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HomeMy WebLinkAboutO-1946 - Bond issuance (Special)CITY OF MARYSVILLE,WASHINGTON ORDINANCE NO. /'lifh AN ORDINANCE relating to the waterworks utility of the City and supplementing Ordinance No.1945,providing for the issuance of Water and Sewer Refunding Revenue Bonds, 1993,of the city. WHEREAS,by Ordinance No.1945 (the "Bond Ordinance"), reference to section 1 of which is made for the definitions of certain capitalized terms used and not otherwise defined herein, the city authorized the issuance and sale of the Bonds and provided for the purchase from the Bond Insurer of the Municipal Bond rnsurance Policy insuring the prompt payment of the principal of and interest on the Bonds and agreed to conditions for obtaining that policy;and WHEREAS,certain conditions for obtaining that policy were not provided for in Ordinance No.1945 and have been requested by the Bond Insurer to be authorized by this ordinance (the "Supplemental Bond Ordinance")and the Council deems it to be in the best interest of the City to thus satisfy such conditions;NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MARYSVILLE,WASHINGTON,DO ORDAIN as follows: section 1.The City Council finds and declares that this Supplemental Bond Ordinance will cure omissions in the Bond Ordinance not adverse to the owner of any Bonds or Future Parity Bonds and that the adding of the agreements,limitations and restrictions set forth in this Supplemental Bond Ordinance are not contrary to or inconsistent with the Bond Ordinance.It is further 0081117.01 -1- found and declared that this Supplemental Bond Ordinance is not materially adverse to the registered owners of the Bonds and does not involve a change described in Subsection 24 (c)of the Bond Ordinance. section 2.The provisions for variable rate parity debt set forth on Attachment A,made a part hereof by this reference,shall apply to any variable rate Future parity Bonds. section 3.The requirements set forth in Attachment B,made a part hereof by this reference,shall apply to Alternate Security. section 4.Permissible investments for funds available for investment in the funds created by the Bond Ordinance shall be as set forth on Attachment C,made a part hereof by this reference. section 5.Effective Date..This .ordinance shall take effect and be in force five days after its passage,approval and legal pUblication. PASSED by the city Council at a regular open pUblic meeting thereof this 26th day of April,1993. CITY OF MARYSVILLE,WASHINGTON By ATTEST: FORM APPROVED: city Attorney 008II 17.01 -2- MBIA Attachment A GENERAL DOCUMENT PROVISIONS FOR VARIABLE RATE DEBT TO BE ISSUED ON A PARITY WITH MBIA-INSURED BONDS 1.Debt Service Res~r~e Fund should be funded to maximum permitted amount with interest calculated at the lesser of the 30-year Revenue Bond Index (published by The Bond Buyer no more than two weeks prior to date of sale)or the maximum allowable. 2.Rate Covenant for Rate -Setting ..Purposes:interest should be calculated at the lesser of the maximum short-term rate prevailing in the preceding 12 months or the cap rate. 3.Additional Bonds Test:interest should be the calculated at the 30-year Revenue Bond Index (published by ~he Bond Buyer no more than two weeks prior to date of sale). 4.A cap on the bond rate and the bank rate (liquidity provider)must be specified at the time of issuance of variable rate debt. 5.Any accelerated principal payments due to the bank Or any interest due in excess of the bond interest rate to the bank must be subordinate to the payment of debt service on all parity bonds.(See G.below) 6.The liquidity provider must be rated in the highest short term rating category assigned by Standard &Poor's and Moody's. 7.If the Additional Bonds Test.is c e Lcu.Lat.ed assuming interest at the cap bank rate and assuming the accelerated principal repayment schedule due to the ba nk,then the acceleration of principal payments and excess interest due to the bank referred to in paragraphE above may be on a parity with the payment of debt service on all parity bonds. 8..In transactions where there is an aqent.z enhancer (other than MElA).. the trustee,tender agent (if any),paying agent (if any)must 6JL commercial banks with trust powers. The remarketing agent must have trust powers if they are responsible for holding monies or receiving bonds.Alternately ..the documents may provide that if the remarketing agent is removed..resigns or is unable to perform its du t i es ,the trustee must assume the responsibilities of remarketing agent until a substitute acceptable toMBIA is found. MBIA Attachment B GENERAL DOCUMENT PROVISIONS FOR SURETY BONDS AND LOCS IN PLACE OF DSRFS II.As an alternative to I and in all cases where a surety bond or letter of credit is replacing a DSRF in an MBlA-insured issue,the following requirements apply: 1.The surety bond must be from an insurance company that is rated in the highest rating category by Standard &Poor's and Moody's ,or the letter of credit must be from a bank approved by MBIA. 2.MBIA reserves the right to periodically review the LOC bank and if found unacceptable,require that: a.anotherLOC must be found;within 45 days,or b.the issuer must drQw.uponi~Qet LOC to fund the DSR with cash,or c ..the issuer must fund the DSR with cash over an acceptable period of time (to be negotiated on a deal-by-deal basis). 3.The surety bond or LOC must be unconditional and irrevocable.If the surety bond or LOC can expire earlier than the final maturity of the bonds,the provisions for 'funding a reserve should be examined .for acceptabili ty. 4.After the surety bond has been drawn down,any monie-s available to repay the surety bond or LOC provider must ~-be used to reinstate the surety bond or LOC to its original amount.Any interest or fees due to the surety orLOC provider,other than reinstatement,must be subordinate to any amounts required to be paid for the benefit of the bondholders. MBIA Attachment C LIST OF PERMISSIBLE INVESTMENTS FOR INDENTURED FUNDS A4 Direct obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Depar-tment;of the Treasury,and CATS and TGRS)or obligations the .p r Lnc Lpe.L of and interest on w~ich,are uncond Lt.Lon a.l Ly-gU<1ranteed by the United States of Arne r Lca , B.Bonds,debentures,notes or o~her evidence of indebtedness issued or guaranteed by any'of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): 1.U.S.Export-Import Bank Direct obligations or ownership (Eximbank) fully guaranteed certificates of beneficial 2.Farmers Home Administration (FmHA) Certificates of beneficial ownership 34 Federal Financing Bank 4.Federal Housing Administration Debentures (FHA) 5.General Services Administration Participation certificates·. 6.Government National Mortgage Association (GNMA or "Ginnie Mae") GNMA -guaranteed mortgage-backed bonds GNMA -guaranteed pass-through obligations (not acceptable fOr certain cash-flow sensitive issues.) 7.U4S.Maritime Administration Guaranteed Title XI financing 8.U.S.Department of Housing and Urban Development (HUD) Project Notes Local Authority Bonds New Communities Debentures -U4S4 government guaranteed debentures U.S.Public Housing Notes and Bonds U.S.government guaranteed public housing notes and bonds c.Bonds,debentures, guaranteed by any government agencies been stripped by the notes or other evidence of indebtedness issued or of the following non-full faith and credit u.s. (stripped securities are only permitted if they have agency itself): 1.Federal Home Loan Bank System Senior debt obligations 2.Federal Home Loan Mortqage Corporation (FHLMC or uFreddie Mac") Participation Certificates Senior debt obligations 3.Federal National Mortgage Association (FNMA or "Fannie Mae") Mortgage-backed securities and senior debt obligations MB'IA Student Loan Marketing Association (SLMA or "Sallie Mae") Senior debt obligations 5.Resolution Funding Corp.(REFCORP)obligations 6.Farm Credit System Consolidated systemwi0€bonds and notes D.Money 1940, 1933, market funds registered under the Federal Envas t.rne nt;Company whose shares'are registered under the Federal Securities and having a rating by S&P of AAAm-G; AAAm;or AAm. Act of Act of E.Certificates of (A)and/or (B) banks,savings collateral must perfected first deposit secured at all times by collateral described in above.Such certificates must be issued by commercial and loan associations or mutual savings banks.The be held by a third party and the bondholders must have a security interest in the collateral. F.Certificates of deposit,savings accounts,deposit accounts or money market deposits which are fully insured by FDIC or FSLIC. G.Investment Agreements,including GIC's,aCGeptable to MBIA. H.Commercial paper rated,at the time of purchase,"Prime -I"by Moody's and "A-I"or better by S&P. L Bonds or notes Moody'sand S&P such agencies. issued by any in one of the state;or municipality which are rated two highest rating categories assigned by by J.Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured,uninsured and unguaranteed obligation rating of "Pr Lme -1"or "A3'"or better by Moody's and "A-I"or "Atfor better by S&P. K.Repurchase agreements provide for the transfer of securities from a dealer bank or securities firm (seller/borrower)to a municipal entity (buyer/lender),and the transfer of cash from a municipal entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to,the municipal entity in exchange for the securities at a specified date. Repurchase Agreements must satisfy the following criteria or be approved by MBIA. 1.Rapos must be between the municipal entity and a dealer bank or securities firm a.Primarv dealers on the Federal Reserve reporting dealer list which are rated A or better by Standard &Poor's Corporation and Moody's Investor Services,or b.Banks rated "A" Moody's Investor or ·above Services. by Standard &Poor's Corporation and MBIA 2.The written reDo contract must include the following: a.Securities which are acceptable for transfer are: (1)Direct U.S.governments,or (2)Federal agencies backed by the full faith and credit of the U.S.go~ernment (and FNMA &FHLMC) b.The term of the repo may be uptQ 30 days c.The collateral must be delivered to the municipal entity,trustee (if trustee is not supplying the collateral)or third party acting as agent for the trustee (if the trustee is supplying the collateral)before/simultaneous with payment (perfection by possession of certificated securities). d.Valuation of Collateral (1)The securities must be current market price ~ valued weekly. accrued interest marked to market at (a)The value of collateral must be equal to l04'\,of the amount of cash transferred by the municipal entity to the dealer bank or ..secur-Luy ,f Lrm under the r epo plus accrued interest.If the val~e of securities held as collateral slips below 104%of the value of the cash transferred by municipality,then additional cash and/or acceptable securities must be transferred.If,however,the securities used as collateral are FNMA or FHLMC,then the value of collateral must equal 105%. 3.Legal opinion which must be delivered to the municipal entity: a.Repo meets guidelines under state law for,legal investment of public funds. Additional Notes (i)Any state administered statutorily permitted permitted investment. pool investment fund in or required to invest which the will be issuer deemed is a (ii)DSRF investments should be valued at fair market value and marked to market at least once per year.DSRF investments may not have maturities extending beyond 5 years.