ORD 89-50 WATERWORKS UTILITYCITY OF WINSLOW, WASHINGTON
ORDINANCE NO. 89-50
AN ORDINANCE relating to the waterworks utility
of the City, including the system of sewerage as a
part thereof; providing for combining its storm and
surface water drainage system into the waterworks
utility of the City; specifying and adopting a
system or plan of additions to and betterments and
extensions of the waterworks utility of the City~
authorizing the issuance of $2,400,000 Water and
Sewer Revenue Bonds, 1989, of the City for the
purpose of paying the cost of carrying out that plan
of additions and betterments and capitalizing a
reserve for those bonds~ fixing the form, date,
interest rates, maturities, terms, covenants and uses
of the proceeds of those bonds; creating a special
bond redemption fund; and providing for the sale and
delivery of those bonds to Harper, McLean & Company
of Seattle, Washington.
WHEREAS, the City (formerly Town) of Winslow, Washington
(the "City") heretofore has issued its Water Revenue Bonds,
1962, pursuant to Ordinance No. 115, of which there are now
outstanding $15,000 of such bonds, its Water Revenue Bonds,
1967, pursuant to Ordinance No. 67-5, of which there are now
outstanding $51,000 of such bonds, and its Water Revenue Bonds,
1972, pursuant to Ordinance No. 72-12, of which there are now
outstanding $125,000 of such bonds, all such bonds having been
issued to pay the costs of constructing certain additions and
improvements to the water system of the City or to refund
obligations of such system; and
WHEREAS, the City heretofore has created by Ordinance
No. 22 a Water Revenue Fund into which it has pledged to pay
sufficient amounts to meet the debt service requirements on the
outstanding water revenue bonds of the City and the City by
Ordinance No. 24 has created a Sewer Revenue Fund into which it
has pledged to pay sufficient amounts to meet the debt service
requirements on the outstanding sewer revenue bonds of the City;
and
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WHEREAS, by Ordinance No. 74-2 the City created a Utilities
and Enterprise Fund, cancelled the Sewer Revenue Fund and Water
Revenue Fund and directed that all money budgeted to the Sewer
Revenue Fund and Water Revenue Fund for the fiscal year 1974 be
transferred to the Utilities and Enterprise Fund; and
WHEREAS, the City by Ordinance No. 80-14 combined the water
system and sanitary sewage disposal system of the City into a
waterworks utility (such combined systems being hereinafter
referred to as the Waterworks Utility)~ and
WHEREAS, the City pursuant to Ordinance No. 87-01
heretofore issued its Water and Sewer Revenue Refunding Bonds,
1987 (the "1987 Bonds"), in the original face amount of
$1,485,000, to refund, pay and retire all of its outstanding
water and sewer revenue bonds and, by Section 15 of that
ordinance, reserved the right to issue additional water and
sewer revenue bonds on a parity of lien with the 1987 Bonds if
the following conditions were met and complied with at the time
of issuance of these bonds:
(a) No default exists in the payment of the
principal of or interest on any outstanding water and
sewer revenue bonds of the City, and the amounts
required to have been paid into the Bond Fund shall
have been paid and maintained as required therein.
(b) The ordinance providing for the issuance of
Future Parity Bonds shall provide for the payment of
the principal of and interest on such Future Parity
Bonds out of the Principal and Interest Account and
shall further provide for the funding of the Reserve
Requirement for those Future Parity Bonds by the
payment of ULID Assessments first collected into the
Reserve Account and, if any deficiency exists, the
payment of Net Revenue of the Waterworks Utility into
the Reserve Account by five equal annual installments
after any initial payment therein from the proceeds of
those Future Parity Bonds so that on the fifth
anniversary date of the date of issuance of such bonds
the full Reserve Requirement therefor is deposited in
the Reserve Account, except in the case of refunding
Future Parity Bonds, the ordinance authorizing the
issuance of such bonds shall provide that the money in
the Reserve Account for the bonds to be refunded shall
be retained in the Reserve Account as a reserve for
the refunding bonds, or the money in any other reserve
account or fund for the bonds being refunded shall be
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transferred to the Reserve Account in the Bond Fund,
but if such amount does not equal the Reserve
Requirement for those refunding bonds, the Reserve
Requirement therefor shall be accumulated in the same
manner and within the same time as provided for other
Future Parity Bonds.
(c) The ordinance authorizing the issuance of
such Future Parity Bonds may provide for the creation
of a sinking fund account in the Bond Fund for any
Term Bonds to be issued and for regular payments to be
made into such account for the payment of the
principal of such Term Bonds on or before their
maturity, or, as an alternative, the mandatory
redemption of such Term Bonds prior to their maturity
date from money in the Principal and Interest Account.
(d) There shall be on file with the City a
certificate of either an independent certified public
accountant or a professional engineer experienced in
municipal utilities and licensed to practice in the
State of Washington to the effect that the Net Revenue
of the Waterworks Utility for any twelve consecutive
calendar months out of the immediately preceding 24
consecutive calendar months, plus the additional
revenue anticipated to be received from the proposed
improvement in connection with which such Future
Parity Bonds are to be issued, together with the
annual assessments reasonably anticipated to be
collected in any ULID created to pay, in whole or in
part, such Future Parity Bonds so proposed to be
issued, together with the increase in revenues
reasonably anticipated to result from any change in
the schedule of water and sewer rates to be put into
effect prior to the issuance of such Future Parity
Bonds, and after giving effect to any probable future
increase or decrease in costs of Maintenance and
Operation Expense and to any probable future increase
or decrease in revenues resulting from growth or
shrinkage in the number of water and sewer users
within 24 months after the date of issuance of such
Future Parity Bonds, are deemed sufficient to equal at
least 1.35 times the Maximum Annual Debt Service of
all water and sewer revenue bonds of the City payable
out of the Bond Fund at any time outstanding,
including the Future Parity Bonds proposed to be so
issued. If Future Parity Bonds proposed to be so
issued are for the sole purpose of refunding
outstanding water and sewer revenue bonds, such
certification of coverage shall not be required if the
amount required for the pal;ment of the principal and
interest in each year for the refunding bonds is not
increased over the amount required for the bonds to be
refunded thereby and the maturities of such refunding
bonds are not extended beyond the maturities of the
bonds to be refunded thereby.
and
WHEREAS, the City Council has created a comprehensive storm
and surface water drainage system and has determined that it is
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in the best interests of the City to combine that system into
the sewerage system as a part of the Waterworks Utility~ and
WHEREAS, the City Council further has determined that it is
in the best interests of the City that the City specify and
adopt a system or plan of additions to and betterments and
extensions of the Waterworks Utility and to authorize the
issuance of water and sewer revenue bonds to pay the cost of
carrying out those improvements~ and
WHEREAS, Harper, McLean & Company of Seattle, Washington,
has offered to purchase those bonds on the terms and conditions
hereinafter set forth; NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF WINSLOW, WASHINGTON, DO
ORDAIN, as follows:
Section 1. As used in this ordinance the following words
shall have the following meanings:
"Annual Debt Service" for the applicable series of the
Prior Lien Bonds, 1987 Bonds, Bonds and Future Parity Bonds for
any year shall mean all the interest, plus all principal (except
principal of Term Bonds due in any Term Bond Maturity Year), and
plus all mandatory redemption installments and Sinking Fund
Installments for that year, less all bond interest payable from
the proceeds of any such bonds in that year.
"Average Annual Debt Service" shall mean the sum of the
Annual Debt Service for the remaining years to the last
scheduled maturity of the applicable series of bonds divided by
the number of those years, except that for purposes of computing
the Reserve Requirement the estimated amount of Bonds to be
redeemed prior to maturity may be taken into account if required
under arbitrage regulations.
"Bond Fund" shall mean that special fund of the City known
as the Water and Sewer Revenue Refunding Bond Fund, 1987,
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created by Ordinance No. 87-01 for the payment of the principal
of and interest on the 1987 Bonds and any Future Parity Bonds.
"Bond Register" shall mean the registration books of the
Bond Registrar on which is recorded the names of the owners of
the Bonds.
"Bond Registrar" shall mean the Fiscal Agency.
"Bonds" shall mean the Water and Sewer Revenue Bonds, 1989,
authorized to be issued by this ordinance.
"1987 Bonds" shall mean the Water and Sewer Revenue
Refunding Bonds, 1987, of the City issued under date of
February 1, 1987, pursuant to Ordinance No. 87-01.
"City" shall mean the City of Winslow, Washington.
"Fiscal Agency" shall mean either of the fiscal agencies of
the State of Washington located in Seattle, Washington, and New
York, New York, as the same may be designated from time to time.
"Future Parity Bonds" shall mean any and all water and
sewer revenue bonds of the City issued after the date of the
issuance of the Bonds, the payment of the principal of and
interest on which constitutes a charge or lien on the Gross
Revenue of the Waterworks Utility and ULID Assessments equal in
rank with the charge and lien upon that revenue and those
assessments required to be paid into the Bond Fund to pay and
secure the payment of the principal of and interest on the 1987
Bonds and the Bonds.
"Government Obligations" shall mean direct obligations of
the United States of America.
"Gross Revenue of the Waterworks Utility" or "Gross
Revenue" shall mean 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 on deposit
in the Bond Fund, except ULID Assessments, government grants,
City taxes, principal proceeds of bonds and earnings or proceeds
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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
Internal Revenue Code of 1986, as amended.
"Maintenance and Operation Expense" shall mean all
reasonable expenses incurred by the City in causing the
Waterworks Utility of the City to be operated and maintained in
good repair, working order and condition, but shall not include
any depreciation or taxes levied or imposed by the City or
payments to the City in lieu of taxes, but shall include
payments made to any other municipal corporation for water or
water service or for sewage treatment and disposal service in
the event the City enters into a contract for such services.
"Maximum Annual Debt Service" shall mean the maximum amount
of Annual Debt Service which will mature or come due in the
current year or any future year.
"Net Revenue of the Waterworks Utility" or "Net Revenue"
shall mean the Gross Revenue less Maintenance and Operation
Expense.
"Plan of Additions and Betterments" shall mean the plan of
additions and betterments to and extensions of the Waterworks
Utility specified and adopted by Section 3 herein.
"Principal and Interest Account" shall mean the account of
that name created in the Bond Fund for the payment of the
principal of and interest on the 1987 Bonds, the Bonds and
Future Parity Bonds.
"Prior Lien Bonds" shall mean the outstanding Water Revenue
Bonds, 1962, Water Revenue Bonds, 1967, and Water Revenue Bonds,
1972, of the City.
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"Reserve Account" shall mean the account of that name
created in the Bond Fund for the purpose of securing the payment
of the principal of and interest on the Bonds and Future Parity
Bonds.
'"Reserve Requirement" shall mean:
(1) For the Bonds, the amount of $189,000,
being the difference in the amount on deposit in the
Reserve Account for the 1987 Bonds and the lesser of
the Maximum Annual Debt Service on the 1987 Bonds and
the Bonds and 1.25 times the Average Annual Debt
Service on the 1987 Bonds and the Bonds.
(2) For any issue of Future Parity Bonds at a
given time, the difference between (i) the lesser of
the Maximum Annual Debt Service or 1.25 times Average
Annual Debt Service on the then outstanding 1987
Bonds, Bonds and any Future Parity Bonds theretofore
issued and outstanding, if any, and such issue of
Future Parity Bonds, and (ii) the lesser of the
Maximum Annual Debt Service on the then outstanding
1987 Bonds, Bonds and any Future Parity Bonds
theretofore issued and outstanding, if any. Such
amount shall be accumulated within five years of the
date of issuance of the proposed Future Parity Bonds
and, to the extent it is not capitalized as a part of
such Future Parity Bonds, shall be deposited from
ULID Assessments first collected and, to the extent
of any deficiency, in approximately equal annual
payments commencing one year after the date of
issuance of such Future Parity Bonds.
"Sinking Fund Installment" or "Sinking Fund Installments"
shall mean, in any one year, the principal of the Bonds or
Future Parity Bonds designated in the ordinances authorizing
their respective issuance and sale as Sinking Fund Installments
for that year.
"Term Bond Maturity Year" shall mean any calendar year in
which the bonds of any one issue or series now or hereafter
scheduled to mature (regardless of any reservation of prior
redemption rights) is more than 1.35 times the average annual
principal maturity of the bonds of such issue or series for the
three years immediately preceding such year.
"Term Bonds" for the 1987 Bonds shall mean those Bonds
maturing in the year 2002, for the Bonds shall mean those Bonds
maturing in the year 2009, and for Future Parity Bonds shall
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mean those outstanding bonds of any single issue or series
scheduled to mature in any Term Bond Maturity Year.
"ULID" shall mean Utility Local Improvement District.
"ULID Assessments" shall mean all assessments levied and
collected in any ULID of the City created for the acquisition or
construction of additions to and extensions and betterments of
the Waterworks Utility, if such assessments are pledged to be
paid into the Bond Fund (less any prepaid assessments permitted
by law to be paid into a construction fund or account). ULID
Assessments shall include installments thereof and any interest
or penalties which may be due thereon.
"Utilities and Enterprise Fund" shall mean that fund
created by Ordinance No. 74-2 of the City.
"Waterworks Utility" of the City shall mean the combined
water system of the City, sanitary sewage disposal system of the
City and storm and surface water drainage system, and all
additions thereto and betterments and extensions thereof at any
time made.
Section 2. Combininq Storm and Surface Water System Into
the Waterworks Utility. The City Council finds that the
acquisition, construction, installation, maintenance, conduct
and operation of the storm and surface water drainage system
established by Ordinance No. 86-27 are necessary for the proper
and efficient operation of a system of sanitary sewerage
disposal. The City of Winslow's sewerage system is determined
to consist of the combined sanitary sewerage disposal and storm
and surface water drainage system pursuant to RCW 35.67.010 and
is made and confirmed as a part of the City's Waterworks
Utility, including all additions, extensions, and betterments
thereto. All money received by the City from charges for storm
and surface water drainage services are directed to be paid into
the Utilities and Enterprise Fund of the City.
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Section 3. Plan of Additions and Betterments. The City
specifies, adopts and orders the carrying out of a system or
plan of additions to and betterments and extensions of the
Waterworks Utility of the City consisting of the improvements,
acquisitions and work described in Exhibit A attached hereto and
by this reference made a part hereof.
There shall be included in the foregoing system or plan the
acquisition and installation of all necessary valves, pumps,
fittings, couplings, connections, equipment and appurtenances,
the acquisition of any easements, rights-of-way and land that
may be required and the performance of such work as may be
incidental thereto and necessary.
The City Council may modify the details of the foregoing
system or plan where, in its judgment, it appears advisable if
such modifications do not substantially alter the purposes of
that system or plan.
The life of the improvements comprising the foregoing
system or plan of additions to and betterments and extensions of
the Waterworks Utility of the City is declared to be at least 20
years. The estimated cost of the acquisition, construction,
installation and financing of the above-described improvements,
including the costs of issuance and sale of the Bonds, is
declared to be approximately $2,4~,000. Such costs shall be
paid from the proceeds of the Bonds authorized by this ordinance
and other money of or received by the City which is made
available therefor.
Section 4. Findings and Determinations. This City Council
finds and determines that:
(1) No default exists in the payment of the principal
of or interest on any outstanding water and sewer revenue
bonds of the City, and the amounts required to have been
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paid into the Bond Fund have been paid and maintained as
required therein.
(2) The principal of and interest on the Bonds shall
be paid from the Principal and Interest Account and
provision is made herein for payment of the Reserve
Requirement into the Bond Fund and for the mandatory
redemption of Term Bonds.
(3) There will be on file on the date of delivery of
the Bonds to the initial purchaser a certificate of an
independent certified public accountant or a professional
engineer experienced in municipal utilities and licensed to
practice in the State of Washington to the effect that the
Net Revenue of the Waterworks Utility is sufficient to
equal at least 1.35 times the Maximum Annual Debt Service
of all water and sewer revenue bonds of the City payable
out of the Bond Fund at any time outstanding.
The City Council further finds and determines that the
gross revenue and benefits to be derived from the operation and
maintenance of the Waterworks Utility at the rates to be charged
for water and sanitary sewage disposal service, including the
storm and surface water drainage system, from the entire utility
will be more than sufficient to meet all maintenance and
operation expense and the debt service requirements of the Prior
Lien Bonds and to permit the setting aside into the Bond Fund
out of the Gross Revenue of the Waterworks Utility of sufficient
amount to pay the principal of and interest on the 1987 Bonds
and the Bonds when due.
The City Council finds and determines it has exercised due
regard for Maintenance and Operation Expense and the debt
service requirements of the Prior Lien Bonds and that it has not
obligated the City to set aside and pay into the Bond Fund a
greater amount of the Gross Revenue of the Waterworks Utility
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than in its judgment will be available over and above such
Maintenance and Operation Expense and the debt service
requirements of the Prior Lien Bonds.
Section 5. Authorization and Description of Bonds. For
the purpose of providing a part of the money required to carry
out the Plan and System, to capitalize the Reserve Requirement
and to pay the costs of issuing the Bonds, the City shall issue
the Bonds in the aggregate principal amount of $2,400,000. The
Bonds shall be designated Water and Sewer Revenue Bonds, 1989;
shall be dated November 1, 1989, shall be in the denomination of
$5,000 or any integral multiple thereof within a single
maturity; shall be numbered separately in the manner and with
any additional designation as the Bond Registrar deems necessary
for purposes of identification; shall bear interest at the rates
set forth below (computed on the basis of a 360-day year of
twelve 30-day months), payable on May 1, 1990, and semiannually
thereafter on each succeeding November 1 and May 1~ and shall
bear interest at the rates and mature on November 1 in years and
amounts as follows:
Maturity Interest
Years Amounts Rates
1998 $ 15,000
1999 125,000
2000 160,000
2001 165,000
2002 180,000
2003 200,000
2009 1,555,000
7 10%
7 20
7 25
7 30
7 35
7 40
7.60
Section 6. Reqistration and Transfer of Bonds. The Bonds
shall be issued only in registered form as to both principal and
interest and recorded on books or records maintained by the Bond
Registrar (the "Bond Register"). The Bond Register shall
contain the name and mailing address of the owner of each Bond
and the principal amount and number of each of the Bonds held by
each owner.
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Bonds surrendered to the Bond Registrar may be exchanged
for Bonds in any authorized denomination of an equal aggregate
principal amount and of the same interest rate and maturity.
Bonds may be transferred only if endorsed in the manner provided
thereon and surrendered to the Bond Registrar. Any exchange or
transfer shall be without cost to the owner or transferee. The
Bond Registrar shall not be obligated to exchange or transfer
any Bond during the 15 days preceding any principal payment or
redemption date.
Section 7. Payment of Bonds. 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 paid
by checks or drafts mailed on the interest payment date to the
registered owners at the addresses appearing on the Bond
Register on the fifteenth day of the month preceding the
interest payment date. Principal of the Bonds shall be payable
upon presentation and surrender of the Bonds by the registered
owners at either of the principal offices of the Bond Registrar
at the option of the owners.
Section 8. Optional Redemption and Open Market Purchase of
Bonds. Bonds maturing in the years 1998 and 1999 shall be
issued without the right or option of the City to redeem those
Bonds prior to their stated maturity dates. The City reserves
the right and option to redeem Bonds maturing on or after
November 1, 2000, prior to their stated maturity dates as a
whole at anytime on or after November 1, 1999, or in part in one
or more maturities selected by the City and by lot within a
maturity in such manner as the Bond Registrar shall determine,
on November 1, 1999, or on any interest payment date thereafter,
at par plus accrued interest to the date fixed for redemption.
If not purchased in the open market or redeemed under the
optional provisions set forth above, Term Bonds maturing in the
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year 2009 shall be called for redemption by lot within a
maturity (in such manner as the Bond Registrar shall determine)
at par plus accrued interest on the following dates and in the
following amounts:
Mandatory
Redemption
Date
November 1, 2004
November 1, 2005
November 1, 2006
November 1, 2007
November 1, 2008
November 1, 2009
Mandatory
Redemption
Amounts
$210,000
230,000
245,000
270,000
290,000
310,000
Term Bonds previously redeemed by optional call or open
market purchase shall be credited to the latest scheduled
mandatory redemption date of those Bonds.
Portions of the principal amount of any Bond, in
installments of $5,000 or any integral multiple thereof, may be
redeemed. If less than all of the principal amount of any Bond
is redeemed, upon surrender of that Bond at either of the
principal offices of the Bond Registrar, there shall be issued
to the registered owner, without charge therefor, a new Bond (or
Bonds at the option of the registered owner) of the same
maturity and interest rate in any of the denominations
authorized by this ordinance in the aggregate principal amount
remaining unredeemed.
The City further reserves the right and option to purchase
any or all of the Bonds in the open market at any time at a
price not in excess of par plus accrued interest to the date of
purchase.
All Bonds purchased or redeemed under this section shall be
cancelled.
Section 9. Notice of Redemption. The City shall cause
notice of any intended redemption of Bonds to be given not less
than 30 nor more than 60 days prior to the date fixed for
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redemption by first-class mail, postage prepaid, to the
registered owner of any Bond to be redeemed at the address
appearing on the Bond Register at the time the Bond Registrar
prepares the notice, and the requirements of this sentence shall
be deemed to have been fulfilled when notice has been mailed as
so provided, whether or not it is actually received by the owner
of any Bond. Interest on Bonds called for redemption shall
cease to accrue on the date fixed for redemption unless the Bond
or Bonds called are not redeemed when presented pursuant to the
call. In addition, the redemption notice shall be mailed within
the same period, postage prepaid, to Moody's Investors Service,
Inc., and Standard & Poor's Corporation at their offices in New
York, Mew York, or their successors, Harper, McLean & Company,
at its principal office in Seattle, Washington, or its
successor, and to such other persons and with such additional
information as the City Clerk-Treasurer shall determine, but
these additional mailings shall not be a condition precedent to
the redemption of Bonds.
Section 10. Failure to Redeem Bonds. If any Bond is not
redeemed when properly presented at its maturity or call date,
the City shall be obligated to pay interest on that Bond at the
same rate provided in the Bond from and after its maturity or
call date until that Bond, both principal and interest, is paid
in full or until sufficient money for its payment in full is on
deposit in the bond redemption fund hereinafter created and the
Bond has been called for payment by giving notice of that call
to the registered owner of each of those unpaid Bonds.
Section 11. Form and Execution of Bonds. The Bonds shall
be printed or lithographed on good bond paper in a form
consistent with the provisions of this ordinance and state law,
shall be signed by the Mayor and the City Clerk-Treasurer,
either or both of whose signatures may be manual or in
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facsimile, and the seal of the City or a facsimile reproduction
thereof shall be impressed or printed thereon.
Only Bonds bearing a Certificate of Authentication in the
following form, manually signed by the Bond Registrar, shall be
valid or obligatory for any purpose or entitled to the benefits
of this ordinance:
CERTIFICATE OF AUTHENTICATION
This bond is one of the fully registered City of Winslow,
Washington, Water and Sewer Revenue Bonds, 1989, described in
the Bond Ordinance.
WASHINGTON STATE FISCAL AGENCY
Bond Registrar
By
Authorized Officer
The authorized signing of a Certificate of Authentication shall
be conclusive evidence that the Bonds so authenticated have been
duly executed, authenticated and delivered and are entitled to
the benefits of this ordinance.
If any officer whose facsimile signature appears on the
Bonds ceases to be an officer of the City authorized to sign
bonds before the Bonds bearing his or her facsimile signature
are authenticated or delivered by the Bond Registrar or issued
by the City, those Bonds nevertheless may be authenticated,
delivered and issued and, when authenticated, issued and
delivered, shall be as binding on the City as though that person
had continued to be an officer of the City authorized to sign
bonds. Any Bond also may be signed on behalf of the City by any
person who, on the actual date of signing of the Bond, is an
officer of the City authorized to sign bonds, although he or she
did not hold the required office on the date of issuance of the
Bonds.
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Section 12. Bond Registrar. The Bond Registrar shall
keep, or cause to be kept, at its principal corporate trust
office, sufficient books for the registration and transfer of
the Bonds which shall be open to inspection by the City at all
times. The Bond Registrar is authorized, on behalf of the City,
to authenticate and deliver Bonds transferred or exchanged in
accordance with the provisions of the Bonds and this ordinance,
to serve as the City's paying agent for the Bonds and to carry
out all of the Bond Registrar's power and duties under this
ordinance and City Ordinance No. 83-10 establishing a system of
registration for the City's bonds and obligations.
The Bond Registrar shall be responsible for its
representations contained in the Bond Registrar's Certificate of
Authentication on the Bonds. The Bond Registrar may become the
owner of Bonds 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 members of, or in any other capacity with respect to, any
committee formed to protect the rights of Bond owners.
Section 13. Deposits Into Bond Fund. There has been
created in the office of the City Clerk-Treasurer a special fund
known as the Water Sewer Revenue Refunding Bond Fund, 1987
(herein defined as the "Bond Fund"), which fund has been divided
into two accounts, namely, the Principal and Interest Account
and the Reserve Account. So long as any Bonds are outstanding
against the Bond Fund, the City shall set aside and pay into the
Bond Fund, in addition to the amounts required to be paid
therein for the 1987 Bonds, all ULID Assessments upon their
collection and, out of the Net Revenue of the Waterworks
Utility, certain fixed amounts without regard to any fixed
proportion, namely:
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(a) Into the Principal and Interest Account
prior to each interest or principal and interest
payment date or mandatory call date an amount,
together with other money on deposit therein,
sufficient to pay the interest or principal and
interest next coming due.
(b) Into the Reserve Account from the proceeds
of the Bonds, the Reserve Requirement for the Bonds.
Upon retirement of all Prior Lien Bonds, the City will
transfer any and all funds in the reserve account for the Prior
Lien Bonds to the Reserve Account to the extent necessary to
fund fully the Reserve Requirement for all outstanding Bonds and
any then outstanding Future Parity Bonds. Any remaining funds
in the reserve account for the Prior Lien Bonds may be expended
for any lawful Waterworks Utility purpose.
Except for withdrawals therefrom as authorized herein, the
Reserve Account shall be maintained at such total Reserve
Requirement amount for all bonds payable from the Bond Fund at
all times so long as any of such bonds are outstanding. When
the total amount in the Bond Fund shall equal the total amount
of principal and interest for all outstanding bonds payable out
of the Bond Fund to the last maturity thereof, no further
payment need be made into the Bond Fund.
In the event that there shall be a deficiency in the
Principal and Interest Account in the Bond Fund to meet maturing
installments of either principal or interest, as the case may
be, such deficiency shall be made up from the Reserve Account by
the withdrawal of cash therefrom for that purpose. Any
deficiency created in the Reserve Account by reason of any such
withdrawals shall then be made up from the Net Revenue of the
Waterworks Utility first available after making necessary
provisions for the required payments into the Principal and
Interest Account. The money in the Reserve Account shall
otherwise be held intact and may be applied against the last
outstanding bonds payable out of the Bond Fund, except that if
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the Reserve Account is fully funded, any money in excess of the
Reserve Requirement may be withdrawn and expended for the
purpose of retiring bonds payable from the Bond Fund or for any
other lawful Waterworks Utility purpose.
The City may provide for the purchase, redemption or
defeasance of bonds payable from the Bond Fund by the use of
money on deposit in any account in the Bond Fund as long as the
money remaining in those accounts is sufficient to satisfy the
required deposits in those accounts for the remaining bonds
outstanding payable from the Bond Fund.
All money in the Bond Fund may be kept in cash or invested
in legal investments maturing not later than the date when the
funds are required for the payment of principal of or interest
on the outstanding bonds payable from the Bond Fund (for
investments in the Principal and Interest Account) or having a
guaranteed redemption price prior to maturity and, in no event,
maturing later than the last maturity of any remaining
outstanding bonds payable from the Bond Fund (for investments in
the Reserve Account). Earnings from investments in the
Principal and Interest Account shall be deposited in that
account. income from investments in the Reserve Account shall
be deposited in that account until the amount therein is equal
to the Reserve Requirement of all bonds payable from the Bond
Fund, and thereafter shall be deposited in the Principal and
Interest Account.
Notwithstanding the provisions for the deposit of earnings,
any earnings which are subject to a federal tax or rebate
requirement may be withdrawn from the Bond Fund for deposit into
a separate fund or account for that purpose.
In no event shall any money in the Bond Fund or any other
money reasonably expected to be used to pay principal of or
interest on the Bonds be invested at a yield which would cause
- 18 -
the Bonds to be arbitrage bonds within the meaning of Section
148 of the United States Internal Revenue Code of 1986, as
amended, and applicable regulations thereunder.
The City may create sinking fund accounts or other accounts
in the Bond Fund for the payment or securing the payment of
bonds payable from the Bond Fund as long as the maintenance of
such accounts does not conflict with the rights of the owners of
bonds payable from the Bond Fund.
If the City fails to set aside and pay into the Bond Fund
the amounts set forth above, the owner of any of the outstanding
bonds payable out of the Bond Fund may bring action against the
City and compel such setting aside and payment.
Section 14. Pledge of Revenue and Lien Position. The
Gross Revenue of the Waterworks Utility and ULID Assessments are
pledged to the payment of the 1987 Bonds, the Bonds and any
Future Parity Bonds, and the 1987 Bonds, the Bonds and such
Future Parity Bonds, if any, shall constitute a lien and charge
upon such Gross Revenue and ULID Assessments prior and superior
to any other charges whatsoever, excluding Maintenance and
Operation Expense with respect to that revenue, except that the
lien and charge on the Gross Revenue for the 1987 Bonds, the
Bonds and Future Parity Bonds, if any, shall be junior and
subordinate to the lien and charge upon the revenue of the water
system of the Prior Lien Bonds. The City has covenanted in
Ordinance No. 87-01 that it will not issue any additional bonds
on a parity of lien with any of the outstanding Prior Lien Bonds.
Section 15. The City covenants and agrees with the owner
of each 1987 Bond, Bond and Future Parity Bond at any time
outstanding, as follows:
(a) It will establish, maintain and collect
such rates and charges of the Waterworks Utility so
long as any of the 1987 Bonds, Bonds and any Future
Parity Bonds are outstanding which will make
available for the payment of the principal of and
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interest on such bonds as the same accrue, together
with the collection of other Gross Revenue and ULID
Assessments, an amount equal to at least 1.35 times
the Maximum Annual Debt Service in any current year
on the Prior Lien Bonds, the 1987 Bonds, the Bonds
and any Future Parity Bonds outstanding, after
deducting Maintenance and Operation Expense from the
Gross Revenue of the Waterworks Utility.
(b) 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 that
utility and the business in connection therewith in
an efficient manner and at a reasonable cost.
(c) It will not sell, lease, mortgage, or in
any manner encumber or dispose of all of the property
of the Waterworks Utility unless provision is made,
in addition to what is required for the Prior Lien
Bonds, for the payment into the Bond Fund of an
amount sufficient to pay the principal of and
interest on the 1987 Bonds, the Bonds and any Future
Parity Bonds then outstanding and that it will not
sell, lease, mortgage, or in any manner encumber or
dispose of any part of the property of the Waterworks
Utility that is used, useful and material to the
operation thereof, unless provision is made, in
addition to what is required for Prior Lien Bonds,
for replacement thereof, or for payment into the Bond
Fund of the total amount of Gross Revenue received
which shall not be less than an amount which shall
bear the same ratio to the amount of the 1987 Bonds,
the Bonds and any Future Parity Bonds then
outstanding as the Gross Revenue available for debt
service for such outstanding bonds for the twelve
months preceding such sale, lease, encumbrance or
disposal from the portion of the Utility sold,
leased, encumbered or disposed of bears to the Gross
Revenue available for debt service for the
outstanding 1987 Bonds, the Bonds and Future Parity
Bonds from the entire Waterworks Utility for the same
period. Any such money so paid into the Bond Fund
shall be used to retire such 1987 Bonds, Bonds and/or
Future Parity Bonds at the earliest possible date.
(d) While any of the Bonds remain outstanding,
it will keep proper and separate accounts and records
in which complete and separate entries shall be made
of all transactions relating to the Waterworks
Utility, and it will furnish the original purchaser
or purchasers of the Bonds or any subsequent owner or
owners thereof, at the written request of such owner
or owners, complete operating and income statements
of the Waterworks Utility in reasonable detail
covering any calendar year not more than 90 days
after the close of such calendar year and it will
grant any owner or owners of at least 25% of the
outstanding Bonds the right at all reasonable times
to inspect the entire Waterworks Utility and all
records, accounts and data of the City relating
thereto. Upon request of any owner of any of the
Bonds, it also will furnish to such owner a copy of
the most recently completed audit of the City's
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accounts by the State Auditor of Washington, or such
other audit as is authorized by law in lieu thereof.
(e) It will not furnish water or sanitary
sewage disposal or storm drainage service to any
customer whatsoever free of charge and will promptly
take legal action to enforce collection of all
delinquent accounts.
(f) It will carry the type of insurance on its
Waterworks Utility property in the amounts normally
carried by private water and sewer utility companies
engaged in the operation of water and sewerage
systems, and the cost of such insurance shall be
considered part of the operating and maintaining of
such Utility or, in lieu thereof, may self-insure or
participate in a joint intergovernmental insurance
assuring the same coverage as is carried by such
private water and sewerage companies. If, as, and
when the United States of America or some agency
thereof shall provide for war risk insurance, the
City further agrees to take out and maintain such
insurance on all or such portion of the Utility on
which such war risk insurance may be written in an
amount or amounts to cover adequately the value
thereof.
(g) It will pay all Maintenance and Operation
Expense and the debt service requirements of the
Prior Lien Bonds, the 1987 Bonds, the Bonds and any
Future Parity Bonds and otherwise meet the
obligations of the City as set forth in this
ordinance.
(h) It will take all actions necessary to
prevent interest on the Bonds from being included in
gross income for federal income tax purposes, and it
will neither take any action nor make or permit any
use of proceeds of the Bonds or other funds of the
City treated as proceeds of the Bonds at any time
during the term of the Bonds which will cause
interest on the Bonds to be included in gross income
for federal income tax purposes.
The City has not been notified of any listing or proposed
listing by the Internal Revenue Service to the effect that it is
a bond issuer whose arbitrage certifications may not be relied
upon.
Section 16. Deposits and Flow of Funds. All ULID
Assessments shall be paid into the Bond Fund as provided by
Section 13. The Gross Revenue of the Waterworks Utility, except
for earnings in the Bond Fund and funds other than the Utilities
and Enterprise Fund, shall be credited to the Utilities and
Enterprise Fund of the City as it is collected. The Utilities
- 21 -
and Enterprise Fund shall be held separate and apart from other
funds and accounts of the City. Money in the Utilities and
Enterprise Fund shall be used for the following purposes only
and shall be applied in the following order of priority:
(a)
Expense;
To pay the Maintenance and Operation
(b) To pay the interest on the Prior Lien Bonds;
(c)
Bonds;
To pay the principal of the Prior Lien
(d) To pay the interest on the 1987 Bonds, the
Bonds and any Future Parity Bonds;
(e) To pay the principal of the 1987 Bonds, the
Bonds and any Future Parity Bonds;
(f) To make all palanents required to be made
into any sinking fund account created to provide for
the payment of the principal of Term Bonds;
(g) To make all payments required to be made
into the Reserve Account;
(h) 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 the secure the payment of the
principal of and interest on any revenue bonds, or
revenue warrants or other revenue obligations of the
City having a lien upon the revenue of the Waterworks
Utility junior and inferior to the lien thereon for
the payment of the principal of and interest on the
1987 Bonds, the Bonds and any Future Parity Bonds; and
(i) To retire by redemption or purchase in the
open market any outstanding revenue bonds or other
revenue obligations of the Waterworks Utility, to
make necessary additional betterments, improvements
and repairs to or extensions and replacements of the
Waterworks Utility, or for any other lawful City
purposes.
The City may transfer from any funds or accounts of the
Waterworks Utility legally available therefor, except bond
redemption funds, refunding escrow funds or defeasance funds,
any money therein to meet the required payments to be made into
the Bond Fund.
Section 17. Parity Provisions. The City has reserved the
right to issue Future Parity Bonds if the conditions set forth
in Section 15 of Ordinance No. 87-01, which section is
- 22 -
incorporated herein by this reference, are met and complied with
at the time of the issuance of such Future Parity Bonds.
Nothing herein contained shall prevent the City from
issuing water and sewer revenue bonds which are a charge upon
the Gross Revenue of the Waterworks Utility of the City junior
or inferior to the payments required to be made therefrom into
the Bond Fund for the payment of the Bonds and any Future Parity
Bonds.
Section 18. Refunding or Defeasance of Bonds. The City
may issue advance refunding bonds pursuant to the laws of the
State of Washington and use money available from any other
lawful source to pay the principal of and interest on the Bonds,
or such portion thereof included in a refunding or defeasance
plan, as the same become due and payable and to redeem and
retire, release or refund all such then-outstanding Bonds
(hereinafter collectively called the "defeased Bonds") and to
pay the costs of such refunding or defeasance. In the event
that money and/or Government Obligations sufficient in amount,
together with known earned income from the investments thereof,
to redeem and retire, release or refund the defeased Bonds in
accordance with their terms, are set aside irrevocably in a
special fund for and pledged irrevocably to such redemption and
retirement (hereinafter called the "trust account"), then all
right and interest of the owners of the defeased Bonds in the
covenants of this ordinance and, except as hereinafter provided,
in the Gross Revenue of the Waterworks Utility, ULID
Assessments, funds and accounts obligated to the payment of such
defeased Bonds, other than the right to receive the funds so set
aside and pledged, thereafter shall cease and become void. Such
owners thereafter shall have the right to receive payment of the
principal of and interest on the defeased Bonds from the trust
account and, in the event the funds in the trust account are not
- 23 -
available for such payment, shall have the residual right to
receive payment of the principal of and interest on the defeased
Bonds from the Gross Revenue of the Waterworks Utility and ULID
Assessments without any priority of lien or charge against that
revenue or those assessments or covenants with respect thereto
except to be paid therefrom.
After the establishing and full funding of such trust
account, the City then may apply any money in any other fund or
account established for the payment or redemption of the
defeased Bonds to any lawful purposes as it shall determine,
subject only to the rights of the owners of any other Bonds or
bonds then outstanding.
In the event that the refunding plan provides that the
defeased Bonds or the refunding bonds to be issued be secured by
money and/or Government Obligations pending the prior redemption
of the defeased Bonds and if such refunding plan also provides
that certain money and/or Government Obligations are pledged
irrevocably for the prior redemption of the defeased Bonds
included in that refunding plan, then only the debt service on
the Bonds which are not defeased Bonds and the refunding bonds,
the payment of which is not so secured by the refunding plan,
shall be included in the computation of the coverage requirement
for the issuance of Future Parity Bonds and the annual
computation of coverage for determining compliance with the rate
covenants.
Section 19. Small Governmental Issuer Arbitrage Rebate
Exemption and Designation of Bonds as "Qualified Tax-Exempt
Obligations." The City finds and declares that (a) it is a duly
organized and existing governmental unit of the State of
Washington and has general taxing power~ (b) no Bond which is
part of this issue of Bonds is a "Private activity bond" within
the meaning of Section 141 of the United States Internal Revenue
- 24 -
Code of 1986, as amended (the "Code"); (c) at least 95% of the
net proceeds of the Bonds will be used for local governmental
activities of the City (or of a governmental unit the
jurisdiction of which is entirely within the jurisdiction of the
City)~ (d) the aggregate face amount of all tax-exempt
obligations (other than private activity bonds) issued by the
City and all entities subordinate to the City (including any
entity which the City controls, which derives its authority to
issue tax-exempt obligations from the City or which issues
tax-exempt obligations on behalf of the City) during the
calendar year in which the Bonds are issued is not reasonably
expected to exceed $5,000,000; and (e) the amount of tax-exempt
obligations, including the Bonds, designated by the City as
"qualified tax-exempt obligations" for the purposes of Section
265(b)(3) of the Code during the calendar year in which the
Bonds are issued does not exceed $10,000,000. The City
therefore certifies that the Bonds are eligible for the
arbitrage rebate exemption under Section 148(f)(4)(C) of the
Code and designates the Bonds as "qualified tax-exempt
obligations" for the purposes of Section 265(b)(3) of the Code.
Section 20. Bonds Negotiable. The Bonds shall be
negotiable instruments to the extent provided by RCW 62A.8-102
and 62A.8-105.
Section 21. Acceptance of Purchase Offer and Deposit of
Proceeds. Harper, McLean & Company of Seattle, Washington, has
presented a bond purchase agreement (the "Purchase Contract") to
the City by which Harper, McLean & Company has offered to
purchase the Bonds under the terms and conditions provided in
the Purchase Contract, which written Purchase Contract is on
file with the City Clerk-Treasurer and is incorporated herein by
this reference. The City Council finds that entering into the
Purchase Contract is in the City's best interest and, therefore,
- 25 -
accepts the offer contained in the Purchase Contract and
authorizes the execution of the Purchase Contract by City
officials.
The Bonds will be printed at City expense and will be
delivered to the purchaser in accordance with the terms of the
Purchase Contract with the approving legal opinion of Foster
Pepper & Shefelman, municipal bond counsel of Seattle,
Washington, relative to the issuance of the Bonds, printed on
each Bond. Bond counsel has not been retained to and shall not
be required to review or express any opinion concerning the
completeness or accuracy of any official statement, offering
circular or other sales material issued or used in connection
with the Bonds except with respect to any description of the
Bonds, and bond counsel's opinion shall so state.
The proper City officials are authorized and directed to do
everything.necessary for the prompt authentication and delivery
of the Bonds to the purchaser, including the execution of the
Official Statement on behalf of the City, and for the proper
application and use of the proceeds of the sale thereof.
There is created in the City Clerk-Treasurer's office, a
special fund of the City designated as the Water and Sewer
Construction Fund (the "Construction Fund"). The principal
proceeds, exclusive of accrued interest which shall be deposited
in the Principal and Interest Account, shall be deposited as
follows: $189,000 in the Reserve Account to capitalize the
Reserve Recfuirement, and the balance in the Construction Fund to
pay the costs of carrying out the Plan of Additions and
Betterments to pay the costs of issuance. Until needed to pay
the costs of carrying out that Plan of Additions and Betterments
and the costs of issuance, the City may invest the principal
proceeds temporarily in any legal investment, and the investment
- 26 -
Section 24. Effective Date. This ordinance shall take
effect from and after its passage and five days following the
date of its publication in the official newspaper of the City.
PASSED by the City Council and APPROVED by the Mayor of the
City of Winslow, Washington, at a regular open public meeting
thereof, this 19th day of October, 1989.
CITY OF WINSLOW, WASHINGTON
Mayor
ATTEST:
FORM APPROVED:
· City Attorney
MLC-70*
- 27 -
EXHIBIT A
Plan of Additions and Betterments to and Extensions
of the Waterworks Utility
Construction of the storm drainage system more particularly
described in the City of Winslow Storm Drainage Plan from
Wyatt Avenue approximately 150 feet east of Weaver Road to
the outfall at Eagle Harbor. The system is for a closed
system to the high tide elevation and an energy dissipation
pad at the outfall.
Construction of a Storm Sewer on Winslow Way from the
intersection of Winslow Way and Grow Avenue, thence West
approximately 1100 L.F. to the outfall at Sunday Cove in
Eagle Harbor. The outfall will be located more or less
30 feet onto the beach with a rip/rap energy dissipation pad.
As discussed in the Stormwater Drainage Plan, repair the
Westerly most existing 36" culvert under Wing Point Way by
lining the existing culvert with polyethelyne pipe, packing
the void space with sand and removing an angle point 22 feet
South of the North end of the existing culvert.
Replace the existing 4" water main on Lovell Avenue with 8"
DI water main; construct an 8" high zone connection between
Lovell Avenue and Grow Avenue; and construct an 8" P.R.V. at
the intersection of Wyatt Street and either Lovell or Grow
Avenue.
Construct approximately 2,000 L.F. of sanitary sewer midway
between Lovell Avenue and Weaver Road from N.E. Wyatt Street
to the N.E. corner of the Rotary field and south along Wyatt
Street to the existing manhole 250 feet, more or less, east
of Weaver Road.
Excavate and remove approximately 50 feet of 42" corrugated
metal pipe and replace that pipe with 50 feet of 48" x 48"
precast concrete box culvert and a precast concrete wingwall
and apron and install 165 feet of storm sewer, storm sewer
manholes and restoration of the site on Winslow Way East
approximately 400 feet west of the intersection of Winslow
Way East and SR 305.
Extend and replace the existing storm sewer system in
Ferncliff Avenue.
Develop a new Sands Road well and storage tank.
Construct a new secondary clarifier 60 feet in diameter and
12 to 14 feet deep with a positive return sludge pumping
providing an average overflow rate of 471 gal/sq ft/day at
1.0 mgd with a solids loading of 12 lb/sq ft/day, and a peak
overflow rate o£ 1,200 gal/sq £t/day at 3.0 mgd with a
solids loading of 22 lb/sq ft/day, a new dewatering site
just west of aeration tank ntunber 1 and some road work to
maintain truck access to the dewatering building on the
northwest corner of the plant.
MLC-43 *
I, DONNA JEAN BUXTON, City Clerk-Treasurer of the City of
Winslow, Washington, certify that the attached copy of Ordinance
No. ~~ is a true and correct copy of the original ordinance
passed on the 19th day of October, 1989, as such ordinance
appears on the Minute Book of the City.
DATED this~day of October, 1989.
MLC-70'/28