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Ordinance 1506CITY OF EDMONDS, WASHINGTON ORDINANCE NO. IS-0 C AN ORDINANCE specifying and adopting a system or plan of additions to and betterments and ex- tensions of the waterworks utility of the City ,of Edmonds, Washington, including the sewerage system as a part thereof; declaring the estimated cost as nearly as may be; providing for the issu- ance of $1,000,000.00 par value of "Water and Sewer Revenue Bonds, 1970," of the City to obtain the funds with which to pay a part of the cost of carrying out such system or plan of additions to and betterments and extensions of the waterworks utility of the City, including the system of sewerage as a part thereof; fixing the date, form, maturities, terms and covenants of such bonds; and providing for the calling for bids for the purchase thereof. WHEREAS, the City of Edmonds, Washington, by Ordinance No. 635, passed June 17, 1953, specified and adopted a system or plan of additions to and betterments and extensions of the waterworks system of the City of Edmonds, including additions to and betterments and extensions of the system of sewerage of the City; provided that the existing system of sewerage, including all additions, betterments and extensions thereto, should become a part of the waterworks utility of the City; provided for the issuance of not to exceed $275,000.00 par value of "Water and Sewer Revenue Bonds, 1953," in one or more series to provide the funds required to pay the cost thereof; and provided for the issuance and sale of $135,000.00 par value of bonds as "Series A" for the purpose of obtaining funds to carry out a portion of said system or plan of additions to and betterments and extensions of the sewerage system of the City, which would become a part of the waterworks utility of the City; and WHEREAS, pursuant to Ordinance No. 695, passed April 16, 1957, an additional $140,000.00 par value of said total authorized issue of "Water and Sewer Revenue Bonds, 1953," were issued as "Series B"; and WHEREAS, the City of Edmonds, Washington, by Ordinance No. 773, passed July 7, 1959, specified and adopted a system or plan of additions to and betterments and extensions of the waterworks utility of the City, including the sewerage system as a part thereof, and issued and sold $240,000.00 par value of "Water and Sewer Revenue Bonds, 1959," to obtain the funds with which to pay the cost thereof, the lien and charge upon the gross revenues from the combined water and sewer systems comprising the waterworks utility of the City for such bonds and any parity bonds thereafter issued being junior and inferior to the prior lien and charge upon such gross revenues for the then outstanding "City of Edmonds Water Revenue Bonds, 1949" (all of which bonds have now been retired), "Water and Sewer Revenue Bonds, 1953, Series A," and "Water and Sewer Revenue Bonds, 1953, Series B"; and WHEREAS, by Section 13 of said Ordinance No. 773, the City of Edmonds reserved the right to issue additional and/or refunding water and sewer revenue bonds which would constitute a lien and charge upon the gross revenues of the waterworks utility, including the sewerage system as a part thereof and including all additions thereto and betterments, replacements and extensions thereof at any time made, on a parity with said "Water and Sewer Revenue Bonds, 1959," if the following conditions should be met and complied with at the time of the issuance of such additional and/or refunding water and sewer revenue bonds, to -wit: "l. No deficiency exists in the respective bond redemption funds for the payment of the outstanding 'City of Edmonds Water Revenue Bonds, 1949,' 'Water and Sewer Revenue Bonds, 1953, Series A,' and 'Water and Sewer Revenue Bonds, 1953, Series B.' "2. All payments then required by this Ordinance and any ordinance hereafter enacted pertaining to any bonds hereafter issued, in accordance with the provi- sions of this Section, on a parity of lien with the Bonds shall have been made into the Bond Fund and maintained intact therein. "3. The ordinance authorizing the issuance of such additional bonds shall provide that an amount equal to the average annual debt service of the additional bonds -2- proposed to be issued shall be accumulated as a reserve in the Bond Fund, said amount to be ac- cumulated by monthly deposits commencing not later than one month after the date of issuance of such additional bonds and to be accumulated within five years after the date of issuance and said reserve to be maintained in such amounts so long as any of said additional bonds are outstanding to the last maturity thereof, provided, however, that in the case of refunding bonds the ordinance authorizing the issuance of such refunding bonds shall provide that the money in the 'Reserve Account' in the Bond Fund for the bonds to be refunded shall be retained in the Bond Fund as a reserve for the refunding bonds or the money in any other reserve account or fund for the bonds being refunded shall be transferred to said 'Reserve Account' in the Bond Fund, but if such amount does not equal the said average annual debt service requirements, such required reserve for the refunding bonds shall be accumulated in the same manner and within the same time as set forth herein for additional revenue bonds. "4. There shall be on file with the City Clerk a certificate of a professional engineer experienced in municipal utilities and licensed to practice in the State of Washington to the effect that the gross revenues of the waterworks utility, including the sewerage system as a part thereof, for any twelve consecutive calendar months out of the immediately preceding twenty-four consecutive calendar months, plus the additional revenues anticipated to be re- ceived from the proposed improvement in connection with which such additional water and sewer revenue bonds are to be issued, together with the increase in revenues reasonably anticipated to result from any change in the schedule of water and/or sanitary sew- age disposal rates to be put into effect prior to the issuance of such additional bonds and after giving effect to any probable future increase or decrease in the costs of maintenance and operation of the waterworks utility, including the sewerage system as a part thereof, and to any probable future increase or decrease in gross revenues resulting from growth or shrinkage in the number of water and/or sanitary sewerage service users, are deemed sufficient after the payment of normal operation and maintenance ex- penses, but before depreciation, to equal at least 1.5 times the average annual principal and interest requirements up to and including the final maturity date of all then outstanding water revenue bonds and/or water and sewer revenue bonds, including the Bonds, and of the additional and/or refunding bonds proposed to be so issued up to the final maturity date thereof, provided, however, that if such addi- tional bonds proposed to be so issued are for the sole purpose of refunding outstanding water revenue bonds and/or water and sewer revenue bonds, such certifica- tion of coverage shall not be required if the amount required for the payment of the principal and interest in each year for the refunding bonds is not increased over the amount required for the bonds to be refunded thereby and the maturities of said refunding bonds are not extended beyond the maturities of the bonds to be refunded thereby"; and -3- WHEREAS, the City by Ordinance No. 814, passed May 3, 1960, specified and adopted a system or plan of additions to and betterments and extensions of the waterworks utility of the City, including the sewerage system as a part thereof, and issued and sold $150,000.00 par value of "Water and Sewer Revenue Bonds, 1960," to obtain the funds with which to pay the cost thereof, said bonds having been issued on a parity of lien with the outstanding "Water and Sewer Revenue Bonds, 1959," pursuant to the provisions of Section 13 of Ordinance No. 773; and WHEREAS, the City, by Ordinance No. 909, passed November 21, 1961, specified and adopted a system or plan of additions to and betterments and extensions of the waterworks utility of the City, including the sewerage system as a part thereof, and provided for the issuance and sale of $100,000.00 par value of "Water and Sewer Revenue Bonds, 1961," to obtain the funds with which to pay the cost thereof, said bonds having been issued on a parity of lien with the outstanding "Water and Sewer Revenue Bonds, 1959," and the outstanding "Water and Sewer Revenue Bonds, 1960," pursuant to the provisions of Section 13 of Ordinance No. 773; and WHEREAS, pursuant to Ordinance No. 1042, passed March 3, 1964, the City issued and sold $215,000.00 par value of "Water and Sewer Refunding Revenue Bonds, 1964," to obtain the funds with which to pay, retire and cancel on July 1, 1964, all of the outstanding "Water and Sewer Revenue Bonds, 1953, Series A," and on May 1, 1964, all of the outstanding "Water and Sewer Revenue Bonds, 1953, Series B," all of which bonds were called, paid and retired on said respective call dates and which "Water and Sewer Refunding Revenue Bonds, 1964," were issued on a parity of lien with the outstanding "Water and Sewer Revenue Bonds, 1959," the outstanding "Water and Sewer Revenue Bonds, 1960," and outstanding "Water and Sewer Revenue Bonds, 1961," in accordance with the provisions of Section 13 of Ordinance No. 773; and WHEREAS, pursuant to Ordinance No. 1141, passed September 21, 1965, the City issued and sold $125,000.00 par value of "Water and Sewer Revenue Bonds, 1965," to obtain the funds with which to pay the cost of carrying out a system or plan of additions to and betterments and extensions of the waterworks utility of the City, including the sewerage system as a part thereof, specified by said Ordinance No. 1141, and which "Water and Sewer Revenue Bonds, 1965," were issued on a parity of lien with the outstanding "Water and Sewer Revenue Bonds, 1959," the outstanding "Water and Sewer Revenue Bonds, 1960," the outstanding "Water and Sewer Revenue Bonds, 1961," and the outstanding "Water and Sewer Refunding Revenue Bonds, 1964," in accordance with the provisions of Section 13 of Ordinance No. 773; and WHEREAS, pursuant to Ordinance No. 1207, passed May 17, 1966, the City issued and sold $1,000,000.00 par value of "Water and Sewer Revenue Bonds, 1966," to obtain the funds with which to pay the cost of carrying out a system or plan of additions to and betterments and extensions of the waterworks utility of the City, including the sewerage system as a part thereof, specified and adopted by Ordinance No. 1194, which "Water and Sewer Revenue Bonds, 1966," were issued on a parity of lien with the outstanding "Water and Sewer Revenue Bonds, 1959," the outstanding "Water and Sewer Revenue Bonds, 1960," the outstanding "Water and Sewer Revenue Bonds, 1961," the outstanding "Water and Sewer Refunding Revenue Bonds, 1964," and the outstanding "Water and Sewer Revenue Bonds, 1965," in accordance with the provisions of Section 13 of Ordinance No. 773; and WHEREAS, pursuant to Ordinance No. 1314, passed July 5, 1967, the City issued and sold $400,000.00 par value of "Water and Sewer Revenue Bonds, 1967," of the City to obtain the funds with which to pay the cost of (a) carrying out the system or plan of additions to and betterments and extensions of the waterworks utility of the City, including the system of sewerage as a part thereof, specified and adopted in said Ordinance No. 1314, (b) completing the system or plan of additions to and betterments and extensions of the waterworks utility of the City, including the system of sewerage as a part thereof, specified and adopted by Ordinance No. 1194, passed April 5, 1966, and -5- (c) reimbursing the Water and Sewer Department Operating and Maintenance Funds for a temporary loan as the City's participation in the construction of a lift station in Local Improvement District No. 138, which "Water and Sewer Revenue Bonds, 1967," were issued on a parity of lien with the outstanding "Water and Sewer Revenue Bonds, 1959," the outstanding "Water and Sewer Revenue Bonds, 1960," the outstanding "Water and Sewer Revenue Bonds, 1961," the outstanding "Water and Sewer Refunding Revenue Bonds, 1964," the outstanding "Water and Sewer Revenue Bonds, 1965," and the outstanding "Water and Sewer Revenue Bonds, 1966," in accordance with the provisions of Section 13 of Ordinance No. 773; and WHEREAS, the City Council hereby finds and declares that the public health and welfare require and it is in the best interests of the inhabitants of the City that certain water improvements and sewer improvements be made as hereinafter described; and WHEREAS, the City Council hereby finds and declares that all "City of Edmonds Water Revenue Bonds, 1949," "Water and Sewer Revenue Bonds, 1953, Series A," and "Water and Sewer Revenue Bonds, 1953, Series B," have been paid and retired; that all payments required to be made into the "Water and Sewer Revenue Bond Redemption Fund, 1959," created by Ordinance No. 773 for the payment of the outstanding "Water and Sewer Revenue Bonds, 1959," and all subsequently issued water and sewer revenue bonds on a parity therewith have been made into such fund and maintained intact therein; that provision is hereinafter made for the accumulation in the "Reserve Account" in the "Water and Sewer Revenue Bond Redemption Fund, 1959," of an amount equal to the average annual debt service requirements for the additional $1,000,000.00 par value of water and sewer revenue bonds proposed to be issued within the time required; and that James H. Reid, a professional engineer experienced in municipal utilities and licensed to practice in the State of Washington has certified that the revenues of the waterworks utility of the City, including the sewerage system as a part thereof, to be considered under subparagraph am. 4 of Section 13 of Ordinance No. 773, are sufficient to meet the 1.5 coverage requirement therein specified as evidenced by his certificate to such effect on file with the City Clerk; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DO ORDAIN, as follows: Section 1. The following words as used in this ordinance shall have the following meanings: a. "City" shall mean the City of Edmonds, Washington. b. "Bonds" shall mean the "Water and Sewer Revenue Bonds, 1970," the issuance of which is provided for in this ordinance. C. "1959 Bonds" shall mean the City's "Water and Sewer Revenue Bonds, 1959," issued pursuant to Ordinance No. 773 of the City. d. "Parity Bonds" shall mean the outstanding "Water and Sewer Revenue Bonds, 1960," the outstanding "Water and Sewer Revenue Bonds, 1961," the outstanding "Water and Sewer Refunding Revenue Bonds, 1964," the outstanding "Water and Sewer Revenue Bonds, 1965," the outstanding "Water and Sewer Revenue Bonds, 1966," and the outstanding "Water and Sewer Revenue Bonds, 1967," heretofore issued on a parity of lien with the outstanding 1959 Bonds and any subsequently issued bonds under the conditions and pursuant to the requirements provided in Section 13 of Ordinance No. 773 of the City. e. "Waterworks utility of the City" shall mean the combined sanitary sewerage system and waterworks system of the City, together with all additions thereto or betterments thereof at any time made or constructed. f. "Bond Fund" shall mean the special fund of the City created by Ordinance No. 773 and known as the "Water and Sewer Bond Redemption Fund, 1959," for the payment of the 1959 Bonds and any Parity Bonds, including the Bonds. Section 2. The City of Edmonds hereby specifies and adopts a system or plan for making additions to or betterments and extensions of the waterworks utility of the City consisting of the following: -7- 1. The existing Maple Street water tank at Tenth Avenue and Maple Street shall be repaired and a new 500,000-750,000 gallon steel tank shall be constructed at the same site to provide additional storage for fire protection and water consumption purposes. 2. The City shall participate to the extent of $37,000.00 in the cost of the construction of new storm sewers being installed by the State of Washington Highway Department in 244th Street S.W. and in the replacement of water mains in 76th Avenue and portions of 244th Street S.W. in connection with State Route 104 improvements. 3. The existing steel water mains in 76th Avenue West shall be replaced with 2200 lineal feet of 8-inch and 6-inch cast iron water mains, including the installation of fire hydrants, valves, etc. 4. The existing sewage treatment plant shall be expanded by the construction of two additional clarifiers, entrance structures and standby generators, and the outfall lines shall be extended. 5. Additional property for water storage tank sites shall be acquired in the Five Corners area and at 184th Street S.W. and Sunset Way. 6. There shall be constructed and installed 36-inch, 24- inch, 18-inch and 12-inch concrete and corrugated storm sewer lines in various areas of the City, especially in the Five Corners and Sierra areas, in Lake Ballinger and Meadowdale areas. 7. Approximately 4800 lineal feet of undersized steel water mains shall be replaced with 6-inch and 8-inch cast iron mains in Bowdoin Way and Walnut Street from 9th Avenue to llth Avenue. 8. The existing steel water mains in 9th Avenue from Casper Street to Edmonds Way shall be replaced. 9. The existing steel water mains in 84th Avenue West, south of Five Corners area, shall be replaced with 6-inch cast iron water mains. There shall be included in the foregoing the acquisition of all necessary valves, fittings, couplings, connections, wyes, manholes, equipment and appurtenances and the acquisition of any easements, rights -of -way and land that may be required and there shall be included the performance of any work which may be necessary to the foregoing construction and installation. The City Council expressly reserves the right to make changes in the items listed as a part of the plan providing for additions and betterments where such changes will not substantially alter such plan, such as to make reasonable modifications in locations and in sizes of the storm sewer lines and water supply and transmission mains which would, in the opinion of the City Council, be in the best interest of the City and to proceed with the construction and installation of said improvement in whole or in successive parts or units from time to time as may be advisable and as funds for the same become available. Section 3. The life of the foregoing additions to and betterments and extensions of the waterworks utility of the City is hereby declared to be at least thirty years. Section 4. The estimated cost, as near as may be, of the acquisition, construction and installation of the above -described additions to and betterments and extensions of the waterworks utility of the City is hereby declared to be $1,550,000.00 to be met and defrayed from the proceeds to be received from the issuance of $1,000,000.00 par value of water and sewer revenue bonds and the balance of $550,000.00 from grants anticipated to be received from the United States Government and the State of Washington. Section 5. The gross revenues and benefits to be derived from the operation and maintenance of the waterworks utility of the City, at the rates to be charged for water and for sanitary sewage disposal service on the entire utility will, in the judgment of the City Council, be more than sufficient to meet all expenses of maintenance and operation thereof and to permit the setting aside into a special fund out of the gross revenues of the waterworks utility of the City of sufficient amounts to pay the interest on the bonds herein authorized to be issued and on the outstanding 1959 Bonds and Parity Bonds as such interest becomes due and payable and to pay and redeem all of the said bonds at maturity. am Section 6. For the purpose of obtaining a part of the funds necessary to carry out the system or plan of additions to and betterments and extensions of the waterworks utility of the City, as specified and adopted in Section 2 and hereby ordered to be carried out, there shall be issued and sold $1,000,000.00 par value of "Water, and Sewer Revenue Bonds, 1970" (hereinafter designated as the "Bonds"). The Bonds shall be dated December 1, 1970, shall be in denominations of $5,000.00 each, shall be numbered from 1 to 200, inclusive, shall bear interest payable semiannually on June 1 and December 1 of each year, interest to maturity to be evidenced by coupons to be attached to the Bonds, with full obligation on the part of the City to pay interest at the bond rate from and after the bond maturity dates until the Bonds with interest are paid in full, or sufficient moneys are on deposit in the Bond Fund for such payment in full and the Bonds have been duly called for redemption. Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America at the office of the Treasurer of the City solely out of the Bond Fund. The Bonds shall be a valid claim of the holder thereof only as against the Bond Fund and the fixed amount of the revenues of the waterworks utility of the City pledged to such fund and shall not be a general obligation of the City. The Bonds shall mature in accordance with the following schedule, to -wit: Bond Numbers (Inclusive) Amounts Maturities 1 to 35 $175,000 December 1, 1987 36 to 73 190,000 December 1, 1988 74 to 113 200,000 December 1, 1989 114 to 155 210,000 December 1, 1990 156 to 200 225,000 December 1, 1991 Section 7. The City reserves the right to redeem the outstanding Bonds as a whole, or in part in inverse numerical order, highest numbers first, on December 1, 1982, or on any semiannual interest payment date thereafter, at 102% of par, plus accrued interest to the date of redemption, which redemption price shall reduce 1/2 of 1% annually to par on or after December 1, 1986. -10- Notice of such call for redemption shall be published once not less than 30 nor more than 45 days prior to the call date in the official newspaper of the City and shall also be mailed to the principal underwriter who purchases the Bonds at its principal place of business or local office within the State of Washington, or its successor, within the same period. In addition, such redemption notice shall be sent to Moody's Investors Service, Inc., and Standard & Poor's Corporation, at their offices in New York, New York. Interest on any Bonds so called for redemption shall cease on the date fixed for such redemption upon payment of the redemption price into the Bond Fund. Section 8. The Bond Fund has, by Ordinance No. 773, been divided into a "Principal and Interest Account" and a "Reserve Account." So long thereafter as Bonds are outstanding against the Bond Fund the Treasurer of the City shall set aside and pay into the Bond Fund, in addition to the amounts covenanted to be paid into the Bond Fund by Ordinance No. 773 for the outstanding 1959 Bonds and by Ordinances Nos. 814, 909, 1042, 1141, 1207 and 1314 for the subsequently issued and presently outstanding Parity Bonds, out of the gross revenues of the waterworks utility of the City, a fixed amount without regard to any fixed proportion, namely: (a) Into the "Principal and Interest Account," on or before the first day of each month, beginning with the month of January, 1971, one -sixth of the next ensuing requirements for interest on the Bonds and beginning with the month of January, 1987, one -twelfth of the next ensuing requirements for principal on the Bonds and continuing thereafter until the Bonds, both principal and interest, are paid in full. (b) Into the "Reserve Account," on or before the first day of each month, beginning with January, 1971, not less than a sum equal to one -sixtieth of the average annual debt service requirements for the Bonds until an amount equal to such average annual debt service re- quirements is accumulated by no later than December 1, 1975. The "Reserve Account" may be accumulated from any other moneys which the City may have available for such purpose in addition to using said revenues therefor. The "Reserve Account" shall be maintained in such amount, except for withdrawals therefrom as authorized herein, at -11- all times so long as any Bonds and Parity Bonds are outstanding, PROVIDED that when the total amount in the Bond Fund shall equal the total amount of principal of and interest on all outstanding Bonds, 1959 Bonds and Parity Bonds no further payments need be made into the Bond Fund. In the event there shall be a deficiency in the "Principal and Interest Account" in the Bond Fund to meet maturing installments of either principal or interest, as the case may be, such deficiency shall be made up from the "Reserve Account" by the withdrawal of cash therefrom for that purpose. Any deficiency created in the "Reserve Account" by reason of such withdrawal shall then be made up from the moneys from the revenues of the waterworks utility of the City first available after making necessary provision for the required payments into the "Principal and Interest Account." The moneys in the "Reserve Account" shall otherwise be held intact and may be applied against the outstanding bonds payable out of the Bond Fund. All moneys in the "Reserve Account" above provided for may be kept on deposit in the official bank depository of the City, or in any national bank, or may be invested in United States Government obligations redeemable at a fixed price and maturing not later than the final maturity date of the last outstanding bonds payable out of the Bond Fund. Section 9. The gross revenues from the waterworks utility of the City are hereby pledged to such payment and the Bonds shall constitute a lien and charge upon such revenues prior and superior to any other charges whatsoever, excluding charges for maintenance and operation of the waterworks utility of the City, except that the lien and charge upon such revenues for the Bonds shall be on a parity with the lien and charge upon such revenues for the outstanding 1959 Bonds and Parity Bonds. Section 10. The City Council and corporate authorities of the City hereby declare that in creating the Bond Fund and in fixing the amounts to be paid into the same as aforesaid they have exercised 5W-C due regard for the cost of operation and maintenance of the waterworks utility of the City and the debt service requirements of the presently outstanding 1959 Bonds and Parity Bonds and the City has not bound and obligated itself to set aside and pay into the Bond Fund a greater amount or proportion of the revenues of the said utility than in the judgment of the City Council will be available over and above such costs of maintenance and operation and debt service requirements of said outstanding 1959 Bonds and Parity Bonds and that no portion of the revenues of the waterworks utility of the City has been previously pledged for any indebtedness other than the presently outstanding 1959 Bonds and Parity Bonds. Section 11. The City hereby covenants and agrees with the owner and holder of each Bond at any time outstanding as follows: (a) That it will establish, maintain and collect such rates and charges for water and sanitary sewage disposal service so long as any Bonds are outstanding as, together with the income earned from the invest- ment of the proceeds from the sale of the Bonds, will make available for the payment of the principal of and interest on such Bonds and on outstanding 1959 Bonds and Parity Bonds an amount equivalent to at least 1.5 times the average annual debt service requirements, both principal and interest, of the Bonds and outstand- ing 1959 Bonds and Parity Bonds, after deducting costs of maintenance and operation from the gross revenues of the waterworks utility of the City. (b) That it will at all times maintain and keep the waterworks utility of the City in good repair, working order and condition, and also will at all times operate such utility and the business in connection therewith in an efficient manner and at a reasonable cost. (c) That it will not sell, lease, mortgage or in any manner encumber or dispose of all the property of the waterworks utility of the City, unless provision is made for payment into the Bond Fund of a sum sufficient to pay the principal of and interest on all Bonds at any time outstanding, and that it will not sell, lease, mortgage, or in any manner encumber or dispose of any part of the property of said waterworks utility of the City that is used, useful and material to the operation thereof, unless provision is made for replacement thereof, or for payment into the Bond Fund of the total amount of revenue received which shall not be less than an amount which shall bear the same ratio to the amount of outstand- ing bonds payable out of the Bond Fund as the revenue available for debt service for such outstanding bonds for the twelve months preceding such sale, lease, encumbrance or disposal from the portion of the utility sold, leased, encumbered or disposed of bears to the revenue available -13- for debt service for such bonds from the entire utility for the same period. Any such moneys so paid into the Bond Fund shall be used to retire such outstanding bonds payable out of the Bond Fund at the earliest possible date and until being so used may be invested in the same manner as pro- vided for the investment of the moneys in the "Re- serve Account" in the Bond Fund. (d) That it will while any of the Bonds remains outstanding keep proper and separate accounts and records in which complete and separate entries shall be made of all transactions relating to the water- works utility of the City and it will furnish the original purchaser or purchasers of the Bonds or any subsequent holder or holders thereof at the written request of such holder or holders complete operating and income statements of said utility in reasonable detail covering any calendar year not more than ninety days after the close of such calendar year and it will grant any holder or holders of at least twenty-five percent of the outstanding Bonds the right at all reasonable times to inspect the entire waterworks utility of the City and all records, accounts and data of the City relating thereto. Upon request of any holder of any of said Bonds, it will also furnish to such holder a copy of the most recently completed audit of the City's accounts by the State Auditor of Wash- ington. (e) That it will not furnish water or sanitary sewage disposal service to any customer whatsoever free of charge and will promptly take legal action to enforce collection of all delinquent accounts. (f) That it will carry the types of insurance on the properties of the waterworks utility of the City in the amounts normally carried by private water and sewer companies engaged in the operation of water and sewer- age systems, and the cost of such insurance shall be considered a part of operating and maintaining said utility. If, as, and when, the United States of America or some agency thereof shall provide for War Risk Insur- ance, the City further agrees to take out and maintain such insurance on all or such portions of said system on which such War Risk Insurance may be written in an amount or amounts to cover adequately the value thereof. (g) That it will pay all costs of maintenance and operation of the waterworks utility of the City and the debt service requirements for the outstanding 1959 Bonds and Parity Bonds and otherwise meet the obligations of the City as herein set forth. Section 12. In the event the City shall issue advance refunding bonds pursuant to the laws of the State of Washington to pay the principal of and interest on the Bonds or such portion thereof included in the refunding plan as the same become due and payable and to refund all such then outstanding Bonds and to pay the costs of -14- refunding, and shall have irrevocably set aside for and pledged to such payment and refunding, moneys and/or direct obligations of the United States of America sufficient in amount, together with known earned income from the investment thereof, to make such payments and to accomplish the refunding as scheduled, and shall irrevocably make provisions for redemption of such Bonds, then in that case all right and interest of the owners or holders of the Bonds to be so retired or refunded and the appurtenant coupons in the covenants of this Ordinance and in the revenues, funds and accounts obligated to the payment of such Bonds, except the right to receive the funds so set aside and pledged, shall thereupon cease and become void and the City may then apply any moneys in any fund or account established for the payment or redemption of such Bonds or coupons to any lawful purposes as it shall determine. In the event that the refunding plan provides that the refunding bonds be secured by cash and/or direct obligations of the United States of America pending the prior redemption of those Bonds being refunded and if such refunding plan also provides that certain cash and/or direct obligations of the United States of America are irrevocably pledged for the prior redemption of those Bonds included in the refunding plan, then only the debt service on the Bonds and the refunding bonds payable from revenues shall be included in the computation of coverage for issuance of Parity Bonds and the annual computation of coverage for determining compliance with the rate covenants. Section 13. The City agrees that it will not hereafter issue any water and sewer revenue bonds which will constitute a lien and charge against the gross revenues of the waterworks utility of the City prior to or on a parity with the lien and charge against such revenues required to be made into the Bond Fund for the payment of the Bonds and the outstanding 1959 Bonds and Parity Bonds, except that it hereby reserves the right to issue additional and/or refunding Parity 2167C Bonds if the conditions and requirements set forth in Section 13 of Ordinance No. 773 passed July 7, 1959, are met and complied with at the time of the issuance of such Parity Bonds, which section is by this reference incorporated herein and made a part hereof and shall be applicable to the Bonds and such additional and/or refunding Parity Bonds after the payment and retirement of the 1959 Bonds. form: Section 14. No. The Bonds shall be in substantially the following UNITED STATES OF AMERICA STATE OF WASHINGTON CITY OF EDMONDS WATER AND SEWER REVENUE BOND, 1970 $5,000.00 KNOW ALL MEN BY THESE PRESENTS: That the City of Edmonds, Washington, for value received, promises to pay to bearer on the FIRST DAY OF DECEMBER, 19_, the principal sum of FIVE THOUSAND DOLLARS together with interest thereon at the rate of PERCENT ( %) per annum, payable semiannually on June 1 and December 1 of each year, upon presentation and surrender of the attached interest coupons as they severally mature up to the bond maturity date and with full obligation on the part of the City to pay interest at the same rate from and after the bond maturity date until this bond with interest is paid in full, or funds are available in the "Water and Sewer Revenue Bond Redemption Fund, 1959" (hereinafter called the "Bond Fund"), for payment in full. Both principal of and interest on this bond are payable in lawful money of the United States of America at the office of the City Treasurer of Edmonds, Washington, solely out of the special fund created by Ordinance No. 773, and referred to herein as the "Bond Fund," into which fund the City of Edmonds hereby irre- vocably binds itself to pay certain fixed amounts out of the gross revenues of the waterworks utility of the City, including the sewerage system as a part thereof, now belonging to or which may hereafter belong to the City, including all additions, extensions and better- ments thereof now or at any time made or constructed, without regard to any fixed proportion, namely, amounts sufficient to pay the principal of and interest on this issue of bonds, on the outstanding "Water and Sewer Revenue Bonds, 1959," "Water and Sewer Revenue Bonds, 1960," "Water and Sewer Revenue Bonds, 1961," "Water and Sewer Refunding Revenue Bonds, 1964," "Water and -16- Sewer Revenue Bonds, 1965," "Water and Sewer Revenue Bonds, 1966," and "Water and Sewer Revenue Bonds, 1967," as they respectively become due and to maintain a reserve, all at the times and in the manner set forth in Ordinances Nos. 773, 814, 909, 1042, 1141, 1207, 1314 and / -rDG . The gross revenues from the combined water and sewer- age systems, comprising the waterworks utility of the City, are hereby pledged to such payment, and the bonds of this issue constitute a lien and charge upon such revenues prior and superior to any other charges what- soever, excluding charges for maintenance and operation, except that the lien and charge upon said revenues for this issue of bonds shall be on a parity with the lien and charge upon such revenues for the outstanding "Water and Sewer Revenue Bonds, 1959," "Water and Sewer Revenue Bonds, 1960," "Water and Sewer Revenue Bonds, 1961," "Water and Sewer Refunding Revenue Bonds, 1964," "Water and Sewer Revenue Bonds, 1965," "Water and Sewer Revenue Bonds, 1966," "Water and Sewer Revenue Bonds, 1967," and any additional water and sewer revenue bonds which may be hereafter issued, in accordance with the provisions of Section 13 of Ordinance No. 773. This bond is one of a total issue of $1,000,000.00 par value of bonds, all of like date, tenor and effect, except as to maturities (and interest rates if more than one interest rate is bid), all payable from the Bond Fund and all issued by the City under and in pur- suance of the laws of the State of Washington and Ordinance No. /rc>G of the City, for the purpose of providing the funds to pay a part of the cost of carry- ing out the system or plan of additions to and better- ments and extensions of the waterworks utility of the City, including the system of sewerage as a part thereof, specified and adopted by Ordinance No. Ig-09 . Reference to Ordinance No. 4t-> 6 is hereby made as more fully describing the covenants with and rights of holders of bonds of this issue. The City reserves the right to redeem the outstanding bonds as a whole, or in part in inverse numerical order, highest numbers first, on December 1, 1982, or on any semiannual interest payment date thereafter, at 102% of par, plus accrued interest to the date of redemption, which redemption price shall reduce 1/2 of 1% annually to par on or after December 1, 1986. Notice of such call for redemption shall be published once not less than 30 nor more than 45 days prior to the call date in the official newspaper of the City and shall also be mailed to (the principal underwriter who purchases the bonds at its principal place of business or local office within the State of Washington), or its successor, within the same period. In addition, such redemption notice shall be sent to Moody's Investors Service, Inc., and Standard & Poor's Corporation, at their offices in New York, New York. Interest on any bonds so called for redemption shall cease on the date fixed for such redemption upon payment of the redemption price into the Bond Fund. -17- The City of Edmonds hereby covenants and agrees with the holders of each and every one of the bonds of this issue to fully carry out all covenants and meet all ob- ligations of the City, as herein set forth and as set forth in Ordinance No. /5-c4 . It is hereby certified and declared that the bonds of this issue are issued pursuant to and in strict compliance with the constitution and the laws of the State of Washington and the ordinances of the City of Edmonds, and that all acts, conditions and things re- quired to be done precedent to and in the issuance of this bond have happened, have been done and have been performed as required by law. IN WITNESS WHEREOF, the City of Edmonds, Washington, has caused this bond to be signed by the facsimile signature of the Mayor and attested by the manual sig- nature of the City Clerk and its corporate seal to be hereto affixed and the interest coupons attached to be signed with the facsimile signatures of said of- ficials this lst day of December, 1970. CITY�OF EDMONDS,,WASHINGTON P By (facsimile signature) Mayor ATTEST: City Clerk The interest coupons attached to the Bonds shall be in substantially the following form: Coupon No. On the 1ST DAY OF (JUNE)(DECEMBER), 19 , the CITY OF EDMONDS, WASHINGTON, upon presentation and surrender of this coupon, will pay to the bearer at the office of the City Treasurer the amount shown hereon in lawful money of the United States of America from the special fund of said City, known as the "Water and Sewer Revenue Bond Redemption Fund, 1959," said sum being six months' interest then due on its "Water and Sewer Revenue Bond, 1970," dated December 1, 1970, and numbered CITY OF EDMONDS, WASHINGTON By (fTaaCsimile sig ature) Mayor ATTEST: (facsimile signature) City Clerk The Bonds shall be printed on lithographed forms, shall be signed by the facsimile signature of the Mayor and attested by the manual signature of the Clerk and shall have the seal of the City of Edmonds affixed thereto and the interest coupons shall bear the facsimile signatures of the Mayor and the Clerk. Section 15. The Clerk of the City of Edmonds is hereby directed to publish in the Daily Journal of Commerce of Seattle, Washington, at least ten days prior to the sale date, a Notice of Bond Sale of the Bonds calling for bids for the purchase thereof to be received in the Council Chambers in the City Hall in Edmonds, Washington, until 8:00 o'clock p.m. (PST) on November 17, 1970, at which time the bids will be publicly opened and considered at a meeting of the City Council then to be held at such time and place. Each bidder shall seal his bid in an envelope with a good - faith deposit in the form of a certified or cashier's check made payable to the Treasurer of the City of Edmonds, Washington, in the sum of at least $20,000.00. If the successful bidder shall fail or neglect to complete the purchase of the Bonds in accordance with his or its bid within thirty-five days following the acceptance thereof, and the Bonds are ready for delivery, the amount of his deposit shall be forfeited to the City. No bid agreeing to pay less than 98% of the par value of the Bonds, plus accrued interest, will be considered. One or more rates of interest may be fixed for the Bonds, and must be in multiples of 1/8 or 1/10 of 1%, or both. No more than one rate of interest may be fixed for any single maturity. The maximum differential between the lowest and the highest coupon rates named in any bid shall not exceed 1-1/2%. Only one coupon will be attached to each Bond for each installment of interest thereon and bids providing for additional or supplemental coupons will be rejected. All bids shall state the total amount of the coupon interest over the life of the Bonds and the net interest cost to the City, which -19- shall be computed by deducting from such coupon interest the premium, if any, or adding the discount, if any. For the purpose of evaluating the bids only, the coupon rates being controlling, each bid shall also state the net effective interest rate over the life of the Bonds. The Bonds will be awarded to the bidder offering to purchase all of the same at the lowest net interest cost to the City. The City reserves the right to reject any and all bids submitted and to waive any informalities or irregularities therein. The printed Bonds will be delivered without cost to the purchaser thereof within thirty-five days of the date of acceptance of the offer to purchase at the City Hall in Edmonds, Washington, or at any bank in Seattle, Washington, at the purchaser's option. Delivery at any other place within the United States will be made at the purchaser's option and expense. The opinion of Roberts, Shefelman, Lawrence, Gay & Moch, municipal bond counsel of Seattle, Washington, approving the legality of the issuance of the Bonds will be delivered to the purchaser without cost and will be printed on each of the Bonds. A no -litigation certificate in the usual form will also be included in the closing papers. The Notice of Bonds Sale to be published shall provide that copies of the Official Statement relating to the Bonds may be obtained from the City Clerk or from Foster & Marshall Inc., 205 Columbia Street, Seattle, Washington, the City's financial consultant. PASSED by the City Council at a regular meeting thereof and APPROVED by the Mayor of the City of Edmonds, Washington, this 20th day of October, 1970. ATTEST: i City Clerk FORM APPROVED: � ,Q.c.LGs q J0 City Att i ' Mayor ` -20-