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HomeMy WebLinkAboutWater & Sewer Refunding Bond - 2017 CITY OF RENTON, WASHINGTON WATER AND SEWER REVENUE REFUNDING BOND, 2017 ORDINANCE NO. 5846 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 $6,500,000 FOR THE PURPOSE OF REFUNDING A PORTION OF THE CITY'S WATER AND SEWER REVENUE AND REFUNDING BONDS, 2007; 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: June 19, 2017 PREPARED BY: PACIFICA LAW GROUP LLP Seattle, Washington 10018 00011 ge17ct42hq ORDINANCE NO. 5846 TABLE OF CONTENTS* Section1. Definitions......................................................................................................................3 Section 2. Findings Regarding Parity Provisions...........................................................................12 Section 3. Authorization and Description of Bond .......................................................................13 Section4. Registration of Bond ....................................................................................................14 Section 5. Priority and Payment from the Waterworks Utility Fund............................................15 Section 6. Funds and Accounts.....................................................................................................17 Section7. Covenants.....................................................................................................................20 Section8. Tax Covenants..............................................................................................................23 Section9. Future Parity Bonds......................................................................................................25 Section10. Form of Bond .............................................................................................................28 Section11. Execution of Bond......................................................................................................28 Section12. Right of Prepayment..................................................................................................29 Section13. Sale of Bond ...............................................................................................................29 Section 14. Application of Bond Proceeds; Plan of Refunding.....................................................31 Section 15. Ongoing Disclosure; Additiona) Covenants................................................................34 Section 16. Lost, Stolen or Destroyed Bond .................................................................................34 Section 17. Contract; Savings Clause............................................................................................34 Section 18. General Authorization, Ratification of Prior Acts ......................................................35 Section 19. Effective Date of Ordinance.......................................................................................35 Exhibit A Form of Bond This Table of Contents is provided for convenience only and is not a part of this ordinance. -i- 10018 00011 ge17ct42hq CITY OF RENTON, WASHINGTON ORDINANCE N0. 5846 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 $6,500,000 FOR THE PURPOSE OF REFUNDING A PORTION OF THE CITY'S WATER AND SEWER REVENUE AND REFUNDING BONDS, 2007; 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 $ 7,120,000 2008A 5313 9,975,000 695,000 2012 5672 9,190,000 9,045,000 2016 5812 9,385,000 9,230,000 (together, the "Outstanding Parity Bonds"); and WHEREAS, the Water and Sewer Revenue and Refunding Bonds, 2007, issued on November 6, 2007 (the "2007 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 10018 00011 ge17ct42hq ORDINANCE N0. 5846 WHEREAS, after due consideration it appears to the City Council (the "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 WHEREAS, the Council wishes to delegate authority to the Mayor, the Chief Administrative Officer and the Administrative Services Administrator 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 DO ORDAIN AS FOLLOWS: -2- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 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. Administrative Services Administrator means the City's Administrative Services Administrator or the successor to such officer. Annual 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. Afrer all of the Outsranding Parity Bonds issued prior to 2016 are fully 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. ease 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. -3- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 Bond means the City's Water and Sewer Revenue Refunding Bond, 2017, or other such series designation as approved by a Designated Representative, authorized to be issued by this ordinance. Bond Fund means that special fund of the City known as the Waterworks Revenue Bond Fund, 2017 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 Administrative Services Administrator, 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. Chief Administrative Officer means the City's Chief Administrative Officer or the successor to such officer. Ciry means the City of Renton, Washington, a municipal corporation duly organized and existing by virtue of the laws of the State. Code means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bond or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bond, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Code. Commission means the Securities and Exchange Commission. Commitment means the commitment of the Bank to purchase the Bond. -4- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 Council means the City Council as the generat legislative authority of the City, as duly and regularly constituted from time to time. Coverage Requiremenr means in any calendar year 1.25 times the Annual Debt Service for such year. Credit Facility 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 Administrative Services Administrator 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. 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 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 -5- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 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 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. Federa/ Tax Certificate means the Federal Tax Certificate signed by the Administrative Services Administrator pertaining to the tax-exemption of interest on the Bond. 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 Obligaiions means direct or indirect obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America. 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 -6- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 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. 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 DebtService 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. Mayor means the duly elected Mayor of the City or the successor to such officer. 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 -7- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 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 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 Bond Fund means any fund created for the payment and redemption of Parity Bonds. Parity Bonds means the Outstanding Parity Bonds, the Bond, and any Future Parity Bonds. -8- 10018 00011 ge17ct42hq ORDINANCE NO. 5846 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. Professional 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 character to the Waterworks Utility in such areas as are relevant to the purposes for which such consultant is retained. Qualified /nsurance 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 Letter 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. -9- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 Rate Stabilization Fund means the Waterworks Rate Stabilization Fund created by the City pursuant to Ordinance No. 4709. Rating Agency means Moody's, S&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 2007 Bonds maturing on or after December 1, 2018. 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% 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 S&P Global Ratings, 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 -10- 10018 00011 ge17ct42hq ORDINANCE NO. 5846 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 payment 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. Term Bond Maturity Year means any calendar year in which Term Bonds are scheduled to mature. 2007 Bond Ordinance means Ordinance No. 5313 passed by the City Council on October 22, 2007 and Resolution No. 3912 adopted by the Council on October 22, 2007 authorizing the issuance of the 2007 Bonds. 2007 Bonds means the Water and Sewer Revenue and Refunding Bonds, 2007, of the City issued on November 6, 2007. 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. -11- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 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 or feminine gender shall mean and include correlative words of any gender and words importing the singular number shall mean and include the plural number and vice versa; (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 -12- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 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 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 $6,500,000 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, 2017" or other such designation as set forth in the Bond and approved by the Administrative Services Administrator. 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 the principal amount of not to exceed $6,500,000, and shall mature on the date(s) 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(s) 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 -13- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 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. Section 4. Re�istration of Bond. (a) Registrar/Bond Registrar. The Administrative Services Administrator 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 (iij 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. -14- 10018 00011 ge17ct42hq ORDINANCE NO. 5846 Notwithstanding the foregoing, the Bond may be transferred upon satisfaction of the requirements, if any, set forth 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 Owner shall surrender the Bond for cancellation at the office of the Bond Registrar in accordance with this ordinance. Section 5. Prioritv and Pavment from the Waterworks Utilitv Fund. (a) Waterworks Urility 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; -15- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 (iii) To pay the principat 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; (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 �ien 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 -16- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 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 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, 2017 (the "Bond Fund"), which shall be a "Parity Bond Fund" and a subaccount of the Waterworks Utility Fund. The Bond Fund shall 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 interest 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 -17- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 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. 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 shall 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 -18- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 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. 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. -19- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 (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. Section 7. Covenants. The City covenants and agrees with the Registered Owner of the Bond as follows: (a) Rate Covenanr. 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 (C) 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. -20- 10018 00011 ge17ct42hq ORDINANCE NO. 5846 (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. 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. -21- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 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 Waterworks 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 -22- 10018 00011 ge17ct42hq ORDINANCE NO. 5846 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 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 public liability and property damage insurance, with responsible insurers and with policies payabte 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: -23- 10018 00011 ge17ct42hq ORDINANCE NO. 5846 (a) Private Activity eond 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. (b) Limitations on Disposirion 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. -24- 10018 00011 ge17ct42hq ORDINANCE NO. 5846 (f) Regisrration 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. (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 matures or is redeemed (whichever is earlier); however, if the Bond is 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. In the Federal Tax Certificate the City may designate the Bond as a "qualified tax-exempt obligation" for purposes of paragraph (3) of Section 265(b) of the Code. Section 9. Future Paritv 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. (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. -25- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 (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 Administrative Services Administrator 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 (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. -26- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 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 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 -27- 10018 00011 ge17ct42hq ORDINANCE NO. 5846 (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. Section 10. Form of Bond. The Bond shall be in substantially the form set forth in Exhibit A, which is incorporated herein by this reference. 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 -28- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 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. In 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. Ri�ht of Prepayment. The City may prepay the Bond at the times, if any, and in the amounts, if any, set forth in the Bond. 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 is hereby authorized to solicit proposals to purchase the Bond and each Designated Representative is -29- 10018 00011 ge17ct42hq ORDINANCE NO. 5846 further authorized to select the Bank that submits the proposal that is in the best interest of the City. 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 $6,500,000, (2) the final maturity of the Bond is no later than December 1, 2022, (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 4.00%, 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, 2017. If the Bond has not been sold by December 31, 2017, 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 -30- 10018 00011 ge17ct42hq ORDINANCE NO. 5846 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 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 ctosing 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 2007 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 -31- 10018 00011 ge17d42hq ORDINANCE NO. 5846 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: (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 Administrative Services Administrator is authorized and directed to execute and deliver to the Escrow Agent, an Escrow Agreement. (c) Call for Redemption of Refunded eonds. 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). -32- 10018 00011 ge17d42hq ORDINANCE NO. 5846 The Designated Representatives are hereby authorized to call the Refunded Bonds for redemption on their Call Date in accordance with the provisions of the 2007 Bond Ordinance authorizing the redemption and retirement of the 2007 Bonds prior to their fixed maturities. 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 2007 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 Administrative Services Administrator, or, at the direction of the Administrative Services Administrator, 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 Administrative Services Administrator 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 Administrative Services Administrator) 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. -33- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 Section 15. On�oin� Disclosure; Additional Covenants. (a) Ongoing Disclosure. The Bond is exempt from ongoing disclosure requirements of the Rule. (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 Destroved 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: Savin�s 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 -34- 10018 00011 ge17ct42hq ORDINANCE NO. 5846 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 remaining covenants and agreements in this ordinance and shall in no way affect the validity of the other provisions of this ordinance or of the Bond. Section 18. General Authorization; Ratification of Prior Acts. The Designated Representatives, the City Clerk, and other appropriate officers of the City are authorized to take any actions and to execute documents as in their judgment may be necessary or desirable in order to carry out the terms of, and complete the transactions contemplated by, this ordinance. All acts taken pursuant to the authority of this ordinance but prior to its effective date are hereby ratified. Section 19. Effective Date of Ordinance. This ordinance shall be effective upon its passage, approval, and thirty (30) days after publication. PASSED by the City Council this 19th day of June, 201 . ����������+���,,,,�� .��'���pF R E N TO��''�. `G`,``��,,,�,,,��,,,,,,����'/,S, ,,��i' � _ _ � , , Jason A. eth, CMC, City Clerk " ' �AL = * = ' � S ' o _ : �,, "� - � = A P P R O V E D B Y T H E M A Y O R t h i s 1 9 t h d a y o f J u n e, 0 1 7 r�'�•,�r��''��,,,,,,,,,�,����`O�`�°°�,� '����i���pORATEO`'��•`��`• Denis Law, Mayor Approved as to form: � � r Pa ' ' Law Group LLP Bond Counsel Date of Publication: 6/23/2017 (summary) -35- 10018 00011 ge17ct42hq ORDINANCE �0. 5846 Exhibit A Form of Bond TRANSFER RESTRICTED THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR JURISDICTION, THIS BOND IS SUBJECT TO CERTAIN TRANSFER RESTRICTIONS AS PROVIDED IN THE BOND ORDINANCE DESCRIBED BELOW AND MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO THE TERMS THEREOF. UNITED STATES OF AMERICA NO. R-1 $ STATE OF WASHINGTON CITY OF RENTON WATER AND SEWER REVENUE REFUNDING BOND, 2017 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 10018 00011 ge17ct42hq ORDINANCE NO. 5846 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 [insert prepayment terms]. [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"). 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 itsetf 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. [insert transfer provisions, if any] 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 shalt 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. A-2- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 IN WITNESS 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 , 2017. CITY OF RENTON, WASHINGTON [SEAL) By_ /s/facsimile or manual Mayor ATTEST: /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 Administrative Services Administrator 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 _, 2017 Administrative Services Administrator PAYMENT SCHEDULE Principal and interest on this bond shall be payable as set forth in the following schedule: Date Principal Interest Total Payment A-3- 10018 00011 ge17ct42hq ORDINANCE N0. 5846 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. �J � (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 June 19, 2017, 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 19th day of June, 2017. �� Jason A. Seth, CMC, City Clerk 10018 00011 ge17ct42hq