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HomeMy WebLinkAboutO-0972 - Bond issue (Special)CITY OF MARYSVILLE,WASHINGTON ORDINANCE NO.972 AN ORDINANCE of the City of Marysville,Washington, specifying and adopting a system or plan providing for additions to and betterments and extensions of the waterworks utility of the City,including the sanitary sewerage system as a part thereof;de- claring the estimated cost thereof as nearly as may be;providing for the issuance of $800,000 par value of "Water and Sewer Drought Relief Revenue Bonds, 1977,"of the City to obtain a part of the funds with which to pay the cost of such system or plan; creating a bond redemption fund;fixing the date, interest rate,maturities,form,denomination, terms and covenants of such bonds;creating a special construction fund;and providing for the sale of such bonds as a single bond to the Economic Development Administration,United States Department of Commerce. WHEREAS,in the judgment of the City Council of the City of Marysville,Washington (hereinafter called the "City"),the public health,welfare,safety and convenience require and it is advisable that certain additions to and betterments and extensions of the ex- isting waterworks utility of the City,including the sanitary sewerage system as a part thereof,be made consisting of the acquisition and construction of a transmission main,control facilities and a well, all as more particularly hereinafter set forth;and WHEREAS,the City Council has determined in order to carry out the system or plan providing for additions to and·betterments and extensions of the waterworks utility of the City hereinafter specified and adopted,it is necessary to issue and sell $800,000 par value of water and sewer revenue bonds to provide a part of the funds with Which to pay the cost of carrying out such system or plan to evidence loans in such aggregate total amount authorized by the Economic Development Administration,United States Department of Commerce;NOW, THEREFORE, THE CITY COONCIL OF THE CITY OF MARYSVILLE,WASHINGTON,DO ORDAIN,as follows: Section 1.As used in this ordinance,the following words shall have the meanings hereinafter set forth: (a)"Bond Fund"shall mean the "Water and Sewer Drought Relief Revenue Bond Fund,1977,"created by this ordinance,for the pur- pose of paying and securing the principal of and interest on the Bonds and any Parity Bonds. (b)"Bonds"shall mean the $800,000 par value of "Water and Sewer Drought Relief Revenue Bonds,1977,"of the City issued pursuant to and for the purposes provided in this ordinance. (c)"City"shall mean the City of Marysville,Washington, a municipal corporation duly organized and existing under the laws of the State of Washington as a third class city. (d)"Gross Revenue of the Waterworks Utility"shall mean all the earnings and revenue received by the Waterworks Utility from any source whatsoever,except taxes,charges in lieu of taxes,utility local improvement district assessments,proceeds from the sale of City property and bond proceeds. (e)"Maintenance and Operation Expenses"shall mean all reasonable expenses incurred by the City in causing the Waterworks Utility to be operated and maintained in good repair,working order and condition,but shall not include any depreciation or taxes or charges in lieu of taxes levied or imposed by the City. (f)"Net Revenue of the Waterworks Utility"shall mean the Gross Revenue of the Waterworks Utility,less the Maintenance and Operation Expenses. (g)"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,the payment of the principal of and interest on which constitutes a lien and charge on the Gross Revenue of the Waterworks Utility equal in rank with the lien and charge 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 Bonds. -2- (h)"Plan of Additions and Betterments"shall mean the system or plan providing for additions to and betterments and extensions of the Waterworks Utility of the City as specified and adopted herein. (i)"Prior Lien Bonds"shall mean any water and/or sewer revenue bonds of the City heretofore issued and any water and sewer revenue bonds hereafter issued on a parity therewith,the payment of the principal of and interest on which constitutes a lien and charge on the Gross Revenue of the Waterworks Utility,or the gross revenue of the sanitary sewerage system alone or the gross revenue of the water system alone prior and superior to the lien and charge upon such revenue for the payment of the Bonds and Parity Bonds,in accordance with the right of the City reserved to issue such Prior Lien Bonds as set forth in Section 16 of this ordinance. (j)"Single Bond"shall mean the single bond or bonds authorized and described in Section 7 of this ordinance which may be substituted for the Bonds as evidence of indebtedness authorized herein or any specified part thereof.All provisions of this ordinance applicable to the Bonds shall be equally applicable to the Single Bond,and vice versa,unless the conditions of any such provision shall clearly indicate to the contrary. (k)"Waterworks Utility"shall mean the existing Waterworks Utility of the City,including the sanitary sewerage system as a part thereof,as the same shall be added to,bettered,improved and extended for as long as any of the Bonds or Parity Bonds are outstanding. Section 2.The City hereby specifies and adopts the Plan of Additions and Betterments as follows: (a)Transmission Main -18-inch diameter. Location:Beginning at the intersection of 172nd Street N.E.and 43rd Avenue N.E.~thence north along 43rd Avenue N.E.and its projection for approximately 5,400 feet to 188th Street N.E.;thence easterly on 188th Street N.E.for approximately 1,400 feet to 47th Avenue N.E.;thence north on 47th Avenue N.E. for approximately 3,640 feet to 198th Place N.E.; thence easterly on 198th Place N.E.for approximately 3,960 feet to a projection of 59th Avenue N.E.~ thence northerly and easterly on 59th Avenue N.E. and its projection and the Dike Road for approximately 11,560 feet to the termination at the pumping control facilities~ -3- (b)Control Facilities -The facilities shall con- sist of mechanical and electrical equipment to control the well.The equipment includes pumps,chlorinator, electrical controls,surge arrestor,te1emetering system,pressure relief valve and flow meter.The facilities will be installed in a below-ground con- crete structure;and (c)Well -The well shall consist of a 16-foot diameter concrete caisson and collector laterals. The well capacity shall be 10 million gallons per day. There shall be included in the foregoing the acquisition and installation of all necessary valves,fittings,piping,easements, rights-of-way and land which may be required.The Plan shall be carried out in accordance with the plans and specifications prepared by Hammond, Collier &Wade -Livingstone Associates,Inc.,consulting engineers for the City. It is a part of this Plan of Additions and Betterments that the City may make such changes in the details of the Plan prior to or in actual course of construction and installation which may be found necessary or desirable,provided the same do not substantially change the Plan as hereinabove set forth. Section 3.The gross benefits and revenues to be derived from the maintenance and operation of the Waterworks Utility at the rates to be charged for water and sanitary sewage disposal service will, in the jUdgment of the City Council,be more than sufficient to meet all Maintenance and Operation Expenses,to meet the debt service on all outstanding Prior Lien Bonds when due,and to permit the setting aside into a special fund out of the Gross Revenue of the Waterworks Utility of sufficient amounts to pay the interest on the Bonds herein authorized to be issued as such interest becomes due and payable and to pay and redeem all of those Bonds at maturity. Section 4.The life of the foregoing additions to and betterments and extensions of the existing Waterworks Utility to be acquired and constructed pursuant to such Plan of Additions and Better- ments is hereby declared to be at least forty (40)years. -4- Section 5.The estimated cost,as near as may be,of the aforesaid Plan of Additions and Betterments is hereby declared to be $1,600,000. Section 6.The cost of carrying out the Plan of Additions and Betterments shall be met and defrayed from the issuance and sale of water and sewer revenue bonds in the amount of $800,000 to evidence the loan authorized by the Economic Development Administration,United States Department of Commerce,and the balance of such cost from grants anticipated to be received from the Economic Development Administration, United States Department of Commerce,in the total estimated aggregate amount of approximately $800,000,and from any other money of the City that may be necessary and available therefor. Section 7.For the purpose of providing a part of the funds with which to carry out the Plan of Additions and Betterments,the City shall cause to be issued the Single Bond in the amount of $800,000. The Single Bond shall be dated as of the date of delivery to the pur- chaser thereof,shall be registered as to both principal and interest in the office of the City Treasurer of the City as registrar,shall be numbered R-l,and shall bear interest at the rate of 5%per annum. Interest shall be payable semiannually on June 1 and December 1 of each year,with full obligation on the part of the City to pay interest at the bond rate from and after the bond maturity dates until the Single Bond (or Bonds,if later converted to serial bonds),both princi- pal and interest,is paid in full.Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America at the office of the City Treasurer of the City.The Bonds shall be payable solely from Gross Revenue of the Waterworks Utility pledged to the Bond Fund,and shall not be a general obligation of the City. The Single Bond shall be payable in principal installments on December 1 of each of the following maturity years: -5- ,.. Maturity Year 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Principal Amount $20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 Maturity Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Principal. Amount $20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 Such Single Bond shall be registered as to principal and interest and thereafter shall be payable as directed by the purchaser but otherwise conforming to the requirements of the Bonds.The City covenants that upon request of the holder of a Single Bond,it shall issue at its own expense and within ninety (90)days from the date of such request negotiable bearer serial coupon bonds in the denomination of $100 each or a multiple thereof (except for one bond maturing in 1978),in an aggregate amount equal to the amount of the Single Bond still outstanding.The printing of the text of the Single Bond (or \ Bonds,if later converted to serial bonds)shall be of type composition on paper of sufficient weight and strength to prevent deterioration, throughout the life of the loan,except that the Single Bond may be typed on bond paper.The Single Bond shall conform in size to standard practice and contain the approved maturity schedule for payment of principal. ~Section 8.The City reserves the right to prepay on any interest payment date on or after December 1,1987,the entire unpaid principal of the Bonds,or,from time to time,in inverse chronological order of principal installments,may prepay such lesser portion in multiples of $100 as the City may determine of the unpaid principal -6- amount thereof,plus accrued interest to the date of such prepayment. As long as the United States of America shall hold the Single Bond, the City may make such prepayments at any time. Notice of any such optional prepayment shall be mailed by registered mail to the registered owners of the Bonds to be redeemed at their addresses appearing on the registry book at least thirty (30) days prior to the prepayment date and,unless all of the Bonds to be prepaid are registered Bonds,it shall be published once in a financial journal published in the English language and of general circulation in the City of New York,New York,such publication to be not more than sixty (60)nor less than thirty (30)days prior to the date fixed for such prepayment.Interest on any bond so called for prepayment shall cease to accrue on the date fixed for its prepayment unless the bond shall not be paid upon presentation made pursuant to such call. Section 9.There is hereby created and established in the office of the City Treasurer a special fund to be called the "Water and Sewer Drought Relief Revenue Bond Fund,1977"(hereinbefore designated for the purposes of this ordinance as the "Bond Fund"),which fund shall be drawn upon for the sale purpose of paying the principal of and interest on the Bonds and any Parity Bonds.The Bond Fund shall be divided into a Principal and Interest Account and a Reserve Account.So long as any Bonds and/or parity Bonds are outstanding,the City shall set aside and pay into the Bond Fund out of the Gross Revenue of the Waterworks Utility,a fixed amount,without regard to any fixed proportion,namely: (a)Into the Principal and Interest Account at least fifteen days prior to each interest payment date and each principal payment date,an amount which shall on each such interest payment date or principal payment date be sufficient to pay the interest/or principal and interest,as the case may be,then falling due upon the Bonds and upon any Parity Bonds,and (b)into the Reserve Account,in substantially equal monthly installments,such amount together with money which from time to time may be held therein,so that there will be,by no later than December 1, -7- ~:..',-,' • 1982,an amount at least equal to the maximum amount required in any calendar year thereafter to pay the principal of and interest on all then outstanding Bonds due that year. The City shall at all times maintain in the Reserve Account an amount which will at least equal the maximum annual principal and interest requirements on the Bonds,until there is sufficient amount in the Bond Fund as presently constituted to pay the principal and interest on all outstanding Bonds"at which time the money in the Reserve Account may be used to pay such principal and interest.Money in the Reserve Account may be withdrawn to pay the principal of and interest on the outstanding Bonds so long as the money left remaining on deposit in the Reserve Account meets the reserve requirements of this section. In the event that there shall be a deficiency in the· Principal and Interest Account to meet maturing installments of either principal or interest on the Bonds outstanding,such deficiency shall be made up from the Reserve Account by the withdrawal of cash therefrom. Any deficiency created in the Reserve Account by reason of any such withdrawal shall then be made up from Net Revenue of the Waterworks Utility which shall be first available after making necessary pro- visions for the required payments into the Principal and Interest Account. All money in the Bond Fund may be kept on deposit in the official bank depository of the City,or may be invested and reinvested in any legal investment permitted for City money maturing not later than one month prior to the last maturity of any outstanding Bonds payable out of the Bond Fund.Interest earned on any such investment shall be deposited in and become a part of the Reserve Account until the reserve requirements have been accumulated in that account and,thereafter, shall be deposited into the Principal and Interest Account. In the event the Bonds outstanding are ever refunded,the money set aside in the Reserve Account to secure the payment of the -8- .' Bonds may be used to retire Bonds,or may be kept in the Reserve Account as a reserve to secure the payment of such refunding bonds or Parity Bonds,or may be transferred to any other reserve account which may be created to secure the payment of the bonds issued to refund the Bonds, so long as the money left remaining in the Reserve Account is at least equal to the maximum amount required in any calendar year thereafter to pay,the principal of and interest on all remaining outstanding bonds payable out of the Bond Fund due that year. It is hereby declared that in creating the Bond Fund and in fixing the amounts to be paid into it,as aforesaid,the City Council has had due regard for the Maintenance and OperJtion Expenses of the I Waterworks Utility and hereby declares that the Council is not setting aside into the Bond Fund a greater amount than in its judgment will be available over and above such Maintenance and Operation Expenses and the amounts necessary to pay the principal of and interest on outstanding Prior Lien Bonds when due. If the City fails to set aside and pay into the Bond Fund the amounts above set forth,the holder of any of the outstanding Bonds and/or Parity Bonds payable out of the Bond Fund may bring action against the City and compel the setting aside and payment. Section 10.The Gross Revenue of the Waterworks Utility is hereby pledged to the payments required to be made into the Bond Fund,and the Bonds and any Parity Bonds shall constitute a lien and charge upon such Gross Revenue prior and superior to all other liens and charges whatsoever,subject only to Maintenance and Operation Expenses and subject further to the lien and charge on any such revenue for Prior Lien Bonds now outstanding or hereafter issued,the right to issue such additional Prior Lien Bonds being reserved by Section 16 hereof. Section 11.The registered Single Bond to be issued to the Economic Development Administration,United States Department of Commerce,shall be in substantially the following form: -9- ...;. No.R-l UNITED STATES OF AMERICA STATE OF WASHINGTON CITY OF MARYSVILLE $800,000.00 WATER AND SEWER DROUGHT RELIEF REVENUE BOND,1977 5% The City of Marysville,Washington (sometimes herein- after called the "City"),a municipal corporation of the State of Washington,for value received promises to pay to the Economic Development Administration,United States Department of Commerce,or its registered assigns, the principal sum of EIGHT HUNDRED THOUSAND DOLLARS payable in installments on December 1 in each of the following maturity years: Maturity Principal Maturity Principal Year Amount Year Amount 1978 $20,000 1998 $20,000 1979 20,000 1999 20,000 1980 20,000 2000 20,000 1981 20,000 2001 20,000 1982 20,000 2002 20,000 1983 20,000 2003 20,000 1984 20,000 2004 20,000 1985 20,000 2005 20,000 1986 20,000 2006 20,000 1987 20,000 2007 20,000 1988 20,000 2008 20,000 1989 20,000 2009 20,000 1990 20,000 2010 20,000 1991 20,000 2011 20,000 1992 20,000 2012 20,000 1993 20,000 2013 20,000 1994 20,000 2014 20,000 1995 20,000 2015 20,000 1996 20,000 2016 20,000 1997 20,000 2017 20,000 together with interest thereon at the rate of FIVE PERCENT (5%)per annum,payable semiannually on June 1 and December 1 of each year.Both principal of and interest on this bond are payable in such coin or cur- rency which,on the respective dates of payment of such principal and interest,is legal tender for payment of debts due the United States of America solely from the special fund of the City known as the "Water and Sewer Drought Relief Revenue Bond Fund,1977"(hereinafter called the "Bond Fund"),created by Ordinance No.f:l72. (hereinafter called the "Bond Ordinance"),into which fund the City hereby irrevocably binds and obligates itself to pay certain fixed amounts out of the gross revenue of the waterworks utility of the City,including the sanitary sewerage system as a part thereof,and in- cluding all additions,extensions and betterments at any -10- ~.. time made or constructed (hereinafter referred to inclusively as the "Waterworks Utility of the City"), without regard to any fixed proportion,namely,amounts sufficient to pay the principal of and interest on this bond and any additional water and sewer revenue bonds hereafter issued on a parity of lien with this bond in accordance with the provisions of Section 16 of the Bond Ordinance,as they respectively become due,all at the times and in the manner set forth in the Bond Ordinance.This bond is not a general obligation of the City and is payable solely out of the Bond Fund. This bond is payable,both principal and interest, at the office of the City Treasurer of the City.Pay- ments of principal and interest,including prepayments of installments of principal as hereinafter provided, shall be noted on the Payment Record made a part of this bond,and such payment shall fUlly discharge the obligation of the City hereon to the extent of the payments so made.Upon final payment of principal and interest this bond shall be submitted to the City Treasurer of the City for cancellation. This bond,designated as the "Water and Sewer Drought Relief Revenue Bond,1977"(herein referred to as the "Bond"),is issued in the aggregate principal amount of $800,000 pursuant to the laws of the State of Washington for the purpose of paying a part of the cost of carrying out the system or plan providing for additions to and betterments and extensions of the Waterworks Utility of the City as specified and adopted by the Bond Ordinance, all as set forth in the Bond Ordinance and herein. Reference is made to the Bond Ordinance as more fully describing the covenants with and rights of holder of this bond. The City reserves the right to prepay on any interest payment date on or after December 1,1987,the entire unpaid principal hereof,or,from time to time,in inverse chronological order of principal installments, may prepay such lesser portion in mUltiples of $100 as the City may determine of the unpaid principal amount hereof,plus accrued interest to the date of such pre- payment.As long as the United States of America shall hold this bond,the City may make any such prepayments at any time. Notice of any such optional prepayment shall be given at least thirty days prior to the prepayment date by mailing to the registered owner of this bond a notice fixing such prepayment date and the amount of principal to be prepaid. This bond may be assigned and upon such assignment the assignor shall promptly notify the City at the office of the City Treasurer of the City by registered mail, and the assignee shall surrender the same to the City Treasurer either in exchange for a fully registered bond or for transfer on the registration records and verification of the endorsements made on the Payment Record attached hereto of the portion of the principal amount hereof and interest hereon paid or prepaid,and every such assignee shall take this bond subject to such condition. -11- ',,~.,1-. As provided in the Bond Ordinance,this bond is exchangeable at the sole expense of the City at any time,upon ninety days'notice,at the'request of the registered owner hereof and upon surrender of this bond to the City at the office of the City Treasurer in the City for negotiable coupon bonds,payable to bearer, registrable at the option of the holder as to principal of the denomination of One Hundred Dollars ($100)each or a multiple thereof,in an aggregate principal amount equal to the unpaid principal amount of this bond,and in the form of such coupon bond as provided for in the Bond Ordinance. The City hereby covenants and agrees to maintain the Waterworks Utility of the City in good condition,to operate the same in an efficient manner and at a reasonable cost,to establish,maintain and collect such rates for water and sewer service furnished as will provide sufficient revenues to produce the gross revenues required to pay the expenses of maintainance and operation of the Waterworks Utility of the City, and to meet the obligations of the City and otherwise perform all of the covenants of the City,as set forth herein and in the Bond Ordinance. The gross revenues from the Waterworks Utility of the City have been pledged for the payment of this bond and any additional bonds hereafter issued on a parity of lien therewith pursuant to the provisions of Section 16 of the Bond Ordinance,including both principal and interest,in accordance with their terms,at any time outstanding,and this pledge shall constitute a lien and charge upon such gross revenues prior and superior to any other charges whatsoever,subject only to maintenance and operation expenses of that utility and subject further to the lien and charge on such revenues for Prior Lien Bonds (as defined in the Bond Ordinance) now outstanding or hereafter issued,the right to issue additional Prior Lien Bonds being reserved by Section 16 of the Bond Ordinance. Under existing federal law and rulings,the interest payable on this bond is exempt from federal income tax. It is hereby certified that this bond is issued pur- suant to and in strict compliance with the Constitution and laws of the State of Washington and the ordinances of the City,that all acts,conditions and things required by law to exist,happen and be performed pre- cedent to and in the issuance of this bond do exist, have happened and have been performed as provided by law. IN WITNESS WHEREOF,the City of Marysville,Washington, has caused this bond to be signed by the manual signature of its Mayor and attested by the manual signature of its City Cl~rk and its City seal to be hereto affixed as of the \L1-day of December,1977. :;T~ •Mayor ~'r:~../),/ CiCierk -12- ~-''..' CERTIFICATE OF CITY TREASURER This bond is the single registered installment bond described in the within-mentioned Ordinance No.972. City Treasurer .(FORM OF PAYMENT RECORD) Date Due June 1,1978 December 1,1978 June 1,1979 December 1,1979 Etc. Principal Payment principal Balance Due Interest Payment Date 5%Paid Signature of City Treasurer SCHEDULE "A" Principal installments on which payments have been made prior to maturity. Principal Due Date Amt. Principal Payment Balance Date Paid Signature of City Treasurer ASSIGNMENT FOR VALUE RECEIVED,the undersigned registered owner thereof hereby sells,assigns and transfers the within bond unto Dated: In the Presence of: Section 12.Such Single bond shall be redeemable in whole or in part,to the extent,at the time and in the manner set forth in Section 8 hereof,except that there need be no publication of notice of redemption;except that if and as long as the United States Government -13- or any agency thereof owns such Single Bond,the Government will waive the non-callable provisions applicable. Such Single Bond may also be transferred by the registered owner thereof,provided that such transfer relates to the entire principal amount of such Single Bond,by proper execution of the assign- ment endorsed on such bond,and any such transfer shall be noted on the bond registration book of the City by the City Treasurer. If the Single Bond is exchanged for serial Bonds,such defini- tive serial Bonds shall be in the denomination of $100 each or a multiple thereof,shall have coupons attached bearing maturity dates representing all unpaid installments of interest due on each of those Bonds,shall be in the total principal sum of the unpaid principal due on the Single Bond and shall mature as provided in Section 7 hereof on those dates of maturity which have not yet occurred on the date of such exchange,ex- cept that if any prepayxent authorized herein shall have been effected the same shall be deemed to have redeemed such definitive serial Bonds in inverse numerical order.Such definitive serial Bonds and the coupons attached thereto shall be executed as herein provided therefor. Section 13.The Single Bond may be in typewritten form or may be printed on lithographed form,shall be signed by the Mayor, attested by the City Clerk and certified by the City Treasurer,and shall be sealed with the City seal.If any bearer coupon bonds are issued upon the conversion of a Single Bond,the same shall be signed by the facsimile signature of the then Mayor and shall be attested by the manual signature of the then City Clerk and shall have interest coupons attached thereto executed with facsimile signatures of the persons who are then the Mayor and City Clerk. Section 14.The City hereby covenants and agrees with the owner and holder of each of the Bonds as follows: (a)It will at all times maintain and keep the Waterworks Utility in good repair,working order and condition,and also will at all times operate the utility and the business in connection therewith in an efficient manner and at a reasonable cost,and -14- .~,' will maintain and collect such rates and charges for water and sewer service furnished as will provide sufficient revenues to produce the gross revenue required to meet the Maintenance and Operation Ex- penses and to meet the debt service and reserve requirements of all outstanding Bonds and any Parity Bonds and all Prior Lien Bonds heretofore or here- after issued. (b)It will,while any Bonds remain outstanding, keep proper and separate accounts and records in which complete and separate entries shall be made of all transactions relating to the Waterworks Utility and ~will furnish the original holder or holders thereof, at the written request of such holder or holders, complete operating and income statements of that utility in reasonable detail covering any fiscal year, not more than sixty days after the close of such fiscal year,and will grant any holder or holders of at least twenty-five percent of the outstanding Bonds the right at all reasonable times to inspect that utility and all records;accounts and data of that utility relating thereto. (c)It will carry fire and such other forms of insurance on such of the buildings,equipment and facilities of the Waterworks Utility as under good practice are ordinarily carried on such buildings, equipment and facilities by utilities engaged in the operation of the Waterworks Utility to the full in- surable value thereof,and will also carry adequate public liability insurance at all times,if reasonably available. (d)It will not furnish water or sewer service to any customer whatsoever free of charge,and it shall, not later than sixty days after the end of each calendar year,take such legal action as may be feasible to enforce collection of all such collectible delinquent accounts. (e)It will not mortgage,sell,lease,or in any manner encumber or dispose of all the property of the Waterworks Utility,unless provision is made for pay- ment into the Bond Fund of a sum sufficient to pay the principal of and interest on all outstanding Bonds and Parity Bonds,and it will not mortgage,sell,lease, or in any manner encumber or dispose of any part of the Waterworks Utility that is used,useful and material to the operation of that utility unless provision is made for replacement thereof or for pay- ment into the Bond Fund of an amount which shal}bear the same ratio to the amount of the outstanding Bonds and Parity Bonds as the revenue available for debt service for those bonds for the twelve months preceding such sale,lease,encumbrance or disposal from the portion of the Waterworks Utility so sold,leased, encumbered or disposed of bears to the revenue avail- able for debt service for those bonds from the entire Waterworks Utility for the same period.Any such money so paid into the Bond Fund shall be used to retire outstanding Bonds and Parity Bonds at the earliest possible date. -15- (f)It will make no use of the proceeds of the Bonds or other funds of the City at any time during the term of the Bonds,which,if such use had been reasonably expected at the date that the Bonds are issued,would have caused such Bonds to be arbitrage bonds within the meaning of Section l03(c)of the United States Internal Revenue Code of 1954,as amended,and the applicable regulations of the United States Treasury Department promulgated thereunder, all as of the date of issue of the Bonds. Section 15.In the event the City shall issue advance refunding bonds pursuant to the laws of the State of Washington,or have money available from any other lawful source,to pay the principal of and interest on the Bonds or such portion thereof included in the refunding plan as the same become due and payable and to refund all such then outstanding Bonds and to pay the costs of refunding,and shall have irrevocably set aside for and pledged to such payment andptefunding, money and/or direct obligations of the United States of America or other legal investments (with the right of the City to make substitutions for such investments)sufficient in amount,together with known earned income from the investments thereof,to make such payments and to accomplish the refunding as scheduled (hereinafter called the "trust account")and shall irrevocably make provisions for redemption of such Bonds,then in that case all right and interest of the owners or holders of the Bonds to be so retired or refunded and the appurtenant coupons (hereinafter collectively called the "defeased Bonds")in the covenants of this ordinance,in the Gross Revenue of the Waterworks Utility and funds and accounts obligated to the payment of such Bonds shall there- after cease and become void,except such owners and holders shall have the right to receive payment of the principal of and interest on the defeased Bonds from the trust account and,in the event the funds in the trust account are not available for such payment,shall have the residual right to receive payment of the principal of and interest on the defeased Bonds from the Gross Revenue of the Waterworks Utility 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 -16- -!.~ ~I ~, apply any money in any other fund or account established for the pay- ment or redemption of the defeased Bonds to any lawful purposes as it shall determine,subject only to the rights of the holders of any other bonds then outstanding. In the event that the refunding plan provides that the Bonds being refunded or the refunding bonds to be issued be secured by cash and/or direct obligations of the United States of America or other legal investments pending the prior redemption of those bonds being refunded and if such refunding plan also provides that certain cash and/or direct obligations of the United States of America or other legal investments are irrevocably,pledged for the prior redemption of those Bonds included in the refunding plan,then only the debt service on the Bonds which are not defeased Bonds and refunding bonds,the payment of which is not so secured by the refunding plan,shall be included in the computa- tion of coverage for issuance of Parity Bonds. Section 16.The City reserves the right to issue Parity Bonds,which shall constitute a lien and charge upon the Gross Revenue of the Waterworks Utility,on a parity with the Bonds,if the following conditions are met and complied with at the time of the issuance of such Parity Bonds: (a)No default exists in the payment of the principal or interest on any outstanding water and/or sewer revenue bonds of the City,and the amounts required to have been paid into the Bond Fund shall have been paid and maintained intact therein;and (b)There shall be on file with the City Clerk a certificate of a nationally recognized firm of certified public accountants or a professional en- gineer licensed to practice in the State of Washington and experienced in municipal utilities to the effect that the Net Revenue of the Waterworks Utility for the calendar year preceding the year in which such Parity Bonds are to be issued is not less than 120% of the average annual debt service requirements of all water and/or sewer revenue bonds of the City then outstanding and the Parity Bonds proposed to be so issued,but this requirement may be waived or modified by the written consent of the holders representing 75%of then outstanding Bonds and Parity Bonds payable out of the Bond Fund. -17- ~",' I -~'.......... Nothing herein contained shall prevent the City from issuing water and sewer revenue bonds which are a charge upon the Gross Revenue of the Waterworks Utility junior or inferior to the payments required to be made therefrom into the Bond Fund for the payment of the Bonds and Parity Bonds or from pledging the payment of utility local improve- ment district assessments into a fund or account created to pay and secure the payment of principal of and interest on such junior lien bonds so long as such assessments are levied in any utility local improvement district created in connection with carrying out the improvements to be constructed from the proceeds of the sale of such junior lien bonds, nor shall anything herein contained prevent the City from issuing water and sewer revenue bonds to refund maturing water and/or sewer revenue bonds of the City for the payment of which money is not otherwise available. The City further,however,reserves the right to issue Prior Lien Bonds at such times and upon such terms and conditions as the City shall hereafter determine,but only if the City can demonstrate to the satisfaction of the Economic Development Administration,United States Department of Commerce (hereinafter called the "Government"),that (1)there is existing and projected Net Revenue of the Waterworks Utility after the issuance of such Prior Lien Bonds of not less than 1.1 times the debt service requirements for the Bonds,aft~r all other debt service requirements of the City have been met,including required reserves;and (2)the City is in compliance with all other reserve requirements for the Bonds and any other outstanding Parity Bonds and then outstanding Prior Lien Bonds of the City.The failure of the Government to object in writing to any proposed issue of Prior Lien Bonds within 30 days of notification of the Regional Office of the Government shall be deemed to constitute a finding by the Government that it is satisfied that the aforementioned conditions for the proposed Prior Lien Bonds have been met. -18- Section 17.The Economic Development Administration,United States Department of Commerce,has made an offer to purchase the Single Bond at a price of par,the City to furnish the printed Single Bond and the unqualified approving legal opinion of Roberts,Shefelman, Lawrence,Gay &Moch,municipal bond counsel of Seattle,Washington, at the City's expense.The City Council being of the opinion ~hat it is in the best interests of the City to accept such offer hereby accepts the same.The Single Bond shal.l,therefore,after its execu- tion,be delivered to the Economic Development Administration,United States Department of Commerce,upon payment therefor as aforesaid. Section 18.There is hereby created and established in the office of the City Treasurer a special fund to be known and designated as the "Water and Sewer Drought Relief Construction Fund,1977,"into which shall be deposited all funds to be used for the purpose of carrying out the Plan of Additions and Betterments. The accrued interest received from the sale of the Bonds shall be paid into the Bond Fund.The balance of the principal proceeds received shall be paid into the "Water and Sewer Drought Relief Con- struction Fund,1977,"and expended to pay a part of the cost of carrying out the Plan of Additions and Betterments,and the costs of the issuance and sale of the Bonds.Pending expenditure for the pur- poses authorized,the money in such special construction fund may be invested in any lawful investments,and all earnings thereof and accumulations thereon shall be credited to and retained in that fund to be duly expended for such purposes. Section 19.This ordinance shall be in full force and effect five days after its passage and publication as by law required. PASSED by the City Council at a regular open public meeting -19- thereof and APPROVED by the Mayor of the City of Marysville, TtlWashington,this \2--day of December,1977. ~~ Mayor ATTEST: ity Clerk FORM APPROVED: Published: -20-