HomeMy WebLinkAboutOrd 1408 - Water and Sewer Revenue Bonds for Waterworks Utility
1413 A, 6, 9 1575 §9
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CITY OF TUKWILA
WHEREAS, the City of Tukwila, Washington, (then the Town of Tukwila)
by Ordinance No. 320, passed by the Town Council and approved by the Mayor on
May 1,1961, and subsequently amended, specified and adopted a system or plan
for a system of sewerage for the Town and provided that the system of sewerage
become a part of the waterworks utility of the Town, and authorized the
issuance and sale of Water and Sewer Revenue Bonds, 1961, in the principal
amount of not to exceed $170,000 to pay a portion of the cost thereof, such
waterworks utility, as hereinafter referred to, being deemed to include the
systems of water supply and distribution and sanitary sewage disposal, as com-
bined by Ordinance No. 320 pursuant to RCW 35.67.320, and any additions
thereto and extensions, renewals and betterments thereof hereafter made or
constructed, and
WHEREAS, $170,000 of the Water and Sewer Revenue Bonds, 1961 (the
11 1961 Bonds were issued pursuant to Ordinance No. 334 and are payable from
the gross revenues of the waterworks utility, including as a part of such
revenues a water and sanitary sewage disposal service surchage payable under a
contract between the City and Puget Western, Inc., a Washington corporation;
and
Y:
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I 3 ORDINANCE NO. f
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AN ORDINANCE OF THE CITY OF TUKWILA, WASHINGTO N RELATING TO THE
WATERWORKS UTILITY OF THE CITY, INCLUDING THE SYSTEM OF SEWERAGE
AS A PART THEREOF; AMENDING ORDINANCE NO. 1337; PROVIDING FOR
THE ISSUANCE OF $3,600,000 PRINCIPAL AMOUNT OF WATER AND SEWER
REVENUE BONDS, 1986, OF THE CITY FOR THE PURPOSE OF PROVIDING
FUNDS TO PAY THE COST OF REDEEMING, BOTH PRINCIPAL AND INTEREST,
THE OUTSTANDING WATER AND SEWER REVENUE BOND ANTICIPATION NOTES,
1984, OF THE CITY, TO PAY THE COSTS OF CARRYING OUT A PORTION OF
THE SYSTEM OR PLAN OF ADDITIONS TO AND BETTERMENTS AND EXTEN-
SIONS OF THE WATERWORKS UTILITY OF THE CITY ADOPTED BY ORDINANCE
NO. 1337, AS HEREIN AMENDED, AND TO PAY THE COSTS OF ISSUING THE
BONDS; FIXING THE DATE, FORM, MATURITIES, INTEREST RATES, TERMS
AND COVENANTS OF SUCH BONDS; AND PROVIDING FOR THE SALE AND
DELIVERY OF SUCH BONDS TO SHEARSON LEHMAN BROTHERS, INC., FOSTER
MARSHALL DIVISION OF SEATTLE, WASHINGTON.
WHEREAS, the City of Tukwila, Washington, (then the Town of Tukwila)
by Ordinance No. 320, passed by the Town Council and approved by the Mayor on
May 1,1961, and subsequently amended, specified and adopted a system or plan
for a system of sewerage for the Town and provided that the system of sewerage
become a part of the waterworks utility of the Town, and authorized the
issuance and sale of Water and Sewer Revenue Bonds, 1961, in the principal
amount of not to exceed $170,000 to pay a portion of the cost thereof, such
waterworks utility, as hereinafter referred to, being deemed to include the
systems of water supply and distribution and sanitary sewage disposal, as com-
bined by Ordinance No. 320 pursuant to RCW 35.67.320, and any additions
thereto and extensions, renewals and betterments thereof hereafter made or
constructed, and
WHEREAS, $170,000 of the Water and Sewer Revenue Bonds, 1961 (the
11 1961 Bonds were issued pursuant to Ordinance No. 334 and are payable from
the gross revenues of the waterworks utility, including as a part of such
revenues a water and sanitary sewage disposal service surchage payable under a
contract between the City and Puget Western, Inc., a Washington corporation;
and
Y:
WHEREAS, the City, in Section 7 of Ordinance No. 334
authorizing the issuance of the 1961 Bonds, reserved the right
to issue additional or refunding water and sewer revenue bonds
on a parity of lien with the 1961 Bonds if the following condi-
tions were met and complied with at the time of the issuance of
such additional or refunding bonds:
"(a) All payments then required by this
Ordinance or any other ordinance hereafter enacted
pertaining to the Bonds and to any such additional
or refunding water and sewer revenue bonds here-
after issued shall have been made into the Bond
Fund and maintained intact therein; and
"(b) The revenues of the waterworks utility
of the Town, including any water and sanitary
sewage disposal service surcharge payable under any
Agreement between the Town and any third party, for
any twelve months out of the immediately preceding
fifteen months' period adjusted to reflect a year's
net income from each customer of the waterworks
utility of the Town connected to such utility at
the end of that twelve -month period who has not
been a customer for the entire twelve -month period,
plus the additional revenue, from whatever source
and of whatever nature, anticipated to be received
from the improvement in connection with which
additional water and sewer revenue bonds are to be
issued, shall be deemed sufficient, after the
payment of normal operation and maintenance costs
and state and federal taxes, to equal at least 1.35
times the average annual principal and interest
requirements of all then outstanding water and
sewer revenue bonds, including the Bonds and of the
additional or refunding bonds proposed to be so
issued, but except the principal requirements of
any term bond maturity year or years, as defined in
Section 8 of this Ordinance of any bonds payable
out of the Bond Fund. Such determination of the
sufficiency of the revenues shall be made and
certified to by an independent professional regis-
tered engineer experienced in municipal utilities
and licensed to practice in the State of
Washington; except, that if such additional bonds
proposed to be so issued are for the sole purpose
of refunding water and sewer revenue bonds, such
certification of coverage shall not be required if
the amount required for payment of the principal
and interest in each year for the refunding bonds
is not increased over the amount required for bonds
to be refunded thereby and the maturities of the
bonds to be refunded thereby; and
"(c) The ordinance authorizing the issuance
of such additional bonds shall provide that such
additional bonds shall provide that an amount equal
to the average annual debt service of the addi-
tional bonds proposed to be issued shall be
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accumulated as a reserve in the Bond Fund, said
amounts to be accumulated by monthly deposits
commencing not later than one month after the date
of issuance of the additional bonds and to be
accumulated within five years after the date of
issuance of such bonds, and said reserve to be
maintained in such amounts so long as any of those
additional bonds are outstanding to the last
maturity thereof. In the case of parity refunding
bonds the ordinance authorizing the issuance of
such refunding bonds shall provide that the money
in the Reserve Account for the bonds to be refunded
shall be transferred to the 'Reserve Account' in
the Bond Fund, or that the moneys in the 'Reserve
Account' for the bonds to be refunded shall be used
to redeem such bonds, in which event an amount
equal to the average annual debt service for the
refunding bonds proposed to be issued shall be
accumulated as a reserve in the same manner and
within the same times as set forth herein for
additional revenue bonds.
"In lieu of the accumulation of a reserve in
the manner provided in this subsection 7(c), the
ordinance authorizing such additional bonds may
provide for a cash deposit by a third party with an
escrow agent acceptable to the Town in an amount
equal to the average annual debt service of the
additional bonds proposed to be issued, which
deposit shall be made on or before the delivery of
the additional bonds and shall be conditioned on
the payment into the 'Reserve Account' of the Bond
Fund of amounts necessary to make up any deficiency
in the Principal and Interest Account in the Bond
Fund to meet maturing installments of either
principal or interest on such additional bonds.
That third party shall also be bound by agreement
with the Town to make such additional cash deposits
in escrow as are necessary to maintain that deposit
at the required level in the event that the origi-
nal or subsequent deposits are called upon to make
up the deficiencies in the Principal and Interest
Account of the Bond Fund. Such cash deposits shall
remain in escrow at the required level until the
moneys in the Reserve Account paid in for those
additional bonds equal the average annual debt
service of those additional bonds. and
WHEREAS, the City of Tukwila, Washington, by Ordinance
No. 381, passed by the City Council and appproved by the Mayor
on June 3, 1963, adopted a system or plan for making additions
to and betterments and extensions of the waterworks utility of
the City, consisting of the construction and installation of
certain sewer collection lines, trunk sewer lines, and general
facilities, estimated the total cost of such plan to be
$819,000, and provided that payment therefor would be made (a)
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by assessments to be levied in the amount of not to exceed
$412,000 against property specially benefited by the proposed
improvement and included in a local improvement district to be
formed, and (b) from the proceeds received from the issuance and
sale of Water and Sewer Revenue Bonds, 1963, in the amount of
not to exceed $407,000 par value; and
WHEREAS, by Ordinance No. 382, passed by the City Council
and approved by the Mayor on July 1, 1963, the system or plan of
additions to and betterments and extensions of the waterworks
utility of the City of Tukwila, as adopted by Ordinance No. 381,
was ordered to be carried out, Local Improvement District No. 5
was established, and it was ordered that not to exceed $412,000
of the cost and expense of carrying out such system or plan
should be paid by assessments to be levied in the amount of not
to exceed $412,000 against the property specially benefited by
such improvement and included in Local Improvement District
No. 5 and the remaining cost to be paid from the proceeds to be
received from the issuance and sale of Water and Sewer Revenue
Bonds, 1963 (the "1963 Bonds'), in the amount of not to exceed
$407,000, provided, however, that in the event that Val Vue
Sewer District, King County, Washington, should construct the
Val Vue Trunk Sewers as defined in Ordinance No. 381 the amount
of such water and sewer revenue bonds should be reduced by
$140,000 to not exceed $267,000; and
WHEREAS, the City thereafter contracted with Val Vue Sewer
District to construct the Val Vue Trunk Sewers, and, pursuant to
Ordinance No. 387, passed by the City Council and approved by
the Mayor on October 7, 1963, issued and sold $190,000 par value
of the not to exceed $267,000 par value of such 1963 Bonds on a
parity of lien with the 1961 Bonds; and
WHEREAS, the City Council heretofore determined that the
proceeds received from the issuance and sale of the 1963 Bonds
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were insufficient to complete the carrying out of the system or
plan of additions to and betterments and extensions of the
waterworks utility of the City, as adopted by Ordinance No. 381
and by Ordinance No. 422, passed by the City Council and
approved by the Mayor on January 18, 1965, issued and sold an
additional $45,000 par value of the remaining authorized but
unissued $77,000 par value of water and sewer revenue bonds
authorized by Ordinances Nos. 381 and 382, such $45,000 par vaue
of bonds having been combined with an additional authorized
$40,000 par value of bonds, and such combined issue of bonds was
issued under date of March 1, 1965, on a parity of lien with the
1961 Bonds and 1963 Bonds in the total amount of $85,000 par
value and designated as Water and Sewer Revenue Bonds, 1965 (the
"1965 Bonds and
WHEREAS, by Ordinance No. 748 passed by the City Council
and approved by the Mayor on November 20, 1972, the City issued
and sold $675,000 par value of Water and Sewer Refunding and
Construction Revenue Bonds, 1972 (the "1972 Bonds to provide
the funds to pay, redeem and retire the City's then outstanding
Water and Sewer Revenue Bonds, 1970, and to provide the funds
necessary to pay the cost of carrying out the system or plan of
additions to and betterments and extension of the waterworks
utility of the City, specified and adopted by such Ordinance
No. 748, which 1972 Bonds were issued on a parity of lien with
the 1961 Bonds, 1963 Bonds and 1965 Bonds in accordance with the
provisions of Section 7 of Ordinance No. 334; and
WHEREAS, by Ordinance No. 1337 passed by the City Council
and approved by the Mayor on December 3, 1984, the City speci-
fied, adopted and ordered the carrying out of a system or plan
of additions to and betterments and extensions of the waterworks
utility of the City, estimated the total cost of such plan to be
$2,900,000 and provided that payment therefor would be made from
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the proceeds received from the issuance and sale of water and
sewer revenue bonds in the amount not to exceed $2,900,000 and,
pending the issuance of such bonds, provided for the issuance
and sale of the City's Water and Sewer Revenue Bond Anticipation
Note, 1984, in the principal amount of $2,900,000 (the "Out-
standing Note which Note matures on December 20, 1986; and
WHEREAS, the cost of constructing such plan of additions to
and bettterments and extension of the waterworks utility of the
City has increased to approximately $3,600,000; and
WHEREAS the City Council deems it to be in the best inter-
est of the City that it issue its Water and Sewer Revenue Bonds,
1986, for the purpose of paying the cost of redeeming the
Outstanding Note, the cost of completing construction of the
plan of additions to and betterments and extensions of the
waterworks utility adopted by Ordinance No. 1337 and the costs
of issuance and sale of such bonds, and Shearson Lehman Brothers
Inc., Foster Marshall Division, has offered to purchase such
bonds on the terms and conditions hereinafter set forth; NOW,
THEREFORE,
THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, DO
ORDAIN as follows:
Section 1. As used in this ordinance, the following words
shall have the following meanings:
(a) "Bond Fund" shall mean that special fund of the
City known as the Water and Sewer Revenue Bond Fund, 1961,
created by Ordinance No. 334 for the payment of the principal of
and interest on the 1961 Bonds and any bonds issued on a parity
therewith, including the Outstanding Parity Bonds and the Bonds.
(b) "Bond Registrar" shall mean the fiscal agencies
of the State of Washington in Seattle, Washington, and New York,
New York, as the same may be designated from time to time.
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(c) "Bonds" shall mean the $3,600,000 par value of
Water and Sewer Revenue Bonds, 1986, of the City issued pursuant
to and for the purposes provided in this ordinance.
(d) "1961 Bonds" shall mean the $170,000 par value of
Water and Sewer Revenue Bonds, 1961, issued for the purposes
provided in and pursuant to Ordinance No. 334.
(e) "1963 Bonds" shall mean the $190,000 par value of
Water and Sewer Revenue Bonds, 1963, issued for the purposes
provided in and pursuant to Ordinance No. 387.
(f) "1965 Bonds" shall mean the $85,000 par value of
Water and Sewer Revenue Bonds, 1965, issued for the purposes
provided in and pursuant to Ordinance No. 422.
(g) "1972 Bonds" shall mean the $675,000 par value of
Water and Sewer Refunding and Construction Revenue Bonds, 1972,
issued for the purposes provided in and pursuant to Ordinance
No. 748.
(h) "City" shall mean the City of Tukwila, Washington.
(i) "Future Parity Bonds" shall mean any and all
water and sewer revenue bonds of the City issued after the date
of the issuance of the Bonds and in accordance with Section 7 of
Ordinance No. 334 and Section 10 herein, the payment of the
principal of and interest on which constitutes a charge and lien
on the gross revenues of the waterworks utility of the City
equal in rank with the charge and lien upon such revenue
required to be paid into the Bond Fund to pay and secure the
payment of the principal of and interest on the Outstanding
Parity Bonds and the Bonds.
(j) "Government Obligations" shall mean United States
Treasury Certificates, Notes and Bonds (including State and
Local Government Series SLGS) and direct obligations of the U.S.
Treasury which have been stripped by the Treasury itself
(excludes CATS, TGRS and similar securities).
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(k) "Outstanding Note" shall mean the $2,900,000 par
value Water and Sewer Revenue Bond Anticipation Note, 1984,
issued for the purposes provided in and pursuant to Ordinance
No. 1337.
(1) "Outstanding Parity Bonds" shall mean the out-
standing 1961 Bonds, 1963 Bonds, 1965 Bonds and 1972 Bonds.
(m) "Plan of Additions and Betterments" shall mean
the system or plan of additions to and betterments and exten-
sions of the waterworks utility of the City specified, adopted
and ordered to be carried out by Ordinance No. 1337, as amended,
of the City.
(n) "Principal and Interest Account" shall mean the
account of that name created in the Bond Fund for the payment of
the principal of and interest on the Outstanding Parity Bonds,
the Bonds and Future Parity Bonds.
(o) "Reserve Account" shall mean the account of that
name created in the Bond Fund for the purpose of securing the
payment of the principal of and interest on the Outstanding
Parity Bonds, the Bonds and Future Parity Bonds.
(p) "Term Bond Maturity Year or Years" shall mean any
last maturity year in which the outstanding amount of bonds of
any one issue or series which are scheduled to mature (regard-
less of any reservation of prior redemption rights) is more than
two times the average annual principal maturity of the bonds of
that issue or series and of all bonds issued on a parity there-
with for three years immediately proceding such term bond
maturity year.
(q) "Term Bonds" shall mean any bonds maturing in a
Term Bond Maturity Year.
Section 2. Section 4 of Ordinance No. 1337 is amended to
read as follows:
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Section 4. The estimated cost of the acquisi-
tion, construction and installation of the Plan of
Additions and Betterments, including the costs of
financing, issuance, sale and administration of the
Bonds, is declared to be, as near as may be, the sum
of $3,600,000, which shall be paid from the proceeds
of the issuance and sale of the Bonds and from any
other funds of the City legally available to be used
therefor. The Bonds are authorized to be issued at
such time as is determined by future ordinance, and
shall bear such interest, shall mature at such times
and contain such other terms and covenants as shall
be determined by future ordinance.
Section 3. The City Council finds:
(1) All payments required by any ordinance of the
City pertaining to outstanding water and sewer
revenue bonds of the City have been made into
the Bond Fund for the payment of such water and
sewer revenue bonds and no deficiency exists
therein; and
(2) There is or will be on file with the City prior 0)P61
to the delivery of the Bonds a certificate of an
independent professional registered engineer
experienced in municipal utilities and licensed
to practice in the State of Washington showing
that in his or her professional opinion the
revenues of the waterworks utility of the City,
including any water and sanitary sewage disposal
service surcharge payable under any Agreement
between the City and any third party, for any
twelve months out of the immediately preceding
fifteen months' period adjusted to reflect a
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year's net income from each customer of the
waterworks utility of the City connected to such
utility at the end of that twelve -month period
who has not been a customer for the entire
twelve -month period, plus the additional reve-
nue, from whatever source and of whatever
nature, anticipated to be received from the
improvement in connection with the issuance of
the Bonds, are sufficient, after the payment of
normal operation and maintenance costs and state
and federal taxes, to equal at least 1.35 times
the average annual principal and interest
requirements of the Outstanding Parity Bonds and
the Bonds, but except the principal requirements
of any term bond maturity year or years, as
defined in Section 8 of Ordinance No. 334.
(3) Provision is made in Section 6 herein for the
payment into the Reserve Account of the amounts
required by Section 7 of Ordinance No. 334.
Section 4. For the purpose of providing the funds required
to (1) pay the principal of and interest on the Outstanding
Note, (2) pay the cost of carrying out a portion of the Plan of
Additions and Betterments and (3) pay the costs of issuance of
the Bonds, the City shall issue the Bonds in the aggregate
principal amount of $3,600,000.
The Bonds shall be dated December 1, 1986; shall be in the
denomination of $5,000 or any integral multiple thereof within a
single maturity; shall be numbered separately in the manner and
with any additional designation as the Bond Registrar deems
necessary for purpose of identification; and shall bear interest
at the rates set forth below (computed on the basis of a 360 -day
year of twelve 30 -day months), payable on December 1, 1987, and
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semiannually thereafter on each succeeding June 1 and
December 1. The Bonds shall be payable solely out of the Bond
Fund, and shall be a valid claim of the owner thereof only as
against such Bond Fund and the amount of the gross revenues of
the waterworks utility of the City pledged to such fund and
shall not be general obligations of the City.
The Bonds shall bear interest at the rates and mature on
December 1 in years and amounts as follows:
Maturity Principal Interest
Years Amounts Rates
1987 $105,000 3.90%
1988 105,000 4.50
1989 110,000 4.75
1990 115,000 5.00
1991 125,000 5.20
1992 130,000 5.40
1993 135,000 5.60
1994 145,000 5.70
1995 155,000 5.90
1996 160,000 6.10
1997 170,000 6.25
1998 180,000 6.40
1999 195,000 6.50
2000 205,000 6.70
2001 220,000 6.80
2002 235,000 6.90
2003 250,000 6.95
2004 270,000 7.00
2005 285,000 7.00
2006 305,000 7.00
If any Bond is not redeemed upon proper presentment at its
maturity or call date, the City shall be obligated to pay
interest at the same rate for each such Bond from and after its
maturity or call date until such Bond, both principal and
interest, shall have been paid in full or until sufficient money
for such payment in full is on deposit in the Bond Fund and such
Bond has been called for payment.
Upon surrender thereof to the Bond Registrar, Bonds may be
exchanged for Bonds in any authorized denomination of an equal
aggregate principal amount and of the same interest rate and
maturity. Bonds may be transferred only if endorsed in the
manner provided thereon and surrendered to the Bond Registrar.
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Such exchange or transfer shall be without cost to the owner or
transferee. The Bond Registrar shall not be obligated to
transfer or exchange any Bond during the fifteen days preceding
any principal or redemption date.
The Bonds shall be issued only in registered form as to
both principal and interest on the books and records maintained
by the Bond Registrar (the "Bond Register The Bond Register
shall contain the name and mailing address of the owner of each
Bond and the principal amounts and numbers of Bonds held by each
owner.
Both principal of and interest on the Bonds shall be
payable in lawful money of the United States of America.
Interest on the Bonds shall be paid by check or draft mailed to
the registered owners at the addresses appearing on the Bond
Register on the 15th day of the month preceding the interest
payment date. Principal of the Bonds shall be payable upon
presentation and surrender of the Bonds by the registered owners
at either of the principal offices of the Bond Registrar at the
option of such owners.
Section 5. Bonds maturing in the years 1987 through 1996,
inclusive, shall be issued without the right or option of the
City to redeem the same prior to their stated maturity dates.
The City reserves the right and option to redeem Bonds maturing
in the years 1997 through 2006, inclusive, as a whole, or in
part in inverse order of maturity (and by lot within a maturity
in such manner as the Bond Registrar shall determine), on
December 1, 1996, and on any interest payment date thereafter,
at par plus accrued interest to the date fixed for redemption.
Portions of the principal amount of any Bond, in install-
ments of $5,000 or any integral multiple of $5,000, may be
redeemed. If less than all of the principal amount of any Bond
is redeemed, upon surrender of such Bond at the principal office
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of the Bond Registrar, there shall be issued to the registered
owner, without charge therefor, a new Bond (or Bonds at the
option of the registered owner) of like maturity and interest
rate in the aggregate principal amount remaining unredeemed.
Notice of any such intended redemption shall be given not
less than 30 nor more than 60 days prior to the date fixed for
redemption by first class mail, postage prepaid, to the regis-
tered owner of any Bond to be redeemed at the address appearing
on the Bond Register. The requirements of this section shall be
deemed to be complied with when notice is mailed as herein
provided, whether or not it is actually received by the owner of
any Bond. The interest on the Bonds so called for redemption
shall cease on the date fixed for redemption unless such Bonds
so called are not redeemed upon presentation made pursuant to
such call. In addition, such redemption notice shall be mailed
within the same period, postage prepaid, to Standard Poor's
Corporation at its offices in New York, New York, or its succes-
sors, and to Shearson Lehman Brothers Inc., Foster Marshall
Division, at its office in Seattle, Washington, or its succes-
sors, but such mailing shall not be a condition precedent to the
redemption of such Bonds.
The City further reserves the right and option to purchase
any or all of the Bonds in the open market at any time at a
price not in excess of par plus accrued interest to the date of
such purchase.
Section 6. The Bond Fund heretofore has been created by
Ordinance No. 334 and has been divided into the Principal and
Interest Account and the Reserve Account. So long as any Bonds
are outstanding against the Bond Fund, the City Treasurer shall
set aside and pay into the Bond Fund out of the gross revenues
of the waterworks utility of the City, in addition to the
amounts required to be paid and retained therein by Ordinance
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No. 334 for the 1961 Bonds, Ordinance No. 387 for the 1963
Bonds, Ordinance No. 422 for the 1965 Bonds and Ordinance No.
748 for the 1972 Bonds, certain fixed amounts without regard to
any fixed proportion, on or before the 20th day of each month,
as follows:
(a) Into the Principal and Interest Account,
the accrued interest received from the sale of the
Bonds and, commencing with the month of December,
1986, an amount equal to at least 1 /12th of the
principal and interest to become due and payable on
the Bonds on December 1, 1987, and thereafter and
continuing as long as any of the Bonds are out-
standing, 1 /6th of the next ensuing requirements
for interest and 1 /12th of the principal to become
due and payable on the next principal payment date
on all of the Bonds then outstanding; and
(b) Into the Reserve Account, monthly,
beginning with the month of December, 1986, approx-
imately equal deposits until a total additional
reserve shall be accumulated therein equal to the
average annual debt service of the Bonds, which
total additional reserve shall be accumulated by no
later than December 1, 1991.
The Reserve Account may be accumulated from any other money
which the City may have available for such purpose, in addition
to using such revenue therefor.
The City further agrees that when the required amounts have
been paid into the Reserve Account, it will, at all times,
except for withdrawals therefrom as authorized herein, maintain
those amounts therein until there is a sufficient amount in the
Bond Fund, including the Reserve Account therein, to pay the
principal of and interest on all outstanding bonds payable out
of the Bond Fund to the final maturity thereof, at which time no
further payments need be made into the Bond Fund.
In the event that there shall be a deficiency in the
Principal and Interest Account in the Bond Fund to meet maturing
installments of either principal or interest, as the case may
be, such deficiency shall be made up from the Reserve Account by
the withdrawal of cash therefrom for that purpose. Any defi-
ciency created in the Reserve Account by reason of any such
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withdrawal shall then be made up from the gross revenues of the
waterworks utility of the City first available after making
necessary provision for the required payments into the Principal
and Interest Account. The money in the Reserve Account other-
wise shall be held intact and may be applied against the last
outstanding bonds payable out of the Bond Fund.
All money in the Reserve Account may be kept on deposit in
the official bank depository of the City or may be invested and
reinvested in Permitted Investments at a fixed price and matur-
ing no later than one month prior to the final maturity date of
the last outstanding bonds payable out of the Bond Fund. In no
event shall any money in the Bond Fund or any other money
reasonably expected to be used to pay principal of and /or
interest on the Bonds be invested in other than Permitted
Investments or at a yield which would cause the Bonds to be
arbitrage bonds within the meaning of Section 148 of the United
States Internal Revenue Code of 1986, as amended or replaced and
redesignated, and applicable regulations thereunder. If the
required reserve is deposited in the Reserve Account, interest
earned on any such investment or on such bank deposit in the
Reserve Account attributable to the Bonds or Future Parity Bonds
shall be deposited into the Principal and Interest Account and
used to pay the next interest or principal coming due on bonds
payable from the Bond Fund.
For the purpose of this section, Permitted Investments
shall mean legal investments permitted the City which are (1)
direct obligations of the United States of America (in the form
of obligations issued or held in book -entry form on the books of
the Department of the Treasury or obligations the principal of
an interest on which are unconditionally guaranteed by the
United States of America; (2) unless otherwise specified, bonds,
debentures, notes or other evidence of indebtedness issued or
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guaranteed by any of the following federal agencies (full faith
and credit agencies): U. S. Export- Import Bank (direct obliga-
tions or fully guaranteed certificates of beneficial ownership),
Farmers Home Administration (certificates of beneficial owner-
ship), Federal Financing Bank, Federal Housing Administration
(debentures), General Services Administration (participation
certificates), Government National Mortgage Association (GNMA-
guaranteed- mortgage- backed bonds and GNMA- guaranteed -pass-
through obligations), U. S. Maritime Administration (guaranteed
Title XI financing), New Communities Debentures (U. S. Govern-
ment guaranteed debentures), and U. S. Public Housing Notes and
Bonds (U. S. government guaranteed public housing notes and
bonds); (3) unless otherwise specified, bonds, debentures, notes
or other evidence of indebtedness issued or guaranteed by any of
the following U. S. government agencies (non -full faith and
credit agencies): Federal Home Loan Bank System (senior debt
obligations), Federal Home Loan Mortgage Association (participa-
tion certificates), Federal National Mortgage Association
(mortgage backed securities and senior debt obligations), and
Student Loan Marketing Association (senior debt obligations);
and (4) certificates of deposit, savings accounts or deposit
accounts which are fully secured by the FDIC or FSLIC.
The City Council declares that in fixing the amounts to be
paid into the Bond Fund it has considered and had due regard for
operating and maintenance expenses of the waterworks utility of
the City and has not set aside into the Bond Fund a greater
amount or proportion of the gross revenues of the waterworks
utility of the City than in its judgment will be available over
and above such operating and maintenance expenses and the debt
service and reserve requirements for the presently outstanding
Outstanding Parity Bonds.
16
Section 7. The gross revenues of the waterworks utility of
the City are pledged to the payments required by this ordinance,
and the Bonds constitute a charge and lien upon such revenues
prior and superior to all other charges and liens whatsoever,
excluding charges for operation and maintenance, except that the
charge and lien upon those gross revenues for the Bonds shall be
on a parity with the charge and lien thereon for the Outstanding
Parity Bonds and any Future Parity Bonds.
Section 8. The City covenants with the owner of each of
the Bonds as follows:
(a) It will establish, maintain and collect
such rates and charges for water and for sanitary
sewage disposal service so long as Outstanding
Parity Bonds, Bonds or Future Parity Bonds are
outstanding, as will make available, together with
interest accruing from investment of money in the
Reserve Account and any water and sanitary sewage
disposal service surcharge payable under any
agreement between the City and any third party, for
the payment of the principal of and interest on
such bonds as the same shall become due an amount
equal to at least 1.35 times the average annual
debt service, both principal and interest, of such
bonds, after deducting the costs of operation and
maintenance of the waterworks utility of the City,
but before depreciation.
(b) It will at all times maintain and keep
the waterworks utility of the City in good repair,
working order and condition, and will at all times
operate such waterworks utility and the business in
connection therewith in an efficient manner and at
a reasonable cost.
(c) It will not sell, lease, mortgage or in
any manner encumber or dispose of all the property
of the waterworks utility of the City unless
provision is made for payment into the Bond Fund of
a sum sufficient to pay the principal of and
interest on all bonds payable out of the Bond Fund
at any time outstanding, and it will not sell,
lease, mortgage or in any manner encumber or
dispose of any part of the property of the Water-
works Utility of the City that is used, useful and
material to the operation thereof, unless provision
is made for replacement thereof, or for payment
into the Bond Fund of the total amount of gross
revenues received which shall not be less than an
amount which shall bear the same ratio to the
amount of outstanding bonds payable out of the Bond
Fund as the gross revenues of the waterworks
utility of the City available for debt service for
such outstanding bonds for the twelve months
17
preceding such sale, lease, encumbrance or disposal
from the portion of the waterworks utility sold,
leased, encumbered or disposed of bears to the
revenues available for debt service for such bonds
from the entire waterworks utility for the same
period. Any such money so paid into the Bond Fund
shall be used to retire such outstanding bonds at
the earliest possible date.
(d) While any of the Bonds remain outstand-
ing, it will keep proper and separate accounts and
records in which complete and separate entries
shall be made of all transactions relating to its
waterworks utility, and it will furnish the origi-
nal purchaser of the Bonds or any subsequent owner
or owners of the Bonds, at the written request of
such owner or owners, complete operating and income
statements of such waterworks utility in reasonable
detail covering any calendar year not more than 90
days after the close of such calendar year, and it
will grant any owner or owners of at least 25% of
the outstanding Bonds the right at all reasonable
times to inspect the entire waterworks utility and
all records, accounts and data of the City relating
thereto. Upon request of any owner of any of such
Bonds, it also will furnish to such 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.
(e) It will not furnish water or sanitary
sewage disposal service to any customer whatsoever
free of charge and will promptly take legal action
to enforce collection of all delinquent accounts.
(f) It will carry the types of insurance on
the properties of the waterworks utility of the
City in the amounts normally carried by private
water and sewer companies engaged in the operation
of waterworks utilities, and the cost of such
insurance shall be considered a part of operating
and maintaining such utility. If, as and when the
United States of America or some agency thereof
shall provide for War Risk Insurance, the City
further agrees to take out and maintain such
insurance on all or such portions of such utility
on which such War Risk Insurance may be written in
an amount or amounts to cover adequately the value
thereof.
(g) It will pay all costs of operation and
maintenance of the waterworks utility of the City
and the debt service requirements for the Outstand-
ing Parity Bonds and otherwise meet the obligations
of the City as herein set forth.
(h) It will neither make nor permit any use
of proceeds of the Bonds or other funds of the City
at any time during the term of the Bonds which will
cause the Bonds to be arbitrage bonds within the
meaning of Section 103(c) of the United States
Internal Revenue Code of 1954, as amended or
replaced and redesignated, and applicable regula-
tions promulgated thereunder.
18
The City has not been notified of any listing or proposed
listing by the Internal Revenue Service to the effect that it is
a bond issuer whose arbitrage certifications may not be relied
upon.
Section 9. The City reserves the right to issue Future
Parity Bonds which will constitute a lien and charge upon the
gross revenues of the waterworks utility of the City on a parity
with the Outstanding Parity Bonds and the Bonds if the condi-
tions set forth in Section 7 of Ordinance No. 334 are met and
complied with at the time of the issuance of such Future Parity
Bonds, which section is by this reference incorporated herein
and made a part hereof, except that for the Bonds and any Future
Parity Bonds, subsection (c) of such Section 7 shall read as
follows:
(c) The ordinance authorizing the issuance of
such additional bonds shall provide that such
additional bonds shall provide that an amount equal
to the average annual debt service of the addi-
tional bonds proposed to be issued shall be accumu-
lated as a reserve in the Bond Fund, said amounts
to be accumulated by monthly deposits commencing
not later than one month after the date of issuance
of the additional bonds and to be accumulated
within five years after the date of issuance of
such bonds, and said reserve to be maintained in
such amounts so long as any of those additional
bonds are outstanding to the last maturity
thereof. In the case of parity refunding bonds the
ordinance authorizing the issuance of such refund-
ing bonds shall provide that the money in the
Reserve Account for the bonds to be refunded shall
be transferred to the 'Reserve Account' in the Bond
Fund, or that the moneys in the 'Reserve Account'
for the bonds to be refunded shall be used to
redeem such bonds, in which event an amount equal
to the average annual debt service for the refund-
ing bonds proposed to be issued shall be accumu-
lated as a reserve in the same manner and within
the same times as set forth herein for additional
revenue bonds.
and there shall be added a new subsection (d) as follows:
(d) The ordinance authorizing the issuance of such
Future Parity Bonds shall provide for the creation of a
sinking fund account in the Bond Fund for any Term Bonds
to be issued and for regular payments to be made into
such account for the payment of principal of such Term
19
Bonds on or before their maturity, or, as an alterna-
tive, for the mandatory redemption of such Term Bonds
prior to their maturity date from money on deposit in
the Principal and Interest Account.
After the payment and redemption of the Outstanding Parity
Bonds the engineer, in determining the sufficiency of the
revenues under Section 7, subparagraph (b) of Ordinance No. 334,
shall use the historical gross revenues of the waterworks
utility for any 12 consecutive months out of the 15 months
immediately preceding the month of delivery of any Future Parity
Bonds. Such revenues may be adjusted to reflect any changes in
rates in effect and being charged or expressly committed by
ordinance of the City Council to be made in the future, income
derived from customers of the waterworks utility connected
within the past 12 months adjusted to reflect one year's net
revenue from such customers, revenues from any customers to be
connected to the waterworks utility who have paid the required
connection charges, revenue to be derived from any customer
under any executed contract for water and /or sewer service which
revenue was not included in the historical gross revenues of the
waterworks utility, and may include the engineer's estimate of
the gross revenues of the waterworks utility to be derived by
the City from customers within improved property available to
commit to any additions and improvements and extensions of the
waterworks utility to be paid for out of the proceeds of the
sale of such additional Future Parity Bonds or other additions
to and improvements and extensions of the waterworks utility
then under construction and not fully connected to the system
when such additions, improvements and extensions are completed.
In addition, actual or reasonably anticipated changes in the
operating and maintenance expenses of the waterworks utility of
the City subsequent to such 12 -month period shall be added or
deducted, as is applicable.
20
Section 10. The Bonds shall be printed or lithographed on
good bond paper in a form consistent with the provisions of this
ordinance and State law, shall be signed by the Mayor and City
Clerk, both of whose signatures shall be in facsimile, and a
facsimile reproduction of the seal of the City shall be printed
thereon.
Only such Bonds as shall bear thereon a Certificate of
Authentication in the following form, manually executed by the
Bond Registrar, shall be valid or obligatory for any purpose or
entitled to the benefits of this ordinance:
CERTIFICATE OF AUTHENTICATION
This bond is one of the fully registered City
of Tukwila, Washington, Water and Sewer Revenue
Bonds, 1986, described in the Bond Ordinance.
WASHINGTON STATE FISCAL AGENCY
Bond Registrar
By
Authorized Officer
Such Certificate of Authentication shall be conclusive evidence
that the Bonds so authenticated have been duly executed, authen-
ticated and delivered hereunder and are entitled to the benefits
of this ordinance.
In case either or both of the officers whose facsimile
signatures appear on the Bonds shall cease to be such 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 nevertheless may be authenticated,
delivered and issued and, upon such authentication, delivery and
issue, shall be as binding upon the City as though those whose
facsimile signatures appear on the Bonds had continued to be
such officers of the City. Any Bond also may be signed on
behalf of the City by such persons as at the actual date of
execution of such Bond shall be proper officers of the City
21
authorized to execute bonds although on the original date of
such Bond such persons were not such officers of the City.
Section 11. The Bond Registrar shall keep, or cause to be
kept, at its principal corporate trust office, sufficient books
for the registration and transfer of the Bonds which shall at
all times be open to inspection by the City. The Bond Registrar
is authorized, on behalf of the City, to authenticate and
deliver Bonds transferred or exchanged in accordance with the
provisions of such Bonds and this ordinance, to serve as the
City's paying agent for the Bonds and to carry out all of the
Bond Registrar's powers and duties under this ordinance and City
Ordinance No. 1338 establishing a system of registration for the
City's bonds and obligations.
The Bond Registrar shall be responsible for its representa-
tions contained in the Bond Registrar's Certificate of Authenti-
cation on the Bonds. The Bond Registrar may become the owner of
Bonds with the same rights it would have if it were not the Bond
Registrar and, to the extent permitted by law, may act as
depository for and permit any of its officers or directors to
act as members of, or in any other capacity with respect to, any
committee formed to protect the rights of Bond owners.
Section 12. The Bonds shall be negotiable instruments to
the extent provided by RCW 62A.8 -102 and 62A.8 -105.
Section 13. The City covenants that it will neither make
nor permit any use of proceeds of the Bonds or other funds of
the City at any time during the term of the Bonds which will
cause the Bonds to be arbitrage bonds within the meaning of
Section 148 of the United States Internal Revenue Code of 1986
and applicable regulations promulgated thereunder. Further, the
City covenants that, if all proceeds of the Bonds have not been
spent within six months from the date of issuance of the Bonds,
it will calculate, or cause to be calculated, and rebate to the
22
United States all earnings from the investment of Bond proceeds
that are in excess of the amount that would have been earned had
the yield on such investments been equal to the yield on the
Bonds, plus all income derived from such excess earnings, to the
extent and in the manner required by Section 148 of such Code
and such applicable regulations. In the event the City shall
fail to meet the rebate requirements applicable to the Bonds
under Section 148 of such Code, the City covenants that, to the
extent permitted by that Section, it shall pay the penalty
provided in Subsection 148(f)(7)(C) if required to prevent a
loss of the tax exemption for interest on the Bond.
Section 14. The City finds and declares that it is a duly
organized and existing governmental unit of the State of
Washington and has general taxing power; that no Bond which is
part of this issue of Bonds is a "private activity bond" within
the meaning of Section 141 of the Internal Revenue Code of 1986;
that at least 95 percent of the net proceeds of the Bonds will
be used for local governmental activities of the City (or of a
governmental unit the jurisdiction of which is entirely within
the jurisdiction of the City); and that the aggregate face
amount of all tax exempt obligations (other than private activ-
ity bonds) issued by the City and all entities subordinate to
the City (including any entity which the City controls or which
derives its authority to issue tax exempt obligations from the
City) during the current calendar year is not reasonably
expected to exceed $5,000,000. The City therefore certifies
that it is an issuer which qualifies for the small governmental
issuer arbitrage rebate exemption under Section 148(f)(4)(C) of
the Internal Revenue Code of 1986.
Section 15. The City has determined and certifies that (a)
the Bonds are not "private activity bonds" within the meaning of
Section 141 of the Internal Revenue Code of 1986; (b) the
23
reasonably anticipated amount of tax exempt obligations (other
than private activity bonds) which the City and any entity
subordinate to the City (including any entity which the City
controls or which derives its authority to issue tax exempt
obligations from the City) will issue during the calendar year
in which the Bonds are issued will not exceed $10,000,000; and
(c) the amount of tax exempt obligations, including the Bonds,
designated as "qualified tax exempt obligations" for the pur-
poses of Section 265(b)(3) of the Internal Revenue Code of 1986
by the City during the calendar year in which the Bonds are
issued does not exceed $10,000,000. The City designates the
Bonds as "qualified tax exempt obligations" for the purposes of
Section 265(b)(3) of the Internal Revenue Code of 1986.
Section 16. In the event the City shall issue advance
refunding bonds pursuant to the laws of the State of Washington,
or have money available from any other lawful source, to pay the
principal of and interest on the Bonds or such portion thereof
included in the refunding or defeasance plan as the same become
due and payable and to refund or defease all such then outstand-
ing Bonds and to pay the costs of refunding and defeasance, and
shall have set aside irrevocably in a special fund for and
pledged to such payment, refunding or defeasance (hereinafter
called the "trust account money and /or Government Obligations
sufficient in amount, together with known earned income from the
investment thereof, to make such payments and to accomplish the
refunding or defeasance as scheduled, and shall make irrevocable
provision for redemption of such Bonds, then in that case all
right and interest of the owners of the Bonds to be so retired,
refunded or defeased (hereinafter collectively called the
"defeased Bonds in the covenants of this ordinance, in the
gross revenues of the waterworks utility of the City and funds
and accounts, obligated to the payment of such Bonds, other than
24
the right to receive the funds so set aside and pledged, there-
after shall cease and become void, except such owners shall have
the right to receive payment of the principal of and interest on
the defeased Bonds from the trust account and, in the event the
funds in the trust account are not available for such payment,
shall have the residual right to receive payment of the princi-
pal of and interest on the defeased Bonds from the gross reve-
nues of the waterworks utility of the City without any priority
of lien or charge against those revenues or covenants with
respect thereto except to be paid therefrom.
After the establishing and full funding of such trust
account, the City may then apply any money in any other fund or
account established for the payment or redemption of the
defeased Bonds to any lawful purposes as it shall determine,
subject only to the rights of the owners or holders of any other
bonds then outstanding.
In the event that the refunding or defeasance plan provides
that the Bonds being refunded or defeased or the refunding bonds
to be issued be secured by cash and /or Government Obligations or
other legal investments pending the prior redemption of those
Bonds being refunded and if such refunding or defeasance plan
also provides that certain cash and /or Government Obligations or
other legal investments are pledged irrevocably for the prior
redemption of those Bonds included in the refunding or defea-
sance plan, then only the debt service on the Bonds which are
not defeased Bonds and the refunding bonds, the payment of which
is not so secured by the refunding or defeasance plan, shall be
included in the computation of coverage for issuance of Future
Parity Bonds and the annual computation of coverage for deter-
mining compliance with the rate covenants.
Section 17. As long as the Municipal Bond Guaranty
Insurance (the "Policy issued by the Municipal Bond Insurance
25
Association "MBIA shall be in full force and effect, the City
agrees to comply with the following provisions:
(a) If five days prior to an interest payment date the
City determines that there will be insufficient funds in the
Bond Fund to pay the principal of or interest on the Bonds on
such interest payment date, the City shall so notify MBIA. Such
notice shall specify the amount of the anticipated deficiency,
the Bonds to which such deficiency is applicable and whether
such Bonds will be deficient as to principal or interest, or
both.
(b) The City, after giving notice as provided in (a) of
this Section, shall make avaiable to MBIA and to Citibank, N.A.,
of New York, New York, fiscal agent' for MBIA, a copy of the Bond
Register and a copy of all records relating to the Bond Fund
maintained under this ordinance.
(c) The City shall provide, or cause the Bond Registrar to
provide, MBIA with a list of registered owners of Bonds entitled
to receive principal or interest payments under the terms of the
Policy, and shall make arrangements with Citibank, N.A., of
New York, New York, MBIA's fiscal agent, (i) to mail checks or
drafts to the registered owners of Bonds entitled to receive
full or partial interest payments from MBIA, and (ii) to pay
principal on Bonds surrendered by the registered owners of Bonds
entitled to receive full or partial principal payments from
MBIA, all in accordance with the terms of the Policy.
(d) The City, at the time it provides notice pursuant to
(a) of this section, shall notify, or cause the Bond Registrar
to notify, registered owners of Bonds entitled to receive the
payment of principal or interest thereon from MBIA (i) as to the
fact of such entitlement, (ii) that MBIA will remit to them all
or a part of the interest payments next coming due, (iii) that
shuld they be entitled to receive full payment of principal from
26
MBIA, they must tender their Bonds (along with a form of trans-
fer of title thereto) for payment to Citibank, N.A., of
New York, New York, as fiscal agent for MBIA, and not the Bond
Registrar, and (iv) that should they be entitled to receive
partial payment of principal from MBIA, they must tender their
Bonds for payment thereon first to the Bond Registrar, who shall
note on such Bonds the portion of the principal paid by the Bond
Registrar, and then, along with a form of transfer of title
thereto, to Citibank, N.A. of New York, New York, as fiscal
agent for MBIA, which will then pay the unpaid portion of the
principal.
(e) MBIA, to the extent it makes payment of principal of
or interest on Bonds, shall become subrogated to the rights of
the recipients of such payments in accordance with the terms of
the Policy, and to evidence such subrogation (i) in the case of
subrogation as to claims for past due interest, the Bond Regis-
trar shall note MBIA's rights as subrogee on the Bond Register
upon receipt of proof of the payment of interest thereon to the
registered owners of the Bonds, and (ii) in the case of subroga-
tion as to claims for past due principal, the Bond Registrar
shall note MBIA's rights as subrogee on the Bond Register upon
surrender of the Bonds by the registered owners thereof together
with proof of the payment of principal thereof.
(f) All the provisions of this Section 17 are to be
construed in accordance with the terms of the Policy. In the
event of any inconsistencies between this section and the
provisions of the Policy, the provisions of the Policy shall
control.
Section 18. Shearson Lehman Brothers Inc., Foster
Marshall Division, of Seattle, Washington, has presented a
purchase contract (the "Purchase Contract to the City offer-
ing to purchase the Bonds under the terms and conditions
27
provided in the Purchase Contract, which written Purchase
Contract is on file with the City Clerk and is incorporated
herein by this reference. The City Council, finding that
entering into the Purchase Contract is in the City's best
interest, accepts such offer and authorizes the execution of the
Purchase Contract by City officials.
The Bonds will be printed at City expense and will be
delivered to the purchasers in accordance with the Purchase
Contract, with the approving legal opinion of Roberts
Shefelman, municipal bond counsel of Seattle, Washington,
relative to the issuance of the Bonds, printed on each Bond.
Bond counsel shall not be required to review or express any
opinion concerning the completeness or accuracy of any official
statement, offering circular or other sales material issued or
used in connection with the Bonds and bond counsel's opinion
shall so state.
The proper City officials are authorized and directed to do
everything necessary for the prompt delivery of the Bonds to the
purchaser, including without limitation the obtaining of bond
insurance if required by the Purchase Contract, and for the
proper application and use of the proceeds of the sale thereof.
Section 19. The accrued interest received from the pur-
chaser of the Bonds shall be deposited in the Principal and
Interest Account of the Bond Fund. An amount of the principal
proceeds of the Bonds sufficient to pay and redeem the Outstand-
ing Note shall be deposited in the Water and Sewer Revenue Bond
Anticipation Note Fund, 1984, and the balance shall be deposited
in the Water /Sewer Construction Fund No. 403 and used for the
additional purpose of the Bonds and to pay the costs of issuance
and sale of the Bonds. Pending such expenditure, the money in
such construction fund may be invested in any legal investment
28
and the investment income may be retained in such fund and used
for the purposes of such fund.
Section 20. Pending the printing, execution and delivery
to the purchaser of the definitive Bonds, the City may cause to
be executed and delivered to such purchaser a single temporary
Bond in the principal amount of $3,600,000. Such temporary Bond
shall bear the same date of issuance, interest rates, principal
payment dates and terms and covenants of the definitive Bonds,
and shall be issued as a fully registered bond in the name of
such purchaser, and shall be in such form as acceptable to such
purchaser. Such temporary Bond shall be exchanged for the
definitive Bonds as soon as the same are printed, executed and
available for delivery.
Section 21. This ordinance shall be in full force and
effect five days after its passage and legal publication as
provided by law.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, at a regular meeting thereof this 24th day of
November, 1986.
.---o i.
GARY L. VAN DUSEN, Mayor
ATTEST:
a/7/ 40 a(de,v2-0--f-
Maxfne /Anderson, City Clerk
APPROVED AS TO FORM:
Office of the City A tor'ey
Illec YeXl_gte iv
FILED WITH THE AZaLE K: /7- s
PASSED BY THE CITY COUN //-,14-Y4
PUBLISHED: //--30
EFFECTIVE DATE: /.2 6 8g
ORDINANCE NO.: /i/Og
1157t
29
Horton Dennis Associates, Inc.
Consulting Engineers RECEIVED
November 21, 1986 ,NOV 2 4 1986
TUK I
HONORABLE MAYOR AND CITY COUNCIL
City of Tukwila
6200 Southcenter Blvd.
Tukwila, WA 98188
RE: WATER /SEWER REVENUE BONDS, 1986, $3,600,000
Ladies and Gentlemen:
The City of Tukwila desires to issue $3,600,000 par value of its Water /Sewer
Revenue Bonds, 1986, (the Bonds) pari passu with the now outstanding Water
and Sewer Revenue Bonds, 1961, pursuant to Ordinance No. 334; Water and Sewer
Revenue Bonds, 1963, pursuant to Ordinance No. 381, No. 382, and No. 387; Water
and Sewer Bonds, 1965, pursuant to Ordinance 422; and Water and Sewer Refunding
and Construction Revenue Bonds, 1972, pursuant to Ordinance No. 748.
Ordinance No. 334, Section 7, governs the parity requirements and provides
for the issuance of future water and sewer bonds to be on a parity with all
subsequent issues. This certificate has been prepared as required by Section
7 (b) of said Ordinance No. 334.
CERTIFICATION
I, Martin L. Penhallegon, a Professional Engineer licensed in the State of
Washington, do hereby certify that, in my professional opinion: the projected
net revenues of the Water /Sewer System will be sufficient to meet the 1.35
coverage requirement in Section 7 of Ordinance No. 334 for the 1961, 1963,
1965, 1972 and the 1986 water and sewer bond issues. I express no opinion
at this time as to the ability of Water /Sewer revenues to meet the 1.35
requirement for any future parity bonds.
My professional opinion is based on information provided by the City of Tukwila
and Shearson Lehman Brothers, Inc., Foster and Marshall Division, as shown
in Schedule A and B, which are attached hereto and made a part of this
Certificate in addition to other information contained in the 1983 Comprehensive
Water and Sevy ,i a-r prepared under my direction and other analysis made by
me. ,c� P EN84
toq; oc v,ksi <F�a Sincerely,
4 HORTON DENNIS ASSOCIATES, INC.
s :v:,
0. �y ..-0-7-7 �o A FCrsTE¢� Martin L. Penhallegon, '.E.
MLP:ca s E CG\ Associate
320 Second South, Kirkland, Washington 98033 -6687 0 Phone 822 -2525
CITY OF TUKWILA
ANALYSIS OF ADEQUACY OF
PROPOSED RATE INCREASES TO COVER COST OF 1986
$3.6 MILLION WATER AND SEWER BOND ISSUES
To verify the proposed rates are adequate to cover cost of $3,600,000 revenue
bond issue, the following analysis is used. (It is assumed the existing rates
are adequate without the new bond issue, therefore the rate increases are solely
to cover cost of the bonds).
1. Total Cost Of Bonds
Principal $3,600,000
Interest 2,964,006
Total $6,564,006
2. From Figure 19 Of 1983 Comprehensive Water Plan (By HDA)
To create $6.6 million in capital over 20 years. The average rate increase
needed is approximately 500100 cu. ft. plus 35% bond coverage or 680100
cu. ft.
3. Based on "Data for 1986 Water and Sewer Rates" published by the City and
dated November 18, 1986.
The average proposed equivalent water rate increase based on 100 cu. ft.
of water sold is determined as follows.
a. The City proposes a change in the base rate. The net effect of this
change would result in a $35,982 increase in revenue to the City based
on 1985 data. (See attached "Exhibit "A" for back -up)
b. The City proposed a change in the meter consumption rate. The net
effect of this change would result in a $277,255.50 increase in revenue
to the City based on 1985 consumption figures. (See below)
1985 TOTALS
CUSTOMER CLASS CONSUMPTION 1 RATE /CCF EXISTING ANNUAL REVENUE EXISTING
Single Family Dwelling 47,831 ccf $0.80 .50 38,265 23,915.50
Multi- Family Dwelling 87,854 ccf $0.80 .50 70,283 43,927.00
Commercial /Industrial 482,756 ccf $0.99 .50 $477,928 $241,378.00
SUB -TOTAL WATER 618,441 ccf $586,476 $309,220.50
SALES REVENUE
NET INCREASE $277,255.50
1. Source A rate Proposal For The Tukwila Water Department
November 17, 1986
Page 4
c. The City's proposal to change the sewer rate would have the following
impact in revenue.
1985 Totals (City Portion Only)
Equiv. Proposed Exist.
Res. Res. Rate/ Revenue Rate/ Revenue
Units Units CCF Renerated CCF Renerated
Single Family 440 4.00 21,120 $5.20 27,456
Multi- Family 1810 4.00 86,880 $5.20 $112,944
Comm. /Indust. -0- 3290 $9.50 $375,060 $5.20 $205,296
TOTALS $483,060 $345,696
NET INCREASE $137,364
Therefore the net effect of the increases proposed would result in the average
equivalent water rate increase per 100 /cu. ft. for 1985 data as determined
below.
Net Increase in Water Base 35,982.00
Net Water Consumption Increase $277,255.50
Net Sewer Increase $137,364.00
$450,601.50
Equivalent Increase in Water Rate Net Incrase
Total Consumption
450,601.50
618,441.00 100 cu.ft.
72.9¢/100 cu. ft.
72.9>680100 cu. ft. required
Proposed Increase is adequate.
SCHEDULE "A"
City of Tukwila
Actual /Estimated Net Revenues
Water /Sewer Revenue Bonds, 1986
$3,600,000
YEAR ENDING DECEMBER 31
Historical(1) Projected
1983 1984 1985 1986(2) 1987(3)
Operating Revenues
Sewer Utility 605,415 684,247 766,386 852,000 $1,050,000
Water Utility 456,269 503,938 531,703 550,000 950,000
Other Income 277 -0- -0- -0- -0-
TOTAL $1,061,961 $1,188,185 $1,298,089 $1,402,000 $2,000,000
Operating Expenses
Sewer Utility
Operating 482,178 582,438 645,009 804,000 860,000
Maintenance 24,753 29,104 17,662 20,000 22,000
Taxes 4,732 4,753 10,722 11,000 15,000
Water Utility
Operating 337,664 374,840 421,441 412,000 440,000
Maintenance 41,284 61,611 31,292 40,000 48,000
Taxes 15,368 17,693 22,221 23,000 35,000
TOTAL 905,979 $1,070,439 $1,148,347 $1,310,000 $1,420,000
Net Operating Income 155,982 117,746 149,742 92,000 580,000
Other Net Non
Operating Income 74,960 113,428 78,644 85,000 55,000
Total Net Income
Available for
Debt Service 230,942 231,174 228,386 177,000 635,000
(1) Source: Audited records of the City of Tukwila.
(2) Based on nine months actual and three months projected results.
(3) Based upon rate increases of approximately 43 effective December 15, 1986.
SCHEDULE B
CITY OF TUKWILA, WASHINGTON
WATER AND SEWER REVENUE BONDS, 1986
PROJECTED DEBT SERVICE COVERAGE
$3,600,000
ESTIMATED
NET INCOME GRAND PROJECTED
AVAILABLE OUTSTANDING This $3,600,000 Issue TOTAL DEBT
FOR DEBT BONDS ALL DEBT SERVICE
DATE SERVICE DEBT SERVICE PRINCIPAL INTEREST TOTAL SERVICE COVERAGE
12/1/86 177,000 79,124 79,124 $2.24
12/1/87 635,000 78,037 105,000 225,422 330,422 408,459 1.68
12/1/88 635,000 80,904 105,000 221,327 326,327 407,231 1.69
12/1/89 635,000 79,471 110,000 216,602 326,602 406,073 1.69
2/1/90 635,000 71,993 115,000 211,377 326,377 398,370 1.70
/1/91 635,000 65,744 125,000 205,627 330,627 396,371 1.71
12/1/92 635,000 79,481 130,000 199,127 329,127 408,608 1.72
12/1/93 635,000 77,578 135,000 192,107 327,107 404,685 1.73
12/1/94 635,000 79,550 145,000 184,547 329,547 409,097 1.74
12/1/95 635,000 82,203 155,000 176,210 331,210 413,413 1.76
12/1/96 635,000 78,491 160,000 167,065 327,065 405,556 1.79
12/1/97 635,000 75,780 170,000 157,305 327,305 403,085 1.81
12/1/98 635,000 77,025 180,000 146,680 326,680 403,705 1.84
12/1/99 635,000 22,925 195,000 135,160 330,160 353,085 1.88
12/1/00 635,000 24,025 205,000 122,485 327,485 351,510 1.90
12/1/01 635,000 24,035 220,000 108,750 328,750 352,785 1.91
12/1/02 635,000 235,000 93,790 328,790 328,790 1.94
12/1/03 635,000 250,000 77,575 327,575 327,575 1.94
12/1/04 635,000 270,000 60,200 330,200 330,200 1.94
12/1/05 635,000 285,000 41,300 326,300 326,300 1.95
12/1/06 635,000 305,000 21,350 326;350 326,350 1.95
IJTALS $12,877,000 $1,076,366 $3,600,000 $2,964,006 $6,564,006 $7,640,372
(1) Outstanding Debt Service (Principal) as of 12/31/86 Comprised of:
1961 Water /Sewer Revenue Bonds 33,000
1963 Water /Sewer Revenue Bonds 137,000
1965 Water /Sewer Revenue Bonds 85,000
1972 Water /Sewer Revenue Bonds 440,000
1986 Water /Sewer Revenue Bonds 3,600,000
TOTAL
$4,295,000'
(2) From Schedule A. In the event of an increase in operating expenses in excess of growth in revenues,
additional rate increases would be required to realize the net revenues shown.
(3) From Shearson Lehman Brothers, Inc., Foster Marshall Division, updating the "Preliminary Official Statement."
(4) Annual debt service coverage. Bond ordinance identifies coverage on average debt service as test of
revenue sufficiency.
1 It r3 A, r�
A RATE PROPOSAL FOR THE TUKWILA WATER DEPARTMENT
November 13, 1986
Page 2
The minimum base charge for the commercial industrial customer is based on the
size of meter serving that customer. The proposed minimum base charge per
month for each meter size is as follows:
PROPOSED CURRENT
3/4" 8.50 6.80)
1" 13.50 10.80)
1 1/2" 19.00 15.30)
2" 24.50 19.80)
3" 47.00 37.80)
4" 63.00 50.80)
6" 115.00 92.80)
8" 176.00 140.80)
These minimum base charges will produce the following revenue using 1985 system
data.
NO. OF UNITS MIN. CHARGE P►
S L R
CUSTOMER CLASS OR METERS PER MONTH ANNUAL REVENUE
Single Family Dwelling 400 4.00 f3® 19,200 '24,
Multi- Family Dwelling 1568 4.00 4 75,264 8o 9 08:80
Comm. /Indust. 3/4" 99 8.50 4c 10,098 /68.40
1" 156 13.50 8:3° 25,272 l ,-3710
1 1/2" 199 19.00 t 2 49° 45,372 39 5-44
2" 91 24.50 47-3° 26,754 gr "4"
3 27 47.00 '35;3° 15,228 /6 437w
4" 9 63.00 40.3v 6,804 $24. 4d
6" 1 115.00 9v.3 a 1,380 083 (Po
8" 0 176.00 0
SUB -TOTAL MINIMUM BASE CHARGE REVENUE 225,372 /81
0042.030.016
JEH /ko
11/25/86
SUMMARY OF ORDINANCE NO. /4
AN ORDINANCE OF THE CITY OF TUKWILA, WASHINGTON,
RELATING TO THE WATERWORKS UTILITY OF THE CITY,
INCLUDING THE SYSTEM OF SEWERAGE AS A PART THEREOF;
AMENDING ORDINANCE NO. 1337; PROVIDING FOR THE ISSUANCE
OF $3,600,000 PRINCIPAL AMOUNT OF WATER AND SEWER
REVENUE BONDS, 1986, OF THE CITY FOR THE PURPOSE OF
PROVIDING FUNDS TO PAY THE COST OF REDEEMING, BOTH
PRINCIPAL AND INTEREST, THE OUTSTANDING WATER AND SEWER
REVENUE BOND ANTICIPATION NOTES, 1984, OF THE CITY, TO
PAY THE COSTS OF CARRYING OUT A PORTION OF THE SYSTEM OF
PLAN OF ADDITIONS TO AND BETTERMENTS AND EXTENSIONS OF
THE WATERWORKS UTILITY OF THE CITY ADOPTED BY ORDINANCE
NO. 1337, AS HEREIN AMENDED, AND DATE, FORM, MATURITIES,
INTEREST RATES, TERMS AND COVENANTS OF SUCH BONDS; AND
PROVIDING FOR THE SALE AND DELIVERY OF SUCH BONDS TO
SHEARSON LEHMAN BROTHERS, INC., FOSTER MARSHALL
DIVISION OF SEATTLE, WASHINGTON.
On ;9 02 1986, the City Council of the City
of Tukwila passed Ordinance No. /1/08 which provides as
follows:
Section 1. Defines Terms.
Section 2. Amends Section 4 of Ordinance 1337 to declare the
amount of the bonds to be issued to be $3,600,000.
Section 3. Makes findings with respect to the status of
outstanding water and sewer revenue bonds of the City.
Section 4. Provides for the issuance of $3,600,000 in water
and sewer revenue bonds and prescribes the terms of the bonds.
Section 5. Makes provision for the redemption of the bonds.
Section 6. Provides for payment of revenues into a principal
and interest account and a reserve account.
Section 7. Pledges the gross revenues of the waterworks
utility to the payments required by the ordinance.
Section 8. Provides for certain covenants by the City with
the owner of each of the bonds.
Section 9. Reserves to the City the right to issue future
parity bonds and provides for the use of revenues of the water
utility.
Section 10. Sets forth the form of the bonds.
Section 11. Provides for the duties of the bond registrar.
1
Section 12. Provides that the bonds shall be negotiable
instruments.
Section 13. Prohibits arbitrage and sets forth rebate
requirements.
Section 14. Declares the tax status of the bonds and
certifies that the city is an issuer which qualifies for the small
governmental issuer arbitrage rebate exemption.
Section 15. Details the manner in which the City may issue
advance refunding bonds.
Section 16. Accepts the offer of Shearson Lehman Brothers,
Inc., Foster Marshall Division to purchase the bonds and
provides for review by counsel.
Section 17. Provides for deposit of interest and principal
proceeds into various funds.
Section 18. Provides for a temporary bond to be issued
pending printing, execution and delivery to the purchaser of the
bonds.
Section 19. Establishes an effective date.
The full text of this ordinance will be mailed without charge
to anyone who submits a written request to the City Clerk of the
City of Tukwila for a copy of the text.
APPROVED by the City Council at their meeting of
7I ?Ai ,1986.
rAir
CITY CLERK, MAXINE ANDERSON
Publish: Valley Daily News N be6, 1986
Vic. ctec
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