CITY OF SEATTLE
ORDINANCE __________________
COUNCIL BILL __________________
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AN ORDINANCE relating to the drainage and wastewater system of The City of Seattle; amending Ordinance 125454 to increase the authorized principal amount of drainage and wastewater revenue bonds to be issued for the purposes of paying all or part of the cost of carrying out the system or plan of additions and betterments to and extensions of the existing drainage and wastewater system; making certain other technical amendments to Ordinance 125454 and Exhibit B thereto; and ratifying and confirming certain prior acts.
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WHEREAS, by Ordinance 125454, passed on November 20, 2017, The City of Seattle, Washington (the “City”), provided for the issuance of not to exceed $210,000,000 principal amount of Drainage and Wastewater System Bonds (the “Bonds”) for the purposes of paying all or part of the cost of carrying out the Plan of Additions, providing for the Reserve Requirement for the Parity Bonds, and issuing and selling the Bonds; and
WHEREAS, the City deems it desirable to increase the authorized principal amount of drainage and wastewater revenue bonds and make certain other technical amendments to Ordinance 125454; NOW THEREFORE,
BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:
Section 1. Definitions. The meaning of capitalized terms used and not otherwise defined in this ordinance shall be as set forth in Ordinance 125454.
Section 2. Amendment of Section 2 of Ordinance 125454. Section 2 of Ordinance 125454 is hereby amended as follows. Deleted information is shown as strikeouts and inserted information is shown as double underlined.
Section 2. Adoption of Plan of Additions. The City specifies, adopts and orders the Plan of Additions to be carried out as generally provided for in the documents comprising the Plan of Additions. The estimated cost of the Plan of Additions, as near as may be determined, is declared to be (($1,031,866,000)) $1,279,666,000, of which approximately (($210,000,000))$350,000,000 is expected to be financed from proceeds of the Bonds and investment earnings thereon.
Section 3. Amendment of Section 5 of Ordinance 125454. Section 5 of Ordinance 125454 is hereby amended as follows. Deleted information is shown as strikeouts and inserted information is shown as double underlined.
Section 5. Appointment of Designated Representative; Bond Sale Terms.
(a) Designated Representative. The Director of Finance is appointed to serve as the City’s designated representative in connection with the issuance and sale of the Bonds in accordance with RCW 39.46.040(2) and this ordinance.
(b) Parameters for Bond Sale Terms. The Director of Finance is authorized to approve, on behalf of the City, Bond Sale Terms for the sale of the Bonds in one or more Series, and, in connection with each such sale, to execute a Bond Purchase Contract (which, in the case of a Series sold to the United States Environmental Protection Agency (“US EPA”), may be in the form of a loan agreement with the US EPA under the Water Infrastructure Finance and Innovation Act (“WIFIA”) program, or, in the case of a Series sold at competitive sale, a Pricing Certificate) confirming the Bond Sale Terms and such related agreements as may be necessary or desirable, consistent with the following parameters:
(i) Maximum Principal Amount. The maximum aggregate principal amount of all Series of the Bonds authorized by this ordinance is not to exceed $((210))350 million.
(ii) Date or Dates. Each Bond shall be dated its Issue Date, as determined by the Director of Finance. The initial Issue Date (without restricting any conversion or reissuance date with respect to a Series of Variable Interest Rate Bonds and without restricting the dates of any draws on any Series of the Bonds structured as draw-down obligations) may be no later than December 31, ((2020))2021.
(iii) Denominations. The Bonds shall be issued in Authorized Denominations.
(iv) Interest Rate(s). Each Bond shall bear interest from its Issue Date or from the most recent date to which interest has been paid or duly provided, whichever is later, unless otherwise provided in the Bond Documents. Each Series of the Bonds shall bear interest at one or more fixed interest rates or at Variable Interest Rates. The net interest cost for any fixed rate Series may not exceed a rate of 10% per annum. The Bond Documents for any Series may provide for multiple interest rates and interest rate modes, and may provide conditions and mechanisms for the Director of Finance to effect a conversion from one mode to another. Nothing in this ordinance shall be interpreted to prevent the Bond Documents for any Series from including a provision for adjustments to interest rates during the term of the Series upon the occurrence of certain events specified in the applicable Bond Documents.
(v) Payment Dates. Interest shall be payable on dates acceptable to the Director of Finance. Principal shall be payable on dates acceptable to the Director of Finance, which shall include payment at the maturity of each Bond, in accordance with any Sinking Fund Requirements applicable to Term Bonds, and otherwise in accordance with any redemption or tender provisions.
(vi) Final Maturity. Each Bond shall mature no later than 40 years after its Issue Date.
(vii) Redemption Prior to Maturity. The Bond Sale Terms may include redemption and tender provisions, as determined by the Director of Finance in his or her discretion, consistent with Section 8 and subject to the following:
(A) Optional Redemption. The Director of Finance may designate any Bond as subject to optional redemption prior to its maturity. Any Tax-Exempt Bond that is subject to optional redemption prior to maturity must be callable on at least one or more dates occurring not more than 10½ years after the Issue Date, consistent with Section 8(a).
(B) Mandatory Redemption. The Director of Finance may designate any Bond as a Term Bond, subject to mandatory redemption prior to its maturity on the dates and in principal payment amounts set forth in Sinking Fund Requirements, consistent with Section 8(b).
(C) Extraordinary Redemptions. The Director of Finance may designate any Bond as subject to extraordinary optional redemption or extraordinary mandatory redemption upon the occurrence of an extraordinary event, as such event or events may be set forth in the applicable Bond Documents, consistent with Section 8(c).
(D) Tender Options. The Director of Finance may designate any Variable Interest Rate Bond as subject to tender options, as set forth in the applicable Bond Documents.
(viii) Price. The Director of Finance may approve in the Bond Sale Terms an aggregate purchase price for each Series of the Bonds that is, in his or her judgment, the price that produces the most advantageous borrowing cost for the City, consistent with the parameters set forth herein and in any applicable bid documents.
(ix) Other Terms and Conditions.
(A) Expected Life of Capital Facilities. As of the Issue Date of each Series, the Director of Finance must additionally find to his or her satisfaction that the average expected life of the capital facilities to be financed with the proceeds (or allocable share of proceeds) of that Series must exceed the weighted average maturity of such Series (or share thereof) allocated to financing those capital facilities.
(B) Parity Conditions Satisfied. As of the Issue Date of each Series, the Director of Finance must find that the Parity Conditions have been met or otherwise satisfied, so that such Series is permitted to be issued as Parity Bonds.
(C) Additional Terms, Conditions, and Agreements. The Bond Sale Terms for any Series may provide for Bond Insurance, a Reserve Security, Qualified Letter of Credit, credit enhancement, or for any other Payment Agreement as the Director of Finance may find necessary or desirable. The Bond Sale Terms for any Series may provide for multiple interest rate modes and may include provisions for conversion from any interest rate mode to any other mode. To that end, the Bond Sale Terms may include such additional terms, conditions, and covenants as may be necessary or desirable, including but not limited to: restrictions on investment of Bond proceeds and pledged funds (including any escrow established for the defeasance of the Bonds), provisions for the conversion of interest rate modes, provisions for the reimbursement of a credit enhancement provider or Qualified Counterparty, and requirements to give notice to or obtain the consent of a credit enhancement provider or a Qualified Counterparty. The Director of Finance is authorized to execute, on behalf of the City, such additional certificates and agreements as may be necessary or desirable to reflect such terms, conditions, and covenants. In addition and without limiting any of the foregoing, the Bond Purchase Agreement setting forth the Bond Sale Terms for any one or more Series of the Bonds may take the form of a WIFIA Loan Agreement with the US EPA and may provide for such additional terms, conditions and covenants as may be required by US EPA and as are not inconsistent with other provisions of this ordinance.
(D) Reserve Requirement. The Bond Sale Terms must establish whether the Series is to be treated as Covered Parity Bonds and must establish the method of providing for the Reserve Requirement, consistent with Section 15.
(E) Tax Status of the Bonds. The Director of Finance may determine that any Series of the Bonds may be designated or qualified as Tax-Exempt Bonds, Taxable Bonds or Tax Credit Subsidy Bonds, consistent with Section 22.
Section 4. Amendment to Exhibit B of Ordinance 125454. Exhibit B to Ordinance 125454 is hereby amended as shown in the attached Exhibit A. Deleted information is shown as strikeouts and inserted information is shown as double underlined.
Section 5. General Authorization. In addition to the specific authorizations in this ordinance, the Mayor and the Director of Finance and each of the other appropriate officers of the City are each authorized and directed to do everything as in his or her judgment may be necessary, appropriate, or desirable in order to carry out the terms and provisions of, and complete the transactions contemplated by, this ordinance.
Section 6. Severability. The provisions of this ordinance are declared to be separate and severable. If a court of competent jurisdiction, all appeals having been exhausted or all appeal periods having run, finds any provision of this ordinance to be invalid or unenforceable as to any person or circumstance, such offending provision shall, if feasible, be deemed to be modified to be within the limits of enforceability or validity. However, if the offending provision cannot be so modified, it shall be null and void with respect to the particular person or circumstance, and all other provisions of this ordinance in all other respects, and the offending provision with respect to all other persons and all other circumstances, shall remain valid and enforceable.
Section 7. Ratification of Prior Acts. Any action taken consistent with the authority of this ordinance, after its passage but prior to the effective date, is ratified, approved and confirmed.
Section 8. Section Headings. Section headings in this ordinance are used for convenience only and shall not constitute a substantive portion of this ordinance.
Section 9. Effective Date. This ordinance shall take effect and be in force 30 days after its approval by the Mayor, but if not approved and returned by the Mayor within ten days after presentation, it shall take effect as provided by Seattle Municipal Code Section 1.04.020.
Passed by the City Council the ________ day of _________________________, 2018, and signed by me in open session in authentication of its passage this _____ day of _________________________, 2018.
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President ____________ of the City Council
Approved by me this ________ day of _________________________, 2018.
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Jenny A. Durkan, Mayor
Filed by me this ________ day of _________________________, 2018.
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Monica Martinez Simmons, City Clerk
(Seal)
Exhibits:
Exhibit A - Amended Exhibit B to Ordinance 125454