ORD 19-003CITY OF CAMAS, WASHINGTON
ORDINANCE NO. 19-003
AN ORDINANCE of the City of Camas, Washington, relating to
contracting indebtedness; providing for the issuance, sale and delivery of not to
exceed $25,000,000 aggregate principal amount of water and sewer revenue bonds
in one or more series to finance improvements to the City's water and sewer
system and repay certain Drinking Water State Revolving Fund loans; Bing or
setting parameters with respect to certain terms and covenants of the bonds;
appointing the City's designated representative to approve the final terms of the
sale of the bonds; and providing for other related matters.
Passed: February 19, 2019
This document prepared by:
Foster Pepper PLLC
1111 Third Avenue, Suite 3000
Seattle, Washington 98101
(206) 447-4400
532665883
TABLE OF CONTENTS
ARTICLEI DEFINITIONS ..".--- ..................---....... - .....----- ....... -- ....... -.........__.....,........ ....------ 1
Section 1.1
Definitions ........ . ....... .. ............................_..........__....... --....
1
ARTICLE II PLAN
OF IMPROVEMENTS; FINDINGS AND DETERMINATIONS _........._....
7
Section 2.1
Plan ofImprovements.---.......----......---.......----.......---....... ......
7
Section 2.2
Parity Conditions........ •----.......---.......---....... ...............
7
ARTICLE III AUTHORIZATION AND ISSUANCE OF BONDS ...................___........__........._....
7
Section 3.1
Authorization of Bonds__........__..............................---.......__...................._....
7
Section 3.2
Registration, Exchange and Payments........__........__.........._.........__...... -.._..,.8
Section3.3
Redemption......-- ........._........ - ........__........._........ - .......... ....... .. .............
9
Section 3.4
Form of Bonds; Signatures and Seal.__........__........___........___........__........_._.
10
Section 3.5
Authentication..---........---.......---....... - ----•
11
Section 3.6
Lost or Destroyed Bonds ......... ........................................._.
11
ARTICLE IV CREATION OF FUNDS AND ACCOUNTS_........__........__.........___........___........__.
11
Section4.1
Project Fund ..... . ................. . .......... ..................--........-- ....... -- ........._.
11
Section 4.2
Revenue Fund..--......... - ........_.........-- ....... - ....... . .................._._....... -
11
Section 4.3
Bond Fund-........ ........... ....._.........---.
12
Section 4.4
Reserve Account_........._........---........---........._........_..........---.......---.........__.
12
Section 4.5
Rate Stabilization Account...___.........__........._........___........___......._.__.......__..
13
Section 4.6
Adequacy of Revenue.._........-----.......---..._...__.-------•--..._....---........__............
13
Section 4.7
Contract Resource Obligations..................................................._.............
14
ARTICLE V COVENANTS......_......._ ................. .. ....... . .......... ........_.........-- ...... -- ........__.
14
Section 5.1
Pledge; Lien Position of Bondowners.......................................................
14
Section 5.2
General Covenants......__........___........._.........__............................................15
Section 5.3
Preservation of Tax Exemption for Interest on Bonds.....___........__............
18
Section 5.4
Post -Issuance Compliance....._........._.........._........._.........___..................._..18
Section 5.5
Designation of Bonds as "Qualified Tax -Exempt Obligations..._........_
18
ARTICLE VI FORM OF BOND_........---. ....... ..........- .......__.........__........ -- .......-- ........-- ...........
19
Section6.1
Bond Form........_.........---.......__....................---.......---•......----...................
19
ARTICLE VII SUPPLEMENTAL ORDINANCES ---•-•.....---.......---.......---......--- ..................__-.
21
Section 7.1
Supplemental Ordinances Without Consent of Bond Owners....__..........._
21
Section 7.2
Supplemental Ordinance With Consent of Bond Owners .........__.......,.._..
22
Section 7.3
Effect of Supplemental Ordinance....................................__........__........___.
22
ARTICLE VIII ONGOING DISCLOSURE.
23
Section 8.1
Undertaking to Provide Ongoing Disclosure......,............__...................___.
23
ARTICLE IX SALE OF BONDS, APPROVAL OF OFFICIAL STATEMENT,
DEFEASANCE,
MISCELLANEOUS -........ ::............ _..:.::_._.......__......:.-----•---•-------••--••_--
25
Section 9.1
Sale of the Bonds; Delivery of Bonds_........__........._.........___ ......................
25
Section 9.2
Preparation, Execution and Delivery of the Bonds__........__.........__.........__.
26
Section 9.3
Preliminary Official Statement Deemed Final......___........___........ ..............
26
Section 9.4
Approval of Final Official Statement....»...__........___........._........._.............
26
Section 9.5
Refunding or Defeasance.......__........ ---......• ...............................................26
532665883
ORDINANCE NO. 19-003
AN ORDINANCE of the City of Camas, Washington, relating to
contracting indebtedness; providing for the issuance, sale and delivery of not to
exceed $25,000,000 aggregate principal amount of water and sewer revenue bonds
in one or more series to finance improvements to the City's water and sewer
system and repay certain Drinking Water State Revolving Fund loans; Bing or
setting parameters with respect to certain terms and covenants of the bonds;
appointing the City's designated representative to approve the final terms of the
sale of the bonds; and providing for other related matters.
WHEREAS, the City of Camas, Washington (hereinafter the "City"), now owns, maintains
and operates a combined water and sewerage system (the "System"); and
WHEREAS, it is in the best interest of the City to undertake improvements to the System;
and
WHEREAS, the City has three outstanding Drinking Water State Revolving Fund loans
with the State of Washington, currently outstanding in the principal amount of $10,929,784.72
(collectively, the "Drinking Water State Revolving Fund Loans"), which maybe prepaid prior to
their stated maturity dates; and
WHEREAS, pursuant to Ordinance No_ 15-013 of the City adopted on August 17, 2015,
the City issued its revenue bonds under date of September 10, 2015 (the "2015 Bonds"), currently
outstanding in the aggregate principal amount of $17,520,000, and provided in Section 5.2(e) of
such ordinance that additional revenue bonds of the City could be issued on a parity with the 2015
Bonds if certain conditions were met; and
WHEREAS, in order to finance capital improvements to the System and to repay the
Drinking Water State Revolving Fund Loans, it is hereby found necessary and advisable that the
City issue its water and sewer revenue bonds (the "Bonds") with a lien on the revenues of the
System on a parity with the lien of the 2015 Bonds;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CAMAS,
WASHINGTON, DO ORDAIN AS FOLLOWS:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions_ As used in this ordinance, the following words shall have the
following meanings:
"Annual Debt Service" means the amount required to be paid in any calendar year for
(1) interest on all Parity Bonds then outstanding, excluding interest paid from proceeds of such
bonds; (2) principal of all Parity Bonds then outstanding but excluding any Parity Bonds, if any,
for which a sinking fund account has been established; and (3) payments into any sinking fund
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account for the amortization of Parity Bonds. If the interest rate on any such bonds is other than a
fixed rate, the rate applicable at the time of computation shall be used.
The City may deduct the direct payment the City is expected to receive in respect of any
Future Parity Bonds for which the federal government will provide the City with a direct payment
of a portion of the interest from the interest portion of annual debt service.
"Assessment Income" means the principal of and interest on assessments levied in ULIDs
and pledged to be paid into the Bond Fund. Assessment Income shall be allocated to the years in
which it would be received if the unpaid balance of each assessment roll were paid in the remaining
number of installments with interest on the declining balance at the times and at the rate provided
in the ordinance confirming the assessment roll.
"Assessments" means all assessments levied in any ULID of the City created for the
acquisition or construction of additions and improvements to and extensions of the System, if such
assessments are pledged to be paid into the Bond Fund. "Assessments" include any installments
of Assessments and any interest or penalties which may be due thereon.
"Authorized Denomination" means $5,000 or any integral multiple thereof within a
maturity of a Series.
"Average Annual Debt Service" means as of the date of calculation the average amount of
Annual Debt Service required to be paid in any calendar year thereafter for the then outstanding
Parity Bonds.
"Beneficial Owner" means, with respect to a Bond, the owner of any beneficial interest in
that Bond.
"Bond Fund" means the "Water -Sewer Revenue Bond Fund" created by Section 5 of
Ordinance No. 1036 to pay and secure the payment of the principal of and interest on the Parity
Bonds.
"Bond Purchase Agreement" means an offer to purchase a Series of the Bonds, setting forth
certain terms and conditions of the issuance, sale and delivery of those Bonds, which offer is
authorized to be accepted by the Designated Representative on behalf of the City, if consistent
with this ordinance.
"Bond registrar" or "Regis strar" means the Fiscal Agent, or any successor bond registrar
selected by the City.
"Bonds" means the not to exceed $25,0009000 aggregate principal amount of City of
Camas, Washington, Water and Sewer Revenue Bonds, 2019, authorized to be issued pursuant to
this ordinance.
"Cit ' means the City of Camas, Washington, a municipal corporation duly organized and
existing under the laws of the State_
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"City Council" means the legislative authority of the City, as duly and regularly constituted
from time to time.
"Code" means the United States Internal Revenue Code of 1986, as amended, and
applicable rules and regulations promulgated thereunder.
"Contract Resource Obli ate" means an obligation of the City, designated as a Contract
Resource Obligation and entered into pursuant to Section 4.7 of this ordinance, to make payments
for water or sewer supply, transmission or service to another person or entity.
"Coverage Requirement" means (a) for any period during which Assessments may be paid
without becoming delinquent, the sum of (i) the product of the Average Annual Debt Service on
all Parity Bonds then outstanding times a fraction, the numerator of which is the aggregate
principal amount of nondelinquent Assessments which remain to be paid into the Bond Fund plus
the principal amount of Assessments previously paid into and then on hand in the Bond Fund, and
the denominator of which is the aggregate principal amount of Parity Bonds then outstanding, plus
(ii) 1.25 times the product of Average Annual Debt Service on all Parity Bonds then outstanding
times the difference of 1.0 minus the fraction calculated pursuant to (i) above; or (b) for any other
period, the product of 1.25 times the Average Annual Debt Service on the Parity Bonds then
outstanding.
"Designated �:epresentative" means the officer of the City appointed in Section 9.1 of this
ordinance to serve as the City's designated representative in accordance with RCW 39.46.040(2).
"Drinlcing Water State Revolving Fund Loans" means the City's following drinking water
state revolving fund loans: (a) dated April 9, 2013, with a final maturity date of October 1, 2036,
and currently outstanding in the principal amount of $6,391,441.80; (b) dated December 1, 2015,
with a final maturity date of July 1, 2036, and currently outstanding in the principal amount of
$1,104,342.92 and (c) dated December 1, 2015, with a final maturity date of July 1, 2036, and
currently outstanding in the principal amount of $3,434,000.
"DTC" means The Depository Trust Company, New York, New York, or its nominee.
"Final Terms" means the terms and conditions for the sale of a Series of the Bonds
including the amount, date or dates, denominations, interest rate or rates (or mechanism for
determining interest rate or rates), payment dates, final maturity, redemption rights, price, and
other terms or covenants.
"Finance Director" means the person designated as Finance Director by the City Council
from time to time.
"Escal. Agent" means the fiscal agent of the State, as the same may be designated by the
State from time to time.
"Fiscal Year" means the fiscal year used by the City at any time.
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53266588.3
"Future Parity Bonds" means the obligations hereafter issued on a parity with the payments
required to be made out of the Revenue Fund to pay and secure the payment of the principal of
and interest on the Outstanding Parity Bonds and the Bonds.
"Government Obligations" tions" has the meaning given in RCW 39.53.010, as now in effect or
as may hereafter be amended.
"Grass Revenue" means all of the rates, charges or other income and receipts in each case
derived by or on account of the City from the operation or ownership of the System.
`.`Issue Date:" means, with respect to a Bond, the date of initial issuance and delivery of that
Bond to the Purchaser in exchange for the purchase price of that Bond.
"Letter of Representation" means the Blanket Issuer Letter of Representations between the
City and DTC, dated October 12, 1998, as it may be amended from time to time, and any successor
or substitute letter relating to the operational procedures of the Securities Depository.
"Maximum Annual Debt Service" means as of the date of calculation the maximum amount
of Annual Debt Service required to be paid in any calendar year thereafter for the then outstanding
Parity Bonds.
"MSRB" means the Municipal Securities Rulemaking Board.
"Net Revenue" means Gross Revenue minus Operation and Maintenance Costs.
"Operation and Maintenance Costs" means all necessary costs to the City of operating and
maintaining the System, including but not limited to the City's administrative and general expenses
(which expenses may include pro rata budget charges for city departments when such charges
represent a reasonable distribution and share of actual cost), costs of insurance (including
reasonable contributions for self-insurance reserves), consulting technical services, excise taxes,
and repairs and replacements (only to the extent not properly classifiable as capital costs), but
excluding depreciation (or reserves therefor), amortization of intangibles or other bookkeeping
entries of a similar nature, capital costs of additions, betterments, extensions or replacements of
all or any portion of the System, or debt service or transfers from money of the System to other
funds of the City as taxes or payments in lieu of taxes. Operation and Maintenance Costs shall
also include any amounts due under Contract Resource Obligations.
"Outstanding Parity Bonds" means the outstanding 2015 Bonds.
"Owner" means, without distinction, the Registered Owner and the Beneficial Owner.
"Parity Bonds" means the Outstanding Parity Bonds, the Bonds and any Future Parity
Bonds.
"Professional Utility Consultant" means the independent person(s) or fiiin(s) selected by
the City having a favorable reputation for skill and experience with water and sewer systems of
comparable size and character to the System in such areas as are relevant to the purposes for which
they are retained.
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53266588.3
"Proiece' means the capital improvements to the System, including water reservoirs, wells
and piping and other capital purposes, as deemed necessary and advisable by the City. Incidental
costs incurred in connection with carrying out and accomplishing the Project, consistent with RCW
39.46.070, may be included as costs of the Project. The Project includes acquisition, construction
and installation of all necessary equipment, apparatus, accessories, fixtures and appurtenances.
"Project Fund" means the fund or funds of the City created for the purpose of carrying out
the Project.
"Purchaser" means KeyBanc Capital Markets Inc. of Seattle, Washington.
"Qualified Letter of Credit" means any irrevocable letter of credit issued by a financial
institution for the account of the City on behalf of the owners of any Parity Bonds, which institution
maintains an office, agency or branch in the United States and as of the time of issuance of such
letter of credit, is rated in one of the two highest rating categories by Moody's Investors Service,
Inc. or S&P Global Ratings, or their comparably recognized business successors.
" ualified Insurance" means any noncancelable municipal bond insurance policy or surety
bond issued by any insurance company licensed to conduct an insurance business in any state of
the United States (or by a service corporation acting on behalf of one or more such insurance
companies), which insurance company or companies, as of the time of issuance of such policy or
surety bond, is rated in one of the two highest rating categories by Moody's Investors Service, Inc.
or S&P Global Ratings, or their comparably recognized business successors.
"Rate Stabilization Account" means the account of that name authorized to be created
within the Revenue Fund pursuant to Section 4.5 of this ordinance.
"Rating Agency" means any nationally recognized rating agency then maintaining a rating
on the Bonds at the request of the City.
"Record Date" means the Bond Registrar's close of business on the 15th day of the month
preceding an interest payment date. With respect to redemption of a Bond prior to its maturity,
the Record Date shall mean the Bond Registrar's close of business on the date on which the Bond
Registrar sends the notice of redemption in accordance with Section 3.3.
"Registered Owned'" means, with respect to a Bond, the person in whose name that Bond
is registered on the Bond Register. For so long as the City utilizes the book -entry only system for
the Bonds under the Letter of Representations, Registered Owner shall mean the Securities
Depository.
"Reserve Account" means that account in the Bond Fund created by Section 6 of Ordinance
No. 1036 of the City. The Designated Representative shall determine whether the Bonds will be
secured by the Reserve Account, or whether to create a separate reserve account to secure the
Bonds.
"Reserve Account Requiremmit" means with respect to any Parity Bonds secured by the
Reserve Account, an amount equal to the lesser of (a) 125% of Average Annual Debt Service on
such bonds, (b) 10% of the original net proceeds of such series of bonds, and (c) Maximum Annual
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Debt Service for such bonds secured by the Reserve Account. For purposes of the Reserve
Account Requirement, the City may deduct the direct payment the City is expected to receive in
respect of any Future Parity Bonds for which the federal government will provide the City with a
direct payment of a portion of the interest from the interest portion of annual debt service. The
reserve account requirement for a separate reserve account means the amount, if any, by
established by (1) the Designated Representative or (2) an ordinance authorizing any Future Parity
Bonds.
"Revenue Fund" means the special "Water and Sewer Revenue Fund" of the City created
by Section 4 of Ordinance No. 781. The City by such ordinance has pledged that the Gross
Revenue of the System shall be paid into the Revenue Fund as collected.
"Rule 15c2-12" means Rule 15c2-12 promulgated by the SEC under the Securities
Exchange Act of 1934, as amended.
"SEC" means the United States Securities and Exchange Commission.
".Securities De ositor " means DTC, any successor thereto, any substitute securities
depository selected by the City that is qualified under applicable laws and regulations to -provide
the services proposed to be provided by it, or the nominee of any of the foregoing.
"Series of the Bonds" or "Series" means a series of the Bonds issued pursuant to this
ordinance.
"State" means the State of Washington.
"System" means the existing water supply and distribution system and sanitary sewage
collection and disposal system of the City as the same has heretofore been combined and as the
same shall be added to, improved and extended for as long as any of the Parity Bonds are
outstanding.
"Term Bond" means each Bond designated as a Term Bond and subject to mandatory
redemption in the years and amounts set forth in the Bond Purchase Agreement.
"2015 Bonds" means the $19,145,000 aggregate principal amount of City of Camas,
Washington, Water and Sewer Revenue and Refunding Bonds, 2015, issued pursuant to Ordinance
No. 15-013 adopted on August 17, 2015.
"ULID" means a utility local improvement district in which Assessments have been or will
be levied for improvements financed in whole or in part from proceeds of any Parity Bonds.
"Undertaking" means the undertaking to provide continuing disclosure entered into
pursuant to Section 8.1 of this ordinance.
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ARTICLE II
PLAN OF IMPROVEMENTS; FINDINGS AND DETERMINATIONS
Section 2.1 Plan of Improvements. The City hereby specifies and adopts a system or
plan of additions to and betterments and extensions of the System, consisting of the following
capital improvements (collectively, the "Project"): water reservoirs, wells and piping and other
capital purposes to the System approved by the City Council. The City hereby adopts the Project
as a plan and system. The Project will be undertaken in accordance with specifications and
contracts for acquisition and construction approved by the City Council from time to time. The
Project shall be subject to such changes as to details as may be authorized by the City Council.
The City may proceed with the construction and installation of the Project as herein authorized,
either alone or in conjunction with the construction of other facilities of the System, and in whole,
or in successive parts from time to time as may be found advisable. The estimated cost of the
Project is approximately $19,725,000, which is expected to be financed out of Bond proceeds and
other System revenues.
Section 2.2 Parity Conditions. The City Council hereby finds and determines as
follows:
First, that the Bonds will be issued for the purpose of acquiring, constructing and installing
additions to and betterments and extensions of, acquiring necessary equipment for, or making
necessary repairs or capital improvements to or replacements of equipment of the System, and to
repay outstanding debt of the System.
Second, that at the time of adoption of this ordinance and at the time of the issuance of the
Bonds there is not nor will there be any deficiency in the Bond Fund or the Reserve Account.
Third, that this ordinance contains the provisions and covenants regarding the payments to
be made into the Bond Fund and Reserve Account or such other reserve account determined by
the Designated Representative, and regarding the establishment, maintenance and collection of
rates and charges for water and sanitary sewage collection and disposal service by the City.
Fourth, that the City has been assured that the certificate of an independent professional
engineer licensed to practice in the State or the Finance Director of the City as required by
Section 5.2(E) of Ordinance No. 15-013 for the issuance of Future Parity Bonds will be provided
to the City at or prior to the issuance of the Bonds.
All of the conditions of Ordinance No. 15-013 have been met and fully complied with or
will be met prior to the Issue Date, and the City hereby finds that the Bonds may now be issued on
a parity of lien with the Outstanding Parity Bonds.
ARTICLE III
AUTHORIZATION AND ISSUANCE OF BONDS
Section 3.1 Authorization of Bonds. The City shall now issue and sell its water and
sewer revenue bonds to provide funds to pay costs of the Project, repay the Drinking Water State
Revolving Fund Loans, fund a reserve account if the funding of a reserve account is approved by
the Designated Representative, and pay costs of issuing the Bonds. The Bonds shall be designated
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as the "City of Camas, Washington, Water and Sewer Revenue Bonds, 2019." Each Series of
Bonds issued shall be dated as of the date of their initial delivery, shall be fully registered as to
principal and interest, shall be in Authorized Denominations, provided no Bond shall represent
more than one maturity, and shall be numbered separately in such manner and with any additional
designation as the Bond Registrar deems necessary for purposes of identification. The Bonds shall
bear interest payable semiannually at the rates per annum and be payable in the years and amounts
as shall be determined pursuant to Section 9.1 hereof.
The Bonds shall not be general obligations of the City. The Bonds shall be obligations
only of the Bond Fund and shall be payable and secured as provided herein. The Bonds do not
constitute an indebtedness of the City within the meaning of the constitutional provisions and
limitations of the State.
Section 3.2 Registration, Exchange and Payments.
(a) Registration of Bonds. Each Bond shall be issued only in registered form
as to both principal and interest and the ownership of each Bond shall be recorded on the Bond
Register.
(b) Bond Registrar; Duties. The Fiscal Agent is appointed as initial Bond
Registrar. The Bond Registrar shall keep, or cause to be kept, sufficient books for the registration
and transfer of the Bonds, which shall be open to inspection by the City at all times. The Bond
Registrar is authorized, on behalf of the City, to authenticate and deliver Bonds transferred or
exchanged in accordance with the provisions of the Bonds and this ordinance, to serve as the City's
paying agent for the Bonds and to carry out all of the Bond Registrar's powers and duties under
this ordinance. The Bond Registrar shall be responsible for its representations contained in the
Bond Registrar's Certificate of Authentication on each Bond. The Bond Registrar may become
an Owner with the same rights it would have if it were not the Bond Registrar and, to the extent
permitted by law, may act as depository for and permit any of its officers or directors to act as
members of, or in any other capacity with respect to, any committee formed to protect the rights
of Owners.
(c) Bond Register; Transfer and Exchange. The Bond Register shall contain
the name and mailing address of each Registered Owner and the principal amount and number of
each Bond held by each Registered Owner. A Bond surrendered to the Bond Registrar may be
exchanged for a Bond or Bonds in any Authorized Denomination of an equal aggregate principal
amount and of the same Series, interest rate and maturity. A Bond may be transferred only if
endorsed in the manner provided thereon and surrendered to the Bond Registrar. Any exchange
or transfer shall be without cost to the Owner or transferee. The Bond Registrar shall not be
obligated to exchange any Bond or transfer registered ownership during the period between the
applicable Record Date and the next upcoming interest payment or redemption date.
(d) Securities Depository, Book -Entry, Only Form.. DTC is appointed as initial
Securities Depository. Each Bond initially shall be registered in the name of Cede & Co., as the
nominee of DTC. Each Bond registered in the name of the Securities Depository shall be held
fully immobilized in book -entry only form by the Securities Depository in accordance with the
provisions of the Letter of Representations. Registered ownership of any Bond registered in the
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53266588.3
name of the Securities Depository may not be transferred except: (i) to any successor Securities
Depository; (ii) to any substitute Securities Depository appointed by the City; or (iii) to any person
if the Bond is no longer to be held in book -entry only form. Upon the resignation of the Securities
Depository, or upon a termination of the services of the Securities Depository by the City, the City
may appoint a substitute Securities Depository. If (i) the Securities Depository resigns and the
City does not appoint a substitute Securities Depository, or (ii) the City terminates the services of
the Securities Depository, the Bonds no longer shall be held in book -entry only form and the
registered ownership of each Bond may be transferred to any person as provided in this ordinance.
Neither the City nor the Bond Registrar shall have any obligation to participants of any
Securities Depository or the persons for whom they act as nominees regarding accuracy of any
records maintained by the Securities Depository or its participants. Neither the City nor the Bond
Registrar shall be responsible for any notice that is permitted or required to be given to a Registered
Owner except such notice as is required to be given by the Bond Registrar to the Securities
Depository.
(e) Place and Medium of Payment. Both principal of and interest on the Bonds
shall be payable in lawful money of the United States of America. For so long as all Bonds are in
fully immobilized form, payments of principal and interest shall be made as provided in
accordance with the operational arrangements of DTC referred to in the Letter of Representations.
In the event that the Bonds are no longer in fully immobilized form, interest on the Bonds shall be
paid by check or draft mailed to the Registered Owners at the addresses for such Registered
Owners appearing on the Bond Register on the 15th day of the month preceding the interest
payment date, and principal of the Bonds shall be payable upon presentation and surrender of such
Bonds by the Registered Owners at the principal office of the Bond Registrar; provided, however,
that if so requested in writing by the Registered Owner of at least $1,000,000 principal amount of
Bonds, interest will be paid by wire transfer on the date due to an account with a bank located
within the United States.
Section 3.3 Redemption.
(a) _Optional Redemption. The Bonds shall be subject to redemption at the
option of the City on terms acceptable to the Designated Representative, as set forth in the Bond
Purchase Agreement, consistent with the parameters set forth in Section 9.1.
(b) Mandatory Rede ian. Each Bond that is designated as a Term Bond in
the Bond Purchase Agreement, consistent with the parameters set forth in Section 9.1 and except
as set forth below, shall be called for redemption at a price equal to the stated principal amount to
be redeemed, plus accrued interest, on the dates and in the amounts as set forth in the Bond
Purchase Agreement. If a Term Bond is redeemed under the optional redemption provisions,
defeased or purchased by the City and surrendered for cancellation, the principal amount of the
Term Bond so redeemed, defeased or purchased (irrespective of its actual redemption or purchase
price) shall be credited against one or more scheduled mandatory redemption installments for that
Tern Bond. The City shall determine the manner in which the credit is to be allocated and shall
notify the Bond Registrar in writing of its allocation prior to the earliest mandatory redemption
date for that Term Bond for which notice of redemption has not already been given.
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(c) Selection of Bonds for Redemption; Partial Redemption. If fewer than all
of the outstanding Bonds are to be redeemed at the option of the City, the City shall select the
Series and maturities to be redeemed. If fewer than all of the outstanding Bonds of a maturity of
a Series are to be redeemed, the Securities Depository shall select Bonds registered in the name of
the Securities Depository to be redeemed in accordance with the Letter of Representations, and the
Bond Registrar shall select all other Bonds to be redeemed randomly in such manner as the Bond
Registrar shall determine. All or a portion of the principal amount of any Bond that is to be
redeemed may be redeemed in any Authorized Denomination. If less than all of the outstanding
principal amount of any Bond is redeemed, upon surrender of that Bond to the Bond Registrar,
there shall be issued to the Registered Owner, without charge, a new Bond (or Bonds, at the option
of the Registered Owner) of the same Series, maturity and interest rate in any Authorized
Denomination in the aggregate principal amount to remain outstanding.
(d) Notice of Redemption. Notice of redemption of each Bond registered in the
name of the Securities Depository shall be given in accordance with the Letter of Representations.
Notice of redemption of each other Bond, unless waived by the Registered Owner, shall be given
by the Bond Registrar not less than 20 nor more than 60 days prior to the date fixed for redemption
by first-class mail, postage prepaid, to the Registered Owner at the address appearing on the Bond
Register on the Record Date. The requirements of the preceding sentence shall be satisfied when
notice has been mailed as so provided, whether or not it is actually received by an Owner. In
addition, the redemption notice shall be mailed or sent electronically within the same period to the
MSRB (if required under the Undertaking), to each Rating Agency, and to such other persons and
with such additional information as the Finance Director shall determine, but these additional
mailings shall not be a condition precedent to the redemption of any Bond.
(e) Rescission of Optional Redemption Notice. In the case of an optional
redemption, the notice of redemption may state that the City retains the right to rescind the
redemption notice and the redemption by giving a notice of rescission to the affected Registered
Owners at any time on or prior to the date fixed for redemption. Any notice of optional redemption
that is so rescinded shall be of no effect, and each Bond for which a notice of redemption has been
rescinded shall remain outstanding.
(f) _Effect of Redemption. Interest on each Bond called for redemption shall
cease to accrue on the date fixed for redemption, unless either the notice of optional redemption is
rescinded as set forth above, or money sufficient to effect such redemption is not on deposit in the
Bond Fund or in a trust account established to refund or defease the Bond.
(g) Purchase of Bonds. The City reserves the right to purchase any or all of the
Bonds offered to the City at any time at any price acceptable to the City plus accrued interest to
the date of purchase.
Section 3.4 Form of Bonds; Si attires and Seal. Each Bond shall be prepared in a form
consistent with the provisions of this ordinance and State law. Each Bond shall be signed by the
Mayor and the City Clerk, either or both of whose signatures may be manual or in facsimile, and
the seal of the City or a facsimile reproduction thereof shall be impressed or printed thereon. If
any officer whose manual or facsimile signature appears on a Bond ceases to be an officer of the
City authorized to sign bonds before the Bond bearing his or her manual or facsimile signature is
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authenticated by the Bond Registrar, or issued or delivered by the City, that Bond nevertheless
may be authenticated, issued and delivered and, when authenticated, issued and delivered, shall be
as binding on the City as though that person had continued to be an officer of the City authorized
to sign bonds. Any Bond also may be signed on behalf of the City by any person who, on the
actual date of signing of the Bond, is an officer of the City authorized to sign bonds, although he
or she did not hold the required office on its Issue.Date.
Section 3.5 Authentication.. Only a Bond bearing a Certificate of Authentication in
substantially the following form, manually signed by the Bond Registrar, shall be valid or
obligatory for any purpose or entitled to the benefits of this ordinance: "Certificate of
Authentication. This Bond is one of the fully registered City of Camas, Washington, Water and
Sewer Revenue Bonds, 2019." The authorized signing of a Certificate of Authentication shall be
conclusive evidence that the Bond so authenticated has been duly executed, authenticated and
delivered and is entitled to the benefits of this ordinance.
Section 3.6 Lost or Destroyed Bonds. In case any of the Bonds shall be lost, stolen or
destroyed, the Bond Registrar may authenticate and deliver a new bond or bonds of like amount,
date, tenor and effect to the Registered Owner or nominee thereof upon payment to the City for
the expenses and charges in connection therewith and upon his or her filing with the Bond Registrar
evidence satisfactory to said Bond Registrar that such Bond or Bonds were actually lost, stolen or
destroyed and of his ownership thereof, and upon furnishing the City with indemnity satisfactory
to them both.
ARTICLE IV
CREATION OF FUNDS AND ACCOUNTS
Section 4.1 Project Fund. There is hereby authorized to be created a fund for the
purpose of depositing Bond proceeds for the purpose of paying the costs of the Project, repaying
the Drinking Water State Revolving Fund Loans and paying costs of issuance (the "Project Fund").
The proceeds of sale of the Bonds, after funding of a reserve account, if such funding is approved
by the Designated Representative, shall be paid into the Project Fund. The money in the Project
Fund not immediately needed for the Project may be invested in such obligations as may be
permitted cities of the State by law. All interest earned and/or income derived by virtue of any
such investments shall remain in the Project Fund and be used for the purpose for which said
Project Fund is created. Any money remaining in the Project Fund after the Drinking Water State
Revolving Fund Loans have been repaid and all of costs of the Project have been paid shall be
transferred to the Bond Fund and/or the applicable reserve account.
Section 4.2 Revenue Fund. There has been created by Section 4 of Ordinance No. 781
of the City a special fund of the City known as the "Water and Sewer Revenue Fund" ("Revenue
Fund"), into which fund the City has obligated and bound itself to pay all of the Gross Revenue of
the System as collected. The money in the Revenue Fund shall be accounted for separately from
any and all other money of the City.
All Operation and Maintenance Costs, all payments required to be made into the Bond
Fund and Reserve Account and all payments which may be required later to be made into any other
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fund or account of the City or for any other proper purpose in connection with the operation and
ownership of the System shall be paid out of the Revenue Fund.
Section 4.3 Bond Fund. There has been created by Section 5 of Ordinance No. 1036 of
the City another special fund of the City known as the "Water -Sewer Revenue Bond Fund" (the
"Bond Fund"), which fund shall be drawn upon for the sole purpose of paying the principal of,
premium if any, and interest on the Parity Bonds.
The City hereby covenants to set aside and pay into the Bond Fund out of the Revenue
Fund the amounts necessary, together with Assessment Income and such other funds as are on
hand and available in the Bond Fund, to pay the principal of and interest on the Parity Bonds as
the same respectively become due and payable.
Section 4.4 Reserve Account. A Reserve Account has heretofore been created in the
Bond Fund by Ordinance No. 1036 for the purpose of securing the payment of the principal of and
interest on Parity Bonds that are designated in the proceedings authorizing their issuance.
The Designated Representative may authorize the creation of a new reserve account and
determine the reserve account requirement for that account to secure the Bonds, or may determine
to have the Reserve Account created pursuant to Ordinance No. 1036 secure the Bonds. The
Designated Representative may deposit into the Reserve Account or such other reserve account,
proceeds of the Bonds, or other funds of the City, in an amount so that there will be on deposit in
such reserve account a total amount at least equal to the reserve account requirement for such
account as determined by the Designated Representative.
The City will at all times maintain the Reserve Account Requirement in the Reserve
Account until there is a sufficient amount in the Bond Fund and Reserve Account to pay the
principal of, premium if any and interest on all outstanding Parity Bonds secured by such account,
at which time the money in the Reserve Account may be used to pay such principal, premium, if
any, and interest. If a separate reserve account is created, the City will at all times maintain the
reserve account requirement for such account until there is a sufficient amount in the Bond Fund
and separate reserve account to pay the principal of, premium if any, and interest on the outstanding
Parity Bonds secured by such separate reserve account, at which time the money in such account
may be used to pay such principal, premium, if any, and interest.
In the event the Bonds are ever refunded or defeased, the money set aside in the Reserve
Account or such other reserve account to secure the payment of the Bonds may be used to retire
Bonds, may remain in the Reserve Account or such other reserve account, or may be transferred
to any other reserve account which may be created to secure the payment of the bonds issued to
refund the Bonds.
In the event the money in the Bond Fund over and above the amount therein set aside and
credited to the Reserve Account and any other reserve account is insufficient to meet maturing
installments of either principal of or interest on any outstanding Parity Bonds secured by such
account, such deficiency shall be made up from the Reserve Account or other reserve account
securing such outstanding Parity Bonds by the withdrawal of money therefrom. Any deficiency
created in the Reserve Account by reason of any such withdrawal shall then be made up from
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money in the Revenue Fund or from Assessment Income first available after making necessary
provision for the payments required to be made into the Bond Fund.
All money in any reserve account or Bond Fund may be kept in cash or invested in such
obligations as may now or hereafter be permitted cities and towns of the State by law and maturing
not later than the last maturity of any Parity Bonds. Interest earned on or any profits made from
the sale of any such investments shall be deposited in and become a part of the Bond Fund or
Revenue Fund and shall be considered Gross Revenue of the System.
Any ordinance providing for the issuance of Parity Bonds may provide (or the City may
provide by ordinance at any other time) for the City to obtain Qualified Insurance or a Qualified
Letter of Credit for specific amounts required pursuant to this section to be paid out of the Reserve
Account or other reserve account. The face amount of any such Qualified Insurance or Qualified
Letter of Credit shall be credited against the amounts required to be maintained in the Reserve
Account or other reserve account by this section to the extent that such payments and credits to be
made are insured by an insurance company, or guaranteed by a letter of credit from a financial
institution. Such Qualified Letter of Credit or Qualified Insurance shall not be cancelable on less
than five years' notice. In the event of any cancellation, the Reserve Account or other reserve
account shall be funded in accordance with the provisions of this section providing for payment to
such reserve account in the event of a deficiency therein.
The ordinance authorizing Future Parity Bonds may establish a separate reserve account
and set the reserve account requirement for any such Future Parity Bonds or provide that some or
all of such Future Parity Bonds be secured by a common reserve account.
Section 4.5 Rate Stabilization Account. A special account of the City to be designated
the "Water and Sewer Rate Stabilization Account" (the "Rate Stabilization Account") may be
created within the Revenue Fund, at the discretion of the Finance Director, to cope with future
increases in revenue requirements of the System. The City may from time to time appropriate or
budget amounts in the Revenue Fund for deposit in the Rate Stabilization Account and may from
time to time withdraw amounts therefrom to prevent or mitigate water and sewer rate increases or
for other lawful purposes of the City related to the System. Amounts withdrawn from the Rate
Stabilization Account shall increase Gross Revenue for the period for which they are withdrawn,
and amounts deposited in the Rate Stabilization Account shall reduce Gross Revenue for the period
for which they are deposited. Credits to or from the Rate Stabilization Account that occur within
90 days after the end of a fiscal year may be treated as occurring within such fiscal year. Earnings
on the Rate Stabilization Account shall be credited to the Revenue Fund.
Section 4.6. Adequacy of Revenue. The City Council hereby declares that, in fixing the
amounts to be paid into the Bond Fund and the Reserve Account or such other reserve account as
provided above, it has exercised due regard for the necessary Operation and Maintenance Costs of
the System and the amounts necessary to pay the principal of and interest on the Outstanding Parity
Bonds, and has not obligated the City to set aside and pay into the Bond Fund and Reserve Account
or such other reserve account, if created, a greater amount of revenue of the System and
Assessment Income than in its judgment will be available over and above such Operation and
Maintenance Costs and the amounts necessary to pay such principal and interest.
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Section 4.7 Contract Resource Obligations. The City may at any time enter into one or
more contracts or other obligations for the acquisition, from facilities to be constructed, of water
or sewer supply, transmission, 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 time that supply,
transmission, or service is being provided, or during a suspension or after termination of supply or
service) shall be Operation and Maintenance Costs if the following requirements are met at the
time such Contract Resource Obligation is entered into:
(a) No event of default has occurred and is continuing.
(b) There shall be on file a certificate of a Professional Utility Consultant or an
independent certified public accountant, stating that: (i) 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; (ii) the source of any new supply, and any facilities to be
constructed to provide the supply, transmission, treatment, or other service, are sound from a water
or other commodity supply or transmission planning standpoint, are technically and economically
feasible in accordance with prudent utility practice, and are likely to provide supply or transmission
or other service no later than a date set forth in the Professional Utility Consultant's, or independent
certified public accountant's, certification; and (iii) the Net Revenue (further adjusted by the
Professional Utility Consultant's, or independent certified public accountant's, estimate of the
payments to be made in 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 Professional Utility Consultant, or independent certified public accountant (with
such estimate based on such factors as he or she considers reasonable), will be at least equal to the
rate coverage requirement set forth in Section 5.2(a) of this ordinance.
Payments required to be made under Contract Resource Obligations shall not be subject to
acceleration.
Nothing in this section 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 existing facilities and from treating those payments as Operation and Maintenance
Costs of the System. Nothing in this section 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 make payments with
respect thereto, such payments constituting a lien and charge on Net Revenue subordinate to that
of Parity Bonds.
ARTICLE V
COVENANTS
Section 5.1 Pledge, Lien Position of Bondowners. The Net Revenue of the System,
Assessment Income, and money in the Bond Fund are hereby pledged to the repayment of the
Parity Bonds. The amounts so pledged to be paid by this ordinance out of the Net Revenue of the
System and Assessment Income into the Bond Fund are hereby declared to be a prior lien and
charge upon the Gross Revenue of the System superior to all other charges of any kind or nature
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except for the Operation and Maintenance Costs of the System, except that amounts so pledged
are equal in rank to the lien and charge thereon heretofore made to pay and secure the payment of
the principal of and interest on the Outstanding Parity Bonds and which may hereafter be made to
pay and secure the payment of the principal of and interest on any Future Parity Bonds.
Section 5.2 General Covenants. The City hereby covenants and agrees with the owner
and holder of each of the Bonds for so long as the same remain outstanding as follows:
(a) The City covenants that it will establish, maintain and collect rates and
charges for water and sanitary sewage collection and disposal service in an amount to provide Net
Revenue together with Assessment Income in amounts necessary to at least equal the Coverage
Requirement. For the purpose of meeting the requirement of this paragraph there may be added
to Net Revenue for any calendar year any amount withdrawn from the Rate Stabilization Account
and credited to Gross Revenue as provided in Section 4.5 of this ordinance. There shall be
subtracted from Net Revenue for any calendar year any amounts in such year withdrawn from the
Revenue Fund and deposited into the Rate Stabilization Account in such calendar year.
The failure to collect Gross Revenue in any fiscal year sufficient to comply with the
covenant contained in this subsection shall not constitute an event of default if the City, before the
90th day of the following fiscal year, both (1) employs a Professional Utility Consultant to
recommend changes in the City's rates which are estimated to produce Gross Revenue sufficient
(once the rates recommended by the Professional Utility Consultant have been imposed by the
City) to meet the requirements of this subsection; and (2) imposes rates at least as high as those
recommended by such professional utility consultant at the time or times so recommended.
(b) The City shall determine by March 1 of each year all Assessments which
have become delinquent during the preceding calendar year and bring the necessary actions of
foreclosure upon the property against which such Assessments were levied by June 1 of such year
or, if later, the earliest date permitted by law. The City shall promptly take action to enforce the
payment of delinquent service charges by such means as are legally available.
(c) The City will at all times maintain and keep the System in good repair,
working order and condition and will also at all times operate the same and the business in
connection therewith in an efficient manner and at a reasonable cost.
(d) The City will not sell or otherwise dispose of any of the properties of the
System (unless such properties are no longer useful for the operation of such System), unless
provision is made for payment into the Bond Fund of a sum sufficient, together with other money
available therefor, to pay the principal of and interest on all of the outstanding Parity Bonds in
accordance with their terms. The City will not sell or otherwise dispose of the System in its entirety
unless simultaneously with such sale or disposition provision is made for payment into the Bond
Fund of cash or Government Obligations (as now or hereafter defined in chapter 39.53 RCW)
sufficient to pay the principal of and interest on all then outstanding Parity Bonds in accordance
with the terms thereof nor will it sell or otherwise dispose of any part of the useful operating
properties of the System in excess of 5% of the net utility plant of the System unless provision is
made for payment into the Bond Fund of an amount which shall be in at least the same proportion
to the net amount of Parity Bonds outstanding (defined as the total amount of such Parity Bonds
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less the amount of cash and investments in the Bond Fund and accounts therein) that the Net
Revenue from the portion of the System sold or disposed of for the preceding fiscal year bears to
the Net Revenue of the System for the same period.
(e) It will not issue any Future Parity Bonds except that it reserves the right for:
(i) The purpose of acquiring, constructing and installing additions to
and betterments and extensions of, acquiring necessary equipment for, or making necessary repairs
or capital improvements to or replacements of equipment of, the System; or
(ii) The purpose of refunding, exchanging with or purchasing and
retiring prior to their maturity the outstanding revenue bonds or warrants of the City, to issue
Future Parity Bonds and to pledge that payments shall be made out of the Revenue Fund and
Assessment Income into the Bond Fund and Reserve Account or other reserve account to pay and
secure the payment of the principal of and interest on such Future Parity Bonds on a parity with
the payments required to be made out of the Revenue Fund and from Assessment Income into the
Bond Fund and the reserve account therein to pay and secure the payment of the principal of and
interest on the outstanding Parity Bonds upon compliance with the following conditions:
First: That at the time of the issuance of such Future Parity Bonds
there is no deficiency in the Bond Fund and any reserve account therein.
Second: That if there are Assessments levied in any ULID in which
additions and improvements to and extensions of the System will be constructed from the proceeds
of such Future Parity Bonds, the ordinance authorizing such Future Parity Bonds requires that such
Assessments shall be paid into the Bond Fund.
Third: That if there are Assessments pledged to be paid into a
warrant or bond redemption fund for revenue bonds or warrants being refunded by Future Parity
Bonds, the ordinance authorizing the Future Parity Bonds requires such Assessments shall be paid
into the Bond Fund.
Fourth: That the City will covenant in each ordinance authorizing
the issuance of Future Parity Bonds that it will establish, maintain and collect rates and charges
for water and sanitary sewage collection and disposal service for as long as the Bonds and any
Parity Bonds are outstanding in an amount, together with Assessment Income, to at least equal the
Coverage Requirement.
Fifth: That the ordinance providing for the issuance of any such
Future Parity Bonds shall provide for the payment of the principal thereof and interest thereon out
of the Bond Fund and that it will pay into the Reserve Account or such other reserve account out
of the Gross Revenue of the System (or, at the option of the City, out of Assessment Income or
any other funds legally available for such purpose) not less than approximately equal additional
annual future payments so that by five years from the date of such Future Parity Bonds there will
have been paid into the Reserve Account or such other reserve account an amount which, with the
money already on deposit therein, will be equal to the Maximum Annual Debt Service, the Reserve
Account Requirement or such other reserve account requirement, as applicable.
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Sixth: That at the time of the issuance of such Future Parity Bonds
the City shall have on file in the office of the Finance Director (A) a certificate executed by a
Professional Utility Consultant licensed to practice in the State and experienced in the installation
and operation of municipal utilities or a certified public accountant, or (B) a certificate signed by
the Finance Director.
The certificate of the Professional Utility Consultant or a certified public accountant, shall
set forth that the net revenue of the System for a period of any 12 months out of the 24 months
immediately preceding the month of delivery of such Future Parity Bonds, plus his or her estimate
of the annual net revenue to be derived by the City from the operation of any additions to and
betterments and extensions of the System to be acquired, constructed and installed out of the
proceeds of the sale of such Future Parity Bonds (the "Adjusted Net Revenue"), will equal at least
the Coverage Requirement.
The words "net revenue" as first used in subparagraph Sixth above shall mean the Gross
Revenue of the System for the 12 month period after deducting therefrom the amount expended
for the normal Operation and Maintenance Costs of the System for such 12 months, but before
depreciation and before any transfer of moneys to any funds of the City other than the Bond Fund,
and taxes or payments in lieu of taxes to the City. If there were any customers added to the System
during such 12 month period, such net revenue may be computed on the basis that such customers
were customers of the System during such period.
The words "annual net revenue" as first used in subparagraph Sixth above shall mean such
Professional Utility Consultant's or such certified public accountant's estimate of the annual Gross
Revenue to be derived by the City from the operation of the additions to and betterments and
extensions of the System acquired, constructed and installed out of the proceeds of the sale of such
additional bonds, based upon an actual count of customers, less his or her estimate of any increased
annual normal operating and maintenance expenses of the System allocable to such additions,
improvements and extensions.
Whenever "net revenue" or "annual net revenue" has been determined as provided in this
subsection, the same shall be increased or decreased on a pro forma basis in the event that there
has been any change in the rates or charges upon which such "net revenue" or "annual net revenue"
was based authorized by the City Council to be effective at least fifteen days prior to the sale of
such Future Parity Bonds.
The certificate of the Finance Director that shall set forth:
(i) the amount of the Net Revenues (based on the City's annual audited
or preliminary financial statements) for any 12 consecutive months of the 24 months prior to the
date of the issuance of such Future Parity Bonds;
(ii) the amount of the Maximum Annual Debt Service thereafter on
account of all Parity Bonds then outstanding and the Future Parity Bonds then to be issued
hereunder; and
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(iii) the percentage derived by dividing the amount shown in (i) above
by the amount shown in (ii) above, and shall state that such percentage is not less than the Coverage
Requirement.
hl the event that such Future Parity Bonds are issued for the sole purpose of refunding a
like principal amount of Parity Bonds, and the average annual amount required for debt service
during the life of said Future Parity Bonds to be issued is less than the average annual amount
required for debt service on the bonds being refunded and the last maturity date of such Future
Parity Bonds to be issued is not later than the last maturity date of the bonds being refunded, then
the certificate required above need not be obtained to permit the issuance of such Future Parity
Bonds.
(f) Nothing herein contained shall prevent the City from issuing revenue bonds
or revenue warrants which are a charge upon the money in the Revenue Fund junior or inferior to
the payments required to be made to pay and secure the payment of the principal of and interest
on the outstanding Parity Bonds or from issuing revenue bonds to refund maturing revenue bonds
for the payment of which moneys are not otherwise available.
Section 5.3 Preservation of Tax Exem-ption for Interest on Bands. The City covenants
that it will take all actions necessary to prevent interest on the Bonds from being included in gross
income for federal income tax purposes, and it will neither take any action nor make or permit any
use of proceeds of the Bonds or other funds of the City treated as proceeds of the Bonds that will
cause interest on the Bonds to be included in gross income for federal income tax purposes. The
City also covenants that it will, to the extent the arbitrage rebate requirements of Section 148 of
the Code are applicable to the Bonds, take all actions necessary to comply (or to be treated as
having complied) with those requirements in connection with the Bonds.
Section 5.4 Post -Issuance Compliance. The Finance Director is authorized and directed
to review and revise the City's written procedures to facilitate compliance by the City with the
covenants in this ordinance and the applicable requirements of the Code that must be satisfied after
the Issue Date to prevent interest on the Bonds from being included in gross income for federal
tax purposes.
Section 5.5 Designation of Bonds as "Qualified Tax -Exempt Obligations." A Series of
Bonds may be designated as "qualified tax-exempt obligations" for the purposes of
Section 265(b)(3) of the Code, if the following conditions are met:
(a) the Series do not constitute "private activity bonds" within the meaning of
Section 141 of the Code;
(b) the reasonably anticipated amount of tax-exempt obligations (other than
private activity bonds and other obligations not required to be included in such calculation) that
the City and any entity subordinate to the City (including any entity that the City controls, that
derives its authority to issue tax-exempt obligations from the City, or that issues tax-exempt
obligations on behalf of the City) will issue during the calendar year in which the Series is issued
will not exceed $10,000,000; and
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(c) the amount of tax-exempt obligations, including the Series, designated by
the City as "qualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the Code
during the calendar year in which the Series is issued does not exceed $10,000,000.
ARTICLE VI
FORM OF BOND
Section 6.1 Bond Fon-n. The Bonds shall be in substantially the following form:
NO.
UNITED STATES OF AMERICA
STATE OF WASHINGTON
CITY OF CAMAS
WATER AND SEWER REVENUE BOND, 2019
319
INTEREST RATE: MATURITY DATE: CUSIP NO.
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
The City of Camas, Washington (the "City"), for value received, hereby promises to pay
to the Registered Owner identified above, or registered assigns, on the Maturity Date identified
above, the Principal Amount indicated above and to pay interest thereon from , 2019, or
the most recent date to which interest has been paid or duly provided for until payment of this
Bond at the Interest Rate set forth above, payable on , 20 , and semiannually thereafter
on the first days of each [June and December]. The principal of and interest on this bond are
payable solely out of the special fund of the City known as the "Water -Sewer Revenue Bond Fund"
("Bond Fund"). Both principal of and interest on this bond are payable in lawful money of the
United States of America. For so long as the bonds of this issue are held in fully immobilized
form, payments of principal and interest thereon shall be made as provided in accordance with the
operational arrangements of The Depository Trust Company ("DTC") referred to in the Blanket
Issuer Letter of Representations from the City to DTC. In the event that the bonds of this issue are
no longer held in fully immobilized form, interest on this bond shall be paid by check or draft
mailed to the Registered Owner at the address appearing on the Bond Register on the 15th day of
the month preceding the interest payment date, and principal of this bond shall be payable upon
presentation and surrender of this bond by the Registered Owner at the principal office at the
principal office of the fiscal agent of the State of Washington (the "Bond Registrar"); provided,
however, that if so requested in writing by the Registered Owner of at least $1,000,000 principal
amount of bonds, interest will be paid by wire transfer on the date due to an account with a bank
located within the United States.
This bond is one of a series of bonds issued under authority of Ordinance No. 19-003
adopted by the City Council on February 19, 2019 (the "Bond Ordinance"), for the purpose of
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financing certain improvements to the water and sewerage system, repaying certain outstanding
Drinking Water State Revolving Fund loans, [funding a reserve account] and paying costs of
issuing the Bonds.
Under the Bond Ordinance, the City is obligated to set aside and pay into the Bond Fund
out of the Gross Revenue of its water and sewer system, including all additions to and betterments
and extensions thereof, certain fixed amounts sufficient to pay the principal of and interest on all
the bonds issued under the Bond Ordinance at any time outstanding as the same shall become due
and payable, all as more fully provided in the Bond Ordinance. The bonds of this issue and other
Outstanding Parity Bonds, as defined in the Bond Ordinance, constitute the only charge against
such Bond Fund.
The amounts so pledged and to be paid into the Bond Fund and the Reserve Account therein
for the purpose of paying and securing the principal of and interest on the bonds, the outstanding
Water and Sewer Revenue and Refunding Bonds, 2015, and any water and sewer revenue bonds
which may hereafter be issued on a parity of lien with the bonds, are hereby declared to be a prior
lien and charge upon such gross revenue superior to all other charges of any kind or nature except
the Operation and Maintenance Costs of the water and sewer system of the City.
The pledge of gross revenue and other obligations of the City under the Bond Ordinance
may be discharged at or prior to the maturity or redemption of the bonds of this issue upon the
making of provision for the payment thereof on the terms and conditions set forth in the Bond
Ordinance.
This Bond is one of a total issue of $_par value of the Bonds, all of like date and
tenor, except as to maturity, redemption provisions and interest rates, all payable from the Bond
Fund and all issued by the City under and pursuant to the laws of the State of Washington and the
Bond Ordinance for the purpose of providing funds to pay the cost of certain capital improvements
to the water and sewer system of the City as specified in the Bond Ordinance.
The Bonds are subject to redemption as provided in the Bond Ordinance.
The Bonds have [not] been designated as "qualified tax-exempt obligations" for purposes
of Section 265(b) of the Internal Revenue Code of 1986.
The City hereby covenants and agrees with the owners of the Bonds to carry out fully all
covenants and meet all obligations of the City as set forth herein and in the Bond Ordinance, and
reference is hereby made to the Bond Ordinance for a complete statement of such covenants.
This Bond shall not become valid or obligatory for any purpose until the certificate of
authentication set forth hereon has been manually signed by the Bond Registrar.
This Bond is interchangeable for Bonds of any Authorized Denomination of an equal
aggregate principal amount, and of the same interest rate and maturity. This Bond is transferable
only upon the registry books of the Bond Registrar by surrender of this certificate to the Bond
Registrar, duly assigned and executed as indicated below. Such exchange or transfer shall be
without cost to the owner or transferee. The City may deem the person in whose name this Bond
is registered to be the absolute owner thereof for the purpose of receiving payment of the principal
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53266588.3
of and interest on such Bond and for any and all other purposes whatsoever. The Bond Registrar
shall not be obligated to transfer or exchange this Bond during the fifteen days preceding any
interest payment date or the date on which notice of redemption of such Bond is to be given nor
after such notice has been given.
It is hereby certified and declared that the Bonds are issued pursuant to and in strict
compliance with the Constitution and laws of the State of Washington and the ordinances of the
City and that all acts, conditions and things required to be done precedent to and in the issuance of
this Bond have happened, have been done and have been performed as required by law.
IN WITNESS WHEREOF, the City has caused this Bond to be signed by the manual or
facsimile signature of its Mayor and attested by the manual or facsimile signature of its City Clerk,
and its corporate seal to be impressed or a facsimile thereof imprinted hereon this day of
, 2019.
ATTEST:.
City Clerk
Date of Authentication:
CITY OF CAMAS, WASHINGTON
am
Mayor
CERTIFICATE OF AUTHENTICATION
This is one of the City of Camas, Washington, Water and Sewer Revenue Bonds, 2019,
dated , 2019, described in the Bond Ordinance.
WASHINGTON STATE FISCAL AGENT
Bond Registrar
an
Authorized Officer
ARTICLE VII
SUPPLEMENTAL ORDINANCES
Section 7.1 Supplemental Ordinances Without Consent of Bond Owners. The City
Council from time to time and at any time may adopt an ordinance supplemental hereto, which
ordinance thereafter shall become a part of this ordinance, for any one or more or all of the
following purposes:
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53266588.3
(a) To add to the covenants and agreements of the City in this ordinance other
covenants and agreements thereafter to be observed, or to surrender any right or power herein
reserved to or conferred upon the City.
(b) To make such provisions for the purpose of curing any ambiguity or of
curing, correcting or supplementing any defective provision contained in this ordinance or in
regard to matters or questions arising under this ordinance as the City Council may deem necessary
or desirable and not inconsistent with this ordinance and which shall not adversely affect the
interests of the Registered Owners of the Bonds.
Any such supplemental ordinance of the City Council may be adopted without the consent
of the Registered Owners of any of the Bonds at any time outstanding, notwithstanding any of the
provisions of Section 7.2 of this Article VII.
Section 7.2 Supplemental Ordinance With Consent of Bond Owners. With the consent
of the Registered Owners of not less than two-thirds in aggregate principal amount of the Parity
Bonds at the time outstanding, the City Council may adopt an ordinance supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating any of the
provisions of this ordinance or of any supplemental ordinance; provided, however, that no such
supplemental ordinance shall:
(a) Extend the fixed maturity of any of the Bonds, or reduce the rate of interest
thereon, or extend the time of payments of interest from their due date, or reduce the amount of
the principal thereof, or reduce any premium payable on the redemption thereof, without the
consent of the holder of each Bond so affected; or
(b) Reduce the aforesaid percentage of holders of Bonds required to approve
any such supplemental ordinance without the consent of the holders of all of the Bonds then
outstanding.
It shall not be necessary for the consent of the Registered Owners under this Section 7.2 to
approve the particular form of any proposed supplemental ordinance, but is shall be sufficient if
such consent shall approve the substance thereof.
Section 7.3 Effect of Supplemental Ordinance. Upon the adoption of any supplemental
ordinance pursuant to the provisions of this Article VII, this ordinance shall be deemed to be
modified and amended in accordance therewith, and the respective rights, duties and obligations
of the City under this ordinance and of all Registered Owners of Bonds outstanding -hereunder
shall thereafter be determined, exercised and enforced thereunder, subject in all respects to such
modification and amendments, and all the terms and conditions of any such supplemental
ordinance shall be deemed to be part of the terms and conditions of this ordinance for any and all
purposes.
Bonds executed and delivered after the execution of any supplemental ordinance adopted
pursuant to the provisions of this Article VII may bear a notation as to any matter provided for in
such supplemental ordinance, and if such supplemental ordinance shall so provide, new bonds so
modified as to conform, in the opinion of the Council, to any modification of this ordinance
contained in any such supplemental ordinance, may be prepared by the City and delivered without
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53266588.3
cost to the holders of the Bonds then outstanding, upon surrender for cancellation of such bonds,
if any, not fully paid, in equal aggregate principal amounts.
ARTICLE VIII
ONGOING DISCLOSURE
Section 8.1 Undertaking to Provide Ongoing: Disclosure. To meet the requirements of
paragraph (b)(5) of Rule 15c2-12, as applicable to a participating underwriter for the Bonds, the
City makes the following written undertaking (the "Undertaking") for the benefit of holders of the
Bonds:
(a) Undertaking to Provide Annual Financial Information and Notice of Listed
Events. The City undertakes to provide or cause to be provided, either directly or through a
designated agent, to the MSRB, in an electronic format as prescribed by the MSRB, accompanied
by identifying information as prescribed by the MSRB:
(i) Annual financial information and operating data of the type included
in the final official statement for the Bonds and described in paragraph (b) ("annual financial
information");
(ii) Timely notice (not in excess of 10 business days after the occurrence
of the event) of the occurrence of any of the following events with respect to the Bonds:
(A) principal and interest payment delinquencies; (B) non-payment related defaults, if material;
(C) unscheduled draws on debt service reserves reflecting financial difficulties; (D) unscheduled
draws on credit enhancements reflecting financial difficulties; (E) substitution of credit or liquidity
providers, or their failure to perform; (F) adverse tax opinions, the issuance by the Internal
Revenue Service of proposed or final determinations of taxability, Notice of Proposed Issue (IRS
Form 5701 — TEB) or other material notices or determinations with respect to the tax status of the
Bonds; (G) modifications to rights of holders of the Bonds, if material; (H) bond calls (other than
scheduled mandatory redemptions of Term Bonds), if material, and tender offers; (I) defeasances;
(J) release, substitution, or sale of property securing repayment of the Bonds, if material; (K) rating
changes; (L) bankruptcy, insolvency, receivership or similar event of the City, as such
"Bankruptcy Events" are defined in Rule 15c2-12; (M) the consummation of a merger,
consolidation, or acquisition involving the City or the sale of all or substantially all of the assets
of the City other than in the ordinary course of business, the entry into a definitive agreement to
undertake such an action or the termination of a definitive agreement relating to any such actions,
other than pursuant to its terms, if material; (N) appointment of a successor or additional trustee
or the change of name of a trustee, if material; (0) incurrence of a financial obligation of the City
or obligated person, if material, or agreement to covenants, events of default, remedies, priority
rights, or other similar terms of a financial obligation of the City or obligated person, any of which
affect security holders, if material; and (P) default, event of acceleration, termination event,
modification of terms, or other similar events under the terms of the financial obligation of the
City or obligated person, any of which reflect financial difficulties. The term "financial obligation"
means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged
as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of
(i) or (ii). The term "financial obligation" shall not include municipal securities as to which a final
official statement has been provided to the MSRB consistent with Rule 15c2-12.
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532GG588.3
(iii) Timely notice of a failure by the City to provide required annual
financial information on or before the date specified in paragraph (b).
(b) Type of Annual Financial Information Undertaken to be Provided. The
annual financial information that the City undertakes to provide in paragraph (a):
(i) Shall consist of (A) annual financial statements prepared (except as
noted in the financial statements) in accordance with applicable generally accepted accounting
principles applicable to local governmental units of the State such as the City, as such principles
may be changed from time to time, which statements may be unaudited, provided, that if and when
audited financial statements are prepared and available they will be provided; (B) principal amount
of Parity Bonds outstanding; (C) debt service coverage for Parity Bonds; and (D) number of
customers of the System; and
(ii) Shall be provided not later than the last day of the ninth month after
the end of each fiscal year of the City (currently, a fiscal year ending December 31), as such fiscal
year may be changed as required or permitted by State law, commencing with the City's fiscal
year ending December 31, 2018; and
(iii) May be provided in a single or multiple documents, and may be
incorporated by specific reference to documents available to the public on the Internet website of
the MSRB or filed with the SEC.
(c) Amendment of Undertaking. This Undertaking is subject to amendment
after the primary offering of the Bonds without the consent of any holder of any Bond, or of any
broker, dealer, municipal securities dealer, participating underwriter, Rating Agency or the MSRB,
under the circumstances and in the manner permitted by Rule 15c2-12. The City will give notice
to the MSRB of the substance (or provide a copy) of any amendment to the Undertaking and a
brief statement of the reasons for the amendment. If the amendment changes the type of annual
financial information to be provided, the annual financial information containing the amended
financial information will include a narrative explanation of the effect of that change on the type
of information to be provided.
(d) Beneficiaries. This Undertaking shall inure to the benefit of the City and
the holder of each Bond, and shall not inure to the benefit of or create any rights in any other
person.
(e) Termination of Undertaking. The City's obligations under this Undertaking
shall terminate upon the redemption, maturity or legal defeasance of all of the Bonds. In addition,
the City's obligations under this Undertaking shall terminate if the provisions of Rule 15c2-12 that
require the City to comply with this Undertaking become legally inapplicable in respect of the
Bonds for any reason, as confirmed by an opinion of Bond Counsel delivered to the City, and the
City provides timely notice of such termination to the MSRB.
(f) Remedy for Failure to Comply with Undertaking. As soon as practicable
after the City learns of any failure to comply with this 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 this Undertaking shall constitute an event of default under this ordinance.
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53266588.3
The sole remedy of any holder of a Bond shall be to take action to compel the City or other
obligated person to comply with this Undertaking, including seeking an order of specific
performance from an appropriate court.
(g) Designation of Official Responsible to Administer Undertaking. The
Finance Director or her designee is the person designated, in accordance with the Bond Ordinance,
to carry out the Undertaking in accordance with Rule 15c2-12, including, without limitation, the
following actions:
(i) Preparing and filing the annual financial information undertaken to
be provided;
(ii) Determining whether any event specified in paragraph (a) has
occurred, assessing its materiality, where necessary, with respect to the Bonds, and preparing and
disseminating any required notice of its occurrence;
(iii) Determining whether any person other than the City is an "obligated
person" within the meaning of Rule 15c2-12 with respect to the Bonds, and obtaining from such
person an undertaking to provide any annual financial information and notice of listed events for
that person required under Rule 15c2-12;
(iv) Selecting, engaging and compensating designated agents and
consultants, including financial advisors and legal counsel, to assist and advise the City in carrying
out this Undertaking; and
(v) Effecting any necessary amendment of this undertaking.
ARTICLE IX
SALE OF BONDS, APPROVAL OF OFFICIAL STATEMENT, DEFEASANCE,
MISCELLANEOUS
Section 9.1 Sale of the Bonds Delivery of Bonds. The City Council has determined
that it is in the best interest of the City to delegate to the Finance Director, or the City Administrator
in her absence (each a "Designated Representative"), the authority to approve the Final Terms of
each Series of Bonds, with such additional terms and covenants as the Designated Representative
deems advisable, within the following parameters:
(a) The Bonds may be issued in one or more Series, and the aggregate principal
amount of the Bonds does not exceed $25,000,000;
(b) One or more rates of interest may be fixed for the Bonds, and no rate of
interest for any maturity of the Bonds may exceed 6.00%;
(c) The aggregate true interest cost to the City for each Series of the Bonds does
not exceed 5.00%,-
(d)
.00%;(d) The aggregate purchase price for each Series of the Bonds shall not be less
than 95% or more than 125% of the aggregate stated principal amount of the Bonds;
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53266588.3
(e) The Bonds shall be issued subject to optional and mandatory redemption
provisions, including designation of Term Bonds, if any;
(f) The Bonds shall be dated as of the date of their delivery, which date and
time for the issuance and delivery of the Bonds is not later than December 31, 2019;
(g) Interest shall be payable at fixed rates semiannually, principal shall be
payable annually and the final maturity shall not be later than December 1, 2047; and
In determining the number of series, the series designation and other Final Terms of each
Series of the Bonds, the Designated Representative, in consultation with other City officials and
staff and advisors, shall take into account those factors that, in her/his judgment, will result in the
lowest true interest cost on the Bonds to their maturity, including, but not limited to current
financial market conditions and current interest rates for obligations comparable to the Bonds.
The Bonds shall be sold by negotiated sale to the Purchaser. Subject to the terms and
conditions set forth in this Section 9. 1, the Designated Representative is hereby authorized to
execute the Bond Purchase Agreement on behalf of the City upon her/his determination that the
conditions of this Section 9.1 have been met.
Section 9.2 Preparation, Execution and Dclivei of the Bands. The Bonds will be
prepared at City expense and will be delivered to the Purchaser in accordance with the Bond
Purchase Agreement, together with the approving legal opinion of Bond Counsel regarding the
Bonds.
Section 9.3 PreliminaLy Official Statement Deemed Final. The Designated
Representative shall review and, if acceptable to her or him, approve the preliminary Official
Statement prepared in connection with each sale of a Series of the Bonds to the public or through
a Purchaser as a placement agent. For the sole purpose of the Purchaser's compliance with
paragraph (b)(1) of Rule 15c2-12, if applicable, the Designated Representative is authorized to
deem that preliminary Official Statement final as of its date, except for the omission of information
permitted to be omitted by Rule 15c2-12. The City approves the distribution to potential
purchasers of the Bonds of a preliminary Official Statement that has approved by the Designated
Representative and been deemed final, if applicable, in accordance with this subsection.
Section 9.4 Am royal of Final Official Statement. The City approves the preparation of
a final Official Statement for each Series of the Bonds to be sold to the public in the form of the
preliminary Official Statement that has been approved and deemed final in accordance with
subsection (a), with such modifications and amendments as the Designated Representative deems
necessary or desirable, and further authorizes the Designated Representative to execute and deliver
such final Official Statement to the Purchaser if required under Rule 15c2-12. The City authorizes
and approves the distribution by the Purchaser of the final Official Statement so executed and
delivered to purchasers and potential purchasers of a Series of the Bonds.
Section 9.5 Refunding or Defeasance of die Bonds. The City may issue refunding
bonds pursuant to State law or use money available from any other lawful source to carry out a
refunding or defeasance plan, which may include (a) paying when due the principal of and interest
on any or all of the Bonds (the "defeased Bonds"); (b) redeeming the defeased Bonds prior to their
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maturity; and (c) paying the costs of the refunding or defeasance. If the City sets aside in a special
trust fund or escrow account irrevocably pledged to that redemption or defeasance (the "trust
account"), money and/or Govermnent Obligations maturing at a time or times and bearing interest
in amounts sufficient to redeem, refund or defease the defeased Bonds in accordance with their
terms, then all right and interest of the Owners of the defeased Bonds in the covenants of this
ordinance and in the funds and accounts obligated to the payment of the defeased Bonds shall
cease and become void. Thereafter, the Owners of defeased Bonds shall have the right to receive
payment of the principal of and interest on the defeased Bonds solely from the trust account and
the defeased Bonds shall be deemed no longer outstanding. In that event, the City may apply
money remaining in any fund or account (other than the trust account) established for the payment
or redemption of the defeased Bonds to any lawful purpose.
Unless otherwise specified by the City in a refunding or defeasance plan, notice of
refunding or defeasance shall be given, and selection of Bonds for any partial refunding or
defeasance shall be conducted, in the manner prescribed in this ordinance for the redemption of
Bonds.
Section 9.6 General Authorization and Ratification. The Mayor, City Administrator,
Finance Director and other appropriate officers of the City are severally authorized to take such
actions and to execute such documents as in their judgment may be necessary or desirable to carry
out the transactions contemplated in connection with this ordinance, and to do everything
necessary for the prompt delivery of each Series of the Bonds to the Purchaser thereof and for the
proper application, use and investment of the proceeds of the Bonds. All actions taken prior to the
effective date of this ordinance in furtherance of the purposes described in this ordinance and not
inconsistent with the terms of this ordinance are ratified and confirmed in all respects.
Section 9.7 Severability. The provisions of this ordinance are declared to be separate
and severable. If a court of competent jurisdiction, all appeals having been exhausted or all appeal
periods having run, finds any provision of this ordinance to be invalid or unenforceable as to any
person or circumstance, such offending provision shall, if feasible, be deemed to be modified to
be within the limits of enforceability or validity. However, if the offending provision cannot be
so modified, it shall be null and void with respect to the particular person or circumstance, and all
other provisions of this ordinance in all other respects, and the offending provision with respect to
all other persons and all other circumstances, shall remain valid and enforceable.
Section 9.8 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.
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53266588.3
PASSED by the City Council and APPROVED by the Mayor of the City of Camas,
Washington, at an open public meeting thereof, this 191h day of February, 2019.
Mayor
ATTEST:
r
,cpt"—
City Clerk
APPROVED AS TO FORM:
Bona CoAsel
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53266588.3
CERTIFICATION
I, the undersigned, City Clerk of the City of Camas, Washington (the "City"), hereby
certify as follows:
1. The attached copy of Ordinance No. 19-003 (the "Ordinance") is a full, true and
correct copy of an ordinance duly passed at a regular meeting of the City Council of the City held
at the regular meeting place thereof on February 19, 2019, as that ordinance appears on the minute
book of the City.
2. The Ordinance will be in full force and effect five days after publication of a
summary of the Ordinance in the City's official newspaper, which publication date is FebruaryU,
2019.
3. A quorum of the members of the City Council was present throughout the meeting
and a majority of the members voted in the proper manner for the passage of the Ordinance.
Dated: February 19, 2019.
53266588.3
CITY OF CAMAS, WASHINGTON
City Clerk