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CITY OF PORT ANGELES, WASHINGTON
WATER AND WASTEWATER UTILITY REVENUE REFUNDING BONDS, 2013
ORDINANCE NO. 3481
AN ORDINANCE of the City of Port Angeles, Washington,
authorizing the issuance of water and wastewater utility revenue
refunding bonds of the City in the principal amount of not to
exceed $4,200,000, to defease and refund certain outstanding water
and wastewater utility revenue bonds and notes and to pay costs of
issuing the bonds; providing the form, terms and covenants of the
bonds; authorizing the appointment of an escrow agent and
execution of an escrow agreement; and delegating certain authority
to approve the final terms of the bonds.
Passed July 16, 2013
Prepared By:
PACIFICA LAW GROUP LLP
Seattle, Washington
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CITY OF PORT ANGELES, WASHINGTON
ORDINANCE NO.
TABLE OF CONTENTS
Page
Section 1. Definitions and Interpretation of Terms 3
Section 2. Compliance with Parity Conditions 12
Section 3. Authorization and Description of Bonds 13
Section 4. Registration, Exchange and Payments 14
Section 5. Redemption; Purchase of Bonds 19
Section 6. Form of Bonds 23
Section 7. Execution of Bonds 25
Section 8. Application of Bond Proceeds; Refunding Plan 26
Section 9. Revenue Fund 29
Section 10. Rate Stabilization Fund 30
Section 11. Bond Account 31
Section 12. Adequacy of Revenues 34
Section 13. Covenants and Agreements 34
Section 14. Tax Covenants 38
Section 15. Defeasance 40
Section 16. Issuance of Future Parity Bonds 42
Section 17. Sale of Bonds 46
Section 18. Undertaking to Provide Ongoing Disclosure 48
Section 19. Supplements and Amendments 52
Section 20. Lost or Destroyed Bonds 54
Section 21. Severability 54
Section 22. Effective Date 55
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ORDINANCE NO.
AN ORDINANCE of the City of Port Angeles, Washington,
authorizing the issuance of water and wastewater utility revenue
refunding bonds of the City in the principal amount of not to
exceed $4,200,000, to defease and refund certain outstanding water
and wastewater utility revenue bonds and notes and to pay costs of
issuing the bonds; providing the form, terms and covenants of the
bonds; authorizing the appointment of an escrow agent and
execution of an escrow agreement; and delegating certain authority
to approve the final terms of the bonds.
WHEREAS, the City of Port Angeles, Washington, a municipal corporation of the State
of Washington (the "City "), owns and operates a storm water utility and a water and wastewater
utility; and
WHEREAS, pursuant to Section 2 of Ordinance No. 3407 adopted by the City Council
(the "Council ") on August 3, 2010, the City combined its storm water utility and water and
wastewater utility, as such utilities may be added to, improved or extended from time to time (as
combined, the "System ") for borrowing purposes, as permitted by Ordinance Nos. 3148 and
3375; and
WHEREAS, the City has issued and has outstanding the following obligations of the
System:
Principal Amount
Authorizing Outstanding as of
Designation Date of Issue Ordinance June 1, 2013
Water and Wastewater 11/18/2003 No. 3148 $ 3,135,000
Utility Revenue Bonds,
2003
Water and Wastewater 09/29/2009 No. 3375 6,315,000
Utility Revenue Refunding
Bonds, 2009
Water and Wastewater 08/17/2010 No. 3407 4,630,000
• Utility Revenue Bonds,
2010
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(collectively, the "Outstanding Parity Bonds "); and
WHEREAS, Ordinance No. 3148 provides that the City may call the City's Water and
Wastewater Utility Revenue Bonds, 2003 (the "2003 Bonds ") maturing on and after November 1,
2014 for redemption on or after November 1, 2013, as a whole or in part on any date, at the price
of par plus accrued interest, if any, to the date of redemption; and
WHEREAS, after due consideration it appears to this Council that all of the 2003 Bonds
may be defeased and/or refunded prior to maturity (the "Refunded Bonds ") by the proceeds of
water and wastewater utility revenue refunding bonds authorized herein (the "Bonds ") and
available funds of the City at a substantial savings to the City and its ratepayers; and
WHEREAS, the City has issued and has outstanding certain Public Works Trust Fund
loans, Drinking Water Revolving Fund loans, and similar loans to the City for purposes related to
the System that are administered by the Public Works Board, Department of Commerce, or other
successor or similar state agencies, and are secured by a pledge of Gross Revenue (the "State
Loans "); and
WHEREAS, after due consideration it appears to this Council that some of the State
Loans may be repaid prior to maturity with proceeds of the Bonds authorized herein at a
substantial savings to the City and its ratepayers; and
WHEREAS, the ordinances authorizing the issuance of the Outstanding Parity Bonds
(collectively, the "Outstanding Parity Bond Ordinances ") provide that additional water and
wastewater utility revenue bonds may be issued on a parity of lien with the Outstanding Parity
Bonds if certain conditions are met; and
WHEREAS, this Council wishes to delegate authority to the Chief Financial Officer (the
"Designated Representative "), for a limited time, to approve the selection of State Loans to be
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• repaid prior to maturity and the interest rates, maturity dates, redemption terms and principal
maturities for the Bonds within the parameters set by this ordinance; and
WHEREAS, the City has received a proposal from Seattle- Northwest Securities
Corporation, Seattle, Washington (the "Underwriter ") and now desires to issue and sell the
Bonds to the Underwriter as set forth herein;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PORT ANGELES,
WASHINGTON, DO ORDAIN, as follows:
Section 1. Definitions and Interpretation of Terms.
(a) Definitions. As used in this ordinance, the following words have the following
meanings:
Acquired Obligations means the Government Obligations acquired by the City under the
terms of this ordinance and the Escrow Agreement to effect the defeasance and refunding of the
Refunded Bonds.
Annual Debt Service, for any Fiscal Year or calendar year means the sum of:
(a) the interest due in such year on all outstanding Parity Bonds excluding, however,
interest to be paid from the proceeds of Parity Bonds,
(b) the principal of all outstanding Serial Bonds due in such year, and
(c) the Sinking Fund Requirement, if any, for such year.
For purposes of satisfying the rate covenant in Section 13 and the Future Parity Bond test
in Section 16, Annual Debt Service for any Fiscal Year or calendar year shall exclude any Debt
Service Offsets. If the interest rate on any such bonds is other than a fixed rate, the rate
applicable at the time of the computation shall be used; provided, however, that so long as the
• 2009 Bonds are outstanding the City may issue variable rate obligations payable from Gross
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•Revenue only as provided in Section 16 of this ordinance. From and after such time as no 2009
Bonds remain outstanding, if the interest rate on any Parity Bonds is other than a fixed rate, the
rate applicable at the time of computation shall be used unless such rate is less than an interest
rate equal to the yield to maturity equal to the higher of (i) the average of the SIFMA Municipal
Swap Index over the 60 month period immediately preceding the date of computation, or (ii) the
average of the SIFMA Municipal Swap Index over the 12 month period immediately preceding
the date of computation, as determined within ten days prior to the date of computation or, if
such computation is being made in connection with the certificate required for the issuance of
Future Parity Bonds, then within ten days prior to the date of such certificate.
Assessments mean assessments (including interest and penalties) levied in any utility
local improvement district of the City for the acquisition or construction of additions and
improvements to and extension of the System, if such assessments are pledged to be paid into the
Bond Account.
Average Annual Debt Service means the amount determined by dividing (a) the sum of
all interest and principal to be paid on all Parity Bonds from the date of determination to the last
maturity date of such Parity Bonds, by (b) the number of Fiscal Years or calendar years from and
including the Fiscal Year or calendar year in which the determination is made to the last Fiscal
Year or calendar year in which any of such Parity Bonds will be outstanding.
Bond Account means the 1994 Water and Wastewater Utility Revenue Bond Fund
created by Section 15 of Ordinance No. 2843 and continued pursuant to Section 11 of this
ordinance.
Bond Purchase Contract means the contract for the purchase of the Bonds between the
• Underwriter and the City, executed pursuant to Section 17.
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Bond Register means the books or records maintained by the Bond Registrar for the
purpose of registration of the Bonds.
Bond Registrar means, initially the fiscal agency of the State of Washington, whose
duties include registering and authenticating the Bonds, maintaining the Bond Register, effecting
transfer of ownership of the Bonds, and paying the principal of, premium, if any, and interest on
the Bonds.
Bond Year means each one -year period that ends on the date selected by the City. The
first and last Bond Years may be short periods. If no day is selected by the City before the earlier
of the final maturity date of the Bonds or the date that is five years after the date of issuance of
the Bonds, Bond Years end on each anniversary of the date of issue and on the final maturity date
of the Bonds.
Bonds mean the City's Water and Wastewater Utility Revenue Refunding Bonds, 2013,
issued in the aggregate principal amount of not to exceed $4,200,000 pursuant to this ordinance.
Call Date means November 1, 2013.
Chief Financial Officer means the duly appointed and acting Chief Financial Officer of
the City or the successor to the duties of that office.
City means the City of Port Angeles, a municipal corporation duly organized and existing
under the laws of the State of Washington.
Code means the federal Internal Revenue Code of 1986, as amended, and applicable
regulations.
Commission means the United States Securities and Exchange Commission.
Costs of Maintenance and Operation means all necessary operating expenses, current
maintenance expenses, expenses of reasonable upkeep and repairs, and insurance and
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administrative expenses of the System, but excludes depreciation, payments for debt service or
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into reserve accounts and costs of capital additions to or replacements of the System, taxation by
the City or payments in lieu of taxes.
Council means the Port Angeles City Council, as the general legislative body of the City
as the same is duly and regularly constituted from time to time.
Debt Service Account means the account of that name created in the Bond Account by
Section 15 of Ordinance No. 2843 and continued pursuant to Section 11 of this ordinance.
Debt Service Offset means receipts of the City that are not included in Gross Revenue
and that are legally available to pay debt service on Parity Bonds, including without limitation
federal interest subsidy payments, designated as such by the City.
Designated Representative means the Chief Financial Officer or his or her designee.
DTC means The Depository Trust Company, New York, New York, a limited purpose
trust company organized under the laws of the State of New York, as initial depository for the
Bonds or any successor substitute depository for the Bonds.
Escrow Agent means U.S. Bank National Association, Seattle, Washington.
Escrow Agreement means the Escrow Deposit Agreement to be dated as of the date of
closing of the Bonds.
Fiscal Year means the fiscal year used by the City at any time. At the time of the
passage of this ordinance, the Fiscal Year is the twelve -month period beginning January 1 of
each year and ending December 31 of each year.
Future Parity Bonds mean any revenue bonds, revenue warrants or other revenue
obligations that may be issued in the future with a lien on money in the Revenue Fund to pay and
• secure the payment of the principal thereof and interest thereon equal to the lien created on the
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• money in such Fund to pay and secure the payment of the principal of and interest on the
Outstanding Parity Bonds and the Bonds.
Government Obligations means those obligations now or hereafter defined as such in
chapter 39.53 RCW, as this chapter may be hereafter amended or restated.
Gross Revenue means all earnings, revenue and money, except Assessments, received by
the City from or on account of the operation of the System, including proceeds from the sale,
lease or other disposition of any of the properties or facilities of the System, and the income from
investments of money in the Revenue Fund and any bond fund or from any other investment
thereof except the income from investments irrevocably pledged to the payment of revenue bonds
pursuant to a plan of retirement or refunding. The term "Gross Revenue" does not include grants
or bond proceeds, but does include federal or state reimbursements of operating expenses to the
extent such expenses are included as "Costs of Maintenance and Operation."
Letter of Representations means the Blanket Issuer Letter of Representations given by
the City to DTC, as amended from time to time.
Moody's means Moody's Investors Service Inc., a corporation duly organized and
existing under and by virtue of the laws of the State of Delaware, or its successor.
MSRB means the Municipal Securities Rulemaking Board or any successor to its
functions.
Net Revenue means the Gross Revenue less the Costs of Maintenance and Operation.
Outstanding Parity Bond Ordinances mean the ordinances authorizing the issuance of
the Outstanding Parity Bonds identified in the recitals to this ordinance.
Outstanding Parity Bonds means the parity water and wastewater utility revenue bonds
• of the City identified in the recitals to this ordinance.
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Parity Bonds means the Outstanding Parity Bonds, the Bonds and any Future Parity
• Bonds.
Permitted Investments means investments that are legal investments for the City at the
time of such investment; provided, however, the City shall comply with the definitions of
"Permitted Investments" as provided in the Outstanding Parity Bond Ordinances so long as the
Outstanding Parity Bonds remain outstanding.
Private Person means any natural person engaged in a trade or business or any trust,
estate, partnership, association, company or corporation.
Private Person Use means the use of property in a trade or business by a Private Person if
such use is other than as a member of the general public. Private Person Use includes ownership
of the property by the Private Person as well as other arrangements that transfer to the Private
Person the actual or beneficial use of the property (such as a lease, management or incentive
payment contract or other special arrangement) in such a manner as to set the Private Person
apart from the general public. Use of property as a member of the general public includes
attendance by the Private Person at municipal meetings or business rental of property to the
Private Person on a day -to -day basis if the rental paid by such Private Person is the same as the
rental paid by any Private Person who desires to rent the property. Use of property by nonprofit
community groups or community recreational groups is not treated as Private Person Use if such
use is incidental to the governmental uses of property, the property is made available for such use
by all such community groups on an equal basis and such community groups are charged only a
de minimis fee to cover custodial expenses.
Professional Utility Consultant means the independent person(s) or firm(s) selected by
the City having a favorable reputation for skill and experience with water, wastewater and storm
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water systems of comparable size and character to the System in such areas as are relevant to the
purposes for which they are retained.
Qualified Insurance means any unconditional municipal bond insurance policy or surety
bond issued by any insurance company licensed to conduct an insurance business in any state of
the United States or by a service corporation acting on behalf of one or more such insurance
companies, which insurance company or service corporation, as of the time of issuance of such
policy or surety bond, is then rated in one of the two highest rating categories by Moody's or any
other rating agency then maintaining a rating on the Bonds.
Qualified Letter of Credit means any irrevocable letter of credit issued by a bank for the
account of the City and for the benefit of the owners of Parity Bonds, provided that such bank
maintains an office, agency or branch in the United States, and provided further, that, as of the
time of issuance of such letter of credit, such bank is currently rated in one of the two highest
rating categories by either Moody's or any other rating agency then maintaining a rating on the
Bonds.
Rate Stabilization Fund means the fund of that name created pursuant to Section 13 of
Ordinance No. 2843 and continued pursuant to Section 10 of this ordinance.
Refunded Bonds mean the 2003 Bonds defeased to maturity or refunded prior to maturity
pursuant to Section 8 of this ordinance.
Refunding Account means the account by that name established pursuant to Section 8 of
this ordinance.
Registered Owner means the person named as the registered owner of a Bond in the Bond
Register. For so long as the Bonds are held in book -entry only form, DTC will be deemed to be
• the sole Registered Owner.
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Reserve Account means the account of that name in the Bond Account created pursuant
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to Ordinance No. 2843 and continued pursuant to Section 11 of this ordinance.
Reserve Account Requirement means, as of any date of calculation, the lesser of
maximum Annual Debt Service on the outstanding Parity Bonds or 125% of Average Annual
Debt Service on the outstanding Parity Bonds; provided, that at the time of issuance of any series
of Parity Bonds, the portion of the Reserve Account Requirement allocable to a series of Parity
Bonds will not exceed 10% of the initial principal amount of that series of Parity Bonds.
Revenue Fund means the special fund of the City known as the "City of Port Angeles
Water and Wastewater Utility Revenue Fund" created in the office of the Chief Financial Officer
pursuant to Section 2 of Ordinance No. 2843 and continued pursuant to Section 9 of this
ordinance.
Rule means the Commission's Rule 15c2 -12 under the Securities Exchange Act of 1934,
as the same may be amended from time to time.
Serial Bonds means Parity Bonds other than Term Bonds.
Sinking Fund Requirement means, for any Fiscal Year or calendar year, the principal
amount of Term Bonds required to be purchased, redeemed or paid at maturity in such year as
established by the ordinance of the City authorizing the issuance of such Term Bonds.
State Loans means Public Works Trust Fund loans, Drinking Water Revolving Fund
loans, and similar loans to the City for purposes related to the System that are administered by
the Public Works Board, Department of Commerce, or other successor or similar state agencies,
and are secured by a pledge of Gross Revenue.
System means the City's combined water supply and distribution utility, sanitary sewage
• collection and wastewater treatment utility, and storm water utility as the same now exists and as
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it may hereafter be added to, improved and extended for as long as any of the Bonds are
outstanding.
Term Bonds mean Parity Bonds of any principal maturity that are subject to mandatory
redemption and for which mandatory sinking fund payments are required, including the Bonds
identified as such in Section 5(b) of this ordinance.
Underwriter means Seattle - Northwest Securities Corporation' and its successors.
2003 Bonds mean the City's Water and Wastewater Utility Revenue Refunding Bonds,
2003, issued in the original principal amount of $4,220,000 under date of November 18, 2003,
pursuant to Ordinance No. 3148 of the City and currently outstanding in the principal amount of
$3,135,000.
2009 Bonds mean the City's Water and Wastewater Utility Revenue Refunding Bonds,
2009, issued in the original principal amount of $7,590,000 under date of September 29, 2009,
pursuant to Ordinance No. 3375 of the City and currently outstanding in the principal amount of
$6,315,000.
2010 Bonds mean the City's Water and Wastewater Utility Revenue Bonds, 2010, issued
in the original principal amount of $5,695,000 under the date of August 17, 2010, pursuant to
Ordinance No. 3407 of the City and currently outstanding in the principal amount of $4,630,000.
(b) Interpretation. In this ordinance, unless the context otherwise requires:
(1) The terms "hereby," "hereof," "hereto," "herein," "hereunder" and any
similar terms, as used in this ordinance, refer to this ordinance as a whole and not to any
particular article, section, subdivision or clause hereof, and the term "hereafter" shall mean after,
• ' Seattle - Northwest Securities Corporation is expected to merge with Piper Jaffray & Co.
effective July 12, 2013.
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and the term "heretofore" shall mean before, the date of this ordinance;
(2) Words of the masculine gender shall mean and include correlative words
of the feminine and neutral genders and words importing the singular number shall mean and
include the plural number and vice versa;
(3)
Words importing persons shall include firms, associations, partnerships
(including limited partnerships), trusts, corporations and other legal entities, including public
bodies, as well as natural persons;
(4) Any headings preceding the text of the several articles and sections of this
ordinance, and any table of contents or marginal notes appended to copies hereof, shall be solely
for convenience of reference and shall not constitute a part of this ordinance, nor shall they affect
its meaning, construction or effect; and
(5)
All references herein to "articles," "sections" and other subdivisions or
clauses are to the corresponding articles, sections, subdivisions or clauses hereof.
Section 2. Compliance with Parity Conditions. The Outstanding Parity Bond
Ordinances that authorized the issuance of the Outstanding Parity Bonds provide that the City
may issue Future Parity Bonds upon compliance with certain conditions. The Council hereby
finds, as required by those provisions of the Outstanding Parity Bond Ordinances as follows:
First, that the Bonds are being issued for the purpose of defeasing and /or refunding the
Refunded Bonds and repaying prior to maturity certain State Loans, and at the time of issuance of
the Bonds the City shall have on file a certificate satisfying the parity requirements of the
Outstanding Parity Bond Ordinances;
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Second, that at the time of the adoption of this ordinance and at the time of the issuance
of the Bonds there is not nor will there be any deficiency in the Bond Account or the Reserve
Account; and
Third, this ordinance provides that (i) the principal of and interest on the Bonds are
payable out of the Bond Account, (ii) payments will be made into the Bond Account to satisfy
the Sinking Fund Requirements on any Term Bonds, and (iii) proceeds of the Bonds or other
funds of the City legally available therefor will be deposited, if necessary, into the Reserve
Account in an amount sufficient to satisfy the Reserve Account Requirement for the Bonds, all as
required by the Outstanding Parity Bond Ordinances.
The parity conditions contained in the Outstanding Parity Bond Ordinances having been
complied with or assured, the payments required in this ordinance to be made out of the Revenue
Fund into the Bond Account and the accounts held therein to pay and secure the payment of the
principal of and interest on the Bonds shall constitute a lien and charge upon the money in such
Revenue Fund equal in rank with the lien and charge thereon for the payments required to be
made into the Bond Account to pay and secure the payment of the principal of and interest on the
Outstanding Parity Bonds.
Section 3. Authorization and Description of Bonds. For the purpose of defeasing
and /or refunding the Refunded Bonds, funding the Reserve Account, if necessary, repaying prior
to maturity certain State Loans, and paying costs of issuance of the Bonds, the City shall issue
and sell its water and wastewater utility revenue refunding bonds in the aggregate principal
amount of not to exceed $4,200,000 (the "Bonds ").
The Bonds shall be designated "City of Port Angeles, Washington, Water and
• Wastewater Utility Revenue Refunding Bonds, 2013 "; shall be dated as of their date of delivery;
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shall be fully registered as to both principal and interest; shall be in the denomination of $5,000
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each, or any integral multiple thereof, within a maturity; shall be numbered separately in such
manner and with any additional designation as the Bond Registrar deems necessary for purposes
of identification; and shall bear interest from their date payable on the first days of each
November and May, commencing as provided in the Bond Purchase Contract; and shall mature
on the dates and in the principal amounts set forth in the Bond Purchase Contract and as
approved by the Designated Representative pursuant to Section 17. The Bonds of any of the
maturities may be combined and issued as Term Bonds, subject to mandatory redemption as
provided in the Bond Purchase Contract.
The Bonds shall be obligations only of the Bond Account and the accounts held therein
and shall be payable and secured as provided herein. The Bonds do not constitute an
indebtedness or general obligation of the City within the meaning of the constitutional provisions
and limitations of the State of Washington.
Section 4. Registration, Exchange and Payments.
(a) Bond Registrar /Bond Register. The City hereby specifies and adopts the system
of registration approved by the Washington State Finance Committee from time to time through
the appointment of state fiscal agencies. The City shall cause a bond register to be maintained by
the Bond Registrar. So long as any Bonds remain outstanding, the Bond Registrar shall make all
necessary provisions to permit the exchange or registration or transfer of Bonds at its principal
corporate trust office. The Bond Registrar may be removed at any time at the option of the Chief
Financial Officer upon prior notice to the Bond Registrar and a successor Bond Registrar
appointed by the Chief Financial Officer. No resignation or removal of the Bond Registrar shall
• be effective until a successor shall have been appointed and until the successor Bond Registrar
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• shall have accepted the duties of the Bond Registrar hereunder. The Bond Registrar is
authorized, on behalf of the City, to authenticate and deliver Bonds transferred or exchanged in
accordance with the provisions of such Bonds and this ordinance and to carry out all of the Bond
Registrar's powers and duties under this ordinance. The Bond Registrar shall be responsible for
its representations contained in the Certificate of Authentication of the Bonds.
(b) Registered Ownership. The City and the Bond Registrar, each in its discretion,
may deem and treat the Registered Owner of each Bond as the absolute owner thereof for all
purposes (except as provided in Section 18 of this ordinance), and neither the City nor the Bond
Registrar shall be affected by any notice to the contrary. Payment of any such Bond shall be
made only as described in Section 4(h), but such Bond may be transferred as herein provided.
All such payments made as described in Section 4(h) shall be valid and shall satisfy and
discharge the liability of the City upon such Bond to the extent of the amount or amounts so paid.
(c) DTC Acceptance /Letters of Representations. The Bonds initially shall be held by
DTC acting as depository. To induce DTC to accept the Bonds as eligible for deposit at DTC,
the City has executed and delivered to DTC a Blanket Issuer Letter of Representations. Neither
the City nor the Bond Registrar will have any responsibility or obligation to DTC participants or
the persons for whom they act as nominees (or any successor depository) with respect to the
Bonds in respect of the accuracy of any records maintained by DTC (or any successor depository)
or any DTC participant, the payment by DTC (or any successor depository) or any DTC
participant of any amount in respect of the principal of or interest on Bonds, any notice which is
permitted or required to be given to Registered Owners under this ordinance (except such notices
as shall be required to be given by the City to the Bond Registrar or to DTC (or any successor
• depository)), or any consent given or other action taken by DTC (or any successor depository) as
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• the Registered Owner. For so long as any Bonds are held by a depository, DTC or its successor
depository shall be deemed to be the Registered Owner for all purposes hereunder, and all
references herein to the Registered Owners shall mean DTC (or any successor depository) or its
nominee and shall not mean the owners of any beneficial interest in such Bonds.
If any Bond shall be duly presented for payment and funds have not been duly provided
by the City on such applicable date, then interest shall continue to accrue thereafter on the unpaid
principal thereof at the rate stated on such Bond until it is paid.
(d) Use of Depository.
(1) The Bonds shall be registered initially in the name of "Cede & Co. ", as
nominee of DTC, with one Bond maturing on each of the maturity dates for the Bonds in a
denomination corresponding to the total principal therein designated to mature on such date.
Registered ownership of such Bonds, or any portions thereof, may not thereafter be transferred
except (A) to any successor of DTC or its nominee, provided that any such successor shall be
qualified under any applicable laws to provide the service proposed to be provided by it; (B) to
any substitute depository appointed by the Chief Financial Officer pursuant to subsection (2)
below or such substitute depository's successor; or (C) to any person as provided in
subsection (4) below.
(2) 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 Chief Financial
Officer to discontinue the system of book entry transfers through DTC or its successor (or any
substitute depository or its successor), the Chief Financial Officer may hereafter 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.
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(3) In the case of any transfer pursuant to clause (A) or (B) of subsection (1)
above, the Bond Registrar shall, upon receipt of all outstanding Bonds, together with a written
request on behalf of the Chief Financial Officer, issue a single new Bond for each maturity then
outstanding, registered in the name of such successor or such substitute depository, or their
nominees, as the case may be, all as specified in such written request of the Chief Financial
Officer.
(4) In the event that (A) DTC or its successor (or substitute depository or its
successor) resigns from its functions as depository, and no substitute depository can be obtained,
or (B) the Chief Financial Officer determines that it is in the best interest of the beneficial owners
of the Bonds that such owners be able to obtain physical Bond certificates, the ownership of such
Bonds may then be transferred to any person or entity as herein provided, and shall no longer be
held by a depository. The Chief Financial Officer shall deliver a written request to the Bond
Registrar, together with a supply of physical Bonds, to issue Bonds as herein provided in any
authorized denomination. Upon receipt by the Bond Registrar of all then outstanding Bonds
together with a written request on behalf of the Chief Financial Officer to the Bond Registrar,
new Bonds shall be issued in the appropriate denominations and registered in the names of such
persons as are requested in such written request.
(e) Registration of Transfer of Ownership or Exchange; Change in Denominations.
The transfer of any Bond may be registered and Bonds may be exchanged, but no transfer of any
such Bond shall be valid unless it is surrendered to the Bond Registrar with the assignment form
appearing on such Bond duly executed by the Registered Owner or such Registered Owner's duly
authorized agent in a manner satisfactory to the Bond Registrar. Upon such surrender, the Bond
Registrar shall cancel the surrendered Bond and shall authenticate and deliver, without charge to
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the Registered Owner or transferee therefor, a new Bond (or Bonds at the option of the new
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Registered Owner) of the same date, maturity and interest rate and for the same aggregate
principal amount in any authorized denomination, naming as Registered Owner the person or
persons listed as the assignee on the assignment form appearing on the surrendered Bond, in
exchange for such surrendered and cancelled Bond. Any Bond may be surrendered to the Bond
Registrar and exchanged, without charge, for an equal aggregate principal amount of Bonds of
the same date, maturity and interest rate, in any authorized denomination. The Bond Registrar
shall not be obligated to register the transfer or to exchange any Bond during the 15 days
preceding any interest payment or principal payment date any such Bond is to be redeemed.
(f) Bond Registrar 's Ownership of Bonds. The Bond Registrar may become the
Registered Owner of any Bond 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 a member of, or in any other capacity with respect to, any
committee formed to protect the right of the Registered Owners of Bonds.
(g) Registration Covenant. The City covenants that, until all Bonds have been
surrendered and canceled, it will maintain a system for recording the ownership of each Bond
that complies with the provisions of Section 149 of the Code.
(h) Place and Medium of Payment. 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
calculated on the basis of a year of 360 days and twelve 30 -day months. For so long as all Bonds
are held by a depository, payments of principal and interest thereon shall be made as provided in
accordance with the operational arrangements of DTC referred to in the Letter of
• Representations. In the event that the Bonds are no longer held by a depository, interest on the
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Bonds shall be paid by check or draft mailed to the Registered Owners at the addresses for such
•
Registered Owners appearing on the Bond Register on the fifteenth day of the month preceding
the interest payment date, or upon the written request of a Registered Owner of more than
$1,000,000 of Bonds (received by the Bond Registrar at least 15 days prior to the applicable
payment date), such payment shall be made by the Bond Registrar by wire transfer to the account
within the United States designated by the Registered Owner. Principal of the Bonds shall be
payable upon presentation and surrender of such Bonds by the Registered Owners at the principal
office of the Bond Registrar.
Section 5. Redemption; Purchase of Bonds.
(a) Mandatory Redemption of Term Bonds and Optional Redemption, if any. The
Bonds shall be subject to optional redemption on the dates, at the prices and under the terms set
forth in the Bond Purchase Contract approved by the Designated Representative pursuant to
Section 17. The Bonds shall be subject to mandatory redemption to the extent, if any, set forth in
the Bond Purchase Contract and as approved by the Designated Representative pursuant to
Section 17.
(b) Purchase of Bonds. The City reserves the right to use at any time any surplus
Revenue of the System, or other available funds, to purchase for retirement any of the Bonds at
any price deemed reasonable by the City.
(c) Selection of Bonds for Redemption. For as long as the Bonds are held in
book -entry only form, the selection of particular Bonds within a maturity to be redeemed shall be
made in accordance with the operational arrangements then in effect at DTC. If the Bonds are no
longer held by a depository, the selection of such Bonds to be redeemed and the surrender and
. reissuance thereof, as applicable, shall be made as provided in the following provisions of this
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• subsection (c). If the City redeems at any one time fewer than all of the Bonds having the same
maturity date, the particular Bonds or portions of Bonds of such maturity to be redeemed shall be
selected by lot (or in such manner determined by the Bond Registrar) in increments of $5,000. In
the case of a Bond of a denomination greater than $5,000, the City and the Bond Registrar shall
treat each Bond as representing such number of separate Bonds each of the denomination of
$5,000 as is obtained by dividing the actual principal amount of such Bond by $5,000. In the
event that only a portion of the principal sum of a Bond is redeemed, upon surrender of such
Bond at the principal office of the Bond Registrar there shall be issued to the Registered Owner,
without charge therefor, for the then unredeemed balance of the principal sum thereof, at the
option of the Registered Owner, a Bond or Bonds of like maturity and interest rate in any of the
denominations herein authorized.
(d) Notice of Redemption.
(1) Official Notice. For so long as the Bonds are held in by a depository,
notice of redemption shall be given in accordance with the operational arrangements of DTC as
then in effect, and neither the City nor the Bond Registrar will provide any notice of redemption
to any Beneficial Owners. The notice of redemption may be conditional. Thereafter (if the
Bonds are no longer held by a depository), notice of redemption shall be given in the manner
hereinafter provided. Unless waived by any owner of Bonds to be redeemed, official notice of
any such redemption (which redemption may be conditioned by the Bond Registrar on the receipt
of sufficient funds for redemption or otherwise) shall be given by the Bond Registrar on behalf of
the City by mailing a copy of an official redemption notice by first class mail at least 20 days and
not more than 60 days prior to the date fixed for redemption to the Registered Owner of the Bond
•
•
or Bonds to be redeemed at the address shown on the Register or at such other address as is
furnished in writing by such Registered Owner to the Bond Registrar.
All official notices of redemption shall be dated and shall state:
(A) the redemption date,
(B) the redemption price,
(C) if fewer than all outstanding Bonds are to be redeemed, the
identification by maturity (and, in the case of partial redemption, the respective principal
amounts) of the Bonds to be redeemed,
(D) that unless conditional notice of redemption has been given and
such conditions have either been satisfied or waived, 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 Bond Registrar.
On or prior to any redemption date, the City shall deposit with the Bond
Registrar an amount of money sufficient to pay the redemption price of all the Bonds or portions
of Bonds which are to be redeemed on that date.
(2) Effect of Notice; Bonds Due. If an unconditional notice of redemption has
been given or if the conditions set forth in a conditional notice of redemption have been satisfied
or waived, the Bonds or portions of Bonds to be redeemed shall, on the redemption date, become
due and payable at the redemption price therein specified, and from and after such date such
Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for
• redemption in accordance with said notice, such Bonds shall be paid by the Bond Registrar at the
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IIIredemption price. Installments of interest due on or prior to the redemption date shall be payable
as herein provided for payment of interest. All Bonds which have been redeemed shall be
canceled by the Bond Registrar and shall not be reissued.
(3) Additional Notice. In addition to the foregoing notice, further notice shall
be given by the City as set out below, but no defect in said further notice nor any failure to give
all or any portion of such further notice shall in any manner defeat the effectiveness of a call for
redemption if notice thereof is given as above prescribed. Each further notice of redemption
given hereunder shall contain the information required above for an official notice of redemption
plus (A) the CUSIP numbers of all Bonds being redeemed; (B) the date of issue of the Bonds as
originally issued; (C) the rate of interest borne by each Bond being redeemed; (D) the maturity
date of each Bond being redeemed; and (E) any other descriptive information needed to identify
accurately the Bonds being redeemed. Each further notice of redemption may be sent at least
20 days before the redemption date to each party entitled to receive notice pursuant to Section 18
and with such additional information as the City shall deem appropriate, but such mailings shall
not be a condition precedent to the redemption of such Bonds.
(4) Amendment of Notice Provisions. The foregoing notice provisions of this
Section 5, including but not limited to the information to be included in redemption notices and
the persons designated to receive notices, may be amended by additions, deletions and changes in
order to maintain compliance with duly promulgated regulations and recommendations regarding
notices of redemption of municipal securities.
•
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S
Section 6. Form of Bonds. The Bonds shall be in substantially the following form:
UNITED STATES OF AMERICA
NO. $
STATE OF WASHINGTON
CITY OF PORT ANGELES
WATER AND WASTEWATER UTILITY REVENUE REFUNDING BOND, 2013
INTEREST RATE:
MATURITY DATE: CUSIP NO:
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
Dollars
The City of Port Angeles, Washington (the "City "), a municipal corporation of the State
of Washington, for value received hereby promises to pay to the Registered Owner identified
above, or registered assigns, on the Maturity Date set forth above the Principal Amount set forth
above, and to pay interest thereon from the date hereof, or the most recent date to which interest
has been paid or duly provided for, at the Interest Rate set forth above payable on the first days of
each November and May, commencing on
Both principal of and interest on this bond are payable in lawful money of the United
States of America. Interest and principal shall be paid as provided in the Blanket Issuer Letter of
Representations (the "Letter of Representations ") by the City to The Depository Trust Company
( "DTC "). The fiscal agency of the State of Washington has been appointed by the City as the
authenticating agent, paying agent and registrar for the bonds of this issue (the "Bond Registrar ").
Capitalized terms used in this bond that are not specifically defined have the meanings given
such terms in Ordinance No. of the City adopted on July 16, 2013 (the "Bond
Ordinance "). Reference is made to the Bond Ordinance and any and all modifications and
amendments thereto for a description of the nature and extent of the security for the bonds of this
issue, the funds or revenues pledged, and the terms and conditions upon which such bonds are
issued.
This bond is one of a series of bonds in the aggregate principal amount of $ (the
"Bonds "), issued pursuant to Ordinance No. passed by the City Council on July 16,
2013 (the "Bond Ordinance "), to refund certain outstanding water and wastewater utility revenue
bonds, [to fund the Reserve Account,] [to repay prior to maturity certain State Loans], and to pay
costs of issuing the bonds. Unless otherwise defined on this bond, capitalized terms used herein
have the meanings given them in the Bond Ordinance.
The principal of and interest on the Bonds are payable solely out of the special fund of the
City known as the "1994 Water and Wastewater Utility Revenue Bond Fund" (the "Bond
• Account ") established by Ordinance No. 2843 of the City. The Bonds are special limited
obligations of the City and are not obligations of the State of Washington or any political
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subdivision thereof other than the City, and neither the full faith and credit nor the taxing power
• of the City or the State of Washington is pledged to the payment of the Bonds.
Under the Bond Ordinance, the City is obligated to set aside and pay into the Bond
Account out of Gross Revenue of the System certain fixed amounts sufficient to pay when due
the principal of and interest and premium, if any, on the Bonds and all other Parity Bonds. To
the extent provided by the Bond Ordinance, the amounts pledged to be paid from Gross Revenue
into the Bond Account and accounts therein are a lien and charge thereon equal in rank to the lien
and charge upon Gross Revenue of the amounts required to pay and secure the payment of certain
outstanding Parity Bonds and any Future Parity Bonds that the City may issue hereafter, and
superior to all other liens and charges of any kind or nature, except the Costs of Maintenance and
Operation of the System.
The Bond Ordinance sets forth covenants of the City to secure the payment of Parity
Bonds, including but not limited to covenants relating to rates and charges of the System,
operations of the System, and the issuance of Future Parity Bonds.
The Bonds are subject to redemption prior to maturity as provided in the Bond Purchase
Contract. The Bonds may be transferred and exchanged upon surrender to the Bond Registrar as
provided in the Bond Ordinance.
The Bonds are not "private activity bonds" as such term is defined in the Internal
Revenue Code of 1986, as amended (the "Code "). The City has designated the Bonds as
"qualified tax - exempt obligations" within the meaning of Section 265(b)(3)(B) of the Code.
This bond will not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Bond Ordinance until the Certificate of Authentication hereon has
been manually signed by the Bond Registrar.
It is hereby certified, recited and declared that all acts, conditions and things required by
the Constitution and statutes of the State of Washington to exist, to have happened and to have
been performed precedent to and in the issuance of this bond do exist, have happened and have
been performed in due time, form and manner as prescribed by law, and that the amount of this
bond, together with all other obligations or indebtedness of the City, does not exceed any
constitutional or statutory limitations of indebtedness.
IN WITNESS WHEREOF, the City of Port Angeles, Washington, has caused this bond to
be signed by the manual or facsimile signature of its Mayor, attested by the manual or facsimile
signature of the City Clerk, and seal of the City to be impressed or reproduced hereon, all as of
, 2013.
(SEAL)
•
CITY OF PORT ANGELES, WASHINGTON
By [Manual or Facsimile Signature]
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Mayor
•
Attest:
[Manual or Facsimile Signature]
City Clerk
Date of Authentication:
CERTIFICATE OF AUTHENTICATION
This is one of the Water and Wastewater Utility Revenue Refunding Bonds, 2013, of the
City of Port Angeles, Washington, dated , 2013, as described in the within
mentioned Bond Ordinance.
WASHINGTON STATE FISCAL AGENCY,
Bond Registrar
By
Authorized Officer
Section 7. Execution of Bonds. The Bonds shall be executed on behalf of the City by
the facsimile or manual signatures of the Mayor and the City Clerk and shall have the seal of the
City impressed or a facsimile thereof imprinted, or otherwise reproduced thereon.
In the event any officer who shall have signed or whose facsimile signatures appear on
any of the Bonds shall cease to be such officer of the City before said Bonds shall have been
authenticated or delivered by the Bond Registrar or issued by the City, such Bonds may
nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and
issuance, shall be as binding upon the City as though said person had not ceased to be such
officer. Any Bond may be signed and attested on behalf of the City by such persons who, at the
actual date of execution of such Bond shall be the proper officer of the City, although at the
original date of such Bond such persons were not such officers of the City.
Only such Bonds as shall bear thereon a Certificate of Authentication manually executed
by an authorized representative of the Bond Registrar shall be valid or obligatory for any purpose
• or entitled to the benefits of this ordinance. Such Certificate of Authentication shall be
conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and
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•
•
delivered hereunder and are entitled to the benefits of this ordinance. The Bond Registrar shall
be responsible for its representations contained in the Certificate of Authentication on the Bonds.
Section 8. Application of Bond Proceeds; Refunding Plan.
(a) Application of Bond Proceeds. Proceeds of the Bonds shall be disbursed as
follows:
(1) The amount necessary to carry out the plan of refunding for the Refunded
Bonds as set forth below shall be transferred to the Escrow Agent as proved herein and in the
Escrow Deposit Agreement;
(2) The amount necessary to repay prior to maturity those State Loans, if any,
selected by the Designated Representative pursuant to Section 17 of this ordinance shall be used
for such purpose within 60 days of the issuance of the Bonds;
(3)
The amount necessary, if any, to satisfy the Reserve Account Requirement
shall be deposited into the Reserve Account; and
(4) The remaining proceeds of the Bonds shall be used to pay costs of
issuance of the Bonds as set forth herein and in the Bond Purchase Contract.
Any part of the proceeds of the Bonds remaining after such disbursements are made may
be transferred to the Debt Service Account.
(b) Refunding Plan. For the purpose of realizing a debt service savings and
benefiting the ratepayers of the System, the Council proposes to refund and defease the Refunded
Bonds as set forth herein. The Refunded Bonds shall include those 2003 Bonds designated by
the Designated Representative when the Bonds are sold pursuant to the Bond Purchase Contract.
Proceeds of the Bonds, and other available funds of the City, shall be deposited with the Escrow
Agent pursuant to the Escrow Agreement, to be used immediately upon receipt thereof to defease
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•
•
the Refunded Bonds as authorized by Ordinance No. 3148 and to pay costs of issuance of the
Bonds.
The net proceeds deposited with the Escrow Agent shall be used to defease the Refunded
Bonds and discharge the obligations thereon by either depositing cash with the Escrow Agent to
be held in a non - interest bearing account or by the purchase of certain Government Obligations
(which obligations so purchased, are herein called "Acquired Obligations ") which, together with
any necessary beginning cash balance, will provide for the payment of:
(1) interest on the Refunded Bonds due and payable on and prior to the Call
Date; and
(2) the redemption prices of the Refunded Bonds on the Call Date.
Such Acquired Obligations shall be purchased at a yield not greater than the yield
permitted by the Code and regulations relating to acquired obligations in connection with
refunding bond issues.
(c) Escrow Agent /Escrow Agreement. The City hereby appoints U.S. Bank National
Association, Seattle, Washington, as the Escrow Agent for the Refunded Bonds (the "Escrow
Agent "). Cash, if any, and the Acquired Obligations shall be deposited irrevocably with the
Escrow Agent in an amount sufficient to defease the Refunded Bonds. The proceeds of the
Bonds remaining after acquisition of the Acquired Obligations and provision for the necessary
beginning cash balance shall be utilized to pay expenses of the acquisition and safekeeping of the
Acquired Obligations and expenses of the issuance of the Bonds.
In order to carry out the purposes of this section, the Designated Representative is
authorized and directed to execute and deliver to the Escrow Agent, an Escrow Agreement.
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•
•
(d) Call for Redemption of Refunded Bonds. The City hereby irrevocably sets aside
sufficient funds from proceeds of the Bonds and its other available funds to make the payments
described above.
The City hereby irrevocably calls the Refunded Bonds for redemption on the Call Date in
accordance with the provisions of Ordinance No. 3148 authorizing the redemption and retirement
of the 2003 Bonds prior to their fixed maturities.
Said defeasance and call for redemption of the Refunded Bonds shall be irrevocable after
the issuance of the Bonds and delivery of funds or the Acquired Obligations to the Escrow
Agent.
The Escrow Agent is hereby authorized and directed to provide for the giving of notices
of the defeasance and the redemption of the Refunded Bonds in accordance with the applicable
provisions of Ordinance No. 3148. The costs of publication of such notices shall be an expense
of the City.
The Escrow Agent is hereby authorized and directed to pay to the Chief Financial Officer,
or, at the direction of the Chief Financial Officer, to the paying agent for the Refunded Bonds,
sums sufficient to pay, when due, the payments specified in this section. All such sums shall be
paid from the money and Acquired Obligations deposited with the Escrow Agent, and the income
therefrom and proceeds thereof, if any. All such sums so paid to said Chief Financial Officer
shall be credited to the Refunding Account hereby authorized to be created (the "Refunding
Account "). All money and Acquired Obligations deposited with the Escrow Agent and any
income therefrom shall be held, invested (but only at the direction of the Chief Financial Officer)
and applied in accordance with the provisions of this ordinance and with the laws of the State of
Washington for the benefit of the City and owners of the Refunded Bonds.
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•
•
The City will take such actions as are found necessary to see that all necessary and proper
fees, compensation and expenses of the Escrow Agent for the Refunded Bonds shall be paid
when due.
Section 9. Revenue Fund. Pursuant to Section 2 of Ordinance No. 2843, there has
heretofore been created in the office of the Chief Financial Officer a fund of the City known as
the "City of Port Angeles Water and Wastewater Utility Revenue Fund," which fund is hereby
confirmed and continued. The City hereby obligates and binds itself to pay all Gross Revenue as
collected into the Revenue Fund. The money in the Revenue Fund shall be held separate and
apart from all other funds and accounts of the City. The Gross Revenue deposited in the
Revenue Fund shall be used only for the following purposes and in the following order of
priority:
FIRST, to pay the Costs of Maintenance and Operation and to maintain a balance in the
Revenue Fund sufficient in amount to enable the City to continuously meet Costs of Maintenance
and Operation on a current basis;
SECOND, to make all payments required to be made into the Bond Account to pay the
interest on any Parity Bonds;
THIRD, to make all payments required to be made into the Bond Account to pay the
maturing principal of any Serial Bonds and to make all payments required to be made into the
Bond Account to satisfy the Sinking Fund Requirement;
FOURTH, to make all payments required to be made pursuant to a reimbursement
agreement or agreements (or other equivalent documents, including the payment obligations to
the insurers for the 2009 Bonds and the 2010 Bonds) in connection with Qualified Insurance or a
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Qualified Letter of Credit; provided that if there is not sufficient money to make all payments
under reimbursement agreements the payments will be made on a pro rata basis;
FIFTH, to make all payments required to be made into the Reserve Account to secure the
payment of the principal of and interest on outstanding Parity Bonds;
SIXTH, to make all payments required to be made into any revenue bond redemption
fund, revenue warrant redemption fund, debt service account, reserve account or bond retirement
account created to pay and secure the payment of the principal of and interest on any revenue
bonds, or revenue warrants or other revenue obligations of the City, including the State Loans,
having a lien upon Gross Revenue junior and inferior to the lien thereon for the payment of the
principal of and interest on the Parity Bonds; and
SEVENTH, to retire by redemption or purchase in the open market any outstanding water
and wastewater utility revenue bonds, warrants or obligations of the System, to make necessary
additions, betterments, improvements and repairs to or extensions and replacements of the
System, to make deposits into the Rate Stabilization Fund, or for any other lawful City purposes.
Section 10. Rate Stabilization Fund. Pursuant to Section 13 of Ordinance No. 2843, a
special fund of the City designated the "Water and Wastewater Rate Stabilization Fund"
(the "Rate Stabilization Fund ") has heretofore been established in anticipation of future increases
in revenue requirements of the System, which fund is hereby confirmed and continued. In
accordance with the provisions of Section 9 of Ordinance No. 2843 and Section 9 of this
ordinance, the City may from time to time appropriate or budget amounts in the Revenue Fund
for deposit in the Rate Stabilization Fund and may from time to time withdraw amounts
therefrom for deposit in the Revenue Fund to prevent or mitigate water and wastewater rate
• increases or for other lawful purposes of the City related to the System. Such deposits or
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withdrawals may be made up to and including the date ninety (90) days after the end of the fiscal
•
year for which the deposit or withdrawal will be effective.
Section 11. Bond Account. Pursuant to Section 15 of Ordinance No. 2843, there has
heretofore been created in the office of the Chief Financial Officer a fund of the City known as
the "1994 Water and Wastewater Utility Revenue Bond Fund" (the "Bond Account "), which
fund and the accounts therein are hereby confirmed and continued. The Bond Account is to be
drawn upon for the sole purpose of paying the principal of, premium if any, and interest on any
Parity Bonds. The money in the Bond Account shall be kept separate and apart from all other
funds and accounts of the City. All funds in the Bond Account are held in trust for the benefit of
the owners of all Parity Bonds at the time outstanding equally and ratably and without preference
or distinction as between Parity Bonds of different series and maturities.
(a) Debt Service Account. A special account known as the Debt Service Account has
been created in the Bond Account for the purpose of paying the principal of, premium, if any,
and interest on the Parity Bonds.
As long as any of the Bonds remain outstanding, the City hereby irrevocably obligates
and binds itself to set aside and pay from the Revenue Fund into the Debt Service Account, on or
before the date due, those amounts necessary, together with Gross Revenue collected and
deposited and such other money as is on hand and available therefor in the Debt Service
Account, to pay the interest or principal and interest next coming due on the outstanding Bonds.
The City covenants and agrees that if it issues any Future Parity Bonds that are Term
Bonds, it will provide in each ordinance authorizing the issuance of the same for annual
payments to be made from the Revenue Fund into the Debt Service Account sufficient, together
• with Gross Revenue collected and deposited and such other money as is on hand and available
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therefor in such account, to amortize the principal of future Parity Bonds that are Term Bonds on
•
or before the maturity date thereof.
(b) Reserve Account. A Reserve Account has been created in the Bond Account for
the purpose of securing the payment of the principal of and interest on the Parity Bonds. The
City hereby covenants and agrees that it will satisfy the Reserve Account Requirement for the
Bonds by depositing into the Reserve Account, from proceeds of the Bonds or other available
funds, an amount that will be sufficient to satisfy the Reserve Account Requirement with respect
to the Bonds.
The City further covenants and agrees that if it issues any Future Parity Bonds it will
provide in each ordinance authorizing the issuance of those Future Parity Bonds that on or prior
to the date of issuance of the Future Parity Bonds money will be deposited into the Reserve
Account, from proceeds of such bonds or other funds available therefor, so that the total amount
of money in the Reserve Account will at least equal the Reserve Account Requirement. The City
may substitute Qualified Insurance or a Qualified Letter of Credit for amounts required to be
deposited into the Reserve Account. Such Qualified Letter of Credit or Qualified Insurance shall
not be cancellable on less than five years notice. In the event of any cancellation, the Reserve
Account shall be funded in accordance with the provisions of this section providing for payment
in the event of a deficiency therein, as if the Parity Bonds that remain outstanding had been
issued on the date of such notice of cancellation.
The City further covenants and agrees that when the required deposits have been made
into the Reserve Account, it will at all times maintain therein an amount at least equal to the
Reserve Account Requirement, as redetermined in each calendar year with respect to the bonds
• secured by such Reserve Account. Whenever there is a sufficient amount in the Bond Account,
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•
including all accounts therein, to pay the principal of, premium, if any, and interest on all
outstanding Parity Bonds, the money in the Reserve Account may be used to pay the principal of,
premium, if any, and interest on the Parity Bonds secured thereby. Money in the Reserve
Account may also be withdrawn to redeem and retire, and to pay the premium, if any, and interest
due to such date of redemption, on the outstanding Parity Bonds secured by such Reserve
Account, as long as the money remaining on deposit in such Reserve Account is at least equal to
the Reserve Account Requirement determined with respect to the Parity Bonds then outstanding.
If the Bonds outstanding are ever refunded, the money set aside in the Reserve Account to
secure the payment thereof may be used to retire Bonds or may be transferred to any other
reserve account that may be created to secure the payment of any bonds issued to refund the
Bonds.
If there is a deficiency in the Debt Service Account to meet maturing installments of
either interest on or principal of and interest on the outstanding Parity Bonds payable out of such
Account, such deficiency shall be made up from the Reserve Account by the withdrawal of
money therefrom and by the sale or redemption of obligations held in the Reserve Account, if
necessary, in such amounts as will provide cash in the Reserve Account sufficient to make up
any such deficiency, and if a deficiency still exists immediately prior to an interest payment date
and after the withdrawal of cash, the City shall then draw from any Qualified Letter of Credit,
Qualified Insurance, or other equivalent credit facility in sufficient amount to make up the
deficiency. Such draw shall be made at such times and under such conditions as the agreement
for such Qualified Letter of Credit or such Qualified Insurance shall provide. If more than one
Qualified Letter of Credit or Qualified Insurance is available, draws shall be made ratably
• thereon to make up the deficiency. Any deficiency created in the Reserve Account by reason of
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•
•
any such withdrawal shall then be made up from money in the Revenue Fund first available after
making the payments required to be made under paragraphs "FIRST" through "FOURTH" of
Section 9 of this ordinance.
(c)
Lien of Bond Account. The Bonds, together with the interest thereon, shall be
payable from Gross Revenue, and such Gross Revenue is hereby pledged and set aside out of the
Revenue Fund into the Bond Account. Said amounts so pledged are hereby declared to be a lien
and charge upon Gross Revenue and the money in the Revenue Fund equal to the lien and charge
thereon to secure and pay the principal of and interest on the Outstanding Parity Bonds, the
Bonds and any Future Parity Bonds and superior to all other charges of any kind or nature, except
the Costs of Maintenance and Operation.
(d) Investment of Money in Bond Account. All money in the Debt Service Account or
Reserve Account may be kept in cash or invested in Permitted Investments maturing not later
than the last maturity of the Bonds outstanding at the time of such purchase. Interest earned on
or profits made from the sale of such investments shall be deposited in and become a part of the
Revenue Fund.
Section 12. Adequacy of Revenues. The Council hereby declares that in fixing the
amounts to be paid into the Bond Account as hereinbefore provided it has exercised due regard
for the Costs of Maintenance and Operation and has not obligated the City to set aside and pay
into the Bond Account a greater amount of money in the Revenue Fund than in its judgment will
be available over and above such Costs of Maintenance and Operation.
Section 13. Covenants and Agreements. The City hereby covenants with the owner of
each of the Bonds for as long as any of the same remain outstanding as follows:
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•
(a) Rates and Charges. The City will establish, maintain and collect lawful rates and
charges for the use of the services and facilities of the System, and will adjust such rates and
charges from time to time so that:
(1) Gross Revenue will at all times be sufficient (a) to pay all Costs of
Maintenance and Operations and to pay all taxes, assessments or other governmental charges
lawfully imposed on the System or the revenue therefrom or payments in lieu thereof and any and
all other amounts that the City may now be and hereafter become obligated to pay from Gross
Revenue by law or contract, and (b) together with Assessments actually collected, to pay the
principal of and interest on all outstanding Parity Bonds as and when the same become due and
payable, to make all payments required to be made into the Bond Account to satisfy the Sinking
Fund Requirement, and to make when due all payments required to be made into the Reserve
Account.
(2) The Net Revenue in each Fiscal Year will equal at least 1.25 times Annual
Debt Service for such year (after deducting Assessments actually collected for such year). For
the purpose of meeting the requirement of this paragraph there may be added to Net Revenue for
any Fiscal Year any amount withdrawn from the Rate Stabilization Fund and deposited in the
Revenue Fund. There shall be subtracted from Net Revenue for any Fiscal Year any amounts in
such year withdrawn from the Revenue Fund and deposited into the Rate Stabilization Fund in
such Fiscal Year. Annual Debt Service for purposes of this rate covenant shall be adjusted to
reflect any Debt Service Offset.
(b) Maintenance of System. The City will at all times keep and maintain the System
in good repair, working order and condition, and will at all times operate the same and the
• business in connection therewith in an efficient manner and at a reasonable cost.
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(c) Sale or Disposition of the System. The City will not sell or otherwise dispose of
the System in its entirety unless simultaneously with such sale or other disposition, the City
provides for payment into the Bond Account of cash or Government Obligations sufficient
together with interest to be earned thereon to pay the principal of and interest on the then
outstanding Parity Bonds, nor will the City sell or otherwise dispose of any part of the useful
operating properties of the System unless the City receives the prior written consent of the
municipal bond insurer for the 2009 Bonds (so long as the 2009 Bonds are outstanding) and the
municipal bond insurer for the 2010 Bonds (so long as the 2010 Bonds are outstanding) and
replaces such facilities or provides for payment into the Bond Account of the greater of:
(1) An amount that will be in the same proportion to the net amount of Parity
Bonds then outstanding (defined as the total amount of the Parity Bonds less the amount of cash
and investments in the Bond Account and accounts therein) that the Net Revenue from the
portion of the System sold or disposed of for the preceding year bears to the total Net Revenue
for such period; or
(2) An amount that will be in the same proportion to the net principal amount
of Parity Bonds then outstanding that the book value of the part of the System sold or disposed of
bears to the book value of the entire System immediately prior to such sale or disposition.
The proceeds of any such sale or disposition of a portion of the properties of the System
(to the extent required above) shall be paid into the Bond Account.
Notwithstanding any other provision of this subsection, the City may sell or otherwise
dispose of any of the works, plant, properties and facilities of the System or any real or personal
property comprising a part of the same with a value less than 2% of the net utility plant of the
System or that has become unserviceable, inadequate, obsolete or unfit to be used in the
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operation of the System, or no longer necessary, material to or useful in such operation, without
making any deposit into the Bond Account.
(d) Collection of Assessments. The City will promptly collect all Assessments levied
in any utility local improvement district now or hereafter created to secure the payment of the
principal of and interest on any Parity Bonds and shall pay the same into the Bond Account
without allocation of such Assessments to any particular series of Parity Bonds. It is hereby
provided further, however, that nothing in this ordinance or in this subsection shall be construed
to prohibit the City from issuing revenue bonds having a lien on Gross Revenue junior to the lien
on such revenue for the payment of the principal of and interest on Parity Bonds and pledging as
security for the payments of such junior lien bonds assessments levied in any utility local
improvement district that may have been created to pay part or all the cost of improvements to
the System for which such junior lien revenue bonds were specifically issued; provided,
however, that the City may not agree to acceleration as a remedy with respect to any bonds or
other obligations having a lien on Gross Revenue junior to the lien thereon of any Parity Bonds.
(e) Books and Accounts. The City will maintain complete books and records relating
to the operation of the System and its financial affairs, and will cause such books and records to
be audited annually, and cause to be prepared an annual financial and operating statement, which
statement will be mailed to any owner of Parity Bonds upon request.
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Insurance. The City will carry fire and extended coverage insurance on the
System as is ordinarily carried on the property of similar public utilities by other municipal
corporations engaged in the operation of the same, to the full insurable value thereof, and will
also carry adequate public liability insurance and other kinds of insurance as under good
• practices are ordinarily carried on the properties of similar public utilities by private companies
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engaged in the operation of the same; provided, however, that the City may, if the Council deems
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necessary and advisable, institute or continue a self - insurance program with respect to any or all
of the aforementioned risks. The premiums paid for all such insurance shall be regarded and paid
as a Cost of Maintenance and Operation.
(g) Delinquencies. The City will promptly collect all service charges and
Assessments, determine in a timely manner all delinquencies, and take all necessary legal action
to enforce collection of such delinquencies.
(h) No Free Service. Except as permitted by law, the City will not furnish any service
of the System to any customer whatsoever free of charge.
Section 14. Tax Covenants. The City covenants that it will not take or permit to be
taken on its behalf any action that would adversely affect the exemption from federal income
taxation of the interest on the Bonds and will take or require to be taken such acts as may
reasonably be within its ability and as may from time to time be required under applicable law to
continue the exemption from federal income taxation of the interest on the Bonds.
(a) Arbitrage Covenant. Without limiting the generality of the foregoing, the City
covenants that it will not take any action or fail to take any action with respect to the proceeds of
sale of the Bonds or any other funds of the City which may be deemed to be proceeds of the
Bonds pursuant to Section 148 of the Code and the regulations promulgated thereunder which, if
such use had been reasonably expected on the date of delivery of the Bonds to the initial
purchasers thereof, would have caused the Bonds as "arbitrage bonds" within the meaning of
such term as used in Section 148 of the Code.
The City represents that it has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that it is an issuer whose arbitrage certifications may not
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be relied upon. The City will comply with the requirements of Section 148 of the Code and the
•
applicable regulations thereunder throughout the term of the Bonds.
(b) Private Person Use Limitation for Bonds. The City covenants that for as long as
the Bonds are outstanding, it will not permit:
(1) More than 10% of the Net Proceeds of the Bonds to be used for any
Private Person Use; and
(2) More than 10% of the principal or interest payments on the Bonds in a
bond year to be directly or indirectly: (A) secured by any interest in property used or to be used
for any Private Person Use or secured by payments in respect of property used or to be used for
any Private Person Use, or (B) derived from payments (whether or not made to the City) in
respect of property, or borrowed money, used or to be used for any Private Person Use.
The City further covenants that, if:
(3) More than five percent of the Net Proceeds of the Bonds are to be used for
any Private Person Use; and
(4) More than five percent of the principal or interest payments on the Bonds
in a bond year are (under the terms of this ordinance or any underlying arrangement) directly or
indirectly:
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(A) secured by any interest in property used or to be used for any
Private Person Use or secured by payments in respect of property used or to be used for any
Private Person Use, or
(B) derived from payments (whether or not made to the City) in respect
of property, or borrowed money, used or to be used for any Private Person Use,
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then, (i) any Private Person Use of the projects described in subsection (3) hereof or Private
Person Use payments described in subsection (4) hereof that is in excess of the five percent
limitations described in such subsections (3) or (4) will be for a Private Person Use that is related
to the state or local governmental use of the projects financed and/or refinanced with the Bonds,
and (ii) any Private Person Use will not exceed the amount of Net Proceeds of the Bonds used for
the state or local governmental use portion of the projects to which the Private Person Use of
such portion of the projects relates. The City further covenants that it will comply with any
limitations on the use of the projects financed and /or refinanced with the Bonds by other than
state and local governmental users that are necessary, in the opinion of nationally recognized
bond counsel, to preserve the tax exemption of the interest on the Bonds.
(c) Modification of Tax Covenants. The covenants of this section are specified solely
to assure the continued exemption from regular income taxation of the interest on the Bonds. To
that end, the provisions of this section may be modified or eliminated without any requirement
for formal amendment thereof upon receipt of an opinion of nationally recognized bond counsel
that such modification or elimination will not adversely affect the tax exemption of interest on
any Bonds.
(d) Qualified Tax- Exempt Obligation. The City hereby designates the Bonds as
"qualified tax - exempt obligations" under Section 265(b)(3) of the Code for investment by
financial institutions. The City reasonably does not expect to issue more than $10,000,000 in
qualifying tax - exempt debt during calendar year 2013.
Section 15. Defeasance. In the event that the City, to effect the payment, retirement or
redemption of any Bond, sets aside in the Debt Service Account or in another special account,
cash or noncallable Government Obligations, or any combination of cash and/or noncallable
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Government Obligations, in amounts and maturities which, together with the known earned
income therefrom, are sufficient to redeem or pay and retire such Bond in accordance with its
terms and to pay when due the interest and redemption premium, if any, thereon, and such cash
and /or noncallable Government Obligations are irrevocably set aside and pledged for such
purpose, then no further payments need be made into the Debt Service Account for the payment
of the principal of and interest on such Bond. The owner of a Bond so provided for shall cease to
be entitled to any lien, benefit or security of this ordinance except the right to receive payment of
principal, premium, if any, and interest from the Debt Service Account or such special account,
and such Bond shall be deemed to be not outstanding under this ordinance.
In the event that the refunding plan provides that the Bonds being refunded or the
refunding bonds to be issued be secured by money and /or government obligations pending the
prior redemption of those Bonds being refunded and if such refunding plan also provides that
certain money and/or Government Obligations are pledged irrevocably for the prior redemption
of those Bonds included in the refunding plan, then only the debt service on the Bonds which are
not defeased Bonds and the refunding bonds, the payment of which is not so secured by the
refunding plan, shall be included in any computation of the coverage requirement for the
issuance of Future Parity Bonds and the annual computation of coverage for determining
compliance with the rate covenant.
The City shall give written notice of defeasance to the owners of all Bonds so provided
for within 30 days of the defeasance and to each party entitled to receive notice in accordance
with Section 18.
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Section 16. Issuance of Future Parity Bonds. The City hereby further covenants and
agrees with the owners of the Bonds for as long as any of the same remain outstanding as
follows:
(a) Parity Conditions. That it will not issue any bonds with a lien on Gross Revenue
superior to the lien of the Bonds on such revenue. The City may issue Future Parity Bonds for:
First, the purpose of acquiring, constructing and installing additions and improvements to
and extensions of, acquiring necessary equipment for, or making necessary replacements or
repairs and capital improvements to the System; or
Second, the purpose of refunding or purchasing and retiring at or prior to their maturity
any outstanding revenue bonds or other obligations payable out of Gross Revenue;
and to pledge that payments be made into the Bond Account for the payment of the
principal thereof and interest thereon out of the Revenue Fund sufficient to pay the principal of
and interest on such Future Parity Bonds and to maintain the reserves required therefor, which
such payments may rank equally with the payments out of such Revenue Fund into the Bond
Account and the Reserve Account to pay and secure the payment of the principal of and interest
on any Parity Bonds then outstanding, upon compliance with the following conditions:
(1) That at the time of the issuance of such Future Parity Bonds there is no
deficiency in the Bond Account and the Reserve Account.
(2) If there are special assessments levied in any utility local improvement
district in which additions and improvements to and extensions of the System will be constructed
from the proceeds of such Future Parity Bonds, the ordinance authorizing such Future Parity
Bonds must require that such special assessments be paid into the Bond Account.
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(3) If there are special assessments pledged to be paid into a warrant or bond
redemption fund for revenue bonds or warrants being refunded by Future Parity Bonds, the
ordinance authorizing such Future Parity Bonds must require such special assessments to be used
for the refunding or paid into the Bond Account.
(4) The principal of and interest on the Future Parity Bonds will be payable
out of the Bond Account, and the ordinance authorizing their issuance must further provide for
payments into the Bond Account to satisfy the Sinking Fund Requirement and payments into the
Reserve Account to satisfy the Reserve Account Requirement, all as required by Section 11 of
this ordinance.
(5) Prior to the delivery of any Future Parity Bonds, the City must have on file
in the office of the City Clerk either:
(A) from and after such time as no 2009 Bonds remain outstanding, a
certificate of the Chief Financial Officer showing that the Net Revenue (without the adjustments
described in subsection (a)(5)(B) below) in any twelve (12) consecutive months out of the
twenty -four (24) months immediately preceding the delivery of the bonds then proposed to be
issued, as determined from the financial statements of the System, will equal at least 1.25 times
the Annual Debt Service (after deducting Assessments, allocated to the years in which they
would be received if the unpaid balance of each assessment roll were paid in the remaining
number of installments with interest on the declining balance at the times and at the rate provided
in the ordinance confirming the assessment roll) for each such calendar or Fiscal Year for all
Parity Bonds plus the Future Parity Bonds proposed to be issued. Annual Debt Service for
purposes of this test shall be adjusted to reflect any Debt Service Offset; or
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(B) a certificate of a Professional Utility Consultant showing: that the
Net Revenue determined and adjusted as hereafter provided for each calendar or Fiscal Year after
the issuance of such Future Parity Bonds (the "Adjusted Net Revenue ") will equal at least
1.25 times the Annual Debt Service (after deducting Assessments, allocated to the years in which
they would be received if the unpaid balance of each assessment roll were paid in the remaining
number of installments with interest on the declining balance at the times and at the rate provided
in the ordinance confirming the assessment roll) for each such calendar or Fiscal Year for all
Parity Bonds plus the Future Parity Bonds proposed to be issued Annual Debt Service for
purposes of this test shall be adjusted to reflect any Debt Service Offset.
The Adjusted Net Revenue shall be the Net Revenue for a period of any twelve (12)
consecutive months out of the twenty -four (24) months immediately preceding the date of
delivery of such proposed Future Parity Bonds as adjusted by such Professional Utility
Consultant to take into consideration changes in Net Revenue estimated to occur under the
following conditions for each year after such delivery for so long as any Parity Bonds, including
the Future Parity Bonds proposed to be issued, shall be outstanding:
(i)
The additional Net Revenue that would have been received if any
change in rates and charges adopted prior to the date of such certificate and subsequent to the
beginning of such twelve (12) -month period, had been in force during the full twelve (12) -month
period;
(ii) The additional Net Revenue that would have been received if any
facility of the System that became fully operational after the beginning of such twelve
(12) -month period had been so operating for the entire period; and
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(iii) The additional Net Revenue estimated by such Professional Utility
Consultant to be received as a result of any additions, betterments and improvements to and
extensions of any facilities of the System that are (a) under construction at the time of such
certificate or (b) will be constructed from the proceeds of the Future Parity Bonds to be issued.
Such Professional Utility Consultant may rely upon, and his or her certificate shall have
attached thereto, financial statements of the System certified by the Chief Financial Officer
showing income and expenses for the period upon which the same is based.
The certificate of such Professional Utility Consultant shall be conclusive and the only
evidence required to show compliance with the provisions and requirements of this
subsection (a)(5)(B).
(b) Refunding. Notwithstanding the foregoing requirement, if Future Parity Bonds are
to be issued for the purpose of refunding at or prior to their maturity any part or all of the then
outstanding Parity Bonds, the certificate described in subsection (a)(5) of this section is not
required if the Chief Financial Officer provides a certificate stating that upon the issuance of such
Future Parity Bonds (1) total debt service on all Parity Bonds (including the refunding bonds but
not including the bonds to be refunded thereby) will decrease, and (2) the Annual Debt Service
for each year that any Parity Bonds (including the refunding bonds proposed to be issued) will be
outstanding will not increase by more than $5,000 by reason of the issuance of such Future Parity
Bonds.
(c)
Junior Lien Obligations. Nothing herein contained shall prevent the City from
issuing any revenue bonds, warrants or other obligations that are a charge upon the money in the
Revenue Fund junior or inferior to the payments required by this ordinance to be made into the
Bond Account and the Reserve Account; provided, however, that the City may not agree to
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acceleration as a remedy with respect to any bonds or other obligations having a lien on Gross
Revenue junior to the lien thereon of any Parity Bonds.
(d) Variable Rate Obligations. The City may not issue variable rate obligations
payable from Gross Revenue without the prior written consent of the municipal bond insurers
providing insurance for the 2009 Bonds (but for only so long as such 2009 Bonds remain
outstanding) and the 2010 Bonds (but for only so long as such 2010 Bonds remain outstanding).
Section 17. Sale of Bonds.
(a) Bond Sale. The Bonds shall be sold at negotiated sale to the Underwriter pursuant
to the terms of the Bond Purchase Contract. The Underwriter has advised the Council that
market conditions are fluctuating and, as a result, the most favorable market conditions may
occur on a day other than a regular meeting date of the Council. The Council has determined that
it would be in the best interest of the City to delegate to the Designated Representative for a
limited time the authority to approve the selection of the State Loans, if any, to be repaid prior to
maturity and the final interest rates, aggregate principal amount, principal amounts of each
maturity of the Bonds, and redemption rights for the Bonds.
The Designated Representative is hereby authorized to approve the final interest rates,
aggregate principal amount, principal maturities, selection of the Refunded Bonds, and
redemption rights for the Bonds in the manner provided hereafter so long as: (1) the aggregate
principal amount of the Bonds does not exceed $4,200,000, (2) the final maturity date for the
Bonds is no later than November 1, 2028, (3) the Bonds are sold (in the aggregate) at a price not
less than 98% and not greater than 125 %, (4) the Bonds are sold for a price that results in a
minimum net present value debt service savings over the Refunded Bonds and the State Loans, if
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any, to be refunded of 3.00 %, and (5) the true interest cost for the Bonds (in the aggregate) does
not exceed 4.15 %.
In determining whether or not to acquire a bond insurance policy, determining whether or
not to repay prior to maturity any of the outstanding State Loans, and establishing the final
interest rates, aggregate principal amounts, principal maturities and redemption rights for the
Bonds, the Designated Representative shall take into account those factors that, in his or her
judgment, will result in the lowest true interest cost on the Bonds to their maturity, including, but
not limited to current financial market conditions and current interest rates for obligations
comparable in tenor and quality to the Bonds. Subject to the terms and conditions set forth in
this section, the Designated Representative is hereby authorized to execute the Bond Purchase
Contract.
Following the execution of the Bond Purchase Contract, the Designated Representative
shall provide a report to the Council describing the final terms of the Bonds approved pursuant to
the authority delegated in this section. The authority granted to the Designated Representative by
this Section 17 shall expire 120 days after the effective date of this ordinance. If a Bond
Purchase Contract for the Bonds has not been executed within 120 days after the effective date of
this ordinance, the authorization for the issuance of the Bonds shall be rescinded, and the Bonds
shall not be issued nor their sale approved unless such Bonds shall have been re- authorized by
ordinance of the Council. The ordinance re- authorizing the issuance and sale of such Bonds may
be in the form of a new ordinance repealing this ordinance in whole or in part or may be in the
form of an amendatory ordinance approving a bond purchase contract or establishing terms and
conditions for the authority delegated under this Section 17.
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(b) Delivery of Bonds; Documentation. Upon the passage and approval of this
ordinance, the proper officials of the City including the Designated Representative, are
authorized and directed to undertake all action necessary for the prompt execution and delivery
of the Bonds to the Underwriter and further to execute all closing certificates and documents
required to effect the closing and delivery of the Bonds in accordance with the terms of the Bond
Purchase Contract.
(c) Preliminary and Final Official Statements. The Chief Financial Officer is hereby
authorized to ratify and to deem final the preliminary Official Statement relating to the Bonds for
the purposes of the Rule. The Chief Financial Officer is further authorized to ratify and to
approve for purposes of the Rule, on behalf of the City, the Official Statement relating to the
issuance and sale of the Bonds and the distribution of the Official Statement pursuant thereto
with such changes, if any, as may be deemed by him to be appropriate.
Section 18. Undertaking to Provide Ongoing Disclosure. This Section 18 constitutes
the City's written undertaking for the benefit of the owners and Beneficial Owners of the Bonds
as required by Section (b)(5) of the Rule.
(a) Financial Statements /Operating Data. The City agrees to provide or cause to be
provided to the MSRB, in accordance with the Rule, the following annual financial information
and operating data for the prior Fiscal Year (commencing in 2013 for the Fiscal Year ended
December 31, 2012):
(1) Annual financial statements of the System, which statements may or may
not be audited, prepared in accordance with the Budget Accounting and Reporting System
prescribed by the Washington State Auditor pursuant to RCW 43.09.200 (or any successor
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statute) and generally of the type included in the official statement for the Bonds under the
heading "Water, Wastewater and Stormwater Utility — Historical Coverage from Operations ";
(2) The principal amount of Parity Bonds and debt service coverage for Parity
Bonds;
(3) Water, wastewater and storm water rates; and
(4) Number of water, wastewater and storm water customers of the System.
Items (2) — (4) shall be required only to the extent that such information is not included in
the annual financial statements provided pursuant to (1).
The financial information and operating data described above shall be provided on or
before nine months after the end of the City's fiscal year. The City's fiscal year currently ends on
December 31. The City may adjust such fiscal year by providing written notice of the change of
fiscal year to the MSRB. In lieu of providing such annual financial information and operating
data, the City may cross -refer to other documents available to the public on the MSRB's internet
website or filed with the Commission.
If not provided as part of the annual financial information discussed above, the City shall
provide to the MSRB the City's audited annual financial statement prepared in accordance with
the Budget Accounting and Reporting System prescribed by the Washington State Auditor
pursuant to RCW 43.09.200 (or any successor statute) when and if available.
(b) Listed Events. The City agrees to provide or cause to be provided to the MSRB,
in a timely manner not in excess of ten business days after the occurrence of the event, notice of
the occurrence of any of the following events with respect to the Bonds:
• Principal and interest payment delinquencies;
• Non - payment related defaults, if material;
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• Unscheduled draws on debt service reserves reflecting financial difficulties;
• Unscheduled draws on credit enhancements reflecting financial difficulties;
• Substitution of credit or liquidity providers, or their failure to perform;
• Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or
final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 -
TEB) or other material notices or determinations with respect to the tax status of
the Bonds, or other material events affecting the tax status of the Bonds;
• Modifications to the rights of Bondholders, if material;
• Bond calls, if material, and tender offers;
• Defeasances;
• Release, substitution, or sale of property securing repayment of the Bonds, if
material;
• Rating changes;
• Bankruptcy, insolvency, receivership or similar event of the City;
• The consummation of a merger, consolidation, or acquisition involving the City or
the sale of all or substantially all of the assets of the City, other than in the
ordinary course of business, the entry into a definitive agreement to undertake
such an action or the termination of a definitive agreement relating to any such
actions, other than pursuant to its terms, if material; and
• Appointment of a successor or additional trustee or the change of name of a
trustee, if material.
Solely for purposes of disclosure, and not intending to modify this undertaking, the City
advises that no property secures payment of the Bonds.
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• (c) Notification Upon Failure to Provide Financial Data. The City agrees to provide
or cause to be provided to the MSRB, in a timely manner, notice of the City's failure to provide
the annual financial information described in subsection (a) above on or prior to the date set forth
in subsection (a) above.
(d) Format for Filings with the MSRB. All notices, financial information and
operating data required by this undertaking to be provided to the MSRB must be in an electronic
format as prescribed by the MSRB. All documents provided to the MSRB pursuant to this
undertaking must be accompanied by identifying information as prescribed by the MSRB.
(e) Termination /Modification. The City's obligations to provide annual financial
information and notices of listed events shall terminate upon the defeasance, prior redemption or
payment in full of all of the Bonds. Any provision of this section shall be null and void if the
City (1) obtains an opinion of nationally recognized bond counsel to the effect that the portion of
the Rule requiring that provision is invalid, has been repealed retroactively or otherwise does not
apply to the Bonds; and (2) notifies the MSRB of such opinion and the cancellation of the
provision.
Notwithstanding any other provision of this ordinance, the City may amend this
Section 18 with an approving opinion of nationally recognized bond counsel and in accordance
with the Rule. In the event of any amendment of a provision of this Section 18, the City will
describe the amendment in the next annual report, and will include a narrative explanation of the
reason for the amendment and its impact on the type (or in the case of a change of accounting
principles, on the presentation) of financial information or operating data being presented by the
City. In addition, if the amendment relates to the accounting principles to be followed in
preparing financial statements, (1) notice of such change will be given in the same manner as for
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a listed event under subsection (b), and (2) the annual report for the year in which the change is
made will present a comparison (in narrative form and also, if feasible, in quantitative form)
between the financial statements as prepared on the basis of the new accounting principles and
those prepared on the basis of the former accounting principles.
(f) Bond Owner's Remedies Under This Section. The right of any Bond Owner or
Beneficial Owner of Bonds to enforce the provisions of this section are limited to a right to
obtain specific enforcement of the City's obligations hereunder, and any failure by the City to
comply with the provisions of this undertaking shall not be an event of default with respect to the
Bonds. For purposes of this Section 18, `Beneficial Owner" means any person who has the
power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any
Bonds, including persons holding Bonds through nominees or depositories.
Section 19. Supplements and Amendments.
(a) The Council from time to time and at any time may adopt an ordinance or
ordinances supplemental hereof, which ordinance or ordinances thereafter shall become a part of
this ordinance, for any one or more or all of the following purposes:
(1) To add to the covenants and agreements of the City in this ordinance other
covenants and agreements thereafter to be observed, which shall not adversely affect the interests
of the owners of any Bonds or any Parity Bonds in any material respect, or to surrender any right
or power herein reserved to or conferred upon the City.
(2) To make such provisions for the purpose of curing any ambiguities or of
curing, correcting or supplementing any defective provision contained in this ordinance in regard
to such matters or questions as the Council may deem necessary or desirable and not inconsistent
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with this ordinance and which shall not adversely affect the interests of the owners of any Bonds
or any Parity Bonds in any material respect.
(3) To amend or supplement any provision contained in this ordinance for the
purpose of obtaining or maintaining a rating on the Bonds so long as such amendment or
supplement is not inconsistent with this ordinance and will not adversely affect the interests of
the owners of any Bonds or any Parity Bonds in any material respect.
Any such supplemental ordinance of the Council may be adopted without the consent of
the owners of any Bonds at any time outstanding, notwithstanding any of the provisions of
subsection (b) of this section; provided, however, that the City shall obtain an opinion of
nationally recognized bond counsel to the effect that such supplemental ordinance complies with
this subsection (a) and will not adversely affect the interests of the owners of any Bonds or any
Parity Bonds in any material respect.
(b) With the consent of the owners of not less than 65% in aggregate principal
amount of the Parity Bonds at the time outstanding, the Council may adopt an ordinance or
ordinances supplemental hereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this ordinance or of any supplemental ordinance;
provided, however, that no such supplemental ordinance shall:
(1) Extend the fixed maturity of any Parity Bonds, or reduce the rate of
interest thereon, or extend the time of payments of interest from their due date, or reduce the
amount of the principal thereof, or reduce any premium payable on the redemption thereof,
without the consent of the owner of each bond so affected; or
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(2) Reduce the aforesaid percentage of bond owners required to approve any
such supplemental ordinance, without the consent of the owners of all of the Parity Bonds then
outstanding.
It shall not be necessary for the consent of bond owners under this subsection (b) to
approve the particular form of any proposed supplemental ordinance, but it shall be sufficient if
such consent shall approve the substance thereof.
(c) Upon the adoption of any supplemental ordinance pursuant to the provisions of
this section, this ordinance shall be deemed to be modified and amended in accordance therewith,
and the respective rights, duties and obligations of the City under this ordinance and all owners
of Bonds outstanding hereunder shall thereafter be determined, exercised and enforced
thereunder, subject in all respects to such modification and amendments, and all the terms and
conditions of any such supplemental ordinance shall be deemed to be part of the terms and
conditions of this ordinance for any and all purposes.
Section 20. Lost or Destroyed Bonds. In case any Bonds are lost, stolen or destroyed,
the Bond Registrar may authenticate and deliver a new Bond or Bonds of like amount, date and
tenor to the Registered Owner thereof if the owner pays the expenses and charges of the Bond
Registrar and the City in connection therewith and files with the Bond Registrar and the City
evidence satisfactory to both that such Bond or Bonds were actually lost, stolen or destroyed and
of his or her ownership thereof, and furnishes the City and the Bond Registrar with indemnity
satisfactory to both.
Section 21. Severability. If a court of competent jurisdiction declares that any one or
more of the covenants and agreements in this ordinance to be performed by the City are contrary
• to law, then such covenant or covenants, agreement or agreements, will be null and void and will
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•
•
be deemed separable from the remaining covenants and agreements in this ordinance and will in
no way affect the validity of other provisions of this ordinance or of the Bonds.
Section 22. Effective Date. This ordinance will become effective five (5) days from
and after its passage and publication.
PASSED by the City Council of the City of Port Angeles, Washington, at a regular
meeting of the Council held on July 16, 2013.
Attest:
CITY OF PORT ANGELES, WASHINGTON
•
•
CERTIFICATE OF CITY CLERK
I, the undersigned, City Clerk of the City of Port Angeles, Washington, DO HEREBY
CERTIFY:
1. That the attached is a true and correct copy of Ordinance No. 314 j I
(the "Ordinance ") of the City, duly passed at a regular meeting of the City Council (the
"Council ") of the City held on July 16, 2013.
2. That said meeting was duly convened and held in all respects in accordance with
law, and to the extent required by law, due and proper notice of such meeting was given; that a
legal quorum was present throughout the meeting and a legally sufficient number of members of
the Council voted in the proper manner for the passage of said Ordinance; that all other
requirements and proceedings incident to the proper passage of said Ordinance have been fully
fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificate.
IN WITNESS WHEREOF, I have hereunto set my hand this 16th day of July, 2013.
Summary of Ordinances Adopted by the
Port Angeles City Council
On July 16, 2013
Ordinance No. 3481
THIS ORDINANCE of the City of Port Angeles, Washington, authorizes the issuance of water
and wastewater utility revenue refunding bonds of the City in the principal amount of not to
exceed $4,200,000, to defease and refund certain outstanding water and wastewater utility
revenue bonds and notes and to pay costs of issuing the bonds; providing the form, terms
and covenants of the bonds; authorizing the appointment of an escrow agent and execution
of an escrow agreement; and delegating certain authority to approve the final terms of the
bonds.
Ordinance No. 3482
This Ordinance of the City of Port Angeles, Washington, adopts the 2012 editions of the
International Building, Mechanical, Fire and Residential Codes, the 2012 Uniform
Plumbing Code with amendments and appendices, the 2012 International Energy
Conservation Code, Commercial, International Energy Conservation Code, Residential and
the International Property Maintenance Code.
The full texts of the Ordinances are available at City Hall in the City Clerk's office, on the City's
website at www.cityofpa.us, or will be mailed upon request. Office hours are Monday through
Thursday, 8:30 a.m. to 4:00 p.m., and Friday 8:30 a.m. to 12:30 p.m. These Ordinances shall
take effect five days following the date of publication by summary.
Janessa Hurd
City Clerk
Publish: July 24, 2013