Ordinance 4358FG : 102363683 .2
CITY OF EDMONDS, WASHING TON
ORDINANCE NO. 4358
AN ORDINANCE of the City of Edmonds, Washington,
relating to the combined water and sewerage systems comprising the
waterworks utility of the City; specifying, adopting, and ordering
the carrying out of a system or plan of additions to and betterments
and extensions of the combined waterworks utility; providing for the
issuance of one or more series of water and sewer revenue bonds for
the purpose of providing the funds necessary: (1) to pay all or a
portion of the costs of carrying out that plan of additions, (2) to make
a deposit into the debt service reserve account, and (3) to pay the
costs of issuance and sale of the bonds; fixing or setting parameters
with respect to certain terms and covenants of the bonds; appointing
the City's designated representative to approve the final terms of the
sale of the bonds; amending Ordinance No. 4309; and providing for
other related matters.
Passed May 28, 2024
This document prepared by :
Foster Garvey P.C.
1111 Third Avenue, Suite 3000
Seattle, Washington 98101
(206) 447-4400
Section 1.
Section 2.
Section 3.
Section 4.
Section 5.
Section 6.
Section 7.
Section 8.
Section 9.
Section 10.
Section 11.
Section 12.
Section 13.
Section 14.
Section 15.
Section 16.
Section 17.
Section 18.
Section 19.
Section 20.
Section 21.
Section 22.
Section 23.
Section 24.
Section 25.
Exhibit A
Exhibit B
Exhibit C
Exhibit D
TABLE OF CONTENTS*
Findings and Determinations ................................................................................... I
Definitions ................................................................................................................ 2
Adoption of Plan of Additions; Purpose and Authorization of the
Bonds ..................................................................................................................... 10
Description of the Bonds; Appointment of Designated
Representative ........................................................................................................ l 0
Registrar; Registration and Transfer of Bonds ...................................................... 10
Form and Execution of Bonds ............................................................................... 11
Payment of Bonds .................................................................................................. 12
Redemption Provisions and Open Market Purchase of Bonds .............................. 12
Failure To Pay Bonds ............................................................................................. 13
Refunding or Defeasance of the Bonds ................................................................. 14
Security for the Bonds; Bond Fund ....................................................................... 14
Flow of Funds ........................................................................................................ 16
Additional Covenants ............................................................................................. ] 7
Rate Stabilization Account .................................................................................... 18
Separate Utility Systems ........................................................................................ 19
Deposit of Bond Proceeds ...................................................................................... 19
Sale and Delivery of the Bonds; Parity Certificate ................................................ 19
Parity Conditions ................................................................................................... 20
Tax Matters ............................................................................................................ 20
Official Statement; Continuing Disclosure ........................................................... .21
Amendatory Ordinances ........................................................................................ 22
Amendment of Ordinance No. 4309 ...................................................................... 24
General Authorization and Ratification ................................................................. 24
Severability ............................................................................................................ 24
Effective Date of Ordinance .................................................................................. 25
Parameters for Final Terms of the Bonds
Parity Conditions For Issuance of Future Parity Bonds
Description of Plan of Additions
Form of Continuing Disclosure Undertaking
* The cover page, table of contents and section headings of this ordinance are for convenience of
reference only, and shall not be used to resolve any question of interpretation of this ordinance.
FG: 102363683.2
CITY OF EDMONDS, WASHINGTON
ORDINANCE NO. 4358
AN ORDINANCE of the City of Edmonds, Washington,
relating to the combined water and sewerage systems comprising the
waterworks utility of the City; specifying, adopting, and ordering
the carrying out of a system or plan of additions to and betterments
and extensions of the combined waterworks utility; providing for the
issuance of one or more series of water and sewer revenue bonds for
the purpose of providing the funds necessary: (1) to pay all or a
portion of the costs of carrying out that plan of additions, (2) to make
a deposit into the debt service reserve account, and (3) to pay the
costs of issuance and sale of the bonds; fixing or setting parameters
with respect to certain terms and covenants of the bonds; appointing
the City's designated representative to approve the final terms of the
sale of the bonds; and providing for other related matters.
THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DO ORDAIN
AS FOLLOWS:
Section 1. Findings and Determinations. The City Council of the City of Edmonds,
Washington (the "City"), makes the findings and determinations set forth below. Capitalized terms
have the meanings given in Section 2.
(a) Refunding Plan Ratified and Confirmed Pursuant to Ordinance No. 4309, passed
on June 20, 2023, the City authorized the issuance of the Refunding Bonds for the purpose of
providing the funds necessary to pay all or part of the of the costs of refunding the City's
outstanding Water and Sewer Revenue Bonds, 2013, authorized by Ordinance No. 3933, passed
on July 16, 2013, to achieve a debt service savings, and to pay the costs of issuance and sale of the
Refunding Bonds and the administrative costs of the refunding. Pursuant to Ordinance No. 4309,
the Refunding Bonds may not be issued later than one year after the effective date of Ordinance
No. 4309 (June 28, 2023). The City Council ratifies and confirms the findings and determinations
made in Ordinance No. 4309, and it is in the best interest of the City to extend the date to which
the Refunding Bonds may be issued to one year after the effective date of this ordinance.
(b) Plan of Additions. The City is in need of funds with which to finance the Plan of
Additions, the estimated cost of which is $11. 7 million, and the City does not have available
sufficient funds to pay the costs. The life of the improvements comprising the Plan of Additions is
declared to be at least 21 years.
( c) Previously Issued Bonds and Loans. The City previously issued the 2013 Bonds,
the 2015 Bonds, and the 2020 Bonds and by the Outstanding Parity Bond Ordinances provided for
the issuance of Future Parity Bonds the payment of which is secured by a lien and charge on Net
Revenue and ULID Assessments on a parity with the lien and charge that secure payment of the
FG: I 02363683.2
Outstanding Parity Bonds if certain Parity Conditions are met at the time the Future Parity Bonds
are issued. The City also has outstanding Loans the payment of which is secured by a lien or charge
on Net Revenue that is junior and inferior to the lien and charge on Net Revenue that secure
payment of the Parity Bonds.
(d) Parity Conditions Met. The amounts required to have been paid into the Bond Fund
for the Outstanding Parity Bonds have been paid and maintained as required therein, and all other
Parity Conditions for the issuance of the Bonds as Future Parity Bonds will have been met and
satisfied before the Bonds are delivered to the Purchaser.
(e) Sufficiency a/Gross Revenue. The Gross Revenue and benefits to be derived from
the operation and maintenance of the Water and Sewer Utility at the rates to be charged for services
from the Water and Sewer Utility will be more than sufficient to meet all Operating and
Maintenance Expense and to permit the setting aside into the Bond Fund out of the Gross Revenue
of amounts sufficient to pay when due the principal of and interest on the Outstanding Parity Bonds
and the Bonds. In fixing the amounts to be paid into the Bond Fund under this ordinance, the City
Council has exercised due regard for Operating and Maintenance Expense and has not obligated
the City to set aside and pay into the Bond Fund a greater amount of Gross Revenue that in its
judgment will be available over and above such Operating and Maintenance Expense and amount
of Gross Revenue previously pledged.
(f) Issuance of Bonds. It is in the best interest of the City to issue and sell the Bonds
to the Purchaser pursuant to the terms set forth in the Bond Purchase Contract as approved by the
City's Designated Representative consistent with this ordinance.
Section 2.
following meanings:
Definitions. As used in this ordinance, the following words shall have the
(a) "2013 Bond Ordinance" means Ordinance No. 3933, passed on July 16, 2013.
(b) "2013 Bonds" means the City's outstanding Water and Sewer Revenue Bonds,
2013, authorized by the 2013 Bond Ordinance.
(c) "2015 Bond Ordinance" means Ordinance No. 3996, passed on May 5, 2015.
( d) "2015 Bonds" means the City's outstanding Water and Sewer Revenue Bonds,
2015, authorized by the 2015 Bond Ordinance.
(e) "2020 Bond Ordinance" means Ordinance No. 4197, passed on October 13, 2020.
(f) "2020 Bonds" means the City's outstanding Water and Sewer Revenue Bonds,
2020 (Certified Climate Bonds), authorized by the 2020 Bond Ordinance.
(g) "Adjusted Net Revenue" means Net Revenue plus withdrawals from the Rate
Stabilization Account and less deposits into the Rate Stabilization Account.
(h) "Annual Debt Service" means, for any fiscal year, with respect to all Parity Bonds
outstanding or maturing in that year, all amounts required to be paid in that year in respect of
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principal of and interest on those Parity Bonds, less all bond interest payable from the proceeds of
any Parity Bonds, and less all Tax Credit Subsidy Payments scheduled to be received in that year.
Parity Bonds issued as Variable Interest Rate Bonds shall be assumed to bear interest at a fixed
rate equal to the higher of (i) the highest variable rate borne during the preceding 24 months by
any Variable Interest Rate Bonds then outstanding or (ii) if no Variable Interest Rate Bonds are
then outstanding, a rate determined by reference to the index to be used to determine the interest
rate on the Future Parity Bonds proposed to be issued or a comparable index.
(i) "Authorized Denominations" means $5,000 or any integral multiple thereof within
a maturity of a Series.
G) "Average Annual Debt Service" means, as of its date of calculation, the sum of the
Annual Debt Service for the current fiscal year and the fiscal years remaining to the last scheduled
maturity of the applicable issue or issues of bonds divided by the number of those years.
(k) "Beneficial Owner" means, with respect to a Bond, the owner of any beneficial
interest in the Bond.
(1) "Bond" means each bond authorized to be issued by this ordinance.
(m) "Bond Counsel" means the firm of Foster Garvey P.C., its successor, or any other
attorney or firm of attorneys selected by the City with a nationally recognized standing as bond
counsel in the field of municipal finance.
(n) "Bond Fund" means the City's Water and Sewer Utility Revenue Bond Fund,
2011, created for the payment of the principal of and premium, if any, and interest on Parity Bonds.
( o) "Bond Insurance Policy" means a municipal bond insurance policy issued by a
Bond Insurer insuring the payment when due of the principal of and interest on Parity Bonds as
provided in such policy.
(p) "Bond Insurer" means a bond insurance company providing a Bond Insurance
Policy or Reserve Security for any outstanding Parity Bonds.
( q) "Bond Purchase Contract" means, with respect to each Series, an offer to purchase
the Series, setting forth certain terms and conditions of the issuance, sale, and delivery of the
Series, which offer is authorized to be accepted by the Designated Representative on behalf of the
City, if consistent with this ordinance. In the case of a competitive sale, the official notice of sale,
the Purchaser's bid, and the award by the City shall constitute the Bond Purchase Contract for
purposes of this ordinance.
(r) "Bond Register" means the books or records maintained by the Registrar for the
purpose of identifying ownership of each Bond.
(s) "City" means the City of Edmonds, Washington, a municipal corporation duly
organized and existing under the laws of the State.
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(t) "City Council" means the legislative authority of the City, as duly and regularly
constituted from time to time.
(u) "Code" means the United States Internal Revenue Code of 1986, as amended, and
applicable rules and regulations promulgated thereunder.
(v) "Construction Fund" means the fund or account designated by the Finance
Director for the payment of the costs of the Plan of Additions.
(w) "Coverage Requirement" means, for any fiscal year, an amount of Adjusted Net
Revenue equal to not less than 1.25 times the Annual Debt Service in that year on all Parity Bonds
then outstanding. For purposes of calculating the Coverage Requirement, ULID Assessments due
in that year and not delinquent shall be subtracted from Annual Debt Service.
(x) "Designated Representative" means the officer of the City appointed in Section 4
to serve as the City's designated representative in accordance with RCW 39.46.040.
(y) "DTC" means The Depository Trust Company, New York, New York, or its
nommee.
(z) "Final Terms" means the terms and conditions for the sale of a Series, including
the amount, date or dates, denominations, interest rate or rates ( or mechanism for determining
interest rate or rates), payment dates, final maturity, redemption rights, price, and other terms or
covenants.
(aa) "Finance Director" means the Finance Director of the City or any other City
official who succeeds to the duties now delegated to that office, or the designee of such officer.
(bb) "Fiscal Agent" means the fiscal agent of the State, as the same may be designated
by the State Finance Committee from time to time.
(cc) "Future Parity Bond Authorizing Ordinance" means an ordinance of the City
authorizing the issuance and sale of Future Parity Bonds.
( dd) "Future Parity Bonds" means all revenue obligations and other obligations of the
City for borrowed money (including financing leases) issued or incurred after the Issue Date, the
payment of the principal of and interest on which is secured by a charge or lien on the Net Revenue
and ULID Assessments equal in rank with the lien and charge on Net Revenue and ULID
Assessments required to be paid into the Bond Fund to pay and secure the payment of the principal
of and interest on the Parity Bonds.
(ee) "Government Obligations" means direct obligations of, or obligations the timely
payment of principal of and interest on which are unconditionally guaranteed by, the United States
of America.
(ff) "Gross Revenue" means all of the earnings and revenues received by the City from
the maintenance and operation of the Water and Sewer Utility, including: revenues from the sale,
lease, or furnishing of commodities, services, properties or facilities; all earnings from the
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investment of money in the Bond Fund that are deposited into the Principal and Interest Account;
earnings from the investment of money in any maintenance fund or similar fund; all connection
and capital improvement charges collected for the purpose of defraying the cost of capital facilities
of the Water and Sewer Utility; and withdrawals from the Rate Stabilization Account. However,
the Gross Revenue shall not include: (a) revenues from City taxes; (b) principal proceeds of Parity
Bonds or any other borrowings, or earnings or proceeds from any investments in a trust,
defeasance, or escrow fund created to defease or refund obligations relating to the Water and Sewer
Utility (until commingled with other earnings and revenues included in the Gross Revenue) or held
in a special account for the purpose of paying a rebate to the United States Government under the
Code; ( c) income and revenue that may not legally be pledged for revenue bond debt service;
( d) improvement district assessments including ULID Assessments; ( e) federal or state grants, and
gifts from any source allocated to capital projects; (f) payments under bond insurance or other
credit enhancement policy or device; (g) insurance or condemnation proceeds used for the
replacement of capital projects or equipment; (h) proceeds from the sale of Water and Sewer
Utility property; (i) earnings on bond proceeds in any construction fund or bond redemption fund;
G) deposits into the Rate Stabilization Account; (k) Tax Credit Subsidy Payments; or (1) revenue
from any Separate Utility System.
(gg) "Independent Utility Consultant" means a professional consultant experienced
with municipal utilities of comparable size and character to the Water and Sewer Utility and in
such areas as are relevant to the purpose for which he or she is being retained. Such a consultant
shall be deemed independent so long as he or she is not an employee or officer of the City.
(hh) "Issue Date" means, with respect to a Bond, the date of initial issuance and delivery
of the Bond to the Purchaser in exchange for the purchase price of the Bond.
(ii) "Letter of Representations" means the Blanket Issuer Letter of Representations
dated August 6, 1996, between the City and DTC, as it may be amended from time to time, and
any successor or substitute letter relating to the operational procedures of the Securities
Depository.
GD "Loans" means any State of Washington Public Works Trust Fund loans, State
Drinking Water Revolving Fund loans, or similar loans entered into by the City to fund
improvements to the Water and Sewer Utility, the payment of which is secured by a lien or charge
on Net Revenue that is junior and inferior to the lien and charge on Net Revenue that secure
payment of the Parity Bonds.
(kk) "Maximum Annual Debt Service" means, as of the date of calculation, the
maximum amount of Annual Debt Service that will mature or come due in the current fiscal year
or any future fiscal year with respect to all Parity Bonds then outstanding.
(11) "MSRB" means the Municipal Securities Rulemaking Board.
(mm) "Municipal Advisor" means Northwest Municipal Advisors of Bellevue,
Washington, or any other municipal advisor then appointed and acting as financial advisor to the
City.
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(nn) "Net Revenue" means the Gross Revenue, less Operating and Maintenance
Expenses.
(oo) "Official Statement" means an offering document, disclosure document, offering
memorandum, or substantially similar disclosure document provided to purchasers and potential
purchasers in connection with the initial offering of a Series in conformance with Rule 15c2-12 or
other applicable regulations of the SEC.
(pp) "Operating and Maintenance Expenses" means all reasonable expenses incurred
by the City in causing the Water and Sewer Utility to be operated and maintained in good repair,
working order, and condition, including payments made pursuant to contract for such service to
any other municipal corporation or private entity for sewage treatment and disposal, water supply
and distribution, or stormwater or other utility service (if the City combines such service into the
Water and Sewer Utility), and including budget charges for the City's administration expenses
allocated to the Water and Sewer Utility, but shall not include depreciation or any taxes ( or charges
in lieu of taxes) levied or imposed by the City.
(qq) "Outstanding Parity Bond Ordinances" means the 2013 Bond Ordinance, the 2015
Bond Ordinance, and the 2020 Bond Ordinance.
(rr)
Bonds.
(ss)
Owner.
"Outstanding Parity Bonds" means the 2013 Bonds, the 2015 Bonds, and the 2020
"Owner" means, without distinction, the Registered Owner and the Beneficial
(tt) "Parity Bond Authorizing Ordinance" means, as applicable to each series of Parity
Bonds, the 2013 Bond Ordinance, the 2015 Bond Ordinance, the 2020 Bond Ordinance, Ordinance
No. 4309, this ordinance, and any Future Parity Bond Authorizing Ordinance.
(uu) "Parity Bonds" means the Outstanding Parity Bonds, the Refunding Bonds, the
Bonds, and any Future Parity Bonds.
(vv) "Parity Conditions" means the conditions precedent to the issuance of Future
Parity Bonds set forth in Exhibit B to this ordinance, which is incorporated herein by this reference.
(ww) "Permitted Investments" means investments that are legal investments for the City
at the time of such investment.
(xx) "Plan of Additions" means the system or plan of additions and improvements to
and betterments and extensions of the Water and Sewer Utility specified, adopted, and ordered to
be carried out by Section 3.
(yy) "Principal and Interest Account" means the account of that name created in the
Bond Fund for the payment of the principal of and interest on the Parity Bonds.
(zz) "Purchaser" means, with respect to each Series, the corporation, firm, association,
partnership, trust, bank, financial institution, or other legal entity or group of entities selected by
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the Designated Representative to serve as purchaser in a direct placement, to serve as underwriter
or placement agent for a negotiated sale, or awarded as the successful bidder in a competitive sale
of the Series.
(aaa) "Rate Stabilization Account" means the account of that name created for the
purposes described in Section 14.
(bbb) "Rating Agency" means each nationally recognized rating agency, if any, providing
a rating on the Bonds at the request of the City.
(ccc) "Record Date" means the Registrar's close of business on the 15th day of the
month preceding an interest payment date. With respect to redemption of a Bond prior to its
maturity, Record Date means the Registrar's close of business on the date on which the Registrar
sends the notice of redemption in accordance with Section 8.
( ddd) "Refunding Bonds" means the water and sewer revenue bonds authorized to be
issued by Ordinance No. 4309, passed on June 20, 2023.
(eee) "Registered Owner" means, with respect to a Bond, the person in whose name the
Bond is registered on the Bond Register. For so long as the City utilizes the book-entry only
system for the Bonds under the Letter of Representations, Registered Owner means the Securities
Depository.
(fff) "Registrar" means the Fiscal Agent or any successor registrar for the Bonds
selected by the City.
(ggg) "Reserve Account" means the account of that name created in the Bond Fund for
the purpose of securing the payment of the principal of and interest on Parity Bonds.
(hhh) "Reserve Requirement" means, subject to Section 2l(d):
(i) prior to the Reserve Requirement Amendment Date, for the Outstanding
Parity Bonds, the Bonds, and each issue of Future Parity Bonds secured by the Reserve
Account, an amount equal to the least of (A) Maximum Annual Debt Service, (B) 125% of
Average Annual Debt Service, or (C) 10% of the original proceeds of each series of the
Parity Bonds then outstanding; and
(ii) on and after the Reserve Requirement Amendment Date, (A) for the 2015
Bonds, an amount equal to the least of (1) Maximum Annual Debt Service on Parity Bonds
secured by the Reserve Account, (2) 125% of Average Annual Debt Service on Parity
Bonds secured by the Reserve Account, or (3) 10% of the original proceeds of each series
of the Parity Bonds secured by the Reserve Account then outstanding, (B) for the 2020
Bonds, the Refunding Bonds, and the Bonds, zero, and (C) for each issue of Future Parity
Bonds, the amount specified as such pursuant to the applicable Future Parity Bond
Authorizing Ordinance.
(iii) "Reserve Requirement Amendment Date " means the first date on which all of the
following have occurred:
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(A) the 2013 Bonds are deemed to be no longer outstanding under the 2013
Bond Ordinance;
(B) the 2020 Bonds, the Refunding Bonds, and the Bonds then outstanding
together constitute not less than 50% in aggregate principal amount of the Parity Bonds
then outstanding;
(C) the City has caused notice of the passage of this ordinance to be given by
first class United States mail to all registered owners of the then outstanding 2015 Bonds
and 2020 Bonds and to Moody's Investors Service, Inc. and S&P Global Ratings, which
notice briefly describes this ordinance and states that a copy is available from the Finance
Director for inspection; and
(D) the City has received an opinion of Bond Counsel stating that this ordinance
and Ordinance No. 4309 are permitted by the 2015 Bond Ordinance and the 2020 Bond
Ordinance, that upon the effective date of this ordinance, this ordinance and Ordinance
No. 4309 will be valid and binding upon the City in accordance with their respective terms,
and that the passage of this ordinance and Ordinance No. 4309 will not adversely affect the
exclusion from gross income for federal income tax purposes of interest on the 2015 Bonds
or the 2020 Bonds.
Gjj) "Reserve Security" means, in lieu of cash and investments, any bond insurance,
collateral, security, letter of credit, guaranty, surety bond, or similar credit enhancement device
providing for or securing the payment of all or part of the principal of and interest on Parity Bonds,
issued by an institution that has been assigned a credit rating at the time that such Reserve Security
is provided in the two highest rating categories without regard to gradations within those categories
(i.e., AAA or AA).
(ill) "Rule 15c2-12" means Rule l 5c2-12 promulgated by the SEC under the Securities
Exchange Act of 1934, as amended.
(lll) "SEC" means the United States Securities and Exchange Commission.
(mmm) "Securities Depository" means DTC, any successor thereto, any substitute
securities depository selected by the City that is qualified under applicable laws and regulations to
provide the services proposed to be provided by it, or the nominee of any of the foregoing.
(nnn) "Separate Utility System" means any water supply, sewage collection or treatment,
stormwater management, or other utility service or facilities that may be created, acquired, or
constructed by the City as provided in Section 15.
( ooo) "Series" means a series of the Bonds issued pursuant to this ordinance.
(ppp) "Sewer System" means the sanitary sewage collection and disposal system of the
City, also referred to as the sewer utility.
(qqq) "State" means the State of Washington.
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(rrr) "Stormwater System" means the stormwater management utility combined into the
Water and Sewer Utility pursuant to chapter 7.60 of the Edmonds City Code.
(sss) "System of Registration" means the system ofregistration for the City's bonds and
other obligations set forth in Ordinance No. 2451 of the City.
(ttt) "Tax Credit Subsidy Bond" means any bond that is designated by the City as a
"build America bond" or other type of tax credit bond, pursuant to the Code, and which is further
designated as a "qualified bond" under Section 6431 of the Code ( or under similar provisions of
the Code providing for "direct-pay" tax credit bonds), and with respect to which the City expects
to receive a Tax Credit Subsidy Payment.
(uuu) "Tax Credit Subsidy Payment" means the amounts the City expects to receive as a
tax credit payable by the United States Treasury to the City under Section 6431 of the Code ( or
under similar provisions of the Code providing for "direct-pay" tax credit bonds), in respect of any
Parity Bonds.
(vvv) "Tax-Exempt Bonds" means any Series issued on a tax-exempt basis.
(www) "Term Bond" means a Bond designated as a term bond and subject to mandatory
redemption prior to maturity in the years and amounts set forth in the Bond Purchase Contract.
(xxx) "ULID" means any utility local improvement district now existing or hereafter
created for the acquisition or construction of additions, extensions, or betterments of any portion
of the Water and Sewer Utility.
(yyy) "ULID Assessments" means the assessments levied in any ULID that are pledged
to be paid into the Bond Fund, including installment payments of any assessment as well as the
interest and penalties (if any) thereon, less any prepaid assessments permitted by law to be paid
into a construction fund or account.
(zzz) "Undertaking" means the undertaking to provide continuing disclosure entered
into pursuant to Section 20.
(aaaa) "Variable Interest Rate" means a variable interest rate or rates to be borne by a
series of Future Parity Bonds or any one or more maturities within a series of Future Parity Bonds.
The method of computing such a variable interest rate ( or parameters with respect thereto) shall
be specified in the Future Parity Bond Authorizing Ordinance, which shall specify either (i) the
particular period or periods of time or manner of determining such period or periods of time for
which each value of such variable interest rate shall remain in effect or (ii) the time or times upon
which any change in such variable interest rate shall become effective.
(bbbb) "Variable Interest Rate Bonds" means, for any period of time, Future Parity Bonds
that bear a Variable Interest Rate during that period. Future Parity Bonds the interest rate or rates
on which have been fixed for the remainder of the term thereof no longer shall be deemed to be
Variable Interest Rate Bonds.
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FG: 102363683.2
( cccc) "Water and Sewer Utility" means the combined utility, as described in chapter 7 .60
of the Edmonds City Code, including the component Water, Sewer, and Stormwater Systems,
together with all additions thereto and betterments and extensions thereof at any time made, and
any other utility systems hereafter combined with the Water and Sewer Utility.
(dddd) "Water and Sewer Utility Fund" means, together, the Water Fund, the Sewer Fund,
and the Stormwater Fund, each of which has previously been established by the City.
(eeee) "Water System" means the system of water supply and transmission of the City,
also referred to as the water utility.
Section 3. Adoption of Plan of Additions; Purpose and Authorization of the Bonds.
(a) The City specifies, adopts, and orders the carrying out of the projects described in
Exhibit C to this ordinance, which is incorporated herein by this reference, as a system or plan of
additions to and betterments and extensions of the Water and Sewer Utility. The Plan of Additions
shall be carried out in accordance with the plans and specifications therefor prepared by the City's
engineers and consulting engineers. The City Council may modify the details of the Plan of
Additions where, in its judgment, it appears advisable if such modifications do not substantially
alter the purposes of that system or plan. The cost of the Plan of Additions, including the cost of
issuance and sale of the Bonds, shall be paid from the proceeds of the Bonds and from other money
available to the Water and Sewer Utility.
(b) The City is authorized to borrow money on the credit of the City and to issue water
and sewer revenue bonds evidencing indebtedness to provide the funds necessary (1) to carry out
the Plan of Additions, (2) to make a deposit into the Reserve Account, and (3) to pay the costs of
issuance of the Bonds. The Bonds shall be allocated to paying the respective costs of the Plan of
Additions in such order of time as the City determines is advisable and practicable.
Section 4. Description of the Bonds: Appointment of Designated Representative. The
Mayor and the Mayor's designee are each individually appointed as the Designated Representative
of the City, and each is individually authorized and directed to conduct the sale of the Bonds in
the manner and upon the terms deemed most advantageous to the City, and to approve the Final
Terms of each Series, with such additional terms and covenants as the Designated Representative
deems advisable, within the parameters set forth in Exhibit A to this ordinance, which is
incorporated herein by this reference. The Bonds may be issued in one or more series together with
or separately from the Refunding Bonds, as determined by the Designated Representative.
Section 5. Registrar; Registration and Transfer of Bonds.
(a) Registration of Bonds. Each Bond shall be issued only in registered form as to both
principal and interest and the ownership of each Bond shall be recorded on the Bond Register.
(b) Registrar; Duties. The Fiscal Agent is appointed as initial Registrar. The Registrar
shall keep, or cause to be kept, sufficient books for the registration and transfer of the Bonds, which
shall be open to inspection by the City at all times. The Registrar is authorized, on behalf of the
City, to authenticate and deliver Bonds transferred or exchanged in accordance with the provisions
of the Bonds and this ordinance, to serve as the City's paying agent for the Bonds, and to carry out
FG : 102363683.2
all of the Registrar's powers and duties under this ordinance and the System of Registration. The
Registrar shall be responsible for its representations contained in the Registrar's Certificate of
Authentication on each Bond. The Registrar may become an Owner with the same rights it would
have if it were not the Registrar and, to the extent permitted by law, may act as depository for and
permit any of its officers or directors to act as members of, or in any other capacity with respect
to, any committee formed to protect the rights of Owners.
( c) Bond Register; Transfer and Exchange of Bonds. The Bond Register shall contain
the name and mailing address of each Registered Owner and the principal amount and number of
each Bond held by each Registered Owner. A Bond surrendered to the Registrar may be exchanged
for a Bond or Bonds in any Authorized Denomination of an equal aggregate principal amount and
of the same Series, maturity, and interest rate. A Bond may be transferred only if endorsed in the
manner provided thereon and surrendered to the Registrar. Any exchange or transfer shall be
without cost to the Owner or transferee. The Registrar shall not be obligated to exchange any Bond
or transfer registered ownership during the period between the applicable Record Date and the
redemption date.
(d) Securities Depository; Book-Entry Only Form. If a Bond is to be issued in book-
entry only form, DTC shall be appointed as initial Securities Depository and each such Bond
initially shall be registered in the name of Cede & Co., as the nominee of DTC. Each Bond
registered in the name of the Securities Depository shall be held fully immobilized in book-entry
only form by the Securities Depository in accordance with the provisions of the Letter of
Representations. Registered ownership of any Bond registered in the name of the Securities
Depository may not be transferred except: (i) to any successor Securities Depository; (ii) to any
substitute Securities Depository appointed by the City; or (iii) to any person if the Bond is no
longer to be held in book-entry only form. Upon the resignation of the Securities Depository, or
upon a termination of the services of the Securities Depository by the City, the City may appoint
a substitute Securities Depository. If (i) the Securities Depository resigns and the City does not
appoint a substitute Securities Depository, or (ii) the City terminates the services of the Securities
Depository, the Bonds no longer shall be held in book-entry only form and the registered
ownership of each Bond may be transferred to any person as provided in this ordinance.
Neither the City nor the Registrar shall have any obligation to participants of any Securities
Depository or the persons for whom they act as nominees regarding accuracy of any records
maintained by the Securities Depository or its participants. Neither the City nor the Registrar shall
be responsible for any notice that is permitted or required to be given to the Registered Owner of
a Bond registered in the name of the Securities Depository except such notice as is required to be
given by the Registrar to the Securities Depository.
Section 6. Form and Execution of Bonds.
(a) Form of Bonds; Signatures and Seal. Each Bond shall be prepared in a form
consistent with the provisions of this ordinance and State law. Each Bond shall be signed by the
Mayor and the City Clerk, either or both of whose signatures may be manual or in facsimile, and
the seal of the City or a facsimile reproduction thereof shall be impressed or printed thereon. If
any officer whose manual or facsimile signature appears on a Bond ceases to be an officer of the
City authorized to sign bonds before the Bond bearing his or her manual or facsimile signature is
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FG: 102363683 .2
authenticated by the Registrar, or issued or delivered by the City, that Bond nevertheless may be
authenticated, issued, and delivered and, when authenticated, issued, and delivered, shall be as
binding on the City as though that person had continued to be an officer of the City authorized to
sign bonds. Any Bond also may be signed on behalf of the City by any person who, on the actual
date of signing of the Bond, is an officer of the City authorized to sign bonds, although he or she
did not hold the required office on the Issue Date.
(b) Authentication. Only a Bond bearing a Certificate of Authentication in
substantially the following form, manually signed by the Registrar, shall be valid or obligatory for
any purpose or entitled to the benefits of this ordinance: "Certificate of Authentication. This Bond
is one of the fully registered City of Edmonds, Washington, Water and Sewer Revenue Bonds,
[Series]." The authorized signing of a Certificate of Authentication shall be conclusive evidence
that the Bond so authenticated has been duly executed, authenticated, and delivered and is entitled
to the benefits of this ordinance.
Section 7. Payment of Bonds. Principal of and interest on each Bond shall be payable
in lawful money of the United States of America. Principal of and interest on each Bond registered
in the name of the Securities Depository are payable in the manner set forth in the Letter of
Representations. Interest on each Bond not registered in the name of the Securities Depository is
payable by electronic transfer on the interest payment date, or by check or draft of the Registrar
mailed on the interest payment date to the Registered Owner at the address appearing on the Bond
Register on the Record Date. The City is not required to make electronic transfers except pursuant
to a request by a Registered Owner in writing received on or prior to the Record Date and at the
sole expense of the Registered Owner. Principal of each Bond not registered in the name of the
Securities Depository is payable upon presentation and surrender of the Bond by the Registered
Owner to the Registrar. Payment of the Bonds is not subject to acceleration under any
circumstances.
Section 8. Redemption Provisions and Open Market Purchase of Bonds.
(a) Optional Redemption. The Bonds shall be subject to redemption at the option of
the City on terms acceptable to the Designated Representative, as set forth in the Bond Purchase
Contract, consistent with the parameters set forth in Exhibit A.
(b) Mandatory Redemption. Each Bond that is designated as a Term Bond in the Bond
Purchase Contract, consistent with the parameters set forth in Exhibit A, shall be called for
redemption at a price equal to the stated principal amount to be redeemed, plus accrued interest,
on the dates and in the amounts as set forth in the Bond Purchase Contract. If a Term Bond is
redeemed under the optional redemption provisions, defeased, or purchased by the City and
surrendered for cancellation, the principal amount of the Term Bond so redeemed, defeased, or
purchased (irrespective of its actual redemption or purchase price) shall be credited against one or
more scheduled mandatory redemption installments for the Term Bond. The City shall determine
the manner in which the credit is to be allocated and shall notify the Registrar in writing of its
allocation prior to the earliest mandatory redemption date for the Term Bond for which notice of
redemption has not already been given.
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FG: 102363683.2
(c) Selection of Bonds for Redemption; Partial Redemption. If fewer than all of the
outstanding Bonds are to be redeemed at the option of the City, the City shall select the Series and
maturities to be redeemed. If fewer than all of the outstanding Bonds of a maturity of a Series are
to be redeemed, the Securities Depository shall select Bonds registered in the name of the
Securities Depository to be redeemed in accordance with the Letter of Representations, and the
Registrar shall select all other Bonds to be redeemed randomly in such manner as the Registrar
shall determine. All or a portion of the principal amount of any Bond that is to be redeemed may
be redeemed in any Authorized Denomination. If less than all of the outstanding principal amount
of any Bond is redeemed, upon surrender of that Bond to the Registrar, there shall be issued to the
Registered Owner, without charge, a new Bond (or Bonds, at the option of the Registered Owner)
of the same Series, maturity, and interest rate in any Authorized Denomination in the aggregate
principal amount to remain outstanding.
( d) Notice of Redemption. Notice of redemption of each Bond registered in the name
of the Securities Depository shall be given in accordance with the Letter of Representations. Notice
ofredemption of each other Bond, unless waived by the Registered Owner, shall be given by the
Registrar not less than 20 nor more than 60 days prior to the date fixed for redemption by first-
class mail, postage prepaid, to the Registered Owner at the address appearing on the Bond Register
on the Record Date. The requirements of the preceding sentence shall be satisfied when notice has
been mailed as so provided, whether or not it is actually received by an Owner. In addition, the
redemption notice shall be mailed or sent electronically within the same period to the MSRB (if
required under the Undertaking), to each Rating Agency, and to such other persons and with such
additional information as the Finance Director shall determine, but these additional mailings shall
not be a condition precedent to the redemption of any Bond.
(e) Rescission of Optional Redemption Notice. In the case of an optional redemption,
the notice of redemption may state that the City retains the right to rescind the redemption notice
and the redemption by giving a notice of rescission to the affected Registered Owners at any time
on or prior to the date fixed for redemption. Any notice of optional redemption that is so rescinded
shall be of no effect, and each Bond for which a notice of optional redemption has been rescinded
shall remain outstanding.
(f) Effect of Call for Redemption. Interest on each Bond called for redemption shall
cease to accrue on the date fixed for redemption, unless either the notice of optional redemption is
rescinded as provided in subsection ( e) of this Section or money sufficient to effect such
redemption is not on deposit in the Bond Fund or in a trust account established to refund or defease
the Bond.
(g) Purchase of Bonds. The City reserves the right to purchase any or all of the Bonds
offered to the City or in the open market at any time at any price acceptable to the City plus accrued
interest to the date of purchase.
Section 9. Failure T o Pay Bonds. If the principal of any Bond is not paid when the
Bond is properly presented at its maturity date or date fixed for redemption, the City shall be
obligated to pay, from the sources pledged herein, interest on the Bond at the same rate provided
in the Bond from and after its maturity or date fixed for redemption until the Bond, both principal
and interest, is paid in full or until sufficient money for its payment in full is on deposit in the Bond
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FG: 102363683.2
Fund or in a trust account established to refund or defease the Bond, and the Bond has been called
for payment by giving notice of that call to the Registered Owner.
Section 10. Refunding or Defeasance of the Bonds. The City may issue refunding
bonds pursuant to State law or use money available from any other lawful source to carry out a
refunding or defeasance plan, which may include (a) paying when due the principal of and interest
on any or all of the Bonds (the "defeased Bonds"); (b) redeeming the defeased Bonds prior to their
maturity; and (c) paying the costs of the refunding or defeasance. If the City sets aside in a special
trust fund or escrow account irrevocably pledged to that redemption or defeasance (the "trust
account") money and/or Government Obligations maturing at a time or times and bearing interest
in amounts sufficient to redeem, refund, or defease the defeased Bonds in accordance with their
terms, then all right and interest of the Owners of the defeased Bonds in the covenants of this
ordinance and in the funds and accounts obligated to the payment of the defeased Bonds shall
cease and become void. Thereafter, the Registered Owners of defeased Bonds shall have the right
to receive payment of the principal of and interest on the defeased Bonds solely from the trust
account and the defeased Bonds shall be deemed no longer outstanding. In that event, the City may
apply money remaining in any fund or account (other than the trust account) established for the
payment or redemption of the defeased Bonds to any lawful purpose, subject only to the rights of
the registered owners of any other Parity Bonds then outstanding.
Unless otherwise specified by the City in a refunding or defeasance plan, notice of
refunding or defeasance shall be given, and selection of Bonds for inclusion in a refunding or
defeasance shall be conducted, in the manner prescribed in this ordinance for the redemption of
Bonds.
Section 11. Security for the Bonds; Bond Fund.
(a) Pledge of Net Revenue. The Net Revenue and ULID Assessments are pledged
irrevocably to the payment of the Bonds, and the amounts pledged to be paid into the Bond Fund
to pay and secure the payment of the principal of and interest on the Bonds when due shall
constitute a lien and charge on the Net Revenue and ULID Assessments on a parity with the lien
and charge on the Net Revenue and ULID Assessments pledged to be paid into the Bond Fund to
pay and secure the payment of the principal of and interest on the Outstanding Parity Bonds and
any Future Parity Bonds, and prior and superior to any other liens or charges whatsoever.
(b) Special Obligations. The principal of and interest on the Bonds are payable
exclusively from the Bond Fund and the Net Revenue and ULID Assessments pledged to be paid
into the Bond Fund to pay principal of and interest on the Bonds when due. The Bonds are special
obligations of the City and do not constitute an obligation of the State, either general or special, or
any political subdivision thereof other than the City. The Bonds are not general obligations of the
City and shall not constitute an indebtedness of the City within the meaning of the State
constitution. Neither the full faith and credit nor the taxing power of the City is pledged to the
payment of the Bonds. The Registered Owners shall not have any claim for the payment of the
Bonds against the City arising from the Bonds except for payment from the Bond Fund and the
Net Revenue and ULID Assessments pledged to be paid into the Bond Fund to pay principal of
and interest on the Bonds when due. The Registered Owners shall not have any claim against the
State arising from the Bonds.
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FG: 102363683.2
( c) Bond Fund; Deposits into the Bond Fund. The Bond Fund has been established
within the Water and Sewer Utility Fund as a special fund of the City and is to be drawn upon
solely for the payment of the principal of and premium, if any , and interest on Parity Bonds. The
Bond Fund is divided into two accounts: the Principal and Interest Account and the Reserve
Account.
The City obligates and binds itself to set aside and pay into the Bond Fund all ULID
Assessments and, out of the Net Revenue, certain fixed amounts, without regard to any fixed
proportion, namely:
(1) Into the Principal and Interest Account, before each interest payment date for the
Parity Bonds, an amount that will be sufficient, together with other money on
deposit therein, to pay the interest on the Parity Bonds due on the interest payment
date; and
(2) Into the Principal and Interest Account, before each principal payment date of the
Parity Bonds (including any mandatory redemption date), an amount that will be
sufficient, together with other money on deposit therein, to pay the principal of the
Parity Bonds due on the principal payment date (including mandatory redemption
amounts due with respect to any Term Bonds); and
(3) Into the Reserve Account, at the time and in the manner required by this ordinance,
the amount, if any, necessary to make the amount on deposit in the Reserve Account
equal to the Reserve Requirement for the Parity Bonds.
When the total amount on deposit in the Bond Fund equals the total amount of principal and
interest due for all outstanding Parity Bonds to the last maturity thereof, no further payment need
be made into the Bond Fund. The Finance Director may create sinking fund accounts or other
accounts in the Bond Fund for the payment or securing the payment of Parity Bonds as long as the
maintenance of such accounts does not conflict with the rights of the registered owners of Parity
Bonds.
( d) Reserve Account; Reserve Requirement. The City will at all times maintain on
deposit in the Reserve Account an amount equal to the Reserve Requirement, except as otherwise
expressly authorized in this subsection, until the total amount on deposit in the Bond Fund equals
the total amount of principal and interest due for all outstanding Parity Bonds to the last maturity
thereof, at which time the money in the Reserve Account may be used to pay any such principal
and interest, so long as the amount remaining on deposit in the Reserve Account is not less than
the Reserve Requirement calculated based on the Parity Bonds then outstanding. The Reserve
Requirement shall be deemed satisfied by any combination of Parity Bond proceeds, Reserve
Securities, or other legally available money equal to the Reserve Requirement, or by the deposit
of available funds of the City in approximately equal annual installments so that the Reserve
Requirement is funded no later than three years after the issuance of any Future Parity Bonds.
If there is a deficiency in the Principal and Interest Account to make the next payment of
principal of or interest on the Parity Bonds, the deficiency shall be made up from the Reserve
Account by the withdrawal of amounts necessary for that purpose,first, from money on deposit in
the Reserve Account, and second, from pro rat a draws on each Reserve Security. Any deficiency
created in the Reserve Account by reason of any such withdrawal shall be made up from the next
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FG: 102363683 .2
available ofN et Revenue and ULID Assessments after making necessary provision for the required
payments into the Principal and Interest Account,first, to restore each Reserve Security pro rata,
and second, to make up any remaining deficiency.
The City may establish a separate Reserve Requirement for any or all of the Bonds or any
Future Parity Bonds, which may be zero, and establish one or more separate reserve subaccounts
for any or all of the Bonds or any Future Parity Bonds. On and after the Reserve Requirement
Amendment Date, the Bonds shall not be secured by the Reserve Account.
( e) Investment of Money in Bond Fund. All money in the Bond Fund may be kept in
cash; deposited with an institution (as permitted by law) in an amount in each institution not greater
than the amount insured by any department or agency of the United States Government; or invested
in Permitted Investments maturing not later than the date when needed (for investments in the
Principal and Interest Account) or the last maturity of any Parity Bonds then outstanding (for
investments in the Reserve Account). Income from investments in the Principal and Interest
Account shall be deposited into that account. Income from investments in the Reserve Account
shall be deposited into that account until the amount on deposit therein is equal to the Reserve
Requirement, and thereafter shall be deposited into the Principal and Interest Account or used for
other Water and Sewer Utility purposes.
(f) Action to Compel Payments. If the City fails to set aside and pay into the Bond
Fund the amounts set forth above, the registered owner of any of the Parity Bonds then outstanding
may bring action against the City and compel the setting aside and payment.
Section 12. Flow of Funds. All ULID Assessments shall be paid into the Bond Fund
and the Gross Revenue shall be deposited into the Water and Sewer Utility Fund ( or the respective
system funds therein) to be used for the following purposes only in the following order of priority:
(1) To pay Operating and Maintenance Expenses.
(2) To make when due the required payments into the Principal and Interest Account
in respect of interest on the Parity Bonds.
(3) To make when due the required payments into the Principal and Interest Account
in respect of principal of (and premium, if any, on) the Parity Bonds, whether at
maturity or pursuant to redemption prior to maturity.
( 4) To make when due all payments required to be made into the Reserve Account.
( 5) To make when due all payments required to be made under any reimbursement
agreement with a Bond Insurer in any priority not inconsistent with this ordinance,
which the City may hereafter establish by ordinance.
( 6) To make when due the required payments to be made into any revenue bond, note,
warrant, or other revenue obligation redemption fund, debt service account, or
reserve account created to pay and secure the payment of any revenue obligations
of the Water and Sewer Utility the payment of which is secured by a lien or charge
on Net Revenue junior and inferior to the lien and charge on Net Revenue that
secure payment of the Parity Bonds.
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FG: 102363683.2
(7) Without priority, to retire by redemption or to purchase in the open market any
Parity Bonds or junior lien obligations then outstanding, to make necessary
betterments and replacements of or repairs, additions, or extensions to the Water
and Sewer Utility, to make deposits into the Rate Stabilization Account, or for any
other lawful purpose.
Section 13. Additional Covenants. The City covenants and agrees with the Registered
Owner of each Bond at any time outstanding as follows:
(a) Maintenance and Operation. The City will at all times maintain, preserve, and
keep the properties of the Water and Sewer Utility in good repair, working order, and condition,
will make all necessary and proper additions, betterments, renewals, and repairs thereto and
improvements, replacements, and extensions thereof, and will at all times operate or cause to be
operated the properties of the Water and Sewer Utility and the business in connection therewith in
an efficient manner and at a reasonable cost.
(b) Establishment and Collection of Rates and Charges. The City will establish,
maintain, and collect rates and charges for all services and facilities provided by the Water and
Sewer Utility that will be fair and nondiscriminatory. The City will adjust those rates and charges
from time to time so that: (i) the Gross Revenue will at all times be sufficient to (A) pay all
Maintenance and Operation Expenses on a current basis, (B) pay when due all amounts that the
City is obligated to pay into the Bond Fund and the accounts therein, and (C) pay all taxes ( or
payments in lieu thereof), assessments, or other governmental charges lawfully imposed on the
Water and Sewer Utility and any and all other amounts that the City may now or hereafter become
obligated to pay from the Gross Revenue by law or contract; and (ii) the Adjusted Net Revenue in
each fiscal year will be not less than the Coverage Requirement.
( c) Sale or Disposition of Utility Property. The City will not sell, lease, mortgage, or
in any manner encumber or dispose of all the property of the Water and Sewer Utility unless
provision is made for payment into the Bond Fund of a sum sufficient to pay the principal of and
interest on all Parity Bonds then outstanding. Further, the City will not sell, lease, mortgage, or in
any manner encumber or dispose of (each, a "disposition") any part of the property of the Water
and Sewer Utility that is used, useful, and material to the operation thereof ( the "affected portion")
unless provision is made for replacement thereof or for payment into the Bond Fund of an amount
which shall bear the same ratio to the amount of Parity Bonds then outstanding (less the amount
of cash and investments in the Bond Fund and the accounts therein) as (i) the Net Revenue from
affected portion of the Water and Sewer Utility for the twelve months preceding such disposition
bears to (ii) the Net Revenue from the entire Water and Sewer Utility for the same period. Any
money paid into the Bond Fund as a result of such a disposition shall be used to retire that
proportion of Parity Bonds then outstanding at the earliest practicable date.
(d) Books and Records. The City will maintain complete books and records relating to
the operation of the Water and Sewer Utility and its financial affairs, and will cause such books
and records to be audited annually, and cause to be prepared an annual financial and operating
statement, which shall be provided to any owner of Parity Bonds upon request.
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FG: 102363683 .2
( e) No Free Service. Except to aid the poor or infirm, to provide for resource
conservation, or to provide for the proper handling of hazardous materials, the City will not furnish
or supply or permit the furnishing or supplying of any service or facility in connection with the
operation of the Water and Sewer Utility free of charge to any person, firm, or corporation, public
or private, other than the City.
(f) Collection of Delinquent Accounts. On at least an annual basis, the City will
determine all accounts that are delinquent and will take all necessary action to enforce payment of
such accounts against those property owners whose accounts are delinquent.
(g) Insurance. The City will at all times carry fire and such other forms of insurance
on such of the buildings, equipment, facilities, and properties of the Water and Sewer Utility as
are ordinarily carried on such buildings, equipment, facilities, and properties by utilities engaged
in the operation of similar utility systems to the full insurable value thereof, and also will carry
adequate public liability insurance at all times. The City may self-insure or participate in a joint
intergovernmental insurance pool or similar plan, and the cost of that insurance or self-insurance
shall be considered a part of Operating and Maintenance Expenses.
(h) ULID Assessments. The City will promptly collect all ULID Assessments and
deposit such collections into the Bond Fund to pay or secure the principal of and interest on any
Parity Bonds without those ULID Assessments being particularly allocated to any particular series
of Parity Bonds.
Section 14. Rate Stabilization Account. The Rate Stabilization Account has been
previously established within the Water and Sewer Utility Fund. Deposits and withdrawals shall
be made in accordance with this Section at any time up to and including the date that is 90 days
after the end of the fiscal year for which the deposit or withdrawal will be included as Adjusted
Net Revenue for that fiscal year, as follows:
(a) Deposits into the Rate Stabilization Account. The City may at any time, as
determined by the Finance Director, consistent with the covenants contained in this ordinance,
deposit into the Rate Stabilization Account amounts of Gross Revenue and any other money
received by the Water and Sewer Utility and available to be used therefor, excluding principal
proceeds of Parity Bonds or other borrowing. However, no deposit of Gross Revenue may be made
into the Rate Stabilization Account to the extent that such deposit would prevent the City from
meeting the Coverage Requirement in the relevant fiscal year.
(b) Withdrawals from the Rate Stabilization Account. The City may withdraw money
from the Rate Stabilization Account at any time upon authorization of the City Council (which
may be by motion, resolution, or ordinance) for inclusion in the Adjusted Net Revenue for any
fiscal year of the Water and Sewer Utility, except that the total amount withdrawn from the Rate
Stabilization Account in any fiscal year may not exceed the Annual Debt Service in that fiscal
year. Earnings from investments in the Rate Stabilization Account shall be deposited into that
account and shall not be included as Adjusted Net Revenue unless and until withdrawn from that
account.
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FG : I 02363683 .2
Section 15. Separate Utility Systems. The City may create, acquire, construct, finance,
own, and operate one or more additional systems for water supply, sewer service, water, sewage,
or stormwater transmission or treatment, or other commodity or utility service. The revenue of the
Separate Utility System, and any utility local improvement district assessments payable solely with
respect to improvements to a Separate Utility System, shall not be included in Gross Revenue and
may be pledged to the payment of revenue obligations issued to purchase, construct, condemn, or
otherwise acquire or expand the Separate Utility System. Neither the Gross Revenue nor the Net
Revenue may be pledged to the payment of any obligations of a Separate Utility System, except
that the Net Revenue may be pledged on a basis subordinate to the lien on Net Revenue that secures
payment of the Parity Bonds.
Section 16. Deposit of Bond Proceeds. On the Issue Date, proceeds of the Bonds in an
amount sufficient to satisfy the Reserve Requirement shall be deposited into the Reserve Account.
The remaining proceeds of the Bonds shall be deposited into the Construction Fund and be used
to pay the costs of issuance and sale of the Bonds and the costs of carrying out the Plan of
Additions. Until needed to pay such costs, the City may invest those proceeds temporarily in any
Permitted Investment, and the investment earnings shall be retained in the Construction Fund and
used for the purposes of that fund, except that earnings subject to a federal tax or rebate
requirement (if applicable) may be withdrawn from the Construction Fund and used for those tax
or rebate purposes.
Section 17. Sale and Delivery of the Bonds: Parity Certificate.
(a) Manner of Sale of Bonds; Delivery of Bonds. The Designated Representative is
authorized to sell each Series by direct placement, negotiated sale, or competitive sale in
accordance with a notice of sale consistent with this ordinance, based on the assessment of the
Designated Representative of market conditions, in consultation with appropriate City officials
and staff, Bond Counsel, the Municipal Advisor, and other advisors. In determining the method of
sale of a Series and accepting the Final Terms, the Designated Representative shall take into
account those factors that, in the judgment of the Designated Representative, may be expected to
result in the lowest true interest cost to the City.
(b) Procedure for Direct Placement or Negotiated Sale. If the Designated
Representative determines that a Series is to be sold by direct placement or negotiated sale, the
Designated Representative shall select one or more Purchasers with which to negotiate the sale.
The Bond Purchase Contract for each Series shall set forth the Final Terms. The Designated
Representative is authorized to execute the Bond Purchase Contract on behalf of the City, so long
as the terms provided therein are consistent with this ordinance.
( c) Procedure for Competitive Sale. If the Designated Representative determines that
a Series is to be sold by competitive sale, the Designated Representative shall cause the preparation
of an official notice of bond sale setting forth parameters for the Final Terms and any other bid
parameters that the Designated Representative deems appropriate, consistent with this ordinance.
Bids for the purchase of each Series shall be received at such time or place and by such means as
the Designated Representative directs. On the date and time established for the receipt of bids, the
Designated Representative (or the designee of the Designated Representative) shall open bids and
shall cause the bids to be mathematically verified. The Designated Representative is authorized to
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FG: 102363683 .2
award, on behalf of the City, the winning bid and accept the winning bidder's offer to purchase
the Series, with such adjustments to the aggregate principal amount and principal amount per
maturity as the Designated Representative deems appropriate, consistent with this ordinance. The
Designated Representative may reject any or all bids submitted and may waive any formality or
irregularity in any bid or in the bidding process if the Designated Representative deems it to be in
the City's best interest to do so. If all bids are rejected, the Series may be sold by direct placement
or negotiated sale or in any manner provided by law as the Designated Representative determines
is in the best interest of the City, consistent with this ordinance.
(d) Parity Certificate. At the time of issuance of the Bonds, the Designated
Representative shall cause to be executed and have on file a certificate of coverage as required for
the issuance of Future Parity Bonds under Section 19 of the 2013 Bond Ordinance, Section 19 of
the 2015 Bond Ordinance, and Section 19 of the 2020 Bond Ordinance.
(e) Preparation, Execution, and Delivery of the Bonds. The Bonds will be prepared at
City expense and will be delivered to the Purchaser in accordance with the Bond Purchase
Contract, together with the approving legal opinion of Bond Counsel regarding the Bonds.
Section 18. Parity Conditions. The City reserves the right to issue Future Parity Bonds
the payment of the principal of and interest on which are secured by a lien and charge on the Net
Revenue and ULID Assessments on a parity with the lien and charge on Net Revenue and ULID
Assessments that secure payment of the Bonds and the Outstanding Parity Bonds if the Parity
Conditions are met and complied with at the time of the issuance of the Future Parity Bonds.
Nothing contained in the Parity Conditions shall prevent the City from issuing revenue obligations
the payment of which is secured by a lien or charge on Net Revenue that is junior and inferior to
the lien and charge on Net Revenue that secure payment of the Parity Bonds, or from pledging to
pay into a bond redemption fund or account for such junior lien obligations assessments (including
interest and penalties thereon) in any utility local improvement district that are levied to pay part
or all of the cost of improvements being constructed out of the proceeds of the sale of such junior
lien obligations. Neither shall anything contained in this ordinance prevent the City from issuing
revenue obligations to refund maturing Parity Bonds for the payment of which money is not
otherwise available.
Section 19. Tax Matters.
(a) Preservation of Tax Exemption for Interest on Tax-Exempt Bonds. The City will
take all actions necessary to prevent interest on the Tax-Exempt Bonds from being included in
gross income for federal income tax purposes, and it will neither take any action nor make or
permit any use of proceeds of the Tax-Exempt Bonds ( or other funds of the City treated as proceeds
of the Tax-Exempt Bonds) that will cause interest on the Tax-Exempt Bonds to be included in
gross income for federal income tax purposes. The City will, to the extent the arbitrage rebate
requirements of Section 148 of the Code are applicable to the Tax-Exempt Bonds, take all actions
necessary to comply ( or to be treated as having complied) with those requirements in connection
with the Tax-Exempt Bonds.
(b) Post-Issuance Compliance. The Finance Director is authorized and directed to
review and update the City's written procedures to facilitate compliance by the City with the
20
FG: 102363683.2
covenants in this Section and the applicable requirements of the Code that must be satisfied after
the Issue Date to prevent interest on the Tax-Exempt Bonds from being included in gross income
for federal tax purposes.
(c) Designation of Bonds as "Qualified Tax-Exempt Obligations." The Designated
Representative may designate one or more Series of Tax-Exempt Bonds as "qualified tax-exempt
obligations" for the purposes of Section 265(b )(3) of the Code, if the following conditions are met:
(1) the Series of Tax-Exempt Bonds does not constitute "private activity bonds" within
the meaning of Section 141 of the Code;
(2) the reasonably anticipated amount of tax-exempt obligations (other than private
activity bonds and other obligations not required to be included in such calculation)
that the City and any entity subordinate to the City (including any entity that the
City controls, that derives its authority to issue tax-exempt obligations from the
City, or that issues tax-exempt obligations on behalf of the City) will issue during
the calendar year in which the Series of Tax-Exempt Bonds is issued will not
exceed $10,000,000; and
(3) the amount of tax-exempt obligations, including the Series of Tax-Exempt Bonds,
designated by the City as "qualified tax-exempt obligations" for the purposes of
Section 265(b)(3) of the Code during the calendar year in which the Series ofTax-
Exempt Bonds is issued does not exceed $10,000,000.
Section 20. Official Statement: Continuing Disclosure.
(a) Preliminary Official Statement Deemed Final. The Designated Representative
shall review and, if acceptable to him or her, approve the preliminary Official Statement prepared
in connection with each sale of a Series to the public or through a Purchaser as placement agent.
For the sole purpose of the Purchaser's compliance with paragraph (b)(l) of Rule 15c2-12, if
applicable, the Designated Representative is authorized to deem that preliminary Official
Statement final as of its date, except for the omission of information permitted to be omitted by
Rule 15c2-12. The City authorizes and approves the distribution to potential purchasers of the
Bonds of a preliminary Official Statement that has been approved by the Designated
Representative and, if applicable, deemed final, in accordance with this subsection.
(b) Approval of Final Official Statement. The City approves the preparation of a final
Official Statement for each Series to be sold to the public or through a Purchaser as placement
agent, in the form of the preliminary Official Statement that has been approved and, if applicable,
deemed final, in accordance with subsection ( a) of this Section, with such modifications and
amendments as the Designated Representative deems necessary or desirable, and further
authorizes the Designated Representative to execute and deliver such final Official Statement to
the Purchaser. The City authorizes and approves the distribution to purchasers and potential
purchasers of the Bonds of that final Official Statement so executed and delivered.
(c) Undertaking to Provide Continuing Disclosure. If necessary to meet the
requirements of paragraph (b)(5) of Rule 15c2-12, as applicable to the Purchaser acting as a
participating underwriter for a Series, the Designated Representative is authorized to execute a
21
FG: 102363683.2
written undertaking to provide continuing disclosure for the benefit of holders of the Series in
substantially the form attached as Exhibit D to this ordinance, which is incorporated herein by this
reference.
Section 21. Amendat01y Ordinances.
(a) This ordinance shall not be modified or amended in any respect subsequent to the
initial issuance of the Bonds, except as provided in and in accordance with and subject to the
provisions of this Section.
(b) The City, from time to time, and at any time, without the consent of or notice to the
Registered Owners, may pass amendatory ordinances as follows:
(1) To cure any formal defect, omission, inconsistency, or ambiguity in this ordinance
in a manner not adverse to the registered owner of any Parity Bonds;
(2) To impose upon the Registrar (with its consent) for the benefit of the registered
owners of the Parity Bonds any additional rights, remedies, powers, authority,
security, liabilities, or duties that may lawfully be granted, conferred, or imposed
and that are not contrary to or inconsistent with this ordinance as theretofore in
effect;
(3) To add to the covenants and agreements of, and limitations and restrictions upon,
the City in this ordinance other covenants, agreements, limitations, and restrictions
to be observed by the City that are not contrary or inconsistent with this ordinance
as theretofore in effect;
(4) To confirm, as further assurance, any pledge under, and the subjection to any claim,
lien, or pledge created or to be created by, this ordinance of any other money,
securities, or funds;
(5) To authorize different denominations of the Bonds and to make correlative
amendments and modifications to this ordinance regarding exchangeability of
Bonds of different authorized denominations, redemptions of portions of Bonds of
particular authorized denominations, and similar amendments and modifications of
a technical nature;
(6) To modify, alter, amend, or supplement this ordinance in any other respect that is
not materially adverse to the registered owners of the Parity Bonds and which does
not involve a change described in subsection (c) of this Section; and
(7) Due to a change in federal law or rulings, to maintain the exclusion from gross
income of the interest on the Tax-Exempt Bonds from gross income for federal
income tax purposes.
( c) Except for any amendatory ordinance passed pursuant to subsection (b) of this
Section, subject to the terms and provisions contained in this subsection ( c) and not otherwise:
(1) Registered owners of a majority in aggregate principal amount of the Parity Bonds
then outstanding shall have the right from time to time to consent to the passage of
any amendatory ordinance deemed necessary or desirable by the City for the
purpose of modifying, altering, amending, supplementing, or rescinding, in any
22
FG: I 02363683 .2
particular, any of the terms or provisions contained in this ordinance. However,
consent by the registered owners of all the Bonds then outstanding is required for
any amendatory ordinance authorizing: (i) a change in the times, amounts, or
currency of payment of the principal of or interest on any outstanding Bond, or a
reduction in the principal amount or redemption price of any outstanding Bond or
a change in the redemption price of any outstanding Bond or a change in the method
of determining the rate of interest thereon; (ii) a preference or priority of any Bond
or Bonds or any other Bond or Bonds; or (iii) a reduction in the aggregate principal
amount of Bonds.
(2) Any amendatory ordinance passed for any of the purposes of this subsection (c)
shall not become effective except in accordance with this paragraph ( c )(2). Upon
passage of any such amendatory ordinance, the City shall cause notice of the
proposed ordinance to be given by first class United States mail to the registered
owners of the Parity Bonds then outstanding and to each Rating Agency. The notice
shall briefly describe the proposed ordinance and shall state that a copy is available
from the Finance Director for inspection. The amendatory ordinance shall become
effective in substantially the form described in the notice only if within two years
after mailing of such notice, the City has received (i) the required consents, in
writing, of the registered owners of the Parity Bonds ( or of the Bonds, as applicable)
and (ii) an opinion of Bond Counsel stating that such amendatory ordinance is
permitted by this ordinance; that upon the effective date thereof, it will be valid and
binding upon the City in accordance with its terms; and that its passage will not
adversely affect the exclusion from gross income for federal income tax purposes
of interest on the Tax-Exempt Bonds.
(3) If registered owners of not less than the percentage of Parity Bonds ( or Bonds, as
applicable) required by this subsection ( c) have consented, no owner of the Parity
Bonds shall have any right to object to the passage of the ordinance ( or to any of
the terms and provisions contained therein or the operation thereof), or in any
manner to question the propriety of the passage thereof, or to enjoin or restrain the
City from passing, or from taking any action pursuant to, the same.
( d) The Registered Owner of each Bond, by taking and holding the Bond, shall be
deemed to have consented to the passage by the City of any amendatory ordinance to establish a
separate Reserve Requirement for any or all of the 2020 Bonds, the Refunding Bonds, the Bonds,
or any Future Parity Bonds, which may be zero, and to establish one or more separate reserve
subaccounts for any or all of the 2020 Bonds, the Refunding Bonds, the Bonds, or any Future
Parity Bonds.
( e) Registered owners of the Parity Bonds may be deemed to have notice of and have
consented to the passage of any amendatory ordinance so long as (1) the Parity Bond Authorizing
Ordinance includes the nature of the proposed amendatory ordinance and states that registered
owners of the Parity Bonds will be deemed to have consented to its passage and (2) the preliminary
official statement, if any, and official statement, if any, for the Parity Bonds includes the nature of
the proposed amendatory ordinance and states that registered owners of the Parity Bonds will be
deemed to have consented to its passage.
23
FG: 102363683 .2
(f) An underwriter of Parity Bonds, either in its capacity as an underwriter or
remarketing agent, or as agent for or in lieu of registered owners of the Parity Bonds , may consent
to the passage of an amendatory ordinance .
(g) Upon the effective date of any amendatory ordinance passed pursuant to the
provisions of this Section, this ordinance shall be amended in accordance therewith, and the
respective rights, duties, and obligations under this ordinance of the City, the Registrar, and all
Registered Owners of Bonds then outstanding shall thereafter be determined, exercised, and
enforced under this ordinance subject in all respects to such amendments.
ection 22. Amendment of Ord i nance No. 4309. Paragraph (ii) of Exhibit A of
Ordinance No. 4309 is hereby amended to read as follows (deleted language is struck thrnugh and
added language is doub le und er l.in ed):
Each Bond shall be dated the Issue Date, which date may not be
one year after the effective date of this ordinance ~~d~in-~~=-f=E=.===
Section 23. General Authorization and Ratification. The Designated Representative
and other appropriate officers of the City are each individually authorized to take such actions and
to execute such documents as in their judgment may be necessary or desirable to carry out the
transactions contemplated in connection with this ordinance, and to do everything necessary for
the prompt delivery of each Series to the Purchaser and for the proper application, use, and
investment of the proceeds of the Bonds. All actions taken prior to the effective date of this
ordinance in furtherance of the purposes described in this ordinance and not inconsistent with the
terms of this ordinance are ratified and confirmed in all respects.
Section 24 . Severability. The provisions of this ordinance are declared to be separate
and severable. If a court of competent jurisdiction, all appeals having been exhausted or all appeal
periods having run, finds any provision of this ordinance to be invalid or unenforceable as to any
person or circumstance, such offending provision shall, if feasible, be deemed to be modified to
be within the limits of enforceability or validity. However, if the offending provision cannot be so
modified, it shall be null and void with respect to the particular person or circumstance, and all
other provisions of this ordinance in all other respects , and the offending provision with respect to
all other persons and all other circumstances, shall remain valid and enforceable.
24
FG : 102363683.2
Section 25. Effective Date of Ordinance. This ordinance shall take effect and be in
force from and after its passage and five days following its publication as required by law and is
not subject to referendum.
PASSED by the City Council and APPROVED by the Mayor of the City of Edmonds,
Washington, at an open public meeting thereof, this 28"' ~~ _
~
Mayor
Ci
APPROVED AS TO FORM:
~r~ ~ P.c,
FOSTER GARVEY P.C.
Bond Counsel
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
FG: 102363683.2
May 22 , 2024
May 28, 2024
May 31, 2024
June 02, 2024
25
Exhibit A
PARAMETERS FOR FINAL TERMS OF THE BONDS
(i) Principal Amount.
(ii) Date or Dates.
(iii) Denominations, Name.
(iv) Interest Rates.
(v) Payment Dates.
(vi) Final Maturity.
(vii) Redemption Rights.
FG: 102363683 .2
The Bonds may be issued in one or more Series and shall not
exceed the aggregate principal amount of $13,000,000.
Each Bond shall be dated the Issue Date, which date may not
be later than one year after the effective date of this
ordinance.
The Bonds shall be issued in Authorized Denominations and
shall be numbered separately in the manner and shall bear
any name and additional designation as deemed necessary or
appropriate by the Designated Representative.
Each Bond shall bear interest at a fixed rate per annum
( computed on the basis of a 3 60-day year of twelve 3 0-day
months) from the Issue Date or from the most recent date for
which interest has been paid or duly provided for, whichever
is later. One or more rates of interest may be fixed for the
Bonds. No rate of interest for any Bond may exceed 5.50%,
and the true interest cost to the City for each Series may not
exceed 5.25%.
Interest shall be payable semiannually on dates acceptable to
the Designated Representative, commencing no later than
one year following the Issue Date. Principal payments shall
commence on a date acceptable to the Designated
Representative and shall be payable at maturity or in
mandatory redemption installments on dates acceptable to
the Designated Representative.
Each Series shall mature no later than 21 years after the Issue
Date.
The Designated Representative may approve in the Bond
Purchase Contract provisions for the optional and mandatory
redemption of Bonds, subject to the following:
(1) Optional Redemption. Any Bond may be designated
as being (A) subject to redemption at the option of
the City prior to its maturity date on the dates and at
the prices set forth in the Bond Purchase Contract; or
(B) not subject to redemption prior to its maturity
date. If a Bond is subject to optional redemption prior
to its maturity, it must be first subject to such
A-1
(viii) Price.
(ix) Other Terms.
FG: 102363683.2
Exhibit A
redemption on a date that is not more than 10½ years
after the Issue Date.
(2) Mandatory Redemption. Any Bond may be
designated as a Term Bond, subject to mandatory
redemption prior to its maturity on the dates and in
the amounts set forth in the Bond Purchase Contract.
The purchase price for each Series may not be less than 95%
or more than 135% of the stated principal amount of the
Series.
The Designated Representative may determine the
following:
(1) Tax Status. Any or all of the Bonds may be
designated as Tax-Exempt Bonds.
(2) Credit Enhancement. If determined to be in the best
interest of the City, bond insurance or other credit
enhancement may be provided for any or all of the
Bonds, and the Designated Representative may
accept such additional terms, conditions, and
covenants determined to be in the best interest of the
City, consistent with this ordinance.
A-2
Exhibit B
PARITY CONDITIONS FOR ISSUANCE OF FUTURE PARITY BONDS
The City may issue Future Parity Bonds the payment of the principal of and interest on
which is secured by a lien and charge on Net Revenue and ULID Assessments on a parity with the
lien and charge on Net Revenue and ULID Assessments that secure payment of the principal of
and interest on the Bonds if and only if the following conditions are met and complied with at the
time of issuance of the Future Parity Bonds:
(a) There may not be any deficiency in the Principal and Interest Account or the
Reserve Account of the Bond Fund.
(b) The Future Parity Bond Authorizing Ordinance must require that all ULID
Assessments levied in connection with the Future Parity Bonds be paid directly into the Bond
Fund.
( c) The Future Parity Bond Authorizing Ordinance must provide for the payment of
the principal thereof and interest thereon out of the Bond Fund.
( d) The Future Parity Bond Authorizing Ordinance must provide for the deposit into
the Reserve Account of amounts, if any, necessary to comply with the Reserve Requirement and
Section 11.
(e) The City must have on file either :
(1) A certificate from an Independent Utility Consultant showing that, in his or her
professional opinion, the annual Net Revenue available for debt service on the Parity
Bonds then outstanding and the Future Parity Bonds proposed to be issued shall, for
each year, be at least equal to the Coverage Requirement. In making such
certification, the Net Revenue for any 12 consecutive calendar months out of the
immediately preceding 24 consecutive months shall be used, and the following
adjustments may be made to the historical Net Revenue:
(i) Any rate change that has taken place or been approved , may be reflected;
(ii) Revenue may be added from customers actually added to the Water and Sewer
Utility subsequent to the 12-month period;
(iii) Revenue may be added from customers to be served by the improvements being
constructed out of the proceeds of the Future Parity Bonds to be issued;
(iv) A full year's revenue may be included from any customer being served , but
who has not been receiving service for the full 12-month period; and
(v) Actual or reasonably anticipated changes to the Operating and Maintenance
Expenses subsequent to the 12-month period shall be added or deducted, as
applicable; or
B-1
FG : 102363683 .2
Exhibit B
(2) A certificate of the Finance Director showing that, in his or her professional opinion,
the annual Net Revenue available for debt service on the Parity Bonds then
outstanding and the Future Parity Bonds proposed to be issued shall , for each year,
be at least equal to the Coverage Requirement. In making such certification, the
Finance Director shall assume that (A) the proposed Future Parity Bonds will remain
outstanding to their scheduled maturities and (B) any Parity Bonds to be refunded by
the Future Parity Bonds are not outstanding. The Finance Director shall not make
any of the adjustments referred to above.
However, if the Future Parity Bonds are being issued for the sole purpose of refunding
Parity Bonds then outstanding (including paying costs of issuance and providing for the
Reserve Requirement), no coverage certification is required if, as result of the issuance of
those Future Parity Bonds, (a) in each year that the Future Parity Bonds are scheduled to
remain outstanding, the Annual Debt Service on the Future Parity Bonds to be issued is not
increased by more than $5,000 over the Annual Debt Service for that year of the Parity
Bonds being refunded, and (b) the final maturity of the Future Parity Bonds to be issued is
not more than one year after the Parity Bonds being refunded. In addition, no coverage
certification is required if the aggregate principal amount of the Future Parity Bonds being
issued does not exceed the aggregate amount of ULID Assessments levied in connection
with the issuance of the Future Parity Bonds by more than $5,000 plus any amount of the
proceeds of such Future Parity Bonds deposited into the Reserve Account.
B-2
FG: 102363683 .2
Exhibit C
DESCRIPTION OF PLAN OF ADDITIONS
The planned additions and betterments to the Water and Sewer Utility consist of those set forth in
the City's Capital Improvement Program, as it may be amended from time to time by the City
Council (the "CIP"). A summary of the improvements expected to be financed, in whole or in part,
with proceeds of the Bonds is as follows:
Storm water
• Phase 4, 5, 6, and 7 Annual Stormwater replacement and rehabilitation projects for repair
and replacement of stormwater pipe and related appurtenances due to age and undesirable
pipe material and a need to improve conveyance.
• Stormwater Fund Contribution to Transportation Projects that include storm drainage
infrastructure replacement and rehabilitation.
Water
• Yost and Seaview Reservoir Repairs and Upgrades for needed maintenance and structural
upgrades to the 1.5 Million Gallon underground drinking water reservoir located in Yost
Park and the 1.5 Million Gallon underground drinking water reservoir located in the
Sea view Neighborhood.
• Phase 14, 15, 16, and 17 Annual Water Main replacement projects for repair and
replacement of water mains and related appurtenances due to age and undesirable pipe
material and a need to improve flows.
• Water Fund Contribution to Transportation Projects that include water infrastructure for
replacement and rehabilitation.
C-1
FG: 102363683.2
Form of
UNDERTAKING TO PROVIDE CONTINUING DISCLOSURE
City of Edmonds, Washington
Water and Sewer Revenue Bonds, [Series]
Exhibit D
The City of Edmonds, Washington (the "City"), makes the following written Undertaking
for the benefit of the holders of the above-referenced bonds (the "Bonds"), for the sole purpose of
assisting the Purchaser in meeting the requirements of paragraph (b)(5) of Rule 15c2-12, as
applicable to a participating underwriter for the Bonds. Capitalized terms used but not defined
below shall have the meanings given in Ordinance No. 4358 of the City.
(a) Undertaking to Provide Annual Financial Information and Notice of Listed
Events. The City undertakes to provide or cause to be provided, either directly or through a
designated agent, to the MSRB, in an electronic format as prescribed by the MSRB, accompanied
by identifying information as prescribed by the MSRB:
FG: 102363683.2
(i) Annual financial information and operating data of the type included in the
final official statement for the Bonds, as described in paragraph (b )(i)
("annual financial information");
(ii) Timely notice (not in excess of 10 business days after the occurrence of the
event) of the occurrence of any of the following events with respect to the
Bonds: (1) principal and interest payment delinquencies; (2) non-payment
related defaults, if material; (3) unscheduled draws on debt service reserves
reflecting financial difficulties; ( 4) unscheduled draws on credit
enhancements reflecting financial difficulties; (5) substitution of credit or
liquidity providers, or their failure to perform; (6) adverse tax opinions, the
issuance by the Internal Revenue Service of proposed or final
determinations of taxability, Notice of Proposed Issue (IRS Form 5701 -
TEB) or other material notices or determinations with respect to the tax
status of the Bonds, or other material events affecting the tax status of the
Bonds; (7) modifications to rights of holders of the Bonds, if material;
(8) bond calls (other than scheduled mandatory redemptions of Term
Bonds), if material, and tender offers; (9) defeasances; (10) release,
substitution, or sale of property securing repayment of the Bonds, if
material; (11) rating changes; (12) bankruptcy, insolvency, receivership, or
similar event of the City, as such "bankruptcy events" are defined in
Rule 15c2-12; (13) the consummation of a merger, consolidation, or
acquisition involving the City or the sale of all or substantially all of the
assets of the City other than in the ordinary course of business, the entry
into a definitive agreement to undertake such an action or the termination
of a definitive agreement relating to any such actions, other than pursuant
to its terms, if material; ( 14) appointment of a successor or additional trustee
or the change of name of a trustee, if material, ( 15) incurrence of a financial
obligation of the City or obligated person, if material, or agreement to
D-1
Exhibit D
covenants, events of default, remedies, priority rights, or other similar terms
of a financial obligation of the City or obligated person, any of which affect
security holders, if material; and (16) default, event of acceleration,
termination event, modification of terms, or other similar events under the
terms of the financial obligation of the City or obligated person, any of
which reflect financial difficulties. The term "financial obligation" means a
(A) debt obligation; (B) derivative instrument entered into in connection
with, or pledged as security or a source of payment for, an existing or
planned debt obligation; or (C) guarantee of (A) or (B). The term "financial
obligation" shall not include municipal securities as to which a final official
statement has been provided to the MSRB consistent with Rule 15c2-12.
(iii) Timely notice of a failure by the City to provide the required annual
financial information described in paragraph (b )(i) on or before the date
specified in paragraph (b )(ii).
(b) Type of Annual Financial Information Undertaken to be Provided. The annual
financial information that the City undertakes to provide in paragraph (a):
(i) Shall consist of (1) annual financial statements prepared (except as noted in
the financial statements) in accordance with generally accepted accounting
principles applicable to local governmental units of the State such as the
City, as such principles may be changed from time to time; (2) annual
operating statistics for each of the component utility systems, as follows:
number of customer accounts, a statement of gross and net revenues, total
annual water consumption, and average daily water consumption;
(3) monthly or bi-monthly rates and charges for each of the component
utility systems; and (4) a statement of the coverage ratio for the fiscal year;
(ii) Shall be provided not later than the last day of the ninth month after the end
of each fiscal year of the City (currently, a fiscal year ending December 31 ),
as such fiscal year may be changed as required or permitted by State law,
commencing with the City's fiscal year ending December 31, __ ; and
(iii) May be provided in a single or multiple documents, and may be
incorporated by specific reference to documents available to the public on
the Internet website of the MSRB or filed with the SEC.
If not submitted as part of the annual financial information described in paragraph (b )(i)
above, the City will provide or cause to be provided to the MSRB audited financial statements,
when and if available.
(c) Amendment of Undertaking. This Undertaking is subject to amendment after the
primary offering of the Bonds without the consent of any holder of any Bond, or of any broker,
dealer, municipal securities dealer, participating underwriter, rating agency or the MSRB, under
the circumstances and in the manner permitted by Rule 15c2-12. The City will give notice to the
MSRB of the substance (or provide a copy) of any amendment to the Undertaking and a brief
D-2
FG : I 02363683.2
Exhibit D
statement of the reasons for the amendment. If the amendment changes the type of annual financial
information to be provided, the annual financial information containing the amended financial
information will include a narrative explanation of the effect of that change on the type of
information to be provided.
(d) Beneficiaries. This Undertaking shall inure to the benefit of the City and the holder
of each Bond, and shall not inure to the benefit of or create any rights in any other person.
(e) Termination of Undertaking. The City's obligations under this Undertaking shall
terminate upon the legal defeasance of all of the Bonds. In addition, the City's obligations under
this Undertaking shall terminate if those provisions of Rule 15c2-12 which require the City to
comply with this Undertaking become legally inapplicable in respect of the Bonds for any reason,
as confirmed by an opinion of Bond Counsel delivered to the City, and the City provides timely
notice of such termination to the MSRB.
(f) Remedy for Failure to Comply with Undertaking. As soon as practicable after the
City learns of any failure to comply with the Undertaking, the City will proceed with due diligence
to cause such noncompliance to be corrected. No failure by the City or other obligated person to
comply with the Undertaking shall constitute a default in respect of the Bonds. The sole remedy
of any holder of a Bond shall be to take action to compel the City or other obligated person to
comply with this Undertaking, including seeking an order of specific performance from an
appropriate court.
(g) Designation of Official Responsible to Administer Undertaking. The Finance
Director of the City or his or her designee is authorized to take such further actions as may be
necessary, appropriate or convenient to carry out this Undertaking in accordance with
Rule 15c2-12, including the following actions:
FG: 102363683.2
(i) Preparing and filing the annual financial information undertaken to be
provided;
(ii) Determining whether any event specified in paragraph (a) has occurred,
assessing its materiality, where necessary, with respect to the Bonds, and
preparing and disseminating any required notice of its occurrence;
(iii) Determining whether any person other than the City is an "obligated
person" within the meaning of Rule l 5c2-12 with respect to the Bonds, and
obtaining from such person an undertaking to provide any annual financial
information and notice of listed events for that person in accordance with
Rule 15c2-12;
(iv) Selecting, engaging and compensating designated agents and consultants,
including but not limited to municipal advisors and legal counsel, to assist
and advise the City in carrying out the Undertaking; and
(v) Effecting any necessary amendment of the Undertaking.
D-3
CERTIFICATION
I, the undersigned, City Clerk of the City of Edmonds, Washington (the "City"), hereby
certify as follows:
1. The attached copy of Ordinance No. 4358 (the "Ordinance") is a full, true and
correct copy of an ordinance duly passed at a regular meeting of the City Council of the City held
at the regular meeting place thereof on May 28, 2024, as that ordinance appears on the minute
book of the City;
2. The Ordinance will be in full force and effect five days after publication in the
City's official newspaper, which publication date is expected to be May 31, 2024; and
3. A quorum of the members of the City Council was present throughout the meeting
and a majority of its members voted in the proper manner for the passage of the Ordinance.
Dated: ~ 11\..Q.. 3 , 2024.
CITY OF EDMONDS, WASHINGTON
FG: 102363683 .2
• •
Everett Daily Herald
Affidavit of Publication
State of Washington }
County of Snohomish } ss
Michael Gates being first duly sworn, upon
oath deposes and says: that he/she is the legal
representative of the Everett Daily Herald a
daily newspaper. The said newspaper is a legal
newspaper by order of the superior court in the
county in which it is published and is now and
has been for more than six months prior to the
date of the first publication of the Notice
hereinafter referred to, published in the English
language continually as a daily newspaper in
Snohomish County, Washington and is and
always has been printed in whole or part in the
Everett Daily Herald and is of general
circulation in said County, and is a legal
newspaper, in accordance with the Chapter 99
of the Laws of 1921, as amended by Chapter
213, Laws of 1941, and approved as a legal
newspaper by order of the Superior Court of
Snohomish County, State of Washington, by
order dated June 16, 1941, and that the annexed
is a true copy of EDH997029 ORD 4357-4358 as
it was published in the regular and entire issue
of said paper and not as a supplement form
thereof for a period of I issue(s), such
publication commencing on 05/31/2024 and
ending on 05/31/2024 and that said newspaper
was regularly distributed to its subscribers
during all of said period.
The amo
$55.04.
of the fee for such publication is
Subscribed and sworn before me on this
dayof ~---
Notary Public in and for the State of
Washington .
City or Edmonds· LEGAL ADS I 14101416
NICHOLAS FALK
.....
Classified Proof
~RQINflllCE SUMMARY or lh~ ily odmondt, waslilngloo
On the 28th Cay of May, 2024 , the C~y Council or the Clly or
Eamonas. passed !he lollowing Ot'll lnonces. lhe summary of said
ordinanoe.s conslsling of lille are provided as follows .
ORDINANCE NO. •357
AN ORDINANCE OF THE CITY OF EDMONDS. WASHINGTON.
CHANGING THE REGULAR MEETING CATE OF CITY COUNCIL
COMMITTEE MEETINGS
ORDINANCE N~. 4358
AN ORDINANCE OF THE CITY OFOMONOS, WASHINGTON ,
RELATING TO THE COMBINED WATER ANO SEWERAGE
SYSTEMS COMPRISING TI-IE WATERWORKS UTILITY OF THE
CITY; SPECIFYING, ADOPTING, ANO OROERING1HE
CARRYING OUT OF A SYSTEM OR PLAN OF AODiTIONS TO
ANO BETTERMENTS ANO EXTENSIONS OF THE COMBINED
WAT ERWORKS UTILITY; PROVIDING FOR,HE [S~UANCE OF
ONE OR MORE SERIES OF WA.TERANO SEWER REVENUE
BONDS FOR THE PURPOSE OF PRO\/IOING TH E FVNDS
NECESSARY : (1) TO PAY ALL OR A PORTION OF THE COSTS
OF CARR Yi NG OUT TliAT PLAN OF AODrnONs, (2) TO MAKE
A OE.POSIT INTO THE OEST SERVICE RESERVE ACCOUNT,
AND (3 ) TO PAY THE COSTS OF ISSUANCE AND SALE OF
TI-IE BONDS: FIXI NG OR SETTING PARAMETERS WITH
RESPECT TO CERTAIN TERMS AND COVEN ANTS OF THE
BONDS; APPOINTING THE CITY 'S DESIGNATED
REPRESENTATIVE TO APPROVE' THE FINAL iERMS OF THE
SALE OF THE BONDS; AMENDING ORDINANCE NO ~309 ;
AND PROVIDING FOR OTHER RELATED MATTERS.
gM.,EgLr~i.s~~N'r°tf ;Mo24.
Published; May 31, 2024. EDH997029
Proofed by Pospical, Randie, 05/31/2024 11 :00:02 am Page:2