HomeMy WebLinkAbout2709CITY OF PORT ANGELES, WASHINGTON
ORDINANCE NO. 2709
AN ORDINANCE OF THE CITY OF PORT ANGELES, WASHINGTON,
ESTABLISHING A PLAN AND SYSTEM FOR CAPITAL
IMPROVEMENTS; AUTHORIZING THE ISSUANCE OF ELECTRIC
REVENUE BONDS IN THE PRINCIPAL AMOUNT OF
$2,920,000 TO PROVIDE FUNDS TO PAY A PORTION OF
THE CITY'S ELECTRIC UTILITY CAPITAL IMPROVEMENT
PROGRAM; PROVIDING FOR THE ESTABLISHMENT OF
CERTAIN FUNDS AND ACCOUNTS; MAILING OTHER COVENANTS
AND AGREEMENTS IN CONNECTION WITH THE FOREGOING;
AND AUTHORIZING THE SALE OF SUCH BONDS.
Adopted September 1, 1992
Prepared by:
PRESTON THORGRIMSON SHIDLER GATES & ELLIS
Seattle, Wa®hington
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions 1
SECTION 1.2. Interpretation 9
ARTICLE II
FINDINGS AND DETERMINATIONS
SECTION 2.1. Plan and System. 10
SECTION 2.2. Best Interest of the City 10
SECTION 2.3. Revenues Sufficient 10
SECTION 2.4. Due Regard 10
ARTICLE III
AUTHORIZATION AND ISSUANCE OF BONDS
SECTION 3.1. Authorization of 1992 Bonds 11
SECTION 3.2. Additional Provisions of 1992
Bonds 11
SECTION 3.3. Reservation of Right to Purchase 12
SECTION 3.4. Optional Redemption of 1992
Bonds 12
SECTION 3.6. Mandatory Redemption of 1992
Bonds 13
SECTION 4.1.
SECTION 4.2.
ARTICLE IV
ISSUANCE OF ADDITIONAL BONDS
Authorization of Series of
Additional Bonds
Additional Bonds
ARTICLE V
GENERAL TERMS AND PROVISIONS OF BONDS
14
15
SECTION 5.1. Execution and Payment of Bonds 19
SECTION 5.2. Ownership of Bonds 19
SECTION 5.3. Bond Registrar 20
SECTION 5.4. Transfers and Exchanges 20
SECTION 5.5. Payment of Bonds and Interest 21
SECTION 5.6. Lost, Stolen, Destroyed or
Mutilated Bonds 21
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SECTION 5.7. Limitations on Duty of City to
Register, Exchange or Transfer
Bonds 22
SECTION 5.8. Paid or Surrendered Bonds Not to
be Reissued 22
SECTION 5.9. CUSIP Identification Numbers 22
SECTION 5.10. Issuance of Coupon or Bearer
Bonds 22
SECTION 5.11. Temporary Bonds 23
ARTICLE VI
REDEMPTION OF BONDS
SECTION 6.1. Notice of Redemption 23
SECTION 6.2. Payment of Redeemed Bonds; When
Interest on Bonds Called for
Redemption Ceases to Accrue 25
SECTION 6.3. Optional Redemption or Purchase
of Bonds 26
ARTICLE VII -
CREATION OF SPECIAL FUNDS AND ACCOUNTS
AND PAYMENTS THEREFROM
SECTION 7.1. Light Fund 26
SECTION 7.2. Bond Fund 29
SECTION 7.3. Construction Account 34
SECTION 7.4. Arbitrage Rebate 34
SECTION 7.5. Investment of Funds 35
ARTICLE VIII
DISPOSITION OF PROCEEDS
SECTION 8.1. Disposition of the Proceeds from
the Sale of the 1992 Bonds 36
ARTICLE IX
COVENANTS TO SECURE BONDS
SECTION 9.1. Security for Bonds 37
SECTION 9.2. Rate Covenant - General 38
SECTION 9.3. Rate Covenant - Debt Service
Coverage 38
SECTION 9.4. Restrictions on Contracting of
Obligations Secured by Revenues 39
SECTION 9.5. Covenant to Maintain System in
Good Condition 40
SECTION 9.6. Covenants Concerning Disposal of
Properties of System 40
SECTION 9.7. Insurance. 41
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SECTION 9.8. Books of Account 42
SECTION 9.9. Covenant Not to Render Service
Free of Charge 42
SECTION 9.10. Covenant to Make Only
Economically Sound Improvements 43
SECTION 9.11. Covenant to Pay Bond Principal
and Interest Punctually 43
SECTION 9.12. Covenant to Pay Taxes,
Assessments and Other Claims 43
SECTION 9.13. Covenant to Retain Competent
Management 44
SECTION 9.14. Further Assurances 44
SECTION 9.15. Tax Covenants 44
ARTICLE X
SUPPLEMENTAL AND AMENDATORY ORDINANCES
SECTION 10.1. Amendments Without Consent of
Bondowners 45
SECTION 10.2. Amendments With Consent of
Bondowners 46
ARTICLE XI
DEFAULTS AND REMEDIES
SECTION 11.1. Events of Default 46
SECTION 11.2. Waivers of Default 48
SECTION 11.3 Bondowners' Trustee 48
SECTION 11.4. Suits at Law or in Equity 49
SECTION 11.5. Books of City Open to Inspection 49
SECTION 11.6. Payment of Funds to Bondowners'
Trustee 50
SECTION 11.7. Application of Funds by
Bondowners' Trustee 50
SECTION 11.8. Relinquishment of Funds Upon
Remedy of Default 51
SECTION 11.9. Suits by Individual Bondowners 51
SECTION 11.10. Remedies Granted in Ordinance not
Exclusive 52
ARTICLE XII
AMENDMENTS AND BONDOWNERS MEETINGS
SECTION 12.1. Call of Bondowners Meetings 52
SECTION 12.2. Notice to Bondowners 52
SECTION 12.3. Proxies; Proof of Ownership of
Bonds 53
SECTION 12.4. Execution of Instruments by
Bondowners 53
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SECTION 12.5. Appointment of Officers at
Bondowners Meetings 54
SECTION 12.6. Quorum at Bondowners Meetings 54
SECTION 12.7. Vote Required to Amend Ordinance 54
SECTION 12.8. Obtaining Approval of Amendments
at Bondowners Meeting 55
SECTION 12.9. Alternate Method of Obtaining
Approval of Amendments 56
SECTION 12.10. Amendment of Ordinance In Any
Respect by Approval of All
Bondowners 57
SECTION 12.11. Bonds Owned by City 57
SECTION 12.12. Endorsement of Amendment on
Bonds 57
ARTICLE XIII
FORM OF BONDS
SECTION 13.1. Form of Bonds
SECTION 13.2. Form of 1992 Bonds
ARTICLE XIV
MISCELLANEOUS, DEFEASANCE; SALE OF BONDS AND
APPROVAL OF OFFICIAL STATEMENT
58
58
SECTION 14.1. Ordinance and Laws a Contract
With Bondowners 64
SECTION 14.2. Bonds Deemed No Longer to be
Outstanding Hereunder 65
SECTION 14.3. Moneys Held by Paying Agents One
Year After Due Date 66
SECTION 14.4. Sale of 1992 Bonds 66
SECTION 14.5. Approval of Official Statement 66
SECTION 14.6. Benefits of Ordinance Limited to
City, Bondowners, and Paying
Agents 67
SECTION 14.7. Term "City" Includes Successors 67
SECTION 14.8. Severability 67
SECTION 14.9. General Authorization 68
SECTION 14.10. Adjustment of Dollar Amounts 68
SECTION 14.11. Special Designation 68
SECTION 14.12. Prior Acts 68
SECTION 14.13. Effective Date of Ordinance 68
SECTION 14.14. Repealer 68
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ORDINANCE NO. 2709
AN ORDINANCE OF THE CITY OF PORT ANGELES, WASHINGTON,
ESTABLISHING A PLAN AND SYSTEM FOR CAPITAL
IMPROVEMENTS; AUTHORIZING THE ISSUANCE OF ELECTRIC
REVENUE BONDS IN THE PRINCIPAL AMOUNT OF
$2,920,000 TO PROVIDE FUNDS TO PAY A PORTION OF
TH8 CITY ►S ELECTRIC UTILITY CAPITAL IMPROVEMENT
PROGRAM; PROVIDING FOR THE ESTABLISHMENT OF
CERTAIN FUNDS AND ACCOUNTS; MAILING OTHER COVENANTS
AND AGREEMENTS IN CONNECTION WITH THE FOREGOING;
AND AUTHORIZING THE SALE OF SUCH BONDS,
WHEREAS, the City of Port Angeles, Washington (the "City "),
a municipal corporation of the State of Washington, owns and
operates an electric utility system (the "Electric System "); and
WHEREAS, the City presently has no outstanding Electric
System revenue bonds; and
WHEREAS, the City Council of
"Council ") haai determined that it
City that it undertake a plan
renewals of the Electric System
capital improvement plan for the
d
the City of Port Angeles (the
is in the beat interests of the
of repairs, maintenance and
as set forth in the City's,
Electric System (the "Plan ");
WHEREAS, the Council deems it necessary and advisable to
Josue Electric System revenue bonds (the "1992 Bonds ") in order
to pay part of the coots of the plan of improvements and to
reimburse the City for a portion of the coot of 1991 Plan
improvements to the Electric System; and
WHEREAS, the City wishes to establish the terms and
conditions for the issuance of additional bonds on a parity with
the 1992 Bonds;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PORT
ANGELES, WASHINGTON DO ORDAIN AS FOLLOWS:
ARTICLE I
DRFINITIONg
SECTION 1.1. Definitions.
As used in this Ordinance the following words and phrases
shall have the meanings herein set forth unless the context shall
clearly indicate that another meaning is intended.
"Additional Bonds" means
the Bonds pursuant to Article
"Adjusted Net Revenues"
pursuant to Section 4.2.I.
of:
any Bonds issued on a parity with
IV of this Ordinance.
means Net Revenues as calculated
"Annual Debt Service" for any Fiscal Year shall mean the sum
(a)
standing Bonds
of Bonds,
(b)
the interest due in such Fiscal Year on all out-
, excluding interest to be paid from the proceeds
the principal of all outstanding Serial Bonds due
in such Fiscal Year, and
(c) the Sinking Fund Requirement, if any, for such
Fiscal Year (calculated as of the Sinking Fund Requirement Date
for such Fiscal Year).
If the interest rate on any such Bonds is other than a fixed
rate, the rate applicable at the time of computation shall be
used.
"Average Annual Debt Service" means the amount determined by
dividing (a) the sum of all interest and principal to be paid on
outstanding Bonds from the date of determination to the last
maturity date of such Bonds, by (b) the number of Fiscal Years
from and including the Fiscal Year in which the determination is
made to the last Fiscal Year in which the sum of (i) the
principal amount of Serial Bonds maturing in such Fiscal Year
plus (ii) the Sinking Fund Requirement for such Fiscal Year,
exceeds 4% of the principal amount of Bonds outstanding as of the
date of determination.
If the interest rate on any such Bonds is other than a fixed
rate, the rate applicable at the time of computation shall be
used.
"Bonds" means the 1992 Bonds and any Additional Bonds.
"Bonds" may include bonds, notes, warrants, certificates of
indebtedness or any other evidence of indebtedness.
"Bond Fund" means the Electric System Revenue Bond Fund
established pursuant to Section 7.2 of this Ordinance to secure
payment of the Bonds.
"Bond Fund Trustee" means any bank or trust company
organized under the laws of any state of the United States or any
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national banking association hereafter appointed as trustee
pursuant to Section 11.3 of this Ordinance.
"Bond Registrar" or "Registrar" means the fiscal agency of
the State of Washington in either Seattle, Washington, or New
York, New York, whose duties include the registration and authen-
tication of the 1992 Bonds, maintenance of the Bond Register,
effecting transfer of ownership of the 1992 Bonds, and paying the
principal of, premium, if any, and interest on the 1992 Bonds. A
Supplemental Ordinance may appoint a different person, firm or
entity to serve as Bond Registrar.
"Bond Register" means the books or records maintained by the
Bond Registrar for the purpose of registration of the 1992 Bonds.
"Bond Year" means each one year period (or shorter period
from the date of issue) that ends at the close of business on
August 31.
"City" means the City of Port Angeles, Washington, a
municipal corporation of the State of Washington.
"City Light Director" means the duly appointed and acting
City Light Director of the Electric System, or the successor to
such office.
"Code" means the federal Internal Revenue Code of 1986, as
amended, and applicable regulations.
"Closing" means the delivery of any 1992 Bonds to, and
payment of the purchase price therefor by, the initial purchasers
of the 1992 Bonds.
"Council" means the legislative body of the City as the same
shall be duly and regularly constituted from time to time.
"Computation Date" means the Installment Computation Date
the Final Computation Date.
"Computation Period" means the period from the date
Closing through the date as of which the Rebate Amount
determined pursuant to Section 7.4.
"Construction Account" means the 1992 Electric System
Revenue Bond Construction Account created pursuant to Section 7.3
of this Ordinance.
or
of
is
"Distribution and Transmission Facilities" means the
electric utility properties and assets, real and personal, tan-
gible and intangible, now owned and operated by the City and used
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or useful in the transmission, distribution or sale of electric
current or electric service, and business incidental thereto, and
any additions, improvements and betterments thereto and
extensions thereof hereafter constructed or acquired. Distri-
bution and Transmission Facilities shall not include Generating
Facilities.
"Electric System" means the Distribution and Transmission
Facilities and any Generating Facilities hereafter acquired, but
such Electric System shall not include any property and
facilities as may hereafter be acquired or constructed and
established as a separate utility system not financed from the
Revenues except on a basis junior and inferior to the lien on
Revenues pledged to pay and secure the Bonds, the revenue of
which separate utility system may be pledged to the payment of
revenue obligations issued to purchase, construct, condemn or
otherwise acquire such separate utility system.
"Final Computation Date" means the date that the last 1992
Bond is discharged. A 1992 Bond is discharged on the date that
all amounts due under the terms of the 1992 Bond are actually and
unconditionally due if cash is available at the place of payment
and no interest accrues with respect to the 1992 Bond after such
date.
"Finance Director" means the duly appointed and acting
Finance Director of the City or the successor to such office.
"Fiscal Year" means the fiscal year used by the City at any
time. At the time of the adoption of this Ordinance, the Fiscal
Year is the twelve -month period beginning January 1 of each year.
"Generating Facilities" means electric utility properties
and assets, real and personal, tangible and intangible, and used
or useful in the generation of electric energy, hereafter
acquired or constructed by the City and declared to be part of
the Electric System, including any common undivided interest
therein, related transmission facilities, and additions, improve-
ments and betterments to and extensions of such properties and
assets.
"Government Obligations" means direct obligations of, or
obligations the principal of and interest on which are
unconditionally guaranteed by, the United States Government.
"Installment Computation Date" means the last day of the
fifth Bond Year and of each succeeding fifth Bond Year.
"Net Revenues" means, for any period, the excess of Revenues
over Operating Expenses for such period, excluding from the
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computation of Revenues (a) any profit or loss derived from the
sale or other disposition, not in the ordinary course of
business, of investments or fixed or capital assets, or resulting
from the early extinguishment of debt, and (b) insurance
proceeds.
' "1992 Bonds" means the 82,920,000 principal amount of the
City's Electric Revenue Bonds, Series 1992, authorized to be
issued by this Ordinance.
"Nonpurpose Receipts"
respect to an investment
following types of receipts
means, in general, any receipt with
allocated to the 1992 Bonds. The
are specifically included:
(a) Actual Receipts.
constructively received with
Actual receipts may not
commissions, administrative
expenses.
Any amount actually or
respect to an investment.
be reduced by selling
expenses or similar
(b) Disposition Receipts. An amount determined
41, treating an investment that ceases to be allocated
to the Blonde (other than by reason of a sale or
retirement) as if sold for fair market value on the
date that the investment ceases to be allocated to the
1992 Bonds._
(c) Installment Date Receipts. The fair market
value (or, for fixed rate investments, present value)
of all investments allocated to the 1992 Bonds at the
close of business on any Computation Date.
(d) Imputed Receipts. Any receipts that are
required to be imputed and taken into account pursuant
to Section 1.148 -ST of the Temporary Income Tax
Regulations or any successor Temporary or Final Income
Tax Regulations.
^Nonpurpose Payments" means, in genera,, any payment
respect to an investment allocated to the 1992 Bonds.
following types of payments are specifically included:
(a) Direct Payments. The amount of gross
proceeds of the Bonds directly used to purchase the
investment. Direct payments do not include brokerage
commissions, administrative expenses or similar
expenses.
(b) Constructive Payments, The fair market value
(as of the date of allocation to the 1992 Bonds) of any
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investment that was not directly purchased with gross
proceeds of the 1992 Bonds, but which is allocated to
the 1992 Bonds.
(c) Payments of Rebatable Arbitrage. Any payment
of Rebatable Arbitrage if such payment is made no later
than the due date for such payment.
"Operating Expenses" means (i) the City's expenses for
operation and maintenance of the Electric System, and ordinary
repairs, renewals, replacements and reconstruction of the
Electric System, including all costs of delivering electric power
and energy and payments (other than payments out of Bond
proceeds) into reasonable reserves in the Light Fund for items of
Operating Expenses the payment of which is not immediately
required, and shall include, without limiting the generality of
the foregoing, all costs of purchased power, costs of
transmission and distribution operation and maintenance expenses,
rents, administrative and general expenses, engineering expenses,
legal and financial advisory expenses, required payments to
pension, retirement, health and hospitalization funds, insurance
premiums and any taxes, assessments, or payments in lieu of
taxes, all to the extent properly allocable to the Electric
System; (ii) any current expenses required to be paid by the City
under the provisions of this Ordinance or by law, all to the
extent properly allocable to the Electric System; and (iii) the
fees and expenses of any Paying Agent. Operating Expenses shall
not include any costs or expenses for new construction or other
capital outlays, interest, amortization of debt service on any
evidence of indebtedness or any allowance for depreciation.
"Ordinance" means this Ordinance, except when used in
Articles XI and XII hereof, where the term "Ordinance" has the
meaning prescribed in Section 11.1 hereof.
"Paying Agent" means the designated fiscal agency of the
State of Washington in either Seattle, Washington, or New York,
New York, or a bank or banks designated as Paying Agent by the
City.
"Permitted Investments" means the following, to the extent
that the same are legal for investment of funds of the City:
(a) any Government Obligations, including obligations of any of
the federal agencies set forth in clause (b) below to the extent
unconditionally guaranteed by the United States; (b) obligations
of the Export- Import Bank of the United States, the Government
National Mortgage Association, the Federal National Mortgage
Association to the extent guaranteed by the Government National
Mortgage Association, the Federal Financing Bank, the Federal
Intermediate Credit Banks, the Federal Banks for Cooperatives,
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the Federal Land Banks, the Farmers Home Administration and the
Federal Home Loan Mortgage Association, or any agency or
instrumentality of the Federal Government which shall be estab-
lished for the purposes of acquiring the obligations of any of
the foregoing or otherwise providing financing therefor; (c) new
housing authority bonds issued by public agencies or municipali-
ties and fully secured as to the payment of both principal and
interest by a pledge of annual contribution under an annual
contributions contract or contracts with the United States; or
project notes issued by public agencies or municipalities and
fully secured as to the payment of both principal and interest by
a requisition or payment agreement with the. United States;
(d) direct and general obligations of any State within the
territorial United States, to the payment of the principal of and
interest on which the full faith and credit of such State is
pledged, provided, that at the time of their purchase, such
obligations are rated in one of the two highest rating categories
by either Moody's Investors Services, Inc. or Standard & Poor's
Corporation; (e) certificates of deposit, whether negotiable or
nonnegotiable, issued by any bank or trust company organized
under the laws of any State of the United States of America or
any national banking association (including the Bond Fund
Trustee, if any), provided that such certificates of deposit
shall be (i) continuously and fully insured by the Federal
Deposit Insurance Corporation, or (ii) issued by any bank or
trust company which is a recognized qualified public depository
of the State of Washington under RCW Chapter 39.58, as amended,
or (iii) continuously and fully secured by such securities as are
described above in clauses (a) or (b) , which shall have a market
value (exclusive of accrued interest) at all times at least equal
to the principal amount of such certificates of deposit; (f) any
written repurchase agreement with any bank, savings institution
or trust company which is insured by the Federal Deposit
Insurance Corporation or the Federal Savings and Loan Insurance
Corporation, or with any brokerage dealer with retail customers
which falls under Securities Investors Protection Corporation
protection, provided that such repurchase agreements are fully
secured by direct obligations of the United States of America,
and provided further that (i) such collateral is held by the City
or its agent or trustee during the term of such repurchase
agreement, (ii) such collateral is not subject to liens or claims
of third parties, (iii) such collateral has a market value
(determined at least once every 14 days) at least equal to 100%
of the amount invested in the repurchase agreement, (iv) the City
or its agent or trustee has a perfected first security interest
in the collateral, (v) the agreement shall be for a term not
longer than 270 days and (vi) the failure to maintain such
collateral at the level required in (iii) above will require the
City or its agent or trustee to liquidate the collateral; and
(g) any investment or investment agreement permitted for funds of
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the City under the laws of the State of Washington, as amended
from time to time, which are approved by [Bond Insurer], if such
corporation is then the insurer of any Bonds, and by such other
corporations, if any, which are then insurers of any Bonds.
"Professional Utility Consultant" means the independent
person(s) or firm(s) selected by the City having a favorable
reputation for skill and experience with generation, transmission
and distribution systems of comparable size and character to the
Electric System in such areas as are relevant to the purposes for
which they are retained.
"Qualified Insurance" means any non - cancellable 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 companies, as of the time of issuance of such policy or surety
bond, are currently rated in one of the two highest rating
categories by Moody's Investors Service, Inc. or Standard &
Poor's Corporation or both Moody's Investors' Service, Inc., and
Standard & Poor's Corporation if such institution is rated by
both or their comparably recognized business successors.
"Qualified Letter of Credit" means any irrevocable letter of
credit issued by a financial institution for the account of the
City on behalf of the owners of one or more series of Bonds,
which institution maintains an office, agency or branch in the
United States and as of the time of issuance of such letter of
credit is currently rated in one of the two highest rating
categories by Moody's Investors Service, Inc. or Standard &
Poor's Corporation or their comparably recognized business
successors or both Moody's Investors Service, Inc. and Standard &
Poor's Corporation if such institution is rated by both or their
comparably recognized business successors.
"Rebatable Arbitrage" means the amount required to be paid
pursuant to Section 148(f) of the Code.
"Rebate Computation Certificate" means the certificate
executed by the City setting forth the methodology for
computation of Rebatable Arbitrage.
"Light Fund" means the fund of that name described in
Section 7.1 of this Ordinance.
"Revenues" means all income (including investment income),
receipts and revenues derived by the City through the ownership
and operation of the Electric System but shall not include:
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(a) any income derived by the City through the
ownership and operation of any facilities that may hereafter be
purchased, constructed or otherwise acquired by the City as a
separate utility system; or
(b) investment income restricted to a particular
purpose inconsistent with its use for the payment of debt
service, including investment income derived pursuant to a plan
of debt retirement or refunding.
"Serial Bonds" means Bonds other than Term Bonds.
"Sinking Fund Requirement" for any Fiscal Year means the
principal amount of Term Bonds required to be purchased, redeemed
or paid in such Fiscal Year as established by the ordinance of
the City authorizing the issuance of such Term Bonds.
"Sinking Fund Requirement Date" means, for any Fiscal Year,
the date by which the Sinking Fund Requirement for such Fiscal
Year must be met, which with respect to the 1992 Bonds shall be
September 1.
"Supplemental Ordinance" means any ordinance amending,
modifying or supplementing the provisions of this Ordinance,
including any ordinance providing for the issuance of Additional
Bonds.
"Term Bonds" means Bonds of any principal maturity which are
subject to mandatory redemption and for which mandatory sinking
fund payments are required. The 1992 Bonds maturing on
September 1, 2012, and September 1, 2022, shall be deemed "1992
Term Bonds."
SECTION 1.2. Interpretation.
Words of the masculine gender shall be deemed and construed
to include correlative words of the feminine and neuter genders.
Words imparting the singular number shall include the plural
numbers and vice versa unless the context shall otherwise indi-
cate. Reference to Articles, Sections and other subdivisions of
this Ordinance are to the Articles, Sections and other sub-
divisions of this Ordinance as originally adopted unless express-
ly stated to the contrary. The headings or titles of the
Articles and Sections hereof, and the Table of Contents appended
hereto, are for convenience of reference only and shall not
define or limit the provisions hereof.
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ARTICLE II
FINDINGS AND DETERMINATIONS
SECTION 2.1. Plan and System.
The Council hereby approves and authorizes the acquisition,
development and construction by the City of the project
facilities as more fully described in the City's capital outlay
program for the System, as set forth and approved by the City in
Ordinance No. 2664 of the City (the "Plan "). The City may modify
details of the foregoing Plan where deemed necessary or advisable
in the judgment of the Council. Should any part or provision of
the Plan be held to be invalid, such holding shall not affect the
validity of any other part thereof.
The estimated cost of the Plan is hereby declared to be the
sum of $2,890,000. Included in this estimated cost are funds for
legal, engineering and financing costs.
SECTION 2.2. Best Interest of the City.
The Council hereby finds and determines that it is in the
best interests of the City and the users of the Electric System
that the City issue the 1992 Bonds for. the purpose of providing
funds to finance a portion of the costs of the Plan.
SECTION 2.3. Revenues Sufficient.
The Council hereby further finds and determines that the
Revenues to be derived by the City from the operation of the
Electric System at the rates to be charged for the electricity
furnished thereby will be sufficient in the judgment of the
Council to meet all expenses of operation and maintenance, and to
make all necessary repairs, replacements and renewals thereof,
and to permit the setting aside out of such Revenues in the Bond
Fund of such amounts as may be required to pay the principal of
and interest on the 1992 Bonds as the same become due and
payable.
SECTION 2.4. Due Regard.
The Council hereby finds and determines that due regard has
been given to the cost of the operation and maintenance of the
Electric System and that it has not obligated the City to set
aside into the Bond Fund for the account of the Bonds a greater
amount of the revenues and proceeds of the Electric System than
in its judgment will be available over and above such cost of
maintenance and operation.
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SECTION 3.1.
ARTICLE III
AUTHORIZATION AND ISSUANCE OF BONDS
Authnri nation of 1992 Bonds,,
For the purpose of paying a portion of the costs of the
Plan, to fund the Reserve Account, and to pay for the costs of
issuing the 1992 Bonds, there are hereby authorized to be issued
$2,920,000 aggregate principal amount of Electric Revenue Bonds,
Series 1992 (the "1992 Bonds "), which shall bear interest from
their date at such rates per annum and shall mature on
September 1 of such year and in such amounts as follows:
XIII lit
1993
1994
1995
1996
1997
1998
1999
2000
2001
2005
2012
2022
8t interest Rate
$ 40,000.00
40,000.00
45,000.00
45,000.00
50,000.00
50,000.00
55,000.00
55,000.00
60,000.00
270,000.00
650,000.00
1,560,000.00
3.2000
4.1000
4.5000
4.7500
5.0000
5.2000
5.3500
5.5500
5.7000
6.0500
6.2500
6.4000
SECTION 3.2. Adr9i ti nal Provilione of 1992 Bonds.
The 1992 Bonds shall be dated September 1, 1992, shall be
Cully registered as to both principal and interest, shall be in
denominations of $5,000 or any integral multiple thereof,
provided that no 1992 Bond shall represent more than one
maturity, and shall be numbered separately in such manner and
with any additional designation as the Bond .Registrar deems
necessary for purposes of identification.
Interest may be paid by check or draft drawn upon the Paying
Agent. Principal of the 1992 Bonds, at maturity or when
otherwise due, shall be payable upon due presentation and
surrender of the Bonds at the office of the Paying Agent in such
coin or currency of the United States of America which at the
time of payment is legal tender for public and private debts.
The principal of and interest on the Bonds shall be payable from
the Bond Fund.
D07529 9a /oe /27
Interest on the 1992 Bonds shall be payable semiannually on
March 1 and September 1 of each year, beginning March 1, 1993.
The Bond Register shall be maintained by the Bond Registrar,
and shall contain the name and mailing address of the registered
owner or owners of each 1992 Bond or nominee of such registered
owner or owners and the principal amount and number of 1992 Bonds
held by each registered owner or nominee.
SECTION 3.3.
The City reserves the right to use moneys in the Light Fund
or any other funds legally available therefor at any time to
purchase any of the Bonds in the open market for retirement only
if such purchase shall be found by the City to be economically
advantageous and in the best interest of the City.
Any purchases of Bonds may be made with or without tenders
of Bonds and at either public or private sale. All Bonds so
purchased or redeemed shall be cancelled and not reissued. Any
moneys which are to be applied to the purchase or redemption of
Bonde,,.shall, prior to such purchase or redemption, be transferred
to and deposited in the Bond Fund to the credit of the
appropriate account therein.
SECTION 3.4. Dntiona1 Red2n _i nr, cf 1992 „3pnd .
The 1992 Bonds maturing after September 1, 2002 are subject
to redemption prior to maturity, at the option of the City, on or
after September 1, 2002, in whole or in part on any date, upon
written notice mailed as provided in Article VI of this
Ordinance, at a price of par plus interest accrued thereon to the
date fixed for redemption.
If less than all of the 1992 Bonds subject to optional
redemption are so called for redemption, the City shall choose
the maturities to be redeemed. Except as provided in the Letter
of Representation, if less than the whole of a maturity is so
called for redemption, the Bond Registrar shall choose by lot the
Bonds to be redeemed.
In the case of any redemption of 1992 Bonds at the election
or direction of the City, the City shall give written notice to
the Paying Agent, at least 45 days prior to the date of
redemption, of the principal amounts of the 1992 Bonds of each
maturity to be redeemed (all of which shall be determined by the
City in its sole discretion, subject to the provisions of this
Ordinance).
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001529 92/08/27
For the purpose of selection of 1992 Bonds for redemption,
each $5,000 of principal amount of Bonds shall be treated as a
separate Bond.
SECTION 3.6. Mandatory ede ption of 1992 onds.
The 1992 Bonds maturing on September 1, 2005, shall be
redeemed prior to maturity by lot (or purchased or paid at
maturity), not later than September 1 in the years 2002 through
2005, inclusive, from amounts credited to the Bond Retirement
Account in the Bond Fund as sinking fund installments therefor
(to the extent such amounts have not been used to redeem or
purchase such Bonds as provided in this Ordinance) and in the
principal amounts as set forth below, upon written notice as
provided in Article VI of this Ordinance, by payment of the
principal amount thereof, together with th eintarest accrued
thereon to the date fixed for redemption.
Year Amount
2002 $60,000
2003 65,000
2004 70,000
2005 75,000
The 1992 Bonds maturing on September 1, 2012, shall be
redeemed prior to maturity by lot (or purchased or paid at
maturity), not later than September 1 in the years 2003 through
2012, inclusive, from amounts credited to the Bond Retirement
Account in the Bond Fund as sinking fund installments therefor
(to the extent such amounts have not been used to redeem or
purchase such Bonds as provided in this Ordinance) and in the
principal amounts as set forth below, upon written notice as
provided in Article VI of this Ordinance, by payment of the
principal amount thereof, together with the interest accrued
thereon to the date fixed for redemption.
Year Am
2006 $ 80,000.00
2007 80,000.00
2008 85,000.00
2009 90,000.00
2010 100,000.00
2011 105,000.00
2012 110,000.00
The 1992 Bonds maturing on September 1, 2022, shall be
redeemed prior to maturity by lot (or purchased or paid at
maturity), not later than September 1 in the years 2013 through
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DOTS24 42/08/27
2022, inclusive, from amounts credited to the Bond Retirement
Account in the Bond Fund as sinking fund installmanto therefor
(to the extent such amounts have not been used to redeem or
purchase such Bonds as provided in this Ordinance) and in the
principal amounts as set forth below, upon written notice as
provided in Article VI of this Ordinance, by payment of the
principal amount thereof, together with the interest accrued
thereon to the data fixed for redemption.
,Yaax AMQUAt
2013 $115,000.00
2014 125,000.00
2015 130,000.00
2016 140,000.00
2017 150,000.00
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DOTfl9 92/01/2?
201$
2019
2020
2021
2022
160,000.00
170,000.00
180,000.00
190,000.00
200,000.00
The foregoing amounts snail be deemed Sinking Fund Require-
ments for the 1992 Bonds maturing on September 1, 2005,
September 1, 2012 and on September 1, 2022 (the "1992 Term
Bonds ") .
The City may purchase and redeem 1992 Term Bonds through the
application of part or all of the respective Sinking Fund
Requirements therefor on the first day of any month prior to any
September 1. Any moneys not so used to purchase and redeem such
1992 Term Bonds shall be applied to the redemption of such bonds
on such September 1. If, as of any September 1, the principal
amount of 1992 Term Bonds retired by purchase (through appli-
cation of Sinking Fund Requirements or any other legally avail-
able funds) or redemption exceeds the cumulative Sinking Fund
Requirement through such date, such excess may be credited
against the Sinking Fund Requirement for the next Fiscal Year.
For the purpose of selection of Bonds for redemption, each
$5,000 of principal amount of Bonds shall be treated as a
separate Bond.
SECTION 4.1.
ARTICLE IV
ISSUANCE OF ADDITIONAL BONDS
•+-
Before any series of Additional Bonds shall be issued under
the provisions of this Article, the City shall adopt an ordinance
or ordinances authorizing the issuance of such bonds, fixing the
amount and the details thereof, describing in brief and general
terms the purpose or purposes for which such bonds are to be
issued and specifying the amount, if any, of the proceeds of such
bonds to be deposited to the credit of the construction or pro-
ject fund created with respect to such bonds or to another fund
for the payment of capitalized interest on such bonds and to the
Reserve Account; provided, however, that deposits to the Reserve
Account shall be made as required under Section 7.2.0 hereof.
The bonds of each series issued under the provisions of this
Section shall be designated "Electric Revenue Bonds, Series
", shall be in such denominations, shall be dated, shall
bear interest at a rate or rates (including variable rates) not
exceeding the maximum rate then permitted by law, shall be pay-
able, both as to principal and interest, at such place or places,
shall mature in such year or years, shall be made redeemable at
such times and prices (subject to the provisions of this Ordina-
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D0T929 92/08/27
nce), shall be numbered, shall have such Paying Agents, and any
Term Bonds of such series shall have such amortization require-
ments, all as may be provided by ordinance or ordinances adopted
by the City prior to the issuance of such bonds.
SECTION 4.2. Additional Bonds.
A. Additional Bonds may be issued payable from the Bond
Fund on a parity with the Bonds and secured by an equal charge
and lien on the Revenues pledged to the Bond Fund for any lawful
purpose of the City, including the refunding of outstanding
Bonds; provided that, (i) except as to Bonds issued pursuant to
Section 4.2.E hereof, at the time of the issuance of such
Additional Bonds, there is no deficiency in the Bond Fund, and no
Event of Default has occurred and is continuing, and (ii) the
requirements of the applicable provisions of this Section 4.2 are
complied with.
B. Additional Bonds may be issued for any lawful purpose
of the City if the following requirements are met. A certificate
signed by the Treasurer shall set forth:
(i) the amount of the Net Revenues for any 12
consecutive months of the 24 months prior to the date of the
issuance of such Bonds;
(ii) the amount of the Average Annual Debt Service in
any Fiscal Year thereafter on account of all Bonds then
outstanding under this Ordinance and the Additional Bonds
then to be issued hereunder; and
(iii) the percentage derived by dividing the amount
shown in (i) above by the amount shown in (ii) above, and
shall state that such percentage is not less than 125 %;
C. Additional Bonds may also be issued for any lawful
purpose of the City if the following requirements are met. A
certificate signed by a Professional Utility Consultant and filed
with the City Clerk shall set forth:
(i) the amount of the Adjusted Net Revenues computed
as provided in Section 4.2.I;
(ii) the amount of the Average Annual Debt Service
thereafter on account of all Bonds then outstanding under
this Ordinance and the Additional Bonds then to be issued
hereunder; and
(iii) as to the applicable Fiscal Year under (ii) above,
the percentage derived by dividing the amount shown in
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(i) above by the amount shown in (ii) above, and shall state
that such percentage is not less than 125 %.
Additional Bonds may be issued pursuant to Subsections E and F of
this Section 4.2 without complying with the provisions of this
Subsection C.
D. Additional Bonds may also be issued for the purpose of
paying part of the costs of Distribution and Transmission Facili-
ties or Generating Facilities for which Bonds have theretofore
been issued, if a certificate is signed by a Professional Utility
Consultant and filed with the City Clerk, which shall comply with
the requirements of paragraph C above or shall state that the
issuance of such Additional Bonds is necessary to complete such
facilities and that the completion is necessary for the efficient
and economic operation of the Electric System.
E. Additional Bonds may also be issued from time to time
for the purpose of providing funds, together with any other
available funds, for retiring at or prior to their maturity or
maturities any or all of the outstanding Bonds of any series,
including the payment of any redemption premium thereon, and, if
deemed necessary by the City, for paying the interest to accrue
thereon to the date fixed for their retirement and any expenses
incident to the issuance of such Additional Bonds.
F. Additional Bonds issued under subsections E above shall
not be delivered unless the proceeds (excluding any accrued
interest but including any premium) of such Additional Bonds,
together with any other moneys that have been made available for
such purposes, and the principal of and the interest on the
investment of such proceeds or any such moneys, shall be suffi-
cient to pay the principal of and the redemption premium, if any,
on the Bonds to be refunded and the interest that will become due
and payable on or prior to the date of their payment or redemp-
tion, and the expenses incident to the issuance of such
Additional Bonds.
If such Additional Bonds are to be issued pursuant to
Section 4.2.F above,
(1) there shall be filed with the City a certificate
signed by the Treasurer of the City showing that the Annual Debt
Service for any Fiscal Year thereafter shall not be increased by
more than $5,000 by reason of the issuance of the Additional
Bonds, or
(2) There shall be filed with the City a certificate
signed by a Professional Utility Consultant setting forth:
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D0T529 92/08/27
(a) the amount of the Adjusted Net Revenues
computed as provided in Section 4.2.I;
(b) the amount of the Average Annual Debt Service
in any Fiscal Year thereafter on account of all Bonds to be
outstanding in such Fiscal Year and the Additional Bonds
then to be issued hereunder; and
(c) stating that the amount shown in (a) above is
not less than 125% of the amount shown in (b) above.
G. In rendering any certificate under this Section, the
Professional Utility Consultant may rely upon, and such
certificate shall have attached thereto, (1) financial statements
of the Electric System, certified by the chief financial officer
thereof, showing income and expenses for the period upon which
the same are based and a balance sheet as of the end of such
period, or (2) similar certified statements by the Division of
Municipal Corporations of the Office of the State Auditor of the
State of Washington (or any successor thereto), or (3) similar
certified statement by an independent certified public
accountant, if any, for as much of said period as any examination
by them has been made and completed. If two or more of such
statements are inconsistent with each other, the Professional
Utility Consultant shall rely on the statement described under
(1) above.
In connection with the issuance of any Bonds pursuant to
subsections 4.2.C, 4.2.D and 4.2.G of this Section, the certifi-
cate of the Professional Utility Consultant hereinabove referred
to shall be conclusive and the only evidence required to show
compliance with the provisions and requirements of said
subsection.
H. For the purposes of the certificates required by Sec-
tions 4.2.0 and 4.2.G of this Ordinance, Adjusted Net Revenues
shall be computed by the Professional Utility Consultant as
follows:
(a) The Net Revenues for any 12 consecutive months
(selected by the City) out of the 24 months prior to the date of
issuance of the Additional Bonds (such 12 -month period being
herein called the "Base Period ") may be adjusted:
(i) to reflect any changes in Net Revenues for the
Base Period which would have occurred if the schedule of
rates and charges in effect at the time of the computation
(or approved by the Council as of the time of such
computation and to become effective within 12 months
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D0T529 92/08/27
thereof) had been in effect during the portion of the Base
Period in which such schedule was not in effect;
(ii) to reflect a full 12 months of Net Revenues from
any customers of the Electric System added prior to the
computation date; and
(iii) to reflect any changes in Net Revenues estimated
as a result of, and upon completion of, any facilities under
construction or to be acquired, constructed or installed as
a part of the Electric System from the proceeds of any
Bonds; provided, however, that if such facilities are
Generating Facilities not then in existence and to be
constructed and installed as part of the Electric System
from the proceeds of any Bonds, only 80% of the estimated
Net Revenues from such facilities shall be included.
I. Nothing contained herein shall prevent the City from
refunding at one time all of the Bonds then outstanding. Nothing
contained herein shall prevent the City from issuing obligations
payable from a lien on the Revenues that is junior and inferior
to the Bonds.
J. Additional Bonds may be issued from time to time
without complying with the requirements set forth above if, in
the opinion of the Professional Utility Consultant, as evidenced
by a certificate filed with the City, it is necessary to repair
any damage or loss to the Electric System or if the Electric
System has been destroyed or damaged by disaster or unanticipated
event to such an extent that it cannot be operated; provided,
however, that the proceeds of any Additional Bonds issued for
such purpose may only be used to return the Electric System to,
or to maintain the Electric System at, substantially its former
or then operating capacity; and provided further, that in the
case of repair, such Additional Bonds may be issued only to the
extent that insurance proceeds from such damage or loss are
insufficient for the accomplishment of such purpose.
K. In calculating Annual Debt Service for purposes of this
Section, if the interest rate on any Bonds is other than a fixed
rate, the rate applicable at the time of computation shall be
used unless such rate is less than the most recently published
Bond Buyer's Revenue Bond Index for municipal revenue bonds, in
which case the rate stated by such index shall be used. If such
index is no longer published, another nationally recognized index
for municipal revenue bonds maturing in 20 to 30 years shall be
used.
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D0T529 92/08/27
ARTICLE V
GENERAL TERMS AND PROVISIONS OF BONDS
SECTION 5.1. Execution and Payment of Bonds.
The 1992 Bonds and, except as otherwise provided in the
Supplemental Ordinance providing for the issuance thereof,
Additional Bonds shall be executed on behalf of the City with the
manual or facsimile signature of the Mayor and attested with the
manual or facsimile signature of the City Clerk; and the seal of
the City shall be impressed or imprinted on each of the Bonds.
In case any of the officers who shall have signed, attested or
registered any of the Bonds shall cease to be such officer before
such Bonds have been actually issued and delivered, such Bonds
shall be valid nevertheless and may be issued by the City with
the same effect as though the persons who had signed, attested or
registered such Bonds had not ceased to be such officers. The
Bonds of each series shall be payable as to principal, premium,
if any, and interest in lawful money of the United States of
America and, except as otherwise provided in Section 5.6 shall be
payable at the principal office of the Paying Agent of the City
for such series of Bonds.
Only such Bonds as shall bear thereon a Certificate of
Authentication in the form set forth in Section 13.2 of this
Ordinance, manually executed by 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 delivered hereunder and are
entitled to the benefits of this Ordinance.
SECTION 5.2. Ownership of Bonds.
The City, the Paying Agent and any other person may treat
the registered owner of any Bond as the absolute owner of such
Bond for the purpose of paying the principal thereof, and premi-
ums, if any, and interest thereon and for all other purposes, and
neither the City nor the Paying Agent shall be bound by any
notice or knowledge to the contrary, whether such Bond or the
interest thereon shall be overdue or not. All payments of or on
account of interest to any registered owner (or to his registered
assigns), and all payments of or on account of principal to any
registered owner of any Bond, shall be valid and effectual and
shall be a discharge of the City and Paying Agent in respect of
the liability upon the Bonds or claims for principal or interest,
as the case may be, to the extent of the sum or sums paid.
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D0T529 92/08/27
SECTION 5.3. Bond Registrar.
The City hereby adopts for the 1992 Bonds the system of
registration specified and approved by the Washington State
Finance Committee. The Bond Registrar shall keep, or cause to be
kept, at its principal corporate trust office, sufficient books
for the registration and transfer of the 1992 Bonds which shall
at all times be open to inspection by the City. The Bond
Registrar is authorized, on behalf of the City, to authenticate
and deliver the 1992 Bonds transferred or exchanged in accordance
with the provisions of such 1992 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 on
the 1992 Bonds. The Bond Registrar may become the owner of 1992
Bonds 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 rights of 1992 Bond owners.
SECTION 5.4. Transfers and Exchanges.
Upon surrender thereof to the Bond Registrar, the 1992 Bonds
are interchangeable for 1992 Bonds in any authorized denomination
of equal aggregate principal amount and of the same interest rate
and maturity. 1992 Bonds may be transferred only if endorsed in
the manner provided thereon and surrendered to the Bond
Registrar. Such exchange or transfer shall be without cost to
the owner or transferee.
In every case of an exchange of Bonds and of a transfer of
any Bond, the surrendered Bonds shall be held by the Bond Regis-
trar and a certificate evidencing such exchange or transfer shall
be promptly transmitted by the Bond Registrar to the City. All
Bonds surrendered for exchange or transfer shall be cancelled and
a certificate evidencing such cancellation shall be promptly
transmitted to the City. All Bonds executed and delivered in
exchange for or upon transfer of Bonds so surrendered shall be
valid obligations of the City evidencing the same debt as the
Bonds surrendered, and shall be entitled to all the benefits and
protection of this Ordinance to the same extent as the Bonds in
exchange for, or upon transfer for, which they were executed and
delivered.
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SECTION 5.5. Payment of Bonds and Interest.
The Bonds of each series may be presented for payment at the
principal office of any of the Paying Agents for such series of
Bonds.
The principal of all Bonds of a series shall be payable at
the principal office of any one of the Paying Agents for such
series of Bonds. Payment of the interest on each Bond shall be
made on each interest payment date by check or draft drawn upon
one of the Paying Agents therefor and mailed by first class mail
to the registered owner at his address as it appears on the Bond
Register as of the fifteenth day of the month preceding the
interest payment date. Upon request of a registered owner of at
least $1,000,000 in principal amount of 1992 Bonds, payment shall
be made by wire transfer to an account designated by such owner.
All Bonds upon the payment thereof shall be cancelled and
destroyed by the Paying Agents. A certificate evidencing such
payment, cancellation and destruction shall be promptly trans-
mitted by the Paying Agents to the City.
SECTION 5.6. Lost. Stolen. Destroyed or Mutilated Bonds.
In case any Bond shall at any time become mutilated or be
lost, stolen or destroyed, the City in the case of such mutilated
Bond shall, and in the case of such a lost, stolen or destroyed
Bond, in its discretion may, execute and deliver a new Bond of
the same series, interest rate and maturity and of like tenor and
effect in exchange or substitution for and upon the surrender or
cancellation of such mutilated Bond, or in lieu of or in
substitution for such destroyed, stolen or lost Bond or if such
stolen, destroyed or lost Bond shall be matured, instead of
issuing a substitute therefor, the City may at its option pay the
same without the surrender thereof. Any such exchange or
substitution shall be accomplished in accordance with RCW Chapter
39.72, as the same shall be amended from time to time, or any
successor statute thereto. Except in the case where a mutilated
Bond is surrendered, the applicant for the issuance of a substi-
tute Bond shall furnish to the City evidence satisfactory to it
of the theft, destruction or loss of the original Bond, and of
the ownership thereof, and also such security and indemnity as
may be required by the City, and no such substitute Bond shall be
issued unless the applicant for the issuance thereof shall reim-
burse the City for the expenses incurred by the City in
connection with the preparation (including printing), execution,
issuance and delivery of the substitute Bond. Any such
substitute Bond shall be equally and proportionately entitled to
the security of this Ordinance with all other Bonds issued
hereunder, whether or not the Bond alleged to have been lost,
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D0T529 92/08/27
stolen or destroyed shall be found at any time or enforceable by
anyone. The City shall advise the Paying Agents of the issuance
of substitute Bonds. All mutilated Bonds so surrendered to the
City shall be cancelled by it.
SECTION 5.7. Limitations on Duty of City to Register. Exchange
or Transfer Bonds.
The City shall not be required (a) to issue, transfer or
exchange Bonds for a period of 15 days next preceding any
interest payment date therefor; (b) to issue, register, discharge
from registration, transfer or exchange Bonds for a period of ten
days thereafter; or (c) to register, discharge from registration,
transfer or exchange any Bonds which have been designated for
redemption within a period of 30 days next preceding the date
fixed for redemption.
SECTION 5.8. Paid or Surrendered Bonds Not to be Reissued.
No Bonds shall be issued in lieu of Bonds surrendered upon
exchange or transfer, except as expressly provided by this
Ordinance; provided that the City reserves the right to account
for any Bonds redeemed at the option of the registered owner
thereof prior to maturity pursuant to the Supplemental Ordinance
authorizing the issuance of such Bonds as having been purchased
by the City and eligible for resale or reissuance (including the
issuance of substitute Bonds).
SECTION 5.9. CUSIP Identification Numbers.
At the sole option of the City, CUSIP identification numbers
may be printed on the Bonds of any series of Bonds, but no such
number shall be deemed to be a part of any Bond or a part of the
contract evidenced thereby, and no liability shall hereafter
attach to the City or any officer or agent thereof (including the
Paying Agents) because of or on account of said CUSIP identi-
fication numbers or any use made thereof.
SECTION 5.10. Issuance of Coupon or Bearer Bonds.
The City reserves the right to amend and modify the
provisions of this Ordinance and to include in any Supplemental
Ordinance authorizing the issuance of Additional Bonds provisions
relating to the issuance of Bonds in bearer or coupon form if
state and federal law permit such issuance; provided always that
no changes can be made that would, in the opinion of bond
counsel, impair the obligation of the City to carry out its other
promises, covenants, warranties and representations hereunder nor
in any way impair its obligation to pay the principal of,
premium, if any, or interest on any 1992 Bonds or any Additional
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Bonds or affect the tax - exempt status of any 1992 Bonds or any
Additional Bonds.
SECTION 5.11. Temporary Bonds.
Any Bonds of any series may be initially issued in temporary
form exchangeable for definitive Bonds when ready for delivery.
The temporary Bonds may be printed, lithographed or typewritten,
shall be of such denominations as may be determined by the City,
and may contain such reference to any of the provisions of this
Ordinance as may be appropriate. Every temporary Bond shall be
executed by the City upon the same conditions and in
substantially the same manner as the definitive Bonds. If the
City issues temporary Bonds, it will execute and furnish
definitive Bonds without delay, and thereupon the temporary Bonds
may be surrendered for cancellation at the corporate trust office
of the Bond Registrar and the Bond Registrar shall deliver in
exchange for such temporary Bonds so surrendered an equal aggre-
gate principal amount of definitive Bonds of like principal
amount and in authorized denominations of the same series,
maturity or maturities, interest rate or rates. Until so
exchanged, the temporary Bonds shall be entitled to the same
benefits under this Ordinance as definitive Bonds delivered under
this Ordinance.
ARTICLE VI
REDEMPTION OF BONDS
SECTION 6.1. Notice of Redemption.
Written notice of any redemption of Bonds shall be given by
the City, which notice shall specify the title, series,
maturities, letters and numbers or other distinguishing marks of
the Bonds to be redeemed, the redemption date and the place or
places where the amount due upon such redemption will be payable
and, in the case of registered Bonds to be redeemed in part only,
such notice shall also specify the respective portions of the
principal amount thereof to be redeemed. Such notice shall
further state that upon the date fixed for redemption there shall
become due and payable upon each Bond to be redeemed the
principal amount thereof plus the premium, if any, due thereon
upon the said redemption date, together with interest accrued to
the redemption date, and that from and after the redemption date
interest thereon, or on the portion of any Bond to be redeemed in
part (unless the City shall default in the payment of the Bonds,
or of the portion of any Bond so to be redeemed in part) shall
cease to accrue and become payable. Such notice shall be mailed
by first class mail, postage prepaid, not less than 30 days nor
more than 60 days before the redemption date to the registered
owners of Bonds which are to be redeemed in whole or in part at
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their last addresses, if any, appearing upon the Bond Register.
Whenever notice of redemption has been duly given as herein
provided, the City shall transfer to the Paying Agent or Paying
Agents for the Bonds so to be redeemed amounts in cash which, in
addition to other moneys, if any, held by such Paying Agent or
Paying Agents for such purpose, will be sufficient to redeem, on
the redemption date, all the Bonds so to be redeemed.
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.
(i) Each further notice of redemption given
hereunder shall contain the information required above for
an official notice of redemption plus (i) the CUSIP numbers
of all Bonds being redeemed; (ii) the date of issue of the
Bonds as originally issued; (iii) the rate of interest borne
by each Bond being redeemed; (iv) the maturity date of each
Bond being redeemed; and (v) any other descriptive
information needed to identify accurately the Bonds being
redeemed.
(ii) Each further notice of redemption may be
sent at least 35 days before the redemption date by
registered or certified mail or overnight delivery service
to all registered securities depositories then in the
business of holding substantial amounts of obligations of
types comprising the Bonds and shall be sent to one or more
national information services that disseminate notices of
redemption of obligations such as the Bonds.
(iii) Each such further notice shall be published
one time in the Bond Buyer of New York, New York or, if such
publication is impractical or unlikely to reach a
substantial number of the owners of the Bonds, in some other
financial newspaper or journal which regularly carries
notices of redemption of other obligations similar to the
Bonds, such publication to be made at least 30 days prior to
the date fixed for redemption.
(iv) Upon the payment of the redemption price of
Bonds being redeemed, each check or other transfer of funds
issued for such purpose shall bear the CUSIP number
identifying, by issue and maturity, the Bonds being redeemed
with the proceeds of such check or other transfer.
The foregoing notice provisions of this Section 6.1,
including but not limited to the information to be included in
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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.
SECTION 6.2. Payment of Redeemed Bonds; When Interest on Bonds
Called for Redemption Ceases to Accrue.
Notice having been given by mailing in the manner provided
in Section 6.1 hereof, the Bonds or portions thereof so called
for redemption, together with accrued interest to the date fixed
for redemption, shall become due and payable on the redemption
date designated in said notice, and the Paying Agents shall make
payments thereof upon presentation and surrender thereof at the
offices of the Paying Agents specified in such notice together
with, in the case of Bonds for which payment is requested by a
person other than the registered owner, a written instrument of
transfer in form satisfactory to the Paying Agent, duly executed
by the registered owner or his duly authorized attorney. In the
event there shall be selected for redemption less than all of the
Bonds represented by a Bond, the City shall execute and the
Paying Agents shall deliver upon the surrender of such Bond
without charge to the owner thereof, for the unredeemed balance
of the principal amount of the Bond so surrendered, a Bond or
Bonds of the same series, interest rate and maturity, in either
the denomination of such unredeemed balance or in any of the
authorized denominations as shall be requested by the registered
owner of the Bond so surrendered; provided, however, that the
City may, upon written agreement with the owner of any Bond, make
payment of the redemption price of a portion of such Bond
directly to the registered owner thereof without presentation or
surrender thereof upon such terms and conditions as the City may
consent to in such agreement. The Paying Agents shall be advised
by the City of each such agreement and shall be entitled to rely
thereon, and to make payments in accordance therewith, until
notified by the City of the termination of such agreement.
If moneys for the redemption of all the Bonds, or portions
thereof, to be redeemed on any redemption date, together with the
interest to the redemption date, shall be held by the Paying
Agents so as to be available therefor on the date fixed for the
redemption thereof, and if notice of redemption of said Bonds
shall have been mailed as provided in this Article, then from and
after the redemption date, interest on the Bonds or portions
thereof so called for redemption shall cease to accrue and become
payable, and all Bonds or portions thereof so called for redemp-
tion shall be payable solely from the moneys set aside for the
payment thereof with the Paying Agents, and said Bonds or
portions thereof shall no longer be secured by the lien on and
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pledge of the Revenues herein created for the security and
payment thereof; provided, however, that such lien and pledge
shall continue in full force and effect as to the portion of any
Bond not called for redemption. If moneys shall not be available
for the payment of such Bonds or portions thereof as shall have
been called for redemption, such Bonds or portions thereof shall
continue to bear interest until paid at the rate they would have
borne had they not been called for redemption and shall continue
to be secured by the lien on and pledge of the Revenues herein
created for the security and payment thereof.
SECTION 6.3. Optional Redemption or Purchase of Bonds.
In the event that moneys available therefor are to be
applied to the purchase or redemption of Bonds, and if more than
one series of Bonds shall then be outstanding hereunder, the City
shall determine from which series such purchases or redemptions
shall be made and may elect that all such purchases or
redemptions shall be made from only one series or from more than
one series. Any such purchases of Bonds may be made with or
without tenders of Bonds and at either public or private sale.
All Bonds so purchased or redeemed shall be cancelled and not
reissued. Any moneys which are to be applied to the purchase or
redemption of Bonds shall, prior to such purchase or redemption,
be transferred to and deposited in the Bond Fund to the credit of
the appropriate account therein.
In the case of any redemption of bonds at the election or
direction of the City, the City shall give written notice to the
Paying Agents, at least 45 days prior to the date of redemption,
of the series and the principal amounts of the Bonds of each
maturity of such series to be redeemed (all of which shall be
determined by the City in its sole discretion, subject to this
Ordinance). In the event notice of redemption shall have been
given as provided above, the Paying Agents shall pay on the
redemption date, out of moneys available therefore held by the
Paying Agents, the redemption price thereof, plus interest
accrued and unpaid to the redemption date on the Bonds to be
redeemed.
ARTICLE VII
CREATION OF SPECIAL FUNDS AND ACCOUNTS
AND PAYMENTS THEREFROM
SECTION 7.1. Light Fund .
A. A special fund of the City has heretofore been created
pursuant to Ordinance No. 250 adopted by the City Council on
August 26, 1897, and designated the "Light Fund." Said Light
Fund shall be maintained and continued in existence, and shall
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be held and administered by the City. The City covenants and
agrees that it will pay or cause to be paid all Revenues into the
Light Fund as promptly as practicable after receipt thereof.
There are hereby authorized to be created four accounts in
the Light Fund known as (i) the General Account, (ii) the
Contingency and Replacement Account, (iii) the Rate Stabilization
Account, and (iv) the 1992 Construction Account, which accounts
shall be held and used for the purposes hereinafter described.
B. The Revenues of the City shall be deposited and
credited to the following accounts in the Light Fund and used
only for the following purposes and in the following order of
priority:
(1) All Revenues paid into the Light Fund shall first
be credited to the General Account therein and applied as
follows:
(i) to pay Operating Expenses and to provide
sufficient working capital for the operation of the Electric
System;
(ii) to make all payments required to be made
into the Interest Account in the Bond Fund for the payment
of accrued interest on the next interest payment date;
(iii) to make all payments required to be made
into the Principal Account in the Bond Fund for the payment
of the principal amount of Serial Bonds next coming due, and
into the Bond Retirement Account in the Bond Fund for the
mandatory redemption of Term Bonds;
(iv) to make all payments required to be made
into the Reserve Account in the Bond Fund created to secure
the payment of the Bonds; and
(v) to make all payments required to be made into
any special fund or account created to pay or secure the
payment of the principal of and interest on any revenue
bonds, warrants or other revenue obligations of the City
having a lien upon Revenues and moneys in the Light Fund
and Bond Fund and accounts therein junior and inferior to
the lien thereon for the payment of the principal of and
interest on the Bonds.
(2) To the extent that surplus Revenues remain after
the payments so required to be made out of the General Account,
the City shall credit to the Contingency and Replacement Account
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in each Fiscal Year an amount equal to at least 25% of the Annual
Debt Service in such Fiscal Year.
(3) To the extent that surplus Revenues remain after
the payments so required to be made out of the General Account
and the credit to the Contingency and Replacement Account, the
City may credit up to the full amount of such surplus to the Rate
Stabilization Fund.
(4) After all of the above payments and credits have
been made, amounts remaining in the General Account may be used
for any other lawful purpose of the Light Fund.
Any credits from the General Account pursuant to subsec-
tions (2) and (3) above, and any credits to the General Account
from the Rate Stabilization Account made pursuant to Section 9.3
hereof, shall be made prior to closing the books and accounts of
the City for each Fiscal Year.
C. Moneys in the Contingency and Replacement Account shall
be used from time to time to make up any deficiencies in the
Reserve Account, and such moneys in the Contingency and Replace-
ment Account are hereby pledged as additional payments to the
Bond Fund to the extent required for any such deficiencies.
Moneys in the Contingency and Replacement Account may be used to
make additions, betterments, extensions, renewals, replacements
and other capital improvements to the Electric System, to retire
Bonds, or may be used by the City for any other lawful purpose of
the City, but may not be paid directly into the Rate
Stabilization Account.
The Rate Stabilization Account is created in anticipation of
future increases in revenue requirements. Funds in the Rate
Stabilization Account may be transferred to the General Account
to accommodate part or all of those future revenue requirement
increases. On or before the date of issuance of the 1992 Bonds,
the City shall transfer at least $720,000 to the Rate
Stabilization Account from funds legally available therefor.
Moneys in the Rate Stabilization Account may be used for any
lawful purpose. Moneys in the Rate Stabilization Account shall
be used from time to time to make up any deficiencies in the Bond
Fund, and such moneys in the Rate Stabilization Account are
hereby pledged as additional payments to the Bond Fund to the
extent required for any such deficiencies.
Nothing contained in this Section 7.1 shall be construed to
require the deposit into the Light Fund of any of the revenues,
income, receipts or other moneys of the City derived by the City
through the ownership or operation of any separate utility system
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hereafter created or established from funds other than the
proceeds of Bonds.
SECTION 7.2. Bond Fund.
A special fund of the City is hereby authorized to be
created and designated the "Electric System Revenue Bond Fund"
(hereinafter referred to as the "Bond Fund "). The Bond Fund
shall be held in trust and administered by the City and shall be
used solely for the purposes of paying the principal of, premium,
if any, and interest on the Bonds, and retiring the Bonds prior
to maturity in the manner herein provided. The City hereby
obligates and binds itself irrevocably to set aside and to pay
(to the extent not otherwise provided) from moneys in the Light
Fund into the Bond Fund, after paying or making provision for
Operating Expenses and prior to the payment of any other charge
or obligation against such Revenues, amounts sufficient to pay
the principal of, premium, if any, and interest on all the Bonds
from time to time outstanding as the same respectively become due
and payable, either at the maturity thereof or in accordance with
the terms of any Sinking Fund Requirement established for the
retirement of Term Bonds. The fixed amounts to be paid into the
Bond Fund, to the extent that such payments are not made from
Bond proceeds or from other moneys which may legally be available
therefor, shall be as follows and in the following order of
priority, to wit:
A. There is hereby authorized to be created in the Bond
Fund, for the purpose of paying the interest on Bonds as the same
becomes due and payable, a Bond Interest Account (the "Interest
Account "). No later than the last day of the month in which any
Bonds are delivered to the initial purchasers thereof and on or
before the 25th day of each month thereafter, the City shall pay
from the Light Fund into the Bond Fund to the credit of the
Interest Account an amount such that, if the same amount were so
paid and credited to the Interest Account on the 25th day of each
of the months preceding the next date upon which an installment
of interest falls due on the Bonds, the aggregate of the amounts
so paid and credited to the Interest Account would on such date
be equal to the installment of interest then falling due on all
Bonds then outstanding.
B. There is hereby authorized to be created in the Bond
Fund, for the purpose of paying outstanding Serial Bonds as they
mature and for the purpose of redeeming Term Bonds pursuant to
the Sinking Fund Requirement pertaining to such Term Bonds, the
following accounts each of which shall be equal in priority:
(i) The Bond Principal Account, for the purpose of
paying outstanding Serial Bonds as they mature (the "Principal
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Account "). No later than the 25th day of the 12th month prior to
each Serial Bond maturity, or if there are less than 12 months
preceding such maturity then no later than the last day of the
month immediately succeeding the month in which the Bonds are
delivered to the initial purchaser(s) thereof, and on or before
the 25th day of each month thereafter, the City shall pay from
the Light Fund into the Bond Fund to the credit of the Principal
Account an amount such that, if the same amount were so paid and
credited to the Principal Account on the 25th day of each
succeeding month thereafter and prior to such Serial Bond
maturity date, the aggregate of the amounts so paid and credited
to the Principal Account would on such date be equal to the
principal amount of Serial Bonds then falling due.
(ii) The Bond Retirement Account, for the purpose of
redeeming Term Bonds pursuant to the Sinking Fund Requirement
pertaining to such Term Bonds and to otherwise retire Bonds prior
to maturity (hereinafter referred to as the "Bond Retirement
Account "). No later than the 25th day of the 12th month prior to
the date of each Sinking Fund Requirement, or if there are less
than 12 months preceding such Sinking Fund Requirement Date, then
on the last day of the month immediately succeeding the month in
which the Bonds are delivered to the initial purchaser(s)
thereof, and on or before the 25th day of each succeeding month
thereafter, the City shall pay from the Light Fund into the Bond
Fund to the credit of the Bond Retirement Account an amount such
that, if the same amount were so set aside in the Bond Fund and
credited to the Bond Retirement Account on the 25th day of each
succeeding month thereafter and prior to such Sinking Fund
Requirement Date, the aggregate of the amounts so paid and
credited to the Bond Retirement Account would be equal to the
Sinking Fund Requirement for such date.
The City shall apply all the moneys paid into the Bond Fund
for credit to the Bond Retirement Account to the redemption of
Term Bonds on the next ensuing Sinking Fund Requirement Date (or
may so apply such moneys prior to such Sinking Fund Requirement
Date), pursuant to the terms of this Ordinance or of the
Supplemental Ordinance authorizing the issuance thereof. The
City may also apply the moneys paid into the Bond Fund for credit
to. the Bond Retirement Account for the purpose of retiring Term
Bonds by the purchase of such Bonds at a purchase price
(including accrued interest and any brokerage charge) not in
excess of the principal amount thereof, in which event the prin-
cipal amount of such Bonds so purchased shall be credited against
the next ensuing Sinking Fund Requirement. If as of any
September 1 the principal amount of the 1992 Term Bonds retired
by purchase or redemption exceeds the cumulative amount required
to have been redeemed by sinking fund installments on or before
such September 1, then such excess may be credited against the
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Sinking Fund Requirement for the 1992 Term Bonds for the
following Fiscal Year. Any such purchase of Bonds by the City
may be made with or without tenders of Bonds in such manner as
the City shall, in its discretion, deem to be in its best
interest.
C. There is hereby authorized to be created a "Bond
Reserve Account" in the Bond Fund (the "Reserve Account "). Upon
the issuance of the 1992 Bonds, the City shall deposit in the
Reserve Account an amount equal to Average Annual Debt Service
for the 1992 Bonds. In the event of the issuance of any
Additional Bonds, the Supplemental Ordinance authorizing the
issuance of such Additional Bonds shall provide for approximately
equal monthly payments into the Bond Fund for credit to the
Reserve Account from the moneys in the Light Fund, in such
amounts and at such times so that by no later than three years
from the date of issuance of such Additional Bonds there will be
credited to the Reserve Account an amount equal to the Average
Annual Debt Service at the date of issuance of such Additional
Bonds; provided, however, that the proceedings authorizing the
issuance of Additional Bonds may provide for payments into the
Bond Fund for credit to the Reserve Account from the proceeds of
such Additional Bonds or from any other moneys lawfully available
therefor, in which event, in providing for deposits and credits
required by the foregoing provisions of this paragraph, allowance
shall be made for any such amounts so paid into such Account.
Subject to the two preceding sentences, the moneys and value
of Permitted Investments in the Reserve Account shall be deter-
mined as of the last business day of each Fiscal Year and main-
tained at an amount at least equal to the Average Annual Debt
Service, except where it is necessary for the City to make a
transfer therefrom to the Interest Account, Principal Account or
Bond Retirement Account because of an insufficiency of money
therein to make any required payment of principal of or interest
on any Bonds when due. The City shall make up any deficiencies
in such account arising because of such transfer, or because of
an insufficient value of moneys and Permitted Investments in such
account, in not more than 18 approximately equal consecutive
monthly installments into the Reserve Account.
If at any time the moneys and value of Permitted Investments
in the Reserve Account shall exceed the amount of moneys and
value of Permitted Investments then required to be maintained
therein by 10 %, such excess may be transferred to the General
Account in the Light Fund .
For the purposes of valuation of Permitted Investments
pursuant to this Section 7.2.C, the value of Permitted
Investments shall be computed as follows: (a) the value of
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obligations which mature within six months from the date of
purchase thereof shall be the purchase price of such obligations;
and (b) the value of obligations which mature more than six
months after the date of purchase thereof shall be the lesser of
(i) the principal or face amount of such obligations, or (ii) the
bid quotation price thereof as of the fifth business day next
preceding the date of such determination as reported in The Wall
Street Journal, or in the event such newspaper is not published
or such price is not reported in said newspaper, in a newspaper
of general circulation or a financial journal published in the
Borough of Manhattan, City and State of New York, or (iii) the
price at which such obligations are then redeemable by the owner
at his option. The computations made under this paragraph shall
not include accrued interest.
In making the payments and credits to the Principal Account,
Interest Account, Bond Retirement Account and Reserve Account
required by this Section 7.2, to the extent that such payments
are made from Bond proceeds, from moneys in any capitalized
interest account, or from other moneys which may legally be
available, such payments are not required to be made from the
Light Fund .
The City may elect to meet the requirements of this
Section 7.2.0 with respect to the ReserVe Account through the use
of a Qualified Letter of Credit, Qualified Insurance or other
equivalent credit enhancement device currently rated in one of
the two highest rating categories by Moody's Investors Service,
Inc. or Standard & Poor's Corporation. The City may contract
with the entity providing such Qualified Letter of Credit,
Qualified Insurance or other equivalent credit enhancement device
that the City's reimbursement obligation, if any, to such entity
ranks on a parity of lien with the Bonds.
In the event that the City elects additionally to secure any
issue of Additional Bonds through the use of a Qualified Letter
of Credit, Qualified Insurance or other equivalent credit
enhancement device, the City may contract with the entity
providing such Qualified Letter of Credit, Qualified Insurance or
other equivalent credit enhancement device that the City's
reimbursement obligation, if any, to such entity ranks on a
parity of lien with outstanding Bonds; provided that the payments
due under such reimbursement agreement are such that if such
reimbursement obligation were a series of Additional Bonds, such
Bonds could be issued in compliance with the provisions of
Article IV hereof.
In making the payments and credits to the Reserve Account
required by this Section 7.2, t0 the extent that the City has
obtained Qualified Insurance or a Qualified Letter of Credit for
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specific amounts required pursuant to this section to be paid out
of the Reserve Account, such amounts so covered by Qualified
Insurance or a Qualified Letter of Credit shall be credited
against the amounts required to be maintained in the Bond Reserve
Account by this Section 7.2.0 to the extent that such payments
and credits to be made are insured by an insurance company, or
guaranteed by a letter of credit from a financial institution.
Upon the expiration of any Qualified Letter of Credit or the
termination of any Qualified Insurance, the Reserve Account shall
be funded in accordance with the third paragraph of this
Section 7.2.0 as if the Bonds that remain outstanding had been
issued on the date of such notice of expiration or termination.
D. In the event that there shall be a deficiency in the
Interest Account, Principal Account or Bond Retirement Account in
the Bond Fund, the City shall promptly make up such deficiency
from the Reserve Account by the withdrawal of cash therefrom for
that purpose 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. The City covenants and agrees that any
deficiency created in the Reserve Account by reason of any
withdrawal therefrom for payment into the Interest Account,
Principal Account or Bond Retirement Account shall be made up
from moneys in the Light Fund first available after making
provision first for payment of Operating Expenses and then for
the required payments into such Interest, Principal and Bond
Retirement Accounts.
Moneys in the Bond Fund shall be transmitted to the Paying
Agents in amounts sufficient to meet the maturing installments of
principal of, premium, if any, and interest on the Bonds when
due. Whenever the assets of the Bond Fund shall be sufficient to
provide moneys to retire all Bonds then outstanding, including
such interest thereon as thereafter may become due and payable
and any premiums upon redemption thereof, no further payments
need be made into the Bond Fund. All moneys remaining in the
Bond Fund after provision for the payment in full of the prin-
cipal of, premium, if any, and interest on the Bonds shall be
returned to the Light Fund .
The Bond Fund shall be drawn upon solely for the purpose of
paying the principal of, premium, if any, and interest on the
Bonds. Moneys set aside from time to time with the Paying Agents
for such payment shall be held in trust for the owners of the
Bonds in respect of which the same shall have been so set aside.
Until so set aside, all moneys in the Bond Fund shall be held in
trust for the benefit of the owners of all Bonds at the time
outstanding equally and ratably.
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SECTION 7.3. Construction Account.
There is hereby authorized to be created in the office of
the Treasurer a special fund of the City to be known as the "1992
Electric System Revenue Bond Construction Account" (the
"Construction Account "). The Construction Account shall be
maintained in existence and shall be used to pay those costs of
the Plan to be financed by the 1992 Bonds and the costs of
issuing the 1992 Bonds. If, after the payment in full of all
costs of any such additions, improvements and betterments or
after adequate provision has been made for such payment, any
moneys remain in the Construction Account, the balance so
remaining shall be paid into the Bond Fund for credit to the
Reserve Account therein, unless and until there shall then be
credited to such Account moneys and Permitted Investments equal
to the Average Annual Debt Service, and any further remainder
shall be paid into the Contingency and Replacement Account.
SECTION 7.4. Arbitrage Rebate.
(a) General Rule. The City will pay to the United
States of America in accordance with the provisions of this
section (i) at least 90% of the Rebatable Arbitrage with respect
to the 1992 Bonds as of each Installment Computation Date,
(ii) 100% of the Rebatable Arbitrage with respect to the 1992
Bonds as of the Final Computation Date and (iii) any income
attributable to such Rebatable Arbitrage.
(b) Computation of Rebatable Arbitrage. The Rebatable
Arbitrage with respect to the 1992 Bonds computed in accordance
with the Rebate Computation Certificate and, as of each
Computation Date, will be the excess of:
(i) The future value of all Nonpurpose Receipts
with respect to the 1992 Bonds; over
(ii) The future value of all Nonpurpose Payments
with respect to the 1992 Bonds.
The future value will be computed as of each Computation Date.
(c) Payment Procedure.
(i) The payment of Rebatable Arbitrage due as of
each Installment Computation Date will be paid no later than the
date that is 60 days after the Installment Computation Date.
(ii) The payment of Rebatable Arbitrage due as of
the Final Computation Date will be paid no later than the latest
of (a) the date that is 60 days after the Final Computation Date,
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(b) the date that is 8 months after the date of issuance of the
1992 Bonds, or (c) the date 60 days after the earlier of the date
that the City no longer expects to spend gross proceeds of the
1992 Bonds within 6 months of the date of issuance of the 1992
Bonds or 12 months after the date of issuance of the 1992 Bonds.
(iii) Each payment of Rebatable Arbitrage will be
made to the Internal Revenue Service Center, Philadelphia,
Pennsylvania 19225, and will be accompanied by IRS Form 8038 -T.
(d) Other Methodology. Notwithstanding this
Section 7.4, payments of Rebatable Arbitrage will be made in
accordance with instructions provided by Preston Thorgrimson
Shidler Gates & Ellis if necessary to maintain the federal income
tax exemption for interest payments made on the 1992 Bonds.
SECTION 7.5. Investment of Funds.
Moneys held for the credit of the Interest Account, Prin-
cipal Account and Bond Retirement Account in the Bond Fund shall,
to the fullest extent practicable and reasonable, be invested and
reinvested at the direction of the City solely in, and obliga-
tions deposited in such accounts shall consist of, investments
described in clauses (a), (b), (c), (e) and (f) inclusive of the
definition of Permitted Investments which shall mature prior to
the respective dates when the moneys held for the credit of such
Accounts will be required for the purposes intended. Moneys in
the Reserve Account in the Bond Fund not required for immediate
disbursement for the purposes for which such Account is created
shall, to the fullest extent practicable and reasonable, be
invested and reinvested at the direction of the City solely in,
and obligations deposited in the Reserve Account shall consist of
investments described in clauses (a), (b), (c), (e) and (f) in
the definition of Permitted Investments, maturing or subject to
redemption at the option of the owner thereof within 20 years
from the date of such investment (but maturing prior to the final
maturity date of the Bonds then outstanding).
Moneys in the Light Fund and Construction Account and any
arbitrage rebate fund not required for immediate disbursement for
the purposes for which such Funds were created shall, to the
fullest extent practicable and reasonable, be invested and
reinvested by the City in Permitted Investments; provided that
investments in any capitalized interest account hereafter created
shall be those described in clauses (a) , (b) , (c) , (e) and (f) of
the definition of Permitted Investments.
Except to the extent there are deficiencies in any account
in the Bond Fund, all income received from the investment of
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moneys in the Bond Fund and the Light Fund shall be from time to
time deposited in the Light Fund.
All moneys held or set aside by the City in the Light Fund
Revenue Fund and Bond Fund shall, until otherwise invested or
applied as provided in this Ordinance, be deposited by the City
in its name, for the account of the Light Fund (and the
appropriate account therein) or the Bond Fund (and the
appropriate account therein), as the case may be, in such
depositary or depositaries as the City shall at any time or from
time to time appoint for such purpose. All moneys so deposited
shall be secured in the manner prescribed by the laws of the
State of Washington for the securing of funds of the City.
When no 1992 Bonds are outstanding and no Bonds are insured,
City funds may be invested in any manner permitted by Washington
law.
ARTICLE VIII
DISPOSITION OF PROCEEDS
SECTION 8.1. Disposition of the Proceeds from the Sale of the
1992 Bonds.
The proceeds of the 1992 Bonds shall be deposited as
follows:
A. The amount equal to the interest accruing on the 1992
Bonds from September 1, 1992, to the date of their delivery shall
be deposited in the Interest Account in the Bond Fund.
B. The amount, together with other moneys legally
available therefor, equal to the Average Annual Debt Service on
the 1992 Bonds shall be deposited in the Reserve Account in the
Bond Fund.
C. The balance of the proceeds shall be deposited in the
Construction Account and shall be used to pay the costs of the
Plan and to pay the costs of issuance of the 1992 Bonds.
ARTICLE IX
COVENANTS TO SECURE BONDS
The City covenants and agrees with the purchasers and owners
of all Bonds issued pursuant to this Ordinance, so long as any
such Bonds are outstanding, as follows:
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SECTION 9.1. Security for Bonds.
All Bonds are special limited obligations of the City
payable from and secured solely by Revenues, and by other moneys
and assets specifically pledged hereunder for the payment
thereof. There are hereby pledged as security for the payment of
the principal of, premium, if any, and interest on all Bonds in
accordance with the provisions of this Ordinance, subject only to
the provisions of this Ordinance restricting or permitting the
application thereof for the purposes and on the terms and condi-
tions set forth in this Ordinance: (i) the Revenues, and
(ii) the moneys and investments, if any, credited to the Light
Fund , the Construction Account and the Bond Fund, and the income
therefrom. The Revenues and other moneys and securities hereby
pledged shall immediately be subject to the lien of this pledge
without any physical delivery thereof or further act, and the
lien of this pledge shall be valid and binding as against all
parties having claims of any kind in tort, contract or otherwise
against the City regardless of whether such parties have notice
thereof.
All Bonds now or hereafter outstanding shall be equally and
ratably payable and secured hereunder without priority by reason
of date of adoption of the ordinance providing for their issuance
or by reason of their series, number or date of sale, issuance,
execution or delivery, or by the liens, pledges, charges, trusts,
assignments and covenants made herein, except as otherwise
expressly provided or permitted in this Ordinance and except as
to insurance which may be obtained by the City to insure the
repayment of one or more series or maturities within a series.
The pledge of the Revenue and of the amounts to be paid into
and maintained in the funds and accounts described above in this
Section to pay and secure the payment of Bonds is hereby declared
to be a prior lien and charge on the Revenues and the moneys and
investments in such funds and accounts, subject to provision for
operating capital and to the payment of Operating Expenses as
provided in Section 7.1.B hereof, and superior to all other liens
and charges of any kind or nature.
Bonds shall not in any manner or to any extent constitute
general obligations of the City or of the State of Washington, or
any political subdivision of the State of Washington, or a charge
upon any general fund or upon any moneys or other property of the
City or of the State of Washington, or of any political
subdivision of the State of Washington, not specifically pledged
thereto by this Ordinance.
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SECTION 9.2. Rate Covenant - General.
The City will establish, maintain and collect rates and
charges for electric power and energy and other services, facili-
ties and commodities sold, furnished or supplied through the
facilities of the Electric System that shall be fair and non-
discriminatory and adequate to provide Revenues sufficient,
together with other funds legally available therefor, for the
punctual payment of the principal of, premium, if any, and inter-
est on the Bonds for which the payment has not otherwise been
provided, for all payments which the City is obligated to make
into the Bond Fund, and for the proper operation and maintenance
of the Electric System, and all necessary repairs, replacements
and renewals thereof, including the payment of all taxes, assess-
ments or other governmental charges lawfully imposed on the
Electric System or the Revenues therefrom, or payments in lieu
thereof, and the payment of all other amounts which the City may
now or hereafter become obligated to pay from the Revenues by law
or contract.
SECTION 9.3. Rate Covenant - Debt Service Coverage.
The City will also establish, maintain and collect rates and
charges which shall be adequate to provide in each Fiscal Year
Net Revenues in an amount equal to at least 1.25 times the Annual
Debt Service on the then outstanding Bonds in such Fiscal Year.
For the purpose of meeting the requirement of this paragraph,
(i) there may be added to Net Revenues for any Fiscal Year such
amount, withdrawn from the Rate Stabilization Account and
deposited in the General Account, and (ii) there must be
subtracted from Net Revenues for any Fiscal Year such amounts as
are withdrawn from the General Account and deposited into the
Rate Stabilization Account for such Fiscal Year.
The City also covenants and agrees to maintain Net Revenues
for the then current Fiscal Year in an amount that will be equal
to the Annual Debt Service on the then outstanding Bonds in such
Fiscal Year.
The failure to collect Revenues in any Fiscal Year
sufficient to comply with the covenants contained in this
Section 9.3 shall not constitute an Event of Default if the City,
before the 60th day of the following Fiscal Year:
A. Employs a Professional Utility Consultant to recommend
changes in the City's rates which are estimated to produce
Revenues sufficient (once the rates recommended by the
Professional Utility Consultant have been imposed by the City) to
meet the requirements of this Section; and
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B. Promptly imposes rates at least as high as those
recommended by such Professional Utility Consultant.
The calculation of the coverage requirements set forth
above, and in Section 4.2 hereof, and the City's compliance
therewith, may be made solely with reference to this Ordinance
without regard to future changes in generally accepted accounting
principles. If the City has changed one or more of the
accounting principles used in the preparation of its financial
statements, because of a change in generally accepted accounting
principles or otherwise, then an event of default relating to
these coverage requirements shall not be considered an Event of
Default if the coverage requirement ratios would have been
complied with had the City continued to use those accounting
principles employed at the date of the most recent audited
financial statements prior to the date of this Ordinance.
SECTION 9.4. Restrictions on Contracting of Obligations
Secured by Revenues.
A. The City will not hereafter create any other special
fund or funds for the payment of revenue bonds, warrants or other
revenue obligations, or issue any bonds, warrants or other
obligations or create any additional indebtedness which will rank
on a parity with or prior to the charge and lien on the Revenues
or properties of the Electric System for the payments into the
Bond Fund, except as provided under Article IV hereof.
B. Additional Bonds may be issued as provided in
Article IV.
C. The City may issue bonds, notes, warrants or other
obligations payable from and secured by a lien on the Revenues of
the Electric System that is subordinate or inferior to the lien
on such Revenues securing the Bonds and may create a special fund
or funds for payment of such subordinate obligations.
D. Unless such agreement specifically states that the
obligation of the City thereunder is junior to the obligation of
the City to make payments from the Light Fund into the Bond Fund,
the City shall not hereafter enter into any agreement obligating
the City to pay, from Revenues, for (a) generating or
transmission capacity or the use or lease of generating or
transmission facilities, which agreement is not conditional on
the availability of such capacity or facility, or (b) the
installment purchase or lease of property which, whether or not
subject to annual appropriations, otherwise transfers to the City
the burdens and benefits of ownership of such property.
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SECTION 9.5. Covenant to Maintain System in Good Condition.
The City shall at all times maintain, preserve and keep, or
cause to be maintained, preserved and kept, the properties of the
Electric System and all additions and betterments thereto and
extensions thereof and every part and parcel thereof, in good
repair, working order and condition, and will from time to time
make, or cause to be made, all necessary and proper repairs,
renewals, replacements, extensions and betterments thereto so
that at all times the business carried on in connection therewith
shall be properly and advantageously conducted. The City will at
all times operate such properties and the business in connection
therewith or cause such properties and business to be operated in
an efficient manner and at a reasonable cost.
SECTION 9.6. Covenants Concerning Disposal of Properties of
System.
The City shall not sell, mortgage, lease or otherwise
dispose of the properties of the Electric System except as
provided in this Section.
A. The City will not sell or otherwise dispose of the
Electric System in its entirety unless simultaneously with such
sale or other disposition, provision is made for the payment,
redemption or other retirement of all Bonds then outstanding.
B. Except as provided in C below, the City will not sell
or otherwise dispose of any part of the Electric System unless
provision is made for the payment, redemption or other retirement
of a principal amount of Bonds equal to the greater of the
following amounts, provided, such amount is in excess of
$100,000:
(1) An amount that will be in the same proportion to
the net principal amount of Bonds then outstanding (defined as
the total principal amount of Bonds outstanding less the amount
of cash and investments in the Bond Fund) that the Revenues
attributable to the part of the Electric System sold or disposed
of for the twelve preceding months bears to the total Revenues
for such period; or
(2) An amount that will be in the same proportion to
the net principal amount of Bonds then outstanding that the book
value of the part of the Electric System sold or disposed of
bears to the book value of the entire Electric System immediately
prior to such sale or disposition.
The City shall only be required to comply with the
requirements of subsections (1) and (2) above if the proceeds of
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such sale, lease or other disposition shall exceed 2% of the
value of the net utility plant of the Electric System.
C. The City may sell or otherwise dispose of any part of
the Electric System that shall have become unserviceable,
inadequate, obsolete or unfit to be used in the operation of the
Electric System, or no longer necessary, material to or useful in
such operation, and may also sell or otherwise dispose of street
lighting systems now or hereafter owned by the City at a price
permitted by law. The proceeds of any such sale or disposition
pursuant to this subsection C shall be paid into the Bond Fund
for credit to the Reserve Account to the extent of any deficiency
in such Reserve Account, and the balance of such proceeds, if
any, shall be deposited in the Light Fund .
D. Notwithstanding any other provision of this Section 9.6
to the contrary, the City may sell or otherwise dispose of any
part of the Electric System if the City obtains a certificate
satisfying the requirements of Section 4.2.B or Section 4.2.0
hereof.
SECTION 9.7. Insurance.
The City shall either self- insure or, as needed, and to the
extent insurance coverage is available at reasonable cost with
responsible insurers, keep, or cause to be kept, the Electric
System and the operation thereof insured, with policies payable
to the City, against the risks of direct physical loss, damage to
or destruction of the Electric System, or any part thereof, and
against accidents, casualties or negligence, including liability
insurance and employer's liability, at least to the extent that
similar insurance is usually carried by electric utilities
operating like properties.
In the event of any loss or damage to the properties of the
Electric System covered by insurance, the City will (i) with
respect to each such loss, promptly repair and reconstruct to the
extent necessary to the proper conduct of the operations of the
Electric System the lost or damaged portion thereof and shall
apply the proceeds of any insurance policy or policies covering
such loss or damage for that purpose to the extent required
therefor, unless in the case of loss or damage involving $300,000
or more, such repair and reconstruction shall not be recommended
by the Professional Utility Consultant, and (ii) if the City
shall not use the entire proceeds of such insurance to repair or
reconstruct such lost or damaged property, such insurance
proceeds thereof not so used shall be paid into the Light Fund ,
and if in excess of $300,000 for any one loss or damage, shall be
used to purchase or redeem Bonds or to acquire or construct
extensions, betterments and improvements to the Electric System.
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SECTION 9.8. Books of Account.
The City shall keep proper books of account as required by
this Ordinance in accordance with the rules and regulations
prescribed by the Division of Municipal Corporations of the
Office of the State Auditor of the State of Washington, or other
State department or agency succeeding to such duties of the State
Auditor's office, and if no such rules or regulations are pre-
scribed, then in substantial accordance with the uniform system
of accounts prescribed by the Federal Energy Regulatory Council
or other federal agencies having jurisdiction over electric
public utility companies owning and operating properties similar
to the electric properties operated by the City, whether or not
the City is at that time required by law to use such system of
accounts. The City shall cause its books of account to be
audited by the Office of the State Auditor or other state agency
as may be authorized and directed by law to make such audit, or
if the audit shall not be made within twelve months after the
close of any Fiscal Year of the City, then the City shall cause
such audit to be made by independent certified public accountants
licensed, registered or entitled to practice, and practicing as
such, under the laws of the State of Washington who, or each of
whom, is in fact independent and does not have any interest,
direct or indirect, in any contract with the City other than his
contract of employment pursuant to this Section and who is not
connected with the City as an officer or employee of the City.
In keeping the books of account, the City shall accrue
depreciation monthly on depreciable properties operated by the
City in accordance with the accounting practice prescribed by the
uniform system of accounts of the Federal Energy Regulatory
Council above mentioned. The City will furnish a copy of the
most recent audit report to any owner of Bonds upon written
request therefor. Any owner of Bonds may also obtain at the
office of the City copies of the balance sheet and income and
expense statements showing in reasonable detail the financial
condition of the Electric System as of the close of each Fiscal
Year, including the transactions relating to the Light Fund , the
Bond Fund, and all other funds and accounts created or maintained
pursuant to the provisions of this Ordinance.
SECTION 9.9. Covenant Not to Render Service Free of Charge.
So long as any Bonds are outstanding, the City shall not
furnish or supply or permit the furnishing or supplying of elec-
tric energy or any other commodity, service or facility furnished
by or in connection with the operation of the Electric System
free of charge to any person, firm or corporation, public or
private, and the City will promptly enforce the payment of any
and all accounts owing to the City and delinquent, by
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discontinuing service or by filing suits, actions or proceedings,
or by both discontinuance of service and filing suit; provided,
that to the extent permitted by law, the City may loan money and
may provide commodities, services or facilities free of charge or
at a reduced charge in connection with a plan of conservation of
electric energy or senior citizen or indigent ratepayer discounts
adopted by the Council.
SECTION 9.10. Covenant to Make Only Economically Sound
Improvements.
The City shall not expend any moneys in the Light Fund or
the proceeds of Additional Bonds or other obligations for any
renewals, replacements, extensions, betterments and improvements
to the Electric System which are not economically sound, and
which will not properly and advantageously contribute to the
conduct of the business of the City in an efficient and
economical manner; provided that the foregoing shall not preclude
the City from paying any legal or contractual obligations.
SECTION 9.11. Covenant to Pay Bond Principal and Interest
Punctually.
The City shall duly and punctually pay or cause to be paid,
but only from the Bond Fund, the principal of, premium, if any,
and interest on each and every Bond on the dates and at the
places and in the manner provided in the Bonds, according to the
true intent and meaning thereof, and will faithfully do and
perform and fully observe and keep any and all covenants, under-
takings, stipulations and provisions contained in the Bonds and
in this Ordinance and each Supplemental Ordinance authorizing
Additional Bonds.
SECTION 9.12. Covenant to Pay Taxes. Assessments and Other
Claims.
The City shall from time to time duly pay and discharge, or
cause to be paid and discharged, when the same shall become due,
all taxes, assessments and other governmental charges, or
payments in lieu thereof, lawfully imposed upon the Electric
System or the Revenues, and all claims for labor and materials
and supplies which, if not paid, might become a lien or charge
upon the Electric System, or any part thereof, or upon the
Revenues, or which might in any way impair the security of the
Bonds, except taxes, assessments, charges or claims which the
City shall in good faith contest by proper legal proceedings.
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SECTION 9.13.
Covenant to Retain Competent Management.
The City shall at all times retain and employ a competent
manager for the Electric System who shall be an experienced
executive of administrative ability. All employees or agents of
the City who collect or handle money of the City shall be bonded
by a responsible surety company or companies in amounts
sufficient to protect the City adequately from loss.
SECTION 9.14. Further Assurances.
The City shall, at any and all times, insofar as it may be
authorized so to do, pass, make, do, execute, acknowledge and
deliver all and every such further ordinances, acts, deeds,
conveyances, assignments, transfers and assurances as may be
necessary or desirable for the better assuring, conveying,
granting, assigning and confirming any and all of the rights,
Revenues and other funds hereby pledged or assigned to the
payment of the Bonds, or intended so to be, or which the City may
hereafter become bound to pledge or assign.
SECTION 9.15. Tax Covenants.
The City shall comply with the provisions of this Section
unless, in the written opinion of bond counsel to the City, such
compliance is not required in order to maintain the exemption of
the interest on the 1992 Bonds from federal income taxation.
The City hereby covenants that it will not make any use of
the proceeds of sale of the 1992 Bonds or any other funds of the
City which may be deemed to be proceeds of such 1992 Bonds
pursuant to Section 148 of the federal Internal Revenue Code of
1986 and the applicable regulations thereunder that will cause
the 1992 Bonds to be "arbitrage bonds" within the meaning of said
section and said regulations. The City will comply with the
requirements of Section 148 of the Internal Revenue Code of 1986,
as amended (or any successor provision thereof applicable to the
1992 Bonds), and the applicable regulations thereunder throughout
the term of the 1992 Bonds.
The City further covenants that it will not take any action
or permit any action to be taken that would cause the 1992 Bonds
to constitute "private activity bonds" under Section 141 of the
federal Internal Revenue Code of 1986, as amended.
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ARTICLE X
SUPPLEMENTAL AND AMENDATORY ORDINANCES
SECTION 10.1. Amendments Without Consent of Bondowners.
The City may adopt at any time and from time to time without
the consent of the owners of any Bonds an ordinance or ordinances
supplemental to or amendatory of Ordinance Nos. 1130 or 1218,
this Ordinance and any Supplemental Ordinance theretofore adopted
for any one or more of the following purposes:
(1) To provide for the issuance of Additional Bonds
pursuant to Article IV hereof, and to prescribe the terms and
conditions pursuant to which such Bonds may be issued, paid or
redeemed;
(2) To add additional covenants and agreements of the
City for the purpose of further securing the payment of the
Bonds, provided such additional covenants and agreements are not
contrary to or inconsistent with the covenants and agreements of
the City contained in this Ordinance or any Supplemental
Ordinance;
(3) To prescribe further limitations and restrictions
upon the issuance of Bonds and the incurring of indebtedness by
the City payable from the Revenues which are not contrary to or
inconsistent with the limitations and restrictions thereon
theretofore in effect;
(4) To surrender any right, power or privilege re-
served to or conferred upon the City by the terms of this
Ordinance;
(5) To confirm as further assurance any pledge under,
and the subjection to any lien, claim or pledge created or to be
created by, the provisions of this Ordinance of the Revenues or
of any other moneys, securities or funds;
(6) To cure any ambiguity or defect or inconsistent
provision of this Ordinance or any Supplemental Ordinance or to
insert such provisions clarifying matters or questions arising
under this Ordinance or any Supplemental Ordinance as are
necessary or desirable in the event any such modifications are
not contrary to or inconsistent with this Ordinance or any
Supplemental Ordinance as theretofore in effect;
(7) To appoint a Bond Fund Trustee and specify the
qualifications, duties, rights and immunities of such Trustee; or
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(8) To modify any of the provisions of this Ordinance
or any Supplemental Ordinance in any other respect; provided that
such modification shall not be effective until after the Bonds
outstanding as of the date of adoption of such ordinance shall
cease to be outstanding, and any Bonds issued under such
ordinance shall contain a specific reference to the modifications
contained in such subsequent ordinance.
SECTION 10.2. Amendments With Consent of Bondowners.
The provisions of this Ordinance and of any Supplemental
Ordinance may be modified at any time or from time to time by a
Supplemental Ordinance, with the consent of bondowners in accord-
ance with and subject to the provisions of Article XII hereof.
Written notice of any amendment to this Ordinance or any
Supplemental Ordinance shall be given to Moody's Investors
Service, 99 Church Street, New York, NY 10007, Attention: Public
Finance.
ARTICLE XI
DEFAULTS AND REMEDIES
SECTION 11.1. Events of Default.
The Council of the City hereby finds and determines that the
continuous operation of the Electric System and the collection,
deposit and disbursement of the Revenues in the manner provided
in this Ordinance and in any Supplemental Ordinance are essential
to the payment and security of the Bonds, and the failure or
refusal of the City to perform the covenants and obligations
contained in this Ordinance or any such Supplemental Ordinance
will endanger the necessary continuous operation of the Electric
System and the application of the Revenues to the purposes set
forth in this Ordinance. This Ordinance and each Supplemental
Ordinance adopted pursuant to Article X are hereinafter in this
Article XI and in Article XII referred to collectively as "the
Ordinance ".
The City hereby covenants and agrees with the purchasers and
owners from time to time of the Bonds, in order to protect and
safeguard the covenants and obligations undertaken by the City
securing the Bonds, that the following shall constitute "Events
of Default":
(1) If the City shall default in the performance of
any obligations with respect to payments into the Light Fund;
(2) If default shall be made in the due and punctual
payment of the principal of and premium, if any, on any of the
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Bonds when the same shall become due and payable, either at
maturity or by proceedings for redemption or otherwise;
(3) If default shall be made in the due and punctual
payment of any installment of interest on any Bond;
(4) If the City shall fail, by any Sinking Fund
Requirement Date, to have purchased or redeemed Term Bonds in a
cumulative principal amount at least equal to the cumulative
Sinking Fund Requirements at such Sinking Fund Requirement Date;
(5) If the City shall default in the observance and
performance of any other of the covenants, conditions and
agreements on the part of the City contained in the Ordinance and
such default or defaults shall have continued for a period of 60
days after the City shall have received from a Bondowners'
Trustee or from the owners of not less than 20% in principal
amount of the Bonds outstanding, a written notice specifying and
demanding the cure of such default;
(6) If the City shall (except as herein permitted)
sell, transfer, assign or convey any properties constituting the
Electric System or interests therein, or any part or parts
thereof, or shall make any agreement for such sale or transfer
(except as expressly authorized by Section 9.6 hereof);
(7) If an order, judgment or decree shall be entered
by any court of competent jurisdiction: (a) appointing a
receiver, trustee or liquidator for the City or the whole or any
substantial part of the Electric System; (b) approving a petition
filed against the City seeking the bankruptcy, arrangement or
reorganization of the City under any applicable law of the United
States or the State of Washington; or (c) assuming custody or
control of the City or of the whole or any substantial part of
the Electric System under the provisions of any other law for the
relief or aid of debtors and such order, judgment or decree shall
not be vacated or set aside or stayed (or, in case custody or
control is assumed by said order, such custody or control shall
not be otherwise terminated) within 60 days from the date of the
entry of such order, judgment or decree; or
(8) If the City shall: (a) admit in writing its
inability to pay its debts generally as they become due; (b) file
a petition in bankruptcy or seeking a composition of indebtedness
under any state or federal bankruptcy or insolvency law; (c) make
an assignment for the benefit of its creditors; (d) consent to
the appointment of a receiver of the whole or any substantial
part of the Electric System; or (e) consent to the assumption by
any court of competent jurisdiction under the provisions of any
other law for the relief or aid of debtors of custody or control
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of the City or of the whole or any substantial part of the
Electric System.
SECTION 11.2. Waivers of Default.
No delay or omission of the Bondowners' Trustee or of any
owner of Bonds to exercise any right or power arising upon the
happening of an Event of Default shall impair any right or power
or shall be construed to be a waiver of any such Event of Default
or to be an acquiescence therein; and every power and remedy
given by this Article to the Bondowners' Trustee or to the owners
of Bonds may be exercised from time to time and as often as may
be deemed expedient by the Bondowners Trustee or by such owners.
The Bondowners' Trustee or the owners of not less than 50%
in principal amount of the Bonds at the time outstanding, or
their attorneys -in -fact duly authorized, may on behalf of the
owners of all of the Bonds waive any past default under the
Ordinance and its consequences, except a default in the payment
of the principal of, premium, if any, or interest on any of the
Bonds. No such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 11.3 Bondowners' Trustee.
So long as an Event of Default shall not have been remedied,
a Bondowners' Trustee may be appointed by the owners of 20% in
principal amount of the Bonds then outstanding, by an instrument
or concurrent instruments in writing signed and acknowledged by
such bondowners or by their attorneys -in -fact duly authorized and
delivered to such Trustee, notification thereof being given to
the City. Any Bondowners' Trustee appointed under the provisions
of this Section 11.3 shall be a bank or trust company organized
under the laws of the State of Washington or the State of New
York or a national banking association. The fees and expenses of
the Bondowners' Trustee shall be borne by the bondowners and not
by the City. The bank or trust company acting as Bondowners'
Trustee may be removed at any time, and a successor Bondowners'
Trustee may be appointed, by the owners of a majority in prin-
cipal amount of the Bonds and any Additional Bonds issued
pursuant to this Ordinance, by an instrument or concurrent
instruments in writing signed and acknowledged by such bondowners
or by their attorneys -in -fact duly authorized.
The Bondowners' Trustee appointed in the manner herein
provided, and each successor thereto, is hereby declared to be a
trustee for the owners of all the Bonds and is empowered to
exercise all the rights and powers herein conferred on the
Bondowners' Trustee.
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SECTION 11.4. Sui s at Law or in Equity.
The Bondowners' Trustee may upon the happening of an Event
of Default, and during the continuance thereof, take such steps
and institute such suits, actions or other proceedings in its own
name, or as trustee, all as it may deem appropriate for the
protection and enforcement of the rights of bondowners to collect
any amounts due and owing the City, or to obtain other
appropriate relief, and may enforce the specific performance of
any covenant, agreement or condition contained in this Ordinance,
or in any of the Bonds.
Any action, suit or other proceedings instituted by the
Bondowners' Trustee hereunder shall be brought in its name as
trustee for the bondowners and all such rights of action upon or
under any of the Bonds or the provisions of this Ordinance may be
enforced by the Bondowners' Trustee without the possession of any
of said Bonds, and without the production of the same at any
trial or proceedings relative thereto except where otherwise
required by law, and the respective owners of said Bonds, by
taking and holding the same, shall be conclusively deemed irrev-
ocably to appoint the Bondowners' Trustee the true and lawful
trustee of the respective owners of said Bonds, with authority to
institute any such action, suit or proceeding; to receive as
trustee and deposit in trust any sums becoming distributable on
account of said Bonds; to execute any paper or documents for the
receipt of such money, and to do all acts with respect thereto
that the bondowner himself might have done in person. Nothing
herein contained shall be deemed to authorize or empower the
Bondowners' Trustee to consent to accept or adopt, on behalf of
any owner of any Bond, any plan or reorganization or adjustment
affecting the said Bonds of the City or any right of any owner
thereof, or to authorize or empower the Bondowners' Trustee to
vote the claims of the owners thereof in any receivership,
insolvency, liquidation, bankruptcy, reorganization or other
proceeding to which the City shall be a party.
SECTION 11.5. Books of City Open to Inspection.
The City covenants that if an Event of Default shall have
happened and shall not have been remedied, the books of record
and account of the City shall at all times be subject to the
inspection and use of the Bondowners' Trustee.
The City covenants that if an Event of Default shall happen
and shall not have been remedied, the City will continue to
account, as a trustee of an express trust, for all Revenues and
other moneys, securities and funds pledged under this Ordinance.
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SECTION 11.6. Payment of Funds to Bondowners' Trustee.
The City covenants that if an Event of Default shall happen
and shall not have been remedied, the City, upon demand of the
Trustee, shall pay over to the Bondowners' Trustee (i) forthwith,
all moneys, securities and funds then held by the City and
pledged under this Ordinance, and (ii) as promptly as practicable
after receipt thereof, all Revenues.
SECTION 11.7. Application of Funds by Bondowners' Trustee.
During the continuance of an Event of Default the Revenues
received by the Bondowners' Trustee pursuant to the provisions of
the preceding paragraph shall be applied by the Bondowners'
Trustee, first, to the payment of the reasonable and proper
charges, expenses and liabilities paid or incurred by the Trustee
(including the cost of securing the services of any engineer or
firm of engineers selected for the purpose of rendering advice
with respect to the sufficiency of the rates and charges for
power and energy sold, furnished or supplied by the Electric
System), and second, in accordance with the provisions of Section
7.1 of this Ordinance.
In the event that at any time the funds held by the
Bondowners' Trustee and the Paying Agent for the Bonds shall be
insufficient for the payment of the principal of, premium, if
any, and interest then due on the Bonds, such funds (other than
funds held for the payment or redemption of particular Bonds
which have theretofore become due at maturity or by call for
redemption) and all Revenues and other moneys received or
collected for the benefit or for the account of owners of the
Bonds by the Bondowners' Trustee shall be applied as follows:
First, to the payment to the persons entitled thereto
of all installments of interest then due in the order of the
maturity of such installments, earliest maturities first,
and, if the amount available shall not be sufficient to pay
in full any installment or installments or interest maturing
on the same date, then to the payment thereof ratably,
according to the amounts due thereon, to the persons
entitled thereto, without any discrimination or preference;
and
Second, to the payment to the persons entitled thereto
of the unpaid principal and premium, if any, of any Bonds
which shall have become due, whether at maturity or by call
for redemption, in the order of their due datee, earliest
maturities first, and, if the amount available shall not be
sufficient to pay in full all the Bonds due on any date,
then to the payment thereof ratably, according to the
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amounts of principal and premium, if any, due on such date,
to the persons entitled thereto, without any discrimination
or preference.
SECTION 11.8. Relinquishment of Funds Upon Remedy of Default.
If and whenever all overdue installments of interest on all
Bonds, together with the reasonable and proper charges, expenses
and liabilities of the Bondowners' Trustee and the owners of
Bonds, their respective agents and attorneys, and all other sums
payable by the City under this Ordinance, including the principal
of, premium, if any, and accrued unpaid interest on all Bonds
which shall then be payable (with interest upon such principal
and premium, if any, and, to the extent that payment of such
interest is enforceable under applicable law, on overdue
installments of interest, at the same rate as the rate of
interest specified in the Bonds, to the date of such payment or
deposit), shall either be paid by or for the account of the City,
or provision satisfactory to the Trustee shall be made for such
payment, and all defaults under this Ordinance or the Bonds shall
be made good or secured to the satisfaction of the Bondowners'
Trustee or provision deemed by the Bondowners' Trustee to be
adequate shall be made therefor, the Bondowners' Trustee shall
pay over to the City all moneys, securities, funds and Revenues
then remaining unexpended in the hands of the Bondowners' Trustee
and thereupon all Revenues shall thereafter be applied as pro-
vided in this Ordinance. No such payment over to the City by the
Bondowners' Trustee or resumption of the application of Revenues
as provided in this Ordinance shall extend to or affect any sub-
sequent default under this Ordinance or impair any right
consequent thereon.
SECTION 11.9. Suits by Individual Bondowners.
No owner of any one or more of said Bonds shall have any
right to institute any action, suit or proceeding at law or in
equity, unless an Event of Default shall have happened and be
continuing, and unless no Bondowners' Trustee has been created as
herein provided, but any remedy herein authorized to be exercised
by the Bondowners' Trustee may be exercised individually by any
bondowner, in his own name and on his own behalf or for the
benefit of all bondowners, in the event no Bondowners' Trustee
has been appointed, or with the consent of the Bondowners'
Trustee if such Bondowners' Trustee has been appointed; provided,
however, that nothing in this Ordinance or in the Bonds shall
affect or impair the obligation of the City, which is absolute
and unconditional, to pay from Net Revenues the principal of and
interest on the Bonds to the respective owners thereof at the
respective due dates therein specified, or affect or impair the
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right of action, which is absolute and unconditional, of such
owners to enforce such payment.
SECTION 11.10. Remedies Granted in Ordinance not Exclusive.
No remedy by the terms of the Ordinance conferred upon or
reserved to the Bondowners' Trustee or the owners of the Bonds is
intended to be exclusive of any other remedy, but each and every
such remedy shall be cumulative and shall be in addition to every
other remedy given under the Ordinance or existing at law or in
equity or by statute on or after the date of .adoption of the
Ordinance.
ARTICLE XII
AMENDMENTS AND BONDOWNERS MEETINGS
SECTION 12.1. Call of Bondowners Meetings.
The City, the Bondowners' Trustee or the owners of not less
than 20% in principal amount of the Bonds then outstanding may at
any time call a meeting of the owners of the Bonds. Every such
meeting shall be held at such place in the City of New York,
State of New York, or in the City of Seattle, State of
Washington, as may be specified in the notice calling such
meeting. Written notice of such meeting, stating the place and
time of the meeting and in general terms the business to be
transacted, shall be mailed to the bondowners by the City, the
Bondowners' Trustee or the bondowners calling such meeting not
less than 30 nor more than 60 days before such meeting, and shall
be published at least once a week for four successive calendar
weeks on any day of the week, the date of first publication to be
not less than 30 nor more than 60 days preceding the meeting;
provided, however, that the mailing of such notice shall in no
case be a condition precedent to the validity of any action taken
at any such meeting. The expenses of publication of such notice
shall be paid or reimbursed by the City. Any meeting of
bondowners shall, however, be valid without notice if the owners
of all Bonds then outstanding are present in person or by proxy
or if notice is waived before or within 30 days after the meeting
by those not so present.
SECTION 12.2. Notice to Bondowners.
Except as otherwise provided in this Ordinance, any pro-
vision in this Ordinance for the mailing of a notice or other
paper to bondowners shall be fully complied with if it is mailed
by first class mail, postage prepaid, to each registered owner of
any of the Bonds then outstanding at his address, if any,
appearing upon the Bond Register; and any provision in this
Ordinance contained for publication of a notice or other matter
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shall require the publication thereof in The Daily Bond Buyer in
the City of New York, State of New York (or in lieu of
publication in The Daily Bond Buyer, in a daily newspaper printed
in the English language and customarily published on each
business day of general circulation in the Borough of Manhattan,
the City of New York, State of New York), and also in a daily
newspaper printed in the English language and customarily
published on each business day and of general circulation in the
City of Seattle, State of Washington.
SECTION 12.3. Proxies; Proof of Ownership of Bonds.
Attendance and voting by bondowners at such meetings may be
in person or by proxy. Owners of Bonds may, by an instrument in
writing under their hands, appoint any person or persons, with
full power and substitution, as their proxy to vote at any
meeting for them. Officers or nominees of the City may be
present or represented at such meeting and take part therein but
shall not be entitled to vote thereat, except as such officers or
nominees are bondowners or proxies for bondowners.
Any registered owner of Bonds shall be entitled in person or
by proxy to attend and vote at such meeting as owner of the Bonds
registered in his name without producing such Bonds, and such
persons and their proxies shall, if required, produce such proof
of personal identity as shall be satisfactory to the Secretary of
the meeting. All proxies presented at such meeting shall be
delivered to the Inspectors of Votes and filed with the Secretary
of the meeting.
The vote at any such meeting of the owner of any Bond enti-
tled to vote thereat shall be binding upon such owner and upon
every such subsequent owner of such Bond (whether or not such
subsequent owner has notice thereof).
SECTION 12.4. Execution of Instruments by Bondowners.
Any request, direction, consent or other instrument in
writing required or permitted by this Ordinance to be• signed or
executed by bondowners may be in any number of concurrent instru-
ments of similar tenor, and may be signed or executed by such
bondowners in person or by agent appointed by an instrument in
writing. Proof of the execution of any such instrument shall be
sufficient for any purpose of this Ordinance if made by either
(a) an acknowledgment executed by a notary public or other
officer empowered to take acknowledgments of deeds to be recorded
in the particular jurisdiction, or (b) an affidavit of a witness
to such execution sworn to before such a notary public or other
officer. Where such execution is by an officer of a corporation
or association or a member of a partnership on behalf of such
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corporation, association or partnership, such acknowledgment or
affidavit shall also constitute sufficient proof of his
authority.
The foregoing shall not be construed as limiting the City to
such proof, it being intended that the City may accept any other
evidence of the matters herein stated which it may deem
sufficient. Any request or consent of the owner of any Bond
shall bind every future owner of the same Bond in respect of
anything done by the City in pursuance of such request, direction
or consent.
The right of a proxy for a bondowner to act may be proved
(subject to the City's right to require additional proof) by a
written proxy executed by such bondowner as aforesaid.
SECTION 12.5. Appointment of Officers at Bondowners Meetings.
Persons named by the City or elected by the owners of a
majority in principal amount of the Bonds represented at the
meeting in person or by proxy in the event the City is not
represented at such meeting, shall act as temporary Chairman and
temporary Secretary of any meeting of bondowners. A permanent
Chairman and a permanent Secretary of such meeting shall be
elected by the owners of a majority in principal amount of the
Bonds represented at such meeting in person or by proxy. The
permanent Chairman of the meeting shall appoint two Inspectors of
Votes who shall count all votes cast at such meeting, except
votes on the election of Chairman and Secretary as aforesaid, and
who shall make and file with the Secretary of the meeting and
with the City their verified report of all such votes cast at the
meeting.
SECTION 12.6. Ouorum at Bondowners Meetings.
The owners of not less than the principal amount of the
Bonds required for any action to be taken at such meeting must be
present at such meeting in person or by proxy in order to con-
stitute a quorum for the transaction of business, less than a
quorum, however, having power to adjourn from time to time
without any other notice than the announcement thereof at the
meeting; provided, however, that, if such meeting is adjourned by
less than a quorum for more than ten days, notice thereof shall
be published by the City at least five days prior to the
adjourned date of the meeting.
SECTION 12.7. Vote Required to Amend Ordinance.
Any amendment to the provisions of the Ordinance, in any
particular except the percentage of bondowners the approval of
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which is required to approve such amendment, may be made by a
Supplemental Ordinance of the City and an ordinance duly adopted
by the affirmative vote at a meeting of bondowners duly convened
and held, or with written consent as hereinafter provided in
Section 12.9, of the owners of not less than 66 2/3% in principal
amount of the Bonds outstanding when such meeting is held or such
consent is given; provided, however, that no such amendment shall
(a) extend the date of payment of the principal of any Bond or of
any installment of interest thereon or reduce the principal or
redemption price thereof or the rate of interest thereon or
advance the date upon which any Bond may first be called for
redemption prior to its fixed maturity date; (b) give to any Bond
or Bonds any preference over any other Bond or Bonds secured
equally and ratably therewith; (c) reduce the aforesaid
percentage of Bonds the owners of which are required to consent
to any such ordinance amending the provisions of this Ordinance;
or (d) authorize the creation of any pledge prior to or, except
as provided in Article IV hereof for the issuance of Additional
Bonds, on a parity with the pledge afforded by this Ordinance,
without the consent of the owner of each such Bond affected
thereby.
SECTION 12.8. Obtaining Approval of Amendments at Bondowners
Meeting.
The City may at any time adopt an ordinance amending the
provisions of the Ordinance to the extent that such amendment is
permitted by the provisions of Section 12.7 hereof, to take
effect when and as provided in this Section. At any time
thereafter such ordinance may be submitted by the City for
approval to a meeting of the bondowners duly convened and held in
accordance with the provisions of the Ordinance. A record in
duplicate of the proceedings of each meeting of the bondowners
shall be prepared by the permanent Secretary of the meeting and
shall have attached thereto the original reports of the
Inspectors of Votes and affidavits by a person or persons having
knowledge of the facts, showing a copy of the notice of the
meeting and setting forth the facts with respect to the mailing
and publication thereof under the provisions of the Ordinance.
Such a record shall be signed and verified by the affidavits of
the permanent Chairman and the permanent Secretary of the
meeting, and one duplicate thereof shall be delivered to the
City. Any record so signed and verified shall be proof of the
matters therein stated. If the ordinance of the City making such
amendment shall be approved by a ordinance duly adopted at such
meeting of bondowners by the affirmative vote of the owners of
the required percentages of Bonds, a notice stating that a
ordinance approving such amendment has been so adopted shall be
mailed by the City to each bondowner who has requested such
notice (but failure so to mail copies of such notice shall not
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affect the validity of such ordinance) and shall be published at
least once in the manner provided in Section 12.2 hereof. Proof
of such mailing and publication by the affidavit or affidavits of
a person or persons having knowledge of the facts shall be filed
with the City. Such ordinance of the City making such amendment
shall be deemed conclusively to be binding upon the City, the
Paying Agents, and the owners of all Bonds at the expiration of
30 days after the publication of the notice provided for in this
Section, except in the event of a final decree of a court of com-
petent jurisdiction setting aside such ordinance or annulling the
action taken thereby in a legal action or equitable proceeding
for such purpose commenced within such period; provided that the
City and any Paying Agents during such 30 day period and any such
further period during which such action or proceeding may be
pending shall be entitled in their absolute discretion to take
such action, or to refrain from taking such action, with respect
to such ordinance as they may deem expedient. Nothing in the
Ordinance contained shall be deemed or construed to authorize or
permit, by reason of any call of a meeting of bondowners or of
any right conferred hereunder to make such a call, any hindrance
or delay in the exercise of any rights conferred upon or reserved
to the Paying Agents or the bondowners under any of the
provisions of the Ordinance.
SECTION 12.9. Alternate Method of Obtaining Approval of
Amendments.
The City may at any time adopt an ordinance amending the
provisions of the Ordinance, or of any Bonds, to the extent that
such amendment is permitted by the provisions of this Article, to
take effect when and as provided in this Section. Upon adoption
of such ordinance, a request that bondowners consent thereto
shall be mailed by the City to the bondowners and notice that the
City is requesting bondowners to consent to such amendment shall
be published at least once in the manner provided in Section 12.2
hereof. Such ordinance shall not be effective unless and until
there shall have been filed with the City the written consents of
the percentages of owners of outstanding Bonds specified in
Section 12.7 hereof and a notice shall have been published as
hereinafter in this Section provided. Each such consent shall be
effective only if accompanied by proof of ownership of the Bonds
for which such consent is given, which proof shall be such as is
permitted by Section 12.3 hereof. A certificate or certificates
of the City Clerk that he has examined such proof and that such
proof is sufficient shall be conclusive that the consents have
been given by the owners of the Bonds described in such
certificate or certificates. Any such consent shall be binding
upon the owner of the Bonds giving such consent and on every
subsequent owner of such Bonds (whether or not such subsequent
owner has notice thereof). A notice stating that the ordinance
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has been consented to by the owners of the required percentages
of bonds and will be effective as provided in this Section, may
be given to the bondowners by mailing such notice to the
bondowners, and shall be given by publishing the same at least
once in the manner provided in Section 12.2 hereof. A record,
consisting of the papers required by this Section to be filed
with the City shall be proof of the matters therein stated, and
the ordinance shall be deemed conclusively to be binding upon the
City and the owners of all Bonds at the expiration of 30 days
after the notice last provided for in this Section, except in the
event of a final decree of a court of competent jurisdiction
setting aside such consent or annulling the action taken thereby
in a legal action or equitable proceeding for such purpose
commenced within such period.
SECTION 12.10. Amendment of Ordinance In Any Respect by Approval
of All Bondowners.
Notwithstanding anything contained in the foregoing pro-
visions of this Article, the rights and obligations of the City
and of the owners of the Bonds and the terms and provisions of
the Bonds and of the Ordinance may be amended in any respect with
the consent of the City, by the affirmative vote of the owners of
all said Bonds then outstanding at a meeting of bondowners called
and held as hereinabove provided, or upon the adoption of an
ordinance by the City and the consent of the owners of all the
Bonds then outstanding, such consent to be given as provided in
Section 12.9 except that no notice to bondowners either by
mailing or publication shall be required, and the amendment shall
be effective immediately upon such unanimous vote or written
consent of all of the bondowners.
SECTION 12.11. Bonds Owned by City.
Bonds owned or held by or for the account of the City shall
not be deemed outstanding for the purpose of any vote or consent
or other action or any calculation of outstanding Bonds in this
Ordinance provided for, and shall not be entitled to vote or
consent or take any other action in this Ordinance provided for.
SECTION 12.12. Endorsement of Amendment on Bonds.
Bonds delivered after the effective date of any action
amending this Ordinance taken as hereinabove provided may bear a
notation by endorsement or otherwise as to such action, and in
that case, upon demand of the owner of any Bond outstanding at
such effective date and presentation of his Bond for the purpose
at the principal office of the Paying Agents, suitable notation
shall be made on such Bond by the Paying Agent as to any such
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action. If the City shall so determine, new Bonds so modified as
in the opinion of the City and its counsel to conform to such
action shall be prepared, delivered and upon demand of the owner
of any Bond then outstanding shall be exchanged without cost to
such bondowner for Bonds then outstanding hereunder, upon
surrender of such Bonds.
ARTICLE XIII
FORM OF BONDS
SECTION 13.1. Form of Bonds.
The bonds of each series of Additional Bonds shall, unless
or except as is otherwise provided in the Supplemental Ordinance
or Ordinances authorizing their issuance, be in substantially the
form provided in Section 13.2 of this Ordinance, with such
modifications, additions or deletions as may be necessary or
advisable to reflect the details and provisions of the issuance
of such Bonds and the provisions of this Ordinance authorizing
the same or as otherwise required or permitted by the provisions
of such ordinance.
SECTION 13.2. Form of 1992 Bonds.
The 1992 Bonds shall be in substantially the following form:
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UNITED STATES OF AMERICA
STATE OF WASHINGTON
CITY OF PORT ANGELES, WASHINGTON
ELECTRIC REVENUE BOND
SERIES 1992
No. $
The City of Port Angeles, Washington, a municipal
corporation of the State of Washington (hereinafter called the
"City "), for value received, hereby promises to pay to
, or registered assigns, on the first day of
, the sum of Dollars
($ ) and to pay interest on such principal sum from the
date hereof or the most recent date to which interest has been
paid or duly provided for, at the rate of % per annum,
payable semi - annually on the first day of and the first
day of in each year (commencing 1, 1992) until the
payment in full of such principal sum.
Principal of and interest and premium, if any, on this bond
are payable solely out of the special fund of the City known as
the "Electric System Revenue Bond Fund" (the "Bond Fund ") created
and established by Ordinance No. , passed by the Council
of the City on , 1992. Both principal of and
interest on this bond are payable in lawful money of the United
States of America. Interest shall be paid by mailing a check or
draft to the registered owner or assigns at the address shown on
the Bond Register as of the 15th day of the month prior to the
interest payment date. Principal shall be paid to the registered
owner or assigns upon presentation and surrender of this bond at
the principal office of the fiscal agency of the State of
Washington in either Seattle, Washington, or New York, New York
(hereinafter referred to collectively as the "Bond Registrar ").
Reference is hereby made to additional provisions of this
bond set forth below and such additional provisions shall for all
purposes have the same effect as if set forth on this space.
This bond shall not be valid or become obligatory for any
purpose or be entitled to any security or benefit under the Bond
Ordinance (as hereinafter defined) until the Certificate of
Authentication hereon shall have been manually signed by the Bond
Registrar.
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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 executed in its name with the manual
or facsimile signature of its Mayor and attested by the manual or
facsimile signature of the City Clerk, and the manual or
facsimile seal of said City to be imprinted hereon, all as of the
1st day of , 1992.
(SEAL)
Attest:
City Clerk
CITY OF PORT ANGELES,
WASHINGTON
Mayor
CERTIFICATE OF AUTHENTICATION
Date of Authentication:
This bond is one of the bonds described in the within - mentioned
Bond Ordinance and is one of the Electric System Revenue Bonds,
Series 1992 of the City of Port Angeles, Washington, dated
, 1992.
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WASHINGTON STATE FISCAL AGENCY
Bond Registrar
By
Authorized Officer
D0T529 92/08/27
ADDITIONAL BOND PROVISIONS
This bond is one of a duly authorized series of bonds aggre-
gating $ in principal amount and designated as "Electric
System Revenue Bonds, Series 1992." This bond and the bonds of
the series of which it is a part (the "Bonds ") are issued under
and pursuant to Ordinance No. (the "Bond Ordinance "), and
under the authority of and in full compliance with the
Constitution and laws of the State of Washington. The Bonds are
issued for the purpose of paying a portion of the costs of
improvements to the Electric System. The Bond Ordinance permits
the issuance of Additional Bonds payable from the Bond Fund
ranking on a parity with the Bonds and secured by an equal charge
and lien on the Revenues of the Electric System (as such terms
are defined in the Bond Ordinance).
Copies of the Bond Ordinance are on file at the principal
office of the City and at the principal office of each paying
agent for this Bond, and reference thereto, and to any and all
modifications and amendments thereof, is hereby made for a more
complete description of the Revenues available for the payment of
the principal of, premium, if any, and interest on the Bonds and
the rights and remedies of the owners of the Bonds with respect
thereto, the terms and conditions upon which the Bonds have been
issued, and the terms and conditions upon which this Bond shall
no longer be secured by the Bond Ordinance or deemed to be
outstanding hereunder if moneys or certain specified securities
sufficient for the payment of this Bond shall have been set aside
in a special account and held in trust solely for the payment
thereof.
Under the Bond Ordinance, the City is obligated to set aside
and pay into the Bond Fund out of the Revenues of said Electric
System, certain fixed amounts sufficient to pay the principal of
and interest and premium, if any, on all Bonds and any bonds at
any time outstanding issued on a parity therewith payable from
such Fund as the same become due and payable, all as is more
fully provided in the Bond Ordinance. The Bonds and any bonds
issued on a parity therewith payable from the Bond Fund and the
interest thereon constitute the only charge against the Bond Fund
and the amount of the Revenues pledged to said Bond Fund.
In and by the Bond Ordinance, the City covenants to
establish, maintain and collect rates or charges for electric
energy and other services, facilities and commodities sold,
furnished or supplied by the Electric System of the City that
shall be fair and nondiscriminatory and adequate to provide
Revenues sufficient for the fixed amounts that the City is
obligated to set aside in the Bond Fund to pay the principal of
and interest and premium, if any, on this Bond and the series of
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Bonds of which this Bond is a part, and any other bonds payable
from said Fund on a parity with the Bonds and for the proper
operation and maintenance of the Electric System, and all neces-
sary repairs thereto and replacements and renewals thereof.
The Bonds maturing on 1, 20 are subject to
redemption prior to maturity, at the option of the City, on or
after 1, 20 , in whole or in part on any date, upon
written notice as provided hereinafter, at a price of par
together with the interest accrued thereon to the date fixed for
redemption.
The Bonds maturing on 1, 20_ are subject to
redemption prior to maturity, at the option of the City, on or
after 1, 20 , in whole or in part on any date, upon
written notice as provided hereinafter, at the redemption prices
set forth below (expressed as a percentage of the principal
amount) plus accrued interest to the date of redemption:
Redemption Period (Inclusive) Redemption Price
If less than all of the Bonds subject to optional redemption
are to be called for redemption, the City shall choose the
maturities to be redeemed. In the event that less than all of
the Bonds of any maturity are called for redemption, the
particular Bonds of such maturity to be redeemed shall be
selected by lot by the Bond Registrar.
The Bonds maturing on 1, 20_ (hereinafter referred
to as the "Term Bonds ") , shall be redeemed prior to maturity by
lot (or purchased or paid at maturity), not later than 1
in the years 20 through 20_, inclusive, from amounts credited
to the Bond Retirement Account in the Bond Fund as sinking fund
installments therefor (to the extent such amounts have not been
used to redeem or purchase such Bonds as provided below) and in
the principal amounts as set forth below, upon written notice as
provided hereinafter by payment of the principal amount thereof,
together with the interest accrued thereon to the date fixed for
redemption.
Year Amount
The City may purchase and redeem the Term Bonds through the
application of part or all of the respective sinking fund
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installments therefor on the first day of any month prior to any
1. Any moneys not so used to purchase and redeem such
Term Bonds shall be applied to the redemption of such bonds on
such 1. If, as of any 1, the principal amount
of Term Bonds retired by purchase or redemption exceeds the
cumulative requirement for sinking fund installments through such
date, such excess may be credited against the sinking fund
installment for the next fiscal year.
Written notice of redemption shall be given by first class
mail, postage prepaid, not less than 30 days nor more than 60
days before the redemption date to the registered owners of the
Bonds to be redeemed in whole or in part at their last addresses,
if any, appearing on the Bond Register, but failure to mail or to
receive any such notice shall not affect the validity of the
proceedings for redemption of Bonds. Notice of redemption having
been given by mailing, as aforesaid, the Bonds so called for
redemption shall on the date specified in such notice become due
and payable at the applicable redemption price herein provided,
and from and after the date so fixed for redemption (unless the
City shall default in the payment of the Bonds so called for
redemption) interest on said Bonds so called for redemption shall
cease to accrue.
Portions of the principal sum of this Bond in installments
of $5,000 or any integral multiple thereof may be redeemed, and
if less than all of the principal sum hereof is to be redeemed,
in such case upon the surrender of this Bond at the principal
office of one of the Paying Agents, there shall be issued to the
registered owner, without charge therefor, for the then
unredeemed balance of the principal sum hereof, fully registered
Bonds of like series, maturity and interest rate in any of the
denominations authorized by the Bond Ordinance.
This Bond shall be transferable by the registered owner at
the principal offices of the Bond Registrar upon surrender and
cancellation of this Bond, and thereupon a new registered Bond of
the same principal amount and interest rate and maturity will be
issued to the transferee as provided in the Bond Ordinance. The
City, the paying agents and any other person may treat the person
in whose name this Bond is registered as the absolute owner
hereof for the purpose of receiving payment hereof and for all
purposes and shall not be affected by any notice to the contrary,
whether this Bond be overdue or not.
The City has designated the Bonds as qualified tax - exempt
obligations for investment by certain financial institutions.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto..
PLEASE INSERT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER
OF TRANSFEREE
(Please print or typewrite name and address, including zip
code, of Transferee)
the within bond and does hereby irrevocably constitute and
appoint of , or its
successor, as Bond Registrar to transfer said bond on the books
kept for registration thereof with full power of substitution in
the premises.
DATED:
SIGNATURE GUARANTEED:
NOTE: The signature on this Assign-
ment must correspond with the name
of the registered owner as it
appears upon the face of the within
bond in every particular, without
alteration or enlargement or any
change whatever.
ARTICLE XIV
MISCELLANEOUS, DEFEASANCE; SALE OF BONDS AND
APPROVAL OF OFFICIAL STATEMENT
SECTION 14.1. Ordinance and Laws a Contract With Bondowners.
This Ordinance is adopted under the authority of and in full
compliance with the Constitution and laws of the State of Wash-
ington, as amended and supplemented. In consideration of the
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purchase and acceptance of the Bonds by those who shall hold the
same from time to time, the provisions of this Ordinance and of
any Supplemental Ordinance authorizing the issuance of Additional
Bonds and of said laws shall constitute a contract with the owner
or owners of each Bond and the obligations of the City and its
Council under said acts and under this Ordinance shall be
enforceable by any court of competent jurisdiction; and the
covenants and agreements herein set forth to be performed on
behalf of the City shall be for the equal benefit, protection and
security of the owners of any and all of said Bonds all of which,
regardless of the time or times of their issue or maturity, shall
be of equal rank without preference, priority or distinction of
any of said Bonds over any others thereof except as expressly
provided herein.
SECTION 14.2. Bonds Deemed No Longer to be Outstanding
Hereunder.
In the event that the City, in order to effect the payment,
retirement or redemption of any Bond, sets aside in the Bond Fund
or in another special account, held in trust by the City or by a
qualified trustee, advance refunding bond proceeds or other money
lawfully available or direct obligations of or obligations the
principal of and the interest on which are unconditionally
guaranteed by the United States Government ( "Government
Obligations "), or any combination of such proceeds, money and /or
Government Obligations, in amounts which, together with known
earned income from the investment thereof are sufficient to
redeem, retire or pay such Bond in accordance with its terms and
to pay when due the interest and redemption premium, if any,
thereon, and such proceeds, money and /or Government Obligations
are irrevocably set aside and pledged for such purpose, then no
further payments need be made into the Bond Fund for the payment
of the principal of and interest on such. Bond, and the owner of
such Bond shall cease to be entitled to any lien, benefit or
security of this Ordinance, or any other ordinance of the City,
except the right to receive payment of principal, premium, if
any, and interest from such special account, and such Bonds shall
be deemed not to be outstanding hereunder. The City shall obtain
an opinion of nationally recognized bond counsel to the effect
set forth in the preceding sentence and that the tax- exempt
status of such Bonds is not adversely affected, and a
verification from a certified public accountant that the money
when due or Government Obligations so set aside will be
sufficient to pay the principal,, premium, if any, and interest on
the Bonds to be refunded.
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SECTION 14.3. Moneys Held by Paying Agents One Year After Due
Date.
Moneys or Permitted Investments held by the Paying Agents in
trust for the payment and discharge of any of the Bonds which
remain unclaimed for one year after the date when such Bonds
shall have become due and payable, either at their stated
maturity dates or by call for earlier redemption, if such moneys
were held by such Payment Agents at such date or for one year
after the date of deposit of such moneys if deposited with the
Paying Agents after the date when such Bonds become due and
payable, shall at the written request of the City be repaid by
the Paying Agents to the City as the City's property and free
from the trust created by this Ordinance, or any other ordinance
of the City, and the Paying Agents shall thereupon be released
and discharged with respect thereto, and the owners of the Bonds
payable from such moneys shall look only to the City for the
payment of such Bonds.
SECTION 14.4. Sale of 1992 Bonds.
Piper Jaffray, Inc. has presented a bond purchase contract
dated September 1, 1992 (the "Purchase Contract ") to the City by
which it has offered to purchase the 1992 Bonds under the terms
and conditions provided in the Purchase Contract, which written
Purchase Contract is on file with the Clerk of the Council and is
incorporated herein by this reference. The Council finds that
entering into the Purchase Contract is in the City's best
interest and, therefore, accepts the offer contained in the
Purchase Contract and authorizes its execution by City officials.
The proper City officials are authorized and directed to do
everything necessary for the prompt authentication and delivery
of the 1992 Bonds to the purchaser and for the proper application
and use of the proceeds of the sale thereof.
SECTION 14.5. Approval of Official Statement.
The City Light Director of the Electric System (the "City
Light Director ") and the Finance Director are authorized and
directed to execute and deliver to the purchaser copies of an
Official Statement in the form presented at this meeting, and
with such changes thereto as have been noted thereon; provided,
however, that the City Light Director is authorized to supplement
or amend the Official Statement as the City Light Director, with
the approval of bond counsel to the City, deems necessary or
appropriate. The City represents and warrants to the purchaser
that such Official Statement is deemed final by the City as of
the date thereof, and that the Preliminary Official Statement
dated August 25, 1992, was deemed final by the City as of the
date thereof for purposes of Rule 15c2 -12 of the Securities and
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Exchange Council, except for the omission of the offering prices,
interest rates, maturities, principal amounts, redemption
provisions, ratings and related information.
The Council approves and authorizes the distribution and use
of such Official Statement (including any such supplements and
amendments thereto) in connection with the public offering and
sale of the 1992 Bonds by the purchaser. The Council hereby
ratifies, approves and confirms the distribution and use of the
Preliminary Official Statement in connection with the public
offering and sale of the 1992 Bonds.
SECTION 14.6. Benefits of Ordinance Limited to City,
Bondowners, and Paying Agents.
Nothing in this Ordinance, expressed or implied, is intended
or shall be construed to confer upon or give to any person or
corporation other than the City, the Paying Agents, and the
owners from time to time of the Bonds any rights, remedies or
claims under or by reason of this Ordinance or any covenant,
condition or stipulation thereof; and all the covenants, stipula-
tions, promises and agreements in this Ordinance contained by or
on behalf of the City shall be for the sole and exclusive benefit
of the City, the Paying Agents and the owners from time to time
of the Bonds.
SECTION 14.7. Term "City" Includes Successors.
Whenever in this Ordinance the City is named or referred to,
it shall be deemed to include its successors and assigns,
including any successor by merger or consolidation, and all the
covenants and agreements in this Ordinance contained by or on
behalf of the City shall bind and inure to the benefit of its
successors and assigns whether so expressed or not.
SECTION 14.8. Severability.
If any one or more of the covenants or agreements provided
in this Ordinance on the part of the City to be performed shall
be declared by any court of competent jurisdiction to be contrary
to law, then such covenant or covenants, agreement or agreements
shall be null and void and shall be deemed separable from the
remaining covenants and agreements, and shall in no way affect
the validity of the other provisions of this Ordinance or of the
Bonds issued hereunder.
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SECTION 14.9. General Authorization.
The Mayor, City Light Director, Finance Director and City
Clerk and each of the other appropriate officers of the City are
each hereby authorized and directed to take such steps, to do
such other acts and things, and to execute such letters,
certificates, agreements, papers, financing statements,
assignments or instruments as in their judgment may be necessary,
appropriate or desirable in order to carry out the terms and
provisions of, and complete the transactions contemplated by,
this Ordinance.
SECTION 14.10. Adjustment of Dollar Amounts.
The dollar amounts stated in Sections 9.6.B and 9.7 hereof
may, at the option of the City, be adjusted according to the
Federal Consumer Price Index applicable to the City, or, if such
consumer price index is no longer published, such other similar
governmentally published index of prices computed from January 1,
1986.
SECTION 14.11. Special Designation.
The City hereby designates the 1992 Bonds as qualified tax -
exempt obligations for banks, thrift institutions and other
financial institutions.
SECTION 14.12. Prior Acts.
All acts taken pursuant to the authority of this Ordinance
but prior to its effective date are hereby ratified and
confirmed.
SECTION 14.13. Effective Date of Ordinance.
This Ordinance shall be in effect from and after its
adoption in accordance with law.
SECTION 14.14. Repealer.
All, ordinances and parts of ordinances in conflict herewith
are hereby repealed to the extent of such conflict.
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PASSED BY THE CITY COUNCIL OF THE CITY OF PORT ANGELES,
WASHINGTON, AT A REGULAR MEETING THEREOF f #• THIS 1st DAY OF
SEPTEMBER, 1992.
Attest:
Ln4J
City Cie
Published: September 6, 1992
(By Summary)
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D0T529 92/08/27
CERTIFICATE
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 Ordina-
nce No. 2709 (the "Ordinance ") of the City, duly passed at a
regular meeting of the City Council (the "Council ") of the City
held on the 1st day of September, 1992.
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 1st
day of September, 1992.
City Cle]
Summaries of Ordinances Adopted by the
Port Angeles City Council
on September 1, 1992
Ordinance No. 2708
This Ordinance of the City of Port Angeles establishes a ninety -day SEPA (State Environmental
Policy Act) threshold determination deadline and amends Ordinance 1886, as most recently
amended by Ordinance 2594, and Chapter 15.04 of the Port Angeles Municipal Code.
Ordinance No. 2709
This Ordinance of the City of Port Angeles establishes a plan and system for capital
improvements; authorizes the issuance of electric revenue bonds in the principal amount of
$2,890,000 to provide funds to pay a portion of the City's Electric Utility Capital Improvement
Program; provides for the establishment of certain funds and accounts; makes other covenants
and agreements in connection with the foregoing; and authorizes the sale of such bonds.
Ordinance No. 2710
This Ordinance of the City of Port Angeles establishes an annual budget which shall be in effect
for the period of January 1, 1993, through December 31, 1993, and for succeeding annual
budgets as designated in Chapter 3.04.010 of the Port Angeles Municipal Code; adopts Chapter
35A.33 RCW by reference; amends Ordinance 2400 and Chapter 3.04 of the Port Angeles
Municipal Code; and repeals Ordinance 2450.
The full texts of the Ordinances are available at City Hall in the City Clerk's office or will be mailed
upon request. Office hours are Monday through Friday from 8:00 a.m. to 5:00 p.m.
These Ordinances shall take effect five days after the date of publication of these summaries.
Publish: September 6. 1992
Becky J. Upton
City Clerk