HomeMy WebLinkAboutPW13-065 - Amendment - Regional Water Supply System Partners - Repayment Agreement to City of Tacoma for Second Supply Project - 01/01/2013 AMENDMENT TO AUGUST 24, 2010 REPAYMENT AGREEMENT
This Amendment amends the Repayment Agreement dated August 24, 2010 by and
among the City of Tacoma, Washington ("Tacoma"), the City of Kent, Washington ("Kent"),
Covington Water District ("Covington") and Lakehaven Utility District ("Lakehaven," and
collectively with Tacoma, Kent and Covington, the "Participants") relating to the Regional
Water Supply System Revenue Bonds, 2010 Series A and Series B (the "Bonds") issued by
Tacoma to finance the costs of Phase I of the Filtration Treatment Project (the "Project"). This
Amended Agreement is dated as of , 2013.
WHEREAS, pursuant to Section 8 of the Agreement for the Second Supply Project (the
"Project Agreement"), the Project Committee shall be responsible for, among other matters,
approving and revising Financing Plans. As provided in Section 11.3.1 of the Project
Agreement, Tacoma is required to submit a Financing Plan to the Project Committee, setting
forth the purpose, amount, repayment schedule and timing of a proposed issuance of bonds by
the Regional Water Supply System; and
WHEREAS, the Boards and Councils of the Participants adopted resolutions, ordinances
or action items approving the installation of a filtration treatment system for the Project and their
representatives on the Project Committee voted to approve the Filtration Treatment Project
Financing Plan. As part of the Financing Plan, the Participants agreed to enter into a Repayment
Agreement to elaborate on the payment sections in the Financing Plan and the Project
Agreement; and
WHEREAS,the Repayment Agreement was updated following the issuance of the Bonds
to include the amount, types of bonds issued, repayment schedule, and adding the obligation of
Kent and Covington related to the issuance of the 2010B Bonds as Build America Bonds to pay
interest based on the Bond's interest rate net of the 35% payment to be received from the federal
government and detailing Tacoma's rights with respect to Kent and Covington if such 35%
payment is received late from the federal govermment (the "Agreement"); and
WHEREAS, as set forth in the Agreement, Tacoma, Kent and Covington are responsible
for a portion of the debt service on the Bonds. Lakehaven used cash to pay its share of the costs
of the Project. Covington's share of the Bonds was $11,595,000, of which approximately
$10,570,000 was to finance the Project and the remainder for costs of issuing the Bonds and
funding a reserve for the Bonds; and
WHEREAS, Covington has received additional State Revolving Fund and Public Works
Trust Fund ("PWTF") loans for the Project and will contribute $7.47 million of loan proceeds to
finance a portion of its share of the Project; and
WHEREAS, in order to reduce the amount that Tacoma will need to borrow to pay its
future share of additional costs of the Project, Tacoma has agreed to use a portion of Covington's
share of unspent proceeds from the Bonds for Tacoma's share of the Project and, in return, pay a
portion of the principal of and interest on the Bonds that is currently the responsibility of
Covington; and
WHEREAS, this Agreement has been duly authorized by ordinance or resolution of each
of the Participants;
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NOW, THEREFORE, the Participants agree as follows:
Once Tacoma issues its Regional Water Supply System Revenue Refunding Bonds,
2013, Tacoma may draw $3 million on the State Revolving Loan that is shared by Covington and
Tacoma for the Project. In addition, Tacoma may submit reimbursement forms to Covington for
the remaining balance and Covington shall promptly submit the forms to Covington's State
Revolving Fund and PWTF loans for the Project. Tacoma shall use the amounts received under
this paragraph to finance the Project.
The amount that Covington shall pay Tacoma for its share of the principal of and interest
on the Bonds as shown on Schedule A to the Agreement is hereby amended. From and after the
date Tacoma receives the $7.47 million as provided in the prior paragraph, Covington shall pay
Tacoma for its share of the principal of and interest on the Bonds based on the formula set forth
in Schedule A-1. Tacoma, Covington and Dent would be responsible for paying their share of
debt service. When the final schedule is calculated based on the formula set forth in Schedule A-
1, the new schedule shall be attached to this Agreement as "Amended Schedule A." The
Amended Schedule A shall supersede Schedule A to the Agreement. Tacoma agrees to pay the
principal and interest on the Bonds that are no longer the obligations of Covington. Tacoma's
increased share will be shown on Amended Schedule A. Schedule A attached to the Agreement
includes debt service for the amount of the Bonds that was used to fund the Reserve Account for
the Bonds and each party is responsible for the share of debt service used to fund the Reserve
Account based on the same percentages as for debt service used to finance the Project. The
Amended Schedule A will similarly reflect that the portion representing debt service on the
amount used to fund the Reserve Account will reflect the revised percentages owed by Tacoma
and Covington for debt service.
The security for the Bonds included covenants that Tacoma, Covington and Kent would
be responsible for paying their specified share of debt service. Tacoma cannot amend those
security provisions without the consent of Bond owners. Covington, therefore, acknowledges
that in the event that Tacoma does not pay its increased share of the principal of and interest on
the Bonds on or prior to an interest or principal payment date, as shown on Amended
Schedule A, Covington will remain obligated to Bond owners to pay such share. If Covington
makes a payment in excess of its obligation shown on Amended Schedule A, Covington may
request in writing that Tacoma reimburse Covington for such payment or ask that Tacoma apply
such excess funds to a future payment. If Covington requests a reimbursement, Tacoma shall
pay Covington the reimbursement within 30 days after receipt of such written request.
Covington may charge Tacoma interest (based on the rate equal to the current earnings rate on
the City's investment pool) from the 3I't day after Tacoma received the written reimbursement
request to the date the reimbursement payment is received by Covington, plus any reasonable
costs incurred by Covington in pursuing reimbursement.
Section 2(b) of the 2010 Repayment Agreement governs federal subsidy payments for the
2010 Bonds that are received late. In light of recent announcements that federal sequestration
could reduce all BABs payments made by the federal government to all municipal issuers,
Section 2(b) is hereby expanded to provide as follows: If, as a result of sequestration, the federal
government does not send Tacoma all or any part of the federal subsidy for interest on the Bonds
on or prior to an interest payment date, Covington and Kent shall each be responsible for the
additional interest on their share of the portion of the interest on the Bonds equal to the federal
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51266778 15
subsidy interest payment not received based on the Schedule attached hereto as Schedule A-2.
Tacoma shall promptly notify Covington and Kent that the federal subsidy payment was not
received in whole or in part and Covington and Kent's share of the payment not received. Upon
receipt of said notification from Tacoma, Covington and Kent shall promptly (within 30 days)
make additional payment to Tacoma in an amount equal to their share of the federal subsidy
amount not received. If Tacoma receives the federal subsidy payment after Covington and/or
Kent have made an increased interest payment to replace their respective shares of this federal
subsidy payment, Tacoma shall promptly (within 30 days after receipt of the federal subsidy
payment) reimburse Covington and Kent for the increased interest payment Section 2(b) of the
.2010 Repayment Agreement allows Tacoma to charge Covington and Kent interest for late
payments. Covington and Kent may charge Tacoma interest (based on the rate equal to the
current earnings rate on the City's investment pool) from the 316Y day after Tacoma received the
increased interest payment to the date the reimbursement payment is received by Covington or
Kent respectively, plus any reasonable costs incurred by Covington or Kent in pursuing
reimbursement. Tacoma (or its agent) shall provide to Covington and Kent copies of all 8038-
CP forms submitted to the IRS at the time of, or promptly following, each submittal.
The Bond proceeds were used to fund the Project, pay costs of issuing the Bonds and
make a deposit to the Reserve Account. To the extent that the Bond proceeds in the Reserve
Account are not required to remain in the Reserve Account under the terms of the ordinances
authorizing outstanding RWSS Bonds, Tacoma shall deposit the excess amount in the Reserve
Account into the debt service fund and use the funds to pay debt service on the Bonds. Tacoma,
Kent and Covington shall be credited for such debt service payment from the excess Reserve
Account money in the same percentages shown on Amended Schedule A.
Except as provided in this Amended Agreement, all other provisions of the Repayment
Agreement and Financing Plan among the Participants for financing the Project shall remain in
effect.
This Agreement may be executed in counterparts, and each shall be considered an
original when the signature of each party has been obtained
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IN WITNESS WHEREOF, the Participants have duly executed this Amendment to
Repayment Agreement on the date first written above. 4
City of Tacoma City of Kent
Department of Public Utilities Water
Division
By: By: r/�%✓
Linda McCrea Su tte Cooke
Title: Water Superintendent T' le- yor
Approved as to form and legality: Approved as to form and legality:
By. By; e u.
Bill Fosbre Wom Brubaker
Title: Attorney Title: Attorney
Covington Water District Lakehaven Utility District
By: By:
Gwenn Maxfield
Title: General Manager Title: President of the Board of
Commissioners
Approved as to form and legality: Approved as to form and legality:
By: By:
Eric Frimodt Steve Pritchett
Title: Attorney Title: Attorney
4
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AMENDED SCHEDULE A
[To be added on Effective Date]
51266778 15
SCHEDULE A-1
On the effective date of this Agreement, A. Dashen & Associates and SDM Advisors as
financial advisor to RWSS (or such other party as mutually agreed to), shall provide to both
parties their best estimate of the yields that the RWSS Bonds would receive based on market
conditions for that date and the maturity dates for the portion of Bonds being transferred.
If such estimated yields are higher than the corresponding yields on the Bonds taking into
account costs of issuance, then Covington's share of the debt service on the Bonds will be
reduced by the debt service on the $7.47 million transferred to Tacoma plus debt service on the
related costs of issuance and reserve account.
If such estimated yields are lower than the corresponding yields on the Bonds taking into
account costs of issuance, then Tacoma will receive a discount on the debt service paid, with the
discount established to compensate for the estimated lower yield.
In no case shall the resulting debt service to Tacoma from this transfer be higher than if
Tacoma had not entered into this Agreement and issued the bonds with corresponding maturity
dates on the effective date of this Agreement.
An example of the calculation is on the following page:
S1266778 15
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51266779 15
Aug 9,2010 6 19 pm Prepared by Cdigruup Global Markets[nc Page 8 j
BOND DEBT SERVICE
City of Tacoma,Washington
2010 Series B(Kent)
Period
Ending Principal Coupon Itdetesl Debt Semce
12/01/2011 549.217 59 549,217 59
12MI/2012 432,64406 432,64406
12/01/2013 432,64406 432,64406
12101/2014 432,64406 432,64406
12101/2015 432,64406 432,64406
12IOI/2016 432,644 D6 432,64405
12101/2017 432,64406 432,64406
12101/2018 432.64406 432,64406
1V01/2019 432,64406 432,64406
l2/012020 432.64406 432,64406
12101/2021 432,644 D6 432,64406
IDOI/2022 432,64406 432,64406
12/01/2023 432,64406 432,64406
12101/2024 432,64406 432,64406
121OI/2025 370,000 5371% 432,64406 802,64406
12/012026 385,000 5371% 412.77136 797,77136
121012D27 40D,000 5 371% 392,093 00 792,093 00
12/012028 41D,000 5371% 370,60900 780,60900
12/012029 425,000 5371% 348,59790 773,58790
121012030 440,000 5 371% 325,761 16 765 761 16
12/01/2031 455,000 5 62 1% 302,12876 75712876
12/012032 470,000 5 621% 276 553 20 746 55320
12/O12033 490,00 5621% 25D,13450 740,13450
12/01/2034 505,00 5621% 222,59160 727,59160
12/012035 525 ODO 5621% 194,205 56 719,205 56
12/012036 545,00 5621% 164,69530 709,69530
12/012037 565,00 562t% 134,06096 699,06086
12MI12038 585,ODO 5621% 102,30220 697,30220
I2/012D39 605,OD0 5621% 69,41936 674,41936
121012D40 630,OD0 5621% 35,4L230 665,41230
7,805,OD0 10,207.560 49 18,012,560 49
51266778 15
Aug 9,2010 619 pm Prepared by Crbgruup Global Markets Inc Page 12
NEFDEBTSERVICE
City of Tacoma,Washmgtrm
2010 Sews B(Kent)
Penod Total 35%Fe&M
Endmg Debt Service BAB3 Sahs/dy
12/012010
12/012011 549,21759 -152,22616
12/01/2012 432,64406 -151,42542
12I012013 432,64406 451,42542
121012014 432,64406 -151,42542 °
12/012015 432,64406 -151,42542
12/012016 432,64406 -15142542
121032017 432,64406 -151,42542
1210M2018 432,64406 -151,42542
12ID112019 432,64406 -151,42542
121D12020 432,64406 -151,42542
12/012021 432,644 06 -151,425 42
12/D12022 432,64406 -151,42542
122012023 432,644 06 -151,425 42 ,
12/01/2024 432,64406 -151,42542
12/012C25 802,644 06 -151,425 42
12/012026 797,771 36 -144,469 98
121012027 792,093 00 -137,232 56
12/012028 780609 OD -129,71316 j
12/012029 773,587 90 -122,005 76
12/012030 763,761 16 -114,016 40
12012031 757,128 76 -105,745 06
I2/012032 746,55320 -96,793 62
12/01CO33 740,13450 -87,54708
12/012034 727,591 60 -77.907 06
12/012035 719,205 56 -67,97194
12/012036 709,695 30 -57,643 36
12/012037 699,06086 46.92130
12/012038 687,3C220 -35,80578
12/012039 674,41936 -24,29678
12/012040 665,412 30 -12,194 30
18,012,56049 -3,572,64618
1
51266778 15
Aug 9,2010 6 19 pm Prepared by Cmgroup Global Markets Inc Page 9
BOND DEBT SERVICE
City ol-Tacoma,Washington
2010 Senes B(Covington)
Period
Ending Principal Coupon Interest Debt Service
12/01/2D 11 827,366 71 827,366 71 -I
12/012012 651,754 96 651,754 96 /
12/012013 651,754 96 651,754 96
12/012014 651,754 96 651,754 96 s
12/C12015 651,754 96 651,754 96
12/C 12016 651,75496 651,75496
12/012017 651,7)496 651,754 96
12/012018 651,754 96 651,754 96
12/012019 651,754 96 651,754 96
12/012020 65175496 651,75496
12/01/2021 651,75496 651,75496
12/012022 651,754 96 651,754 96
12/0 V2023 651,754 96 651,754 96
121012024 651,75496 651,73496
12/012025 651,75496 651,75496
12;012026 651,754 96 651,734 96
12/01,7027 651,75496 651,7>496
12/012029 651,754 96 651,754 96
12/012029 651.754 96 651,754 96
IM12030 651,75496 651,75496
12/012031 651,75496 651,75496
12/012032 651,75496 651,75496
12/01/2033 1,275,000 5621% 651,75496 1,926,75496
12/012034 1,320,000 5621% 580,09720 1,900,0872D
12/O1/2035 1,370,000 5621% 505,89000 1,875,99000 5
12/012036 1,420,D00 5621% 428,88230 1,848,88230
12/C12037 1,470,DCO 5621% 349,06410 1,819,06410
12/01/2038 1,525 000 5 621% 266,435 40 1,791,435 40
12/012039 1,580,DOO 5621% 180,71516 1,760,71516
12/012040 1,635,000 5621% 91,90336 1,726,90336
11,595,000 17,568,953 35 29,163,953 35
51266779 15
a
Aug9,2010 6 19 pm Prepared by Qbgmup Global Markets Lc Page 13
NETDEBTSERVICE
City ofTacom0.Wazhmglon �
2010 Serves B(Co,1o&n)
Puiod Tohil 35%Federal
Siding Debt Service BABs Subsidy
12/01/2010
11/012011 827,36671 -289,57835
12/012012 651,75496 -228,11424
12/01/2013 651,75496 -228,11424
12/01/2014 651,75496 -229,11424
12/DI2015 651,75496 -228,11424
12/01/2016 651,754 96 -228,114 24
12/012017 651,754 96 -228,114 24
12/012018 651,754 96 -228,114 24
12/01/2019 651,754M -22811424
12/012020 651,754 96 -228 114.24
12/0/2021 651,75496 -228,11424 a
12/012D22 651,75496 -22S,11424
12/C12023 651,75496 -228,11424
12/C12024 651,75496 -228,11424
12/C12025 651,75496 -228,11424
12/012026 651,75496 -228,11424
12/012027 651,75496 -22811424
12/01/2028 65L,75496 -2.29,11424
12/012029 651,75496 -229,11424
12/012030 651,75496 -228,11424
12/0112031 651,75496 -228,11424
12/012032 651,754 96 -228,114 24
12/0112033 1926,75496 -228,11424
12/012034 1.90009720 -203,03052 ,
12/012035 1,875,890 00 177,061 50
12/012036 1,948,882 30 -150,108 80
12/01/2037 1,819,06410 -122,17244
12/012038 1,791,43540 -93,25240
12/01/2039 1,760,71516 -63,25030
12/012040 1,72690336 -32,16618
29,163,95335 -6,149,13377
3126677815