1184_00001CITY OF MOSES LAKE,WASHINGTON
ORDINANCE NO.1184
i
AN ORDINANCE of the City of Moses Lake,Washington providing fortheissuanceof$6,120,000par value of "Water and Sewer RevenueRefundingBonds,1985"to refund,pay and retire the outstanding Water
and Sewer Revenue Bonds,1965,Water and Sewer Revenue Bonds,1967,Water and Sewer Revenue Bonds,1973,Water and Sewer RevenueBonds,1981 and Water and Sewer Revenue Bonds,1983 of the City;fixing the date,form,maturities,terms and covenants of such bonds¡creating a special refunding account;creating a special bondredemptionfundtoprovideforthepaymentofthebondsauthorizedhereinandbondshereafterissuedonaparitytherewith;providing forandauthorizingthepurchaseofUnitedStatesgovernmentobligationsoutoftheproceedsofthesaleofthebondshereinauthorizedandoutofmoniespresentlyonhandinthebondredemptionfundsforthebondsbeingrefundedandfortheuseandapplicationofthemoniestobederivedfrominvestmentofsuchobligations;providing for the paymentandredemptionoftheoutstandingbondstoberefunded;approving asafekeepingagreement¡and confirming the sale of the bonds hereinauthorizedtoSeattle-Northwest Securities Corporation of Seattle,i Washington.
i
TABLE OF CONTENTS
Section Page
No.Title No.
1 Definitions 2
2 Authorizatitmof the Bonds 513PriorRedemption6
4 BondFundand Accounts 7
5 Priority of Lien 10
6 Covenants 10
7 Defeasance 13
8 Revenue Pund and Priority of Payments 14
9 Future Parity Bonds 15
10 Refunding Plan 16
11 Redemption of Refunded Bonds 18
12 Safekeeping Agreenaent 19
13 Form of Bonds 19
14 Executicm of the Bonds 22
I 15 Lost orStolenBonds 23
16 BondRegistrm?23
17 Use and Application of Bond Proceeds 23
18 Saleof the Bonds 24
19 Supplemental Ordinances 24
20 Effective Date 25
i
CITY OF MOSESLAKE,WASHINGTON
ORDINANCE NO.1184
AN ORDINANCE of the City of Moses Lake,Washington providing fortheissuanceof$6,120,000par value of "Water and Sewer RevenueRefundingBonds,1985"to refund,pay and retire the outstanding Water
i and Sewer Revenue Bonds,1965,Water and Sewer Revenue Bonds,1967,Water and Sewer Revenue Bonds,1973,Water and Sewer RevenueBonds,1981 and Water and Sewer Revenue Bonds,1983 of the City;fixing the date,form,maturities,terms and covenants of such bonds;ereating a special refunding account;creating a special bondredemptionfundtoprovideforthepaymentofthebondsauthorizedhereinandbondshereafterissuedonaparitytherewith;providing forandauthorizingthepurchaseofUnitedStatesgovernmentobligationsoutoftheproceedsofthesaleofthebondshereinauthorizedandoutofmoniespresentlyonhandinthebondredemptionfundsforthebondsbeingrefundedandfortheuseandapplicationofthemoniestobederivedfrominvestmentofsuchobligations;providing for the paymentandredemptionoftheoutstandingbondstoberefunded;approving asafekeepingagreement;and confirming the sale of the bonds hereinauthorizedtoSeattle-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,which combined water system and system of sewerage
together with all additions thereto and betterments and extensions thereofIhereaftermade(hereinafter defined as the "System");and
WHEREAS,the City thereafter issued and sold $220,000par value of "Water
and Sewer Revenue Bonds,1965"pursuant to Ordinance No.532 to pay the cost of
improvements to the System specified and adopted by Ordinance No.532,$315,000
par value of "Water and Sewer Revenue Bonds,1967"pursuant to Ordinance No.
573 to pay the cost of improvements to the System specified and adopted by
Ordinance No.573 and $1,100,000par value of "Water and Sewer Revenue Bonds,
1973"pursuant to Ordinance No.670 to pay part of the cost of improvements to
the System specified and adopted by Ordinances No.652 and No.670,all of such
bonds being issued on a parity of lien with the "Water and Sewer Revenue Bonds,
Series A";and ,
i
WHEREAS,the City heretofore issued and sold $985,000par value of "Water
and Sewer Revenue Bonds,1981"pursuant to Ordinance No.1039 to pay part of the
costs of certain additions and betterments to and extensions and improvements of
the System constructed in Utility Local Improvement Distriets No.1 and No.2
specified and adopted by Ordinance No.999 as amended by Ordinance No.1039 and
$4,200,000par value of "Water and Sewer Revenue Bonds,1983"pursuant to
Ordinance No.1093 to pay part of the cost of improvements to the System
specified and adopted by Ordinance No.1093,which 1981 and 1983 bonds constitute
CITY OF MOSES LAKE-·Water and Sewer Bond Ordinance -1
a lien and charge on the net revenue of the System subordinate to the "Water and
Sewer Revenue Bonds,Series A";and
WHEREAS,after due consideration the City Council has determined that by
refunding the outstanding 1965,1967,1973,1981 and 1983 bonds (the "Outstanding
Bonds")by the issuance and sale of the water and sewer revenue refunding bonds of
the City authorized herein (the "Bonds")and by the use of monies presently on hand
in the bond redemption funds for the Outstanding Bonds a substantial savings will
be effected by the difference between the principal and interest cost over the life
of the Bonds and the principal and interest cost over the life of the Outstanding
Bonds;and
WHEREAS,it is in the best interests of the City to change the covenants
relating to reserve requirements for all water and sewer revenue bonds of the City
and to eliminate all liens and charges on the revenue of the System which are
superior to the Bonds;and
WHEREAS,in order to effect such refunding in the manner that will be most
advantageous to the City,its taxpayers and utility users,it is hereby found
necessary and advisable that certain Acquired Obligations (hereinafter defined)be
purchased out of the proceeds of the sale of the Bonds and monies presently on
hand in the respective bond redemption funds for the Outstanding Bonds,which
Acquired Obligations shall bear interest and mature at such time or times as
necessary to pay the principal of and interest on such outstanding bonds as they
shall become due and to redeem all of the remaining principal of such bonds on the
respective call dates hereinafter set forth;and
WHEREAS,Seattle-Northwest Securities Corporation of Seattle,Washington,
has offered to purchase the Bonds on the terms and conditions hereinafter set
forth,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 words shall
i have the following meanings:
(a)"Annual Debt Service"shall mean,for any calendar year,all of the
principal of and interest on the then outstanding Bonds and Future Parity Bonds due
in such year,except the principal of outstanding Term Bonds due in such year,plus
all mandatory redemption or sinking fund requirements which mature or come due
in such year on any outstanding Term Bonds,less all capitalized interest payable
from the proceeds of any Parity Bonds.
CITY OF MOSES LAKE-Water and Sewer Bond Ordinance -2
(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 additions and improvements to and extensions of the
System if such assessments are pledged to be paid into the Bond Fund,including
any installments of assessments and any interest or penalties which may be due
i thereon.
(c)"Average Annual Debt Service"shall mean the sum of the Annual
Debt Service on the then outstanding Bonds and Future Parity Bonds divided by the
number of years to the last maturity or mandatory redemption date thereof.
(d)"Bond Fund"shall mean that special fund of the City known as the
"Water and Sewer Revenue Bond Fund,1985"created by this ordinance for the
payment of the principal of and interest on the the Bonds and a11Future Parity
Bonds of the City.
(e)"Bond Registrar"shall mean either of the fiscal agencies of the
State of Washington in the cities of Seattle,Washington,or New York,New York,
in their capacity as registrar for the Bonds.
(f)"Bonds"shall mean the $6,120,000par value of "Water and Sewer
Revenue Refunding Bonds,1985"of the City authorized by and to be issued for theipurposesprovidedinandpursuanttothisordinanee.
(g)"1965Bonds"shall mean the outstanding "Water and Sewer Revenue
Bonds,1965"of the City issued pursuant to Ordinance No.532 as amended by
Ordinance No.533 and dated July 1,1965,of which $61,000are outstanding.
(h)"1967Bonds"shall mean the outstanding nWater and Sewer Revenue
Bonds,1967"of the City issued pursuant to Ordinance No.573 and dated
November 1,1967,of which $315,000are outstanding.
(i)"1973Bonds"shall mean the outstanding "Water and Sewer Revenue
Bonds,1973"of the City issued pursuant to Ordinance No.670 and dated July 1,
1973,of which $1,100,000 are outstanding.
(j)"1981Bonds"shall mean the outstanding "Water and Sewer Revenue
Bonds,1981"of the City issued pursuant to Ordinance No.1039 and dated
December 1,1981,of which $920,000are outstanding.
(k)"1983Bonds"shall mean the outstanding "Water and Sewer Revenue
Bonds,1983"of the City issued pursuant to Ordinance No.1093 and dated March 1,
1983,of which $3,950,000are outstanding.
CITY OF MOSES LAKE-Water and Sewer Bond Ordinance -3
(1)"City"shall 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.
(m)"Costs of Maintenance and Operation"shall mean all necessary
operating expenses,current maintenance expenses,expenses of reasonable upkeep
i and repairs,and insurance and administrative expense,but excludes depreciation,
payments for debt service or into reserve accounts,costs of capital additions to or
replacements of the System,municipal taxes or payments to the City in lieu of
taxes.
(n)"Council"shall mean the governing body of the City as the same
shall be duly and regularly constituted from time to time.
(o)"Debt Service Account"shall mean the account of that name
created in the Bond Fund for the payment of the principal of,premium,if any,and
interest on the Parity Bonds.
(p)"Future Parity Bonds"shall mean all revenue bonds of the City
issued after the date of the issuance of the Bonds and having a lien upon the
Revenue of the System for the payment of the principal thereof and interest
i thereon equal to the lien upon such revenue for the payment of the principal of and
interest on the Bonds.
(q)"Maximum Annual Debt Service"shall mean the maximum amount
Annual Debt Service which will become due in any future year on then outstanding
Parity Bonds.
(r)"Net Revenue"shall mean the Revenue of the System less the Costs
of Maintenance and Operation.
(s)"Parity Bonds"shall mean the the Bonds and any Future Parity
Bonds.
(t)"Refunded Bonds"shall mean the the 1965 Bonds,the 1967 Bonds,
the 1973 Bonds,1981 Bonds and the 1983 Bonds.
(u)"1985Refunding Account"shall mean the account of that name
i created by this ordinance as a trust fund for the refunding of the Refunded Bonds.
(V)"Reserve Account"shall mean the account of that name erested in
the Bond Pund for the purpose of securing the payment of the principal of and
interest on the Parity Bonds.
(w)"Reserve Requirement"shall mean the amount which is the lesser
of 1.25 times the Average Annual Debt Service or the Maximum Annual Debt
Service.
CITY OF MOSES LAKE-Water and Sewer Bond Ordinance -4
(x)"Revenue Fund"shall mean that Water and Sewer Revenue Fund of
the City created by Ordinance No.135 of the City.
(y)"Revenue of the System"shall mean all earnings,revenues and
monies received by the City from or on account of the operation of the System,
including the income from investments on money in the Revenue Fund and the Bond
Fund or from any other investment thereof,including any federal or state
reimbursements or operating expenses to the extent such expenses are included as
Costs of Maintenance and Operation,but not including Assessments or grants for
capital purposes.
(z)"System"shall mean the existing sanitary sewage collection and
treatment system of the City,including facilities for the collection and disposal of
storm water runoff,as it now exists and as it may later be added to,extended and
improved,and the existing water supply and distribution system of the City,as it
now exists and may later be added to,extended and improved,for as long as the
Bonds remain outstanding.
(aa)"Term Bonds"shall mean any Parity Bonds identified as such in the
ordinance authorizing the issuance thereof,the payment of which is provided for by
a requirement for mandatory deposits of money into the Bond Fund in accordance
with a mandatory sinking fund requirement."1985Term Bonds"shall mean the
Bonds maturing July 1,2003.
(bb)"Treasurer"shall mean the Finance Director or such other officer
of the City as the Council shall designate by ordinance to carry out the duties of a
city treasurer under the laws of the State of Washington or ordinances of the City.
Section 2.Authorization of the Bonds.For the purpose of carrying out the
refunding plan adopted by Section 10 of this ordinance,the City shall issue and sell
its Water and Sewer Revenue Refunding Bonds,1985 in the principal amount of
16,120,000(hereinbefore defined as the "Bonds").The Bonds shall be dated
November 1,1985;shall be fully registered;shall be in denominations of $5,000
each or any integral multiple of $5,000;shall bear interest payable semiannually on
i the first days of January and July of each year,commencing July 1,1986,until the
Bonds with interest are paid in full.Both principal of and interest on the Bonds
shall be payable in lawful money of the United States of America to the registered
owner or owners thereof or their nominees.Interest on the Bonds shall be paid by
check or draft mailed to the registered owners or their nominees at the addresses
appearing on the records maintained by the Bond Registrar as of the 15th day of
the month preceding the interest payment date.Principal of the Bonds shall be
CITY OF MOSESLAKE-Water and Sewer Bond Ordinance -5
payable upon presentation and surrender of the Bonds to the Bond Registrar by the
registered owners or their nominees.Principal of and interest on the Bonds are
payable solely out of the Bond Fund.
The Bonds shall be numbered and bear such additional designation as the Bond
Registrar shall determine,shall bear interest and shall mature serially in
i accordance with the following schedule:
Maturity Date Maturity Amount Interest Rate
July 1,1986 $250,000 5.500 %July 1,1987 255,000 6.250
July 1,1988 265,000 6.750
July 1,1989 275,000 7.200
July 1,1990 285,000 7.600
July 1,1991 300,000 7.900
July 1,1992 265,000 8.200
July 1,1993 280,000 8.500
July 1,1994 310,000 8.700
July 1,1995 335,000 8.900
July 1,1996 360,000 9.000
July 1,1997 300,000 9.100
July 1,1998 335,000 9.200
July 1,1999 -0-
July 1,2000 -0-
Term Bonds
July 1,2003 $2,305,000 9.625 %
for Bond n a
yonduhorhi
ed e om
natindn fe teraulthe Bonds are int chaangeable
and of the same interest rate and maturity.Bonds may be transferred only if
endorsed in the manner provided thereon and surrendered to the Bond Registrar.
Such exchange or transfer shall be without cost to the owner or transferee.The
City may deem the person in whose name each Bond is registered to be the
absolute owner thereof for the purpose of receiving payment of the principal of and
interest on such Bond and for any and all other purposes whatsoever.
Payment of principal of and interest on the Bonds shall be insured for the
benefit of the owners of the Bonds by AMBAC Indemnity Corporation,a Wisconsin
stock insurance company,("AMBAC")pursuant to a municipal bond insurance policy
to be issued to the City and delivered simultaneously with the delivery of the Bonds
to the initial purchasers thereof,i Section 3.Prior Redemption.The City reserves the right to redeem prior to
their stated maturity dates,the bonds maturing on or after July 1,1997,in whole
or in part in inverse order of maturity,and by lot within a maturity in integral
multiples of $5,000 (in such manner as the Bond Registrar shall determine)on
July 1,1996,or on any semiannual interest payment date thereafter,at par plus
accrued interest to date of redemption.
CITY OF MOSESLAKE-Water and Sewer Bond Ordinance -6
Notice of any such intended redemption shall be given not less than thirty
(30)days nor more than forty (40)days prior to the date fixed for redemption by
first class mail,postage prepaid,to the registered owner of any Bond to be
redeemed at the address appearing on the registration books of the Bond Registrar.
The requirements of this section shall be deemed to be complied with when notice
i is mailed as herein provided,whether or not it is actually received by the owner of
any Bond.Interest on any Bonds so called for redemption shall cease on the date
fixed for redemption unless the Bond or Bonds so called are not paid in full upon
presentation made pursuant to such call.In addition,such redemption notice shall
be sent to Moody's Investors Service,Inc.and Standard &Poor's Corporation,at
their respective offices in New York,New York,but the mailing of such notice to
such corporations shall not be a condition precedent to the redemption of such
Bonds.
The City reserves the right to purchase any of the Bonds in the open market
for retirement only at any time that Revenue of the System is available after
providing for the payments required by paragraphsit throughg of Section 8
of this ordinance at any price not to exceed the par amount of the Bonds so
purchaSeedplus acorued interest to the date of sue phereehbyæereated
and established
in the office of the Treasurer a special fund of the City to be known as the Water
and Sewer Revenue Bond Fund,1985 (hereinbeforedefined as the "Bond Fund")
which is divided into a Debt Service Account and a Reserve Account.The Bond
Fund is to be drawn upon for the sole purpose of paying the principal of,premium,
if any,and interest on the Bonds and any Future Parity Bonds as the same shall
become due.
All monies in the Bond Fund may be kept in cash or deposited in institutions
permitted by law in an amount in each institution not greater than the amount
insured by any department or agency of the United States Government or may be
invested or reinvested in any legal investment permitted to the City by law.Such
investments shall mature at such time or times as necessary to pay principal of andiinterestonParityBondsasthesamebecomedue,to redeem Term Bonds on the
applicable mandatory redemption dates set forth in each ordinance authorizing the
issuance of Term Bonds and to make transfers from the Reserve Account as
provided in subsection B of this section.Investments of monies in the Bond Fund
shall be identified to the Bond Fund,and such monies shall not be commingled with
other monies of the City for any purpose whatsoever.
CITY OF MOSES LAKE--Water and Sewer Bond Ordinanee -7
Interest earned on any such ínvestments or on such bank deposits shall be
deposited in and become a part of the Reserve Account until the Reserve
Requirement shall have been aceumulated therein,after which such interest shall
be applied to the Debt Service Aeoount or the Revenue Fund in the same manner as
hereinafter provided for other excess amounts in the Reserve Account.
I A.Debt Service Account.So long as Bonds are outstanding against the Bond
Fund,the City irrevocably binds and obligates itself and directs the Treasurer to
set aside and pay into the Bond Fund all Assessments paid in Utility Local
Improvement Districts No.I and No.2 and out of the Revenue of the System
deposited in the Revenue Fund the following fixed amounts necessary to pay the
principal of and interest on the Bonds as the same respectively become due and
payable:
(a)On or before the 20th of each month,beginning with themonthofNovember,1985,and continuing through June,1986,anamounttogetherwithothermoniesavailableintheDebtServiceAccountthereforequalto1/8 of the interest on the Bonds coming due
on July 1,1986.
(b)On or before the 20th of each month,beginning with themonthofNovember,1985,and continuing through June,1986,anamounttogetherwithothermoniesavailableintheDebtService
Account therefor equal to 1/8 of the principal of the Bonds maturing onJuly1,1986.
(c)On or before the 20th day of each month,beginning with themonthofJuly,1986,and continuing until all of the Bonds are paid ordulyprovidedfor,an amount together with other monies available intheDebtServiceAccountthereforequalto1/6 of the interest nextcomingdueontheBonds;and
(d)On or before the 20th day of each month,beginning with themonthofJuly,1986,and continuing until June 1,2000 or such earlier
date that all of the Bonds (other than the 1985 Term Bonds)are paid ordulyprovidedfor,an amount together with other monies available in
the Debt Service Account therefor equal to 1/12 of the principal nextcomingdueontheBonds.
(e)So long as 1985 Term Bonds are outstanding,on or before the20thdayofeachmonth,beginning with July,2000,and continuing until
all of the 1985 Term Bonds are paid or duly provided for,an amounttogetherwithothermoniesavailableintheDebtServiceAccountthereforequalto1/12 of the Sinking Fund Installment next coming dueinaccordancewiththefollowingschedule(as adjusted as hereinafterprovidedinthissubsection):
Sinking Fund Installment
i 1999 S380,0002000425,0002001475,000
2002 530,000
2003 (maturity)495,000
The amounts deposited pursuant to paragraph (e)of this section shall be used to
call and retire the 1985 Term Bonds.The City hereby irrevocably calls for
redemption on July 1,1999,July 1,2000,July 1,2001 and July 1,2002,
respectively,that principal amount of the 1985 Term Bonds equal to the scheduled
CITY OF MOSES LAKE-Water and Sewer Bond Ordinance -8
Sinking Fund Installment (asadjusted).At least 90 days before the respective call
dates the City Treasurer is hereby authorized and directed to certify to the Bond
Registrar the amount of the applicable adjusted Sinking Fund Installment and the
Bond Registrar is hereby authorized and directed to determine by lot,and to give
notice of redemption for,1985 Term Bonds in an aggregate principal amount equalitosuchadjustedSinkingFundInstallmentatthetimeandinmannersetforthin
Section 3 of this ordinance.
If any 1985 Term Bonds are redeemed pursuant to a call for optional
redemption or are purchased and retired as provided in Section 3 of this ordinance,
the City shall adjust one.or more of the Sinking Fund Installments,in the discretion
of the City,in a total amount equal to the amount of 1985 Term Bonds so
redeemed or retired.
B.Reserve Account.The Treasurer is hereby authorized and directed to
transfer amounts from the reserve account in the Water and Sewer Revenue Bond
Fund,1981 created by Ordinance No.1039 and from the Water and Sewer Revenue
Bond Reserve Fund created by Ordinance No.290 which will equal the sum of
$768,676.25,and to deposit such monies into the Reserve Account in the Bond
Fund.
The City hereby covenants and agrees that it will pay out of the Revenue
Fund into the Reserve Account in the Bond Fund,in five substantially equal annual
payments such amounts which,with monies to be transferred into the Reserve
Account as hereinabove provided,will equal,by no later than November 1,1990,
the Reserve Requirement.
The-City covenants and agrees that it will at all times thereafter maintain in
the Reserve Account an amount equal to the Reserve Requirement,except for
withdrawals therefrom to make up deficiencies in the Debt Service Account as
authorized by this subsection.Monies in the Reserve Account may be,and so long
as necessary under Section 103(c)of the Internal Revenue Code of 1954,as
amended,and applicable regulations thereunder shall be,withdrawn within thirty
i days after each principal payment date or optional or mandatory redemption date
in such amount as is necessary to reduce the balance in the Reserve Account to the
amount of the Reserve Requirement.Amounts so withdrawn from the Reserve
Account shall be deposited in the Debt Service Account up to an amount,together
with other monies then in the Debt Service Account,equal to principal of,
premium,if any,and interest on outstanding Parity Bonds to become due or to be
paid pursuant to a call for mandatory or optional redemption during the succeeding
CITY OF MOSES LAKE-Water and Sewer Bond Ordinance -9
twelve months;and any amounts in excess thereof shall be deposited in the
Revenue Fund.
In the event that there shall be a deficiency in the Debt Service Account in
the Bond Fund to meet maturing installments of either principal of or interest on
the Parity Bonds outstanding,such deficiency shall be made up from the Reserve
i Account by the withdrawal of cash therefrom.Any deficiency erested in the
Reserve Account by reason of any such withdrawal shall then be made up from
monies from the Revenue Fund and/or Assessments which shall be first available
after making necessary provision for the required payments into the Debt Service
Account.
In the event any Parity Bonds are ever refunded,the monies set aside in the
Reserve Account to secure the payment of such Parity Bonds may be used to retire
Parity Bonds,or may be transferred to any other reserve account which may be
areated to secure the payment of the bonds issued to refund such Parity Bonds,as
long as the monies left remaining in the Reserve Account is at least equal to the
Reserve Requirement for the remaining Parity Bonds.
If the City shall fail to set aside and pay into the Bond Fund the amounts
which it has obligba ed is
I a i te
tnyt set aside and pay therein,the holder
Section 5.Priority of Lien.The Assessments in Utility Local lmprovement
Distriets No.1 and No.2 and amounts pledged to be paid out of the Revenue Fund
into the Debt Service Account in the Bond Fund,and pledged to be paid into the
Reserve Account in the Bond Fund,are hereby declared to be a prior lien and
charge upon the money in the Revenue Fund superior to all other charges of any
kind or nature,except the Costs of Maintenance and Operation of the System,and
shall be equal in rank with the charge and lien upon such Revenue and Assessments
for any Future Parity Bonds.
The Council hereby declares that,in fixing the amounts to be paid into the
Bond Fund and the Reserve Account therein as hereinbefore provided,it has
i exercised due regard for the Costs of Maintenance and Operation of the System
and has not obligated the City to set aside into the Bond Fund and Reserve Account
a greater amount or 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.
Section 6.Covenants.The City hereby covenants and agrees with the owner
and holder of each of the Bonds as follows:
CITY OF MOSESLAKE-Water and Sewer Bond Ordinance -10
(a)It will fix,maintain and collect rates and charges for the use of the
services and facilities and aB commodities sold,furnished or supplied by the
System to ensure that the Revenue of the System,together with any Assessments,
is sufficient to pay all Costs of Maintenance and Operation and debt service on the
Bonds,as well as any other amounts that the City is obligated to pay from the
i Revenue of the System,and that the Net Revenues together with Assessments in
each calendar year will equal at least 1.25 times Maximum Annual Debt Service.
(b)It will at all times maintain and keep the System in good repair,
working order and condition,and will at all times operate such utility and the
business in connection therewith in an efficient manner and at a reasonable cost.
(e)It will not sell,lease,mortgage or in any manner eneumber or
dispose of all the property of the System,unless provision is made for the payment
into the Bond Fund of a sum sufficient to pay the principal of and interest on all
Parity Bonds then outstanding;and it will not sell,lease,mortgage or in any
manner eneumber or dispose of any part of the property of the System that is used,
useful and material to the operation thereof,unless provision is made for the
replacement thereof,or for payment into the Bond Fund of an amount of the
revenue received which shall not be less than an amount which shall bear the same
ratio to the amount of the then outstanding Parity Bonds as the revenue available
for debt service for such outstanding Parity Bonds for the twelve months preceding
such sale,lease,eneumbrance or disposal from the portion of the utility sold,
leased,eneumbered or disposed of bears to the revenue available for debt service
for outstanding Parity Bonds from the entire System for the same period.Any such
moneyso paid into the Bond Fund shall be used to retire such outstanding Parity
Bonds at the earliest possible date.
(d)It will,while any Parity Bonds remain 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 prepare and,at the
written request of the original purchaser or purchasers of Parity Bonds or any
i subsequent holders or registered owners thereof it will furnish to such holders or
registered owners,complete operating and income statements of the System in
reasonable detail showing the financial condition of the water and sewer
departments of the City and compliance with the terms and conditions of this
ordinance not more than 120 days after the elose of such calendar year;and it will
grant any holders or registered owners of at least 25%of the then outstanding
Bonds the right at all reasonable times to inspect the System and all records,
CITY OF MOSES LAKE-Water and Sewer Bond Ordinance -11
accounts and data of the City relating thereto.Upon request of any holder or
registered owner of any outstanding Parity Bonds,it will also furnish to such holder
or registered owner a copy of the most recently completed audit of the City's
accounts by the State Auditor of Washington,or such other audit as is authorized
by law in lieu thereof.
1 (e)It will not furnish water or sanitary sewage disposal service or any
other services of the System to any customer whatsoever free of charge and will
promptly take legal action to enforce collection of all delinquent accounts.
(f)It will promptly colleet all outstanding Assessments and pay the
same into the Bond Fund.
(g)It will carry the types of insurance on the property of the System in
amounts normally carried by private water and sewer companies engaged in the
operation of water and sewerage systems or will implement a self-insurance
program with Revenues of the System and other legally available monies which
shall be adequate,in the judgment of the Council,to protect the City and the
owners of the Parity Bonds against loss.The cost of such insurance or payments
into a self-insurance program fund for Revenue of the System shall be considered
f
erihe Costs of Maintenance and Olpeprrao
d f ar
rd is en the1United States
further agrees to take out and maintain such insurance on all or such portion of the
System on which such war risk insurance may be written in an amount or amounts
to cover adequately the value thereof.
(h)It wiß maintain in the Revenue Fund,after making the monthly
payments into the Bond Pund as hereinbefore provided,monies sufficient to meet
the Costs of Maintenance and Operation on a current basis and win pay all Costs of
Maintenance and Operation and the debt service requirements of the Parity Bonds
and otherwise meet the obligations of the City herein set forth.
(i)It wiß not create any special fund or funds to pay or secure the
payment of debt service on,or authorize or issue,any other revenue bonds,
warrants or obligations which wiß rank on a parity with or have any priority over
the payments into or the monies in the Bond Fund,except as provided in Section 9
of this ordinance relating to the issuance of Future Parity Bonds,nor will it create
or permit any other lien or encumbrance which may be reasonably expected to
impair the security of the Bonds.
(j)It wiß make no use of the proceeds of the Bonds or other funds of
the City at any time during the term of the Bonds which,if such use had been
CITY OF MOSES LAKE-Water and Sewer Bond Ordinance -12
reasonably expected at the date that the Bonds are issued,would have caused such
Bonds to be arbitrage bonds within the meaning of Section 103(e),or which would
cause the Bonds to become industrial development bonds within the meaning of
Section 103(b),of the United States Interna1Revenue Code of 1954,as now
amended,and applicable regulations thereunder.
I Section 7.Defeasance.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,premium,if any,and interest
on the Parity Bonds or such portion thereof included in the refunding plan as the
same become due and payable and to refund all then outstanding Parity Bonds to be
so refunded and to pay the costs of refunding,and shall have irrevocably set aside
in a separate account (hereinattercalled the "trustaccount")for and pledge to
such payment and refunding,money and/or direct obligations of the United States
of America sufficient in amount,together with known earned income from the
investment thereof,to make such payments and to accomplish the refunding as
scheduled and shall irrevocably make provision for redemption of such Parity
Bonds,then in that case all right and interest of the owners of the Parity Bonds to
be so tri eor refunded he ene
nh
Realled the "defensedm,ady
in
funds and accounts,including Assessments,obligated to the payment and security
of such Parity Bonds shall thereafter cease and become void,except such owners
and holders shall have the right to receive payment of the principal of,premium,if
any,and interest on the defeased Parity 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 Parity Bonds from the 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 monies in any other fund or account established for the payment or
redemption of the defeased Parity Bonds to any lawful purposes as it shall
determine,subject only to the rights of the holders and owners of any other Parity
Bonds then outstanding.Only the debt service on Parity Bonds which are not
defeased Parity Bonds under the refunding plan shall be included in the
computation of coverage for issuance of Future Parity Bonds and in the annual
CITY OF MOSESLAKE-Water and Sewer Bond Ordinance -13
eomputation of coverage for determining compliance with the rate covenant set
forth in subsection 6(a)of this ordinance.
In the event and to the extent that principal of,premium,if any,and interest
on the Bonds shall be paid by AMBAC pursuant to a municipal bond insurance policy
referred to in Section 2 of this ordinance,the pledge of the monies and/or direct
i obligations in the trust account and aB covenants,agreements and obligations of
the City to the owners of defeased Parity Bonds shall continue until the defensed
Parity Bonds are redeemed and paid by the City;and AMBAC shall be subrogated
to the rights of the owners of such defeased Parity Bonds.
Section 8.Revenue Fund and Priority of Payments.Pursuant to Section 7 of
Ordinanee No.135,the Revenue Fund was created into which all gross earnings and
revenue of the System must be paid and eollected.All Costs of Maintenance and
Operation of the System,all costs of additions,improvements,betterments and
repairs to and replacements and extensions of the System (exceptwhen the same
are financed by the issuance of bonds,coupon warrants,or warrants drawn on other
special funds of the City),and all payments which may be required by any
ordinances of the City passed subsequent to Ordinance No.135 to be made into any
pa n r gu
an feudnand/or reserve fund opinci
al
oera
d
terrestMon
an
wea
r
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 following order of priority:
:To pay Costs of Maintenance and Operation of the System;
Second:To pay interest on the Bonds and any Future Parity Bonds;
:To pay the principal of the Bonds and any Future Parity Bonds
and to pay and redeem Term Bonds in accordance with any mandatory redemption
provisions contained in the ordinance authorizing such Term Bonds;
Fourth:To make all payments required to be made into the Bond Fund
for the payment of the principal of all Term Bonds which are not subject to
mandatory redemption prior to maturity;I g:To make all payments required to be made into the Reserve
Account in the Bond Pund created to secure the payment of the Bonds and any
Future Parity Bonds;
g:To make all payments required to be made into any redemption
fund and debt service account or reserve account created to pay and secure the
payment of the principal of and interest on any bonds,notes,warrants or other
CITY OP MOSES LAKE--Water and Sewer Bond Ordinance -14
obligations of the City having a lien upon the Revenue of the System junior and
inferior to the lien thereon for the payment of the principal of and interest on the
Bonds and Future Parity Bonds;
Seventh:To retire by redemption or purchase in the open market any
outstanding bonds,notes,warrants or other obligations of the Revenue Fund,to
i make necessary additions,betterments,improvements and repairs to or extensions
and replacement of the System,or for any other lawful purposes.
Monies in the Revenue Fund,until needed,may be invested in any lawful
investment,and the earnings from such investments shall be deposited in the
Revenue Pund.
Section 9.Future Parity Bonds.The City reserves the right for the purpose
of:
(1)acquiring,constructing and installing additions andimprovementstoandextensionsandbettermentsof,aequiring
necessary equipment for,or making necessary replacements ofequipmentorcapitalimprovementstotheSystem;or
(2)exchanging or purchasing and retiring prior to or at theirmaturityanyoutstandingwaterandsewerrevenuebondsoftheCity;
to issue additional and/or refunding water and sewer revenue bonds (hereinbefore
defined as "Future Parity Bonds")and to make payments into the Bond Fund for the
payment of such Future Parity Bonds from the Revenue of the System deposited in
the Revenue Fund,together with Assessments pledged to the payment of such
Future Parity Bonds,sufficient to pay the principal of and interest on such Future
Parity Bonds,which payments may rank equally with payments from the Revenue
of the System pledged to made into the Bond Fund for the Bonds if the City meets
and complies with the following conditions:
(a)All payments then required by this ordinance or any other ordinance
of the City pertaining to the then outstanding Parity Bonds shall have been made
into the Bond Fund,and that no deficiency exists therein;
(b)If one or more utility local improvement districts shall be created
in connection with the issuance of such Future Parity Bonds,the ordinance
i providing for the issuance of such Future Parity Bonds shall provide that all
Assessments levied therein shall be paid directly into the Bond Fund;
(e)At the time that Future Parity Bonds are issued,the City shall have
on file a certificate from en independent licensed professional engineer or certified
public accountant showing that in his or her professional opinion the Net Revenue
in any twelve consecutive months out of the eighteen months immediately
preceding the issuance of such Future Parity Bonds together with Assessments
CITY OF MOSESLAKE-Water and Sewer Bond Ordinance -15
equals at least 1.25 times Annual Debt Service on outstanding Parity Bonds and the
proposed Future Parity Bonds;and so long as any outstanding Parity Bonds are
insured pursuant to the municipal bond insurance policy referred to in Section 2 of
this ordinance,such certificate shall also show that the historical Net Revenue,as
adjusted pursuant to this paragraph,(exclusive of Assessments)equals at least
i eighty percent (80%)of such Annual Debt Service.In determining whether the
City meets the aforesaid requirement,the historical Net Revenue may be adjusted
to refleet:
(1)the revenues to be derived from additional eustomersanticipatedtobeservedbytheimprovementstobeconstructed withtheproceedsofsuchFutureParityBonds,but only to the extent thateachsuchadditionalcustomershallhaveamandatorydutytoconnectpropertytotheSystem[a]which property is served by an existingprivatewatersourceand/or septie system or [b]which property isimprovedwithoneormoreresidentialdwellingsorcommercialorindustrialfacilitiesandbindingcontracttopurchasesuchproperty bytheanticipatedadditionalcustomerisineffeet;
(2)a full year of revenues to be derived by the City from anycustomersbeingservedbytheSystemtotheextentthehistoricalNetRevenuedoesnotincludesuchrevenues;and
(3)any rate change in effect prior to the delivery of the proposedFutureParityBondsorauthorizedbytheCityCounciltobecomeeffectivenolaterthansixmonthsafterthedeliveryofsuchbondstobeaApe
a o
raeasron
b
anb o suenher
ase a te sts of Maintenance and
Operation subsequent to the 12-month base period shall be deducted from the
historical Net Revenue.Any decreases in the Costs of Maintenance and Operation
reasonably anticipated to be realised from the improvements to be constructed
with the proceeds of such Future Parity Bonds may be added to the historical Net
Revenue.
(d)The ordinance authorizing the issuance of additional Future Parity
Bonds shan provide that the amount deposited in the Reserve Account in the Bond
Fund shall be increased to an amount equal to the Reserve Requirement for all
Parity Bonds then outstanding and the Future Parity Bonds proposed to be issued,
such additional amount to be accumulated within five years from the date of
issuance of such proposed Future Parity Bonds.In the case of refunding bonds theiordinanceauthorizingtheissuaneeofsuchproposedFutureParityBondsshall
provide that the money in the reserve account for the bonds to be refunded (or,if
less than an entire issue of outstanding bonds is to be refunded,the proportionate
amount of such money aHoeated to the refunded portion of such bonds)shall be
transferred to the Reserve Account in the Bond Fund or that the money in the
reserve account for the bonds to be refunded shall be used to redeem such bonds.
CITY OF MOSES LAKE-Water and Sewer Bond Ordinance -16
Nothing contained in this section shall prevent the City from issuing revenue
bonds having a junior lien on the Revenue of the System or from pledging the
payment of utility local improvement district assessments into a bond redemption
fund or account created to pay and secure the payment of the principal of and
interest on such junior lien bonds as long as such assessments are levied to pay part
or all of the cost of improvements being constructed out of the proceeds of the
sale of such junior lien bonds.
Section 10.Refunding Plan.There is hereby created and established in the
office of the Treasurer a special fund of the City to be known as the "1985
Refunding Account"(Account No.470)into which shall be transferred and
deposited all monies required to carry out the refunding of the Refunded Bonds and
the defeasance of the Refunded Bonds.The Treasurer is hereby authorized and
directed to transfer the aggregate amount of $580,000from monies on hand in the
following funds and accounts and to deposit such amount in the 1985 Refunding
Account.
Water and Sewer Revenue Bond Reserve Fund created byOrdinanceNo.290;
Reserve Account in the Water and Sewer Revenue Bond Fund,1981icreatedbyOrdinanceNo.1039;
Water and Sewer Revenue Bond Fund,1965 created by OrdinanceNo.532;
Water and Sewer Revenue Bond Fund,1967 created by OrdinanceNo.573;
Water and Sewer Revenue Bond Fund,1973 ereated by OrdinanceNo.670;and
Principal and Interest Account in the Water and Sewer RevenueBondFund,1981 created by Ordinance No.1039.
The principal proceeds of the sale of the Bonds,namely $5,957,820,shall be
deposited in the 1985 Refunding Account.The amounts so transferred and
deposited shall be applied to pay the AMBAC municipal bond insurance premium
and the costs of isuance of the Bonds,to purchase the Acquired Obligations and to
i
provide the necessary beginning cash balance to accomplish the refunding plan.
All of the foregoing amounts have been determined on the basis of
completing delivery of the Bonds to the purchaser thereof on November 15,1985.
Such amounts may be adjusted as the City Manager may deem to be necessary to
accomplish refunding of all of the Refunded Bonds and to comply with the
CITY OF MOSES LAKE--Water and Sewer Bond Ordinance -17
requirements of Section 103 of the Internal Revenue Code of 1954,as amended,
and applicable Treasury regulations thereunder.
The Treasurer of the City is authorized and directed to use so much of the
monies deposited in the 1985 Refunding Account as is necessary to purchase United
States government obligations (hereincalled "Acquired Obligations")in theiamounts,of the type,bearing interest and maturing as hereafter approved by
resolution of the Council and the remainder,if any,shall be held in cash.Any
other cash or direct obligations of the United States government may be
substituted at the time of closing for any of the Acquired Obligations not available
at time of closing,to the extent permitted under Section 103 of the Internal
Revenue Code of 1954,as amended,and applicable regulations thereunder,
provided that,after any such substitution,the cash and investments in the 1985
Refunding Account shall be sufficient as to type,maturity date and amount to pay
principal of and interest on the Refunded Bonds as the same become due or become
payable according to the mandatory call provisions of Section 11 hereof and
provided further that the total cost of acquisition of all the Acquired Obligations
does not exceed the amount of money authorized to be deposited into the 1985
Refunding Account.
Such Acquired Obligations will bear interest and mature as to principal and
interest in such amounts and at such times so as to discharge the obligations of the
City under the respective ordinances authorizing the issuance of the Refunded
Bonds and to provide for the payment of the principal of and interest on the
Refunded Bonds which will become due and payable up to and including the
respective mandatory redemption dates set forth in Section 11 of this Ordinance
and the redemption prices payable on such respective maturity dates maturing
thereafter.
Such Acquired Obligations shall be irrevocably deposited with Seattle-First
National Bank,Seattle,Washington (hereinaftercalled the "Refunding Trustee").
Any amounts described in this section which are not provided for in full by the
purchase and deposit of the Acquired Obligations described in this section shall be
provided for by the irrevocable deposit of a portion of the proceeds of the sale of
the Bonds or other monies of the City with the aforesaid Refunding Trustee.
Such Acquired Obligations and monies to be deposited with the Refunding
Trustee shall be held by the Refunding Trustee in trust and shall be transmitted to
the Treasurer of the City for the sole purpose of paying the interest on and
CITY OF MOSES LAKE-Water and Sewer Bond Ordinance -18
principal of and any premium on the Refunded Bonds as herein set forth;all of such
Acquired Obligations are irrevocably dedicated to such purposes;and such Acquired
Obligations or the earnings or the proceeds therefrom may be used for no other
purpose nor may any of such investments be liquidated prior to maturity.
Any monies remaining on deposit with the Refunding Trustee after the
i payment and retirement in full of the Refunded Bonds shall be transferred and paid
into the Bond Fund to the extent that such deposit shaU not require restriction on
the yield on investment of monies in the Bond Fund under Section 103(e)of the
Internal Revenue Code of 1954,as amended,and applicable regulations thereunder,
and any excess shan be transferred and paid into the Revenue Fund.
Section 11.Redemption of Refunded Bonds.
The City hereby irrevocably eaBs for redemption of all the Refunded Bonds
maturing on or after the following dates at the foHowing prices expressed as a
percentage of par plus accrued interest to date of redemption:
Refunded Redemption Redemption
Bond Issue Date Price
1965 Bonds No prior redemption1967BondsNopriorredemption1973BondsNopriorredemption1981BondsJuly1,1991 103.0%i 1983 Bonds July 1,1994 102.5%
Buch caB for redemption shan be irrevocable after the delivery of the Bonds to the
initial purchaser thereof.The Refunding Trustee on behalf of the Treasurer of the
City is hereby authorized and directed to give notice of the redemption of the
Refunded Bonds in accordance with the provisions of Ordinances No.1039 and
1093 ,respectively.
Section 12.Safekeeping Agreement.In order to carry out the purposes of
Sections 10 and 11 of this ordinance,the City Manager and City Clerk of the City
are authorized and directed to execute and deliver to the Refunding Trustee a
safekeeping agreement substantiany in the form attached hereto as "Exhibit B"and
by this reference made a part of this ordinance.
AB necessary and proper fees,compensation and expenses of the Refunding
Trustee for the Bonds and aB other costs ineidental to the refunding of the
Refunded Bonds and the issuance of the Bonds,including,but not limited to,
reasonable charges of bond counsel,rating services and bond printing,shall be paid
when due by the Refunding Trustee.
Section 13.Form of the Bonds.The Bonds shall be in substantially the
following form:
CITY OF MOSES LAKE-Water and Sewer Bond Ordinance -19
No.$
UNITED STATES OF AMERICA
STATE OF WASHINGTON
CITY OF MOSESLAKE
WATER AND SEWER REVENUE REFUNDING BOND,1985
i INTEREST RATE:MATURITY DATE:CUSIP NO.:
SEE REVERSE SIDE FORCERTAINDEFINITIONS
Registered Owner:
Principal Amount:DOLLARS
The City of Moses Lake,Washington (the "City"),for value received,herebypromisestopaytotheRegisteredOwneridentifiedabove,or registered assigns,ontheMaturityDateidentifiedabove,the Principal Amount indicated above and topayinterestthereonattheInterestRatesetforthabovefromNovember1,1985,
or the most recent date to which interest has been paid or duly provided for untilpaymentofthisbond,payable on July 1,1986,and semiannually thereafter on thefirstdaysofeachJanuaryandJulyandwithfullobligationonthepartoftheCitytopayinterestatthesameratefromandafterthebondmaturitydateuntilthisbondwithinterestispaidinfull,or funds are available in the "Water and SewerRevenueBondFund,1985"(the "Bond Fund")for payment in full.Both principal ofandinterestonthisbondarepayableinlawfulmoneyoftheUnitedStatesofAmerica.Interest shall be paid by mailing a cheek or draft (onthe date suchinterestisdue)to the registered owner or nominee at the address shown on theBondRegisterasofthe15thdayofthemonthpriortotheinterestpaymentdate.Principal shall be paid to the registered owner or nominee upon presentation andisurrenderofthisbondattheofficeofeitherfiscalagencyoftheStateofWashingtoninthecitiesofSeattle,Washington,or New York,New York.SaidprincipalandinterestarepayablesolelyoutoftheBondFundcreatedbyOrdinanceNo.of the City (the "Bond Ordinance"),into which fund the City herebyirrevocablybindsitselftopaycertainfixedamountsoutoftheRevenueoftheSystem,as the same is defined in the Bond Ordinance,namely,amounts sufficienttopaytheprincipalofandinterestontheoutstandingbondsofthisissue(the"Bonds")as they respectively become due and on any additional and/or refundingwaterandsewerrevenuebondsissuedonaparityoflienwiththeBondsandtoaceumulateareserve,all at the times and in the manner set forth in the BondOrdinance.Reference is made to the Bond Ordinance for definition of othercapitalizedtermsusedherein.
Reference is hereby made to additional provisions of this bond set forth onthereversesidehereofandsuchadditionalprovisionsshallforallpurposeshavethesameeffectasifsetforthinthisspace.
It is hereby certified and declared that the Bonds are issued pursuant to andinstrictcompliancewiththeConstitutionandlawsoftheStateofWashingtonandtheordinancesoftheCityandthatallacts,conditions and things required to bedoneprecedenttoandintheissuanceofthisbondhavehappened,have been doneandhavebeenperformedasrequiredbylaw.
IN WITNESSWHEREOF,the City has caused this bond to be signed by thefacsimilesignatureofitsMayorandattestedbythefacsimilesignatureofitsCityClerkanditscorporatesealtobeimpressedorafacsimilethereofimprintedhereonthisfirstdayofNovember,1985.
CITY OF MOSES LAKE,WASHINGTON
By (facsimile signature)
MayorATTEST:
(facsimilesignature)City Clerk
CITY OF MOSES LAKE-Water and Sewer Bond Ordinance -20
CERTIFICATE OF AUTHENTICATION
Date of Authenticatiom
This bond is one of the bonds described in the within mentioned BondOrdinanceandisoneoftheWaterandSewerRevenueRefundingBonds,1985 oftheCitydatedNovember1,1985.
WASHINGTONSTATE FISCAL AGENCY
I Bond Registrar.
By (manual)Authorized Officer
ADDITIONAL PROVISIONS
This bond is one of a total issue of $par value of the Bonds,alloflikedate,tenor and effect,except as to maturity,redemption provisions andinterestrates,all payable from the Bond Fund and all issued by the City under andpursuanttothelawsoftheStateofWashingtonandtheBondOrdinanceforthepurposeofprovidingfundsnecessarytorefundalloftheoutstandingwaterandsewerrevenuebondsoftheCityinaccordancewiththerefundingplanadoptedbytheBondOrdinance.
The Revenue of the System is hereby pledged to pay and secure the paymentofprincipalofandinterestontheBonds,and such payment and the Bondsconstituteachargeorlienuponsuchrevenuespriorandsuperiortoanyotherchargeswhatsoever,excluding Costs of Maintenance and Operation of the System,except that the lien and charge upon Revenue of the System for the Bonds shall beonaparitywiththechargeorlienuponsuchRevenueforanyFutureParityBondswhichmaybehereafterissuedinaccordancewiththeprovisionsofSection9oftheBondOrdinance.The Bonds are not a general obligation of the City.
The City has reserved the right to redeem,prior to their stated maturitydates,Bonds maturing on or after July 1,1997,in whole or in part in inverse orderofmaturity,and by lot within a maturity in integral multiples of $5,000(in suchmannerastheBondRegistrarshalldetermine)on July 1,1996,or on anysemiannualinterestpaymentdatethereafter,at par plus accrued interest to dateofredemption.The City has reserved the right to purchase any of the Bonds in theopenmarketforretirementonlyatanytimeatanypricenottoexceedtheparamountthereof.
The Term Bonds of this issue in the aggregate principal amount of$and maturing July 1,2003 are subject to mandatory call by lot at apriceofparplusaccruedinteresttothedateofredemptiononthefollowingdatesandinthefollowingprincipalamounts:
Date of PrincipalRedemptionAmount
Notice of anysuch intended redemption shall be given not less than thirtyw(30)days nor more than forty (40)days prior to the date fixed for redemption byfirstclassmail,postage prepaid,to the registered owner of any Bond to beredeemedattheaddressappearingontheregistrationbooksoftheBondRegistrar.The requirements of this section shall be deemed to be complied with when noticeismailedashereinprovided,whether or not it is actually received by the owner ofanyBond.Interest on any Bonds so called for redemption shall cease on the datefixedforredemptionunlesstheBondorBondssocalledarenotpaidinfulluponpresentationmadepursuanttosuchcall.In addition,such redemption notice shallbesenttoMoody's Investors Service,Inc.and Standard &Poor's Corporation,attheirrespectiveofficesinNewYork,New York,but the mailing of such notice to
CITY OF MOSES LAKE-Water and Sewer Bond Ordinance -21
such corporations shan not be a condition precedent to the redemption of such
Bonds.
The City hereby covenants and agrees with the owners of the Bonds to carryoutfullyallcovenantsandmeetallobligationsoftheCityassetforthhereinand
as more fully described in the Bond Ordinance,to which ordinance reference
hereby is made.
This bond is transferable only on the records maintained by the Bond
Registrar for that purpose upon the surrender of this bond by the registered ownerhereoforhisdulyauthorisedagentandonlyifendorsedinthemannerprovided
hereon,and thereupon a new fußy registered bond of like principal amount,matur-
ity and interest rate shall be issued to the transferee in exchange therefor.The
City may deem the person in whose name this bond is registered to be the absolute
owner hereof for the purpose of receiving payment of the principal of and interest
on the bond and for any and aB other purposes whatsoever.
The Bond Registrar is not required to issue,register,transfer or exchange
any of the bonds during a period beginning at the opening of business on the twenti-
eth (20th)day next preceding any interest payment date and ending at the close of
business on such interest payment date,or,in the case of any proposed redemption
of the bonds,after the mailing of notice of the eaB of such bonds for redemption.
The following abbreviations,when used in the inscription on the face of thewithinbond,shall be construed as though they were written out in fun according toapplicablelawsorregulations.
TEN COM -as tenants in commonTENENT-as tenants by the entireties
JT TEN -as joint tenants with right of survivorship
and not as tenants in common
i UNIF GIFT MIN ACT -Custodian(Cust)(Minor)
under Uniform Gifts to Minors
Act (State)
Additional abbreviations may also be used though not in list above.
ASSIGNMENT
FOR VALUE RECEIVED,the undersigned hereby seus,assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER
OF TRANSFEREE //
(Please print or typewrite name and address,including zip code,of Transferee)
the within bond and does hereby irrevocably constitute and appoint
or its successor,as Bond Registrar to transfer said bond on the books kept forregistrationtereofwithfullpowerofsubstitutioninthepremises.
NOTE:The signature on this Assignment
must correspond with the name of theregisteredownerasitappearsuponthe faceofthewithinbondineveryparticular,
without alteration or enlargement or anychangewhatever.
CITY OF MOSES LAKE-Water and Sewer Bond Ordinance -22
SIGNATURE GUARANTEED:
Section 14.Execution of the Bonds.The Bonds shall be signed on behalf of
the City by the facsimile signature of the Mayor and attested by the facsimile
i signature of the City Clerk and shall have the seal of the City impressed or a fac-
simile thereof imprinted thereon.
Only such Bonds as shall bear thereon a Certificate of Authentiention in the
form hereinbefore recited,manually executed by the Bond Registrar,shall be valid
or obligatory for any purpose or entitled to the benefits of this ordinance.Such
Certificate of Authentication shall be conclusive evidence that the Bonds so
authenticated have been duly executed,authenticated and delivered hereunder and
are entitled to the benefits of this ordinance.
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 Bond Registrar,or issued by the City,such Bonds
may nevertheless be authenticated,delivered and issued and upon such authentica-
nnedelivery andhissuance,shall be as bindin upon t eCity as thn Bh tdhosewho
be signed and attested on behalf of the City by such persons as at the actual date
of execution of such Bond shall be the proper officers of the City although at the
original date of such Bond any such person shall not have been such officer of the
City.
Section 15.Lost or Stolen Bonds.In case any Bonds shall be lost,stolen or
destroyed,the Bond Registrar may deliver a new bond or bonds of like amount,
date,tenor and effect to the registered owner thereof upon the owner paying the
expenses and charges of the City in connection therewith and upon filing with the
Bond Registrar evidence satisfactory to said Bond Registrar that such bond or
bonds were actually lost,stolen or destroyed and of ownership thereof,and upon
furnishing the City with indemnity satisfactory to both.
Section 16.Bond Registrar.The Bond Registrar shall keep,or cause to be
kept,sufficient books for the registration and transfer of the Bonds.The Bond
Registrar is authorized,on behalf of the City,to deliver a substitute Bond or Bonds
in authorized denominations for any Bonds transferred or exchanged in accordance
with the provisions of such Bonds and this ordinance and to carry out all of the
powers and duties of the Bond Registrar under this ordinance.
CITY OF MOSESLAKE-Water and Sewer Bond Ordinance -23
Section 17.Use and Application of Bond Proceeds.The proceeds from the
sale of the Bonds shall be used for the sole purpose of purchasing the Acquired
Obligations and otherwise carrying out the plan of refunding the Refunded Bonds as
provided in Sections 10,11 and 12 of this ordinance.Upon delivery of the Bonds to
the purchaser thereof,principal proceeds of and premium,if any,on the Bonds
i shall be deposited into the 1985 Refunding Account created by Section 10 of this
ordinance for such purpose,and the accrued interest shall be deposited into the
Debt Service Account of the Bond Fund.The Treasurer is hereby authorized to
prepare and/or approve a detailed schedule of disbursements of the proceeds of the
Bonds and other monies of the City to carry out such plan of refunding.
Section 18.Sale of the Bonds.Seattle-Northwest Securities Corporation of
Seattle,Washington,has submitted an offer to purchase the Bonds at a price of
$97.35 per each $100of par plus accrued interest to the date of delivery of the
Bonds,the City to furnish the unqualified approving legal opinion of Duryea,
Murphy,Davenport &Van Winkle,municipal bond counsel.The City Council,being
of the opinion that it is in the best interests of the City to accept such offer,
hereby accepts the same.The Bonds,immediately upon their authentication by the
i Bond Registrar shall be delivered to the purchasers upon payment for the Bonds in
accordance with such offer.
Seetion 19.Supplemental Ordinances.
A.The Council from time to time and at any time may adopt an
ordinance or ordinances supplemental to this ordinance which supplemental
ordinance or ordinances thereafter shall become a part of this ordinance,for any
one or more of all of the following purposes•
1.To add to the covenants and agreements of the City contained in
this ordinance other covenants and agreements thereafter to be observed
which shall not adversely affect the interests of the holders of any Parity
Bonds or to surrender any right or power herein reserved to or conferred upon
the City.
I 2.To make such provisions for the purpose of curing any ambiguities
or of curing,correcting or supplementing any defective provision contained in
this ordinance or any ordinance authorizing Future Parity Bonds in regard to
matters or questions arising under such ordinances as the Council may deem
necessary or desirable and not inconsistent with such ordinances and which
shall not adversely affect the interest of the owners of Parity Bonds.
CITY OF MOSESLAKE-Water and Sewer Bond Ordinance -24
Any such supplemental ordinance of the City may be adopted without the
consent of the owners of any Parity Bonds at any time outstanding,notwithstanding
any of the provisions of subsection B of this section.
B.With the consent of the owners of not less than 65%in aggregate
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principal amount of the Parity Bonds at the time outstanding,the Council may
adopt an ordinance or ordinances supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of this
ordinance or of any supplemental ordinance;provided however,that no such
supplemental ordinance shall:
1.Extend the fixed maturity of any Parity Bonds or reduce the rate
of interest thereon,or extend the times of payments of interest thereon from
their due dates or reduce the amount of the principal thereof,or reduce any
premium payable on the redemption thereof,without the consent of the
owner of each bond so affected,or modify the Safekeeping Agreement after
the effective date of such agreement,except as may be permitted by Section
12 of this ordinance.
2.Reduce the aforesaid percentage of bondowners required to
I approve any such supplemental ordinance,without the consent of the owners
of all of the Parity Bonds then outstanding.
It shall not be necessary for the consent of bondowners under this subsection
B to approve the particular form of any proposed supplemental ordinance,but it
shall be sufficient if such consent shall approve the substance thereof.
Section 20.Effective Date.This ordinance shall take effect and be in force
five days after its passage,approval and publication as required by law.
PASSED by the City Council and signed by the Mayor at a regular open publie
meeting on October 8 ,1985.
YO
APPR D AS TO FORM:
CITY ATTORNEY
PUBLISHED:October 11,1985
CITY OF MOSESLAKE-Water and Sewer Bond Ordinance -25
EXHIBIT A
To Ordinance No.g
CASH AND ACQUIRED OBLIGATIONS
I
Schedule hereafter to be approved
by resolution of the City Council.
I
EXHIBIT A to City of Moses Lake Water and Sewer Bond Ordinance -1
EXHIBIT B
To Ordinance No.1184
SAFEKEEPING AGREEMENT
THIS AGREEMENT,made and entered into as of the day of
,1985,by and between the City of Moses Lake,Washington (the "City")
I and ,Seattle,Washington (the "Refunding
Trustee");
WITNESSETH:
Section 1.Recitals.The City has outstanding the following water and sewer
revenue bonds:
Original AuthorizingDateofIssuePrincipalAmountOrdinance
July 1,1965 61,000 No.532November1,1967 315,000 No.573July1,1973 1,100,000 No.670December1,1981 985,000 No.1039March1,1983 3,950,000 No.1093
which are numbered,mature on the dates and in the amounts and bear interest at
the rates set forth in Appendix 1 (the "Refunded Bonds").
The City by Ordinance No.adopted October ,1985 (the
"Ordinanee")has determined to refund the Refunded Bonds in accordance with the
terms.of and in the manner provided by the Ordinance and has authorized issuance
of $aggregate principal amount of Water and Sewer Revenue Refunding
Bonds,1985 dated November 1,1985,to carry out such refunding (the "Refunding
Bonds").
Section 2.Provisions for Refunding the Refunded Bonds.To accomplish the
refunding of the Refunded Bonds,the City,simultaneously with the delivery of the
Refunding Bonds (as defined in and issued pursuant to the Ordinance),does hereby
agree to irrevocably deposit with the Refunding Trustee in trust for the security
and benefit of the owners of the Refunded Bonds sufficient obligations or evidence
thereof ("Acquired Obligations")as described on Appendix 2 attached hereto,and
any monies,if necessary,to provide for the payment of all interest on,premium
on,and principal of the Refunded Bonds as the same shall become due.The
sufficiency of such Acquired Obligations has been verified by
,certified public accountants.
The Refunding Trustee hereby agrees to create and establish a special and
irrevocable trust fund consisting of the Cash and Acquired Obligations as described
EXHIBIT B to City of Moses Lake Water and Sewer Bond Ordinance -1
on Appendix 2 to be held in trust by said Trustee separate and apart from all other
funds or accounts of the City or of the Refunding Trustee,solely for the purposes
herein specified.
Such Acquired Obligations shan be paid for out of a portion of the proceeds
of sale of the Refunding Bonds and other eash provided by the City.
Prior to or simultaneously with the delivery of the Refunding Bonds to the
initial purchasers thereof,the City agrees that it will cause to be delivered to the
Refunding Trustee statements setting forth the maturity schedule of the Refunded
Bonds by number,amount,date of maturity,interest rates,the amount of interest
to be paid on each semiannual interest payment date,the amount of principal to be
paid on each annual principal payment date,and the amount of principal and
premium to be paid upon the respective mandatory redemption dates set forth
below pursuant to the irrevocable call for redemption made by the Ordinance for
the respective issue of the Refunded Bonds maturing on and after the following
maturity dates:
Date of Issue Mandatory A11Bonds MaturingofRefundedBondsRedemptionDateOnorAfter
July 1,1965
i November 1,1967July1,1973December1,1981March1,1983
The Refunding Trustee shall notify the City Treasurer of the City at least
ninety (90)days before therespective mandatory redemption dates of the
requirement for mandatory call of the respective Refunded Bonds and shau,if
authorized to do so,give notice of redemption in the name of said City Treasurer
at the time and in the manner required by each Authorizing Ordinance for the
respective issue of the Refunded Bonds.
Section 3.Disbursements by Refunding Trustee.The Refunding Trustee shall
present for payment on the due dates thereof any Acquired Obligations so
deposited with it and shan apply the proceeds derived therefrom and the interest
i
paid thereon in accordance with the provisions of this section.Monies shall be
transferred by the Refunding Trustee to the City Treasurer or,at the direction of
said Treasurer,to the Fiscal Agent of the State of Washington at appropriate times
and in amounts sufficient to pay the principal of and the interest on the Refunded
Bonds as the same shan become due.Any eash balance remaining after such
transfer shall be held in the trust fund and shall not be invested.
EXHIBIT B to City of Moses Lake Water and Sewer Bond Ordinance -2
Section 4.Custody and Safekeeping of Obligations.For as long as any of the
Refunded Bonds remain outstanding,on or before the 25th day of each January and
July (commeneingwith the month of January,1986)the Refunding Trustee shall
render a statement as of the first day of such month to the City Treasurer of the
City setting forth the eash and Aequired Obligations held by the Refunding
Trustee,any of such Acquired Obligations which have matured and the amounts
received by the Refunding Trustee by reason of such maturity,the interest earned
on any of such Acquired Obligations,a list of any investments or reinvestments
made by the Refunding Trustee in other Aequired Obligations and the interest
and/or principal derived therefrom,the amounts of eash delivered to the City
Treasurer and/or Fiscal Agent of the State of Washington for the payment of the
principal of and interest on the Refunded Bonds,as said payments shall become due
and payable,and any other transactions of the Refunding Trustee pertaining to its
duties and obligations as set forth herein.
AB Acquired Obligations,monies and investment income deposited with or
received by the Refunding Trustee pursuant to this agreement shall be subject to
the trust created by this agreement,and the Refunding Trustee shall be liable for
i the preservation,safekeeping and application thereof in accordance with the
provisions of this agreement;provided,however,it shall not be responsible for any
depreciation in value of any of the Acquired Obligations.Any money remaining in
the trust fund after payment of all Refunded Bonds and couponsshan be paid by
the Refunding Trustee to the City for deposit in the Revenue Fund (as defined in
the Ordinance).
Section 5.Substitution of Acquired Obligations.The City reserves the right
to substitute higher yield Acquired Obligations in the event it may do so pursuant
to Section 103(c)(2)of the Internal Revenue Code,as amended,and applicable
regulations thereunder provided that at all times the monies and Acquired
Obligations deposited with the Refunding Trustee shall be sufficient as to type,
maturity date and amount to provide for the payment of the principal of and
interest due and to become due on the Refunded Bonds as provided herein.Prior to
each such substitution the City shall obtain (1)a verification by the Refunding
Trustee which shall be satisfactory to bond counsel to the City that the monies and
Acquired Obligations on deposit after such substitution will be sufficient as
provided above and (2)an opinion from such bond counsel that such substitution
shall not cause any of the Refunding Bonds to lose their tax exempt status under
EXHIBIT B to City of Moses Lake Water and Sewer Bond Ordinance -3
Section 103(c)of the Internal Revenue Code of 1954,as amended,and the
applicable Treasury regulations thereunder.
Section 6.Costs of Issuance.The City,simultaneously with the delivery of
the Refunding Bonds (as defined in and issued pursuant to the Ordinance),does
hereby agree to deposit $to pay the costs of issuance of the Refunding
i Bonds set forth in Appendix 2,and the Refunding Trustee hereby agrees to pay such
costs of issuance when due.
Section 7.Duties and Obligations of the Refunding Trustee.The duties and
obligations of the Refunding Truste'e shall be as prescribed by the provisions of this
agreement,and the Refunding Trustee shall not be liable except for the
performance of its duties and obligations as specifically set forth herein and to act
in good faith in the performance thereof,and no implied duties or obligations shall
be incurred by the Refunding Trustee other than those specified herein.
The Refunding Trustee may consult with counsel of its choice,and the
opinion of such counsel shall be full and complete authorization and protection in
respect of any action taken or not taken or suffered by it hereunder in good faith
and in accordance with the opinion of such counsel.
heretoSf
re
mnadeCompen tion of Refundiney Trustee.r The arrangements
$for services rendered by it pursuant to the provisions of this
agreement are satisfactory to it;and such payment is inclusive of all fees,
compensation and expenses of the Refunding Trustee.
CITY OF MOSESLAKE,WASBINGTONSeattle,Washington
By By
City Manager
Title
ATTEST:
By
City Clerk
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EXHIBIT B to City of Moses Lake Water and Sewer Bond Ordinance -4