2626u
CITY OF MOSES LAKE
WATER AND SEWER REVENUE BONDS,2011
ORDINANCE NO.2626
AN ORDINANCE OF THE CITY OF MOSES LAKE,
WASHINGTON;AUTHORIZING CERTAIN ADDITIONS,
BETTERMENTS AND IMPROVEMENTS TO THE CITY'S
COMBINED SYSTEM OF WATER AND SEWERAGE;
AUTHORIZING THE ISSUANCE OF WATER AND SEWER
REVENUE BONDS OF THE CITY TO PAY THE COSTS OF
SAID IMPROVEMENTS IN THE AGGREGATE PRINCIPAL
AMOUNT OF $4,905,000;FIXING THE DATE,FORM,
TERMS,MATURITIES AND COVENANTS OF THE BONDS;
\)APPROVING A PURCHASE CONTRACT FOR THE BONDS;
RESERVING THE RIGHT TO ISSUE REVENUE BONDS ON A
PARITY WITH THE BONDS HEREIN AUTHORIZED UPON
COMPLIANCE WITH CERTAIN CONDITIONS AND
APPROVING AN AGREEMENT FOR ONGOING
DISCLOSURE.
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Approved:August 9,2011
Prepared by:
K&L Gatesllp
Seattle,Washington
CITY OF MOSES LAKE
ORDINANCE NO.2626
TABLE OF CONTENTS*
Page
Section 1.Definitions 2
Section 2.Compliance with Parity Conditions 14
Section 3. Findings and Purposes;Plan ofAdditionsand Bettermentsto the System 15
Section 4.Authorization and Description ofBonds 16
Section 5.Registration,Exchange and Payments 17
Section 6.Redemption and Purchase 22
Section 7.Revenue Fund and Priority ofApplication of Revenue 22
Section 8.Bond Fund and Reserve Fund 24
Section 9.Specific Covenants 29
Section 10.Tax Covenants 33
Section 11.Issuance ofFuture Parity Bonds 35
Section 12.Form ofBonds 39
Section 13.Execution ofBonds 42
Section 14.Defeasance 42
Section 15. Lost or Destroyed Bonds 43
Section 16.Sale ofBonds 43
Section 17.Disposition ofBond Proceeds 44
Section 18.Undertaking to Provide Ongoing Disclosure 44
Section 19.Effective Date ,49
*This Table of Contents and the Cover Page are for convenience of reference and are not
intended to be a part ofthis ordinance.
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ORDINANCE NO.2626
AN ORDINANCE of the City of Moses Lake, Washington;
authorizing certain additions, betterments and improvements to the
City's combined system of water and sewerage;authorizing the
issuance of water and sewer revenue bonds ofthe City to pay the
costs of said improvements in the aggregate principal amount of
$4,905,000;fixing the date, form,terms,maturities and covenants
of the bonds;approving a purchase contract for the bonds;
reserving the right to issue revenue bonds on a parity with the
bonds herein authorized upon compliance with certain conditions;
and approving an agreement for ongoing disclosure.
WHEREAS,the City ofMoses Lake,Washington (the "City")operates a combined water
and sewer system (hereinafter further defined asthe "System");and
WHEREAS,the System is in need of additions,improvements and betterments (the
"Project"); and
WHEREAS,pursuant to RCW chs.35.92,35.41 and 39.44, the City is authorized to issue
\)its revenue bonds payable and securedby the net revenue ofits System under terms approvedby
the City Council (the "Council")by ordinance; and
WHEREAS,the City has outstanding its Water and Sewer Revenue Bonds,2004 (the
"2004 Bonds")payable from revenues of the System issued under Ordinance No. 2177, dated
October 1,2004,and presently outstanding in the principal amount of$6,875,000; and
WHEREAS,the ordinance authorizing the 2004 Bonds provides that additional water and
sewer revenue bonds may be issued on a parity with such bonds if certain conditions are met;
and
WHEREAS,it appearsto the Council ofthe City that such conditions can be met and that
it is in the best interests ofthe City and its inhabitants thatthe Bonds be issued on a paritywith
the outstanding waterandsewerrevenuebonds oftheCity;and
WHEREAS,Martin Nelson & Co., Inc.,Seattle,Washington,has submitted to this
Council an offer to purchase the bonds authorized herein in accordance with the terms of this
ordinance and this offer is acceptable to the Council;
NOW,THEREFORE,THE CITY COUNCIL OF THE CITY OF MOSES LAKE,
WASHINGTON,DO ORDAIN as follows:
Section 1.Definitions.As used in this ordinance the following definitions shall
applyunless a differentmeaning clearlyappearsfromthe context:
Accreted Value means (1) with respect to any Capital Appreciation Bonds, as ofany date
of calculation,the sum ofthe amount set forth in the ordinance authorizing their issuance as the
amount representing the initial principal amount of such Capital Appreciation Bonds plus the
interest accumulated, compounded and unpaid thereon as of the most recent compounding date,
or (2)with respect to Original Issue Discount Bonds, as of the date of calculation,the amount
representing the initial public offering price of such Original Issue Discount Bonds plus the
amount of discounted principal which has accreted since the date of issue.In each case, the
Accreted Value shall be determined in accordance with the provisions of the ordinance
authorizing the issuance ofsuch Balloon Maturity Bonds.
Annual Debt Service means the total amount of Debt Service for any Parity Bond or
series ofParity Bonds or other evidences ofindebtednesspayablefrom Revenue ofthe System in
any fiscal year or Base Period.
Balloon Maturity Bonds meansany evidences of indebtedness ofthe City payable from
Revenue of the System that are so designated in the ordinance pursuant to which such
indebtedness is incurred.
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Base Period means any consecutive 12-month period selected by the City out of the
36-month period next preceding the date of issuance of an additional series of Future Parity
Bonds;provided,however,that for so long as the 2004 Insurance Policy is in effect,the 12-
month period selected bythe City shall be within the24-month period next preceding the date of
issuance ofan additional series ofFuture Parity Bonds.
BeneficialOwner means the beneficialowner of all or a portion of a Bond while such
Bond is in fully immobilized form.
Bond Fund means 2011 Bond Fund #450 maintained by the City within the Water/Sewer
Fund and also shall include any fund established for the payment of debt service on Parity
Bonds.
Bond Register means the books or records maintained by the Registrar containingthe
name and mailing address ofthe owner ofeach Bond or nominee ofsuch owner and the principal
amount and number ofBonds held by each owner or nominee.
Bonds means the $4,905,000 par value City of Moses Lake,Washington,Water and
Sewer Revenue Bonds,2011 authorized to be issued pursuant to this ordinance.
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 ofissue and on the final
maturity date ofthe Bonds.
Capital Appreciation Bonds means any Future Parity Bonds all or a portion of the
interest on which is compounded,accumulated and payable only upon redemption or on the
maturity date of such Capital Appreciation Bonds.If so provided in the ordinance authorizing
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their issuance, Future Parity Bonds may be deemed to be Capital Appreciation Bonds for only a
portion of their term. On the date on which Future Parity Bonds no longer are Capital
Appreciation Bonds, they shall be deemed outstanding in a principal amount equal to their
Accreted Value.
City meansthe City ofMosesLake, a municipal corporation ofthe State ofWashington.
City Representative means the Mayor,City Manager,Finance Director or such other
official or employee ofthe City designated in writingbyeither ofthe foregoing
Code meansthe United StatesInternal RevenueCode of 1986,as amended, togetherwith
all applicable rulings and regulations heretofore or hereafter promulgated thereunder.
Consultant means at any time an independent municipal financial consultant appointed
by the City to perform the duties of the Consultant as required by this ordinance. For the
purposes ofdelivering any certificate required by Section 11 hereof and making the calculation
required by Section 11 hereof, the term Consultant shall also include any independent public
accounting firm appointed by the City to make such calculation or to provide such certificate.
Costs ofMaintenance and Operation means all reasonable expenses incurred by the City
in causing the System of the City to be operated and maintained in good repair, working order
and condition, but shall not include any payments for debt service or into reserve funds,
depreciation or taxes levied or imposed by the City or paymentsto the City in lieu of taxes, or
capital additions or capital replacements to the System.
Council means the City Council as the general legislative authority of the City as the
sameshallbedulyand regularly constituted from timeto time.
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Debt Service means,for any period oftime,
(a) with respect to any outstanding Original Issue Discount Bonds or Capital
Appreciation Bonds which are not designated as Balloon Maturity Bonds in the ordinance
authorizing their issuance,the principal amount thereof shall be equal to the Accreted Value
thereof maturing or scheduled for redemption in such period, and the interest payable during
such period;
(b) with respect to any outstanding Fixed Rate Bonds, an amount equal to (l)the
principal amount ofsuch Fixed Rate Bonds due or subject to mandatory redemption during such
period and for which no sinking fund installments have been established,(2)the amount of any
payments required to be made during such period into any sinking fund established for the
payment of any such Fixed Rate Bonds,plus (3)all interest payable during such period on any
such outstanding Fixed Rate Bonds and with respect to Fixed Rate Bonds with mandatory
sinking fund requirements,calculated on the assumption that mandatory sinking fund
installmentswill be appliedto the redemption or retirement ofsuch FixedRate Bondsonthe date
specified in the ordinanceauthorizingsuch Fixed Rate Bonds; and
(c) with respect to all other series of Parity Bonds, other than Fixed Rate Bonds,
Original Issue Discount Bonds or Capital Appreciation Bonds,specifically including but not
limited to Balloon Maturity Bonds and Parity Bonds bearing variable rates ofinterest, an amount
for any period equal to the amount which would have been payable for principal and interest on
such Parity Bonds during such period computed on the assumption that the amount of Parity
Bonds as of the date of such computation would be amortized (l)in accordance with the
mandatory redemption provisions,if any, set forth in the ordinance authorizing the issuance of
such Parity Bonds, or if mandatory redemption provisions are not provided,during a period
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commencing on the date of computation and ending on the date 30 years after the date of
issuance (2) at an interest rate equal to the yield to maturity set forth in the 40-Bond Index
published in the edition of The Bond Buyer (or comparable publication or such other similar
index selected by the City) and published within ten days prior to the date of calculation or,if
such calculation is being made in connection with the certificate required by Section 11 hereof,
then within ten days ofsuch certificate,(iii) to provide for essentially level annual debt service of
principal and interest over such period. Debt Service shall be net of any interest funded out of
Bond proceeds. Debt Service shall include reimbursement obligations to providers of Qualified
Letters ofCredit and/or Qualified Insurance to the extent authorized by ordinance.
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
pursuantto Section 5 hereof.
Finance Director means the duly qualified,appointed and acting Finance Director ofthe
City or any other officer who succeeds to the dutiesnow delegated to that office.
Fixed Rate Bonds means those Parity Bonds other than Capital Appreciation Bonds,
Original Issue Discount Bonds or Balloon Maturity Bonds issued under an ordinance in which
the rate ofinterest on such Parity Bonds is fixed and determinable through their final maturity or
for a specified period of time.If so providedinthe ordinance authorizing their issuance,Parity
Bondsmaybe deemedto beFixedRate Bondsfor onlya portion of theirterm.
Future Parity Bonds means any water and sewer revenue bonds which the City may
hereafter issue having a lienupon the Revenue of the System for the paymentof the principal
thereofand interest thereon equal to the lien upon the Revenue of the System ofthe Bonds and
the 2004 Bonds.
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General Fund is the City's operating fund,accounting for all financial resources of the
general government,exceptthose required to be accounted for in anotherfund.
Government Obligations has the meaning given such term in RCW Ch. 39.53, as such
chaptermaybehereafteramended or restated.
Investment Earnings means all earnings in any form whatsoever derived from
Investments.
Investments means any investments permitted to the City by law ofmoney required to be
deposited in anyfund or account oftheWater/Sewer Fund oftheCityexceptmoneydeposited in
any escrow accountfor the purposeof refundingany ParityBonds and except any moneywhich
is subjectto paymentto the UnitedStatesTreasuryunderthe rebateprovisions ofthe Code.
Letter ofRepresentations means the Blanket Issuer Letter of Representations from the
CitytoDTC.
Maximum Annual Debt Service means highest dollar amount of Annual Debt Service in
any fiscal year or Base Period for all outstanding Parity Bonds and the Bonds and/or for all
subordinate lien evidences of indebtedness secured by Revenue of the System,as the context
requires.
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 bythe City Representative.
MSRB means the Municipal Securities Rulemaking Board.
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Net Proceedst when used with referenceto the Bonds, means the principal amount ofthe
Bonds, plus accrued interestand original issue premium,if any, andless originalissue discount
and proceeds,ifany, depositedin the Reserve Fund-2011.
Net Revenue means Revenue ofthe System less Costs ofMaintenanceand Operation.
Original Issue Discount Bonds means Parity Bonds which are sold at an initial public
offering price of less than 95%of their face value and which are specifically designated as
Original Issue Discount Bonds in the ordinanceauthorizingtheir issuance.
Parity Bonds means the 2004 Bonds,the Bonds and any Future Parity Bonds.
Parity Requirement means Net Revenue equal to or greaterthan:
(a) 125%of Maximum Annual Debt Service for all Parity Bonds computed by
deducting from Annual Debt Service the Annual Debt Service for each series or issue of Parity
Bonds which is covered by ULID Assessments,and
(b) 100%of Maximum Annual Debt Service for all subordinate lien evidences of
indebtedness secured by Revenue ofthe System.
In determining the amount of Annual Debt Service "covered by ULID Assessments",Annual
Debt Service for each future year is reduced by the dollar amount of ULID Assessments
projected to be received during such future year,and the remaining outstanding ULID
Assessments are assumed to be paid in the remaining number of annual installments with no
prepayments.
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 propertyin atrade or business by a Private Person
if such use is other than as a member of the general public. Private Person Use includes
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ownership ofthe property by the PrivatePerson as well asother 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.Useof property asa member ofthe general publicincludes
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 paidby any Private Person who desires to rentthe property.Use of property by nonprofit
community groups or community recreational groupsisnottreatedas Private Person Useif 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 custodialexpenses.
Project meansthe plan ofimprovements to the Systemauthorized in Section3 hereof.
Project Fund means the Operations Complex Construction Fund #472 within the
Water/Sewer Fund ofthe City.
Qualified Insurance means any non-cancelable municipal bond insurance policy or
surety bond issued by any insurance company licensed to conduct an insurance business in any
state of the United States (or by a service corporation acting on behalf of one or more such
insurance companies)which insurance company or companies,as ofthe time ofissuance ofsuch
policy or surety bond,are currently rated in one of the two highest Rating Categories by both
Moody's and S&P.
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
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issuance of such letter ofcredit, is currently rated in one of the two highest Rating Categories by
either Moody's or S&P.
Rate Covenant means Net Revenue in each fiscal year together with ULID Assessments
received in each fiscal year at least equal to the sum of(a) 125%of the amounts required in such
fiscal year to be paid as scheduled debt service (principal and interest) on all Parity Bonds minus
the amount of ULID Assessments collected in such year and (b)100%of the amount of ULID
Assessments received in'such fiscal year.
RatingAgency means Moody's or S&P.
Rating Category means the generic rating categories of the Rating Agency, without
regard to any refinement or gradation of such rating category by a numerical modifier or
otherwise.
Registrar means 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 ofthe Bonds, and paying the principal of,premium,ifany, and interest on the Bonds.
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-2011 means the 2011 Bond Reserve Fund #451 maintained within the
Water/Sewer Fund.
Reserve Requirement-2011 means the lesser of (i) Maximum Annual Debt Servicewith
respectto the Bondsand (ii)1.25 times average Annual Debt Service withrespectto the Bonds;
provided,however,thatthe Reserve Requirement-2011 shallnot exceed an amount equal to 10%
ofthe aggregate ofthe initialparamount ofthe Bonds.
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Revenue Fund means the Water/Sewer Fund #410 within the Water/Sewer Fund
maintained by the Finance Director of the City and shall also include any other fund ofthe City
into which the Revenue ofthe System is deposited.
Revenue ofthe System or Revenue means all of the earnings and revenues received by
the City from the maintenance and operation of the System and connection and capital
improvement charges collected for the purpose of defraying the cost of capital facilities of the
System,includingInvestment Earnings,butexcluding government grants,proceedsfromthe sale
of System property, City taxes collectedby or through the System, principal proceeds of bonds
and earnings or proceeds from any investments in a trust,defeasance or escrow fund created to
defease or refund System obligations (until commingled with other earnings and revenues of the
System) or held in a special account for the purpose of paying a rebate to the United States
Government under the Code.Revenue of the System shall also include any federal or state
reimbursements of operating expenses to the extent such expenses are included as Costs of
Maintenance and Operation;provided,however,that Revenue of the System shall not include
ULID Assessments.Certain Investment Earnings may be transferred from the Revenue Fund to
the General Fund ofthe City, subject to the priorities established in Section 7 ofthis ordinance.
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 Ratings,its successors and their assigns,and,if such
corporation shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency,S&P shall be deemed to refer to any other nationally recognized
securities rating agency designated bythe City Representative.
SEC means the U.S. Securities and Exchange Commission.
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System means the City's combined system of water supply and distribution,sanitary
sewage disposal and storm drainage,as the same may be added to, improved and extended for as
long as any Parity Bonds are outstanding. The term System also shall include any other utility
that may in the future be combined with the System.
2004 Bonds mean the City's outstanding Water and Sewer Revenue Bonds,2004,issued
under date ofOctober 1, 2004,pursuant to Ordinance No.2177.
2004 Insurance Policy means the financial guaranty insurance policy with respect to the
Bonds issued by the Ambac Assurance Corporation, insuring the payment when due of the
principal ofand interest on the 2004 Bonds.
ULID means a utility local improvement district ofthe City. The City does not currently
have any existing utility local improvement districts.
ULID Assessments means the assessments levied in all ULIDs,the assessments in which
are payable into the Bond Fund, and shall include installments thereof and interest and any
penalties thereon.
Underwriter means Martin Nelson & Co., Inc., Seattle,Washington.
Variable Interest Rate means a variable interest rate or rates to be borne by a series of
Future Parity Bonds or any one or more maturities within a series of Future Parity Bonds. The
method ofcomputing such a variable interest rate shall be specified in the ordinance authorizing
such Future Parity Bonds, which ordinance also shall specify either (a)the particular period or
periods oftimeor manner of determining suchperiodor periods oftimefor which each value of
such variable interest rate shall remain in effect or (b) the time or times upon which any change
in such variable interest rate shall become effective.
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Variable Interest Rate Bonds means,for any period of time,Future Parity Bonds which
bear a Variable Interest Rate during that period,except that Future Parity Bonds the interest rate
or rates on which shall have been fixed for the remainder ofthe term thereofno longer shall be
deemed to be Variable Interest Rate Bonds.
Water/Sewer Fundmeans the proprietary fund ofthe City that accounts for the activities
ofthe System.
Rulesof Interpretation.Inthis ordinance,unlessthecontext 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 ofthis ordinance;
(b) Words of the masculine gender shall meanand include correlativewords of the
feminine and neuter genders and words importing the singular number shall mean and include
the plural number and vice versa;
(c) Wordsimportingpersonsshallinclude firms,associations,partnerships(including
limited partnerships),trusts,corporations andotherlegalentities,including publicbodies,aswell
as natural persons;
(d) Any headings precedingthe text ofthe several sections ofthis ordinance, and any
table ofcontentsor marginal notes appended to copies hereof, shall be solely for convenienceof
reference and shall not constitute a part of this ordinance,nor shall they affect its meaning,
construction or effect;and
(e) All references herein to "articles,""sections" and other subdivisions or clauses are
to the correspondingarticles, sections,subdivisions or clauseshereof.
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Section 2.Compliance with Parity Conditions The Council hereby finds and
determines,as required by Section 11 ofOrdinance No.2177,as follows:
(1) That the Bonds are being issued for the purpose of providing funds to acquire,
construct,reconstruct, install, or replace equipment,facilities,additions,betterments, or other
capital improvementsto the System for which it is authorizedby law to issue revenue bonds;
(2) The City is not and has not been in default ofits Rate Covenant for the fiscal year
ending December 31,2010;
(3) The Reserve Requirement-2011 shall be met no later than the date of issuance of
the Bonds;and
(4) At the time ofthe issuance and delivery ofthe Bonds, there will have been filed a
certificate of the Consultant demonstrating fulfillment of Section 11(D) or the City
Representative demonstrating fulfillment of Section 11(C)of Ordinance No.2177.
The applicable parity conditions set forth in Ordinance No. 2177 having been complied
with,the Bonds shall be issued on a parity oflien with the 2004 Bonds.
The City hereby further covenants and agrees that the Bonds will not be issued and
delivered to the purchasers thereof as bonds on a parity with the 2004 Bonds until the certificate
required herein, in form and contents satisfactoryto the Cityand its counsel, has been filed with
the City.
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Section 3. Findings and Purposes:Plan of Additions and Betterments to the System.
The Council hereby finds that the public interest, welfare and convenience require the
construction, acquisition and installation of certainadditions and betterments to and extensions
of the City's water and sewer system (the "Project")and that said improvements are legally
required and/or economically sound,and will contribute to the conduct of the business of the
System in anefficient manner.
The City shall provide all equipment, connections and appurtenances together with all
work as may be incidental and necessary to complete the Project.The Project facilities shallbe
integrated into the System as required to providea fully operational facility.
The City may make such changes in or additions to the Projector in the construction or
design ofother facilities ofthe System asmay be foundnecessaryor desirable.Implementation
or completion of any specified improvement shall not be required if the Council determines that,
due to substantially changed circumstances, it has become advisable or impractical.If the
Projecthas eitherbeen completed, orits completion duly provided for,or its completion found to
be impractical,the City may apply the Bond proceeds or any portion thereof to other
improvements to the System, as the Council in its discretion shall determine. In the event that
the proceed of sale of the Bonds, plus any other moneys of the City legally available, are
insufficient to accomplish all of the Project provided by this section, the City shall use the
available funds for paying the cost of those improvements- for which the Bonds were approved,
deemed by the Council most necessary and to the best interest ofthe City.
The City shall acquire by purchase, lease or condemnation,all property, both real and
personal, or any interest therein, or rights-of-way and easements that may be found necessary to
acquire, construct and install the Project.
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The estimated cost of this plan of additions and betterments and all costs incidental
thereto (including costs of issuance ofthe Bonds and funding ofthe Reserve Requirement-2011),
is hereby declared to be as nearly as practicable the sum of $5,640,000, which shall be provided
out ofthe proceeds ofthe sale ofthe Bonds and other City funds.
Section 4.Authorization and Description of Bonds. The City shall now issue and
sell $4,905,000 of water and sewer revenue bonds (the "Bonds") for the purpose of providing
funds required to pay the cost ofthe Project.
The Bonds shall be designated as the "City ofMoses Lake,Washington Water and Sewer
Revenue Bonds,2011"(the "Bonds");shall be dated as of their date of initial delivery; shall be
fullyregistered as to both principal and interest; shall be in the denomination of $5,000 each, or
anyintegral multiplethereof,providedthatno Bond shallrepresentmore than onematurity;shall
be numbered separately in such manner and with any additional designation as the Registrar
deems necessary for purposes of identification; and shall bear interest from their date payable
semiannually on the first days ofeach March and September, commencing on March 1, 2012, at
the following per annuminterestrates andshall mature on September1 ofthe followingyears in
the following principal amounts:
Maturity Years
(September 1)Principal Amounts
$455,000
Interest Rates
2012 0.65%
2013 460,000 0.85
2014 460,000 2.00
2015 470,000 2.00
2016 480,000 2.25
2017 490,000 2.25
2018 500,000 2.75
2019 515,000 2.75
2020 530,000 3.25
2021 545,000 3.25
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The Bonds shall be obligations only of the Bond Fund and shall be payable and secured
as provided herein.The Bonds shall notbe general obligations oftheCity.
Section 5.Registration.Exchange and Payments.
(a)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
appointmentofstate fiscal agencies.The City shallcauseabondregisterto be maintained by the
Registrar.So long as any Bonds remain outstanding,the Registrar shall make all necessary
provisions to permitthe exchange or registration or transfer of Bonds at its principal corporate
trust office.The Registrar may be removed at any time at the option ofthe City Representative
upon prior notice to the Registrar and a successor Registrar appointed by the City
Representative. No resignation or removal of the Registrar shall be effective until a successor
shallhave been appointed and until the successorRegistrarshallhave accepted the duties ofthe
Registrar hereunder.The Registrar is authorized,on behalf of the City, to authenticate and
deliver Bonds transferredorexchanged in accordancewith the provisions ofsuch Bonds andthis
ordinance and to carry out all of the Registrar's powers and duties under this ordinance.The
Registrar shall be responsible for its representations contained in the Certificate of
Authentication ofthe Bonds.
(b)Registered Ownership.The City and the Registrar, each in its discretion, may
deem andtreat the Registered Owner ofeachBond as the absoluteowner thereof for all purposes
(except as provided in Section 18 ofthis ordinance), and neither the City nor the Registrar shall
be affected by any notice to the contrary.Payment of any such Bond shall be made only as
described in Section 5(h) hereof, but such Bond may be transferred as herein provided.All such
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payments made as described in Section 5(h) shall be valid and shall satisfy and discharge the
liability ofthe City upon suchBond to the extent ofthe amount oramounts so paid.
(c)DTC Acceptance/Letters ofRepresentations.The Bonds initially shall be held in
fully immobilized form by DTC acting as depository.To induce DTC to accept the Bonds as
eligible for depositat DTC, the City has executedand delivered to DTC a Blanket Issuer Letter
ofRepresentations.Neitherthe City northe Registrar will have anyresponsibilityor obligation
to DTC participants or the persons for whom they act as nominees (or the participants of any
successor depository or those for who any such successor acts as nominee) 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 RegisteredOwners under this ordinance (except
such notices as shall be required to be given by the City to the Registrar or to DTC (or any
successor depository)), or any consent given or other action taken by DTC (or any successor
depository)as the RegisteredOwner.For so long as any Bonds are held in fully-immobilized
form hereunder,DTC or its successor depository shallbe deemed to be the Registered Owner for
all purposes hereunder (except for Section 18 hereof),andall 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, except as provided in Section 18 of this
ordinance.
If any Bond shall be duly presented for payment and funds have not beenduly provided
by the City on such applicable date,then interest shall continueto accrue thereafteronthe unpaid
principal thereofatthe rate stated on suchBonduntilit is paid.
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(d)Use ofDepository.
(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 immobilized Bonds, orany portions thereof,may not thereafter be
transferred except (A) to any successor of DTC or its nominee, provided that any such successor
shall be qualifiedunderany applicable laws to providethe service proposed to be provided by it;
(B)to any substitutedepository appointed by the City Representative pursuantto subsection (2)
below or such substitute depository's successor; or (C)to any person as provided in
subsection (4)below.
(2) Upon the resignation ofDTC or its successor(or any substitute depository
orits successor) from its functions asdepositoryor a determinationby the City Representativeto
discontinue the system of book entry transfers through DTC or its successor (or any substitute
depository or its successor),the City Representative may hereafter appoint a substitute
depository.Any such substitute depository shall be qualified under any applicable laws to
providethe servicesproposedto be provided by it.
(3) In the case of any transfer pursuantto clause (A) or (B)of subsection (1)
above, the Registrar shall, upon receipt ofall outstanding Bonds,together with a written request
of the City Representative,issue a single new Bond for each maturity then outstanding,
registered in the name of such successoror such substitute depository, or their nominees, as the
casemay be, allas specified in suchwrittenrequest ofthe City Representative.
(4) In the event that (A) DTC or its successor (or substitute depository or its
successor)resigns from its functions asdepository, and no substitute depository can be obtained,
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or (B) the City Representative determines that it is in the best interest ofthe beneficial owners of
the Bonds that such owners be able to obtain such bonds in the form of Bond certificates,the
ownership ofsuch Bonds may then be transferred to any person or entity as herein provided,and
shall no longer be held in fully-immobilized form. The City Representative shall deliver a
written request to the Registrar,together with a supply of definitive Bonds,to issue Bonds as
herein provided in any authorized denomination. Upon receipt by the Registrar of all then
outstanding Bonds together with a written request of the City Representative to the Registrar,
new Bonds shall be issued in the appropriate denominations and registered in the names of such
persons as are requested in suchwritten request.
(e)Registration ofTransfer of Ownership or Exchange;Change in Denominations.
The transfer ofany Bond mayberegistered and Bonds may be exchanged,but no transfer ofany
such Bond shall be valid unless it is surrendered to the 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 Registrar. Upon such surrender, the
Registrar shall cancel the surrendered Bond and shall authenticate and deliver, without charge to
the Registered Owner or transferee therefor,a new Bond (or Bonds at the option of the new
Registered Owner)of the same date, maturity and interest rate and 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
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 Registrar shall
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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 suchBond is to be redeemed.
(f)Registrars Ownership of Bonds.The Registrar may become the Registered
Owner of any Bond with the same rights it would have if it were not the Registrar, and to the
extent permitted by law, may act as depository for and permit any of its officers or directors to
act as member of, or in any other capacity with respect to, any committee formed to protect the
right ofthe RegisteredOwners ofBonds.
(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 complieswiththe provisionsof Section149 ofthe Code.
(h)Place and Medium ofPayment.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 ofa year of360 days and twelve 30-day months.For so long as all Bonds
are in fully immobilized form, payments of principal and interest thereon shall be made as
provided in accordance with the operational arrangements of DTC referred to in the Letter of
Representations.In the eventthat the Bonds are no longerin fully immobilized form, intereston
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 ofmore
than $1,000,000 of Bonds (received by the Registrar at least 15 days prior to the applicable
payment date), such payment shall be made by the Registrar by wire transfer to the account
within the United States designated by the Registered Owner.Principal of the Bonds shall be
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payable upon presentation and surrender of such Bonds by the Registered Owners at the
principal office ofthe Registrar.
Section 6.Redemption and Purchase.
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(a)No Redemption.The Bonds are not subjectto redemption prior to their scheduled
maturity.
(b)Purchase ofBondsfor Retirement.The City reserves the right to use at any time
any surplus Revenue of the System available after providing for the payments required by
paragraphs First through Fifth of Section 7 of this ordinance, or other available funds, to
purchase any ofthe Bonds at any price deemed reasonable by the City to purchase for retirement
any ofthe Bonds offered to the City at any price deemed reasonable to the City.
(c)Effect ofPurchase.To the extentthat the Cityshallhave purchased any Balloon
Maturity Bondssincethe last scheduled mandatory redemption of suchBalloon Maturity Bonds,/^%
the City may reduce the principal amount of the Balloon Maturity Bonds to be redeemed in like
principal amount. Such reduction may be applied in the year specified by the City.
Section 7. Revenue Fund and Priority of Application of Revenue. The City
maintains the Water/Sewer Fund as a separate enterprise fund of the City.All Revenue ofthe
System is deposited in the Water/Sewer Fund #410 within the Water/Sewer Fund (the "Revenue
Fund").The Water/Sewer Fund shall be considered a combined fund for purposes ofmeasuring
compliance with the Rate Covenant and the Parity Requirement.Notwithstanding the foregoing,
the City Finance Director may maintain such separate funds and accounts in such names and
under such additional designations as shall be required to comply with the uniform system of
accounting established by the State Auditor from time to time. The Revenue Fund shall be held
separate and apart from all other funds and accounts of the City and the Revenue of the System •-n.
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deposited in such Fund shall be used only for the following purposes and in the following order
ofpriority:
First, to pay the Costs ofMaintenance and Operation ofthe System;
Second,to pay the interest on any Parity Bonds, including reimbursements to the issuer
of a Qualified Letter of Credit or Qualified Insurance if the Qualified Letter of Credit or
Qualified Insurance secures the payment of interest on Parity Bonds and the ordinance
authorizing such Parity Bonds provides for such reimbursement;
Third,to pay the principal ofany Parity Bonds, including reimbursements to the issuer of
a Qualified Letter of Credit or Qualified Insurance ifthe Qualified Letter ofCredit or Qualified
Insurance secures the payment ofprincipal of Parity Bonds and the ordinance authorizing such
Parity Bonds provides for such reimbursement;
Fourth,to make all paymentsrequired to bemade intothe Reserve Fund-2011 and to any
reserve fund created in the future for the payment of debt service on Future Parity Bonds,
including reimbursements to the issuer of a Qualified Letter of Credit or Qualified Insurance if
the Qualified Letter of Credit or Qualified Insurance has been issued to fund the Reserve
Requirement-2011 and/or the reserve requirement(s)for any Future Parity Bonds and the
ordinance authorizing such Parity Bonds provides for such reimbursement;
Fifth,to make all payments required to be made into any revenue bond redemption fund
or revenue warrant redemption fund and debt service fund or reserve fund created to pay and
secure the payment of the principal of and interest on any other revenue bonds or revenue
warrants of the City havinga lien upon the Revenue ofthe Systemjunior and inferiorto the lien
thereonforthe paymentoftheprincipalofandintereston Parity Bonds;and
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Sixth, to retire by redemption or purchase any outstanding revenue bonds or revenue
warrants of the City, to make necessary additions,betterments,improvements and repairs to or
extensions and replacements ofthe System,or for any other lawful City purposes.
The City may transfer any money from any funds or accounts of the System legally
available therefor, except bond redemption funds, refunding escrow funds or defeasance funds,
to meet the required payments to be made into the Bond Fund.
Section 8.Bond Fund and Reserve Fund.The Finance Director has established the
2011 Bond Fund #450 within the Water/Sewer Fund for the payment of the debt service on the
Bonds, and shall establish separate funds in the future for the payment of debt service on Future
Parity Bonds (collectively,the "Bond Fund"). The Finance Director also has established the
2011 Bond Reserve Fund #451 within the Water/Sewer Fund for the purpose of securing the
repayment oftheBonds(the "Reserve Fund-2011").
(a)Payments intoBondFund.The Bond Fundshall be maintained for the purpose of
payingthe principal ofand intereston all Parity Bonds.
As long as any Parity Bond remains outstanding, the City hereby irrevocably obligates
and binds itself to set aside and pay from the Revenue Fund into the Bond Fund those amounts
necessary, togetherwith such other funds as are on hand and available in the BondFund, to pay
the interest or principal and interest next coming due on outstanding Parity Bonds. Such
payments from the Revenue Fund to the Bond Fund shall be made in a fixed amount without
regardto anyfixedproportion following the closinganddelivery ofthe Bondson or beforeeach
date on which an installment of interest or principal and interest falls due on Parity Bonds equal
to the installmentof interest or principal and interest.
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The City Finance Director is hereby authorized and directed and the City hereby
obligatesand binds itself to set asideand pay into the Bond Fund allULID Assessments asthe
same are collected.
(b)Payments into Reserve Fund-2011.The Reserve Fund-2011 shall be maintained
forthe purpose of securing the payment ofthe principal ofand interest on the Bonds. The City
covenants and agreesthat from andafterthe closing and delivery ofthe Bonds,it will atalltimes
maintain an amount in the Reserve Fund-2011 at least equal to the Reserve Requirement-2011
except for withdrawals therefrom authorized hereinafter,at all times for so long as any Bonds
remain outstanding.The Reserve Requirement-2011 may be maintained by deposits of cash, a
Qualified Letter of Credit or Qualified Insurance,or a combination of the foregoing.In
computingthe amount on handinthe Reserve Fund-2011,QualifiedInsurance and/oraQualified
Letter ofCredit shall be valued atthe face amount thereof, and all other obligations purchasedas
an investment of moneys therein shall be valued at cost.As used herein, the term "cash" shall
include U.S.currency, cash equivalents and evidences thereof,including demand deposits,
certified or cashier's check; and the deposit to the Reserve Fund-2011 may be satisfied initially
bythe transfer ofqualified investments to such account.
If the balances on hand in the Reserve Fund-2011 are sufficient to satisfy the Reserve
Requirement-2011,interest earnings shall be applied as provided in the following sentences.
Whenever there is a sufficient amount in the Bond Fund,including the Reserve Fund-2011 to
pay the principal ofand interest on all outstanding Bonds, the money in the Reserve Fund-2011
may be used to pay such principalandinterest.As long asthe money left remaining on deposit
in the Reserve Fund-2011 is equal to the Reserve Requirement-2011,money in the Reserve
Fund-2011 may be transferred to the Bond Fund and used to pay the principal ofand intereston
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the Bonds as the same becomes due and payable.The City also may transfer out of the Reserve
Fund-2011 any money required in order to prevent any Bonds from becoming "arbitrage bonds"
under the Code.
If a deficiency in the Bond Fund for the payment of debt service on the Bonds shall
occur, such deficiency shall be made up from the Reserve Fund-2011 by the withdrawal ofcash
therefrom for that purpose and by the sale or redemption ofobligations held in the Reserve Fund-
2011,in such amounts as will provide cash in the Reserve Fund sufficient to make up any such
deficiency with respect to the Bonds, and if a deficiency still exists immediately prior to an
interest payment date and after the withdrawal of cash, the City shall then draw from any
Qualified Letter ofCredit or Qualified Insurance for the Bonds in sufficient amount to make up
the deficiency.Such draw shall be made at such times and under such conditions as the
agreement for such Qualified Letter ofCredit or such Qualified Insurance shall provide.
In making the payments and credits to the Reserve Fund-2011 required by this
Section 8(b), to the extent that the City has obtained Qualified Insurance or a Qualified Letter of
Credit for specific amounts required pursuant to this section to be paid out ofthe Reserve Fund-
2011 such amounts so covered by Qualified Insurance or a Qualified Letter of Credit shall be
credited against the amounts required to be maintained in the Reserve Fund-2011 by this
Section 8(b)to the extent that such payments and credits to be made are insured by an insurance
company,orguaranteedbya letterof creditfroma financial institution.
Any deficiency created in the Reserve Fund by reason of any such withdrawal shall then
be made up within one year of the date of withdrawal from Net Revenue or from ULID
Assessments (or out of any other moneys on hand legally available for such purpose) after
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making necessary provision for the payments required to be made into the Bond Fund within
such year.
Any Qualified Letterof Credit or Qualified Insurance shallnot be cancelable on lessthan
30 days' notice to the City. In the event of any cancellation,the Reserve Fund-2011 shall be
funded as if the Bonds that remain outstanding had been issued on the date of such notice of
cancellation.
In the event that the City elects to meet the Reserve Requirement-2011 through the use of
a Qualified Letterof Credit,Qualified Insurance or other equivalent credit enhancement device,
the City may contract with the entity providing such Qualified Letter of Credit,Qualified
Insurance or other equivalent credit enhancement device that the City's reimbursement
obligation,if any,to such entity shall be made from payments of principal andintereston Parity
Bondsfromthe Citysubjectonlytothe prior lienthereonforthe paymentsrequiredhereunderto
be made to registered owners ofParity Bonds.
(c)Reserve Funds for Future Parity Bonds.In the event that the City issues Future
Parity Bonds,the ordinance authorizing their issuance shall provide for the establishment of a
reserve fund for such series ("a future reserve fund") and shall provide for the funding of the
future reserve fund in an amount equal to the lesser of (i)Maximum Annual Debt Service with
respectto the proposedissue of FutureParity Bondsor (ii) 125%ofaverage annual debt service,
but in no event in an amount equalto 10%ofthe proceeds ofthe proposed issue ofFuture Parity
Bonds (the "Future Parity Bond reserve requirement"). Each future reserve fund shall be
maintained for the purpose of securing the payment of the principal of and interest on the
respective series of Future Parity Bonds. A Future Parity Bond reserve requirement may be
maintained by deposits of cash, a Qualified Letter of Credit or Qualified Insurance, or a
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combination of the foregoing.In computing the amount on hand in the future reserve fund,
Qualified Insurance and/or a Qualified Letter of Credit shall be valued at the face amount
thereof,and all other obligations purchased as an investment ofmoneys therein shall be valued at
cost. As used herein, the term "cash" shall include U.S. currency, cash equivalents and
evidencesthereof, including demanddeposits, certifiedor cashier's check; and the depositto the
future reserve fund may be satisfied initially by the transfer of qualified investments to such
account.
Ifthe balances on hand in the future reserve fund are sufficient to satisfy its Future Parity
Bond reserve requirement, interest earnings shall be applied as provided in the following
sentences.Whenever there is a sufficient amount in the Bond Fund,including the future reserve
fund to pay the principal of and interest on the respective series of outstanding Future Parity
Bonds, the money in the future reserve fund may be used to pay such principal and interest. As
long as the money left remaining on deposit in the future reserve fund is equal to the respective
Future Parity Bond reserve requirement, money in the future reserve fund may be transferred to
the Bond Fund and used to pay the principal ofand interest on the series of Future Parity Bonds
as the same becomes due and payable. The City also may transfer out of a future reserve fund
any money required in order to prevent any Future Parity Bonds from becoming "arbitrage
bonds"under the Code.
(d)Priority ofLienofPayments intoBondFundand Reserve Fund.The amounts so
pledged to be paid into the Bond Fund and the Reserve Fund-2011 and any other reserve fund
created for the benefit of outstanding Parity Bonds from the Revenue Fund and from ULID
Assessments are hereby declaredto be a prior lien and charge upon the Revenue of the System
and ULID Assessmentssuperiorto all other charges ofanykind or nature whatsoeverexceptthe
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Costs of Maintenance and Operation ofthe System,and except that the amounts so pledged are
of equal liento the charges upon such Revenue and ULID Assessments forthe payment ofthe
principal ofand interest on any Future Parity Bonds.
(e)Application and Investment of Moneys in the Bond Fund and Reserve Fund.
Money in the Bond Fundand Reserve Fund-2011 may be kept in cashor invested as permitted
by law.Investments inthe Bond Fund shall mature prior to the dateon which suchmoney shall
be needed for required interest or principal payments (for investments in the Bond Fund) or
having a guaranteed redemption price priorto maturity.Investments in the Reserve Fund-2011
shall mature not laterthan the last maturity ofany then outstanding Bonds.
(f)Sufficiency ofRevenues.The City Councilhereby finds that in fixing the amounts
to be paid intothe Bond Fund andthe Reserve Fund-2011 out ofthe Revenue of the System, it
has exercised due regard for the Costs of Maintenanceand Operation and has not obligated the
City to set aside and pay into the Bond Fund andthe Reserve Fund-2011 and any reserve fund
created for outstandingParityBonds a greateramount of such Revenue than in its judgment will
be available over and above the Costs ofMaintenance andOperation.
Section 9.Specific Covenants.
(a)Rate Covenant.The City will establish, maintain and collect such rates and
charges for service ofits System for so long as any Bonds are outstanding as will maintain the
Rate Covenant.
(b)SystemMaintenance.The City will at alltimes maintain and keep the System in
good repair,working order and condition, and also will at alltimes operate such utility andthe
business in connection therewith in an efficient manner and at a reasonable cost.
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(c)Disposal ofProperties.The City will not mortgage, sell, lease, or in any manner
encumber or dispose of all or substantially all the property of the System (voluntarily or
involuntarily),unless provision is made for payment into the Bond Fund of a sum sufficient to
pay the principal of, premium,if any, and interest on all outstanding bonds payable therefrom,
nor will it mortgage, sell, lease, or in any manner encumber or dispose of (including but not
limited to a disposition by transfer to another public or private organization)voluntarily or
involuntarily any part of the System that is used, useful and material to the operation of the
System unless
(1) the City certifies,based upon reasonable expectations, that the remaining
assets ofthe System shall be sufficientto continue regular operations ofthe City on a financially
sound basis for a period ofat least five years and
(2) provision is made for replacement thereof or for payment into the Bond
Fund ofthe total amount ofrevenue received which shall not be less than an amount which shall
bear the same ratio to the amount ofoutstanding Parity Bonds as the greater of
(A) the Net Revenue available for Debt Service for such outstanding
Parity Bonds for the 12 months preceding such sale, lease,encumbrance or disposal from the
portion of the System sold, leased,encumbered or disposed of bears to the Net Revenue
available for Debt Service for such Parity Bonds from the entire System for the same period;
(B) the Revenue ofthe System for the 12 months preceding such sale,
lease,encumbrance or disposal from the portion of the System sold, leased, encumbered or
disposed ofbears to the Revenue ofthe System for the same period;
(C) the proportion of assets (on a depreciated basis) allocable to the
assets being sold, leased, encumberedor disposed ofbears to the total assets ofthe System;or
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(D) the proportion of customers of the City allocable to the assets
being sold, leased,encumbered or disposed of bears to the total number of customers of the
System,
provided,however,that the Citymaydisposeof anyportion ofthe facilities of the System up to
an aggregate of five percent of the book value of the total assets of the System without the
requirementfor any depositto theBondFundas hereinabove provided.
Any such moneys so paid into the Bond Fund shall be used to retire such outstanding
Parity Bonds at the earliest possible date. Any money received by the City as condemnation
awards, insurance proceeds or the proceeds ofsale,if not deposited to the Bond Fund, shall be
used for the replacement offacilities ofthe System.
(d)BooksandRecords.The City will, while any ofthe Bonds remains outstanding,
keep proper and separate accounts and records in which complete and separate entries shall be
made of all transactions relating to the System, 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 System in reasonable
detail covering any fiscal year, showing the financial condition of the water and sewer
departments and compliance with the terms and conditions ofthis ordinance, not more than 150
days after the close of such fiscal 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 System and all
records, accounts and data ofthe City relating thereto. Upon request ofany owner ofany ofsaid
Bonds, it will also furnish to such owner a copy of the most recently completed audit of the
City's accountsby the StateAuditor ofWashington or independent certified public accountant.
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(e)No Free Service.The City will not furnish water or sanitary sewerage disposal
service to any customer whatsoever free of charge (except to aid the poor or infirm,to provide
for resource conservation or to provide for the proper handling ofhazardous materials)and will
promptly takelegal actionto enforcecollection ofall delinquentaccounts.
(f)PropertyInsurance.The City will at all times carry fire and extended coverage
and such other forms of insurance on the buildings, equipment, facilities and properties of the
System,if such insurance is obtainable at reasonable rates and upon reasonable conditions,
against such risks, in such amounts, and with such deductibles as the Council shall deem
necessary for the protection ofthe System and the owners ofall outstanding Parity Bonds.
(g)Liability Insurance.The City will at all times keep and arrange to keep in full
force and effect policies of public liability and property damage insurance which will protect the
City against anyone claiming damages of any kind or nature arising out of the operation of the
System,if such insurance is obtainable at reasonable rates and upon reasonable conditions, in
such amounts and with such deductibles as the Council shall deem necessary for the protection
ofthe City and the owners ofthe outstanding Parity Bonds.
(h)Delinquencies ofAccounts.The Citywill, on or before March 1 of each calendar
year, determine all accounts that are delinquent and will take all necessary action to enforce
payment ofany such delinquencies.
(i)ULID Assessments.All ULID Assessments shall be paid into the Bond Fundand
shall be used to pay and securethe payment of the principal of and interest on the Bondsand
Future ParityBonds. Nothing in this ordinanceor this sectionshall be construedto prohibitthe
Cityfrom issuing water,sewerorwaterand sewerrevenue bondsjuniorin lien to the Bonds and
pledging as security for their payment assessments levied in any ULID which may have been
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specifically created to pay part ofthe cost of improvements to the System for which those junior
lien bonds were specifically issued.
Section 10.Tax Covenants. The City covenants that it will not take or permit to be
taken on its behalf any action that would adversely affect the exemption from federal income
taxation of the interest on the Bonds and will take or require to be taken such acts as may
reasonably be within its ability and as may from time to time be required under applicable law to
continue the exemption from federal income taxation ofthe 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 pursuantto Section 148 ofthe Code and the regulations promulgated thereunder which,if
such use had been reasonably expected on the date of delivery of the Bonds to the initial
purchasers thereof, would have caused the Bonds as "arbitrage bonds"within the meaning of
such term as used in Section 148 ofthe Code.
The City represents that it has not been notified ofany 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 ofthe Code and the
applicable regulations thereunder throughout the term ofthe Bonds.
(b)Private Person Use Limitation for Bonds.The City covenants that for as long as
the Bonds areoutstanding, it will not permit:
(1) More than 10%of the Net Proceeds of the Bonds to be used for any
Private Person Use; and
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(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 ofproperty used or to be used for
any Private Person Use, or (B) derived from payments (whether or not made to the City) in
respect ofproperty,or borrowed money, used or to be used for any Private Person Use.
The City further covenants that, if:
(3) More than five percent ofthe Net Proceeds ofthe Bonds are to be used for
any Private Person Use; and
(4) More than five percent ofthe principal or interest payments on the Bonds
in a Bond Year are (underthe 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 ofproperty,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, 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 ofsuch portion ofthe Project relates. The
City further covenants that it will comply with any limitations on the use ofthe projects by other
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than state and local governmental users that are necessary,in the opinion ofits bond counsel,to
preserve the tax exemption of the interest on the Bonds.The covenants of this section are
specified solely to assure the continued exemption from regular income taxation of the interest
on the Bonds.
(c)Designation under Section 265(b)ofthe Code.The City hereby designates the
Bonds as "qualified tax exempt obligations" for investment by financial institutions under
Section265(b)ofthe Code. The City does not anticipate that it will issue more than $10,000,000
in qualified tax-exemptobligationsduring2011 (excluding obligations permitted by the Codeto
be excluded for purposes ofthe City's qualification as a qualified small issuer).
(d)Modification ofTax Covenants.The covenants ofthis section are specified solely
to assurethe continued exemption from regular income taxation ofthe interest on the Bonds. To
that end, the provisions ofthis section may be modified or eliminated without any requirement
for formal amendment thereof upon receipt of an opinion of the City's bond counsel that such
modification or elimination will not adversely affect the tax exemption ofinterest on any Bonds.
Section 11.Issuance ofFuture Parity Bonds.
(a)Conditions upon the Issuance ofFuture Parity Bonds.As long as any of the
Bonds remain outstanding,the City hereby further covenants and agrees that it will not issue any
Future Parity Bonds except that the City hereby reserves the right to issue additional water and
sewer revenue bonds,which shall constitute a charge and lien upon the Revenue of the System
equalto the lien thereon ofthe Bonds. Exceptasprovided in subsection(b) below,the Cityshall
not issue any series ofFuture Parity Bonds or incur any additional indebtedness with a parity lien
or charge on Net Revenue (i.e.,on a parity of lien with Parity Bonds at the time outstanding)
unless:
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(1)the City shall not have been in default of its Rate Covenant for the
immediately preceding fiscal year, and
(2) The ordinance authorizing the issuance ofsuch Future Parity Bonds shall
include the covenants provided in Section 8(c)hereof and provide that the Future Parity Bond
reserve requirement shall be funded no later thanthe date ofdelivery ofthe Future Parity Bonds.
(3) there shall have been filed a certificate (prepared as described in
subsection(c) or (d) below) demonstrating fulfillment of the Parity Requirement, commencing
with the first full fiscal year following the date on which any portion of interest on the series of
Future Parity Bonds then being issued no longer will be paid from the proceeds of such series of
Future Parity Bonds.
(b)No Certificate Required.The certificate described in the foregoing
subsection (a)(2) shall not be required as a condition to the issuance ofFuture Parity Bonds:
(1)if the Future Parity Bonds being issued are for the purpose of refunding
outstanding Parity Bonds; or
(2)ifthe Future Parity Bonds are being issued to pay costs of construction of
facilities of the System for which Future Parity Bonds have been issued previously and the
principal amount of such Future Parity Bonds being issued for completion purposes does not
exceed an amount equal to an aggregate of 15%ofthe principal amount of Future Parity Bonds
theretofore issued for such facilities and reasonably allocable to the facilities to be completed as
shown in a written certificate of the City Representative, and there is delivered a Consultant's
certificatestatingthat the natureandpurpose of suchfacilitieshasnotmaterially changed.
(c)Certificate ofthe City Without A Consultant.Ifrequiredpursuant to the foregoing
subsection (a)(2), a certificate may be delivered by the City (executed by the City
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Representative)without a Consultant if Net Revenue for the Base Period (confirmed by an
independent auditor)conclusively demonstrate that the Parity Requirement will be fulfilled
commencing withthe firstfullfiscalyear following the date on whichany portionof interest on
the series of Future Parity Bonds then being issued will not be paid from the proceeds of such
series ofFuture Parity Bonds.
(d)Certificate of a Consultant.Unless compliance with the requirements of
subsection (a)(2)havebeenotherwise satisfied (as provided in (b)or (c)above),compliance with
the Parity Requirement shall be demonstrated conclusively bya certificate ofa Consultant.
In making the computations of Net Revenue for the purpose of certifying compliance
withtheParity Requirement,the Consultant shall useas a basistheNetRevenue (which maybe
based upon unaudited financial statements oftheCity ifthe audit has notyet been completed)for
the Base Period. Such Net Revenue shall be determined by adding the following:
(1) The historicalnet revenue ofthe City for the Base Period being issuedas
determined by a Consultant.
(2) The net revenue derived from those customers of the City that have
become customers during such 12-month period or thereafter and prior to the date of such
certificate,adjusted to reflect a full year's net revenue from each such customer to the extent
such net revenue was not included in (1) above.
(3) The estimated annual net revenue to be derived from any person, firm,
association, private or municipalcorporation under any executed contract for service, which net
revenue was not included in any ofthe sources ofnet revenue described in this subsection (d).
(4) The estimated annual net revenue to be derived from the operation ofany
additions or improvements to or extensions ofthe City under construction but not completed at
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the time of such certificate and not being paid for out of the proceeds of sale of such Future
Parity Bonds being issued, and which net revenue is not otherwise included in any ofthe sources
ofnet revenue described in this subsection (d).
(5) The estimated annual net revenue to be derived from the operation ofany
additions and improvements to or extensions of the City being paid for out of the proceeds of
sale ofsuch Bonds being issued.
In the event the City will not derive any revenue as a result of the construction of the
additions,improvements or extensions being made or to be made to the System within the
provisions of subparagraphs(4) and (5) immediately above, the estimated normal Costs of
Maintenance and Operation (excluding any transfer of money to other funds of the City and
license fees,taxes and payments in lieu of taxes payable to the City)of such additions,
improvements and extensions shallbedeductedfromestimated annual net revenue.
The words "historical net revenue"or "net revenue"as used in this subsection (d) shall
mean the Revenue or any part or parts thereof less the normal expenses of maintenance and
operation ofthe Systemoranypartorpartsthereof,but before depreciation.
Such "historical net revenue" or "net revenue" shall be adjusted to reflect the rates and
charges effective on the date of such certificate if there has been any change in such rates and
charges during or after such 12-consecutive-monthperiod.
(e)Subordinate Lien Obligations.Nothing herein contained shall prevent the City
from issuing revenue bonds or other obligations which are a charge upon the Revenue of the
System junior or inferior to the payments required by this ordinance to be made out of such
Revenue topayand secure thepayment of any outstanding ParityBonds.
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(f)Refunding Obligations.Nothing herein contained shall prevent the City from
issuing revenue bonds to refundmaturingParityBondsforthe payment ofwhichmoneysarenot
otherwise available.
Section 12.Form ofBonds. The Bonds shall be in substantially the following form:
UNITED STATES OF AMERICA
No.
STATE OF WASHINGTON
CITY OF MOSES LAKE
WATER AND SEWER REVENUE BOND,2011
INTEREST RATE:MATURITY DATE:CUSIPNO.:
REGISTERED OWNER:CEDE &Co.
PRINCIPAL AMOUNT:
The City of Moses Lake,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 receivedpromises to pay, but only from the sources
and as hereinafter provided, to the RegisteredOwneridentified above, or registered assigns,on
the Maturity Date identified above, the Principal Amount indicated above and to pay interest
thereon from August 23,2011,or the most recent date to which interest has been paid or duly
provided for,at the Interest Rate set forth above,payable on March1, 2012, and semiannually
thereafter on the first days of each September and March 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 ofAmerica. Interest and principal shall be paid as provided in the Blanket Issuer Letter of
Representations (the "Letter of Representations") from 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
"Registrar"). Capitalized terms used in this bond that are not specifically defined have the
meanings given such terms in Ordinance No. 2626 of the City (the "Bond Ordinance").
Reference is made to the Bond Ordinance and any and all modifications and amendments thereto
for a description of the nature and extent ofthe security for the bonds ofthis issue, the funds or
i j revenues pledged,and the terms and conditions upon which such bonds are issued.
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This bond is one of an authorized issue ofbonds of the City of like date and tenor except ^^^
as to number,amount, rate ofinterest and date of maturity in the aggregate principal amount of ^
$4,905,000. This issue of bonds is authorized by the Bond Ordinance for the purposes of
providingmoney to pay part ofthe cost ofconstruction and acquisition ofcertain improvements
to the System,all in conformity with the laws of the State of Washington and ordinances of the
City.
This bond and the bonds of this issue are payable solely from the special funds of the
Citydefined as the "Bond Fund" in the BondOrdinance. The Cityhas irrevocably obligatedand
bound itself to pay into the Bond Fund out of the Revenue of the System or from such other
moneysas may be providedthereforcertainamounts necessaryto pay and securethe payment of
the principal and interest on such bonds. The bonds of this issue are not general obligations of
the City.
The City has designated the bonds of this issue as qualified tax-exempt obligations for
purposes ofSection 265(b)ofthe Internal Revenue Code of 1986.
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
performall the covenants ofthis bond and ofthe Bond Ordinanceto be by it kept and performed,
and reference is hereby made to the Bond Ordinance for a complete statement ofsuch covenants.
The City does hereby pledge and bind itselfto set aside from the Revenue Fund out ofthe C)
revenue of the System and to pay into the Bond Fund and the Reserve Fund-2011 the various
amounts required by the Bond Ordinance to be paid into and maintained in such Fund and
account,all within the times provided by the Bond Ordinance. To the extent more particularly
providedby the Bond Ordinance,the amountsso pledged to be paid from the Revenue Fundout
of the revenue of the System into the Bond Fund and the account therein shall be a lien and
charge thereon equal in rank to the lien and charge upon said revenue ofthe 2004 Bonds and the
amounts required to pay and secure the payment of any revenue bonds of the City hereafter
issuedon a parity with 2004 Bonds and the bonds ofthis issue and superior to all other liensand
charges ofany kindor natureexceptthe Costs ofMaintenanceand Operation ofthe System.
The pledge of Revenue of the Systemand other obligations of the City under the Bond
Ordinance may be discharged at or priorto the maturityor redemption ofthe bonds ofthis issue
uponthe makingof provision forthe payment thereofonthetermsandconditionsset forth inthe
Bond Ordinance.
The bonds ofthis issuearenotsubjectto redemptionpriorto their stated maturities.
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 Registrar.
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It is hereby certified that all acts, conditions, and things required by the Constitution and
^^J statutes of the State of Washington to exist,to have happened,been done,and performed
precedentto andinthe issuance ofthisbondhave happened,been done,and performed.
IN WITNESS WHEREOF,the City ofMoses Lake,Washington has caused this bond to
be signed with the facsimile or manual signature ofthe Mayor, to be attested by the facsimile or
manual signature of the City's Finance Director, and the corporate seal of the City to be
impressed, imprinted or otherwisereproducedhereon,allas ofthis 23rdday ofAugust,2011.
CITY OF MOSES LAKE,WASHINGTON
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By /s/facsimile or manual
Mayor
(SEAL)
ATTEST:
/s/facsimile or manual
Finance Director
The Registrar's certificate authentication on the Bonds shall be in substantially the
following form:
CERTIFICATE OF AUTHENTICATION
Date ofAuthentication:August 23,2011
This bond is one ofthe bonds described in the within-mentioned Bond Ordinance and is
one ofthe Water and Sewer Revenue Bonds,2011 ofthe City ofMoses Lake,Washington,dated
August 23,2011.
WASHINGTON STATE FISCAL
AGENCY,Registrar
By
Authorized Signer
Section 13.Execution of Bonds.The Bonds shall be executedon behalf of the City
withthe manual or facsimile signature ofthe Mayor,shall be attested by the manual or facsimile
signature of the Finance Director,and the seal of the City shall be impressed,imprinted or
otherwise reproduced thereon.
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Only such Bonds as shall bear thereon a Certificate of Authentication in the form
hereinbefore recited,manually executed by the 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 ofthis ordinance.
In case either of the officers who shall have executed the Bonds shall cease to be an
officer or officers of the City before the Bonds so signed shall have been authenticated or
delivered by the Registrar,or issued by the City, such Bonds shall be valid nevertheless and may
be issued by the City with the same effect as though the persons who had executed such Bonds
had not ceased to be such officers.
Section 14. Defeasance. In the event that money and/or Governmental Obligations
maturing at such time or times and bearing interest to be earned thereon in amounts sufficient to
redeem and retire any bonds payable out of the Bond Fund in accordance with their terms are
irrevocably set aside in a special account to effect such redemption and retirement, then no
further payments need be made into the Bond Fund for the payment of the principal of and
interest on such Bonds and the owner ofsuch Bonds shall 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 be deemed not to be outstanding hereunder.
The Registrar shall provide notice of defeasanceof Bonds to Registered Owners and to
eachpartyentitled to receive notice in accordance withSection 18ofthisordinance.
Section 15.Lost or Destroyed Bonds. In case any Bonds shall be lost, stolen or
destroyed,the Registrar may authenticate and deliver a newBondor Bonds of like amount,date
and tenor to the owner thereof upon the owner's paying the expenses and charges of the
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Registrar andthe Cityin connection therewith and upon his filingwiththe Registrar andtheCity
evidence satisfactoryto boththat suchBond or Bondswere actually lost, stolen or destroyedand
of his ownership thereof, and upon furnishing the City and the Registrar with indemnity
satisfactory to both.
Section 16. Sale of Bonds. The City hereby accepts the written offer of the
Underwriter to purchase the Bondsat the price set forth in its purchase offer presented to this
Council and under the terms, conditions and covenants ofthe Bonds as set forth herein. The City
Representative is authorized and directed to execute the purchase offer presented by the
Underwriter.
The City Administrator and the Finance Director are hereby authorized to review and
approve onbehalfof the Citythe preliminary and final Official Statements relative to the Bonds
with such additions and changes as may be deemed necessary and advisable to them. The
Preliminary Official Statementfor the Bonds, dated August 3,2011,is hereby deemed final for
purposes of Securities and ExchangeCommission Rule 15c2-12.
The Finance Director and other City officials, agents and representatives are hereby
authorized and directed to do everything necessary for the prompt issuance,execution and
delivery of the Bonds to the Underwriter, and for the proper use and application of the proceeds
ofsale ofthe Bonds.
Section 17.Disposition of Bond Proceeds.The Finance Director has heretofore
established the Operations Complex Construction Fund #472 within the Water/Sewer Fund of
the City (the "Project Fund"). The net proceeds of sale of the Bonds shall be deposited in the
Project Fund and shall be expended solely to pay the cost of issuing and selling the Bonds and,
together with other available moneys of the City, shall be used to undertake the Project. Money
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in the Project Fund shall be invested by the Finance Director,pending disbursement,in any legal
investment for City funds.
Section 18.Undertaking to Provide Ongoing Disclosure.
(a)Contract/Undertaking.This section constitutes the City's written undertaking for
the benefit ofthe owners ofthe Bonds as required by Section (b)(5)ofthe Rule.
(b)Financial Statements/Operating Data.The City 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 2012 for the
fiscal year ended December 31,2011):
1.Annual financial statements, which statements may or may not be audited,
showing ending fund balances for the System prepared in accordance with the Budget
Accounting and Reporting System prescribed by the Washington State Auditor pursuant to
RCW 43.09.200;
2. The principal amount ofParity Bonds;
3.Debt service coverage for Parity Bonds;
4. Rates for the System; and
5.Number ofcustomers ofthe System.
Items 2-5 shall be required onlyto theextentthat suchinformation is not included in the annual
financial statements.
The information and data described above shall be provided on or before nine months
after the endof 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 ofthe change of fiscal year to the
MSRB.In lieu of providing such annual financial information and operating data,the City may
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cross-refer to other documents available to the public on the MSRB's internet website or filed
with the SEC.
If not providedas partof the annual financial information discussed above,the Cityshall
provide the City's audited annual financial statement prepared in accordance with the Budget
Accounting and Reporting System prescribed by the Washington State Auditor pursuant to
RCW 43.09.200 (or any successor statute) when and ifavailable to the MSRB.
(c)Material Events.TheCity agrees to provide or causeto be provided,in a timely
manner, to the MSRB notice ofthe occurrence of any ofthe following events with respect to the
Bonds not in excess often business days after the occurrence ofthe event:
• Principal and interest payment delinquencies;
• Non-payment relateddefaults,ifmaterial;
•Unscheduled draws on debt service reserves reflecting financial
difficulties;
Unscheduled draws on credit enhancements reflecting financial
difficulties;
• Substitution ofcredit 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 ofthe
Bonds, or other material events affecting the tax status ofthe Bonds;
• Modifications to the rights ofBondholders,ifmaterial;
•Bond calls,ifmaterial,and tender offers;
•Defeasances;
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• Release, substitution, or sale ofproperty securing repayment ofthe Bonds,
ifmaterial;
•Rating changes;
• Bankruptcy,insolvency,receivershiporsimilarevent ofthe City;
• The consummation ofa 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 ofa definitive agreement relating to any such actions, other than
pursuant to its terms,ifmaterial; and
• Appointment of a successor or additionaltrustee or the change ofname of
a trustee,ifmaterial.
Solely for purposesofinformation,andnot intendingto modifythis undertaking,the City
advises that no property secures payment of the Bonds. The City shall promptly determine
whether the events described above are material.
(d)Notification Upon FailuretoProvideFinancialData.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.
(e)Emma;Format for Filings with the MSRB.Until otherwise designated by the
MSRB or the SEC, any information or notices submitted to the MSRB in compliance with the
Rule are to be submitted through the MSRB's Electronic Municipal Market Access system
("EMMA"),currently located at www.emma.msrb.org.All notices,financial information and
operating data required bythis undertaking tobe provided tothe MSRB mustbeinan electronic
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format as prescribed by the MSRB. All documents provided to the MSRB pursuant to this
undertakingmust be accompaniedby identifying information asprescribedby the MSRB.
(f)Termination/Modification.The City's obligations to provide annual financial
information and notices of material events shall terminate upon the legal defeasance, prior
redemption or payment in full ofall ofthe Bonds.Any provision ofthis section shall benull and
void ifthe City (1) obtainsanopinion ofnationallyrecognizedbond counselto the effect thatthe
portion of the Rule that requires that provision is invalid,has been repealed retroactively or
otherwise does not apply to the Bonds and (2) notifies the MSRB of such opinion and the
cancellation ofthis section.
The City may amendthis section with an opinion ofnationallyrecognized 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 narrativeexplanation of
the reason forthe amendment and its impact on the type (or in the case ofa change ofaccounting
principles,on the presentation)of financial information or operatingdatabeing presentedby the
City. In addition,if the amendment relates to the accounting principles to be followed in
preparing financial statements,(i)notice ofsuch change shall be given in the same manner as for
a material event under Subsection (c), and (ii) 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 ofthe new accounting principles and
those prepared onthe basis ofthe formeraccountingprinciples.
(g)Bond Owner's Remedies Under This Section.The right of any bondowner or
beneficial owner ofBondsto enforce the provisions of this section shall be limited to a right to
obtain specific enforcement ofthe City's obligations under this section,and any failure by the
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City to comply with the provisions of this undertaking shall not be an event of default with
respect to the Bonds. For purposes ofthis section,"beneficial owner"means any person who has
the power,directlyor indirectly,to vote or consentwith respectto, or to disposeof ownershipof,
any Bonds, including persons holding Bonds through nominees or depositories.
(h)No Default.The City is not and has not been in default in the performance of its
obligations ofany prior undertaking for ongoing disclosure with respect to its obligations.
Section 19. Effective Date. The City Council declares that an emergency exists and
this ordinance shall take effect immediatelyas provided by law upon one reading if 2/3 of the
entire City Council present vote in favor of passage.
Adopted by the City Council and signed by its Mayor on August 9,2011.
CITY OF MOSES LAKE,WASHINGTON
Finance Director
APPROVED AS TO FORM:
CyntJna M. Weed. Bond Counsel
K&L Gates LLP
Svv ^IvujL
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Mayor
PA20287 CMV\A20287 9AJ 08/09/11
CERTIFICATE OF FINANCE DIRECTOR
u
I DO HEREBY CERTIFY that I am the duly chosen, qualified and acting Finance
Director of the City of Moses Lake,Washington (the "City"), and keeper of the records of the
City Council (the "Council");and
I HEREBY CERTIFY:
1. That the attached ordinance is a true and correct copy of Ordinance No. 2626 of
the City (the "Ordinance"), as finally passed at a regular meeting of the Council held on the 9th
day ofAugust,2011,and duly recorded in my office.
2. That said meeting was duly convened and held in all respects in accordance with
law, and to the extent required by law, due and proper notice of such meeting was given; that a
quorum was present throughout the meeting and a legally sufficient number of members of the
i \Council voted in the proper manner for the passage ofthe Ordinance; that all other requirements
and proceedings incident to the proper passage ofthe Ordinance have been duly fulfilled,carried
out and otherwise observed,and that I am authorized to execute this certificate.
IN WITNESS WHEREOF,I have hereunto set my hand this 9th ofAugust,2011.
Finance Director
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Appendix D
AUDITREPORT