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HomeMy WebLinkAbout2026-048 - Res. Road Improvement District 2024-01 Bond of the County for Shetland Road RID RESOLUTION NO. a�-O4� In the Matter of Mason County, ) A RESOLUTION relating to Road Washington Road Improvement ) Improvement District No. 2024-0 1;providing District(RID)No. 2024-01 Shetland Road, ) for the issuance of a Road Improvement Located in Sections 16 and 21, ) District No. 2024-01 Bond of the County; Township 21 North,Range 3 West, ) fixing the amount, form, date, interest rate, W.M.,Mason County, Washington ) and maturity date of such bond;providing for the sale and delivery thereof to Cashmere Valley Bank; creating a Road Improvement Guaranty Fund; updating the interest rate on unpaid assessment installments; and providing for other related matters. THE BOARD OF COUNTY COMMISSIONERS OF MASON COUNTY, WASHINGTON,DOES RESOLVE AS FOLLOWS: Section 1. Findings and Determinations. The Board of County Commissioners (the "Board") of Mason County Washington(the"County"),hereby makes the following findings and determinations: (a) The County is authorized and empowered to create road improvement districts and to conduct proceedings pursuant to chapter 36.88 RCW. (b) The Board adopted Resolution No. 2024-046 on August 13,2024,which resolution established Shetland Road Improvement District No. 2024-01 ("RID No. 2024-01") and ordered improvements to a county road commonly known as Shetland Road. (c) The Board,by Resolution No. 2026-023, adopted on June 9, 2026, duly confirmed the assessment roll for RID No. 2024-01 in the amount of $227,845.00 to be collected from property owners. During the 10 days following the adoption of Resolution No. 2026-023, one property owner filed an appeal challenging such owner's assessment levied on the owner's property,which challenge has been settled; and (d) Pursuant to Resolution No. 2026-023,the County Treasurer caused notice that the assessment roll was in the Treasurer's hands for collection to be (i)published in the official newspaper of the County on August 27, 2026 and September 3, 2026, and (ii) mailed on August 27,2026,to the owners and reputed owners of property within RID No.2024-01.The total amount of assessments paid in cash during the 30-day prepayment period was $98,344.75. (e) Resolution No. 2026-023 specifies that assessments in RID No. 2024-01 are payable in five equal annual installments, together with -interest thereon, commencing on December 1, 2027. Resolution No. 2026-023 also stated that interest on assessment installments for RID No. 2024-01 were to be at the rate of 3.9%per annum. -1- FG: 110689551.3 (f) The County is authorized to issue bonds for county road improvement districts, pursuant to chapters 36.88 and 39.46 RCW. The Board now desires to authorize the sale, issuance and delivery of a bond for RID No. 2024-01, and the County has received an offer from Cashmere Valley Bank of Cashmere, Washington (the "Purchaser"), to purchase the bond. Such offer is subject to the terms and conditions of the commitment letter of the Purchaser sent to the County on September 23,2026 (the"Commitment Letter"). (g) The Commitment Letter states that the interest rate on the bond for RID No. 2024- 01 would be 3.93%per annum,and it is in the best interest of the County to amend the interest rate on unpaid assessments stated in Resolution No. 2026-023,to 3.93%. Section 2. Authorization and Description of the Bond. The total amount of the assessment roll in RID No. 2024-01 was $227,845.00, which was lowered to $217,179.92 due to the actual costs of the improvements. The 30-day period for making cash payments of assessments without interest in RID No. 2024-01 expired on September 26, 2026, and the total amount of assessments paid in cash was $98,344.75, leaving a balance of assessments unpaid on the assessment roll in the sum of$118,835.17. A Road Improvement District No. 2024-01 Bond (the "Bond") shall, therefore, be issued in the total principal sum of$118,835.17. The Bond shall be dated its date of initial delivery to the Purchaser,shall mature on December 1,2033 (the"Maturity Date"),and shall be numbered R-1, in the manner and with any additional designation as the Bond Registrar(defined herein) deems necessary for the purpose of identification. The Bond shall bear interest at the rate of 3.93%per annum calculated on the basis of a 360-day year consisting of 12 30-day months, payable annually on December 1 of each year beginning December 1, 2027 (the "interest payment date"). Section 3. Failure to Redeem Bond. If the Bond is not redeemed when properly presented at its Maturity Date, the County shall be obligated to pay interest on the Bond at the same rate provided from and after its maturity until the Bond, both principal and interest, is paid in full or until sufficient money for its payment in full is on deposit in the Bond Fund and the Bond has been called for payment by giving notice of that call to the Purchaser. Section 4. Creation of Bond Fund and Road Improvement Guaranty Fund;Payment of Bond. The Road Improvement Fund, District No. 2024-01 (the "Bond Fund") is created and established in the office of the County Treasurer. The Road Improvement Guaranty Fund (the "Road Guaranty Fund") of the County is created and established in the office of the County Treasurer. A portion of the proceeds of the Bond in the amount of$5,941.76 will be deposited into the Road Guaranty Fund at the time of issuance of the Bond. The Bond shall be payable in lawful money of the United States of America and both principal of and interest on the Bond shall be payable solely out of the Bond Fund and the Road Guaranty Fund. Interest on the Bond shall be paid by check or draft mailed to the Purchaser on each interest payment date at the address(es) appearing on the Bond Register (defined herein) on the 15th day of the month preceding the interest payment date or by electronic transfer on the payment date to an account designated by the Purchaser. The County will make payments of principal annually on the interest payment date from the Bond Fund from the assessments collected each year during the -2- FU: 110689551.3 five year assessment period that are in excess of the amount required to make the required annual interest payments. The estimated annual principal and interest payments are shown in Exhibit A attached to this resolution. Section 5. Pledge of Assessment Payments. Assessments collected in RID No. 2024- 01, together with interest and penalties, if any, are pledged to the payment of the Bond, which is payable solely out of the Bond Fund and the Road Guaranty Fund of the County in the manner provided by law. The County shall deposit such assessments, interest and penalties into the Bond Fund upon receipt;provided,the County may use a portion of the interest collected on account of such assessments in the manner specified in Section 13 of this resolution.The Bond is not a general obligation of the County. Section 6. Prepayment and Redemption Provisions. The County reserves the right and option to prepay the Bond, in whole or in part, at any time without notice to the Purchaser. There shall be no fee for prepayment. The Bond may be prepaid prior to its final maturity at any time to be applied to the earliest interest payment date, at par plus accrued interest to the date of prepayment. Any prepayment would first satisfy accrued interest with the balance reducing the principal of the earliest interest payment date of the Bond then outstanding. Section 7. Bond Registrar;Registration and Transfer of the Bond. (a) The County Treasurer is appointed as the County's bond registrar, authenticating agent, transfer agent and exchange agent with respect to the Bond (the "Bond Registrar"). The Bond Registrar is authorized, on behalf of the County, to authenticate and deliver the Bond in accordance with the provisions of the Bond and this resolution, to serve as the County's paying agent for the Bond and to carry out all of the Bond Registrar's powers and duties under this resolution. The Bond Registrar shall be responsible for its representations contained in the Bond Registrar's Certificate of Authentication on the Bond. (b) The Bond Registrar shall keep, or cause to be kept sufficient books for the registration and transfer of the Bond (the "Bond Register"), which books shall be open to inspection by the County at all times. The County and the Bond Registrar may deem and treat the owner of the Bond registered on the Bond Register(the"Registered Owner")as the absolute owner of the Bond for the purpose of receiving payment of principal and interest, and for all other purposes, and neither the County nor the Bond Registrar shall be affected by any notice to the contrary other than proper notice of assignment or transfer of the ownership of the Bond on the Bond Register. (c) The Bond may be transferred only in whole and if endorsed in the manner provided thereon and surrendered to the Bond Registrar.No Registered Owner shall transfer the Bond to a subsequent investor unless that Registered Owner causes such investor to receive such information regarding the County, RID No. 2024-01, the Bond and the security for the payment of the Bond as is necessary to comply with Rule l 0b-5 of the Securities and Exchange Commission.Any such transfer shall be without cost to the Registered Owner or transferee (other than the costs incurred by the Registered Owner or transferee in preparing and delivering such transfer certificate) and shall be noted in the Bond Register.The Bond Registrar shall not be obligated to transfer the Bond during the 15 days preceding any interest payment date or prepayment date. -3- FG: 110689551.3 I{i Section 8. Form and Execution of Bond. The Bond shall be prepared in a form consistent with the provisions of this resolution and state law, shall be signed by the Chair of the Board and the County Auditor, 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. The Bond shall bear a Certificate of Authentication in the following form,manually signed by the Bond Registrar,and only if so executed shall the Bond be valid or obligatory for any purpose or entitled to the benefits of this resolution: CERTIFICATE OF AUTHENTICATION • This Bond is the fully registered Mason County, Washington, Road Improvement District No. 2024-01 Bond described in the Bond Resolution. By 4L& and egistrar The authorized signing of the 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 Bond ceases to be an officer of the County authorized to sign bonds before the Bond bearing such officer's facsimile signature is authenticated or delivered by the Bond Registrar or issued by the County,that Bond nevertheless may be authenticated,issued and delivered and,when authenticated,issued and delivered,shall be as-binding-on-tlie-Count as-though-that-per-son-had-continued-to-be-an-of cer_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 such officer did not hold the required office on the date of issuance of the Bond. Section 9. Preservation of Tax Exemption for Interest on Bond. The County covenants that it will take all actions necessary to prevent interest on the Bond 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 Bond or other funds of the County treated as proceeds of the Bond at any time during the term of the Bond which will cause interest on the Bond to be included in gross income for federal income tax purposes. Section 10. Designation of Bond as "Qualified Tax Exempt Obligation." The County has determined and certifies that(a)the Bond is not a"private activity bond"within the meaning of Section 141 of the Internal Revenue Code of 1986,as amended(the"Code"); (b)the reasonably anticipated amount of tax exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) which the County and any entity 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) will issue during the calendar year in which the Bond is issued will not • exceed$10,000,000; and(c)the amount of tax exempt obligations,including the Bond,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 Bond is issued does not exceed $10,000,000. The -4- FG: 110689551.3 County designates the Bond as a "qualified tax exempt obligation" for the purposes of Section 265(b)(3) of the Code. Section 11. Use of Bond Proceeds. The accrued interest on the Bond, if any, received from the Purchaser shall be deposited into the Bond Fund and be used to pay debt service on the Bond on the first interest payment date. The principal proceeds of the Bond shall be used to finance and/or reimburse the costs of making improvements in RID No. 2024-01, to fund the Road Guaranty Fund and to pay the costs of issuance of the Bond. Until needed to pay those costs, the County may invest principal proceeds temporarily in any legal investment, and the investment earnings may be retained in the Bond Fund and be spent for the purposes of that fund. Section 12. Acceptance of Commitment Letter. The Purchaser has presented a commitment to accept delivery of the Bond under the terms and conditions of its Commitment Letter on file with the County Treasurer and is incorporated herein by this reference. The County Board finds that accepting a formal commitment based on terms consistent with the Commitment Letter is in the County's best interest and therefore accepts the offer contained therein and authorizes its execution by County officials. The Bond will be printed at County expense and will be delivered to the Purchaser in accordance with the Commitment Letter,with the approving legal opinion of Foster Garvey P.C., municipal bond counsel of Seattle, Washington,regarding the Bond. The proper County officials are authorized and directed to do everything necessary for the prompt delivery of the Bond to the Purchaser, and for the proper application and use of the proceeds of the sale thereof. Section 13. Fixing Interest Rate on Assessments. The interest rate on the installments payments of the special assessments in RID No. 2024-01 is fixed at the rate of 3.93%per annum, which amends the interest rate set forth in Resolution No. 2026-023.The fees charged against RID No. 2024-01 by the County Treasurer pursuant to RCW 36.29.180 shall be paid from the interest received on assessments (but only to the extent such interest relates to the difference between the County's net interest cost and the interest rate fixed for the assessments in RID No. 2024-01). Delinquent assessments shall bear interest at the rate of 12%per annum as provided in Resolution No. 2026-023. Section 14. Reporting Requirements. While the Bond is outstanding, the County shall submit to the Purchaser its audited annual financial reports within 30 days after receipt of such annual financial report from the Washington State Auditor. The County may, from time to time, be asked to confirm the balance of the Road Guaranty Fund or disclose the amount of assessments outstanding, the amount of assessments paid to date, and any prepaid assessments of the year. Section 15. Supplemental and Amendatory Resolutions. The County may supplement or amend this resolution for any one or more of the following purposes without requiring the consent of the Registered Owner of the Bond: (a) To add covenants and agreements that do not adversely affect the interests of the Registered Owner of the Bond, or to surrender any right or power reserved to or conferred upon the County. -5- FG: 110689551.3 (b) To cure any ambiguities, or to cure, correct or supplement any defective provision contained in this resolution in a manner that does not materially adversely affect the interest of the Registered Owner of the Bond. Section 16. General Authorization and Ratification. The Chair of the Board,the County Treasurer, County Auditor, the Clerk of the Board, and other appropriate officers of the County are severally authorized to take such actions and to execute such documents as in their judgment may be necessary or desirable to carry out the transactions contemplated in connection with this resolution, and to do everything necessary for the prompt delivery of the Bond to the Purchaser and for the proper application,use and investment of the bond proceeds.All actions taken prior to the effective date of this resolution in furtherance of the purposes described in this resolution and not inconsistent with the terms of this resolution are ratified and confirmed in all respects. Section 17. Severability. The provisions of this resolution are declared to be separate and severable. If a court of competent jurisdiction,all appeals having been exhausted or all appeal periods having run, finds any provision of this resolution to be invalid or unenforceable as to any person or circumstance, such offending provision shall, if feasible, be deemed to be modified to be within the limits of enforceability or validity. However, if the offending provision cannot be so modified, it shall be null and void with respect to the particular person or circumstance, and all other provisions of this resolution in all other respects,and the offending provision with respect to all other persons and all other circumstances, shall remain valid and enforceable. Section 18. Effective Date of Resolution. This resolution shall be effective immediately after its adoption in the manner provided by law. ADOPTED by the Board of County Commissioners of Mason County, Washington at a regular meeting held on October 1'3 ,2026. -6- FG: 110689551.3 BOARD OF COUNTY COMMISSIONERS MASON COUNTY, WASHINGTON PAT TARZWELL, Chair RANIFcY ATHERL ,Vice Chair Vacant, Commissioner District 3 ATTEST: YYl � SC1'11,1� MCKENZIE'SMI1fI, Clerk of the Board -7- FU: 110689551.3 EXHIBIT A Estimated Payment Amounts* Payment Date Principal Interest Total 12/01/2027 $23,767.04 $ 5,085.35 $ 28,852.39 12/01/2028 23,767.04 3,736.18 27,503.22 12/01/2029 23,767.03 2,802.13 26,569.16 12/01/2030 23,767.03 1,868.09 25,635.12 12/01/2031 23,767.03 934.04 24,701.07 $118,835.17 $14,425.79 $133,260.96 *The County will make payments of principal annually on the interest payment date from the assessments collected each year during the five year assessment period that are in excess of the amount required to make the required annual interest payments as provided in Section 4 of the Bond Resolution. FG: 110689551.3