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1093_00001CITY OF MOSES LAKE,WASHINGTON ORDINANCE NO.1093 i AN ORDINANCE of the City of Moses Lake,Washington,adopting a system or plan of additions toandbettermentsandextensionsofthewaterworksutilityoftheCity,including the system of sewerageasapartthereof;providing for the issuance of$4,200,000 par value of "Water and Sewer RevenueBonds,1983,"for the purpose of obtaining funds topayapartofthecostofcarryingoutsuchsystem orplan;fixing the date,denomination,interest rates,form,terms and covenants of such bonds;and provid-ing for the sale and delivery of such bonds toSeattle-Northwest Securities Corporation of Seattle,Washington. WHEREAS,the City of Moses Lake,Washington (the "City"), heretofore combined its existing water system and system of sewerage into a waterworks utility system of the City and the word "System"shall hereinafter mean the combined water system and system of sewerage of the City together with all additions thereto and betterments and extensions thereof hereafter made; and WHEREAS,pursuant to Ordinance No.290 of the City,passed and approved October 25,1955,the City issued and sold $1,100,000 par value of "Water and Sewer Revenue Bonds,Series A,"dated November 1,1955,for the purpose of providing funds to redeem and retire outstanding "Water and Sewer Revenue Coupon Warrants"of the City and to acquire,construct and install certain additions and improvements to and extensions of the System;and WKEREAS,by Section 14 of Ordinance No.290,the City 8 reserved the right to issue additional water and sewer revenue bonds on a parity with the "Water and Sewer Revenue Bonds, Series A,"if certain conditions are met and complied with at the time of the issuance of such additional bonds;and WHEREAS,the City subsequently issued and sold $200,000 par value of "Water and Sewer Revenue Bonds,1965,"issued pursuant to Ordinance No.532,$315,000 par value of "Water and Sewer Revenue Bonds,1967,"issued pursuant to Ordinance No.573 and 8 $1,100,000 par value of *Water and Sever Revenue Bonds,1973," issued pursuant to Ordinance No.670,all of which bonds were issued on a parity of lien with the "Water and Sewer Revenue Bonds,Series A,"and with each other and constitute a first and prior charge and lien on the Net Revenue of the System of the City (as herein defined),all of which bonds are herein collec- tively defined as the "Prior Lien Bonds;"and WKEREAS,the City thereafter issued and sold pursuant to Ordinance No.1039 passed November 24,1981,$985,000 par value of "Water and Sewer Revenue Bonds,1981"(the "1981Bonds"), which 1981 Bonds constitute a charge and lien upon the Net Revenue of the System of the CitY lunior to the prior charge and f st h rgue nrdevenuhe foo s essmehn s rco e ite dh abuU i ity Local Improvement Districts Nos.1 and 2 created in connection with and pledged to the payment of such 1981 Bonds;and WHEREAS,by Section 9,subparagraph (1)of such ordinance No.1039 the City provided for the issuance of additional bonds on a parity of lien with the 1981 Bonds for "(1)The purpose of acquiring,constructing andinstallingadditionsandimprovementstoandexten-sions and betterments of,acquiring necessary equip-ment for or making necessary replacements of equipmentorcapitalimprovementstotheSystemoftheCity;or "(2)The purpose of exchanging or purchasing andretiringpriortoorattheirmaturityanyoutstandingwaterandseverrevenuebondsoftheCity;" if the following conditions are met and complied with at the time of issuance of such additional bonds: "(1)All payments required by any ordinance oftheCitypertainingtooutstandingwaterandsewerrevenuebondsoftheCityshallhavebeenmadeintotherespectivebondredemptionfundsforthepaymentofsuchwaterandseverrevenuebondsandnodefi-ciency exists therein: "(2)If one or more U.L.I.D.s shall be createdinconnectionwiththeissuanceofsuchFutureParity -2 - Bonds,the ordinance providing for the issuance ofsuchFutureParityBondsshallprovidethatallofsuchAssessmentsshallbepaiddirectlyintotheRevenueBondFund. 8 "(3)Any ordinance authorizing Future ParityBondsshallrequirethattheReserveAccountbeincreasedwithinaperiodfiveyearsafterthedate ofissuanceofsuchFutureParityBondstoanamountequaltotheMaximumAnnualDebtService. "(4)At the time that Future Parity Bonds areissued,the City shall have on file a certificate fromanindependentlicensedprofessionalengineerorcertifiedpublicaccountantshowingthatinhisprofessionalopiniontheNetRevenueinanytwelveconsecutivemonthsoutofthetwenty-four monthsdirectlyprecedingtheissuanceofsuchParityBondstogetherwithAssessmentsequalsatleast1.25 timesAnnualDebtService.. .": and WHEREAS,the City Council has determined that it is neces- sary and in the best interests of the City that certain addi- tional improvements be made and there be adopted a system or i plan of additions to and betterments and extensions of the System of the City;and WHEREAS,the City Council has determined that it is neces- sary to issue and sell $4,200,000 par value of water and sewer revenue bonds to provide a part of the funds necessary to carry out such system or plan providing for additions to and better- ments and extensions of the System of the City and to pay the costs of issuance and sale of such bonds NOW,THEREFORE, THE CITY COUNCIL OF THE CITY OF MOSES LAKE,WASHINGTON,DO ORDAIN,as follows: Section 1.As used in this ordinance,the following words shall have the following meanings: 8 (a)"Annual Debt Service"for any calendar year shall mean all of the principal and interest due on the 1981 Bonds,the Bonds and any Future Parity Bonds in such year,except the prin- cipal of such bonds due in any Term Bond Maturity Year of any issue having Term Bonds,and plus all mandatory redemption or sinking fund requirements for the Term Bonds which requirements -3 - will mature or become due in such year,less all capitalized interest payable from the proceeds of such bonds. (b)"Assessments"shall mean all assessments levied in any utility local improvement district of the City heretofore or hereafter created for the acquisition or construction of addi- tions and improvements to and extensions of the System if such assessments are pledged to .be paid into the Revenue Bond Fund, including any installments of Assessments and any interest or penalties which may be due thereon. (c)"Bonds"shall mean the $4,200,000 par value of "Water and Sewer Revenue Bonds,1983,"of the City issued pursuant to and for the purposes provided for in this ordinance. (d)"1981 Bonds"shall mean the 4985,000 par value of "Water and Sever Revenue Bonds,1981,"issued pursuant to Ordinance NoC t1039hall mean the City of Moses Lake.Washington, a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington. (f)"Costs of Maintenance and Operation"shall mean all necessary operating expenses,current maintenance expenses, expenses of reasonable upkeep and repairs and insurance and administrative expense,but excludes depreciation,payments for debt service or into reserve accounts,costs of capital addi- tions to or replacements of the System,municipal taxes or pay- ments to the City in lieu of taxes. (g)"Future Parity Bonds"shall mean any water and sewer revenn ehebR enwhio t Sys ema nhe tes men s ohaving a lienn of the principal thereof and interest thereon equal to the lien upon the Revenue of the System and Assessments for the 1981 Bonds and the Bonds. (h)"Maximum Annual Debt Service"shall mean the maximum amount of Annual Debt Service which will become due in any -4 - future year on the outstanding 1981 Bonds,Bonds and/or Future Parity Bonds. 8 (1)"Net Revenue"shall mean the Revenue of the System less the Costs of Maintenance and Operation. (j)"Plan of Additions and Betterments"shall mean the system or plan for making additions to and betterments and extensions of the system herein specified,adopted and ordered to be carried out. (k)"Prior Lien Bonds"shall mean the "Water and Sewer Revenue Bonds,Series A,"dated November 1,1955,the "Water and Sewer Revenue Bonds,1965,"dated July 1,1965,the "Water and Sewer Revenue Bonds,1967,"dated November 1,1967,and the "Water and Sewer Revenue Bonds,1973,"dated July 1,1973. (1)"Revenue Bond Fund"shall mean that special fund of 9 the City designated the "Water and Sewer Revenue Bond Fund, 1981,"created by Ordinance No.1039 in the office of the City Treasurer for the purpose of paying and securing the principal of and interest on the 1981 Bonds,the Bonds and any Future Parity Bonds. (m)"Revenue Fund"shall mean the Water and Sewer Revenue Fund of the City created by Ordinance No.135 of the City. (n)"Revenue of the System"shall mean all earnings,reve- nues and moneys received by the City from or on account of the operation of the System,including the income from investments of money in the Revenue Fund and the Revenue Bond Fund and the Construction Fund or from any other investment thereof,includ- deral or state reimbursement of operatiMalexpenses to and Operation,but not including grants for capital purposes. (o)"System"shall mean the existing sanitary sewage collection and treatment system of the City,including facili- ties for the collection and disposal of storm water runoff,as it now exists and as it may later be added to,extended and -5 - improved,and the existing water supply and distribution system of the City,as it may later be added to,extended and improved, i for as long as the Bonds remain outstanding. (9)"Term Bond Maturity Year"shall mean any calendar year in which maturing bonds of a particular issue are Term Bonds. (g)"Term Bonds"shall mean any Bonds and/or Future Parity Bonds identified as such in the ordinance authorizing the issu- ance thereof,the payment of which is provided for by a require- ment for mandatory deposits of money into the "Principal and Interest Account"in the Revenue Bond Fund in accordance with a mandatory sinking fund requirement. (r)"U.L.I.D."shall mean Utility Local Improvement District. Section 2.The City specifies,adopts and orders the 9 carrying out of a system or plan of additions to and betterments and extensions of the System of the City 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 acquisi- tion and installation of all necessary valves,pumps,fittings, couplings,connections,equipment and appurtenances,the acqui- sition of any easements,rights-of-way and land that may be required and the performance of such work as may be incidental and necessary. All of the foregoing shall be in accordance with the plans and specifications therefor prepared by the consulting engineers of the City. systeTh rp n wh e an imodify tmhe detaiappear dvorsaegoing 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 System of the City is declared to be at least as long as the -6 - term of the Bonds.The estimated cost of the acquisition,con- struction,installation and financing of the above-described i improvements is declared to be approximately $7,950,000.Such cost shall be paid from the proceeds of the issuance and sale of the Bonds authorized in this ordinance,the proceeds of grants anticipated to be received from the State of Washington,Depart- ment of Ecology and the United States Environmental Protection Agency,and from other money of the City made available therefor. Section 3.The City Council finds that all payments required to have been made into the Bond Fund have been made and that no deficiency exists in such fund or the Reserve Account therein;that no U.L.I.D.has been created in connection with the issuance of the Bonds;that provision is hereinafter made for the accumulation in the Reserve Account of the Bond Fund of 9 the required reserve amount for the Bonds;and that there will be on file with the City Clerk before the delivery of the Bonds to the purchaser thereof a certificate of Pool Engineering, Inc.,consulting engineers of Bellevue,Washington,an independent professional engineering firm,certifying that in its professional opinion,the Net Revenue of the System of the City is sufficient to meet the 1.25 coverage requirement as specified in subparagraph (1)(4)of Section 9 of Ordinance No. 1039. Section 4.For the purpose of providing the funds with which to carry out the Plans of Additions and Betterments,there shall be issued and sold $4,200,000 par value of the Bonds (by R venoredinannce designatedThaend dedfined ashthedat ad arac d Se 9 3, and shall bear interest from such date payable on July 1,1983, and semiannually thereafter on each succeeding January 1 and July 1,interest to maturity to be evidenced by coupons to be attached to the Bonds.If any Bond is not redeemed upon proper presentment at its maturity or call date thereof,the City shall -7 - be obligated to pay interest at the coupon rate for each such Bond from and after the maturity or call date until such Bond, i both principal and interest,shall have been paid in full or until sufficient money for such payment in full is on deposit in the Revenue Bond Fund and such Bond has been duly called for payment by the City Treasurer's publishing notice of such call once at least ten days prior to the call date in the official newspaper of the City or,if there is no official newspaper,in a newspaper of general circulation in the City.The Bonds shall be in denominations of $5,000 each,shall be numbered from 1 to 840,inclusive,and shall bear interest and mature on July 1 of each year in accordance with the following schedule: Bond Numbers Interest Maturity (Inclusive)Amounts Rates Years 1 to 25 $125,000 6.004 1984 9 26 to 50 125,000 6.75%1985 51 to 76 130,000 7.25%1986 77 to 102 130,000 7.75%1987103to128130,000 8.25%1988 129 to 155 135,000 8.50%1989156to182135,000 8.75%1990183to210140,000 9.00%1991211to230100,000 9.20%1992231to251105,000 9.40%1993252to275120,000 9.60%1994276to301130,000 9.80%1995302to329140,000 9.904 1996330to359150,000 10.00%1997360to411260,000 10.004 1998412to471300,000 10.00%1999472to540345,000 10.00%2000541to618390,000 10.00%2001619to732570,000 10.004 2002733to840540,000 10.00%2003 Both principal of and interest on the Bonds shall be pay- able in lawful money of the United States of America at the olde ofatthe Threea rs al agehnecyCity ohreSatatehe o tash ng oth n Seattle,Washington,or New York,New York.The Bonds shall be Payable solely from the Revenue Bond Fund.The Bonds shall be a valid claim of the holder thereof only as against the Revenue Bond Fund and the fixed amount of the Revenue of the System and -8 - Assessments pledged to such fund,and shall not be a general obligation of the City. 8 The City reserves the right to redeem Bonds maturing on or after July 1,1995,prior to their stated maturity dates in whole or in part in inverse numerical order,on July 1,1994,or on any semiannual interest payment date thereafter,at the following percentages of par if called on the following dates, plus accrued interest to date of redemption: Call Dates Call Price July 1,1994,and January 1,1995 102.504July1,1995,and January 1,1996 102.004July1,1996,and January 1,1997 101.50%July 1,1997,and January 1,1998 101.00%July 1,1998,and January 1,1999 100.50%July 1,1999,and thereafter 100.00% Notice of any call for the redemption of any of the Bonds prior to their maturity dates shall be published once in the official newspaper of the City,or,if there is no official newspaper,in a newspaper of general circulation in the City, not less than 30 nor more than 45 days prior to the call date and a copy of such notice shall be mailed to the main office of Seattle-Northwest Securities Corporation in Seattle,Washington, or its successor.In addition,such redemption notices shall be sent to Moody's Investors Service,Inc.,and Standard &Poor's Corporation at their offices in New York,New York,but the mailing of such notices to such New York firms shall not be a condition precedent to any such redemption.Interest on any Bonds so called for redemption shall cease on such call date upon payment of the redemption price into the Bond Fund. 8 The City further reserves the right to purchase any or all of the Bonds in the open market at any time at a price not in excess of the applicable call price on the date of such purchase plus accrued interest to the date of such purchase. Section 6.Pursuant to Section 7 of Ordinance No.135,the Revenue Fund was created into which all gross earnings and -9 - revenue of the System must be paid and collected.All Costs of Maintenance and Operation,all charges for the payment of the principal of and interest on the outstanding Prior Lien Bonds, all costs of additions,improvements,betterments and repairs to and replacements and extensions of the System (except when the same are financed by the issuance of bonds,coupon warrants,or warrants drawn on other special funds of the City),all payments required to be made into any fund or funds for the payment of or reserve for the Prior Lien Bonds,and all payments which may be required by any ordinances of the City passed subsequent to Ordinance No.135 to be made into any bond redemption fund and/or reserve fund or account created for the purpose of paying or guaranteeing the payment of the principal of and interest on any water and sewer revenue bonds or coupon warrants of the City issued subsequent to such Ordinance No.135 must be paid out of the Revenue Fund.Money in such fund shall be used only for the purposes and in the order of priority as more particularly set forth in Section 10 of this ordinance. Section 7.By Ordinance No.1039 there has been created and established in the office of the City Treasurer a special fund of the City known as the "Water and Sewer Revenue Bond Fund,1981"(herein defined as the "Revenue Bond Fund"),which fund has been divided into two accounts,namely a Principal and Interest Account and a Reserve Account.So long as any Bonds are outstanding against the Revenue Bond Fund,the City irrevo- cably binds and obligates itself to set aside and pay into the Reh Rue enond Funnd outaddi nReve uh ou s n udepng As des ments,required by Ordinance No.1039 to be paid therein for the 1981 Bonds,certain fixed amounts without regard to any fixed proportion,namely,into the Principal and Interest Account on the twentieth day of each month commencing with March,1983,an amount at least equal to one-fourth of the amount of interest on -10 - deposited in the Revenue Fund and/or Assessments payable into the Revenue Bond Fund first available after making necessary provision for the required payments into the Principal and Interest Account.The money in the Reserve Account shall other- wise be held intact and may be applied against the last out- standing bonds payable out of the Revenue Bond Fund. All money in the Revenue Bond Fund may be kept on deposit in the official bank depository of the City or in any national bank or may be invested and reinvested in United States Government obligations or any other legal investment for City funds maturing not later than the interest or principal and interest payment date when such money will be needed.Interest earned on any such investment or on such bank deposit shall become a part of the Revenue of the System and need not be a stmedntin tm neon n uh Per enecpath tndintereest eA eo ntn ny bonds having a mandatory call provision shall be retained in the Principal and Interest Account and used to call and redeem such bonds. If the City shall fail to set aside and pay into the Revenue Bond Fund the amounts which it has obligated itself by this section to set aside and pay therein,the holder of any Bond may bring suit against the City to compel it to do so. The City Council declares that in fixing the amounts to be paid into the Bond Fund it has considered and had due regard for Costs of Maintenance and Operation and the debt service require- o sehea d nndsththRe enn se B dnd Fh nPriogr a er am unand proportion of the Revenue of the System than in its judgment will be available over and above the Costs of Maintenance and Operation of the System and the debt service and reserve requirements for the presently outstanding 1981 Bonds,Bonds and Prior Lien Bonds. -12 - Section 8.All Assessments and all Revenue of the System are pledged to the payments required to be made into the Revenue i Bond Fund,and the Bonds shall constitute a charge and lien upon such Assessments and Revenue of the System prior and superior to all other charges and liens whatsoever,excluding the Costs of Maintenance and Operation payable out of such revenue,except that the charge and lien upon such revenue alone for the Bonds shall be junior to the charge and lien upon such revenue alone for the outstanding Prior Lien Bonds and shall be on a parity with the charge and lien upon such Assessments and Revenue for the 1981 Bonds and any Future Parity Bonds. Section 9.The City covenants with the owner and holder of each of the Bonds as follows: (a)It will at all times maintain and keep theSystemoftheCityandalladditionsandimprovementstheretoingoodrepair,working order and condition,9 and will at all times operate such utility and thebusinessinconnectiontherewithinanefficientmannerandatareasonablecost. (b)In addition to the coverage requirementsfortheoutstandingPriorLienBonds,it will fix,maintain and collect rates and charges for the use oftheservicesandfacilitiesandallcommoditiessold,furnished or supplied by the System to ensure thattheRevenueoftheSystem,together with any Assess-ments,is sufficient to pay all costs of MaintenanceandOperationanddebtserviceonthe1981Bonds andtheBonds,as well as any other amounts that the CityisobligatedtopayfromtheRevenueoftheSystem,and that the Net Revenue together with Assessments ineachcalendaryearwillequalatleast1.25 timesMaximumAnnualDebtService. (c)It will not sell,lease,mortgage or in anymannerencumberordisposeofallthepropertyoftheSystemunlessprovisionismadeforpaymentintotheRevenueBondFundofasumsufficienttopaytheprincipalofandinterestonallbondspayableoutoftheBondFundatanytimeoutstanding,and it will8notsell,lease,mortgage or in any manner encumberordisposeofanypartofthepropertyofsuchSystemthatisused,useful and material to the operationthereof,unless provision is made for replacementthereof,or for payment into the Revenue Bond Fund ofthetotalamountofrevenuereceivedwhichshallnotbelessthananamountwhichshallbearthesameratiototheamountofoutstandingbondspayableoutoftheRevenueBondFundastherevenueavailablefordebtserviceforsuchoutstandingbondsforthetwelvemonthsprecedingsuchsale,lease,encumbranceordisposalfromtheportionoftheutilitysold, -13 - leased,encumbered or disposed of bears to the reve-nue available for debt service for such bonds fromtheentireutilityforthesameperiod.Any suchmoneysopaidintotheRevenueBondFundshallbeiusedtoretiresuchoutstandingbondsattheearliestpossibledate. (d)It will,while any of the Bonds remainsoutstanding,keep proper and separate accounts andrecordsinwhichcompleteandseparateentriesshallbemadeofalltransactionsrelatingtoitsSystsm,and it will furnish any subsequent holder or holdersoftheBonds,if the Bonds shall be owned by otherthanafundoftheCity,at the written request ofsuchholderorholders,complete operating and incomestatementsofsuchutilityinreasonabledetailcoveringanycalendaryear,showing the financialconditionofthewaterandsewerdepartmentsandcompliancewiththetermsandconditionsofthisordinance,not more than 120 days after the close ofsuchcalendaryear,and it will grant any holder orholdersofatleast25%of the outstanding Bonds therightatallreasonabletimetoinspecttheentireSystemandallrecords,accounts and data of the Cityrelatingthereto.Upon request of any holder of anyofsuchBonds,it will also furnish to such holder acopyofthemostrecentlycompletedauditoftheCity's accounts by the State Auditor of Washington orsuchotherauditasisauthorizedbylawinlieuthereof. (e)It will not furnish water or sanitarysewagedisposaltoanycustomerwhatsoeverfree ofchargeandwillpromptlytakelegalactiontoenforcecollectionofalldelinquentaccounts. (f)It will promptly collect all outstandingAssessmentsandpaythesameintotheRevenueBondFund. (g)It will carry the types of insurance on thepropertiesoftheSystemintheamountsnormallycarriedbyprivatewaterandsewercompaniesengagedintheoperationofwaterandseweragesystems,andthecostofsuchinsuranceshallbeconsideredapartoftheCostsofMaintenanceandOperation.If,asandwhentheUnitedStatesofAmericaorsomeagencythereofshallprovideforWarRiskInsurance,theCityfurtheragreestotakeoutandmaintainsuchinsuranceonallorsuchportionsofsuchUtility onwhichsuchWarRiskInsurancemaybewritteninanamountoramountstocoveradequatelythevaluethereof. 8 (h)It will pay all Costs of Maintenance andOperationandotherwisemeettheobligationsoftheCityashereinsetforth. (1)It will not create any special fund orfundsforthepaymentofotherrevenuebonds,war-rants or obligations,or authorize or issue any otherrevenuebonds,warrants or obligations which willrankonaparitywithorhaveanypriorityover thepaymentsintoorthemoneyintheRevenueBondFund,except that it reserves the right for: -14 - (1)The purpose of acquiring,constructingandinstallingadditionsandimprovementstoandextensionsandbettermentsof,acquiring necessaryequipmentforormakingnecessaryreplacementsofiequipmentorcapitalimprovementstotheSystemoftheCity;or (2)The purpose of exchanging or purchas-ing and retiring prior to or at their maturity anyoutstandingwaterandsewerrevenuebondsoftheCity: to issue additional and/or refunding water and sewerrevenuebonds(herein defined as "Future ParityBonds")and to make payments into the Revenue BondFundforthepaymentofsuchFutureParityBondsfromtheRevenueoftheSystemdepositedintheRevenueFund,together with Assessments collected in anyU.L.I.D.created in connection with the issuance ofsuchFutureParityBondssufficienttopaytheprin-cipal of and interest on such Future Parity Bonds,which such payments may rank equally out of suchRevenueoftheSystemandAssessmentscollected inU.L.I.D.Nos,1 and 2 if the City complies with thefollowingconditions: (1)All payments required by any ordinanceoftheCitypertainingtooutstandingwaterandsewerrevenuebondsoftheCityshallhavebeenmadeinto 9 the respective bond redemption funds for the paymentofsuchwaterandsewerrevenuebondsandnodefi-ciency exists therein; (2)If one or more U.L.I.D.s shall hecreatedinconnectionwiththeissuanceofsuchFutureParityBonds,the ordinance providing for theissuanceofsuchFutureParityBondsshallprovidethatallofsuchAssessmentsshallbepaiddirectlyintotheRevenueBondFund. (3)Any ordinance authorizing FutureParityBondsshallrequirethattheReserveAccountbeincreasedwithinaperiodfiveyearsafterthedateofissuanceofsuchFutureParityBondstoanamountequaltotheMaximumAnnualDebtService. (4)At the time that Future Parity Bondsareissued,the City shall have on file a certificatefromanindependentlicensedprofessionalengineet orcertifiedpublicaccountantshowingthatinhisprofessionalopiniontheNetRevenueinanytwelveconsecutivemonthsoutofthetwenty-four monthsdirectlyprecedingtheissuanceofsuchFutureParityBondstogetherwithAssessmentsequalsatleast1.258timesAnnualDebtService.The determination ofcoverageforparitypurposesdepandsuponthefollow-ing provisions: In determining whether the City complies withtheparityconditions,the following adjustments maybemadetothehistoricalNetRevenue: a.any rate change that has taken place orbeenapprovedmaybereflected: -15 - b.revenue may be added from customers actu-ally added to the System during or subse-quent to the 12-month base period; 8 c.actual or reasonable anticipated increasesintheCostsofMaintenanceandoperationsubsequenttothe12-month base periodshallbededucted; d.revenue may be added from customers to beservedbytheimprovementsbeingcon-structed out of the proceeds of the bondstobeissued; e.a full year's revenue may be included fromanycustomersbeingserved,but who havenotbeenreceivingserviceforthefullperiodofoperationusedasabasisfor thecertificate. Nothing contained in this ordinance shall pre-vent the City from issuing revenue bonds or warrantswhichareachargeupontheRevenueoftheSystemjuniororinferiortothepaymentsrequiredtobemadetherefromintotheRevenueBondFundandtheReserveAccountthereinorfrompledgingthepaymentofU.L.I.D.Assessments into the bond redemption fundcreatedforthepaymentoftheprincipalofandiinterestonsuchjuniorlienbondsaslongassuchassessmentsareleviedforimprovementsconstructedfromtheproceedsofsuchjuniorlienbonds, Nothing herein contained shall prevent the CityfromrefundingallorpartoftheBondsinaccordancewiththeprovisionsoftheRefundingBondActoftheStateofWashington(Chapter 39.53 RCW)as the samemaybeamended,and it is hereby expressly providedthatanysuchrefundingbondssoissuedshallhavethesamelienupontheRevenueoftheSystemandAssessmentsastheBondsbeingrefunded. (h)It will spend the proceeds of the BondswithduediligencetocompletionofthepurposesspecifiedhereinandwillmakenouseoftheproceedsoftheBondsorotherfundsoftheCityatanytimeduringthetermoftheBondswhichwillcausesuchBondstobearbitragebondswithinthemeaningofSection103(c)of the United States Internal RevenueCodeof1954,as amended,and applicable regulationsthereunder. Section 10.Money in the Revenue Fund shall be used for i the following purposes only and in the following order of priority: First:to pay the Costs of Maintenance andOperation; Second:to pay the interest on Prior Lien Bonds; Third:to pay the principal of Prior Lien Bonds; -16 - Fourth:to make all payments required to be madeintotheReserveAccountcreatedtosecurethepaymentofthePriorLienBonds; 8 Fifth:to pay the interest on the 1981 Bonds,theBondsandanyFutureParityBonds: Sixth:to pay the principal of the 1981 Bonds,theBondsandanyFutureParityBonds; Seventh:to make all payments required to be madeintotheRevenueBondFundforthepaymentoftheprincipalofthe1981Bonds,theBondsandanyFutureParityBondswhich areTermBonds; Eighth:to make all payments required to be madeintotheReserveAccountintheRevenueBondFundcreatedtosecurethepaymentofthe1981Bonds,the Bonds and any FutureParityBonds; Ninth:to make all payments required to be madeintoanyrevenuebondredemptionfundorwarrantredemptionfundanddebtserviceaccountorreserveaccountcreatedtopayandsecurethepaymentoftheprincipalofandinterestonanyrevenuebondsorreve-nue warrants of the City having a lien upon8theRevenueoftheSystemjuniorandinferiortothelienthereonforthepay-ment of the principal of and interest onthe1981Bonds,the Bonds and Future ParityBonds; Tenth:to retire by redemption or purchase in theopenmarketanyoutstandingrevenuebondsorrevenuewarrantsoftheCity,to makenecessaryadditions,betterments,improve-ments and repairs to or extensions andreplacementoftheSystem,or for any otherlawfulCitypurposes. Section 11.In the event the City shall issue advance refunding bonds pursuant to the laws of the State of Washington, or have money available from any other lawful source,to pay the principal of and interest on the Bonds or such portion thereof included in the refunding plan as the same become due and pay- 8 able and to refund such then outstanding bonds and to pay the costs of refunding,and shall have irrevocably set aside for and pledged to such payment and refunding,money and/or direct obli- gations of the United States of America or other legal invest- ments sufficient in amount,together with known earned income from the investment thereof,to make such payments and to -17 - accomplish the refunding as scheduled (hereinafter called the "trust account")and shall irrevocably make provisions for i redemption of such Bonds,then in that case all right and inter- est of the owners or holders of the Bonds to be so retired or refunded and the appurtenant coupons (hereinafter collectively called the "defeased Bonds")in the covenants of this ordinance, in the Revenue of the System,funds and accounts,including Assessments,obligated to the payment of such bonds shall there- after cease and become void,except such owners and holders 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 available for such payment,shall have the residual right to receive payment of the principal of and interest on the defeased Bonds from the 9 Revenue of the System and Assessments without any priority of lien or charge against that Revenue and Assessments or covenants with respect thereto except to be paid therefrom.After the establishing and full funding of such trust account,the City may then apply any money in any other fund or account estab- 11shed for the payment or redemption of the defeased Bonds to any lawful purposes as it shall determine,subject only to the rights of the holders of any other bonds then outstanding. In the event that the refunding plan provides that the Bonds being refunded or the refunding bonds to be issued be secured by cash and/or direct obligations of the United States of America or other legal investments pending the prior redemp- io ofrovhosee Bondse nrefund duda dr diteuch rh ig 11 nsplanthe United States of America or other legal investments are pledged irrevocably for the prior redemption of those Bonds included in the refunding plan,then only the debt service on the Bonds which are not defeased Bonds and the refunding bonds,the pay- ment of which is not so secured by the refunding plan,shall be -18 - included in the computation of coverage for issuance of Future Parity Bonds and the annual computation of coverage for deter- 8 mining compliance with the rate covenants. Section 12.The Bonds shall be in a form consistent with this ordinance,shall be printed or 11thographed on good bond paper,and shall be signed by the facsimile signature of the Mayor,attested by the manual signature of its City Clerk,shall have a facsimile reproduction of the seal of the City imprinted thereon,and the interest coupons attached thereto shall bear the facsimile signatures of the Mayor and the City Clerk. Section 13.Seattle-Northwest Securities Corporation of Seattle,Washington,has submitted an offer to purchase the Bonds at a price of $95.45 per each $100 of par plus accrued interest to the date of delivery of the Bonds,the City to 9 furnish the unqualified approving legal opinion of Roberts & Shefelman,municipal bond counsel of Seattle,Washington,cover- ing the Bonds,which opinion shall state that bond counsel has not reviewed and thus expresses no opinion concerning the completeness or accuracy of any official statement,offering circular or other sales material relating to the issuance of the Bonds or otherwise used in connection with the Bonds.The City Council,being of the opinion that it is in the best interests of the City to accept such offer,accepts the same.The Bonds shall immediately upon their execution be delivered to the pur- chaser upon payment for the Bonds in accordance with such offer.The accrued interest received shall be deposited in the e eBo dhe W terTheardeS wecreCated in then Foffice1983the Ch "Construction Fund"),into which fund shall be deposited the principal proceeds of the Bonds.Pending the expenditure of such principal proceeds in carrying out the Plan of Additions and Betterments,such proceeds may be invested in any legal -19 - investment and the investment income received may be retained in the Construction Fund and expended for the purposes of such fund. 8 Section 14.This ordinance shall take effect and be in force five days after its passage,approval and legal publication. PASSED by the City Council of the City of Moses Lake, Washington,at a regular open public meeting thereof and APPROVED by the Mayor this 22nd day of February,1983. CITY OF MOSES LAKE,WASHINGTON V Mayor ATTEST: 8 ømCity C1 FORM APPROVED: /City ttorney 0145m 8 -20 -