AN ORDINANCE relating to City capital facilities; amending Ordinance 117738 to accommodate the issuance of obligations bearing interest at variable rates and to increase the total principal amount of bonds authorized by that ordinance.

WHEREAS, by Ordinance 117738 The City of Seattle authorized not to exceed One Hundred Twenty-Seven Million Five Hundred Thousand Dollars ($127,500,000) of obligations to provide funds to pay all or part of the cost of acquiring an office building and certain other City purposes; and

WHEREAS, the City desires to amend Ordinance 117738 increase the amount of bonds authorized therein, to enable a portion of the bonds to bear interest at variable rates and to permit the conversion of interest on those bonds from taxable to tax-exempt rates, and to make certain other changes; NOW, THEREFORE,

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. Section 1 of Ordinance 117738 is amended to read as follows:

Definitions. As used in this ordinance, the following words shall have the meanings hereinafter set forth:

"Bond Fund" means the City's Bond Interest and Redemption Fund, previously created and established and to be used for the payment of the principal of and interest on the Obligations.

"Bond Register" means the books or records maintained by the Registrar for the purposes of registration of the Bonds.

"Bond Sale Resolution" means a resolution of the City Council adopted pursuant to this ordinance and confirming the sale and final terms of one or more series of the Bonds.

"Bonds" means the limited tax general obligation bonds issued pursuant to this ordinance.

"City" means The City of Seattle, Washington, a municipal corporation duly organized and existing under the laws of the State of Washington.

"City Council" means the City Council of the City, as duly and regularly constituted from time to time.

"Code" means the Internal Revenue Code of 1986, as amended, or any successor thereto, and all applicable regulations thereunder.

"Director of Finance" means the Director of the Department of Finance of the City, and any successor to substantially the same duties.

"Notes" means any series of limited tax general obligation bond anticipation notes issued pursuant to this ordinance.

"Note Fund" means the City's General Bond Interest and Redemption Fund, previously created and established and to be used for the payment of the principal of and interest on the Obligations.

"Obligations" means, collectively, the Bonds and the Notes and related obligations to repay liquidity advances or loans under any agreement with a liquidity provider and to make payments on any interest rate swap approved by the Bond Sale Resolution.

"Register" means the books or records maintained by the Registrar for the purposes of registration of the notes.

"Registrar" means the entity serving as registrar and paying agent for the Obligations, pursuant to Chapter 5.10 of the Municipal Code (Ordinance 111724) as now existing or as hereafter amended.

"Tax-Exempt Bonds" and "Tax-Exempt Notes" means, respectively, the Bonds and the Notes for which, as of their date of issuance or from and after a later date pursuant to terms set forth in the Bond Sale Resolution, the interest on whichis not included in gross income for federal income tax purposes.

"Tax-Exempt Obligations" means, collectively, the Tax-Exempt Bonds and the Tax Exempt Notes. The terms "Tax-Exempt Bonds" and "Tax-Exempt Notes" also include any Bonds and Notes from and after the time that the interest on such Bonds and Notes becomes excluded from gross income for federal income tax purposes.

Section 2. Section 2 of Ordinance 117738 is amended to read as follows:

Debt Capacity. The assessed valuation of the taxable property of the City as ascertained by the last preceding assessment for City purposes for the collection of taxes in the calendar year 19951996 is Forty-Two Billion Three Hundred Forty-Seven Million Six Hundred Fifty Thousand Four Hundred Seventy-Eight Dollars ($42,347,650,478)Forty-Two Billion Three Hundred Twelve Million Seven Hundred Sixty-Four Thousand Two Hundred Thirty-Nine Dollars ($42,312,764,239). The City has outstanding general indebtedness evidenced by limited tax general obligation bonds, installment purchase contracts and lease purchase agreements as of July 1, 1995, in the principal amount of Three Hundred Seven Million Nine Hundred Seventy Thousand Eighty-Four Dollars ($307,970,084) Four Hundred Forty-Four Million Nine Hundred Twenty-Three Thousand Six Hundred and Twenty-Four Dollars ($444,923,624) incurred within the limit of up to one and one-half percent (1%) of the value of the taxable property within the City permitted for general municipal purposes without a vote of the qualified voters therein, and has outstanding unlimited tax general obligation bonds in the principal amount of Sixty-Two Million Twelve Thousand One Hundred Thirty Five Dollars ($62,012,135) Fifty-Six Million Six Hundred Forty-Three Two Hundred Sixty Nine ($56,643,269) incurred within the limit of up to two and one-half percent (2%) of the value of the taxable property within the City for capital purposes only, unlimited tax general obligation bonds in the principal amount of Forty-Six Million Seven Hundred One Thousand Thirty-Five Dollars ($46,701,035) Forty-Four Million Eight Hundred Thirty-Two Thousand Two Hundred Thirty Dollars ($44,832,230) incurred within the additional limit of up to two and one-half percent (2%) of the value of the taxable property within the City for utility purposes, and unlimited tax general obligation bonds in the principal amount of Nine Million Nine Hundred Sixty-One Thousand Eight Hundred Thirty Dollars ($9,961,830)Nine Million Seventy-Three Thousand Two Hundred Seventy Dollars ($9,073,270) incurred within the additional limit of up to two and one-half percent (2%) of the value of the taxable property within the City for parks and open space purposes, issued pursuant to a vote of the qualified voters of the City. The principal amount of indebtedness for which bonds are authorized herein to be issued is not to exceed One Hundred Twenty-Seven Million Five Hundred Thousand Dollars ($127,500,000)One Hundred Thirty-Five Million Dollars ($135,000,000).

Section 3. Section 3 of Ordinance 117738 is amended to read as follows:

Authorization and Description of Bonds. The City is authorized to borrow money on the credit of the City and issue negotiable limited tax general obligation bonds evidencing that indebtedness in the maximum principal amount of not to exceed One Hundred Twenty-Seven Million Five Hundred Thousand Dollars ($127,500,000)One Hundred Thirty-Five Million Dollars ($135,000,000) for general City purposes to provide the funds to pay all or part of the cost of acquiring an office building for the City (together with related rights in land), to improve and maintain City facilities, and for other City purposes as may be approved by the City Council and to pay the costs of issuance and sale of the bonds (the "costs of issuance"). Proceeds of the Bonds also may be used to refund and redeem the Notes. The general indebtedness to be incurred shall be within the limit of up to one and one-half per cent (1%) of the value of the taxable property within the City permitted for general municipal purposes without a vote of the qualified voters therein. The Bonds may be issued in one or more series, and may be combined with other general obligation bonds authorized separately; shall be designated either as Limited Tax General Obligation Bonds, 19951996, with such additional designation as may be set forth in the Bond Sale Resolution Series A (Tax-Exempt) or Limited Tax General Obligation Bonds, 1995, Series B (Taxable) collectively, the "Bonds") or shall be designated similarly as determined by the Director of Finance; shall be dated as specified in a resolution of the City Council adopted pursuant to this ordinance and confirming the sale and final terms of the Bonds (the "Bond Sale Resolution") the Bond Sale Resolution; shall be in the denomination of five thousand dollars ($5,000) or any integral multiple thereof within a single maturity or such other denomination within a maturity provided by the Bond Sale Resolution; shall be numbered separately, in the manner and with any additional designation as the Registrar (collectively, the fiscal agencies of the State of Washington in Seattle, Washington or New York, New York) deems necessary for the purpose of identification; shall bear interest at such rate or rates (which may be fixed, variable or adjustable) (computed on the basis of a 360-day year of twelve 30-day months) ,computed in such a manner as shall be specified and approved by the Bond Sale Resolution, except that the true interest cost rate shall not exceed Twelve percent (12%) per annum with respect to the Tax-Exempt Bonds and Fifteen Twenty percent (15%) (20%) per annum with respect to taxable Bonds, payable semiannually (once interest payments commence under the terms of the Bond Sale Resolution) on such dates as are specified by the Bond Sale Resolution. The Bonds shall mature on the dates and in years and amounts to be specified in the Bond Sale Resolution, except that the final maturity of the Bonds shall not be later than December 31, 2026 and all or some of the Bonds may be term bonds with mandatory redemption amounts and dates, all to be as provided by the Bond Sale Resolution. The Bonds also may be structured as commercial paper or some other form of variable rate obligations as set forth in the Bond Sale Resolution. The Mayor and the Director of Finance are separately authorized to execute and deliver, on behalf of the City, any contracts consistent with the provisions of this ordinance for which the City's approval is necessary or to which the City is a party and that are related or incidental to the initial issuance and sale of the Bonds.

The life of the capital facilityfacilities to be acquired with the proceeds of the Bonds exceeds the term of the Bonds.

Section 4. Section 4 of Ordinance 117738 is amended to read as follows:

Bond Sale Resolution. The City Council may adopt the Bond Sale Resolution and in that resolution may provide for the matters described in this ordinance and such other matters that the City Council deems necessary and appropriate to carry out the purposes of this ordinance.

The Bond Sale Resolution may provide for bond insurance and/or other credit or liquidity support facilities, and interest rate swap arrangements, and may provide conditions or covenants relating thereto, including additional terms, conditions and covenants relating to the Bonds that are required by the bond insurer or other credit or liquidity provider and are consistent with the provisions of this ordinance, including but not limited to restrictions on investments and requirements of notice to and consent of the bond insurer or other credit or liquidity provider. The Bond Sale Resolution may approve such other documents the City Council may deem necessary to carry out the purposes of this ordinance, including but not limited to agreements with bond insurers, credit or liquidity providers, remarketing agents, underwriters, fiscal agencies, interest rate swap counterparties, custodians and the Registrar.

The Bond Sale Resolution may designate and determine the amount of Tax-Exempt Bonds and taxable Bonds, may provide for the convertibility of Bonds from taxable Bonds to Tax-Exempt Bonds, and may approve and authorize the initial establishment and any the mechanism for the redetermination of the interest rate or rates on the Bonds (subject to the limitation in Section 3 hereof) and any tender, purchase, remarketing or redemption of the Bonds. The City Council also may determine and specify by the Bond Sale Resolution the amount, if any, from the proceeds of or accrued interest on the Bonds to be deposited into specified funds, subfunds, accounts and subaccounts.

Section 5. Section 6 of Ordinance 117738 is amended to read as follows:

Section 6. Payment of Bonds. Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America. Interest on the Bonds shall be paid by checks or drafts of the Registrar mailed on the interest payment date to registered owners of Bonds at the addresses for such owners as those owners and addresses appear on the Bond Register on the fifteenth (15th) day of the calendar month preceding the interest payment date. Principal of the Bonds shall be payable at maturity or on such date as may be fixed for prior redemption upon presentation and surrender of the Bonds by the registered owners at either of the principal offices of the Registrar, at the option of such registered owners. Notwithstanding the foregoing, as long as the Bonds are registered in the name of DTC or its nominee, payment of principal of and interest on the Bonds shall be made at the times and in the manner a manner consistent with the Bond Sale Resolution and as set forth in the Letter of Representations with DTC in substantially the form on file with the Director of Finance, which Letter of Representations is hereby approved and which may be executed by the Director of Finance.

Section 6. Section 7 of Ordinance 11738 is amended to read as follows:

Section 7. Redemption and Open Market Purchase of Bonds. All or some of the Bonds may be subject to redemption prior to their stated maturity at the option of the City at the times and on the terms set forth in the Bond Sale Resolution.

The City shall redeem any term bonds, if not redeemed under the optional redemption provisions set forth above or purchased in the open market under the provisions set forth below, by lot (in such manner as the Registrar shall determine) at par plus accrued interest on the dates and in the years and principal amounts as set forth in the Bond Sale Resolution.

If the City shall redeem term bonds under the optional redemption provisions set forth in the Bond Sale Resolution or purchase term bonds in the open market as set forth below, the par amount of the term bonds so redeemed or purchased (irrespective of their redemption or purchase prices) shall be credited at the par amount thereof against such remaining mandatory redemption amounts as determined by the Director of Finance or, if no such determination is made, on a pro-rata basis.

Portions of the principal amount of any Bond may be redeemed, in installments of five thousand dollars ($5,000) or any integral multiple thereof, or in such other amounts, all as determined by the Bond Sale Resolution. Except as may be otherwise provided in the Bond Sale Resolution, ifIf less than all of the principal amount of any Bond is redeemed, on surrender of that Bond at either of the principal offices of the Registrar, there shall be issued to the registered owner, without charge therefor, a new Bond (or Bonds, at the option of the registered owner) of the same series, maturity and interest rate in any of the denominations authorized by the Bond Sale Resolution in the aggregate total principal amount remaining unredeemed.

The City reserves the right and option to purchase any or all of the Bonds in the open market at any time at any price acceptable to the City plus accrued interest to the date of purchase.

All Bonds purchased or redeemed under this Section 7 shall be cancelled.

Except as may be otherwise provided in the Bond Sale Resolution, the The City shall cause notice of any intended redemption of Bonds to be given not less than 30 nor more than 60 days prior to the date fixed for redemption by first-class mail, postage prepaid, to the registered owner of any Bond to be redeemed at the address appearing on the Bond Register at the time the Registrar prepares the notice, and the requirements of this sentence shall be deemed to have been fulfilled when notice has been mailed as so provided, whether or not it is actually received by the owner of any Bond. Interest on Bonds called for redemption shall cease to accrue on the date fixed for redemption unless the Bond or Bonds called are not redeemed when presented pursuant to the call. In addition, the redemption notice shall be mailed within the same period, postage prepaid, to Moody's Investors Service, Inc., and Standard & Poor's Corporation at their offices in New York, New York, or their successors, to any bond insurer or other liquidity provider for the Bonds, to each Nationally Recognized Municipal Securities Information Repository or to the Municipal Securities Rulemaking Board, to any state Information Depository for Washington State, and to such other person and with such additional information as the Director of Finance shall determine or as specified in the Bond Sale Resolution, but none of these additional mailings shall be a condition precedent to the redemption of Bonds.

If any Bond is not redeemed when properly presented at its maturity or call date, the City shall be obligated to pay interest on that Bond at the same rate provided in the Bond from and after its maturity or call date until that Bond, both principal and interest, is paid in full or until sufficient money for its payment in full is on deposit in the Bond Fund Account and the Bond has been called for payment by giving notice of that call to the registered owner of each of those unpaid Bonds.

Section 7. Section 8 of Ordinance 117738 is amended to read as follows:

Section 8. Form and Execution of Bonds. The Bonds shall be typed, printed or lithographed on good bond paper in a form consistent with the provisions of this ordinance, the Bond Sale Resolution and State law, shall be signed by the Mayor and Director of Finance, either or both of whose signatures may be manual or in facsimile, and the seal of the City or a facsimile reproduction thereof shall be impressed or printed thereon.

Only Bonds bearing a Certificate of Authentication in substantially the following form, manually signed by the Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance:

block protect here CERTIFICATE OF AUTHENTICATION

This Bond is one of the fully registered The City of Seattle, Washington, Limited Tax General Obligation Bonds, 1995 1996, [Series A (Tax-Exempt)] [Series B (Taxable)] [Series Designation], described in the Bond Ordinance.

WASHINGTON STATE FISCAL AGENCY

Registrar

By

Authorized Signer

The authorized signing of a Certificate of Authentication shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered and are entitled to the benefits of this ordinance.

If any officer whose facsimile signature appears on the Bonds ceases to be an officer of the City authorized to sign bonds before the Bonds bearing his or her manual or facsimile signature are authenticated or delivered by the Registrar or issued by the City, those Bonds nevertheless may be authenticated, delivered and issued and, when authenticated, issued and delivered, shall be as binding on the City as though that person had continued to be an officer of the City authorized to sign bonds. Any Bond also may be signed on behalf of the City by any person who, on the actual date of signing of the Bond, is an officer of the City authorized to sign bonds, although he or she did not hold the required office on the date of issuance of the Bonds.

Section 8. Section 16 of Ordinance 117738 is amended to read as follows:

Section 16. Preservation of Tax Exemption for Interest on Obligations. The City covenants that it will take all actions, consistent with the terms of the Obligations, this ordinance, and the Bond Sale Resolution, reasonably within its power and necessary to prevent interest on the Tax-Exempt Obligations from being included in gross income for federal income tax purposes, and the City will neither take any action nor make or permit any use of proceeds of the Tax-Exempt Obligations or other funds of the City treated as proceeds of the Tax-Exempt Obligations at any time during the term of the TaxExempt Obligations which will cause interest on the Tax-Exempt Obligations to be included in gross income for federal income tax purposes. The City certifies that it has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon.

Section 9. Section 22 of Ordinance 117738 is amended to read as follows:

Section 10. Appropriation. Contingent upon receipt of the proceeds of Obligations in sufficient amount, there is appropriated from the Acquisition Fund One Hundred Twenty Seven Million Five Hundred Thousand Dollars ($127,500,000) One Hundred Thirty-Five Million Dollars ($135,000,000), or so much thereof as may be necessary, for the purpose of making payments in connection with the acquisition by the City of interests in the office building commonly known as Key Tower (formerly AT&T Gateway Tower) in downtown Seattle, Washington (including payment for tenant improvements and for rights in land), which acquisition has been or may be authorized by separate ordinance, and including reimbursement to the Department of Administrative Services Operating Fund for expenditures related to planning and acquisition.

Section 11. Severability. If any one or more of the provisions of this ordinance shall be declared by any court of competent jurisdiction and of last resort to be contrary to law, then such provision shall be null and void and shall be separable from the remaining provisions in this ordinance and shall in no way affect the validity of the other provisions of this ordinance.

Section 12. Ratification of Prior Acts. Any action taken consistent with the authority and prior to the effective date of this ordinance is ratified, approved and confirmed.

Section 13. Section Headings. The section headings in this ordinance are used for convenience only and shall not constitute a substantive portion of this ordinance.

Section 13. Effective Date of Ordinance. This ordinance shall take effect and be in force thirty (30) days from and after its approval by the Mayor, but if not approved and returned by the Mayor within ten (10) days after presentation, it shall take effect as provided by Municipal Code Section 1.04.020.

Passed by the City Council the day of , 1996, and signed by me in open session in authentication of its passage this day of , 1996.

President of the City Council

Approved by me this day of , 1996.

Norman B. Rice, Mayor

Filed this day of , 1996.

By

City Clerk

(SEAL)