HomeMy WebLinkAbout2305 Issuance and Sale of Junior Lien Water and Sewer Revenue Bonds AN ORDINANCE of the City of Port Townsend,
Washington, providing for the issuance and sale of
junior lien water and sewer revenue bonds of the
city in the principal amount of $6,820,000, to pay
part of the cost of acquiring, constructing and
installing certain additions and improvements to
the sewage treatment facility; fixing the date,
form, terms, maturities and covenants of such
bonds; providing certain covenants; creating
certain funds; and authorizing the sale of such
bonds.
WHEREAS, the City Council of the City of Port Townsend,
Washington (the "City"), has determined that it is in the best
interest of the City to acquire, construct and install certain
additions and improvements to and extensions of the wastewater
..breatment facility of the City; and
WHEREAS, pursuant to Ordinance No. 1379, the City issued its
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revenue bonds under date of January 1, 1967 (the "1967 Bonds") of
which $400,000 principal amount is currently outstanding; and
WHEREAS, pursuant to Ordinance No. 1814, the City issued its
revenue bonds in the aggregate principal amount of $865,000 under
date of October 1, 1978 (the "1978 Bonds") of which $455,000
principal amount is currently outstanding; and
WHEREAS, it appears to the City Council that it is in the
best interests of the City and its ratepayers that $6,820,000
aggregate principal amount of revenue bonds (the "Bonds") be
authorized, issued and sold to finance the improvements to the
treatment facility with a lien on the revenue of the water and
sewer system of the City junior to the lien of the 1967 and 1978
Bonds; and
WHEREAS, Seattle-Northwest Securities Corporation, of
Seattle, Washington (the "Purchaser"), has offered to purchase
the Bonds under the terms and conditions set forth in the
purchase contract dated June 29, 1992 (the "Purchase Contract"),
a copy of which is attached hereto as Exhibit A and incorporated
herein; and
WHEREAS, it appears to the City Council that it is in the
best interests of the City that the Bonds be sold to the
Purchaser on the terms set forth in the Purchase Contract;
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of
Port Townsend, Washington, as follows:
Section 1. Definitions. As used in this ordinance the
following words shall have the following meanings:
"AMBAC Indemnity" means AMBAC Indemnity Corporation, a
Wisconsin-domiciled stock insurance company.
"Annual Debt Service" for any fiscal year or calendar year
means the sum of:
(a) the interest due in such year on all outstanding
Bonds and Future Parity Bonds excluding, however, interest to be
paid from the proceeds of Bonds and Future Parity Bonds,
(b) the principal of all outstanding Serial Bonds due
in such year, and
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(c) the Sinking Fund Requirement, if any, for such
year, calculated as of the Sinking Fund Requirement Date for such
year°
If the interest rate on any such bonds is other than a fixed
rate, the rate applicable at the time of the computation shall be
used.
"Average Annual Debt Service" means the amount determined by
dividing (a) the sum of all interest and principal to be paid on
outstanding Bonds and Future Parity Bonds from the date of
determination to the last maturity date of such Bonds and Future
Parity Bonds, by (b) the number of fiscal years or calendar years
from and including the fiscal year or calendar year in which the
determination is made to the last fiscal year or calendar year in
which the sum of (i) the principal amount of Serial Bonds
maturing in such fiscal year plus (ii) the Sinking Fund
Requirement for such fiscal year, exceeds 4% of the principal
amount of Bonds and Future Parity Bonds outstanding as of the
date of determination.
"Assessments" means assessments (including interest and
penalties) levied in any utility local improvement district of
the City for the acquisition or construction of additions and
improvements to and extension of the System, if such assessments
are pledged to be paid into the Bond Fund.
"Assessment Income" means the principal of and interest on
assessments to be collected in utility local improvement
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districts in which assessments have been levied and pledged to be
paid into the Bond Fund. Assessment Income shall be allocated to
the years in which it would be received if the unpaid balance of
each assessment roll were paid in the remainin9 number of
installments with interest on the declining balance at the times
and at the rate provided in the ordinance confirmin9 the
assessment roll.
"Bond Fund" means the Water and Sewer Revenue Bond Fund
created by Section l0 of this ordinance.
"Bond Register" means the books or records maintained by the
Bond Registrar for the purpose of registration of the Bonds.
"Bond Registrar" or "Registrar" means the fiscal agency of
the State of Washington in either Seattle, Washington, or New
York, New York, whose duties include the registration and
authentication of the Bonds, maintenance of the Bond Register,
effectin9 transfer of ownership of the Bonds, and payin9 the
principal of, premium, if any, and interest on the Bonds.
"Bond Year" means the one year period (or shorter period
from the date of issue) that ends on May
"Bonds" mean the $6,820,000 principal amount of water and
sewer revenue bonds of the City issued pursuant to this
ordinance.
"City" means the City of Port Townsend, a municipal
corporation duly organized and existing under the laws of the
State of Washington.
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"Code" means the federal Internal Revenue Code of 1986, as
amended, and applicable regulations.
"Computation Date" means the Installment Computation Date or
the Final Computation Date.
"Construction Fund" means the special fund of the City known
as the "1992 Wastewater Treatment Plant Construction Fund"
created by Section 8 of this ordinance.
"Costs of Maint'enance and Operation" means all necessary
operating expenses, current maintenance expenses, expenses of
reasonable upkeep and repairs, and insurance and administrative
expenses, but excludes depreciation, payments for debt service or
into reserve accounts and costs of capital additions to or
replacements of the System, taxation by the City or payments in
lieu of taxes.
"Council" means the general legislative authority of the
City as the same shall be duly and regularly constituted from
time to time.
"Final Computation Date" means the date that the last Bond
is discharged. A Bond is discharged on the date that all amounts
due under the terms of the Bond are actually and unconditionally
due if cash is available at the place of payment and no interest
accrues with respect to the Bond after such date.
"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 payment of the
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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 Bonds.
"Gross Revenue" means all earnings, revenue and moneys,
except Assessments, received by the City from or on account of
the operation of the System, including proceeds from the sale,
lease or other disposition of any of the properties or facilities
of the System, and 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."
"Installment Computation Date" means the last day of the
fifth Bond Year and of each succeeding fifth Bond Year.
"Municipal Bond Insurance Policy" means the municipal bond
insurance policy issued by AMBAC Indemnity insuring the payment
when due of the principal of and interest on the Bonds as
provided therein.
"Net Revenue" means the Gross Revenue less the Costs of
Maintenance and Operation.
"Nonpurpose Payments" mean, in general, any payment with
respect to an investment allocated to the Bonds. The following
types of payments are specifically included:
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(a) Direct Payments. The amount of gross proceeds of the
Bonds directly used to purchase the investment. Direct payments
do not include brokerage commissions, administrative expenses or
similar expenses.
(b) Constructive Payments. The fair market value (as of
the date of allocation to the Bonds) of any investment that was
not directly purchased with gross proceeds of the Bonds, but
which is allocated to'the Bonds.
(c) Payments of Rebatable Arbitrage. Any payment of
Rebatable Arbitrage if such payment is made no later than the due
date for such payment.
"Nonpurpose Receipts" mean, in general, any receipt with
respect to an investment allocated to the Bonds. The follow±ng
types of receipts are specifically included:
(a) Actual Receipts. Any amount actually or constructively
received with respect to an investment. Actual receipts may not
be reduced by selling commissions, administrative expenses or
similar expenses.
(b) Disposition Receipts. An amount determined by treating
an investment that ceases to be allocated to the Bonds (other
than by reason of a sale or retirement) as if sold for fair
market value on the date that the investment ceases to be
allocated to the Bonds.
(c) Installment Date Receipts. The fair market value (or,
for fixed rate investments, present value) of all investments
allocated to the Bonds at the close of business on any
Computation Date.
(d) Imputed Receipts. Any receipts that are required to be
imputed and taken into account pursuant to Section 1.148-5T of
the Temporary Income Tax Regulations or any successor Temporary
or Final Income Tax Regulations.
"Outstanding Senior Lien Bonds" mean the outstanding 1967
and 1978 water and sewer revenue bonds of the City issued under
date of January 1, 1967, pursuant to Ordinance No. 1506 and under
date of October 1, 1978
respectively.
"Permitted Investments"
pursuant to Ordinance No. 1814,
means any investments permitted
under the laws of the State of Washington as amended from time to
time; provided, that, so long as the Bonds are insured by AMBAC
Indemnity, "Permitted Investments" means:
(1) Cash (insured at all times by the Federal Deposit
Insurance Corporation or otherwise collateralized with
obligations described in paragraph (2) below;
(2) Direct obligations of (including obligations issued or
held in book entry form on the books of) the Department
of the Treasury of the United States of America;
(3) Obligations of any of the following federal agencies
which obligations represent full faith and credit of
the United States of America, including:
(a) Export-Import Bank,
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(b) Farmers Home Administration,
(c) General Services Administration,
(d) U.S. Maritime Administration,
(e) Small Business Administration,
(f) Government National Mortgage Association (GNMA),
(g) U.S. Department of Housing & Urban Development
(PHA's), and
(h) Federal Housing Administration;
(4) Bonds, notes or other evidences of indebtedness rated
"AAA" by Standard & Poor's Corporation and "Aaa" by
Moody's Investors Service issued by the Federal
National Mortgage Association or the Federal Home Loan
Mortgage Corporation with remaining maturities not
exceeding three years;
(5) U.S. dollar denominated deposit accounts, federal funds
and banker's acceptances with domestic co~f~Lercial banks
which have a rating on their short term certificates of
deposit on the date of purchase of "A-l" or "A-l+" by
Standard & Poor's and "P-l" by Moody's and maturing no
more than 360 days after the date of purchase.
(Ratings on holding companies are not considered as the
rating of the bank);
(6) Commercial paper which is rated at the time of purchase
in the single highest classification, "A-l+" by
Standard & Poor's and "P-l" by Moody's Investors
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(7)
(8)
Service and which matures not more than 270 days after
the date of purchase;
Investments in a money market fund rated "AAAm" or
"AAAm-G" or better by Standard & Poor's Corporation;
Pre-refunded municipal obligations defined as follows:
any bonds or other obligations of any state of the
United States of America or of any agency,
instrumentality or local governmental unit of any such
state which are not callable at the option of the
obligor prior to maturity or as to which irrevocable
instructions have been given by the obligor to call on
the date specified in the notice; and (a) which are
rated, based on the escrow, in the highest rating
category of Standard & Poor's Corporation and Moody's
Investors Service, Inc. or any successors thereto; or
(b) (i) which are fully secured as to principal and
interest and redemption premium, if any, by a fund
consisting only of cash or obligations described in
paragraph (1) above, which fund may be applied only to
the payment of such principal of and interest and
redemption premium, if any, on such bonds or other
obligations on the maturity date or dates thereof or
the specified redemption date or dates pursuant to such
irrevocable instructions, as appropriate, and
(ii) which fund is sufficient, as verified by a
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23~
nationally recognized independent certified public
accountant, to pay principal of and interest and
redemption premium, if any, on the bonds or other
obligations described in this paragraph on the maturity
date or dates thereof or on the redemption date or
dates thereof or on the redemption date or dates
specified in the irrevocable instructions referred to
above, as appropriate;
(9) Investment agreements approved in writing by AMBAC
Indemnity Corporation with notice to Standard & Poor's
Corporation;
(10) The Washington State investment pool; and
(11) Other forms of investments approved in writing by AMBAC
with notice to Standard & Poor's Corporation.
"Value" of Permitted Investment, which shall be determined
as of the end of each month, means that the value of any
investments shall be calculated as follows:
(a) as to investments the bid and asked prices of which are
published on a regular basis in The Wall Street Journal
(or, if not there, then in The New York Times): the
average of the bid and asked prices for such
investments so published on or most recently prior to
such time of determination;
(b) as to investments the bid and asked prices of which are
not published on a regular basis in The Wall Street
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Journal or Th~ New York Times: the average bid price
at such time of determination for such investments by
any two nationally recognized government securities
dealers (selected by the City in its absolute
discretion) at the time making a market in such
investments or the bid price published by a nationally
recognized pricing service;
(c) as to certificates of deposit and bankers acceptances:
the face amount thereof, plus accrued interest; and
(d) as to any investment not specified above, the value
thereof established by prior agreement between the City
and AMBAC Indemnity Corporation.
"Project" means the plan or system of additions to and
betterments and extensions of the System specified and adopted in
Section 3 of this ordinance.
"Purchaser" means Seattle-Northwest Securities Corporation,
of Seattle, Washington.
"Qualified Insurance" means any unconditional municipal bond
insurance policy or surety bond issued by any insurance company
licensed to conduct an insurance business in any state of the
United States or by a service corporation acting on behalf of one
or more such insurance companies, which insurance company or
service corporation is rated in one of the two highest rating
categories by either Moody's Investors Service, Inc. or
Standard & Poor's Corporation, provided, that, as of the time of
issuance of such policy or surety bond, such insurance company or
companies maintain a policy owner's surplus in excess of
$500,000,000.
"Qualified Letter of Credit" means any irrevocable letter of
credit issued by a bank for the account of the City and for the
benefit of the owners of the Bonds and Future Parity Bonds, pro-
vided that such bank maintains an office, agency or branch in the
United States, and provided further, that, as of the time of
issuance of such letter of credit, such bank is currently rated
in one of the two highest rating categories by either Moody's
Investors Service, Inc. or Standard & Poor's Corporation.
"Rebate Computation Certificate" means the certificate
executed by the City setting forth the methodology for
computation of Rebatable Arbitrage.
"Reserve Account" means that account in the Bond Fund
created by Section 10 of this ordinance.
"Reserve Account Requirement" means, with respect to the
Bonds or Future Parity Bonds, an amount equal to the lesser of
(a) 125% of Average Annual Debt Service on such bonds, (b) 10% of
the net proceeds of such series of bonds, and (c) maximum Annual
Debt Service.
"Revenue Fund" means the special fund of the City designated
the Water and Sewer Fund.
"Serial Bonds" means Bonds or Future Parity Bonds other than
Term~Bonds.
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"Senior Lien Bond Redemption Funds" means the special funds
of the City known as the "Port Townsend 1967 Water-Sewer Revenue
Bond Redemption Fund" and "1978 Series B Water and Sewer Revenue
Bond Fund" for the payment of the principal of and interest on
the Outstanding Senior Lien Bonds, and shall include the
respective reserve accounts therein.
"Sinking Fund Requirement" means, for any fiscal year or
calendar year, the principal amount of Term Bonds required to be
purchased, redeemed or paid at maturity in such year as
established by the ordinance of the City authorizing the issuance
of such Term Bonds.
"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
Port Townsend Paper Corporation. The "System" shall include any
surface or storm water drainage utility of the City if the City
Council shall determine by ordinance to combine such drainage
utility with the System.
"Term Bonds" means the Bonds maturing in 2012 and any Future
Parity Bonds identified as Term Bonds in the ordinance
authorizing the issuance thereof, the payment of the principal of
which is provided for by a mandatory schedule of deposits of
money equal (in the aggregate) to the full principal amount of
such Term Bonds, into the Bond Fund, and by a mandatory
redemption schedule corresponding (as to time and amounts) to
such mandatory schedule of deposits.
Section 2, Findings.
A. B~S~ Interests of the City. The public interest,
welfare, convenience and necessity require the acquisition by
construction or purchase by the City of the additions to and
betterments and extensions of the System described in Section 3
for the purpose of furnishing the City and the inhabitants
thereof and any other persons, within or without its limits, with
a system of wastewater treatment.
B. Junior Li~n Obligations. Ordinance Nos. 1506 and 1814
permit the City to issue revenue bonds which are a charge upon
the money in the Revenue Fund junior to the payments required to
be made into the Senior Lien Bond Redemption Funds. The Bonds
shall have a lien on Gross Revenues senior to the lien of the
Water and Sewer Revenue Bonds, 1978.
Section 3. Plan of Improvements.
The City shall acquire, construct, install and equip
upgrades to the System's existing wastewater treatment facility
to meet current State of Washington, Department of Ecology
standards, including the redesign of the headworks building and
relocation of the influent pump station; redesign and upgrade of
the oxidation ditch; conversion of two existing spiragester
basins to aerobic digesters; and changing the method of
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disinfection from gaseous chlorine feed to sodium hypochlorite.
To the extent money is available, the City may construct Water
System improvements, including a watershed control program and
rerouting certain primary water lines.
The hereinabove plan for providing additions to and
betterments and extensions of the System (the "Project") are
described with particularity in the plans and specifications
prepared by the City, and said plans and specifications are now
on file with the City and available for public inspection.
The Project shall be constructed and installed with all
necessary equipment and appurtenances. The City may make such
changes in the Project as may be found necessary or desirable,
either prior to or during the course of acquisition and
construction. The City shall acquire by purchase, lease or
condemnation all property, both real and personal, or any
interest therein, or rights of way and easements necessary to
carry out the Project.
The estimated cost of the acquisition, construction and
installation of the Project is hereby declared to be as near as
may be the sum of $10,530,000, including costs of issuing the
Bonds, of which $6,820,000 shall be financed from the proceeds of
the sale of the Bonds, and the balance of the Project shall be
financed out of other funds available to the City as may be
hereafter directed by the City Council.
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Section 4. Authorization and De~cripti0n of Bon~.
For the purpose of providing part of the money necessary to
carry out the Project, the City shall issue the Bonds. The Bonds
shall be known as "City of Port Townsend Water and Sewer Revenue
Bonds, 1992," shall be dated July 1, 1992, shall be in
denominations of $5,000 each, or integral multiples thereof,
provided that no Bond shall represent more than one maturity,
shall be fully registered as to principal and interest, and shall
be numbered separately in such manner and with any additional
identification as the Bond Registrar deems necessary for
identification. The Bonds shall bear interest at the rates set
forth in the Purchase Contract attached hereto as Exhibit A and
incorporated herein. Interest shall be payable December 1, 1992,
and semiannually thereafter on the first days of June and
December of each year until the Bond bearing such interest has
been paid or its payment duly provided for. The Bonds shall
mature on December i of each of the following years and in the
following amounts:
Maturity Years
1993 $200,000
1994 210,000
1995 215,000
1996 225,000
1997 235,000
1998 250,000
1999 260,000
2000 275,000
2001 290,000
2002 310,000
2003 325,000
2004 345,000
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NS~ 92/~6/29
23o
2005 370,000
2006 390,000
2007 415,000
2012 2,505,000
Both principal of and interest on the Bonds shall be payable
in lawful money of the United States of America. Interest on the
Bonds shall be paid by check or draft mailed (on the date such
interest is due) to the registered owners at the addresses
appearing on the Bond Register on the 15th day of the month
preceding the interest payment date. Principal of the Bonds
shall be payable upon presentation and surrender of the Bonds by
the registered owners at the principal office of the fiscal
agency of the State of Washington in Seattle, Washington or New
York, New York, at the option of such owners. Principal of and
interest on the Bonds shall be payable solely from the Bond Fund.
The Bonds are not general obligations of the City or of the State
of Washington or any political subdivision thereof.
The Bond Register shall be maintained by the Bond Registrar,
and shall contain the name and mailing address of the registered
owner or owners of each Bond or nominee of such registered owner
or owners and the principal amount and number of Bonds held by
each registered owner or nominee.
Upon surrender thereof to the Bond Registrar, the Bonds are
interchangeable for Bonds of any authorized denomination of equal
aggregate principal amount and of the same interest rate and
maturity. The Bonds may be transferred only if endorsed in the
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manner provided thereon and surrendered to the Bond Registrar.
Such exchange or transfer shall be without cost to the owner or
transferee.
Section 5. R~emption.
(1) OPtional Redemption. The Bonds maturing on or after
December 1, 2003 are subject to redemption prior to maturity, at
the option of the City, on or after December 1, 2002, in whole at
any time or in part on any interest payment date (maturities to
be selected by the City and by lot within a maturity), upon
written notice mailed as provided herein, at 100% of the
principal amount plus interest accrued thereon to the date fixed
for redemption.
(2) Mandatory_ Redemption.
optional redemption provisions
If not redeemed under the
set forth above, the Bonds
maturing on December 1, 2012 shall be redeemed by lot (in such
manner as the Bond Registrar shall determine) at par plus accrued
interest on December 1 in years and amounts as follows:
Dates Amounts
2008 $440,000
2009 470,000
2010 500,000
2011 530,000
2012 565,000
(3) Partial Redemption: Effect of Redemption. If less than
the whole of a maturity is so called for redemption, the Bond
Registrar shall choose by lot the Bonds to be redeemed. In the
case of a Bond of a denomination greater than $5,000, the City
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shall treat each such Bond as representing such number of
separate Bonds each of the denomination of $5,000 as is obtained
by dividing the actual principal amount of such Bond by $5,000.
In the event that only a portion of the principal sum of a Bond
is redeemed, upon surrender of the Bond at the principal office
of the Bond Registrar there shall be issued to the registered
owner, without charge therefor, for the then unredeemed balance
of the principal sum thereof, at the option of the owner, a Bond
or Bonds of like maturity and interest rate in any of the
denominations herein authorized.
On or prior to any redemption date, the City shall deposit
with the Bond Registrar an amount of money sufficient to pay the
redemption price of all the Bonds or portions of Bonds which are
to be redeemed on that date.
Upon surrender of such Bonds for redemption, such Bonds
shall be paid by the Bond Registrar at the redemption price.
Installments of interest due on or prior to the redemption date
shall be payable as herein provided for payment of interest.
(4) Notice of Redemption. Notice of each optional
redemption shall be given not less than 30 nor more than 60 days
prior to the date fixed for redemption, by first class mail,
postage prepaid, to the registered owner of any Bond to be
redeemed at the address appearing on the Bond Register.
All official notices of redemption shall be dated and shall
state: (a) the redemption date, (b) the redemption price, (c) if
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less than all outstanding Bonds are to be redeemed, the
identification (and, in the case of partial redemption, the
respective principal amounts) of the Bonds to be redeemed,
(d) that on the redemption date the redemption price will become
due and payable upon each such Bond or portion thereof called for
redemption, and that interest thereon shall cease to accrue from
and after said date, and (e) the place where such Bonds are to be
surrendered for payment of the redemption price, which place of
payment shall be the principal offices of the Bond Registrar.
The requirements of this section shall be deemed to be
complied with when official notice is mailed as herein provided
regardless of whether or not it is actually received by the owner
of any Bond. The Bonds so called for redemption shall, on the
date specified in such notice, become due and payable, and from
and after the date so fixed for redemption (unless the City shall
default in the payment of the Bonds so called for redemption),
interest on said Bonds so called for redemption shall cease to
accrue.
In addition to the foregoing notice, further notice shall be
given as set out below, but no defect in said further notice nor
any failure to give all or any portion of such further notice
shall in any manner defeat the effectiveness of a call for
redemption if notice thereof is given as above prescribed.
1. Each further notice of redemption given
hereunder shall contain the information required above
for an official notice of redemption plus (i) the CUSIP
numbers of all Bonds being redeemed; (ii) the date of
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92/06/29
issue of the Bonds as originally issued; (iii) the rate
of interest borne by each Bond being redeemed; (iv) the
maturity date of each Bond being redeemed; and (v) any
other descriptive information needed to identify
accurately the Bonds being redeemed.
2. Each further notice of redemption shall be
sent at least 35 days before the redemption date to
Standard & Poor's Corporation and Moody's Investors
Service, Inc. in New York, New York, or their business
successors.
(5) Purchase of Bonds in Open Market. The City hereby
reserves the right whenever it has any surplus money in the
Revenue Fund over and above any amounts necessary to pay
necessary costs of maintaining and operating the System, costs of
necessary additions, improvements and repairs thereto and
extensions and replacements thereof when the same are not to be
financed by the issuance of bonds or warrants, all payments
required to be made into the Senior Lien Bond Redemption Funds,
the Bond Fund and Reserve Account therein, all payments required
to be made into other funds or accounts out of the Revenue Fund
and all payments required for any other proper purpose in
connection with the operation of the System, to use such surplus
money at any time to purchase any of the Bonds and any Future
Parity Bonds in the open market for retirement.
Section 6. Execution of Bonds.
The Bonds shall be executed on behalf of the City with the
manual or facsimile signature of the Mayor of the City and
attested with the manual or facsimile signature of the Clerk
thereof and the seal of the City shall be impressed or imprinted
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on each of the Bonds. In case any of the officers who shall have
signed or attested any of the Bonds shall cease to be such
officer before such Bonds have been actually issued and
delivered, such Bonds shall be valid nevertheless and may be
issued by the City with the same effect as though the persons who
had signed or attested such Bonds had not ceased to be such
officers.
Only such BondS as shall bear thereon a Certificate of
Authentication in the form set forth in Section 7, manually
executed by the Bond Registrar, shall be valid or obligatory for
any purpose or entitled to the benefits of this ordinance. Such
Certificate of Authentication shall be conclusive evidence that
the Bonds so authenticated have been duly executed, authenticated
and delivered hereunder and are entitled to the benefits of this
ordinance.
SsGtion 7. FQrm of Bonds.
The Bonds shall be in
substantially the following form:
Municipal Bond Insurance Policy No. (the "Policy") with
respect to the payments due for principal of and interest on this
bond has been issued by AMBAC Indemnity Corporation ("AMBAC
Indemnity"). The Policy has been delivered to the United States
Trust Company of New York, New York, as the Insurance Trustee
under said Policy and will be held by such Insurance Trustee or
any successor insurance trustee. The policy is on file and
available for inspection at the principal office of the Insurance
Trustee and a copy thereof may be secured from AMBAC Indemnity or
the Insurance Trustee. Ail payments required to be made under
the Policy shall be made in accordance with the provisions
thereof. The owner of this bond acknowledges and consents to the
subrogation rights of AMBAC Indemnity as more fully set forth in
the Policy.
NOo
INTEREST RATE:
MATURITY DATE:
REGISTERED OWNER:
UNITED STATES OF AMERICA
STATE OF WASHINGTON
CITY OF PORT TOWNSEND
WATER AND SEWER REVENUE BOND, 1992
CUSIP NO.:
Principal Amount:
Dollars
The City of Port Townsend, Washington (the "City"), a
municipal corporation of the State of Washington, for value
received hereby promises to pay to the Registered Owner
identified above on the Maturity Date identified above the
Principal Amount identified above and to pay interest thereon
from the date hereof, or the most recent date to which interest
has been paid or duly provided for at the Interest Rate set forth
above, such interest to be payable semiannually on the first days
of June and December of each year (commencing December 1, 1992)
until the maturity of this bond (or if default should be made in
the payment of the principal hereof when the same shall become
due and payable, at the same rate of interest until the payment
in full of such principal sum).
The principal of and interest on this bond are payable
solely out of the special fund of the City known as the "Water
and Sewer Revenue Bond Fund" ("Bond Fund"). Both principal of
and interest on this bond are payable in lawful money of the
United States of America. Interest shall be paid by mailing a
check or draft to the registered owner at the address shown on
the Bond Register as of the 15th day of the month prior to the
interest payment date. Principal shall be paid to the registered
owner upon presentation and surrender of this bond at the
principal office of the fiscal agency of the State of Washington
in either Seattle, Washington, or New York, New York (hereinafter
referred to collectively as the "Bond Registrar").
Reference is hereby made to additional provisions of this
bond set forth on the reverse side hereof, and such additional
provisions shall for all purposes have the same effect as if set
forth on this space.
- 2 4 - m566 92/06/29
This bond shall not be valid or become obligatory for any
purpose or be entitled to any security or benefit under the Bond
Ordinance (as hereinafter defined) until the Certificate of
Authentication hereon shall have been manually signed by the Bond
Registrar.
It is hereby certified, recited and declared that all acts,
conditions and things required by the Constitution and statutes
of the State of Washington to exist, to have happened and to have
been performed precedent to and in the issuance of this bond do
exist, have happened and have been performed in due time, form
and manner as prescribed by law, and that the amount of this
bond, together with all other obligations or indebtedness of the
City, does not exceed any constitutional or statutory limitations
of indebtedness.
IN WITNESS WHEREOF, the City of Port Townsend, Washington,
has caused this bond to be signed by the manual or facsimile
signature of its Mayor, and attested by the manual or facsimile
signature of its City Clerk, and the manual or facsimile seal of
the City to be impressed or imprinted hereon, all as of the first
day of July, 1992.
CITY OF PORT TOWNSEND, WASHINGTON
(SEAL)
Attest:
By
Mayor
City Clerk
CERTIFICATE OF AUTHENTICATION
Date of Authentication:
This bond is one of the bonds described in the within
mentioned Bond Ordinance and is one of the Water and Sewer
Revenue Bonds, 1992 of the City of Port Townsend, Washington,
dated July 1, 1992.
WASHINGTON STATE FISCAL AGENCY
Bond Registrar
By
Authorized Officer
ADDITIONAL BOND PROVISIONS
This bond is one of a series of bonds issued under authority
of Ordinance No. adopted by the City Council on June 29,
1992 (the "Bond Ordinance"), for the purpose of acquiring
additions to and betterments and extensions of the water and
sewer system owned by the City.
The bonds of this issue have been designated as "qualified
tax-exempt obligations" for purposes of Section 265(b) of the
Internal Revenue Code of 1986.
Under the Bond Ordinance, the City is obligated to set aside
and pay into the Bond Fund out of the Gross Revenue of its water
and sewer system, including all additions to and betterments and
extensions thereof, certain fixed amounts sufficient to pay the
principal of and interest on all the bonds issued under the Bond
Ordinance at any time outstanding as the same shall become due
and payable, all as more fully provided in the Bond Ordinance.
The bonds of this issue constitute the only charge against such
Bond Fund.
In the Bond Ordinance, the City covenants to establish,
maintain and collect rates and charges for water and sewage
service which shall provide net revenues equal to at least 1.25
times the amount required in any year hereafter for the payment
of the principal of and interest on this bond and the issue of
which this bond is a part and all bonds heretofore or hereafter
issued which rank on a parity therewith.
The amounts so pledged to be paid into the Bond Fund and the
Reserve Account therein for the purpose of paying and securing
the principal of and interest on the bonds, and any water and
sewer revenue bonds which may hereafter be issued on a parity of
lien with the bonds, are hereby declared to be a prior lien and
charge upon such gross revenue superior to all other charges of
any kind or nature except the Costs of Operation and Maintenance
of the water and sewer system of the City and the payment of the
- 2 6 - ~566 921061Z9
outstanding water and sewer revenue bonds of the City dated
January 1, 1967 and October 1, 1978.
The pledge of gross revenue 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 provision for the payment thereof on the terms and
conditions set forth in the Bond Ordinance.
Reference is made to the Bond Ordinance for a description of
the Bond Fund and the covenants and declarations of the City and
other terms and conditions upon which the bonds authorized
thereby have been issued and other bonds ranking on a parity
therewith have been and may hereafter be issued and outstanding.
This bond is a special limited obligation of the City and is
not an obligation of the State of Washington or any political
subdivision thereof other than the City, and neither the full
faith and credit nor the taxing power of the City or the State of
Washington is pledged to the payment of this bond.
The bonds maturing on or after December 1, 2003 are subject
to redemption prior to maturity, at the option of the City, on or
after December 1, 2002, in whole at any time or in part on any
interest payment date, maturities to be selected by the City (and
by lot within a maturity in increments of $5,000 if less than all
of a maturity is to be redeemed), at a price of par together with
the interest accrued thereon to the date fixed for redemption.
If not redeemed under the optional redemption provisions set
forth above, the bonds maturing on December 1, 2012 shall be
redeemed by lot (in such manner as the Bond Registrar shall
determine) at par plus accrued interest on December 1 in years
and amounts as follows:
Dates Amounts
2008 $44O,O0O
2009 470,000
2010 500,000
2011 530,000
2012 565,000
Written notice of redemption shall be given by first class
mail, postage prepaid, not less than 30 days nor more than 60
days before the redemption date to the registered owners of the
bonds to be redeemed in whole or in part at their last addresses,
if any, appearing on the Bond Register, but failure to receive
any such notice shall not affect the validity of the proceedings
for redemption of bonds. Notice of redemption having been given
- 27 - m566 921~1~
by mailing, as aforesaid, the bonds so called for redemption
shall on the date specified in such notice become due and payable
at the applicable redemption price herein provided, and from and
after the date so fixed for redemption (unless the City shall
default in the payment of the bonds so called for redemption)
interest on said bonds so called for redemption shall cease to
accrue.
Portions of the principal sum of this bond in increments of
$5,000 or any integral multiple thereof may be redeemed, and if
less than all of the principal sum hereof is to be redeemed, in
such case upon the surrender of this bond at the principal office
of the Bond Registrar, there shall be issued to the registered
owner, without charge therefor, for the then unredeemed balance
of the principal sum hereof, fully registered bonds of like
series, maturity and interest rate in any of the denominations
authorized by the Bond Ordinance.
Bonds are interchangeable for bonds of any authorized
denomination of equal aggregate principal amount and of the same
interest rate and maturity upon presentation and surrender to the
Bond Registrar.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto
PLEASE INSERT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER
OF TRANSFEREE
(Please print or typewrite name and address, including zip code,
of Transferee)
the within bond and does hereby irrevocably constitute and
appoint as attorney-in-fact
- 28 - .~566 9ZlO6/Z9
to transfer said bond on the books kept for registration thereof
with full power of substitution in the premises.
DATED: ,
SIGNATURE GUARANTEED:
NOTE: The signature on this
Assignment must correspond with the
name of the registered owner as it
appears upon the face of the within
bond in every particular, without
alteration or enlargement or any
change whatever.
Section 8. CQnstruction Fund. There is hereby created a
"1992 Wastewater Treatment Plant Construction Fund" (the
"Construction Fund") for the purpose of paying the costs of
additions to and betterments and extensions of the System. The
proceeds of sale of the Bonds (except for accrued interest, which
shall be paid into the Bond Fund, and the amount to be paid into
the Reserve Account) shall be paid into the Construction Fund.
The money in the Construction Fund shall be used for the
sole purpose of paying the costs of the Project and all of the
expenses incidental thereto, including expenses incidental to the
issuance of the Bonds, or, if necessary and proper, shall be used
for the purpose of repaying any amounts which the City may have
advanced for the purpose of paying part or all of the cost of the
additions and improvements to and extensions of the System
hereinbefore authorized.
- 2 9 - NNN566 92106129
The money in the Construction Fund not immediately needed to
pay any part or all of the above-described costs may be invested
in Permitted Investments. All interest earned and/or income
derived by virtue of any such investments shall remain in the
Construction Fund and be used for the purposes for which said
Construction Fund is created.
Any money remaining in the Construction Fund after all costs
of the Project have been paid shall be transferred to the Bond
Fund and/or the Reserve Account.
Section 9. Revenue Fund: PledGe of Revenu~. There has
heretofore been created a special fund known as the "Water and
Sewer Fund" ("Revenue Fund") into which fund the City has
obligated and bound itself to pay all of the Gross Revenue of the
System as collected. The money in the Revenue Fund shall be kept
segregated from any and all other money of the City.
The Bonds, together with the interest thereon, shall be
payable from the Net Revenue of the System after the payment of
the Outstanding Senior Lien Bonds, and such Net Revenue 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 the Gross Revenue and the money in the Revenue Fund
junior to the payment of the Costs of Maintenance and Operation
and the payment of the Outstanding Senior Lien Bonds and equal to
the lien and charge thereon to secure and pay the principal of
and interest on any Future Parity Bonds of the City and superior
to all other charges of any kind or nature.
The Gross Revenues deposited in the Revenue Fund shall be
used only for the following purposes and in the following order
of priority:
FIRST, to pay the Costs of Maintenance and Operation and to
maintain a balance in the Revenue Fund sufficient in amount to
enable the City to continuously meet Costs of Maintenance and
Operation on a current basis;
SECOND, to make all payments required to be made into the
Senior Lien Bond Redemption Funds;
THIRD, to make all payments required to be made into the
Bond Fund to pay the interest on any Bonds and Future Parity
Bonds;
FOURTH, to make all payments required to be made into the
Bond Fund to pay the maturing principal of any Bonds and Future
Parity Bonds and to make all payments required to be made into
the Bond Fund to provide for the mandatory redemption of Term
Bonds;
FIFTH, to make all payments required to be made into the
Reserve Account to secure the payment of the principal of and
interest on outstanding Bonds and Future Parity;
SIXTH, to make all payments required to be made pursuant to
a reimbursement agreement or agreements (or other equivalent
- 3 1 - R566
921061Z9
documents) in connection with Qualified Insurance or a Qualified
Letter of Credit;
SEVENTH, to make all payments required to be made into any
revenue bond redemption fund, revenue warrant redemption fund,
debt service account, reserve account or bond retirement account
created to pay and secure the payment of the principal of and
interest on any revenue bonds, or revenue warrants or other
revenue obligations of the City, including the City's Water and
Sewer Revenue Bonds, 1978, having a lien upon the Revenues of the
System junior and inferior to the lien thereon for the payment of
the principal of and interest on the Bonds;
EIGHTH, to retire by redemption or purchase in the open
market any outstanding water and sewer revenue bonds or other
obligation of the City, to make necessary additions, betterments,
improvements and repairs to or extensions and replacements of the
System, or for any other lawful City purposes.
Section 10. Bond Fund. There is hereby been created a fund
of the City to be known as the "1992 Water and Sewer Revenue Bond
Redemption Fund" (the "Bond Fund"), which fund shall be drawn
upon for the sole purpose of paying the principal of, premium if
any, and interest on the Bonds and any Future Parity Bonds. The
money in the Bond Fund shall be kept segregated from any and all
other money of the City.
- 32 - Rs~
92106129
23
The appropriate officer of the City shall promptly, after
the sale of the Bonds, deposit the accrued interest thereon into
the Bond Fund.
The City shall set aside and transfer therein from the
Revenue Fund into the Bond Fund on or before the 20th day of each
month, and continuing each month for as long as any of the Bonds
are outstanding: (i) beginning July, 1992 an amount, together
with other amounts in the fund, equal to at least one-fifth of
the interest to become due and payable on the next interest
payment date on all of the Bonds then outstanding; and
(ii) beginning December, 1992 an amount, together with other
amounts in the fund, equal to at least one-twelfth of the
principal of the Bonds to become due and payable on the next
principal payment date; and (iii) beginning December, 2007 an
amount, together with other amounts in the fund, equal to at
least one-twelfth of the next Sinking Fund Requirement.
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, interest on, and Sinking Fund
- 3 3 - IINII566 92/06/29
Requirements of the Bonds outstanding, 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 this section.
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 and any Future Parity Bonds. The City hereby
covenants and agrees that it will pay into the Reserve Account
from Bond proceeds a sum equal to the Reserve Account Requirement
for the Bonds.
The City further covenants and agrees that when the required
deposits have been made into the Reserve Account, it will at all
times maintain therein an amount at least equal to the Reserve
Account Requirement, as redetermined in each calendar year with
respect to the bonds secured by such Reserve Account. Whenever
there is a sufficient amount in the Bond Fund, including all
accounts therein, to pay the principal of, premium, if any, and
interest on all outstanding Bonds and Future Parity Bonds, the
money in the Reserve Account may be used to pay the principal of,
premium, if any, and interest on the Bonds and Future Parity
Bonds secured thereby. Money in the Reserve Account may also be
withdrawn to redeem and retire, and to pay the premium, if any,
and interest due to such date of redemption, on the outstanding
Bonds and Future Parity Bonds secured by such Reserve Account, as
long as the money remaining on deposit in such Reserve Account is
- 3 4 - m$~ 921o61~9
at least equal to the Reserve Account Requirement determined with
respect to the Bonds and Future Parity Bonds then outstanding.
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.
In the event the money in the Bond Fund over and above the
amount herein 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 Revenue Fund first available after making necessary provision
for the Costs of Maintenance and Operation, payments into the
Senior Lien Bond Redemption Funds, and payments required to be
made into the Bond Fund to pay the principal of, interest on, and
Sinking Fund Requirements of the Bonds next coming due.
All money in the Bond Fund or Reserve Account may be kept in
cash or invested in Permitted Investments maturing not later than
the last maturity of the Bonds outstanding at the time of such
purchase; provided that accrued interest on the Bonds shall be
invested in obligations defined under subsections (1) and (2) of
the definition of Permitted Investments. Interest earned on or
- 3 5 - NNN566 92/06/29
profits made from the sale of such investments shall be deposited
in and become a part of the Revenue Fund.
Section 11. Covenants and Agr~em~nt~. The City hereby
covenants with the owner of each of the Bonds for as long as any
of the same remain outstanding as follows:
A. Rates and Charges. The City covenants that it will
establish, maintain and collect rates and charges for water and
for sanitary sewage collection and disposal service, together
with Assessments collected, for as long as any of 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
1.25 times the amount required each calendar year hereafter 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
necessary Costs of Maintenance and Operation thereof but before
depreciation," and shall be deemed to exclude from "principal" an
amount of Term Bonds equal to the mandatory sinking fund deposits
required for the payment thereof and from "interest" the interest
on such Term Bonds subsequent to the interest payment dates
following the dates of the respective sinking fund deposits, and
to include in lieu thereof such mandatory sinking fund deposits
as of the dates required.
- 3 6 - 14~N566 92/06/29
B. Maintenance of System. The City covenants 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.
C. Sale or Disposition of ~h~ System. The City will not
sell or otherwise dispose of the System in its entirety unless
simultaneously with Such sale or other disposition, provision is
made for the payment into the Bond Fund of cash or "Government
Obligations," as now or hereafter defined in RCW Chapter 39.53,
as amended, or its successor statute, if any, sufficient together
with interest to be earned thereon to pay the principal of and
interest on the then outstanding Bonds and Future Parity Bonds,
nor will it sell or otherwise dispose of any part of the useful
operating properties of the System unless such facilities are
replaced or provision is made for payment into the Bond Fund of
the greater of:
(1) An amount which will be in the same propor-
tion to the net amount of Bonds and Future Parity Bonds then
outstanding (defined as the total amount of the Bonds and Future
Parity Bonds less the amount of cash and investments in the Bond
Fund and accounts therein) that the Net Revenues from the portion
of the System sold or disposed of for the preceding year bears to
the total Net Revenues for such period; or
(2) An amount which will be in the same propor-
tion to the net principal amount of Bonds and Future Parity Bonds
then outstanding that the book value of the part of the System
sold or disposed of bears to the book value of the entire System
immediately prior to such sale or disposition.
The proceeds of any such sale or disposition of a portion of
the properties of the System (to the extent required above) shall
be paid into the Bond Fund.
Notwithstanding any other provision of this subsection, the
City may sell or otherwise dispose of any of the works, plant,
properties and facilities of the System or any real or personal
property comprising a part of the same with a value less than 2%
of the net utility plant of the System or which shall have become
unserviceable, inadequate, obsolete or unfit to be used in the
operation of the System, or no longer necessary, material to or
useful in such operation, without making any deposit into the
Bond Fund.
D. Collection of Assessments. The City shall promptly
collect all Assessments levied in any utility local improvement
district now or hereafter created to secure the payment of the
principal of and interest on the Bonds and Future Parity Bonds
without allocation of such Assessments to any particular series
of such bonds.
E. Books and Accounts. The City covenants that it will
maintain complete books and records relating to the operation of
- 3 8 - Ns~ 9Zl~l~
the System and its financial affairs, and will cause such books
and records to be audited annually, and cause to be prepared an
annual financial and operating statement, said statement to be
mailed to any owner of the Bonds upon request.
F. Insurance. The City covenants that it will carry fire
and extended coverage insurance on the System as is ordinarily
carried on the property of similar public utilities by other
municipal corporations engaged in the operation of the same, to
the full insurable value thereof, and will also carry adequate
public liability insurance 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; provided, however, that the City may if
deemed necessary and advisable by the Council, institute or
continue a self-insurance program with respect to any or all of
the aforementioned risks. The premiums paid for all such
insurance shall be regarded and paid as a Cost of Maintenance and
Operation of the System.
G. Delinquencies. The City covenants that it will
promptly collect all water and sewer charges, determine in a
timely manner all delinquencies and take all necessary legal
action to enforce collection of such delinquencies.
H. Tax Covenants. The City covenants that no part of the
proceeds of the Bonds or any other money or obligations held
under this ordinance shall at any time be used for any purpose or
invested in such a manner, nor shall the City take any other
action, which would cause the Bonds to be (i) "arbitrage bonds"
under the Internal Revenue Code of 1986 (the "Code") or (ii)
"private activity bonds" under the Code.
Section 12. Special Designation.
The City hereby designates the Bonds as "qualified tax-
exempt obligations" under Section 265(b) of the Code. The City
does not expect to issue tax-exempt obligations in an aggregate
principal amount in excess of $10,000,000 during calendar year
1992.
Section 13. Arbitrage Rebate.
(a) General Rule. The City will pay to the United
States of America in accordance with the provisions of this
section (i) at least 90% of the Rebatable Arbitrage with respect
to the Bonds as of each Installment Computation Date, (ii) 100%
of the Rebatable Arbitrage with respect to the Bonds as of the
Final Computation Date and (iii) any income attributable to such
Rebatable Arbitrage.
(b) Computation of Rebatable Arbitrage. The Rebatable
Arbitrage with respect to the Bonds computed in accordance with
the Rebate Computation Certificate and, as of each Computation
Date, will be the excess of:
(i) The future value of all Nonpurpose Receipts with
respect to the Bonds; over
- 4 0 - ~#566 92106129
(ii) The future value of all Nonpurpose Payments with
respect to the Bonds.
The future value will be computed as of each Computation Date.
(c) Pa~vment Procedure. (i) The payment of Rebatable
Arbitrage due as of each Installment Computation Date will be
paid no later than the date that is 60 days after the Installment
Computation Date.
(ii) The payment of Rebatable Arbitrage due as of
the Final Computation Date will be paid no later than the latest
of (a) the date that is 60 days after the Final Computation Date,
(b) the date that is 8 months after the date of issuance of the
Bonds, or (c) the date 60 days after the earlier of the date that
the City no longer expects to spend gross proceeds of the Bonds
within 6 months of the date of issuance of the Bonds or 12 months
after the date of issuance of the Bonds.
(iii) Each payment of Rebatable Arbitrage will be
made to the Internal Revenue Service Center, Philadelphia.
Pennsylvania 19225 and will be accompanied by IRS Form 8038-T.
(d) Other Methodology;_. Notwithstanding this Section 13,
payments of Rebatable Arbitrage will be made in accordance with
instructions provided by Preston Thorgrimson Shidler Gates &
Ellis or other nationally recognized bond counsel if necessary to
maintain the federal income tax exemption for interest payments
made on the Bonds.
S~ction 14. Adequacy of Revenues. The City Council hereby
declares that in fixing the amounts to be paid into the Bond Fund
as hereinbefore provided that it has exercised due regard for the
Costs of Maintenance and Operation of the System, and has not
obligated the City to set aside and pay into the Bond Fund a
greater amount of money in the Revenue Fund than in its judgment
will be available over and above such Costs of Maintenance and
Operation, and the debt service on the Outstanding Senior Bonds.
Section 15. Defeasance. In the event that cash (insured at
all times by the Federal Deposit Insurance Corporation or
otherwise collateralized with direct obligations of the United
States) and/or direct obligations of (including obligations
issued or held in book entry form on the books of) the United
States of America, maturing at such time or times and bearing
interest to be earned thereon in amounts (together with such
money, if necessary) sufficient to redeem and retire the Bonds in
accordance with their terms are set aside in a special account to
effect such redemption and retirement and such money and the
principal of and interest on such Government Obligations are
irrevocably set aside and pledged for such purpose, then no
further payments need be made into the Bond Fund for the payment
of the principal of and interest on the Bonds so provided for,
and such Bonds shall cease to be entitled to any lien, benefit or
security of this ordinance except for the right to receive the
- 42 - NMN566 92106129
23 95'
money so set aside and pledged, and the Bonds shall be deemed not
to be outstanding hereunder.
Section 16, Issuance of Future Parity Bonds. The City
hereby further covenants and agrees with the owners of the Bonds
for as long as any of the same remain outstanding as follows:
A. That it will not issue any bonds with a lien on Gross
Revenues superior to the lien on such revenues of the Bonds. The
City may issue Future Parity Bonds 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 water and sewer
revenue bonds of the City;
and to pledge that payments be made into the Bond Fund for the
payment of the principal thereof and interest thereon 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 Bond
Fund and the Reserve Account, upon compliance with the following
conditions:
-43-
92106129
(1) That at the time of the issuance of such
additional or refunding Future Parity Bonds there is no
deficiency in the Bond Fund and the Reserve Account.
(2) If there are Assessments levied in any utility
local improvement district in which additions and improvements to
and extensions of the System will be constructed from the
proceeds of such Future Parity Bonds, the ordinance authorizing
such Future Parity Bonds shall require that such Assessments be
paid into the Bond Fund.
(3) If there are Assessments pledged to be paid into a
warrant or bond redemption fund for revenue bonds or warrants
being refunded by Future Parity Bonds, the ordinance authorizing
such Future Parity Bonds shall require such Assessments to be
paid into the Bond Fund.
(4) The principal of and interest on the Future Parity
Bonds shall be payable out of the Bond Fund and the ordinance
authorizing their issuance shall further provide for the payment
in approximately equal annual installments into the Reserve
Account within three years from the date of the issuance of such
additional or refunding Future Parity Bonds of a sum at least
equal to the Reserve Account Requirement on such additional or
refunding Future Parity Bonds.
(5) Prior to the delivery of any Future Parity Bonds,
the City shall have on file in the office of the City Clerk a
certificate of an independent professional engineer licensed in
- 4 4 - Ns~ 92/06/29
the State of Washington or certified public accountant familiar
with the operations and rate setting of facilities similar to the
System showing: that the Net Revenue determined and adjusted as
hereafter provided for each calendar or fiscal year after the
issuance of such Future Parity Bonds (the "Adjusted Net Revenue")
together with Assessment Income will equal at least 1.25 times
the maximum annual amount required to be paid thereafter for the
principal of and interest on all outstanding parity bonds,
including the Future Parity Bonds proposed to be issued. In the
event the City issues any Term Bonds, the words "principal of and
interest on all outstanding parity bonds, including the Future
Parity Bonds proposed to be issued" in this paragraph shall be
deemed to exclude from "principal" an amount of Term Bonds equal
to the term bond maturity amount and from "interest" the interest
on such term bond maturity amount subsequent to the interest
payment dates following the dates of the respective sinking fund
deposits, and to include in lieu thereof such mandatory sinking
fund deposits as of the dates required.
The Adjusted Net Revenue shall be the Net Revenue for a
period of any 12 consecutive months out of the 24 months
i~,~,Lediately preceding the date of delivery of such proposed
Future Parity Bonds as adjusted by such engineer or accountant to
take into consideration changes in Net Revenue estimated to occur
under the following conditions for each year after such delivery
-45-
92/06/29
for so long as any parity Bonds, including the Future Parity
Bonds proposed to be issued, shall be outstanding:
(i) the additional Net Revenue which would have been
received if any change in rates and charges adopted prior to
the date of such certificate and subsequent to the beginning
of such 12 month period, had been in force during the full
12 month period;
(ii) the additional Net Revenue which would have been
received if any facility of the System which became fully
operational after the beginning of such 12 month period had
been so operating for the entire period;
(iii) the additional Net Revenue estimated by such
engineer or accountant to be received as a result of any
additions, betterments and improvements to and extensions of
any facilities of the System which are (a) under
construction at the time of such certificate or (b) will be
constructed from the proceeds of the Future Parity Bonds to
be issued;
(iv) the additional Net Revenue which would have been
received if any customers added to the System during such 12
month period were customers for the entire period.
Such engineer or accountant may rely upon, and his/her
certificate shall have attached thereto, financial statements of
the System, certified by the City Treasurer showing income and
expenses for the period upon which the same is based.
- 4 6 - m5~6
92106129
23
The certificate of such engineer or accountant shall be
conclusive and the only evidence required to show compliance with
the provisions and requirements of this subsection (5).
B. Notwithstanding the foregoing requirement, if Future
Parity Bonds are to be issued for the purpose of refunding at or
prior to their maturity any part or all of the then outstanding
parity Bonds and the issuance of such refunding Future Parity
Bonds will result in a debt service savings and does not require
an increase of more than $5,000 in any fiscal or calendar year
for principal of and interest on such refunding Future Parity
Bonds over and above the amount required in such year for the
principal of and interest on the bonds being refunded thereby,
the condition stated in subsection Al5) of this section need not
be met.
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 Senior Lien Bond Redemption Funds
and the Bond Fund and the Reserve Account.
Section 17, Sale of Bonds.
The City hereby accepts the written offer of the Purchaser
to purchase the Bonds under the terms and conditions provided in
the Purchase Contract attached hereto as Exhibit A, and
incorporated herein.
- 4 7 - R566 92106129
The proper City officials are hereby authorized and directed
to do everything necessary for the prompt issuance, execution and
delivery of the Bonds to the Purchaser and for the proper use and
application of the proceeds of such sale.
Section 18. Qfficial Statement: Use of Documents.
The Treasurer and other appropriate officers of the City are
authorized and directed to execute and deliver to the Purchaser
copies of an OfficiaI Statement in substantially the form of the
Preliminary Official Statement dated June 18, 1992; provided,
however, that the Treasurer is authorized to supplement or amend
the Official Statement as the Treasurer, with the approval of
bond counsel to the City, deems necessary or appropriate. The
City hereby deems the Preliminary Official Statement as final for
purposes of Rule 15c-2-12 of the Securities and Exchange Act.
The City Council approves and authorizes the use of such Official
Statement (including any such supplements and amendments thereto)
in connection with the public offering and sale of the Bonds by
the Purchaser.
Section 19. 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 other covenants and agreements thereafter to be
- 4 8 - N5~6 9ZlO61Z9
observed, which shall not adversely affect the interests of the
owners 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 Council may deem necessary or
desirable and not inconsistent with this ordinance and which
shall not adversely affect the interest of the owners of Bonds in
any material respect.
Any such supplemental ordinance of the Council may be
adopted without the consent of the owners of any Bonds at any
time outstanding, notwithstanding any of the provisions of
subsection B of this section.
B. With the consent of the owners of not less than 65% in
aggregate principal amount of the Bonds and the Future Parity
Bonds at the time outstanding, the City Council may adopt an
ordinance or ordinances supplemental hereto for the purpose of
adding any provisions to or changing in anymanner 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 and the
Future Parity Bonds, or reduce the rate of interest thereon, or
extend the time of payments of interest from their due date, or
- 4 9 - ~5~ 92106129
reduce the amount of the principal thereof, or reduce any premium
payable on the redemption thereof, without the consent of the
owner of each bond so affected; or
(2) Reduce the aforesaid percentage of bondowners
required to approve any such supplemental ordinance, without the
consent of the owners of all of the Bonds and Future Parity
Bonds then outstanding.
It shall not be necessary for the consent of bondowners
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
pursuant 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 owners of Bonds outstanding hereunder
shall thereafter be determined, exercised and enforced
thereunder, subject in all respects to such modification and
amendments, 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 20. Lost or Destroyed Bond~. In case any Bonds
shall be lost, stolen or destroyed, the Bond Registrar may
authenticate and deliver a new Bond or Bonds of like amount, date
and tenor to the registered owner thereof upon the owner paying
the expenses and charges of the Bond Registrar and the City in
connection therewith and upon his or her filing with the Bond
Registrar and the City evidence satisfactory to both that such
Bond or Bonds were actually lost, stolen or destroyed and of his
or her ownership thereof, and upon furnishing the City and the
Bond Registrar with indemnity satisfactory to both.
Section 21. Payment Procedure Pursuant to Municipal Bond
Insurance Policy. As long as the Municipal Bond Insurance Policy
shall be in full force and effect, the City and the Bond
Registrar agree to comply with the following provisions:
(1) At least one day prior to an interest payment date the
City or the Bond Registrar will determine where there will be
sufficient funds in the Bond Fund to pay the principal of or
interest on the Bonds on such interest payment date. If the City
or Bond Registrar determines that there will be insufficient
funds in the Bond Fund, the City or the Bond Registrar shall so
notify AMBAC Indemnity. Such notice shall specify the amount of
the anticipated deficiency, the Bonds to which such deficiency is
applicable and whether such Bonds will be deficient as to
principal or interest, or both. If the City or the Bond
Registrar has not so notified AMBAC Indemnity at least one day
prior to an interest payment date, AMBAC Indemnity will make
payments of principal or interest due on the Bonds on or before
the first business day next following the date on which AMBAC
- 5 1 - m566 92106129
Indemnity shall have received notice of nonpayment from the City
or the Bond Registrar.
(2) The City or the Bond Registrar shall, after giving
notice to AMBAC Indemnity as provided in (1) above, make avail-
able to AMBAC Indemnity and, at AMBAC Indemnity's direction, to
the United States Trust Company of New York, as insurance trustee
for AMBAC Indemnity or any successor insurance trustee (the
"Insurance Trustee"), the registration books of the City
maintained by the Bond Registrar, and all records relating to the
Bond Fund.
(3) The City or the Bond Registrar shall provide AMBAC
Indemnity and the Insurance Trustee with a list of registered
owners of Bonds entitled to receive principal or interest pay-
ments from AMBAC Indemnity under the terms of the Municipal Bond
Insurance Policy, and shall make arrangements with the Insurance
Trustee (i) to mail checks or drafts to the registered owners of
Bonds entitled to receive full or partial interest payments from
AMBAC Indemnity, and (ii) to pay principal upon Bonds surrendered
to the Insurance Trustee by the registered owners of Bonds
entitled to receive full or partial principal payments from AMBAC
Indemnity.
(4) The City or the Bond Registrar shall, at the time it
provides notice to AMBAC Indemnity pursuant to (1) above, notify
registered owners of Bonds entitled to receive the payment of
principal or interest thereon from AMBAC Indemnity (i) as to the
- 52 - 15~6 921~61Z9
fact of such entitlement, (ii) that AMBAC Indemnity will remit to
them all or a part of the interest payments next coming due upon
proof of bondowner entitlement to interest payments and delivery
to the Insurance Trustee, in form satisfactory to the Insurance
Trustee, of an appropriate assignment of the registered owner's
right to payment, (iii) that should they be entitled to receive
full payment of principal from AMBAC Indemnity they must
surrender their Bonds (along with an appropriate instrument of
assignment satisfactory to AMBAC Indemnity to permit ownership of
such Bonds to be registered in the name of AMBAC Indemnity) for
payment to the Insurance Trustee, and not the Bond Registrar, and
(iv) that should they be entitled to receive partial payment of
principal from AMBAC Indemnity, they must surrender their Bonds
for payment thereon first to the Bond Registrar, who shall note
on such Bonds the portion of the principal paid by the Bond
Registrar, and then, along with an appropriate instrument of
assignment satisfactory to AMBAC Indemnity, to the Insurance
Trustee, which will then pay the unpaid portion of principal.
(5) In the ~event that the Bond Registrar has notice that
any payment of principal of or interest on a Bond which has
become due for payment and which is made to a bondowner by or on
behalf of the City has been deemed a preferential transfer and
theretofore recovered from its registered owner pursuant to the
United States Bankruptcy Code by a trustee in bankruptcy in
accordance with the final, nonappealable order of a court having
competent jurisdiction, the Bond Registrar shall, at the time
AMBAC Indemnity is notified pursuant to (1) above, notify all
registered owners that in the event that any registered owner's
payment is so recovered, such registered owner will be entitled
to payment from AMBAC Indemnity to the extent of such recovery if
sufficient funds are not otherwise available, and the Bond
Registrar shall furnish to AMBAC Indemnity its records evidencing
the payments of principal of and interest on the Bonds which have
been made by the Bond Registrar and subsequently recovered from
registered owners and the dates on which such payments were made.
(6) In addition to those rights granted AMBAC Indemnity
under this ordinance, AMBAC Indemnity shall, to the extent it
makes payment of principal of or interest on Bonds, become
subrogated to the rights of the recipients of such payments in
accordance with the terms of the Municipal Bond Insurance Policy,
and to evidence such subrogation (i) in the case of subrogation
as to claims for past due interest, the Bond Registrar shall note
AMBAC Indemnity's rights as subrogee on the registration books of
the City maintained by the Bond Registrar upon receipt from AMBAC
Indemnity of proof of the payment of interest thereon to the
registered owners of the Bonds, and (ii) in the case of
subrogation as to claims for past due principal, the Bond Regis-
trar shall note AMBAC Indemnity's rights as subrogee on the
registration books of the City maintained by the Bond Registrar
- 5 4 - 1~5~ 92/06/Z9
upon surrender of the Bonds by the registered owners thereof
together with proof of the payment of principal thereof.
Section 22. Con~ent of AMBAC: Notice to AMBAC.
A. Any provision of this ordinance expressly recognizing
or granting rights in or to AMBAC Indemnity may not be
amended in any manner which affects the rights of AMBAC
Indemnity hereunder without the prior written consent
of AMBAC Indemnity.
B. AMBAC Indemnity's consent shall be required in addition
to bondowner consent, when required, for the following
purposes: (i) execution and delivery of any
supplemental ordinance; (ii) removal of the Bond
Registrar and selection and appointment of any
successor Bond Registrar; and (iii) initiation or
approval or any action not described in (i) or (ii)
above which requires bondowner consent.
C. Anything in this ordinance to the contrary
notwithstanding, upon the occurrence and continuance of
an event of default, AMBAC Indemnity shall be entitled
to control and direct the enforcement of all rights and
remedies granted to the bondowners for the benefit of
the bondowners.
D. While the Municipal Bond Insurance Policy is in effect,
the City shall furnish to AMBAC Indemnity:
- 5 5 - ~566 9z/06/~
Ee
(ii)
(iii)
(i) as soon as practicable after the filing thereof, a
copy of any financial statement of the City and a
copy of any audit and annual report of the City;
a copy of any notice to be given to the registered
owners of the Bonds, including, without
limitation, notice of any redemption of or
defeasance of Bonds; and
such 'additional information it may reasonably
request.
The City will permit AMBAC Indemnity to discuss the
affairs, finances and accounts of the City or any
information AMBAC Indemnity may reasonably request
regarding the security for the Bonds with appropriate
officers of the City. The City will permit AMBAC
Indemnity to have access to the Project and have access
to and to make copies of all books and records relating
to the Bonds at any reasonable time.
AMBAC Indemnity shall have the right to direct an
accounting at the City's expense, and the City's
failure to comply with such direction within thirty
days after receipt of written notice of the direction
from AMBAC Indemnity shall be deemed a default
hereunder, provided, however, that if compliance cannot
occur within such period, then such period will be
extended so long as compliance is begun within such
- 5 6 - N566 9z/O~lZ9
period and diligently pursued, but only if such
extension would not materially adversely affect the
interests of any registered owner of the Bonds.
Section 23. Sev~rability. 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 24, 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,
Washington, at a meeting of said Council held this 29th day of
June, 1992.
CITY TOWNSEND, WASHINGTON
Attest:
City Clerk
-57-
921o~129
CERTIFICATE OF CLERK
I DO HEREBY CERTIFY that I am the duly chosen, qualified and
acting Clerk of the City Council ( the "Council" ) of Port
Townsend, Washington (the "City"), and keeper of the records of
the City; and
I HEREBY CERTIFY:
1. That the attached ordinance is a true and correct copy
of Ordinance No. of the City (the "Ordinance"), as finally
passed at a special meeting of the Council held on the 29th day
of June, 1992 and duly recorded in my office.
2. That said meeting was duly convened and held in all
respects in accordance with law, and to the extent required by
law, due and proper notice of such meeting was given; that a
quorum was present throughout the meeting and a legally suffi-
cient number of members of the Council voted in the proper manner
for the passage of the Ordinance; that all other requirements and
proceedings incident to the proper passage of the Ordinance have
been duly fulfilled, carried out and otherwise observed, and that
I am authorized to execute this certificate.
IN WITNESS W~EREOF, I have hereunto set my hand and affixed
the official seal of the City this ~-~ day of June, 1992.
City Clerk
(SEAL)
BBB Seattle
BBB Northwest
SECURITIES CORPORATION
! 420 FIFTH AVENUE
SUITE 4300
SEATTLE, g/ASHINGTON 98 ! 01
(206) 628-2882
June 29, 1992
Honorable Mayor and City Council
City of Port Townsend
540 Water Street
Port Townsend, Washington 98368-5724
City of Port Townsend
Jefferson County, Washington
$6,820,000 Water and Sewer Revenue Bonds, 1992
Honorable Mayor and City Council:
Seattle-Northwest Securities Corporation ("Purchaser") offers to purchase from the City
of Port Townsend ("Seller") all the above-described bonds (the "Bonds"), on the terms and
based upon the covenants, representations and warranties set forth below. Appendirx- _A,
which is incorporated into this agreement by reference, contains a brief description of t.he
Bonds, includingprincipal amounts, maturities, .in. te,r,~? rate,s,, p~.r, chase p.rice, and~,t,h.e
proposed date and place of delivery and payment (the Closing ). umer prowsions or cms
agreement are as follows:
Prior to the Closing, Seller will approve a Preliminary Official Statement, and will
adopt an ordinance authorizing the Bonds (the "Bond Or~linance") with such
changes as are requested by the Seller and its counsel. The Purchaser is
authorized by Seller to use these doc-ments and the information contained in
them in connection with the public offering of the Bonds and the Final Official
Statement in connection with the sale and delivery of the Bonds.
Seller, to the best of its knowledge, represents and covenants to the Purchaser
that:
(a)
It has and will have at the Closing the power and authority to enter into
and perform this agreement, to adopt the Bond Ordinance and to deliver
and sell the Bonds to the Purchaser;
(b)
This agreement and the Bonds do not and will not conflict with, or
constitute or create a breach or default under, any existing law, regulation,
order or agreement to which Seller is subject;
(c)
No governmental approval or authorization other than_the Bond Ordinance
which has not been obtained, or will not be obtained prior to closing, is
required in connection with the sale of the Bonds to the Purchaser;
(d)
The Preliminary Official Statement with corrections, if any, noted by the
Seller and its counsel, as of its date and (except as to matters corrected or.
added in the Final Official Statement) as of the Closing, is accurate and
complete in all material respects as of its date to the knowledge and belief
of the officers and employees of the Seller, after due review.
Honorable Mayor and City Council
City of Port Townsend
June 29, 1992
Page Two
(e)
(f)
The Seller has previously provided the underwriters with a copy of its
Preliminary Official Statement dated June 18, 1992. As of its date, the
Preliminary Official Statement has been "deemed final" by the Seller for
purposes of S.E.C. Rule 15c2-12(bX1).
The Seller agrees to cooperate with the Purchaser to permit the Purchaser
to deliver or cause to be delivered, within seven business days after any
final agreement to purchase, offer, or sell the securities and in sofficient
time to accompany any confirmation that requests payment from any
customer of the' Pur- chaser, copies of a final Official Statement in sufficient
antity to comply with paragraph (b)(4) of the Securities and Exchange
remission Rule 15c2-12 and the rules of the Municipal Securities
Rulemsk~ng Board. The Purchaser agrees to deliver three copies of the
final Official Statement to a nationally recognized m~micipal securities
information repository on the business day on which the f'mal Official
Statement is available, and in any event no later than seven business days
after the date hereof.
The Purchaser shall have the right to cancel the agreement to purchase the Bonds
contained herein by notifying the Seller of its election to do so if, after the
execution of this Contract of Purchase and prior to the Closing:
(a)
a decision by a court of the United States or the United States Tax Court
shall be rendered, or a ruling or a regulation (final, temporary, or propo~d)
by or on behalf of the Treasury Department of the United States, the
Internal Revenue Service or other governmental agency shall be issued and
in the case of any such regulation, published in the Federal Register, or
legislation shall have been introduced in, enacted by or favorably reported
to either the House of Representatives or the Senate of the United States,
with respect to Federal taxation upon interest received on bonds of the type
and character of any of the Bonds which, in the reasonable judgment of the
Purchaser, materially adversely affects th_e marketability of the .Bonds or
their sale by the Purchaser, at the contemplated public offering prices; or
(b)
the United States shall have become engaged in hostilities which have
resulted in declaration of war or national emergency, or other national_ or
international calamity or other event shall have occurred or acceler.a, ted to
such an extent as, in the reasonable opinion of the Purchaser, to have a
materially adverse effect on the marketability of the Bonds; or
(c)
there shall have occurred a general suspension of trading on the New York
Stock Exchange; or
(d)
ageneral b~nlclng moratori~rn, s_hall have been declared by United States,
New York State or Washington State authorities; or
Honorable Mayor and City Council
City of Port Townsend
June 29, 1992
Page Three
(e)
legislation shall hereafter be enacted, or ac_ti.vely~ c?.nsidere_d.for~enac~tment,
with an effective date prior to the date of the aelivery of the ~onas, or a
decision by a court of the United States shall hereafter be rendered, or a
ruling or regulation by the Securities and Exchange Commi.~sion or other
governmental agency having jurisdictign of the subject matter shall
hereafter be made, the effect of which is that
(1)
the Bonds are not exempt from the registration, Q,,~lification or
other requirements of the Securities Act of 1933, as ~mended and as
then in effect, or the Securities Exchange Act of 1934, as 9mended
and then in effect, or
(2)
The Bond Ordinance is not exempt from the registration,
qualification or other requirements of the Trust Indenture Act of
1939, as Amended and as then in effect, or
a stop order, ruling or regulation by the Securities and Exchange
Commission shall hereafter be issued or made, the effect of which is that
the issuance, offering or sale of the Bonds, as contemplated herein or in the
Final Official Statement, is in violation of any provision of the Securities
Act of 1933, as Amended and as then in effect, the Securities Exchange Act
of 1934, as ,mended and as then in effect, or the Trust Indenture Act of
1939, as -mended and as then in effect, and which, in its reasonable
judgment, adversely affects the marketability of the Bonds or the market
price thereof.
The Purchaser's obligations hereunder are also subject to the following conditions:
(a)
At or prior to the Closing Seller will deliver, make available to the
Purchaser, or have adopted:
(i)
The Bonds, in def'mitive form and duly executed, or a temporary
bend;
(ii)
A certificate from an authorized officer of Seller, in form and
substance acceptable to the Seller and the Purchaser, stating that
execution of the Certificate shall constitute execution of the Final
Official Statement by Seller, that the Final Official Statement
attached thereto, to the knowledge and belief of such officers, after
due review, does not contain any untrue statement of a material
fact or omit any statement or information which is necessary to
make the statements therein, in the light of the circumstances
under which made, not misleading, and that the representations of
the Seller contained in this agreement were true and correct when
made and are true and correct as of the Closing;
(iii) The approving opinion of Bond Counsel dated the Closing date;
(iv)
Issuance of a municipal bond insurance policy by AMBAC
Indemnity Corporation and assignment to the Bonds of a rating of
Aaa by Moody s Investors Service and AAA by Standard & Poor's
Corporation.
Honorable Mayor and City Council
City of Port Townsend
June 29, 1992
Page Four
(v)
The following documents executed by authorized officers of the
Seller:
(a)
(b)
A certificate, dated the day of the Closing to the effect that
no litigation or other proceedings are pending or threatened
in any way affecting the issuance, sale or delivery of, or
security for, any of the Bonds.
A certificate setting forth the facts, estimates and
circumstances in existence on the date of Closing which
establish that it is not expected that the proceeds of the
Bonds will be used in a m~nner that could cause the Bonds
to be "arbitrage bonds" within the meaning of Section 148 of
the Internal Revenue Code and any applicable regulations
thereunder.
(c)
Such additional certificates, instr~ments or opinions or other
evidence as the Purchaser may deem reasonably necessary
or desirable to evidence the due authorization, execution,
authentication and delivery of the Bonds, the truth and
accuracy as of the time of the Closing of the Seller's
representations and warranties, and _the conformity of the
Bonds and Bond Ordinance with the terms thereof as
summarized in the Official Statement, and to cover such
other matters as it reasonably requests.
(d) A certified copy of the Bond Ordinance.
Seller will pay the cost of preparing, printing and executing the Bonds, the fees
and disbursements of Bond Counsel, bond registration and rating fees and
expenses, bond insurance, the cost of printing and distributing the ,Preliminary
and Final Official Statements, travel and lodging expenses of Seller s employees
and representatives, and other expenses of Seller.
Purchaser will pay fees and disbursements of Purchaser's counsel, if any, the cost
of preparation and fding of blue sky and legal investment surveys where
necessary, Purchaser's travel expenses, and other expenses of Purchaser. As a
convenience to Seller, Purchaser may from time to time, as Seller's agent, make
arrangements for certain items for which Seller is responsible hereunder, such as
printing of the Official Statement and travel or lodging arrangements for Seller's
representatives.
Purchaser also may advance for Seller's account when appropriate the cost of. the
items for which Seller is responsible by m~lrlng payme_nts to third-party vendors.
In such cases, Seller shall pay such costs or expenses directly, upon submission of
appropriate invoices by Purchaser, or promptly reimburse P,urc, haser in the event
Purchaser has advanced such costs or expenses for Sellers account. It is
understood that Seller shall be primarily responsible for payment of all such items
and that Purchaser may agree to advance the cost of such items from time to time
solely as an accommodation to Seller and on the condition that it shall be
reimbursed in full by Seller.
Honorable Mayor and City Council
City of Port Townsend
June 29, 1992
Page Five
This agreement is intended to benefit only the parties hereto, and Seller's
representations and warranties shall survive any investigation made by or for the
Purchaser, delivery and payment for the Bo.rids, and th_e ~rmin. ation of...this
Purchase Contract. Should the Seller fail to satisfy any of the xoregomg conm~lons
or covenants, or if the Purchaser's obligations are terminated for any reasons
avrmitted under this agreement, then neither the Purchaser nor the Seller shall
e any further obligations under this Purchase Contract, except that any
expenses incurred shall be borne in accordance with Section 5.
7. This offer expires on the date, and at the time, set forth on Appendix A.
Respectfully submitted,
SEATTLe-NORTHWEST SECURITIES CORPORATION
By:
Alan G. Dashen, Vice President
Accepted June 29, 1992
INGTON
APPENDIX A
(a)
(b)
(c)
(d)
(e)
(f)
(g)
DESCRIPTION OF BONDS
~7J~S~t: $6,718,890.95 ($98,5175 per $100), plus accrued interest from
the dated date of July 1, 1992 to date of Closing.
]~ilb~[i~: $5,000, or integral multiples thereof, provided that no single
Bond shall represent more than one maturity.
Form: Fully registered.
Interest Payment Dates:
1992.
and December 1, commencing December 1,
Maturity Schedule:
interest as follows:
Bonds shall mature on December 1 of each year and bear
Due Interest Due Interest
Dee. 1 ~ ~tes Dec.~ Amounts Rates
1993 $ 200,000 3.50% 2001 $ 290,000 5.80%
1994 210,000 4.20 2002 310,000 5.90
1995 215,000 4.60 2003 325,000 6.00
1996 225,000 4.80 2004 345,000 6.00
1997 235,000 5.05 2005 370,000 6.15
1998 250,000 5.30 2006 390,000 6.30
1999 260,000 5.50 2007 415,000 6.35
2000 275,000 5.70
$2,505,000 6.375% Term Bonds due December 1, 2012
Ootional Redemotion: The Bonds maturing in years 1993 through 2002,
inclusive, are not-subject to redemption prior_to maturity..The B, onds .m.~at ~u~., g on
or after December 1, 2003, are subject to redemption at the option ot the ~;ky on
aud after December 1, 2002, in whole at any time, or in part o_n any interest
payment date (maturities to be selected by the City and by lot within a maturity
m such monner as the Bond Registrar shall determine) at a price of par plus
accrued interest, if any, to the date of redemption.
Mandatory Redemption: The Bonds maturing in 2012 shall be called for
redemption by lot (in such m~nner as the Bond Registrar shall determine) at par
plus a~crued interest on December I in years and amounts as follows:
2OO8 $440,000
2009 470,000
2010 500,000
2011 530,000
2012 565,000
(h)
~J~)_a~: With definitive Bonds or a temporary Bond on or about July 14,
1992.
(i) ~.ff.e, LF.~I~&: 11:00 p.m., June 29, 1992.
(j) ~J~l..C,~: Preston Thorgrimson Shidler Gates & Ellis.
For Information Purpo_ ses Only:
Net Interest Cost:
6.357%
2305