Ordinance 1603CITY OF EDMONDS, WASHINGTON
ORDINANCE NO. 1603
AN ORDINANCE of the City of Edmonds, Wash-
ington, providing for the issuance of
$1,035,000.00 par value of its "Water and
Sewer Revenue Refunding Bonds, 1972," for the
purpose of providing funds to redeem
$1,000,000.00 par value of its outstanding
"Water and Sewer Revenue Bonds, 1970"; fixing
the date, form, denomination, maturities,
interest rate, terms and covenants of such
refunding bonds; creating a special account in
the bond redemption fund to provide for the
refunding operation; providing for and authorizing
the purchase of certain direct obligations of
the United States of America out of the proceeds
of the sale of such refunding bonds and for the
use and application of the moneys to be derived
from such investment; providing for the
redemption on December 1, 1982, of the then
outstanding "Water and Sewer Revenue Bonds, 1970"';
and providing for the sale and delivery of the
refunding bonds to Seattle -Northwest Securities
Corporation of Seattle, Washington.
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
290
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" (hereinafter referred to as the "Outstanding 1959 Bonds"),
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 Outstanding 1959 Bonds 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
provisions of this Section, on a parity of lien with
the Bonds shall have been made into the Bond Fund
and maintained intact therein.
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"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
proposed to be issued shall be accumulated as a
reserve in the Bond Fund, said amount to be
accumulated 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 anv twelve
consecutive calendar months out of the immediatelv
preceding twenty-four consecutive calendar months,
plus the additional revenues anticipated to be
received 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 sewage
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
expenses, 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
additional 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 certification of coverage shall not be required
if the amount required for the payment of the principal
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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
WHEREAS, the City by Ordinance No. 814, passed May 3, 1960,
heretofore issued and sold $150,000.00 par value of "Water and Sewer
Revenue Bonds, 1960" (hereinafter referred to as the "Outstanding
1960 Bonds"), and by Ordinance No. 909, passed November 21, 1961,
heretofore issued and sold $100,000.00 par value of "Water and Sewer
Revenue Bonds, 1961" (hereinafter referred to as the "Outstanding
1961 Bonds"), both of said bond issues having been issued on a parity
of lien with the outstanding "Water and Sewer Revenue Bonds, 1959,"
and with each other 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`° (hereinafter referred to as
the "Outstanding 1964 Bonds"), 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 Outstanding 1964 Bonds were issued
on a parity of lien with the Outstanding 1959 Bonds, the Outstanding
1960 Bonds and the Outstanding 1961 Bonds 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" (hereinafter referred to as the
"Outstanding 1965 Bonds"), 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" (hereinafter referred to as the
"Outstanding 1966 Bonds"), pursuant to Ordinance No. 1314, passed
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July 5, 1967, the City issued and sold $400,000.00 par value of
"Water and Sewer Revenue Bonds, 1967" (hereinafter referred to as
the "Outstanding 1967 Bonds"), and pursuant to Ordinance No. 1506,
passed October 20, 1970, the City issued and sold $1,000,000.00
par value of "Water and Sewer Revenue Bonds, 1970" (hereinafter
referred to as the "Outstanding 1970 Bonds"), all of which bond
issues were issued on a parity of lien with the Outstanding 1959
Bonds and all subsequent issues of parity bonds above referred to
and with each other in accordance with the provisions of Section 13
of Ordinance No. 773; and
WHEREAS, as provided in Ordinance No. 1506 and in the
Outstanding 1970 Bonds, the City reserved the right to redeem such
outstanding bonds in inverse numerical order on December 1, 1982,
or on any semiannual interest payment date thereafter at 102% of
par plus accrued interest to date of redemption, which redemption
price shall reduce 1/2 of 1% annually to par on or after December 1,
1986, and all of said Outstanding 1970 Bonds will be outstanding on
December 1, 1982, and bear interest at various rates ranging from
6.70% to 7.00% per annum; and
WHEREAS, after due consideration it appears to the City
Council that all of the Outstanding 1970 Bonds may be refunded at
the earliest possible date by the issuance and sale of refunding
bonds so that a substantial savings will be effected by the difference
between the principal and interest cost over the life of the refunding
bonds and the principal and interest cost over the life of such
Outstanding 1970 Bonds; and
WHEREAS, in order to effect such refunding in the manner
that will be most advantageous to the City it is hereby found
necessary and advisable that certain direct obligations of the United
States of America, bearing interest and maturing at such time or
times as necessary to pay the interest on the refunding bonds until
the said Outstanding 1970 Bonds are refunded and retired and to pay
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the principal of such Outstanding 1970 Bonds on the date when such
bonds are to be called for such redemption, be purchased out of
the proceeds of the sale of the refunding bonds herein authorized;
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 1959 Bonds 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 retention 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
$1,035,000.00 par value of refunding 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
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, such certifying engineer
having taken into consideration the fact that no debt service payable
out of the revenues of the waterworks utility of the City will arise
for the refunding bonds until after September 1, 1983, and that
debt service payable out of such revenues for the Outstanding 1970
Bonds to be refunded will continue only until December 1, 1982, at
which time the Outstanding 1970 Bonds will be paid and retired and
debt service on the refunding bonds payable out of such revenues
will then commence on such date; NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DO
ORDAIN, as follows:
Section 1. For the purpose of providing the funds
necessary to redeem and retire on December 1, 1982, all of the
Outstanding 1970 Bonds in the principal amount of $1,000,000.00 and
to pay the costs of such refunding plan, there shall be issued and
sold $1,035,000.00 par value of refunding water and sewer revenue
bonds of the City. The bonds shall be designated "Water and Sewer
Revenue Refunding Bonds, 1972" (hereinafter called the "Bonds").
The Bonds shall be in denominations of $5,000.00 each, shall be
numbered from 1 to 207, inclusive, shall be dated March 1, 1972,
shall bear interest at the rate of 5-3/4% per annum, payable on
September 1, 1972, and semiannually thereafter on each succeeding
March 1 and September 1, 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 same rate from and after
the Bond maturity dates until the Bonds with interest are paid in
full or funds sufficient to pay such Bonds with interest in full
are on deposit in the bond redemption fund hereinafter referred to
and the Bonds have been duly called for redemption. The Bonds
shall mature in accordance with the following schedule, to -wit:
Bond Numbers
(Inclusive)
Amounts
Maturities
1
to
2
$ 10,000
September
1,
1983
3
to
4
10,000
September
1,
1984
5
to
6
10,000
September
1,
1985
7
to
8
10,000
September
1,
1986
9
to
45
185,000
September
1,
1987
46
to
85
200,000
September
1,.1988
86
to
127
210,000
September
1,
1989
128
to
170
215,000
September
1,
1990
171
to
207
185,000
September
1,
1991
Section 2. 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 Director of Finance of the City of Edmonds,
Washington. The Bonds shall be payable solely out of the special
fund created by Ordinance No. 773 and known as the "Water and Sewer
orm
Bond Redemption Fund, 1959" (hereinafter referred to as the "Bond
Fund"), and shall be a valid claim of the holder thereof only as
against such special fund and the fixed amount of the revenues of
the waterworks utility of the City, including the sewerage system as
a part thereof (such combined systems being hereinafter referred to
as "the waterworks utility of the City"), pledged to such fund
(including the investment income from United States obligations
to pay interest on the Bonds to September 1, 1982), and shall not
be a general obligation of the City of Edmonds.
Section 3. The City of Edmonds reserves the right to
redeem the Bonds as a whole, or in part in inverse numerical order,
on March 1, 1983, or on any semiannual interest payment date
thereafter at the following redemption prices expressed as a
percentage of par value, plus accrued interest to date of redemption,
if called on the following dates:
On March 1, 1983, September 1, 1983,
or March 1,
1984
102%
On September
1, 1984,
or March 1, 1985
101-1/2%
On September
1, 1985,
or March 1, 1986
101%
On September
1, 1986,
or March 1, 1987
100-1/2%
On or after September
1, 1987
100%
Notice of such call for redemption shall be published
once not less than thirty nor more than forty-five days prior to
the call date in the official newspaper of the City and shall also
be mailed to Seattle -Northwest Securities Corporation at its principal
place of business in Seattle, Washington, within the same period. In
addition, such redemption notices shall also 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 on
payment of the redemption price into the Bond Fund.
Section 4. The Bond Fund has heretofore been divided into
two accounts, namely, a "Principal and Interest Account" and a
"Reserve Account." There is hereby also created and established in
the Bond Fund a third account to be known as the "1972 Refunding
Bonds Account." Immediately upon receipt of payment in full for the
Bonds a sufficient amount of the principal proceeds received to pay
all costs of the refunding operation shall be deposited in the
"Water and Sewer Fund" of the City. The principal proceeds received
from the sale of the Bonds, together with the accrued interest
received, shall be deposited in the "1972 Refunding Bonds Account"
and then shall be used immediately to purchase $1,005,000.00 par
value of United States Treasury Bonds due February.15, 1982, bearing
6-3/8% interest and yielding 6.3% interest. The National Bank of
Commerce of Seattle, Seattle, Washington, has agreed to provide
this investment at a cost of $1,010,025.00, plus accrued interest.
The United States Treasury Bonds to be purchased as above
provided shall be registered as to principal and interest in the
name of the "Director of Finance of the City of Edmonds, Washington,
trustee for the Water and Sewer Revenue Bond Redemption Fund, 1959,
1972 Refunding Bonds Account." All of such United States Treasury
Bonds shall be held in the custody of the Director of Finance for
such "Refunding Bonds Account" in the Bond Fund, and shall be placed
in safekeeping with any bank normally used by such Director of
Finance for safekeeping of City securities.
All the money received as principal of or interest on
such Government obligations shall be held by the Director of Finance
for the credit of the City for the "1972 Refunding Bonds Account"
in the Bond Fund and shall be held in trust and shall be used for
the sole purpose of paying the interest on the Bonds until the
Outstanding 1970 Bonds shall have been called, retired and paid and
for the purpose of paying the principal of said Outstanding 1970
Bonds on the date they are to be called for redemption as aforesaid.
All interest on and principal of the above -described Government
obligations received prior to the time such money is needed to make
any payment of interest on the Bonds or the principal of the
Outstanding 1970 Bonds to be called and retired on December 1, 1982,
as provided herein, may be invested and reinvested only in United
States Government obligations maturing prior to the date or dates
such money will be needed for such payment.
Any moneys remaining in the "1972 Refunding Bonds Account"
in the Bond Fund after the payment and retirement in full of the
Outstanding 1970 Bonds on December 1, 1982, shall be transferred and
paid into the "Principal and Interest Account" in the Bond Fund.
Section 5. So long as Bonds are outstanding against the
Bond Fund the Director of Finance of the City of Edmonds shall set
aside and pay into the Bond Fund out of the gross revenues of the
waterworks utility of the City a fixed amount without regard to any
fixed proportion, namely, into the "Principal and Interest Account,"
monthly, on or before the 20th day of each month beginning with the
month of September, 1982, and continuing thereafter one -sixth of the
next ensuing six months' requirements of interest and one -twelfth of
the next ensuing twelve months' requirements of principal on the
Bonds.
After the payment and retirement on December 1, 1982, of
the Outstanding 1970 Bonds, all moneys then on deposit in the
"Reserve Account" in the Bond Fund (being not less than the aggregate
sum of $293,496.00) for all parity bonds then outstanding, including
the Bonds, shall be retained therein and shall thereafter be
maintained in such amount, except for withdrawals therefrom as
authorized herein, at all times so long as any of the bonds payable
out of the Bond Fund is outstanding.
In the event that there should 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 any 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
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moneys in the "Reserve Account" shall otherwise be held intact and
may be applied against the last 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
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. Interest
earned on any such investments or on such bank deposit shall be
deposited in the "Principal and Interest Account."
Section 6. Subject to the redemption on December 1, 1982,
of all of the Outstanding 1970 Bonds as herein provided, the gross
revenues from the waterworks utility of the City are hereby pledged
to the payments required to be made as set forth in the immediately
preceding section and the Bonds shall constitute a lien and charge
upon such gross 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
those revenues for the Bonds shall be on a parity with the lien and
charge upon such gross revenues, after the payment and retirement
of the Outstanding 1970 Bonds, for the Outstanding 1959 Bonds, the
Outstanding 1960 Bonds, the Outstanding 1961 Bonds, the Outstanding
1964 Bonds, the Outstanding 1965 Bonds, the Outstanding 1966 Bonds,
the Outstanding 1967 Bonds and any additional water and sewer
revenue bonds which may be hereafter issued on a parity with the
Outstanding 1959 Bonds, the Outstanding 1960 Bonds, the Outstanding
1961 Bonds, the Outstanding 1964 Bonds, the Outstanding 1965 Bonds,
the Outstanding 1966 Bonds, the Outstanding 1967 Bonds, the Outstanding
1970 Bonds (prior to the payment and retirement of such Outstanding
1970 Bonds on December 1, 1982) and the Bonds in accordance with
the provisions of Section 13 of Ordinance No. 773 and Section
10 of this ordinance.
men
Section 7. In the judgment of the City Council, 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 sanitary sewage disposal service on the entire utility
will be more than sufficient to meet all expenses of operation and
maintenance thereof and the debt service requirements of the
Outstanding 1959 Bonds, the Outstanding 1960 Bonds, the Outstanding
1961 Bonds, the Outstanding 1964 Bonds, the Outstanding 1965 Bonds,
the Outstanding 1966 Bonds, the Outstanding 1967 Bonds and the
Outstanding 1970 Bonds (prior to the payment and retirement of such
Outstanding 1970 Bonds on December 1, 1982) and to permit the setting
aside in the Bond Fund out of the gross revenues of the entire utility
of amounts sufficient to pay the interest on the Bonds as such
interest becomes payable after September 1, 1982, and to pay and
redeem all of the Bonds at maturity. The City Council and corporate
authorities of the City of Edmonds further hereby declare that in
creating the Bond Fund and in fixing the amounts to be paid into
the same, as aforesaid, they have exercised 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 bonds
above referred to 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 cost of maintenance
and operation and debt service requirements of said outstanding
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 outstanding bond issues above referred to.
Section 8. 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 will make available (1)
for the payment of the principal of and interest
on the Outstanding 1959 Bonds, the Outstanding
1960 Bonds, the Outstanding 1961 Bonds, the
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Outstanding 1964 Bonds, the Outstanding 1965 Bonds,
the Outstanding 1966 Bonds, the Outstanding 1967
Bonds and the Outstanding 1970 Bonds an amount
equivalent to at least 1.5 times the average annual
debt service requirements, both principal and
interest, on all outstanding bonds of said bond
issues after deducting costs of maintenance and
operation from the gross revenues of the waterworks
utility of the City until the Outstanding 1970
Bonds are paid and retired on December 1, 1982, and
(2) thereafter for the payment of the principal of
and interest on the Outstanding 1959 Bonds, the
Outstanding 1960 Bonds, the Outstanding 1961 Bonds,
the Outstanding 1964 Bonds, the Outstanding 1965
Bonds, the Outstanding 1966 Bonds, the Outstanding
1967 Bonds and the Bonds an amount equivalent to at
least 1.5 times the average annual debt service
requirements, both principal and interest, on all
outstanding bonds of said bond issues after
deducting costs of maintenance and operation from
the gross revenues of the waterworks utility of
the Citv.
(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 that 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
anv 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 outstanding
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 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
provided for the investment of the moneys in the
°Reserve Account" in the Bond Fund.
(d) That it will, while any of the Bonds remain
outstanding, keep proper and separate accounts and
records in which complete and separate entries shall
be made of all transactions relating to its waterworks
utility, and it will furnish the original purchaser
or purchasers of the Bonds or any subsequent holder
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form:
or holders thereof, at the written request of such
holder or holders, complete operating and income
statements of the waterworks 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 25% 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 the
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 Washington, or such
other audit as is authorized by law in lieu thereof.
(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 type of insurance on
its waterworks utility property in the amounts
normally carried by private water and sewer companies
engaged in the operation of water and sewerage systems,
and the cost of such insurance shall be considered
part of the operating and maintaining of said utility.
If, as, and when, the United States of America or some
agency thereof shall provide for war risk insurance,
the City further agrees to take out and maintain such
insurance on all or such portion of the 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 of the Outstanding
1959 Bonds, the Outstanding 1960 Bonds, the Outstanding
1961 Bonds, the Outstanding 1964 Bonds, the Outstanding
1965 Bonds, the Outstanding 1966 Bonds, the Outstanding
1967 Bonds, the Outstanding 1970 Bonds prior to their
redemption on December 1, 1982, and the Bonds and
otherwise meet the obligations of the City as herein
set forth.
Section 9. The Bonds shall be substantially in the following
No. $5,000.00
UNITED STATES OF AMERICA
STATE OF WASHINGTON
CITY OF EDMONDS
WATER AND SEWER REVENUE REFUNDING BOND, 1972
5-3/4%
KNOW ALL MEN BY THESE PRESENTS: That the City
of Edmonds, State of Washington, for value received
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promises to pay to bearer on the FIRST DAY OF
SEPTEMBER, 19 , the principal sum of
FIVE THOUSAND DOLLARS
together with interest thereon at the rate of FIVE
AND THREE-QUARTERS PERCENT (5-3/4%) per annum, payable
on September 1, 1972, and semiannually thereafter on
each succeeding March 1 and September 1, upon
presentation and surrender of the attached interest
coupons as they severally mature up to the bond
maturity date until this bond with interest is paid
in full, or funds are available in the "Water and
Sewer Bond Redemption Fund, 1959" (hereinafter
called the "Bond Fund"), for payment in full and
this bond has been duly called for redemption.
Both principal of and interest on this bond are
payable in lawful money of the United States of
America at the office of the Director of Finance
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 irrevocably binds itself to pay the
principal proceeds received from the issuance of this
bond and all investment income therefrom and certain
fixed amounts out of the gross revenues of the
waterworks utility, including the sewerage system as
a part thereof, now belonging to or which may hereafter
belong to the City, including all additions, extensions
and betterments 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 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
"Water and Sewer Revenue Bonds, 1970," until the same
are redeemed on December 1, 1982, and thereafter on
this issue of bonds, 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, 1506 and /6433.
The gross revenues from the combined water and
sewerage systems, comprising the waterworks utility
of the City, have been pledged to the payments
required to be made as set forth in Section 5 of
Ordinance No. /Gp T , and subject to the redemption
on December 1, 1982, of all of the outstanding "Water
and Sewer Revenue Bonds, 1970," as provided in
Ordinance No. , oJ, the bonds of this issue shall
constitute a lien and charge on 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 those revenues for the bonds of
this issue shall, after the payment and retirement
of the outstanding "Water and Sewer Revenue Bonds,
1970," be on a parity with the lien and charge upon
such gross revenues for the outstanding "Water and
Sewer Revenue Bonds, 1959," "Water and Sewer Revenue
Bonds, 1960," "Water and Sewer Revenue Bonds, 1961,"
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"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 on a
parity with the lien and charge upon such gross
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," "Water
and Sewer Revenue Bonds, 1970" (prior to the payment
and retirement of such outstanding "Water and Sewer
Revenue Bonds, 1970," on December 1, 1982), and the
bonds of this issue in accordance with the provisions
of Section 13 of Ordinance No. 773 and Section 10 of
Ordinance No. IkO? .
This bond is one of a total issue of $1,035,000.00
Par value of bonds, all of like date, tenor and effect,
except as to maturities, all payable from the Bond Fund
and all issued by the City under and in pursuance of
the laws of the State of Washington, particularly
Chapter 138, Laws of 1965, lst Ex. Ses. (RCW Chapter
39.53), and Ordinance No. 1401 for the purpose of
providing the funds to refund, pay and retire on
December 1, 1982, $1,000,000.00 par value of outstanding
"Water and Sewer Revenue Bonds, 1970," and to pay the
costs of such refunding plan.
The City of Edmonds has reserved the right to redeem
the bonds as a whole, or in part in inverse numerical
order, on March 1, 1983, or on any semiannual interest
payment date thereafter at the following redemption
prices expressed as a percentage of par value, plus
accrued interest to date of redemption, if called on
the following dates:
On March 1, 1983, September 1, 1983,
or March 1,
1984
102%
On September
1, 1984,
or March 1, 1985
101-1/2%
On September
1, 1985,
or March 1, 1986
101%
On September
1, 1986,
or March 1, 1987
100-1/2%
On or after September
1, 1987
100%
Notice of such call for redemption shall be published
once not less than thirty nor more than forty-five days
prior to the call date in the official newspaper of the
City and shall also be mailed to Seattle -Northwest
Securities Corporation at its principal place of
business in Seattle, Washington, within the same period.
In addition, such redemption notices shall also 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 on
payment of the redemption price into the Bond Fund.
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
obligations of the City, as set forth in Ordinance No.
/42, to which ordinance reference is hereby made as
more fully describing the covenants with and rights
of holders of bonds of this issue.
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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
required 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, Wash-
ington, has caused this bond to be signed by the
facsimile signature of its Mayor and attested by
the manual signature of its City Clerk and its
corporate seal to be hereto affixed, and the interest
coupons attached to be signed with the facsimile
signatures of said officials this first day of March,
1972.
CITY OF EDMONDS, WASHINGTON
By (facsimile signature)
Mayor
ATTEST:
City Clerk
The interest coupons attached to the Bonds shall be in
substantially the following form:
Coupon No.
$143.75
On the FIRST DAY OF (MARCH) (SEPTEMBER) , 19 , the
CITY OF EDMONDS, WASHINGTON, upon presentation and
surrender of this coupon will pay to bearer at the
office of the Director of Finance the sum shown
hereon in lawful money of the United States of America
from the special fund of said City known as the "Water
and Sewer Bond Redemption Fund, 1959," said sum being
six months' interest then due on its "Water and Sewer
Revenue Refunding Bond, 1972," dated March 1, 1972,
and numbered
CITY OF EDMONDS, WASHINGTON
By (facsimile signature)
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 City 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 City Clerk.
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Section 10. The City reserves the right to issue additional
or refunding water and sewer revenue bonds, which shall constitute a
lien and charge upon the gross revenues of the waterworks utility of
the City, on a parity of lien with the Outstanding 1959 Bonds, the
Outstanding 1960 Bonds, the Outstanding 1961 Bonds, the Outstanding
1964 Bonds, the Outstanding 1965 Bonds, the Outstanding 1966 Bonds,
the Outstanding 1967 Bonds, the Outstanding 1970 Bonds prior to their
redemption on December 1, 1982, and the Bonds, if the conditions set
forth in Section 13 of Ordinance 773 shall be met and complied with
at the time of issuance of such additional or refunding water and
sewer revenue bonds, which section is incorporated in this ordinance
and by this reference made a part hereof and shall be applicable
after the retirement of said Outstanding 1959 Bonds, Outstanding
1960 Bonds, Outstanding 1961 Bonds, Outstanding 1964 Bonds, Outstanding
1965 Bonds, Outstanding 1966 Bonds, Outstanding 1967 Bonds and
Outstanding 1970 Bonds.
Section 11.
The City Clerk is hereby authorized and
directed to cause to be published once not less than thirty nor more
than forty-five days prior to December 1, 1982, in the official
newspaper of the City a notice of call for redemption of all
Outstanding 1970 Bonds and to mail a copy of such notice of redemption
to Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Seattle -
Northwest Securities Corporation, Dean Witter & Co., Inc., and Walston
& Co., Inc., at their principal places of business in Seattle,
Washington, within the same period as provided in Ordinance No. 1506
and in the Bonds, and the Director of Finance is hereby authorized
and directed to pay and redeem all of said Outstanding 1970 Bonds
on December 1, 1982, at 1020 of the par value thereof, plus accrued
interest to such date of redemption.
Section 12. Seattle -Northwest Securities Corporation
of Seattle, Washington, heretofore offered to purchase the Bonds
at a price of $98.26 per each $100.00 par value, plus accrued interest
from the date of issuance to the date of delivery of the Bonds, the
City to furnish the printed Bonds and the unqualified approving legal
opinion of Messrs. Roberts, Shefelman, Lawrence, Gay & Moch, municipal
bond counsel of Seattle, Washington, at the City's expense. The City
Council, being of the opinion that no better price could be obtained
for the Bonds and that it was in the best interests of the City to
accept the same, accepted such offer on June 6, 1972, and such
acceptance is hereby ratified and confirmed. The Bonds shall,
therefore, immediately upon their execution be delivered to the
purchaser upon payment for the Bonds in accordance with such offer.
PASSED by the City Council of the City of Edmonds, Washington,
at a regular open public meeting thereof, and APPROVED by the Mayor
this 20th day of June, 1972.
ATTEST:
Deputy City Clerk
FORM APPROVED:
City Attorney
CITY OF EDMONDS, WASHINGTON
t
By i
Mayor
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