2004-626-Resolution No. 2004-022 Recorded 3/24/2004REVIEWED
A4_t_
LEGAL COTTNSF,T.
DESCHUTES COUNTY OFFICIAL
NANCY BLANKENSHIP, COUNTY
COMMISSIONERS' JOURNAL
2004-626
CLERKDS �J 20N-616
03/24/2004 02:53:07 PM
BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON
A Resolution Authorizing Its Limited Tax
Pension Pool Bond, Series 2004. * RESOLUTION NO. 2004-022
WHEREAS, the County is authorized by ORS 238.692 to 238.698 (the "Act") to
issue limited tax bonds as defined in ORS 288.150 to finance its pension liability; and,
WHEREAS, the Act and ORS 288.150 permit the County to pledge its full faith
and credit and taxing power within the limitations of Sections 11 and 1 Ib of Article XI of the
Oregon Constitution to pay those bonds; and,
WHEREAS, Section 2 of ORS 238.694 of the Act provides "Notwithstanding any
limitation on indebtedness or borrowing under state or local law, for the purpose of obtaining
funds to pay the pension liability of a governmental unit, the governing body of a governmental
unit may authorize and cause the issuance of limited tax bonds as defined in ORS 288.150..."
and the Act therefore supercedes any state or local debt limitations of the County; and,
WHEREAS, the County has an unfunded pension liability to the Oregon Public
Employees Retirement System ("OPERS") which was estimated to be $3,939,183 as of
December 31, 2002; and,
WHEREAS, OPERS currently requires the County to pay this unfunded liability
over a period of years with interest at eight percent per annum; and,
WHEREAS, current interest rates in the bond market create the opportunity for
the County to finance its unfunded pension liability and potentially reduce its costs; and,
WHEREAS, a pooled pension bond program ("Program") may reduce costs for
participating governments; and,
WHEREAS, the Program does not require the County to pay any portion of
another government's pension bonds or liabilities to OPERS; now therefore,
BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES
COUNTY, OREGON, as follows:
Page 1 of 10
Section 1. Definitions.
Unless the context clearly requires otherwise, the following terms shall have the following
meanings:
"Additional Charges" means the fees and other charges of the Program Trustee, as defined in the
Program Trust Agreement and any indemnity payments due under Section 6(3) of this
Resolution.
"Available General Funds" means: (i) all the County's ad valorem property tax revenues received
from levies under its permanent rate limit; and (ii) all other unrestricted taxes, fees, charges,
revenues and receipts of the County which Oregon law allows to be spent to make the Bond
Payments.
"Bond Payments" means the principal and interest payments due under the Bond.
"Bond" means the County's Limited Tax Pension Pool Bond, Series 2004, that is authorized by
Section 2 of this Resolution.
"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 or the Program Trustee is
closed.
"County Official" means the Finance Director of the County, or the person designated by the
Finance Director to act as County Official under this Resolution.
"County" means Deschutes County, Oregon.
"Event of Default" refers to an Event of Default listed in Section 8(1) of this Resolution.
"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, or any other security which the Program Trust Agreement allows to be used as a
defeasance obligation.
"Payment Date" means a date on which Bond principal or interest is due, whether at maturity or
prior redemption.
"Program" means the pooled pension bond program implemented through the Program Trust
Agreement.
"Program Obligations" means the obligations issued by the Program Trustee under the Program
Trust Agreement which are payable from the Bond Payments and similar pension bond payments
made by other participants in the pension bond program.
"Program Trust Agreement" means the Trust Agreement between the Program Trustee, the
County and other issuers of pension bonds which are sold to the Program Trustee, in which the
Page 2 of 10 SALegaffinance\R2004-022 PERS Bond.doc
Program Trustee agrees to hold the Bond and to distribute the Bond Payments to the owners of
Program Obligations.
"Program Trustee" means Wells Fargo Bank, National Association, as trustee under the Program
Trust Agreement, or its successors.
"Resolution" means this Resolution, including any amendments made in accordance with Section
7 of this Resolution.
"Security Payments" means the payments the County is required to make on the 15th day of the
month which precedes each Payment Date. The Security Payments are equal to the amount
required to be paid on that Payment Date.
Section 2. Bond Authorized.
(1) The County hereby authorizes the issuance, sale and delivery of its Limited Tax Pension
Pool Bond, Series 2004, in accordance with this Resolution and in an amount which is
sufficient to produce net proceeds which do not exceed the most recent estimate of the
County's unfunded pension liability to OPERS which the County receives from OPERS
prior to selling the Bond, plus the costs of issuing and selling the Bond, obtaining credit
enhancement, paying the County's share of any costs of the Program Trustee and any
other costs of participating in the Program, and paying any interest on the Bond subject to
Section 2(3) herein.
(2) The issuance of the Bond and the participation in the Program shall not obligate the
County to pay any portion of another government's pension bonds or liabilities to
OPERS.
(3) Bond proceeds shall be used to pay the County's unfunded pension liability to OPERS, to
pay interest on the Bond for a period not to exceed four years and to pay costs of issuing
and selling the Bond, including any costs of the Program Trustee and credit enhancement.
(4) The Bond shall be a "federally taxable bond" which bears interest that is not excludable
from gross income under Section 103(a) of the Internal Revenue Code of 1986, as
amended. Interest shall, however, be exempt from Oregon personal income taxation.
(5) OPERS currently requires the County to pay this unfunded liability over a period of years.
OPERS charges the County eight percent per annum because OPERS expects, over the
long term, to earn eight percent on its investments. Refinancing that liability at a lower
rate of interest should, therefore, reduce costs for the County. To ensure that the rate of
interest on the Bond will be less than the rate of interest which OPERS charges the
County on its unfunded pension liability, the Bond shall not be sold at a true interest cost
of more than 7.00% per annum.
(6) For counties only: As provided in ORS 238.694(3), the Bond together with any other
obligations or bonds previously issued pursuant to the Act, shall not be issued in an
amount which exceeds five percent of the real market value of the County.
Page 3 of 10 S:Axga1\Fin=ce\R2004-022 PERS Bond.doc
Section 3. Delegation.
If the County Official determines that the County shall issue the Bond, the County Official is
hereby directed, on behalf of the County and without further action by the Board of County
Commissioners, to:
(1) Participate in the preparation of, authorize the distribution of, and deem final any official
statement or other disclosure documents relating to the Bond or the Program Obligations.
(2) Establish the final principal amounts, maturity schedules, interest rates, sale prices and
discount, redemption terms, payment terms and dates, Security Payment terms, and other
terms of the Bond.
(3) Negotiate the terms of, and enter into a bond purchase agreement, which provides for the
acquisition of the Bond by the Program Trustee.
(4) Approve, execute and deliver an intergovernmental agreement and the Program Trust
Agreement, or an intergovernmental agreement which is combined with the Program
Trust Agreement, which directs the Program Trustee to issue the Program Obligations
and provides for the administration of funds held by the Program Trustee, and any other
agreements or documents which may be required for participation in the Program.
However, delivery of the Bond to the Program Trustee shall constitute execution of the
Program Trust Agreement by the County, and the County shall be bound by the Program
Trust Agreement upon delivery of the Bond to the Program Trustee.
(5) Undertake to provide continuing disclosure for the Bond in accordance with Rule 15c2-
12 of the United States Securities and Exchange Commission.
(6) Apply for ratings on the Bond or the Program Obligations and purchase municipal bond
insurance or obtain other forms of credit enhancements for the Bond or the Program
Obligations, enter into agreements with the providers of credit enhancement, and execute
and deliver related documents.
(7) Execute and deliver the Bond to the Program Trustee.
(8) Negotiate the terms of, and enter into guaranteed investment contracts or other
agreements for the investment of capitalized interest, if any.
(9) Execute and deliver any agreements or certificates and take any other action in connection
with the Bond which the County Official finds is desirable to permit the sale and issuance
of the Bond in accordance with this Resolution.
Section 4. Security for Bond.
(1) The County hereby pledges its full faith and credit and taxing power within the
limitations of Sections 11 and l lb of Article XI of the Oregon Constitution to pay the
Bond. The Bond shall be a limited tax bond of the County as defined in ORS 288.150,
Page 4 of 10 SALega1\Finance\R2004-022 PERS Bond.doc
and the County shall pay the Bond from its Available General Funds. The County is not
authorized to levy additional taxes to pay the Bond.
(2) To secure the payment of the Bond, the County shall make the Security Payments as
provided in the Bond. The Security Payments shall be applied to make Bond Payments.
(3) This Resolution shall constitute a contract with the Trustee, and the owners of the
Program Obligations shall be third -party beneficiaries of this contract.
Section 5. Redemption.
The principal component of Bond Payments shall be subject to redemption on the dates and at
the prices established by the County Official pursuant to Section 3(2) and in accordance with the
Program Trust Agreement.
Section 6. Covenants.
The County hereby covenants and agrees with the Owner of the Bond as follows:
(1) The County shall promptly cause Security Payments and the principal, premium, if any,
and interest on the Bond to be paid as they become due in accordance with the provisions
of this Resolution and the Bond.
(2) The County covenants for the benefit of the Program Trustee to pay the Additional
Charges reasonably allocated to it by the Program Trustee, in accordance with the
invoices for such Additional Charges which are provided by the Program Trustee
pursuant to the Program Trust Agreement.
(3) To the extent permitted by law, the County covenants and agrees to indemnify and save
the Program Trustee harmless against any loss, expense or liability which is reasonably
allocable to the County and which the Program Trustee may incur arising out of or in the
exercise or performance of its duties and powers under the Program Trust Agreement
relating to the Bond, including the costs and expenses of defending against any claim or
liability, or enforcing any of the rights or remedies granted to it under the terms of the
Program Trust Agreement in connection with the Bond, excluding any losses or expenses
which are due to the Trustee's breach of fiduciary duties, negligence or willful
misconduct. The obligations of the County under this Section 6(3) shall survive the
resignation or removal of the Program Trustee under the Program Trust Agreement and
the payment of the Program Obligations and discharge under the Program Trust
Agreement. The damages claimed against the County shall not exceed the damages
which may be allowed under the Oregon Tort Claims Act, Oregon Revised Statutes
Section 30.260, et seq., unless the provisions and limitations of such act are preempted by
federal law, including, but not limited to the federal securities laws.
Section 7. Amendment of Resolution.
The County may amend this Resolution only in accordance with the Program Trust Agreement.
Page 5 of 10 S:U.egal\Finance\R2004-022 PERS Bond.doc
Section 8. Default and Remedies.
(1) The occurrence of one or more of the following shall constitute an Event of Default under
this Resolution:
(A) Failure by the County to pay Bond principal, interest or premium when due
(whether at maturity, or upon redemption after principal components of Bond
Payments have been properly called for redemption);
(B) Failure by the County to make any Security Payment within five Business Days
after it is due;
(C) Failure by the County to observe and perform any covenant, condition or
agreement which this Resolution requires the County to observe or perform for
the benefit of the Program Trustee, other than as set forth in Section 8(1)(A) or
8(1)(B), which failure continues for a period of 60 days after written notice to the
County by the Program Trustee 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 County 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 Section 8(1)(C); or,
(D) The County 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 Program Trustee may waive any Event of Default and its consequences, except an
Event of Default described in Section 8(1)(A).
(3) If an Event of Default occurs and is continuing the Program Trustee may exercise any
remedy available at law or in equity; however, the Bond Payments shall not be subject to
acceleration.
(4) No remedy in this Resolution conferred upon or reserved to the Program Trustee is
intended to be exclusive and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Resolution 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
Program Trustee to exercise any remedy reserved to it, it shall not be necessary to give
any notice other than such notice as may be required by this Resolution or by law.
Page 6 of 10 SALega1\Finance\R2004-022 PERS Bond.doc
Section 9. Defeasance.
The County may defease all or any portion of the Bond Payments in accordance with the
Program Trust Agreement.
Section 10. Form.
The Bond shall be issued as a single installment bond in substantially the form attached hereto as
Exhibit A, with such changes as may be approved by the County Official. The Bond shall be
executed on behalf of the County with the manual signature of the County Official.
Section 11. Rules of Construction.
In determining the meaning of provisions of this Resolution, 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 sections of this
Resolution.
(2) References to one gender shall include all genders.
(3) References to the singular shall include the plural, and references to the plural shall
include the singular.
Section 12. Effective Date.
This resolution shall take effect on the date of its passage by the Board of County
Commissioners.
Page 7 of 10 SALegal\Finwce\R2004-022 PERS Bond.doc
The foregoing Resolution adopted this 2{h day of March, 2004.
Commissioner
Michael M. Daly
Tom DeWolf
Dermis R. Luke
ATTEST:
BOARD OF COUNTY COMMISSIONERS
OF DESCHUTES COUNTY, OREGON
Ale"
C AEL M. ALY, Ch it
TOM DEWOLF,—Commission&
.'ll,
DENNIS R. LUKE, Commissioner
Record of Adoption Vote
Yes No Abstained Excused
�
r✓
Recording Secretary
Page 8 of 10 SALega1\Finance\R2004-022 PERS Bond.doc
Exhibit A
Form of Bond
No. R-<<BondNumber» $<d'rincipalAmtNumbem
United States of America
State of Oregon
Deschutes County
Limited Tax Pension Pool Bond
Series 2004
Dated Date:
Registered Owner: ----- WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
Principal Amount:-----$<<PrincipalAmtSpelled» Dollars -----
Deschutes County, Oregon (the County"), for value received, acknowledges itself indebted and
hereby promises to pay to the registered owner, which is WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Trustee (the "Program Trustee") under the Trust Agreement among the Program Trustee and the issuers of pension
bonds which is dated as of _, 2004 (the "Program Trust Agreement"), the Principal Amount indicated above, in
installments as provided in Exhibits A and B attached hereto, together with interest thereon as provided below,
computed on the basis of a 360 -day year of twelve 30 -day months.
To provide additional security, the County covenants to make payments (the "Security Payments")
to the Program Trustee on the dates and in the amounts shown in Exhibit C attached hereto.
Each Security Payment shall be credited against the Bond principal and interest payment which is
due on the first day following that Security Payment.
This Bond is the County's Limited Tax Pension Pool Bond, Series 2004 (the "Bond"). This Bond
is issued for the purpose of financing the County's pension liability to the Oregon Public Employees Retirement
System. This Bond is authorized and issued under County Resolution No. _ (the "Resolution") and ORS 238.692
to 238.698 and ORS 288.150, in full and strict accordance and compliance with all of the provisions of the
Constitution and Statutes of the State of Oregon. Capitalized terms used in this Bond have the meanings defined for
such terms in the Resolution.
This Bond is issued in conjunction with and subject to the terms and conditions of the Program
Trust Agreement. The County's obligations under this Bond, the Program Trust Agreement and the Program are
limited to paying the principal, interest and any premium on this Bond by making the Security Payments, and to
paying the Additional Charges. The issuance of this Bond and the participation by the County in the Program shall
not obligate the County to pay any portion of another government's pension bonds or liabilities to OPERS.
This Bond is a legal, valid and binding limited tax bond of the County which is enforceable against
the County in accordance with its terms. The County's full faith and credit and taxing power within the limitations of
Sections 11 and 1 lb of Article XI of the Oregon Constitution are pledged for the punctual payment of the principal
of and interest on this Bond. The County has covenanted to pay this Bond from its "Available General Funds" as
defined in the Resolution. The County is not authorized to levy any additional taxes to pay this Bond. This Bond
does not constitute a debt or indebtedness of Deschutes County, the State of Oregon, or any political subdivision
thereof other than the County.
The principal components of the Bond Payments are subject to redemption [insert redemption
provisions].
Form of Bond (Exhibit A to Resolution Page 1
[insert redemption procedure]
The Bond may not be transferred to any person other than a successor Program Trustee.
IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all conditions, acts, and things
required to exist, to happen, and to be performed precedent to and in the issuance of this Bond have existed, have
happened, and have been performed in due time, form, and manner as required by the Constitution and Statutes of
the State of Oregon and that the issue of which this Bond is a part, and all other obligations of the County, are within
every debt limitation and other limit prescribed by such Constitution and Statutes.
IN WITNESS WHEREOF, the Board of County Commissioners of Deschutes County, Oregon, by
Resolution duly passed, has caused this Bond to be signed by the manual signature of its County Official, all as of
the date first above written.
Deschutes County, Oregon
County Official
Form of Bond (Exhibit A to Resolution Page 2
