HomeMy WebLinkAbout3666CITY OF PORT ANGELES, WASHINGTON
WATER AND WASTEWATER UTILITY REVENUE REFUNDING BONDS, 2020
ORDINANCE NO. 3666
AN ORDINANCE of the City of Port Angeles, Washington, authorizing
the issuance of water and wastewater utility revenue refunding
bonds of the City in the principal amount of not to exceed
$29,000,000, to defease and refund certain outstanding water and
wastewater utility revenue obligations, to make a deposit to the
reserve account (if required), and to pay costs of issuing the bonds;
providing the form, terms and covenants of the bonds; and
delegating authority to approve the method of sale and final terms
of the bonds.
Passed November 4, 2020
Prepared By:
PACIFICA LAw GROUP LLP
Seattle, Washington
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CITY OF PORT ANGELES, WASHINGTON
ORDINANCE NO. 3666
TABLE OF CONTENTS
Page
Section 1.
Definitions and Interpretation of Terms ....................... :............................. ;,.............
3
Section 2.
Compliance with Parity Conditions ..................... .....:............... ..... .:.......:..:.:................
12
Section 3.
Authorization and Description of Bonds...............................................................13
Section 4.
Registration, Exchange and Payments...................................................................14
Section 5.
Redemption; Purchase of Bonds................................................_...._.......................19
Section6.
Form of Bonds.......................................................................................................22
Section 7.
Execution of Bonds............................................................................:.:....:.............22
Section 8.
Application of Bond Proceeds; Refunding Plan....................................................23
Section9.
Revenue Fund...............................................................................................:--......26
Section 10.
Rate Stabilization Fund ....................................................... ........,............................
27
Section11.
Bond Account........................................................... ................ ..............................
28
Section 12.
Adequacy of Revenues................................................................................... .......32
Section 13.
Covenants and Agreements ............................................ :...... ......... ........ :.:.............
32
Section14.
Tax Covenants..............................................................................-......:......:...........35
Section15.
Defeasance............................................................. ........................... .........:.............
37
Section 16.
Issuance of Future Parity Bonds ......................... ........................................ ............
38
Section17.
Sale of Bonds.........................................................................................................42
Section 18.
Undertaking to Provide Ongoing Disclosure.........................................................44
Section 19.
Supplements and Amendments .............................. ............ ::.:::..............................
45
Section 20.
Lost or Destroyed Bonds.......................................................................................47
Section21.
Severability............................................................................................................47
Section22.
Effective Date.............................................................................. .........................47
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ORDINANCE NO. 3666
AN ORDINANCE of the City of Port Angeles, Washington, authorizing
the issuance of water and wastewater utility revenue refunding
bonds of the City in the principal amount of not to exceed
$29,000,000, to defease and refund certain outstanding water and
wastewater utility revenue obligations, to make a deposit to the
reserve account (if required), and to pay costs of issuing the bonds;
providing the form, terms and covenants of the bonds; and
delegating authority to approve the method of sale and final terms
of the bonds.
WHEREAS, the City of Port Angeles, Washington, a municipal corporation of the State of
Washington (the "City"), owns and operates a storm water utility and a water and wastewater
utility; and
WHEREAS, pursuant to Section 2 of Ordinance No. 3407 passed by the City Council
(the "Council") on August 3, 2010, the City combined its storm water utility and water and
wastewater utility, as such utilities may be added to, improved or extended from time to time (as
combined, the "System") for borrowing purposes, as permitted by Ordinance Nos. 3148 and 3375;
and
WHEREAS, the City has issued and has outstanding the following senior parity lien
obligations of the System:
Principal Amount
Date of Authorizing Outstanding as of
Designation Issue Ordinance September 1, 2020
Water and Wastewater Utility 09/29/2009 No. 3375 $ 2,960,000
Revenue Refunding Bonds, 2009
("2009 Bonds")
Water and Wastewater Utility 08/17/2010 No. 3407 5,695,000
Revenue Bonds, 2010 ("2010 Bonds")
Water and Wastewater Utility 09/30/2013 No. 3481 1,925,000
Revenue Refunding Bonds, 2013
("2013 Bonds")
(collectively, the "Outstanding Parity Bonds"); and
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WHEREAS, the ordinances authorizing the 2009 Bonds and the 2010 Bonds provide that
the City may call such bonds for redemption prior to maturity on or after November 1, 2019 and
November 1, 2020, respectively, as a whole or in part on any date, at the price of par plus accrued
interest, if any, to the date of redemption; and
WHEREAS, the City has issued and has outstanding certain subordinate lien obligations
of the System (as identified herein, the "Junior Lien Loans") that may be prepaid prior to maturity,
as a whole or in part on any date, at the price of par plus accrued interest, if any, to the date of
prepayment; and
WHEREAS, after due consideration it appears to this Council that all or a portion of the
2009 Bonds and 2010 Bonds may be defeased and/or refunded prior to maturity and all or a portion
of the Junior Lien Loans may be prepaid prior to maturity by the proceeds of water and wastewater
utility revenue refunding bonds authorized herein (the "Bonds") and available funds of the City at
a substantial savings to the City and its ratepayers; and
WHEREAS, the ordinances authorizing the issuance of the Outstanding Parity Bonds
(collectively, the "Outstanding Parity Bond Ordinances") provide that additional water and
wastewater utility revenue bonds may be issued on a parity of lien with the Outstanding Parity
Bonds if certain conditions are met; and
WHEREAS, this Council wishes to delegate authority to the Finance Director and City
Manager (each, a "Designated Representative"), for a limited time, to approve the method of sale,
to select the outstanding obligations for refunding and/or prepayment, and to approve the interest
rates, maturity dates, redemption terms and principal maturities the Bonds within the parameters
set by this ordinance; and
WHEREAS, the Bonds authorized herein shall be sold by negotiated or competitive public
sale as set forth herein;
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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PORT ANGELES,
WASHINGTON, DO ORDAIN, as follows:
Section 1. Definitions and hiterpretation of Terms.
(a) Definitions. As used in this ordinance, the following words have the following
meanings:
Acquired Obligations means the Government Obligations acquired by the City under the
terms of this ordinance and the Escrow Agreement, but only to the extent that the same are acquired
at Fair Market Value.
Annual Debt Service, for any Fiscal Year or calendar year means the sum of:
(a) the interest due in such year on all outstanding Parity Bonds excluding, however,
interest to be paid from the proceeds of Parity Bonds,
(b) the principal of all outstanding Serial Bonds due in such year, and
(c) the Sinking Fund Requirement, if any, for such year.
For purposes of satisfying the rate covenant in Section 13 and the Future Parity Bond test
in Section 16, Annual Debt Service for any Fiscal Year or calendar year shall exclude any Debt
Service Offsets. If the interest rate on any such bonds is other than a fixed rate, the rate applicable
at the time of the computation shall be used; provided, however, that so long as the 2009 Bonds
are outstanding the City may issue variable rate obligations payable from Gross Revenue only as
provided in Section 16 of this ordinance. From and after such time as no 2009 Bonds remain
outstanding, if the interest rate on any Parity Bonds is other than a fixed rate, the rate applicable
at the time of computation shall be used unless such rate is less than an interest rate equal to the
yield to maturity equal to the higher of (i) the average of the SIFMA Municipal Swap Index over
the 60 month period immediately preceding the date of computation, or (ii) the average of the
SIFMA Municipal Swap Index over the 12 month period immediately preceding the date of
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computation, as determined within ten days prior to the date of computation or, if such
computation is being made in connection with the certificate required for the issuance of Future
Parity Bonds, then within ten days prior to the date of such certificate.
Assessments mean assessments (including interest and penalties) levied in any utility local
improvement district of the City for the acquisition or construction of additions and improvements
to and extension of the System, if such assessments are pledged to be paid into the Bond Account.
Average Annual Debt Service means the amount determined by dividing (a) the sum of all
interest and principal to be paid on all Parity Bonds from the date of determination to the last
maturity date of such Parity Bonds, by (b) the number of Fiscal Years or calendar years from and
including the Fiscal Year or calendar year in which the determination is made to the last Fiscal
Year or calendar year in which any of such Parity Bonds will be outstanding.
Beneficial Owner means any person that has or shares the power, directly or indirectly, to
make investment decisions concerning ownership of any Bonds (including persons holding Bonds
through nominees, depositories or other intermediaries).
Bond Account means the 1994 Water and Wastewater Utility Revenue Bond Fund created
by Section 15 of Ordinance No. 2843 and continued pursuant to Section 11 of this ordinance.
Bond Counsel means Pacifica Law Group LLP or an attorney at law or a firm of attorneys,
selected by the City, of nationally recognized standing in matters pertaining to the tax-exempt
nature of interest on bonds issued by states and their political subdivisions.
Bond Purchase Contract means the bond purchase contract, for the purchase of the Bonds
sold by negotiated sale to the Underwriter, executed by a Designated Representative pursuant to
this ordinance.
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Bond Register means the registration books showing the name, address and tax
identification number of each Registered Owner of a series of Bonds, maintained for the Bonds in
the manner required pursuant to Section 149(a) of the Code.
Bond Registrar means, initially, the fiscal agent of the State, for the purposes of registering
and authenticating the Bonds, maintaining the Bond Register, effecting transfer of ownership of
the Bonds and paying interest on and principal of the Bonds.
Bonds mean the City's Water and Wastewater Utility Revenue Refunding Bonds, 2020,
issued in the aggregate principal amount of not to exceed $29,000,000 pursuant to this ordinance.
City means the City of Port Angeles, a municipal corporation duly organized and existing
under the laws of the State of Washington.
City Clerk means the duly appointed and acting City Clerk of the City or the successor to
the duties of that office.
Certificate of Award means if any, a certificate awarding the Bonds sold by competitive
sale to the successful bidder, executed by a Designated Representative pursuant to this ordinance.
Code means the Internal Revenue Code of 1986 as in effect on the date of issuance of
Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations
issued on the date of issuance of the Bonds, together with applicable proposed, temporary and final
regulations promulgated, and applicable official public guidance published, under the Code.
Commission means the United States Securities and Exchange Commission.
Continuing Disclosure Certificate means one or more written undertakings for the benefit
of the owners and Beneficial Owners of any Bonds as required by Section (b)(5) of the Rule.
Costs of Maintenance and Operation means all necessary operating expenses, current
maintenance expenses, expenses of reasonable upkeep and repairs, and insurance and
administrative expenses of the System, but excludes depreciation, payments for debt service or
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into reserve accounts and costs of capital additions to or replacements of the System, taxation by
the City or payments in lieu of taxes.
Council means the Port Angeles City Council, as the general legislative body of the City
as the same is duly and regularly constituted from time to time.
Debt Service Account means the account of that name created in the Bond Account by
Section 15 of Ordinance No. 2843 and continued pursuant to Section 11 of this ordinance.
Debt Service Offset means receipts of the City that are not included in Gross Revenue and
that are legally available to pay debt service on Parity Bonds, including without limitation federal
interest subsidy payments, designated as such by the City.
Designated Representative means the City Manager and the Finance Director and the
successor to such offices, or his or her designee. The signature of one Designated Representative
shall be sufficient to bind the City.
DTC means The Depository Trust Company, New York, New York, a limited purpose trust
company organized under the laws of the State of New York, as initial depository for the Bonds
or any successor substitute depository for the Bonds.
Escrow Agent means U.S. Bank National Association, Seattle, Washington.
Escrow Agreement means the Escrow Deposit Agreement to be dated as of the date of
closing of the Bonds.
Fair Market Value means the price at which a willing buyer would purchase an investment
from a willing seller in a bona fide, arm's-length transaction, except for specified investments as
described in Treasury Regulation § 1.148-5(d)(6), including United States Treasury obligations,
certificates of deposit, guaranteed investment contracts, and investments for yield restricted
defeasance escrows. Fair Market Value is generally determined on the date on which a contract
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to purchase or sell an investment becomes binding, and, to the extent required by the applicable
regulations under the Code, the term "investment" will include a hedge.
Federal Tax Certificate means the certificate executed by the Finance Director setting
forth the requirements of the Code for maintaining the tax exemption of interest on the Bonds to
be dated as of the date of closing for such Bonds.
Finance Director means the duly appointed and acting Finance Director of the City or the
successor to the duties of that office.
Fiscal Year means the fiscal year used by the City at any time. At the time of the passage
of this ordinance, the Fiscal Year is the twelve-month period beginning January 1 of each year and
ending December 31 of each year.
Future Parity Bonds mean any revenue bonds, revenue warrants or other revenue
obligations that may be issued in the future with a lien on money in the Revenue Fund to pay and
secure the payment of the principal thereof and interest thereon equal to the lien created on the
money in such Fund to pay and secure the payment of the principal of and interest on the
Outstanding Parity Bonds and the Bonds.
Government Obligations mean those obligations now or hereafter defined as such in
chapter 39.53 RCW constituting direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by the United States of America, as such chapter may be
hereafter amended or restated.
Gross Revenue means all earnings, revenue and money, except Assessments, received by
the City from or on account of the operation of the System, including proceeds from the sale, lease
or other disposition of any of the properties or facilities of the System, and the income from
investments of money in the Revenue Fund and any bond fund or from any other investment
thereof except the income from investments irrevocably pledged to the payment of revenue bonds
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pursuant to a plan of retirement or refunding. The term "Gross Revenue" does not include grants
or bond proceeds, but does include federal or state reimbursements of operating expenses to the
extent such expenses are included as "Costs of Maintenance and Operation."
Junior Lien Loans mean the following obligations eligible for prepayment: Loans from
the Washington State Department of Ecology referred to as Loan No. L1200034 (2012) and
Agreement WQC-2015-PorAngPW-00175 (2014).
Letter of Representations means the Blanket Issuer Letter of Representations given by the
City to DTC, as amended from time to time.
Mayor means the duly elected and acting Mayor of the City or the successor to the duties
of that office.
Moody's means Moody's Investors Service Inc., a corporation duly organized and existing
under and by virtue of the laws of the State of Delaware, or its successor.
MSRB means the Municipal Securities Rulemaking Board or any successor to its functions.
Net Revenue means the Gross Revenue less the Costs of Maintenance and Operation.
Official Statement means the disclosure document prepared and delivered in connection
with the issuance of the Bonds.
Outstanding Parity Bond Ordinances mean the ordinances authorizing the issuance of the
Outstanding Parity Bonds identified in the recitals to this ordinance.
Outstanding Parity Bonds means the parity water and wastewater utility revenue bonds of
the City identified in the recitals to this ordinance.
Parity Bonds means the Outstanding Parity Bonds, the Bonds and any Future Parity Bonds.
Permitted Investments means investments that are legal investments for the City at the
time of such investment; provided, however, the City shall comply with the definitions of
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"Permitted Investments" as provided in the Outstanding Parity Bond Ordinances so long as the
Outstanding Parity Bonds remain outstanding.
Professional Utility Consultant means the independent person(s) or firm(s) selected by the
City having a favorable reputation for skill and experience with water, wastewater and storm water
systems of comparable size and character to the System in such areas as are relevant to the purposes
for which they are retained.
Qualified Insurance means any unconditional municipal bond insurance policy or surety
bond issued by any insurance company licensed to conduct an insurance business in any state of
the United States or by a service corporation acting on behalf of one or more such insurance
companies, which insurance company or service corporation, as of the time of issuance of such
policy or surety bond, is then rated in one of the two highest rating categories by Moody's, S&P
or any other rating agency then maintaining a rating on the Bonds.
Qualified Letter of Credit means any irrevocable letter of credit issued by a bank for the
account of the City and for the benefit of the owners of Parity Bonds, provided that such bank
maintains an office, agency or branch in the United States, and provided further, that, as of the
time of issuance of such letter of credit, such bank is currently rated in one of the two highest rating
categories by either Moody's, S&P or any other rating agency then maintaining a rating on the
Bonds.
Rate Stabilization Fund means the fund of that name created pursuant to Section 13 of
Ordinance No. 2843.
Record Date means the close of business for the Bond Registrar that is 15 days preceding
any interest and/or principal payment or redemption date.
Refunded Bonds mean all or a portion of the Refunding Candidates as designated by a
Designated Representative for refunding pursuant to this ordinance.
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Refunding Account means the account by that name established pursuant to Section 8 of
this ordinance.
Loans.
Refunding Candidates mean the outstanding 2009 Bonds, 2010 Bonds and Junior Lien
Registered Owner means any person named as a registered owner of the Bonds in the Bond
Register. So long as the Bonds are held in book entry only form, DTC or its nominee shall be
deemed to be the sole Registered Owner.
Reserve Account means the account of that name in the Bond Account created pursuant to
Ordinance No. 2843.
Reserve Account Requirement means, as of any date of calculation, the lesser of maximum
Annual Debt Service on the outstanding Parity Bonds or 125% of Average Annual Debt Service
on the outstanding Parity Bonds; provided, that at the time of issuance of any series of Parity
Bonds, the portion of the Reserve Account Requirement allocable to a series of Parity Bonds will
not exceed 10% of the initial principal amount of that series of Parity Bonds.
Following the full redemption, refunding or defeasance of all of the Outstanding Parity
Bonds, the Reserve Account Requirement shall be amended to read "means with respect to the
Bonds, the amount determined by the City, which may be zero, and with respect to any Future
Parity Bonds, the amount set forth in the ordinance authorizing the Future Parity Bonds if such
Parity Bonds are secured by the Reserve Account or another reserve fund or account."
Revenue Fund means the special fund of the City known as the "City of Port Angeles
Water and Wastewater Utility Revenue Fund" created by the City pursuant to Section 2 of
Ordinance No. 2843.
Rule means the Commission's Rule 15c2-12 under the Securities Exchange Act of 1934,
as the same may be amended from time to time.
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Sale Document means a Bond Purchase Contract or Certificate of Award, if any, executed
by a Designated Representative in connection with the sale of the Bonds pursuant to this ordinance.
Serial Bonds means Parity Bonds other than Term Bonds.
Sinking Fund Requirement means, for any Fiscal Year or calendar year, the principal
amount of Term Bonds required to be purchased, redeemed or paid at maturity in such year as
established by the ordinance of the City authorizing the issuance of such Term Bonds.
State means the State of Washington.
S&P means S&P Global Ratings, except that if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating agency, then the term S&P
shall be deemed to refer to any other nationally recognized securities rating agency (other than
Moody's) selected by the Authorized Representative of the City.
System means the City's combined water supply and distribution utility, sanitary sewage
collection and wastewater treatment utility, and storm water utility as the same now exists and as
it may hereafter be added to, improved and extended for as long as any of the Bonds are
outstanding.
Term Bonds mean Parity Bonds of any principal maturity that are subject to mandatory
redemption and for which mandatory sinking fund payments are required, including the Bonds
identified as such in Section 5(b) of this ordinance.
2009 Bonds mean the City's Water and Wastewater Utility Revenue Refunding Bonds,
2009, issued in the original principal amount of $7,590,000 under date of September 29, 2009,
pursuant to Ordinance No. 3375 of the City.
2010 Bonds mean the City's Water and Wastewater Utility Revenue Bonds, 2010, issued
in the original principal amount of $5,695,000 under the date of August 17, 2010, pursuant to
Ordinance No. 3407 of the City.
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Underwriter means any underwriter for the Bonds, in the case of a negotiated sale, or initial
purchaser or purchasers for the Bonds, in the case of a competitive sale, as selected by a Designated
Representative pursuant to this ordinance.
(b) Interpretation. In this ordinance, unless the context otherwise requires:
(1) The terms "hereby," "hereof," "hereto," "herein," "hereunder" and any
similar terms, as used in this ordinance, refer to this ordinance as a whole and not to any particular
article, section, subdivision or clause hereof, and the term "hereafter" shall mean after,
and the term "heretofore" shall mean before, the date of this ordinance;
(2) Words of any gender shall mean and include correlative words of all
genders, and words importing the singular number shall mean and include the plural number and
vice versa;
(3) Words importing persons shall include firms, associations, partnerships
(including limited partnerships), trusts, corporations and other legal entities, including public
bodies, as well as natural persons;
(4) Any headings preceding the text of the several articles and sections of this
ordinance, and any table of contents or marginal notes appended to copies hereof, shall be solely
for convenience of reference and shall not constitute a part of this ordinance, nor shall they affect
its meaning, construction or effect; and
(5) All references herein to "articles," "sections" and other subdivisions or
clauses are to the corresponding articles, sections, subdivisions or clauses hereof.
Section 2. Compliance with Parity Conditions. The Outstanding Parity Bond
Ordinances provide that the City may issue Future Parity Bonds upon compliance with certain
conditions. The Council hereby finds, as required by those provisions of the Outstanding Parity
Bond Ordinances, as follows:
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First, at the time of issuance of the Bonds the City shall have on file a certificate satisfying
the parity requirements of the Outstanding Parity Bond Ordinances;
Second, that at the time of the passage of this ordinance and at the time of the issuance of
the Bonds there is not nor will there be any deficiency in the Bond Account or the Reserve
Account; and
Third, this ordinance provides that (i) the principal of and interest on the Bonds are payable
out of the Bond Account, (ii) payments will be made into the Bond Account to satisfy the Sinking
Fund Requirements on any Term Bonds, and (iii) proceeds of the Bonds or other funds of the City
legally available therefor will be deposited, if necessary, into the Reserve Account in an amount
sufficient to satisfy the Reserve Account Requirement for the Bonds, all as required by the
Outstanding Parity Bond Ordinances.
The parity conditions contained in the Outstanding Parity Bond Ordinances having been
complied with or assured, the payments required in this ordinance to be made out of the Revenue
Fund into the Bond Account and the accounts held therein to pay and secure the payment of the
principal of and interest on the Bonds shall constitute a lien and charge upon the money in such
Revenue Fund equal in rank with the lien and charge thereon for the payments required to be made
into the Bond Account to pay and secure the payment of the principal of and interest on the
Outstanding Parity Bonds.
Section 3. Authorization and Description of Bonds. For the purpose of defeasing
and/or refunding the Refunded Bonds, funding the Reserve Account, if necessary, and paying costs
of issuance of the Bonds, the City shall issue and sell its water and wastewater utility revenue
refunding bonds in the aggregate principal amount of not to exceed $29,000,000 (the "Bonds").
The Bonds shall be designated, "City of Port Angeles, Washington, Water and Wastewater
Utility Revenue Refunding Bonds, 2020"; with any series or other designation as determined by a
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Designated Representative, shall be dated as of their date of delivery; shall be fully registered as
to both principal and interest; shall be in the denomination of $5,000 each, or any integral multiple
thereof, within a maturity; shall be numbered separately in such manner and with any additional
designation as the Bond Registrar deems necessary for purposes of identification; and shall bear
interest from their date payable on the first days of each November and May, commencing as
provided in the Sale Document; and shall mature on the dates and in the principal amounts set
forth in the Sale Document and as approved by a Designated Representative pursuant to
Section 17.
The Bonds shall be obligations only of the Bond Account and the accounts held therein
and shall be payable and secured as provided herein. The Bonds do not constitute an indebtedness
or general obligation of the City within the meaning of the constitutional provisions and limitations
of the State.
Section 4. Registration, Exchange and Payments.
(a) Bond Registrar/Bond Register. The City hereby specifies and adopts the system of
registration approved by the Washington State Finance Committee from time to time through the
appointment of a state fiscal agent. The City shall cause a bond register to be maintained by the
Bond Registrar. So long as any Bonds remain outstanding, the Bond Registrar shall make all
necessary provisions to permit the exchange or registration or transfer of Bonds at its designated
office. The Bond Registrar may be removed at any time at the option of the Finance Director upon
prior notice to the Bond Registrar and a successor Bond Registrar appointed by the Finance
Director. No resignation or removal of the Bond Registrar shall be effective until a successor shall
have been appointed and until the successor Bond Registrar shall have accepted the duties of the
Bond Registrar hereunder. The Bond Registrar is authorized, on behalf of the City, to authenticate
and deliver Bonds transferred or exchanged in accordance with the provisions of such Bonds and
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this ordinance and to carry out all of the Bond Registrar's powers and duties under this ordinance.
The Bond Registrar shall be responsible for its representations contained in the certificate of
authentication of the Bonds.
(b) Registered Ownership. The City and the Bond Registrar, each in its discretion, may
deem and treat the Registered Owner of each Bond as the absolute owner thereof for all purposes
(except as otherwise provided in this ordinance or in the Continuing Disclosure Certificate), and
neither the City nor the Bond Registrar shall be affected by any notice to the contrary. Payment of
any such Bond shall be made only as described below, but such Bond may be transferred as
provided herein. All such payments made as described below shall be valid and shall satisfy and
discharge the liability of the City upon such Bond to the extent of the amount or amounts so paid.
(c) DTC Acceptance/Letters of Representations. The Bonds initially shall be held in
fully immobilized form by DTC acting as depository. The City has executed and delivered to DTC
the Letter of Representations. Neither the City nor the Bond Registrar shall have any responsibility
or obligation to DTC participants or the persons for whom they act as nominees (or any successor
depository) with respect to the Bonds in respect of the accuracy of any records maintained by DTC
(or any successor depository) or any DTC participant, the payment by DTC (or any successor
depository) or any DTC participant of any amount in respect of the principal of or interest on
Bonds, any notice which is permitted or required to be given to Registered Owners under this
ordinance (except such notices as shall be required to be given by the City to the Bond Registrar
or to DTC (or any successor depository)), or any consent given or other action taken by DTC (or
any successor depository) as the Registered Owner. For so long as any Bonds are held by a
depository, DTC or its successor depository or its nominee shall be deemed to be the Registered
Owner for all purposes hereunder, and all references herein to the Registered Owners shall mean
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DTC (or any successor depository) or its nominee and shall not mean the owners of any beneficial
interest in such Bonds.
(d) Use ofDepositoiv.
(1) The Bonds shall be registered initially in the name of "Cede & Co.", as
nominee of DTC, with one Bond maturing on each of the maturity dates for the Bonds in a
denomination corresponding to the total principal therein designated to mature on such date.
Registered ownership of such immobilized Bonds, or any portions thereof, may not thereafter be
transferred except (A) to any successor of DTC or its nominee, provided that any such successor
shall be qualified under any applicable laws to provide the service proposed to be provided by it;
(B) to any substitute depository appointed by the Finance Director pursuant to subsection (2)
below or such substitute depository's successor; or (C) to any person as provided in subsection (4)
below.
(2) Upon the resignation of DTC or its successor (or any substitute depository
or its successor) from its functions as depository or a determination by the Finance Director to
discontinue the system of book entry transfers through DTC or its successor (or any substitute
depository or its successor), the Finance Director may hereafter appoint a substitute depository.
Any such substitute depository shall be qualified under any applicable laws to provide the services
proposed to be provided by it.
(3) In the case of any transfer pursuant to clause (A) or (B) of subsection (1)
above, the Bond Registrar shall, upon receipt of all outstanding Bonds, together with a written
request on behalf of the Finance Director, issue a single new Bond for each maturity then
outstanding, registered in the name of such successor or such substitute depository, or their
nominees, as the case may be, all as specified in such written request of the Finance Director.
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(4) In the event that (A) DTC or its successor (or substitute depository or its
successor) resigns from its functions as depository, and no substitute depository can be obtained,
or (B) the Finance Director determines that it is in the best interest of the Beneficial Owners of the
Bonds that such owners be able to obtain physical bond certificates, the ownership of such Bonds
may then be transferred to any person or entity as herein provided, and shall no longer be held by
a depository. The Finance Director shall deliver a written request to the Bond Registrar, together
with a supply of physical Bonds, to issue Bonds as herein provided in any authorized
denomination. Upon receipt by the Bond Registrar of all then outstanding Bonds together with a
written request on behalf of the Finance Director to the Bond Registrar, new Bonds shall be issued
in the appropriate denominations and registered in the names of such persons as are requested in
such written request.
(e) Registration of Transfer of Ownership or Exchange; Change in Denominations.
The transfer of any Bond may be registered and Bonds may be exchanged, but no transfer of any
such Bond shall be valid unless it is surrendered to the Bond Registrar with the assignment form
appearing on such Bond duly executed by the Registered Owner or such Registered Owner's duly
authorized agent in a manner satisfactory to the Bond Registrar. Upon such surrender, the Bond
Registrar shall cancel the surrendered Bond and shall authenticate and deliver, without charge to
the Registered Owner or transferee therefor, a new Bond(s) (or Bonds at the option of the new
Registered Owner) of the same date, series, maturity and interest rate and for the same aggregate
principal amount in any authorized denomination, naming as Registered Owner the person or
persons listed as the assignee on the assignment form appearing on the surrendered Bond, in
exchange for such surrendered and cancelled Bond. Any Bond may be surrendered to the Bond
Registrar and exchanged, without charge, for an equal aggregate principal amount of Bonds of the
same date, series, maturity, and interest rate, in any authorized denomination. The Bond Registrar
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shall not be obligated to register the transfer of or to exchange any Bond during the 15 days
preceding any principal payment or redemption date.
(f) Bond Registrar's Ownership of Bonds. The Bond Registrar may become the
Registered Owner of any Bond with the same rights it would have if it were not the Bond Registrar,
and to the extent permitted by law, may act as depository for and permit any of its officers or
directors to act as a member of, or in any other capacity with respect to, any committee formed to
protect the right of the Registered Owners or Beneficial Owners of Bonds.
(g) Place and Medium of Payment. Both principal of and interest on the Bonds shall be
payable in lawful money of the United States of America. Interest on the Bonds shall be calculated
on the basis of a year of 360 days and twelve 30-day months. For so long as all Bonds are held by
a depository, payments of principal thereof and interest thereon shall be made as provided in
accordance with the operational arrangements of DTC referred to in the Letter of Representations.
In the event that the Bonds are no longer held by a depository, interest on the Bonds shall be paid
by check or draft mailed to the Registered Owners at the addresses for such Registered Owners
appearing on the Bond Register on the Record Date, or upon the written request of a Registered
Owner of more than $1,000,000 of Bonds (received by the Bond Registrar at least by the Record
Date), such payment shall be made by the Bond Registrar by wire transfer to the account within
the United States designated by the Registered Owner. Principal of the Bonds shall be payable
upon presentation and surrender of such Bonds by the Registered Owners at the designated office
of the Bond Registrar.
If any Bond shall be duly presented for payment and funds have not been duly provided by
the City on such applicable date, then interest shall continue to accrue thereafter on the unpaid
principal thereof at the rate stated on such Bonds until it is paid.
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Section 5. Redemption, Purchase of Bonds.
(a) Mandatory Redemption of Term Bonds and Optional Redemption, if any. The
Bonds shall be subject to optional redemption on the dates, at the prices and under the terms set
forth in the Sale Document approved by a Designated Representative pursuant to Section 17. The
Bonds shall be subject to mandatory redemption to the extent, if any, set forth in the Sale Document
and as approved by a Designated Representative pursuant to Section 17.
(b) Purchase of Bonds. The City reserves the right to use at any time any surplus
Revenue of the System, or other available funds, to purchase for retirement any of the Bonds at
any price deemed reasonable by the City.
(c) Selection of Bonds for Redemption. If the Bonds are held in book -entry only form,
the selection of particular Bonds within a maturity to be redeemed shall be made in accordance
with the operational arrangements then in effect at DTC. If the Bonds are no longer held by a
depository, the selection of such Bonds to be redeemed and the surrender and reissuance thereof,
as applicable, shall be made as provided in the following provisions of this subsection (c) or as
otherwise provided in the applicable Sale Document. If the City redeems at any one time fewer
than all of the Bonds having the same maturity date, the particular Bonds or portions of Bonds of
such maturity to be redeemed shall be selected by lot (or in such manner determined by the Bond
Registrar) in increments of $5,000. In the case of a Bond of a denomination greater than $5,000,
the City and the Bond Registrar shall treat each Bond as representing such number of separate
Bonds each of the denomination of $5,000 as is obtained by dividing the actual principal amount
of such Bonds of such series by $5,000. In the event that only a portion of the principal sum of a
Bond is redeemed, upon surrender of such Bond at the principal office of the Bond Registrar there
shall be issued to the Registered Owner, without charge therefor, for the then unredeemed balance
of the principal sum thereof, at the option of the Registered Owner, a Bond or Bonds of like
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maturity, series, and interest rate in any of the denominations herein authorized. To the extent the
City optionally redeems or purchases for retirement any Term Bond, any remaining mandatory
sinking fund payment or mandatory prior redemption requirements for such Term Bond shall be
reduced on a pro rata basis.
(d) Notice ofRedemption or Prepayment.
(1) Official Notice. For so long as the Bonds are held by a depository, notice of
redemption (which notice may be conditional) shall be given in accordance with the operational
arrangements of DTC as then in effect, and neither the City nor the Bond Registrar will provide
any notice of redemption to any Beneficial Owners. Thereafter (if the Bonds are no longer held in
uncertificated form), notice of redemption shall be given in the manner hereinafter provided.
Unless waived by any owner of Bonds to be redeemed, official notice of any such redemption shall
be given by the Bond Registrar on behalf of the City by mailing a copy of an official redemption
notice by first class mail at least 20 days and not more than 60 days prior to the date fixed for
redemption to the Registered Owner of the Bond or Bonds to be redeemed at the address shown
on the Bond Register or at such other address as is furnished in writing by such Registered Owner
to the Bond Registrar.
All official notices of redemption shall be dated and shall state:
(A) the redemption date,
(B) the redemption price,
(C) if fewer than all outstanding Bonds are to be redeemed, the
identification by maturity (and, in the case of partial redemption, the respective principal amounts)
of the Bonds to be redeemed,
(D) any conditions to redemption,
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(E) that (unless such notice is conditional) on the redemption date the
redemption price will become due and payable upon each such Bond or portion thereof called for
redemption, and that interest thereon shall cease to accrue from and after said date, and
(F) the place where such Bonds are to be surrendered for payment of the
redemption price, which place of payment shall be the designated office of the Bond Registrar.
On or prior to any redemption date, unless any condition to such redemption has not been
satisfied or waived or notice of such redemption has been rescinded, the City shall deposit with
the Bond Registrar an amount of money sufficient to pay the redemption price of all the Bonds or
portions of Bonds which are to be redeemed on that date. The City retains the right to rescind any
redemption notice and the related optional redemption of Bonds by giving notice of rescission to
the affected registered owners at any time on or prior to the scheduled redemption date. Any notice
of optional redemption that is so rescinded shall be of no effect, and the Bonds for which the notice
of optional redemption has been rescinded shall remain outstanding.
(2) Effect of Notice, Bonds Due. If an unconditional notice of redemption has
been given, or if the conditions set forth in a conditional notice of redemption have been satisfied
or waived, the Bonds or portions of Bonds to be redeemed shall, on the redemption date, become
due and payable at the redemption price therein specified, and from and after such date such Bonds
or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in
accordance with said notice, such Bonds shall be paid by the Bond Registrar at the redemption
price. Installments of interest due on or prior to the redemption date shall be payable as herein
provided for payment of interest. All Bonds which have been redeemed shall be canceled by the
Bond Registrar and shall not be reissued.
(3) Additional Notice. In addition to the foregoing notice, further notice shall
be given by the City as set out below, but no defect in said further notice nor any failure to give
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all or any portion of such further notice shall in any manner defeat the effectiveness of a call for
redemption if notice thereof is given as above prescribed. Each further notice of redemption given
hereunder shall contain the information required above for an official notice of redemption plus
(A) the CUSIP numbers of all Bonds being redeemed; (B) the date of issue of the Bonds as
originally issued; (C) the rate of interest borne by each Bond being redeemed; (D) the series and
maturity date of each Bond being redeemed; and (E) any other descriptive information needed to
identify accurately the Bonds being redeemed. Each further notice of redemption may be sent at
least 20 days before the redemption date to each parry entitled to receive notice pursuant to the
Continuing Disclosure Certificate and with such additional information as the City shall deem
appropriate, but such mailings shall not be a condition precedent to the redemption of such Bonds.
(4) Amendment of Notice Provisions. The foregoing notice provisions of this
Section 5, including but not limited to the information to be included in redemption notices and
the persons designated to receive notices, may be amended by additions, deletions and changes in
order to maintain compliance with duly promulgated regulations and recommendations regarding
notices of redemption of municipal securities.
Section 6. Form of Bonds. The Bonds shall be in substantially the following form set
forth in Exhibit A, which is incorporated herein by this reference, with such changes thereto as
may be approved by a Designated Representative.
Section 7. Execution of Bonds. The Bonds shall be executed on behalf of the City
with the manual or facsimile signatures of the Mayor and City Clerk of the City and the seal of the
City shall be impressed, imprinted or otherwise reproduced thereon.
Only such Bonds as shall bear thereon a certificate of authentication in the form set forth
in Exhibit A, 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
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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 who shall have executed the Bonds shall cease to be an officer
or officers of the City before the Bonds so signed shall have been authenticated or delivered by
the Bond Registrar, or issued by the City, such Bond 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 be signed and attested on behalf of the City by such persons who at the date of the actual
execution of such Bond, are the proper officers of the City, although at the original date of such
Bond any such person shall not have been such officer of the City.
Section S. Application of Bond Proceeds, Refunding Plan.
(a) Application of Bond Proceeds. Proceeds of the Bonds, net of any underwriter's
discount or compensation, shall be disbursed as follows:
(1) The amount necessary to prepay the outstanding Junior Lien Notes selected
for refunding and designated as Refunded Bonds shall be deposited in the fund or account
designated by the City, disbursed directly to the owner(s) of the Junior Lien Notes, and/or
disbursed to the Escrow Agent under the terms of the Escrow Agreement and used immediately
thereafter to prepay the Junior Lien Notes designated for refunding;
(2) The amount necessary to carry out the plan of refunding for the 2009 Bonds
and 2010 Bonds that are selected for refunding and designated as Refunded Bonds shall be
transferred to the Escrow Agent and used as provided herein and in the Escrow Agreement;
(3) The amount necessary, if any, to satisfy the Reserve Account Requirement
shall be deposited into the Reserve Account; and
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(4) The remaining proceeds of the Bonds shall be transferred to the Escrow
Agent or deposited with the City and used to pay costs of issuance of the Bonds as set forth in the
closing memorandum prepared in connection with the issuance of the Bonds.
Any part of the proceeds of the Bonds remaining after such disbursements are made may
be transferred to the Debt Service Account.
(b) Refunding Plan. For the purpose of realizing a debt service savings and benefiting
the ratepayers of the System, the Council proposes to refund and/or defease the Refunded Bonds
as set forth herein. The Refunded Bonds shall include those Refunding Candidates designated by
a Designated Representative when the Bonds are sold pursuant to the Sale Document.
Proceeds of the Bonds and other available funds of the City, if any, deposited with the
Escrow Agent pursuant to the Escrow Agreement shall be used immediately upon receipt thereof
to prepay the Junior Lien Notes, as applicable, to defease and refund the 2009 Bonds and 2010
Bonds designated as Refunded Bonds as authorized by Ordinance No. 3375 and Ordinance No.
3407, and to pay costs of issuance of the Bonds.
Proceeds of the Bonds deposited with the Escrow Agent shall be held as cash and/or used
to purchase certain Government Obligations (which obligations so purchased, are herein called
"Acquired Obligations"), bearing such interest and maturing as to principal and interest in such
amounts and at such times which, together with any necessary beginning cash balance, will provide
for the payment of interest and principal on the 2009 Bonds and the 2010 Bonds designated as
Refunded Bonds on or prior to the respective first calls dates for such Refunded Bonds.
Such Acquired Obligations shall be purchased at a yield not greater than the yield permitted
by the Code and regulations relating to acquired obligations in connection with refunding bond
issues. Each Designated Representative is authorized to select a bidding agent, if any (and
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authorizes each Designated Representative to appoint any successor or replacement bidding agent)
for the purchase of the Acquired Obligations to be deposited with the Escrow Agent.
(c) Escrow Agent/Escrow Agreement. The City hereby appoints U.S. Bank National
Association, Seattle, Washington, as the Escrow Agent (the "Escrow Agent"). A beginning cash
balance, if any, and any Acquired Obligations shall be deposited irrevocably with the Escrow
Agent as described in the Escrow Agreement. Any proceeds of the Bonds remaining after
acquisition of the Acquired Obligations and provision for the necessary beginning cash balance
shall be utilized to pay expenses of the acquisition and safekeeping of the Acquired Obligations
and expenses of the issuance of the Bonds. In order to carry out the purposes of this section, each
Designated Representative is authorized and directed to execute and deliver to the Escrow Agent,
an Escrow Agreement.
(d) Call for Redemption of Refunded Bonds. The City hereby irrevocably calls the
Refunded Bonds for redemption on their first call dates in accordance with the provisions of the
authorizing ordinances or agreements authorizing the redemption and retirement of the Refunded
Bonds prior to their fixed maturities.
Said defeasance and call for redemption of the Refunded Bonds shall be irrevocable after
the issuance of such Bonds and delivery of the money and/or Acquired Obligations to the Escrow
Agent. The Escrow Agent is hereby authorized and directed to provide for the giving of notices
of the redemption of the Refunded Bonds in accordance with the applicable provisions of their
authorizing ordinances or agreements. The costs of publication of such notices shall be an expense
of the City.
The Escrow Agent is hereby authorized and directed to pay to the Finance Director, or, at
the direction of the Finance Director, to the paying agent for the Refunded Bonds, sums sufficient
to pay, when due, the payments specified in this section. All such sums shall be paid from the
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moneys and Acquired Obligations deposited with the Escrow Agent, and the income therefrom
and proceeds thereof. All such sums so paid to said Finance Director shall be credited to the
Refunding Account. All moneys and Acquired Obligations deposited with the Escrow Agent and
any income therefrom shall be held, invested (but only at the direction of the Finance Director)
and applied in accordance with the provisions of this ordinance and with the laws of the State for
the benefit of the City and owners of the Refunded Bonds. The City will take such actions as are
found necessary to see that all necessary and proper fees, compensation and expenses of the
Escrow Agent for the Refunded Bonds shall be paid when due.
Section 9. Revenue Fund. Pursuant to Ordinance No. 2843, there has been created a
fund of the City known as the "City of Port Angeles Water and Wastewater Utility Revenue Fund,"
which fund is hereby confirmed and continued. The City hereby obligates and binds itself to pay
all Gross Revenue as collected into the Revenue Fund. The money in the Revenue Fund shall be
held separate and apart from all other funds and accounts of the City. The Gross Revenue
deposited in the Revenue Fund shall be used only for the following purposes and in the following
order of priority:
FIRST, to pay the Costs of Maintenance and Operation and to maintain a balance in the
Revenue Fund sufficient in amount to enable the City to continuously meet Costs of Maintenance
and Operation on a current basis;
SECOND, to make all payments required to be made into the Bond Account to pay the
interest on any Parity Bonds;
THIRD, to make all payments required to be made into the Bond Account to pay the
maturing principal of any Serial Bonds and to make all payments required to be made into the
Bond Account to satisfy the Sinking Fund Requirement;
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FOURTH, to make all payments required to be made pursuant to a reimbursement
agreement or agreements (or other equivalent documents, including the payment obligations to the
insurers for the 2009 Bonds and the 2010 Bonds) in connection with Qualified Insurance or a
Qualified Letter of Credit; provided that if there is not sufficient money to make all payments
under reimbursement agreements the payments will be made on a pro rats basis;
FIFTH, to make all payments required to be made into the Reserve Account to secure the
payment of the principal of and interest on outstanding Parity Bonds secured by the Reserve
Account and, following the full redemption, refunding or defeasance of all of the Outstanding
Parity Bonds, into any other reserve account created to secure the payment of the principal of and
interest on Parity Bonds, an amount necessary to provide for or maintain the Reserve Account
Requirement applicable to such Parity Bonds;
SIXTH, to make all payments required to be made into any revenue bond redemption fund,
revenue warrant redemption fund, debt service account, reserve account or bond retirement
account created to pay and secure the payment of the principal of and interest on any revenue
bonds, or revenue warrants or other revenue obligations of the City, including the State Loans,
having a lien upon Gross Revenue junior and inferior to the lien thereon for the payment of the
principal of and interest on the Parity Bonds; and
SEVENTH, to retire by redemption or purchase in the open market any outstanding water
and wastewater utility revenue bonds, warrants or obligations of the System, to make necessary
additions, betterments, improvements and repairs to or extensions and replacements of the System,
to make deposits into the Rate Stabilization Fund, or for any other lawful City purposes.
Section 10. Rate Stabilization Fund. Pursuant to Ordinance No. 2843, a special fund of
the City designated the "Water and Wastewater Rate Stabilization Fund" (the "Rate Stabilization
Fund") has been established in anticipation of future increases in revenue requirements of the
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System, which fund is hereby confirmed and continued. The City may from time to time
appropriate or budget amounts in the Revenue Fund for deposit in the Rate Stabilization Fund and
may from time to time withdraw amounts therefrom for deposit in the Revenue Fund to prevent or
mitigate water and wastewater rate increases or for other lawful purposes of the City related to the
System. Such deposits or withdrawals may be made up to and including the date ninety (90) days
after the end of the fiscal year for which the deposit or withdrawal will be effective.
Section 11. Bond Account. Pursuant to Ordinance No. 2843, there has been created a
fund of the City known as the "1994 Water and Wastewater Utility Revenue Bond Fund"
(the "Bond Account"), which fund and the accounts therein are hereby confirmed and continued.
The Bond Account is to be drawn upon for the sole purpose of paying the principal of, premium if
any, and interest on any Parity Bonds. The money in the Bond Account shall be kept separate and
apart from all other funds and accounts of the City. All funds in the Bond Account are held in
trust for the benefit of the owners of all Parity Bonds at the time outstanding equally and ratably
and without preference or distinction as between Parity Bonds of different series and maturities.
(a) Debt Service Account. A special account known as the Debt Service Account has
been created in the Bond Account for the purpose of paying the principal of, premium, if any, and
interest on the Parity Bonds.
As long as any of the Bonds remain outstanding, the City hereby irrevocably obligates and
binds itself to set aside and pay from the Revenue Fund into the Debt Service Account, on or before
the date due, those amounts necessary, together with Gross Revenue collected and deposited and
such other money as is on hand and available therefor in the Debt Service Account, to pay the
interest or principal and interest next coming due on the outstanding Bonds.
The City covenants and agrees that if it issues any Future Parity Bonds that are Term
Bonds, it will provide in each ordinance authorizing the issuance of the same for annual payments
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to be made from the Revenue Fund into the Debt Service Account sufficient, together with Gross
Revenue collected and deposited and such other money as is on hand and available therefor in such
account, to amortize the principal of future Parity Bonds that are Term Bonds on or before the
maturity date thereof.
(b) Reserve Account. The Reserve Account has been created in the Bond Account as
a common debt service reserve account and, except as provided below, shall be used solely for the
purpose of securing the payment of the principal of and the interest on all Parity Bonds secured by
the Reserve Account.
The Bonds shall initially be secured by the Reserve Account. The City hereby covenants
and agrees that it will satisfy the Reserve Account Requirement for the Bonds by depositing into
the Reserve Account, from proceeds of the Bonds or other available funds, an amount that will be
sufficient to satisfy the Reserve Account Requirement with respect to the Bonds.
Following the full redemption, refunding or defeasance of all of the Outstanding Parity
Bonds, the City may, in its sole discretion, (i) reduce the Reserve Account Requirement for the
Bonds to zero, and from and after such time, the Bonds shall no longer be secured by the Reserve
Account, and (ii) create separate reserve funds and/or accounts and establish separate Reserve
Account Requirements, if any, to secure the payment of the principal of and interest on Future
Parity Bonds. Terms related to any such reserve funds and/or accounts shall be provided for in the
ordinance authorizing the issuance of such Future Parity Bonds.
The City further covenants and agrees that if it issues any Future Parity Bonds secured by
the Reserve Account it will provide in each ordinance authorizing the issuance of those Future
Parity Bonds that on or prior to the date of issuance of such Future Parity Bonds money will be
deposited into the Reserve Account, from proceeds of such bonds or other funds available therefor,
so that the total amount of money in the Reserve Account will at least equal the Reserve Account
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Requirement. The City may substitute Qualified Insurance or a Qualified Letter of Credit for
amounts required to be deposited into the Reserve Account. Such Qualified Letter of Credit or
Qualified Insurance shall not be cancellable on less than five years notice. In the event of any
cancellation, the Reserve Account shall be funded in accordance with the provisions of this section
providing for payment in the event of a deficiency therein, as if the Parity Bonds that remain
outstanding had been issued on the date of such notice of cancellation.
The City further covenants and agrees that when the required deposits have been made into
the Reserve Account, it will at all times maintain therein an amount at least equal to the Reserve
Account Requirement, as redetermined in each calendar year with respect to the bonds secured by
such Reserve Account. Whenever there is a sufficient amount in the Bond Account, including all
accounts therein, to pay the principal of, premium, if any, and interest on all outstanding Parity
Bonds, the money in the Reserve Account may be used to pay the principal of, premium, if any,
and interest on the Parity Bonds secured thereby. Money in the Reserve Account may also be
withdrawn to redeem and retire, and to pay the premium, if any, and interest due to such date of
redemption, on the outstanding Parity Bonds secured by such Reserve Account, as long as the
money remaining on deposit in such Reserve Account is at least equal to the Reserve Account
Requirement determined with respect to the Parity Bonds secured by the Reserve Account then
outstanding.
So long as the Bonds are secured by the Reserve Account, if the Bonds outstanding are
ever refunded, the money set aside in the Reserve Account to secure the payment thereof may be
used to retire Bonds or may be transferred to any other reserve account that may be created to
secure the payment of any bonds issued to refund the Bonds.
If there is a deficiency in the Debt Service Account to meet maturing installments of either
interest on or principal of and interest on the outstanding Parity Bonds payable out of such Reserve
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Account, such deficiency shall be made up from the Reserve Account by the withdrawal of money
therefrom and by the sale or redemption of obligations held in the Reserve Account, if necessary,
in such amounts as will provide cash in the Reserve Account sufficient to make up any such
deficiency, and if a deficiency still exists immediately prior to an interest payment date and after
the withdrawal of cash, the City shall then draw from any Qualified Letter of Credit, Qualified
Insurance, or other equivalent credit facility in sufficient amount to make up the deficiency. Such
draw shall be made at such times and under such conditions as the agreement for such Qualified
Letter of Credit or such Qualified Insurance shall provide. If more than one Qualified Letter of
Credit or Qualified Insurance is available, draws shall be made ratably thereon to make up the
deficiency. Any deficiency created in the Reserve Account by reason of any such withdrawal shall
then be made up from money in the Revenue Fund first available after making the payments
required to be made under paragraphs "FIRST" through "FOURTH" of Section 9 of this ordinance.
(c) Lien of Bond Account. The Bonds, together with the interest thereon, shall be
payable from Gross Revenue, and such Gross Revenue is hereby pledged and set aside out of the
Revenue Fund into the Bond Account. Said amounts so pledged are hereby declared to be a lien
and charge upon Gross Revenue and the money in the Revenue Fund equal to the lien and charge
thereon to secure and pay the principal of and interest on the Outstanding Parity Bonds, the Bonds
and any Future Parity Bonds and superior to all other charges of any kind or nature, except the
Costs of Maintenance and Operation.
(d) Investment of Money in Bond Account. All money in the Debt Service Account or
Reserve Account may be kept in cash or invested in Permitted Investments maturing not later than
the last maturity of the Bonds outstanding at the time of such purchase. Interest earned on or
profits made from the sale of such investments shall be deposited in and become a part of the
Revenue Fund.
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Section 12. Adequacy of Revenues. The Council hereby declares that in fixing the
amounts to be paid into the Bond Account as hereinbefore provided it has exercised due regard for
the Costs of Maintenance and Operation and has not obligated the City to set aside and pay into
the Bond Account a greater amount of money in the Revenue Fund than in its judgment will be
available over and above such Costs of Maintenance and Operation.
Section 13. Covenants and Agreements. The City hereby covenants with the owner of
each of the Bonds for as long as any of the same remain outstanding as follows:
(a) Rates and Charges. The City will establish, maintain and collect lawful rates and
charges for the use of the services and facilities of the System, and will adjust such rates and
charges from time to time so that:
(1) Gross Revenue will at all times be sufficient (a) to pay all Costs of
Maintenance and Operations and to pay all taxes, assessments or other governmental charges
lawfully imposed on the System or the revenue therefrom or payments in lieu thereof and any and
all other amounts that the City may now be and hereafter become obligated to pay from Gross
Revenue by law or contract, and (b) together with Assessments actually collected, to pay the
principal of and interest on all outstanding Parity Bonds as and when the same become due and
payable, to make all payments required to be made into the Bond Account to satisfy the Sinking
Fund Requirement, and to make when due all payments required to be made into the Reserve
Account.
(2) The Net Revenue in each Fiscal Year will equal at least 1.25 times Annual
Debt Service for such year (after deducting Assessments actually collected for such year). For the
purpose of meeting the requirement of this paragraph there may be added to Net Revenue for any
Fiscal Year any amount withdrawn from the Rate Stabilization Fund and deposited in the Revenue
Fund. There shall be subtracted from Net Revenue for any Fiscal Year any amounts in such year
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withdrawn from the Revenue Fund and deposited into the Rate Stabilization Fund in such Fiscal
Year. Annual Debt Service for purposes of this rate covenant shall be adjusted to reflect any Debt
Service Offset.
(b) Maintenance of System. The City will at all times keep and maintain the System in
good repair, working order and condition, and will at all times operate the same and the business
in connection therewith in an efficient manner and at a reasonable cost.
(c) Sale or Disposition of the System. The City will not sell or otherwise dispose of
the System in its entirety unless simultaneously with such sale or other disposition, the City
provides forpayment into the Bond Account of cash or Government Obligations sufficient together
with interest to be earned thereon to pay the principal of and interest on the then outstanding Parity
Bonds, nor will the City sell or otherwise dispose of any part of the useful operating properties of
the System unless the City receives the prior written consent of the municipal bond insurer for the
2009 Bonds (so long as the 2009 Bonds are outstanding) and the municipal bond insurer for the
2010 Bonds (so long as the 2010 Bonds are outstanding) and replaces such facilities or provides
for payment into the Bond Account of the greater of:
(1) An amount that will be in the same proportion to the net amount of Parity
Bonds then outstanding (defined as the total amount of the Parity Bonds less the amount of cash
and investments in the Bond Account and accounts therein) that the Net Revenue from the portion
of the System sold or disposed of for the preceding year bears to the total Net Revenue for such
period; or
(2) An amount that will be in the same proportion to the net principal amount
of Parity Bonds then outstanding that the book value of the part of the System sold or disposed of
bears to the book value of the entire System immediately prior to such sale or disposition.
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The proceeds of any such sale or disposition of a portion of the properties of the System
(to the extent required above) shall be paid into the Bond Account.
Notwithstanding any other provision of this subsection, the City may sell or otherwise
dispose of any of the works, plant, properties and facilities of the System or any real or personal
property comprising a part of the same with a value less than 2% of the net utility plant of the
System or that has become unserviceable, inadequate, obsolete or unfit to be used in the operation
of the System, or no longer necessary, material to or useful in such operation, without making any
deposit into the Bond Account.
(d) Collection of Assessments. The City will promptly collect all Assessments levied
in any utility local improvement district now or hereafter created to secure the payment of the
principal of and interest on any Parity Bonds and shall pay the same into the Bond Account without
allocation of such Assessments to any particular series of Parity Bonds. It is hereby provided
further, however, that nothing in this ordinance or in this subsection shall be construed to prohibit
the City from issuing revenue bonds having a lien on Gross Revenue junior to the lien on such
revenue for the payment of the principal of and interest on Parity Bonds and pledging as security
for the payments of such junior lien bonds assessments levied in any utility local improvement
district that may have been created to pay part or all the cost of improvements to the System for
which such junior lien revenue bonds were specifically issued; provided, however, that the City
may not agree to acceleration as a remedy with respect to any bonds or other obligations having a
lien on Gross Revenue junior to the lien thereon of any Parity Bonds.
(e) Books and Accounts. The City will maintain complete books and records relating
to the operation of the System and its financial affairs, and will cause such books and records to
be audited annually, and cause to be prepared an annual financial and operating statement, which
statement will be mailed to any owner of Parity Bonds upon request.
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(f) Insurance. The City will carry fire and extended coverage insurance on the System
as is ordinarily carried on the property of similar public utilities by other municipal corporations
engaged in the operation of the same, to the full insurable value thereof, and will also carry
adequate public liability insurance and other kinds of insurance as under good practices are
ordinarily carried on the properties of similar public utilities by private companies engaged in the
operation of the same; provided, however, that the City may, if the Council deems necessary and
advisable, institute or continue a self-insurance program with respect to any or all of the
aforementioned risks. The premiums paid for all such insurance shall be regarded and paid as a
Cost of Maintenance and Operation.
(g) Delinquencies. The City will promptly collect all service charges and Assessments,
determine in a timely manner all delinquencies, and take all necessary legal action to enforce
collection of such delinquencies.
(h) No Free Service. Except as permitted by law, the City will not furnish any service
of the System to any customer whatsoever free of charge.
Section 14. Tax Covenants. The City will take all actions necessary to assure the
exclusion of interest on the Bonds from the gross income of the owners of the Bonds to the same
extent as such interest is permitted to be excluded from gross income under the Code as in effect
on the date of issuance of the Bonds, including but not limited to the following:
(a) Private Activity Bond Limitation. The City will assure that the proceeds of the
Bonds are not so used as to cause the Bonds to satisfy the private business tests of Section 141(b)
of the Code or the private loan financing test of Section 141(c) of the Code.
(b) Limitations on Disposition of Project. The City will not sell or otherwise transfer
or dispose of (i) any personal property components of the projects financed or refinanced with
proceeds of Bonds other than in the ordinary course of an established government program under
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Treasury Regulation Section 1.141-2(d)(4) or (ii) any real property components of the projects
financed or refinanced with proceeds of Bonds, unless it has received an opinion of nationally
recognized bond counsel to the effect that such disposition will not adversely affect the treatment
of interest on the Bonds as excludable from gross income for federal income tax purposes.
(c) Federal Guarantee Prohibition. The City will not take any action or permit to suffer
any action to be taken if the result of such action would be to cause any of the Bonds to be
"federally guaranteed" within the meaning of Section 149(b) of the Code.
(d) Rebate Requireinent. The City will take any and all actions necessary to assure
compliance with Section 148(f) of the Code, relating to the rebate of excess investment earnings,
if any, to the federal government, to the extent that such section is applicable to the Bonds.
(e) No Arbitrage. The City will not take, or permit or suffer to be taken, any action
with respect to the proceeds of the Bonds which, if such action had been reasonably expected to
have been taken, or had been deliberately and intentionally taken, on the date of issuance of the
Bonds would have caused the Bonds to be "arbitrage bonds" within the meaning of Section 148
of the Code.
(f) Registration Covenant. The City will maintain a system for recording the
ownership of each Bond that complies with the provisions of Section 149 of the Code until all
Bonds have been surrendered and canceled.
(g) Record Retention. The City will retain its records of all accounting and monitoring
it carries out with respect to the Bonds for at least three years after the Bonds mature or are
redeemed (whichever is earlier); however, if the Bonds are redeemed and refunded, the City will
retain its records of accounting and monitoring at least three years after the earlier of the maturity
or redemption of the obligations that refunded the Bonds.
(h) Compliance with Federal Tax Certificate. The City will comply with the provisions
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of the Federal Tax Certificate with respect to the Bonds, which are incorporated herein as if fully
set forth herein.
(1) Bank Qualification. In the Federal Tax Certificate executed in connection with the
issuance of the Bonds, the City may designate such Bonds as "qualified tax-exempt obligations"
under Section 265(b)(3) of the Code for investment by financial institutions.
The covenants of this section will survive payment in full or defeasance of the Bonds.
Section 15. Defeasance. In the event that the City, to effect the payment, retirement or
redemption of any Bond, sets aside in the Debt Service Account or in another special account, cash
or noncallable Government Obligations, or any combination of cash and/or noncallable
Government Obligations, in amounts and maturities which, together with the known earned
income therefrom, are sufficient to redeem or pay and retire such Bond in accordance with its
terms and to pay when due the interest and redemption premium, if any, thereon, and such cash
and/or noncallable Government Obligations are irrevocably set aside and pledged for such
purpose, then no further payments need be made into the Debt Service Account for the payment
of the principal of and interest on such Bond. The owner of a Bond so provided for shall cease to
be entitled to any lien, benefit or security of this ordinance except the right to receive payment of
principal, premium, if any, and interest from the Debt Service Account or such special account,
and such Bond shall be deemed to be not outstanding under this ordinance.
In the event that the refunding plan provides that the Bonds being refunded or the refunding
bonds to be issued be secured by money and/or government obligations pending the prior
redemption of those Bonds being refunded and if such refunding plan also provides that certain
money and/or Government Obligations are pledged irrevocably for the prior redemption of those
Bonds included in the refunding plan, then only the debt service on the Bonds which are not
defeased Bonds and the refunding bonds, the payment of which is not so secured by the refunding
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plan, shall be included in any computation of the coverage requirement for the issuance of Future
Parity Bonds and the annual computation of coverage for determining compliance with the rate
covenant.
The City shall give written notice of defeasance to the owners of all Bonds to each party
entitled to receive notice in accordance with Section 18.
Section 16. Issuance of Future Parity Bonds. The City hereby further covenants and
agrees with the owners of the Bonds for as long as any of the same remain outstanding as follows:
(a) Parity Conditions. That it will not issue any bonds with a lien on Gross Revenue
superior to the lien of the Bonds on such revenue. The City may issue Future Parity Bonds for:
First, the purpose of acquiring, constructing and installing additions and improvements to
and extensions of, acquiring necessary equipment for, or making necessary replacements or repairs
and capital improvements to the System; or
Second, the purpose of refunding or purchasing and retiring at or prior to their maturity
any outstanding revenue bonds or other obligations payable out of Gross Revenue;
and to pledge that payments be made into the Bond Account for the payment of the
principal thereof and interest thereon out of the Revenue Fund sufficient to pay the principal of
and interest on such Future Parity Bonds and to maintain the reserves required therefor, which
such payments may rank equally with the payments out of such Revenue Fund into the Bond
Account and the Reserve Account (if such Future Parity Bonds are secured by the Reserve
Account) to pay and secure the payment of the principal of and interest on any Parity Bonds then
outstanding, upon compliance with the following conditions:
(1) That at the time of the issuance of such Future Parity Bonds there is no
deficiency in the Bond Account and the Reserve Account or any other reserve account created to
secure the principal of and interest on Parity Bonds.
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(2) If there are special assessments levied in any utility local improvement
district in which additions and improvements to and extensions of the System will be constructed
from the proceeds of such Future Parity Bonds, the ordinance authorizing such Future Parity Bonds
must require that such special assessments be paid into the Bond Account.
(3) If there are special assessments pledged to be paid into a warrant or bond
redemption fund for revenue bonds or warrants being refunded by Future Parity Bonds, the
ordinance authorizing such Future Parity Bonds must require such special assessments to be used
for the refunding or paid into the Bond Account.
(4) The principal of and interest on the Future Parity Bonds will be payable out
of the Bond Account, and the ordinance authorizing their issuance must further provide for
payments into the Bond Account to satisfy the Sinking Fund Requirement and, for any Future
Parity Bonds secured by the Reserve Account, payments into the Reserve Account to satisfy the
Reserve Account Requirement, all as required by Section 11 of this ordinance.
(5) Prior to the delivery of any Future Parity Bonds, the City must have on file
in the office of the City Clerk either:
(A) from and after such time as no 2009 Bonds remain outstanding, a
certificate of the Finance Director showing that the Net Revenue (without the adjustments
described in subsection (a)(5)(B) below) in any twelve (12) consecutive months out of the twenty-
four (24) months immediately preceding the delivery of the bonds then proposed to be issued, as
determined from the financial statements of the System, will equal at least 1.25 times the Annual
Debt Service (after deducting Assessments, allocated to the years in which they would be received
if the unpaid balance of each assessment roll were paid in the remaining number of installments
with interest on the declining balance at the times and at the rate provided in the ordinance
confirming the assessment roll) for each such calendar or Fiscal Year for all Parity Bonds plus the
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Future Parity Bonds proposed to be issued. Annual Debt Service for purposes of this test shall be
adjusted to reflect any Debt Service Offset; or
(B) a certificate of a Professional Utility Consultant showing: that the
Net Revenue determined and adjusted as hereafter provided for each calendar or Fiscal Year after
the issuance of such Future Parity Bonds (the "Adjusted Net Revenue") will equal at least
1.25 times the Annual Debt Service (after deducting Assessments, allocated to the years in which
they would be received if the unpaid balance of each assessment roll were paid in the remaining
number of installments with interest on the declining balance at the times and at the rate provided
in the ordinance confirming the assessment roll) for each such calendar or Fiscal Year for all Parity
Bonds plus the Future Parity Bonds proposed to be issued. Annual Debt Service for purposes of
this test shall be adjusted to reflect any Debt Service Offset.
The Adjusted Net Revenue shall be the Net Revenue for a period of any twelve (12)
consecutive months out of the twenty-four (24) months immediately preceding the date of delivery
of such proposed Future Parity Bonds as adjusted by such Professional Utility Consultant to take
into consideration changes in Net Revenue estimated to occur under the following conditions for
each year after such delivery for so long as any Parity Bonds, including the Future Parity Bonds
proposed to be issued, shall be outstanding:
(i) The additional Net Revenue that would have been received if any
change in rates and charges adopted prior to the date of such certificate and subsequent to the
beginning of such twelve (12)-month period, had been in force during the full twelve (12)-month
period;
(ii) The additional Net Revenue that would have been received if any
facility of the System that became fully operational after the beginning of such twelve (12)-month
period had been so operating for the entire period; and
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(iii) The additional Net Revenue estimated by such Professional Utility
Consultant to be received as a result of any additions, betterments and improvements to and
extensions of any facilities of the System that are (a) under construction at the time of such
certificate or (b) will be constructed from the proceeds of the Future Parity Bonds to be issued_
Such Professional Utility Consultant may rely upon, and his or her certificate shall have
attached thereto, financial statements of the System certified by the Finance Director showing
income and expenses for the period upon which the same is based.
The certificate of such Professional Utility Consultant shall be conclusive and the only
evidence required to show compliance with the provisions and requirements of this
subsection (a)(5)(B).
(b) Refunding. Notwithstanding the foregoing requirement, if Future Parity Bonds are
to be issued for the purpose of refunding at or prior to their maturity any part or all of the then
outstanding Parity Bonds, the certificate described in subsection (a)(5) of this section is not
required if the Finance Director provides a certificate stating that upon the issuance of such Future
Parity Bonds (1) total debt service on all Parity Bonds (including the refunding bonds but not
including the bonds to be refunded thereby) will decrease, and (2) the Annual Debt Service for
each year that any Parity Bonds (including the refunding bonds proposed to be issued) will be
outstanding will not increase by more than $5,000 by reason of the issuance of such Future Parity
Bonds.
(c) Junior Lien Obligations. Nothing herein contained shall prevent the City from
issuing any revenue bonds, warrants or other obligations that are a charge upon the money in the
Revenue Fund junior or inferior to the payments required by this ordinance to be made into the
Bond Account and the Reserve Account; provided, however, that the City may not agree to
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acceleration as a remedy with respect to any bonds or other obligations having a lien on Gross
Revenue junior to the lien thereon of any Parity Bonds.
(d) Variable Rate Obligations. The City may not issue variable rate obligations
payable from Gross Revenue without the prior written consent of the municipal bond insurers
providing insurance for the 2009 Bonds (but for only so long as such 2009 Bonds remain
outstanding) and the 2010 Bonds (but for only so long as such 2010 Bonds remain outstanding).
Section 17. Sale of Bonds.
(a) Sale. The Council has determined that it would be in the best interest of the City
to delegate to the Designated Representatives, for a limited time, the authority to select the
Refunded Bonds from the Refunding Candidates, and to approve the method of sale, final interest
rates, maturity dates, redemption terms and principal maturities for the Bonds. Each Designated
Representative is each hereby authorized to approve the issuance of Bonds and to approve a
competitive bond sale or a negotiated bond sale for the Bonds, as set forth below.
(b) Negotiated Bond Sale. If a Designated Representative determines that the Bonds
are to be sold by negotiated public sale, a Designated Representative shall solicit proposals from
one or more qualified underwriting firms and shall select one or more Underwriters that submit
the proposal(s) that is in the best interest of the City. Such Bonds shall be sold to such
Underwriter(s) pursuant to the terms of a Bond Purchase Contract.
(c) Competitive Sale. If a Designated Representative determines that the Bonds are to
be sold at a competitive public sale, a Designated Representative shall: (1) establish the date of the
public sale; (2) establish the criteria by which the successful bidder will be determined; (3) request
that a good faith deposit in an amount not less than one percent of the principal amount of the
offering accompany each bid; (4) cause notice of the public sale to be given; and (5) provide for
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such other matters pertaining to the public sale as he or she deems necessary or desirable. Such
Bonds shall be awarded to the Underwriter pursuant to the terms of a Certificate of Award.
(d) Sale Parameters. Subject to the terms and conditions set forth in this Section 17,
each Designated Representative is hereby authorized to approve the method of sale, to select the
Refunded Bonds from the Refunding Candidates, and to approve the final interest rates, aggregate
principal amount, principal maturities, and redemption rights of the Bonds in the Sale Document;
provided herein so long as:
(1) the aggregate principal (face) amount of all Bonds issued pursuant to this
ordinance does not exceed $29,000,000,
(2) the final maturity date for the Bonds issued under this ordinance is no later
than November 1, 2036,
(3) the Bonds sold for the purpose of refunding all or a portion of the Refunded
Bonds are sold for a price that results in a minimum aggregate net present value debt service
savings over the Refunded Bonds to be refunded of at least 3.00%,
and
(4) the true interest cost for the Bonds (in the aggregate) does not exceed 4.00%,
(5) the aggregate purchase price for the Bonds shall not be less than 96% of the
aggregate stated principal amount of the Bonds.
Subject to the terms and conditions set forth in this section, each Designated Representative
is hereby authorized to execute the Sale Document on behalf of the City. Following the execution
of the Sale Document, a Designated Representative shall provide a report to the Council describing
the final terms of the Bonds approved pursuant to the authority delegated in this section. The
authority granted to the Designated Representatives by this Section 17 to execute the Sale
Document shall expire one year (365 days) after the effective date of this ordinance. If a Sale
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Document for the Bonds has not been executed by such date, the authorization for the issuance of
such Bonds shall be rescinded, and such Bonds shall not be issued nor their sale approved unless
such Bonds shall have been re -authorized by ordinance of the Council. The ordinance re-
authorizing the issuance and sale of such Bonds may be in the form of a new ordinance repealing
this ordinance in whole or in part or may be in the form of an amendatory ordinance approving a
Sale Document or establishing terms and conditions for the authority delegated under this
Section 17.
(e) Delivery of Bonds; Documentation. The proper officials of the City, including the
Finance Director, the Mayor and the City Clerk, are authorized and directed to undertake all action
necessary for the prompt execution and delivery of the Bonds to the applicable Underwriter and
further to execute all closing certificates and documents required to effect the closing and delivery
of the Bonds in accordance with the terms of the Sale Document. Such documents may include,
but are not limited to, documents related to a municipal bond insurance policy delivered by an
insurer to insure the payment when due of the principal of and interest on all or a portion of the
Bonds as provided therein, if such insurance is determined by a Designated Representative to be
in the best interest of the City.
(c) Preliminary and Final Official Statements. Each Designated Representative is
hereby authorized to deem final the preliminary Official Statement relating to the Bonds for the
purposes of the Rule. Each Designated Representative is further authorized to approve for
purposes of the Rule, on behalf of the City, the final Official Statement relating to the issuance and
sale of the Bonds and the distribution of the final Official Statement pursuant thereto with such
changes, if any, as may be deemed to be appropriate.
Section 18. Undertaking to Provide Ongoing Disclosure. The City covenants to execute
and deliver at the time of issuance of the Bonds a Continuing Disclosure Certificate. Each
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Designated Representative is hereby authorized to execute and deliver a Continuing Disclosure
Certificate upon the issuance, delivery and sale of the Bonds with such terms and provisions as
such officer shall deem appropriate and in the best interests of the City.
Section 19. Supplements and Amendments.
(a) The Council from time to time and at any time may adopt an ordinance or
ordinances supplemental hereof, which ordinance or ordinances thereafter shall become a part of
this ordinance, for any one or more or all of the following purposes:
(1) To add to the covenants and agreements of the City in this ordinance other
covenants and agreements thereafter to be observed, which shall not adversely affect the interests
of the owners of any Bonds or any Parity Bonds in any material respect, or to surrender any right
or power herein reserved to or conferred upon the City.
(2) To make such provisions for the purpose of curing any ambiguities or of
curing, correcting or supplementing any defective provision contained in this ordinance in regard
to such matters or questions as the Council may deem necessary or desirable and not inconsistent
with this ordinance and which shall not adversely affect the interests of the owners of any Bonds
or any Parity Bonds in any material respect.
(3) To amend or supplement any provision contained in this ordinance for the
purpose of obtaining or maintaining a rating on the Bonds so long as such amendment or
supplement is not inconsistent with this ordinance and will not adversely affect the interests of the
owners of any Bonds or any Parity Bonds in any material respect.
Any such supplemental ordinance of the Council may be passed without the consent of the
owners of any Bonds at any time outstanding, notwithstanding any of the provisions of
subsection (b) of this section; provided, however, that the City shall obtain an opinion of nationally
recognized bond counsel to the effect that such supplemental ordinance complies with this
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subsection (a) and will not adversely affect the interests of the owners of any Bonds or any Parity
Bonds in any material respect.
(b) With the consent of the owners of not less than 65% in aggregate principal amount
of the Parity Bonds at the time outstanding, the Council may adopt an ordinance or ordinances
supplemental hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this ordinance or of any supplemental ordinance; provided,
however, that no such supplemental ordinance shall:
(1) Extend the fixed maturity of any Parity Bonds, or reduce the rate of interest
thereon, or extend the time of payments of interest from their due date, or reduce the amount of
the principal thereof, or reduce any premium payable on the redemption thereof, without the
consent of the owner of each bond so affected; or
(2) Reduce the aforesaid percentage of bond owners required to approve any
such supplemental ordinance, without the consent of the owners of all of the Parity Bonds then
outstanding.
It shall not be necessary for the consent of bond owners under this subsection (b) to approve
the particular form of any proposed supplemental ordinance, but it shall be sufficient if such
consent shall approve the substance thereof.
(c) Upon the adoption of any supplemental ordinance pursuant to the provisions of this
section, this ordinance shall be deemed to be modified and amended in accordance therewith, and
the respective rights, duties and obligations of the City under this ordinance and all owners of
Bonds outstanding hereunder shall thereafter be determined, exercised and enforced thereunder,
subject in all respects to such modification and amendments, and all the terms and conditions of
any such supplemental ordinance shall be deemed to be part of the terms and conditions of this
ordinance for any and all purposes.
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Section 20. Lost or Destroyed Bonds. In case any Bonds are lost, stolen or destroyed,
the Bond Registrar may authenticate and deliver a new Bond or Bonds of like amount, date and
tenor to the Registered Owner thereof if the owner pays the expenses and charges of the Bond
Registrar and the City in connection therewith and files with the Bond Registrar and the City
evidence satisfactory to both that such Bond or Bonds were actually lost, stolen or destroyed and
of his or her ownership thereof, and furnishes the City and the Bond Registrar with indemnity
satisfactory to both.
Section 21. Severabili. If a court of competent jurisdiction declares that any one or
more of the covenants and agreements in this ordinance to be performed by the City are contrary
to law, then such covenant or covenants, agreement or agreements, will be null and void and will
be deemed separable from the remaining covenants and agreements in this ordinance and will in
no way affect the validity of other provisions of this ordinance or of the Bonds.
Section 22. Effective Date. This ordinance will become effective five (5) days from
and after its passage and publication.
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PASSED by the City Council of the City of Port Angeles, Washington, at a regular meeting
of the Council held on November 4, 2020.
CITY OF PORT ANGELES, WASHINGTON
Mayor
Attest:
City Clerk
APPROVED AS TO FORM
Pacifica Law Group LLP, Bond Counsel
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CERTIFICATE OF CITY CLERK
I, the undersigned, City Clerk of the City of Port Angeles, Washington, DO HEREBY
CERTIFY:
1. That the attached is a true and correct copy of Ordinance No.3666
(the "Ordinance") of the City, duly passed at a regular meeting of the City Council (the
"Council") of the City held on November 4, 2020.
2. That said meeting was duly convened and held in all respects in accordance with
law, including but not limited to Washington State Governor Inslee's emergency proclamation
No. 20-28 issued on March 24, 2020, as amended and supplemented, temporarily suspending
portions of the Open Public Meetings Act (chapter 42.30 RCW), and 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 4th day of November, 2020.
City Clerk
November 4, 2020 G - 53
NO.
EXHIBIT A
FORM OF BOND
UNITED STATES OF AMERICA
STATE OF WASHINGTON
CITY OF PORT ANGELES
WATER AND WASTEWATER UTILITY REVENUE REFUNDING BOND, 2020
INTEREST RATE: MATURITY DATE: CUSIP NO:
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
Dollars
The City of Port Angeles, Washington, a municipal corporation organized and existing
under and by virtue of the laws 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 indicated above
and to pay interest thereon from , 20, or the most recent date to which interest has
been paid or duly provided for until payment of this bond at the Interest Rate set forth above,
payable on 1, 20, and semiannually thereafter on the first days of each
succeeding and . Both principal of and interest on this bond are
payable in lawful money of the United States of America. The fiscal agent of the State of
Washington has been appointed by the City as the authenticating agent, paying agent and registrar
for the bonds of this issue (the "Bond Registrar"). For so long as the bonds of this issue are held
in fully immobilized form, payments of principal thereof and interest thereon shall be made as
provided in accordance with the operational arrangements of The Depository Trust Company
("DTC") referred to in the Blanket Issuer Letter of Representations (the "Letter of
Representations") from the City to DTC.
This bond is one of a series of bonds in the aggregate principal amount of $ (the
"Bonds"), issued pursuant to the Bond Ordinance, to refund certain outstanding water and
wastewater utility revenue bonds, [to fund the Reserve Account,] and to pay costs of issuing the
bonds.
Both principal of and interest on this bond shall be payable in accordance with Ordinance
No. 3666 duly passed by the City Council on , 2020 (the "Bond Ordinance").
Capitalized terms used in this bond have the meanings given such terms in the Bond Ordinance.
Unless otherwise defined on this bond, capitalized terms used herein have the meanings given
them in the Bond Ordinance.
The principal of and interest on the Bonds are payable solely out of the special fund of the
City known as the "1994 Water and Wastewater Utility Revenue Bond Fund" (the "Bond
A-1
November 4, 2020 G - 54
Account"). The Bonds are special limited obligations of the City and are not obligations of the
State of Washington or any political subdivision thereof other than the City, and neither the full
faith and credit nor the taxing power of the City or the State of Washington is pledged to the
payment of the Bonds.
Under the Bond Ordinance, the City is obligated to set aside and pay into the Bond Account
out of Gross Revenue of the System certain fixed amounts sufficient to pay when due the principal
of and interest and premium, if any, on the Bonds and all other Parity Bonds. To the extent
provided by the Bond Ordinance, the amounts pledged to be paid from Gross Revenue into the
Bond Account and accounts therein are a lien and charge thereon equal in rank to the lien and
charge upon Gross Revenue of the amounts required to pay and secure the payment of certain
outstanding Parity Bonds and any Future Parity Bonds that the City may issue hereafter, and
superior to all other liens and charges of any kind or nature, except the Costs of Maintenance and
Operation of the System.
The Bond Ordinance sets forth covenants of the City to secure the payment of Parity Bonds,
including but not limited to covenants relating to rates and charges of the System, operations of
the System, and the issuance of Future Parity Bonds.
The Bonds are subject to redemption prior to maturity as provided in the Sale Document.
The Bonds may be transferred and exchanged upon surrender to the Bond Registrar as provided in
the Bond Ordinance.
The Bonds are not "private activity bonds" as such term is defined in the Internal Revenue
Code of 1986, as amended (the "Code"). The City has not designated the Bonds as "qualified tax-
exempt obligations" within the meaning of Section 265(b)(3)(B) of the Code.
This bond will not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Bond Ordinance until the Certificate of Authentication hereon has
been manually signed by the Bond Registrar.
It is hereby certified, recited and declared that all acts, conditions and things required by
the Constitution and statutes of the State of Washington to exist, to have happened and to have
been performed precedent to and in the issuance of this bond do exist, have happened and have
been performed in due time, form and manner as prescribed by law, and that the amount of this
bond, together with all other obligations or indebtedness of the City, does not exceed any
constitutional or statutory limitations of indebtedness.
IN WITNESS WHEREOF, the City of Port Angeles, Washington, has caused this bond to
be signed by the manual or facsimile signature of its Mayor, attested by the manual or facsimile
signature of the City Clerk, and seal of the City to be impressed or reproduced hereon, all as of
.2020.
(SEAL)
CITY OF PORT ANGELES, WASHINGTON
By Manual or Facsimile Signature]
Mayor
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November 4, 2020 G - 55
Attest:
(Manual or Facsimile Si rnature]
City Clerk
CERTIFICATE OF AUTHENTICATION
Date of Authentication:
This is one of the Water and Wastewater Utility Revenue Refunding Bonds, 2020, of the
City of Port Angeles, Washington, dated , 2020, as described in the within
mentioned Bond Ordinance.
WASHINGTON STATE FISCAL AGENT, as
Bond Registrar
Authorized Officer
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