Chapter 7.10
Payment of Warrants – Line of Credit

Sections:

7.10.010 Definitions.

7.10.020 Line of Credit Authorized.

7.10.030 Interest.

7.10.040 Procedures.

7.10.050 City Funds Pledged.

7.10.060 Statements.

7.10.070 Non-Arbitrage.

7.10.080 Severability.

7.10.090 Administrative Authorization.

7.10.010 Definitions.

As used in this chapter, the following words have the following meanings:

A.  “City” means the City of Spokane, Washington, a first class charter city duly organized and existing under and by virtue of the laws of the State of Washington and the Charter of the City.

B.  “Finance director” means the director appointed by the mayor and confirmed by the city council who is charged with the responsibility for the overall direction of the finance department of the City.

C.  “Qualified public depositary” or “depositary” means a financial institution which does not claim exemption from the payment of any sales or compensating use or ad valorem taxes under the laws of the State of Washington, which has been approved by the Washington Public Deposit Protection Commission to hold public deposits, and which has segregated for the benefit of said Commission eligible collateral having a value of not less than its maximum liability.

D.  “Treasurer” means the treasurer of the City, who is the custodian of City funds.

[Ord. C32794 § 14; Passed: 2/12/2001]

7.10.020 Line of Credit Authorized.

A line of credit for the payment of City warrants is authorized to be established at a qualified public depositary in the maximum amount of five million dollars. The finance director of the City is authorized to change the qualified public depositary when he deems it necessary and appropriate. If the qualified public depositary is changed, the City shall pay amounts advanced on the line of credit with interest due thereon within ten days of the receipt of written notification of the amount due.

[Ord. C29315; Passed: 11/14/1983]

7.10.030 Interest.

The line of credit bears interest computed at the rate of seventy-five percent of the depositary’s publicly announced prime rate (the “prime rate”) in effect on the date credit is advanced, due and payable quarterly commencing on December 1, 1983, and on each succeeding March 1st, June 1st and September 1st. Interest accrued during each quarter is payable within ten business days after the City is notified in writing by the depositary of the amount due. The rate of interest payable on the line of credit shall change when the Prime rate changes, to the rate of seventy-five percent of the prime rate then in effect.

[Ord. C27296; Passed: 11/14/1983]

7.10.040 Procedures.

A.  The finance director or the treasurer is delegated the authority to determine the amount of credit which shall be extended from time to time, subject to limitations set forth in SMC 7.10.020.

B.  The depositary shall notify the City of the amount of warrants it has received the previous day. The City may authorize the payment of the warrants, or, if a legal basis exists, not authorize payment of the warrants so presented. If the City determines to authorize payment of the warrants when so presented, it may do so orally and, thereafter, direct the depositary to pay such warrants by drawing down on the line of credit. The drawing down on the line of credit will create a debt on which the City agrees to pay interest at the rate and in the manner set forth in SMC 7.10.030. Interest on the amount of credit extended shall accrue until the principal amount of credit extended on the line of credit is paid. One day’s interest shall be paid for each calendar day, or any part thereof, that the line of credit remains extended.

C.  If the City is unable to wire transfer immediately available federal funds as provided herein within ten business days of such extension of credit, it shall make all reasonable efforts to issue tax anticipation notes to repay the credit so extended.

D.  If the depositary is not paid within ten business days of notification to the City, then it shall have the option to refuse to further extend credit on the line of credit.

E.  At the conclusion of the quarter (as set forth in SMC 7.10.030) the depositary shall notify the City of the total amount of interest due, and the City shall pay said amount within ten business days of such notification.

F.  No interest shall accrue on the amount of interest due from the due date until paid as provided herein. If the City does not pay the total amount of interest due within ten business days of notification, the interest at the rate set forth in SMC 7.10.030 shall accrue on the total amount of interest due from the due date until payment.

[Ord. C29220; Passed: 11/14/1983]

7.10.050 City Funds Pledged.

The general fund of the City is pledged to pay the principal of and interest on amounts determined to be extended on the line of credit. Accordingly, the full faith and credit of the City is pledged for the payment of the amounts determined to be extended on the line of credit, within the appropriate constitutional and statutory limitations of nonvoted bonds.

[Ord. C27296; Passed: 11/14/1983]

7.10.060 Statements.

The finance director of the City shall require that the depositary prepare and present to the City quarterly statements showing the dollar amount of money extended on the line of credit.

[Ord. C27296; Passed: 11/14/1983]

7.10.070 Non-Arbitrage.

The City will not invest any of the proceeds of the line of credit or make any use thereof in a manner that would cause the line of credit to be an “arbitrage bond” within the meaning of section 103(c) of the Internal Revenue Code of 1954, as amended, and applicable regulations promulgated thereunder.

[Ord. C27296; Passed: 11/14/1983]

7.10.080 Severability.

If any one or more of the covenants or agreements provided in this chapter to be performed on the part of the City be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements in this chapter, and shall in no way affect the validity of the other provisions of this chapter.

[Ord. C27296; Passed: 11/14/1983]

7.10.090 Administrative Authorization.

The finance director or the treasurer is authorized and directed to sign necessary and appropriate documents required to cause the things provided in this chapter to occur, provided such documents are consistent with this chapter.

[Ord. C27296; Passed: 11/14/1983]