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HomeMy WebLinkAbout4533 Ordinance - Northwest ULID No. 151ORDINANCE NO. 4533 AN ORDINANCE of the City of Pasco, Washington, relating to Local Improvement District No. 151; converting LID No. 151 into a utility local improvement district; authorizing the issuance of a subordinate lien water and sewer revenue bond anticipation note (utility local improvement district) to provide interim financing necessary to pay costs of constructing the Northwest Area sewer trunk line, pending the issuance of water and sewer revenue bonds (utility local improvement district) authorized pursuant to Ordinance No. 4483; fixing the terms of the note; providing for the purchase of the note by the City from funds on deposit in the City's General Fund; and providing for related matters. THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, DO ORDAIN as follows: Section 1. Findings and Determinations. The City Council (the "Council") of the City of Pasco, Washington (the "City") takes note of the following facts and makes the following findings and determinations: (a) Pursuant to Ordinance No. 4483 passed on March 2, 2020, the Council created Local Improvement District No. 151 ("LID No. 151") to finance the cost of designing and constructing the Northwest Area sanitary sewer trunk, approximately 12,000 linear feet of trunk sewer piping from Harris Road to one-quarter mile north of Burns Road, all as provided in Ordinance No. 4483 and the plans and specifications therefor prepared by the Capital Improvement Program Manager of the City, as may be modified by the Council consistent with the purposes of such improvements (the "Improvements"). The Improvements constitute a part of the combined sewerage system and water system of the City (the "Waterworks Utility") (b) RCW 35.43.043 authorizes the Council by ordinance to convert any existing local improvement district into a utility local improvement district at any time prior to the adoption of an ordinance approving and confirming the final assessment roll of such local improvement district if the ordinance so converting the local improvement district provides for the payment of the -1- FG:54284306.2 special assessments levied in that district into the special fund established or to be established for the payment of revenue bonds issued to defray the cost of the local improvement in that district. (c) The ordinance approving and confirming the final assessment roll for LID No. 151 has not been adopted, and the Council has determined it is in the City's best interests to convert LID No. 151 into a utility local improvement district ("Utility Local Improvement District No. 151" or "ULID No. 151") by this ordinance. (d) Pursuant to Ordinance No. 4483, the City determined the total estimated cost and expense of the Improvements to be $6,880,000, of which an estimated $5,770,000 is to be assessed against the properties within ULID No. 151, and authorized local improvement district bonds, hereinafter water and sewer revenue bonds (utility local improvement district) (the "Bonds"), to be issued in exchange for and/or in redemption of the Water and Sewer Revenue Bond Anticipation Note, 2021 (Utility Local Improvement District No. 151) (the "Note") authorized by this ordinance. (e) Pursuant to Ordinance Nos. 4126, 4254, 4365 and 4487, the City reserved the right to: (1) issue revenue bonds or incur other obligations ("Subordinate Lien Obligations") that are a charge upon the gross revenue, subject to operating and maintenance expenses ("Net Revenue"), of the Waterworks Utility subordinate or inferior to the payments required to be made into the bond fund for the payment of outstanding and future revenue bonds secured by a lien and charge on Net Revenue prior and superior to any other charges ("Parity Bonds"); and (ii) pledge the payment of utility local improvement district assessments into a redemption fund created for the payment of the principal of and interest on Subordinate Lien Obligations as long as such utility local improvement district assessments are levied for improvements constructed from the proceeds of those Subordinate Lien Obligations. -2- FG:54284306.2 (f) The City has determined to issue the Note as a Subordinate Lien Obligation to provide interim financing of costs and expenses of the Improvements pending issuance of the Bonds, all pursuant to chapter 39.50 RCW. (d) RCW 39.59.040(1) provides that any local government in the state of Washington may invest in bonds (including notes) of any local government in the state of Washington. (e) The City desires to obtain an investment return, comparable to the tax-exempt interest rate that the Note would bear if sold in the municipal bond market, on the portion of the funds available in the City's General Fund that it otherwise would regularly invest but instead are used to make an interfund loan to ULID No. 151, evidenced by the Note, to provide interim financing of costs of the Improvements. The City finds it in the best interest of the City that the Note be purchased by the City from funds on deposit in the City's General Fund and available for investment. Section 2. 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 Improvements, all in accordance with the plans and specifications prepared by the staff and consulting engineers of the City and subject to any modification by the Council that does not substantially alter the purposes of the Improvements. Section 3. Authorization and Description of the Note. The City is hereby authorized to issue the Note in accordance with chapter 39.50 RCW. The Note shall be issued in the total principal amount of $3,285,273; shall be dated its date of delivery; shall mature on December 1, 2022 (the "Maturity Date"); shall be subject to renewal or refunding by the issuance of short-term obligations; shall be in fully registered form; and shall be numbered R-1. The Note shall bear -3- FG:54284306.2 interest at the rate of 3.25% per annum computed on the basis of a 360 -day year of twelve 30 -day months, payable, subject to renewal or refunding, on the Maturity Date. Section 4. Appointment of Note Registrar; Registration and Transfer of Note. The Finance Director of the City (the "Finance Director") is appointed Note Registrar for the Note. The Note shall be issued to the City's General Fund (the "Registered Owner") only in registered form as to both principal and interest and shall be recorded on books or records maintained by the Note Registrar (the "Note Register"). The Note Register shall contain the name and mailing address of the Registered Owner. The Note may not be assigned or transferred by the Registered Owner. When the Note has been paid in full, both principal and interest, it shall be surrendered by the Registered Owner to the Note Registrar, who shall cancel the Note. Section 5. ULID Fund No. 151; Payment of Note. There is established in the office of the Finance Director for Utility Local Improvement District No. 151 a special utility local improvement district fund to be known and designated as Utility Local Improvement Fund, District No. 151 (the "ULID Fund No. 151"). The Note may be paid from proceeds of the Bonds, from collections pertaining to assessments on the assessment roll of ULID No. 151 when hereafter received ("ULID No. 151 Assessments"), from the proceeds of the issuance of other short-term obligations of the City, from Net Revenue or from other money legally available. Both principal of and interest on the Note shall be payable solely out of ULID Fund No. 151. Section 6. Prepayment Provisions. The City reserves the right to prepay principal of the Note prior to its Maturity Date on any date, at par plus accrued interest to the date fixed for prepayment, whenever there shall be sufficient money in ULID Fund No. 151 to prepay the principal of the Note over and above the amount required for the payment of the interest then due -4- FG:54284306.2 on the Note. Interest on the principal of the Note so prepaid shall cease to accrue on the date of such prepayment. Section 7. Pledge of ULID No. 151 Assessments and Net Revenue. (a) The City covenants and agrees that all ULID No. 151 Assessments shall be deposited into ULID Fund No. 151 for the payment of the principal of and interest on the Note. (b) The Net Revenue is pledged to be paid into ULID Fund No. 151 for the payment of the principal of and interest on the Note when due (taking into account other money then on deposit therein), subject to the lien and claim on Net Revenue of Parity Bonds. (c) The Note does not constitute an obligation of the state, either general or special, or a general obligation of the City, but is a special obligation of the City. The Registered Owner does not have any claim for the payment of the Note against the City except for payment from the ULID Fund No. 151 and the ULID No. 151 Assessments and Net Revenue pledged to the ULID Fund No. 151. (d) The Council has taken due regard to the cost of operation and maintenance of the Waterworks Utility and to the Net Revenue previously pledged, and the Council has not pledged to set aside a greater amount or proportion of Net Revenue than in its judgment will be available over and above the cost of maintenance and operation of the Waterworks Utility and the amount or proportion of Net Revenue so previously pledged. Section 8. Purchase and Sale of Note. The City shall purchase the Note at a price of par with funds on deposit in the City's General Fund that the Finance Director determines are available for that purpose. The proper City officials are authorized and directed to do everything necessary for the prompt delivery of the Note and for the proper application and use of the proceeds of the sale thereof. -5- FG:54284306.2 Section 9. Effective Date of Ordinance. This ordinance shall be in full force and effect from and after five days from the date of its passage and publication as provided by law. Passed by the City Council this 3rd day of May, 2021, and signed in authentication of its passage this 3rd day of May, 2021. CITY OF PASCO, WASHINGTON By Saul Martinez, Mayor ATTEST: Debby Barham, City Clerk APPROVED S TO FOR : City Atto9 Published: �/ & -a-Z4 -6- FG:54284306.2