HomeMy WebLinkAbout11-29-2010 Special
f . . . .
CITY OF - ~ . _ _ . * . CITY COUNCIL
SPECIAL MEETING AGENDA
WASHINGTON NOVEMBER 29, 2010 5:00 PM ~I. CALL TO ORDER
II. ORDIIVANCE NO. 6335* (Backus/Coleman) ~
An Ordinance of the City ofi Aubum, Washington, relating to the combined
water supply and distribution system, the sanitary sewage system-and the
storm drainage system; providing for the issuance of [two series] of utility.
, system revenue bonds in t_he aggregate principal amount of $
of the City (1) to pay [a portion of] the cost of certain improvements
desccibed herein, (2) to fund the reserve requirement, and (3) to pay the.
costs of issuance and sale of the bonds; fixing the date, form, maturities,
inferest rates, terms and covenants of the bonds; and approving the sale
and providing for the delivery of the bonds to Seattle-Northwest Securities
Corporation of Seattle, Washington.
A draft copy of the _ ordinance has been provided to the Council. The
ordinance in its final form will be available the dayof the meeting.
(Council action requested: City Council introduce and adopt Ordinance
No. 6335.)
III. ADJOUR9VMENT
City Council agendas and minutes are availab/e to the public at the City.C/erk's
Office, on the City website, and via e-maiL Comp/ete agenda packets are
available for review at the City C/erk's Qffce and at the Library. Interhet: http://www.auburnwa.gov ,
Page 1
' CI'i`Y OF
AGENDA BILL APPROVAL FORM
rt WASH[NGTON
Agenda Subject: . Date:
Ordinance No. 6335 November 15, 2010
Deoairtments
Atta~hnt~nffi~------ --~~1mR~~t:_------------------------
Finance Ordinance No. 6335
-
Administrative Recommendation:. ~
Ci Counal ado t Ordinance No. 6335
Background Summary:
Ordinance No. 6335 provides for the issuance of two series of utility system revenue bonds of the City in
the aggregate principal amount'of $ , for the combined'water supply and distribution system,
the sanitary sewage system and the.storm drainage system to provide funds with which to (i) pay [a portion ofj the,cost of certain improvements, (ii) fund the reserve requirement, (iii) pay costs of issuance of
the bonds; fibang the date, form, mafurities, interest rates, terms and covenants of the bonds; establishing
a bond redemption fund; a project fund and a project account; and approving the sale and providing for
the delivery of the bonds to Seattle-Northwest Securities Corporation of Seattle, Washington.
. .
N1029-1
F2.3.5 ~
Reviewed by Council & Committees: Reviewed by Departrnents & Divisions:
❑ Arts Gommission COUNCIL COMMITTEES: ❑ Building ❑ M&0
0 Airport 0 Fnanoe . ❑ Cemetery ❑ Mayor
❑ Hearing Examiner 0 Muniapal Serv. 0 Finance p Parks
❑ Human. Services 0 Planning & CD p Fire ❑ Planning
0 Park Board 10 Public Works ❑ Legal ❑ Police
p Planning Comm. ❑ Other ❑ Public Works ❑ Human Resouroes
❑ Infortnation Services
Aetion:
Comm(ttee Approval: OYes ❑No
Counal Approval: [JYes 13No Calt for Public Hearing
Referred to Until
Tabled Until
Councilmember: Backus Staff: Coleman
Meetirt Date: November 29, 2010 Item Number:
~,jJ$LaN* MORE THAN YOU llvIAGINED
Draft Dafed 11/10/10
.
CITY OF AUBURN, WASHINGTON
RDINANCE N0. 6335
O
AN ORDINANCE of the City of Auburn, Washington, relating to the
combined water supply and distribution system, tlie sanitary sewage system and
.
the storm drainage system; providing for. the issuance of [two series] of utility
system revenue bonds in the aggregate grincipal amount of of the City
(1) to pay [a porti_on of] the cost of certain improvements described herein, (2) to
fund the reserve requirement, and..(3) to pay the costs of issuance and sale of the
bonds; fixing the date, form, maturities, interest rates, terms and covenants of the
bonds; and approving the sale and providing for the delivery of the bonds to
Seattle-Northwest Securities Corporation of Seattle, Washington.
: Prepared by
Foster Pepper PLLC . . :
1111 Third Avenue, Suite 3400 -
Seattle, Washington 98104 , . (206) 447-4400
.
.
Draft Dated 11/10/10
TABLE OF CONTENTS
............................................................1
Section 1. Recitats and Findings
Section 2 . Defitifions . ........2
Section 3_ Authorization and Description of the Bonds ...........7
8
Section 4. Registration and Transfer of Bonds
~ Section 5 . Payment of Bonds .......9
_ . .
.9 .
Section 6. Redemption Provisions and Open Market Purchase of Bonds
Section 7 Notice of.Redemption ............................12
_ . .........................................................13
Section 8 . Failure to Redeem Bonds .
Section 9.'The Bond Fund; Payments into Bond Fund ...13
Section 10 . Rate Stabilization Fund :......:..................14
, , . . .
Section 11 . Pledge of Revenue and Lien Position ................:.....................................................15
• Section 12 Deposit of Bond Proceeds 15 :
Section 13. Covenants .........................................................15
Section 14. Flow of Funds. ..........................................18 ~ .
.18 .
Section 15 . Provisions for Future Parity Bonds . .
_ Section 16. Separate Utility Systems . ..............19 . .
Section 17 : Contract Resource Obligations . .......................19
Section 18. Form and Execution of Bonds ...................................20
Section 19 Bond Registrar . ...20
Section, 20 P'reservation of Tax Exemption for Interest on 2010A Bonds 21
• _
Sectioo 2_1 . Designation of 2010A Bonds as ".Qualified Tax-Exempt Obligations." 21
Section 22 . Election to Treat 2010B as "Build America Bonds" ............................................:..21 ~
Section 23. Refunding or Defeasance of the Bonds ..................................................:.21 . "
, Section 24 . APProval of Bond Purchase:Contract .........:...22 .
Section 25 . Preliminary Official Statement Deemed Final ............23
Section 26. Undertalcing to Provide Continuing Disclosure , 23 .
.26
Section 27 . Supplemental or Amendatory Ordiriances ~
Section 18. Defaults and Remedies ; 28 ~ -
Section 29. Ratification . _ . 32
Section 30. Effective Date of Ordinance . ..................32
,
CITY OF AUBURN, WASHINGTON
ORDINANCE NO. 6335
AN ORDINANCE of the City of Auburn, Washington, relating to the
combined water supply and distribution system, the sanitary sewage system and
the storm drainage system; providing for the issuance of [two series] of utility
system revenue bonds in the aggregate principal amount of of the City
(1) to pay [a portion ofJ the cost of certain improvements described herein; (2) to
fund the reserve requirement, and. (3) to pay the costs of issuance and sale of the .
bonds; fixing the date, form, maturities, interest rates, terms and covenants of the
bonds; and approving the sale and providing for the delivery of the bonds to Seattle-Northwest Securities Corporation of Seattle, Washington.
THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, DO ORDAIN as
follows:
Section 1. Recitals and Findiin~s. The City Council of the City of Auburn, Washington
(the "City") makes the following findings and determinations:
(a) Background. The City now owns, operates and maintains a water supply and
distribution. system and a sanitary sewage system, which systems were combined pursuant to
RCW 35.67.320 by Ordinance No. 961, passed and approved March 7, 1950, and further
combined with the storm drainage system by Ordinance No. 4945, passed February 18, 1997.
The eombined systems, including all additions, betterments and extensions at any time made, are
collectively refened to as "Combined Utility System of the City" or the "System."
(b) Plan of Additions. The City has adopted the Plan of Additions and is now in need
of funds with which to finance the Improvements (defined below), which comprise a portion of
the Plan of Additions, ttie estimated cost of which is more than $20,000,000, and the City does
not have available sufFicient funds to pay the costs. _
(c) Outstanding Parity Bonds. Pursuant to Ordinance No. 5930, the City issued its
$2,765,000 paz value Utility System Revenue Refunding Bonds, 2005 (the "2005 Bonds"), and
reserved the right to issue additional utility system revenue bonds which would constitute a lien
and charge upon -the gross revenues of the Combined Utility System on.a,:parity with those bonds
if the conditions set forth in Section 17 of Ordinance No. 5930 (the""Parity Coriditions") are met.
(d) Parity Conditions Met. The City Council finds and declazes that the amounts
required to haye been paid into the Bond Fund for the Outstanding Parity Bonds have been paid
anci maintained as required therein, and that all other Parity Conditions for the issuance of the
Bonds as Future Parity Bonds will have been met and satisfied before the Bonds are delivered to
the original pui-chaser thereof.
51095926.3 -
Draft Dated 11/10/10
(e) Sufficiency of Gross Revenue. The City Council finds and determines that the
Gross Revenue and benefits to be derived from the operafion and maintenance of the. System at
the'rates to be charged for services from the System will be more than sufficient to meet all
Maintenance and Operation Expense and to permit the setting aside into the Bond Fund out of
the Gross Revenue of amounts suiicient to pay the principal of and interest on the Outstanding
Parity Bonds and the Bonds when due. The City Council declares that in fixing the amounts to
be paid irito the Bond Fund iinder this ordinance it has exercised due regard for lviaintenance and
Operation Expense and has not obligated the City to set aside and pay into the Bond Fund a
greater amount of Gross Revenue of tlie System than in its judgment will be available over above :
such Maintenance and Operation Expense.
( fl Purchase Of j`'er. Seattle-Northwest Securities Corporation has presented a Bond
Purchase Agreement offering to purchase the Bonds under the terms and conditions as set forth
in this ordinance.
(g) Issuance of Bonds. Based on the foregoing, the City Council therefore determines
that it is in the best interest of the City to borrow money by the` issuance of [two. series ofJ utility
system revenue bonds (tlie "Bonds'~ (a) to pay [a.portion ofJ the costs of the.Improvements, (b) to fund the Reserve Requiremerit and (c) to pay the costs of issuance and sale of such bonds.
Section 2. Definitions. As, used in this ordinance, the following words shall have the
following meanings: ~ (a) "2010A Bonds" means the $ par value Combined Utility System -
Revenue Bonds, 2010A, of the City issued pursuant to and for the purposes provided in this
ordinance.
(b) "2010B Bonds" means the $ par value Combined Utility System
Revenue Bonds,2010B (Taxable Build America Bonds- Direct Payment), of the City issued
pursuant to and for the purposes provided in this ordinance.
(c) "2005 Bonds" means the outstanding Utility System Revenue Refunding Bonds,
2005, of the City issued pursuant to Ordinance No. 5930.
_ '(d) "Alternate Security" means any bond insurance, reserve insurance, collateral; . ,
security, letter of credit, guaranty, surety bond or similar credit" enhancement device providing
for or securing the payment of all or part of the principal of and interest on Parity Bonds, which:
(i) is non-cancelable, and (ii) is issued by an institution which has been assigned, at the time of
issuance of the'particular issue of Parity Bonds in connection with which tlie"Alternate Security
is acquired, a credit rating equal to or better than the `highest two rating categories by both
Moody's Investors Service, Inc„ and- Standard & Poor's (without regazd to gradations with in
those categories). Altemate Security includes, in lieu of cash and investments, such a security
obtained by the City for the purpose 'of satisfying part or all of the Reserve Requirement for the
Parity Bonds then outstanding.
(e) "Annual Debt Service"' means for any calendar year for the Parity Bonds (or for
any series thereof, as applicable),' a11 the interest, plus all principal (except principal of Term
Bonds due in any Term' Bond Maturity Year), plus all mandatory redemption and sinking fund
s1095M.3 -2-
Draft Dated 11/I0/1 D'
- instatlments for that yeaz, less all bond interest payable from the proceeds of any such Parity
Bonds in that yeaz.
( fl "Assessment Bonds" shall mean the original principal amount of any issue of
Parity Bonds equal to the.total principal amount (or, if refunding bonds,, the remaining unpaid
principal amount) of ULiD Assessments on any final assessment roll or rolls of one or more.
ULIDs formed in connection with the improvements being financed by such issue of bonds (or
bonds being refunded). The original principal amount of such issue of bonds in excess of
Assessment Bonds shall be referred to as "bonds (or Bonds) that are not Assessment Bonds." Assessment Bonds shall be allocated to each $5,000 of bonds in proportion to the'ir percentage of
the entire issue of bonds. When a bond of any issue of bonds containing Assessment Bonds is.
redeemed or purchased, and retired, the same percentage of that bond as the percentage of
Assessment Bonds is to the total issue of those bonds shall be treated as Assessment Bonds being redeemed or purchased and retired. .
(g) "Average Annua[ Debt Service" means, as of its date of calculation; the. sum of
the Annual Debt Service for the remaining calendar years to the: last scheduled maturity of the
applicable issue or issues of bonds divided by the number of those years. For purposes of
computing the Reserve Requirement the estimated,amount of bonds to be redeemed prior to .
maturity may be taken into account if required under federal arbitrage regulations.
(h) "Bond Fund" means that special fund of the City known as the Utility System
Revenue Bond Fund created by Section 10 of Ordinance No. 4945 for the payment of the :
principal of and interest on the Parity Bonds.
(i) "Bond Register" means the registration books of the Bond Registrar on which are
recorded the names of the owners of the Bonds.
(j) "Bond Registrar" means the.fiscal agent for the State of Washington (as the same
may be designated by the State of Washington from time to time).
(k) "Bonds" means, collectively, the 2010A Bonds and the 2010B Bonds.
(1) "City" means the City of Aubum, Washington.
(m) "Code" means the Internal Revenue Code of 1986, as amended from time to time.
(n) "Construction Accounts" means such accounts created , in such System Funds as
the Finance Director shall designate for the purpose of paying tlie costs of the Improvementsand
the costs of issuance of the Bonds.
(o) "Contract Resource Obligation" means an obligation of the City, designated as a
Contract Resource Obligation and entered; into :pursuant to Section 16 of this ordinance; to make
payments forwater supply, sewer service, water, sewage or stormwater transmission or other commodity or service to another person or entity (including without limitation a sepatate _utility
system created pursuant to Section 15 of this ordinance and Section 18 of Ordinance No. 4945).
5 10959zs.3 -3-
Draft Dated 11/I 0/10
(p) "Coverage Requiremenf' in_any calendaz yeaz means an amount of Net Revenue
at least equal to 1.25 times the Annual Debt Service, in that year on all Parity Bonds that aze not
Assessment Bonds. Upon redemption or defeasance of all Outstanding Parity Bonds, ihe following
sentence shall be added: Ij any Assessment Bonds are outsfanding, the Coverage Requirement shall
also mean, in qny calendar year, an amount of ULID Assessntents at least equal to 1.0 times the ,
Annual Debt Service in that year on all Parity Bonds that are Assessment Bonds.
(q) "DTC" means The Depository Trust Company, New York, New York.
" . (r) "Finance Director" means the City Finance Director or the officer that is the
successor to substandally the functions and duties of the: Finance Director.
(s) "Future Parity Bonds" mearis any and all utility system revenue bonds of the _
City issued after the date of the issuance of the .Bonds, the payment of the principal of and
interest on which constitutes a. charge or lien on the Net Revenue and ULID Assessments equal
in rank with the charge and lien upon such revenue and assessments required to be paid into the
Bond Fund to pay and secure the payment of the principal of and interest on the Outstanding ;
Pariry Bonds and the Bonds. ,
(t) "Government Obligations" means . those obligations described urider the
definition.of government obligations in RCW 39.53.010(4), as it now reads or hereafter may be
amended, and wluch are otherwise lawful invesfinents for the City at ttie time of such
investinent.
,
(u) "Gross Revenue of the System" or "Gross Revenue" means all of the earnings
and revenues received by . the City from the maintenance and operation of the System and all
earnings from the investment of money in the Bond.Fund which earnings are deposited iri-the
Principal and Interest Account, and connection and capital improvement charges collected for
the purpose of defraying tiie costs of capital facilities of the System. Gross Revenue includes ;
any Tax Credit Subsidy Payments received by the City in.respect of any Parity Bonds. Gross
Revenue shall not include: ULID Assessments, government grants, proceeds from the sale of
System property; City taxes collected by or through the- Sysfem, principal pmceeds of bonds or
other obligations and earnings or; proceeds from-any investments in a trust, defeasance or escrow
fund created to defease or refund System obligations (until . commingled with- other earnings and revenues of the System) or held in a special account for.the purpose of paying,a. rebate to the United States Govemment under the Code, on earnings of a separate utility system that may be
created under Section 15 of this ordinance.
(v) "Improvements" means tliose impro"vements in the City's Plan of Additions that
aze described in Exliibit A to this ordinance, which is :incorporated by reference.
(w) "Independent` Utility Consultanf' means either (1) an independent licensed
professional engineer experienced in the design, constivction or operation of municipal utilities
of comparable size and chazacter to the System, or (2) an independent certified public accountant
or other professional consultant experienced in the development of rates and charges for
municipal utilities of comparable size and character to the System.
;51095926.3 -4-
Draft Dated 11/I0/10 _
(x) "Letter of Representations" means the Blanket Issuer Letter of Representations
dated February 18, 1997, between the City and DTC; as it may be amended from time to time.
, (y) "MSRB'' means the. Municipal. Securities Rulemaking Boazd.
(z) "Maintenance and Operation Expense" means all reasonable expenses incurred
by the City in causing the System to be operated and maintained in good repair, working order
and condition; including without limitation payments made to any other municipal corporation or .
private entity as Contract Resource Obligations, and payments with respect to any other expenses
of the System that are properly treated as maintenance and operation expenses under generally
accepted accounting. pr'inciples applicable~to municipal corporations. The term Maintenance and
; Operation Expense does not include any depreciation or capital additions or capital replacements to the System.
(aa) "Maximum Annual Debt Service" means at the time of calculation, the
maximum amount of Annual Debt Service that will mature or come due ia the curcent calendar
year or any future year on the outstanding Parity Bonds. (bb) "Net Revenue of the System" or "Net Revenue" means the Gross Revenue: (a)
less (1) Maintenance and Operation Expense, (2) deposits into the Rate Stabilization Fund, and
(3) proceeds from the sale of the property of the System; and (b) plus withdrawals from the Rate
Stabilization Fund.
(cc) "Outstanding I'arity Bonds" means the 2005 Bonds.
- (dd) "Parity Bonds" means the Outstanding Parity Bonds, the Bonds and any Future
Parity Bonds.
(ee) "Parity Conditions" means those conditions for the -issuance of Future Parity
Bonds, which were originally set forth in Section 17 of Ordinance No. 5930, as such conditions
aze now set forth in Exhibit B; attached to this ordinance and incorporated by this reference.
(f fl "Plan of Additions" means the system or plan of additions and betterments to and
extensions of the Combined Urility specified, adopted and ordered to be carried out by the water
system, sewer system, and storm drainage system Capital Facilities Plans of the. City adopted and
updated in connection with to the City's Comprehensive Plan for each system, as most recently
amended. and updated by Ordinance No. , adopted on December 2009, and specified
in Exhibit A, which is incorporated by reference.
(gg) "Principal and Interest Account" means the account of that name created in the
Bond Fund for the payment of the principal of and interest on the Parity Bonds.
(hh) "Rate Stabilization Fund" means the Utility System Rate Stabilization :Fund
created in Section 11 of Ordinance No. 4945. _
(ii) "Rating Agency" means any nationally recognized rating agency then
maintaining a rating for the Bonds at the request of the City.
. .51095926.3 -5-
Draft Dated I1/10/10
~ (jj) "Reserve AccounP' means the account of tliat name created in the Bond Fund for
the purpose of securing the payment of the principal of and interest on the Parity Bonds.
(kk) "Reserve RequiremenP' means, for all Parity Bonds, the lesser of (i) Maximum.
Annual Debt Service on those bonds or (ii) 125% of Average Annual Debt Service on those
bonds, but at no time shall the Reserve Requirement exceed 10% of the proceeds of those bonds. -
Variable Interest Rate Bonds sha11 be assumed to bear interest at a fixed rate equal to the higher
- of (1) the highest variable:rate bome during the preceding 24 months by any outstanding variable
- rate revenue bonds of the System;or, (2) if no such Variable Interest Rate Bonds are o.utstanding
at the time of calculation, the rate borne by other variable; rate debt the interest rate for which is
determined by reference to an index comparable to the index to be used to determine the interest
rate on the Future Parity Bonds pmposed to be issued. Notwithstanding the above, the deposit to
be made in the Reserve Account shall be decreased for any issue of Parity Bonds when, and to the
extent that the City provides 'for an Alternate Security to be deposited into the `Reserve Account
to secure the payment of the principal of and interest on that issue of bonds. .The amount payable
under any Altemate Security shall. be credited againsf the amount otherwise required to be made
into the Reserve Account to. meet; the Reserve Requirement for ~ that issue of bonds. When .
calculating the Reserve Requirement with reJerence to any year in which Tax Credu Subsidy
Bonds are outstanding, the City shall exc[ude the,amount of Tax Credit Subsidy Payment that
the City is then eligible.to_ receive from Annual Debt Service The preceding sentence shaU
apply to calculations with respect to calendar years occurring after the scfieduled redemption
of all Outstanding Parity °Bonds and may take effect as to all calendar years upon the:
redemption or defeasance of such Outstanding P, arity Bonds, or if !he City obtains consent to..
such amendment from the 'requisife number of bond owners; all purchasers of the Bonds, by
taking and holding the same, shall be deemed to have consented to such provuion.
(11) "3EC.' means the Securities and Exchange Commission. (mm) "System" or "Utility System" means the City's existing combined water supply _
and distribution system, sanitary sewage system, stomi and surface water utility, together with all
additions thereto and betterments and extensions thereof at any time made or constructed; and
shall include any utility, systems hereafter combined: with the System. - The System shall not
r service, ~
m~clude anY additional sYstems for water suPp1Y, sewe ' water, . sewage or stormwater
transmission, , treatment or other commodity , or service that- may be created, acquired or
constructed by the City as a separate utility system as provided in Section I 1 of Ordinance
No. 4945 and Section 16 of this ordinance. (nn) "System Funds" means,collectively, the Water Fund, Sewer Fund and Storm
Drainage Fund including without limitation any. Construction Accounts or other accounts or
subaccount created thereon.
(oo) "Tax Credit Subsidy Bond' means any bond that is designated by the City as a
"build America bond" or other tax credit bond, pursuant. to the Code, and which is further
designated as a"qualified bond" und'er Section 6431_ ofthe Code, and with respect to which the `
City is eligible to receive a Taz Credit Subsidy Payment.
51095926J ~ .
Dra, ft Dated 11/10/10
~
(pp) "Tox Credit Subsidy PaymenP' means the amounts which. the City i"s entitled to
receive as a tax credit payable by the United States Treasury to the City under Section 6431 of
the Code, in respect of any bonds issued as Tax Credit Subsidy Bonds.
(qq) "Term Bond Maturity Year" means any calendar year in which Term Bonds are ,
scheduled to mature.
(a) "Term Bonds" means the bonds of any. single issve. or series of Parity Bonds
designated as such in the ordinance authorizing their issuance or sale.
.
(ss) "ULID" means Utility Local Imp'rovement District.
(tt) "ULID Assessments" means all assessments levied and collected in any ULID of
the City created for.the acquisition or construction of additions to and extensions and bettertnents
' of the System if'such assessments are pledged to be paid into the Bond Fund (less any prepaid
assessments paid or to be paid into a construction fund- or account). ULID Assessments shall
include installments thereof and any interest or penalties°that may be due thereon. (uu) "Variab[e Inferest Rate" means a variable interest'rate or rates to be.bome by a
series of Futwe Parity Bonds or any one or more maturities within a series' of Future Parity
Bonds. The method of computing such a variable interest rate shall be specified in the ordiriance
authorizing such Future Parity Bonds, which ordinance also shall specify either (i) the particulaz
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. .
(w) "Variable Interest Rate Bonds" means, for any period of time, Future Parity Bonds which beaz a Variable Interest Rate during lhat period, except that Future Parity Bonds the
interest rate or rates on wluch shall have been fixed for the remainder of the term thereof na
longer shall be deemed to be Variable Interest Rate Bonds.
.
Section 3. Authorization and Descriation of the Bonds. For the purpose of providing
the funds necessary (a) to pay [a portion ofJ the costs of the Improvement"s, (b) to fund the
Reserve Requirement and (e) to pay the cost of issuance and sale of tlie Bonds, the Cityy'shall
issue utility system revenue bonds in the aggregate principal amount of $ : Tlie: Bonds .
shalI be issued in [two series, 'individually defined as the "201 OA Bonds" and the "2010B
Bonds;" and, collectively, as the "Bonds."] The 2010[A] Bonds shall be called the Utility
System Revenue Bonds, 2010[A], of the Ci.ty and shall be issued in the aggregate principal
amount of $ .[T'he 2010B Bonds shall be called the Utility System Revenue Bonds,
2010B (Taxable Build America Bonds - Direct Payment), of the City and shall be issued in the
aggregate principal amount of $ The Bonds shall be dated their initial date of deliyery; shall` be in the denomination of
, $5,000 or any integral muldple thereof within a single maturity; shall be numbered separately in
the manner and with any additional designation as the Bond Registraz " deems necessary for
purposes of identification; shall bear interest (computed on the basis of a 360-6y year of twelve
30-day months) payable semiannually on each June :1 and December 1, commencing June 1,
2011, to the maturity of the Bonds.
51095926.3 -7-
Draft Dated II/10/10
The 2010A Bands shall,mature on December 1 in the yeazs and amounts and beaz interest
: at the rates per annum as follows: .
Princlpal Principal
_ Maturities Amounts Interest:Rates Maturities Amounts Interest Ratea
2011 ~ $ % $ % :
. ~ , The 2010B Bonds shall mature on December 1 in the years and amounts and bear interest
at the rates per annum as follows:
" Principa! Principal
Maturities Amounts Interest Retes Msturities Amouats Interest Rstes
$ % $ %
2030.
Section 4:, Resistration and. Transfer of Bonds. ' The Bonds shall be issued only in
,
registered form as to both principal and interest and shall be recorded, on the Bond Register. The
. Bond Register shall contain the name and mailing address of the owner of each Bond and: the .
- principal amount and number of each of the Bonds held by each owner. `
Bonds surrendered to. the Bond Registrar may be exchanged for Bonds in.any authorized"
denomination of an equal aggregate principal amoiint and of the same series, interest rate and
maturity. Bonds may be transferred orily_ if endorsed in the manner provided thereon and
surrendered to the Bond Registrar: ~Any exchange:or vansfer shalt be without cost to the owner • -or transferee. The Bond Registrar shall not be oliligated to exchange or transfer any Bond during
the 15 days preceding any principal payment or redemption date.
The Bonds initially shall be re'gistered in the naine of CedeGo., as the nominee of
DTC. The Bonds so registered s1ia1T be held in fully immobilized form by DTC as depository in
accordance with the provisioris ofthe LetCer of Representations. Neither the City nor the Bond
Registrar shall have any responsibility or obligation to DTC participants or the persons for whom
they act as nominees with respect to the Bonds regarding accuracy of any records maintained by
DTC or DTC parEicipants of any' ainount in respect of principal of or interest on the Bonds, `or
any notice which is pertnitted or required to be given to registered owners hereunder (except. .
such notice as is required to begiven by the Bond Registrar to DTC).
Draft Dated 11/7 0/10
For so long as any Bonds are held in fully immobilized form, DTC, its nominee or its '
successor depository shall be deemed to be the registered owner for a1l- purposes hereunder and
~ a11 references to rS'stered owners, bondown
e ers, bondholders or the 1ilce shall mean DTC or 'its
~
nominees and shall not mean the owners of any beneficial interests in the Bonds. Re 'stered -
ownership of such Bonds, or any portions thereof, may not thereafter be transferred except; (i) to
any successor of DTC or its nominee, if that successor shall be qualified under any applicable
laws to provide the seniices proposed to be provided by it; (ii) to any substitute depositoy
appointed by the City or such substitute, depository's successor; or (iu) to any person if the '
Bonds are no longer held in immobilized form.
Upon the resignation of DTC or its successor (or any substitute depository or its
successor) from its functions as depository, or a determina.tion by the City that it no longer
wishes to continue the system .of, book entry transfers through DTC- or its successor (or any
substitute depository or its successor), the City may appoint a substitute depository. Any such
. substitute depository shaiT be qualified under any applicable laws to provide the services
proposed to be provided by it.
If (i) DTC or its successor (or substitute depository or its successor) resigns from its
functions as depository, and no substitute depository can be obtained, or (ii) the City deterniines that the Bonds aze to lie in certificated form, the ownership of Bonds may be transferred to any
person as provided herein and the Bonds no longer shall be held in fully immobilized form.
Section 5. Pavenent of Bonds. Both principal of and interest on the Bonds shall lie
payable in lawful money of tlze United States of America. Interest on the Bonds shall be paid by
checks or drafts of the Bond Registrar mailed on the interest pa~yment date to the registered
owners at the addresses appearing on the Bond Register on the 15. day of the month preceding
the interest payment date or; if requested in writing by a registered owner of $1,000,000 or more
in principal amount of Bonds prior to the applicabTe record date, by wire transfer on the interest
payment date. Principal of the Bonds shall be payable upon presentation and surrender of the
Bonds by the registered owners to the Bond Registraz. Notwithstanding the foregoing; as long as _
the Bonds are registered in the name of DTC or its nominee, payment of principal of and interest
on the Bonds shall be made in the manner set forth in the Letter of Representations.
Section 6. Redemntion Provisions and Ooen Market Purc6ase of Bonds.
(a) Optional. Redemption of the 2010A Bonds. The 2010A Bonds (maturing in the
years 2011 through 2020, inclusive,] shall be issued without the right or option of the City to
redeem those 2010A Bonds prior to their stated maturity dates. [The City reserves the, right and
option to redeem the 2010A. Bonds maturing on or after December 1, 2021, prior to their stated
maturity dates at any dme on or after December 1, 2020, as a: whole or in part, at par plus
accrued interest to the date fixed for redemption.
(b) Optional Redemption of the 2010B Bonds. The 2010B Bonds maturing,in the
years 2011 _through 2020, inclusive, sha11 be issued without the right or option of the City to
redeem those 2010B Bonds prior to their stated maturity dates, The City reserves the right and
option to redeem the 2010B Bonds maturing on or after December 1, 2021, prior to their stated
maturity dates at any time on or after December 1, 2020, as a whole or in part, at paz plus accrued interest to the date fixed for redemption.
51095926.3 -9-
Draft Dated 11/10/10
' (c) Extraordinary Optional Redemption of .2010B Bonds. The City additionally
reserves the right and option to redeem the 2010B Bonds prior to their stated maturity dates at
any time prior to December.l, 2020, as a whole or in part, upon the occurrence of an
Extraordinary Event, at the Extraordinary Optional Redemption Price.
An "Extraordinary Event" will have occurred if (a) Section 54AA or 6431 of the 1986
Code (as such Sections were added by Section 1531 of the ARRA, pertaining to "Build America.
Bonds") is modified or amended in. a manner pursuant to which the Gity's'35% cash subsidy
pay_ment from the United States Treasury Department is reduced or eliminated, or (b) guidance is
published by the IRS or U.S. Treasury Department with respect to such Sections that places one
or more substantive new conditions- on the receipt by the City of such 35% cash subsidy
payments and such condition(s) are unacceptable to the' City. .
"Treasury Rate" means, with: respect to ariy. date fixed for redemption for a particular.
2010B Bond, the yield to maturity as of such date of United States Treasurysecurities with a
- constant maturity (excluding inflation indexed securities, and as compiled and .published in the
most recent Federal Reserve Statistical Release H.15,(519): that has become publicly available as
of the first Business Day that is at least thirty-five days prior to such scheduled redemption date
or, if such Statistical Release is no longer published, any publicly available source of similar .
market data) most neazly equal to the period from sueh date to the stated maturity date of such
2010B Bond. .
The Extraordinary Optional Redemption Price shall be determined by an independent
. accouriting firm, investment banking firm or financial advisor retained by the Ciry at the City's
; expense. Absent manifest error, such determination shall be conclusive and binding on the City,
the Bond Registrar and the Registered Owners, and neitlzer the City nor the Bond Registrar sha11
be liable for relying on such deternunation.
(d) Term Bonds.
. (i) Mandatory Redemption of [2010A] Term Bonds. The 2010A . .
Bonds maturing in and are Term 'Bonds and, if not redeemed under the
optional redemption provisions set forth above or purchased in the open market under the provisions set forth below, shall be calTed for redemption raridomly (in
such manner as the Bond Registrar shall detemune).at par plus accrued interest on
. December. l in years and amounts as follows:
s109s9M.3 -10- -
Draft Dated 11/10/10
. 2010A Term Bonds
Maadatory Msodatory
' . Mandatory Redemption Maadatory ' . . Redemptioa
Redemptioa Years Amounts Redemption Years - Amounts
r ~
*maturity *maturity
(ii) Mandatory Redemption of [2010B] Term Bonds. The 2010B "
Bonds maturing in _ and aze Term Bonds and, if not redeemed under the
-
optional redemption piovisions sef -forth above or purchased in the open market
under the provisions set forth below, shall be called for redemption pro rata at a
price equal to the principal amount to be redeemed, without- premium; plus
accrued interest to the date fixed for redemption, on December 1 in years and
amounts as follows: .
2010B Term Bonds
Mandatory , Mandatory.
Mandatory ' Redemption Msndatory Redemptioa
Redemptioa Years Amounts Redemption Yesrs Amounts
•maturity *maturity
(iii) Credit for Optional and Mandatory Redemption Amounts. If the
City redeems under Section 6(a) or (b), purc_hases in the open market or defeases -
Term Bonds; the -par, amount of the Term Bonds, so redeemed, purchased or
defeased (irrespective of their actual redemption or purchase. prices), sha11 be
credited against one or more scheduled mandatory redemption amounts for,those
Term Bonds. The City shall determine the manner in which the credit is to be
allocated and shall notify the Bond Registrar in writing of its allocation at least 60
days prior to the earliest mandatory redemption date for that maturity of Term
Bonds for which notice of redemption has not already been given.
(e) Partial Redemption of Bonds. Portions of the principal arriount of any Bond, in
installments of $5,000 or any integral multiple, thereof, may be redeemed. If less than all of the
principal amount of any Bond is redeemed, upon surrender of such Bond to the Bond Registraz,
tliere shall be issued to ttie registered owner, without charge therefor, a new Bond (oi Bonds, at
the option of the registered owner) of like series, maturity and interest rate in any of the -
denominations authorized by this ordinance in the aggregate total' amount remaining
unredeemed.
-11-
51o9s9z6.3
- i . . , , ...i ' . i i i , -
. Draft Dated ll/10/10
( fl Open Market Purclzase. The City further reserves the right and option to purchase
any or all of the Bonds in the open market at any time at any price acceptable to the City plus
accrued interest to the date of purchase.
(e) Selection of ZOlOB Bonds for Redemption. If fewer ttian all of the outstanding .
. 201 OB Bonds are to be redeemed prior to maturity, then (a) if the 201 OB Bonds aze in book-entry
, form at the time of such redemption, the Bond Registrar shall instruct DTC to instruct the DTC
Participants to select the specific 201OB Bonds for- redemption prq rata; and.neither the City nor
the Bond- Registrar shall have any, responsibility to ensure that DTC or the DTC Participants
properly select such 2010B Bonds for redemption, and (b) if the 2010B Bonds are not then in
book-entry form at the_ time of such redemption,= on eacfi date fixed for redemption, the Bond
Registrar shall select the specific 2010B Bonds for -redemption pr. o rata. The portion of any
2010B Bonds of a denomination more than $5,000 to be redeemed shall be in the principal
amount of $5,000 or any infegral multiple thereof. The Bond Registrar shall select such portions
of 2010B Bonds to be redeemed in such manner.as the Bond Registrar in its discretion may deem
to be fair and appropriate. Notwithstanding the foregoing, for as long as the 2010B Bonds are
registered in the name of DTC or its nominee, selection of 2010B Bonds for redemption shall be
in accordance with the- Letter of Representations. -
( fl Cancellation of Bonds: All Bonds purchased or redeemed under this section shall
be canceled. .
Section 7. Notice of `demation. While the Bonds aze held by DTC in book-entry
only form, any notice of :redemp6on shall be given- at the time, to the entity and in the 'manner
required by,;DTC in accordance 'with the. Letter of Representations, and the Bond Registrar shall
not be required to give any other notice of redemption. If:tlie Bonds cease to be in book-entry
' only form, the City sliall cause notice of any intended redempfion of Bonds to be given by the
" Bond Registrar not less.than_20 nor more than 60 days priqr to the date fixed for redemption by
first-class mail, postage prepaid, to the; registered owner of any Bond to.be redeemed at the
address appearing on the Bond Registec at the time the Bond Registrar prepares the notice, and
, the requirements of this sentence shall be deemed to have been fulfilled when notice has been
mailed as so provided, whether or not it is actually received by-the owner of any Bond.
In the case of an optional redemprion, the notice, may state that the City retains the right
to rescind.the redemption notice and the related optional redemption of Bonds by giving a notice
of rescission to the affected registered owners at any time prior to the scheduled optional _
redemption date. Any notice of optional redemption that is so rescinded shall be of no effect,
and the Bonds. for which the, ~notice , of optional redemption has been rescinded shall remain
out5tanding.
. Interest on Bonds called foi 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. Iri addition; the redemption notice shall be mailed within the same period, postage prepaid,
to the 1VISRB, to any nadonally recognized rating agency which at the time maintains a rating on
` the Bonds at the request of the City, and to such other, persons and , with such additional
; information'as the City Finance, Director shall determine, but these additional mailings shall not
be a condition precedent to the redemption of Bonds.
510959%.3 -12-
Draft Dated I1/1 D/10.
Sectaon 8. Failure to Redeem Bonds. If any Bond is not redeemed when properly
presented at its maturity date, the City shall be obligated to pay interest on that Bond at the same
rate provided in the Bond from and after its maturity date until that Bond, both principal and
interest, is paid in full or until sufficient money for its paytnent in full is on deposit in the Bond
Fund and the Bond has been called for :payment by giving notice of that call to the registered
owner of each of those unpaid Bonds.
Section 9. _The Bond Fund; Pavments into Bond Fnnd.
(a), Payments Into the Bond Fund. The Bond Fund has previously been created in the
office of the Finance Director and is divided into two accounts; the Principal and Interest
Account and the Reserve Account. So iong as any Bonds are_outstanding, the City shall set aside
and pay into the. Bond Fund all ULIDAssessments on their collection and, out' of the Net
Revenue of the System, certain fixed amounts without regard to ariy fixed pmportion, namely:
(1) Into the Principal and Interest Account on or before each interest
.and principal and interest payment date, an amount, together with.
other money on deposit therein, sufficient to pay the next, ensuing
interest or principal and interest payments on the Bonds; and
(2) Into the Reserve Account an amount necessary to provide for the
Reserve Requirement as required under the Parity Conditions.
If the City fails to set aside and pay into the Bond Fund the amounts set forth above, the
owner of any of the outstariding Parity Bonds may bring action against the City and compel such
setting aside and payment..When the total.amount in the Bond Fund equals the total amount of
principal and interest due with respect to all outstanding Parity Bonds to the last maturity thereof,
no further payment need be made into_ the Bond Fund. (b) Application and.lnvestment of Funds. The City may create sinking_fund accounts or other accounts or subaccounts in the Bond Fund for the payment or securing the payment of Parity Bonds as long as the maintenance of such accounts does not conflict with the rights of the
owners of the outstanding Parity Bonds. The City may pmvide for the purchase, redemption or
defeasance of Parity Bonds by the use of money on deposit in any account in the Bond Fund as
long as the money remaining in those accounts is sufficient to satisfy the required deposits in `
those accounts for the remaining Parity Bonds. All money in the Bond Fund may be kept in cash or invested in legal investments
maturing not later than the date when the funds aze required for the payment of principal of or
interest on the outstanding Parity Bonds (for investments in the Principal and Interest Account)
or having a guaranteed redemption price prior to maturity and, in no event, maturing later than
. the last maturity of any remaining outstanding Parity Bonds (for investments in the _Reserve
Account). Earnings from investments in the Principal and Interest Account sha11 be deposited in -
that account. Earnings from investments in the Reserve Account shall be deposited in that
account.
(c) The Reserve Account. The Reserve Account may be divided into subaccounts for
each issue of Parity Bonds outstanding. Except for withdrawals as authorized below, the amount
31095926:3 -13-
- ~ . _ ' i . . . i , . , ' i . . . . . ~ . . . . • . . . . . . . . . . .
Draft Dated 11/1 D/10
on 'deposit in the Reserve Account (including ` any, subaccounts) shall meet . the Reserve
. Requirement at all times. so long as any of the Parity. Bonds are outstanding: The amount
required to be.deposited in the Reserve Account (or.any sutiaccount) shall be decreased when .
and to the extent the City has provided for the -Reserve Requirement by means of Alternate .
. Secwity. .
If there is a deficiency in the Principal and Interest Account to meet maturing
installments of either principal:or interest, as the case may be, that deficiency shall be made up
ratably from the Reserve Account and its sutiaccounts' based on the amount of the total -Reserve
Requirement to be paid into each. subaccount (except when Alternative Security requires all cash
and investments in 'the Reserve Account 'be withdrayvn before draws on the Alternate Security)
by the withdrawal of cash for tHat'purpose. Any deficiency created ia the Reserve Account (and
its subaccounts) by reason of any, such withdrawal shall then,be made up from.ULID Assessment
payments and the Net Revenue of -the System first available after making necessary provisions
for the required payments into the Principal -and Interest Account.
Except for withdrawals described above, the money in the Reserve Account and its -
subaccounts otherwise shall be held intact and may be applied against the last outstanding bonds
payable out of the Bond Fund. However, if at any time the Reserve Account or any sutiaccount
is fully funded, money in excess of the Reserve Requirement shall be,withdrawn and deposited,
first, in any other subaccount having a.deficiency in its Reserve Requirement; and second,'at:the :
option. of the Finance Director, either in the Principal and` Interest Account and spent for the :
purpose of retiring Parity Bonds or in any of the System Funds and spent for other lawful System
purposes. .
~ Sectian 10.: Rate.5tabelization Fund. The, Utility' System Rate ,Stabilization Fund has
been previously establislied by Ordmance No. 4945, :T1ie .City may at any time, as determined by
the City and' as consistent with Section 13., of this ordinance, deposit in the Rate Statiilization
, Fund' Gross Reyenue and any. other -money received by the System and available to be so
ncipal proceeds of any Future.Parity Bonds or other borrowing.: No
deposited, excluding pri
deposit of Gross Revenue shall _be made into, the Rate Stabilization Fund to the extent that such
deposit 'would prevent the City from meetirig the Coverage Requirement in the relevant fiscal
Year- ,
The City may; upon authorization by ordinance, at any :time withdraw money from the
Rate Stabilization Fund for inclusion in the Net Revenue for the then-current fiscal year of the
' System, except that the total -amount withdrawn from the Rate Stabilization Fund in any fiscal year of the System may not, exceed the total debt service of the System in-.that yeaz. Such
, deposits or withdrawals may be.niade up to and including the date 90 days after the end of the
fiscal yeaz -for which the deposit or witlidrawal will be included as Net Revenue for that fiscal
, year. .
Earnings from investmeats in the Rate Stabilization-Fund shall be deposited in that fund
and shall not be- included as Net Revenue of the System unless and unfil withdrawn from that
fund as provided fierein. The City may also deposit earnings from investments in the Rate
~ Stabilization Fund into any Systerri fund as authorized by ordiriance, and such deposits shall be
included as Net Revenue in the yeaz -of deposit.
. .
. s~M926:3 -14-
Draft Dafed 11/10/I0
Section 11. Pledge of Revenue and Lien Position. The Nei Revenue of the System and
ULID Assessments are pledged to the payment of the Parity Bonds,_ and the this pledge with
'respect to the Parity Bonds shall constitute a lien and charge upon such Net Revenue and ULID
Assessments prior and superior to any other charges whatsoever.
Section 12. Denosit _of Bond Proceeds. One or more special accounts within the
System Funds,.designated as the Construction Accounts, have previously been established in the
office of_ the Finance Director. .The principal proceeds and premium, :if. any, received from .the
sale and delivery of the Bonds remaining after satisfaction of the Reserve Requirement shall be
paid into the Construction Accounts and used to pay the costs of the Improvements and. the cost
of issuing of ttie Bonds. Until needed to pay such costs, the City may invest principal proceeds '
temporarily in any legal investment, and the investment earnings may be retained in the
Construction Accounts and be spent for the purposes of those accounts.
Section 13. Covenants. The City covenants and agrees with the ovmer of each Bond at
any time outstanding, as follows:
(a) ULID Assessments. All ULID Assessments shall be paid into the Bond Fund and
may be used to build up the required reserves in the Reserve Account and to pay the principal of
and interest on the .Parity Bonds, -without those ULID Assessments' being particularly, aliocated
' to the payment of the principal of and interest on any particulaz issue of bonds.
(b) Maintenance and Operation. Tlie,City will at all times maintain, preserve and
keep the properties of the System in good repair, working order and condition, will make all
necessary and proper addidons, betterments, renewals and repairs thereto, and improvements,
replacements and, extensions thereof, and will at a1T times operate or cause to be operated the
properties of the System and the business in connection therewith in an efficient manner and at a
reasonable cost.
(c) Establishment and Collection of Rates and Charges. . The City will establish,
maintain and collect rates and charges for all services, and facilities provided by the System
which will be fair and nondiscriminatory. To the extent allowable by law, those to which service .
of the System is available will be charged for that service at the prevailing rate within 30 days of
the availability of that service. Furthermore, the City will adjust those rates and charges from
time to time so that: .
(i) The Gross Revenue of the System wiil at all times be, sufficient to
(A) pay all Maintenance and Operation Expense on a current basis, (B) pay when .
- due all amounts that the City is obligated to pay into 'the Bond Fund and the accounts. therein, (C) pay all taxes, 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 Revenue _of the System by law or
contract; and
(ii) The Net Revenue of the System and ULID Assessments in each
calendaz year will be at least equal to the Coverage Requirement.
$1095926.3 -1 S -
- . , ' . I . . . .1 . _ . . . .i . i Draft Dated 11/10/I D
(d) Shce.or. Disposition of the System. The Gity will not sell or otherwise dispose of
the System in its entirety unless, simultaneously with such sale or other disposition, all Parity
Bonds are redeemed , and retired, or. defeased pursuant to the. provisions of this ordinance.
Furthermore, it will:not sell, lease, inortgage or in any manner encumber or othervvise dispose of
. any, part of the System, includirig: all. additions and improvements thereto and extensions thereof
at any time made, that is used, useful or material in -.the operation of the System (each, as used in
_ this subparagraph; a"transfer"), unless provision is. made for the replacement tliereof or for
payment into the Bond Fund of the greatest of the following:
(i) - Ari arnount which will :be in the same proportion to the net amount
of Parity Bonds then outstanding (defined as the total amount'of those-bonds less
the amount of cash and investments in the-Bond Fund and accounts therein) that
the Gross Revenue- of the System from the portion of the System sold or disposed of for the preceding year bears to the total, Gross Revenue of the System for that
period; or -
- (ii) An amount wluch will be in the same proportion to the net amount
of Parity Bonds then outstanding (as defined above) that the Net Revenue from
the portiori of the System sold or disposed of for the preceding yeaz bears to the -
total Net Revenue of the System for such period; or
(iii) An amount which. will be in the: sacrie proportion to the net amount,
of Parity Bonds then outstanding (as defined above) that the cost of the assets sold .
or disposed of (less depreciation) bears to the, cost of the assets of the entire
System (less depreciation)'.immediately prior to such sale or disposition; or -
(iv) An arriount which will be in the same proportion to the.net amount
of Parity Bonds then outstanding (as defined above) that the number of customers
served by the portion of the System sold or disposed bears to the number of
customers.served by the entire System prior to such sale.or disposition.
Before any such transfer under this subsection,(d) with respect,to greater than 5% of the` .
. total assets of the System (measured by cost of the assets less depreciation), the City must obtain
a certificate of an Independent :Utility: Consultant to the .effect that in his or her pmfessional
.
opinion, upon such transfer of assets; the remaining System will retain its operational integrity
. and the Net Revenue ofthe System-will `be at least equal to the Coverage: Requirement duririg the
5 fiscal years following the fiscal year in which. the transfer is to occur, taking into account (1)
. the reductioa in revenue resulting from the transfer, (2)-the use of any.proceeds of the transfer for
the redemption of Parity Bonds, and (3) the Independent.Utility Consultant's estimate of,revenue
from customers anticipated to be served by any additions to and betterments and extensions of
the System financed in part by the proposed portiori of the proceeds`of the transfer.
Notwithstanding any other provisiori of this sutisection (d), (1) the City in its discretion
may sell or otherwise dispose of any of the works; plant; properties or 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, materiaT to or usefuI to .the operation of the System, without making any
' ~ V ~ .
51095926.3
- ' • . ,u . . . . , . I . .I. , - '
Draft Dated 11/10/10,
deposit into the Bond Fund,. (2) the City may transfer the System to. another municipal
corporation so.long as ULID Assessments and. Net Revenue with respect to the portion of ttie
Systern so transferred are used for payment of debt, service on Pazity Bonds prior to any other
purpose, or (3) the City in`its discretion may cazry out such a transfer ifthe aggregate cost of the _
. facilities, property or other assets (less depreciation) being transferred -under. this subparagraph
comprises no more than 5%0 of the costs of all of the assets of the System (lessdepreciation).
(e) Liens Upon the System. The City will not at any time create.or pennit to accrue or
to exist any lien or other encumbrance or indebtedness upon the Gross Revenue of the System, or
any part thereof, prior or superior to the lien thereon for the.payment of Parity Bonds, and will
pay arid- discharge, or cause to be paid and discliarged, any and all lawful claims for labor,
materials or supplies which, if unpaid, might become a lien or charge upon the Gross Revenue of
the System, or' any part thereof, prior to or superior. to the lien of the Parity Bonds; or wluch might impair -the security of the Parity Bonds.
( fl Books and Accounts. The City will keep proper books, records and accounts with
respect to the operations, income and expenditures of the - System in accordance with proper
accounting procedures and any applicable niles. and regulations prescribed by the State of
Washington. It will prepare annual- financial and operating statements within 270 days of the
close of each fiscal year showing in reasonable detail the financial condition of the System as of
the close of the previous yeaz, and the income and expenses for such year, including the amounts
paid into the- Bond Fund and into any and all special funds or accounts created pursuant to the
provisions of this ordinance,,the status of all funds and accounts as of the end of such yeaz, and
the amounts expended for maintenance, renewals; replacements and capital additions to the
System. Such-statements shall be sent -to the owner of any Parity Bonds upon written request
therefor being made to the City. -
(g) No Free Service. Except to aid the poor or infirm, to provide for resource
conservation or ta provide for the proper handling of hazardous materials; it will not furnish or
supply or permit the furnishing or supplying of any service or facility in connection with the
operation of the System free of charge to any person, firm or corporation, public or private, other
than the City, so long as any Parity Bonds are outstanding. .
(h) Collection of Delinquent Accounts. On at least an annual basis,.it will determine all accounts that aze delinquent and will take all necessary action to enforce payment of such
accounts against those property owners whose accounts are delinquent.
~ (i) Fire and Extended Coverage Insurance. It will carry the types of insurance on its
System properties in the amounts normally carried by private water, sewer and storm drainage
utility companies engaged in the operation of water, sewer arid storm drainage systems, and the
cost of such insurance shall be considered a part' of . Maintenance and operation Expense, or it
, will implement and maintain a self-insurance program or an insurance pool program with
reseryes adequate, in the reasonable judgment of the City, to protect the owners of the Parity
Bonds against loss.
(j) Condemnation Awards. Any condemnation awards received by the City in excess
of 1% of cost of the assets of the System (less depreciation) shall be applied to one or more of the
51095926d -17-
.
Draft Dated 11/10/10
following: (1) to the damaged property, (2) to retiring bonds,. and ,(3) to improvements of the
Sy,stem.
Section 14. Flow of Funds.
(a) The Gross Revenue of the System. shall be :deposited in the System Funds and
used for the following purposes only in the following order of priority: _
(i) To pay Maintenance and Operation Expense;
(ii) To pay; together with ULID Assessments, first, the interest on and,
second, the principal of the Parity Bonds when due or as the principal is required
to be paid and to make all payments required to be made into any mandatory
redemption or sinking fund account created to provide for the payment of tlie
principal of Term Bonds;
(iii) To make, together with ULID Assessm.ents, all payments required
to be made into the Reserve Account or its subaccounts and to make all payments
required to be made pursuant to a reimbursement agreement in connection with an
Alternate Security, except that if thereis not suffcient money to make all payments under reimbursement agreements, the payments will be made on a pra -
rata basis; .
(iy) , To make'all payments required to be made into any revenue bond,
note, warrant or other revenue obligation redemption fund', debt service account
or reserve account created to pay or secure the payment of.the principal of and
interest on any. revenue bonds, notes, warraiits or ottier obligations of the City
having a lien.upon the revenue of the System subordinate to 1he lien thereon for
the payment of the princ,ipal of and interest on any Paazity Bonds;
(v) To make necessary additions, betterments and improvements and
repairs to or extensions and replacements of the System, to retire by redemption
or purchase in the open maazket any outstanding revenue obligations or other
obligations of the System, to make deposits into the Rate Stabilization.Fund, or to
provide for any ottier lawful City purpose.
(b) To meet the required payments to be made into' the Bond Fund, the City may:
transfer any money from any fund. s or accounts of the System legally available therefor, except bond redemption funds, refunding escrow funds, defeasance or, other trust funds.
Section 15. I'rovisions for Future Paritv Bonds. The City reserves the right to issue
Future Parity Bonds if the Parity Coaditions are met and complied with at the time of the
issuance of those Future Parity Bonds. Notwithstanding the foiegoing, nothing in this ordinance
shall prevent the City -from issuing Future Parity Bonds to- iefund maturing Parity Bonds then
outstanding, money for the payment of which is not otherwise available. Furthermore, nothing
contained in this ordinance shall prevent the City from issuing revenue bonds or other
obligations that are a charge upon the Gross Revenue of the System subordinate to the payments,
required to be made into the Bond Fund for the payment of any Parity Bonds, or from pledging
. 51095926.3 , -1O-
, . -
Draft Dated II/10/1 D - the payment of ULID assessments into a bond redemption fund created for. the payment of the
. principal of and interest on those subordinate bonds or obligations if such ULID assessments are
levied for improvements constructed from the pmceeds of those subordinate bonds.
Section 16. Seuarate Utilitv Svstems. The City may create, acquire, construct, finance,
own and operate one or more additional systems for water supply, sewer service, water, sewage
or stormwa.ter transmission, treatrnent or other commodity or service. The revenue 'of that
separate utility system shall not be included in the Gross Revenue of the System and may be
pledged to . the payment of revenue obligations issued to purchase, construct, condemn or
otherwise acquire or expand the sepazate utility system. Neither the Gioss Revenue nor the Net
Revenue of the, System shall be pledged by the, City to the payment of any obligations of a
separate utility system except (1) as a Contract Resource Obligation upon compliance with
Section 16 hereof and/or (2), with respect to the Net Revenue, on a basis subordinate to the lien
of the Parity Bonds on that Net Revenue.
Section 17. Contract Resource Obligations. (a) The G'ity may at any time enter into .
one or more contracts , or other obligations for the acquisition (from facilities yet to be .
constructed) of water supply, sewer service, water sewer or stormwater transmission,.treatment
or other commodity or service relating to the System. The City may determine that such contract
or other obligation is a Contract Resource Obligation, and may provide that all payments under
that Contract Resource Obligation (including payments prior to the dme that water supply,
transmission, treatment or other commodity or service is being provided; or during a suspension
or after termination of supply or service) shall be Maintenance ;and, Operation Expense if `the -
,following requirements are met at the time such Contract Resource Obligation is entered into:
(i) No Event of Default as defined in Section 27 of this ordinance has
occurred and is continuing. (ii) There is on file a certificate of an Independent Utility Consultant
stating that (A) the payments to be made by the City in connection with the
Contract Resource Obligation are reasonable for the supply, transmission,
treatment or other. , service rendered; (B) the source of any new supply, and any
facilities to be constructed to provide the supply, transmission, treatment or other
service, aze sound from a water, sewerage, or other commodity supply or .
transmission planning standpoint, are technically and economically feasible in
accordance with, prudent utility practice, and aze likely to provide supply or
transmission or other service no later than a date set forth in the Independent .
utility Consultant's certification; and (C) the Net Revenue (futther adjusted by the
Independent utility Consultant's estimate of the payments . to be madein
accordance with, the Contract Resource Obligation) for the five fiscal years
following the year in which the Contract Resource Obligation is incurred, as such
Net Revenue is estimated by the Independent Utility Consultant' (with .such
estimate based on such-factors as he or she considers reasonable), will be atleast
equal to the Coverage Requirement.
(b) Payments required to be made under Contract Resource Obligations shall not be subject.to acceleration.
51095926.3 -19-
. _ . . . i i i
Draj1 Dated Il/10/IO
(c) Nothing in this Section 16 shall be deemed to prevent ttie City from entering into '
other agreements for the acquisidon of water supply, sewer service; water, sewage or stormwater
transmission, treatment. or other commodity or seryice from existing facilities and from treating
those payments as -.Maintenance' and Operation Expense. Nothing in this Section 16 shall be
deemed to prevent' the City from . entering into', other agreements for the acquisition of water
supply, transmission, treatment or other commodity or-service from facilities'to be constructed '
: and from agreeing to rriake payments with respect thereto, such payments constituting a lien and _
charge on Net Revenue subordinate to that~of the Outstanding Parity Bonds, the Bonds and any
Future Parity Bonds.
Section 18. For¢n aiid Execution of Boads. The Bonds shall be prepared in a form consistent with the provisions of this ordinance and state law and shall be signed by the Mayor
and City Clerk, either or both of whose signatures may.be mariual or infacsimile; and the seal of
- the City or a facsimile reproduction thereof shall be impressed or printed thereon. _
Only Bonds bearing a Certificate of Authentication in -the, following form; manually
signed by the Bond Registrar,. shall be valid or :obligatory for aay purpose or entitled to the
benefits of this ordinance: "This Bon& is one of the fully registered ;City of Auburn, Washington, .
Utility System Revenue Bonds, [2010A/2010B (Taxable Build America Bonds - Direct . Payment)], describedin the Bond Ordinance." The authorized signing of a Certificate of
Authentication shall be conclusive evidence that the Bond so authenticated has lieen duly
. executed, authenticated and_delivered and is entided to the benefits of this ordinance. ,
If any officer whose facsimile signature appears on the Bonds ceases to be an officer of
the City authorized.to sign bonds before the Bonds bearing his or her facsimile signature aze
,
authenticated-or delivered by the Bond Registrar or is§ued by the .City, those Bonds nevertheless
: may be authenticated; issued:and delivered,and, wfien autlienticated, issued and delivered, shall
be as binding on . the Ciry as though that person had continued to be an o_fficer of the Gity
authorized to sign bonds. ` Any Bond also may be signed on behalf of the City by any person
who, on the actual date of signing of the Bond,"i5 an_officer of the City authorized to sign bonds,
- althougli he or she. did not hold the required offce on,the date of issuance of the Bonds.
Section 19. Bond Retistrar. The Bond Registrar sliall keep, or cause to be kept,
. .
sufficient books for the registration and transfer of the Bonds,which sha11 be open to inspection
~ by the City at all times. The Bond Registrar 'is authorized, :on behalf of the City, to authenticate
and deliver Bonds transferred or exchariged in accordance with the provisions of the Bonds and
this ordinance, to ~serve as the City's paying agent for the Bonds and to carry out a1T of the Bond
Registrar's powers and duties under this ordinance and 'City Ordinance Na 3905 establishing a
. s.ystem of registration for the City's bonds and obligations.
The Bond Registrar shall be responsible for..its representations contained in the Bond
Registrar's Certificate of Autlientication on the Bonds: The Bond Registraz may becoirie the
. owner of Bonds "with the same: rights it would have if it were not the Bond Registrar and, to the
' extent permitted by law, may act as depository for and pemut any of its officers oi directors to
act as members of, or in any other, capacity with respect to, any committee formed to protect the rights of Bond owners. : ,
. S1095926.3 . ' -20-
. . . _ . . . _ _ i! . . . I _ . . . i . I.. .
' Draft Dated 11/10/10
Section 20. Preservation of Tax Exemntion for Interest on 2010A Bonds. The City
covenants tliat it -will take all actions' necessary to prevent interest on the 2010A Bonds from
being included in gross income, for federal: income tax purposes, ,and it will neither take any
action;nor make or permit any use of proceeds of the 2010A Bonds or other funds of the City
treated as proceeds of the 2010A Bonds at any fime during the terin of the 201-OA Bonds which
will cause interest on the 2010A Bonds to be included in gross income for federal income tax purposes. The City certifies that it has not been notified of any listing or pmposed listing by the
Intemal Revenue Service to the effect that it is a bond issuer whose arbitrage' certifications may
not be relied upon.
Section 21. Designation of 2010A Bonds as 'Oualified 1'ax-Ezemnt Ob1iQations."
The City has determined ~and certifies'that (a) the 2010A Bonds are not "private activity bonds"
within the meariing of Section .141 of the Code; (b) the reasonably anticipated amourit of tax-
I exempt obligations (other than-private activity bonds and other obligations not required to be
included in such calculation) which the City and any .entity. .subordinate to the City (including
any entity that the City controls, that derives its authority to issue tax-exempt obligations :from
the City, or that issues tax-exempt obligations on behalf of the City) will issue during the ,
. calendar year in which the Bonds are issued will not exceed $30,000,000; and (c) the amount of
'tax-exempt, obligations, including the 2010A Bonds, designated by. the City as "qualified tax-
- exempt obligations" for the purposes of Section 265(b)(3) of the Code during the calendar year
in which the 2010A Bonds aze issued does not exceed $30,000;000: T'he.City designates the
. 201 OA Bonds as "qualified tax-exempt obligations" for the purposes of Section 265(li)(3) of the
Code.
Section 22. Election to Treat 2010B as ."Build America Bonds". The City hereby
irrevocably eIects to have Section 54AA of :the Code apply to the 2010B Bonds so. that the-
2010B Bonds are treated; as "build America bonds," and further to have Subsection 54AA(g) of
the Code apply to the 2010B Bonds so that the 2010B Bonds are treated as "qualified bonds"
with respect to which the City will be allowed a credit payable by the United'States Treasury to
or to the order of the City pursuant to Section 6431 of the Code in an amount equal to 35% of the , interest payable on the 20I0B Bonds on each interest payment dafe. The City hereby auttiorizes
and .directs the Finance Director (or her designee) to take such actions and enter into such
agreements as are necessary or appmpriate for the City to receive or cause to, be received from
the United States Treasury the applicable federal credit payments in respect of the 2010B Bonds,
including, but not limited to, the timely filing with the Internal:Revenue Service of Form 8038-
CP-"Retum for Credit Payments to Issuers of Qualified Bonds" in the manner prescribed by
Internal Revenue Service Notice 2009-26. The City covenants that it will comply with the
provisions of the. Code, compliance with which would result in the interest on the 2010B Bonds
. being excluded from gross income for federal tax purposes but for the City's irrevocable eTection
to have Section 54AA ofthe Code apply to the 2010B Bonds.
Section 23. Refund'ang or Defeasance of the Bonds. The City may issue refunding
tionds pursuant to the` laws of the State of Washington or use money available from any other .
lawful source to pay when due the principal of and interest on the Bonds, or any portion thereof
included in a refunding or defeasance plan, and to redeem and retire, refund or defease all such
then-outstanding Bonds (hereinafter collectively called the "defeased Bonds") and to pay the
510959263 -21 -
.
, . . , ~ ,
Draft Dated 11/10/I0
costs of the refunding or defeasance. If money and/or Government Obligaxions maturing at a
~ time. or times and. bearing interest in amounts (together with money, if necessary) sufficient to
redeem and retire, refund or defease. the defeased Bonds. in accordance with their terms are set
aside in. a special.tivst-fund or escrow account irrevocably pledged'to that. redemption; retirement
- or defeasance, of defeased Bonds. (hereinafter. called the "trust account"), then all right and
- interest of the owners of the defeased Bonds.in the covenants_of this ordinance and in the 'funds
and accounts obligated to the payment of the defeased Bonds shall cease and become void. The
. owners of defeased Bonds sha11 have the right to receive payment of the principal of and interest
- on the defeased Bonds from- the trust account. The City shall include in the refunding or
; defeasance plan such provisions as the City deems necessary for. the random selection of any ,
; defeased Bonds -that constitute less than all of a particular maturity, of the Bonds; for notice of the
defeasance to be given to tlie owners of the defeased Bonds and to such other persons as the City
shall determine, and for any required replacement of Bond certificates for defeased Bonds. The
defeased Bonds shall be deemed no longer outstanding, and the City may apply any money in,
- any other fund or account established for the payment or redemption of the defeased Bonds to
any lawful purposes as it'shall deterrniine, subject only to the rights of the registered owneis of
any other Parity Bonds then outstanding.
If the refunding plan provides that the defeased Bonds or the refunding bonds to be
issued be secured by cash and/or. Govemment Obligations pending the prior redemption of those .
Bonds. ~being refunded and `if such refunding plan; also provides that certain cash and/or
Government Obligations are irrevocably'pledged for the prior redemption of the defeased Bonds, .
. then only the debt service on the Bonds which are not defeased Bonds and the refunding bonds,
the payment of which is: not so secured -by the refunding plan; shall be included in the -
computation of the Coverage Requirement for. the issuance of Future Parity Bonds and the
annual computation of coverage for determining compliance with the rate covenants.
If the Bonds are registered in the name of DTC or its nominee, notice of any defeasance
of Bonds shall, be given to DTC in the manner prescribed iri the Letter of Representations for
notices of redemption of Bonds.
Section 24. Aonroval _of _ Bond Purchase Coritract. Seattle-Northwest Securities
- Corporation of -Seattle, Washington, * has presented a purchase contract (the "Bond Purchase
' Contract")..to the City offering to purchase the Bonds under the: terms and conditioris provided in
. the Bond Purchase Contract, which writfen Bond Purcliase Contract is ori file with the City Clerk
and is incorporated herein by :this reference. The City Council finds that entering into the Bond
Purcliase Contract is in the City.'s-best interest and therefore accepts the offer contained therein
''and authorizes its execution by City officials. The Bonds will be printed at City expense and will
be delivered, to the purchaser in accordarice with ttie Bond Purchase Contract; with the approving
legal opinion of Foster Pepper PLLC, municipal bond ;counsel of 3eattle, Washington, regazding
the Bonds: The proper City officials are authorized and directed to do everything necessary for
the prompt delivery of the Bonds to the purchaser and for the proper application and use of the,.
` proceeds of the sale thereof.
51095926.3 ' -22-
Draft Dated I1/10/I0
.
- Section 25: Preliminarv Official Statement Deemed FinaL The City Council has been
provided with copies of a preliminary official statement dated November 2010 (the
.
"Preliminary Official Statement"), prepared in connection with the sale of the Bonds. For the
sole purpose of.the Bond purchaser's compliance with SEC Rule 1Sc2-12(li)(1), the City "deems
final" that Preliminary Official Statement as of its date, except for the omission of information as
:to offering prices, interest rates, selling compensation, aggregate principal amount, principal
amount, per maturity, maturity dates, options of redemption, delivery dates, ratings and other
terms ofthe Bonds dependent on such matters.
Section 26. Undertaking to Provide ConNnuing Disclosure.To meet the requirements .
of SEC Rule 4562-12(b)(5) (the "Rule"), as applicable to a participating underwriter for the
Bonds, the City makes.the following written undertaking (the "Undertaking") for tlie benefit of
holders of the Bonds:
(a) Undertaking to Provide Annuad Financial Information and Notice of Mdterial
- Events. The Gity undertakes to provide or cause to, be provided, either directly or tlirough a
designated agent, to the MSRB, in electrotic format as prescribed by the MSRB, accompanied. '
by identifying information as prescribed by the MSRB:
(i) Annual financial information and operating data of the type -
included in the final. official sta.tement for the Bonds and described in subsection
(b) of ttiis section ("annual financial information");
. ,
(ii) Timely notice (not in , excess of ten business days after: the
occurrence of the event) of the occurrence of any_ of the following events with
respect to the Bonds: - (1) principal and interest payment delinquencies;
(2) non-payment-related defaults, if material;
(3) unscheduled draws on debt service reserves reflecting financial
difficulties; .
(4) unscheduled draws on credit enhancements reflecting fmancial
difficulties; .
(5) substitution of credit or liquidity providers, or their failure to,
perform;
(6) adverse tax opinions, the issuance by the Internal Revenue Service
of pmposed or final determinations of taxability, Notice of
Proposed Issue (IRS.Form 5701 - TEB) or other material notices
- or determinations with respect to the tax status of the Bonds;
(7) modifications to rights of holders of the Bonds, if material; ~
(8) Bond calls (other than scheduled mandatory redempdons of Term Bonds), if material, and tender offers; (9) defeasances; 510959M.3 -23-
Drafr I)ated 11/10/10
(10) release, substitution, or sale of property securing repayment of the
Bonds, if material; .
(11) rating changes;
(12) Bankruptcy, insolvency, receivership or similar event of the City (a
"Bankruptcy Event"), which is considered to occur when any of
the following occur: (A) the appointment of a receiver, fiscal agent
or similaz oi~'icer for the City in a proceeding under the U.S.
. Bankruptcy Code or (i) in any other proceeding under ' state or,
federal law in which a court or governmental authority has
assumed }urisdiction over substantially all of the assets or business
of the City, or (ii) if such jurisdiction has•been assumed by leaving
the.ezisting goveming body and officials or officers in possession :
but subject to the supervision and orders of a court or
- govemmental authority, or (B) the entry of an order confirming a
plan of reorganization, arrangement or liquidation by a,courtor
govemmental authority having supervision or jurisdiction over
substantially all of the asset5 or business of the obligated person;
(13) The consummation of a merger, consolidation, or acquisition
involving the City or the sale of alT or substantially all of the assets
of the City, other than in the ordinary course of business, the entry
. into a definitive agreement to undertake such an action or the
termina;ion of a definitive agreement relating to any such actions,
, . other thari, pursuant to its terms, if material; and
(14) Appointment of a'successor or additional trustee or the change of
name of a trustee, if materiai.
= (iii) Timely : notice of a failure by the City to provide required annual financial information on or before the date specified in subsection (b) of this
- section.
(b) Type of Annuql Financial Information Undertaken to be Provided. - The annual
financial inforniation that the City undertakes to pTOVide in subsection (a) of this section:
(i) . Shall consist of (1) annual financial statements prepared (except as
noted in the financial' statements) in accordance . with applicable generally
accepted accoundng principles promulgated by - the Govemment Accounting
Standazds Board ("GASB") and made applicable to Washington state local "
govemmental units such as. the City, as such principles may be changed from time
' to -time; which statements 'shall not be audited, except, however, that if and when
audited financial statements are otherwise prepared and available to the City they
will be provided; (2) a statement of authorized, issued and outstanding bonded
. debt secured by Net Revenueof the System and iJLID Assessments; (3) debt
service coverage ratios; and (4) general customer statistics for the System;
51095926:3 -24-
Draft Dated Il/10/I0
(ii) . Shall be provided not later than the last day of the ninth month
after the end of each fiscal yeaz of the City (currently, a fiscal yeaz ending
December 31), as such fiscal year may be changed as required or permitted by
State law, commencing with the City's fiscal year ending December 3 1 ; 2010; and
(iii) May be pmvided in a single or multiple documents, and may be
incorporated by specific reference to documents available to the public on the
Internet website of the MSRB or filed with the SEC.
(c) Amendment of Undertaking. The Undertaking is subject:fo amendment after the
primary offering of the Bonds without the consent of any holder of any Bond, or of any broker,
dealer, municipal securities dealer, participating underwriter, rating agency or the 1VISRB, -under
. the circumstances and in the manner permitted by the Rule: The City will give nodce to the
MSRB of the substance (or provide a copy) of any amendment.to the Undertaking and a brief
statement of the reasons for the amendment. _ If the amendment changes the type of annual
financial information to be provided, the annual financial information containing the amencied
financial information will include a narrative explanation of the effect of that change on the type
of information to be provided.
(d) Beneficiaries. The Undertaking evidenced by this section shall inure to the
benefit of the City and any holder of Bonds, and shall not inure to the benefit of or create any
rights in any other person.
(e) Termination' of Undertaking. The City's obligations under this Undertaking shall
terminate upon the legal defeasance of all of the Bonds. In addition, the City's obligations under
this Undertaking shall terminate if those provisions of the Rule which requiie the City to comply
with this Undertaking become legally inapplicable in respect of the Bonds for any reason, as
confirmed by an opinio.n of nationally recognized bond counsel, or other counsel familiaz with
federal_, securities laws, delivered to the City, and the City :provides timely notice of such
termination to the MSRB. '
(f) Remedy for Failure to Comply with Undertaking. As soon as practi cable after the
City learns of any failure to comply with the Undertaking,. the City will proceed with due :
diligence to cause such noncompliance to be corrected. No failure by the City or other obligated
person to comply with the Undertaking shall constitute a default in respect of the Bonds. The .
sole remedy of any holder of a Bond shall be to take such actions as that holder deems necessary,
including seeking an order of specific performarice from an appropriate court, to compel the City
or other obligated person to comply with the Undertaking.
(g) Designation of Official Responsible to Administer Undertaking: The Finance
Director of.the City (or such other officer of the City who may in the future perforni:tlie duties of
that office) or his or her designee is authorized and directed in his or her. discre6on to take such
further actions as may be necessary, appropriate or convenient to carry out the Undertaking of
the. City in respect of the Bonds set forth in this section and in accordance with the Rule,
including, without limitation, the following actions:
s 1o9sM.3 -25-
Draft Dated 11/10/10
(i) Preparing arid filing the annual financial information undertaken to
_ be provided;
(ii) Determining whether any event specified in subsection (a) has
occurred, assessing its materiality, where necessary, with respect to the Bonds, .
and, if material, preparing and disseminating any required notice of its
- occurrence;
(iii) Deternlining: whether any person other than the City is an
"obligated person" within the meaning ofthe Rule with respect to the Bonds, and
obtaining 'from such person an undertaking,to provide any annual finaucial
information and notice of listed events for that person in accordance with the
Rule;
(iv) Selecting, engaging -and compensating designated agents and
consultants, including but not limited to financial advisors and legal counsel, to
assist and advise the City in carrying out the Undertaking; and
(v) Effecting any necessary amendment of the Undertaking:
, Section 27. Supalemental or Amendatorv -Ordinances. This ordinance shall not be
modified or amended in any respect subsequent to the initial issuance of the Bonds, except as
provided in and in accordance with.and subject to the provisions of this section. For purpases of
this provision, the adoption of an ordinance authorizing the issuance of Future Parity Bonds shall
not be considered a supplemental ordinance.
(a) Certain Supplemental.or Amendatory Ordindnces Permitted Without Bond Owner
Consent. The City, from time.to time, and-at any tiine, without the consent of or notice to the
regisfered owners of the Borids or the Parity Bonds; may pass supplemental or amendatory
ordinances as set forth in this subsection (a). Before the City shall pass any such supplemental
or ainendatory ordiriance pursuant ta this subsection, there shall>liave been delivered to the-City
and ttie Bond Registrar an opinion of Bond Counsel, 5tating that such ordinance is authorized or
permitted' by this ordinance and, upon the execution and delivery thereof, will be valid: and
binding'upon the Ci,ty in accordance with its terms and will not adversely affect the exclusion 'from gross income for federal income tax purposes of interest an any tax-exempt Parity Bonds `
then outstanding. The permitted purposes under this subsection (a) aze: _
(i) To cure any formal defect, omission, inconsistency or ambiguity in
this ordinance in a manner not adverse to the owner of any Parity Bond; _
(ii) To impose upon the Bond Registrar- (with : its consent) for the -
benefit of the : registered . owners of the Bonds.any additional rights, remedies,
powers, authority, security, liabilities or duties which may lawwfiilly be granted,
conferred or imposed and which aze not contrary to or inconsistent with this
ordinance as theretofore in effect; ..(iii) To add to the covenants and agreements of, and limitations and
restrictions upon, the City in this ordinance, other covenants, agreements,
s,0M6.3 -26-
- Draft Dated I1/10/10
limitations and restrictions to be observed by the City which are not contrary or
inconsistent with this ordinance as theretofore in effect; ,
(iv) To confirm, as. further assuTance, any pledge under, and the
subjection to ariy claim, lien or pledge created or to be created by this. ordinance
of any other money, securities or funds; .
(v) To authorize different deno_minations of the Bonds and to make
correlative . amendments and modifications to _ this ordinance regarding
exchangeability of Bonds of different authorized denominations, redemptions of
portions of Bonds of particular authorized denominations and similaz amendments
and modifications of a technical nature; (vi) To modify, aiter, amend or supplement this ordinance in any other
respect which is not materially adverse to the registered owners of Parity Bonds
and which does not involve a change described in subsections (b) or (c) of this
section;
{vii} Because of change in federal iaw or rulings, to maintain the
exclusion from gross income of the interest on the 2010A Bonds from federal
income taxation or the receipt of Tax Credit Subsidy Payments with respect to the
2010B Bonds; and
(viii) To add to the covenants and, agreements of, and limitations and :
restrictions upon, the City in this ordinance, . other covenants, agreements,
limitations and xestrictions to be observed by the City which are requested by the
Bond Insurer:(if any) or provider of an Altemate Security and which changes are
not materially adverse to the registered owners of Parity Bonds.
(b) Supplemental or Amendatory Ordinances Requiring Consent of All Registered
Owners. Unless approved in writing by the registered owners of all Parity. Bonds then
outstanding, nothing contained in this section shall permit, or be construed as. permitting: (I) a
change in the times, amounts or currency of payment of the principal of or interest on any
, outstanding Parity Bond or a reduction in the principal amount or redemption price of any
outstanding Parity Bond or a change in the redemption price of any.outstanding Parity Bond or a
change in the method of determining the rate of interest thereon; (2) a preference of priority of
any Parity Bonds or any, other bond or bonds, or (3) a reduction in the aggregate principal
amount of any Parity. Bond
(c) Supplemental or Amendatory Ordinances Requiring Consent of Registered
Owners of 60% of Parity Bonds Outstanding. .In addition to any ordinance_ pemutted pursuant to
paragraph (a) 'and subject to the terms and conditions contained in subsection (d), and not
otherwise, registered owneis of not less than 60% in aggregate principal amount bf the Parity
Bonds then outstanding shall hav.e the right from time to time to consent xo and approve the
adoption by the City of any supplemental or amendatory ordinance deemed necessary or
desirable by the City for the purpose of modifying, altering, amending, supplementing or=
S109S926.3 -27- -
Draft Dated I1/10/10
rescinding, in any particular, any of the terms or provisions' contained in this ordinance, as
follows:
(i) If at any ~:time the City shall :propose any supplemental or
. amendatory ordinance under this subsection (c), 'the City shall cause the Bond
Register to give notice of the proposed supplemental or amendatory ordinance by
: first-class United States mail to : all registered owners of any then outstanding
Parity Bonds, to the Bond Insurer (if any), and to the Rating Agency.. Such notice
shall briefly set- forth the nature of the proposed supplemental: or amendatory
" ordinance and shall state that a copy thereof is on file at the office of the Bond
Registrar for inspection by all registered owners of the outstanding Parity Bonds.
(ii). At any time within two years after, the date of the mailing of such
notice, the City may pass such supplemental or amendatory ordinance in
substantially. the form described in such notice, but only if there shall have first
been delivered to the Bond Registrar (1) the required consents, in writing, of the
registered owners of the Parity Bonds, and (2) an opinion of Bond Counsel stating
that such ordinance is authorized or permitted by this ordinance. and, upon the
execution and delivery thereof, will be valid and binding upon. the .City in
accordance with its terms and. will not adversely affect _ the exclusion from gross
- income for federal income tax. I purposes of interest on- any tax-exempt Parity
Bonds then outstanding. .
(iii) If registered owners of not less than the, percentage of then
outstanding Parity Bonds required by this subsection (c) shall have consented to
: "and approved the proposed ordinance,.no owner of outstanding Parity Bonds shall
. have any right (1) to object to the passage of such ordinance, (2) to_object to any
of the terms and provisions contained therein or the operarion thereof, (3) in any
manner to question the propriety of te passage thereof, or (4).to enjoin or restrain
the City or the Bond Registrar from adopting the same or taking any action
. pursuant thereto.
Upon the adoption of- ttie supplemental or amendatory ordinance pursuant to the
provisions of this section, this ordinance shall be, and shall be deemed to be, supplemented and ;
amended accordingly. The respective rights, duties and obligations under this ordinance of the
City, the Bond Registrar and - alI `registered owners of ' Parity. Bonds, shall thereafter be - determined, exeicised and enforced under this 'oidinance subject in all respects to such
. supplements and amendments.
;
. Section 28. ; Defaults and Remedies. (a), ' Events of Default: The following shall constitute "Events of Default" with respect
to the Bonds: '
(i) If a default is:made in the payment of the principal of or interest on
~ any of the Bonds when the same shall become due and payable; or
510959Z6.3 -2o-
, i . .i._. . ,
Draft Dated 1l/10/10
(ii) If the City defaults in the observance and performance of any other of the covenants, conditions and agreements on the part of the City set, forth in
this ordinance or any covenants, conditions or agreements on the part of the City contained in any Parity Bond authorizing ordinance and such default or defaults
have continued for a period of six months after they have received from the
Bondowners' Tr'ustee (as defined below) or from the registered owners of not less
than 25% in principal amount of the Paazity Bonds, a written notice specifying and
demanding the cure of such default. However, if the default in the observance :
and performance of any other of the covenants, conditions and agreements is one
which cannot be completely remedied within the six months after written notice
has been given, it shall not be an Event of Default with respect to the Bonds as
long as the City has taken active steps within 90 days after written notice has been
given to remedy the default and is, diligently pursuing such remedy.
(iii) If the City files a.petition in bankruptcy or is placed in receivership
under any state or federal bankruptcy or insolvency law. -
(b) Bondowners' Trustee. So long as such Event of Default has not been remedied, a bondowriers' trustee (the "Bondowners' Tnistee") may be~appointed'by the registered owners of
25% iri principal amount_ of the Parity. Bonds then outstanding; by an instrument or coricurrent
- instnunents in wridng signed and- acknowledged by such registered owners of the Parity Bonds
or by their attorneys-in fact duly authorized and delivered to -such Bondowners' Trustee,
notification thereof being given to tlie City. That appointment _ shall become effective
immediately upon. acceptance thereof by the Bondowners' Trustee. Any Bondowners' Trustee
appointed under the provisions of this Subsection 27(b) shall be a bank or trust company
organized under the laws of the State of Waslungton or the State of New York or a na.tional
banking association. The bank or trust company acting as Boridowners' Trustee may be
removed at any time, and a successor -Bondowners' Trustee may be appointed, by the registered
owners of a majority in principal amount of the Parity Bonds, by an instrument or concurrent
instruments in writing signed and acknowledged by such registered owners of the .Bonds.or by
their attomeys-in-fact duly authorized. The Bondowners' Tnistee may require such security and
indemnity as may be reasonable against the costs, expenses and liabilities that may be incurred in -
the performance of its duties. If any Event of Default 'is, in the sole judgment of the
. Bondowners' Trustee, cured and the Bondowners' Trustee fumishes to the City a certificate so
, stating, that Event of. Default shall be conclusively deemed - to be cured and the City, the
, Bondowners' Trustee and the registered owners of the Parity Bonds shall be restored to the same
'rights' and position-which they would , have held if no Event of Default had occurred. The
Bondowners' Trustee appointed in the manner herein provided, and each successor thereto, is
declazed to be a tivstee for the registered owners of ali-the Parity Bonds and is empowered to
exercise -all the rights and powers herein conferred on the Bondowners' Trustee.
.
(c) Suits at Law or in Equity. Upon the happening of an Event of Default and during
the condnuance thereof, the Bondowners' Trustee may (and, upon the written request of the
~ registered owners of not less -than 25% in principal amount of the Parity Bonds outstanding,:
must) take such steps and institute such suits, actions or other proceedings, all as it may deem
. appropriate for the protection and enforcement of the rights of fhe registered owners of the Parity
Bonds, to collect any amounts due and owing to or from the City, or to obtain other appropriate _
51095926.3 -29-
! . . . I . . . . . . .i . . i _ .
Draft Dated 11/10/10
- relief, and may enforce the specific performance of any covenant, agreement or condition
contained in this ordinance or in any of the Parity Bonds. .
Nothing contained in this Section 27 shall, in any event or under any circumstance, be
deemed to authorize, the acceleration of maturity of principal on the Parity Bonds, and the
remedy of aceeleration is expressly denied to the registered owners of the Parity Bonds under
any circumstances including, wittiout 'limitarion, upon the occurrence and continuance of an
Event of Default: .
Any action, suit or other proceedings instituted by the Bondowners' Trustee hereunder
shall be brought in its name as trustee .for the Bondowners and all such rights of action upon or
: under any of the Parity Bonds oi the provisions of tliis ordinance rriay be eriforced by the
Bondowners' Trustee without the possession of any of those Pazity Bonds and without the
production of the same at any trial or proceedings relative thereto except where otherwise
required by law. Any such suit, action or proceeding instituted by the Bondowners' Trustee shall
be brought for the ratable benefit of a11 of the registered.owners of tliose Parity Bonds, subject to
the provisions of this ordinance. The respeetive registered owners of the Parity Bonds, by taking
and holding the same, shall be conclusively deemed irrevocably to appoint the Bondowners'
Trustee the 'true and lawful trustee of the respective. registered owners of those 'Parity Bonds,.
with authority to institute any such action, suit or proceeding; to receive as trustee and deposit in .
hvst any sums becoming distributable on account of those Parity Bonds; to execute any paper or
. documents for the receipt of,money; and to do all.acts with respect therefo that the registered
: owner himself or herself might have done in person. Nothing herein shall be deemed to authorize
'or empower the Bondowners' Trustee to consent to accept or adopt, on'behalf of any registered
owner of the Parity Bonds, any plan of reorganization or adjustment affecting the Parity Bonds
or any right of any registered owner thereof, or to authorize or empower the Bondowners'
Trustee to vote the .claims of the registered owners thereof in any receivership, insolvency,
liquidation, bankruptcy, reorganization or other .proceed'ing to which the City is a party.
(d) Application of Money Collected by Bondowners' Trustee. Any money collected
. by the Bondowners' Trustee at any time pursuant to this Section 27 shall be applied in the
following order of priority: '
(i) First, to the payment of the charges, expenses, advances and .
compensation of the Bondowners' Trustee and the charges, expenses, counsel
. fees, disbursements and compensation of its agents and attorneys.
(ii) Second, to the payment to the persons entitled thereto of all
installments of interest then due on the Parity Bonds in the order of maturity of
such installrnents and, if the- amount available shall not be sufficient to pay in full
any installment or installments maturing on - the same date, then to the payment
. thereof rafably, according to the amounts due thereon to the persons entitled
thereto, without any discrimination or p=eference.
(iii) Third, to the payment to the persons entitled thereto of the unpaid
principal amounts of any Pariry Bonds which shall have become due (other than
Parity Bonds previously called for redemption for the .payment of which money is
51095926.; -30-
,
~ Drgft Dated 11/10/10
held pursuant to the provisions hereto), whether. at maturity or by proceedings for,
redemption or otherwise, in the order of their due dates and, if the aznount '
available: shall not be sufficient to pay in full the principal amounts due on the ,
same date, then to the payment thereof ratably, according to the principal amounts
due thereon to the persons entitled thereto, without any discrimination or
preference. -
(e) Duties and Obligations of Bondowners' Trustee. The Bondowners' Trustee.shall
not be liable except for the performance of such duties as aze specifically set forth herein.
During an Event ~of Default, the Bondowriers' Trustee shall exercise such of .the rights and.
powers vested in it hereby, and'shall use the same degree of care and skill in its -exercise, as a
, pnident person would exereise or use under the circumstances in the conduct of his or her own
affairs. The Bondowners' Trustee shall have no liability for any act or omission to' act hereunder -
except for the Bondowners' Trustee's own negligent action, its own negligent failure to act or its _
i own willful misconduct. The duties and obligations of the Bondowners' Trustee shall be -
determined solely by the express.provisions of this ordinance, and no implied powers,: duties or
obligations of the Bondowners' Trustee shall be read into this ordinance. The Bondowners'
required to exPend or, risk its own funds ur otherwise incur individual
stee shall not be
Tru
liability.in the performazice of any of its duties or in the exercise of any of its rights or powers as
the Bondowners' Trustee, except as may result from its own negligent action, its own negligent
failure to act or its own. willful misconduct. The Bondowners' Trustee shall not be bound to
recognize any person as a registered owner of any Bond until his or her title thereto, if disputed, has been established to Its' reasonable satisfaction. The Bondowners': Trustee may consult with
counsel and tlie opinion of such counsel shall be full and complete authorization and pmtection
in respect of any action talcen or suffered by it hereunder in good faith and iri accordance with the
opinion"of,such counsel. The Bondowners' Trustee shall not.be answerabTe for any neglect or
default of any person, firm or corporation employed and selected by it with reasonable care.
(f) Suits by Individual Bondowners Restricted. Neither the registered owner nor the
beneficial owner of any one or.more of Parity Bonds shall have any right to insfitute any action,
suit or proceeding at law or in equity for the enforcement of same unless: (i) an Event of Default has happened and is continuing; and
(ii) a Bondowners' Trustee has been appointed; and -
(iii) such owner previously shatl have given to the Bondowners' _
Trustee written notice of the Event of Default on account of which such suit,
action or proceeding is to be instituted; and . (iv) the registered owners of 25% in principal amount of the then
~outstanding Parity Bonds have made, after the occurrence of such Event of
Default, written request of the Bondowners' Trustee and have afforded the
Bondowners' Trustee a reasonable opportunity to institute such suit, action or
proceeding; and
. . 51095926.3 -31-
Draft Dated I1/10/10
(v) there have been offered to the Bondowners' Trustee security and
: indemnity satisfactory to it. against the costs, expenses and liabilities to be
incurred therein or thereby; and .
Bondowners' Trustee has refused or neglected to comply with
(vi) the
such xequest within a reasonable time.
No registered owner or beneficial owner of any Parity Bond shall have any right,in any
manner whatever by his or her.action to affect or impair the obligation of the City _to pay from
the Net Revenue the principal of and interest on such Parity Bonds to. the respective owners
thereof when due.
Section 29. Ratif cation, ~ All actions previously taken in accordance with this
ordinance are fiereby ratified arid confirmed.
Section 30. Effective Date of Ordinance. This ordinance shall take effect and be in
force from and after its passage and five:days following its publication as required by law.
. PASSED by the City Council and APPROVED by the. Mayor of the City of Auburn,
Washington, at a regular open public meeting thereof, this _ day of November, 2010.
- Peter B. I;ewis, Mayor
ATTEST:
Danielle Daskam, City Clerk .
~ APPROVED AS TO FORM:
Foster Pepper PLLG, Bond Counsel
PUBLISHED:
51095926:7 -32-
DraffDated Il/10/10
EXHIBIT A- Descriation of the Improvements
The following improvements are expected to be funded with proceeds of the Bonds. The
estimates are only estimates at this time. The Projects shall be carried out in accordance with the
plans and specifications prepared' by'the City's engineers and consulting engineers. The City.
Council may modify the details of the Projects where, in its judgment, it appears advisable if
such modifications do not substantially alter the purposes of that system or plan.
Water Svstem
(Estimated Projects Tota1- $1U,982,000) Location # Proiect Name Cost Estimate
1 Lakeland Hills Booster Pump Station _ $2,832,000
'2 AC Main Replacement - $1,000,000 3 Lakeland Hills.Reservoir 6 $2,500,000
- 4 Academy Booster Pump Station $500,000
NA SCADA $1,150,000
NA Water Supply Charges $3,000,000
Sewer Svstem
(Estimated Projects Total - $4,910,000)
Location # ProjecrName Cost Estimate
5 . Ellingson Pump Station $2,568,004
6 2009/10 Repair & Replacement $762,000 .
8 Pump Station Decommissioning $390,000
NA SCADA $1,190,000
Storm Drainage Svstem
(Estimated Projects Total - $4,108,000) Locadon # Proiect Name Cost Estimate
t .
9 _ White River Putnp Station $2,650,000
13 West Valley Highway $800,000
NA SCADA ' $658,000
sio9Su.s
_ . . , . . , . l_, .
Dra,ft Dated 11/10/I0
EXHIBIT B - Paritv Conditions
As set forth in Section .14 of this Ordinance; the City may issue Futwe Parity Bonds on a
parity with the Bonds and the Outstanding Parity Bonds if and only if the following conditions
aze met and complied with at the time of issuance of those proposed Future Parity Bonds:
(a) There shall be no deficiency in the Bond Fund.
(b) The ordinance p=oviding for the issuance of the Future Parity Bonds shall provide
that all assessments and interest thereon that may be levied in any ULID created for the purpose
. of paying, in whole or in part,.the principal of and,interest on those Future Parity Bonds, shall be .
paid directTy into the Bond Fund, except foi any prepaid. assessments permitted by law to be paid
- into a construction fund or account.
(c) The ordinance providingfor the issuance of those Future Parity Bonds shall
provide for the payment of the principal thereof-and interest thereon out of the Bond Fund.
(d) The ordinance providirig for the issuanceof such Future Parity Bonds shall
provide for the deposif into the Reserve Account or asubaccount therein of.(i) an,amount equal
to the Reserve Requirement for those Future Parity: Bonds from the Future Parity Bond proceeds
or other money legally available; or (ii) an Alternate. Security (or an amount of cash plus
Alternate Security) equal to the Reser!e-Requirement for those Future. Parity Bonds, or (iii) to .
the extent that the Reserve Requirement is not funded.~from Future Parity Bond pmceeds, other
legally -available :money or.Alternate Security at the time of issuance of those.Future Parity ~
arity Bonds from ULID
.P
sue of the. . Future
Bonds, within five years from the date of is
Assessments, if any, levied and first collected for:the payment of the principal of and interest on
. those Future. Parity Bonds and, to the extent that ULID Assessments aze insufficient, ttien from.
the Net'Revenue of the,System in five approximately, equal annual payments.
(e) 'fhe ordinance authorizing the issuance of such Future Parity Bonds shall provide
for the payment of mandatory redemption or sinking fund requirements into the Bond Eund for
' any Term Bonds to be issued and for regulai payments to be 'made for the. payment of the .
principal of such Term Bonds on or, :before their maturity, or, as an alternadve, the mandatory
redemption of those Term Borids prior and up to their maturity date from money in the Principal
and Interest Account. ( flThere shall be on file with the City either:
(i) A certificate from an Independent• Utility Consultant showing that
in his or her professional opinion, based on.any.12 consecutive calendar months
out of the immediately. preceding 24, calendar,.:inonths, the Net Revenue of the
System (togetlier with any ULID Assessment collections) shall be equal to the
Coverage Requirement' for each,yeaz~ thereafter.; The certificate, in estimating the
Net Revenue of the System available for ;debt service, may adjust Net Revenue of
. the System to reflect: - - .
: (1) Any changes in rates in effect and being charged or expressly
committed by ordinance to be made in the future;
.
- , s~o9snsa ,
Draft Dated 11/10/I0
.
(2) Income derived from customers of the System who have beeome
customers during the 12 consecutive month period or tliereafter
adjusted to reflect one year's net revenue from those customers;
(3) Income from any customers to be connected to the System who ±
have paid the required connection charges; -
(4) The Independent Utility .Consultant's estimate of the Net Revenue
of the System to be derived from customers anticipated to connect
. for whom new building permits have been issued;
(5) The Independent Utility Consultant's estimate of the Net Revenue
ofthe System to be deriyed from customers with existing homes or,
buildings which will lie required to connect to any additions to and .
improvements and extensions of the System constructed and to be .
paid for out of the proceeds of the sale of the additional Future
Parity Bonds or other additions to and improvements and
extensioris of the System then under consttuction and not fully connected to the facilides -of the System when such additions;
improvements and extensions are completed;
(6) Income received or to be received which is derived from any
person, firm, corporation or municipal corporation under any
_ executed contract for utility service, which revenue was not
included in the historical Net Revenue of the System; and
(7) Any increases or decreases in Net Revenue as a result of any actual
or reasonably anticipated changes in Maintenance and Operation
Expense subsequent to the 12-month period.
(ii) In lieu of the certificate of an Independent Utility Consultant as
described in paragraph (f)(i), there may be on file from the City Finance Director,
a certificate showing that in his or her professional opinion, based on any 12 "
consecutive calendar months out of the immediately 'precedirig 24 calendar
` months, and without the adjustments described in subparagraphs (1) through .(7),
above, the Net Revenue of the System shall be equal to the Coverage
Requirement for each yeaz thereafter.
No certificate provided for in this paragraph ( fl shall be required in -
connection with the issuance of a bond issue if the amount of bonds proposed to
be issued does not exceed the ULID Assessments levied in support of such bond _
issue by more than $5,000 plus any' amount of the . proceeds of such bonds .
deposited in the Reserve Account as capitalized reserve. Furthermore, if the
Future Parity Bonds proposed to be so issued are for the sole purpose of refunding
outstanding Parity Bonds; no such certification of coverage shall be required if the
Annual Debt Service in each year for the refunding bonds is . not iricreased by
$5,000 over the afnount required for the bonds to be refunded thereby, and the
maturities of those refunding bonds are not extended beyond the maturities of the
bonds to be refunded thereby.
s~~~
Draft Dated ll/10/10
~ CERTIFICATION
I, the uridersigned, City Clerk of the City of Auburn, Washington (the "City"), hereby .
certify as follows: `
.
' 1. The attached copy of Ordinance No. (the "Ordinance") is a full, true and correct
copy of an ordiriance duly passed at -a regular meeting of tlie City Council of the City held at the
_ regular meeting place thereof on November 2010, as that ordinance appeazs on tlie minute
book of the City; and the Ordinance will be in full force; and effect five days after publication in
the City's official newspaper; and
2. A quorum of the members of the City Council was present throughout the meeting '
and a majority of tliose members present voted in the prop.er manner for the passage of the
Ordinance. IN WITNESS WHEREOF, I have hereunto set my hand this day of November,.
2010. . .
' CITY OF AUBURN, WASHINGTON
Danielle Daskam, City Clerk
. .