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HomeMy WebLinkAbout2438WIM CITY OF KENT, WASHINGTON ORDINANCE NO. F AN ORDINANCE of the City of Kent, Washington, providing for the defeasance or release by anticipa- tory marshaling of the claim or lien of all of the City's outstanding $34,000 par value of "Sewer Revenue Bonds, 1964, Series A," $435,000 par value of "Sewer Revenue Bonds, 1966," and $635,000 par value of "Sewer Revenue Bonds, 1968;" authorizing the transfer of money and investments and investing or reinvesting the same to accomplish the defeasance; and authorizing the execution of an agreement with Rainier National Bank of Seattle, Washington, as Trustee. WHEREAS, the City presently has outstanding $34,000 par value of "Sewer Revenue Bonds, 1964, Series A," dated November 1, 1964, with principal installments coming due on October 1, 1984, and October 1, 1985 (hereinafter called the 01964 Bonds"); and WHEREAS, the City presently has outstanding $435,000 par value of "Sewer Revenue Bonds, 1966," dated May 1, 1966, with principal installments coming due on October 1 of each year from 1990 to 1996, inclusive (hereinafter called the "1966 Bonds"); and WHEREAS, the City presently has outstanding $635,000 par value of "Sewer Revenue Bonds, 1968," dated October 1, 1968, with principal installments coming due on October 1 of each year from 1984 to 1989, inclusive, and 1997 to 1998, inclusive (here- inafter called the "1968 Bonds"); and WHEREAS, there is presently deposited in the sewer revenue bond funds for the above -referenced bonds money in excess of $1,000,000; and WHEREAS, the City Council has determined that it is in the best interests of the City and the ratepayers of its system of sewerage to effect a defeasance or release by anticipatory marshaling of the claim or lien of the entire outstanding 1964 Bonds, 1966 Bonds and 1968 Bonds upon the gross revenues of the system of sewerage of the City; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF KENT, WASHINGTON, DO ORDAIN as follows: Section 1. Provisions for Defeasance. There is created in the office of the City Treasurer a special fund to be named the Sewer Revenue Bond Defeasance Account, 1983 (hereinafter called the "Defeasance Account"), into which shall be made the deposits and out of which shall be made the payments provided in this ordinance. The claim or lien of the bondholders of the presently outstanding 1964 Bonds, 1966 Bonds and 1968 Bonds (collectively the "Outstanding Bonds") on the gross revenues of the system of sewerage of the City shall be defeased as provided in this ordinance. To accomplish the defeasance by anticipatory marshaling of the claim or lien of the Outstanding Bonds by irrevocably providing for the payment, from cash and the "Acquired Obligations" (hereinafter described), of principal and interest on the Outstanding Bonds as they shall become due until April 1, 1996, and to redeem and pay on April 1, 1996, the remaining $70,000 principal amount of 1966 Bonds and $155,000 principal amount of 1968 Bonds, the City agrees to and shall deposit irrevocably and maintain with Rainier National Bank of Seattle, Washington (the "Trustee"), in trust for the secur- ity and benefit of the holders and owners of the Outstanding Bonds in the Defeasance Account the sum of $1,495.14 in cash and certain obligations of of the United States of America specified in Schedule A. attached hereto and by this reference made a part hereof (hereinafter called the "Acquired Obligations"), to be acquired by the Trustee from Foster & Marshall/American Express Inc. Such cash and Acquired Obligations, together with the investment income therefrom, are deposited irrevocably in trust as aforesaid to provide for the payments as herein provided. - 2 - Section 2. Date of Defeasance; Disposition of Assessments and Balance in Defeasance Account. On or after November L, 1983, upon the confirmation by the Trustee of the deposit in the Defeasance Account of the cash and Acquired Obligations speci- fied in Section 1 (which time of such confirmation shall be deemed the "date of defeasance"), the City Treasurer shall transfer the balance of the money (in cash or investments) in the respective sewer revenue bond funds for the Outstanding Bonds to the appropriate account of the City to be used to pay the costs of the defeasance and, thereafter, shall deposit any remaining money into the Sewer Revenue Fund of the City to be used solely for any City legal purposes. Section 3. Investment of Cash Deposit. Until needed for payments of principal and interest installments of the Outstand- ing Bonds as provided in Section 4, the Trustee shall invest the $1,495.14 original cash deposit and any other money available in the Defeasance Account in any legal investment permitted to the City. Section 4. Disbursements by Trustee. The Trustee shall present for payment on the respective due dates thereof all Acquired Obligations deposited with it hereunder, and all investments and reinvestments thereof, including the investments of the cash deposited with its approval in Section 3 hereof, and shall apply the proceeds derived therefrom for the payment of the principal of and interest on the Outstanding Bonds coming due through and including April 1, 1996, and the payment of the 1966 Bonds maturing on October 1, 1996 and the 1968 Bonds maturing on October 1, 1997, and October 1, 1998, being called for prior redemption on April 1. 1996. Funds in trust hereunder in excess of those required for the purpose of the trust herein created may, from time to time, at the option of the City, be held in the Defeasance Account as cash or reinvested in any - 3 - legal investment permitted by law for the City, in any combina- tion, or remitted as surplus to the City's Sewer Revenue Fund, as the case may be, but under no circumstances shall funds and investments on hand in the trust in the Defeasance Account be reduced at any time to cash or direct or indirect obligations of the United States which, together with the interest to be received therefrom, shall be less than sufficient to pay timely the principal of and interest on the Outstanding Bonds as pro- vided in this paragraph and thereby effect a full defeasance by anticipatory marshaling of the claim or lien of all Outstanding Bonds on the gross revenue of the system of sewerage of the City as of the date of the defeasance. Section 5. Custody and Safekeeping of Trust Funds and Investments. All funds deposited in the Defeasance Account or received by the Trustee as maturing principal of or interest on investments in that fund shall be held by the Trustee subject to the terms and conditions of the trust herein created. The Trustee shall preserve and keep safe the rest of the trust herein created, subject only to required and permitted releases as provided in Section 4. Section 6. Bond Call. 1966 Bonds numbered 74 to 87, inclusive, maturing October 1, 1996, and 1968 Bonds numbered 270 to 284, inclusive, maturing October 1. 1997, and 1968 Bonds numbered 285 to 360, inclusive, maturing October 1, 1998, are irrevocably called for prior redemption on April 1, 1996. The Trustee, on behalf of the City Treasurer, is authorized and directed to publish and give notice of such bond call at the time and in the manner required by Ordinances Nos. 1338 and 1534. Section 7. Defeasance Trust Agreement. The proper officers and agents of the City are directed to enter into a Defeasance Trust Agreement with the Trustee setting forth the duties, obligations and responsibilites of the Trustee in r - 4 - 00 .0 connection with the redemption and retirement of the Outstanding Bonds as provided herein and stating that such provisions and payment of fees, compensation and expenses of such Trustee are satisfactory to it. In order to carry out the purposes of this ordinance, the Mayor and City Clerk of the City are authorized and directed to execute a Defeasance Trust Agreement and deliver it to the Trustee. PASSED by the City Council and APPROVED by the Mayor of the City of Kent, Washington, this 6 day of 1983, at a regular open public meeting. K Z- 41 Mayo ATTEST City erk APPROVED AS TO FORM: City ttorney 0570k - 5 - SCHEDULE A ACQUIRED OBLIGATIONS Security Interest Maturity Description Amount Rate Date Treasury Note $ 41,000 12.125% 9/30/84 9/30/85 Treasury Note 41,000 48,000 15.875 12.250 9/30/86 Treasury Treasury Note Note 48,000 13.750 8/15/87 Treasury Note 50,000 10.500 8/15/88 7/15/89 Treasury Note 92,000 32,000 14.500 10.750 8/15/90 Treasury Treasury Note Note 34,000 14.875 8/15/91 Treasury Bond 42,000 7.250 8.625 8/15/92 8/15/93 Treasury Bond Bond 42,000 48,000 8.750 8/15/94 Treasury Treasury Bond 53,000 10.375 5/15/95 Treasury Bond 220,000 11.500 11/15/95