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HomeMy WebLinkAbout2737CITY OF PORT ANGELES, WASHINGTON SOLID WASTE UTILITY REVENUE BONDS, 1993 $3,410,000 ORDINANCE NO. 2737 AN ORDINANCE of the City of Port Angeles, Washington, adopting and specifying a plan for making additions and betterments to the solid waste utility system of the City; authorizing the issuance and sale of solid waste utility revenue bonds in the principal amount not to exceed $3,410,000 for the purpose of providing part of the funds required for acquiring, constructing and installing certain additions and improvements to the solid waste utility system of the City; providing for the payment and sale of said bonds; and providing the covenants, terms and conditions under which such bonds and future parity bonds shall be issued. PASSED: January 19, 1993 Prepared by: PRESTON THORGRIMSON SHIDLER GATES & ELLIS 5000 Columbia Center 701 Fifth Avenue Seattle, Washington 98104 -7078 Recitals Section 1. Section 2. Section 3. Section 4. Section 5. Section 6. TABLE OF CONTENTS* Section 7. Section 8. Section 9. Section 10. Section 11. Section 12. Section 13. Section 14. Section 15. Section 16. Section 17. Section Section Definitions Page 1 2 Findings and Purposes 11 Plan of Additions to the System 13 Authorization of the Bonds 15 Bond Registration 17 Redemption Prior to Maturity; Purchase of Bonds Priority of Payments from Revenue Fund Payments into Revenue Bond Fund Provision for Defeasance of the Bonds Bond Covenants Issuance of Future Parity Bonds Payment of Arbitrage Rebate Construction Fund Application of Bond Proceeds Bond Form Execution and Authentication of the Bonds Lost or Destroyed Bonds 18 18 20 26 27 33 37 39 40 40 47 48 18. Designation of Bonds as Qualified Tax - Exempt Obligations 48 19. Sale of Bonds 49 * This Table of Contents is provided for the convenience of the reader and is not a part of this ordinance. 1 - D0T579 93/01/12 Section 20. Official Statement; Use of Documents 48 Section 21. Temporary Bond 49 Section 22. Amendments 49 Section 23. Severability 52 Section 24. General Authorization 52 Section 25. Prior Acts 53 Section 26. Effective Date 53 Exhibit A - Purchase Contract D0T579 93/01/15 ORDINANCE NO. 2737 AN ORDINANCE of the City of Port Angeles, Washington, adopting and specifying a plan for making additions and betterments to the solid waste utility system of the City; authorizing the issuance and sale of solid waste utility revenue bonds in the principal amount not to exceed $3,410,000 for the purpose of providing part of the funds required for acquiring, constructing and installing certain additions and improvements to the solid waste utility system of the City; providing for the payment and sale of said bonds; and providing the covenants, terms and conditions under which such bonds and future parity bonds shall be issued. WHEREAS, the City of Port Angeles, Washington (the "City "), has heretofore by Ordinance No. 1327 passed on May 20, 1954, created a system for the collection, disposal and processing of solid waste and for its processing in accordance with Ch. 35.92 RCW (the "System "); WHEREAS, the System includes the City landfill, which must be expanded; and WHEREAS, the City Council of the City (the "Council ") deems it necessary and advisable that the City issue and sell its solid waste utility revenue bonds in the aggregate principal sum of $3,410,000 to provide part of the funds necessary to pay the cost of the additions and improvements to the System described herein (the "Bonds "); and WHEREAS, the City has received a written offer from Piper Jaffray Inc. to purchase the Bonds under the terms and conditions set forth herein and therein; NOW, THEREFORE, the City Council of the City of Port Angeles do ordain as follows: Section 1. Definitions. As used in this ordinance, the following words shall have the following meanings: "Annual Debt Service" means, for any year, the amount required in such year for the payment of the principal of and interest on the Parity Bonds; provided that, in the event the City issues Term Bonds, the words "principal of and interest on the Parity Bonds" shall be deemed to exclude from "principal" an amount of Term Bonds equal to the mandatory deposits of money into any Sinking Fund Account to provide for payment of the principal of such Term Bonds, and from "interest" the interest on such Term Bonds subsequent to the date of the respective deposits, and to include in lieu thereof all mandatory sinking fund deposits as of the date required and interest on the Term Bonds provided for by such deposits only to the dates of the respective deposits. "Average Annual Debt Service" means, with respect to any issue of Parity Bonds, the average amount of Annual Debt Service which will become due in any calendar year on such Parity Bonds for the period from the calendar year immediately following the date of such calculation until the final maturity date of such Parity Bonds then outstanding. -2- D0T579 93/01/12 "Bond Counsel" means the law firm of Preston Thorgrimson Shidler Gates & Ellis, or other nationally- recognized bond counsel to the City. "Bond Register" means the books or records maintained by the Bond Registrar containing the name and mailing address of the owner of each Bond or nominee of such owner and the principal amount and number of Bonds held by each owner or nominee. "Bond Registrar" means the fiscal agencies of the State of Washington, currently Seattle -First National Bank, Seattle, Washington and Bank of New York, New York, New York, or any fiscal agent of the State of Washington that may hereafter be designated as successor to such banks. "Bond Year" means each successive one year period (or shorter period from the date of issue) that ends at the close of business on December 31. "Bonds" means the City of Port Angeles Solid Waste Utility Revenue Bonds, 1993, authorized by this Ordinance to be issued in the aggregate principal amount of $3,410,000 for the purpose of financing part of the cost of the Project. "City" means the City of Port Angeles, Washington, a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington. "Closing" means the delivery of the Bonds to, and payment of the purchase price therefore by, the initial purchasers of the Bonds. -3- D0T579 93/01/12 "Code" means the federal Internal Revenue Code of 1986, as amended, together with applicable regulations. "Construction Fund" means the "1993 Solid Waste Utility System Construction Fund" created by Section 13 of this Ordinance. "Costs of Maintenance and Operation" means all necessary operating expenses, current maintenance expenses, expenses of reasonable upkeep and repairs, and insurance and administrative expense, but excludes depreciation, payments for debt service or into reserve accounts, costs of capital additions to or replacements of the System, municipal taxes, or payments to the City in lieu of taxes. "Council" means the general legislative body of the City as the same shall be duly and regularly constituted from time to time. "Debt Service Account" means the account oi that name created in the Revenue Bond Fund by Section 8 of Ordinance No. 2603 of the City. "Final Computation Date" means the date that the last Bond is discharged. A Bond is discharged on the date that all amounts. due under the terms of the Bond are actually and unconditionally due if cash is available at the place of payment and no interest accrues with respect to the Bond after such date. "Finance Director" means the duly qualified and acting Finance Director of the City or the successor to such office. -4- D0T579 93/01/12 "Future Parity Bonds" means the Parity Bonds issued by the City after it issues the Bonds. "Government Obligations" means direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the Unites States Government. "Installment Computation Date" means the last day of the fifth Bond Year and of each succeeding Bond Year. "Net Revenue" means the Revenue of the System less the Costs of Maintenance and Operation. "Nonpurpose Receipts" means, in general, any receipt with respect to an investment allocated to the Bonds. The following types of receipts are specifically included: (a) Actual Receipts. Any amount actually or constructively received with respect to an investment. Actual receipts may not be reduced by selling commissions, administrative expenses or similar expenses. (b) Disposition Receipts. An amount determined by treating an investment that ceases to be allocated to the Bonds (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 Bonds. (c) Installment Date Receipts. The fair market value (or, for fixed rate investments, present value) of all investments allocated to the Bonds at the close of business on any Computation Date. -5- D0T579 93/01/12 (d) Imputed Receipts. Any receipts that are required to be imputed and taken into account pursuant to Section 1.148 -5T of the Temporary Income Tax Regulations or any successor Temporary Income Tax Regulations. "Nonpurpose Payments" means, in general, any payment with respect to an investment allocated to the Bonds. The 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 to not include brokerage commission, administrative expenses or similar expenses. (b) Constructive Payments. The fair market value (as of the date of allocation of the Bonds) of any investment that was not directly purchased with gross proceeds of the Bonds, but which is allocated to the 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. "Parity Bonds" means the Bonds and any solid waste utility revenue bonds which the City may hereafter issue having a lien upon the Revenue of the System for the payment of the principal thereof and interest thereon equal to the lien upon the Revenue of the System of the Bonds. "Permitted Investments" means the following to the extent the same are legal for investments of funds of the City: (a) any -6- D0T579 93/01/12 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 Farmers Home Administration, or any agency or instrumentality of the Federal Government which shall be established for the purposes of acquiring the obligations of any of the foregoing or otherwise providing financing therefor; (c) new housing authority bonds issued by the public agencies or municipalities and fully secured as to the payment of both prin- cipal and interest by a pledge of annual contributions under an annual contributions contract or contracts with the United States, or project notes issued by public agencies or municipali- ties 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 obli- gations are rated in one of the two highest rating categories by either Moody's Investors Service or Standard & Poor's Corporation or their comparably recognized business successors or both Moody's Investor Service and Standard & Poor's Corporation or -7- D0T579 93/01/12 their comparably recognized business successors if such obliga- tions are rated by both; (e) certificates of deposit, whether negotiable or nonnegotiable, issued by any bank, savings and loan association, or trust company, provided that such certificates of deposit shall be (i) continuously and fully insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance qualified public Chapter 39.58, secured by such Corporation, or (ii) issued by a recognized depositary of the State of Washington under RCW as amended, or (iii) continuously and fully 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 agree- ment with any bank or trust company organized under the laws of any State of the United States or any national banking associa- tion, which is secured by such securities as described in clauses (a) or (b) above in the possession or custody of the District, its agent or Trustee and in which the District, its agent or Trustee has a first perfected security interest free and clear of all rights of third parties, which matures within 270 days and which has a market value determined monthly equal to 100% of the face amount of the repurchase agreement; (g) pre - refunded municipal obligations meeting the following conditions: (i) the obligations are not callable prior to maturity or the trustee has been given irrevocable instructions concerning -8- D0T579 93/01/26 calling and redemption; (ii) the obligations are secured by cash or Government Obligations which may be applied only to interest, principal, and premium payments of such obligations; (iii) the principal and interest of the Government Obligations (plus any cash in the fund) are sufficient to meet the liabilities of the obligations, which sufficiency has been verified by an independent public accountant; (iv) the Government Obligations serving as security for the obligations are held by an escrow agent or a trustee; and (v) the Government Obligations are not available to satisfy any other claims, including those against the trustee or escrow agent; and (h) any other investments permitted cities under the laws of the State of Washington. "Project" means those additions and improvements to the System authorized by Section 3 of this Ordinance. "Purchase Contract" means the agreement between the City and Piper Jaffray Inc., Seattle, Washington, for the purchase of the Bonds, attached hereto as Exhibit A. "Purchaser" means Piper Jaffray Inc., Seattle, Washington. "Qualified Insurance" means any noncancellable municipal bond insurance policy or surety bond issued to an independent party as agent of the owners of the Bonds or any Future Parity Bonds by a company licensed to issue an insurance policy guaranteeing the payment of debt service on Parity Bonds; provided that the claims paying ability of the issuer thereof shall be rated as of the time of issuance of such policy or -9- D0T579 93/01/26 surety bond, in one of the two highest rating categories by Standard & Poor's Corporation or Moody's Investors Service, Inc. or their comparably recognized business successors. "Qualified Letter of Credit" means any irrevocable letter of credit issued by a bank to an independent party as agent of the owners of the Bonds or any Future Parity Bonds; provided the issuer thereof shall, as of the time of issuance of such letter of credit, be rated in one of the two highest rating categories by either Moody's Investors Service, Inc. or Standard & Poor's Corporation or their comparably recognized business successors. "Rebatable Arbitrage" means the amount payable to the United States by the City pursuant to Section 12 of this Ordinance. "Reserve Account" means the Bond Reserve Account created in the Revenue Bond Fund by Ordinance No. 2603 of the City. "Revenue Bond Fund" or "Bond Fund" means the 1993 City of Port Angeles Solid Waste Utility Revenue Bond Fund created in the office of the Treasurer of the City by Ordinance No. 2603 of the City. "Revenue Fund" means the Solid Waste Utility Fund of the City heretofore created by Section 5 of Ordinance No. 2313. "Revenue of the System" mean all earnings, revenue and moneys received by the City from or on account of the operation of the System, including the income from investments of money in the Revenue Fund and the Revenue Bond Fund or from any other investment thereof except the income from investments irrevocably -10- D0T579 93/01/12 pledged to the payment of any solid waste utility revenue bonds pursuant to a plan of retirement or refunding. The words "Revenue of the System" shall also include any federal or state reimbursements of operating expenses to the extent such expenses are included as Costs of Maintenance and Operation of the System. "Sinking Fund Account" mean any account created in the Revenue Bond Fund to amortize the principal of Term Bonds. "System" means the solid waste collection, disposal and processing system of the City, including all equipment utilized by such system and including any addition to or expansion thereof hereafter made. The Council may expand the System by ordinance to include any other public utility system that the City may by law combine with the System. "Term Bonds" mean any Parity Bonds identified as such in the ordinance authorizing the issuance thereof, the payment of which is provided for by a requirement for mandatory deposits of money into a Sinking Fund Account in the Revenue Bond Fund. Section 2. Findings and Purposes. A. Best Interests of the City and Users of the System. The Council hereby finds that the public interest, welfare and convenience require the construction, acquisition and installation of the System improvements described in Section 3 of this ordinance, and that said improvements are legally required and /or economically sound, and will contribute to the conduct of the business of the System in an efficient manner. -11- D0T579 93/01/12 B. Parity Conditions. The Council hereby finds and determines, as required by Section 11 of Ordinance No. 2603 of the City, as follows: First, that the Bonds will be issued to provide funds to acquire, construct, and install equipment, facilities, additions, and betterments to the System. Second, that at the time of adoption of this ordinance and at the time of the issuance of the Bonds there is not nor will there be any deficiency in the Revenue Fund or the Reserve Account. Third, that the principal of and interest on the Bonds will be payable out of the Revenue Bond Fund and the requirements for Reserve Account payments in Section 8 of Ordinance No. 2603 will be met. Fourth, that prior to the delivery of the Bonds the City will have on file in the office of the City Clerk a certificate of an independent professional engineer or certified public accountant dated not earlier than 90 days prior to the date of delivery of the Bonds and showing that the Adjusted Net Revenue (as defined in Ordinance No. 2603) for each calendar or fiscal year after the issuance of such Parity Bonds, will equal at least 1.30 times the Annual Debt Service in such year. All of the parity conditions of Ordinance No. 2603 thus having been met and fully complied with, the Council hereby finds -12- D0T579 93/01/12 that the Bonds may be issued on a parity of lien with the 1990 Bonds. Section 3. Plan of Additions to the System. The following plan for the acquisition, construction and installation of additions and betterments to the System (the "Project ") is hereby specified and adopted, to wit: Initial gravel excavation; Pit construction; Erosion repair; Extensions and improvements to the methane and leachate systems; Acquiring additional acreage; Clearing existing and additional acreage; Acquiring new equipment for operation of the expanded landfill; and Closure of landfill cells. The City shall provide all equipment, connections and appur- tenances together with all work as may be incidental and necessary to complete the Project, which is further described in the Port Angeles Landfill Expansion Preliminary Engineering Report by Parametrix, Consulting Engineers, dated June 18, 1992. Said report is on file in the offices of the City. The Project facilities shall be integrated into the System as required to provide a fully operational facility. -13- D0T579 93/01/26 The City may make such changes in or additions to the Project or in the construction or design of other facilities of the System as may be found necessary or desirable. Implementation or completion of any specified improvement shall not be required if the Council determines that, due to substantially changed circumstances, it has become inadvisable or impractical. If the Project has either been completed, or its completion duly provided for, or its completion found to be impractical, the City may apply the Bond proceeds or any portion thereof to other improvements to the System, as the Council in its discretion shall determine. In the event that the proceeds of sale of the Bonds, plus any other moneys of the City legally available, are insufficient to accomplish all of the Project provided by this section, the City shall use the available funds for paying the cost of those improvements for which the Bonds were approved deemed by the Council most necessary and to the best interest of the City. The City shall acquire by purchase, lease or condemnation, all property, both real and personal, or any interest therein, or rights -of -way and easements which may be found necessary to acquire, construct and install the Project. The estimated cost of this plan of additions and betterments and all costs incidental thereto, is hereby declared to be as nearly as practicable the sum of $3,410,000, all of which amount is to be provided out of the proceeds of the sale of the Bonds. -14- D0T579 93/01/13 Section 4. Authorization of the Bonds. There are hereby authorized to be issued $3,410,000 principal amount of solid waste utility revenue bonds of the City to be designated "City of Port Angeles, Solid Waste Utility Revenue Bonds, 1993" (the "Bonds ") to provide funds for the purposes set forth in this ordinance and for paying the costs of issuing the Bonds. The Bonds shall be dated January 1, 1993, shall bear interest from their date payable July 1, 1993, and semiannually thereafter on the first days of each succeeding January and July at such rates, and shall mature on January 1 in the years and amounts as are set forth in the Purchase Contract. The Bonds shall be in the denomination of $5,000 each or any integral multiple thereof, provided that no Bond shall represent more than one maturity; shall be fully registered as to both principal and interest; and shall be numbered separately in the manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification. The fiscal agencies of the State of Washington in the cities of Seattle, Washington, and New York, New York, shall act as registrar for the Bonds (collectively, the "Bond Registrar "). The Bond Registrar shall maintain the Bond Register. Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America. Interest on the Bonds shall be paid by check or draft mailed on the date such interest is due to the registered owners or nominees of such owners at the -15- D0T579 93/01/12 addresses appearing on the Bond Register as of the 15th day of the month preceding the interest payment date. The principal of the Bonds shall be payable upon presentation and surrender of the Bonds by the registered owners or nominees of such owners at the principal offices of either of the fiscal agencies of the State of Washington in the cities of Seattle, Washington, or New York, New York, at the option of such owners. The Bonds may be transferred only on the Bond Register maintained by the Bond Registrar for that purpose upon the sur- render thereof by the registered owner or nominee or his /her duly authorized agent and only if endorsed in the manner provided thereon, and thereupon a new fully registered Bond of like principal amount, maturity and interest rate shall be issued to the transferee in exchange therefor. Such transfer shall be without cost to the registered owner or transferee. The City may deem the person in whose name each Bond is registered to be the absolute owner thereof for the purpose of receiving payment of the principal of and interest on such Bonds and for any and all other purposes whatsoever. Upon surrender thereof to the Bond Registrar, the Bonds are interchangeable for Bonds in any authorized denomination of an equal aggregate principal amount and of the same interest rates and maturities. The Bond Registrar shall not be required to issue, register, transfer or exchange any of the Bonds during a period beginning -16- D0T579 93/01/12 at the opening of business on the 15th day next preceding any interest payment date and ending at the close of business on the interest payment date, or, in the case of any proposed redemption of the Bonds, after the mailing of notice of the call of such Bonds for redemption. The Bonds shall be obligations only of the Revenue Bond Fund and shall be payable and secured as provided herein. The Bonds shall not be general. obligations of the City. Section 5. Bond Registration. The City hereby specifies and adopts the system of registration for the Bonds 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 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 Bonds transferred or exchanged in accordance with the provisions of such Bonds and this ordinance and to carry out all of the Bond Registrar's powers and duties under this ordinance. The Bond Registrar shall be responsible for its representa- tions contained in the Certificate of Authentication on the Bonds. The Bond Registrar may become the owner of 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 -17- D0T579 93/01/12 in any other capacity with respect to, any committee formed to protect the rights of the owners of the Bonds. Section 6. Redemption Prior to Maturity; Purchase of Bonds. A. Optional Redemption. The Bonds are not subject to redemption at the option of the City prior to their stated maturities. B. Purchase of Bonds In Open Market. The City further reserves the right to use at any time any surplus Revenue of the System available after providing for the payments required by paragraphs First through Sixth inclusive, of Section 7 of this Ordinance, or other available funds, to purchase any of the Bonds in the open market for retirement only, if the same may be purchased at a price not exceeding that at which they could be called for redemption on the first succeeding date on which they may be called, plus accrued interest Section 7. Priority of Payments from Revenue Fund. A special fund of the City known as the "Solid Waste Utility Fund" (the "Revenue Fund ") has heretofore been established in the office of the Treasurer of the City. The City has covenanted to deposit the Revenue of the System as collected, except the interest earned and income derived from investments of moneys in the Revenue Bond Fund and the accounts therein. The Revenue Fund shall be held separate and apart from all other funds and accounts of the City and the Revenue of the System deposited in -18- D0T579 93/01/12 such Fund shall be used only for the following purposes and in the following order of priority: First, to pay the Costs of Maintenance and Operation of the System; Second, to pay the interest on any Parity Bonds; Third, to pay the maturing principal (whether by serial maturity or sinking fund installments) of any Parity Bonds; Fourth, to make all payments required to be made pursuant to a reimbursement obligation in connection with a Qualified Letter of Credit, Qualified Insurance, or other equivalent credit facility, provided that if there is not sufficient money to make all payments under reimbursement agreements the payments will be made on a pro rata basis; Fifth, to make all payments required to be made into the Reserve Account created to secure the payment of the Parity Bonds; Sixth, to make all payments required to be made into any revenue bond redemption fund or revenue warrant redemption fund and debt service account or reserve account created to pay and secure the payment of the principal of and interest on any revenue bonds or revenue warrants of the City having a lien upon the Revenue of the System junior and inferior to the lien thereof for the payment of the principal of and interest on the Parity Bonds; -19- D0T579 93/01/12 Seventh, to retire by redemption or purchase in the open market any outstanding revenue bonds or revenue warrants of the City, to make necessary additions, betterments, improvements and repairs to or extensions and replacements of the System, or for any other lawful City purposes. Section 8. Payments into Revenue Bond Fund. A special fund of the City known as the "1990 City of Port Angeles Solid Waste Utility Revenue Bond Fund" (the "Revenue Bond Fund ") has heretofore been created in the office of the Treasurer of the City for the purpose of paying and securing the payment of the Parity Bonds. A. Payments into Debt Service Account. A special account known as the Debt Service Account has heretofore been created in the Revenue Bond Fund for the purpose of paying the principal of, premium, if any, and interest on the Parity Bonds, excluding the principal of Term Bonds. As long as any of the Bonds remain outstanding, the City hereby irrevocably obligates and binds itself to set aside and pay from the Revenue Fund into the Debt Service Account, on or before the date due, those amounts necessary, together with Revenue of the System collected and deposited and such other moneys as are on hand and available therefor in the Debt Service Account, to pay the interest or principal and interest next coming due on the outstanding Bonds. -20- D0T579 93/01/12 The City covenants and agrees that in the event it issues any future Parity Bonds that are Term Bonds, it will provide in each ordinance authorizing the issuance of the same for the creation of a Sinking Fund Account and for regular monthly payments to be made from the Revenue Fund into such Sinking Fund Account sufficient together with Revenue of the System collected and deposited and such other moneys as are on hand and available therefor in such account to amortize the principal of such future Parity Bonds which are Term Bonds on or before the maturity date thereof. B. Payments into Reserve Account. A special account known as the "Reserve Account" has heretofore been created in the Revenue Bond Fund for the purpose of securing the payment of the principal of and interest on all outstanding Parity Bonds. The City further covenants and agrees that on the date of issuance of the Bonds it will pay into the Reserve Account, from the proceeds of the Bonds, an amount equal to approximately 10% of the proceeds of the Bonds, as set forth in Section 14 hereof. The City further covenants that it will pay into the Reserve Account out of the Revenue of the System (or, at the option of the City, out of any other funds on hand and legally available for such purpose) not less than approximately equal annual payments sufficient, with other money in the Reserve Account and otherwise required to be paid therein, to have on deposit therein by January 1, 1998, a total amount which will be at least equal to -21- D0T579 93/01/12 the Average Annual Debt Service with respect to the Bonds. Such annual payments shall be made not later than December 20 of each year, commencing in 1993. Except as hereafter provided in this Subsection, the City hereby further covenants and agrees that in the event it issues any future Parity Bonds it will provide in the ordinance authorizing the issuance of the same that it will pay into the Reserve Account out of the Revenue of the System (or, at the option of the City, out of any other funds on hand legally available for such purpose) not less than approximately equal additional annual payments so that by five years from the date of issuance of such future Parity Bonds there will have been paid into the Reserve Account an amount which, with the money already on deposit therein, will be at least equal to the Average Annual Debt Service with respect to such future Parity Bonds and with respect to all Parity Bonds then outstanding issued on or prior to the date of issuance of such future Parity Bonds. Such annual payments into the Reserve Account shall be made not later than December 20 of each year. Notwithstanding anything in this Section 8 to the contrary, the City may elect to fund part or all of the Reserve Account with respect to the Bonds and any Future Parity Bonds through the use of a Qualified Letter of Credit or Qualified Insurance. In making the payments and credits to the Reserve Account required by this Section 8.B, to the extent that the City has obtained -22- D0T579 93/01/12 Qualified Insurance or a Qualified letter of Credit for 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 Reserve Account by this Section 8.B. Such Qualified Letter of Credit or Qualified Insurance shall not be cancellable on less than one year's notice. In the event of any cancellation, the Reserve Account shall be funded in accordance with this Section 8.B, as if the Parity Bonds that remain outstanding had been issued on the date of such notice of cancellation. The City further covenants and agrees that when the required deposits have been made into the Reserve Account, it will at all times maintain therein an amount at least equal to the Average Annual Debt Service as redetermined in each calendar year with respect to the Parity Bonds secured by such Reserve Account. Whenever there is a sufficient amount in the Revenue Bond Fund, including all accounts therein, to pay the principal of, premium, if any, and interest on all outstanding Parity Bonds, the money in the Reserve Account may be used to pay such principal, premium, if any, and interest. Money in the Reserve Account may also be withdrawn to redeem and retire, and to pay the premium, if any, and interest due to such date of redemption, on any outstanding Parity Bonds, as long as the moneys left remaining on deposit in the Reserve Account are at least equal to the Average -23- D0T579 93/01/12 Annual Debt Service determined with respect to the Parity Bonds then outstanding. In the event there shall be a deficiency in the Debt Service Account to meet maturing installments of either interest on or principal of and interest on the outstanding Parity Bonds payable out of such Account, or a deficiency in any Sinking Fund Account to meet the required schedule of payments for amortization of Term Bonds of any issue of Parity Bonds, such deficiency shall be made up from the Reserve Account by the withdrawal of moneys therefrom and by the sale or redemption of obligations held in the Reserve Account, if necessary, in such amounts as will provide cash in the Reserve Account sufficient to make up any such deficiency, and if a deficiency still exists immediately prior to an interest payment date and after the withdrawal of cash, the City shall then draw from any Qualified Letter of Credit, Qualified Insurance, or other equivalent credit facility in sufficient amount to make up the deficiency. Such draw shall be made at such times and under such conditions as the agreement for such Qualified Letter of Credit or such Qualified Insurance shall provide. Any deficiency created in the Reserve Account by reason of any such withdrawal shall then be made up out of Revenue of the System after making necessary provision for the payments required to be made by subparagraphs First through Fourth inclusive of Section 7 of this Ordinance. -24- D0T579 93/01/12 C. Priority of Lien of Payments into Revenue Bond Fund. The amounts so pledged to be paid into the Debt Service Account and the Reserve Account from the Revenue Fund are hereby declared to be a prior lien and charge upon the Revenue of the System superior to all other charges of any kind or nature whatsoever except the Costs of Maintenance and Operation of the System; and except that the amounts so pledged are of equal lien to the charges upon such Revenue for the payment of the principal of and interest on any Parity Bonds; and, provided further, if the City elects to meet the requirements of Section 8.B hereof with respect to the Reserve Account as to any issue of Parity Bonds through the use of a Qualified Letter of Credit, Qualified Insurance or other equivalent credit enhancement device, then the City's reimbursement obligation with respect thereto, if any, may rank on a parity of lien with the Parity Bonds. D. Application and Investment of Moneys in Revenue Bond Fund. Money in the Debt Service Account and Reserve Account may be invested only in Permitted Investments. Investments in the Debt Service Account shall mature prior to the date on which such money shall be needed for required interest or principal payments. Investments in the Reserve Account shall mature not later than the last maturity of any then outstanding Parity Bonds. All interest earned and income derived by virtue of such investments shall remain in the Revenue Bond Fund and be used to meet the required deposits into any account therein. -25- D0T579 93/01/12 E. Sufficiency of Revenues. The City Council hereby finds that in fixing the amounts to be paid into the Revenue Bond Fund out of the Revenue of the System, it has exercised due regard for the Costs of Maintenance and Operation and has not obligated the City to set aside and pay into such Fund a greater amount of such Revenue than in its judgment will be available over and above the Costs of Maintenance and Operation. Section 9. Provision for Defeasance of the Bonds. In the event that cash and /or direct noncallable obligations of the United States of America Department of the Treasury, (including obligations issued or held in book -entry form), maturing or having guaranteed redemption prices at the option of the holder at such time or times and bearing interest to be earned thereon in such amounts as are sufficient (together with any resulting cash balances) to redeem and retire part or all of the Bonds in accordance with their terms, are hereafter irrevocably set aside in a special account and pledged to effect such redemption and retirement, then no further payments need be made into the Revenue Bond Fund or any account therein for the payment of the principal of and interest on the certain Bonds so provided for and such Bonds shall then cease to be entitled to any lien, benefit or security of this ordinance, except the right to receive the funds so set aside and pledged, and such Bonds shall n� longer be deemed to be outstanding hereunder. -26- D0T579 93/01/12 Section 10. Bond Covenants. A. Maintenance and Operation. The City shall at all times maintain, preserve and keep the properties of the System in good repair, working order and condition and will from time to time make all necessary and proper repairs, renewals, replacements, extensions and betterments thereto, so that at all times the business carried on in connection therewith will be properly and advantageously conducted, and the City will at all times operate or cause to be operated said properties of the System and the business in connection therewith in an efficient manner and at a reasonable cost. B. Rate Covenant. The City shall establish, maintain and collect rates and charges for the use of the services and facilities of and all commodities sold, furnished or supplied by the System, which shall be fair and nondiscriminatory and shall adjust such rates and charges from time to time so that: (1) The Revenue of the System will at all times be sufficient (a) to pay the Costs of Maintenance and Operation, (b) to pay the principal of and interest on the Parity Bonds, as and when the same shall become due and payable, (c) to make adequate provision for the payment of any Term Bonds, (d) to make when due all payments which the City is obligated to make into the Reserve Account and all other payments which the City is obligated to make pursuant to this Ordinance, and (e) to pay all taxes, assessments or -27- D0T579 93/01/12 other governmental charges lawfully imposed on the System or the revenue therefrom or payments in lieu thereof and any and all other amounts which the City may now or hereafter become obligated to pay from the Revenue of the System by law or contract; and (2) The Net Revenue in each calendar year will be at least equal to 1.30 times the Average Annual Debt Service on all outstanding Parity Bonds, calculated as of December 31 of the preceding calendar year. C. Sale or Disposition of the System. The City will not sell or otherwise dispose of the System in its entirety unless simultaneously with such sale or other disposition, provision is made for the payment into the Revenue Bond Fund of cash or "Gov- ernment Obligations," as now or hereafter defined in RCW Ch. 39.53, as amended, or its successor statute, if any, sufficient together with interest to be earned thereon to pay the principal of and interest on the then outstanding Parity Bonds, nor will it sell or otherwise dispose of any part of the useful operating properties of the System unless such facilities are replaced or provision is made for payment into the Revenue Bond Fund of the gteatest of the following: (1) An amount which will be in the same proportion to the net amount of Parity Bonds then outstanding (defined as the total amount of the Parity Bonds less the amount of cash and investments in the Revenue Bond Fund and accounts -28- D0T579 93/01/12 therein) that the Revenue from the portion of the System sold or disposed of for the preceding year bears to the total Net Revenue for such period; or (2) An amount which will be in the same proportion to the net amount of Parity Bonds then outstanding (as defined above) that the Net Revenue from the portion of the System sold or disposed of for the preceding year bears to the total Net Revenue for such period; or (3) An amount which will be in the same proportion to the net amount of Parity Bonds then outstanding (as defined above) that the depreciated cost value of the facilities sold or disposed of bears to the depreciated cost value of the entire System immediately prior to such sale or disposition. The proceeds of any such sale or disposition of a portion of the properties of the System (to the extent required above) shall be paid into the Reserve Account in the Revenue Bond Fund. Notwithstanding any other provision of this subsection D the City may sell or otherwise dispose of any of the works, plant, properties and facilities of the System or any real or personal property comprising a part of the same which shall have become unserviceable, inadequate, obsolete or unfit to be used in the operation of the System, or no longer necessary, material to or useful in such operation, without making any deposit into the Revenue Bond Fund. -29- D0T579 93/01/12 D. Liens or Encumbrances. The City will not at any time create or permit to accrue or to exist any lien or other encumbrance or indebtedness upon the System or the Revenue of the System, or any part thereof, prior or superior to the lien thereon for the payment of the Parity Bonds, and will pay and discharge, or cause to be paid and discharged, any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the Revenue of the System, or any part thereof, or upon any funds in the hands of the City, prior to or superior to the lien of the Parity Bonds, or which might impair the security of the Parity Bonds. E. Insurance. The City will keep the works, plants and facilities comprising the System insured, and will carry such other insurance, with responsible insurers, with policies payable to the City, against risks, accidents or casualties, at least to the extent that insurance is usually carried by private corpora- tions operating like properties, or will implement a self - insurance program with reserves adequate, in the judgment of the Council, to protect the City and the holders of the Bonds against loss. In the event of any loss or damage, the City will promptly repair or replace the damaged portion of the insured property or apply the proceeds of any insurance policy for that purpose; or in the event the City should determine not to repair or reconstruct such damaged portion of the properties of the System, the proceeds of such insurance shall be paid into the Reserve -30- D0T579 93/01/12 Account to the extent that such transfer shall be necessary to make up any deficiency in said Reserve Account and the balance, if any, shall, at the option of the City, be used either for repairs, renewals, replacements, or capital additions to the System, for the redemption of Parity Bonds, or for deposit into the Reserve Account. F. Books and Accounts. The City shall keep proper books of account in accordance with any applicable rules and regulations prescribed by the State of Washington. On or before ninety (90) days after each fiscal year of the City's operation of the System, the City will prepare or cause to be prepared an operating statement of the System for such preceding fiscal year. Each such statement shall contain a statement in detail of the Revenue of the System, necessary and current expenses of operation and maintenance, repairs, administrative expenses and expenditures for capital purposes of the System for such fiscal year, shall contain a statement as of the end of such year showing the status of all the funds and accounts created by the various ordinance pertaining to the operation of the System and authorizing the issuance of outstanding bonds payable from the Revenue of the System. Copies of such statement shall be placed on file in the office of the City Clerk and shall be open to inspection at any reasonable time by any holder of outstanding Parity Bonds. All expenses incurred in the maintenance of such -31- D0T579 93/01/12 books and accounts and the preparation of such statement may be regarded as an expense of operation of the System. G. No Free Service. Except to the extent required by law, the City will not furnish or supply or permit the furnishing or supplying of any commodity, service or facility furnished by or in connection with the operation of the System, free of charge to any person, firm or corporation, public or private, so long as any Bonds are outstanding and unpaid. H. Additions and Improvements. The City will not expend any of the revenues derived by it from the operation of the System or the proceeds of any indebtedness payable from the Revenue of the System for any extensions, betterments or improvements to the System which are not legally required or economically sound, and which will not properly and advantageously contribute to the conduct of the business of the System in an efficient manner. I. Collection of Delinquent Accounts. The City will, on or before July 1 of each calendar year, determine all accounts that are delinquent and will take all necessary action to enforce payment of such accounts against those property owners whose accounts are delinquent. J. Tax Exemption. The City hereby covenants that it will not make any use of the proceeds from the sale of the Bonds or any other moneys or obligations of the City which may be deemed to be proceeds of such Bonds pursuant to Section 148(a) of the -32- D0T579 93/01/12 Code and the applicable regulations thereunder which will cause the Bonds to be "arbitrage bonds" within the meaning of said section of the Code and said regulations at the time of such use. The City will comply with the applicable requirements of Section 148(a) of the Code and the applicable regulations thereunder throughout the term of the Bonds. The City covenants that it will not act or fail to act in a manner which will cause the Bonds or the 1990 Bonds to be considered obligations not described in Section 103(a) of the Code. The City will take no actions and will make no use of the proceeds of the Bonds or any other funds held under this Ordinance which would cause any Bonds to be treated as a "private activity bond" as defined in Section 141 of the Code then in effect. Section 11. Issuance of Future Parity Bonds. The City hereby further covenants and agrees with the owners and holders of each of the Bonds for as long as any of the same remain outstanding that the City will not issue any bonds or other obligations having a greater or equal priority of lien upon the Revenue of the System to pay and secure the payment of the principal of and interest on such bonds or other obligations than the lien created upon the Revenue of the System to pay and secure the payment of the principal of and interest on the Bonds except as follows: -33- D0T579 93/01/26 A. The City reserves the right to issue Future Parity Bonds for the purposes of First, providing funds to acquire, construct, reconstruct, install, or replace any equipment, facilities, additions, betterments, or other capital improvements to the System for which it is authorized by law to issue revenue bonds, or Second, refunding at or prior to their maturity, any revenue warrants, or outstanding revenue bonds or other obligations payable out of the Revenue of the System. The City also reserves the right, in issuing such Future Parity Bonds, to pledge that payments will be made out of the Revenue of the System and into the Revenue Bond Fund and the Reserve Account therein to pay and secure the payment of the principal of and interest on such Future Parity Bonds on a parity with the payments required herein to be made out of such Revenue into such Fund and Account to pay and secure the payment of the principal of and interest on any Parity Bonds then outstanding, upon compliance with the following conditions: (1) At the time of the issuance of any future Parity Bonds there is no deficiency in the Revenue Bond Fund or the Reserve Account. (2) The principal of and interest on the future Parity Bonds shall be payable out of the Revenue Bond Fundy and the -34- D0T579 93/01/12 requirements for Reserve Account payments in Section 8 hereof shall be met. (3) Prior to the delivery of any Parity Bonds the City shall have on file in the office of the Clerk of the City a certificate of an independent professional engineer or certified public accountant dated not earlier than 90 days prior to the date of delivery of such future Parity Bonds and showing that the Net Revenue, determined and adjusted as hereinafter provided for each calendar or fiscal year after the issuance of such Parity Bonds (the "Adjusted Net Reve- nue") will equal at least 1.30 times the Annual Debt Service in such year. The Adjusted Net Revenue shall be the Net Revenue for a period of any twelve consecutive months out of the twenty -four months immediately preceding the date of delivery of such proposed Parity Bonds as adjusted by such engineer or accountant to take into consideration changes in Net Revenue estimated to occur under one or more of the following conditions for each year after such delivery for so long as any Parity Bonds, including the Parity Bonds proposed to be issued, shall be outstanding: (a) any increase or decrease in Net Revenue which would result if any change in rates and charges adopted prior to the date of such certificate and subsequent to the beginning of such twelve month period, had been in force during the full twelve month period; -35- D0T579 93/01/12 (b) any increase or decrease in Net Revenue estimated by such engineer or accountant to result from any additions, betterments and improvements to and extensions of any facilities of the System which (i) became fully operational during such twelve month period, (ii) were under construction at the time of such certificate or (iii) will be constructed from the proceeds of the Parity Bonds to be issued; (c) the additional Net Revenue which would have been received if any customers added to the System during such twelve month period were customers for the entire period. Such engineer or accountant shall base his certification upon, and his certificate shall have attached thereto, financial statements of the System audited by the State Examiner (unless such an audit is not available for a twelve -month period within the preceding 24 months) and certified by the City Treasurer, showing income and expenses for the period upon which the same is based. The certificate of such engineer or accountant shall be conclusive and the only evidence required to show compliance with the provisions and requirements of this subsection A(3). Notwithstanding the foregoing requirement, if future Parity Bonds are to be issued for the purpose of refunding at or prior to their maturity any part or all of the then outstanding Parity Bonds and the issuance of such refunding Parity Bonds results in -36- D0T579 93/01/12 a debt service savings and does not require an increase of more than $5,000 in any year for principal and interest on such refunding Parity Bonds, the certificate required by subsection A(3) of this section need not be obtained. B. Nothing herein contained shall prevent the City from issuing revenue bonds or other obligations which are a charge upon the Revenue of the System junior or inferior to the payments required by this Ordinance to be made out of such Revenue into the Revenue Bond Fund and Reserve Account to pay and secure the payment of any outstanding Parity Bonds. C. Nothing herein contained shall prevent the City from issuing revenue bonds secured by Revenue of the System to refund maturing Parity Bonds for the payment of which moneys are not otherwise available. Section 12. Payment of 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 percent of the Rebatable Arbitrage with respect to the Bonds as of each Installment Computation Date, and (ii) 100 percent of the Rebatable Arbitrage with respect to the Bonds as of the Final Computation Date. B. Computation of Rebatable Arbitrage. The Rebatable Arbitrage with respect to the Bonds computed in accordance with the Rebate Computation Certificate and, as of each Computation Date, will be the excess of: -37- D0T579 93/01/12 (a) The future value of all Nonpurpose Receipts with respect to the Bonds; over (b) The future value of all Nonpurpose Payments with respect to the Bonds. The future value will be computed as of each Computation Date. C. Payment Procedure. 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. The payment of Rebatable Arbitrage due as of the Final Computation date that date that Date will be paid no later than the latest of (a) the is 60 days after the Final Computation is 8 months after the date of issuance (c) the date Date, (b) the of the Bonds, 60 days after the earlier of the date that the City no longer expects to spend gross proceeds of the Bonds within 6 months of the date of issuance of the Bonds or 12 months after the date of issuance of the Bonds. Each payment of Rebatable Arbitrage will be made to the Internal Revenue Center, Philadelphia, Pennsylvania 19225 and will be accompanied by the appropriate IRS Form. D. Other Methodology. Notwithstanding this Section 12, payments of Rebatable Arbitrage will be made in accordance with instructions provided by bond counsel if necessary to maintain the federal income tax exemption for interest payments made on the Bonds. -38- D0T579 93/01/12 Section 13. Construction Fund. There is hereby created a special fund of the City to be known as the "1993 Solid Waste Utility Construction Fund" (the "Construction Fund "). Certain proceeds of the Bonds, as set forth in Section 14 of this Ordinance, shall be paid into such Construction Fund and utilized to pay costs of the acquisition, construction and installation of the Project, and costs incidental thereto, and all costs incurred in connection with the issuance and sale of the Bonds, and for repaying any advances hereafter made on account of such costs. Bond proceeds not immediately needed to pay Project costs may be deposited in or with such institutions or invested in Permitted 4Investments that will mature prior to the date on which the money so invested shall be needed. All interest earned and income or profits derived by virtue of such investments shall remain in the Construction Fund and be used for the Project purposes; provided, however, that moneys in the Construction Fund may be used to pay Rebatable Arbitrage, if any, to the extent the Rebatable Arbitrage is directly attributable to earnings on moneys in the Construction Fund. Bond proceeds in the Construction Fund, or income therefrom, not expended upon completion of the Project, may be used first, to make additions and betterments to the System as deemed necessary or advisable by the City Council; second, to pay the principal of and interest on -39- D0T579 93/01/12 any Parity Bonds; and third, for such other System expenses as may be permitted by law and this Ordinance. Section 14. Application of Bond Proceeds. (1) The amount equal to the interest accruing on the Bonds from January 1, 1993, to the date of their delivery shall be deposited in the Debt Service Account. (2) $341,000 of the proceeds of the Bonds shall be deposited in the Reserve Account. (2) The remaining proceeds of the Bonds shall be deposited in the Construction Fund and shall be applied towards construction, acquisition, installation and equipping of the Project, including the reimbursement (to the extent permitted by law) of any City funds which have heretofore been drawn upon to pay costs of the Project described in Section 3 hereof, and to pay a portion of the costs of issuance of the Bonds. Section 15. Bond Form. The Bonds shall be in substantially the following form: UNITED STATES OF AMERICA No. $ STATE OF WASHINGTON CITY OF PORT ANGELES SOLID WASTE UTILITY REVENUE BOND, 1993 INTEREST RATE: MATURITY DATE: CUSIP NO: SEE REVERSE SIDE FOR CERTAIN DEFINITIONS REGISTERED OWNER: PRINCIPAL AMOUNT: -40- DOLLARS D0T579 93/01/26 The City of Port Angeles, Washington, a municipal corporation organized and existing under and by virtue of, the laws and Constitution of the State of Washington (the "City "), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount specified above, unless redeemed prior thereto as provided herein, together with interest on such Principal Amount from the date hereof or the most recent date to which interest has been paid or duly provided for at the Interest Rate set forth above, payable July 1, 1993, and semiannually thereafter on each January 1 and July 1 until payment of the principal sum has been made or duly provided for. Both principal of and interest on this bond are payable in lawful money of the United States of America. Principal shall be paid to the Registered Owner hereof upon presentation and surrender of this bond at the principal offices of either of the fiscal agencies of the State of Washington in Seattle, Washington or New York, New York (collectively, the "Bond Registrar "). Interest on this bond is payable by check or draft of the Bond Registrar mailed (on the date such interest is due) to the Registered Owner hereof at the address appearing on the records maintained by the Bond Registrar as of the fifteenth (15th) day of the month preceding the interest payment date. Reference is hereby made to additional provisions of this bond set forth on the reverse side hereof and such additional provisions shall for all purposes have the same effect as if set forth in this space. Reference also is made to Ordinance No. of the City, adopted January 19, 1993, (the "Bond Ordinance ") as more fully describing the covenants with and the rights of registered owners of the bonds or registered assigns and the meanings of capitalized terms appearing on the bonds which are defined in such Bond Ordinance. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall have been manually signed by the Bond Registrar. It is hereby certified and declared that this bond is issued pursuant to and in strict compliance with the Constitution and laws of the State of Washington and ordinances and resolutions of the City and that all acts, conditions and things required to be done precedent to and in the issuance of this bond and the bonds of this issue have happened, been done and performed. -41- D0T579 93/01/26 IN WITNESS WHEREOF, the City of Port Angeles, Washington, has caused this bond to be signed on behalf of the City with the facsimile signature of its Mayor, to be attested by the facsimile signature of the City Clerk, and the seal of the City to be reproduced in facsimile or impressed hereon, as of this 1st day of January, 1993. [CITY SEAL] ATTEST: City Clerk Date CITY OF PORT ANGELES, WASHINGTON By Mayor CERTIFICATE OF AUTHENTICATION of Authentication: This bond is one referenced Ordinance Washington, and is one 1993, dated January 1, of the bonds described in the within - No. of City of Port Angeles, of the Solid Waste Utility Revenue Bonds, 1993, of such City. WASHINGTON STATE FISCAL AGENCY, as Bond Registrar By Authorized Officer ADDITIONAL BOND PROVISIONS This bond is one of an authorized issue of bonds of the City of like date and tenor, except as to number, amount, rate of interest and date of maturity, in the aggregate principal amount of $3,410,000 issued pursuant to the laws of the State of Washington and ordinances of the City Council of the City of Port Angeles duly and regularly adopted, including the Bond Ordinance, for the purpose of providing funds to pay part of the cost of acquiring, construing and installing certain additions and betterments to the solid waste utility of the City. -42- D0T579 93/01/26 This bond and the bonds of this issue are payable solely from the special fund of the City known as the "1990 City of Port Angeles Solid Waste Utility Revenue Bond Fund" (herein called the "Revenue Bond Fund ") created by Ordinance No. 2603 in the office of the Treasurer of the City. The City has irrevocably obligated and bound itself to pay into the Revenue Bond Fund out of the Revenue of the System (as defined in the Bond Ordinance) or from such other moneys as may be provided therefor certain amounts necessary to pay and secure the payment of the principal and interest on such bonds. The bonds of this issue are not general obligations of the City. The City has designated the Bonds of this issue as qualified tax - exempt obligations pursuant to Section 265(b) of the Code. The bonds of this issue are issued under and in accordance with the provisions of the Constitution and applicable statutes of the State of Washington and duly adopted ordinances of the City. The City hereby covenants and agrees with the owner and holder of this bond that it will keep and perform all the cove- nants of this.bond and of the Bond Ordinance to be by it kept and performed, and reference is hereby made to the Bond Ordinance for a complete statement of such covenants. The City does hereby pledge and bind itself to set aside from the Revenue Fund out of the Revenue of the System and to pay into the Revenue Bond Fund and the accounts created therein the various amounts required by the Bond Ordinance to be paid into and maintained in such Fund and accounts, all within the times provided by the Bond Ordinance. To the extent more particularly provided in the Bond Ordinance, said amounts so pledged to be paid into the Revenue Bond Fund out of said Revenue of the System are hereby declared to be a prior lien and charge upon such Revenue of the System superior to all other liens and charges of any kind or nature except the Costs of Maintenance and Operation (as defined in the Bond Ordinance) of the System (as defined in the Bond Ordinance) and equal to any lien or charge that may hereafter be made on such Revenue of the System to pay and secure the payment of the principal of and interest on any solid waste utility revenue bonds of the City or other obligations ranking on a parity with such bonds which may later be issued on a parity with the bonds of this issue. The City has further bound itself to maintain the System in good repair, working order and condition, to operate the same in -43- D0T579 93/01/26 an efficient manner and at a reasonable cost, and to fix, maintain and collect rates and charges for as long as any of the bonds of this issue are outstanding that will make available, for the payment of the principal thereof and interest thereon as the same shall become due, Net Revenue (as defined in the Bond Ordinance) in an amount which will be equal to at least 1.30 times the Average Annual Debt Service (as defined in the Bond Ordinance). The City has not reserved the right to redeem the bonds of this issue prior to their stated maturities. The bonds of this issue may be transferred only if endorsed in the manner provided hereon and surrendered to the Bond Regis- trar. The bonds are interchangeable for bonds of any authorized denomination of an equal aggregate principal amount and of the same interest rate and maturity upon presentation and surrender to the Bond Registrar. Such transfer or exchange shall be without cost to the Registered Owner. Upon surrender to the Bond Registrar, bonds are interchangeable for bonds in any authorized denomination of an equal aggregate principal amount and of the same interest rate and maturity. The City may deem the person in whose name this bond is registered to be the absolute owner hereof for the purpose of receiving payment of the principal of and interest on the bond and for any and all other purposes whatsoever. The Bond Registrar is not required to issue, register, transfer or exchange any of the bonds during a period beginning at the opening of business on the 15th day next preceding any interest payment date and ending at the close of business on the interest payment date, or, in the case of any proposed redemption of the bonds, after the mailing of notice of the call of such bonds for redemption. The pledge of Revenue of the System and other obligations of the City under the Bond Ordinance may be discharged at or prior to the maturity or redemption, of the bonds of this issue upon the making of provisions for the payment thereof on the terms and conditions set forth in the Bond Ordinance. The capitalized terms used herein have the meanings set forth in the Bond Ordinance. Reference is made to the Bond Ordinance and any and all modifications and amendments thereof for a description of the nature and extent of the security for the bonds of this issue, the funds or revenues pledged, and the terms and conditions upon which such bonds are issued. -44- D0T579 93/01/26 The following abbreviations, when used in the inscription on the face of the within bond, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT - Custodian (Cust) (Minor) under Uniform Gifts to Minors Act (State) Additional abbreviations may also be used although not listed above. 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 all rights thereunder and does hereby irrevocably constitute and appoint of , or its successor, as Agent to transfer said bond on the books kept by the Bond Registrar for registration thereof, with full power of substitution in the premises. DATED: , 19 -45- D0T579 93/01/26 SIGNATURE GUARANTEED: NOTE: The signature of 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. Section 16. Execution and Authentication of the Bonds. The Bonds shall be signed on behalf of the City by the manual or facsimile signature of the Mayor, shall be attested by the manual or facsimile signature of the City Clerk, and shall have the official corporate seal of the City impressed or imprinted in facsimile thereon. Only such Bonds as shall bear thereon a Certificate of Authentication in the form hereinbefore recited, 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. In case either of the officers of the City who shall have executed the Bonds shall cease to be such officer or officers of the City before the Bonds so signed shall have been authenticated -46- D0T579 93/01/26 or delivered by the Bond Registrar, or issued by the City, such Bonds may nevertheless be authenticated, delivered and issued and upon such authentication, delivery and issuance, shall be as binding upon the City as though those who signed the same had continued to be such officers of the City. Any Bond may also be signed and attested on behalf of the City by such persons as at the actual date of execution of such Bond shall be the proper officers of the City although at the original date of such Bond any such person shall not have been such officer. Section 17. Lost or Destroyed Bonds. In case the Bonds or any of them shall be lost, stolen or destroyed, the Bond Registrar may execute and deliver a new Bond or Bonds of like amount, date, and tenor to the registered owner thereof upon the owner's paying the expenses and charges of the City and the Bond Registrar in connection therewith and upon his /her filing with the Treasurer and the Bond Registrar evidence satisfactory to said Treasurer and Bond Registrar that such Bond or Bonds were actually lost, stolen or destroyed and of his /her ownership thereof, and upon furnishing the City and Bond Registrar with indemnity satisfactory to such Treasurer and Bond Registrar. Section 18. Designation of Bonds as Oualified Tax - Exempt Obligations. The City hereby designates the Bonds as qualified tax - exempt obligations pursuant to Section 265(b) of the Code. The City does not expect to issue more than $10,000,000 in tax - exempt obligations during calendar year 1993. -47- D0T579 93/01/26 Section 19. Sale of Bonds. The sale of the Bonds to Piper Jaffray Inc., Seattle, Washington, pursuant to the Purchase Contract, at such interest rates, with such maturities, at such price and upon the terms, conditions, and covenants as set forth in said Purchase Contract and in this ordinance, is hereby approved, ratified and confirmed. The proper officials of the City are hereby authorized and directed to do everything necessary for the prompt execution and delivery of the Bonds to said purchaser and for the proper application and use of the proceeds of sale thereof. Section 20. Official Statement; Use of Documents. The City hereby approves the Preliminary Official Statement presented herewith to the Council and authorizes the distribution of the Preliminary Official Statement by the Underwriter in connection with the offering of the Bonds. Pursuant to Securities and Exchange Commission Rule 15c2 -12 ( "Rule 15c2 -12 "), the City hereby deems this Preliminary Official Statement as final as of its date except for the omission of the information dependent upon the pricing of the issue and the completion of the underwriting agreement, such as offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, and other terms of the Bonds dependent on the foregoing matters. The City agrees to cooperate with the Underwriter to deliver or cause to be delivered, within seven business days from the date of the Purchase Contract and in -48- D0T579 93/01 /26 sufficient time to accompany any confirmation that requests payment from any customer of the Underwriter, copies of a final official statement in sufficient quantity to comply with paragraph (b)(4) of Rule 15c2 -12 and the rules of the Municipal Securities Rule- making Board. Section 21. Temporary Bond. Until the definitive Bonds are prepared, the City may execute a temporary bond which shall be typewritten, and which shall be delivered to the purchaser or purchasers of the Bonds in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions. The temporary Bond shall be dated as of the date of the Bonds, shall be fully registered, shall be in the denomination of the aggregate principal amount of the Bonds as set forth in the Purchase Contract, shall be numbered T -1, shall be substantially of the tenor of such definitive Bonds, but with such omissions, insertions and variations as may be appropriate to temporary bonds and shall be signed by the Mayor and City Clerk. Section 22. Amendments. A. The Council from time to time and at any time may pass an ordinance or ordinances supplemental hereof, which ordinance or ordinances thereafter shall become a part of this Ordinance, for any one or more or all of the following purposes: (1) To add to the covenants and agreements of the City in this Ordinance, other covenants and agreements thereafter to be observed, which shall not adversely affect the -49- D0T579 93/01/26 interests of the holders of any Parity Bonds, or to surrender any right or power herein reserved. (2) To make such provisions for the purpose of curing any ambiguities or of curing, correcting or supplementing any defective provision contained in this Ordinance or any ordinance authorizing future Parity Bonds in regard to matters or questions arising under such ordinances, as the Council may deem necessary or desirable and riot inconsistent with such ordinances and which shall not adversely affect, in any material respect, the interest of the holders of Parity Bonds. Any such supplemental ordinance may be adopted without the consent of the holders of any Parity Bonds at any time outstanding, notwithstanding any of the provisions of subsection B of this section. B. With the consent of the holders of not less than 65% in aggregate principal amount of the Parity Bonds at the time outstanding, the Council may pass an ordinance or ordinances supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this ordinance or of any supplemental ordinance; provided, however, that no such supplemental ordinance shall: (1) Extend the fixed maturity of any Parity Bonds, or reduce the rate of interest thereon, or extend the time of payment of interest from their due date, or reduce the -50- D0T579 93/01/26 amount of the principal thereof, or reduce any premium payable on the redemption thereof, without the consent of the holder of each bond so affected; or (2) Reduce the aforesaid percentage of bondholders required to approve any such supplemental ordinance, without the consent of the holders of all of the Parity Bonds then outstanding. It shall not be necessary for the consent of bondholders under this subsection B to approve the particular form of any proposed supplemental ordinance, but it shall be sufficient if such consent shall approve the substance thereof. C. Upon the adoption of any supplemental ordinance pursuant to the provisions of this section, this Ordinance shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations of the City under this ordinance and all holders of Parity Bonds outstanding here- under shall thereafter be determined, exercised and enforced thereunder, subject in all respects to such modification and amendments, and all terms and conditions of any such supplemental ordinance shall be deemed to be part of the terms and conditions of this Ordinance for any and all purposes. D. Parity Bonds executed and delivered after the execution of any supplemental ordinance passed pursuant to the provisions of this section may have a notation as to any matter provided for in such supplemental ordinance, and if such supplemental -51- D0T579 93/01/26 ordinance shall so provide, new bonds so modified as to conform, in the opinion of the Council, to any modification of this Ordinance contained in any such supplemental ordinance, may be prepared and delivered without cost to the holders of any affected Parity Bonds then outstanding, upon surrender for cancellation of such bonds, in equal aggregate principal amounts. Section 23. Severability. If any one or more of the cove- nants or agreements provided in this Ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or cove- nants, agreement or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements in this Ordinance and shall in no way affect the validity of the other provisions of this Ordinance or of any Parity Bonds. Section 24. General Authorization. The Mayor, the Finance Director, and the Clerk of the City 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. -52- D0T579 93/01/26 Section 25. Prior Acts. All acts taken pursuant to the authority of this Ordinance but prior to its effective date are hereby ratified and confirmed. Section 26. Effective Date. This Ordinance shall be effec- tive five days after the date of its publication. PASSED by the Council of the City of Port Angeles at a regular meeting thereof, held this 19th day of January, 1993. CITY OF PORT ANGELES, WASHINGTON By Mayor ATTEST: Passed: City Clerk Published: -53- D0T579 93/01/26 Section 25. Prior Acts. All acts taken pursuant to the authority of this Ordinance but prior to its effective date are hereby ratified and confirmed. Section 26. Effective Date. This Ordinance shall be effec- tive five days after the date of its publication. PASSED by the Council of the City of Port Angeles at a regular meeting thereof, held this 19th day of ATTEST: ty Cl rk January, 1993. CITY OF PORT A. LES, WASHINGTON By Passed: January 19, 1993 Published: January 24, 1993 (By Summary) ayor -54- D0T579 93/01/12 CLERK'S CERTIFICATE I, the undersigned, the duly chosen, qualified and acting Clerk of the City of Port Angeles, Washington, and keeper of the records of the Council of the City (herein called the "Council "), DO HEREBY CERTIFY: 1. That the attached ordinance is a true and correct copy of Ordinance No. 2737 of the City (herein called the "Ordinance "), as finally passed at a meeting of the Council held on the 19th day of January, 1993, and duly recorded in my office. 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 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 duly fulfilled, carried out and otherwise observed, and that I am authorized to execute this certificate. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City this 19th day of January , 1993. (SEAL) 1 y erk / BOND PURCHASE CONTRACT RELATING TO x3,410,000 City of Port Angeles, Washington Solid Waste Utility Revenue Bonds, 1993 City of Port Angeles 321 5th Avenue Port Angeles, WA 98362 Ladies & Gentlemen: P11'iRJ: Nil RAY Piper Jaflirav Inc. 1500 IBM Building P.O. Box 34930 &asiie. WA 98t24•1930 206 87-3800 Piper Jaffrey Inc. (the "Purchaser ") offers to purchase from the City of Port Angeles, Washington, (the "Seller ") all the aforementioned Bonds (the "Bonds "), with delivery and payment at mutually agreed upon time and place, based upon the covenants, representations and warranties set forth below. Appendix A, which is incorporated into this Purchase Contract by reference, contains a brief description of the Bonds, the manner of their issuance, the purchase price to be paid, and the date of delivery and payment (the "Closing "). 1. Prior to the closing, the Seller will adopt a Bond Ordinance (the "Bond Ordinance ") satisfactory in form and substance to the Purchaser. The Purchase is authorized by the Seller to use this document and the information contained in it in connection with the sale of the Bonds. 2. You represent and covenant to the Purchaser that: (a) You have and will have at the Closing the power and authority to enter into and perform this Purchase Contract, to adopt the Bond Ordinance and to deliver and sell the Bonds to the Purchasers; (b) This Purchase Contract and the Bonds do not and will not conflict with or create a breach or default under any existing law, regulation, order or agreement to which the Seller is subject; Since 1419i Member-on:. New York Sunk ['.attune". !n. 2'd Ad3d3tif d3dId Wd2J :EO E6. 6ti Ndt' (c) No governmental approval or authorization other than the Bond Ordinance is required in connection with the sale of the Bonds to the Purchasers; (d) This Purchase Contract and the Bonds (when paid for by the Purchaser) are and shall be at the time of Closing legal, valid, and binding obligations of the Seller enforceable in accordance with their terms, subject only to applicable bankruptcy, insolvency or other similar laws generally affecting creditors' rights. (e) At least five business days prior to the Closing described above, the City shall deliver, or cause to be delivered, to the Underwriter five copies of the final Official Statement relating to the Bonds dated the date hereof, (such Official Statement including the cover page and appendices thereto, being herein called the "Official Statement "), signed on the City's behalf by the Mayor of the City. By acceptance of this Purchase Contract, the City hereby authorizes the use of copies of the Official Statement, The City consents to the use by the Underwriter, prior to the date hereof, of the Preliminary Official Statement in connection with the offering of the Bonds (such Preliminary Official Statement, including the cover page and the appendices thereto herein called the "Preliminary Official Statement "). The City confirms that as of its date, the Preliminary Official Statement was "deemed final" by the City. (f) During the period commencing on the date hereof and ending on the date 90 days (25 days if the final Official Statement shall be available to any person from a nationally recognized municipal securities information repository following the end of the underwriting period (as such term is defined in Rule 15c2- 12(e)(2) of the Securities and Exchange Commission), if any event shall occur as a result of which it is necessary to supplement therein, in light of the circumstances existing at such time, not misleading, the City shall forthwith notify the Underwriter of any such supplement to the Official Statement necessary, in the Underwriter's opinion, so that the statements therein as so supplemented will not be misleading in light of the circumstances existing at such time. 3. (a) From the time of the Seller's acceptance of this Purchase Contract to the date of Closing, there shall not have been any: E'd (i) Material adverse change in the financial condition or general affairs of Seller; (ii) Event, court decision, proposed law or rule which may have the effect of changing the federal income tax incident to the Bonds; and (iii) International or national crisis, suspension of stock exchange trading or banking moratorium materially affecting, in the Purchasers opinion, the market price of the Bonds. J,d33dtif d3dId WdBT :E0 E6. 6T NI f (b) At the Closing, the Seller will deliver or make available to the Purchaser: 0) The Bonds, in definitive form, duly executed and bearing proper CUSIP numbers; (ii) The unqualified approving opinion of Bond Counsel ( "Bond Counsel "), satisfactory to the Purchaser dated as of Closing, relating to the legality of the Bonds, and an opinion of Bond Counsel confirming the enforceability of this Purchase Contract; and (iii) Such additional certificates, instruments and other documents (including, without limitation, those set forth in Appendix A) as the Purchaser may deem necessary with respect to the issuance and sale of the Bonds, all in form and substance satisfactory to the Purchaser. 4. From the proceeds of the Bonds shall be paid the cost of preparing, printing, and executing the Bonds and Official Statements, the fees and expenses of Bond Counsel and Financial Advisor, bond registration fees and miscellaneous Seller expenses, and the Purchaser will pay all other costs incurred by the Purchaser in connection with the offering and distribution of the Bonds. 5. This Purchase Contract is intended to benefit only the parties hereto, and the Seller's representations and warranties shall survive any investigation made by or for the Purchaser, delivery and payment for the Bonds, and the termination of this Purchase Contract. Should the Purchaser fail (other than for circumstances beyond its control or for reasons permitted in this Purchase Contract) to pay for the Bonds at Closing, any expenses incurred shall be borne in accordance with Section 4. Should the Seller fail to satisfy any of the foregoing conditions or covenants, or if the Purchaser's obligations are terminated for any reason permitted under the Purchase Contract, then neither Purchaser or Seller shall have any further obligations under the Purchase Contract, except that any expenses of the Seller shall be borne in accordance with Section 4. Very truly yours, PIPER JAFFRAY INC. anaging Director ACCEPTED this 1 s + of January, 1993 Y: �.�.. yor 17'd A83ddtif d I d Wd8 Z: E0 E6. 6T NtiE a. Purchase Price: b. Denomination: c. Form: d. Dated Date.; e. In18rAI Payable: f. Maturity Schedule,: g. Interest Rates; Maturity ant 1994 $ 625,000 1995 650,000 1996 680,000 APPENDIX A DESCRIPTION OF BONDS $3,384,186.30 (99.243% of par value) plus accrued interest from February 1, 1993. $5,000 or integral multiples thereof. Fully registered as to principal and interest. January 1, 1993 Semi- Annually on January 1 and July 1, commencing July 1, 1993. Bonds shall mature on January 1 and bear interest in accordance with the schedule set forth below. The Bonds shall bear interest in accordance with the following schedule: Int rgatt Rate 3.50% 4,00 4.50 Maturity 1997 1998 $ 710,000 745,000 Interest Rate 4.75% 5.00 b. Optional Redemption: The Bonds are issued without the right of redemption pior to their regularly scheduled maturities. i. Closifl Date. On or about January 28th, 1993. S'd hd3ddtif 2:13dId Wd6T :E0 E6, 6ti Ntif Summaries of Ordinances Adopted by the Port Angeles City Council on January 19. 1993 Ordinance No. 2737 This Ordinance of the City of Port Angeles adopts and specifies a plan for making additions and betterments to the solid waste utility system of the City; authorizes the issuance and sale of solid waste utility revenue bonds in the principal amount not to exceed $3,410,000 for the purpose of providing part of the funds required for acquiring, constructing and installing certain additions and improvements to the solid waste utility system of the City; provides for the payment and sale of said bonds; and provides the covenants, terms and conditions under which such bonds and future parity bonds shall be issued. Ordinance No. 2738 This Ordinance of the City of Port Angeles rezones property located on Park Avenue and Porter Avenue from RS -9, Residential Single - Family, to RS -7, Residential Single- Family, amends the Official Zoning Map (Ordinance No. 2158) and Ordinance No. 1709, as amended. Ordinance No. 2739 This Ordinance of the City of Port Angeles amends Section 1 of Ordinance No. 2471 and Section 17.87.040 of the Port Angeles Municipal Code, by specifying that support equipment and accessories for retail stands must not extend more than three feet in total, rather than in one direction, from the edge of the cart. Ordinance No. 2740 This Ordinance of the City of Port Angeles revises off street parking requirements and amends Ordinance No. 1588, as amended, and Chapter 14.40 of the Port Angeles Municipal Code. Ordinance No. 2741 This Ordinance of the City of Port Angeles revises the prohibition against resubdividing property that has already been short platted, and amends Section 20 of Ordinance No. 2222, and Section 16.04.200 of the Port Angeles Municipal Code. Ordinance No. 2742 This Ordinance of the City of Port Angeles makes numerous minor wording and clarification amendments to the Zoning Code, Ordinance No. 1709, as amended, and Title 17 of the Port Angeles Municipal Code. Ordinance No. 2743 This Ordinance of the City of Port Angeles makes numerous procedural amendments and adds a sidewalk requirement to the Subdivision Ordinance, Ordinance No. 1631, and Chapter 16.08 of the Port Angeles Municipal Code. Ordinance No. 2744 This Ordinance of the City of Port Angeles prescribes the days and hours of operation of City offices and amends Section 1, Ordinance No. 1249 and Port Angeles Municipal Code Section 2.44.030. Ordinance No. 2745 This Ordinance of the City of Port Angeles revises the permit fee and deposit requirements for certain work within City rights -of -way and utility connections and amends Ordinances No. 2181 and No. 2166 and Chapters 13.32 and 11.08 of the Port Angeles Municipal Code. 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: January 24. 1993 Becky J. Upton City Clerk