Ordinance 3996CITY OF EDMONDS, WASHINGTON
ORDINANCE NO. 3996
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 in
an aggregate amount not to exceed $20,000,000 for the purpose of
providing the funds necessary: (a) to pay all or a portion of the
costs of carrying out that plan of additions, (b) to make a deposit to
the debt service reserve account, and (c) 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.
Passed May 5, 2015
This document prepared by:
Foster Pepper PLLC
1111 Third Avenue, Suite 3400
Seattle, Washington 98101
(206) 447-4400
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TABLE OF CONTENTS
Section 1. Findings and Determinations......................................................................................1
Section2. Definitions.....................................,...,........................................................................2
Section 3. Adoption of Plan of Additions.................................................................................... 8
Section 4.
Purpose and Authorization of the Bonds.................................................................... 8
Section 5.
Description of the Bonds; Appointment of Designated Representative ..................... 9
Section 6.
Bond Registrar; Registration and Transfer of Bonds..................................................9
Section 7.
Form and Execution of Bonds..................................................................................10
Section8.
Payment of Bonds.....................................................................................................10
Section 9.
Redemption Provisions and Open Market Purchase of Bonds .................................
I I
Section 10.
Failure To Pay Bonds.......................................................,.......................................12
Section 11.
Refunding or Defeasance of the Bonds ..................... ...............12
Section 12.
Security for the Bonds; Bond Fund..........................................................................12
Section 13.
Deposit of Bond Proceeds.............................................................................. ........14
Section14.
Flow of Funds...........................................................................................................14
Section 15.
Additional Covenants...............................................................................................15
Section 16.
Rate Stabilization Account.......................................................................................16
Section 17.
Separate Utility Systems...........................................................................................16
Section 18.
Sale and Delivery of the Bonds; Parity Certificate...................................................17
Section 19.
Parity Conditions......................................................................................................18
Section20.
Tax Matters...............................................................................................................18
Section 21.
Official Statement; Continuing Disclosure...............................................................19
Section 22.
Amendatory Ordinances...........................................................................................19
Section 23.
General Authorization and Ratification....................................................................21
Section24.
Severability...............................................................................................................21
Section 25.
Effective Date of Ordinance.....................................................................................22
Exhibit A Parameters for Final Terms of the Bonds
Exhibit B Parity Conditions For Issuance of Future Parity Bonds
Exhibit C Description of Plan of Additions
Exhibit D 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.
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CITY OF EDMONDS, WASHINGTON
ORDINANCE NO. 3996
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 in
an aggregate amount not to exceed $20,000,000 for the purpose of
providing the funds necessary: (a) to pay all or a portion of the
costs of carrying out that plan of additions, (b) to make a deposit to
the debt service reserve account, and (c) 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) Plan of Additions. The City is in need of funds with which to finance the Plan of
Additions, the estimated cost of which is more than $20,000,000, 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 25 years.
(b) Previously Issued Bonds and Loans. The City previously issued the 2011 Bonds
and the 2013 Bonds and by the Outstanding Parity Bond Ordinances provided for the issuance of
Future Parity Bonds on a parity of lien with the Outstanding Parity Bonds if certain Parity
Conditions are met at the time those Future Parity Bonds are issued. The City also has several
outstanding Loans, which are secured by a pledge of net revenues that is junior and inferior to
the pledge securing the Parity Bonds.
(c) Parity Conditions Met. The City Council finds and declares that 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 that 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.
(d) Sufficiency of Gross Revenue. The City Council finds and determines that 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
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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 the principal of
and interest on the Outstanding Parity Bonds and the Bonds when due. The City Council
declares that in fixing the amounts to be paid into the Bond Fund under this ordinance it 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 of the Water and Sewer
Utility than in its judgment will be available over and above such Operating and Maintenance
Expense.
(e) Issuance of Bonds. Based on the foregoing, the City Council finds that 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. Definitions. As used in this ordinance, the following words shall have the
following meanings:
(a) "2011 Bonds" means the City's outstanding Water and Sewer Improvement and
Refunding Revenue Bonds, 2011, authorized by the 2011 Bond Ordinance.
(b) "2011 Bond Ordinance " means Ordinance No. 3863, passed on December 6,
2011, authorizing the issuance of the 2011 Bonds.
(c) "2013 Bonds" means the City's outstanding Water and Sewer Revenue Bonds,
2013, authorized by the 2013 Bond Ordinance.
(d) "2013 Bond Ordinance" means Ordinance No. 3933, passed on July 16, 2013,
authorizing the issuance of the 2013 Bonds.
(e) "Adjusted Net Revenue" means Net Revenue, plus withdrawals from the Rate
Stabilization Account and less deposits into the Rate Stabilization Account.
(f) "Annual Debt Service" means, for any calendar 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 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 then -outstanding Variable Interest Rate Bonds 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.
(g) "Authorized Denominations" means $5,000 or any integral multiple thereof
within a maturity of a Series.
(h) "Average Annual Debt Service" means, as of its date of calculation, the sum of the
Annual Debt Service for the current calendar year and the calendar years remaining to the last
scheduled maturity of the applicable issue or issues of bonds divided by the number of those
years.
(i) "Beneficial Owner" means, with respect to a Bond, the owner of any beneficial
interest in that Bond.
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(j) "Bond Counsel" means the firm of Foster Pepper PLLC, 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.
(k) "Bond Fund" means the City's Water and Sewer Utility Revenue Bond Fund,
2011, created by the 2011 Bond Ordinance for the payment of the principal of and interest on all
Parity Bonds.
(1) "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.
(m) "Bond Insurer" or "Insurer" means a bond insurance company providing a Bond
Insurance Policy or Reserve Securities for any outstanding Parity Bonds.
(n) "Bond Purchase Contract" means an offer to purchase a Series of the Bonds,
setting forth certain terms and conditions of the issuance, sale and delivery of those Bonds,
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.
(o) "Bond Register" means the books or records maintained by the Bond Registrar for
the purpose of identifying ownership of each Bond.
(p) "Bond Registrar" means the Fiscal Agent, or any successor bond registrar
selected by the City.
(q) "Bonds" means the bonds authorized to be issued by this ordinance.
(r) "City" means the City of Edmonds, Washington, a municipal corporation duly
organized and existing under the laws of the State.
(s) "City Council" means the legislative authority of the City, as duly and regularly
constituted from time to time.
(t) "Code" means the United States Internal Revenue Code of 1986, as amended, and
applicable rules and regulations promulgated thereunder.
(u) "Construction Fund" means the fund or account designated by the City Finance
Director for the payment of the costs of the Plan of Additions.
(v) "Coverage Requirement" means for any calendar year, an amount of Adjusted Net
Revenue at least equal to 1.25 times the Annual Debt Service in that year on all then -outstanding
Parity Bonds. For purposes of calculating the Coverage Requirement, ULID Assessments due in
that year and not delinquent shall be subtracted from Annual Debt Service.
(w) "Designated Representative" means the officer of the City appointed in Section 5
of this ordinance to serve as the City's designated representative in accordance with RCW
39.46.040(2).
(x) "DTC" means The Depository Trust Company, New York, New York, or its
nominee.
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(y) "Final Terms" means the terms and conditions for the sale of a Series of the
Bonds 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.
(z) "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.
(aa) "Financial Advisor" means A. Dashen and Associates of Bellevue, Washington,
or any other Financial Advisor then appointed and acting as financial advisor to the City.
(bb) "Fiscal Agent" means the fiscal agent of the State, as the same may be designated
by the State from time to time.
(cc) "Future Parity Bond Authorizing Ordinance" means an ordinance of the City
authorizing the issuance and sale and establishing the terms of Future Parity Bonds.
(dd) "Future Parity Bonds" means all revenue obligations and other obligations of the
City for borrowed money (including, without limitation, financing leases) issued or incurred after
the date of the issuance of the Bonds, the payment of the principal of and interest on which
constitutes a charge or lien on the Net Revenue and ULID Assessments equal in rank with the
charge and lien upon such revenue and 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 those obligations described under the definition
of government obligations in RCW 39.53.010(4), as it now reads or hereafter may be amended,
and which are otherwise lawful investments for the City.
(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 but not limited to:
revenues from the sale, lease or furnishing of commodities, services, properties or facilities; all
earnings from the 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 which 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; 0) deposits to 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
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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 that Bond to the Purchaser in exchange for the purchase price of that 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.
6j) "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 a claim on the Net
Revenue that is junior and inferior to the lien and charge 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 outstanding Parity Bonds.
(11) "Maximum Interest Rate" means, with respect to any Variable Interest Rate Bond,
a numerical rate of interest that is the maximum rate of interest those Future Parity Bonds may
bear at any time.
(mm) "MSRB" means the Municipal Securities Rulemaking Board.
(nn) "Net Revenue" means the Gross Revenue, less Operating and Maintenance
Expenses.
(oo) "Official Statement" means an offering document, disclosure document, private
placement memorandum or substantially similar disclosure document provided to purchasers and
potential purchasers in connection with the initial offering of a Series of the Bonds in
conformance with Rule 152-12 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 2011 Bond Ordinance and the
2013 Bond Ordinance.
(rr) "Outstanding Parity Bonds" means any Parity Bonds outstanding at the time of
issuance of any Future Parity Bonds. As of the date of issuance of the Bonds, the Outstanding
Parity Bonds will consist of the then -outstanding 2011 Bonds and 2013 Bonds.
(ss) "Owner" means, without distinction, the Registered Owner and the Beneficial
Owner.
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(tt) "Parity Bond Authorizing Ordinance(s) " means, as applicable to each series of
Parity Bonds, the 2011 Bond Ordinance, the 2013 Bond Ordinance, this ordinance and any
Future Parity Bond Authorizing Ordinance.
(uu) "Parity Bonds" means any Outstanding Parity Bonds, the Bonds and Future Parity
Bonds.
(vv) "Parity Conditions" means the conditions precedent to the issuance of Future
Parity Bonds, originally set forth in Exhibit A of the 2011 Bond Ordinance, and set forth in
Exhibit B to this ordinance, which is incorporated 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 of this ordinance.
(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 the corporation, firm, association, partnership, trust, bank,
financial institution or other legal entity or group of entities selected by the Designated
Representative to serve as purchaser in a private placement, underwriter or placement agent for a
negotiated sale or awarded as the successful bidder in a competitive sale of any Series of the
Bonds.
(aaa) "Rate Stabilization Account" means the account of that name created for the
purposes described in Section 16.
(bbb) "Rating Agency" means a nationally recognized rating agency or agencies, if any,
providing a rating on the Bonds at the request of the City.
(cec) "Record Date" means the Bond Registrar's close of business on the 15ffi day of
the month preceding an interest payment date. With respect to redemption of a Bond prior to its
maturity, the Record Date shall mean the Bond Registrar's close of business on the date on
which the Bond Registrar sends the notice of redemption in accordance with Section 9.
(ddd) "Registered Owner" means, with respect to a Bond, the person in whose name
that 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 shall mean the
Securities Depository.
(eee) "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 the Parity Bonds.
(fff) "Reserve Securities" 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 which 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).
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(ggg) "Reserve Requirement" means for all Parity Bonds, an amount equal to the lesser
of (i) Maximum Annual Debt Service, (ii) 125% of Average Annual Debt Service, or (iii) 10% of
the original proceeds of the then -outstanding Parity Bonds. The Reserve Requirement may be
met by a deposit of cash, Reserve Securities, or any combination of the foregoing, and the
amount payable under any Reserve Securities shall be credited against the amount otherwise
required to be deposited into the Reserve Account.
(hhh) "Rule I5c2-12" means Rule 15c2-12 promulgated by the SEC under the
Securities Exchange Act of 1934, as amended.
(iii) "SEC" means the United States Securities and Exchange Commission.
6J) "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.
(kkk) "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 17 of this ordinance.
(111) "Series of the Bonds" or "Series" means a series of the Bonds issued pursuant to
this ordinance.
(mmm)"Sewer System" means the sanitary sewage collection and disposal system of the
City, also referred to as the sewer utility.
(nnn) "State" means the State of Washington.
(000) "Stormwater System" means the stormwater management utility combined into
the Water and Sewer Utility pursuant to chapter 7.60 of the Edmonds City Code.
(ppp) "System of Registration" means the system of registration for the City's bonds and
other obligations set forth in Ordinance No. 2451 of the City.
(qqq) "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.
(rrr) "Tax Credit Subsidy Payment" means the amounts which 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 bonds issued as Tax Credit Subsidy Bonds.
(sss) "Tax -Exempt Bonds " means any Series issued on a tax-exempt basis.
(ttt) "Term Bond" means those Bonds that are designated as term bonds and are
subject to mandatory redemption prior to maturity in the years and amounts set forth in the Bond
Purchase Contract.
(uuu) "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, which additions, extensions or betterments are financed through
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the issuance of Parity Bonds. As used in this ordinance, the term ULID does not include any
utility local improvement district created for the financing of additions, extensions or betterments
by methods other than the issuance of Parity Bonds.
(vvv) "ULID Assessments" means the assessments levied in any ULID, 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.
(www) "Undertaking" means the undertaking to provide continuing disclosure entered
into pursuant to Section 21 of this ordinance.
(xxx) "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 ordinance authorizing such Future Parity Bonds, which
ordinance also 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.
(yyy) "Variable Interest Rate Bonds" means, for any period of time, Future Parity
Bonds which bear a Variable Interest Rate during that period, except that Future Parity Bonds the
interest rate or rates on which shall have been fixed for the remainder of the term thereof no
longer shall be deemed to be Variable Interest Rate Bonds.
(zzz) "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.
(aaaa) "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.
(bbbb) "Water System" means the system of water supply and transmission of the City,
also referred to as the water utility.
Section 3. Adoption of PIan of Additions. The City specifies, adopts and orders the
carrying out of the projects described in Exhibit C 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.
Section 4. Purpose and Authorization of the Bonds. The City is authorized to borrow
money on the credit of the City and issue water and sewer revenue bonds evidencing
indebtedness in the amount of not to exceed $20,000,000 to provide the funds necessary (1) to
carry out the Plan of Additions, (2) make a deposit to 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.
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Section 5. Description of the Bonds, Appointment of Designated Representative,.
The Finance Director is appointed as the Designated Representative of the City and is 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 of the Bonds, with such
additional terms and covenants as the Designated Representative deems advisable, within the
parameters set forth in Exhibit A, which is attached to this ordinance and incorporated by this
reference.
Section 6. Bond 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) Bond Registrar; Duties. The Fiscal Agent is appointed as initial Bond Registrar.
The Bond 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 Bond
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 all of the Bond Registrar's powers and duties
under this ordinance and the System of Registration. The Bond Registrar shall be responsible for
its representations contained in the Bond Registrar's Certificate of Authentication on each Bond.
The Bond Registrar may become an Owner with the same rights it would have if it were not the
Bond 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 Bond Registrar may be
exchanged for a Bond or Bonds in any Authorized Denomination of an equal aggregate principal
amount and of the same Series, interest rate and maturity. A Bond may be transferred only if
endorsed in the manner provided thereon and surrendered to the Bond Registrar. Any exchange
or transfer shall be without cost to the Owner or transferee. The Bond Registrar shall not be
obligated to exchange any Bond or transfer registered ownership during the period between the
applicable Record Date and the next upcoming interest payment or redemption date.
(d) Securities Depository; Book -Entry Only Form. If a Bond is to be issued in book -
entry 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
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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 Bond 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 Bond
Registrar shall be responsible for any notice that is permitted or required to be given to a
Registered Owner except such notice as is required to be given by the Bond Registrar to the
Securities Depository.
Section 7. 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
authenticated by the Bond 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 its Issue Date.
(b) Authentication. Only a Bond bearing a Certificate of Authentication in
substantially the following form, manually signed by the Bond 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, 2015." 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 8. 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 is 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 Bond Registrar mailed on the interest payment date to the Registered Owner at the address
appearing on the Bond Register on the Record Date. However, 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 Bond Registrar. The Bonds are not subject
to acceleration under any circumstances.
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Section 9. 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, and except for
optional redemptions as set forth below, 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 that Term Bond. The City shall determine the manner in which the
credit is to be allocated and shall notify the Bond Registrar in writing of its allocation prior to the
earliest mandatory redemption date for that Term Bond for which notice of redemption has not
already been given.
(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 Bond Registrar shall select all other Bonds to be redeemed randomly in such manner as the
Bond 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 Bond 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 of redemption of each other Bond, unless waived by the Registered Owner, shall be given
by the Bond 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
prior to the scheduled optional redemption date. Any notice of optional redemption that is so
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rescinded shall be of no effect, and each Bond for which a notice of optional redemption has
been rescinded shall remain outstanding.
(e) Effect of 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 set forth above, 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.
(f) Purchase of Bonds. The City reserves the right to purchase any or all of the Bonds
offered to the City at any time at any price acceptable to the City plus accrued interest to the date
of purchase.
Section 10. Failure To I'ay 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 that Bond at the same rate provided
in the Bond from and after its maturity or date fixed for redemption until that Bond, both
principal and interest, is paid in full or until sufficient money for its payment in full is on deposit
in the Bond 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 11. 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 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 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 12. Security for the Bonds; Bond Fund.
(a) Pledge of Net Revenues. The Net Revenue and ULID Assessments are pledged
irrevocably to the payment of the amounts required to be paid into the Bond Fund for the
payment of the Bonds and all Future Parity Bonds. This pledge shall constitute a lien and charge
upon the Net Revenue and ULID Assessments prior and superior to any other charges
whatsoever.
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(b) Bond Fund; Deposits to Bond Fund. The Bond Fund has been established within
the Water and Sewer Utility Fund as a special fund of the City and divided into two accounts: the
Principal and Interest Account, and the Reserve Account.
So long as any of the Parity Bonds are outstanding, 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 of the
Parity Bonds, an amount that will be sufficient, together with other money on
deposit therein, to pay the interest on the Parity Bonds on the next succeeding
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 on the next succeeding Principal Payment Date, including
mandatory redemption amounts due on that date with respect to any Term Bonds;
and
(3) Into the Reserve Account, an amount sufficient that the amount on deposit in the
Reserve Account satisfies the Reserve Requirement for the Parity Bonds in the
time and manner required by this ordinance.
When the total amount on deposit in the Bond Fund equals the total outstanding amount of
principal and interest for all 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 owners of Parity Bonds.
(c) The Reserve Account; Reserve Requirement. The City covenants and agrees that
it will at all times maintain in the Reserve Account an amount (including the value of all Reserve
Securities deposited therein) equal to the Reserve Requirement, except for withdrawals as
authorized in this subsection, until there is a sufficient amount in the Principal and Interest
Account and Reserve Account to pay the principal of and interest on all outstanding Parity
Bonds, at which time the money in the Reserve Account may be used to pay any such principal
and interest so long as the money remaining on deposit in the Reserve Account is not less than
the Reserve Requirement calculated based on the remaining outstanding Parity Bonds. 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 in the Bond Fund to make
the next upcoming payment of either principal or interest, that deficiency shall be made up from
the Reserve Account by the withdrawal of amounts necessary for that purpose. Any deficiency
created in the Reserve Account by reason of any such withdrawal shall then be made up from the
next available payments of Net Revenue and ULID Assessments after making necessary
provision for the required payments into the Principal and Interest Account.
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(d) Investment of Money Deposited 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 or other legal investments permitted to the
City maturing not later than the date when needed (for investments in the Principal and Interest
Account) or the last maturity of any outstanding Parity Bonds (for investments in the Reserve
Account). Income from investments in the Principal and Interest Account shall be deposited in
that account. Income from investments in the Reserve Account shall be deposited in that account
until the amount therein is equal to the Reserve Requirement, and thereafter shall be deposited in
the Principal and Interest Account or used for other Water and Sewer Utility purposes.
(e) Action to Compel Payments. If the City fails to set aside and pay into the Bond
Fund the amounts set forth above, the owner of any of the outstanding Parity Bonds may bring
action against the City and compel the setting aside and payment.
Section 13. 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 in 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 legal 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 14. Flow of Funds. So long as any Parity Bonds are outstanding, the City
covenants that all ULID Assessments (if any) 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 on, if any) 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 having a charge upon the Net Revenue junior and
inferior to the charge thereon for the payment of the Parity Bonds.
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(7) Without priority, to retire by redemption or to purchase in the open market any
outstanding Parity Bonds or junior lien obligations, 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 15. Additional Covenants. So long as any Parity Bonds are outstanding, the
City covenants and agrees with the 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 which 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, (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 which 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 at least equal to 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 then -outstanding Parity Bonds at the earliest possible 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.
(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
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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 16. 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 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 to the Rate Stabilization Account. The City may at any time, as
determined by the Finance Director and as 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 year.
Earnings from investments in the Rate Stabilization Account shall be deposited in that account
and shall not be included as Adjusted Net Revenue unless and until withdrawn from that account.
Section 17. 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, treatment or other commodity or utility service. The revenue
of that 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 the
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
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Separate Utility System except that the Net Revenue may be pledged on a basis subordinate to
the lien of the Parity Bonds.
Section 18. 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 of the Bonds by negotiated sale or private placement or by
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 Financial Advisor and other advisors. In
determining the method of sale of a Series of the Bonds 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 Negotiated Sale or Private Placement. If the Designated
Representative determines that a Series of the Bonds is to be sold by negotiated sale or private
placement, the Designated Representative shall select one or more Purchasers with which to
negotiate such sale. The Bond Purchase Contract for each Series of the Bonds 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 the terms
of this ordinance.
(c) Procedure for Competitive Sale. If the Designated Representative determines that
a Series of the Bonds 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 of the Bonds 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 award, on behalf of the City, the
winning bid and accept the winning bidder's offer to purchase that Series of the Bonds, with
such adjustments to the aggregate principal amount and principal amount per maturity as the
Designated Representative deems appropriate, consistent with the terms of this ordinance and
such award shall constitute the Bond Purchase Contract. 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, that Series of the Bonds may be sold pursuant to negotiated sale or in
any manner provided by law as the Designated Representative determines is in the best interest
of the City, within the parameters set forth in 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 20 of the 2011 Bond Ordinance and
Section 19 of the 2013 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.
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Section 19, Parity Conditions. The City reserves the right to issue Future Parity Bonds
which will constitute a charge and lien upon the Net Revenue and ULID Assessments on a parity
with the Bonds and the Outstanding Parity Bonds if the Parity Conditions are met and complied
with at the time of the issuance of those Future Parity Bonds. Nothing contained in the Parity
Conditions shall prevent the City from issuing revenue obligations having a lien on the Net
Revenue that is junior to the lien thereon that secures 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 20_ Tax Matters_
(a) Preservation of Tax Exemption for Interest on Tax -Exempt Bonds. The City
covenants that it 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 Bonds issued as 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
also covenants that it 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
covenants in this ordinance 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. " A Series of the
Tax -Exempt Bonds may be designated 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 Tax -Exempt Bonds are
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 of
Tax -Exempt Bonds are issued does not exceed $10,000,000.
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Section 21. 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 of the Bonds to the public or through a
Purchaser as a placement agent. For the sole purpose of the Purchaser's compliance with
paragraph (b)(1) 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 approves the distribution to
potential purchasers of the Bonds of a preliminary Official Statement that has been approved by
the Designated Representative and been deemed final, if applicable, in accordance with this
subsection.
(b) Approval of Final Official Statement. The City approves the preparation of a final
Official Statement for each Series of the Bonds to be sold to the public in the form of the
preliminary Official Statement that has been approved and deemed final in accordance with
subsection (a), 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 if required under Rules 15c2-12. The City
authorizes and approves the distribution by the Purchaser of that final Official Statement so
executed and delivered to purchasers and potential purchasers of a Series of the Bonds.
(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 of the Bonds, the Designated Representative is authorized
to execute a written undertaking to provide continuing disclosure for the benefit of holders of a
Series of the Bonds in substantially the form attached as Exhibit D.
Section 22. Amendatory 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 Owners of the Bonds, 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 owner of any Parity Bonds;
(2) To impose upon the Bond 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 which may lawfully be granted, conferred
or imposed and which 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 which are not contrary or inconsistent with
this ordinance as theretofore in effect;
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51435754 5
(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 which
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) Because of change in federal law or rulings, to maintain the exclusion from gross
income of the interest on the Bonds from federal income taxation.
(c) Except for any amendatory ordinance passed into 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 not less than 50% 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 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 of 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 of 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 subsection (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 all registered
owners of the then outstanding Parity Bonds and to the Rating Agency. Such
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 its passage will not adversely affect the exclusion from gross income for
federal income tax purposes of interest on the Bonds.
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51435754 5
(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) Upon the effective date of any amendatory ordinance passed pursuant to the
provisions of this Section 22, this ordinance shall be amended in accordance therewith, and the
respective rights, duties and obligations under this ordinance of the City, the Bond 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.
Section 23. General Authorization and Ratification. The Designated Representative
and other appropriate officers of the City are severally 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 of the Bonds 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.
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514357545
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 5th cja�,of May, 201_5,,
p EN
City'rr-�ry-0-914;pm
2AS •FORM:
FOSTERV
Bond Counsel
Filed with the City Clerk: May 1, 2015
Passed by the City Council: May 5, 2015
Published: May 10, 2015
Effective Date: May 15, 2015
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51435754 5
Exhibit A
DESCRIPTION OF THE BONDS
(i) Principal Amount. The Bonds may be issued in one or more Series and shall
not exceed the aggregate principal amount of $20,000,000,
and may be issued as either taxable or tax-exempt
obligations.
(ii) Date or Dates. Each Bond shall be dated the Issue Date, which date may
not be later than one year after the effective date of this
ordinance.
(iii) Denominations, Name, etc. 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.
(iv) Interest Rate(s). Each Bond shall bear interest at a fixed rate per annum
(computed on the basis of a 360-day year of twelve 30-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 of the Bonds may not exceed 5.50%.
(v) Payment Dates. 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.
(vi) Final Maturity. Each Series of the Bonds shall mature no later than
December 1, 2040.
(vii) Redemption Rights. 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 subject to such
redemption on one or more dates occurring not
more than 101/2 years after the Issue Date.
514357545
Exhibit A
(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.
(viii) Price. The purchase price for each Series of the Bonds may not be
less than 97% or more than 130% of the stated principal
amount of that Series.
(ix) Other Terms & Conditions. The Designated Representative may determine whether it is
in the City's best interest to provide for bond insurance or
other credit enhancement; and may accept such additional
terms, conditions and covenants as he or she may determine
are in the best in interests of the City, consistent with this
ordinance.
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51435754.5
Exhibit B
PARITY CONDITIONS FOR ISSUANCE OF FUTURE PARITY BONDS
The City may issue Future Parity Bonds on a parity with the Bonds if and only if the
following conditions are met and complied with at the time of issuance of those proposed Future
Parity Bonds:
(a) At the time of issuance of such Future Parity Bonds, 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 those Future Parity Bonds will be paid directly into the
Bond Fund.
(c) The Future Parity Bond Authorizing Ordinance shall 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 necessary to comply with the Reserve Requirement and Section
12 of this ordinance.
(e) At the time of the issuance of such Future Parity Bonds, the City shall 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 operating 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 base 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;
and
(iv) A full year's revenue may be included from any customer being served, but
who has not been receiving service for the full period of operation used as a
basis for the certificate; and
(v) Actual or reasonably anticipated changes to the Operating and Maintenance
Expenses subsequent to such 12-month period shall be added or deducted, as
is applicable.
(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
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51435754 5
Exhibit B
refunded by those 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
then -outstanding Parity Bonds (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) 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 bonds being refunded, and (b) the various annual maturities of the refunding Future
Parity Bonds will not extend more than one year longer than the Parity Bonds being
refunded. Furthermore, no certificate shall be required in connection with the issuance of
Future Parity Bonds if the amount of such bonds proposed to be issued does not exceed
the ULID Assessments levied in support of such Future Parity Bond issue by more than
$5,000 plus any amount of the proceeds of such Future Parity Bonds deposited in the
Reserve Account as capitalized reserve.
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51435754 5
Exhibit C
DESCRIPTION OF PLAN OF ADDITIONS
Water System Plan of Additions:
The planned additions and betterments to the water utility consist of those set forth in the City's
Water Capital Improvement Program, as it may be amended from time to time by the City
Council (the "Water CIP").
A summary of the improvements expected to be financed, in whole or in part, with proceeds
of the Bonds is as follows:
• Recoating and related improvements to the Five Corners Reservoirs
• Pressure relief improvements needed to protect the water system from potentially high
pressure that could occur during certain events
• Replacement of several pressure -reducing valve stations and improvements to other
stations to ensure long-term operation and reliability
• 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
• Any other capital project described in the then -current Water CIP, as determined by the
Finance Director
Sewer System Plan of Additions:
The planned additions and betterments to the sewer utility consist of those set forth in the City's
Sewer Capital Improvement Program, as it may be amended from time to time by the City
Council (the "Sewer CIP").
A summary of the improvements expected to be financed, in whole or in part, with proceeds
of the Bonds is as follows:
• Sewer main replacement project for repair and replacement of sewer pipe sections and
related appurtenances needed due to age and undesirable pipe material and a need to
improve flows
• Rehabilitation of existing pipe with "cured in place pipe"(CIPP) to address pipe integrity
problems in the sewer pipe system
• Lake Ballinger Trunk Sewer Study
• Lift Station #1 Metering and Flow Study
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51435754 5
Exhibit C
• A share of the costs of certain improvements at the Wastewater Treatment Plant:
o Control system upgrades
o Facility repair and improvements
o Clarifier #3 Repair
o Outfall study
o Phase 4 Energy Work Air compressor/aeration blower/diffuser replacement
o Phase 5 Energy Work Solids processing equipment replacement
o Phase 6 Energy Work UV and flow shearing improvement
• Any other capital project described in the then -current Sewer CIP, as determined by the
Finance Director
Stormwater System Plan of Additions:
The planned additions and betterments to the stormwater management utility consist of those set
forth in the City's Stormwater Capital Improvement Program, as it may be amended from time to
time (the "Stormwater CIP").
A summary of the improvements expected to be financed, in whole or in part, with proceeds
of the Bonds is as follows:
• Edmonds Marsh Restoration/Willow Creek Daylighting
• Dayton Street & State Route 104 drainage improvement pump station
• Drainage improvements for:
o Lake Ballinger Associated Projects
0 105th/1061h Ave SW
o Dayton Street between 3rd and 9th Avenues
0 881h Avenue W & 194th Street SW
o Additional City-wide drainage improvements
• Perrinville Creek high flow management
• Rehabilitation of Northstream pipe under Puget Drive and pipe abandonment
• Storm system video assessment
• Stormwater Fund contribution to transportation projects for drainage infrastructure
• Any other capital project described in the then -current Stormwater CIP, as determined by
the Finance Director
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51435754 5
Exhibit D
Form of
UNDERTAKING TO PROVIDE CONTINUING DISCLOSURE
City of Edmonds, Washington
Water and Sewer Revenue Bonds, 2015
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. of the City.
(a) Undertakingto 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:
(i) Annual financial information and operating data of the type included in
the final official statement for the Bonds and described in subsection (b) of
this section ("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; and (14) appointment of a successor or additional
trustee or the change of name of a trustee, if material.
(iii) Timely notice of a failure by the City to provide required annual financial
information on or before the date specified in paragraph (b).
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51435754 5
Exhibit D
(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 State local governmental units such as
the City, as such principles may be changed from time to time, which
statements shall not be audited, except, however, that if and when audited
financial statements are otherwise prepared and available to the City they
will be provided; (2) [references to the specific sections of the Official
Statement to be inserted upon publication of the Official Statement];
(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, 20 ; 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.
(c) Amendment of Undertakin . 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
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.
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51435754 5
Exhibit D
(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, without limitation, the following actions:
(i) Preparing and filing the annual financial information undertaken to be
provided;
(ii) Determining whether any event specified in subsection (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 15c2-12 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 financial advisors and legal counsel, to assist
and advise the City in carrying out the Undertaking; and
(v) Effecting any necessary amendment of the Undertaking.
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51435754 5
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. 3996 (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 5, 2015, 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 10, 2015; 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 May 5, 2015.
CITY OF EDMONDS, WASHINGTON
City erk
51435754 5
Everett Daily Herald
Affidavit of Publication
State of Washington I
County of Snohomish } ss
Kathleen Landis 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 EDH632019 SUMMARY OF
ORDINANCE as it was published in the regular
and entire issue of said paper and not as a
supplement form thereof for a period of 1
issue(s), such publication commencing on
05/10/2015 and ending on 05/10/2015 and that
said newspaper was regularly distributed to its
subscribers during all of said period.
The amount of the fee for such publication is
$73.96.
Subscribed
and sworn
da f
before me on this
Notary Public in and for the State of
Washington.
City oFEdmonds - LEGAL ADS 114101416
SCOTT PASSEY
RECEIVED
MAY 18 2015
EDMONDS CITY CLERK
DEBRA ANN GRIGG
Notary Public
State of Washington
My Commission Expires
October 31, 2017
SUMMARYOF_OH0INANCES
4 of the City of Edmonds. Washirtgtan
On the "h day of May, 2015, "a Clty Coune" of the City aI
Edmonds, passed the fpllawinp Crdlnances. A summeryy of She
content of said ordfnances, consisting of tilles, are provided as
follows:
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 IN AN AGGREGATE AMOUNT NOT TO EXCEED
$20,000.000 FOR THE PURPOSE OF PROVIDING THE FUNDS
NECESSARY,. (A) TO PAY ALL OR A PORTION OF THE COSTS
OF CARRYING OUT THAT PLAN OF ADDITIONS, B TO MAKE
A DEPOSIT TO THE DEBT SERVICE RESERVE ACCOUNT„
AND (CI TO PAY THE COSTS OF ISSUANCE AND SALE OF
THE BONDS; FIXING OR SETTING PARAMETERS WITH
RESPECT TO CERTAIN TERMS AND COVENANTS OF THE
BONDS• APPOINTING THE CITY'$ DESIGNATED
REPRESE`NITATIVETO APPROVE THE FINAL TERMS OF THE
SALE OF THE BONDS; AND PROVIDING FOR OTHER
RELATED MATTERS.
AN ORDINANCE OF THE CITY OF EDMONDS, WASHINGTON,
AUTHORIZING THE ACQUISITION BY NEGOTIATION OR
CONDEMNATION OF REAL PROPERTY INTERESTS NEEDED
FOR THE 7131h 0 212th INTERSECTION IMPROVEMENTS
PROJECT.
AN ORDINANCE OF THE CITY OF EDMONDS, WASHINGTON,
AMENDING ORDINANCE NO. 3991 AS A RESULT OF
UNANTICIPATED TRANSFERS AND EXPENDITURES OF
VARIOUS FUNDS, AND FIXING A TIME WHEN THE SAME
SHALL BECOME EFFECTIVE.
The full text of these Ordinances will be malled upon request.
DATED this 101h day of May, 2015.
CITY CLERK, SCOTT PASSEY
�ublished: May 10, 2015. EDH63201