HomeMy WebLinkAbout1991-3380 Second Lien Water and Sewer Revenue Bonds ORDINANCE N63 38 0
AN ORDINANCE of the City of Yakima, Washington,
authorizing the issuance and sale of water and sewer
reverue bonds of the City in the aggregate principal
amount of not to exceed $8,000,000 for the purpose
of broviding a portion of the funds necessary to
re`und certain outstanding obligations of the City
and to acquire, construct and install certain
additions and improvements to the combined water and
sewerage system of the City; fixing the date, form,
terms, maturities covenants and conditions under
which the bonds s.i be issued; providing for the
disposition of the proceeds thereof including the
purchase of certain obligations from such proceeds;
providing for the redemption of certain outstanding
bonds; and establishing certain funds and accounts.
WHEREAS, the City of Yakima, Washington (the "City ") now owns,
operates and maintains a water supply and distribution system and
a sewerage collection and disposal system, and said water and
sewerage systems ha e been combined in the manner provided by law;
and
WHEREAS, the City has heretofore issued its Water and Sewer
Revenue Bonds, 1964, pursuant to Ordinance No. 475 (the "1964
Bonds "), its Water and Sewer Revenue Bonds, Series 1968B, pursuant
to Ordinance No. 1071 (the "1968B Bonds ") and its Water and Sewer
Revenue Bonds, Series 1978, pursuant to Ordinance No. 2231 (the
"1978 Bonds ") and its Water and Sewer Revenue Bonds, 1983, pursuant
to Ordinance No. 2677 (the "1983 Bonds ") (the Outstanding bonds of
each such series are hereinafter referred to collectively as the
"First Lien Parity Bonds ").
WHEREAS, the City now has outstanding its 1983 Bonds in the
aggregate principal amount of $3,235,000, which 1983 Bonds mature
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on March 1 in each of the following years in the following amounts
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and bear interest as follows:
Interest
Maturity Years Amounts Rates
1992 $150,000 8.25
1993 165,000 8.50
1994 185,000 8.75
1995 200,000 9.00
1996 220,000 9.15
1997 245,000 9.30
1998 270,000 9.40
1999 295,000 9.50
2000 325,000 9.60
2001 355,000 9.70
2002 395,000 9.70
2003 430,000 9.70
and
WHEREAS, the proceedings of the City authorizing the issuance
of the 1983 Bonds provide that the City may call the 1983 Bonds
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maturing on and after March 1, 1994 for redemption on March 1,
1993, at a redemption price of 102% of the principal amount
thereof plus accrued interest to the date of redemption; and
WHEREAS, after due consideration it appears that the 1983
Bonds maturing in the years 1994 through 2003 and aggregating
$2,920,000 in principal amount (the "Refunded Bonds ") may be
refunded by the issuance and sale of the revenue bonds of the City
authorized herein so that a substantial savings to the City and its
citizens will be effected by the issuance of such bonds and the
payment and redemption of the Refunded Bonds on March 1, 1993; and
WHEREAS, in order to effect such refunding in the manner that
will be most advantageous to the City and its citizens, it is
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hereby found necessary and advisable that certain "Acquired
Obligations," bearing interest and maturing at such time or times
as necessary to pay the principal of and interest on the 1983 Bonds
as the same shall become due and to so pay and redeem the Refunded
Bonds, be purchased out of the proceeds of sale of the bonds
authorized herein; and
WHEREAS, it has been found necessary and advisable that the
City make certain additions and betterments to its water and sewer
system (the "Project "); and
WHEREAS, it was provided in each of the ordinances authorizing
the issuance of the First Lien Parity Bonds that additional water
and sewer revenue bonds may be issued by the City with a lien and
• charge in the Gross Revenues of the System junior or inferior to
the payments required to be made on the First Lien Parity Bonds
payable; and
WHEREAS, in order to provide the funds necessary to refund
the Refunded Bonds and to complete the Project, it is deemed
necessary and advisable that the City issue its Second Lien Water
and Sewer Revenue and Refunding Bonds, Series 1991, in the
aggregate principal amount of not to exceed $8,000,000 (the "1991
Bonds "), such 1991 Bonds to be payable from Gross Revenues of the
System, after all required payments for Costs of Maintenance and
Operation and the First Lien Parity Bonds have been made or duly
provided for;
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the of Yakima
NOW, THEREFORE, BE IT ORDAINED BY th City ,
Washington, as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. As used in this ordinance:
"Accreted Value" means with respect to any Capital Appre-
ciation Bonds (A) as of any Valuation Date, the amount set forth
for such date in any ordinance authorizing such Capital
Appreciation Bonds and (B) as of any date other than a Valuation
Date, the sum of (1) the Accreted Value on the preceding Valuation
Date and (2) the product of (a) a fraction, the numerator of which
is the number of days having elapsed from the preceding Valuation
Date and the denominator of which is the number of days from such
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preceding Valuation Date to the next succeeding Valuation Date,
calculated based on the assumption that Accreted Value accrues
during any semiannual period in equal daily amounts on the basis'
of a year of twelve thirty -day months, times (b) the difference
between the Accreted Values for such Valuation Dates.
"Acquired Obligations" means the investments now or hereafter
acquired by the City to effect the refunding of the Refunded Bonds.
"Additional Bonds" means any revenue bonds, revenue warrants
or other revenue obligations which may be issued in the future on
a parity of lien with the 1991 Bonds and any other Second Lien
Parity Bonds.
"Annual Debt Service" means for any specified Fiscal Year:
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(1) with respect to any Outstanding Second Lien Parity Bonds,
the amounts required to be deposited during that period in the Bond
Fund (excluding Reserve Account therein;
(2) with respect to any Outstanding Capital Appreciation
Bonds, the principal amount thereof shall be equal to the Accreted
Value thereof maturing or scheduled for payment in such period, and
no other interest shall be included;
(3) with respect to any Outstanding Fixed Rate Bonds, an
amount equal to (A) the principal amount of such Fixed Rate Bonds
due or subject to mandatory redemption during such period and for
which no sinking fund installments have been established, (B) the
amount of any payments required to be made during such period into
• any sinking fund established for the payment of any such Fixec: Rate
Bonds, plus (C) all interest payable during such period on any such
Fixed Rate Bonds Outstanding and with respect to Fixed Rate Bonds
with mandatory sinking fund requirements, calculated on the
assumption that mandatory sinking fund installments will be applied
to the redemption or retirement of such Fixed Rate Bonds on the
date specified in the ordinance authorizing such Fixed Rate Bonds;
and
(4) with respect to Outstanding Variable Rate Bonds, the
principal for any period and interest on such Variable Rate Bonds
during such period computed on the assumption that the amount of
Variable Rate Bonds Outstanding as of the date of such computation
would be amortized (i) in accordance with the mandatory redemption
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provisions, if any, set forth in the ordinance authorizing the •
issuance of such Variable Rate Bonds, or if mandatory redemption
provisions are not provided, during a period commencing on the date
of computation and ending on the date 30 years after the date of
issuance (ii) at an interest rate equal to the yield to maturity
set forth in the Revenue Bond Index (40 -Bond) published in the
edition of The Bond Buyer (or comparable publication or such other
similar index selected by the City in good faith) selected by the
City and published within ten days prior to the date of calculation
or, (iii) to provide for essentially level annual debt service of
principal and interest over such period; and, for the purpose of
calculating the principal and interest on Variable Rate Bonds in
any Fiscal Year, such Variable Rate Bonds shall be assumed to
mature on the stated maturity date or mandatory redemption date •
thereof.
"Arbitrage Rebate and Investment Accounting Certificate" means
the certificate executed by the Director of Finance and Budget of
the City setting forth the methodology for computation of Rebatable
Arbitrage.
"Assessment Income" means the principal of and interest on
special assessments levied in any local improvement district or
utility local improvement district which are pledged to be paid
into the Bond Fund. In the case of assessments payable in
installments, Assessment Income shall be allocated to the years in
which it would be received if the unpaid balance of each assessment
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roll were paid in the remaining number of installments with
interest on the declining balance at the times and at the rate
provided in the ordinance confirming the assessment roll.
"Assessments" means any special assessments which may be
levied in any local improvement district or utility local
improvement district of the City created for the acquisition,
construction or installation of additions and improvements to or
extensions of the System, including any installment of assessments
and any interest or penalties which may be due thereon, if such
assessments are pledged to be paid into the Bond Fund. The word
"Assessments" shall include any installments of assessments and any
interest or penalties which may be due thereon.
• "Average Annual Debt Service" means the amount determined by
dividing (a) the sum of all interest and principal to be paid on
outstanding Bonds from the date of determination to the last
maturity date of such Bonds, by (b) the number of Fiscal Years or
calendar years from and including the Fiscal Year or calendar year
in which the determination is made to the last Fiscal Year or
calendar year in which the sum of (i) the principal amount of
Serial Bonds maturing in such Fiscal Year plus (ii) the Sinking
Fund Requirement for such Fiscal Year, exceeds 4% of the principal
amount of Bonds outstanding as of the date of determination.
"Bond Counsel" means an attorney at law or a firm of
attorneys, selected by the City, or nationally recognized standing
in matters pertaining to bonds issued by states and their political
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subdivisions, duly admitted to the practice of law before the •�
highest court of any state of the United States of America.
"Bond Fund" means the Second Lien Water and Sewer Revenue Bond
Fund created by Section 5.2 of this ordinance.
"Bond Registrar" means the fiscal agency of the State of
Washington in either Seattle, Washington, or New York, New York,
for the purposes of registering and authenticating the Bonds,
maintaining the Bond Register, effecting transfer of ownership of
the Bonds and paying interest on and principal of the Bonds.
"Bond Year" means each one -year period, or less from the date
of closing, that ends at the close of business on December 31.
"Bonds" means the 1991 Bonds, all other Second Lien Parity
Bonds and all First Lien Parity Bonds.
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"Capital Appreciation Bonds" means any Second Lien Parity
Bonds hereafter issued as to which interest is payable only at the
maturity or prior redemption of such Bonds. For the purposes of
(i) receiving payment of the redemption price, if any, of a Capital
Appreciation Bond that is redeemed prior to maturity, or
(ii) computing the principal amount of Second Lien Parity Bonds
held by the owner of a Capital Appreciation Bond in giving to the
City or the Paying Agent any notice, consent, request, or demand
for any purpose whatsoever, the principal amount of a Capital
Appreciation Bond shall be deemed to be its Accreted Value.
"Capital Fund" means the heretofore created Wastewater
Facility Capital Fund of the City.
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"City" means the City of Yakima, Washington, a municipal
corporation duly organized and existing under and by virtue of the
laws of the State of Washington.
"Closing" means the delivery of any 1991 Bonds to, and payment
of the purchase price therefor by, the initial purchasers of any
1991 Bonds.
"Code" means the Internal Revenue Code of 1986, as amended,
as the same may be amended from time to time, and the regulations
promulgated thereunder.
"Computation Date" means the Installment Computation Date or
the Final Computation Date.
"Costs of Maintenance and Operation" means all normal
• operating expenses, current maintenance expenses, expenses of
reasonable upkeep and repairs, insurance and administrative
expenses and reasonable pro -rata bu::get charges for services
provided to the System by City departments, but excludes
depreciation, payments for debt service or into reserve accounts,
costs of capital additions to or replacements of the System,
municipal taxes, or payments to the City in lieu of taxes.
"Council" means the legislative body of the City as the same
shall be duly and regularly constituted from time to time.
"Coverage Requirement" means (a) for any period during which
Assessments may be paid without becoming delinquent, the sum of
(i) the product of Average Annual Debt Service on all Second Lien
Parity Bonds then outstanding times a fraction, the numerator of
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which is the aggregate principal amount of nondelinquent 1111'
Assessments which remain to be paid into the Bond Fund plus the
principal amount of Assessments previously paid into and then on
hand in the Bond Fund, and the denominator of which is the
aggregate principal amount of Second Lien Parity Bonds then
Outstanding, plus (ii) 1.40 times the product of Average Annual
Debt Service on all Second Lien Parity Bonds then Outstanding times
the difference of one minus the fraction calculated pursuant to
(i) above; or (b) for any other period, the product of 1.40 times
Average Annual Debt Service on all Second Lien Parity Bonds then
Outstanding.
"Escrow Agreement" .means the Escrow Agreement dated as of
August 1, 1991 between the City and the Refunding Agent.
"Final Computation Date" means the date that the last 1991 4111
Bond is discharged. A 1991 Bond is discharged on the date that all
amounts due under the terms of the 1991 Bond are actually and
unconditionally due if cash is available at the place of payment
and no interest accrues with respect to the 1991 Bond after such
date.
"First Lien Parity Bonds" means the following Outstanding
Bonds:
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•
Amount Authorizing
Series or Issues Date of Issue Outstanding Ordinance
Water and Sewer
Revenue Bonds,
1964 1, 1964 $285,000 475
Water and Sewer
Revenue Bonds,
1968 Series B December 1, 1968 $2,535,000 1071
Water and Sewer
Revenue Bonds,
1978 December 1, 1978 $3,500,000 2231
Water and Sewer
Revenue Bonds,
1983 March 1, 1983 $3,235,000 2677
The First Lien Parity Bonds are the only revenue bonds of the City
Outstanding at this time to which any part of the Gross Revenues
of the System have been pledged for the payment of the principal
• thereof and interest thereon.
"First Lien Revenue Bond Fund" means, collectively, the "Water
and Sewer Revenue Bond Fund, 1964," created by Ordinance No. 475
of the City, the "Water and Sewer Revenue Bond Fund, 1968," created
by Ordinance No. 986 of the City, the "Water and Sewer Revenue Bond
Fund, 1978," created by Ordinance No. 2231 of the City and the
"Water and Sewer Revenue Bond Fund, 1983" created by Ordinance
No. 2677 of the City, and shall include the "Reserve Account" in
the 1964 Revenue Bond Fund, the "Reserve Account" in the 1968
Revenue Bond Fund, the "Reserve Account" in the 1978 Revenue Bond
Fund and the "Reserve Account" in the 1983 Revenue Bond Fund.
•
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" " Fiscal Year used by the City at an
Fiscal Year" means the Fi y y any
time. At the time of the adoption of this ordinance, the Fiscal
Year is the twelve -month period beginning January 1 of each year.
"Fixed Rate Bonds" means those Second Lien Parity Bonds other
than Capital Appreciation Bonds issued under an ordinance in which
the rate of interest on such Fixed Rate Bonds is fixed and
determinable through their final maturity or for a specified period
of time. If so provided in the ordinance authorizing their
issuance, Fixed Rate Bonds may bear a fixed and determinable
interest rate for only a portion of their term.
"Government Obligations" means direct obligations of, or
obligations the principal of and interest on which are uncondi-
tionally guaranteed by, the United States Government.
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"Gross Revenues" means all earnings, revenue and moneys
received by the City from or on account of the operations of the
System, from any source whatsoever.
"Interest Commencement Date" means, with respect to any
Capital Appreciation Bonds, the date specified in any ordinance
authorizing such Capital Appreciation Bonds (which date must be
prior to the maturity date for such Capital Appreciation Bonds)
after which interest accruing on such Capital Appreciation Bonds
shall be payable semiannually, with the first such payment date
being the applicable interest payment date immediately succeeding
such Interest Commencement Date.
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•
"Installment Computation Date" means the last day of the fifth
Bond Year and of each succeeding fifth Bond Year.
"Maximum Interest Rate" means, with respect to any particular
Variable Rate Bond, a numerical rate of interest, which shall be
set forth in any ordinance authorizing such Bond, that shall be the
maximum rate of interest such Bond may at any time bear.
"Net Revenues" means the Gross Revenues of the System less the
Costs of Maintenance and Operation.
"1983 Bonds" means the Water and Sewer Revenue Bonds, Series
1983, of the City issued under date of March 1, 1983 pursuant to
Ordinance No. 2677, and presently Outstanding in the aggregate
principal amount of $3,235,000.
• "1991 Advance Refunding Fund" means the fund created by
Section 5.4 hereof.
"1991 Bonds" means the City of Yakima Second Lien Water and
Sewer Revenue Bonds, 1991, in the aggregate principal amount of not
to exceed $8,000,000 authorized by this ordinance, in the form
contained in Exhibit A hereto.
"Nonpurpose Payments" means, in general, any payment with
respect to an investment allocated to the 1991 Bonds. The
following types of payments are specifically included:
(a) Direct Payments. The amount of gross proceeds of
the 1991 Bonds directly used to purchase the investment.
Direct payments do not include brokerage commissions,
administrative expenses or similar expenses.
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(b) Constructive Payments. The fair market value (as 411'
of the date of allocation to the 1991 Bonds) of any investment
that was not directly purchased with gross proceeds of the
1991 Bonds, but which is allocated to the 1991 Bonds.
(c) Payments of Rebatable Arbitrage. Any payment of
Rebatable Arbitrage if such payment is made no later than the
due date for such payment.
"Nonpurpose Receipts" means, in general, any receipt with
respect to an investment allocated to the 1991 Bonds. The
following types of receipts are specifically included:
(a) Actual Receipts. Any amount actually or
constructively received with respect to an investment. Actual
receipts may not be reduced by selling commissions,
administrative expenses or similar expenses.
(b) Disposition Receipts. An amount determined by
treating an investment that ceases to be allocated to the
Bonds (other than by reason of a sale or retirement) as if
sold for fair market value on the date that the investment
ceases to be allocated to the 1991 Bonds.
(c) Installment Date Receipts. The fair market value
(or, for fixed rate investments, present value) of all
investments allocated to the 1991 Bonds at the close of
business on any Computation Date.
(d) Imputed Receipts. Any receipts that are required
to be imputed and taken into account pursuant to Section
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•
1.148 -5T of the Temporary Income Tax Regulations or any
successor Temporary or Final Income Tax Regulations.
"Outstanding" means, in connection with any of the Bonds, as
of the time in question, all Bonds issued except (a) Bonds
theretofore paid and cancelled or having matured or been called for
redemption, payment has been provided therefor, or Bonds which have
been defeased in accordance with their authorizing ordinance and
state law.
"Payinc Agent" means the designated fiscal agencies of the
State of Washington or any bank or banks designated a paying agent
by the City.
"Permitted Investments" means the following to the extent the
111 same are legal for investments of funds of the City: (a) any bonds
or other obligations which as to principal and interest constitute
direct obligations of, or are unconditionally guaranteed by, the
United States, including obligations of any of the federal agencies
set forth in clause (b) below to the extent unconditionally
guaranteed by the United States; (b) obligations of the E;port-
Import Bank of the United States, the Government National Mortgage
Association, the Federal National Mortgage Association to the
extent guaranteed by the Government National Mortgage Association,
the Federal Financing Bank, the Farmers Home Administration, the
Federal Home Loan Bank, and the Federal Home Loan Mortgage
Association, or any agency or instrumentality of the Federal
Government which shall be established for the purposes of acquiring
•
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®
the obligations of any of the foregoing or otherwise providing
financing therefor; (c) new housing authority bonds issued by the
public agencies or municipalities and fully secured as to the
payment of both principal and interest by a pledge of annual
contributions under an annual contributions contract or contracts
with the United States; or project notes issued by public agencies
or municipalities and fully secured as to the payment of both
principal and interest by a requisition or payment agreement with
the United States; (d) direct and general obligations of any state
within the United States, to the payment of the principal of and
interest on which the full faith and credit of such state is
pledged, provided, that at the time of their purchase, such
obligations are rated in one of the two highest rating categories
411
by Moody's Investors Service, Inc. and Standard & Poor's
Corporation; (e) certificates of deposit, whether negotiable or
nonnegotiable, issued by any bank, savings and loan association,
or trust company, provided that such certificates of deposit shall
be (i) continuously and fully insured by the Federal Deposit
Insurance Corporation or the Federal Savings and Loan Insurance
Corporation, or (ii) issued by a recognized qualified public
depositary of the State of Washington under RCW Chapter 39.58, as
amended, or (iii) continuously and fully secured by such securities
as are described above in clauses (a) or (b), which shall have a
market value (exclusive of accrued interest) at all times at least
equal to the principal amount of such certificates of deposit;
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(f) any repurchase agreement with any bank or trust company
organized under the laws of any state of the United States or any
national banking association, which is secured by such securities
as described in clauses (a) or ( b) above in the possession or
custody of the City, its agent or Trustee and in which the City,
its agent or Trustee has a first perfected security interest free
and clear of all rights of third parties, and which has a market
value determined monthly equal to 100% of the face amount of the
repurchase agreement; (g) Refunded Municipals; and (h) any other
investments or investment agreements permitted under the laws of
the State of Washington as amended from time to time.
"Plan Resolution" means Resolution No. D -5529 of the City.
111 "Professional Utility Consultant" means the independent
person(s) or firm(s) selected by the City having a favorable
reputation for skill and experience with facilities of comparable
size and character to the System in such of the following as are
relevant to the purposes for which they are retained: (a)
engineering and operations, and (b) the design of rates.
"Project" means the planned additions and improvements of the
wastewater collec;ion, treatment System of the City described in
the Plan Resolution
"Qualified Insurance" means any noncancellable municipal bond
insurance policy or surety bond issued by any insurance company
licensed to conduct an insurance business in any state of the
United States (or by a service corporation acting on behalf of one
•
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41,
or more such insurance companies) which insurance company or
companies, as of the time of issuance of such policy or surety
bond, are currently rated in the highest rating category by Moody's
Investors Service, Inc. or Standard & Poor's Corporation or their
comparably recognized business successors.
"Qualified Letter of Credit" means any irrevocable letter of
credit issued for the account of the City on behalf of the owners
of the Bonds, by an institution that maintains an office, agency
or branch in the United States and as of the time of issuance of
such letter of credit is currently rated in the highest rating
category by Moody's Investors Service, Inc. or Standard & Poor's
Corporation or their comparably recognized business successors.
"Rating Agency" means as of any date, Moody's Investors
Service, Inc., Standard & Poor's Corporation or any other
nationally recognized securities rating agency.
"Rebatable Arbitrage" means the amount, if any, payable to
the United States pursuant to Section 6.9 hereof.
"Record Date" for any series of Second Lien Parity Bonds means
the record date or dates for such series of Second Lien Parity
Bonds established in the ordinance providing for the issuance of
such series of Second Lien Parity Bonds.
"Refunded Bonds" means 1983 Bonds maturing in the years 1994
through 2003 and aggregating $2,920,000 in principal amount.
"Refunded Municipals" means pre- refunded municipal obligations
meeting the following conditions: (i) the obligations are not
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callable prior to maturity or the trustee has been given
irrevocable instructions concerning calling and redemption;
(ii) the obligations are secured by cash or Governmental Obliga-
tions which may be applied only to interest, principal, and premium
payments of such obligations; (iii) the principal and interest of
the Governmental Obligations (plus any cash in the fund) are
sufficient to meet the liabilities of the obligations, which
sufficiency has been verified by an independent public accountant;
(iv) the Governmental Obligations serving as security for the
obligations are held by an escrow agent or a trustee; (v) the
Governmental Obligations are not available to satisfy any other
claims, including those against the trustee or escrow agent.
• "Refunding Agent" means Security Pacific Bank Washington, N.A.
"Registrar" means the registrar and authenticating agent for
the 1991 Bonds appointed pursuant to Section 3.5 hereof, its
successor or successors and any other entity that may at any time
be substituted in its place pursuant to this ordinance.
"Reserve Account" means the Reserve Account created in the
Bond Fund by Section 5.2(a)(iv) of this ordinance.
"Reserve Account Requirement" means the Average Annual Debt
Service of all Second Lien Parity Bonds Outstanding. In the case
of Variable Rate Bonds, the interest rate thereon shall be °
calculated on the assumption that such Variable Rate Bonds will
bear interest at a rate equal to the higher of (a) the rate most
recently reported by the "Bond Buyer" as the Bond Buyer's Index for
•
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411"
long -term revenue bonds or (b) a rate equal to x +y where x
represents the average rate of interest borne by such Variable Rate
Bonds in the twelve months preceding the date of calculation or in
the case of newly issued Variable Rate Bonds the initial rate of
interest borne by such Bonds and y represents one -half the
difference between the Maximum Interest Rate applicable to such
Variable Rate Bonds and x; provided that in no event shall such
assumed Variable Rate exceed the Maximum Interest Rate and provided
further that if on such date of calculation the interest rate on
such Bonds shall then be fixed to maturity, the interest rate used
for such specified period for the purpose of the foregoing
calculation shall be such actual interest rate.
"Revenue Fund" means the Water and Sewer Operating Funds of
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the City heretofore established.
"Second Lien Parity Bonds" means any Outstanding revenue
bonds, revenue warrants or other revenue obligations issued by the
City which have a lien upon the Gross Revenues of the System to pay
and secure the payment of the principal thereof and interest
thereon equal to the lien created upon the Gross Revenues of the
System to pay and secure payment of the principal of and interest
on the 1991 Bonds. "Second Lien Parity Bonds" includes the 1991
Bonds and any Additional Bonds.
"System" means the combined water and sewerage system of the
City as it now exists, as it shall be added to and improved and
extended with the proceeds of sale of the 1991 Bonds, and as it may
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be later added to, extended and improved for as long as an First
P g
Lien Parity Bonds or any Second Lien Parity Bonds remain
outstanding.
"Serial Bonds" means Second Lien Parity Bonds other than Term
Bonds.
"Sinking Fund Requirement" means, for any Fiscal Year, the
principal amount and premium, if any, of Term Bonds required to be
purchased, .redeemed or paid at maturity for such Fiscal Year as
established by the ordinance authorizing the issuance of such Term
Bonds.
"Term Bonds" means Second Lien Parity Bonds of any principal
maturity that are subject to mandatory redemption or for which
• mandatory sinking fund payments are required.
"Valuation Date" means with respect to any Capital
Appreciation Bonds the date or dates set forth in any ordinance
authorizing such Capital Appreciation Bonds on which specific
Accreted Values are assigned to the Capital Appreciation Bonds.
"Variable Interest Rate" means a variable interest rate or
rates to be borne by Second Lien Parity Bonds or any one or more
maturities within an issue of Second Lien Parity Bonds. The method
of computing such variable interest rate shall be specified in the
ordinance authorizing such Second Lien Parity Bonds. Such variable
interest rate shall be subject to a Maximum Interest Rate and there
may be an initial rate specified, in each case as provided in such
ordinance, or a stated interest rate that may be changed from time
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to ti as provided rovided in such ordinance. Such ordinance shall also
4110
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.
"Variable Rate Bonds" for any period of time means Second Lien
Parity Bonds which during such period bear a Variable Interest
Rate; provided that Second Lien Parity Bonds the interest rate on
which shall have been fixed for the remainder of the term thereof
shall no longer be Variable Rate Bonds.
Section 1.2. Interpretation. Words of the masculine gender
shall be deemed and construed to include correlative words of the
feminine and neuter genders. Words imparting the singular number
shall include the plural numbers and vice versa unless the context
shall otherwise indicate. Reference to Articles, Sections and
other subdivisions of this ordinance are to the Articles, Sections
and other subdivisions of this ordinance as originally adopted
unless expressly stated to the contrary. The headings or titles
of the Articles and Sections hereof, and the Table of Contents
appended hereto, are for convenience of reference only and shall
not define or limit the provisions hereof.
-22- ASR313 91/07/11
ARTICLE II
PLAN AND FINDINGS
Section 2.1. Plan of Additions, Imrrovements to and
Extension of the. System. The plan of additions and improvements
to and extensions of the System set forth in the Plan Resolution
is hereby ratified and confirmed.
Such additions and betterments are hereinafter referred to
collectively as the "Project." The City shall acquire, construct
and install the various parts of the Project in such order and at
such time or times as found to be necessary and advisable and shall
provide all equipment and appurtenances necessary to complete said
additions and betterments and integrate same into the existing
• facilities of the System as required to provide a fully operational
system.
The City may make such changes in the facilities or equipment
of the Project or in the construction or design of other facilities
of the System as may be found necessary or desirable, either prior
to or during the course of acquisition and construction of the
Project.
The City shall acquire by purchase, lease or condemnation,
all property, both real and personal, or any interest therein, or
rights -of -way and easements which may be found necessary to
acquire, construct and install the above - described improvements.
The list of improvements may be modified in the judgment of
the City, and implementation or completion of any specified project
•
-23- ASR313 91/07/11
shall not be required if the City determines that, due to
411P
substantially changed circumstances, it has become inadvisable or
impractical.
Nothing herein shall prevent the City from utilizing any
remaining proceeds of the 1991 Bonds or earnings from the
investment thereof for other capital improvements to the System
after all of the costs and expenses of the aforesaid improvements
have been paid or duly provided for. The estimated cost of the
Project outlined, refunding the Refunded Bonds, and the costs of
issuance of the 1991 Bonds is hereby declared to be as near as may
be determined the sum of approximately $13,400,000, of which
approximately $8,000,000 shall be provided out of the proceeds of
the 1991 Bonds. It is hereby found and declared that the Project
and the refunding of the Refunded Bonds is necessary for the
proper, efficient and economical operation of the System.
ARTICLE III
ISSUANCE OF 1991 BONDS
Section 3.1. Issuance of the City of Yakima Water and Sewer
Revenue Bonds, 1991. The City shall issue the 1991 Bonds in the
aggregate principal amount of not to exceed $8,000,000 for the
purpose of providing the funds necessary to carry out part of the
Project, to refund the Refunded Bonds, and to pay the expenses
incidental to the issuance of the 1991 Bonds.
The 1991 Bonds shall be designated the "City of Yakima Water
and Sewer Revenue Bonds, 1991," shall be dated August 1, 1991,
4 110
-24- ASR313 91/07/11
shall be in fully registered form, shall be in the denomination of
$5,000 each, shall bear interest from the later of the date thereof
or the most recent date on which interest has been paid, at the
rates per annum set forth below, payable March 1, 1992, and
semiannually thereafter on the first days of March and September,
shall be numbered, and shall mature on March 1 in the years, in the
amounts and at the interest rates as shall be determined by
resolution of the Council.
Both the principal of and interest of the 1991 Bonds shall be
payable in lawful money of the United States of America at the
office of either of the fiscal agencies of the State of Washington
in the cities of Seattle, Washington, or New York, New York. The
• 1991 Bonds shall be obligations only of the Bond Fund and shall be
payable and secured as provided herein. The 1991 Bonds shall not
be general obligations of the City.
The Director of Finance and Budget of the City is hereby
authorized to obtain insurance for the payment of principal of and
interest on the Bonds, if he should determine that it is in the
best interests of the City to do so.
Section 3.2. Execution of Bonds; Validity of Signatures
Thereon.
The 1991 Bonds shall be executed in the name of the City by
the Mayor of the City by manual or facsimile signature and a
facsimile of the seal of the City shall be imprinted or reproduced
thereon, and shall be attested by the Clerk of the City by manual
•
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or facsimile signature. The 1991 Bonds shall bear thereon a Alb
certificate of authentication executed manually by the Bond
Registrar, and only such 1991 Bonds as shall bear thereon such
certificate shall be entitled to any right or benefit under this
ordinance.
In case any of the officers who shall have signed,
countersigned, attested, registered or sealed, as the case may be,
any of the 1991 Bonds, shall die or cease to be such officer before
the 1991 Bonds so signed, countersigned, attested, registered or
sealed, as the case may be, by him or her shall have been actually
issued and delivered, such 1991 Bonds shall be valid nevertheless,
and may be issued with the same effect as though the person who
had so signed, countersigned, attested, registered or sealed such
4 110
1991 Bonds had not died or ceased to be such officer.
Section 3.3. Temporary Bonds. Any 1991 Bonds of any series
may be initially issued in temporary form exchangeable for
definitive 1991 Bonds when ready for delivery. The temporary 1991
Bonds may be printed, lithographed or typewritten, shall be of such
denominations as may be determined by the City, and may contain
such reference to any of the provisions of this ordinance as may
be appropriate. Every temporary 1991 Bond shall be executed by the
City upon the same conditions and in substantially the same manner
as the definitive 1991 Bonds. If the City issues temporary .1991
Bonds, it will execute and furnish definitive 1991 Bonds without
delay, and thereupon the temporary 1991 Bonds may be surrendered
- ASR313 91/07/11
for cancellation at the principal corporate trust office of the
Bond Registrar and the Bond Registrar shall deliver in exchange for
such temporary 1991 Bonds so surrendered an equal aggregate
principal amount of definitive Bonds of like principal amount and
in authorized denominations of the same series, maturity or
maturities, interest rate or rates. Until so exchanged, the
temporary 1991 Bonds shall be entitled to the same benefits under
this ordinance as definitive 1991 Bonds delivered under this
ordinance.
Section 3.4. CUSIP Identification Numbers. At the sole
option of the City, CUSIP identification numbers may be printed on
the 1991 Bonds, but no such number shall be deemed to be a part of
• any 1991 Bond or a part of the contract evidenced thereby, and no
liability shall attach to the City or any other officer or agent
thereof (including the Bond Registrar) because of or on account of
such CUSIP identification numbers or any use made thereof.
Section 3.5. Aripointment of Bond Registrar. The initial
Registrar for the 1991 Bonds shall be the fiscal agencies for the
State of Washington in Seattle, Washington, and New York, New York.
The Registrar may resign upon sixty (60) days' notice or may be
removed by the City and a new Registrar appointed by the City;
provided, however, that no such resignation or removal shall be
effective until a successor Registrar shall have been appointed by
the City and shall have delivered a written instrument of
acceptance of the Registrar's duties and responsibilities under
-27- ASR313 91/07/11
this ordinance of the City. In the event of the resignation or 4111
removal of the Registrar, notice of the name and address of the new
Registrar shall be mailed along with the next payment of interest
on the 1991 Bonds; or, in the event such resignation or removal
becomes effective after an interest payment date next preceding a
maturity date of the principal of any 1991 Bond, such notice shall
be furnished to the registered owners of such 1991 Bonds, to the
extent practicable, not less than fifteen (15) days prior to such
maturity date.
Section 3.6. Duties of Bond Registrar. The Registrar shall
keep, or cause to be kept, at its principal corporate trust office,
sufficient books for the registration and transfer of the 1991
Bonds which shall at all times be open to inspection by the City.
The Bond Registrar is authorized, on behalf of the City, to 411/
authenticate and deliver the 1991 Bonds transferred or exchanged
in accordance with the provisions of such 1991 Bonds and this
ordinance and to carry out all of the Bond Registrar's powers and
duties under this ordinance. The Bond Registrar shall be
responsible for its representations contained in the Certificate
of Authentication on the 1991 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 depositary for and permit any of its officers or directors to
act as a member of, or in any other capacity with respect to, any
4 10
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410
committee formed to protect the rights of Registered Owners of the
m i p g g
1991 Bonds.
Only such 1991 Bonds as shall bear thereon a Certificate of
Authentication in the form herein recited, manually executed by
the Bond Registrar, shall be valid or obligatory for any purpose
or entitled to the benefits of this ordinance. Such Certificate
of Authentication shall be conclusive evident that the 1991 Bonds
so authenticated have been duly executed, authenticated and
delivered hereunder and are entitled to the benefits of this
ordinance.
Section 3.7. Registration Books. At all times during which
any 1991 Bond remains Outstanding, the Registrar appointed pursuant
to Section 4.2 hereof shall keep or cause to be kept at its
principal office books for the registration and transfer of 1991
Bonds. The Registrar is hereby appointed as principal transfer
agent and registrar for all 1991 Bonds. Upon presentation at its
principal corporate trust office for such purpose, the Registrar,
under such reasonable regulations as it may prescribe, shall
register or transfer, or cause to be registered or transferred, on
the registration books, 1991 Bonds as hereinafter set forth. The
registration books shall at all times be open for inspection by
the City or its duly authorized agent or representative.
Section 3.8. Transfer of 1991 Bonds.
(a) Any 1991 Bond, may in accordance with its terms, be
transferred upon the registration books by the person in whose name
-29- ASR313 91/07/11
it is registered, in person or by his or her duly authorized agent, *-
upon surrender of such 1991 Bond to the Registrar for cancellation,
accompanied by delivery of a written instrument of transfer duly
executed by the registered owner in person or his or her duly
authorized agent, and in form satisfactory to the Registrar.
(b) Whenever any 1991 Bond shall be surrendered for
transfer, the City shall execute and the Registrar shall
authenticate and deliver, at the principal corporate trust office
of the Registrar (or send by registered mail to the new owner
thereof at his request and at his or her risk and expense), in the
name of the transferee or transferees, a new duly executed 1991
Bond or 1991 Bonds of the same series, interest rate and maturity
and for a like aggregate principal amount, dated so that there
shall result no gain or loss of interest as a result of such •
transfer. To the extent of denominations authorized in respect of
any such 1991 Bond, one such 1991 Bond may be transferred for one
or several such 1991 Bonds of the same series, interest rate,
maturity and aggregate principal amount. All transfers pursuant
to this Section 3.8 shall be made without expense to the owner of
such 1991 Bonds, except as otherwise herein provided, and except
that the Registrar shall require the payment by the owner of the
1991 Bond requesting such transfer of any tax or other governmental
charges required to be paid with respect to such transfer. All
1991 Bonds surrendered pursuant to this Section 3.8 shall be
cancelled.
4 110
-30- ASR313 91/07/11
Section 3.9. Exchange of 1991 Bonds.
(a) 1991 Bonds may be exchanged at the principal
corporate trust office of the Registrar for a like aggregate
principal amount of 1991 Bonds in other authorized principal
0
amounts of the same series, interest rate and maturity, and the
City shall execute and the Registrar shall authenticate the 1991
Bonds to be delivered upon such exchange and shall deliver the same
at the principal corporate trust office of the Registrar or send
the same by registered mail to the owner thereof at his or her
request and at his or her risk and expense. All 1991 Bonds
surrendered pursuant to this Section 3.9 shall be cancelled.
(b) All exchanges pursuant to this Section 3.9 shall be
made without expense to the owner of such 1991 Bonds, except as
• otherwise herein provided, and except that the Registrar shall
require the payment by the registered owner of the 1991 Bond
requesting such exchange of any tax or other governmental charges
required to be paid with respect to such exchange.
Section 3.10. Mutilated, Lost, Stolen or Destroyed 1991
Bonds.
(a) In case any 1991 Bond shall at any time become
mutilated in whole or in part, or be lost, stolen or destroyed,
the City shall execute and direct the Bond Registrar to deliver at
the principal corporate trust office of the Bond Registrar, or to
send by registered mail to the owner registered thereof at his or
her request and at his or her risk and expense, a new 1991 Bond of
•
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the same series, interest rate and maturity and of like tenor and
effect in exchange or substitution for and upon the surrender for
cancellation of such defaced, mutilated or partly destroyed 1991
Bond, or in lieu of or in substitution for such lost, stolen or
destroyed 1991 Bond. In any such event the applicant for the
issuance of a substitute 1991 Bond shall furnish to the City and
the Registrar evidence or proof satisfactory to the City and the
Registrar of the loss, destruction, mutilation, defacement or theft
of the original 1991 Bond, and of the ownership thereof, and also
such security and indemnity as may be required by the laws of the
State of Washington or such greater security or indemnity as may
be required by the City or the Registrar. Any duplicate 1991 Bond
issued under the provisions of this Section 3.10 shall be entitled
to the identical benefits under this ordinance as was the original
1991 Bond in lieu of which such duplicate 1991 Bond is issued, and
shall be entitled to equal and proportionate benefits with all the
other 1991 Bonds of the same series issued hereunder.
(b) Notwithstanding the foregoing provisions of sub-
section (a) of this Section 3.10 as to the issuance of duplicate
or replacement 1991 Bonds, (i) if any such lost, stolen, destroyed,
defaced or mutilated Bond has matured or been called for redemption
and the date fixed for the redemption thereof has arrived, at the
option of the City, payment of the amount due thereon may be made
without the issuance of any duplicate or replacement 1991 Bond upon
receipt of like evidence, indemnity, security and expenses and the
411
-32- ASR313 91/07/11
surrender for cancellation of any such defaced or mutilated 1991
Bond and upon such other conditions as the City may prescribe; (ii)
if any such lost, stolen, destroyed, defaced or mutilated 1991 Bond
shall mature within one year following the date of application for
a duplicate 1991 Bond, or has been called or will be called for
redemption within one year following such date, instead of issuing
a duplicate or replacement 1991 Bond, the City, upon receiving like
evidence, indemnity, security and expenses and the surrender for
cancellation of any such defaced or mutilated 1991 Bond and upon
such, other conditions as the City may prescribe, may issue or cause
to be issued a transferable certificate of ownership to the
applicant and pay on such certificate the interest and the
redemption price or the pr..:cipal amount thereof, on the interest
payment dates and the redemption date or maturity date, upon
surrender of such certificate, and all such transferable
certificates of ownership shall be in such form as may be deter-
mined by the City or as otherwise provided by law; and (iii) if the
provisions of applicable law shall provide for the payment of lost,
stolen, destroyed, mutilated or defaced 1991 Bonds in lieu of the
issuance of duplicates or certificates of ownership therefor, such
lost, stolen, destroyed, mutilated or defaced 1991 Bonds may be
paid in accordance with the provisions of such laws.
(c) All expenses necessary for the providing of any
duplicate 1991 Bond or certificate shall be borne by the applicant
therefor.
•
- 33 - ASR313 91/07/11
Section 3.11. Disposition and Destruction of 1991 Bonds.
(a) All 1991 Bonds surrendered to the Registrar for
payment and retirement shall be cancelled upon such payment by the
Registrar.
(b) Whenever in this ordinance provision is made for
the cancellation of any 1991 Bonds by the Registrar, such cancelled
1991 Bonds shall be delivered to the City or as it may direct. Upon
the written request of the City, the Registrar may in lieu of
cancellation and delivery destroy such 1991 Bonds. If any 1991
Bonds are destroyed by the Registrar, the City may require that
such destruction be done in the presence of its appointee. If the
Registrar shall destroy any 1991 Bonds it shall deliver a
certificate of such destruction to the City.
Section 3.12. Redemption of Refunded Bonds. The City hereby
sets aside sufficient funds out of the proceeds of Acquired
Obligations purchased from proceeds of the 1991 Bonds to pay
interest on the Refunded Bonds through March 1, 1993, and to redeem
the Refunded Bonds at a price of 102% of the principal amount
thereof, in accordance with the provisions of Section 15 of
Ordinance No. 2267 of the City.
The City hereby calls for redemption on March 1, 1993, the
Refunded Bonds in accordance with the provisions of said Ordinance
No. 2267, authorizing the redemption and retirement of the 1983
Bonds prior to their fixed maturities.
-34- ASR313 91/07/11
•
Said defeasance and call for redemption of the Refunded Bonds
shall be irrevocable after the final establishment of the escrow
account and delivery of the Acquired Obligations to the Refunding
Agent, except as provided in Section 5.4(a) hereof relating to the
substitution of securities.
The Refunding Agent is hereby authorized and directed to give
notice of the redemption of the Refunded Bonds in accordance with
the applicable provisions of said Ordinance No. 2267 no later than
January 29, 1993. The Director of Finance and Budget and the
Registrar are authorized and requested to provide whatever
assistance is necessary to accomplish such redemption and the
giving of notice therefor. The costs of publication and mailing
• of such notice shall be paid by the City in accordance with Escrow
Agreement.
The Refunding Agent is hereby authorized and directed to pay
to the fiscal agency or agencies of the State of Washington, sums
sufficient to pay, when due, the payments specified in Section
5.4(a) of this ordinance. All such sums shall be paid from the
monies and Acquired Obligations deposited with said Refunding Agent
pursuant to the previous section of this ordinance, and the income
therefrom and proceeds thereof. All such sums so paid to said
fiscal agencies shall be credited to the 1991 Advance Refunding
Account. All money and Acquired Obligations deposited with said
Refunding Agent and any income therefrom shall be held, invested
and applied in accordance with the provisions of this ordinance and
•
-35- ASR313 91/07/11
with the laws of the State of Washington for the benefit of the
City and owners of the 1983 Bonds.
The City will take such actions as are found necessary to see
that all necessary and proper fees, compensation and expense of the
Refunding Agent for the 1983 Bonds shall be paid when due.. The
proper offices and agents of the City are directed to obtain from
the Refunding Agent an agreement setting forth the duties,
obligations and responsibilities of the Refunding Agent in
connection with the redemption and retirement of the Refunded Bonds
as provided herein and stating that such provisions for the payment
of the fees, compensation and expenses of such Refunding Agent are
satisfactory to it.
In order to carry out the purpose of the proceeding section
of this ordinance and this Section, the Director of Finance and 411
Budget of the City is authorized and directed to negotiate, execute
and deliver to the Refunding Agent, the Escrow Agreement, in
substantially the form heretofore provided to the Director of
Finance and Budget, when the provisions thereof have been fixed
and determined. Such agreement, when finally executed, shall be
marked "Exhibit B," shall be attached to this ordinance and by this
reference thereto is hereby made a part of this ordinance.
Section 3.13. Finding of Defeasance. The Council hereby
finds and determines that the moneys and Acquired Obligations to
be deposited with the Refunding Agent to pay the principal and
interest due and to become due on the Refunded Bonds are sufficient
-36- ASR313 91/07/11
to pay such amounts and will discharge and satisfy the obligations
of the City with regard to the Refundej Bonds under the ordinance
authorizing the issuance of the 1983 Bonds and the pledges,
charges, trusts, covenants and agreements of the City therein made.
The Refunded Bonds shall be deemed to be no .longer outstanding
immediately upon the deposit of :,uch moneys and Acquired
Obligations with the Refunding Agent.
Section 3.14. Form of 1991 Bonds. The 1991 Bonds shall be
substantially in the form of Exhibit A hereto.
ARTICLE IV
REDEMPTION OF 1991 BONDS
Section 4.1. Redemption Prior to Maturity.
40 The Bonds may be subject to redemption in advance of their
scheduled maturities to the extent permitted by resolution of the
Council. Interest on any 1991 Bonds so called for redemption shall
cease on such redemption date unless the same is not paid in full
upon presentation made pursuant to such call.
Section 4.2. Notice of Redemption.
(a) Official notice of any redemption shall be mailed
first class not less than thirty (30) nor more than sixty (60) days
prior to the redemption date, postage prepaid, t^ the registered
owner of each 1991 Bond called for redemption at h..s or her address
as it appears on the registration books or at such address as he
or she may have filed with the Registrar for that purpose. Neither
failure of the registered owner of a 1991 Bond to receive such
•
-37- ASR313 91/07/11
notice nor any defect in any notice so mailed shall affect the
sufficiency of the proceedings for the redemption of such 1991
Bond.
(b) Each official notice of redemption shall be dated
and shall state: (i) the title of the 1991 Bonds to be redeemed,
the series designation thereof, the redemption date, the place or
places of redemption and the redemption price or redemption
premium, if any, payable upon such redemption; (ii) if less than
all the 1991 Bonds of a particular series are to be redeemed, the
distinctive numbers of the 1991 Bonds to be redeemed; (iii) that
the interest on the 1991 Bonds, or on the principal amount thereof
to be redeemed, designated for redemption in such notice shall
cease to accrue from and after such redemption date; and (iv) that
on such date there will become due and payable on each such Bond
the principal amount thereof to be redeemed at the then applicable
redemption price (or together with the then applicable redemption
premium, if any) and the interest accrued on such principal amount
to the redemption date. If less than the entire principal amount
of a 1991 Bond is to be redeemed, the notice of redemption shall
also state the principal amount thereof to be redeemed and that
such 1991 Bond must be surrendered to the Registrar in exchange for
the payment of the principal amount thereof to be redeemed and the
issuance of a new 1991 Bond or 1991 Bonds equal in principal amount
to that portion of the principal amount not to be redeemed of the
Bond to be surrendered, as provided in Section 4.3.
-38- ASR313 91/07/11
(c) In addition to the foregoing official notice,
further notice shall be given as set out below, but no defect in
said further notice nor any failure to give all or any portion of
such further notice shall in any manner defeat the effectiveness
of al%call for redemption if notice thereof is given as prescribed
in subsection (b) of this Section 4.2 prescribed.
1. Each further notice of redemption given hereunder
shall contain the information required above for an official
notice of redemption plus (i) the CUSIP numbers of all 1991
Bonds being redeemed; (ii) the date of issue of the 1991 Bonds
as originally issued; (iii) the rate of interest borne by each
bond being redeemed; (iv) the maturity date of each bond being
redeemed; and (v) any other descriptive information needed to
identify accurately the 1991 Bonds being redeemed.
2. Each further notice of redemption shall be sent at
-least thirty -five (35) days before the redemption date by
registered or certified mail or overnight delivery service to
• - Standard & Poor's Core ration and Moody's Investors Service,
Inc. in New York, New i'ork, or their business successors, to
all registered securities depositories then i the business
of holding substantial amounts of obligat - s of types
comprising the 1991 Bonds, to one or . re national
information services that disseminate notices of redemption
of obligations such as the 1991 Bonds, and to the underwriters
that originally purchased the 1991 Bonds.
3. Each such further notice shall be published one time
in the Bond Buyer of New York, New York, or, if such
publication is impractical or unlikely to reach a substantial
number of the owners of the 1991 Bonds, in some other
financial newspaper or journal that regularly carries notices
of redemption of other obligations similar to the 1991 Bonds,
such publication to be made at least thirty (30) days prior
to the date fixed for redemption.
4. Upon the payment of the redemption price of 1991
Bonds being redeemed, each check or other transfer of funds
issued for such purpose shall bear the CUSIP number
identifying, by issue and maturity, the 1991 Bonds being
redeemed with the proceeds of such check or other transfer.
-39- ASR313 91/07/11
Section 4.3. Partial Redemption of 1991 Bonds. In the event
that part only of the principal sum of a 1991 Bond shall be called
for redemption or prepayment, payment of the amount to be redeemed
or prepaid shall be made only upon surrender of such Bond to the
Bond Registrar. Upon surrender of such 1991 Bond, the City shall
execute and direct the Registrar to deliver to the registered owner
thereof, at the principal corporate trust office of the Bond
Registrar, or to send to such owner by registered mail at his or
her request and at his risk or her and expense, a new fully
executed 1991 Bond or 1991 Bonds, of authorized principal amounts
equal in aggregate principal amount to, and of the same series,
maturity and interest rate as, the unredeemed portion of the 1991
Bond surrendered.
Section 4.4. Effect of Redemption. If a 1991 Bond is
subject by its terms to prior redemption and has been duly called
for redemption and official notice of the redemption thereof has
been duly given as provided in Section 4.2(a) and (b) hereof, such
1991 Bond (or the principal amount thereof to be redeemed) so
called for redemption shall become due and payable, and if money
for the payment of such 1991 Bond (or of the principal amount
thereof to be redeemed) at the then applicable redemption price or
together with the applicable redemption premium, if any, and
interest to accrue to the redemption date on such 1991 Bond (or the
principal amount thereof to be redeemed) are held for the purpose
of such payment by the Bond Registrar for the series of Bonds of
-40- ASR313 91/07/11
which such Bond is one, interest on such 1991 Bond (or the
principal amount thereof to be redeemed) so called for redemption
shall cease to accrue.
Section 4.5. Cancellation of Redeemed 1991 Bonds. All 1991
Bonds surrendered or redeemed pursuant to the provisions of this
Article IV shall be cancelled.
Section 4.6. Purchase of 1. . Bonds. The City reserves the
right to use at any time any surplus Gross Revenues of the System
available after providing for the payments required by paragraphs
First through Sixth inclusive of Section 5.1 of this ordinance, or
other available funds, to purchase any cj the 1991 Bonds in the
open market for retirement only if the s, ,e ma} e purchased at a
price not exceeding that at which they could be called for
redemption on th_ first succeeding date on which they may be
called, plus accrued interest.
ARTICLE V
FUNDS AND ACCOUNTS; DEFEASANCE
Section 5.1. Revenue Fund; Priority of Payments. The City
hereby obligates and binds itself to set aside - d pay into the
heretofore created Water and Sewer Operating F,: (the "Revenue
Fund ") as collected the Gross Revenues of the System.
The Gross Revenues of the System shall be held in the Revenue
Fund separate and apart from all other funds and accounts of the
City and used only for the following purposes and in the following
order of priority:
-41- ASR313 91/07/11
First, to pay the Costs of Maintenance and Operation of the
System;
Second, to make all required payments into the First Lien
Revenue Bond Fund;
Third, to pay the interest on the Second Lien Parity Bonds;
Fourth, to pay the principal of the Second Lien Parity Bonds;
Fifth, to make all payments required to be made into any
Reserve Account created to secure the payment of the Second Lien
Parity Bonds;
Sixth, to make all payments required to be made into any other
revenue bond redemption fund or debt service account or reserve
account created to pay and secure the payment of the principal of
and interest on any revenue bonds of the City having a lien upon
the Gross Revenues of the System junior and inferior to the lien
thereon for the payment of the principal of and interest on the
Second Lien Parity Bonds;
Seventh, to retire by redemption or purchase in the open
market any outstanding revenue bonds of the City, to make necessary
additions, improvements and repairs to or extensions and
replacements of the System, or for any other lawful City purposes.
Nothing contained in this Section 5.1 shall be construed to
require the deposit into the Revenue Fund of any of the revenues,
income, receipts or other moneys of the City derived through the
ownership or operation of any separate utility system hereafter
created or established from funds other than the proceeds of Bonds.
-42- ASR313 91/07/11
• Section 5.2. Bond Fund.
(a) There is hereby created and established a special
fund of the City to be designated the Second Lien Water and Sewer
Revenue .Bond Fund (the "Bond Fund ") which shall be used solely for
the purpose of paying the principal, premium, if any, and interest
on the 1991 Bonds and any other Second Lien Parity Bonds, of
retiring the Second Lien Parity Bonds prior to maturity in the
manner herein provided and of paying any reimbursement obligation
with respect to a letter of credit or other credit enhancement
device providing additional security for any Variable Rate Bonds.
Each month (or in the case of Variable Rate Bonds at the times
provided in subsection (i) of this Section 5.2 after applying
amounts as required in Section 5.1, the City shall withdra, from
the Revenue Fund and (to the extent not otherwise provided)
transfer to the Bond Fund, amounts as follows and in the following
order of priority: first, into the Interest Account; second, into
the Serial Bond Principal Account and Term Bond Principal Account;
and third, into the Reserve Account.
(i) Interest Account. The City shm] create and
establish a separate account in the Bond Fund, to be known as the
"Interest Account" in order to provide for the payment of interest
on the 1991 Bonds and any other Second Lien Parity Bonds as the
same becomes due and payable. At Closing, all accrued interest
on the 1991 Bonds shall be paid into the Interest Account.
-43- ASR313 91/07/11
In the case of all 1991 Bonds and other Second Lien Parity
Bonds other than Variable Rate Bonds, the City shall transfer to
the Interest Account amounts sufficient to pay when due the
installment of interest next falling due on all 1991 Bonds and
other Second Lien Parity Bonds. In the case of Variable Rate
Bonds, not later than on the last day of the month immediately
succeeding the month of Closing and on or before the last day of
each succeeding month, the City shall transfer to the Interest
Account an amount equal to the interest on such Variable Rate Bonds
estimated to become due and payable on the due date. If on any
date on which an installment of interest on Variable Rate Bonds
falls due there are insufficient amounts in the Interest Account
to make such interest payment, the City shall withdraw from the
Revenue Fund and transfer to the Interest Account an amount that
when added to other moneys therein will equal the amount of
interest falling due and payable on such interest payment date.
In making the credits required by this subsection (a)(i), any
amounts credited to the Interest Account representing accrued
interest received on the sale of 1991 Bonds or other Second Lien
Parity Bonds, interest capitalized from the proceeds of the 1991
Bonds and other Second Lien Parity Bonds and any other transfers
and credits otherwise made or required to be made to the Interest
Account shall be taken into consideration and allowance made with
respect to the full amount of such transfers and credits.
-44- ASR313 91/07/11
•
(ii) Serial Bond Principal Account. The City shall
create and establish a separate account in the Bond Fund to be
known as the "Serial Bond Principal Account" in order to provide
for the of the principal of Serial Bonds as the same :'all
mature and become due and payable. The City shall transfer to the
Serial Bond Principal Account amounts sufficient to pay when due
the installment of principal next falling due on the Serial Bonds.
(iii) Term Bond Principal Account.
(A) The City shall create and establish a separate
account in the Bond Fund to be known as the "Term Bond Principal
Account' -' in order to meet the specified Sinking Fund Requirements
of TermrBonds and to otherwise retire 1991 Bonds and other Second
111 Lien Parity Bonds prior to maturity. The City shall transfer to
the Term Bond Principal Account amounts - ufficient to pay when due
the Sinking Fund Requirement next fall_z7 due on all Term Bonds.
(B) The Paying Agent shall apply the moneys paid
into the Bond Fund for credit to the Term Bond Principal Account
to the redemption of Term Bonds on the next ensuing Sinking Fund
Requirement due date (or may so apply such moneys prior to such
Sinking Fund Requirement due date), pursuant to the terms of the
ordinance authorizing the issuance thereof. The City may also
apply the moneys paid into the Bond Fund for credit to the Term
Bond Principal Account for the purpose of retiring Term Bonds by
the purchase of such Term Bonds at a purchase price (including any
brokerage charge) not in excess of the principal amount thereof.
•
-45- ASR313 91/07/11
The City shall apply such moneys to the redemption or purchase of
y pp y h m y r p p
Term Bonds in an amount such that the aggregate principal amount
of Term Bonds so purchased or redeemed is at least equal to such
next ensuing Sinking Fund Requirement. Any such purchase of Term
Bonds by the City may be made with or without tenders of Term Bonds
in such manner as the City shall, in its discretion, deem to be in
its best interest.
(iv) Reserve Account.
(A) The City shall create and establish a separate
account in the Bond Fund to be known as the "Reserve Account" in
order to provide a reserve for the payment of the principal,
premium, if any, and interest on the 1991 Bonds and any other
Second Lien Parity Bonds. The City hereby covenants and agrees
that on the date of issuance of the 1991 Bonds the City (1) shall
transfer to the Reserve Account $285,000 from excess money
available in the Reserve Account in the Water and Sewer Revenue
Bond Fund, 1983 and $50,000 from excess money available in the
Reserve Account in the Water and Sewer Revenue Bond Fund, 1968 and
(2) shall pay into the Reserve Account in the Bond Fund
approximately $150,000 of proceeds of the 1991 Bonds. The City
further covenants and agrees that it will make equal annual
payments into the Reserve Account from money available in the
Revenue Fund and /or out of other moneys it may have on hand from
time to time and legally available for such payments amounts so
that within five years of the date of issuance of the 1991 Bonds
411
- 46 - ASR313 91/07/11
110
the moneys in the Reserve Account will be equal to the Average
Annual Debt Service for all Outstanding Second Lien Parity Bonds.
Each ordinance providing for the issuance of Additional Bonds shall
provide for payments into the Bond Fund for credit to the Reserve
Account °from any other moneys lawfully available therefor (in which
event, in providing for deposits and credits required by the
foregoing provisions of this paragraph (A), allowance shall be made
for any such amounts so paid into such Account) in amounts which
within not less than five years of equal monthly payments will
provide for deposit of the Reserve Account Requirement or may
provide for the City to obtain Qualified Insurance or a Qualified
Letter of Credit for specific amounts required pursuant to this
• Section to be paid into the Reserve Account, such amounts so
covered by Qualified Insurance or a Qualified Letter of Credit
shall be credited against the amounts required to be maintained in
the Reserve Account by this Section to the extent that such
payments and credits to be made are insured by an insurance
company, or guaranteed by a letter of credit from a bank. Such
Qualified Letter of Credit or, Qualified Insurance shall not be
cancelable on less than five years notice. In the event of any
cancellation, the Reserve Account shall be funded in accordance
with the first three paragraphs of this subsection, as if the
Second Lien Parity Bonds which remain Outstanding had been issued
on the date of such notice of cancellation.
•
-47- ASR313 91/07/11
B Money in the Bond Fund ma at the o
( ) Y Y. option of P
the City, be invested and reinvested as permitted by law in
Permitted Investments maturing, or which are retirable at the
option of the owner, prior to the date needed or prior to the
maturity date of the final installment of principal of the Bonds
payable out of the Bond Fund. Earnings on investments in the Bond
Fund shall be transferred to the Revenue Fund, except that earnings
on investments in the Reserve Account shall first be applied to
remedy any deficiency in such account.
(C) For the purpose of determining the amount
credited to the Reserve Account, obligations in which moneys in the
Reserve Account shall have been invested shall be valued at the
market value thereof. The term "market value" shall mean, in the
case of securities that are not then currently redeemable at the
option of the owner, the current bid quotation for such securities,
as reported in any nationally circulated financial journal, and the
current redemption value in the case of securities that are then
redeemable at the option of the owner. For obligations that mature
within six (6) months, the market value shall be the par value
thereof. The valuation shall include accrued interest thereon.
The valuation of the amount in the Reserve Account shall be made
by the City as of the close of business on each December 31 (or on
the next preceding business day if December 31 does not fall on a
business day) and after any withdrawal pursuant and may be made
- ASR313 91/07/11
•
on each June 30 (or on the next preceding business day if June 30
does not fall on a business day).
(D) If the amount in the Reserve Account shall be
less than the Reserve Account Requirement, the City shall transfer
from the Revenue Fund, for credit to the Reserve Account no later
than the twenty -fifth (25th) day of the sixth succeeding calerdar
month the amount necessary to restore the Reserve Account to the
Reserve Account Requirement. Prior to such time, such transfer
shall come from moneys in the Revenue Fund first available after
making the current specified payments into the Interest Account and
Principal Account. If the amount in the Reserve Account shall be
greater than the Reserve Account Requirement, then and only then
• may the City withdraw at any time prior to the next date of
valuation from the Reserve Account the difference between the
amount in the Reserve Account and the Reserve Account Requirement
and deposit such difference in the Revenue Fund.
(b) Money in the Interest Account, the Serial Bond
Principal Account and the Term Bond Principal Account shall be
transmitted to the Paying Agent in amounts sufficient to meet the
next maturing installments of principal, interest and premium, if
any, at or prior to the time upon which any interest, principal or
premium, if any, is to become due. In the event there shall be a
deficiency in the Interest Account, the Serial Bond Principal
Account or the Term Bond Principal Account for such purpose, the
City shall make up any such deficiency from the Reserve Account by
•
-49- ASR313 91/07/11
the withdrawal of cash therefrom for that ur ose and if
P P and,
necessary, by sale or redemption of any authorized investments in
such amount as will provide cash in said Reserve Account sufficient
to make up any such deficiency. If a deficiency still exists
immediately prior to an interest payment date and after the
withdrawal of cash, the City shall then draw from any Qualified
Letter of Credit or Qualified Insurance. Such draw shall be made
at such times and under such conditions as the agreement for such
Reserve Account Credit Facility shall provide.
(c) Whenever and so long as amounts on deposit in the
Bond Fund, including the Reserve Account, are sufficient to provide
money to pay the Second Lien Parity Bonds then Outstanding,
including such interest as may thereafter become due thereon and
411
any premiums upon redemption, no payments need be made into the
Bond Fund pursuant to this ordinance.
(d) Money transferred from the Bond Fund to the Paying
Agent for the Second Lien Parity Bonds and the interest thereon
shall be held in trust for the owners of such Second Lien Parity
Bonds. Until so set aside for the retirement of principal, payment
of sinking fund installments, payment of interest and premium, if
any, as aforesaid, moneys in the Bond Fund shall be held in trust
for the benefit of the owners of the Second Lien Parity Bonds then
outstanding and payable equally and ratably and without preference
or distinction as between different installments or maturities.
-50- ASR313 91/07/11
• (e) The amounts so pledged to be paid into the Bond Fund
and the Reserve Account therein are hereby declared to be a prior
lien, and charge upon the Gross Revenues of the System superior to
all other charges of any kind or nature s.hatsoever (including any
transfer of money to other funds of the City and taxes or payments
in lieu of taxes) except the Costs of Maintenance and Operation and
required payments on First Lien Parity Bonds, and is equal in
priority to the lien and charge which may hereafter be made to pay
and secure the payment of the principal of and interest on any
Additional Bonds.
(f) The Council hereby finds and declares that in fixing
the amounts to be paid into the Bond Fund and the Reserve Account
• therein out of the Gross Revenues of the System, it has exercised
due regard for the Costs of Maintenance and Operation and for the
amounts required to pay and secure the payment of the principal of
and interest on the First Lien Parity Bonds, and has not obligated
the City to set aside and pay into such Fund and Account a greater
amount of such Gross Revenues than in its judgment will be
available over and above the Costs of Maintenance and Operation and
the principal of and interest on the First Lien Parity Bonds.
Section 5.3. Defeasance. The City may set aside with a
trustee or escrow agent in a special account, created by separate
ordinance and irrevocably pledged to the payment of all or a
portion of any Second Lien Parity Bonds, cash, Government
Obligations and /or Refunded Municipals, if permitted by law,
•
-51- ASR313 91/07/11
sufficient in amount, together with the earnings thereon, to
provide funds to pay when due the interest on such Second Lien
Parity Bonds and to redeem or retire such Second Lien Parity Bonds
at or prior to maturity in accordance with their terms. In such
event no further payment need be made into the Bond Fund for the
payment of the principal of and interest on the Second Lien Parity
Bonds so provided for and such Second Lien Parity Bonds shall cease
to be entitled to any lien, benefit or security of this Ordinance
except the right to receive payment from such special account, and
such Second Lien Parity Bonds shall not be deemed to be outstanding
for any purpose of this ordinance or the ordinance authorizing
their issuance. The City shall obtain an opinion of Bond Counsel
to the effect set forth in the preceding sentence and that the
status of such Second Lien Parity Bonds under the Code is not 410
adversely affected. Within thirty (30) days following the
defeasance of any Second Lien Parity Bonds pursuant to this Section
5.3, written notice of the action so taken shall be mailed to
Standard & Poor's Corporation and Moody's Investors Service Inc.,
or to their successors. At the same time, such notice shall be
mailed to all registered owners of such Second Lien Parity Bonds
at their last addresses, if any, appearing upon the registration
books maintained by the Registrar.
Section 5.4. Use of Bond Proceeds. There has heretofore
been created a special fund of the City known as the Wastewater
Facility Capital Fund (the "Capital Fund "). There is hereby
- ASR313 91/07/11
• created a special fund of the City to be known as the "1991 Advance
Refunding Fund." All proceeds of the 1991 Bonds received by the
City shall be deposited into the Capital Fund or the 1991 Advance
Refunding Fund, except that proceeds representing accrued interest
on the 1991 Bonds shall be deposited in the Interest Account
pursuant to Section 5.2(a)(i) hereof.
(a) 1991 Advance Refunding Fund. Proceeds of the sale of the
1991 Bonds, together with other available funds of the City, shall
be deposited into the 1991 Advance Refunding Fund. Money in the
1991 Advance Refunding Fund shall be used immediately upon receipt
thereof to defease the Refunded Bonds and discharge all the other
obligations of the City with regard to the Refunded Bonds under
Ordinance No. 2267, adopted March 8, 1_ :: , author_ ing the issuance
• of the 1983 Bonds, by pro' ding for the payment of the principal
of and interest thereon as hereinafter set forth in this section.
The City shall defease the Refunded Bonds and discharge such
obligations by the use of monies in the 1991 Advance Refunding Fund
to purchase certain "Government Obligations" as such obligations
are fined in Chapter 39.53 RCW as now or hereafter amended (which
obligations so purchased, are herein called "Acquired
Obligations"), bearing such interest and maturing as to principal
and interest in such amounts and at such times which, together with
any necessary beginning cash balance, will provide for the payment
of:
1
-53- ASR313 91/07/11
(1) Interest which will become due and payable on or
before March 1, 1993, on the Refunded Bonds.
(2) The redemption price payable for the Refunded Bonds
maturing after March 1, 1993 on March 1, 1993.
Such Acquired Obligations shall be purchased at a yield not
greater than the yield permitted by the Code.
Such beginning cash balance and the Acquired Obligations shall
be irrevocably deposited with Security Pacific Bank Washington,
N.A. (the "Refunding Agent "). Any amount described in
subparagraphs (1) and (2) of this section which are not provided
for in full by such beginning cash balance and the purchase and
deposit of the Acquired Obligations described in this section shall
be provided for by the irrevocably deposit of the necessary amount
out of the proceeds of sale of the 1991 Bonds or any other money
of the City legally available therefor with the aforesaid Refunding
Agent. The City may, from time to time, transfer, or cause to be
transferred, from the 1991 Advance Refunding Fund any monies not
thereafter required for the purpose set forth in (1) and (2) above
or for the payment of expenses. The City reserves the right to
substitute other securities for the Acquired Obligations in the
event it may do so pursuant to Section 148 of the Code, upon
compliance with the following conditions:
(A) Such substitution is accomplished pursuant to
ordinance of the Council, which may be adopted either prior
to or subsequent to the delivery of the 1991 Bonds.
-54- ASR313 91/07/11
B The securities to be substituted are direct
obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States
of America.
(C) Such securities bear interest and mature at
such times and in such amounts as to fully replace the
Acquired Obligations for which they are substituted, and to
provide, together with Acquired Obligations and cash
remaining, for the payment of the amounts specified in items
(1) and (2) above.
(b) Capital Fund. At Closing, proceeds of sale of the 1991
Bonds less accrued interest and amounts required to purchase the
111 Acquired Obligations shall be deposited into the Capital Fund and
used to pay the costs of the Project, the costs of issuing the 1991
Bonds and the expenses of the safekeeping and acquisition of the
Acquired Obligations. Such Bond proceeds shall be expended to pay
Project costs prior to the expenditure of other funds therefor.
ARTICLE VI
PARTICULAR COVENANTS OF THE CITY
So long as any Second Lien Parity Bonds remain Outstanding,
the City covenants and agrees with the purchasers and owners of all
1991 Bonds and all Additional Bonds as follows:
Section 6.1. Rate Covenant. The City shall establish,
maintain and collect rates and charges for the use of the services
and facilities of and all commodities sold, furnished or supplied
41
-55- ASR313 91/07/11
by the System, w e shall a fair and nondiscriminatory y which be n n y and shall
adjust such rates and charges from time to time so that:
(a) The Gross Revenues collected (together with
Assessments collected) will at all times be sufficient (a) to pay
the Costs of Maintenance and Operation of the System, (b) to pay
the principal of, premium, if any, and interest on the First Lien
Parity Bonds and the Second Lien Parity Bonds, as and when the same
shall become due and payable, (c) to make adequate provision for
the payment of any Term Bonds, (d) to make when due all payments
which the City is obligated to make into the Reserve Account and
all other payments which the City is obligated to make pursuant to
this ordinance,. and (e) to pay all taxes, assessments or other
governmental charges lawfully imposed on the System or the revenue
410
therefrom or payments in lieu thereof and any and all other amounts
which the City may now or hereafter become obligated to pay from
the Gross Revenues by law or contract; and
(b) The Net Revenues in each Fiscal Year,, after payment
of debt service on all Outstanding First Lien Parity Bonds, will
be at least equal to the Coverage Requirement calculated as of
December 31 of the preceding calendar year.
Section 6.2. Maintenance and Operation. The City shall at
all times maintain, preserve and keep the properties of the System
in good repair, working order and condition and will from time to
time make all necessary and proper repairs, renewals, replacements,
extensions and betterments thereto, so that at all times the
411
-56- ASR313 91/07/11
business carried on in connection therewith will be ro erl and
P P Y
advantageously conducted, and the City will at all times operate
or cause to be operated said properties of the System and the
business in connection therewith in an efficient manner and at a
reasonable cost.
Section 6.3. Sale or Disposition of the System. The City
will not sell or otherwise dispose of the System in its entirety
unless simultaneously with such sale or other disposition,
provision is made for the payment into the Bond Fund of cash or
"Government Obligations," as now or hereafter defined in RCW
Chapter 39.53, as amended, or its successor statute, if any,
sufficient together with interest to be earned thereon to pay the
• principal of and interest on the then Outstanding Second Lien
Parity Bonds, nor will it sell or otherwise dispose of any part of
the useful operating properties of the System unless such
facilities ar= replaced or provision is made for payment into the
Bond Fund o.. the greater of:
(a) An amount which will be in the same proportion to
the net amount of Second Lien Parity Bonds then Outstanding
(defined as the total amount of the Second Lien Parity Bonds less
the amount of cash and investments in the Bond Fund and accounts
therein) that the Net Revenues from the portion of the System sold
or disposed of for the preceding year bears to the total Net
Revenues for such period; or
•
-57- ASR313 91/07/11
b A n amount which will be in the same - ro
(
•
) proportion to P
the net principal amount of Second Lien Parity Bonds then
Outstanding that the book value of the part of the System sold or
disposed of bears to the book value of the entire System
immediately prior to such sale or disposition.
The proceeds of any such sale or disposition of a portion of
the properties of the System (to the extent required above) shall
be paid into the Bond Fund.
Notwithstanding any other provision of this subsection, the
City may sell or otherwise dispose of any of the works, plant,
properties and facilities of the System or any real or personal
property comprising a part of the same which shall have become
unserviceable, inadequate, obsolete or unfit to be used in the
operation of the System, or no longer necessary, material to or
useful in such operation, without making any deposit into the Bond
Fund.
Section 6.4. Liens or Encumbrances. Except for the lien and
charge of the First Lien Parity Bonds, the City will not at any
time create or permit to accrue or to exist any lien or other
encumbrance or indebtedness upon the System or the Revenues or any
part thereof, prior or superior to the lien thereon for the payment
of the Second Lien Parity Bonds, and will pay and discharge, or
cause to be paid and discharged, any and all lawful claims for
labor, materials or supplies which, if unpaid, might become a lien
or charge upon the Revenues of the System, or any part thereof, or
-58- ASR313 91/07/11
•
upon any funds in the hands of the City, prior to or superior to
the Lien of the Second Lien Parity Bonds, or which might impair the
security of the Parity Bonds.
- „Section 6.5. Insurance. The City shall, to the extent
insurance coverage is available at reasonable cost with responsible
insurers, keep, or cause to be kept, the System and the operation
thereof insured, with policies payable to the City, against the
risks of direct physical loss, damage to or destruction of the
System, or any part thereof, and against accidents, casualties or
negligence, including liability insurance and employer's liability,
at least to the extent that similar insurance is usually carried
by utilities operating like properties as determined by the City
• Manager. A program of self insurance against certain risks or as
to part of the potential liability_,for certain risks may be
included as part of the City's insurance coverage plan.
In the event of any loss cr damage to the properties of the
System covered by insurance, the City will (a) with respect to each
such loss, promptly repair and reconstruct to the extent necessary
to the proper conduct of the operations cf the System the lost or
damage portion thereof and shall apply the proceeds of any
insurance p:licy or policies covering such loss or damage for that
purpose to the extent required therefor, unless in the case of loss
or damage involving an amount less than or equal to 2% of the value
of net utility plant of the System or more, such repair and
reconstruction shall not be recommended by the City Manager, and
-59- ASR313 91/07/11
(b) if the City shall not use the entire proceeds of such insurance
to repair or reconstruct such lost or damaged property, such
insurance proceeds thereof not so used shall be paid into the
Revenue Fund, and if greater than 2% of the value of the net
utility plant of the System for any one loss or damage, shall be
used to purchase or redeem bonds or to acquire or construct
extensions, betterments and improvements to the System.
Section 6.6. Books and Accounts. The City shall keep proper
books of account in accordance with any applicable rules and
regulations prescribed by the State of Washington. The City shall
prepare, and any owner or holder of Second Lien Parity Bonds may,
upon written request, obtain copies of, balance sheets and profit
and loss statements showing in reasonable detail the financial
condition of the System as of the close of each year, and the
income and expenses of such year, including the amounts paid into
the Revenue Fund, the Bond Fund, and into any and all special funds
or accounts created pursuant to the provisions of this Ordinance,
and the amounts expended for maintenance, renewals, replacements,
and capital additions to the System.
Section 6.7. Additions and Improvements. The City will not
expend any of the revenues derived by it from the operation of the
System or the proceeds of any indebtedness payable from the
Revenues of the System for any extensions, betterments or
improvements to the System which are not legally required or
economically sound, and which will not properly and advantageously
-60- ASR313 91/07/11
contribute to the conduct of the business of the System in an
efficient manner; provided, that to the extent permitted by law,
the City may provide commodities, services or facilities free of
charge at a reduced charge in order to carry out a plan adopted
by the Council for conservation of water or to benefit elderly,
handicapped or poor persons.
Section 6.8. Tax Covenants. The City hereby covenants that
it will not make any use of the proceeds of sale of the 1991 Bonds
or any other funds of the City that may be deemed to be proceeds
of such 1991 Bonds pursuant to Section 148 of the Code that will
cause the 1991 Bonds to be "arbitrage bonds" within the meaning of
said section. The City will comply with the applicable arbitrage
• requirements of Section 148 of the Code (or any successor provision
thereof applicable to the 1991 Bonds) throughout the term of the
1991 Bonds. The Ci further covenants that it will not take any
action or permit any action to be taken that would cause the 1991
Bonds to constitute "private activity bonds ", under Section 141 of
the Code.
The City hereby designates the 1991 Bonds as "Qualified Tax -
Exempt Obligations under Section 265(b) of the Code for investment
by financial institutions.
Section 6.9. Arbitrage Rebate.
(a) General Rule. The City will pay to the United
States of America in accordance with the provisions of this section
(i) at least 90 percent of the Rebatable Arbitrage with respect to
•
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the 1991 Bonds as of each Installment Computation Date, (ii) 100
percent of the Rebatable Arbitrage with respect to the 1991 Bonds
as of the Final Computation Date and (iii) any income attributable
to such Rebatable Arbitrage.
(b) Computation of Rebatable Arbitrage. The Rebatable
Arbitrage with respect to the Bonds computed in accordance with the
Arbitrage Rebate and Accounting Certificate and, as of each
Computation Date, will be the excess of:
(i) The future value of all Nonpurpose Receipts with
respect to the 1991 Bonds; over
(ii) The future value of all Nonpurpose Payments with
respect to the 1991 Bonds.
The future value will be computed as of each Computation Date.
(c) Payment Procedure.
(i) The payment of Rebatable Arbitrage due as of each
Installment Computation Date will be paid no later than the
date that is 60 days after the Installment Computation Date.
(ii) The payment of Rebatable Arbitrage due as of the
Final Computation Date will be paid no later than the latest
of (a) the date that is 60 days after the Final Computation
Date, (b) the date that is 8 months after the date of issuance
of the 1991 Bonds, or (c) the date 60 days after the earlier
of the date that the City no longer expects to spend gross
proceeds of the Bonds within 6 months after the date of
issuance of the Bonds.
-62- ASR313 91/07/11
• (iii) Each payment of Rebatable Arbitrage will be made
to the Internal Revenue Service Center, Philadelphia,
Pennsylvania 19255 and will be accompanied by IRS Form
8038 -G.
(d) Other Methodology. Notwithstanding this Section
7.16, payments of Rebatable Arbitrage will be made in accordance
with instructions provided Bond Counsel if necessary to maintain
the Federal income tax exemption for interest payments made on the
1991 Bonds.
ARTICLE VII
ADDITIONAL BONDS
Section 7.1. Additional Bonds. Second Lien Parity Bonds may
be issued payable from the Bond Fund on a parity with the 1991
Bonds, and secured by an equal charge and lien on the Gross
Revenues pledged to said Bond Fund:
First, for the purpose of acquiring, constructing and
installing additions and improvements to and extensions of,
acquiring necessary equipment for or making necessary repairs,
replacements or other capital improvements to the System, or
Second, for the purpose of refunding, or purchasing and
retiring prior to their maturity, any outstanding Bonds or other
revenue obligations of the System.
(a) The City may issue Second Lien Parity Bonds upon
compliance with the following conditions:
-63- ASR313 91/07/11
the t' of such Pa
1. At h time of the issuance Parity
Bonds, there shall be no deficiency in the Bond Fund or in the bond
fund securing the First Lien Parity Bonds.
2. In each ordinance authorizing such Second Lien
Parity Bonds, provision shall be made for payments into the Reserve
Account in accordance with Section 5.2(a)(iv) of this ordinance.
3. At the time of the issuance of such Second Lien
Parity Bonds, the City shall have on file a certificate from the
Professional Utility Consultant, not then employed by the City
except for the purpose of giving such certificate, showing that the
Net Revenue received during any consecutive 12 -month period for
which financial statements are available within the 24 months
preceding the date of delivery of such Second Lien Parity Bonds
410
equals the Coverage Requirement in each calendar year or Fiscal
Year thereafter on the then - Outstanding Second Lien Parity Bonds
and the Additional Bonds to be issued, after payment of debt
service on all Outstanding First Lien Parity Bonds, and that the
Adjusted Net Revenues to be received each calendar year or Fiscal
Year thereafter, will equal at least 1.40 times the Average Annual
Debt Service each such calendar year or Fiscal Year, on the
Outstanding Second Lien Parity Bonds and the Additional Bonds to
be issued, after payment of debt service on all Outstanding First
Lien Parity Bonds.
The Adjusted Net Revenues shall be the Net Revenues for a
period of any twelve consecutive months out of the twenty -four
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months immediately preceding the date of delivery of such proposed
Additional Bonds, as adjusted to take into consideration changes
in Net Revenues estimated to occur under one or more of the
following conditions for each year after such delivery for so long
as any Bonds, including the Additional Bonds proposed to be issued,
shall be outstanding:
(A) Any increase or decrease in Net Revenues which
would result if any change in rates and charges adopted by the
Council prior to the date of such certificate and subsequent to the
beginning of such twelve -month period, had been in force during the
full twelve -month period;
(B) The additional Net Revenues from any rate
• increases which have been approved by ordinance of the Council but
which are rrt then in effect;
(C) Any incre or decrease. in Net Revenues
estimated by such Professional Utility Consultant to result from
any additions, betterments and improvements to and extensions of
any facilities of the System which (i) became fully operational
during such twelve -month period, (ii) were under construction at
the time of such certificate, or (iii) will be constructed from the
proceeds of the Additional Bonds to be issued;
(D) The additional Net Revenues which would have
been received if any customers added to the System during such
twelve -month period were customers for the entire period.
•
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(E) The additional Net Revenues that may be derived
by the City from any users of the System with whom the City has
entered into a contract for utility services to be furnished, which
revenues have not otherwise been included in Net Revenues.
Such Professional Utility Consultant shall base his
certification upon, and his certificate shall have attached
thereto, financial statements of the System audited by the State
Examiner (unless such an audit is not available for a twelve -month
period within the preceding twenty -four months) and certified by
the chief financial officer of the City, showing income and
expenses for the period upon which the same is based.
The certificate of such Professional Utility Consultant shall
be conclusive and the only evidence required to show compliance
with the provisions and requirements of this subsection.
Notwithstanding the foregoing, if Additional Bonds are to be
issued for the purpose of refunding at or prior to their maturity
any part or all of the then Outstanding Bonds and the issuance of
such refunding Additional Bonds results in a debt service savings
and does not require an increase of more than $5,000 in any year
for principal and interest on such refunding Additional Bonds, the
certificate required by subsection (a)(3) of this section need not
be obtained.
(b) Nothing herein contained shall prevent the City from
issuing revenue bonds or other obligations which are a charge upon
the Gross Revenues of the System junior or inferior to the payments
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required by this ordinance to be made out of such Gross Revenues
into the Bond Fund and accounts therein to pay and secure the
payment of any Outstanding Bonds.
(c) Nothing herein contained shall prevent the City from
issuing revenue bonds to refund maturing Bonds for the payment of
which, moneys are not otherwise available.
(d) Notwithstanding any other provision of this
ordinance, for so long as the 1991 Bonds are Outstanding, no bonds
may be issued subsequent to the issuance of the 1991 Bonds with a
lien and charge on the Gross Revenues superior to the lien and
charge of the 1991 Bonds.
Section 7.2. Pledge Effected by Ordinance.
(a) The 1991 Bonds are special limited obligations of
the City payable from and secured solely by Gross Revenues, subject
to the prior payment of Costs of Maintenance and Operation of the
System and, for so long as any First Lien Parity Bonds are
Outstanding, the prior payment of .;11 amounts due on such First
Lien Parity Bonds, and other moneys and assets specifically pledged .
hereunderr for the payment thereof. There are hereby pledged as
security for the payment of the principal, premium, if any, and
interest on the 1991 Bonds in accordance with their terms and the
provisions of this ordinance, subject only to the provisions of
this ordinance restricting or permitting the application thereof
for the purposes and on the terms and conditions set forth in this
ordinance, (i) the proceeds of the sale of the 1991 Bonds to the
•
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extent held in the funds established by this ordinance, (ii) the
Gross Revenues, and (iii) the moneys and assets, if any, credited
to the Revenue Fund and the Bond Fund, and the income therefrom.
The Gross Revenues and other moneys and assets hereby pledged shall
immediately be subject to the lien of this pledge without any
physical delivery thereof or further act, and the lien of this
pledge shall be valid and binding as against all parties having
claims of any kind in tort, contract or otherwise against the City
regardless of whether such parties have notice thereof.
(b) The 1991 Bonds and any Additional Bonds shall be
equally and ratably payable and secured hereunder without priority
by reason of date of adoption of the ordinance providing for their
issuance or by reason of their series, number or date of sale,
issuance, execution or delivery, and by the liens, pledges,
charges, trusts, assignments and covenants made herein, except as
otherwise expressly provided or permitted in this ordinance and
except as to insurance that may be obtained by the City to insure
the repayment of one or more series or maturities within a series.
(c) The 1991 Bonds and any Additional Bonds shall not
in any manner or to any extent constitute general obligations of
the City or of the State of Washington, or of any political
subdivision of the State of Washington, or a charge upon any
general fund or upon any moneys or other property of the City or
of the State of Washington, or of any political subdivision of the
State of Washington, not specifically pledged thereto by this
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ordinance, nor shall the full faith and credit of the City or of
the State of Washington, or of any political subdivision of the
State of Washington, be pledged to the payment of principal,
premium, if any, or interest thereon.
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.1. Events of Default. This Ordinance and each
ordinance adopted pursuant to Article X are hereinafter in this
Article and in Article IX referred to collectively as "the
Ordinance."
The City hereby covenants and agrees with the purchasers and
owners from time to time of any Second Lien Parity Bonds, in order
• to protect and safeguard the covenants and oblig&tions undertaken
by the City securing any Second Lien Parity Bonds, that the
following shall constitute "Events of Default ":
(a) If the City shall default in the performance of any
obligation with respect to payments into the Bond Fund and such
default is not remedied within a period of 30 days;
(b) If default shall be made in the due and punctual
payments of the principal of and premium, if any, on any of the
Second Lien Parity Bonds when the same shall become due and
payable, either at maturity or by proceedings for redemption or
otherwise;
•
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(c) If default shall be made in the due and punctual
payment of any installment of interest on any Second Lien Parity
Bonds;
(d) If the City shall default in the observance and
performance of any other of the covenants, conditions and
agreements on the part of the City contained in the Ordinance and
such default or defaults shall have continued for a period of
ninety (90) days after the City shall have received from the
Bondowners Committee or from the owners of not less than twenty
percent (20 %) in principal amount of the Second Lien Parity Bonds
outstanding, a written notice specifying, and demanding the cure
of, such default;
(e) If the City shall (except as herein permitted) sell,
4 10
transfer, assign or convey any properties constituting the System
or interests therein, or any part or parts thereof, or shall make
any agreement for such sale or transfer (except as expressly
authorized by Section 6.3 hereof);
(f) If an order, judgment or decree shall be entered by
a court of competent jurisdiction (a) appointing a receiver,
trustee or liquidator for the whole or any substantial part of the
System, (b) approving a petition filed against the City seeking the
bankruptcy, arrangement or reorganization of the City under any
applicable law of the United States or the State of Washington, or
(c) assuming custody or control of the whole or any substantial
part of the System under the provisions of any other law for the
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• relief or aid of debtors and such order, judgment ud ment or decree shall
not be vacated or set aside or stayed (or, in case custody or
control is assumed by such order, such custody or control shall not
be otherwise terminated), within sixty (60) days from the date of
entry of such order, judgment or decree;
(g) If the City shall (a) admit in writing its inability
to pay the debts of the System generally as they become due, (b)
file a petition in bankruptcy or seeking a composition of
indebtedness under any state or federal bankruptcy or insolvency
law, (c) make an assignment for the benefit of its creditors, (d)
consent to the appointment of a receiver of the whole or any
substantial part of the System, or (e) consent to the assumption
by any,_court of competent jurisdiction under the provisions of any
other law for the relief or aid of debtors of custody or control
of the whole or any substantial part of the System.
Section 8.2. Formation of Bondowners Committee. During the
continuance of an Event of Default, the owners of Second Lien
Parity Bonds representing twenty percent (20 %) in principal amount
of the Second Lien Parity Bonds then Outstanding may call a
bondholders meeting for the purpose of electing a committee to act
on behalf of all Bondowners (the "Bondowners Committee "). Such
meeting shall be called and the proceedings thereof shall be
conducted in the manner provided in Article IX hereof.
At such meeting the Bondowners present in person or by proxy
may, by a majority of the votes cast, elect one or more persons,
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who may or may not be Bondowners, to the Bondowners Committee which
shall act as trustee for all registered owners of Second Lien
Parity Bonds outstanding (the "Bondowners "), and the Bondowners
Committee as such trustee may have and exercise all the rights and
powers provided for in this Ordinance to be exercised by the
Bondowners Committee. The Bondowners present in person or by proxy
at said meeting, or at any adjourned meeting thereof, shall
prescribe the manner in which the successors of the persons elected
to the Bondowners Committee at such Bondowners meeting shall be
elected or appointed, and may prescribe rules and regulations
governing the exercise by the Bondowners Committee of the powers
conferred upon it herein, and may provide for the termination of
the existence of the Bondowners Committee. The members of the
Bondowners Committee elected by the Bondowners in the manner herein
provided, and their successors, as a committee are hereby declared
to be trustees for the owners of all the Second Lien Parity Bonds
then Outstanding, and are empowered to exercise in the name of the
Bondowners Committee as trustee, all the rights and powers
hereinafter conferred on the Bondowners Committee.
Section 8.3. Books of City Open to Inspection. The City
covenants that if an Event of Default shall have happened and shall
not have been remedied, the books of record and account of the City
and all other records relating to the System shall at all times
during regular business hours be subject to the inspection and use
of the Bondowners Committee and any person holding at least twenty
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• 1 O
per cent (20%) of the principal amount of Bonds outstanding and of
their respective agents and attorneys.
The City covenants that if an Event of Default shall happen
and shall not have been remedied, the City will continue to
account, as a trustee of an express trust, for all Gross Revenues
and other moneys, securities and funds pledged under the Ordinance.
Section 8.4. Suits at Law or in Equity. If an Event of
Default shall happen and shall not have been remedied, then and in
every such case, the Bondowners Committee by its agents and
attorneys, shall be entitled and empowered to proceed forthwith to
take such needful steps and institute such suits, actions and
proceedings at law or in equity for the collection of all sums due
• in connection with the Second Lien Parity Bonds and to protect and
enforce the rights of Bondowners under the Ordinance for the
specific performance of any covenant herein contained or in aid of
the execution of any power herein granted, or for an accounting
against the City as trustee of an express trust, or in the
enforcement of any other legal or equitable right as the Bondowners
Committee being advised by counsel, shall deem most effectual to
enforce any of the rights of the owners of the Bonds.
Any action, suit or other proceedings instituted by the
Bondowners Committee hereunder shall be brought in its name as
trustee for the Bondowners and all such rights of action upon or
under any of the Second Lien Parity Bonds or the provisions of this
Ordinance may be enforced by the Bondowners Committee without the
•
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possession of any of said Second Lien Parity Bonds, and without the
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production of the same at any trial or proceedings relative thereto
except where otherwise required by law, and the respective owners
of said Second Lien Parity Bonds, by taking and holding the same,
shall be conclusively deemed irrevocably to appoint the Bondowners
Committee the true and lawful trustee for the respective owners of
said Bonds, with authority to institute any such action, suit or
proceeding; to receive as trustee and deposit in trust any sums
becoming distributable for the receipt of such moneys, and to do
all acts with respect thereto that the Bondowner himself might have
done in person, provided, however, that nothing herein contained
shall be deemed to authorize or empower the Bondowners Committee
to consent to, accept or adopt, on behalf of any Bondowner, any
plan of reorganization or adjustment affecting the said Second
Parity Bonds of the City or any right of any owner thereof, or to
authorize or empower the Bondowners Committee to vote the claims
of the owners thereof in any receivership, insolvency, liquidation,
bankruptcy, reorganization or other proceeding to which the City
shall be a party, and provided further, however, that any Bondowner
or Bondowner may by mutual agreement transfer title to the Second
Lien Parity Bonds held by him or them to the Bondowners Committee,
or may by agreement with other Bondowners create or organize a
separate trustee or bondowners committee and may confer or organize
a separate trustee or bondowners committee and may confer upon the
Bondowners Committee or such separate trustee or bondholders
410
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•
committee, such powers and duties as such agreement or agreements
shall provide, and the provisions of this Ordinance shall not be
construed as a limitation on the powers and duties which consenting
Bondowners may by agreement confer on the Bondc_rrners Committee or
such separate trustee or bondholders c mmittt . The Bondowners
Committee shall have full powers of substitutic° and delegation in
respect to any of the powers hereby granted.
Section 8.5. Direction of Actions of Bondowners Committee
by Owners of Majority of Bonds. The owners of not less than a
majority in principal amount of the Seco' - Lien Parity Bonds at the
time outstanding., may direct the time, method and place of
conducting any proceeding for any remedy available to the
Bondowners Committee, or exercising any trust or power conferred
upon the Bondowners Committee, provided that the Bondowners
Committee shall be provided with reasonable scrutiny and indemnity
and shall have the right to decline to follow any such direction
only (i) if the Bondowners Committee shall be advised by counsel
that the action or proceeding so directed may not lawfully be
taken; or (ii) if the Bondowners Committee in good faith shall
determine that the action or proceeding so directed would involve
the Bondowners Committee in personal liability or that the action
or proceeding so directed would involve the Bondowners Committee
in personal liability or that the action or proceeding so directed
would be unjustly prejudicial to the owners of Second Lien Parity
Bonds not parties to such direction.
•
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Section 8.6. Suits by Individual Bondowners. No owner of
any one or more of the Second Lien Parity Bonds shall have any
right to institute any action, suit or proceeding at law or in
equity for the enforcement of any provision of the Ordinance or the
execution of any trust under the Ordinance or for any remedy under
the Ordinance, unless an Event of Default shall have happened and
be continuing, and unless no Bondowners Committee has been created
as herein provided, but any remedy herein authorized to be
exercised by the Bondowners Committee, may be exercised
individually by any Bondowner, in his own name and on his own
behalf or for the benefit of all Bondowners, in the event no
Bondowners Committee has been created, or with the consent of the
Bondowners Committee, if such Bondowners Committee has been
created; provided, however, that nothing in the Ordinance or in the
Second Lien Parity Bonds shall affect or impair the obligation of
the City, which is absolute and unconditional, to pay at the
respective dates of maturity and places therein expressed the
principal of and premium, if any, and interest on the Second Lien
Parity Bonds to the respective owners thereof, or affect or impair
the rights of action, which are also absolute and unconditional,
of any owner to enforce the payment of his Second Lien Parity
Bonds, or to reduce to judgment his claim against the City for the
payment of the principal and interest on his Second Lien Parity
Bonds, without .reference to, or consent of, the Bondowners
Committee or any other owner of the Second Lien Parity Bonds.
4 11 0
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• Section 8.7. Waivers of Default.. No delay or omission of
the Bondowners Committee or of any Bondowner to exercise any right
or power arising upon the happening of an Event of Default shall
impair any right or power or shall be construed to be a waiver of
any such Event of Default or to be an acquiescence therein; and
every `power and remedy given by this Article to the Bondowners
Committee or to the Bondowners may be exercised from time to time
and as often as may be deemed expedient by the Bondowners Committee
or by such owners.
The Bondowners Committee or the owners of not less than fifty
percent (50 %) in principal amount of the Second Lien Parity Bonds
at the time Outstanding, or their attorneys -in -fact duly
authorized, may on behalf of the owners of all of the Second Lien
Parity Bonds waive any past default under the Ordinance and its
consequences; except a default in the payment of the principal of
and premium, if any, and interest on any of the Second Lien Parity
Bonds. No such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Section 8.8. Remedies Granted in Ordinance Not Exclusive.
No remedy by the terms of the Ordinance conferred upon or reserved
to the Bondowners Committee or the Bondowners is intended to be
exclusive of any other remedy, but each and every such remedy shall
be cumulative and shall be in addition to every other remedy given
under the Ordinance or existing at law or in equity or by statute
on or after the date of adoption of the Ordinance.
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ARTICLE IX
BONDOWNERS MEETINGS
Section 9.1. Call of Bondowners Meetings. The City, the
Bondowners Committee or the owners of not less than twenty percent
(20 %) in principal amount of the Second Lien Parity Bonds then
outstanding may at any time call a meeting of the owners of the
Second Lien Parity Bonds. Every such meeting shall be held at such
place in the City of Yakima, State of Washington, or in the City
of Seattle, State of Washington, as may be specified in the notice
calling such meeting. Written notice of such meeting, stating the
place and time of the meeting and in general terms the business to
be transacted, shall be mailed to the Bondowners by the City, the
Bondowners Committee or the Bondowners calling such meeting not
less than thirty (30) nor more than sixty (60) days before such
meeting, and shall be published at least once week for four (4)
successive calendar weeks on any day of the week, the date of first
publication to be not less than thirty (30) or more than sixty (60)
days preceding the meeting; provided, however, that the mailing of
such notice shall in no case be a condition precedent to the
validity of any action taken at any such meeting. The expenses of
publication of such notice shall be paid or reimbursed by the City.
Any meeting of Bondowners shall, however, be valid without notice
if the owners of all Second Lien Parity Bonds then Outstanding are
present in person or by proxy or if notice is waived before or
within thirty (30) days after the meeting by those not so present.
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•
Section 9.2. Notice to Bondowners. Except as otherwise
provided in the Ordinance, any provision in this Ordinance for the
mailing of a notice or other paper to Bondowners shall be fully
complied with if it is mailed postage prepaid to each registered
owner of any of the Second Lien Parity Bonds then outstanding at
his address, if any, appearing upon the Bond Register of the City,
and to each owner of any of such Second Lien Parity Bonds payable
to bearer who shall have filed with the City an address for
notices; and any provision in this Ordinance contained for
publication of a notice or other matter shall require the
publication thereof in The Daily Bond Buyer in the City of new
York, State of New York (or in lieu of publication in The Daily
Bond Buyer, in a daily newspaper printed in the English language
and customarily published on each business day and of general
circulation in the Borough of Manhattan. The City of New York,
State of New York), and also in a daily newspaper printed in the
English language and customarily published on each business day and
of general circulation in the City of Seattle, State of Washington.
Section 9.3. Proxies; Proof of Ownership of Second Lien
Parity Bonds. Attendance and voting by Bondowners at such meetings
may be in person or by proxy. Owners of Second Lien Parity Bonds,
by an instrument in writing under their hands, appoint any person
or persons, with full power of substitution, as their proxy to vote
at any meeting for them.
•
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Any registered owner of Second Lien Parity Bonds shall be
entitled in person or by proxy to attend and vote at such meeting
as owner of the Second Lien Parity Bonds registered or certified
in his name without producing such Second Lien Parity Bonds, and
such persons and their proxies shall, if required, produce such
proof of personal identity as shall be satisfactory to the
Secretary of the meeting. All proxies presented at such meeting
shall be delivered to the Inspectors of Votes and filed with the
Secretary of the meeting. All other persons seeking to attend or
vote in such meeting must produce the Second Lien Parity Bonds
claimed to be owned or represented at such meeting.
The vote at any such meeting of the owner of any Second Lien
Parity Bond entitled to vote thereat shall be binding upon such
owner and upon every such subsequent owner of such Second Lien
Parity Bond (whether or not such subsequent owner has notice
thereof).
Section 9.4. Execution of Instruments by Bondowners. Any
request, direction, consent or other instrument in writing required
or permitted by the Ordinance to be signed or executed by
Bondowners may be in any number of concurrent instruments of
similar tenor, and may be signed or executed by such Bondowners in
person or by agent appointed by an instrument in writing. Proof
of the execution of any such instrument shall be sufficient for any
purpose of this Ordinance if the fact and date of the execution by
any person of any such instrument may be proved by either (a) an
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acknowledgment executed by a notary public or other officer
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empowered to take acknowledgments of deeds to be recorded in the
particular jurisdiction, or (b) an affidavit of a witness to such
execution sworn to before such a notary public or other officer.
Where such execution is by an officer of a corporation or
association or a member of a partnership on behalf of such
corporation, association or partnership, such acknowledgment or
affidavit shall also constitute sufficient proof of his authority.
The foregoing shall not be construed as limiting the City to
such proof, it being intended that the City may accept any other
evidence of the matters herein stated which it may deem sufficient.
Any request or consent of any Bondowner shall bind every future
owner the same Second Lien Parity Bond in respect of anything
one by the City in pursuance of such request, direction or consent.
The right of a proxy for a Bondowner to act may be proved
(subject to the City's right to require additional proof) by a
written proxy executed by such Bondowner as aforesaid.
Section 9.5. Appointment of Officers at Bondowners Meetings.
Persons named by the City or elected by the owners of a majority
in principal amount of the Second Lien Parity Bonds represented at
the meeting in person or by proxy in the event the City is not
represented at such meting, shall act as temporary Chairperson and
temporary Secretary of any meeting of Bondowners. A permanent
Chairperson and a permanent Secretary of such meeting shall be
elected by the owners of a majority in .principal amount of the
•
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Bonds represented at such meeting in person or by proxy. The
P 9 P Y P Y
permanent Chairperson of the meeting shall appoint two (2)
Inspectors of Votes who shall count all votes cast at such meeting,
except votes on the election of Chairperson and Secretary as
aforesaid, and who shall make and file with the Secretary of the
meeting and with the City their verified report of all such votes
cast at the meeting.
Section 9.6. Ouorum at Bondowners Meetings. The owners of
not less than the principal amount of the Second Lien Parity Bonds
required for any action to be taken at such meeting must be present
at such meeting in person or by proxy in order to constitute a
quorum for the transaction of business, less than a quorum,
however, having power to adjourn from time to time without any
other notice than the announcement thereof at the meeting;
provided, however, that, if such meeting is adjourned by less than
a quorum for more than ten (10) days, notice thereof shall be
published by the City at least five (5) days prior to the adjourned
date of the meeting.
ARTICLE X
AMENDMENTS TO ORDINANCE
Section 10.1. Amendments.
(a) The Council from time to time and at any time may
pass an ordinance or ordinances amending this ordinance, which
ordinance or ordinances thereafter shall become a part of this
ordinance, for any one or more or all of the following purposes:
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• (1) To add to the covenants and agreements of the
City in this ordinance, other covenants and agreements thereafter
to be observed, which shall not adversely affect the interests of
the owners of any Second Lien Parity Bonds, or to surrender any
right or power herein reserved.
(2) To make such provisions for the purpose of
curing any ambiguities or of curing, correcting or supplementing
any defective provision contained in this ordinance or any
ordinance authorizing Additional Bonds in regard to matters or
questions arising under such ordinances as the Council may deem
necessary or desirable and not inconsistent with such ordinances
and which shall not adversely affect, in any material respect, the
interest of the owners of Second Lien Parity Bonds.
Any such amending ordinance may be adopted without the consent
of the owners of any Second Lien Parity Bonds at any time
outstanding, notwithstanding any of the provisions of
subsection (b) of this section.
(b) With the consent of the owners of not less than 65%
in aggregate principal amount of the Second Lien Parity Bond at the
time Outstanding, the Council may pass an ordinance or ordinances
supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this
ordinance or of any amending ordinance; provided, however, that no
such amending ordinance shall:
•
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(1) Extend the fixed maturity of any Second Lien
Parity Bonds, or reduce the rate of interest thereon, or extend the
time of payment of interest from their due date, or reduce the
amount of the principal thereof, or reduce any premium payable on
the redemption thereof, without the consent of the owner of each
bond so affected; or
(2) Reduce the aforesaid percentage of Bondowners
required to approve any such amending ordinance, without the
consent of the owners of all of the Second Lien Parity Bonds then
Outstanding.
It shall not be necessary for the consent of Bondowners under
this subsection (b) to approve the particular form of any proposed
supplemental ordinance, but it shall be sufficient if such consent
shall approve the substance thereof.
(c) Upon the adoption of any ordinance pursuant to the
provisions of this Section, this ordinance shall be deemed to be
modified and amended in accordance therewith, and the respective
rights, duties ad obligations of the City under this ordinance and
all owners of Second Lien Parity Bonds outstanding hereunder shall
thereafter be determined, exercised and enforced thereunder,
subject in all respects to such modification and amendments, and
all terms and conditions of any such supplemental ordinance shall
be deemed to be part of the terms and conditions of this ordinance
for any and all purposes.
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( d ) Parity Second Lien Parit Bonds executed and delivered
after the execution of any amending ordinance passed pursuant to
the provisions of this section may have a notation as to any matter
provided for it such amending ordinance, and if such supplemental
ordinance shall so provide, new bonds so modified as to conform,
in the opinion of the Council, to any modification of this
Ordinance contained in any such supplemental ordinance, may be
prepared and delivered without cost to the owners of any affected
Second Lien Parity Bonds then outstanding, upon surrender for
cancellation of such bonds with all unmatured coupons and all
matured coupons not fully paid, in equal aggregate principal
amounts.
Section 10.2. Obtaining Approval of Amendments at Bondowners
Meeting. The City may at any time adopt an ordinance amending the
provisions of this ordinance to the extent that such amendment is
permitted by the provisions of this Article X, to take effect when
and as provided in this Section. At any time thereafter such
ordinance may be submitted by the City for approval to a meeting
of the bondowner duly convened and held in accordance with the
provisions of this ordinance. A record in duplicate of the
proceedings of each meeting of the Bondowners shall be prepared by
the permanent Secretary of the meeting and shall have attached
thereto the original reports of the Inspectors of Votes and
affidavits by a person or persons having knowledge of the facts,
showing a copy of the notice of the meeting and setting forth the
•
-85- ASR313 91/07/11
facts with respect to the mailing and publication thereof under the
provisions of the ordinance. Such a record shall be signed and
verified by the affidavits of the permanent Chairperson and the
permanent Secretary of the meeting, and one duplicate thereof shall
be delivered to the City. Any record so signed and verified shall
be proof of the matter therein stated. If the ordinance of the
City making such amendment shall be approved by a resolution duly
adopted at such meeting of bondowners by the affirmative vote of
the owners of the required percentages of Second Lien Parity Bonds,
a notice stating that a resolution approving such amendment has
been so adopted shall be mailed by the City to each bondholder who
has requested such notice (but failure so to mail copies of such
notice shall not affect the validity of such resolution) and shall
4 11 0
be published at lest once in the manner provided in Section 9.2
hereof. Proof of such mailing and publication by the affidavit or
affidavits of a person or persons having knowledge of the facts
shall be filed with the City. Such ordinance of the City making
such amendment shall be deemed conclusively to be binding upon the
City, the paying agents, and the owners of all Second Lien Parity
Bonds at the expiration of thirty (30) days after the publication
of the notice provided for in this Section, except in the event of
a final decree of a court of competent jurisdiction setting aside
such ordinance or annulling the action taken thereby in a legal
action or equitable proceeding for such purpose commenced within
such period; provided that the City and any paying agents during
-86- ASR313 91/07/11
•
such thirty (30) day period and any such further period during
which such action or proceeding may be pending shall be entitled
in their absolute discretion to take such action, or to refrain
from taking such action, with respect to such ordinance as they may
deem expedient. Nothing in this ordinance contained shall be
deemed or construed to authorize or permit, by reason of any call
of a meeting of Bondowners or of any right conferred hereunder to
make sucn a call, any hindrance or delay in the exercise of any
rights conferred upon or reserved to the paying agents or the
Bondowners under any of the provisions of this ordinance.
Section 10.3. Alternate Method csb Obtaining Approval of
Amendments. The City may at any time adopt an ordinance amending
the provisions of this ordinance, or of any Second Lien Parity
Bonds, to the extent that such amendment is permitted by the'
provisions of this Article, to take effect when and as provided in
this Section. Upon ado 'pion of such ordinance, a request that
Bondowners consent thereto shall be mailed by the City to the
Bondowners and notice that the City is requesting Bondowners to
consent to such amendment shall be published at least once in the
manner provided in Section 9.2 hereof. Such orda: shall not
be effective unless and until there shall have been filed with the
City the written consents of the percentages of owners of
outstanding Bonds specified herein and a notice shall have been
published as hereinafter in this Section provided. Each such
consent shall be effective only if accompanied by proof of
IP
-87- ASR313 91/07/11
is
i
ownership of the Second Lien Parity Bond for which such consent
given. A certificate or certificates of the Clerk of the City that
he has examined such proof and that such proof is sufficient shall
be conclusive that the consents have been given by the owners of
the Second Lien Parity Bonds described in such certificate or
certificates. Any such consent shall be binding upon the owner of
the Second Lien Parity Bonds giving such consent and on every
subsequent owner of such Second Lien Parity Bonds (whether or not
such subsequent owner has notice thereof). A notice stating that
the ordinance has been consented to by the owners of the required
percentages of Bonds and will be effective as provided in this
Section, may be given to the Bondowners by mailing such notice to
the bondholders, and shall be given by publishing the same at least
once in the manner provide din Section 9.2 hereof. A record,
consisting of the papers required by this Section to be filed with
the City shall e proof of the matters therein stated, and this
ordinance shall be deemed conclusively to be binding upon the City
and the owners of all Second Lien Parity Bonds at the expiration
of thirty (30) days after the notice last provided for in this
Section, except in the event of a final decree of a court of
competent jurisdiction setting aide such consent or annulling the
action taken thereby in a legal action or equitable proceeding for
such purpose commenced, within such period.
Section 10.4. Amendment of Ordinance in Anv Respect by
Approval of All Bondowners. Notwithstanding anything contained in
-88- ASR313 91/07/11
the foregoing provisions of this Article, the rights and
obligations of the City and of the owners of the Second Lien Parity
Bonds, and the terms and provisions of the Second Lien Parity Bonds
and of this ordinance, may be amended in any respect with the
consent of the City, by the affirmative vote of the owners of all
said Bonds then OUtstanding at a meeting of Bondowners called and
held as hereinabove provided, or upon the adoption of an ordinance
by the City and the consent of the owners of all the Second Lien
Parity Bonds then Outstanding, such consent to be given as provided
in Section 10.3 except that no notice to bondowners either by,
mailing or publication shall be required, and the amendment shall
be effective immediately upon such unanimous vote or written
consent of all of the Bondowners.
Section 10.5. Exclusion of Bonds Owned by City. Second Lien
Parity Bonds owned or held by or for the account of the City shall
not be deemed Outstanding for the purpose of any vote or consent
or other action or any calculation of Outstanding Bonds in this
ordinance provided for, and shall not be entitled to vote or
consent or take any other action in this ordinance provided for.
Section 10.6. Endorsement of Amendment on Bonds. Second Lien
Parity Bonds delivered after the effective date of any action
amending this ordinance taken as hereinabove provided may bear a
notation by endorsement or otherwise as to such action, and in that
case upon demand of the owner of any Second Lien Parity Bond
Outstanding at such effective date and presentation of his Second
•
-89- ASR313 91/07/11
Lien Parity Bond for that purpose office
y p rpos at the principal of the
paying agents, suitable notation shall be made on such Second Lien
Parity Bond by the paying agent as to any such action. If the City
shall so determine, new Second Lien Parity Bonds so modified as in
the opinion of the City and its counsel to conform to such action
shall be prepared, delivered and upon demand of the owner of any
Second Lien Parity Bond then outstanding shall be exchanged without
cost to such Bondowner for Second Lien Parity Bonds then
outstanding hereunder, upon surrender of such Bonds with any
unmatured coupons pertaining thereto.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Severability. If any one or more of the
covenants or agreements provided in this ordinance to be performed
on the part of the City shall be declared by any court of competent
jurisdiction to be contrary to law, then such covenant or
covenants, agreement or agreements, shall be null and void and
shall be deemed separable from the remaining covenants and
agreements in this ordinance and shall in no way affect the
validity of the other provisions of this ordinance or of any Second
Lien Parity Bonds.
Section 11.2. General Authorization. The Mayor and Director
of Finance and Budget, and each of the other appropriate officers,
agents and representatives of the City are each hereby authorized
and directed to take such steps, to do such other acts and things,
410,
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•
and to'execute such letters, certificates, agreements, papers,
financing statements, assignments or instruments as in their
judgment may be necessary, appropriate or desirable in order to
carry out the terms and provisions of, and complete the
transactions contemplated by this ordinance.
Section 11.3. Ordinance and Laws a Contract with Bondowners.
This ordinance is adopted under the authority of and in full
compliance with the Constitution and laws of the State of
Washington, as amended and supplemented. In consideration of the
purchase and acceptance of the Second Lien Parity Bonds by those
who shall hold the same from time to time, the provisions of this
Ordinance and of any supplemental ordinance authorizing the
issuance of Additional Bonds and of said laws shall constitute a
contract with the owner or owners of each Second Lien Parity Bond
and any coupons attached thereto, and the obligations of the City
and its Council under said acts and under this ordinance shall be
enforceable by any court of competent jurisdiction; and the
covenant and agreements herein set forth to be performed on behalf
of the City shall be for the equal benefit, protection and security
of the owners of any and all of said Second Lien Parity Bonds, all
of which, regardless of the time or times of their issue or
maturity, shall be of equal rank without preference, priority or
distinction of any of said Second Lien Parity Bonds attached over
any others thereof except as expressly provided herein.
-91- ASR313 91/07/11
Section 11.4. Benefits of Ordinance Limited to City,
and Paving Agents. Nothing in this ordinance,
expressed or implied, is intended or shall be construed to confer
upon or give to any person or corporation other than the City, the
Registrar, the Paying Agent and the owners from time to time of the
1991 Bonds any rights, remedies or claims under or by reason of
this Ordinance or any covenant, condition or stipulation thereof;
and all the covenants, stipulations, promises and agreements in
this ordinance contained by or on behalf of the City shall be for
the sole and exclusive benefit of the City, the Registrar, the
Paying Agents and the owners from time to time of the 1991 Bonds.
Section 11.5. Article and Section Headings; Table and
Contents. The headings or titles of the several Articles and
410
Sections hereof, and any table of contents appended hereto or to
copies hereof shall be solely for convenience of reference and
shall not affect the meaning or construction, interpretation or
effect of this ordinance.
Section 11.6. Prior Acts. All acts taken pursuant to the
authority of this ordinance but prior to its effective date are
hereby ratified and confirmed.
Section 11.7. Effective Date. This ordinance shall be
effective thirty (30) days after its passage, approval and
publication as provided by law.
- 92 - ASR313 91/07/11
• ADOPTED by the Council of the City of Yakima at a regular
meeting thereof, held this 16th day of July, 1991.
CITY OF YAKIMA, WASHINGTON
By
Mayor
ATTEST:
City Clerk
APPROVED AS 0 FORM:
0
1 T y Attorney
•
•
-93- ASR313 91/07/11
EXHIBIT A
FORM OF BOND
UNITED STATES OF AMERICA
No. $
STATE OF WASHINGTON
CITY OF YAKIMA, WASHINGTON
WATER AND SEWER REVENUE BOND, 1991
INTEREST RATE: MATURITY DATE: CUSIP NO.:
SEE REVERSE SIDE FOR
CERTAIN ABBREVIATIONS
Registered Owner:
•
Principal Amount: DOLLARS
The City of Yakima, Washington, a municipal corporation of
the State of Washington (hereinafter called the "City), hereby
acknowledges itself to owe and for value received promises to pay
to the Registered Owner identified above, or registered assigns,
on the Maturity Date identified above, the Principal Amount
indicated above and to pay interest thereon from August 1, 1991,
or the most recent date to which interest has been paid or duly
provided for, until payment of this bond at the Interest Rate set
forth above, payable on March 1, 1992, and semiannually thereafter
on the first days of September and March. Both principal of and
interest on this bond are payable in lawful money of the United
States of America. Interest shall be paid by mailing a check or
draft (on the date such interest is due) to the registered owner
or assigns at the address shown on the Bond Register as of the 15th
day of the month prior to the interest payment date. Principal
shall be paid to the registered owner or assigns upon presentation
and surrender of this bond at the office of the fiscal agency of
•
A-1 ASR313 91/07/11
the State of Washington in either Seattle, Washington or New York,
New York (the "Bond Registrar ").
Reference is hereby made to additional provisions of this bond
set forth on the reverse side hereof and such additional provisions
shall for all purposes have the same effect as if set forth in this
space.
This bond shall not be valid or become obligatory for any
purpose or be entitled to any security or benefit under the Bond
Ordinance (as hereinafter defined) until the Certificate of
Authentication hereon shall have been manually signed by the Bond
Registrar.
It is hereby certified that all acts, conditions and things
required by the Constitution and statutes of the State of
Washington to exist, to have happened, been done and performed
precedent to and in the issuance of this bond have happened, been
done and performed and that the issuance of this bond and the bonds
of this series does not violate any constitutional, statutory or
other limitation upon the amount of bonded indebtedness that the
City may incur.
IN WITNESS WHEREOF, the City of Yakima, Washington, has caused
this bond to be signed with the facsimile signature of the Mayor
and attested by the facsimile signature of the City Clerk, and the
seal of the City to be impressed or a facsimile thereof to be
imprinted hereon, as of this first day of August, 1991.
/Mayor
ATTEST:
City Clerk
A-2 ASR313 91/07/11
•
CERTIFICATE OF AUTHENTICATION
This bond is one of the bonds described in the within -
mentioned Bond Ordinance and is one of the Water and Sewer Revenue
Bonds,. 1991 of the City, dated August 1, 1991.
WASHINGTON STATE FISCAL AGENCY
By
Authorized Officer
ADDITIONAL PROVISIONS
This bond is one of an authorized issue of bonds of like date
and tenor, except as to number, amount, rate of interest and date
of maturity in the aggregate principal amount of $ and
designated as "City of Yakima, Washington, Water and Sewer Revenue
Bonds, 1991" (the "Bonds ").
The. Bonds are issued under and in accordance with the provi-
sions of_ the Constitution and applicable statutes of the State of
• Washington and Ordinance No. and Resolution No.
(together the "Bond. Ordinance ") of the City. The Bonds are issued
for the purpose of providing part of the funds necessary to redeem
and retire the City's Water and Sewer Revenue Bonds, 1983 and to
pay part of the costs incurred in making certain additions to the
water and sewer system (the "System ") of the City.
[The Bonds are subject to redemption at the option of the City
on or after , in whole at any time, or in part on
any interest payment date, at a price of par, plus accrued interest
to the redemption date. If less than all of the 1991 Bonds subject
to redemption are called for redemption, the City shall choose the
maturities to be redeemed. If less than all the 1991 Bonds of an
entire maturity are to be redeemed, the 1991 Bonds to be redeemed
shall be chosen by lot.]
[The Bonds maturing on 1, 2011 (which shall be
deemed to be Term Bonds) are subject to redemption prior to
maturity by lot (or paid at maturity) on March 1 in the years
through , inclusive, from amounts credited to the Term Bond
Principal Account in the Bond Fund to meet Sinking Fund
Requirements therefor (to the extent such amounts have not been
used to redeem or purchase such Bonds as provided in the Bond
Ordinance) and in the principal amounts as set forth below, upon
written notice as provided hereinafter, by payment of the principal
•
A-3 ASR313 91/07/11
amount thereof, together with the interest accrued thereon to the
date fixed for redemption.]
[Bond insurance provisions, if required.]
Year Amount
Notice of any such intended redemption as provided above shall
be given not less than thirty (30) nor more than sixty (60) days
prior to said redemption date by first class mail, postage prepaid,
to the registered owner of any bond to be redeemed at the address
appearing on the Bond Register. The requirements of the Bond
Ordinance shall be deemed to be complied with when notice is mailed
as herein provided, regardless of whether or not it is actually
received by the owner of any bond. Interest on any bond so called
for redemption shall cease on such redemption date unless the same
is not paid in full upon presentation made pursuant to such call.
Portions of the principal sum of this bond in installments of
$5,000 or any integral multiple thereof may also be redeemed at the
times set forth above, and if less than all of the principal sum
hereof is to be redeemed, upon the surrender of this bond at the
principal office of the Bond Registrar there shall be issued to the
registered owner, without charge therefor, for the then unredeemed
balance of the principal sum hereof, at the option of the owner,
a bond or bonds of like maturity and interest rate in any of the
denominations authorized by the Bond Ordinance.
The City hereby irrevocably covenants and agrees with the
registered owner of this bond that it will keep and perform all the
covenants of this bond and of the Bond Ordinance to be by it kept
and performed. Reference is hereby made to the Bond Ordinance for
a complete statement of such covenants, for the terms and
conditions upon which the Bonds have been issued and upon which
Additional Bonds may be issued, for the terms and conditions upon
which this bond shall no longer be secured by the Bond Ordinance
or deemed to be outstanding thereunder, and for the definition of
capitalized terms used herein.
The City has pledged and bound itself to pay into the Water
and Sewer Operating Funds (the "Revenue Fund "), as collected, all
of the Gross Revenues derived by the City from the operation of the
System. The City by the Bond Ordinance has further pledged and
bound itself to set aside from the money in the Revenue Fund and
to pay into the Bond Fund and the Accounts therein certain fixed
amounts sufficient to pay the principal, premium, if any, and
interest on the Bonds and all other Second Lien Parity Bonds as the
A-4 ASR313 91/07/11
same become due. As security for the payment of the principal of,
premium, if any, and interest on all Second Lien Parity Bonds the
City has pledged (i) the proceeds of the sale of Parity Bonds to
the extent held in funds established or continued by the Bond
Ordinance, (ii) Gross Revenues and (iii) the moneys and assets
credited to the Revenue Fund and the Bond Fund and the income
therefrom. The pledge of Gross Revenues and moneys and assets
credited to the Revenue Fund and Bond Fund constitutes a lien and
charge on said Gross Revenues and said Funds subject to prior
application for payment of Costs of Maintenance and Operation and
junior to the lien and charge securing the First Lien Parity Bonds,
equal in rank to the lien and charge securing payment of Second
Lien Parity Bonds, but superior to all other charges of any kind
or nature.
The Bonds are interchangeable for bonds of any authorized
denomination of equal aggregate principal amount and of the same
interest rate and maturity upon presentation and surrender to the
Bond Registrar.
The following abbreviations, when used in the inscription on
the face of the within bond, shall be construed as though they were
written„.out in full according to applicable laws or regulations.
• EN C - as tenants in common
T OM
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with
right of survivorship and
not as tenants in common
UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
under Uniform Gifts to Minors
Act
(State)
Additional abbreviations may also be used though not in list
above.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(Please print or typewrite name and address, including zip code,
of Transferee)
•
A - 5 ASR313 91/07/11
PLEASE INSERT SOCIAL SECURITY OR
TAXPAYER IDENTIFICATION NUMBER OF TRANSFEREE
the
within bond and does hereby irrevocably constitute and appoint
attorney in fact, to transfer said bond on the registration books
kept of the Bond Registrar with full power of substitution in the
premises.
DATED:
SIGNATURE GUARANTEED:
NOTE: The signature on this
Assignment must correspond with the
4 10
name of the registered owner as it
appears upon the face of the within
bond in every particular, without
alteration or enlargement or any
change whatever.
4 11 0
A-6 ASR313 91/07/11
• CLERK'S CERTIFICATE
I, the undersigned, the duly chosen, qualified and acting
Clerk of the City of Yakima, Washington (the "City "), and keeper
of the records of the Council of the City - (herein called the
"Council "), DO HEREBY CERTIFY:
1. That the attached Ordinance No. (the "Ordinance ")
is a true and correct copy of an ordinance of the City, as finally
passed at a regular meeting of the Council held on the 16th day of
July, 1991, and duly recorded in my office.
2. That said meeting was duly convened and held in all
respects in accordance with law and to the extent required by law,
due and proper notice of such meeting was given; that a quorum was
• present throughout the meeting and a legally sufficient number of
members of the Council voted in the proper manner for the passage
of the Ordinance; that all other requirements and proceedings
incident to the proper passage of the Ordinance have been duly
fulfilled, carried out and otherwise observed, and that I am
authorized to execute this certificate.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the official seal of the City this day of
19
City Clerk
City of Yakima, Washington
(S E A L)
r
EXHIBIT B
• ESCROW AGREEMENT
THIS AGREEMENT, dated as of August 1, 1991, is entered into
between the City of Yakima, Washington (the "City ") and Security
Pacific Bank Washington, N.A. (the "Escrow Agent ").
W I T N E S S E T H:
WHEREAS, the City has previously issued its Water and Sewer
Revenue Bonds, 1983 in the original aggregate principal amount of
$4,050,000 (the "1983 Bonds ") pursuant to Ordinance No. 2677
adopted March 8, 1983. The principal amount of $3,235,000 of the
1983 Bonds is presently outstanding. Ordinance No. 2677 authorizes
the City to call for redemption of the 1983 Bonds maturing on
March 1, 1994 through March 1, 2003, aggregating $2,920,000 in
principal amount (the "Refunded Bonds "), on March 1, 1993, at a
redemption price of 102% of the principal amount thereof plus
accrued interest to the date of redemption; and
WHEREAS, pursuant to section 3.12 of Ordinance No. ,
authorizing the issuance of the City's Second Lien Water and Sewer
Revenue Bonds, Series 1991 (the "Refunding Bonds ") the City has
irrevocably called for the redemption, on March 1, 1993, of the
• Refunded Bonds; and
WHEREAS, the City now desires to defease and refund the
Refunded Bonds, which will be accomplished pursuant to this Escrow
Agreement (including the Schedules attached hereto), and in
accordance with Ordinance No. 2677 and Ordinance No.
(together, the "Ordinances') (which documents, and the relevant
provisions thereof, are referred to collectively as the "Defeasance
Plan "), which provide, inter alia, for (a) the creation of an
Escrow Deposit Trust Fund (the "Escrow Fund ") of the City to be
held by the Escrow Agent; (b) the purchase of non - callable
government securities ( "Government Obligations "), listed on
Schedule A attached hereto in such principal amounts and bearing
such dates of maturity and such rates of interest as are calculated
to provide a maturing cash flow, which, together with the initial
cash deposits, is sufficient to pay the principal of and interest
on the 1983 Bonds as the same become due in accordance with the
schedule of such payments set forth in Schedule B attached hereto;
(c) the payment by the Escrow Agent for the Government Obligations
listed on Schedule A on the Defeasance Date with moneys deposited
with the Escrow Agent on such date; (d) the receipt by the Escrow
Agent of the maturing installments of principal of and interest on
such Government Obligations; and (e) the Escrow Agent's payment
from time to time to the Paying Agent (as hereinafter defined) for
the 1983 Bonds of money sufficient for the payment, when due, of
the principal of and interest on the 1983 Bonds and for the payment
•
on March 1, 1993 of principal of, premium and interest on the
Refunded Bonds; and
WHEREAS, pursuant to the Ordinance the City has duly and
validly authorized the execution and delivery of the documents
necessary for the carrying out of the Defeasance Plan, including,
among others, this Escrow Agreement;
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter contained, for the benefit of the holders of the 1983
Bonds, the parties hereto covenant as follows:
Section 1. Funding of Escrow Fund. On August 19, 1991 (the
"Defeasance Date "), the Escrow Agent shall receive from the City
proceeds of the Refunding Bonds in the amount of $
which represents the amount required to purchase the Government
Obligations as set forth in Schedule A attached hereto, and to
establish any necessary beginning cash balance. All cash deposits
shall be held in legal currency of the United States or shall be
collateralized by direct obligations of the United States of
America or shall be held in an account insured by the Federal
Deposit Insurance Corporation.
Section 2. Investment of Money in Escrow Fund.
(a) On the Defeasance Date, the Escrow Agent shall apply
$ of the money delivered to it by the City pursuant
to Section 1 hereof to purchase the non - callable Government Obliga-
tions described in Schedule A attached hereto.
(b) Upon the written direction of the Chief Financial
Officer of the City, but subject to the conditions and limitations
herein set forth and applicable government rules and regulations,
the Escrow Agent shall purchase substitute non - callable Government
Obligations (the "Substitute Obligations ") with the proceeds
derived from (i) the sale, transfer, redemption or other dispo-
sition of the Government Obligations initially purchased or the
Substitute Obligations or (ii) the reinvestment proceeds of the
Government Obligations initially purchased or the Substitute
Obligations. The sale, transfer, redemption or other disposition
of Government Obligations and such substitution may be effected
only by a simultaneous transaction and only if a nationally
recognized firm of independent certified public accountants shall
certify that (A) the Substitute Obligations, together with the
Government Obligations that will continue to be held in the Escrow
Fund, will mature in such principal amounts and earn interest in
such amounts and at such times so that, with other money in the
Escrow Fund, sufficient money will be available to pay, as the same
become due, the principal of and interest on the Refunded Bonds
that have not previously been paid, and (B) the amounts and dates
-2- ASR319 91/07/11
• of the anticipated payments by the Escrow Agent of interest on the
Refunded Bonds will not be diminished or postponed thereby.
(c) In the event that the Escrow Agent shall receive,
either upon maturity or redemption of Government Obligations, or
otherwise, money into the Escrow Fund that is not subject to
immediate disbursement for payment of the principal of or interest
on the Refunded Bonds, the Escrow Agent shall forthwith deposit
such money into the Escrow Fund. At the written direction of the
City, the Escrow Agent shall (i) invest such money at an
unrestricted yield solely in Substitute Obligations, or (ii) if
such money cannot be invested in Substitute Obligations, such money
shall be held uninvested in the Escrow Fund. If such money is
invested in Substitute Obligations, the maturity date of Substitute
Obligations must be no later than the date on which such moneys are
needed (as determined by reference to the most recent verification
addressed to the City and the Escrow Agent by a nationally
recognized firm of certified public accountants) for payment of
debt service on the Refunded Bonds or for reinvestment pursuant to
° subsection (b) of this Section 2. The Escrow Agent shall not cause
any amounts described in this subsection (c) to be. invested in a
manner other than pursuant to a written direction of the City as
provided in this subsection (c).
Section 3. Collection of Proceeds of Government Obligations
4111 and Application of Such Proceeds-and Money. The Escrow Agent shall
present for payment and shall collect and receive, on the due dates
thereof, the maturing installments of principal of and the interest
on the Government Obligations and any Substitute Obligations held
for the account of the Escrow Fund.
From the proceeds of such Government Obligations and any
Substitute Obligations and other money held by the Escrow Agent,
the Escrow Agent shall make timely payment from time to time to the
Paying Agent (as hereinafter defined) of the amounts of principal
and interest on the Refunded Bonds to be paid on the respective
dates as shown on Schedule B attached hereto and fully incorporated
herein by this reference.
The paying agents for the Refunded Bonds are the City and the
fiscal agencies of the State of Washington in Seattle, Washington
and New York, New York. Said paying agents are collectively
referred to herein as the "Paying Agent."
Section 4. All Investments and Money and Proceeds Thereof
Held in Trust. The Escrow Agent hereby irrevocably agrees to hold
the Government Obligations and any Substitute Obligations, if any,
and other money that it may receive pursuant to this Agreement, and
the principal and interest thereof and thereon, and any
reinvestments thereof, in trust and separate from all other funds
110
-3- ASR319 91/07/11
and investments held by the Escrow Agent, solely for the purpose
of making the payments described in Section 3 hereof. With the
exception of excess money described in Section 6 hereof, the City
hereby irrevocably transfers to the Escrow Agent the Government
Obligations and any Substitute Obligations and the principal
thereof and the interest thereon, and any other funds deposited
with the Escrow Agent pursuant to this Agreement, for the purpose
of making such payments. Except as provided in Sections 2 and 6
hereof, the Escrow Agent shall not sell, transfer, assign or
hypothecate such funds, money and obligations, for any purpose
whatsoever, including payment of excess earnings to the United
States Treasury.
Section 5. Reports and Notices.
(a) For as long as any of the Refunded Bonds remain out-
standing, on or prior to the fifteenth day of the month following
the date on which each payment of debt service on the Refunded
Bonds becomes due, the Escrow Agent shall render statements to the
City setting forth the Government Obligations and any Substitute
Obligations held hereunder by the Escrow Agent, any of such
Obligations that have matured and amounts received by the Escrow
Agent by reason of such maturity, the interest earned on such
Obligations, a list of any investments or reinvestments made by the
Escrow Agent in other such Obligations and the interest and /or
principal derived therefrom, the sums paid to the Paying Agent, and
411
any other transactions of the Escrow Agent pertaining to its duties
and obligations as set forth herein. In the event the maturity of
principal and interest of the Government Obligations and other
money held by the Escrow Agent pursuant to this Escrow Agreement
shall at any time be insufficient to make a payment described in
Section 3, the Escrow -Agent shall give the City prompt notice of
such insufficiency, and shall deliver promptly to the City a
written request to deposit with the Escrow Agent, sums sufficient
to make the payments described in Section 3. Any written request
made to the City pursuant to this Section 5 need be based only on
said reports.
(b) The Escrow Agent shall publish and mail proper and timely
notices, in accordance with Ordinances No. 2677 and No. of
the City, of the redemption of the Refunded Bonds. The cost of
such publication and mailing shall be part of the compensation of
the Escrow Agent for ordinary services provided for in Section 12.
Section 6. Surplus Money in Escrow. If at any time during
the term of the escrow created pursuant to this Agreement, there
are Government Obligations, Substitute Obligations and /or money
held by the Escrow Agent that are in excess of that required to
make all of the payments described in Section 3, when due, con-
sidering the earnings to be realized on the investment of such
-4- ASR319 91/07/11
• obligations, and the City directs in writing that such surplus
obligations or the proceeds thereof or such surplus money be
returned by the Escrow Agent to the City, then the Escrow Agent
shall do so at the times directed in writing by the City, provided,
however, that before the return of any surplus to the City other
than money earned on reinvestment in Substitute Obligations
pursuant to Section 2(c) hereof that is surplus to the amounts
shown on column 5 of Schedule C hereto, the Escrow Agent may at its
sole discretion require the City to furnish the Escrow Agent a
supplemental verification addressed to the City and the Escrow
Agent by a nationally recognized firm of certified public
accountants that the investments and other money to be retained by
the Escrow Agent for the purpose of making the payments described
in Section 3 will be adequate to make all such payments.
Section 7. Agreement to Remain in Force. The Escrow Agent
and the City recognize that the holders from time to time of the
Refunded Bonds have a beneficial interest in the investments and
money to be held by the Escrow Agent as herein provided. It is
therefore understood and agreed that this Escrow Agreement shall
not be subject to revocation or amendment except for the purpose
of (1) clarifying any ambiguity herein or (2) strengthening the
protection for the owners of the Refunded Bonds or
(3) strengthening the security of the Escrow Fund.
Section 8. Prior Approval. The City and the Escrow Agent
shall give notice to Moody's Investors Service and Standard &
Poor's Corporation prior to (1) any revocation of this Escrow
Agreement with the consent of one hundred percent (100 %) of the
owners of outstanding Refunded Bonds, (2) any amendment of
severance of provisions of this Escrow Agreement by reason of
invalidity, illegality or unenforceability.
Section 9. Limitation of Escrow Agent Duties. None of the
provisions contained in this Escrow Agreement shall require the
Escrow Agent to use or advance its own funds or otherwise incur
personal financial liability in the performance of any of its
duties or the exercise of any of its rights or powers hereunder.
The Escrow Agent shall be under no liability for interest on any
funds or other property received by it hereunder, except as herein
expressly provided.
The Escrow Agent's obligations in connection with this Escrow
Agreement are confined to those specifically described herein and
in the Ordinance. The Escrow Agent is authorized to comply with
the requirements of this Escrow Agreement. The Escrow Agent shall
not be responsible or liable for the sufficiency, correctness,
genuineness or validity of any instruments deposited with it; for
the form of execution thereof or the identity, authority or rights
of any person executing or depositing the same; or for the
-5- ASR319 91/07/11
performance or compliance by any party other than the Escrow Agent
011
with the terms or conditions of any such instruments. If any
controversy arises between the parties hereto or with any third
person, the Escrow Agent shall not be required to determine the
same or to take any action in the premises, but it may, in its
discretion, institute such interpleader or other proceedings in
connection therewith as it may deem proper.
Section 10. Indemnification of Escrow Agent. To the extent
permitted by law, the City hereby assumes liability for, and hereby
agrees (whether or not any of the transactions contemplated hereby
are consummated) to indemnify, protect, save and keep harmless the
Escrow Agent and its respective successors, assigns, agents,
employees and servants, from and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, suits,
costs, expenses and disbursements (including reasonable legal fees
and disbursements) of whatsoever kind and nature which may be
imposed on, incurred by, or asserted against, the Escrow Agent at
any time (whether or not also indemnified against the same by the
City or any other person under any other agreement or instrument,
but without double indemnity) in any way relating to or arising out
of the execution, delivery and performance of this Agreement, the
establishment hereunder of the Escrow, the acceptance of the funds
and securities deposited therein, the purchase of any securities
to be purchased pursuant thereto, the retention of such securities
or the proceeds thereof and any payment, transfer or other
application of moneys or securities by the Escrow Agent in
accordance with the provisions of this Agreement; provided,
however, that the City shall not be required to indemnify the
Escrow Agent against the Escrow Agent's own negligence or willful
misconduct of the Escrow Agent's respective successors, assigns,
agents and employees or the material breach by the Escrow Agent of
the terms of this Agreement. In no event shall the City or the
Escrow Agent be liable to any person by reason of the transactions
contemplated hereby other than to each other as set forth in this
Section 10. The indemnities contained in this Section shall
survive the termination of this Agreement.
Section 11. Remission of Funds When Refunded Bonds Paid in
Full. At such time as the Escrow Agent shall have received the
representations of the City that all of the payments described in
Section 3 have been made, together with such evidence of payment
of the Refunded Bonds as is satisfactory to the Escrow Agent, the
Escrow Agent shall deliver forthwith or remit to the City any
remaining Government Obligations, Substitute Obligations and money
held pursuant to this Agreement.
Section 12. Compensation of the Escrow Agent. The payment
arrangement heretofore made between the Escrow Agent and the City
as to compensation and expenses for services rendered by the Escrow
-6- ASR319 91/07/11
• Agent pursuant to the provisions of this Escrow Agreement is
satisfactory to the Escrow Agent and to the City. Such arrangement
for compensation and expenses is intended as compensation for the
ordinary services as contemplated by this Escrow Agreement, and in
the event that the Escrow Agent renders any service hereunder not
provided for in this Escrow Agreement, or the Escrow Agent is made
a party to or intervenes in any litigation pertaining to this
Escrow Agreement or institutes interpleader proceedings relative
hereto, the Escrow Agent shall be reasonably compensated by the
City for such extraordinary services and reimbursed for all fees,
costs, liability and expenses (including reasonable attorneys' fees
and expenses) occasioned thereby. In no event shall the Escrow
Agent be entitled to payment of any fee or cost out of the moneys
or securities held by it in trust hereunder.
Section 13. Successor Escrow Agent. The Escrow Agent at the
time acting hereunder may at any time resign and be discharged from
the trusts hereby created by giving not less than sixty (60) days'
written notice to the City, but no such resignation shall take
effect unless a successor Escrow Agent shall have been appointed
by the City as hereinafter provided and such successor Escrow Agent
shall have accepted such appointment, in which event such
resignation shall take effect immediately upon the appointment and
acceptance of a successor Escrow Agent.
,• The Escrow Agent may be removed at any time by an instrument
in writing, delivered by the City to the Escrow Agent.
In the event the Escrow Agent hereunder shall resign or be
removed, or be dissolved, or shall be in the course of dissolution
or liquidation, or otherwise become incapable of acting hereunder,
or in case the Escrow Agent shall be taken under the control of any
public officer or officers, or of a receiver appointed by a court,
a successor may be appointed by the City.
In the event that no appointment of a successor Escrow Agent
shall have been made by the City pursuant to the foregoing
provisions of this Section within sixty (60) days after written
notice of resignation of the Escrow Agent has been given to the
City, the holder of any of the Refunded Bonds or the retiring
Escrow Agent may apply to any court of competent jurisdiction for
the appointment of a successor Escrow Agent, and such court may
thereupon, after such notice, if any, as it shall deem proper,
appoint a successor Escrow Agent.
No successor Escrow Agent shall be appointed unless such
successor Escrow Agent shall meet the requirements of Section
39.53.070 of the Revised Code of Washington.
11
-7- ASR319 91/07/11
Every successor Escrow Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the
City, an instrument in writing accepting such appointment hereunder
and thereupon such successor Escrow Agent without any further act,
deed or conveyance, shall become fully vested with all the rights,
immunities, powers, trusts, duties and obligations of its
predecessor; but such predecessor shall, nevertheless, on the
written request of such successor Escrow Agent or the City execute
and deliver an instrument transferring to such successor Escrow
Agent all the estates, properties, rights, powers and trusts of
such predecessor hereunder; and every predecessor Escrow Agent
shall deliver all securities and moneys held by it to its
successor; provided however, that before any such delivery is
required to be made, all reasonable fees, advances and expenses of
the retiring or removed Escrow Agent shall be paid in full. Should
any transfer, assignment or instrument in writing from the City be
required by any successor Escrow Agent for more fully and certainly
vesting in such successor Escrow Agent the estate, rights, powers
and duties hereby vested or intended to be vested in the
predecessor Escrow Agent, any such transfer, assignment and
instruments in writing shall, on request, be executed, acknowledged
and delivered by the City.
Any corporation into which the Escrow Agent, or any successor
to it in the trusts created by this Agreement, may be merged or
converted or with which it or any successor to it may be
consolidated, or any corporation resulting from any merger,
conversion, consolidation or reorganization to which the Escrow
Agent or any successor to it shall be a party shall, if approved
in writing by the City, be the successor Escrow Agent under this
Agreement without the execution or filing of any paper or any other
act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding.
Section 14. Notices. All notices or requests required or
permitted to be given hereunder shall, until further notice in
writing, be given in writing at the following addresses:
To the City: City of Yakima
129 North Second Street
Yakima, Washington 98901
Attention: Director of Finance and
Budget
-8- ASR319 91/07/11
6
411 To the Escrow Agent: Security Pacific Bank Washington,
N.A.
Corporate Trust Department
1301 Fifth Avenue, 15th Floor
Seattle, Washington 98101
To Moody's Investors
Services: Moody's Investors Services
99 Church Street
New York, New York 10007
Attention: Municipal Rating Desk/
Refunded Bonds
To Standard & Poor's
Corporation: Standard & Poor's Corporation
25 Broadway, 21st Floor
New York, New York 10004
Section 15. Miscellaneous. This Escrow Agreement is governed
by Washington law and may not be modified except by a writing
signed by the parties. In the event any one or more of the
provisions contained in this Escrow Agreement shall for any reason
be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect
any other provisions of this Escrow Agreement, but this Escrow
,• Agreement shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein.
IN WITNESS WHEREOF, the parties have executed and delivered
this Escrow Agreement pursuant to due and proper authorization, all
as of the date and year first above written.
CITY OF YAKIMA, WASHINGTON
By
Director of Finance and
Budget
ATTEST:
Clerk
Security Pacific Bank
Washington, N.A.
By
Title
ID
-9- ASR319 91/07/11
ATTACHMENT / r,, 6 ; Draft dated July 11, 1991
PRELIMINARY OFFICIAL STATEMENT DATED , 1991
III MOODY'S RATING: Applied For
NEW ISSUE (See the caution "RATING herein)
In the opinion of Bond Counsel, interest on the 1991 Bonds is excluded from gross income subject to federal
income tampon pursuant to the Internal Revenue Code of 1986, as amended, subject to certain conditions and
o assumptions described herein under "TAXEXEWP77ON." The 1991 Bonds are not private activity bonds. Interest
Z on the 1991 Bonds is included in the computation of certain federal taxes on corporations.
E€
Sa
$7,780,000*
. Y CITY OF YAKIMA, WASHINGTON
872 SECOND LIEN WATER AND SEWER REVENUE AND
E a
REFUNDING BONDS, 1991
a` g DATED: August 1, 1991 DUE: March 1, as shown below
o B The 1991 Bonds will be issued as registered bonds in denominations of $5,000, or integral multiples
thereof. Interest on the Bonds will be paid on March 1, 1992 and semiannually thereafter on
u March 1 and September 1 of each year Interest on the 1991 Bonds shall be paid by check or draft
26 mailed to the registered owners at the addresses appeanng on the Bond Register on the 15th day of
the month preceding each interest payment date. Principal of the 1991 Bonds shall be payable upon
m t presentation and surrender of the 1991 Bonds by the registered owners at the principal office of
either fiscal agency of the State of Washington in Seattle, Washington or New York, New York.
K
is Due Interest Yield Or Due Interest Yield Or
m NArrb1 amounts* egg Prism March 1 ' Bakst Prize
L E 1,11- .p2 5,000 LVVL $4
• 1993 135,000 2003 275,000
(1. 1994 325,000 2004 295,000
1995 445,000 2005 315,000
F 1996 295,000 2006 335,000
m m 1997 320,000 2007 360,000
i?°� 1998 340,000 ° 2008 385,000
.0g 1999 360,000 2009 415,000
%8 2000 390,000 2010 835,000
2001 410,000 2011 900,000
g
m o (Phis accrued interest from August 1, 1991)
S m The City has designated the 1991 Bonds as Qualified Tax - Exempt Obligations for banks, thrift
institutions and other financial institutions. See the caption ' TAX EXEMPTION' herein for a
lc discussion of this designation.
7m
t • The 1991 Bonds maturing on or after March 1, 2002, are subject to redemption prior to their stated
g z maturities at the option of the City on March 1, 2001, or on any interest payment date thereafter, in
a o whole at any time, or in part on any interest payment date at 100% of the principal amount thereof,
y plus accrued interest to the date of redemption, as more fully set forth herein.
71
a I The 1991 Bonds are issued junior to the City's $6,635,000 Outstanding First Lien Water and Sewer
Revenue Bonds and are payable solely from and secured by the Revenue of the System after all
i£ required payments for the Costs of Maintenance and Operation and the First Lien Parity Bonds
•E > have been made or duly provided for For so long as the 1991 Bonds are outstanding, no bonds may
be issued subsequent to the issuance of the 1991 Bonds with a lien and charge on the Gross
a` Revenues superior to the lien and charge of the 1991 Bonds.
" a The 1991 Bonds are offered when, as and if issued and received by the Underwriter, subject to the
4 approval of legality by Preston Thorgrimson Shidler Gates & Ellis, Seattle, Washington, Bond
Counsel. The 1991 Bonds will be ready for delivery in Seattle, Washington or at the facilities of The
• Depository Trust Company in New York, New York on or about August 15, 1991.
• Preliminary, subject to change
Dated:
Seattle - Northwest Securities Corporation
DRAFT
CITY OF YAKIMA, WASHINGTON
410
Elected Officials
City Council Term Expires
Patricia Berndt, Mayor December 31, 1991
Lynn Buchanan, Assistant Mayor December 31, 1991
Clarence Barnett December 31, 1991
Henry Beauchamp December 31, 1993
George Pechtel December 31, 1991
Lee "Skip" Semon December 31, 1993
Bernard Sims December 31, 1993
Certain Appointed Officials
Richard A. Zais, Jr City Manager
Frederick C. Stouder Assistant City Manager
Jerry Copeland Director of Public Works
John Hanson Director of Finance & Budget
City Clerk
John Vanek City Attorney
Dennis Covell Director of Engineering & Utilities
Chris Waarvick Wastewater Superintendent
Bond Counsel
411
Preston Thorgrimson Shidler Gates & Ellis
Seattle, Washington
Consulting En sneer
HDR Engineering, Inc.
Bellevue, Washington
No dealer broker, salesman or other person has been authorized by the City or the Underwriter to
give any information or to make any representations other than those contained in this Official
Statement, and, if given or made, such other information or representations must not be relied upon
as having been authorized by any of the foregoing. This Official Statement does not constitute an
offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any
person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or
sale.
The information set forth herein is not guaranteed as to accuracy or completeness and is not to be
construed as a representation by the Underwriter The information herein is subject to change
without notice and neither the delivery of this Official Statement nor any sale made hereunder shall,
under any circumstances, create any implication that there has been no change in the affairs of the
City since the date hereof.
IN CONNECTION WITH THE TRANSACTIONS WHICH STABIL= OFFERING OF
MAINTAIN THE S MARIOT PRICE OF SUCH BONDS AT LEVE
THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.
DRAFT
• TABLE OF CONTENTS
Fagg
Certain Definitions • • ... • • .. • iii
Description of the Bonds . 1
Principal Amount, Date, Interest Rates and Maturities . . . 1
Optional Redemption .. .. ... ... • 1
Notice of Redemption • • • 2
Form and Denomination . . 2
Paying Agent . . . .. .. ... . ........ ... ...2
Purpose P Application of 1991 Bond Proceeds . . .2
Procedure . 2
Verification of Mathematical Calculations 2
Source and Uses of Funds . . ... .. • . . 3
Security for the 1991 Bonds .. . . .. .. . 3
Pledge of Revenues 3
Bond Fund 3
Interest Account . .... . • • 3
Serial Bond Principal Account 3
Term Bond Principal Account 3
Reserve Account . . .. .... . . . 4
Flow of Funds Under the Bond Ordinance . 4
Rate Covenant 4
Additional Bonds . 00 0000 .... .. .. • . . .. . S
Certain Other Bond Covenants in the BondGzdina:tcc 5
Debt Service Requirements . . . 6
III The City of Yakima .. • . .. .. .. ... 6
The Water System 7
Residential 7
Commercial . • .. • • 7
Industrial . . . . .. . . 7
Governmental . . . . .. . . 7
City .. • .. ... ...... 07
Water Service Charges 7
The Sewerage System . .. 9
Sewer Service Charges 9
Number of Water Customers .. . 10
Number of Sewer Customers 10
Major Water and Sewer Customers .. 10
Combined Operating Statement . . . . . . 11
Balance Sheet . . . . . . 12
Projected Operating Results .. . • .... • 13
General and Economic Information 14
Litigation 18
Approval of Counsel 18
Tax Exemption .. . . . . . . . . .18
Rating . .19
Underwriting .. ..19
Official Statement 19
Consulting Engineer's Report ... . ..... • • .... • Appendix A
•
ii
DRAFT
CERTAIN DEFINITIONS
Certain words and phrases used in Ordinance No. _ (the "Bond Ordinance") and in this Official
Statement have the meanings set forth below, unless the context shall clearly indicate than another
meaning is intended.
"Additional Bonds" means any revenue bonds, revenue warrants or other revenue obligations
which may be issued in the future on a parity of lien with the 1991 Bonds and any other Second Lien
Parity Bonds.
"Assessment Income" means the principal of and interest on special assessments levied in any
utility local improvement district pledged to be paid into the Bond Fund. Assessment Income shall
be allocated to the years in which it would be received if the unpaid balance of each assessment roll
were paid in the remaining number of installments with interest on the declining balance at the
times and at the rate provided in the ordinance confirming the assessment roll.
"Assessments" means any special assessments which may be levied in any utility local improvement
district of the City created for the acquisition, construction or installation of additions and
improvements or extensions of the System, if such assessments are pledged to be paid into a revenue
bond fund to pay and secure the payment of any Second Lien Parity Bonds.
"Average Annual Debt Service" means (to come)
"City" means the City of Yakima Washington, a municipal corporation duly organized and existing
under and by virtue of the laws of the State of Washington and the Charter of the City
"Costs of Maintenance and Operation" means all normal operating expenses, current
maintenance expenses. expenses of reasonable upkeep and repairs, and insurance acid
administrative expense, and reasonable pro-rata budget charges for services provided to the System
by City departments, but excludes depreciation payments for debt service or into reserve accounts,
costs of capital additions to or replacements of the System, municipal taxes, or payments to the City
in lieu of taxes.
"First Lien Parity Bonds" means:
Amount Authorizing
Issue Date of Issue Outstanding Orginanat
Water and Sewer Revenue Bonds, 1964 January 1, 1964 $ 285,000 475
Water and Sewer Revenue Bonds, Series B December 1, 1968 2,535,000 1071
Water and Sewer Revenue Bonds, 1978 December 1, 1978 3,500,000 2231
Water and Sewer Revenue Bonds, 1983 March 1, 1983 315,000 2677
"Gross Revenues" means all earnings, revenue and moneys received by the City from or on account
of the operations of the System, from any source whatsoever
"Maximum Annual Debt Service" means the maximum amount of Annual Debt Service that will
become due in any fiscal year on the Bonds then outstanding.
"Net Revenues" means the Gross Revenues of the System less the Costs of Maintenance and
Operation.
"1891 Bonds" means the City of Yakima, Second Lien Water and Sewer Revenue and Refunding
Bonds, 1991, in the aggregate principal amount of $7,780,000.
"Outstanding" means, in connection with First Lien or Second Lien Bonds, as of the time in
question, all bonds issued except (a) bonds theretofore paid and cancelled or having matured or been
called for redemption, payment has been provided therefor, or bonds which have been defeased in
accordance with their authorizing ordinance and state law
"Professional Utility Consultant" means the independent person(s) or firm(s) selected by the City III
having a favorable reputation for skill and experience with facilities of comparable size and
character to the System in such of the following as are relevant to the purposes for which they are
retained: (a) engineering and operations and (b) the design of rates. - --
iii
Dk'AFT
• "Reserve Account" means the Bond Reserve Account created in the Bond Fund by Ordinance No.
"Ti.sercie Account Requirement" means the Maximum Annual Debt Service of all Second Lien
Parity Bonds Outstanding. In the case of Variable Rate Bonds, the interest rate thereon shall be
calculated on the assumption that such Variable Rate Bonds will bear interest at a rate equal to the
higher of (a) the rate most recently reported by the "Bond Buyer" as the Bond Buyer's Index for long-
term revenue bonds or (b) a rate equal to x +y where x represents the average rate of interest borne
by such Variable Rate Bonds in the twelve months preceding the date of calculation Qr in the case of
newly issued Variable Rate Bonds the initial rate of interest borne by such Bonds and y represents
one -half the difference between the Maximum Interest Rate applicable to such Variable Rate Bonds
and x; provided that in no event shall such assumed Variable Rate exceed the Maximum Interest
Rate and provided further that if on such date of calculation the interest rate on such Bonds shall
then be fixed to maturity, the interest rate used for such specified period for the purpose of the
foregoing calculation shall be such actual interest rate.
"Second Lien Parity Bonds" means any revenue bonds, revenue warrants or other revenue
obligations issued by the City which have a lien upon the Gross Revenues of the System to pay and
secure the payment of the principal thereof and interest thereon equal to the lien created upon the
Gross Revenues of the System to pay and secure payment of the principal of and interest on the 1991
Bonds. "Second Lien Parity Bonds" includes the 1991 Bonds, and any Additional Bonds.
"System" means the combined water and sewerage system of the City as it now exists, as it shall be
added to and improved and extended with the proceeds of sale of the 1991 Bonds, and as it may be
later added to, extended and improved for as long as any First Lien Parity Bonds or any Second Lien
Parity Bonds remain outstanding.
•
iv
DRAFT
OFFICIAL STATEMENT
CITY OF YAKIMA, WASHINGTON
$7,780,000*
SECOND LIEN WATER AND SEWER REVENUE AND
REFUNDING BONDS, 1991
The City of Yakima, Washington (the "City "), a first -class charter city duly or , ized and existing
under and by virtue of the laws of the State of Washington, furnishes this Official Statement in
connection with the offering of $7,780,000* principal amount of Second Lien Water and Sewer
Revenue and Refunding Bonds, 1991 (the "1991 Bonds "). This Official Statement, which includes
the cover page and appendices, provides information concerning the City, the 1991 Bonds, and the
City's com water and sewerage system (the "System ").
Issuance of the 1991 Bonds is pursuant to the Revised Code of Washington, Chapter 35.92, and to
Ordinance No. adopted by the City Council on (the "Bond Ordinance ")
authorizing the issuance of the 1991 Bonds.
The 1991 Bonds are issued junior to the following First Lien Parity Bonds of the City currently
outstanding in the amounts shown below.
Amount
Issue
ibitianading
Water and Sewer Revenue Bonds, 1964 $ 285,000
Water and Sewer Revenue Bonds, Series B 2,535,000
Water and Sewer Revenue Bonds, 1978 3,500,000
Water and Sewer Revenue Bonds, 1983 315,000
Certain of the capitalized words and phrases used in this Official Statement have the meanings as
defined in the Bond Ordinance or other contractual documents, unless the context shall clearly
indicate that another meaning is intended. Certain of these capitalized items are defined in the
section, "Certain Definitions' herein.
DESCRIPTION OF THE BONDS
Principal_ mount Dat Interest Rates and Maturities
The 1991 Bonds will be issued in the principal amount of $7,780,000* and will be dated August 1
1991 and will mature on the dates and in the amounts shown on the cover page of this Official
Statement. Interest on the 1991 Bonds will be paid commencing on March 1, 1992 and semiannually
thereafter on March 1 and September 1 of each year to the date of maturity or prior redemption.
Optional Redemption
The 1991 Bonds maturing in the years 1992 through 2001 shall not be subject to redemption prior to
their stated dates of maturity The 1991 Bonds maturing on or after March 1, 2002 shall be subject
to redemption prior to their stated maturities at the option of the City, on March 1, 2001 or on any
interest payment date thereafter, in whole at any time, or in part on any interest payment date
(maturities to be selected by the City and by lot within a maturity), at 100% of the principal amount
thereof plus accrued interest to the date of redemption.
*Preliminary, subject to change
1
11
DRAFT
Notice of Bedemptlon
Notice of redemption will be given not less than 30 nor more actin GO days prior to the redemption
date by first -class mail, postage prepaid, to the registered owner of any Bond to be redeemed at the
address appearing on the Bond Register Interest on the 1991 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. The City reserves the right and option to purchase any or all of
the 1991 Bonds in the open market at any time at a price not m excess of par plus accrued interest to
the date of purchase.
Form and Denomination
The 1991 Bonds will be issued in fully- registered form without coupons. The 1991 Bonds will be
issuable in the denomination of $5,000, or any integral multiple thereof.
Pk. • g Agent
Principal of and interest on the 1991 Bonds will be payable by either fiscal agency of the State of
Washington in Seattle, Washington or New York, New York.
PURPOSE AND APPLICATION OF 1991 BOND PROCEEDS
The new money portion of the 1991 Bonds ($4,500,000) is being issued to provide funds necessary to
acquire, construct and install certain additions and improvements to the combined water and
sewerage system of the City A detailed description of the improvements in included in Appendix A.
The proceeds from the sale of the refunding portion ($3,280,000) of the 1991 Bonds will be used to
refund $2,Q20,000 of the City's Water and Sewer Bonds, 1983 dated March 1. 1983. which ioonas
mature oil March 1, 1994 through March 1, 2003, (the "Refunded Bonds "). The Refunded fonds will
•
be escrowed to their call date of March 1, 1993, at which time they will be called at a p of 102.
The refunding portion of the Bonds is being issued for the purpose of realizing a debt service savings.
REFUNDING PLAN
Envralure
From the proceeds of the 1991 Bonds, and with other monies available, the District will purchase
certain direct United States Government obligations, including obligations of the State and Local
Government Series (referred to herein as "Acquired Obligations "). These Acquired Obligations will
be deposited in the custody of ( "Escrow Trustee "). The maturing principal of the
Acquired Obligations, interest earned thereon, and necessary cash balance, if any, will provide
payment of:
(a) Interest on the Refunded Bonds through March 1, 1993; and
(b) On March 1, 1993, the principal of the Refunded Bonds maturing in the years 1994
through 2003.
The Acquired Obligations, interest earned thereon, and necessary cash balance if any, will
irrevocably be pledged to and held in trust for the benefit of the owners of the Refunded Bonds by the
Escrow Agent, pursuant to an escrow deposit agreement to be executed by the District and the
Escrow Agent.
Verification of Mathematical Calculations
An independent verification by , certified public accountants, will be obtained
to the effect that the Acquired Obligations, interest thereon, and the cash balance will be adequate
to make all required payments outlined above. The verification will also confirm the correctness of
the mathematical computations supporting the conclusion of bond counsel that the Bonds are not
"arbitrage bonds" as defined by Section 148 of the Internal Revenue Code of 1986, as amended.
2
DRAFT
,SOURCES AND USES OF FUNDS *
41/
proceeds from the 1991 Bonds (less accrued interest) are estimated to be applied aa. font:
Project Costs $ 4,250,000
Costa of Issuance 40,000
Underwriting Discount 116,700
Debt Service Reserve 150,000
SIDS 3,210,000
Contingency 13.300
$ 7.780.000
*Preliminary
,SECURITY FOR THE 1991 BONDS
pledge of Revenues
The principal of and interest on the 1991 Bonds are secured by a pledge of Revenue of the System
equal to the pledge of the Outstanding Second Lien Parity Bonds, subject only to the payment of the
Costs of Maintenance and Operation of the System and the required payments into the Prior Lien
Revenue Bond Fund. The City has covenanted that, so long as the 1991 Bonds are outstanding, no
bonds may be issued subsequent to the issuance of the 1991 Bonds with a lien and charge on the
Gross Revenues superior to the lien and charge of the 1991 Bonds.
The 1991 Bonds are not general obligations of the City, and the full faith and credit of the City is not
piedeed for the payment thereof.
Bond Fund
The Bond Ordinance refers to a fund known as the "Second Lien Water and Sewer Revenue Bond
Fund" (the "Bond Fund ") solely for the purpose of paying the principal 'of, premium, if any, and
interest on the 1991 Bonds and any other Second Lien Parity Bonds, of retiring the Second Lien
Parity Bonds prior to maturity as specified in the Bond Ordinance and of paying any reimbursement
obligation with respect to any credit enhancement device providing additional security for any
variable rate bonds. Said Revenue Bond Fund consists of an Interest Account, Serial Bond Principal
Account, Term Bond Principal Account, and a Reserve Account.
Intemitalcomni
An Interest Account has been created in the Bond Fund for the purpose of paying the interest on the
1991 Bonds and any Second Lien Parity Bonds.
As long as any of the 1991 Bonds remain outstanding, the City has irrevocably obligated, pledged
and bound itself to set aside and pay from the Net Revenue of the System into the Debt Service
Account, those amounts necessary, together with such other funds as are on hand and available in
the Debt Service Account, to pay installments of interest, next coming due on the 1991 Bonds and
other Second Lien Parity Bonds.
Serial Bond Principal Account
A Serial Bond Principal Account has been created in the Bond Fund for the purpose of paying the
principal of Serial Bonds as the same shall mature and come due.
As long as any of the 1991 Bonds remain outstanding, the City has covenanted to transfer to the
Serial Bond Principal Account amounts sufficient to equal the installment of principal next falling
due on the Serial Bonds.
lenallanstEtinciuglAcamant
[LANGUAGE TO COME]
3
DRAFT
Reserve Account
A Reserve Account has h::. :' sated in the Bond Fund for the purpose of securing the payment of the
pnncipal of and interest on the 1991 Bonds and any other Second Lien Parity Bonds. The City will
deposit an amount into the Reserve Account simultaneously with the issuance and delivery of the
1991 Bonds sufficient, together with the money already on deposit therein, to equal the Reserve
Account Requirement.
The City covenants and agrees that it will within five years of the date of issuance of the 1991 Bonds
pay into such Reserve Account out of the money in the Revenue Fund and/or out of other moneys it
may have on hand from time to time and legally available for such payments amounts sufficient to
equal the Maximum Annual Debt Service for all Outstanding Second Lien Parity Bonds. Each
ordinance providing for the issuance of Additional Bonds shall provide for payments into the Bond
Fund for credit to the Reserve Account from any other moneys lawfully available thereafter
The balance in the Bond Fund Reserve Account as of December 31, 1990 was $1,177,633.
Flow of Funds Under the Bond Ordinance
The City has obligated and bound itself to pay into the Revenue Fund the Gross Revenues of the
System. The Gross Revenues of the System deposited therein shall be used only for the following
purposes and in the following order of priority
First, to pay the Costs of Maintenance and Operation of the System,
Second, to make all required payments into the First Lien Revenue Bond Fund,
Third, to pay the interest on the Second Lien Parity Bonds;
• Fourth, to pay the principal of tine Zacond Lien Pa,;i,y Doi�us,
Eifth, to make all payments required to be made into any Reserve Account created to secure the
payment of the Second Lien Parity Bonds;
Sixth, to make all payments required to be made into any other revenue bond redemption fund
or debt service account or reserve account created to pay and secure the payment of the principal
of and interest on any revenue bonds of the City having a lien upon the Gross Revenues of the
System junior and inferior to the lien thereon for the payment of the principal of and interest on
the Second Lien Parity Bonds;
Seventh, to retire by redemption or purchase in the open market any outstanding revenue bonds,
of the City, to make necessary additions, improvements and repairs to or extensions and
replacements of the System, or for any lawful City purposes.
Rate Covenant
The City has covenanted in the Bond Ordinance to establish, maintain and collect rates and charges
for the use of the services and facilities and all commodities sold, furnished or supplied by the
System which shall be fair and nondiscriminatory and shall adjust such rates and charges from time
to time so that the Gross Revenues of the System will at all times be sufficient to pay (a) Costs of
Maintenance and Operation of the System, (b) to pay the principal of, premium, if any, and interest
on the First Lien Parity Bonds and the Second Lien Parity Bonds, as and when the same shall
become due and payable, (c) to make adequate provision for the payment of any Term Bonds, (d) to
make when due all payments which the City is obligated to make into the Reserve Account and all
other payments which the City is obligated to make pursuant to the Bond Ordinance, and (e) to pay
all taxes, assessments or other governmental charges lawfully imposed on the System or the revenue
therefrom or payments in lieu thereof and any and all other amounts which the City may now or
hereafter become obligated to pay from the Gross Revenues by law or contract; and the Net
Revenues (together with Assessments collected) in each Fiscal Year will be at least equal to 1.40
times the Average Annual Debt Service calculated as of December 31 of the preceding calendar year.
•
4
DRAFT
Additio a = Bonds
The City may issue Second Lien Parity Bonds upon compliance with the following conditions.
1. At the time of the issuance of such Parity Bonds, there shall be no deficiency in the
Bond Fund.
2. In each ordinance authorizing such Second Lien Parity Bonds, provision shall be made
for payments into the Reserve Account in accordance with the Bond Ordinance.
3. At the time of the issuance of such Second Lien Parity Bonds, the City shall have on file
a certificate from the Professional Utility Consultant, not then employed by the City
except for the purpose of giving such certificate, showing that the Net Revenue received
during any consecutive 12 -month period for which financial statements are available
within the 24 months preceding the date of delivery of such Second Lien Parity Bonds
equals at least 1.40 times the Average Annual Debt Service' in each calendar year or
Fiscal Year thereafter on the then - Outstanding First Lien Parity Bonds, Second Lien
Parity Bonds, and the Additional Bonds to be issued, and that the Adjusted Net
Revenues to be received each calendar year or Fiscal Year thereafter, will equal at least
1.40 times the Average Annual Debt Service each such calendar year or Fiscal Year, on
the Outstanding Second Lien Parity Bonds and the Additional Bonds to be issued.
The Adjusted Net Revenues shall be the Net Revenues for a period of any twelve consecutive months
out of the twenty -four months immediately preceding the date of delivery of such proposed
Additional Bonds, as adjusted to take into consideration changes in Net Revenues estimated to occur
under certain conditions designated in the Bond Ordinance for each year after such delivery for so
long as any Bonds, including the Additional Bonds proposed to be issued, shall be outstanding.
Certain Othe_r Band Covenants i the Bond Ordiazum
Certain other covenants in the Bond Ordinance include:
1. The City shall at all times maintain, preserve and keep the properties of the System in
good repair, working order and condition and will from time to time make all necessary
and proper repairs, renewals, replacements, extensions and betterments thereto, so that
at all times the business carried on in connection therewith will be properly and
advantageously conducted and the City will at all times operate or cause to be operated
said properties of the System and the business in connection 'therewith in an efficient
manner and at a reasonable cost.
2. The City will not sell or otherwise dispose of the System in its entirety unless
simultaneously with such sale or other disposition provision is made for payment into the
Bond Fund of cash or Government Obligations sufficient to pay the principal of and
interest on all then Outstanding Bonds and Additional Bonds, nor will it sell or otherwise
dispose of any part of the useful operating properties of the System unless such facilities
are replaced or provision is made for payment into the Bond F of the amount set forth
in the Bond Ordinance.
3. The City will not at any time create or permit to accrue or to exist any lien or other
encumbrance or indebtedness upon the System or the Revenue of the System, or any part
thereof, other than reasonable and nominal Costs of Maintenance and Operation, prior or
superior to the lien thereon for the payment of the Outstanding First Lien Parity Bonds
the 1991 Bonds and any Additional Bonds, and will pay and discharge, or cause to be paid
and discharged, any and all lawful claims for labor, materials or supplies which, if unpaid
might become a lien or charge upon the Revenue of the System, or any part thereof, prior
to or superior to the lien of the Outstanding First Lien Parity Bonds, the Bonds and any
Additional Bonds, or which might impair the security of the Parity Bonds.
4. The City shall keep proper books of account which shall be kept in accordance with any
applicable rules, regulations and statutes prescribed by the State of Washington.
410
5
DRAF
III 5. The City will not furnish or supply or permit the furnishing or supplying of any service or
facility furnished by or in connection with the operation of the System, free of charge to
any person, firm or corporation, public or private, so long as any Bonus are outstanding
and unpaid.
DEBT SERVICE REQUIREMENTS
The following table shows debt service on the 1991 Bonds and the Senior Lien Bonds.
Schedule of Debt Service Requirements
for the Outstanding Bonds and the Bonds
First Lien Total
Outstanding This Issue - Second Lien Parity Bonds* Debt
Year Bonds Principal Interest Total Service
1991 $ 437,643 $ 0 $ 0 $ 0 $ 437,643
1992 1,045,080 235,000 600,260 835,260 1,880,340
1993 1,049,994 135,000 504,049 639,049 1,689,043
1994 1,053,100 325,000 491,337 816,337 1,869,437
1995 1,110,505 445,000 469,333 914,333 2,024,838
1996 1,112,501 295,000 447,577 742,577 1,855,078
1997 1,121,014 320,000 428,808 748,808 1,869,822
1998 1,120,331 340,000 408,092 748,092 1,868,423
.1999 1,115,816 360,000 385,688 745,688 1,861,504
2000 1,116,969 390,000 361,305 751,305 1,868,274
2001 1,113,492 410,000 334,900 744,900 1,858,32
2002 1,114,796 410,000 307,430 717,430 1,632,226
III 2003 1,111,582 275,000 284,174 559,174 1,670,756
2004 387,956 295,000 264,503 559,503 947,459
2005 384,788 315,000 243,149 558,149 942,937
2006 385,662 335,000 220,153 555,153 940,815
2007 390,263 360,000 195,390 555,390 945,653
2008 388,269 385,000 168,660 553,660 941,929
2009 0 415,000 139,860 554,860 554,860
2010 0 835,000 94,860 929,860 929,860
2011 0 900.000 32.400 932.400 932A00
$ 15.559.761 $ 7.780.000 $ 6.381.928 $ 14.161.928 $ 29.721.689
* Preliminary, subject to change; assumed interest rates range from 5.1% to 7.2%
THE CITY OF YAKIMA
The City of Yakima was incorporated in 1886 and operates as a first class charter city under the
Council Manager form of government. It is the sixth largest city in the State of Washington, and
encompasses 13 square miles. The City Council consists of seven Council members, four of whom
are elected from separate districts, and three elected at large. The Mayor is chosen by the Council
from within its own membership every two years.
The City provides the full range of municipal services contemplated by charter or statute. These
include public safety (police, fire building), public improvements (streets, traffic signals, storm
sewer), sanitation (solid waste disposal, sanitary sewer utility), water utility, community
development, parks and recreation, and general administrative services. The City employs 532
people, including temporary, part -time workers.
411
6
DRAFT
THE WATER SYSTEM III
The City of Yakima's water supply is from the Nachcs River Water is treated prior to delivery at
the water treatment plant. The City has four high production wells to back up its gravity surface
supply system. The Nob Hill Water Association serves a portion of the western part of the urban
area. A number of the commercial and industrial facilities in Yakima take their source of cooling
water supply directly from shallow wells. Both the Town of Union Gap and the area within the
Terrace Heights Sewer District utilize groundwater as their source of water supply
Residential
The residential customer class includes both single - family and multi - family This class uses 52
percent of the total water produced. Within the City, approximately 85 percent of all residential
customers have irrigation water supplied from a separate .irrigation system. Only one percent of
potable residential water use is for irrigation.
Commercial
The commercial customer class uses approximately 29 percent of the water produced. Commercial
users are shopping centers banks, office complexes, motels and other businesses. The commercial
monthly demand is generally uniform throughout the year
Industrial
Industrial customers account for nine percent of total water produced. Industrial customers are
primarily the fruit and vegetable processing industries with summer use generally being twice the
monthly average.
Governmental
4110
The governmental group of users includes the state, federal and county facilities. Water use by this
group accounted for three percent of the total water produced.
City (All Departments)
This group includes schools and all City departments using approximately seven percent of all water
consumed. Nearly 90 percent of this group's total use is for irrigation during the summer
Water Service Charges
Effective January 17, 1986, the following charges became effective for water service. This schedule
includes an overall six percent increase in charges over the prior schedule effective .
Residence
The charge for domestic water supplied consists of a ready -to -serve charge and a charge for water
consumed as follows.
One -month Two -month
Ready -to -serve charges: Period period
Meter Size
3 / 4 " and smaller $ 1.53 $ 1.53
1' 2.31 3.06
1 4.58 7.63
2" 9 14 16.76
3" 22.82 44.13
4" 36.51 71.51
6" 82.14 162.75
8" 146.00 288.97
10" 228.12 453.20
12" 328.48 653.95
II/
7
DRAFT
• Charges for water consumed per one hundred cubic feet:
First 600 cu. ft. $ 76
Next 600 cu. ft. (700 -1,200 cu. it.) 85
Next 800 cu. ft. (1,300 -2,000 cu. ft.) 67
Next 23,000 cu. ft. (2,100 - 25,000 cu. ft.) .51
Next 25,000 cu. ft. (25,100 - 50,000 cu. ft.) 41
Over 50,000 cu. ft. .24
The minimum charges for domestic water supplied is as follows.
One -month Two -month
period Period
Meter Size
3 / 4 " and smaller $ 3.81 $ 6.09
1' 4.59 7 62
1 6.86 12.19
2" 11.42 21.32
3" 25.10 48.69
4" 38.79 76.07
6" 84.42 167.31
8" 148.28 293.53
10" 230.40 457 76
12" 330.76 658.51
Sulk Rate for Municipal Purposeg
Charges for the City's water used for filling swimming pools in City parks, irrigation purposes is:
First 5,n00 cu. ft. 210 per 100 cu. ft.
Over 5,000 cu. ft. 110 per 100 cu. ft.
• Irrigation Rate on Domestic Water
Domestic water may be delivered to consumers during the irrigation season at a special irrigation
rate, computed as follows:
An amount equal to the maximum water meter reading taken during the previous non -
irrigation season shall be charged under the regular domestic water rates. All water used
on premises inside the city limits in excess of such maximum usage during the previous
non - irrigation season shall be charged during the irrigation season at the rate of twenty -
one cents per one hundred cubic feet and all water used on premises outside the city limits
in excess of such maximum usage during the previous non - irrigation season shall be
charged during the irrigation season at a rate of twenty -four cents per one hundred cubic
feet, provided, the rate for domestic water consumed by the State of Washington or any
agency thereof, or any municipal corporation of a classification other than that charging
the bulk rate as provided by the Rate Ordinance and used exclusively for irrigation
purposes on property owned or occupied by such consumers shall be twenty -one cents per
one hundred cubic feet, regardless of whether the property served is situated within or
without the corporate limits of the City of Yakima.
Fire Service
Fire service charges for each active fire service area are as follows:
Inside Outside
Size of Service City City
2" $ 3.50 $ 7 00
3" 4.66 9.32
4" including hydrant only 7 00 14.00
6" including hydrant only 9.33 18.66
• 8" 14.00 28.00
10" 18.66 37.32
8
DRAFT
THE SEWERAGE SYSTEM
Yakima treats wastewater for the City and the surrounding urbanized area, currently serving a
population of about
Yakima has two sewage collection and treatment systems, one for wastewater from food processing
industries and one for other wastewater The wastewater from food processing industries is
collected and sprayed on 96 acres of land. All other wastewater is treated at the Regional
Wastewater Treatment Plant.
The City of Yakima operates a progressive sewer utility serving the health, welfare, and safety needs
of the community and providing treatment to prevent stream pollution. In 1936 the City constructed
a primary treatment plant. Improved control of water pollution was accomplished by separation of
industrial and domestic sewage in 1955. Sewage treatment was further enhanced in 1965 by the
addition of trickling filter biological treatment.
During the period of 1974 through 1982, the City accepted regional responsibility for protecting the
environment by agreeing to provide regional wastewater treatment. A program costing more than
$33,000,000 with federal, state, and local funds, was completed that collects sewage from outlying
areas and expanded the treatment plant. The investment made by Yakima in wastewater collection
facilities and treatment is worth over $100,000,000
Sewer Service Charges
Effective January 1, 1990, the following charges became effective for sewer service. This schedule
includes an overall 16% increase over the prior schedule effective January 1, 1989
.9cw rice charge is calculated and charged on a ready -to- service basis frt all customers other
d tia ro
-eSiYeia�doa �.►`o�J' ma.ea J as follows:
Water
Meter Size Monthly Charge Bimonthly Charge
3i . $ 5.73 $ 11.46
1 9.92 19.84
1 16.88 33.76
2 25.22 50.44
3" 44.71 89.42
4" 72.52 145.04
6" 142.11 284.22
8" 253.45 506.90
10" 406.53 813.06
Multiple -unit Residential Customers. The monthly ready -to -serve charge is two dollars and ninety-
six cents per account plus two dollars and seventy -eight cents per dwelling unit.
Volume Charge. For all customers, the volume charge is one dollar and one cent per hundred cubic
feet of water consumption.
Rate to Property Outside City. For customers located outside the City, a surcharge amounting to
fifty percent is applied to the billings calculated in accordance with the rates for inside -city
customers, except that such surcharge shall not be applied to the strong waste surcharge.
Strong Waste Surch : rge. For commercial and industrial customers discharging wastewater which
contains more than three hundred parts per million of biochemical oxygen demand (BOD) and/or
suspended solids (SS) there shall be a surcharge, in addition to the ready -to -serve charge and the
volume charge, which shall be calculated utilizing the national average values of BOD and SS
concentrations typical to each classification under the Standard Industrial Code or by actual
concentrations verified by the City If the commercial industrial customer chooses at its expense to
install a sampling station, the strong waste charge is calculated based upon actual concentrations.
The following formula is utilized to calculate the strong waste charge:
9
DRAFT
1111 Monthly Surcharge = (Unit costs per pound of BOD or SS) times (weight of one gallon
of water) times (customer's flow in one hundred cubic feet
divided by one thousand three hundred thirty -seven per month)
times (customer's concentration of BOD or SS in parts per
million minus three hundred per the national average values or
verified concentrations)
In the foregoing formula.
Unit cost per pound for BOD = $ .08 pound
Unit cost per pound for = 02 pound
Weight of one gallon of water = 8.34 pounds.
Septage Charge. A charge of $.031 per gallon is paid for septic tank waste dumped at the
wastewater treatment plant.
CITY OF YAKIMA
NUMBER OF WATER CUSTOMERS
Commercial/ All
Year Residential Industrial Government Dion Other Total
1991* 14,255 1,057 18 241 13 15,584
1990 14,296 1,066 18 231 13 15,624
1989 14,285 1,056 18 226 15 15,600
1988 14,242 1,045 18 177 52 15,534
1987 14,160 1,037 18 177 14 15,406
* As of February 12,, 13.11
III
CITY OF YAKIMA
NUMBER OF SEWER CUSTOMERS
Commercial/
Year Residential Industrial Government Other Total
1991* 17,220 1,143 23 7 18,393
1990 17,103 1,142 23 7 18,275
1989 17,017 1,121 23 7 18,168
1988 16,418 1,070 22 7 17,517
1987 15,927 1,044 23 7 17,001
* As of February 12, 1991
CITY OF YAKIMA
MAJOR WATER CUSTOMERS
1987 1988 1989 1990
Amount Gallons Amount Gallons Amount Gallons Amount Gallons
Customer Billed Used Billed Used Billed Used Billed Used
Mueller Hop $10,840 9,269 $ 5,779 11,098 $ 6,372 12,264 $ 5,458 9,798
Products
Red Lion Inn 24,934 13,940 24,799 16,385 25,273 15,720 23,489 13,178
Town Plaza 18,344 15,051 20,529 18,719 25,768 21,126 31,770 23,009
III Sewage Treat 8,291 14,012 6,832 14,770 5,445 11,342 5,244 11,655
-ment Plant
Boise Cascade 70,084 262,370 70,370 263,961 68,889 281,272 57,250 219,292
Del Monte
Corp. 22,849 58,714 24,958 161,875 25,856 291,006 24,197 52,621
10
CITY OF YAKIMA
WATER -SEWER UTILITY
COMBINED OPERATINQ STATEMENT
WATER UTILITY 1990 1989 _._ J988 1987 1988 1985
Operating Revenues.
Water Sales $ $ 2,418,768 $ 2,413,564 $ 2,418,594 $ 2,297,840 $ 2,159,827
Other Operating Revenue 34,851 37,974 27,045 28.409 24.386
Total Operating Revenues $ $ 2,453,619 $ 2,451,538 $ 2,445,639 $ 2,326,249 $ 2,184,213
Operating Expenses. $ $ 2,023,981 $ 1,938,952 $ 1,831,874 $ 1,876,922 $ 1,764,664
Less: Depreciation (367,944) (363,158) (334,176) (297,014) (307,129)
Less: Amortization 0 0 0 (1,368) (1,368)
Less: City Taxes (383.537) (447.347) (394.700) (388,460) (399.,5.1)
Net Operating Expenses $ $ 1,272,500 $ 1,128,447 $ 1,102,998 $ 1,190,080 $ 1,056 666
Available for Debt Service $ $ 1,181,119 $ .,323,091 $ 1,342,641 $ 1,136,169 $ 1,127,547
73
Actual Debt Service $ $ 373.952 $__;x78.54 $ 375.147 $ 375.360 $ 375.194
Coverage 3.16 3.50 3.58 3.03 3.01
SEWER UTILITY
Operating Revenues: S $ 4.600,508 $_1,174.626 $ 3.985,233 $ 3,836.478 S 3.724.254
Operating Expenses. $ $ 4,438,636 $ 3,t154,097 $ 3,812,541 $ 4,023,136 $ 3,722,831
Less: Depreciation (1,108,900) (i.,C04,430) (984,251) (1,083,957) (901,400)
Less: Amortization 0 0 0 0 0
Less: City Taxes (724,168) _(645,757) (617.094) (651,948) (634.451)
Net Operating Expenses $ $ 2,605,568 $ 2,303,910 $ 2,211,196 $ 2,287,231 $ 2,186,980
Available for Debt Service $ $ 1,994,940 $ 1,870,716 $ 1,774,037 $ 1,549,247 $ 1,537,274
Actual Debt Service $ S 654.585 &....650.684 S 650.917 $ 645.381 $ 662.325
Coverage 3.05 2.87 2.73 2.40 2.32
11111 ill III
• a •
CITY OF YAKIAIA
WATER -SEWER U TILITY
BALANCE SHEET
WATER UTILITY 1990 1989 _ .1f_ 1987 1986 1985
Assets & Other Debits.
Utility Plant $ $12,064,575 $12,016,769 $ 1 2,198,086 $12,280,022 $ 12,003,329
Other Property & Investments 643,332 641,261 662,695 629,790 634,189
Current & Accrued Assets 4,398,349 3,926,988 3,671,646 2,969,077 2,705,703
Deferred Debits 43.009 _ 50.541 59,717 57.98Q 61.770
Total Assets & Other Debits $ $17.149.265 $16.635.559 $ 16.592.144 $15.936.869 $ 15,404.991
Liabilities & Other Credits:
Propietary Capital $ $ 5,468,294 $ 5,076,293 $ 5,050,367 $ 4,472,154 $ 4,139,994
Long -Term Debt 3,602,425 3,697,577 3,855,031 4,005,412 4,148,720
Current & Accrued Liabilities 306,244 286,880 299,250 235,926 125,482
Deferred Credits 236 52,721 52,840 52,840 52,840
Contributions in Aid
of Construction 7.772.066 7.522.088 7.334,65f 7,170.537 6,937.95Q
Total Liabilities &
Other Credits $ $17.149.265 $16.635,559 $11,522,144 $15.936.869 $ 15.404.991
SEWER UTILITY all
Assets & Other Debits:
Utility Plant $ $39,098,740 $39,092,302 $ 36,640,689 $37,213,514 $ 37,677,987
Other Property & Investments 1,038,255 1,085,179 1,198,680 1,071,015 1,001,985
Current & Accrued Assets 6,608,868 6,724,371 8,199,851 7,466,186 7,016,475
Deferred Debits 95.712 _ 102.997 110,633 125,650 133,312
Total Assets & Other Debits $ $46.841,575 $..41D04.849 $ 46,149.853 $45.876,365 $ 45.829
Liabilities & Other Credits:
Propietary Capital $ $ 1,894,166 $ 1,673,163 $ 1,555,535 $ 1,377,114 $ 1,763,532
Long -Term Debt 6,903,575 7,074,173 7,094,969 7,244,588 7,381,280
Current & Accrued Liabilities 287,324 675,966 254,908 328,339 229,998
Deferred Credits 6,042 0 0 0 0
Contributions in Aid
of Construction 37.750.468 J11,581.547 37,244,441 36.926.324 36.454.956
Total Liabilities &
Other Credits $ $46.841.575 $..4L)04.849 $ 46,149.853 $45.876.365 $ 45.829.766
DRAF
PROJECTED OPERATING RESULTS 0
[TO FOLLOW]
13
DRAFT
il l GENERAL AND ECONOMIC INFORMATION
The City lies in central Washington State 142 miles southwest of Seattle, Washington and 188 miles
northeast of Portland, Oregon. The City serves as the Yakima County seat and is the largest city in
Yakima County The 1990 U.S. Census population of the City of Yakima was 54,827 and of Yakima
County was 188,823. Population change for both the City of Yakima and Yakima County in recent
years is shown in the following table:
Population
City of Yakima and Yakima County
Ci► of Yakima
Year i J . Qualm
1990* 54,827 188,823
1989 50,610 187,800
1988 49,470 186,300
1987 49,600 184,400
1986 49,590 183,600
1985 49,510 182,500
1984 49,340 180,000
1983 48,500 177,000
1982 49,900 175,200
1981 49,800 175,000
1980* 49,826 172,508
*Source. U S. Census
Source. Washington State Office of Financial Management
The economy of the City is diversifienl. with a strong agricultural production base and related
0 - packing and processing, manufacturing in the areas of wood and paper producta, recreational
vehicles and aircraft assembly as well as strong commercial trade and health care sectors.
The City lies within the fertile Yakima River Valley, which is known as the "Fruit Bowl of the
Nation" due to its large fruit harvest. Irrigation in the valley is made possible from water from the
U.S. Bureau of Reclamation's Yakima Project. Apples, cherries, peaches, pears, grapes and other
fruits plus a wide vanety of vegetables, seeds, field crops and cereal grains make the Yakima Valley
one of the top agricultural producing areas of the nation.
The yield and value of the crops in the Yakima Valley are shown below for the 1989 crop year
Yakima Project Major Crops, 1989(1)
Crop Tons of Production Value
Apples 935,110 (2) $177,396,071
Hops 21,458 56,974,440
Grapes (all varieties) 158,595 49,892,179
Cherries 50,574 41,281,718
Pears 96,999 31,432,916
Mint 1,652,775 (3) 19,384,895
Asparagus 388,635 (4) 20,066,499
Hay, other 162,744 13,909,468
Hay, alfalfa 205,682 20,244,271
Wheat 2,005,557 (2) 8,585,195
Peaches 20,921 10,144,140
Irrigated pasture 339,796 (5) 5,294,552
(1) Includes land in Yakima, Kittitas and Benton counties
(2) Measured in. bushels
(3) Measured in pounds
(4) Measured in cwt, hundred pound units
(5) Measured in animal unit month
Source. U.S. Bureau of Reclamation
14
DRAFT
The largest processor, Snokist, operates two divisions in Yakima. One division fresh packs and sells
411
fruit from the 350 Snokist growers, while the second division processes fruit. Snokist processes a
large variety of local fruits including apples, cherries, bartlett pears, apricots, peaches prunes and
plums. Employment levels range from 60 to 1,200, depending on the season, with an average annual
employment level of 370 people in the Yakima area. The majority of Snokist's operations are located
within the City
Tree Top, Inc. is a farmer -owned cooperative engaged in the processing of apple juice, apple cider,
fruit juice blends, and dehydration of apples, and is the nation's larpst producer of apple juice. The
company is now producing a new product line for export to Japan. Miring the peak of the ten -month
processing season, Tree Top employs about 860 throughout Yakima County The company's primary
facilities are in Selah.
Del Monte is another local firm which processes pears and cherries. The company employs an
average of 600 people and twice that number for 10-14 weeks in late summer -early fall (harvest
season). Del Monte is located partially within the City as well as in Toppenish in the lower valley
Washington Beef, one of the largest meat processors on the west coast, operates a plant in Yakima.
The company also has plants in Ellensburg and Toppenish and sells meat to markets in Alaska,
Washington, Oregon, California and Japan. The Yakima plant employs 412 people.
M' anufacturi�nt and Transportation
Two of Yakima's largest non -food products manufacturing employers are Boise Cascade and Shields
Bag and Printing. Boise Cascade operates two sawmills, a plywood mill, and a planing and finishing
area, providing employment to 510 people. The company which has been in Yakima since 1903,
completed an $18 million remodeling and modernization effort to its Yakima plywood and sawmills
in the early 1980's. Shields Bag and Printing manufactures polyethylene bags and also does
conventional printing, employing 325 people within the City
Western Recreational Vehicles is a manufacturer of trailer and recreational vehicles in Yakima 0
which supplies dealers in 14 states. The company has grown from two employees in 1971 to about
225 employees today The firm has recently expanded its operation to include a new $2.5 million, —
120,000 square -foot building, which has doubled the firm's space.
Another growing manufacturing concern in Yakima is Dowty Aerospace, which produces aircraft
hydraulic equipment and mechanical assemblies. The company currently has 284 employees.
Transportation is an important aspect of Yakima's economy Located on State Highway 82, Yakima
is served by seven scheduled motor freight lines, Greyhound Bus, and Burlington Northern and
Union Pacific railroads. Commercial airline service is provided by United Express, PSA and Horizon
Airlines through the Yakima Airport.
Trade and Services
The City's largest non - manufacturing employers are the Yakima School District with 1,475
employees, St. Elizabeth Hospital with 850 employees, Yakima County with 775 employees
(including part -time workers) City with 532 employees, including part -time workers, and Yakima
Valley Memorial Hospital with 974 employees. The hospital is now completing the expansion of its
emergency room and energy plant, adding 7,000 new square feet at a cost of $3 million. Another
43,000 square feet is being added to the hospital for its psychiatry and surgery centers by 1990 at a
cost of $6.5 million.
Yakima is a popular spot for conventions due to its dry climate and central location in the State. In
1990, a total of 216 conventions, hosting approximately 49,794 delegates, were held in Yakima.
Approximately $9.376 million was generated for the area economy by these delegates.
Construction of a multipurpose trade and convention center, the Sun Dome, was completed in early
1990 The Sun Dome holds 8,000 people and has generated 500 direct and indirect jobs. The Sun
Dome was constructed at a cost of $8.5 million and is now the state's third domed center It hosts
concerts, athletic events, rallies and will be used during the Central Washington State Fair each
year Yakima now has a Continental Basketball Association professional basketball team, which 0
plays its home games at the Sundome.
15
f PAF 1
0 Other
About five miles northeast of the City lies the Yakima Firing Range, a military reservation :::-.. for
troop maneuvers, field training and artillery practice. One of the largest military installations in the
United States, encompassing 263,311 acres, the Yakima Firing Center trains over 10,000 National
Guard and Army Reserve personnel annually This facility has about 345 permanent military and
civilian employees.
Additional economic indicators for the City, and Yakima County are shown as follows.
Yakima Area
Largest Employers
Number of
Employer Product or Service Eninbatea
Snokist Fruit growers, packers and processors 60 -1,200
Del Monte Fruit processing 60 -1,200
Yakima School District No. 7 Education 1,475
Memorial Hospital Health care 974
St. Elizabeth Hospital Health care 850
Yakima County Government 775
Yakima City Government 532
Boise Cascade Wood products processing 510
Yakima Valley Community College Education 500
Washington Beef Inc. Beef processing 412
Easley Hauling Service Trucking/transportation 350
Shields Bag and Printing Polyethylene bags/printing 345
Yakima Training Center Military 345
John I. Haas Inc. Hops processing 300
Sti"an^ Lane 1,td Chateau Ste, Michelle Winery 300
S Dowty Aerospace Yakima Aircraft hydraulic equipment and 284
mechanical assemblies
Western Recreational Vehicles Inc. Trucks, trailers, recreation vehicles 225
Source. Yakima Chamber of Commerce, January 1991
Building Permits
City of Yakima and Yakima County
City of Yakima Yaldma County
No. of No. of
Year Pia Valuation Pig Valuation
1990 792 $32,090,152 1,352 $51,667,419
1989 695 25,804,796 1,085 38,234,373
1988 636 21,643,583 1,007 33,092,978
1987 649 23,235,310 1,125 47,812,025
1986 697 21,084,903 1,323 43,822,940
1985 640 16,732,625 1,425 41,880,516
1984 694 25,588,365 1,565 43,493,299
1983 658 18,435,507 1,415 43,285,306
1982 552 14,153,285 1,217 27.127,108
1981 673 25,591,827 1,352 27,445,556
1980 771 16,818,283 1,447 40,676,525
1979 843 34,430,652 2,004 44,649,629
Sources: City of Yakima and Yakima County building departments
16
DRAFT
Yakima County
III
Personal and Per Capita Income
Per Personal
Capita Income
Year Imams iThansaadIl
1989 $14,494 82,718,500
1988 13,262 $2,460,800
1987 12,760 2,338,800
1986 12,112 2,208,100
1985 11,226 2,046,800
1984 11,083 2,004,200
Source. U.S. Bureau of Economic Analysis
City of Yakima and Yakima County
Taxable Retail Sales
Year City County
1990• $ 520,702,000 $ 964,508,300
1989 680,095,300 1,257,570,700
1988 618,369,900 1,145,630,700
1987 570,296,700 1,105,104,300
1986 551,133,500 1,020,175,000
1985 536,896,600 1,012,081,000
1984 536,064,366 1,040,466,704
1983 516,825,494 986,713,230
1982 488,446.072 934,041,596
1981 438.474.271 862,590,119
1980 459,537,136 858,'31,064
1979 441,468,304 833,653,203
*Includes first three quarters only 411
Source: Washington State Department of Revenue
Yakima County
Labor Force and Employment Data
Annual Average
mem 18111E 181/11 181
Civilian Labor Force 101,500 98,800 93,900 91,400
Employment 91,600 87,000 83,800 80,800
Unemployment 9,900 11,800 10,100 10,600
Percent Unemployed 9.8% 11.9% 10.8% 11.6%
Total Nonagricultural Wage
and Salary Earners 64,800 62,000 59,700 57,800
Manufacturing 9,900 8,900 8,700 8,800
Food & kindred products 3,600 3,200 3,200 3,600
Lumber & wood products 1,600 1,400 1,400 1,400
Paper & allied products 900 600 700 600
Printing & publishing 500 400 400 400
Machinery excluding electrical 600 600 600 300
Transportation Equipment 1,100 1,000 900 600
Other manufacturing 1,800 1,700 1,500 1,900
Construction & mining 2,600 2,600 2,400 2,300
Transportation & public utilities 3,000 3,000 2,800 2,700
Wholesale trade 7,200 7,000 6,600 6,500
Retail trade 12,800 12,600 12,300 11,500
Finance, Insurance & real estate 1,900 1,900 1,900 1,800
Services 15,600 14,900 14,300 13,500
Government 11,800 11,200 10,700 10,600
Workers in Labor/Management Disputes 0 0 100 0
*Preliminary The preliminary statewide unemployment rate for 1988 was 6.2%
Source: Washington State Employment Security Department
17
DRAFT
„..441) LITIGATION
There is no litigation pending questioning the validity of the 1991 Bonds or the power and authority
of the City to issue the 1991 Bonds.
APPROVAL OF COUNSEL
Legal matters incident to the authorization, issuance and sale of 1991 Bonds by the City are subject
to the unqualified approving legal opinion of Preston Thorgrimson Shidler Gates & Ellis, Seattle,
Washington, Bond Counsel. A copy of the opinion of Bond Counsel will be printed on the 1991
Bonds. Bond Counsel has reviewed this document only to confirm that the portions of it describing
the 1991 Bonds and the authority to issue them, conform to the 1991 Bonds and the applicable laws
under which they are issued.
TAIMBLECION
General. In the opinion of Preston Thorgrimson Shidler Gates & Ellis, Seattle, Washington, Bond
Counsel, interest on the 1991 Bonds is excluded from gross income subject to federal income taxation
pursuant to Section 103 of the Internal Revenue Code of 1986, as amended and any Treasury
Regulations promulgated thereunder (collectively the "Code ").
The 1991 Bonds are not private activity bonds, and interest on the 1991 Bonds is not an item of tax
preference for purposes of determining alternative minimum' taxable income for individuals or
corporations under the Code. However, interest on the 1991 Bonds is taken into account in the
computation of adjusted current earnings for purposes of the corporate alternative minimum tax
under Section 55 of the Code and in the computation of tha erivirc:: =c -•.zll t^r.:,r. ccrrcrntiens under
Section 59A of the Code as more fully descnbed in this sectiz.. ;::.per ;: hcaa.. g :;r Federal
Income Tax Consequences."
Except as described herein, Bond Counsel expresses no opinion on any federal, state or local tax
consequence arising with respect to ownership of the Bonds.
Certain Federal Income Tax Consequencea. The following is a discussion of certain federal tax
matters under the Code. This discussion does not purport to deal with all aspects of federal taxation
that may be relevant to particular bondowners. Prospective bondowners, particularly those who
may be subject to special rules are advised to consult their own tax advisors regarding the federal
tax consequences of owning and disposing of the 1991 Bonds, as well as any tax consequences arising
under the laws of any state or other taxing jurisdiction.
Alternative Minimum Tax on Corporation. Section 55 of the Code imposes an alternative
minimum tax on corporations equal to the excess of the tentative minimum tax for the taxable
year over the regular tax for such year The tentative minimum tax is based upon alternative
minimum taxable income which is regular taxable income with certain adjustments and
increased by the amount of certain items of tax preference. One of the adjustments is a rtion
(75% for any taxable year beginning after 1989) of the amount by which a corporation's adjusted
current earnings exceeds the corporation's alternative minimum taxable income (determined
without regard to such adjustment and the alternative tax net operating loss deduction).
Interest on tax- exempt obligations, such as the 1991 Bonds, is included in a corporation's
adjusted current earnings.
Environmental Tax on Corporations. Section 59A of the Code imposes an environmental tax on
corporations for taxable years beginning before January 1, 1996 (subject to certain exceptions)
equal to 12 percent of modified alternative minimum taxable income (determined, in part,
without regard to the alternative tax net operating loss deduction) that is in excess of
$2,000,000. Interest on tax- exempt obligations, such as the Bonds, is included in a corporation's
alternative minimum taxable income for purposes of this environmental tax. The environmental
tax is payable whether or not an alternative minimum tax is payable.
r
18
DRAFT
Qualified Tax - Exempt Obligations. The City has designated the 1991 Bonds as Qualified Tax- OP
Exempt Obligations for banks, thrift institutions and other financial institutions so that such
financial institutions will not be denied a deduction of 100% of their interest expenses allocable
to the 1991 Bonds. However, corporate tax preference rules reduce by 20% the amount that may
be deducted by such financial institutions for interest on funds allocable to tax- exempt
obligations such as the 1991 Bonds.
Sorrowed lends. The Code provides that interest paid on funds borrowed to purchase or carry
tax- exempt obligations during a tax year is not deductible. In addition, under rules used by the
Internal Revenue Service for determining when borrowed funds are considered used for the
purpose of purchasing or when carrying particular assets, the purchase of obligations may be
considered to have been made with borrowed funds even though the borrowed funds are not
directly traceable to the purchase of such obligations.
Property and Casualty Insurance Companies. The deduction for loss reserves for property and
casualty insurance companies is reduced by 15 percent of the sum of certain items, including the
interest received on tax- exempt obligations, such as the Bonds.
Social Security and Railroad Retirement Benefits. The Code also requires recipients of certain
Social Security or Railroad Retirement benefits to take into account, in determining gross
income, receipts or accruals of interest that is exempt from federal income tax.
Branch Profits Tax. Certain foreign corporations doing business in the United States may be
subject to a branch profits tax on their effectively connected earnings and profits, including tax -
exempt interest on obligations such as the 1991 Bonds.
Corporations. Certain S corporations that have subchapter C earnings and profits at the
close of a taxable year and gross receipts more than 25% of which are passive investment
int Arne which includes interest on tax- exempt obligations, such as the 1991 ponds, way :rc
subject to a tax on excess net passive income.
RA TING
As noted on the cover page of this Official Statement, the City has applied for a rating for the 1991
Bonds from Moody's Investors Service. The rating reflects only the view of the rating agency and an
explanation of the significance of the rating may be obtained from the rating agency. There is no
assurance that the rating will be retained for any given period of time or that the rating will not be
revised downward or withdrawn entirely by the rating agency if, in its judgment, circumstances so
warrant. Any such downward revision or withdrawal of the rating will be likely to have an adverse
effect on the market price of the 1991 Bonds.
UNDERWRITING
The 1991 Bonds are being purchased by Seattle - Northwest Securities Corporation acting as the
Underwriter The purchase contract provides that the Underwriter will purchase all of the 1991
Bonds, if any are purchased at a price of % of the par value of the Bonds, plus accrued
interest. The 1991 Bonds will be reoffered at an average price of % of the par value of the
1991 Bonds. After the initial public offering, the public offering prices may be varied from time to
time.
OFFICIAL STATEMENT
The City hereby deems this Preliminary Official Statement pursuant to Securities and Exchange
Commission Rule 15c2 -12 as final as of its date except for the omission of information dependent
upon the pricing of the issue and the completion of the underwriting agreement, such as offering
prices, interest rates, selling compensation, aggregate principal amount, principal amount per
maturity, delivery dates, ratings, and other terms of the 1991 Bonds dependent on the foregoing
matters.
_ _ _ _
_ _ - -
19
DRAFT
0
Appendix A
0
ATTACHMENT II
411
•
ATTACHMENT 11 June 28, 1991
41
City of Yakima
Water and Sewer Revenue and Refunding Bonds, 1991
Revised Schedule of Events
Council City Council
Staff: City of Yakima staff
SNW. Seattle- Northwest Secunties Corporation (Managing Underwriter)
PT Preston Thorgnmson Shidler Gates & Elhs (Bond Counsel)
HDR. HDR Engineenng (Consulting Engineer)
Date Event Parti
4110 July 8 Complete draft Bond Ordinance and legal opinion PT
July 8 Complete draft Consulting Engineer's Report HDR
July 10 Complete draft POS SNW
July 12 Ordinance sent to Council Staff, PT
July 16 Adoption of Bond Ordinance Council
July 29 Mail POS to potential investors SNW
July 29 Advertise in local press SNW
August 5 Bond pncing SNW, Staff
August 6 Adoption of Bond Resolution Council
August 19 Closing and investment of proceeds PT, Staff, SNW
/41110