HomeMy WebLinkAbout2020.03.23 Council Workshop PacketWorkshop Meeting
AGENDA
PASCO CITY COUNCIL
7:30 p.m.
March 23, 2020
Page
1. CALL TO ORDER:
2. ROLL CALL:
(a) Pledge of Allegiance
3. VERBAL REPORTS FROM COUNCILMEMBERS:
4. ITEMS FOR DISCUSSION:
3 - 49 (a) Issuance of 2020 Revenue Bond and Refunding of Previous Bonds
50 - 69 (b) Tourism Promotion Area Reserve Fund Request
Presentation by Michael Novakavich, President and CEO, Visit Tri-Cities
70 - 82 (c) SG Land Management LLC/Harris Road Annexation (MF# ANX 2020-
001)
5. MISCELLANEOUS COUNCIL DISCUSSION:
6. EXECUTIVE SESSION:
7. ADJOURNMENT:
(a)
REMINDERS:
• Thursday, MARCH 26, 4:00 PM: TRIDEC Board Meeting – 7130
W. Grandridge Blvd., Kennewick (COUNCILMEMBER DAVID
MILNE, Rep.; COUNCILMEMBER CRAIG MALONEY. Alt.)
This meeting is broadcast live on PSC-TV Channel 191 on
Charter/Spectrum Cable in Pasco and Richland and streamed at
www.pasco-wa.gov/psctvlive.
Audio equipment available for the hearing impaired; contact the Clerk for
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Workshop Meeting March 23, 2020
assistance.
Servicio de intérprete puede estar disponible con aviso. Por favor avisa la
Secretaria Municipal dos días antes para garantizar la disponibilidad.
(Spanish language interpreter service may be provided upon request.
Please provide two business day's notice to the City Clerk to ensure
availability.)
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AGENDA REPORT
FOR: City Council February 19, 2020
TO: Dave Zabell, City Manager Workshop Meeting: 3/23/20
FROM: Richa Sigdel, Director
Finance
SUBJECT: Issuance of 2020 Revenue Bond and Refunding of Previous Bonds
I. REFERENCE(S):
Project List
Bond Schedule
Proposed Ordinance
II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS:
Discussion
III. FISCAL IMPACT:
New Bonds - Approximately $16,230,000 (PWRF Improvements) to be issued. Debt
service requirements to be met from revenue generated by utility user fees (Process
Water Reuse Facility users).
Refunding Existing Bonds - Approximately $9,100,000 (2009 and 2010 Water/Sewer
Bonds). Debt service for this bond is currently met from revenue generated by utility
user fees (Water and Sewer Utility users). Once bonds are refunded (refinanced), the
revenue generated by utility user fees will continue to satisfy the debt service.
IV. HISTORY AND FACTS BRIEF:
The Process Water Reuse Facility (PWRF) has been owned and operated by the City of
Pasco since 1995. It processes wastewater from a variety of vegetable processing
facilities located in Pasco. The PWRF consists of numerous mechanical components
operating in a highly corrosive environment. Over the past quarter-century, many of
these components have worn out or are no longer capable of handling current and
future demands. Further, in the 25 years since the facility was built, the technologies
employed in and treatment of such waste streams has improved, and the ecological and
environmental requirements from State and Federal regulatory agencies have tightened.
The facility requires major rehabilitation, replacement and/or ex pansion of major
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mechanical components and systems.
All debt service related to the PWRF is paid by food processors as a part of their
annual operational fees.
Additionally, a large portion of this issue is intended to refund bonds previously issued
by the City that have become "callable". Once callable, the City has the option to
refinance a bond if more favorable terms exist in the market, which is the case under
the current circumstances. The bond financing team, consisting of senior staff and
industry experts, have evaluated the City's callable bonds and have identified
opportunities for refinancing that will save the utility and its ratepayers' money though
lower interest on current debt.
V. DISCUSSION:
The need for significant capital investment in the PWRF has been discussed with
Council during the preparation of the 2019-2020 Biennial Budget, the subsequent mid-
biennium adjustment, as well as the 2019-2024 and 2020-2025 Capital Improvement
Plan adoptions. As planned and previously discussed, some of the projects on the bond
lists are currently under construction. Staff was awaiting cost estimates and project
schedules on projects that needed to be bundled in this bond issuance to optimize bond
issuance costs.
The City issued revenue bonds in 2009 and 2010 that are now eligible for refinancing.
Based on the current market factors, the bond financing team has identified $9,100,000
in outstanding debt that the City can refinance.
Due to the significant economic impact of COVID-19, bond markets have been
changing more than what is usual. Municipal bonds are very attractive to investors in
times of uncertainty. The challenge that the world will face in the coming times due to
COVID-19 is uncertain. The City has already invested a third of the anticipated bond
proceed to construct Foster Wells Force Main and Columbia East Force Main and Lift
Station. Additionally, food processors are critical economic actors for the City, region,
and the State. As we evaluate the impact of COVID-19 to the City, it is imperative that
we continue providing critical utility services to assist in public interest with food
processing and economic interest with job sustainment/growth.
The attached Ordinance gives the City Manager authority to conduct the sale of the
bond within parameters defined by Council at maximum coupon rate (6.25%), true
interest coupon rate (6.25%), and principal amount ($25,500,000). You can find more
details on Exhibit A of the attached Ordinance.
Staff will wait for the right market factors to make decisions within the parameters
approved by the Council. If approved by Council, Staff will advance the issuance of
the bond with an anticipated close in May 2020.
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Project Name Description Maximum
Amount
Columbia East Force Main &
Lift Station
The Columbia East Lift Station portion of this project has
been designed, is under construction and will be
completed in 2019. The remainder of this project is for
the design and construction of two force mains that will
serve multiple food processors in the Commercial
Avenue-Kahlotus Highway area and direct food process
water (industrial waste) to the City's Process Water
Reuse Facility (PWRF). Three food processors will have
use of this force main: Simplot RDO, Grimmway and
Freeze Pack. This project will allow for the diversion of
1.5 MGD of industrial waste away from the municipal
wastewater treatment plant and directed to the PWRF.
$1,930,000
Foster Wells Force Main Construction. $4,000,000
Irrigation Pump Station
The Process Water Reuse Facility (PWRF) includes an
irrigation pump station (IPS). The existing IPS is in
serious need of replacement due to deterioration to the
point of multiple minor failures. If the current pump
station were to have a major failure, there would be no
way to pump the process water out of the facility to the
crop fields. Complete shut down of all food processor
partners would be needed until repairs could be made.
This project was fully designed in 2019.
$8,800,000
PWRF Primary Treatment
Improvements
This project will construct improvements to the Process
Water Reuse Facility (PWRF) to allow for additional
capacity and improved treatment of the food processors'
industrial waste being pumped to the facility. This
project will also address the odor issues that currently
plague the facility.
$1,500,000
PWRF Utility Bond $16,230,000
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11900 NE 1st Street, Suite 300 Bellevue, Washington 98005
City of Pasco, Washington
Water and Sewer Improvement Refunding Revenue Bonds, 2020A
Water and Sewer Improvement Revenue Bonds, 2020B (Taxable)
Schedule of Events (February 7, 2020)
DATE EVENT RESPONSIBILITY
Complete Kick-off Call ALL
Complete Data Request for Preliminary Official Statement (“POS”)
Sent to the City
BC
Tue, Feb 18 Draft of Bond Ordinance Available BC
Tue, Feb 25 Comments Due on Bond Ordinance ALL
Tue, Feb 25 Data Request Returned to Bond Counsel City
Mon, Mar 2 Draft of POS / Bond Ordinance Available BC
Mon, Mar 9 Call / Meeting on Financing Documents ALL
Wed Mar 11 Bond Ordinance Provided for Council Packets BC, City
Mon, Mar 16 Draft of POS Available BC
Mon, Mar 16 Council Meeting – Introduce Bond Ordinance City
Mon, Mar 23 Comments Due on POS ALL
Wed, Mar 25 Documents to S&P Global Ratings (Rating Agency) FA
Week of Apr 6 Rating Call City, FA, UW
Mon, Apr 6 Council Meeting – Approve Delegation Bond Ordinance City
Publication of Bond Ordinance City
Bond Ordinance Effective (5 Days after Publication) City
Thu, Apr 16 Call to finalize POS / Due Diligence Call (Time TBD) ALL
Thu, Apr 16 Receive Rating FA, City
Fri, Apr 17 Post POS BC, UW
Mon, Apr 27 Pre-Pricing Call (Time TBD) City, FA, UW
Tue, Apr 28 Bond Sale ALL
Tue, May 12 Closing ALL
__________________________
City: City of Pasco BC: Bond Counsel (Foster Garvey PC)
FA: Financial Advisor (NWMA) UW: Underwriter (D.A. Davidson)
S M T W T F S S M T W T F S S M T W T F S S M T W T F S
1 2 3 4 1 1 2 3 4 5 6 7 1 2 3 4
5 6 7 8 9 10 11 2 3 4 5 6 7 8 8 9 10 11 12 13 14 5 6 7 8 9 10 11
12 13 14 15 16 17 18 9 10 11 12 13 14 15 15 16 17 18 19 20 21 12 13 14 15 16 17 18
19 20 21 22 23 24 25 16 17 18 19 20 21 22 22 23 24 25 26 27 28 19 20 21 22 23 24 25
26 27 28 29 30 31 23 24 25 26 27 28 29 29 30 31 26 27 28 29 30
JANUARY FEBRUARY MARCH APRIL
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Draft of 3/11/2020
FG:53545682.3
CITY OF PASCO, WASHINGTON
ORDINANCE NO. ____
AN ORDINANCE relating to the waterworks utility of the City;
specifying, adopting and ordering the carrying out of a system or plan of additions
to and betterments and extensions of the waterworks utility; providing for the
issuance, sale and delivery of not to exceed $25,500,000 aggregate principal
amount of water and sewer improvement and refunding revenue bonds to provide
funds to (a) pay or reimburse all or a portion of the costs of carrying out the plan
of additions, (b) refund and redeem outstanding water and sewer revenue bonds of
the City, (c) make a deposit to the debt service reserve account, as needed, and (d)
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 related matters.
Passed: April 6, 2020
This document prepared by:
Foster Garvey P.C.
1111 Third Avenue, Suite 3000
Seattle, Washington 98101
(206) 447-4400
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TABLE OF CONTENTS*
Page
Section 1. Definitions................................................................................................................1
Section 2. Findings and Determinations ...................................................................................9
Section 3. Plan of Additions ...................................................................................................10
Section 4. Authorization of the Bonds ....................................................................................11
Section 5. Appointment of Designated Representative; Description of the Bonds ................11
Section 6. Bond Registrar; Registration and Transfer of Bonds .............................................12
Section 7. Form and Execution of Bonds. ..............................................................................13
Section 8. Payment of Bonds ..................................................................................................13
Section 9. Redemption Provisions and Purchase of Bonds ....................................................14
Section 10. Failure to Pay Bonds ..............................................................................................15
Section 11. Bond Fund; Payments into Bond Fund ..................................................................15
Section 12. Rate Stabilization Account ....................................................................................17
Section 13. Pledge, Lien and Charge for Payment of the Bonds ..............................................17
Section 14. Flow of Funds ........................................................................................................17
Section 15. Covenants ...............................................................................................................18
Section 16. Provisions for Future Parity Bonds ........................................................................19
Section 17. Separate Utility Systems. .......................................................................................20
Section 18. Contract Resource Obligations. .............................................................................20
Section 19. Tax Covenants. ......................................................................................................21
Section 20. Refunding or Defeasance of Bonds .......................................................................22
Section 21. Deposit of Bond Proceeds; Creation of Construction Accounts ............................22
Section 22. Use of Refunding Proceeds; the Refunding Plan ...................................................23
Section 23. Amendatory and Supplemental Ordinances ...........................................................25
Section 24. Defaults and Remedies ..........................................................................................27
Section 25. Sale and Delivery of the Bonds .............................................................................30
Section 26. Official Statement; Continuing Disclosure ............................................................31
Section 27. General Authorization and Ratification .................................................................31
Section 28. Severability ............................................................................................................31
Section 29. Effective Date of Ordinance ..................................................................................32
Exhibit A Parameters for Final Terms
Exhibit B Parity Conditions
Exhibit C Form of Undertaking to Provide Continuing Disclosure
*The cover page, table of contents and section headings of this ordinance are for convenience of reference only, and
shall not be used to resolve any question of interpretation of this ordinance.
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CITY OF PASCO, WASHINGTON
ORDINANCE NO. ____
AN ORDINANCE relating to the waterworks utility of the City;
specifying, adopting and ordering the carrying out of a system or plan of additions
to and betterments and extensions of the waterworks utility; providing for the
issuance, sale and delivery of not to exceed $25,500,000 aggregate principal
amount of water and sewer improvement and refunding revenue bonds to provide
funds to (a) pay or reimburse all or a portion of the costs of carrying out the plan
of additions, (b) refund and redeem outstanding water and sewer revenue bonds of
the City, (c) make a deposit to the debt service reserve account, as needed, and (d)
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 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 capitalized terms
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) “2017 Bonds” means the outstanding Water and Sewer Revenue Bonds, 2017, of
the City issued pursuant to Ordinance No. 4365.
(h) “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.
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(i) “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. When the 2009 Bonds, 2010A Bonds, 2013A
Bonds and 2013T Bonds are no longer outstanding “Alternate Security” shall mean 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 one of the two highest rating categories by either Moody’s Investors
Service, Inc. or S&P Global Ratings.
(j) “Annual Debt Service” for any or all Parity 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.
(k) “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 Parity Bonds in the same proportion as the total of the Assessment Bonds
relates to the total of the Parity Bonds then outstanding.
(l) “Authorized Denomination” means $5,000 or any integral multiple thereof within
a maturity.
(m) “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.
(n) “Beneficial Owner” means, with respect to a Bond, the owner of any beneficial
interest in that Bond.
(o) “Bond” means each Project Bond and each Refunding Bond issued pursuant to
and for the purposes provided in this ordinance.
(p) “Bond Counsel” means the firm of Foster Garvey P.C., 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.
(q) “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.
(r) “Bond Purchase Contract” means an offer to purchase a Series of Bonds, setting
forth certain terms and conditions of the issuance, sale and delivery of those Bonds, which offer
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is authorized to be accepted by the Designated Representative on behalf of the City, if consistent
with this ordinance.
(s) “Bond Register” means the books or records maintained by the Bond Registrar for
the purpose of identifying ownership of each Bond.
(t) “Bond Registrar” means the Fiscal Agent, or any successor bond registrar
selected by the City.
(u) “City” means the City of Pasco, Washington, a municipal corporation duly
organized and existing under the laws of the State.
(v) “City Clerk” means the City Clerk of the City or the successor to the functions of
that officer.
(w) “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.
(x) “City Council” means the legislative authority of the City, as duly and regularly
constituted from time to time.
(y) “City Manager” means the City’s City Manager or such other officer of the City
who succeeds to substantially all of the responsibilities of that office.
(z) “Code” means the United States Internal Revenue Code of 1986, as amended, and
applicable rules and regulations promulgated thereunder.
(aa) “Contract Resource Obligation” means an obligation of the City designated as a
Contract Resource Obligation in accordance with Section 18 to make payments for water supply,
sewer service, water or wastewater transmission, treatment or other utility service or commodity
to another person or entity (including without limitation any Separate Utility System).
(bb) “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.
(cc) “Coverage Requirement” in any year means an amount of Net Revenue, 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 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. When the
Outstanding Bonds are no longer outstanding “Coverage Requirement” shall mean an amount
of Net Revenue, together with the ULID Assessments collected in that year, equal to at least
Annual Debt Service on all Assessment Bonds for that year plus an amount of the Net Revenue
not used to calculate the Coverage Requirement on Assessment Bonds equal to at least 1.25
times Annual Debt Service on all bonds payable from the Bond Fund that are not Assessment
Bonds in that year.
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(dd) “DTC” means The Depository Trust Company, New York, New York, or its
nominee.
(ee) “Designated Representative” means the 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).
(ff) “Final Terms” means the terms and conditions for the sale of a Series of Bonds,
including the amount, date or dates, denominations, interest rate or rates (or mechanism for
determining interest rate or rates), payment dates, final maturity, redemption rights, price, and
other terms or covenants, including minimum savings for refunding bonds (if the refunding
bonds are issued for savings purposes).
(gg) “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.
(hh) “Fiscal Agent” means the fiscal agent of the State, as the same may be designated
by the State from time to time.
(ii) “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 and ULID Assessments on a parity
with the lien and charge upon such Net Revenue and ULID Assessments for the Outstanding
Parity Bonds and the Bonds, but shall not include variable rate obligations.
(jj) “Government Obligations” has the meaning given in RCW 39.53.010, as now in
effect or as may hereafter be amended.
(kk) “Gross Revenue” means all of the earnings and revenues received by the City
from the maintenance and operation of the Waterworks Utility, all earnings from the investment
of money on deposit in the Bond Fund and, when the Outstanding Parity Bonds are no longer
outstanding, withdrawals from the Rate Stabilization Account, but not including: (i) ULID
Assessments, (ii) government grants, (iii) proceeds from the sale of Waterworks Utility property,
(iv) City taxes collected by or through the Waterworks Utility, (v) principal proceeds of bonds,
(vi) 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 or, when the Outstanding Parity Bonds
are no longer outstanding, (vii) deposits to the Rate Stabilization Account or (viii) revenues of a
Separate Utility System.
(ll) “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.
(mm) “Letter of Representations” means the Blanket Issuer Letter of Representations
between the City and DTC dated August 31, 1998, as it may be amended from time to time, and
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any successor or substitute letter relating to the operational procedures of the Securities
Depository.
(nn) “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.
(oo) “Mayor” means the Mayor of the City or the successor to the functions of that
office.
(pp) “MSRB” means the Municipal Securities Rulemaking Board.
(qq) “Net Revenue” means the Gross Revenue less Operating and Maintenance
Expenses.
(rr) “Official 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.
(ss) “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
contract for such service and, when the Outstanding Parity Bonds are no longer outstanding,
payments made in respect of any Contract Resource Obligation, but not including: (i) any
depreciation, (ii) taxes levied or imposed by the City or payments to the City in lieu of taxes, or
(iii) capital additions or capital replacements to the Waterworks Utility.
(tt) “Outstanding Parity Bonds” means the outstanding 2009 Bonds, 2010A Bonds,
2013A Bonds, 2013T Bonds, 2015 Bonds and the 2017 Bonds. Outstanding Parity Bonds do not
include any Refunded Bonds.
(uu) “Owner” means, without distinction, the Registered Owner and the Beneficial
Owner.
(vv) “Parity Bonds” means the Outstanding Parity Bonds, the Bonds and any Future
Parity Bonds.
(ww) “Parity Bond Ordinances” means Ordinance No. 3915, Ordinance No. 3962,
Ordinance No. 4126, Ordinance No. 4254, Ordinance No. 4365 and this ordinance.
(xx) “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.
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(yy) “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.
(zz) “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.
(aaa) “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.
(bbb) “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.
(ccc) “Rate Stabilization Account” means the account of that name created in the Water
and Sewer Revenue Fund pursuant to Section 12.
(ddd) “Rating Agency” means any nationally recognized rating agency then maintaining
a rating on the Bonds at the request of the City.
(eee) “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.
(fff) “Redemption Date” means, with respect to each series of the Refunded Bonds, a
date or dates selected by the Designated Representative.
(ggg) “Refunded Bonds” means the Refunding Candidates selected by the Designated
Representative and identified in the Refunding Plan.
(hhh) “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.
(iii) “Refunding Candidates” means: (1) the currently outstanding $5,005,000
principal amount of the 2009 Bonds not subject to extraordinary redemption maturing on May 1
of each of the years 2021 and 2023 through 2029; and (2) the currently outstanding $3,880,000
principal amount of the 2010A Bonds maturing on June 1 of each of the years 2020, 2025 and
2029.
(jjj) “Refunding Plan” means (as further described in the Refunding Trust
Agreement):
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(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.
(kkk) “Refunding Trust Agreement” means the refunding trust agreement between the
City and the Refunding Trustee, providing for the carrying out of the Refunding Plan.
(lll) “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.
(mmm) “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.
(nnn) “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.
(ooo) “Reserve Insurance” means, in lieu of cash and investments, any insurance
obtained by the City to fund all or a portion of the Reserve Requirement for any Parity Bonds
then outstanding for which such insurance is obtained. When the 2009 Bonds, 2010A Bonds,
2013A Bonds and 2013T Bonds are no longer outstanding “Reserve Insurance” shall mean, in
lieu of cash and investments, any bond insurance, collateral, security, letter of credit, guaranty,
surety bond or similar credit enhancement device to fund, provide for or secure the payment of
all or part of the Reserve Requirement 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 Reserve Insurance in one of the two highest rating categories by
either Moody’s Investors Service, Inc. or S&P Global Ratings.
(ppp) “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
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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
Parity 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 Parity 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.
(qqq) “Rule 15c2-12” means Rule 15c2-12 promulgated by the SEC under the
Securities Exchange Act of 1934, as amended.
(rrr) “SEC” means the United States Securities and Exchange Commission.
(sss) “Securities Depository” means DTC, any successor thereto, any substitute
securities depository selected by the City that is qualified under applicable laws and regulations
to provide the services proposed to be provided by it, or the nominee of any of the foregoing.
(ttt) “Series of Bonds” or “Series” means a series of the Bonds issued pursuant to this
ordinance.
(uuu) “Separate Utility System” means any water supply, sewer service, water or
wastewater transmission, treatment or other utility service, commodity or facilities that may be
created, acquired or constructed by the City as provided in Section 17.
(vvv) “State” means the State of Washington.
(www) “System of Registration” means the system of registration for the City’s bonds and
other obligations set forth in Ordinance No. 2845.
(xxx) “Taxable Series” means any Series of Bonds issued as taxable bonds as
determined by the Designated Representative pursuant to the parameters for Final Terms set
forth in Exhibit A and identified in the Bond Purchase Contract for such Series of Bonds.
(yyy) “Tax-Exempt Series” means any Series of Bonds issued as tax-exempt bonds as
determined by the Designated Representative pursuant to the parameters for Final Terms set
forth in Exhibit A and identified in the Bond Purchase Contract for such Series of Bonds.
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(zzz) “Term Bonds” means each Bond designated as a Term Bond and subject to
mandatory redemption in the years and amounts set forth in the Bond Purchase Contract. 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.
(aaaa) “ULID” means utility local improvement district.
(bbbb) “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.
(cccc) “Undertaking” means the undertaking to provide continuing disclosure entered
into pursuant to Section 26(c) of this ordinance.
(dddd) “Water and Sewer Revenue Fund” means that special fund of the City into which
all of the Gross Revenue shall be deposited.
(eeee) “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 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 to carry out 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 and ULID Assessments on a parity with those 1991 Bonds if the
Parity Conditions are met. The City currently has outstanding the following water and sewer
revenue bonds issued on a parity of lien and charge on the Net Revenue and ULID Assessments
with the 1991 Bonds:
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Name of Issue
Original
Principal
Amount
Dated
Date
Authorizing
Ordinance
Ordinance
Passage
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
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
2017 Bonds 9,415,000 12/19/2017 4365 11/20/2017
(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 to
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 carry out the Refunding
Plan.
(f) Sufficiency of Gross Revenue; Due Regard. The City Council finds and
determines that the Gross Revenue 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 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 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 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 Contract as approved by the Designated Representative consistent
with this ordinance.
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 2019-2024 Capital Improvement Plan, 2020-2025
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Capital Improvement Plan and prior Capital Improvement Plans and other comprehensive and
improvement plans of the City:
(a) Portions of the Columbia east force main & lift station improvements, including:
the remainder of the design and construction of two force mains that will serve multiple food
processors and direct food process water (industrial waste) to the process water reuse facility;
(b) Foster wells force main improvements, including: building a new force main from
the Foster wells lift station to the process water reuse facility;
(c) Process water reuse facility irrigation pump station, including: replacing the
existing pump station for delivery of process water to agricultural users; and
(d) Process water reuse facility primary treatment improvements, including:
constructing improvements to allow for additional capacity and improved treatment of industrial
waste from food processors.
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 $16,230,000. 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 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 improvement and refunding revenue bonds in one or more Series 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
City Manager and the Finance Director each are appointed as the Designated Representative of
the City and each of them acting alone is authorized and directed to conduct the sale of the
Bonds in 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
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Representative deems advisable, within the parameters set forth in Exhibit A, which is attached
to this ordinance and incorporated by this reference.
Section 6. Bond Registrar; Registration 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 times. The Bond Registrar is authorized, on behalf of the City, to
authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of the
Bonds and this ordinance, to serve as the City’s paying agent for the Bonds and to carry out all of
the Bond Registrar’s powers and duties under this ordinance 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.
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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 [Improvement] [Refunding] [Improvement and Refunding] Bonds, 20[__] 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 are not be general obligations of the City. The Bonds are not subject to
acceleration under any circumstances.
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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
Contract, 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 Contract, 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 Contract. If a Term Bond is redeemed under the optional redemption provisions,
defeased or purchased by the City and surrendered for cancellation, the principal amount of the
Term Bond so redeemed, defeased or purchased (irrespective of its actual redemption or
purchase price) shall be credited against one or more scheduled mandatory redemption
installments for that Term 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. The Bond Purchase Contract may establish the manner in which
any Taxable Series or portions of any Taxable Series are selected for redemption. 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.
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(e) Rescission of Optional Redemption Notice. In the case of an optional redemption,
the notice of redemption may state that the City retains the right to rescind the redemption notice
and the redemption by giving a notice of rescission to the affected Registered Owners at any time
on or prior to the date fixed for redemption. Any notice of optional redemption that is so
rescinded shall be of no effect, and each Bond for which a notice of redemption has been
rescinded shall remain outstanding.
(f) Effect of Redemption. Interest on each Bond called for redemption shall cease to
accrue on the date fixed for redemption, unless either the notice of optional redemption is
rescinded as set forth above, or money sufficient to effect such redemption is not on deposit in
the Bond Fund or in a trust account established to refund or defease the Bond.
(g) Purchase of Bonds. The City reserves the right to purchase any or all of the Bonds
offered to the City or in the open market at any time at any price acceptable to the City plus
accrued interest to the date of purchase. All Bonds so purchased shall be canceled.
Section 10. Failure to Pay Bonds. If the principal of any Bond is not paid when the
Bond is properly presented at its maturity 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, 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 any 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, 2013A Bonds, 2013T Bonds are no longer
outstanding, the following paragraph shall become effective: The City may establish, for the
Bonds and one or more series of Future Parity Bonds, a separate reserve requirement (which
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may be zero), to be held in a separate reserve account, for the purpose of securing those Parity
Bonds, and those 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.
The City further 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 further 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 any 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 first available after
making necessary provisions for the required payments into the Principal and Interest Account.
When the Outstanding Parity Bonds are no longer outstanding, the preceding sentence shall
be replaced with the following: Any deficiency created in the Reserve Account by reason of any
withdrawal shall then be made up in not more than 12 approximately equal monthly installments
from Net Revenue in accordance with the flow of funds set forth in Section 14, first, to reinstate
each Reserve Insurance pro rata, and second, to make up any remaining deficiency.
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 funds 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.
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Section 12. Rate Stabilization Account. When the Outstanding Parity Bonds are no
longer outstanding, this Section 12 shall become effective: The City is authorized to create the
Rate Stabilization Account in the Water and Sewer Revenue Fund. The City may at any time,
consistent with the flow of funds in Section 14, deposit in the Rate Stabilization Account Gross
Revenue and any other money received by the Waterworks Utility available to be used therefor,
excluding principal proceeds of bonds or other obligations. The City may at any time withdraw
money from the Rate Stabilization Account for use in accordance with Section 14. Deposits into
the Rate Stabilization Account shall reduce Net Revenue for the year in which the deposit is
made or, at the option of the City, for the preceding year if the deposit is made within three
months after the end of the preceding year. Withdrawals from the Rate Stabilization Account
shall increase Net Revenue for the year in which the withdrawal is made or, at the option of the
City, for the preceding year if the withdrawal is made within three months after the end of the
preceding year.
Section 13. Pledge, Lien and Charge for Payment of the Bonds. The Net Revenue 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 and ULID Assessments
prior and superior to any other charges 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 Parity Bonds.
Section 14. 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 Parity 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 subordinate
to the lien of the Bonds; and
(5) To make necessary additions, betterments, improvements or repairs to the
Waterworks Utility, to retire by redemption or purchase any outstanding Parity
Bonds, and when the Outstanding Parity Bonds are no longer outstanding, to
make deposits into the Rate Stabilization Account, or for any other lawful
purpose.
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Section 15. 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 Parity 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.
(c) It will maintain and collect such rates as will produce sufficient Net Revenue,
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. When the Outstanding Parity Bonds are no
longer outstanding, the following sentence shall become effective: A failure to comply with this
covenant is not a default of this covenant (or an Event of Default as described in Section 24) if
the City, before the date 90 days after the end of the calendar year, (i) employs a licensed
professional engineer experienced in the design, construction and operation of municipal
utilities or an independent certified public accountant to recommend changes in the City’s rates
and (ii) imposes rates at least as high as those recommended by the consultant.
(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, 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 furnish 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.
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(f) It will carry the types of insurance on its Waterworks Utility properties in the
amounts normally carried 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 16. 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 subordinate or inferior to the payments
required to be made therefrom into the Bond Fund for the 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.
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Section 17. Separate Utility Systems. When the Outstanding Parity Bonds are no
longer outstanding, this Section 17 shall become effective: The City may at any time create,
acquire, construct, finance, own and operate one or more systems for water supply, sewer
service, water or wastewater transmission, treatment or other utility service, commodity or
facilities, which systems are separate from and in addition to the Waterworks Utility. The
revenues of that Separate Utility System, and any utility local improvement district assessments
payable solely with respect to improvements to a Separate Utility System, are not included in
Gross Revenue and may be pledged to the payment of revenue obligations issued to purchase,
construct, condemn or otherwise acquire or expand the Separate Utility System. The City may
not pledge Gross Revenue or Net Revenue to the payment of any obligations of a Separate Utility
System, except that Net Revenue may be pledged on a basis subordinate to the lien of the Parity
Bonds.
Section 18. Contract Resource Obligations. When the Outstanding Parity Bonds are
no longer outstanding, this Section 18 shall become effective: The City may at any time enter
into one or more Contract Resource Obligations for the acquisition, from facilities to be
constructed or improved by the use of payments under such Contract Resource Obligations, of
water supply, sewer service, water or wastewater transmission, treatment or other utility service
or commodity relating to the Waterworks Utility, as follows:
(a) The City may agree under a contract containing a Contract Resource Obligation
that all payments in respect of that Contract Resource Obligation (including payments prior to
the time that water or wastewater service is being provided, or during a suspension or after
termination of supply or service) shall be deemed Operating and Maintenance Expenses, so long
as the payments required to be made under the Contract Resource Obligation are not subject to
acceleration and the following additional requirements are met at the time such obligation is
designated as a Contract Resource Obligation:
(1) No material default (or Event of Default as defined in Section 24)
has occurred and is continuing under the terms of any debt obligation of the City
in respect of the Waterworks Utility; and
(2) The City has obtained a certificate of an independent utility
consultant stating that in its professional opinion: (A) the payments to be made by
the City in connection with the Contract Resource Obligation are reasonable for
the service rendered; (B) the source of any new supply, and any facilities to be
constructed to provide the supply, service or transmission, are sound from a
supply or planning standpoint, are technically and economically feasible in
accordance with prudent utility practice, and are likely to provide supply, service
or transmission no later than a date set forth in the certification; and (C) the Net
Revenue will be sufficient to meet the Coverage Requirement for each of the five
calendar years following the calendar year in which the Contract Resource
Obligation is incurred, where the calculation of Net Revenue (i) takes into
account the adjustments permitted in connection with a coverage certification
given under the conditions for Future Parity Bonds and (ii) adjusts the Operating
and Maintenance Expenses by the consultant’s estimate of the payments to be
made in accordance with the Contract Resource Obligation.
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(b) Nothing in this section prevents the City from entering into agreements for the
acquisition of water supply, sewer service, water or wastewater transmission, treatment or other
utility service or commodity relating to the Waterworks Utility from then-existing facilities and
from treating those payments as Operating and Maintenance Expenses. Nothing in this section
prevents the City from entering into other agreements for the acquisition of water supply, sewer
service, water or wastewater transmission, treatment or other utility service or commodity from
facilities to be constructed and from agreeing to make payments with respect thereto, such
payments to be made on a basis subordinate to the lien of the Parity Bonds until such time as the
facilities are placed in service.
Section 19. Tax Covenants.
(a) Interest on Taxable Series. Interest on any Bonds of a Taxable Series will not be
excluded from gross income of the Owners of such Bonds of a Taxable Series for federal income
tax purposes.
(b) Preservation of Tax Exemption for Interest on Tax-Exempt Series. The City
covenants that it will take all actions necessary to prevent interest on any Tax-Exempt Series
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 such Tax-Exempt Series or other funds of the
City treated as proceeds of such Tax-Exempt Series that will cause interest such Tax-Exempt
Series 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 any Tax-Exempt Series, take all actions necessary to comply (or to be treated as
having complied) with those requirements in connection with such Tax-Exempt Series.
(c) 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 any Tax-Exempt Series from being included in gross
income for federal tax purposes.
(d) Designation of Tax-Exempt Series as “Qualified Tax-Exempt Obligations.” The
Designated Representative may designate any Tax-Exempt Series as “qualified tax-exempt
obligations” for the purposes of Section 265(b)(3) of the Code, if the following conditions are
met:
(1) the Tax-Exempt Series does not constitute “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 Tax-Exempt Series is issued
will not exceed $10,000,000; and
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(3) the amount of tax-exempt obligations, including the Tax-Exempt
Series, designated by the City as “qualified tax-exempt obligations” for the
purposes of Section 265(b)(3) of the Code during the calendar year in which the
Tax-Exempt Series is issued does not exceed $10,000,000.
Section 20. Refunding or Defeasance of Bonds. The City may issue refunding bonds
pursuant to State law or use money available from any other lawful source to carry out a
refunding or defeasance plan, which may include (a) paying when due the principal of and
interest on any or all of the Bonds (the “defeased Bonds”); (b) redeeming the defeased Bonds
prior to their maturity; and (c) paying the costs of the refunding or defeasance. If the City sets
aside in a special trust fund or escrow account irrevocably pledged to that redemption or
defeasance (the “trust account”), money and/or 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 funds and accounts obligated to the payment of the
defeased Bonds, shall cease and become void. Thereafter, the Owners of defeased Bonds shall
have the right to receive payment of the principal of and interest on the defeased Bonds solely
from the trust account and the defeased Bonds shall be deemed no longer outstanding. In that
event, the City may apply money remaining in any fund or account (other than the trust account)
established for the payment or redemption of the defeased Bonds to any lawful purpose, 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 in this ordinance.
Unless otherwise specified by the City in a refunding or defeasance plan, notice of
refunding or defeasance shall be given, and selection of Bonds for any partial refunding or
defeasance shall be conducted, in the manner prescribed in this ordinance for the redemption of
Bonds.
Section 21. 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 22.
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(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 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.
Section 22. 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
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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
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.
(f) 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 Contract, 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
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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
applicable Parity Bond Ordinance immediately upon the deposit of such money with the
Refunding Trustee.
Section 23. Amendatory and Supplemental Ordinances. When the Outstanding Parity
Bonds are no longer outstanding, this Section 23 shall become effective: This ordinance shall
not be modified or amended in any respect so long as the Bonds are outstanding, except as
provided in and in accordance with and subject to the provisions of this section. For purposes of
this provision, the passage of an ordinance authorizing the issuance of Future Parity Bonds shall
not be considered an amendatory or supplemental ordinance.
(a) Certain Amendatory or Supplemental Ordinances Permitted Without Bond Owner
Consent. The City, from time to time, and at any time, without the consent of or notice to the
registered owners of the Parity Bonds, may pass amendatory or supplemental ordinances as set
forth in this subsection (a). Before passing any such amendatory or supplemental ordinance, the
City must have delivered to it an opinion of Bond Counsel, stating that such ordinance is
authorized or permitted by this ordinance and, upon its effective date, will be valid and binding
upon the City in accordance with its terms and will not adversely affect the exclusion from gross
income for federal income tax purposes of interest on any tax-exempt Parity Bonds then
outstanding. The permitted purposes under this subsection (a) are:
(1) To cure any formal defect, omission, inconsistency or ambiguity in
this ordinance in a manner not adverse to the owner of any Parity Bond.
(2) To impose upon the Bond Registrar (or a bond trustee, if any), with
its consent, any additional rights, remedies, powers, authority, security, liabilities
or duties which may lawfully be granted, conferred or imposed and which are not
contrary to or inconsistent with this ordinance as theretofore in effect.
(3) To add covenants, agreements, limitations and restrictions to be
observed by the City which are not contrary or inconsistent with this ordinance as
theretofore in effect.
(4) To confirm, as further assurance, any pledge under this ordinance
(and the subjection to any claim, lien or pledge created or to be created by this
ordinance) of any other money, securities or funds.
(5) To authorize different denominations of the Bonds and to make
correlative amendments and modifications to this ordinance regarding
exchangeability of Bonds of different authorized denominations, redemptions of
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portions of Bonds of particular authorized denominations and similar
amendments and modifications of a technical nature.
(6) To amend or supplement this ordinance in any other respect which
is not materially adverse to the registered owners of the Parity Bonds and which
does not involve a change described in subsections (b) or (c).
(7) To maintain the exclusion from gross income of the interest on any
Tax-Exempt Series of Bonds from federal income taxation in light of a change in
federal law, regulations or rulings.
(b) Amendatory or Supplemental Ordinances Requiring Consent of Registered
Owners of 50% of Parity Bonds Outstanding. In addition to any ordinance permitted pursuant to
subsection (a) and subject to the terms and conditions contained in subsection (c) and not
otherwise, the City, upon the consent of registered owners of not less than 50% in aggregate
principal amount of the Parity Bonds then outstanding, shall have the right from time to time to
consent to and approve any amendatory or supplemental ordinance deemed necessary or
desirable by the City. Such an ordinance may amend or supplement, in any particular, any of the
terms or provisions contained in this ordinance. If at any time the City passes an amendatory or
supplemental ordinance under this subsection (b), the effective date shall be conditioned on the
following:
(1) The City must cause notice of the amendatory or supplemental
ordinance to be provided in electronic format through the Electronic Municipal
Market Access or other website then authorized by the MSRB for the Undertaking
to all registered owners of any then outstanding Parity Bonds and to each Rating
Agency. Such notice shall briefly summarize the ordinance and shall state that a
copy is available for review by request or on the City’s website.
(2) The ordinance may go into effect upon receipt by the City of
(A) the consents, in writing, of the required percentage of registered owners of the
Parity Bonds, and (B) an opinion of Bond Counsel to the effect that (i) such
ordinance is permitted by this ordinance, (ii) upon its effective date it will be valid
and binding upon the City in accordance with its terms and (iii) it will not
adversely affect the exclusion from gross income for federal income tax purposes
of interest on any tax-exempt Parity Bonds then outstanding.
(c) Amendatory or Supplemental Ordinances Requiring Consent of All Registered
Owners. Unless approved in writing by the registered owners of all Parity Bonds then
outstanding, nothing contained in this section shall permit, or be construed as permitting:
(1) A change in the times, amounts or currency of payment of the
principal of or interest on any outstanding Parity Bond or a reduction in the
principal amount or redemption price of any outstanding Parity Bond or a change
in the redemption price of any outstanding Parity Bond or a change in the method
of determining the rate of interest thereon.
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(2) A preference of priority of any Parity Bonds or any other bond or
bonds.
(3) A reduction in the aggregate principal amount of any Parity Bond.
(d) Effect of Passage of Amendatory or Supplemental Ordinance. Upon the adoption
of the amendatory or supplemental ordinance pursuant to the provisions of this section, this
ordinance shall be, and shall be deemed to be, amended and supplemented accordingly. No
owner of outstanding Parity Bonds shall have any right (1) to object to the passage of such
ordinance, (2) to object to any of the terms and provisions contained therein or the operation
thereof, (3) in any manner to question the propriety of the passage thereof or (4) to enjoin or
restrain the City from passing the same or taking any action pursuant thereto. The respective
rights, duties and obligations under this ordinance of the City, the Bond Registrar and all
registered owners of Parity Bonds, shall thereafter be determined, exercised and enforced under
this ordinance subject in all respects to such supplements and amendments.
Section 24. Defaults and Remedies. When the Outstanding Parity Bonds are no
longer outstanding, this Section 24 shall become effective:
(a) Events of Default. Each of the following constitutes an “Event of Default” with
respect to the Parity Bonds:
(1) If a default is made in the payment of the principal of or interest on
any of the Parity Bonds when the same shall become due and payable.
(2) If the City defaults in the observance and performance of any other
of its covenants, conditions and agreements set forth in this ordinance and such
default or defaults have continued for a period of six months after the City has
received from the registered owners of not less than 25% in outstanding principal
amount of Parity Bonds a written notice specifying and demanding the cure of
such default. However, if the default in the observance and performance of any
other of the covenants, conditions and agreements is one which cannot be
completely remedied within the six month period, it shall not be an Event of
Default with respect to the Bonds as long as the City has taken active steps within
90 days to remedy the default and is diligently pursuing such remedy.
(3) If the City files a petition in bankruptcy or is placed in receivership
under any State or federal bankruptcy or insolvency law.
(b) Bondowners’ Trustee. So long as an Event of Default has not been remedied, a
bondowners’ trustee (the “Bondowners’ Trustee”) may be appointed by the registered owners of
25% in principal amount of Parity Bonds then outstanding by an instrument or concurrent
instruments in writing signed and acknowledged by such registered owners of Parity Bonds or by
their attorneys-in-fact, duly authorized and delivered to such Bondowners’ Trustee, and after
notice of such appointment has been delivered to the City. That appointment shall become
effective immediately upon acceptance thereof by the Bondowners’ Trustee. Any Bondowners’
Trustee must be a bank or trust company organized under the laws of the State of Washington or
the State of New York or a national banking association. The bank or trust company acting as
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Bondowners’ Trustee may be removed at any time, and a successor Bondowners’ Trustee may be
appointed, by the registered owners of a majority in principal amount of Parity Bonds, by an
instrument or concurrent instruments in writing signed and acknowledged by such registered
owners of the Bonds or by their attorneys-in-fact duly authorized. The Bondowners’ Trustee may
require such security and indemnity as may be reasonable against the costs, expenses and
liabilities that may be incurred in the performance of its duties. If any Event of Default is, in the
sole judgment of the Bondowners’ Trustee, cured and the Bondowners’ Trustee furnishes to the
City a certificate so stating, that Event of Default shall be conclusively deemed to be cured and
the City, the Bondowners’ Trustee and the registered owners of the Parity Bonds shall be
restored to the same rights and position which they would have held if no Event of Default had
occurred. The Bondowners’ Trustee appointed in the manner herein provided, and each
successor thereto, is declared to be a trustee for the registered owners of all the Parity Bonds
and is empowered to exercise all the rights and powers herein conferred on the Bondowners’
Trustee.
(c) Suits at Law or in Equity. Upon the happening of an Event of Default and during
the continuation thereof, the Bondowners’ Trustee may (and, upon the written request of the
registered owners of not less than 25% in principal amount of Parity Bonds outstanding, must)
take such steps and institute such suits, actions or other proceedings, all as it may deem
appropriate for the protection and enforcement of the rights of the registered owners of Parity
Bonds, to collect any amounts due and owing to or from the City, or to obtain other appropriate
relief, and may enforce the specific performance of any covenant, agreement or condition
contained in this ordinance or in any of the Parity Bonds.
Any action, suit or other proceedings instituted by the Bondowners’ Trustee hereunder
shall be brought in its name as trustee for the owners of Parity Bonds and all such rights of
action upon or under any of the Parity Bonds or the provisions of this ordinance may be
enforced by the Bondowners’ Trustee without the possession of any of those Parity Bonds and
without the production of the same at any trial or proceedings relative thereto except where
otherwise required by law. Any such suit, action or proceeding instituted by the Bondowners’
Trustee shall be brought for the ratable benefit of all of the registered owners of those Parity
Bonds, subject to the provisions of this ordinance. The respective registered owners of Parity
Bonds, by taking and holding the same, shall be conclusively deemed irrevocably to appoint the
Bondowners’ Trustee the true and lawful trustee of the respective registered owners of those
Parity Bonds, with authority to institute any such action, suit or proceeding; to receive as trustee
and deposit in trust any sums becoming distributable on account of those Parity Bonds; to
execute any paper or documents for the receipt of money; and to do all acts with respect thereto
that the registered owner himself or herself might have done in person. Nothing herein shall be
deemed to authorize or empower the Bondowners’ Trustee to consent to accept or adopt, on
behalf of any registered owner of Parity Bonds, any plan of reorganization or adjustment
affecting Parity Bonds or any right of any registered owner thereof, or to authorize or empower
the Bondowners’ Trustee to vote the claims of the registered owners thereof in any receivership,
insolvency, liquidation, bankruptcy, reorganization or other proceeding to which the City is a
party.
(d) No Acceleration. Nothing contained in this section shall, in any event or under
any circumstance, be deemed to authorize the acceleration of maturity of principal of the Parity
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Bonds. The remedy of acceleration is expressly denied to the owners of the Parity Bonds under
any circumstances including, without limitation, upon the occurrence and continuance of an
Event of Default.
(e) Application of Money Collected by Bondowners’ Trustee. Any money collected by
the Bondowners’ Trustee at any time pursuant to this section shall be applied in the following
order of priority:
(1) First, to the payment of the charges, expenses, advances and
compensation of the Bondowners’ Trustee and the charges, expenses, counsel
fees, disbursements and compensation of its agents and attorneys.
(2) Second, to the payment to the persons entitled thereto of all
installments of interest then due on Parity Bonds in the order of maturity of such
installments and, if the amount available shall not be sufficient to pay in full any
installment or installments maturing on the same date, then to the payment
thereof ratably, according to the amounts due thereon to the persons entitled
thereto, without any discrimination or preference.
(3) Third, to the payment to the persons entitled thereto of the unpaid
principal amounts of any Parity Bonds which shall have become due (other than
Parity Bonds previously called for redemption for the payment of which money is
held pursuant to the provisions hereto), whether at maturity or by proceedings for
redemption or otherwise, in the order of their due dates and, if the amount
available shall not be sufficient to pay in full the principal amounts due on the
same date, then to the payment thereof ratably, according to the principal
amounts due thereon to the persons entitled thereto, without any discrimination or
preference.
(f) Duties and Obligations of Bondowners’ Trustee. The Bondowners’ Trustee shall
not be liable except for the performance of such duties as are specifically set forth herein.
During an Event of Default, the Bondowners’ Trustee shall exercise such of the rights and
powers vested in it hereby, and shall use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of his or her own
affairs. The Bondowners’ Trustee shall have no liability for any act or omission to act hereunder
except for the Bondowners’ Trustee’s own negligent action, its own negligent failure to act or its
own willful misconduct. The duties and obligations of the Bondowners’ Trustee shall be
determined solely by the express provisions of this ordinance, and no implied powers, duties or
obligations of the Bondowners’ Trustee shall be read into this ordinance. The Bondowners’
Trustee shall not be required to expend or risk its own funds or otherwise incur individual
liability in the performance of any of its duties or in the exercise of any of its rights or powers as
the Bondowners’ Trustee, except as may result from its own negligent action, its own negligent
failure to act or its own willful misconduct. The Bondowners’ Trustee shall not be bound to
recognize any person as a registered owner of any Parity Bonds until his or her title thereto, if
disputed, has been established to its reasonable satisfaction. The Bondowners’ Trustee may
consult with counsel and the opinion of such counsel shall be full and complete authorization
and protection in respect of any action taken or suffered by it hereunder in good faith and in
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accordance with the opinion of such counsel. The Bondowners’ Trustee shall not be answerable
for any neglect or default of any person, firm or corporation employed and selected by it with
reasonable care.
(g) Suits by Individual Owners of Parity Bonds Restricted. Neither the registered
owner nor the beneficial owner of any one or more of Parity Bonds have any right to institute
any action, suit or proceeding at law or in equity for the enforcement of same unless:
(1) an Event of Default has happened and is continuing; and
(2) a Bondowners’ Trustee has been appointed; and
(3) such owner previously shall have given to the Bondowners’
Trustee written notice of the Event of Default on account of which such suit,
action or proceeding is to be instituted; and
(4) the registered owners of 25% in principal amount of the then
outstanding Parity Bonds have made, after the occurrence of such Event of
Default, written request of the Bondowners’ Trustee and have afforded the
Bondowners’ Trustee a reasonable opportunity to institute such suit, action or
proceeding; and
(5) there has been offered to the Bondowners’ Trustee security and
indemnity satisfactory to it against the costs, expenses and liabilities to be
incurred therein or thereby; and
(6) the Bondowners’ Trustee has refused or neglected to comply with
such request within a reasonable time.
No owner of any Parity Bond shall have any right in any manner whatever by his or her
action to affect or impair the obligation of the City to pay from the Net Revenue the principal of
and interest on Parity Bonds to the respective owners thereof when due.
Section 25. Sale and Delivery of the Bonds.
(a) Manner of Sale of Bonds; Delivery of Bonds. The Designated Representative is
authorized to sell the Bonds in one or more Series by negotiated sale to the Purchaser based on
the assessment of the Designated Representative of market conditions, in consultation with
appropriate City officials and staff, Bond Counsel and other advisors. 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 Contract for each Series of Bonds shall set forth the Final Terms for
such Series of Bonds. The Designated Representative is authorized to execute the Bond Purchase
Contract on behalf of the City, so long as the terms provided therein are consistent with the terms
of this ordinance.
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(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
Contract, together with the approving legal opinion of Bond Counsel regarding the Bonds.
Section 26. 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, if required under Rule 15c2-12. The City authorizes and approves the
distribution by the Purchaser of the final Official Statement so executed and delivered to
purchasers and potential purchasers of 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.
Section 27. 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 carry 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 28. Severability. The provisions of this ordinance are declared to be separate
and severable. If a court of competent jurisdiction, all appeals having been exhausted or all
appeal periods having run, finds any provision of this ordinance to be invalid or unenforceable as
to any person or circumstance, such offending provision shall, if feasible, be deemed to be
modified to be within the limits of enforceability or validity. However, if the offending provision
cannot be so modified, it shall be null and void with respect to the particular person or
circumstance, and all other provisions of this ordinance in all other respects, and the offending
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provision with respect to all other persons and all other circumstances, shall remain valid and
enforceable.
Section 29. 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, this 6th day of April, 2020.
Saul Martinez, Mayor
ATTEST:
Debby Barham, City Clerk
APPROVED AS TO FORM:
Foster Garvey P.C.
Bond Counsel
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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 $25,500,000.
(ii) Date or Dates. Each Bond shall be dated its Issue Date, which date may not be later
than one year after the effective date of this ordinance.
(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 5.00%, and the true
interest cost to the City for each Series of Bonds may not exceed 4.50%.
(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 one year 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 December 1, 2050. 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
Contract 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 Contract; 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 10½ 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 Contract.
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(viii) Price. The purchase price for each Series of Bonds may not be less than 98% or more
than 135% of the stated principal amount of that Series.
(ix) Section 265(b)(3) Designation. Pursuant to Section 19(d) 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 Contract 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 of (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
applicable Series of Bonds that includes such Refunding 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) Tax Status. The Designated Representative is authorized to determine whether any
Series of Bonds will be issued as a Taxable Series or a Tax-Exempt Series and to
confirm the identification of any such Taxable Series or Tax-Exempt Series in the Bond
Purchase Contract applicable to such Series of Bonds.
(xiv) 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.
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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 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, 2013A
Bonds and 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 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 without
any adjustment.
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The certificate, in estimating the Net Revenue available for debt service, shall use
the historical Net Revenue for any 12 consecutive months out of the 24 months immediately
preceding the month of delivery of the Future Parity Bonds. Net Revenue 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;
(5) The engineer’s or accountant’s estimate of the Net Revenue 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;
(6) Any increases or decreases in Net Revenue as a result of any actual or
reasonably anticipated changes in Operating and Maintenance Expenses subsequent to
the 12 month period; and
(7) When the Outstanding Parity Bonds are no longer outstanding,
estimated deposits to and withdrawals from the Rate Stabilization Account.
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)
Ordinance No. 4365, Section 15 (2017 Bonds)
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C-1
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. ____ 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; (14) appointment
of a successor or additional trustee or the change of name of a trustee, if material;
(15) incurrence of a financial obligation of the City or obligated person, if material, or
agreement to covenants, events of default, remedies, priority rights, or other similar terms
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C-2
of a financial obligation of the City or obligated person, any of which affect security
holders, if material; and (16) default, event of acceleration, termination event,
modification of terms, or other similar events under the terms of the financial obligation
of the City or obligated person, any of which reflect financial difficulties. The term
“financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into
in connection with, or pledged as security or a source of payment for, an existing or
planned debt obligation; or (iii) guarantee of (i) or (ii). The term “financial obligation”
shall not include municipal securities as to which a final official statement has been
provided to the MSRB consistent with Rule 15c2-12.
(iii) Timely notice of a failure by the City to provide the 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) outstanding debt secured by the Net
Revenue and ULID Assessments; (3) debt service coverage ratio for the year;
[(4) Waterworks Utility number of customers; and (5) 10 largest water customers and 10
largest sewer customers of the Waterworks Utility by amount billed];
(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, 20[__]; 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.
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(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 of all of the Bonds. In addition, the City’s obligations under
this Undertaking shall terminate if the provisions of Rule 15c2-12 that require the City to comply
with this Undertaking become legally inapplicable in respect of the Bonds for any reason, as
confirmed by an opinion of Bond Counsel delivered to the City, and the City provides timely
notice of such termination to the MSRB.
(f) Remedy for Failure to Comply with Undertaking. As soon as practicable after the
City learns of any failure to comply with this Undertaking, the City will proceed with due
diligence to cause such noncompliance to be corrected. No failure by the City or other obligated
person to comply with this Undertaking shall constitute 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 in
paragraph (a)(i);
(ii) Determining whether any failure to provide the annual financial information
undertaken to be provided in paragraph (a)(i) has occurred and providing any
notice undertaken to be provided in paragraph (a)(iii);
(iii) Determining whether any event specified in items (1)-(16) of paragraph (a)(ii) has
occurred, assessing its materiality, where necessary, with respect to the Bonds,
and preparing and disseminating any notice undertaken to be provided in
paragraph (a)(ii) of its occurrence;
(iv) 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;
(v) Selecting, engaging and compensating designated agents and consultants,
including but not limited to financial advisors and legal counsel, to assist and
advise the City in carrying out this Undertaking; and
(vi) Effecting any necessary amendment of this Undertaking.
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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. ____ (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 April 6, 2020, 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 __________ __, 2020.
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: April 6, 2020.
CITY OF PASCO, WASHINGTON
Angela Pashon, City Clerk
Page 49 of 82
AGENDA REPORT
FOR: City Council March 18, 2020
TO: Dave Zabell, City Manager Workshop Meeting: 3/23/20
FROM: Dave Zabell, City Manager
Executive
SUBJECT: Tourism Promotion Area Reserve Fund Request
I. REFERENCE(S):
Letter from Visit Tri-Cities dated March 16, 2020
II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS:
Presentation by Michael Novakavich, President and CEO, Visit Tri-Cities
III. FISCAL IMPACT:
IV. HISTORY AND FACTS BRIEF:
Visit Tri-Cities provides an annual report for the prior year plus an outline of the
current year work plan. Michael Novakovich, President and CEO will present the
reports, as well as a request for approval to spend from the Tourism Promotion Area
(TPA) Reserve Account.
The TPA was formed in late 2004 to generate and administer the proceeds of a "per
room night assessment" on hotels/motels in the Tri-Cities, imposed by the hotels
themselves.
The interlocal agreement (between Pasco, Kennewick and Richland), that created the
TPA, requires the annual budget, and any expenditures from the TPA reserve account,
to be first approved by the City Councils.
V. DISCUSSION:
The TPA "assessment" is remitted by the hotels to the state which, in turn, distributes it
to the City in which it was collected. The City is obligated to pass the funds to the
TPA, for use in accordance with the approved budget.
Page 50 of 82
The TPA Commission has voted unanimously to request the transfer of an additional
$417,700 for special project expenditures for 2020 from the reserve account for the
following:
• TBEX 2021 Conference - $75,000
• IRONMAN Event Support - $75,000
• Contract Staff Position - $75,000
• Digital Displays - $86,600
• Omni Visitor Itinerary App - $10,100
• New Market Advertising - Chicago - $18,000
• Increase 2020 Opportunity Fund - $48,000
• Increase Quick Response Fund - $15,000
• Wine Tourism Tradeshow Booth Upgrade - $10,000
• Media Outreach Fam Tours - $5,000
Council may approve the additional allocations of the reserve account or indicate
changes necessary to gain approval.
Page 51 of 82
P.O. Box 2241 Tri-Cities, WA 99302-2241 509-735-8486 1-800-254-5824 www.VisitTRI-CITIES.com info@VisitTRI-CITIES.com
March 16, 2020
Mr. Dave Zabell
City of Pasco
P.O. Box 293
Pasco, WA 99301
Dear Mr. Zabell:
Thank you for the opportunity to present the Visit Tri-Cities 2019 Annual Report, 2020 Work Plan and to make a
request to utilize Tourism Promotion Area reserve funds to the Pasco City Council on Monday, March 23, 2020.
On behalf of the Tri-City Regional Hotel-Motel Commission, Visit Tri-Cities would like to request the transfer of
$417,700 from Tourism Promotion Area Reserve Account to be used for supplemental tourism related projects.
We prepare the Tourism Promotion Area (TPA) budget in July of each year for the following calendar year. As is
the case with most every budget process, there are always more worthy projects to be considered than funds to
support them. We manage our resources carefully to ensure our expenses never exceed our projected income and
we budget conservatively. As a result, the TPA Commissioners have identified $428,525 in funds available for
reinvestment in tourism related projects.
The funds available for project investment are in addition to the minimum reserve requirement of $500,000, the
amount set based on the recommendation of the City Managers who participate in at Commission meetings as Ex-
Officios. It is the Commission’s position that once the reserve account reaches this level, that any additional funds
should actively be used to promote the Tri-Cities as a destination; creating increased visitor spending in the
community. The projects under consideration accomplishes that goal.
Given that the balance of the Tourism Promotion Area Reserve Account exceeds the level of $500,000; the
Commissioners of the Tri-City Regional Hotel-Motel Commission have voted in favor of re-investing the surplus
revenues, in the amount of $417,700 that will help tourism related projects including digital, print and television
advertising and promotions to increase leisure travel stays and secure new conventions and sports tournaments.
Additional projects include digital displays, a mobile application for building itineraries, and support for media
outreach and iconic citywide events. A summary of the projects and the associated expenditures is attached for your
review.
Again, thank you for your consideration and support of the tourism industry. I am available for any questions or
comments you may have.
Sincerely,
Michael Novakovich
President and CEO
Enclosure
Page 52 of 82
1
TPA Proposed Reinvestments
TBEX 2021 Conference $75,000
The Tri-Cities has the opportunity to host the Travel Blog Exchange (TBEX) North America 2021 Conference.
TBEX is the largest conference and networking event for travel writers, online travel journalists, new media content
creators, travel brands and industry professionals. This conference has the potential to bring more than 450
qualified travel writers to our community, not only for the educational component offered at the
conference, but to experience all the Tri-Cities has to offer. This group of content creators has a reach of
more than 300 million consumers worldwide. Bringing this event to the Tri-Cities would have a substantial
impact for tourism and boon to our local economy.
The criteria for selection is the host destination must be able to demonstrate they can meet all the event
specifications, offer creative and unique story potential, and provide a resourceful and efficient team (Visit Tri-Cities
staff) to work with TBEX. The destination and their sponsors are responsible for providing the following:
Platinum Sponsorship at 2020 Conference ($12,500)
Attend conference prior to the one we are hosting as a platinum sponsor.
Transportation Costs ($62,500)
Host Roundtrip airfare and ground transportation for 50 VIPs, speakers and staff during
conference.
IRONMAN Event Support $75,000
Visit Tri-Cities is pursuing a bid to host a world-renowned IRONMAN event. As with most large
national/international sporting events there is a requirement for financial support from the organizers. This
financial support would only be incurred if the event is awarded to the destination. IRONMAN is one of the
world’s strongest brands, famous for being the premier full-distance and half-distance triathlon series.
Every IRONMAN race consists of a unique 2.4-mile swim, 112-mile bike, and 26.2-mile run. IRONMAN
events typically attracts more than 2,000 participants and over 5,000 spectators for each event and
generate between $4-7 million in economic impact for host destinations.
Contract Staff Position $75,000
Contract person/company to sell TBEX sponsorships to offset costs associated with hosting the conference
and act as event planner/coordinator. This person would also be used to assist with Ironman fundraising,
partnerships and event logistics.
Digital Displays $86,600
By investing in digital displays, staff will have the ability to captivate audiences with custom dynamic
promotions, pre-developed interactive content, or immediate uploads. Digital signage will create a one-of-
a-kind visual experience and engage customers in ways that our competition isn’t.
Social Wall ($3,300)
A custom social wall displayed in the Visit Tri-Cities Visitor Center that integrates with social
networks to display real-time engagement and social connections. Highlight current campaigns and
activities through a digital reach.
Page 53 of 82
2
Outdoor Kiosk ($47,700)
• Kiosk - $13,500
• Kiosk Display - $2,000
• Data integration, analytics, CMS, data tools - $14,500
• Maps, events, guestbook, itinerary - $10,500
• Annual Support - $7,200
Integration of Existing Airport and Convention Center Kiosk ($8,600)
• Integration to OMNI systems from current - $5,000
• Annual Support - $3,600
LED Digital Tradeshow Display - $27,000
A portable LED digital display will be utilized to enhance our current tradeshow booth atmosphere
with the most up-to-date technology. The LED is a self-contained turnkey video display stand with
an integrated media player and local storage that can play back any jpeg, video or visual media via
USB or Wi-Fi. Due to its custom features, the display will have the capacity to be utilized at
multiple tradeshows covering a variety of markets, including golf, wine, sports and conventions.
Omni Visitor Itinerary App $10,100
Mobile app (for iOS and Android) for travel and tourism. Custom built that integrates with existing
CRM/CMS systems. Features include custom, interactive maps, trails, transportation options to connect
locals and visitors. Unique tools to allow reward-based engagement from scavenger hunts, interactive
trails, ale trails. The ability to control and share options between kiosk, digital signage bringing to life the
connection between personal devices and onsite engagement.
• OMNI App - $6,500
• Annual Support - $3,600
• Maps, events, guestbook, itinerary (included in kiosk above)
New Market Advertising - Chicago $18,000
Visit Tri-Cities is expanding into new geographic markets to increase awareness of the Tri-Cities as a
premier destination for wine, outdoor recreation and STEM tourism.
Digital Advertising ($10,000) - Advertising to increase awareness of the Tri-Cities region as a
premier destination in the Pacific Northwest and support media relations efforts in the Chicago
area. Tactics may include programmatic, OTT (streaming television), social advertising and more.
Chicago Fam Tour ($8,000) - A direct daily flight will debut in June and Visit Tri-Cities has the
opportunity to promote the region in tandem with the Port of Pasco’s advertising efforts.
The FAM would host up to five travel writers and content creators associated with Chicago
travel and/or lifestyle publications.
Increase 2020 Opportunity Fund $48,000
In recent years the number of applicants for opportunity funds has increased and there has been some
concern that budget constraints would cause the funds committed to be depleted before all requests for
the year are considered. The 2020 budget did not allow for an increase to the opportunity fund due to
Page 54 of 82
3
other commitments. This increase would be applied to grants for events taking place in 2020 above the
budgeted $90,000.
Increase Quick Response Fund $15,000
The quick response fund allows the CEO to make opportunity fund grants to qualified groups if there is an
immediate need before the next Tri-City Hotel-Motel Commission is scheduled. It allows for flexibility and
ensures groups are not lost due to timing.
Wine Tourism Tradeshow Booth Upgrade $10,000
Visit Tri-Cities hosts a booth at Taste Washington and other consumer wine events in the Pacific Northwest
to promote the region as a premier wine destination. Upgrades would include new décor and interactive
components to engage attendees and increase awareness of the Tri-Cities.
Media Outreach Fam Tours $ 5,000
Visit Tri-Cities is putting an emphasis on media relations efforts in 2020 with a goal of hosting 22 travel
writers in the destination for various themed FAM tours including focuses on STEM, wine and outdoor
recreation. Targeted publications include regional travel and/or lifestyle publications such as SIP
Northwest, Seattle Met, Portland Monthly, Sunset Magazine as well as writers associated with travel
sections for metropolitan newspapers such as The San Francisco Chronicle.
TOTAL: $417,700
Page 55 of 82
Page 56 of 82
ITEMS FOR DISCUSSION
•2019 State of the
•2020 Work Plan
•TPA Reserve Request
Tourism Industry
Page 57 of 82
Page 58 of 82
TRI-CITIES GUEST ROOMS SOLD
2018 2019 Variance
Richland 320,801 rooms 342,403 rooms +21,602 (+6.7%)
Kennewick 340,070 rooms 341,580 rooms +1,510 (+.4%)
Pasco 244,427 rooms 232,359 rooms –12,068 (–3.5%)
Tri-Cities 905,298 rooms 916,342 rooms +11,044 (+1.2%)
Source: December 2019 STR ReportPage 59 of 82
Page 60 of 82
CONVENTION & SPORTS
•Hosted 209 conventions & sporting events in 2019
•$33.6 million in visitor spending
•216 new events secured for 2020 and beyond
•Estimated future visitor spending $48.3 million
Page 61 of 82
MEDIA
•57 Tri-Cities travel
related stories
•12 Travel writers and
bloggers hosted
•5,644,966 positive
media views
OUTREACH
Page 62 of 82
DIGITAL AND SOCIAL MEDIA
Social Media
More than 1.5 million social
media impressions!
MARKETING
24,780
5,974
7,455
Page 63 of 82
OTT & TRADITIONAL BROADCAST
9,445,913 impressions
Tri-Cities commercials aired in the Puget Sound,
Portland, Spokane, Boise and Minneapolis
earning
Page 64 of 82
VISIT TRI-CITIES PUBLICATIONS
•Official Tri-Cities Visitor Guide
•Golf & Wine Brochure
•Tourism News
•Shop Map
•Dine Map
•Wine Map
Page 65 of 82
WORK
PLAN FOR
2020
Page 66 of 82
TPA funds available $740,629
Previously approved projects $312,104
Funds available for reinvestment:$428,525
TPA Reserves Available
Page 67 of 82
TPA RESERVE ACCOUNT REQUESTS
PROPOSED PROJECTS:
TBEX 2021 Conference $75,000
IRONMAN Event Support $75,000
Contract Staff Position $75,000
Digital Displays $86,600
Omni Visitor Itinerary App $10,100
New Market Advertising –Chicago $18,000
Increase 2020 Opportunity Fund $48,000
Increase Quick Response Fund $15,000
Wine Tourism Tradeshow Booth Upgrade $10,000
Media Outreach Fam Tours $ 5,000
Reserve Request Total $417,700
FUNDS AVAILABLE FOR REINVESTMENT $428,525
Page 68 of 82
Page 69 of 82
AGENDA REPORT
FOR: City Council March 19, 2020
TO: Dave Zabell, City Manager
Rick White, Director
Community & Economic Development
Workshop Meeting: 3/23/20
FROM: Jeff Adams, Associate Planner
Community & Economic Development
SUBJECT: SG Land Management LLC/Harris Road Annexation (MF# ANX 2020-001)
I. REFERENCE(S):
Overview Map
Vicinity Map
Current Comprehensive Plan map
Proposed Comprehensive Plan Map
Notice of Intent to Commence Annexation
II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS:
Discussion
III. FISCAL IMPACT:
None
IV. HISTORY AND FACTS BRIEF:
The owners of property located near the corner of West Court Street and Harris Road
have submitted a Notice of Intent to Commence Annexation.
The Notice of Intent has been reviewed by staff and has been determined to contain
sufficient signatures to initiate the annexation process. Notices of Intent are required to
contain the signatures of property owners representing at least 10 percent of the
assessed value of an area proposed for annexation.
In this case, the Notice of Intent contains the signatures of owners representing 100
percent of the assessed value within the proposed annexation area and approximately
50 percent of the total assessed valuation of the County island in this vicinity.
Page 70 of 82
V. DISCUSSION:
The petition method of annexation is a two-step process requiring the submittal of a
Notice of Intent to Commence Annexation proceedings, followed at a later date by an
actual annexation petition.
Upon receipt of a Notice of Intent to Commence Annexation the Council is required by
law to set a date to hold a public meeting to consider the annexation request. The next
available date for a public meeting is April 6, 2020.
Typically, following Council review of the proposed annexation and passage of a
resolution generally accepting the boundary, staff would prepare the annexation
petition for the proponent to circulate within the annexation area; upon return of the
petition the petition would be forwarded to the County Assessor for certification;
following the certification a date would be set for a public hearing for Council to
formally consider the annexation.
In this case staff recommends denial of the request for annexation until the updated
Comprehensive Plan Land Use Map is implemented, as the current land use
designation conflicts with the proposed Comprehensive Plan Land Use Map, as well as
the proposed Broadmoor Area Plan. The owner's representative has also indicated the
intent is to develop the property at a much higher density than that permitted under the
existing land use designation.
Delaying the acceptance of the Intent to Annex allows staff and owner to create a
Development Agreement that addresses density, design standards, infrastructure needs
and requirements and public services. In this case - the future Development Agreement
would be intended to also include the remaining property within the County island that
has not submitted or signed a Notice of Intent for annexation.
Legal counsel has advised that the creation of a Development Agreement must be in
conformance with the Comprehensive Plan. Assuming a September adoption date of
the Comprehensive Plan - work on a Development Agreement addressing the above
issues can occur this summer so adoption of the Comprehensive Plan and the intended
annexation can be processed concurrently.
Council discussion of this approach is requested by staff.
Page 71 of 82
Page 72 of 82
Page 73 of 82
Item:HartCompPlanApplicant:MapFile#:ANRESIDENTIAL6II-.I-__n_mLmCMIXEDRESIDENTI—c-I-T-Y-L-I-M-I-T-ST-aPage 74 of 82
MediumDensity$1;>WEProposedCompPlanFile#:ANItem:HartApplicant:Kji.44‘I’?20____‘F—c-I-¥\mefeiai.,¢(IVOWenisiden'/\sityResidentia160320Page 75 of 82
NOTICE OF INTENTION TO COMMENCE ANNEXATION PROCEDURES
TO: The City Council of the City of Pasco
525 North Third Avenue
Pasco, Washington 99301
Council Members:
The undersigned, who are the owners of not less than ten percent in value, according to
the assessed valuation for general taxation of the property for which annexation is
sought, hereby advise the City Council of the City of Pasco that it is the desire of the
undersigned owners of the following area to commence annexation proceedings.
The property herein referred to is described on Exhibit "1" attached hereto and is
depicted on Exhibit "2" further attached hereto.
It is requested that the City Council of the City of Pasco set a date not later than sixty
days after the filing of this request for a meeting with the undersigned to determine:
(1)Whether the City Council will accept the proposed annexation; and,
(2)Whether the City Council will require the assumption of existing City
indebtedness by the area to be annexed; and,
(3)Whether the City Council will require simultaneous zoning.
This page is one of a group of pages containing identical text material and is intended by
the signers of this Notice of Intention to be presented and considered as one Notice of
Intention and may be filed with other pages containing additional signatures which
cumulatively may be considered as a single Notice of Intention.
Page 76 of 82
Parcel "A" (APN #118 180 068):
EXHIBIT "1"
Harris Annexation Legal
THAT PORTION OF THE NORTHWEST QUARTER OF SECTION 18, TOWNSHIP 9 NORTH, RANGE 29 EAST AND THAT
PORTION OF THE NORTHEAST QUARTER OF SECTION 13, TOWNSHIP 9 NORTH RANGE 28 EAST, DESCRIBED AS
FOLLOWS:
COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 18; THENCE SOUTH 00°19'39" WEST, 40.00 FEET
ALONG THE WEST LINE OF SAID SECTION 18 TO A 5/8" REBAR STAMPED "WORLEY" ON THE SOUTHERLY RIGHT OF
WAY OF HARRIS ROAD; THENCE NORTH 89 °38'39" EAST, 177.98 FEET ALONG SAID RIGHT OF WAY TO A 5/8" REBAR
STAMPED "WORLEY" AND THE TRUE POINT OF BEGINNING: (SAID CORNER BEING THE NORTHEAST CORNER OF
PARCEL 1 OF RECORD SURVEY NO. 978 RECORDED IN AUDITOR'S FILE NO. 1686716, RECORDS OF FRANKLIN
COUNTY); THENCE SOUTH 89 °55'20" EAST, 477.00 FEET ALONG SAID RIGHT OF WAY; THENCE SOUTH 00°19'30"
WEST, 1021.10 FEET PARALLEL WITH THE WEST LINE OF SAID PARCEL; THENCE SOUTH 34 °08'44" WEST, 532.53 FEET
TO THE NORTHERLY RIGHT OF WAY OF COURT STREET; THENCE NORTH 55°51'17" WEST, 467.81 FEET ALONG SAID
RIGHT OF WAY TO A 5/8" REBAR STAMPED "WORLEY" MARKING THE MOST SOUTHERLY CORNER OF SAID PARCEL 1
AFOREMENTIONED; THENCE NORTH 21°47'33" EAST, 82.11 FEET ALONG THE EASTERLY LINE OF SAID PARCEL TO A
5/8" REBAR ON THE WEST LINE OF SAID SECTION 18; THENCE CONTINUING ALONG SAID EASTERLY LINE, NORTH
74 °31'02" EAST, 185.00 FEET; THENCE NORTH 00'19'30" EAST, 1074.27 FEET ALONG SAID EAST LINE OF SAID PARCEL
TO THE TRUE POINT OF BEGINNING.
TOGETHER WITH THAT PORTION OF SAID NORTHWEST QUARTER OF SECTION 18, DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 18; THENCE SOUTH 00 °19'39" WEST, 1162.58 FEET
ALONG THE WEST LINE THEREOF TO A 5/8" REBAR MARKING AN ANGLE POINT IN THE EASTERLY LINE THE ABOVE
DESCRIBED PARCEL; THENCE CONTINUING ALONG THE WEST LINE OF SECTION 18, SOUTH 00°21'56" WEST, 168.59
FEET TO THE NORTHERLY RIGHT OF WAY OF COURT STREET AND THE TRUE POINT OF BEGINNING; THENCE
CONTINUING SOUTH 00°21'56" WEST, 216.68 FEET TO A U.S.A.C.E. BRASS CAP ON THE McNARY PROJECT
BOUNDARY; THENCE SOUTH 55°07'35" EAST, 154.46 FEET ALONG SAID BOUNDARY TO THE MOST WESTERLY
CORNER OF LOT 14, PLAT OF HARRIS SUBDIVISION ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME C OF
PLATS, PAGE 92, RECORDS OF FRANKLIN COUNTY; THENCE NORTH 35'08'12" EAST, 170.80 FEET ALONG THE WEST
LINE OF SAID LOT 14; THENCE NORTH 87°50'12" EAST, 19.06 FEET TO THE SOUTHERLY RIGHT OF WAY OF COURT
STREET; THENCE NORTH 55°51'16" WEST, 293.23 FEET ALONG SAID RIGHT OF WAY TO THE TRUE POINT OF
BEGINNING.
CONTAINING 15.93 ACRES, MORE OR LESS.
Parcel "B" (APN #118 180 139):
THAT PORTION OF THE NORTHWEST QUARTER OF SECTION 18. TOWNSHIP 9 NORTH, RANGE 29 EAST DESCRIBED AS
FOLLOWS: COMMENCING AT THE NORTHWEST CORNER OF SAID SECTION 18; THENCE SOUTH 00°19'39" WEST,
40.00 FEET ALONG THE WEST LINE OF SAID SECTION 18 TO THE SOUTHERLY RIGHT OF WAY OF HARRIS ROAD;
THENCE NORTH 89°38'39" EAST 177.98 FEET ALONG SAID RIGHT OF WAY; SOUTH 89°55'20" EAST, 477.00 FEET
ALONG SAID RIGHT OF WAY TO THE TRUE POINT OF BEGINNING:
Page 77 of 82
THENCE CONTINUING SOUTH 89°55'20" EAST. 405.75 FEET TO A 5/8" REBAR STAMPED "STRATTON" MARKING THE
NORTHWEST CORNER OF LOT 2, SHORT PLAT NO. 2010-13 ACCORDING TO THE SURVEY THEREOF, RECORDED IN
VOLUME 1 OF SHORT PLATS, PAGE 834, RECORDS OF FRANKLIN COUNTY; THENCE SOUTH 01°20'30" WEST, 437.43
FEET ALONG THE WEST LINE OF SAID LOT 2 TO THE SOUTHWEST CORNER THEREOF; THENCE SOUTH 89°59'51" EAST,
686.68 FEET ALONG THE SOUTH LINE OF SAID LOT TO A 5/8" REBAR STAMPED "STRATTON" MARKING THE
SOUTHEAST CORNER OF SAID LOT 2; THENCE SOUTH 03°04'35" EAST, 216.66 FEET ALONG THE SOUTHERLY
PROLONGATION OF THE EAST LINE OF SAID SHORT PLAT TO A 5/8" REBAR STAMPED "ROGERS" ON THE WESTERLY
RIGHT OF WAY OF STATE ROUTE 182; THENCE SOUTHWESTERLY ALONG SAID RIGHT OF WAY THE FOLLOWING FIVE
COURSES: THENCE SOUTH 49°14'59" WEST, 250.70 FEET; THENCE SOUTH 53°09'39" WEST, 150.33 FEET; THENCE
SOUTH 51°38'31" WEST, 1000.40 FEET; THENCE SOUTH 32°59'13" WEST, 104.95 FEET; THENCE SOUTH 21°44'58"
WEST, 12.90 FEET TO A POINT OF NON-TANGENT CURVE CONCAVE TO THE SOUTHWEST ON THE NORTHERLY RIGHT
OF WAY OF WEST COURT STREET; (THE LONG CHORD OF SAID CURVE BEARS NORTH 54°59'24" WEST, 164.44 FEET)
THENCE WESTERLY, 164.45 FEET ALONG SAID RIGHT OF WAY ON THE ARC OF SAID CURVE THROUGH A CENTRAL
ANGLE OF 02 °12'37"; THENCE NORTH 55°51'17" WEST, 129.54 FEET ALONG SAID RIGHT OF WAY; THENCE NORTH
34°08'44" EAST, 532.53 FEET; THENCE NORTH 00°19'30" EAST, 1021.10 FEET TO THE TRUE POINT OF BEGINNING.
CONTAINING 22.77 ACRES, MORE OR LESS.
Page 78 of 82
SURIIEYOR'S NARRAIIYf· l000( RECORD SURVEY
�� !iii� 1,1
FOR BOUNDARY LINE ADJUSTMENT
IN THE NW 1/4, SEC. 18, TOWNSHIP 9 NORTH, RANGE 29 EAST. & IN THE NE 1/4, SEC. 13, TOWNSHIP 9 NORTH, RANGE 28 EAST, W.M. FRANKLIN COUNTY, WASHINGTON
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NOTES:
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CWW.Tot,1• CURVE l£NGTH RADIUS DELTA Qi. BRNG. 010RO C1 164.45 4252.75 2'12"Jr NM'59'24"'W 154.4-4
SURVE YOR'S CERTIFJCATE THIS MN' COAR£CTLY REPRESEN'1S A SU� M.trDE: 8'f ME OR WUR MY DIRECTION ... COHfORW,NCE WfTH THE R£QUIRDIENTS CE 1HE SUfNEY RECORDING N:r AT ll-!E REQUEST OF HMRIS fJIMILY TRUST .. OCTOBER, 2011.
GARY 8. WACN£A PlSf30440
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000
5. (M) • MfASURED PER MS SlM\C' (RI) • RECORD PER SURVEY #978 S. TI-IS SURVEY DOES NOT PUIIPORT ID SHOW Al..l EASEWMS or RECORD. 7, COURT STRffi RIGHT Of WI« IN SEC110N 18 WAS OCT'ERMINED FROM A flEl.D AS-BUILD Of lME EXISTING CENTERl..JNE WHICH VARIES CONSIOEFW!l.Y FROM & FROM lHE AIJGfMENT SHOWN OM tWtilS SUBDMSK>N. 19. THIS SUIM:Y '-.s PEN'OF.tilED UTUZlHG 'TRIMBI.E MULTI FREQUENCY GNSS REC£NERS CONFIGURED FOR R£AI.. TIME KIHEW.TIC �
AUDITOR'S CERT IFICATE AL£D fOR RECORD THIS __ MY Of ____ _ 20--AT __M. IN ""'-'"" __ OF SURVEYS. AT PN:iE __ AT lH£ REQUEST OF ROGERS SURVEYING.
F'RNOQJN COUNT'r AI.OTOR !iJc��ROGERS -
SURYltYINC INC., P.S,
1466 co.tUDIA pjltl rlU1l, AICIIUJQ, ..... � �<J:.°!>1:l�i�1 YW.r•••w�oom.
Cl.ENT
PROJECT
MH>frOR's FlL.L NUMBER -NONC
HARRIS IJVJNG TRUST
BOUNDARY LINE ADJUSTMENT
PORTION OF SEC. 1 B, T9N., R29E DRN.'1iY 1------G8W I SCALE ,._ 200· I F. ·a.-NO. � I APPR<MD GBW MlE 10 /07 /19 � VER:,1 4�11
JOO 31419
stEET...! � Page 79 of 82
NEW LfGAL DESCR1PTIONS·
FOR BOUNDARY LINE ADJUSTMENT
IN THE NW 1/4, SEC. 18, TOWNSHIP 9 NORTH, RANGE 29 EAST, & IN THE NE 1/4, SEC. 13, TOWNSHIP 9 NORTH, RANGE 28 EAST, W.M. FRANKLIN COUNTY, WASHJNGTON
Al/DITOR'S CERTIFICATE Page 80 of 82
Affidavit of Signature for
Annexation Notice of Intent and Petition
Under the penalty of perjury, I declare under oath, that I am authorized to sign deeds and
encumbrances on behalf of .SC--/Jvo p<-,,.J,'e.� llc__, and I am further
authorized to sign other documents including Notices of Intent and Petitions.
Signature
State of Washington
County of f, c.v\..\c,1'
): ss.
)
I /2'3/2.o-Z. 0== Date
I certify that I know or have satisfactory evidence that £t.:\<-< 5 ;,-r.-t.'r-... "'--is the person who appeared
b fore me, and said person acknowledged that�she) signed this instrument, on oath stated that
she) was authorized to execute the instrument and acknowledged it as
____________ of _____________ to be the free and voluntary act
of such party for the uses and purposes mentioned in the instrument .
.,. "'
Given under my hand and official seal this 1..!__ day of 'J "'"'½K':f a� I 2020
NOTARY PUBLIC in and for the State of Washington
Residing at: -�-'--'-'�,....,.__,,_u ________ _
My Commission Expires: i \-'2. C..- '2 I.)
Page 81 of 82
1.Please print your name in addition to signing.
PRINT NAME SIGNATURE ADDRESS DATE
Page 82 of 82