HomeMy WebLinkAboutORD 5672CITY OF RENTON, WASHINGTON
WATER AND SEWER REVENUE REFUNDING BONDS, 2012
ORDINANCE NO. 5672
AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, AUTHORIZING
THE ISSUANCE OF WATER AND SEWER REVENUE REFUNDING BONDS IN
THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $10,000,000 FOR
THE PURPOSE OF REFUNDING A PORTION OF THE CITY'S WATER AND
SEWER REVENUE BONDS, 2004; PROVIDING THE FORM, TERMS AND
COVENANTS OF THE BONDS; AUTHORIZING THE APPOINTMENT OF AN
ESCROW AGENT AND EXECUTION OF AN ESCROW AGREEMENT;
DELEGATING CERTAIN AUTHORITY TO APPROVE THE FINAL TERMS OF THE
BONDS; AND AUTHORIZING THE CASH REDEMPTION OF THE CITY'S WATER
AND SEWER REVENUE REFUNDING BONDS, 1998.
PASSED: Octoberl_5_th, 2012
PREPARED BY:
PACIFICA LAW GROUP LLP
Seattle, Washington
ORDINANCE NO. 5672
TABLE OF CONTENTS*
Section 1. Definitions 3
Section 2. Findings Regarding Parity Provisions 14
Section 3. Authorization and Description of Bonds 14
Section 4. Registration of Bonds and Book-Entry System 15
Section 5. Redemption; Purchase of Bonds 21
Section 6. Priority and Payment from the Waterworks Utility Fund 25
Section 7. Funds and Accounts 27
Section 8. Covenants 29
Section 9. Tax Covenants 33
Section 10. Future Parity Bonds 36
Section 11. Form of Bonds 39
Section 12. Execution of Bonds 42
Section 13. Lost, Stolen or Destroyed Bonds 42
Section 14. Sale of Bonds 43
Section 15. Application of Bond Proceeds; Plan of Refunding 45
Section 16. Bond Insurance 48
Section 17. Undertaking to Provide Continuing Disclosure 48
Section 18. Defeasance ofthe Bonds 53
Section 19. Amendments 53
Section 20. Call for Redemption of 1998 Bonds 56
Section 21. Contract; Savings Clause 56
Section 22. General Authorization, Ratification of Prior Acts 57
Section 23. Effective Date of Ordinance 57
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. 5672
AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, AUTHORIZING
THE ISSUANCE OF WATER AND SEWER REVENUE REFUNDING BONDS IN
THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $10,000,000 FOR
THE PURPOSE OF REFUNDING A PORTION OF THE CITY'S WATER AND
SEWER REVENUE BONDS, 2004; PROVIDING THE FORM, TERMS AND
COVENANTS OF THE BONDS; AUTHORIZING THE APPOINTMENT OF AN
ESCROW AGENT AND EXECUTION OF AN ESCROW AGREEMENT;
DELEGATING CERTAIN AUTHORITY TO APPROVE THE FINAL TERMS OF THE
BONDS; AND AUTHORIZING THE CASH REDEMPTION OF THE CITY'S WATER
AND SEWER REVENUE REFUNDING BONDS, 1998.
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 (the "Waterworks Utility"); and
WHEREAS, the City issued and now has outstanding the following series of water and
sewer revenue bonds, each being payable on parity from the revenues of the Waterworks
Utility:
Series
Authorizing
Ordinance
Original
Principal Amount
Outstanding
Principal Amount
1998
2002
2003
2004
2007
2008A
2008B
4709
4976
5019
5098
5313
5313
5313
$ 6,120,000
11,980,000
8,035,000
10,335,000
9,750,000
9,975,000
2,035,000
$ 1,045,000
1,025,000
415,000
10,335,000
9,705,000
9,975,000
2,035,000
(collectively, the "Outstanding Parity Bonds"); and
ORDINANCE NO. 5672
WHEREAS, the Outstanding Parity Bonds issued under date of November 1, 2004
mature in principal amounts and bear interest as follows:
Maturity Date Principal Interest
(December 1) Amount Rate
2013 $ 205,000 3.55%
2014 235,000 3.65
2015 250,000 3.75
2024* 4,605,000 5.00
2025 1,600,000 5.00
2026 1,680,000 5.00
2027 1,760,000 5.00
Term Bond
(the "2004 Bonds"); and
WHEREAS, the 2004 Bonds maturing on and after December 1, 2015 (the "Refunding
Candidates"), are subject to optional redemption, in whole or in part, on any date on and after
December 1, 2014, 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
water and sewer revenue refunding bonds authorized herein (the "Bonds") at a substantial
savings to the City and its ratepayers; and
WHEREAS, the respective ordinances authorizing the issuance ofthe 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 City has received a proposal from Seattle-Northwest Securities
Corporation, Seattle, Washington (the "Underwriter") and now desires to issue and sell the
Bonds to the Underwriter as set forth herein; and
ORDINANCE NO. 5672
WHEREAS, the Outstanding Parity Bonds issued under date of March 1, 1998 (the "1998
Bonds") maturing on December 1, 2012 and December 1, 2013 are subject to optional
redemption, in whole or in part, on any date on and after December 1, 2008, at a price of par
plus interest accrued to the date of redemption; and
WHEREAS, the City now desires to use available funds of the City refund in whole the
outstanding 1998 Bonds on December 1, 2012;
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.
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.
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.
ORDINANCE NO. 5672
Beneficial Owner means any person that has or shares the power, directly or indirectly
to make investment decisions concerning ownership of any Bonds (including persons holding
Bonds through nominees, depositories or other intermediaries).
Bond Fund means that special fund of the City known as the Waterworks Revenue Bond
Fund, 2012 created by this ordinance for the payment of the principal of and interest on the
Bonds.
Bond Insurance Policy means the municipal bond insurance policy, if any, issued by the
Insurer insuring the payment when due of the principal of and interest on all or a portion of the
Bonds as provided therein.
Bond Purchase Contract means the contract for the purchase of the Bonds between the
Underwriter and City, executed pursuant to Section 14 of this ordinance.
Bond Register means the registration books showing the name, address and tax
identification number of each Registered Owner of the Bonds, maintained pursuant to
Section 149(a) ofthe Code.
Bond Registrar means, initially, the fiscal agency of the State of Washington, for the
purposes of registering and authenticating the Bonds, maintaining the Bond Register, effecting
transfer of ownership of the Bonds and paying interest on and principal of the Bonds.
Bond Year means each one-year period that ends on the date selected by the City. The
first and last Bond Years may be short periods. If no day is selected by the City before the
earlier of the final maturity date of the Bonds or the date that is five years after the date of
issuance of the Bonds, Bond Years end on each anniversary of the date of issue and on the final
maturity date of the Bonds.
ORDINANCE NO. 5672
Bonds mean the City's Water and Sewer Revenue Refunding Bonds, 2012, authorized to
be issued by this ordinance.
Call Date for the Refunded Bonds means December 1, 2014.
City means the City of Renton, Washington, a municipal corporation duly organized and
existing by virtue of the laws of the State of Washington
Code means the Internal Revenue Code of 1986, as amended, and shall include all
applicable regulations and rulings relating thereto.
Commission means the Securities and Exchange Commission.
Council means the City Council as the general legislative authority of the City, as duly
and regularly constituted from time to time.
Coverage Requirement prior to the New Covenant Date means in any calendar year
1.25 times the Maximum Annual Debt Service. From and after the New Covenant Date, the
term Coverage Requirement 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.
Designated City Representative means the Mayor, the Chief Administrative Officer and
the Finance Director of the City and any successor to the functions of such offices. The
signature of one Designated City Representative shall be sufficient to bind the City.
ORDINANCE NO. 5672
DTC means The Depository Trust Company, New York, New York, a limited purpose trust
company organized under the laws of the State of New York, as depository for the Bonds
pursuant to this ordinance.
Escrow Agent 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 Bonds.
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 ofthe 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 Bonds 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 Bonds.
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
ORDINANCE NO. 5672
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.
Insurer means the municipal bond insurance company, if any, selected and designated
by the Designated City Representative, pursuant to Section 16 of this ordinance, as issuer of a
Bond Insurance Policy for all or a portion of the Bonds.
Letter of Representations means the Blanket Issuer Letter of Representations from the
City to DTC.
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.
ORDINANCE NO. 5672
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.
MSRB means the Municipal Securities Rulemaking Board or any successors to its
functions.
Net Proceeds, when used with reference with the Bonds, means the principal amount of
the Bonds, plus accrued interest and original issue premium, if any, and less original issue
discount, if any.
Net Revenue means Gross Revenue less Maintenance and Operation Expense.
New Covenant Date means from and after the date when all Outstanding Parity Bonds
issued prior to 2007 are no longer Outstanding.
1998 Bond Ordinance means Ordinance No. 4709 adopted by the City Council on
March 9,1998 authorizing the issuance ofthe 1998 Bonds.
1998 Bonds mean the Outstanding City of Renton, Washington, Water and Sewer
Revenue Refunding Bonds, 1998, with a dated date of March 1,1998.
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
ORDINANCE NO. 5672
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 parity water and sewer revenue bonds of the City
identified in the recitals to this ordinance.
Parity Bonds means the Outstanding Parity Bonds, the Bonds and any Future Parity
Bonds.
Parity Bond Fund means any fund created for the payment and redemption of Parity
Bonds.
Parity Requirement means Net Revenues 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.
Private Person means any natural person engaged in a trade or business or any trust,
estate, partnership, association, company or corporation.
ORDINANCE NO. 5672
Private Person Use means the use of property in a trade or business by a Private Person
if such use is other than as a member of the general public. Private Person Use includes
ownership of the property by the Private Person as well as other arrangements that transfer to
the Private Person the actual or beneficial use ofthe property (such as a lease, management or
incentive payment contract or other special arrangement) in such a manner as to set the
Private Person apart from the general public. Use of property as a member of the general
public includes attendance by the Private Person at municipal meetings or business rental of
property to the Private Person on a day-to-day basis if the rental paid by such Private Person is
the same as the rental paid by any Private Person who desires to rent the property. Use of
property by nonprofit community groups or community recreational groups is not treated as
Private Person Use if such use is incidental to the governmental uses of property, the property
is made available for such use by all such community groups on an equal basis and such
community groups are charged only a de minimis fee to cover custodial expenses.
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 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
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ORDINANCE NO. 5672
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 owners of the Bonds, which
institution maintains an office, agency or branch in the United States and as of the time of
issuance of such letter of credit, is currently rated in 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 Agency means Moody's, S&P or Fitch.
Refunded Bonds means the 2004 Bonds designated by the Designated City
Representative pursuant to Section 15.
Refunding Account means the account by that name established pursuant to Section 15.
Refunding Candidates mean the outstanding 2004 Bonds maturing on and after
December 1, 2015.
Registered Owner means the person named as the registered owner of a Bond in the
Bond Register. For so long as the Bonds are held in book-entry only form, DTC shall be deemed
to be the sole Registered Owner.
Reserve Fund means that special fund of the City known as the Waterworks Revenue
Bond Reserve Fund created by Ordinance No. 4709.
Reserve Requirement prior to the New Covenant Date means Maximum Annual Debt
Service. From and after the New Covenant Date, the term Reserve Requirement means with
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ORDINANCE NO. 5672
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 Standard & Poor's rating Services, a Standard & Poor's Financial Services LLC
business, 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 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.
2004 Bond Ordinance means Ordinance No. 5098 adopted by the City Council on
November 1, 2004 authorizing the issuance of the 2004 Bonds.
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ORDINANCE NO. 5672
2004 Bonds means the Water and Sewer Revenue Bonds, 2004, of the City issued under
date of November 1, 2004, as more particularly described in the recitals of this ordinance.
Underwriter means Seattle-Northwest Securities Corporation, Seattle, Washington.
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;
(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
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ORDINANCE NO. 5672
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. Findings Regarding Parity Provisions. The City Council hereby finds that there
is no deficiency in any Parity Bond Fund, that provisions hereinafter meet the conditions forthe
issuance of Future Parity Bonds as set forth in the Parity Bond Ordinances for the Outstanding
Parity Bonds, and that the issuance of the Bonds 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 Bonds over and above the payments that were required to be
made for the Refunded Bonds.
The conditions contained in the Parity Bond Ordinances for the Outstanding Parity
Bonds 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 ofthe principal of and interest on the Bonds 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 Bonds. The City is hereby authorized to
issue water and sewer revenue refunding bonds (the "Bonds") in an aggregate principal amount
of not to exceed $10,000,000 for the purpose of providing the funds necessary to refund the
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ORDINANCE NO. 5672
Refunded Bonds and pay all or a portion of the costs incidental to the foregoing and to the
issuance ofthe Bonds.
The Bonds shall be designated the "City of Renton, Washington Water and Sewer
Revenue Refunding Bonds, 2012" with any additional series designation, if necessary; shall be
dated as of their initial date of delivery; shall be fully registered as to both principal and
interest; shall be in the denomination of $5,000 each, or any integral multiple thereof within a
maturity, provided that no Bond shall represent more than one maturity; shall be numbered
separately in such manner and with any additional designation as the Bond Registrar deems
necessary for purposes of identification; shall bear interest from their date, payable
semiannually on the interest payment dates set forth in the Bond Purchase Contract; and shall
mature on December 1 in the years and principal amounts set forth and approved in the Bond
Purchase Contract executed by the Designated City Representative pursuant to Section 14 of
this ordinance.
The Bonds shall be payable solely out ofthe Bond Fund and the Reserve Fund and shall
not be general obligations ofthe City.
Section 4. Registration of Bonds and Book-Entry System.
(a) Bond Registrar/Bond Register. The City hereby specifies and adopts the system
of registration approved by the Washington State Finance Committee from time to time
through the appointment of state fiscal agencies. The City shall cause a bond register to be
maintained by the Bond Registrar. So long as any Bonds remain outstanding, the Bond
Registrar shall make all necessary provisions to permit the exchange or registration or transfer
of Bonds at its principal corporate trust office. The Bond Registrar may be removed at any time
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at the option of the Finance Director upon prior notice to the Bond Registrar and a successor
Bond Registrar appointed by the Finance Director. No resignation or removal of the Bond
Registrar shall be effective until a successor shall have been appointed and until the successor
Bond Registrar shall have accepted the duties of the Bond Registrar hereunder. The Bond
Registrar is authorized, on behalf of the City, to authenticate and deliver Bonds transferred or
exchanged in accordance with the provisions of such Bonds and this ordinance and to carry out
all ofthe Bond Registrar's powers and duties under this ordinance. The Bond Registrar shall be
responsible for its representations contained in the Certificate of Authentication ofthe Bonds.
(b) Registered Ownership. The City and the Bond Registrar, each in its discretion,
may deem and treat the Registered Owner of each Bond as the absolute owner thereof for all
purposes (except as provided in Section 17 of this ordinance), and neither the City nor the Bond
Registrar shall be affected by any notice to the contrary. Payment of any such Bond shall be
made only as described in Section 4(h), but such Bond may be transferred as herein provided.
All such payments made as described in Section 4(h) shall be valid and shall satisfy and
discharge the liability of the City upon such Bond to the extent of the amount or amounts so
paid.
(c) DTC Acceptance/Letters of Representations. The Bonds initially shall be held by
DTC acting as depository. To induce DTC to accept the Bonds as eligible for deposit at DTC, the
City has executed and delivered to DTC a Blanket Issuer Letter of Representations. Neither the
City nor the Bond Registrar will have any responsibility or obligation to DTC participants or the
persons for whom they act as nominees (or any successor depository) with respect to the
Bonds in respect of the accuracy of any records maintained by DTC (or any successor
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depository) or any DTC participant, the payment by DTC (or any successor depository) or any
DTC participant of any amount in respect of the principal of or interest on Bonds, any notice
which is permitted or required to be given to Registered Owners under this ordinance (except
such notices as shall be required to be given by the City to the Bond Registrar or to DTC (or any
successor depository)), or any consent given or other action taken by DTC (or any successor
depository) as the Registered Owner. For so long as any Bonds are held in by a depository, DTC
or its successor depository shall be deemed to be the Registered Owner for all purposes
hereunder, and all references herein to the Registered Owners shall mean DTC (or any
successor depository) or its nominee and shall not mean the owners of any beneficial interest in
such Bonds.
If any Bond shall be duly presented for payment and funds have not been duly provided
by the City on such applicable date, then interest shall continue to accrue thereafter on the
unpaid principal thereof at the rate stated on such Bond until it is paid.
(d) Use of Depository.
(1) The Bonds shall be registered initially in the name of "Cede & Co.", as
nominee of DTC, with one Bond maturing on each of the maturity dates for the Bonds in a
denomination corresponding to the total principal therein designated to mature on such date.
Registered ownership of such Bonds, or any portions thereof, may not thereafter be transferred
except (A) to any successor of DTC or its nominee, provided that any such successor shall be
qualified under any applicable laws to provide the service proposed to be provided by it; (B) to
any substitute depository appointed by the Finance Director pursuant to subsection (2) below
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or such substitute depository's successor; or (C) to any person as provided in subsection (4)
below.
(2) Upon the resignation of DTC or its successor (or any substitute depository
or its successor) from its functions as depository or a determination by the Finance Director to
discontinue the system of book entry transfers through DTC or its successor (or any substitute
depository or its successor), the Finance Director may hereafter appoint a substitute
depository. Any such substitute depository shall be qualified under any applicable laws to
provide the services proposed to be provided by it.
(3) In the case of any transfer pursuant to clause (A) or (B) of subsection (1)
above, the Bond Registrar shall, upon receipt of all outstanding Bonds, together with a written
request on behalf of the Finance Director, issue a single new Bond for each maturity then
outstanding, registered in the name of such successor or such substitute depository, or their
nominees, as the case may be, all as specified in such written request of the Finance Director.
(4) In the event that (A) DTC or its successor (or substitute depository or its
successor) resigns from its functions as depository, and no substitute depository can be
obtained, or (B) the Finance Director determines that it is in the best interest of the beneficial
owners of the Bonds that such owners be able to obtain physical Bond certificates, the
ownership of such Bonds may then be transferred to any person or entity as herein provided,
and shall no longer be held by a depository. The Finance Director shall deliver a written request
to the Bond Registrar, together with a supply of physical Bonds, to issue Bonds as herein
provided in any authorized denomination. Upon receipt by the Bond Registrar of all then
outstanding Bonds together with a written request on behalf of the Finance Director to the
ORDINANCE NO. 5672
Bond Registrar, new Bonds shall be issued in the appropriate denominations and registered in
the names of such persons as are requested in such written request.
(e) Registration of Transfer of Ownership or Exchange; Change in Denominations.
The transfer of any Bond may be registered and Bonds may be exchanged, but no transfer of
any such Bond shall be valid unless it is surrendered to the Bond Registrar with the assignment
form appearing on such Bond duly executed by the Registered Owner or such Registered
Owner's duly authorized agent in a manner satisfactory to the Bond Registrar. Upon such
surrender, the Bond Registrar shall cancel the surrendered Bond and shall authenticate and
deliver, without charge to the Registered Owner or transferee therefor, a new Bond (or Bonds
at the option of the new Registered Owner) of the same date, maturity and interest rate and
forthe same aggregate principal amount in any authorized denomination, naming as Registered
Owner the person or persons listed as the assignee on the assignment form appearing on the
surrendered Bond, in exchange for such surrendered and cancelled Bond. Any Bond may be
surrendered to the Bond Registrar and exchanged, without charge, for an equal aggregate
principal amount of Bonds of the same date, maturity and interest rate, in any authorized
denomination. The Bond Registrar shall not be obligated to register the transfer or to exchange
any Bond during the 15 days preceding any interest payment or principal payment date any
such Bond is to be redeemed.
(f) Bond Registrar's Ownership of Bonds. The Bond Registrar may become the
Registered Owner of any Bond with the same rights it would have if it were not the Bond
Registrar, and to the extent permitted by law, may act as depository for and permit any of its
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ORDINANCE NO. 5672
officers or directors to act as a member of, or in any other capacity with respect to, any
committee formed to protect the right ofthe Registered Owners of Bonds.
(g) Registration Covenant. The City covenants that, until all Bonds have been
surrendered and canceled, it will maintain a system for recording the ownership of each Bond
that complies with the provisions of Section 149 ofthe Code.
(h) Place and Medium of Payment. Both principal of and interest on the Bonds shall
be payable in lawful money of the United States of America. Interest on the Bonds shall be
calculated on the basis of a year of 360 days and twelve 30-day months. For so long as all
Bonds are held by a depository, payments of principal and interest thereon shall be made as
provided in accordance with the operational arrangements of DTC referred to in the Letter of
Representations. In the event that the Bonds are no longer held by a depository, interest on
the Bonds shall be paid by check or draft mailed to the Registered Owners at the addresses for
such Registered Owners appearing on the Bond Register on the fifteenth day of the month
preceding the interest payment date, or upon the written request of a Registered Owner of
more than $1,000,000 of Bonds (received by the Bond Registrar at least 15 days prior to the
applicable payment date), such payment shall be made by the Bond Registrar by wire transfer
to the account within the United States designated by the Registered Owner. Principal of the
Bonds shall be payable upon presentation and surrender of such Bonds by the Registered
Owners at the principal office of the Bond Registrar.
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ORDINANCE NO. 5672
Section 5. Redemption; Purchase of Bonds.
(a) Mandatory Redemption of Term Bonds and Optional Redemption, if any. The
Bonds shall be subject to optional redemption on the dates, at the prices and under the terms
set forth in the Bond Purchase Contract approved by the Designated City Representative
pursuant to Section 14. The Bonds shall be subject to mandatory redemption to the extent, if
any, set forth in the Bond Purchase Contract and as approved by the Designated City
Representative pursuant to Section 14.
(b) Purchase of Bonds. The City further reserves the right to use at any time any
surplus Net Revenue available after providing for the payments required by paragraphs (i)
through (vi) of Section 6(b) of this ordinance, or other available funds, to purchase any of the
Bonds that are offered to the City at any price deemed appropriate by the City.
(c) Selection of Bonds for Redemption. For as long as the Bonds are held in
book-entry only form, the selection of particular Bonds within a maturity to be redeemed shall
be made in accordance with the operational arrangements then in effect at DTC. If the Bonds
are no longer held in uncertificated form, the selection of such Bonds to be redeemed and the
surrender and reissuance thereof, as applicable, shall be made as provided in the following
provisions of this subsection (c). If the City redeems at any one time fewer than all of the Bonds
having the same maturity date, the particular Bonds or portions of Bonds of such maturity to be
redeemed shall be selected by lot (or in such manner determined by the Bond Registrar) in
increments of $5,000. In the case of a Bond of a denomination greater than $5,000, the City
and the Bond Registrar shall treat each Bond as representing such number of separate Bonds
each of the denomination of $5,000 as is obtained by dividing the actual principal amount of
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ORDINANCE NO. 5672
such Bond by $5,000. In the event that only a portion of the principal sum of a Bond is
redeemed, upon surrender of such Bond at the principal office of the Bond Registrar there shall
be issued to the Registered Owner, without charge therefor, for the then unredeemed balance
of the principal sum thereof, at the option of the Registered Owner, a Bond or Bonds of like
maturity and interest rate in any of the denominations herein authorized.
(d) Notice of Redemption.
(1) Official Notice. For so long as the Bonds are held in uncertificated form,
notice of redemption (which notice may be conditional) shall be given in accordance with the
operational arrangements of DTC as then in effect, and neither the City nor the Bond Registrar
will provide any notice of redemption to any Beneficial Owners. Thereafter (if the Bonds are no
longer held in uncertificated form), notice of redemption shall be given in the manner
hereinafter provided. Unless waived by any owner of Bonds to be redeemed, official notice of
any such redemption (which redemption may be conditioned by the Bond Registrar on the
receipt of sufficient funds for redemption or otherwise) shall be given by the Bond Registrar on
behalf of the City by mailing a copy of an official redemption notice by first class mail at least
20 days and not more than 60 days prior to the date fixed for redemption to the Registered
Owner of the Bond or Bonds to be redeemed at the address shown on the Register or at such
other address as is furnished in writing by such Registered Owner to the Bond Registrar.
All official notices of redemption shall be dated and shall state:
(A) the redemption date,
(B) the redemption price,
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ORDINANCE NO. 5672
(C) if fewer than all outstanding Bonds are to be redeemed, the
identification by maturity (and, in the case of partial redemption, the respective principal
amounts) of the Bonds to be redeemed,
(D) any conditions precedent to redemption;
(E) that if all of the conditions to redemption are met, on the
redemption date the redemption price will become due and payable upon each such Bond or
portion thereof called for redemption, and that interest thereon shall cease to accrue from and
after said date, and
(E) the place where such Bonds are to be surrendered for payment of
the redemption price, which place of payment shall be the principal office of the Bond
Registrar.
On or prior to any redemption date, the City shall deposit with the Bond Registrar an
amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds
which are to be redeemed on that date. If the conditions to redemption have not been met
prior to the date scheduled for redemption, then the City may revoke the redemption by giving
notice in the same manner as set forth above.
(2) Effect of Notice; Bonds Due. If an unconditional notice of redemption has
been given as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the
redemption date, become due and payable at the redemption price therein specified, and from
and after such date such Bonds or portions of Bonds shall cease to bear interest. Upon
surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be
paid by the Bond Registrar at the redemption price. Installments of interest due on or prior to
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ORDINANCE NO. 5672
the redemption date shall be payable as herein provided for payment of interest. All Bonds
which have been redeemed shall be canceled by the Bond Registrar and shall not be reissued.
(3) Additional Notice. In addition to the foregoing notice, further notice shall
be given by the City as set out below, but no defect in said further notice nor any failure to give
all or any portion of such further notice shall in any manner defeat the effectiveness of a call for
redemption if notice thereof is given as above prescribed. Each further notice of redemption
given hereunder shall contain the information required above for an official notice of
redemption plus (A) the CUSIP numbers of all Bonds being redeemed; (B) the date of issue of
the Bonds as originally issued; (C) the rate of interest borne by each Bond being redeemed;
(D) the maturity date of each Bond being redeemed; and (E) any other descriptive information
needed to identify accurately the Bonds being redeemed. Each further notice of redemption
may be sent at least 20 days before the redemption date to each party entitled to receive
notice pursuant to Section 17 and with such additional information as the City shall deem
appropriate, but such mailings shall not be a condition precedent to the redemption of such
Bonds.
(4) Amendment of Notice Provisions. The foregoing notice provisions of this
Section 5, including but not limited to the information to be included in redemption notices and
the persons designated to receive notices, may be amended by additions, deletions and
changes in order to maintain compliance with duly promulgated regulations and
recommendations regarding notices of redemption of municipal securities.
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ORDINANCE NO. 5672
Section 6. 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 heretofore been established by the City, into which shall be deposited all
Gross Revenues 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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ORDINANCE NO. 5672
(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 ofthe 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 anytime, 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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ORDINANCE NO. 5672
the Rate Stabilization Fund to the extent that such deposit would prevent the City from meeting
the Coverage Requirement.
Section 7. Funds and Accounts.
(a) Bond Fund. There is hereby created in the City Treasury the Waterworks
Revenue Bond Fund, 2012 (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 Bonds. As long as any Bonds remain
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 outstanding Bonds. 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 ofthe Bonds on or before each date on which an installment
of interest or principal and interest falls due on the Bonds equal to the installment of interest or
principal and interest.
(b) Reserve Fund. There has heretofore 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 Bonds,
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
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ORDINANCE NO. 5672
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 Bonds, 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.
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. Interest on any of those investments or on that bank account shall
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ORDINANCE NO. 5672
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 the Gross Revenues, it has exercised due regard
forthe Maintenance and Operation Expense and has not obligated the City to set aside and pay
into such Fund a greater amount of such Gross Revenues than in its judgment will be available
over and above the Maintenance and Operation Expense.
Section 8. Covenants. The City covenants and agrees with the Registered Owner of
each Bond at any time outstanding 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:
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ORDINANCE NO. 5672
(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.
(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:
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ORDINANCE NO. 5672
(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, (l)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 ofthe 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
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ORDINANCE NO. 5672
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
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
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ORDINANCE NO. 5672
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 ofthe City, to protect the Waterworks Utility and the Registered Owners ofthe 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 9. Tax Covenants. The City covenants that it will not take or permit to be taken
on its behalf any action that would adversely affect the exemption from federal income
taxation of the interest on the Bonds and will take or require to be taken such acts as may
reasonably be within its ability and as may from time to time be required under applicable law
to continue the exemption from federal income taxation of the interest on the Bonds.
(a) Arbitrage Covenant. Without limiting the generality of the foregoing, the City
covenants that it will not take any action or fail to take any action with respect to the proceeds
of sale of the Bonds or any other funds of the City which may be deemed to be proceeds of the
Bonds pursuant to Section 148 of the Code and the regulations promulgated thereunder which,
if such use had been reasonably expected on the date of delivery of the Bonds to the initial
purchasers thereof, would have caused the Bonds as "arbitrage bonds" within the meaning of
such term as used in Section 148 ofthe Code.
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ORDINANCE NO. 5672
The City represents that it has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that it is an issuer whose arbitrage certifications may not
be relied upon. The City will comply with the requirements of Section 148 of the Code and the
applicable regulations thereunder throughout the term of the Bonds.
(b) Private Person Use Limitation for Bonds. The City covenants that for as long as
the Bonds are outstanding, it will not permit:
(1) More than 10% of the Net Proceeds of the Bonds to be used for any
Private Person Use; and
(2) More than 10% of the principal or interest payments on the Bonds in a
bond year to be directly or indirectly: (A) secured by any interest in property used or to be used
for any Private Person Use or secured by payments in respect of property used or to be used for
any Private Person Use, or (B) derived from payments (whether or not made to the City) in
respect of property, or borrowed money, used or to be used for any Private Person Use.
The City further covenants that, if:
(3) More than five percent of the Net Proceeds of the Bonds are to be used
for any Private Person Use; and
(4) More than five percent of the principal or interest payments on the
Bonds in a bond year are (under the terms of this ordinance or any underlying arrangement)
directly or indirectly:
(A) secured by any interest in property used or to be used for any
Private Person Use or secured by payments in respect of property used or to be used for any
Private Person Use, or
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ORDINANCE NO. 5672
(B) derived from payments (whether or not made to the City) in
respect of property, or borrowed money, used or to be used for any Private Person Use,
then, (i) any Private Person Use of the projects described in subsection (3) hereof or Private
Person Use payments described in subsection (4) hereof that is in excess of the five percent
limitations described in such subsections (3) or (4) will be for a Private Person Use that is
related to the state or local governmental use of the project refinanced with the Bonds, and
(ii) any Private Person Use will not exceed the amount of Net Proceeds of the Bonds used for
the state or local governmental use portion of the project to which the Private Person Use of
such portion of the project relates. The City further covenants that it will comply with any
limitations on the use of the projects by other than state and local governmental users that are
necessary, in the opinion of its bond counsel, to preserve the tax exemption of the interest on
the Bonds.
(c) Modification of Tax Covenants. The covenants of this section are specified solely
to assure the continued exemption from regular income taxation ofthe interest on the Bonds.
To that end, the provisions of this section may be modified or eliminated without any
requirement for formal amendment thereof upon receipt of an opinion of the City's bond
counsel that such modification or elimination will not adversely affect the tax exemption of
interest on any Bonds.
(d) Qualified Tax-Exempt Obligation. The City hereby designates the Bonds as
"qualified tax-exempt obligations" under Section 265(b)(3) of the Code for investment by
financial institutions. The City reasonably does not expect to issue more than $10,000,000 in
qualifying tax-exempt debt during calendar year 2012.
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Section 10. 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.
(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 forthe
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.
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ORDINANCE NO. 5672
(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
(2) prior to the New Covenant Date, a certificate of a Professional Utility
Consultant that in such Consultant's opinion, Net Revenue for any 12 consecutive calendar
months, without regard to deposits into or withdrawals from the Rate Stabilization Fund, shall
be equal to at least the Parity Requirement. After the New Covenant Date, this section shall be
amended to read as follows: 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;
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ORDINANCE NO. 5672
(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
(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
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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 11. Form of Bonds. The Bonds shall be in substantially the following form:
[DTC LANGUAGE]
UNITED STATES OF AMERICA
NO. $
STATE OF WASHINGTON
CITY OF RENTON
WATER AND SEWER REVENUE REFUNDING BOND, 2012
INTEREST RATE: MATURITY DATE: CUSIP NO.:
REGISTERED OWNER: CEDE & Co.
PRINCIPAL AMOUNT:
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, payable on , 20 , and
semiannually thereafter on the first days of each December and June until such principal sum is
paid or payment has been duly provided for.
Both principal of and interest on this bond are payable in lawful money of the United
States of America. Interest and principal shall be paid as provided in the Blanket Issuer Letter of
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Representations (the "Letter of Representations") by the City to The Depository Trust Company
("DTC"). The fiscal agency of the State of Washington has been appointed by the City as the
authenticating agent, paying agent and registrar for the bonds of this issue (the "Bond
Registrar"). Capitalized terms used in this bond that are not specifically defined have the
meanings given such terms in Ordinance No. of the City adopted on , 2012
(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 the bonds of this issue, the funds or revenues pledged, and the terms and
conditions upon which such bonds are issued.
This bond is one of an authorized issue of bonds of the City of like date and tenor except
as to number, amount, rate of interest and date of maturity in the aggregate principal amount
of $ . The bonds of this issue are being issued for the purpose of refunding certain
outstanding water and sewer revenue refunding bonds of the City and paying costs of issuance
ofthe bonds of this issue.
The bonds of this issue are subject to redemption prior to their scheduled maturities as
provided in the Bond Ordinance and in the Bond Purchase Contract.
The bonds of this issue have been designated as "qualified tax-exempt obligations" for
investment by financial institutions under Section 265(b) ofthe Internal Revenue Code of 1986,
as amended (the "Code").
The bonds of this issue are 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 such bonds. The bonds of this
issue are not general obligations ofthe City.
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 ofthe revenue ofthe 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 bonds of this issue and superior
to all other liens and charges of any kind or nature except Maintenance and Operation Expense.
The bonds of this issue are issued under and in accordance with the provisions of the
Constitution and applicable statutes ofthe 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
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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 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 , 2012.
CITY OF RENTON, WASHINGTON
[SEAL]
By /si facsimile or manual
Mayor
ATTEST:
Is/ facsimile or manual
City Clerk
The Bond Registrar's certificate authentication on the Bonds shall be in substantially the
following form:
CERTIFICATE OF AUTHENTICATION
Date of Authentication: ,20
This bond is one ofthe bonds described in the within-mentioned Bond Ordinance and is
one of the Water and Sewer Revenue Refunding Bonds, 2012 of the City of Renton,
Washington, dated , 2012.
WASHINGTON STATE FISCAL AGENCY,
Registrar
By
Authorized Signer
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Section 12. Execution of Bonds. The Bonds shall be executed on behalf of the City by
the facsimile or manual signatures ofthe Mayor and the City Clerk and shall have the seal ofthe
City impressed or a facsimile thereof imprinted, or otherwise reproduced thereon.
In the event any officer who shall have signed or whose facsimile signatures appear on
any of the Bonds shall cease to be such officer of the City before said Bonds shall have been
authenticated or delivered by the Bond Registrar or issued by the City, such Bonds may
nevertheless be authenticated, delivered and issued and, upon such authentication, delivery
and issuance, shall be as binding upon the City as though said person had not ceased to be such
officer. Any Bond may be signed and attested on behalf of the City by such persons who, at the
actual date of execution of such Bond shall be the proper officer of the City, although at the
original date of such Bond such persons were not such officers ofthe City.
Only such Bonds as shall bear thereon a Certificate of Authentication manually executed
by an authorized representative of the Bond Registrar shall be valid or obligatory for any
purpose or entitled to the benefits of this ordinance. Such Certificate of Authentication shall be
conclusive evidence that the Bonds so authenticated have been duly executed, authenticated
and delivered hereunder and are entitled to the benefits of this ordinance. The Bond Registrar
shall be responsible for its representations contained in the Certificate of Authentication on the
Bonds.
Section 13. Lost, Stolen or Destroyed Bonds. In case any Bonds shall be lost, stolen or
destroyed, the Bond Registrar may authenticate and deliver a new Bond or Bonds of like
amount, date and tenor to the Registered Owner thereof upon the Registered Owner's paying
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the expenses and charges of the Bond Registrar and the City in connection therewith and upon
his filing with the Bond Registrar and the City evidence satisfactory to both that such Bond or
Bonds were actually lost, stolen or destroyed and of his ownership thereof, and upon furnishing
the City and the Registrar with indemnity satisfactory to both.
Section 14. Sale of Bonds.
(a) Bond Sale. The Bonds shall be sold at negotiated sale to the Underwriter
pursuant to the terms of the Bond Purchase Contract. The Underwriter has advised the Council
that market conditions are fluctuating and, as a result, the most favorable market conditions
may occur on a day other than a regular meeting date of the Council. The Council has
determined that it would be in the best interest ofthe City to delegate to the Designated City
Representative for a limited time the authority to approve the final interest rates, aggregate
principal amount, principal amounts of each maturity of the Bonds, selection of the Refunded
Bonds, and redemption rights.
The Designated City Representative is hereby authorized to approve the final interest
rates, aggregate principal amount, principal maturities, selection of the Refunded Bonds, and
redemption rights for the Bonds in the manner provided hereafter so long as (i) the aggregate
principal amount of the Bonds does not exceed $10,000,000, (ii) the final maturity date for the
Bonds is no later than December 1, 2027, (iii) the Bonds are sold (in the aggregate) at a price
not less than 98% and not greater than 120%, (iv) the Bonds are sold for a price that results in a
minimum net present value debt service savings over the Refunded Bonds of 10%, and (v) the
true interest cost for the Bonds (in the aggregate) does not exceed 3.25%.
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In determining whether or not to acquire a Bond Insurance Policy and determining the
final interest rates, aggregate principal amounts, principal maturities and redemption rights,
the Designated City Representative shall take into account those factors that, in his or her
judgment, will result in the lowest true interest cost on the Bonds to their maturity, including,
but not limited to current financial market conditions and current interest rates for obligations
comparable in tenor and quality to the Bonds. Subject to the terms and conditions set forth in
this section, the Designated City Representative is hereby authorized to execute the Bond
Purchase Contract. The signature of one Designated City Representative shall be sufficient to
bind the City.
Following the execution of the Bond Purchase Contract, the Designated City
Representative shall provide a report to the Council describing the final terms of the Bonds
approved pursuant to the authority delegated in this section. The authority granted to the
Designated City Representative by this Section 14 shall expire 120 days after the effective date
of this ordinance. If a Bond Purchase Contract for the Bonds has not been executed within
120 days after the effective date of this ordinance, the authorization for the issuance of the
Bonds shall be rescinded, and the Bonds shall not be issued nor their sale approved unless such
Bonds shall have been re-authorized by ordinance of the Council. The ordinance re-authorizing
the issuance and sale of such Bonds may be in the form of a new ordinance repealing this
ordinance in whole or in part or may be in the form of an amendatory ordinance approving a
bond purchase contract or establishing terms and conditions for the authority delegated under
this Section 14.
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ORDINANCE NO. 5672
(b) Delivery of Bonds; Documentation. Upon the passage and approval of this
ordinance, the proper officials of the City including the Designated City Representative, are
authorized and directed to undertake all action necessary for the prompt execution and
delivery of the Bonds to the Underwriter and further to execute all closing certificates and
documents required to effect the closing and delivery of the Bonds in accordance with the
terms ofthe Bond Purchase Contract.
(c) Preliminary and Final Official Statements. The Finance Director is hereby
authorized to ratify and to deem final the preliminary Official Statement relating to the Bonds
for the purposes of the Rule. The Finance Director is further authorized to ratify and to approve
for purposes of the Rule, on behalf of the City, the Official Statement relating to the issuance
and sale of the Bonds and the distribution of the Official Statement pursuant thereto with such
changes, if any, as may be deemed by her to be appropriate.
Section 15. Application of Bond Proceeds; Plan of Refunding.
(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 the Designated City Representative when the Bonds are sold pursuant to the
Bond Purchase Contract. Proceeds of the Bonds shall be deposited with the Escrow Agent
pursuant to the Escrow Deposit Agreement to be used immediately upon receipt thereof to
defease the Refunded Bonds as authorized by the 2004 Bond Ordinance and to pay costs of
issuance ofthe Bonds.
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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:
(1) interest on the Refunded Bonds due and payable on and prior to the Call
Date; and
(2) the redemption prices ofthe 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 Bonds remaining after acquisition of the Acquired Obligations and provision for
the necessary beginning cash balance shall be utilized to pay expenses of the acquisition and
safekeeping ofthe Acquired Obligations and expenses ofthe issuance ofthe Bonds.
In order to carry out the purposes of this Section 15, the Finance Director is authorized
and directed to execute and deliver to the Escrow Agent, an Escrow Deposit Agreement.
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(e) Call for Redemption of Refunded Bonds. The City hereby irrevocably sets aside
sufficient funds out of the purchase of Acquired Obligations from proceeds of the Bonds to
make the payments described in Section 15(d).
The City hereby irrevocably calls the Refunded Bonds for redemption on their Call Date
in accordance with the provisions of the 2004 Bond Ordinance authorizing the redemption and
retirement of the 2004 Bonds prior to their fixed maturities.
Said defeasance and call for redemption of the Refunded Bonds shall be irrevocable
after the issuance of the Bonds 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
2004 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 Section 15. 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. 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 of Washington for the benefit of the City and owners of the Refunded Bonds.
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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 16. Bond Insurance. The Finance Director is hereby further authorized to
solicit proposals from municipal bond insurance companies for the issuance of a Bond
Insurance Policy. In the event that the Finance Director receives multiple proposals in response
to a solicitation, the Finance Director may select the proposal having the lowest cost and
resulting in an overall lower interest cost with respect to the Bonds to be insured. The Finance
Director may execute a commitment received from the Insurer selected by the Finance
Director. The Council further authorizes all proper officers, agents, attorneys and employees of
the City to cooperate with the Insurer in preparing such additional agreements, certificates, and
other documentation on behalf of the City as shall be necessary or advisable in providing for
the Bond Insurance Policy.
Section 17. Undertaking to Provide Continuing Disclosure.
(a) Contract/Undertaking. This section constitutes the City's written undertaking for
the benefit of the Registered Owners and Beneficial Owners of the Bonds required by
subsection (b)(5) ofthe Rule.
(b) Financial Statements/Operating Data. The City hereby agrees to provide or
cause to be provided to the Municipal Securities Rulemaking Board ("MSRB"), the following
annual financial information and operating data for the prior fiscal year, commencing in 2013
with the calendar year ending December 31, 2012:
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(1) Annual financial statements prepared in accordance with the generally
accepted accounting principles applicable to governmental units, as such principles may
be changed from time to time by the Washington State Auditor pursuant to
RCW 43.09.200, which statements will not be audited, except that if and when audited
financial statements are otherwise prepared and available to the City, they will be
provided (the "Annual Financial Statements");
(2) A statement of authorized, issued and outstanding bonded debt secured
by Net Revenue;
(3) Debt service coverage ratios; and
(4) General customer statistics for the Waterworks Utility contained in the
final official statement for the Bonds and identified in a closing certificate executed by
the Designated City Representative and referencing this section.
Items (2) through (4) shall be required only to the extent that such information is not included
in (1).
The information and data described above shall be provided on or before nine months
after the end of the City's fiscal year. The City's current fiscal year ends December 31. The City
may adjust such fiscal year by providing written notice of the change of fiscal year to the MSRB.
In lieu of providing such annual financial information and operating data, the City may
cross-reference to other documents available to the public on the MSRB's internet website or
filed with the Commission.
If not provided as part of the annual financial information discussed above, the City shall
provide the City's audited annual financial statement prepared in accordance with the
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Budgeting Accounting and Reporting System prescribed by the Washington State Auditor
pursuant to RCW 43.09.200 (or any successor statute) when and if available to the MSRB.
(c) Listed Events. The City agrees to provide or cause to be provided to the MSRB, in
a timely manner not in excess of ten business days after the occurrence of the event, notice of
the occurrence of any of the following events with respect to the Bonds:
• Principal and interest payment delinquencies;
• Non-payment related defaults, if material;
• Unscheduled draws on debt service reserves reflecting financial difficulties;
• Unscheduled draws on credit enhancements reflecting financial difficulties;
• Substitution of credit or liquidity providers, or their failure to perform;
• Adverse tax opinions, the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-
TEB) or other material notices or determinations with respect to the tax status of
the Bonds, or other material events affecting the tax status of the Bonds;
• Modifications to the rights of Bondholders, if material;
• Bond calls, if material, and tender offers;
• Defeasances;
• Release, substitution, or sale of property securing repayment of the Bonds, if
material;
• Rating changes;
• Bankruptcy, insolvency, receivership or similar event of the City;
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• The consummation of a merger, consolidation, or acquisition involving the City
or the sale of all or substantially all of the assets of the City, other than in the
ordinary course of business, the entry into a definitive agreement to undertake
such an action or the termination of a definitive agreement relating to any such
actions, other than pursuant to its terms, if material; and
• Appointment of a successor or additional trustee or the change of name of a
trustee, if material.
The City shall promptly determine whether the events described above are material.
(d) Format for Filings with the MSRB. All notices, financial information and
operating data required by this undertaking to be provided to the MSRB must be in an
electronic format as prescribed by the MSRB. All documents provided to the MSRB pursuant to
this undertaking must be accompanied by identifying information as prescribed by the MSRB.
(e) Notification Upon Failure to Provide Financial Data. The City agrees to provide or
cause to be provided, in a timely manner, to the MSRB notice of its failure to provide the
annual financial information described in Subsection (b) above on or prior to the date set forth
in Subsection (b) above.
(f) Termination/Modification. The City's obligations to provide annual financial
information and notices of certain listed events shall terminate upon the legal defeasance, prior
redemption or payment in full of all of the Bonds. Any provision of this section shall be null and
void if the City (i) obtains an opinion of nationally recognized bond counsel to the effect that
the portion ofthe Rule that requires that provision is invalid, has been repealed retroactively or
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otherwise does not apply to the Bonds and (ii) notifies the MSRB of such opinion and the
cancellation of this section.
The City may amend this section with an opinion of nationally recognized bond counsel
in accordance with the Rule. In the event of any amendment of this section, the City shall
describe such amendment in the next annual report, and shall include, a narrative explanation
of the reason for the amendment and its impact on the type (or in the case of a change of
accounting principles, on the presentation) of financial information or operating data being
presented by the City. In addition, if the amendment relates to the accounting principles to be
followed in preparing financial statements, (A) notice of such change shall be given in the same
manner as for a listed event under Subsection (c), and (B) the annual report for the year in
which the change is made shall present a comparison (in narrative form and also, if feasible, in
quantitative form) between the financial statements as prepared on the basis of the new
accounting principles and those prepared on the basis of the former accounting principles.
(g) Bond Owner's Remedies Under This Section. The right of any bondowner or
Beneficial Owner of Bonds to enforce the provisions of this section shall be limited to a right to
obtain specific enforcement of the City's obligations under this section, and any failure by the
City to comply with the provisions of this undertaking shall not be an event of default with
respect to the Bonds.
(h) No Default. Except as otherwise disclosed in the City's Official Statement
relating to the Bonds, the City is not and has not been in default in the performance of its
obligations of any prior undertaking for ongoing disclosure with respect to its obligations.
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Section 18. Defeasance of the Bonds. In the event that money and/or Government
Obligations maturing or having guaranteed redemption prices at the option of the holder at
such time or times and bearing interest to be earned thereon in amounts (together with such
money, if any) sufficient to redeem and retire part or all of the Bonds in accordance with the
their terms, are hereafter irrevocably set aside in a special account and pledged to effect such
redemption and retirement, then no further payments need be made into the Bond Fund or
any account therein for the payment of the principal of and interest on the certain Bonds so
provided for and such Bonds shall then cease to be entitled to any lien, benefit or security of
this ordinance, except the right to receive the funds so set aside and pledged, and such Bonds
shall no longer be deemed to be Outstanding hereunder, or under any ordinance authorizing
the issuance of bonds or other indebtedness of the City.
Within 30 days of any defeasance of Bonds the Bond Registrar shall provide notice of
defeasance of Bonds to Registered Owners of the Bonds being defeased and to each party
entitled to receive notice in accordance with Section 17.
Section 19. Amendments.
(a) The City Council from time to time and at any time may pass an ordinance or
ordinances supplemental hereof, which ordinance or ordinances thereafter shall become a part
of this ordinance, for any one or more or all of the following purposes:
(1) To add to the covenants and agreements of the City in this ordinance,
other covenants and agreements thereafter to be observed, which shall not adversely affect
the interests of the owners of any Bonds, or to surrender any right or power herein reserved.
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ORDINANCE NO. 5672
(2) To make such provisions for the purpose of curing any ambiguities or of
curing, correcting or supplementing any defective provision contained in this ordinance in
regard to matters or questions arising under such ordinances as the City Council may deem
necessary or desirable and not inconsistent with such ordinances and which shall not adversely
affect, in any material respect, the interest of the owners of Bonds. In any such supplemental
ordinance may be adopted without the consent of the owners of any Bonds at any time
outstanding, notwithstanding any of the provisions of subsection (b) of this section.
(b) With the consent of the owners of not less than sixty-five percent (65%) in
aggregate principal amount of the Bonds at the time outstanding, the City Council may pass an
ordinance or ordinances supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this ordinance or of any
supplemental ordinance; provided, however, that no such supplemental ordinance shall:
(1) Extend the fixed maturity of any Bonds, or reduce the rate of interest
thereon, or extend the time of payment of interest from their due date, or reduce the amount
of the principal thereof, or reduce any premium payable on the redemption thereof, without
the consent of the Registered Owner of each Bond so affected; or
(2) Reduce the aforesaid percentage of Bondowners required to approve any
such supplemental ordinance, without the consent of the owners of all of the Bonds then
outstanding.
It shall not be necessary for the consent of Bondowners under this subsection (b) to
approve the particular form of any proposed supplemental ordinance, but it shall be sufficient if
such consent shall approve the substance thereof. For the purpose of consenting to
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ORDINANCE NO. 5672
amendments under this subsection (b), the Insurer shall be deemed to be the sole Registered
Owner of the Bonds then outstanding.
(c) Upon the adoption of any supplemental ordinance pursuant to the provisions of
this section, this ordinance shall be deemed to be modified and amended in accordance
therewith, and the respective rights, duties and obligations of the City under this ordinance and
all owners of Bonds outstanding hereunder shall thereafter be determined, exercised and
enforced thereunder, subject in all respects to such modifications and amendments, and all
terms and conditions of any such supplemental ordinance shall be deemed to be part of the
terms and conditions of this ordinance for any and all purposes.
(d) Bonds executed and delivered after the execution of any supplemental
ordinance passed pursuant to the provisions of this section may have a notation as to any
matter provided for in such supplemental ordinance, and if such supplemental ordinance shall
so provide, new Bonds so modified as to conform, in the opinion of the City Council, to any
modification of this ordinance contained in any such supplemental ordinance, may be prepared
and delivered without cost to the owners of any affected Bonds then outstanding, upon
surrender for cancellation of such Bonds in equal aggregate principal amounts.
(e) Exclusion of Bonds Owned by City. Bonds owned or held by or for the account of
the City shall not be deemed outstanding for the purpose of any vote or consent or other action
or any calculation of outstanding Bonds in this ordinance provided for, and shall not be entitled
to vote or consent or take any other action in this ordinance provided for.
(f) Bonds Held by Securities Repositories. For so long as the Bonds are held in book
entry only form, communications with the owners shall be made with the securities depository
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who is the "Registered Owner" ofthe Bonds and communications with (and obtaining consents
from) beneficial owners shall be made in accordance with the operational procedures of the
securities depository that is the "Registered Owner" of the Bonds.
Section 20. Call for Redemption of 1998 Bonds. For the purpose of realizing a debt
service savings and benefiting the ratepayers ofthe City, the City Council hereby authorizes the
refunding of the 1998 Bonds identified in the recitals to this ordinance. Available funds of the
City in the amount necessary to refund the 1998 Bonds, in whole, shall be used on or before
December 1, 2012 for the payment of interest on and the redemption price of the 1998 Bonds
on such date.
The City hereby irrevocably calls the 1998 Bonds for redemption on December 1, 2012
in accordance with the provisions of the 1998 Bond Ordinance authorizing the redemption and
retirement of the 1998 Bonds prior to their fixed maturities. The City's Finance and
Administrative Services Administrator is hereby authorized and directed to provide for the
giving of notice of the redemption of the 1998 Bonds in accordance with the applicable
provisions of the 1998 Bond Ordinance. The costs of such notice shall be an expense of the
City.
Section 21. Contract; Savings Clause. The covenants contained in this ordinance and
in the Bonds shall constitute a contract between the City and the Registered Owner of each and
every 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
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from the remaining covenants and agreements in this ordinance and shall in no way affect the
validity ofthe other provisions of this ordinance or ofthe Bonds.
Section 22. General Authorization; Ratification of Prior Acts. The Mayor, the Chief
Administrative Officer, the Finance Director 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 23. 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 15th day of October, 2012.
Bonnie I. Walton, City Clerk
APPROVED BY THE MAYOR this 15th day of October, 2012.
Denis Law, Mayor
Approved as to form:
>-
Bond Counsel
Date of Publication: 10/19/2012 (Summary)
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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. (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 October , 2012, as that ordinance appears on
the minute book ofthe 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
ofthe Ordinance.
IN WITNESS WHEREOF, I have hereunto set my hand this day of October, 2012.
Bonnie I. Walton, City Clerk