HomeMy WebLinkAbout4393 CITY OF BREMERTON, WASHINGTON
AN ORDINANCE of the City of Bremerton, Washington,
relating to the waterworks utility of the City, including
the sewerage system as a part thereof; providing for the
issuance of $9,990,000 principal amount of Water and
Sewer Refunding Revenue Bonds, 1992, Series A, of the
City for the purpose of providing a part of the funds to
refund, pay and retire a portion of the outstanding Water
and Sewer Revenue Refunding Bonds, 1985, and $3,000,000
principal amount of Water and Sewer Improvement Revenue
Bonds, 1992, Series B, of the City to pay part of the
costs to carry out the system or plan of additions and
improvements to and betterments and extensions of the
waterworks utility specified and adopted by Ordinance No.
3887, as amended by Ordinances Nos. 3948, 4015, 4053,
4147, 4241 and 4363; fixing the dates, forms, terms,
interest rates, maturities and covenants of such bonds;
providing for and authorizing the purchase of certain
obligations out of the proceeds of the sale of such bonds
and for the use and application of the money to be
derived from such investments; authorizing the execution
of a contract with a refunding trustee or escrow agent;
providing for the payment and redemption of the
outstanding bonds to be refunded; providing for bond and
reserve insurance and the payment of the costs of the
refunding, issuance of the bonds and acquisition of the
insurance policies; approving the sale and providing for
the delivery of such bonds to Lehman Brothers Division of
Shearson Lehman Brothers Inc. of Seattle, Washington; and
declaring an emergency.
WHEREAS, the City of Bremerton, Washington (the "City"), now
owns, maintains and operates a combined waterworks and sewerage
system (the "System"), which System has from time to time required
various additions, improvements and extensions; and
WHEREAS, pursuant to Ordinance No. 3989, the City issued its
$18,025,000 par value Water and Sewer Revenue Refunding Bonds,
1985, dated November 1, 1985 (the "Outstanding 1985 Bonds"), and,
by Section 12 of that ordinance reserved the right to issue
additional water and sewer revenue bonds on a parity of lien with
the 1985 Bonds if the following conditions were met and complied
with at the time of issuance of those bonds:
"(a) At the time of issuance of such Future Parity
Bonds, there shall not be a deficiency in either the
Principal and Interest Account or the Reserve Account in
the Bond Fund;
"(b) The ordinance authorizing the issuance of such
Future Parity Bonds shall provide for the creation of a
sinking fund account in the Bond Fund for any Term Bonds
to be issued and for regular payments to be made into
such account for the payment of the principal of such
Term Bonds on or before their maturity, or, as an
alternative, the mandatory redemption of such Term Bonds
prior to their maturity date from money in the Principal
and Interest Account.
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"(c) The ordinance authorizing any Future Parity
Bonds shall provide for the payment of the principal of
and interest thereon out of the Bond Fund and shall
further provide for the payment from the Net Revenue of
the System in substantially equal monthly payments an
amount which within a period of five years from the date
of issuance of such Future Parity Bonds will fund fully
the Reserve Requirement of such Future Parity Bonds
subject to the City's right to fund all or a portion of
the Reserve Requirement with a Reserve Fund Instrument or
in whole or in part out of the proceeds of such Future
Parity Bonds; except that in the event such Future Parity
Bonds are issued for the purpose of refunding outstanding
Bonds and/or Future Parity Bonds, the amount of such
reserve allocated to such bonds being so refunded shall
be retained or used as a reserve for such refunding
Future Parity Bonds or used to retire outstanding Bonds
or outstanding Future Parity Bonds pursuant to the
refunding plan, which reserve amount shall be replaced in
the same manner and within the same time as required for
additional Future Parity Bonds, or such reserve may
remain in the Reserve Account to be used as the reserve
for remaining bonds payable from the Bond Fund; and
"(d) At the time of the issuance of such Future
Parity Bonds, the City shall have on file a certificate
from an independent, licensed professional engineer
experienced in the design, construction and operation of
municipal utilities, or a certified public accountant,
showing that in his or her professional opinion the
estimated Gross Revenue of the System in any future year,
after deducting Operating and Maintenance Expenses, will
be equal to the Coverage Requirement. A copy of such
certificate shall be provided, upon filing, with the Bond
Insurer. The Coverage Requirement may be waived or
modified solely with the written consent of the Bond
Insurer. However, if Future Parity Bonds proposed to be
so issued are for the sole purpose of refunding
outstanding bonds payable from the Bond Fund, such
certification of coverage shall not be required if the
Annual Debt Service in each year for the refunding bonds
is not increased over the amount 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.
"The engineer's certificate, in estimating the Gross
Revenue of the System available for debt service, shall
use the historical Gross Revenue of the System for any
twelve consecutive months out of the twenty-four months
immediately preceding the month of delivery of the Future
Parity Bonds. Such Gross Revenue may be adjusted to
reflect any changes in rates in effect and being charged
or expressly committed by ordinance of the City Council
to be made in the future; may include income derived from
customers of the System that have become customers during
the twelve consecutive month period o~ thereafter
adjusted to reflect one year's net revenue from such
customers; may include revenues from any customers to be
connected to the System who have paid the required
connection charges; may include the revenue to be derived
from any person, firm, corporation or municipal
corporation under any executed contract for water and/or
sewer service which revenue was not included in the
historical Gross Revenue of the System; and may include
the engineer's estimate of the Gross Revenue to be
derived by the City from customers with improved property
available to connect to any additions to and improvements
and extensions of the System to be paid for out of the
proceeds of the sale of the additional Future Parity
Bonds or other additions to and improvements and
extensions of the System then under construction and not
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fully connected to the facilities of the System when such
additions, improvements and extensions are completed.
"Actual or reasonably anticipated changes in the
Operating and Maintenance Expenses subsequent to such
twelve-month period shall be added or deducted, as is
applicable. . ."
and
WHEREAS, the City presently has outstanding $10,025,000
principal amount of the Outstanding 1985 Bonds maturing in various
amounts on September 1 in each of the years 1996 through 2001,
inclusive, and bearing interest at various rates from 8.60% to
9.20% per annum (the "1985 Refunded Bonds"); and
WHEREAS, by Ordinance No. 3989 the City reserved the right to
redeem the Outstanding 1985 Bonds on September 1, 1995, at a price
of 101% of par; and
WHEREAS, the City Council finds that it is in the City's best
interest to advance refund the 1985 Refunded Bonds by providing for
the payment of the interest on the 1985 Refunded Bonds when due up
to and including September 1, 1995, and, on September 1, 1995, to
call, pay and redeem all of the outstanding 1985 Refunded Bonds at
a price of 101% of par to effect a significant savings by the
difference between the principal and interest costs over the life
of the refunding bonds authorized herein and the principal and
interest costs over the life of the 1985 Refunded Bonds but for
such refunding, which refunding will be effected by:
(a) The issuance of the refunding bonds authorized by
this ordinance, the transfer of certain money from
the bond redemption fund for the 1985 Refunded
Bonds, and the payment of the costs of refunding
bond issuance and refunding; and
(b) The payment of the interest on the 1985 Refunded
Bonds when due up to and including September 1,
1995, and, on September 1, 1995, the call, payment
and redemption of all of the outstanding 1985
Refunded Bonds at a price of 101% of par;
and
WHEREAS, in order to effect such refunding in the manner that
will be most advantageous to the City it is found necessary and
advisable that certain Acquired Obligations (hereinafter defined)
bearing interest and maturing at such time or times as necessary to
accomplish the refunding as aforesaid be purchased out of a portion
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of the proceeds of the refunding bonds authorized by this
ordinance; and
WHEREAS, the City Council has determined that it is necessary
and in the best interest of the City that a portion of the system
or plan of additions and improvements to and betterments and
extensions of the System specified and adopted by Ordinance No.
3887, as amended by Ordinances Nos. 3948, 4015, 4053, 4147, 4241
and 4363, be carried out; and
WHEREAS, the City Council has determined that it is necessary
to issue and sell the water and sewer refunding revenue bonds
authorized by this ordinance to provide a part of the funds
necessary to redeem the 1985 Refunded Bonds and pay the costs of
the refunding and issuance and sale of those bonds, and to issue
and sell the water and sewer improvement revenue bonds to provide
part of the funds necessary to carry out a portion of that system
or plan and to pay the costs of issuance of those bonds, and Lehman
Brothers Division of Shearson Lehman Brothers Inc. has offered to
purchase such bonds on the terms and conditions hereinafter set
forth;
WHEREAS, it is in the best interest of the City and its
ratepayers for the City to obtain bond insurance for all of the
bonds authorized by this ordinance, and to fund the reserve for
those bonds with a reserve insurance policy which will also be used
as a substitute for the required reserve for the nonrefunded 1985
Bonds; NOW, THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BREMERTON,
WASHINGTON, AS FOLLOWS:
Section 1. Definitions. As used in this ordinance the
following words shall have the following meanings:
"Acquired Obligations" means those United States Treasury
Certificates of Indebtedness, Notes and Bonds, State and Local
Government Series, or other direct, non-callable obligations of the
United States Government.
"Annual Debt Service" means, in any year, that year's total of
principal and interest requirements for the then outstanding bonds
(except the principal maturity of Term Bonds) to which the term
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Annual Debt Service refers, plus the principal of any bonds subject
to a mandatory prior redemption or mandatory sinking fund payment
for that year, less all capitalized interest payable that year from
such bonds.
"Average Annual Debt Service" means the sum of the Annual Debt
Service for the remaining years to the last scheduled maturity of
the applicable issue or series of the 1985 Bonds, the Bonds and
Future Parity Bonds divided by the number of those years.
"Bond Fund" means the Water and Sewer Revenue Bond Fund, 1985,
created by Ordinance No. 3989 for the purpose of paying and
securing the principal of and interest on the 1985 Bonds, the Bonds
and any Future Parity Bonds.
"Bond Insurance Policy" means the municipal bond new issue
insurance policy issued by the Bond Insurer and guaranteeing the
timely payment of principal of and interest on the Bonds.
"Bond Insurer" means Financial Guaranty Insurance Company, a
New York stock insurance company, or any successor thereto.
"1985 Bond Insurer" means Financial Guaranty Insurance
Company, a New York stock insurance company, or any successor
thereto.
"Bonds" means, collectively, the $9,990,000 par value Water
and Sewer Refunding Revenue Bonds, 1992, Series A, and the
$3,000,000 par value Water and Sewer Improvement Revenue Bonds,
1992, Series B, authorized to be issued by this ordinance.
"1985 Bonds" means the outstanding Water and Sewer Revenue
Refunding Bonds, 1985, of the City maturing on September 1 of each
of the years 1993 through 1995, inclusive, issued pursuant to
Ordinance No. 3989.
"1985 Refunded Bonds" means the outstanding Water and Sewer
Revenue Refunding Bonds, 1985, of the City maturing on September 1
of each of the years 1996 through 2001, inclusive, issued pursuant
to Ordinance No. 3989.
"Bond Registrar" means the fiscal agencies of the State of
Washington in Seattle, Washington, and New York, New York, as the
same may be designated from time to time.
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"City" means the City of Bremerton, Washington, a first class
city of the State of Washington.
"Coverage Requirement" means Net Revenue of the System at
least equal to 1.30 times the actual Annual Debt Service on all
1985 Bonds, Bonds and any Future Parity Bonds plus any additional
necessary to make up any deficiency in the Reserve Account within
twelve months. For purposes of determining the Coverage
Requirement for the issuance of Future Parity Bonds with respect to
variable rate indebtedness, such debt shall be assumed to bear
interest at a fixed rate equal to the higher of 9.2% and the
highest variable rate borne by outstanding variable rate debt
issued during the preceding 24 months, or if no variable rate debt
is outstanding at the time of calculation but is then proposed to
be issued, 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 on the variable rate
debt to be issued.
"Current Water Fund" means the fund of the City of that name
heretofore created into which fund shall be paid all Gross Revenue
of the System.
"Future Parity Bonds" means any and all revenue bonds of the
City issued after the date of the Bonds pursuant to the provisions
of Section 12 of Ordinance No. 3989, the payment of the principal
of and interest on which constitutes a lien and charge upon the
Gross Revenue of the System on a parity with the lien and charge
upon such Gross Revenue for the 1985 Bonds and the Bonds.
"Government Obligations" means noncallable direct obligations
of the United States of America.
"Gross Revenue of the System" means all the earnings and
revenue received by the System from any source whatsoever,
including from the sale of forest products from System-owned lands,
except general ad valorem taxes, grants from the state, federal or
local governments, earnings in any refunded bond escrow account or
fund, gifts to the System for capital purposes, proceeds from the
sale of City or System property, and proceeds of City or System
obligations.
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"Maximum Annual Debt Service" means the maximum amount of
Annual Debt Service which shall become due in any future year on
any outstanding 1985 Bonds, Bonds and Future Parity Bonds.
"Net Revenue of the System" means the Gross Revenue of the
System less Operating and Maintenance Expenses.
"Operating and Maintenance Expenses" 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 (other than payments out of
proceeds of the Bonds or Future Parity Bonds) of premiums for
insurance on the System, and any State-imposed taxes, and also
including all payments made to another agency for treatment or
disposal of sewerage or acquisition of water, but excluding
depreciation and amortization, and any City-imposed utility taxes
or payments in lieu of taxes payable from the Gross Revenue of the
System.
"Permitted Investments" means the following to the extent the
same are legal for the investment of money of the City: (1) bonds,
notes and other evidences of direct indebtedness of the United
States of America and securities unconditionally guaranteed as to
the timely payment of principal and interest by the United States
of America ("Government Obligations"); (2) obligations of the
Federal National Mortgage Association, the Federal Home Loan
Mortgage Corporation, the Government National Mortgage Association,
Federal Home Loan Banks, or the Export-Import Bank of the United
States; (3) direct obligations of, or obligations unconditionally
guaranteed by, any state of the United States, or any subdivision,
agency, instrumentality or authority thereof rated Aa3 or better by
Moody's Investors Service ("Moody's") and AA- or better by Standard
and Poor's Corporation ("S&P"); (4) commercial paper rated Prime-1
by Moody's and A-i+ by S&P; (5) deposits with any federally-, or
state-, chartered savings and loan association which has combined
capital, surplus and undivided profits of not less than $3 million
if the principal plus interest to accrue over the term of the
deposit is fully insured by FSLIC or secured by instruments
described in (1), (2) and (3) above; (6) deposits with any
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federally-, or state-, chartered commercial bank, the deposits of
which are insured by the FDIC and which (i) has, or is the lead
bank of a parent holding company which has, unsecured, uninsured
and unguaranteed obligations which are rated Aa2 or better by
Moody's and AA or better by S&P, or (ii) has combined capital,
surplus and undivided profits of not less than $3 million if the
principal plus interest to accrue over the term of the deposit is
fully insured by the FDIC or secured by instruments described in
(1), (2) and (3) above; (7) investments in a money market or other
fund, the investments of which fund are exclusively in obligations
or. securities described in subsections (1), (2) and (3) above;
(8) repurchase agreements with a registered broker/dealer subject
to the Securities Investors' Protection Corporation Liquidation in
the event of insolvency, or any commercial bank (A) whose unsecured
indebtedness is rated A2 or better by Moody's or A or better by
S&P, or (B) which is the lead bank of a parent bank holding company
whose unsecured indebtedness is rated A2 or better by Moody's and
A or better by S&P, or (C) having a combined capital, surplus and
undivided profits of not less than $100 million and acceptable to
the Trustee, which repurchase agreement shall provide that:
(i) the repurchase obligation of the bank is
collateralized by the securities described in (1) above,
themselves which shall be held by the Trustee (unless the
Trustee is obligated under the repurchase agreement) or
third party which is a Federal Reserve Bank or a
commercial bank with capital, surplus and undivided
profits of not less than $50 million and the Trustee
shall have received written confirmation from that third
party that it holds those securities for the benefit of
the City;
(ii) a perfected security interest in favor of the
Trustee in the securities has been created under the
Uniform Commercial Code or pursuant to the book entry
procedures described in 31 C.F.R. 306.1 et seq. or 31
C.F.R. 350.0 et seq.;
(iii) the securities on the date of execution of the
repurchase agreement have a fair market value of at least
100% of the amount of the repurchase obligation,
including both principal and interest; and
(iv) the repurchase obligation is to be performed
within 30 days of the date described in (iii) above, or
throughout the term of the repurchase agreement the
securities have a fair market value equal to at least
100% of the amount of the repurchase obligation; or
(9) an investment agreement approved by the Bond Insurer with
(a) an insurance company with unsecured, uninsured and unguaranteed
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by S&P, or (B) a commercial bank (i) with unsecured, uninsured and
unguaranteed obligations rated Aa2 or better by Moody's and AA or
better by S&P, respectively, or (ii) which is the lead bank of a
bank holding company whose unsecured, uninsured and unguaranteed
obligations are rated Aa2 or better by Moody's and AA or better by
S&P, but only if such agreement shall provide that it is not
subordinated to any other obligations of such insurance company or
banking institution and the Trustee shall receive an opinion of
nationally recognized bond counsel that such agreement is an
enforceable obligation of such insurance company or banking
institution.
The above investments shall be valued as frequently as deemed
necessary by the Bond Insurer and the City, in any event not less
than quarterly, at the market value thereof.
"Plan of Additions" means the system or plan of additions and
improvements to and betterments and extensions of the System
specified and adopted by Ordinance No. 3887, as amended by
Ordinances Nos. 3948, 4015, 4053, 4147, 4241 and 4363.
"Principal and Interest Account" means the account of that
name created in the Bond Fund by Ordinance No. 3989 for the payment
of the principal of and interest on the 1985 Bonds, the Bonds and
any Future Parity Bonds.
"Refunding Plan" means:
(a) The placement of sufficient proceeds of the
Series A Bonds which, with other money of the City
transferred from the Bond Fund, will acquire the Acquired
Obligations to be deposited with cash with the Refunding
Trustee;
(b) The payment of the interest on the 1985
Refunded Bonds when due up to and including September 1,
1995, and, on September 1, 1995, the call, payment and
redemption of all of the outstanding 1985 Refunded Bonds
at 101% of par; and
(c) The payment of the costs of issuing the
Series A Bonds and carrying out the Refunding Plan.
"Refunding Trust Contract" means a Refunding Trust Contract
between the City and the Refunding Trustee providing for carrying
out the Refunding Plan, and may be a Refunding Escrow Contract
rather than a Refunding Trust Contract.
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"Refunding Trustee" or "Refunding Escrow Agent" means Puget
Sound National Bank of Tacoma, Washington, or any successor trustee
or escrow agent.
"Reserve Account" means the account of that name created in
the Bond Fund by of Ordinance No. 3989 for the purpose of securing
the payment of the principal of and interest on the 1985 Bonds, the
Bonds and any Future Parity Bonds.
"Reserve Account Instrument" means, for the Bonds the Debt
Service Reserve Fund Policy issued by Financial Guaranty Insurance
Company and for Future Parity Bonds means any of the following:
A surety bond or insurance policy issued to the Bond
Registrar as agent of the bondowners, by a company
licensed to issue an insurance policy guaranteeing the
timely payment of debt service on the Bonds (a "Municipal
bond insurer") if the claims paying ability of the
insurer thereof shall be rated "AAA" or Aaa" by S&P or
Moody's, respectively.
A surety bond or insurance policy issued to the Bond
Registrar, as agent of the bond owners, by an entity
other than a municipal bond insurer if the form and
substance of such instrument and the issuer thereof shall
be approved by the Bond Insurer.
An unconditional irrevocable letter of credit issued to
the Bond Registrar, as agent of the bondowners, by a bank
if the issuer thereof is rated at least "AA" by S&P. The
letter of credit shall be payable in one or more draws
upon presentation by the beneficiary of a sight draft
accompanied by its certificate that it then holds
insufficient funds to make a required payment of
principal or interest on the bonds. The draws shall be
payable within two days of presentation of the sign
draft. The letter of credit shall be for a term of not
less than three years. The issuer of the letter of
credit shall be required to notify the City and the Bond
Registrar, not later than 30 months prior to the stated
expiration date of the letter of credit, as to whether
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such expiration date shall be extended, and if so, shall
indicate the new expiration date. If such notice
indicates that the expiration date shall not be extended,
the City shall deposit in the Reserve Fund an amount
sufficient to cause the cash or permitted investments on
deposit in the Reserve Fund together with any other
qualifying credit instruments, to equal the Reserve
Requirement on all outstanding Bonds, such deposit to be
paid in equal installments on at least a semiannual basis
over the remaining term of the letter of credit, unless
the Reserve Account Instrument is replaced by a Reserve
Account Instrument meeting the requirements in any of the
above. The letter of credit shall permit a draw in full
not less than two weeks prior to the expiration or
termination of such letter of credit if the letter of
credit has not been replaced or renewed.
The Reserve Account Instrument obtained by the City must be equal
to part or all of the Reserve Requirement for any Bond or Future
Parity Bonds then outstanding for which such instrument is
obtained. The use of a Reserve Account Instrument in the future is
subject to the conditions set forth in Section 11 of this
ordinance.
"Reserve Instrument and Bond Policy Costs" means draws against
the Bond Insurance Policy or Reserve Account Instrument, expenses
and accrued interest.
"Reserve Insurer" means Financial Guaranty Insurance Company,
a New York stock insurance company.
"Reserve Requirement" means:
(1) For the Bonds, the difference between the lesser of
the Maximum Annual Debt Service or 125% of the Average Annual
Debt Service on the 1985 Bonds and the lesser of the Maximum
Annual Debt Service or 125% of the Average Annual Debt Service
on the 1985 Bonds and the Bonds.
(2) For any issue of Future Parity Bonds, the lesser of
the Maximum Annual Debt Service or 125% of the Average Annual
Debt Service on the then outstanding 1985 Bonds, Bonds, any
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Future Parity Bonds theretofore issued and outstanding, and
such issue of Future Parity Bonds. Such amount shall be
accumulated within five years of the date of issuance of the
proposed Future Parity Bonds and, to the extent it is not
capitalized as a part of such Future Parity Bonds, shall be
deposited in approximately equal annual payments commencing
one year after the date of issuance of such Future Parity
Bonds.
(3) For purposes of calculating the Reserve Requirement
for the issuance of Future Parity Bonds bearing interest at a
variable rate, the requirement shall be the lesser of 11% per
annum and the highest rate permitted, in the opinion of bond
counsel, consistent with maintaining the tax-exempt status of
the Bonds and the Future Parity Bonds.
"Series A Bonds" means the $9,990,000 par value Water and
Sewer Refunding Revenue Bonds, 1992, Series A, authorized to be
issued by this ordinance.
"Series B Bonds" means the $3,000,000 par value Water and
Sewer Improvement Revenue Bonds, 1992, Series B, authorized to be
issued by this ordinance.
"System" means the existing combined water and sewerage
systems of the City, together with any storm drainage system or
refuse disposal system hereafter combined therewith, as the same
may be added to, improved and extended for as long as any of the
Bonds and any Future Parity Bonds are outstanding.
"Term Bond Maturity Year" means any year in which Term Bonds
are scheduled to mature.
"Term Bonds" means any Bonds or Future Parity Bonds of any
single issue or series designated as Term Bonds in the ordinance
authorizing the issuance of Future Parity Bonds.
Section 2. Plan of Additions. The City orders the carrying
out of the portion of the Plan of Additions more particularly
described in Exhibit A attached hereto and made a part hereof by
this reference (the "Improvements").
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Section 3. Findinqs Reqardinq Parity Provisions and
Determination Reqarding Lien Position. The City Council finds
that:
(a) There is no deficiency in either the Principal
and Interest Account or the Reserve Account in the Bond
Fund;
(b) Provision is made in Section 10 of this
ordinance for the payment of principal of and interest on
the Bonds from the Principal and Interest Account and for
funding the Reserve Requirement for the Bonds in the
Reserve Account with a Reserve Account Instrument.
(c) There will be on file on the date of the
delivery of the Series B Bonds to the initial purchaser
thereof a certificate of an independent, licensed
professional engineer or a certified public accountant
that the estimated Gross Revenue of the System, after
deducting Operating and Maintenance Expenses, will meet
the Coverage Requirement. The Annual Debt Service of the
Series A Bonds is not more than the Annual Debt Service
for the 1985 Refunded Bonds, and the maturities of the
Series A Bonds do not extend beyond the maturities of the
1985 Refunded Bonds.]
The City Council has determined that all of the conditions of
Section 12 of Ordinance No. 3989 will have been met and complied
with on the date of delivery of the Bonds to the initial purchaser
thereof and that the Bonds shall be issued on a parity of lien with
the 1985 Bonds.
Section 4. Description of Bonds.
(a) Series A Bonds. For the purpose of paying the cost of
carrying out the Refunding Plan and paying the costs of issuance
and sale of the Series A Bonds, the City shall issue the Series A
Bonds in the principal amount of $9,990,000 The Series A Bonds
shall be designated Water and Sewer Refunding Revenue Bonds, 1992,
Series A; shall be dated October 1, 1992; shall be in the
denomination of $5,000 or any integral multiple thereof within a
single maturity; shall be numbered from 1 upward, in the manner and
with any additional designation as the Bond Registrar deems
necessary for the purpose of identification; and shall bear
interest at the rates set forth below (computed on the basis of a
360-day year of twelve 30-day months), payable semiannually on
March 1 and September 1, and shall mature on September 1 in the
years and amounts as follows:
0049885
Maturity Interest
Years Amounts Rates
1993 $50,000 3.00%
1994 90,000 3.65
1995 95,000 4.10
1996 1,450,000 4.50
1997 1,515,000 4.80
1998 1,575,000 5.00
1999 1,650,000 5.25
2000 1,735,000 5.50
2001 1,830,000 5.70
(b) Series B Bonds. For the purpose of paying part of the
cost of carrying out the Improvements and paying the costs of
issuance and sale of the Series B Bonds, the City shall issue the
Series B Bonds in the principal amount of $3,000,000 The Series B
Bonds shall be designated Water and Sewer Improvement Revenue
Bonds, 1992, Series B; shall be dated October 1, 1992; shall be in
the denominations of $5,000 or any integral multiple thereof within
a single maturity; shall be numbered from 1 upward, in the manner
and with any additional designation as the Bond Registrar deems
necessary for the purpose of identification; and shall bear
interest at the rates set forth below (computed on the basis of a
360-day year of twelve 30-day months), payable semiannually on
March 1 and September 1, and shall mature on September 1 in the
years and amounts as follows:
Maturity Interest
Years Amounts Rates
2002 $1,455,000 6.00%
2003 1,545,000 6.00
Section 5. Registration and Transfer of Bonds. The Bonds
shall be issued only in registered form as to both principal and
interest and 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 amount and of the same interest rate and maturity. Bonds
may be transferred only if endorsed in the manner provided thereon
and surrendered to the Bond Registrar. Any exchange or transfer
shall be without cost to the owner or transferee. The Bond
0049595.~
Registrar shall not be obligated to exchange or transfer any Bond
during the fifteen days preceding any principal payment or
redemption date.
Section 6. Payment of Bonds. Both principal of and interest
on the Bonds shall be payable in lawful money of the United States
of America. Interest on the Bonds shall be paid by checks or
drafts mailed by the Bond Registrar on the interest payment date to
the registered owners at the addresses appearing on the Bond
Register on the fifteenth day of the month preceding the interest
payment date. Principal of the Bonds shall be payable upon
presentation and surrender of the Bonds by the registered owners at
either of the principal offices of the Bond Registrar at the option
of the owners. The Bonds shall be payable solely out of the Bond
Fund and shall not be general obligations of the City.
Section 7. Optional Redemption; Open Market Purchase of
Bonds. The Bonds shall be issued without the right of option of
the City to redeem the Bonds prior to their stated maturity dates.
The City reserves the right and option to purchase any or all
of the Bonds in the open market at any time at any price plus
accrued interest to the date of purchase.
All Bonds purchased or redeemed under this section shall be
cancelled.
Section 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 payment 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. Bond Fund. There has been created in the office
of the City Treasurer a special fund of the City known as the Water
and Sewer Revenue Bond Fund, 1985 (herein defined as the "Bond
Fund"), which fund has been divided into two accounts, a Principal
and Interest Account and a Reserve Account. So long as any Bonds
are outstanding against the Bond Fund, the City obligates and binds
0049885.~
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itself to set aside and pay into the Bond Fund, in addition to the
amounts required to be paid therein for the 1985 Bonds and any
Future Parity Bonds, on or before the 20th day of each month, out
of the Net Revenue of the System certain fixed amounts without
regard to any fixed proportion, namely:
(a) Into the Principal and Interest Account, beginning
with the month of November, 1992, 1/4 of the next ensuing four
months' requirements for interest on the Series A Bonds and 1/10 of
the next ensuing 10 months' requirements for principal of the
Series A Bonds, beginning with the month of September, 1993, and
continuing thereafter until the Series A Bonds, both principal and
interest, are paid in full, 1/6 of the next ensuing six
months' interest requirements on the Series A Bonds and 1/12 of the
next ensuing twelve months' principal requirements on the Series A
Bonds, and beginning with the month of December, 1992, 1/3 of the
next three months' requirements for interest on the Series B Bond
beginning with the month of March 1993, and continuing thereafter
until the Series B Bonds, both principal and interest, are paid in
full, 1/6 of the next ensuing sixth month's interest requirements
on the Series B Bonds, and, beginning with the month of September
2001 and continuing thereafter until the Series B Bonds are paid in
full, 1/12 of the next ensuing twelve months' principal
requirements on the Series B Bonds.
(b) Into the Reserve Account an amount necessary to fund
the Reserve Requirement of the 1985 Bonds, the Bonds and Future
Parity Bonds within the time permitted by this ordinance to fund
the Reserve Requirement. The Reserve Requirement for the 1985
Bonds and the Bonds shall be fully funded by Reserve Account
Instruments. Upon the deposit of the Reserve Account Instrument
for the 1985 Bonds and Series A Bonds into the Reserve Account, all
funds currently in the Reserve Account shall be transferred as
provided in Section 14.
The City covenants and agrees that it will at all times
maintain in the Reserve Account an amount equal to the Reserve
Requirement, except for withdrawals therefrom as authorized herein,
until there is a sufficient amount in the Principal and Interest
0(}49885.02
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Account and Reserve Account to pay the principal of and interest on
all outstanding bonds payable from the Bond Fund, at which time the
money in the Reserve Account may be used to pay any such principal
and interest so long as the money remaining on deposit in the
Reserve Account is no less than the Reserve Requirement of the
remaining outstanding bonds payable from the Bond Fund.
In the event there shall be a deficiency in the Bond Fund to
meet maturing installments of either principal of or interest on
any of the 1985 Bonds, the Bonds and/or Future Parity Bonds, such
deficiency shall be made up from the Reserve Account by the
withdrawal of cash therefrom and then by drawing from any Reserve
Account Instrument. Any deficiency created in the Reserve Account,
including the value of any Reserve Account Instrument, by reason of
any such withdrawal or resulting from any revaluation of
investments in the reserve account will then be made up from the
Net Revenue of the System which shall be first available after
making necessary provisions for the required payments into the
Principal and Interest Account and after repayment of any Reserve
Account Instrument. Any such deficiency shall be restored by the
close of the next succeeding fiscal year.
All money in the Bond Fund may be kept in cash or invested in
Permitted Investments maturing not later than the date when needed
(for investments in the Principal and Interest Account) or maturing
not later than five years from the date of the investment or the
last maturity of any remaining outstanding bonds payable from the
Bond Fund, whichever is the lesser (for investments in the Reserve
Account). In no event shall any money in the Bond Fund or any
other money reasonably expected to be used to pay principal and/or
interest on the Bonds be invested at a yield which would cause the
Bonds to be arbitrage bonds within the meaning of Section 103(c) of
the United States Internal Revenue Code of 1954, as amended, and
applicable regulations thereunder. Income from investments in the
Principal and Interest Account shall be deposited in that account.
Income from investments in the Reserve Account shall be deposited
in that account until the amount therein is equal to the Reserve
Requirements of all bonds payable from the Bond Fund, and
0049885.02
-1'/-
thereafter shall be deposited in the Principal and Interest
Account.
In addition, the City reserves the right to substitute for all
or for a portion of the Reserve Account a Reserve Account
Instrument which when combined with any money or investments in the
Reserve Account equals an amount not less than the Reserve
Requirement for all then outstanding 1985 Bonds, Bonds and Future
Parity Bonds. The City covenants that any such substitution will
be subject to the prior approval of the 1985 Bond Insurer and the
Bond Insurer and the Reserve Account Insurer (with respect to the
Bonds) and of any provider of bond insurance for any Future Parity
Bonds and a written certificate from Moody's Investors Service,
Inc., and Standard & Poor's Corporation that such substitution will
not result in any change in the outstanding ratings of the 1985
Bonds, the Bonds and any Future Parity Bonds and will not impair
the security thereof.
If the City obtains an additional reserve account instrument
in addition to the Reserve Account Instrument obtained for the
Bonds, the City shall first obtain the consent of the Reserve
Insurer. Any drawings thereunder shall be made on a pro rata basis
with the Reserve Account Instrument (calculated on the maximum
amount available under each instrument) after the application of
all available cash in the Reserve Account, including the
liquidation of any investments therein. All repayments, including
repayment of Reserve Instrument or Bond Insurance Costs, shall be
made on the same pro rata basis before the replenishing of any cash
in the Reserve Account.
The City may create sinking fund accounts or other accounts in
the Bond Fund for the payment or securing the payment of bonds
payable from the Bond Fund as long as the maintenance of such
accounts does not conflict with the rights of the owners of bonds
payable from the Bond Fund.
It is declared that in creating the Bond Fund and in fixing
the amounts to be paid into it as aforesaid, the City Council has
had due regard for Operating and Maintenance Expenses (and the cost
of operation and maintenance as used in RCW 35.92.100) and the debt
~9885.02
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service requirements of the 1985 Bonds, and declares that the City
Council is not setting aside into the Bond Fund a greater amount
than in its judgment will be available over and above such
Operating and Maintenance Expenses and debt service requirements.
If the City fails to set aside and pay into the Bond Fund the
amounts set forth above, the owner of any of the outstanding bonds
payable out of the Bond Fund or the Bond Insurer may bring action
against the city and compel the setting aside and payment.
If the City fails to repay any Reserve Instrument or Bond
Insurance Costs as provided herein, the Reserve Instrument may
exercise any and all remedies available to Bondowners at law or
under this ordinance other than acceleration of the maturity of the
bonds or remedies which would adversely affect Bondowners.
Section 10. Pledge of Revenue and Lien Position. The Gross
Revenue of the System is pledged for the payment of the 1985 Bonds,
the Bonds and any Future Parity Bonds which may be issued
hereafter. This pledge shall constitute a lien and charge upon
such Gross Revenue of the System prior and superior to any other
liens and charges whatsoever, subject only to Operating and
Maintenance Expenses.
Section 11. Reserve Account Instrument. The City shall
acquire Reserve Account Instruments from the Reserve Insurer to
satisfy the Reserve Requirement for the 1985 Bonds and the Bonds.
The Reserve Insurer requires that the following provisions be
included herein: " [The City's] repayment of any draws under the
Reserve Policy Account Instrument and related reasonable expenses
incurred by the Bond Insurer (together with interest thereon at a
rate equal to the lower of (i) the primary rate of Morgan Guaranty
Trust Company of New York in effect from time to time plus 2% per
annum and (ii) the highest rate permitted by law) shall enjoy the
same priority as the obligation to maintain and refill the Reserve
Account. Repayment of Reserve Instrument or Bond Policy Costs
shall commence in the first month following each draw, and each
such monthly payment shall be in an amount at least equal to 1/12
of the aggregate of Reserve Instrument or Bond Polciy Costs related
to such draw. If and to the extent that cash has also been
deposited in the Reserve Fund, all such cash shall be used (or
investments purchased with such cash shall be liquidated and the
proceeds applied as required) prior to any drawing under the
Reserve Account Instrument, and repayment of any Policy Costs shall
be made prior to replenishment of any such cash amounts. If, in
addition to the Reserve Account Instrument, any other reserve fund
substitute instrument ("Additional Reserve Policy") is provided,
drawings under the Reserve Account Instrument and any such
Additional Reserve Policy, and repayment of Reserve Instrument or
Bond Insurance Costs and reimbursement of amounts due under the
Additional Reserve Policy, shall be made on a pro rata basis
(calculated by reference to the maximum amounts available
thereunder) after applying all available cash in the Reserve
Account and prior to replenishment of any such cash draws,
respectively.
" . . 4. The use, in the future, of any Reserve
Account Instrument not furnished by the Bonds Insurer
pursuant to this Section shall be subject to receipt of
an opinion of counsel acceptable to the Bond Insurer and
in form and substance satisfactory to the Bond Insurer as
to the due authorization, execution, delivery and
enforceability of such instrument in accordance with its
terms, subject to applicable laws affecting creditors'
right, and, in the event the issuer of such credit
instrument is not a domestic entity, an opinion of
foreign counsel in form and substance satisfactory to the
Bond Insurer. In addition, the use of an irrevocable
letter of credit shall be subject to receipt of an
opinion of counsel acceptable to the Bond Insurer to the
effect that payments under such letter of credit would
not constitute avoidable preferences under Section 547 of
the U.S. Bankruptcy Code or similar state laws with
avoidable preference provisions in the event of the
filing of a petition for relief under the U.S. Bankruptcy
Code or similar state laws by or against the issuer of
the Bonds (or any other account party under the letter of
credit).
"5. The obligation to reimburse the issuer of a Reserve
Account Instrument for any fees, expenses, claims or
draws upon such Reserve Account Instrument shall be
subordinate to the payment of debt service on the Bonds.
The right of the issuer of a Reserve Account Instrument
to payment or reimbursement of its fees and expenses
shall be subordinated to cash replenishment of the
Reserve Account, and, subject to the second succeeding
sentence, its right to reimbursement for claims or draws
shall be on a parity with the cash replenishment of the
Reserve Account. The Reserve Account Instrument shall
provide for a revolving feature under which the amount
available thereunder will be reinstated to the extent of
any reimbursement of draws or claims paid. If the
revolving feature is suspended or terminated for any
reason, the right of the issuer of the Reserve Account
Instrument to reimbursement will be further subordinated
to cash replenishment of the Reserve Account to an amount
equal to the difference between the full original amount
01M9885.~
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available under the Reserve Account Instrument and the
amount then available for further draws or claims. If
(a) the issuer of a Reserve Account Instrument becomes
insolvent or (b) the issuer of a Reserve Account
Instrument defaults in its payment obligations thereunder
or (c) the claims-paying ability of the issuer of the
insurance policy or surety bond falls below S&P "AAA" or
a Moody's "Aaa" or (d) the rating of the issuer of the
letter of credit falls below a S&P "AA," the obligation
to reimburse the issuer of the Reserve Account Instrument
shall be subordinate to the cash replenishment of the
Reserve Account.
"6. If (a) the revolving reinstatement feature described
in the preceding paragraph is suspended or terminated or
(b) the rating of the claims paying ability of the issuer
of the surety bond or insurance policy falls below a S&P
"AAA" or a Moody's "Aaa" or (c) the rating of the issuer
of the letter of credit falls below a S&P "AA", the
Issuer shall either (i) deposit into the Reserve Account
an amount sufficient to cause the cash or permitted
investments on deposit in the Reserve Account to equal
the Reserve Requirement on all outstanding Bonds, such
amount to be paid over the ensuing five years in equal
installments deposited at least semiannually or (ii)
replace such instrument with a surety bond, insurance
policy or letter of credit meeting the requirements in
any of 1-3 above within six months of such occurrence.
In the event (a) the rating of the claims-paying ability
of the issuer of the surety bond or insurance policy
falls below "A" or (b) the rating of the issuer of the
letter of credit falls below "A" or (c) the issuer of the
Reserve Account Instrument defaults in its payment
obligations or (d) the issuer of the Reserve Account
Instrument becomes insolvent, the City shall either (i)
deposit into the Reserve Account an amount sufficient to
cause the cash or permitted investments on deposit in the
Reserve Account to equal the Reserve Requirement on all
outstanding Bonds, such amount to be paid over the
ensuing year in equal installments on at least a monthly
basis or (ii) replace such instrument with a surety bond,
insurance policy or letter of credit meeting the
requirements as defined in Section 1 herein within six
months of such occurrence.
"7. Where applicable, the amount available for draws or
claims under the Reserve Account Instrument may be
reduced by the amount of cash or permitted investments
deposited in the Reserve Account pursuant to clause (i)
of the precedinngparagraph.
"8. If the City chooses the above described alternatives
to a cash-funded Reserve Account, any amounts owed by the
City to the issuer of such credit instrument as a result
of a draw thereon or a claim thereunder, as appropriate,
shall be included in any calculation of debt service
requirements required to be made pursuant to this
ordinance for any purpose, e.g., rate covenant or
additional bonds test.
"9. The Bond Registrar shall ascertain the necessity for
a claim or draw upon the Reserve Account Instrument and
to provide notice to the issuer of the Reserve Account
Instrument in accordance with its terms not later than
three days (or such longer period as may be necessary
depending on the permitted time period for honoring a
draw under the Reserve Account Instrument) prior to each
interest payment date.
"10. Cash on deposit in the Reserve Account shall be used
(or investments purchased with such cash shall be
liquidated and the proceeds applied as required) prior to
0049885.~
any drawing on any Reserve Account Instrument. If and to
the extent that more than one Reserve Account Instrument
is deposited in the Reserve Account, drawings thereunder
and repayments of costs associated therewith shall be
made on a pro rata basis, calculated by reference to the
maximum amounts available thereunder. "
Section 12. Refundinq of the 1985 Refunded Bonds.
(a) Acquisition and Substitution of Acquired Obliqations.
Sufficient proceeds of the sale of the Series A Bonds shall be
deposited immediately upon the receipt thereof together with
$1,571,470.87 from the Reserve Account of the Bond Fund and
$149,715 from the Principal and Interest Account of the Bond Fund
which amount the City Treasurer is authorized and directed to
transfer, with the Refunding Trustee to discharge the obligation of
the city to carry out the Refunding Plan by providing for the
payment of the amounts required to be paid by the Refunding Plan.
To the extent practicable, such obligations shall be discharged
fully by the Refunding Trustee's simultaneous purchase of Acquired
Obligations bearing such interest rates and maturing as to
principal and interest in such amounts and at such times so as to
provide for the payment of the amounts required to be paid by the
Refunding Plan. The Acquired Obligations are listed and more
particularly described in Schedule A attached to the Refunding
Trust Contract, but are subject to substitution as set forth below.
Prior to the purchase of any such Acquired Obligations, the
City reserves the right to substitute other direct, non-callable
obligations of the United States of America ("Substitute
Obligations") for any of the Acquired Obligations and to use any
savings created thereby for any lawful City purpose if, (a) in the
opinion of Foster Pepper & Shefelman, the City's bond counsel, the
interest on the Series A Bonds will remain excluded from gross
income for federal income tax purposes under Sections 103, 148 and
149(d) of the Code, and (b) such substitution shall not impair the
timely payment of the amounts required to be paid by the Refunding
Plan as so verified by an independent nationally recognized firm of
certified public accountants.
After the purchase of the Acquired Obligations by the
Refunding Trustee, the City reserves the right to substitute
therefor cash or Government Obligations subject to the conditions
~9885.02
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that such money or securities held by the Refunding Trustee shall
be sufficient to carry out the Refunding Plan, that such
substitution will not cause the Bonds to be arbitrage bonds within
the meaning of Section 148 of the Code and regulations thereunder
in effect on the date of such substitution and applicable to
obligations issued on the issue date of the Series A Bonds, and
that the City obtain, at its expense: (1) verification by an
independent nationally recognized firm of certified public
accountants acceptable to the Refunding Trustee confirming that the
payments of principal of and interest on the substitute Acquired
Obligations, if paid when due, and any other money held by the
Refunding Trustee will be sufficient to carry out the Refunding
Plan; and (2) an opinion from Foster Pepper & Shefelman, bond
counsel to the City, its successor, or other nationally recognized
bond counsel to the City, to the effect that the disposition and
substitution or purchase of such securities, under the statutes,
rules and regulations then in force and applicable to the Bonds,
will not cause the interest on the Series A Bonds or the 1985
Refunded Bonds to be included in gross income for federal income
tax purposes and that such disposition and substitution or purchase
is in compliance with the statutes and regulations applicable to
the Series A Bonds. Any surplus money resulting from the sale,
transfer, other disposition or redemption of the Acquired
Obligations and the substitutions therefor shall be released from
the trust estate and transferred to the City to be used for any
lawful Waterworks Utility purpose.
(b) Administration of Refunding Plan. The Refunding Trustee
is authorized and directed to purchase the Acquired Obligations (or
substitute obligations) and to make the payments required to be
made by the Refunding Plan from the Acquired Obligations (or
substitute obligations) and money deposited with the Refunding
Trustee pursuant to this ordinance. All Acquired Obligations (or
substitute obligations) and the money deposited with the Refunding
Trustee and any income therefrom shall be held irrevocably,
invested and applied in accordance with the provisions of
Ordinances Nos. 3989 this ordinance, Chapter 39.53 RCW and other
0049885.02
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applicable statutes of the State of Washington, and the Refunding
Trust Contract. All necessary and proper fees, compensation and
expenses of the Refunding Trustee for Series A Bonds and all other
costs incidental to establishing the escrow to accomplish the
refunding of the outstanding 1985 Refunded Bonds and costs related
to the issuance and delivery of Series A Bonds, including bond
printing, rating service fees, insurance premiums, verification
fees, bond counsel's fees and other related expenses, shall be paid
out of the proceeds of Series A Bonds.
(c) Authorization for Refundinq Trust Contract. In order to
carry out the Refunding Plan provided for by this ordinance, the
Mayor or City Treasurer is authorized and directed to execute and
deliver to the Refunding Trustee a Refunding Trust Contract
substantially in the form on file with the City Clerk and by this
reference made a part hereof, setting forth the duties, obligations
and responsibilities of the Refunding Trustee in connection with
the payment, redemption and retirement of the outstanding 1985
Refunded Bonds as provided herein and stating that the provisions
for payment of the fees, compensation and expenses of the Refunding
Trustee set forth therein are satisfactory to it. Prior to
executing the Refunding Trust Contract, the Mayor or City Treasurer
is authorized to make such changes therein that do not change the
substance and purpose thereof or that assure that the escrow
provided therein and Series A Bonds are in compliance with the
requirements of federal law governing the exclusion of interest on
Series A Bonds from gross income for federal income tax purposes.
Section 13. Call for Redemption of the Outstandinq 1985
Refunded Bonds. The City calls for redemption on September 1,
1995, all of the outstanding 1985 Refunded Bonds at 101% of par.
Such call for redemption shall be irrevocable after the
delivery of Series A Bonds to the initial purchaser thereof. The
date on which the 1985 Refunded Bonds are called for redemption is
the next date on which those bonds may be called at a premium of 3%
or less.
The proper City officials are authorized and directed to cause
the fiscal agencies to give such notices as required, at the times
0049885.~
-24-
and in the manner required by Ordinance No. 3989 in order to effect
the redemption prior to their maturity of the 1985 Refunded Bonds.
Section 14. Deposit of Bond Proceeds and Reserve Account
Transfers. There has been created in the office of the Treasurer
a special fund of the City known as the Construction Account of the
Wastewater Construction Fund (the "Construction Fund"). The
accrued interest received from the purchaser of the Bonds shall be
deposited in the Principal and Interest Account of the Bond Fund.
Upon the issuance of the Series A Bonds and deposit into the
Reserve Account of a Reserve Account Instrument sufficient to fund
the Reserve Requirement for the 1985 Bonds, and the Bonds,
$1,571,470.87 in the Reserve Account shall be transferred to the
Refunding Trustee pursuant to Section 12(a) and the balance of the
funds in the Reserve Account shall be transferred to the
Construction Fund. The proceeds of the Series B Bonds shall be
deposited in the Construction Fund and used to pay the costs of
carrying out the Improvements. Money on deposit in the
Construction Fund may be invested and the investment earnings
retained in the Construction Fund and used for the purposes of that
fund except that earnings subject to a federal tax or rebate
requirement may be withdrawn from the Construction Fund and used
for those tax or rebate purposes.
Section 15. Form and Execution of Bonds. The Bonds shall be
printed or lithographed on good bond paper in a form consistent
with the provisions of this ordinance and state law, shall be
signed by the Mayor and City Clerk, either or both of whose
signatures may be manual or in facsimile, and the seal of the City
or a facsimile reproduction thereof shall be impressed or printed
thereon.
Only Bonds bearing a Certificate of Authentication in the
following form, manually signed by the Bond Registrar, shall be
valid or obligatory for any purpose or entitled to the benefits of
this ordinance:
0049885.02
-:25-
CERTIFICATE OF AUTHENTICATION
This bond is one of the fully registered City of
Bremerton, Washington, Water and Sewer [Improvement]
[Refunding] Revenue Bonds, 1992, Series [A][B] described
in the Bond Ordinance.
WASHINGTON STATE FISCAL AGENCY
Bond Registrar
By
Authorized Officer
The authorized signing of a Certificate of Authentication shall be
conclusive evidence that the Bonds so authenticated have been duly
executed, authenticated and delivered and are entitled to the
benefits of this ordinance.
If any officer whose facsimile signature appears on the Bonds
ceases to be an officer of the City authorized to sign bonds before
the Bonds bearing his or her facsimile signature are authenticated
or delivered by the Bond Registrar or issued by the City, those
Bonds nevertheless may be authenticated, delivered and issued 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 the date of
issuance of the Bonds.
Section 16. Bond Registrar. The Bond Registrar shall keep,
or cause to be kept, at its principal corporate trust office,
sufficient books for the registration and transfer of the Bonds
which shall at all times be open to inspection by the City. The
Bond Registrar is authorized, on behalf of the City, to
authenticate and deliver Bonds transferred or exchanged in
accordance with the provisions of the Bonds and this ordinance, to
serve as the City's paying agent for the Bonds and to carry out all
of the Bond Registrar's powers and duties under this ordinance and
Ordinance No. 3862 establishing a system of registration for the
City's bonds and obligations.
The Bond Registrar shall be responsible for its
representations contained in the Bond Registrar's Certificate of
-26-
Authentication on the Bonds. The Bond Registrar may become the
owner of Bonds with the same rights it would have if it were not
the Bond Registrar and, to the extent permitted by law, may act as
depository for and permit any of its officers or directors to act
as members of, or in any other capacity with respect to, any
committee formed to protect the rights of Bond owners.
Section 17. Covenants. The City covenants and agrees with
the owner of each of the Bonds as follows:
(a) It will establish, maintain, revise as
necessary and collect such rates and charges for water
and sewer service furnished which will produce Net
Revenue of the System available for debt service each
calendar year at least equal to the Coverage Requirement.
(b) It will at all times maintain and keep the
System in good repair, working order and condition, and
also will at all times operate such utility and the
business in connection therewith in an efficient manner
and at a reasonable cost.
(c) It will not sell, lease, mortgage, or in any
manner encumber or dispose of all of the property of the
System unless provision is made for the payment into the
Bond Fund of an amount sufficient to pay the principal of
and interest on the 1985 Bonds, the Bonds and any Future
Parity Bonds then outstanding and that it will not sell,
lease, mortgage, or in any manner encumber or dispose of
any part of the property of the System that is used,
useful and material to the operation thereof, unless
provision is made for replacement thereof, or for payment
into the Bond Fund of the total amount of Gross Revenue
of the System received which shall not be less than an
amount which shall bear the same ratio to the amount of
the 1985 Bonds, Bonds and any Future Parity Bonds then
outstanding as the Gross Revenue of the System available
for debt service for such outstanding bonds for the
twelve months preceding such sale, lease, encumbrance or
disposal from the portion of the utility sold, leased,
encumbered or disposed of bears to the Gross Revenue of
the System available for debt service for the outstanding
1985 Bonds, Bonds and Future Parity Bonds from the entire
System for the same period. Any such money so paid into
the Bond Fund shall be used to retire such 1985 Bonds,
Bonds and/or Future Parity Bonds at the earliest possible
date.
(d) It will while any of the Bonds remain
outstanding keep proper and separate accounts and records
in which complete and separate entries shall be made of
all transactions relating to the System, and it will
furnish the owner or owners of the Bonds or any
subsequent owner or owners thereof, at the written
request of such owner or owners, complete operating and
income statements of the System in reasonable detail
covering any calendar year not more than ninety days
after the close of such calendar year and it will grant
any owner or owners of at least 25% of the outstanding
Bonds the right at all reasonable times to inspect the
entire System and all records, accounts and data of the
City relating thereto. Upon request of any owner of any
of the Bonds, it also will furnish to such owner a copy
of the most recently completed audit of the City's
accounts by the State Auditor of Washington. Copies of
such operating and income statements and of such audits
~9885.02
-27-
shall be furnished to the Bond Insurer promptly upon
completion each year. All such audits shall be delivered
to the Bond Insurer within 120 days of the end of each
fiscal year. The City also will furnish the Bond Insurer
within 120 days of the end of each fiscal year its budget
and information regarding the fiscal year and withdrawal
of any Sewer Utility user responsible for 4% or more of
System sales measured in terms of revenue dollars since
the last annual report.
(e) It will not furnish any service of the System
to any customer whatsoever free of charge.
(f) It will at all times carry fire and such other
forms of insurance on such of the buildings, equipment,
facilities and properties of the City as under good
practice are ordinarily carried on such buildings,
equipment, facilities, and properties by utilities
engaged in the operation of water and sewerage systems to
the full insurable value thereof, and also will carry
adequate public liability insurance (and war risk
insurance if available at reasonable rates) at all times.
The premiums on such insurance policies are declared to
be a normal part of Operating and Maintenance Expenses.
(g) It will pay all Operating and Maintenance
Expenses and otherwise meet the obligations of the City
as herein set forth.
(h) It will not change any rate or charge for water
service as now established by the existing rate ordinance
or ordinances of the City that will substantially reduce
the annual Gross Revenue of the System below that which
would have been obtained before such change unless the
City shall have on file a certificate from a licensed
professional engineer experienced in the design,
construction and operation of municipal utilities,
stating the rates and charges as so changed will provide
Gross Revenue of the System sufficient to comply with all
the covenants and requirements of this ordinance,
including the Coverage Requirement. A copy of such
certificate shall be provided, upon filing with the City,
to the Bond Insurer.
Section 18. Preservation of Tax Exemption for Interest on
Bonds. The City covenants that it will take all actions necessary
to prevent interest on the Bonds from being included in gross
income for federal income tax purposes, and it will neither take
any action nor make or permit any use of proceeds of the Bonds or
other funds of the City treated as proceeds of the Bonds at any
time during the term of the Bonds which will cause interest on the
Bonds to be included in gross income for federal income tax
purposes. The City also covenants that, to the extent arbitrage
rebate requirements of Section 148 of the Internal Revenue Code of
1986, as amended (the "Code"), are applicable to the Bonds, it will
take all actions necessary to comply (or to be treated as having
complied) with those requirements in connection with the Bonds,
including the calculation and payment of any penalties that the
0049885.02
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City has elected to pay as an alternative to calculating rebatable
arbitrage, and the payment of any other penalties if required under
Section 148 of the Code to prevent interest on the Bonds from being
included in gross income for federal income tax purposes.
The City certifies that it has not been notified of any
listing or proposed listing by the Internal Revenue Service to the
effect that it is a bond issuer whose arbitrage certifications may
not be relied upon.
Section 19. Bonds Neqotiable. The Bonds shall be negotiable
instruments to the extent provided by RCW 62A.8-102 and 62A.8-105.
Section 20. Parity Provisions. The City further covenants
with the owner of each of the Bonds for as long as any of the same
is outstanding that it will not create any special account or fund
or accounts or funds for the payment of the principal of and
interest on any other revenue obligations which will have any
priority over or which will rank on a parity with the payments
required by this ordinance to be made out of the Net Revenue of the
System, nor will it issue Future Parity Bonds, except that it
reserves the right for
First, the purpose of acquiring, constructing and
installing additions, betterments and improvements to and
extensions of, acquiring necessary equipment for, or
making necessary replacements of or repairs or capital
improvements to the System pursuant to a plan or plans of
additions and betterments thereto hereafter adopted, or
Second, the purpose of refunding by exchange or
purchasing and retiring or advance refunding by call and
payment at or prior to their maturity any part or all of
the outstanding 1985 Bonds, Bonds or Future Parity Bonds,
or
Third, other purposes then permitted by law,
to issue additional and/or refunding revenue bonds therefor, and to
make payments into the Bond Fund from the Net Revenue of the System
sufficient to pay the principal of and interest on such Future
Parity Bonds and to maintain a reserve therefor as hereinafter
required, which payments may rank equally with the payments out of
the Net Revenue of the System required to be made into the Bond
Fund by this ordinance, if the conditions and requirements set
forth in Section 12 of Ordinance No. 3989, which section is
incorporated herein and made a part hereof by this reference, are
met and complied with at the time of the issuance of such Future
~9885.~
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Parity Bonds and further that the Reserve Requirement for those
Future Parity Bonds is fully funded at the time of issuance of
those Future Parity Bonds. If any Reserve Instrument and Bond
Policy Costs are unpaid at the time of issuance of any Future
Parity Bonds, the written permission of the Bond Insurer must be
obtained prior to the issuance of such bonds. If the City is in
default on the payment of any amounts due under this ordinance,
Ordinance No. 3989 and the ordinances issuing any Future Parity
Bonds then outstanding, no further Future Parity Bonds may be
issued so long as such default continues.
Nothing contained in the provisions for Future Parity Bonds
shall prevent the City from issuing revenue bonds having a
subordinate lien on the Gross Revenue of the System.
Section 21. Flow of Funds. The Gross Revenue of the System,
except for earnings on investments in the Bond Fund or other bond
redemption funds, refunded bonds, refunding escrow account or other
trust account, and earnings subject to arbitrage rebate (in order
to maintain the exemption of the interest on obligations of the
System from federal income taxation), shall be deposited as
received in the Current Water Fund and shall be used, paid out and
distributed in the following order or priority:
(a) To pay the Operating and Maintenance Expenses.
(b) To make the required payments into the
Principal and Interest Account for all bonds payable out
of the Bond Fund.
(c) To make the required payments into the Reserve
Account for all bonds payable out of the Bond Fund and to
make all payments required to be made pursuant to a
reimbursement agreement in connection with a Reserve
Account Instrument or for repayment of Reserve Instrument
or Bond Policy Costs, except that if there is not
sufficient money to make all payments under reimbursement
agreements, the payments will be made on a pro rata
basis.
(d) To make all required payments into any revenue
bond redemption fund created to pay and secure the
payment of the principal of and interest on any revenue
bonds or short-term obligations of the City having a lien
and charge upon the Gross Revenue of the System
subordinate and inferior to the lien thereon for the
payment of the principal of and interest on the 1985
Bonds, the Bonds, and Future Parity Bonds.
(e) To redeem and retire any water and sewer
revenue bonds of the City then outstanding or to purchase
any or all of those bonds in the open market at a price
not in excess of the price at which those bonds could be
redeemed at the next call date; to make necessary
0049~$.~
-30-
additions, betterments, repairs, extensions and
replacements of the System or other purposes proper to
its maintenance and operation, including the payment of
any City-imposed utility taxes or payments in lieu of
taxes payable from Gross Revenue of the System, or for
any other lawful City purpose.
The City may transfer from any funds or accounts of the City
legally available therefor, except bond redemption funds, any money
therein to meet the required payments to be made into the Bond
Fund.
Section 22. Advance Refundinq or Defeasance of Bonds. The
City may issue advance refunding bonds pursuant to the laws of the
State of Washington or use money available from any other lawful
source to pay the principal of and interest on the Bonds, or such
portion thereof included in a refunding or defeasance plan, as the
same become due and payable and to redeem and retire, release,
refund or defease all such then-outstanding Bonds (hereinafter
collectively called the "defeased Bonds") and to pay the costs of
such refunding or defeasance. In the event that money and/or
Government Obligations sufficient in amount, together with known
earned income from the investments thereof, to redeem and retire,
release, refund or defease the defeased Bonds in accordance with
their terms, are set aside irrevocably in a special fund for and
pledged irrevocably to such redemption, retirement or defeasance
(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 Gross Revenue of the System, funds and
accounts obligated to the payment of such defeased Bonds, other
than the right to receive the funds so set aside and pledged,
thereafter shall cease and become void. Such owners thereafter
shall have the right to receive payment of the principal of and
interest on the defeased Bonds only from the trust account.
After the establishing and full funding of such' a trust
account, the City then may apply any money in any other fund or
account established for the payment or redemption of the defeased
Bonds to any lawful purposes as it shall determine, subject only to
the rights of the owners of any other Bonds or bonds then
outstanding.
0049885.02
-3]-
If the refunding or defeasance plan provides that the defeased
Bonds or the refunding bonds to be issued be secured by money
and/or Government Obligations pending the prior redemption of the
defeased Bonds and if such refunding or defeasance plan also
provides that certain money and/or Government Obligations are
pledged irrevocably for the prior redemption of the defeased Bonds
included in that refunding or defeasance plan, 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 or
defeasance 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 principal of or interest due on the Bonds shall be paid
by the Bond Insurer pursuant to the Bond Insurance Policy, the
amounts thus paid shall not be deemed paid pursuant to this
ordinance and shall continue to be due and owing hereunder until
paid by the City in accordance with this ordinance, all the
covenants, agreements and other obligations of the City to the
owners of Bonds shall continue to exist and the Bond Insurer shall
be subrogated to the rights of those owners. The covenants of this
ordinance shall not be deemed to have been discharged until all
Reserve Instrument or Bond Policy Costs owing to the Bond Insurer
have been paid.
Section 23. Approval of Bond Purchase Contract. Lehman
Brothers Divisions of Shearson Lehman Brothers Inc. of Seattle,
Washington, has presented a Bond Purchase Contract (the "Bond
Purchase Contract") to the City whereunder such company has offered
to purchase the Bonds under the terms and conditions provided in
the Bond Purchase Contract and to purchase on behalf of the City
the Acquired Obligations at the prices specified in Schedule A of
the Refunding Trust Contract (subject to substitution), which
written Bond Purchase Contract is on file with the City Clerk and
is incorporated herein by this reference. The City Council finds
that entering into the Bond Purchase Contract is in the City's best
0049885.02 - - -
-32-
interest and, therefore, accepts the offer contained in the Bond
Purchase Contract and authorizes its execution by City officials.
The Bonds will be printed at City expense and will be
delivered to the purchaser in accordance with the Purchase
Agreement with the approving legal opinion of Foster Pepper &
Shefelman, municipal bond counsel of Seattle, Washington, relative
to the issuance of the Bonds, printed on each Bond. Bond counsel
shall not be required to review or express any opinion concerning
the completeness or accuracy of any official statement, offering
circular or other sales material issued or used in connection with
the Bonds and bond counsel's opinion shall so state.
The City Council has been provided with copies of a
preliminary Official Statement dated October 19, 1992 (the
"Preliminary Official Statement"), prepared in connection with the
purchase of the Bonds. For the sole purpose of the purchaser's
compliance with Securities and Exchange Commission Rule
15c2-12(b) (1), the City "deems final" that Preliminary Official
Statement as of its date except for the omission of information as
to offering prices, interest rates, selling compensation, series of
the Bonds, dates of the Bonds, aggregate principal amount,
principal amount per maturity, maturity dates, options of
redemption, delivery date, ratings and other terms of the Bonds
dependent on such matters.
The proper City officials are authorized and directed to do
everything necessary for the prompt authentication and delivery of
the Bonds to the purchaser, including the execution of the
Preliminary Official Statement on behalf of the City, and for the
proper application and use of the proceeds of the sale thereof.
Section 24. Bond Insurance. The Bond Insurer requires that
the following provisions be included herein:
"(i) If, on the third day preceding any interest payment
date for the Bonds there is not on deposit with the Bond
Registrar sufficient money available to pay all principal
of and interest on the Bonds due on such date, the Bond
Registrar shall immediately notify the Bond Insurer and
Citibank, N.A., New York, New York or its successor as
0049885.02
-33-
its Fiscal Agent (the "Fiscal Agent" for the purpose of
this Section and Section 26 only) of the amount of such
deficiency. If, by such interest payment date, the City
has not provided the amount of such deficiency, the Bond
Registrar shall simultaneously make available to the Bond
Insurer and to the Fiscal Agent the registration books
for the Bonds maintained by the Bond Registrar. In
addition:
"(A) The Bond Registrar shall provide the Bond Insurer
with a list of the Bondowners entitled to receive
principal or interest payments from the Bond
Insurer under the terms of the Bond Insurance
Policy and shall make arrangements for the Bond
Insurer and its Fiscal Agent (a) to mail checks or
drafts to Bondowners entitled to receive full or
partial interest payment from the Bond Insurer and
(2) to pay principal of the Bonds surrendered to
the Fiscal Agent by the Bondowners entitled to
receive full or partial principal payments from the
Bonds Insurer; and
"(B) The Bond Registrar shall, at the time it makes the
registration books available to the Bond Insurer
pursuant to (a) above, notify Bondowners entitled
to receive the payment of principal of or interest
on the Bonds from the Bond Insurer (1) as to the
fact of such entitlement, (2) that the Bond Insurer
will remit to them all or part of the interest
payments coming due subject to the terms of the
Bond Insurance Policy, (3) that, except as provided
in paragraph (ii) below, in the event that any
Bondowner is entitled to receive full payment of
principal from the Bond Insurer, such Bondowner
must tender his Bond with the instrument of
transfer in the form provide don the Bond executed
in the name of the Bond Insurer, and (4) that,
except as provided in paragraph (ii) below, in the
~9885.~
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event that such Bondowner is entitled to receive
partial payment of principal from the Bond Insurer,
such Bondowner must tender his Bond for payment
first to the Bond Registrar, which shall note on
such Bond the portion of principal paid by the
Fiscal Agent, and then, with an acceptable form of
assignment executed in the name of the Bond
Insurer, to the Fiscal Agent, which will then pay
the unpaid portion of principal to the Bondowner
subject to the terms of the Bond Insurance Policy.
"(ii) In the event that the Bond Registrar has notice
that any payment of principal of or interest on a Bond
has been recovered from a Bondowner pursuant to the U.S.
Bankruptcy Code by a paying agent in bankruptcy in
accordance with the final, nonappealable order of a court
having competent jurisdiction, the Bond Registrar shall,
at the time it provides notice to the Bond Insurer,
notify all Bondowners that in the event that any
Bondowner's payment is so recovered, such Bondowner will
be entitled to payment from the Bond Insurer to the
extent of such recovery, and the Bond Registrar shall
furnish to the Bond Insurer its records evidencing the
payments of principal of and interest on the Bonds which
have been made by the Bond Registrar and subsequently
recovered from Bondowners, and the dates on which such
payments were made.
"(iii) The Bond Insurer shall, to the extent it makes
payment of principal of or interest on the Bonds, become
subrogated to the rights of the recipients of such
payments in accordance with the terms of the Bond
Insurance Policy and, to evidence such subrogation, (1)
in the case of subrogation as to claims for past due
interest, the Bond Registrar shall note the Bond
Insurer's rights as subrogee on the registration books
maintained by the Bond Registrar upon receipt from the
Bond Insurer of proof of the payment of interest thereon
.02
-35-
to the Bondowners of such Bonds and (2) in the case of
subrogation as to claims for past due principal, the Bond
Registrar shall note the Bond Insurer's rights as
subrogee on the registration books for the Bonds
maintained by the Bond Registrar upon receipt of proof of
the payment of principal thereof to the Bondowners of
such Bonds. Notwithstanding anything in this ordinance
or the Bonds to the contrary, the Bond Registrar shall
make payment of such past due interest and past due
principal directly to the Bond Insurer to the extent that
the Bond Insurer is a subrogee with respect thereto."
Section 25. Additional Requirements of Bond Insurers. In
determining whether a payment default has occurred or whether a
payment on the Bonds has been made under this ordinance, no effect
shall be given to payments made under the Bond Insurance Policy.
Bondowners' direction or institution of remedies upon default
shall be subject to the prior written consent of the Bond Insurer,
and the Bond Insurer, acting alone, shall have the right to direct
all remedies upon default, if it has not failed to comply with its
payment obligations under the Bond Insurance Policy.
The Bond Insurer shall receive immediate notice of any payment
default and notice of any other default know to the Bond Registrar
within 30 days of the Bond Registrar's knowledge thereof.
Remedies shall be cumulative with respect to the Bondowners
and the Bond Insurer. If any remedial action is discontinued or
abandoned, the Bondowners and Bond Insurer shall be restored to
their former positions.
For all purposes of this ordinance relating to the exercise,
control or direction of remedies or the approval of amendments and
supplements, except the giving of any notices of default to
Bondowners, the Bond Insurer shall be deemed to be the sole holder
of the Bonds it has insured for so long as it has not failed to
comply with its payment obligations under the Bond Insurance
Policy.
The Bond Registrar shall not take the Bond Insurance Policy
into account in determining whether the rights of bond0wners are
0049885.0~2
adversely affected by actions taken pursuant to the terms and
provisions of this ordinance.
The Bond Insurer shall be included as a party in interest and
as a party entitled to (i) notify the Bond Registrar of the
occurrence of an event of default and (ii) request the Bond
Registrar or any applicable receiver to intervene in judicial
proceedings that affect the Bonds or the security therefor. The
Bond Registrar shall be required to accept notice of default from
the Bond Insurer.
Any amendment or supplement to this ordinance shall be subject
to the prior written consent of the Bond Insurer. Any rating
agency rating the Bonds must receive notice of each amendment and
a copy thereof at least 15 days in advance of its execution or
adoption.
Section 26. Notice Addresses. The notices for the Bond
Insurer and the Fiscal Agent are:
Financial Guaranty Insurance Company
115 Broadway
New York, New York 10006
Attention: Managing Counsel
Citibank, N.A.
20 Exchange Place, 16th Floor
New York, New York 10005
Attention: Municipal Trust and Agency
Services Administration
Section 27. Designation of Bonds as "Qualified Tax-Exempt
Obligations" The City has determined and certifies that (a) the
Bonds are not "private activity bonds" within the meaning of
Section 141 of the Code; (b) the reasonably anticipated amount of
tax-exempt obligations (other than private activity bonds) which
the city and any entity subordinate to the City (including any
entity which the City controls, which derives its authority to
issue tax-exempt obligations from the City or which issues tax-
exempt obligations on behalf of the City) will issue during the
calendar years in which the Bonds are issued will not exceed
$10,000,000; and (c) the amount of tax-exempt obligations,
including the Bonds, designated by the City as "qualified tax-
exempt obligations" for the purposes of Section 265(b) (3) of the
Code during the calendar year in which the Bonds are issued does
not exceed $10,000,000. The City designates the Bonds as
~9885.~
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"qualified tax-exempt obligations" for the purposes of
Section 265(b) (3) of the Code.
Section 28. Temporary Bond. Pending the printing, execution
and delivery to the purchaser of the definitive Bonds, the City may
cause to be executed and delivered to the purchaser a single
temporary Bond in the total principal amount of the Bonds. Such
temporary Bond shall bear the same date of issuance, interest
rates, principal payment dates and terms and covenants as the
definitive Bonds, shall be issued as a fully registered Bond in the
name of the purchaser, and shall be in such form as acceptable to
the Purchaser. Such temporary Bond shall be exchanged for the
definitive Bonds as soon as the same are printed, executed and
available for delivery.
Section 29. Declaration of Emergency. For the reason that it
is necessary that the City obtain the proceeds of sale of the
Series A Bonds as soon as possible in order to carry out the
Refunding Plan, an emergency is declared to exist, and it is found
necessary for the public health, welfare and safety that this
ordinance become effective immediately upon its passage, approval
and publication as required by law.
PASSED UNANIMOUSLY by the City Council of the City of
Bremerton, Washington, this 2$th day of October, 1992.
LYNN HORTON, Council President
KATHLEEN , Clerk LOUIS MENTOR, Mayor
APPROVED AS TO FORM:
CEO E
Counsel t~ the City
EXHIBIT A
1992-1994 PROGRAM
30. Water Supply System - McKenna Falls Supply and
Treatment Facility. Construct and install a portion of the upgrade
of the existing McKenna Falls facilities to conform with the
requirements of the Surface Water Treatment Rule of the Safe-
Drinking Water Act Amendments. The overall project shall consist
of modification to the diversion structure; re-channeling of
settling basin and intake structure; improvements to the water
treatment facilities and the installation of emergency power and
instrumentation and control equipment.
31. Water Supply System Improvements Alexander Lake Dam
Repair. Construct and install the Alexander Lake Dam Repair
Project providing for repair of the existing earthen dam located on
Heinz Creek. The project shall consist of repair of the existing
dam structure, modifications to the intake drainage structure and
the replacement of the overflow structure.
32. Water Supply System Improvements - Land Acquisition.
Carry out a portion of the land acquisition program consisting of
the acquisition of lands located in the hydrological boundary of
the City of Bremerton's Union River and Gorst Creek drainage
basins. The acquisition of these lands are consistent with the
requirements of the Surface Water Treatment Rule of the Safe
Drinking Water Act Amendments.
33. Water Transmission and Distribution System
Improvements - SR ~3 Transmission Main. Replace an existing 24"
diameter forty-year old cast iron transmission main connecting the
water supply system to the City. The overall project consisting of
the installation of approximately 12,600 feet of new water main
commencing approximately two hundred feet (200') north of the
intersection of the Old Belfair Valley Road and State Route 3 and
continuing along State Route 3 to approximately four hundred feet
(400') east of the intersection of State Route 3 and State Route
304.
34. Water Transmission and Distribution System
Improvements - Sherman Heights Distribution Main. Construct and
install water transmission and distribution system improvements
providing for the separation between the utility surface water
transmission facilities and the distribution, in order to provide
for increased CT values in response to the requirements of the
Surface Water Treatment Rule of the Safe Drinking Water Act
Amendment. The project consists of the installation of
approximately 11,150 ft. 8" and 12" D.I. Water Main along the
Sherman Heights Road, Kent Street and 3rd Avenue, commencing
approximately 2000 feet south of Roosevelt on 3rd Street and
terminating at Sherman Heights Road and SR #3. These improvements,
together with engineering and allied construction costs are
estimated to be approximately $300,000.
35. Wastewater Construction and Transmission System
Improvements - Warren Avenue Basin Combined Sewer Separation
Project. Construct and install a portion of the wastewater
collection and transmission system improvements providing for the
separation of the Combined Wastewater/Stormwater System pursuant to
the requirements of WAC 173-245, within the Warren Avenue drainage
basin, and the replacement of several mains which are experiencing
structural failure. The project will consist of the installation
of the various size sanitary and stormwater mains for the
separation of sanitary sewage and stormwater within the basin and
for the replacement of several large diameter interceptor mains and
outfalls located along Park Avenue, the .modifications to Pump
Station CE-3, and the installation of the instrumentation and
monitoring equipment associated with Overflow #13.
36. Wastewater Collection and Transmission System
Improvements - Callow Avenue Drainaqe Basin Combined Sewer
Separation Project. Construct and install a portion of the
wastewater collection and transmission system improvements - Callow
Avenue drainage basis combined sewer separation project providing
for the separation of the combined Wastewater - Stormwater System
pursuant to WAC 173-245. The project will consist of the
installation of various size sanitary and stormwater mains within
the Callow Avenue drainage basin. The project will provide for
separation of sanitary sewage and stormwater within the basin, the
elimination of Pump Station WB-4, the relocation of Overflow #17
and the installation of instrumentation and monitoring equipment
associated with Overflow #17.
0(149885.02