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2007.01.09 CC Committee Meetings Agenda PacketAGENDA City Council Committees Council Chambers 250 5th Avenue North, Edmonds January 09, 2007 6:00 p.m. Committee Meetings The City Council Committee meetings are work sessions for the City Council and staff only. The meetings are open to the public but are not public hearings. The Committees will meet in the following rooms: Community/Development Services (Council Chambers), Finance (Jury Room), Public Safety (Police Training Room) 1. Community/Development Services Committee A. Report on Main Street lighting cost estimates. (15 Min) 2. Finance Committee A. (15 2007 General Obligation $5,123,200 Bond Issue. Min) B. (10 Utility Code Update. Min) 3• Adjourn Note: The Public Safety Committee will not meet this evening. AgendaQuick©2005 - 2007 Destiny Software Inc., All Rights Reserved Packet Page 1 of 27 AM-788 Report on Main Street Lighting Cost Estimates City Council Committees Date: 01/09/2007 Submitted By: Linda Klein, Public Works Submitted For: Noel Miller Time: 15 Minutes Department: Public Works Type: Action Committee: Agenda Memo Subiect Title Report on Main Street lighting cost estimates. Recommendation from Mayor and Staff Postpone the project until funds can be found to complete the project. 1.A. Previous Council Action As part of the 2007 budget, the City Council appropriated $75,000 from the General Fund to install street lighting on Main Street from 5th Avenue to 6th Avenue. Narrative Because the City was planning on replacing the street trees in the neighborhood, it was felt that the City should also install additional street lighting while this work was being done. Preliminary cost estimates for installing the new street lights were projected to cost approximately $75,000. Subsequent to the 2007-2008 budget adoption, engineering staff prepared design plans and specifications and a more precise cost estimate for the project. The cost of the project has escalated significantly due to the need to replace the sidewalks as part of the project. The new cost estimate for the project that would include replacing the sidewalks is projected at approximately $241,000. Revenue & Expenditures Fiscal Impact `i Attachments No file(s) attached. Form Routing/Status Route Seq Inbox Approved By Date Status 1 City Clerk Sandy Chase 01/04/2007 02:49 PM APRV 2 Mayor Gary Haakenson 01/04/2007 02:53 PM APRV 3 Final Approval Sandy Chase 01/04/2007 04:09 PM APRV Form Started By: Linda Klein Started On: 01/04/2007 09:10 AM Final Approval Date: 01/04/2007 Packet Page 2 of 27 AM-787 2007 General Obligation Bond Issue City Council Committees Date: 01/09/2007 Submitted By: Dan Clements, Administrative Services Time: 15 Minutes Department: Administrative Services Type: Action Committee: Finance Agenda Memo Subiect Title 2007 General Obligation $5,123,200 Bond Issue. Recommendation from Mayor and Staff Recommend approval of preliminary 2007 general obligation bond issue ordinance. 2.A. Previous Council Action Council has previously approved the treatment plant improvements, HVAC energy savings project, and Anderson Center Seismic repairs. Staff is also proposing to include a 2007 energy conservation project that would retrofit traffic signals to LED lights, and a number of other cost saving improvements to other facilities. Narrative Project TOTAL COST Repayment Source General Utility Street REET GRAND TOTAL $5,123,200 $888,400 $3,766,000 $68,800 $400,000 Treatment Plant 2005 BAN $2,000,000 0 2,000,000 0 0 HVAC Project 2006 $650,000 650,000 0 0 0 Anderson Center Seismic 2007 $400,000 0 0 0 400,000 Energy Conservation 2007 $408,200 238,400 101,000 68,800 0 Utility 2007 $1,665,000 0 1,665,000 0 0 Link: Draft Bond Ordinance Revenue & Expenditures Fiscal Impact Attachments Form Routing/Status Route Seq Inbox Approved By Date Status 1 City Clerk Sandy Chase 01/04/2007 03:15 PM APRV 2 Mayor Gary Haakenson 01/04/2007 03:17 PM APRV 3 Final Approval Sandy Chase 01/04/2007 04:08 PM APRV Form Started By: Dan Clements Started On: 01/04/2007 08:03 AM Final Approval Date: 01/04/2007 Packet Page 3 of 27 DRAFT DATED 11412007 CITY OF EDMONDS, WASHINGTON ORDINANCE NO. AN ORDINANCE of the City of Edmonds, Washington, relating to contracting indebtedness; providing for the issuance of not to exceed $ par value of Limited Tax General Obligation Bonds, 2007, of the City for general City purposes to provide funds with which to (a) repay and redeem the City's Water and Sewer Revenue Bond Anticipation Note, 2005 [and its Limited Tax General Obligation Bond Anticipation Note, 2006]; (b) pay or reimburse the City for HVAC improvements to City facilities; (c) pay or reimburse the City for the Anderson Center seismic project; (d) pay or reimburse the City for energy conservation measures; (d) pay or reimburse the City for utility improvements (collectively, the "Projects") and (e) pay the costs of issuance and sale of the bonds; fixing the date, form, maturities, interest rates, terms and covenants of the bonds; establishing a bond redemption fund and construction funds; and providing for the public sale of the bonds. Passed This document prepared by: Foster Pepper PLLC 1111 Third Avenue, Suite 3400 Seattle, Washington 98101 (206) 447-4400 50755286.1 Packet Page 4 of 27 DRAFT DATED 11412007 TABLE OF CONTENTS Page Section1 . Debt Capacity.......................................................................................................... 1 Section 2 . Authorization of Bonds........................................................................................... 2 Section 3 . Description of Bonds.............................................................................................. 2 Section 4 . Registration and Transfer of Bonds........................................................................ 2 Section5 . Payment of Bonds................................................................................................... 3 Section 6 . Redemption Provisions and Open Market Purchase of Bonds ............................... 3 Section 7 . Notice of Redemption............................................................................................. 4 Section 8 . Failure To Redeem Bonds...................................................................................... 5 Section9 . Pledge of Taxes....................................................................................................... 5 Section 10 . Form and Execution of Bonds................................................................................ 5 Section11 . Bond Registrar........................................................................................................ 6 Section 12 . Preservation of Tax Exemption for Interest on Bonds ............................................ 6 Section 13 . Designation of Bonds as "Qualified Tax -Exempt Obligations." ............................ 6 Section 14 . Refunding or Defeasance of the Bonds.................................................................. 6 Section 15 . Bond Fund and Deposit of Bond Proceeds............................................................. 7 Section 16 . Provision for Sale of Bonds and Notice of Sale ..................................................... 7 Section 17 . Preliminary Official Statement Deemed Final ........................................................ 8 Section 18 . Undertaking to Provide Continuing Disclosure...................................................... 8 Section 19 . Effective Date of Ordinance................................................................................. 12 -i- 50755286.1 Packet Page 5 of 27 DRAFT DATED 11412007 CITY OF EDMONDS, WASHINGTON ORDINANCE NO. AN ORDINANCE of the City of Edmonds, Washington, relating to contracting indebtedness; providing for the issuance of $ par value of Limited Tax General Obligation Bonds, 2007, of the City for general City purposes to provide funds with which to (a) repay and redeem the City's Water and Sewer Revenue Bond Anticipation Note, 2005 [and its Limited Tax General Obligation Bond Anticipation Note, 2006]; (b) pay or reimburse the City for HVAC improvements to City facilities; (c) pay or reimburse the City for the Anderson Center seismic project; (d) pay or reimburse the City for energy conservation measures; (d) pay or reimburse the City for utility improvements (collectively, the "Projects") and (e) pay the costs of issuance and sale of the bonds; fixing the date, form, maturities, interest rates, terms and covenants of the bonds; establishing a bond redemption fund and construction funds; and providing for the public sale of the bonds. WHEREAS, the City of Edmonds, Washington (the "City"), is in need of financing for the Projects as defined in Section 1, below, the estimated total cost of which is more than $ , and the City does not have available sufficient funds to pay the cost; WHEREAS, to pay costs of the Projects, the City Council finds it necessary and advisable that the City issue and sell its limited tax general obligation bonds in the principal amount of not to exceed $ (the `Bonds");NOW, THEREFORE; THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DOES ORDAIN as follows: Section 1. Debt Capacity. The assessed valuation of the taxable property within the City as ascertained by the last preceding assessment for City purposes for the calendar year 2007 is $ , and the City has outstanding general indebtedness evidenced by limited tax general obligation bonds[, notes, leases and conditional sales contracts] in the principal amount of $ incurred within the limit of up to 1 %2 % of the value of the taxable property within the City permitted for general municipal purposes without a vote of the qualified voters therein, unlimited tax general obligation bonds [or notes] in the principal amount of $ incurred within the limit of up to 21/2 % of the value of the taxable property within the City for capital purposes only [unlimited tax general obligation bonds in the principal amount of $ incurred within the additional limit of up to 21/2 % of the value of the taxable property within the City for utility purposes] [and unlimited tax general obligation bonds in the principal amount of $ incurred within the additional limit of up to 21/2 % of the value of the taxable property within the City for parks and open space purposes], issued pursuant to a vote of the qualified voters of the City, and the amount of indebtedness for which bonds are authorized herein to be issued is $ -1- 50755286.1 Packet Page 6 of 27 DRAFT DATED 11412007 Section 2. Authorization of Bonds. The City shall borrow money on the credit of the City and issue negotiable limited tax general obligation bonds evidencing that indebtedness as described in Section 3, for general City purposes to provide the funds to: (a) repay and redeem the City's Water and Sewer Revenue Bond Anticipation Note, 2005 [and its Limited Tax General Obligation Bond Anticipation Note, 2006]; (b) pay or reimburse the City for HVAC improvements to City facilities; (c) pay or reimburse the City for the Anderson Center seismic project; (d) pay or reimburse the City for energy conservation measures; (d) pay or reimburse the City for utility improvements (collectively, the "Projects") and (e) pay the costs of issuance and sale of the bonds (the "costs of issuance"). The general indebtedness to be incurred shall be within the limit of up to 11/2 % of the value of the taxable property within the City permitted for general municipal purposes without a vote of the qualified voters therein. Section 3. Description of Bonds. The bonds shall be called Limited Tax General Obligation Bonds, 2007, of the City (the "Bonds") and shall be in the amount of not to exceed $ , or such lesser principal amount that will produce sufficient proceeds to provide no more than $ to pay costs of carrying out the Projects, plus the additional proceeds required to pay the costs of issuance. The Bonds shall be dated the date of their initial delivery; shall be issued in fully registered form; shall be in the denomination of $5,000 or any integral multiple thereof within a single maturity; shall be numbered separately, in the manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification; shall bear interest (computed on the basis of a 360-day year of twelve 30-day months), payable semiannually on each succeeding 1 and 1, commencing 1, 2007, to the maturity or earlier redemption of the Bonds, at such rate or rates as the Council shall establish in the Bond Sale Resolution. Only one interest rate may be specified for the Bonds of the same maturity. The Bonds shall mature or be subject to mandatory redemption on 1 in each of the years 2007 through 20, inclusive, in accordance with the final maturity schedule set forth in the Bond Sale Resolution. The life of the capital facilities to be acquired with the proceeds of the Bonds exceeds the term of the Bonds. Section 4. Registration and Transfer of Bonds. The Bonds shall be issued only in registered form as to both principal and interest and shall be recorded on books or records maintained by the Bond Registrar (the "Bond Register"). The Bond Register shall contain the name and mailing address of the owner of each Bond and the principal amount and number of each of the Bonds held by each owner. Bonds surrendered to the Bond Registrar may be exchanged for Bonds in any authorized denomination of an equal aggregate principal amount and of the same interest rate and maturity. Bonds 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 or transfer any Bond during the 15 days preceding any principal payment or redemption date. The Bonds initially shall be registered in the name of Cede & Co., as the nominee of The Depository Trust Company, New York, New York ("DTC"). The Bonds so registered shall be held in fully immobilized form by DTC as depository in accordance with the provisions of a Blanket Issuer Letter of Representations dated August 6, 1996 between the City and DTC (as it may be amended from time to time, the "Letter of Representations"). Neither the City nor the -2- 50755286.1 Packet Page 7 of 27 DRAFT DATED 11412007 Bond Registrar shall have any responsibility or obligation to DTC participants or the persons for whom they act as nominees with respect to the Bonds regarding accuracy of any records maintained by DTC or DTC participants of any amount in respect of principal of or interest on the Bonds, or any notice which is permitted or required to be given to registered owners hereunder (except such notice as is required to be given by the Bond Registrar to DTC). For as long as any Bonds are held in fully immobilized form, DTC, its nominee or its successor depository shall be deemed to be the registered owner for all purposes hereunder and all references to registered owners, bondowners, bondholders or the like shall mean DTC or its nominee and, except for the purpose of the City's undertaking herein to provide continuing disclosure, shall not mean the owners of any beneficial interests in the Bonds. Registered ownership of such Bonds, or any portions thereof, may not thereafter be transferred except: (i) to any successor of DTC or its nominee, if that successor shall be qualified under any applicable laws to provide the services proposed to be provided by it; (ii) to any substitute depository appointed by the City or such substitute depository's successor; or (iii) to any person if the Bonds are no longer held in immobilized form. Upon the resignation of DTC or its successor (or any substitute depository or its successor) from its functions as depository, or a determination by the City that it no longer wishes to continue the system of book entry transfers through DTC or its successor (or any substitute depository or its successor), the City may appoint a substitute depository. Any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it. If (i) DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained, or (ii) the City determines that the Bonds are to be in certificated form, the ownership of Bonds may be transferred to any person as provided herein and the Bonds no longer shall be held in fully immobilized form. Section 5. Payment of Bonds. Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America. Interest on the Bonds shall be paid by checks or drafts of the Bond Registrar mailed on the interest payment date to the registered owners at the addresses appearing on the Bond Register on the 15th day of the month preceding the interest payment date or, if requested in writing by a registered owner of $1,000,000 or more in principal amount of Bonds prior to the applicable record date, by wire transfer on the interest payment date. Principal of the Bonds shall be payable upon presentation and surrender of the Bonds by the registered owners to the Bond Registrar. Notwithstanding the foregoing, for as long as the Bonds are registered in the name of DTC or its nominee, payment of principal of and interest on the Bonds shall be made in the manner set forth in the Letter of Representations. Section 6. Redemption Provisions and Open Market Purchase of Bonds. Bonds maturing in the years [2007 through 2017], inclusive, shall be issued without the right or option of the City to redeem those Bonds prior to their stated maturity dates. The City reserves the right and option to redeem the Bonds maturing on or after 1, 2018, prior to their stated maturity dates at any time on or after 1, 2017, as a whole or in part (within one or more maturities selected by the City and randomly within a maturity in such manner as the Bond Registrar shall determine), at par plus accrued interest to the date fixed for redemption. -3- 50755286.1 Packet Page 8 of 27 DRAFT DATED 11412007 All or some of the Bonds may be designated as Term Bonds by the successful bidder. If those Term Bonds are not redeemed under the optional redemption provisions set forth above or purchased in the open market under the provisions set forth below, they shall be called for redemption randomly (in such manner as the Bond Registrar shall determine) at par plus accrued interest on August 1 in accordance with the schedule set forth in the Bond Sale Resolution. If the City redeems Term Bonds under the optional redemption provisions, purchases in the open market or defeased Term Bonds, the par amount of the Term Bonds so redeemed or purchased (irrespective of their actual redemption or purchase prices) shall be credited against one or more scheduled mandatory redemption amounts for those Term Bonds. 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 at least 60 days prior to the earliest mandatory redemption date for that maturity of Term Bonds for which notice of redemption has not already been given..Portions of the principal amount of any Bond, in installments of $5,000 or any integral multiple thereof, may be redeemed. If less than all of the 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 therefor, a new Bond (or Bonds, at the option of the registered owner) of the same maturity and interest rate in any of the denominations authorized by this ordinance in the aggregate principal amount remaining unredeemed. The City further reserves the right and option to purchase any or all of the Bonds in the open market at any time at any price acceptable to the City plus accrued interest to the date of purchase. All Bonds purchased or redeemed under this section shall be canceled. Notwithstanding the foregoing, for as long as the Bonds are registered in the name of DTC or its nominee, selection of Bonds for redemption shall be in accordance with the Letter of Representations. Section 7. Notice of Redemption. The City shall cause notice of any intended redemption of Bonds to be given not less than 30 nor more than 60 days prior to the date fixed for redemption by first-class mail, postage prepaid, to the registered owner of any Bond to be redeemed at the address appearing on the Bond Register at the time the Bond Registrar prepares the notice, and the requirements of this sentence shall be deemed to have been fulfilled when notice has been mailed as so provided, whether or not it is actually received by the owner of any Bond. Interest on Bonds called for redemption shall cease to accrue on the date fixed for redemption unless the Bond or Bonds called are not redeemed when presented pursuant to the call. In addition, the redemption notice shall be mailed within the same period, postage prepaid, to Moody's Investors Service, Inc., and Standard & Poor's at their offices in New York, New York, or their successors, to each NRMSIR or the MSRB and to such other persons, including registered securities depositories, if any, and with such additional information as the City Administrative Services Director shall determine, but these additional mailings shall not be a condition precedent to the redemption of Bonds. Notwithstanding the foregoing, for as long as the Bonds are registered in the name of DTC or its nominee, notice of redemption shall be given in accordance with the Letter of Representations. ME 50755286.1 Packet Page 9 of 27 DRAFT DATED 11412007 Section 8. Failure To Redeem Bonds. If any Bond is not redeemed when properly presented at its maturity or call date, the City shall be obligated to pay interest on that Bond at the same rate provided in the Bond from and after its maturity or call date 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 redemption fund hereinafter created and the Bond has been called for payment by giving notice of that call to the registered owner of each of those unpaid Bonds. Section 9. Pledge of Taxes. For as long as any of the Bonds are outstanding, the City irrevocably pledges to include in its budget and levy taxes annually within the constitutional and statutory tax limitations provided by law without a vote of the electors of the City on all of the taxable property within the City in an amount sufficient, together with other money legally available and to be used therefor, to pay when due the principal of and interest on the Bonds, and the full faith, credit and resources of the City are pledged irrevocably for the annual levy and collection of those taxes and the prompt payment of that principal and interest. The proceeds of real estate excise taxes imposed by Ordinance are pledged, as necessary, to the payment of that portion of the Bonds allocated to the Anderson Center seismic upgrades. [[Optional: Add Pledge of Water/Sewer Revenues.]] Section 10. Form and Execution of Bonds. The Bonds shall be printed or lithographed on good bond paper in a form consistent with the provisions of this ordinance and state law and shall be signed by the Mayor and 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. Only Bonds bearing a Certificate of Authentication in 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, Limited Tax General Obligation Bonds, 2007, described in the Bond Ordinance. WASHINGTON STATE FISCAL AGENT Bond Registrar By Authorized Signer 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. If any officer whose facsimile signature appears on the Bonds ceases to be an officer of the City authorized to sign bonds before the Bonds bearing his or her facsimile signature are authenticated or delivered by the Bond Registrar or issued by the City, those Bonds 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 -5- 50755286.1 Packet Page 10 of 27 DRAFT DATED 11412007 who, on the actual date of signing of the Bond, is an officer of the City authorized to sign bonds, although he or she did not hold the required office on the date of issuance of the Bonds. Section 11. 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 City Ordinance No. 2451 establishing a system of registration for the City's bonds and obligations. The Bond Registrar shall be responsible for its representations contained in the Bond Registrar's Certificate of Authentication on the Bonds. The Bond Registrar may become the owner of Bonds 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 Bond owners. Section 12. Preservation of Tax Exemption for Interest on Bonds. The City covenants that it will take all actions necessary to prevent interest on the 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 or other funds of the City treated as proceeds of the Bonds at any time during the term of the Bonds which will cause interest on the 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 requirement of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), is applicable to the Bonds, take all actions necessary to comply (or to be treated as having complied) with that requirement in connection with the Bonds, including the calculation and payment of any penalties that the City has elected to pay as an alternative to calculating rebatable arbitrage, and the payment of any other penalties if required under Section 148 of the Code to prevent interest on the Bonds from being included in gross income for federal income tax purposes. Section 13. Designation of Bonds as "Qualified Tax -Exempt Obligations." The City has determined and certifies that (a) the Bonds are not "private activity bonds" within the meaning of Section 141 of the Code; (b) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) which 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 Bonds are issued will not exceed $10,000,000; and (c) the amount of tax-exempt obligations, including the 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 Bonds are issued does not exceed $10,000,000. The City designates the Bonds as "qualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the Code. Section 14. Refunding or Defeasance of the Bonds. The City may issue refunding bonds pursuant to the laws of the State of Washington or use money available from any other Son 50755286.1 Packet Page 11 of 27 DRAFT DATED 11412007 lawful source to pay when due the principal of and interest on the Bonds, or any portion thereof included in a refunding or defeasance plan, and to redeem and retire, refund or defease all such then -outstanding Bonds (hereinafter collectively called the "defeased Bonds") and to pay the costs of the refunding or defeasance. If money and/or "government obligations" (as defined in chapter 39.53 RCW, as now or hereafter amended) maturing at a time or times and bearing interest in amounts (together with money, if necessary) sufficient to redeem and retire, refund or defease the defeased Bonds in accordance with their terms are set aside in a special trust fund or escrow account irrevocably pledged to that redemption, retirement or defeasance of defeased Bonds (hereinafter called the "trust account"), 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. The owners of defeased Bonds shall have the right to receive payment of the principal of and interest on the defeased Bonds from the trust account. The City shall include in the refunding or defeasance plan such provisions as the City deems necessary for the random selection of any defeased Bonds that constitute less than all of a particular maturity of the Bonds, for notice of the defeasance to be given to the owners of the defeased Bonds and to such other persons as the City shall determine, and for any required replacement of Bond certificates for defeased Bonds. The defeased Bonds shall be deemed no longer outstanding, and the City may apply any money in any other fund or account established for the payment or redemption of the defeased Bonds to any lawful purposes as it shall determine. If the Bonds are registered in the name of DTC or its nominee, notice of any defeasance of Bonds shall be given to DTC in the manner prescribed in the Letter of Representations for notices of redemption of Bonds. Section 15. Bond Fund and Deposit of Bond Proceeds. There is created and established in the office of the City Finance Director a special fund designated as the Limited Tax General Obligation Bond Fund, 2007 (the "Bond Fund"), for the purpose of paying principal of and interest on the Bonds. Accrued interest on the Bonds, if any, received from the sale and delivery of the Bonds shall be paid into the Bond Fund. All taxes collected for and allocated to the payment of the principal of and interest on the Bonds shall be deposited in the Bond Fund. There also is created and established in the office of the City Finance Director a special fund or funds designated as the [ ] (the "Construction Fund[s]"). The principal proceeds and premium, if any, received from the sale and delivery of the Bonds shall be paid into the Construction Fund and used for the purposes specified in Section 2 of this ordinance. Until needed to pay the costs of the Project and costs of issuance of the Bonds, the City may invest principal proceeds temporarily in any legal investment, and the investment earnings may be retained in the Construction Fund and be spent for the purposes of that fund except that earnings subject to a federal tax or rebate requirement may be withdrawn from the Construction Fund and used for those tax or rebate purposes. Section 16. Provision for Sale of Bonds and Notice of Sale. The Bonds shall be offered for sale at competitive bid. The Administrative Services Director is authorized to fix a date and time of sale of the Bonds, to give notice of the sale, to determine the bid requirements and the criteria for determining the best bidder, and to specify such other matters as she may determine necessary to carry out the sale of the Bonds, so long as the manner and terms of the -7- 50755286.1 Packet Page 12 of 27 DRAFT DATED 11412007 sale thereof are consistent with this ordinance. The Administrative Services Director may, at his discretion, provide for the use of an electronic bidding mechanism in connection with the bidding for the sale of the Bonds. The City reserves the right to waive any irregularity in any bid or in the bidding process. The final terms of the Bonds shall be confirmed by the Bond Sale Resolution. CUSIP numbers will be printed on the Bonds if requested in the bid of the successful bidder, but neither failure to print CUSIP numbers on any Bond nor error with respect thereto shall constitute cause for a failure or refusal by the successful bidder to accept delivery of and pay for the Bonds in accordance with its bid. All expenses in relation to the printing of CUSIP numbers on the Bonds shall be paid by the City, but the fee of the CUSIP Service Bureau for the assignment of those numbers shall be the responsibility of and shall be paid by the successful bidder. If, prior to the delivery of the Bonds, interest on the Bonds receivable by the owners thereof becomes includable in gross income for federal income tax purposes, or becomes subject to federal income tax except as described in the official statement, the successful bidder, at its option, may be relieved of its obligation to purchase the Bonds, and in such case the deposit accompanying its bid will be returned, without interest. The City will cause the Bonds to be printed, lithographed or typed and signed and will furnish the approving legal opinion of Foster Pepper PLLC, bond counsel of Seattle, Washington, regarding the Bonds without cost to the purchaser. The Bonds will be delivered to the successful bidder in Seattle, Washington, within 30 days after the sale date and immediately upon payment to the City of the purchase price in immediately available federal funds in Seattle, Washington, at the City's expense, or at another time or place upon which the Administrative Services Director and the successful bidder may agree at the successful bidder's expense. Section 17. Preliminary Official Statement Deemed Final. The City Council has been provided with copies of a preliminary official statement dated , 2007 (the "Preliminary Official Statement"), prepared in connection with the sale of the Bonds. For the sole purpose of the Bond purchaser's compliance with Securities and Exchange Commission Rule 15c2-12(b)(1), the City "deems final" that Preliminary Official Statement as of its date, except for the omission of information as to offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, maturity dates, options of redemption, delivery dates, ratings and other terms of the Bonds dependent on such matters. Section 18. Undertaking to Provide Continuing Disclosure. To meet the requirements of United States Securities and Exchange Commission ("SEC") Rule 15c2-12(b)(5) (the "Rule"), as applicable to a participating underwriter for the Bonds, the City makes the following written undertaking (the "Undertaking") for the benefit of holders of the Bonds: (a) Undertaking to Provide Annual Financial Information and Notice of Material Events. The City undertakes to provide or cause to be provided, either directly or through a designated agent: IN 50755286.1 Packet Page 13 of 27 DRAFT DATED 11412007 (i) To each nationally recognized municipal securities information repository designated by the SEC in accordance with the Rule ("NRMSIR") and to a state information depository, if any, established in the State of Washington (the "SID") 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) To each NRMSIR or the Municipal Securities Rulemaking Board ("MSRB"), and to the SID, timely notice of the occurrence of any of the following events with respect to the Bonds, if material: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (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 or events affecting the tax-exempt status of the Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond calls (other than scheduled mandatory redemptions of Term Bonds); (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds; and (11) rating changes; and (iii) To each NRMSIR or to the MSRB, and to the SID, timely notice of a failure by the City to provide required annual financial information on or before the date specified in subsection (b) of this section. (b) Type of Annual Financial Information Undertaken to be Provided. The annual financial information that the City undertakes to provide in subsection (a) of this section: (i) Shall consist of (1) annual financial statements prepared (except as noted in the financial statements) in accordance with applicable generally accepted accounting principles applicable to governmental units, as such principles may be changed from time to time and as permitted by State law, 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) a statement of authorized, issued and outstanding general obligation debt of the City; (3) the assessed value of the property within the City subject to ad valorem taxation; and (4) ad valorem tax levy rates and amounts and percentage of taxes collected; (ii) Shall be provided to each NRMSIR and the SID, 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, 2007; and in 50755286.1 Packet Page 14 of 27 DRAFT DATED 11412007 (iii) May be provided in a single or multiple documents, and may be incorporated by reference to other documents that have been filed with each NRMSIR and the SID, or, if the document incorporated by reference is a "final official statement" with respect to other obligations of the City, that has been filed with the MSRB. (c) Amendment of Undertaking. The 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, NRMSIR, the SID or the MSRB, under the circumstances and in the manner permitted by the Rule. The City will give notice to each NRMSIR or the MSRB, and the SID, 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. The Undertaking evidenced by this section shall inure to the benefit of the City and any holder of Bonds, 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 the Rule 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 nationally recognized bond counsel or other counsel familiar with federal securities laws delivered to the City, and the City provides timely notice of such termination to each NRMSIR or the MSRB and the SID. (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 such actions as that holder deems necessary, including seeking an order of specific performance from an appropriate court, to compel the City or other obligated person to comply with the Undertaking. (g) Designation of Official Responsible to Administer Undertaking. The Administrative Services Director of the City (or such other officer of the City who may in the future perform the duties of that office) or his or her designee is authorized and directed in his or her discretion to take such further actions as may be necessary, appropriate or convenient to carry out the Undertaking of the City in -10- 50755286.1 Packet Page 15 of 27 DRAFT DATED 11412007 respect of the Bonds set forth in this section and in accordance with the Rule, 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 with respect to the Bonds, and, if material, preparing and disseminating notice of its occurrence; (iii) Determining whether any person other than the City is an "obligated person" within the meaning of the Rule with respect to the Bonds, and obtaining from such person an undertaking to provide any annual financial information and notice of material events for that person in accordance with the Rule; (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. (h) Centralized Dissemination Agent. To the extent authorized by the SEC, the City may satisfy the Undertaking by transmitting the required filings using http://www.disclosureusa.org (or such other centralized dissemination agent as may be approved by the SEC). -11- 50755286.1 Packet Page 16 of 27 DRAFT DATED 11412007 Section 19. 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. PASSED by the City Council and APPROVED by the Mayor of the City of Edmonds, Washington, at a regular open public meeting thereof, this day of January, 2007. ATTEST: City Clerk FOSTER PEPPER PLLC Bond Counsel Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Mayor -12- 50755286.1 Packet Page 17 of 27 DRAFT DATED 11412007 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. (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 , 2007, as that ordinance appears on the minute book of the City; and the Ordinance will be in full force and effect five days after publication in the City's official newspaper; and 2. A quorum of the members of the City Council was present throughout the meeting and a majority of those members present voted in the proper manner for the passage of the Ordinance. IN WITNESS WHEREOF, I have hereunto set my hand this day of 2007. CITY OF EDMONDS, WASHINGTON City Clerk 50755286.1 Packet Page 18 of 27 AM-789 2. B. Utility Code Update City Council Committees Date: 01/09/2007 Submitted By: Kathleen Junglov, Administrative Services Time: 10 Minutes Department: Administrative Services Type: Action Committee: Finance Agenda Memo Subiect Title Utility Code Update. Recommendation from Mayor and Staff Foward attached ordinance to full Council for approval. Previous Council Action Finance Committee November 14, 2006. Narrative On November 14, 2006 Finance brought the draft update to Finance committee noting several small housekeeping items to be updated and requesting direction on three other items: 1.) Suspension of billing for vacant houses; 2.) Definition of low income; and 3.) Delinquency charges. Direction received at that time was as follows: 1.) Do not suspend billing for vacant homes. Base rate of approximately $90.00 for a two month billing cycle should be billed. This will impact approximately 50 of our 11,000 single family accounts. Additionally, the decision was made to charge customers $20.00 to turn off water at the meter, and $20.00 when water is turned back on. 2.) Keep current definition of low income, however make certain procedural changes that #1) simplifies process for applicants, and #2) reduces staff time in administering the program. 3.) Begin charging delinquency charges on all accounts. Currently storm and sewer only, and commercial accounts are not being charged delinquency charges. Most commercial accounts are in a single route and billed monthly. To enable the City to begin charging delinquency charges, these accounts will be incorporated into other routes and billed every two months. Link: Utility Code Update Ordinance Revenue & Expenditures Fiscal Impact Attachments Form Routing/Status Route Seq Inbox Approved By Date Status 1 Admin Services Sandy Chase 01/04/2007 03:54 PM APRV 2 City Clerk Sandy Chase 01/04/2007 03:54 PM APRV 3 Mayor Gary Haakenson 01/04/2007 05:45 PM APRV 4 Final Approval Sandy Chase 01/05/2007 08:54 AM APRV Form Started By: Kathleen Junglov Started On: 01/04/2007 09:26 AM Final Approval Date: 01/05/2007 Packet Page 19 of 27 service; and ORDINANCE NO. AN ORDINANCE OF THE CITY OF EDMONDS, WASHINGTON, AMENDING THE PROVISIONS OF CHAPTER 7.10 ECC ON WATER SERVICE, ECC 7.30.070 ON WATER, SEWER AND STORMWATER RATE REDUCTIONS FOR LOW INCOME CITIZENS, ECC 7.40.040 ON MONTHLY FIRE SERVICE CHARGES, REPEALING ECC 3.50.030 ON DELINQUENCY CHARGE, ADOPTING ECC 7.10.025 ON DELINQUENCY CHARGE, PROVIDING FOR SEVERABILITY, AND FIXING A TIME WHEN THE SAME SHALL BECOME EFFECTIVE. WHEREAS, City of Edmonds provides water, sewer and stormwater utility WHEREAS, procedural requirements by City water, sewer and stormwater customers for supplemental services in connection with water, sewer and stormwater utilities need to be updated; and WHEREAS, certain fees and charges related to supplemental services in connection with water, sewer and stormwater utilities need to be updated; and WHEREAS, water and sewer customers whose services are scheduled to be shut off due to delinquency should be afforded an opportunity to show that the delinquent charges have been paid; and WHEREAS, delinquency charges should apply equally to all water, sewer and stormwater accounts; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DO ORDAIN AS FOLLOWS: LAProductiondb\CCOUNCIL\0006_789_Utility Code Update Ord.DOC Packet Page 20 of 27 Page 1 of 8 repealed. Section 1. Edmonds City Code 3.050.030, Delinquency charge. is hereby Section 2. Edmonds City Code 7.10.010, Application for water use. is hereby amended to read as follows: 7.10.010 Application for water use. All applications for the use of water shall be made at the development services department by the owner, or by the owner's authorized agent, on printed forms furnished by said department for that purpose, and shall contain the name and description of the lot, block and addition. The applicant shall state the purposes for which the water is to be used and shall agree to conform to the ordinances, rules, and regulations, with modification which may be adopted, as a condition for use of water. Section 3. Edmonds City Code 7.10.020, Accounts - Payments. is hereby amended to read as follows: 7.10.020 Accounts — Payments. A. All accounts shall be kept in the name of the owner, and all charges shall be made against the property as well as the owner thereof. No change of ownership or occupancy shall affect the application of this section. All bills are payable within 25 days from the billing date. If water bills are not paid within a stated period, the water will be shut off. Water will be turned on after payment of the fees as set forth in ECC 7.10.070, in addition to the amount of delinquent charges. B. At least 10 days before water is scheduled to be shut off, the Administrative Services Director, or a designated city official, shall notify the owner and the occupant of the property. The owner shall be notified by mail at the address on the account, and the occupant shall be notified by mail, door hanger or other form at the property. Mailed notices shall be deemed received 3 business days after mailing. All notices shall contain the following: 1. Reason for water shut off; LAProductiondb\CCOUNCIL\0006_789_Utility Code Update Ord.DOC Packet Page 21 of 27 Page 2 of 8 2. Delinquent amount that needs to be paid to avert interruption in water service; 3. Instructions on scheduling a hearing to show that the account is not delinquent; and 4. The day on or after which water will be shut off. C. After notification, the owner and the occupant shall be afforded the opportunity to present to the Administrative Service Director, or a designated official, evidence that the delinquent charges have been paid. Such opportunity shall be afforded before the water is shut off, provided that the owner or the occupant make a request for the same to the Administrative Service Director, or a designated official, within 3 days of presumptive receipt of the notice. The burden shall be on the owner and or occupant to prove that the delinquent charges have been paid. D. After reviewing the evidence by the owner and or occupant, the Administrative Service Director, or the designated official to whom the evidence was presented, shall decide whether or not the account remains delinquent. The owner and the occupant shall be notified of the decision, and this decision shall not be subject to further appeal. If the account is found to be delinquent and water has not been shut off, water will be shut off as previously scheduled or 3 days after final decision, whichever date is later. If the account is not found to be delinquent and water has been shut off, water will be turned on without being subject to turn on and turn off charges in ECC 7.10.070. Section 4. A new section in Chapter 7.10 Edmonds City Code, ECC 7.10.025, Delinquency charge., is hereby adopted to read as follows: 7.10.025 Delinquency charge. A charge equal to 10 percent of the outstanding balance of the delinquent utility bill shall be added as a fee, except in cases of extraordinary hardship as determined by the administrative services director or his/her designee. The decision of the administrative services director can be appealed to the finance committee of the Edmonds city council. The account shall be considered delinquent 35 days after the sending of the regular billing. Such delinquency notice and billing will be provided 35 days following the mailing of a regular utility bill. This charge shall be applicable to all delinquent utility billing accounts. In order to be considered delinquent an account must total $21.00 or more of delinquency, and no delinquency charge shall be levied LAProductiondb\CCOUNCIL\0006_789_Utility Code Update Ord.DOC Packet Page 22 of 27 Page 3 of 8 against any delinquent account under $21.00. This delinquency charge shall be paid prior to the application of any payment against the fee or charge initially assessed and nothing herein shall be interpreted to limit the city's collection of its attorneys' fees and other reasonable costs and charges in the event it is forced to seek judicial remedy for collection. Section 5. Edmonds City Code 7.10.030, Suspension of water use - Procedure. is hereby amended to read as follows: 7.10.030 Suspension of water use — Procedure. Should a customer desire to discontinue the use of water for a period of time, notice thereof must be given to the utility billing department. The water will then be shut off and turned on again upon notice to the utility billing department. The customer shall be required to pay charges as set forth in ECC 7.10.070. Section 6. Edmonds City Code 7.10.070, Turn on and turn off charges. is hereby amended to read as follows: 7.10.070 Turn on and turn off charges. The charge for turning on or off the water other than at the main shall be $20.00 if done during regular working hours. If the water is turned on or off at any time other than during regular working hours, the charge shall be $75.00. Section 7. Edmonds City Code 7.10.080, Request for inspection of meters. is hereby amended to read as follows: 7.10.080 Request for inspection of meters. The water division, upon the request of any water user, shall inspect the water meter on the user's premises. A deposit of $20.00 shall be made with such request to cover the cost of such inspection. In the event such meter is found to be overregistering, such deposit shall be returned to the depositor; otherwise, said deposit shall be retained by the city. Section 8. Edmonds City Code 7.10.110, Charge and bill adjustments. is hereby amended to read as follows: L:\Productiondb\CCOUNCIL\0006_789_Utility Code Update Ord.DOC Packet Page 23 of 27 Page 4 of 8 7.10.110 Charge and bill adjustments. The administrative services director, or such authorized representative as he may designate, is authorized to make adjustments or corrections to billings for any charge for water service, including but not limited to connection charges, minimum monthly billings, meter charges, penalty and special charges, improperly charged rates, and, subject to the City Council's approval, the cancellation of uncollectible bills and accounts. Section 9. Subsection C of Edmonds City Code 7.30.070, Water and sewer rate reductions for low income citizens. is hereby amended to read as follows: 7.30.070 Water, sewer and stormwater rate reductions for low income citizens. A. Definitions. For the purposes of implementing water, sewer and stormwater rate reductions under the provisions of this section, the following words or phrases shall have the following definitions: 1. "Low income citizen" shall mean a person who has established Edmonds as their residence and whose total disposable income including that of his or her spouse or cotenant does not exceed the amount specified in RCW 84.36.381(5)(b) as the same exists or is hereafter amended. 2. The definition of terms such as "residence", "total disposable income", "combined disposable income", and other such terms used in this section shall be given those meanings established by RCW 84.36.383 as the same exists or is hereafter amended. In the event that any provision of the Revised Code of Washington incorporated by reference or implication in this definitional section shall be amended, such amendment shall be deemed to be incorporated within or utilized in interpretation of this section. B. Low income citizens shall be given reductions in the water, sewer and stormwater rates as those rates are established from time to time by the city council: 1. A rate reduction of 30 percent shall be afforded those low income citizens who meet the qualifying income and asset levels established by RCW 84.36.381(5)(b)(i) as the same exists or shall hereafter be amended. 2. A 50 percent rate reduction shall be afforded those low income citizens qualifying under the provisions of RCW 84.36.381 (5)(b)(ii). 3. No rate reduction shall be afforded to any person shown as a dependent on the income tax return of any other individual, whether or not such person resides at the location for which the LAProductionATCOUNCIL\0006_789_Utility Code Update Ord.DOC Packet Page 24 of 27 Page 5 of 8 rate reduction is sought, unless the total combined disposable income of the applicant, along with their spouse, cotenant and all family members shown on the income tax return in which the applicant is shown as a dependent, meets the standards established by this section. C. The administrative services director is authorized to establish an application for low income citizens rate reduction applications. The application shall be provided without cost by the utility billing division of the city and shall include such information, as may reasonably be required by the administrative services director to verify eligibility. Section 10. Subsection A of Edmonds City Code 7.40.040, Fire service monthly service charges. is hereby amended to read as follows: 7.40.040 Fire service monthly service charges. A. The monthly rates for inspection and maintenance of detector check systems are fixed as follows: Fire Service Bimonthly or Detector Service Charge Meter Size Up to 4" $12.34 6" $21.59 8" $30.81 Water used through the fire service line for fire suppression purposes and limited testing of the system will normally be furnished without any charge in addition to the bimonthly minimum charge set forth for fire service meter or detector check meter. Section 11. Severability. If any section, sentence, clause or phrase of this ordinance should be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other section, sentence, clause or phrase of this ordinance. L:\Productiondb\CCOUNCIL\0006_789_Utility Code Update Ord.DOC Packet Page 25 of 27 Page 6 of 8 Section 12. Effective Date. This ordinance, constituting administrative acts of the City Council, is not subject to referendum and shall take effect five (5) days after passage and publication of an approved summary thereof consisting of the title. APPROVED: MAYOR GARY HAAKENSON ATTEST/AUTHENTICATED: CITY CLERK, SANDRA S. CHASE APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY: M. W. SCOTT SNYDER FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: PUBLISHED: EFFECTIVE DATE: ORDINANCE NO. LAProductiondb\CCOUNCIL\0006_789_Utility Code Update Ord.DOC Packet Page 26 of 27 Page 7 of 8 SUMMARY OF ORDINANCE NO. of the City of Edmonds, Washington On the day of , 2007, the City Council of the City of Edmonds, passed Ordinance No. A summary of the content of said ordinance, consisting of the title, provides as follows: AN ORDINANCE OF THE CITY OF EDMONDS, WASHINGTON, AMENDING THE PROVISIONS OF CHAPTER 7.10 ECC ON WATER SERVICE, ECC 7.30.070 ON WATER, SEWER AND STORMWATER RATE REDUCTIONS FOR LOW INCOME CITIZENS, ECC 7.40.040 ON MONTHLY FIRE SERVICE CHARGES, REPEALING ECC 3.50.030 ON DELINQUENCY CHARGE, ADOPTING ECC 7.10.025 ON DELINQUENCY CHARGE, PROVIDING FOR SEVERABILITY, AND FIXING A TIME WHEN THE SAME SHALL BECOME EFFECTIVE. The full text of this Ordinance will be mailed upon request. DATED this day of 12007. CITY CLERK, SANDRA S. CHASE {BFP649322.DOC;1/00006.900030/}- 8 - Packet Page 27 of 27