HomeMy WebLinkAboutCOW 2015-11-23 Item 4A - Ordinance - Refund 2006 Water, Sewer, Surface Water BondsCOUNCIL AGENDA SYNOPSIS
nilials
Meeting Date
P" Pared by
Mayor's review
Council review
11/23/15
PMc
❑ I�eeolutioza
Mtg Date
®Ordinance
Mtg Date 1217115
12/07/15
PMC
❑ Other
Mtg Date
SPONSOR ❑ Council ❑ Mayor ❑ 1-IR ❑ DCD ® .Finance [:1 Fire [:117' ❑ P &R ❑ Police ❑ PIF
SPONSOR'S Refunding the 2006 Water and Sewer revenue bonds according to Columbia Bank's
SUMMARY proposal will generate annual savings through 2026, the maturity date of the bonds.
Council is being asked to approve the bond ordinance authorizing this refunding.
RI?VIIsW1ll BY ❑ COW Mtg. ❑ CA &P Cmte ® F &S Cmte ❑ Transportation Cmte
❑ Utilities Cmte ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm.
DATE: 11/17/15 COMMITTEE CHAIR: HOUGARDY
RECOMMENDATIONS:
SPONsoR /AllMIN. Finance Department
COMMA "rVa�, Unanimous Approval; Forward to Committee of the Whole
COST IMPACT / FUND SOURCE
1 XPI.NDITURI,RI:QCIIRI?D AMOUNTBUDGETLD APPROPRIATION REQUIRED
Fund Source:
Comments:
MTG. DATE
RECORD OF COUNCIL ACTION
11/23/15
ITEM INFORMATION
ITEM NO.
4.A.
RE
SPONSOR: PEGGY MCCARTHY
11/23/15
AGI.ND:� IrI,�I'F'rll,r Approve the bond ordinance authorizing refunding of the 2006 Water and Sewer
Revenue bonds.
Cxn,'(3ORY ® Dircus. ion
Mtg Date 11/23/15
❑ Motion
MIS Date
❑ I�eeolutioza
Mtg Date
®Ordinance
Mtg Date 1217115
❑ 13id.Azvard
Mtg Date
❑ .Public llearin�
g Date
Mt
❑ Other
Mtg Date
SPONSOR ❑ Council ❑ Mayor ❑ 1-IR ❑ DCD ® .Finance [:1 Fire [:117' ❑ P &R ❑ Police ❑ PIF
SPONSOR'S Refunding the 2006 Water and Sewer revenue bonds according to Columbia Bank's
SUMMARY proposal will generate annual savings through 2026, the maturity date of the bonds.
Council is being asked to approve the bond ordinance authorizing this refunding.
RI?VIIsW1ll BY ❑ COW Mtg. ❑ CA &P Cmte ® F &S Cmte ❑ Transportation Cmte
❑ Utilities Cmte ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm.
DATE: 11/17/15 COMMITTEE CHAIR: HOUGARDY
RECOMMENDATIONS:
SPONsoR /AllMIN. Finance Department
COMMA "rVa�, Unanimous Approval; Forward to Committee of the Whole
COST IMPACT / FUND SOURCE
1 XPI.NDITURI,RI:QCIIRI?D AMOUNTBUDGETLD APPROPRIATION REQUIRED
Fund Source:
Comments:
MTG. DATE
RECORD OF COUNCIL ACTION
11/23/15
12/07/15
MTG. DATE
ATTACHMENTS
11/23/15
Informational Memorandum dated 11/10/15
Summary of proposals
Ordinance in Draft Form
Minutes from the Finance and Safety Committee meeting of 11/17/15
12/7/15
RE
M.:
TO:
FROM:
DATE:
SUBJECT:
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Finance and Safety Committee
Peggy McCarthy, Finance Director
November 10, 2015
2006 Water and Sewer Revenue Bond Refunding
ISSUE
Approve an ordinance authorizing the refunding of the 2006 Water and Sewer Revenue bonds as
proposed by Columbia Bank.
BACKGROUND
A request for proposal was issued on October 19, 2015 for refunding of the 2006 Water and
Sewer revenue bonds. Six proposals were received by the deadline, November 6, 2015. The
results were tabulated into a summary so the terms could be compared and analyzed. The
refunding is intended to generate annual debt service savings through 2026, the bonds final
maturity.
DISCUSSION
Columbia Bank's proposal was identified as the optimal choice based on this comparison and
analysis. Proposals from both Columbia Bank and Washington Federal had favorable interest
rates and terms. However, the Washington Federal proposal had less favorable terms regarding
the debt service reserve account and optional redemption features. Additionally, the interest rate
would not lock until five days before closing. With closing estimated to occur in late December
and in light of the 33 basis point rate increase over the past four weeks on the 10 -year treasury
note, a harbinger of the 20 -year municipal bond rates, and continued talk by the Federal Reserve
of a potential interest rate increase before the end of the year, this rate lock delay adds interest
rate risk to the proposal.
RECOMMENDATION
Council is being asked to approve the ordinance and to consider this item at the November 23-
2015 Committee of the Whole Council Meeting and at the December 7, 2015 Regular Council
Meeting.
ATTACHMENTS:
Summary of Proposals
Draft bond ordinance.
.•
70
City of Tukwila, Washington
Water and Sewer Revenue Refunding Bond, 2015
Summary of Bank Proposal Responses - Revised
Note: includes application of
$430, 000 reserve account balance.
Includes refunding of non - callable
12/1/16 maturity.
v
prepared by Public Financial Management, Inc.
11/9/2015
Columbia Bank
Washington Federal (2.27 %)
Washington Federal (2.37 %)
Interest Rate
2.34%
2.27%
2.37%
True Interest Cost
2.39%
2.30%
2.41%
Interest Rate Notes
Indicative rate; actual rate fixed 5 days
before close
Interest rate locked, provided Bonds close
by 12/15/15
Fees
Bank counsel not to exceed $3,000
$2,100 bank commitment fee
$1,000 origination fee
$2,500 bank counsel fee
$1,000 origination fee
$2,500 bank counsel fee
Total Interest Cost
$253,980
$245,886
$257,121
Total Debt Service
$2,014,858
$2,005,164
$2,016,399
Average Annual Debt Service
$183,169
$182,288
$183,309
Net Present Value of Refunding
Savings
$129,531
$140,241
$127,242
Net Present Value of Refunding
Savings as % of Refunded Par
6.29%
6.81%
6.18%
Average Annual Refunding
Savings (2016 -2026)
$58,158
$59,040
$58,018
Prepayment
Callable without penalty beginning
12/1/2020.
Callable with make -whole provision
beginning 12/1/2018
Callable with make -whole provision
beginning 12/1/2018
Financial Reporting
- Audited financial statements within 30
days of receipt by State Auditor
- Copy of City's budget within 30 days of
final published budget
Copy of annual audited financials within
270 days of each fiscal year end,
unaudited annual financial statements
within 150 days of each fiscal year, and
other information the Bank may
reasonably request
Copy of annual audited financials within
270 days of each fiscal year end,
unaudited annual financial statements
within 150 days of each fiscal year, and
other information the Bank may
reasonably request
Proposal Expiration
Acceptance by 11/16/2015, proposal
terms terminate after 12/31/2015
Acceptance by 11/20/2015
Acceptance by 11/20/2015
Additional Comments
Proposed bank counsel: Alan Schulkin
Debt service reserve required if coverage
falls <2x or future parity bonds include
reserve requirement.
Proposed bank counsel: Alan Schulkin
Debt service reserve required if coverage
falls <2x or future parity bonds include
reserve requirement.
Proposed bank counsel: Alan Schulkin
Note: includes application of
$430, 000 reserve account balance.
Includes refunding of non - callable
12/1/16 maturity.
v
prepared by Public Financial Management, Inc.
11/9/2015
v City of Tukwila, Washington
N Water and Sewer Revenue Refunding Bond, 2015
Summary of Bank Proposal Responses - Revised
Note: includes application of
$430, 000 reserve account balance.
Includes refunding of non - callable
12/1/16 maturity.
Prepared by Public Financial Management, Inc.
11/9/2015
Zions Bank
Umpqua Bank
Capital One Public Funding
Interest Rate
2.47%
2.59%
2.77%
True Interest Cost
2.47%
2.64%
2.77%
Interest Rate Notes
Serial coupons, 2016 -2026.
Fees
No fees
$4,000 estimated legal fees
$1,000 wire fee
No fees
Total Interest Cost
$268,785
$282,198
$301,790
Total Debt Service
$2,033,291
$2,042,976
$2,057,568
Average Annual Debt Service
$184,845
$185,725
$187,052
Net Present Value of Refunding
Savings
$118,153
$97,502
$79,756
Net Present Value of Refunding
Savings as % of Refunded Par
5.74%
4.73%
3.87%
Average Annual Refunding
Savings (2016 -2026)
$57,279
$55,602
$54,276
Prepayment
Callable anytime without penalty with 30
day notice
Callable in first 9 years with 5-5-5-4-4-4-3 -
2-1% call premium, callable at par after
10 years
Callable without penalty beginning
12/1/2020, with 30 days notice
Financial Reporting
Annual financial statements in a timely
manner
Periodic financial and collateral reporting
Not specified
Proposal Expiration
Terms valid through 12/16/2015
Acceptance by 11/11/2015, closing within
5 -7 weeks thereafter
Acceptance by 11/20/2015, proposal
terms valid through 12/18/2015
Additional Comments
CUSIPs will be required for internal
tracking purposes, paid by Zions Bank
Note: includes application of
$430, 000 reserve account balance.
Includes refunding of non - callable
12/1/16 maturity.
Prepared by Public Financial Management, Inc.
11/9/2015
DRAFT
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, RELATING TO THE WATERWORKS
UTILITY OF THE CITY, INCLUDING THE SYSTEM OF SEWERAGE
AND SURFACE WATER UTILITY AS A PART THEREOF;
PROVIDING FOR THE ISSUANCE, SALE AND DELIVERY OF A
WATER AND SEWER REVENUE REFUNDING BOND IN THE
PRINCIPAL AMOUNT OF NOT TO EXCEED $2,100,000 TO
PROVIDE FUNDS TO ADVANCE REFUND AND DEFEASE
OUTSTANDING WATER AND SEWER REVENUE BONDS OF THE
CITY AND TO PAY THE ADMINISTRATIVE COSTS OF THE
REFUNDING AND THE COSTS OF ISSUANCE AND SALE OF THE
BOND; PROVIDING FOR AND AUTHORIZING THE PURCHASE OF
CERTAIN OBLIGATIONS OUT OF THE PROCEEDS OF THE SALE
OF THE BOND AND FOR THE USE AND APPLICATION OF THE
MONEY DERIVED FROM THOSE INVESTMENTS; AUTHORIZING
THE EXECUTION OF A REFUNDING TRUST AGREEMENT;
PROVIDING FOR THE CALL, PAYMENT AND REDEMPTION OF
THE OUTSTANDING BONDS TO BE REFUNDED; FIXING OR
SETTING PARAMETERS WITH RESPECT TO CERTAIN TERMS
AND COVENANTS OF THE BOND; APPOINTING THE CITY'S
DESIGNATED REPRESENTATIVE TO APPROVE THE FINAL
TERMS OF THE SALE OF THE BOND; PROVIDING FOR THE SALE
AND DELIVERY OF THE BOND TO COLUMBIA STATE BANK;
PROVIDING FOR SEVERABILITY; ESTABLISHING AN EFFECTIVE
DATE; AND PROVIDING FOR OTHER RELATED MATTERS.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. Definitions. As used in this ordinance, the following capitalized terms
shall have the following meanings:
(a) "Acquired Obligations" means the Government Obligations purchased to
accomplish the refunding and defeasance of the Refunded Bonds.
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(b) "Annual Debt Service" means, with respect to any Parity Bonds outstanding
as of the date of calculation, for any fiscal year, all amounts required to be paid in that
fiscal year in respect of principal (whether at maturity or pursuant to mandatory sinking
fund redemption) of and interest on those Parity Bonds, less any Tax Credit Subsidy
Payments scheduled to be received in that fiscal year.
(c) "Average Annual Debt Service" means, with respect to any Parity Bonds
outstanding as of the date of calculation, the sum of the Annual Debt Service on those
Parity Bonds for each fiscal year during which those Parity Bonds are scheduled to
remain outstanding, divided by the number of those fiscal years.
(d) "Bank" means Columbia State Bank.
(e) "Bank Proposal' means the proposal of the Bank dated November 9, 2015, to
purchase the Bond on the terms and conditions set forth therein.
(f) "Bond" means the Water and Sewer Revenue Refunding Bond, 2015, issued
by the City pursuant to and for the purposes provided in this ordinance.
(g) "Bond Counsel' means the firm of Foster Pepper PLLC, its successor, or any
other attorney or firm of attorneys selected by the City with a nationally recognized
standing as bond counsel in the field of municipal finance.
(h) "Bond Fund" means the special fund of the City known as the Water and
Sewer Revenue Bond Fund, 1961, created by Ordinance No. 334 and continued and
renamed the "Water and Sewer Revenue Bond Fund" by this ordinance.
(i) "Bond Register' means the books or records maintained by the Bond
Registrar for the purpose of identifying ownership of the Parity Bonds.
0) "Bond Registrar' means the Fiscal Agent, or any successor bond registrar
selected by the City.
(k) "City" means the City of Tukwila, Washington, a municipal corporation duly
organized and existing under the laws of the State.
(1) "City Council' means the legislative authority of the City, as duly and regularly
constituted from time to time.
(m) "Code" means the United States Internal Revenue Code of 1986, as
amended, and applicable rules and regulations promulgated thereunder.
(n) "Contract Resource Obligation" means an obligation of the City, designated
as a contract resource obligation and entered into pursuant to Section 19 of this
ordinance, to make payments for facilities for water supply or distribution or surface
water or sewage collection, treatment or disposal or other utility service or for other
commodities or services relating to the Waterworks Utility.
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(o) "Coverage Requirement" means, for any fiscal year, that the sum of Net
Revenue in that fiscal year, plus any ULID Assessments due in that fiscal year and not
delinquent, plus any Tax Credit Subsidy Payments due in that fiscal year, is not less
than 1.25 times the Annual Debt Service on all outstanding Parity Bonds in that fiscal
year.
(p) "Designated Representative" means the officer of the City appointed in
Section 4 of this ordinance to serve as the City's designated representative in
accordance with RCW 39.46.040(2).
(q) "Final Terms" means the terms and conditions for the sale of the Bond,
including the amount, date, interest rate, payment dates, final maturity, prepayment
rights, price and other terms or covenants, including minimum savings for refunding.
(r) "Finance Director" means the Finance Director or such other officer of the City
who succeeds to substantially all of the responsibilities of that office.
(s) "Fiscal Agent" means the fiscal agent of the State, as the same may be
designated by the State from time to time.
(t) "Future Parity Bonds" means all revenue obligations of the City issued after
the Issue Date in accordance with Section 17 of this ordinance, the payment of the
principal of and interest on which are secured by a lien on the Net Revenue, ULID
Assessments and Tax Credit Subsidy Payments on a parity with the lien that secures
payment of the principal of and interest on the Bond.
(u) "Government Obligations" has the meaning given in RCW 39.53.010, as now
in effect or as may hereafter be amended.
(v) "Gross Revenue" means all of the income and revenue received by the City
from the maintenance and operation of the Waterworks Utility, including revenues from
the sale, lease or furnishing of commodities, services, properties or facilities; earnings
from the investment of money of the Waterworks Utility, except as otherwise expressly
excluded by this ordinance; and connection and capital improvement charges collected
for the purpose of defraying the cost of capital facilities of the Waterworks Utility; but
excluding principal proceeds of Parity Bonds or any other indebtedness of the City,
earnings from the investment of money in a trust fund created to defease indebtedness
of the City (until commingled with other earnings and revenues included in the Gross
Revenue); income and revenue that may not legally be pledged for revenue bond debt
service; improvement district assessments, including ULID Assessments; federal or
state grants and gifts from any source, in each case that are allocated to capital
projects; payments under bond insurance or other credit enhancement policy or device;
insurance or condemnation proceeds used for the replacement of capital projects or
equipment; Tax Credit Subsidy Payments; and revenue from any Separate Utility
System.
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(w) "Independent Consultant" means either (1) an independent licensed
professional engineer experienced in the design, construction or operation of municipal
utilities of comparable size and character to the Waterworks Utility or, (2) an
independent certified public accountant or other professional consultant experienced in
the development of rates and charges for municipal utilities of comparable size and
character to the Waterworks Utility.
(x) "Issue Date" means the date of initial issuance and delivery of the Bond to the
Bank in exchange for the purchase price of the Bond.
(y) "Net Revenue" means, for any fiscal year, the Gross Revenue for that fiscal
year less Operation and Maintenance Expenses for that fiscal year, plus withdrawals
from the Rate Stabilization Fund allocated to that fiscal year, less deposits into the Rate
Stabilization Fund allocated to that fiscal year. In calculating Net Revenue, the City shall
not take into account any non -cash gains or losses with respect to any real or personal
property, investment or agreement that it may be required to recognize under generally
accepted accounting principles, such as unrealized mark -to- market gains and losses
and pollution remediation or pension liabilities.
(z) "Operation and Maintenance Expenses" means all expenses incurred by the
City in causing the Waterworks Utility to be operated and maintained in good repair,
working order and condition, including payments made pursuant to contract for such
service to any other municipal corporation or private entity for water supply and
distribution, surface water and sewage collection, treatment and disposal or other utility
service or facilities (if the City combines such service or facilities into the Waterworks
Utility), and including charges imposed for the City's administration expenses allocated
to the Waterworks Utility, but excluding depreciation, any taxes (or charges in lieu of
taxes) levied or imposed by the City and capital additions to or capital replacements of
the Waterworks Utility.
(aa) "Parity Bond Authorizing Ordinance" means an ordinance of the City
(including this ordinance) that authorizes the issuance and sale and establishes the
terms of one or more series of Parity Bonds and other matters relating to the same plan
of finance.
(bb) "Parity Bonds" means the Bond and any Future Parity Bonds.
(cc) "Rate Stabilization Fund" means the fund of that name authorized to be
created by this ordinance.
(dd) "Record Date" means the close of business of the Bond Registrar on the 15th
day of the month preceding an interest payment date. With respect to prepayment of the
Bond prior to its maturity, the Record Date means the Bond Registrar's close of
business on the date on which the Bond Registrar sends the notice of prepayment.
(ee) "Redemption Date" means the date fixed for redemption of the then -
outstanding Refunded Bonds, which, unless otherwise specified in the Refunding Trust
Agreement, shall be December 1, 2016.
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(ff) "Refunded Bonds" means the 2006 Bonds maturing on December 1 in the
years 2016 and 2026, in the aggregate principal amount of $2,060,000.
(gg) "Refunding Plan" means (as further described in the Refunding Trust
Agreement):
(1) the deposit with the Refunding Trustee of proceeds of the Bond and other
money of the City;
(2) the purchase by the Refunding Trustee of the Acquired Obligations and
the application of the principal of and interest on the Acquired Obligations and any other
cash balance to the payment and redemption of the Refunded Bonds on the
Redemption Date at a price of par plus accrued interest; and
(3) the payment of the costs of issuing the Bond and the costs of carrying out
the foregoing elements of the Refunding Plan.
(hh) "Refunding Trustee" means the trustee, or any successor trustee, designated
by the Designated Representative to serve as refunding trustee to carry out the
Refunding Plan.
(ii) "Refunding Trust Agreement' means a refunding trust agreement between
the City and the Refunding Trustee, dated as of the Issue Date, providing for the
carrying out of the Refunding Plan.
(jj) "Registered Owner' means, with respect to a Parity Bond, the person in
whose name the Parity Bond is registered on the Bond Register.
(kk) "Separate Utility System" means any water supply or distribution, surface
water or sewage collection, treatment or disposal or other utility service or facilities that
may be created, acquired or constructed by the City as provided in Section 18 of this
ordinance.
(II) "State" means the State of Washington.
(mm) "System of Registration" means the system of registration for the City's bonds
and other obligations set forth in Ordinance No. 1338 of the City.
(nn) "Tax Credit Subsidy Payment" means a payment the City is scheduled to
receive as a tax credit payable by the United States Treasury to the City under
Section 6431 of the Code (or under any similar provision of the Code providing for
"direct -pay" tax credit bonds) in respect of any Parity Bonds.
(oo) "2006 Bond Ordinance" means Ordinance No. 2136 of the City authorizing
the issuance of the 2006 Bonds.
(pp) "2006 Bonds" means the Water and Sewer Revenue Bonds, 2006, of the City,
issued in the aggregate principal amount of $3,180,000.
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(qq) "ULID" means any utility local improvement district now existing or hereafter
created for the acquisition or construction of additions, extensions or betterments of any
portion of the Waterworks Utility, which additions, extensions or betterments are
financed through the issuance of Parity Bonds.
(rr) "ULID Assessments" means the assessments levied in any ULID, including
installment payments of any assessment and the interest and penalties, if any, thereon,
less any prepaid assessments permitted by law to be paid into a construction fund or
account.
Section 2. Findings and Determinations. The City takes note of the following
facts and makes the following findings and determinations:
(a) The City, by Ordinance No. 320, specified and adopted a system or plan for a
system of sewerage and provided that the system of sewerage become a part of the
waterworks utility of the City that includes the systems of water supply and distribution
and sanitary sewage disposal, combined pursuant to RCW 35.67.320, and any
additions thereto and extensions, renewals and betterments thereof thereafter made or
constructed.
(b) The City, by Ordinance No. 2136, combined the surface water utility of the City
with the Waterworks Utility pursuant to RCW 35.67.331.
(c) Pursuant to the 2006 Bond Ordinance, the City issued the 2006 Bonds for the
purpose of carrying out a system or plan of additions to and betterments and extension
of the Waterworks Utility, and reserved the right to (1) redeem the 2006 Bonds maturing
on December 1, 2026, prior to their stated maturity date at any time on or after
December 1, 2016, as a whole or in part (within one or more maturities selected by the
City), at par plus accrued interest to the date fixed for redemption, and (2) defease the
2006 Bonds.
(d) The Refunded Bonds bear interest at rates ranging from 4.00% to 4.50 %.
(e) After due consideration, it appears to the City Council that the Refunded Bonds
may be refunded by carrying out the Refunding Plan so that a substantial savings will
be effected by the difference between the principal and interest cost over the life of the
Bond and the principal and interest cost over the life of the Refunded Bonds but for
such refunding.
(f) The Refunding Plan will provide sufficient funds to discharge and satisfy the
obligations of the City under the 2006 Bond Ordinance.
(g) To carry out the Refunding Plan in the manner that will be most advantageous
to the City, it is necessary and advisable that the Acquired Obligations be purchased out
of a portion of the proceeds of the Bond and other money of the City.
(h) The City Council deems it to be in the best interests of the City to issue and sell
the Bond to pay part of the cost of carrying out the Refunding Plan.
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i
(i) RCW 39.46.040(2) provides that an ordinance authorizing the issuance of
bonds may authorize an officer of the City to serve as the City's designated
representative and to accept, on behalf of the City, an offer to purchase those bonds so
long as the acceptance of such offer is consistent with terms established by an
ordinance that establishes the following terms for those bonds (or parameters with
respect thereto): the amount, date or dates, denominations, interest rate or rates (or
mechanism for determining interest rate or rates), payment dates, final maturity,
redemption rights, price and any other terms and conditions deemed appropriate by the
City Council.
0) In fixing the amounts to be paid into the Bond Fund, the City Council has
exercised due regard for Operation and Maintenance Expenses, and has not obligated
the City to set aside and to pay into the Bond Fund a greater amount or proportion of
the Gross Revenue that in the judgment of the City Council will be available over and
above the Operation and Maintenance Expenses.
Section 3. Authorization of Bond. The City is authorized to issue and sell the
Bond, subject to the terms and conditions described in this ordinance, for the purpose of
carrying out the Refunding Plan.
Section 4. Description of Bond; Appointment of Designated Representative.
The Finance Director is appointed as the Designated Representative of the City and is
authorized and directed to conduct the sale of the Bond to the Bank in the manner and
upon the terms deemed most advantageous to the City, and to approve the Final Terms
of the Bond, with such additional terms and covenants as the Designated
Representative deems advisable, within the parameters set forth in Exhibit A, which is
attached to this ordinance and incorporated by this reference.
Section 5. Bond Registrar; Registration and Transfer of Bond.
(a) Registration of Bond. The Bond shall be issued only in registered form as to
both principal and interest, and the ownership of the Bond shall be recorded on the
Bond Register.
(b) Bond Registrar; Duties. The Fiscal Agent is appointed as initial Bond
Registrar. The Bond Registrar shall keep, or cause to be kept, sufficient books for the
registration and transfer of the Bond, which shall be open to inspection by the City at all
times. The Bond Registrar is authorized, on behalf of the City, to authenticate and
deliver each Bond transferred in accordance with the provisions of the Bond and this
ordinance, to serve as the City's paying agent for the Bond and to carry out all of the
Bond Registrar's powers and duties under this ordinance and the System of
Registration. The Bond Registrar shall be responsible for its representations contained
in the Certificate of Authentication on each Bond. The Bond Registrar may become a
Registered Owner 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 the Registered Owners.
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IN,
(c) Bond Register; Transfer. The Bond Register shall contain the name and
mailing address of each Registered Owner and the principal amount and number of
each Parity Bond held by each Registered Owner. The Bond may be transferred only
(1) in whole, (2) to a "qualified institutional buyer" (as defined in Rule 144A promulgated
under the Securities Act of 1933, as amended) and (3) if endorsed in the manner
provided thereon and surrendered to the Bond Registrar. Any transfer shall be without
cost to the Registered Owner of the Bond or the transferee.
Section 6. Form and Execution of Bond.
(a) Form of Bond; Signatures and Seal. The Bond shall be prepared in a form
consistent with the provisions of this ordinance and State law. The Bond shall be
signed by the Mayor and the City Clerk, either or both of whose signatures may be
manual or in facsimile, and the seal of the City or a facsimile reproduction thereof shall
be impressed or printed thereon. If any officer whose manual or facsimile signature
appears on the Bond ceases to be an officer of the City authorized to sign bonds before
the Bond bearing his or her manual or facsimile signature is authenticated by the Bond
Registrar, or issued or delivered by the City, the Bond nevertheless may be
authenticated, issued and delivered and, when authenticated, issued and delivered,
shall be as binding on the City as though that person had continued to be an officer of
the City authorized to sign bonds. The Bond also may be signed on behalf of the City
by any person who, on the actual date of signing of the Bond, is an officer of the City
authorized to sign bonds, although he or she did not hold the required office on its Issue
Date.
(b) Authentication. Only if the Bond bears a Certificate of Authentication in
substantially the following form, manually signed by the Bond Registrar, shall the Bond
be valid or obligatory for any purpose or entitled to the benefits of this ordinance:
"Certificate of Authentication. This Bond is the fully registered City of Tukwila,
Washington, Water and Sewer Revenue Bond, 2015, described in the Bond Ordinance."
The authorized signing of a Certificate of Authentication shall be conclusive evidence
that the Bond so authenticated has been duly executed, authenticated and delivered
and is entitled to the benefits of this ordinance.
Section 7. Payment of Bond. Principal of and interest on the Bond shall be
payable in lawful money of the United States of America. Principal of and interest on
the Bond shall be payable by electronic transfer on the payment date to the Registered
Owner at the account appearing on the Bond Register on the Record Date. The final
installment of principal of the Bond is payable upon presentation and surrender of the
Bond by the Registered Owner to the Bond Registrar. The Bond is not subject to
acceleration under any circumstances.
Section 8. Bond Fund. The 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 Water and Sewer Revenue Bonds, 1961, of the City and
any bonds issued on a parity therewith, is hereby continued and renamed the "Water
and Sewer Revenue Bond Fund." The Finance Director may create such accounts and
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subaccounts in the Bond Fund, including a principal and interest account and one or
more reserve accounts, as may be convenient for the payment of the Parity Bonds, so
long as the maintenance of such accounts and subaccounts does not conflict with the
rights of the Registered Owners. The City shall set aside and pay into the Bond Fund
all ULID Assessments and Tax Credit Subsidy Payments upon their receipt and, out of
the Net Revenue, certain fixed amounts without regard to any proportion, namely, on or
prior to each date on which principal of or interest on the Parity Bonds is due, the
amount required, after taking into account the amount then on deposit therein and to be
used therefor, to pay such principal and interest on such date. When the amount on
deposit in the Bond Fund equals the principal of and interest on all Parity Bonds then
outstanding, no further payment need be made into the Bond Fund. The amounts so
covenanted to be paid into the Bond Fund shall be a lien and charge on the Net
Revenue, ULID Assessments and Tax Credit Subsidy Payments superior to any other
charges whatsoever.
Section 9. Use of Bond Proceeds; Refunding Plan.
(a) Use of Bond Proceeds; Acquisition of Acquired Obligations. On the Issue
Date, the proceeds of the sale of the Bond shall be deposited with the Refunding
Trustee and used, together with other money of the City, to discharge the obligations of
the City relating to the Refunding Bonds by carrying out the Refunding Plan in
accordance with the Refunding Trust Agreement. Such obligations shall be discharged
fully by the Refunding Trustee's simultaneous purchase of the Acquired Obligations,
bearing such interest and maturing as to principal and interest in such amounts and at
such times so as to provide, together with a beginning cash balance, for the payment of
the amounts required to be paid by the Refunding Plan. The Acquired Obligations shall
be listed and more particularly described in a schedule attached to the Refunding Trust
Agreement. Any proceeds of the Bond or other money deposited with the Refunding
Trustee not needed to carry out the Refunding Plan shall be returned to the City for
deposit in the Bond Fund to pay interest on the Bond on the next interest payment date.
(b) Appointment of Refunding Trustee. The Designated Representative is
authorized and directed to appoint a financial institution to serve as Refunding Trustee
and to perform the duties of Refunding Trustee under this ordinance.
(c) Refunding Trust Agreement; Administration of Refunding Plan. The
Designated Representative is authorized and directed to execute the Refunding Trust
Agreement setting forth the duties, obligations and responsibilities of the Refunding
Trustee in connection with carrying out the Refunding Plan. The Refunding Trust
Agreement shall, among other things, authorize and direct the Refunding Trustee to
purchase the Acquired Obligations and to make the payments required to be made by
the Refunding Plan. All Acquired Obligations and money deposited with the Refunding
Trustee and any income therefrom shall be held irrevocably, invested and applied in
accordance with the provisions of the Refunding Trust Agreement, the 2006 Bond
Ordinance, this ordinance, chapter 39.53 RCW and other applicable State law. All
administrative costs (including all necessary and proper fees, compensation and
expenses of the Refunding Trustee and all other costs incidental to the setting up of the
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trust account to accomplish the Refunding Plan) and costs of issuance of the Bond may
be paid out of the amounts deposited with the Refunding Trustee or other available
money of the City, in accordance with the Refunding Trust Agreement.
(d) CaU for Redemption of the Refunded Bonds. The Refunding Trustee is
authorized and directed to call the then - outstanding Refunded Bonds for redemption on
the Redemption Date at par, plus accrued interest. Such call for redemption shall
identify the then - outstanding Refunded Bonds, the maturity date, the Redemption Date
and the redemption price, and shall be irrevocable after the Bond is delivered to the
Bank. The Designated Representative and the Refunding Trustee are each authorized
and directed to give or cause to be given such notices as required, at the times and in
the manner required, pursuant to the 2006 Bond Ordinance, and to take all other
actions necessary to effect the redemption of the then - outstanding Refunded Bonds on
the Redemption Date.
Section 10. Prepayment of Bond. Principal of the Bond is subject to prepayment
at the option of the City as set forth in Exhibit A. Notice of prepayment of the Bond,
unless waived by the Registered Owner, shall be given by the Bond Registrar not less
than five business days prior to the scheduled prepayment date by first -class mail,
postage prepaid, to the Registered Owner at the address appearing on the Bond
Register on the Record Date. The City retains the right to rescind the prepayment
notice and the prepayment by giving a notice of rescission to the Registered Owner at
any time on or prior to the scheduled prepayment date. Any notice of prepayment that
is so rescinded shall be of no effect, and the principal amount of the Bond for which a
notice of prepayment has been rescinded shall remain outstanding. Interest on
principal of the Bond so prepaid shall cease to accrue on the prepayment date.
Section 11. Failure To Pay Bond. If any principal of the Bond is not paid when
due, the City shall be obligated to pay interest on such principal at the same rate
provided in the Bond from and after the date such principal payment is due until such
principal is paid in full. If the City fails to set aside and pay into the Bond Fund the
amounts required by this ordinance so to be set aside and paid, any Registered Owner
may bring action against the City to compel the setting aside and payment.
Section 12. Pledge of Net Revenue. The Net Revenue, all ULID Assessments,
all Tax Credit Subsidy Payments and all money and investments held in the Bond Fund
(other than money held in any reserve account created to secure the payment of Future
Parity Bonds) are pledged to the payment of the principal of and interest on the Bond.
This pledge shall constitute a lien and charge on the Net Revenue, all ULID
Assessments, all Tax Credit Subsidy Payments and all money and investments held in
the Bond Fund (other than money held in any reserve account created to secure the
payment of Future Parity Bonds) on a parity with the pledge that secures payment of
Future Parity Bonds and superior to any other liens or charges whatsoever. The Bond
is payable solely from Net Revenue and all money and investments held in the Bond
Fund (other than money held in any reserve account created to secure the payment of
Future Parity Bonds). The Bond shall not be a general obligation of the City. This
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ordinance does not pledge, and the Bond is not payable from, the full faith and credit or
taxing power of the City.
Section 13. Flow of Funds. All ULID Assessments and Tax Credit Subsidy
Payments shall be paid into the Bond Fund, and the Gross Revenue shall be. used for
the following purposes only and shall be applied in the following order of priority:
First, To pay when due the Operation and Maintenance Expenses;
Second, To make when due all payments required to be made into the Bond
Fund in respect of principal of and premium, if any, and interest on
Parity Bonds, and to make payments due under any reimbursement
agreement with a credit provider that secures payment of Parity
Bonds and that requires those payments to be made on a parity
with the Parity Bonds;
Third, To make when due all payments required to be made into any
reserve account created to secure the payment of Future Parity
Bonds, and to make payments due under any reimbursement
agreement with a credit provider that secures payment of Parity
Bonds and that requires those payments to be made on a parity
with payments into such reserve account;
Fourth, To make when due all payments required to be made under any
other reimbursement agreement with a credit provider that secures
payment of Parity Bonds, in any priority not inconsistent with this
ordinance that the City may hereafter establish by ordinance;
Fifth, To make when due all payments required to be made into any fund
or account created for the payment of revenue obligations secured
by a charge on the Net Revenue subordinate to the charge that
secures payment of the Parity Bonds and all payments required to
be made into the Bond Fund, in any priority not inconsistent with
this ordinance that the City may hereafter establish by ordinance;
and
Sixth, For any other lawful purposes of the Waterworks Utility, in any
priority not inconsistent with this ordinance that the City may
hereafter establish by ordinance.
Section 14. Rate Stabilization Fund. The City is authorized to create the Rate
Stabilization Fund. The City may at any time, consistent with Sections 12 and 13,
deposit Net Revenue into the Rate Stabilization Fund. The City may at any time
withdraw any or all of the money from the Rate Stabilization Fund for inclusion in Net
Revenue and disbursement consistent with Sections 12 and 13 of this ordinance. If a
deposit or withdrawal is made within 90 days after the end of a fiscal year, the City may
specify that the deposit or withdrawal is to be allocated to the prior fiscal year rather
than to the fiscal year in which that deposit or withdrawal is made. No deposit of Net
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Revenue may be made into the Rate Stabilization Fund to the extent that such deposit
would prevent the City from satisfying the Coverage Requirement in any fiscal year.
Section 15. Covenants. The City covenants and agrees with the Registered
Owners as follows:
(a) Operation and Maintenance. The City will at all times maintain, preserve and
keep the properties of the Waterworks Utility in good repair, working order and
condition, will make all necessary and proper additions, betterments, renewals and
repairs thereto and improvements, replacements and extensions thereof, so that at all
times the business carried on in connection therewith will be properly and
advantageously conducted, and will at all times operate or cause to be operated the
properties of the Waterworks Utility and the business in connection therewith in an
efficient manner and at a reasonable cost.
(b) Establishment and Collection of Rates and Charges. The City will
establish, maintain and collect rates and charges for water supply and distribution and
surface water and sewage collection, treatment and disposal so that:
(1) the Gross Revenue in each fiscal year will be sufficient to pay when due
(A) all Operation and Maintenance Expenses for that fiscal year; (B) all amounts that the
City is obligated to pay into the Bond Fund for that fiscal year; (C) all taxes,
assessments or other governmental charges lawfully imposed on the Waterworks Utility
or the revenue therefrom or payments in lieu thereof for that fiscal year; and (D) any and
all other amounts that the City is obligated to pay from the Gross Revenue by law or
contract in that fiscal year; and
(2) the Coverage Requirement will be satisfied in each fiscal year.
The City will promptly collect all ULID Assessments and Tax Credit Subsidy
Payments and deposit such collections into the Bond Fund, without those ULID
Assessments or Tax Credit Subsidy Payments being allocated to any particular series
of Parity Bonds. Except as may be required under the provisions of any federal or State
statute, regulation or license, the City will not furnish or supply or permit the furnishing
or supplying of any service or facility in connection with the operation of the Waterworks
Utility free of charge to any person, firm or corporation, public or private.
(c) Sale, Transfer or Disposition of the Waterworks Utility. The City may sell,
transfer or otherwise dispose of any of the works, plant, properties, facilities or other
part of the Waterworks Utility or any real or personal property comprising a part of the
Waterworks Utility (each, as used in this subsection, a "transfer ") only upon approval of
the City Council by an ordinance that contains one or more of the following
determinations, to be made at the discretion of the City Council:
(1) the facilities or property being transferred are not material to the operation
and maintenance of the Waterworks Utility, or have become unserviceable, inadequate,
obsolete or unfit to be used in the operation of the Waterworks Utility, or
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(2) the aggregate depreciated value of the facilities or property being
transferred in any fiscal year comprises no more than five percent of the total assets of
the Waterworks Utility, or
(3) the City receives from the transferee an amount equal to the fair market
value of the portion of the Waterworks Utility transferred; as used in this paragraph, "fair
market value" means the most probable price that a property should bring in a
competitive and open market under all conditions requisite to a fair sale, the willing
buyer and willing seller each acting prudently and knowledgeably and assuming that the
price is not affected by coercion or undue stimulus.
In the case of a transfer under paragraph (3): (A) the proceeds of the transfer shall be
used (i) promptly to redeem or irrevocably set aside for the redemption of Parity Bonds
and /or (ii) to provide for part of the cost of additions to and betterments and extensions
of the Waterworks Utility, and (B) before any such transfer, the City must obtain a
certificate of an Independent Consultant to the effect that in his or her professional
opinion, upon that transfer and the use of proceeds of the transfer as proposed by the
City, the remaining Waterworks Utility will retain its operational integrity and the
Coverage Requirement will be satisfied in each of the five fiscal years following the
fiscal year in which the transfer is to occur, taking into account (i) the reduction in Gross
Revenue resulting from the transfer; (ii) the use of any proceeds of the transfer for the
redemption of Parity Bonds; (iii) the Independent Consultant's estimate of Gross
Revenue allocable to customers anticipated to be served by any additions to and
betterments and extensions of the Waterworks Utility financed by the proceeds of the
transfer, and (iv) any other adjustment permitted in the preparation of a certificate under
Section 17 of this ordinance.
(d) Liens on the Net Revenue. Except as otherwise expressly permitted in this
ordinance, the City will not at any time create or permit to accrue or to exist any lien,
charge or other encumbrance on the Net Revenue, ULID Assessments or Tax Credit
Subsidy Payments or any part thereof prior or superior to the lien and charge that
secures payment of the Parity Bonds and all payments required to be made into the
Bond Fund, and will pay and discharge, or cause to be paid and discharged, any and all
lawful claims for labor, materials or supplies which, if unpaid, might become a lien,
charge or other encumbrance on the Net Revenue, ULID Assessments or Tax Credit
Subsidy Payments or any part thereof, prior or superior to, or on a parity with, the lien
and charge that secures payment of the Parity Bonds and all payments required to be
made into the Bond Fund, or that might materially adversely affect the security of the
Registered Owners.
(e) Books and Accounts. The City will keep proper books, records and accounts
with respect to the operations, income and expenditures of the Waterworks Utility in
accordance with generally accepted accounting practices relating to municipal utilities
and any applicable rules and regulations prescribed by the State, and will cause those
books, records and accounts to be audited on an annual basis by the State Auditor
and /or by a certified public accountant selected by the City. The City will prepare
annual financial and operating statements as soon as practicable after the close of each
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fiscal year showing in reasonable detail the financial condition of the Waterworks Utility
as of the close of that fiscal year, and the income and expenses for that fiscal year,
including the amounts paid into the Bond Fund and into any and all funds or accounts
created pursuant to the provisions of this ordinance, the status of all funds and accounts
as of the end of that fiscal year, and the amounts expended for maintenance, renewals,
replacements and capital additions to the Waterworks Utility.
(f) Maintenance of Insurance. The City at all times will carry fire and extended
coverage, public liability and property damage and such other forms of insurance with
responsible insurers and with policies payable to the City on such of the buildings,
equipment, works, plants, facilities and properties of the Waterworks Utility as are
ordinarily carried by municipal or privately owned utilities engaged in the operation of
similar systems, and against such claims for damages as are ordinarily carried by
municipal or privately owned utilities engaged in the operation of similar systems, or it
will self- insure or will participate in an insurance pool or pools with reserves adequate,
in the reasonable judgment of the City, to protect the Waterworks Utility and the
Registered Owners against loss.
(g) Condemnation Awards and Insurance Proceeds. If the City receives any
condemnation awards or proceeds of an insurance policy in connection with any loss of
or damage to any property of the Waterworks Utility, it shall apply the condemnation
award or insurance proceeds (other than proceeds of business interruption insurance,
which shall constitute Gross Revenue), in the City's discretion, as follows: (1) to the
cost of replacing or repairing the lost or damaged properties; (2) to the payment,
purchase for cancellation or redemption of Parity Bonds or (3) to the cost of
improvements to the Waterworks Utility.
Section 16. Tax Covenants; Designation of Bond as "Qualified Tax Exempt
Obligation."
(a) Preservation of Tax Exemption for Interest. The City covenants that it will
take all actions necessary to prevent interest on the Bond from being included in gross
income for federal income tax purposes, and it will neither take any action nor make or
permit any use of proceeds of the Bond or other funds of the City treated as proceeds of
the Bond that will cause interest on the Bond to be included in gross income for federal
income tax purposes.
(b) Post - Issuance Compliance. The Finance Director is authorized and directed
to review and update the City's written procedures to facilitate compliance by the City
with the covenants in this ordinance and the applicable requirements of the Code that
must be satisfied after the Issue Date to prevent interest on the Bond from being
included in gross income for federal tax purposes.
(c) Designation of Bond as "Qualified Tax Exempt Obligation." The City
designates the Bond as a "qualified tax - exempt obligation" for the purposes of
Section 265(b)(3) of the Code, and makes the following findings and determinations:
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(1) the Bond does not constitute a "private activity bond" within the meaning of
Section 141 of the Code;
(2) the reasonably anticipated amount of tax - exempt obligations (other than
private activity bonds and other obligations not required to be included in such
calculation) that the City and any entity subordinate to the City (including any entity that
the City controls, that derives its authority to issue tax - exempt obligations from the City,
or that issues tax - exempt obligations on behalf of the City) will issue during the calendar
year in which the Bond is issued will not exceed $10,000,000; and
(3) the amount of tax - exempt obligations, including the Bond, designated by
the City as "qualified tax - exempt obligations" for the purposes of Section 265(b)(3) of
the Code during the calendar year in which the Bond is issued does not exceed
$10,000,000.
Section 17. Provisions for Future Parity Bonds. The City may issue Future
Parity Bonds only for lawful purposes of the Waterworks Utility and only if the following
conditions are met and complied with at the time of the issuance of those Future Parity
Bonds:
(a) There shall be no deficiency in the Bond Fund;
(b) Except in the case of Future Parity Bonds being issued for the sole purpose of
providing for the costs of refunding Parity Bonds for which no coverage certification
pursuant to subsection (d) of this section is required, no default under this ordinance or
any other Parity Bond Authorizing Ordinance, nor any event or condition which with
notice and /or the passage of time would constitute such a default, shall have occurred
and be continuing, nor shall the issuance of those Future Parity Bonds, in and of itself,
cause a default under this ordinance or any other Parity Bond Ordinance or any event
or condition which with notice and /or the passage of time would constitute such a
default;
(c) The applicable Parity Bond Authorizing Ordinance shall provide for the payment
of the principal of and interest on those Future Parity Bonds out of the Bond Fund and
for the deposit of all ULID Assessments and Tax Credit Subsidy Payments to be paid
into the Bond Fund; and
(d) There shall be on file with the City either:
(1) a certificate of the Finance Director demonstrating that the Coverage
Requirement was satisfied during any fiscal year occurring in the immediately preceding
24 calendar months (assuming that (A) those Future Parity Bonds were outstanding and
that the debt service payable on those Future Parity Bonds in that fiscal year was equal
to the Average Annual Debt Service on those Future Parity Bonds, and (B) any Parity
Bonds to be refunded by those Future Parity Bonds are not outstanding); or
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(2) a certificate of an Independent Consultant that in his or her opinion (which
opinion and underlying assumptions shall be set forth in the certificate), the Coverage
Requirement will be satisfied, assuming that those Future Parity Bonds are outstanding
and any Parity Bonds to be refunded by those Future Parity Bonds are not outstanding,
in (A) each of the fiscal years for the five consecutive fiscal years following the earlier of
(i) the end of the period during which interest on those Future Parity Bonds is fully
capitalized or, if that interest is not fully capitalized for any period, the fiscal year in
which those Future Parity Bonds are issued; or (ii) the date on which substantially all
new facilities or improvements financed in substantial part by those Future Parity Bonds
are expected to commence operations, and (B) the fiscal year in which those Future
Parity Bonds are issued and any subsequent fiscal year prior to but not included in the
fiscal years for which certification is provided pursuant to the foregoing clause (A); that
certificate may take into account the following adjustments:
(A) any changes in rates and charges of the Waterworks Utility in effect
and being charged, or expected to be charged in accordance with a program of specific
levels or increases or decreases in overall revenue approved by ordinance;
(B) rates and charges from customers of the Waterworks Utility who
have become customers during the fiscal year or thereafter, adjusted to reflect one
year's Net Revenue and ULID Assessments allocable to those new customers;
(C) the estimate of Net Revenue and ULID Assessments allocable to
customers reasonably expected to be served by new facilities or improvements financed
in substantial part by those Future Parity Bonds; and
(D) Net Revenue and ULID Assessments allocable to any person, firm,
corporation or municipal corporation under any executed contract for water supply or
distribution, surface water or sewage collection, treatment or disposal or other utility
service or facilities provided by the Waterworks Utility, which revenue was not included
in the historical Net Revenue or ULID Assessments.
No such certification of the Coverage Requirement shall be required if: (i) those
Future Parity Bonds are issued for the sole purpose of refunding Parity Bonds and, as a
result of the issuance of those Future Parity Bonds, (a) the final maturity of those Future
Parity Bonds is not more than one year later than the final maturity of the Parity Bonds
being refunded and (b) the Annual Debt Service on all outstanding Parity Bonds will not
increase more than $5,000 in any fiscal year; or (ii) the principal of those Future Parity
Bonds does not exceed the ULID Assessments levied in connection with the issuance
of those Future Parity Bonds by more than the sum of (a) $5,000 and (b) the proceeds
of those Future Parity Bonds deposited in a reserve account to secure payment of
Parity Bonds.
Nothing contained herein shall prevent the City from issuing (i) Future Parity Bonds
to refund maturing Parity Bonds, money for the payment of which is not otherwise
available, or (ii) revenue obligations secured by a charge on the Net Revenue
subordinate to the charge that secures payment of the Parity Bonds and all payments
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required to be made into the Bond Fund, and then only if the remedy of acceleration is
expressly denied to the owners of those subordinate bonds under all circumstances.
Section 18. Separate Utility Systems. The City may create, acquire, construct,
finance, own and operate one or more additional systems for water supply or
distribution, surface water or sewage collection, treatment or disposal or other utility
service or facilities. The revenue of that Separate Utility System shall not be included in
the Gross Revenue and may be pledged to the payment of revenue obligations issued
to purchase, construct, condemn or otherwise acquire or expand that Separate Utility
System. Neither the Gross Revenue nor the Net Revenue, ULID Assessments or Tax
Credit Subsidy Payments shall be pledged by the City to the payment of any obligations
of a Separate Utility System, except that the Net Revenue may be pledged on a basis
subordinate to the pledge that secures payment of the Parity Bonds and all payments
required to be made into the Bond Fund.
Section 19. Contract Resource Obligations. The City may at any time enter into
one or more Contract Resource Obligations for the acquisition, from facilities to be
acquired or constructed, of facilities for water supply or distribution or surface water or
sewage collection, treatment or disposal or other utility service or other commodities or
services relating to the Waterworks Utility. The City may determine that, and may agree
under a Contract Resource Obligation to provide that, all payments under the Contract
Resource Obligation (including payments prior to the time that the facilities,
commodities or services are provided, or during a suspension of or after termination of
the provision of the facilities, commodities or services) shall be Operation and
Maintenance Expenses if the following requirements are met at the time such a
Contract Resource Obligation is entered into:
(a) No default under this ordinance or any other Parity Bond Authorizing
Ordinance has occurred and is continuing.
(b) There shall be on file a certificate of an Independent Consultant stating
that (1) the payments to be made by the City in connection with the Contract Resource
Obligation are reasonable for the facilities, commodities or services to be provided; (2)
the facilities, commodities or services to be provided are sound from a supply or
transmission planning standpoint, are technically and economically feasible in
accordance with prudent utility practice and are likely to provide supply or transmission
no later than a date to be set forth in the certificate; and (3) the Coverage Requirement
(as estimated by the Independent Consultant in accordance with the provisions of and
adjustments permitted in Section 17 of this ordinance) will be satisfied in each of the five
fiscal years following the fiscal year in which the Contract Resource Obligation is
incurred.
Payments required to be made under a Contract Resource Obligation shall not be
subject to acceleration under any circumstances. Nothing in this Section shall be
deemed to prevent the City from entering into other agreements for the acquisition of
facilities for water supply or distribution or surface water or sewage collection, treatment
or disposal or other utility service or other commodities or services relating to the
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Waterworks Utility and from treating those payments as Operation and Maintenance
Expenses or from securing payments with respect thereto by a charge on Net Revenue
subordinate to the charge that secures payment of the Parity Bonds.
Section 20. Refunding or Defeasance of the Bond. The City may issue
refunding bonds pursuant to State law or use money available from any other lawful
source to carry out a refunding or defeasance plan, which may include (a) paying when
due the principal of and interest on any portion of the Bond (the "defeased portion ");
(b) prepaying the defeased portion prior to maturity; and (c) paying the costs of the
refunding or defeasance. If the City sets aside in a trust fund or escrow account
irrevocably pledged to that prepayment or defeasance (the "trust account "), money
and /or Government Obligations maturing at a time or times and bearing interest in
amounts sufficient to redeem, refund or defease the defeased portion in accordance
with the terms of this ordinance and the Bond, then all right and interest of the
Registered Owner in the covenants of this ordinance and in the funds and accounts
obligated to the payment of the defeased portion shall cease and become void.
Thereafter, the Registered Owner shall have the right to receive payment of the
principal of and interest on the defeased portion solely from the trust account and the
defeased portion shall be deemed no longer outstanding.
Section 21. Sale and Delivery of the Bond.
(a) Approval of Bank Proposal; Delivery of Bond. The Bank has presented the
Bank Proposal to the City offering to purchase the Bond, which written Bank Proposal is
on file with the City Clerk. The City Council finds that accepting the Bank Proposal is in
the City's best interest and accepts the offer contained therein. The Designated
Representative is authorized to execute the Bank Proposal on behalf of the City, so long
as the terms provided therein are consistent with the terms of this ordinance.
(b) Preparation, Execution and Delivery of the Bond. The Bond will be
prepared at City expense and will be delivered to the Bank in accordance with the Bank
Proposal, together with the approving legal opinion of Bond Counsel regarding the
Bonds.
Section 22. Supplemental Ordinances. This ordinance shall not be modified,
altered, amended, supplemented or rescinded in any respect after the Issue Date,
except as provided in and in accordance with and subject to the provisions of this
section.
(a) The City may, from time to time, and at any time, without the consent of or
notice to the Registered Owners, pass any supplemental ordinance deemed necessary
or desirable by the City for the purpose of modifying, altering, amending, supplementing
or rescinding, in any particular, any of the terms or provisions contained in this
ordinance or any other Parity Bond Authorizing Ordinance, as follows:
(1) to provide for the issuance of Future Parity Bonds in accordance with the
provisions of this ordinance;
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(2) to cure any formal defect, omission, inconsistency or ambiguity in this
ordinance in a manner not materially adverse to the security of the Registered Owners;
(3) to impose upon the Bond Registrar (with its consent) for the benefit of the
Registered Owners any additional rights, remedies, powers, authority, security, liabilities
or duties that may lawfully be granted, conferred or imposed and that are not contrary to
or inconsistent with this ordinance as therefore in effect,
(4) to add to the covenants and agreements of, and limitations and restrictions
upon, the City in this ordinance, other covenants, agreements, limitations and
restrictions to be observed by the City that are not contrary or inconsistent with this
ordinance as therefore in effect;
(5) to confirm, as further assurance, any pledge under, and the subjection to
any lien, charge or pledge created or to be created by this ordinance of any other
money, securities or funds;
(6) to authorize different denominations of the Parity Bonds and to make
correlative amendments and modifications to this ordinance regarding exchangeability
of Parity Bonds of different authorized denominations, redemptions of portions of Parity
Bonds of particular authorized denominations, provisions providing for relating to a
securities depository, and to make similar amendments and modifications of a technical
nature not materially adverse to the security of the Registered Owners;
(7) to modify, alter, amend or supplement this ordinance in any other respect
that is not materially adverse to the security of the Registered Owners that does not
involve a change described in subsection (c) of this Section;
(8) due to change in federal law or rulings, to maintain any exclusion from
gross income of the interest on Parity Bonds from federal income taxation in a manner
not materially adverse to the security of the Registered Owners; or
(9) to add to the covenants and agreements of, and limitations and restrictions
upon, the City in this ordinance, other covenants, agreements, limitations and
restrictions to be observed by the City that are requested by a credit provider for Parity
Bonds and that are not materially adverse to the security of the Registered Owners.
(b) Except for any supplemental ordinance passed pursuant to subsection (b) of
this section, subject to the terms and provisions contained in this subsection and not
otherwise, Registered Owners of not less than a majority of aggregate principal amount
of the Parity Bonds then outstanding shall have the right from time to time to consent to
and approve the passage by the City of any supplemental ordinance deemed necessary
or desirable by the City for the purpose of modifying, altering, amending, supplementing
or rescinding, in any particular, any of the terms or provisions contained in this
ordinance or any other Parity Bond Authorizing Ordinance; except that, unless approved
in writing by each Registered Owner of each affected Parity Bond then outstanding,
nothing contained in this section shall permit, or be construed as permitting:
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(1) a change in the times, amounts or currency of payment of any outstanding
Parity Bond, or a reduction in the principal amount of any outstanding Parity Bond or a
change in the rate or method of determining the rate of interest thereon or the
redemption provisions thereof, or
(2) a preference or priority of any Parity Bond over any other Parity Bond, or
(3) a reduction in the aggregate principal amount of Parity Bonds, the consent
of the Registered Owners of which is required for any supplemental ordinance.
(c) Before the City passes any supplemental ordinance, the City shall have
received an opinion of Bond Counsel stating that the passage of the supplemental
ordinance is authorized or permitted by this ordinance and each other Parity Bond
Authorizing Ordinance and will not, in and of itself, adversely affect the exclusion from
gross income for federal income tax purposes of interest on any tax - exempt Parity
Bonds.
Section 23. Financial Reporting. The City shall provide the following to the Bank:
(a) within 30 days after receipt from the State Auditor, a copy of the audited financial
statements of the City, and (b) within 30 days after a final budget is published, a copy of
the City's budget.
Section 14. General Authorization and Ratification. The appropriate officers of
the City are severally authorized to take such actions and to execute such documents
as in their judgment may be necessary or desirable to carry out the transactions
contemplated in connection with this ordinance, and to do everything necessary for the
prompt delivery of the Bond to the Bank and for the proper application, use and
investment of the proceeds of the Bond. All actions taken prior to the effective date of
this ordinance in furtherance of the purposes described in this ordinance and not
inconsistent with the terms of this ordinance are ratified and confirmed in all respects.
Section 25. Corrections by City Clerk or Code Reviser. Upon approval of the
City Attorney, the City Clerk and the code reviser are authorized to make necessary
corrections to this ordinance, including the correction of clerical errors; references to
other local, state or federal laws, codes, rules, or regulations; or ordinance numbering
and section /subsection numbering.
Section 26. Severability. The provisions of this ordinance are declared to be
separate and severable. If a court of competent jurisdiction, all appeals having been
exhausted or all appeal periods having run, finds any provision of this ordinance to be
invalid or unenforceable as to any person or circumstance, such offending provision
shall, if feasible, be deemed to be modified to be within the limits of enforceability or
validity. However, if the offending provision cannot be so modified, it shall be null and
void with respect to the particular person or circumstance, and all other provisions of
this ordinance in all other respects, and the offending provision with respect to all other
persons and all other circumstances, shall remain valid and enforceable.
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Section 27. Effective Date. This ordinance or a summary thereof shall be
published in the official newspaper of the City, and this ordinance shall take effect and
be in full force five days after passage and publication as provided by law.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2015.
ATTEST /AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk
APPROVED AS TO FORM BY:
Bond Counsel
Jim Haggerton, Mayor
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number:
Attachment: Exhibit A — Parameters for Final Terms
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FY141RIT 0
PARAMETERS FOR FINAL TERMS
(a) Principal Amount. The principal amount of the Bond shall not exceed
$2,100,000.
(b) Issue Date. The Bond shall be dated the Issue Date, which
shall be not later than one year after the effective
date of this ordinance.
(c) Denomination. The Bond shall be in the denomination of the
principal amount, shall be numbered in the manner
and shall bear the name and additional designation
as deemed necessary or appropriate by the
Designated Representative.
(d) Interest Rate. The Bond shall bear interest at a fixed rate per
annum not to exceed 2.50% (computed on the
basis of a 360 -day year of twelve 30 -day months)
from the Issue Date or from the most recent date
for which interest has been paid or duly provided
for, whichever is later.
(e) Payment Dates. Interest shall be payable semiannually on June 1
and December 1 of each year, commencing
June 1, 2016. Principal shall be payable on
December 1 of each year from 2016 to 2026,
inclusive.
(f) Final Maturity. December 1, 2026.
(g) Prepayment. The principal of the Bond is subject to prepayment
at the option of the City at any time on or after
December 1, 2020, as a whole or in part, at par
plus accrued interest to the date of prepayment.
(h) Price. The purchase price for the Bond is par (100 %).
(i) Fees. The City shall pay the Bank a one -time
commitment fee of $2,100. The City shall pay Bank
counsel fees in an amount not to exceed $3,000.
95
CERTIFICATION
I, the undersigned, City Clerk of the City of Tukwila, Washington (the "City "), hereby
certify as follows:
1. The attached copy of Ordinance No. (the "Ordinance ") is a full, true and
correct copy of an ordinance duly passed at a regular meeting of the City Council of the
City held at the regular meeting place thereof on 2015, as
that ordinance appears on the minute book of the City.
2. The Ordinance will be in full force and effect five days after publication in the
City's official newspaper, which publication date is expected to be
, 2015.
3. A quorum of the members of the City Council was present throughout the
meeting and a majority of the members voted in the proper manner for the passage of
the Ordinance.
Dated: , 2015.
CITY OF TUKWILA, WASHINGTON
Christy O'Flaherty, MMC, City Clerk
4
City of Tukwila
Finance and Safety Committee
FINANCE AND SAFETY COMMITTEE
Meeting Minutes
November 17, 2015 — 5:30 p.m.; Hazelnut Conference Room
PRESENT
Councilmembers: De'Sean Quinn, Acting Chair; Joe Duffie, Verna Seal (Absent: Kathy Hougardy)
Staff: David Cline, Peggy McCarthy, Chris Flores, Kim Gilman, Stephanie Brown, Mike
Villa, Eric Drever, Kraig Boyd, Todd Rossi, Leon Richardson, Trina Cook, Christy
O'Flaherty, Robin Tischmak, Gail Labanara, Laurel Humphrey
Guests: Duncan Brown, Public Financial Management, Inc.; Jerry Thornton, Resident;
Libby Johnson, Resident
CALL TO ORDER: The meeting was called to order at 5:30 p.m.
I. PRESENTATIONS No presentations.
II. BUSINESS AGENDA
There was consensus to consider items of business in the order as presented below.
A. Ordinance: Refunding the 2006 Water, Sewer, Surface Water Revenue Bonds
Staff is seeking Council approval of an ordinance that would authorize the refunding of the 2006
Water and Sewer Revenue bonds as proposed by Columbia Bank. Columbia Bank was selected
from six proposals as having the most favorable terms. Closing is estimated to occur in late
December 2015. A revision version of the draft ordinance was distributed to the Committee and
will be included in the COW packet. UNANIMOUS APPROVAL. FORWARD TO NOVEMBER
23, 2015 COMMITTEE OF THE WHOLE.
B. 2015 COPS Hiring Grant Award
Staff is seeking Council approval to accept a federal COPS grant award of $250,000 to help
fund two new officers who will be assigned to residential areas and focus on outreach to the
City's immigrant and refugee communities. The total cost of salary, benefits, vehicle and
equipment over four years is $1,211,482.00 leaving a City cost of $961,482. Committee
members and staff discussed the merits of the proposal. Councilmember Quinn noted the
importance of communicating to the community the benefits and efficiencies resulting from this
kind of investment, noting that resources may be freed up in other areas. The Committee
suggested public outreach on this grant award and funding proposal. UNANIMOUS
APPROVAL. FORWARD TO NOVEMBER 23, 2015 COMMITTEE OF THE WHOLE.
C. Police Records Management System Purchase
The Police Department is planning to update its records management system which has been
in place for almost 20 years and is considered inefficient and limited. An updated system is
expected to improve effectiveness, efficiency and safety, reduce liability, and falls in alignment
with the City and the Police Department Strategic Plans. Staff conducted an RFP process and
recommends the purchase of the Sentryx product from Spillman Technologies, Inc. A
department needs assessment and onsite vendor visit were analyzed together, resulting in the
list of recommended modules and features outlined in the memo. The total request will include
software, hardware, implementation, training, and half -time tech support position. The total,
including one -time and ongoing costs, is $1,070,466.00 through 2018. $350,000 has been set
aside in the contingency fund for this purchase and the remainder through 2017 is included in
RYA