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HomeMy WebLinkAboutO-1657 - Bond issuance (Special)" , 1-,{;3 o-"J~I~#(l,., CITY OF MARYSVILLE,WASHINGTON ORDINANCE NO./657 AN ORDINANCE of the City of Marysville, Washington,relating to the waterworks utility of the City,including the system of sewerage as a part thereof;adopting a system or plan of additions to and betterments and extensions of the Comprehensive Water System Plan;authorizing the issuance of not to excjed,$5,000,000 par value of water and sewer reve- nue bonds for,the purpose of providing a part of the furim.s with'which to pay the costs of carrying out such,'improvements;authorizing and providing for the issuance of bond anticipation notes pending the issuance of such revenue bonds;creatjng a water and sewer bond anticipation note fund;and providing for the sale of such notes to Harper,McLean &Company, Seattle,Washington. WHEREAS,the City of Marysville,Washington (the "City"), by Ordinance No.385 passed September 2,1952,combined the sewerage system of the City and all additions and improvements thereto with the waterworks utility of the City,and the sewer- age 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 com- bined sewerage system and water system of the City,together with all additions thereto and betterments and extensions thereof hereafter made;and WHEREAS,the City by Resolution No.1053 and Ordinance No.1444 adopted the City of Marysville Comprehensive Water System Plan dated February,1982,and Hammond,Collier & Wade-Livingstone,consulting engineers to the City,prepared a Comprehensive Water Plan Addendum dated April,1984 (the "Addendum"),and both the Comprehensive Water System Plan and the Addendum were approved by the Department of Social and Health Services on May 15,1984 and a Supplement to that Plan and Addendum entitled Supplemental Engineering Study Water Source Development (the "Supplement")was prepared by Hammond, Collier &Wade-Livingstone in August 1984;and WHEREAS,the City by Resolution No.937 adopted the Lower Snohomish River Basin Waste Water Facilities Planning Study for the Marysville Subregion (the "201 Facilities Plan"),and Hammond,Collier &Wade-Livingstone has prepared a Marysville Wastewater Treatment Report,1987,supplementing and updating the 201 Facilities Plan and recommending methods of upgrading and improving the City'S wastewater treatment lagoon;and WHEREAS,the City Council has determined it to be in the best interests of the City that the improvements as hereinafter described be carried out as a system and plan of additions to and betterments and extensions of the Plan and the Waterworks utility of the City;and WHEREAS,the City Council deems it to be in the best inter- ests of the City that the City borrow money and issue water and sewer revenue bond anticipation notes in anticipation of the sale of water and sewer revenue bonds herein authorized for the purpose of providing the funds with which to pay a part of the - 2 - cost of carrying out such system or plan of additions and bet- terments;and WHEREAS,Harper,McLean &Company,Seattle,Washington,has submitted an offer to purchase such short-term bond anticipation notes on the terms and conditions hereinafter set forth;NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MARYSVILLE,WASHINGTON,DO ORDAIN as follows: Section 1.Adoption of Plan of Additions.The City speci- fies and adopts the following system and plan of additions to and betterments and extensions of the Waterworks utility of the City consisting of constructing an intertie transmission main to the City of Everett's water system to provide a new source of water for the City,other water transmission mains,upgrade of the water filtration system on the Stillaguamish,and upgrade of the City's sewage lagoon,all as described in the Comprehensive Water System Plan,the Addendum,the Supplement,the 201 Facilities Plan and in the Marysville Wastewater Treatment Report,1987. The above-referenced additions to and betterments and extensions of the Waterworks Utility of the City collectively shall be referred to herein as the "Plan of Additions." There shall be included in the foregoing,the acquisition and installation of all necessary valves,fittings,couplings, connections,equipment and appurtenances,the acquisition of any - 3 - easements,rights-of-way and land that may be required and the performance of such work as may be incidental and necessary. The City Council will make or authorize such changes of details or other changes in the Plan of Additions not affecting such Plan of Additions and not substantially altering the pur- pose thereof.No money shall be spent on construction of the Plan of Additions until the City has complied with all appli- cable requirements of the State Environmental Policy Act. All the foregoing shall be in accordance with the plans and specifications therefor prepared by Hammond,Collier & Wade-Livingstone Associates,Inc.,the City's consulting engi- neer,the City Engineer,or such other consulting engineering firm as may be retained by the City for that purpose. Section 2.Findings as Revenue.The gross revenue and benefits to be derived from the operation and maintenance of the Waterworks Utility of the City at the rates to be charged for water and sanitary sewage disposal service will be,in the judgment of the City Council,more than sufficient to meet all expenses of operation and maintenance thereof,together with the additions thereto and extensions and betterments thereof herein provided for,and to permit the setting aside into a special fund out of the gross revenue of the Waterworks Utility of the City of sufficient amounts to pay the interest on the water and sewer revenue bonds herein authorized to be issued and on all presently outstanding water and sewer revenue bonds of the City - 4 - as such interest becomes due and payable,and to pay and redeem all of those bonds at maturity. Section 3.Life of Plan of Additions.The life of the foregoing Plan of Additions is declared to be more than thirty years. Section 4.Estimated Cost.The estimated cost of the acquisition,construction and installation of the Plan of Addi- tions is declared to be,as nearly as may be,the amount of $5,000,000,which shall be paid from the proceeds received from the issuance and sale of the bonds authorized by this ordinance and from any other funds of the City legally available and to be used therefor. Section 5.Authorization of Bonds.For the purpose of paying part of the costs of the Plan of Additions,the City shall issue its water and sewer revenue bonds in the amount of not to exceed $5,000,000.The exact amount,date,price,denom- inations,form,covenants and lien position of and interest rate or rates on such bonds shall be specified later by the ordinance providing for the definitive bonds. Section 6.Use of Proceeds;Authorization of Short Term Borrowing.Proceeds received from the issuance and sale of the water and sewer revenue bonds herein authorized to be issued shall be deposited in the Utility Construction Fund established in the office of the City Finance Director,which fund shall be used for the purpose of paying the costs of carrying out the Plan of Additions and of paying the costs and expenses connected - 5 - therewith.The City,through its proper officers and agents, shall proceed with the making of those improvements and the calling of bids therefor in the manner provided by law.Pending the sale of the water and sewer revenue bonds herein authorized to be issued,the City may issue interest-bearing warrants drawn against such construction fund to pay duly approved costs incurred in carrying out such improvements,such warrants to be paid out of the proceeds received from the sale of the bonds herein authorized to be issued and from any other money avail- able to the City to finance the improvements,or the City may issue short-term bond anticipation notes in lieu of such interest-bearing warrants. Section 7.Creation of Note Fund;Description of Notes. There is created and established in the office of the City Finance Director a special fund to be known as the Water and Sewer Revenue Bond Anticipation Note Fund,1988 (the "Note Fund").Pending the issuance of the water and sewer revenue bonds herein authorized,the City shall issue and sell its Water and Sewer Revenue Bond Anticipation Notes,1988 (the "Notes")in the principal amount of $4,000,000.The Notes shall be in fully registered form;shall be dated December 15,1988;shall mature on December 1,1991;shall be in the denomination of $5,000 or any integral mUltiple thereof;shall be numbered separately in the manner and with any additional designation as the Bond Registrar (collectively,the fiscal agencies of the State of Washington located in Seattle,Washington,and New York,New - 6 - York)deems necessary for purposes of identification;and shall bear interest at the rate of 6.90%per annum (computed on the basis of a 360-day year of twelve 30-day months),payable on December 1,1989.and semiannually thereafter on each succeeding June 1 and December 1. The City Council finds that the fixing of the above inter- est rate is in the best interest of the City. Section 8.Registration and Transfer of Notes.The Notes shall be issued only in registered form as to both principal and interest and recorded on books or records maintained by the Note Registrar (the "Note Register").The Note Register shall con- tain the name and mailing address of the owner of each Note and the principal amount and number of each of the Notes held by each owner. Notes surrendered to the Note Registrar may be exchanged for Notes in any authorized denomination of an equal aggregate principal amount.Notes may be transferred only if endorsed in the manner provided thereon and surrendered to the Note Regis- trar.Any exchange or transfer shall be without cost to the owner or transferee.The Note Registrar shall not be obligated to exchange or transfer any Note during the fifteen days preced- ing the maturity date of the Notes or any prior redemption date. Section 9.Payment of Notes.Both principal of and inter- est on the Notes shall be payable in lawful money of the united States of America.Interest on the Notes shall be paid by checks or drafts mailed on each interest payment date to the - 7 - registered owners at the addresses appearing on the Note Regis- ter on the fifteenth day of the month preceding the interest payment date.Principal of the Notes shall be payable upon presentation and surrender of the Notes by the registered owners at either of the principal offices of the Note Registrar at the option of the owners. Section 10.Optional Redemption and Open Market Purchase of Notes.The City reserves the right and option to redeem the Notes prior to their stated maturity date as a whole or in part (and by lot in such manner as the Note Registrar shall deter- mine)on June 1,1990,and on the first day of each succeeding month,at par plus accrued interest to the date fixed for redemption. Portions of the principal amount of any Note,in install- ments of $5,000 or any integral multiple thereof,may be redeemed.If less than all of the principal amount of any Note is redeemed,upon surrender of that Note at either of the prin- cipal offices of the Note Registrar,there shall be issued to the registered owner,without charge therefor,a new Note (or Notes at the option of the registered owner)in any of the denominations authorized by this ordinance in the aggregate total principal amount remaining unredeemed. The City further reserves the right and option to purchase any or all of the Notes in the open market at any time at a price not in excess of par plus accrued interest to the date of purchase. - 8 - All Notes purchased or redeemed under this section shall be cancelled. Section 11.Notice of Redemption.The City shall cause notice of any intended redemption of Notes to be given not less than 30 nor more than 45 days prior to the date fixed for redemption by first-class mail,postage prepaid,to the registered owner of any Note to be redeemed at the address appearing on the Note Register at the time the Note Registrar prepares the notice,and the requirements of this sentence shall be deemed to have been fulfilled when notice has been mailed as so provided,whether or not it is actually received by the owner of any Note.Interest on Notes called for redemption shall cease to accrue on the date fixed for redemption unless the Note or Notes called are not redeemed when presented pursuant to the call. Section 12.Failure to Redeem Notes.If any Note is not redeemed when properly presented at its maturity or call date, the City shall be obligated to pay interest on that Note at the same rate provided in the Note from and after its maturity or call date until that Note,both principal and interest,is paid in full or until sufficient money for its payment in full is on deposit in the Note Fund and the Note has been called for pay- ment by giving notice of that call to the registered owner of each of those unpaid Notes. Section 13.Payment Source and Pledge to Redeem Notes. Both principal of and interest on the Notes shall be payable -9 - solely out of the Note Fund from the proceeds of the water and sewer revenue bonds herein authorized to be deposited in such fund,from the proceeds of other short-term obligations issued to redeem previously issued and then outstanding notes,or from other money legally available and to be used therefor,except that semiannual interest due may be paid from the proceeds of the Notes.The City irrevocably pledges to redeem the Notes on their maturity date from the proceeds of such bonds,additional short-term obligations or other money available for that purpose.The Notes are not general obligations of the City. The Notes may be paid from the revenue of the Waterworks utility of the City but shall be subordinate to the claims on that revenue of the normal expenses of maintenance and operation of the Waterworks Utility of the City and any outstanding water and sewer revenue bonds of the City and bonds issued on a parity of lien therewith. Section 14.Form and Execution of Notes.The Notes shall be printed or lithographed on good bond paper in a form consis- tent with the provisions of this ordinance and state law,shall be signed by the Mayor and 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. Only Notes bearing a Certificate of Authentication in the following form,manually signed by the Note Registrar,shall be -10 - valid or obligatory for any purpose or entitled to the benefits of this ordinance: CERTIFICATE OF AUTHENTICATION This note is one of the fully registered City of Marysville,Washington,Water and Sewer Revenue Bond Anticipation Notes,1988,described in the Note Ordinance. WASHINGTON STATE FISCAL AGENCY Note Registrar By Authorized Officer The authorized signing of a Certificate of Authentication shall be conclusive evidence that the Notes so authenticated have been duly executed,authenticated and delivered and are entitled to the benefits of this ~rdinance. If any officer whose facsimile signature appears on the Notes ceases to be an officer of the City authorized to sign notes before the Notes bearing his or her facsimile signature are authenticated or delivered by the Note Registrar or issued by the City,those Notes nevertheless may be authenticated, issued and delivered and,when authenticated,issued and deliv- ered,shall be as binding on the City as though that person had continued to be an officer of the City authorized to sign notes.Any Note alsO may be signed on behalf of the City by any person who,on the actual date of signing of the Note,is an officer of the City authorized to sign notes,although he or she did not hold the required office on the date of issuance of the Notes. -11 - Section 15.Note Registrar.The Note Registrar shall keep,or cause to be kept,at its principal corporate trust office,sufficient books for the registration and transfer of the Notes which shall at all times be open to inspection by the City.The Note Registrar is authorized,on behalf of the City, to authenticate and deliver Notes transferred or exchanged in accordance with the provisions of the Notes and this ordinance, to serve as the City'S paying agent for the Notes and to carry out all of the Note Registrar's powers and duties under this ordinance and City Ordinance No.1405 establishing a system of registration for the City's bonds and obligations. The Note Registrar shall be responsible for its representa- tions contained in the Note Registrar's Certificate of Authenti- cation on the Notes.The Note Registrar may become the owner of Notes with the same rights it would have if it were not the Note Registrar and,to the extent permitted by law,may act as depos- itory for and permit any of its officers or directors to act as members of,or in any other capacity with respect to,any com- mittee formed to protect the rights of Note owners. Section 16.Preservation of Tax Exemption for Interest on Notes.The City covenants that it will take all actions neces- sary to prevent interest on the Notes 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 Notes or other funds of the City treated as proceeds of the Notes at any time during the term of the Notes which will -12 - cause interest on the Notes to be included in gross income for federal income tax purpoSes.The City certifies that it has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a note issuer whose arbitrage certifications may not be relied upon. Section 17.Small Governmental Issuer Arbitrage Rebate Exemption and Designation of Notes as "Qualified Tax-Exempt Obligations."The City finds and declares that (a)it is a duly organized and existing governmental unit of the State of Washington and has general taxing power;(b)no Note which is part of this issue of Notes is a "private activity bond"within the meaning of Section 141 of the United States Internal Revenue Code of 1986,as amended (the "Code");(c)at least 95%of the net proceeds of the Notes will be used for local governmental activities of the City (or of a governmental unit the juris- diction of which is entirely within the jurisdiction of the City);(d)the aggregate face amount of all tax-exempt obligations (other than private activity bonds)issued by the City and all entities subordinate to the City (including any entity which the City controls,which derives its authority to issue tax-exempt obligations from the City or which issues tax-exempt obligations on behalf of the City)during the cal- endar year in which the Notes are issued is not reasonably expected to exceed $5,000,000;and (e)the amount of tax-exempt obligations,including the Notes,designated by the City as "qualified tax-exempt obligations"for the purposes of Section -13 - 265(b)(3)of the Code during the calendar year in which the Notes are issued does not exceed $10,000,000.The City therefore certifies that it is an issuer which qualifies for the small governmental issuer arbitrage rebate exemption under Section 148(f)(4)(C)of the Code and designates the Notes as "qualified tax-exempt obligations"for the purposes of Section 265(b)(3)of the Code. Section 18.Notes Negotiable.The Notes shall be nego- tiable instruments to the extent provided by RCW 62A.8-102 and 62A.8-105. Section 19.Disposition of Note Proceeds.The principal proceeds received from the sale and delivery of the Notes shall be paid into the Utility Construction Fund (the "Construction Fund")and used for the purposes specified in Section 6 of this ordinance.Until needed to pay the costs of the Plan of Addi- tions and costs of issuance of the Notes,the City may invest principal proceeds temporarily in any legal investment,and the investment earnings may be retained in the Construction Fund and be spent for the purposes of that fund. Section 20.Approval of Note Purchase Contract.Harper, McLean &Company of Seattle,Washington,has presented a pur- chase contract (the "Purchase Contract"),to the City offering to purchase the Notes under the terms and conditions provided in the Purchase Contract,which written Purchase Contract is on file with the City Clerk and is incorporated herein by this reference.The City Council finds that entering into the -14 - Purchase Contract is in the City's best interest and therefore accepts the offer contained therein and authorizes its execution by City officials. The Notes will be printed at City expense and will be delivered to the purchaser in accordance with the Purchase Contract,with the approving legal opinion of Foster Pepper & Shefelman,municipal bond counsel of Seattle,Washington, regarding the Notes printed on each Note.Bond counsel shall not be required to review and shall express no opinion concern- ing the completeness or accuracy of any official statement, offering circular or other sales material issued or used in connection with the Notes,and bond counsel's opinion shall so state . .The proper City officials are authorized and directed to do everything necessary for the prompt delivery of the Notes to the purchaser and for the proper application and use of the proceeds of the sale thereof. Section 21.Temporary Note.Pending the printing,execu- tion and delivery to the purchaser of definitive Notes,the City may cause to be executed and delivered to the purchaser a single temporary Note in the total principal amount of the Notes.The temporary Note shall bear the same date of issuance,interest rate,maturity date and terms and covenants as the definitive Notes,shall be issued as a fully registered Note in the name of the purchaser,and otherwise shall be in a form acceptable to the purchaser.The temporary Note shall be exchanged for -15 - definitive Notes as soon as they are printed,executed and available for delivery. Section 22.Effective Date of Ordinance.This ordinance shall take effect and be in force from and after its passage and five days following its publication as required by law. PASSED by the City Council and APPROVED by the Mayor of the City of Marysville,Washington,at a regular open public meeting thereof,this fifth day of December,1988. ATTEST: APPROVED AS TO FORM: 1 6 3 Om -16 -