ORDINANCE No. 176288

* Authorize limited tax revenue bonds for the various public projects (Ordinance)

The City of Portland ordains:

Section 1. The Council finds:

1.  The City passed Ordinance No. 174307 on April 5, 2000, authorizing the issuance of up to $300,000,000 of bonds under the Uniform Revenue Bond Act to finance facilities improvements, property acquisition and other public purposes. Notice of the authorization was published as required by Oregon’s Uniform Revenue Bond Act (ORS 288.805 to 288.945).

2.  The Uniform Revenue Bond Act permits the City to issue the bonds unless, within 60 days after the notice is published, five percent or more of the City’s electors file a petition to refer the question of issuing the bonds to the City’s voters. More than sixty days have passed since the publication of the notice of authorization, and the City has not received petitions to refer the revenue bonds described in that notice to a vote of the people. The City is now authorized to issue the bonds described in Ordinance No. 174307.

3.  The Uniform Revenue Bond Act permits the City to pledge revenues, defined to include all fees, tolls, taxes, and other income available to the City to pay obligations issued under the Uniform Revenue Bond Act and under Ordinance No. 174307.

4.  The City Council passed Ordinance No. 176026 on October 31, 2001 authorizing the issuance of $12,000,000 of bonds under Ordinance No. 174307. The City did not issue the bonds and wishes to rescind Ordinance No. 176026 and replace it with this ordinance.

5.  The City Council adopts this Ordinance to authorize $14,000,000 of bonds under Ordinance No. 174307 to finance the Integrated Regional Network Enterprise (“IRNE”) project, the Emergency Operations Center relocation project, the purchase of a streetcar, other capital assets and costs of issuing the Bonds, and to refinance amounts due under an outstanding line of credit for park system improvements.

6.  The City has previously issued other bonds pursuant to Ordinance No. 174307. Issuing the $14,000,000 of bonds authorized by this ordinance will not exhaust the authority available under Ordinance No. 174307.

NOW, THEREFORE, the Council directs:

A.  Definitions.

Unless the context clearly requires otherwise, the following terms shall have the following meanings:

“Bonds” means the limited tax revenue bonds that are authorized by Section 1.B of this Ordinance.

“Available General Funds” means “revenues” as defined in the Uniform Revenue Bond Act, and includes all taxes and other legally available general funds of the City.

“BEO” means “book-entry-only” and refers to a system for clearance and settlement of securities transactions through electronic book-entry changes, which eliminates the need for physical movement of securities.

“Business Day” means any day except a Saturday, a Sunday, a legal holiday, a day on which the offices of banks in Oregon or New York are authorized or required by law or executive order to remain closed, or a day on which the New York Stock Exchange is closed.

“City” means the City of Portland, Oregon.

“Code” means the Internal Revenue Code of 1986, as amended.

“Debt Manager” means the Debt Manager of the City, the Director of the Bureau of Financial Management of the City, the Chief Administrative Officer of the Office of Management and Finance, or the person designated by the Chief Administrative Officer of the Office of Management and Finance to act as Debt Manager under this Ordinance.

“DTC” means the Depository Trust Company of New York, the initial securities depository for the Bonds.

“Event of Default” refers to an Event of Default listed in Section 1.G.1 of this Ordinance.

“Government Obligations” means direct noncallable obligations of the United States, or obligations the principal of and interest on which are fully and unconditionally guaranteed by the United States.

“Ordinance” means this ordinance, and any Supplemental Ordinance.

“Outstanding” refers to all Bonds except Bonds that have been paid, canceled, or defeased pursuant to Section 1.I. of this Ordinance, and Bonds which have matured but have not been presented for payment, but for the payment of which adequate money has been transferred to the Paying Agent.

“Owner” means the person shown on the register maintained by the Paying Agent as the registered owner of a Bond.

“Paying Agent” means the Paying Agent for the Bonds, which, at the time of enactment of this Ordinance, is U.S. Bank Trust National Association or its successor.

“Payment Date” means a date on which Bond principal or interest are due, whether at maturity or prior redemption.

“Qualified Consultant” means an independent engineer, an independent auditor, an independent financial advisor, or similar independent professional consultant of recognized standing and having experience and expertise in the area for which such person or firm is retained by the city for purposes of performing activities specified in this Ordinance.

“Supplemental Ordinance” means any ordinance amending or supplementing the Ordinance, which is passed in accordance with Section 1.F.

B.  Bonds Authorized.

The City hereby authorizes the sale and delivery of the Bonds in accordance with this Ordinance in an aggregate principal amount of not more than Fourteen Million Dollars ($14,000,000). Bond proceeds may be used to finance the IRNE project, the Emergency Operations Center relocation project, other capital assets and costs of issuing the Bonds, and to refinance amounts due under an outstanding line of credit for park system improvements. The Bonds may be issued in one or more series.

C.  Delegation.

The Debt Manager may, on behalf of the City and without further action by the Council:

1.  participate in the preparation of, authorize the distribution of, and deem final the preliminary and final official statements and any other disclosure documents for the Bonds;

2.  provide that the Bonds may be issued in one or more series, may bear interest at fixed rates or variable rates, and may pay deferred interest;

3.  establish the final principal amounts, maturity schedules, interest rates, sale prices, redemption terms, payment terms and dates, and other terms of the Bonds, and either publish a notice of sale, receive bids and award the sale of the Bonds to the bidder complying with the notice and offering the most favorable terms to the City, or select one or more underwriters and negotiate the sale of the Bonds with those underwriters;

4.  undertake to provide continuing disclosure for the Bonds in accordance with Rule 15c2-12 of the United States Securities and Exchange Commission;

5.  apply for and purchase municipal bond insurance or other obtain other forms of credit enhancements for each series of the Bonds or obtain reserve credit facilities or other reserve equivalents for each series of the Bonds, enter into agreements with the providers of credit enhancement, and execute and deliver related documents;

6.  appoint and enter into agreements with paying agents, remarketing agents, verification agents and other professionals and service providers; and

7.  execute any documents and take any other action in connection with the Bonds, which the Debt Manager finds will be advantageous to the City.

D.  Security for Bonds.

1.  The City hereby pledges its full faith and credit to pay the Bonds. The Bonds shall be limited tax revenue bonds of the City, and the City shall pay the Bonds from its Available General Funds. The City is not authorized to levy additional taxes to pay the Bonds.

2.  This Ordinance shall constitute a contract with the Owners of the Bonds.

E.  Covenants.

The City hereby covenants and agrees with the Owners of all Outstanding Bonds as follows:

1.  The City shall promptly cause the principal, premium, if any, and interest on the Bonds to be paid as they become due in accordance with the provisions of this Ordinance and any Supplemental Ordinance.

2.  The City covenants for the benefit of the Owners of the Bonds to comply with all provisions of the Code that are required for interest on the Bonds to be excluded from gross income for federal taxation purposes. In determining what actions are required to comply, the City relied on an opinion of nationally recognized bond counsel. The City makes the following specific covenants with respect to the Code:

(a)  The City will not take any action or omit any action if it would cause the Bonds to become "arbitrage bonds" under Section 148 of the Code;

(b)  The City shall operate the facilities financed with the Bonds so that the Bonds do not become private activity bonds within the meaning of Section 141 of the Code;

(c)  The City shall pay, when due, all rebates and penalties with respect to the Bonds that are required by Section 148(f) of the Code.

F.  Amendment of Ordinance.

1.  The City may enact a Supplemental Ordinance to amend this Ordinance without the consent of any Owner for any one or more of the following purposes:

a.  To cure any ambiguity or formal defect or omission in this Ordinance;

b.  To add to the covenants and agreements of the City in this Ordinance other covenants and agreements to be observed by the City which are not contrary to or inconsistent with this Ordinance as theretofore in effect;

c.  To confirm, as further assurance, any security interest or pledge created under this Ordinance or any Supplemental Ordinance;

d.  To make any change which, in the reasonable judgment of the City, does not materially and adversely affect the rights of the Owners of Bonds.

2.  This Ordinance may be amended for any other purpose only upon consent of Owners representing not less than fifty-one percent (51%) in aggregate principal amount of the adversely affected Bonds then Outstanding. However, no amendment shall be valid which:

a.  Extends the maturity of any Bonds, reduces the rate of interest on any Bonds, extends the time of payment of interest on any Bonds, reduces the amount of principal payable on any Bonds, or reduces any premium payable on any Bonds, without the consent of all affected Owners; or

b.  Reduces the percent of Owners required to approve Supplemental Ordinances.

G.  Default and Remedies.

1.  The occurrence of one or more of the following shall constitute an Event of Default under this Ordinance:

a.  Failure by the City to pay Bond principal, interest or premium when due (whether at maturity, or upon redemption after a Bond has been properly called for redemption);

b.  Failure by the City to observe and perform any covenant, condition or agreement which this Ordinance requires the City to observe or perform for the benefit of Owners of Bonds, which failure continues for a period of 60 days after written notice to the City by the Owners of ten percent or more of the principal amount of Bonds then Outstanding specifying such failure and requesting that it be remedied; provided however, that if the failure stated in the notice cannot be corrected within such 60 day period, it shall not constitute an Event of Default so long as corrective action is instituted by the City within the 60 day period and diligently pursued, and the default is corrected as promptly as practicable after the written notice referred to in this paragraph b; or,

c.  The City is adjudged insolvent by a court of competent jurisdiction, admits in writing its inability to pay its debts generally as they become due, files a petition in bankruptcy, or consents to the appointment of a receiver for the installment payments.

2.  The Owners of ten percent or more of the principal amount of Bonds then Outstanding may waive any Event of Default and its consequences, except an Event of Default described in Section 1.G.1.a

3.  If an Event of Default occurs and is continuing the Owners of ten percent or more of the principal amount of affected Bonds then Outstanding may exercise any remedy available at law or in equity; however, the Bonds shall not be subject to acceleration.

4.  No remedy in this Ordinance conferred upon or reserved to Owners of Bonds is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Ordinance or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. To entitle the Owners of Bonds to exercise any remedy reserved to them, it shall not be necessary to give any notice other than such notice as may be required by this Ordinance or by law.

H.  Ownership of Bonds.

1.  For purposes of determining the percentage of Owners consenting to, waiving or otherwise acting with respect to any matter that may arise under this Ordinance, the initial purchaser of the Bonds may be treated as the Owner of the Bonds at the time the Bonds are delivered in exchange for payment.

2.  For purposes of determining the percentage of Owners taking action under this Ordinance, the Owners of Bonds which pay interest only at maturity, and mature more than one year after they are issued shall be treated as Owners of Bonds in an aggregate principal amount equal to the accreted value of such Bonds as of the date the Paying Agent sends out notice of requesting consent, waiver or other action as provided herein.

I.  Defeasance.

The City shall be obligated to pay any Bonds that are defeased in accordance with this Section 1.I solely from the money and Government Obligations which are deposited in escrow agent pursuant to this Section 1.I. Bonds shall be deemed defeased if the City:

1.  irrevocably deposits money or noncallable Government Obligations in escrow with an independent trustee or escrow agent which are calculated to be sufficient without reinvestment for the payment of Bonds which are to be defeased; and,

2.  files with the escrow agent or trustee an opinion from a Qualified Consultant to the effect that the money and the principal and interest to be received from the Government Obligations are calculated to be sufficient, without further rein­vestment, to pay the defeased Bonds when due.

J.  Form.

The Bonds shall be in substantially the form attached hereto as Exhibit A, with such changes as may be approved by the Debt Manager. The Bonds shall be executed on behalf of the City with the facsimile signatures of the Mayor and City Auditor.

K.  Book Entry System for Bonds.

The Bonds shall be initially issued in BEO form and shall be governed by this Section 1.K. While Bonds are in BEO form no physical Bonds shall be provided to Owners of Bonds. The Debt Manager has executed and delivered a blanket Letter of Representations to DTC. While the Bonds are in BEO form, registration and transfer of beneficial interests in the Bonds shall be governed by that letter and the Operational Arrangements of DTC, as they may be amended from time to time, as provided in the blanket issuer letter of representations. So long as Bonds are in BEO form:

1.  DTC shall be treated as the Owner for all purposes, including payment and the giving of notices to Owners of Bonds. Bond payments shall be made, and notices shall be given, to DTC in accordance with the Letter of Representations. Any failure of DTC to advise any of its participants, or of any participant to notify the beneficial owner, of any such notice and its content or effect will not affect the validity of the redemption of Bonds called for redemption or of any other action premised on such notice.

2.  The City may discontinue maintaining the Bonds in the BEO form at any time. The City shall discontinue maintaining the Bonds in BEO form if DTC determines not to continue to act as securities depository for the Bonds, or fails to perform satisfactorily as depository, and a satisfactory substitute depository cannot reasonably be found.

3.  If the City discontinues maintaining the Bonds in book-entry only form, the City shall cause the Paying Agent to authenticate and deliver replacement Bonds in fully registered form in authorized denominations in the names of the beneficial owners or their nominees; thereafter the provisions set forth in Section 1.M. below, regarding registration, transfer and exchange of Bonds shall apply.

4.  While the Bonds are in BEO form, the City and the Paying Agent shall have no responsibility or obligation to any participant or correspondent of DTC or to any beneficial owner on behalf of which such participants or correspondents act as agent for the beneficial owner with respect to:

a.  the accuracy of the records of DTC, the nominee or any participant or correspondent with respect to any beneficial owner's interest in the Bonds;

b.  the delivery to any participant or correspondent or any other person of any notice with respect to the Bonds, including any notice of prepayment;

c.  the selection by DTC of the beneficial interest in Bonds to be redeemed prior to maturity; or

d.  the payment to any participant, correspondent, or any other person other than the registered owner of the Bonds as shown in the registration books maintained by the Paying Agent, of any amount with respect to principal, any premium or interest on the Bonds.

5.  The City shall pay or cause to be paid all principal, premium and interest on the Bonds only to or upon the order of the owner, as shown in the registration books maintained by the Paying Agent, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligation with respect to payment thereof to the extent of the sum or sums so paid.

6.  The provisions of this Section 1.K. may be modified without the consent of the beneficial owners in order to conform this Section to the standard practices of DTC or any successor depository for bonds issued in book-entry only form.

L.  Redemption of Bonds.

1.  The Bonds shall be subject to redemption on the terms established by the Debt Manager. The City reserves the right to purchase Bonds in the open market.

2.  If any Bonds are subject to mandatory redemption, the City may credit against the mandatory redemption requirement any Bonds of the same maturity which the City has previously purchased or which the City has previously redeemed pursuant to any optional redemption provision.

3.  So long as Bonds are in book-entry only form, the Paying Agent shall notify DTC of any early redemption not less than 30 days prior to the date fixed for redemption, and shall provide such information in connection therewith as required by a letter of representation submitted to DTC in connection with the issuance of the Bonds.

4.  During any period in which the Bonds are not in book-entry only form, unless waived by any Owner of the Bonds to be redeemed, official notice of any redemption of Bonds shall be given by the Paying Agent on behalf of the City by mailing a copy of an official redemption notice by first class mail postage prepaid at least 30 days and not more than 60 days prior to the date fixed for redemption to the Owner of the Bond or Bonds to be redeemed at the address shown on the Bond register or at such other address as is furnished in writing by such Owner to the Paying Agent. The City shall notify the Paying Agent of any intended redemption not less than 45 days prior to the redemption date. All such official notices of redemption shall be dated and shall state:

a.  the redemption date,

b.  the redemption price,

c.  if less than all outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed,

d.  that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and

e.  the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the principal office of the Paying Agent.

M.  Authentication, Registration and Transfer.

1.  No Bond shall be entitled to any right or benefit under this Ordinance unless an authorized officer of the Paying Agent shall have authenticated it. The Paying Agent shall authenticate all Bonds to be delivered at closing of the Bonds, and shall additionally authenticate all Bonds properly surrendered for exchange or transfer pursuant to this Ordinance.

2.  The ownership of all Bonds shall be entered in the Bond register maintained by the Paying Agent, and the City and the Paying Agent may treat the person listed as owner in the Bond register as the owner of the Bond for all purposes.

3.  While the Bonds are in book-entry only form, the Paying Agent shall transfer Bond principal and interest payments in the manner required by DTC.

4.  If the Bonds cease to be in book-entry only form, the Paying Agent shall mail each interest payment on the interest Payment Date (or the next Business Day if the Payment Date is not a Business Day) to the name and address of the Owners as they appear on the Bond register as of the Record Date. If payment is so mailed, neither the City nor the Paying Agent shall have any further liability to any party for such payment.

5.  Bonds may be exchanged for an equal principal amount of Bonds of the same maturity which are in different denominations, and Bonds may be transferred to other Owners if the Owner submits the following to the Paying Agent:

a.  written instructions for exchange or transfer satisfactory to the Paying Agent, signed by the Owner or attorney in fact and guaranteed or witnessed in a manner satisfactory to the Paying Agent and

b.  the Bonds to be exchanged or transferred.

6.  The Paying Agent shall not be required to exchange or transfer any Bonds submitted to it during any period beginning with a Record Date and ending on the next following Payment Date; however, such Bonds shall be exchanged or transferred promptly following that Payment Date.

7.  The Paying Agent shall note the date of authentication on each Bond. The date of authentication shall be the date on which the Owner's name is listed on the Bond register.

8.  For purposes of this Section 1.M, Bonds shall be considered submitted to the Paying Agent on the date the Paying Agent actually receives the materials described in Section 1.M.5, above.

9.  The City may alter these provisions regarding registration and transfer by mailing notification of the altered provisions to all Owners. The altered provisions shall take effect on the date stated in the notice, which shall not be earlier than 45 days after notice is mailed.

N.  Rules of Construction.

In determining the meaning of provisions of this Ordinance, the following rules shall apply unless the context clearly requires application of a different meaning:

1.  References to Section numbers shall be construed as references to this Ordinance.

2.  References to one gender shall include all genders.

3.  References to the singular include the plural, and references to the plural include the singular.

O.  Rescind Previously Enacted Ordinance.

Ordinance No. 176026 which was passed by the Council on October 31, 2001 is hereby rescinded.

Section 2. Declaration of Emergency. The Council declares that an emergency exists in order that the proceeds of the Bonds may be available as soon as possible. Therefore, this Ordinance shall be in force and effect from and after its passage by the Council.

Passed by the Council, MAR 06 2002

GARY BLACKMER

Mayor Vera Katz          Auditor of the City of Portland

Office of Management and Finance      By /S/ Susan Parsons

TG:EJ:Bond Counsel              Deputy

February 21, 2002

BACKING SHEET INFORMATION

AGENDA NO. 206-2002

ORDINANCE/RESOLUTION/COUNCIL DOCUMENT NO. 176288