HomeMy WebLinkAbout1814 Issuance and Sale of Water and Sewer Revenue BondsORDINANCE NO. 1814
AN ORDINANCE of the City of Port Townsend, Washington~
providing for the issuance and sale of water and
sewer revenue bonds of the city in the principal
amount of $865,000, to pay part of the cost of
acquiring, constructing and installing certain
additions and improvements to and extensions of
the existing water and sewer system of the city
as authorized by Ordinance No. 1797, providing
and adopting certain covenants and protective
features safeguarding the payment of the principal
thereof and interest thereon; creating a bond
redemption fund and confirming the sale of such
bonds.
WHEREAS, Ordinance No. 1797 of the City of Port Townsend,
Washington (hereinafter called the "City"), passed January 17,
1978, authorized the acquisition, construction and installation
of certain additions and improvements to and extensions of the
existing water and sewer system of the City, and further provided
that a portion of the cost thereof would be provided by the
issuance and sale of water and sewer revenue bonds of the City in
the principal amount of not to exceed $1,245,000; and
WHEREAS, it is deemed necessary and advisable that the City
proceed with the acquisition, construction and installation of
said additions, improvements and extensions, and to pay part of
the cost thereof that it now issue and sell its water and sewer
revenue bonds in the total principal amount of $865,000; and
WHEREAS, the City has heretofore entered into an agreement
with Seattle-Northwest Securities Corporation, Seattle, Washington,
which has agreed to purchase such water and sewer revenue bonds
to be issued;
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of
Port Townsend, Washington, as follows:
Section 1. Plan of Improvements. The first paragraph of
Section 1 of Ordinance No. 1797 of the City is amended to read as
follows:
"The City shall construct and install improvements
to the water supply and distribution system of the City
as follows: The City shall acquire and install water
meters throughout the system, shall construct a 5 million
gallon reservoir, 14,100 lineal feet of transmission line,
a one million gallon per day treatment plant and pump,
shall install a one million gallon reservoir and install
30,400 lineal feet of 6", 8" and 10" transmission line
to serve the Tri-Cities area, and a passage over Portage
Canal. Such project shall be as more fully set forth in
preliminary and final maps, plans, and specifications
therefor prepared by Encon, consulting engineers to the
City, and now on file with the City."
Section 2. Definitions. As used in this ordinance the
following words shall have the following meanings:
a. The word "Assessments" means assessments (including
interest and penalties) levied in any utility local improvement
district of the City which are payable into a bond fund securing
the payment of any water and sewer revenue bonds of the City.
b. The word "Bonds" means the $865,000 principal
amount of water and sewer revenue bonds of the City issued pursu-
ant to this Ordinance.
c. The words "Bond Fund" mean the 1978 Series B Water
and Sewer Revenue Bond Fund created by Section 12 of this Ordinance.
d. The word "City" means the City of Port Townsend, a
municipal corporation duly organized and existing under the laws
of the State of Washington.
e. The words "Construction Fund" mean the special
fund of the City known as the "1978 Water Construction Fund"
created by Ordinance No. 1797 of the City and described in Section
12 of this Ordinance.
f. The words "Costs of Main%enance and Operation"
mean all necessary operating expenses, current maintenance expenses,
expenses of reasonable upkeep and repairs, and insurance and
administrative expense, but excludes depreciation, payments for
debt service or into reserve accounts and costs of capital additions
to or replacements of the System.
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g. The words "Future Parity Bonds" mean all revenue
bonds of the City issued after the date of issuance of the Bonds
and having a lien upon the money in the Revenue Fund for the pay-
ment of the principal thereof and interest thereon equal to the
lien upon the money in such Fund for the payment of the principal
of and interest on the Outstanding Parity Bonds and the Bonds.
h. The words "Gross Revenue" mean all earnings,
revenue and moneys, except assessments, received by the City from
or on account of the operation of the System, including the
income from investments of money in the Revenue Fund and any bond
fund or from any other investment thereof except the income from
investments irrevocably pledged to the payment of revenue bonds
pursuant to a plan of retirement or refunding. The words "Gross
Revenue" shall also include federal or state reimbursements of
operating expenses to the extent such expenses are included as
"Costs of Maintenance and Operation."
i. The words "Net Revenue" mean the Gross Revenue
less the Costs of Maintenance and Operation.
j. The words "Outstanding Parity Bonds" mean the
outstanding water and sewer revenue bonds of the City issued
under date of December 1, 1959, pursuant to Ordinance No. 1379 of
the City and issued under date of January 1, 1967, pursuant to
Ordinance No. 1506 of the City.
j. The words "Outstanding Junior Lien Bonds" mean the
outstanding water and sewer revenue bonds of the City issued under
date of March 2, 1978, pursuant to Ordinance No. 1798 of the City.
k. The words "Parity Bond Redemption Funds" mean the
special fund of the City known as the "Port Townsend 1959 Water
Revenue Bond Redemption Fund" created by Section 6 of Ordinance
No. 1379 and the special fund of the City known as the "Port
Townsend 1967 Water-Sewer Revenue Bond Redemption Fund" crea%ed by
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Section 11 of Ordinance No. 1506, for the payment of the principal
of and interest on the Outstanding Parity Bonds, and shall in-
clude the respective reserve accounts created therein by said
ordinances.
1. The words "Revenue Fund" mean the special fund of
the City designated the "Olympic Gravity Water Fund".
m. The word "System" means the existing water and
sewer system of the City, as such system may be added to, improved
and extended for as long as any of the Bonds are outstanding. It
is hereby provided, however, that the System shall not include
that part of the water supply and distribution system of the City
leased to Crown-Zellerbach Corporation under date of March 15,
1956.
Section 3. Parity Requirements. The City Council hereby
finds and determines, as required by Section 9(b) of Ordinance
No. 1379 and Section 15 of Ordinance No. 1506, as follows:
First, that the Bonds are being issued for the purpose
of acquiring, constructing and installing additions and
improvements to and extensions of the System.
Second, that at the time of the adoption of this ordi-
nance and at the time of the issuance and delivery of the
Bonds there is not nor will there be any deficiency in the
Parity Bond Redemption Funds.
Third, that this ordinance contains the provisions and
covenants required in subparagraph A(2) of Section 15 of
Ordinance No. 1330 of the City as required by Section 9(b)
of Ordinance No. 1379 and the provisions and covenants re-
quired in subparagraph A(2) of Section 15 of Ordinance No.
1506.
Fourth, that the City Council has been assured that prior
to the issuance and delivery of the Bonds it will have on file
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a certificate from Encon signed by Alva W. Bettis, an
independent licensed professional engineer and partner
of said firm, showing that in his professional opinion the
"net income" of the System for each calendar year hereafter
will equal at least 1.4 times the amount required in each
such calendar year for payment of the principal of and
interest on the Outstanding Parity Bonds and the Bonds.
"Net Income" as used in the paragraph immediately above
shall be determined as provided in the second paragraph of
Section 15A(3) (b) of Ordinance No. 1506.
The limitations contained in Section 9(b) of Ordinance No.
1379 and Section 15 of Ordinance No. 1506 having been complied
with or assured, the payments required herein to be made out of
the Revenue Fund to pay and secure the payment of the principal
of and interest on the Bonds shall constitute a lien and charge
upon the money in the Revenue Fund equal in rank to the lien and
charge thereon of the payments required to be made into the Parity
Bond Redemption Funds to pay and secure the payment of the prin-
cipal of and interest on the Outstanding Parity Bonds. The City
hereby covenants that it will not issue the Bonds until it has on
file the above-described certificate from Encon.
Section 4. Authorization of Bonds. For the purpose of pro-
viding part of the money required to acquire, construct and
install those certain additions and improvements to and extensions
of the System as provided in Ordinance No. 1797, the City hereby
authorizes the issuance of the Bonds in the total principal
amount of $865,000.
Section 5. Description of Bonds. The Bonds shall be desig-
nated the "City of Port Townsend Water and Sewer Revenue Bonds,
1978 -- Series B," shall be dated October 1, 1978, shall be in
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coupon form in the denomination of $5,000 each, shall bear interest
payable semiannually on each April 1 and October 1 thereafter at
the rates specified below, and shall be numbered and mature in
the order of their number on October 1 of each year as follows:
Bond Nos. Years Amounts
Interest Rates
1-4 1979 $ 20,000 6.25%
5-8 1980 20,000 6.25%
9-13 1981 25,000 6.25%
14-18 1982 25,000 6.25%
19-24 1983 30,000 6.25%
25-30 1984 30,000 6.25%
31-36 1985 30,000 6.25%
37-42 1986 30,000 6.25%
43-49 1987 35,000 6.25%
50-56 1988 35,000 6.25%
57-64 1989 40,000 6.25%
65-73 1990 45,000 6.25%
74-82 1991 45,000 6.25%
83-91 1992 45,000 6.25%
92-102 1993 55,000 6.25%
103-113 1994 55,000 6.25%
114-124 1995 55,000 6.40%
125-137 1996 65,000 6.40%
138-150 1997 65,000 6.40%
151-173 1998 115,000 6.40%
It is hereby found and declared that the final maturity of
the Bonds does not extend beyond the reasonable life expectancy
of the System.
Both principal of and interest on the Bonds shall be payable
in lawful money of the United States of America by the City
Treasurer at his office or at the option of the holder at either
of the fiscal agencies of the State of Washington in the cities
of Seattle, Washington, and New York, New York. The Bonds shall
be obligations only of the Bond Fund and shall be payable and
secured as provided herein. The Bonds are not general obligations
of the City.
Section 6. Execution of Bonds. The Bonds shall be signed
on behalf of the City with the facsimile or manual signature of
the Mayor and shall be attested by the City Clerk. Each of the
Bonds shall have the seal of the City impressed thereon. Interest
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coupons shall be executed with the facsimile signatures of said
officials.
Section 7. Redemption Privileges. The City hereby reserves
the right to redeem the outstanding Bonds in whole, or in part in
inverse numerical order, on any interest payment date on or after
April 1, 1989, on the following dates at the following prices
expressed as a percentage of the principal amount, plus accrued
interest to the date of redemption:
April 1 and October 1, 1989 102.00%
April 1 and October 1, 1990 101.00%
April 1 and October 1, 1991 100.50%
April 1, 1992 and any interest
payment date thereafter 100.00%
Interest on any Bonds so called for redemption shall cease
on such redemption date unless the same shall not be redeemed
upon presentation made pursuant to such call.
The City may purchase outstanding Bonds in the open market
for retirement only.
Section 8. Redemption Notice. Notice of any such intended
redemption shall be published once in a newspaper or business and
financial journal of general circulation throughout the City of
Seattle, Washington, not more than forty (40) nor less than
thirty (30) days prior to said redemption date and by mailing a
like notice at the same time to Seattle-Northwest Securities
Corporation at its office in Seattle, Washington, or to the succes-
sor in business, if any, of said company at its main office.
In addition to such publication and mailing, notice shall
also be mailed to Standard & Poor's Corporation and to Moody's
Investors Service, Inc. or to their successors, if any. The
mailing of such notice shall not, however, be a condition prece-
dent to such redemption.
Section 9. Form of Bonds. The Bonds shall be in substan-
tially the following form:
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UNITED STATES OF AMERICA
NO.
$5,000
STATE OF WASHINGTON
CITY OF PORT TOWNSEND
WATER AND SEWER REVENUE BOND, 1978 -- SERIES B
The City of Port Townsend, a municipal corporation
organized and existing under and by virtue of the laws
of the State of Washington (herein called the "City"),
hereby acknowledges itself indebted and for value
received promises to pay to bearer, solely from the
sources herein referred to, the principal sum of
FIVE THOUSAND DOLLARS
on the first day of October, 19 , unless redeemed
prior thereto as herein provided, with interest thereon
from the date hereof at the rate of % per annum
until such principal sum is paid or payment has been
duly provided for, payable April 1, 1979, and semiannually
thereafter on the first days of April and October of
each year. Payment of the interest due on or before
the maturity of this bond shall be made only upon
presentation and surrender of the coupons representing
such interest as the same respectively become due.
Both principal of and interest on this bond are
payable in lawful money of the United States of America,
at the office of the Treasurer of the City, in Port
Townsend, Washington, or, at the option of the holder,
at either of the fiscal agencies of the State of Washington
in the cities of Seattle, Washington, and New York, New
York.
The City has reserved the right to redeem such
outstanding Bonds in whole, or in part in inverse
numerical order, on any interest payment date on or
after April 1, 1989, on the following dates at the
following prices expressed as a percentage of the
principal amount, plus accrued interest to the date of
redemption:
April 1 and October 1, 1989
April 1 and October 1, 1990
April 1 and October 1, 1991
April 1, 1992 and any interest
payment date thereafter
102.00%
101.00%
100.50%
100.00%
Interest on any revenue Bonds so called for redemp-
tion shall cease on such redemption date unless the
same shall not be redeemed upon presentation made
pursuant to such call.
Notice of any such redemption shall be given by
one publication thereof in a newspaper or business and
financial journal of general circulation throughout
the City of Seattle, Washington, not more than forty
nor less than thirty days prior to said redemption
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date, and by mailing a like notice at the same time to
Seattle-Northwest Securities Corporation at its office in
Seattle, Washington or to the successor in business, if
any, of said company at its main office.
This bond is one of an issue of one hundred seventy-
three (173) bonds of the City of like amount, date and
tenor except as to number, interest rate, and date of
maturity in the aggregate principal amount of $865,000.
This issue of bonds is authorized by Ordinance No. 1814
of the City (herein called the "Bond Ordinance") for
the purpose of providing money to pay part of the cost
of certain improvements to the water and sewer system
of the City, all in conformity with the laws of the
State of Washington.
This bond and the bonds of this issue are payable
solely from the special fund of the City known as the
"1978 Series B Water and Sewer Revenue Bond Fund" (herein
called the "Bond Fund") created in the office of the Treas-
urer of the City. The City has irrevocably obligated and
bound itself to pay into the Bond Fund out of the Net
Revenue of the System (as defined in the Bond Ordinance) or
from such other moneys as may be provided therefor, certain
amounts necessary to pay and secure the payment of the
principal of and interest on such bonds.
The bonds of this issue are not general obligations
of the City.
The City hereby covenants and agrees with the
owner and holder of this bond that it will keep and
perform all the covenants of this bond and of the Bond
Ordinance to be by it kept and performed.
The City does hereby pledge and bind itself to set
aside from the Revenue Fund out of the Net Revenue of
the System (said terms being defined in the Bond Ordinance)
into said Bond Fund the various amounts required by the
Bond Ordinance to be paid into and maintained in said
Fund, all within the times provided by said Ordinance.
To the extent more particularly provided by the
Bond Ordinance the amounts so pledged to be paid out of
the Net Revenue of the System into said Bond Fund shall
be a lien and charge upon the Net Revenue of the System
equal in rank to the lien and charges of the revenue
bonds of the City issued under date of December 1,
1959, pursuant to Ordinance No. 1379 of the City and
issued under date of January 1, 1967, pursuant to
Ordinance No. 1506 of the City, and any water and sewer
bonds hereafter issued by the City on a par therewith,
and superior to all other charges of any kind or nature
whatsoever.
The City has further bound itself to maintain the
System in good repair, working order and condition, to
operate the same in an efficient manner and at a reason-
able cost, and to fix, maintain and collect rates and
charges for as long as any of the bonds of this issue
are outstanding that will make available, for the
payment of the principal thereof and interest thereon
as the same shall become due, Net Revenue (as defined
in the Bond Ordinance), in an amount which will be
equal to at least 1.40 times the amount required each
year hereafter to pay the principal of and interest on
all of such bonds together with payment of the principal
of and interest on all December 1, 1959, and January 1,
1967, bonds, and any future water and sewer bonds
issued on a parity of lien therewith by the City, then
outstanding.
The pledge of Net Revenue of the System and other
obligations of the City under the Bond Ordinance may be
discharged at or prior to the maturity or redemption of
the bonds of this issue upon the making of provisions
for the payment thereof on the terms and conditions set
forth in the Bond Ordinance.
Reference to the Bond Ordinance and any and all
modifications and amendments thereof is made for a
description of the nature and extent of the security
for the bonds of this issue, the funds or revenues
pledged, and the terms and conditions upon which such
bonds are issued.
It is hereby certified and declared that this bond
and the bonds of this issue are issued pursuant to and
in strict compliance with the Constitution and laws of
the State of Washington and ordinances of the City, and
that all acts, conditions and things required to be
done precedent to and in the issuance of this bond have
happened, been done and performed.
IN WITNESS WHEREOF, the City has caused this bond
to be executed in its name with the facsimile signature
of the Mayor, to be attested by the manual signature of
the City Clerk, the corporate seal of the City to be
impressed hereon, and the interest coupons attached
hereto to be signed with the facsimile signatures of
said officials, this first day of October, 1978.
CITY O~.T TO, SEND, WASHINGTON
ATTEST:
City Clerk
The interest coupons attached to the Bonds shall be in
substantially the following form:
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NO. $
On the first day of October, 19 , unless the
bond to which this coupon is appurtenant shall have been
duly called for prior redemption and the redemption price
shall have been paid or duly provided for, the City of Port
Townsend (the "City") will pay to bearer at the office of
the City Treasurer, in Port Townsend, Washington, or, at the
option of the holder, at either of the fiscal agencies of
the State of Washington, in the cities of Seattle, Washington,
and New York, New York, the amount shown hereon in lawful
money of the United States of America, solely out of the
sources referred to in said bond and Ordinance No. 1814 of
the City, being the special fund of the City entitled "1978
Series B Water and Sewer Revenue Bond Fund," said amount
being the semi-annual interest due that day on its
Water and Sewer Revenue Bond, 1978-Series B, dated
October 1, 1978, and numbered -
ATTEST:
CITY/O%PORT TOWNSEND, WASHINGTON
~~ Mayor
City Clerk
Section 10. Pledge of Revenues. The Bonds, together with the
interest thereon, shall be payable from the Net Revenue of the
System and that portion of said Net Revenue which is specified in
Section 12 hereof is hereby pledged and set aside out of the
Revenue Fund into the Bond Fund.
Said amounts so pledged are hereby declared to be a lien and
charge upon such Net Revenue and the money in the Revenue Fund
equal to the lien and charge thereon to secure and pay the princi-
pal of and interest on the Outstanding Parity Bonds and any Future
Parity Bonds of the City and superior to all other charges of any
kind or nature.
Section 11. Investment of Moneys. All money in the Bond Fund
or Reserve Account may be kept in cash or invested in any legal in-
vestment maturing not later than 20 years from date of purchase, and
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in no event maturing later than the last maturity of the Bonds
outstanding at the time of such purchase. Interest earned on or
profits made from the sale of such investments shall be deposited
in and become a part of the Bond Fund.
Section 12. Protection and Disposition of Funds. The "1978
Water Construction Fund" (hereinbefore defined as the "Construc-
tion Fund") has been heretofore established in accordance with
Ordinance No. 1797 of the City. The proceeds of sale of the
Bonds (except for accrued interest, if any, which shall be paid
into the Bond Fund) and all moneys received from the federal
government and the State of Washington to pay part of the cost of
the improvements authorized by Ordinance No. 1797 shall be deposited
in the Construction Fund. Interest earned on Construction Fund
moneys shall be deposited in the Construction Fund.
The City's share of any unliquidated damages and any moneys
paid by defaulting contractors or their sureties shall be deposited
in the Construction Fund to assure completion of all of the
additions and improvements to and extensions of the System to be
made.
The following funds and accounts shall be continually main-
tained, except as otherwise provided, for as long as any of the
Bonds remain outstanding:
A. Revenue Fund. The Gross Revenue shall be set aside
into the Revenue Fund.
B. Bond Fund. There is hereby created a "1978 Series B
Water and Sewer Revenue Bond Fund" (hereinbefore defined as the
"Bond Fund") for the purpose of paying and securing the payment
of the principal of and interest on the Bonds. The City shall
set aside and transfer therein from the Revenue Fund on or before
the 20th day of each month, commencing with the month of October,
1978, and continuing each month for as long as any of the Bonds
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are outstanding: (i) An amount equal to at least one-sixth of
the interest to become due and payable on the next interest
payment date ~on all.of the Bonds then outstanding; and (ii) An
amount equal to at least one-twelfth of the principal of the
Bonds to become due and payable on the next principal payment
date.
If the City for any reason shall fail to make such monthly
transfers, then an amount equal to the deficiency shall be set
apart and deposited in the Bond Fund out of the Revenue Fund in
the ensuing month or months, which amount shall be in addition to
the regular monthly deposit required during such succeeding month
or months.
If there ever shall be accumulated in the Bond Fund amounts
in excess of the requirements thereof during the next 12 months
for payment of the principal of and interest on the Bonds outstand-
ing, such excess may be used by the City to purchase or call
Bonds for redemption prior to their fixed maturities as authorized
herein, or may be invested as provided in Section 11 hereof.
C. Reserve Account. A Reserve Account is hereby created
in the Bond Fund for the purpose of securing the payment of the
principal of and interest on the Bonds. The City hereby covenants
and agrees that by October 1, 1983, it will pay into the Reserve
Account, by periodic equal payments which shall be made at least
annually, a sum equal to the average annual amount required for
debt service on the Bonds.
In the event the Bonds outstanding are ever refunded, the
money set aside in the Reserve Account to secure the payment
thereof may be used to retire Bonds or may be transferred to any
other reserve account which may be created to secure the payment
of any bonds issued to refund the Bonds.
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In the event the money in the Bond Fund over and above the
amount therein set aside and credited to the Reserve Account is
insufficient to meet maturing installments of either interest on
or principal of and interest on the Bonds, such deficiency shall
be made up from the Reserve Account by the withdrawal of money
therefrom. Any deficiency created in the Reserve Account by
reason of any such withdrawal shall then be made up from money
in the Fund first available after making necessary provision for
the payments required to be made into the Bond Fund to pay the
principal of and interest on the Bonds next coming due.
Section 13. Other Covenants and Agreements. The City hereby
covenants with the owner and holders of each of the Bonds for as
long as any of the same remain outstanding as follows:
A. That it will establish, maintain and collect rates and
charges for water and for sanitary sewage collection and disposal
service for as long as any of the Outstanding Parity Bonds, the
Bonds, and any Future Parity Bonds are outstanding that will
make available for the payment of the principal of and interest
on all of such bonds as the same shall become due an amount equal
to at least 1.4 times the amount required each calendar year here-
after for the payment of such principal and interest.
The amount "available for the payment of the principal of
and interest on all of such bonds as the same shall become due"
is hereby defined as the "gross revenue of the System, less neces-
sary costs of maintenance and operation thereof but before
depreciation."
B. That it will at all times keep and maintain the System
in good repair, working order and condition, and will at all times
operate the same and the business in connection therewith in an
efficient manner and at a reasonable cost.
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C. That it will not sell nor dispose of the System nor any
of the properties thereof (unless such properties are no longer
used, useful or necessary in the operation thereof) unless provi-
sion is made for payment into the Bond Fund of a sum sufficient
to redeem and retire all of the Bonds in accordance with the
terms thereof.
D. That it will not furnish water or sanitary sewage collec-
tion and disposal service to any customer whatsoever free of charge,
and will promptly take all legal action or actions necessary to
enforce collection of any and all delinquent accounts.
E. That it will maintain complete books and records relating
to the operation of the System and its financial affairs, and will
cause such books and records to be audited annually at the end of
each fiscal year, and cause to be prepared an annual financial
and operating statement, said statement to be mailed to any holder
of the Bonds upon request.
F. It will carry fire and extended coverage insurance on
the System as is ordinarily carried on the property of similar
public utilities by private companies engaged in the operation of
the same, to the full insurable value thereof, and will also
carry adequate public liability insurance, war risk insurance, if
it becomes available, and other kinds of insurance as under good
practices are ordinarily carried on the properties of similar
public utilities by private companies engaged in the operation of
the same. The premiums paid for all such insurance shall be
regarded and paid as a Cost of Maintenance and Operation of the
System.
G. That it will promptly collect all sewer charges, determine
in a timely manner all delinquencies and take all necessary legal
action to enforce collection of such delinquencies.
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Section 14. Adequacy of Revenues. The corporate authorities
of the City hereby declare in fixing the amounts to be paid into
the Bond Fund as hereinbefore provided that they have exercised
due regard for the Costs of Maintenance and Operation of the
System, and have not obligated the City to set aside and pay into
the Bond Fund a greater amount of money in the Revenue Fund than
in their judgment will be available over and above such Costs of
Maintenance and Operation, and the cost of debt service on the
Outstanding Bonds and the Outstanding Junior Lien Bonds now
outstanding.
Section 15. Defeasance. In the event that money and/or
"Government Obligations," as such obligations are now or here-
after defined in Chapter 39.53 R.C.W., maturing or having guaran-
teed redemption prices at the option of the holder at such time
or times and bearing interest to be earned thereon in amounts
(together with such money, if any) sufficient to pay at maturity
or redeem and retire part or all of the Bonds in accordance with
their terms, are hereafter irrevocably set aside in a special
account and pledged to effect such payment, redemption and retire-
men~, then no further payments need be made into the Bond Fund or
any account therein for the payment of the principal of and
interest on the Bonds so provided for and such Bonds and appurte-
nant coupons shall then cease to be entitled to any lien, benefit
or security of this ordinance, except the right to receive the
funds so set aside and pledged, and such Bonds and appurtenant
coupons shall no longer be deemed to be outstanding hereunder, or
under any ordinance authorizing the issuance of bonds, warrants
or other indebtedness of the City.
Section 16. Issuance of Future Parity Bonds. The City
hereby further covenants and agrees with the owner and holder of
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each of the Bonds for as long as any of the same remain outstand-
ing as follows:
A. That it will not issue any Future Parity Bonds except
that it reserves the right for:
First, the purpose of acquiring, constructing and
installing additions and improvements to and extensions of,
acquiring necessary equipment for, or making necessary
replacements or repairs and capital improvements to the
System, or
Second, the purpose of refunding or purchasing and
retiring at or prior to their maturity any outstanding
revenue bonds or coupon warrants of the City
to issue additional or refunding Future Parity Bonds therefor and
to create a special fund or funds for the payment of the principal
thereof and interest thereon into which fund or funds payments
may be made out of the Revenue Fund sufficient to pay the principal
of and interest on such additional or refunding Future Parity
Bonds and to maintain the reserves required therefor, which such
payments may rank equally with the payments out of such Revenue
Fund into the Parity Bond Redemption Funds, the Bond Fund and the
Reserve Account, upon compliance with the following conditions:
(1) That at the time of the issuance of such additional
or refunding Future Parity Bonds there is no deficiency in the
Parity Bond Redemption Funds, the Bond Fund and the Reserve
Account or in any bond redemption fund and reserve account which
may have been created to pay and secure the payment of the prin-
cipal of and interest on any outstanding Future Parity Bonds.
(2) That the ordinance providing for the issuance of
such additional or refunding Future Parity Bonds and providing
for the payment of the principal thereof and interest thereon out
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of a bond redemption fund shall create a reserve account in such
bond redemption fund for the purpose of making up any deficiency
therein, and such ordinance shall further provide for the payment
into such reserve account within five years from the date of the
issuance of such additional or refunding Future Parity Bonds of
a sum at least equal to the average annual amount required for
debt service on such additional or refunding Future Parity Bonds.
(3) (a) That at the time of the issuance of such
additional or refunding Future Parity Bonds the City shall have
on file an audit from a certified public accountant showing that
the net income of the System for a period of any twelve consecu-
tive months out of the fifteen months immediately preceding the
month of delivery of such additional or refunding Future Parity
Bonds shall have been at least 1.4 times the amount required each
calendar year thereafter for the payment of the principal of and
interest on the Outstanding Parity Bonds and the Bonds outstand-
ing, any outstanding Future Parity Bonds, and such additional or
refunding Future Parity Bonds. Or
(b) In the event that the certified audit required
in subparagraph (3) (a) immediately above may not be obtained, such
additional or refunding Future Parity Bonds may still be issued on
a parity with the Outstanding Parity Bonds, the Bonds and any out-
standing Future Parity Bonds if at the time of the issuance of
such additional or refunding Future Parity Bonds the City shall
have on file a certificate from an independent licensed professional
engineer or engineering firm showing that in his or its professional
opinion the net income of the System for each future calendar
year will equal at least 1.4 times the amount required for each
such future calendar year for the payment of the principal of and
interest on the Outstanding Parity Bonds, the outstanding Bonds,
any outstanding Future Parity Bonds, and such additional or
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refunding Future Parity Bonds. The words "net income" used in
this subparagraph shall be construed as the gross revenue of the
System, including all additions and improvements thereto and
extensions thereof to be constructed or installed out of the
proceeds of the sale of such additional Future Parity Bonds, less
necessary projected expenses of maintenance and operation of the
System, but before depreciation, and such "net income" may in-
clude any increase in revenues to be derived by an increase in
rates and charges made for water and sanitary sewage collection
and disposal service authorized by the City Council up to the
time of delivery of such additional or refunding Future Parity
Bonds.
B. The City further reserves the right to issue refunding
Future Parity Bonds and to create a special fund or funds for the
payment of the principal thereof and interest thereon into which
fund or funds payments may be made from the Revenue Fund suffi-
cient to pay the principal thereof and interest thereon and to
maintain any reserves which may be required therefor, which such
payments may rank equally with the payments required to be made
out of the Revenue Fund into the Parity Bond Redemption Funds and
the Bond Fund and Reserve Account upon compliance with the
following conditions:
(1) Such refunding Future Parity Bonds or the proceeds
of their sale are used to exchange with or purchase and retire
prior to their maturities an equal or greater principal amount
of the Outstanding Parity Bonds, the Bonds, or any Future Parity
Bonds, or any part of the bonds of any of said issues; and
(2) The issuance of such refunding Future Parity Bonds
and retirement of outstanding bonds does not require a greater
amount to be paid out of the Revenue Fund in any calendar year
thereafter for principal and interest over the life of the refunding
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Future Parity Bonds to be issued than required to be paid out of
the Revenue Fund for principal and interest over the life of the
bonds to be redeemed; or
(3) If the maturities of such refunding Future Parity
Bonds are shorter in time than such bonds being refunded and the
total interest cost to be paid over the life of the refunding
Future Parity Bonds, plus any premium required to redeem the
bonds to be refunded, is less than the total interest cost over
the life of the latter bonds.
C. Nothing herein contained shall prevent the City from
issuing any revenue bonds or warrants which are a charge upon the
money in the Revenue Fund junior or inferior to the payments
required to be made into the Parity Bond Redemption Funds and
the Bond Fund and the Reserve Account.
Section 17. Sale of Bonds. The Bonds shall be sold to
Seattle Northwest Securities Corporation in accordance with its
offer dated September 19, 1978, and the City's acceptance dated
September 19, 1978. The acceptance by the City of said offer is
hereby ratified and confirmed.
The proper officials of the City are hereby authorized and
directed to do all things necessary for the prompt execution and
delivery of the Bonds and for the proper use and application of
the proceeds of sale thereof.
Section 18. Supplements and Amendments.
A. The City Council from time to time and at any time may
adopt an ordinance or ordinances supplemental hereof, which
ordinance or ordinances thereafter shall become a part of this
ordinance, for any one or more or all of the following purposes:
(1) To add to the covenants and agreements of the City
in this ordinance contained other covenants and agreements there-
after to be observed, which shall not adversely affect the
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interests of the holders of any Bonds in any material respect, or
to surrender any right or power herein reserved to or conferred
upon the City.
(2) To make such provisions for the purpose of curing
any ambiguities or of curing, correcting or supplementing any
defective provision contained in this ordinance in regard to such
matters or questions as the Commission may deem necessary or
desirable and not inconsistent with this ordinance and which
shall not adversely affect the interest of the holders of Bonds
in any material respect.
Any such supplemental ordinance of the Council may be
adopted without the consent of the holders of any Bonds at any
time outstanding, notwithstanding any of the provisions of sub-
section B of this section.
B. With the consent of the holders of not less than 65% in
aggregate principal amount of the Bonds at the time outstanding,
the City Council may adopt an ordinance or ordinances supple-
mental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of
this ordinance or of any supplemental ordinance; provided, however,
that no such supplemental ordinance shall:
(1) Extend the fixed maturity of any Bonds, or reduce
the rate of interest thereon, or extend the time of payments of
interest from their due date, or reduce the amount of the princi-
pal thereof, or reduce any premium payable on the redemption
thereof, without the consent of the holder of each bond so
affected; or
(2) Reduce the aforesaid percentage of bondholders
required to approve any such supplemental ordinance, without the
consent of the holders of all of the Bonds then outstanding.
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It shall not be necessary for the consent of bondholders
under this subsection B to approve the particular form of any
proposed supplemental ordinance, but it shall be sufficient if
such consent shall approve the substance thereof.
C. Upon the adoption of any supplemental ordinance pur-
suant to the provisions of this section, this ordinance shall be
deemed to be modified and amended in accordance therewith, and
the respective rights, duties and obligations of the City under
this ordinance and all holders of Bonds outstanding hereunder
shall thereafter be determined, exercised and enforced there-
under, subject in all respects to such modification and amend-
ments, and all the terms and conditions of any such supplemental
ordinance shall be deemed to be part of the terms and conditions
of this ordinance for any and all purposes.
Section 19. Severability. If any one or more of the
covenants and agreements provided in this ordinance to be performed
on the part of the City shall be declared by any court of competent
jurisdiction to be contrary to law, then such covenant or covenants,
agreement or agreements, shall be null and void and shall be
deemed separable from the remaining covenants and agreements in
this ordinance and shall in no way affect the validity of the
other provisions of this ordinance or of any Bonds.
Section 20. Effective Date. This ordinance shall become
effective five days from and after its passage, approval and
publication.
PASSED by the Council of the City of Port Townsend, Wash-
ington, at a meeting of said Council held this /?~day of
1978, and approved by the Mayor on said date.
CITY OF PORT TOWNSEND,
WASHING~
Mayor
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Attest:
City Clerk
Approved as to Form:
Published
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