Ordinance 1886CITY OF EDMONDS, WASHINGTO1
ORDINANCE NO. 1806
MI ORDINANCE providing for the issuance of
$2,020,000.00 par value of "Water and Sewer
Revenue Refunding Bonds, 1976," for the purpose
of obtaining a part of the funds with which
to refund, pay and retire on January 1, 1989,
the cutstar_dinc "Water and Sewer Revenue Dorids,
1974," of the City; fixing the date, foria,
denomination, maturities, interest rates, terms
and covenants of such refunding bonds; creating
a special account in the bond redemption fund of
the bonds being refunded to provide for the
refunding operation; providing for and authorizing
the purchase of certain obligations out of the
proceeds of the sale of such refunding bonds and
other moneys of the City and for the use and
application of the moneys to be derived fror sucil
investr:ent; providing for the payment and
rederapti on of the outstanding bonds to be refunded;
authorizing the execution of an agreement with
Rainier National Bank as Refunding Trustee; and
providing for the sale and delivery of the refund-
ing bonds to Seattle -Northwest Securities
Corporation of Seattle, Washington.
M31EREAS, the City of Edmonds, Washington (hereinafter called
the "City"), 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, 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 All 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 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
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WHEREAS, by Section 13 of said Ordinance No. 773, the
City 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 certain
conditions should be met and complied with at the time of the
issuance of such additional and/or refunding water and sewer revenue
bonds; 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" Chereinafter 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,
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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 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, pursuant to Ordinance No. 1603, passed June 20,
1972, the City issued and sold $1,035,000.00 par value of "Water and
Sewer Revenue Refunding Bonds, 1972" (hereinafter referred to as the
"Outstanding 1972 Bonds") , for the purpose of providing funds to
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redeem and retire on December 1, 1982, all of the Outstanding 1970
Bonds, which Outstanding 1972 Bonds, after the payment and retirement
of the Outstanding 1970 Bonds, 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, pursuant to Ordinance No. 1719, passed July 2,
1974, the City issued and sold $2,000,000.00 par value of "Water
and Sewer Revenue Bonds, 1974" (hereinafter referred to as the
"Outstanding 1974 Bonds"), 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 system of sewerage as a part thereof, the lien and
charge upon the gross revenues from the waterworks utility of
the City, including the system of sewerage as a part thereof, for
the Outstanding 1974 Bonds and any additional bonds issued on a
parity therewith being subordinate and junior to the prior lien
and charge upon such revenues 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, the Outstanding 1970 Bonds Cprior to
their payment and retirement on December 1, 1982) and the
Outstanding 1972 Bonds (after the payment and retirement of the
Outstanding 1970 Bonds on December 1, 1982); and
WHEREAS, as provided in Ordinance No. 1719 and in the
Outstanding 1974 Bonds, the City reserved the right to redeem such
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Outstanding 1974 Bonds as a whole, or in part in inverse numerical
order, on July 1, 1986, or on any semiannual interest payment date
thereafter at 101% of par, plus accrued interest to date of
redemption, which redemption price shall reduce 1% annually to par
on or after July 1, 1988, and which Outstanding 1974 Bonds mature
in various amounts on July 1 of each of the years 1992 through 1999
and bear interest at various rates from 6.60% to 6.90% per annum;
and
WHEREAS, after due consideration it appears to the City
Council that all of the Outstanding 1974 Bonds may be refunded by
providing funds for the payment of the interest on such Outstanding
1974 Bonds until January 1, 1989, being six months after the first
par call date, at which time all of the Outstanding 1974 Bonds will
be called, paid and retired by the issuance and sale of refunding
bonds so that a substantial saving 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 1974 Bonds; and
WHEREAS, in order to effect such refunding in the manner
that will be most advantageous to the City and its taxpayers, it is
hereby found necessary and advisable that certain "Acquired
Obligations" (hereinafter identified) bearing interest and maturing
at such time or times as necessary to pay the interest on the
Outstanding 1974 Bonds as the same shall become due up to and
including January 1, 1989, and to redeem all of the Outstanding 1974
Bonds as aforesaid on such date be purchased out of the proceeds
of the sale of the refunding bonds herein authorized (hereinafter
called the "Refunding Bonds") and other r::oneys of the City legally
available therefor; and
WHEREAS, by Section 12 of Ordinance No. 1719 it is
covenanted that 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 Outstand_ng 19741 Bonds or such
portion thereof included in the refunding plan as the same become
due and payable and to refund all such Outstanding 1974 Bonds then
outstanding and to pay the costs of 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 or
other legal investments sufficient in amount, together with known
earned income from the investre.ent thereof, to make such payments and
to accomplish the refunding as scheduled, and shall irrevocably make
provisions for redemption of such Outstanding 1974 Bonds, then in
that case all right and interest of the owners or holders of the
Outstanding 1974 Bonds to be so retired or refunded and the
appurtenant coupons in the covenants of Ordinance No. 1719 and in
the revenues, funds and accounts obligated to the payment of such
Outstanding 1974 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 Outstanding 1974 Bonds or
coupons to any lawful purposes as it shall deterr,tine; and
WHEREAS, Seattle -Northwest Securities Corporation o-
Seattle, 1,ashington, has offered to purchase the s2,020,000.00
Ora
par value of Refunding Bonds on the terms and conditions herein-
after set forth; NOW, THEREFORE,
THE CITY COU14CIL OF THE CITY OF EDNlONDS, WASHINGTON, DO
ORDAIN, as follows:
Section 1. Definitions. The following words as used
in this ordinance shall have the following meanings:
a. "City" shall mean the City of Edmonds, Washington.
b. "Refunding Bonds" shall mean the "Water and Sewer
Revenue Refunding Bonds, 1976," the issuance of which is provided for
in this ordinance.
C. "Prior Lien Parity Bonds" shall mean the outstanding
"Water and Sewer Revenue Bonds, 1959" (hereinafter called the
"Outstanding 1959 Bonds"), the outstanding "Water and Sewer Revenue
Bonds, 1960" (hereinafter called the "Outstanding 1960 Bonds"), the
outstanding "Water and Sewer Revenue Bonds, 1961" (hereinafter called
the "Outstanding 1961 Bonds"), the outstanding "Water and Sewer Refunding
Revenue Bonds, 1964" (hereinafter called the "Outstanding 1964 Bonds"),
the outstanding "Water and Sewer Revenue Bonds, 1965" (hereinafter
called the "Outstanding 1965 Bonds"), the outstanding "Water and
Sewer Revenue Bonds, 1966" (hereinafter called the "Outstanding 1966
Bonds"), the outstanding "Water and Sewer Revenue Bonds, 1967"
(hereinafter called the "Outstanding 1967 Bonds"), the outstanding
"Water and Sewer Revenue Bonds, 1970" (hereinafter called the
"Outstanding 1970 Bonds")(prior to their payment and retirement on
December 1, 1982), and the outstanding "Water and Sewer Revenue
Refunding Bonds, 1972" (hereinafter called the "Outstanding 1972
Bonds")(after the payment and retirement of the Outstanding 1970 Bonds
:
on December 1, 1982), heretofore issued on a parity of lien with the
Outstanding 1959 Bonds under the conditions and pursuant to the
requirements provided in Section 13 of Ordinance No. 773 of the City.
d. "Outstanding 1974 Bonds" shall mean the $2,000,000.00
par value of outstanding "Water and Sewer Revenue Bonds, 1974,"
dated July 1, 1974, issued pursuant to Ordinance No. 1719, provision
for the advance refunding thereof is made in this ordinance.
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. 1719 and known as the "Water and Sewer
Revenue Bond Redemption Fund, 1974," for the payment of the
Outstanding 1974 Bonds, the Refunding Bonds and any Future Parity
Bonds.
g. "Future Parity Bonds" shall mean any bonds hereafter
issued on a parity of lien with the outstanding Refunding Bonds
under the conditions and pursuant to the requirements provided in
Section 11 of this ordinance.
h. "Term Bond Maturity Year" shall mean any calendar year
in which the Refunding Bonds or any issue or series of Future Parity
Bonds are scheduled to mature Cregardless of any reservation of prior
redemption rights) in which the amount of such bonds scheduled to
mature is more than 1.25 times the average annual principal maturity
of the bonds of such issue or series for the three years immediately
preceding such Term Bond Maturity Year.
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Section 2. Provision for Issuance of Refundinq Bonds.
For the purpose of providing a part of the moneys required to pay
the interest on the Outstanding 1974 Bonds coming due to and including
January 1, 1989, and to redeem and retire on January 1, 1989, all of
the Outstanding 1974 Bonds, the City shall issue the Refunding bonds
in the aggregate principal amount of $2,020,000.00.
The Refunding Bonds shall be designated "Water and Sewer
Revenue Refunding Bonds, 1976" (herein defined as the "Refunding
Bonds"); shall be dated December 1, 1-976; shall be in denominations
of $5,000.00 each; shall bear interest at the rates hereinafter set
forth, payable on July 1, 1977, and semiannually thereafter on
January 1 and July 1 of each year, interest to maturity being
evidenced by coupons to be attached to the Refunding 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 Refunding Bonds
with interest are paid in full or funds sufficient to pay such
Refunding Bonds with interest in full are on deposit in the Bond
Fund 'hereinafter referred to. Both principal of and interest on
the Refunding Bonds shall be payable in lawful money of the United
States of America at the office of the Director of Finance of the
City or, at the option of the holder, at either fiscal agency of
the State of Washington in the Cities of Seattle, Washington, or
Nev; York, New York:. The Refunding Donds shall be payable solely
out of the Bond Fund. The Refunding Bonds shall be a valid claim of
the holder thereof only as against the Bond Fund and the fixed amount
of the revenue 0f the Waterworks Utility of the City pledged to such
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fund and shall not be a general obligation of the City. The Refunding
Bonds shall be numbered, shall bear interest and shall mature in
accordance with the following schedule:
Bond slumbers
Interest
(Inclusive)
Amounts
Pates
Maturities
1
to
2
$ 10,000
6.00%
July
1,
1985
3
to
4
10,000
6.00%
July
1,
1986
5
to
U
10,000
6.00%
July.l,
1987
7
to
9
15,000
6.00%
July
1,
1988
10
to.
12
15,000
6.00%
July
1,
1989
13
to
15
15,000
6.00%
July
1,
1990
16
to
18
15,000
6.00%
July
1,
1991
19
to
62220,000
6.10%
July
1,
1992
63
to
108
230,000
6.00%
July
1,
1993
109
to
158
250,000
6.00%
July
1,
1994
159
to
210
260,000
6.10%
July
1,
1995
211
to
266
280,000
6.20%
July
1,
1996
267
to
325
295,000
6.25%
July
1,
1997
326
to
388
315,000
6.25%
July
1,
1998
389
to
404
80,000
6.25%
July
1,
1999
Section 3. Option for Prior Redemption. The City
reserves the right to redeem any or all of the Refunding Bonds
outstanding in whole, or in part in inverse numerical order, on
July 1, 1986, or on any semiannual interest payment date thereafter,
at 101% of par plus accrued interest to date of redemption, which
redemption price shall reduce 1/2 of 1% annually to par on or after
July 1, 1988.
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Notice of any call for redemption of the Refunding Bonds
prior to their stated maturity dates shall be published once in the
official newspaper of the City not less than 30 nor more than 45
days prior to the date of redemption. Notice of such call for
redemption shall also be mailed to Seattle -Northwest Securities
Corporation at its principal office in Seattle, Washington, or its
successor, within the same period. in addition, such redemption
notice shall also be sent to Moody's Investors Service, Inc., and
Standard & Poor's Corporation, at their offices in New York, New
York, but the mailing of such notice to such corporations shall not
be a condition precedent to the redemption of such Refunding Bonds.
Interest on any Refunding Bonds so called for redemption shall cease
on such interest coupon due date upon payment of the call price
into the Bond Fund.
Section 4. Refunding Operation. The Bond Fund was
heretofore created and established in the office of the City
Treasurer (now Director of Finance) by Ordinance No. 1719. The
Bond Fund has been divided into two accounts, namely, a "Principal
and Interest Account" and a "Reserve Account." The Bond Fund is
to be drawn upon for the sole purpose of paying the principal of
and interest on the Outstanding 1974 Bonds, the Refunding Bonds and
any Future Parity Bonds as the same shall become due. There is
hereby created and established in the Bond Fund an additional account
to be known and designated as the "1976 Refunding Account."
Immediately upon receipt of payment in full for the Refunding Bonds,
the accrued interest received, if any, shall be deposited in the
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Principal and Interest Account in the Bond Fund. The principal
proceeds received shall be deposited i12 the 1976 Refunding Account
in the Bond Fund and an amount equal to the accrued interest on the
Outstanding 1974 Bonds from the last interest payment date of such
Outstanding 1974 Bonds to the date of delivery of the Refunding Bonds
to the purchaser thereof shall be transferred from the Principal and
interest Account in the Bond Fund to the 1976 Refunding Account in
the Bond Fund. Similarly, $94,000.00 of the moneys on deposit
in the Reserve Account in the Bond Fund shall be transferred
frori such Reserve Account to the 1976 Refunding Account in the
Bond Fund. The moneys in the 1976 Refunding Account shall be used
immediately upon the receipt thereof to discharge the obligations
of the City under Ordinance No. 1719 passed and approved July 2, 1974,
authorizing the issuance of the Outstanding 1974 Bonds by providing
for the payment as hereinafter set forth in this section of the
principal of and interest on the Outstanding 1974 Bonds. To the
extent practicable the City shall discharge such obligations by the
purchase of certain_ "Acquired Obligations" bearing such interest
and maturing as to principal and interest in such amounts and at such
times so as to provide for the payment of the interest on the
Outstanding 1974 Bonds which will become due and payable on or
before January 1, 1989, and the redemption price payable on January 1,
1989, for the principal of all then Outstanding 1974 Bonds. Such
Acquired Obligations with interest rates and maturities and the
prices to be paid for the same are more particularly described in
the proposal of Seattle -Northwest Securities Corporation hereinafter
referred to.
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Such Acquired Obligations shall be irrevocably deposited
with Rainier National Bank, Seattle, Washington (hereinafter called
the "Refunding Trustee"). Any amounts described in this section
which are not provided for in full by the purchase and deposit of
the Acquired Obligations described in this section shall be provided
for by the irrevocable deposit of a portion of the proceeds of sale
of the Refunding Bonds or other moneys of the City with the aforesaid
Refunding Trustee.
All the moneys received as principal of or interest on
such Acquired Obligations shall be held by the Refunding Trustee
for the credit of the City for the 1976 Refunding Account in the
Bond Fund, and shall be held in trust and shall be used for the
sole purpose of paying the interest becoming due on the Outstanding
1974 Bonds up to and including January 1, 1989, and to pay and
retire all then Outstanding 1974 Bonds on January 1, 1989, as
aforesaid.
Any moneys remaining in the 1976 Refunding Account in
the Bond Fund after the payment and retirement in full of the
Outstanding 1974 Bonds as aforesaid shall be transferred and paid
into the Principal and Interest Account in the Bond Fund. All of
such Acquired Obligations purchased as a part of the refunding
plan are irrevocably dedicated to the purpose set forth in this
ordinance, and such investments or the earnings or the proceeds
therefrom shall be used for no other purpose, nor may any of such
investments be liquidated prior to maturity.
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Section 5. Call for Redemption of Outstanding 1974 Bonds.
The City hereby irrevocably calls for redemption on January 1, 1989,
all of the Outstanding 1974 Bonds at the par value thereof plus
accrued interest to such date of redemption. Such call for redemption
shall be irrevocable after the delivery of the Refunding Bonds to
the initial purchaser thereof.
The Director of Finance of the City is hereby authorized
and directed to give notice of the redemption of the Outstanding 1974
Bonds in accordance with the provisions of Ordinance No. 1719
pertaining to the Outstanding 1974 Bonds.
Section 6. Refunding Trustee's Duties and Agreement.
The Refunding Trustee is hereby authorized and directed to pay the
interest or. the Outstanding 1974 Bonds when due and the principal
thereof on January 1, 1989, from the Acquired Obligations and moneys
deposited with the Refunding Trustee pursuant to Section 4 of this
ordinance. All Acquired Obligations and the moneys deposited with
the Refunding Trustee and any income therefrom shall be held and
applied in accordance with the provisions of Ordinance No. 1719
pertaining to the Outstanding 1974 Bonds and this ordinance and
with the statutes of the State of Washington.
All necessary and proper fees, compensation and expenses
of the Refunding Trustee for the Refunding Bonds and all other costs
incidental to the setting up of the escrow to accomplish the refunding
of the Outstanding 1974 Bonds, including but not limited to an allocable
portion of bond counsel's fees chargeable to such escrow and an escrow
computation_ fee to Seattle -Northwest Securities Corporation, shall be
paid out of the principal proceeds of the Refunding Bonds. The costs
relating to the issuance .and delivery of the Refunding Bonds, including
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bond printing and an -allocable portion of bond counsel's fees chargeable
to the preparation of the legal proceedings and furnishing an approving
legal opinion covering the Refunding Bonds, shall be paid by Seattle -
Northwest Securities Corporation as purchaser of the Refunding Bonds.
The proper officers and agents of the City are directed to obtain from
the Refunding Trustee an agreement setting forth the duties, obligations
anc- responsibilities of the Refunding Trustee in connection with the
redemption and retirement of the Outstanding 1974 Bonds as provided
herein and stating that suer: provisions an(-1the rayi:eni of the fees,
compensation and expenses of such Refunding Trustee are satisfactory to
it.
In order to carry out the purposes of this ordinance, the
Mayor and City Clerk of the City are authorized and directed to
execute and deliver to Rainier national Bank, Seattle, Washington,
an agreement substantially in the form attached hereto marked "Exhibit
A" and by this reference thereto made a part of this ordinance.
Section 7. Deposits to Bond Fund and Lien Position of
Refunding Bonds. So long as Refunding Bonds are outstanding
against the Bond Fund, the Director of Finance of the City shall set
aside and pay into the Bond Fund, in addition to any amounts which
the City may hereafter covenant to set aside and pay therein for any
Future Parity Bonds, out of the gross revenues of the Waterworks
Utility of the City and any utility local improvement district
assessments hereafter pledged to be paid into the Bond Fund -Lc
secure the Refunding Bonds and any Future Parity Bonds, a fixed
an:nount without regard to any fixed proportion, r_amely:
(a) Into the Principal and Interest Account,
on or before the first day of each is onth , beginning
with th,e month of January, 1977, one -seventh of the
amour_t of interest payable on July 1, 1977, and
beginning witi _-tlie month of ,-wgust, 1977, cne-sixth
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of the next ensuing .six months' requirements for
interest on the Refunding Bonds and beginning with
the month of August, 1984, one -twelfth of the next
ensuing requirements for principal on the Refunding
Bonds and continuing thereafter until the Refunding
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,
1977, not less than a sure! equal to one-si ..tieth of
the average annual debt service requirement for the
Refunding Bonds, including the interest but excluding
the principal amount payable in any Term.Bond
Maturity Year, until an ar..ount equal to such average
an._ual dent service requirer:ent is accur�,ulatec: ty no
later than January 1, 1982; provided, however, that
any amounts remaining in such Reserve Account after
the transfer therefrom of moneys to be used in the
refunding operation as provided above shall be
credited against the amounts to be so accumulated.
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 and assessments therefor. The Reserve Account
shall be maintained in such amount, except for withdrawals therefrom
as authori--ed herein, at all tines .so long as any Refunding Bonds
and Future 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 Refunding Bonds and
Future 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 th-e Reserve
Account by reason of such withdrawal shall then be made up from
the rioneys from the revenues of the Waterworks Utility- of the City
and said utility local improvement district assessments first
available after making necessary provision for tine required payments
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into the Principal and Interest Account. The moneys in the reserve
Account" shall otherwise be held intact and raay 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 any legal investment
permitted to the City redeemable at a fixed price and raturirg not
a-'-.er than the final i-iiatu.rity Crate of the last outstanding ho.nds
payable out of the Bond Fund.
The gross revenues from the Waterworks Utility of the
City, and all utility local improvement district assessments
hereafter collected to secure the Refunding Bonds and any Future
Parity Bonds, are hereby pledged to such payments and the Refunding
Bonds and such Future Parity Bonds shall constitute a lien and charge
upon such revenues and assessments prior and superior to any other
charges whatsoever, excluding charges for maintenance and operation
of the Water -works Utility of the City, except that the lien and
charge upon_ such revenues for the Refunding Bonds and such Future
Parity Bonds shall be subordinate and junior to the prior lien and
charge upon such revenues for the outstanding Prior Lien Parity
Bonds .
Section 8. Bond Fund Considerations. 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 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 Prior
Lien 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 Prior Lien 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
Prior Lien Parity Bonds and the Outstanding 1974 Bonds to be
refunded as herein provided.
Section 9. Covenants. The City hereby covenants
and agrees with the owner and holder of each Refunding Bond at any
time outstanding, in addition to the covenants heretofore made for
the outstanding Prior Lien Parity Bonds, as follows:
(a) That it will establish, maintain and collect
such rates and charges for water and sanitary sewage
disposal service which, together with other revenues
available therefor, will produce net revenues avail-
able for debt service each calendar year at least
equal to:
(1) 1.25 times the combined average annual
debt service on all Prior Lien Parity Bonds, the
Refunding Bonds and any Future Parity Bonds actually
payable f rom revenues; and
(2) 1.30 times the average annual debt
service on all Refunding Bonds and Future Parity
Bonds actually payable from revenues.
The percentage of the annual debt service which
might not be subject to the130% and 125% coverage
requirements would be that portion of any Future
Parity Bond issue which might have utility local
improvement district assessments pledged to the
security of the bonds. In this case, to determine
the percentage.,of.annual debt service of that issue
not subject to the coverage requirements, divide the
original amount of each assessment roll by the
original principal amount of each bond issue involving
utility local improvement district assessment
collections. (This subparagraph shall hereinafter be
called the "Coverage Requirement.")
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(b) If utility local improvement districts are
ever established in connection with the issuance
of Future Parity Bonds and the assessments there-
from pledged to be paid into the Bond Fund, the
City will promptly collect all assessments levied
in any subsequent utility local improvement district
hereafter created in connection with the issuance
of such Future Parity Bonds. Such assessments may
be used to pay the principal of and interest on any
bonds payable out of the Bond Fund without said
assessments being particularly allocated to the
payment of principal of and interest on any
particular series of bonds or such Future Parity
Bonds.
(c) 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.
(d) 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 Refunding 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 the 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 avail-
able 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.
(e) That it will while any of the Refunding Bonds
remain outstanding keep proper and separate accounts
-20-
and records in which complete and separate entries
shall be made of all transactions relating to the
Waterworks Utility of the City and it will furnish
the original purchaser or purchasers of the Refunding
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 Refunding
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
Refunding 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.
(f) 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.
(g) 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
sewerage 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
Insurance, 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.
(h) 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 Prior Lien
Parity Bonds and otherwise meet the obligations of the
City as herein set forth.
(i) That it will make no use of the proceeds of the
Refunding Bonds or other funds of the City at any time
during the term of the Refunding Bonds which, if such
use had been reasonably expected at the date that the
Refunding Bonds are issued, would have caused such
Refunding Bonds to be arbitrage bonds within the mean-
ing of Section 103(d) of the United States Internal
Revenue Code of 1954, and for this purpose it further
-21-
covenants that none of the proceeds of the Refunding
Bonds or the investment of such proceeds will be used
to acquire obligations the adjusted yield on which
will exceed the adjusted yield produced by the Refund-
ing Bonds, both such adjusted yields being computed
pursuant and subject to the requirements and exceptions
of Sections 1.103-13 and 1.103-14 of the regulations
proposed by the United States Treasury Department
published in the Federal Register on May 3, 1973,
December 3, 1975, and October 29, 1976.
The covenants of this section appertaining to the Refunding
Bonds shall be subject to all provisions concerning payment and to
all other contractual provisions in the proceedings authorizing the
issuance of the Outstanding 1974 Bonds or otherwise appertaining
thereto.
Section 10. Defeasance. In the event the City shall
issue advance refunding bonds pursuant to the laws of the State of
Washington, or have moneys available from any other lawful source,
to pay the principal of and interest on the Refunding Bonds or such
portion thereof included in the refunding plan as the same become
due and payable and to refund all such then outstanding Refunding
Bonds and to pay the costs of 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 or other
legal investments -sufficient in amount, together with known earned
income from the investments thereof, to make such payments and to
accomplish the refunding as scheduled (hereinafter called the "trust
account") and shall irrevocably make provisions for redemption of
such Refunding Bonds, then in that case all right and interest of
the owners or holders of the Refunding Bonds to be so retired or
refunded and the appurtenant coupons (hereinafter collectively called
-22-
the "defeased Refunding Bonds") in the covenants of this
ordinance, in the gross revenues of the waterworks Utility of the
City, any utility local improvement district assessments, and
interest and penalties thereon, and funds and accounts obligated to
the payment of such Refunding Bonds shall thereafter cease and
become void, except such owners and holders shall have the right
to receive payment of the principal of and interest on the defeased
Refunding Bonds from the trust account and, in the event the funds
in the trust account are not available for such payment, shall have
the residual right to receive payment of the principal of and
interest on the defeased Refunding Bonds from the gross revenues
of the waterworks Utility of the City without any priority of lien
or charge against those revenues or covenants with respect thereto
except to be paid therefrom. After the establishing and full funding
of such trust account, the City may then apply any moneys in any
other fund or account established for the payment or redemption of
the defeased Refunding Bonds to any lawful purposes as it shall
determine, subject only to the rights of the holders of any other
bonds then outstanding.
In the event that the refunding plan provides that the
Refunding Bonds being refunded or the refunding bonds to be issued
be secured by cash and/or direct obligations of the Unites States
of America or other legal investments pending the prior redemption
of those Refunding Bonds being refunded and if such refunding plan
also provides that certain cash and/or direct obligations of the
United States of America or other legal investments are irrevocably
-2 3-
pledged for the prior redemption of those Refunding Bonds included
in the refunding plan, then only the debt service on the Refunding
Bonds which are not defeased Refunding Bonds and the refunding bonds,
the payment of which is not so secured by the refunding plan, shall
be included in the computation of coverage for issuance of Future
Parity Bonds and the annual computation of coverage for determining
compliance with the rate covenants.
Section 11. Provision for Future Parity Bonds. 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, including
utility local improvement district assessments, prior to or on a
parity with the lien and charge against such revenues and assessments
required to be made into the Bond Fund for the payment of the
Refunding Bonds and any Future Parity Bonds, except that it hereby
reserves the right to issue such Future Parity Bonds if the following
conditions and requirements are met and complied with at the time
of the issuance of such Future Parity Bonds:
(a) That at the time of issuance of such Future
Parity Bonds, there shall not be a deficiency in
the Bond Fund or the Reserve Account therein.
(b) That each ordinance providing for the issuance
of such Future Parity Bonds shall require that all
assessments levied in any utility local improvement
district created in connection with the bonds then
being issued will be paid directly into the Bond
Fund.
Cc) That the ordinance authorizing any Future
Parity Bonds shall require that the Reserve Account
be increased within a period of five years after the
date of issuance of the Future Parity Bonds to an
amount equal to the average annual principal and
-24-
interest requirements on all parity bonds, excluding
from such average the principal amount of any bonds
maturing in a Term Bond Maturity Year included in the
parity issue.
(d) That at the time of the issuance of such Future
Parity Bonds, the City shall have on file a certificate
from an independent licensed professional engineer
experienced in the design, construction and operation
of municipal utilities, showing that in his professional
opinion, the net revenue of the Waterworks Utility of
the City which will be available in each succeeding year
for the payment of the principal of and interest on all
outstanding bonds payable out of the Bond Fund and
Future Parity Bonds to be issued, will be equal to the
Coverage Requirement.
In determining whether the City is able to comply with the terms of
the parity conditions, the following adjustments may be made to the
historical net operating revenue:
(a) Any rate change that has taken place or been
approved may be reflected.
(b) Revenue may be added from customers actually
added to the utility subsequent to the 12-month
period.
Cc ) Revenue may be added from customers to be
served by the improvements being constructed out of
the proceeds of the bonds to be issued.
(d) A full year's revenue may be included from
any customer being served, but who has not been
receiving service for the full period of operation
used as a basis for the certificate.
(e) Actual or reasonably anticipated changes in
the current expenses subsequent to such 12-month
period shall be added or deducted, as is applicable.
Section 12.
Refunding Bond Form. The Refunding Bonds
shall be in substantially the following form:
-25-
No. $5,000.00
UNITED STATES OF AMERICA
STATE OF WASHINGTON
CITY OF EDMONDS
WATER AND SEWER REVENUE REFUNDING BOND, 1976
%
KNOW ALL MEN BY THESE PRESENTS: That the City of
Edmonds, Washington (hereinafter called the "City"),
for value received, promises to pay to bearer on the
FIRST DAY OF JULY, 19_, the principal surq of
FIVE THOUSAND DOLLARS
together with interest thereon at the rate of %
per annum, payable on July 1, 1977, and semiannually
thereafter on January 1 and July 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, 1974"
(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 Director of Finance of the City
or, at the option of the holder, at either fiscal
agency of the State of Washington in the Cities of
Seattle, Washington, or New York, New York, solely
out of the special fund created by Ordinance No. 1719,
and referred to herein as the "Bond Fund," into which
fund the City hereby irrevocably 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 betterments thereof now
or at any time made or constructed, including assess-
ments collected in any utility local improvement
district hereafter created to be paid into the Bond
Fund, without regard to any fixed proportion, namely,
amounts sufficient to pay the principal of and
-26-
interest or_ this issue of bonds and any bonds
hereafter issued on a parity of lien with this
issue of bonds in accordance with the �)rovisions
of Section 11 of Ordinance No. 1886 (hereinafter
called "Future Parity Bonds") as they respectively
become due and to maintain a reserve, all at the
times and in the manner set forth in Ordinance
No. 1886.
The gross revenues from the combined water and
sewerage sys`en:s, comprising the waterworks utility
of the City, and such utility local improvernent
district assessments, if any, are hereby pledaed to
such payment, and the boni:s of this i sst.e and any
Future Parity Bonds constitute a lien and charge upon
such revenues and assessments prior and superior to
any other charges whatsoever, excluding charges for
maintenance and operation, el>cept that the lien and
charge upon such revenues for this issue of bonds and
any Future Parity Bonds shall be subordinate and junior
to the prior 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," "Water and Sewer Revenue Bonds,
1970" (prior to their payment and retirement on December
1, 1982) , and "Water and Sewer Revenue Refunding Bonds,
1972" (after the payment and retirement of the outstanding
"Water and Sewer Revenue Bonds, 1970," on December 1,
1982) .
This bond is one of a total issue of $2,020,000.00
par value of bonds, all of like date, tenor and effect,
except as to maturities and interest rates, and 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, 1st Ex. Ses., as
amended, known_ as the "Refunding Bond Act" (RCW Chapter
39.53), for the purpose of providing a part of the funds
to refund, pay and retire all of its outstanding "Water
and Sewer Revenue Bonds, 1974," dated July 1,1974,
all as provided in Ordinance No. 1886, and is issued
in full compliance with the ordinances of the City and
the Constitution and laws of the State of Washington.
Reference to Ordinance No. 1886 is hereby made as more
fully describing the covenants with and rights of holders
of bonds of this issue.
-27-
The City reserves the right to redeem any or all of
the bonds outstanding in whole, or in part in inverse
numerical order, on July 1, 1986, or on any semiannual
interest payrient date thereafter, at 101% of par plus
accrued interest to date of redemption, which redemption
price shall reduce 1/2 of 1% annually to par on or
after July 1, 1988.
Notice of such call for reden.pti on 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 Seat tle-No-rthTv est Securities
Corporation at its principal place cf business in Seattle,
`( ashiilgton, or its silccesscr, 4:? .h`r: the sariie 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, '.dew York, but the mailing
of such notice to such corporations shall not be a
condition precedent to the redemption of the bonds.
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.
The City 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 herein set forth and as set forth in
Ordinance No. 1886. The bonds are not a general
obligation of the City.
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 V-7ashington and the ordinances of the City,
and that all acts, conditions and things required to
be done precedent to and in the issuance of this bond
have happened, have been done and have been performed
as required by law.
IN WITNESS WHEREOF, the City has caused this bond to
be signed by the facsimile signature of the Mayor and
attested by the manual signature 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 officials this first day of December,
1976.
CITY OF EDMONDS, WASHINGTON
By (facsimile signature)
Mayor
-28-
ATTEST:
City Clerk
The interest coupons attached to the Refunding Bonds shall
be in substantially the following form:
Coupon No.
(Unless the bond referred to below has been
previously redeemed)
On the FIRST DAY OF (JANUARY)(JULY), 19 , the CITY
OF EDMONDS, WASHINGTOU, upon presentation and surrender
of this coupon, will pay to the bearer at the office of
the Director of Finance of the City or, at the option
of the holder, at either fiscal agency of the State of
Washington in the Cities of Seattle, Washington, or
New York, New York, 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, 1974," said sum being the interest
then due on its "Water and Sewer Revenue Refunding Bond,
1976," dated December 1, 1976, and numbered
CITY OF EDMONDS, WASHINGTON
By (facsimile signature)
Mayor
ATTEST:
(facsimile signature)
City Clerk
Section 13. Execution of Refunding Bonds. The Refunding
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 affixed thereto
and the interest coupons shall bear the facsimile signatures of the
Mayor and the Clerk.
-29-
Section 14. Sale and Delivery of Refunding Bonds.
Seattle -Northwest Securities Corporation of Seattle, 6-?ashington,
has submitted its written offer to purchase the Refunding Bonds at
the par value thereof, plus accrued interest from the date of issuance
to the date of delivery of the Refunding Bonds, the City to furnish
at its expense the printed Refunding Bonds, together with the
approving legal opinion of Ilessrs. Roberts, Shefelmar_, Lawrence,
Gay & Ix_och, riunicipal bond counsel of Seattle, Washington, and the
City to provide the Acquired Obligations above referred to as set
forth in such offer. Bond counsel shall not be required to review
or express any opinion concerning any official statement, offering
circular or other sales material issued or used in connection with
the Refunding Bonds, and bond counsel's opinion shall so state.
The City Council, deeming that it is in the best interests of the
City to accept that offer, hereby accepts the same. The Refunding
Bonds shall, therefore, immediately upon_ their execution be delivered
to Seattle -Northwest Securities Corporation upon payment therefor in
accordance with that offer.
Section 15. Temporary Bond. Pending the printing,
execution and delivery to the purchaser of the definitive Refunding
Bonds, the City may cause to be executed and delivered to such
purchaser a single temporary Refunding Bond in the principal amount
of $2,020,000.00. Such temporary Refunding Bond shall bear the
same date of issuance, interest rates, principal payment dates
and term and covenants as the definitive Refunding Bonds, and
shall be issued as a fully registered bond in the name of such
purchaser, and shall be in such form as acceptable to such purchaser.
-30-
Such temporary Refunding Bond shall be exchanged for the definitive
Refunding Bonds as soon as the same are printed, executed and avail-
able for delivery.
Section 16. Effective Date. This ordinance shall take
effect and be in force five days after the date of its publication
in the manner provided by law.
PASSED by the City Council of the City of Edmonds,
Washington, at a regular open public meeting thereof and APPROVED
by the Mayor this 21st day of December, 1976.
ATTEST:
ROVED:
ty Attorney
CITY OF EDMONDS, WASHINGTON
BY x
Mayor
FILED WITH THE CITY CLERK: December 21, 1976
PASSED BY THE CITY COUNCIL: December 21, 1976
PUBLISHED: December 29, 1976
—31—
J. '►P;n r
A G R E E M E N T
THIS AGREE1-2NT made and entered into as of the day
of December, 1976, by and between the CITY OF EDIIONDS, ZtASHII�'CTOIN, a
m:icipal corporation_ Of ti:e State Of Washington (the "City"),
and
=v_T-17T R -' IOj.\,Tf.L BAY�, Seattle, j.ashi.-on (the 7Refunding Trustee")
`'d I T N E S S E T H:
SECTION. 1. Recitals. The City now has outstanding its
"i,ater and Sewer Revenue Bonds, 1974," issued under date of July 1,
1974, in the aggregate principal amount of $2,000,000.00 (hereinafter
called the "Outstanding 1974 Bonds") . Pursuant to Ordinance No. 1719
pertainir_g to the Outstanding 1974 Bonds, the City in the manner
provided therein_ may call the Outstanding 1974 Bonds as a whole,
or in part in inverse numerical order, On July 1, 1986, or on any
semiannual interest payment date thereafter at 101% of par, plus
accrued interest to date of redemption, with such redemption price
declining 1% annually to par on or after July 1, 1988. The City
by Ordinance No. 1886, passed by the City Council and approved by
the Mayor on December 21, 1976, has determined to pay the interest
on the Outstanding 1974 Bonds coming due to and including January 1,
1989, and to redeem and retire on January 1, 1989, all of the
Outstanding 1974 Bends in accordance witi- the terns of said Ordinance
No. 1719 out of the proceeds of sale of its "Water and Seger Revenue
Refunding Bonds, 1976" (the "Refundi ng Bonds") , and cthe= moneys of
the City legally available tPe.refor.
SECTION 2. Provisions for the Payment and Retirer:,ent of
the Outstanding 1974 Bonds. To accor::plish the payment and retirer:,ent
of the Outstanding 1974 Bonds, including the payment of the interest
on the Outstanding 1974 Bonds coming cue to and including January 1,
1989, and the redemption price payable on January 1,'1989, for the
principal of all Outstanding 1974- Don6s, the City, simultaneously
�;_ th i.fe Cellvery of the Ref- ndter g iionds issued pursuant to said
Ordinance No. 1886, does hereby agree to irrevocably deposit with
the Refunding Trustee in trust for the security and benefit of the
holders and owners of the Outstanding 1974 Bonds and the Refunding
Bonds cash from the proceeds of sale of the Refunding Bonds in the
amount set forth in Exhibit "A" attached to this. Agreement and by
this reference incorporated herein and certain "Obligations" of the
kinds, with amounts, interest rates and maturities as more particularly
set forth in.said Exhibit "A", and such cash and Obligations, with
the investment income therefrom, will be sufficient to provide for the
payment of the interest on the Outstanding 1974 Bonds coming due
up to and including January 1, 1989, and the -redemption price payable
on January 1, 1989, for the principal of all Outstanding 1974 Bonds.
On or before the delivery of the Refunding Bonds the City
agrees that it will cause to be delivered to the Refunding Trustee
a statement setting forth the amount of interest to be paid on each
semiannual interest payment date on the Outstanding 1974 Bonds up
through January 1, 1989, and the amount of principal to be paid on
January 1, 1989, to retire and redeem. all Outstanding 1974 Bonds.
-2-
The City by said Ordinance No. 1886 has irrevocably called
for redemption or prepayr:,ent on January 1, 1989, the Outstanding
19741 Bonds at the par value thereof plus accrued interest to such
date of redemption. Such call for red.erpti on or prepayment shall be
irrevocable upon the delivery of the Refunding Bonds. The Director
of Finance Of the City shall provide for the puh licatior_ and railing
OS t:a? i rc:- e r cC.J 0= sl ` r �' ice_. or -p i'e ay1: >.lt in accordance
with the applicable provisions of Ordinance No. 1719 pertaining to
the Outstanding 1974 Bonds.
Provision for the giving of such notices of redeription or
prepayment has irrevocably been made by the City.
SECTION 3. Disbursements by the Refunding Trustee. The
Refunding Trustee shall present for payment on the due date thereof
the Obligations so deposited and shall apply the proceeds derived
therefrom in accordance with the provisions of this section_.
honeys shall be transferred by the Refunding Trustee to
the Director of Finance of the City or to either fiscal agency of
the State of Washington in the Cities of Seattle, Washington, or
New York, New York, on behalf of such Director of Finance, in amounts
sufficient to pay the interest on the Outstanding 1974 Bonds corning
due and payable on or before January 1, 1989, and to pay the
redemption price payable on January 1, 1989, for the principal of
all Outstanding 1974 Bonds.
SECTION 4. Nonreinves tment of Funds; Custody and
Safekeeping of Obligations. All moneys deposited with the Refunding
Trustee or received by the Refunding Trustee as maturing principal
-3-
C
or'interest on Obligations prior to the time required to nake the
payments hereinbefore set forth shall be held by the Refunding Trustee
and shall not be reinvested.
All income derived from the Obligations and any moneys
deposited with the Refunding Trustee pursuant to Section 2 hereof
in the hands of the Refunding Trustee (which noneys are not required
to make the payments hereinbefore required to be made) shall be paid
to the Director of Finance of the City or to either fiscal agency of
the State of Washington in the Cities of Seattle, Washington, or
New York, New York, on behalf of such Director of Finance, for the
credit of the "1976 Refunding Account" in the "Water and Sewer Revenue
Bond Fund, 1974," of the City (hereinafter called the "Refunding
J
Account") as and when realized and collected for use and application
as other moneys deposited in said Refunding Account.
For as long as any of the Outstanding 1974 Bonds are
outstanding, on or before the loth day of each month, corunencing with
the month of February, 1977, the Refunding Trustee shall render a
statement as of the last day of the preceding month to the Director
of Finance of the City, which statement shall set forth the Obligations
which have matured and the amounts received by the Refunding Trustee
by reason of such maturity, the amounts paid to such Director of
Finance for credit to the Refunding Account and the dates of such
delivery for the payment of the interest on the Outstanding 1974
Bonds as the same shall become due and/or payable up through January 1,
1989, and principal on January 1, 1989, to redeem and retire all
Outstanding 1974 Bonds, and any other transactions of the Refunding
Trustee pertaining to its duties and obligations as set forth herein.
-4-
All Obligations, moneys and investment income deposited
with or received by the Refunding Trustee pursuant to this Agreement
shall be subject to the trust created by this Agreement and the
Refunding Trustee shall be liable for the preservation and safekeeping
thereof.
Reference herein to payments made to the Director or
Finance of the City shall also be deemed to include payments made
to the fiscal agency of the State of Washington on behalf of such
Director of Finance.
SECTION 5. Duties and Obligations of Refunding Trustee.
The duties and obligations of the Refunding Trustee shall be as
prescribed by the provisions of this Agreement, and the Refunding
Trustee shall not be liable except for the performance of its
duties and obligations as specifically set forth herein and to act
in good faith in the performance thereof and no implied duties or
obligations shall be incurred by such Refunding Trustee other than
those specified herein.
The Refunding Trustee may consult with counsel of its
choice and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or not
taken or suffered by it hereunder in good faith and in accordance
with the opinion of such counsel.
-5-
Provisions for the fees, compensation and expenses of
the Refunding Trustee satisfactory to it have been made.
CITY OF EDMONDS, WASHINGTON
By
Mayor
ATTEST:
City Clerk `
RAINIER NATIONAL BANK
By
Trust Officer
mm.
Sr_hPdiil P A
CITY OF EDMONDS
Maturity
Amount
Coupon
Security
Date
$1,625,000
6.920%
Book
Entry
Bond
1-
1-89
386,625
-0-
FHDA
12-28-88
10,000
6.890
Book
Entry
Bond
7-
1-88
10,000
6.850
Book
Entry
Bond
1-
1-88
10,000
6.810
Book
Entry
Bond
7-
1-87
15,000
-0-
Book
Entry
Bond
1-
1-87
10,000
6.700
Book
Entry
Bond
7-
1-86
10,000
6.630
Book
Entry
Bond
1-
1-86
10,000
5.190
Book
Entry
Bond
7-
1-85
-10,000
-0-
Book
Entry
Bond
1-
1-85
10,000
-0-
Book
Entry
Bond
7-
1-84
10,000
-0-
Book
Entry
Note
1-
1-84
10,000
-0-
Book
Entry
Note
7-
1-83
10,000
-0-
Book
Entry
Note
1-
1-83
10,000
-0-
Book
Entry
dote
7-
1-82
10,000
-0-
Book
Entry
Note
1-
1-82
10,000
-0-
Book
Entry
Note
7-
1-81
10,000
-0-
Book
Entry
Note
1-
1-81
10,000
-0-
Book
Entry
Note
7-
1-80
10,000
-0-
Book
Entry
Note
1-
1-80
10,000
-0-
Book
Entry
Note
7-
1-79
10,000
-0-
Book
Entry
Note
1-
1-79
10,000
-0-
Book
Entry
Note
7-
1-78
10,000
-0-
Book
Entry
Certificate
1-
1-78
10,000
-0-
Book
Entry
Certificate
7-
1-77
$2,246,625
CODE:
FHDA - Farmers Home Administration - Department of Agriculture
Book Entry - U. S. Treasury - State and Local Government Series
Certificates of Indebtedness
Treasury Notes
Treasury Bonds