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HomeMy WebLinkAboutCouncil 10/01/2012AGENDA  RENTON CITY COUNCIL    REGULAR MEETING  October 1, 2012  Monday, 7 p.m.  1.CALL TO ORDER AND PLEDGE OF ALLEGIANCE 2.ROLL CALL 3.PROCLAMATIONS a. Community Planning Month ‐ October 2012  b. Domestic Violence Awareness and Prevention Month ‐ October 2012  4.APPEAL a. Planning & Development Committee Report re: Galloway at the Highlands Plat Permit/Impact  Fees    State law requires that the City establish a process to handle appeals from application of environmental and  developmental rules and regulations. The Renton City Council, feeling it was best for the elected representatives  to handle the appeals rather than require citizens to go to court, has retained appellate jurisdiction to itself.     The courts have held that the City Council, while sitting as an appellate body, is acting as a quasi‐judicial body and  must obey the rules of procedure of a court more than that of a political body.     By City Code, and by State law, the City Council may not consider new evidence in this appeal. The parties to the  appeal have had an opportunity to address their arguments to the Planning & Development Committee of the  City Council at a meeting previously held. Because of the court requirements prohibiting the City Council from  considering new evidence, and because all parties have had an opportunity to address their concerns to the  Planning & Development Committee, the City Council may not consider oral or written testimony at the City  Council meeting. The Council understands that this is frustrating to citizens and is outside the normal process of  open  discourse  provided  to  citizenry  during  the  audience  comment  portion  of  the  City  Council  meeting.  However, this burden of not allowing Council to be addressed concerning pending appeals is outweighed by the  quick, inexpensive and local appeal process provided by the Renton City Council.   5.ADMINISTRATIVE REPORT 6.AUDIENCE COMMENT (Speakers must sign up prior to the Council meeting.  Each speaker is allowed five minutes.  The  comment period will be limited to one‐half hour.  The second comment period later on in the  agenda is unlimited in duration.)  When you are recognized by the Presiding Officer, please walk to  the podium and state your name and city of residence for the record, SPELLING YOUR LAST NAME. NOTICE to all participants:  pursuant to state law, RCW 42.17A.555, campaigning for any ballot  measure or candidate in City Hall and/or during any portion of the council meeting, including  the audience comment portion of the meeting, is PROHIBITED.  Page 1 of 221 7.CONSENT AGENDA The following items are distributed to Councilmembers in advance for study and review, and the  recommended actions will be accepted in a single motion.  Any item may be removed for further  discussion if requested by a Councilmember.  a. Approval of Council meeting minutes of 9/24/2012.  Council concur.  b. City Clerk reports bid opening on 9/25/2012 for CAG‐12‐126; Stevens Ave. NW/Lind Ave. NW  Storm  System  Improvement  Project;  engineer's  estimate  $241,580;  and  submits  staff  recommendation to award the contract to the low bidder, Rodarte Construction, Inc., in the  amount of $189,765.  Council concur.  c. Administrative Services Department recommends approval of the third quarter 2012 Budget  Amendment increasing appropriations by $8,496,583.  Refer to Finance Committee.  d. Administrative  Services  Department requests  approval  of  an  ordinance  authorizing  the  issuance of revenue bonds in the amount of $9.35 million to refinance existing 2004 Water  Sewer  Revenue  Bonds  and  redemption  of  the  1998  Water  Sewer  Revenue  Bonds  one  year  early. Refer to Finance Committee.  e. Police Department requests approval of a memorandum of understanding to accept $16,320 in  grant  funds  from  the  Washington  State  Traffic  Safety  Commission  for  Target  Zero  Teams  project participation, a high visibility traffic safety emphasis program.  Council concur.  f. Utility Systems Division submits proposed increases to water, wastewater, surface water, and  solid waste utility rates for 2013 and 2014.  Refer to Utilities Committee.  8.UNFINISHED BUSINESS Topics listed below were discussed in Council committees during the past week.  Those topics  marked with an asterisk (*) may include legislation.  Committee reports on any topics may be held  by the Chair if further review is necessary. a. Committee of the Whole:  Impact Fees Update*  b. Finance Committee:  Vouchers  9.RESOLUTIONS AND ORDINANCES Ordinance for first reading: a. Fire Protection, Parks, and Transportation Impact Fees Update (See 8.a.)  10.NEW BUSINESS (Includes Council Committee agenda topics; call 425‐430‐6512 for recorded information.) 11.AUDIENCE COMMENT 12.ADJOURNMENT Page 2 of 221 COMMITTEE OF THE WHOLE AGENDA   (Preceding Council Meeting)     COUNCIL CHAMBERS   October 1, 2012  Monday, 5:45 p.m.    Fire Protection, Parks, and Transportation Impact Fees Update    7TH FLOOR CONFERENCING CENTER  6 p.m.    Meet & Greet with Renton School District    • Hearing assistance devices for use in the Council Chambers are available upon request to the City Clerk •   CITY COUNCIL MEETINGS ARE TELEVISED LIVE ON GOVERNMENT ACCESS CHANNEL 21 AND ARE RECABLECAST:  Tues. & Thurs. at 11 AM & 9 PM, Wed. & Fri at 9 AM & 7 PM and Sat. & Sun. at 1 PM & 9 PM  Page 3 of 221 3 a .   ‐   C o m m u n i t y   P l a n n i n g   M o n t h   ‐   O c t o b e r   2 0 1 2 P a g e 4 o f 2 2 1 3 b .   ‐   D o m e s t i c   V i o l e n c e   A w a r e n e s s   a n d   P r e v e n t i o n   M o n t h   ‐   O c t o b e r   2 0 1 2 P a g e 5 o f 2 2 1 CITY OF RENTON COUNCIL AGENDA BILL Subject/Title: Award of Bid Opening on 9/25/2012 for CAG-12- 126; Stevens Ave. NW/Lind Ave. NW Storm System Improvement Project Meeting: Regular Council - 01 Oct 2012 Exhibits: Staff Recommendation Bid Tab (13 bids) Submitting Data: Dept/Div/Board: City Clerk Staff Contact: Bonnie Walton, City Clerk, x 6502 Recommended Action: Council concur Fiscal Impact: Expenditure Required: $ 189,765 Transfer Amendment: $ Amount Budgeted: $ Revenue Generated: $ Total Project Budget: $ 470,057 City Share Total Project: $ SUMMARY OF ACTION: Engineer's Estimate: $241,580 In accordance with Council procedure, bids submitted at the subject bid opening met the following three criteria: There was more than one bid, there were no irregularities with the low bid, and the low bid was within total project budget. Therefore, staff recommends accepting the low bid from Rodarte Construction, Inc. in the amount of $189,765. STAFF RECOMMENDATION: Accept the low bid from Rodarte Construction, Inc. in the amount of $189,765 for the Stevens Ave. NW/Lind Ave. NW Storm System Improvement project. 7b. ‐ City Clerk reports bid opening on 9/25/2012 for CAG‐12‐126;  Stevens Ave. NW/Lind Ave. NW Storm System Improvement Project; Page 6 of 221 7b. ‐ City Clerk reports bid opening on 9/25/2012 for CAG‐12‐126;  Stevens Ave. NW/Lind Ave. NW Storm System Improvement Project; Page 7 of 221 7b. ‐ City Clerk reports bid opening on 9/25/2012 for CAG‐12‐126;  Stevens Ave. NW/Lind Ave. NW Storm System Improvement Project; Page 8 of 221 7b. ‐ City Clerk reports bid opening on 9/25/2012 for CAG‐12‐126;  Stevens Ave. NW/Lind Ave. NW Storm System Improvement Project; Page 9 of 221 7b. ‐ City Clerk reports bid opening on 9/25/2012 for CAG‐12‐126;  Stevens Ave. NW/Lind Ave. NW Storm System Improvement Project; Page 10 of 221 7b. ‐ City Clerk reports bid opening on 9/25/2012 for CAG‐12‐126;  Stevens Ave. NW/Lind Ave. NW Storm System Improvement Project; Page 11 of 221 7b. ‐ City Clerk reports bid opening on 9/25/2012 for CAG‐12‐126;  Stevens Ave. NW/Lind Ave. NW Storm System Improvement Project; Page 12 of 221 7b. ‐ City Clerk reports bid opening on 9/25/2012 for CAG‐12‐126;  Stevens Ave. NW/Lind Ave. NW Storm System Improvement Project; Page 13 of 221 7b. ‐ City Clerk reports bid opening on 9/25/2012 for CAG‐12‐126;  Stevens Ave. NW/Lind Ave. NW Storm System Improvement Project; Page 14 of 221 7b. ‐ City Clerk reports bid opening on 9/25/2012 for CAG‐12‐126;  Stevens Ave. NW/Lind Ave. NW Storm System Improvement Project; Page 15 of 221 7b. ‐ City Clerk reports bid opening on 9/25/2012 for CAG‐12‐126;  Stevens Ave. NW/Lind Ave. NW Storm System Improvement Project; Page 16 of 221 CITY OF RENTON COUNCIL AGENDA BILL Subject/Title: 2012 3rd Quarter Budget Amendment Ordinance Meeting: Regular Council - 01 Oct 2012 Exhibits: Issue Paper Budget Amendment Ordinance, Exhibit A, and Exhibit B 2012 3rd Quarter Budget Amendment Detail Submitting Data: Dept/Div/Board: Administrative Services Staff Contact: Iwen Wang Recommended Action: Refer to Finance Committee Fiscal Impact: Expenditure Required: $ 8,496,583 Transfer Amendment: $ Amount Budgeted: $ Revenue Generated: $ Total Project Budget: $ City Share Total Project: $ SUMMARY OF ACTION: The proposed 2012 3rd quarter budget amendments are primarily housekeeping items in nature. It will: 1) incorporate grants and associated expenditures awarded to the city during the period; 2) make corrections to the 2011/2012 budget due to errors/omissions found; 3) pre-pay remaining balance of the 2002 Fire Station 12 LTGO Bonds. STAFF RECOMMENDATION: Adopt the ordinance amending the 2012 portion of the 2011/2012 Biennial Budget 7c. ‐ Administrative Services Department recommends approval of the  third quarter 2012 Budget Amendment increasing appropriations by Page 17 of 221 ADMINISTRATIVE SERVICES DEPARTMENT M E M O R A N D U M DATE:October 1, 2012 TO:Rich Zwicker, Council President Members of the Renton City Council VIA:Denis Law, Mayor FROM:Iwen Wang, Administrator SUBJECT:2012 3rd Quarter Budget Amendment Ordinance ISSUE Should the 2012 Budget be amended to incorporate budget items as detailed below? RECOMMENDATION Adopt the ordinance amending the 2012 portion of the 2011/2012 Biennial Budget. OVERVIEW The proposed 2012 3rd quarter budget amendments are primarily housekeeping items in nature. It will 1) incorporate grants and associated expenditures awarded to the city during the period; 2) make corrections to 2011/2012 budget due to errors/omissions found; 3) pre-pay remaining balance of the 2002 Fire Station 12 LTGO Bonds; and 4) adjust revenue projections. Below is a summary of the changes. General Governmental Adjustments: The proposed appropriation amendment will increase the appropriation by a total of $4.2 million for the 2012 Budget Year: 1.Prepay the remaining balance of $2.3 million in Fire Station 12 Bonds. This will reduce annual debt service by $300k per year over the next 10 years (for a total of $3.03 million), and avoid over $700k in interest costs. To provide funding for this prepayment, we will sell the two interfund loans to Transportation CIP Fund (317) ($566k) and Golf Course Fund (404) ($1.1 million) to the Insurance Fund (502), transferring $400k from Fire Mitigation Fund (304), and use projected REET increase in the amount of $199k. 2.Move the SCORE Debt Service from General Fund (000) to Debt Service Fund (215), and move associated property taxes. 3.$65k for additional outside legal expenses for City Attorney Department for AT&T lawsuit, FEMA Flood Plan appeal and NPDES regulations appeal. 4.$1k for Washington State Arts Commission Grant. 5.$3k for CPR classes provided to Fire District 25 and 40 with corresponding class material expenditures. 6.$35k for a correction to the 2011 EMPG Grant and corresponding expenditures. 7.$1k for Emergency Management backpacks, expenses funded with donation from Renton Community Foundation. 8.Transfer $50k (from Police Seizure Funds) for security camera expansion (Fund 316). 9.Close out old library operating fund and transfer remaining balance ($49k) to Municipal CIP Fund (316) and Facilities ISF (504) to reimburse prior year expenses related to library studies that should have been charged to the 006 fund. 7c. ‐ Administrative Services Department recommends approval of the  third quarter 2012 Budget Amendment increasing appropriations by Page 18 of 221 Rich Zwicker, Council President Members of the Renton City Council Page 2 of 2 September 24, 2012 Other Funds: The proposed appropriation amendment for all other funds combined is $4.3 million; below are the details of these adjustments. 1.Path & Trails Fund (118): Transfer balance of $3k to Transportation CIP Fund (317) and close out fund. 2.Municipal CIP Fund (316): $115k includes $50k for security camera expansion and $65k for the construction of additional repair bays and mezzanine improvements in building D of Public Works Shops. $115k will be funded by transfers from Seizure Fund and Equipment Rental Fund (501). 3.Transportation CIP Fund (317): $2.6 million reduction (revising construction schedules), primarily for Rainier Avenue, NE 3rd/4th Street and Garden Avenue improvement projects. 4.New Library Development Fund (336): $25k increase in interest and $569k increase in REET to fund Big 5 property acquisition and restructure construction budget to Cedar River Library. 5.Airport CIP Fund (422): $3.1 million for 2 projects (Airport Aerospace Training Center and Taxiway Bravo Rehabilitation grant and costs). Also adjusting revenues by $50k to recognize a Washington State Department of Transportation grant for the Maintenance Dredging and Shoreline Mitigation Project. 6.Utility Systems (Fund 403, 405, 406, 407 and 427): $2.1 million total; add $644k in capital projects and $1.4 million to correct tax amounts (State and Utility tax). Capital projects will be funded by a Washington State Department of Ecology grant and State and Utility taxes will be funded by fund balance. 7.Equipment Rental Fund (501): $45k for early replacement of one (1) Police Ford Expedition (B115) which was planned for replacement in 2013. Also, an interfund transfer of $65k for the construction of additional repair bays and mezzanine of Public Works shops in building D. 8.Insurance Fund (502): $1.7 million increase to buy interfund loans from Transportation CIP Fund (317) and Golf Course Fund (404). CONCLUSION The 2012 3rd quarter budget amendments will update funding sources and appropriations for various operating and capital items, make minor corrections to the adopted 2011/2012 budget as identified herein and will pre-pay the $2.3 million balance for the 2002 Fire Station 12 Bonds. Staff recommends Council approve the proposed adjustments. Attachments: Budget Amendment Ordinance, Exhibit A, and Exhibit B 2012 3rd Quarter Budget Amendment Detail 7c. ‐ Administrative Services Department recommends approval of the  third quarter 2012 Budget Amendment increasing appropriations by Page 19 of 221 7c. ‐ Administrative Services Department recommends approval of the  third quarter 2012 Budget Amendment increasing appropriations by Page 20 of 221 7c. ‐ Administrative Services Department recommends approval of the  third quarter 2012 Budget Amendment increasing appropriations by Page 21 of 221 7c. ‐ Administrative Services Department recommends approval of the  third quarter 2012 Budget Amendment increasing appropriations by Page 22 of 221 7c. ‐ Administrative Services Department recommends approval of the  third quarter 2012 Budget Amendment increasing appropriations by Page 23 of 221 7c. ‐ Administrative Services Department recommends approval of the  third quarter 2012 Budget Amendment increasing appropriations by Page 24 of 221 2012 3rd Quarter Budget Amendment Detail 1/5 GENERAL FUND (Fund 0XX) Adjusted 2012 Adjustment Amended Beginning Fund Balance 11,057,551        ‐                               11,057,551           REVENUES 101,953,223      AS Selling Fund 317 Interfund Loan to Insurance Fund 566,160                       AS Selling Fund 404 Interfund Loan to Insurance Fund 1,149,907                   AS Moving Property Taxes from General Fund to Debt  Service Fund (1,024,711)                    CED Washington State Arts Commission Grant 1,000                           Fire CPR Classes FD 40 1,825                           Fire CPR Classes FD 25 1,000                           Fire 2011 EMPG BA correction 35,000                         Fire RCF for EM backpacks 1,250                           AS Moving Property Taxes General Fund to City Debt  Service Fund to fund SCORE Debt Service 1,024,711                     AS Transfer In from Fire Mitigation 400,000                       AS Transfer In from General Fund 1,716,067                   AS Real Estate Excise Tax (REET 1) 99,466                         AS Real Estate Excise Tax (REET 2) 99,467                         Total Revenue Adjustment 101,953,223     4,071,142                  106,024,365         EXPENDITURES 102,353,876      AS Transfer Out to Fund 215 1,716,067                   City Att Outside Legal Expenses ‐ AT&T Utility Tax Claim 25,000                         City Att Outside Flood Plan Appeal Legal Expenses ‐ FEMA 15,000                         City Att Outside Permit Appeal Legal Expenses ‐ NPDES 25,000                         CED Washington State Arts Commission Grant 1,000                           Police Downtown Security Camera Project 50,282                         Police Move SCORE Debt to Debt Service Fund (1,024,711)                    Police Reduce other seizure expenses to fund downtown security camera (50,282)                        Fire CPR Classes FD 40 1,825                           Fire CPR Classes FD 25 1,000                           Fire 2011 EMPG BA correction 35,000                         Fire RCF for EM backpacks 1,250                           CS Transfer Library related funds to Fund 316 10,821                         CS Transfer remaining Library Fund Balance to Facilities  Internal Service Fund 37,782                           AS Prepay 2002 Fire Station 12 Debt Service 2,315,000                     AS Moving SCORE Debt Services from GF to DS Fund 1,024,711                     Total Expenditure Adjustment 102,353,876     4,184,745                  106,538,621         Ending Fund Balance 10,656,898         (113,603)                      10,543,295           PATH & TRAIL FUEL TAX (Fund 118) Adjusted 2012 Adjustment Amended Beginning Fund Balance 3,314                   ‐                               3,314                     REVENUES ‐                       Total Revenue Adjustment ‐                       ‐                                ‐                        EXPENDITURES ‐                       AS Transfer Fund Balance of Paths and Trails Fund to  Transportation CIP 3,314                             Total Expenditure Adjustment ‐                      3,314                          3,314                     Ending Fund Balance 3,314                    (3,314)                            ‐                         H:\Finance\Budget\1CY\2.Budget Adjustments\2012 3rd Quarter Budget Adjustment\2012 3rd Quarter Budget Adjustment.xlsx 9/20/2012 7c. ‐ Administrative Services Department recommends approval of the  third quarter 2012 Budget Amendment increasing appropriations by Page 25 of 221 2012 3rd Quarter Budget Amendment Detail 2/5 IMPACT MITIGATION FUNDS (Fund 303, 304, 305) Adjusted 2012 Adjustment Amended Beginning Fund Balance 3,624,911           ‐                               3,624,911             REVENUES 260,000              CS Proceeds from sale of old Fire Station 13 163,602                       PW Decrease Mitigation Projection (70,000)                        Total Revenue Adjustment 260,000             93,602                        353,602                 EXPENDITURES 1,386,926           Fire 2002 Fire Station 12 Debt Service 400,000                       Total Expenditure Adjustment 1,386,926          400,000                     1,786,926             Ending Fund Balance 2,497,985            (306,398)                      2,191,587             MUNICIPAL CIP FUND (Fund 316) Adjusted 2012 Adjustment Amended Beginning Fund Balance 3,745,546           ‐                               3,745,546             REVENUES 2,928,009           CS Downtown Security Camera Project 50,282                         CS Transfer In from Equipment Rental 65,000                         CS Transfer Library related funds to Fund 316 10,821                         Total Revenue Adjustment 2,928,009          126,103                     3,054,112             EXPENDITURES 6,337,982           CS Downtown Security Camera Project 50,282                         CS Public Works Shop Repair Bays 30,000                         CS Public Works Shop Mezzanine Building D 35,000                         Total Expenditure Adjustment 6,337,982          115,282                     6,453,264             Ending Fund Balance 335,573               10,821                          346,394                 TRANSPORTATION CIP FUND (Fund 317) Adjusted 2012 Adjustment Amended Beginning Fund Balance 3,422,219           ‐                               3,422,219             REVENUES 26,755,575         PW Rainier Ave S ‐ Fed STP (984,000)                     PW Rainier Ave S ‐ WSDOT (74,005)                          PW Rainier Ave S ‐ WSDOT Mobility (573,742)                     PW Rainier Ave S ‐ TIB (490,982)                     PW Rainier Ave S ‐ Sound Transit (1,107,000)                  PW Rainier Ave S ‐ PSE 146,557                       PW NE 4th St ‐ TIB (440,103)                       PW NE 4th St ‐ PSE Reimbursement 20,000                         PW NE 4th St ‐ Comcast Reimbursement 20,000                         PW NE 4th St ‐ WD # 90 Reimbursement 391,000                         PW Garden Ave N ‐ TIB (98,278)                        PW Transfer Fund Balance of Paths and Trails Fund to Transportation CIP 3,314                           Total Revenue Adjustment 26,755,575       (3,187,239)                 23,568,336           EXPENDITURES 30,135,972         PW Rainier Ave ‐ Preliminary Engineering 47,975                         PW Rainier Ave ‐ Right of Way 144,544                       PW Rainier Ave ‐ Construction (2,640,544)                  PW Rainier Ave ‐ Construction Services (635,147)                     PW NE 4th St ‐ Preliminary Engineering (99,026)                        PW NE 4th St ‐ Right of Way (357,010)                     PW NE 4th St ‐ Construction 275,700                       PW NE 4th St ‐ Construction Services 171,233                       PW Garden Ave Widening ‐ Construction (98,278)                        Total Expenditure Adjustment 30,135,972       (3,190,553)                 26,945,419           Ending Fund Balance 41,822                 3,314                            45,136                   H:\Finance\Budget\1CY\2.Budget Adjustments\2012 3rd Quarter Budget Adjustment\2012 3rd Quarter Budget Adjustment.xlsx 9/20/2012 7c. ‐ Administrative Services Department recommends approval of the  third quarter 2012 Budget Amendment increasing appropriations by Page 26 of 221 2012 3rd Quarter Budget Amendment Detail 3/5 NEW LIBRARY DEVELOPMENT FUND (Fund 336) Adjusted 2012 Adjustment Amended Beginning Fund Balance 19,196,447        ‐                               19,196,447           REVENUES ‐                       CS Increase REET Projections to cover Big5 Site acquisition cost 543,588                       CS Increase Interest Projection 25,000                         Total Revenue Adjustment ‐                      568,588                     568,588                 EXPENDITURES 19,196,447         CS Increae CedarRiver  Library Construction Budget to $8.9 million 25,000                         Total Expenditure Adjustment 19,196,447       25,000                        19,221,447           Ending Fund Balance ‐                        543,588                       543,588                 AIRPORT FUND (Fund 402/422) Adjusted 2012 Adjustment Amended Beginning Fund Balance 2,084,710           ‐                               2,084,710             REVENUES 5,448,369           PW Washington State Department of Commerce grant for  the Airport Aerospace Training Center Project 2,462,500                     PW Washignton State Department of Transportation  Grant for the Maintenance Dredging and Shoreline  Mitigation Project 50,000                           PW FAA grant for the Taxiway Bravo Rehabilitation Project 750,000                       Total Revenue Adjustment 5,448,369          3,262,500                  8,710,869             EXPENDITURES 6,946,991           PW Airport Aerospace Training Center Project 2,462,500                   PW Taxiway Bravo Rehabilitation Project 655,556                       Total Expenditure Adjustment 6,946,991          3,118,056                  10,065,047           Ending Fund Balance 586,088               144,444                       730,532                 SOLID WASTE UTILITY FUND (Fund 403) Adjusted 2012 Adjustment Amended Beginning Fund Balance 1,734,734           ‐                               1,734,734             REVENUES 15,021,811         Total Revenue Adjustment 15,021,811        ‐                               15,021,811           EXPENDITURES 15,014,481         PW State Tax 43,860                         PW State Refuse Tax 197,514                       PW Utility Tax to General Fund 230,646                       Total Expenditure Adjustment 15,014,481       472,020                     15,486,501           Ending Fund Balance 1,742,064            (472,020)                      1,270,044             GOLF COURSE FUND (Fund 404/424) Adjusted 2012 Adjustment Amended Beginning Fund Balance 615,488              ‐                               615,488                 REVENUES 2,533,545           Total Revenue Adjustment 2,533,545           ‐                               2,533,545             EXPENDITURES 2,637,204           Total Expenditure Adjustment 2,637,204           ‐                               2,637,204             Ending Fund Balance 511,829                ‐                                511,829                 H:\Finance\Budget\1CY\2.Budget Adjustments\2012 3rd Quarter Budget Adjustment\2012 3rd Quarter Budget Adjustment.xlsx 9/20/2012 7c. ‐ Administrative Services Department recommends approval of the  third quarter 2012 Budget Amendment increasing appropriations by Page 27 of 221 2012 3rd Quarter Budget Amendment Detail 4/5 WATER UTILITY FUND (Fund 405/425) Adjusted 2012 Adjustment Amended Beginning Fund Balance 7,626,661           ‐                               7,626,661             REVENUES 16,475,675         Total Revenue Adjustment 16,475,675        ‐                               16,475,675           EXPENDITURES 17,774,883         PW State Tax 226,225                       PW Utility Tax to General Fund 310,180                       Total Expenditure Adjustment 17,774,883       536,405                     18,311,288           Ending Fund Balance 6,327,453            (536,405)                      5,791,048             WASTEWATER UTILITY FUND (Fund 406/416/426) Adjusted 2012 Adjustment Amended Beginning Fund Balance 2,287,161           ‐                               2,287,161             REVENUES 22,407,961         Total Revenue Adjustment 22,407,961        ‐                               22,407,961           EXPENDITURES 22,050,192         PW State Tax 48,913                         PW Utility Tax to General Fund 161,430                       Total Expenditure Adjustment 22,050,192       210,343                     22,260,535           Ending Fund Balance 2,644,930            (210,343)                      2,434,587             SURFACEWATER UTILITY FUND (Fund 407/427) Adjusted 2012 Adjustment Amended Beginning Fund Balance 4,210,599           ‐                               4,210,599             REVENUES 10,522,509         PW Rainier Ave Retrofit ‐ Dept of Ecology Grant 644,000                       Total Revenue Adjustment 10,522,509       644,000                     11,166,509           EXPENDITURES 12,279,377         PW State Tax 50,055                         PW Utility Tax to General Fund 166,849                       PW Lower Cedar River Sediment Management (216,000)                     PW Rainier Ave Stormwater Retrofit 216,000                         PW Rainier Ave Stormwater Retrofit 644,000                         PW Madsen Creek Sediment Basin Cleaning (85,000)                          PW Maplewood Crk Sediment Basin Cleaning (25,000)                          PW Small Drainage Projects 110,000                         Total Expenditure Adjustment 12,279,377       860,904                     13,140,281           Ending Fund Balance 2,453,731            (216,904)                      2,236,827             EQUIPMENT RENTAL FUND (Fund 501) Adjusted 2012 Adjustment Amended Beginning Fund Balance 4,774,376           ‐                               4,774,376             REVENUES 3,190,893           Total Revenue Adjustment 3,190,893           ‐                               3,190,893             EXPENDITURES 3,979,127           PW Office/Operating Supplies (22,000)                        PW Small Tools/Minor Equipment (8,000)                            PW Transfer Out to Fund 316 30,000                           PW Public Works Mezzanine Building D (35,000)                        PW Transfer Out to Fund 316 35,000                         PW Replacing Police Ford Expedition (B115) 1 year earlier 45,000                           Total Expenditure Adjustment 3,979,127          45,000                        4,024,127             Ending Fund Balance 3,986,142            (45,000)                        3,941,142             H:\Finance\Budget\1CY\2.Budget Adjustments\2012 3rd Quarter Budget Adjustment\2012 3rd Quarter Budget Adjustment.xlsx 9/20/2012 7c. ‐ Administrative Services Department recommends approval of the  third quarter 2012 Budget Amendment increasing appropriations by Page 28 of 221 2012 3rd Quarter Budget Amendment Detail 5/5 INSURANCE FUND (Fund 502) Adjusted 2012 Adjustment Amended Beginning Fund Balance 6,620,437           ‐                               6,620,437             REVENUES 3,187,593           Total Revenue Adjustment 3,187,593           ‐                               3,187,593             EXPENDITURES 3,134,079           HR Selling Fund 317 Interfund Loan to Insurance Fund 566,160                       HR Selling Fund 404 Interfund Loan to Insurance Fund 1,149,907                   Total Expenditure Adjustment 3,134,079          1,716,067                  4,850,146             Ending Fund Balance 6,673,951            (1,716,067)                   4,957,884             FACILITIES SERVICES FUND (Fund 504) Adjusted 2012 Adjustment Amended Beginning Fund Balance 300,238              ‐                               300,238                 REVENUES 4,334,952           CS Transfer remaining Library Fund Balance to Facilities Internal Service Fund 37,782                         Total Revenue Adjustment 4,334,952          37,782                        4,372,734             EXPENDITURES 4,389,399           Total Expenditure Adjustment 4,389,399           ‐                               4,389,399             Ending Fund Balance 245,791               37,782                          283,573                 H:\Finance\Budget\1CY\2.Budget Adjustments\2012 3rd Quarter Budget Adjustment\2012 3rd Quarter Budget Adjustment.xlsx 9/20/2012 7c. ‐ Administrative Services Department recommends approval of the  third quarter 2012 Budget Amendment increasing appropriations by Page 29 of 221 CITY OF RENTON COUNCIL AGENDA BILL Subject/Title: Refinance 2004 Water Sewer Revenue Bond Meeting: Regular Council - 01 Oct 2012 Exhibits: Bond Ordinance Issue Paper Submitting Data: Dept/Div/Board: Administrative Services Staff Contact: Jamie Thomas x6929 Recommended Action: Refer to Finance Committee Fiscal Impact: Expenditure Required: $ Transfer Amendment: $ Amount Budgeted: $ Revenue Generated: $ Total Project Budget: $ City Share Total Project: $ SUMMARY OF ACTION: Refund a portion of $10.335 million 2004 Water Sewer Revenue Bonds with the issuance of $9.35 million of bonds, plus an estimated $650k premium. The total amount subject to optional redemption is $9.895 million, however the interest rate would be higher if the City issued more than $10 million in tax exempt bonds, including premium, per year. After premiums and interest due are calculated, the City is limited to refunding approximately $9.015 million to maximize savings. Principal maturing on and after December 1, 2015 is subject to optional redemption without penalty on or after December 1, 2014. Because the bonds will be issued more than 90 days prior to the redemption date, this is considered an advanced refunding issue. The proceeds from the new bonds will pay for issuance costs and with $9.87 million deposited into an escrow account to pay interest when due until December 1, 2014; at which time the principle amount of $9.015 million will be paid. The $9.35 million bond issue (with $9.99 million in total proceeds) will have an estimated true interest cost of 3.27%, which would replace the current interest of 5.00%. Depending upon the actual interest rates at the time of pricing, the refunding is expected to generate estimated interest savings of $857k or, a cumulative net present value savings of $687k (7.6%). In addition to the refinancing of the 2004 bonds, we also recommend to pay off a minor balance ($360k) remaining on the 1998 Water/Sewer refunding revenue bonds carrying 5.1% interest rate due on December 1, 2013. STAFF RECOMMENDATION: Approve the proposed refinancing plan and adopt the ordinance authorizing issuance of $9.35 million of bonds to refund $9.015 million of the 2004 Water Sewer Revenue Bonds and redemption of the 1998 bonds one year early. 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 30 of 221 ADMINISTRATIVE SERVICES DEPARTMENT M E M O R A N D U M DATE:October 1, 2012 TO:Rich Zwicker, Council President Members of the Renton City Council VIA:Denis Law, Mayor FROM:Iwen Wang, Admin. Services Administrator SUBJECT:Refunding 2004 Water-Sewer Revenue Bonds ISSUE Should the City refinance the 2004 Water-Sewer Bonds issued in 2004 to fund projects identified the Waterworks Utility Capital Improvement Plan? RECOMMENDATION Staff recommends approval of the proposed refinancing plan and adoption of the necessary ordinance authorizing the issuance of $9.35 million of bonds at a true interest cost of approximately 3.27%, which will replace the existing $9.015 million of bonds carrying an average interest rate of 5.00% and generate an estimated savings of $857k in interest cost, or $687k in net present value savings (7.6%) on the refunded bonds. In addition, we also recommend to pay off a minor balance ($360k) remaining on the 1998 Water/Sewer refunding revenue bonds carrying 5.1% interest rate due on December 1, 2013. BACKGROUND The City issued $10.335 million of Water and Sewer Revenue Bonds in 2004: 1)$5 million towards the $12 million new water filtration facility at the Maplewood booster pump station; 2)$2 million to install 7,000 linear feet of 18-24 inch sewer main on NE Sunset Blvd to accommodate growth in the eastern area of the City; and 3)$3 million to replace 3,500 linear feet of 24 inch storm pipe along SW 7th Street to address water drainage issues. Principal maturing on and after December 1, 2015 is subject to optional redemption without penalty on or after December 1, 2014. Because the bonds will be issued more than 90 days prior to the redemption date, this is considered an advanced refunding issue. The proceeds of the $9.35 million new bonds issued plus the projected issue premium of $650k, will pay for issuance costs and the remaining $9.87 million will be deposited into an escrow account to pay interest when due until December 1, 2014; at which time the principle amount of $9.015 million will be fully paid. The total amount subject to optional redemption is $9.895 million, however the interest rate would be higher if the City issued more than $10 million in tax exempt bonds, including premium, per year. After premiums and interest due are calculated, the City is limited to 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 31 of 221 refunding approximately $9.015 million. This partial refunding will leave a $1.32 million unrefunded portion of the 2004 bonds maturing 2018 or sooner, which can either be refinanced later or prepaid with Utility revenues on or after December 1, 2014. To include this portion in the current refunding, they would have to be refunded as taxable bonds and would only generate an approximate savings of $20,000. The projected savings of the refunding bonds assumes the interest rate will be 0.5% higher than current rate. Depending upon the actual interest rate at the time of the pricing, the total interest cost saving could be as high as $1.5 million if the rates remains unchanged. The 1998 water-sewer revenue bonds are scheduled to be paid off December 1, 2013, with total outstanding principal of $360k. By paying off the bonds one year early the City will save 5.1% on the outstanding principal. CONCLUSION Staff recommends the Council approve the refinancing ordinance and the associated documents necessary to issue the new bonds, including the escrow agreement, and the redemption of a portion of the outstanding 2004 Water Sewer Revenue Bonds and early payment of the remaining 1998 Water Sewer Revenue Bonds. Attachment: Refunding Savings Calculation Date August 22, 2012. 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 32 of 221 Aug 22, 2012 11:29 am Prepared by Seattle-Northwest Securities Corp. - JMW (Finance 7.001 RE...:RENTON-R04WS_BQ,R04WS_BQ) Page 1 SUMMARY OF REFUNDING RESULTS City of Renton Proposed Refunding of 2004 WS Bonds (BQ) Assumes current AA+ interest rates plus 50 basis points Dated Date 12/07/2012 Delivery Date 12/07/2012 Arbitrage yield 3.041757% Escrow yield 0.257427% Bond Par Amount 9,350,000.00 True Interest Cost 3.274522% Net Interest Cost 3.398384% Average Coupon 3.906090% Average Life 12.277 Par amount of refunded bonds 9,015,000.00 Average coupon of refunded bonds 5.000000% Average life of refunded bonds 12.577 PV of prior debt to 12/07/2012 @ 3.041757% 10,848,691.14 Net PV Savings 687,006.98 Percentage savings of refunded bonds 7.620710% Percentage savings of refunding bonds 7.347668% 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 33 of 221 Aug 22, 2012 11:29 am Prepared by Seattle-Northwest Securities Corp. - JMW (Finance 7.001 RE...:RENTON-R04WS_BQ,R04WS_BQ) Page 2 SAVINGS City of Renton Proposed Refunding of 2004 WS Bonds (BQ) Assumes current AA+ interest rates plus 50 basis points Present Value Prior Refunding Annual to 12/07/2012 Date Debt Service Debt Service Savings Savings @ 3.0417573% 06/01/2013 225,375.00 173,613.33 51,761.67 51,011.89 12/01/2013 225,375.00 219,600.00 5,775.00 57,536.67 5,606.09 06/01/2014 225,375.00 179,200.00 46,175.00 44,152.91 12/01/2014 225,375.00 214,200.00 11,175.00 57,350.00 10,525.54 06/01/2015 225,375.00 178,850.00 46,525.00 43,164.63 12/01/2015 225,375.00 213,850.00 11,525.00 58,050.00 10,532.40 06/01/2016 225,375.00 178,500.00 46,875.00 42,196.09 12/01/2016 225,375.00 213,500.00 11,875.00 58,750.00 10,529.53 06/01/2017 225,375.00 177,975.00 47,400.00 41,399.83 12/01/2017 225,375.00 217,975.00 7,400.00 54,800.00 6,366.44 06/01/2018 225,375.00 177,375.00 48,000.00 40,677.17 12/01/2018 255,375.00 247,375.00 8,000.00 56,000.00 6,677.96 06/01/2019 224,625.00 176,325.00 48,300.00 39,714.20 12/01/2019 409,625.00 401,325.00 8,300.00 56,600.00 6,722.36 06/01/2020 220,000.00 172,950.00 47,050.00 37,535.97 12/01/2020 465,000.00 452,950.00 12,050.00 59,100.00 9,469.34 06/01/2021 213,875.00 168,750.00 45,125.00 34,929.67 12/01/2021 478,875.00 468,750.00 10,125.00 55,250.00 7,719.99 06/01/2022 207,250.00 164,250.00 43,000.00 32,294.98 12/01/2022 487,250.00 474,250.00 13,000.00 56,000.00 9,617.33 06/01/2023 200,250.00 159,600.00 40,650.00 29,622.13 12/01/2023 1,650,250.00 1,634,600.00 15,650.00 56,300.00 11,233.49 06/01/2024 164,000.00 130,100.00 33,900.00 23,968.71 12/01/2024 1,684,000.00 1,660,100.00 23,900.00 57,800.00 16,645.15 06/01/2025 126,000.00 99,500.00 26,500.00 18,179.43 12/01/2025 1,726,000.00 1,694,500.00 31,500.00 58,000.00 21,285.78 06/01/2026 86,000.00 67,600.00 18,400.00 12,247.33 12/01/2026 1,766,000.00 1,727,600.00 38,400.00 56,800.00 25,176.74 06/01/2027 44,000.00 34,400.00 9,600.00 6,199.89 12/01/2027 1,804,000.00 1,754,400.00 49,600.00 59,200.00 31,552.89 14,691,500.00 13,833,963.33 857,536.67 857,536.67 686,955.86 Savings Summary PV of savings from cash flow 686,955.86 Plus: Refunding funds on hand 51.12 Net PV Savings 687,006.98 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 34 of 221 Aug 22, 2012 11:29 am Prepared by Seattle-Northwest Securities Corp. - JMW (Finance 7.001 RE...:RENTON-R04WS_BQ,R04WS_BQ) Page 3 SOURCES AND USES OF FUNDS City of Renton Proposed Refunding of 2004 WS Bonds (BQ) Assumes current AA+ interest rates plus 50 basis points Dated Date 12/07/2012 Delivery Date 12/07/2012 Sources: Bond Proceeds: Par Amount 9,350,000.00 Premium 648,266.70 9,998,266.70 Uses: Refunding Escrow Deposits: Cash Deposit 1.58 SLGS Purchases 9,867,764.00 9,867,765.58 Delivery Date Expenses: Cost of Issuance 65,000.00 Underwriter's Discount 65,450.00 130,450.00 Other Uses of Funds: Additional Proceeds 51.12 9,998,266.70 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 35 of 221 Aug 22, 2012 11:29 am Prepared by Seattle-Northwest Securities Corp. - JMW (Finance 7.001 RE...:RENTON-R04WS_BQ,R04WS_BQ) Page 4 BOND PRICING City of Renton Proposed Refunding of 2004 WS Bonds (BQ) Assumes current AA+ interest rates plus 50 basis points Maturity Yield to Call Call Call Date Call Price Premium Bond Component Date Amount Rate Yield Price Maturity Date Price for Arb Yield for Arb Yield (-Discount) Serial Bonds (BQ): 12/01/2013 40,000 2.000% 1.250% 100.730 292.00 12/01/2014 35,000 2.000% 1.240% 101.484 519.40 12/01/2015 35,000 2.000% 1.380% 101.805 631.75 12/01/2016 35,000 3.000% 1.480% 105.858 2,050.30 12/01/2017 40,000 3.000% 1.680% 106.284 2,513.60 12/01/2018 70,000 3.000% 1.990% 105.670 3,969.00 12/01/2019 225,000 3.000% 2.280% 104.623 10,401.75 12/01/2020 280,000 3.000% 2.540% 103.304 9,251.20 12/01/2021 300,000 3.000% 2.730% 102.137 6,411.00 12/01/2022 310,000 3.000% 2.780% 101.906 5,908.60 12/01/2023 1,475,000 4.000% 2.910% 109.384 C 2.991% 12/01/2022 100.000 12/01/2022 100.000 138,414.00 12/01/2024 1,530,000 4.000% 2.990% 108.661 C 3.128% 12/01/2022 100.000 12/01/2022 100.000 132,513.30 12/01/2025 1,595,000 4.000% 3.100% 107.676 C 3.270% 12/01/2022 100.000 12/01/2022 100.000 122,432.20 12/01/2026 1,660,000 4.000% 3.220% 106.613 C 3.402% 12/01/2022 100.000 12/01/2022 100.000 109,775.80 12/01/2027 1,720,000 4.000% 3.290% 105.999 C 3.483% 12/01/2022 100.000 12/01/2022 100.000 103,182.80 9,350,000 648,266.70 Dated Date 12/07/2012 Delivery Date 12/07/2012 First Coupon 06/01/2013 Par Amount 9,350,000.00 Premium 648,266.70 Production 9,998,266.70 106.933334% Underwriter's Discount -65,450.00 -0.700000% Purchase Price 9,932,816.70 106.233334% Accrued Interest Net Proceeds 9,932,816.70 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 36 of 221 Aug 22, 2012 11:29 am Prepared by Seattle-Northwest Securities Corp. - JMW (Finance 7.001 RE...:RENTON-R04WS_BQ,R04WS_BQ) Page 5 BOND DEBT SERVICE City of Renton Proposed Refunding of 2004 WS Bonds (BQ) Assumes current AA+ interest rates plus 50 basis points Period Annual Ending Principal Coupon Interest Debt Service Debt Service 06/01/2013 173,613.33 173,613.33 12/01/2013 40,000 2.000% 179,600.00 219,600.00 393,213.33 06/01/2014 179,200.00 179,200.00 12/01/2014 35,000 2.000% 179,200.00 214,200.00 393,400.00 06/01/2015 178,850.00 178,850.00 12/01/2015 35,000 2.000% 178,850.00 213,850.00 392,700.00 06/01/2016 178,500.00 178,500.00 12/01/2016 35,000 3.000% 178,500.00 213,500.00 392,000.00 06/01/2017 177,975.00 177,975.00 12/01/2017 40,000 3.000% 177,975.00 217,975.00 395,950.00 06/01/2018 177,375.00 177,375.00 12/01/2018 70,000 3.000% 177,375.00 247,375.00 424,750.00 06/01/2019 176,325.00 176,325.00 12/01/2019 225,000 3.000% 176,325.00 401,325.00 577,650.00 06/01/2020 172,950.00 172,950.00 12/01/2020 280,000 3.000% 172,950.00 452,950.00 625,900.00 06/01/2021 168,750.00 168,750.00 12/01/2021 300,000 3.000% 168,750.00 468,750.00 637,500.00 06/01/2022 164,250.00 164,250.00 12/01/2022 310,000 3.000% 164,250.00 474,250.00 638,500.00 06/01/2023 159,600.00 159,600.00 12/01/2023 1,475,000 4.000% 159,600.00 1,634,600.00 1,794,200.00 06/01/2024 130,100.00 130,100.00 12/01/2024 1,530,000 4.000% 130,100.00 1,660,100.00 1,790,200.00 06/01/2025 99,500.00 99,500.00 12/01/2025 1,595,000 4.000% 99,500.00 1,694,500.00 1,794,000.00 06/01/2026 67,600.00 67,600.00 12/01/2026 1,660,000 4.000% 67,600.00 1,727,600.00 1,795,200.00 06/01/2027 34,400.00 34,400.00 12/01/2027 1,720,000 4.000% 34,400.00 1,754,400.00 1,788,800.00 9,350,000 4,483,963.33 13,833,963.33 13,833,963.33 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 37 of 221 Aug 22, 2012 11:29 am Prepared by Seattle-Northwest Securities Corp. - JMW (Finance 7.001 RE...:RENTON-R04WS_BQ,R04WS_BQ) Page 6 BOND SUMMARY STATISTICS City of Renton Proposed Refunding of 2004 WS Bonds (BQ) Assumes current AA+ interest rates plus 50 basis points Dated Date 12/07/2012 Delivery Date 12/07/2012 Last Maturity 12/01/2027 Arbitrage Yield 3.041757% True Interest Cost (TIC) 3.274522% Net Interest Cost (NIC) 3.398384% All-In TIC 3.341817% Average Coupon 3.906090% Average Life (years) 12.277 Par Amount 9,350,000.00 Bond Proceeds 9,998,266.70 Total Interest 4,483,963.33 Net Interest 3,901,146.63 Total Debt Service 13,833,963.33 Maximum Annual Debt Service 1,795,200.00 Average Annual Debt Service 923,290.10 Underwriter's Fees (per $1000) Average Takedown Other Fee 7.000000 Total Underwriter's Discount 7.000000 Bid Price 106.233334 Par Average Average Bond Component Value Price Coupon Life Serial Bonds (BQ) 9,350,000.00 106.933 3.906% 12.277 9,350,000.00 12.277 All-In Arbitrage TIC TIC Yield Par Value 9,350,000.00 9,350,000.00 9,350,000.00 + Accrued Interest + Premium (Discount) 648,266.70 648,266.70 648,266.70 - Underwriter's Discount -65,450.00 -65,450.00 - Cost of Issuance Expense -65,000.00 - Other Amounts Target Value 9,932,816.70 9,867,816.70 9,998,266.70 Target Date 12/07/2012 12/07/2012 12/07/2012 Yield 3.274522% 3.341817% 3.041757% 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 38 of 221 Aug 22, 2012 11:29 am Prepared by Seattle-Northwest Securities Corp. - JMW (Finance 7.001 RE...:RENTON-R04WS_BQ,R04WS_BQ) Page 7 PROOF OF ARBITRAGE YIELD City of Renton Proposed Refunding of 2004 WS Bonds (BQ) Assumes current AA+ interest rates plus 50 basis points Present Value to 12/07/2012 Date Debt Service @ 3.0417573% 06/01/2013 173,613.33 171,098.50 12/01/2013 219,600.00 213,176.89 06/01/2014 179,200.00 171,352.49 12/01/2014 214,200.00 201,751.38 06/01/2015 178,850.00 165,932.18 12/01/2015 213,850.00 195,431.95 06/01/2016 178,500.00 160,682.71 12/01/2016 213,500.00 189,309.95 06/01/2017 177,975.00 155,445.88 12/01/2017 217,975.00 187,530.33 06/01/2018 177,375.00 150,314.85 12/01/2018 247,375.00 206,495.17 06/01/2019 176,325.00 144,981.51 12/01/2019 401,325.00 325,042.07 06/01/2020 172,950.00 137,977.59 12/01/2020 452,950.00 355,944.99 06/01/2021 168,750.00 130,623.42 12/01/2021 468,750.00 357,407.10 06/01/2022 164,250.00 123,359.30 12/01/2022 8,454,250.00 6,254,408.45 12,851,563.33 9,998,266.70 Proceeds Summary Delivery date 12/07/2012 Par Value 9,350,000.00 Premium (Discount) 648,266.70 Target for yield calculation 9,998,266.70 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 39 of 221 Aug 22, 2012 11:29 am Prepared by Seattle-Northwest Securities Corp. - JMW (Finance 7.001 RE...:RENTON-R04WS_BQ,R04WS_BQ) Page 8 PROOF OF ARBITRAGE YIELD City of Renton Proposed Refunding of 2004 WS Bonds (BQ) Assumes current AA+ interest rates plus 50 basis points Assumed Call/Computation Dates for Premium Bonds Net Present Value (NPV) Bond Maturity Call Call to 12/07/2012 Component Date Rate Yield Date Price @ 3.0417573% SERIALBQ 12/01/2023 4.000% 2.910% 12/01/2022 100.000 -17,497.73 SERIALBQ 12/01/2024 4.000% 2.990%12/01/2022 100.000 -7,088.29 SERIALBQ 12/01/2025 4.000% 3.100% 12/01/2022 100.000 8,321.32 SERIALBQ 12/01/2026 4.000% 3.220%12/01/2022 100.000 26,306.24 SERIALBQ 12/01/2027 4.000% 3.290%12/01/2022 100.000 37,817.86 Rejected Call/Computation Dates for Premium Bonds Net Present Value (NPV) Bond Maturity Call Call to 12/07/2012 Increase Component Date Rate Yield Date Price @ 3.0417573% to NPV SERIALBQ 12/01/2023 4.000% 2.910% -7,275.21 10,222.52 SERIALBQ 12/01/2024 4.000% 2.990% 13,803.78 20,892.07 SERIALBQ 12/01/2025 4.000% 3.100% 40,507.48 32,186.16 SERIALBQ 12/01/2026 4.000% 3.220% 70,312.58 44,006.34 SERIALBQ 12/01/2027 4.000% 3.290% 93,979.36 56,161.50 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 40 of 221 Aug 22, 2012 11:29 am Prepared by Seattle-Northwest Securities Corp. - JMW (Finance 7.001 RE...:RENTON-R04WS_BQ,R04WS_BQ) Page 9 PRIOR BOND DEBT SERVICE City of Renton Proposed Refunding of 2004 WS Bonds (BQ) Assumes current AA+ interest rates plus 50 basis points 2004 Water & Sewer Revenue Bonds (11/1/04) (04WS) Annual Period Debt Debt Ending Principal Coupon Interest Service Service 06/01/2013 225,375 225,375 12/01/2013 225,375 225,375 450,750 06/01/2014 225,375 225,375 12/01/2014 225,375 225,375 450,750 06/01/2015 225,375 225,375 12/01/2015 225,375 225,375 450,750 06/01/2016 225,375 225,375 12/01/2016 225,375 225,375 450,750 06/01/2017 225,375 225,375 12/01/2017 225,375 225,375 450,750 06/01/2018 225,375 225,375 12/01/2018 30,000 5.000% 225,375 255,375 480,750 06/01/2019 224,625 224,625 12/01/2019 185,000 5.000% 224,625 409,625 634,250 06/01/2020 220,000 220,000 12/01/2020 245,000 5.000% 220,000 465,000 685,000 06/01/2021 213,875 213,875 12/01/2021 265,000 5.000% 213,875 478,875 692,750 06/01/2022 207,250 207,250 12/01/2022 280,000 5.000% 207,250 487,250 694,500 06/01/2023 200,250 200,250 12/01/2023 1,450,000 5.000% 200,250 1,650,250 1,850,500 06/01/2024 164,000 164,000 12/01/2024 1,520,000 5.000% 164,000 1,684,000 1,848,000 06/01/2025 126,000 126,000 12/01/2025 1,600,000 5.000% 126,000 1,726,000 1,852,000 06/01/2026 86,000 86,000 12/01/2026 1,680,000 5.000% 86,000 1,766,000 1,852,000 06/01/2027 44,000 44,000 12/01/2027 1,760,000 5.000% 44,000 1,804,000 1,848,000 9,015,000 5,676,500 14,691,500 14,691,500 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 41 of 221 Aug 22, 2012 11:29 am Prepared by Seattle-Northwest Securities Corp. - JMW(Finance 7.001 RE...:RENTON-R04WS_BQ,R04WS_BQ) Page 10 ESCROW REQUIREMENTS City of Renton Proposed Refunding of 2004 WS Bonds (BQ) Assumes current AA+ interest rates plus 50 basis points Period Principal Ending Interest Redeemed Total 06/01/2013 225,375.00 225,375.00 12/01/2013 225,375.00 225,375.00 06/01/2014 225,375.00 225,375.00 12/01/2014 225,375.00 9,015,000.00 9,240,375.00 901,500.00 9,015,000.00 9,916,500.00 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 42 of 221 Aug 22, 2012 11:29 am Prepared by Seattle-Northwest Securities Corp. - JMW(Finance 7.001 RE...:RENTON-R04WS_BQ,R04WS_BQ) Page 11 SUMMARY OF BONDS REFUNDED City of Renton Proposed Refunding of 2004 WS Bonds (BQ) Assumes current AA+ interest rates plus 50 basis points Maturity Interest Par Call Call Bond Date Rate Amount Date Price 2004 Water & Sewer Revenue Bonds (11/1/04), 04WS: TERM2024 12/01/2018 5.000% 30,000.00 12/01/2014 100.000 12/01/2019 5.000% 185,000.00 12/01/2014 100.000 12/01/2020 5.000% 245,000.00 12/01/2014 100.000 12/01/2021 5.000% 265,000.00 12/01/2014 100.000 12/01/2022 5.000% 280,000.00 12/01/2014 100.000 12/01/2023 5.000% 1,450,000.00 12/01/2014 100.000 12/01/2024 5.000% 1,520,000.00 12/01/2014 100.000 SERIALS 12/01/2025 5.000% 1,600,000.00 12/01/2014 100.000 12/01/2026 5.000% 1,680,000.00 12/01/2014 100.000 12/01/2027 5.000% 1,760,000.00 12/01/2014 100.000 9,015,000.00 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 43 of 221 Aug 22, 2012 11:29 am Prepared by Seattle-Northwest Securities Corp. - JMW(Finance 7.001 RE...:RENTON-R04WS_BQ,R04WS_BQ) Page 12 ESCROW DESCRIPTIONS City of Renton Proposed Refunding of 2004 WS Bonds (BQ) Assumes current AA+ interest rates plus 50 basis points Type of Type of Maturity First Int Par Max Security SLGS Date Pmt Date Amount Rate Rate Dec 7, 2012: SLGS Certificate 06/01/2013 06/01/2013 213,434 0.120% 0.120% SLGS Certificate 12/01/2013 12/01/2013 212,798 0.170% 0.170% SLGS Note 06/01/2014 06/01/2013 213,154 0.210% 0.210% SLGS Note 12/01/2014 06/01/2013 9,228,378 0.260% 0.260% 9,867,764 SLGS Summary SLGS Rates File 22AUG12 Total Certificates of Indebtedness 426,232.00 Total Notes 9,441,532.00 Total original SLGS 9,867,764.00 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 44 of 221 Aug 22, 2012 11:29 am Prepared by Seattle-Northwest Securities Corp. - JMW(Finance 7.001 RE...:RENTON-R04WS_BQ,R04WS_BQ) Page 13 ESCROW STATISTICS City of Renton Proposed Refunding of 2004 WS Bonds (BQ) Assumes current AA+ interest rates plus 50 basis points Modified Yield to Yield to Perfect Value of Total Duration Receipt Disbursement Escrow Negative Cost of Escrow Cost (years) Date Date Cost Arbitrage Dead Time Global Proceeds Escrow: 9,867,765.58 1.912 0.257427% 0.257427% 9,359,753.48 508,012.02 0.08 9,867,765.58 9,359,753.48 508,012.02 0.08 Delivery date 12/07/2012 Arbitrage yield 3.041757% 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 45 of 221 CITY OF RENTON, WASHINGTON WATER AND SEWER REVENUE REFUNDING BONDS, 2012 ORDINANCE NO. ______ 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 $[_____________] FOR THE PURPOSE OF REFUNDING CERTAIN OUTSTANDING WATER AND SEWER REVENUE REFUNDING BONDS OF THE CITY; PROVIDING THE FORM, TERMS AND COVENANTS OF THE BONDS; AUTHORIZING THE APPOINTMENT OF AN ESCROW AGENT AND EXECUTION OF AN ESCROW AGREEMENT; AND DELEGATING CERTAIN AUTHORITY TO APPROVE THE FINAL TERMS OF THE BONDS. PASSED: October ____, 2012 PREPARED BY: PACIFICA LAW GROUP LLP Seattle, Washington 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 46 of 221 - i - ORDINANCE NO. ________ TABLE OF CONTENTS* Section 1. Definitions 5 Section 2. Findings Regarding Parity Provisions 15 Section 3. Authorization and Description of Bonds 15 Section 4. Registration of Bonds and Book-Entry System 16 Section 5. Redemption; Purchase of Bonds 21 Section 6. Priority and Payment from the Waterworks Utility Fund 25 Section 7. Funds and Accounts 26 Section 8. Covenants 29 Section 9. Tax Covenants 32 Section 10. Future Parity Bonds 35 Section 11. Form of Bonds 38 Section 12. Execution of Bonds 40 Section 13. Lost, Stolen or Destroyed Bonds 41 Section 14. Sale of Bonds 41 Section 15. Application of Bond Proceeds; Plan of Refunding 44 Section 16. Bond Insurance 46 Section 17. Undertaking to Provide Continuing Disclosure 46 Section 18. Defeasance of the Bonds 50 Section 19. Amendments 51 Section 20. Contract; Savings Clause 53 Section 21. General Authorization, Ratification of Prior Acts 54 Section 22. Effective Date of Ordinance 54 54 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 47 of 221 CITY OF RENTON, WASHINGTON ORDINANCE NO. _______ 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 $[_____________] FOR THE PURPOSE OF REFUNDING CERTAIN OUTSTANDING WATER AND SEWER REVENUE REFUNDING BONDS OF THE CITY; PROVIDING THE FORM, TERMS AND COVENANTS OF THE BONDS; AUTHORIZING THE APPOINTMENT OF AN ESCROW AGENT AND EXECUTION OF AN ESCROW AGREEMENT; AND DELEGATING CERTAIN AUTHORITY TO APPROVE THE FINAL TERMS OF THE BONDS. 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: [to be confirmed] Series Authorizing Ordinance Original Principal Amount Outstanding Principal Amount 2002 4976 $ 11,980,000 $ 2003 5019 8,035,000 2004 5098 10,335,000 2007 5313 9,750,000 2008A 5313 9,975,000 2008B 5313 2,035,000 (collectively, the “Outstanding Parity Bonds”); and 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 48 of 221 - 2 - WHEREAS, the Outstanding Parity Bonds issued under date of November 1, 2004mature in principal amounts and bear interest as follows: Maturity Date (December 1) Principal Amount Interest 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 of the Outstanding Parity Bonds permit the issuance of additional bonds on a parity with the Outstanding Parity Bonds for refunding purposes if certain conditions are met; and WHEREAS, the 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; 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 49 of 221 - 3 - 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. 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. 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 50 of 221 - 4 - 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) of the 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. Bonds mean the City’s Water and Sewer Revenue Refunding Bonds, 2012, authorized to be issued by this ordinance. Call Date 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. 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 51 of 221 - 5 - 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. [question for the finance team – should we rename this the “Rate Covenant”] 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. 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 of the State of Delaware, its successors and their assigns, and, if such organization shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, Fitch shall be deemed to refer to 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 52 of 221 - 6 - 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 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 53 of 221 - 7 - City in causing the Waterworks Utility to be operated and maintained in good repair, working order and condition, including payments made to any other municipal corporation or private entity for water service and for sewage treatment and disposal service or other utility service in the event the City combines such service in the Waterworks Utility and enters into a contract for such service, and including pro-rata budget charges for the City’s administration expenses where those represent a reasonable distribution and share of actual costs, but not including any depreciation or taxes levied or imposed by the City or payments to the City in lieu of taxes, or capital additions or capital replacements to the Waterworks Utility. Maximum Annual Debt Service means, at the time of calculation, the maximum amount of Annual Debt Service that will mature or come due in the current calendar year or any future calendar year on the Parity Bonds. Moody’s means Moody’s Investors Service, its successors and their assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, Moody’s shall be deemed to refer to any other nationally recognized securities rating agency designated by the City. 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. 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 54 of 221 - 8 - Outstanding means, as of any particular time, all Parity Bonds issued theretofore except (a) Parity Bonds theretofore canceled by the Bond Registrar after purchase by the City in the open market or because of payment at, or redemption prior to, maturity; (b) Parity Bonds for which funds have been deposited into a trust account pursuant to the ordinances authorizing the issuance of the Parity Bonds, but only to the extent that the principal of and interest on such Parity Bonds are payable from such trust account; (c) temporary, mutilated, lost, stolen or destroyed Parity Bonds for which new Parity Bonds have been issued pursuant to the ordinance authorizing their issuance; and (d) Parity Bonds exchanged for new Parity Bonds pursuant to the ordinances authorizing their issuance. Outstanding Parity Bond Ordinances mean the ordinances authorizing the issuance of the Outstanding Parity Bonds identified in the recitals to this ordinance. Outstanding Parity Bonds means the 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.] [does the City currently or does it prefer to have a combined Bond Fund for all 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 55 of 221 - 9 - 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. 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 of the 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 56 of 221 - 10- state of the United States (or by a service corporation acting on behalf of one or more such insurance companies) which insurance company or companies, as of the time of issuance of such policy or surety bond, are currently rated in the highest rating category by any Rating Agency. 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 highest rating category by any Rating Agency. 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 57 of 221 - 11- Service. From and after the New Covenant Date, the term Reserve Requirement means with respect to any issue of Parity Bonds, the lesser of (a) Maximum Annual Debt Service on all Outstanding Parity Bonds, and (b) 125% of average Annual Debt Service on all Outstanding Parity Bonds; provided, that the amount required to be deposited hereunder with respect to any Future Parity Bonds in order to meet the Reserve Requirement shall not exceed 10% of the net proceeds of such Future Parity Bonds under the Code. Rule means the SEC’s Rule 15c2-12 under the Securities Exchange Act of 1934, as the same may be amended from time to time. S&P means 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. 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 58 of 221 - 12- 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 convenience of reference and shall not constitute a part of this ordinance, nor shall they affect 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 59 of 221 - 13- 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 for the 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 of the 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 $[____________] for the purpose of providing the funds necessary to refund the Refunded Bonds and pay all or a portion of the costs incidental to the foregoing and to the issuance of the Bonds. The Bonds shall be designated the “City of Renton, Washington Water and Sewer 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 60 of 221 - 14- 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 of the Bond Fund and the Reserve Fund and shall not be general obligations of the 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 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 61 of 221 - 15- 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 of the Bond Registrar’s powers and duties under this ordinance. The Bond Registrar shall be responsible for its representations contained in the Certificate of Authentication of the Bonds. (b)Registered Ownership. The City and the Bond Registrar, each in its discretion, may deem and treat the Registered Owner of each Bond as the absolute owner thereof for all purposes (except as 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 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 62 of 221 - 16- 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 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 63 of 221 - 17- 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 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 64 of 221 - 18- 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 for the same aggregate principal amount in any authorized denomination, naming as Registered Owner the person or persons listed as the assignee on the assignment form appearing on the surrendered Bond, in exchange for such surrendered and cancelled Bond. Any Bond may be surrendered to the Bond Registrar and exchanged, without charge, for an equal aggregate principal amount of Bonds of the same date, 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 officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the right of the Registered Owners 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 of the 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 65 of 221 - 19- 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. 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 66 of 221 - 20- 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 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 67 of 221 - 21- 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, (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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 68 of 221 - 22- redemption date, become due and payable at the redemption price therein specified, and from and after such date such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Bond Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. All Bonds which have been redeemed shall be canceled by the Bond Registrar and shall not be reissued. (3)Additional Notice. In addition to the foregoing notice, further notice shall be given by the City as set out below, but no defect in said further notice nor any failure to give 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 69 of 221 - 23- recommendations regarding notices of redemption of municipal securities. 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; (v)To make all payments required to be made into the Reserve Fund, including any reimbursements required for Qualified Insurance or Qualified Letter of 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 70 of 221 - 24- Credit; (vi)To make all payments required to be made into any revenue bond redemption fund or warrant redemption fund and debt service account or reserve account created to pay and secure the payment of the principal of and interest on any revenue bonds or revenue warrants of the City having a lien upon Gross Revenue junior and inferior to the lien thereon for the payment of the principal of and interest on the Parity Bonds; and (vii)To retire by optional redemption or purchase any outstanding revenue bonds or revenue warrants of the City, to make necessary additions, betterments, improvements and repairs to or extensions and replacements of the Waterworks Utility, to make deposits into the Rate Stabilization Fund, or for any other lawful City purpose. (c)Rate Stabilization Fund. The City has previously created a Waterworks Rate Stabilization Fund (the “Rate Stabilization Fund”). The City may, at any time, as determined by the City and as consistent with subsection (b) of this section, deposit Gross Revenue into the Rate Stabilization Fund, excluding principal proceeds of Parity Bonds or other borrowing. The City may withdraw any or all of the money from the Rate Stabilization Fund for inclusion in Gross Revenue for any fiscal year of the City. Such deposits or withdrawals may be made up to and including the date 90 days after the end of the fiscal year for which the deposit or withdrawal will be included in Gross Revenue. No deposit of Gross Revenue will be made into 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 71 of 221 - 25- Revenue Bond Fund, 2012 (the “Bond Fund”), which shall be a “Parity Bond Fund” and a subaccount of the Waterworks Utility Fund.] [does the City currently or does it prefer to have a combined bond fund for the purpose of paying debt service on all water and sewer bonds?] 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 of the 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 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 72 of 221 - 26- 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 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 73 of 221 - 27- 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 for the Maintenance and Operation Expense and has not obligated the City to set aside and pay into such Fund a greater amount of such Gross 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: (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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 74 of 221 - 28- (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: (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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 75 of 221 - 29- (3)An amount which will be in the same proportion to the net amount of any Parity Bonds then outstanding (as defined above) that the depreciated cost value of the facilities sold or disposed of bears to the depreciated cost value of the entire Waterworks Utility immediately prior to such sale or disposition. Notwithstanding any other provision of this subsection, (1) the City in its discretion may sell or otherwise dispose of any of the works, plant, properties or facilities of the Waterworks Utility or any real or personal property comprising a part of the same which shall have become unserviceable, inadequate, obsolete or unfit to be used in the operation of the Waterworks Utility, or no longer necessary, material to or useful to the operation of the Waterworks Utility, without making any deposit into the Bond Fund, and (2) the City may transfer the Waterworks Utility to another municipal corporation so long as Net Revenue of the portion of the Waterworks Utility so transferred is used for payment of debt service on the Parity Bonds prior to any other purpose. In no event shall such proceeds be treated as Gross Revenue for purposes of this ordinance. (d)Books and Records. It will keep proper books, records and accounts with respect to the operations, income and expenditures of the Waterworks Utility in accordance with proper accounting procedures and any applicable rules and regulations prescribed by the State. It will prepare annual financial and operating statements within 270 days of the close of each fiscal year showing in reasonable detail the financial condition of the Waterworks Utility as of the close of the previous year, and the income and expenses for such year, including the amounts paid into the Bond Fund and Reserve Fund and into any and all special funds or accounts created pursuant to this ordinance, the status of all funds and accounts as of the end of such year, and the amounts expended for maintenance, renewals, replacements and capital 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 76 of 221 - 30- 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 insurers and with policies payable to or on behalf of the City and any additional insureds on such of the buildings, equipment, works, plants, facilities and properties of the Waterworks Utility, and against such claims for damages, as are ordinarily carried by municipal or privately owned utilities engaged in the operation of like systems, or will implement and maintain a self-insurance or an insurance pool program with reserves adequate, in the reasonable judgment of the City, to protect the Waterworks Utility and the Registered Owners of the Parity Bonds against loss. (g)Maintenance and Operation Expense. It will pay all Maintenance and Operation Expense and the debt service requirements for the outstanding Parity Bonds, and otherwise meet the obligations of the City as herein set forth. Section 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 77 of 221 - 31- 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 of the Code. 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. 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 78 of 221 - 32- 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 (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 of the interest on the Bonds. To that end, the provisions of this section may be modified or eliminated without any 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 79 of 221 - 33- 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. 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 80 of 221 - 34- Parity Bond Fund for any Term Bonds to be issued and for regular payments to be made for the payment of the principal of such Term Bonds on or before their maturity, or, as an alternative, the mandatory redemption of those Term Bonds prior to their maturity date from money in the applicable Parity Bond Fund. (e)There shall be on file with the City either: (1)a certificate of the Finance Director demonstrating that Net Revenue for the Base Period, without regard to deposits into or withdrawals from the Rate Stabilization Fund, is equal to at least the Parity Requirement; or (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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 81 of 221 - 35- Utility who have paid the required connection charges; (D)The Professional Utility Consultant’s estimate of the Net Revenue to be derived from customers anticipated to connect for whom building permits have been issued; (E)Income received or to be received which is derived from any person, firm corporation or municipal corporation under any executed contract for water, sewage disposal or other utility service, which revenue was not included in the historical Net Revenue; (F)The Professional Utility Consultant’s estimate of the Net Revenue to be derived from customers with existing homes or buildings which will be required to connect to any additions to and improvements and extensions of the Waterworks Utility constructed and to be paid for out of the proceeds of the sale of the additional Future Parity Bonds or other additions to and improvements and extensions of the Waterworks Utility when such additions, improvements and extensions are not completed; and (G)Any increases or decrease in Net Revenue as a result of any actual or reasonably anticipated changes in Maintenance and Operation Expense subsequent to the 12-month period. (f)Refunding Obligations. If Future Parity Bonds proposed to be so issued are for the sole purpose of refunding outstanding bonds payable from any Parity Bond Fund, such certification of coverage shall not be required if the amount required for the payment of the principal and interest in each year for the refunding bonds is not increased more than $5,000 over the amount for that same year required for the bonds or the portion of that bond issue to be refunded thereby and if the maturities of such refunding bonds are not extended beyond the 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 82 of 221 - 36- 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 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 83 of 221 - 37- (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 of the 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) of the 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 of the 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 of the revenue of the Waterworks Utility into the Bond Fund shall be a lien and charge thereon equal in rank to the lien and charge upon said revenue of the amounts required to pay and secure the payment of the Outstanding Parity Bonds and any revenue bonds of the City hereafter issued on a parity with the 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 of the State of Washington and duly adopted ordinances of the City. The City hereby covenants and agrees with the owner of this bond that it will keep and perform all the covenants of this bond and of the Bond Ordinance to be by it kept and performed, and reference is hereby made to the Bond Ordinance for a complete statement of such covenants. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall have been manually signed by the Bond Registrar. 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 84 of 221 - 38- 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 /s/ facsimile or manual Mayor ATTEST: /s/ 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 of the 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 Section 12. Execution of Bonds. The Bonds shall be executed on behalf of the City by the facsimile or manual signatures of the Mayor and the City Clerk and shall have the seal of the 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 85 of 221 - 39- 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 of the 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 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 86 of 221 - 40- 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 of the 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 [$___________], (ii) the final maturity date for the Bonds is no later than [December 1, ____], (iii) the Bonds are sold (in the aggregate) at a price not less than [__%] and not greater than [___%], (iv) the Bonds are sold for a price that results in a minimum net present value debt service savings over the Refunded Bonds of [____%], and (v) the true interest cost for the Bonds (in the aggregate) does not exceed [____%]. 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 87 of 221 - 41- 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. (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 of the 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 88 of 221 - 42- 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 of the Bonds. 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 of the Refunded Bonds on the Call Date. Such Acquired Obligations shall be purchased at a yield not greater than the yield permitted by the Code and regulations relating to acquired obligations in connection with refunding bond issues. 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 89 of 221 - 43- (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 of the Acquired Obligations and expenses of the issuance of the 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. (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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 90 of 221 - 44- 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. 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) of the Rule. 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 91 of 221 - 45- (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: (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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 92 of 221 - 46- 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 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; 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 93 of 221 - 47- ·Rating changes; ·Bankruptcy, insolvency, receivership or similar event of the City; ·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 of the Rule that requires that provision is invalid, has been repealed retroactively or 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 94 of 221 - 48- 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. 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 95 of 221 - 49- 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. (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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 96 of 221 - 50- 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 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 97 of 221 - 51- 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 who is the “Registered Owner” of the 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. 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 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 98 of 221 - 52- performed on the part of the City shall be declared by any court of competent jurisdiction and after final appeal (if any appeal be taken) to be contrary to law, then such covenant or covenants, agreement or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements in this ordinance and shall in no way affect the validity of the other provisions of this ordinance or of the Bonds. Section 21.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 22. 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 _____ day of October, 2012. Bonnie I. Walton, City Clerk APPROVED BY THE MAYOR this ____ day of October, 2012. Denis Law, Mayor Approved as to form: Pacifica Law Group LLP Bond Counsel 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 99 of 221 - 53- Date of Publication: ___________________ 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 100 of 221 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 of the City; and the Ordinance will be in full force and effect after publication in the City’s official newspaper as provided by law; and 2.A quorum of the members of the City Council was present throughout the meeting and a majority of those members present voted in the proper manner for the passage of the Ordinance. IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of October, 2012. 7d. ‐ Administrative Services Department requests approval of an  ordinance authorizing the issuance of revenue bonds in the amount of Page 101 of 221 CITY OF RENTON COUNCIL AGENDA BILL Subject/Title: MOU Washington Traffic Safety Commission Meeting: Regular Council - 01 Oct 2012 Exhibits: MOU Washington Traffic Safety Commission Submitting Data: Dept/Div/Board: Police Staff Contact: Clark Wilcox, Police Commander, x7597 Recommended Action: Council Concur Fiscal Impact: Expenditure Required: $ $16,320 Transfer Amendment: $ Amount Budgeted: $ Revenue Generated: $$16,320 Total Project Budget: $ City Share Total Project: $ SUMMARY OF ACTION: A memorandum of understanding with the Washington Traffic Safety Commission is requested to provide funding for law enforcement agencies to participate in the Target Zero Teams Project. The goal is to reduce the number of people killed or seriously injured by impaired drivers in King County through aggressive, multi-jurisdictional, high-visibility patrols using an integrated systems approach to traffic safety which is evidenced-based and targets the locations where the most safety benefit can be realized. STAFF RECOMMENDATION: Approve an MOU with the Washington Traffic Safety Commission and authorize the Mayor and City Clerk to sign. 7e. ‐ Police Department requests approval of a memorandum of  understanding to accept $16,320 in grant funds from the Washington Page 102 of 221 7e. ‐ Police Department requests approval of a memorandum of  understanding to accept $16,320 in grant funds from the Washington Page 103 of 221 7e. ‐ Police Department requests approval of a memorandum of  understanding to accept $16,320 in grant funds from the Washington Page 104 of 221 7e. ‐ Police Department requests approval of a memorandum of  understanding to accept $16,320 in grant funds from the Washington Page 105 of 221 7e. ‐ Police Department requests approval of a memorandum of  understanding to accept $16,320 in grant funds from the Washington Page 106 of 221 CITY OF RENTON COUNCIL AGENDA BILL Subject/Title: 2013 and 2014 Utility Revenue Requirements, CIP, and Rates Meeting: Regular Council - 01 Oct 2012 Exhibits: Issue Paper Submitting Data: Dept/Div/Board: Public Works Staff Contact: Lys Hornsby, Utility Systems Director, x7239 Recommended Action: Refer to Utilities Committee Fiscal Impact: Expenditure Required: $ Transfer Amendment: $ Amount Budgeted: $ Revenue Generated: $Rates: Water $769,751 (2013), $772,830 (2014) Total Project Budget: $ City Share Total Project: $ SUMMARY OF ACTION: Using the utility rate model, staff determined the utility revenue requirements for 2013 and 2014. The primary factors that are driving the need for a revenue increase include meeting the financial policies – covering debt, system reinvestment, reserves and rate stabilization, and maintaining sustainable fund balances; and covering increases by external agencies such as King County. The recommended revenue increases for 2013 and 2014 are 5% for water, wastewater, surface water, and solid waste, and to keep the King County rate stabilization charge at $1.16 per wastewater account for both 2013 and 2014. In addition, the Utilities are proposing increases of 0.8% to the utility tax for water, surface water, and solid waste to bolster the general fund. STAFF RECOMMENDATION: Approve the proposed rate increases as outlined and direct staff to prepare the related ordinances for first reading. 7f. ‐ Utility Systems Division submits proposed increases to water,  wastewater, surface water, and solid waste utility rates for 2013 and  Page 107 of 221 PUBLIC WORKS DEPARTMENT M E M O R A N D U M DATE:September 20, 2012 TO:Rich Zwicker, Council President Members of Renton City Council VIA:Denis Law, Mayor FROM:Gregg Zimmerman, Administrator STAFF CONTACT:Lys Hornsby, Utility Systems Director, x7239 SUBJECT:2013 and 2014 Utility Revenue Requirements, CIP, and Rates ISSUE: Should Council approve the proposed 2013 and 2014 utility revenue increases and increases to the utility tax? RECOMMENDATION: ·Approve the proposed 2013 and 2014 revenue increases of 5% each year for water, wastewater, surface water, and solid waste. ·Approve the proposed increase of 0.8% to the utility tax for water, surface water, and solid waste for 2013 and 2014. ·Maintain the current $1.16 King County rate stabilization charge per wastewater account for both 2013 and 2014. ·Direct staff to prepare the ordinances allowing the City to charge the 2013 utility rates beginning January 1, 2013, and to charge the 2014 utility rates beginning January 1, 2014. BACKGROUND SUMMARY: Over the past 15 years, City utilities have placed a high priority on accommodating growth and economic development, while keeping rates low. This was in accordance with the City’s Six-Year Business Plan. This approach has resulted in significant benefits to the City. Utility funded capital improvement projects have increased system capacity and will accommodate growth and development into the future. Now we have turned our attention to reinvesting in our infrastructure. In 2010, Council adopted financial criteria to stabilize the utility funds and directed that the criteria be implemented over a five-year period starting in 2011. The financial criteria include: ·Fund Balance, Operating Reserves, and Rate Stabilization: o Water, Wastewater and Surface Water Funds: 12% of annual operating expenses or 30 to 45 days 7f. ‐ Utility Systems Division submits proposed increases to water,  wastewater, surface water, and solid waste utility rates for 2013 and  Page 108 of 221 Mr. Rich Zwicker, Council President Page 2 of 6 September 20, 2012 \\RVFPS-02\Depts\PW\File Sys\USA - Utility Systems Division Administration\USA-03 - CORRESPONDENCE\USA-03 - 0001 Utility Director's Correspondence\2013 and 2014 Budget\2013 2014 rates issue paper.doc\LLHtp o Solid Waste: $400,000 o King County Wastewater Treatment: $380,000 ·Capital Contingency as System Reinvestment and Debt Service: o Surface Water: 1.25 debt service coverage (DSC) and approximately $3 million annual system reinvestment o Wastewater: 1.25 DSC and approximately $3 million annual system reinvestment o Water: 1.25 DSC and approximately $4 million annual system reinvestment Bonds versus Cash Funded Projects ·All non-CIP projects should be paid for using rates (programs, system plans, education materials, etc.). ·All system reinvestment, maintenance, replacement and rehabilitation CIPs should be paid for using rates. ·CIPs for new infrastructure, growth, or increased capacity can be paid for using bonds. Budget Considerations Capital Improvement Program (CIP) The emphasis in the utility capital improvement program for 2013 and 2014 is on system reinvestment including maintenance, rehabilitation and replacement; meeting regulations; and keeping up with program work that makes our work easier and more efficient. The Water CIP consists of transmission and distribution main improvements (Rainier), infrastructure improvements (automated meter reading), disinfection improvements, increased reservoir capacity (Highlands reservoir site), and telemetry and emergency power improvements. Program work includes water conservation, update of the water system plan, update of the geographical information system (GIS), hydraulic modeling and water quality monitoring. The complete list of the Water CIP projects for 2013 and 2014 and their budgeted amounts (in thousands of dollars) are listed below: Water CIP Projects 2013 Budget 2014 Budget Highlands 435-Zone Reservoirs 800 1,600 Primary Disinfection Improvements 200 - Rainier Avenue South Utility Improvements 400 - Water Main Replacement 1,000 1,000 Transmission Main Replacement -500 Water Main Oversizing 100 100 Automatic Meter Reading Conversion 500 515 Reservoir Recoating 50 175 7f. ‐ Utility Systems Division submits proposed increases to water,  wastewater, surface water, and solid waste utility rates for 2013 and  Page 109 of 221 Mr. Rich Zwicker, Council President Page 3 of 6 September 20, 2012 \\RVFPS-02\Depts\PW\File Sys\USA - Utility Systems Division Administration\USA-03 - CORRESPONDENCE\USA-03 - 0001 Utility Director's Correspondence\2013 and 2014 Budget\2013 2014 rates issue paper.doc\LLHtp Telemetry Improvements 100 100 Emergency Power to Water Facilities 150 50 Maplewood Equipment Access & H2S Mitigation 50 - Maplewood Filter Media Replacement 50 50 Water Conservation Program 200 200 Water System Security 15 15 Aquifer Monitoring and Management 50 - Emergency Response Projects 50 50 Hydraulic Model of Water System 10 10 Water Quality Monitoring 15 15 Water System GIS 5 5 Total Project Costs 3,745 4,385 The Wastewater CIP consists of lift station improvements (Airport, Misty Cove, and Lind Ave), main replacement/rehabilitation (Royal Hills), and telemetry upgrades. Program work includes hydraulic modeling, implementing the operations master plan (TV truck) and update of GIS. The complete list of the Wastewater CIP projects for 2013 and 2014 and their budgeted amounts (in thousands of dollars) are listed below: Wastewater CIP Projects 2013 Budget 2014 Budget S 132nd St Sewer Extensions 225 - Miscellaneous/Emergency Projects 100 100 Sanitary Sewer Hydraulic Model 200 - Long Range Wastewater Management Plan - - Develop Access Road - Aberdeen Apt 50 100 Earlington Sewer Replacement - - Liberty Lift Station Installation Project 100 - Telemetry Upgrade 150 - Renton Hill Deep Manhole 100 - Lind Avenue Lift Station Replacement 600 - Wastewater Operation Master Plan 50 50 Airport Lift Station Rehabilitation 350 700 East Renton Lift Station Elimination 25 25 Misty Cove Lift Station Replacement 300 300 Thunder Hill Interceptor Replacement/Rehabilitation -300 Central Renton Interceptor Reline/Upsize -400 2013 Sanitary Sewer Main Replacement/Rehabilitation 1,000 - 2014 Sanitary Sewer Main Replacement/Rehabilitation -1,275 Total Project Costs 3,250 3,250 The Surface Water CIP consists of five grant projects (Sunset Terrace regional facility, Harrington green connection, Hardie and SW 7th, Rainier Ave retrofit, and NE 10th and Anacortes retrofit), infrastructure maintenance/replacement/rehabilitation (Monroe 7f. ‐ Utility Systems Division submits proposed increases to water,  wastewater, surface water, and solid waste utility rates for 2013 and  Page 110 of 221 Mr. Rich Zwicker, Council President Page 4 of 6 September 20, 2012 \\RVFPS-02\Depts\PW\File Sys\USA - Utility Systems Division Administration\USA-03 - CORRESPONDENCE\USA-03 - 0001 Utility Director's Correspondence\2013 and 2014 Budget\2013 2014 rates issue paper.doc\LLHtp Ave NE and N 2nd retrofit, pond fencing), and major maintenance (Cedar River dredging, wetland mitigation bank, sediment pond cleaning). Program work includes mosquito abatement, update of GIS, and flow and water quality monitoring. The complete list of the Surface Water CIP projects for 2013 and 2014 and their budgeted amounts (in thousands of dollars) are listed below: Surface Water CIP Projects 2013 Budget 2014 Budget Springbrook Creek Wetland & Habitat Mitigation Bank 150 150 NE 5th St and Edmonds Ave NE Storm Improvements 760 - Stormwater Facility Fencing Project 100 100 Monroe Ave NE & NE 2nd St Infiltration Improvements -100 Hardie Ave SW-SW 7th St Storm Improvement 119 4,981 NE 10th St & Anacortes Ave NE Detention Pond Retrofit 60 215 Small Drainage Projects Program 200 200 Miscellaneous/Emergency Storm Projects 50 50 Lower Cedar River Sediment Management Project 750 2,050 Maplewood Creek Sedimentation Facility Maintenance 100 - Madsen Creek Sedimentation Cleaning 50 50 Talbot Hill Area Mosquito Abatement Program 75 100 Stream Flow and Water Quality Monitoring Program 10 10 Sunset Terrace Regional Stormwater Facility 325 985 Surface Water Utility GIS 100 100 Harrington Green Connection 340 940 Total Project Costs 3,189 10,031 Rate Modeling Budget years 2013 and 2014 are years three and four of our five-year plan to stabilize the utility funds, levelize rates, reduce debt, and maintain our infrastructure. We expect to largely accomplish our goal of meeting the financial policies by the 2015/2016 budget cycle. The 2013 and 2014 budget was a cut budget for the utilities. We cut two positions in surface water and obtained grant money for five projects. We made a modest cut to some CIP and did not increase items for inflation. The five-year projected plan rates for 2013 and 2014 were 6% for water each year, 5% for wastewater each year and 12% for surface water each year (5% base plus 7% for the storm water pond maintenance program). We did not model projected rates for solid waste but there was a tipping fee increase during the 2011/2012 budget cycle and there will be another increase in 2013 (total increase from $95 to $125 per ton – equivalent to 2.5% rate increase). In addition, there will be a significant increase in the Local Hazardous Waste Management Program (equivalent to 0.5% rate increase). These are pass-through fees from King County. The Contractor CPI will also increase per our contract (equivalent to 2% rate increase). A 5% increase for solid waste is needed to cover these external increases. Projected Other Rate Impacts Proposed Rate 7f. ‐ Utility Systems Division submits proposed increases to water,  wastewater, surface water, and solid waste utility rates for 2013 and  Page 111 of 221 Mr. Rich Zwicker, Council President Page 5 of 6 September 20, 2012 \\RVFPS-02\Depts\PW\File Sys\USA - Utility Systems Division Administration\USA-03 - CORRESPONDENCE\USA-03 - 0001 Utility Director's Correspondence\2013 and 2014 Budget\2013 2014 rates issue paper.doc\LLHtp Five-year Rate Plan Increase 2013 / 2014 Water 6%0.8% utility tax increase 5% / 5% Wastewater 5%10.2% King County treatment 5% / 5% Surface Water 5%7% single-family residential pond maintenance, 0.8% utility tax increase 5% / 5% Solid Waste NA 32% increase King County tipping fee, Contractor CPI, 35% increase LHWMP, 0.8% utility tax increase 5% / 5% Using our rate model, budget cuts and considering other rate impacts, we determined the revenue needs for the four City utilities at 5% each year, which is considerably lower than the estimates in the five-year projected rate plan plus the approved programs. The 5% increase for each of the four utilities yields a total monthly increase in the average single-family monthly utility bill of $4.53 in 2013 and $4.77 in 2014. Increase Average Monthly Single-Family Bill Utility Projected Rate Plan % 2013 2014 2015 2015 Water % increase 6%$1.75 5% $1.85 5% $1.96 6% $2.07 6% Wastewater % increase 5%$1.25 5% $1.32 5% $1.38 5% $1.45 5% Surface Water % increase 12%$0.57 5% $0.60 5% $0.63 5% $0.66 5% Solid Waste % increase NA $0.96 5% $1.00 5% $1.05 5% $1.10 5% Total Proposed Increase/Mo $4.53 $4.77 $5.02 $5.28 Average Monthly Single-Family Bill with Proposed Increases Utility 2012 2013 2014 2015 2016 Water $35.18 $36.93 $38.78 $40.74 $42.81 Wastewater $25.08 $26.33 $27.65 $29.03 $30.48 Surface Water $11.51 $12.08 $12.68 $13.31 $13.97 Solid Waste $19.15 $20.11 $21.11 $21.16 $22.26 Total $90.92 $95.45 $100.22 $104.24 $109.52 The average single-family monthly utility bill is $95.45 for 2013 and $100.22 for 2014. 7f. ‐ Utility Systems Division submits proposed increases to water,  wastewater, surface water, and solid waste utility rates for 2013 and  Page 112 of 221 Mr. Rich Zwicker, Council President Page 6 of 6 September 20, 2012 \\RVFPS-02\Depts\PW\File Sys\USA - Utility Systems Division Administration\USA-03 - CORRESPONDENCE\USA-03 - 0001 Utility Director's Correspondence\2013 and 2014 Budget\2013 2014 rates issue paper.doc\LLHtp Comparing 2012 rates with surrounding jurisdictions, of the 13 jurisdictions surveyed, only three have lower composite utility rates than Renton. In order to help the General Fund with the deficits in 2013 and 2014, the Utility Funds were tasked with finding approximately $450,000 via utility tax. Using the rate model, cutting positions, using fund balance and modest CIP cuts, we determined that we could raise the utility tax by 0.8% on the Surface Water, Water, and Solid Waste utilities to generate this funding for the General Fund without adding to the proposed rate increase to the customers. The Wastewater Utility contribution to the utility tax will be from the King County rate increase. This would result in a utility tax in 2013 and 2014 of 6% for Wastewater, 6.8% for Surface Water, 6.8% for Solid Waste, and 8.3% for Water. We propose maintaining the Metro Rate Stabilization fee at $1.16 per wastewater account. CONCLUSION: Implementing the proposed 2013 and 2014 revenue increases will allow the utilities to balance debt with cash financing; invest in existing infrastructure to prevent deterioration, failure, and/or lapse in service; build adequate fund balance for sustainability; phase in meeting the financial policies; and meet regulatory compliance. cc: Iwen Wang, FIT Administrator JoAnn Wykpisz, PW Prin & Fin Admin Analyst 7f. ‐ Utility Systems Division submits proposed increases to water,  wastewater, surface water, and solid waste utility rates for 2013 and  Page 113 of 221 9a. ‐ Fire Protection, Parks, and Transportation Impact Fees Update (See  8.a.)Page 114 of 221 9a. ‐ Fire Protection, Parks, and Transportation Impact Fees Update (See  8.a.)Page 115 of 221 9a. ‐ Fire Protection, Parks, and Transportation Impact Fees Update (See  8.a.)Page 116 of 221 9a. ‐ Fire Protection, Parks, and Transportation Impact Fees Update (See  8.a.)Page 117 of 221 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