1716_00001CITY OF MOSES LAKE,WASHINGTON
$520,000
IUNIOR LIEN WATER AND SEWER REVENUE REFUNDING BONDS,SERIES 1996
ORDINANCE NO.1716
TABLE OF CONTENTS1
Section Title Page
Recitals ..................1
1.Definitions ..................1
A.Annual Debt Service,Maximum Annual DebtService..................1B.Assessments ....,,............2C.Bond Registrar ................2D.Bonds;1996 Bonds ...............2E.City ..................2F.City Council .................2G.Code ..................2H.Co-Paying Agents ...............2I.Costs of Operation and Maintenance ......2J.Coverage Requirement .............2K.Debt Service Account .........,,..2L.Future Parity Bonds .............2M.Investment Earnings .............2N.Investments ..................20.Net Revenue ..................2P.1992 Bond Fund,Parity Bond Fund .......2Q.1994 Bond Fund ................39R.1992 Bond Ordinance .............3S.1994 Bond Ordinance ..............3T.1992 Bonds ..................3U.1994 Bonds ..................3V.Outstanding Parity Bonds;Funded Interest ...3W.Parity Bonds .................3X.Reserve Account ................3Y.Reserve Requirement .............4Z.Revenue Fund .................4AA.Revenue of the System .............4BB.Senior Lien Bonds;Outstanding senior LienBonds;Refunded Principal ........4cC.Sinking Fund Account .............4DD.Surety Bond;Surety Bond Payment .......4EE.System ..................5FF.Term Bonds ..................5GG.Treasurer ..................5HH.ULID ,,................5II.1992 Bond Insurer ...............5
2.Compliance with Parity Conditions .........5
3.Purpose and Authorization of the Bonds .......6
4.Description of the Bonds ..............6
*A.Date,Denomination,Payment,Transfer .....6B.Optional Redemption ..............7C.Open Market Purchase .............7
1 This Table of Contents is provided for reference only and does not constitute a part of the Ordinanceforwhichitisprovided.
REVENUEBONDORDINANCE-TABLEOF CONTENTS-PRCJe i
Section Title Page
5.Revenue Fund Priorities ............,,7
6.1994 Bond Fund and Accounts Therein ........8
A.Debt Service Account .............9
B.Transfers to Sinking Fund Account ......9
7.Reserve Account ..................9
A.Maintenance of and Limitation onAccountBalance...............9
B.Issuance of Future Parity Bonds .......10
C.Use to Redeem Parity Bonds ..........10D.Deficiencies .................10E.Surety Bond .................10F.Variable Rate Parity Bonds ..........11
8.Investment of Monies in 1994 Bond Fund and Accounts 11
9.Lien Upon Revenue of the System ..........11
10.Adequacy of Revenue to Make Required Payments ...11
11.Defeasance ..................11
12.Certain Covenants .................12
A.Application of Assessments ..........12B.Rates and Charges;Coverage Requirement ....12C.Payment of Cost of Maintenance and Operation .12D.Enforcement of Payment of ServiceOChargesandAssessments...........12E.Maintenance and operation Standards ......12F.Sale or Disposition of System .........12G.Books and Accounts;Annual Reports ......13H.Insurance ..................13I.No Free Service ...............13J.Special Funds ................13K.Tax Code Covenant ...............13L.No Senior Lien Future Parity Bonds ......14
13.Future Parity Bonds ................14
14.Form of the Bonds .................16
15.Execution of the Bonds ...............19
16.Bond Registrar ..................20
17.Lost or Destroyed Bonds ..............20
18.sale of the Bonds .................20
19.Disposition of Bond Proceeds ............20
20.Authorization to Officials and Agents .......21
21.Supplemental Ordinances ..............21
22.Findings and Designation of Bank Eligibility ....22
23.Severability ..................22
24.Effective Date ..................22
REVENUEBONDORDINANCE-TABLEOF CONTENTs-Page ii
ORDINANCE No.1716
An ordinance of the City Council of the City of Moses Lake,Washington,authorizing the issuance and sale of junior lien waterandsewerrevenuebondsoftheCityintheoriginalprincipalamountof$520,000 for the purpose of paying the costs of certainOextensionsofthewaterdistributionandthesewagecollectionsystemsoftheCity;fixing the date,form,terms,maturities andcovenantsofthebonds;and providing for issuance of such bonds onaparitywiththewaterandsewerrevenuerefundingbondsdatedJanuary1,1992 and the water and sewer revenue bonds dated August15,1994;and approving the sale of such bonds to Martin Nelson &Co.,Inc.
WHEREAS,the City of Moses Lake,Washington,(the "City")now operatesandmaintainsacombinedwaterandseweragesystem(the "System");and
WHEREAS,the City heretofore issued and sold $3,500,000 par value ofnWaterandSewerRevenueRefundingBonds,1992"pursuant to ordinanceNo.1509 (the "1992Bonds")which 1992 Bonds constitute a lien and charge onthenetrevenueoftheSystemjuniortothelienandchargeuponsuchrevenuetopayandsecurepaymentofthe"Water and Sewer Revenue Refunding Bonds,1985"issued pursuant to Ordinance No.1184 and the nWater and Sewer RevenueBonds,1990"issued pursuant to Ordinance No.1436 (collectively the "SeniorLienBonds")and superior to all other liens and charges upon such revenueexceptcostsofmaintenanceandoperationoftheSystem;and
WHEREAS,the City heretofore issued and sold $320,000 par value of"Water and sewer Revenue Bonds,Series 1994"pursuant to Ordinance No.1624(the "1994Bonds")which 1994 Bonds constitute a lien and charge on the netevenueofthesystemonaparitywiththelienandchargeuponsuchrevenueopayandsecurepaymentofthe1992Bonds;and
WHEREAS,the City has made improvements to the combined water andseweragesystemoftheCitybyextendingwaterdistributionlinesandsewagecollectionlinestoportionsofGrape,Evelyn and Central Drives and CentralPlaceandprovidedinterimfinancingthereforbylendingoradvancingmoniesoftheCitytemporarilyavailableinanticipationoftheissuanceofwaterandsewerrevenuebondstorepaysuchloansandadvances;and
WHEREAS,it is in the best interest of the City now to issue such bondsandtoaccepttheofferofMartinNelson&Co.,Inc.,to purchase the waterandsewerrevenuebondsatthepriceandunderthetermsandconditionssetforthinsuchpurchaseofferandinthisordinance;
THE CITY COUNCIL OF THE CITY OF MOSES LAKE,WASHINGTON,DO ORDAIN asfollows:
Section 1.Definitions.As used in this ordinance,the following wordsshallhavethefollowingmeanings:
A."Annual Debt Service"means the amount required to be paid in acalendaryearfor(1)interest on all Parity Bonds then outstanding excepttheFundedInterestonthe1992Bonds,(2)principal of all Parity Bonds thenoutstandingbutexcludinganyoutstandingTermBonds,and (3)payments intomySinkingFundAccountfortheamortizationofoutstandingTermBonds.InetermininginterestpayablewithrespecttoParityBonds,it shall beasumedthatpaymentsintotheSinkingFundAccountshallbemadeintheamountsandatthetimesrequiredinaccordancewiththemandatoryredemptionscheduleestablishedforthoseParityBondswhichconstituteTermBonds,asspecifiedbytheordinancesauthorizingtheissuancethereof."MaximunAnnualDebtServicenmeansthemaximumamountofAnnualDebtServiceonthethenoutstandingParityBondsandoutstandingSeniorLienBonds(other thantheportionsthereofwhichconstitutetheRefundedPrincipaloftheSeniorLienBonds)coming due in any future year.In the event the city has anyParityBondoutstandingonanyJanuary15orJuly15whichdoesnotbeara
WATERAND SEWERREVENUEBONDS,1996 Page 1
fixed interest rate to the maturity thereof,the Annual Debt Service shall becalculatedinthemannersetforthinSubsection7.F of this ordinance.
B."Assessments"means assessments levied in any ULID hereaftercreatedfortheacquisitionorconstructionofadditionsandimprovements toandextensionsofthesystemifsuchassessmentsarepledgedtobepaidintothe1992BondFundor1994BondFund,including any installments ofassessmentsandanyinterestorpenaltieswhichmaybeduethereon.
C."Bond RegistrarN means the fiscal agencies of the State ofWashingtoninSeattle,Washington,and New York,New York,appointed by thisordinanceforthepurposesofregisteringandauthenticatingtheBonds,maintaining the Bond register,and effecting transfer of ownership of theBonds.
D."Bondsn er n1996 Bonds"means all of the junior lien water andsewerrevenuebondsissuedpursuanttothisordinanceunderdateofMarch15,1996,in the aggregate original principal amount of $520,000.
E."City"means the City of Moses Lake,Washington,a municipalcorporationdulyorganizedandexistingunderandbyvirtueofthelaws ofthestateofWashington.
F."City Council"means the governing body of the City as the sameshallbedulyandregularlyconstitutedfromtimetotime.
G."Code"means Sections 103,148,149 and 150 of the Internal RevenueCodeof1986,as amended,and applicable temporary and permanent regulationspromulgatedthereunder.
H."Co-Paying Agents"means the Bond Registrar appointed for purposesofpayinginterestonandprincipalof(and any premium pursuant to call on)the Bonds.
I."Costs of Operation and Maintenance"means all necessary operatingexpenses,current maintenance expenses,expenses of reasonable upkeep andrepairs,and insurance and administrative expense,but excludes depreciation,payments for debt service or into reserve accounts and costs of capitaladditionstoorreplacementsoftheSystem,and municipal utility taxes orpaymentstothecityinlieuofsuchtaxes.
J."Coverage Requirement"means the coverage requirement specified inSection12.B of this ordinance.
K.nDebt Service Account"means the account of that name created inanyParityBondFundtopaytheprincipalofandinterestonanyParityBonds.
L."Future Parity Bonds"means all issues or series of revenue bonds,or other revenue obligations which may be issued in the future as ParityBondsinaccordancewiththetermsofthisordinance.
M.nInvestment Earnings"means all earnings in any form whatsoeverderivedfromInvestments.
N."Investmentsu means any investments permitted to the city by lawofmoniesrequiredtobedepositedinanyfundoraccountoftheRevenueFundandanyParityBondFund,except monies deposited in any escrow account forthepurposeofrefundinganyParityBondsandexceptanymonieswhicharebjecttopaymenttotheUnitedstatesTreasuryundertherebateprovisionstheCode.
O."Net Revenue"means the Revenue of the System less Costs ofoperationandMaintenance.
P."1992Bond Fund"means the "Water and Sewer Revenue Bond Fund,1992"created by Section 5 of Ordinance No.1509 of the city."Parity BondFund"means,collectively,the 1992 Bond Fund,the 1994 Bond Fund and any
WATERANDSEWERREVENUEBONDS,1996 -Page 2
other fund hereafter created to pay or secure the payment of bonds hereafterissuedonaparitywiththeBonds.
Q."1994Bond Fundu means the "Water and Sewer Revenue Bond Fund,1994"created by Section 6 of the 1994 Bond Ordinance.
R."1992Bond Ordinance"means ordinance No.1509 of the Cityauthorizingissuanceofthe1992Bonds,establishing a refunding plan for aportionoftheprincipaloftheSeniorLienBondsandforaportionoftheinterestonthe1992Bonds,and containing certain additional requirementswithwhichtheCitymustcomplysolongasany1992Bondsareoutstanding andareinsuredbythe1992BondInsurer.
S."1994 Bond Ordinance"means Ordinance No.1624 of the Cityauthorizingissuanceofthe1994Bondsandcreatingthe1994BondFund.
T."1992Bonds"means the "Water and sewer Revenue Refunding Bonds,1992n issued under date of January 1,1992,pursuant to the 1992 BondOrdinance,the following amounts of which are currently outstanding:
Principal InterestMaturityDateAmountRate
July 1,1997 $380,000 5.00%July 1,1998 400,000 5.15%July 1,1999 440,000 5.30%July 1,2000 445,000 5.45%July 1,2001 480,000 5.60%July 1,2002 520,000 5.75%July 1,2003 460,000 5.85%$3,125,000
U."1994Bonds"means the "Junior Lien Water and Sewer Revenue Bonds,OSeries 1994"issued under date of August 15,1994,pursuant to the 1994 Bond-Ordinance,the following amounts of which are currently outstanding:
Principal InterestMaturityDateAmountRate
August 1,1996 $25,000 4.80%August 1,1997 30,000 5.05%August 1,1998 30,000 5.25%August 1,1999 30,000 5.40%August 1,2000 30,000 5.55%August 1,2001 35,000 5.65%August 1,2002 35,000 5.75%August 1,2003 40,000 5.85%August 1,2004 40,000 5.95%$295,000
V."Outstanding Parity Bonds"means the outstanding 1992 Bands,excluding interest coming due thereon from July 1,1992,through July 1,1996,inclusive,which interest was funded by the 1992 Bonds pursuant to therefundingplanestablishedbythe1992BondOrdinance(the "FundedInterest"),and the outstanding 1994 Bonds.
W.nParity Bonds"means any revenue bonds or other revenue obligationsissuedbytheCitywhichhavealienupon.the Revenue of the system to payandsecurethepaymentoftheprincipalthereofandinterestthereonequaltotheliencreatedupontheRevenueofthesystemtopayandsecurethepaymentoftheprincipalofandinterestontheBonds."Parity Bonds"includes the1992Bonds,the 1994 Bonds,the Bonds and any Future Parity Bonds.
X."Reserve Account"means,collectively,the accounts of that namecreatedinthe1992BondFund,the 1994 Bond Fund and any other Parity BondFundhereaftercreatedforthepurposeofsecuringthepaymentoftheprincipalofandinterestonoutstandingParityBonds.
WATERANDSEWERREVENUEBONDS,1996 -PagG 3
Y.nReserve Requirementu means,from and after July 1,1996,theamountwhichisthesmallestof(i)1.25 times the Average Annual DebtService,(ii)the Maximum Annual Debt Service and (iii)the sum of theamountsequaltotenpercent(10%)of the sale proceeds (as defined in theCode)of the then outstanding Parity Bonds.
2."Revenue Fund"means that Water and Sewer Revenue Fund created byordinanceNo.135 of the City.
AA."Revenue of the System"means all the earnings and revenue receivedbytheCityfromoperationoftheSystem(including monies in the RevenueOFund),except ad valorem taxes,Assessments,Investment Earnings or proceedsof,or investment earnings on,loans and grants for capital purposes,andexceptincomefrominvestmentsirrevocablypledgedtothepaymentofanyrevenuebondswhichhavebeenheretoforeormaybehereafterrefundedpursuanttoaplanofrefundingadoptedbytheCityandexceptanymonieswhicharesubjecttopaymenttotheUnitedStatesTreasuryundertherebateprovisionsoftheCode.
BB."Senior Lien Bondsn means (i)the "Water and Sewer RevenueRefundingBonds,1985"issued under date of November 1,1985,pursuant toOrdinanceNo.1184 of the City (the "1985Bonds"),the following amounts ofwhicharecurrentlyoutstanding:
Principal InterestMaturityDateAmountRate
July 1,1996 360,000 9.00%July 1,1997 300,000*9.10%July 1,1998 335,000*9.20%***
July 1,2003 2,305,000*9.625%$3,300,000
and (ii)the "Water and Sewer Revenue Bonds,1990"issued under date ofJuly1,1990,pursuant to Ordinance No.1436 of the City (the "1990Bonds"),the following amounts of which are currently outstanding:
Principal InterestMaturityDateAmountRate
July 1,1996 25,000 6.80%July 1,1997 20,000*6.90%July 1,1998 20,000*7.00%July 1,1999 20,000*7.10%
$85,000
*Principal amounts of the outstanding Senior Lien Bonds that wererefundedbythe1992Bondspursuanttotherefundingplanestablishedbythe1992BondOrdinance(the "Refunded Principal").
"Outstanding Senior Lien Bonds"means the $360,000 principal amount of the1985BondsmaturingJuly1,1996,together with interest on $3,300,000principalamountof1985BondscomingduethereontoandincludingJuly1,1996,the mandatory redemption date of the Refunded Principal of the 1985Bondsandthe$25,000 principal amount of the 1990 Bonds maturing July 1,1996,together with interest on $85,000 principal amount of 1990 Bonds comingduethereontoandincludingJuly1,1996."1985Bond Fund"means the "WaterandSewerRevenueBondFund,1985"created by Section 4 of OrdinanceNo.1184.
CC."Sinking Fund Accountu means any account created in a Parity BondFundfordepositsrequiredformandatoryredemptionofanyParityTermBonds.
DD."Surety Bond"means any letter of credit,insurance policy,suretybondorotherequivalentcreditfacilityoranycombinationthereofissuedtothecitytosatisfyallorpartoftheamountrequiredtobemaintainedintheReserveFund,the proceeds of which shall be used only to preventdeficienciesinthepaymentoftheprincipaloforinterestontheBondsresultingfrominsufficientamountsbeingondepositinthePrincipaland
WATERANDSEWERREVENUEBONDS,1996 -Page 4
Interest Account or any Sinking Fund Account to make such payments ofprincipalandinterestasthesamebecomedueatmaturityoronanymandatoryredemptiondate.Such Surety Bond shall be provided by an institution orentitywhosecreditfacilitywouldnotadverselyaffecttheratingoftheBondsbyMoody's Investors Service,Inc.and by Standard &Poor'sCorporation,if the Bonds were so rated,and if not so rated,rating shall besecuredfromoneofsuchentitiesoranyotherentitywhoseratingsaregenerallyrelieduponbyinvestorsinmunicipalbondsasnecessarytodemonstratethatsubstitutionofasuretyBondforanyportionoftheReserveFundrequirementwillnotadverselyaffectthesecurityoftheBonds;provided,however,that as long as the 1992 Bonds are outstanding and insuredpursuanttothe1992BondOrdinance,the rating must be equivalent to an "Aa"rating by Moody's Investors service or an "AA"rating by Standard &Poor'sCorporation,or better.nSurety Bond Paymentu means an amount equal to thepaymentrequiredtobemadebytheCityonanyinterestorprincipalpaymentdateormandatoryredemptiondateminusthatportionofsuchpaymentmadebythecitytotheBondRegistrarforpaymenttothebondholdersonsuchdate,all as certified by the Bond Registrar in a demand for payment made pursuanttothetermsofanySuretyBond.
EE.nSystem"means the existing sanitary sewage collection andtreatmentsystemoftheCity,including facilities for the collection anddisposalofstormwaterrunoff,as it now exists and as it may later be addedto,extended and improved,and the existing water supply and distributionsystemoftheCity,as it now exists and may later be added to,extended andimproved,for as long as the Bonds remain outstanding.
FF."Term Bonds"means any Parity Bonds which are designated as "TermBonds"in an ordinance which authorizes the issuance of Parity Bonds (or inanordinanceorresolutionacceptingorratifyinganoffertopurchasesuchParityBonds)and establishes (or provides for establishment of)a SinkingFundAccounttoamortisetheprincipalamountofsuchTermBonds.
GG."Treasurer"means the Finance Director or such other officer of theityastheCouncilshalldesignatebyordinancetocarryoutthedutiesofacitytreasurerunderthelawsoftheStateofWashingtonorordinancesoftheCity.
HH."ULID"means any utility local improvement district of the City.
II."1992Bond Insurer"means the insurer of the 1992 Bonds pursuant tothe1992BondOrdinance.
Section 2.Compliance with Parity conditions.The City has reservedtherighttoissueadditionalbondsonaparityoflienwiththeOutstandingBonds,provided that,at the time of issuance of such parity lien bonds,theconditionssetforthinSection12,subsections A through F,inclusive,ofthe1992BondOrdinanceandsection13,subsections A through F,inclusive ofthe1994Bondordinance(the "Parity Provisions")are completely met andcompliedwithpriortotheissuanceofsaidparitybonds.As required by theParityProvisions,the City Council hereby finds and determines as follows:
First,that the Bonds are being issued for the purpose of providingfundstoacquire,construct and install additions and improvements to andextensionsofandacquirenecessaryequipmentfortheSystem.
Second,that all payments required by the 1992 Bond Ordinance and1994BondOrdinancetohavebeenmadeintotheDebtServiceAccountandtheeserveAccountofthe1992BondFundandthe1994BondFundhavebeenmadendnodeficiencyexistsinsaidFundorAccounts.
Third,that the 1994 Bond Ordinance requires that all assessmentsandinterestthereonhereaftercollectedinULIDNo.5 be paid directly inthe1994BondFundandtheReserveAccountandthatnootherULIDhasbeencreatedasofthedateofthisordinance.
Fourth,that this ordinance provides that principal of and interestontheBondsshallbepayableoutofaParityBondFundandrequirestheCitytomakeequalannualinstallmentsinsuchamountsthatbyMarch14,2001,the
WATERANDSEWERREVENUEBoms,1996 -Page 5
amount in the Reserve Account will equal the Reserve Requirement for theOutstandingBondsandtheBonds.
Fifth,that none of the 1996 Bonds are Term Bonds.
Sixth,that none of the 1996 Bonds are variable rate bonds.
Seventh,that at the time of the issuance and delivery of the Bondstherewillbeonfilewiththecity,a certificate of an independent licensedprofessionalengineerorcertifiedpublicaccountantthat(i)the "annualNetRevenueavailableforParityBonddebtservice"shall be at least equal to1.25 times the "netAnnual Debt Service"on the outstanding Parity Bonds andthe1996Bondsand(ii)that the "annualNet Revenue available for ParityBonddebtservicenexcludingAssessmentsineachcalendaryearshallbe atleastequalto80%of the Maximum Annual Debt Service on and the ReserveAccountdepositsfortheOutstandingParityBondsandthe1996Bonds.
The limitations and conditions contained in the Parity Provisions havingbeencompliedwithinthematteroftheissuanceoftheBonds,the paymentsrequiredbythisordinancetobemadeintothe1994BondFundandtheReserveAccountforthepurposeofpayingandsecuringthepaymentoftheprincipalofandinterestontheBondsshallconstitutealienupontheRevenueoftheSystemequalinranktothelienandchargethereonofthepaymentsrequiredtobemadeintothe1992BondFundandtheReserveAccountandthe1994BondFundandReserveAccounttopayandsecurethepaymentoftheprincipalofandinterestontheOutstandingParityBonds.
Section 3.Purpose and Authorization of the Bonds.For the purpose ofpayingpartofthecostandexpenseofthefollowingimprovements:
Extension of Water Distribution Lines:
Pipe
ize From Along To
10"S.R.17 Grape Drive A point approx.1900 feetsoutherlyofS.R.17
12"Grape Dr.Central Drive Valley Road
8"Central Dr.Evelyn Drive A point approx.700 feetsoutheasterlyofCentral Dr.
12"Central Dr.Central Place End of cul-de-sac
Extension of Sewage Collection Lines:
Size From Along To
8"Grape Dr.Central Drive Valley Road
8"Central Dr.Evelyn Drive A point approx.800 feetsoutheasterlyofCentral Dr.
10n S.R.17 Grape Drive A point approx.350 feet south-easterly of S.R.17
8"A point approx Grape Drive A point approx.1750 feet350southeas-southeasterly of S.R.17terlyofS.R.17
and to pay costs of issuance of the Bonds,the City shall issue and sell itsJuniorLienWaterandSewerRevenueBonds,1996 in the principal amount of$520,000.
Section 4.Description of the Bonds.
A.Date,Denomination,Payment,Transfer.The BondsshallbedesignatedasnJuniorLienWaterandSewerRevenueBonds,Series
WATERANDSEWERREVENUEBONDS,1996 -PagG 6
1996,"shall be dated March 15,1996,shall mature in the aggregate principal
amount of $520,000,shall be in the denomination of $5,000 each or anyintegralmultipleof$5,000,provided no Bond shall represent more than onematurity,shall be numbered separately in the manner and with any additional
designation as the Bond Registrar deems necessary for purposes ofidentification,shall be fully registered as to both principal and interest,
shall bear interest from such date until the bond bearing such interest has
been paid or its payment duly provided for,payable October 1,1996,andsemiannuallyonthefirstdaysofeachAprilandOctoberthereafter.The
Bonds shall be numbered separately in the manner and with any additional
designation as the Bond Registrar deems necessary for purposes ofidentification,and shall mature on April 1 of each of the following yearsandinthefollowingamounts:
Maturity Years Amounts Interest Rates
1997 $40,000 4.00%
1998 45,000 4.25%
1999 45,000 4.50%
2000 45,000 4.70%
2001 50,000 4.90%
2002 55,000 5.10%
2003 55,000 5.20%
2004 60,000 5.30%
2005 60,000 5.40%
2006 65,000 5.50%
Both principal of and interest on the Bonds shall be payable in lawful
money of the United States of America.The principal amount of the Bonds
shall be payable upon presentation and surrender thereof by the registered
owners on or after the maturity date at the office of a Co-Paying Agent.Interest on the Bonds shall be paid by check or draft mailed to theregisteredownerthereofornomineeofsuchownerattheaddressappearingonOtheregistrybooksoftheBondRegistraronthe15thdayofthemonthprecedingtheinterestpaymentdate.Interest installments may be paid bywiretransferuponwrittenrequestoftheRegisteredOwnerofoneormoreoftheBonds,provided,however,that such Registered Owner shall bear the BondRegistrar's fee for such wire transfer unless the wire transfer amounts to atleast$5,000 to a single account.The City will bear the cost of wiretransfersofamountsof$5,000 or more to a single account.In any event,any request for payment by wire transfer must be submitted to the BondRegistrarbythefifteenthdayofthecalendarmonthprecedingtheinterestpaymentdate.
Upon surrender thereof to the Bond Registrar,the Bonds areinterchangeableforbondsinanyauthorizeddenominationofanequalaggregateprincipalamountandofthesameinterestrateandmaturity.BondsmaybetransferredonlyifendorsedinthemannerprovidedthereonandsurrenderedtotheBondRegistrar.Such exchange or transfer shall bewithoutcosttotheownerortransferee.
The Bonds are special obligations of the city and do not constitute anindebtednessoftheCitywithinthemeaningoftheConstitutionoftheStateofWashington.The Bonds shall be obligations only of the 1994 Bond Fund andshallbepayableandsecuredasprovidedherein.The Bonds are not generalobligationsofthecity.
B.Optional Redemption.The Bonds shall not be subject to redemptionriortotheirrespectivematuritydates.
C.Open Market Purchase.The city may purchase any Bond or Bonds ontheopenmarketfromRevenueoftheSystemfrommoniesavailablethereforinaccordancewithsection5ofthisordinance,provided that any such Bondsshallbepurchasedforretirementonly.
Section 5.Revenue Fund Priorities.The Revenue of the System,shallbedepositedintheRevenueFundascollected,and the Revenue Fund shall beheldseparateandapartfromallotherfundsandaccountsoftheCity;provided,however,that when said Revenue is received,the Treasurer may,
WATERANDSEWERREVENUEBONos,19%-Page 7
consistent with the provisions of the ordinances authorizing the OutstandingSeniorLienBonds,of the 1992 Bond Ordinance,the 1994 Bond Ordinance,andofthisordinance,deposit amounts of such monies directly (i)into the 1985BondFundoranyParityBondFund,and any Debt service Account and anySinkingFundAccountinanyParityBondFund,(ii)into the Reserve Account,(iii)into other funds or accounts of the City that may be created hereaftertopayorsecurethepaymentoftheprincipalofandinterestonanyotherrevenueobligationsoftheCity,and (iv)into any construction fund or anyrepairandreplacementfundheretoforeorhereaftercreatedbytheCity.AnyRevenueoftheSystemdepositeddirectlyintoanyfundheretoforeorhereaftercreatedforcapitalimprovementstotheSysteminorderthatsuchRevenueshallbeexemptfromtheStateofWashingtontaxonrevenueofwaterandsewerutilitiesoperatingwithintheStateshallbedeemedtohavebeendepositedintheRevenueFundforpurposesofthisordinance.
The monies in the Revenue Fund shall be used only for the followingpurposesandinthefollowingorderofpriority:
First,to pay the Costs of Maintenance and Operation of the System;
Second,to make all payments required to be made into the 1985 BondFund;
Third,to make all payments required to pay the interest on anyParityBondsforwhichmoniesshallnothavebeenprovidedbyAssessments;
Fourth,to make all payments required to pay the principal of anyParityBonds,whether at maturity or due to mandatory redemption orsinkingfundprovisionsforTermBonds,for which monies shall not havebeenprovidedbyAssessments;
Fifth,to make all payments required to be made pursuant to aOreimbursementagreementinconnectionwithanySuretyBond,providedthat,if there is not sufficient Revenue of the system to make allpaymentsunderallapplicablereimbursementagreements,the paymentswillbemadeonaproratabasis;
Sixth,to make all payments required to be made into the ReserveAccountforwhichmoneyshallnothavebeenprovidedfromAssessments orfromthetransfertobemadefromthereserveaccountinthe1985BondFundtotheReserveAccountonJuly1,1996;
Seventh,to make all payments which may hereafter be required to bemadeintoanyfuturerepair,replacement or reserve fund or accountwhichmayberequiredbythecovenantsofFutureParityBonds;
Eighth,to make all payments required to be made into any otherredemptionfund,debt service account,reserve account or sinking fundaccountcreatedtopayandsecurethepaymentoftheprincipalofandinterestonanyrevenueobligationsoftheCityhavingalienupontheRevenueofthesystemandmoniesintheRevenueFundjuniorandinferiortothelienthereonforthepaymentoftheprincipalofandinterestonParityBonds;and
Ninth,to retire by redemption any outstanding water and sewerrevenueobligationsoftheCityortomakenecessaryadditions,betterments,improvements,extraordinary repairs,extensions andreplacementsoftheSystem,or any other lawful System purposes.
The City further reserves the right,at any time,to use any surplusRevenueoftheSystemavailableafterprovidingforthepaymentsrequired byparagraphsFirstthroughEighthinclusiveofthissectiontopurchaseanyoftheBondsintheopenmarketinaccordancewithSection4.C.of thisordinance.
Section 6.1994 Bond Fund and Accounts Therein.A special fund of theCityknownasthe"Water and Sewer Revenue Bond Fund,1994"(hereinbeforedefinedasthe"1994Bond Fundu)was heretofore established and created by
WATERANDSEWERREVENUEBONDS,1996 -Page 8
ordinance No.1624 in the office of the Treasurer and said fund shall bedrawnuponforthesolepurposeofpayingprincipalandinterestonthe1994Bonds,the 1996 Bonds and Future Parity Bonds.The 1994 Bond Fund isseparatedintoaDebtServiceAccountandaReserveAccount.Additionalseparateaccountsorsubaccountsmaybecreatedinthe1994BondFund forvariousseriesorissuesofFutureParityBonds.
A.Debt Service Account.Monies deposited in the Debt Service Accountshallbeusedonlyforthepurposeofpayingtheprincipalof,premium,ifany,and interest on the Bonds and any Future Parity Bonds.
As long as any Bonds remain outstanding,the City hereby irrevocablypledges,obligates and binds itself to set aside and pay from the Revenue oftheSystemandmoneyintheRevenueFundintotheDebtServiceAccountthoseamountsnecessary,along with Assessments deposited and other monies then onhandandavailableintheDebtServiceAccount,to pay the interest on alloutstandingBondsandtheprincipalofalloutstandingBondsassuchinterestandprincipalrespectivelybecomedueandpayable.Such payments on accountoftheBondsshallbemadeonorbeforethe25thdayofeachmonthasfollows:
1.Beginning with the month of May 1996,and continuing untilSeptember1996,at least one-fifth of the amount which,togetherwithavailableAssessmentsdepositedinthe1994BondFund,willequaltheinteresttobecomedueandpayableontheBondsonOctober1,1996.
2.Beginning with the month of May 1996,and continuing until March1997,at least one-eleventh of the amount which,together withavailableAssessmentsdepositedinthe1994BondFund,will equaltheprincipaloftheBondstobecomedueandpayableonApril1,1997.
O 3.Beginning with the month of October 1996,and continuing as long asanyoftheBondsareoutstandingandunpaid,at least one-sixth oftheamountwhich,together with available Assessments deposited inthe1994BondFund,will equal the interest to become due andpayableonthenextinterestpaymentdateonalloftheBondsthenoutstanding.
4.Beginning with the month of April 1997,and continuing as long asanyoftheBondsareoutstandingandunpaid,at least one-twelfthoftheamountwhich,together with Assessments and other monies ondepositinthe1994BondFundandavailabletherefor,will equaltheprincipaloftheBondstobecomedueandpayableonthenextprincipalpaymentdate.
B.Transfers to Sinking Fund Account.None of the Bonds are TermBonds.
Section 7.Reserve Account.The City irrevocably obligates and bindsitselftosetasideandmakepaymentsintotheReserveAccountinthe1994BondFund,beginning on the 10th day of March 1997,and annually thereaftercontinuingthroughMarch10,2001,an amount,which together with AssessmentIncome,investment earnings and other monies on deposit in said ReserveAccount,will be sufficient to establish a balance in the collective ReserveAccountbyMarch14,2001,equal to the Reserve Requirement.
A.Maintenance of and Limitation on Account Balance.From and afterOarch14,2001,the City shall maintain a balance in the Reserve Account inanamountequaltotheReserveRequirement.Because the Reserve Requirementwillchangefromtimetotimeaftereachannualprincipalpaymentonthe 1994BondsandtheBonds,as of July 2,1997,and as of each succeeding July 2 solongasanyParityBondsareoutstanding,the City shall compute the ReserveRequirement;and,to the extent that the balances in the collective ReserveAccountexceedsuchReserveRequirement,the excess amount shall be deemed tohavebeentransferredonsuchJuly2withrespecttothe1992Bonds,on thenextsucceedingAugust2withrespecttothe1994BondsandonthenextsucceedingApril2withrespecttotheBonds,at the option of the City,any
WATERANDSEWERREVENUE BONDS,1996 -Pac]e 9
Parity Bond Fund and Account therein and/or the Revenue Fund and applied forthepurposesoftherespectiveFundsandAccounts.
B.Issuance of Future Parity Bonds.The City further covenants and
agrees that in the event it issues any Future Parity Bonds it will provide ineachordinanceauthoriaingtheissuanceofthesamethat,unless and to theextentpaymentismadeintotheReserveAccountoutofAssessments,othermonieslegallyavailablethereforortheproceedsofsuchFutureParityOBonds,approximately equal annual payments will be made into the ReserveAccountoutofAssessmentsandmoniesintheRevenueFundsothatwithinfive(5)years from the date of the issuance of such Future Parity Bonds,thetotalamountofsuchpayments,with the amount already in the ReserveAccount,will be at least equal to the Reserve Requirement.
All monies on deposit in the Reserve Account prior to July 1,1996,shall apply only secure the payment of the 1994 Bonds,the Bonds and anyFutureParityBondsissuedpriortosuchdate;and no amount in the ReserveAccountshallbeallocableto,or available to pay,debt service on the 1992Bonds.
C.Use to Redeem Parity Bonds.Whenever there is a sufficient amountinallParityBondFundsandtheReserveAccounttopaytheprincipalof,premium if any,and interest on all Parity Bonds then outstanding,the moneyintheReserveAccountmaybeusedtopaysuchprincipal,premium,if any,and interest.Money in the Reserve Account may be withdrawn or set aside in
a special account to redeem and retire,by payment of principal of,premium,if any,and the interest due to the date of redemption or maturity,on anyoutstandingParityBondssolongasthemoniesremainingondepositintheReserveAccountareatleastequaltotheReserveRequirement.
D.Deficiencies.In the event there shall be a deficiency in anyParityBondFundDebtServiceAccounttomeetmaturinginstallmentsofinterestonorprincipalofandinterestonanyParityBondsoradeficiency&n any Sinking Fund Account to meet the required schedule of payments for theamortizationofanyTermBonds,such deficiency shall be made up from theReserveAccountbythewithdrawalofmoniestherefromand,if a deficiencystillexistsimmediatelypriortoaninterestpaymentdateandafterthewithdrawalofcash,the City shall then draw from any Surety Bond insufficientamounttomakeupthedeficiency.Such draw shall be made at suchtimesandundersuchconditionsastheagreementforsuchSuretyBondshallprovide.Any deficiency created in the Reserve Account by reason of any suchwithdrawalshallbemadeupoutofmoneyintheRevenueFundaftermaking
necessary provision for the payments required to be made by subparagraphsFirst,second,Third,Fourth,and Fifth of section 5 of this ordinance.Anysuchdeficiencyshallbemadeupwithinoneyearofanysuchwithdrawal.
E.Surety Bond.The City reserves the right at any time and from timetotimetoobtainoneormoreSuretyBondsinlieuofdepositingcashforallorpartoftheReserveRequirement.In the event any such Surety Bonds areobtained,the City covenants and agrees to maintain an amount in the ReserveAccountatleastequaltothedifferencebetweentheReserveRequirementandtheaggregatelimitontheamountpayableundersuchSuretyBondstopaydebtserviceonthe1992Bonds,the 1994 Bonder the Bonds and any Future ParityBonds(the nSurety Bond limitu).In the event that the Surety Bond limitshallbeexpectedtobereducedbyreasonofexpirationoftheSuretyBondonafixeddateortheendofafixedterm,the City hereby covenants and agreestoreplenishtheReserveAccounttoanamountequaltotheReserveRequirementnolaterthansuchdateofexpiration.In the event that theuretyBondlimitisreducedbyreasonofpaymentmadeunderaSuretyBondtoheBondRegistrartopayanyprincipaloforinterestonanyParityBonds,he City hereby covenants and agrees to make payments to the issuer of suchSuretyBondpursuanttothetermsofareimbursementagreementeffectivetoreinstatethemaximumsuretyBondlimit;and to the extent there is noapplicablereimbursementagreement,the City covenants and agrees to depositintheReserveAccountfrommoniesfirstavailablethereforpursuant toSection5ofthisordinancesuchamountsasarenecessarytoprovideabalancethereinequaltothethenapplicableReserveRequirement.
WATERANDSEWERREVENUEBONDS,1996 -Page 10
F.Variable Rate Parity Bonds.In the event that the City shall issueFutureParityBondsuponwhichtheinterestrateorratesoranyofthemarenotfixedatthetimeofissuance,the Reserve Requirement shall bedeterminedwithinthirtydaysaftereachJanuary1andJuly1(so long as anyParityBondsremainoutstandingwhichdonotbearafixedinterestrate)asfollows:Any Parity Bond which does not,on the applicable date ofcalculation,bear a fixed interest rate to its maturity date shall be deemedtobearinterestatafixedannualrateequaltotheaverageofthedailyOratesonsuchParityBondduringthe365consecutivedaysendingonthedateofcomputation(or,if shorter,the period beginning on the date of issuanceofsuchParityBondandendingonthedateofcomputation).None of the 1996Bondswillbevariableratebonds.As provided in section 12.E.of the 1992BondOrdinance,ru>variable rate Future Parity Bonds may be issued so long asthe1992Bondsareoutstandingandinsuredbythe1992BondInsurerwithoutthepriorwrittenconsentofthe1992BondInsurer.
Section 8.Investment of Monies in 1994 Bond Fund and Accounts.It istheintentionofthecitytopurchaseInvestmentswithmoniesinthe1994BondFundandAccountsthereinandtoapplytheInvestmentEarningsthereontothegeneralfundofthecityaspermittedbylaw.
Section 9.Lien Upon Revenue of the system.The amounts pledged bythisordinanceandanyordinanceheretoforeorhereafteradoptedauthorizingtheissuanceofParityBondstobepaidintoanyParityBondFundandtheReserveAccountfromtheRevenueFundareherebydeclaredtobeapriorlien
and charge upon the Revenue of the system superior to all other charges ofanykindornaturewhatsoeverexceptthecostofmaintenanceandoperationoftheSystemandexceptthelienoftheOutstandingSeniorLienBondsatalltimespriortoJuly1,1996,and further except that the amounts so pledged
are of equal lien to the charges upon such Revenue which were made by the1992BondOrdinanceandthe1994BondOrdinanceandwhichmayhereafterbemadetopayandsecurethepaymentoftheprincipalofandinterestonanyFutureParityBonds.
Section 10.Adequacy of Revenue to Make Required Payments.The CityCouncilherebyfindsthatinfixingtheamountstobepaidoutoftheRevenueofthesystemintotheParityBondFunds,and the various accounts therein,it has exercised due regard for the Costs of Maintenance and operation andhasnotobligatedtheCitytosetasideandpayintosuchFundsagreateramountoftheRevenueoftheSystemthaninitsjudgmentwillbeavailableoverandabovethecostsofMaintenanceandOperation.
Section 11.Defeasance.In the event that monies are irrevocably setasideinaspecialescrowfund(the "Escrow Fund")on the terms andconditionssetforthinthisSection11torefundalloranypartoftheBonds,with respect to the Bonds so refunded:
A.Payments into the 1994 Bond Fund for payment of principal ofandinterestontheBondsshallbediscontinued;
B.The Bonds shall cease to be entitled to any lien,benefitorsecurityofthisordinanceexcepttherighttoreceivethemoniesso setaside;and
C.The Bonds shall be deemed not to be outstanding under thisordinance;provided,that any Bonds so refunded shall be deemed to beoutstandingforthepurposeoftransfers,exchanges or the replacement oflostordestroyedBondspursuanttothisordinance.
OlvaEscrow Fund shall be established with a corporate fiduciary qualified todobusinessintheStateofWashingtonand:
(1)Monies set aside in said Escrow Fund shall be irrevocablypledgedtopayprincipalofandredemptionpremium,if any,and interestontherefundedBonds;and
(2)Said monies shall be held in cash and/or "governmentobligations"as defined in Chapter 39.53 RCW;
WATERANDSEWERREVENUEBONDS,1996 -9898 11
(3)Such government obligations shall mature at such time or timesandbearinterestatsuchratestoprovidewithoutanyreinvestmentthereofsufficientamountstopayinterestontherefundedBondswhendueandtoredeemandretiretherefundedBondsattheirrespectivematuritydates,mandatory redemption dates,and/or pursuant to anirrevocablecallofanyorallsuchrefundedBondsforredemptioninaccordancewiththeirterms;and
(4)The sufficiency of such cash and government obligations tomakesuchpaymentsshallhavebeenverifiedbyanindependentcertifiedpublicaccountant.
Section 12.Certain Covenants.The City hereby covenants and agreeswiththeownerandholderofeachofthe1992Bonds,the 1994 Bonds,theBondsandanyFutureParityBondsforaslongasanyofthesameremainoutstandingasfollows:
A.Application of Assessments.There are no AssessmentspresentlyoutstandingortobeleviedinanyULIDSotherthanULIDNo.5.AslongasanyParityBondsremainoutstanding,assessments levied in ULID No.5andinULIDshereaftercreatedtopaypartofthecostofimprovementstotheSystemforwhichFutureParityBondsareissuedshall(to extent suchassessmentsarenotappliedaspermittedbylawtopaymentofpartofthecostsoftheimprovementsfinancedbysuchULID)be pledged,respectively,tothe1994BondFundand/or any other Parity Bond Fund from which the 1994Bonds,the Bonds,and/or any such Future Parity Bonds are payable or to theReserveAccount.It is hereby provided,however,that nothing in thisordinanceorthissectionshallbeconstruedtoprohibittheCityfromissuingwaterandsewerrevenuebondsjuniorinlientothe1992Bonds,the1994Bonds,the Bonds and any Future Parity Bonds and pledging as securityfortheirpaymentassessmentsleviedinanyULIDwhichhasbeenspecificallycreatedtopaypartofthecostofimprovementstothesystemforwhichsuchjuniorlienbondsarespecificallyissued.
B.Rates and Charges;Coverage Requirement.It will fix,maintain and collect rates and charges for the use of the services andfacilitiesandallcommoditiessold,furnished or supplied by the System toensure(1)that the Revenue of the System is sufficient to pay all costs ofMaintenanceandOperation,to pay debt service on the outstanding Senior LienBonds,and to pay debt service on the 1992 Bonds,the 1994 Bonds,and theBonds,as well as any other amounts that the City is obligated to pay fromtheRevenueoftheSystem,and (2)that the Net Revenues in each calendaryearwillequalatleast(a)(i)1.25 times the difference between theMaximumAnnualDebtServiceandtheamountofAssessmentsdueinsuchcalendaryear,plus (ii)the Reserve Account deposits payable in suchcalendaryear;and (b)so long as the 1992 Bonds are outstanding and insuredbythe1992BondInsurer,Net Revenue excluding Assessments in each calendaryearwillequalatleast80%of the Maximum Annual Debt Service and ReserveAccountdeposits.
C.Pavment of Cost of Maintenance and Operation.After making orprovidingforthemonthlypaymentsfromtheRevenueFundasrequiredbySection6ofthisordinance,there shall be maintained in such FundsufficientmoniestoenabletheCitytocontinuouslymeetthecostsofMaintenanceandOperationoftheSystemonacurrentbasis.
D.Enforcement of Payment of Service Charges and Assessments.The City shall promptly take action to enforce the payment of delinquentservicechargesandAssessmentsbysuchmeansasarelegallyavailable.O E.Maintenance and Operation Standards.It will at all timesmaintainthesystemingoodrepair,working order and condition,and will atalltimesoperatetheSystemandthebusinessinconnectiontherewithinanefficientmannerandatareasonablecost.
F.Sale or Disposition of System.It will not sell orvoluntarilydisposeofallofthepropertiesoftheSystemunlessprovisionismadeforpaymentintotheParityBondFundsofasumsufficienttopaytheprincipalofandinterestonalloftheParityBondsoutstandingin
WATERANDSEWERREVENUEBONDS,1996 -Page 12
accordance with the terms thereof;nor will it sell or voluntarily dispose ofanypartofthepropertiesoftheSystem(unless the same are no longer used,useful or necessary in the operation of the System)unless provision is madeforpaymentintotheParityBondFundsofanamountwhichwillbeinatleastthesameproportiontotheamountoftheParityBondsoutstandingthattherevenuefromtheportionorpropertiesoftheSystemsoldordisposedofwhichwasavailablefordebtserviceontheParityBondsoutstandingforthetwelvemonthsprecedingsuchsaleordispositionbearstotherevenueavailableforsuchdebtservicefromtheSystemforthesameperiod.In theeventthatthereshallbemorethanoneParityBondFundatthetimeofanysuchsaleordispositionofapartoftheSystem,the City Council maydesignatebyordinanceorresolutionanyreasonabledistributionofsuchamountamongtheDebtServiceAccountsandSinkingFundAccountswithoutrestriction;otherwise,such amount shall be distributed among such AccountsprorataonthebasisoftheoutstandingParityBondprincipalrespectivelypayablefromsuchAccounts.
G.Books and Accounts;Annual Reports.It will,while any ParityBondsremainoutstanding,keep proper and separate accounts and records inwhichcompleteandseparateentriesshallbemadeofalltransactionsrelatingtotheSystem,and it will prepare and,at the written request oftheoriginalpurchaserorpurchasersofParityBondsoranysubsequentholdersorregisteredownersthereofitwillfurnishtosuchholdersorregisteredowners,complete operating and income statements of the system inreasonabledetailshowingthefinancialconditionofthewaterandseverdepartmentsoftheCityandcompliancewiththetermsandconditionsofthisordinancenotmorethan150daysafterthecloseofsuchcalendaryear;anditwillgrantanyholdersorregisteredownersofatleast25%of the thenoutstandingBondstherightatallreasonabletimestoinspecttheSystemandallrecords,accounts and data of the city relating thereto.Upon request ofanyholderorregisteredownerofanyoutstandingParityBonds,it will alsofurnishtosuchholderorregisteredowneracopyofthemostrecentlycompletedauditoftheCity's accounts by the State Auditor of Washington,orsuchotherauditasisauthorizedbylawinlieuthereof.
H.Insurance.It will at all times carry fire and extendedcoverageandsuchotherformsofinsuranceonsuchofthebuildings,equipment,facilities and properties of the City as under good practice areordinarilycarriedonsuchbuildings,equipment,facilities and properties byprivatelyownedutilitiesengagedintheoperationofwaterandseweragesystemstothefullinsurablevaluethereof,and will also carry adequatepublicliabilityandpropertydamageinsuranceatalltimes,and war riskinsuranceonallofsuchpropertiesifthesameshouldbecomeavailable.ThepremiumsonsuchinsurancepoliciesareherebydeclaredtobeanormalcostofmaintenanceandoperationoftheSystem;provided,however,that,with theconsentoftheregisteredownersofthe1992BondsinaccordancewithSubsections22.B.and 22.E.of the 1992 Bond Ordinance,the City may satisfysuchinsurancerequirementsthroughalocalgovernmentinsurancepool aspermittedbylaw.
I.No Free Service.It will not furnish water or sewer servicetoanycustomeroruseroftheSystemwhatsoeverfreeofcharge.
J.Special Funds.It will not create any special fund or fundstopayorsecurethepaymentofdebtserviceon,or authorize or issue,anyotherrevenuebonds,warrants or obligations which will rank on a parity withorhaveanypriorityoverthepaymentsintoorthemoniesinanyParityBondFund,except as provided in Section 13 of this ordinance relating to thessuanceofFutureParityBonds,nor will it create or permit any other lienrencumbrancewhichmaybereasonablyexpectedtoimpairthesecurityoftheonds.
K.Tax Code Covenant.It will make no use nor permit the use ofanyproceedsoftheBondsoranyotherfundsoftheCitywhich,if such usehadbeenreasonablyexpectedatthedatethattheBondsareissued,wouldhavecausedsuchBondstobearbitragebondswithinthemeaningofSection148(a)of the Code and will comply with all requirements ofSection148oftheCodetotheextentapplicabletoanyParityBonds.TheCityfurthercovenantsandagreesitwillnottakeanyaction,or fail to
WATERANDSEWERREVENUEBONDS,1996 -Page 13
take any action,if any such action,or failure to take action,wouldadverselyaffecttheexclusionfromgrossincomeoftheinterestontheBondsundersection103oftheCode.
Without limiting the generality of the foregoing,the City agreesthatthereshallbepaidwithintherequiredtimesallamountsrequiredtoberebatedtotheUnitedStatespursuanttoSection148(f)of the code and anytemporary,proposed or final Treasury regulations as may be applicable to anyoutstandingParityBondsfromtimetotime.This covenant shall survivepaymentinfullordefeasanceofanyParityBonds.The City Council herebyfindsanddeterminestheCityexpectstoissueLocalImprovementDistrict
No.58 Bonds in an amount not to exceed $1,885,000 (the "LID Bonds")and toissueaBondAnticipationNoteinexchangeforalineofcreditnottoexceed$3,020,000 to provide construction financing for certain fire station andadministrativefacilities(the "BAN"),but the City does not expect to draw
more than $2,500,000 against the BAN in 1996 so that,during calendar year1996,it is expected that all tax-exempt obligations (including the Bonds)will not exceed,in total aggregate principal amount,$5,000,000.
Notwithstanding any provision of this section,if the City shallobtainanopinionofnationallyrecognizedbondcounseltotheeffectthatanyactionrequiredunderthissubsectionisnolongerrequired,or to theeffectthatsomefurtheractionisrequired,to maintain the exclusion fromgrossincomeoftheinterestontheBondspursuanttoSection103oftheCode,the city may rely conclusively on such opinion in complying with theprovisionshereof.
L.No Senior Lien Future Parity Bonds.The provisions ofordinancesNo.1184 and No.1436 authorizing the Outstanding Senior LienBondsnotwithstanding,the city hereby covenants that it will issue no waterandsewerrevenuebondsforanypurposewhatsoeverwhichpurporttohave alienontheRevenueofthesystemequaltothelienthereonforpaymentofprincipalofandinterestontheoutstandingseniorLienBonds.
Section 13.Future Parity Bonds.The City reserves the right for thepurposeof:
First,acquiring,constructing and installing additions,betterments and improvements to and extensions of,acquiring necessaryequipmentfor,or making necessary replacements of or repairs or capitalimprovementstotheSystem,or
second,refunding by exchange or by redemption or purchasing andretiringatorpriortotheirmaturityanypartoralloftheoutstandingwaterandsewerrevenuebondsofthecity,
to issue additional and/or refunding water and sewer revenue bonds therefor(hereinbefore defined as "Future Parity Bondsu),to create additional ParityBondFunds,and to make payments into the 1992 Bond Fund,the 1994 Bond FundoranysuchadditionalParityBondFundsandintotheReserveAccountfromtheRevenueoftheSystemandAssessmentssufficienttopaytheprincipalofandinterestonsuchFutureParityBondsandtomaintainareservethereforashereinafterrequired,which payments may rank equally with the paymentsrequiredbythisordinancetobemadeoutofsuchRevenueandAssessmentsfortheBonds,upon compliance with the following conditions:
A.That all payments then required by this ordinance and all paymentsthenrequiredbyanyordinanceheretoforeorhereafteradoptedpertaining tonythenoutstandingParityBondsshallhavebeenmadeintoallParityBondundsandtheReserveAccountandthatnodeficiencyexiststherein;and
B.That the ordinance providing for the issuance of such Future ParityBondsshallprovidethatallassessmentsandinterestthereonwhichmay beleviedinanyULIDhereaftercreatedforthepurposeofpayinginwholeorinparttheprincipalofandinterestonsuchFutureParityBondsshall(to theextentsuchassessmentsarenotappliedaspermittedbylawtopaymentofthecostoftheimprovementsfinancedbysuchULID)be pledged and paid directlyintoaParityBondFundortheReserveAccount;and
WATERANDSEWERREVENUEBONDS,1996 -Page 14
C.That the ordinance providing for the issuance of such Future ParityBondsshallprovideforthepaymentssetforthinSection7.B of thisordinance;and
D.That,in the event such Future Parity Bonds contain Term Bonds,theordinanceauthorizingtheirissuanceshallprovideforascheduleofpaymentstobemadefromRevenueoftheSystemandAssessments,if any,into a sinkingFundAccounttoamortizetheprincipalofsuchTermBondsonorbeforethematuritydatethereof;and
E.That,so long as any of the 1992 Bonds remain outstanding,novariablerateFutureParityBondsmaybeissuedwithoutthepriorwrittenconsentofthe1992BondInsurerandsuchconsentshallspecificallyapprovetheliquidityfacilitytobeprovidedforanysuchvariablerateFutureParityBonds.
F.That,prior to delivery of such Future Parity Bonds,there shall beonfilewiththeCityacertificateofanindependentlicensedprofessionalengineerorcertifiedpublicaccountantshowing,that in the professionalopinionofsuchengineeroraccountanttheannualNetRevenueavailable forParityBonddebtserviceshallbeatleastequalto1.25 times (i)the netAnnualDebtServiceonthethenoutstandingParityBondsandtheproposedFutureParityBondsand(ii)so long as the 1992 Bonds are outstanding andinsuredbythe1992BondInsurer,Net Revenue available for Parity Bond DebtServiceexcludingAssessmentsineachcalendaryearshallbeatleastequalto80%of the Maximum Annual Debt service on and Reserve Account deposits forthethenoutstandingParityBondsandtheproposedFutureParityBonds."NetAnnualDebtService"means the Annual Debt Service minus the Assessments(projected in accordance with the following paragraph).
For the purpose of such certificate the engineer or accountant shall usetheNetRevenueforanytwelveconsecutivecalendarmonthsoutoftheimmediatelypreceding24consecutivemonths,shall assume that outstandingOAssessmentsshallbepaidinscheduledinstallments,without prepayment,andappliedinaccordancewiththeprovisionsoftheordinancesauthorizingtheoutstandingParityBondsandtheproposedFutureParityBonds,and mayprojecttheNetRevenueforanyportionsoftheSystemwhichcameintooperationpriortothedeliveryoftheproposedFutureParityBonds,butwhichwerenotinoperationduringtheentire12-month base period.IndeterminingdebtserviceontheoutstandingParityBondsandtheproposedFutureParityBonds,the engineer or accountant shall assume that any ParityTermBondsandFutureParityTermBondswillberetiredinaccordancewithmandatoryredemptionrequirementsormandatoryapplicationofsinkingfundpayments.In the event any of the outstanding Parity Bonds or the FutureParityBondsproposedtobeissuedarevariableinterestratebonds,theinterestonsuchbondsshallbeestimatedinaccordancewithSubsection7.Fofthisordinance,provided that the proposed Future Parity Bonds shall bedeemedtohavebeenissued180dayspriortothedateofsuchengineer's.oraccountant's certificate.The following adjustments may be made to thehistoricalNetRevenueoftheCityorprojectedNetRevenueofthecity:
(1)Any rate change in effect prior to the delivery of theproposedFutureParityBondsmaybereflected;
(2)Revenue may be added from customers actually added to theSystemduringthe12-month base period to the extent the historical NetRevenuedoesnotincludesuchrevenues;
(3)Service charge revenue may be added from customers to beO,ervedby the improvements being constructed out of the proceeds of theFutureParityBondstobeissued,but only to the extent that each suchadditionalcustomershallhaveamandatorydutytoconnectpropertytotheSystem[a]which property is served by an existing private water sourceand/or septic system or [b]which property is improved with one or moreresidentialdwellingsorcommercialorindustrialfacilitiesandabindingcontracttopurchasesuchpropertybytheanticipatedadditionalcustomerisineffect,provided that,so long as the 1992 Bonds are outstanding andinsuredbythe1992BondInsurer,no more than 75%of such service chargerevenuemaybeadded;
WATERANDSEWERREVENUEBONDs,1996 -Page 15
(4)Actual or anticipated changes in the operation and maintenanceexpensessubsequenttothe12-month base period shall be added or deducted,as applicable,provided that,so long as the Bonds are outstanding andinsuredbythe1992BondInsurer,only actual reductions in such expenseswhichoccurpriortodeliveryoftheproposedFutureParityBondsandwhichwillbecontinuingmaybededucted.
Nothing contained in this section shall prevent the city from issuingrevenuebondshavingajuniorlienontheRevenueoftheSystemorfrompledgingthepaymentofULIDassessmentsintoabondredemptionfundoraccountcreatedtopayandsecurethepaymentoftheprincipalofandinterestonsuchjuniorlienbondsaslongassuchassessmentsareleviedtopaypartorallofthecostofimprovementsbeingconstructedoutoftheproceedsofthesaleofsuchjuniorlienbonds.
Section 14.Form of the Bonds.The Bonds shall be in substantiallythefollowingform:
UNITED STATES OF AMERICA
NO.g
STATE OF WASHINGTON
CITY OF MOSES LAKE,WASHINGTON
JUNIOR LIEN WATERAND SEWER REVENUE BOND,SERIES 1996
INTEREST RATE:MATURITY DATE:CUSIP NO.:
SEE REVERSE SIDE FORERTAINDEFINITIONS
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The City of Moses Lake,Washington,a municipal corporation organizedandexistingunderandbyvirtueofthelawsofthestateofWashington,(the"Cityn)for value received hereby promises to pay to the Registered Owneridentifiedabove,or registered nominees,on the Maturity Date specifiedabove,the Principal Amount indicated above and to pay interest thereon fromthedateofthisbond,or the most recent date to which interest has beenpaidordulyprovidedfor,until the payment of this bond at the InterestRateperannumsetforthabove,payable on October 1,1996,and semiannuallythereafteronthefirstdaysofeachAprilandOctobertoandincluding itsMaturityDatewithfullobligationofthecitytopayinterestatthesameratefromandafterthebondmaturitydateuntilthisbondwithinterestispaidinfull,or funds are available in the "City of Moses Lake Water andSewerRevenueBondFund,1994"(the "1994Bond Fund")for payment in full.
Both principal of and interest on this bond are payable in lawful moneyoftheUnitedStatesofAmerica.Interest shall be paid by check or draftailedtotheRegisteredOwnerhereofornomineeofsuchownerattheaddressppearingontheregistrybooksoftheBondRegistraronthe15thdayofthemonthprecedingtheinterestpaymentdate.Principal shall be payable uponpresentationandsurrenderofthiscertificatebytheRegisteredOwnerornomineeofsuchownerattheprincipalofficeofeitherofthefiscalagenciesoftheStateofWashingtoninthecitiesofSeattle,Washington,andNewYork,New York (the nBond Registrar").
Said principal and interest are payable solely out of the 1994 Bond FundcreatedbyOrdinanceNo.1624 of the City into which fund the City herebyirrevocablybindsitselftopaycertainfixedamountsoutoftheRevenueof
WATERANDSEWERREVENUEBONDS,1996 -Page 16
the System,as the same are defined in the Ordinance No.(the "BondOrdinance"),namely,amounts sufficient to pay the principal of and interestontheWaterandSewerRevenueBonds,Series 1994,issued under date ofAugust15,1994,and the bonds of this issue (the "Bonds")as they becomedue,and on any water and sewer revenue bonds which are hereafter issued onaparityoflienwiththeBondsanddesignatedtobepayableoutofthe1994BondFundandtoaccumulateareserve,all at the times and in the manner setforthintheBondordinance.O Reference is made to the Bond ordinance for definition of othercapitalizedtermsusedherein.
By the Bond ordinance,the City has designated the Bonds to,hequalifiedtax-exempt obligations pursuant to section 265(b)of the InternalRevenueCodeof1986relatingtofinancialinstitutions.
Reference is hereby made to additional provisions of this bond set forthonthereversesidehereofandsuchadditionalprovisionsshallforallpurposeshavethesameeffectasifsetforthinthisspace.
It is hereby certified that all acts,conditions and things required bytheConstitutionandlawsoftheStateofWashingtonandordinancesoftheCitytobedone,to happen or to be performed as conditions precedent to theissuanceofthisbondhavebeendone,have happened and have been performedasrequiredbylaw.
This bond shall not become valid or obligatory for any purpose or beentitledtoanysecurityorbenefitundertheBondOrdinanceuntilthecertificateofauthenticationsetforthhereonhasbeenmanuallysignedbytheBondRegistrar.
IN WITNESS WHEREOF,the City has caused this bond to be signed by thefacsimileormanualsignaturesoftheMayorandcityClerkanditscorporateOsealtobeimpressedorafacsimilethereoftobeimprintedhereonthis15thdayofMarch,1996.
CITY OF MOSES LAKEr WASHINGTON
By (facsimile signature)Mayor
Attest:
(facsimile signature)City Clerk
Date of Authentication:
CERTIFICATE OF AUTHENTICATION
This bond is one of the fully registered City of Moses Lake,Washington,"Junior Lien Water and Sewer Revenue Bonds,Series 1996"described in thewithinmentionedbondordinance.
WASHINGTON STATE FISCAL AGENCYBondRegistrar
By (manual signature)Authorized Officer
ADDITIONAL PROVISIONS
This bond is one of an issue of $520,000 aggregate original principalamountofbondsoflikedate,tenor and effect,except as to interest rate,maturity and redemption provisions,all payable from the 1994 Bond Fund andallissuedbytheCityunderandpursuanttotheConstitutionandlawsofthe
WATERANDSEWERREVENUEBONDS,1996 -Page 17
State of Washington and the Bond Ordinance for the purpose of paying part ofthecostofextensionsofthewaterdistributionandsewagecollectionsystemsofthecity.
The City has not reserved the right to redeem any of the Bonds prior tomaturity.
O The City has irrevocably obligated and bound itself to pay into the 1994BondFundandtheReserveAccountoutofAssessmentsandRevenueoftheSystemorfromsuchothermoniesasmaybeprovidedthereforintheBondOrdinancecertainamountsnecessarytopayandsecurethepaymentoftheprincipalofandinterestontheBonds.The Bonds are not generalobligationsoftheCity.The Bonds are special obligations of the City anddonotconstituteanindebtednessoftheCitywithinthemeaningoftheConstitutionoftheStateofWashington.
The City hereby covenants and agrees with the owner of this bond that itwillkeepandperformallthecovenantsofthisbondandoftheBondOrdinancetobebyitkeptandperformed,and reference is hereby made to theBondOrdinanceforacompletestatementofsuchcovenants.
The City does hereby pledge and bind itself to set aside from theRevenueFundoutofRevenueoftheSystemandtopayintotheReserveAccountandthe1994BondFundthevariousamountsrequiredbytheBondordinancetobepaidintoandmaintainedinsuchFundandAccount,all within the timesprovidedbytheBondOrdinance.
To the extent more particularly provided by the Bond Ordinance theamountssopledgedtobepaidfromtheRevenueFundoutofRevenueoftheSystemintotheReserveAccountand1994BondFundshallbealienandchargethereonequalinranktothelienandchargeuponsuchRevenueoftheamountsrequiredtopayandsecurethepaymentofthe1992Bonds,the 1994 Bonds andanyrevenuebondsoftheCityhereafterissuedonaparitywiththeBondsandOsuperiortoallotherliensandchargesofanykindornature,except thelienandchargethereontopayandsecurethepaymentoftheoutstanding IwaterandsewerrevenuerefundingbondsofthecityissuedunderdateofNovember1,1985,and the outstanding water and sewer revenue bonds of theCityissuedunderdateofJuly1,1990,(the "Outstanding Senior Lien Bonds")and except the Costs of Operation and Maintenance of the System.
The City has further bound itself to maintain the System in good repair,working order and condition,to operate the same in an efficient manner andatareasonablecost,and to establish,maintain and collect rates andchargesineachcalendaryearthatwillmakeavailableanamountequaltothecoverageRequirementforsuchyear.
The pledge of Revenue of the System and Assessments of the City undertheBondordinancemaybedischargedatorpriortothematurityorredemptionoftheBondsuponthemakingofprovisionforthepaymentthereofonthetermsandconditionssetforthintheBondOrdinance.
Reference to the Bond Ordinance and any and all modifications andamendmentsthereofismadeforadescriptionofthenatureandextentofthesecurityfortheBonds,the funds or revenues pledged,and the terms andconditionsuponwhichtheBondsareissued.
This bond is transferable only upon the registry books of the BondRegistrarbysurrenderofthiscertificatetotheBondRegistrardulyassignedandexecutedasindicatedhereon.The Bonds are interchangeable forondsofanydenominationauthorizedbytheBondOrdinanceofanequalaggregatematurityamountandofthesamecompoundingrateandmaturity.TheBondRegistrarshallnotbeobligedtotransferorexchangethisbondduringthefifteendaysprecedinganyinterestpaymentdateorthedateonwhichnoticeofredemptionofsuchbondistobegivennoraftersuchnoticehasbeengiven.
WATERANDSEMERREVENUEBONDS,1996 -Page 18
I
The following abbreviations,when used in the inscription on the face ofthewithinbond,shall be construed as though they were written out in fullaccordingtoapplicablelawsorregulations:
TEN COM -as tenants in commonTENENT-as tenants by the entiretiesJTTEN-as joint tenants with right of survivorship and not as tenantsincommon
UNIF (GIFT)(TRANSFER)MIN ACT custodian
(Custoclian)
Custodian under
(Minor)Uniform (Gifts)(Transfers)to Minors Act
(state)
Additional abbreviations may also beusedthoughnotinlistabove
ASSIGNMENT
FOR VALUE RECEIVED,the undersigned hereby sells,assigns and
transfers unto
Please insert Social Security or Taxpayer
Identification Mmber of Transferee
O (Please print or typelerite nameand 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
for registration thereof with full power of substitution in the premises.
DATED:
SIGNATURE GUARANTEED:
NOTE:The signature on this Assign-ment must correspond with the nameoftheregisteredownerasitappearsuponthefaceofthewithinbondineveryparticular,withoutalterationorenlargementoranychangewhatever.
Section 15.Execution of the Bonds.The Bonds shall be signed onbehalfoftheCitybythefacsimileormanualsignatureoftheMayorofthecity,shall be attested by the facsimile or manual signature of the CityclerkandshallhavethecorporatesealoftheCityimpressedorafacsimilethereofimprintedthereon.
WATERANDSEWERREVENUEBONDS,1996 -Page 19
Only such Bonds as shall bear thereon a Certificate of Authentication intheformhereinbeforerecited,manually executed by the Bond Registrar,shallbevalidorobligatoryforanypurposeorentitledtothebenefitsofthisordinance.Such Certificate of Authentication shall be conclusive evidencethattheBondssoauthenticatedhavebeendulyexecuted,authenticated anddeliveredhereunderandareentitledtothebenefitsofthisordinance.
In case either of the officers who shall have executed the Bonds shalleasetobesuchofficerorofficersoftheCitybeforetheBondssosignedshallhavebeenauthenticatedordeliveredbytheBondRegistrar,or issuedbythecity,such Bonds may nevertheless be authenticated,delivered andissuedand,upon such authentication,delivery and issuance,shall be asbindingupontheCityasthoughthosewhosignedthesamehadcontinuedtobesuchofficersoftheCityasofthedateofauthenticationbytheBondRegistrar.Any Bond may also be signed and attested on behalf of the City bysuchpersonsasattheactualdateofexecutionofsuchBondshallbetheproperofficersofthecityalthoughattheoriginaldateofsuchBondanysuchpersonshallnothavebeensuchofficeroftheCity,
section 16.Bond Registrar.The fiscal agencies of the State ofWashingtoninseattle,Washington,and NeW York,New York,as appointed bytheStateofWashingtonfromtimetotime,are hereby appointed for thepurposesofregisteringandauthenticatingtheBonds,maintaining a bondregisterfortheBonds,effecting transfer of ownership of the Bonds and forthepurposesofpayinginterestonandprincipalof(and any premium pursuanttocallon)the Bonds.The Bond Registrar shall keep,or cause to be kept,at its principal corporate trust office,sufficient books for the registra-tion and transfer of the Bonds which shall at all times be open to inspectionbytheCity.The Bond Registrar is authorised,on behalf of the City,toauthenticateanddelivertheBondstransferredorexchangedinaccordancewiththeprovisionsofsuchBondsandthisordinanceandtocarryoutalloftheBondRegistrar's powers and duties under this ordinance.
O The Bond Registrar shall be responsible for its representationscontainedinthecertificateofAuthenticationontheBonds.The BondRegistrarmaybecometheownerofanyoftheBondswiththesamerightsitwouldhaveifitwerenottheBondRegistrar,and to the extent permitted bylaw,may act as depositary for and permit any of its officers or directors toactasamemberof,or in any other capacity with respect to,any committeeformedtoprotecttherightsofBondowners.
Section 17.Lost or Destroyed Bonds.In case any Bonds shall be lost,stolen or destroyed,the Bond Registrar may authenticate and deliver a newbondorbondsoflikeamount,date,maturity,interest rate,tenor,andeffecttotheownerthereofupontheowner's paying the expenses and chargesoftheCityinconnectiontherewithanduponhisfilingwiththeBondRegistrarevidencesatisfactorytosaidBondRegistrarthatsuchbondorbondswereactuallylost,stolen or destroyed and of his ownership thereof,and upon furnishing the City with indemnity satisfactory to the City and theBondRegistrar.
Section 18.Sale of the Bonds.The Bonds shall be sold to MartinNelson&Co.,Inc.at the price and on the terms set forth in its purchaseofferdatedMarch12,1996,and in this ordinance.
Section 19.Disposition of Bond Proceeds.Amounts received as proceedsofsaleoftheBondsshallbedepositedandappliedasfollows:
A.To the 1994 Bond Fund shall be paid the amount received on theOateofdeliveryoftheBondsasaccruedinterest,which amount shall beappliedtopayinterestcomingdueontheBondsonOctober1,1996;and
B.To the Water/sewer construction Fund,the amount to be cer-tified by the Finance Director upon delivery of the Bonds to have beenexpendedforcostsofthecostsoftheimprovementsdescribedinsection3ofthisordinancepursuanttoResolutionNo.1732 of the City and the OfficialIntentdeclarationofthecityManagerpertainingtosuchimprovements(together the "Reimbursement Resolution")prior to the date of delivery oftheBonds;and
WATERANDSEWERREVENUEBONDS,1996 -Pâge 2Õ
C.To the Revenue Fund shall be paid the balance of the proceeds,which shall be used for the sole purpose of paying costs of the improvementsdescribedinSection3ofthisordinanceandallcostsincidentaltheretoandtotheissuanceoftheBonds.Any bond proceeds,as defined by the code,remaining in said Revenue Fund after such improvements have been completedandsuchcostshavebeenpaidshallbetransferredtotheReserveAccount inthe1994BondFund.
Section 20.Authorization to Officials and Agents.The appropriateCityofficials,agents and representatives of the city are hereby authorizedanddirectedtodoeverythingnecessaryfortheexecutionoftheBondPurchaseAgreement,the prompt issuance,execution,authentication anddeliveryoftheBonds,and for the proper use and application of the proceedsofthesalethereof.
The City Manager is authorized to review and approve,on behalf of theCity,the Official Statement relating to the issuance and sale of the Bondswithsuchchanges,if any,as such officer may deem appropriate.
Section 21.Supplemental Ordinances.
A.The City Council from time to time and at any time may adopt anordinanceorordinancessupplementaltothisordinancewhichsupplementalordinanceorordinancesthereaftershallbecomeapartofthisordinance,foranyoneormoreorallofthefollowingpurposes.
1.To add to the covenants and agreements of the City containedinthisordinanceothercovenantsandagreementsthereafterto beobservedwhichshallnotadverselyaffecttheinterestsoftheownersofanyParityBondsortosurrenderanyrightorpowerhereinreservedtoorconferredupontheCity.
2.To make such provisions for the purpose of caring anyOambiguitiesorofcuring,correcting or supplementing any defectiveprovisioncontainedinthe1992BondOrdinance,the 1994 Bond ordinance,this ordinance or any ordinance authorizing Future Parity Bonds inregardtomattersorquestionsarisingundersuchordinancesastheCityCouncilmaydeemnecessaryordesirableandnotinconsistentwithsuchordinancesandwhichshallnotadverselyaffecttheinterestoftheownersofParityBonds.
3.To make such additions,deletions or modifications as may benecessarytoassureexclusionofinterestontheBondsfromgrossincomeundertheCode.
Subject to Subsections 21.B and 21.E of this ordinance,any suchsupplementalordinanceoftheCitymaybeadoptedwithouttheconsentoftheownersofanyParityBondsatanytimeoutstanding,notwithstanding any oftheprovisionsofSubsectionBofthissection.
B.With the consent of the owners of not less than 65%in aggregateprincipalamountoftheParityBondsatthetimeoutstanding,the CityCouncilmayadoptanordinanceorordinancessupplementalheretoforthepurposeofaddinganyprovisionstoorchanginginanymanneroreliminatinganyoftheprovisionsofthisordinanceorofanysupplementalordinance;provided,however,that no such supplemental ordinance shall:
1.Extend the fixed maturity of any Parity Bonds or reduce therateofinterestthereon,or extend the times of payments of interestthereonfromtheirduedatesorreducetheamountoftheprincipalthereof,or reduce any premium payable on the redemption thereof ,without the consent of the owner of each bond so affected.
2.Reduce the aforesaid percentage of Parity Bond owners requiredtoapproveanysuchsupplementalordinance,without the consent of theownersofalloftheParityBondsthenoutstanding.
Except as provided in Subsection 24.8 of the 1992 Bond Ordinance,it shallnotbenecessaryfortheconsentofbondownersunderthisSubsectionBto
WATERANDSEWERREVENUEBONDS,1996 -P&gB 21
approve the particular form of any proposed supplemental ordinance,but itshallbesufficientifsuchconsentshallapprovethesubstancethereof.
C.Upon the adoption of any supplemental ordinance pursuant to theprovisionsofthissection,this ordinance shall he deemed to be modified andamendedinaccordancetherewith,and the respective rights,duties andobligationsoftheCityunderthisordinanceandallownersofBondsoutstandinghereundershallthereafterbedetermined,exercised and enforcedhereunder,subject in all respects to such modification and amendments,and11thetermsandconditionsofanysuchsupplementalordinanceshallbedeemedtobepartofthetermsandconditionsofthisordinanceforanyandallpurposes.
D.Bonds executed and delivered after the execution of anysupplementalordinanceadoptedpursuanttotheprovisionsofthissectionmaybearanotationastoanymatterprovidedforinsuchsupplementalordinance,and if such supplemental ordinance shall so provide,new bonds so modified astoconform,in the opinion of the City Council,to any modification of thisordinancecontainedinanysuchsupplementalordinance,may be prepared bythecityanddeliveredwithoutcosttotheownersoftheBondsthenoutstanding,upon surrender for cancellation of such Bonds in equal aggregateprincipalamounts.
E.Notwithstanding the foregoing provisions,so long as any 1992 Bondsareoutstandingandinsuredbythe1992BondInsurer,any supplementalordinancesshallbesubjecttoSubsection24.B of the 1992 Bond Ordinance.
Section 22.Findings and Designation of Bank Eligibility.The CityCouncilherebyfindsanddeterminesthattheCitydoesnotexpecttoissuemorethan$10,000,000 aggregate principal amount of obligations the interestonwhichisorwillbeexcludedfromgrossincomeundertheCode,includingbutnotlimitedtorevenuebondsandnotes,revenue anticipation notes,andleasepurchaseorinstallmentpurchasecontractsincalendaryear1996;and,therefore,the city Council hereby finds and determines that the Bonds are,xxl are hereby designated to be,qualified tax-exempt obligations pursuant toSection265(b)(3)of the Code relating to financial institutions.
Section 23.Severability.If any one or more of the covenants oragreementsprovidedinthisordinancetobeperformedonthepartofthecityshallbedeclaredbyacourtofcompetentjurisdictiontobecontrarytolaw,then such covenant or covenants,agreement or agreements shall be null andvoidandshallhedeemedseparablefromtheremainingcovenantsandagreementsofthisordinanceandshallinnowayaffectthevalidityoftheotherprovisionsofthisordinanceoroftheBonds.
Section 24.Effective Date.This ordinance shall take effect five daysafteritsadoptionandpublicationinthemannerprovidedbylaw.
ADOPTED by the City Council of the City of Moses Lake,Washington,ataregularopenpublicmeetingthereofheldthis12thdayofMarch,1996.
AT
CITY HINGTON
City Cle i
PPRO AS TO FORMY
C y Attorney
PUBLISHED:PARCH21,1996
WATERANDSEWERREVENUEBONDS,1996 -PagS 2 2