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HomeMy WebLinkAboutO-1088 - 1979 water and sewer revenue bond issue (Special)CITY OF MARYSVILLE,WASHINGTON ORDINANCE NO.'08S AN ORDINANCE of the City of Marysville,Washington, providing for the issuance of $1,200,000 par value of "Water and Sewer Revenue Bonds,1979,11 for the purpose of obtaining funds to pay the cost of carrying out the systems or plans of additions to and better- ments and extensions of the waterworks utility of the City,including the sewerage system as a part thereof, as specified and adopted in Ordinances Nos.962 and 936,and applicable to Utility Local Improvement Districts Nos.5 and 6;fixing the date,de~omination, interest rate,form,terms and covenants of such bonds; and confirming the sale and providing for the delivery of such bonds to Foster &Marshall Inc.and Terry Thompson &Co.of Seattle,Washington,jointly. WHEREAS,the City of Marysville,Washington (hereinafter called the "Cityll),by Ordinance No.384 passed the 14th day of July,1952,specified and adopted a system or plan of additions to and betterments and extensions of the waterworks utility of the City,and authorized the issuance and sale of not to exceed $280,000 par value of "Water Revenue Bonds,1952,"of which $134,000 par value thereof were heretofore issued as "Series A,"$100,000 par value thereof as "Series B,"and $46,000 par value thereof as "Series C,II and all of such Series A and Series C Bonds have now matured and been paid;and WHEREAS,by Section 19 of such Ordinance ~o.384,the City reserved the right to issue additional water revenue bonds or water and sewer revenue bonds in the event that the City should thereafter provide by ordinance for the construction of a system of sewerage or additions,extensions and betterments to an existing system and provide that the system of sewerage,including all additions,extensions and betterments thereto,shall become a part of the waterworks utility of the City,which bonds shall constitute a charge and lien upon the revenues of the waterworks utility of the City,including the sewerage system if the same is made a part of the waterworks utility of the City,on a parity with the "Water Revenue Bonds,1952";provided,certain conditions shall be met and complied with at the time of the issuance of such additional bonds;and WHEREAS,the City by Ordinance No.385 passed September 2, 1952,combined the sewerage system of the City with all additions and improvements thereto with the waterworks utility of the City, and the sewerage system at all times since has been considered a part of and belonging to the waterworks utility of the City,and the words "Waterworks Utility of the City"shall hereinafter mean the combined sewerage system and water system of the City,together with all additions thereto and betterments and extensions thereof hereafter made;and WHEREAS,the City subsequently issued and sold bonds of the following issues in addition to the "Water Revenue Bonds,1952, Series B": -2- ',.1:-.. "Water and Sewer Revenue Bonds,1959" "Water and Sewer Revenue Bonds,1963" "Water and Sewer Revenue Bonds,1965" "Water and Sewer Revenue Bonds,1967 11 "Water and Sewer Revenue Bonds,1969" (hereinafter collectively with the 1952 Series B Bonds called the "Prior Lien Bonds") "~'Jater and Sewer Revenue Bonds,1969,Issue No.2" (hereinafter called the "1969 -Bonds,Issue No.2") all of which bonds having been issued on a parity of lien with th~ outstanding "Water Revenue Bonds,1952,Series B,"and with each other and constitute a first and prior charge and lien on the Revenue of the Waterworks Utility of the City (as heremdefined);and WHEREAS,the City thereafter issued and sold pursuant to Ordinance No.873 passed September 22,1975,$1,090,000 par value of "Water and Sewer Revenue Bonds,1975"(hereinafter called the "1975 Bonds"),which 1975 Bonds constituted a charge and lien upon the Revenue of the Waterworks Utility of the City (as hereinafter defined)junior to the prior charge and lien upon such Revenue for all of the Prior Lien Bonds but a first charge and lien upon assessments collected within Utility Local Improvement Districts Nos.1,2,3 and 4 created in connection with and pledged to the payment of such 1975 Bonds;and WHEREAS,pursuant to Ordinance No.967 passed December 19, 1977,under date of issue of December 1,1977,the City issued and sold $2,307,000 par value of "Water and Sewer Revenue Refunding Bonds, 1977"(hereinafter called the "1977 Refunding Bonds),to provide a part of the funds to refund the outstanding 1969 Bonds,Issue No.2, and 1975 Bonds by providing for the payment of the principal of and interest on such 1969 Bonds,Issue No.2,as the same became due up to and including January 1,1997,and for the call,payment and retirement of all remaining outstanding 1969 Bonds,Issue No.2,on January 1, 1997,and (b)for the payment of (i)the principal of and interest on -3- such 1975 Bonds numbered 7 to 174,inclusive,being the Serial Bonds,as the same shall become due up through January 1,1986,at which time 1975 Bonds numbered 85 to 175,inclusive,will be called,paid and retired;(ii)the principal of and interest on 1975 Bonds numbered 215 to 224,inclusive,on January 1,1978,the holders thereof having consented to surrender such bonds for payment and retirement on such date and (iii)the interest on 1975 Bonds numbered 175 to 214,inclusive,being Term Bonds,as the same becomes due up through their respective call dates,and the principal of such Term Bonds as the same shall be called,paid and retired in accordance with the call provisions applicable thereto as provided in Ordinance No.873 and in such Term Bonds;and WHEREAS,by subparagraph (i)of Section 9 of Resolution No. 967 the District covenanted that: It would not create any special fund or funds for the payment of other revenue bonds,warrants or obligations, or authorize or issue any other revenue bonds,warrants or obligations which would rank on a parity with or have any priority over the payments into or the money in the Water and Sewer Revenue Refunding Bond Fund,1977, except that it reserved the right for: "(1)The purpose of acquiring,constructing and installing additions and improvements to and extensions and betterments of,acquiring necessary equipment for or making necessary replacements of equipment or capital improvements to the Waterworks Utility of the City;or "(2)The purpose of exchanging or purchasing and retiring prior to or at their maturity any outstanding water and sewer revenue bonds of the City; -4- lito issue additional and/or refunding water and sewer revenue bonds (herein defined as 'Future Parity Bonds')and to make payments into the Bond Fund for the payment of such Future Parity Bonds from the Revenue of the Waterworks Utility of the City, together with ULID Assessments collected in any ULID hereafter created in connection with the issuance of such Future Parity Bonds sufficient to pay the principal of and interest on such Future Parity Bonds,which such payments may rank equally out of such Revenue of the Waterworks Utility of the City and ULID Assessments collected in ULIDs Nos.1,2,3 and 4 if the City complies with the following conditions: "(1)All payments required by any ordinance of the City pertaining to outstanding water and sewer revenue bonds of the City shall have been made into the respective bond redemption funds for the payment of such water and sewer revenue bonds and no deficiency exists therein; ,.(2)If one or more ULIDs shall be created in connection with the issuance of such Future Parity Bonds,not less than 95%of the total amount of such Future Parity Bonds to be so issued shall be assessed against the properties specially benefited in such ULIDs,and the Assessments paid into the Bond Fund, or,if no ULID is created in connection with the issuance of such Future Parity Bonds,then there shall be on file a certificate from an independent licensed professional engineer experienced in the design,construction and operation of municipal utilities showing that in his professional opinion the annual income available for debt service on the Prior Lien Bonds,the Refunding Bonds,any Future Parity Bonds then outstanding and the Future Parity Bonds proposed to be issued for each year shall be at least equal to the Coverage Requirement (1.35 times that amount of debt service to be paid from operating Revenue and not Assessments)• -5- "(3)The ordinance authorizing any Future Parity Bonds shall require that the Reserve Account be increased within a period of five years after the date of issuance of the Future Parity Bonds to an amount equal to the average annual principal and interest requirements on all Future Parity Bonds, including the Refunding Bonds and the proposed Future Parity Bonds to be issued,including in such amount the principal ~lount of any Term Bonds included in the Future Parity Bonds issue." and WHEREAS,Ordinance No.936,passed by the City Council and approved by the Mayor on May 9,1977,specified and adopted and ordered the carrying out of a system or plan of additions to and betterments and extensions of the Waterworks Utility of the City,created Utility Local Improvement District No.5,and authorized the issuance and sale of water and sewer revenue bonds in the principal sum of approximately $375,000 to provide the funds necessary to carry out such system or plan;and WHEREAS,Ordinance No.962,passed by the City Council and approved by the Mayor on November 14,1977,specified and adopted and ordered the carrying out of a system or plan of additions to and betterments and extensions of the Waterworks Utility of the City, created Utility Local Improvement District No.6,and authorized the issuance and sale of water and sewer revenue bonds in the principal sum of approximately $681,000 to provide the funds necessary to carry out such system or plan,sucn bonds to be combined with the water and sewer revenue bonds authorized to be issued by Ordinance No.936;and .-6- WHEREAS,by Ordinance No.1062,passed by the City Council and approved by the Mayor on August 27,1979,the assessment roll in Utility Local Improvement District No.5 was confirmed in the total amount of $411,800,and by Ordinance No.1067,passed by the City Council and approved by the Mayor on September 10,1979,the assess- ment roll in Utility Local Improvement District No.6 was confirmed in the total amount of $798,350,and the City Council has now deter- mined that $1,200,000 par value of water and sewer revenue bonds of the City should be issued to obtain the funds with which to pay the cost of carrying out such systems or plans of additions to and better- ments and extensions of the Waterworks Utility of the City as specified and adopted in Ordinances Nos.936 and 962;NOW,THEREFORE, THE CITY COUNCIL OF THE CITY OF MARYSVILLE,WASHINGTON,DO ORDAIN,as follows: Section 1.Definitions.As used in this ordinance,the following words shall have the following meanings: (a)"Bond Fund"shall mean that special fund of the City known as the "Water and Sewer Revenue Refunding Bond Fund,1977,11 created by Ordinance No.967 for the payment of the principal of and interest on the 1977 Refunding Bonds and Future Parity Bonds,including the Bonds. (b)111969 Bonds,Issue No.2,11 shall mean the outstanding "Water and Sewer Revenue Bonds,1969,Issue No.2,11 refunded as pro- vided in Ordinance No.967. -7- (c)"1975 Bonds"shall mean the "Water Revenue Bonds,1975," refunded and defeased as provided in Ordinance No.967. (d)"City"shall mean the City of Marysville,Washington. (e)"Future Parity Bonds"shall mean any and all water and sewer revenue bonds of the City issued after the date of the issuance of the Bonds,the payment of the principal of and interest on which constitutes a charge and lien on the Revenue of the Water- works Utility of the City and ULID Assessments equal in rank with the charge and lien upon such Revenue and Assessments required to be paid into the Bond Fund to pay and secure the payment of the principal of and interest on the 1977 Refunding Bonds and the Bonds. (f)"Operating and Maintenance Expenses"shall mean all reasonable expenses incurred by the City in causing the Waterworks Utility of the City to be operated and maintained in good repair, working order and condition,but shall not include any depreciation or taxes levied or imposed by the City. (g)"Principal and Interest Account"shall mean the account of that name created in the Bond Fund for the payment of the principal of and interest on the 1977 Refunding Bonds,the Bonds and Future Parity Bonds. (h)"Prior Lien Bonds"shall mean the outstanding "Water Revenue Bonds,1952,Series B,""Water and Sewer Revenue Bonds,1959," "Water and Sewer Revenue Bonds,1963,""Water and Sewer Revenue Bonds, 1965,""Water and Sewer Revenue Bonds,1967,"and "Water and Sewer Revenue Bonds,1969.~ -8- (i)"1977 Refunding Bonds"shall mean the $2,307,000 par value of "Water and Sewer Revenue Refunding Bonds,1977,"of the City issued for the purposes provided in and pursuant to Ordinance No.967. (j)"Reserve Account"shall mean the account of that name created in the Bond Fund for the purpose of securing the payment of the principal of and interest on the 1977 Refunding Bonds,the Bonds and Future Parity Bonds. (k)"Revenue of the Waterworks Utility of the City"shall mean all the earnings and revenue received by the Waterworks Utility of the City from any source whatsoever,except general taxes,ULID Assessments,proceeds from the sale of City property,and bond pro- ceeds. (1)"Term Bond Haturity Year"shall mean any calendar year in which the bonds of anyone issue or series now or hereafter scheduled to mature (regardless of any reservation of prior redemption rights) is more than 1.25 times the average annual principal maturity of the bonds of such issue or series for the three maturity years immediately preceding such year. (m)"Term Bonds"shall mean those outstanding bonds of any single issue or series scneduled to mature in any Term Bond Maturity Year. (n)"ULID"shall mean utility local improvement district. (0)"ULlD Assessments"shall mean the assessments levied in such ULIDs of the City as may have heretofore been created and as may hereafter be created under state law which may authorize the creation of the same and shall include installments thereof and -9- interest and-vany penalties thereon pledged to be paid into the Bond Fund. (p)"Waterworks Utility of the City"shall mean the waterworks utility of the City,including the sewerage system as a part thereof,and all additions thereto and betterments and extensions ,thereof at any time made. Section 2.For the purpose of providing the funds with which to carry out the systems or plans of additions to and better- ments and extensions of the Waterworks Utility of the City as speci- fied and adopted in Ordinances Nos.936 and 962,and applicable to ULID Nos.5 and 6 heretofore created,there shall be issued and sold $1,200,000 par value of the Bonds (by this ordinances designated and defined as the "Water and Sewer Revenue Bonds,1979").The Bonds shall be dated December 1,1979:shall mature on December 1,1999; shall bear interest at the rate of 8%per annum,payable on December 1,1980,and semiannually thereafter on June I and December 1 of each year,interest to maturity to be evidenced by coupons to be attached to the Bonds with full obligation on the part of the City to pay interest at the bond rate from and after the maturity date until the Bonds with interest are paid in full:shall be in denominations of $5,000 each;and shall be numbered from 1 to 240,inclusive.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 or,at the option of the holder,at either fiscal agency of the State of Washington in Seattle,Washington,or New York,New York.The Bonds shall be payable solely from the Bond Fund.The Bonds shall be a valid claim of the holder thereof only -10- as against the Bond Fund and the fixed amount of the Revenue of the Waterworks Utility of the City and ULID Assessments (including assessments in ULID Nos.1,2,3,4,5 and 6 heretofore created) pledged to such fund,and shall not be a general obligation of the City. Section 3.The City reserves the right to redeem the Bonds prior to their stated maturity date as a whole,or in part in inverse numerical order,on December 1,1989,or on any semiannual interest payment date thereafter at par plus accrued interest to the date fixed for such redemption. Notice of any call for the redemption of any of the Bonds prior to their maturity date shall be published once in the official newspaper of the City not less than 30 nor more than 45 days prior to the interest coupon due date on which the Bonds would be redeemed. Notice of such call for redemption shall also be mailed to Foster & Marshall Inc.and to Terry Thompson &Co.at their principal places of business in Seattle,Washington,or their successors,not less than 30 nor more than 45 days prior to the interest coupon due date upon which the Bonds would be redeemed.In addition,such redemption notices shall also be mailed to Moody's Investors Service,Inc.,and Standard &Poor's Corporation at their offices in New York,New Yor~, but such notices shall not be a condition precedent to any such redemption.Interest on any Bonds so called for redemption shall cease on such interest coupon due date upon payment of the call price into the Bond Fund. -11- The City further reserves the right to purchase any or all of the Bonds in the open market at any time at a price not in excess of par plus accrued interest to the date of such purchase. Section 4.The Bond Fund has heretofore been created by Section 9 of Ordinance No.820,as amended,in the office of the City Treasurer.The Bond Fund has also,by Ordinance No.873,been divided into a "Principal and Interest Account"and a "Reserve Account."So long as any Bonds are outstanding against the Bond Fund,the Treasurer of the City shall set aside and pay into the Bond Fund all ULID Assessments paid in ULID Nos.1,2,3,4,5 and 6 and out of the Revenue of the Waterworks Utility of the City,in addition to the amounts required by Ordinance No.873 to be paid therein for the 1977 Refunding Bonds,certain fixed amounts without regard to any fixed proportion,namely: (a)Into the Principal and Interest Account,at least 20 days prior to each interest payment date, an amount,together with ULID Assessments paid into the Bond Fund,sufficient to pay the interest payable on the Bonds on such interest payment date and on or before December 1 of each year commencing with the month of December 1980,the following additional amounts in the following years: 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 $25,000 30,000 30,000 35,000 35,000 40,000 40,000 45,000 50,000 55,000 60,000 60,000 65,000 70,000 80,000 1995 1996 1997 1998 1999 85,000 90,000 100,000 105,000 100,000 until all of the Bonds have been paid and redeemed.The City covenants that the amounts so accumulated may be invested in any legal investment pending the redemption of the Bonds and shall be used to call and redeem Bonds commencing December 1,1989,in the maximum amount for which funds are available therefor,in the manner and at the times provided in Section 3 of this Ordinance. (b)Into the Reserve Account all ULID Assess- ments now and hereafter collected on the assessment rolls of ULID Nos.1,2,3,4,5 and 6 in excess of the amounts required by subparagraph (a)hereof to be paid into the Principal and Interest Account until a total reserve of $123,140.00 shall be accumulated therein by no later than December 1,1984.In the event that 'such assessment collections are inadequate to accumulate such reserve by December 1,1984,any deficiency shall be made up from the Revenue of the Waterworks Utility of the City and may be made by monthly deposits of not less than $2,052.33 per month. The Reserve Account shall be maintained in such total required reserve amount,except for withdrawals therefrom as authorized herein, at all times so long as any of the Bonds is outstanding,PROVIDED,that when the total amount in the Bond Fund shall equal the total amount of principal and interest for all outstanding bonds payable out of the Bond Fund to the last maturity thereof,no further payment need be made into the Bond Fund,and PROVIDED,FURTHER,that the amount in such Reserve Account may be reduced at any time to an amount not less than the average annual debt service requirements (including the interest payable on but excluding the principal amount of any Term Bonds)for all bonds payable out of the Bond Fund then outstanding. In the event that there shall be a deficiency in the Principal and Interest Account in the BOild Fun~to meet maturing installments of either principal or interest,as the case may be,such deficiency shall -13- ,.,l be made up from the Reserve Account by the withdrawal of cash therefrom for that purpose.Any deficiency created in the Reserve Account by reason of any such withdrawal shall then be made up from the Revenue of the Waterworks Utility of the City and/or ULID Assessments payable into the Bond Fund first available after making necessary provision for the required payments into the Principal and Interest Account. The money in the Reserve Account shall otherwise be held intact and may be applied against the last outstanding bonds payable out of the Bond Fund. All money in the Bond Fund may be kept on deposit in the official bank depository of the City or in any national bank or may be invested and reinvested in United States Government obligations or any other legal investment redeemable at a fixed price and maturing no later than one month prior to the next mandatory call date for bonds subject to mandatory redemption or,if no mandatory call is applicable, one month prior to the final maturity date of the last outstanding bonds payable out of the Bond Fund.Interest earned on any such investment or on such bank deposit shall become a part of the Revenue of the Waterworks Utility of the"City and need not be deposited in the Bond Fund,except that interest earned on any investment of money in the Principal and Interest Account for bonds having a mandatory call provision shall be retained in the Principal and Interest Account and used to call and redeem such bonds. If the City shall fail to set aside and pay into the Bond Fund the amounts which it has obligated itself by this section to set aside and pay therein,the holder of any Bond may bring suit against the City to compel it to do so. -14- The City Council and corporate authorities of the City hereby declare that in fixing the amounts to be paid into the Bond Fund they have considered and nad due regard for Operating and Maintenance Expenses of the Waterworks Utility of the City and have not set aside into the Bond Fund a greater amount or proportion of the Revenue of the Waterworks Utility of the City than in their judgment will be available over and above the Operating ana Maintenance Expenses of the Waterworks Utility of the City and the debt service and reserve require- ments for the presently outstanding Prior Lien Bonds. Section 5.All ULID Assessments in ULIDs Nos.1,2,3,4,5 and 6 and all Revenue of the Waterworks Utility of the City are hereby pledged to the payments required to be made into the Bond Fund,and the 1977 Refunding Bonds and the Bonds shall constitute a charge and lien upon such Assessments and Revenue prior and superior to all other charges and liens whatsoever,excluding Operating and Maintenance Expenses of such Utility payable out of such Revenue,except that the charge and lien upon such Revenue for the 1977 Refunding Bonds and the Bonds shall be junior to the charge and lien upon such Revenue for the outstanding Prior Lien Bonds and the outstanding 1969 Bonds,Issue No.2,provision for the payment and retirement of which has been made irrevocably through the refunding operation authorized by Ordinance No.967,and shall be on a parity with the charge and lien upon such Revenue for any Future Parity Bonds. Section 6.The City hereby covenants with the owner and holder of each of the Bonds as follows: (a)All surplus Revenue derived from the opera- tion of the Waterworks Utility of the City after -15- payment of Operating and Maintenance Expenses,pay- ment of principal of and interest on the outstanding Prior Lien Bonds,the 1977 Refunding Bonds,the Bonds and any Future Parity Bonds hereafter issued and required payments into the respective bond redemption funds and reserve accounts therefor shall only be used for the following purposes: (1)For purchasing necessary equipment, making necessary repairs or replacements to the Waterworks Utility of the City and for other necessary capital improvements thereto. (2)For constructing and installing additions and improvements to and extensions of such Utility that are economically sound. (3)For redemption of outstanding bonds prior to their fixed maturities or purchasing the same in the open market for retirement only. {b )It will at all times maintain and keep the Waterworks Utility of the City and all additions and improvements thereto in good repair,working order and condition,and will at all times operate such Utility and the business in connection therewith in an efficient manner and at a reasonable cost. (c)It will establish,maintain and collect such rates and charges for water and sanitary sewage disposal service so long as any 1977 Refunding Bonds, Bonds and any Future Parity Bonds are outstanding which will provide amounts annually at least equal to 1.35 times the average annual debt service,including the principal of any Term Bonds,on the Prior Lien Bonds,the 1977 Refunding Bonds,the Bonds and any Future Parity Bonds hereafter issued actually paid from such Revenue of the Waterworks Utility of the City and not from ULID Assessments after payment of Operating and Maintenance Expenses (herein called the "Coverage Requirement").In determining the amount of debt service subject to coverage,there shall be deducted from the annual principal and interest required to be paid each year an amount equal to the percentage of the debt service for each year on each issue of outstanding 1977 Refunding Bonds,the Bonds and any Future Parity Bonds equal to the percentage arrived at by dividing the original total amount of the ULID Assess- ments specifically pledged to the Bond Fund in that issue by the original total principal amount of such issue.To slmplify,where ULIDs are involved,only the debt service on that portion of any parity bond issue not covered by ULID Assessments shall be subject to the 35%Coverage Requirement. -16- "" (d)It will not sell,lease,mortgage or in any manner encumber or dispose of all the property of the Waterworks Utility of the City unless provision is made for payment into the Bond Fund of a sum sufficient to pay the principal of and interest on all bonds payable out of the Bond Fund at any time outstanding,and it will not sell,lease,mortgage, or in any manner encumber or dispose of any part of the property of such Waterworks Utility of the City that is used,useful and material to the operation thereof,unless provision is made for replacement thereof,or for payment into the Bond Fund of the total amount of Revenue received which shall not be less than an amount which shall bear the same ratio to the amount of outstanding bonds payable out of the Bond Fund as the Revenue available for debt service for such outstanding bonds for the twelve months preceding such sale,lease,encumbrance or disposal from the portion of the Utility sold, leased,encumbered or disposed of bears to the Revenue available for debt service for such bonds from the entire Utility for the same period.Any such money so paid into the Bond Fund shall be used to retire such outstanding bonds at the earliest possible date. (e)It will,while any of the Bonds remains out- standing,keep proper and separate accounts and records in which complete and separate entries shall be made of all transactions relating to its Waterworks Utility,and it will furnish any subsequent holder or holders of the Bonds,if the Bonds shall be owned by other than a Fund of the City,at the written request of such holder or holders,complete operating and income statements of such Utility in reasonable detail covering any calendar year,showing the financial condition of the water and sewer departments and compliance with the terms and conditions of this ordinance,not more than 120 days after the close of sucn calendar year,and it will grant any holder or holders of at least 25%of the outstanding Bonds the right at all reasonable times to inspect the entire Waterworks Utility of the City and all records, accounts and data of the City relating thereto.Upon request of any holder of any of such Bonds,it will also furnish to such holder a copy of the most recently completed audit of the City's accounts by the State Auditor of Washington or such other audit as is authorized by law in lieu thereof. '(f)It will not furnish water or sanitary sewage disposal to any customer whatsoever free of charge and -17- ·. will promptly take legal action to enforce collection of all delinquent accounts. (g)It will carry the types of insurance on its Waterworks Utility properties in the amounts normally carried by private water and sewer companies engaged in the operation of water and sewerage systems,and the cost of such insurance shall be considered a part of Operating and Maintenance Expenses.If,as,and when,the United States of America or some agency thereof shall provide for War Risk Insurance,the City further agrees to take out and maintain such insurance on all or such portions of such Utility on which such War Risk Insurance may be written in an amount or amounts to cover adequately the value thereof. (h)It will pay all Operating and Maintenance Expenses and otherwise meet the obligations of the City as herein set forth. (i)It will not create any special fund or funds for the payment of other revenue bonds,warrants or obligations,or authorize or issue any other revenue bonds,warrants or obligations which will rank on a parity with or have any priority over the payments into or the money in the Bond Fund,except that it hereby reserves the right for: (1)The purpose of acquiring,constructing and installing additions and improvements to and extensions and betterments of,acquiring necessary equipment for or making necessary replacements of equipment or capital improvements to the Waterworks Utility of the City;or (2)The purpose of exchanging or purchasing and retiring prior to or at their maturity any outstanding water and sewer revenue bonds of the City; to issue additional and/or refunding water and sewer revenue bonds (herein defined as "Future Parity Bonds")and to make payments into the Bond Fund for the payment of such Future Parity Bonds from the Revenue of the Waterworks Utility of the City, together with ULID Assessments collected in any ULIU hereafter created in connection with the issuance of such Future Parity Bonds sufficient to pay the principal of and interest on such Future Parity Bonds, which such payments may rank equally out of such Revenue of the Waterworks Utility of the City and -18- .. ULID Assessments collected in ULIDs Nos.1,2,3,4,5 and 6 if the City complies with the same conditions as specified in paragraph (i)of Section 9 of Ordinance No.967,which section by this reference is incorporated herein ana made a part hereof. Nothing contained in this ordinance shall prevent the City from issuing revenue bonds or warrants which are a charge upon the Revenue of the Waterworks Utility of the City junior or inferior to the pay- ments required to be made therefrom into the Bond Fund and the Reserve Account therein or from pledging the payment of utility local improvement district assessments into the bond redemption fund created for the payment of the principal of and interest on such junior lien bonds as long as such utility local improvement district assessments are levied for improvements constructed from the proceeds of such junior lien bonds. Nothing herein contained shall prevent the City from refunding all or part of the Bonds in accordance with the provisions of the Refunding Bond Act of the State of Washington (RCW Chapter 39.53)as the same may be amended,and it is hereby expressly provided that any SUCH refunding bonds so issued shall have the sa~me lien upon the Revenue of the WaterworKs Utility of the City and ULID Assessments as the Bonus being refunded. (j)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 applicable regulations thereunder. Section 7.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 such then outstanding Bonds and to pay the costs -19- of refunding,and shall nave irrevocably set aside for and pledged to such payment and refunding,money and/or direct obligations of the United States of America or other legal investments sufficient in amount,together witn known earned income from the investments thereof,to make such payments and to accomplish tne 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 Revenue of the waterworks Utility of the City,funds and accounts,including ULID Assessments, obligated to the payment of such Bonds shall thereafter 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 tne 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 Revenue of the Waterworks Utility of the City and ULID Assessments without any priority of lien or charge against that Revenue and Assess- ments or covenants with respect thereto except to be paid therefrom. After the establishing and full funding of such trust account,the City may then apply any money in any other fund or account established for the payment or redemption of the defeased Bonds to any lawful purposes as it shall determine,subject only to the rights of the holders of any other bonds then outstanding. -20- 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 the refunding bonds,the payment of which is not so secured by the refunding plan,shall be included in the computation of coverage for issuance of Future Parity Bonds and the annual computation of coverage for determining compliance with the rate covenants. Section 8.The Bonds snaIl be printed or lithographed on good bond paper,in a bond and coupon form consistent with this ordinance,and shall be signed by the facsimile signature of the Mayor and attested by the manual signature of its City Clerk,and shall have a facsimile reproduction of the seal of the City imprinted thereon, and the interest coupons attached thereto shall bear the facsimile signatures of the Mayor and the City Clerk. Section 9.Pending the printing,execution and delivery to the purchasers of the definitive Bonds,the City may cause to be executed and delivered to such purchasers a single temporary Bond in the principal amount of $1,200,000.Such temporary Bond shall bear the same date of issuance,interest rates,principal payment dates and -21- ..'.",,'... terms and covenants as the definitive Bonds,and shall be issued as a fully registered bond in the name of such purchasers,and shall be in such form as acceptable to such purchasers.Such temporary Bond shall be exchanged for the definitive Bonds as soon as the same are printed,executed and available for delivery. Section 10.Foster &Marshall Inc.and Terry Thompson &Co., jointly,of Seattle,Washington,heretofore offered to purchase the Bonds at a price of $98.00 per each $100.00 of par plUS accrued interest to the date of delivery of the Bonds,the City to furnish the printed Bonds and the unqualified approving legal opinion of Messrs.Roberts, She felman,Lawrence,Gay &Moch,municipal bond counsel of Seattle, Washington,which opinion shall state that bond counsel has not reviewed, and thus expresses no opinion concerning,the completeness or accuracy of any official statement,offering circular or other sales material relating to the issuance of the Bonds or otherwise used in connection with the Bonds.The City Council,being of the opinion that it was in the best interests of tne City to accept such offer,duly accepted the same on October 29,1979,and such acceptance is hereby ratified and confirmed.The Bonds shall,therefore,immediately upon their execution be delivered to the purchasers upon payment for the Bonds in accordance with such offer. Section 11.This ordinance shall take effect and be in force five days after its passage,approval and legal publication. PASSED by the City Council of the City of Marysville,Wash- ington,at a regular open public meeting thereof and APPROVED by the -22- ~.. Mayor this ~th day of November,1979. CITY OF MARYSVILLE,WASHINGTON By ATTEST: FORM APPROVED: -23-