Drafter

Clerk 03/30/2018

title

A MOTION approving the issuance and sale of the county's Sewer Revenue Bond, 2018 (WIFIA- N17107WA), in the principal amount of not to exceed $134,500,000, authorizing the execution and delivery of a term sheet and loan agreement in connection therewith and establishing certain terms of the bond, all in accordance with Ordinance 18588.

body

                     WHEREAS, pursuant to Ordinance 18588, adopted on October 23, 2017 ("the Ordinance"), the county authorized the issuance of its sewer revenue bonds and limited tax general obligation bonds (payable from sewer revenues), in the aggregate principal amount of $500,000,000, to pay costs of capital improvements to the System, in accordance with the Comprehensive Plan and the Capital Improvement Budget (each as defined in the Ordinance), and

                     WHEREAS, the Ordinance provides that such bonds may be publicly sold in one or more series, as Parity Bonds or Parity Lien Obligations, as Tax-Exempt Bonds or otherwise, and by negotiated sale or by competitive bid, as determined by the Finance Director in consultation with the county's financial advisor, and

                     WHEREAS, the Finance Director has determined that a series of Bonds authorized pursuant to the Ordinance, designated as the county's Sewer Revenue Bond, 2018 (WIFIA - N17107WA), in the aggregate principal amount of not to exceed $134,500,000, be sold as provided in this motion, and

                     WHEREAS, it is in the best interest of the county and the ratepayers of the System that the WIFIA Bond (defined herein) be sold to the United States Environmental Protection Agency, an agency of the United States of America, acting by and through the Administrator of the Environmental Protection Agency ("the WIFIA Lender"), on the terms set forth in the Ordinance, this motion, the WIFIA Loan Term Sheet and the WIFIA Loan Agreement (each as defined herein);

                     NOW, THEREFORE, BE IT MOVED by the Council of King County:

                     A.                     Definitions.  Capitalized words that are used in this motion but not defined in this motion have the meanings set forth in the Ordinance for all purposes of this motion, unless some other meaning is plainly intended.  The words and terms defined in this motion, as used in this motion, have the meanings assigned such terms in this motion, for all purposes of this motion, unless some other meaning is plainly intended.

                     B.                     Authorization of WIFIA Bond.  The issuance of the county's Sewer Revenue Bond, 2018 (WIFIA - N17107WA) ("the WIFIA Bond"), in the principal amount of not to exceed $134,500,000, as a Parity Bond under the Ordinance, to pay costs of capital improvements to the System, in accordance with the Comprehensive Plan and the Capital Improvement Budget, is hereby authorized and approved.

                     C.                     WIFIA Loan Term Sheet and WIFIA Loan Agreement.  The Finance Director is authorized, on behalf of the county, to execute and deliver to the WIFIA Lender the WIFIA Loan Term Sheet, in the form attached to this motion as Attachment A, with such changes thereto, if any, as may be approved by the Finance Director in consultation with appropriate county officials and advisors ("the WIFIA Loan Term Sheet"), and the signature of the Finance Director on the WIFIA Loan Term Sheet shall conclusively evidence the county’s approval of the WIFIA Loan Term Sheet.  The Finance Director is further authorized, on behalf of the county, to execute and deliver to the WIFIA Lender the WIFIA Loan Agreement, in the form attached to this motion as Attachment B, with such changes thereto, if any, as may be approved by the Finance Director in consultation with appropriate county officials and advisors ("the WIFIA Loan Agreement"), and the signature of the Finance Director on the WIFIA Loan Agreement shall conclusively evidence the county’s approval of the WIFIA Loan Agreement.  As so executed and delivered, the WIFIA Loan Agreement shall be a "bond purchase contract" for purposes of the Ordinance.

                     D.                     Details of WIFIA Bond.  The WIFIA Bond shall be dated its date of issue and delivery and shall be in the form attached as Exhibit A to the WIFIA Loan Agreement.  The terms of the WIFIA Bond established in the WIFIA Loan Agreement, including the year and series designation, date, principal amount, interest payment dates, interest rates, maturity schedule, prepayment provisions and other terms of the WIFIA Bond, are ratified and confirmed, provided that interest rate on the WIFIA Bond is not greater than the yield on United States Treasury securities of comparable maturity on the Effective Date of the WIFIA Loan Agreement, as determined pursuant to 40 C.F.R. § 35.10010(g), plus five basis points (0.05%).  The WIFIA Bond initially shall be registered in the name of the WIFIA Lender.  Principal of and interest on the WIFIA Bond shall be payable to the WIFIA Lender or the Registered Owner, as applicable, in the manner, on the payment dates, and in the amounts and at the rates, all as provided in the WIFIA Loan Agreement.  Interest on the WIFIA Bond is taxable.  The WIFIA Bond shall be subject to prepayment as provided in the WIFIA Loan Agreement.  The Finance Director or his or her designee shall be the Registrar for the WIFIA Bond for the purposes of registering and authenticating the WIFIA Bond, maintaining the Bond Register with respect to the WIFIA Bond, effecting the transfer of ownership of the WIFIA Bond and paying principal of and interest on the WIFIA Bond.

                     E.                     Satisfaction of Parity Conditions.  In accordance with the Ordinance and the provisions of the ordinances authorizing the issuance of the outstanding Parity Bonds, which permit the issuance of Future Parity Bonds upon compliance with the conditions set forth therein, the county council hereby finds and determines, as follows:

                                          1.                     There is not now, and when the WIFIA Bond is issued there will not then be, any deficiency in the Parity Bond Fund or any account therein.

                                          2.                     The Ordinance provides for payment of the principal of and interest on the WIFIA Bond out of the Parity Bond Fund.

                                          3.                     The amount that will be on deposit in the Parity Bond Reserve Account at the Closing of the WIFIA Bond, assuming that all draws permitted under the WIFIA Loan Agreement are made at the Closing of the WIFIA Bond, will satisfy the Reserve Requirement.

                                          4.                     The county will have on file at the Closing of the WIFIA Bond a certificate of the Finance Director demonstrating that, during any 12 consecutive calendar months out of the immediately preceding 18 calendar months, Net Revenue was at least equal to 1.25 times the amount required to pay, in each year that the WIFIA Bond will be outstanding, the Annual Parity Debt Service for such year, assuming that all draws permitted under the WIFIA Loan Agreement are made at the Closing of the WIFIA Bond.

                                          5.                     The Finance Director will provide to the registered owner of the county's Junior Lien Variable Rate Demand Sewer Revenue Bond, Series 2012, a certificate showing that Net Revenue in any 12 consecutive months out of the most recent 18 months preceding the issuance of the WIFIA Bond, based on financial statements of the System prepared by the county, is at least equal to 1.0 times the Annual Debt Service for the WIFIA Bond and all then outstanding obligations of the System secured by a lien on Revenue of the System, in each year during the life of the WIFIA Bond, assuming that all draws permitted under the WIFIA Loan Agreement are made at the Closing of the WIFIA Bond.

                     The applicable conditions for Future Parity Bonds having been complied with in connection with the issuance of the WIFIA Bond, the pledge contained in the Ordinance of Revenue of the System to pay and secure the payment of the WIFIA Bond will constitute a lien and charge on Revenue of the System equal in rank with the lien and charge on the Revenue of the System to pay and secure the payment of the outstanding Parity Bonds.

                     F.                     No Defeasance.  Notwithstanding any provision of Section 33 of the Ordinance to the contrary, the WIFIA Bond may not be defeased, and no amounts in respect of the WIFIA Bond shall be considered or deemed to have been paid until the WIFIA Lender has received irrevocable payment in immediately available funds in accordance with the requirements for payment set forth in the WIFIA Loan Agreement.

                     G.                     Designation as Refunding Candidate.  The WIFIA Bond is hereby designated as a "Refunding Candidate" for purposes of ordinances of the county authorizing the issuance of bonds to refund outstanding obligations of the county payable from Revenue of the System.

                     H.                     Further Authority.  The county officials and their agents, attorneys and representatives are hereby authorized and directed to do everything necessary for the sale, issuance, execution and delivery of the WIFIA Bond and for the proper use and application of the proceeds of the WIFIA Bond, all in accordance with the provisions of the Ordinance, this motion and the WIFIA Loan Agreement.

                     I.                     Severability.  If any provision in this motion is declared by any court of competent jurisdiction to be contrary to law, then that provision shall be null and void and shall be deemed separable from the remaining provisions of this motion and shall in

no way affect the validity of the other provisions of this motion or of the WIFIA Loan Agreement or the WIFIA Bond.