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Ordinance 1314CITY OF EDMONDS , WASHINGTON ORDINANCE NO. 5 AN ORDINANCE specifying and adopting a system or plan of additions to and betterments and extensions of the waterworks utility of the City of Edmonds, Washington, including the sewerage system as a part thereof; declar- ing the estimated cost as nearly as may be; providing for the issuance of $400 , 000. 00 par value of "Water and Sewer Revenue Bonds, 1967, " of the City to obtain the funds with which to pay the cost of (a) carrying out such system or plan of additions to and betterments and exten- sions of the waterworks utility of the City, including the system of sewerage as a part thereof, (b) completing the system or plan of additions to and betterments and exten- sions of the waterworks utility of the City, including the system of sewerage as a part thereof, specified and adopted by Ordinance No. 1194, passed April 5, 1966, and (c) reimbursing the Water and Sewer Department Operating and Maintenance Funds for a temporary loan as the City's participation in the construction of a lift station in Local Improvement District No. 138; fixing the date, form, maturities, interest rates, terms and coven- ants of such bonds; and providing for the sale of such bonds to Foster & Marshall Inc. of Seattle, Washington. WHEREAS, the City of Edmonds, Washington, by Ordinance No. 635, passed June 17, 1953, specified and adopted a system or plan of additions to and betterments and extensions of the waterworks system of the City of Edmonds, including additions to and betterments and extensions of the system of sewerage of the City; provided that the existing system of sewerage, includ- ing all additions , betterments and extensions thereto should become a part of the waterworks utility of the City; provided for the issuance of not to exceed $ 275 , 000.00 par value of "Water and Sewer Revenue Bonds, 1953 , " in one or more series to provide the funds required to pay the cost thereof; and provided for the issuance and sale of $135 , 000.00 par value of bonds as "Series A" for the purpose of obtaining funds to carry out a portion of said system or plan of additions to and betterments and extensions of the sewerage system of the City, which would become a part of the waterworks utility of the City; and WHEREAS, pursuant to Ordinance No. 695, passed April 16, 1957, an additional $140 , 000.00 par value of said total authorized issue of "Water & Sewer Revenue Bonds, 1953 , " was issued as "Series B"; and WHEREAS, the City of Edmonds, Washington, by Ordinance No. 773, passed July 7, 1959, specified and adopted a system or plan of additions to and betterments and extensions of the waterworks utility of the City, includ- ing the sewerage system as a part thereof, and issued and sold $240,000.00 par value of "Water and Sewer Revenue Bonds, 1959 ," to obtain the funds with which to pay the cost thereof, the lien and charge upon the gross rev- enues from the combined water and sewer systems comprising the waterworks utility of the City for such bonds and any parity bonds thereafter issued being junior and inferior to the prior lien and charge upon such gross revenues for the then outstanding "City of Edmonds Water Revenue Bonds, 1949, " (all of which bonds have now been retired) , "Water and Sewer Revenue Bonds, 1953, Series A," and "Water and Sewer Revenue Bonds, 1953, Series B"; and WHEREAS, by Section 13 of said Ordinance No. 773, the City of Edmonds reserved the right to issue additional and/or refunding water and sewer revenue bonds which would constitute a lien and charge upon the gross revenues of the waterworks utility, including the sewerage system as a part thereof and includ- ing all additions thereto and betterments, replacements and extensions thereof at any time made, on a parity with said "Water and Sewer Revenue Bonds, 1959, " if the following conditions should be met and complied with at the time of the issuance of such additional and/or refunding water and sewer rev- enue bonds, to -wit: "1. No deficiency exists in the respective bond redemption funds for the payment of the outstanding 'City of Edmonds Water Revenue Bonds, 1949, ' 'Water and Sewer Revenue Bonds, 1953, Series A,' and 'Water and Sewer Revenue Bonds, 1953, Series B.' " 2. All payments then required by this Ordinance and any ordinance hereafter enacted pertaining to any bonds hereafter issued, in accordance with the provisions of this Section, on a parity of lien with the Bonds shall have been made into the Bond Fund and maintained intact therein. "3. The ordinance authorizing the issuance of such additional bonds shall provide that an amount equal to the average annual debt ser- vice of the additional bonds proposed to be issued shall be accumulated as a reserve in the Bond Fund, said amount to be accumulated by monthly deposits commencing not later than one month after the date of issuance of such additional bonds and to be accumulated within five years after the date of issuance and said reserve to be maintained in such amounts so long as any of said additional bonds are outstanding to the last maturity thereof, provided, however, that in the case of refunding bonds the ordin- ance authorizing the issuance of such refunding bond shall provide that the money in the 'Reserve Account' in the Bond Fund for the bonds to be refunded shall be retained in the Bond Fund as a reserve for the refunding bonds or the money in any other reserve account or fund for the bonds be- ing refunded shall be transferred to said 'Reserve Account' in the Bond Fund, but if such amount does not equal the said average annual debt ser- vice requirements, such required reserve for the refunding bonds shall be accumulated in the same manner and within the same time as set forth herein for additional revenue bonds. -2- "4. There shall be on file with the City Clerk a certificate of a professional engineer experienced in municipal utilities and licensed to practice in the State of Washington to the effect that the gross rev- enues of the waterworks utility, including the sewerage system as a part thereof, for any twelve consecutive calendar months out of the im- mediately preceding twenty-four consecutive calendar months, plus the additional revenues anticipated to be received from the proposed im- provement in connection with which such additional water and sewer revenue bonds are to be issued, together with the increase in revenues reasonably anticipated to result from any change in the schedule of water and/or sanitary sewage disposal rates to be put into effect prior to the issuance of such additional bonds and after giving effect to any probable future increase or decrease in the costs of maintenance and operation of the waterworks utility, including the sewerage system as a part thereof, and to any probable future increase or decrease in gross revenues resulting from growth or shrinkage in the number of water and/ or sanitary sewerage service users, are deemed sufficient after the pay- ment of normal operation and maintenance expenses, but before depreci- ation, to equal at least 1.5 times the average annual principal and in- terest requirements up to and including the final maturity date of all then outstanding water revenue bonds and/or water and sewer revenue bonds, including the Bonds, and of the additional and/or refunding bonds pro- posed to be so issued up to the final maturity date thereof, provided, however, that if such additional bonds proposed to be so issued are for the sole purpose of refunding outstanding water revenue bonds and/or water and sewer revenue bonds, such certification of coverage shall not be required if the amount required for the payment of the principal and interest in each year for the refunding bonds is not increased over the amount required for the bonds to be refunded thereby and the matur- ities of said refunding bonds are not extended beyond the maturities of the bonds to be refunded thereby"; and WHEREAS, the City by Ordinance No. 814, passed May 3, 1960, specified and adopted a system or plan of additions to and betterments and extensions of the waterworks utility of the City, including the sewerage system as a part thereof, and issued and sold $150 , 000.00 par value of "Water and Sewer Revenue Bonds, 1960 , " to obtain the funds with which to pay the cost thereof, said bonds having been issued on a parity of lien with the outstanding "Water and Sewer Revenue Bonds, 1959," pursuant to the provisions of Section 13 of Ordinance No. 773; and WHEREAS, the City, by Ordinance No. 909, passed November 21, 1961, specified and adopted a system or plan of additions to and betterments and ex- tensions of the waterworks utility of the City, including the sewerage system as a part thereof, and provided for the issuance and sale of $100 , 000.00 par value of "Water and Sewer Revenue Bonds, 1961 , " to obtain the funds with which to pay the cost thereof, said bonds having been issued on a parity of lien with the outstanding "Water and Sewer Revenue Bonds, 1959 ," and the outstanding "Water and Sewer Revenue Bonds, 1960," pursuant to the provisions of Section 13 of Ordinance No. 773; and -3- WHEREAS, pursuant to Ordinance No. 1042, passed March 3, 1964, the City issued and sold $ 215, 000.00 par value of "Water and Sewer Refunding Revenue Bonds, 1964, " to obtain the funds with which to pay, retire and can- cel on July 1, 1964, all of the outstanding "Water and Sewer Revenue Bonds, Series A," and on May 1, 1964, all of the outstanding "Water and Sewer Rev- enue Bonds, 1953, Series B," all of which bonds were called, paid and retired on said respective call dates and which "Water and Sewer Refunding Revenue Bonds, 1964, " were issued on a parity of lien with the outstanding "Water and Sewer Revenue Bonds, 1959, " the outstanding "Water and Sewer Revenue Bonds, 1960 , " and outstanding "Water and Sewer Revenue Bonds, 1961 , " in accordance with the provisions of Section 13 of Ordinance No. 773; and WHEREAS, pursuant to Ordinance No. 1141, passed September 21, 1965, the City issued and sold $125 , 000.00 par value of "Water and Sewer Revenue Bonds, 1965, " to obtain the funds with which to pay the cost of carrying out a system or plan of additions to and betterments and extensions of the waterworks utility of the City, including the sewerage system as a part thereof, specified by said Ordinance No. 1141, and wh ich "Water and Sewer Revenue Bonds, 1965, " were issued on a parity of lien with the outstanding "Water and Sewer Revenue Bonds, 1959, " the outstanding "Water and Sewer Revenue Bonds, 1960, " the outstanding "Water and Sewer Revenue Bonds, 1961 , " and the outstanding "Water and Sewer Refunding Revenue Bonds, 1964, " in accordance with the provisions of Section 13 of Ordinance No. 773; and WHEREAS, pursuant to Ordinance No. 1207, passed May 17, 1966, the City issued and sold $1 , 000 , 000. 00 par value of "Water and Sewer Revenue Bonds, 1966, " to obtain the funds with which to pay the cost of carrying out a system or plan of additions to and betterments and extensions of the waterworks utility of the City, including the sewerage system as a part thereof, specified and adopted by Ordinance No. 1194, which "Water and Sewer Revenue Bonds, 1966, " were issued on a parity of lien with the outstanding "Water and Sewer Revenue Bonds, 1959," the outstanding "Water and Sewer Revenue Bonds, 1960," the outstanding "Water and Sewer Revenue Bonds, 1961 , " the outstanding "Water and Sewer Refunding Revenue Bonds. 1964, " and the outstanding "Water and Sewer Revenue Bonds, 1965 ," in accordance with the provisions of Section 13 of me Ordinance No. 773; and WHEREAS, due to unforeseen circumstances, the proceeds from the sale of said "Water and Sewer Revenue Bonds, 1966 ," were insufficient to complete the expansion and modification of the sewage treatment plant of the City and to complete the construction of the water and sewer utility building set forth in the system or plan of additions to and betterments and extensions of the waterworks utility of the City, including the sewerage system as a part thereof, as specified and adopted in Ordinance No. 1194, the estimated cost of the completion of such facilities being $130 , 000.00; and WHEREAS, pursuant to the provisions of Ordinance No, r t 72 passed ,)augakv 1W,ordering the improvement and creating i and establishing Local Improvement District No. 138 of the City, the City participated in the construction of a sewage lift station under such improve- ment to the extent of $ 20, 000.00 by way of a temporary loan from the Water and Sewer Department Operating and Maintenance Funds and such funds should be reimbursed by such amount; and WHEREAS, the City Council hereby finds and declares that the public health and welfare require and it is in the best interests of the inhabitants of the City that twelve sewage pump lift stations of the City be telemetered, that certain storm sewer improvements be undertaken in certain areas of the City and that certain water storage and water supply and transmission mains be installed to serve certain areas within the City; and WHEREAS, to provide the funds necessary to accomplish the foregoing purpose, the City intends to issue $400 , 000.00 par value of water and sewer revenue bonds on a parity of lien with the outstanding "Water and Sewer Revenue Bonds, 1959 , " the outstanding "Water and Sewer Revenue Bonds, 196 0 , " the outstanding "Water and Sewer Revenue Bonds, 1961 , " the outstanding "Water and Sewer Refunding Revenue Bonds, 1964, " the outstanding "Water and Sewer Revenue Bonds, 1965, " and the outstanding "Water and Sewer Revenue Bonds, 1966, " all of which were issued on a parity of lien with each other pursuant to the provisions of Section 13 of Ordinance No. 773, and -5- WHEREAS, the City Council hereby finds and declares that all "City of Edmonds Water Revenue Bonds, 1949, " "Water and Sewer Revenue Bonds, 1953, Series A," and "Water and Sewer Revenue Bonds, 1953, Series B," have been paid and retired; that all payments required to be made into the "Water and Sewer Revenue Bond Redemption Fund, 1959," created by Ordin- ance No. 773 for the payment of the outstanding "Water and Sewer Revenue Bonds, 1959," and all subsequently issued water and sewer revenue bonds on a parity therewith have been made into such fund and maintained intact therein; that provision is hereinafter made for the accumulation in the "Reserve Account" in the "Water and Sewer Revenue Bond Redemption Fund, 1959," of an amount equal to the average annual debt service requirements for the ad- ditional $400 , 000.00 par value of water and sewer revenue bonds proposed to be issued within the time required; and that James H. Reid, a professional engineer experienced in municipal utilities and licensed to practice in the State of Washington has certified that the revenues of the waterworks utility of the City, including the sewerage system as a part thereof, to be considered under subparagraph 4 of Section 13 of Ordinance No. 773, are sufficient to meet the 1 .5 coverage requirement therein specified as evidenced by his certifi- cate to such effect on file with the City Clerk; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DO ORDAIN as follows: Section 1. The following words as used in this ordinance shall have the following meanings: a. "City" shall mean the City of Edmonds, Washington. b . "Bonds" shall mean the "Water and Sewer Revenue Bonds, 1967, " the issuance of which is provided for in this ordinance. c. "1959 Bonds" shall mean the City's "Water and Sewer Rev- enue Bonds, 1959," issued pursuant to Ordinance No. 773 of the City. d. "Parity Bonds" shall mean the outstanding "Water and Sewer Revenue Bonds, 196 0, " the outstanding "Water and Sewer Revenue Bonds, 1961 , " the outstanding "Water and Sewer Refunding Revenue Bonds, 1964, " the outstanding "Water and Sewer Revenue Bonds, 1965, " and the outstanding "Water and Sewer Revenue Bonds, 1966, " hereto- fore issued on a parity of lien with the outstanding 1959 Bonds and any subsequently issued bonds under the conditions and pursuant to the re- quirements provided in Section 13 of Ordinance No. 773 of the City. e . "Waterworks utility of the City" _shall mean the combined sanitary sewerage system and waterworks system of the City, together with all additions thereto or betterments thereof at any time made or constructed. f. "Bond Fund" shall mean the special fund of the City created by Ordinance No. 773 and known as the "Water and Sewer Bond Re- demption Fund, 1959," for the payment of the 1959 Bonds and any Parity Bonds, including the Bonds. Section 2. The City of Edmonds hereby specifies and adopts a system or plan for making additions to or betterments and extensions of the waterworks utility of the City consisting of the following: a . Twelve sewage pump lift stations of the City shall be tele- metered by installing a control cabinet in the Water and Sewer Utilities Building and a remote alarm unit in the Police Station, such control unit to provide alarm indicators for power line failure, high dry well, high wet well, and the operating status of all pumps at each station. b . There shall be constructed and installed approximately 10,000 feet of 36-inch, 24-inch, 18-inch and 12-inch concrete storm sewer lines in the Talbot Park, Lake Ballinger, Five Corners and Sierra areas, all as more particularly set forth in "Exhibit A" attached hereto and by this reference made a part hereof, and a storm sewage catchment site shall be acquired at 196th Street Southwest and 80th Avenue West in the City of Edmonds. c. The City shall acquire storage tank sites for the north and central areas of the City. d. There shall be constructed and installed approximately 3 ,600 feet of 12-inch and 14, 000 feet of 8-inch cast iron water mains in various City streets as more particularly set forth in "Exhibit A" attached hereto and by this reference made a part hereof. There shall be included in the foregoing the acquisition of all necessary valves, fittings, couplings, connections, wyes , manholes, equipment and ap- purtenances and the acquisition of any easements, rights -of -way and land that may be required and there shall be included the performance of any work Vvh ich may be necessary to the foregoing construction and installation. The City Council expressly reserves the right to make changes in the items listed as a part of the plan providing for additions and betterments where such changes will not substantially alter such plan, such as to make reasonable modifications in locations and in sizes of the storm sewer lines and water supply and transmission mains which would, in the opinion of the City Council, be in the best interest of the City and to proceed with the construction and installa- tion of said improvement in whole or in successive parts or units from time to time as may be advisable and as funds for the same become available. -7- Section 3. The life of the foregoing additions to and betterments and extensions of the waterworks utility of the City is hereby declared to be at least thirty years. Section 4. The estimated cost, as near as may be, of the acquisition, construction and installation of the above -described additions to and better- ments and extensions of the waterworks utility of the City is hereby declared to be $ 250 , 000.00 . Section 5. The gross revenues and benefits to be derived from the opera- tion and maintenance of the waterworks utility of the City, at the rates to be charged for water and for sanitary sewage disposal service on the entire util- ity will, in the judgment of the City Council, be more than sufficient to meet all expenses of maintenance and operation thereof and to permit the setting aside into a special fund or funds out of the gross revenues of the waterworks utility of the City, sufficient amounts to pay the interest on the bonds herein authorized to be issued and on the outstanding "Water and Sewer Revenue Bonds, 1959, " the outstanding "Water and Sewer Revenue Bonds, 1960, " the outstand- ing "Water and Sewer Revenue Bonds, 1961 , " the outstanding "Water and Sewer Refunding Revenue Bonds, 1964, " the outstanding "Water and Sewer Revenue Bonds, 1965, " and the outstanding "Water and Sewer Revenue Bonds, 1966, " as such interest becomes due and payable and to pay and redeem all of the said bonds at maturity. Section 6. For the purpose of obtaining the funds necessary (a) to com- plete the expansion of the sewage treatment plant and to complete the construction of the water and sewer utility building as provided in Ordinance No. 1194, specify- ing and adopting a system or plan of additions to and betterments and extensions of the waterworks utility of the City; (b) to reimburse the Water and Sewer Depart- ment Operating and Maintenance Funds for the temporary loan to construct the lift station in Local Improvement District No. 138; and (c) to carry out the system or plan of additions to and betterments and extensions of the waterworks utility of the City, as specified and adopted in Section 2 and hereby ordered to be car- ried out, there shall be issued and sold $400,000.00 par value of "Water and Sewer Revenue Bonds, 1967" (hereinafter designated as the "Bonds") . The Bonds shall be dated July 1, 1967, shall be in denominations of $5 , 000.00 each, shall be numbered from 1 to 80, inclusive, shall bear interest at the rates hereinafter set forth, payable semiannually on January 1 and July 1 of each year, interest to maturity to be evidenced by coupons to be attached to the Bonds, with full obligation on the part of the City to pay interest at the bond rate from and after the bond maturity dates until the Bonds with interest are paid in full, or sufficient moneys are on deposit in the Bond Fund for such payment in full and the Bonds have been duly called for redemption. Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America at the office of the Treasurer of the City solely out of the Bond Fund. The Bonds shall be a valid claim of the holder thereof only as against the Bond Fund and the fixed amount of the revenues of the waterworks utility of the City pledged to such fund and shall not be a general obligation of the City. The Bonds shall mature and bear interest in accord- ance with the following schedule, to -wit: Bond Numbers Interest (Inclusive) Amounts Rates Maturitie s 1 to 3 $15 , 000 4.5 % July 1, 1968 4 to 6 15,000 4.5 % July 1, 1969 7 to 9 15,000 4.5 % July 1, 1970 10 to 12 15,000 4.5 % July 1, 1971 13 to 15 15,000 4.5 % July 1, 1972 16 to 18 15,000 4.5 % July 1, 1973 19 to 21 15,000 4.5 % July 1, 1974 22 to 25 20,000 4.75% July 1, 1975 26 to 29 20,000 4.75% July 1, 1976 30 to 33 20,000 4.75% July 1, 1977 34 to 37 20,000 4.75% July 1, 1978 38 to 41 20,000 4.75% July 1, 1979 42 to 46 25,000 4.75% July 1, 1980 47 to 51 25,000 5 % July 1, 1981 52 to 56 25,000 5 % July 1, 1982 57 to 62 30,000 5 % July 1, 1983 63 to 68 30,000 5 % July 1, 1984 69 to 74 30,000 5 % July 1, 1985 75 to 80 30,000 5 % July 1, 1986 Section 7. Bonds numbered 1 to 46, inclusive, of a par value of $230,000.00 maturing from July 1, 1968, through July 1, 1980, shall be issued without the right or option of the City to call the same for redemption prior to their respective maturity dates. The City reserves the right to redeem outstanding Bonds numbered 47 to 80, inclusive, of a total par value of $170 , 000. 00 maturing from July 1, 1981 , through July 1, 1986, in whole, or in part in inverse numerical order, highest numbers first, at par plus accrued interest to date of redemption on July 1, 1980, or on any semiannual interest payment date thereafter. Notice of such call for redemption shall be published once not less than 30 nor more than 45 days prior to the call date in the official newspaper of the City and shall also be mailed to Foster & Marshall Inc. at its main office in Seattle, Washington, presently 400 Norton Building, or its successor, within the same period. Interest on any Bonds so called for redemption shall cease on the date fixed for such redemption upon payment of the redemption price into the Bond Fund. Section 8. The Bond Fund has, by Ordinance No. 773, been divided into a "Principal and Interest Account" and a "Reserve Account. " So long thereafter as Bonds are outstanding against the Bond Fund the Treasurer of the City shall set aside and pay into the Bond Fund, in addition to the amounts covenanted to be paid into the Bond Fund by Ordinance No. 773 for the outstanding 1959 Bonds and by Ordinances Nos. 814, 909, 1042, 1141 and 1207 for the subsequently issued and presently outstanding Parity Bonds, out of the gross revenues of the waterworks utility of the City, a fixed amount without regard to any fixed pro- portion, namely: (a) Into the "Principal and Interest Account," on or before the first day of each month, beginning with the month of August, 1977, one -twelfth of the next ensuing requirements for both principal and interest on the Bonds and continuing thereafter until the Bonds, both principal and interest, are paid in full, provided, however, that all interest earned on investments of the proceeds of the sale of the Bonds deposited in the "Water and Sewer Fund" of the City pending the use of such proceeds for construction pur- poses shall be transferred from said "Water and Sewer Fund" of the City to the "Principal and Interest Account" in the Bond Fund and applied to the payment of interest on the Bonds in lieu of the use of the gross revenues of the waterworks utility of the City for such purpose. (b) Into the "Reserve Account," on or before the first day of each month, beginning with August, 1967, not less than the sum of $ 546.5 7 , until a total additional reserve shall be accumulated therein in the amount of $32,794.00 by no later than July 1, 1972. The "Reserve Account" may be accumulated from any other moneys which the City may have available for such purpose in addition to using said revenues therefor. The "Reserve Account" shall be maintained in such amount, except for withdrawals therefrom as authorized herein, at all times so long as any Bonds and Parity Bonds are outstanding, PROVIDED that when the total amount in the -10- Bond Fund shall equal the total amount of principal of and interest on all out- standing Bonds and Parity Bonds no further payments need be made into the Bond Fund. In the event there shall be a deficiency in the "Principal and Inter- est Account" in the Bond Fund to meet maturing installments of either principal or interest, as the case may be, such deficiency shall be made up from the "Reserve Account" by the withdrawal of cash therefrom for that purpose. Any deficiency created in the "Reserve Account" by reason of such withdrawal shall then be made up from the moneys from the revenues of the waterworks utility of the City first available after making necessary provision for the required pay- ments into the "Principal and Interest Account." The moneys in the "Reserve Account" shall otherwise be held intact and may be applied against the outstand- ing bonds payable out of the Bond Fund. All moneys in the "Reserve Account" above provided for may be kept on deposit in the official bank depository of the City, or in any national bank, or may be invested in United States Government obligations redeemable at a fixed price and maturing not later than the final maturity date of the last outstanding bonds payable out of the Bond Fund. Section 9. The gross revenues from the waterworks utility of the City are hereby pledged to such payment and the Bonds shall constitute a lien and charge upon such revenues prior and superior to any other charges whatsoever, excluding charges for maintenance and operation of the waterworks utility of the City, except that the lien and charge upon such revenues for the Bonds shall be on a parity with the lien and charge upon such revenues for outstand- ing Parity Bonds. Section 10. The City Council and corporate authorities of the City hereby declare that in creating the Bond Fund and in fixing the amounts to be paid into the same as aforesaid they have exercised due regard for the cost of operation and maintenance of the waterworks utility of the City and the debt service re- quirements of the presently outstanding Parity Bonds and the City has not bound and obligated itself to set aside and pay into the Bond Fund a greater amount or proportion of the revenues of the said utility than in the judgment of the City Council will be available over and above such costs of maintenance and opera- tion and debt service requirements of said outstanding Parity Bonds and that no -11- portion of the revenues of the waterv�orks utility of the City has been previously pledged for any indebtedness other than the presently outstanding Parity Bonds. Section 11. The City hereby covenants and agrees with the owner and holder of each Bond at any time outstanding as follows: (a) That it will establish, maintain and collect such rates and charges for water and sanitary sewage disposal service so long as any Bonds are outstanding as, together with the income earned from the in- vestment of the proceeds from the sale of the Bonds, will make available for the payment of the principal of and interest on such Bonds and on out- standing Parity Bonds an amount equivalent to at least 1.5 times the aver- age annual debt service requirements, both principal and interest, of the Bonds and outstanding Parity Bonds, after deducting costs of maintenance and operation from the gross revenues of the waterworks utility of the City. (b) That it will at all times maintain and keep the waterworks util- ity of the City in good repair, working order and condition, and also will at all times operate such utility and the business in connection therewith in an efficient manner and at a reasonable cost. (c) That it will not sell, lease, mortgage or in any manner encumber or dispose of all the property of the waterworks utility of the City, unless provision is made for payment into the Bond Fund of a sum sufficient to pay the principal of and interest on all Bonds at any time outstanding, and that it will not sell, lease, mortgage, or in any manner encumber or dispose of any part of the property of said waterworks utility of the City that is used, useful and material to the operation thereof, unless provision is made for replacement thereof, or for payment into the Bond Fund of the total amount of revenue received which shall not be less than an amount which shall bear the same ratio to the amount of outstanding bonds payable out of the Bond Fund as the revenue available for debt service for such outstanding bonds for the twelve months preceding such sale, lease, encumbrance or disposal from the portion of the utility sold, leased, encumbered or dis- posed of bears to the revenue available for debt service for such bonds from the entire utility for the same period. Any such moneys so paid into the Bond Fund shall be used to retire such outstanding bonds payable out of the Bond Fund at the earliest possible date and until being so used may be invested in the same manner as provided for the investment of the moneys in the "Reserve Account" in the Bond Fund. (d) That it will while any of the Bonds remains outstanding keep proper and separate accounts and records in which complete and separate entries shall be made of all transactions relating to the waterworks util- ity of the City and it will furnish the original purchaser or purchasers of the Bonds or any subsequent holder or holders thereof at the written re- quest of such holder or holders complete operating and income statements of said utility in reasonable detail covering any calendar year not more than ninety days after the close of such calendar year and it will grant any holder or holders of at least twenty-five percent of the outstanding Bonds the right at all reasonable times to inspect the entire waterworks utility of the City and all records, accounts and data of the City relating thereto. Upon request of any holder of any of said Bonds, it will also furnish to such holder a copy of the most recently completed audit of the City's ac- counts by the State Auditor of Washington. (e) That it will not furnish water or sanitary sewage disposal ser- vice to any customer whatsoever free of charge and will promptly take legal action to enforce collection of all delinquent accounts. -12- (f) That it will carry the types of insurance on the properties of the waterworks utility of the City in the amounts normally carried by private water and sewer companies engaged in the operation of water and sewerage systems, and the cost of such insurance shall be consid- ered a part of operating and maintaining said utility. If, as, and when, the United States of America or some agency thereof shall provide for War Risk Insurance, the City further agrees to take out and maintain such insurance on all or such portions of said system on which such War Risk Insurance may be written in an amount or amounts to cover adequately the value thereof. (g) That it will pay all costs of maintenance and operation of the waterworks utility of the City and the debt service requirements for the outstanding Parity Bonds and otherwise meet the obligations of the City as herein set forth. Section 12. In the event the City shall issue advance refunding bonds pursuant to the laws of the State of Washington to pay the principal of and in- terest on the Bonds or such portion thereof included in the refunding plan as the same become due and payable and to refund all such then outstanding Bonds and to pay the costs of refunding, and shall have irrevocably set aside for and pledged to such payment and refunding, moneys and/or direct obligations of the United States of America sufficient in amount, together with known earned in- come from the investment thereof, to make such payments and to accomplish the refunding as scheduled, and shall irrevocably make provisions for redemption of such Bonds, then in that case all right and interest of the owners or holders of the Bonds to be so retired or refunded and the appurtenant coupons in the covenants of this Ordinance and in the revenues, funds and accounts obligated to the payment of such Bonds, except the right to receive the funds so set aside and pledged, shall thereupon cease and become void and the City may then apply any moneys in any fund or account established for the payment or redemption of such Bonds or coupons to any lawful purposes as it shall determine. In the event that the refunding plan provides that the refunding bonds be secured by cash and/or direct obligations of the United States of America pend- ing the prior redemption of those Bonds being refunded and if such refunding plan also provides that certain cash and/or direct obligations of the United States of America are irrevocably pledged for the prior redemption of those Bonds in- cluded in the refunding plan, then only the debt service on the Bonds and the refunding bonds payable from revenues shall be included in the computation of coverage for issuance of Parity Bonds and the annual computation of coverage for determining compliance with the rate covenants. -13- Section 13. The City agrees that it will not hereafter issue any water and sewer revenue bonds which will constitute a lien and charge against the gross revenues of the waterworks utility of the City prior to or on a parity with the lien and charge against such revenues required to be made into the Bond Fund for the payment of the Bonds and the outstanding Parity Bonds, except that it hereby reserves the right to issue additional and/or refunding Parity Bonds if the conditions and requirements set forth in Section 13 of Ordinance No. 773 passed July 7, 1959, are met and complied with at the time of the issu- ance of such Parity Bonds, which section is by this reference incorporated herein and made a part hereof and shall be applicable to the Bonds and such additional and/or refunding Parity Bonds after the payment and retirement of the 1959 Bonds. Section 14. The Bonds shall be in substantially the following form: No. $5,000.00 UNITED STATES OF AMERICA STATE OF WASHINGTON CITY OF EDMONDS WATER AND SEWER REVENUE BOND, 1967 o� 0 KNOW ALL MEN BY THESE PRESENTS: That the City of Edmonds, Washington, for value received, promises to pay to bearer on the 1ST DAY OF JULY, 19_, the principal sum of FIVE THOUSAND DOLLARS together with interest thereon at the rate of PERCENT L_%) per annum , payable semiannually on January 1 and July 1 of each year, upon presentation and surrender of the attached interest coupons as they severally mature up to the bond maturity date and with full obligation on the part of the City to pay interest at the same rate from and after the bond maturity date until this bond with interest is paid in full, or funds are available in the "Water and Sewer Revenue Bond Re- demption Fund, 1959," (hereinafter called the "Bond Fund") for payment in full. Both principal of and interest on this bond are payable in lawful money of the United States of America at the office of the City Treasurer of Edmonds, Washington, solely out of the special fund created by Ordinance No. 773, and referred to herein as the "Bond Fund," into which fund the City of Edmonds hereby irre- vocably binds itself to pay certain fixed amounts out of the gross revenues of the waterworks utility of the City, including the sewerage system as a part thereof, now -14- belonging to or which may hereafter belong to the City, including all additions, extensions and betterments thereof now or at any time made or constructed, without regard to any fixed proportion, namely, amounts sufficient to pay the principal of and interest on this issue of bonds, on the out- standing "Water and Sewer Revenue Bonds, 1959 , " "Water and Sewer Revenue Bonds, 1960, " "Water and Sewer Rev- enue Bonds, 1961 , " "Water and Sewer Refunding Revenue Bonds, 1964, " "Water and Sewer Revenue Bonds, 1965, " and "Water and Sewer Revenue Bonds, 1966, " as they re- spectively become due and to maintain a reserve, all at the times and in the manner set forth in Ordinances Nos. 773, 814, 909, 1042, 1141, 1207 and 1 . The gross revenues from the combined water and sewer- age systems, comprising the waterworks utility of the City, are hereby pledged to such payment, and the bonds of this issue constitute a lien and charge upcn such revenues prior and superior to any other charges whatsoever, excluding charges for maintenance and operation, except that the lien and charge upon said revenues for this issue of bonds shall be on a parity with the lien and charge upon such revenues for the outstanding "Water and Sewer Revenue Bonds, 1959 , " "Water and Sewer Revenue Bonds, 1960," "Water and Sewer Revenue Bonds, 1961 , " "Water and Sewer Refunding Revenue Bonds, 1964, " "Water and Sewer Revenue Bonds, 1965, " "Water and Sewer Revenue Bonds, 1966, " and any additional water and sewer revenue bonds which may be hereafter issued, in accordance with the provisions of Section 13 of Ordinance No. 773. This bond is one of a total issue of $400,000.00 par value of bonds, all of like date, tenor and effect, except as to maturities, interest rates and option of redemption, all pay- able from the Bond Fund and all issued by the City under and in pursuance of the laws of the State of Washington and Ordinance No. I `3( N of the City, for the purpose of pro- viding the funds to pay the cost of (a) carrying out the sys- tem or plan of additions to and betterments and extensions of the waterworks utility of the City, including the system of sewerage as a part thereof, specified and adopted by Ordin- ance No. i ) 19 , (b) completing the system or plan of addi- tions to and betterments and extensions of the waterworks utility of the City, including the system of sewerage as a part thereof, specified and adopted by Ordinance No. 1194, passed April 5, 1966, and (c) reimbursing the Water and Sewer Department Operating and Maintenance Funds for a temporary loan as the City's participation in the construction of a lift station in Local Improvement District No. 138. Reference to Ordinance No. t3 1 14 is hereby made as more fully describ- ing the covenants with and rights of holders of bonds of this issue. Bonds numbered 1 to 46, inclusive, of a par value of $ 230 , 000. 00 maturing from July 1 , 1968, through July 1 , 1980, are issued without the right or option of the City to call the same for redemption prior to their respective matur- ity dates. The City has reserved the right to redeem outstanding bonds numbered 47 to 80, inclusive, of a total par value of $17 0, 0 0 0.0 0 maturing from July 1, 19 81 , through July 1 1986, in whole, or in part in inverse numerical order, highest numbers first, at par plus accrued interest to date of redemption on July 1, 1980, or on any semiannual inter- est payment date thereafter. -15- Notice of such call for redemption shall be published once not less than 30 nor more than 45 days prior to the call date in the official newspaper of the City and shall also be mailed to Foster & Marshall Inc, at its main of- fice in Seattle, Washington, presently 400 Norton Build- ing, or its successor, within the same period. Interest on any bonds so called for redemption shall cease on the date fixed for such redemption upon payment of the re- demption price into the Bond Fund. The City of Edmonds hereby covenants and agrees with the holders of each and every one of the bonds of this issue to fully carry out all covenants and meet all obliga- tions of the City, as herein set forth and as set forth in Ordinance No. It is hereby certified and declared that the bonds of this issue are issued pursuant to and in strict compliance with the constitution and the laws of the State of Wash- ington and the ordinances of the City of Edmonds, and that all acts, conditions and things required to be done precedent to and in the issuance of this bond have hap- pened, have been done and have been performed as re- quired by law. IN WITNESS WHEREOF the City of Edmonds, Washing- ton, has caused this bond to be signed by the facsimile signature of the Mayor and attested by the manual signa- ture of the City Clerk and its corporate seal to be hereto affixed and the interest coupons attached to be signed with the -manual - signatures of said officials this 1st day of July, 1967. CI F EDMONDS , W GTON ._mil B ""yr� Mayor ATTEST: City Clerk The interest coupons attached to the Bonds shall be in substantially the following form: Coupon No. $ On the 1st day of (JANUARY) (JULY) , 19_, the City of Edmonds, Washington, upon presentation and surrender of this coupon, will pay to the bearer at the office of the City Treasurer the amount shown hereon in lawful money of the United States of America from the special fund of said City, known as the "Water and Sewer Revenue Bond Redemption Fund, 1959," said sum being six months' interest then due on its "Water and Sewer Revenue Bond, 1967," dated July 1, 1967, and numbered CITY OF EDMONDS , WASHINGTON By facsimile signature) Mayor ATTEST: (facsimile signature) City Clerk -16- The Bonds shall be printed on lithographed forms, shall be signed by the _man.iza:111- signature of the Mayor and attested by the manual signature of the Clerk and shall have the seal of the City of Edmonds affixed thereto and the interest coupons shall bear the facsimile signatures of the Mayor and the Clerk. Section 15. Foster & Marshall Inc. of Seattle, Washington, heretofore submitted an offer to purchase the Bonds at a price of $97.50 per each $100.00 principal amount of the Bonds, together with accrued interest from the date of issuance to the date of delivery of the Bonds to the purchaser, the City to fur- nish the necessary legal proceedings, the printed Bonds and the unqualified ap- proving legal opinion of Roberts, Shefelman , Lawrence, Gay & Moch , municipal bond counsel of Seattle, Washington, at the expense of the City. The City Council, being of the opinion that no better price could be obtained for the Bonds and that it was in the best interest of the City that said offer be accepted, duly accepted the same on June 20, 1967, and such acceptance is hereby ratified and confirmed. The City officials are hereby authorized and directed to deliver the Bonds, immediately upon their execution, to Foster & Marshall Inc, of Seattle, Washington, upon payment therefor in accordance with the offer of said purchaser. The accrued interest received from the sale of the Bonds shall be deposited in the Bond Fund and the principal proceeds received shall be de- posited in the "Water and Sewer Fund" of the City. PASSED by the City Council at a regular meeting thereof and APPROVED by the Mayor of the City of Edmonds, Washington, this 5th day of July, 1967. ATTEST: City Cler FORM APPROVED: City Attorn -17- EXHIBIT "A" STORM SEWER LINES -(Project -No. 4) Approximate footage of storm sewer lines in the following streets and locations: 1. 1450' of 36" and 30" from 200th St. S.W. through easements to park property at 83rd Ave. W. 2. 420' of 36" in an easement from 228th St. S.W. to the Traction Right -of -Way. 3. 1100' of 18" in an easement from Olympic View Dr. in a north- westerly direction to the Great Northern Railroad right-of-way. 4. 340' of 12" for Goodhope Pond Overflow (starting at Goodhope Pond, across Main Street to headwaters of Shell Creek). 5. 650' of 12" and 500' of 21" in 19th Ave. So., vicinity of 208th St. S.W. 6. 750' of 24" in 81st Pl. W., vicinity of 202nd St. S.W. to 204th St. S.W. 7. 300' of 12" in 206th St. S.W. from 77th Ave. W. (24th Ave. No.) to 78th P1. W. 8. 400' of 12" in 24th Ave. No. (77th Ave. W.) 9. 425' of 21" in 202nd Pl. S.W. to 203rd St. S.W., vicinity of 78th Ave. W. 10. 2500' of 24" in 200th St. S.W. to 202nd Pl. S.W. from 81st Pl. W. to 77th Ave. W. 11. 450' of 15" in 80th Ave. W. from 196th P1. S.W. to 198th St. S.W. 12. 400' of 18" in 80th Ave. W. from 196th St. S.W. to 196th Pl. S.W. 13. 315' of 12" in vicinity of 78th Ave. W. from 192nd Pl. S.W. to 193rd St. S.W. WATER MAINS (Project No. 5) Approximate quantities of cast iron water mains in streets as follows: 1. 3600' of 12" in 184th St. S.W. from 80th Ave. W. to 88th Ave. W.; 88th Ave. W. from 184th St. S.W. to Olympic View Dr. 2. 1600' of 8" in Olympic View Dr. from 88th Ave. W. in a westerly direction. 3. 2800' of 8" in Olympic Ave. from Edmonds St. to Viewland Dr. 4. 2700' of 8" in 9th Ave. from Main St. to Casper St. 5. 6900' of 8" in 220th St. S.W. from 88th Ave. W. to 9th Ave. S.; 9th Ave. S. from Elm St. to Edmonds Way; or on other alternate routes under study.