.
Page 3 - Council Meeting Minutes, October 10, 2011
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COUNCIL MEETING MINUTES
OCTOBER 10, 2011
1:31 BUSINESS FROM THE PUBLIC
1. Gary LaPoint of 850 Lawson Ave, spoke regarding a presentation he made to the
Woodburn Area Chamber of Commerce regarding street maintenance funding. He does
not feel the existing City gas tax is fair to the gas stations in the area and has an
alternative proposal based upon fees established in the City of Wilsonville (appended to
official packet).
Councilor Cox asked if Mr. LaPoint would still support his proposal if it did not include
the repeal of the existing City gas tax. Mr. LaPoint stated he wouldn't like it, but he
would support it. Councilor Pugh attributes much of the problem to the poor economy
but doesn't support this proposal. He welcomes discussion about the issue, though.
2. Dagmar Kinne, of 586 Grant St had additional comments regarding trees. She had
experience with an arborist to remove a tree and repair of a sidewalk damaged by a tree.
It was expensive. She feels that the large trees need to be preserved and the costs of
maintaining them are part of the price we pay to have them. She is also in favor of
creativity in dealing with infrastructure damage by trees. She would also like a tree
database with photos.
1:50 CONSENT AGENDA
A. Approve Woodburn City Council minutes of September 26, 2011,
B. Accept Woodburn Recreation and Park Board minutes of September 13, 2011, and
McCallum /Cox.... adopt the consent agenda as presented. The motion passed unanimously.
1:51 COUNCIL BILL NO. 2876 — AN ORDINANCE AMENDING ORDINANCE 2338
(THE NUISANCE ORDINANCE) TO CLARIFY THE CITY'S TREATMENT OF
WILD NATURAL AREAS
Councilor McCallum introduced Council Bill 2876. Recorder Shearer read the two
readings of the bill by title only since there were no objections from the Council. Councilor
Schmidt had questions regarding the standards applied by Public Works while mowing.
Public Works Director Brown and City Administrator Derickson clarified that those are set
by policy, not the ordinance. That policy can be influenced by state and federal clean water
and wildlife standards. A draft of a map that outlines these areas has been prepared.
Councilor Cox added that this ordinance provides the City Administrator the flexibility to
respond to changing requirements without the need for an Ordinance every time. The
ordinance allows staff to address these requirements administratively. On roll call vote for
final passage, the bill passed unanimously. Mayor Figley declared Council Bill No. 2876
duly passed.
Page 4 - Council Meeting Minutes, October 10, 2011
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COUNCIL MEETING MINUTES
OCTOBER 10, 2011
a:oa COUNCIL BILL NO. 2877 — AN ORDINANCE AMENDING ORDINANCE 2284
(THE TELECOMMUNICATIONS ORDINANCE) AND DECLARING AN
EMERGENCY
Councilor McCallum introduced Council Bill 2877. Recorder Shearer read the two
readings of the bill by title only since there were no objections from the Council. On roll call
vote for final passage, the bill passed unanimously. Mayor Figley declared Council Bill No.
2877 duly passed.
2:03 APPRAISAL OF PROPERTY POTENTIALLY DONATED TO THE CITY
Community Services Director Row provided an overview of the opportunity to partner with
Immanuel Lutheran Church for public use of their property. Cox/Lonergan... authorize
staff to obtain the appraisal as recommended by the staff report. The motion passed
unanimously.
2:18 CITY ADMINISTRATOR'S REPORT
• City Administrator had nothing to report.
axis MAYOR AND COUNCIL REPORTS
• Councilor Morris recently attended the League of Oregon Cities meeting. He found
some of the sessions very useful.
• Councilor Morris reported on a project by the City of Eugene to reexamine their road
program in light of limited funding.
2:23 EXECUTIVE SESSION
Mayor Figley entertained a motion to adj ourn into executive session under the authority of
ORS 192.660(2)(i). For the record, City Attorney Shields waived his right to an open
hearing for his evaluation. Lonergan /Cox ... adjourn to executive session under the
statutory authority cited by the Mayor. The motion passed unanimously.
The Council adjourned to executive session at 9:30 pm and reconvened at 9:48 pm. Mayor
Figley stated that no action was taken by the Council while in executive session.
2:23 ADJOURNMENT
Schmidt/McCallum... meeting be adjourned. The motion passed unanimously.
The meeting adjourned at 9:50 p.m.
• I
KATHRYN FIGLEY, MAYOR
ATTEST
Christina M. Shearer, Recorder
City of Woodburn, Oregon
Page 5 - Council Meeting Minutes, October 10, 2011
I
Executive Session
COUNCIL MEETING MINUTES
October 10, 2011
DATE. CONFERENCE ROOM, CITY HALL, CITY OF WOODBURN, COUNTY OF
MARION, STATE OF OREGON, OCTOBER 10, 2011.
CONVENED. The Council met in executive session at 9:30 p.m. with Mayor Figley presiding.
ROLL CALL.
Mayor
Figley
Present
Councilor
Cox
Present
Councilor
Lonergan
Absent
Councilor
McCallum
Present
Councilor
Morris
Present
Councilor
Pugh
Present
Councilor
Schmidt
Present
Staff Present: City Recorder Shearer, City Attorney Shields (9:40 pm).
Media Present: None.
Mayor Figley reminded the Councilors, media and staff that information discussed in executive
session is not to be discussed with the public.
The executive session was called to:
• To review and evaluate, pursuant to standards, criteria and policy directives adopted
by the governing body, the employment - related performance of the chief executive
officer of any public body, a public officer, employee or staff member unless the
person whose performance is being reviewed and evaluated requests an open hearing
pursuant to ORS 192.660(2)(i)
• For the record, during the open session of the City Council meeting, City Attorney
Shields waived his right to an open hearing.
ADJOURNMENT.
The executive session adjourned at 9:48 p.m.
KATHRYN FIGLEY, MAYOR
ATTEST
Christina M. Shearer, Recorder
City of Woodburn, Oregon
Pagel — Executive Session, Council Meeting Minutes, October 10, 2011
I
City of Woodburn
Recreation and Park Board Minutes"'
October 11 2011 • 6:30 p.m.
W OODBURN
1. CALL TO ORDER
The meeting and was called to order at 6:30 p.m.
2. ROLL CALL
Position I , Member (12/13) vacant
Position II (Student) Claudia Urias- Guerrero (12/11) Absent
Position III Joseph Nicoletti, Board Secretary (12/13) Present
Position IV Rosetta Wangerin, Board Chair (12/13) Present
Position V Bruce Thomas, Member (12/13) Present
Position VI Cheryl Shepherd, Member (12/11) Absent
Position VII Tony Waite (12/12) Absent
3. APPROVAL OF MINUTES
Joseph NicolettiBruce Thomas - Motion to accept the September 13, 2011 minutes
as written and seconded. The motion passed unanimously.
4. BUSINESS FROM AUDIENCE
None.
5. OLD BUSINESS
Immanuel Lutheran Church Proiect — Jim Row
Jim reminded the Board that back in April Terri Berkey- Gonzalez, an Immanuel
Church representative came to a meeting to discuss a potential partnership with the
City. The partnership would involve the Church developing a soccer field on the
eastern portion of their newly acquired property at Evergreen and Linfield, with the
City accepting responsibility for irrigating and maintaining the site. In return, the city
would be provided with the rights to utilize it as a public park and for the operation of
City recreation programs.
After considering the project further, the City has proposed that the church consider
dedicating 2.4 acres to the City, with the City accepting responsibility for
constructing the soccer field. The City would then provide the Church with
development fee waivers, and other services of commensurate value. This approach
provides a couple benefits, including the fact that the City can apply the value of the
donated property as a match for park development grant funds and the Church can
then earmark their saved funds toward advancing their timeline for constructing their
new church facility. The next step involves conducting an appraisal to determine the
value of the property. First, a property appraisal must be conducted to determine the
value of the donated property and the level of fee waivers and other services the City
can offer the Church. Once that is established, the City will negotiate package with
the Church, which will have to be approved by the City Council. At their October 10
Page 1 of 6
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City of Woodburn
Recreation and Park Board Minutes"'
1.
October 11 2011 • 6:30 p.m. Tj ][ jOODBuR N
meeting, the City Council authorized staff to conduct the appraisal. Discussion took
place on the need and plans for future park development in that area.
Bruce asked if this project was going to take funds away from other projects. Jim
indicated that if the project moves forward, he would seek grant funds to cover the
majority of the development costs. It may be necessary to spend some of the City's
park development funds on the project, but we would attempt to keep that to a
minimum.
Wyffels Park Proiects — Jim Row
Jim indicated that Community Services and Public Works are trying, once again to
secure grant funding for a proposed boardwalk trail through Wyffels Park, from
Lincoln St to Hardcastle Ave. Public Works is pursuing fundiong through ODOT's
Flexible Funds Program, while Community Services is looking at the State of
Oregon's Recreational Trails Program. Both programs have very low mitch
requirements of between 10 % -20 %. Jim provided an update on the remaining
boundary issue with the National Park Service that postponed the playground
replacement project last summer. He continues to work with them on this issue
hoping to resolve it and initiate the project his spring.
6. NEW BUSINESS
BOYS AND GIRLS CLUB UPDATE — Alison Weaver
Stu introduced Alison Weaver, Woodburn Boys and Girls Club Branch Director. The
mission of the Boys and Girls Club is to enable all young people, especially those
who need us most, to reach their full potential as production caring responsible
citizens. Alison gave a PowerPoint presentation on the Boys and Girls Club giving a
broad understanding of the program.
Their Formula for Impact involves academic success, character, leadership and
healthy lifestyles. The academic success included literacy, computer skills,
photography opportunities, and basic paragraph writing. The kids finished products
are visible in the monthly parent newsletter. A popular club is the Guitar Club, but
they have just recently lost their volunteer and in the process of looking for another
volunteer to keep this popular club going. The Club has daily tutoring helping kids
with homework. Alison said that good GPA scores were required to participate in
various programs and field trips. Alison shared that they would like to use high
school volunteers as tutors for this program.
The Power Teens /Keystone Club is open for 14 to 18 year olds with good character.
She shared pictures of the kids in this program who started a garden, participated in
the Well Springs Saturday Market this summer, toured college campus, monthly job
shadowing, worked on charitable fundraisers, and participated in several community
service projects and a successful reading buddy program. Alison reported that the
Boys and Girls Club also participates in community dinners for the needy, Read -a-
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City of Woodburn
Recreation and Park Board Minutes
october 11 zol l 6:3o p.m. OODBURN
thons, Woodburn Reads, aid to the National Guard, volunteering with the Red Cross.
They are looking forward to attending the iLead Leadership conference this year.
The Torch Club for middle school age kids focuses on community service projects.
This year they have signed up with Marion County for the Adopt A Street project. In
December they are organizing a clothes and toy drive and they just send boxes and
letters to support the armed service troops. This year they completed a service project
Rake and Run where the kids rake leaves in piles for people in their yards and run to
another to rake.
She shared how much the PAL Mentoring Proms enhanced the program with
positive high school kids and adults doing weekly projects while providing one -on-
one guidance. The Healthy Lifestyles Program includes workouts at Diesel Fitness,
healthy cooking classes, making healthy choices and health and dental services. They
are committed to providing effective health services to students in the community.
Alison stated that she is excited to be involved with the Woodburn Outdoors
Program This program is a partnership with the school district that reconnects
young people with nature, expands their views of a natural and physical world,
promoting health and wellness while cultivating skills such as stewardship, leadership
and teamwork. Alison shared pictures of their current rock climbing experience.
Each month follows a theme and gives kids something to look forward to. Currently
they are looking for funding so they can offer swim lessons.
DIVISION REPORTS
Aquatics — Kristin Graybeal
Finances - Kristin indicated that preliminary numbers through September indicate that
Q1 revenues are up $1,677 over last year. With expenditures down almost $59,000,
our cost recovery rate is currently right at 50 %. Last year through the first quarter, it
was running at 31 %.
Re- plaster Project — Displayed pictures of the project that are posted on the Aquatic
Center's Facebook page. The re -open on October 1 went well. The new underwater
LED lights work great and will be used in the Spooky Splash event on October 29
No major challenges was encountered, just a few slip -ups. Many other significant
maintenance items were all completed at the same time. Kristin reported that she has
been receiving a lot of compliments on the new look. The Open House will be on
October 12 from 4 -5pm.
Fourth Grade Swim Lessons — Woodburn Together contributed $1,000 this year and
Woodburn Proud funded the remaining $2,800. The Woodburn School District is
providing transportation again and lessons will begin with session in November.
Page 3 of 6
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City of Woodburn „Y
Recreation and Park Board Minutes"'
October 11 2011 • 6:30 p.m. W 00DBU9�T
Winter — Spring 2012 Program Guide — Kristin shared that she was ordering 5,000
copies of their own program guide. She has been busy transforming the back storage
room into space for dryland classes and a parry rental room. The Aquatic Center will
now be open on Saturdays starting at 9am.
Summer 2012 — Kristin is working with Radio Disney for a summer -wide promotion.
She is now in the stage of finding a large sponsor and collaborating with Su Publico,
the marketing firm that brought the U of O and Verizon to the Fiesta.
Challenges — Staff scheduling has been difficult during the day with as many exsting
employees return to college. The Lifeguard Certification class on October 15 & 16
has 8 participants. Kristin shared that being closed for a month has been difficult to
recover from. Swim lessons signups for 1 session is slow and evening class size is
down.
Recreation — Stu Spence
Stu unveiled the new Leisure Services logo and thanked the Board for giving their
input.
1785 Locomotive — Staff will meet with Frank Scheer, a volunteer who has done
extensive work on the local 1785 Locomotive, to talk about ways to engage
Woodburn youth with the educational opportunities it provides.
Youth Sports —Youth Soccer is going strong and next is Pee Wee Basketball. Adult
Sports — Men's Basketball had 28 teams last year and 17 this year. Even though
teams were reminded, many just missed the registration deadline.
After School Program — 320 students currently enrolled. The Mayor proclaimed
October 20 in Woodburn as Lights On After School Day This proclamation
recognizes the importance of after school programs for families and kids with parents
working, providing extended learning opportunities to kids after school hours. On
October 26, Oregon ASK is holding their conference in Woodburn at French Prairie
Middle School.
P.A.L. Mentoring_ —New Mentor Coordinator, Andrea Oropeza has extensive
experience in school counseling and has several local contacts. She is looking
forward to giving the program better structure
Active Adult — A group of 17 participants just got back from an over -night trip to
KahNeeTah. The next trip is a Murder mystery train ride aboard the Mt. Hood
Railroad.
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City of Woodburn„
Recreation and Park Board Minutes
October 11 2011 • 6:30 p.m.
W OODBUR N
YAB — This Wednesday is their annual fall recruitment parry. They are looking to
gain more members to accomplish specific projects this year.
Events:
Trick or Treating — October 31 is not only Halloween, but also the date of this year's
Downtown Trick or Treating at the Plaza. Games and crafts will be provided for kids
and local businesses are participating in candy give -a -ways.
Parks and Facilities — Jim Row
2011 Park Use Analysis
Jim displayed the 2011 Park Use Analysis mainly to provide general statistics of
events and park shelter reservations for the Board. The analysis covered our active
service period of April — September 2011. Over that period of time, we scheduled 88
individual reservations, with a total attendance of 28,488. Jim pointed out that the
Fiesta Mexicana attributed to 15,000 of the total attendance. Discussion took place
on the success and highlights of the 2011 Fiesta Mexicana event. Jim stated that the
2011 Fiesta Mexicana event netted $18,000 compared to $3,500 last year. The
agreement between the City and Chamber of Commerce stipulates a percentage of the
yearly net revenue be put into a community grant program and that the Chamber
created a mini -grant application providing community organizations with the
opportunity to apply for grants of up to $500.
Mill Creek Greenway Proiect
Jim reported that the pond observation platform is completed and you can now walk/
run the trail around the pond up to Deer Run St. Currently, the contractor is finishing
site restoration. Jim encouraged everyone to check it out. He also stated that parks
maintenance personnel have been working closely with an Eagle Scout who is
constructing and installing seven trail signs, and a few trailhead signs have already
been installed. Rosetta asked if there had been any current neighborhood concerns
regarding the trail. Jim stated that he has heard from a few neighbors who originally
had concerns with the project, but are now pleased with its completion and the
manner in which it is being used.
7. FUTURE BOARD BUSINESS
None
8. BOARD COMMENTS
Rosetta thanked everyone for their hard work.
9. ADJOURNMENT
The meeting was adjourned at 7:50pm
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City of Woodburn
Recreation and Park Board Minutes
October 11, 2011 • 6:30 p.m
ODBURN
Joseph Nicoletti, Board Secretary Paulette Zastoupil, Recording Secretary
Date Date
Page 6 of 6
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10/18/2011 Woodburn Police Department
MONTHLY ARRESTS BY OFFENSES
JANUARY THRU DECEMBER 2011
CHARGE DESCRIPTION
Total
Jan
Feb
Mar
Apr
May
Jun
Jul
ug
Sep
0
0
0
0
0
0
0
0
0
0
AGGRAVATED ASSAULT
40
13
0
6
2
3
4
8
3
1
ANIMAL CRUELTY
2
0
0
0
0
1
0
1
0
0
ANIMAL ORDINANCES
13
1
0
0
0
4
4
1
1
2
ARSON
7
0
0
0
0
0
0
4
3
0
ASSAULT SIMPLE
92
19
8
11
6
10
8
10
15
5
BURGLARY - BUSINESS
2
0
0
0
0
0
1
0
0
1
BURGLARY - OTHER STRUCTURE
4
0
0
0
0
4
0
0
0
0
BURGLARY - RESIDENCE
18
4
1
1
6
3
1
1
1
0
CHILD NEGLECT
12
1
1
4
1
0
0
2
2
1
CITY ORDINANCE
1
0
1
0
0
0
0
0
0
0
CRIME DAMAGE -NO VANDALISM OR ARSON
11
0
1
1
1
1
1
2
3
1
CRIMINAL MISTREATMENT
5
0
0
1
0
0
0
0
0
4
CURFEW
4
0
0
4
0
0
0
0
0
0
CUSTODY - DETOX
7
1
0
1
1
0
1
2
1
0
CUSTODY - MENTAL
43
3
4
8
3
7
6
4
4
4
CUSTODY - PROTECITVE
3
0
0
1
0
0
0
0
2
0
DISORDERLY CONDUCT
43
3
7
5
10
7
1
3
2
5
DRIVING UNDER INFLUENCE
88
5
3
12
13
15
9
11
12
8
DRUG LAW VIOLATIONS
111
3
8
41
20
12
9
7
6
5
DWS /REVOKED - FELONY
1
1
0
0
0
0
0
0
0
0
DWS /REVOKED- MISDEMEANOR
24
2
2
2
2
2
3
4
2
5
ELUDE
2
0
0
0
1
0
1
0
0
0
EMBEZZLEMENT
3
1
0
0
0
1
1
0
0
0
ESCAPE FROM YOUR CUSTODY
1
0
0
0
0
1
0
0
0
0
FAIL TO DISPLAY OPERATORS LICENSE
19
4
2
2
2
5
3
0
0
1
FAILURE TO REGISTER AS SEX OFFENDER
2
0
1
0
0
0
0
0
1
0
FORGERY /COUNTERFEITING
24
3
0
0
9
2
4
1
4
1
FRAUD - BY DECEPTION /FALSE PRETENSES
3
0
1
0
0
1
0
0
0
1
FRAUD - CREDIT CARD /AUTOMATIC TELLER MACHINE
7
0
1
1
0
0
2
0
1
2
FRAUD - IMPERSONATION
4
0
0
0
0
0
0
0
4
0
FUGITIVE ARREST FOR ANOTHER AGENCY
172
20
19
16
30
27
19
9
16
16
FURNISHING
13
2
0
4
0
0
6
0
1
0
GARBAGE LITTERING
3
0
0
0
0
1
0
1
1
0
HIT AND RUN FELONY
4
0
0
0
0
0
1
2
1
0
HIT AND RUN - MISDEMEANOR
13
2
0
1
1
1
1
0
2
5
IDENTITY THEFT
13
0
1
0
4
1
3
0
1
3
INTIMIDATION /OTHER CRIMINAL THREAT
33
11
1
6
7
2
2
0
3
1
KIDNAP - FOR ADDITIONAL CRIMINAL PURPOSE
4
2
0
0
0
0
2
0
0
0
MINOR IN POSSESSION
39
11
3
3
6
9
4
2
1
0
MOTOR VEHICLE THEFT
3
0
0
1
1
0
1
0
0
0
OTHER
70
6
6
7
10
11
9
11
4
6
RECKLESS DRIVING
9
0
0
1
1
1
1
1
3
1
RESTRAINING ORDER VIOLATION
4
0
1
1
0
1
1
0
0
0
ROBBERY - BUSINESS
3
0
0
0
2
0
0
1
0
0
ROBBERY -OTHER
1
1
0
0
0
0
0
0
0
0
RUNAWAY
17
1
0
4
0
8
0
2
1
1
EX CRIME - CONTRIBUTE TO SEX DELINQUENCY
6
2
0
0
0
0
0
0
1
3
EX CRIME - FORCIBLE SODOMY
1
1
0
0
0
0
0
0
0
0
EX CRIME - MOLEST (PHYSICAL)
13
8
0
0
1
0
1
0
1
2
EX CRIME - NON FORCE SODOMY
2
0
0
0
1
0
0
0
0
1
EX CRIME - NON -FORCE RAPE
2
0
0
0
1
0
0
0
1
0
EX CRIME - OTHER
1
1
0
0
0
0
0
0
0
0
EX CRIME - PORNOGRAPHY /OBSCENE MATERIAL
2
0
0
0
0
0
0
0
0
2
Page 1 of 2
13
10/18/2011 Woodburn Police Department
MONTHLY ARRESTS BY OFFENSES
JANUARY THRU DECEMBER 2011
2010 Total 1,162 142 127 127 120 138 135 115 122 136
2009 Total 1,586 136 199 169 170 168 192 173 176 203
1600
1400
1200
y 1000
N
w 800
Q 600
400
200
0
Page 2 of 2
Arrests / Year
14
2009 2010 2011
Year
Total
an
Feb
Mar
pr
May
Jun
Jul
Aug
Sep
TALKER
1
0
0
0
0
0
0
0
1
0
STOLEN PROPERTY - RECEIVING,BUYING,POSSESSING
2
0
1
0
0
1
0
0
0
0
HEFT - BICYCLE
2
0
0
0
0
1
0
0
0
1
HEFT - BUILDING
9
1
1
0
7
0
0
0
0
0
HEFT - FROM MOTOR VEHICLE
2
0
0
0
0
1
1
0
0
0
HEFT - OTHER
24
4
2
4
3
0
3
1
2
5
HEFT - PICKPOCKET
2
0
0
0
1
1
0
0
0
0
HEFT - SHOPLIFT
108
8
6
13
6
12
20
17
16
10
TRAFFIC VIOLATIONS
119
1
4
14
19
27
23
6
23
2
TRESPASS
37
5
0
6
4
8
1
8
2
3
UNAUTHORIZED ENTRY INTO MOTOR VEHICLE
2
0
0
0
0
1
1
0
0
0
VANDALISM
48
2
1
0
19
8
4
8
2
4
ARRANT ARREST FOR OUR AGENCY
36
2
4
1
2
3
5
4
8
7
EAPON - CARRY CONCEALED
7
1
3
1
2
0
0
0
0
0
EAPON - EX FELON IN POSSESSION
2
0
0
0
0
2
0
0
0
0
EAPON - OTHER
1
0
0
0
0
1
0
0
0
0
EAPON - POSSESS ILLEGAL
12
0
1
1
2
4
3
0
0
1
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
2011 Total
1,438
156
95
185
207
211
171
134
158
121
2010 Total 1,162 142 127 127 120 138 135 115 122 136
2009 Total 1,586 136 199 169 170 168 192 173 176 203
1600
1400
1200
y 1000
N
w 800
Q 600
400
200
0
Page 2 of 2
Arrests / Year
14
2009 2010 2011
Year
10/18/2011 Woodburn Police Department
MONTHLY CRIMINAL OFFENSES
JANUARY THRU DECEMBER 2011
CHARGE DESCRIPTION
Total
Jan
Feb
Mar
Apr
May
u
Jul
ug
ep
AGGRAVATED ASSAULT
31
6
3
3
2
4
5
6
0
2
ANIMAL CRUELTY
2
0
0
0
0
1
0
1
0
0
ANIMAL ORDINANCES
18
1
2
0
1
3
6
1
2
2
ARSON
10
1
1
2
0
0
1
3
2
0
ASSAULT SIMPLE
90
7
8
12
7
12
12
10
17
5
ATTEMPTED MURDER
2
1
0
0
0
0
0
0
1
0
BURGLARY - BUSINESS
15
2
2
0
1
2
2
4
0
2
BURGLARY - OTHER STRUCTURE
10
0
1
0
1
2
2
1
0
3
BURGLARY - RESIDENCE
59
7
6
6
8
6
5
10
6
5
CHILD NEGLECT
8
1
1
1
0
0
1
2
1
1
CITY ORDINANCE
5
0
1
1
0
0
2
0
0
1
COMPUTER CRIME
2
0
0
0
1
0
0
1
0
0
CRIME DAMAGE -NO VANDALISM OR ARSON
73
8
11
5
6
9
10
10
7
7
CRIMINAL MISTREATMENT
6
0
0
2
0
2
0
0
0
2
CURFEW
2
0
0
2
0
0
0
0
0
0
CUSTODY -DETOX
7
1
0
1
1
0
1
2
1
0
CUSTODY - MENTAL
43
3
4
8
3
7
5
4
4
5
CUSTODY - PROTECITVE
1
0
0
0
0
0
0
0
1
0
DISORDERLY CONDUCT
31
1
4
6
7
5
1
2
1
4
DRINKING IN PUBLIC
1
0
0
0
1
0
0
0
0
0
DRIVING UNDER INFLUENCE
85
5
3
12
12
13
10
10
12
8
DRUG LAW VIOLATIONS
71
4
9
8
14
13
6
8
6
3
DWS /REVOKED - FELONY
1
1
0
0
0
0
0
0
0
0
DWS /REVOKED - MISDEMEANOR
25
2
2
2
2
3
3
4
2
5
ELUDE
3
0
0
0
1
1
1
0
0
0
EMBEZZLEMENT
2
1
0
0
0
0
0
0
0
1
ESCAPE FROM YOUR CUSTODY
1
0
0
0
0
1
0
0
0
0
FAIL TO DISPLAY OPERATORS LICENSE
19
4
2
2
2
5
3
0
0
1
FAILURE TO REGISTER AS SEX OFFENDER
2
0
1
0
0
0
0
0
1
0
FORGERY /COUNTERFEITING
28
4
2
0
6
3
4
3
3
3
FRAUD - ACCOUNT CLOSED CHECK
2
0
0
0
1
0
0
0
0
1
FRAUD - BY DECEPTION /FALSE PRETENSES
6
0
2
0
1
2
0
1
0
0
FRAUD - CREDIT CARD /AUTOMATIC TELLER MACHINE
15
4
0
2
2
3
0
1
1
2
FRAUD - IMPERSONATION
1
0
0
0
0
0
0
0
0
1
FRAUD - NO ACCOUNT - CHECK
1
0
0
0
0
0
0
0
0
1
FRAUD - OF SERVICES /FALSE PRETENSES
4
1
0
0
1
0
0
1
0
1
FRAUD - WIRE
2
0
0
0
0
0
0
1
1
0
FUGITIVE ARREST FOR ANOTHER AGENCY
164
17
17
15
28
27
20
9
16
15
FURNISHING
10
2
0
2
0
0
6
0
0
0
GARBAGE LITTERING
3
0
0
0
0
1
0
1
1
0
HIT AND RUN FELONY
6
0
0
0
0
1
1
2
1
1
HIT AND RUN - MISDEMEANOR
87
11
4
5
7
9
19
8
12
12
IDENTITY THEFT
33
2
1
7
8
4
2
2
5
2
INTIMIDATION /OTHER CRIMINAL THREAT
24
1
2
3
4
5
2
2
3
2
KIDNAP - FOR ADDITIONAL CRIMINAL PURPOSE
6
2
0
0
0
0
4
0
0
0
MINOR IN POSSESSION
25
4
3
3
4
5
3
2
1
0
MISCELLANEOUS
54
8
5
5
6
6
7
5
8
4
MOTOR VEHICLE THEFT
28
4
4
6
5
2
3
2
0
2
OTHER
62
6
8
6
5
11
7
9
4
6
PROPERTY - FOUND LOST MISLAID
18
1
2
1
2
6
3
2
0
1
PROPERTY RECOVER FOR OTHER AGENCY
2
0
1
0
0
1
0
0
0
0
RECKLESS DRIVING
9
0
0
1
1
1
1
1
3
1
RESTRAINING ORDER VIOLATION
3
1
0
0
0
1
1
0
0
0
ROBBERY - BUSINESS
2
0
0
0
1
0
0
1
0
0
ROBBERY - OTHER
6
1
4
1
0
0
0
0
0
0
ROBBERY - RESIDENCE
1
1
0
0
0
0
0
0
0
0
RUNAWAY
53
2
6
9
2
11
4
5
5
9
Page 1 of 2 15
10/18/2011 Woodburn Police Department
MONTHLY CRIMINAL OFFENSES
JANUARY THRU DECEMBER 2011
2010 Total 2,247 321 223 282 219 283 253 197 231 238
2009 Total 2,626 276 297 289 309 283 262 313 299 298
2800
2400
2000
0)
N 1800
z
w
LL 1200
O
800
400
Offenses / Year
Page 2 of 2 16
2009 2010 2011
YEAR
Total
Jan
Feb
Mar
Apr
May
u
Jul
ug
Sep
SEX CRIME - CONTRIBUTE TO SEX DELINQUENCY
1
0
0
0
0
0
0
0
1
0
SEX CRIME - FORCIBLE SODOMY
4
1
1
0
0
0
1
0
1
0
SEX CRIME - MOLEST (PHYSICAL)
21
4
1
1
0
2
7
2
2
2
SEX CRIME - NON FORCE SODOMY
1
0
0
0
0
0
0
0
1
0
SEX CRIME - NON -FORCE RAPE
4
0
0
1
1
0
1
0
1
0
SEX CRIME - OBSCENE PHONE CALL
3
0
1
1
0
1
0
0
0
0
SEX CRIME - OTHER
1
0
0
0
0
0
0
0
0
1
SEX CRIME - PORNOGRAPHY /OBSCENE MATERIAL
1
0
0
0
1
0
0
0
0
0
STALKER
1
0
0
0
0
0
0
0
1
0
STOLEN PROPERTY - RECEIVING,BUYING,POSSESSING
5
0
0
0
0
1
0
4
0
0
SUICIDE
2
0
0
0
0
0
0
1
0
1
HEFT - BICYCLE
14
0
1
1
1
1
2
1
4
3
HEFT - BUILDING
18
2
3
1
4
2
1
3
1
1
HEFT - COIN OP MACHINE
1
0
0
0
0
1
0
0
0
0
HEFT - FROM MOTOR VEHICLE
55
11
7
4
7
5
8
8
2
3
HEFT - MOTOR VEHICLE PARTS /ACCESSORIES
13
3
3
1
1
0
0
2
3
0
HEFT - OTHER
96
5
10
11
9
13
8
12
13
15
HEFT - PICKPOCKET
1
0
0
0
1
0
0
0
0
0
HEFT - PURSE SNATCH
2
0
0
1
0
0
0
1
0
0
HEFT - SHOPLIFT
110
5
7
10
12
14
18
15
18
11
TRAFFIC ORDINANCES
1
0
0
0
0
0
0
0
1
0
TRAFFIC VIOLATIONS
122
1
5
12
21
21
27
9
24
2
TRESPASS
45
3
2
8
6
8
3
7
5
3
VANDALISM
224
34
14
28
30
27
33
28
11
19
VEHICLE RECOVERD FOR OTHER AGENCY
5
1
0
0
0
1
2
0
0
1
ARRANT ARREST FOR OUR AGENCY
34
2
4
1
1
3
4
4
8
7
WEAPON - CARRY CONCEALED
6
1
2
1
2
0
0
0
0
0
WEAPON - EX FELON IN POSSESSION
2
0
0
0
0
2
0
0
0
0
WEAPON - OTHER
1
0
0
0
0
1
0
0
0
0
WEAPON - POSSESS ILLEGAL
13
1
1
2
2
4
2
0
0
1
ILLFUL MURDER
1
0
0
0
0
1
0
0
0
0
Total
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
2011 Total
2,088
202
184
223
253
296
280
234
225
191
2010 Total 2,247 321 223 282 219 283 253 197 231 238
2009 Total 2,626 276 297 289 309 283 262 313 299 298
2800
2400
2000
0)
N 1800
z
w
LL 1200
O
800
400
Offenses / Year
Page 2 of 2 16
2009 2010 2011
YEAR
I
oOBuR
October 24, 2011
TO: Honorable Mayor and City Council
FROM: Scott Derickson, City Administrator
SUBJECT: Ward Boundaries
RECOMMENDATION
Adopt the Ordinance.
BACKGROUND
Each city that elects city councilors on the basis of ward representation is
required to examine and, if necessary, modify ward boundaries within the same
year the results of the decennial census are released. The City has contracted
with the Mid - Willamette Valley Council of Governments (COG) to update
Woodburn's Ward Boundaries in accordance with State law and guidelines as
follows:
Each district, as nearly as possible, shall:
• Be contiguous,
• Utilize existing geographic or political boundaries
• Not divide communities of common interest
• Be connected by transportation links
• Be of equal population
• No district shall be drawn for the purpose of favoring any political party,
incumbent elected official, or other person
• No district shall be drawn for the purpose of diluting the voting strength of
any language or ethnic minority group
• To greatest extent, consider newly drawn legislative and congressional
boundaries
The agreement with the COG provided for development of reapportionment
alternatives, and the COG presented three alternatives to Council at its October
10, 2011 meeting for consideration.
Agenda Item Review: City Administrator _x_ City Attorney _x
Finance
17
Honorable Mayor and City Council
October 24, 2011
Page 2
DISCUSSION
At the October 10 meeting, Council considered the alternatives and selected
Alternative 2 - Most Balanced as its preferred alternative and directed staff to
prepare an ordinance relating to reapportionment of ward boundaries.
Attached, for your consideration and approval is an ordinance (and map) that
reapportions ward boundaries, pursuant to Alternative 2 and the 2010 census.
This Ordinance contains an emergency clause so that the City Council's final
action can immediately be conveyed to the Marion County Elections
Department.
FINANCIAL IMPACT
None.
18
COUNCIL BILL NO. 2878
ORDINANCE NO. 2483
AN ORDINANCE RELATING TO REAPPORTIONMENT OF WARD BOUNDARIES,
REPEALING ORDINANCE 2304, AND DECLARING AN EMERGENCY
WHEREAS, the City Charter apportions the City into six wards, and requires
alteration of the ward boundaries not less than once every ten years to maintain
an equal population distribution, and
WHEREAS, the City Council has undertaken and completed a public
process to reapportion ward boundaries following the 2010 census, and
WHEREAS, the City Council considered several alternatives, and selected
a preferred alternative for reapportionment of ward boundaries which is in
accordance with the equal population distribution and other criteria selected
by the City Council, and
WHEREAS, formal adoption of the ward boundaries, by City Ordinance, is
required, NOW, THEREFORE,
THE CITY OF WOODBURN ORDAINS AS FOLLOWS:
Section 1. That the City of Woodburn is hereby divided into six wards,
which shall be designated as Wards I, II, III, IV, V, and VI.
Section 2. That the boundaries of the six wards created by section 1
above shall be as indicated on a map known as "Ward Map of 2011 ", a copy of
which is attached hereto as Exhibit "A" and, by this reference, incorporated
herein.
Section 3. That two (2) copies of said ward map are on file in the office
of the City Recorder, and said map of boundaries indicated thereon are hereby
adopted until such time as they shall be amended or abolished by ordinance or
Charter.
Section 4. That Ordinance 2304 is repealed.
Section 5. That a copy of this ordinance and the attached Ward Map of
2011 be sent to the Elections Department of Marion County, Oregon.
Section 6. This Ordinance being necessary for the immediate
preservation of the public peace, health, and safety, because there has not
Page 1 - Council Bill No. 2878
Ordinance No. 2483
19
been an alteration of Ward Boundaries in the last ten years and one is legally
required, an emergency is declared to exist and this Ordinance shall take effect
immediately upon passage by the Council and approval by the Mayor.
Approved as to form:
City Attorney Date
Approved:
Kathryn Figley, Mayor
Passed by the Council
Submitted to the Mayor
Approved by the Mayor
Filed in the Office of the Recorder
ATTEST:
Christina Shearer, City Recorder
City of Woodburn, Oregon
Page 1 - Council Bill No. 2878
Ordinance No. 2483
20
City of Woodburn Council Wards, 2011
3
OATS
WHEAT;
Legend
— Roads
Q City Limits
Wards
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s
0 0.125 0.25
Exhibit A
ij
■Miles
QODBURN
October 24, 2011
TO: Honorable Mayor and City Council through City Administrator
FROM: Ignacio Palacios, Finance Director
SUBJECT: Water Loans /Bonds Refinance
RECOMMENDATION:
Approve the attached resolution authorizing the issuance of Water System
Revenue Refunding Bonds and a Master Water System Bond Declaration.
BACKGROUND:
During the May 17, 2011 City Council meeting, staff presented information
regarding the potential savings of consolidating and refinancing the current
Water Bonds and Loans. At that meeting the City Council authorized the
issuance of Water Bonds and 60 day notice of intent to do so as required by
state statute. It should be noted that no challenges were filed with the City
regarding the issuance of the refinance bonds. Since then staff has worked with
Bond Counsel and DA Davidson to prepare the required documents to allow for
the issuance of the bond refinance.
DISCUSSION:
As previously reported the City has a total Water Program long term debt
balance of $13,348,968 (a combination of two loans and a single General
Obligation debt issuance). At the May 17, 2011 City Council meeting staff
recommended refinancing two of the three obligations. Staff did not
recommend the refinancing of the GO debt due to call provisions that would
not realize any savings.
During the process of vetting out the required information for the bond
refinancing staff discovered that it would not be beneficial to refinance the Safe
Drinking Water Revolving Loan Fund (Loan #YO2007) due to call provisions within
the loan that would not provide any savings in the refinancing. This reduces the
requested bond refinance amount from $6.3 million to $3.2 million.
Agenda Item Review: City Administrator _x_ City Attorney-.x— Finance -x-
22
Mayor and City Council
October 24, 2011
Page 2
Staff still recommends the refinancing of the $3.2 million loan as the City still
realizes approximately $150,000 in savings - these savings can be reserved for
future projects or offset capital needs (savings are after all issuance costs).
Additionally, it would allow the City some flexibility in issuing any future water
program debt (if necessary) as the refinance lowers outstanding debt.
Due to current market conditions rates have dropped to 3.36% (per discussion
with DA Davidson rates continue to drop and the final rate will be lower than the
3.36% but cannot be finalized until we get closer to the date of the sale), which
provides for significant savings from the current rate.
The attached resolution authorizes the sale of the Water Bonds. The Water Bond
Declaration is basically the loan document for the bonds issued, defines security
for the bonds, bond and general covenants, uses of proceeds, redemption of
bonds, reserve requirements, etc. The Preliminary Official Statement discusses
the bonds being sold, loan being refinanced and financial and statistical
background of the City of Woodburn. Both the Water Bond Declaration and
Preliminary Official Statement are in draft form but are provided for City Council
information.
FINANCIAL IMPACT:
The City would achieve a net savings of approximately $150,000 - these savings
would be reserved in the Water Well /Distribution Construction fund for future
capital needs and /or improvements.
ATTACHMENTS:
Resolution 2003
Master Water System Revenue Bond Declaration (Draft)
Preliminary Official Statement for Water Bonds (Draft)
23
COUNCIL BILL NO. 2879
RESOLUTION NO. 2003
A RESOLUTION AUTHORIZING THE ISSUANCE OF WATER SYSTEM
REVENUE REFUNDING BONDS AND A MASTER WATER SYSTEM BOND
DECLARATION.
THE CITY COUNCIL OF THE CITY OF WOODBURN, MARION COUNTY,
OREGON (the "City "), finds:
FINDINGS
(A) The City is authorized by ORS 287A.360 to issue revenue bonds to
refund outstanding revenue bonds, and
(B) The City previously obtained a loan from the Oregon Economic and
Community Development Department (now, the Oregon Business
Development Department) that was secured by the net revenues of the City's
water system (the "Refundable Obligation "), and
(C) The City may be able to achieve debt service savings or a
favorable reorganization of its permanent water system debt structure by
refunding all or any portion of the Refundable Obligation, and
(D) The City adopts this Resolution to authorize the issuance of its
Water Revenue Refunding Bonds to achieve debt service savings or to obtain a
favorable reorganization of debt, and to provide the terms under which future
parity obligations may be issued.
THE CITY OF WOODBURN RESOLVES AS FOLLOWS:
SECTION 1. BONDS AUTHORIZED
The City hereby authorizes the sale and delivery of its Water Revenue
Refunding Bonds (the "Refunding Bonds ") in accordance with this Resolution
and the Master Water System Revenue Bond Declaration authorized by Section
3 of this Resolution (the "Master Declaration ") to refinance the Refundable
Obligation. The aggregate principal amount of the Refunding Bonds shall not
exceed the amount that the City Official (defined below) determines is
necessary to accomplish the refunding and pay costs of the refunding.
SECTION 2. SECURITY
The Refunding Bonds and any obligations issued on a parity with the
Refunding Bonds shall be special obligations of the City that are payable solely
Page 1 - Council Bill No. 2879
Resolution No. 2003
24
from the revenues of the City's water system and related amounts that are
pledged as provided in the Master Declaration.
SECTION 3. DESIGNATION OF CITY OFFICIALS
The Board designates the City Administrator or the City Finance Director,
or the designee of the City Administrator or the City Finance Director
(collectively, the "City Official "), to act on behalf of the City and without further
action by the City Council as follows:
a. Provide that the Refunding Bonds may be issued in one or more
series;
b. Participate in the preparation of, authorize the distribution of and
deem final preliminary and final official statements or other
disclosure documents for each series of the Refunding Bonds;
C. Appoint and enter into agreements with a paying agent, registrar
and other service providers for each series of the Refunding Bonds;
d. Apply for and purchase bond insurance, reserve sureties or other
forms of credit enhancements for each series of the Refunding
Bonds, and enter into related agreements;
e. Apply for and obtain municipal bond ratings for each series of
Refunding Bonds;
f. Establish the final principal amount, maturity schedule, interest rates,
sale price, redemption provisions, administrative provisions and
other terms for each series of the Refunding Bonds, subject to the
limitations of this Resolution;
g. Negotiate the terms of, and execute, a bond purchase agreement
with D.A. Davidson & Company for each series of the Refunding
Bonds;
h. Enter into an agreement to provide continuing disclosure for each
series of the Refunding Bonds, as required under federal securities
laws;
Enter into covenants to maintain the excludability of interest on
each series of the Refunding Bonds from gross income under the
Internal Revenue Code of 1986, as amended (the "Code "), and, if
applicable, designate each series of the Refunding Bonds as
"qualified tax - exempt obligations" under Section 265(b) of the
Code;
Page 2 - Council Bill No. 2879
Resolution No. 2003
25
Execute and deliver a master declaration which pledges the
revenues of the City's water system, contains covenants regarding
the levels of water system fees and charges that the City may
impose, describes the terms of each series of the Refunding Bonds,
and the terms under which future obligations may be issued on
parity with the Refunding Bonds; and
k. Amend any outstanding loans or obligations secured by revenues
of the City's water system in order to subordinate those liens to the
Refunding Bonds, and
I. Determine how to apply the proceeds of the Refunding Bonds; and
M. Call, defease, and redeem the Refundable Obligation, appoint
escrow agents and verification agents, and take any other actions
and enter into related agreements to defease, call and redeem the
Refundable Obligation, and
n. Issue, sell and deliver each series of the Refunding Bonds, execute
and deliver any related certificates or documents, and take any
other actions which the City Official determines are reasonably
required to carry out this Resolution.
Approved as to form:
City Attorney Date
Approved:
Kathryn Figley, Mayor
Passed by the Council
Submitted to the Mayor
Approved by the Mayor
Filed in the Office of the Recorder
ATTEST:
Christina Shearer, City Recorder
Page 3 - Council Bill No. 2879
Resolution No. 2003
26
MASTER WATER SYSTEM REVENUE
BOND DECLARATION
City of Woodburn, Oregon
Water System Revenue Refunding Bonds
Series 2011
Executed by the City Official of the City of Woodburn, Oregon
As of this day of October, 2011
27
TABLE OF CONTENTS
Section1.
Findings .......................................................................................... ..............................1
Section2.
Definitions ..................................................................................... ...............................
l
Section 3.
Rules of Construction .................................................................... ..............................7
Section 4.
Deposit, Pledge and Use of Gross Revenues ................................. ..............................8
Section 5.
Bond Funds and Accounts ............................................................. ..............................8
Section6.
Rate Covenant ............................................................................... .............................12
Section7.
Parity Bonds .................................................................................. .............................13
Section 8.
Subordinate Obligations ................................................................ .............................15
Section 9.
Separate Utility System ................................................................. .............................15
Section10.
General Covenants ........................................................................ .............................15
Section 11.
Events of Default and Remedies ................................................... .............................17
Section 12.
Amendment of Master Declaration ............................................... .............................21
Section13.
Defeasance .................................................................................... .............................23
Section14.
BEO System .................................................................................. .............................24
Section 15.
Redemption of Bonds .................................................................... .............................25
Section 16.
Authentication, Registration and Transfer .................................... .............................27
Section 17.
The Series 2011 Bonds ................................................................. .............................28
Appendix A:
Form of Water System Revenue Refunding Bond, Series 2011
28
M A S T E R W A T E R S Y S T E M B O N D D E C L A R A T I O N
THIS MASTER WATER SYSTEM BOND DECLARATION is executed as of
August , 2011, by the City Official of the City of Woodburn, Oregon pursuant to the authority
granted to the City Official by City Resolution No. and Resolution No. to establish
the terms under which the City's Water System Revenue Refunding Bonds, Series 2011 and
future Parity Bonds may be issued.
Section 1. Findings.
The City finds:
I. The City is authorized by ORS 287A.360 to issue revenue bonds to refund outstanding
revenue bonds. The City has adopted Resolution No. and Resolution No. which
authorizes the City to execute this Master Water System Revenue Bond Declaration.
2. The City is issuing its Series 2011 Bonds to refund its Oregon Economic and Community
Development Department Loan No. S02010 dated May 31, 2002, to fund the First Reserve
Subaccount, and to pay costs of issuance of the financing.
3. The City executes this Master Water System Revenue Bond Declaration to specify the
terms under which the City's Water System Revenue Refunding Bonds, Series 2011 are issued,
and to describe the terms under which future obligations may be issued that are secured by a
senior lien on Net Revenues of the Water System.
Section 2. Definitions.
Unless the context clearly requires otherwise, capitalized terms that are used in this Master
Declaration and are defined in this Section 2 shall have the meanings defined for those terms in
this Section 2.
"Adjusted Net Revenues" means the Net Revenues, adjusted for purposes of Section 7. I.C(ii) as
provided in Section 7.3.
"Annual Bond Debt Service" means in any Fiscal Year the sum of: (1) the amounts of any
transfers to the Bond Reserve Account that are described in Section 5.4.13 and any similar
requirement that is subsequently established for Parity Bonds; plus (2) the amount of principal
and interest required to be paid in that Fiscal Year on all Outstanding Bonds, calculated as
follows:
(a) Interest which is to be paid from Bond Proceeds shall be subtracted;
(b) Bonds which are subject to scheduled, noncontingent redemption or
noncontingent tender shall be deemed to mature on the dates and in the amounts which are
subject to mandatory redemption or tender, and only the amount scheduled to be outstanding on
the final maturity date shall be treated as maturing on that date; and,
(c) Bonds which are subject to contingent redemption or tender shall be treated as
maturing on their stated maturity dates.
Page I — Master Water System Bond Declaration
29
(d) The amount of any Subsidy Payments shall be subtracted from the Bond interest
payments for which the Subsidy Payments are scheduled to be paid.
"Auditor" means a person authorized by the State Board of Accountancy to conduct municipal
audits pursuant to ORS 297.670.
"Base Period" means any twelve consecutive months selected by the City or Qualified Consultant
out of the most recent twenty -four months preceding the delivery of a Series of Parity Bonds.
"BEO" means "book- entry -only" and refers to a system for clearance and settlement of securities
transactions through electronic book -entry changes, which eliminates the need for physical
movement of securities.
"Bond" or "Bonds" means the Series 2011 Bonds and any Parity Bonds.
"Bond Account" means the Bond Account described in Section 5.2 of this Master Declaration.
"Bond Counsel" means a law firm having knowledge and expertise in the field of municipal law
and whose opinions are generally accepted by purchasers of municipal bonds.
"Bond Reserve Account" means the Bond Reserve Account in the Sinking Fund described in
Section 5.3 of this Master Declaration.
"Business Day" means any day except a Saturday, a Sunday, a legal holiday, a day on which the
offices of banks in Oregon or New York are authorized or required by law or executive order to
remain closed, or a day on which the New York Stock Exchange is closed.
"City" means the City of Woodburn, Marion County, Oregon, a municipal corporation of the
State of Oregon.
"City Council" means the City Council of the City, or its successors.
"City Official" means the City Manager or Finance Director or the person designated by either of
those officers to act as City Official under this Master Declaration.
"Closing" means the date on which a Series of Bonds is delivered in exchange for payment.
"Code" means the Internal Revenue Code of 1986, as amended, including the rules and
regulations promulgated thereunder.
"Construction Fund" means the Water System Construction Fund in the Water Fund, which the
City has created to hold proceeds of bonds and other revenues related to capital improvements.
"Credit Facility" means a letter of credit, a municipal bond insurance policy, a surety bond,
standby bond purchase agreement or other credit enhancement device which is obtained by the
City to secure Bonds, and which is issued or provided by a Credit Provider whose long -term debt
obligations or claims - paying ability (as appropriate) are rated, at the time the Credit Facility is
Page 2 — Master Water System Bond Declaration
2
issued, in one of the two highest rating categories by a Rating Agency which rated the Bonds
secured by the Credit Facility.
"Credit Provider" means a person or entity providing a Credit Facility.
"DTC" means The Depository Trust Company or any other qualified securities depository
designated by the City as its successor.
"Event of Default" means any event specified in 11.2 of this Master Declaration.
"First Reserve Subaccount Reserve Requirement" means the lesser of. (a) Maximum Annual
Bond Debt Service on all Outstanding Bonds that are secured by the First Reserve Subaccount, or
(b) the amount that was required to be in the First Reserve Subaccount immediately before a
Series of Bonds that is secured by the First Reserve Subaccount is issued, plus the Tax Maximum
for that Series of Bonds. Maximum Annual Bond Debt Service on all Outstanding Bonds that
are secured by the First Reserve Subaccount shall be recalculated as of each First Reserve
Subaccount Valuation Date. On the date of closing of the Series 2011 Bonds, the First Reserve
Subaccount Reserve Requirement is equal to $ , which is the Maximum Annual
Bond Debt Service on the Series 2011 Bonds as of the date of Closing of the Series 2011 Bonds.
"First Reserve Subaccount" means the subaccount of the Bond Reserve Account that secures the
Series 2011 Bonds and is described in Section 5.4.
"First Reserve Subaccount Valuation Date" means the first Business Day of each Fiscal Year,
each date on which amounts are withdrawn from the First Reserve Subaccount, and each Closing
date for a Series of Bonds that is secured by the First Reserve Subaccount.
"Fiscal Year" means the period beginning on July 1 of each year and ending on the next
succeeding June 30, or as otherwise defined by State law.
"Fitch" means Fitch Investors Service, Inc., its successors and assigns.
"Government Obligations" means (i) direct, noncallable obligations of the United States of
America (including obligations issued or held in book -entry form on the books of the Department
of the Treasury and principal -only and interest -only strips that are issued by the U.S. Treasury);
(ii) noncallable obligations the principal of and interest on which are unconditionally guaranteed
by the United States of America.
"Gross Revenues" means all fees and charges and other revenues that are properly accrued under
generally accepted accounting principles as revenues of the Water System, including revenues
from product sales, system development charges, and interest earnings on Gross Revenues in the
Water Fund. Gross Revenues shall also include transfers out of the Rate Stabilization Fund.
However, the term "Gross Revenues" shall not include:
(a) The interest income or other earnings derived from the investment of the Rebate
Fund or any escrow fund established for the defeasance or refunding of outstanding indebtedness
of the City;
(b) Any gifts, grants, donations or other moneys received by the City from any State
Page 3 — Master Water System Bond Declaration
31
or Federal Agency or other person if such moneys are restricted by law or the grantor to uses
inconsistent with the payment of Bonds;
(c) The proceeds of any borrowing;
(d) The proceeds of any liability or other insurance (excluding business interruption
insurance or other insurance of like nature insuring against the loss of revenues);
(e) The proceeds of any casualty insurance which the City intends to utilize for repair
or replacement of the Water System;
(f) The proceeds derived from the sales of assets pursuant to Section 10.9 of this
Master Declaration;
(g) Any ad valorem or other taxes imposed by the City (except charges or payments
for Water System services which become "taxes" within the meaning of Article XI, Section l lb
of the Oregon Constitution only because they are imposed on property or property owners);
(h) Any income, fees, charges, receipts, profits or other moneys derived by the City
from its ownership or operation of any Separate Utility System.
"Insurance Policy" means a municipal bond insurance policy issued by an Insurer at the request
of the City guaranteeing the scheduled payment of principal of and interest on the Bonds when
due.
"Insurer" means any person or entity providing an Insurance Policy
"Interest Payment Date" means any date on which Bond interest is scheduled to be paid, and any
date on which Bonds are called for redemption.
"Master Declaration" means this Master Water System Revenue Refunding Bond Declaration,
including any amendments made pursuant to Section 12.
"Maximum Annual Bond Debt Service" means the greatest amount of Annual Bond Debt
Service that is due in any Fiscal Year, beginning with the Fiscal Year for which the calculation is
made, and ending with the last Fiscal Year in which Outstanding Bonds are scheduled to be paid.
" Moody's" means Moody's Investors Service, a corporation organized and existing under the
laws of the State of Delaware, its successors and their assigns.
"Net Revenues" means the Gross Revenues less the Operating Expenses.
"Operating Expenses" means all costs which are properly treated as expenses of operating and
maintaining the Water System under generally accepted accounting principles. "Operating
Expenses" shall also include transfers to the Rate Stabilization Fund that are permitted under
Section 4.1.F. However, Operating Expenses do not include:
(a) Any rebates or penalties paid from Gross Revenues under Section 148 of the
Code;
(b) Payments of judgments against the City and payments for the settlement of
litigation;
(c) Depreciation and amortization of property values or losses, and all amounts
treated for accounting purposes as payments for capital expenditures;
Page 4 — Master Water System Bond Declaration
32
(d) Debt service payments, paying agent fees, broker - dealer fees and similar charges
for the maintenance of borrowings;
(e) The expenses of owning, operating or maintaining any Separate Utility System;
(f) Expenditures made from any liability insurance proceeds;
(g) Expenditures made from any casualty insurance proceeds used to pay for costs of
repairing or replacing portions of the Water System;
(h) Expenditures made from grant monies regardless of whether such grant funds are
dedicated to a specific purpose or available for the general operation, maintenance and repair or
replacement of the Water System; and
(i) Expenditures allocable to any other funding source which does not constitute
Gross Revenues of the Water System.
"ORS" means the Oregon Revised Statutes.
"Outstanding" refers to all Bonds except Bonds that have been defeased pursuant to Section 13
of this Master Declaration, and Bonds which have matured and not been presented for payment
(provided sufficient funds to pay those Bonds have been transferred to the Registrar).
"Owner' means a registered owner of a Bond.
"Parity Bond" means any bond issued in accordance with Section 7.
"Payment Date" means a Principal Payment Date or an Interest Payment Date.
"Permitted Investments" means any investments which the City is permitted to make under the
laws of the State.
"Principal Payment Date" means any date on which any Bonds are scheduled to be retired,
whether by virtue of their maturity or by mandatory sinking fund redemption prior to maturity,
and the redemption date of any Bonds which have been called for redemption.
"Project" means any purpose for which Gross Revenues may be spent.
"Qualified Consultant" means an independent engineer, an independent auditor, an independent
financial advisor, or similar independent professional consultant of recognized standing and
having experience and expertise in the area for which such person or firm is retained by the City
for purposes of performing activities specified in this Master Declaration or any Supplemental
Declaration.
"Rate Stabilization Fund" means the Rate Stabilization Fund described in Section 5.6 of this
Master Declaration.
"Rating Agency" means Fitch, Moody's, S &P, or any other nationally recognized financial rating
Agency which has rated Outstanding Bonds or a Credit Facility at the request of the City.
"Record Date" for the Bonds means the fifteenth day of the month preceding the month in which
each Interest Payment Date occurs, whether or not a Business Day.
Page 5 — Master Water System Bond Declaration
33
"Refundable Obligation" means the City's loan with the Oregon Business Development
Department Loan No. 502010 dated May 31, 2002.
"Registrar" means the registrar and paying agent for the Bonds, which is U.S. Bank National
Association on the date of this Master Declaration.
"Reserve Credit Event" means the occurrence of any of the following: (a) the withdrawal or
suspension of all Reserve Credit Facility Ratings for a Reserve Credit Facility; or (b) the
downgrading of all Reserve Credit Facility Ratings for a Reserve Credit Facility below
investment grade, or the equivalent rating reasonably determined by the City if rating
terminology changes after October, 2011 (As of October, 2011, a rating below investment grade
by Moody's is a rating below Baa3, and a rating below investment grade by S &P is a rating
below BBB -); or (c) the City properly tenders a request for funds under a Reserve Credit Facility,
and the requested funds are not delivered materially in accordance with the terms of such
Reserve Credit Facility.
"Reserve Credit Facility" means one or more Credit Facilities issued for the purpose of funding,
in lieu of cash, all or any portion of the Reserve Requirement for a subaccount in the Reserve
Account, under which the Credit Provider agrees to unconditionally provide the City with funds
in lieu of withdrawing amounts from that subaccount.
"Reserve Credit Facility Rating" means a long -term debt, financial strength or claims - paying
ability rating assigned by a Rating Agency to: (a) a provider of a Reserve Credit Facility or (b) to
any reinsurer of the obligations of a provider under a Reserve Credit Facility.
"Reserve Requirement" means a set of rules for funding a subaccount in the Bond Reserve
Account. Each Reserve Requirement shall indicate the amount that is required to be credited to
the subaccount, the dates by which that amount must be credited to the subaccount, and the
requirements for restoring amounts to the subaccount if amounts are withdrawn to pay Bonds
that are secured by the subaccount. The Reserve Requirement for the First Reserve Subaccount
is specified in Section 5.4.
"S &P" means Standard & Poor's Corporation, a corporation organized and existing under the
laws of the State of New York, its successors and their assigns.
"Separate Utility System" means any utility property which is declared by the City Council to
constitute a system which is distinct from the Water System in accordance with Section 9.
"Series" refers to all Bonds authorized by a single ordinance or declaration and delivered in
exchange for payment on the same date, regardless of variations in maturity, interest rate or other
provisions, unless the closing documents for the Series provide otherwise.
"Series 2011 Bonds" means the City's Water System Revenue Refunding Bonds, Series 2011
that are issued pursuant to Section 17 of this Master Declaration.
"Sinking Fund" means the fund in the Water Fund which the City has created to provide for the
repayment of bonded debt and the interest on bonded debt.
Page 6 — Master Water System Bond Declaration
2
"State" means the State of Oregon.
"Subordinate Obligations" means obligations having a lien on the Net Revenues which is
subordinate to the lien of the Bonds. Restrictions on Subordinate Obligations are described in
Section 8.
"Subordinate Obligations Account" means the Subordinate Obligations Account of the Water
Fund which is described in Section 5.5.
"Subsidy Payments" means an interest subsidy payment that the City is scheduled to receive from
the United States Treasury for Bonds such as "Build America Bonds."
"Supplemental Declaration" means any declaration, resolution or other document which
supplements or amends this Master Declaration, entered into by the City in compliance with
Section 12.
"Tax Maximum" means, for any Series of Bonds, the lesser of: the greatest amount of principal,
interest and premium, if any, required to be paid in any Fiscal Year on such Series; 125% of
average amount of principal, interest and premium, if any, required to be paid on such Series
during all Fiscal Years in which such Series will be Outstanding, calculated as of the date of
issuance of such Series; or, ten percent of the proceeds of such Series, as "proceeds" is defined
for purposes of Section 148(d) of the Code.
"Valuation Date" means the date or dates on which a subaccount of the Bond Reserve Account
shall be valued as prescribed in the Supplemental Declaration authorizing the establishment of
such subaccount.
"Water Fund" means the collection of funds and accounts used by the City to hold the Gross
Revenues and the proceeds of Bonds.
"Water System" means all utility property now or hereafter used by the City to supply water within
or without the corporate limits of the City. However, the Water System does not include any
Separate Utility System.
Section 3. Rules of Construction.
In determining the meaning of the provisions of this Master Declaration, the following rules shall
apply unless the context clearly requires application of a different meaning:
A. References to section numbers shall be construed as references to sections of this Master
Declaration.
B. References to one gender shall include both genders.
C. References to the singular include the plural, and references to the plural include the
singular.
Page 7 — Master Water System Bond Declaration
35
Section 4. Deposit, Pledge and Use of Gross R even ues.
4.1. All Gross Revenues shall be deposited to and maintained in the Water Fund, and shall be
used only as described in this Section as long as any Bonds remain Outstanding. The City
shall apply Gross Revenues in the Water Fund on or before the following dates for the
following purposes in the following order of priority:
A. At any time to pay Operating Expenses which are then due;
B. One Business Day prior to each Payment Date, to transfer Net Revenues and Subsidy
Payments to the Bond Account in an amount sufficient (with amounts available in the
Bond Account) to pay in full all Bond principal, interest and premium, if any, which is
due to be paid on that Payment Date;
C. On the Closing date for a Series of Bonds and on the first day of each month following a
Valuation Date, to transfer Net Revenues to all subaccounts of the Bond Reserve Account
then having a balance that is less than their Reserve Requirements, until the balances in
all subaccounts of the Bond Reserve Account are equal to their Reserve Requirements;
D. On the day on which any rebates or penalties for Bonds are due to be paid to the United
States pursuant to Section 148 of the Code, to pay the amounts due to the United States;
E. On the dates specified in any proceedings authorizing Subordinate Obligations, the City
shall transfer to the Subordinate Obligations Account the Net Revenues required by those
proceedings; and,
F. On any date, the City may transfer Net Revenues to the Rate Stabilization Fund or spend
Net Revenues for any other lawful purpose, but only if all deposits and payments having a
higher priority under this Section have been made.
4.2. The City hereby pledges the Net Revenues and the Subsidy Payments to the payment of
principal of, premium (if any) and interest on all Bonds. In addition, the City hereby
pledges the Net Revenues available for transfer to any subaccount of the Bond Reserve
Account to pay amounts due under any Reserve Credit Facility securing any subaccount
of the Bond Reserve Account. Pursuant to ORS 287A.310 these pledges of the Net
Revenues hereby made by the City shall be valid and binding from the time of the
adoption of this Master Declaration. The Net Revenues so pledged and hereafter received
by the City shall immediately be subject to the lien of such pledge without any physical
delivery or further act. The lien of these pledges shall be superior to all other claims and
liens except liens and claims for the payment of Operating Expenses. The City covenants
and agrees to take such action as is necessary from time to time to perfect or otherwise
preserve the priority of the pledge.
Section 5. Bond Funds and Accounts
5.1. So long as Bonds are Outstanding, the City shall maintain the Bond Account, the Bond
Reserve Account, the Subordinate Obligations Account and the Rate Stabilization Fund
Page 8 — Master Water System Bond Declaration
Q
as discrete accounts in the Water Fund. Unless the City restructures the funds and
accounts in the Water Fund, the Bond Account, the Bond Reserve Account, the
Subordinate Obligations Account and the Rate Stabilization Fund shall be maintained in
the Sinking Fund.
5.2. Bond Account. The Bond Account shall be held by the City. Until all Bonds are paid or
defeased, amounts in the Bond Account shall be used only to pay Bonds. The City shall
transfer sufficient amounts from the Bond Account to the Registrar in time to permit the
Registrar to pay all Bond principal, interest and premium (if any) when due in accordance
with the Bonds. Amounts in the Bond Account shall be invested only in Permitted
Investments. Earnings on the Bond Account shall be credited to the Bond Account.
5.3. Bond Reserve Account.
A. The Bond Reserve Account shall be held by the City and the City may create subaccounts
in the Bond Reserve Account to secure Bonds. When each subaccount is created, the
City shall determine whether the subaccount will secure one or more Series of Bonds. If
the City creates a subaccount in the Bond Reserve Account, the City shall, before it issues
the first Series of Bonds that is secured by that subaccount, establish the Reserve
Requirement for that subaccount and pledge amounts credited to that subaccount to pay
the Bonds that are secured by that subaccount.
B. The City shall not create any subaccounts in the Bond Reserve Account for any purpose
except securing Bonds in accordance with this Master Declaration.
5.4. The First Reserve Subaccount and the First Reserve Subaccount Reserve
Requirement.
A. The First Reserve Subaccount is hereby created in the Bond Reserve Account. The First
Reserve Subaccount shall secure only the Series 2011 Bonds and any subsequent Series
of Bonds which the City elects to secure with the First Reserve Subaccount. Except as
specifically provided in this Section 5.4, amounts credited to the First Reserve
Subaccount shall be used only to pay principal, interest and premium, if any, on Bonds
that are secured by the First Reserve Subaccount, and only if amounts in the Bond
Account are not sufficient to make those payments. The City hereby irrevocably pledges
the amounts that are credited to the First Reserve Subaccount to pay the Series 2011
Bonds. Pursuant to ORS 287A.310, this pledge shall be valid and binding from the
Closing date of the Series 2011 Bonds. The amounts so pledged and hereafter received by
the City shall immediately be subject to the lien of this pledge without any physical
delivery or further act, and the lien of this pledge shall be superior to all other claims and
liens whatsoever to the fullest extent permitted by ORS 287A.310.
B. At Closing of each Series of Bonds that are secured by the First Reserve Subaccount, the
City shall deposit into the First Reserve Subaccount an amount sufficient to make the
balance in the First Reserve Subaccount equal to the First Reserve Subaccount Reserve
Requirement, calculated as if the Series of Bonds being closed is Outstanding. The
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deposit may be made from Gross Revenues pursuant to Section 4.1.C, from Bond
proceeds, or other amounts available to the City, or may be in the form of one or more
Reserve Credit Facilities.
C. The City covenants to maintain a balance in the First Reserve Subaccount which is equal
to the First Reserve Subaccount Reserve Requirement, but solely from deposits of Net
Revenues pursuant to Section 4.1.0 and Closing deposits pursuant to Section 5.4.13. The
balance in the First Reserve Subaccount shall be equal to the sum of the following
amounts, calculated as of the most recent First Reserve Subaccount Valuation Date: the
cash credited to the First Reserve Subaccount; plus the value of Permitted Investments in
the First Reserve Subaccount; plus the value of all Reserve Credit Facilities that are
credited to the First Reserve Subaccount.
D. If the balance in the First Reserve Subaccount on a First Reserve Subaccount Valuation
Date is less than the First Reserve Subaccount Reserve Requirement, the City shall begin
making transfers of Gross Revenues to the First Reserve Subaccount in accordance with
Section 4.1.C.
(i) Transfers to the First Reserve Subaccount shall be applied first, to reimburse
the providers of any Reserve Credit Facilities credited to the First Reserve
Subaccountpro rata for amounts advanced under those Reserve Credit
Facilities; second, to replenish the balance in the First Reserve Subaccount
with cash or Permitted Investments; and third to pay any other amounts owed
under a Reserve Credit Facility that is credited to the First Reserve Subaccount
(including any interest, fees and penalties associated with any draw under that
Reserve Credit Facility).
(ii) Transfers under Section 4.1.0 shall commence immediately following each
First Reserve Subaccount Valuation Date on which the balance in the First
Reserve Subaccount is less than the First Reserve Subaccount Reserve
Requirement, and shall continue until the balance in the First Reserve
Subaccount is equal to the First Reserve Subaccount Reserve Requirement.
(iii) Transfers required under Section 4.1.0 as a result of a Reserve Credit Event
shall: 1) be made quarterly; 2) be at least equal to 1/8 of the deficiency
discovered on the First Reserve Subaccount Valuation Date on which the
balance in the First Reserve Subaccount is less than the First Reserve
Subaccount Reserve Requirement; 3) begin three months after the First
Reserve Subaccount Valuation Date on which the balance in the First Reserve
Subaccount is less than the First Reserve Subaccount Reserve Requirement;
and 4) shall continue until the balance in the First Reserve Subaccount is equal
to the First Reserve Subaccount Reserve Requirement.
E. If the balance in the First Reserve Subaccount on a First Reserve Subaccount Valuation
Date is greater than the First Reserve Subaccount Reserve Requirement the City may
transfer the excess to the Bond Account or the Subordinate Obligations Account.
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0
F. Moneys in the First Reserve Subaccount may be invested only in Permitted Investments
that mature no later than the final maturity date of the Bonds that are secured by the First
Reserve Subaccount. Earnings on the First Reserve Subaccount shall be credited to that
subaccount whenever the balance in that subaccount is less than the First Reserve
Subaccount Reserve Requirement. Otherwise, earnings shall be credited to the Bond
Account.
G. Permitted Investments in the First Reserve Subaccount shall be valued on each First
Reserve Subaccount Valuation Date in the following manner:
(i) Demand deposits, deposits in the Oregon Short Term Fund and other
investments which mature in two years or less after the First Reserve
Subaccount Valuation Date shall be valued at their face amount, plus accrued
interest;
(ii) Investments which mature more than two years after the First Reserve
Subaccount Valuation Date and for which bid and asked prices are published
on a regular basis in the Wall Street Journal (or, if not there, then in the New
York Times) shall be valued at the average of their most recently published bid
and asked prices;
(iii) Investments which mature more than two years after the First Reserve
Subaccount Valuation Date and for which the bid and asked prices are not
published on a regular basis in the Wall Street Journal or the New York Times
shall be valued at the average bid price quoted by any two nationally
recognized government securities dealers (selected by the City in its absolute
discretion) at the time making a market in such investments or the bid price
published by a nationally recognized pricing service;
(iv) Reserve Credit Facilities shall be valued at an amount which is available to be
drawn or paid under them;
(v) Certificates of deposit and bankers acceptances which mature more than two
years after the First Reserve Subaccount Valuation Date shall be valued at their
face amount, plus accrued interest; and
(vi) Any investment which is not specified above and which matures more than two
years after the First Reserve Subaccount Valuation Date shall be valued at its
fair market value as reasonably estimated by the City.
H. Each Reserve Credit Facility credited to the First Reserve Subaccount shall be valued on
each First Reserve Subaccount Valuation Date as provided in this subsection. A Reserve
Credit Facility shall be valued at the amount available to be drawn under it as long as no
Reserve Credit Event has occurred and is continuing for that Reserve Credit Facility. If a
Reserve Credit Event has occurred and is continuing for a Reserve Credit Facility, the
Reserve Credit Facility shall have no value.
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L Withdrawals from the First Reserve Subaccount shall be made in the following order of
priority:
(i) First, from any cash on deposit in the First Reserve Subaccount;
(i) Second, from the liquidation proceeds of any Permitted Investments on deposit
in such First Reserve Subaccount; and
(iii) Third, from moneys drawn or paid pro -rata under any Series 2011 Reserve
Credit Facilities.
All amounts on deposit in the First Reserve Subaccount may be applied to the final
payment (whether at maturity or by prior redemption) of Bonds that are secured by the
First Reserve Subaccount. Amounts so applied shall be credited against the amounts the
City is required to transfer into the Bond Account under Section 4.1.B.
K. Amounts in the First Reserve Subaccount may be transferred into escrow to defease
Series 2011 Bonds, but only if the balance remaining in the First Reserve Subaccount
after the transfer is at least equal to the First Reserve Subaccount Reserve Requirement
for the Series 2011 Bonds which remain Outstanding after the defeasance.
5.5. Subordinate Obligations Account. If the City issues Subordinate Obligations, the City
shall create and maintain the Subordinate Obligations Account as long as the Subordinate
Obligations are outstanding. The Subordinate Obligations Account may be divided into
subaccounts, and the City may establish priorities for funding the subaccounts in the
Subordinate Obligations Subaccount. Net Revenues shall be deposited into the
Subordinate Obligations Account only as permitted by Section 4.1.E. Earnings on the
Subordinate Obligations Account shall be credited as provided in the proceedings
authorizing the Subordinate Obligations.
5.6. Rate Stabilization Fund. The City shall establish and maintain the Rate Stabilization
Fund as long as Bonds are Outstanding. Net Revenues may be transferred to the Rate
Stabilization Fund at the option of the City as permitted by Section 4.1.F. Money in the
Rate Stabilization Fund may be withdrawn at any time and used for any purpose for
which the Gross Revenues may be used. Deposits to the Rate Stabilization Fund increase
Operating Expenses for the Fiscal Year in which the deposit is made. Withdrawals from
the Rate Stabilization Fund increase Gross Revenues for the Fiscal Year in which the
withdrawal is made. The City may adjust deposits to and withdrawals from the Rate
Stabilization Fund for a Fiscal Year at any time prior to the date on which the audit for
that Fiscal Year is finalized. Earnings on the Rate Stabilization Fund shall be credited to
the Water Fund.
Section 6. R ate C ovenant
6.1. The City covenants for the benefit of the Owners that it will establish and maintain rates
and charges in connection with the operation of the Water System which are sufficient to
permit the City to pay all Operating Expenses and all lawful charges against the Net
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Revenues, and to make all transfers required by this Master Declaration to the Bond
Account, the Bond Reserve Account and the Subordinate Obligations Account, and to
pay any franchise fees or similar charges imposed by the City on the Water System or its
operations.
6.2. The City covenants for the benefit of the Owners of all Bonds that it shall charge rates
and fees in connection with the operation of the Water System which, when combined
with other Gross Revenues, but without regard to system development charges, are
adequate to generate Net Revenues each Fiscal Year at least equal to one hundred ten
percent (110.00 %) of Annual Bond Debt Service due in that Fiscal Year.
6.3. The City covenants for the benefit of the Owners of all Bonds that it shall charge rates
and fees in connection with the operation of the Water System which, when combined
with other Gross Revenues, are adequate to generate Net Revenues each Fiscal Year at
least equal to one hundred twenty -five percent (125.00 %) of Annual Bond Debt Service
due in that Fiscal Year.
6.4. The City shall determine whether it complied with Sections 6.2 and 6.3 for each Fiscal
Year not later than sixty (60) days after the beginning of the subsequent Fiscal Year,
based on the financial information available to the City at that time, and compliance with
Sections 6.2 and 6.3 shall be determined based on that financial information. A failure to
comply with Sections 6.2 and 6.3 shall not constitute an Event of Default if, within 120
days after the beginning of the subsequent Fiscal Year, the City implements the
recommendations of a Qualified Consultant that is engaged by the City to deliver written
recommendations for a schedule of rates and charges or other actions which the Qualified
Consultant reasonably projects will permit the City to comply with Sections 6.2 and 6.3
for the remainder of the Fiscal Year in which the recommendations are delivered to the
City (with calculations for the partial year made on an annualized basis).
Section 7. Parity Bonds
7.1. The City may issue Parity Bonds to provide funds for any purpose relating to the Water
System, but only if
A. No Event of Default under this Master Declaration or any Supplemental Declaration has
occurred and is continuing;
B. At the time of the issuance of the Parity Bonds there is no deficiency in the Bond
Account, and the balance in the Bond Reserve Account is at least equal to the Reserve
Requirement;
C. There shall have been filed with the City either:
(i) A certificate of the City Official stating that the Net Revenues (adjusted as
provided in Section 7.2) for the Base Period were not less than one hundred
twenty -five percent (125.00 %) of average Annual Bond Debt Service on all
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41
then Outstanding Bonds, calculated as of the date the Parity Bonds are issued
and with the proposed Parity Bonds treated as Outstanding; or
(ii) A certificate or opinion of a Qualified Consultant:
(a) Stating the amount of the Adjusted Net Revenues for each of the five
Fiscal Years after the last Fiscal Year for which interest on the Parity
Bonds is, or is expected to be, capitalized, or, if interest will not be
capitalized, for each of the five Fiscal Years after the proposed Parity
Bonds are issued;
(b) Concluding that the respective amounts of Adjusted Net Revenues in each
of the first four Fiscal Years described in Section 7.1.C(ii)(a) are at least
equal to one hundred twenty -five percent (125.00 %) of the Annual Bond
Debt Service for each of those respective Fiscal Years on all Outstanding
Bonds, with the proposed Parity Bonds treated as Outstanding;
(c) Concluding that the amount of Adjusted Net Revenues in the fifth Fiscal
Year described in Section 7.1.C(ii)(a) is at least equal to one hundred
twenty -five percent (125.00 %) of the average Annual Bond Debt Service,
calculated for the period beginning with that fifth Fiscal Year on all then
Outstanding Bonds, with the proposed Parity Bonds treated as
Outstanding.
7.2. Net Revenues may be adjusted for purposes of Section 7.1.C(i) by adding any Net
Revenues the City Official calculates the City would have had during the Base Period
because of increases in Water System rates, fees and charges which have been adopted by
the City on or before the date the Parity Bonds are issued.
7.3. Adjusted Net Revenues for purposes of Section 7.1.C(ii) shall be computed by adjusting
the Net Revenues for the Base Period in any of the following ways:
A. If the proposed Parity Bonds are being issued for the purpose of acquiring operating
Water System utility properties having an earnings record, the Qualified Consultant may
estimate the effect on the Net Revenues for the Base Period if the Water System utility
properties had been part of the Water System during the Base Period. The estimate shall
be based on the operating experience and records of the City and any available financial
records relating to the Water System utility properties which will be acquired;
B. To reflect any changes in rates and charges which the Qualified Consultant determines are
reasonable;
C. To reflect any customers added to the Water System after the beginning of the Base
Period and prior to the date of the Qualified Consultant's certificate; and
D. If extensions of or additions to the Water System are in the process of construction on the
date of the Qualified Consultant's certificate, or if the proceeds of the Bonds being issued
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42
are to be used to acquire or construct extensions of or additions to the Water System, to
reflect any additional Net Revenues not included in the preceding paragraphs that will be
derived from such additions and extensions (after deducting the estimated increase in
operating and maintenance expenses resulting from such additions and extensions).
7.4. The City may issue Parity Bonds to refund Outstanding Bonds without complying with
Section 7.1 if the refunded Bonds are defeased on the date of delivery of the refunding
Parity Bonds and if the Annual Bond Debt Service on the refunding Parity Bonds does
not exceed the Annual Bond Debt Service on the refunded Bonds in any Fiscal Year in
which the refunding Bonds are Outstanding by more than $5,000.
7.5. All Parity Bonds issued in accordance with this Section 7 shall have a lien on the Net
Revenues which is equal to the lien of all other Outstanding Bonds.
Section 8. Subordinate Obligations
The City may issue Subordinate Obligations only if
8.1. The Subordinate Obligations are payable solely from amounts permitted to be deposited
in the Subordinate Obligations Account pursuant to Section 4.1.E;
8.2. The Subordinate Obligations state clearly that they are secured by a lien on or pledge of
the Net Revenues which is subordinate to the lien on, and pledge of, the Net Revenues for
the Bonds.
Section 9. Separate Utility System
The City may declare property which the City owns and is part of the Water System (but has a
value of less than five percent of the Water System at the time of the declaration), and property
which the City has not yet acquired but would otherwise become part of the Water System, to be
part of a Separate Utility System. The City may pay costs of acquiring, operating and
maintaining Separate Utility Systems from Net Revenues, but only if there is no deficit in the
Bond Account or the Bond Reserve Account. The City may issue obligations which are secured
by the revenues produced by the Separate Utility System, and may pledge the Separate Utility
System revenues to pay those obligations. In addition, the City may issue Subordinate
Obligations to pay for costs of a Separate Utility System, and may pledge the revenues of the
Separate Utility System to pay the Subordinate Obligations.
Section 10. General Covenants
The City hereby covenants and agrees with the Owners of all Outstanding Bonds as follows:
10.1. The City shall promptly cause the principal, premium, if any, and interest on the Bonds to
be paid as they become due in accordance with the provisions of this Master Declaration
and any Supplemental Declaration.
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43
10.2. The City shall maintain complete books and records relating to the operation of the Water
System and all City funds and accounts in accordance with generally accepted accounting
principles, shall cause such books and records to be audited annually at the end of each
Fiscal Year, and shall have an audit report prepared by the Auditor and made available for
the inspection of Owners.
10.3. The City shall not issue obligations which have a lien on the Net Revenues that is
superior to the lien of the Bonds except for obligations to pay Operating Expenses.
10.4. The City shall promptly deposit the Gross Revenues and other amounts described in this
Master Declaration into the funds and accounts specified in this Master Declaration.
10.5. The City shall work in good faith to cause the Water System to be operated at all times in
a safe, sound, efficient and economic manner in compliance with all health, safety and
environmental laws, regulatory body rules, regulatory body orders and court orders
applicable to the City's operation and ownership of the Water System.
10.6. The City shall maintain the Water System in good repair, working order and condition.
10.7. The City shall not enter into any agreement to provide Water System products or services
at a discount from published rate schedules, and that it will not provide free Water
System products or services except in the case of emergencies.
10.8. The City shall at all times maintain with responsible insurers all such insurance on the
Water System as is customarily maintained with respect to works and properties of like
character against accident to, loss of or damage to such works or properties.
A. The net proceeds of insurance against material accident to or material destruction of the
Water System shall be used to repair or rebuild the damaged or destroyed Water System,
and to the extent not so applied, will be applied to the payment or redemption of the
Bonds.
B. The insurance described in Section 10.8 shall be in the form of policies or contracts for
insurance with insurers of good standing and shall be payable to the City, or in the form
of self - insurance by the City. The City shall establish such fund or funds or reserves
which it deems are necessary to provide for its share of any such self - insurance.
10.9. The City shall not, nor shall it permit others to, sell, mortgage, lease or otherwise dispose
of or encumber all or any portion of the Water System except:
A. The City may dispose of all or substantially all of the Water System, only if the City pays
all Bonds or defeases them pursuant to Section 13.
B. Except as provided in Section 10.9.C, the City will not dispose of any part of the Water
System in excess of 5% of the value of the Water System in service unless prior to such
disposition either:
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(i) There has been filed with the City a certificate of a Qualified Consultant stating
that such disposition will not impair the ability of the City to comply with the
rate covenants contained in Section 6.1 of this Master Declaration; or
(ii) Provision is made for the payment, redemption or other defeasance of a
principal amount of Bonds equal to the greater of the following amounts:
(a) An amount which will be in the same proportion to the net principal
amount of Bonds then Outstanding (defined as the total principal amount
of Bonds then Outstanding less the amount of cash and investments in the
Sinking Fund) that the Gross Revenues attributable to the part of the
Water System sold or disposed of for the 12 preceding months bears to
the total Gross Revenues for such period; or
(b) An amount which will be in the same proportion to the net principal
amount of Bonds then Outstanding that the book value of the part of the
Water System sold or disposed of bears to the book value of the Water
System immediately prior to such sale or disposition.
C. The City may dispose of any portion of the Water System that has become unserviceable,
inadequate, obsolete, or unfit to be used or no longer necessary for use in the operation of
the Water System.
D. If the ownership of all or part of the Water System is transferred from the City through
the operation of law, the City shall to the extent authorized by law, reconstruct or replace
such transferred portion using any proceeds of the transfer unless the City Council
reasonably determines that such reconstruction or replacement is not in the best interest of
the City and the Owners, in which case any proceeds shall be used for the payment,
redemption or defeasance of the Bonds.
Section 11. Events of Default and Remedies.
11.1. Continuous Operation Essential. The City Council of the City hereby finds and
determines that the continuous operation of the Water System and the collection, deposit
and disbursement of the Net Revenues in the manner provided in this Master Declaration
and in any Supplemental Declaration are essential to the payment and security of the
Bonds, and the failure or refusal of the City to perform the covenants and obligations
contained in this Master Declaration or any such Supplemental Declaration will endanger
the necessary continuous operation of the Water System and the application of the Net
Revenues to the operation of the Water System and the payment of the Bonds.
11.2. Events of Default. The following shall constitute "Events of Default ":
A. If the City shall fail to pay any Bond principal or interest when due, either at maturity,
upon exercise of a right of tender, by proceedings for redemption or otherwise;
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45
B. Except as provided in Section 6.4 and 11.2.F, if the City shall default in the observance
and performance of any other of its covenants, conditions and agreements in this Master
Declaration, if such default continues for thirty (30) days after the City receives a written
notice, specifying the Event of Default and demanding the cure of such default, from a
Credit Provider or from the Owners of not less than 20% in aggregate principal amount of
the Bonds Outstanding;
C. If the City shall sell, transfer, assign or convey any properties constituting the Water
System in violation of Section 10.9;
D. If an order, judgment or decree shall be entered by any court of competent jurisdiction:
(i) Appointing a receiver, trustee or liquidator for the City or the whole or any part
of the Water System;
(ii) Approving a petition filed against the City seeking the bankruptcy,
arrangement or reorganization of the City under any applicable law of the
United States or the State; or
(iii) Assuming custody or control of the City or of the whole or any part of the
Water System under the provisions of any other law for the relief or aid of
debtors and such order, judgment or decree shall not be vacated or set aside or
stayed (or, in case custody or control is assumed by said order, such custody or
control shall not be otherwise terminated) within sixty (60) days from the date
of the entry of such order, judgment or decree; or
E. If the City shall:
(i) Admit in writing its inability to pay its debts generally as they become due;
(ii) File a petition in bankruptcy or seeking a composition of indebtedness under
any state or federal bankruptcy or insolvency law;
(iii) Consent to the appointment of a receiver of the whole or any part of the Water
System; or
(iv) Consent to the assumption by any court of competent jurisdiction under the
provisions of any other law for the relief or aid of debtors of custody or control
of the City or of the whole or any part of the Water System.
F. Exception. It shall not constitute an Event of Default under 11.2.B if the default cannot
practicably be remedied within thirty (30) days after the City receives notice of the
default, so long as the City promptly commences reasonable action to remedy the default
after the notice is received, and continues reasonable action to remedy the default until
the default is remedied.
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G. Remedies. If an Event of Default occurs, any Owner may exercise any remedy available
at law or in equity. However, the Bonds shall not be subject to acceleration or mandatory
redemption upon an Event of Default.
H. Books of City Open to Inspection.
(i) The City covenants that if an Event of Default shall have happened and shall
not have been remedied, the books of record and account of the City and all
other records relating to the Water System shall at all reasonable times be
subject to the inspection and use of any persons holding at least twenty percent
(20 %) of the principal amount of Outstanding Bonds and their respective
agents and attorneys.
(i) The City covenants that if the Event of Default shall happen and shall not have
been remedied, the City will continue to account, as a trustee of an express
trust, for all Net Revenues and other moneys, securities and funds pledged
under this Master Declaration.
L Appointment of Trustee. Whenever any Event of Default exists, Owners representing
51 percent or more of the Outstanding Bonds may appoint a commercial bank with a
reported capital and surplus in excess of $50 million as trustee (the "Trustee ") to
represent the interests of said Owners.
Trustee Duties Upon Default.
(i) Upon the occurrence of an Event of Default the Trustee may pursue any other
available remedy at law or in equity to enforce the payment of the principal of,
premium, if any, and interest on the outstanding Bonds, and to enforce any
rights of the Trustee under or with respect to the Master Declaration.
(ii) In addition, upon the occurrence of an Event of Default, and upon the filing of
a suit or other commencement of judicial proceedings to enforce the rights of
the Trustee and of the Owners under the Master Declaration, the Trustee will
be entitled, as a matter of right, to the appointment of a receiver or receivers of
the Net Revenues and other amounts pledged under the Master Declaration,
pending such proceedings, with such powers as the court making such
appointment may confer.
(iii) If an Event of Default has occurred and be continuing and if requested so to do
by the Owners of at least 25% in aggregate principal amount of Outstanding
Bonds and indemnified as provided in the Master Declaration, the Trustee will
be obligated to exercise such one or more of the rights and powers conferred by
this Master Declaration, as the Trustee, being advised by counsel, deems most
expedient in the interest of the Owners.
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47
(iv) If a Trustee has been appointed pursuant to 11.2.1, no Owner of any Bond shall
have the right to institute any suit, action or proceeding at law or in equity, for
any remedy under the Master Declaration, unless:
(a) such Owner has previously given to the Trustee written notice of the
occurrence of an Event of Default;
(b) the Owners of a majority in aggregate principal amount of all the Bonds
then Outstanding have requested the Trustee in writing to exercise its
powers under the Master Declaration;
(c) said Owners have tendered to the Trustee indemnity reasonably
acceptable to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request; and
(d) the Trustee has refused or failed to comply with such request for a period
of 60 days after such written request has been received by the Trustee and
said tender of indemnity is made to the Trustee.
(v) Pursuant to the Master Declaration, if the Trustee takes any judicial or other
action in an Event of Default the Trustee has full power in its direction with
respect to any continuance, discontinuance, withdrawal, compromise,
settlement or other disposition of such action, unless opposed by the written
request of the Owners of a majority in aggregate principal amount of the
Outstanding Bonds. The Trustee is appointed attorney -in -fact of the Owners
for the purpose of bringing any suit action or proceedings in an Event of
Default.
K. Waivers of Event of Default.
(i) No delay or omission of any Owner or of the Trustee to exercise any right or
power arising upon the happening of an Event of Default shall impair any right
or power or shall be construed to be a waiver of any such Event of Default or
to be an acquiescence therein; and every power and remedy given by this
Section 11 to the Owners and to the Trustee may be exercised from time to
time and as often as may be deemed expedient by the Owners and /or the
Trustee as applicable.
(ii) The owners of not less than fifty percent (50 %) in principal amount of the
affected Bonds that are at the time Outstanding, or their attorneys -in -fact duly
authorized, or the Trustee may, on behalf of the Owners of all of affected
Bonds, waive any past default under this Master Declaration with respect to
such Bonds and its consequences, except a default in the payment of the
principal of, premium, if any, or interest on any of the Bonds. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
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L. Remedies Granted in Master Declaration Not Exclusive.
No remedy by the terms of this Master Declaration conferred upon or reserved to the Owners is
intended to be exclusive of any other remedy, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this Master Declaration or
existing at law or in equity or by statute on or after the date of adoption of this Master
Declaration.
Section 12. Amendment of Master Declaration
12.1. This Master Declaration maybe amended by Supplemental Declaration without the
consent of any Owners for any one or more of the following purposes:
A. To cure any ambiguity or formal defect or omission in this Master Declaration;
B. To add to the covenants and agreements of the City in this Master Declaration, other
covenants and agreements to be observed by the City which are not contrary to or
inconsistent with this Master Declaration as theretofore in effect;
C. To authorize issuance of Bonds or Subordinate Obligations;
D. To modify, amend or supplement this Master Declaration or any Supplemental
Declaration to qualify this Master Declaration under the Trust Indenture Act of 1939, as
amended, or any similar federal statute hereafter in effect or to permit the qualification of
any Bonds for sale under the securities laws of any of the states of the United States of
America;
E. To confirm, as further assurance, any security interest or pledge created under this Master
Declaration or any Supplemental Declaration;
F. To make any change which, in the reasonable judgment of the City, does not materially
and adversely affect the rights of the owners of any Outstanding Bonds;
G. So long as a Credit Facility (other than a Reserve Credit Facility) is in full force and
effect with respect to the Bonds affected by such Supplemental Declaration, to make any
other change which is consented to in writing by the issuer of such Credit Facility other
than any change which:
(i) Would result in a downgrading or withdrawal of the rating then assigned to the
affected Bonds by the Rating Agencies;
(ii) Changes the maturity (except as permitted herein), the Interest Payment Dates,
interest rates, redemption and purchase provisions, and provisions regarding
notices of redemption and purchase applicable to the affected Bonds or
diminishes the security afforded by such Credit Facility;
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(iii) Materially and adversely affects the rights and security afforded to the Owners
of any Outstanding Bonds not secured by such Credit Facility; or
H. To modify any of the provisions of this Master Declaration or any Supplemental
Declaration in any other respect whatever, as long as the modification shall take effect
only after all affected Outstanding Bonds cease to be Outstanding.
12.2. This Master Declaration may be amended for any other purpose only upon consent of
Owners of not less than fifty -one percent (51 %) in aggregate principal amount of the
Bonds outstanding; provided, however, that no amendment shall be valid without the
consent of Owners of 100 percent (100 %) of the aggregate principal amount of the Bonds
outstanding which:
A. Extends the maturity of any Bond, reduces the rate of interest upon any Bond, extends the
time of payment of interest on any Bond, reduces the amount of principal payable on any
Bond, or reduces any premium payable on any Bond, without the consent of the affected
Owner; or
B. Reduces the percent of Owners required to approve Supplemental Declarations.
12.3. For purposes of Section 12.2, and subject to Section 12.4, the initial purchaser of a series
of Bonds may be treated as the Owner of that Series at the time that series of Bonds is
delivered in exchange for payment.
12.4. Except as otherwise expressly provided in a Supplemental Declaration, as long as a
Credit Facility (other than a Reserve Credit Facility) securing all or a portion of any
Outstanding Bonds is in effect, the issuer of such Credit Facility shall be deemed to be the
Owner of the Bonds secured by such Credit Facility:
A. At all times for the purpose of the execution and delivery of a Supplemental Declaration
or of any amendment, change or modification of this Master Declaration or the initiation
by Owners of any action which under this Master Declaration requires the written
approval or consent of or can be initiated by the Owners of at least a majority in principal
amount of the affected Bonds at the time Outstanding; and following an Event of Default
for all other purposes;
B. Notwithstanding the foregoing, the issuer of such Credit Facility shall not be deemed to
be an Owner secured thereby with respect to any such Supplemental Declaration or of any
amendment, change or modification of this Master Declaration which:
(i) Would result in a downgrading or withdrawal of the rating then assigned to the
affected Bonds by the Rating Agencies; or
(ii) Changes the maturity (except as expressly permitted herein), the Interest
Payment Dates, interest rates, redemption and purchase provisions, and
provisions regarding notices of redemption and purchase applicable to the
affected Bonds or diminishes the security afforded by such Credit Facility; or
Page 22 — Master Water System Bond Declaration
1
(iii) Reduces the percentage or otherwise affects the classes of affected Bonds, the
consent of the Owners of which is required to effect any such modification or
amendment.
C. In addition and notwithstanding the foregoing, no issuer of a Credit Facility given as
security for any Bonds shall be entitled to exercise any rights under this Section during
any period where:
(i) The Credit Agreement or Credit Facility to which such Credit Provider is a
parry shall not be in full force and effect;
(ii) Such Credit Provider shall have filed a petition or otherwise sought relief under
any federal or state bankruptcy or similar law;
(iii) Such Credit Provider shall, for any reason, have failed or refused to honor a
proper demand for payment under such Credit Facility; or
(iv) An order or decree shall have been entered, with the consent or acquiescence of
such Credit Provider, appointing a receiver or receivers or the assets of the
Credit Provider, or if such order or decree having been entered without the
consent or acquiescence of such Credit Provider, shall not have been vacated or
discharged or stayed within ninety (90) days after the entry thereof.
D. For purposes of determining the percentage of Owners consenting to, waiving or
otherwise acting with respect to any matter that may arise under this Master Declaration,
the Owners of Bonds which pay interest only at maturity, and mature more than one year
after they are issued shall be treated as Owners of Bonds in an aggregate principal amount
equal to the accreted value of such Bonds as of the date the Registrar sends out notice of
requesting consent, waiver or other action as provided herein.
Section 13. Defeasance
13.1. The City shall be obligated to pay Bonds which are defeased pursuant to this Section
solely from the money and Government Obligations deposited with the escrow agent or
trustee, and the City shall have no further obligation to pay the defeased Bonds from any
source except the amounts deposited in the escrow. Bonds shall be deemed defeased if
the City:
A. irrevocably deposits money or noncallable Government Obligations in escrow with an
independent trustee or escrow agent which are calculated to be sufficient for the payment
of Bonds without reinvestment which are to be defeased; and
B. files with the escrow agent or trustee a report from an independent, certified public
accountant verifying the accuracy of calculations indicating that the money and the
principal and interest to be received from the Government Obligations are sufficient,
without further reinvestment, to pay the defeased Bonds when due; and
Page 23 — Master Water System Bond Declaration
51
C. files with the escrow agent or trustee an opinion of nationally recognized bond counsel
that the proposed defeasance will not cause the interest component of the Bonds to be
includable in gross income under the Code.
Section 14. BE O System
14.1. Unless otherwise provided by a Supplemental Declaration, all Bonds shall be subject to
the BEO System pursuant to the provisions of this Section 14.
14.2. The Bonds shall be initially issued as a BEO security issue with no Bonds being made
available to the Owners upon the execution and delivery of the letter of representations
among the Registrar, DTC and the City. Ownership of the Bonds shall be recorded
through entries on the books of banks and broker - dealer participants and correspondents
that are related to entries on the DTC BEO system. The Bonds shall be initially issued in
the form of separate single fully registered typewritten Bonds for each maturity of the
Bonds (the "Global Bonds ") in substantially the form attached hereto as Appendix A with
such changes as the City Official may approve. Each Global Bond shall be registered in
the name of CEDE & CO. as nominee (the "Nominee ") of DTC (DTC and any other
qualified securities depository designated by the City as a successor to DTC, collectively
the "Depository ") as the "Registered Owner ", and such Global Bonds shall be lodged
with the Depository until early redemption or maturity of the Bond issue. The Registrar
shall remit payment for the maturing principal and interest on the Bonds to the Owner for
distribution by the Nominee for the benefit of the owners (the `Beneficial Owner" or
"Record Owner") by recorded entry on the books of the Depository participants and
correspondents. While the Bonds are in BEO form, the Bonds will be available in
denominations of $5,000 or any integral multiple thereof.
14.3. In the event the Depository determines not to continue to act as securities depository for
the Bonds, or the City determines that the Depository shall no longer so act, then the City
will discontinue the BEO system with the Depository. If the City fails to designate
another qualified securities depository to replace the Depository or elects to discontinue
use of a BEO system, the Bonds shall no longer be a BEO issue and the Registrar and the
City shall amend this document to provide for an alternative system of providing notice
of redemption and such other matters as need to be updated for the Bonds that is of
general acceptance in the municipal bond markets.
14.4. While the Bonds are in BEO form, the City and the Registrar shall have no responsibility
or obligation to any participant or correspondent of the Depository or to any Registered
Owner on behalf of which such participants or correspondents act as agent for the Owner
with respect to:
A. The accuracy of the records of the Depository, the Nominee or any participant or
correspondent with respect to any ownership interest in the Bonds;
Page 24 — Master Water System Bond Declaration
52
B. The delivery to any participant or correspondent or any other person, other than an Owner
as shown in the registration books maintained by the Registrar, of any notice with respect
to the Bonds, including any notice of prepayment;
C. The selection by the Depository of the beneficial interest in Bonds to be redeemed prior
to maturity; or
D. The payment to any participant, correspondent, or any other person other than the owner
of the Bonds as shown in the registration books maintained by the Registrar, of any
amount with respect to principal of or interest on the Bonds.
14.5. Notwithstanding the BEO system, the City may treat and consider the Owner in whose
name each Bond is registered in the registration books maintained by the Registrar as the
Owner and absolute owner of such Bond for the purpose of payment of principal and
interest with respect to such Bond, or for the purpose of giving notices of redemption and
other matters with respect to such Bond, or for the purpose of registering transfers with
respect to such Bond, or for all other purposes whatsoever. The City shall pay or cause to
be paid all principal and interest on the Bonds only to or upon the order of the Registered
Owner, as shown in the registration books maintained by the Registrar, or their respective
attorneys duly authorized in writing, and all such payments shall be valid and effective to
fully satisfy and discharge the City's obligation with respect to payment thereof to the
extent of the sum or sums so paid.
14.6. Upon delivery by the Depository to the City and to the Owner of written notice to the
effect that the Depository has determined to substitute a new nominee in place of the
Nominee, then the word "Nominee" in this Master Declaration shall refer to such new
nominee of the Depository, and upon receipt of such notice, the City shall promptly
deliver a copy thereof to the Registrar. The Depository shall tender the Bonds it holds to
the Registrar for re- registration.
Section 15. Redemption of Bonds
15.1. Unless otherwise provided by a Supplemental Declaration, all Bonds shall be subject to
the redemption terms of this Section 15.
15.2. The City reserves the right to purchase Bonds in the open market.
15.3. If Bonds are subject to mandatory redemption the Registrar shall, without further action
by the City, select the particular Bonds to be redeemed in accordance with the mandatory
redemption schedule, by lot within each maturity, call the selected Bonds, and give notice
of their redemption in accordance with this Section 15.
15.4. If certain maturities of Bonds are subject to both optional and mandatory redemption, the
City may elect to apply any of those Bonds which it has previously optionally redeemed.
In addition, if the City purchases Bonds which are subject to mandatory redemption, the
City may elect to apply against the mandatory redemption requirement any such Bonds
which it has previously purchased. If the City makes such an election, it shall notify the
Page 25 — Master Water System Bond Declaration
53
Registrar not less than sixty days prior to the mandatory redemption date to which the
election applies.
15.5. So long as the BEO- System remains in effect with respect to the Bonds, the Registrar
shall notify the Depository of any early redemption in the time period required by the
Depository but in no event shall the City be required to give more than 30 days notice of
early redemption. The City shall provide such information in connection with an early
redemption as required by the letter of representations submitted to DTC in connection
with the issuance of the Bonds.
15.6. During any period in which the BEO System is not in effect with respect to the Bonds,
unless waived by any Owner of the Bonds to be redeemed, official notice of any
redemption of Bonds shall be given by the Registrar on behalf of the City in the manner
determined under Section 14.3. All such official notices of redemption shall be dated and
shall state:
A. The redemption date;
B. The redemption price;
C. If less than all Outstanding Bonds are to be redeemed, the identification (and, in the case
of partial redemption, the respective principal amounts) of the Bonds to be redeemed;
D. That on the redemption date the redemption price will become due and payable upon each
such Bond or portion thereof called for redemption, and that interest thereon shall cease
to accrue from and after said date; and
E. The place where such Bonds are to be surrendered for payment of the redemption price,
which place of payment shall be the principal office of the Registrar.
15.7. Any notice of optional redemption may state that the optional redemption is conditioned
upon receipt by the Registrar of moneys sufficient to pay the redemption price of the
Bonds to be redeemed or upon the satisfaction of any other condition, and /or that such
notice may be rescinded upon the occurrence of any other event, and any notice so given
may be rescinded at any time before payment of such redemption price if any such
condition so specified is not satisfied or if any such other event occurs. Notice of such
rescission or of the failure of any such condition shall be given by the Registrar to
affected owners of Bonds as promptly as practicable.
15.8. Unless Section 15.7 applies, the City shall deposit with the Registrar, on or before the
redemption date, an amount of money sufficient to pay the redemption price of all the
Bonds or portions of Bonds which are to be redeemed on that date.
15.9. Unless Section 15.7 applies, Bonds which have been called for redemption shall cease to
bear interest on the redemption date.
Page 26 — Master Water System Bond Declaration
2
Section 16. Authentication, Registration and Transfer
16.1. The provisions of this Section 16 apply only if the Bonds cease to be a BEO issue, and
unless otherwise specified in a Supplemental Declaration.
16.2. No Bond shall be entitled to any right or benefit under this Master Declaration unless it
shall have been authenticated by an authorized officer of the Registrar. The Registrar
shall authenticate all Bonds to be delivered at Closing, and shall additionally authenticate
all Bonds properly surrendered for exchange or transfer pursuant to this Master
Declaration.
16.3. All Bonds shall be in registered form. U.S. Bank National Association is hereby
appointed to serve as Registrar for the Bonds. A successor Registrar may be appointed
for the Bonds by ordinance or resolution of the City. The Registrar shall provide notice
to Owners of any change in the Registrar not later than the Bond payment date following
the change in Registrar.
16.4. The ownership of all Bonds shall be entered in the Bond register maintained by the
Registrar and the City and Registrar may treat the person listed as owner in the Bond
register as the owner of the Bond for all purposes.
16.5. The Registrar shall mail each interest payment on the Interest Payment Date (or the next
Business Day if the Interest Payment Date is not a Business Day) to the name and address
of the Owner, as that name and address appear on the Bond register as of the Record
Date. If payment is so mailed, neither the City nor the Registrar shall have any further
liability to any party for such payment.
16.6. Bonds may be exchanged for an equal principal amount of Bonds of the same maturity
which are in different authorized denominations, and Bonds may be transferred to other
owners if the Owner submits the following to the Registrar:
A. Written instructions for exchange or transfer satisfactory to the Registrar, signed by the
Owner or his attorney in fact and guaranteed or witnessed in a manner satisfactory to the
Registrar; and
B. The Bonds to be exchanged or transferred.
16.7. The Registrar shall not be required to exchange or transfer any Bonds submitted to it
during any period beginning with a Record Date and ending on the next following
payment date; however, such Bonds shall be exchanged or transferred promptly following
the payment date.
16.8. The Registrar shall not be required to exchange or transfer any Bonds which have been
designated for redemption if such Bonds are submitted to it during the fifteen -day period
preceding the designated redemption date.
16.9. For purposes of this Section, Bonds shall be considered submitted to the Registrar on the
date the Registrar actually receives the materials described in Section 16.6.
Page 27 — Master Water System Bond Declaration
55
16.10. The City may alter these provisions regarding registration and transfer by mailing
notification of the altered provisions to all Owners. The altered provisions shall take
effect on the date stated in the notice, which shall not be earlier than 45 days after notice
is mailed.
Section 17. T he Ser ies 2011 Bonds.
17.1. Pursuant to the authority of the City Resolution No. and City Resolution No.
and this Master Declaration, the City has issued its Water System Revenue
Refunding Bonds, Series 2011, in the aggregate principal amount of $ . The
Series 2011 Bonds shall be Bonds as defined in this Master Declaration. The Series 2011
Bonds shall bear interest payable on December 1 and June 1 of each year at the following
rates, commencing December 1, 2011, and shall mature in the following years in the
following principal amounts:
Maturity Date Principal Interest CUSIP Number
( 1) Amount ($) Rate ( %) (Base )
17.2. The Series 2011 Bonds shall be special obligations of the City, and shall be payable
solely from the Net Revenues and amounts required to be deposited in the Bond Account
and Bond Reserve Account as required and as provided by this Master Declaration.
17.3. The Series 2011 Bonds shall be in substantially the form attached as Appendix A and
shall be signed with the facsimile or manual signature of a City Official.
17.4. The Series 2011 bonds are not subject to optional redemption prior to maturity.
17.5. Tax - Exempt Status:
A. The City covenants for the benefit of the Owners of the Series 2011 Bonds to comply
with all provisions of the Code which are required for interest on the Series 2011 Bonds
Page 28 — Master Water System Bond Declaration
M
to be excluded from gross income for federal taxation purposes. In determining what
actions are required to comply, the City may rely on an opinion of Bond Counsel. The
City makes the following specific covenants with respect to the Code:
(i) The City will not take any action or omit any action if it would cause the Series
2011 Bonds to become "arbitrage bonds" under Section 148 of the Code;
(ii) The City shall operate the facilities financed with the Series 2011 Bonds so that
the Series 2011 Bonds do not become private activity bonds within the
meaning of Section 141 of the Code;
(iii) The City shall pay, when due, all rebates and penalties with respect to the
Series 2011 Bonds which are required by Section 148(f) of the Code.
B. The covenants contained in Section 17.5.A and any covenants in the closing documents
for the Series 2011 Bonds shall constitute contracts with the owners of the Series 2011
Bonds, and shall be enforceable by them.
C. The Series 2011 Bond proceeds shall be applied as follows:
(i) An amount of proceeds of the Series 2011 Bonds required to make the balance
in the First Reserve Subaccount equal to the First Reserve Subaccount Reserve
Requirement shall be deposited in the First Reserve Subaccount.
(ii) An amount of proceeds of the Series 2011 Bonds required to redeem or defease
the Refundable Obligations that are being refunded with the Series 2011 Bonds
shall be used to redeem such Refundable Obligation or deposited with the
escrow agent for the Refundable Obligation.
(iii) The balance of the Series 2011 Bond proceeds shall be placed in the
Construction Fund, and shall be disbursed only to finance costs incurred in
connection with the issuance of the Series 2011 Bonds.
D. Earnings from investment of the funds in the construction Fund shall be maintained in the
Construction Fund, and shall be treated and disbursed as Series 2011 Bond proceeds.
Construction Fund balances attributable to Series 2011 Bond proceeds which are not
needed for the refunding may be transferred to the Bond Account.
EXECUTED ON BEHALF OF THE CITY OF WOODBURN BY ITS AS
OF THE DAY OF 2011.
CITY OF WOODBURN, OREGON
IM
authorized "City Official"
Page 29 — Master Water System Bond Declaration
57
Appendix A
No. R- (<BondNUmben>
Form of Series 2011 Bond
$« PrincipalAmtNumbem
United States of America
State of Oregon
Marion County
City of Woodburn
Water System Revenue Refunding Bond, Series 2011
Dated Date: December , 2011
Interest Rate Per Annum: « CouponRate >>%
Maturity Date: 1, oMaturityYeam
CUSIP Number: «CUSIPNumbr>>
Registered Owner: - - -- -Cede & Co. - - - --
Principal Amount: ----- «PrincipalAmtSpelled>> Dollars - - - --
THE CITY OF WOODBURN, State of Oregon (the "City"), for value received, acknowledges
itself indebted and hereby promises to pay to the Registered Owner hereof, or registered assigns, but solely from the
sources indicated below, the Principal Amount on the Maturity Date together with interest thereon from the date
hereof at the Interest Rate Per Annum indicated above. Interest is payable semiannually on the first days of
December and June in each year until maturity or prior redemption, commencing December 1, 2011. Principal and
interest payments shall be received by Cede & Co., as nominee of The Depository Trust Company, or its registered
assigns, as of the close of business on the fifteenth day of the calendar month immediately preceding the applicable
interest payment date. Such payments shall be made payable to the order of "Cede & Co." as nominee of
The Depository Trust Company, New York, New York
This Series 2011 Bond is not a general obligation or liability of the City, and is payable solely
from the Net Revenues of the Water System as provided in the Master Water System Bond Declaration dated
October , 2011 (the "Master Declaration"). The City covenants and agrees with the owner of this Series 2011
Bond that it will keep and perform all of the covenants in this Series 2011 Bond and in the Master Declaration. The
City has pledged the Net Revenues of the Water System to the payment of principal and interest on this Series 2011
Bond.
The Series 2011 Bonds are initially issued as a book - entry -only security issue with no certificates
provided to the Series 2011 Bondowners. Records of Series 2011 Bond ownership will be maintained by the City's
paying agent and registrar, which is currently U.S. Bank National Association (the "Registrar"), and The Depository
Trust Company and its participants.
Should the book - entry -only security system be discontinued, the City shall cause the Registrar to
authenticate and deliver replacement the Series 2011 Bonds shall be issued in the form of registered Series 2011
Bonds without coupons in the denominations of $5,000 or any integral multiple thereof. Such Series 2011 Bonds
may be exchanged for Series 2011 Bonds of the same aggregate principal amount, but different authorized
denominations, as provided in the Master Declaration.
Any exchange or transfer of this Series 2011 Bond must be registered, as provided in the Master
Declaration, upon the Series 2011 Bond register kept for that purpose by the Registrar. Upon registration, a new
registered Series 2011 Bond or Series 2011 Bonds, of the same series and maturity and in the same aggregate
principal amount, shall be issued to the transferee as provided in the Master Declaration. The Registrar and the City
may treat the person in whose name this Series 2011 Bond is registered as its absolute owner for all purposes, as
provided in the Master Declaration.
The Series 2011 Bondowner may exchange or transfer this Series 2011 Bond only by surrendering
it, together with a written instrument of exchange or transfer which is satisfactory to the Registrar and duly executed
by the registered owner or their duly authorized attorney, at the principal corporate trust office of the Registrar in the
manner and subject to the conditions set forth in the Master Declaration.
`iil
Unless this certificate is presented by an authorized representative of The Depository Trust
Company to the issuer or its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
This Series 2011 Bond is one of a series of $ aggregate principal amount of
Water System Revenue Refunding Bonds, Series 2011, of the City, and is issued by the City for the purpose of
refunding loans previously issued by the City to improve its Water System in full and strict accordance and
compliance with all of the provisions of the Constitution and Statutes of the State of Oregon and the charter of the
City.
The Bonds shall mature as described in the final Official Statement for the Bonds which is dated
September _, 2011. The Bonds are not subject to optional redemption prior to maturity.
The Series 2011 Bonds are issuable in the form of registered Series 2011 Bonds without coupons
in the denominations of $5,000 or any integral multiple thereof. Series 2011 Bonds may be exchanged for an equal
aggregate principal amount of registered Series 2011 Bonds of the same maturity and of any other authorized
denominations in the manner, and subject to the conditions set forth in the Master Declaration.
This Bond shall remain in the Registrar's custody subject to the provisions of the FAST Balance
Certificate Agreement currently in effect between the Registrar and The Depository Trust Company.
IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all conditions, acts, and things
required to exist, to happen, and to be performed precedent to and in the issuance of this Series 2011 Bond have
existed, have happened, and have been performed in due time, form, and manner as required by the Constitution and
Statutes of the State of Oregon; that the issue of which this Series 2011 Bond is a part, and all other obligations of
such City, are within every debt limitation and other limits prescribed by such Constitution and Statutes.
IN WITNESS WHEREOF, the City Council of the City of Woodburn, Oregon, has caused this
Series 2011 Bond to be signed by facsimile signature of its Mayor and attested by facsimile signature of its City
Official as of the date indicated above.
City of Woodburn, Oregon
Aef
`il
THIS SERIES 2011 BOND SHALL NOT BE VALID UNLESS PROPERLY
AUTHENTICATED BY THE REGISTRAR IN THE SPACE INDICATED BELOW.
This Series 2011 Bond is one of a series of $ aggregate principal amount of Water
System Revenue Refunding Bonds, Series 2011, of the City, issued pursuant to the Master Declaration described
herein.
Date of authentication: October , 2011.
as Registrar
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto:
(Please insert social security or other identifying number of assignee)
this Series 2011 Bond and does hereby irrevocably constitute and appoint
as attorney to transfer this Series 2011 Bond on the books kept for registration
thereof with the full power of substitution in the premises.
Dated:
NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears
upon the face of this Series 2011 Bond in every particular, without alteration or enlargement or any change whatever.
NOTICE: Signature(s) must be guaranteed by a member of the New York Stock Exchange or a commercial bank or
trust company
Signature Guaranteed
(Bank, Trust Company or Brokerage Firm)
Authorized Officer
The following abbreviations, when used in the inscription on the face of this Series 2011 Bond,
shall be construed as though they were written out in full according to applicable laws or regulations.
TEN COM -- tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as tenants in common
OREGON CUSTODIANS use the following:
CUST UL OREG MIN
as custodian for (name of minor)
OR UNIF TRANS MIN ACT
under the Oregon Uniform Transfer to Minors Act
Additional abbreviations may also be used though not in the list above.
61
PRELIMINARY OFFICIAL STATEMENT dated , 2011
NEW ISSUE
BOOK -ENTRY Moody's Rating: _ (See "Ratings" herein)
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In the opinion of K &L Gates LLP, Bond Counsel, assuming compliance with certain covenants of the City, interest on the
Bonds is excludable from gross income for federal income tax purposes under existing law and is not an item of tax
preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest
on the Bonds is included in adjusted current earnings for purposes of computing the federal alternative minimum tax
imposed on certain corporations. See "Tax Matters" herein for a discussion of the opinion of Bond Counsel. In the opinion
of Bond Counsel, interest on the Bonds is exempt from Oregon personal income tax under existing law.
$2,465,000*
CITY OF WOODBURN
MARION COUNTY, OREGON
WATER REVENUE REFUNDING BONDS, SERIES 2011
DATED: Date of Delivery
Due: December 1, as shown on inside cover
The City of Woodburn, Oregon (the "City ") provides this Official Statement in connection with the issuance of
its Water Revenue Refunding Bonds, Series 2011 (the "Bonds "). The Bonds mature on December 1 in each of
the years and amounts set forth on the inside cover and will bear interest from the Date of Delivery to the
dates of maturity at the rates per annum as shown on the inside cover.
The Bonds will have a first lien on the Net Revenues of the City's Water System (the "System ") upon payment
by the Bonds of certain outstanding borrowings. The Bonds will also be secured by amounts in the First
Reserve Subaccount, as described herein. Additional bonds (the "Parity Bonds ") may be issued on a parity lien
with the Bonds and any other Parity Bonds, subject to certain conditions described herein. The Bonds are
special obligations of the City payable solely from the Net Revenues of the System and amounts in the First
Reserve Subaccount. The Bonds are not obligations of Marion County, the State of Oregon, or any other
municipal corporation or political subdivision thereof other than the City.
The Bonds will be issued as fully registered bonds under a book -entry system, initially registered to Cede & Co.,
as nominee of The Depository Trust Company ( "DTC "), New York, New York, which will act as securities
depository for the Bonds. Individual purchases of Bonds will be made in the principal amount of $5,000, or
integral multiples thereof within a single maturity. The purchasers will not receive certificates representing
their interest in the Bonds, as long as the Bonds are in book -entry form. Interest on the Bonds will be payable
semiannually on June 1 and December 1 of each year, commencing December 1, 2011, to the maturity of the
Bonds through the principal corporate trust offices of the registrar and paying agent of the City, currently U.S.
Bank National Association (the "Registrar "). For so long as the Bonds are held by DTC in book -entry form,
principal and interest payments will be made as described herein. See "The Bonds - Book -Entry System."
The Bonds may be subject to optional redemption prior to their stated maturities. The Bonds are being issued
to refund all of the City's outstanding Loan No. 502010, to fund the First Reserve Subaccount and to pay costs
of issuance of the Bonds. (See "Redemption Provisions," "Refunding Procedure," "Use of Proceeds," "Security"
and "Authorization for Issuance" herein.)
The Bonds are offered by the Underwriter when, as and if issued by the City, subject to the opinion as to
legality of the Bonds, and tax - exemption of the Bonds by K &L Gates LLP, Portland, Oregon, Bond Counsel,
which opinion will be delivered with the Bonds. The Bonds, in book -entry form, are expected to be available
for delivery through the facilities of DTC for delivery by Fast Automated Securities Transfer on or about
November 1, 2011 (the "Date of Delivery ").
This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must
read the entire official statement to obtain information essential to making an informed investment decision.
Preliminary; subject to change. D.A. DAVIDSON p_ CO.
62
$2,465,000*
CITY OF WOODBURN
MARION COUNTY, OREGON
WATER REVENUE REFUNDING BONDS, SERIES 2011
DATED: Date of Delivery (Expected to be November 1, 2011)
MATURITY SCHEDULE
DUE: June 1, as shown below
2011
$ 225,000
2017
$ 225,000
2012
190,000
2018
230,000
2013
200,000
2019
240,000
2014
205,000
2020
250,000
2015
215,000
2021
265,000
2016
220,000
(1 ) Preliminary; subject to change.
(Z) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global
Services. The CUSIP numbers are included above for convenience of the holders and potential holders of the Bonds. No
assurance can be given that the CUSIP numbers for the Bonds will remain the same after the date of issuance and
delivery of the Bonds.
63
CITY OF WOODBURN
270 Montgomery St
Woodburn, OR 97071
(503) 982 -5222
Mayor and City Council:
Mayor................................................................... ...............................
City Council .......................
...... Kathy Figley
.......... Dick Pugh
Mel Schmidt
Pete MacCullum
Jim Cox
Frank Lonegran
Eric Morris
Certain Appointed City Officials:
City Administrator ....................................................... ............................... Scott Derickson
Finance Director .......................................................... ............................... Ignacio Palacios
Public Works Director .............................. ............................... ............................Dan Brown
Underwriter
D. A. DAVIDSON & CO.
Two Centerpointe Drive, Suite 400
Lake Oswego, Oregon 97035
(503) 863 -5094
Bond Counsel
K &L GATES LLP
222 SW Columbia, Suite 1400
Portland, Oregon 97201
(503) 228 -3200
Registrar
U.S. Bank National Association
555 Oak Street PL -6
Portland, Oregon 97204
(503) 275 -5713
No dealer, broker, salesman or other person has been authorized by the City to give any information or
to make any representations, other than those contained in this Official Statement, and if given or
made, such other information or representations must not be relied upon as having been authorized by
the City. The information in this Official Statement was obtained from sources believed to be reliable,
but is not guaranteed as to accuracy or completeness.
The Underwriter has reviewed the information in this Official Statement in accordance with, and as a
part of, its responsibilities under the federal securities laws as applied to the facts and circumstances of
this transaction, but the Underwriter does not guarantee the accuracy or completeness of the
information. The information and expressions of opinion herein are subject to change without notice,
and neither the delivery of this Official Statement nor any sale hereunder shall create any implication
that there has been no change in the financial condition or operations of the City described herein since
the date of its distribution. This Official Statement contains, in part, estimates and matters of opinion
that are not intended as statements of fact, and no representation or warranty is made as to the
correctness of such estimates and opinions or that they will be realized.
The following descriptions of the Bonds, the Resolution, the Master Declaration (defined herein) and all
references to other documents or materials not claiming to be quoted in full are only brief outlines of
some of the provisions and do not claim to summarize or describe all provisions. Copies of such
documents may be obtained from the City or the Underwriter.
THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. IN MAKING AN INVESTMENT DECISION INVESTORS MUST
RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.
This Preliminary Official Statement will be "deemed final" by the City, pursuant to Rule 15c2 -12
promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended, except for information which is permitted to be excluded from this Preliminary Official
Statement under said Rule 15c2 -12.
In connection with the offering and issuance of the Bonds, the Underwriter may over -allot or effect
transactions that stabilize or maintain the market price of the Bonds at a level above that which might
otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time.
Certain statements included or incorporated by reference in this Official Statement constitute "forward -
looking statements" within the meaning of Section 27A of the United States Securities Act of 1933, as
amended. Such statements are generally identifiable by the terminology used such as "plan," "expect,"
"estimate," "projection," "budget" or other similar words. No assurance can be given that the future
results discussed herein will be achieved and actual results may differ materially from the forecasts
described herein.
65
TABLE OFCONTENTS
SUMMARYSTATEMENT ................................................................................................. ..............................3
INTRODUCTION.............................................................................................................. ..............................5
DESCRIPTION OF THE BONDS ......................................................................................... ..............................5
Authorization for Issuance ......................................................................................... ..............................5
Principaland Interest ................................................................................................. ..............................5
Registrar and Registration Features ........................................................................... ..............................5
Book -Entry Bonds ....................................................................................................... ..............................6
RedemptionProvisions .............................................................................................. ..............................6
Estimated Sources and Uses of Funds ....................................................................... ..............................6
Useof Proceeds .......................................................................................................... ..............................6
RefundingProcedure ................................................................................................. ..............................6
Security....................................................................................................................... ..............................7
RateCovenant ............................................................................................................ ..............................8
Fundsand Accounts ................................................................................................... ..............................8
ParityBonds ............................................................................................................... ..............................9
SubordinateBonds .................................................................................................... .............................10
OtherBond Covenants .............................................................................................. .............................10
Eventsto Default provision ....................................................................................... .............................11
THECITY ........................................................................................................................ .............................11
Administration ......................................................................................................... ...............................
11
BargainingUnits ........................................................................................................ .............................12
BONDED INDEBTEDNESS ............................................................................................... .............................12
Debt Service Requirements ....................................................................................... .............................14
DebtPayment Record ............................................................................................... .............................14
FutureFinancing ........................................................................................................ .............................14
THEWATER SYSTEM ...................................................................................................... .............................15
Description of the Sewer Treatment Plant ............................................................... .............................15
Description of the Collection and Transmission System ........................................... .............................15
Ratesand Charges ..................................................................................................... .............................15
The following tables present historical customer and sewer charges statistics ...... .............................17
FINANCIAL INFORMATION ............................................................................................ .............................20
Financial Reporting and Accounting Policies ............................................................ .............................20
Descriptionof Select Funds ....................................................................................... .............................20
Auditing ..................................................................................................................... .............................20
BudgetaryProcess ..................................................................................................... .............................23
Investments ............................................................................................................... .............................23
PensionSystem ......................................................................................................... .............................24
Other Post - Employment Benefits ............................................................................. .............................26
RiskManagement ...................................................................................................... .............................27
THE INITIATIVE AND REFERENDUM PROCESS ............................................................... .............................27
Referendum .............................................................................................................. .............................27
..
Initiatives................................................................................................................... .............................27
CityCharter ............................................................................................................... .............................29
LEGAL MATTERS AND LITIGATION ................................................................................ .............................29
TAXMATTERS ................................................................................................................ .............................29
TaxExemption ........................................................................................................... .............................29
Oregon State Tax Exemption .................................................................................... .............................30
CONTINUINGDISCLOSURE ............................................................................................ .............................31
RATING .......................................................................................................................... .............................31
UNDERWRITING ............................................................................................................ .............................31
PRELIMINARY OFFICIAL STATEMENT ............................................................................ .............................31
CONCLUDING STATEMENT ............................................................................................ .............................32
APPROVAL OF OFFICIAL STATEMENT ............................................................................ .............................32
APPENDIX A— ECONOMIC AND DEMOGRAPHIC INFORMATION
APPENDIX B — CONTINUING DISCLOSURE CERTIFICATE
APPENDIX C —FORM OF LEGAL OPINION
APPENDIX D — AUDITED FINANCIAL STATEMENTS 2010
APPENDIX E — BOOK -ENTRY ONLY SYSTEM
APPENDIX F — FORM OF MASTER WATER SYSTEM REVENUE BOND DECLARATION
67
$2,465,000*
CITY OF WOODBURN
MARION COUNTY, OREGON
WATER REVENUE REFUNDING BONDS, SERIES 2011
SUMMARY STATEMENT
The following summary is qualified in its entirety by reference to the detailed information appearing elsewhere
in this Official Statement. No person is authorized to detach this Summary Statement from this Official
Statement or to otherwise use it without this entire Official Statement. Certain capitalized terms not otherwise
defined herein shall be given definitions provided in the Master Declaration (defined herein), which definitions
are included in Appendix F.
ISSUER ................. ............................The City of Woodburn, Oregon (the "City ") is located in Marion County,
approximately 30 miles south of the City of Portland and 18 miles north of
the City of Salem. The City has a 2010 preliminary estimated population of
23,150. (See "The City" and "Appendix A — Economic and Demographic
Information. ")
AUTHORITY
FOR ISSUANCE ... ..........................Under and in accordance with State laws and provisions, specifically Oregon
Revised Statutes ( "ORS ") Sections 287A.360, the Bonds are being issued
pursuant to Resolution No. (the "Resolution ") adopted by the City
Council (the "Council ") on September 26, 2011. The Bonds are also being
issued under a Master Water System Revenue Bond Declaration (the "Master
Declaration ") to be executed on the Date of Delivery.
[ INSURANCE] .... ............................... [If the Bonds are sold with bond insurance, the Master Declaration will
provide that those documents may be amended with the consent of the bond
insurer of the Bonds and without consent of the owners of the Bonds. The
Master Declaration may also have other provisions added at the request of
the insurer of the Bonds.]
INTEREST AND
PRIOR REDEMPTION ................ Interest is payable semi - annually each June 1 and December 1, commencing
December 1, 2011, as shown on the inside cover. (See the "Description of the
Bonds" herein.) The Bonds may be subject to optional redemption prior to
their stated maturities. (See "Redemption and Purchase" herein.)
SOURCE OF
REPAYMENT .... ............................The City has pledged in the Master Declaration as security for the payment of
the principal of, premium, if any, and interest on the Bonds (1) a first lien on
the Net Revenues of the Water System (the "System ") that will take effect
once the City's borrowings with outstanding liens on the System have been
repaid by the Bonds, and (2) all money and securities held in the First Reserve
Subaccount, including the investment income thereon, if any, subject to the
provisions of the Master Declaration as described herein. (See "Description of
the Bonds -Security" herein.)
Preliminary; subject to change.
3
.:
USE OF
PROCEEDS ....... ............................The Bonds are being issued to refund all of the City's outstanding Loan No.
S02010, to fund the First Reserve Subaccount and to pay costs of issuance of
the Bonds. (See "The Bonds - Purpose and Use of Proceeds" herein.)
4
$2,465,000*
CITY OF WOODBURN
MARION COUNTY, OREGON
WATER REVENUE REFUNDING BONDS, SERIES 2011
INTRODUCTION
The City of Woodburn, Oregon (the "City ") furnishes this Official Statement in connection with the offering of
the Water Revenue Refunding Bonds, Series 2011 (the "Bonds "). This Official Statement, which includes the
cover page, inside cover pages and appendices, provides information concerning the City, the Bonds and the
City's water system (the "System ").
The information set forth herein has been obtained from the City and other sources that are believed to be
reliable. The information contained herein should not be construed as representing all conditions affecting the
City or the Bonds. Additional information may be obtained from the City. The statements relating to the
Resolution and the Master Declaration are in summarized form, and in all respects are subject to and qualified in
their entirety by express reference to the provisions of the complete documents. The form of Master Declaration
is attached hereto as Appendix F. The summaries of those agreements in this Official Statement are not to be
construed as contracts with Owners of the Bonds.
DESCRIPTION OF THE BONDS
Authorization for Issuance
The Bonds are being issued pursuant to Resolution No. adopted by the City Council on September 26,
2011 (the "Resolution "). The Bonds are also being issued under a Master Water System Revenue Refunding Bond
Declaration (the "Master Declaration ") to be executed on the Date of Delivery.
Principal and Interest
The Bonds will be issued in the aggregate principal amount posted on the inside cover of this Official Statement
and will be dated and bear interest from the Date of Delivery. The Bonds will mature on the dates and in the
principal amounts and will bear interest, payable semiannually, until the maturity of the Bonds as set forth on
the inside cover of this Official Statement.
Interest on the Bonds will be computed on the basis of a 360 -day year consisting of twelve 30 -day months.
Registrar and Registration Features
The Bonds will be issued in fully registered form and, when issued, will be registered in the name of Cede & Co.
as Bond Owner and as nominee for The Depository Trust Company ( "DTC "), New York, New York. DTC will act as
securities depository for the Bonds. Individual purchases and sales of the Bonds may be made in book -entry
form only in minimum denominations of $5,000 within a single maturity and integral multiples thereof.
Purchasers ( "Owners ") will not receive certificates representing their interest in the Bonds.
The principal of and interest on the Bonds will be payable by the Registrar, or such other or additional offices as
may be specified to the City by the Registrar, to DTC, which, in turn, is obligated to remit such principal and
interest to its participants for subsequent disbursement to the Owners of the Bonds, as further described in
Appendix E attached hereto. Interest on the Bonds shall be credited to the Beneficial Owners by the DTC
Participants.
Preliminary; subject to change.
5
70
Book -Entry Bonds
DTC will act as securities depository for the Bonds. The ownership of one fully registered bond for each maturity
of the Bonds, as set forth on the inside cover of this Official Statement, each in the aggregate principal amount
of such maturity, will be registered in the name of Cede & Co., as nominee for DTC. See Appendix E attached
hereto for additional information.
Procedure in the Event of Revisions of Book -Entry Transfer System. If the book - entry -only system is discontinued,
the Registrar and the City shall amend the Master Declaration to provide for an alternative system of providing
notice and such other matters as need to be updated for the bonds that is of general acceptance in the
municipal bond markets.
Redemption Provisions
Optional Redemption. The Bonds are not subject to optional redemption prior to maturity.
[Mandatory Redemption. The Term Bonds maturing on December 1, 20 are subject to mandatory redemption
(in such manner as the Registrar and DTC will determine or by lot by the Registrar) on June 1 of the following
years in the following principal amounts, at a price of par plus accrued interest to the date of redemption:]
[TO COME]
Estimated Sources and Uses of Funds
IIC P1 VI.CCI.I3 II VIII II IC UU11 QIC CJIIIIIQICU lV IJC QPP I ICU QJ IVIIVVVJ.
Principal Amount $2,465,000
Release of Prior Debt Service Reserve -
Prior Debt Service Fund Contribution
Net Original Issue Premium -
Total Available Proceeds $2,465,000
Refunding Requirements
Deposit to First Reserve Subaccount
Issuance Costs, Underwriters Discount and Contingency
Total Uses of Funds
(1) Amounts will be included in the final Official Statement. Preliminary, subject to change.
Use of Proceeds
The City previously issued the SDWRF Loan No. S02010 the "Refundable Bonds ". Proceeds of the Bonds will be
used to refund all of the City's outstanding Refundable Bonds, to fund the First Reserve Subaccount and to pay
the costs of issuance of the Bonds. The Bonds are being issued so that the City can obtain a benefit of savings in
total debt service requirements.
Refunding Procedure
The proceeds of the Bonds will be used to provide funds to redeem the SDWRF Loan No. S02010.
6
71
Information on the Refundable Bonds is as follows:
SDWRF Loan No. S02010
$3,285,160 $3,285,160 10/3/2011
100%
Total Refundable Bonds
$ 3,285,160 $ 3,285,160
(1) Represents the earliest redemption or prepayment date for each series of Refundable Bonds based on the estimated Dated Date of the Bonds.
Preliminary, subject to change.
Security
Bonds Net Revenue Pledge. The City has pledged in the Master Declaration as security for the payment of the
principal of, premium, if any, and interest on the Bonds and any Parity Bonds the Net Revenues of the System on
a first lien basis once the City's outstanding borrowings secured by Net Revenues have been repaid.
The City may issue future Parity Bonds on a parity basis with the Bonds, if several conditions, as described in the
Master Declaration are met. The Bonds and future Parity Bonds shall be referred to herein as the "Water
Bonds."
The Bonds are not general obligations of the City and are not payable from taxes levied by the City. The Bonds
are not obligations of Marion County, the State or any political subdivision thereof other than the City.
As further defined in the Master Declaration, "Gross Revenues" generally means all fees and charges and other
revenues that are properly accrued under generally accepted accounting principles as revenues of the System,
including revenues from product sales, system development charges, and interest earnings on Gross Revenues in
the Water Fund.
As further defined in the Master Declaration, "Operating Expenses" generally means all costs which are properly
treated as expenses of operating and maintaining the System under generally accepted accounting principles
with respect to the System, but excludes certain costs.
As used herein and defined in the Master Declaration, "Net Revenues" means the Gross Revenue less Operating
Expenses.
As used herein and defined in the Master Declaration, "Annual Bond Debt Service" means in any Fiscal Year the
sum of: (1) the amounts of any transfers to the Bond Reserve Account described in the Master Declaration and
any similar requirement that is subsequently established for Parity Bonds; plus (2) the amount of principal and
interest required to be paid in that Fiscal Year on all Outstanding Bonds, calculated as follows:
(a) Interest which is to be paid from Bond Proceeds shall be subtracted;
(b) Bonds which are subject to scheduled, noncontingent redemption or noncontingent tender shall
be deemed to mature on the dates and in the amounts which are subject to mandatory redemption or tender,
and only the amount scheduled to be outstanding on the final maturity date shall be treated as maturing on that
date; and,
(c) Bonds which are subject to contingent redemption or tender shall be treated as maturing on
their stated maturity dates.
(d) The amount of any interest rate subsidies that the City expects to receive from the United States
for any Bonds that are "Build America Bonds," "Recovery Zone Economic Development Bonds" or similar bonds
shall be subtracted from the Bond interest payments that are eligible for the subsidies.
7
72
Rate Covenant
Basic Rate Covenant. The City covenants for the benefit of the Owners that it will establish and maintain rates
and charges in connection with the operation of the System which are sufficient to permit the City to pay all
Operating Expenses and all lawful charges against the Net Revenues, and to make all transfers required by the
Master Declaration to the Bond Account, the Bond Reserve Account and the Subordinate Obligations Account,
and to pay any franchise fees or similar charges imposed by the City on the System or its operations.
Coverage Covenants. The City covenants for the benefit of the Owners of all Bonds that it shall charge rates and
fees in connection with the operation of the System which, when combined with other Gross Revenues:
(1) but without regard to system development charges, are adequate to generate Net Revenues
each Fiscal Year at least equal to one hundred and ten percent (100.00 %) of Annual Bond Debt
Service due in that Fiscal Year; and
(2) are adequate to generate Net Revenues each Fiscal Year at least equal to one hundred twenty -
five percent (125.00 %) of Annual Bond Debt Service due in that Fiscal Year.
Report. Not later than 60 days after the end of each Fiscal Year, the City shall determine whether it complied
with the Coverage Covenants, based on the financial information available to the City at that time. If the report
demonstrates that the City has not complied with the Coverage Covenant during that Fiscal Year, it shall not
constitute an Event of Default if within 120 days after the beginning of the subsequent Fiscal Year, the City
implements the recommendations of a Qualified Consultant that is engaged by the City to deliver written
recommendations for a schedule of rates and charges or other actions which the Qualified Consultant
reasonably projects will permit the City to comply with the Rate Covenants for the remainder of the Fiscal Year
in which the recommendations are delivered to the City (with calculations for the partial year made on an
annualized basis).
For a complete description of the Master Declaration covenants, see "APPENDIX F -- Master Declaration" herein.
Funds and Accounts
The Bond Account. A Bond Account has been created in the Water Fund. Until all Bonds are paid or defeased,
amounts in the Bond Account shall be used only to pay Bonds. The City shall transfer sufficient amounts from
the Bond Account to the Registrar in time to permit the Registrar to pay all Bond principal, interest and premium
(if any) when due in accordance with the Bonds. Amounts in the Bond Account shall be invested only in
Permitted Investments. Earnings on the Bond Account shall be credited to the Bond Account.
The Bond Reserve Account. A Bond Reserve Account has been created in the Water Fund. The Bond Reserve
Account shall be held by the City and the City may create subaccounts in the Bond Reserve Account to secure the
Bonds. When each subaccount is created, the City shall determine whether the subaccount will secure one or
more Series of Bonds. If the City creates a subaccount in the Bond Reserve Account, the City shall, before it
issues the first Series of Bonds that is secured by that subaccount, establish the Reserve Requirement for that
subaccount and pledge amounts credited to that subaccount to pay the Bonds that are secured by that
subaccount.
The First Reserve Subaccount . The City created the First Reserve Subaccount in the Bond Reserve Account to
secure only the Bonds and any subsequent Series of Bonds which the City elects to secure with the First Reserve
Subaccount. At Closing of each Series Bonds that are secured by the First Reserve Subaccount, the City shall
deposit into the First Reserve Subaccount an amount sufficient to make the balance in the First Reserve
Subaccount equal to the First Reserve Subaccount Reserve Requirement, calculated as if the Series of Bonds
being closed is Outstanding. "First Reserve Subaccount Reserve Requirement" means the lesser of: (a)
Maximum Annual Bond Debt Service on all Outstanding Bonds that are secured by the First Reserve Subaccount,
or (b) the amount that was required to be in the First Reserve Subaccount immediately before a Series of Bonds
that is secured by the First Reserve Subaccount is issued, plus the Tax Maximum for that Series of Bonds.
Maximum Annual Bond Debt Service on all Outstanding Bonds that are secured by the First Reserve Subaccount
8
73
shall be recalculated as of each First Reserve Subaccount Valuation Date. "Tax Maximum" means, for any Series
of Bonds, the lesser of: the greatest amount of principal, interest and premium, if any, required to be paid in any
Fiscal Year on such Series; 125% of average amount of principal, interest and premium, if any, required to be
paid on such Series during all Fiscal Years in which such Series will be Outstanding, calculated as of the date of
issuance of such Series; or, ten percent of the proceeds of such Series, as "proceeds" is defined for purposes of
Section 148(d) of the Code.
On the date of closing of the Bonds, the First Reserve Subaccount Reserve Requirement is equal to $
, which is the on the Bonds as of the date of Closing of the Bonds.
The First Reserve Subaccount and the moneys therein have been irrevocably pledged to the payment of the
Bonds and any future Bonds that the City may elect to secure with the First Reserve Subaccount.
If the balance in the First Reserve Subaccount on a First Reserve Subaccount Valuation Date is less than the First
Reserve Subaccount Reserve Requirement, the City shall begin making transfers of Gross Revenues to the First
Reserve Subaccount in accordance with the authorized flow of funds in the Master Declaration.
Flow of Funds. The City shall apply Gross Revenues for the following purposes and in the following order of
priority:
First, to pay Operating Expenses;
Second, to pay the principal and interest on any Bonds;
Third, to replenish subaccounts in the Bond Reserve Account;
Fourth, to pay rebates and penalties on the Bonds;
Fifth, to pay the principal and interest on any Subordinate Obligations, if any;
Sixth, to make transfers to the Rate Stabilization Fund or to spend Net Revenues on any lawful purpose.
Rate Stabilization Fund. The City shall establish and maintain the Rate Stabilization Fund as long as the Bonds are
Outstanding. Net Revenues may be transferred to the Rate Stabilization Fund at the option of the City. Money
in the Rate Stabilization Fund may be withdrawn at any time and used for any purpose for which the Gross
Revenues may be used. Deposits to the Rate Stabilization Fund increase Operating Expenses for the Fiscal Year in
which the deposit is made. Withdrawals from the Rate Stabilization Fund increase Gross Revenues for the Fiscal
Year in which the withdrawal is made. The City may adjust deposits to and withdrawals from the Rate
Stabilization Fund for a Fiscal Year at any time prior to the date on which the audit for that Fiscal Year is finalized.
Earnings on the Rate Stabilization Fund shall be credited to the Water Fund.
Parity Bonds
The City may issue Parity Bonds to provide funds for any purpose relating to the System, but only if:
(1) No Event of Default under the Master Declaration has occurred and is continuing; and
(2) At the time of the issuance of the Parity Bonds there is no deficiency in the Bond Account and
the balance in the Bond Reserve Account is at least equal to the Reserve Requirement; and
(3) There shall have been filed with the City either:
A. A certificate of the City Official stating that Net Revenues (adjusted as provided in
Section 7.2 of the Master Declaration) for the Base Period were not less than one
hundred and twenty -five percent (125 %) of the average Annual Debt Service on all then
Outstanding Bonds, with the proposed Parity Bonds treated as Outstanding; or
9
74
B. A certificate or opinion of a Qualified Consultant:
i. Stating the amount of the Adjusted Net Revenues for each of the five Fiscal Years
after the last Fiscal Year for which interest on the Parity Bonds is, or is expected to
be, capitalized, or, if interest will not be capitalized, for each of the five Fiscal
Years after the proposed Parity Bonds are issued; and
ii. Concluding that the respective amounts of Adjusted Net Revenues in each of the
first four Fiscal Years described (i) above are at least equal to one hundred
twenty -five percent (125.00 %) of the Annual Bond Debt Service for each of those
respective Fiscal Years on all Outstanding Bonds, with the proposed Parity Bonds
treated as Outstanding; and
iii. Concluding that the amount of Adjusted Net Revenues in the fifth Fiscal Year
described in (i) above is at least equal to one hundred twenty -five percent
(125.00 %) of the average Annual Bond Debt Service, calculated for the period
beginning with that fifth Fiscal Year on all then Outstanding Bonds, with the
proposed Parity Bonds treated as Outstanding.
See Appendix F for the complete text of the Master Declaration.
Subordinate Bonds
The City may issue Subordinate Bonds as provided in the Master Declaration.
Other Bond Covenants
A complete description of the Master Declaration covenants is provided in "APPENDIX F -- Master Declaration"
herein. Select Master Declaration covenants for the benefit of the Owners of all Outstanding Bonds follows:
Payment of Bonds. The City shall promptly cause the principal, premium, if any, and interest on the Bonds to be
paid as they become due.
Books and Records. The City shall maintain complete books and records relating to the operation of the System
and all City funds and accounts in accordance with generally accepted accounting principles applicable to the
System.
No Superior Liens. The City shall not issue obligations having a claim superior to the claim of the Bonds upon the
Net Revenues.
Deposits. The City shall promptly deposit into all funds and accounts all sums required to be deposited.
Operation of the System. The City shall work in good faith to cause the System to be operated at all times in a
safe, sound, efficient and economic manner in compliance with all health, safety and environmental laws,
regulatory body rules, regulatory body orders and court orders applicable to the City's operation and ownership
of the System. The City shall maintain the System in good repair, working order and condition. The City shall not
enter into any agreement to provide System products or services at a discount from published rate schedules,
and that it will not provide free System products or services except in the case of emergencies.
Insurance. The City shall at all times maintain with responsible insurers all such insurance on the System as is
customarily maintained with respect to works and properties of like character against accident to, loss of or
damage to such works or properties. The net proceeds of insurance against material accident to or material
destruction of the System shall be used to repair or rebuild the damaged or destroyed System, and to the extent
not so applied, will be applied to the payment or redemption of the Bonds.
Sale or Transfer of System Property. The City shall not, nor will it permit others to, sell, mortgage, lease or
otherwise dispose of or encumber all or any portion of the System except as allowed in the Master Declaration.
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Events to Default provision
Default provisions and remedies are provided in Section 11 of the Master Declaration. If an Event of Default
occurs, any Owner may exercise any remedy available at law or in equity; however, the Bonds shall not be
subject to acceleration.
THE CITY
The City of Woodburn was incorporated in 1889. The City is located in northwestern Oregon and is a part of the
Salem Metropolitan Statistical Area. It encompasses approximately 5.2 square miles.
The City is overseen by a seven member City Council (the "Council ") under the constitution and laws of the State
of Oregon and the City's Home Rule Charter. The Council is composed of a Mayor and six elected Council
members. Council member positions are for a term of four years with overlapping terms to provide for the
election of three new council members every two years. The Mayor is the presiding officer of the Council and is
elected City -wide for a two -year term.
The Council appoints a City Administrator who is the chief administrative officer of the City. The City
Administrator appoints, with the consent of the Council, the heads of all City departments, including the Finance
Director and the Public Works Director. The Finance Director supervises the financial affairs of the City and is
responsible for operating a general accounting system for City government in conformity with generally
accepted accounting principles and practices, and for receipt, custody and disbursement of all City funds and
monies. The Public Works Director plans, organizes, and directs activities of the Public Works Department.
Divisions within the Public Works Department include Administration, Engineering, Maintenance, Water
Resources and Transportation.
The current Mayor and City Council are listed below:
Mavor and Citv Council
Kathy Figley
Dick Pugh
Mel Schmidt
Pete McCallum
Jim Cox
Frank Lonergan
Mayor Title Company Asst Vice President /Advisory Title Officer
Councilor - Ward 1 Chief Financial Officer
Councilor - Ward 2 Farmer
Councilor - Ward 3 Retired High School Principal
Councilor - Ward 4 Attorney
Councilor - Ward 5 General Manager — Solid Waste Hauling Division
1/1/2008 12/31/2012
1/1/2006 12/31/2012
1/1/2008 12/31/2012
1/1/2008 12/31/2014
1/1/2008 12/31/2014
1/1/2006 12/31/2014
1/1/2006 12/31/2012
Eric Morris Councilor - Ward 6 Retired Navy Intelligence Specialist
Administration
The three City officials most closely associated with the operation of the System are:
Scott Derickson, City Administrator. Mr. Derickson has served as the City Administrator since September 2008.
Prior to working for the City, he served as Manager for Clatsop County, Oregon. Mr. Derickson earned his
Bachelor's degree in Planning, Public Policy and Management and his Master's degree in Public Administration,
both from the University of Oregon.
Ignacio Polocios, Finance Director. Mr. Palacios has served as the City's Finance Director since November 30,
2009 Prior to working for the City, he served as the Finance Director for the City of Milwaukie, Oregon and
previously served as an auditor for Grove, Mueller and Swank (a local public accounting firm) and was
11
76
responsible for managing multiple audits of local municipal governments, school and special districts. Mr.
Palacios earned his degree in Business Administration (accounting emphasis) from Oregon State University.
Dan Brown, Public Works Director. Mr. Brown has served as the City's Public Works Director since February
2008. Prior to working for the City, he served as Capital Projects Division Manager for Washington County,
Oregon. Mr. Brown earned his Bachelor of Science degree in Civil Engineering from the U.S. Coast Guard
Academy and his Masters of Science degree in Civil Engineering from the University of Illinois. Mr. Brown also
holds a Masters of Business Administration degree from Southern Illinois University at Edwardsville.
Bargaining Units
The City has 138 full -time employees and 26 part -time employees. Bargaining units which represent City
employees are as follows:
Bargaining Units
American Federation of State, County
& Municipal Employees (AFSCME)
62.5 June 30, 2012
Woodburn Police Association
24 June 30, 2012
BONDED INDEBTEDNESS
Revenue Bonds. The City may issue revenue bonds pursuant to ORS 287 A.150. The Bonds are revenue bonds
secured by revenues of the System (please see "Description of the 2010 Sewer Bonds - Security' herein).
General Obligation Bonds. ORS 287A.050 establishes a limit on the amount of general obligation bonds a city
may issue. Cities may issue an aggregate principal amount up to three percent of the Real Market Value of all
taxable properties within the city. A lower limit may be applied by an individual city's charter. The statutory
limitation does not apply to general obligation bonds issued for water supply, treatment or distribution; sanitary
or storm sewage collection or treatment; hospitals or infirmaries; gas, power or lighting; or off - street motor
vehicle parking facilities. The limitation also does not apply to bonds issued to finance the costs of local
improvements assessed and paid for in installments under statutory or charter authority. The Bonds are not
general obligation bonds.
Limited -tax Debt. The Oregon Constitution and statutes and charter of the City do not limit the amount of
limited -tax debt the City may incur. Collection of property taxes to pay principal and interest on such limited tax
debt is subject to the limitations of Article XI, Sections 11 and 11b. The Bonds are not limited tax debt.
Pension Bonds. ORS 238.694 authorizes local governments to issue full faith and credit obligations to pay pension
liabilities without limitation as to principal amount. Pension bonds are not general obligations as defined under
State law and the City is not authorized to levy additional taxes to make pension bond payments. The Bonds are
not pension bonds.
Notes. The City may issue revenue bonds in anticipation of tax revenues or other monies in an amount which, in
the aggregate, equal up to 80% the taxes or other revenues except grant monies that the City has budgeted or
otherwise reasonably expects to have available to pay the revenue bonds. Such notes must mature within 13
months, pursuant to ORS 287 A.180. The Bonds are not notes.
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77
Dutstanding Long -Term Debt
(1) The Bonds. Preliminary, subject to change.
(2) Proposed redemption date. Preliminary, subject to change.
(3) The City plans to refinance its Loans No. R98411, R98412, R98413, R98414 and 698002 with Wastewater Revenue Refunding Bonds, Series 2011
that may be issued simultaneously with the Bonds under a separate issuance process.
Source: City and City's Audited Financial Report for the Fiscal Year ended June 30, 2010
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78
Final Maturity
Governmental Activities
Amount
Amount
General Obligation Bonds
Series 2003 (Water)
2028
8,400,000
6,778,648
Series 2005
2025
6,915,000
5,930,000
Subtotal General Obligation Bonds
$12,708,648
Urban Renewal Bonds
Bank of America Loan
2015
1,736,565
1,067,393
Subtotal Urban Renewal Bonds
$1,067,393
Full Faith and Credit Obligations
OBDD Loan. No. B97002
2018
$ 450,000
228,468
Subtotal Full Faith and Credit Obligations
$228,468
Business -Type Activities
Water Revenue Bonds
SDWRF Loan No. S02010
2021
(2)
4,000,000
2,597,1 20
Less: Refunded Loan
(2,597,120)
OEDD Loan No. Y02007
2025
4,000,000
3,285,160
Series 201 1 (1)
2021
2,465,000
2,465,000
Subtotal Water Revenue Bonds
5,750,160
Wastewater Revenue Bonds
Loan No. R9841 1 (3)
2011
(2)
$4,000,000
2,1 22,422
Loan No. R98412 (3)
2011
(2)
25,969,671
16,971,572
Loan No. R98413 (3)
2011
(2)
700,000
370,804
Loan No. R98414 (3)
2011
(2)
1,1 10,156
191,241
Loan No. G98002 (3)
2011
(2)
515,000
271,486
Loan No. B91202
2012
307,666
53,117
Subtotal Wastewater Revenue Bonds
19,980,642
(1) The Bonds. Preliminary, subject to change.
(2) Proposed redemption date. Preliminary, subject to change.
(3) The City plans to refinance its Loans No. R98411, R98412, R98413, R98414 and 698002 with Wastewater Revenue Refunding Bonds, Series 2011
that may be issued simultaneously with the Bonds under a separate issuance process.
Source: City and City's Audited Financial Report for the Fiscal Year ended June 30, 2010
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Debt Service Requirements
The following tables show the debt service on the Bonds and on the Refunded Bonds.
Water Fund Debt Service Requirements
(1) The debt service schedule is provided for illustrative purposes only and is preliminary and subject to change
Source: City and City's Audited Financial Report for the Fiscal Year ended June 30, 2010 and this issue.
Debt Payment Record
The City has never defaulted on a payment of principal or interest on any of its bonds or obligations.
Furthermore, the City has never issued refunding bonds for the purpose of avoiding an impending default.
Future Financing
Following the issuance of the Bonds, the City does not expect to issue additional water revenue debt within the
next twelve months.
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79
Refundable Bonds outstanding
Less: Refundable
Bonds
The Bonds
2012
$ 380,974 $ 230,466
$ (190,487)
$ (109,339)
$ 225,000 $ 56,571
$ 593,186
2013
397,014 214,427
(198,507)
(101,319)
190,000 80,125
581,740
2014
413,728 197,713
(206,864)
(92,962)
200,000 72,325
583,940
2015
431,146 180,295
(215,573)
(84,253)
205,000 65,250
581,865
2016
449,298 162,144
(224,649)
(75,178)
215,000 59,488
586,103
2017
468,212 143,228
(234,106)
(65,720)
220,000 54,050
585,664
2018
487,924 123,516
(243,962)
(55,864)
225,000 47,925
584,539
2019
508,466 102,975
(254,233)
(45,593)
230,000 39,950
581,565
2020
529,872 81,568
(264,936)
(34,890)
240,000 30,550
582,164
2021
552,180 59,261
(276,090)
(23,736)
250,000 19,500
581,115
2022
575,426 36,014
(287,713)
(12,113)
265,000 6,625
583,239
2023
- 11,789
- -
11,789
2024
- 11,789
11,789
2025
280,012 11,789
291,801
(1) The debt service schedule is provided for illustrative purposes only and is preliminary and subject to change
Source: City and City's Audited Financial Report for the Fiscal Year ended June 30, 2010 and this issue.
Debt Payment Record
The City has never defaulted on a payment of principal or interest on any of its bonds or obligations.
Furthermore, the City has never issued refunding bonds for the purpose of avoiding an impending default.
Future Financing
Following the issuance of the Bonds, the City does not expect to issue additional water revenue debt within the
next twelve months.
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THE WATER SYSTEM
Description of the Sewer Treatment Plant
The City owns and operates three water treatment plants located in the City. The treatment plants are located
on National Way, Country Club Road, and Parr Road. Each treatment plant is equipped with chemical feed
systems and four pressure filters and on -site sodium hypochlorite generation system. Raw water treated with
Potassium permanganate is filtered using pressure filters equipped with media of greensand and anthracite coal.
After filtration, chloramines are introduced, and then the treated water is discharged into finished water
reservoirs. As water cascades out of the inlet piping into the reservoirs, radon removal occurs. The water system
has ground level storage reservoirs at each water treatment plant and the one elevated storage tank at
Cleveland Street for a total storage volume of 5.45 million gallons of treated water.
The water treatment plant operations include treatment operators, water technicians, utility workers and meter
readers. Each personnel perform duties applicable to the treatment of potable water. The three water treatment
plants use potassium permanganate to remove naturally occurring iron, manganese and arsenic from the well
water prior to discharging into the distribution system. Chlorine is added to add secondary disinfection. The City
does not provide water to other jurisdictions and does not purchase water from other municipal sources.
The City is in compliance with all federal and state environmental rules and regulations. The City's annual Water
Quality Report is available on the City's website.
Description of the Collection and Transmission System
The City's water system serves an estimated user population of 23,150 and has 6,610 customers in a 7.8 square -
mile area (2005 Urban Growth Area) in Marion County, Oregon. The City's water supply system consists of 6
wells feeding three treatments plants with approximately 5.15 million gallons of storage capacity. The City's sole
source of water supply is ground water from the Troutdale aquifer. The estimated average daily water demand
for the year 2020 is 4.47 million gallons.
Rates and Charges
System Development Charges ("SDCs"). SDCs are collected from each new service connection to the System.
SDCs are imposed at the time of development or when another permit is granted by the City for connection to
water services or for increased use of the System. Service lines may be installed by the developer or the City.
SDCs are imposed on all development within the city for capital improvements for water and sewer. SDCs are
imposed on any development outside the city boundary for water and sewer capital improvements, if such
development connects to or otherwise uses the city's water or sewer systems. The SDCs shall be paid in addition
to all other fees, charges and assessments due for development, and are intended to provide funds only for
capital improvements necessitated by new development. They are designed so that new development pays its
share of improvements to the System.
They City's last rate comparison was made in 2008. The City has not raised its water rates since 2006.
15
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Water System - System Development Charges schedule
Residential Commercial /Industrial
(per dwelling unit) (per gallon /day)
$ 2,085.00
$ 2,085.00 $ 1,688.00 $ 7.84
Drinking Water SDC is not based on meter size but on dwelling units. Resolution 1658 — effective date
1 11 12002Source: City of Woodburn
Water Rates. The City sets water rates and charges by resolution. Current rates are as follows:
Water Rates (use rate and base rate)
[CITY TO PROVIDE CURRENT WATER USE AND BASE RATE SCHEDULES]
Source: City of Woodburn
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81
Billing Procedure. Customers are billed once each month and payments are due about 30 days after the bill is
sent Accounts not paid by the time the next bill is generated (about 28 days) are assessed a late fee of $10 for
first notice. If the same bill is not paid 7 days before the next bill is generated (about 21 days) then the customer
is sent a shut -off notice for the delinquent bill and charged $10. If the bill not paid within 5 days of postcard
then service is disconnected and the customer is charged $25 to reconnect after all fees and bills are paid in full.
Accounts remaining unpaid also receive a delinquent bill, and if they remain unpaid after approximately 60 days
they become subject to disconnection. NOTE: Most billing cycles are four weeks, with the occasional five week
bill. Meters are read the first week of the month, and are always read the first week of the month, not
necessarily every four weeks. The City is divided into four sections and each section is read once a month on a
different week.
The following tables present historical customer and sewer charges statistics.
Water Revenue by Customer Class
Residential
Multifamily
Commercial
Monitored
Industrial
Septic
Total - - - -
Source: City of Woodburn
City of Woodburn: Top Ten Water Accounts (fiscal year ending June 30, 2010)
Specialty Polymers
Industrial Manufacturer
WinCo Foods
Distributor
Townsend Farms
Fruit Processor
Woodburn Senior Estates MH Park
Multi - Family Residential
Woodburn Company Stores
Retail
Best Western
Hotel
Leroy Miller
Laundromat
Do It Best
Distributor
Panor 360
Senior MF Condos
Wellspring
Medical Facility
Subtotal - Ten largest ratepayers
5.48%
All other City's ratepayers
94.52%
Total Water Charges
100.00%
Source: City of Woodburn
17
$ 38,061
1.16%
27,262
0.83%
24,831
0.76%
20,488
0.63%
19,798
0.60%
11,439
0.35%
10,882
0.33%
9,366
0.29%
9,122
0.28%
8,438
0.26%
179,687
5.48%
3,098,053
94.52%
$ 3,277,740
100.00%
82
A four -year combined summary of the City's Water Enterprise Fund and the Water Well Construction Enterprise
Fund Statement (collectively, the "Water Funds ") of Net Assets and Statement of Revenues, Expenditures and
Changes in Fund Balance follows:
Water Funds Statement of Net Assets
(Fiscal Years Ended June 30)
L
1 2010 2009
2008
2007
2006
Current Assets:
22,284
41,340
69,239
33,444
Cash and investments
$ 5,759,202
$ 5,019,977
$ 4,198,473 $
3,499,151
Restricted cash and investments
153,572
174,972
183,139
187,938
Receivables
215,627
175,427
257,561
211,385
Due from other funds
482,000
436,194
232,000
-
Prepaid items
-
-
-
-
Inventory
130,561
133,365
104,853
115,628
Capital assets:
556,802
538,060
514,860
497,180
Land improvements and construction in progress
475,547
475,547
475,547
475,547
Other capital assets, net
22,806,955
23,348,577
22,665,312
22,172,883
Total Assets
- 30,023,464
29,764,059
28,1 16,885
26,662,532
Restricted for Capital Projects
5,792,564
4,834,187
M Am
ft
Current Liabilities:
Accounts payable and accrued items
22,284
41,340
69,239
33,444
Due to other funds
-
120,081
-
-
Accrued Interest Payable
347,830
361
370,167
380,706
Liabilities payable from restricted assets:
Accounts payable
51,252
49,531
71,620
72,597
Customer deposits
100,318
121,445
111,519
115,341
Compensated absences payable
34,280
38,531
39,251
37,701
Current portion of long -term obligations
556,802
538,060
514,860
497,180
Long -term obligations
13,611,179
14,170,748
14,696,894
15,211,754
Total Liabilities
14,723,945
15,080,097
15,873,550
16,348,723
Invested in capital assets, net of related debt
$ 9,131,369
$ 9,115,316
$ 7,929,105
$ 6,938,949
Restricted for Capital Projects
5,792,564
4,834,187
3,959,732
3,056,668
Unrestricted
375,586
373,876
354,498
317,645
Total Net Assets $
$ 15,299,519
$ 14,323,379
$ 12,243,335
$ 10,313,262
Total Liabilities and Net Assets $
- $ 30,023,464
$29,403,476
$ 28,116,885
$26,661,985
Source: City of Woodburn - Audited Financial Statements.
is
83
Water Funds
Statement of Revenues, Expenditures and Changes in Fund Balance
(Fiscal Years Ended June 30)
Charges for services
Total Operating Revenues
Personal services
Materials and services
Depreciation
Total Expenses
Excess (Deficiency) of Revenues Over
Expenses
Interest and investment revenue
Other
Interest expense
Gain (loss) on sale of capital assets
Capital Contributions
Transfers:
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Prior Period Adjustment
Beginning Fund Balance
Ending Fund Balance
3,441,623 3,322,594 3,318,700 2,897,873
3,441,623 3,322,594 3,318,700 2,897,873
$ 1,029,958
$ 954,668
$ 899,658
$ 878,999
574,878
658,147
634,833
643,744
541,622
532,807
211,138
479,966
1,116,500
1,190,954
845,971
1,123,710
2,325,123
2,131,640
2,472,729
1,774,163
109,564
203,280
195,487
142,321
41,505
53,296
66,589
49,735
(371,205)
(423,942)
(419,442)
(553,580)
-
-
(1,909)
-
389,008
633,773
129,885
655,789
572,946
567,180
888,779
(754,678
(688,454
(686,585
(955,340
(319,025
106,134
357,002
(300,109
2,006,098
2,237,774
2,829,731
1,474,054
14,323,379
12,245,272
10,313,262
9,718,453
$ $ 16,329,477
$ 14,483,046
$ 13,142,993
$ 11,192,507
Source: City of Woodburn - Audited Financial Statements.
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FINANCIAL INFORMATION
Financial Reporting and Accounting Policies
The City's basic financial statements were prepared in conformity with GAAP as prescribed by the Governmental
Accounting Standards Board ( "GASB ").
The City follows the "governmental activities" and "business -type activities" reporting requirements of GASB -34
that provides a comprehensive two - column look at the City's financial activities. In addition, the City provides
financial statements by funds, divided into two categories: governmental funds and proprietary funds.
Additional information on the City's accounting methods is available in the City's audited financial statements. A
copy of the City's audited financial report for Fiscal Year 2010 is attached hereto as Appendix D.
Description of Select Funds
Funds are classified into two categories: governmental and proprietary. Each category, in turn, is divided into
separate fund types.
Governmental Funds. The General Fund, the Street Fund, the Transportation Impact Fee Fund and the Police
Construction Fund are major governmental funds.
Proprietary Funds. The City maintains two different types of proprietary funds. Enterprise funds are used to
report the same functions presented as business -type activities in the government -wide financial statements.
The City uses its enterprise funds to account for its sewer and water utilities. Internal service funds are an
accounting device used to accumulate and allocate costs internally among the City's various functions. The City
uses internal service funds to account for its insurance, information systems, central stores, Public Works
administration, and building maintenance operations. The Water Fund is a proprietary fund reported as an
enterprise fund.
Auditing
Each Oregon municipal corporation must obtain an audit and examination of its funds and account groups at
least once each year pursuant to the Oregon Municipal Audit Law, ORS 297.405- 297.555. Municipalities having
annual expenditures of less than $500,000, with the exception of counties and school districts, are exempt from
this requirement. All Oregon counties and school districts, regardless of amount of annual expenditures, must
obtain an audit annually. The required audit may be performed by the State Division of Audits or by
independent public accountants certified by the State as capable of auditing municipal corporations.
The City's audits for the Fiscal Years 2005 through 2009 were performed by Boldt, Carlisle & Smith LLC, CPAs in
Salem, Oregon (the "Auditor'). The City's audit for the Fiscal Year 2010 was performed by Grove, Mueller &
Swank, P.C., in Salem, Oregon ( "City Audited Financial Statements ") The audit report for Fiscal Year 2010
indicates the financial statements, in all material respects, fairly present the City's financial position of the
governmental activities, the business -type activities, each major fund and the aggregate remaining fund
information and the respective changes in financial position and the cash flows, where applicable, in
conformance with accounting principles generally accepted in the United States of America. The Auditor was
not requested to review this Preliminary Official Statement.
Future financial statements may be ordered by contacting the Municipal Securities Rulemaking Board's
Electronic Municipal Market Access ( "EMMA ") system, a free, centralized repository located at:
www.emma.msrb.org.
20
85
Summaries of the City's Net Assets and Changes in Net Assets follow:
Government -wide Statement of Net Assets
(Fiscal Years Ended June 30)
Assets 2010
GovernmenMl AdiviBes
2009 2008 2007
2006
Business
2010 2009
-Type Activities
2008 2007
2006
Cash and investments
$ 17,661,642
$ 19,689,297
$ 18,488,397
$ 19,407,111
$ 8,516,281
$ 8,271,414
$ 7,386,123
$ 7,274,193
Restricted cash & investments
-
-
-
-
181,794
203,194
211,361
216,160
Receivables, net
1,806,257
1,836,946
1,843,309
2,034,473
468,765
382,157
472,939
447,522
Prepaid items
1,827
4,074
2,311
-
-
-
-
-
Internalbalances
318,227
352,938
(4,459)
(87,271)
(318,227)
(352,938)
4,459
87,271
Due from fiduciary funds
120,668
40,292
50,249
49,647
-
-
-
-
Inventories
8,971
11,718
11,065
8,830
218,527
217,562
160,364
171,492
Capital assets:
Land, improvements & construction in progress
32,573,801
29,290,379
29,173,408
26,887,590
2,100,919
1,783,816
1,775,036
1,775,036
Other capital assets, net of depreciation
19,658,207
20,698,061
21,944,925
19,595,218
59,933,419
62,199,261
60,468,230
61,743,483
Total Assets
72,149,600
71,923,705
71
67,895,598
71,101,478
72,704
70
71,715,157
Accounts payable and accrued items
$ 434,033
$ 312,638
$ 388,058
$ 1,097,272
$ 314,593
$ 207,751
$ 124,851
$ 87,764
Accrued interest payable
17,533
20,400
24,117
38,389
501,304
522,891
543,439
727,542
Liabilities payable from restricted cash & investments
Accounts Payable
-
-
-
-
51,252
77,753
99,842
100,819
Customer Deposits
-
-
-
2,000
100,318
121,445
111,519
115,341
Net other post- employment benefit obligation
209,409
-
-
-
36,781
-
-
-
Long -term obligations:
Due within one year
896,218
996,884
979,158
928,149
2,140,356
2,068,632
1,988,299
1,920,994
Due in more than one year
7,225,861
7,687,665
8,293,675
8,882,996
33,615,147
35,140,677
37,124,928
39,039,980
Total Liabilities
8,783,054
9,017,587
9,685,008
10,948,806
36,759,751
38,139,149
39,992,878
41,992,440
Invested in capital assets, net of related debt
$ 44,544,343
$ 42,295,398
$ 42,853,412
$ 39,705,627
$ 26,312,074
$ 26,848,613
$ 23,203,286
$ 22,634,520
Restricted for:
Capital projects
7,792,376
7,426,115
6,535,764
5,716,718
7,430,872
6,981,784
6,603,194
6,630,058
Debt service
1,292,990
2,599,021
2,178,147
1,895,487
-
-
-
-
Highways and streets
422,186
1,222,492
1,006,854
796,657
-
-
-
-
Unreserved
9,314,651
9,363,092
9,250,020
8,832,303
598,781
734,920
679,154
458,139
Total Net Assets S
S 63,366,546
$ 62,906,118
$ 61,824,197
$ 56,946,792
S $ 34,341,727
$ 34,565,317
5 30,485,634
$ 29,722,717
Total Liabilities and Net Assets $
$ 72,149,600
$ 71,923,705
$ 71,509,205
$ 67,895,598
$ $ 71,101,478
$ 72,704,466
$ 70,478,512
$ 71,715,157
NOTE: The Net Assets presents information on all the City's assets and liabilities with the difference between the two reported as net assets.
Source: City of Woodburn - Audited Financial Statements.
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86
Government -wide Statement of Activities
(Fiscal Years Ended June 30)
Governmental Activities
Program Revenues:
Charges for Services
Operating Grants and Contributions
Capital Grants and Contributions
Total Program Revenues
General Revenues:
Taxes
Property taxes levied for:
General purposes
Debt service
Franchise taxes
Transient room taxes
Other grants and contributions
Business -Type Activities
1,117,504 $ 1,316,578 $ 1,230,462 $ 1,253,124 7,955,969 $ 7,398,719 $ 7,156,020 $ 6,628,824
202,993 67,844 61,905 41,320 - - - -
832,398 1,218,026 3,246,398 1,588,976 657,966 1,956,754 1,048,849 1,032,035
$ $ 2,152,895 $ 2,602,448 $ 4,538,765 $ 2,883,420 $ $ 8,613,935 $ 9,355,473 $ 8,204,869 $ 7,660,859
7,212,614 6,899,237 6,488,533 6,155,967 -
1,197,527 1,159,000 1,112,146 1,096,696 -
1,433,900 1,481,352 1,499,451 1,173,532 -
270,987 238,518 223,713 217,962
not restricted to specific programs
1,560,920
1,657,645
1,831,535
1,604,256
-
-
-
-
Unrestricted investment earnings
168,744
824,599
937,467
865,329
166,905
318,139
347,549
288,393
Miscellaneous
746,488
681,107
618,788
1,486,839
11,621
33,083
42,519
6,038
(Loss) on sales of capital assets
(26,999)
-
-
(100,265)
(2,663)
(475)
-
(1,909)
Transfers
(22,120
(2,102,405
(14,715
148,424
22,120
2,102,405
14,715
(148,424
Total General Revenues
$ $ 12,542,061
$ 10,839,053
$ 12,696,918
$ 12,648,740
$
$ 197,983
$ 2,453,152
$ 404,783
$ 144,098
Total Revenues
$ $ 14,694,956
$ 13,441,501
$ 17,235,683
$ 15,532,160
$
$ 8,811,918
$ 11,808,625
$ 8,609,652
$ 7,804,957
General Government
S 3,756,371
S
S -
$
$ 3,187,844
$ 3,069,307
$ 3,107,732
Public Safety
5,307,214
4,733,832
4,436,137
3,677,876
-
-
-
-
Highways and Streets
2,551,235
2,021,108
2,335,596
1,673,231
-
-
-
-
Culture and Recreation
2,303,144
2,063,918
2,079,553
2,751,432
-
-
-
-
Interest on Long -Term Debt
373,223
385,042
437,685
401,155
-
-
-
-
Water
-
-
-
-
3,153,158
3,150,421
2,733,439
3,028,249
Sewer
5,882,350
5,357,459
5,113,296
5,040,183
Total Expenses
S $ 14,291,187
S 12,391,744
S 12,358,278
$ 11,611,426
$
$ 9,035,508
$ 8,507,880
$ 7,846,735
$ 8,068,432
Increase (Decrease) in Net Assets
403,769
1,049,757
4,877,405
3,920,734
(223,590)
3,282,745
762,917
(263,875)
Prior Period Adjus"ent
56,659
32,164
-
-
-
795,001
-
-
Net Assets - July 1
62,906,118
61,824,197
56,946,792
53,026,058
34,565,317
30,487,571
29,722,717
29,986,592
Total Net Assets
$ 0 $ 63,366,546
$ 62,906,118
$ 61,824,197
$ 56,946,792
$ 0
$ 34,341,727
$ 34,565,317
$ 30,485,634
$ 29,722,717
NOTE: The Statement of Revenues, Expenses and Changes in Net Assets presents information showing how the City's net assets changed during a given Fiscal Year. All changes in net assets are
reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Revenues and expenses are reported in this statement for some items
that will result in cash flows in future periods, such as uncollected taxes and earned, but unused, vacation leave.
Source: City of Woodburn - Audited Financial Statements.
22
87
Budgetary Process
The City prepares an annual budget in accordance with Oregon Local Budget Law (ORS Chapter 294) which
establishes standard procedures for all budget functions for Oregon local governments. Under the applicable
provisions, there must be public participation in the budget process and the adopted budget must be balanced.
The City's administrative staff evaluates the budget requests of the various departments of the City to
determine the funding levels of the operating programs. The budget is presented to the public through public
hearings held by a budget committee consisting of City Council members and lay members. After giving due
consideration to the input received from the citizens, the City Council adopts the budget, authorizes the levying
of taxes and sets appropriations. The budget must be adopted no later than June 30 of each Fiscal Year.
The budget may be amended during the applicable Fiscal Year through the adoption of a supplemental budget.
Supplemental budgets may be adopted by the Board pursuant to ORS 294.480.
General Fund Adopted Budget
(Fiscal Years Ended June 30)
Property Taxes
$ 8,216,943
$
8,305,561
$ 8,326,000
$
8,485,000
Licenses and Permits
498,928
468,849
605,116
639,193
Franchise Fees
1,015,997
1,060,617
1,061,000
1,035,800
Intergovernmental
2,256,772
2,683,523
3,555,398
2,478,987
Fines and Forfeits
563,395
744,280
508,500
588,250
Charges for goods and services
10,231,202
9,871,203
10,424,664
10,733,055
Other Financing Sources
577,749
706,176
5,206,864
3,445,441
Misc
3,847,864
2,417,984
2,067,077
2,067,523
Transfers In
1,992,742
1,373,259
1,741,109
1,931,677
Beginning Fund Balance
25,887,290
25,504,574
20,923,091
17,724,323
Total Resources
$55,088,882
$
53,136,026
$54,418,819
$
49,129,249
Labor and Benefits
$ 12,119,880
$
11,607,108
$ 13,360,475
$
13,558,093
Supplies and Services
7,1 20,700
8,156,299
10,586,1 53
10,581,814
Capital Outlay
4,190,888
5,501,537
14,380,573
8,333,951
Transfers Out
1,992,743
1,373,259
2,493,042
2,062,449
Debt Service
4,294,219
4,1 17,709
4,257,356
4,248,068
Continuing & Unappropriated Fund Balance
0
73,000
9,341,220
10,344,874
Ending Balance
25,370,453
22,307,1 15
0
0
Total Expenditures
$55,088,883
$
53,136,027
$54,418,819
$
49,129,249
Source: City of Woodburn — 2011 -2012 Adopted Budget
Investments
ORS 294.035 authorizes Oregon municipalities to invest in obligations, ranging from U.S. Treasury obligations
and Agency securities to municipal obligations, bankers' acceptances, commercial paper, certificates of deposit,
corporate debt and guaranteed investment contracts, all subject to certain size and maturity limitations. No
municipality may have investments with maturities in excess of 18 months without adopting a written
investment policy which has been reviewed and approved by the Oregon Short Term Fund Board. ORS 294.052
authorizes Oregon municipalities to invest proceeds of bonds or certificates of participation and amounts held in
a fund or account for such bonds or certificates of participation under investment agreements if the
agreements: (i) produce a guaranteed rate of return; (ii) are fully collateralized by direct obligations of, or
obligations guaranteed by, the United States; and (iii) require that the collateral be held by the municipality, an
agent of the municipality or a third -party safekeeping agent.
23
Municipalities are also authorized to invest approximately $43.1 million (adjusted for inflation) in the Local
Government Investment Pool of the Oregon Short -Term Fund, which is managed by the State Treasurer's office.
Such investments are managed in accordance with the "prudent person rule" (ORS 293.726) and administrative
regulations of the State Treasurer which may change from time to time. Eligible investments presently include
all of those listed above, as well as repurchase agreements and reverse repurchase agreements. A listing of
investments held by the Oregon Short -Term Fund is available on the Oregon State Treasury website under
"Other OSTF Reports — OSTF Detailed Monthly Reports" at
www.ost.state.or.us/about/boards/OSTF/About.htm (1)
Pension System
General. Substantially all City employees after six full months of employment are participants in one of three
retirement pension benefit programs under the State of Oregon Public Employees Retirement System ( "PERS" or
the "System ") — the Tier 1 and Tier 2 pension programs (the "T1 /T2 Pension Programs ") or the Oregon Public
Service Retirement Plan ( "OPSRP ").
Employees hired before August 29, 2003 participate in the T1 /T2 Pension Programs which are based on a
defined benefit model that provide retirement and disability benefits, annual cost -of- living adjustments, and
death benefits to members and their beneficiaries. Different benefit structures apply to participants depending
on their date of hire.
Employees hired on or after August 29, 2003 participate in the OPSRP unless membership was previously
established in the T1 /T2 Pension Programs. OPSRP is a hybrid defined contribution /defined benefit pension plan
with two components. Employer contributions fund the defined benefit program and employee contributions
fund individual retirement accounts under the separate defined contribution program.
Actuarial Valuation. Oregon statutes require an actuarial valuation of the System at least once every two years.
Based on the biennial actuarial valuations as of December 31 of odd - numbered years, such as 2007 and 2009, the
Public Employees Retirement Board ( "PERB ") establishes the contribution rates that employers will pay to fund the
operations of T1 /T2 Pension Programs, OPSRP and the PERS- sponsored Retirement Health Insurance Account
program ( "RHIA ") (See "Other Post - Employment Benefits" below). Actuarial valuations have been performed
annually as of December 31 of each year, with the valuations as of December 31 of even - numbered years (such as
2008) used for advisory purposes only. Actuarial valuations are performed for the entire System (the "System
Valuation "), and for each participating employer, including the City. Valuations are released approximately one
year after the valuation date. PERS' current actuary is Mercer (US), Inc.
Current employer contribution rates are based on the December 31, 2009 actuarial valuation (the "2009
Valuation ").
Valuation Rates Effective
December 31, 2007 July 1, 2009— June 30, 2011
December 31, 2008 Advisory only
December 31, 2009 July 1, 201 1 — June 30, 2013
Employer Assets, Liabilities, and Unfunded Actuarial Liabilities. An employer's unfunded actuarial liability
( "UAL ") is the excess of the actuarially determined present value of the employer's benefit obligations to
employees over the existing actuarially determined assets available to pay those benefits.
(1) This inactive textual reference to the website is not a hyperlink and the website, by such reference, is not incorporated herein.
24
For the T1 /T2 Pension Programs, the City is pooled with the State and Oregon local government and community
college public employers (the "State and Local Government Rate Pool" or "SLGRP "). The City's portion of the
SLGRP's assets and liabilities is based on the City's proportionate share of the SLGRP's pooled payroll (the "City
Allocated T1 /T2 UAL "). Changes in the City's relative growth in payroll will cause the City Allocated T1 /T2 UAL to
shift. The City Allocated T1 /T2 UAL may increase if other pool participants fail to pay their full employee
contributions.
OPSRP's assets and liabilities are pooled on a program -wide basis. These assets and liabilities are not tracked or
calculated on an employer basis. The City's allocated share of OPSRP's assets and liabilities is based on the City's
proportionate share of OPSRP's pooled payroll (the "City Allocated OPSRP UAL "). Changes in the City's relative
growth in payroll will cause the City Allocated OPSRP UAL to shift.
The City's net unfunded pension UAL is the total of the City Allocated T1 /T2 UAL, and City Allocated OPSRP UAL.
The City's net unfunded pension UAL as of the 2007 Valuation and 2009 Valuation is shown in the following
table.
City of Woodburn
Net Unfunded Pension Actuarial Accrued Liabilitv (Surol
Allocated pooled SLGRP T1 /T2 UAL
Allocated pre -SLGRP pooled liability /(surplus)
Transition liability /(surplus)
Allocated pooled OPSRP UAL
Net unfunded pension actuarial accrued liabili
Source: City 2009 Valuation and City 2007 Valuation
$ 11, 017, 883
(1,748,119)
(1,812,151)
86,312
7,543,925
$ 368,558
(1,833,024)
(1,892,469)
(70, 212
( 3,427,147)
The funded status of PERS and of the City as reported by Mercer, will change over time depending on the
market performance of the securities that the Oregon Public Employees' Retirement Fund ( "OPERF ") has
invested, future changes in compensation and benefits of covered employees, demographic characteristics of
members and methodologies and assumptions used by the actuary in estimating the assets and liabilities of
PERS.
Significant actuarial assumptions and methods used in the valuations included: (a) Projected Unit Credit
actuarial cost method, (b) asset valuation method based on market value, (c) rate of return on the investment of
present and future assets of 8 %, (d) payroll growth rate of 3.75 %, (e) consumer price inflation of 2.75% per year,
and (f) UAL amortization method of a level percentage of payroll over 21 years (fixed) for the T1 /T2 Pension
Programs and 16 years (fixed) for OPSRP.
Employer Contribution Rates. The City's contribution rates are based on the current and projected cost of benefits
and the anticipated level of funding available from the OPERF, including anticipated investment performance of
the fund. Contribution rates are subject to future adjustment based on factors such as the result of subsequent
actuarial valuations and changes in benefits resulting from legislative modifications. Employees are required to
contribute 6 percent of their annual salary to the respective programs. Employers are allowed to pay the employee
contribution I addition to the required employer's contribution. The City has elected to make the employee
contribution for its employees.
Contribution Rate Collar. In January 2010 the PERS Board adopted a revised implementation of the rate collar
limiting increases in employer contribution rates from biennium to biennium (the "Rate Collar "). Under normal
25
conditions, the Rate Collar is the greatest of three percent of payroll or 20 percent of the current base. If the
funded status of the SLGRP is below 80 percent, the Rate Collar increases by an additional 0.3 percent for every
percentage point under the 80 percent funded level until the aggregate rate collar reaches six percent at the 70
percent funded level. The 2009 System Valuation concluded that the SLGRP funded status was 77 percent,
resulting in a rate collar of 3.9 percent. The rate collar limits increases in employer contribution rates before rate
reductions from side accounts are deducted, and does not cover charges associated with RHIA and RHIPA.
City Contribution Rates. The City's current contribution rates are based on the 2009 Valuation and are effective
through June 30, 2013. The following table shows the City's current rates effective beginning July 1, 2011 (2009
Valuation) and the previous rates from the City's 2007 Valuation:
Employer Contribution Rates - City of Woodburn
(1) Contribution rates to fund RHIA benefits are included in the total City employer contribution rate, but are not a pension cost.
Source: 2007 and 2009 Valuations.
Other Post - Employment Benefits
Retirement Health Insurance Account. PERS retirees who receive benefits through the Tier 1 and Tier 2 plans
and are enrolled in certain PERS administered health insurance programs, may receive a subsidy towards the
payment of health insurance premiums. Under ORS 238.420, retirees may receive a subsidy for Medicare
supplemental health insurance of up to $60 per month towards the cost of their health insurance premium
under the RHIA plan. The RHIA program's assets and liabilities are pooled on a system -wide basis and are not
tracked or calculated on an employer basis. According to the 2009 System Valuation, this program had a UAL of
approximately $297 million. The City's allocated share of the RHIA program's assets and liabilities is based on
the City's proportionate share of the program's pooled payroll. According to the City's 2009 Valuation, the City's
allocated share of the RHIA program's UAL is $284,574.
GASB 45 requires the City to determine the extent of its liabilities for post employment benefits and record the
liability in its financial statements on an actuarial basis. This includes the requirement under ORS 243.303 of
offering the same healthcare benefits for current City employees to all retirees and their dependents until such
time as the retirees are eligible for Medicare. GASB 45 refers to this as an "implicit subsidy" and requires that
the corresponding liability be determined and reported. The City implemented this pronouncement for the
fiscal year ended June 30, 2010 as required for phase 3 governments.
The City's implementation of this pronouncement included the hiring of an actuary to determine any post
employment benefit ( "OPEB ") liabilities. [CITY TO PROVIDE UPDATED INFORMATION ON OPEBs]
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Current Rates (2011-2013)
Previous Rates (2009-2011)
DPW
•
•
amp
Normal Cost Rate
9.92%
7.79%
15.36%
7.21%
4.91%
13.05%
UAL Rate
6.10
6.10
6.10
4.79
4.79
4.79
OPSRP UAL Rate
0.08
0.08
0.08
(0.08)
(0.08)
(0.08)
Pre - SLGRP pooled liability rate
(1.70)
(1.70)
(1.70)
(1.77)
(1.77)
(1.77)
Transition liability/(surplus) rate
(1.76)
(1.76)
(1.76)
(1.83)
(1.83)
(1.83)
Net Pension Contribution Rate
12.64%
10.51%
18.08%
8.32%
6.02%
14.16%
Retiree Healthcare Rate (1)
0.59%
0.59%
0.59%
0.29%
0.29%
0.29%
Total Net Contribution Rate
13.23%
11.10%
18.67%
8.61%
6.31%
14.45%
(1) Contribution rates to fund RHIA benefits are included in the total City employer contribution rate, but are not a pension cost.
Source: 2007 and 2009 Valuations.
Other Post - Employment Benefits
Retirement Health Insurance Account. PERS retirees who receive benefits through the Tier 1 and Tier 2 plans
and are enrolled in certain PERS administered health insurance programs, may receive a subsidy towards the
payment of health insurance premiums. Under ORS 238.420, retirees may receive a subsidy for Medicare
supplemental health insurance of up to $60 per month towards the cost of their health insurance premium
under the RHIA plan. The RHIA program's assets and liabilities are pooled on a system -wide basis and are not
tracked or calculated on an employer basis. According to the 2009 System Valuation, this program had a UAL of
approximately $297 million. The City's allocated share of the RHIA program's assets and liabilities is based on
the City's proportionate share of the program's pooled payroll. According to the City's 2009 Valuation, the City's
allocated share of the RHIA program's UAL is $284,574.
GASB 45 requires the City to determine the extent of its liabilities for post employment benefits and record the
liability in its financial statements on an actuarial basis. This includes the requirement under ORS 243.303 of
offering the same healthcare benefits for current City employees to all retirees and their dependents until such
time as the retirees are eligible for Medicare. GASB 45 refers to this as an "implicit subsidy" and requires that
the corresponding liability be determined and reported. The City implemented this pronouncement for the
fiscal year ended June 30, 2010 as required for phase 3 governments.
The City's implementation of this pronouncement included the hiring of an actuary to determine any post
employment benefit ( "OPEB ") liabilities. [CITY TO PROVIDE UPDATED INFORMATION ON OPEBs]
26
91
Risk Management
The City is exposed to various risks of loss. A description of the risks is provided in the City's audited financial
statements. The audited financial statement for Fiscal Year 2010 is attached hereto as Appendix D.
THE INITIATIVE AND REFERENDUM PROCESS
The Oregon Constitution, Article IV, Section 1, reserves to the people of the State the initiative and referendum
power pursuant to which measures designed to amend the Oregon Constitution or enact legislation can be
placed on the statewide general election ballot for consideration by the voters.
Pursuant to ORS 250.125, a five - member Committee composed of the Secretary of State, the State Treasurer,
the Director of the Department of Revenue, the Director of the Department of Administrative Services, and a
local government representative must prepare an estimate of the direct financial impact of each measure
( "Financial Estimate Statements ") to be printed in the voters' pamphlet and on the ballot.
Referendum
"Referendum" generally means measures that have been passed by a legislative body, such as the Legislative
Assembly or the governing body of a district, county or other political subdivision and referred to the electors by
the legislative body, or by petition prior to the measure's effective date.
In Oregon, both houses of the Legislative Assembly must vote to refer a statute or constitutional amendment for
a popular vote. Such referrals cannot be vetoed by the governor. Any change to the Oregon Constitution
passed by the Legislative Assembly requires referral to voters. In the case of a referendum by petition,
proponents of the referendum must obtain a specified number of signatures from qualified voters. The required
number of signatures is equal to four percent of the votes cast for all candidates for governor at the preceding
gubernatorial election.
The 2007 Legislative Assembly referred nine measures to voters. The measures appeared on the ballot at the
November 6, 2007 special election, May 20, 2008 primary election and November 4, 2008 general election. Eight
of the nine measures were approved. One of the measures approved at the November 4, 2008 general election
was Measure 56, a constitutional change providing that May and November property tax elections are decided
by a simple majority of voters casting a ballot. Another measure that was approved at the November 4, 2008
general election was Measure 57, a statutory change to increase sentences for drug trafficking, theft against
elderly and specified repeat property and identity theft crimes, requiring addiction treatment for certain
offenders.
The Financial Estimate Statement for Measure 57 estimates the measure would require additional spending of
approximately $9 million in the first year, $74 million in the second year, $79 million in the third year, $106
million in the fourth year and $143 million annually thereafter. The State may also need to borrow an estimated
$314 million from 2010 to 2017 to build new prison space associated with Measure 57..
Initiatives
"Initiative" generally means a new measure placed before the voters as a result of a petition circulated by one or
more private citizens.
Any person may file a proposed initiative with the Oregon Secretary of State's office. The Oregon Attorney
General is required by law to draft a proposed ballot title for the initiative. Public comment on the draft ballot
title is then solicited by the Secretary of State. After considering any public comments submitted, the Attorney
General will either certify the draft ballot title or revise the draft ballot title. Any elector that submitted written
27
92
comments who is dissatisfied with the ballot title certified by the Attorney General may petition the Oregon
Supreme Court seeking a revision of the certified ballot title.
Once the ballot title has been certified and the Secretary of State has authorized the petitioners, the proponents
of the initiative may start gathering initiative petition signatures from qualified voters. The number of
signatures required is determined by a fixed percentage of the votes cast for all candidates for governor at the
preceding gubernatorial election. The signature requirements are eight percent for a constitutional measure
(110,358 signatures for November 2010) and six percent for a statutory initiative (82,769 signatures for
November 2010).
The initiative petition must be filed with the Secretary of State not less than four months prior to the general
election at which the proposed measure is to be voted upon. As a practical matter, proponents of an initiative
have approximately two years in which to gather the necessary number of signatures. State law permits
persons circulating initiative petitions to pay money to persons obtaining signatures for the petition. If the
person obtaining signatures is being paid, the signature sheet must contain a notice of such payment.
Historical Initiative Petitions. The number of initiatives that have been approved in general elections since 1998
are as follows:
Historical Initiative Petitions
2010
Number o'f
4
2
2008
8
0
2006
10
3
2004
6
2
2002
7
3
2000
18
4
1998
10
6
NOTE: The Secretary of State posts a listing of initiatives on its web site: www.egov.sos.state.or.us
Source: Elections Division, Oregon Secretary of State, Initiative, Referendum and Referral Search, Elections Division.
Land Use Measures. On November 6, 2007, Oregon voters approved Measure 49 ( "Measure 49 "), which
modifies a previous measure approved by the voters in 2004 ( "Measure 37 "). Measure 37 entitled landowners
to compensation for reduction in or release from a land use regulation when the land use regulation restricts
the use of the property and reduces its market value if it was enacted after the owner or a family member
purchased the property. Property owners seeking compensation or release from regulations under both
Measure 49 and Measure 37 must file a claim with the governmental entity which enacted or enforced the
regulation.
For claims filed before June 28, 2007, Measure 49 replaced the remedies of Measure 37 with an approval for
claimants to establish a specific number of home sites as a form of compensation.
All claims filed after June 28, 2007 are treated as Measure 49 claims. Measure 49 claims may only be filed for
regulations enacted after January 1, 2007, and Measure 49 claims may only be filed for land use regulations that
limit residential uses of property or restrict farming or forest practices. Under Measure 49, claimants must
demonstrate the reduction in value of the property, and may only be exempted from regulation to the extent
necessary to allow additional residential development of a value comparable to the value lost as a result of the
regulation. The City does not have any Measure 49 outstanding claims.
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93
City Charter
In addition to statutory and constitutional changes by the Legislative Assembly and the initiative and
referendum process, the independent basis of legislative authority has been granted to cities in Oregon by
municipal charters. A copy of the City Charter is available from the City upon request.
LEGAL MATTERS AND LITIGATION
Legal matters incident to the authorization, issuance and sale of the Bonds by the District are subject to the
approving legal opinion of K &L Gates LLP, Bond Counsel to the District ( "Bond Counsel "), substantially in the
form attached hereto as Appendix C. Bond Counsel has reviewed this document only to confirm that the
portions of it describing the Bonds and the authority to issue them conform to Bonds and the applicable laws
under which they are issued.
Litigation
There is no litigation pending questioning the validity of the Bonds nor the power and authority of the District to
issue the Bonds. There is no litigation pending which would materially affect the finances of the District or affect
the District's ability to meet debt service requirements on the Bonds.
Under Oregon law local public bodies, such as the District, are subject to the following limits on liability. The
State of Oregon is subject to different limits.
Personal Injury and Death Claim. The liability of a local public body and its officers, employees and agents acting
within the scope of their employment or duties, to any single claimant for covered personal injury or death
claims (and not property claims) arising out of a single accident or occurrence may not exceed $500,000, for
causes of action arising on or after July 1, 2009, and before July 1, 2010. From July 1, 2010 through June 30,
2015, this cap increases incrementally to $666,700. The liability limits to all claimants for covered personal injury
or death claims (and not property claims) arising from a single accident or occurrence increase from $1 million,
for causes of action arising on or after July 1, 2009, and before July 1, 2010, incrementally to $1,333,300, for
causes of action arising on or after July 1, 2014, and before July 1, 2015.
For causes of action arising on or after July 1, 2015, the liability limits for both a single claimant and all claimants
will be adjusted based on a determination by a State Court Administrator of the percentage increase or decrease
in the cost of living for the previous calendar year as provided in the statutory formula. The adjustment may not
exceed 3% for any year.
Property Damage or Destruction Claim. The liability of a public body and its officers, employees and agents
acting within the scope of their employment or duties, for covered claims for damage and destruction of
property that arise from causes of action arising on or after July 1, 2009 are as follows: (a) $100,000, adjusted as
described below, to any single claimant, and (b) $500,000, adjusted as described below, to all claimants.
Beginning in 2010, these liability limits shall be adjusted based on a determination by a State Court
Administrator of the percentage increase or decrease in the cost of living for the previous calendar year as
provided in the statutory formula. The adjustment may not exceed 3% for any year.
TAX MATTERS
Tax Exemption
In the opinion of Bond Counsel, interest on the Bonds is excludable from gross income for federal income tax
purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on
individuals and corporations; however, interest on the Bonds is included in adjusted current earnings for the
purposes of computing the federal alternative minimum tax imposed on certain corporations.
29
Federal income tax law contains a number of requirements that apply to the Bonds, including investment
restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the use of
proceeds of the Bonds and the facilities refinanced with proceeds of the Bonds and certain other matters. The
City has covenanted to comply with all applicable requirements.
Bond Counsel's opinion is subject to the condition that the City comply with the above - referenced covenants
and, in addition, will rely on representations by the City and its advisors with respect to matters solely within the
knowledge of the City and its advisors, respectively, which Bond Counsel has not independently verified. If the
City fails to comply with such covenants or if the foregoing representations are determined to be inaccurate or
incomplete, interest on the Bonds could be included in gross income for federal income tax purposes
retroactively to the date of issuance of the Bonds, regardless of the date on which the event causing taxability
occurs.
Except as expressly stated in this Tax Matters section, Bond Counsel expresses no opinion regarding any other
federal or state income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of
the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of
owning the Bonds, which may include original issue discount, original issue premium, purchase at a market
discount or at a premium, taxation upon sale, redemption or other disposition, the extent to which interest on
the Bonds is included in adjusted current earnings for the purpose of computing federal alternative minimum
tax imposed on certain corporations and various withholding requirements.
Prospective purchasers of the Bonds should be aware that ownership of the Bonds may result in collateral
federal income tax consequences to certain taxpayers, including, without limitation, financial institutions,
property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement
benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch
profits tax, life insurance companies and taxpayers who may be deemed to have incurred or continued
indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Bonds. Bond
Counsel expresses no opinion regarding any collateral tax consequences. Prospective purchasers of the Bonds
should consult their tax advisors regarding collateral federal income tax consequences.
Payments of interest on tax - exempt obligations such as the Bonds are in many cases required to be reported to
the Internal Revenue Service (the "IRS "). Additionally, backup withholding may apply to any such payments
made to any Owner who is not an "exempt recipient" and who fails to provide certain identifying information.
Individuals generally are not exempt recipients, whereas corporations and certain other entities generally are
exempt recipients.
Bond Counsel's opinion is not a guarantee of result and is not binding on the IRS; rather, the opinion represents
Bond Counsel's legal judgment based on its review of existing law and in reliance on the representations made
to Bond Counsel and the City's compliance with its covenants. The IRS has established an ongoing program to
audit tax - exempt obligations to determine whether interest on such obligations is includable in gross income for
federal income tax purposes. Bond Counsel cannot predict whether the IRS will commence an audit of the
Bonds. Holders of the Bonds are advised that, if the IRS does audit the Bonds, under current IRS procedures, at
least during the early stages of an audit, the IRS will treat the City as the taxpayer, and the holders of the Bonds
may have limited rights to participate in the audit. The commencement of an audit could adversely affect the
market value and liquidity of the Bonds until the audit is concluded, regardless of the ultimate outcome.
Oregon State Tax Exemption
In the opinion of Bond Counsel, interest on the Bonds is exempt from Oregon personal income tax under
existing law.
30
95
CONTINUING DISCLOSURE
Securities and Exchange Commission Rule 15c2 -12, as amended (the "Rule ") requires at least annual disclosure
of current financial information and timely disclosure of certain events with respect to the Bonds, if material.
Pursuant to the Rule, the City has agreed to provide to the Municipal Securities Rulemaking Board ( "MSRB "),
audited financial information of the City and certain financial information or operating data. In addition, the City
has agreed to provide to the MSRB, notice of certain events, pursuant to the requirements of Section (b)(5)(i) of
the Rule. The City has complied with its continuing disclosure undertaking.
A copy of the form of the City's Continuing Disclosure Certificate is attached hereto as Appendix B.
RATING
As noted on the cover page of this Official Statement, Moody's Investors Service ( "Moody's "), has assigned its
municipal bond rating of " " to the Bonds. No application was made to any other rating agency for the
purpose of obtaining an additional rating on the Bonds. The rating reflects only the view of Moody's and an
interpretation of such rating may be obtained only from the rating agency furnishing the same. There is no
assurance that such rating will continue for any given period of time or that they will not be revised downward
or withdrawn entirely by the rating agency, if, in the judgment of such agency, circumstances so warrant. Any
such revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds. Any
further explanation of the underlying ratings may be obtained from Moody's.
UNDERWRITING
D. A. Davidson & Co. (the "Underwriter ") has agreed, subject to the terms of a Bond Purchase Agreement, to
purchase the Bonds from the City at a price of % of the par value of the Bonds and will reoffer the Bonds
at a price of % of the par value of the Bonds plus accrued interest, if any. The Bonds are being offered for
sale to the public at the prices shown on the inside cover of this Official Statement. Concessions from the initial
offering price may be allowed to selected dealers and special purchasers. The initial offering prices are subject
to change after the date hereof.
PRELIMINARY OFFICIAL STATEMENT
The City has executed a "deemed final" letter that deems final the Preliminary Official Statement as of its date
pursuant to Securities and Exchange Commission Rule 15c2 -12 (except for the omission of the following
information: offering prices, interest rates, selling compensation, aggregate principal amount, principal amount
per maturity, delivery dates, credit enhancement, if any, ratings, insurance, and other terms of the securities
depending on such matters). The City has also confirmed that the information in this Preliminary Official
Statement, except for matters relating to DTC, the Registrar, and the statement regarding the Underwriter in the
italicized paragraph on the page immediately preceding the table of contents does not contain any untrue
statement of a material fact or omit any statement or information which is necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
31
CONCLUDING STATEMENT
The information contained herein should not be construed as representing all conditions affecting the City or
the Bonds. Additional information may be obtained from the City. The statements relating to the Resolution
are in summarized form, and in all respects are subject to and qualified in their entirety by express reference to
the provisions of such document in its complete form.
The information assembled herein is not to be construed as a contract with Owners of the Bonds.
APPROVAL OF OFFICIAL STATEMENT
The execution and delivery of this Official Statement have been duly authorized by the City.
CITY OF WOODBURN, OREGON
Authorized City Official
32
97
Maugi
Economic and
Demographic Information
98
ECONOMIC AND DEMOGRAPHIC INFORMATION
The following discussion includes descriptive
information obtained from a variety of sources.
The information is presented to provide the reader
with an overview of the City's economy, but is not
intended to be exhaustive or comprehensive.
Local Economic Overview
The City of Woodburn is located in Marion County
(the "County'), approximately 30 miles south of
the City of Portland and 18 miles north of the City
of Salem. The City has a 2010 preliminary
estimated population of 23,150. Historical
population of the City and the County is shown in
the following table.
■ Marion County
Population: State of Oregon, Marion County and the City of Woodburn
2010
3,844,195
320,640
23,150
2009
3,823,465
318,170
23,350
2008
3,791,075
314,865
23,355
2007
3,745,455
311,070
22,875
2006
3,690,505
306,665
22,615
2005
3,631,440
302,135
22,110
2004
3,582,600
298,450
21,790
2003
3,541,500
295,900
21,560
2002
3,504,700
291,000
20,860
2001
3,471,700
288,450
20,410
2000
3,436,750
286,300
20,310
2000 3,421,399 284,838 20,100
1990 2,842,321 228,483 13,404
(1) U.S. Census Count on April 1.
Source: Center far Population Research and Census, Portland State University.
or emplovers in the Citv follow:
Woodburn School District No. 103
AI's Garden Centers & Greenhouses LLC
City of Woodburn
Gem Equipment of Oregon Inc
United Disposal Service Inc
Specialty Polymers Products, Inc
Tree Co Inc
Country Meadows Village LLC
Hopper Brothers Christmas Trees
Oreaon Golf Association
Education
603
Home Improvement Retail
200
City
160
Machinery Manufacturing
150
Solid Waste Services & Recycling
120
Plastic & Fiber Manufacturing
95
Lawn & Garden Supplies
90
Long -Term Care Facility
70
Christmas Tree Sales
70
Snorts & Recreation
63
Source: Selectory Dun & Bradstreet. June 1, 2011
Salem Metropolitan Statistical Area (MSA): Labor Force and Employment
(Includes Marion and Polk Counties)
Civilian Labor Force
Unemployment
Percent of Labor Force
Total Employment
199,534
21,543
10.8%
177,991
198,684
21,187
10.7%
177,497
194,666
12,215
6.3%
182,451
190,512
10,063
5.3%
180,449
188,126
10,384
5.5%
177,742
185,057 184,059
11,723 13,575
6.3% 7.4%
173,334 170,484
4,018
8,972
xx
-4,954
8,172
11,124
xx
-2,952
10,558
10,803
xx
-245
13,627
9,464
xx
4,163
14,625
7,612
xx
7,013
- -
$ 138,203,200 $
36,125
n.a.
n.a.
n.a.
n.a.
2008
137,569,686
00•
Change from
$ 32,565
$ 12,504,027
Total Nonfarm Payroll Employment
009 2008 2007 2006
143,400 145,400 152,200 151,900 149,400
2005 2004
146,300 142,800
2008
-6,800
2007
-6,500
2006
-4,000
2005
-900
200
2,600
Total Private
100,600
102,800
110,000
111,500
109,600
106,300
103,100
-7,200
-8,700
-6,800
-3,500
-300
Natural resources and mining
1,100
1,000
1,200
1,300
1,300
1,300
1,300
-200
-300
-300
-300
-300
Construction
6,500
7,000
9,100
10,100
9,400
8,200
7,200
-2,100
-3,100
-2,400
-1,200
-200
Manufacturing
11,700
12,300
14,000
14,800
15,500
14,900
14,600
-1,700
-2,500
-3,200
-2,600
-2,300
Trade, transportation, and utilities
23,200
23,700
25,500
25,700
25,400
24,800
23,800
-1,800
-2,000
-1,700
-1,100
-100
Information
1,200
1,300
1,400
1,500
1,500
1,500
1,600
-100
-200
-200
-200
-300
Financial activities
6,900
7,100
7,600
7,500
7,400
7,300
7,100
-500
-400
-300
-200
0
Professional and business services
1 1,500
12,000
12,900
13,200
12,600
12,700
12,000
-900
-1,200
-600
-700
0
Educational and health services
21,300
21,000
20,300
19,500
19,000
18,600
18,300
700
1,500
2,000
2,400
2,700
Leisure and hospitality
11,900
12,100
12,700
12,500
12,300
12,100
12,000
-600
-400
-200
0
100
Other services
5,400
5,300
5,400
5,300
5,300
5,100
5,100
-100
0
0
200
200
Government
42,800
42,500
42,200
40,500
39,800
40,000
39,700
300
2,000
2,700
2,500
2,800
Source: State of Oregon Employment Division, Department of Human Resources as of June 1, 2011
Per capita income in the County is lower than that of the State. In 2008, the County represented 7.42 percent of
the State's total personal income.
Source: U.S. Department of Commerce, Bureau of Economic Analysis, February 20, 2010.
Historic building permits for single - family and multi - family housing in the City follow:
City of Woodburn: Building Permit History
MrNumber
State of Oregon
New Multi - Family
Construction
Marion County
Salem, OR (MSA)
Your
Total Personal Per
Income rrr
Capita
Total Personal
rrr
Per Capita.
Total Personal
000
er Capita
2009
$ 138,203,200 $
36,125
n.a.
n.a.
n.a.
n.a.
2008
137,569,686
36,365
$ 10,215,046
$ 32,565
$ 12,504,027
$ 32,016
2007
133,405,144
35,737
9,810,847
31,632
11,985,679
31,126
2006
127,447,708
34,656
9,458,747
30,924
11,514,079
30,406
2005
117,670,842
32,525
8,635,602
28,646
10,512,626
28,299
2004
113,001,122
31,622
8,528,745
28,545
10,405,095
28,391
2003
1 108,506,328
30,564
1 8,168,241
27,546
1 9,958,041
27,473
Source: U.S. Department of Commerce, Bureau of Economic Analysis, February 20, 2010.
Historic building permits for single - family and multi - family housing in the City follow:
City of Woodburn: Building Permit History
MrNumber
New Single Family
New Multi - Family
Construction
2010
Construction Cost
4 $ 749,342
Units Cost
- $ -
2009
8 1,406,860
4 432,106
2008
29 6,337,377
200 7,292,144
2007
91 18,413,061
200 14,490,940
2006
85 15,720,345
- -
2005
68 13,921,060
100
APPENDIX B
Continuing Disclosure
101
APPENDIX C
Form of Legal Opinion
102
APPENDIX D
Audited Financial Statement - 2010
103
APPENDIX E
Book -Entry Only System
104
APPENDIX F
Form of Master Declaration
105
APPENDIX G
Feasibility Report
m.
I
' ,TOODBURN
October 24, 2011
TO: Honorable Mayor and City Council through City Administrator
FROM: Ignacio Palacios, Finance Director
SUBJECT: Wastewater Loans /Bonds Refinance
RECOMMENDATION:
Approve the attached resolution authorizing the issuance of Wastewater
Revenue and Refunding Bonds and a Master Wastewater System Bond
Declaration.
BACKGROUND:
During the May 17, 2011 City Council meeting, staff presented information
regarding the potential savings of consolidating and refinancing the current
Wastewater Bonds and Loans. At that meeting, the City Council authorized the
issuance of Wastewater Bonds and 60 day notice of intent to do so as required
by state statute. It should be noted that no challenges were filed with the City
regarding the issuance of the refinance bonds. Since then staff has worked with
Bond Counsel and a third party consultant (Deb Galardi) to prepare the
required documents and update the Wastewater programs estimated revenues
and expenses for the loan period (those documents - in draft form - are
attached).
DISCUSSION:
As previously reported the City has entered into a Mutual Agreement Order
(MAO) with the Department of Environmental Quality (DEQ) to construct
required improvements to the City's wastewater plant and infrastructure. The
MAO called for approximately $94.5 million in capital improvements.
Additionally, the MAO laid out the plan in three separate phases with the final
phase to be completed approximately 2030. As of September 2011 the City is
near completion of Phase I and has borrowed $19,980,642 to fund the first phase
and as outlined in the table below.
Agenda Item Review: City Administrator _x_ City Attorney _x_ Finance —x-
107
Mayor and City Council
October 24, 2011
Page 2
Loan
- Loan #
Rate
Maturity Amount (as of 9/2011)
DEQ -
No. R9841 1
3.68%
2021
$ 2,122,422
DEQ -
No. R98412
3.70%
2021
16,971,572
DEQ -
No. R98413
1.10%
2015
370,804
DEQ -
No. R98414
1.64%
2034
191,241
OECDD - No. G98002
4.97%
2018
271,486
O EC D D - No. B91202
6.32%
2012
53,117
TOTAL $19,980, 642
Due to current market conditions rates have dropped to 2.68% (per discussion
with DL Davidson rates continue to drop and the final rate will be lower than the
2.68% but cannot be finalized until we get closer to the date of the sale), which
provides for significant savings from the current rate and provides an
advantageous rate for the next phase of the capital project.
The additional loan proceeds, totaling approximately $18,000,000 in additional
debt, would be used to continue the wastewater capital project and begin
construction of Phase II in Spring 2012.
The attached resolution authorizes the sale of the Wastewater Bonds. The
Wastewater Bond Declaration is basically the loan document for the bonds
issued, defines security for the bonds, bond and general covenants, uses of
proceeds, redemption of bonds, reserve requirements, etc. The aggregate
principal amount of the Wastewater Bonds issued to refund the Refundable
Obligations, finance the Projects, fund a debt service reserve and pay costs of
issuing the Wastewater Bonds will not exceed $38,750,000. And finally, the
Preliminary Official Statement discusses the bonds being sold, loan being
refinanced and financial and statistical background of the City of Woodburn.
FINANCIAL IMPACT:
Refinancing the current wastewater loans would achieve a net savings of
approximately $680,000 - these savings would be used to continue the required
capital improvements and offset a portion of those ongoing costs. Additionally,
this would consolidate the existing loans creating fiscal efficiencies.
The Wastewater Program would be issuing approximately $18,000,000 in
additional debt to fund Phase II of the Capital Plan. It should be noted that rate
increases were approved in 2009 to fund the ongoing required debt issuance for
the capital plan.
ATTACHMENTS:
Resolution 2004
Master Wastewater System Revenue Bond Declaration (Draft)
Preliminary Official Statement for Wastewater Bonds (Draft)
108
COUNCIL BILL NO. 2880
RESOLUTION NO. 2004
A RESOLUTION AUTHORIZING THE ISSUANCE OF WASTEWATER
REVENUE AND REFUNDING BONDS AND A MASTER WASTEWATER
SYSTEM BOND DECLARATION.
THE CITY COUNCIL OF THE CITY OF WOODBURN, MARION COUNTY,
OREGON (the "City "), finds:
FINDINGS
(A) The City is authorized by ORS 287A.360 to issue revenue bonds to
refund outstanding revenue bonds, and
(B) The City previously obtained loans from the Oregon Department of
Environmental Quality and the Oregon Economic and Community
Development Department (now, the Oregon Business Development
Department) that were all secured in whole or in part by the net revenues of the
City's wastewater system (collectively, the "Refundable Obligations "), and
(C) The City may be able to achieve debt service savings or a
favorable reorganization of its permanent wastewater system debt structure by
refunding all or any portion of the Refundable Obligations; and
(D) The City desires to finance projects described in the City's
Wastewater Facilities Plan (the "Projects ") and
(E) The City adopts this Resolution to authorize the issuance of its
Wastewater Revenue and Refunding Bonds to achieve debt service savings or
to obtain a favorable reorganization of debt, to finance the Projects, and to
provide the terms under which future parity obligations may be issued.
THE CITY OF WOODBURN RESOLVES AS FOLLOWS:
SECTION 1. BONDS AUTHORIZED
The City hereby authorizes the sale and delivery of its Wastewater
Revenue and Refunding Bonds (the "Wastewater Bonds ") in accordance with
this Resolution and the Master Wastewater System Revenue Bond Declaration
authorized by Section 3 of this Resolution (the "Master Declaration ") to refund
the Refundable Obligations and finance the Projects. The aggregate principal
amount of the Wastewater Bonds issued to refund the Refundable Obligations,
finance the Projects, fund a debt service reserve and pay costs of issuing the
Wastewater Bonds shall not exceed $38,750,000.
Page 1 - Council Bill No. 2880
Resolution No. 2004
109
SECTION 2. SECURITY
The Wastewater Bonds and any obligations issued on a parity with the
Wastewater Bonds shall be special obligations of the City that are payable
solely from the revenues of the City's wastewater system and related amounts
that are pledged as provided in the Master Declaration.
SECTION 3. DESIGNATION OF CITY OFFICIALS
The Board designates the City Administrator or the City Finance Director,
or the designee of the City Administrator or the City Finance Director
(collectively, the "City Official "), to act on behalf of the City and without further
action by the City Council as follows:
a. Provide that the Wastewater Bonds may be issued in one or more
series;
b. Participate in the preparation of, authorize the distribution of and
deem final preliminary and final official statements or other
disclosure documents for each series of the Wastewater Bonds;
C. Appoint and enter into agreements with a paying agent, registrar
and other service providers for each series of the Wastewater
Bonds;
d. Apply for and purchase bond insurance, reserve sureties or other
forms of credit enhancements for each series of the Wastewater
Bonds, and enter into related agreements;
e. Apply for and obtain municipal bond ratings for each series of
Wastewater Bonds;
f. Establish the final principal amount, maturity schedule, interest rates,
sale price, redemption provisions, administrative provisions and
other terms for each series of the Wastewater Bonds, subject to the
limitations of this Resolution;
g. Negotiate the terms of, and execute, a bond purchase agreement
with D.A. Davidson & Company for each series of the Wastewater
Bonds;
h. Enter into an agreement to provide continuing disclosure for each
series of the Wastewater Bonds, as required under federal securities
laws;
Enter into covenants to maintain the excludability of interest on
each series of the Wastewater Bonds from gross income under the
Page 2 - Council Bill No. 2880
Resolution No. 2004
110
Internal Revenue Code of 1986, as amended (the "Code "), and, if
applicable, designate each series of the Wastewater Bonds as
"qualified tax - exempt obligations" under Section 265(b) of the
Code;
Execute and deliver a master declaration which pledges the
revenues of the City's wastewater system, contains covenants
regarding the levels of wastewater system fees and charges that
the City may impose, describes the terms of each series of the
Wastewater Bonds, and the terms under which future obligations
may be issued on parity with the Wastewater Bonds, and
k. Amend any outstanding loans or obligations secured by revenues
of the City's wastewater system in order to subordinate those liens
to the Wastewater Bonds, and
Determine how to apply the proceeds of the Wastewater Bonds;
and
M. Call, defease, and redeem the Refundable Obligations, appoint
escrow agents and verification agents, and take any other actions
and enter into related agreements to defease, call and redeem the
Refundable Obligations; and
n. Issue, sell and deliver each series of the Wastewater Bonds, execute
and deliver any related certificates or documents, and take any
other actions which the City Official determines are reasonably
required to carry out this Resolution.
Approved as to form:
City Attorney Date
Approved:
Kathryn Figley, Mayor
Passed by the Council
Submitted to the Mayor
Approved by the Mayor
Filed in the Office of the Recorder
ATTEST:
Christina Shearer, City Recorder
Page 3 - Council Bill No. 2880
Resolution No. 2004
111
MASTER WASTEWATER SYSTEM
REVENUE BOND DECLARATION
City of Woodburn, Oregon
Wastewater Revenue and Refunding Bonds
Series 2011A (Current Interest Bonds)
And
Series 2011B (Deferred Interest Bonds)
Executed by the City Official of the City of Woodburn, Oregon
As of this day of October, 2011
112
TABLE OF CONTENTS
Section1.
Findings .......................................................................................... ..............................1
Section2.
Definitions ..................................................................................... ...............................
l
Section 3.
Rules of Construction .................................................................... ..............................8
Section 4.
Deposit, Pledge and Use of Gross Revenues ................................. ..............................8
Section 5.
Bond Funds and Accounts ............................................................. ..............................9
Section6.
Rate Covenant ............................................................................... .............................13
Section7.
Parity Bonds .................................................................................. .............................14
Section 8.
Subordinate Obligations ................................................................ .............................15
Section 9.
Separate Utility System ................................................................. .............................16
Section10.
General Covenants ........................................................................ .............................16
Section 11.
Events of Default and Remedies ................................................... .............................18
Section 12.
Amendment of Master Declaration ............................................... .............................21
Section13.
Defeasance .................................................................................... .............................24
Section14.
BEO System .................................................................................. .............................24
Section 15.
Redemption of Bonds .................................................................... .............................26
Section 16.
Authentication, Registration and Transfer .................................... .............................27
Section 17.
The Series 2011 Bonds ................................................................. .............................28
Appendix A:
Form of Wastewater System Revenue Refunding Bond, Series 2011
113
M A S T E R W A S T E W A T E R S Y S T E M B O N D D E C L A R A T I O N
THIS MASTER WASTEWATER SYSTEM BOND DECLARATION is
executed as of August , 2011, by the City Official of the City of Woodburn, Oregon pursuant
to the authority granted to the City Official by City Resolution No. and Resolution
No. to establish the terms under which the City's Wastewater Revenue and Refunding
Bonds, Series 2011A (Current Interest Bonds), Wastewater Revenue and Refunding Bonds,
Series 201113 (Deferred Interest Bonds) and future Parity Bonds may be issued.
Section 1. Findings.
The City finds
1. The City is authorized by ORS 287A.360 to issue revenue bonds to refund outstanding
revenue bonds. The City has adopted Resolution No. and Resolution No. which
authorizes the City to execute this Master Wastewater System Revenue Bond Declaration.
2. The City is issuing its Series 2011 Bonds to refund its Oregon Department of
Environmental Quality (DEQ) Loan #R98411 dated June 26, 1996, its DEQ Loan #R9412 dated
June 25, 1997, its DEQ Loan #R98413 dated , its DEQ Loan #R98414 dated
, and its Oregon Economic and Community Development Department Loan No.
G98002 dated July 21, 1998, to finance [projects described in the City's Wastewater Facilities
Plan /or something more specific], to fund the First Reserve Subaccount, and to pay costs of
issuance of the financing.
3. The City executes this Master Wastewater System Revenue Bond Declaration to specify
the terms under which the City's Wastewater Revenue and Refunding Bonds, Series 2011A
(Current Interest Bonds) and Wastewater Revenue and Refunding Bonds are issued, and to
describe the terms under which future obligations may be issued that are secured by a senior lien
on Net Revenues of the Wastewater System.
Section 2. Definitions.
Unless the context clearly requires otherwise, capitalized terms that are used in this Master
Declaration and are defined in this Section 2 shall have the meanings defined for those terms in
this Section 2.
"Adjusted Net Revenues" means the Net Revenues, adjusted for purposes of Section 7.1.C(ii) as
provided in Section 7.3.
"Annual Bond Debt Service" means in any Fiscal Year the sum of: (1) the amounts of any
transfers to the Bond Reserve Account that are described in Section 5.4.13 and any similar
requirement that is subsequently established for Parity Bonds; plus (2) the amount of principal
and interest required to be paid in that Fiscal Year on all Outstanding Bonds, calculated as
follows:
(a) Interest which is to be paid from Bond Proceeds shall be subtracted;
Page I — Master Wastewater System Bond Declaration
114
(b) Bonds which are subject to scheduled, noncontingent redemption or
noncontingent tender shall be deemed to mature on the dates and in the amounts which are
subject to mandatory redemption or tender, and only the amount scheduled to be outstanding on
the final maturity date shall be treated as maturing on that date; and,
(c) Bonds which are subject to contingent redemption or tender shall be treated as
maturing on their stated maturity dates.
(d) The amount of any Subsidy Payments shall be subtracted from the Bond interest
payments for which the Subsidy Payments are scheduled to be paid.
"Auditor" means a person authorized by the State Board of Accountancy to conduct municipal
audits pursuant to ORS 297.670.
"Base Period" means any twelve consecutive months selected by the City or Qualified Consultant
out of the most recent twenty -four months preceding the delivery of a Series of Parity Bonds.
"BEO" means "book- entry -only" and refers to a system for clearance and settlement of securities
transactions through electronic book -entry changes, which eliminates the need for physical
movement of securities.
"Bond" or "Bonds" means the Series 2011 Bonds and any Parity Bonds.
"Bond Account" means the Bond Account described in Section 5.2 of this Master Declaration.
"Bond Counsel" means a law firm having knowledge and expertise in the field of municipal law
and whose opinions are generally accepted by purchasers of municipal bonds.
"Bond Reserve Account" means the Bond Reserve Account in the Sinking Fund described in
Section 5.3 of this Master Declaration.
"Business Day" means any day except a Saturday, a Sunday, a legal holiday, a day on which the
offices of banks in Oregon or New York are authorized or required by law or executive order to
remain closed, or a day on which the New York Stock Exchange is closed.
"City" means the City of Woodburn, Marion County, Oregon, a municipal corporation of the
State of Oregon.
"City Council" means the City Council of the City, or its successors.
"City Official" means the City Manager or Finance Director or the person designated by either of
those officers to act as City Official under this Master Declaration.
"Closing" means the date on which a Series of Bonds is delivered in exchange for payment.
"Code" means the Internal Revenue Code of 1986, as amended, including the rules and
regulations promulgated thereunder.
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"Construction Fund" means the Wastewater System Construction Fund in the Wastewater Fund,
which the City has created to hold proceeds of bonds and other revenues related to capital
improvements.
"Credit Facility" means a letter of credit, a municipal bond insurance policy, a surety bond,
standby bond purchase agreement or other credit enhancement device which is obtained by the
City to secure Bonds, and which is issued or provided by a Credit Provider whose long -term debt
obligations or claims - paying ability (as appropriate) are rated, at the time the Credit Facility is
issued, in one of the two highest rating categories by a Rating Agency which rated the Bonds
secured by the Credit Facility.
"Credit Provider" means a person or entity providing a Credit Facility.
"DTC" means The Depository Trust Company or any other qualified securities depository
designated by the City as its successor.
"Event of Default" means any event specified in 11.2 of this Master Declaration.
"First Reserve Subaccount Reserve Requirement" means the lesser of. (a) Maximum Annual
Bond Debt Service on all Outstanding Bonds that are secured by the First Reserve Subaccount, or
(b) the amount that was required to be in the First Reserve Subaccount immediately before a
Series of Bonds that is secured by the First Reserve Subaccount is issued, plus the Tax Maximum
for that Series of Bonds. Maximum Annual Bond Debt Service on all Outstanding Bonds that
are secured by the First Reserve Subaccount shall be recalculated as of each First Reserve
Subaccount Valuation Date. On the date of closing of the Series 2011 Bonds, the First Reserve
Subaccount Reserve Requirement is equal to $ , which is the Maximum Annual
Bond Debt Service on the Series 2011 Bonds as of the date of Closing of the Series 2011 Bonds.
"First Reserve Subaccount" means the subaccount of the Bond Reserve Account that secures the
Series 2011 Bonds and is described in Section 5.4.
"First Reserve Subaccount Valuation Date" means the first Business Day of each Fiscal Year,
each date on which amounts are withdrawn from the First Reserve Subaccount, and each Closing
date for a Series of Bonds that is secured by the First Reserve Subaccount.
"Fiscal Year" means the period beginning on July 1 of each year and ending on the next
succeeding June 30, or as otherwise defined by State law.
"Fitch" means Fitch Investors Service, Inc., its successors and assigns.
"Government Obligations" means (i) direct, noncallable obligations of the United States of
America (including obligations issued or held in book -entry form on the books of the Department
of the Treasury and principal -only and interest -only strips that are issued by the U.S. Treasury);
(ii) noncallable obligations the principal of and interest on which are unconditionally guaranteed
by the United States of America.
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"Gross Revenues" means all fees and charges and other revenues that are properly accrued under
generally accepted accounting principles as revenues of the Wastewater System, including
revenues from product sales, system development charges, and interest earnings on Gross
Revenues in the Wastewater Fund. Gross Revenues shall also include transfers out of the Rate
Stabilization Fund. However, the term "Gross Revenues" shall not include:
(a) The interest income or other earnings derived from the investment of the Rebate
Fund or any escrow fund established for the defeasance or refunding of outstanding indebtedness
of the City;
(b) Any gifts, grants, donations or other moneys received by the City from any State
or Federal Agency or other person if such moneys are restricted by law or the grantor to uses
inconsistent with the payment of Bonds;
(c) The proceeds of any borrowing;
(d) The proceeds of any liability or other insurance (excluding business interruption
insurance or other insurance of like nature insuring against the loss of revenues);
(e) The proceeds of any casualty insurance which the City intends to utilize for repair
or replacement of the Wastewater System;
(f) The proceeds derived from the sales of assets pursuant to Section 10.9 of this
Master Declaration;
(g) Any ad valorem or other taxes imposed by the City (except charges or payments
for Wastewater System services which become "taxes" within the meaning of Article XI,
Section l lb of the Oregon Constitution only because they are imposed on property or property
owners);
(h) Any income, fees, charges, receipts, profits or other moneys derived by the City
from its ownership or operation of any Separate Utility System.
"Insurance Policy" means a municipal bond insurance policy issued by an Insurer at the request
of the City guaranteeing the scheduled payment of principal of and interest on the Bonds when
due.
"Insurer" means any person or entity providing an Insurance Policy.
"Interest Payment Date" means any date on which Bond interest is scheduled to be paid, and any
date on which Bonds are called for redemption.
"Master Declaration" means this Master Wastewater System Revenue Refunding Bond
Declaration, including any amendments made pursuant to Section 12.
"Maximum Annual Bond Debt Service" means the greatest amount of Annual Bond Debt
Service that is due in any Fiscal Year, beginning with the Fiscal Year for which the calculation is
made, and ending with the last Fiscal Year in which Outstanding Bonds are scheduled to be paid.
" Moody's" means Moody's Investors Service, a corporation organized and existing under the
laws of the State of Delaware, its successors and their assigns.
"Net Revenues" means the Gross Revenues less the Operating Expenses.
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"Operating Expenses" means all costs which are properly treated as expenses of operating and
maintaining the Wastewater System under generally accepted accounting principles. "Operating
Expenses" shall also include transfers to the Rate Stabilization Fund that are permitted under
Section 4.1.F. However, Operating Expenses do not include:
(a) Any rebates or penalties paid from Gross Revenues under Section 148 of the
Code;
(b) Payments of judgments against the City and payments for the settlement of
litigation;
(c) Depreciation and amortization of property values or losses, and all amounts
treated for accounting purposes as payments for capital expenditures;
(d) Debt service payments, paying agent fees, broker - dealer fees and similar charges
for the maintenance of borrowings;
(e) The expenses of owning, operating or maintaining any Separate Utility System;
(f) Expenditures made from any liability insurance proceeds;
(g) Expenditures made from any casualty insurance proceeds used to pay for costs of
repairing or replacing portions of the Wastewater System;
(h) Expenditures made from grant monies regardless of whether such grant funds are
dedicated to a specific purpose or available for the general operation, maintenance and repair or
replacement of the Wastewater System; and
(i) Expenditures allocable to any other funding source which does not constitute
Gross Revenues of the Wastewater System.
"ORS" means the Oregon Revised Statutes.
"Outstanding" refers to all Bonds except Bonds that have been defeased pursuant to Section 13
of this Master Declaration, and Bonds which have matured and not been presented for payment
(provided sufficient funds to pay those Bonds have been transferred to the Registrar).
"Owner" means a registered owner of a Bond.
"Parity Bond" means any bond issued in accordance with Section 7.
"Payment Date" means a Principal Payment Date or an Interest Payment Date.
"Permitted Investments" means any investments which the City is permitted to make under the
laws of the State.
"Principal Payment Date" means any date on which any Bonds are scheduled to be retired,
whether by virtue of their maturity or by mandatory sinking fund redemption prior to maturity,
and the redemption date of any Bonds which have been called for redemption.
"Project" means any purpose for which Gross Revenues may be spent.
"Qualified Consultant" means an independent engineer, an independent auditor, an independent
financial advisor, or similar independent professional consultant of recognized standing and
having experience and expertise in the area for which such person or firm is retained by the City
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for purposes of performing activities specified in this Master Declaration or any Supplemental
Declaration.
"Rate Stabilization Fund" means the Rate Stabilization Fund described in Section 5.6 of this
Master Declaration.
"Rating Agency" means Fitch, Moody's, S &P, or any other nationally recognized financial rating
Agency which has rated Outstanding Bonds or a Credit Facility at the request of the City.
"Record Date" for the Bonds means the fifteenth day of the month preceding the month in which
each Interest Payment Date occurs, whether or not a Business Day.
"Refundable Obligations" means the City's Oregon Department of Environmental Quality (DEQ)
Loan #R98411 dated June 26, 1996, its DEQ Loan #R9412 dated June 25, 1997, its DEQ Loan
#R98413 dated , its DEQ Loan #R98414 dated , and its Oregon
Economic and Community Development Department Loan No. G98002 dated July 21, 1998.
"Registrar" means the registrar and paying agent for the Bonds, which is U.S. Bank National
Association on the date of this Master Declaration.
"Reserve Credit Event" means the occurrence of any of the following: (a) the withdrawal or
suspension of all Reserve Credit Facility Ratings for a Reserve Credit Facility; or (b) the
downgrading of all Reserve Credit Facility Ratings for a Reserve Credit Facility below
investment grade, or the equivalent rating reasonably determined by the City if rating
terminology changes after October, 2011 (As of October, 2011, a rating below investment grade
by Moody's is a rating below Baa3, and a rating below investment grade by S &P is a rating
below BBB -); or (c) the City properly tenders a request for funds under a Reserve Credit Facility,
and the requested funds are not delivered materially in accordance with the terms of such
Reserve Credit Facility.
"Reserve Credit Facility" means one or more Credit Facilities issued for the purpose of funding,
in lieu of cash, all or any portion of the Reserve Requirement for a subaccount in the Reserve
Account, under which the Credit Provider agrees to unconditionally provide the City with funds
in lieu of withdrawing amounts from that subaccount.
"Reserve Credit Facility Rating" means a long -term debt, financial strength or claims - paying
ability rating assigned by a Rating Agency to: (a) a provider of a Reserve Credit Facility or (b) to
any reinsurer of the obligations of a provider under a Reserve Credit Facility.
"Reserve Requirement" means a set of rules for funding a subaccount in the Bond Reserve
Account. Each Reserve Requirement shall indicate the amount that is required to be credited to
the subaccount, the dates by which that amount must be credited to the subaccount, and the
requirements for restoring amounts to the subaccount if amounts are withdrawn to pay Bonds
that are secured by the subaccount. The Reserve Requirement for the First Reserve Subaccount
is specified in Section 5.4.
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"S &P" means Standard & Poor's Corporation, a corporation organized and existing under the
laws of the State of New York, its successors and their assigns.
"Separate Utility System" means any utility property which is declared by the City Council to
constitute a system which is distinct from the Wastewater System in accordance with Section 9
"Series" refers to all Bonds authorized by a single ordinance or declaration and delivered in
exchange for payment on the same date, regardless of variations in maturity, interest rate or other
provisions, unless the closing documents for the Series provide otherwise.
"Series 2011 Bonds" means the Series 2011A Bonds and the Series 2011B Bonds.
"Series 2011A Bonds" means the City's Wastewater Revenue and Refunding Bonds, Series
2011A (Current Interest Bonds) that are issued pursuant to Section 17 of this Master Declaration.
"Series 2011B Bonds" means the City's Wastewater System Revenue Refunding Bonds, Series
2011B that are issued pursuant to Section 17 of this Master Declaration.
"Sinking Fund" means the fund in the Wastewater Fund which the City has created to provide
for the repayment of bonded debt and the interest on bonded debt.
"State" means the State of Oregon.
"Subordinate Obligations" means obligations having a lien on the Net Revenues which is
subordinate to the lien of the Bonds. Restrictions on Subordinate Obligations are described in
Section 8.
"Subordinate Obligations Account" means the Subordinate Obligations Account of the
Wastewater Fund which is described in Section 5.5.
"Subsidy Payments" means an interest subsidy payment that the City is scheduled to receive from
the United States Treasury for Bonds such as "Build America Bonds."
"Supplemental Declaration" means any declaration, resolution or other document which
supplements or amends this Master Declaration, entered into by the City in compliance with
Section 12.
"Tax Maximum" means, for any Series of Bonds, the lesser of: the greatest amount of principal,
interest and premium, if any, required to be paid in any Fiscal Year on such Series; 125% of
average amount of principal, interest and premium, if any, required to be paid on such Series
during all Fiscal Years in which such Series will be Outstanding, calculated as of the date of
issuance of such Series; or, ten percent of the proceeds of such Series, as "proceeds" is defined
for purposes of Section 148(d) of the Code.
"Valuation Date" means the date or dates on which a subaccount of the Bond Reserve Account
shall be valued as prescribed in the Supplemental Declaration authorizing the establishment of
such subaccount.
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"Wastewater Fund" means the collection of funds and accounts used by the City to hold the
Gross Revenues and the proceeds of Bonds.
"Wastewater System" means all utility property now or hereafter used by the City to provide
wastewater services within or without the corporate limits of the City. However, the Wastewater
System does not include any Separate Utility System.
Section 3. Rules of Construction.
In determining the meaning of the provisions of this Master Declaration, the following rules shall
apply unless the context clearly requires application of a different meaning:
A. References to section numbers shall be construed as references to sections of this Master
Declaration.
B. References to one gender shall include both genders.
C. References to the singular include the plural, and references to the plural include the
singular.
Section 4. Deposit, Pledge and U se of G ross R evenues.
4.1. All Gross Revenues shall be deposited to and maintained in the Wastewater Fund, and
shall be used only as described in this Section as long as any Bonds remain Outstanding.
The City shall apply Gross Revenues in the Wastewater Fund on or before the following
dates for the following purposes in the following order of priority:
A. At any time to pay Operating Expenses which are then due;
B. One Business Day prior to each Payment Date, to transfer Net Revenues and Subsidy
Payments to the Bond Account in an amount sufficient (with amounts available in the
Bond Account) to pay in full all Bond principal, interest and premium, if any, which is
due to be paid on that Payment Date;
C. On the Closing date for a Series of Bonds and on the first day of each month following a
Valuation Date, to transfer Net Revenues to all subaccounts of the Bond Reserve Account
then having a balance that is less than their Reserve Requirements, until the balances in
all subaccounts of the Bond Reserve Account are equal to their Reserve Requirements;
D. On the day on which any rebates or penalties for Bonds are due to be paid to the United
States pursuant to Section 148 of the Code, to pay the amounts due to the United States;
E. On the dates specified in any proceedings authorizing Subordinate Obligations, the City
shall transfer to the Subordinate Obligations Account the Net Revenues required by those
proceedings; and,
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F. On any date, the City may transfer Net Revenues to the Rate Stabilization Fund or spend
Net Revenues for any other lawful purpose, but only if all deposits and payments having a
higher priority under this Section have been made.
4.2. The City hereby pledges the Net Revenues and the Subsidy Payments to the payment of
principal of, premium (if any) and interest on all Bonds. In addition, the City hereby
pledges the Net Revenues available for transfer to any subaccount of the Bond Reserve
Account to pay amounts due under any Reserve Credit Facility securing any subaccount
of the Bond Reserve Account. Pursuant to ORS 287A.310 these pledges of the Net
Revenues hereby made by the City shall be valid and binding from the time of the
adoption of this Master Declaration. The Net Revenues so pledged and hereafter received
by the City shall immediately be subject to the lien of such pledge without any physical
delivery or further act. The lien of these pledges shall be superior to all other claims and
liens except liens and claims for the payment of Operating Expenses. The City covenants
and agrees to take such action as is necessary from time to time to perfect or otherwise
preserve the priority of the pledge.
Section 5. Bond Funds and Accounts
5.1. So long as Bonds are Outstanding, the City shall maintain the Bond Account, the Bond
Reserve Account, the Subordinate Obligations Account and the Rate Stabilization Fund
as discrete accounts in the Wastewater Fund. Unless the City restructures the funds and
accounts in the Wastewater Fund, the Bond Account, the Bond Reserve Account, the
Subordinate Obligations Account and the Rate Stabilization Fund shall be maintained in
the Sinking Fund.
5.2. Bond Account. The Bond Account shall be held by the City. Until all Bonds are paid or
defeased, amounts in the Bond Account shall be used only to pay Bonds. The City shall
transfer sufficient amounts from the Bond Account to the Registrar in time to permit the
Registrar to pay all Bond principal, interest and premium (if any) when due in accordance
with the Bonds. Amounts in the Bond Account shall be invested only in Permitted
Investments. Earnings on the Bond Account shall be credited to the Bond Account.
5.3. Bond Reserve Account.
A. The Bond Reserve Account shall be held by the City and the City may create subaccounts
in the Bond Reserve Account to secure Bonds. When each subaccount is created, the
City shall determine whether the subaccount will secure one or more Series of Bonds. If
the City creates a subaccount in the Bond Reserve Account, the City shall, before it issues
the first Series of Bonds that is secured by that subaccount, establish the Reserve
Requirement for that subaccount and pledge amounts credited to that subaccount to pay
the Bonds that are secured by that subaccount.
B. The City shall not create any subaccounts in the Bond Reserve Account for any purpose
except securing Bonds in accordance with this Master Declaration.
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5.4. The First Reserve Subaccount and the First Reserve Subaccount Reserve
Requirement.
A. The First Reserve Subaccount is hereby created in the Bond Reserve Account. The First
Reserve Subaccount shall secure only the Series 2011 Bonds and any subsequent Series
of Bonds which the City elects to secure with the First Reserve Subaccount. Except as
specifically provided in this Section 5.4, amounts credited to the First Reserve
Subaccount shall be used only to pay principal, interest and premium, if any, on Bonds
that are secured by the First Reserve Subaccount, and only if amounts in the Bond
Account are not sufficient to make those payments. The City hereby irrevocably pledges
the amounts that are credited to the First Reserve Subaccount to pay the Series 2011
Bonds. Pursuant to ORS 287A.310, this pledge shall be valid and binding from the
Closing date of the Series 2011 Bonds. The amounts so pledged and hereafter received by
the City shall immediately be subject to the lien of this pledge without any physical
delivery or further act, and the lien of this pledge shall be superior to all other claims and
liens whatsoever to the fullest extent permitted by ORS 287A.310.
B. At Closing of each Series of Bonds that are secured by the First Reserve Subaccount, the
City shall deposit into the First Reserve Subaccount an amount sufficient to make the
balance in the First Reserve Subaccount equal to the First Reserve Subaccount Reserve
Requirement, calculated as if the Series of Bonds being closed is Outstanding. The
deposit may be made from Gross Revenues pursuant to Section 4.1.C, from Bond
proceeds, or other amounts available to the City, or may be in the form of one or more
Reserve Credit Facilities.
C. The City covenants to maintain a balance in the First Reserve Subaccount which is equal
to the First Reserve Subaccount Reserve Requirement, but solely from deposits of Net
Revenues pursuant to Section 4.1.0 and Closing deposits pursuant to Section 5.4.13. The
balance in the First Reserve Subaccount shall be equal to the sum of the following
amounts, calculated as of the most recent First Reserve Subaccount Valuation Date: the
cash credited to the First Reserve Subaccount; plus the value of Permitted Investments in
the First Reserve Subaccount; plus the value of all Reserve Credit Facilities that are
credited to the First Reserve Subaccount.
D. If the balance in the First Reserve Subaccount on a First Reserve Subaccount Valuation
Date is less than the First Reserve Subaccount Reserve Requirement, the City shall begin
making transfers of Gross Revenues to the First Reserve Subaccount in accordance with
Section 4.1.C.
(i) Transfers to the First Reserve Subaccount shall be applied first, to reimburse
the providers of any Reserve Credit Facilities credited to the First Reserve
Subaccount pro rata for amounts advanced under those Reserve Credit
Facilities; second, to replenish the balance in the First Reserve Subaccount
with cash or Permitted Investments; and third to pay any other amounts owed
under a Reserve Credit Facility that is credited to the First Reserve Subaccount
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(including any interest, fees and penalties associated with any draw under that
Reserve Credit Facility).
(ii) Transfers under Section 4.1.0 shall commence immediately following each
First Reserve Subaccount Valuation Date on which the balance in the First
Reserve Subaccount is less than the First Reserve Subaccount Reserve
Requirement, and shall continue until the balance in the First Reserve
Subaccount is equal to the First Reserve Subaccount Reserve Requirement.
(iii) Transfers required under Section 4.1.0 as a result of a Reserve Credit Event
shall: 1) be made quarterly; 2) be at least equal to 1/8 of the deficiency
discovered on the First Reserve Subaccount Valuation Date on which the
balance in the First Reserve Subaccount is less than the First Reserve
Subaccount Reserve Requirement; 3) begin three months after the First
Reserve Subaccount Valuation Date on which the balance in the First Reserve
Subaccount is less than the First Reserve Subaccount Reserve Requirement;
and 4) shall continue until the balance in the First Reserve Subaccount is equal
to the First Reserve Subaccount Reserve Requirement.
E. If the balance in the First Reserve Subaccount on a First Reserve Subaccount Valuation
Date is greater than the First Reserve Subaccount Reserve Requirement the City may
transfer the excess to the Bond Account or the Subordinate Obligations Account.
F. Moneys in the First Reserve Subaccount may be invested only in Permitted Investments
that mature no later than the final maturity date of the Bonds that are secured by the First
Reserve Subaccount. Earnings on the First Reserve Subaccount shall be credited to that
subaccount whenever the balance in that subaccount is less than the First Reserve
Subaccount Reserve Requirement. Otherwise, earnings shall be credited to the Bond
Account.
G. Permitted Investments in the First Reserve Subaccount shall be valued on each First
Reserve Subaccount Valuation Date in the following manner:
(i) Demand deposits, deposits in the Oregon Short Term Fund and other
investments which mature in two years or less after the First Reserve
Subaccount Valuation Date shall be valued at their face amount, plus accrued
interest;
(ii) Investments which mature more than two years after the First Reserve
Subaccount Valuation Date and for which bid and asked prices are published
on a regular basis in the Wall Street Journal (or, if not there, then in the New
York Times) shall be valued at the average of their most recently published bid
and asked prices;
(iii) Investments which mature more than two years after the First Reserve
Subaccount Valuation Date and for which the bid and asked prices are not
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published on a regular basis in the Wall Street Journal or the New York Times
shall be valued at the average bid price quoted by any two nationally
recognized government securities dealers (selected by the City in its absolute
discretion) at the time making a market in such investments or the bid price
published by a nationally recognized pricing service;
(iv) Reserve Credit Facilities shall be valued at an amount which is available to be
drawn or paid under them;
(v) Certificates of deposit and bankers acceptances which mature more than two
years after the First Reserve Subaccount Valuation Date shall be valued at their
face amount, plus accrued interest; and
(vi) Any investment which is not specified above and which matures more than two
years after the First Reserve Subaccount Valuation Date shall be valued at its
fair market value as reasonably estimated by the City.
H. Each Reserve Credit Facility credited to the First Reserve Subaccount shall be valued on
each First Reserve Subaccount Valuation Date as provided in this subsection. A Reserve
Credit Facility shall be valued at the amount available to be drawn under it as long as no
Reserve Credit Event has occurred and is continuing for that Reserve Credit Facility. If a
Reserve Credit Event has occurred and is continuing for a Reserve Credit Facility, the
Reserve Credit Facility shall have no value.
L Withdrawals from the First Reserve Subaccount shall be made in the following order of
priority:
(i) First, from any cash on deposit in the First Reserve Subaccount;
(ii) Second, from the liquidation proceeds of any Permitted Investments on deposit
in such First Reserve Subaccount; and
(iii) Third, from moneys drawn or paid pro -rata under any Series 2011 Reserve
Credit Facilities.
All amounts on deposit in the First Reserve Subaccount may be applied to the final
payment (whether at maturity or by prior redemption) of Bonds that are secured by the
First Reserve Subaccount. Amounts so applied shall be credited against the amounts the
City is required to transfer into the Bond Account under Section 4.1.B.
K. Amounts in the First Reserve Subaccount may be transferred into escrow to defease
Series 2011 Bonds, but only if the balance remaining in the First Reserve Subaccount
after the transfer is at least equal to the First Reserve Subaccount Reserve Requirement
for the Series 2011 Bonds which remain Outstanding after the defeasance.
5.5. Subordinate Obligations Account. If the City issues Subordinate Obligations, the City
shall create and maintain the Subordinate Obligations Account as long as the Subordinate
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Obligations are outstanding. The Subordinate Obligations Account may be divided into
subaccounts, and the City may establish priorities for funding the subaccounts in the
Subordinate Obligations Subaccount. Net Revenues shall be deposited into the
Subordinate Obligations Account only as permitted by Section 4.1.E. Earnings on the
Subordinate Obligations Account shall be credited as provided in the proceedings
authorizing the Subordinate Obligations.
5.6. Rate Stabilization Fund. The City shall establish and maintain the Rate Stabilization
Fund as long as Bonds are Outstanding. Net Revenues may be transferred to the Rate
Stabilization Fund at the option of the City as permitted by Section 4.1.F. Money in the
Rate Stabilization Fund may be withdrawn at any time and used for any purpose for
which the Gross Revenues may be used. Deposits to the Rate Stabilization Fund increase
Operating Expenses for the Fiscal Year in which the deposit is made. Withdrawals from
the Rate Stabilization Fund increase Gross Revenues for the Fiscal Year in which the
withdrawal is made. The City may adjust deposits to and withdrawals from the Rate
Stabilization Fund for a Fiscal Year at any time prior to the date on which the audit for
that Fiscal Year is finalized. Earnings on the Rate Stabilization Fund shall be credited to
the Wastewater Fund.
Section 6. R ate C ovenant
6.1. The City covenants for the benefit of the Owners that it will establish and maintain rates
and charges in connection with the operation of the Wastewater System which are
sufficient to permit the City to pay all Operating Expenses and all lawful charges against
the Net Revenues, and to make all transfers required by this Master Declaration to the
Bond Account, the Bond Reserve Account and the Subordinate Obligations Account, and
to pay any franchise fees or similar charges imposed by the City on the Wastewater
System or its operations.
6.2. The City covenants for the benefit of the Owners of all Bonds that it shall charge rates
and fees in connection with the operation of the Wastewater System which, when
combined with other Gross Revenues, but without regard to system development charges,
are adequate to generate Net Revenues each Fiscal Year at least equal to one hundred ten
percent (110.00 %) of Annual Bond Debt Service due in that Fiscal Year.
6.3. The City covenants for the benefit of the Owners of all Bonds that it shall charge rates
and fees in connection with the operation of the Wastewater System which, when
combined with other Gross Revenues, are adequate to generate Net Revenues each Fiscal
Year at least equal to one hundred twenty -five percent (125.00 %) of Annual Bond Debt
Service due in that Fiscal Year.
6.4. The City shall determine whether it complied with Sections 6.2 and 6.3 for each Fiscal
Year not later than sixty (60) days after the beginning of the subsequent Fiscal Year,
based on the financial information available to the City at that time, and compliance with
Sections 6.2 and 6.3 shall be determined based on that financial information. A failure to
comply with Sections 6.2 and 6.3 shall not constitute an Event of Default if, within 120
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days after the beginning of the subsequent Fiscal Year, the City implements the
recommendations of a Qualified Consultant that is engaged by the City to deliver written
recommendations for a schedule of rates and charges or other actions which the Qualified
Consultant reasonably projects will permit the City to comply with Sections 6.2 and 6.3
for the remainder of the Fiscal Year in which the recommendations are delivered to the
City (with calculations for the partial year made on an annualized basis).
Section 7. Parity Bonds
7.1. The City may issue Parity Bonds to provide funds for any purpose relating to the
Wastewater System, but only if
A. No Event of Default under this Master Declaration or any Supplemental Declaration has
occurred and is continuing;
B. At the time of the issuance of the Parity Bonds there is no deficiency in the Bond
Account, and the balance in the Bond Reserve Account is at least equal to the Reserve
Requirement;
C. There shall have been filed with the City either:
(i) A certificate of the City Official stating that the Net Revenues (adjusted as
provided in Section 7.2) for the Base Period were not less than one hundred
twenty -five percent (125.00 %) of average Annual Bond Debt Service on all
then Outstanding Bonds, calculated as of the date the Parity Bonds are issued
and with the proposed Parity Bonds treated as Outstanding; or
(ii) A certificate or opinion of a Qualified Consultant:
(a) Stating the amount of the Adjusted Net Revenues for each of the five
Fiscal Years after the last Fiscal Year for which interest on the Parity
Bonds is, or is expected to be, capitalized, or, if interest will not be
capitalized, for each of the five Fiscal Years after the proposed Parity
Bonds are issued;
(b) Concluding that the respective amounts of Adjusted Net Revenues in each
of the first four Fiscal Years described in Section 7.1.C(ii)(a) are at least
equal to one hundred twenty -five percent (125.00 %) of the Annual Bond
Debt Service for each of those respective Fiscal Years on all Outstanding
Bonds, with the proposed Parity Bonds treated as Outstanding;
(c) Concluding that the amount of Adjusted Net Revenues in the fifth Fiscal
Year described in Section 7.1.C(ii)(a) is at least equal to one hundred
twenty -five percent (125.00 %) of the average Annual Bond Debt Service,
calculated for the period beginning with that fifth Fiscal Year on all then
Outstanding Bonds, with the proposed Parity Bonds treated as
Outstanding.
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7.2. Net Revenues may be adjusted for purposes of Section 7.1.C(i) by adding any Net
Revenues the City Official calculates the City would have had during the Base Period
because of increases in Wastewater System rates, fees and charges which have been
adopted by the City on or before the date the Parity Bonds are issued.
7.3. Adjusted Net Revenues for purposes of Section 7.1.C(ii) shall be computed by adjusting
the Net Revenues for the Base Period in any of the following ways:
A. If the proposed Parity Bonds are being issued for the purpose of acquiring operating
Wastewater System utility properties having an earnings record, the Qualified Consultant
may estimate the effect on the Net Revenues for the Base Period if the Wastewater
System utility properties had been part of the Wastewater System during the Base Period.
The estimate shall be based on the operating experience and records of the City and any
available financial records relating to the Wastewater System utility properties which will
be acquired;
B. To reflect any changes in rates and charges which the Qualified Consultant determines are
reasonable;
C. To reflect any customers added to the Wastewater System after the beginning of the Base
Period and prior to the date of the Qualified Consultant's certificate; and
D. If extensions of or additions to the Wastewater System are in the process of construction
on the date of the Qualified Consultant's certificate, or if the proceeds of the Bonds being
issued are to be used to acquire or construct extensions of or additions to the Wastewater
System, to reflect any additional Net Revenues not included in the preceding paragraphs
that will be derived from such additions and extensions (after deducting the estimated
increase in operating and maintenance expenses resulting from such additions and
extensions).
7.4. The City may issue Parity Bonds to refund Outstanding Bonds without complying with
Section 7.1 if the refunded Bonds are defeased on the date of delivery of the refunding
Parity Bonds and if the Annual Bond Debt Service on the refunding Parity Bonds does
not exceed the Annual Bond Debt Service on the refunded Bonds in any Fiscal Year in
which the refunding Bonds are Outstanding by more than $5,000.
7.5. All Parity Bonds issued in accordance with this Section 7 shall have a lien on the Net
Revenues which is equal to the lien of all other Outstanding Bonds.
Section 8. Subordinate Obligations
The City may issue Subordinate Obligations only if
8.1. The Subordinate Obligations are payable solely from amounts permitted to be deposited
in the Subordinate Obligations Account pursuant to Section 4.1.E;
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8.2. The Subordinate Obligations state clearly that they are secured by a lien on or pledge of
the Net Revenues which is subordinate to the lien on, and pledge of, the Net Revenues for
the Bonds.
Section 9. Separate Utility System
The City may declare property which the City owns and is part of the Wastewater System (but
has a value of less than five percent of the Wastewater System at the time of the declaration), and
property which the City has not yet acquired but would otherwise become part of the Wastewater
System, to be part of a Separate Utility System. The City may pay costs of acquiring, operating
and maintaining Separate Utility Systems from Net Revenues, but only if there is no deficit in the
Bond Account or the Bond Reserve Account. The City may issue obligations which are secured
by the revenues produced by the Separate Utility System, and may pledge the Separate Utility
System revenues to pay those obligations. In addition, the City may issue Subordinate
Obligations to pay for costs of a Separate Utility System, and may pledge the revenues of the
Separate Utility System to pay the Subordinate Obligations.
Section 10. General Covenants
The City hereby covenants and agrees with the Owners of all Outstanding Bonds as follows:
10.1. The City shall promptly cause the principal, premium, if any, and interest on the Bonds to
be paid as they become due in accordance with the provisions of this Master Declaration
and any Supplemental Declaration.
10.2. The City shall maintain complete books and records relating to the operation of the
Wastewater System and all City funds and accounts in accordance with generally
accepted accounting principles, shall cause such books and records to be audited annually
at the end of each Fiscal Year, and shall have an audit report prepared by the Auditor and
made available for the inspection of Owners.
10.3. The City shall not issue obligations which have a lien on the Net Revenues that is
superior to the lien of the Bonds except for obligations to pay Operating Expenses.
10.4. The City shall promptly deposit the Gross Revenues and other amounts described in this
Master Declaration into the funds and accounts specified in this Master Declaration.
10.5. The City shall work in good faith to cause the Wastewater System to be operated at all
times in a safe, sound, efficient and economic manner in compliance with all health,
safety and environmental laws, regulatory body rules, regulatory body orders and court
orders applicable to the City's operation and ownership of the Wastewater System.
10.6. The City shall maintain the Wastewater System in good repair, working order and
condition.
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10.7. The City shall not enter into any agreement to provide Wastewater System products or
services at a discount from published rate schedules, and that it will not provide free
Wastewater System products or services except in the case of emergencies.
10.8. The City shall at all times maintain with responsible insurers all such insurance on the
Wastewater System as is customarily maintained with respect to works and properties of
like character against accident to, loss of or damage to such works or properties.
A. The net proceeds of insurance against material accident to or material destruction of the
Wastewater System shall be used to repair or rebuild the damaged or destroyed
Wastewater System, and to the extent not so applied, will be applied to the payment or
redemption of the Bonds.
B. The insurance described in Section 10.8 shall be in the form of policies or contracts for
insurance with insurers of good standing and shall be payable to the City, or in the form
of self - insurance by the City. The City shall establish such fund or funds or reserves
which it deems are necessary to provide for its share of any such self - insurance.
10.9. The City shall not, nor shall it permit others to, sell, mortgage, lease or otherwise dispose
of or encumber all or any portion of the Wastewater System except:
A. The City may dispose of all or substantially all of the Wastewater System, only if the City
pays all Bonds or defeases them pursuant to Section 13.
B. Except as provided in Section 10.9.C, the City will not dispose of any part of the
Wastewater System in excess of 5% of the value of the Wastewater System in service
unless prior to such disposition either:
(i) There has been filed with the City a certificate of a Qualified Consultant stating
that such disposition will not impair the ability of the City to comply with the
rate covenants contained in Section 6.1 of this Master Declaration; or
(ii) Provision is made for the payment, redemption or other defeasance of a
principal amount of Bonds equal to the greater of the following amounts:
(a) An amount which will be in the same proportion to the net principal
amount of Bonds then Outstanding (defined as the total principal amount
of Bonds then Outstanding less the amount of cash and investments in the
Sinking Fund) that the Gross Revenues attributable to the part of the
Wastewater System sold or disposed of for the 12 preceding months bears
to the total Gross Revenues for such period; or
(b) An amount which will be in the same proportion to the net principal
amount of Bonds then Outstanding that the book value of the part of the
Wastewater System sold or disposed of bears to the book value of the
Wastewater System immediately prior to such sale or disposition.
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C. The City may dispose of any portion of the Wastewater System that has become
unserviceable, inadequate, obsolete, or unfit to be used or no longer necessary for use in
the operation of the Wastewater System.
D. If the ownership of all or part of the Wastewater System is transferred from the City
through the operation of law, the City shall to the extent authorized by law, reconstruct or
replace such transferred portion using any proceeds of the transfer unless the City Council
reasonably determines that such reconstruction or replacement is not in the best interest of
the City and the Owners, in which case any proceeds shall be used for the payment,
redemption or defeasance of the Bonds.
Section 11. Events of Default and Remedies.
11.1. Continuous Operation Essential. The City Council of the City hereby finds and
determines that the continuous operation of the Wastewater System and the collection,
deposit and disbursement of the Net Revenues in the manner provided in this Master
Declaration and in any Supplemental Declaration are essential to the payment and
security of the Bonds, and the failure or refusal of the City to perform the covenants and
obligations contained in this Master Declaration or any such Supplemental Declaration
will endanger the necessary continuous operation of the Wastewater System and the
application of the Net Revenues to the operation of the Wastewater System and the
payment of the Bonds.
11.2. Events of Default. The following shall constitute "Events of Default ":
A. If the City shall fail to pay any Bond principal or interest when due, either at maturity,
upon exercise of a right of tender, by proceedings for redemption or otherwise;
B. Except as provided in Section 6.4 and 11.2.F, if the City shall default in the observance
and performance of any other of its covenants, conditions and agreements in this Master
Declaration, if such default continues for thirty (30) days after the City receives a written
notice, specifying the Event of Default and demanding the cure of such default, from a
Credit Provider or from the Owners of not less than 20% in aggregate principal amount of
the Bonds Outstanding;
C. If the City shall sell, transfer, assign or convey any properties constituting the Wastewater
System in violation of Section 10.9;
D. If an order, judgment or decree shall be entered by any court of competent jurisdiction:
(i) Appointing a receiver, trustee or liquidator for the City or the whole or any part
of the Wastewater System;
(ii) Approving a petition filed against the City seeking the bankruptcy,
arrangement or reorganization of the City under any applicable law of the
United States or the State; or
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(iii) Assuming custody or control of the City or of the whole or any part of the
Wastewater System under the provisions of any other law for the relief or aid
of debtors and such order, judgment or decree shall not be vacated or set aside
or stayed (or, in case custody or control is assumed by said order, such custody
or control shall not be otherwise terminated) within sixty (60) days from the
date of the entry of such order, judgment or decree; or
E. If the City shall:
(i) Admit in writing its inability to pay its debts generally as they become due;
(ii) File a petition in bankruptcy or seeking a composition of indebtedness under
any state or federal bankruptcy or insolvency law;
(iii) Consent to the appointment of a receiver of the whole or any part of the
Wastewater System; or
(iv) Consent to the assumption by any court of competent jurisdiction under the
provisions of any other law for the relief or aid of debtors of custody or control
of the City or of the whole or any part of the Wastewater System.
F. Exception. It shall not constitute an Event of Default under 11.2.13 if the default cannot
practicably be remedied within thirty (30) days after the City receives notice of the
default, so long as the City promptly commences reasonable action to remedy the default
after the notice is received, and continues reasonable action to remedy the default until
the default is remedied.
G. Remedies. If an Event of Default occurs, any Owner may exercise any remedy available
at law or in equity. However, the Bonds shall not be subject to acceleration or mandatory
redemption upon an Event of Default.
H. Books of City Open to Inspection.
(i) The City covenants that if an Event of Default shall have happened and shall
not have been remedied, the books of record and account of the City and all
other records relating to the Wastewater System shall at all reasonable times be
subject to the inspection and use of any persons holding at least twenty percent
(20 %) of the principal amount of Outstanding Bonds and their respective
agents and attorneys.
(ii) The City covenants that if the Event of Default shall happen and shall not have
been remedied, the City will continue to account, as a trustee of an express
trust, for all Net Revenues and other moneys, securities and funds pledged
under this Master Declaration.
L Appointment of Trustee. Whenever any Event of Default exists, Owners representing
51 percent or more of the Outstanding Bonds may appoint a commercial bank with a
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reported capital and surplus in excess of $50 million as trustee (the "Trustee ") to
represent the interests of said Owners.
Trustee Duties Upon Default.
(i) Upon the occurrence of an Event of Default the Trustee may pursue any other
available remedy at law or in equity to enforce the payment of the principal of,
premium, if any, and interest on the outstanding Bonds, and to enforce any
rights of the Trustee under or with respect to the Master Declaration.
(ii) In addition, upon the occurrence of an Event of Default, and upon the filing of
a suit or other commencement of judicial proceedings to enforce the rights of
the Trustee and of the Owners under the Master Declaration, the Trustee will
be entitled, as a matter of right, to the appointment of a receiver or receivers of
the Net Revenues and other amounts pledged under the Master Declaration,
pending such proceedings, with such powers as the court making such
appointment may confer.
(iii) If an Event of Default has occurred and be continuing and if requested so to do
by the Owners of at least 25% in aggregate principal amount of Outstanding
Bonds and indemnified as provided in the Master Declaration, the Trustee will
be obligated to exercise such one or more of the rights and powers conferred by
this Master Declaration, as the Trustee, being advised by counsel, deems most
expedient in the interest of the Owners.
(iv) If a Trustee has been appointed pursuant to 11.2.1, no Owner of any Bond shall
have the right to institute any suit, action or proceeding at law or in equity, for
any remedy under the Master Declaration, unless:
(a) such Owner has previously given to the Trustee written notice of the
occurrence of an Event of Default;
(b) the Owners of a majority in aggregate principal amount of all the Bonds
then Outstanding have requested the Trustee in writing to exercise its
powers under the Master Declaration;
(c) said Owners have tendered to the Trustee indemnity reasonably
acceptable to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request; and
(d) the Trustee has refused or failed to comply with such request for a period
of 60 days after such written request has been received by the Trustee and
said tender of indemnity is made to the Trustee.
(v) Pursuant to the Master Declaration, if the Trustee takes any judicial or other
action in an Event of Default the Trustee has full power in its direction with
respect to any continuance, discontinuance, withdrawal, compromise,
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settlement or other disposition of such action, unless opposed by the written
request of the Owners of a majority in aggregate principal amount of the
Outstanding Bonds. The Trustee is appointed attorney -in -fact of the Owners
for the purpose of bringing any suit action or proceedings in an Event of
Default.
K. Waivers of Event of Default.
(i) No delay or omission of any Owner or of the Trustee to exercise any right or
power arising upon the happening of an Event of Default shall impair any right
or power or shall be construed to be a waiver of any such Event of Default or
to be an acquiescence therein; and every power and remedy given by this
Section 11 to the Owners and to the Trustee may be exercised from time to
time and as often as may be deemed expedient by the Owners and /or the
Trustee as applicable.
(ii) The owners of not less than fifty percent (50 %) in principal amount of the
affected Bonds that are at the time Outstanding, or their attorneys -in -fact duly
authorized, or the Trustee may, on behalf of the Owners of all of affected
Bonds, waive any past default under this Master Declaration with respect to
such Bonds and its consequences, except a default in the payment of the
principal of, premium, if any, or interest on any of the Bonds. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
L. Remedies Granted in Master Declaration Not Exclusive.
No remedy by the terms of this Master Declaration conferred upon or reserved to the Owners is
intended to be exclusive of any other remedy, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this Master Declaration or
existing at law or in equity or by statute on or after the date of adoption of this Master
Declaration.
Section 12. Amendment of Master Declaration
12.1. This Master Declaration maybe amended by Supplemental Declaration without the
consent of any Owners for any one or more of the following purposes:
A. To cure any ambiguity or formal defect or omission in this Master Declaration,
B. To add to the covenants and agreements of the City in this Master Declaration, other
covenants and agreements to be observed by the City which are not contrary to or
inconsistent with this Master Declaration as theretofore in effect;
C. To authorize issuance of Bonds or Subordinate Obligations;
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D. To modify, amend or supplement this Master Declaration or any Supplemental
Declaration to qualify this Master Declaration under the Trust Indenture Act of 1939, as
amended, or any similar federal statute hereafter in effect or to permit the qualification of
any Bonds for sale under the securities laws of any of the states of the United States of
America;
E. To confirm, as further assurance, any security interest or pledge created under this Master
Declaration or any Supplemental Declaration;
F. To make any change which, in the reasonable judgment of the City, does not materially
and adversely affect the rights of the owners of any Outstanding Bonds;
G. So long as a Credit Facility (other than a Reserve Credit Facility) is in full force and
effect with respect to the Bonds affected by such Supplemental Declaration, to make any
other change which is consented to in writing by the issuer of such Credit Facility other
than any change which:
(i) Would result in a downgrading or withdrawal of the rating then assigned to the
affected Bonds by the Rating Agencies;
(ii) Changes the maturity (except as permitted herein), the Interest Payment Dates,
interest rates, redemption and purchase provisions, and provisions regarding
notices of redemption and purchase applicable to the affected Bonds or
diminishes the security afforded by such Credit Facility;
(iii) Materially and adversely affects the rights and security afforded to the Owners
of any Outstanding Bonds not secured by such Credit Facility; or
H. To modify any of the provisions of this Master Declaration or any Supplemental
Declaration in any other respect whatever, as long as the modification shall take effect
only after all affected Outstanding Bonds cease to be Outstanding.
12.2. This Master Declaration may be amended for any other purpose only upon consent of
Owners of not less than fifty -one percent (51 %) in aggregate principal amount of the
Bonds outstanding; provided, however, that no amendment shall be valid without the
consent of Owners of 100 percent (100 %) of the aggregate principal amount of the Bonds
outstanding which:
A. Extends the maturity of any Bond, reduces the rate of interest upon any Bond, extends the
time of payment of interest on any Bond, reduces the amount of principal payable on any
Bond, or reduces any premium payable on any Bond, without the consent of the affected
Owner; or
B. Reduces the percent of Owners required to approve Supplemental Declarations.
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12.3. For purposes of Section 12.2, and subject to Section 12.4, the initial purchaser of a series
of Bonds may be treated as the Owner of that Series at the time that series of Bonds is
delivered in exchange for payment.
12.4. Except as otherwise expressly provided in a Supplemental Declaration, as long as a
Credit Facility (other than a Reserve Credit Facility) securing all or a portion of any
Outstanding Bonds is in effect, the issuer of such Credit Facility shall be deemed to be the
Owner of the Bonds secured by such Credit Facility:
A. At all times for the purpose of the execution and delivery of a Supplemental Declaration
or of any amendment, change or modification of this Master Declaration or the initiation
by Owners of any action which under this Master Declaration requires the written
approval or consent of or can be initiated by the Owners of at least a majority in principal
amount of the affected Bonds at the time Outstanding; and following an Event of Default
for all other purposes;
B. Notwithstanding the foregoing, the issuer of such Credit Facility shall not be deemed to
be an Owner secured thereby with respect to any such Supplemental Declaration or of any
amendment, change or modification of this Master Declaration which:
(i) Would result in a downgrading or withdrawal of the rating then assigned to the
affected Bonds by the Rating Agencies; or
(ii) Changes the maturity (except as expressly permitted herein), the Interest
Payment Dates, interest rates, redemption and purchase provisions, and
provisions regarding notices of redemption and purchase applicable to the
affected Bonds or diminishes the security afforded by such Credit Facility; or
(iii) Reduces the percentage or otherwise affects the classes of affected Bonds, the
consent of the Owners of which is required to effect any such modification or
amendment.
C. In addition and notwithstanding the foregoing, no issuer of a Credit Facility given as
security for any Bonds shall be entitled to exercise any rights under this Section during
any period where:
(i) The Credit Agreement or Credit Facility to which such Credit Provider is a
party shall not be in full force and effect;
(ii) Such Credit Provider shall have filed a petition or otherwise sought relief under
any federal or state bankruptcy or similar law;
(iii) Such Credit Provider shall, for any reason, have failed or refused to honor a
proper demand for payment under such Credit Facility; or
(iv) An order or decree shall have been entered, with the consent or acquiescence of
such Credit Provider, appointing a receiver or receivers or the assets of the
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Credit Provider, or if such order or decree having been entered without the
consent or acquiescence of such Credit Provider, shall not have been vacated or
discharged or stayed within ninety (90) days after the entry thereof.
D. For purposes of determining the percentage of Owners consenting to, waiving or
otherwise acting with respect to any matter that may arise under this Master Declaration,
the Owners of Bonds which pay interest only at maturity, and mature more than one year
after they are issued shall be treated as Owners of Bonds in an aggregate principal amount
equal to the accreted value of such Bonds as of the date the Registrar sends out notice of
requesting consent, waiver or other action as provided herein.
Section 13. Defeasance
13.1. The City shall be obligated to pay Bonds which are defeased pursuant to this Section
solely from the money and Government Obligations deposited with the escrow agent or
trustee, and the City shall have no further obligation to pay the defeased Bonds from any
source except the amounts deposited in the escrow. Bonds shall be deemed defeased if
the City:
A. irrevocably deposits money or noncallable Government Obligations in escrow with an
independent trustee or escrow agent which are calculated to be sufficient for the payment
of Bonds without reinvestment which are to be defeased; and
B. files with the escrow agent or trustee a report from an independent, certified public
accountant verifying the accuracy of calculations indicating that the money and the
principal and interest to be received from the Government Obligations are sufficient,
without further reinvestment, to pay the defeased Bonds when due; and
C. files with the escrow agent or trustee an opinion of nationally recognized bond counsel
that the proposed defeasance will not cause the interest component of the Bonds to be
includable in gross income under the Code.
Section 14. BE O System
14.1. Unless otherwise provided by a Supplemental Declaration, all Bonds shall be subject to
the BEO System pursuant to the provisions of this Section 14.
14.2. The Bonds shall be initially issued as a BEO security issue with no Bonds being made
available to the Owners upon the execution and delivery of the letter of representations
among the Registrar, DTC and the City. Ownership of the Bonds shall be recorded
through entries on the books of banks and broker - dealer participants and correspondents
that are related to entries on the DTC BEO system. The Bonds shall be initially issued in
the form of separate single fully registered typewritten Bonds for each maturity of the
Bonds (the "Global Bonds ") in substantially the form attached hereto as Appendix A with
such changes as the City Official may approve. Each Global Bond shall be registered in
the name of CEDE & CO. as nominee (the "Nominee ") of DTC (DTC and any other
qualified securities depository designated by the City as a successor to DTC, collectively
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the "Depository ") as the "Registered Owner ", and such Global Bonds shall be lodged
with the Depository until early redemption or maturity of the Bond issue. The Registrar
shall remit payment for the maturing principal and interest on the Bonds to the Owner for
distribution by the Nominee for the benefit of the owners (the `Beneficial Owner" or
"Record Owner ") by recorded entry on the books of the Depository participants and
correspondents. While the Bonds are in BEO form, the Bonds will be available in
denominations of $5,000 or any integral multiple thereof.
14.3. In the event the Depository determines not to continue to act as securities depository for
the Bonds, or the City determines that the Depository shall no longer so act, then the City
will discontinue the BEO system with the Depository. If the City fails to designate
another qualified securities depository to replace the Depository or elects to discontinue
use of a BEO system, the Bonds shall no longer be a BEO issue and the Registrar and the
City shall amend this document to provide for an alternative system of providing notice
of redemption and such other matters as need to be updated for the Bonds that is of
general acceptance in the municipal bond markets.
14.4. While the Bonds are in BEO form, the City and the Registrar shall have no responsibility
or obligation to any participant or correspondent of the Depository or to any Registered
Owner on behalf of which such participants or correspondents act as agent for the Owner
with respect to:
A. The accuracy of the records of the Depository, the Nominee or any participant or
correspondent with respect to any ownership interest in the Bonds;
B. The delivery to any participant or correspondent or any other person, other than an Owner
as shown in the registration books maintained by the Registrar, of any notice with respect
to the Bonds, including any notice of prepayment;
C. The selection by the Depository of the beneficial interest in Bonds to be redeemed prior
to maturity; or
D. The payment to any participant, correspondent, or any other person other than the owner
of the Bonds as shown in the registration books maintained by the Registrar, of any
amount with respect to principal of or interest on the Bonds.
14.5. Notwithstanding the BEO system, the City may treat and consider the Owner in whose
name each Bond is registered in the registration books maintained by the Registrar as the
Owner and absolute owner of such Bond for the purpose of payment of principal and
interest with respect to such Bond, or for the purpose of giving notices of redemption and
other matters with respect to such Bond, or for the purpose of registering transfers with
respect to such Bond, or for all other purposes whatsoever. The City shall pay or cause to
be paid all principal and interest on the Bonds only to or upon the order of the Registered
Owner, as shown in the registration books maintained by the Registrar, or their respective
attorneys duly authorized in writing, and all such payments shall be valid and effective to
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fully satisfy and discharge the City's obligation with respect to payment thereof to the
extent of the sum or sums so paid.
14.6. Upon delivery by the Depository to the City and to the Owner of written notice to the
effect that the Depository has determined to substitute a new nominee in place of the
Nominee, then the word "Nominee" in this Master Declaration shall refer to such new
nominee of the Depository, and upon receipt of such notice, the City shall promptly
deliver a copy thereof to the Registrar. The Depository shall tender the Bonds it holds to
the Registrar for re- registration.
Section 15. Redemption of Bonds
15.1. Unless otherwise provided by a Supplemental Declaration, all Bonds shall be subject to
the redemption terms of this Section 15.
15.2. The City reserves the right to purchase Bonds in the open market.
15.3. If Bonds are subject to mandatory redemption the Registrar shall, without further action
by the City, select the particular Bonds to be redeemed in accordance with the mandatory
redemption schedule, by lot within each maturity, call the selected Bonds, and give notice
of their redemption in accordance with this Section 15.
15.4. If certain maturities of Bonds are subject to both optional and mandatory redemption, the
City may elect to apply any of those Bonds which it has previously optionally redeemed.
In addition, if the City purchases Bonds which are subject to mandatory redemption, the
City may elect to apply against the mandatory redemption requirement any such Bonds
which it has previously purchased. If the City makes such an election, it shall notify the
Registrar not less than sixty days prior to the mandatory redemption date to which the
election applies.
15.5. So long as the BEO- System remains in effect with respect to the Bonds, the Registrar
shall notify the Depository of any early redemption in the time period required by the
Depository but in no event shall the City be required to give more than 30 days notice of
early redemption. The City shall provide such information in connection with an early
redemption as required by the letter of representations submitted to DTC in connection
with the issuance of the Bonds.
15.6. During any period in which the BEO System is not in effect with respect to the Bonds,
unless waived by any Owner of the Bonds to be redeemed, official notice of any
redemption of Bonds shall be given by the Registrar on behalf of the City in the manner
determined under Section 14.3. All such official notices of redemption shall be dated and
shall state:
A. The redemption date;
B. The redemption price;
Page 26 — Master Wastewater System Bond Declaration
139
C. If less than all Outstanding Bonds are to be redeemed, the identification (and, in the case
of partial redemption, the respective principal amounts) of the Bonds to be redeemed;
D. That on the redemption date the redemption price will become due and payable upon each
such Bond or portion thereof called for redemption, and that interest thereon shall cease
to accrue from and after said date; and
E. The place where such Bonds are to be surrendered for payment of the redemption price,
which place of payment shall be the principal office of the Registrar.
15.7. Any notice of optional redemption may state that the optional redemption is conditioned
upon receipt by the Registrar of moneys sufficient to pay the redemption price of the
Bonds to be redeemed or upon the satisfaction of any other condition, and /or that such
notice may be rescinded upon the occurrence of any other event, and any notice so given
may be rescinded at any time before payment of such redemption price if any such
condition so specified is not satisfied or if any such other event occurs. Notice of such
rescission or of the failure of any such condition shall be given by the Registrar to
affected owners of Bonds as promptly as practicable.
15.8. Unless Section 15.7 applies, the City shall deposit with the Registrar, on or before the
redemption date, an amount of money sufficient to pay the redemption price of all the
Bonds or portions of Bonds which are to be redeemed on that date.
15.9. Unless Section 15.7 applies, Bonds which have been called for redemption shall cease to
bear interest on the redemption date.
Section 16. Authentication, Registration and Transfer
16.1. The provisions of this Section 16 apply only if the Bonds cease to be a BEO issue, and
unless otherwise specified in a Supplemental Declaration.
16.2. No Bond shall be entitled to any right or benefit under this Master Declaration unless it
shall have been authenticated by an authorized officer of the Registrar. The Registrar
shall authenticate all Bonds to be delivered at Closing, and shall additionally authenticate
all Bonds properly surrendered for exchange or transfer pursuant to this Master
Declaration.
16.3. All Bonds shall be in registered form. U.S. Bank National Association is hereby
appointed to serve as Registrar for the Bonds. A successor Registrar may be appointed
for the Bonds by ordinance or resolution of the City. The Registrar shall provide notice
to Owners of any change in the Registrar not later than the Bond payment date following
the change in Registrar.
16.4. The ownership of all Bonds shall be entered in the Bond register maintained by the
Registrar and the City and Registrar may treat the person listed as owner in the Bond
register as the owner of the Bond for all purposes.
Page 27 — Master Wastewater System Bond Declaration
16.5. The Registrar shall mail each interest payment on the Interest Payment Date (or the next
Business Day if the Interest Payment Date is not a Business Day) to the name and address
of the Owner, as that name and address appear on the Bond register as of the Record
Date. If payment is so mailed, neither the City nor the Registrar shall have any further
liability to any party for such payment.
16.6. Bonds may be exchanged for an equal principal amount of Bonds of the same maturity
which are in different authorized denominations, and Bonds may be transferred to other
owners if the Owner submits the following to the Registrar:
A. Written instructions for exchange or transfer satisfactory to the Registrar, signed by the
Owner or his attorney in fact and guaranteed or witnessed in a manner satisfactory to the
Registrar; and
B. The Bonds to be exchanged or transferred.
16.7. The Registrar shall not be required to exchange or transfer any Bonds submitted to it
during any period beginning with a Record Date and ending on the next following
payment date; however, such Bonds shall be exchanged or transferred promptly following
the payment date.
16.8. The Registrar shall not be required to exchange or transfer any Bonds which have been
designated for redemption if such Bonds are submitted to it during the fifteen -day period
preceding the designated redemption date.
16.9. For purposes of this Section, Bonds shall be considered submitted to the Registrar on the
date the Registrar actually receives the materials described in Section 16.6.
16.10. The City may alter these provisions regarding registration and transfer by mailing
notification of the altered provisions to all Owners. The altered provisions shall take
effect on the date stated in the notice, which shall not be earlier than 45 days after notice
is mailed.
Section 17. T he Ser ies 2011 Bonds.
17.1. The Series 2011A Bonds
A. Pursuant to the authority of the City Resolution No. and City Resolution No.
and this Master Declaration, the City has issued its Wastewater Revenue
and Refunding Bonds, Series 2011A (Current Interest Bonds), in the aggregate principal
amount of $ . The Series 2011A Bonds shall be Bonds as defined in this
Master Declaration. The Series 2011A Bonds shall bear interest payable on June 1 and
December 1 of each year at the following rates, commencing December 1, 2011, and shall
mature in the following years in the following principal amounts:
Maturity Date Principal Interest CUSIP Number
(June 1) Amount ($) Rate ( %) (Base )
Page 28 — Master Wastewater System Bond Declaration
141
B. The Series 2011A Bonds shall be special obligations of the City, and shall be payable
solely from the Net Revenues and amounts required to be deposited in the Bond Account
and First Reserve Subaccount as required and as provided by this Master Declaration.
C. The Series 2011A Bonds shall be in substantially the form attached as Appendix A and
shall be signed with the facsimile or manual signature of a City Official.
D. The Series 2011A Bonds maturing in years 2012 through 20, inclusive, are not subject
to optional redemption prior to maturity. The Series 2011A Bonds maturing on June
201 and on any date thereafter are subject to redemption at the option of the City prior to
their stated maturity dates at any time on or after June 1, 201 as a whole or in part, and
if in part, with maturities to be selected by the Issuer and by DTC or by lot within a
maturity at a price of par, plus accrued interest, if any, to the date of redemption.
E. Tax - Exempt Status:
(i) The City covenants for the benefit of the Owners of the Series 2011A Bonds to
comply with all provisions of the Code which are required for interest on the
Series 201 IA Bonds to be excluded from gross income for federal taxation
purposes. In determining what actions are required to comply, the City may
rely on an opinion of Bond Counsel. The City makes the following specific
covenants with respect to the Code:
(a) The City will not take any action or omit any action if it would cause the
Series 2011A Bonds to become "arbitrage bonds" under Section 148 of
the Code;
(b) The City shall operate the facilities refinanced with the Series 201 IA
Bonds so that the Series 2011A Bonds do not become private activity
bonds within the meaning of Section 141 of the Code;
Page 29 — Master Wastewater System Bond Declaration
142
(c) The City shall pay, when due, all rebates and penalties with respect to the
Series 2011A Bonds which are required by Section 148(f) of the Code.
(ii) The covenants contained in Section 17.1.E(i) and any covenants in the closing
documents for the Series 2011A Bonds shall constitute contracts with the
owners of the Series 2011A Bonds, and shall be enforceable by them.
(iii) The Series 2011 Bond proceeds shall be applied as follows:
(a)
$ of proceeds of the Series 2011A Bonds required to make
the balance in the Bond Reserve Account equal to the Reserve
Requirement shall be deposited in the Bond Reserve Account.
(b) An amount of proceeds of the Series 2011A Bonds required to redeem or
defease the Refundable Obligations that are being refunded with the
Series 2011A Bonds shall be used to redeem such Refundable Obligations
or deposited with the escrow agent for the Refundable Obligations.
(c) The balance of the Series 2011A Bond proceeds shall be placed in the
Construction Fund, and shall be disbursed only to finance costs incurred
in connection with the issuance of the Series 2011A Bonds.
17.2. The Series 2011B Bonds
A. Pursuant to the authority of the City Resolution No. and City Resolution No.
and this Master Declaration, the City has issued its Wastewater Revenue
and Refunding Bonds, Series 2011B (Deferred Interest Bonds), in the aggregate principal
amount of $ . The Series 2011B Bonds shall be Bonds as defined in this
Master Declaration. The Series 2011B Bonds shall bear interest from the date of
delivery. Interest on the Series 2011B Bonds will be payable only at maturity and will be
compounded semiannually as of each June 1 and December 1, as provided in the
following accreted value table:
[accreted value table to be inserted]
B. The Series 2011B Bonds shall be special obligations of the City, and shall be payable
solely from the Net Revenues and amounts required to be deposited in the Bond Account
and First Reserve Subaccount as required and as provided by this Master Declaration.
C. The Series 2011B Bonds shall be in substantially the form attached as Appendix A and
shall be signed with the facsimile or manual signature of a City Official.
D. The Series 2011B Bonds are not subject to optional redemption prior to maturity.
E. Tax - Exempt Status:
Page 30 — Master Wastewater System Bond Declaration
143
(i) The City covenants for the benefit of the Owners of the Series 2011B Bonds to
comply with all provisions of the Code which are required for interest on the
Series 2011B Bonds to be excluded from gross income for federal taxation
purposes. In determining what actions are required to comply, the City may
rely on an opinion of Bond Counsel. The City makes the following specific
covenants with respect to the Code:
(a) The City will not take any action or omit any action if it would cause the
Series 2011B Bonds to become "arbitrage bonds" under Section 148 of
the Code;
(b) The City shall operate the facilities financed with the Series 2011 Bonds
so that the Series 2011B Bonds do not become private activity bonds
within the meaning of Section 141 of the Code;
(c) The City shall pay, when due, all rebates and penalties with respect to the
Series 2011B Bonds which are required by Section 148(f) of the Code.
(ii) The covenants contained in Section 17.1.E(i) and any covenants in the closing
documents for the Series 2011B Bonds shall constitute contracts with the
owners of the Series 2011B Bonds, and shall be enforceable by them.
(iii) The Series 2011B Bond proceeds shall be applied as follows:
(a) $ of proceeds of the Series 2011B Bonds required to make
the balance in the First Reserve Subaccount equal to the First Reserve
Subaccount Reserve Requirement shall be deposited in the First Reserve
Subaccount.
(b) An amount of proceeds of the Series 2011B Bonds required to redeem or
defease the Refundable Obligations that are being refunded with the
Series 2011B Bonds shall be used to redeem such Refundable Obligations
or deposited with the escrow agent for the Refundable Obligations.
(c) The balance of the Series 2011B Bond proceeds shall be placed in the
Construction Fund, and shall be disbursed only to finance costs incurred
in connection with the issuance of the Series 2011B Bonds.
17.3. Earnings from investment of the funds in the Construction Fund shall be maintained in
the Construction Fund, and shall be treated and disbursed as Series 2011 Bond proceeds.
Construction Fund balances attributable to Series 2011 Bond proceeds which are not
needed for the refunding may be transferred to the Bond Account.
EXECUTED ON BEHALF OF THE CITY OF WOODBURN BY ITS AS
OF THE DAY OF 2011.
Page 31 — Master Wastewater System Bond Declaration
144
CITY OF WOODBURN, OREGON
0
authorized "City Official"
Page 32 — Master Wastewater System Bond Declaration
145
Appendix A
No. R- (<BondNUmben>
Form of Series 2011A Bond
$«PrincipalAmtNumber>>
United States of America
State of Oregon
Marion County
City of Woodburn
Wastewater System Revenue Refunding Bond, Series 2011A (Current Interest Bonds)
Dated Date: October 1 2011
Interest Rate Per Annum: « CouponRate >>%
Maturity Date: 1, oMaturityYeam
CUSIP Number: «CUSIPNumbr>>
Registered Owner: - - -- -Cede & Co. - - - --
Principal Amount: ----- «PrincipalAmtSpelled>> Dollars - - - --
THE CITY OF WOODBURN, State of Oregon (the "City"), for value received, acknowledges
itself indebted and hereby promises to pay to the Registered Owner hereof, or registered assigns, but solely from the
sources indicated below, the Principal Amount on the Maturity Date together with interest thereon from the date
hereof at the Interest Rate Per Annum indicated above. Interest is payable semiannually on the first days of June and
December in each year until maturity or prior redemption, commencing December 1, 2011. Principal and interest
payments shall be received by Cede & Co., as nominee of The Depository Trust Company, or its registered assigns,
as of the close of business on the fifteenth day of the calendar month immediately preceding the applicable interest
payment date. Such payments shall be made payable to the order of "Cede & Co." as nominee of The Depository
Trust Company, New York, New York
This Series 2011A Bond is not a general obligation or liability of the City, and is payable solely
from the Net Revenues of the Wastewater System as provided in the Master Wastewater System Bond Declaration
dated October , 2011 (the "Master Declaration"). The City covenants and agrees with the owner of this Series
2011A Bond that it will keep and perform all of the covenants in this Series 2011A Bond and in the Master
Declaration. The City has pledged the Net Revenues of the Wastewater System to the payment of principal and
interest on this Series 2011A Bond.
The Series 2011A Bonds are initially issued as a book - entry -only security issue with no certificates
provided to the Series 2011A Bondowners. Records of Series 2011A Bond ownership will be maintained by the
City's paying agent and registrar, which is currently U. S. Bank National Association (the "Registrar"), and The
Depository Trust Company and its participants.
Should the book - entry -only security system be discontinued, the City shall cause the Registrar to
authenticate and deliver replacement the Series 2011A Bonds shall be issued in the form of registered Series 2011A
Bonds without coupons in the denominations of $5,000 or any integral multiple thereof. Such Series 2011A Bonds
may be exchanged for Series 2011A Bonds of the same aggregate principal amount, but different authorized
denominations, as provided in the Master Declaration.
Any exchange or transfer of this Series 2011A Bond must be registered, as provided in the Master
Declaration, upon the Series 2011A Bond register kept for that purpose by the Registrar. Upon registration, a new
registered Series 2011A Bond or Series 2011A Bonds, of the same series and maturity and in the same aggregate
principal amount, shall be issued to the transferee as provided in the Master Declaration. The Registrar and the City
may treat the person in whose name this Series 2011A Bond is registered as its absolute owner for all purposes, as
provided in the Master Declaration.
The Series 2011A Bondowner may exchange or transfer this Series 2011A Bond only by
surrendering it, together with a written instrument of exchange or transfer which is satisfactory to the Registrar and
duly executed by the registered owner or their duly authorized attorney, at the principal corporate trust office of the
Registrar in the manner and subject to the conditions set forth in the Master Declaration.
.,
Unless this certificate is presented by an authorized representative of The Depository Trust
Company to the issuer or its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
This Series 2011A Bond is one of a series of $ aggregate principal amount of
Wastewater System Revenue Refunding Bonds, Series 2011A (Current Interest Bonds), of the City, and is issued by
the City for the purpose of refunding loans previously issued by the City to improve its Wastewater System and to
finance [projects described in the City's Wastewater Facilities Plan/or something more specific] in full and strict
accordance and compliance with all of the provisions of the Constitution and Statutes of the State of Oregon and the
charter of the City.
The Bonds shall mature and be subject to redemption as described in the final Official Statement
for the Bonds which is dated September_, 2011.
The Series 2011A Bonds are issuable in the form of registered Series 2011A Bonds without
coupons in the denominations of $5,000 or any integral multiple thereof. Series 2011A Bonds may be exchanged for
an equal aggregate principal amount of registered Series 2011A Bonds of the same maturity and of any other
authorized denominations in the manner, and subject to the conditions set forth in the Master Declaration.
This Bond shall remain in the Registrar's custody subject to the provisions of the FAST Balance
Certificate Agreement currently in effect between the Registrar and The Depository Trust Company.
IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all conditions, acts, and things
required to exist, to happen, and to be performed precedent to and in the issuance of this Series 2011A Bond have
existed, have happened, and have been performed in due time, form, and manner as required by the Constitution and
Statutes of the State of Oregon; that the issue of which this Series 2011A Bond is a part, and all other obligations of
such City, are within every debt limitation and other limits prescribed by such Constitution and Statutes.
IN WITNESS WHEREOF, the City Council of the City of Woodburn, Oregon, has caused this
Series 2011A Bond to be signed by facsimile signature of its Mayor and attested by facsimile signature of its City
Official as of the date indicated above.
City of Woodburn, Oregon
147
THIS SERIES 2011A BOND SHALL NOT BE VALID UNLESS PROPERLY
AUTHENTICATED BY THE REGISTRAR IN THE SPACE INDICATED BELOW.
This Series 2011A Bond is one of a series of $ aggregate principal amount of
Wastewater System Revenue Refunding Bonds, Series 2011A (Current Interest Bonds), of the City, issued pursuant
to the Master Declaration described herein.
Date of authentication: October , 2011.
as Registrar
Authorized Officer
148
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto:
(Please insert social security or other identifying number of assignee)
this Series 2011 Bond and does hereby irrevocably constitute and appoint
as attorney to transfer this Series 2011A Bond on the books kept for registration
thereof with the full power of substitution in the premises.
Dated:
NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears
upon the face of this Series 2011A Bond in every particular, without alteration or enlargement or any change
whatever.
NOTICE: Signature(s) must be guaranteed by a member of the New York Stock Exchange or a commercial bank or
trust company
Signature Guaranteed
(Bank, Trust Company or Brokerage Firm)
Authorized Officer
The following abbreviations, when used in the inscription on the face of this Series 2011 Bond,
shall be construed as though they were written out in full according to applicable laws or regulations.
TEN COM -- tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as tenants in common
OREGON CUSTODIANS use the following:
CUST UL OREG MIN
as custodian for (name of minor)
OR UNIF TRANS MIN ACT
under the Oregon Uniform Transfer to Minors Act
Additional abbreviations may also be used though not in the list above.
149
Form of Series 2011B Bond
No. R- «BondNumbei >) $«PrincipalAmtNumber»
United States of America
State of Oregon
Marion County
City of Woodburn
Wastewater System Revenue Refunding Bond, Series 2011B (Deferred Interest Bonds)
Dated Date: October 1 2011
Approximate Yield to Maturity: «CouponRate>>%
Maturity Date: June 1, «MaturityYear»
CUSIP Number: «CUSIPNumbr»
Registered Owner: - - -- -Cede & Co. - - - --
Principal Amount: ----- «PrincipalAmtSpelled» Dollars---- -
Final Maturity Amount:
THE CITY OF WOODBURN, State of Oregon (the "City "), for value received, acknowledges
itself indebted and hereby promises to pay to the Registered Owner hereof, or registered assigns, but solely from the
sources indicated below, the Principal Amount on the Maturity Date together with interest thereon from the date
hereof at the Approximate Yield to Maturity. The Final Maturity Amount of this Series 2011B Bond represents the
original Principal Amount, plus accrued, compounded interest to the Maturity Date.
Interest on this Series 2011B Bond will compounded on each June 1 and December 1,
commencing December 1, 2011 (each a "Compounding Date "), at the Approximate Yield to Maturity (together with
the Principal thereof, the "Accreted Value "). The Accreted Value, as set forth in the Accreted Value Table in the
final Official Statement for the Series 2011B Bonds dated September _, 2011 (the "Official Statement"), is the total
amount of Principal and accrued interest represented by this Series 2011B Bond determined for each Compounding
Date.
No payments are made to the Owner of this Series 2011B Bond until the stated Maturity Date.
Payments shall be received by Cede & Co., as nominee of The Depository Trust Company, or its registered assigns,
as of the close of business on the fifteenth day of the calendar month immediately preceding the applicable Maturity
Date. Such payments shall be made payable to the order of "Cede & Co." as nominee of The Depository Trust
Company, New York, New York
This Series 2011B Bond is not a general obligation or liability of the City, and is payable solely
from the Net Revenues of the Wastewater System as provided in the Master Wastewater System Bond Declaration
dated October , 2011 (the "Master Declaration"). The City covenants and agrees with the owner of this Series
2011B Bond that it will keep and perform all of the covenants in this Series 2011B Bond and in the Master
Declaration. The City has pledged the Net Revenues of the Wastewater System to the payment of principal and
interest on this Series 2011B Bond.
The Series 2011B Bonds are initially issued as a book - entry -only security issue with no certificates
provided to the Series 2011B Bondowners. Records of Series 2011B Bond ownership will be maintained by the
City's paying agent and registrar, which is currently U.S. Bank National Association (the "Registrar"), and The
Depository Trust Company and its participants.
Should the book - entry -only security system be discontinued, the City shall cause the Registrar to
authenticate and deliver replacement the Series 2011B Bonds shall be issued in the form of registered Series 2011B
Bonds without coupons in the denominations of $5,000 or any integral multiple thereof. Such Series 2011B Bonds
may be exchanged for Series 2011B Bonds of the same aggregate principal amount, but different authorized
denominations, as provided in the Master Declaration.
Any exchange or transfer of this Series 2011B Bond must be registered, as provided in the Master
Declaration, upon the Series 2011B Bond register kept for that purpose by the Registrar. Upon registration, a new
registered Series 2011B Bond or Series 2011B Bonds, of the same series and maturity and in the same aggregate
150
principal amount, shall be issued to the transferee as provided in the Master Declaration. The Registrar and the City
may treat the person in whose name this Series 2011B Bond is registered as its absolute owner for all purposes, as
provided in the Master Declaration.
The Series 2011B Bondowner may exchange or transfer this Series 2011B Bond only by
surrendering it, together with a written instrument of exchange or transfer which is satisfactory to the Registrar and
duly executed by the registered owner or their duly authorized attorney, at the principal corporate trust office of the
Registrar in the manner and subject to the conditions set forth in the Master Declaration.
Unless this certificate is presented by an authorized representative of The Depository Trust
Company to the issuer or its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
This Series 2011B Bond is one of a series of $ aggregate principal amount of
Wastewater Revenue and Refunding Bonds, Series 2011B (Deferred Interest Bonds), of the City, and is issued by the
City for the purpose of refunding loans previously issued by the City to improve its Wastewater System and to
finance [projects described in the City's Wastewater Facilities Plan/or something more specific] in full and strict
accordance and compliance with all of the provisions of the Constitution and Statutes of the State of Oregon and the
charter of the City.
The 2011B Bonds are not subject to optional redemption prior to maturity..
The Series 2011B Bonds are issuable in the form of registered Series 2011B Bonds without
coupons in the denominations of $5,000 or any integral multiple thereof. Series 2011B Bonds may be exchanged for
an equal aggregate principal amount of registered Series 2011B Bonds of the same maturity and of any other
authorized denominations in the manner, and subject to the conditions set forth in the Master Declaration.
This Bond shall remain in the Registrar's custody subject to the provisions of the FAST Balance
Certificate Agreement currently in effect between the Registrar and The Depository Trust Company.
IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all conditions, acts, and things
required to exist, to happen, and to be performed precedent to and in the issuance of this Series 2011B Bond have
existed, have happened, and have been performed in due time, form, and manner as required by the Constitution and
Statutes of the State of Oregon; that the issue of which this Series 2011B Bond is a part, and all other obligations of
such City, are within every debt limitation and other limits prescribed by such Constitution and Statutes.
IN WITNESS WHEREOF, the City Council of the City of Woodburn, Oregon, has caused this
Series 2011B Bond to be signed by facsimile signature of its Mayor and attested by facsimile signature of its City
Official as of the date indicated above.
City of Woodburn, Oregon
151
THIS SERIES 2011B BOND SHALL NOT BE VALID UNLESS PROPERLY
AUTHENTICATED BY THE REGISTRAR IN THE SPACE INDICATED BELOW.
This Series 2011B Bond is one of a series of $ aggregate principal amount of
Wastewater System Revenue Refunding Bonds, Series 201113, of the City, issued pursuant to the Master Declaration
described herein.
Date of authentication: October , 2011.
as Registrar
Authorized Officer
152
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto:
(Please insert social security or other identifying number of assignee)
this Series 2011 Bond and does hereby irrevocably constitute and appoint
as attorney to transfer this Series 2011B Bond on the books kept for registration
thereof with the full power of substitution in the premises.
Dated:
NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears
upon the face of this Series 2011B Bond in every particular, without alteration or enlargement or any change
whatever.
NOTICE: Signature(s) must be guaranteed by a member of the New York Stock Exchange or a commercial bank or
trust company
Signature Guaranteed
(Bank, Trust Company or Brokerage Firm)
Authorized Officer
The following abbreviations, when used in the inscription on the face of this Series 2011 Bond,
shall be construed as though they were written out in full according to applicable laws or regulations.
TEN COM -- tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as tenants in common
OREGON CUSTODIANS use the following:
CUST UL OREG MIN
as custodian for (name of minor)
OR UNIF TRANS MIN ACT
under the Oregon Uniform Transfer to Minors Act
Additional abbreviations may also be used though not in the list above.
153
PRELIMINARY OFFICIAL STATEMENT dated , 2011
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NEW ISSUE
BOOK -ENTRY Moody's Rating: _ (See "Ratings" herein)
In the opinion of K &L Gates LLP, Bond Counsel, assuming compliance with certain covenants of the City, interest on the
Bonds is excludable from gross income for federal income tax purposes under existing law. Interest on the Bonds is not an
item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. See
"Tax Matters" herein for a discussion of the opinion of Bond Counsel. In the opinion of Bond Counsel, interest on the Bonds
is exempt from Oregon personal income tax under existing law.
CITY OF WOODBURN
MARION COUNTY, OREGON
WASTEWATER REVENUE AND REFUNDING BONDS, SERIES 2011
$30,490,000* Series 2011A $3,488,952.40* Series 2011B
(Current Interest Bonds) ($5,045,000 Final Maturity Amount)
(Deferred Interest Bonds)
DATED: Date of Delivery Due: June 1, as shown on inside cover
The City of Woodburn, Oregon (the "City ") provides this Official Statement in connection with the issuance of its
Wastewater Revenue and Refunding Bonds, Series 2011A (Current Interest Bonds) (the "2011A Bonds ") and its
Wastewater Revenue and Refunding Bonds, Series 2011B (Deferred interest Bonds) (the "2011B Bonds ", and collectively
with the 2011A Bonds, the "Bonds "). The Bonds mature on June 1 in each of the years and amounts set forth on the
inside cover and will bear interest from the Date of Delivery to the dates of maturity at the rates per annum as shown on
the inside cover.
The Bonds will have a first lien on the Net Revenues of the City's Wastewater System (the "System ") upon payment by the
Bonds of certain outstanding borrowings. The Bonds will also be secured by amounts in the First Reserve Subaccount, as
described herein. Additional bonds (the "Parity Bonds ") may be issued on a parity lien with the Bonds and any other Parity
Bonds, subject to certain conditions described herein. The Bonds are special obligations of the City payable solely from
the Net Revenues of the System and amounts in the First Reserve Subaccount. The Bonds are not obligations of Marion
County, the State of Oregon, or any other municipal corporation or political subdivision thereof other than the City.
The Bonds will be issued as fully registered bonds under a book -entry system, initially registered to Cede & Co., as
nominee of The Depository Trust Company ( "DTC "), New York, New York, which will act as securities depository for the
Bonds. Individual purchases of Bonds will be made in the principal amount of $5,000, or integral multiples thereof within
a single maturity. The purchasers will not receive certificates representing their interest in the Bonds, as long as the
Bonds are in book -entry form. Interest on the Bonds will be payable semiannually on June 1 and December 1 of each
year, commencing December 1, 2011, to the maturity of the Bonds through the principal corporate trust offices of the
registrar and paying agent of the City, currently U.S. Bank National Association (the "Registrar "). For so long as the Bonds
are held by DTC in book -entry form, principal and interest payments will be made as described herein. See "The Bonds -
Book -Entry System."
The Bonds may be subject to optional redemption prior to their stated maturities. The Bonds are being issued to refund
all of the City's outstanding Loan Agreement No. R98411 (the "R98411 Loan "), the Loan Agreement, No. R98412 (the
"R98412 Loan "), the Loan Agreement, No. R98413 (the "R98413 Loan "), the Loan Agreement No. R98414 (the "R98414
Loan ") and the Loan Agreement No. G98002 (the "G98002 Loan "), to finance various improvements in the Wastewater
System, to fund the First Reserve Subaccount and to pay costs of issuance of the Bonds. (See "Redemption Provisions,"
"Refunding Procedure," "Use of Proceeds," "Security" and "Authorization for Issuance" herein.)
The Bonds are offered by the Underwriter when, as and if issued by the City, subject to the opinion as to legality of the
Bonds, and tax - exemption of the Bonds by I< &L Gates LLP, Portland, Oregon, Bond Counsel, which opinion will be
delivered with the Bonds. The Bonds, in book -entry form, are expected to be available for delivery through the facilities
of DTC for delivery by Fast Automated Securities Transfer on or about November 1, 2011 (the "Date of Delivery ").
This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must
read the entire official statement to obtain information essential to making an informed investment decision.
Preliminary; subject to change. D.A. DAVIDSON p_ CO.
154
CITY OF WOODBURN
MARION COUNTY, OREGON
WASTEWATER REVENUE AND REFUNDING BONDS, SERIES 2011
DATED: Date of Delivery (Expected to be November 1, 2011)
$30,490,000
WASTEWATER REVENUE AND REFUNDING BONDS, SERIES 2011A
(Current Interest Bonds)
MATURITY SCHEDULE
DUE: June 1, as shown below
2012
$ 1,305,000
2022
$ 4,715,000
2013
1,835,000
2023
40,000
2014
1,905,000
2024
45,000
2015
1,980,000
2025
45,000
2016
2,470,000
2026
50,000
2017
2,680,000
2027
55,000
2018
3,040,000
2028
55,000
2019
3,435,000
2029
60,000
2020
3,795,000
2030
60,000
2021
2,890,000
2031
30,000
$3,488,952.40
($5,045,000 Final Maturity Amount)
WASTEWATER REVENUE AND REFUNDING BONDS, SERIES 2011B
(Deferred Interest Bonds)
MATURITY SCHEDULE
DUE: June 1, as shown below
Due Original Principal Final Maturity Price per 0011
lune 1 Amounts Amount at Maturity
2014 $ 352,314 $ 370,000 $ 4,761
2015 722,366 780,000 4,631
2021 897,601 1,335,000 3,362
2023 1,516,672 2,560,000 2,962
(1) Preliminary; subject to change.
(z) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global
Services. The CUSIP numbers are included above for convenience of the holders and potential holders of the Bonds. No
assurance can be given that the CUSIP numbers for the Bonds will remain the same after the date of issuance and delivery
of the Bonds.
155
CITY OF WOODBURN
270 Montgomery St
Woodburn, OR 97071
(503) 982 -5222
Mayor and City Council:
Mayor................................................................................ ............................... Kathy Figley
CityCouncil ........................................................................... ............................... Dick Pugh
Mel Schmidt
Pete MacCullum
Jim Cox
Frank Lonegran
Eric Morris
Certain Appointed City Officials:
City Administrator ....................................................... ............................... Scott Derickson
Finance Director .......................................................... ............................... Ignacio Palacios
Public Works Director .............................. ............................... ............................Dan Brown
Underwriter
D. A. DAVIDSON & CO.
Two Centerpointe Drive, Suite 400
Lake Oswego, Oregon 97035
(503) 863 -5094
Registrar and Paying Agent
U.S. Bank National Association
555 Oak Street PL -6
Portland, Oregon 97204
(503) 275 -5713
Bond Counsel
K &L GATES LLP
222 SW Columbia, Suite 1400
Portland, Oregon 97201
(503) 228 -3200
Feasibility Consultant
Galardi Rothstein Group
2824 NE 22 Ave.
Portland, Oregon 97212
(503) 236 -0002
156
No dealer, broker, salesman or other person has been authorized by the City to give any information or
to make any representations, other than those contained in this Official Statement, and if given or
made, such other information or representations must not be relied upon as having been authorized by
the City. The information in this Official Statement was obtained from sources believed to be reliable,
but is not guaranteed as to accuracy or completeness.
The Underwriter has reviewed the information in this Official Statement in accordance with, and as a
part of, its responsibilities under the federal securities laws as applied to the facts and circumstances of
this transaction, but the Underwriter does not guarantee the accuracy or completeness of the
information. The information and expressions of opinion herein are subject to change without notice,
and neither the delivery of this Official Statement nor any sale hereunder shall create any implication
that there has been no change in the financial condition or operations of the City described herein since
the date of its distribution. This Official Statement contains, in part, estimates and matters of opinion
that are not intended as statements of fact, and no representation or warranty is made as to the
correctness of such estimates and opinions or that they will be realized.
The following descriptions of the Bonds, the Resolution, the Master Declaration (defined herein) and all
references to other documents or materials not claiming to be quoted in full are only brief outlines of
some of the provisions and do not claim to summarize or describe all provisions. Copies of such
documents may be obtained from the City or the Underwriter.
THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. IN MAKING AN INVESTMENT DECISION INVESTORS MUST
RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.
This Preliminary Official Statement will be "deemed final" by the City, pursuant to Rule 15c2 -12
promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended, except for information which is permitted to be excluded from this Preliminary Official
Statement under said Rule 15c2 -12.
In connection with the offering and issuance of the Bonds, the Underwriter may over -allot or effect
transactions that stabilize or maintain the market price of the Bonds at a level above that which might
otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at anytime.
Certain statements included or incorporated by reference in this Official Statement constitute "forward -
looking statements" within the meaning of Section 27A of the United States Securities Act of 1933, as
amended. Such statements are generally identifiable by the terminology used such as "plan," "expect,"
"estimate," "projection," "budget" or other similar words. No assurance can be given that the future
results discussed herein will be achieved and actual results may differ materially from the forecasts
described herein.
157
TABLE OFCONTENTS
SUMMARYSTATEMENT ................................................................................................. ..............................3
INTRODUCTION .............................................................................................................. ..............................5
DESCRIPTION OF THE BONDS ......................................................................................... ..............................5
Authorization for Issuance ......................................................................................... ..............................5
Principaland Interest ................................................................................................. ..............................5
Registrar and Registration Features ........................................................................... ..............................6
Book -Entry Bonds ....................................................................................................... ..............................6
RedemptionProvisions .............................................................................................. ..............................6
Estimated Sources and Uses of Funds ....................................................................... ..............................7
Useof Proceeds .......................................................................................................... ..............................7
RefundingProcedure ................................................................................................. ..............................8
Security ....................................................................................................................... ..............................8
RateCovenant ............................................................................................................ ..............................9
Fundsand Accounts .................................................................................................. .............................11
ParityBonds .............................................................................................................. .............................12
SubordinateBonds .................................................................................................... .............................12
OtherBond Covenants .............................................................................................. .............................12
THECITY ........................................................................................................................ .............................13
Administration ........................................................................................................... .............................14
BargainingUnits ........................................................................................................ .............................14
BONDED INDEBTEDNESS ............................................................................................... .............................14
OutstandingLong -Term Debt ................................................................................... .............................16
Debt Service Requirements ....................................................................................... .............................17
DebtPayment Record ............................................................................................... .............................17
FutureFinancing ........................................................................................................ .............................17
THESEWER SYSTEM ...................................................................................................... .............................18
Description of the Sewer Treatment Plant ............................................................... .............................18
Description of the Collection and Transmission System ........................................... .............................18
Ratesand Charges ..................................................................................................... .............................18
FINANCIAL INFORMATION ............................................................................................ .............................23
Financial Reporting and Accounting Policies ............................................................ .............................23
Description of Select Funds ....................................................................................... .............................23
Auditing ..................................................................................................................... .............................23
Government -wide Statement of Net Assets ............................................................. .............................24
Government -wide Statement of Activities ............................................................... .............................25
BudgetaryProcess ..................................................................................................... .............................26
GeneralFund Adopted Budget ................................................................................. .............................26
Investments ............................................................................................................... .............................26
PensionSystem ......................................................................................................... .............................27
Cityof Woodburn ...................................................................................................... .............................28
Employer Contribution Rates — City of Woodburn ................................................... .............................29
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Other Post - Employment Benefits ............................................................................. .............................29
RiskManagement ...................................................................................................... .............................30
THE INITIATIVE AND REFERENDUM PROCESS ............................................................... .............................30
Referendum .............................................................................................................. .............................30
Initiatives ................................................................................................................... .............................30
CityCharter ............................................................................................................... .............................31
LEGAL MATTERS AND LITIGATION ................................................................................ .............................32
Litigation .................................................................................................................... .............................32
TAXMATTERS ................................................................................................................ .............................32
TaxExemption ........................................................................................................... .............................32
Oregon State Tax Exemption .................................................................................... .............................33
CONTINUINGDISCLOSURE ............................................................................................ .............................33
RATING .......................................................................................................................... .............................34
UNDERWRITING ............................................................................................................ .............................34
PRELIMINARY OFFICIAL STATEMENT ............................................................................ .............................34
CONCLUDING STATEMENT ............................................................................................ .............................35
APPROVAL OF OFFICIAL STATEMENT ............................................................................ .............................35
APPENDIX A— ECONOMIC AND DEMOGRAPHIC INFORMATION
APPENDIX B — CONTINUING DISCLOSURE CERTIFICATE
APPENDIX C —FORM OF LEGAL OPINION
APPENDIX D — AUDITED FINANCIAL STATEMENTS 2010
APPENDIX E — BOOK -ENTRY ONLY SYSTEM
APPENDIX F — FORM OF MASTER SEWER SYSTEM REVENUE BOND DECLARATION
APPENDIX G — FEASIBILITY REPORT
159
CITY OF WOODBURN
MARION COUNTY, OREGON
WASTEWATER REVENUE AND REFUNDING BONDS, SERIES 2011
$30,490,000* Series 2011A $3,488,952.40* Series 2011B
(Current Interest Bonds) ($5,045,000 Final Maturity Amount)
(Deferred Interest Bonds)
SUMMARY STATEMENT
The following summary is qualified in its entirety by reference to the detailed information appearing elsewhere
in this Official Statement. No person is authorized to detach this Summary Statement from this Official
Statement or to otherwise use it without this entire Official Statement. Certain capitalized terms not otherwise
defined herein shall be given definitions provided in the Master Declaration (defined herein), which definitions
are included in Appendix F.
ISSUER ................. ............................The City of Woodburn, Oregon (the "City ") is located in Marion County,
approximately 30 miles south of the City of Portland and 18 miles north of
the City of Salem. The City has a 2010 preliminary estimated population of
23,150. (See "The City" and "Appendix A — Economic and Demographic
Information. ")
AUTHORITY
FOR ISSUANCE ... ..........................Under and in accordance with State laws and provisions, specifically Oregon
Revised Statutes ( "ORS ") Sections 287A.360, the Bonds are being issued
pursuant to Resolution No. (the "Resolution ") adopted by the City
Council (the "Council ") on September 26, 2011. The Bonds are also being
issued under a Master Wastewater System Revenue Bond Declaration (the
"Master Declaration ") to be executed on the Date of Delivery.
[ INSURANCE] ....... ............................[If the Bonds are sold with bond insurance, the Master Declaration will
provide that those documents may be amended with the consent of the bond
insurer of the Bonds and without consent of the owners of the Bonds. The
Master Declaration may also have other provisions added at the request of
the insurer of the Bonds.]
INTEREST AND
PRIOR REDEMPTION ................ Interest is payable semi - annually each June 1 and December 1, commencing
December 1, 2011, as shown on the inside cover. (See the "Description of the
Bonds" herein.) The Bonds may be subject to optional redemption prior to
their stated maturities. (See "Redemption and Purchase" herein.)
Preliminary; subject to change.
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160
SOURCE OF
REPAYMENT .... ............................The City has pledged in the Master Declaration as security for the payment of
the principal of, premium, if any, and interest on the Bonds (1) a first lien on
the Net Revenues of the Wastewater System (the "System ") that will take
effect once the City's borrowings with outstanding liens on the System have
been repaid by the Bonds, and (2) all money and securities held in the First
Reserve Subaccount, including the investment income thereon, if any, subject
to the provisions of the Master Declaration as described herein. (See
"Description of the Bonds - Security" herein.)
USE OF
PROCEEDS ....... ............................The Bonds are being issued to refund all of the City's outstanding Loan
Agreement No. R98411 (the "R98411 Loan "), the Loan Agreement, No.
R98412 (the "R98412 Loan "), the Loan Agreement, No. R98413 (the "R98413
Loan "), the Loan Agreement No. R98414 (the "R98414 Loan ") and the Loan
Agreement No. G98002 (the "G98002 Loan "), to finance various
improvements in the Wastewater System, to fund the First Reserve
Subaccount and to pay costs of issuance of the Bonds. (See "The Bonds -
Purpose and Use of Proceeds" herein.)
4
161
CITY OF WOODBURN
MARION COUNTY, OREGON
WASTEWATER REVENUE AND REFUNDING BONDS, SERIES 2011
$30,490,000* Series 2011A $3,488,952.40* Series 2011B
(Current Interest Bonds) ($5,045,000 Final Maturity Amount)
(Deferred Interest Bonds)
INTRODUCTION
The City of Woodburn, Oregon (the "City ") furnishes this Official Statement in connection with the offering of
the Wastewater Revenue and Refunding Bonds, Series 2011A (Current Interest Bonds) (the "2011A Bonds ") and its
Wastewater Revenue and Refunding Bonds, Series 2011B (Deferred interest Bonds) (the "2011B Bonds ", and collectively
with the 2011A Bonds, the "Bonds "). This Official Statement, which includes the cover page, inside cover pages and
appendices, provides information concerning the City, the Bonds and the City's wastewater system (the
"System ").
The information set forth herein has been obtained from the City and other sources that are believed to be
reliable. The information contained herein should not be construed as representing all conditions affecting the
City or the Bonds. Additional information may be obtained from the City. The statements relating to the
Resolution and the Master Declaration are in summarized form, and in all respects are subject to and qualified in
their entirety by express reference to the provisions of the complete documents. The form of Master Declaration
is attached hereto as Appendix F. The summaries of those agreements in this Official Statement are not to be
construed as contracts with Owners of the Bonds.
DESCRIPTION OF THE BONDS
Authorization for Issuance
The Bonds are being issued pursuant to Resolution No. adopted by the City Council on September 26,
2011 (the "Resolution "). The Bonds are also being issued under a Master Wastewater System Revenue
Refunding Bond Declaration (the "Master Declaration ") to be executed on the Date of Delivery.
Principal and Interest
The Series 2011A Bonds will be issued in the aggregate principal amount posted on the inside cover of this
Official Statement and will be dated and bear interest from the Date of Delivery. The Bonds will mature on the
dates and in the principal amounts and will bear interest, payable semiannually, until the maturity of the Bonds
as set forth on the inside cover of this Official Statement.
Interest on the Bonds will be computed on the basis of a 360 -day year consisting of twelve 30 -day months.
The Series 2011B Bonds will be issued in the aggregate principal amount of $3,488,952.40 ($5,045,000 Final
Maturity Amount) and will be dated and bear interest from the Date of Delivery. Interest on the Series 2011B
Bonds will be payable only at maturity, and will be compounded semiannually (for the accreted value of the
Bonds of each maturity as of each June 1 and December 1, see the following "Accreted Value Table ").
Interest on the Series 2011B Bonds, which is payable at maturity and is computed on the basis of a 360 -day year
consisting of twelve 30 -day months, is included in the Final Maturity Amount.
Preliminary; subject to change.
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Accreted Value per $5,000
[TO COME]
Registrar and Registration Features
The Bonds will be issued in fully registered form and, when issued, will be registered in the name of Cede & Co.
as Bond Owner and as nominee for The Depository Trust Company ( "DTC "), New York, New York. DTC will act as
securities depository for the Bonds. Individual purchases and sales of the Bonds may be made in book -entry
form only in minimum denominations of $5,000 within a single maturity and integral multiples thereof.
Purchasers ( "Owners ") will not receive certificates representing their interest in the Bonds.
The principal of and interest on the Bonds will be payable by the Registrar, or such other or additional offices as
may be specified to the City by the Registrar, to DTC, which, in turn, is obligated to remit such principal and
interest to its participants for subsequent disbursement to the Owners of the Bonds, as further described in
Appendix E attached hereto. Interest on the Bonds shall be credited to the Beneficial Owners by the DTC
Participants.
Book -Entry Bonds
DTC will act as securities depository for the Bonds. The ownership of one fully registered bond for each maturity
of the Bonds, as set forth on the inside cover of this Official Statement, each in the aggregate principal amount
of such maturity, will be registered in the name of Cede & Co., as nominee for DTC. See Appendix E attached
hereto for additional information.
Procedure in the Event of Revisions of Book -Entry Transfer System. If the book - entry -only system is discontinued,
the Registrar and the City shall amend the Master Declaration to provide for an alternative system of providing
notice and such other matters as need to be updated for the bonds that is of general acceptance in the
municipal bond markets.
Redemption Provisions
Optional Redemption. The 2011A Bonds maturing in years 2012 through 20, inclusive, are not subject to
optional redemption prior to maturity. The Bonds maturing on June 1, 20 and on any date thereafter are
subject to redemption at the option of the City prior to their stated maturity date at any time on or after June 1,
20, as a whole or in part, at a price of par, plus accrued interest, if any, to the date of redemption.
The 2011B Bonds are not subject to optional redemption.
For as long as the Bonds are in book -entry only form, if fewer than all of the Bonds of a maturity are called for
redemption, the selection of Bonds within a maturity to be redeemed shall be made by DTC in accordance with
its operational procedures then in effect. See Appendix E attached hereto. If the Bonds are no longer held in
book -entry only form, then the Registrar would select the Bonds for redemption by lot.
[Mandatory Redemption. If not previously redeemed under the provisions for optional redemption, the Term
2011A Bonds maturing on June 1, 20 are subject to mandatory redemption (in such manner as the Registrar
and DTC will determine or by lot by the Registrar) on June 1 of the following years in the following principal
amounts, at a price of par plus accrued interest to the date of redemption:]
[TO COME]
Notice of Redemption (Book - Entry). So long as the Bonds are in book -entry only form, the Registrar shall notify
DTC of an early redemption not less than 20 days prior nor more than 60 days to the date fixed for redemption,
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163
and shall provide such information as required by a letter of representation submitted to DTC in connection with
the issuance of the Bonds.
Notice of Redemption (No Book - Entry). During any period in which the Bonds are not in book -entry only form,
unless waved by any Owner of the Bonds (as defined herein) to be redeemed, official notice of any redemption
of Bonds shall be given by the Registrar on behalf of the City by mailing a copy of an official redemption notice by
first class mail, postage prepaid, at least 30 days and no more than 60 days prior to the date fixed for
redemption, to the Owners of the Bonds to be redeemed at the address shown on the bond register or at such
other address as is furnished in writing by such Owner to the Registrar.
Conditional Notice of Redemption. Any notice of optional redemption may state that the optional redemption is
conditional upon receipt by the Registrar of moneys sufficient to pay the redemption price of the Bonds that are
to be redeemed or upon the satisfaction of any other condition, and /or that such notice may be rescinded upon
the occurrence of any other event, and any conditional notice so given may be rescinded at any time before
payment of such redemption price if any such condition so specified is not satisfied or if any such other event
occurs. Notice of such rescission or of the failure of any such condition shall be given by the Registrar to affected
owners of Bonds as promptly as practicable upon the failure of such condition or the occurrence of such other
event.
Estimated Sources and Uses of Funds
The proceeds from the Bonds are estimated to be a
lied as follows:
Principal Amount
Release of Prior Debt Service Reserve
Prior Debt Service Fund Contribution
Net Original Issue Premium
Total Available Proceeds
Refunding Requirements
New Projects
Deposit to First Reserve Subaccount
Issuance Costs, Underwriters Discount and Contingency
Total Uses of Funds
$30,490,000 $3,488,952 $33,978,952
$33,978,952
(1) Amounts will be included in the final Official Statement. Preliminary, subject to change.
Use of Proceeds
The City previously issued the $4,000,000 Loan Agreement No. R98411 (the "R98411 Loan "), the $25,969,671
Loan Agreement No. R98412 (the "R98412 Loan "), the $700,000 Loan Agreement No. R98413 (the "R98413
Loan "), the $1,110,156 Loan Agreement No. R98414 (the "R98414 Loan ") and the $515,000 Loan Agreement No.
G98002 (the "G98002 Loan "), the "Refundable Bonds ". Proceeds of the Bonds will be used to refund all of the
City's outstanding Refundable Bonds, to finance various improvements in the Wastewater System, to fund the
First Reserve Subaccount and to pay the costs of issuance of the Bonds. The Bonds are being issued so that the
City can obtain a benefit of savings in total debt service requirements.
The bonds will be used to fund various improvements in the Wastewater System selected for implementation of
the Woodburn Wastewater Facilities Plan adopted by City Council in August of 2010. The improvements address
near -term regulatory requirements, condition improvements and provide for future capacity. As stipulated in its
Mutual Agreement and Order (MAO WQ/M -WE -07 -082) with the Oregon Department of Environmental Quality
(DEQ), the City of Woodburn, Oregon, agreed to provide facilities that will enable the Wastewater Facilities to
meet temperature and wintertime ammonia limits set forth in the newly DEQ adopted Pudding River total
7
164
maximum daily load (TMDL). These facilities include near -term improvements at wastewater treatment plant,
expansion of the poplar tree reuse system, and construction of wetlands for effluent cooling. Additionally
funding will be used to build capacity based on growth and condition improvement elements in both treatment
and collections that are needed to improve operability, maintainability and related deficiencies in the system.
Refunding Procedure
The proceeds of the Bonds will be used to provide funds to redeem all of the City's R98411 Loan, the R98412
Loan, the R98413 Loan and the R98414 Loan on the Dated Date. The proceeds of the Bonds will also be used to
provide funds to establish an irrevocable trust escrow to refund all of the City's G98002 Loan. The G98002 Loan
will be escrowed to their call date of January 1, 2012, at which time it will be called at par plus accrued interest
to the date of redemption.
From the proceeds of the Bonds, and with other monies available, the City will deposit cash in the custody of the
Escrow Agent on the Dated Date. The cash available in the irrevocable trust escrow as of the Dated Date will
provide funds sufficient to redeem all remaining principal of the G98002 Loan on January 1, 2012.
The cash balance will irrevocably be pledged to and held in trust for the benefit of the Owners of the G98002
Loan by the Escrow Agent, pursuant to the Escrow Deposit Agreement.
Information on the Refundable Bonds is as follows:
DEQ Loan No. R98411 $2,122,422 $2,122,422 8/17/2011 100%
DEQ Loan No. R98412 16,971,572 16,971,572 8/17/2011 100%
DEQ Loan No. R98413 700,000 700,000 8/17/2011 100%
DEQ Loan No. R98414 1,1 10,156 1,1 10,156 8/17/2011 100%
OEDD Loan No. G98002 271,486 271,486 1/1/2012 100%
Total Refundable Bonds $ 21,175,636 $ 21,175,636
(1) Represents the earliest redemption or prepayment date for each series of Refundable Bonds based on the estimated Dated Date of the Bonds.
Preliminary, subject to change.
Security
Bonds Net Revenue Pledge. The City has pledged in the Master Declaration as security for the payment of the
principal of, premium, if any, and interest on the Bonds and any Parity Bonds the Net Revenues of the System on
a first lien basis once the City's outstanding borrowings secured by Net Revenues have been repaid.
The City may issue future Parity Bonds on a parity basis with the Bonds, if several conditions, as described in the
Master Declaration are met. The Bonds and future Parity Bonds shall be referred to herein as the "Wastewater
Bonds."
The Bonds are not general obligations of the City and are not payable from taxes levied by the City. The Bonds
are not obligations of Marion County, the State or any political subdivision thereof other than the City.
As further defined in the Master Declaration, "Gross Revenues" generally means all fees and charges and other
revenues that are properly accrued under generally accepted accounting principles as revenues of the System,
including revenues from product sales, system development charges, and interest earnings on Gross Revenues in
the Wastewater Fund.
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165
As further defined in the Master Declaration, "Operating Expenses" generally means all costs which are properly
treated as expenses of operating and maintaining the System under generally accepted accounting principles
with respect to the System, but excludes certain costs.
As used herein and defined in the Master Declaration, "Net Revenues" means the Gross Revenue less Operating
Expenses.
As used herein and defined in the Master Declaration, "Annual Bond Debt Service" means in any Fiscal Year the
sum of: (1) the amounts of any transfers to the Bond Reserve Account described in the Master Declaration and
any similar requirement that is subsequently established for Parity Bonds; plus (2) the amount of principal and
interest required to be paid in that Fiscal Year on all Outstanding Bonds, calculated as follows:
(a) Interest which is to be paid from Bond Proceeds shall be subtracted;
(b) Bonds which are subject to scheduled, noncontingent redemption or noncontingent tender shall
be deemed to mature on the dates and in the amounts which are subject to mandatory redemption or tender,
and only the amount scheduled to be outstanding on the final maturity date shall be treated as maturing on that
date; and,
(c) Bonds which are subject to contingent redemption or tender shall be treated as maturing on
their stated maturity dates.
(d) The amount of any interest rate subsidies that the City expects to receive from the United States
for any Bonds that are "Build America Bonds," "Recovery Zone Economic Development Bonds" or similar bonds
shall be subtracted from the Bond interest payments that are eligible for the subsidies.
Rate Covenant
Basic Rate Covenant. The City covenants for the benefit of the Owners that it will establish and maintain rates
and charges in connection with the operation of the System which are sufficient to permit the City to pay all
Operating Expenses and all lawful charges against the Net Revenues, and to make all transfers required by the
Master Declaration to the Bond Account, the Bond Reserve Account and the Subordinate Obligations Account,
and to pay any franchise fees or similar charges imposed by the City on the System or its operations.
Coverage Covenants. The City covenants for the benefit of the Owners of all Bonds that it shall charge rates and
fees in connection with the operation of the System which, when combined with other Gross Revenues:
(1) but without regard to system development charges, are adequate to generate Net Revenues each Fiscal Year
at least equal to one hundred and ten percent (100.00 %) of Annual Bond Debt Service due in that Fiscal Year;
and
(2) are adequate to generate Net Revenues each Fiscal Year at least equal to one hundred twenty -five percent
(125.00 %) of Annual Bond Debt Service due in that Fiscal Year.
Report. Not later than 60 days after the end of each Fiscal Year, the City shall determine whether it complied
with the Coverage Covenants, based on the financial information available to the City at that time. If the report
demonstrates that the City has not complied with the Coverage Covenant during that Fiscal Year, it shall not
constitute an Event of Default if within 120 days after the beginning of the subsequent Fiscal Year, the City
implements the recommendations of a Qualified Consultant that is engaged by the City to deliver written
recommendations for a schedule of rates and charges or other actions which the Qualified Consultant
reasonably projects will permit the City to comply with the Rate Covenants for the remainder of the Fiscal Year
in which the recommendations are delivered to the City (with calculations for the partial year made on an
annualized basis).
For a complete description of the Master Declaration covenants, see "APPENDIX F -- Master Declaration" herein.
9
.:
Projected Coverage
IFicrAl Vaare Fnrlinp tuna Rnl
(1) Excludes equipment reserve transfers
Note: The Refundable Bonds did not have rate covenants therefore no historical coverage information is provided in the Feasibility Report (See Appendix G). The projected
coverage assumes the payment of all Refundable Bonds on the redemption /prepayment dates indicated under Refunding Procedure.
Source: Feasibility Study, Galardi Rothstein Group. September 2011248
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167
2011
2012
2013
2014
2015
2016
Beginning Balance
$580,544
$722,786
$588,632
$917,752
$249,854
$256,662
Sales Revenue (existing rates)
4,930,488
4,738,199
4,766,628
4,795,228
4,823,999
4,852,943
Subtotal Additional Revenue
$510,365
$1,126,003
$1,693,201
$2,320,726
$3,014,722
$3,459,789
Septage Dumping
1 02,81 7
1 02,81 7
102,817
1 02,81 7
1 02,81 7
1 02,81 7
Total Rate Revenue
5,543,670
5,967,019
6,562,646
7,218,771
7,941,539
8,415,549
15.2%
7.6%
10.0%
10.0%
10.0%
6.0%
Other Revenue
96,302
100,579
244,312
195,887
124,724
140,391
SDCs
12,301
15,000
15,000
25,000
25,000
25,000
Collections
-
-
-
-
-
-
Late Fees
78,723
78,000
78,460
78,923
79,389
79,857
Sewer Discharge Fines
-
250
251
253
254
256
Interest from Investment
3,692
4,829
148,086
89,181
17,537
32,718
Other Miscellaneous Income
1,586
2,500
2,515
2,530
2,545
2,560
Total Resources
$5,639,972
$6,067,599
$6,806,958
$7,414,658
$8,066,263
$8,555,940
Revenue Requirements
Personnel & M&S
$2,148,270
$2,438,715
$2,511,876
$2,587,233
$2,664,850
$2,744,795
O &MAdjustmems
-
10,609
43,709
85,539
121,956
125,614
Transfers
630,442
545,000
561,350
578,191
595,536
613,402
Operation& Maintenance Costs (1)
$2,778,712
$2,994,324
$3,116,936
$3,250,962
$3,382,342
$3,483,812
Net Revenue Avail. For Debt Service
$2,861,260
$3,073,275
$3,690,023
$4,163,696
$4,683,921
$5,072,128
Debt Service
Sr. Lien
-
$1,838,209
$2,952,206
$3,318,806
$3,727,606
$4,050,931
Existing (Subordinate)
$2,340,248
$1,111,892
-
-
-
Debt Service
$2,340,248
$2,950,101
$2,952,206
$3,318,806
$3,727,606
$4,050,931
Sr. Lien Debt Service Coverage
no
1.67
1.25
1.25
1.26
1.25
Subordinate Debt Coverage
1.22
1.11
no
no
no
no
Construction Fund Interest Adjustment
($13,968)
($10,331)
($157,199)
($105,004)
($40,038)
$44,849
Subtotal Other Sources of Funds
($13,968)
($10,331)
($157,199)
($105,004)
($40,038)
$44,849
Other Expenditures
Equipment Reserve Transfers & Interfund Loan
$70,000
$246,997
$251,497
$256,132
$260,906
$265,823
Other Financing
-
-
-
-
-
-
CapitalProjectsTransfer
-
-
-
$1,151,652
$648,563
$794,903
Total Other Expenditures
$70,000
$246,997
$251,497
$1,407,784
$909,469
$1,060,726
Total Requirements
$5,188,960
$6,191,422
$6,320,639
$7,977,553
$8,019,417
$8,595,469
Ending Operating Balance
$1,017,588
$588,632
$917,752
$249,853
$256,661
$261,981
Ending Construction Fund Balance (Unreserved)
$226,491
$12,912,157
$6,677,447
$155,577
$939,347
$44,154
Coverage without SDC
1.66
1.24
1.25
1.25
1.25
(1) Excludes equipment reserve transfers
Note: The Refundable Bonds did not have rate covenants therefore no historical coverage information is provided in the Feasibility Report (See Appendix G). The projected
coverage assumes the payment of all Refundable Bonds on the redemption /prepayment dates indicated under Refunding Procedure.
Source: Feasibility Study, Galardi Rothstein Group. September 2011248
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167
Funds and Accounts
The Bond Account. A Bond Account has been created in the Wastewater Fund. Until all Bonds are paid or
defeased, amounts in the Bond Account shall be used only to pay Bonds. The City shall transfer sufficient
amounts from the Bond Account to the Registrar and paying agent one business day prior to payment date in
time to permit payment all Bond principal, interest and premium (if any) when due in accordance with the
Bonds. Amounts in the Bond Account shall be invested only in Permitted Investments. Earnings on the Bond
Account shall be credited to the Bond Account.
The Bond Reserve Account. A Bond Reserve Account has been created in the Wastewater Fund. The Bond
Reserve Account shall be held by the City and the City may create subaccounts in the Bond Reserve Account to
secure the Bonds. When each subaccount is created, the City shall determine whether the subaccount will
secure one or more Series of Bonds. If the City creates a subaccount in the Bond Reserve Account, the City shall,
before it issues the first Series of Bonds that is secured by that subaccount, establish the Reserve Requirement
for that subaccount and pledge amounts credited to that subaccount to pay the Bonds that are secured by that
subaccount.
The First Reserve Subaccount . The City created the First Reserve Subaccount in the Bond Reserve Account to
secure only the Bonds and any subsequent Series of Bonds which the City elects to secure with the First Reserve
Subaccount. At Closing of each Series Bonds that are secured by the First Reserve Subaccount, the City shall
deposit into the First Reserve Subaccount an amount sufficient to make the balance in the First Reserve
Subaccount equal to the First Reserve Subaccount Reserve Requirement, calculated as if the Series of Bonds
being closed is Outstanding. "First Reserve Subaccount Reserve Requirement" means the lesser of: (a)
Maximum Annual Bond Debt Service on all Outstanding Bonds that are secured by the First Reserve Subaccount,
or (b) the amount that was required to be in the First Reserve Subaccount immediately before a Series of Bonds
that is secured by the First Reserve Subaccount is issued, plus the Tax Maximum for that Series of Bonds.
Maximum Annual Bond Debt Service on all Outstanding Bonds that are secured by the First Reserve Subaccount
shall be recalculated as of each First Reserve Subaccount Valuation Date. "Tax Maximum" means, for any Series
of Bonds, the lesser of: the greatest amount of principal, interest and premium, if any, required to be paid in any
Fiscal Year on such Series; 125% of average amount of principal, interest and premium, if any, required to be
paid on such Series during all Fiscal Years in which such Series will be Outstanding, calculated as of the date of
issuance of such Series; or, ten percent of the proceeds of such Series, as "proceeds" is defined for purposes of
Section 148(d) of the Code.
On the date of closing of the Bonds, the First Reserve Subaccount Reserve Requirement is equal to $
, which is the on the Bonds as of the date of Closing of the Bonds.
The First Reserve Subaccount and the moneys therein have been irrevocably pledged to the payment of the
Bonds and any future Bonds that the City may elect to secure with the First Reserve Subaccount.
If the balance in the First Reserve Subaccount on a First Reserve Subaccount Valuation Date is less than the First
Reserve Subaccount Reserve Requirement, the City shall begin making transfers of Gross Revenues to the First
Reserve Subaccount in accordance with the authorized flow of funds in the Master Declaration.
Flow of Funds. The City shall apply Gross Revenues for the following purposes and in the following order of
priority:
First, to pay Operating Expenses;
Second, to pay the principal and interest on any Bonds;
Third, to replenish subaccounts in the Bond Reserve Account;
Fourth, to pay rebates and penalties on the Bonds;
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168
Fifth, to pay the principal and interest on any Subordinate Obligations, if any;
Sixth, to make transfers to the Rate Stabilization Fund or to spend Net Revenues on any lawful purpose.
Rate Stabilization Fund. The City shall establish and maintain the Rate Stabilization Fund as long as the Bonds are
Outstanding. Net Revenues may be transferred to the Rate Stabilization Fund at the option of the City. Money
in the Rate Stabilization Fund may be withdrawn at any time and used for any purpose for which the Gross
Revenues may be used. Deposits to the Rate Stabilization Fund increase Operating Expenses for the Fiscal Year in
which the deposit is made. Withdrawals from the Rate Stabilization Fund increase Gross Revenues for the Fiscal
Year in which the withdrawal is made. The City may adjust deposits to and withdrawals from the Rate
Stabilization Fund for a Fiscal Year at any time prior to the date on which the audit for that Fiscal Year is finalized.
Earnings on the Rate Stabilization Fund shall be credited to the Wastewater Fund.
Parity Bonds
The City may issue Parity Bonds to provide funds for any purpose relating to the System, but only if:
(1) No Event of Default under the Master Declaration has occurred and is continuing; and
(2) At the time of the issuance of the Parity Bonds there is no deficiency in the Bond Account and the
balance in the Bond Reserve Account is at least equal to the Reserve Requirement; and
(3) There shall have been filed with the City either:
a. A certificate of the City Official stating that Net Revenues (adjusted as provided in Section 7.2 of
the Master Declaration) for the Base Period were not less than one hundred and twenty -five
percent (125 %) of the average Annual Debt Service on all then Outstanding Bonds, with the
proposed Parity Bonds treated as Outstanding; or
b. A certificate or opinion of a Qualified Consultant:
i. Stating the amount of the Adjusted Net Revenues for each of the five Fiscal Years after
the last Fiscal Year for which interest on the Parity Bonds is, or is expected to be,
capitalized, or, if interest will not be capitalized, for each of the five Fiscal Years after the
proposed Parity Bonds are issued; and
ii. Concluding that the respective amounts of Adjusted Net Revenues in each of the first
four Fiscal Years described (i) above are at least equal to one hundred twenty -five
percent (125.00 %) of the Annual Bond Debt Service for each of those respective Fiscal
Years on all Outstanding Bonds, with the proposed Parity Bonds treated as Outstanding;
and
iii. Concluding that the amount of Adjusted Net Revenues in the fifth Fiscal Year described
in (i) above is at least equal to one hundred twenty -five percent (125.00 %) of the
average Annual Bond Debt Service, calculated for the period beginning with that fifth
Fiscal Year on all then Outstanding Bonds, with the proposed Parity Bonds treated as
Outstanding.
See Appendix F for the complete text of the Master Declaration.
Subordinate Bonds
The City may issue Subordinate Bonds as provided in the Master Declaration.
Other Bond Covenants
A complete description of the Master Declaration covenants is provided in "APPENDIX F -- Master Declaration"
herein. Select Master Declaration covenants for the benefit of the Owners of all Outstanding Bonds follows:
Payment of Bonds. The City shall promptly cause the principal, premium, if any, and interest on the Bonds to be
paid as they become due.
Books and Records. The City shall maintain complete books and records relating to the operation of the System
12
169
and all City funds and accounts in accordance with generally accepted accounting principles applicable to the
System.
No Superior Liens. The City shall not issue obligations having a claim superior to the claim of the Bonds upon the
Net Revenues.
Deposits. The City shall promptly deposit into all funds and accounts all sums required to be deposited.
Operation of the System. The City shall work in good faith to cause the System to be operated at all times in a
safe, sound, efficient and economic manner in compliance with all health, safety and environmental laws,
regulatory body rules, regulatory body orders and court orders applicable to the City's operation and ownership
of the System. The City shall maintain the System in good repair, working order and condition. The City shall not
enter into any agreement to provide System products or services at a discount from published rate schedules,
and that it will not provide free System products or services except in the case of emergencies.
Insurance. The City shall at all times maintain with responsible insurers all such insurance on the System as is
customarily maintained with respect to works and properties of like character against accident to, loss of or
damage to such works or properties. The net proceeds of insurance against material accident to or material
destruction of the System shall be used to repair or rebuild the damaged or destroyed System, and to the extent
not so applied, will be applied to the payment or redemption of the Bonds.
Sole or Transfer of System Property. The City shall not, nor will it permit others to, sell, mortgage, lease or
otherwise dispose of or encumber all or any portion of the System except as allowed in the Master Declaration.
Events to Default provision
Default provisions and remedies are provided in Section 11 of the Master Declaration. If an Event of Default
occurs, any Owner may exercise any remedy available at law or in equity; however, the Bonds shall not be
subject to acceleration.
THE CITY
The City of Woodburn was incorporated in 1889. The City is located in northwestern Oregon and is a part of the
Salem Metropolitan Statistical Area. It encompasses approximately 5.2 square miles.
The City is overseen by a seven member City Council (the "Council ") under the constitution and laws of the State
of Oregon and the City's Home Rule Charter. The Council is composed of a Mayor and six elected Council
members. Council member positions are for a term of four years with overlapping terms to provide for the
election of three new council members every two years. The Mayor is the presiding officer of the Council and is
elected City -wide for a two -year term.
The Council appoints a City Administrator who is the chief administrative officer of the City. The City
Administrator appoints, with the consent of the Council, the heads of all City departments, including the Finance
Director and the Public Works Director. The Finance Director supervises the financial affairs of the City and is
responsible for operating a general accounting system for City government in conformity with generally
accepted accounting principles and practices, and for receipt, custody and disbursement of all City funds and
monies. The Public Works Director plans, organizes, and directs activities of the Public Works Department.
Divisions within the Public Works Department include Administration, Engineering, Maintenance, Water
Resources and Transportation.
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170
The current Mayor and City Council are listed below:
Mavor and Citv Council
Kathy Figley Mayor Title Company Asst Vice President /Advisory Title Officer
Dick Pugh Councilor - Ward 1 Chief Financial Officer
Mel Schmidt Councilor - Ward 2 Farmer
Pete McCallum Councilor - Ward 3 Retired High School Principal
Jim Cox Councilor - Ward 4 Attorney
Frank Lonergan Councilor - Ward 5 General Manager — Solid Waste Hauling Division
Eric Morris Councilor - Ward 6 Retired Navy Intelligence Specialist
Administration
The three City officials most closely associated with the operation of the System are:
1/1/2008 12/31/2012
1/1/2006 12/31/2012
1/1/2008 12/31/2012
1/1/2008 12/31/2014
1/1/2008 12/31/2014
1/1/2006 12/31/2014
1/1/2006 12/31/2012
Scott Derickson, City Administrator. Mr. Derickson has served as the City Administrator since September 2008.
Prior to working for the City, he served as Manager for Clatsop County, Oregon. Mr. Derickson earned his
Bachelor's degree in Planning, Public Policy and Management and his Master's degree in Public Administration,
both from the University of Oregon.
Ignacio Palacios, Finance Director. Mr. Palacios has served as the City's Finance Director since November 30,
2009 Prior to working for the City, he served as the Finance Director for the City of Milwaukie, Oregon and
previously served as an auditor for Grove, Mueller and Swank (a local public accounting firm) and was
responsible for managing multiple audits of local municipal governments, school and special districts. Mr.
Palacios earned his degree in Business Administration (accounting emphasis) from Oregon State University.
Dan Brown, Public Works Director. Mr. Brown has served as the City's Public Works Director since February
2008. Prior to working for the City, he served as Capital Projects Division Manager for Washington County,
Oregon. Mr. Brown earned his Bachelor of Science degree in Civil Engineering from the U.S. Coast Guard
Academy and his Masters of Science degree in Civil Engineering from the University of Illinois. Mr. Brown also
holds a Masters of Business Administration degree from Southern Illinois University at Edwardsville.
Bargaining Units
The City has 138 full -time employees and 26 part -time employees. Bargaining units which represent City
employees are as follows:
Bargaining Units
American Federation of State, County
& Municipal Employees (AFSCME)
Woodburn Police Association
62.5 June 30, 2012
24 June 30, 2012
BONDED INDEBTEDNESS
Revenue Bonds. The City may issue revenue bonds pursuant to ORS 287 A.150. The Bonds are revenue bonds
secured by revenues of the System (please see "Description of the 2010 Sewer Bonds - Security' herein).
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171
General Obligation Bonds. ORS 287A.050 establishes a limit on the amount of general obligation bonds a city
may issue. Cities may issue an aggregate principal amount up to three percent of the Real Market Value of all
taxable properties within the city. A lower limit may be applied by an individual city's charter. The statutory
limitation does not apply to general obligation bonds issued for water supply, treatment or distribution; sanitary
or storm sewage collection or treatment; hospitals or infirmaries; gas, power or lighting; or off - street motor
vehicle parking facilities. The limitation also does not apply to bonds issued to finance the costs of local
improvements assessed and paid for in installments under statutory or charter authority. The Bonds are not
general obligation bonds.
Limited -tax Debt. The Oregon Constitution and statutes and charter of the City do not limit the amount of
limited -tax debt the City may incur. Collection of property taxes to pay principal and interest on such limited tax
debt is subject to the limitations of Article XI, Sections 11 and 11b. The Bonds are not limited tax debt.
Pension Bonds. ORS 238.694 authorizes local governments to issue full faith and credit obligations to pay pension
liabilities without limitation as to principal amount. Pension bonds are not general obligations as defined under
State law and the City is not authorized to levy additional taxes to make pension bond payments. The Bonds are
not pension bonds.
Notes. The City may issue revenue bonds in anticipation of tax revenues or other monies in an amount which, in
the aggregate, equal up to 80% the taxes or other revenues except grant monies that the City has budgeted or
otherwise reasonably expects to have available to pay the revenue bonds. Such notes must mature within 13
months, pursuant to ORS 287 A.180. The Bonds are not notes.
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172
Dutstanding Long -Term Debt
A"i Afth
Original
Amount
Outstanding
Amount
Governmental Activities
General Obligation Bonds
Series 2003 (Water)
2028
$ 8,A00,000
$
6,778,6A8
Series 2005
2025
6,915,000
5,930,000
Subtotal General Obligation Bonds
$
12,708,648
Urban Renewal Bonds
Bank of America Loan
2015
$ 1,736,565
$
1,067,393
Subtotal Urban Renewal Bonds
$
1,067,393
Full Faith and Credit Obligations
OBDD Loan. No. B97002
2018
$ A50,000
$
228,A68
Subtotal Full Faith and Credit Obligations
$
228,468
Business -Type Activities
Water Revenue Bonds
SDWRF Loan No. 502010 (3)
2011
(2)
$ A,000,000
$
2,597,1 20
OEDD Loan No. Y02007
2025
A,000,000
2,877,1 32
Subtotal Water Revenue Bonds
$
5,474,252
Wastewater Revenue Bonds
Loan No. R98A11
2011
(2)
$A,000,000
$
2,122,A22
Less: Refunded Loan
(2,122,A22)
Loan No. R98A 12
2011
(2)
25,969,671
16,971,572
Less: Refunded Loan
(16,971,572)
Loan No. R98A13
2011
(2)
700,000
370,80A
Less: Refunded Loan
(370,80A)
Loan No. R98A1A
2011
(2)
1,110,156
191,2A1
Less: Refunded Loan
(191,2A1)
Loan No. G98002
2011
(2)
515,000
271,A86
Less: Refunded Loan
(271,A86)
Series 201 1 A (1)
2031
30,A90,000
30,A90,000
Series 201 1 B (1)
2023
3,A88,952
3,A88,952
Loan No. B91202
2012
307,666
53,117
Subtotal Wastewater Revenue Bonds
$
34,032,069
(1) The Bonds. Preliminary, subject to change.
(2) Proposed redemption date. Preliminary, subject to change.
(3) The City plans to refinance its Loan No. 502010 with Water Revenue Refunding Bonds, Series 2011 that may be issued simultaneously with the
Bonds under a separate issuance process.
Source: City and City's Audited Financial Report for the Fiscal Year ended June 30, 2010
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173
Debt Service Requirements
The following tables show the debt service on the Bonds and on the Refunded Bonds.
Sewer Fund Debt Service Requirements
(1) The debt service schedule is provided for illustrative purposes only and is preliminary and subject to change
Source: City and City's Audited Financial Report for the Fiscal Year ended June 30, 2010 and this issue.
Debt Payment Record
The City has never defaulted on a payment of principal or interest on any of its bonds or obligations.
Furthermore, the City has never issued refunding bonds for the purpose of avoiding an impending default.
Future Financing
Following the issuance of the Bonds, the City does not expect to issue additional wastewater revenue debt
within the next twelve months.
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174
Refundable Bonds Outstanding
Less: Refundable Bonds
Series 2011A Bonds"
Series 20116 Bonds
2012
$ 1,740,434 $ 757,051
$ (1,740,434) $ (757,051)
$ 1,305,000 $ 533,209
$ $
73,727,606
2013
1,854,853 641,443
(1,854,853) (641,443)
1,835,000 1,117,206
2014
1,923,440 574,649
(1,923,440) (574,649)
1,905,000 1,043,806
352,314 17,6 2015
1,994,521 505,340
(1,994,521) (505,340)
1,980,000 967,606
722,366 57,6
2016
1,880,420 433,698
(1,880,420) (433,698)
2,470,000 908,206
- -
3,378,206
2017
1,947,775 360,846
(1,947,775) (360,846)
2,680,000 846,456
3,526,456
2018
2,034,907 285,214
(2,034,907) (285,214)
3,040,000 779,456
3,819,456
2019
1,917,953 206,446
(1,917,953) (206,446)
3,435,000 688,256
4,123,256
2020
1,841,052 135,557
(1,841,052) (135,557)
3,795,000 550,856
- -
4,345,856
2021
1,911,730 64,877
(1,911,730) (64,877)
2,890,000 399,056
897,601 437,399
4,624,056
2022
57,521 9,928
(57,521) (9,928)
4,715,000 254,556
- -
4,969,556
2023
58,468 8,981
(58,468) (8,981)
40,000 18,806
1,516,672 1,043,328
2,618,806
2024
59,431 8,018
(59,431) (8,018)
45,000 16,806
- -
61,806
2025
60,410 7,040
(60,410) (7,040)
45,000 15,119
60,119
2026
61,404 6,045
(61,404) (6,045)
50,000 13,319
63,319
2027
62,416 5,034
(62,416) (5,034)
55,000 11,319
66,319
2028
63,443 4,006
(63,443) (4,006)
55,000 9,050
64,050
2029
64,488 2,961
(64,488) (2,961)
60,000 6,713
66,713
2030
65,550 1,899
(65,550) (1,899)
60,000 4,088
64,088
2031
66,630 820
(66,630 (820
30,000 1,388
31,388
$ 19.666.845 4.019.851
$(19.666.8451 4.019.8511
30.490.000 8.185.278
3.488.952 1 556,048
43.720.278
(1) The debt service schedule is provided for illustrative purposes only and is preliminary and subject to change
Source: City and City's Audited Financial Report for the Fiscal Year ended June 30, 2010 and this issue.
Debt Payment Record
The City has never defaulted on a payment of principal or interest on any of its bonds or obligations.
Furthermore, the City has never issued refunding bonds for the purpose of avoiding an impending default.
Future Financing
Following the issuance of the Bonds, the City does not expect to issue additional wastewater revenue debt
within the next twelve months.
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174
THE SEWER SYSTEM
Description of the Sewer Treatment Plant
The City owns and operates a Wastewater Treatment Plant (WWTP) and Collection System located in the
northern part of Marion County. The Treatment Plant Facility is situated off Highway 211 on approximately 140
acres of land, east of Maclaren School for Boys. The treatment facility is an Oregon Class IV System and the
Collection System is an Oregon Class III. The wastewater treatment plant provides primary, secondary, and
tertiary treatment along with effluent reuse. Treated effluent is either discharged to the Pudding River or
irrigated to a poplar tree reuse system. The City provides secondary wastewater treatment from November 1 to
April 30 and tertiary treatment with reuse from May 1 to October 31, depending on receiving stream flow.
The WWTP operations includes activities and tasks that have the potential of affecting the public's health or the
environment. Operator's actions could change the treatment plant's effluent or bio- solids quality. Operational
activities confirm process modes, change process modes, handle treatment plant products, and maintain
product quality. The activities directly determine effluent and biosolids quality that could affect public health.
The activities use the majority of the direct and indirect materials consumed at the Publicly Owned Treatment
Works ( "POTW "). Most POTW energy and chemical use is consumed in process control activities at the
treatment plant and lift stations. POTW operators operate the treatment plant, poplar reuse system, lift stations,
and force mains.
The POTW facility was constructed in 1980 and is located outside the City limits on the west bank of the Pudding
River. The POTW facility is located on 4.5 acres of MacLaren School land leased from the State of Oregon. The
plant was converted from a rotating biological contactor (RBC) facility to a biological nutrient removal (BNR)
facility with the last expansions in 1995 and 1999.
The City is in compliance with all federal and state environmental rules and regulations. The POTW facility is
currently operating under a National Pollutant Discharge Elimination System (NPDES) Permit No. 101558 and an
Oregon Department of Environmental Quality Mutual Agreement Order No. WQ/M -WR -07 -082. The City must
complete necessary capital improvement to comply with the Mutual Agreement Order and recently adopted
Total Maximum Daily Loads established for the Molalla- Pudding Sub - Basin.
Description of the Collection and Transmission System
The City provides sanitary sewage collection and treatment for approximately 23,150 people in a 7.8 square -mile
area (2005 Urban Growth Area) in Marion County, Oregon. The wastewater collection and transmission system
consists of approximately 87 miles of pipe and eight pump stations.
The City's collection system consists of about 461,000 feet (87 miles) of pipe, 1,400 manholes, and eight pump
stations. Pipe diameters range from 4 -inch laterals to 36 -inch interceptors. Over 68 percent of the system is 8
inches in diameter or less.
The wastewater collection and transmission system has been under continual expansion since its placement in
service, beginning in approximately 1910. The City experiences some localized areas of concern in the existing
system because of capacity and condition - elated deficiencies. Strain on the system is expected to increase as
growth occurs and the existing infrastructure moves toward the end of its expected useful life. To guide
anticipated collection system investments, system mapping has been improved and a study prepared to evaluate
the long -term condition and capacity of the collection and transmission system.
A portion of the Bond proceeds will be used to fund various improvements to the Wastewater System,
addressing [some of] the capital needs mentioned above.
Rates and Charges
18
175
System Development Charges ("SDCs"). SDCs are collected from each new service connection to the System.
SDCs are imposed at the time of development or when another permit is granted by the City for connection to
wastewater services or for increased use of the System. Service lines may be installed by the developer or the
City. SDCs are imposed on all development within the city for capital improvements for water and sewer. SDCs
are imposed on any development outside the city boundary for water and sewer capital improvements, if such
development connects to or otherwise uses the city's water or sewer systems. The SDCs shall be paid in addition
to all other fees, charges and assessments due for development, and are intended to provide funds only for
capital improvements necessitated by new development. They are designed so that new development pays its
share of improvements to the System.
The City's Sewer SDCs are based on dwelling units. (Resolution 1321 effective November 1, 1995.)
Devel C-ewer System - System
Per Unit Charge
..
Manufactured Hotel /Motel Hotel /Motel RV Park, Can: Facility, Other Residential
dome in Park without Kitche with Kitchen Per Unit Per Bed Types
Flow (dollars /gallon /day) $ 10.69
BOD (1) (dollars /pound /day) 1,446.42
TSS (2) (dollars /pound /day) 532.14
(1) Biological Oxygen Demand
(2) Total Suspended Solids
Source: City of Woodburn
Sewer Rates. The City sets sewer rates and charges by resolution. Current rates are as follows:
Sewer Rates (use rate and base rate)
(1) The volume charge is only applied when customers exceed the minimum quantity allowance
(2) Equivalent Dwelling Unit
Source: City of Woodburn
19
176
Current
Proposed: FY 2013
Proposed: FY 2014
Use Rate ($ per
Volume Charge ($ per
Use Rate ($ per ..
.•
Customer Class
•. cubic feet)
ccf of water use) (1)
cubic feet)
cubic feet)
Residential
$ 6.58
$ 5.04
$ 7.21
$ 8.65
Multifamily
6.58
5.04
7.21
8.65
Commercial
9.74
7.71
10.67
12.80
Industrial
9.74
7.71
10.67
12.80
Monitored
Flow (dollars /cubic feet)
4.14
3.19
4.55
5.48
BOD (dollars /lb)
0.85
1.19
0.92
1.10
TSS (dollars/lb)
1.00
0.35
1.09
1.30
Minimum Charge ($ /EDU /Month)
Residential
33.98
37.23
44.64
Multifamily
33.98
37.23
44.64
Commercial
46.11
50.30
59.87
Monitored
76.18
83.10
98.90
Industrial
46.11
50.30
59.87
(1) The volume charge is only applied when customers exceed the minimum quantity allowance
(2) Equivalent Dwelling Unit
Source: City of Woodburn
19
176
Billing Procedure. Customers are billed once each month and payments are due about 30 days after the bill is
sent. Accounts not paid by the time the next bill is generated (about 28 days) are assessed a late fee of $10 for
first notice. If same bill is not paid 7 days before the next bill is generated (about 21 days) then customer is sent
shut -off notice for delinquent bill and charged $10. If bill not paid within 5 days of postcard then disconnected.
Customers are charged $25 to reconnect after all fees and bills are paid in full. Accounts remaining unpaid also
receive a delinquent bill and if they remain unpaid after approximately 60 days become subject to disconnection.
Most billing cycles are every four weeks except occasionally there is a five week bill. Meters read the first week
of the month are always read the first week of the month not necessarily every four weeks. City is divided into
four sections and each section is read once a month in a different week.
The following tables present historical customer and sewer charges statistics.
Wastewater Revenue by Customer Class
Source: City of Woodburn
of Woodburn: Top Ten Wastewater Accounts
r ending June 30, ZO
Sabroso Company
Fruit Juice Manufacturer $
Residential
$ 2,813,322
Multifamily
1,030,491
Commercial
1,037,996
Monitored
270,107
Industrial
205,588
Septic
346,003
5,703,507
Total
Source: City of Woodburn
of Woodburn: Top Ten Wastewater Accounts
r ending June 30, ZO
Sabroso Company
Fruit Juice Manufacturer $
167,890
3.45%
MacLaren Youth Correctional Facility
Corrections
134,704
2.77%
WinCo
Distribution Center
51,540
1.06%
Leroy Miller
Laundromat
42,745
0.88%
Townsend Farms
Berry Processor
34,503
0.71%
Country Meadows
Senior MF Residential
32,402
0.67%
Best Western
Hotel
31,299
0.64%
Panor 360
Senior MF Residential
30,377
0.62%
WalMart
Commercial Retail
26,841
0.55%
Safeway
Commercial Retail
26,841
0.55%
Subtotal - Ten largest ratepayers
579,142
1 1.89%
All other City's ratepayers
4,291 ,477
88.11%
Total Wastewater Charges
$
4,870,619
100.00%
Source: City of Woodburn
20
177
A four -year combined summary of the City's Wastewater Treatment Plant Fund and the Wastewater Treatment
Plant Construction Enterprise Fund Statement (collectively, the "Wastewater Funds ") of Net Assets and
Statement of Revenues, Expenditures and Changes in Fund Balance follows:
Wastewater Fund Statement of Net Assets
(Fiscal Years Ended June 30)
Current Assets:
Cash and investments
Restricted cash and investments
Receivables
Inventory
Capital assets:
Land improvements and construction in progress
Other capital assets, net
Total Assets
$ 1,169,140
$ 1,338,089
$ 1,250,264
$ 1,341,100
28,222
28,222
28,222
28,222
253,138
206,730
212,242
221,383
87,966
84,197
55,511
821
1,625,372
1,308,269
1,299,489
1,299,489
37,126,464
38,850,684
37,802,918
39,571,147
- 40,290,302
41,816,191
40,648,646
42,462,162
Current Liabilities:
Accounts payable and accrued items
Due to other funds
Accrued interest payable from restricted assets:
Accounts payable
Compensated absences payable
Current portion of long -term obligations
Long -term obligations
Total Liabilities
Invested in capital assets, net of related debt
Restricted for Capital Projects
Unrestricted
Total Net Assets
Total Liabilities and Net Assets
$ 292,309 $ 166,411 $ 55,612 $ 54,320
482,000 618,605 232,000 346,836
153,474 161,947 173,272 -
-
28,222
28,222
28,222
35,740
36,314
33,996
39,274
1,51 3,534
1,455,727
1,400,192
1,346,839
20,040,749
20,969,929
22,428,034
23,828,226
- 22,517,806
23,437,155
24,351,328
25,643,717
$ 17,217,486
$ 17,733,297
$ 15,274,181
$ 15,695,571
145,804
356,643
776,251
1,223,193
409,206
289,096
246,886
(45,276
$ $ 17,772,496
$ 18,379,036
$ 16,297,318
$ 16,873,488
$ - $ 40,290,302
$ 41,816,191
$ 40,648,646
$ 42,517,205
Source: City of Woodburn - Audited Financial Statements.
21
178
Wastewater Fund
Statement of Revenues, Expenditures and Changes in Fund Balance
(Fiscal Years Ended June 30)
Charges for services
Total Operating Revenues
Personal services
Materials and services
Depreciation
Total Expenses
Excess (Deficiency) of Revenues Over
Expenses
Interest and investment revenue
Other
Interest expense
Gain (loss) on sale of capital assets
Capital Contributions
Transfers:
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Prior Period Adjustment
Beginning Fund Balance
Ending Fund Balance
4,475,410 3,963,546 3,786,243 3,655,497
4,475,410 3,963,546 3,786,243 3,655,497
$ 1,055,337
$ 965,515
$ 929,431
$ 873,010
1,516,178
1,177,277
1,017,432
804,005
1,862,636
1,855,678
1,887,944
1,926,607
4,434,151
3,998,470
3,834,807
3,603,622
41,259
(34,924
(48,564
51,875
17,977
35,473
52,169
47,788
9,052
19,404
27,007
1,850
(676,746)
(719,090)
(283,316)
(762,230)
(2,663)
(475)
-
-
691,387
-
115,076
1,329,002
3,604,736
1,466,554
1,526,125
(1,324,421
(1,514,793
(1,790,020
(1,735,613
(647,799
2,116,642
(527,606
(807,004
(606,540
2,081,718
(576,170
(755,129
18,379,036
16,297,318
16,873,488
17,628,617
$ $ 17,772,496
$ 18,379,036
$ 16,297,318
$ 16,873,488
Source: City of Woodburn - Audited Financial Statements.
22
179
FINANCIAL INFORMATION
Financial Reporting and Accounting Policies
The City's basic financial statements were prepared in conformity with GAAP as prescribed by the Governmental
Accounting Standards Board ( "GASB ").
The City follows the "governmental activities" and "business -type activities" reporting requirements of GASB -34
that provides a comprehensive two - column look at the City's financial activities. In addition, the City provides
financial statements by funds, divided into two categories: governmental funds and proprietary funds.
Additional information on the City's accounting methods is available in the City's audited financial statements. A
copy of the City's audited financial report for Fiscal Year 2010 is attached hereto as Appendix D.
Description of Select Funds
Funds are classified into two categories: governmental and proprietary. Each category, in turn, is divided into
separate fund types.
Governmental Funds. The General Fund, the Street Fund, the Transportation Impact Fee Fund and the Police
Construction Fund are major governmental funds.
Proprietary Funds. The City maintains two different types of proprietary funds. Enterprise funds are used to
report the same functions presented as business -type activities in the government -wide financial statements.
The City uses its enterprise funds to account for its sewer and water utilities. Internal service funds are an
accounting device used to accumulate and allocate costs internally among the City's various functions. The City
uses internal service funds to account for its insurance, information systems, central stores, Public Works
administration, and building maintenance operations. The Wastewater Fund is a proprietary fund reported as an
enterprise fund.
Auditing
Each Oregon municipal corporation must obtain an audit and examination of its funds and account groups at
least once each year pursuant to the Oregon Municipal Audit Law, ORS 297.405- 297.555. Municipalities having
annual expenditures of less than $500,000, with the exception of counties and school districts, are exempt from
this requirement. All Oregon counties and school districts, regardless of amount of annual expenditures, must
obtain an audit annually. The required audit may be performed by the State Division of Audits or by
independent public accountants certified by the State as capable of auditing municipal corporations.
The City's audits for the Fiscal Years 2005 through 2009 were performed by Boldt, Carlisle & Smith LLC, CPAs in
Salem, Oregon (the "Auditor'). The City's audit for the Fiscal Year 2010 was performed by Grove, Mueller &
Swank, P.C., in Salem, Oregon ( "City Audited Financial Statements ") The audit report for Fiscal Year 2010
indicates the financial statements, in all material respects, fairly present the City's financial position of the
governmental activities, the business -type activities, each major fund and the aggregate remaining fund
information and the respective changes in financial position and the cash flows, where applicable, in
conformance with accounting principles generally accepted in the United States of America. The Auditor was
not requested to review this Preliminary Official Statement.
Future financial statements may be ordered by contacting the Municipal Securities Rulemaking Board's
Electronic Municipal Market Access ( "EMMA ") system, a free, centralized repository located at:
www.emma.msrb.org.
23
180
Summaries of the City's Net Assets and Changes in Net Assets follow:
Government -wide Statement of Net Assets
(Fiscal Years Ended June 30)
Governmental Activities
Cash and investments
Restricted cash & investments
Receivables, net
Prepaid items
Internal balances
Due from fiduciary funds
Inventories
Capital assets:
Land, improvements & construction in progress
Other capital assets, net of depreciation
Total Assets
$ 17,661,642 $ 19,689,297 $ 18,488,397 $ 19,407,111
1,806,257
1,836,946
1,843,309
2,034,473
1,827
4,074
2,311
-
318,227
352,938
(4,459)
(87,271)
120,668
40,292
50,249
49,647
8,971
11,718
11,065
8,830
32,573,801 29,290,379 29,173,408 26,887,590
19,658,207 20,698,061 21,944,925 19,595,218
72,149,600 71,923,705 71,509,205 67,895,598
$ 8,516,281 $ 8,271,414 $ 7,386,123 $ 7,274,193
181,794 203,194 211,361 216,160
468,765 382,157 472,939 447,522
(318,227) (352,938) 4,459 87,271
218,527 217,562 160,364 171,492
2,100,919 1,783,816 1,775,036 1,775,036
59,933,419 62,199,261 60,468,230 61,743,483
71,101,478 72,704,466 7 0,478,512 71,715,157
Accounts payable and accrued items
Accrued interest payable
Liabilities payable from restricted cash & investments
Accounts Payable
Customer Deposits
Net other post- employment benefit obligation
Long -term obilgations:
Due within one year
Due in more than one year
Total Liabilities
Invested in capital assets, net of related debt
Restricted for:
Capital projects
Debt service
Highways and streets
Unreserved
Total Net Assets
$ 434,033 $ 312,638 $ 388,058 $ 1,097,272
17,533 20,400 24,117 38,389
$ 314,593 $ 207,751 $ 124,851 $ 87,764
501,304 522,891 543,439 727,542
- - - - 51,252 77,753 99,842 100,819
- - - 2,000 100,318 121,445 111,519 115,341
209,409 - - - 36,781 - - -
896,218 996,884 979,158 928,149 2,140,356 2,068,632 1,988,299 1,920,994
7,225,861 7,687,665 8,293,675 8,882,996 33,615,147 35,140,677 37,124,928 39,039,980
8,783,054 9,017,587 9,685,008 10,948,806 36,759,751 38,139,149 39,992,878 41,992,440
$ 44,544,343 $ 42,295,398 $ 42,853,412 $ 39,705,627 1 $ 26,312,074 $ 26,848,613 $ 23,203,286 $ 22,634,520
7,792,376
7,426,115
6,535,764
5,716,718
7,430,872 6,981,784 6,603,194
6,630,058
1,292,990
2,599,021
2,178,147
1,895,487
- - -
-
422,186
1,222,492
1,006,854
796,657
- - -
-
9,314,651
9,363,092
9,250,020
8,832,303
598,781 734,920 679,154
458,139
$ $ 63,366,546
$ 62,906,118
$ 61,824,197
$ 56,946,792
S
$ 34,341,727 $ 34,565,317 $ 30,485,634
S 29,722,717
Total Liabilities and Net Assets $ - $ 72,149,600 $ 71,923,705 $ 71,509,205 $ 67,895,598 I $ - $ 71,101,478 L72,704,466 L70,478,512 $ 71,715,157
NOTE: The Net Assets presents information on all the City's assets and liabilities with the difference between the two reported as net assets.
Source: City of Woodburn - Audited Financial Statements.
24
181
Government -wide Statement of Activities
(Fiscal Years Ended June 30)
Revenues:
2010
CaovernW Activities
2009 2008 2007
2006
2010
Business -Type Activities
2009 2008
2007
2006
Program Revenues:
Charges for Services
1,117,504
$ 1,316,578
$ 1,230,462
$ 1,253,124
7,955,969
$ 7,398,719
$
7,156,020
$ 6,628,824
Operating Grants and Contributions
202,993
67,844
61,905
41,320
-
-
-
-
Capital Grants and Contributions
832,398
1,218,026
3,246,398
1,588,976
657,966
1,956,754
1,048,849
1,032,035
Total Program Revenues
$
$ 2,152,895
$ 2,602,448
$ 4,538,765
$ 2,883,420
$
$ 8,613,935
$ 9,355,473
$
8,204,869
$ 7,660,859
General Revenues.
Taxes
Property taxes levied for:
General purposes
7,212,614
6,899,237
6,488,533
6,155,967
-
-
-
-
Debt service
1,197,527
1,159,000
1,112,146
1,096,696
-
-
-
-
Franchise taxes
1,433,900
1,481,352
1,499,451
1,173,532
-
-
-
-
Transient room taxes
270,987
238,518
223,713
217,962
-
-
-
-
Other grants and contributions
not restricted to specific programs
1,560,920
1,657,645
1,831,535
1,604,256
-
-
-
-
Unrestricted investment earnings
168,744
824,599
937,467
865,329
166,905
318,139
347,549
288,393
Miscellaneous
746,488
681,107
618,788
1,486,839
11,621
33,083
42,519
6,038
(Loss) on sales of capital assets
(26,999)
-
-
(100,265)
(2,663)
(475)
-
(1,909)
Transfers
(22,120
(2,102,405
(14,715
148,424
22,120
2,102,405
14,715
(148,424
Total General Revenues
S
$ 12,542,061
S 10,839,053
S 12,696,918
S 12,648,740
S
S 197,983
5 2,453,152
S
404,783
S 144,098
Total Revenues
$
$ 14,694,956
$ 13,441,501
$ 17,235,683
$ 15,532,160
$
$ 8,811,918
5 -
$ 11,808,625
5 -
$
S
8,609,652
-
$ 7,804,957
S -
General Government $ 3,756,371 $ 3,187,844 $ 3,069,307 $ 3,107,732
Public Safety
5,307,214
4,733,832
4,436,137
3,677,876
-
-
-
-
Highways and Streets
2,551,235
2,021,108
2,335,596
1,673,231
-
-
-
-
Culture and Recreation
2,303,144
2,063,918
2,079,553
2,751,432
-
-
-
-
Interest on Long -Term Debt
373,223
385,042
437,685
401,155
-
-
-
-
Water
-
-
-
-
3,153,158
3,150,421
2,733,439
3,028,249
Sewer
5,882,350
5,357,459
5,113,296
5,040,183
Total Expenses
5
5 14,291,187
5 12,391,744
S 12,358,278
$ 11,611,426
$
S 9,035,508
5 8,507,880
$
7,846,735
$ 8,068,432
Increase (Decrease) in Net Assets
403,769
1,049,757
4,877,405
3,920,734
(223,590)
3,282,745
762,917
(263,875)
Prior Period Adjustment
56,659
32,164
-
-
-
795,001
-
-
Net Assets - July 1
62,906,118
61,824,197
56,946,792
53,026,058
34,565,317
30,487,571
29,722,717
29,986,592
Total Net Assets
$
0 $ 63,366,546
$ 62,906,118
$ 61,824,197
$ 56,946,792
$ 0
$ 34,341,727
$ 34,565,317
$
30,485,634
$ 29,722,717
NOTE: The Statement of Revenues, Expenses and Changes in Net Assets presents information showing how the City's net assets changed during a given Fiscal Year. All changes in net assets are
reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Revenues and expenses are reported in this statement for some items
that will result in cash flows in future periods, such as uncollected taxes and earned, but unused, vacation leave.
Source: City of Woodburn - Audited Financial Statements.
25
182
Budgetary Process
The City prepares an annual budget in accordance with Oregon Local Budget Law (ORS Chapter 294) which
establishes standard procedures for all budget functions for Oregon local governments. Under the applicable
provisions, there must be public participation in the budget process and the adopted budget must be balanced.
The City's administrative staff evaluates the budget requests of the various departments of the City to
determine the funding levels of the operating programs. The budget is presented to the public through public
hearings held by a budget committee consisting of City Council members and lay members. After giving due
consideration to the input received from the citizens, the City Council adopts the budget, authorizes the levying
of taxes and sets appropriations. The budget must be adopted no later than June 30 of each Fiscal Year.
The budget may be amended during the applicable Fiscal Year through the adoption of a supplemental budget.
Supplemental budgets may be adopted by the Board pursuant to ORS 294.480.
General Fund Adopted Budget
(Fiscal Years Ended June 30)
Property Taxes
$ 8,216,943
$ 8,305,561
$ 8,326,000
$ 8,485,000
Licenses and Permits
498,928
468,849
605,116
639,193
Franchise Fees
1,015,997
1,060,617
1,061,000
1,035,800
Intergovernmental
2,256,772
2,683,523
3,555,398
2,478,987
Fines and Forfeits
563,395
744,280
508,500
588,250
Charges for goods and services
10,231,202
9,871,203
10,424,664
10,733,055
Other Financing Sources
577,749
706,176
5,206,864
3,445,441
Misc
3,847,864
2,417,984
2,067,077
2,067,523
Transfers In
1,992,742
1,373,259
1,741,109
1,931,677
Beginning Fund Balance
25,887,290
25,504,574
20,923,091
17,724,323
Total Resources
$55,088,882
$ 53,136,026
$54,418,819
$ 49,129,249
Labor and Benefits
$ 12,119,880
$ 11,607,108
$ 13,360,A75
$ 13,558,093
Supplies and Services
7,1 20,700
8,156,299
10,586,1 53
10,581,814
Capital Outlay
4,190,888
5,501,537
14,380,573
8,333,951
Transfers Out
1,992,743
1,373,259
2,493,042
2,062,449
Debt Service
4,294,21 9
4,1 17,709
4,257,356
4,248,068
Continuing & Unappropriated Fund Balance
0
73,000
9,341,220
10,344,874
Ending Balance
25,370,453
22,307,1 15
0
0
Total Expenditures
$55,088,883
$ 53,136,027
$54,418,819
$ 49,129,249
Source: City of Woodburn — 2011 -2012 Adopted Budget.
Investments
ORS 294.035 authorizes Oregon municipalities to invest in obligations, ranging from U.S. Treasury obligations
and Agency securities to municipal obligations, bankers' acceptances, commercial paper, certificates of deposit,
corporate debt and guaranteed investment contracts, all subject to certain size and maturity limitations. No
municipality may have investments with maturities in excess of 18 months without adopting a written
investment policy which has been reviewed and approved by the Oregon Short Term Fund Board. ORS 294.052
authorizes Oregon municipalities to invest proceeds of bonds or certificates of participation and amounts held in
a fund or account for such bonds or certificates of participation under investment agreements if the
agreements: (i) produce a guaranteed rate of return; (ii) are fully collateralized by direct obligations of, or
obligations guaranteed by, the United States; and (iii) require that the collateral be held by the municipality, an
agent of the municipality or a third -party safekeeping agent.
Municipalities are also authorized to invest approximately $43.1 million (adjusted for inflation) in the Local
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Government Investment Pool of the Oregon Short -Term Fund, which is managed by the State Treasurer's office.
Such investments are managed in accordance with the "prudent person rule" (ORS 293.726) and administrative
regulations of the State Treasurer which may change from time to time. Eligible investments presently include
all of those listed above, as well as repurchase agreements and reverse repurchase agreements. A listing of
investments held by the Oregon Short -Term Fund is available on the Oregon State Treasury website under
"Other OSTF Reports — OSTF Detailed Monthly Reports" at
www.ost.state.or.us/about/boards/OSTF/About.htm (1)
Pension System
General. Substantially all City employees after six full months of employment are participants in one of three
retirement pension benefit programs under the State of Oregon Public Employees Retirement System ( "PERS" or
the "System ") — the Tier 1 and Tier 2 pension programs (the "T1 /T2 Pension Programs ") or the Oregon Public
Service Retirement Plan ( "OPSRP ").
Employees hired before August 29, 2003 participate in the T1 /T2 Pension Programs which are based on a
defined benefit model that provide retirement and disability benefits, annual cost -of- living adjustments, and
death benefits to members and their beneficiaries. Different benefit structures apply to participants depending
on their date of hire.
Employees hired on or after August 29, 2003 participate in the OPSRP unless membership was previously
established in the T1 /T2 Pension Programs. OPSRP is a hybrid defined contribution /defined benefit pension plan
with two components. Employer contributions fund the defined benefit program and employee contributions
fund individual retirement accounts under the separate defined contribution program.
Actuarial Valuation. Oregon statutes require an actuarial valuation of the System at least once every two years.
Based on the biennial actuarial valuations as of December 31 of odd - numbered years, such as 2007 and 2009, the
Public Employees Retirement Board ( "PERB ") establishes the contribution rates that employers will pay to fund the
operations of T1 /T2 Pension Programs, OPSRP and the PERS- sponsored Retirement Health Insurance Account
program ( "RHIA ") (See "Other Post - Employment Benefits" below). Actuarial valuations have been performed
annually as of December 31 of each year, with the valuations as of December 31 of even - numbered years (such as
2008) used for advisory purposes only. Actuarial valuations are performed for the entire System (the "System
Valuation "), and for each participating employer, including the City. Valuations are released approximately one
year after the valuation date. PERS' current actuary is Mercer (US), Inc.
Current employer contribution rates are based on the December 31, 2009 actuarial valuation (the "2009
Valuation ").
December 31, 2007 July 1, 2009 —June 30, 2011
December 31, 2008 Advisory only
December 31, 2009 July 1, 201 1 — June 30, 2013
Employer Assets, Liabilities, and Unfunded Actuarial Liabilities. An employer's unfunded actuarial liability
( "UAL ") is the excess of the actuarially determined present value of the employer's benefit obligations to
employees over the existing actuarially determined assets available to pay those benefits.
(1) This inactive textual reference to the website is not a hyperlink and the website, by such reference, is not incorporated herein.
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For the T1 /T2 Pension Programs, the City is pooled with the State and Oregon local government and community
college public employers (the "State and Local Government Rate Pool" or "SLGRP "). The City's portion of the
SLGRP's assets and liabilities is based on the City's proportionate share of the SLGRP's pooled payroll (the "City
Allocated T1 /T2 UAL "). Changes in the City's relative growth in payroll will cause the City Allocated T1 /T2 UAL to
shift. The City Allocated T1 /T2 UAL may increase if other pool participants fail to pay their full employee
contributions.
OPSRP's assets and liabilities are pooled on a program -wide basis. These assets and liabilities are not tracked or
calculated on an employer basis. The City's allocated share of OPSRP's assets and liabilities is based on the City's
proportionate share of OPSRP's pooled payroll (the "City Allocated OPSRP UAL "). Changes in the City's relative
growth in payroll will cause the City Allocated OPSRP UAL to shift.
The City's net unfunded pension UAL is the total of the City Allocated T1 /T2 UAL, and City Allocated OPSRP UAL.
The City's net unfunded pension UAL as of the 2007 Valuation and 2009 Valuation is shown in the following
table.
City of Woodburn
Net Unfunded Pension Actuarial Accrued Liabilitv (Surol
Allocated pooled SLGRP T1 /T2 UAL $ 11,017,883 $ 368,558
Allocated pre -SLGRP pooled liability /(surplus) (1,748,119) (1,833,024)
Transition liability /(surplus) (1,812,151) (1,892,469)
Allocated pooled OPSRP UAL 86,312 (70,212
Net unfunded pension actuarial accrued liability 7,543,925 (3,427,147)
Source: City 2009 Valuation and City 2007 Valuation
The funded status of PERS and of the City as reported by Mercer, will change over time depending on the
market performance of the securities that the Oregon Public Employees' Retirement Fund ( "OPERF ") has
invested, future changes in compensation and benefits of covered employees, demographic characteristics of
members and methodologies and assumptions used by the actuary in estimating the assets and liabilities of
PERS.
Significant actuarial assumptions and methods used in the valuations included: (a) Projected Unit Credit
actuarial cost method, (b) asset valuation method based on market value, (c) rate of return on the investment of
present and future assets of 8 %, (d) payroll growth rate of 3.75 %, (e) consumer price inflation of 2.75% per year,
and (f) UAL amortization method of a level percentage of payroll over 21 years (fixed) for the T1 /T2 Pension
Programs and 16 years (fixed) for OPSRP.
Employer Contribution Rates. The City's contribution rates are based on the current and projected cost of
benefits and the anticipated level of funding available from the OPERF, including anticipated investment
performance of the fund. Contribution rates are subject to future adjustment based on factors such as the
result of subsequent actuarial valuations and changes in benefits resulting from legislative modifications.
Employees are required to contribute 6 percent of their annual salary to the respective programs. Employers are
allowed to pay the employee contribution I addition to the required employer's contribution. The City has
elected to make the employee contribution for its employees.
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185
Contribution Rate Collar. In January 2010 the PERS Board adopted a revised implementation of the rate collar
limiting increases in employer contribution rates from biennium to biennium (the "Rate Collar "). Under normal
conditions, the Rate Collar is the greatest of three percent of payroll or 20 percent of the current base. If the
funded status of the SLGRP is below 80 percent, the Rate Collar increases by an additional 0.3 percent for every
percentage point under the 80 percent funded level until the aggregate rate collar reaches six percent at the 70
percent funded level. The 2009 System Valuation concluded that the SLGRP funded status was 77 percent,
resulting in a rate collar of 3.9 percent. The rate collar limits increases in employer contribution rates before rate
reductions from side accounts are deducted, and does not cover charges associated with RHIA and RHIPA.
City Contribution Rates. The City's current contribution rates are based on the 2009 Valuation and are effective
through June 30, 2013. The following table shows the City's current rates effective beginning July 1, 2011 (2009
Valuation) and the previous rates from the City's 2007 Valuation:
Employer Contribution Rates - City of Woodburn
(1) Contribution rates to fund RHIA benefits are included in the total City employer contribution rate, but are not a pension cost.
Source: 2001 and 2009 Valuations.
Other Post - Employment Benefits
Retirement Health Insurance Account. PERS retirees who receive benefits through the Tier 1 and Tier 2 plans
and are enrolled in certain PERS administered health insurance programs, may receive a subsidy towards the
payment of health insurance premiums. Under ORS 238.420, retirees may receive a subsidy for Medicare
supplemental health insurance of up to $60 per month towards the cost of their health insurance premium
under the RHIA plan. The RHIA program's assets and liabilities are pooled on a system -wide basis and are not
tracked or calculated on an employer basis. According to the 2009 System Valuation, this program had a UAL of
approximately $297 million. The City's allocated share of the RHIA program's assets and liabilities is based on
the City's proportionate share of the program's pooled payroll. According to the City's 2009 Valuation, the City's
allocated share of the RHIA program's UAL is $284,574.
GASB 45 requires the City to determine the extent of its liabilities for post employment benefits and record the
liability in its financial statements on an actuarial basis. This includes the requirement under ORS 243.303 of
offering the same healthcare benefits for current City employees to all retirees and their dependents until such
time as the retirees are eligible for Medicare. GASB 45 refers to this as an "implicit subsidy" and requires that
the corresponding liability be determined and reported. The City implemented this pronouncement for the
fiscal year ended June 30, 2010 as required for phase 3 governments.
The City's implementation of this pronouncement included the hiring of an actuary to determine any post
employment benefit ( "OPEB ") liabilities. [CITY TO PROVIDE UPDATED INFORMATION ON OPEBs]
29
Current Rates (2011-2013)
Previous Rates (2009-2011)
T1
OPSRP
General
OPSRP
P&F
TI/T2
OPSRP
General
OPSRP
P&F
Normal Cost Rate
J2
9.92%
7.79%
15.36%
7.21%
4.91%
13.05%
UAL Rate
6.10
6.10
6.10
4.79
4.79
4.79
OPSRP UAL Rate
0.08
0.08
0.08
(0.08)
(0.08)
(0.08)
Pre - SLGRP pooled liability rate
(1.70)
(1.70)
(1.70)
(1.77)
(1.77)
(1.77)
Transition liability/(surplus) rate
(1.76)
(1.76)
(1.76)
(1.83)
(1.83)
(1.83)
Net Pension Contribution Rate
12.64%
10.51%
18.08%
8.32%
6.02%
14.16%
Retiree Healthcare Rate (1)
0.59%
0.59%
0.59%
0.29%
0.29%
0.29 0 /(o
Total Net Contribution Rate
13.23%
11.10%
18.67%
8.61%
6.31%
14.45%
(1) Contribution rates to fund RHIA benefits are included in the total City employer contribution rate, but are not a pension cost.
Source: 2001 and 2009 Valuations.
Other Post - Employment Benefits
Retirement Health Insurance Account. PERS retirees who receive benefits through the Tier 1 and Tier 2 plans
and are enrolled in certain PERS administered health insurance programs, may receive a subsidy towards the
payment of health insurance premiums. Under ORS 238.420, retirees may receive a subsidy for Medicare
supplemental health insurance of up to $60 per month towards the cost of their health insurance premium
under the RHIA plan. The RHIA program's assets and liabilities are pooled on a system -wide basis and are not
tracked or calculated on an employer basis. According to the 2009 System Valuation, this program had a UAL of
approximately $297 million. The City's allocated share of the RHIA program's assets and liabilities is based on
the City's proportionate share of the program's pooled payroll. According to the City's 2009 Valuation, the City's
allocated share of the RHIA program's UAL is $284,574.
GASB 45 requires the City to determine the extent of its liabilities for post employment benefits and record the
liability in its financial statements on an actuarial basis. This includes the requirement under ORS 243.303 of
offering the same healthcare benefits for current City employees to all retirees and their dependents until such
time as the retirees are eligible for Medicare. GASB 45 refers to this as an "implicit subsidy" and requires that
the corresponding liability be determined and reported. The City implemented this pronouncement for the
fiscal year ended June 30, 2010 as required for phase 3 governments.
The City's implementation of this pronouncement included the hiring of an actuary to determine any post
employment benefit ( "OPEB ") liabilities. [CITY TO PROVIDE UPDATED INFORMATION ON OPEBs]
29
Risk Management
The City is exposed to various risks of loss. A description of the risks is provided in the City's audited financial
statements. The audited financial statement for Fiscal Year 2010 is attached hereto as Appendix D.
THE INITIATIVE AND REFERENDUM PROCESS
The Oregon Constitution, Article IV, Section 1, reserves to the people of the State the initiative and referendum
power pursuant to which measures designed to amend the Oregon Constitution or enact legislation can be
placed on the statewide general election ballot for consideration by the voters.
Pursuant to ORS 250.125, a five - member Committee composed of the Secretary of State, the State Treasurer,
the Director of the Department of Revenue, the Director of the Department of Administrative Services, and a
local government representative must prepare an estimate of the direct financial impact of each measure
( "Financial Estimate Statements ") to be printed in the voters' pamphlet and on the ballot.
Referendum
"Referendum" generally means measures that have been passed by a legislative body, such as the Legislative
Assembly or the governing body of a district, county or other political subdivision and referred to the electors by
the legislative body, or by petition prior to the measure's effective date.
In Oregon, both houses of the Legislative Assembly must vote to refer a statute or constitutional amendment for
a popular vote. Such referrals cannot be vetoed by the governor. Any change to the Oregon Constitution
passed by the Legislative Assembly requires referral to voters. In the case of a referendum by petition,
proponents of the referendum must obtain a specified number of signatures from qualified voters. The required
number of signatures is equal to four percent of the votes cast for all candidates for governor at the preceding
gubernatorial election.
The 2007 Legislative Assembly referred nine measures to voters. The measures appeared on the ballot at the
November 6, 2007 special election, May 20, 2008 primary election and November 4, 2008 general election. Eight
of the nine measures were approved. One of the measures approved at the November 4, 2008 general election
was Measure 56, a constitutional change providing that May and November property tax elections are decided
by a simple majority of voters casting a ballot. Another measure that was approved at the November 4, 2008
general election was Measure 57, a statutory change to increase sentences for drug trafficking, theft against
elderly and specified repeat property and identity theft crimes, requiring addiction treatment for certain
offenders.
The Financial Estimate Statement for Measure 57 estimates the measure would require additional spending of
approximately $9 million in the first year, $74 million in the second year, $79 million in the third year, $106
million in the fourth year and $143 million annually thereafter. The State may also need to borrow an estimated
$314 million from 2010 to 2017 to build new prison space associated with Measure 57.66
Initiatives
"Initiative" generally means a new measure placed before the voters as a result of a petition circulated by one or
more private citizens.
Any person may file a proposed initiative with the Oregon Secretary of State's office. The Oregon Attorney
General is required by law to draft a proposed ballot title for the initiative. Public comment on the draft ballot
title is then solicited by the Secretary of State. After considering any public comments submitted, the Attorney
General will either certify the draft ballot title or revise the draft ballot title. Any elector that submitted written
comments who is dissatisfied with the ballot title certified by the Attorney General may petition the Oregon
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187
Supreme Court seeking a revision of the certified ballot title.
Once the ballot title has been certified and the Secretary of State has authorized the petitioners, the proponents
of the initiative may start gathering initiative petition signatures from qualified voters. The number of
signatures required is determined by a fixed percentage of the votes cast for all candidates for governor at the
preceding gubernatorial election. The signature requirements are eight percent for a constitutional measure
(110,358 signatures for November 2010) and six percent for a statutory initiative (82,769 signatures for
November 2010).
The initiative petition must be filed with the Secretary of State not less than four months prior to the general
election at which the proposed measure is to be voted upon. As a practical matter, proponents of an initiative
have approximately two years in which to gather the necessary number of signatures. State law permits
persons circulating initiative petitions to pay money to persons obtaining signatures for the petition. If the
person obtaining signatures is being paid, the signature sheet must contain a notice of such payment.
Historical Initiative Petitions. The number of initiatives that have been approved in general elections since 1998
are as follows:
NOTE: The Secretary of State posts a listing of initiatives on its web site: www.egov.sos.state.or.us
Source: Elections Division, Oregon Secretary of State, Initiative, Referendum and Referral Search, Elections Division.
Land Use Measures. On November 6, 2007, Oregon voters approved Measure 49 ( "Measure 49 "), which
modifies a previous measure approved by the voters in 2004 ( "Measure 37 "). Measure 37 entitled landowners
to compensation for reduction in or release from a land use regulation when the land use regulation restricts
the use of the property and reduces its market value if it was enacted after the owner or a family member
purchased the property. Property owners seeking compensation or release from regulations under both
Measure 49 and Measure 37 must file a claim with the governmental entity which enacted or enforced the
regulation.
For claims filed before June 28, 2007, Measure 49 replaced the remedies of Measure 37 with an approval for
claimants to establish a specific number of home sites as a form of compensation.
All claims filed after June 28, 2007 are treated as Measure 49 claims. Measure 49 claims may only be filed for
regulations enacted after January 1, 2007, and Measure 49 claims may only be filed for land use regulations that
limit residential uses of property or restrict farming or forest practices. Under Measure 49, claimants must
demonstrate the reduction in value of the property, and may only be exempted from regulation to the extent
necessary to allow additional residential development of a value comparable to the value lost as a result of the
regulation. The City does not have any Measure 49 outstanding claims.
City Charter
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188
Historical Initiative Petitions
In addition to statutory and constitutional changes by the Legislative Assembly and the initiative and
referendum process, the independent basis of legislative authority has been granted to cities in Oregon by
municipal charters. A copy of the City Charter is available from the City upon request.
LEGAL MATTERS AND LITIGATION
Legal matters incident to the authorization, issuance and sale of the Bonds by the District are subject to the
approving legal opinion of K &L Gates LLP, Bond Counsel to the District ( "Bond Counsel "), substantially in the
form attached hereto as Appendix C. Bond Counsel has reviewed this document only to confirm that the
portions of it describing the Bonds and the authority to issue them conform to Bonds and the applicable laws
under which they are issued.
Litigation
There is no litigation pending questioning the validity of the Bonds nor the power and authority of the District to
issue the Bonds. There is no litigation pending which would materially affect the finances of the District or affect
the District's ability to meet debt service requirements on the Bonds.
Under Oregon law local public bodies, such as the District, are subject to the following limits on liability. The
State of Oregon is subject to different limits.
Personal Injury and Death Claim. The liability of a local public body and its officers, employees and agents acting
within the scope of their employment or duties, to any single claimant for covered personal injury or death
claims (and not property claims) arising out of a single accident or occurrence may not exceed $500,000, for
causes of action arising on or after July 1, 2009, and before July 1, 2010. From July 1, 2010 through June 30,
2015, this cap increases incrementally to $666,700. The liability limits to all claimants for covered personal injury
or death claims (and not property claims) arising from a single accident or occurrence increase from $1 million,
for causes of action arising on or after July 1, 2009, and before July 1, 2010, incrementally to $1,333,300, for
causes of action arising on or after July 1, 2014, and before July 1, 2015.
For causes of action arising on or after July 1, 2015, the liability limits for both a single claimant and all claimants
will be adjusted based on a determination by a State Court Administrator of the percentage increase or decrease
in the cost of living for the previous calendar year as provided in the statutory formula. The adjustment may not
exceed 3% for any year.
Property Damage or Destruction Claim. The liability of a public body and its officers, employees and agents
acting within the scope of their employment or duties, for covered claims for damage and destruction of
property that arise from causes of action arising on or after July 1, 2009 are as follows: (a) $100,000, adjusted as
described below, to any single claimant, and (b) $500,000, adjusted as described below, to all claimants.
Beginning in 2010, these liability limits shall be adjusted based on a determination by a State Court
Administrator of the percentage increase or decrease in the cost of living for the previous calendar year as
provided in the statutory formula. The adjustment may not exceed 3% for any year.
TAX MATTERS
Tax Exemption
In the opinion of Bond Counsel, interest on the Bonds is excludable from gross income for federal income tax
purposes. Interest on the Bonds is not an item of tax preference for purposes of the federal alternative
minimum tax imposed on individuals and corporations.
Federal income tax law contains a number of requirements that apply to the Bonds, including investment
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189
restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the use of
proceeds of the Bonds and the facilities re- financed with proceeds of the Bonds and certain other matters. The
City has covenanted to comply with all applicable requirements.
Bond Counsel's opinion is subject to the condition that the City comply with the above - referenced covenants
and, in addition, will rely on representations by the City and its advisors with respect to matters solely within the
knowledge of the City and its advisors, respectively, which Bond Counsel has not independently verified. If the
City fails to comply with such covenants or if the foregoing representations are determined to be inaccurate or
incomplete, interest on the Bonds could be included in gross income for federal income tax purposes
retroactively to the date of issuance of the Bonds, regardless of the date on which the event causing taxability
occurs.
Except as expressly stated in this Tax Matters section, Bond Counsel expresses no opinion regarding any other
federal or state income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of
the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of
owning the Bonds, which may include original issue discount, original issue premium, purchase at a market
discount or at a premium, taxation upon sale, redemption or other disposition, the extent to which interest on
the Bonds is included in adjusted current earnings for the purpose of computing federal alternative minimum
tax imposed on certain corporations and various withholding requirements.
Prospective purchasers of the Bonds should be aware that ownership of the Bonds may result in collateral
federal income tax consequences to certain taxpayers, including, without limitation, financial institutions,
property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement
benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch
profits tax, life insurance companies and taxpayers who may be deemed to have incurred or continued
indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Bonds. Bond
Counsel expresses no opinion regarding any collateral tax consequences. Prospective purchasers of the Bonds
should consult their tax advisors regarding collateral federal income tax consequences.
Payments of interest on tax - exempt obligations such as the Bonds are in many cases required to be reported to
the Internal Revenue Service (the "IRS "). Additionally, backup withholding may apply to any such payments
made to any Owner who is not an "exempt recipient" and who fails to provide certain identifying information.
Individuals generally are not exempt recipients, whereas corporations and certain other entities generally are
exempt recipients.
Bond Counsel's opinion is not a guarantee of result and is not binding on the IRS; rather, the opinion represents
Bond Counsel's legal judgment based on its review of existing law and in reliance on the representations made
to Bond Counsel and the City's compliance with its covenants. The IRS has established an ongoing program to
audit tax - exempt obligations to determine whether interest on such obligations is includable in gross income for
federal income tax purposes. Bond Counsel cannot predict whether the IRS will commence an audit of the
Bonds. Holders of the Bonds are advised that, if the IRS does audit the Bonds, under current IRS procedures, at
least during the early stages of an audit, the IRS will treat the City as the taxpayer, and the holders of the Bonds
may have limited rights to participate in the audit. The commencement of an audit could adversely affect the
market value and liquidity of the Bonds until the audit is concluded, regardless of the ultimate outcome.
Oregon State Tax Exemption
In the opinion of Bond Counsel, interest on the Bonds is exempt from Oregon personal income tax under
existing law.
Continuing Disclosure
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190
Securities and Exchange Commission Rule 15c2 -12, as amended (the "Rule ") requires at least annual disclosure
of current financial information and timely disclosure of certain events with respect to the Bonds, if material.
Pursuant to the Rule, the City has agreed to provide to the Municipal Securities Rulemaking Board ( "MSRB "),
audited financial information of the City and certain financial information or operating data. In addition, the City
has agreed to provide to the MSRB, notice of certain events, pursuant to the requirements of Section (b)(5)(i) of
the Rule. The City has complied with its continuing disclosure undertaking.
A copy of the form of the City's Continuing Disclosure Certificate is attached hereto as Appendix B.
RATING
As noted on the cover page of this Official Statement, Moody's Investors Service ( "Moody's "), has assigned its
municipal bond rating of " " to the Bonds. No application was made to any other rating agency for the
purpose of obtaining an additional rating on the Bonds. The rating reflects only the view of Moody's and an
interpretation of such rating may be obtained only from the rating agency furnishing the same. There is no
assurance that such rating will continue for any given period of time or that they will not be revised downward
or withdrawn entirely by the rating agency, if, in the judgment of such agency, circumstances so warrant. Any
such revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds. Any
further explanation of the underlying ratings may be obtained from Moody's.
Underwriting
D. A. Davidson & Co. (the "Underwriter ") has agreed, subject to the terms of a Bond Purchase Agreement, to
purchase the Bonds from the City at a price of % of the par value of the Bonds and will reoffer the Bonds
at a price of % of the par value of the Bonds plus accrued interest, if any. The Bonds are being offered for
sale to the public at the prices shown on the inside cover of this Official Statement. Concessions from the initial
offering price may be allowed to selected dealers and special purchasers. The initial offering prices are subject
to change after the date hereof.
PRELIMINARY OFFICIAL STATEMENT
The City has executed a "deemed final" letter that deems final the Preliminary Official Statement as of its date
pursuant to Securities and Exchange Commission Rule 15c2 -12 (except for the omission of the following
information: offering prices, interest rates, selling compensation, aggregate principal amount, principal amount
per maturity, delivery dates, credit enhancement, if any, ratings, insurance, and other terms of the securities
depending on such matters). The City has also confirmed that the information in this Preliminary Official
Statement, except for matters relating to DTC, the Registrar, and the statement regarding the Underwriter in the
italicized paragraph on the page immediately preceding the table of contents does not contain any untrue
statement of a material fact or omit any statement or information which is necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
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191
CONCLUDING STATEMENT
The information contained herein should not be construed as representing all conditions affecting the City or
the Bonds. Additional information may be obtained from the City. The statements relating to the Resolution
are in summarized form, and in all respects are subject to and qualified in their entirety by express reference to
the provisions of such document in its complete form.
The information assembled herein is not to be construed as a contract with Owners of the Bonds.
APPROVAL OF OFFICIAL STATEMENT
The execution and delivery of this Official Statement have been duly authorized by the City.
CITY OF WOODBURN, OREGON
M
Authorized City Official
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192
Maugi
Economic and
Demographic Information
193
ECONOMIC AND DEMOGRAPHIC INFORMATION
The following discussion includes descriptive
information obtained from a variety of sources.
The information is presented to provide the reader
with an overview of the City's economy, but is not
intended to be exhaustive or comprehensive.
Local Economic Overview
The City of Woodburn is located in Marion County
(the "County'), approximately 30 miles south of
the City of Portland and 18 miles north of the City
of Salem. The City has a 2010 preliminary
estimated population of 23,150. Historical
population of the City and the County is shown in
the following table.
■ Marion County
Population: State of Oregon, Marion County and the City of Woodburn
2010
3,844,195
320,640
23,150
2009
3,823,465
318,170
23,350
2008
3,791,075
314,865
23,355
2007
3,745,455
311,070
22,875
2006
3,690,505
306,665
22,615
2005
3,631,440
302,135
22,110
2004
3,582,600
298,450
21,790
2003
3,541,500
295,900
21,560
2002
3,504,700
291,000
20,860
2001
3,471,700
288,450
20,410
2000
3,436,750
286,300
20,310
2000 3,421,399 284,838 20,100
1990 2,842,321 228,483 13,404
(1) U.S. Census Count on April 1.
Source: Center far Population Research and Census, Portland State University.
or emplovers in the Citv follow:
Woodburn School District No. 103
AI's Garden Centers & Greenhouses LLC
City of Woodburn
Gem Equipment of Oregon Inc
United Disposal Service Inc
Specialty Polymers Products, Inc
Tree Co Inc
Country Meadows Village LLC
Hopper Brothers Christmas Trees
Oreaon Golf Association
Education
603
Home Improvement Retail
200
City
160
Machinery Manufacturing
150
Solid Waste Services & Recycling
120
Plastic & Fiber Manufacturing
95
Lawn & Garden Supplies
90
Long -Term Care Facility
70
Christmas Tree Sales
70
Snorts & Recreation
63
Source: Selectory Dun & Bradstreet. June 1, 2011
194
Salem Metropolitan Statistical Area (MSA): Labor Force and Employment
(Includes Marion and Polk Counties)
Civilian Labor Force
Unemployment
Percent of Labor Force
Total Employment
199,534
21,543
10.8%
177,991
198,684
21,187
10.7%
177,497
194,666
12,215
6.3%
182,451
190,512
10,063
5.3%
180,449
188,126
10,384
5.5%
177,742
185,057 184,059
11,723 13,575
6.3% 7.4%
173,334 170,484
4,018
8,972
xx
-4,954
8,172
11,124
xx
-2,952
10,558
10,803
xx
-245
13,627
9,464
xx
4,163
14,625
7,612
xx
7,013
- -
$ 138,203,200 $
36,125
n.a.
n.a.
n.a.
n.a.
2008
137,569,686
00•
Change from
$ 32,565
$ 12,504,027
Total Nonfarm Payroll Employment
009 2008 2007 2006
143,400 145,400 152,200 151,900 149,400
2005 2004
146,300 142,800
2008
-6,800
2007
-6,500
2006
-4,000
2005
-900
200
2,600
Total Private
100,600
102,800
110,000
111,500
109,600
106,300
103,100
-7,200
-8,700
-6,800
-3,500
-300
Natural resources and mining
1,100
1,000
1,200
1,300
1,300
1,300
1,300
-200
-300
-300
-300
-300
Construction
6,500
7,000
9,100
10,100
9,400
8,200
7,200
-2,100
-3,100
-2,400
-1,200
-200
Manufacturing
11,700
12,300
14,000
14,800
15,500
14,900
14,600
-1,700
-2,500
-3,200
-2,600
-2,300
Trade, transportation, and utilities
23,200
23,700
25,500
25,700
25,400
24,800
23,800
-1,800
-2,000
-1,700
-1,100
-100
Information
1,200
1,300
1,400
1,500
1,500
1,500
1,600
-100
-200
-200
-200
-300
Financial activities
6,900
7,100
7,600
7,500
7,400
7,300
7,100
-500
-400
-300
-200
0
Professional and business services
1 1,500
12,000
12,900
13,200
12,600
12,700
12,000
-900
-1,200
-600
-700
0
Educational and health services
21,300
21,000
20,300
19,500
19,000
18,600
18,300
700
1,500
2,000
2,400
2,700
Leisure and hospitality
11,900
12,100
12,700
12,500
12,300
12,100
12,000
-600
-400
-200
0
100
Other services
5,400
5,300
5,400
5,300
5,300
5,100
5,100
-100
0
0
200
200
Government
42,800
42,500
42,200
40,500
39,800
40,000
39,700
300
2,000
2,700
2,500
2,800
Source: State of Oregon Employment Division, Department of Human Resources as of June 1, 2011
Per capita income in the County is lower than that of the State. In 2008, the County represented 7.42 percent of
the State's total personal income.
Source: U.S. Department of Commerce, Bureau of Economic Analysis, February 20, 2010.
Historic building permits for single - family and multi - family housing in the City follow:
City of Woodburn: Building Permit History
MrNumber
State of Oregon
New Multi - Family
Construction
Marion County
Salem, OR (MSA)
Your
Total Personal Per
Income rrr
Capita
Total Personal
rrr
Per Capita.
Total Personal
000
er Capita
2009
$ 138,203,200 $
36,125
n.a.
n.a.
n.a.
n.a.
2008
137,569,686
36,365
$ 10,215,046
$ 32,565
$ 12,504,027
$ 32,016
2007
133,405,144
35,737
9,810,847
31,632
11,985,679
31,126
2006
127,447,708
34,656
9,458,747
30,924
11,514,079
30,406
2005
117,670,842
32,525
8,635,602
28,646
10,512,626
28,299
2004
113,001,122
31,622
8,528,745
28,545
10,405,095
28,391
2003
1 108,506,328
30,564
1 8,168,241
27,546
1 9,958,041
27,473
Source: U.S. Department of Commerce, Bureau of Economic Analysis, February 20, 2010.
Historic building permits for single - family and multi - family housing in the City follow:
City of Woodburn: Building Permit History
MrNumber
New Single Family
New Multi - Family
Construction
2010
Construction Cost
4 $ 749,342
Units Cost
- $ -
2009
8 1,406,860
4 432,106
2008
29 6,337,377
200 7,292,144
2007
91 18,413,061
200 14,490,940
2006
85 15,720,345
- -
2005
68 13,921,060
195
APPENDIX B
Continuing Disclosure
196
APPENDIX C
Form of Legal Opinion
197
APPENDIX D
Audited Financial Statement - 2010
198
APPENDIX E
Book -Entry Only System
199
200
APPENDIX F
Form of Master Declaration
201
APPENDIX G
Feasibility Report
202