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Home My WebLink About4365 OrdinanceCITY OF PASCO, WASHINGTON ORDINANCE NO. 4365 AN ORDINANCE relating to the waterworks utility of the City, including the sanitary sewerage system and the system of storm or surface water sewers as a part thereof; specifying, adopting and ordering the carrying out of a system or plan of additions to and betterments and extensions of the waterworks utility of the City; providing for the issuance of one or more series of water and sewer revenue bonds of the City in an aggregate principal amount of not to exceed $10,000,000 for the purpose of providing the funds necessary (a) to pay all or a portion of the costs of carrying out the plan of additions, (b) to make a deposit to the debt service reserve account as needed, (c) to refund and redeem outstanding water and sewer revenue bonds of the City and (d) to pay the costs of issuance and sale of the bonds and the administrative costs of the refunding; fixing or setting parameters with respect to certain terms and covenants of the bonds; appointing the City's designated representative to approve the final terms of the sale of the bonds; and providing for other related matters. Passed: November 20, 2017 This document was prepared by: FOSTER PEPPER PLLC 1111 Third Avenue, Suite 3400 Seattle, Washington 98101 (206) 447-4400 51615205.7 TABLE OF CONTENTS WM Section1. Definitions ................................................................................................................1 Section 2. Findings and Determinations...................................................................................8 Section 3. Plan of Additions...................................................................................................10 Section 4. Authorization of the Bonds....................................................................................10 Section 5. Appointment of Designated Representative; Description of the Bonds ................10 Section 6. Registration and Transfer of Bonds.......................................................................11 Section 7. Form and Execution of Bonds...............................................................................12 Section 8. Payment of Bonds..................................................................................................12 Section 9. Redemption Provisions and Purchase of Bonds....................................................13 Section 10. Failure to Pay Bonds..............................................................................................14 Section 11. Bond Fund; Payments into Bond Fund..................................................................14 Section 12. Pledge, Lien and Charge for Payment of the Bonds..............................................15 Section13. Flow of Funds........................................................................................................16 Section14. Covenants...............................................................................................................16 Section 15. Provisions for Future Parity Bonds........................................................................17 Section16. Tax Covenants.......................................................................................................18 Section 17. Refunding or Defeasance of Bonds.......................................................................18 Section 18. Deposit of Bond Proceeds; Creation of Construction Accounts ............................19 Section 19. Use of Refunding Proceeds; the Refunding Plan ...................................................20 Section 20. Sale and Delivery of the Bonds.............................................................................22 Section 21. Official Statement; Continuing Disclosure............................................................22 Section 22. General Authorization and Ratification.................................................................23 Section23. Severability............................................................................................................23 Section 24. Effective Date of Ordinance..................................................................................23 Exhibit A Parameters for Final Terms Exhibit B Parity Conditions Exhibit C Form of Undertaking to Provide Continuing Disclosure -1- 51615205.] CITY OF PASCO, WASHINGTON ORDINANCE NO. 4365 AN ORDINANCE relating to the waterworks utility of the City, including the sanitary sewerage system and the system of storm or surface water sewers as a part thereof; specifying, adopting and ordering the carrying out of a system or plan of additions to and betterments and extensions of the waterworks utility of the City; providing for the issuance of one or more series of water and sewer revenue bonds of the City in an aggregate principal amount of not to exceed $10,000,000 for the purpose of providing the funds necessary (a) to pay all or a portion of the costs of carrying out the plan of additions, (b) to make a deposit to the debt service reserve account as needed, (c) to refund and redeem outstanding water and sewer revenue bonds of the City and (d) to pay the costs of issuance and sale of the bonds and the administrative costs of the refunding; fixing or setting parameters with respect to certain terms and covenants of the bonds; appointing the City's designated representative to approve the final terms of the sale of the bonds; and providing for other related matters. THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, DO ORDAIN as follows: Section 1. Definitions. As used in this ordinance, the following words shall have the following meanings: (a) "2009 Bonds" means the outstanding Water and Sewer Revenue Bonds, 2009, of the City issued pursuant to Ordinance No. 3915. (b) "2010A Bonds" means the outstanding Water and Sewer Improvement and Refunding Revenue Bonds, 2010A, of the City issued pursuant to Ordinance No. 3962. (c) "2010T Bonds" means the outstanding Water and Sewer Refunding Revenue Bonds, 2010T (Taxable), of the City issued pursuant to Ordinance No. 3962. (d) "2013A Bonds" means the outstanding Water and Sewer Revenue Bonds, 2013A, of the City issued pursuant to Ordinance No. 4126. (e) "2013T Bonds" means the outstanding Water and Sewer Revenue Bonds, 2013T (Taxable), of the City issued pursuant to Ordinance No. 4126. (f) "2015 Bonds" means the outstanding Water and Sewer Improvement and Refunding Revenue Bonds, 2015, of the City issued pursuant to Ordinance No. 4254. (g) "Acquired Obligations" means the United States Treasury Certificates of Indebtedness, Notes, and Bonds -State and Local Government Series and/or other Government Obligations, as identified in the Refunding Trust Agreement, purchased to carry out the Refunding Plan. -1- 51615205.] (h) "Alternate Security" means any bond insurance, collateral, security, letter of credit, guaranty, surety bond or similar credit enhancement device providing for or securing the payment of all or part of the principal of and interest on any specified Parity Bonds, issued by an institution which has been assigned a credit rating at the time of issuance of the applicable Parity Bonds, respectively, secured by such Alternate Security in the highest rating categories by both Moody's Investors Service, Inc., and S&P Global. (i) 'Annual Debt Service" for any or all Panty Bonds for any year means all the interest, plus all principal which will mature or come due in such year, less all bond interest payable from the proceeds of any such bonds in that year. 0) "Assessment Bonds" means, at the time of determination, Parity Bonds then outstanding equal to the sum of the nondelinquent unpaid principal amount of ULID Assessments then outstanding plus any ULID Assessment payments then on deposit in the Principal and Interest Account of the Bond Fund. Assessment Bonds shall be allocated to each remaining maturity of Panty Bonds in the same proportion as the total of the Assessment Bonds relates to the total of the Panty Bonds then outstanding. (k) "Authorized Denomination" means $5,000.00 or any integral multiple thereof within a maturity. 0) "Average Annual Debt Service " means, at the time of its calculation, the sum of the Annual Debt Service for the remaining years to the last scheduled maturity of the applicable Parity Bonds divided by the number of those years. (m) "Beneficial Owner" means, with respect to a Bond, the owner of any beneficial interest in that Bond. (n) "Bond" means each Project Bond and each Refunding Bond issued pursuant to and for the purposes provided in this ordinance. (o) "Bond Counsel" means the firm of Foster Pepper PLLC, its successor, or any other attorney or firm of attorneys selected by the City with a nationally recognized standing as bond counsel in the field of municipal finance. (p) "Bond Fund" means the Water and Sewer Revenue and Refunding Bond Redemption Fund, 1991, of the City created and established by Ordinance No. 2846 for the payment of the principal of and interest on the Parity Bonds. (q) "Bond Purchase Agreement" means an offer to purchase the Bonds, or a Series of Bonds, setting forth certain terms and conditions of the issuance, sale and delivery of those Bonds, which offer is authorized to be accepted by the Designated Representative on behalf of the City, if consistent with this ordinance. (r) "Bond Register" means the books or records maintained by the Bond Registrar for the purpose of identifying ownership of each Bond. -2- 51615205.] (s) "Bond Registrar" means the Fiscal Agent, or any successor bond registrar selected by the City. (t) "City" means the City of Pasco, Washington, a municipal corporation duly organized and existing under the laws of the State. (u) "City Clerk" means the City Clerk of the City or the successor to the functions of that officer. (v) "City Contribution" means legally available money of the City, in addition to proceeds of the Bonds, necessary or advisable to carry out the Refunding Plan, as determined by the Designated Representative. (w) "City Council" means the legislative authority of the City, as duly and regularly constituted from time to time. (x) "Code" means the United States Internal Revenue Code of 1986, as amended, and applicable rules and regulations promulgated thereunder. (y) "Construction Accounts" means such accounts created in the Water/Sewer Fund as the Finance Director shall designate for the purpose of paying the costs of the Plan of Additions and the costs of issuance of the Bonds. (z) "Coverage Requirement" in any year means an amount of Net Revenue of the Waterworks Utility, together with the ULID Assessments collected in that year, equal to at least the Maximum Annual Debt Service on all Assessment Bonds plus an amount of the Net Revenue of the Waterworks Utility not used to calculate the Coverage Requirement on Assessment Bonds equal to at least 1.25 times Maximum Annual Debt Service on all bonds payable from the Bond Fund that are not Assessment Bonds. (aa) "DTC" means The Depository Trust Company, New York, New York, or its nominee. (bb) "Designated Representative" means an officer of the City appointed in Section 5 of this ordinance to serve as the City's designated representative in accordance with RCW 39.46.040(2). (cc) "Final Terms" means the terms and conditions for the sale of a Series of Bonds including, but not limited to the amount, date or dates, denominations, interest rate or rates (or mechanism for determining interest rate or rates), payment dates, final maturity, redemption rights, price, and other terms or covenants, including minimum savings for refunding bonds (if the refunding bonds are issued for savings purposes). (dd) "Finance Director" means the City's Finance Director or such other officer of the City who succeeds to substantially all of the responsibilities of that office. (ee) "Fiscal Agent " means the fiscal agent of the State, as the same may be designated by the State from time to time. -3- 51616205.] (� "Future Parity Bonds " means any and all water and sewer revenue bonds or other obligations of the City issued or incurred after the date of the issuance of the Bonds pursuant to the provisions of the Parity Bond Ordinances, the payment of the principal of and interest on which constitutes a lien and charge upon the Net Revenue of the Waterworks Utility and ULID Assessments on a parity with the lien and charge upon such Net Revenue and ULID Assessments for the Outstanding Panty Bonds and the Bonds, but shall not include variable rate obligations. (gg) "Government Obligations" has the meaning given in RCW 39.53.010, as now in effect or as may hereafter be amended. (hh) "Gross Revenue of the Waterworks Utility" or "Gross Revenue " means all of the earnings and revenues received by the City from the maintenance and operation of the Waterworks Utility and all earnings from the investment of money on deposit in the Bond Fund, except ULID Assessments, government grants, proceeds from the sale of Waterworks Utility property, City taxes collected by or through the Waterworks Utility, principal proceeds of bonds and earnings or proceeds from any investments in a trust, defeasance or escrow fund created to defease or refund Waterworks Utility obligations (until commingled with other earnings and revenues of the Waterworks Utility) or held in a special account for the purpose of paying a rebate to the United States Government under the Code. (ii) "Issue Date" means, with respect to a Bond, the date of initial issuance and delivery of that Bond to the Purchaser in exchange for the purchase price of that Bond. 0) "Letter of Representations" means the Blanket Issuer Letter of Representations between the City and DTC dated August 31, 1998. (kk) "Maximum Annual Debt Service " means, at the time of calculation, the maximum amount of Annual Debt Service that will mature or come due in the current year or any future year on the outstanding Parity Bonds. office. (11) "Mayor" means the Mayor of the City or the successor to the functions of that (mm) "MSRB" means the Municipal Securities Rulemaking Board. (nn) "Net Revenue of the Waterworks Utility" or "Net Revenue" means the Gross Revenue less Operating and Maintenance Expenses. (oo) "Oficial Statement" means an offering document, disclosure document, private placement memorandum or substantially similar disclosure document provided to purchasers and potential purchasers in connection with the initial offering of the Bonds in conformance with Rule 15c2-12 or other applicable regulations of the SEC. (pp) "Operating and Maintenance Expenses" means all reasonable expenses incurred by the City in causing the Waterworks Utility to be operated and maintained in good repair, working order and condition, including payments made to any other municipal corporation or private entity for water service and for sewage treatment and disposal service or other utility service in the event the City combines such service in the Waterworks Utility and enters into a -4- 51615305.] contract for such service, but not including any depreciation or taxes levied or imposed by the City or payments to the City in lieu of taxes, or capital additions or capital replacements to the Waterworks Utility. (qq) "Outstanding Parity Bonds" means the outstanding 2009 Bonds, 2010A Bonds, 2010T Bonds, 2013A Bonds, 2013T Bonds, and 2015 Bonds. Outstanding Parity Bonds do not include any Refunded Bonds. (n) "Owner" means, without distinction, the Registered Owner and the Beneficial Owner. (ss) "Parity Bonds" means the Outstanding Panty Bonds, the Bonds and any Future Panty Bonds. (tt) "Parity Bond Ordinances" means Ordinance No. 3915, Ordinance No. 3962, Ordinance No. 4126, Ordinance No. 4254 and this ordinance. (uu) "Parity Conditions" means the conditions for issuing Future Parity Bonds set forth in Exhibit B to this ordinance, which is incorporated herein by this reference. (w) "Plan of Additions" means the system or plan of additions to and betterments and extensions of the Waterworks Utility specified, adopted and ordered to be carried out by this ordinance. (ww) "Principal and Interest Account" means the account of that name created in the Bond Fund for the payment of the principal of and interest on all Parity Bonds. (xx) "Project Bond" means each bond issued pursuant to this ordinance for the purpose of providing money required to carry out and accomplish the Plan of Additions, including without limitation paying the allocable share of the costs related to the issuance, sale and delivery of such bond and providing for the Reserve Requirement with respect to the Project Bonds. (yy) "Purchaser" means D.A. Davidson & Co. of Seattle, Washington, or such other purchaser of the Bonds whose offer is accepted by the Designated Representative in accordance with this ordinance. (zz) "Rating Agency" means any nationally recognized rating agency then maintaining a rating on the Bonds at the request of the City. (aaa) "Record Date" means the Bond Registrar's close of business on the 15th day of the month preceding an interest payment date. With respect to redemption of a Bond prior to its maturity, the Record Date shall mean the Bond Registrar's close of business on the date on which the Bond Registrar sends the notice of redemption in accordance with Section 9. (bbb) "Redemption Date " means, with respect to each series of the Refunded Bonds, a date or dates selected by the Designated Representative. -5- 51615205.] (ccc) "Refunded Bonds" means the Refunding Candidates selected by the Designated Representative and identified in the Refunding Plan. (ddd) "Refunding Bond" means each bond issued pursuant to this ordinance for the purpose of carrying out the Refunding Plan, including without limitation paying the administrative costs of the refunding and the allocable share of costs related to the issuance, sale and delivery of such bond and providing for the Reserve Requirement with respect to the Refunding Bonds. (eee) "Refunding Candidates" means: (1) the currently outstanding $6,485,000 principal amount of the 2009 Bonds not subject to extraordinary redemption maturing on December 1 of each of the years 2018 through 2021 and 2023 through 2029; and (2) the currently outstanding $4,480,000 principal amount of the 2010A Bonds maturing on June 1 of each of the years 2018 through 2020, 2025 and 2029. (fff) "Refunding Plan" means (as further described in the Refunding Trust Agreement): (1) the deposit with the Refunding Trustee of proceeds of the Bonds in an amount, together with the City Contribution (if any), sufficient to acquire the Acquired Obligations and establish a beginning cash balance; (2) the receipt by the Refunding Trustee of the maturing principal of and interest on the Acquired Obligations, and the application of such amounts (together with any other cash held by it) to pay principal of and interest on the Refunded Bonds when due up to and including the applicable Redemption Dates, and the call, payment and redemption of the Refunded Bonds on the applicable Redemption Dates at a price equal to the principal amount to be redeemed; and (3) payment of the costs of issuing the Bonds and the costs of carrying out the foregoing elements of the Refunding Plan, if payment of such costs is so specified in the Refunding Trust Agreement. (ggg) "Refunding Trust Agreement" means the refunding trust agreement between the City and the Refunding Trustee, providing for the carrying out of the Refunding Plan. (hhh) "Refunding Trustee" means the trustee, or any successor trustee, designated by the Designated Representative to serve as refunding trustee to carry out the Refunding Plan. (iii) "Registered Owner" means, with respect to a Bond, the person in whose name that Bond is registered on the Bond Register. For so long as the City utilizes the book -entry only system for the Bonds under the Letter of Representations, Registered Owner shall mean the Securities Depository. (ib) "Reserve Account" means the account of that name created in the Bond Fund for the purpose of securing the payment of the principal of and interest on the Parity Bonds. -6- 51615305.9 (kkk) "Reserve Insurance" means, in lieu of cash and investments, insurance obtained by the City to fund all or a portion of the Reserve Requirement for any Panty Bonds then outstanding for which such insurance is obtained; and for the Outstanding Parity Bonds and the Bonds means the Surety Bond provided by the Reserve hisurer. (111) "Reserve Insurer" means Ambac Assurance Corporation for the Outstanding Panty Bonds and the Bonds. (mmm) "Reserve Requirement' means: (1) For the Outstanding Parity Bonds and the Bonds, an amount equal to the least of (a) 10% of the issue price of the then -outstanding Parity Bonds, (b) Maximum Annual Debt Service on the then -outstanding Parity Bonds and (c) 1.25 times Average Annual Debt Service on the then -outstanding Parity Bonds. For the purposes of determining Maximum Annual Debt Service and Average Annual Debt Service for calculating the Reserve Requirement, all bonds payable or proposed to be paid from the Bond Fund shall be treated as a single issue and the number of years to the last scheduled maturity for any of those issues shall be used as the denominator. (2) For any Future Parity Bonds secured by the Reserve Account, an amount equal to the difference between the Reserve Requirement for the then -outstanding Parity Bonds secured by the Reserve Account and the least of (a) 10% of the issue price of the then -outstanding Parity Bonds secured by the Reserve Account and the Future Parity Bonds proposed to be issued, (b) Maximum Annual Debt Service on the then -outstanding Panty Bonds secured by the Reserve Account and the Future Parity Bonds proposed to be issued and (c) 1.25 times Average Annual Debt Service on the then -outstanding Parity Bonds secured by the Reserve Account and the Future Parity Bonds proposed to be issued, but in no event to exceed an amount equal to the least of 10% of the issue price of the proposed Future Panty Bonds, Maximum Annual Debt Service on those bonds and 1.25 times Average Annual Debt Service on the proposed bonds. For the purposes of determining Maximum Annual Debt Service and Average Annual Debt Service for calculating the Reserve Requirement, all bonds payable or proposed to be paid from the Bond Fund secured by the Reserve Account shall be treated as a single issue and the number of years to the last scheduled maturity for any of those issues shall be used as the denominator. (nnn) "Rule 15c2-12" means Rule 15c2-12 promulgated by the SEC under the Securities Exchange Act of 1934, as amended. (000) "SEC" means the United States Securities and Exchange Commission. (ppp) "Series of Bonds" or "Series" means a series of the Bonds issued pursuant to this ordinance. (qqq) "State " means the State of Washington. -7- 51615205.9 (rrr) "Surety Bond" means the surety bond issued by the Reserve Insurer guaranteeing certain payments into the Reserve Account with respect to the Outstanding Parity Bonds and the Bonds as provided in and subject to the limitations set forth in that surety bond. (sss) "Term Bonds" means each Bond designated as a Tenn Bond and subject to mandatory redemption in the years and amounts set forth in the Bond Purchase Agreement. For any Outstanding Parity Bonds or Future Parity Bonds, "Term Bonds" means those bonds of any single issue or series designated as Term Bonds pursuant to the ordinance authorizing their issuance or sale and which are subject to mandatory prior redemption or for which mandatory sinking fund installments are provided. (ttt) "ULID" means utility local improvement district. (nun) "ULID Assessments" means all ULID assessments and installments thereof, plus interest and penalties thereon, in any ULID created to secure the payment of any Parity Bonds and pledged to be paid into the Bond Fund. (vvv) "Undertaking" means the undertaking to provide continuing disclosure entered into pursuant to Section 21(c) of this ordinance. (www) "Water and Sewer Revenue Fund" means that special fund of the City into which all of the Gross Revenue of the Waterworks Utility of the City shall be deposited. (xxx) "Waterworks Utility" means the combined sewerage system and water system of the City, together with the storm or surface water sewers and agricultural/industrial wastewater treatment facilities heretofore or hereafter authorized to be constructed and installed as a part of such combined systems, and together with all additions thereto and betterments and extensions thereof now or hereafter made. Section 2. Findings and Determinations. The City takes note of the following facts and makes the following findings and determinations: (a) Background. The City, by Ordinance No. 531, passed March 7, 1944, provided that the system of sewerage of the City, including all additions, extensions and betterments thereto, should be operated as a part of and as belonging to the Waterworks Utility of the City pursuant to the provisions of Chapter 193 of the Laws of 1941 of the State of Washington (RCW 35.67.320 et seq.). (b) Plan of Additions. The City has determined that it is necessary and in the best interests of the City that certain improvements be made and there be adopted a system or plan of additions to and betterments and extensions of the Waterworks Utility (the "Plan of Additions"). (c) Outstanding Parity Bonds. Pursuant to Ordinance No. 2846, the City heretofore issued and sold its 1991 Bonds (all of which have been paid and retired), and reserved the right to issue additional water and sewer revenue bonds of the City which would have a lien and charge upon the Net Revenue of the Waterworks Utility and ULID Assessments on a panty with those 1991 Bonds if the Parity Conditions are met. The City currently has outstanding the -8- 51615205.) following water and sewer revenue bonds issued on a parity of lien and charge on the Net Revenue of the Waterworks Utility and ULID Assessments with the 1991 Bonds: (d) Parity Conditions Met. The City Council finds and declares that (1) all payments required by the Outstanding Parity Bonds are provided for in this ordinance or have been provided for or made into the Bond Fund for those outstanding bonds and that no deficiency exists in such fund; (2) provision is hereinafter made for the deposit in the Reserve Account of the Bond Fund of the Reserve Requirement for the Bonds; and (3) that all other conditions set forth in the Parity Conditions will have been met and satisfied before the Bonds are delivered 4o the initial purchaser. (e) Refunding Candidates. In order to realize a debt service savings to the City and its ratepayers, the City Council wishes to refund all or a portion of the Refunding Candidates. Chapter 39.53 RCW and other laws of the State authorize the City to cavy out the Refunding Plan. (f) Sufficiency of Gross Revenue; Due Regard. The City Council finds and determines that the Gross Revenue of the Waterworks Utility will be more than sufficient to (1) meet all Operating and Maintenance Expenses thereof (and the cost of maintenance and operation as contemplated by RCW 35.92.100), and the debt service requirements of the Outstanding Parity Bonds, and (2) permit the setting aside into the Bond Fund out of the Net Revenue of the Waterworks Utility of the City of amounts sufficient to pay the principal of and interest on the Bonds when due. The City Council declares that in creating the Bond Fund and in fixing the amounts to be paid into that fund, it has exercised due regard for Operating and Maintenance Expenses (and the cost of maintenance and operation contemplated by RCW 35.92.100) and the debt service requirements of the Outstanding Parity Bonds, and the City has not bound or obligated itself to set aside and pay into the Bond Fund a greater amount or proportion of the Gross Revenue of the Waterworks Utility of the City than in the judgment of the City Council will be available over and above such Operating and Maintenance Expenses and debt service requirements of the Outstanding Parity Bonds, and that the City has not pledged any portion of the Gross Revenue of the Waterworks Utility of the City for any indebtedness other than the Outstanding Parity Bonds. (g) Issuance of Bonds. Based on the foregoing, the City Council finds that it is in the best interest of the City to issue and sell the Bonds to the Purchaser, pursuant to the terms set forth in the Bond Purchase Agreement as approved by the Designated Representative consistent with this ordinance. -9- 51615205.7 Original Ordinance Principal Dated Authorizing Passage Name of Issue Amount Date Ordinance Date 2009 Bonds 10,045,000 4/17/2009 3915 4/06/2009 2010A Bonds 9,070,000 6/03/2010 3962 5/17/2010 2010T Bonds 1,240,000 6/03/2010 3962 5/17/2010 2013A Bonds 2,520,000 12/05/2013 4126 11/18/2013 2013T Bonds 7,235,000 12/05/2013 4126 11/18/2013 2015 Bonds 14,380,000 12/22/2015 4254 11/30/2015 (d) Parity Conditions Met. The City Council finds and declares that (1) all payments required by the Outstanding Parity Bonds are provided for in this ordinance or have been provided for or made into the Bond Fund for those outstanding bonds and that no deficiency exists in such fund; (2) provision is hereinafter made for the deposit in the Reserve Account of the Bond Fund of the Reserve Requirement for the Bonds; and (3) that all other conditions set forth in the Parity Conditions will have been met and satisfied before the Bonds are delivered 4o the initial purchaser. (e) Refunding Candidates. In order to realize a debt service savings to the City and its ratepayers, the City Council wishes to refund all or a portion of the Refunding Candidates. Chapter 39.53 RCW and other laws of the State authorize the City to cavy out the Refunding Plan. (f) Sufficiency of Gross Revenue; Due Regard. The City Council finds and determines that the Gross Revenue of the Waterworks Utility will be more than sufficient to (1) meet all Operating and Maintenance Expenses thereof (and the cost of maintenance and operation as contemplated by RCW 35.92.100), and the debt service requirements of the Outstanding Parity Bonds, and (2) permit the setting aside into the Bond Fund out of the Net Revenue of the Waterworks Utility of the City of amounts sufficient to pay the principal of and interest on the Bonds when due. The City Council declares that in creating the Bond Fund and in fixing the amounts to be paid into that fund, it has exercised due regard for Operating and Maintenance Expenses (and the cost of maintenance and operation contemplated by RCW 35.92.100) and the debt service requirements of the Outstanding Parity Bonds, and the City has not bound or obligated itself to set aside and pay into the Bond Fund a greater amount or proportion of the Gross Revenue of the Waterworks Utility of the City than in the judgment of the City Council will be available over and above such Operating and Maintenance Expenses and debt service requirements of the Outstanding Parity Bonds, and that the City has not pledged any portion of the Gross Revenue of the Waterworks Utility of the City for any indebtedness other than the Outstanding Parity Bonds. (g) Issuance of Bonds. Based on the foregoing, the City Council finds that it is in the best interest of the City to issue and sell the Bonds to the Purchaser, pursuant to the terms set forth in the Bond Purchase Agreement as approved by the Designated Representative consistent with this ordinance. -9- 51615205.7 Section 3. Plan of Additions. The City specifies, adopts and orders the carrying out of a system or plan of additions to and betterments and extensions of the Waterworks Utility consisting of the following improvements (the "Plan of Additions"), which are included and more particularly described in the City's Capital Improvement Plan 2018-2023 approved September 5, 2017: (a) Water system improvements, including pumping capacity and filter backwash capability improvements to the West Pasco Water Treatment Plant and water line replacement improvements in Richardson Road; and (b) Sewer system improvements, including suction valve, access hatch, pump and pipe improvements to the 9' and Washington lift station, transmission main improvements in the northwest area, Pearl Street lift station replacement, repair and relining improvements to the West Pasco trunk sewer transmission line, and other improvements identified in the capital facility plan for the wastewater treatment plant facility, as may be further developed and amended. There shall be included in the foregoing system or plan the acquisition and installation of all necessary valves, pumps, fittings, couplings, connections, equipment and appurtenances, and replacements and improvements necessary or desirable to maintain or increase the effectiveness of the service provided by such facilities, other improvements to and extensions of the Waterworks Utility, the acquisition of any easements, rights-of-way and land that may be required and the performance of such work as may be incidental and necessary. All of the foregoing shall be in accordance with the plans and specifications therefor prepared by the staff and consulting engineers of the City. The City Council may modify the details of the Plan of Additions where, in its judgment, it appears advisable if such modifications do not substantially alter the purposes of the Plan of Additions. The estimated cost of the acquisition, construction, installation and financing of the above-described improvements to be paid from the proceeds of the Bonds is declared to be approximately $9,995,000. Any excess proceeds of the Project Bonds remaining following payment of the costs of the Plan of Additions shall be applied to costs of other improvements to the Waterworks Utility of the City heretofore or hereafter approved in the City's Capital Budget Section 4. Authorization of the Bonds. The City is authorized to issue, sell and deliver water and sewer revenue bonds in one or more Series (as determined by the Designated Representative pursuant to the parameters for Final Terms set forth in Exhibit A, which is attached to this ordinance and incorporated by this reference) for the purpose of providing funds necessary to (a) pay costs of carrying out the Plan of Additions, (b) carry out the Refunding Plan; (c) make a deposit to the Reserve Account as needed to satisfy the Reserve Requirement and (d) pay the costs of issuance and sale of the Bonds. Section 5. Appointment of Designated Representative: Description of the Bonds. The Finance Director and the Deputy City Manager are each appointed as the Designated Representative of the City, both with the individual authority to conduct the sale of the Bonds in -10- 51615205.] the manner and upon the terms deemed most advantageous to the City, and to approve the Final Terms of the Bonds, with such additional terms and covenants as the Designated Representative deems advisable, within the parameters set forth in Exhibit A. Section 6. Reeistration and Transfer of Bonds. (a) Registration of Bonds; Bond Register. Each Bond shall be issued only in registered form as to both principal and interest, and the ownership of each Bond shall be recorded on the Bond Register. The Bond Register shall contain the name and mailing address of each Registered Owner and the principal amount and number of each Bond held by each Registered Owner. (b) Bond Registrar; Duties. The Fiscal Agent is appointed as initial Bond Registrar. The Bond Registrar shall keep, or cause to be kept, the Bond Register, which shall be open to inspection by the City at all rimes. 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 the System of Registration. The Bond Registrar shall be responsible for its representations contained in the Bond Registrar's Certificate of Authentication on each Bond. The Bond Registrar may become an Owner with the same rights it would have if it were not the Bond Registrar and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as members of, or in any other capacity with respect to, any committee formed to protect the rights of Owners. (c) Transfer or Exchange. A Bond surrendered to the Bond Registrar may be exchanged for a Bond or Bonds in any Authorized Denomination of an equal aggregate principal amount and of the same Series, interest rate and maturity. A Bond may be transferred only if endorsed in the manner provided thereon and surrendered to the Bond Registrar. Any exchange or transfer shall be without cost to the Owner or transferee. The Bond Registrar shall not be obligated to exchange any Bond or transfer registered ownership during the period between the applicable Record Date and the next upcoming interest payment or redemption date. (d) Securities Depository; Book -Entry Only Form. DTC is appointed as initial Securities Depository. Each Bond initially shall be registered in the name of Cede & Co., as the nominee of DTC. Each Bond registered in the name of the Securities Depository shall be held fully immobilized in book -entry only form by the Securities Depository in accordance with the provisions of the Letter of Representations. Registered ownership of any Bond registered in the name of the Securities Depository may not be transferred except: (i) to any successor Securities Depository; (ii) to any substitute Securities Depository appointed by the City; or (iii) to any person if the Bond is no longer to be held in book -entry only form. Upon the resignation of the Securities Depository, or upon a termination of the services of the Securities Depository by the City, the City may appoint a substitute Securities Depository. If (i) the Securities Depository resigns and the City does not appoint a substitute Securities Depository, or (ii) the City terminates the services of the Securities Depository, the Bonds no longer shall be held in book - entry only form and the registered ownership of each Bond may be transferred to any person as provided in this ordinance. -11- 51615205.) Neither the City nor the Bond Registrar shall have any obligation to participants of any Securities Depository or the persons for whom they act as nominees regarding accuracy of any records maintained by the Securities Depository or its participants. Neither the City nor the Bond Registrar shall be responsible for any notice that is permitted or required to be given to a Registered Owner except such notice as is required to be given by the Bond Registrar to the Securities Depository. Section 7. Form and Execution of Bonds. (a) Form of Bonds; Signatures and Seal. Each Bond shall be prepared in a form consistent with the provisions of this ordinance and State law. Each Bond shall be signed by the Mayor and the City Clerk, either or both of whose signatures may be manual or in facsimile, and the seal of the City or a facsimile reproduction thereof shall be impressed or printed thereon. If any officer whose manual or facsimile signature appears on a Bond ceases to be an officer of the City authorized to sign bonds before the Bond bearing his or her manual or facsimile signature is authenticated by the Bond Registrar, or issued or delivered by the City, that Bond nevertheless may be authenticated, issued and delivered and, when authenticated, issued and delivered, shall be as binding on the City as though that person had continued to be an officer of the City authorized to sign bonds. Any Bond also may be signed on behalf of the City by any person who, on the actual date of signing of the Bond, is an officer of the City authorized to sign bonds, although he or she did not hold the required office on its Issue Date. (b) Authentication. Only a Bond bearing a Certificate of Authentication in substantially the following form, manually signed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance: "Certificate of Authentication. This Bond is one of the fully registered City of Pasco, Washington, Water and Sewer Revenue [Bonds] [Refunding Bonds] [Improvement and Refunding Bonds], [2017] [2018] described in the Bond Ordinance." The authorized signing of a Certificate of Authentication shall be conclusive evidence that the Bond so authenticated has been duly executed, authenticated and delivered and is entitled to the benefits of this ordinance. Section 8. Payment of Bonds. Principal of and interest on each Bond shall be payable in lawful money of the United States of America. Principal of and interest on each Bond registered in the name of the Securities Depository is payable in the manner set forth in the Letter of Representations. Interest on each Bond not registered in the name of the Securities Depository is payable by electronic transfer on the interest payment date, or by check or draft of the Bond Registrar mailed on the interest payment date to the Registered Owner at the address appearing on the Bond Register on the Record Date. The City is not required to make electronic transfers except pursuant to a request by a Registered Owner in writing received on or prior to the Record Date and at the sole expense of the Registered Owner. Principal of each Bond not registered in the name of the Securities Depository is payable upon presentation and surrender of the Bond by the Registered Owner to the Bond Registrar. The Bonds are payable solely out of the Bond Fund and shall not be general obligations of the City. The Bonds are not subject to acceleration under any circumstances. -12- 51615205] Section 9. Redemption Provisions and Purchase of Bonds. (a) Optional Redemption. The Bonds shall be subject to redemption at the option of the City on terms acceptable to the Designated Representative, as set forth in the Bond Purchase Agreement, consistent with the parameters set forth in Exhibit A. (b) Mandatory Redemption. Each Bond that is designated as a Term Bond in the Bond Purchase Agreement, consistent with the parameters set forth in Exhibit A and except as set forth below, shall be called for redemption at a price equal to the stated principal amount to be redeemed, plus accrued interest, on the dates and in the amounts as set forth in the Bond Purchase Agreement. If a Tenn Bond is redeemed under the optional redemption provisions, defeased or purchased by the City and surrendered for cancellation, the principal amount of the Tenn Bond so redeemed, defeased or purchased (irrespective of its actual redemption or purchase price) shall be credited against one or more scheduled mandatory redemption installments for that Tenn Bond. The City shall determine the manner in which the credit is to be allocated and shall notify the Bond Registrar in writing of its allocation prior to the earliest mandatory redemption date for that Term Bond for which notice of redemption has not already been given. (c) Selection of Bonds for Redemption; Partial Redemption. If fewer than all of the outstanding Bonds are to be redeemed at the option of the City, the City shall select the Series and maturities to be redeemed. If fewer than all of the outstanding Bonds of a maturity of a Series are to be redeemed, the Securities Depository shall select Bonds registered in the name of the Securities Depository to be redeemed in accordance with the Letter of Representations, and the Bond Registrar shall select all other Bonds to be redeemed randomly in such manner as the Bond Registrar shall determine. All or a portion of the principal amount of any Bond that is to be redeemed may be redeemed in any Authorized Denomination. If less than all of the outstanding principal amount of any Bond is redeemed, upon surrender of that Bond to the Bond Registrar, there shall be issued to the Registered Owner, without charge, a new Bond (or Bonds, at the option of the Registered Owner) of the same Series, maturity and interest rate in any Authorized Denomination in the aggregate principal amount to remain outstanding. (d) Notice of Redemption. Notice of redemption of each Bond registered in the name of the Securities Depository shall be given in accordance with the Letter of Representations. Notice of redemption of each other Bond, unless waived by the Registered Owner, shall be given by the Bond Registrar not less than 20 nor more than 60 days prior to the date fixed for redemption by first-class mail, postage prepaid, to the Registered Owner at the address appearing on the Bond Register on the Record Date. The requirements of the preceding sentence shall be satisfied when notice has been mailed as so provided, whether or not it is actually received by an Owner. In addition, the redemption notice shall be mailed or sent electronically within the same period to the MSRB (if required under the Undertaking), to each Rating Agency, and to such other persons and with such additional information as the Finance Director shall determine, but these additional mailings shall not be a condition precedent to the redemption of any Bond. (e) Rescission of Optional Redemption Notice. In the case of an optional redemption, the notice of redemption may state that the City retains the right to rescind the redemption notice and the redemption by giving a notice of rescission to the affected Registered Owners at any time -13- 51615205.] on or prior to the date fixed for redemption. Any notice of optional redemption that is so rescinded shall be of no effect, and each Bond for which a notice of redemption has been rescinded shall remain outstanding. (f) Effect of Redemption. Interest on each Bond called for redemption shall cease to accrue on the date fixed for redemption, unless either the notice of optional redemption is rescinded as set forth above, or money sufficient to effect such redemption is not on deposit in the Bond Fund or in a trust account established to refund or defease the Bond. (g) Purchase of Bonds. The City reserves the right to purchase any or all of the Bonds offered to the City or in the open market at any time at any price acceptable to the City plus accrued interest to the date of purchase. Section 10. Failure to Pay Bonds. If the principal of any Bond is not paid when the Bond is properly presented at its maturity date or date fixed for redemption, the City shall be obligated to pay interest on that Bond at the same rate provided in the Bond from and after its maturity or date fixed for redemption 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, or in a trust account established to refund or defease the Bond, and the Bond has been called for payment by giving notice of that call to the Registered Owner. Section 11. Bond Fund: Payments into Bond Fund. The Bond Fund has been previously created and established as a special fund of the City known and designated as the Water and Sewer Revenue and Refunding Bond Redemption Fund, 1991, which fund has been divided into two accounts, namely, the Principal and Interest Account and the Reserve Account. So long as any Parity Bonds are outstanding against the Bond Fund, the Finance Director shall set aside and pay into the Bond Fund all ULID Assessments upon their collection and, out of the Net Revenue of the Waterworks Utility, certain fixed amounts without regard to any fixed proportion, namely, amounts, together with any ULID Assessments collected by the City and deposited into the applicable account in the Bond Fund and investment earnings in that account, as follows: (a) Into the Principal and Interest Account, on or before each interest or principal and interest payment date, an amount equal to the interest or the principal and interest to become due and payable on that interest or principal and interest payment date of all Parity Bonds; and (b) Into the Reserve Account, on the Issue Date of the Bonds, an amount sufficient, together with the Reserve Insurance, to fully fund the Reserve Requirement for all Parity Bonds. Money deposited in the Reserve Account for the Reserve Requirement for all Parity Bonds may be decreased for any issue of Parity Bonds when and to the extent the City has provided for an Alternate Security or Reserve Insurance for those bonds. When the 2009 Bonds, 2010A Bonds, 2010T Bonds, 2013A Bonds, 2013T Bonds are no longer outstanding, the following paragraph shall become effective: The City may establish, for one or more series of Future Parity Bonds, a separate reserve requirement (which may be zero), to be held in a separate reserve account, for the purpose of securing those Future Parity Bonds, -14- 51615205.'1 and those Future Parity Bonds shall not be secured by amounts in the Reserve Account or by any Reserve Insurance credited to the Reserve Account. The City may establish additional accounts in the Bond Fund for the deposit of ULID Assessments after the deposit of the required amount in the other funds. The Reserve Account for any Future Parity Bonds may be accumulated from any other funds which the City legally may have available for such purpose in addition to using ULID Assessments and Net Revenue of the Waterworks Utility. The City fiuther agrees that when the required amounts have been paid into the Reserve Account in the Bond Fund, the City will maintain those amounts therein at all times, except for withdrawals therefrom as authorized herein, until there is sufficient money in the Bond Fund, including the Reserve Account therein, to pay the principal of and interest to maturity on all outstanding bonds payable from the Bond Fund, at which time no firther payments need be made into the Bond Fund, and the money in the Bond Fund, including the Reserve Account, may be used to pay that principal and interest. If there shall be a deficiency in the Principal and Interest Account to meet maturing installments of either principal or interest, as the case may be, on the Bonds, the deficiency shall be made up from the Reserve Account by first the withdrawal of cash and investments therefrom and after all cash and investments have been depleted, then by the draws on the Reserve Insurance for that purpose on a pro rata basis. Any deficiency created in the Reserve Account by reason of any withdrawal shall then be made up from the Net Revenue of the Waterworks Utility first available after making necessary provisions for the required payments into the Principal and Interest Account. The Reserve Insurer shall be reimbursed first, within one year, to reinstate the Reserve Insurance, before the balance of the Reserve Requirement is restored. All money in the Reserve Account not needed to meet the payments of principal and interest when due may be kept on deposit in the official bank depository of the City or in any national bank or may be invested in any legal investment for City fiords maturing not later than the interest or principal and interest payment date when the money will be needed. Interest on any of those investments or on that bank account shall be deposited in and become a part of the Reserve Account until the Reserve Requirement shall have been accumulated therein, after which time the interest shall be deposited in the Principal and Interest Account. Notwithstanding the provisions for the deposit or maintenance of earnings in accounts of the Bond Fund, any earnings which are subject to a federal tax or rebate requirement may be withdrawn from the Bond Fund for deposit into a separate fund or account for that purpose. If the City shall fail to set aside and pay into the Bond Fund the amounts which it has obligated itself by this section to set aside and pay therein, the Owner of any Bond may bring suit against the City to compel it to do so. Section 12. Pledge, Lien and Charge for Payment of the Bonds. The Net Revenue of the Waterworks Utility and ULID Assessments are pledged to the payment of the principal of and interest on the Bonds when due and shall constitute a lien and charge upon that Net Revenue of the Waterworks Utility and ULID Assessments prior and superior to any other charges -15- 51615205.] whatsoever, except that the lien and charge upon such Net Revenue and ULID Assessments for the Bonds shall be on a parity with the lien and charge thereon for any outstanding Panty Bonds. Section 13. Flow of Funds. Funds in the Water and Sewer Revenue Fund shall be used in the following order of priority: (1) To pay Operating and Maintenance Expenses; (2) To make all payments required to be made into the Bond Fund to pay and secure the payment of the Annual Debt Service on all outstanding Panty Bonds; (3) To make all payments required to be made into the Reserve Account and to make all payments (principal and interest) required to be made in connection with Reserve Insurance and any Alternate Security, except if there is not sufficient money to make all payments for Reserve Insurance and any Alternate Security, the payments shall be made on a pro rata basis with deposits in the Reserve Account; (4) To make all payments required to be made into the loan redemption funds or accounts, and other revenue bond redemption funds created to pay the debt service on any revenue obligation having a lien upon the Net Revenue of the Waterworks Utility subordinate to the lien of the Bonds; and (5) To make necessary additions, betterments, improvements or repairs to the Waterworks Utility, and to retire by redemption or purchase any outstanding Panty Bonds, or for any other lawful purpose. Section 14. Covenants. The City covenants and agrees with the owner of each of the Bonds as follows: (a) It will not sell, lease, mortgage, or in any manner encumber or dispose of all the properties of the Waterworks Utility unless provision is made for payment into the Bond Fund of an amount sufficient either to defease all outstanding Parity Bonds or to pay the principal of and interest on all the outstanding Parity Bonds in accordance with the terms thereof; and further binds itself irrevocably not to mortgage, sell, lease or in any manner dispose of any part of the Waterworks Utility that is used, useful and material to the operation of such utility unless provision is made for replacement thereof or for payment into the Bond Fund of an amount which shall bear the same ratio to the amount of outstanding Panty Bonds as the Net Revenue available for debt service for such bonds for the twelve months preceding such sale, lease, encumbrance or disposal from the portion of the Waterworks Utility so leased, encumbered or disposed of bears to the Net Revenue available for debt service for such bonds from the entire Waterworks Utility for the same period. Any such money so paid into the Bond Fund shall be used to retire outstanding Parity Bonds at the earliest possible date. (b) It will maintain and keep the Waterworks Utility in good repair, working order and condition and to operate such utility and the business in connection therewith in an efficient manner and at a reasonable cost. -16- 51615205.] (c) It will maintain and collect such rates as will produce sufficient Net Revenue of the Waterworks Utility, together with ULID Assessment collections, as will make available for the payment of the principal of and interest on the Parity Bonds as they come due and for payments as required to be made into the Reserve Account therein an amount at least equal to the Coverage Requirement and, in addition thereto, that it will pay all Operating and Maintenance Expenses and otherwise meet the obligations of the City as herein set forth. (d) It will keep proper books of accounts and records separate and apart from other accounts and records, in which complete and correct entries will be made of all transactions relating to the Waterworks Utility of the City, and it will make available to any Owner on written request the annual operating and income statements of the Waterworks Utility. (e) Except to aid the poor or infirm, to provide for resource conservation or to provide for the proper handling of hazardous materials, it will not fiunish water or sewerage service to any customer whatsoever free of charge and it shall, not later than 60 days after the end of each calendar year, take such legal action as may be feasible to enforce collection of all collectible delinquent accounts and, in addition thereto, shall promptly avail itself of its utility lien rights, as set forth in applicable statutes. (f) It will carry the types of insurance on its Waterworks Utility properties in the amounts normally carred by private water and sewer companies engaged in the operation of water and sewerage systems, and the cost of such insurance shall be considered a part of Operating and Maintenance Expenses, or it will implement and maintain a self-insurance program or an insurance pool program with reserves adequate, in the judgment of the City Council, to protect the owners of the Parity Bonds against loss. (g) To the extent permitted by State law, it will maintain its corporate identity and existence so long as any Bonds remain outstanding. (h) It will not grant any competing utility service franchise and will use all legal means to prevent competition with the Waterworks Utility. (i) If on the first day of January in any year, two installments of any ULID Assessment are delinquent, or the final installment of any ULID Assessment has been delinquent for more than one year, the City shall proceed with the foreclosure of the delinquent assessment or delinquent installments thereof in the manner provided by law. Section 15. Provisions for Future Parity Bonds. The City reserves the right to issue Future Parity Bonds if the Parity Conditions set forth in Exhibit B are met and complied with at the time of the issuance of those Future Parity Bonds. Nothing herein contained shall prevent the City from issuing Future Parity Bonds to refund any maturing Parity Bonds then outstanding, money for the payment of which is not otherwise available. Nothing herein contained shall prevent the City from issuing revenue bonds or incurring other obligations that are a charge upon the Net Revenue of the Waterworks Utility of the City subordinate or inferior to the payments required to be made therefrom into the Bond Fund for the -17- ciricuM payment of Parity Bonds or from pledging the payment of utility local improvement district assessments into a redemption fund created for the payment of the principal of and interest on those subordinate lien bonds or obligations as long as such utility local improvement district assessments are levied for improvements constructed from the proceeds of those subordinate lien bonds or obligations. Section 16. Tax Covenants. (a) 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 that will cause interest on the Bonds to be included in gross income for federal income tax purposes. The City also covenants that it will, to the extent the arbitrage rebate requirements of Section 148 of the Code are applicable to the Bonds, take all actions necessary to comply (or to be treated as having complied) with those requirements in connection with the Bonds. (b) Post -Issuance Compliance. The Finance Director is authorized and directed to review and update the City's written procedures to facilitate compliance by the City with the covenants in this ordinance and the applicable requirements of the Code that must be satisfied after the Issue Date to prevent interest on the Bonds from being included in gross income for federal tax purposes. (c) Designation of Bonds as "Qualified Tax -Exempt Obligations. " The Designated Representative may designate the Bonds as "qualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the Code, if the following conditions are met: (1) the Bonds are not "private activity bonds" within the meaning of Section 141 of the Code; (2) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) that the City and any entity subordinate to the City (including any entity that the City controls, that derives its authority to issue tax-exempt obligations from the City, or that issues tax-exempt obligations on behalf of the City) will issue during the calendar year in which the Bonds are issued will not exceed $10,000,000; and (3) 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. Section 17. Refundine or Defeasance of Bonds. The City may issue refunding bonds pursuant to State law or use money available from other lawful sources to carry out a refunding or defeasance plan, which may include (a) paying when due the principal of and interest on any or all of the Bonds (the "defeased Bonds"); (b) redeeming the defeased Bonds prior to their maturity; and (c) paying the costs of the refunding or defeasance. If the City sets aside in a -18- 51615205.) special trust fund or escrow account irrevocably pledged to that redemption or defeasance (the "trust account"), money and/or Government Obligations maturing at a time or times and bearing interest in amounts sufficient to redeem, refund or defease the defeased Bonds in accordance with their terms, then all right and interest of the Owners of the defeased Bonds in the covenants of this ordinance and in the Gross Revenue of the Waterworks Utility, ULID Assessments, funds and accounts obligated to the payment of the defeased Bonds, other than the right to receive the funds so set aside and pledged, shall cease and become void. Thereafter, the Owners of defeased Bonds shall have the right to receive payment of the principal of and interest on the defeased Bonds solely from the trust account and the defeased Bonds shall be deemed no longer outstanding. In that event, the City may apply money remaining in any fund or account (other than the trust account) established for the payment or redemption of the defeased Bonds to any lawful purpose, subject only to the rights of the Owners of any other Parity Bonds then outstanding. 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 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 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 plan, shall be included in the computation of the Coverage Requirement for the issuance of Future Parity Bonds and the annual computation of the Coverage Requirement for determining compliance with the rate covenants. Section 18. Deposit of Bond Proceeds; Creation of Construction Accounts. Immediately upon the issuance and delivery of the Bonds, the City shall cause the following to occur: (a) Reserve Account. Proceeds of the Bonds as needed to satisfy the Reserve Requirement shall either be deposited in the Reserve Account or used to acquire Reserve Insurance in an amount sufficient to satisfy the Reserve Requirement with respect to the Bonds. (b) Refunding Plan. The remaining proceeds of the Refunding Bonds shall be deposited with the Refunding Trustee as set forth in Section 19. (c) Construction Accounts. The Finance Director is authorized to establish one or more special accounts within the Water/Sewer Fund, designated as the Construction Accounts. The remaining proceeds of the Project Bonds shall be paid into the Construction Accounts and used to pay the costs of the Plan of Additions and the costs of issuing the Project Bonds (if not included in the Refunding Plan). Until needed to pay those costs, the City may invest principal proceeds deposited in the Construction Accounts temporarily in any legal investment, and the investment earnings may be retained in such accounts and be spent for the purposes of those accounts, except that earnings subject to a federal tax or rebate requirement may be withdrawn therefrom and used for those tax or rebate purposes. -19- 51615205.7 Section 19. Use of Refunding Proceeds; the Refunding Plan. (a) Appointment of Refunding Trustee. The Designated Representative is authorized and directed to appoint a financial institution to serve as the Refunding Trustee and to perform the duties of Refunding Trustee under this ordinance. (b) Selection of Refunded Bonds. The Designated Representative is authorized and directed to select the Refunding Candidates to be refunded by the Bonds. The Designated Representative may choose to refund fewer than all of the Refunding Candidates. The Refunded Bonds, as selected by the Designated Representative, shall be identified in the Refunding Plan set forth in the Refunding Trust Agreement. (c) Use of Refunding Proceeds; Purchase of Acquired Obligations. On the Issue Date, sufficient proceeds of the sale of the Refunding Bonds, together with any City Contribution, shall be deposited with the Refunding Trustee and used to discharge the obligations of the City relating to the Refunded Bonds under the applicable Parity Bond Ordinances 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 the Acquired Obligations, bearing such interest and maturing as to principal and interest in such amounts and at such times so as to provide, together with a beginning cash balance, if necessary, for the payment of the amount required to be paid by the Refunding Plan. The Acquired Obligations shall be listed and more particularly described in a schedule attached to the Refunding Trust Agreement, but are subject to substitution as set forth below. The Designated Representative is authorized and directed to approve the Acquired Obligations, if any, to be purchased. Any Project Bond proceeds deposited with the Refunding Trustee and not used to pay the costs of issuance of the Project Bonds shall be returned to the City for deposit in the Construction Accounts. Any Refunding Bond proceeds or other money deposited with the Refunding Trustee not needed to carry out the Refunding Plan shall be returned to the City for deposit in the Principal and Interest Account to pay interest on the Refunding Bonds on the next upcoming interest payment date. (d) Substitution of Acquired Obligations. The City reserves the right at any time to substitute cash or other direct, noncallable obligations of the United States of America ("Substitute Obligations") for any of the Acquired Obligations if the City obtains (1) an opinion of Bond Counsel to the effect that the interest on the Refunding Bonds and the Refunded Bonds will remain excluded from gross income for federal income tax purposes under Sections 103, 148 and 149(d) of the Code, and (2) a verification by a nationally recognized independent certified public accounting firm that such substitution will not impair the timely payment of the amounts required to be paid by the Refunding Plan. 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 purpose. (e) Administration of Refunding Plan. The Refunding Trustee is authorized and directed to purchase the Acquired Obligations (or Substitute Obligations) and to make the -20- 51615205.7 payments required to be made pursuant to the Refunding Plan from the Acquired Obligations (or Substitute Obligations) and money deposited with the Refunding Trustee pursuant to this ordinance and the Refunding Trust Agreement. All Acquired Obligations (or Substitute Obligations) and money deposited with the Refunding Trustee and any income therefrom shall be held irrevocably, invested and applied in accordance with the provisions of the applicable Parity Bond Ordinance authorizing the Refunded Bonds, this ordinance, chapter 39.53 RCW and other applicable laws of the State and the Refunding Trust Agreement. All necessary and proper fees, compensation and expenses of the Refunding Trustee and all other costs incidental to the setting up of the escrow to accomplish the Refunding Plan and costs related to the issuance, sale and delivery of the Bonds, including bond printing, rating agency fees, verification fees, Bond Counsel's fees and other related expenses, shall be paid out of the proceeds of the Bonds. (0 Authorization for Refunding Trust Agreement. To carry out the Refunding Plan, the Designated Representative is authorized and directed to execute and deliver to the Refunding Trustee the Refunding Trust Agreement setting forth the duties, obligations and responsibilities of the Refunding Trustee in connection with the payment, redemption and retirement of the 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. (g) Call for Redemption of the Refunded Bonds. The Designated Representative is authorized to call the Refunded Bonds for redemption on their applicable Redemption Dates at par, plus accrued interest. Such call for redemption shall be irrevocable after the delivery of the Bonds to the Purchaser. The Refunding Trustee is authorized and directed to give or cause to be given such notices as required, at the times and in the manner required, pursuant to the ordinances authorizing the issuance of the Refunded Bonds and the Refunding Trust Agreement to carry out the Refunding Plan. (h) Additional Finding with Respect to Refunding. Prior to the execution and delivery of the Bond Purchase Agreement, the Designated Representative shall determine, on behalf of the City, that the issuance, sale and delivery of the Refunding Bonds will effect a net present value savings to the City and its ratepayers as set forth in paragraph (i)(2) of Exhibit A. The City Council finds and determines that such net present value savings is a substantial savings and that achieving such net present value savings by issuing the Bonds is in the best interest of the City and in the public interest. In making the finding and determination that the issuance, sale and delivery of the Bonds will effect such net present value savings, the Designated Representative shall give consideration to the fixed maturities of the Refunding Bonds and the Refunded Bonds, the costs related to the issuance, sale and delivery of the Refunding Bonds and the known earned income from the investment of the proceeds of the issuance and sale of the Refunding Bonds and the City Contribution, if any, used in the Refunding Plan pending payment and redemption of the Refunded Bonds. The Designated Representative further shall find and determine that the money to be deposited with the Refunding Trustee to carry out the Refunding Plan will discharge and satisfy the obligations of the City under the applicable Parity Bond Ordinance, and the pledges, charges, trusts, covenants and agreements of the City therein made or provided for as to the Refunded Bonds, and that the Refunded Bonds will no longer be deemed to be outstanding under -21- 51615205.7 applicable Parity Bond Ordinance immediately upon the deposit of such money with the Refunding Trustee. Section 20. Sale and Delivery of the Bonds. (a) Manner of Sale of Bonds; Delivery of Bonds. It is anticipated that each Series of Bonds will be sold by negotiated sale to the Purchaser and that the Purchaser will present a Bond Purchase Agreement to the City offering to purchase each or multiple Series of Bonds. The Designated Representative is authorized on the City's behalf to accept the Final Terms of, and execute, one or more Bond Purchase Agreements, based on the assessment of the Designated Representative of market conditions, in consultation with appropriate City officials and staff, Bond Counsel and other advisors, and so long as the terms provided therein are consistent with the terms of this ordinance. In accepting the Final Terms, the Designated Representative shall take into account those factors that, in the judgment of the Designated Representative, may be expected to result in the lowest true interest cost to the City. The Bond Purchase Agreement shall set forth the Final Terms of each Series of Bonds. (b) Preparation, Execution and Delivery of the Bonds. The Bonds will be prepared at City expense and will be delivered to the Purchaser in accordance with the Bond Purchase Agreement, together with the approving legal opinion of Bond Counsel regarding the Bonds. Section 21. Official Statement; Continuing Disclosure. (a) Preliminary Official Statement Deemed Final. The Designated Representative shall review and, if acceptable to him or her, approve the preliminary Official Statement prepared in connection with the sale of the Bonds to the public. For the sole purpose of the Purchaser's compliance with paragraph (b)(1) of Rule 15c2-12, the Designated Representative is authorized to deem that preliminary Official Statement final as of its date, except for the omission of information permitted to be omitted by Rule 15c2-12. The City approves the distribution to potential purchasers of the Bonds of a preliminary Official Statement that has been approved by the Designated Representative and been deemed final, if applicable, in accordance with this subsection. (b) Approval of Final Official Statement. The City approves the preparation of a final Official Statement for the Bonds to be sold to the public in the form of the preliminary Official Statement that has been approved and deemed final in accordance with subsection (a), with such modifications and amendments as the Designated Representative deems necessary or desirable, and further authorizes the Designated Representative to execute and deliver such final Official Statement to the Purchaser. The City authorizes and approves the distribution by the Purchaser of the final Official Statement so executed and delivered to purchasers and potential purchasers of the Bonds. (c) Undertaking to Provide Continuing Disclosure. If necessary to meet the requirements of paragraph (b)(5) of Rule 15c2-12, as applicable to the Purchaser acting as a participating underwriter for the Bonds, the Designated Representative is authorized to execute a written undertaking to provide continuing disclosure for the benefit of holders of the Bonds in substantially the form attached as Exhibit C. -22- 51615205.] Section 22. General Authorization and Ratification. The Designated Representative and other appropriate officers of the City are severally authorized to take such actions and to execute such documents as in their judgment may be necessary or desirable to cavy out the transactions contemplated in connection with this ordinance, and to do everything necessary for the prompt delivery of the Bonds to the Purchaser and for the proper application, use and investment of the proceeds of the Bonds. All actions taken prior to the effective date of this ordinance in furtherance of the purposes described in this ordinance and not inconsistent with the terms of this ordinance are ratified and confirmed in all respects. Section 23. Severabilitv. The provisions of this ordinance are declared to be separate and severable. If a court of competent jurisdiction, all appeals having been exhausted or all appeal periods having run, finds any provision of this ordinance to be invalid or unenforceable as to any person or circumstance, such offending provision shall, if feasible, be deemed to be modified to be within the limits of enforceability or validity. However, if the offending provision cannot be so modified, it shall be null and void with respect to the particular person or circumstance, and all other provisions of this ordinance in all other respects, and the offending provision with respect to all other persons and all other circumstances, shall remain valid and enforceable. Section 24. Effective Date of Ordinance. This ordinance shall take effect and be in force from and after its passage and five days following its publication as provided by law. PASSED by the City Council and APPROVED by the Mayor of the City of Pasco, Washington, at a regular open public meeting, tjhis 200' day of November, 2017. FOMatt Watkins, Mayor A ST: Daniela Erickson, City Clerk APPROVED AS TO FORM: d' Foster Pepper PLLC Bond Counsel -23- 51615205] EXHIBIT A PARAMETERS FOR FINAL TERMS (i) Principal Amount. The Bonds may be issued in one or more Series and shall not exceed the aggregate principal amount of $10,000,000. (ii) Date or Dates. Each Bond shall be dated its Issue Date, which date may not be later than December 31, 2018. (iii) Denominations, Name, etc. The Bonds shall be issued in Authorized Denominations and shall be numbered separately in the manner and shall bear any name and additional designation as deemed necessary or appropriate by the Designated Representative. (iv) Interest Rate(s). Each Bond shall bear interest at a fixed rate per annum (computed on the basis of a 360 -day year of twelve 30 -day months) from the Issue Date or from the most recent date for which interest has been paid or duly provided for, whichever is later. One or more rates of interest may be fixed for each Bond or any Series of Bonds. No rate of interest for any Bond or any Series of Bonds may exceed 5.50%, and the true interest cost to the City for each Series of Bonds may not exceed 5.00%. (v) Payment Dates. Interest shall be payable semiannually on each June 1 and December 1 (or such other semiannual dates acceptable to the Designated Representative), commencing no later than the next such semiannual date following the Issue Date of such Series of Bonds. Principal payments shall commence on a date acceptable to the Designated Representative and shall be payable at maturity or in mandatory redemption installments annually thereafter, on dates acceptable to the Designated Representative. (vi) Final Maturity. The final maturity date of the Project Bonds following allocation, if necessary under (xi) below, shall be no later than the date that is 30 years after the Issue Date. The final maturity date of the Refunding Bonds following allocation, if necessary under (xi) below, shall be no later than the final maturity date of the Refunded Bonds refunded by such Refunding Bonds. (vii) Redemption Rights. The Designated Representative may approve in the Bond Purchase Agreement provisions for the optional and mandatory redemption of Bonds, subject to the following: (1) Optional Redemption. Any Bond may be designated as being (A) subject to redemption at the option of the City prior to its maturity date on the dates and at the prices set forth in the Bond Purchase Agreement; or (B) not subject to redemption prior to its maturity date. If a Bond is subject to optional redemption prior to its maturity, it must be subject to such redemption on one or more dates occurring not more than 10'/2 years after the Issue Date. (2) Mandatory Redemption. Any Bond may be designated as a Term Bond, subject to mandatory redemption prior to its maturity on the dates and in the amounts set forth in the Bond Purchase Agreement. A-1 51615205.] (viii) Price. No rate of interest for any Bond or any Series of Bonds may exceed 98%, and the true interest cost to the City for each Series of Bonds may not exceed 130%. (ix) Section 265(b)(3) Designation. Pursuant to Section 16(c) of this ordinance, the Designated Representative may designate any qualifying Series of Bonds as "qualified - tax exempt obligations" for purposes of Section 265(b)(3) of the Code. (x) Selection of Refunded Bonds. Under the terms and conditions of this ordinance, the Designated Representative is authorized to select the Refunded Bonds to be refunded by the Refunding Bonds. Refunded Bonds, as selected by the Designated Representative, shall be identified in the applicable Bond Purchase Agreement and/or the applicable Refunding Trust Agreement. (xi) Allocation of Bonds. For any combined Series of Bonds, the Designated Representative shall allocate the maturing principal amounts to the Project Bonds and the Refunding Bonds in such manner as will comply with applicable requirements of the Code, meet restrictions of State law and effectuate any other allocation deemed necessary or advisable for accounting and debt administration purposes. (xii) Minimum Savings. Each Series of Refunding Bonds shall produce a minimum net present value savings to the City and its ratepayers of 5.00% (as a percentage of the Refunded Bonds refunded by such Series of Refunding Bonds). Net present value savings means the aggregate difference between (i) annual debt service on the Refunded Bonds, less (ii) annual debt service on the Refunding Bonds (including expenses related to costs of issuance of such Refunding Bonds) discounted to the Issue Date using the yield on the Bonds as the discount rate, plus (iii) excess cash, if any distributed to the City on the Issue Date, and less (iv) the amount of the City Contribution, if any, made on such Issue Date. (xiii) Other Terms and Conditions. (1) The Designated Representative may determine whether it is in the City's best interest to provide for bond insurance or other credit enhancement; and may accept such additional terms, conditions and covenants as he or she may determine are in the best interests of the City, consistent with this ordinance. (2) The Designated Representative must have determined that the Parity Conditions have been met and satisfied as of the Issue Date of the Bonds. A-2 51615205.] EXHIBIT B PARITY CONDITIONS (a) There shall be no deficiency in the Bond Fund. (b) The ordinance providing for the issuance of the Future Parity Bonds shall provide that all ULID Assessments shall be paid directly into the Bond Fund, except for any prepaid assessments permitted by law to be paid into a construction fund or account. (c) The ordinance providing for the issuance of such Future Parity Bonds shall provide for the deposit into the Reserve Account (if such Future Parity Bonds are secured by the Reserve Account) of (i) an amount equal to the Reserve Requirement for those Future Parity Bonds from the Future Parity Bond proceeds, or (ii) Reserve Insurance or Alternate Security or an amount plus Reserve Insurance or Alternate Security equal to the Reserve Requirement for those Future Parity Bonds, or (iii) to the extent that the Reserve Requirement is not funded from Future Parity Bond proceeds or Reserve Insurance or Alternate Security at the time of issuance of those Future Parity Bonds, by no later than the fifth anniversary date from the dated date of the respective issue of Future Parity Bonds from ULID Assessments, if any, levied and first collected for the payment of the principal of and interest on those Future Parity Bonds and, to the extent that ULID Assessments are insufficient, then from the Net Revenue of the Waterworks Utility in approximately equal annual payments, the Reserve Requirement for those Future Parity Bonds. No Reserve Insurance or Alternate Security may be used to satisfy the Reserve Requirement for Future Parity Bonds unless (i) the insurance policy or Alternate Security is non- cancelable and (ii) the insurer or provider of the Alternate Security as of the time of issuance of such insurance or Alternate Security is rated in the highest rating categories by both Moody's Investors Service, Inc., and Standard & Poor's Ratings Services; however, when the 2009 Bonds, 2010A Bonds, 2010T Bonds, 2013A Bonds, 2013T Bonds are no longer outstanding, the Reserve Insurance or Alternate Security may be rated as of the time of issuance of such insurance or Alternate Security in one of the two -highest categories by either Moody's Investors Service, Inc., or S&P Global. (d) The ordinance authorizing the issuance of such Future Parity Bonds shall provide for the payment of mandatory redemption or sinking fund requirements into the Bond Fund for any Term Bonds to be issued and for regular payments to be made for the payment of the principal of such Term Bonds on or before their maturity, or, as an alternative, the mandatory redemption of those Term Bonds prior to their maturity date from money in the Principal and Interest Account. (e) There shall be on file from a licensed professional engineer experienced in the design, construction and operation of municipal utilities, or from an independent certified public accountant, a certificate showing that in his or her professional opinion the Net Revenue of the Waterworks Utility for any 12 consecutive calendar months out of the immediately preceding 24 calendar months shall be equal to the Coverage Requirement for each year thereafter, except that such certificate may be provided by a City representative if it is based solely upon actual historical Net Revenue of the Waterworks Utility without any adjustment. B-1 51615205.] The certificate, in estimating the Net Revenue of the Waterworks Utility available for debt service, shall use the historical Net Revenue of the Waterworks Utility for any 12 consecutive months out of the 24 months immediately preceding the month of delivery of the Future Parity Bonds. Net Revenue of the Waterworks Utility may be adjusted to reflect: (1) Any changes in rates in effect and being charged or expressly adopted by ordinance to take effect within 180 days after the date of this Certificate; (2) Income derived from customers of the Waterworks Utility that have become customers during the 12 consecutive month period or thereafter adjusted to reflect one year's net revenue from those customers; (3) Revenue from any customers to be connected to the Waterworks Utility who have paid the required connection charges; (4) Revenue received or to be received which is derived from any person, firm, corporation or municipal corporation under any executed contract for water, sewage disposal or other utility service, which revenue was not included in the historical Net Revenue of the Waterworks Utility; (5) The engineer's or accountant's estimate of the Net Revenue of the Waterworks Utility to be derived from customers to connect within 180 days after the date of the completion of the additions to and improvements and extensions of the Waterworks Utility to be paid for out of the proceeds of the sale of the additional Future Parity Bonds or from other additions to and improvements and extensions of the Waterworks Utility then under construction and not fully connected to the facilities of the Waterworks Utility when such additions, improvements and extensions are completed; and (6) Any increases or decreases in Net Revenue as a result of any actual or reasonably anticipated changes in Operating and Maintenance Expense subsequent to the 12 month period. 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 amount required for the payment of the principal and interest in each year for the refunding bonds is not increased over the amount for that year required for the bonds to be refunded thereby and if the maturities of such refunding bonds are not extended beyond the maturities of the bonds to be refunded thereby. Prior: Ordinance No. 3915, Section 18 (2009 Bonds) Ordinance No. 3962, Section 21 (2010A Bonds; 2010T Bonds) Ordinance No. 4126, Section 16 (2013A Bonds; 2013T Bonds) Ordinance No. 4254, Section 15 (2015 Bonds) B-2 51615205.7 EXHIBIT C [Form of] UNDERTAKING TO PROVIDE CONTINUING DISCLOSURE City of Pasco, Washington [Name of Series] The City of Pasco, Washington (the "City"), makes the following written Undertaking for the benefit of holders of the above -referenced bonds (the "Bonds"), for the sole purpose of assisting the Purchaser in meeting the requirements of paragraph (b)(5) of Rule 15c2-12, as applicable to a participating underwriter for the Bonds. Capitalized terms used but not defined below shall have the meanings given in Ordinance No. 4365 of the City (the "Bond Ordinance"). (a) Undertaking to Provide Annual Financial Information and Notice of Listed Events. The City undertakes to provide or cause to be provided, either directly or through a designated agent, to the MSRB, in an electronic format as prescribed by the MSRB, accompanied by identifying information as prescribed by the MSRB: (i) Annual financial information and operating data of the type included in the final official statement for the Bonds and described in paragraph (b)(i) ("annual financial information'); (ii) Timely notice (not in excess of 10 business days after the occurrence of the event) of the occurrence of any of the following events with respect to the Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notice of Proposed Issue (IRS Form 5701 — TEB) or other material notices or determinations with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds; (7) modifications to rights of holders of the Bonds, if material; (8) bond calls (other than scheduled mandatory redemptions of Term Bonds), if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the City, as such "Bankruptcy Events" are defined in Rule 15c2-12; (13) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) appointment of a successor or additional trustee or the change of name of a trustee, if material. C-1 51615205.] (iii) Timely notice of a failure by the City to provide required annual financial information described in paragraph (b)(i) on or before the date specified in paragraph (b)(ii). (b) Type of Annual Financial Information Undertaken to be Provided. The annual financial information that the City undertakes to provide in paragraph (a): (i) Shall consist of (1) annual financial statements prepared (except as noted in the financial statements) in accordance with applicable generally accepted accounting principles applicable to local governmental units of the State such as the City, as such principles may be changed from time to time; (2) a statement of authorized, issued and outstanding bonded debt secured by the Net Revenue of the Waterworks Utility; (3) debt service coverage ratios; and (4) general customer statistics for the Waterworks Utility; (ii) Shall be provided not later than the last day of the ninth month after the end of each fiscal year of the City (currently, a fiscal year ending December 31), as such fiscal year may be changed as required or permitted by State law, commencing with the City's fiscal year ending December 31, 2017; and (iii) May be provided in a single or multiple documents, and may be incorporated by specific reference to documents available to the public on the Internet website of the MSRB or filed with the SEC. If not submitted as part of the annual financial information described in paragraph (b)(i) above, the City will provide or cause to be provided to the MSRB audited financial statements, when and if available. (c) Amendment of Undertaking. This Undertaking is subject to amendment after the primary offering of the Bonds without the consent of any holder of any Bond, or of any broker, dealer, municipal securities dealer, participating underwriter, Rating Agency or the MSRB, under the circumstances and in the manner permitted by Rule 15c2-12. The City will give notice to the MSRB of the substance (or provide a copy) of any amendment to the Undertaking and a brief statement of the reasons for the amendment. If the amendment changes the type of annual financial information to be provided, the annual financial information containing the amended financial information will include a narrative explanation of the effect of that change on the type of information to be provided. (d) Beneficiaries. This Undertaking shall inure to the benefit of the City and the holder of each Bond, and shall not inure to the benefit of or create any rights in any other person. (e) Termination of Undertaking. The City's obligations under this Undertaking shall terminate upon the legal defeasance, maturity or prior redemption of all of the Bonds. In addition, the City's obligations under this Undertaking shall terminate if the provisions of Rule 15c2-12 that require the City to comply with this Undertaking become legally inapplicable in respect of the Bonds for any reason, as confirmed by an opinion of Bond Counsel delivered to the City, and the City provides timely notice of such termination to the MSRB. C-2 5161520.5.] (f) Remedy for Failure to Comply with Undertaking. As soon as practicable after the City learns of any failure to comply with this Undertaking, the City will proceed with due diligence to cause such noncompliance to be corrected. No failure by the City or other obligated person to comply with this Undertaking shall constitute a default in respect of the Bonds. The sole remedy of any holder of a Bond shall be to take action to compel the City or other obligated person to comply with this Undertaking, including seeking an order of specific performance from an appropriate court. (g) Designation of Official Responsible to Administer Undertaking. The Finance Director or his or her designee is the person designated, in accordance with the Bond Ordinance, to carry out the Undertaking in accordance with Rule 15c2-12, including, without limitation, the following actions: (i) Preparing and filing the annual financial information undertaken to be provided; (ii) Determining whether any event specified in paragraph (a) has occurred, assessing its materiality, where necessary, with respect to the Bonds, and preparing and disseminating any required notice of its occurrence; (iii) Determining whether any person other than the City is an "obligated person' within the meaning of Rule 15c2-12 with respect to the Bonds, and obtaining from such person an undertaking to provide any annual financial information and notice of listed events for that person required under Rule 15c2-12; (iv) Selecting, engaging and compensating designated agents and consultants, including financial advisors and legal counsel, to assist and advise the City in carrying out this Undertaking; and (v) Effecting any necessary amendment of this Undertaking. C-3 51615205.] CERTIFICATION I, the undersigned, City Clerk of the City of Pasco, Washington (the "City"), hereby certify as follows: 1. The attached copy of Ordinance No. 4365 (the "Ordinance") is a full, true and correct copy of an ordinance duly passed at a regular meeting of the City Council of the City held at the regular meeting place thereof on November 20, 2017, as that ordinance appears on the minute book of the City. 2. The Ordinance will be in full force and effect five days after publication in the City's official newspaper, which publication date is�_, 2017. 3. A quorum of the members of the City Council was present throughout the meeting and a majority of the members voted in the proper manner for the passage of the Ordinance. Dated: AJ&Ve 1/Ibd-M17 A0 CITY OF PASCO, WASHINGTON Daniela Erickson, City Clerk 51615205.] 00 N N 0000000000 O 000 0 0 0 0 W O � O Lr O 00 0 0 00 0 0 0 00 O O O O O O ✓i O V N O N Lll O 0 000 0 0 0 0 0 0 0 0 O 00 O O O O O O tri O O O 00 N W n O N 0 0 0 0 0 00 0 0 0 O O O 0 0 0 0 0 0 0 0 0 O O O O O" O O O 00 Lr 6 O O 00 O Lr & v m v C � @ d u 7 c U N O 2 ti H a a o Q N u ti M N �--I O OM C 2 N C W N ti H @ m Q N a^ O N aq O u a u ^ W u a v m o v Z u v 3 0@ c a v u w Z O CG N OO c O y @ U C O @ O$ E E o VI a,@ J z@ EEM LL @ y s cOLo F 0 @ l0 V1 O. @ L@- al 0 0 0 0 0 L 0 0 @ U W a a+ m= O O m� L �D ti I� .� m � a .-i 0) = 0 o 0 0