HomeMy WebLinkAboutWater & Sewer Revenue Refunding Bond - 2016 Denis Law CltV Of
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City Clerk -Jason A.Seth,CMC
July 19, 2016
Kristin Patterson, Paralegal
Pacifica Law Group LLP
1191 Second Avenue, Suite 2000
Seattle, WA 98101-3404
Subject: Signature for Bond Ordinance—2016 Water&Sewer Revenue Refunding Bond
Dear Ms. Patterson:
Enclosed are 2 originals & 1 signature page of the approved Bond Ordinance No. 5812
which has been signed by the Mayor and is ready for signature by a Pacifica Law Group,
LLP — Bond Counsel, authorized representative. Please provide signatures where
indicated and return the sin�le si�nature pa�e onlv to me as soon as possible so we may
attach it to the original document on file with the City Clerk Division. If you have any
questions, please call me at 425-430-6502. I look forward to working with you.
Sincerely,
.
Jason A. Seth, CMC
City Clerk
Enclosure
cc: Iwen Wang,Administrative Services Administrator
Jamie Thomas, Fiscal Services Director
1055 South Grady Way• Renton,Washington 98057 • (425)430-6510/Fax(425)430-6516• rentonwa.gov
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CITY OF RENTON, WASHINGTON
WATER AND SEWER REVENUE REFUNDING BOND, 2016
ORDINANCE N0. 5812
AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, AUTHORIZING
THE ISSUANCE OF A WATER AND SEWER REVENUE REFUNDING BOND IN
THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $9,500,000 FOR
THE PURPOSE OF REFUNDING A PORTION OF THE CITY'S WATER AND
SEWER REVENUE BONDS, SERIES 2008A; PROVIDING THE FORM, TERMS
AND COVENANTS OF THE BOND; DELEGATING CERTAIN AUTHORITY TO
APPROVE THE FINAL TERMS OF THE BOND; AND AUTHORIZING OTHER
MATTERS RELATED THERETO.
PASSED: July 11, 2016
PREPARED BY:
PACIFICA LAW GROUP LLP
Seattle, Washington
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ORDINANCE N0. 5812
TABLE OF CONTENTS'
Section1. Definitions..................................................................................................................... 3
Section 2. Findings Regarding Parity Provisions.......................................................................... 13
Section 3. Authorization and Description of Bond ...................................................................... 14
Section4. Registration of Bond.................................................................................................... 15
Section 5. Priority and Payment from the Waterworks Utility Fund........................................... 16
Section6. Funds and Accounts.................................................................................................... 18
Section7. Covenants.................................................................................................................... 21
Section8. Tax Covenants.............................................................................................................24
Section9. Future Parity Bonds.....................................................................................................26
Section10. Form of Bond.............................................................................................................30
Section 11. Execution of Bond..................................................................................................... 32
Section12. Right of Prepayment.................................................................................................33
Section13. Sale of Bond ..............................................................................................................33
Section 14. Application of Bond Proceeds; Plan of Refunding.................................................... 35
Section 15. Ongoing Disclosure; Additional Covenants............................................................... 37
Section 16. Lost, Stolen or Destroyed Bond ................................................................................ 38
Section 17. Contract; Savings Clause........................................................................................... 38
Section 18. General Authorization, Ratification of Prior Acts ..................................................... 39
Section 19. Effective Date of Ordinance......................................................................................39
* This Table of Contents is provided for convenience only and is not a part of this
ordinance.
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CITY OF RENTON, WASHINGTON
ORDINANCE NO. 5812
AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, AUTHORIZING
THE ISSUANCE OF A WATER AND SEWER REVENUE REFUNDING BOND IN
THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $9,500,000 FOR
THE PURPOSE OF REFUNDING A PORTION OF THE CITY'S WATER AND
SEWER REVENUE BONDS, SERIES 2008A; PROVIDING THE FORM, TERMS
AND COVENANTS OF THE BOND; DELEGATING CERTAIN AUTHORITY TO
APPROVE THE FINAL TERMS OF THE BOND; AND AUTHORIZING OTHER
MATTERS RELATED THERETO.
WHEREAS, the City of Renton, Washington (the "City") has created and operates a
waterworks utility of the City, including the water, sewer, wastewater and storm drainage
systems (together, the "Waterworks Utility"); and
WHEREAS, the City issued and now has outstanding the following water and sewer
revenue bonds, each being payable on a parity of lien on the revenues of the Waterworks
Utility:
Authorizing Original Outstanding
Series Ordinance Principal Amount Principal Amount
2007 5313 $ 9,750,000 $ 7,995,000
2008A 5313 9,975,000 9,975,000
2008B 5313 2,035,000 195,000
2012 5672 9,190,000 9,080,000
(together, the "Outstanding Parity Bonds"); and
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WHEREAS, the Water and Sewer Revenue Bonds, Series 2008A, issued on January 4,
2008, mature in principal amounts and bear interest as follows:
Maturity Date Principal Interest
(December 1) Amount Rate
2016 $ 480,000 4.00%
2017 695,000 4.00
2018 565,000 5.00
2019 645,000 4.00
2020 720,000 4.00
2021 760,000 4.00
2022 790,000 4.00
2023 980,000 4.10
2024 1,020,000 4.15
2025 1,060,000 4.20
2026 1,105,000 4.25
2027 1,155,000 4.30
(the "2008A Bonds"); and
WHEREAS, the 2008A Bonds maturing on or after December 1, 2018 (the "Refunding
Candidates"), are subject to optional redemption, in whole or in part, on any date on or after
December 1, 2017, at a price of par plus interest accrued to the date of redemption; and
WHEREAS, after due consideration it appears to this Council that all or a portion of the
Refunding Candidates (the "Refunded Bonds") may be defeased and refunded by proceeds of
the water and sewer revenue refunding bond authorized herein (the "Bond") at a savings to the
City and its ratepayers; and
WHEREAS, the respective ordinances authorizing the issuance of the Outstanding Parity
Bonds permit the issuance of additional bonds on a parity with the Outstanding Parity Bonds for
refunding purposes if certain conditions are met; and
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WHEREAS, the Council wishes to delegate authority to the Mayor, the Chief
Administrative Officer and the Finance Director of the City (as further described herein, each a
"Designated Representative") for a limited time, to approve the interest rates, maturity date,
redemption terms, and other terms for the Bond within the parameters set by this ordinance;
and
WHEREAS, the City intends to issue a request for proposals from various financial
institutions to purchase the Bond; and
WHEREAS, the Council now wishes to authorize the issuance of the Bond, the
acceptance of a commitment confirming such a proposal, and the sale of the Bond to the
successful respondent subject to the terms and conditions set forth in this ordinance;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RENTON, WASHINGTON DOES
ORDAIN AS FOLLOWS:
Section 1. Definitions. As used in this ordinance, the following words shall have the
following meanings:
Acquired Obligations means the Government Obligations acquired by the City under the
terms of this ordinance and the Escrow Agreement to effect the defeasance and refunding of
the Refunded Bonds, but only to the extent that the same are acquired at Fair Market Value.
Annua/ Debt Service for any year means all the interest on plus all principal (except
principal of Term Bonds due in any Term Bond Maturity Year) of Parity Bonds, plus all
mandatory redemption and sinking fund installments, less all bond interest payable from the
proceeds of any such bonds, which will mature or come due in that year.
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After all of the Outstanding Parity Bonds are fu!!y redeemed, refunded or defeased, for
purposes of satisfying the Coverage Requirement or the Parity Requirement, Annual Debt
Service for any fiscal year or calendar year shall exclude any Debt Service Offsets received or
expected to be received in such fiscal year or calendar year.
Bank means the financial institution that is the successful respondent to a request for
proposals to purchase the Bond, selected by a Designated Representative.
Base Period means any consecutive 12-month period selected by the City out of the
24-month period next preceding the date of issuance of an additional series of Future Parity
Bonds.
Bond means the City's Water and Sewer Revenue Refunding Bond, 2016, authorized to
be issued by this ordinance.
Bond Fund means that special fund of the City known as the Waterworks Revenue Bond
Fund, 2016 created by the City for the payment of the principal of and interest on the Bond.
Bond Register means the registration records for the Bond maintained by the Bond
Registrar.
Bond Registrar means the Finance Director, whose duties include registering and
authenticating the Bond, maintaining the Bond Register, transferring ownership of the Bond,
and paying the principal of and interest on the Bond.
Call Date means December 1, 2017.
City means the City of Renton, Washington, a municipal corporation duly organized and
existing by virtue of the laws of the State.
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Code means the internal Revenue Code of 1986, as amended, together with
corresponding and applicable final, temporary or proposed regulations and revenue rulings
issued or amended with respect thereto by the United States Treasury Department or the
Internal Revenue Service, to the extent applicable to the Bond.
Commission means the Securities and Exchange Commission.
Commitment means the commitment of the Bank to purchase the Bond.
Council means the City Council as the general legislative authority of the City, as duly
and regularly constituted from time to time.
Coverage Reguirement means in any calendar year 1.25 times the Annual Debt Service
for such year.
Credit Faciliry means a policy of municipal bond insurance, a letter of credit, surety
bond, line of credit, guarantee or other financial instrument or any combination of the
foregoing, which obligates a third party to make payment or provide funds for the payment of
financial obligations of the City. There may be one or more Credit Facilities outstanding at any
time.
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 City Representative means each the Mayor, the Chief Administrative Officer
and the Finance Director of the City, any successors to the functions of such offices, and their
designees. The signature of one Designated City Representative shall be sufficient to bind the
City.
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EscrowAgent means U.S. Bank National Association, Seattle, Washington.
Escrow Agreement means the Escrow Deposit Agreement between the City and the
Escrow Agent to be dated as of the date of closing and delivery of the Bond.
Fair Market Value means the price at which a willing buyer would purchase the
investment from a willing seller in a bona fide, arm's length transaction (determined as of the
date the contract to purchase or sell the investment becomes binding) if the investment is
traded on an established securities market (within the meaning of Section 1273 of the Code)
and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's
length transaction (as referenced above) if (i) the investment is a certificate of deposit that is
acquired in accordance with applicable regulations under the Code, (ii) the investment is an
agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically
negotiated interest rate (for example, a guaranteed investment contract, a forward supply
contract or other investment agreement) that is acquired in accordance with applicable
regulations under the Code, (iii) the investment is a United States Treasury Security--State and
Local Government Series that is acquired in accordance with applicable regulations of the
United States Bureau of Public Debt, or (iv) any commingled investment fund in which the City
and related parties do not own more than a 10% beneficial interest therein if the return paid by
the fund is without regard to the source of the investment. To the extent required by the
applicable regulations under the Code, the term "investment" shall include a hedge.
Federal Tax Certificate means the Federal Tax Certificate signed by the Finance Director
pertaining to the tax-exemption of interest on the Bond.
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Finance Director means the City's Finance and Information Services Administrator or the
successor to such officer.
Fitch means Fitch, Inc., organized and existing under the laws of the State of Delaware,
its successors and their assigns, and, if such organization shall be dissolved or liquidated or shall
no longer perform the functions of a securities rating agency, Fitch shall be deemed to refer to
any other nationally recognized securities rating agency designated by the City.
Future Parity Bonds means all water and sewer revenue bonds of the City issued after
the date of the issuance of the Bond and having a lien and charge on Net Revenue on a parity
with the lien and charge on Net Revenue for the payment of the principal of and interest on the
Outstanding Parity Bonds and the Bond.
Government Obligations means those obligations now or hereafter defined as such in
chapter 39.53 RCW.
Gross Revenue means all of the earnings and revenues received by the City from the
maintenance and operation of the Waterworks Utility and all earnings from the investment of
money in the Reserve Fund or any Parity Bond Fund, and connection and capital improvement
charges collected for the purpose of defraying the cost of capital facilities of the Waterworks
Utility, except government grants, proceeds from the sale of Waterworks Utility property (other
than timber), City taxes collected by or through the Waterworks Utility, principal proceeds of
bonds and earnings or proceeds from any investments in a trust, defeasance or escrow fund
created to defease or refund Waterworks Utility obligations (until commingled with other
earnings and revenues of the Waterworks Utility) or held in a special account for the purpose of
paying a rebate to the United States Government under the Code.
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Maintenance and Operation Expense means all reasonable expenses incurred by the
City in causing the Waterworks Utility to be operated and maintained in good repair, working
order and condition, including payments made to any other municipal corporation or private
entity for water service and for sewage treatment and disposal service or other utility service in
the event the City combines such service in the Waterworks Utility and enters into a contract
for such service, and including pro-rata budget charges for the City's administration expenses
where those represent a reasonable distribution and share of actual costs, but not including
any depreciation or taxes levied or imposed by the City or payments to the City in lieu of taxes,
or capital additions or capital replacements to the Waterworks Utility.
Maximum Annual Debt Service means, at the time of calculation, the maximum amount
of Annual Debt Service that will mature or come due in the current calendar year or any future
calendar year on the Parity Bonds.
Moody's means Moody's Investors Service, its successors and their assigns, and, if such
corporation shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, Moody's shall be deemed to refer to any other nationally recognized
securities rating agency designated by the City.
Net Revenue means Gross Revenue less Maintenance and Operation Expense.
Outstanding means, as of any particular time, all Parity Bonds issued theretofore except
(a) Parity Bonds theretofore canceled by the Bond Registrar after purchase by the City in the
open market or because of payment at, or redemption prior to, maturity; (b) Parity Bonds for
which funds have been deposited into a trust account pursuant to the ordinances authorizing
the issuance of the Parity Bonds, but only to the extent that the principal of and interest on
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such Parity Bonds are payable from such trust account; (c) temporary, mutilated, lost, stolen or
destroyed Parity Bonds for which new Parity Bonds have been issued pursuant to the ordinance
authorizing their issuance; and (d) Parity Bonds exchanged for new Parity Bonds pursuant to
the ordinances authorizing their issuance.
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 water and sewer revenue bonds of the City
identified in the recitals to this ordinance.
Parity Bonds means the Outstanding Parity Bonds, the Bond, and any Future Parity
Bonds.
Parity Bond Fund means any fund created for the payment and redemption of Parity
Bonds.
Parity Requirement means Net Revenue equal to or greater than:
(a) 1.25 times the Maximum Annual Debt Service for all Parity Bonds plus the Future
Parity Bonds proposed to be issued; and
(b) 100% of Maximum Annual Debt Service for all subordinate lien evidences of
indebtedness secured by Gross Revenue.
P/acementAgent means PiperJaffray& Co., and its successors.
Professiona/ Utility Consultant means an independent licensed professional engineer,
certified public accountant or other independent person or firm selected by the City having a
favorable reputation for skill and experience with municipal utilities of comparable size and
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character to the Waterworks Utility in such areas as are relevant to the purposes for which such
consultant is retained.
Qualified Insurance means any non-cancelable municipal bond insurance policy or
surety bond issued by any insurance company licensed to conduct an insurance business in any
state of the United States (or by a service corporation acting on behalf of one or more such
insurance companies) which insurance company or companies, as of the time of issuance of
such policy or surety bond, are currently rated in the two highest rating categories by any
Rating Agency but no lower than the highest then-existing rating for any of the Parity Bonds.
Qualified Cetter of Credit means any irrevocable letter of credit issued by a financial
institution for the account of the City on behalf of Registered Owner of the Bond, which
institution maintains an office, agency or branch in the United States and as of the time of
issuance of such letter of credit, is currently rated in the two highest rating categories by any
Rating Agency but no lower than the highest then-existing rating for any of the Parity Bonds.
Rate Stabilization Fund means the Waterworks Rate Stabilization Fund created by the
City pursuant to Ordinance No. 4709.
Rating Aqency means Moody's, 5&P or Fitch.
Refunded Bonds means the Refunding Candidates designated by the Designated City
Representative pursuant to Section 14.
Refunding Account means the account by that name established pursuant to Section 14.
Refunding Candidates mean the outstanding 2008A Bonds maturing on or after
December 1, 2018.
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Registered Owner means the person in whose name the Bond is registered on the Bond
Register.
Reserve Fund means that special fund of the City known as the Waterworks Revenue
Bond Reserve Fund created by Ordinance No. 4709.
Reserve Requirement means with respect to any issue of Parity Bonds, the lesser of
(a) Maximum Annual Debt Service on all Outstanding Parity Bonds, and (b) 125%a of average
Annual Debt Service on all Outstanding Parity Bonds; provided, that the amount required to be
deposited hereunder with respect to any Future Parity Bonds in order to meet the Reserve
Requirement shall not exceed 10% of the net proceeds of such Future Parity Bonds under the
Code.
Rule means the SEC's Rule 15c2-12 under the Securities Exchange Act of 1934, as the
same may be amended from time to time.
S&P means Standard & Poor's Rating Services, its successors and their assigns, and, if
such corporation shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, S&P shall be deemed to refer to any other nationally recognized
securities rating agency designated by the City.
State means the State of Washington.
Term Bonds mean any Parity Bonds identified as such in the bond purchase contract or
in the ordinance authorizing the issuance thereof, the payrnent of which is provided for by a
requirement for mandatory deposits of money into the principal and interest account of the
bond redemption fund created for the payment of such issue of Parity Bonds in accordance
with a mandatory sinking fund requirement.
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Term eond Maturity Year means any calendar year in which Term Bonds are scheduled
to m ature.
2008 Bond Ordinance means Ordinance No. 5313 adopted by the City Council on
October 22, 2007 and Resolution No. 3919 adopted by the Council on November 26, 2007
authorizing the issuance of the 2008A Bonds.
2008A Bonds means the Water and Sewer Revenue Bonds, Series 2008A, of the City
issued on January 5, 2008, as more particularly described in the recitals of this ordinance.
Waterworks Utility means the combined water, sewer, wastewater and storm drainage
systems of the City as the same may be added to, improved and extended for as long as any of
the Parity Bonds are outstanding.
Waterworks Utility Fund means that special fund of the City into which all Gross
Revenue (except for earnings in any special fund for the redemption of revenue obligations of
the Waterworks Utility) shall be deposited.
Rules of Interpretation. In this ordinance, unless the context otherwise requires:
(a) 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;
(b) Words of the masculine gender shall mean and include correlative words of the
feminine and neuter genders and words importing the singular number shall mean and include
the plural number and vice versa;
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(c) 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;
(d) Any headings preceding the text of the several 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;
(e) All references herein to "articles," "sections" and other subdivisions or clauses
are to the corresponding articles, sections, subdivisions or clauses hereof; and
(f) Words importing the singular number include the plural number and vice versa.
Section 2. Findin�s Re�ardin� Paritv Provisions. The City Council hereby finds that there
is no deficiency in any Parity Bond Fund, that provisions hereinafter meet the conditions for the
issuance of Future Parity Bonds as set forth in the Outstanding Parity Bond Ordinances, and on
or prior to the date of issuance of the Bond the City will have on file a certificate showing that
that the issuance of the Bond will result in a debt service savings for the Waterworks Utility and
does not require an increase of more than $5,000 in any year for principal of and interest on
the Bond over and above the payments that were required to be made for the Refunded Bonds.
The conditions contained in the Outstanding Parity Bond Ordinances having been
complied with or assured, the payments required herein to be made out of the Waterworks
Utility Fund into the Bond Fund and the Reserve Fund to pay and secure the payment of the
principal of and interest on the Bond shall constitute a lien and charge upon the money in the
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Waterworks Utility Fund equal in rank with the lien and charge thereon for the payments
required to be made for the Outstanding Parity Bonds.
Section 3. Authorization and Description of Bond. The City is hereby authorized to issue
a water and sewer revenue refunding bond (the "Bond") in a principal amount of not to exceed
$9,500,000 for the purpose of providing the funds necessary to refund the Refunded Bonds and
pay all or a portion of the costs incidental to the foregoing and to the issuance of the Bond.
The Bond shall be designated the "City of Renton, Washington Water and Sewer
Revenue Refunding Bond, 2016" or other such designation as set forth in the Bond and
approved by the Finance Director. The Bond shall be dated as of its date of delivery to the
Bank, shall be fully registered as to both principal and interest, shall be in one denomination of
not to exceed $9,500,000, and shall mature on the date set forth in the Commitment and
approved by the Designated Representative pursuant to Section 13.
The Bond shall bear interest from its dated date or the most recent date to which
interest has been paid at the interest rate set forth in the Commitment. Interest on the
principal amount of the Bond shall be calculated per annum on a 30/360 basis, or as otherwise
provided in the Bond and in the Commitment. Principal of and interest on the Bond shall be
payable at the times and in the amounts as set forth in the Commitment and in the payment
schedule attached to the Bond.
The Bond shall be payable solely out of the Bond Fund and the Reserve Fund and shall
not be a general obligation of the City.
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Section 4. Re�istration of Bond.
(a) Registrar/Bond Registrar. The Finance Director shall act as Bond Registrar. The
Bond Registrar is authorized, on behalf of the City, to authenticate and deliver the Bond if
transferred or exchanged in accordance with the provisions of the Bond and this ordinance and
to carry out all of the Bond Registrar's powers and duties under this ordinance.
(b) Registered Ownership. The City and the Bond Registrar may deem and treat the
Registered Owner of the Bond as the absolute owner for all purposes, and neither the City nor
the Bond Registrar shall be affected by any notice to the contrary. Payment of the Bond shall
be made only as described in subsection (d) below. All such payments made as described in
subsection (d) below shall be valid and shall satisfy the liability of the City upon the Bond to the
extent of the amount so paid.
(c) Transfer or Exchange of Registered Ownership. The Bond shall not be
transferrable without the consent of the City unless (i) the Bank's corporate name is changed
and the transfer is necessary to reflect such change; or (ii) the transferee is a successor in
interest of the Bank by means of a corporate merger, an exchange of stock, or a sale of assets.
Notwithstanding the foregoing, the Bond may be transferred upon satisfaction of the
requirements, if any, set forth in the Commitment and in the Bond.
(d) Place and Medium of Payment. Both principal of and interest on the Bond shall
be payable in lawful money of the United States of America. Principal and interest on the Bond
shall be payable by check, warrant, ACH transfer or by other means mutually acceptable to the
Bank and the City. Upon final payment of principal and interest of the Bond, the Registered
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Owner shaii surrender the Bond for cancellation at the office of the Bond Registrar in
accordance with this ordinance.
Section 5. Priority and Payment from the Waterworks Utility Fund.
(a) Waterworks Utility Fund. A special fund of the City known as the "Waterworks
Utility Fund" has been established by the City, into which shall be deposited all Gross Revenue
as collected. Moneys in the Waterworks Utility Fund shall be trust funds and shall be held
separate and apart from all other funds and accounts of the City.
(b) Priority of Payments from the Waterworks Utility Fund. Gross Revenue on
deposit in the Waterworks Utility Fund (other than in any bond redemption or federal rebate
account) shall be used in the following order of priority:
(i) To pay Maintenance and Operation Expense;
{ii) To pay the interest on the Parity Bonds, including reimbursements to the
issuer of a Credit Facility if the Credit Facility secures the payment of interest on Parity
Bonds and the ordinance authorizing such Parity Bonds provides for such
reimbursement;
(iii) To pay the principal of the Parity Bonds, including reimbursements to the
issuer of a Credit Facility if the Credit Facility secures the payment of principal on Parity
Bonds and the ordinance authorizing such Parity Bonds provides for such
reimbursement;
(iv) To make all payments required to be made into any sinking fund or bond
redemption fund hereafter created for the payment of Future Parity Bonds which are
Term Bonds;
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(v) To make all payments required to be made into the Reserve Fund,
including any reimbursements required for Qualified Insurance or Qualified Letter of
Credit;
(vi) To make all payments required to be made into any revenue bond
redemption fund or warrant redemption fund and debt service account or reserve
account created to pay and secure the payment of the principal of and interest on any
revenue bonds or revenue warrants of the City having a lien upon Gross Revenue junior
and inferior to the lien thereon for the payment of the principal of and interest on the
Parity Bonds; and
(vii) To retire by optional redemption or purchase any outstanding revenue
bonds or revenue warrants of the City, to make necessary additions, betterments,
improvements and repairs to or extensions and replacements of the Waterworks Utility,
to make deposits into the Rate Stabilization Fund, or for any other lawful City purpose.
(c) Rate Stabilization Fund. The City has previously created a Waterworks Rate
Stabilization Fund (the "Rate Stabilization Fund"). The City may, at any time, as determined by
the City and as consistent with subsection (b) of this section, deposit Gross Revenue into the
Rate Stabilization Fund, excluding principal proceeds of Parity Bonds or other borrowing. The
City may withdraw any or all of the money from the Rate Stabilization Fund for inclusion in
Gross Revenue for any fiscal year of the City. Such deposits or withdrawals may be made up to
and including the date 90 days after the end of the fiscal year for which the deposit or
withdrawal will be included in Gross Revenue. No deposit of Gross Revenue will be made into
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the Rate Stabilization Fund to the extent that such deposit would prevent the City from meeting
the Coverage Requirement.
Section 6. Funds and Accounts.
(a) Bond Fund. There is hereby authorized to be created the Waterworks Revenue
Bond Fund, 2016 (the "Bond Fund"), which shall be a "Parity Bond Fund" and a subaccount of
the Waterworks Utility Fund. The Bond Fund shaii be maintained for the purpose of paying the
principal of and interest on the Bond. As long as the Bond remains outstanding, the City hereby
irrevocably obligates and binds itself to set aside and pay from the Waterworks Utility Fund into
the Bond Fund those amounts necessary, together with such other funds as are on hand and
available in the Bond Fund, to pay the interest or principal and interest next coming due on the
Bond. Such payments from the Waterworks Utility Fund to the Bond Fund shall be made in a
fixed amount without regard to any fixed proportion following the closing and delivery of the
Bond on or before each date on which an installment of intere5t or principal and interest falls
due on the Bond equal to the installment of interest or principal and interest. Money in the
Bond Fund not needed to pay the interest or principal next coming due may temporarily be
deposited in legal investments for City funds, but only to the extent that the same are acquired,
valued and disposed of at Fair Market Value.
(b) Reserve Fund. There has been created by the City a special fund of the City
known as the Waterworks Revenue Bond Reserve Fund (the "Reserve Fund") for purpose of
securing the payment of the principal of and interest on all Parity Bonds. The City hereby
irrevocably covenants and agrees that on or prior to the date of issuance of the Bond, the
amount on deposit in the Reserve Fund will be at least equal to the Reserve Requirement.
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Except for withdrawals therefrom as authorized herein, the Reserve Fund shall be
maintained at the Reserve Requirement at all times so long as any Parity Bonds are
Outstanding. When the total amount in the Bond Fund shali equal the total amount of principal
and interest for all outstanding Bonds, no further payment need be made into the Bond Fund.
Notwithstanding the first sentence of this paragraph, the Reserve Requirement may be
decreased for any issue of Parity Bonds when and to the extent the City has redeemed or
otherwise defeased any Outstanding Parity Bonds.
If there shall be a deficiency in the Bond Fund to meet maturing installments of either
principal or interest, as the case may be, on the Bond, that deficiency shall be made up from
the Reserve Fund by the withdrawal of cash therefrom for that purpose and after all cash has
been depleted, then by draws on the Qualified Insurance or Qualified Letter of Credit for that
purpose. Any deficiency created in the Reserve Fund by reason of any such withdrawal shall
then be made up from Net Revenue first available after making necessary provisions for the
required payments into the Bond Fund. Any money in the Reserve Fund in excess of the
Reserve Requirement may be withdrawn and deposited in any Parity Bond Fund and spent for
the purpose of retiring Parity Bonds or may be deposited in any other fund and spent for any
other lawful Waterworks Utility purpose.
The City may provide for the purchase, redemption or defeasance of Parity Bonds by the
use of money on deposit in the Bond Fund or the Reserve Fund as long as the money remaining
in those funds is sufficient to satisfy the required deposits in those funds for the remaining
Parity Bonds.
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All money in the Bond Fund or Reserve Fund may be kept in cash or on deposit in the
official bank depository of the City or in any national bank or may be invested in any legal
investment for City funds, but only to the extent that the same are acquired, valued and
disposed of at Fair Market Value. Interest on any of those investments or on that bank account
shall be deposited in the Reserve Fund until the total Reserve Requirement shall have been
accumulated therein, after which time the interest shall be deposited in any Parity Bond Fund.
Notwithstanding the provisions for the deposit or maintenance of earnings in the Bond
Fund or the Reserve Fund, the City also may transfer out of the Bond Fund or Reserve Fund any
money required in order to prevent any Parity Bonds from becoming "arbitrage bonds" under
the Code.
If the City fails to set aside and pay into the Bond Fund or the Reserve Fund the amounts
set forth above, the Registered Owner of any of the outstanding Bonds may bring an action
against the City to compel that setting aside and payment.
(c) Pledge of Revenue and Lien Position. The Net Revenue is hereby pledged to the
payment of the Parity Bonds, and the Parity Bonds shall constitute a lien and charge upon such
Net Revenue prior and superior to any other charge whatsoever.
(d) Regarding Sufficiency of Revenues. The Council hereby finds that in fixing the
amounts to be paid into the Bond Fund out of Gross Revenue, it has exercised due regard for
the Maintenance and Operation Expense and has not obligated the City to set aside and pay
into such Fund a greater amount of such Gross Revenue than in its judgment will be available
over and above the Maintenance and Operation Expense.
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Section 7. Covenants. The City covenants and agrees with the Registered Owner of the
Bond as follows:
(a) Rate Covenant. It will establish, maintain and collect rates and charges for all
services and facilities provided by the Waterworks Utility which will be fair and
nondiscriminatory, and will adjust those rates and charges from time to time so that:
(1) Gross Revenue will at all times be sufficient to (A) pay all Maintenance
and Operation Expense on a current basis, (B) pay when due all amounts that the City is
obligated to pay into the Reserve Fund and any Parity Bond Funds and (Cj pay all taxes,
assessments or other governmental charges lawfully imposed upon the Waterworks Utility or
other revenue therefrom or payments in lieu thereof and any and all other amounts which the
City may now or hereafter become obligated to pay from Gross Revenue by law or contract;
and
(2) Net Revenue in each calendar year will be at least equal to the Coverage
Requirement.
(b) Maintenance and Repair. It will at all times maintain and keep the Waterworks
Utility in good repair, working order and condition and also will at all times operate such Utility
and the business in connection therewith in an efficient manner and at a reasonable cost.
(c) Disposal of Waterworks Utility. It will not sell, lease, mortgage or in any manner
encumber or otherwise dispose of the Waterworks Utility in its entirety unless, simultaneously
with such sale or other disposition, all Parity Bonds are defeased pursuant to the provisions of
this ordinance.
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It will not sell, lease, mortgage or in any manner encumber or otherwise dispose of any
part of the Waterworks Utility (other than timber), including all additions and improvements
thereto and extensions thereof at any time made, that are used, useful or material in the
operation of the Waterworks Utility, unless provision is made for the replacement thereof or
for payment into the Bond Fund of the greatest of the following:
(1) An amount which will be in the same proportion to the net amount of
any Parity Bonds then outstanding (defined as the total amount of those bonds less the amount
of cash and investments in the Reserve Fund and any Parity Bond Funds) that Gross Revenue
from the portion of the Waterworks Utility sold or disposed of for the preceding year bears to
the total Gross Revenue for that period;
(2) An amount which will be in the same proportion to the net amount of
any Parity Bonds then outstanding (as defined above) that the Net Revenue from the portion of
the Waterworks Utility sold or disposed of for the preceding year bears to the total Net
Revenue for that period; or
(3) An amount which will be in the same proportion to the net amount of
any Parity Bonds then outstanding (as defined above) that the depreciated cost value of the
facilities sold or disposed of bears to the depreciated cost value of the entire Waterworks
Utility immediately prior to such sale or disposition.
Notwithstanding any other provision of this subsection, (1)the City in its discretion may
sell or otherwise dispose of any of the works, plant, properties or facilities of the Waterworks
Utility or any real or personal property comprising a part of the same which shall have become
unserviceable, inadequate, obsolete or unfit to be used in the operation of the Waterwork5
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Utility, or no longer necessary, material to or useful to the operation of the Waterworks Utility,
without making any deposit into the Bond Fund, and (2) the City may transfer the Waterworks
Utility to another municipal corporation so long as Net Revenue of the portion of the
Waterworks Utility so transferred is used for payment of debt service on the Parity Bonds prior
to any other purpose. In no event shall such proceeds be treated as Gross Revenue for
purposes of this ordinance.
(d) Books and Records. It will keep proper books, records and accounts with respect
to the operations, income and expenditures of the Waterworks Utility in accordance with
proper accounting procedures and any applicable rules and regulations prescribed by the State.
It will prepare annual financial and operating statements within 270 days of the close of each
fiscal year showing in reasonable detail the financial condition of the Waterworks Utility as of
the close of the previous year, and the income and expenses for such year, including the
amounts paid into the Bond Fund and Reserve Fund and into any and all special funds or
accounts created pursuant to this ordinance, the status of all funds and accounts as of the end
of such year, and the amounts expended for maintenance, renewals, replacements and capital
additions to the Waterworks Utility.
(e) No Free Service. Except to aid the poor or infirm, to provide for resource
conservation or to provide for the proper handling of hazardous materials, it will not furnish or
supply or permit the furnishing or supplying of any service or facility in connection with the
operation of the Waterworks Utility free of charge to any person, firm or corporation, public or
private, other than the City, so long as any Parity Bonds are outstanding. On at least an annual
basis, it will determine all accounts that are delinquent and will take all necessary action to
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enforce payment of such accounts against those property owners whose accounts are
delinquent.
(f) Insurance. It at all times will carry fire and extended coverage and such other
forms of insurance, including pubiic liability and property damage insurance, with responsible
insurers and with policies payable to or on behalf of the City and any additional insureds on
such of the buildings, equipment, works, plants, facilities and properties of the Waterworks
Utility, and against such claims for damages, as are ordinarily carried by municipal or privately
owned utilities engaged in the operation of like systems, or will implement and maintain a
self-insurance or an insurance pool program with reserves adequate, in the reasonable
judgment of the City, to protect the Waterworks Utility and the Registered Owners of the Parity
Bonds against loss.
(g) Maintenance and Operation Expense. It will pay all Maintenance and Operation
Expense and the debt service requirements for the outstanding Parity Bonds, and otherwise
meet the obligations of the City as herein set forth.
Section 8. Tax Covenants. The City shall take all actions necessary to assure the
exclusion of interest on the Bond from the gross income of the owners of the Bond 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 Bond, including but not limited to the following:
(a) Private Activity Bond Limitation. The City shall assure that the proceeds of the
Bond are not so used as to cause the Bond 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.
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(b) Limitations on Disposition of Improvements. The City shall not sell or otherwise
transfer or dispose of (i) any personal property components of the projects refinanced with
proceeds of the Bond (the "Projects") other than in the ordinary course of an established
government program under Treasury Regulation 1.141-2(d)(4) or (ii) any real property
components of the Projects, unless it has received an opinion of nationally recognized bond
counsel to the effect that such disposition shall not adversely affect the treatment of interest
on the Bond as excludable from gross income for federal income tax purposes.
(c) Federal Guarantee Prohibition. The City shall not take any action or permit or
suffer any action to be taken if the result of such action would be to cause the Bond to be
"federally guaranteed" within the meaning of Section 149(b) of the Code.
(d) Rebate Requirement. The City shall 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
Bond.
(e) No Arbitrage. The City shall not take, or permit or suffer to be taken, any action
with respect to the proceeds of the Bond 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 Bond would have caused the Bond to be an "arbitrage bond" within the meaning of Section
148 of the Code.
(f) Registration Covenant. The City shall maintain a system for recording the
ownership of the Bond that complies with the provisions of Section 149 of the Code until all
Bond have been surrendered and canceled.
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(g) Record Retention. The City shall retain its records of all accounting and
monitoring it carries out with respect to the Bond for at least three years after the Bond mature
or are redeemed (whichever is earlier); however, if the Bond are redeemed and refunded, the
City shall 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 Bond.
(h) Compliance with Federal Tax Certificate. The City shall comply with the
provisions of the Federal Tax Certificate with respect to the Bond, which are incorporated
herein as if fully set forth herein. The covenants of this section shall survive payment in full or
defeasance of the Bond.
(i) Bank Qualification. The City hereby designates the Bond for purposes of
paragraph (3) of Section 265(b) of the Code and represents that not more than $10,000,000
aggregate principal amount of obligations the interest on which is excludable (under Section
103(a) of the Code) from gross income for federal income tax purposes (excluding (i) private
activity bonds, as defined in Section 141 of the Code, except qualified 501(c)(3) bonds as
defined in Section 145 of the Code and (ii) current refunding obligations to the extent the
amount of the refunding obligation does not exceed the outstanding amount of the refunded
obligation), has been or will be issued by the City, including all subordinate entities of the City,
during the calendar year 2016.
Section 9. Future Parity Bonds. The City reserves the right to issue Future Parity Bonds
if the following conditions are met and complied with at the time of issuance of those
additional bonds:
(a) There shall be no deficiency in any Parity Bond Fund.
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(b) The ordinance providing for the issuance of such Future Parity Bonds shall
provide for the payment of the principal thereof and interest thereon out of a Parity Bond
Fund.
(c) The ordinance providing for the issuance of such Future Parity Bonds shall
provide for the deposit into the Reserve Fund from the proceeds of those Future Parity Bonds
of (1) an amount equal to the increase in the Reserve Requirement attributable to those Parity
Bonds or (2) Qualified Letter of Credit or Qualified Insurance or an amount plus Qualified Letter
of Credit or Qualified Insurance equal to the increase in the Reserve Requirement attributable
to those Future Parity Bonds. At the discretion of the City, the City may provide for deposit into
the Reserve Fund of other legally available money from Net Revenue or Qualified Letter of
Credit or Qualified Insurance on or prior to the date of issuance of such Future Parity Bonds.
(d) The ordinance authorizing the issuance of such Future Parity Bonds shall provide
for the payment of mandatory redemption or sinking fund requirements into the applicable
Parity Bond Fund for any Term Bonds to be issued and for regular payments to be made for the
payment of the principal of such Term Bonds on or before their maturity, or, as an alternative,
the mandatory redemption of those Term Bonds prior to their maturity date from money in the
applicable Parity Bond Fund.
(e) There shall be on file with the City either:
(1) a certificate of the Finance Director demonstrating that Net Revenue for
the Base Period, without regard to deposits into or withdrawals from the Rate Stabilization
Fund, is equal to at least the Parity Requirement; or
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(2) a certificate of a Professional Utility Consultant that in such Consultant's
opinion Net Revenue for the Base Period, as adjusted, without regard to deposits into or
withdrawals from the Rate Stabilization Fund, shall be equal to at least the Parity Requirement.
The Professional Utility Consultant, in estimating Net Revenue available for debt services, may
adjust Net Revenue to reflect:
(A) Any changes in rates in effect and being charged or expressly
committed by ordinance to be made in the future;
(B) Income derived from customers of the Waterworks Utility who
have become customers during the 12 consecutive month period or thereafter adjusted to
reflect one year's Net Revenue from those customers;
(C) Income from any customers to be connected to the Waterworks
Utility who have paid the required connection charges;
(D) The Professional Utility Consultant's estimate of the Net Revenue
to be derived from customers anticipated to connect for whom building permits have been
issued;
(E) Income received or to be received which is derived from any
person, firm corporation or municipal corporation under any executed contract for water,
sewage disposal or other utility service, which revenue was not included in the historical Net
Revenue;
(F) The Professional Utility Consultant's estimate of the Net Revenue
to be derived from customers with existing homes or buildings which will be required to
connect to any additions to and improvements and extensions of the Waterworks Utility
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constructed and to be paid for out of the proceeds of the sale of the additional Future Parity
Bonds or other additions to and improvements and extensions of the Waterworks Utility when
such additions, improvements and extensions are not completed; and
(G) Any increases or decrease in Net Revenue as a result of any actual
or reasonably anticipated changes in Maintenance and Operation Expense subsequent to the
12-month period.
(f) Refunding Obligations. If Future Parity Bonds proposed to be so issued are for
the sole purpose of refunding outstanding bonds payable from any Parity Bond Fund, such
certification of coverage shall not be required if the amount required for the payment of the
principal and interest in each year for the refunding bonds is not increased more than $5,000
over the amount for that same year required for the bonds or the portion of that bond issue to
be refunded thereby and if the maturities of such refunding bonds are not extended beyond
the maturities of the bonds to be refunded thereby.
Nothing contained herein shall prevent the City from issuing Future Parity Bonds to
refund maturing Parity Bonds, money for the payment of which is not otherwise available.
(g) Subordinate Lien Obligations. Nothing contained herein shall prevent the City
from issuing revenue bonds that are a charge upon Gross Revenue subordinate to the
payments required to be made therefrom into any Parity Bond Fund.
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Section 10. Form of Bond. The Bond shall be in substantially the following form:
UNITED STATES OF AMERICA
N0. R-1 $
STATE OF WASHINGTON
CITY OF RENTON
WATER AND SEWER REVENUE REFUNDING BOND, 2016
INTEREST RATE: %
MATURITY DATE: , 20[_]
REGISTERED OWNER:
PRINCIPAL AMOUNT: MILLION AND NO/100 DOLLARS
The City of Renton, Washington, a municipal corporation organized and existing under
and by virtue of the laws of the State of Washington (herein called the "City") hereby
acknowledges itself to owe and for value received promises to pay, but only from the sources
and as hereinafter provided, 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 the date of delivery, or the most recent date to which interest has been paid or
duly provided for, at the Interest Rate set forth above (the "Interest Rate"). Interest on this
bond shall accrue from its dated date until paid and shall be computed per annum on the
principal amount outstanding on a 30/360 basis. Principal of and accrued interest on this bond
shall be payable on the dates set forth in the payment schedule attached hereto.
Both principal of and interest on this bond are payable in lawful money of the United
States of America. Principal and interest on this bond shall be payable by check or warrant or
by other means mutually acceptable to the Registered Owner and the City. Upon final payment
of principal and interest of this bond, the Registered Owner shall surrender this bond for
cancellation at the office of the Bond Registrar in accordance with Ordinance No.
of the City (the "Bond Ordinance"). Reference is made to the Bond Ordinance and any and all
modifications and amendments thereto for a description of the nature and extent of the
security for this bond, the funds or revenues pledged, and the terms and conditions upon which
such bond is issued.
This bond is being issued for the purpose of refunding certain outstanding water and
sewer revenue bonds of the City and paying costs of issuance of the bond.
The City may prepay this bond as provided in the Bond Ordinance and in the
Commitment. [Any such prepayment may be subject to a prepayment fee.]
This bond has been designated by the City as a "qualified tax-exempt obligation" within
the meaning of Section 265(b) of the Internal Revenue Code of 1986, as amended (the "Code").
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This bond is payable solely from the Bond Fund and the Reserve Fund. The City has
irrevocably obligated and bound itself to pay into the Bond Fund out of the Net Revenue or
from such other moneys as may be provided therefor certain amounts necessary to pay and
secure the payment of the principal and interest on this bond. This bond is not a general
obligation of the City, the State or any other political subdivision.
The City does hereby pledge and bind itself to set aside from the Waterworks Utility
Fund out of the revenue of the Waterworks Utility and to pay into the Bond Fund and the
Reserve Fund the various amounts required by the Bond Ordinance to be paid into and
maintained in such Funds, all within the times provided by the Bond Ordinance. To the extent
more particularly provided by the Bond Ordinance, the amounts so pledged to be paid from the
Waterworks Utility Fund out of the revenue of the Waterworks Utility into the Bond Fund shall
be a lien and charge thereon equal in rank to the lien and charge upon said revenue of the
amounts required to pay and secure the payment of the Outstanding Parity Bonds and any
revenue bonds of the City hereafter issued on a parity with the bond and superior to all other
liens and charges of any kind or nature except Maintenance and Operation Expense.
This bond is issued under and in accordance with the provisions of the Constitution and
applicable statutes of the State of Washington and duly adopted ordinances of the City. The
City hereby covenants and agrees with the owner of this bond that it will keep and perform all
the covenants of this bond and of the Bond Ordinance to be by it kept and performed, and
reference is hereby made to the Bond Ordinance for a complete statement of such covenants.
This bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Bond Ordinance until the Certificate of Authentication hereon
shall have been manually signed by the Bond Registrar.
It is hereby certified that all acts, conditions, and things required by the Constitution and
statutes of the State of Washington to exist, to have happened, been done, and performed
precedent to and in the issuance of this bond have happened, been done, and performed.
IN WITNE55 WHEREOF, the City of Renton, Washington has caused this bond to be
signed with the facsimile or manual signature of the Mayor, to be attested by the facsimile or
manual signature of the City Clerk, all as of this day of , 2016.
CITY OF RENTON, WASHINGTON
[SEAL]
By /s/facsimile or manual
Mayor
ATTEST:
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/s/facsimile or manual
City Clerk
REGISTRATION CERTIFICATE
This bond is registered in the name of the Registered Owner on the books of the City, in
the office of the Finance Director of the City (the "Bond Registrar"), as to both principal and
interest, as noted in the registration blank below. All payments of principal of and interest on
this bond shall be made by the City from the Bond Fund.
Date of Name and Address of Signature of
Registration Registered Owner Bond Registrar
_, 2016
Finance Director
PAYMENT SCHEDULE
Principal and interest on this bond shall be payable as set forth in the following
schedule:
Date Principal Interest Total Payment
Section 11. Execution of Bond. The Bond shall be executed on behalf of the City with
the manual or facsimile signature of the Mayor, and shall be attested by the manual or
facsimile signature of the Clerk.
Only such Bond as shall bear thereon a Certificate of Authentication in the form earlier
recited, manually executed by the Bond Registrar, shall be valid or obligatory for any purpose or
entitled to the benefits of this ordinance. Such Certificate of Authentication shall be conclusive
evidence that the Bond so authenticated has been duly executed, authenticated and delivered
hereunder and is entitled to the benefits of this ordinance.
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fn case either of the officers who shall have executed the Bond shall cease to be an
officer or officers of the City before the Bond 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. The Bond may also be signed and attested on behalf of the City by such
persons who at the date of the actual execution of the 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 12. Right of Prepavment. The City may prepay the Bond in whole or in part on
any date as set forth in the Commitment and approved by a Designated Representative
pursuant to Section 13. If the Bond is prepaid in full, interest shall cease to accrue on the date
such prepayment occurs.
Section 13. Sale of Bond.
(a) Bond Sale. The Council has determined that it would be in the best interest of
the City to delegate for a limited time the authority to request proposals from financial
institutions to purchase the Bond and to approve the final terms of the Bond, as set forth in the
Commitment of the successful respondent. Each Designated Representative and the Placement
Agent are hereby authorized to solicit proposals to purchase the Bond and each Designated
Representative is further authorized to select the Bank that submits the proposal that is in the
best interest of the City.
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Subject to the terms and conditions set forth in this Section 13, each Designated
Representative is hereby authorized to select the Bank, to designate all or a portion of the
Refunding Candidates as Refunded Bonds, to approve the principal amount, principal payment
dates, dated date, denominations, interest payment dates, redemption/prepayment provisions
and interest rate or rates for the Bond, to accept the Commitment, to agree to any additional
terms and covenants that are in the best interest of the City and consistent with this ordinance,
and to execute the sale of the Bond to the Bank; provided that:
(1) the principal amount of the Bond does not exceed $9,500,000,
(2) the final maturity of the Bond is no later than December 1, 2027,
(3) the Bond is sold at a price not less than 97%and not greater than 105%,
(4) the Bond is sold for a price that results in a minimum net present value
debt service savings over the Refunded Bonds of 5%, and
(5) the true interest cost for the Bond does not exceed 3.00%.
(b) Report to Council; Expiration of Authority. Following the sale of the Bond, a
Designated Representative shall provide a report to Council describing the sale and final terms
of the Bond approved pursuant to the authority delegated in this section. The authority
granted to the Designated Representatives by this section shall expire on December 31, 2016.
If the Bond has not been sold by December 31, 2016, the authorization for the issuance of the
Bond shall be rescinded, and the Bond shall not be issued nor its sale approved unless such
Bond shall have been re-authorized by ordinance of the Council. The ordinance re-authorizing
the issuance and sale of such Bond 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
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Commitment or establishing terms and conditions for the authority delegated under this
Section 13.
(c) Delivery of Bond; Documentation. Upon the passage and approval of this
ordinance, the proper officials of the City, including the Designated Representatives, are
authorized and directed to undertake all action necessary for the prompt execution and
delivery of the Bond to the Bank and further to execute all closing certificates, agreements, loan
agreements, and documents required to effect the closing and delivery of the Bond in
accordance with the terms of the Commitment.
Section 14. Application of Bond Proceeds; Plan of Refundin�.
(a) Refunding Plan. For the purpose of realizing a debt service savings and
benefiting the City's ratepayers, the Council proposes to refund and defease the Refunded
Bonds as set forth herein. The Refunded Bonds shall include those Refunding Candidates
designated by a Designated City Representative and identified in the Escrow Agreement.
Proceeds of the Bond shall be deposited with the Escrow Agent pursuant to the Escrow
Agreement to be used immediately upon receipt thereof to defease the Refunded Bonds as
authorized by the 2008 Bond Ordinance and to pay costs of issuance of the Bond.
The net proceeds deposited with the Escrow Agent shall be used to defease the
Refunded Bonds and discharge the obligations thereon by the purchase of 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:
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(1) interest on the Refunded Bonds due and payable on and prior to the Call
Date; and
(2) the redemption prices of the Refunded Bonds on the Call Date.
Such Acquired Obligations shall be purchased at a yield not greater than the yield
permitted by the Code and regulations relating to acquired obligations in connection with
refunding bond issues.
(b) Escrow Agent/Escrow Agreement. The City hereby appoints U.S. Bank National
Association, Seattle, Washington, as the Escrow Agent for the Refunded Bonds (the "Escrow
Agent"). A beginning cash balance, if any, and the Acquired Obligations shall be deposited
irrevocably with the Escrow Agent in an amount sufficient to defease the Refunded Bonds. The
proceeds of the Bond 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 Bond.
In order to carry out the purposes of this Section 14, the Finance Director is authorized
and directed to execute and deliver to the Escrow Agent, an Escrow Agreement.
(c) Call for Redemption of Refunded Bonds. The Designated Representatives are
hereby authorized to set aside sufficient funds out of the purchase of Acquired Obligations
from proceeds of the Bond to make the payments described in Section 14(d).
The Designated Representatives are hereby authorized to call the Refunded Bonds for
redemption on their Call Date in accordance with the provisions of the 2008 Bond Ordinance
authorizing the redemption and retirement of the 2008A Bonds prior to their fixed maturities.
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ORDINANCE N0. 5812
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Said defeasance and call for redemption of the Refunded Bonds shall be irrevocable
after the issuance of the Bond and delivery of the 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 the
2008 Bond Ordinance. 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 ordinance. All such sums shall be
paid from the 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, which is hereby authorized to be created. 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 15. On�oing Disclosure; Additional Covenants.
(a) Ongoing Disclosure. The Bond is exempt from ongoing disclosure requirements
of the Rule.
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(b) Covenants. The City may agree to provide the Bank certain financial or other
information and agree to such additional covenants as determined to be necessary by a
Designated Representative and as set forth in the Commitment and approved by the
Designated Representative pursuant to Section 13.
Section 16. Lost, Stolen or Destroyed Bond. In case the Bond shall be lost, stolen or
destroyed while in the Registered Owner's possession, the Bond Registrar may at the request of
the Registered Owner execute and deliver a new Bond of like date, number and tenor to the
Registered Owner thereof upon the Registered Owner's paying the expenses and charges of the
City and the Bond Registrar in connection therewith and upon its filing with the City written
certification that such Bond was actually lost, stolen or destroyed and of its ownership thereof.
In the case the Bond shall be lost, stolen, or destroyed while in the Registered Owner's
possession, the Registered Owner may elect upon final payment of principal and interest of the
Bond to surrender a photocopy of the Bond for cancellation at the office of the Bond Registrar
together with written certification that such Bond was actually lost, stolen or destroyed and of
its ownership thereof.
Section 17. Contract; Savings Clause. The covenants contained in this ordinance and
in the Bond shall constitute a contract between the City and the Registered Owner of the Bond.
If any one or more of the covenants or agreements provided in this ordinance to be performed
on the part of the City shall be declared by any court of competent jurisdiction and after final
appeal (if any appeal be taken) to be contrary to law, then such covenant or covenants,
agreement or agreements, shall be null and void and shall be deemed separable from the
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ORDINANCE NO. 5896
Section 19. Effective Date. This ordinance shall be effective upon its passage,
approval, and thirty (30) days after publication.
PASSED by the City Council this 19th day of November, 2018.
Jason A. Set , CMC, C Clerk
APPROVED BY THE MAYOR this 19th day of Nov mbe ,��2��0��1��8.
Deni Law, Mayor
Approved as to form:
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Pacifica Law Group LLP " L: -
Bond Counsel = SEAL '- *
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Date of Publication: 11/23/2018 (Summary) '% cv ,moo;
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ORDINANCE N0. 5812
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CERTIFICATE
I, the undersigned, City Clerk of the City Council of the City of Renton, Washington (the
"City"), DO HEREBY CERTIFY:
1. The attached copy of Ordinance No. 5 �Z- (the "Ordinance") is a full, true
and correct copy of an ordinance duly passed at a regular meeting of the City Council of the City
held at the regular meeting place thereof on July 11, 2016, as that ordinance appears on the
minute book of the City; and the Ordinance will be in full force and effect after publication in
the City's official newspaper as provided by law; and
2. A quorum of the members of the City Council was present throughout the
�
meeting and a majority of those members present voted in the proper manner for the passage
of the Ordinance.
IN WITNESS WHEREOF, I have hereunto set my hand this 11th day of July, 2016.
Jason A/Seth, City Clerk
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