HomeMy WebLinkAboutPW07-148 - Other - The City of Tacoma - The Second Supply Project Partnership Agreement - 11/01/2002 ��. Records M - - gem e
KENT Document
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CONTRACT COVER SHEET
This is to be completed by the Contract Manager prior to submission to City Clerks Office. All
portions are to be completed, if you have questions, please contact Mary Simmons, City
Clerks Office.
Vendor Name:
Contract Number:
This is assigned by Mary Simmons
Vendor Number:
Project Name: S T to"o ,2 f sM, mEn �sr fsz
`J Contract Effective Date:
Contract Termination Date:
Contract Renewal Notice (Days):
Number of days required notice for termination or renewal or amendment
Contract Manager: L-a t, 222o
Department: Qg4e a/.'4q
Abstract: n
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REPAYMENT AGREEMENT
This Agreement, effective November 1, 2002, is by and among the City of Tacoma,
Washington ("Tacoma"), the City of Kent, Waslungton ("Kent"), Covington Water District
("Covington") and Lakehaven Utility District ("Lakehaven" and, collectively, the
"Participants")
WHEREAS, the Participants entered into the Agreement for the Second Supply Project
(the "Project Agreement") to obtain required permits for, design, finance, construct, operate and
maintain certain property and facilities to obtain and receive deliveries of water for the
Participants from the exercise by Tacoma of the Second Diversion Water Right (the "Project'),
and
WHEREAS, the Project offers to all of the Participants an additional source of water with
the benefits of joint development, tax exempt financing and economies of scale; and
WHEREAS, Tacoma has agreed to finance, to the extent not prepaid by Participants,
Initial Project Construction costs (as defined in the Project Agreement) by the issuance of
nonrecourse revenue bonds to be issued by Tacoma for a separate regional water supply system
(as defined in the Project Agreement, "Project Bonds"); and
WHEREAS, Lakehaven has elected to pay its share of Initial Project Construction costs
and will not participate in the issuance of the Project Bonds, and
WHEREAS, Kent and Covington have elected to have Tacoma issue Project Bonds to
finance a portion of their shares of Initial Project Construction costs; and
WHEREAS, the Tacoma Public Utility Board has approved and the Tacoma City Council
will adopt an ordinance (the "Ordinance") authorizing Tacoma to issue not to exceed
$100,000,000 principal amount of its Regional Water Supply System Revenue Bonds, 2002 (the
'Bonds'), to finance the portion of the Project described in the Ordinance; and
WHEREAS, the Tacoma City Council will adopt a resolution(the "Resolution") once the
Bonds are sold setting the final terms of the Bonds; and
WHEREAS, it is advisable to elaborate on the Project Agreement's payment sections,
and
WHEREAS, the Bonds will be Project Bonds under the Project Agreement; and
WHEREAS, the Participants wish to set forth the terms under which the Participants shall
make payments to Tacoma equal to their share of the principal of and interest on the Bonds when
due and to confirm other matters required to market the Bonds, and
WHEREAS, this Agreement has been duly authorized by ordinance or resolution of each
of the Participants and by the City,
NOW, THEREFORE, the Participants agree as follows
Section 1. Term. This Agreement shall take effect upon its execution by the
Participants and shall expire when the Bonds are no longer outstanding under the Ordinance.
Section 2 Payments by Kent and Covington
Notwithstanding any provision of Section 25 of the Project Agreement to the contrary,
Kent and Covington's obligations to repay their share of the Bonds shall be governed by the
following provisions.
(a) Covington and Kent hereby acknowledge and agree that they shall pay Tacoma
22.0914% and 22.9348%, respectively, of the principal of and interest on the Bonds and are
liable to repay Tacoma amounts due and owing with respect to such principal and interest as
estimated on Schedule A. A final schedule showing Covington and Kent's proportionate share
of the payments of debt service on the Bonds will be attached to this Agreement when the
Resolution has been adopted by the Tacoma City Council.
Interest on the Bonds is payable semiannually on each June 1 and December 1,
commencing June 1, 2003. Principal of the Bonds shall be payable annually on each
December 1, commencing in 2005 and ending in 2032 Interest on the Bonds shall be calculated
based on a 360-day year of twelve 30-day months The Bonds shall bear interest at the rates set
forth in the Resolution.
(b) Kent and Covington shall remit to Tacoma by the 15th day of each month (or the
next following business day if such date is not a business day), commencing with the month
following the issuance of the Bonds, an amount equal to one-sixth of the interest and one-twelfth
of the prmcipal (or such greater fraction if there are less than six or twelve months, as applicable,
to the next interest or principal date) next coming due based on their percentage share of the
Bonds as shown on the final Schedule A. Payments shall be sent by check or electronic transfer
to the address or account shown on Schedule B Tacoma shall not be required to bill Kent and
Covington for these payments All interest earnings on the amounts subrnitted by Kent and
Covington in any year shall be used to reduce their respective first monthly interest and principal
payment in the next succeeding year. Each December Tacoma shall send Kent and Covington a
reconciliation statement showing their January payment to reflect the interest earned on their
prior year's payments
(c) Tacoma agrees to deposit all amounts received from the Participants under this
Agreement in the City of Tacoma Regional Water Supply System Bond Fund created under the
Ordinance and to use such money for the sole purpose of paying the principal of and interest on
the Bonds and Future Panty Bonds (as defined in the Ordinance). If Tacoma draws on the
Reserve Account to cover a payment not made by any Participant, Tacoma may deposit amounts
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related to such late payments paid pursuant to paragraph(b) above to the Reserve Account to
meet the Reserve Account Requirement(as such terms are defined in the Ordinance).
(d) Kent and Covington may provide for the prepayment of all or a portion of their
allocable share (in increments of$5,000)of the Bonds on any date when the Bonds are subject to
optional redemption (at the price set forth in the Resolution) upon at least 60 days written notice
to Tacoma at the address shown on Schedule B. Tacoma shall apply those amounts to the
redemption and prepayment of an allocable portion of the Bonds
(e) Consistent with the terms of the Project Agreement, each Participant agrees that it
will establish, maintain and collect rates and charges for water and other services, facilities and
commodities sold, fumished or supplied by it through its water system which shall be adequate
to provide revenues sufficient to enable the Participant to make its required payments under tlus
Agreement (in the case of Kent and Covington) and the Project Agreement and comply with the
rate covenants in their respective resolutions or ordinances authorizing their senior lien water
bonds (as such covenants may be changed).
(f) Kent and Covington shall remain obligated to provide for their respective shares
of debt service on the Bonds listed on final Schedule A unless all Participants consent to add a
new Participant or to permit an existing Participant to assign its interests to a new Participant and
all of the requirements set forth in Section 20(c) of the Ordinance are met In such event,
Schedule A shall be adjusted to reflect the revised debt service schedule for all Participants,
including the new Participant. All other terms and conditions of this Agreement shall remain in
full force and effect.
(g) Tacoma may to its sole discretion issue bonds that refund the Bonds ("Refunding
Bonds' if and only if there is a debt service savings for each maturity of Refunding Bonds
(compared to the Bonds and except as necessary to round out maturities to the nearest $5,000)
and the final maturity date of the Refunding Bonds is not later than that of the Bonds In such
event, Kent and Covington shall be obligated to provide for the payment of their respective
shares of the principal of and interest on those Refunding Bonds, and Schedule A shall be
adjusted to reflect the revised debt service schedule for the Refunding Bonds. Refunding Bonds
that do not provide the debt service savings with the maturities described above may be issued by
Tacoma only with the written approval by both Covington and Kent. "Refunding Bonds" shall
be treated as "Bonds" for the purposes of this Agreement, and all other terms and conditions of
this Agreement shall remain in full force and effect.
Section 3. Covenants
(a) Kent and Covington shall not (a) enter into any contracts with private parties for
the management of their water systems or (b)enter into any contracts with a private party or the
Federal Government that exceed three years (or such lesser period if informed in writing by
Tacoma) for the sale of water from the Project without providing a copy of any such proposed
contract to Tacoma for review by Tacoma and Tacoma's designated nationally recognized bond
counsel. Kent and Covington shall not execute any such contract if, in the opinion of such bond
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counsel, the sales or management agreement as proposed would adversely affect the tax-exempt
status on the Bonds.
(b) Kent covenants that it will not amend its Ordinance No. 3258 or adopt an
ordinance authorizing the issuance of revenue bonds the effect of which would be to limit Kent's
ability to declare Kent's obligations under the Project Agreement and this Agreement to be a
contract resource obligation of Kent. Kent agrees that it shall provide Tacoma a certificate of an
engineer as provided in Section 22 of Ordinance No. 3258 and take all other necessary action to
declare Kent's obligation to pay its share of costs of the Project as a contract resource obligation
of Kent
(c) Lakehaven covenants that (1) it will not amend its existing bond resolutions to
limit its ability or obligation (so long as the Project is producing water) to pay all costs of the
Project as operating and maintenance expenses of its system and (2) when it issues additional
bonds, it will amend its bond resolutions to permit it to treat its share of all costs of the Project,
including when the Project is not operating, as operating and maintenance expenses of its system
or as a contract resource obligations.
(d) Covington covenants that it will not issue any additional bonds on a panty of hen
with its Water Improvement and Refunding Revenue Bonds, 1995 and its Water Revenue
Refunding Bonds, 2001, and that it will include a provision in its future bond authorizing
resolutions enabling it to treat its share of all costs of the Project, including when the Project is
not operating, as a contract resource obligation
(e) Each Participant represents that it has no outstanding utility revenue bonds or
other obligations including Public Works Trust Fund loans, and covenants that it will issue no
future utility revenue bonds or other obligations including Public Works Trust Fund loans,that in
either case permit the owners or holders to accelerate debt in the event of a default. Each
Participant further covenants that it will not enter into any agreement or adopt any resolution or
ordinance granting the owners or holders of any revenue obligations the right to accelerate
payment in the event of default.
Section 4. Ongoing Disclosure To assist the underwriters of the Bonds in complying
with the ongoing disclosure requirements of Section(b)(5)(i) of Securities and Exchange
Commission Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (the "Rule'),
Covington and Kent agree to include reference to the Bonds in their regular ongoing disclosure
filings pursuant to the Rule or, in the absence of a regular ongoing disclosure filing, to provide or
cause to be provided annually to each nationally recognized municipal securities information
repository and to the state information depository for the State of Washington (if one is created),
in each case as designated by the SEC in accordance with the Rule, audited financial statements
prepared in accordance with generally accepted accounting principles applicable to Washington
municipal corporations (except as noted in such financial statements) within eight months after
each fiscal year. Covington and Kent shall provide Tacoma a copy of such filing by each
September Vt
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Section 5. Official Statement The Participants acknowledge that Tacoma is
preparing an official statement for the sale of the Bonds. The Participants agree to cooperate
with Tacoma in providing information regarding the Participant for inclusion in the Official
Statement and to certify that the information provided is accurate
Section 6. Assignment; Third Party Beneficiary The Participants shall not assign
their interests or obligations under this Agreement without the prior written consent of all the
other Participants This Agreement shall inure to the benefit of and shall bind the respective
assignees. The Bondowner's Trustee (as defined in the Ordinance) may enforce a Participant's
obligation to provide for payments that are due under this Agreement There are no other third
party beneficiaries of this Agreement.
Section 7. Communications Communications between the parties, including
reconciliation statements and electronic transfers sent pursuant to Section 2(b), shall be delivered
in person, mailed, e-mailed or faxed to the addresses and to the attention of the person and
account specified on Schedule B of this Agreement. A party may change such address or
account or specified person by submitting to the other parties a revised Schedule B
Section 8 Operating Reserve. The Parties agree to establish an operating reserve
account to help smooth out operating expenses and provide a contingency. The Project
Committee shall, from time to time, establish the appropriate level of operating reserve, which
amount shall be not less than $200,000
Section 9 Amendments, Reliance No amendment of any provision of this
Agreement shall be valid unless set forth in a written amendment signed by all parties Tacoma
will issue the Bonds in reliance on this Agreement.
Section 10 Severability If a provision of this Agreement is held to be invalid or
unenforceable in any respect, such invalidity or unenforceability shall not affect any other
provision and this Agreement shall be construed as if such invalid or unenforceable provision
had never been contained in this Agreement
Section 11. Governing Law. This Agreement shall be governed and interpreted under
the laws of the State of Washington.
Section 12. Counterparts This Agreement may be executed in counterparts, and each
shall be considered an original when the signature of each party has been obtained.
Section 13 Waiver No provision of this Agreement may be waived except as
documented or confirmed in writing and no such waiver may be used to materially impair the
force and effect of any substantive provision of this Agreement Any waiver at any time by a
party of its right with respect to a default under this Agreement, or with respect to any other
matter arising in connection therewith, shall not be deemed a waiver with respect to any
subsequent default or matter.
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IN WITNESS WHEREOF, the Participants have duly executed this Repayment Agreement on
the date first written above
City of Tacoma City of t
Department of Public Utilities
Water Division By: _ 5
evec
By:
Ti for �cTj ApprAA as totrofftin egality:
Approved as to form and legality:
Covington Water District Lakehav Utility Distr'
By. � By.
Title: Title.
Approved- as to form and ty Approved as to7f, m d legality:
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SCHEDULE A
Allocable Payments for Debt Service
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t '
SCHEDULE A Nov 8, 2002 trepyska
(1) (2)
Principal 2002 ISSUE (ONLY)
basis for
Year Kent &
Ending Covington Estimated Interest
Dec 1 Share Rate Amount Total
2003 $ 4,208,750 4,208,750
2004 4,208,750 4,208,750
2005 $ 500,000 2.75 % 4,208,750 4,708,750
2006 600,000 3.00 4,195,000 4,795,000
2007 850,000 3.25 4,177,000 5,027,000
2008 1,000,000 3.50 4,149,375 5,149,375
2009 675,000 4.00 4,114,375 4,789,375
2010 625,000 4.00 4,087,375 4,712,375
2011 600,000 4.25 4,062,375 4,662,375
2012 625,000 4.25 4,036,875 4,661,875
2013 675,000 4.50 4,010,313 4,685,313
2014 725,000 4.50 3,979,938 4,704,938
2015 825,000 4.75 3,947,313 4,772,313
2016 875,000 4.75 3,908,125 4,783,125
2017 1,000,000 5.00 3,866,563 4,866,563
2018 1,075,000 5.00 3,816,563 4,891,563
2019 2,075,000 5.00 3,762,813 5,837,813
2020 2,175,000 5.00 3,659,063 5,834,063
2021 2,300,000 5.25 3,550,313 5,850,313
2022 2,400,000 5.25 3,429,563 5,829,563
2023 2,550,000 5.25 3,303,563 5,853,563
2024 5,425,000 5.25 3,169,688 8,594,688
2025 5,700,000 5.25 2,884,875 8,584,875
2026 6,000,000 5.25 2,585,625 8,585,625
2027 6,325,000 5.25 2,270,625 8,595,625
2028 6,650,000 5.25 1,938,563 8,588,563
2029 7,000,000 5.25 1,589,438 8,589,438
2030 7,375,000 5.25 1,221,938 8,596,938
2031 7,750,000 5.25 834,750 8,584,750
2032 8,150,000 5.25 427,875 8,577,875
82,525,000 $ 99,606,125 182,131,125
SCHEDULE A 2002 BOND ISSUE
(Preliminary- Will be adjusted after sale of bonds)
CITY OF KENT 24.0324% Col (1) & (2)
Fixed Debt Service Responsibility
to be reduced by actual interest Less
Year earnings each year on Bond Reserve Estimated Total
Ending and Construction Fund. Interest Estimated
Dec 1 Principal Interest Total Earnings Payment
2003 $ $ 1,011,464 1,011,464 $ (244,890) 766,573
2004 1,011,464 1,011,464 (178,801) 832,663
2005 120,162 1,011,464 1,131,626 (130,736) 1,000,889
2006 144,194 1,008,159 1,152,354 (82,671) 1,069,682
2007 204,275 1,003,833 1,208,109 (82,671) 1,125,437
2008 240,324 997,194 1,237,518 (82,671) 1,154,847
2009 162,219 988,783 1,151,002 (82,671) 1,068,330
2010 150,203 982,294 1,132,497 (82,671) 1,049,825
2011 144,194 976,286 1,120,481 (82,671) 1,037,809
2012 150,203 970,158 1,120,360 (82,671) 1,037,689
2013 162,219 963,774 1,125,993 (82,671) 1,043,322
2014 174,235 956,474 1,130,709 (82,671) 1,048,038
2015 198,267 948,634 1,146,901 (82,671) 1,064,230
2016 210,284 939,216 1,149,500 (82,671) 1,066,828
2017 240,324 929,228 1,169,552 (82,671) 1,086,880
2018 258,348 917,212 1,175,560 (82,671) 1,092,888
2019 498,672 904,294 1,402,966 (92,671) 1,320,295
2020 522,705 879,361 1,402,065 (82,671) 1,319,394
2021 552,745 853,225 1,405,971 (82,671) 1,323,299
2022 576,778 824,206 1,400,984 (82,671) 1,318,312
2023 612,826 793,925 1,406,752 (82,671) 1,324,080
2024 1,303,758 761,752 2,065,510 (82,671) 1,982,838
2025 1,369,847 693,305 2,063,151 (82,671) 1,980,480
2026 1,441,944 621,388 2,063,332 (82,671) 1,980,660
2027 1,520,049 545,686 2,065,735 (82,671) 1,983 064
2028 1,598,155 465,883 2,064,038 (82,671) 1,981,366
2029 1,682,268 381,980 2,064,248 (82,671) 1,981,577
2030 1,772,390 293,661 2,066,050 (82,671) 1,983,379
2031 1,862,511 200,610 2,063,121 (82,671) 1,980,450
1958 641 102,829 2,061,469 (82,671) 1,978,798
$ 19,832,738 $ 23,937,742 43,770,480 $ (2,786,557) 40,983,924
SCHEDULE A 2002 BOND ISSUE
(Preliminary- Will be adjusted after sale of bonds)
COVINGTON UTILITY DISTRICT 23.1487% Col (1) & (2)
Fixed Debt Service Responsibility
to be reduced by actual interest Less
Year earnings each year on Bond Reserve Estimated Total
Ending and Construction Fund. Interest Estimated
Dec 1 Principal Interest Total Earnings Payment
2003 $ $ 974,271 974,271 $ (235,885) 738,386
2004 974,271 974,271 (172,226) 802,045
2005 115,744 974,271 1,090,014 (125,929) 964,085
2006 138,892 971,088 1,109,980 (79,632) 1,030,349
2007 196,764 966,921 1,163,685 (79,632) 1,084,054
2008 231,487 960,526 1,192,013 (79,632) 1,112,382
2009 156,254 952,424 1,108,678 (79,632) 1,029,047
2010 144,679 946,174 1,090,854 (79,632) 1,011,222
2011 138,892 940,387 1,079,279 (79,632) 999,648
2012 144,679 934,484 1,079,163 (79,632) 999,532
2013 156,254 928,335 1,084,589 (79,632) 1,004,957
2014 167,828 921,304 1,089,132 (79,632) 1,009,500
2015 190,977 913,752 1,104,728 (79,632) 1,025,097
2016 202,551 904,680 1,107,231 (79,632) 1,027,600
2017 231,487 895,059 1,126,546 (79632) 1,046,914
2018 248,849 883,485 1,132,333 (79,632) 1,052,702
2019 480,336 871,042 1,351,378 (79,632) 1,271,746
2020 503,484 847,025 1,350,510 (79,632) 1,270,878
2021 532,420 821,851 1,354,271 (79,632) 1,274,640
2022 555,569 793,899 1,349,468 (79,632) 1,269,836
2023 590,292 764,732 1,355,024 (79,632) 1,275,392
2024 1,255,817 733,741 1,989,558 (79,632) 1,909,927
2025 1,319,476 667,811 1,987,287 (79,632) 1,907,655
2026 1,388,922 598,539 1,987,461 (79,632) 1,907,829
2027 1,464,155 525,620 1989,775 (79,632) 1910,144
2028 1,539,389 448,752 1,988,141 (79,632) 1,908,509
2029 1,620,409 367,934 1,988,343 (79,632) 1,908,712
2030 1,707,217 282,863 1,990,079 (79,632) 1,910,448
2031 1,794,024 193,234 1,987,258 (79,632) 1,907,626
2032 1886 619 99,048 1985 667 (79,632) 1,906,035
$ 19,103,465 $ 23,057,523 42,160,988 (2,684,092) 39,476,896
SCHEDULE B
Notice Addresses
Tacoma's electronic wiring instructions are as follows.
Seafirst
Seattle Mam
ABA# 125000024
Cr: Tacoma City Treasurer
Account#67650200
Checks should be mailed to
Tacoma City Treasurer
Tacoma Municipal Building
747 Market Street, Room 250
Tacoma, WA 98402
Attn: Second Supply Project
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