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HomeMy WebLinkAboutORD 3720 !�m.emc� J vJ 6 Q �A-- CITY OF RENTON, WASHINGTON ORDINANCE NO. 3720 AN ORDINANCE providing for the issuance of $1,500,000 par value of "Water and Sewer Revenue Bonds, 1983 , " of the City for the purpose of obtain- ing a part of the funds with which to pay the cost of carrying out the system or plan of additions to and betterments and extensions of the waterworks utility of the City, including the sewerage system as a part thereof , and providing an amount for the arts; fixing the date, form, denomination, maturities, interest rates, terms and covenants of such bonds; creating a special bond redemption fund to provide for the pay- ment of the bonds; and providing for the sale of such bonds . WHEREAS, by Ordinance No. 1156, as amended by Ordinance Nos . 1157 and 1173, the sewerage system of the City of Renton (the "City" ) has become and is considered a part of the water- works utility of the City (defined below as the "Waterworks Utility of the City" ) ; and WHEREAS, the City previously has issued under date of Narch 1, 1953 , $315.000 par value of "City of Renton Water and Sewer Refunding and Improvement Revenue Bonds, 1953, " pursuant to Ordinances Nos . 1450 and 1452; and WHEREAS, by Section 15 of such Ordinance No. 1450, the City reserved the right to issue additional water and sewer revenue bonds which would constitute a charge and lien upon the revenue of the Waterworks Utility of the City on a parity with the then outstanding "City of Renton Water and Sewer Refunding and •S Improvement Revenue Bonds, 1953, " on compliance with the follow- ing conditions at the time of the issuance of such additional bonds : " (A) All payments required by this ordinance to be paid into the 'Renton 1953 Water and Sewer Refund- ing and Improvment Revenue Bond Fund' shall have been made; and. " (B) The revenues of said waterworks system, including the sewerage system, shall be and be deemed sufficient, after the payment of operation and main- tenance costs and taxes, based upon the historical experience of said systems or the pro forma revenues under then existing rates over a period of any twenty-four consecutive months out of the thirty-six months immediately preceding the time of the issuance of such additional bonds, to equal at least 1.5 times the average annual principal and interest require- ments of the bonds of this issue then outstanding and of the revenue bonds proposed to be so issued. Such determination of the sufficiency of the revenues shall be made and certified to by an engineer experi- enced in municipal utilities; and " (C) The Ordinance authorizing the issuance of such additional revenue bonds shall provide for the setting aside into a reserve fund or account of an amount not less than the average annual debt service requirement, both principal and interest of the addi- tional revenue bonds proposed to be so issued, which reserve fund or account shall be maintained in such amount so long as any of said bonds are outstanding to the last maturity thereof" ; and WHEREAS, the City thereafter issued under date of September 1, 1954, $325,000 par value of "City of Renton Water and Sewer Revenue Bonds, 1954, " pursuant to Ordinance No. 1489; under date of July 1, 1959, $750,000 par value of "City of Renton Water and Sewer Revenue Bonds, 1959, " pursuant to Ordinance No. 1766; - 2 - under date of May 1, 1965, $500,000 par value of "City of Renton Water and Sewer Revenue Bonds, 1965, " pursuant to Ordinance No. 2151; under date of December 15, 1965, $545,000 par value of "City of Renton Water and Sewer Revenue Refunding Bonds, 1965, " pursuant to Ordinance No. 2195, for the purpose of refunding, redeeming and retiring on July 1, 1974, all of the then out- standing "City of Renton Water and Sewer Revenue Bonds, 1959" ; under date of July 1, 1975, $3,000,000 par value of "City of Renton Water and Sewer Revenue Bonds, 1975, " pursuant to Ordi- nance No . 2930; under date of February 1, 1976, $2 , 950,000 par value of "City of Renton Water and Sewer Revenue Refunding Bonds, 1976, " pursuant to Ordinance No. 3007, for the purpose of refunding, redeeming and retiring on January 1, 1989, and July 1, 1989, all of the then outstanding "City of Renton Water and Sewer Revenue Bonds, 1975" ; under date of June 1, 1977, $3,095,000 par value of "City of Renton Water and Sewer Revenue Refunding Bonds, 1977" (the 01977 Bonds" ) , pursuant to Ordinance No. 3141, as amended by Ordinance No. 3145, for the purpose of providing a part of the money required to pay the principal of and interest on the "City of Renton Water and Sewer Revenue Refunding Bonds, 1976, " coming due to and including July 1, 1989, and to redeem and retire on July 1, 1989, the outstanding "City of Renton Water and Sewer Revenue Refunding Bonds, 1976, " numbered 96 to 590, inclusive, maturing from July 1, 1990, to July 1, 2000, inclusive and under date of November 1, 1977, - 3 - $800,000 par value of "City of Renton Water and Sewer Revenue Refunding Bonds, 1977, Issue No. 2" (the "1977 Bonds, Issue No . 2" ) , pursuant to Ordinance No. 3169, for the purpose of obtain- ing a part of the funds with which to refund, pay and retire the outstanding "City of Renton Water and Sewer Revenue Bonds, 1954, " "City of Renton Water and Sewer Revenue Bonds, 1965, " and "City of Renton Water and Sewer Revenue Refunding Bonds, 1965, " all of which bonds were at the time of their issuance issued on a parity of lien with the then outstanding "City of Renton Water and Sewer Refunding and Improvement Revenue Bonds, 1953, " and with each other pursuant to the provisions of Section 15 of Ordinance No. 1450, such parity issues of bonds being a first lien and charge upon the gross revenue of the Waterworks Utility of the City, excluding charges for maintenance and operation, except that all of the "City of Renton Water and Sewer Refunding and Improvement Revenue Bonds, 1953, " have now been paid and retired, and except the conditions of subparagraph (B) of Section 15 of Ordinance No. 1450 were modified by Section 12 of Ordinance No. 2930 pertaining to the "City of Renton Water and Sewer Revenue Bonds, 1975, " and by Section 13 of Ordinance No. 3169 pertaining to the outstanding 1977 Bonds, Issue No. 2, as to any parity bonds issued in the future, and the City, by such Section 13 of Ordinance No. 3169, reserved the right to issue Future Parity Bonds (as therein defined) which will constitute a lien and charge upon the gross revenue of the Waterworks Utility - 4 - of the City on a parity with the 1977 Bonds, Issue No. 2 , pro- vided the conditions set forth in Section 15 of Ordinance No . 1450, as modified, are met and complied with at the time of the issuance of such Future Parity Bcnds, which section was incor- porated by reference in Ordinance No. 3169 and made a part thereof and shall continue to be applicable even though the "City of Renton Water and Sewer Refunding and Improvement Revenue Bonds, 1953, " have been paid and retired; and WHEREAS, under date of December 1, 1977, the City issued $3,045,000 par value of "City of Renton Water and Sewer Revenue Refunding Bonds, 1977, Issue No. 3" (the "1977 Bonds, Issue No . 3" ) , pursuant to Ordinance No. 3188, for the purpose of obtain- ing a part of the funds with which to refund, pay and retire all of the then outstanding 1977 Bonds, which 1977 Bonds, Issue No . 3, were issued on a parity of lien with the outstanding 197'7 Bonds, Issue No. 2, pursuant to the provisions of Section 15 of Ordinance No. 1450, as modified by Section 13 of Ordinance No . 3169; and WHEREAS, the 1977 Bonds, Issue No. 2, and the 1977 Bonds, Issue No. 3, are the only bonds presently outstanding payable out of the revenue of the Waterworks Utility of the City; and WHEREAS, the parity provisions of Section 15 of Ordinance No. 1450, as modified, provide that the City may issue addi- tional water and sewer revenue bonds which would constitute a charge and lien upon the revenue of the Waterworks Utility of 5 - the City on a parity with the 1977 Bonds, Issue No. 2, and the 1977 Bonds, Issue No. 3, and any bonds issued thereafter and having a charge and lien upon the revenue of the Waterworks Utility of the City on a parity with such bonds on compliance with the following conditions at the time of the issuance of such additional bonds : " (A) All payments required by this ordinance to be paid into the 'Renton 1953 Water and Sewer Refund- ing and Improvment Revenue Bond Fund ' shall have been made; [Ordinance No. 1450] and " (B) The revenues of said waterworks system, including the sewerage system, shall be and be deemed sufficient, after the payment of operation and main- tenance costs and taxes, based upon the historical experience of said systems or the pro forma revenues under then existing rates over a period of any twenty- four consecutive months out of the thirty-six months immediately preceding the time of the issuance of such additional bonds, to equal at least 1.3 times the average annual principal and interest require- ments of the bonds of this issue then outstanding and of the revenue bonds proposed to be so issued. Such determination of the sufficiency of the revenues shall be made and certified to by an engineer experi- enced in municipal utilities; and [Ordinance 1450 as modified by Ordinance No. 3169] " (C) The Ordinance authorizing the issuance of such additional revenue bonds shall provide for the setting aside into a reserve fund or account of an amount not less than the average annual debt service requirement, both principal and interest of the addi- tional revenue bonds proposed to be so issued, which reserve fund or account shall be maintained in such amount so long as any of said bonds are outstanding to the last maturity thereof" , [Ordiance No. 1450] WHEREAS, the City Council has determined that it is neces- sary and in the best interests of the City that certain addi- tional improvements be made and there be adopted a system or 6 - plan of additions to and betterments and extensions of the Waterworks Utility of the City; and WHEREAS, the City Council has determined that it is neces- sary to issue and sell $1,500,000 par value of water and sewer revenue bonds to provide a part of the funds necessary to carry out such system or plan providing for additions to and better- ments and extensions of the Waterworks Utility of the City, to provide an amount for the arts as required by City Ordinance No . 2969 and to pay the costs of issuance and sale of the water and sewer revenue bonds provided for herein; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RENTON, WASHINGTON, DO ORDAIN, as follows: Section 1. As used in this ordinance, the following words shall have the following meanings : a. "Annual Debt Service" for the Bonds shall mean all the Interest plus all principal which will mature or come due in any year . b. "Average Annual Debt Service" shall mean the sum of the Annual Debt Service for the remaining years to the last scheduled maturity of the Bonds divided by the number of those years . C. "Bond Fund" shall mean that special fund of the City known as the "Renton 1983 Water and Sewer Revenue Bond Redemp- tion Fund" created by this ordinance for the payment of the principal of and interest on the Bonds. - 7 - d. "Bonds" shall mean the $1, 500,000 "City of Renton Water and Sewer Revenue Bonds, 1983, " authorized to be issued by this ordinance . e. "City" shall mean the City of Renton, Washington, a duly organized and existing noncharter code city under the laws of the State of Washington. f . "Future Parity Bonds" shall mean 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 upon the Revenue of the Waterworks Utility of the City on a parity with the lien and charge upon such revenue for the Outstanding Parity Bonds and the Bonds for the payment of the principal thereof and interest thereon. g. "Maintenance and Operation Expense" shall mean all expenses incurred by the City in causing the Waterworks Utility of the City to be operated and maintained in good repair, work- ing order and condition, which shall not include any deprecia- tion expenses or taxes or charges in lieu of taxes levied or imposed by the City. h. "Outstanding Parity Bonds" shall mean the $800,000 par value of "City of Renton Water and Sewer Revenue Refunding Bonds, 1977, Issue No. 2, " issued under date of November 1, 1977, pursuant to Ordinance No. 3169, and the $3,045,000 par value of "City of Renton Water and Sewer Revenue Refunding Bonds, 1977, Issue No. 3, " issued under date of December 1, 1977, pursuant to Ordinance No. 3188 . 8 - I . "Principal and Interest Account" shall mean the account of that name created in the Bond Fund by this ordinance for the payment of the principal of and interest on the Bonds . J . "Reserve Account" shall mean the account of that name created in the Bond Fund by this ordinance for the purpose of securing the payment of the principal of and interest on the Bonds . k. "Revenue of the Waterworks Utility of the City" shall mean all the earnings and revenue received by the Waterworks Utility of the City from any source whatsoever, including pay- ments received under contract with other municipal corporations for water service, except general taxes, charges in lieu of taxes, assessments in any utility local improvement district hereafter created, proceeds from the sale of City property and bond proceeds . 1 . "Term Bonds" shall mean any Outstanding Parity Bonds, Bonds and/or Future Parity Bonds identified as such in the ordi- nance 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 bonds in accord- ance with a mandatory sinking fund requirement . M. "Waterworks Utility Fund of the City" shall mean that special fund of the City into which all of the Revenue of the Waterworks Utility of the City shall be deposited. - 9 - n. "Waterworks Utility of the City" shall mean the com- bined water and sewerage systems of the City as the same may be added to, improved and extended for as long as any of the Outstanding Parity Bonds, the Bonds and any Future Parity Bonds are outstanding. Section 2 . The City specifies, adopts and orders the carrying out of a system or plan of additions to and betterments and extensions of the Waterworks Utility of the City consisting of the construction and installation of a major water distribu- tion system on the City' s West Hill jointly with Water District No . 63, King County, Washington, including a new 3500 gpm well facility, 1,700 gpm booster pump station, 2 .5 mile-long trans- mission main, 1.3 million gallon reservoir facility and distri- bution mains, as well as various replacements, extensions and improvements to the existing water-sewer system, the making of improvements to the water distribution and sewage collection systems and the telemetry control systems for each, and the acquisition of future reservoir and watershed sites . There shall be included in the foregoing system or plan the acquisition and installation of all necessary valves, pumps, fittings, couplings, connections, equipment and appurtenances, the acquisition of any easements, rights-of-way and land that may be required and the performance of such work as may be inci- dental and necessary. All of the foregoing shall be in accordance with the plans and specifications therefor prepared by the consulting engineers of the City. - 10 - The City Council may modify the details of the foregoing system or plan where, in its judgment, it appears advisable if such modifications do not substantially alter the purposes of that system or plan. The life of the improvements comprising the foregoing system or plan of additions to and betterments and extensions of the Waterworks Utility of the City is declared to be at least twenty years . The estimated cost of the acquisition, construc- tion, installation and financing of the above-described improve- ments, including the costs of issuance and sale of the Bonds is declared to be approximately $2 , 188,000. Such cost shall be paid from the proceeds of the Bonds authorized in this ordi- nance, proceeds of a Referendum 38 grant anticipated to be received from the State of Washington, Department of Social and Health Services, and other money of the City made available therefor . Section 3 . The City council finds that all payments required by Ordinances Nos . 3169 and 3188 for the Outstanding Parity Bonds have been made into the respective bond redemption funds for such Outstanding Parity Bonds that provision is here- inafter made for the accumulation of the amounts required in the Reserve Account of the Bond Fund, and that there were will on file prior to the issuance and delivery of the Bonds a certifi- cate of Richard H. Harbert of RH2 Engineering, P.S . , an engi- neer experienced in municipal utilities, that the Revenue of the Waterworks Utility is sufficient to meet the 1.3 coverage requirement . - 11 - Section 4 . For the purpose of providing a part of the money required to carry out the system or plan of additions to and betterments and extensions of the Waterworks Utility of the City, including the cost of issuance and sale of the Bonds , as herein specified, adopted and ordered to be carried out and to provide an amount for the arts as required by City Ordinance No . 2969, as amended by Ordinance No . 3563, the City shall issue the Bonds in the aggregate principal amount of $1, 500,000. The "Ci of Renton Water and Sewer Bonds Bonds shall be designated t , g Y 1983" (defined above as the "Bonds" ) ; shall be dated May 1, 1983; shall be in denominations of $5,000 each; shall bear interest at the rates hereinafter set forth, payable on November 1, 1983, and semiannually thereafter on each succeeding May 1 and November 1 as evidenced by coupons to be attached to the Bonds representing interest to maturity. If any Bond is not redeemed upon proper presentment at its maturity or call date thereof, the City shall be obligated to pay interest at the coupon rate for each such Bond from and after the maturity or call date until such Bond, both principal and interest, shall have been paid in full or until sufficient money for such payment in full is on deposit in the Bond Fund and such Bond has been duly called for payment by the City Director of Finance ' s publishing notice of such call once at least ten days prior to the call date in the official newspaper of the City or, if there is no official newspaper, in a newspaper of general circulation in the City. The Bonds shall be numbered and mature on May 1 of each year as follows : - 12 - Bond Numbers Interest Maturity (Inclusive) Amounts Rates Years _ 1 to 10 $ 50,000 1984 11 to 19 45,000 1985 20 to 29 50,000 1986 30 to 41 60,000 1987 42 to 55 70,000 1988 56 to 74 95,000 1989 75 to 89 75,000 1990 90 to 105 80,000 1991 106 to 122 85,000 1992 123 to 141. 95,000 1993 142 to 162 105,000 1994 163 to 185 115,000 1995 186 to 208 115,000 1996 209 to 234 130,000 1997 235 to 261 135,000 1998 262 to 300 195,000 1999 Both principal of and interest on the Bonds shall be pay- able in lawful money of the United States of America at the office of the Director of Finance of the City, or, at the option of the holder, at either fiscal agency of the State of, Washington in Seattle, Washington, or New York, New York, solely out of the Bond Fund, and shall be a valid claim of the holder thereof only as against such Bond Fund and the amount of the Revenue of the Waterworks Utility of the City pledged to such fund, and shall not be a general obligation of the City. Section 5 . The City reserves the right to redeem the Bonds as a whole, or in part in inverse numerical order, from money derived from any source at the following percentages of par if redeemed at the following times, plus accrued interst to date of redemption in each case: - 13 - Call Date Call Price May 1, 1993, and November 1, 1993 102% May 1, 1994, and November 1, 1994 101-1/2% May 1, 1995, and November 1, 1995 101% May 1, 1996, and November 1, 1996 100-1/2s May 1, 1997, or any semiannual interest payment date thereafter 100% (Par) Notice of such intended redemption shall be published in the official newspaper of the City or, if there is no official newspaper, in a newspaper of general circulation in the City, at least once not less than 30 nor more than 45 days prior to the call date, and a copy of such notice shall be mailed within the same period by registered or certified mail to the main office of the principal underwriter or account manager for the success- ful bidder for the Bonds, or its successors. In addition, such redemption notice shall be sent to Moody' s Investors Service, Inc . , and Standard & Poor ' s Corporation, at their offices in New York, New York, but the mailing of such notice to such New York firms shall not be a condition precedent to the redemption of such Bonds . Interest on any Bonds so called for redemption shall cease on such call date upon payment of the redemption price into the Bond Fund. The City reserves the right to purchase any or all of the Bonds in the open market at any time at a price not in excess of 102% of the par value if purchased prior to May 1, 1993, and thereafter not in excess of the call price applicable at the time of such purchase. 14 - Section 6. There is created and established in the office of the Director of Finance of the City a special fund to be known and designated as the "Renton 1983 Water and Sewer Revenue Bond Redemption Fund. " Such fund is divided into two accounts, namely, a Principal and Interest Account and a Reserve Account . So long as Bonds are outstanding against the Bond Fund, the Director of Finance of the City shall (a) set aside and pay into the Principal and Interest Account in such fund out of the Revenue of the Waterworks Utility of the City a fixed amount, without regard to any fixed proportion, namely, monthly, on or before the first day of each month beginning with the month of June, 1983, an amount, together with the accrued interest received, equal to 1/6th of the amount of interest payable on the Bonds on November 1, 1983, and thereafter 1/6th of the next ensuing six months ' requirements for interest, and beginning with the month of June, 1983, 1/12th of the next ensuing twelve months ' requirements for principal on the Bonds and continuing thereafter until the Bonds, both principal and interest, are paid in full, and (b) set aside and pay into the Reserve Account in the Bond Fund out of the Revenue of the Waterworks Utility of the City in substantially equal monthly payments such amounts so that by no later than May 1, 1988, there shall have been accumu- lated in the Reserve Account in the Bond Fund for the Bonds an amount not less than the Average Annual Debt Service for the Bonds . 15 - The Reserve Account in the Bond Fund may be accumulated from any other money which the City may have available for such purpose in addition to using such revenue therefor . The City further agrees that when such required amounts have been paid into the Reserve Account in the Bond Fund, the City will at all times, except for withdrawals therefrom as authorized herein, maintain those amounts therein until there is a sufficient amount in the Bond Fund, including the Reserve Account therein, to pay the principal of and interest to matur- ity on all outstanding Bonds, at which time no further payments need be made into the Bond Fund and the money in the Bond Fund, including the Reserve Account, may be used to pay such principal and interest. In the event 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, such deficiency shall be made up from the Reserve Account by the withdrawal of cash therefrom for that purpose. Any deficiency created in the Reserve Account by reason of any such withdrawal shall then be made up from the money from the Revenue of the Waterworks Utility of the City first avaiable after making necessary provisions for the required payments into the Bond Fund. All money in the Reserve Account above provided for not needed to meet the payments of principal and interest when due may be kept on deposit in the official bank depository of the 16 - City or in any national bank or may be invested in any legal investment for City funds maturing not later than the interest or principal and interest payment date when such money will be needed. Interest on any such investment or on such bank account shall be deposited in and become a part of the Reserve Account until the total required reserve amount shall have been accumu- lated therein, after which such interest shall be deposited in the Principal and Interest Account. Funds in the Waterworks Utility Fund of the City shall be used in the following order of priority: (1) To pay Maintenance and Operation Expense; (2) To pay the Interest on the Outstanding Parity Bonds, the Bonds and any Future Parity Bonds; (3) To pay the principal of the Outstanding Parity Bonds, the Bonds and any Future Parity Bonds; (4) To make all payments required to be made into any sinking fund or bond redemption fund here- after created for the payment of Future Parity Bonds which are Term Bonds; (5) To make all payments required to be made into the Reserve Accounts created to secure the pay- ment of the Outstanding Parity Bonds, the Bonds and any Future Parity Bonds; (6) 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 the Revenue of the Waterworks Utility junior and inferior to the lien thereon for the payment of the principal of and interest on the Outstanding Parity Bonds, the Bonds and any Future Parity Bonds; - 17 - (7) To retire by redemption or purchase in the open market any outstanding revenue bonds or revenue warrants of the City, to make necessary addi- tions, betterments, improvements and repairs to or extensions and replacements of the Waterworks Utility of the City, or for any other lawful City purposes . If the City shall fail to set aside and pay into the Bond Fund the amounts set forth above, the holder of any of the out- standing Bonds may bring an action against the City to compel such setting aside and payment . Section 7 . The Revenue of the Waterworks Utility of the City is pledged to such payments, and the Bonds shall constitute a lien and charge upon such revenue prior and superior to any other charges whatsoever, excluding Maintenance and Operation Expense, except that the lien and charge upon such revenue for the Bonds shall be on a parity with the lien and charge thereon for the Outstanding Parity Bonds and any Future Parity Bonds hereafter issued. Section 8 . In the judgment of the City Council, the Reve- nue and benefits to be derived from the operation and mainte- nance of the Waterworks Utility of the City, at the rates to be charged for water and sanitary sewage disposal service on the entire utility, will be more than sufficient to meet all Mainte- nance and Operation Expense and the debt service requirements of the Outstanding Parity Bonds and to permit the setting aside in the Bond Fund, out of the revenue of the entire utility, of amounts sufficient to pay the interest on the Bonds as such - 18 - interest become payable and to pay and redeem all of the Bonds at maturity. The City Council further declares that in creating the Bond Fund and in fixing the amounts to be paid into the same, as aforesaid, it has exercised due regard for the Mainte- nance and Operation Expense and the debt service requirements of the presently Outstanding Parity Bonds and the City has not bound and obligated itself to set aside and pay into the Bond Fund a greater amount or proportion of the revenue of such util- ity than in the judgment of the City Council will be available over and above such Maintenance and Operation Expense and debt service requirements of the Outstanding Parity Bonds and that no portion of the Revenue of the Waterworks Utility of the City has been previously pledged for any other unrefunded indebtedness, except for the payment of the presently outstanding Parity Bonds . Section 9. The City covenants and agrees with the owner and holder of each Bond at any time outstanding as follows: (a) It will establish, maintain and collect such rates and charges for water and sanitary sewage dis- posal service so long as any Outstanding Parity Bonds and Bonds are outstanding as will make available for the payment of the principal of and interest on such bonds an amount equivalent to at least 1.3 times the average annual debt service requirements, both prin- cipal and interest, on the Outstanding Parity Bonds and the Bonds after deducting costs of maintenance and operation from the Revenue of the Waterworks Utility of the City. "Average annual debt service require- ments" shall mean the aggregate amount of principal and interest payable in each year over the remaining life of such Outstanding Parity Bonds and Bonds divided by the number of maturity years remaining to the last maturity of the longest maturing issue, being the year 1999 . - 19 - (b) It will at all times maintain and keep the Waterworks Utility of the City 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) It will not sell, lease, mortgage or in any manner encumber or dispose of all the property of the Waterworks Utility of the City unless provision is made for payment into each of the Renton 1977 Water and Sewer Revenue Refunding Bond Redemption Fund, No . 2 (the "1977 Bonds, Issue No. 2 Bond Fund" ) , the Renton 1977 Water and Sewer Revenue Refunding Bond Redemption Fund, No. 3 (the "1977 Bonds, Issue No. 3 Bond Fund" ) , and the Bond Fund, of sums sufficient to pay, respectively, the principal of and interest on all 1977 Bonds, Issue No . 2, 1977 Bonds, Issue No . 3, and Bonds at any time outstanding, and that it will not sell, lease, mortgage, or in any manner encumber or dispose of any part of the property of the Water- works Utility of the City that is used, useful and material to the operation thereof, unless provision is made for replacement thereof, or for payment into the 1977 Bonds, Issue No. 2 Bond Fund, the 1977 Bonds, Issue No. 3 Bond Fund, and the Bond Fund of the total amount of revenue received which shall not be less than an amount which shall bear the same ratio to the amount of the outstanding 1977 Bonds, Issue No. 2, 1977 Bonds, Issue No. 3, and Bonds, respectively, as the revenue available for debt service for such out- standing bonds for the twelve months preceding such sale, lease, encumbrance or disposal from the portion of the utility sold, leased, encumbered or disposed of bears to the revenue available for debt service for such bonds from the entire utility for the same period. Any such money so paid into such funds shall be used to retire such outstanding bonds at the earliest possible date. (d) It will while any of the Bonds remains out- standing keep proper and separate accounts and records in which complete and separate entries shall be made of all transactions relating to the Waterworks Utility of the City, and it will furnish the original pur- chaser or purchasers of the Bonds or any subsequent holder or holders thereof at the written request of such holder or holders complete operating and income statements of such utility in reasonable detail occur- Ing any calendar year not more than ninety days after - 20 - the close of such calendar year, and it will grant any holder or holders of at least twenty-five percent of the outstanding Bonds the right at all reasonable times to inspect the entire Waterworks Utility of the City and all records, accounts and data of the City relating thereto. Upon request of any holder of any of the Bonds, it also will furnish to such holder a copy of the most recently completed audit of the City' s accounts by the State Auditor of Washington. (e) It will not furnish water or sanitary sewage disposal service to any customer whatsoever free of charge and promptly will take legal action to enforce collection of all delinquent accounts . (f) It will carry the types of insurance on the Waterworks Utility of the City properties in the amounts normally carried by private water and sewer companies engaged in the operation of water and sewer- age systems, and the cost of such insurance shall be considered a part of operating and maintaining such utility. If, as, and when, the United States of America or some agency thereof shall provide for War Risk Insurance, the City further agrees to take out and maintain such insurance on all or such portions of system on which such War Risk Insurance may be written in an amount or amounts to cover adequately the value thereof . (g) It will pay all costs of Maintenance and Operation Expense and the debt service requirements for the Outstanding Parity Bonds and the outstanding Bonds, and otherwise meet the obligations of the City as herein set forth. (h) It will spend the proceeds of the Bonds with due diligence to completion of the purposes specified herein and will make no use of the proceeds of the Bonds or other funds of the City at any time during the term of the Bonds which will., cause such Bonds to be arbitrage bonds within the meaning of Section 103(c) of the United States Internal Revenue Code of 1954, as amended, and applicable regulations thereunder . Section 10. The Bonds shall be printed on lithographed or good bond paper in a form consistent with the provisions of this 21 - ordinance, shall be signed by the facsimile signature of the Mayor, attested by the manual signature of the City Clerk and shall have a facsimile reproduction of the City seal printed thereon, and the interest coupons shall bear the facsimile sig- natures of the Mayor and the City Clerk. Section 11 . In the event the City shall issue advance refunding bonds pursuant to the laws of the State of Washington to pay the principal of and interest on the Bonds or such por- tion thereof included in the refunding plan as the same become due and payable and to refund all such then outstanding Bonds and to pay the costs of refunding, and shall have irrevocably set aside for and pledged to such payment and refunding, money and/or direct obligations of the United States of America or other legal investments sufficient in amount, together with known earned income from the investment thereof, to make such payments and to accomplish the refunding as scheduled, and shall irrevocably make provisions for redemption of such Bonds, then in that case all right and interest of the owners or holders of the Bonds to be so retired or refunded and the appurtenant coupons in the covenants of this ordinance and in the Revenue of the Waterworks Utility of the City, funds and accounts obligated to the payment of such refunding bonds, except that right to receive the funds so set aside and pledged, shall thereupon cease and become void and the City may then apply any moneys in any fund of account established for the payment or redemption of - 22 - such Bonds or coupons to any lawful purposes as it shall determine . In the event the refunding plan provides that the refunding bonds be secured by cash and/or direct obligations of the United States of America or other legal investments pending the prior redemption of those Bonds being refunded and if such refunding plan also provides that certain cash and/or direct obligations of the United States of America or other legal investments are irrevocably pledged for the prior redemption of those Bonds included in the refunding plan, then only the debt service on the Bonds and the refunding bonds payable from the Revenue of the Waterworks Utility of the City shall be included in the computation of coverage for issuance of Parity Bonds and the annual computation of coverage for determining compliance with the rate covenants . Section 12 . The City reserves the right to issue Future Parity Bonds which will constitute a lien and charge upon the Revenue of the Waterworks Utility of the City on a parity with the Outstanding Parity Bonds, and the Bonds, provided the condi- tions set forth in Section 15 of Ordinance No. 1450, as modified by the provisions set forth in Section 13 or Ordinance No. 3169, are met and complied with at the time of the issuance of such Future Parity Bonds, which sections are by this reference incor- porated herein and made a part hereof and shall continue to be applicable even though the °City of Renton Water and Sewer - 23 - Refunding and Improvement Bonds. 1953, " have been paid and retired, provided, however, that with respect to the issuance of any Future Parity Bonds, Subsection A of Section 15 of Ordinance No. 1450 is modified to read as follows : (A) All payments required by any ordinance of the City to be paid into any bond redemption funds and accounts thereof created to secure the payment of bonds issued on a parity of lien herewith shall have been made into the respective bond redemption funds and accounts thereof for the payment of such bonds and no deficiency exists therein. Section 13 . The Bonds shall be sold for cash at public sale for not more than a 2% discount plus accrued interest to the date of delivery of and payment for the Bonds . The City Clerk is authorized to give notice calling for bids to purchase the Bonds by publishing such notice once a week for two consecutive weeks in the official newspaper of the City, or, if there be no official newspaper of the City, in a newspaper of general circulation in King County, Washington, the first publication date thereof to be no later than April 22, 1983, and by publishing no later than April 22, 1983 a short abbreviated form of such notice once in The Seattle Daily Journal of Commerce and Northwest Construction Record of Seattle, Washington, and in the Daily Bond Buyer of New York, New York. Such notice shall specify that sealed bids for the purchase of the Bonds shall be received by the City Clerk in her office in the City Hall on May 2, 1983, up to 11:00 a.m. , local time, at which time all bids will be publicly opened and read and an award made by the City Council at its regular meeting to 24 - be held in the City Council Chambers commencing at 8 :00 p.m. , local time, on the same date. Bids shall be invited for the purchase of the Bonds with fixed maturities in accordance with the schedule specified in Section 4 hereof . The notice shall specify the maximum effective rate of interest the Bonds shall bear, namely, 12% per annum, and shall require bidders to submit a bid specifying: (a) The lowest rate or rates of interest and discount below par at which the bidder will purchase the Bonds; or (b) The lowest rate or rates of interest at which the bidder will purchase the Bonds at par . No bid offering to purchase the Bonds at a discount of more than 2% plus accrued interest or offering to purchase less than the entire issue will be considered. The purchaser must pay accrued interest to date of delivery of the bonds . Coupon rates shall be in multiples of 1/8 or 1/20 of 1%, or both. No more than one rate of interest may be fixed for any one maturity. Only one coupon will be attached to each of the Bonds for each installment of interest thereon, and bids provid- ing for additional or supplemental coupons will be rejected. The maximum differential between the lowest and highest coupon rates named in any bid shall not exceed 2%. For the purpose of comparing the bids only, the coupon rates bid being controlling, each bid shall state the total interest cost over the life of the Bonds and the net effective - 25 - interest rate of the bid, taking into account the discount, if any, bid . The Bonds shall be sold to the bidder making the best bid, subject to the right of the City Council to reject any and all bids and to readvertise the Bonds for sale in the manner pro- vided by law, and no bid for less than all of the Bonds shall be considered. The City further reserves the right to waive any irregularity in any bid or in the bidding process . All bids shall be sealed and, except the bid of the State of Washington, if one is received, shall be accompanied by a deposit of $30,000. The deposit shall be either by certified or cashier ' s check made payable to the City Director of Finance and shall be returned promptly if the bid is not accepted. The City reserves the right to invest the good faith deposit of the pur- chaser pending the payment for the Bonds . The purchaser shall not be credited for such earnings. If the Bonds are ready for delivery and the successful bidder shall fail or neglect to complete the purchase of the Bonds within forty days following the acceptance of its bid, the amount of its deposit shall be forfeited to the City and in that event the City may accept the bid of the one making the next best bid. If there be two or more equal bids and such bids are the best bids received, the City Council shall determine by lot which bid shall be accepted. The Bonds will be delivered to the successful bidder upon pay- ment of the purchase price plus accrued interest to the date of delivery, less the amount of the good faith deposit, at the - 26 - office of the City Clerk or in Seattle, Washington, at the City' s expense, or at such other place upon which the City Clerk and the successful bidder may mutually agree at the purchaser ' s expense. Settlement shall be made in federal funds immediately available at the time of delivery of the Bonds . A no-litigation certificate in the usual form will be included in the closing papers . CUSIP numbers will be printed on the Bonds, if requested in the bid of the successful bidder, but neither failure to print such numbers on any bond nor error with respect thereto shall constitute cause for a failure or refusal by the purchaser thereof to accept delivery of and pay for the Bonds in accord- ance with the terms of the purchase contract . All expenses in relation to the printing of CUSIP numbers on the Bonds shall be paid by the City, but the fee of the CUSIP Service Bureau for the assignment of those numbers shall be the responsibility of and shall be paid by .the purchaser . Any bid presented after the time specified for the receipt of bids will not be received, and any bid not accompanied by the required bid deposit at the time of opening will not be read or considered. If, prior to the delivery of the Bonds, the interest receivable by the holders thereof shall become taxable, directly or indirectly, by the terms of any federal income tax law, the successful bidder may at its option be relieved of its 27 - obligation to purchase the Bonds, and in such case the deposit accompanying its bid will be returned, without interest . The notice of bond sale shall provide that the City will cause the Bonds to be printed or lithographed and signed and will furnish the approving legal opinion of Messrs . Roberts & Shefelman, bond counsel of Seattle, Washington, covering the Bonds without cost to the purchaser, the opinion also being printed on each bond. Bond counsel shall not be required to review or express any opinion concerning the completeness or accuracy of any official statement, offering circular or other sales material issued or used in connection with the Bonds, and bond counsel ' s opinion shall so state. Such notice also shall provide that further information regarding the details of the Bonds may be received upon request made to the City Clerk or to Seattle-Northwest Securities Corporation, 3700 Seafirst Fifth Avenue Plaza, Seattle, Washington, the City' s financial consultant. Section 14 . There is created in the office of the City Treasurer a special fund of the City to be known and designated as the "Water and Sewer Construction Fund, 1983 . " The principal proceeds received from the issuance and sale of the Bonds shall be deposited in the "Water and Sewer Construction Fund, 1983 , " and shall be used to pay the costs of carrying out the system or plan of additions to and betterments and extensions of the Waterworks Utility of the City specified, adopted and ordered to be carried out herein and the expenses incurred in the issuance 28 - of the Bonds . Pending the expenditure of such principal pro- ceeds out of the Water and Sewer Construction Fund, 1983, the money in such fund may be invested in any legal investment and the investment income may be retained in such fund and used for the purposes of such fund. The accrued interest received, if any, shall be deposited in the Bond Fund. PASSED BY THE CITY COUNCIL, this 11th day of April, 1983 . MARINE z MOTOR, City Clerk APPROVED BY THE MAYOR, this 11th day of April, 1983 . axbc�,c� . S�. Doc BARBARA Y. SHTNPOCF, Mayor Approved as to Form: City Attorney Date of Publication: April 15, 1983 0230r - 29 -