Agenda - 09/12/2005CITY OF WOODBURN
URBAN RENEWAL AGENCY
SEPTEMBER 12, 2005- 6:30 P.M.
KATHRYN FIOLEY, MAYOR
WALTER NICHOLS, COUNCILOR WARD J
RICHARD BJELLAND0 COUNCILOR WARD II
PETER MCCALLUM, COUNCILOR WARD III
JAMES COX, COUNCILOR WARD IV
FRANK LONERGAN, COUNCILOR WARD V
ELIDA SlFUENTEZ, COUNCILOR WARD VI
CiTY HALL COUNCIL CHAMBERS - 270 MONTGOMERY STREET
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CALL TO ORDER
ROLL CALL.
CONSENT AGENDA
ke
Urban Renewal Agency minutes of June 27, 2005
Recommended Action: Approve the minutes.
PUBLIC HEARINGS
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Supplemental Appropriation
Recommended Action: Conduct public hearing, receive
public comment, and direct staff to prepare a resolution
reflecting the Board's decision.
GENERAL BUSINESS
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Resolution adopting a supplemental budget for fiscal year
2005-06 and making appropriations
Recommended Action: Adopt resolution.
Be
Resolution of the Urban Renewal Agency of the City of
Woodburn, Oregon authorizing the Issuance and negotiated
sale of urban renewal bonds
Recommended Action: Adopt resolution.
Ce
Bond Purchase Agreement
Recommended Action: Authorize the City Administrator to
sign an agreement with Bank of America for the sale of
$1,850,000 of revenue bonds.
PUBLIC COMMENT
ADJOURNMENT
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September 12, 2005 Urban Renewal Agency Page i
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URBAN RENEWAL AGENCY MEETING MINUTES
JUNE 27, 2005
TAPE
READING
0001 DATE. COUNCIL CHAMBERS, CITY HALL, CITY OF WOODBURN,
COUNTY OF MARION, STATE OF OREGON, JUNE 27, 2005.
CONVENED. The Urban Renewal Agency meeting convened at 6:45 p.m. with Chair
Figley presiding.
0025 ROLL CALL.
Chair Figley Present
Member Bj elland Present
Member Cox Absent
Member Lonergan Absent
Member McCallum Present
Member Nichols Present
Councilor Sifuentez Present
Staff Present: City Administrator Brown, City Attorney Shields, Finance Director
Gillespic, City Recorder Tennant
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CONSENT AGENDA.
A) approval of Urban Renewal Agency Minutes of June 13, 2005
MCCALLUM/SIFUENTEZ... adopt the Consent Agenda as presented. The motion
passed unanimously.
0074 RESOLUTION 05-01 ADOPTING BUDGET FOR FISCAL YEAR 2005-06~
0110
MAKING APPROPRIATIONS~ AND LEVYING TAXES.
BJELLAND/MCCALLUM... adopt Resolution 05-01 setting the budget for fiscal year
2005-06. The motion passed unanimously.
ADJOURNMENT.
NICHOLS/MCCALLUM... meeting be adjoumed. The motion passed unanimously.
The meeting adjourned at 6:48 p.m..
APPROVED
KATHRYN FIGLEY, CHAIR
ATTEST
Mary Tennant, Recorder
City of Woodbum, Oregon
Page 1 - Urban Renewal Agency Minutes, June 27, 2005
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WOOD,URN
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September 6, 2005
TO:
FROM:
SUBJECT:
Woodburn Urban Renewal Age~,~Board
Ben Gillespie, Finance Director,~,~
Hearing to Consider a Supplemental Appropriation
RECOMMENDATION:
Board direct staff to return an resolution reflecting the Board's decision following
the hearing.
BACKGROUND:
In June it became apparent that the Downtown Plaza, which was scheduled in
2004-05 would not be completed before the fiscal year end on June 30.
Oregon local budget law limits the Board's ability to increase budgets above
what is recommended by the Budget Committee to 10%. The Downtown Plaza
required a budget increase greater than 10% of the Recommended Budget for
the City's General Capital Improvement Fund. Consequently budget action for
both the City and the URA was postponed until the current fiscal year when it
can be addressed with supplemental appropriations.
DISCUSSION:
In the URA Debt Service Fund, Beginning Fund Balance is increased $42,228 to
reflect actual Beginning Fund Balance. $40,000 is budgeted to complete the
project and Contingencies are increased by $2,228.
The Plaza is budgeted in two funds because of state statutes relating to Urban
Renewal Agencies. The monies must be expended from the City's General ClP
Fund (358) to create debt, and then the Urban Renewal Debt Service Fund (720)
can make a reimbursement.
FINANCIAL IMPACT:
In the URA Debt Service Fund Beginning Fund Balance is increased by $42,228.
Expenditures are increased by $40,000, and Contingency is increased by .$2,772.
EiAgenda Item Review:
City Administrato'~~"'City Attorney/~/f'.~
5A
September 6, 2005
TO:
FROM:
SUBJECT:
Woodburn Urban Renewal Agen~ Board
Ben Gillespie, Finance Director
2005-06 Supplemental Budget
REgOMMENDATION:
Board adopt the attached resolution for supplemental budget.
BACK~,ROUND:
Eadier this evening the Board conducted a hearing to consider budget
amendments resulting from the mid year budget review. The attached
resolution, as amended, reflects the Board's direction to staff at the conclusion
of the headng.
FINANCIAL IMPACT:
In the URA Debt Service Fund Beginning Fund Balance is increased by $42,228.
Expenditures are increased by $40,000, and Contingency is increased by $2,772.
Agenda Item Review:
( ~--?~-
city Administrato~ City Attorney
Finance~~
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RESOLUTION NO. 05-02
A RESOLUTION ADOPTING A SUPPLEMENTAL BUDGET FOR FISCAL YEAR
2005-06 AND MAKING APPROPRIATIONS.
THE WOODBURN URBAN RENEWAL AGENCY RESOLVES AS FOLLOWS:
Section 1. That the supplemental budget for fiscal year 2005-2006 is hereby adopted as
set forth below.
Section 2. That the fiscal year 2005-06 revenues and appropriations are adjusted as
follows:
DEBT SERVICE FUND:
Revenue Adjustment:
Beginning Fund Balance
Total Revenue Adjustment
Appropriation Adjustment:
Administration - Debt Service
Operating Contingency
Total Appropriations Adjustment
42,228
$ 40,000
2,228
$ 42,228
Section 3. That if any clause, sentence, paragraph, section or portion of this resolution for
any reason shall be adjudged invalid by a court of competent jurisdiction, such judgment shall be
confined in its operation to the clause, sentence, paragraph, section or portion of this resolution
directly involved in the controversy in which such judgment is rendered.
Legal Counsel
APPROVED
KATHRY'N FIGLEY, CHAIR
Passed by the Agency
Submitted to the Chair
Approved by the Chair
ATTEST
Mary Tennant, Recorder
City of Woodbum, Oregon
Page 1 - Resolution No.05-02
September 7, 2005
TO:
FROM:
SUBJECT:
Woodburn Urban Renewal Board
Ben Gillespie, Finance DirectorJ~
Master Debt Resolution
REC~,OMMENDATION:
Board approve the attached resolution authorizing the sale of revenue bonds
and setting terms of parity for future debt issues.
BACKGROUND:
The Woodburn Urban Renewal Plan identified improvements to Front Street to
be funded by the Agency. The 2005-06 budget included $1,251,000 for Phases 1
and 2 of the Front Street projects and .$6,500 for legal, financial and managerial
support. The following year Phase 3 of Front Street is anticipated to cost
.$800,000. The total ($2,057,500) exceeds the amount of this debt issue. The
balance will be made up from a subsequent borrowing or tax proceeds in
excess of those needed for debt service.
The Agency solicited proposals from banks for .$1,850,000 of ten-year revenue
bonds. Bank of America's proposal was selected from the four banks that
responded. A purchase agreement has been negotiated, and that item is also
before the Board this evening.
The bonds will bear interest at 4.22%, and they are tax exempt under the IRS
code.
DISCUSSION:
The attached resolution not only authorizes the sale of the 2005 revenue bonds,
it also sets the parity terms for future Urban Renewal debt issues. Parity means
that future debt will not have a claim superior to these bonds against the
Agency. Parity does not mean that interest rates on future obligations can't be
higher (or lower) than the rate on these bonds.
Agenda Item Review: City Administratc~~/ City AttorneyN/~ Finance~~
Mayor and City Council
September 7, 2005
Page 2
The resolution acknowledges that subordinate bonds may be issued in the
future.
If the Agency issues bonds in the future that have either a balloon feature or a
variable rate, the resolution stipulates how those terms will be handled to
achieve parity.
FINANC~IAL IMFACT:
The annual debt service on the bonds will be $227,732.28. Total interest charged
over the life of the bonds will be $427,322.59.
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RESOLUTION NO.
A RESOLUTION OF THE URBAN RENEWAL AGENCY OF THE CITY OF
WOODBURN, OREGON AUTHORIZING THE ISSUANCE AND NEGOTIATED SALE
OF URBAN RENEWAL BONDS.
WHEREAS, the City of Woodburn (the "City") and the Urban Renewal Agency of the
City of Woodbum (the "Agency") have formed the Woodbum Urban Renewal Area (the "Area")
in compliance with Oregon law, and City Ordinance No. 2298 approving the urban renewal plan
(the "Plan") was enacted on August 14, 2001, and petitions were filed with the City seeking to
refer the ordinance to the City voters, who approved the ordinance at an election held on March
12, 2002; and,
WHEREAS, the Plan establishes a maximum indebtedness for the Plan of $29,300,000,
and as of the date of this resolution, the City has incurred $285,947.47 of indebtedness for the
Plan; and,
WHEREAS, the Agency adopts this resolution to authorize the issuance of bonds which
are payable from the tax increment revenues of the Area in a principal amount of not more than
$2,000,000, and to provide the terms under which future urban renewal indebtedness may be
issued;
NOW THEREFORE, THE URBAN RENEWAL AGENCY OF THE CITY OF
WOODBURN, RESOLVES AS FOLLOWS:
Section 1. Definitions.
Unless the context clearly requires otherwise, the following terms shall have the following
meanings:
"Agency Official" means the Mayor of the City, the City Administrator, the Finance
Director of the City, or a person designated by the Mayor, the City Administrator, or the
Finance Director to act as Agency Official under this Master Resolution.
"Agency" means the Urban Renewal Agency of the City of Woodbum.
"Annual Debt Service" means the amount required to be paid in a Fiscal Year of
principal and interest on Outstanding Bonds, calculated as follows:
(i) Interest which is to be paid from proceeds of Bonds shall be subtracted.
(ii) Bonds which are subject to scheduled, noncontingent redemption or 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.
(iii) Bonds which are subject to contingent redemption or tender shall be treated
as maturing on their stated maturity dates.
(iv) Variable Rate Obligations shall bear interest from the date of computation
until maturity at their Estimated Average Interest Rate.
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(v) Each Balloon Payment shall be assumed to be paid according to its Balloon
Debt Service Requirement.
"Area" means the Woodbum Urban Renewal Area described in the Plan, and all
additions thereto.
"Balloon Debt Service Requirement" means the Committed Debt Service Requirement
for a Balloon Payment or, if the Agency has not entered into a firm commitment to sell
Bonds or other obligations to refund that Balloon Payment, the Estimated Debt Service
Requirement for that Balloon Payment.
"Balloon Payment" means any principal payment for a Series of Bonds that mature
within five years after its date of issue which (a) comprises more than twenty-five percent
of the original principal amount of that Series and Co) is designated as a Balloon Payment
in the closing documents for the Series.
"Bondowner" or "Owner" means the registered owner of the Bond.
"Bonds" means the Series 2005 Bond and any Parity Indebtedness.
"City" means the City of Woodbum, Oregon.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Committed Debt Service Requirement" means the schedule of principal and interest
payments for a Series of Bonds or other obligations which refund a Balloon Payment, as
shown in the documents evidencing the Agency's firm commitment to sell that Series.
A "firm commitment to sell" means a bond purchase agreement or similar document
which obligates the Agency to sell, and obligates a purchaser to purchase, the Series of
refunding Bonds or other obligations, subject only to the conditions which customarily
are included in such documents.
"Estimated Average Interest Rate" is the interest rote that Variable Rate Obligations are
assumed to bear, and shall be calculated as provided in Section 5.4.
"Estimated Debt Service Requirement" means the schedule of principal and interest
payments for a hypothetical Series of Bonds that refunds a Balloon Payment that is
prepared by the Agency Official and that meets the requirements of Section 5.5.
"Fiscal Year" means the period beginning on July I of each year and ending on the next
succeeding June 30, or as otherwise defined by Oregon law.
"Government Obligations" means direct, noncallable obligations of the United States, or
obligations the principal of and interest on which are fully secured and unconditionally
guaranteed by the United States.
"Master Resolution" means this Resolution authorizing the Series 2005 Bonds, as it may
be amended from time to time pursuant to Section 6.
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"Maximum Annual Debt Service" means the greatest Annual Debt Service, calculated on
all Bonds which are Outstanding on the date of calculation.
"Outstanding" refers to all Bonds except those which have been paid, canceled, or
defeased, and (for Bonds which must be presented to be paid) those which have matured
but have not been presented for payment, but for the payment of which adequate money
has been transferred to their paying agent.
"Parity Indebtedness" means obligations issued in compliance with Section 5 of this
Master Resolution which are secured by a lien on, and pledge of, the Security which is on
a parity with the lien on, and pledge of, the Security which secures the Series 2005 Bond.
"Permitted Investments" means any investments in which the Agency is authorized to
invest surplus funds under the laws of the State of Oregon.
"Plan" means the Woodburn Urban Renewal Plan which was adopted pursuant to City
Ordinance No. 2298, as that plan may be amended from time to time.
"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 in this Master
Resolution.
"Reserve Requirement" means the lesser of Maximum Annual Debt Service on all
Outstanding Bonds or the amount described in the next sentence. If, at the time of
issuance of a Series of Bonds, the amounts required to be added to the Bond Reserve
Account to make the balance in the Bond Reserve Account equal to the Maximum
Annual Debt Service exceeds the Tax Maximum calculated with respect to that Series,
then the Reserve Requirement means the Reserve Requirement in effect immediately
before the issuance of that Series of Bonds (calculated as if that Series of Bonds were not
Outstanding), plus the Tax Maximum for the Series of Bonds.
"Security" means all Tax Increment Revenues, all amounts in the Tax Increment Fund
(including earnings on amounts in the Tax Increment Fund). For the Series 2005 Bond,
unexpended proceeds of Series 2005 Bond.
"Series" refers to all Bonds that are sold at the same time unless the authorizing
resolution or closing documents specify differently.
"Series 2005 Bank" means Bank of America, N.A.
"Series 2005 Bond" means the Agency's Woodburn Urban Renewal Area Urban
Renewal Bond, Series 2005 which is authorized by Section l0 of this Master Resolution.
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"Series 2005 Purchase Agreement" means the agreement or agreements between the
Series 2005 Bank and the Agency under which the Agency sells, and the Series 2005
Bank buys, the Series 2005 Bond.
"Subordinate Indebtedness" means obligations which have a subordinate lien on the Tax
Increment Revenues and are issued in compliance with Section 5.4.
"Supplemental Resolution" means any resolution supplemental to or amendatory of this
Master Resolution, entered into by the Agency in accordance with this Master
Resolution.
"Tax Increment Fund" means the fund established under ORS 457.440(6)('o) to hold the
Tax Increment Revenues.
"Tax Increment Revenues" means all taxes which are divided based on the increase in
value of property in the Area which are payable to the Agency under the provisions of
Article IX, Section lc of the Oregon Constitution and ORS Chapter 457, as those
provisions exist on the date of this Master Resolution.
"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.
"Variable Rate Obligations" means any Bonds issued with a variable, adjustable,
convertible, or other similar interest rate which changes prior to the final maturity date of
the Bonds.
Section 2. Security for Bonds.
2.1. The Bonds shall not be general obligations of the Agency. The Agency shall be obligated
to pay the Bonds solely from the Security.
2.2. The Agency hereby irrevocably pledges the Security to pay the Bonds. Pursuant to
ORS 288.594, the pledge of the Security shall be valid and binding from the time of the adoption
of this Master Resolution. The Security so pledged and hereat~er received by the Agency shall
immediately be subject to the lien of such pledge without any physical delivery or further act,
and the lien of the pledge shall be superior to all other claims and liens whatsoever to the fullest
extent permitted by ORS 288.594(2).
2.3. The provisions of this Master Resolution shall constitute a contract with the owners of
the Bonds, and shall be enforceable by them.
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Section 3. The Tax Increment Fund.
3.1. The Agency has previously established the Tax Increment Fund. The Tax Increment
Fund shall be divided only into the following accounts: the Bond Payment Account, the Bond
Reserve Account and the Subordinate Indebtedness Account.
3.2. Until all Bonds are paid or defeased, the Agency shall deposit all Tax Increment
Revenues in the Tax Increment Fund, and shall credit each deposit to the following accounts
within the Tax Increment Fund in the following order of priority:
To the Bond Payment Account, until the Bond Payment Account contains an amount
sufficient to pay the Annual Debt Service for that Fiscal Year;
(B)
To the Bond Reserve Account, if the balance in the Bond Reserve Account is then less
than the Reserve Requirement, an amount sufficient to make the balance in the Bond
Reserve Account equal to the Reserve Requirement; and,
(c)
To the Subordinate Indebtedness Account, any amounts which remain after the foregoing
deposits have been made.
Section 4. Accounts.
4.1. Bond Payment Account.
(A)
Amounts credited to the Bond Payment Account shall be used only to pay Bond
principal, interest and premium, if any. Amounts credited to the Bond Payment Account
shall be invested in Permitted Investments which mature within one year.
Five (5) days before any payment date, if the balance in the Bond Payment Account is
less than the amount of Bond principal, interest and premium, if any, due on that
Payment Date, the Agency shall credit to the Bond Payment Account an amount equal to
the deficiency from the following accounts in the following order of priority:
(1) the Subordinate Indebtedness Account; and,
(2) the Bond Reserve Account.
4.2. Bond Reserve Account.
The Agency covenants to fund, maintain and use the Bond Reserve Account as provided
in this Section 4.2 as long as any Bonds are Outstanding. Except as specifically provided
in this Section 4.2, amounts credited to the Bond Reserve Account shall be used only to
pay Bond principal, interest and premium, if any, and only if sufficient funds are not
available in the Bond Payment Account or the Subordinate Indebtedness Account.
(B)
At closing of the Series 2005 Bond and each subsequent series of Parity Indebtedness the
Agency shall deposit into the Bond Reserve Account an amount sufficient to make the
balance in the Bond Reserve Account at least equal to the Reserve Requirement. The
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(c)
(D)
(E)
(F)
(G)
(H)
(I)
4.3.
deposit may be made from amounts available in the Subordinate Indebtedness Account,
from Bond proceeds, or other amounts available to the Agency.
The Agency covenants to maintain a balance in the Bond Reserve Account which is
equal to the Reserve Requirement, but solely from deposits of Tax Increment Revenues
pursuant to Section 3.2(B) of this Master Resolution and closing deposits pursuant to
Section 4.2(B).
Amounts in the Bond Reserve Account shall be invested in Permitted Investments which
shall mature not later than the last maturity date of Outstanding Bonds. Permitted
Investments in the Bond Reserve Account which mature in five years or less shall be
valued at their cost, and Permitted Investments which mature in more than five years
shall be valued at the lesser of cost or market.
If the balance in the Bond Reserve Account is less than the Reserve Requirement, the
Agency shall begin making transfers of Tax Increment Revenues to the Bond Reserve
Account in accordance with Section 3.2(B). The transfers shall continue until the balance
in the Bond Reserve Account is equal to the Reserve Requirement.
If balance in the Bond Reserve Account exceeds the Reserve Requirement, the Agency
may transfer the excess to the Bond Payment Account or, if the balance in the Bond
Payment Account at that time is at least equal to the remaining, unpaid Annual Debt
Service for that Fiscal Year, to the Subordinate Indebtedness Account.
Earnings on the Bond Reserve Account shall be credited to the Bond Reserve Account
whenever the balance in the Bond Reserve Account is less than the Reserve
Requirement; otherwise earnings on the Bond Reserve Account shall be credited to the
Bond Payment Account.
All amounts on deposit in the Bond Reserve Account may be applied to the final payment
(whether at maturity or by prior redemption) of Outstanding Bonds. Amounts so applied
shall be credited against the amounts the Agency is required to transfer into the Bond
Payment Account under Section 3.2(A).
Amounts in the Bond Reserve Account may be transferred into escrow to defease Bonds,
but only if the balance remaining in the Bond Reserve Account after the transfer is at
least equal to the Reserve Requirement for the Bonds which remain Outstanding after the
defeasance.
Subordinate Indebtedness Account.
Money in the Subordinate Indebtedness Account may be used at any time for any legal purpose
permitted under Chapter 457 of the Oregon Revised Statutes. However, if there is a deficiency in
the Bond Payment Account or the Bond Reserve Account, Tax Increment Revenues credited to
the Subordinate Indebtedness Account shall be used to eliminate the deficiency (in the order of
priority described in Section 3.2) before money in the Subordinate Indebtedness Account is used
for any other purpose.
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Section 5. Senior, Parity and Subordinate Indebtedness
5.1. The Agency shall not issue obligations which have a lien on the Security which is
superior to the lien of the Bonds.
5.2. Except as provided in Section 5.3, the Agency may issue other Parity Indebtedness only
if all of the following conditions are met:
(A)
As of the date of Closing of the Parity Indebtedness, no Event of Default under this
Master Resolution has occurred and is continuing; and,
(B)
At the time of the issuance of the Parity Indebtedness thc balance in thc Bond Reserve
Account is at least equal to the Reserve Requirement; and,
(c)
On or before the date of closing of the Parity Indebtedness the Agency files in its public
records either:
(i)
a certificate of the Agency Official stating that the Tax Increment Revenues for
the most recently completed Fiscal Year is at least equaled one hundred thirty
percent (130.00%) of the Maximum Annual Debt Service on all then Outstanding
Bonds, with the proposed Parity Indebtedness treated as Outstanding; or,
(2)
a report of a Qualified Consultant projecting that in each of the Fiscal Years
immediately following the issuance of the Parity Indebtedness, the projected Tax
Increment Revenues of the Agency will be no less than one hundred thirty percent
(130.00%) of the Annual Debt Service due in each of the corresponding Fiscal
Years on all Outsianding Bonds with the Parity Indebtedness being treated as
Outstanding Bonds.
5.3. The City may issue Parity Indebtedness to refund Outstanding Bonds without complying
with Section 5.2. iff
(A)
the refunded Bonds are defeased on the date of delivery of the refunding Parity
Indebtedness; and,
(B)
the Annual Debt Service on the refunding Parity Indebtedness does not exceed the
Annual Debt Service on the refunded Bonds in any Fiscal Year by more than $5,000.
5.4. The Estimated Average Interest Rate for Variable Rate Obligations shall be calculated as
provided in this Section.
(A)
Unless Section 5.4(B) applies, for purposes of calculating Annual Debt Service for the
tests for issuing Parity Indebtedness under Section 5.2, the Estimated Average Interest
Rate for any Series of Variable Rate Obligations means the average of the weekly Bond
Buyer 20 Bond Index for the 52 week period that ends on or immediately before the last
day of the month that precedes the month in which the Parity Indebtedness is sold,
expressed as an annualized interest rate; or,
Page 7 of 13
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(B)
(c)
For any Series of Variable Rate Obligations that have been outstanding for at least 52
weeks at the end of the period described in Section 5.4(A), if the actual, annualized rate
on that Series during that 52 week period is greater than the average, annualized rate
described in Section 5.4(A), the Estimated Average Interest Rate for that Series means
the average of the actual rates on that Series during that 52 week period, expressed as an
annualized interest rate.
To determine the amount that is required to be maintained in the Bond Reserve Account,
the Estimated Average Interest Rate for a Series of Parity Indebtedness shall be the
average of the weekly Bond Buyer 20 Bond Index for the 52 week period that ends on or
immediately before the last day of the month that precedes the month in which the Parity
Indebtedness is sold, expressed as an annualized interest rate. This calculation of
Estimated Average Interest Rate shall be used for that Series of Parity Indebtedness
Obligations as long as that Series of Parity Indebtedness Obligations is Outstanding.
5.5. The Estimated Debt Service Requirement for Balloon Payments shall be calculated in
accordance with this Section 5.5.
(A)
Whenever a Balloon Payment will be Outstanding on the date a Series of Parity
Indebtedness is issued, the Agency Official shall prepare a schedule of principal and
interest payments for a hypothetical Series of Parity Indebtedness that refunds each
Outstanding Balloon Payment in accordance with this Section 5.5. The Agency Official
shall prepare that schedule as of the date the Parity Indebtedness is issued, and that
schedule shall be used to determine compliance with the tests for Parity Indebtedness in
Section 5.2.
Each hypothetical Series of refunding Parity Indebtedness shall be assumed to be paid in
equal annual installments of principal and interest sufficient to amortize the principal
amount of the Balloon Payment over the term selected by the Agency Official; however,
the Agency Official shall not select a term that exceeds the lesser of 20 years from the
date on which the Series of Parity Indebtedness containing the Balloon Payment is issued
or the Agency's estimate of the remaining weighted average useful life (expressed in
years and rounded to the next highest integer) of the assets which are financed with the
Balloon Payment. The annual installments shall be assumed to be due on the first day of
each Fiscal Year, with the first installment due on the date the Balloon Payment is
scheduled to be paid.
(c)
The hypothetical Series of refunding Parity Indebtedness shall be assumed to bear
interest at the Agency Official's estimate of the average rate that a Series of Parity
Indebtedness would bear if it is amortized as provided in Section 5.5(B) and is sold at the
time the schedule described in Section 5.5(A) is prepared.
5.6. The Agency may issue Subordinate Indebtedness only if the Subordinate Indebtedness is
not payable from any account of the Tax Increment Fund except the Subordinate Indebtedness
Account, and the Subordinate Indebtedness clearly states that:
Page 8 of 13
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(A)
It is secured by a lien on or pledge of the Security which is subordinate to the lien on, and
pledge of, the Security for the Bonds; and,
(B)
It is not payable from any account of the Tax Increment Fund except the Subordinate
Indebtedness Account.
Section 6. General Covenants.
The Agency hereby covenants and agrees with the Owners of all Outstanding Bonds as follows:
6.1. The Agency 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 Resolution
and any Supplemental Resolution, but solely from the Tax Increment Revenues, amounts
deposits in the Tax Increment, and amounts available in the Bond Reserve Account.
6.2. The Agency shall maintain complete books and records relating to the Tax Increment
Fund, the Tax Increment Revenues and the Bonds in accordance with generally accepted
accounting principles, and will cause such books and records to be audited annually at the end of
each Fiscal Year, and an audit report prepared and made available for the inspection of Owners.
6.3. The Agency shall not issue any obligations which have a lien or claim on the Security
which is superior to the lien and claim of the Bonds.
6.4. The Agency shall issue Subordinate Obligations only as provided in Section 5.4.
6.5. The Agency shall maintain its existence until there are no Bonds Outstanding.
6.6. That it will not amend the boundaries of the Area to reduce the amount of land contained
in the Area unless:
(A)
An Agency Official certifies in writing that in the current Fiscal Year the Tax Increment
Revenues of the Area would have been no less than one hundred fifty percent (150.00%)
of the Maximum Annual Debt Service on all Outstanding Bonds with the property to be
released removed from the incremental value for purposes of this calculation; or
(B)
The Agency received a report from a Qualified Consultant project that the Tax Increment
Revenues for the three Fiscal Years immediately following the release of the property,
inclusive of the year of release, will be one hundred twenty-five percent (125.00%) of the
Maximum Annual Debt Service on all Outstanding Bonds when taking into account the
assessed value of land removed from the Area by means of an amendment of the
boundary of the Area.
Section 7. Amendment of Master Resolution.
7.1. Amendment without Bondowner Consent. The Agency may amend this Master
Resolution without the consent of Bondowners for any one or more of the following purposes:
(A) To cure any ambiguity or formal defect or omission in the Master Resolution;
Page 9 of 13
lS
(c)
(D)
(E)
(F)
(G)
To add to the covenants and agreements of the Agency in the Master Resolution other
covenants and agreements to be observed by the Agency which are not contrary to or
inconsistent with this Master Resolution as theretofore in effect;
To authorize issuance of Bonds or Subordinate Obligations;
To modify, amend or supplement this Master Resolution to qualify this Master
Resolution 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;
To confirm, as further assurance, any security interest or pledge created under the Master
Resolution;
To make any change that, in the reasonable judgment of the Agency, does not materially
and adversely affect the rights of Bondowners or,
To modify any of the provisions of this Master Resolution in any other respect whatever,
as long as the modification shall take effect only after all Bonds which are Outstanding at
the time of the modification cease to be Outstanding.
7.2. Amendment with Bondowner Consent. Except as provided below in this Section 7.2,
this Master Resolution may be amended for any other purpose only upon consent of Bondowners
of not less than fifty-one percent (51%) in aggregate principal amount of the Bonds Outstanding.
However, no amendment shall be valid without the consent of Bondowners of 100 percent of the
aggregate principal amount of the affected, Outstanding Bonds 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
Bondowner; or
(B) Reduces the percent of Bondowners required to approve Supplemental Resolutions.
Section 8. Default and Remedies.
8.1. Events of Default. The Agency hereby covenants and agrees with the purchasers and
Owners from time to time of the Bonds, to protect and safeguard the covenants and obligations
undertaken by the Agency securing the Bonds, that the following shall constitute "Events of
Default:"
(A) If default shall be made in the due and punctual payment of the principal of and premium,
if any, on any of the Bonds when the same shall become due and payable, either at
maturity, tender or by proceedings for redemption or otherwise;
(B) If default shall be made in the due and punctual payment of any installment of interest on
any Bonds whether scheduled or payable by reason of redemption or tender or otherwise;
Page 10 of 13
16
(C) If the Agency shall default in the observance and performance of any other of the
covenants, conditions and agreements on the part of the Agency contained in the Master
Resolution, and such default or defaults shall have continued for a period of sixty (60)
days after the Agency shall have received from the Owners of not less than twenty-five
percent (25%) in aggregate principal amount of the Bonds Outstanding a written notice
specifying the Event of Default and demanding the cure of such default, however, that if
the default stated in the notice cannot be corrected within such 60 day period, it shall not
constitute an Event of Default so long as corrective action is instituted by the Agency
within the 60 day period and diligently pursued, and the default is corrected as promptly
as practicable after the written notice.
8.2. 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.
(A) The Agency covenants that if an Event of Default shall have happened and shall not have
been remedied, the books of record and account of the Agency and all other records
relating to the Agency shall at all reasonable times be subject to the inspection and use of
any persons holding at least twenty-five percent (25%) of the principal amount of
Outstanding Bonds, their respective agents and attorneys and.
(B) The Agency covenants that if an Event of Default shall happen and shall not have been
remedied, the Agency will continue to account, as a trustee of an express trust, for all Tax
Increment Revenues and other moneys, securities and funds pledged under the Master
Resolution.
8.3. Waivers of Default.
(A) No delay or omission of any Owner of Bonds 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 8 of the Owners of Bonds may be
exercised from time to time and as often as may be deemed expedient by such Owners.
(B) The Owners of not less than fifty percent (50%) in principal amount of the Bonds that are
at the time Outstanding may waive any Event of Default under this Master Resolution or
the 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.
8.4. Remedies Granted in Master Resolution Not Exclusive.
No remedy by the terms of the Master Resolution conferred upon or reserved to the
Owners of the Bonds 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 the
Master Resolution or existing at law or in equity or by statute.
Section 9. Defeasance.
The Agency shall be obligated to pay any Bonds which are defeased in accordance with this
Section 9 solely from the money and Government Obligations which are deposited in escrow
agent pursuant to this Section 9. Bonds shall be deemed defeased if the Agency:
Page 11 of 13
17
9.1. irrevocably deposits money or noncallable Government Obligations in escrow with an
independent trustee or escrow agent which are calculated to be sufficient without reinvestment
for the payment of Bonds which are to be defeased; and,
9.2. files with the escrow agent or trustee an opinion from a Qualified Consultant to the effect
that the money and the principal and interest tO be received from the Government Obligations
are calculated to be sufficient, without further reinvestment, to pay the defeased Bonds when
due.
Section 10. The Series 2005 Bond.
10.1. Authorization. The Agency hereby authorizes the sale and delivery of the Series 2005
Bond in accordance with this Master Resolution to finance urban renewal projects in the Area
and to pay costs of issuing those Bonds. The aggregate principal amount of the Series 2005 Bond
shall not exceed Two Million Dollars ($2,000,000).
10.2. Delegation. The Agency Official may, on behalf of the Agency:
(A)
Negotiate the sale of the Series 2005 Bond with the Series 2005 Bank and enter into the
Series 2005 Purchase Agreement with the Series 2005 Bank.
(B)
Participate in the preparation of, authorize the distribution of, and deem final any
disclosure documents that are required for the Series 2005 Bond.
(c)
Enter into additional covenants and provisions which the Agency Official determines are
desirable to sell the Series 2005 Bond on favorable terms.
(D)
Establish the final principal amounts, maturity schedules, interest rates, sale prices,
redemption terms, payment terms and dates of the Series 2005 Bond.
(E)
Designate the Series 2005 Bond as "qualified tax-exempt obligations" under Section
265(b) of the Code.
(F) Issue, sell and deliver the Series 2005 Bond.
(G)
Execute any documents and take any other action which the Agency Official finds is
desirable to carry out this Master Resolution.
10.3. Form. The Series 2005 Bond shall be in the form prescribed by the Agency Official. The
Series 2005 Bond shall be executed on behalf of the Agency with the facsimile signatures of the
Chair and Secretary of the Agency. Each bond shall contain the following paragraph:
THIS BOND IS NOT A GENERAL OBLIGATION OF THE CITY OF WOODBURN OR THE
URBAN RENEWAL AGENCY OF THE CITY OF WOODBURN, AND IS NOT PAYABLE
FROM ANY FUNDS OF THE CITY OF WOODBURN OR THE URBAN RENEWAL
AGENCY OF THE CITY OF WOODBURN EXCEPT THE SECURITY, AS DEFINED AND
PROVIDED IN THE MASTER RESOLUTION AUTHORIZING THIS BOND. THIS BOND
DOES NOT CONSTITUTE A DEBT OR INDEBTEDNESS OF THE CITY OF WOODBURN,
Page 12 of 13
18
THE STATE OF OREGON, OR ANY POLITICAL SUBDIVISION THEREOF EXCEPT THE
AGENCY.
10.4. Tax Covenants. The Agency covenants not to take any action, or omit to take any action,
if the taking or omitting would cause interest on the Series 2005 Bond to become includable in
gross income under the Code. The Agency Official may, on behalf of the Agency, enter into
additional covenants to protect the tax-exempt stares of the Series 2005 Bond.
ADOPTED by the Woodbum Urban Renewal Agency at a regular meeting thereof this
day of 2005.
Page 13 of 13
19
WOODBUKN
September 7, 2005
TO:
FROM:
SUBJECT:
Woodburn Urban Renewal Board
Ben Gillespie, Finance Director~j)~j
Bond Purchase Agreement
RECOMMENDATION:
Board authorize the City Administrator to sign an agreement with Bank of
America for the sale of $1,850,000 of revenue bonds.
BACKGROUND:
The Woodburn Urban Renewal Plan identified improvements to Front Street to
be funded by the Agency. The 2005-06 budget included $1,251,000 for Phases 1
and 2 of the Front Street pro]ects and $6,500 for legal, financial and managerial
support. The following year Phase 3 of Front Street is anticipated to cost
$800,000. The total ($2,057,500) exceeds the amount of this debt issue. The
balance will be made up from a subsequent borrowing or tax proceeds in
excess of those needed for debt service.
DISCUSSION:
The Agency solicited proposals from banks for $1,850,000 of ten-year revenue
bonds. Bank of America's proposal was selected from the four banks that
responded. The duties of the bank and the Agency are stipulated in the
attached Purchase Agreement.
The bonds will bear interest at 4.22%, and they are tax exempt under the IRS
code.
Debt sewice will be paid quarterly.
A prepayment penalty up to 5% will be charged until September 15, 2013.
Thereafter no prepayment penalty will apply.
Agenda Item Review:
City Administrator ~P~ City AttorneyF/If)
Finance_/'~
20
Mayor and City Council
September 7, 2005
Page 2
The agreement states that the Agency will not issue obligations that have a lien
against the tax increment that is superior to these bonds.
FINANCIAL IMPACT:
The annual debt service on the bonds will be $227,732.28. Total interest charged
over the life of the bonds will be $427,322.59.
2!
SERIES 2005 PURCHASE AGREEMENT
Urban Renewal Agency of the City of Woodbum, Oregon
$t,850,000 Woodbum Urban Renewal Area Urban Renewal Bond, Series 2005
Bank of America, N.A., enters into this Purchase Agreement with the Urban Renewal Agency of the City
of Woodbum, Oregon, upon the terms and conditions described below.
t. Definitions
For purposes of this Purchase Agreement, capitalized terms not defined in this Purchase Agreement
have the meanings defined for those terms in the Master Resolution, and the following capitalized terms
shall have the following meanings, unless the context cleady requires otherwise:
"Agency" means the Urban Renewal Agency of the City of Woodbum, Oregon.
'Agency Official' means the Mayor of the City, the City Administrator, the Finance Director of the City, or
a person designated by the Mayor, the City Administrator, or the Finance Director to act as Agency
Official under the Master Resolution.
"Area" means the Woodbum Urban Renewal Area described in the Plan, and all additions thereto.
"Bank" means Bank of Amedca, N.A., or its successor.
'Bonds' means the Series 2005 Bond and any Parity Indebtedness.
"City" means the City of Woodbum, Oregon.
'Default Rate" means the rate of interest equal to Six and Twenty-Two Hundredths percent (6.22%).
"Event of Default" means the declaration by the Bank of an event of default as a result of a
determination by the Bank that there has been: (i) a failure to pay principal or interest on the Series
2005 Bond when due, as provided in the Series 2005 Bond and this Purchase Agreement; or (ii) a failure
by the Agency to comply with any of its obligations, or to perform any of its duties, under this Purchase
Agreement, the Master Resolution, or the Series 2005 Bond, other than to pay or prepay principal or
interest on the Sedes 2005 Bond when due, which failure continues, and is not cured, for a period of
more than 60 days after the Bank has made written demand on the Agency to cure such failure; or (iii) a
material misrepresentation by the Agency in this Purchase Agreement, the Master Resolution, or the
Series 2005 Bond; or (iv) a material adverse change in the financial condition of the Agency.
"Master Resolution" means the Agency's Master Resolution No. ~ adopted , 2005,
authorizing the Series 2005 Bond.
'Plan" means the Woodbum Urban Renewal Plan which was adopted pursuant to City Ordinance No.
2298, as that plan may be amended from time to time.
"Purchase Agreement" means this Series 2005 Purchase Agreement.
"Sedes 2005 Bond ' means the Agency's Woodbum Urban Renewal Area Urban Renewal Bond, Sedes
2005, which is described in Section 10 of the Master Resolution.
Series 2005 Purchase Agreement - Page 1
22
'Tax Increment Revenues' means all taxes which are divided based on the increase in value of property
in the Area which are payable to the Agency under the provisions of Article IX, Section lc of the Oregon
Constitution and ORS Chapter 457, as those provisions exist on the date of the Master Resolution.
2. Recitals
The Bank has expressed an interest in purchasing the Series 2005 Bond. The Agency has adopted the
Master Resolution, which is acceptable to the Bank. The Master Resolution authorizes execution and
delivery of this Purchase Agreement and the Series 2005 Bond.
3. Purchase Agreement
3.1 The Bank hereby agrees to purchase the Sedes 2005 Bond in the principal amount of
$1,850,000.00 at a price of 100% of par, plus accrued interest if any, subject to the terms and conditions
contained in this Purchase Agreement.
3.2 The Agency hereby agrees to repay the Series 2005 Bond on the terms and in forty (40)
quarterly payments as set forth on the schedule attached hereto as Exhibit A. Interest on the unpaid
balance shall accrue at the rate of four and twenty-two one hundredths percent (4.22%) per annum,
calculated on a 30/360 day basis, until paid. All amounts due under this Purchase Agreement and the
Series 2005 Bond shall be paid no later than September 15, 2015.
4. Prepayment
The Series 2005 Bond principal may not be prepaid prior to September 15, 2008. Thereafter, the Series
2005 Bond principal may be prepaid on any interest payment date during the following periods, in whole
or in part, by paying the principal amount to be prepaid, plus accrued interest, plus the following
prepayment premium (stated as a percentage of the principal amount which is prepaid):
Prepayment Period
September 15, 2008 through September 14, 2009
September 15, 2009 through September 14, 2010
September 15, 2010 through September 14, 2011
September 15, 2011 through September 14, 2012
September 15, 2012 through September 14, 2013
September 15, 2013 and thereafter
Prepayment Premium
Five percent
Four percent
Three percent
Two percent
One percent
No prepayment premium
5. Security for Purchase Agreement
The Agency shall provide security for the Series 2005 Bond as set forth in Section 2 of the Agency's
Master Resolution.
6. Closing
The Bank shall purchase the Series 2005 Bond at closing upon execution by the Agency of this Purchase
Agreement and the Series 2005 Bond, and upon satisfaction of the conditions specified in Section 12 and
Section 15 below.
7. Deposit and Use of Bond Proceeds
The Agency shall deposit and disburse the Series 2005 Bond proceeds as required by the Agency's
Master Resolution.
Series 2005 Purchase Agreement - Page 2
23
8. Funds and Accounts
The Agency shall create and maintain funds and accounts as required in Sections 3 and 4 of the Master
Resolution.
9. Tax Covenants
9.1 The Agency covenants for the benefit of the Bank to comply with all provisions of the Code
which are required for the Series 2005 Bond interest to be excludable from gross income under the
Code. The Agency further covenants for the benefit of the Bank to comply with all provisions of the Code
which are required so that the Series 2005 Bond is not a "private activity bond" within the meaning of
Section 141 of the Code. The Agency specifically covenants herein that it shall not take any action or
omit any action, if it would cause the Series 2005 Bond to become "arbitrage bonds" under Section 148
of the Code, and that it shall pay, but solely from the pledged security, all rebates or penalties on the
"gross proceeds" of the Series 2005 Bond when and as required under that Section of the Code.
9.2. The Agency designates the Series 2005 Bond for purposes of paragraph (3) of Section 265(b) of
the Code as a "qualified tax-exempt obligation" and covenants that the Series 2005 Bond does not
constitute a private activity bond as defined by Section 141 of the Code, and that not more than
$10,000,000 aggregate principal amount of obligations, the interest on which is excludable under Section
103(a) of the Code from gross income for federal income tax purposes (excluding, however, private
activity bonds other than qualified 501(c)(3) bonds) including the Series 2005 Bond, have been or shall
be issued by the Agency or any subordinate entities during the calendar year 2003.
10. Default
If an Event of Default occurs, the Bank may exercise any remedy available at law or in equity and as set
forth in the Master Resolution and this Purchase Agreement. In addition to the remedies set forth in the
Master Resolution and this Purchase Agreement, upon the occurrence of an Event of Default due to
either (~ a failure to pay principal or interest on the Series 2005 Bond when due, as provided in the
Series 2005 Bond and this Purchase Agreement; or (ii) a failure by the Agency to comply with any of its
obligations, or to perform any of its duties, under Section 9 of this Purchase Agreement, then the Bank
may declare that the principal amount of the Series 2005 Bond then outstanding shall bear interest at the
Default Rate. If the Agency subsequently cures all such Events of Default, then the rate of interest on
the Series 2005 Bond shall automatically decrease to the rate set forth in Section 3.2 of this Purchase
Agreement, effective on the date that notice of such cure is received by the Bank.
11. Superior, Parity and Subordinate Obligations
11.1. The Agency shall not issue obligations which have a lien on the Security which is superior to the
lien of the Bonds.
11.2. Except as provided in Section 11.3, the Agency may issue other Parity Indebtedness (i) with the
express written consent of the Bank, or (ii) without the express written consent of the Bank if all of the
following conditions are met:
As of the date of Closing of the Parity Indebtedness, no Event of Default under the Master
Resolution and this Purchase Agreement has occurred and is continuing; and,
(B)
At the time of the issuance of the Parity Indebtedness the balance in the Bond Reserve Account
is at least equal to the Reserve Requirement; and,
Series 2005 Purchase Agreement - Page 3
24.
(C) On or before the date of closing of the Parity Indebtedness the Agency files in its public records
either:
(1)
a certificate of the Agency Official stating that the Tax Increment Revenues for the most
recently completed Fiscal Year is at least equaled one hundred fifty percent (150.00%)
of the Maximum Annual Debt Service on all then Outstanding Bonds, with the proposed
Parity Indebtedness treated as Outstanding; or,
a report of a Qualified Consultant projecting that in each of the Fiscal Years immediately
following the issuance of the Parity Indebtedness, the projected Tax Increment
Revenues of the Agency will be no less than one hundred fifty percent (150.00%) of the
Annual Debt Service due in each of the corresponding Fiscal Years on all Outstanding
Bonds with the Padty Indebtedness being treated as Outstanding Bonds.
11.3. The City may issue Parity Indebtedness to refund Outstanding Bonds without complying with
Section 11.2 if:
the refunded Bonds are defeased on the date of delivery of the refunding Parity Indebtedness;
and,
(~)
the Annual Debt Service on the refunding Padty Indebtedness does not exceed the Annual Debt
Service on the refunded Bonds in any Fiscal Year by more than $5,000.
11.4. The Estimated Average Interest Rate for Variable Rate Obligations shall be calculated as
provided in this Section.
(A)
Unless Section 11.4(B) applies, for purposes of calculating Annual Debt Service for the tests for
issuing Parity Indebtedness under Section11.2, the Estimated Average Interest Rate for any
Sedes of Variable Rate Obligations means the average of the weekly Bond Buyer 20 Bond Index
for the 52 week pedod that ends on or immediately before the last day of the month that
precedes the month in which the Padty Indebtedness is sold, expressed as an annualized
interest rate; or,
(B)
For any Sedes of Variable Rate Obligations that have been outstanding for at least 52 weeks at
the end of the pedod described in Section 11.4(A), if the actual, annualized rate on that Sedes
dudng that 52 week period is greater than the average, annualized rate described in Section
11.4(A), the Estimated Average Interest Rate for that Series means the average of the actual
rates on that Sedes during that 52 week pedod, expressed as an annualized interest rate.
(c)
To determine the amount that is required to be maintained in the Bond Reserve Account, the
Estimated Average Interest Rate for a Sedes of Parity Indebtedness shall be the average of the
weekly Bond Buyer 20 Bond Index for the 52 week period that ends on or immediately before the
last day of the month that precedes the month in which the Parity Indebtedness is sold,
expressed as an annualized interest rate. This calculation of Estimated Average Interest Rate
shall be used for that Series of Parity Indebtedness Obligations as long as that Series of Parity
Indebtedness Obligations is Outstanding.
11.5. The Estimated Debt Service Requirement for Balloon Payments shall be calculated in
accordance with this Section11.5.
(A)
Whenever a Balloon Payment will be Outstanding on the date a Series of Parity Indebtedness is
issued, the Agency Official shall prepare a schedule of principal and interest payments for a
hypothetical Sedes of Padty Indebtedness that refunds each Outstanding Balloon Payment in
Series 2005 Purchase Agreement - Page 4
accordance with this Section 11.5. The Agency Official shall prepare that schedule as of the
date the Parity Indebtedness is sold, and that schedule shall be used to determine compliance
with the tests for Parity Indebtedness in Section11.2.
Each hypothetical Series of refunding Parity Indebtedness shall be assumed to be paid in equal
annual installments of principal and interest sufficient to amortize the principal amount of the
Balloon Payment over the term selected by the Agency Official; however, the Agency Official
shall not select a term that exceeds the lesser of 20 years from the date on which the Series of
Parity Indebtedness containing the Balloon Payment is issued or the Agency's estimate of the
remaining weighted average useful life (expressed in years and rounded to the next highest
integer) of the assets which are financed with the Balloon Payment. The annual installments
shall be assumed to be due on the first day of each Fiscal Year, with the first installment due at
least six months after the date on which the Estimated Debt Service Requirement is calculated.
(c)
The hypothetical Series of refunding Parity Indebtedness shall be assumed to bear interest at the
Agency Official's estimate of the average rate that a Series of Parity Indebtedness would bear if
it is amortized as provided in Section 11.5(B) and is sold at the time the schedule described in
Section 11.5(A) is prepared.
11.6. The Agency may issue Subordinate Indebtedness only if the Subordinate Indebtedness is not
payable from any account of the Tax Increment Fund except the Subordinate Indebtedness Account, and
the Subordinate Indebtedness clearly states that:
It is secured by a lien on or pledge of the Security which is subordinate to the lien on, and pledge
of, the Security for the Bonds; and,
(B)
It is not payable from any account of the Tax Increment Fund except the Subordinate
Indebtedness Account.
12. Fees, Costs and Expenses
12.1 Bank's Costs of Enforcement. If the Bank incurs any expenses in connection with enforcing this
Purchase Agreement, or if the Bank takes collection action under this Purchase Agreement, the Agency
shall pay to the Bank, on demand, the Bank's reasonable costs and reasonable attorneys' fees and
expenses, whether at trial, on appeal or otherwise, including any allocated costs of in-house counsel.
12.2 Other Fees and Costs. The Agency shall pay the fees and costs of legal counsel, and any other
expenses and costs which the Agency incurs in connection with this Purchase Agreement. The Agency
shall also reimburse the Bank for its legal expenses, in an amount not to exceed $500.00, promptly at
Closing. The Bank shall pay all other out-of-pocket expenses of the Bank and Bank's counsel, including
travel and other expenses.
12.3 The Agency shall pay to the Bank an origination fee of $1,850.00 promptly at Closing.
13. Representations, Warranties and Agreements of the Agency
By executing this Purchase Agreement in the space provided below, and delivering the Series 2005
Bond to the Bank, the Agency represents and warrants to, and agrees with the Bank on the date of
delivery of the Series 2005 Bond to the Bank that:
13.1 The Agency is duly created and existing under the laws of the State of Oregon, has all necessary
power and authority to enter into this Purchase Agreement and perform its duties under the Master
Resolution and this Purchase Agreement, and that the Master Resolution, this Purchase Agreement and
Series 2005 Purchase Agreement - Page 5
26
the Sedes 2005 Bond will, when executed by an Agency Official, constitute legal, valid and binding
obligations of the Agency which are enforceable in accordance with their terms.
13.2 The acceptance of this Purchase Agreement, the adoption of the Master Resolution, and the
execution and delivery of the Series 2005 Bond will not conflict in any material respect with, or constitute
a material breach of or default under, any law, charter provision, court decree, administrative regulation,
resolution, ordinance or other agreement to which the Agency is a party or by which it is bound.
13.3 There is no action, suit, proceeding or investigation at law or in equity before or by any court or
government, city or body pending or, to the best of the knowledge of the Agency, threatened against the
Agency or the City of Woodbum to restrain or enjoin the acceptance of this Purchase Agreement, the
adoption of the Master Resolution or the execution and delivery of the Series 2005 Bond, or the
collection and application of the funds as contemplated by the Master Resolution and this Purchase
Agreement, which, in the reasonable judgment of the Agency, would have a material and adverse effect
on the ability of the Agency to pay the amounts due under this Purchase Agreement.
13.4 To the extent permitted by law, the Agency agrees to indemnify and hold harmless the Bank and
all of its agents and employees against any and all losses, claims, damages, liabilities and expenses
arising out of any statement made by the Agency to the Bank, its agents or employees, which relates to
this Purchase Agreement, the Series 2005 Bond, the Agency, the Plan, and the Tax Increment
Revenues, and which is untrue or incorrect in any material respect.
14. Financial Statements; Notice of Adverse Developments; Budgets
14.1 Within 210 days after the end of each of its Fiscal Years, the Agency shall provide the Bank with
a copy of each of the Agency's and the City's final, annual audited financial statements while any
amounts remain outstanding under the Series 2005 Bond.
14.2 The Agency shall give prompt notice to the Bank of (i) any development which is likely to have a
material, adverse effect on the financial condition of the Agency generally; (ii) any litigation or
proceeding in which the Agency is a party if an adverse decision would require the Agency to pay more
than $1,000,000.00, or deliver assets the value of which exceeds $1,000,000.00, in excess of the
amount that the claim is considered to be covered by insurance; and (iii) the existence of any substantial
dispute with any other governmental authority.
14.3 The Agency shall provide the Bank with each of the Agency's and the City's final, proposed
budgets which are prepared, and each budget which is adopted, within 45 days after proposal or
adoption, for both while any amounts remain outstanding under the Series 2005 Bond.
15. Conditions to the Obligations of the Bank
The Bank may refuse to purchase the Sedes 2005 Bond under this Purchase Agreement, unless, on or
prior to the date of closing, the Bank shall have received:
15.1 a certified copy of the duly authorized Master Resolution, a signed original of this Purchase
Agreement and the Series 2005 Bond;
15.2 an opinion of bond counsel to the effect that:
the Master Resolution, the Purchase Agreement, and the Sedes 2005 Bond are valid and
legally binding obligations of the Agency, enforceable against the Agency in accordance with
their terms,
Series 2005 Purchase Agreement - Page 6
B. the interest payable on the Sedes 2005 Bond is excludable from gross income under the
Code,
C. the Series 2005 Bond is not a "pdvate activity bond" within the meaning of Section 141 of
the Code, and
15.3
the Series 2005 Bond has been designated as a qualified tax-exempt obligation under
Section 265(b)(3)(B) of the Code;
the certificate of the Agency Official to the effect that:
Ao
there is no action, suit, proceeding or investigation at law or in equity before or by any court
or government, city or body pending or, to the best of the knowledge of the Agency,
threatened against the Agency to restrain or enjoin the adoption of the Master Resolution or
the execution and delivery of this Purchase Agreement and the Series 2005 Bond, or the
collection and application of funds as contemplated by this Purchase Agreement and the
Series 2005 Bond, which, in the reasonable judgment of the Agency, would have a matedal
and adverse effect on the ability of the Agency to pay the amounts due under the Series
2005 Bond, and
15.4
Bo
the adoption of the Master Resolution and the execution and delivery of this Purchase
Agreement and the Series 2005 Bond do not and will not conflict in any material respect with
or constitute on the part of the Agency a breach of or default under any law, charter
provision, court decree, administrative regulation, resolution, ordinance or other agreement
or instrument to which the Agency is a party or by which it is bound;
a copy of the Agency's audited financial statements for the past three years; and
15.5 such additional legal opinions, certificates, proceedings, instruments or other documents as the
Bank, its counsel or the Agency's Bond Counsel may reasonably request to evidence compliance by the
Agency with the legal requirements for execution and delivery of this Purchase Agreement, the Series
2005 Bond and the due performance or satisfaction by the Agency of all agreements then to be
performed and all conditions then to be satisfied by the Agency.
16. Arbitration
16.1 This Section concerns the resolution of any controversies or claims between the Agency and the
Bank, including but not limited to those that arise from:
this Purchase Agreement (including any renewals, extensions or modifications of this Purchase
Agreement),
the Master Resolution, the Series 2005 Bond, or any document, agreement or procedure related
to or delivered in connection with this Purchase Agreement,
C. any default under this Purchase Agreement, or
Do
any claims for damages resulting from any business conducted between the Agency and the
Bank relating to this Purchase Agreement, including claims for injury to persons, property or
business interest (torts).
16.2 At the request of the Agency or the Bank, any such controversies or claims (collectively a
'Claim') will be resolved by binding arbitration in accordance with the Federal Arbitration Act (Title 9,
Series 2005 Purchase Agreement - Page 7
28
U.S. Code) (the "Act"). The Act will apply even though this Purchase Agreement provides that it is
governed by Oregon law.
16.3 Arbitration proceedings will be determined in accordance with the Act, the then-current rules and
procedures for the arbitration of financial services disputes of the Amedcan Arbitration Association or
any successor thereof ('AAA'), and the terms of this paragraph. In the event of any inconsistency, the
terms of this paragraph shall control. If AAA is unwilling or unable to (i)serve as the provider of
arbitration or (id enforce any provision of this arbitration clause, any party to this Financing Agreement
may substitute another arbitration organization with similar procedures to serve as the provider of
arbitration.
16.4 The arbitration shall be administered by AAA and conducted, unless othenNise required by law, in
the state specified in the governing law section of this Purchase Agreement. All Claims shall be
determined by one arbitrator; however, if Claims exceed $5,000,000, upon the request of the Agency or
the Bank, the Claims shall be decided by three arbitrators. All arbitration hearings shall commence
within 90 days of the demand for arbitration and close within 90 days of commencement and the award
of the arbitrator(s) shall be issued within 30 days of the close of the hearing. However, the arbitrator(s),
upon a showing of good cause, may extend the commencement of the hearing for up to an additional 60
days. The arbitrator(s) shall provide a concise written statement of reasons for the award.
16.5 The arbitrator(s) will have the authority to decide whether any Claim is barred by the statute of
limitations and, if so, to dismiss the arbitration on that basis. For purposes of the application of the
statute of limitations, the service on AAA under applicable AAA rules of a notice of Claim is the
equivalent of the filing of a lawsuit. Any dispute concerning this arbitration provision or whether a Claim
is arbitrable shall be determined by the arbitrator(s). The arbitrator(s) shall have the power to award
legal fees pursuant to the terms of this Purchase Agreement.
16.6 The decision that results from an arbitration proceeding may be submitted to any authorized
court of law to be confirmed and enforced.
16.7 This provision does not limit the dght of the Agency or the Bank to:
A. exercise self-help remedies such as, but not limited to, setoff,
B. act in a court of law, before, during or after the arbitration proceeding to obtain:
(i) a provisional or intedm remedy; and/or
(ii) additional or supplemental remedies.
16.8 The filing of a court action is not intended to constitute a waiver of the dght of the Agency or the
Bank, including the suing party, thereafter to require submittal of the Claim to arbitration.
17. Notices
Any notices required to be given pursuant to this Purchase Agreement shall be given to the following
addresses:
Agency:
Urban Renewal Agency of the City of Woodburn
270 Montgomery Street
Woodbum, OR 97071
Attn.: Finance Director
Bank:
Bank of Amedca, N.A.
Series 2005 Purchase Agreement - Page 8
121 S.W. Morrison Street, Suite 1700
Portland, OR 97204-3117
Attn.: Government Banking (OR1-129-17-15)
18. Assignment; Survival; Purchase Agreement Constitutes Contract
This Purchase Agreement may not be assigned by the Agency. All representations, warranties and
agreements contained in Section 9 of this Purchase Agreement shall survive the execution, delivery and
payment of the Series 2005 Bond. This Purchase Agreement and the Series 2005 Bond shall constitute
a contract between the Agency and the Bank. The Bank's extension of credit hereunder is expressly
made in reliance on such contract.
19. Applicable Law
This Purchase Agreement shall be governed and interpreted in accordance with the laws of the State of
Oregon.
20. Severability and Waivers
If any part of this Purchase Agreement is not enforceable, the rest of the Purchase Agreement may be
enforced. The Bank retains all rights, even if the Bank makes a loan after default. If the Bank waives a
default, it may enforce a later default. Any consent or waiver under this Purchase Agreement must be in
writing.
21. Counterparts
This Purchase Agreement may be executed simultaneously in several counterparts, each of which shall
be an original and all of which shall constitute one and the same agreement.
Under Oregon law, most a.qreements, promises and commitments made by the Bank after
October 3~ 1989~ concernin~l loans and other credit extensions which are not for personal~ family
or household purposes or secured solely by the borrower's residence must be in writin.q,
express consideration and be si,qned by us to be enforceable.
DATED this 15th day of September, 2005.
BANK OF AMERICA, N.A.
By:
Senior Vice President
URBAN RENEWAL AGENCY OF THE CITY OF WOODBURN
Woodbum, Oregon
By:
Agency Official
Series 2005 Purchase Agreement - Page 9
3O
EXHIBIT A
PAYMENT SCHEDULE
Dated Date: September 15, 2005
The payments, including the due dates, the principal amount, the interest rate, and the interest amount
and total debt service are included on the payment schedule below:
Payment Principal Interest Rate Interest Total Debt
Date Service
12/15/2005
03/15/2006
06115/2006
09115/2006
12/15/2006
03/15/2007
06115/2007
09115/2007
12/15/2007
03/15/2008
06115/2008
09/15/2008
12/15/2008
03/15/2009
06115/2009
0g115/2009
12/15/20o9
03115/2010
06/15/2010
09/1512010
12/1512010
03/15/2011
06/15/2011
09/15/2011
12/15/2011
03/15/2012
06/15/2012
09115/2012
12/15/2012
03115/2o 13
06115/2013
09115/2013
12/15/2013
03/15/2014
06/15/2014
09115/2014
12/15/2014
03115/2015
06/15/2015
09115/2015
$ 37,415.57
37,810.30
38,209.20
38,612.31
39,019.67
39,431.33
39,847.33
40 267.72
40 692.54
41 121.85
41 555.68
41 994.10
42 437.13
42 884.85
43 337.28
43,794.49
44,256.52
44,723.43
45,195.26
45,672.07
46,153.91
46,640.83
47,132.89
47,630.15
48,132.64
48,640.44
49,153.60
49,672.17
50,196.21
50,725.78
51,260.94
51,801.74
52,348.25
52,900.52
53,458.62
54,022.61
54,592.55
55,168.50
55,750.53
56,338.49
4.22% $19,517.50
4.22% 19,122.77
4.22% 18,723.87
4.22% 18,320.76
4.22% 17,913.40
4.22% 17,501.74
4.22% 17,085.74
4.22% 16,665.35
4.22% 16,240.53
4.22% 15,811.22
4.22% 15,377.39
4.22% 14,938.97
4.22% 14,495.94
4.22% 14,048.22
4.22% 13,595.79
4.22% 13,138.58
4.22% 12,676.55
4.22% 12,209.64
4.22% 11,737.81
4.22% 11,261.00
4.22% 10,779.16
4.22% 10,292.24
4.22% 9,800.18
4.22% 9,302.92
4.22% 8,800.43
4.22% 8,292.63
4.22% 7,779.47
4.22% 7,260.90
4.22% 6,736.86
4.22% 6,207.29
4.22% 5,672.13
4.22% 5,131.33
4.22% 4,584.82
4.22% 4,032.55
4.22% 3,474.45
4.22% 2,910.46
4.22% 2,340.52
4.22% 1,764.57
4.22% 1,182.54
4.22% 594.37
$ 56,933.07
56,933.07
56 933.07
56 933.07
56,933.07
56 933.07
56,933.07
56 933.07
56 933.07
56 933.07
56 933.07
56 933.07
56 933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.O7
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,933.07
56,932.86
$1,850,000.00
$427,322.59 $2,277,322.59
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