The URL can be used to link to this page

Home My WebLink About097 9850050787.04 0 . JEFFERSON COUNTY, WASHINGTON RESOLUTION NO. 97-98 A RESOLUTION of the Board of County Commissioners of Jefferson County, Washington, relating to contracting indebtedness; providing for the issuance, specifying the maturities, interest rates, terms, and covenants and fixing the form of $2,260,000 par value Limited Tax General Obligation Refunding Bonds, 1998, to provide part of the funds with which to pay the cost of advance refunding the County's outstanding Limited Tax General Obligation Bond, 1991 (Performing Arts Center), Limited Tax General Obligation Bond, 1991 (Community Center), Series A and B, and Limited Tax General Obligation Bonds, 1993, and paying the administrative costs of such refunding and the costs of issuance and sale of such bonds; providing for and authorizing the purchase of certain obligations out of the proceeds of the sale of the bonds herein authorized and for the use and application of the money derived from those investments; authorizing the execution of an agreement with Chase Manhattan Trust Company, National Association of Seattle, Washington, as refunding trustee; providing for the call, payment and redemption of the outstanding bonds to be refunded; providing for bond insurance; and approving the sale and providing for the delivery of the bonds to Seattle -Northwest Securities Corporation of Seattle, Washington. This document prepared by: Foster Pepper & Shefelman PLLC 1111 Third Avenue, Suite 3400 Seattle, Washington 98101 (206) 447-4400 TABLE OF CONTENTS Page Recital........................................................................................................................................ l Section1. Authorization of Bonds........................................................................................................3 Section2. Description of Bonds...........................................................................................................4 Section 3. Registration and Transfer of Bonds.....................................................................................4 Section4. Payment of Bonds................................................................................................................ 5 Section 5. Optional Redemption, Mandatory Redemption and Open Market Purchase of Bonds ..... 6 Section6. Notice of Redemption.......................................................................................................... 7 Section 7. Failure to Redeem Bonds....................................................................................................7 Section8. Pledge of Taxes.................................................................................................................... 7 Section 9. Disposition of Bond Proceeds.............................................................................................7 Section 10. Refunding of the Refunded Bonds....................................................................................7 Section 11. Call for Redemption of the Refunded Bonds....................................................................9 Section 12. County Findings with Respect to Refunding.................................................................10 Section 13. Form and Execution of Bonds.........................................................................................10 Section14. Bond Registrar................................................................................................................. l l Section 15. Preservation of Tax Exemption for Interest on Bonds .................................................... l 1 Section16. Bonds Negotiable.............................................................................................................12 Section 17. Refunding or Defeasance of the Bonds...........................................................................12 Section 18. Approval of Bond Purchase Contract..............................................................................13 Section 19. Preliminary Official Statement Deemed Final................................................................13 Section 20. Undertaking to Provide Continuing Disclosure..............................................................13 Section21. Bond Insurance................................................................................................................16 Section22. Temporary Bond..............................................................................................................18 i 50050787.04 G "VOL JEFFERSON COUNTY, WASHINGTON RESOLUTION NO. 97-98 A RESOLUTION of the Board of County Commissioners of Jefferson County, Washington, relating to contracting indebtedness; providing for the issuance, specifying the maturities, interest rates, terms, and covenants and fixing the form of $2,260,000 par value Limited Tax General Obligation Refunding Bonds, 1998, to provide part of the funds with which to pay the cost of advance refunding the County's outstanding Limited Tax General Obligation Bond, 1991 (Performing Arts Center), Limited Tax General Obligation Bond, 1991 (Community Center), Series A and B, and Limited Tax General Obligation Bonds, 1993, and paying the administrative costs of such refunding and the costs of issuance and sale of such bonds; providing for and authorizing the purchase of certain obligations out of the proceeds of the sale of the bonds herein authorized and for the use and application of the money derived from those investments; authorizing the execution of an agreement with Chase Manhattan Trust Company, National Association of Seattle, Washington, as refunding trustee; providing for the call, payment and redemption of the outstanding bonds to be refunded; providing for bond insurance; and approving the sale and providing for the delivery of the bonds to Seattle -Northwest Securities Corporation of Seattle, Washington. WHEREAS, pursuant to Resolution No. 48-91, the County heretofore issued its $150,000 principal amount Limited Tax General Obligation Bond, 1991 (Performing Arts Center) (the "1991 Bond"), for the purpose of renovating the balloon hangar at Fort Worden for use as a performing arts center, and by that resolution reserved the right to prepay the 1991 Bond on any installment payment date prior to its maturity upon thirty days' written notice to the registered owner; and WHEREAS, there is presently outstanding $111,560.39 principal amount of the 1991 Bond, with principal and interest installment payments of $6,425 each payable on each May 1 and November 1 and bearing interest at the rate of 5.875% per annum (the "1991 Refunded Bond"); and WHEREAS, pursuant to Resolution No. 49-91, the County heretofore issued its $789,000 par value Limited Tax General Obligation Bond, 1991 (Community Center), Series A (the "Series A Bond") and $251,000 Limited Tax General Obligation Bond, 1991 (Community Center), Series B (the "Series B Bond") (collectively, the "Series A and B Bonds"), for the purpose of providing part of the funds required to pay the cost of renovating the community center in the City, and by that resolution reserved the right to prepay the Series A and B Bonds on any installment payment date prior to its maturity upon thirty days' written notice to the registered owner; and WHEREAS, there is presently outstanding $586,853.52 principal amount of the Series A Bond, with principal and interest installment payments of $33,793 each payable on each May 1 and November 1 and bearing interest at the rate of 5.875% per annum (the "Series A Refunded Bond"); and -1- r s50050M.04``4L 24 'ac:{_ 40 GG WHEREAS, there is presently outstanding $186,680.75 principal amount of the Series B Bond, with principal and interest installment payments of $10,751 each payable on each May 1 and November 1 and bearing interest at the rate of 5.875% per annum (the "Series B Refunded Bond"); and WHEREAS, pursuant to Resolution No. 14-93, the County heretofore issued its $2,070,000 par value Limited Tax General Obligation Bonds, 1993 (the "1993 Bonds"), for the purpose of providing funds to pay the cost of constructing projects for handling and disposal of solid waste, including but not limited to closure of the County's existing landfill, the construction of a new transfer station, special waste handling facilities and machinery and equipment, and by that Resolution reserved the right to redeem the 1993 Bonds prior to their maturity on December 1, 2003, at a price of par plus accrued interest to the date fixed for redemption; and WHEREAS, there are presently outstanding $1,205,000 par value of 1993 Bonds maturing on December 1 of each of the years 2004 through 2008, inclusive, and in 2012, and bearing various interest rates from 5.875% to 6.300% (the "1993 Refunded Bonds"); and WHEREAS, after due consideration, it appears to the Board of County Commissioners, that the 1991 Refunded Bond, Series A Refunded Bond, Series B Refunded Bond and 1993 Refunded Bonds (collectively, the "Refunded Bonds") may be refunded by the issuance and sale of the limited tax general obligation refunding bonds authorized herein (the "Bonds") so that a substantial savings will be effected by the difference between the principal and interest cost over the life of the Bonds and the principal and interest cost over the life of the Refunded Bonds but for such refunding, which refunding will be effected by: (a) The issuance of the Bonds and the payment of the costs of the issuance of the Bonds and the costs of the refunding; (b) The call, payment and redemption on May 1, 1999, of all of the then outstanding principal amount of the 1991 Refunded Bond, together with accrued interest thereon; and (c) The call, payment and redemption on May 1, 1999, of all of the then outstanding principal amount of the Series A Refunded Bond, together with accrued interest thereon; and (d) The call, payment and redemption on May 1, 1999, of all of the then outstanding principal amount of the Series B Refunded Bond, together with accrued interest thereon; and (e) The payment of the interest on the 1993 Refunded Bonds when due up to and including December 1, 2003, and the call, payment and redemption on December 1, 2003, of all of the then -outstanding 1993 Refunded Bonds at a price of par; and 50050787.04 i IV WHEREAS, to effect that refunding in the manner that will be most advantageous to the County it is found necessary and advisable that certain Acquired Obligations (hereinafter defined) bearing interest and maturing at such time or times as necessary to accomplish the refunding as aforesaid be purchased out of a portion of the proceeds of the Bonds; and WHEREAS, the MBIA Insurance Corporation of Armonk, New York (the "Bond Insurer"), has made a commitment to issue an insurance policy (the "Municipal Bond Insurance Policy") insuring the payment when due of the principal of and interest on the Bonds as provided therein, and the Board of County Commissioners of the County deems that the purchase of the Municipal Bond Insurance Policy is in the best interest of the County; and WHEREAS, the Board of County Commissioners deems it to be in the best interests of the County to issue and sell the Bonds to pay part of the cost of advance refunding the Refunded Bonds and to pay the administrative costs of such refunding and the costs of issuance and sale of the Bonds; and BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF JEFFERSON COUNTY, WASHINGTON, as follows: Section 1. Authorization of Bonds. The County shall borrow money on the credit of the County and issue its negotiable limited tax general obligation refunding bonds evidencing that indebtedness in the amount of $2,260,000 for general County purposes for the purpose of paying the following: (a) The costs of the issuance of the Bonds and the costs of the refunding; (b) The call, payment and redemption on May 1, 1999, of all of the then outstanding principal amount of the 1991 Refunded Bond, together with accrued interest thereon; and (c) The call, payment and redemption on May 1, 1999, of all of the then outstanding principal amount of the Series A Refunded Bond, together with accrued interest thereon; and (d) The call, payment and redemption on May 1, 1999, of all of the then outstanding principal amount of the Series B Refunded Bond, together with accrued interest thereon; and (e) The payment of the interest on the 1993 Refunded Bonds when due up to and including December 1, 2003, and the call, payment and redemption on December 1, 2003, of all of the then -outstanding 1993 Refunded Bonds at a price of par; (the "Refunding Plan") and to pay the administrative costs of such refunding and the costs of issuing the Bonds (the "costs of issuance.") 50050787.04 The general indebtedness to be incurred shall be within the limit of up to 1'/2% of the value of the taxable property within the County permitted for general municipal purposes without a vote of the qualified voters therein. Section 2. Description of Bonds. The bonds shall be called Limited Tax General Obligation Refunding Bonds, 1998, of the County (the "Bonds"); shall be in the aggregate principal amount of $2,260,000; shall be dated December 1, 1998; shall be in the denomination of $5,000 or any integral multiple thereof within a single maturity; shall be numbered separately in the manner and with any additional designation as the Bond Registrar (collectively, the fiscal agencies of the State of Washington) deems necessary for purposes of identification; shall bear interest (computed on the basis of a 360 -day year of twelve 30 -day months) payable semiannually on each June 1 and December 1, commencing June 1, 1999, to the maturity or earlier redemption of the Bonds; and shall mature on December 1 in years and amounts and bear interest at the rates per annum as follows: Maturity Interest Years Amounts Rates 1999 $ 75,000 4.00% 2000 80,000 4.00 2001 90,000 4.00 2002 90,000 4.00 2003 90,000 4.00 2004 200,000 4.00 2005 205,000 4.00 2006 215,000 4.00 2007 220,000 4.00 2008 235,000 4.10 2009 240,000 4.10 2010 250,000 4.20 2012 270,000 4.40 Section 3. Registration and Transfer of Bonds. The Bonds shall be issued only in registered form as to both principal and interest and shall be recorded on books or records maintained by the Bond Registrar (the "Bond Register"). The Bond Register shall contain the name and mailing address of the owner of each Bond and the principal amount and number of each of the Bonds held by each owner. Bonds surrendered to the Bond Registrar may be exchanged for Bonds in any authorized denomination of an equal aggregate principal amount and of the same interest rate and maturity. Bonds may be transferred only if endorsed in the manner provided thereon and surrendered to the Bond Registrar. Any exchange or transfer shall be without cost to the owner or transferee. The Bond Registrar shall not be obligated to exchange or transfer any Bond during the 15 days preceding any principal payment or redemption date. The Bonds initially shall be registered in the name of CEDE & CO., as the nominee of The Depository Trust Company, New York, New York ("DTC"). The Bonds so registered shall -4- 50OM7a7.oa 'VOL 24 r°ar;•'30G be held in fully immobilized form by DTC as depository in accordance with the provisions of a Blanket Issuer Letter of Representations with DTC substantially in the form on file with the Secretary to the Board of County Commissioners of the County and by this reference made a part hereof (the "Letter of Representations"). To induce DTC to accept the Bonds as eligible for deposit at DTC, the County approves the Letter of Representations. The County Treasurer is authorized and directed to execute and deliver the Letter of Representations, on behalf of the County, to DTC on or before the date of delivery of the Bonds to the purchaser thereof and the payment therefor, with such changes as the County of the County deems to be in the best interests of the County, and her execution and delivery of the Letter of Representations shall evidence irrevocably the approval of the Letter of Representations by the County. Neither the County nor the Bond Registrar shall have any responsibility or obligation to DTC participants or the persons for whom they act as nominees with respect to the Bonds regarding accuracy of any records maintained by DTC or DTC participants of any amount in respect of principal of or interest on the Bonds, or any notice which is permitted or required to be given to registered owners hereunder (except such notice as is required to be given by the Bond Registrar to DTC). For so long as any Bonds are held in fully immobilized form, DTC or its successor depository shall be deemed to be the registered owner for all purposes hereunder and all references to registered owners, bondowners, bondholders, or the like shall mean DTC or its nominees and shall not mean the owners of any beneficial interests in the Bonds. Registered ownership of such Bonds, or any portions thereof, may not thereafter be transferred except: (i) to any successor of DTC or its nominee, if that successor shall be qualified under any applicable laws to provide the services proposed to be provided by it; (ii) to any substitute depository appointed by the County or such substitute depository's successor; or (iii) to any person if the Bonds are no longer held in immobilized form. Upon the resignation of DTC or its successor (or any substitute depository or its successor) from its functions as depository, or a determination by the County that it no longer wishes to continue the system of book entry transfers through DTC or its successor (or any substitute depository or its successor), the County may appoint a substitute depository. Any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it. If (i) DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained, or (ii) the County determines that the Bonds are to be in certificated form, the ownership of Bonds may be transferred to any person as provided herein and the Bonds no longer shall be held in fully immobilized form. Section 4. 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 Bond Registrar mailed or by wire transfer only if so requested in writing on the interest payment date to the registered owners at the addresses appearing on the Bond Register on the 15th day of the month preceding the interest payment date. Principal of the Bonds shall be payable on presentation and surrender of the Bonds by the registered owners at either of the principal offices of the Bond Registrar at the option of the owners. Notwithstanding the foregoing, as long as the Bonds are registered in the name of DTC or its nominee, payment of -5- 50050787.04 VOL 13U principal of and interest on the Bonds shall be made in the manner set forth in the Letter of Representations. Section 5. Optional Redemption, Mandatory Redemption and Open Market Purchase of Bonds. Bonds maturing in the years 1999 through 2008, inclusive, shall be issued without the right or option of the County to redeem those Bonds prior to their stated maturity dates. The County reserves the right and option to redeem Bonds maturing on or after December 1, 2009, prior to their stated maturity dates on or after December 1, 2008, as a whole or in part at any time, within one or more maturities selected by the County (and by lot within a maturity in such manner as the Bond Registrar shall determine), at par plus accrued interest to the date fixed for redemption. Bonds maturing in 2012 are Term Bonds and, if not redeemed under the optional redemption provisions set forth above or purchased in the open market under the provisions set forth below, shall be called for redemption by lot (in such manner as the Bond Registrar shall determine) at par plus accrued interest on December 1 in years and amounts as follows: Mandatory Mandatory Redemption Redemption Years Amounts 2011 $165,000 2012 (maturity) 105,000 If the County shall redeem Term Bonds under the optional redemption provisions set forth above 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 actual redemption or purchase prices) shall be credited against one or more scheduled mandatory redemption amounts for those Term Bonds (as allocated by the County) beginning not earlier than 60 days after the date of the optional redemption or purchase, and the County shall promptly notify the Bond Registrar in writing of the manner in which the credit for the Term Bonds so redeemed or purchased has been allocated. Portions of the principal amount of any Bond, in installments of $5,000 or any integral multiple thereof, may be redeemed. If 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 Bond 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 interest rate and maturity in any of the denominations authorized by this resolution in the aggregate principal amount remaining unredeemed. The County further 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 County plus accrued interest to the date of purchase. All Bonds purchased or redeemed under this section shall be cancelled. Notwithstanding the foregoing, for so long as the Bonds are registered in the name of Cede & Co., as nominee of DTC, selection of Bonds for redemption shall be in accordance with the Letter of Representations (as it may be changed). -6- 50050787.04 VOL 7. fr�c�; Section 6. Notice of Redemption. The County 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 Bond 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 at their offices in New York, New York, or their successors, to Seattle -Northwest Securities Corporation, at its principal office in Seattle, Washington, or its successor, to the Bond Insurer at its principal office in Armonk, New York, or its successor, and to such other persons, and with such additional information as the County shall determine, but these additional mailings shall not be a condition precedent to the redemption of Bonds. Notwithstanding the foregoing, for so long as the Bonds are registered in the name of Cede & Co., as nominee of DTC, notice of redemption shall be given in accordance with the Letter of Representations (as it may be changed). Section 7. Failure to Redeem Bonds. If any Bond is not redeemed when properly presented at its maturity or call date, the County 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 redemption fund of the County 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 8. Pledge of Taxes. For as long as any of the Bonds are outstanding, the County irrevocably pledges to include in its budget and levy taxes annually within the constitutional and statutory tax limitations provided by law without a vote of the electors of the County on all of the taxable property within the County in an amount sufficient, together with other money legally available and to be used therefor, to pay when due the principal of and interest on the Bonds, and the full faith, credit and resources of the County are pledged irrevocably for the annual levy and collection of those taxes and the prompt payment of that principal and interest. Section 9. Disposition of Bond Proceeds. There is created and established in the office of the County Treasurer a special fund designated as the Limited Tax General Obligation Bond Fund, 1998 (the "Bond Fund"). Accrued interest on the Bonds, if any, received from the sale and delivery of the Bonds shall be paid into the Bond Fund. All taxes collected for and allocated to the payment of the principal of and interest on the Bonds shall be deposited in the Bond Fund. All of the principal proceeds received from the sale and delivery of the Bonds shall be delivered to the Refunding Trustee in accordance with Section 10 and used to carry out the Refunding Plan. Section 10. Refunding of the Refunded Bonds. (a) Appointment of Refunding Trustee. Chase Manhattan Trust Company, National Association of Seattle, Washington, is appointed Refunding Trustee. -7- 50050787.04 CYA VOL072 I_ ":�r•�fs� ,� (b) Use of Bond Proceeds; Acquisition of Acquired Obligations. All of the proceeds of the sale of the Bonds, exclusive of the accrued interest thereon which shall be paid into the Bond Fund, shall be deposited immediately upon the receipt thereof with the Refunding Trustee and used to discharge the obligations of the County relating to the 1991 Refunded Bond, Series A Refunded Bond, Series B Refunded Bond and 1993 Refunded Bonds (collectively, the "Refunded Bonds") under Resolutions No. 48-91, 49-91 and 14-93 (collectively, the "Refunded Bonds Resolutions") by providing for the payment of the amounts required to be paid by the Refunding Plan. To the extent practicable, such obligations shall be discharged fully by the Refunding Trustee's simultaneous purchase of United States Treasury Certificates of Indebtedness and/or Notes --State and Local Government Series or other direct, noncallable obligations of the United States of America (the "Acquired Obligations"), bearing such interest and maturing as to principal and interest in such amounts and at such times so as to provide, together with a beginning cash balance, if necessary, for the payment of the amount required to be paid by the Refunding Plan. The Acquired Obligations are listed and more particularly described in Schedule A attached to the Refunding Trust Agreement between the County and the Refunding Trustee, but are subject to substitution as set forth below. Any Bond proceeds or other money deposited with the Refunding Trustee not needed to purchase the Acquired Obligations and provide a beginning cash balance, if any, and pay the costs of issuance of the Bonds shall be returned to the County at the time of delivery of the Bonds to the initial purchaser thereof and deposited in the Bond Fund to pay interest on the Bonds on the first interest payment date. (c) Substitution of Acquired Obligations. Prior to the purchase of any Acquired Obligations by the Refunding Trustee, the County reserves the right to substitute other direct, noncallable obligations of the United States of America ("Substitute Obligations") for any of the Acquired Obligations and to use any savings created thereby for any lawful County purpose if, (a) in the opinion of Foster Pepper & Shefelman PLLC, the County's bond counsel, the interest on the Bonds and the Refunded Bonds will remain excluded from gross income for federal income tax purposes under Sections 103, 148, and 149(d) of the Code, and (b) such substitution shall not impair the timely payment of the amounts required to be paid by the Refunding Plan, as verified by a nationally recognized independent certified public accounting firm. After the purchase of the Acquired Obligations by the Refunding Trustee, the County reserves the right to substitute therefor cash or Substitute Obligations subject to the conditions that such money or securities held by the Refunding Trustee shall be sufficient to carry out the Refunding Plan, that such substitution will not cause the Bonds and the Refunded Bonds to be arbitrage bonds within the meaning of Section 148 of the Code and regulations thereunder in effect on the date of such substitution and applicable to obligations issued on the issue date of the Bonds, and that the County obtain, at its expense: (1) a verification by a nationally recognized independent certified public accounting firm acceptable to the Refunding Trustee confirming that the payments of principal of and interest on the substitute securities, if paid when due, and any other money held by the Refunding Trustee will be sufficient to carry out the Refunding Plan; and (2) an opinion from Foster Pepper & Shefelman PLLC, bond counsel to the County, its successor, or other nationally recognized bond counsel to the County, to the effect that the disposition and substitution or purchase of such securities, under the statutes, rules, and regulations then in force and applicable to the Bonds, will not cause the interest on the Bonds or the Refunded Bonds to be included in gross income for federal income tax purposes and that -8- sooso7a7.oa VOL 24 =73 such disposition and substitution or purchase is in compliance with the statutes and regulations applicable to the Bonds. Any surplus money resulting from the sale, transfer, other disposition, or redemption of the Acquired Obligations and the substitutions therefor shall be released from the trust estate and transferred to the County to be used for any lawful County purpose. (d) Administration of Refunding Plan. The Refunding Trustee is authorized and directed to purchase the Acquired Obligations (or substitute obligations) and to make the payments required to be made by the Refunding Plan from the Acquired Obligations (or substitute obligations) and money deposited with the Refunding Trustee pursuant to this resolution. All Acquired Obligations (or substitute obligations) and the money deposited with the Refunding Trustee and any income therefrom shall be held irrevocably, invested and applied in accordance with the provisions of the Refunded Bonds Resolutions, this resolution, chapter 39.53 RCW and other applicable statutes of the State of Washington and the Refunding Trust Agreement. All necessary and proper fees, compensation, and expenses of the Refunding Trustee for the Bonds and all other costs incidental to the setting up of the escrow to accomplish the refunding of the Refunded Bonds and costs related to the issuance and delivery of the Bonds, including bond printing, verification fees, bond insurance premium, bond counsel's fees, and other related expenses, shall be paid out of the proceeds of the Bonds. (e) Authorization for Refunding Trust Agreement. To carry out the Refunding Plan provided for by this resolution, the Chairman of the Board of County Commissioners or the County Treasurer is authorized and directed to execute and deliver to the Refunding Trustee a Refunding Trust Agreement substantially in the form on file with the Clerk of the Board of County Commissioners and by this reference made a part hereof setting forth the duties, obligations and responsibilities of the Refunding Trustee in connection with the payment, redemption, and retirement of the Refunded Bonds as provided herein and stating that the provisions for payment of the fees, compensation, and expenses of such Refunding Trustee set forth therein are satisfactory to it. Prior to executing the Refunding Trust Agreement, the Chairman of the Board of County Commissioners or the County Treasurer is authorized to make such changes therein that do not change the substance and purpose thereof or that assure that the escrow provided therein and the Bonds are in compliance with the requirements of federal law governing the exclusion of interest on the Bonds from gross income for federal income tax purposes. Section 11. Call for Redemption of the Refunded Bonds. The County calls the following for redemption: (a) On May 1, 1999, all of the principal amount of the 1991 Refunded Bond plus accrued interest; (b) On May 1, 1999, all of the principal amount of the Series A Refunded Bond plus accrued interest; (c) On May 1, 1999, all of the principal amount of the Series B Refunded Bond plus accrued interest; and (d) On December 1, 2003, all of the Refunded Bonds at par plus accrued interest. VOL -9- yy--yy``■■��,, 50050787.04 VL 24 Such calls for redemption shall be irrevocable after the delivery of the Bonds to the initial purchaser thereof. The respective dates on which the Refunded Bonds are herein called for redemption are the first dates on which those bonds may be called. The proper County officials are authorized and directed to give or cause to be given such notices as required, at the times and in the manner required, pursuant to the Refunded Bonds Resolutions in order to effect the redemption prior to their maturity of the Refunded Bonds. Section 12. County Findings with Respect to Refunding. The Board of County Commissioners of the County finds and determines that the issuance and sale of the Bonds at this time will effect a savings to the County and is in the best interest of the County and its taxpayers and in the public interest. In making such finding and determination, the Board of County Commissioners has given consideration to the fixed maturities of the Bonds and the Refunded Bonds, the costs of issuance of the Bonds and the known earned income from the investment of the proceeds of the issuance and sale of the Bonds pending payment and redemption of the Refunded Bonds. The Board of County Commissioners further finds and determines that the money to be deposited with the Refunding Trustee for the Refunded Bonds in accordance with Section 10 of this resolution will discharge and satisfy the obligations of the County under the Refunded Bonds Resolutions with respect to the Refunded Bonds, and the pledges, charges, trusts, covenants, and agreements of the County therein made or provided for as to the Refunded Bonds, and that the Refunded Bonds shall no longer be deemed to be outstanding under such resolution immediately upon the deposit of such money with the Refunding Trustee. Section 13. Form and Execution of Bonds.The Bonds shall be printed or lithographed on good bond paper in a form consistent with the provisions of this resolution and state law, shall be signed in the corporate name of the County by the Chairman and Clerk of the Board of County Commissioners of the County, either or both of whose signatures may be manual or in facsimile, and the seal of the County or a facsimile reproduction thereof shall be impressed or printed thereon. Only Bonds bearing a Certificate of Authentication in the following form, manually signed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this resolution: -10- 50050787.04 .VOL 2 CERTIFICATE OF AUTHENTICATION This Bond is one of the fully registered Jefferson County, Washington, Limited Tax General Obligation Refunding Bonds, 1998, described in the Bond Resolution. WASHINGTON STATE FISCAL AGENCY Bond Registrar LIM Authorized Signer The authorized signing of a Certificate of Authentication shall be conclusive evidence that the Bond so authenticated has been duly executed, authenticated, and delivered and is entitled to the benefits of this resolution. If any officer whose facsimile signature appears on the Bonds ceases to be an officer of the County authorized to sign bonds before the Bonds bearing his or her facsimile signature are authenticated or delivered by the Bond Registrar or issued by the County, those Bonds nevertheless may be authenticated, issued, and delivered and, when authenticated, issued, and delivered, shall be as binding on the County as though that person had continued to be an officer of the County authorized to sign bonds. Any Bond also may be signed on behalf of the County by any person who, on the actual date of signing of the Bond, is an officer of the County authorized to sign bonds, although he or she did not hold the required office on the date of issuance of the Bonds. Section 14. Bond Registrar. The Bond Registrar shall keep, or cause to be kept, at its principal corporate trust office, sufficient books for the registration and transfer of the Bonds which shall be open to inspection by the County at all times. The Bond Registrar is authorized, on behalf of the County, to authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of the Bonds and this resolution, to serve as the County's paying agent for the Bonds and to carry out all of the Bond Registrar's powers and duties under this resolution and County Resolution No. 47-91 establishing a system of registration for the County's bonds and obligations. The Bond Registrar shall be responsible for its representations contained in the Bond Registrar's Certificate of Authentication on the Bonds. The Bond Registrar may become the owner of Bonds with the same rights it would have if it were not the Bond Registrar and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as members of, or in any other capacity with respect to, any committee formed to protect the rights of Bond owners. Section 15. Preservation of Tax Exemption for Interest on Bonds. The County covenants that it will take all actions necessary to prevent interest on the Bonds from being included in gross income for federal income tax purposes, and it will neither take any action nor make or permit any use of proceeds of the Bonds or other funds of the County treated as proceeds of the Bonds at any time during the term of the Bonds which will cause interest on the Bonds to be -11- 50050787.04 included in gross income for federal income tax purposes. The County 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 13. Small Governmental Issuer Arbitrage Rebate Exception and Designation of Bonds as "Qualified Tax -Exempt Obligations." The County finds and declares that (a) it is a duly organized and existing governmental unit of the State of Washington and has general taxing power; (b) no Bond which is part of this issue of Bonds is a "private activity bond" within the meaning of Section 141 of the United States Internal Revenue Code of 1986, as amended (the "Code"); (c) at least 95% of the net proceeds of the Bonds will be used for local governmental activities of the County (or of a governmental unit the jurisdiction of which is entirely within the jurisdiction of the County); (d) the aggregate face amount of all tax-exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) issued by the County and all entities subordinate to the County (including any entity which the County controls, which derives its authority to issue tax-exempt obligations from the County or which issues tax-exempt obligations on behalf of the County) during the calendar year in which the Bonds are issued is not reasonably expected to exceed $5,000,000; and (e) the amount of tax-exempt obligations, including the Bonds, designated by the County as "qualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the Code during the calendar year in which the Bonds are issued does not exceed $10,000,000. The County therefore certifies that the Bonds are eligible for the arbitrage rebate exception under Section 148(f)(4)(D) of the Code and designates the Bonds as "qualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the Code. Section 16. Bonds Negotiable. The Bonds shall be negotiable instruments to the extent provided by RCW 62A.8-102 and 62A.8-105. Section 17. Refunding or Defeasance of the Bonds. The County may issue refunding bonds pursuant to the laws of the State of Washington or use money available from any other lawful source to pay when due the principal of and interest on the Bonds, or any portion thereof included in a refunding or defeasance plan, and to redeem and retire, refund or defease all such then -outstanding Bonds (hereinafter collectively called the "defeased Bonds") and to pay the costs of the refunding or defeasance. If money and/or direct obligations of the United States of America maturing at a time or times and bearing interest in amounts (together with money, if necessary) sufficient to redeem and retire, refund or defease the defeased Bonds in accordance with their terms are set aside in a special trust fund irrevocably pledged to that redemption, retirement, or defeasance of defeased Bonds (hereinafter called the "trust account"), then all right and interest of the owners of the defeased Bonds in the covenants of this resolution and in the funds and accounts obligated to the payment of the defeased Bonds shall cease and become void. The owners of defeased Bonds shall have the right to receive payment of the principal of and interest on the defeased Bonds from the trust account. The County shall include in the refunding or defeasance plan such provisions as the County deems necessary for the random selection of any defeased Bonds that constitute less than all of a particular maturity of the Bonds, for notice of the defeasance to be given to the owners of the defeased Bonds and to such other persons as the County shall determine, and for any required replacement of Bond certificates for defeased Bonds. The defeased Bonds shall be deemed no longer outstanding, and the County may apply any money in any other fund or account established for the payment or redemption of the defeased Bonds to any lawful purposes as it shall determine. -12- 50050787.04 VOL 24 f�AG. c o}; iI Notwithstanding anything in this section to the contrary, if the principal of and/or interest due on the Bonds is paid by the Bond Insurer pursuant to the Municipal Bond Insurance Policy, the Bonds shall be treated as remaining outstanding for all purposes and shall not be considered paid the County, and the covenants, agreements and other obligations of the County to the registered owners of the Bonds shall continue to exist and run to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogated to the rights of the registered owners. If the Bonds are registered in the name of DTC or its nominee, notice of any defeasance of Bonds shall be given to DTC in the manner prescribed in the Letter of Representations for notices of redemption of Bonds. Section 18. Approval of Bond Purchase Contract. Seattle -Northwest Securities Corporation of Seattle, Washington, has presented a purchase contract (the "Bond Purchase Contract") to the County offering to purchase the Bonds under the terms and conditions provided in the Bond Purchase Contract, which written Bond Purchase Contract is on file with the Secretary to the Board of County Commissioners and is incorporated herein by this reference. The Board of County Commissioners finds that entering into the Bond Purchase Contract is in the County's best interest and therefore accepts the offer contained therein and authorizes its execution by County officials. The Bonds will be printed at County expense and will be delivered to the purchaser in accordance with the Bond Purchase Contract, with the approving legal opinion of Foster Pepper & Shefelman PLLC, municipal bond counsel of Seattle, Washington, regarding the Bonds printed on each Bond. Bond counsel shall not be required to review and shall express no opinion concerning the completeness or accuracy of any official statement, offering circular or other sales or disclosure material issued or used in connection with the Bonds, and bond counsel's opinion shall so state. The proper County officials are authorized and directed to do everything necessary for the prompt delivery of the Bonds to the purchaser and for the proper application and use of the proceeds of the sale thereof. Section 19. Preliminary Official Statement Deemed Final. The Board of County Commissioners has been provided with copies of a preliminary official statement dated October 27, 1998 (the "Preliminary Official Statement"), prepared in connection with the sale of the Bonds. For the sole purpose of the Bond purchaser's compliance with Securities and Exchange Commission Rule 15c2 -12(b)(1), the County "deems final" that Preliminary Official Statement as of its date, except for the omission of information as to offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, maturity dates, options of redemption, delivery dates, ratings, and other terms of the Bonds dependent on such matters. Section 20. Undertaking to Provide Continuing Disclosure. To meet the conditions of paragraph (d)(2) of United States Securities and Exchange Commission ("SEC") Rule 15c2-12 (the "Rule") as required to qualify for the limited exemption from paragraph (b)(5) of the Rule, as applicable to a participating underwriter for the Bonds, the County makes the following undertaking (the "Undertaking") for the benefit of holders of the Bonds: -13- 50050787.04 (a) Undertaking to Provide Annual Financial Information and Notice of Material Events. The County undertakes to provide or cause to be provided, either directly or through a designated agent: (i) To any person upon request, or annually to a state information depository, if any, established in the state of Washington (the "SID"), annual financial information and operating data of the type included in the final official statement for the Bonds and described in subsection (b) of this section ("annual financial information") that is customarily prepared by the County and is otherwise publicly available; and (ii) To each nationally recognized municipal securities information repository designated by the SEC in accordance with the Rule ("NRMSIR") or the Municipal Securities Rulemaking Board ("MSRB"), and to the SID, timely notice of the occurrence of any of the following events with respect to the Bonds, if material: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax-exempt status of the Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond calls (other than scheduled mandatory redemptions of Term Bonds); (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds; and (11) rating changes. (b) Type of Annual Financial Information Undertaken to be Provided. The annual financial information that the County undertakes to provide: (i) Shall consist of (1) annual financial statements prepared (except as noted in the financial statements) in accordance with applicable generally accepted accounting principles, as such principles may be changed from time to time, which statements shall not be audited, except, however, that if and when audited financial statements are otherwise prepared and available to the County they will be provided; (2) a statement of authorized, issued and outstanding general obligation debt of the County; (3) the assessed value of the property within the County subject to ad valorem taxation; and (4) ad valorem tax levy rates and amounts and percentage of taxes collected. (ii) Shall be available from the Treasurer of the County, whose current address and telephone number are identified in the final official statement for the Bonds. (c) Amendment of Undertaking. The Undertaking is subject to amendment after the primary offering of the Bonds without the consent of any -14- 50050787.04 VOL 24 0179 holder of any Bond, or of any broker, dealer, municipal securities dealer, participating underwriter, rating agency, NRMSIR, the SID or the MSRB, under the circumstances and in the manner permitted by the Rule. The County will give notice to each NRMSIR or the MSRB, and the SID, of the substance (or provide a copy) of any amendment to the Undertaking and a brief statement of the reasons for the amendment. If the amendment changes the type of annual financial information to be provided, the annual financial information containing the amended financial information will include a narrative explanation of the effect of that change on the type of information to be provided. (d) Beneficiaries. The Undertaking evidenced by this section shall inure to the benefit of the County and any holder of Bonds, and shall not inure to the benefit of or create any rights in any other person. (e) Termination of Undertaking. The County's obligations under this Undertaking shall terminate upon the legal defeasance of all of the Bonds. In addition, the County's obligations under this Undertaking shall terminate if those provisions of the Rule which require the County to comply with this Undertaking become legally inapplicable in respect of the Bonds for any reason, as confirmed by an opinion of nationally recognized bond counsel or other counsel familiar with federal securities laws delivered to the County, and the County provides timely notice of such termination to each NRMSIR or the MSRB and the SID. (f) Remedy for Failure to Comply with Undertaking. As soon as practicable after the County learns of any failure to comply with the Undertaking, the County will proceed with due diligence to cause such noncompliance to be corrected. No failure by the County or other obligated person to comply with the Undertaking shall constitute a default in respect of the Bonds. The sole remedy of any holder of a Bond shall be to take such actions as that holder deems necessary, including seeking an order of specific performance from an appropriate court, to compel the County or other obligated person to comply with the Undertaking. (g) Designation of Official Responsible to Administer Undertaking. The Treasurer of the County (or such other officer of the County who may in the future perform the duties of the Treasurer) or his or her designee is authorized and directed in his or her discretion to take such further actions as may be necessary, appropriate or convenient to carry out the Undertaking of the County in respect of the Bonds set forth in this section and in accordance with the Rule, including, without limitation, the following actions: (i) Preparing, filing and/or making available the annual financial information undertaken to be provided; (ii) Determining whether any event specified in subsection (a) of this section has occurred, assessing its materiality with respect to the Bonds, and, if material, preparing and disseminating notice of its occurrence; -15- 5ooso,87.a4 : VOL 24 3080 (iii) Determining whether any person other than the County is an "obligated person" within the meaning of the Rule with respect to the Bonds, and obtaining from such person an undertaking to provide any annual financial information and notice of material events for that person in accordance with the Rule; (iv) Determining and monitoring the aggregate amount of outstanding municipal securities of the County and of any other obligated person for purposes of the qualification of the County and any other obligated person for the limited exemption from paragraph (b)(5) of the Rule; (v) Selecting, engaging and compensating designated agents and consultants, including but not limited to financial advisors and legal counsel, to assist and advise the County in carrying out the Undertaking; and (vi) Effecting any necessary amendment of the Undertaking. Section 21. Bond Insurance. The Board of County Commissioners finds that it is in the County's best interest to purchase, and that a savings will result from purchasing, the Municipal Bond Insurance Policy for the Bonds. The County shall purchase from the Bond Insurer the Municipal Bond Insurance Policy insuring the prompt payment of the principal of and interest on the Bonds and agrees to the conditions for obtaining that policy, including the payment of the premium therefor and the following provisions entitled "Payments under the Policy" required by the Bond Insurer to be included in this resolution: "A. In the event that, on the second Business Day, and again on the Business Day, prior to the payment date on the Obligations, the Paying Agent [the Bond Registrar] has not received sufficient moneys to pay all principal of and interest on the Obligations due on the second following or following, as the case may be, Business Day, the Paying Agent shall immediately notify the Insurer or its designee on the same Business Day by telephone or telegraph, confirmed in writing by registered or certified mail, of the amount of the deficiency. `B. If the deficiency is made up in whole or in part prior to or on the payment date, the Paying Agent shall so notify the Insurer or its designee. "C. In addition, if the Paying Agent has notice that any Bondholder has been required to disgorge payments of principal or interest on the Obligation to a trustee in Bankruptcy or creditors or others pursuant to a final judgment by a court of -16- competent jurisdiction that such payment constitutes a voidable preference to such Bondholder within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify the Insurer or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. "D. The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Holders of the Obligations as follows: "1. If and to the extent there is a deficiency in amounts required to pay interest on the Obligations, the Paying Agent shall (a) execute and deliver to State Street Bank and Trust Company, N.A., or its successors under the Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing the Insurer as agent for such Holders in any legal proceeding related to the payment of such interest and an assignment to the Insurer of the claims for interest to which such deficiency relates and which are paid by the Insurer, (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (c) disburse the same to such respective Holders; and "2. If and to the extent of a deficiency in amounts required to pay principal of the Obligations, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing the Insurer as agent for such Holder in any legal proceeding relating to the payment of such principal and an assignment to the Insurer of any of the Obligation surrendered to the Insurance Paying agent of so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the Policy payment therefor from the Insurance Paying Agent, and (c) disburse the same to such Holders. "E. Payments with respect to claims for interest on and principal of Obligations disbursed by the Paying Agent from proceeds of the Policy shall not be considered to discharge the obligation of the Issuer with respect to such Obligations, and the Insurer shall become the owner of such unpaid Obligations and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise. "F. Irrespective of whether any such assignment is executed and delivered, the Issuer and the Paying Agent hereby agree for the benefit of the Insurer that: -17- 50050787.04 .VOL 24 w,r 082 "1. They recognize that to the extent the Insurer makes payments, directly or indirectly (as by paying through the Paying Agent), on account of principal of or interest on the Obligations, the Insurer will be subrogated to the rights of such Holders to receive the amount of such principal and interest from the Issuer, with interest thereon as provided and solely from the sources stated in this Indenture and the Obligations; and "2. They will accordingly pay to the Insurer the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the Policy, which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in this Indenture and the Obligations, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Obligations to Holders, and will otherwise treat the Insurer as the owner of such rights to the amount of such principal and interest. "G. In connection with the issuance of additional Obligations, the Issuer shall deliver to the Insurer a copy of the disclosure document, if any, circulated with respect to such additional Obligations. "H. Copies of any amendments made to the documents executed in connection with the issuance of the Obligations which are consented to by the Insurer shall be sent to Standard & Poor's Corporation. "I. The Insurer shall receive notice of the resignation or removal of the Paying Agent and the appointment of a successor thereto. " J. The Insurer shall receive copies of all notices required to be delivered to Bondholders and, on an annual basis, copies of the Issuer's audited financial statements and Annual Budget. "Notices: Any notice that is required to be given to a holder of the Obligation or to the Paying Agent pursuant to the Indenture shall also be provided to the Insurer. All notices required to be given to the Insurer under the Indenture shall be in writing and shall be sent by registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504 Attention: Surveillance." Section 22. Temporary Bond. Pending the printing, execution and delivery to the purchaser of definitive Bonds, the County may cause to be executed and delivered to the purchaser a single temporary Bond in the total principal amount of the Bonds. The temporary Bond shall bear the same date of issuance, interest rates, principal payment dates, and terms and covenants as the definitive Bonds, shall be issued as a fully registered Bond in the name of the purchaser, and otherwise shall be in a form acceptable to the purchaser. The temporary Bond -18- 50050787.04 YoL 24 wk);- **1083 w shall be exchanged for definitive Bonds as soon as they are printed, executed and available for delivery. ADOPTED by the Board of County Commissioners of Jefferson County, Washington, at a regular open public meeting thereof this 9th day of November, 1998. BOARD OF COUNTY CONMUSSIONERS JEFFERSON COUNTY, WASHINGTON ATTEST: Clerk of the Board of County Commissi n -19- sooso7azoa VOL 24 frif,� ` I, LORNA DELANEY, Clerk of the Board of County Commissioners of Jefferson County, Washington, certify that the attached copy of Resolution No, Y!�— 579/ is a true and correct copy of the original resolution adopted on November 9, 1998, as that resolution appears on the Minute Book of the County. DATED this � day of November, 1998. c2o��a - L J�12A&94 - LORNA DELANEY, Clerk of the Bo of County Commissioners 50050787.04 VOL 24 Fare 'noss FOSTER PEPPER & SHEFELMAN PLLC A T T O R N E Y S A T L A W Mi) Direct Phone (:06) 447-8968 Direct Facsimile November 9, 1998 ('_06) 749-zu:s E -.Nail VIA HAND DELIVERY VoorL(a-_foster.com Hon. Judi Morris County Treasurer Jefferson County 1820 Jefferson Street Port Townsend, WA 98368 Re: Jefferson County, Washington $2,260,000 Limited Tax General Obligation Refunding Bonds, 1998 ..It THIRCi Dear Judi: A% `: EVl E te I am pleased to present the enclosed resolution (the "Bond Resolution") in =EArTLE % a> h „�3t o n final form for consideration and action by the Board of County Commissioners at its a S 10 r -; _ 9 y meeting today. A blacklined copy of the Bond Resolution also is enclosed showing the changes made since our distribution of October 26. -21 e -p h o 11 e : = 6 4 + - - ; , 0 0 If the Bond Resolution is adopted, return four certified copies, together .-..csinrile - -00 please with certified excerpts of the minutes of the Commissioners meeting reflecting its .';- bs;t�. r e , ; : R . C O„ adoption, when available. I also have enclosed a near final form of the Refunding Trust Agreement for Ms. Delaney to keep on file as described in Section 10(e) of the Bond Resolution. The final version of this Agreement for signature will follow with other documents we will furnish in preparation for the closing. Also provided for your signature are four copies of the Blanket Issuer Letter AN C» OR A of Representations, all copies of which are to be signed and returned to me at your , a> k a earliest convenience so that we may forward them to the Depository Trust Company 3: I. L E V U E in New York prior to closing. Authority for you to sign the document is provided in a,hi„gt,,, Section 3 of the Bond Resolution. PO RTLAN D I would also appreciate the Chairman of the Board of County Commissioners °.egg" and Clerk of the Board of County Commissioners, each signing with their usual :EATTLE signatures on a blank sheet of paper three times, so that we may prepare the bonds 5 h i to for delivery to The Bank of New York on final, prior to closing. 50053353.01 VOL 24 FSG, ��$� Hon. Judi Morris November 2, 1998 Page 2 It is my pleasure to attend the meeting today and present the Bond Resolution for consideration and action. Seattle -Northwest Securities Corporation soon will distribute a closing memorandum setting forth the terms of settlement. When we receive that memo the usual closing papers will be prepared and forwarded to you with instructions for their execution. If you have questions or believe we might be able to assist, please call. If I am unavailable, please ask for Tracy Becht, a legal assistant who is _familiar with this financing. With thanks for your assistance, Sincerely, FOSTER PEPPER & SHEFELMAN PLLC i"t Lee Voorhees Enclosures cc: Lorna Delaney Jean Baker Peter Cunningham Scott Madden Roy Davis 50053353.01 voL 2.4 ,F :r 3087 Jefferson County Limited Tax General Obligation Refunding Bonds, 1998 Bond Sale Results November 9, 1998 V,0L 24 f C ao8s Jefferson County Jefferson County November 9, 1998 Limited Tax General Obligation Refunding Bonds, 1998 Bond Sale Results Bond Sale Goals Achieve net savings with a present value of at least 5% of the principal amount of the refunded bonds SEATTLE -NORTHWEST VOL 24 SECURITIES CORPORATION J�ffson County November 9, 1998 Jefferson County Limited Tax General Obligation Refunding Bonds, 1998 Bond Market Conditions Municipal bond interest rates have fallen in response to: • global economic concerns • recent Federal Reserve activity 5.75 5.50 Rates 5.25 5.00 4.75 21 -Aug -97 16 -Oct -97 11 -Dec -97 5 -Feb -98 Weekly Bond Buyer Index General Obligation Bond Interest Rate Trends Rates are still near their historic lows. 2 -Apr -98 28 -May -98 23 -Jul -98 17 -Sep -99 25 -Year History Bond Buyer Index General Obligation Bond Interest Rate Trends 14.00- 13.00 - 12.00 - 11.00 - 10.00 - Rates 9.00 8.00 - nr 7.00 - 6.00 _ J1C 5.00 4.00 to Q0 on C6 Q5 Go Q0 rA Q0 QO C4 C4 6. r4 cw QO QO UD 6. Q� Cw Q0 6. QO Q0 Q� QO Q) SEATTLE- NORTHWEST VOL 24 Fvz Itelogo SECURITIES CORPORATION Jefferson County Jefferson County November 9 , 1998 Limited Tax General Obligation Refunding Bonds, 1998 Summary of Refunding Results Bonds to be Refunded Solid Waste Facilities Performing Arts Center Community Center Series A Community Center Series B Dated: February 1, 1993 May 30, 1991 May 30, 1991 May 30, 1991 Principal Amount: $2,070,000 $150,000 $789,000 $251,000 Bonds to be Refunded $1,205,000 $111,675 $587,455 $186,872 Maturities: 12/1/2004- 12/1/2012 11/1/99- 5/1/2011 11/1/99- 5/1/2011 11/1/99- 5/1/2011 Average Coupon: 6.217% 5.875% 5.875% 5.875% Call Date: December 1,2003 May 1, 1999 May 1, 1999 May 1, 1999 Refunding Results Par amount of old bonds Average coupon of old bonds New Bonds Amount: True Interest Cost: Savings Pattern Total Estimated Net Savings Present Value of Net Savings PV savings as % of old Bonds $2,091,002 6.10337% $ 2,260,000 4.3258% Weighted towards later years $190,115 $ 137,270 6.565% ±`~ SEATTLE -NORTHWEST VOL 24 3og, SECURITIES CORPORATION Jefferson County Jefferson County November 9, 1998 Limited Tax General Obligation Refunding Bonds, 1998 Underwriting Spread Element Management Expenses Underwriting Avg. Takedown Total Amount/$1,000 $ 2.09 .91 .50 5.00 $ 8.50 ................ SEATTLE -NORTHWEST , C] r `�� SECURITIES CORPORATION VOL �/ 4 Fai* Jeerson County November 9, 1998 Jefferson County Limited Tax General Obligation Refunding Bonds, 1998 Estimated Underwriting Expenses Bond Processin Day Loan Fee $ 63 CUSIP 191 Clearance and Closing 686 Total Processing $ 940 Public Finance Travel $ 130 B & O Taxes 400 Allocated Costs (1) 3,078 Official Statement Print & Mail (2) --- Total Public Finance $ 1,109 Total Expenses 2049 Per $1,000 par amount $ 0.91 (I) Telephone, mail, courier, duplicating, computer and fax (2) To be invoiced separately % r� SEATTLE -NORTHWEST VOL 4.x 4 wv_- zo SECURITIES CORPORATION SUMMARY OF REFUNDING RESULTS JEFFERSON COUNTY, WASHINGTON LTGO Refunding Bonds, 1998 (Ref. 1991 and 1993) Dated Date Delivery Date Arbitrage yield Escrow yield Bond Par Amount True Interest Cost Net Interest Cost Average Coupon Average Life Par amount of refunded bonds Average coupon of refunded bonds Average life of refunded bonds PV of prior debt to 12/02/1998 @ 4.202044% Net PV Savings Percentage savings of refunded bonds Percentage savings of refunding bonds VOL 24 rw 12/01/1998 12/02/1998 4.202044% 4.201255% 2,260,000.00 4.325790% 4.242196% 4.132173% 8.517 2,091,001.72 6.103369% 8.992 2,383,051.07 137,269.67 6.564780% 6.073879% W94 09 -Nov -98 10:58 am Prepared by MAH / Seattle -Northwest Securities ( 4.200 Jeffersn:R9193) Page 1 SOURCES AND USES OF FUNDS JEFFERSON COUNTY, WASHINGTON LTGO Refunding Bonds, 1998 (Ref. 1991 and 1993) Dated Date 12/01/1998 Delivery Date 12/02/1998 Sources: Bond Proceeds Par Amount 2,260,000.00 Accrued Interest 256.82 Original Issue Discount -1,974.85 2,258,281.97 Uses: Refunding Escrow Deposits: Cash Deposit 1.41 SLG Purchases 2,208,120.00 2,208,121.41 Other Fund Deposits Accrued Interest 256.82 Delivery Date Expenses Cost of Issuance 18,450.00 Underwriter's Discount 19,210.00 Bond Insurance (.33%) 10,000.00 47,660.00 Other Uses of Funds: Additional Proceeds 2,243.74 2,258,281.97 VOL 24 r',- 09 -Nov -98 10:58 am Prepared by MAH / Seattle -Northwest Securities ( 4.200 Jeffersn:R9193) Page 2 SAVINGS JEFFERSON COUNTY, WASHINGTON LTGO Refunding Bonds, 1998 (Ref. 1991 and 1993) 09 -Nov -98 10:58 am Prepared by MAH / Seattle -Northwest Securities ( 4.200 Jeffersn:R9193) Page 3 Present Value Prior Refunding Refunding Refunding Annual to 12/02/1998 Date Debt Service Debt Service Receipts Net Cash Flow Savings Savings @ 4.2020437% 12/02/1998 256.82 -256.82 256.82 256.82 05/01/1999 50,968.98 50,968.98 50,099.23 06/01/1999 37,255.00 46,227.50 46,227.50 -81972.50 -8,788.88 11/01/1999 50,969.00 50,969.00 49,068.31 12/01/1999 37,255.00 121,227.50 121,227.50 -83,972.50 9;249.80 -M561.41 05/01/2000 50,968.99 50,968.99 48,058.58 06/01/2000 37,255.00 44,727.50 44,727.50 -7,472.50 -7,021.43 11/01/2000 50,968.98 50,968.98 47,069.63 12/01/2000 37,255.00 124,727.50 124,727.50 -87,472.50 6,992.97 -80,501.01 05/01/2001 50,968.97 50,968.97 46,101.03 06/01/2001 37,255.00 43,127.50 43,127.50 -5,872.50 -51293.25 11/01/2001 50,968.98 50,968.98 45,152.37 12/01/2001 37,255.00 133,127.50 133,127.50 -95,872.50 192.95 -84,637.67 05/01/2002 50,968.98 50,968.98 44,223.23 06/01/2002 37,255.00 41,327.50 41,327.50 -41072.50 -3,521.28 11/01/2002 50,968.99 50,968.99 43,313.22 12/01/2002 37,255.00 131,327.50 131,327.50 -94,072.50 3,792.97 -79,665.84 05/01/2003 50,968.99 50,968.99 42,421.93 06/01/2003 37,255.00 39,527.50 39,527.50 -2,272.50 -1,884.88 11/01/2003 50,968.99 50,968.99 41,548.98 12/01/2003 37,255.00 129,527.50 129,527.50 -92,272.50 7,392.98 -74,958.62 05/01/2004 50,968.98 50,968.98 40,693.98 06/01/2004 37,255.00 37,727.50 37,727.50 -472.50 -375.94 11/01/2004 50,968.98 50,968.98 39,856.58 12/01/2004 142,255.00 237,727.50 237,727.50 95.472.50 5,992.96 -741399.05 05/01/2005 50,968.99 50,968.99 39,036.43 06/01/2005 34,170.63 33,727.50 33,727.50 443.13 338.21 11/01/2005 50,969.00 50,969.00 38,233.15 12/01/2005 144,170.63 238,727.50 238,727.50 -94,556.87 7,824.25 -70,684.15 05/01/2006 50,968.98 50,968.98 37,446.38 06/01/2006 30,870.63 29,627.50 29,627.50 1,243.13 910.16 11/01/2006 50,968.99 50,968.99 36,675.82 12/01/2006 145,870.63 244,627.50 244,627.50 -987756.87 4,424.23 -70,816.76 05/01/2007 50,968.98 50,968.98 35,921.10 06/01/2007 27,420.63 25,327.50 25,327.50 2,093.13 1,470.06 11/01/2007 50,968.98 50,968.98 35,181.92 12/01/2007 152,420.63 245,327.50 245,327.50 -92,906.87 11,124.22 -637908.17 05/01/2008 50,969.00 50,969.00 34,457.96 06/01/2008 23,592.50 20,927.50 20,927.50 2,665.00 1,795.46 11/01/2008 50,968.99 50,968.99 33,748.89 12/01/2008 153,592.50 255,927.50 255,927.50 -102,335.00 2,267.99 -67,526.24 05/01/2009 50,968.98 50,968.98 33,054.40 06/01/2009 19,530.00 16,110.00 16,110.00 3,420.00 2,210.27 11/01/2009 50,968.97 50,968.97 32,374.20 12/01/2009 159,530.00 256,110.00 256,110.00 -961580.00 8,777.95 -61,132.96 05/01/2010 50,968.98 50,968.98 31,708.02 06/01/2010 15,120.00 11,190.00 11,190.00 3,930.00 2,436.41 11/01/2010 50,968.98 50,968.98 31,055.53 12/01/2010 165,120.00 261,190.00 261,190.00 -96,070.00 9,797.96 -58,333.20 05/01/2011 35,240.21 35,240.21 21,030.11 ; VOL 24 r, A[,*, 30 6 09 -Nov -98 10:58 am Prepared by MAH / Seattle -Northwest Securities ( 4.200 Jeffersn:R9193) Page 3 SAVINGS JEFFERSON COUNTY, WASHINGTON LTGO Refunding Bonds, 1998 (Ref. 1991 and 1993) Present Value Prior Refunding Refunding Refunding Annual to 12/02/1998 Date Debt Service Debt Service Receipts Net Cash Flow Savings Savings @ 4.2020437% 06/01/2011 10,395.00 5,940.00 5,940.00 4,455.00 2,649.39 12/01/2011 170,395.00 170,940.00 170,940.00 -545.00 39,150.21 -317.44 06/01/2012 5,355.00 2,310.00 2,310.00 3,045.00 1,737.10 12/01/2012 175,355.00 107,310.00 107,310.00 68,045.00 71,090.00 38,019.28 3,243,464.62 3,055,650.00 256.82 3,055,393.18 188,071.44 188,071.44 135,025.92 Savings Summ PV of savings from cash flow 135,025.92 Plus: Refunding funds on hand 2,243.74 Net PV Savings 137,269.66 VOL 24 qac;=_ 309' 09 -Nov -98 10:58 am Prepared by MAH / Seattle -Northwest Securities ( 4.200 Jeffersn:R9193) Page 4 BOND DEBT SERVICE JEFFERSON COUNTY, WASHINGTON LTGO Refunding Bonds, 1998 (Ref. 1991 and 1993) Annual Period Ending Principal Coupon Interest Debt Service Debt Service 12/02/1998 06/01/1999 46,227.50 46,227.50 12/01/1999 75,000 4.000% 46,227.50 121,227.50 167,455 06/01/2000 44,727.50 44,727.50 12/01/2000 80,000 4.000% 44,727.50 124,727.50 169,455 06/01/2001 43,127.50 43,127.50 12/01/2001 90,000 4.000% 43,127.50 133,127.50 176,255 06/01/2002 41,327.50 41,327.50 12/01/2002 90,000 4.000% 41,327.50 131,327.50 172,655 06/01/2003 39,527.50 39,527.50 12/01/2003 90,000 4.000% 39,527.50 129,527.50 169,055 06/01/2004 37,727.50 37,727.50 12/01/2004 200,000 4.000% 37,727.50 237,727.50 275,455 06/01/2005 33,727.50 33,727.50 12/01/2005 205,000 4.000% 33,727.50 238,727.50 272,455 06/01/2006 29,627.50 29,627.50 12/01/2006 215,000 4.000% 29,627.50 244,627.50 274,255 06/01/2007 25,327.50 25,327.50 12/01/2007 220,000 4.000% 25,327.50 245,327.50 270,655 06/01/2008 20,927.50 20,927.50 12/01/2008 235,000 4.100% 20,927.50 255,927.50 276,855 06/01/2009 16,110.00 16,110.00 12/01/2009 240,000 4.100% 16,110.00 256,110.00 272,220 06/01/2010 11,190.00 11,190.00 12/01/2010 250,000 4.200% 11,190.00 261,190.00 272,380 06/01/2011 5,940.00 5,940.00 12/01/2011 165,000 4.400% 5,940.00 170,940.00 176,880 06/01/2012 2,310.00 2,310.00 12/01/2012 105,000 4.400% 2,310.00 107,310.00 109,620 2,260,000 795,650.00 3,055,650.00 3,055,650 VOL 09 -Nov -98 10:58 am Prepared by MAH / Seattle -Northwest Securities 24 Fit,: ;3098 ( 4.200 Jeffersn:R9193) Page 6 PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 27, 1998 New Issue Book -Entry Only Nonrated In the opinion of Bond Counsel, under existing federal lam and assuming compliance by the County with applicable requirements of the Internal Revenue Code of 1986, as amended (the 'Code"), that must be satisfied subsequent to the issue date of the Bonds, interest on the Bonds is excluded from gross income of registered owners for federal income tax purposes under existing federal law and is not an item of tax preference for purposes of the alternative minimum tax applicable to individuals. However, while interest on the Bonds also is not an item of tax preference for purposes of the alternative minimum tax applicable to corporations, interest on the Bonds received by corporations is taken into account in the computation of adjusted current earnings for purposes of the alternative minimum tax applicable to corporations, interest on the Bonds received by certain S corporations may be subject to tax, and interest on the Bonds received by foreign corporations with United States branches may be subject to a foreign branch profits tax. Receipt of interest on the Bonds may have other federal tax consequences for certain taxpayers. See the captions 'Tax Exemption" and 'Certain Other Federal Tax Consequences." $2,2653000* Jefferson County, Washington Limited Tax General Obligation Refunding Bonds, 1998 DATED: November 1, 1998 DUE: December 1, as shown below The Bonds will be issued as registered bonds in denominations of $5,000, or integral multiples thereof, and will be registered in the name of Cede & Co., as bond owner and nominee for DTC. DTC will act as securities depository for the Bonds. Purchasers will not receive certificates representing their interest in the Bonds purchased. Interest on the Bonds will be paid on June 1, 1999 and semiannually thereafter on December 1 and June 1 of each year to the maturity or earlier redemption of the Bonds. Principal of and interest on the Bonds will be payable by either fiscal agency of the State of Washington in New York, New York, or Seattle, Washington, currently The Bank of New York and Wells Fargo Bank, National Association, respectively (the `Bond Registrar"), and as further described herein. For so long as the Bonds remain in a "book -entry only" transfer system, the fiscal agent will make such payments only to DTC, which will in turn remit such principal and interest to its participants for subsequent disbursement to Beneficial Owners of the Bonds as described further herein under the caption `Book -Entry Only System." Due Interest Yields or Due Interest Yields or Dec.I Amounts* Rates Prices Dec.I Amounts* Rates Prices 1999 $ 65,000 2006 $205,000 2000 80,000 2007 220,000 2001 85,000 2008 230,000 2002 90,000 2009 240,000 2003 90,000 2010 250,000 2004 195,000 2011 190,000 2005 205,000 2012 120,000 (Plus accrued interest from November 1, 1998) The Bonds maturing on and after December 1, 2009, will be subject to redemption at the option of the County on December 1, 2008, as further described herein. The County has designated the Bonds as "Qualified Tax -Exempt Obligations" for banks, thrift institutions and other financial institutions. See the caption "Certain Other Federal Tax Consequences" herein for a discussion of this designation. The Bonds are limited obligations of the County. The County has pledged irrevocably to include in its budget and levy taxes annually within the constitutional and statutory tax limitations provided by law without a vote of the electors of the County on all of the taxable property within the County in an amount sufficient, together with other money legally available and to be used therefor, to pay when due the principal of and interest on the Bonds, and the full faith, credit and resources of the County has been pledged irrevocably for annual levy and collection of those taxes and the prompt payment of the principal and interest. The Bonds do not constitute a debt or indebtedness of the State of Washington, or any political subdivision thereof other than the County. The Bonds are offered by the Underwriter when, as and if issued, subject to the approving legal opinion of Foster Pepper & Shefelman PLLC of Seattle, Washington, Bond Counsel. It is expected that the Bonds in definitive book -entry form will be ready for delivery at the facilities of DTC in New York, New York, on or about 11998. This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire official statement to obtain information essential to the making ofan informed investment decision. * Preliminarv. subiect to chance Dated: �� SEATTLE- NORTHWEST t `�0 4 399 SECURITIES CORPORATION Jefferson County 1820 Jefferson Street P.O. Box 1220 Port Townsend, Washington 98368 (360) 385-9150 Elected Officials County Conunissioners Glen Huntingford, District No. 2 Dan Harpole, District No. 1 Richard Wojt, District No. 3 Other Elected County Officials Judi Morris Donna M. Gastfield Jack Westerman III David Skeen Marianne Walters Position Chair Commissioner Commissioner Treasurer Auditor Assessor Prosecuting Attorney/Coroner Clerk Appointed County Officials Janet A. Holbrook Chief Deputy Treasurer Klara A. Frabry Public Works Director Bond Counsel Foster Pepper & Shefelman PLLC Seattle, Washington The information set forth herein is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Underwriter. The information herein is subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder will, under any circumstances, create any implication that there has been no change in the affairs of the County since the date hereof. i VOL 24rrL= �`�� Table of Contents Page Descriptionof the Bonds........................................................................................................................................................1 Principal Amount, Date, Interest Rates and Maturities.................................................................................................1 Form, Denomination and Registration..........................................................................................................................1 PayingAgent..................................................................................................................................................................1 OptionalRedemption....................................................................................................................................................1 OpenMarket Purchase...................................................................................................................................................2 Book -Entry Bonds..........................................................................................................................................................2 Procedure in the Event of Revisions of Book -Entry Transfer System...........................................................................2 Useof Proceeds.......................................................................................................................................................................2 RefundingPlan .......................................................................................................................................................................3 Procedure........................................................................................................................................................................3 Verificationof Calculations............................................................................................................................................3 Sourcesand Uses of Funds.............................................................................................................................................3 Securityfor the Bonds............................................................................................................................................................3 Sourceof Repayment.....................................................................................................................................................4 DebtPayment Record....................................................................................................................................................4 FutureFinancings...................................................................................................................................................................4 TaxingPowers and Debt Capacity..........................................................................................................................................4 Computationof Debt Capacity......................................................................................................................................5 OverlappingTaxing Districts.........................................................................................................................................5 Regular Property Tax Limitations..................................................................................................................................6 AdValorem Tax Levies..................................................................................................................................................7 RepresentativeLevy Rates.............................................................................................................................................7 AssessedValuation Determination.........................................................................................................................................7 TaxCollection Procedure.......................................................................................................................................................7 TaxCollection Record....................................................................................................................................................8 AuthorizedInvestments..........................................................................................................................................................8 JeffersonCounty Financial Data.............................................................................................................................................9 GeneralObligation Debt...............................................................................................................................................9 Historical Revenues from Solid Waste Tipping Fees.....................................................................................................9 Summary of Bonded Debt Service Requirements..........................................................................................................9 NetDirect and Overlapping Debt............................................................................................................................... 10 BondedDebt Ratios.................................................................................................................................................... 10 Jefferson County Overlapping Debt........................................................................................................................... 11 MajorTaxpayers.......................................................................................................................................................... 11 Comparative Current Expense Fund Statement of Revenues, Expenditures and Changes in Fund Balance ............. 12 TheCounty.......................................................................................................................................................................... 13 AccountingPractices................................................................................................................................................... 13 BudgetControls.......................................................................................................................................................... 13 Auditingof County Finances...................................................................................................................................... 13 Cash Management and Investment Practices.............................................................................................................. 14 LaborRelations........................................................................................................................................................... 14 PensionSystem............................................................................................................................................................ 14 RiskManagement........................................................................................................................................................ 15 ContingentLiabilities.................................................................................................................................................. 15 DemographicInformation................................................................................................................................................... 15 Litigation............................................................................................................................................................................. 19 Approvalof Counsel............................................................................................................................................................ 19 Conflictsof Interest............................................................................................................................................................. 19 TaxExemption..................................................................................................................................................................... 19 Certain Other Federal Tax Consequences........................................................................................................................... 20 Underwriting....................................................................................................................................................................... 20 Miscellaneous....................................................................................................................................................................... 21 OngoingDisclosure Undertaking........................................................................................................................................ 21 Book -Entry Only System..................................................................................................................................................... 22 OfficialStatement................................................................................................................................................................ 24 N. VOL ire= ,1a1 OFFICIAL STATEMENT Jefferson County, Washington $252655000* Limited Tax General Obligation Refunding Bonds, 1998 Jefferson County, Washington (the "County"), a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington (the "State") furnishes this Official Statement in connection with the offering of $2,265,000* aggregate principal amount of Limited Tax General Obligation Refunding Bonds, 1998, dated November 1, 1998 (the "Bonds"). This Official Statement provides information concerning the County and the Bonds. Under and in accordance with State laws and provisions, this general obligation bond issue is issued pursuant to Resolution No. (the "Resolution"), adopted by the County Commissioners (the "Commissioners") on , 1998. Description of the Bonds Principal Amount, Date, Interest Rates and Maturities The Bonds will be issued in the aggregate principal amount of $2,265,000* and will be dated and bear interest from November 1, 1998. The Bonds will mature on the dates and in the principal amounts and will bear interest (payable semiannually on June 1 and December 1, first interest payable June 1, 1999) until the maturity or earlier redemption of the Bonds at the rates set forth on the cover of this Official Statement. Interest on the Bonds will be computed on the basis of a 360 -day year consisting of twelve 30 -day months. Form, Denomination and Registration The Bonds will be issued in fully registered form in the denomination of $5,000, or any integral multiple thereof within a single maturity. Individual purchases may be made in book -entry form only. Purchasers will not receive certificates representing their interest in the Bonds purchased. The Bonds, when issued, will be registered in the name of Cede & Co., as registered owner and nominee of The Depository Trust Company, New York, New York ("DTC"). So long as Cede & Co. is the registered owner of the Bonds, references herein to the registered owners or bond owners will mean Cede & Co. and will not mean the "Beneficial Owners" of the Bonds. In this Official Statement, the term "Beneficial Owner" means the person for whom a DTC participant acquires an interest in the Bonds. Paying Agent Principal of and interest on the Bonds will be payable by either State fiscal agent in New York, New York, or Seattle, Washington, currently The Bank of New York and Wells Fargo Bank, National Association (or such other fiscal agency or agencies as the Jefferson County Treasurer may from time to time designate). So long as Cede & Co. is the registered owner of the Bonds, principal of and interest on the Bonds are payable by wire transfer by the State's fiscal agents to DTC, which, in turn, is obligated to remit such principal and interest to its participants for subsequent disbursement to the Beneficial Owners of the Bonds, as further described herein under the caption "Book -Entry Only System." Optional Redemption The Bonds maturing in years 1999 through 2008, inclusive, are not subject to redemption prior to maturity. The Bonds maturing on or after December 1, 2009, are subject to redemption at the option of the County * Preliminary, subject to change 4� b`01_ 1 4 FAG0 t*310 ' on or after December 1, 2008, in whole or in part at any time (maturities to be selected by the County and by lot within a maturity in such manner as the Bond Registrar and DTC will determine) at a price of par plus accrued interest, if any, to the date of redemption. Open Market Purchase The County reserves the right and option to purchase any or all of the Bonds in the open market at any time at any price. All Bonds so purchased shall be canceled. Book -Entry Bonds DTC will act as securities depository for the Bonds. The ownership of one fully registered Bond for each maturity of the Bonds, as set forth on the cover of this Official Statement, each in the aggregate principal amount of such maturity, will be registered in the name of Cede & Co., as nominee for DTC. See `Book - Entry Only System" herein for additional information. The District makes no representation as to the accuracy or completeness of the information provided by DTC. Purchasers of the Bonds should confirm this information with DTC or its participants. Procedure in the Event of Revisions of Book -Entry Transfer System If the County is unable to retain a qualified successor to DTC, or the County has determined that it is in the best interest of the County not to continue the book -entry system of transfer or that interests of the Beneficial Owners of the Bonds might be adversely affected if the book -entry system of transfer is continued, the County will execute, authenticate and deliver at no cost to the Beneficial Owners of the Bonds or their nominees, Bonds in fully registered form, in the denomination of $5,000 or any integral multiple thereof within a maturity. Thereafter, the principal of the Bonds will be payable upon due presentment and surrender thereof at the principal office of the Bond Registrar; interest on the Bonds will be payable by check or draft mailed or by wire transfer (wire transfer will be made only if so requested in writing) to the persons in whose names such Bonds are registered, at the address appearing upon the registration books on the 15th day of the month preceding an interest payment date, and the Bonds will be transferable as provided in the Resolution. Use of Proceeds The proceeds from the sale of the Bonds will be used to refund: (a) $586,854 of the County's Limited Tax General Obligation Bonds, 1991 Series A, dated May 30, 1991, maturing on May 1 and November 1 in years 1999 through May 1, 2011 (the "1991 Series A Refunded Bonds"). The 1991 Series A Refunded Bonds will be escrowed to their call date of May 1, 1999, at which time they will be called at par; (b) $186,681 of the County's Limited Tax General Obligation Bonds, 1991 Series B, dated May 30, 1991, maturing on May 1 and November 1 in years 1999 through May 1, 2011 (the "1991 Series B Refunded Bonds"). The 1991 Series B Refunded Bonds will be escrowed to their call date of May 1, 1999, at which time they will be called at par; (c) $111,560 of the County's Limited Tax General Obligation Bonds, 1991 Series C, dated May 30, 1991, maturing on May 1 and November 1 in years 1999 through May 1, 2011 (the "1991 Series C Refunded Bonds"). The 1991 Series C Refunded Bonds will be escrowed to their call date of May 1, 1999, at which time they will be called at par; (d) $1,205,000 of the County's Limited Tax General Obligation Bonds, 1993, dated February 1, 1993, maturing on December 1 in years 2004 through 2012 (the "1993 Refunded Bonds"). The 1993 Refunded Bonds will be escrowed to their call date of December 1, 2003, at which time they will be called at par. Collectively, the 1991 Series A Refunded Bonds, the 1991 Series B Refunded Bonds, and the 1991 Series C Refunded Bonds are referred to herein as the 1991 Refunded Bonds. The 1991 Refunded Bonds and the 2 'VOL 24 tr�r 3103 1993 Refunded Bonds are referred to herein as the "Refunded Bonds." The Bonds are being issued for the purpose of realizing debt service savings. Refunding Plan Procedure From the proceeds of the Bonds, the County will purchase certain direct United States government obligations, including obligations of the State and Local Government Series ("Government Obligations"). These Government Obligations will be deposited in the custody of or such other duly appointed successor(s) ("Refunding Trustee"). The maturing principal of the Government Obligations, interest earned thereon, and necessary cash balance, if any, will provide payment of: (a) Interest on the 1991 Refunded Bonds to and including May 1, 1999; (b) On May 1, 1999 the principal of the 1991 Refunded Bonds; (c) Interest on the 1993 Refunded Bonds to and including December 1, 2003; and (d) On December 1, 2003, the principal of the 1993 Refunded Bonds. The Government Obligations, interest earned thereon, and necessary cash balance, if any, will irrevocably be pledged to and held in trust for the benefit of the owners of the Refunded Bonds by the Refunding Trustee, pursuant to an escrow deposit agreement to be executed by the County and the Refunding Trustee. Verification of Calculations The accuracy of (a) the computations of the adequacy of the maturing principal amounts of and interest on the Government Obligations to be held by the Refunding Trustee to pay principal and interest and the redemption premium, if any, on the Refunded Bonds as described above, and (b) the computations supporting the conclusion of Bond Counsel that the Bonds are not "arbitrage bonds" under Section 148 of the Internal Revenue Code of 1986, as amended, will be verified by , independent certified public accountants. Sources and Uses of Funds The proceeds from the Bonds (less accrued interest) are estimated to be applied as follows: Sources of Funds* Par Amount of Bonds $ Uses of Funds* Cost of Escrow $ Issuance Expenses, Underwriter's Discount and Contingency Total Uses of Funds $ Security for the Bonds The Bonds are limited obligations of the County. The County has pledged irrevocably to include in its budget and levy taxes annually within the constitutional and statutory tax limitations provided by law without a vote of the electors of the County on all of the taxable property within the County in an amount sufficient, together with other money legally available and to be used therefor, including the Tax, to pay when due the principal of and interest on the Bonds, and the full faith, credit and resources of the County has been pledged irrevocably for annual levy and collection of those taxes and the prompt payment of the principal and interest. The proceeds of the Tax are pledged to the Bonds, and the county has pledged and covenanted that the Tax will be maintained and continued until the bonds, both principal and interest, are fully paid and retired. * Preliminary, subject to change VOL r'Gt 3�t7 The Bonds do not constitute a debt or indebtedness of the State, or any political subdivision thereof other than the County. Source of Repayment Although the Bonds are limited tax general obligations of the County, the County expects to continue paying debt service from solid waste revenues on that portion of the Bonds which is refunding the 1993 Bonds. The County currently collects tipping fees for solid waste delivered to the landfill at $110/ton. Solid waste tipping fee revenues in 1997 totaled $1,545,000, which is used to pay debt service on the Bonds and provides additional operating revenues for the solid waste system. Solid waste revenues and expenditures are accounted for as an enterprise fund and are not included in the County's general fund. The County receives approximately 15,000 tons of solid waste annually at the landfill. Because of continued growth, the County expects the volume of solid waste to slowly increase. The County Commission has complete authority to set rates and charges for solid waste disposal and also has the authority to allocate general fund revenues to pay debt service on the Bonds. The County expects to continue paying debt service on that portion of the Bonds which is refunding the 1991 Bonds from the following sources of funds: i) funds from the County Capital Improvement Fund and a $25,000 per year allotment from the City of Port Townsend. The Capital Improvement Fund collects the 1/4 per cent real estate excise tax which is about $200,000 per year; and ii) funds transferred from the County's Hotel/Motel fund. This fund collects about $100,000 annually. Debt Payment Record The County has promptly met all debt service payments on outstanding obligations. No refunding bonds have been issued to prevent an impending default. Future Financings The County has no authorized but unissued bonds outstanding, nor does it anticipate issuing additional long-term debt within the next 12 months. Taxing Powers and Debt Capacity The power of the County to contract debt of any kind is controlled and limited by State law. Debt must be incurred in accordance with detailed budget procedures and paid for out of identifiable receipts and revenues. The budget must be balanced for each fiscal year. It is unlawful for an officer or employee of the County to incur liabilities in excess of budgetary appropriations. In an emergency, the County Board may put a plan into effect and authorize indebtedness outside the current budget. All expenditures for emergency purposes must be paid by warrants from any available money in the fund properly chargeable with such expenditures. If there is insufficient money on hand in the fund, the warrants become registered interest-bearing warrants. In adopting the budget for any fiscal year, the County Board must appropriate funds to retire any outstanding registered warrants issued since the adoption of the last preceding budget. General Obligation Debt Capacity and Taxing Powers As prescribed by statutes of the State of Washington, the unlimited tax general obligation indebtedness permitted for counties, subject to a 60 percent majority vote of qualified electors, is limited to 2.5 percent of a county's assessed valuation for general purposes. Within the 2.5 percent of assessed valuation for general purposes, the County may, without a vote of the electors, incur general obligation indebtedness in an amount not to exceed 1.5 percent of assessed valuation. Additionally, within the 2.5 percent of assessed valuation for general purposes, the County may also, without a vote of the electors, enter into leases, if the 4 VOL2 4ac� 3105 total principal component of the lease payments together with the other nonvoted general obligation indebtedness of the County, does not exceed 1.5 percent of assessed valuation. The combination of unlimited tax and limited tax general obligation debt for general purposes, including leases, cannot exceed 2.5 percent of assessed valuation. The County may, without a vote of the electorate, issue debt as follows: (1) Pursuant to a resolution specifying the amount and object of the expenditure of the proceeds, the County Board may borrow money for corporate purposes and issue bonds within the constitutional and statutory limitations on indebtedness. (2) The County may execute conditional sales contracts for the purchase of real or personal property. (3) The County may execute leases with or without an option to purchase. Jefferson County Computation of Debt Capacity (As of November 1, 1998) 1998 Collection Year Total Assessed Valuation Limited Tax General Obligation Debt Capacity (Nonvoted) 1.5% of Assessed Valuation Less: Outstanding Limited Tax General Obligation Debt(includes the Bonds) Remaining Capacity (Nonvoted) Total General Obligation Debt Capacity (Voted and Nonvoted) 2.5% of Assessed Valuation Less: Outstanding Unlimited Tax General Obligation Debt Less: Outstanding Limited Tax General Obligation Debt Remaining Capacity (Voted and Nonvoted) Overlapping Taxing Districts $2,189,290,885 $ 32,839,363 (2,790,000) $ 30,049,363 $ 54,732,272 0 (2,790,000) $ 51,942,272 The County may levy taxes up to $1.80 per $1,000 of assessed value for general county purposes, including payment of debt service on limited tax general obligations, such as the Bonds. The taxing districts within the County have the statutory power to levy regular property taxes at the following rates subject to the limitations provided by chapter 84.55 RCW. County (Current Expense) County (Road District) Library District Fire Districts Port Districts Cities and Towns Cities and Towns State Schools Hospital Districts $1.800 per $1,000 of Assessed Value �l> $2.250 per $1,000 of Assessed Value $0.500 per $1,000 of Assessed Value $1.500 per $1,000 of Assessed Value $0.450 per $1,000 of Assessed Value $3.375 per $1,000 of Assessed Value $0.225 per $1,000 of Assessed Value P) $3.600 per $1,000 of Assessed Value P) $0.750 per $1,000 of Assessed Value (1) Pursuant to RCW 84.52.043(1), a county may increase its levy from $1.80 per $1,000 to a rate not to exceed $2.475 per $1,000 for general county purposes if (i) the total levies for both the county and any road district within the county do not exceed $4.05 per $1,000 and (ii) no other taxing district has its levy reduced as a result of the increased county levy. (2) RCW 41.16.060. To be used for pension funding purposes, if required, otherwise this tax may be levied and used for any other municipal purpose. (3) The $3.60 per $1,000 of assessed value statutory rate is adjusted for each county by a property tax ratio which is the ratio of total assessed value for real and personal property to market or actual value. 5 ! VOL 24 Face d Regular Property Tax Limitations In the State, the authority of a taxing district to levy taxes without a vote of the people for general purposes, including the payment of debt service on limited tax general obligation indebtedness, is subject to the limitations described below. Information relating to regular property tax limitations is based on existing statutes and constitutional provisions. Maximum Rate Limitation. Title 84 RCW authorizes the imposition of regular tax levies to various statutory maximums as displayed above. Levy Increase Limitation. The 106 percent limitation (chapter 84.55 RCW), amended by Senate Bill 5835 (the "Property Tax Act") in a Statewide referendum on November 4, 1997, is a limitation on the amount of levies by individual taxing districts. All regular property tax levies are subject to the 106 percent limitation. The law provides, in substance, that unless a higher rate is approved by a majority of the voters at an election, the regular property tax levy by a taxing district must be set so that the amount of the property taxes which will become payable to it in a given year will not exceed the amount of taxes levied by the taxing district in the highest of the three most recent years multiplied by a limit factor, plus an adjustment for new construction. The limit factor is defined as the greater of (i) the lesser of 106 percent or 100 percent plus inflation or (ii) any percent up to 106 percent, if approved by a majority plus one vote of the governing body of the municipality upon a finding of substantial need. RCW 84.55.092 provides for setting the property tax levy amount at the level which would be allowed if the tax levy for taxes due in prior years, beginning in 1986, had been set at the full amount allowed under chapter 84.55 RCW. Since the 106 percent limitation applies to the dollar amount levied rather than to levy rates, increases in property values exceeding six percent per year result in decreasing tax levy rates. RCW 84.55.050 allows a taxing district to increase its regular tax levy by more than six percent after obtaining a majority vote of its electors, for a limited period or to satisfy a limited purpose. A newly created taxing district can initiate its levy at the maximum permitted statutory levy rate, unless such amount would exceed the limitations described below. For taxing districts with a population of less than 10,000 in the calendar year prior to the assessment year, the 106 percent limitation remains in effect and the district is not subject to the limitations set forth in the Property Tax Act. The One Percent Aggregate Regular Levy Limitation. Article VII, Section 2 of the Washington Constitution, as amended in 1973, limits aggregate regular property tax levies by the State and all taxing districts, except port districts and public utility districts, to one percent of the true and fair value of property. RCW 84.52.050 provides the same limitation by statute. $5.90/$1,000 Aggregate Regular Levy Limitation. Within the one percent limitation described above, RCW 84.52.043(2) imposes an aggregate limitation on regular tax levies by all taxing districts other than the State, of $5.90/$1,000 of assessed valuation, except levies for any port or public utility district; excess levies authorized in Article VII, Section 2 of the State Constitution; and certain levies for acquiring conservation futures, for emergency medical services or care, and to finance affordable housing. Uniformity Requirement. Article VII, Section 1 of the Washington Constitution requires that property taxes be levied at a uniform rate upon the same class of property within the territorial limits of a taxing district levying such taxes. It is possible because of different overlapping taxing districts in different areas of the County that the maximum permissible levy might vary within the County. In that event, to comply with the constitutional requirement for uniformity of taxation, the lowest permissible rate for any part of the County would be applied to the entire County. Prioritization of Levies. RCW 84.52.010 provides that if aggregate levies certified by all taxing districts exceed the aggregate levy limitations described above, levies certified by junior taxing districts are reduced or eliminated in order to bring the aggregate levy into compliance with statutory maximum prescribed by RCW 04.52.050 and 84.52.043. RCW 84.52.043 defines "junior taxing districts" as all taxing districts other than the state, counties, road districts, cities, towns, port districts, and public utility districts. "VOL 24 �a�. 6 Jefferson County Ad Valorem Tax Levies (Dollars per $1,000 of Assessed Valuation) Sources: Jefferson County Assessor and Treasurer Levv Amounts Countywide Levy Rates Road District Countywide County Collection Current Road District Year Expense Uninc. 1998 1.82179 1.35544 1997 1.74503 1.25945 1996 1.72215 1.25364 1995 1.72345 1.29422 1994 1.75142 1.31957 Sources: Jefferson County Assessor and Treasurer Levv Amounts Countywide County Current Road District Expense Uninc. $3,932,740 $2,200,192 3,504,739 1,963,533 3,262,589 1,819,394 2,911,262 1,618,203 2,711,543 1,486,673 The actual rate levied in a representative area of the County in 1998 is as follows: Representative Levy Rates (Per $1,000 of Assessed Valuation) State Schools $ 3.39025 Jefferson County (Total County) 1.82179 City of Port Townsend 2.09206 EMS City 0.23356 School District No. 50 3.26022 Port District 0.21793 PUD No.1 0.14457 Hospital District No. 2 0.59691 Total S 11.75729 Source: Jefferson County Assessor Assessed Valuation Determination The County Assessor, or equivalent thereof, ("Assessor") determines the value of all real and personal property throughout the County which is subject to ad valorem taxation, except certain utility properties which are valued by the State Department of Revenue. The Assessor is an elected official whose duties and methods of determining value are prescribed and controlled by statute and by detailed regulations promulgated by the State Department of Revenue. For tax purposes the assessed value of property is 100 percent of its market value. Three approaches may be used to determine real property value: market data, replacement cost and income generating capacity. In Jefferson County, all property is subject to revaluation every four years. The revaluation occurs in cycles, and the intention is that one-fourth of the property be revalued every year. The property is listed by the Assessor on a roll at its current assessed value and the roll is filed in the Assessor's office. The Assessor's determinations are subject to revisions by the County Board of Equalization and, for certain property, subject to further revisions by the State Board of Equalization. The provisions relating to assessed valuation increase limitations enacted by the Property Tax Act, as defined herein, were declared unconstitutional by the State Supreme Court in July 1998, and are consequently no longer in effect. Tax Collection Procedure Property taxes are levied in specific amounts and the rate for all taxes levied for all taxing districts in a county are determined, calculated and fixed by the Assessor based upon the assessed valuation of the 7 r VOL 24 3�LO 8 property within the various taxing districts. The Assessor extends the taxes to be levied within each taxing district upon a tax roll which contains the total amount of taxes to be so levied and collected. The tax roll is delivered to the County Treasurer, or equivalent thereof, by January 15, who creates a tax account for each taxpayer and is responsible for the collection of taxes due to each account. All such taxes are due and payable on the 30th of April of each year, but if the amount due from a taxpayer exceeds $50, one-half may be paid then and the balance no later than October 31, of each year. Delinquent taxes are subject to interest at the rate of 12 percent per year computed on a monthly basis from the date of delinquency until paid. In addition, a penalty of three percent will be assessed on June lst of the year in which the tax was due and eight percent on December lst of the year due. All collections of interest on delinquent taxes shall be credited to the County's current expense fund. The method of giving notice of payment of taxes due, the accounting for the money collected, the division of the taxes among the various taxing districts, notices of delinquency, and collection procedures are all covered by detailed statutes. The lien for property taxes is prior to all other liens or encumbrances of any kind on real or personal property subject to taxation. By law the Treasurer may not commence foreclosure of a tax lien on real property until three (3) years have passed since the first delinquency. The State's courts have not decided whether the Homestead Law (chapter 6.13 RCW) may give the occupying homeowner a right to retain the first $30,000 of proceeds of the forced sale of the family residence or other "homestead" property for delinquent general property taxes. (See A49 n v. Shard, 30 Wn. App. 837, 638 P.2d 627 (1982), holding the homestead right superior to the improvement district assessments). The United States Bankruptcy Court for the Western District of Washington has held that the Homestead Exemption applies to the lien for property taxes, while the State Attorney General has taken the position that it does not. Tax Collection Record (1) Assessed valuation is based upon 100% of actual valuation. (2) In process of collection. Sources: Jefferson County Assessor and Treasurer Authorized Investments Chapter 39.59 RCW limits the investment of public funds by local governments to the following authorized instruments: (i) bonds of the State or any local government in the State or general obligation bonds of any other state or political subdivision thereof which has at the time of investment one of the three highest credit ratings of a nationally recognized rating agency; (ii) registered warrants of a local government in the same county as the local government making the investment; (iii) certificates of deposit; and (iv) any investments authorized by law for the State Treasurer. In addition to these instruments, bond proceeds may be invested in qualified money market and mutual funds which restrict their portfolios to specified securities and post a bond with the State (RCW 39.59.030). The bond proceeds from this refunding bond issue will be invested in direct United States government obligations, as further described herein. Investments authorized by law for the State Treasurer include (i) obligations of the U.S. government, its agencies and wholly owned corporations; (ii) bankers' acceptances; (iii) commercial paper; (iv) obligations of the Federal Home Loan Bank, Fannie Mae and other government-sponsored enterprises; (v) motor vehicle fund warrants; and (vi) certificates of deposit (chapter 43.84 RCW). Utility revenue bonds and warrants of any city and bonds or warrants of a local improvement district are also eligible investments (RCW 35.39.030). , V0 'L 8 24 r�r: Bond Tax Collection Collection Assessed Ad Valorem Year As of Year Valuation(1) Tax Lew Of Levy 9/30/98 1998 $2,189,290,885 $3,932,740 (2) (2) 1997 2,049,230,535 3,504,739 98.2% 98.5% 1996 1,933,132,810 3,262,589 97.2 99.1 1995 1,723,318,545 2,911,262 97.2 99.8 1994 1,584,261,045 2,711,543 97.2 99.9 1993 1,377,030,230 2,457,045 97.5 100.0 (1) Assessed valuation is based upon 100% of actual valuation. (2) In process of collection. Sources: Jefferson County Assessor and Treasurer Authorized Investments Chapter 39.59 RCW limits the investment of public funds by local governments to the following authorized instruments: (i) bonds of the State or any local government in the State or general obligation bonds of any other state or political subdivision thereof which has at the time of investment one of the three highest credit ratings of a nationally recognized rating agency; (ii) registered warrants of a local government in the same county as the local government making the investment; (iii) certificates of deposit; and (iv) any investments authorized by law for the State Treasurer. In addition to these instruments, bond proceeds may be invested in qualified money market and mutual funds which restrict their portfolios to specified securities and post a bond with the State (RCW 39.59.030). The bond proceeds from this refunding bond issue will be invested in direct United States government obligations, as further described herein. Investments authorized by law for the State Treasurer include (i) obligations of the U.S. government, its agencies and wholly owned corporations; (ii) bankers' acceptances; (iii) commercial paper; (iv) obligations of the Federal Home Loan Bank, Fannie Mae and other government-sponsored enterprises; (v) motor vehicle fund warrants; and (vi) certificates of deposit (chapter 43.84 RCW). Utility revenue bonds and warrants of any city and bonds or warrants of a local improvement district are also eligible investments (RCW 35.39.030). , V0 'L 8 24 r�r: Jefferson County Financial Data (As of November 1, 1998) General Obligation Debt �l> Amount Date Final Amount TYpe Issued Issued Maturi Outstanding Limited Tax GO $2,070,000 2/01/93 12/01/03 $ 525,000 Limited Tax GO 2,265,000 (2) 11/01/98 12/01/12 2,265,000 (2) (1) Excludes the Refinided Bonds. (2) Preliminary, subject to change Source: Jefferson County Historical Revenues from Solid Waste Tipping Fees Annual Tipping Year Fee Revenue 1997 $1,545,000 1996 1,455,239 1995 1,455,697 1994 1,406,573 1993 1,093,549 Summary of Bonded Debt Service Requirements (Years Ending December 31) (1) Excludes the Refunded Bonds. (2) Preliminary, subject to change; assumed interest rates range from 3.30% to 4.30%. 9 VOL ?4 FAcz *3110 Outstanding The Bonds (2) Total Debt Year Debt (1) Principal Interest Service 1998 $ 205,182 $ 0 $ 0 $ 205,182 1999 104,494 65,000 98,443 267,936 2000 105,394 80,000 88,725 274,119 2001 105,931 85,000 85,925 276,856 2002 106,094 90,000 82,823 278,916 2003 105,750 90,000 79,403 275,153 2004 0 195,000 75,938 270,938 2005 0 205,000 68,333 273,333 2006 0 205,000 60,235 265,235 2007 0 220,000 52,035 272,035 2008 0 230,000 43,125 273,125 2009 0 240,000 33,695 273,695 2010 0 250,000 23,735 273,735 2011 0 190,000 13,235 203,235 2012 0 120,000 5,160 125,160 $ 732,844 $ 2,265,000 $ 810,808 $ 3,808,652 (1) Excludes the Refunded Bonds. (2) Preliminary, subject to change; assumed interest rates range from 3.30% to 4.30%. 9 VOL ?4 FAcz *3110 Collection Year 1998 Bond Assessed Valuation: $2,189,290,885 Estimated Population: 26,500 Net Direct and Overlapping Debt Direct Debt Unlimited Tax General Obligation Bonds $ 0 Limited Tax General Obligation Bonds* 2,790000 Net Direct Debt $ 2,790,000 Estimated Overlapping Debt (as further described herein) 54,162,438 Net Direct and Overlapping Debt $ 56,952,438 * Includes the Bonds and excludes the Refunded Bonds. Bonded Debt Ratios Net Direct Debt to Assessed Valuation Net Direct and Overlapping Debt to Assessed Valuation Per Capita Assessed Valuation Per Capita Net Direct Debt Per Capita Net Direct and Overlapping Debt 24 ray: 3111 _ 10 0.13% 2.60% $ 82,615 $ 105 $ 2,149 Jefferson County Overlapping Debt Major Taxpayers (As of September 30, 1998) (Districts with debt only) Percent of Percent Outstanding 1998 Coll. Year Overlap GO Debt School Districts Assessed Value Bond A.V. School District No. 46 100.00% $ 24,000 School District No. 49 100.00 13,635,000 School District No. 50 100.00 18,420,000 School District No. 323 1.77 481,794 School District No. 402 14.79 1,373,991 Total School Districts Rayonier Forest Resource Co. S 33,910,991 Fire Districts 0.39013 Sprint Corp. Fire District No.6 100.00 S 150,000 Total Fire Districts Construction/land development $ 150,000 Port Districts Quality Food Centers Grocery Port of Port Townsend 100.00 $ 8,510,500 Total Port Districts 4,306,120 S 8,510,000 Cities and Towns Resort hotel 3,894,200 Port Townsend 100.00 $ 606,153 Total Cities and Towns 100.00 $ 606.153 Total Overlapping Debt S 54,162,438 Source. Jefferson County Assessor and Treasurer Source. Jefferson County Assessor 11 .:VOL 24 FAfF .1112 Major Taxpayers Percent of 1998 Coll. Year County's Taxpayer Business Assessed Value Bond A.V. Port Townsend Paper Corp. Paper mill $ 33,497,555 1.54079% Pope Resources Timber, resort and development 32,536,005 1.49657 Puget Sound Energy Utility 27,109,205 1.24695 U.S. West Communications Utility 8,482,705 0.39018 Rayonier Forest Resource Co. Timber 8,481,640 0.39013 Sprint Corp. Utility 5,746,965 0.26434 Discovery Timber/Seton Construction/land development 4,770,550 0.21943 Quality Food Centers Grocery 4,748,215 0.21840 Safeway Grocery 4,306,120 0.19807 Ludlow Associates Resort hotel 3,894,200 0.17912 Total $133,573,160 6.14398% Source. Jefferson County Assessor 11 .:VOL 24 FAfF .1112 69 00 M O CD00 e'9 69 O 00 N 00 00 Ci 69 00 �O N C, 00 in r O O to 00 d" O� I M 00 O O M N d eq Ln d N 00 M \0 N N Q, \C) ^. I O O 69 5H 69 O- M --i Ln 00 O N l 00 M N—\0 N 't tin O O try 0� lo d' \p 98 001 N 1010, C� M O 00 M \0 d' N tf) — D` O u9 1 69 � toNMtoIT—O\0 \0 to to d^ d O an M O t in O, O tri to \O d' K 00 \0 M O M \D \0 to t N Q, O, d' 'D d' O -f, O� M It N It 0 C, v N N N .~-i to N N N O 'O m 'O d' 'D O LO .r 00 O 69 1 64 e9 .-' N O\ Q, O N O N O \0 mm O dam' UM .-i I 00 O, V� 69 69 00 c O D\ O to O O N t, 00 N �D W O N N O N .N.. N00 O eh N N n m et —I N 00 69 6`} 69 yol- 00 00\0 O n 0 00 N Nrl M N 00 N Irl N N �--� N W — — p, 69 F5 to m d' t� 1"O u) N_ t, I O Ln to to �D N O Q�, Q\ er O iinnMNn\0 ~� n C N C N N \O 6 O Q` O m N N o0 �c M ~ \0 ONO .,v — t\ 69 �Nintnt\OOr, d' N O cC M O O O� ^� N \O t\ eY: 00 a0 M l� v3 169 00 N M LO h l\ 00 l\ O G ^ O \O Ln M in ee N 4 Lr N m N �O to M D 69 169 m N N N 00 OO 00 O N O \0 :,NC, O d' 00 C� d' Q, O t, r"to Ln In N O - d' M .-� 'd' O, M — to O d' O O d M O O I O N O0 00 00 W O �D 00 O d' to o n o� � vm to N N h N O L NN O 00 69 69 69 69 r. > Y 7 N L y U U o ❑ F a� N L t h O O > p �ra��w�zo '6 H yol- 00 00\0 O n 0 00 N Nrl M N 00 N Irl N N �--� N W — — p, 69 F5 to m d' t� 1"O u) N_ t, I O Ln to to �D N O Q�, Q\ er O iinnMNn\0 ~� n C N C N N \O 6 O Q` O m N N o0 �c M ~ \0 ONO .,v — t\ 69 �Nintnt\OOr, d' N O cC M O O O� ^� N \O t\ eY: 00 a0 M l� v3 169 00 N M LO h l\ 00 l\ O G ^ O \O Ln M in ee N 4 Lr N m N �O to M D 69 169 m N N N 00 OO 00 O N O \0 :,NC, O d' 00 C� d' Q, O t, r"to Ln In N O - d' M .-� 'd' O, M — to O d' O O d M O O I O N O0 00 00 W O �D 00 O d' to o n o� � vm to N N h N O L NN O 00 69 69 00oN m o0 M- O Ln O 00 N N N Q\ N 69 69 O M 00 O •d' Q. O\ O, N O ^-' N 00 ON 00 L 00 nN h 69 69 N rl ON 61� 69 m v o n o� � vm to N N h N O L NN O 00 U 69 69 M- O Ln O 00 N N N Q\ N 69 69 O M 00 O •d' Q. O\ O, N O ^-' N 00 ON 00 L 00 nN h 69 69 N rl ON 61� 69 4 c� 3113 12 ER J v � L U N L t h O O > =bA DA .OV Y '6 v a7+ 6>LJ m U EL L L L W E° w�gciF.O C- Iz . F OOOc;z C W 4 c� 3113 12 ER J The County Jefferson County was incorporated on December 22, 1852, and operates under State laws applicable to a fourth-class county with a commissioner form of government. The principal financial and budgetary authority is vested in a three-member Board of County Commissioners. The present members of the Board of County Commissioners are as follows: Member Term Expires Glen Huntingford, Chair December 31, 2002 Dan Harpole December 31, 2000 Richard Wojt December 31, 1998 The County is a general purpose government and provides planning and zoning, public safety, road improvement, parks and recreation, judicial administration, health and social services, and general administrative services. Accounting Practices The accounting and reporting policies of the County conform to generally accepted accounting principles. The accounts of the County are organized on the basis of fund and account groups, each of which is considered a separate accounting entity. Each fund is accounted for with a separate set of self -balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. The County's resources are allocated to and accounted for in individual funds depending on what they are to be spent for and how they are controlled. The accrual basis of accounting is used for all funds except the governmental fund types, expendable trust funds and agency funds, which use the modified accrual basis of accounting. The modified accrual basis differs from the accrual basis in the following ways: i) purchases of capital assets are considered expenditures; ii) redemptions of long-term debt are considered expenditures when due; iii) revenues are recognized only when they become both measurable and available to finance expenditures of the current period; iv) inventories and prepaid items are reported as expenditures when purchased; v) interest on long- term debt is not accrued but is recorded as an expenditure when due; and vi) accumulated unpaid vacation, and sick pay, and other employee benefits are considered expenditures when paid. Budget Controls Annual appropriated budgets are adopted for the general and special revenue funds and for all proprietary funds on the modified accrual basis of accounting. For governmental funds, there are no differences between the budgetary basis and generally accepted accounting principles. Budgetary accounts are integrated in fund ledgers for all budgeted funds, but the financial statements include budgetary comparisons for annually budgeted governmental funds only. Budgets for debt service, capital project, and special assessment funds are adopted at the level of the individual debt issue or project and for fiscal periods that correspond to the lives of debt issues or projects. Annual appropriated budgets are adopted at the level of the fund. Subsidiary revenue and expenditure ledgers are used to compare the budgeted amounts with actual revenues and expenditures. Auditing of County Finances Accounting systems and budgetary controls are prescribed by the Office of the State Auditor in accordance with RCW 43.09.200 et seg. State statutes require audits for all local governments to be conducted by the Office of the State Auditor. The County complies with the systems and controls prescribed by the Office of the State Auditor and establishes procedures and records which reasonably assure safeguarding of assets and the reliability of financial reporting. The State Auditor is required to examine the affairs of all local governments at least once every three years. The County is audited annually. The examination must include, among other things, the financial condition and resources of the County, whether the laws and constitution of the State are being complied with, and ,2 13 r Y0L 2 4 'At," 3114 the methods and accuracy of the accounts and reports of the County. Reports of the auditor's examinations are required to be filed in the office of the State Auditor and in the auditing department of the County. Cash Management and Investment Practices The County Treasurer is empowered by State law to deposit and invest cash accumulations as directed on behalf of the County and other taxing districts. Investments are made in certificate of deposit, bankers acceptances and other authorized investments within and subject to guidelines established by the Office of the State Treasurer. Cash is invested directly for the benefit of several funds. The County Treasurer also invests funds on behalf of other agencies, governments and taxing districts separately as directed by them. Residual cash is pooled and invested to the benefit of the General Fund. The primary objective of the County's investment policy is to provide maximum security with the highest investment return. The policy calls for maintaining liquidity adequate to meet the operating needs of the County and the districts for which it invests. The Treasurer is responsible for the investment program, including procedures and controls. The Treasurer is required to invest in accordance with the Public Investment Act (chapter 39.58 RCW). See "Authorized Investments" herein. Investments are guided by the "Prudent Person Rule." The County's primary objectives are, in order of priority: safety of principal, liquidity and yield. The County attempts to match its investments to anticipated cash flow requirements. Unless matched to a specific future cash flow requirement, the County restricts its holdings to securities maturing within three years. The County diversifies its investment portfolio so that no more than 65 percent is invested in a single maturity type. As of June 30, 1998, the entire investment portfolio, which included the County's funds and the funds of districts for which it invests funds, at market value totaled $56,740,458. 51.7 percent was invested in the LGIP, 46.1 percent was in U.S. government securities, and 2.3 percent was in bankers acceptances. Labor Relations The County currently employs a total of 377 workers, 205 of whom are currently members of bargaining units. Current relations with all bargaining groups are considered good. Bargaining units which are represented by County employees and their current term expiration dates are shown as follows: Bargaining Unit Teamsters Local No. 589 UFCW Local No. 1001 Pension System Number of Employees Contract Expires 91 December 31, 2000 114 March 31, 2000 Substantially all full-time and qualifying part-time employees participate in one of the following statewide local government retirement systems administered by the Department of Retirement Systems, under cost- sharing, multiple -employer public employee retirement systems. Actuarial information is on a system -wide basis and is not considered pertinent to the County's financial statements. Contributions to the systems by both employee and employer are based upon gross wages covered by plan benefits. Both of the County's pension plans, the Law Enforcement Officers and Firefighters ("LEOFF") and the Public Employees Retirement System ("PERS"), include two plans. Participants who joined the system by September 30, 1977 are Plan I members. Those who joined thereafter are enrolled in Plan H. Retirement benefits are financed from both employee and employer contributions and investment earnings. Retirement benefits under both plans are vested after completion of five years of eligible service. PERS. The County's contribution of $526,772 (7.42 percent of covered payroll), for the year ending December 31, 1996, represents its full liability under the system, except that future rate may be adjusted to meet the system need. Z4 'w ` q c i3�1rJ 14 �0�� LEOFF. The County's contribution of $39,903 (6.00 percent LEOFF I and 5.06 percent LEOFF II of covered payroll), for the year ending December 31, 1996, represents its full liability under the system, except that future rates may be adjusted to meet the system needs. Risk Management The County has joined with 25 other counties to form the Washington Counties Risk Pool. The pool provides coverage of $10 million per occurrence with a per occurrence deductible of $10,000. The group coverage currently includes: bodily injury, personal injury, property damage, errors and omissions, and advertising injury. The current policy expires on October 1, 1999. The pool provides a claims made policy, which recognizes claims at the time presented, not the time incurred. Contingent Liabilities In the opinion of management, the County's insurance policies and/or self-insurance reserves are adequate to pay all known or pending claims. Demographic Information Jefferson County is located on the Olympic Peninsula in northwestern Washington State, approximately 55 miles northwest of Seattle. The County is 1,800 square miles in size and about 85 percent of the County is part of the Olympic National Park and State and national forest land. Historical population of the County and the City of Port Townsend, its principal city and county seat, is shown below. Population *Source: U.S. Census Source: Washington State Office of Financial Management Major Employers The economy of the County is based primarily on pulp and paper processing, government administration, retirement living, tourism, healthcare, and boat building. Employer Port Townsend Paper Co. Jefferson County Jefferson General Hospital Port Townsend School District Chimacum School District Quality Food Centers City of Port Townsend Falcon Marine Kah Tai Care Center Safeway Olympic Correction Center Port Ludlow Resort & Conference Center Port Hadlock Super Valu Jefferson County Major Employers Jefferson City of Year CoMV Port Townsend 1998 26,500 8,345 1997 26,300 8,330 1996 25,700 8,275 1995 25,100 8,165 1994 24,300 7,940 1990* 20,406 7,001 *Source: U.S. Census Source: Washington State Office of Financial Management Major Employers The economy of the County is based primarily on pulp and paper processing, government administration, retirement living, tourism, healthcare, and boat building. Employer Port Townsend Paper Co. Jefferson County Jefferson General Hospital Port Townsend School District Chimacum School District Quality Food Centers City of Port Townsend Falcon Marine Kah Tai Care Center Safeway Olympic Correction Center Port Ludlow Resort & Conference Center Port Hadlock Super Valu Jefferson County Major Employers Source: Economic Development Council ofJefferson County, July 1998 and individual employers, June 1997 15 No. of Product or Service Employees Pulp, kraft paper, paper bags 420 Government 377 Health care 294 Education 175 Education 167 Grocery Store 140 Government 121 Custom boat building 120 Convalescent home 110 Grocery store 107 Correction facility 100 Resort 99 Grocery store 85 Source: Economic Development Council ofJefferson County, July 1998 and individual employers, June 1997 15 Pulp and Paper The single largest employer in the County is Port Townsend Paper Company which operates a pulp and paper mill just outside of the Port Townsend city limits. Currently, 420 people are employed at the mill in the production of pulp, kraft paper and paper bags. The company completed a $30 million expansion of its plant in 1997 that will enable the company to use recycled cardboard boxes as well as wood chips to make its paper products. The company's products are transported to West Coast and foreign markets by ship, barge and truck. Industrial Development The Port of Port Townsend (the "Port") operates three industrial development areas. The Airport Industrial Park, which is six miles from the City of Port Townsend, includes 150 acres of land and the Jefferson County International Airport. The Port completed a $3.3 million project in 1990 relocating, expanding and resurfacing the airport runway which increased the aircraft capacity of the airport to 73. The Port is proposing a $4.1 million improvement project at the airport which would include infrastructure for a commercial/industrial park, a new terminal building, additional hangars, and other improvements. Development would be done over the next 15 years. The Quilcene Boat Haven is principally a small marina located in the southeast portion of the County. Coast Seafoods, which employs approximately 22 people, operates a shellfish hatchery and processing facility on 50 acres. The 40 -acre Port Townsend Industrial Park accommodates 30 businesses, primarily in the marines trades industry. Admiral Marine, which had been the largest employer at the site, recently relocated to nearby Port Angeles in Clallam County. Falcon Marine occupied Admiral Marine's former location in early 1997. The company, which manufacturers aluminum ferry boats, currently employs 50 people and plans to hire an additional 70 people. The Port recently developed an $8.5 million enhanced haul -out project, which included a new lift pier capable of lifting up to 300 ton ships and moving them to a land repair site. The new facilities were complete in late 1997. The Glen Cove Industrial Park is a 200 -acre complex just outside of the City of Port Townsend, which has about 20 tenants. The tenants are small in terms of number of employees and are concentrated primarily in high-tech industries. Port Townsend Boat Works is a firm which repairs and upgrades commercial fishing boats as well as government and quasi -government boats. Located in Port Townsend since 1977, the firm employs from 8- 20 people depending on the time of year. Thermionics Northwest manufactures devices used for handling samples in ultra-high vacuum chambers. The devices are sold primarily to research laboratories and universities throughout the country. Thermionics has been in Port Townsend for over eight years and currently employs 29 people. The company is currently considering building an industrial campus near its existing facility, consisting of three buildings totaling 27,000 square feet as well as an employee recreation area. This project would be developed over a three to five-year period. Retirement and Recreation One of the largest taxpayers private land owners in the County is Pope Resources, developer of Port Ludlow, a retirement and recreational community. The development plans include a total of 2,250 dwelling units, of which 1,774 lots have received final plat approval. The remaining 476 lots are on -hold, depending upon the outcome of a community planning effort. Currently, 1,016 homes have been completed, including 804 single-family homes and 212 condominium units. Sixty-four of the condominiums are rental units for the Port Ludlow Resort. The approximately 750 remaining approved lots have mostly been sold to individuals and are in various stages of development. Recreational facilities include a 300 -slip marine, a 27 - hole golf course, restaurant, convention center, swimming pools, and bicycle trails. The Port Ludlow Resort and Conference Center currently employs 99 people during the summer months and 75 to 80 year- round. 24 71 17 '�,'pl_ ra(��- 16 The Inn at Port Ludlow Bay, a 37 -room resort and restaurant, includes 12 individually owned single-family townhouses. The Inn currently employs 36 to 40 people. The Old Alcohol Lodge and Marina opened in 1993 and is located in Port Hadlock. The hotel has 28 rooms and a 164 -slip marina and employs 12 people. A restaurant, DelMonicos on South Bay, is adjacent to the hotel, but under separate management. Retail In recent years small businesses have accounted for a large part of the County's economic growth and diversification. There are over 2,300 small businesses in the County and over 250 new firms have started in each of the last five years. Small businesses are attracted to the County because of its proximity to large urban markets in the Puget Sound region, to the Seattle -Tacoma International Airport, to the Ports of Seattle and Tacoma, and to the Interstate 5 corridor, as well as its rural character with urban amenities and unique quality of life. The Port Hadlock SuperValu grocery store was recently acquired by the Quality Food Center ("QFC") and is currently being remodeled and expanded into a new QFC supermarket. The store currently employs approximately 85 people. Tourism Tourism is an important contributor to the economy of the Jefferson County. Tourism brings an estimated $17 million to the area annually, generates $3.5 million in local wages, and 336 jobs in the area. Located on the Strait of Juan de Fuca midway between the Puget Sound metropolitan area and British Columbia, Canada boating areas, Port Townsend is a popular destination for boaters. Port Townsend is served by the Washington State Ferry System, with passenger and vehicle ferry service to Whidbey Island. The Port operates a marina with a total of 520 slips for pleasure and commercial craft, 56 of those being at the Quilcene Marina. Point Hudson is another marina which leases property from the Port, providing transient moorage for up to 100 boats. Complete marine services are available at both facilities. There are a number of sailing regattas held in the area each year, which in the past have included Olympic Came trials and world championship class races. Fishing and other water sports also attract visitors to Port Townsend for the salt water activities and nearby freshwater rivers and lakes. There are a variety of outdoor recreation opportunities nearby including camping, hiking, hunting and skiing in the Olympic National Park, about half of which lies in Jefferson County. There are five urban park and recreation areas in Jefferson County, 46 rural parks and recreation areas and three golf courses. There are three former World War I army forts which are now State parks in the Port Townsend area. These parks include a variety of camping, boat launch, trail and moorage facilities. There are also city parks, a museum, historic sites and annual festivals, derbies and camps to attract visitors. The Fort Wordon Centennial Pavilion, a 1,600 -seat performing arts center, was completed in Port Townsend in 1995 at a cost of $2.2 million. The project was built with city, State, County, and private funding. Port Townsend was established in the late 1800s as a international trade and commerce center, and it was during that time period that a number of distinctive brick and stone structures and Victorian homes were built. Today, many of these homes have been refurbished or converted to bed and breakfast inns. There are semi-annual tours of historic homes (attracting between 2,000 and 6,000 people per tour), and both a walking and driving tour of historic structures in Port Townsend. In Jefferson County there are a total of 34 hotels/motels with 605 rooms ranging in capacity from 1-36 people. Harborside Inn opened in 1990 in Port Townsend and offers 63 motel rooms, a swimming pool, and space for conferences, business meetings, seminars and work shops. Education Washington State University operates a cooperative extension within the County. The distance learning program offers students the opportunity to complete a four-year degree in the social sciences. Other opportunities for higher education in the area include a continuing education center branch of Peninsula College, which has its main campus in Port Angeles. The college offers classes in a variety of vocational 17 311 training areas. The Northwest School of Wooden Boats in Port Townsend offers a program in boat building. Healthcare Health care facilities in Port Townsend include Jefferson General Hospital. The hospital, has about 294 employees, including part-time workers and is licensed for 43 beds. A 62,000 square -foot building was recently completed at the hospital. Kah Tai Care Center is a 94 -bed convalescent care center in Port Townsend. The center has 110 employees. Following are economic indicators for Jefferson County. Jefferson County Taxable Retail Sales 1997 $226,387,930 1996 213,214,843 1995 206,219, 373 1994 204,632,849 1993 186,690,599 Source. Washington State Department of Repcnue * Presented in 1996 dollars Source. U.S. Bureau of Economic Analysis Jefferson County Resident Civilian Labor Force and Employment and Nonagricultural Wage and Salary Employment Jefferson County Average Annual Personal and Per Capita Income* Personal Per Capita Year Income (000) Income 1996 $544,420 $21,349 1995 514,104 20,572 1994 491,968 20,453 1993 468,865 20,057 1992 443,570 19,720 * Presented in 1996 dollars Source. U.S. Bureau of Economic Analysis Jefferson County Resident Civilian Labor Force and Employment and Nonagricultural Wage and Salary Employment * Preliminary Source: Washington State Employment Security Department VOL 24 rar, 3119 18 Average Annual 1997* 1996 1995 1994 Civilian Labor Force 9,810 9,900 9,770 9,220 Employment 9,140 9,080 9,060 8,430 Unemployment 670 820 710 790 Percent of labor force 6.8% 8.3% 7.3% 8.6% Total Nonagricultural Wage and Salary Workers 7,270 7,230 6,930 6,790 Manufacturing 900 950 860 810 Mining and miscellaneous 150 140 120 160 Construction 400 390 370 380 Transportation and public utilities 200 160 140 110 Wholesale and retail trade 1,980 1,970 1,920 1,810 Finance, insurance and real estate 220 210 230 210 Services 1,600 1,610 1,540 1,520 Government 1,810 1,800 1,750 1,790 * Preliminary Source: Washington State Employment Security Department VOL 24 rar, 3119 18 Litigation There is no litigation pending questioning the validity of the Bonds or the power and authority of the County to issue the Bonds. Approval of Counsel Legal matters incident to the authorization, issuance and sale of Bonds by the County are subject to the approving legal opinion of Foster Pepper & Shefelman PLLC, Bond Counsel. A specimen of the opinion of Bond Counsel will be attached to the final Official Statement. Bond Counsel will be compensated only upon the issuance and sale of the Bonds. Bond Counsel has not been retained to review and has not reviewed this Official Statement for completeness or accuracy and will not offer an opinion concerning this Official Statement. Conflicts of Interest All or a portion of the fees of the Underwriter and Bond Counsel are contingent upon the issuance and sale of the Bonds. In addition, Bond Counsel from time to time serves as counsel to the Underwriter with respect to bonds issued by issuers other than the County. None of the County Commissioners or other officers of the County has any conflict of interest in the issuance of the Bonds that is prohibited by applicable law. Tax Exemption Exclusion from Gross Income. In the opinion of Bond Counsel, under existing federal law and assuming compliance by the County with applicable requirements of the Code, that must be satisfied subsequent to the issue date of the Bonds, interest on the Bonds is excluded from gross income of registered owners for federal income tax purposes under existing federal law and is not an item of tax preference for purposes of the alternative minimum tax applicable to individuals. Continuing Requirements. The County is required to comply with certain requirements of the Code after the date of issuance of the Bonds in order to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes, including, without limitation, requirements concerning the qualified use of Bond proceeds and the facilities financed or refinanced with Bond proceeds, limitations on investing gross proceeds of the Bonds in higher yielding investments in certain circumstances, and the requirement to comply with the arbitrage rebate requirements to the extent applicable to the Bonds. The County has covenanted in the Bond Resolution to comply with those requirements, but if the County fails to comply with those requirements, interest on the Bonds could become taxable retroactive to the date of issuance of the Bonds. Bond Counsel has not undertaken and does not undertake to monitor the County's compliance with such requirements. Corporate Alternative Minimum Tax. While interest on the Bonds also is not an item of tax preference for purposes of the alternative minimum tax applicable to corporations, under Section 55 of the Code, tax-exempt interest, including interest on the Bonds, received by corporations is taken into account in the computation of adjusted current earnings for purposes of the alternative minimum tax applicable to corporations (as defined for federal income tax purposes). Under the Code, alternative minimum taxable income of a corporation will be increased by 75 percent of the excess of the corporation's adjusted current earnings (including any tax-exempt interest) over the corporation's alternative minimum taxable income determined without regard to such increase. A corporation's alternative minimum taxable income, so computed, that is in excess of an exemption of $40,000, which exemption will be reduced (but not below zero) by 25 percent of the amount by which the corporation's alternative minimum taxable income exceeds $150,000, is then subject to a 20 percent minimum tax. 19 VOL 24. wr 3120 9 w For taxable years beginning after December 31, 1997, the corporate alternative minimum tax is repealed for a small business corporation that had average gross receipts of less than $5 million for the three-year period beginning after December 31, 1994, and such a small business corporation will continue to be exempt from the corporate alternative minimum tax so long as its average gross receipts do not exceed $7.5 million. Tax on Certain Passive Investment Income of S Corporations. Under Section 1375 of the Code, certain excess net passive investment income, including interest on the Bonds, received by an S corporation (a corporation treated as a partnership for most federal tax purposes) that has Subchapter C earnings and profits at the close of the taxable year may be subject to federal income taxation at the highest rate applicable to corporations if more than 25 percent of the gross receipts of such S corporation is passive investment income. Foreign Branch Profits Tax. Interest on the Bonds may be subject to the foreign branch profits tax imposed by Section 884 of the Code when the Bonds are owned by, and effectively connected with a trade or business of, a United States branch of a foreign corporation. Certain Other Federal Tax Consequences Bonds "QQualifted Tax Exempt OblBations" for Financial Institutions. Section 265 of the Code provides that 100 percent of any interest expense incurred by banks and other financial institutions for interest allocable to tax-exempt obligations acquired after August 7, 1986, will be disallowed as a tax deduction. However, if the tax-exempt obligations are obligations other than private activity bonds, are issued by a governmental unit that, together with all entities subordinate to it, does not reasonably anticipate issuing more than $10,000,000 of tax-exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) in the current calendar year, and are designated by the governmental unit as "qualified tax-exempt obligations," only 20 percent of any interest expense deduction allocable to those obligations will be disallowed. The County is a governmental unit that, together with all subordinate entities, reasonably anticipates issuing less than $10,000,000 of tax-exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) during the current calendar year, and has designated the Bonds as "qualified tax-exempt obligations" for purposes of the 80 percent financial institution interest expense deduction. Therefore, only 20 percent of the interest expense deduction of a financial institution allocable to the Bonds will be disallowed for federal income tax purposes. Reduction of Loss Reserve Deductions for Property and Casualty Insurance Companies. Under Section 832 of the Code, interest on the Bonds received by property and casualty insurance companies will reduce tax deductions for loss reserves otherwise available to such companies by an amount equal to 15 percent of tax- exempt interest received during the taxable year. Effect on Certain Social Security and Retirement Benefits. Section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take receipts or accruals of interest on the Bonds into account in determining gross income. Other Possible Federal Tax Consequences. Receipt of interest on the Bonds may have other federal tax consequences as to which prospective purchasers of the Bonds may wish to consult their own tax advisors. Underwriting The Bonds are being purchased by Seattle -Northwest Securities Corporation acting as the Underwriter. The purchase contract provides that the Underwriter will purchase all of the Bonds, if any are purchased, at a price of percent of the par value of the Bonds, plus accrued interest. The Bonds will be reoffered at an average price of percent of the par value of the Bonds. After the initial public offering, the public offering prices may be varied from time to time. t. 20 voi_ 24 r►c. 3121 Miscellaneous All forecasts, estimates and other statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not intended to be construed as a contract or agreement between the County and the purchasers or holders of any of the Bonds. The information contained in this Official Statement is presented for the guidance of prospective purchasers of the Bonds described therein. The information has been compiled from official sources and, while not guaranteed by the County, is believed to be correct. Ongoing Disclosure Undertaking Basic Undertaking to Provide Annual Financial Information and Notice of Maternal Events. To meet the conditions of paragraph (d)(2) of United States Securities and Exchange Commission ("SEC") Rule 15c2- 12 (the "Rule"), as required to qualify for the limited exemption from paragraph (b)(5) of the Rule, as applicable to a participating underwriter for the Bonds, the County will undertake (the "Undertaking") for the benefit of holders of the Bonds to provide or cause to be provided, either directly or through a designated agent, to any person upon request, or annually to a state information depository, if any, established in the State of Washington (the "SID"), annual financial information and operating data of the type included to this Official Statement for the Bonds as generally described below ("annual financial information") that is customarily prepared by the County and otherwise publicly available; and to each nationally recognized municipal securities information repository designated by the SEC in accordance with the Rule ("NRMSIR") or the Municipal Securities Rulemaking Board ("MSRB" ), and to the SID, timely notice of the occurrence of any of the following events with respect to the Bonds, if material: (i) principal and interest payment delinquencies; (ii) non-payment related defaults; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions or events affecting the tax-exempt status of the Bonds; (vii) modifications to rights of holders of the Bonds; (viii) Bond calls (other than scheduled mandatory redemptions of Term Bonds); (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the Bonds; and (xi) rating changes. Type of Annual Financial Information Undertaken to be Provided. The annual financial information that the County undertakes to provide will consist of (i) annual financial statements, which may not be audited, except that if and when audited financial statements are otherwise prepared and available to the County they will be provided; (ii) a statement of authorized, issued and outstanding general obligation debt of the County; (iii) the assessed value of the property within the County subject to ad valorem taxation; and (iv) ad valorem tax levy rates and amounts and percentage of taxes collected. The annual financial information may be requested from the Chairman of the Board of County Commissioners at 1820 Jefferson Street, P.O. Box 1220, Port Townsend, Washington, 98368. Amendment of Undertaking. The Undertaking is subject to amendment after the primary offering of the Bonds without the consent of any holder of any Bond, or any broker, dealer, municipal securities dealer, participating underwriter, rating agency, NRMSIR, the SID or the MSRB, under the circumstances and in the manner permitted by the Rule. The County will give notice to each NRMSIR or the MSRB, and the SID, of the substance (or provide a copy) of any amendment to the Undertaking and a brief statement of the reasons for the amendment. If the amendment changes the type of annual financial information to be provided, the notice also will include a narrative explanation of the effect of that change on the type of information to be provided. Termination of Undertaking. The County's obligations under the Undertaking will terminate upon the legal defeasance of all of the Bonds. In addition, the County's obligations under the Undertaking will terminate if those provisions of the Rule which require the County to comply with the Undertaking become legally inapplicable in respect of the Bonds for any reason, as confirmed by an opinion of nationally recognized LVOIL 24 3122 21 bond counsel or other counsel familiar with federal securities laws delivered to the County, and the County provides timely notice of such termination to each NRMSIR or the MSRB and the SID. Remedy for Failure to Comply with Undertaking. If the County or any other obligated person fails to comply with the Undertaking, the County will proceed with due diligence to cause such noncompliance to be corrected as soon as practicable after the County learns of that failure. No failure by the County or other obligated person to comply with the Undertaking will constitute a default in respect of the Bonds. The sole remedy of any holder of a Bond will be to take such actions as that holder deems necessary, including seeking an order of specific performance from an appropriate court, to compel the County or other obligated person to comply with the Undertaking. Book -Entry Only System The following information has been provided by DTC. The County makes no representation as to the accuracy or completeness thereof. Beneficial Owners should confirm the following with DTC or the Participants (as hereinafter defined). DTC will act as securities depository for the Bonds. The Bonds will be issued as fully registered Bonds, registered in the name of Cede & Co. (DTC's partnership nominee). One fully -registered security certificate will be issued for the Bonds, in the aggregate principal amount of such issue, and will be deposited with DTC. DTC is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants (the "Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book -entry changes in Participants' accounts, thereby eliminating the need of physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond (`Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book -entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. 01 11Y0- `t ��: `�3 22 r.. , Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices will be sent to Cede & Co. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in Bonds to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the County as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Bonds will be made to DTC. DTC's practice is to credit Direct Participant's accounts on a payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Fiscal Agent, or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the County or the Fiscal Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depositorywith respect to the Bonds at any time by giving reasonable notice to the County or the Fiscal Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered. The County may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources the County believes to be reliable, but the County takes no responsibility for the accuracy thereof. DTC management is aware that some computer applications, systems, and the like for processing data ("Systems") that are dependent upon calendar dates, including dates before, on, and after January 1, 2000, may encounter "Year 2000 problems." DTC has informed its Participants and other members of the financial community (the "Industry") that is has developed and is implementing a program so that its Systems, as the same relate to the timely payment of distributions (including principal and income payments) to securityholders, book -entry deliveries, and settlement of trades within DTC ("DTC Services"), continue to function appropriately. This program includes a technical assessment and remediation plan, each of which is complete. Additionally, DTC's plan includes a testing phase, which is expected to be completed within appropriate time frames. However, DTC's ability to perform properly its services is also dependent upon other parties, including but not limited to issuers and their agents, as well as third party vendors from whom DTC licenses software and hardware, and third party vendors on whom DTC relies for information or the provision of services, including telecommunication and electrical utility service providers, among others. DTC has informed the Industry that it is contacting (and will continue to contact) third party vendors from whom DTC acquires services to: (i) impress upon them the importance of such services being Year 2000 compliant; and (ii) determine the extent of their efforts for Year 2000 remediation (and, as appropriate, testing) of their services. In addition, DTC is in the process of developing such contingency plans as it deems appropriate. 23 2 Face �3`�4 According to DTC, the foregoing information with respect to DTC has been provided to the Industry for informational purposes only and is not intended to serve as a representation, warranty, or contract modification of any kind. Official Statement The County in the Bond Resolution will deem final this Preliminary Official Statement as of its date for the purpose of Securities and Exchange Commission Rule 15c2-12. VOL 240- 3125 24 F O STER PEPPER & S H E F E L M A N PLL C ATTORNEYS AT LAW November 25, 1998 VIA FEDERAL EXPRESS Ms. Lorna Delaney Clerk of the Board of County Commissioners Jefferson County 1820 Jefferson Street Port Townsend, WA 98368 Re: $2,260,000 Limited Tax General Obligation Refunding Bonds, 1998 Dear Lorna: The following documents are being sent in connection with the December 2 delivery of the above bonds to Seattle -Northwest Securities Corporation. The following documents should be signed and returned to us so that we receive them by Tuesday, December 1, for review prior to closing: ,X Signature Identification Certificate. All copies of this certificate should be signed and dated by you in the presence of a notary. A bond specimen is enclosed for your information relating to the signing of the certificate. 2: IRS Form 8038-G. This form should be signed by an officer of the Jefferson County Treasurer's office and should be signed in the space indicated. We will file it with the Internal Revenue Service on behalf of the County. 3 Certificate of Mailing. One signed and notarized copy of the Certificate of Manual Signature signed by Mr. Huntingford should be mailed to the Secretary of State, P.O. Box 40220, Olympia, Washington 98504-0220, Attn: Certificate of Manual Signature. The other signed copy of the Certificate should be attached to the enclosed Certificate of Mailing. That Certificate of Mailing should be completed and signed by the person who actually mailed the copy to Olympia and returned to us. 50059115.01 � I'1101-2 mv_ L�(�, Direct Phone (206)447-8968 Direct Facsimile (206) 749-2025 E -Mail voorl@foster.com IIII THIRD AVENUE Suite 4400 SEATTLE Washington 98101-3z99 Telephone (zo6)447-4400 Facsimile (z06)447-9700 Website WWW. F O S T E R. CO M ANCHORAGE Alaska BELLEVUE Washington PORTLAND Oregon SEATTLE Washington Ms. Lorna Delaney November 25, 1998 Page 2 4. Receipt for Payment. On the morning of closing and after confirmation that the County has received its funds as indicated, please ask an officer of the Treasurer's office to sign and send the receipt to me by facsimile at the number referenced on page 1. 5. Debt Capacity Certificate. Please forward this certificate to Cathy Hough for completion and signature. A copy has already been provided to her by facsimile today. Some of the foregoing documents have been dated as of closing and should not be changed regardless of when they are signed. I appreciate you obtaining Mr. Huntingford's signature on the Tax Exemption and Non - Arbitrage Certificate, Refunding Trust Agreement, Certificate of Manual Signature and Closing Certificate. We will send you copies of the Refunding Trust Agreement and Tax Exemption Certificate in their entirety by Monday, November 30. We will also need returned to our office in preparation for the closing the certified excerpts of the minutes of the November 9, 1998, Board meeting reflecting the adoption of Resolution No. 97-98. Please call if you have any questions or if you believe we might assist in any way. It has been a pleasure to serve the County on this financing and we look forward to a successful closing on December 2. With best wishes for the Thanksgiving holiday, Sincerely, FOSTE PEPPER & SHEFELMAN PLLC Lee oor ees Enclosures cc: Judi Morris Cathy Hough Jean Baker Cheryl McDonald Scott Madden 50059115.01.vo1- ` Y„.,-: 3i2 ■ I, qualified and acting CERTIFICATE OF MAILING Leslie R. Locke (PRINT OR TYPE NAME) Executive Secretary (POSITION) the duly chosen of Jefferson County, Washington, DO HEREBY CERTIFY that on the 30th day of November , 1998, I mailed to the Secretary of State of the State of Washington, postage prepaid, certificates of manual signature in the form attached hereto executed by the following officials: Name Glen Huntingford Dated November 30, 1998 50058765.01 Position Chairman of the Board of County Commissioners (SIG AT -. ) 3128 24 ut- SIGNATURE IDENTIFICATION CERTIFICATE STATE OF WASHINGTON ) ) ss. COUNTY OF JEFFERSON ) I, LORiNA DELANEY, certify that I am the Clerk of the Board of County Commissioners of Jefferson County, Washington (the "County"), and have been at all times since January, 1989, and that GLEN HUNTINGFORD is the Chairman of the Board of County Commissioners of the County and has been at all times since January, 1998. I further certify that the $2,260,000 par value Limited Tax General Obligation Refunding Bonds, 1998 (the 'Bonds"), of the County, dated December 1, 1998, bear my facsimile signature as Clerk of the Board of County Commissioners of the County and the facsimile signature of Glen Huntingford as Chairman of the Board of County Commissioners of the County. DATED this dayof AAA 1,0 J17'1998. LO A DELANEY, Clerk of the BoardCounty Commissioners SUBSCRIBED AND SWORN TO before me this ,amu day of , 1998. Signature of Notary) �4rn %? _ 6ez,-);2. (Legi ly Print or Stamp Name of Notary) Notary publ' in and for the State of Washington, residing at �pr `� k i �l My appointment expires (3 -� e2/ (I 50058765.01 VOL 2 4 �W 3129 Form 8038-G Information Return for Tax -Exempt Governmental Obligations iRev. May 1335) N- Under Internal Revenue code section 149(x) OM3 No. T515- ?20 :.CDdf'm✓.f: .: "1. 7ria9ll'r ►Sas separate instructions. - '7'_J --vr - ;., , Nate: Use Form 3033 -Cc if rAe slue Frce Sunder 3 /GO.000.; Part I Reporting Authority 1 ssuer s If Amended Re name turn, check hers ► 2 Issuer's employer identification numb, JEFFERSON COGN=Y, WASHINGTON 91 6001322 3 Numcer and st: eet .or P 0. :cz f .r.ad ceiivered to street seeress) Room'surte / 4 Recor, numcer 1820 Jefferson Street - 5 Ciry. :own, or pest office, state. and Z:P ice G-.998 6 Cate of ssue Port Townsend, `S-A 98368 12/2/98 7 Name of issue' 3 CUStP numcer art V 10 11 12 13 14 15 16 17 18 Part Li:"nited Tax General Obligation Refunding Bonds, 1998 Ii Type of Issue (check applicable boxes) and enter the issue price) Education (attach sci eduie - see instructions) 9 Health and hospital +attach sc-edule - see instructions) 0 Transportation . . . . . . . . . . . . . . . . . . . . • • Public safety .........................i 11 1 12— Environment (including •sews^ye bonds) 13 i— Housing ............................'.............. 14 Utilities . . . . . . . . . ... . . . . . . • . . . .. . • ...1.5 !XX Other. Describe •(see irutructions: ► Advance • • Refu�Jl 16 If obligations are tax or other reverue anticipation bonds, check boxIf obligations are in the form of a lease or installment sale, check box III Description of Obligations R (4) (b) MaturN _ate r.;error rata . 19 Final maturity 12/1/1 2 4.40 % 20 Entre Issue t"{><�<#�s<>`�'><>�:��:�'��<=�<��`'�''-`•'�'$�vtr' �?•..., Part IV Use o Proceeds ot Bond Issue (including (e) Issue Anes 0 0 0 2,258,025 2 258 025 un erwrtter (d) (el lfl Stated redemoDorl (ql Weight Yield Vet n;erest Drip at mattarty Stage maturity q 105 000 :.:::.:::.:; :::M 2 260000 8.51 years 1 4.202 '6 1 4.241 s iscount 21 Proceeds used for accrued interest 22 .• • 21 Issue price of entire issue (enter anountfromline 20, column •(c)) 257 23 22 2,258,025 Proceeds used for bond issuance costs (including underwriters' discount) 23 24 Proceeds used for credit enhancement 24 25 Proceeds allocated to reasonably required • reserve or replacement fund • 25 26 Proceeds used to currently refund cror issues 26 0 27 Proceeds used to advance refund =nor issues 27 28 • • • • • • • `28''` Total (add lines 23 through 27) 29 • • •• Nonrefunding proceeds of the issue (subtract line 28 from line 22 and enter amount.here) . . . . . . 29 Part V Description of Refunded Bonds (Complete this part only for refunding bonds.) 30 Enter the remaining weighted average maturity of the bonds to be currently refunded ► 31 _ N/A Enter the remaining weighted average maturity of the bonds to be advance refunded ► year Enter the last date on which the refunded bonds will be called • • • • • • • year 33 Enter the dates) the refunded bonds --e-re issued ► • • • • • • • • • • • • • • • • • • • ► Part VI Miscellaneous sus Enter the amount of the state volume cap allocated to the issue under section 14(b)(5) 34 0 35 Enter the amount of the bonds designated by the issuer under section 265(bH3X8)(i)(III) (small issuer exception) 35 2 260, 000 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (see instructions) 36a 0 b Enter the final maturity date of the guaranteed investment contract 11111. .00 37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units •37a 0 b If this issue is a loan made from the proceeds of another tax-exempt issue, check box ►� and enter • the name of the issuer ► and the date of the issue 0- 38 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box 10- 39 39 If the issuer has identified a hedge, check box ► Under penalties of perjury, I declare tut I have examined this return and accompanying schedules and statements, and to the hest of my knowledge and belief, they are true, correct, and complete. Please Sign Here , re of issuer s authorized rep(94entatiye For Paperwork Reduction Act Notice, see page 1 of the 3W8537 1.000 VOL 24 . *3x.30 2/2/98 Office of the County Treasurei Date 'Type or print name and title ns. JSA Form 8038-G (Rey. 5-9` pro �4'4gON coG 9S��N�sO 1820 Jefferson Street F.O. Bos 1220 Port Townsend, WA 98368 Daniel Harpole, District 1 Glen Huntingford, District 2 Richard Wojt, District 3 November 30, 1998 CERTIFICATE OF THE CLERK OF THE BOARD I, Lorna Delaney, do hereby certify that I am the duly chosen and qualified, Clerk of the County Board of Commissioners of Jefferson County Washington, and keeper of the records of the County and I hereby further certify that the attached is a copy of the following official record of Jefferson County: Commissioners Meeting Minutes of November 9, 1998 IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the County. SEAL: c�NTY CDs► >% 4 4 Lorna Delaney, Clerk of Board of Com issioners, Jefferson County, Washington Phone (360)385-9100 / 1-800-831-2678 Fax (360)385-9382 jeffbocc@co.jefferson.wa.us 1112598 13.36 FAX 206 447 9700 F P & S CLOSING {CERTIFICATE a 002 1, GLEN HUN'TINGFORD, certify that I am the duly elected and acting Chairman of the Board of County Commissioners of Jefferson County, Washington (the "County"), authorized to execute and deliver this certificate and further certify on behalf of the County as follows: 1. This certificate is delivered in connection with the issuance of the $2,260,000 par value Limited Tax General Obligation Refunding Bonds, 1998 (the "Bonds"), of the County. 2. To my knowledge and belief, the Official Statement dated November 9, 1998 (the "Official Statement"), relating to the Bonds, is accurate and complete, and neither the Oficial Statement nor any information furnished by the County supplementary thereto contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading in any material respect. Since the date of the Official Statement and any such supplementary information no event occurred which should have been set forth in an amendment or supplement to the Official Statement that has not been set forth in such. supplementary information. 3. No litigation of any nature is now pending or, to my knowledge, threatened, seeking to restrain or enjoin the issuance and delivery of the Bonds or the levy and collection of taxes pledged to pay the principal of and interest on the Bonds, or in any manner questioning the proceedings and authority under which the Bonds are issued or the validity of the Bonds thereunder; neither the corporate existence or boundaries of the County .nor the title of the present officers to their respective offices is being contested; and no authority or proceeding for the issuance of the Bonds has been repealed, revoked or rescinded 4. Resolution No. 97-98 of the County, the resolution authorizing the issuance and sale of the Bonds, has not been modified or repealed. 5. The representations of the County contained in the Purchase Contract for the Bonds dated November 9, 1998, between the County and Seattle -Northwest Securities Corporation were true and correct when made and are tnie and correct as of this date. DATED this 2nd day of December, 1998. "0507615.91 :>,�o� 2 F- 3132 f 41/25/98 13:37 FAX 206 447 9700 F P & S 003 financial advantage by investing any portion of the gross proceeds of the Bonds over any period of time, and (ii) overburdening the tax-exempt bond market as a result of issuing more Bonds, issuing the Bonds earlier, or allowing the Bonds to remain outstanding longer than is otherwise reasonably necessary to finance the costs of the Refunding. 8.4 No t to Earn Im ermiasibie bitra a Profit. The County will not take any intentional action to earn any impermissible arbitrage profit from the investment of gross proceeds of the Bonds. 9, Bonds Meet Other Bgq� lircmeats for Tax Exe pt�.�on. 9.1. Bonds in Registered Form. The Bonds are issued only in registered form. 9.2 No yederal Guaranty. Except as otherwise permitted by the Code, payment of the principal of or interest on the Bonds is not guaranteed in whole or in part by the United States or any agency or instrumentality thereof., 9.3 Information Return to Be Filed. The County will cause a Form 8038-G Information Return respecting the Bonds to be timely filed with the Internal Revenue Service. 9.4 Bonds Not fledge Bonds. On the date of issue of each prior issue (or, if any prior issue also was a refunding issue, on the date of issue of the original neve money obligations being refunded with proceeds of the Bonds --the "original new money obligations"), the County reasonably expected that (i) at least 85% of the spendable proceeds of the those prior issues or original new money obligations would be used to carry out the governmental purposes of those prior issues or original new money obligations within the 3 -year period beginning on their respective dates of issue, and (ii) not more than 50% of the proceeds of each issue of) prior issues or original. new money obligations would be invested in nonpurpose investments having a substantially guaranteed yield for 4 years or more. 10. Bonds Tax -Exempt and Not Arbitrage Bonds. Based on the foregoing facts, estimates, and circumstances in eadstence on the issue date and the reasonable expectations of the County as to future events respecting the Bonds, the Bonds are governmental obligations the interest on which is excluded from gross income for federal income tax purposes under Section 103 of the Code, and it is not expected that proceeds of the Bonds will be used in any manner that would cause the Bonds to be arbitrage bonds. DATED December 2, 1998. JEFFERSON COUNTY, WASH 1 NGTON By Glen Huntingford, Chair of the Board of County Cornmissio ers -7- 50034182A1 VOL 24 wz 3133 11`25/98 13:38 FAX 206 447 9700 F P & S —.------ 2004 CERTIFICATE OF MANUAL SIGNATURE X STATE OF WASHINGTON ) ) ss. COUNTY OF JEFFERSON ) I, the undersigned affiant, being first duly sworn, on oath depose and say: My name is Glen Huntingford I have been duly chosen and am qualified and acting as Chairman of the Board of County Commissioners of Jefferson County, Washington. The signature appearing above is my true manual signature. This affidavit is made to comply with chapter 39.62 RCW. X SLBSCRIBED AND SWORN TO before me this day of 1998 (Signature of �iulars} (Ltgib�y pent or Stamp 1Vantc of "�n4u y} Notarypubli in and for the State of Was on, residing at S My appointment expires VOL 24 w, 3134 L1/25/&6 13;38 FAX 200 447 9700 F P & S jeC -Pa �LOTI 16, q ntMarts. This Agreement may be exe�;uted in counte, parts. .qu zoo5 ]ENTWrrNESS WHEREOF, the parties he've executed and deUvered this Refunding Trust Agreement pursuant W due and proper authorization, all as of *.e date and year first above written. jF ,FF,E,RSON COUNTY, WASWNGTON By SOOM40,%, (.,HAc.;F-, MAN7rLkT'rAN TRUST COINTPANNY, NATIONAL ASSOCIATION, as Refunding Trustee B,v JEFFERSON COUNTY, WASHINGTON COUNTY DEBT CAPACITY Value of taxable property in Jefferson County: ASSETS: Cash in General Obligation Bond Fund(s): Uncollected Taxes: G. O. Bond Fund(s) 1998 1997 1996 1995 1994 1993 Total General Fund 1997 1996 1995 1994 1993 Total TOTAL ASSETS Outstanding General Obligation Bonds Voted Bonds Nonvoted Bonds Total 50052559.01 61.32 N/A N/A N/A N/A N/A N/A 683,737.63 47,762.82 28,924.97 6,238.30 3,283.27 769,946.99 N/A 2.639,429.74 2,639,429.74 -VOL 24 r,Au •,3i 36 -1- Mgme •� ��, 770.008.31 Outstanding General Fund Warrants (Interest Bearing) Other Outstanding Warrants Redeemable From Future Taxes or Proceeds of General Obligation Bonds Outstanding Executory Conditional Sales Contracts Outstanding Lease -Purchase Contracts Miscellaneous Liabilities, if any, including without limitation contracts obligating the County to incur or not to incur indebtedness in the future. Description: TOTAL LIABILITIES N/A N/A N/A N/A 2,639,429.74 I certify that the above data is taken from the official records of Jefferson County and that it is, to the best of my knowledge and the information available to me, true and complete as of October 31, ,1998. ce of the County Treasurer Jefferson County, Washington voi- 24 -2- 50052559.01