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Legislation #: 010579 Introduction Date: 4/12/2001
Type: Ordinance Effective Date: 5/6/2001
Sponsor: None
Title: Amending various ordinances authorizing certain outstanding State Revolving Fund Program Bonds of the City to provide for the credit of net interest savings from the refunding of certain bonds by the State; and authorizing payment of arbitrage rebate if required in connection with the bonds.

Legislation History
DateMinutesDescription
4/12/2001

Prepare to Introduce

4/12/2001

Referred Finance and Audit Committee

4/18/2001

Hold On Agenda

4/25/2001

Advance and Do Pass as a Committee Substitute

4/26/2001

Passed as Substituted


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COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 010579

 

Amending various ordinances authorizing certain outstanding State Revolving Fund Program Bonds of the City to provide for the credit of net interest savings from the refunding of certain bonds by the State; and authorizing payment of arbitrage rebate if required in connection with the bonds.

 

WHEREAS, the City of Kansas City, Missouri (the City), is a constitutional charter city, organized and existing under the constitution and laws of the State of Missouri; and

 

WHEREAS, the City now owns and operates a revenue producing sewerage system, consisting of sanitary sewers, storm water sewers and combined sewers, serving the City, its inhabitants and others within its service area, including connected and related appurtenances and facilities and extensions, improvements, additions and enlargements made or acquired by the City after the date of this Ordinance (the Combined System); and

 

WHEREAS, the City has made extensions and improvements to the sanitary sewer portion of the Combined System (the Sanitary Sewer System; and

 

WHEREAS, the City is authorized under the provisions of Chapter 250 of the Revised Statutes of Missouri (the Act), to issue and sell revenue bonds for the purpose of paying all or part of the cost of extending and improving the Sanitary Sewer System serving the City and its inhabitants; and

 

WHEREAS, in order to provide for the most cost effective financing of certain extensions and improvements to the Sanitary Sewer System the City has participated in the Missouri Leveraged State Water Pollution Control Revolving Fund Program (the SRF Program) of the Department of Natural Resources (DNR) and the State Environmental Improvement and Energy Resources Authority (the Authority) pursuant to the Act by the issuance of the Citys:

 

(i) General Obligation Bonds (State Revolving Fund Program) Series 1992A, dated June 1, 1992, in the original principal amount of $2,115,000.00 (the Series 1992A Bonds), authorized by Committee Substitute for Ordinance No. 920635 passed on June 4, 1992, Ordinance No. 920680 passed on June 11, 1992, and Ordinance No. 920762 passed on July 9, 1992 (collectively, the Series 1992A Bond Ordinance);

 

(ii) Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1992B, dated June 1, 1992, in the original principal amount of $1,265,000.00 (the Series 1992B Bonds), authorized by Committee Substitute for Ordinance No. 920636 passed on June 4, 1992 and Ordinance No. 920681 passed on June 11, 1992 (collectively, the Series 1992B Bond Ordinance);

 

(iii) Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1995A, dated April 1, 1995, in the original principal amount of $18,000,000.00 (the Series 1995A Bonds), authorized by Committee Substitute for Ordinance No. 950353 passed on April 13, 1995 and Ordinance No. 950516 passed on April 20, 1995 (collectively, the Series 1995A Bond Ordinance);

 


(iv) Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1996A, dated April 1, 1996, in the original principal amount of $24,000,000.00 (the Series 1996A Bonds), authorized by Committee Substitute for Ordinance No. 960253 passed on March 28, 1996 and Ordinance No. 960440 passed on April 18, 1996 (the Series 1996A Bond Ordinance); and

 

(v) the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1997A, dated April 24, 1997, in the original principal amount of $22,235,000.00 (the Series 1997A Bonds), authorized by Ordinance No. 970285 passed on March 27, 1997 and Ordinance No. 970478 passed on April 10, 1997 (the Series 1997A Bond Ordinance); and

 

WHEREAS, pursuant to the SRF Program the Authority has purchased:

 

(i) the Series 1992A Bonds with a portion of the proceeds of the Authoritys $48,295,000.00 aggregate principal amount of Water Pollution Control Revenue Bonds (State Revolving Fund Program _ Multiple Participant Series) Series 1992A (the Series 1992A Authority Bonds), issued pursuant to the Bond Indenture dated as of June 1, 1992, as amended (the Series 1992A Indenture), by and between the Authority and State Street Bank and Trust Company of Missouri, N.A., as successor trustee (the Series 1992A Trustee),

 

(ii) the Series 1995A Bonds with the proceeds of the Authoritys $18,000,000.00 aggregate principal amount of Water Pollution Control Revenue Bonds (State Revolving Fund Program _ City of Kansas City Project) Series 1995B (the Series 1995B Authority Bonds), issued pursuant to the Bond Indenture dated as of April 1, 1995, as amended (the Series 1995B Indenture), by and between the Authority and State Street Bank and Trust Company of Missouri, N.A., as successor trustee (the Series 1995B Trustee);

 

(iii) the Series 1996A Bonds with the proceeds of the Authoritys $24,000,000.00 aggregate principal amount of Water Pollution Control Revenue Bonds (State Revolving Fund Program _ City of Kansas City Project) Series 1996A (the Series 1996A Authority Bonds), issued pursuant to the Bond Indenture dated as of April 1, 1996, as amended (the Series 1996A Indenture), by and between the Authority and State Street Bank and Trust Company of Missouri, N.A., as successor trustee (the Series 1996A Trustee); and

 

(iv) the Series 1997A Bonds with the proceeds of the Authoritys $23,235,000.00 aggregate principal amount of Water Pollution Control Revenue Bonds (State Revolving Fund Program _ City of Kansas City Project) Series 1997B (the Series 1997B Authority Bonds), issued pursuant to the Bond Indenture dated as of April 1, 1997, as amended (the Series 1997B Indenture), by and between the Authority and State Street Bank and Trust Company of Missouri, N.A., as successor trustee (the Series 1997B Trustee); and

WHEREAS, the Council finds and determines that it is in the best interests of the City to obtain the benefit of the net interest savings relating to the refunding of certain Series 1992A Authority Bonds, Series 1995B Authority Bonds, Series 1996A Authority Bonds and Series 1997B Authority Bonds and to amend the Series 1992A Bond Ordinance, the Series 1992B Bond Ordinance, the Series 1995A Bond Ordinance, the Series 1996A Ordinance and the Series 1997A Bond Ordinance in order to provide for the credit of net interest savings resulting from the refunding of the Series 1992A Authority Bonds, Series 1995B Authority Bonds, Series 1996A Authority Bonds and Series 1997B Authority Bonds to the payments on the Series 1992A Bonds, the Series 1992B Bonds, the Series 1995A Bonds, the Series 1996A Bonds and the Series 1997A Bonds, to further amend the Series 1992A Bond Ordinance, the Series 1992B Bond Ordinance, the Series 1995A Bond Ordinance, the Series 1996A Ordinance and the Series 1997A Bond Ordinance as requested by the Authority and DNR in connection with the issuance of the Authority Refunding Bonds (defined below), and to provide for certain other matters; NOW, THEREFORE,

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. Series 1992A Bond Ordinance Amendments. In consideration of the Citys receipt of the portion of the net savings resulting from the refunding of the Series 1992A Authority Bonds which are allocable to the City (as further described below) and in order to provide for the proper credit of investment earnings to be received by the City pursuant to the Citys participation in the SRF Program under the Series 1992A Bond Ordinance, the Series 1992A Bond Ordinance is amended as provided in this Section. Terms not otherwise defined in this Section have the meanings set forth in the Series 1992A Bond Ordinance.

 

Definitions. Committee Substitute for Ordinance No. 920635 is amended by enacting a new section, Section 101A, to read as follows:

 

Section 101A. Additional Definitions of Words and Terms. In addition to the words and terms defined in Section 101 and elsewhere in this Ordinance, the following capitalized words and terms as used in this Ordinance shall have the following meanings:

 

Authority Refunding Bonds means the Water Pollution Control Revenue Refunding Bonds (State Revolving Fund Program - Master Trust) Series 2001B of the Authority.

 

Authority Refunding Bonds Trustee means the bond trustee with respect to the Authority Refunding Bonds, and its successors and assigns.

 

Section 2. Committee Substitute for Ordinance No. 920635 is amended by enacting a new section, Section 101B, to read as follows:

 

Section 101B. Optional Redemption. The Director of Finance is authorized and directed to provide written instructions to the Trustee directing the optional redemption of the Series 1992A Authority Bonds allocable to the Series 1992A Bonds which are being refunded by the Authority (the Series 1992A Refunded Authority Bonds (KC Series 1992A)). The initial schedule of the Series 1992A Refunded Authority Bonds (KC Series 1992A) is set forth in Schedule 1. The Director of Finance is authorized to approve a final schedule of Series 1992A Refunded Authority Bonds (KC Series 1992A) and authorize the Authority to redeem the Series 1992A Refunded Authority Bonds (KC Series 1992A) on the redemption date for the Series 1992A Refunded Authority Bonds as designated by the Authority. The signature of the Director of Finance to a certificate to which the final schedule of Series 1992A Refunded Authority Bonds (KC Series 1992A) is attached will be conclusive evidence of approval of the final schedule.

 

Section 3. Committee Substitute for Ordinance No. 920635 is amended by repealing Section 302 and enacting in its place a new section to read as follows:

 

Section 302. Optional Redemption.

 

(a) Except as provided in paragraphs (b) and (c), Bonds maturing July 1, 2007 may be called for redemption and payment prior to maturity, at the option of the City, in whole or in part on each June 1 and December 1, commencing June 1, 2002, at the redemption prices set forth below (expressed as percentages of principal amount) plus accrued interest thereon to the date of redemption:

 

Redemption Redemption

Dates Prices

 

June 1, 2002 and December 1, 2002 102%

June 1, 2003 and December 1, 2003 101

June 1, 2004 and thereafter 100

 

Bonds to be redeemed pursuant to the optional redemption provisions shall be selected by lot on a proportionate basis from all outstanding maturities of the Bonds. Upon such redemption, the sinking fund installments described in Section 301 above shall be proportionately reduced, subject to rounding to integral multiples of $5,000, or with the prior written consent of the Bondowner, integral multiples of $1. In the event of the redemption of the Bonds in part, the City shall designate the amount of each maturity redeemed and of the reduction in each sinking fund installment in writing to the Trustee, subject to the foregoing requirements and verification thereof by the Trustee. In exercising its option to redeem the Bonds pursuant to this provision, the City shall deposit with the Bondowner, in addition to the principal of, premium, if any, as calculated above and interest on the Bonds, an additional premium equal to interest that would otherwise have accrued on the Bonds for an additional 30-day period.

 

(b) The City irrevocably and unconditionally waives its right to optionally redeem Bonds maturing or subject to mandatory sinking fund redemption on the dates and in the principal amounts corresponding to the Series 1992A Refunded Authority Bonds (the Series 1992A Non-refundable Bonds (KC Series 1992A)). The initial schedule of the Series 1992A Non-refundable Bonds is set forth in Schedule 2. The Director of Finance is authorized to approve a final schedule of Series 1992A Non-refundable Bonds (KC Series 1992A). The signature of the Director of Finance to a certificate to which the final schedule of Series 1992A Non-refundable Bonds (KC Series 1992A) is attached will be conclusive evidence of approval of the final schedule.

 

(c) The City will not exercise its right to optionally redeem any other Bonds without the prior written consent of the Authority, which consent is not to be unreasonably withheld and is conditioned upon a determination by the Authority that such redemption would not adversely affect the timely payment of the principal of and interest on the portion of the Authority Refunding Bonds allocable to the Series 1992A Refunded Authority Bonds (KC Series 1992A).

 

Section 4. Application of Moneys in Revenue Fund. Committee Substitute for Ordinance No. 920635 is amended by repealing Section 702 and enacting in its place a new section to read as follows:

 

Section 702. Application of Moneys in Funds and Accounts. The City covenants and agrees that from and after the delivery of the Bonds and continuing so long as any of the Bonds shall remain Outstanding, the City will administer and allocate all of the moneys then held in the Sewer Special Assessment Fund and the General Debt and Interest Fund, in that order, on the dates and in the amounts as follows:

 

(1) There shall first be paid and credited to the Trustee for credit to the Interest Account and the Principal Account, to the extent necessary to pay the interest on and principal of the Bonds when due, the following sums:

 

(A) Beginning with the first of said quarterly deposits and continuing thereafter to and including the December 20, 1992 quarterly deposit, an equal pro rata portion of the amount of interest becoming due on the Bonds on January l, 1993; and thereafter, beginning on the March 20, 1993 quarterly deposit, and continuing thereafter so long as any of the Bonds shall remain outstanding and unpaid, an amount not less than 1/2 of the amount of interest that will become due on the Bonds on the next succeeding Interest Payment Date; payments to the Interest Account shall be reduced as follows:

 

(i) upon the Citys receipt of the Trustees semiannual notice of the balances remaining in the Debt Service Account and the Interest Account as of the Business Day following the transfer by the Trustee to the Refunding Bonds Trustee pursuant to the Indenture, an amount equal to such balances credited in equal installments against the monthly deposits due on and prior to the next Interest Payment Date; and

 

(ii) upon the Citys receipt of the Trustees semiannual notice of (a) projected investment earnings in the Reserve Account for the current Interest Period and (b) actual investment earnings in the Construction Account and in the Reserve Account (less the earnings in the Reserve Account projected pursuant to subclause (a)) for the prior Interest Period, an amount equal to such projected earnings and actual earnings will be credited in equal installments against the monthly deposits due on and prior to the next Interest Payment Date; and

 

(B) Beginning on the fourth Quarterly Payment Date preceding the first date principal on the Bonds is due and payable, and continuing thereafter on each Quarterly Payment Date so long as any of the Bonds shall remain outstanding and unpaid, an amount not less than 1/4 of the amount of principal that will become due on the Bonds on the next succeeding principal payment date.

 

(2) There shall next be paid to the Trustee for deposit to the Administrative Expense Fund, on each Interest Payment Date that the Allocable Portion of the Trustees Fee and the Administrative Fee are scheduled to become due, such amounts as may be required to pay the Allocable Portion of the Trustees Fee and the Administrative Fee becoming due on such date.

 

Section 5. Series 1992B Bond Ordinance Amendments. In consideration of the Citys receipt of the portion of the net savings resulting from the refunding of the Series 1992B Authority Bonds which are allocable to the City (as further described below) and in order to provide for the proper credit of investment earnings to be received by the City pursuant to the Citys participation in the SRF Program under the Series 1992B Bond Ordinance, the Series 1992B Bond Ordinance is amended as provided in this Section. Terms not otherwise defined in this Section have the meanings set forth in the Series 1992B Bond Ordinance.

 

Definitions. Committee Substitute for Ordinance No. 920636 is amended by repealing Section 101 and enacting in its place a new section to read as follows:

 

Section 101. Additional Definitions of Words and Terms. Words and terms not otherwise defined herein shall have the meanings as set forth in the hereinafter described Indenture and Purchase Agreement. In addition to the foregoing and words and terms defined elsewhere in this Ordinance, the following capitalized words and terms as used in this Ordinance shall have the following meanings:

 

Act means Chapter 250, RSMo.

 

Administrative Fee means the fee payable to the Trustee for transfer to DNR as described in Section 212.

 

Authority means the State Environmental Improvement and Energy Resources Authority, a body corporate and politic and a governmental instrumentality of the State.

 

Authority Bonds means the Water Pollution Control Revenue Bonds (State Revolving Fund Program) Series 1992B.

 

Authority Program Bonds means the Authority Bonds and any other bonds of the Authority issued under the SRF Program, all or a portion of the proceeds of which are loaned to the City pursuant to the SRF Program.

 

Authority Refunding Bonds means the Water Pollution Control Revenue Refunding Bonds (State Revolving Fund Program - Master Trust) Series 2001B of the Authority.

 

Authority Refunding Bonds Trustee means the bond trustee with respect to the Authority Refunding Bonds, and its successors and assigns.

 

Authorized Representative means the representative of the City designated as such by the City in accordance with the Regulations.

 

Bondowner means the Authority or its assigns.

 

Bond Register means the books for the registration, transfer and exchange of Bonds kept at the office of the Paying Agent.

 

Consulting Engineer means each independent engineer or engineering firm or corporation of reputation for skill and experience with respect to the design and construction of wastewater treatment, sanitary sewerage or water pollution control facilities as may from time to time be retained by the City.

 

Current Expenses means all reasonable and necessary expenses of operation, maintenance and repair of the System and keeping the System in good repair and working order, including without limiting the generality of the foregoing, current maintenance charges, expenses of reasonable upkeep and repairs, salaries, wages, costs of materials and supplies, Paying Agent fees and expenses, annual audits, periodic Consulting Engineers reports, properly allocated share of charges for insurance, and all other expenses incident to the operation of the System, but shall exclude interest paid on System Revenue Bonds, depreciation and amortization charges, all general administrative expenses of the City not related to the operation of the System, and the payments into the Depreciation and Replacement Account hereinafter provided for, all as determined in accordance with generally accepted accounting principles.

 

Defeasance Securities means (i) Federal Securities, (ii) obligations of the Resolution Funding Corporation or any successor thereto, but only if the use of such obligations to pay and discharge Bonds pursuant to Article XII will cause such Bonds to be rated in the highest long-term rating category by the Rating Agency, or (iii) any bonds or any other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (A) which are fully secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or Federal Securities, which fund may be applied only to the payment of such principal of and interest on and prior to the redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (B) which fund is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to above, as appropriate.

 

Depreciation and Replacement Account means the fund by that name created or ratified and confirmed by Section 501.

 

Depreciation and Replacement Account Requirement means the amount set forth in Exhibit A.

 

DNR means the Department of Natural Resources, a department of the State.

 

Federal Securities means any direct obligation of, or obligation the timely payment of the principal of and interest on which are unconditionally guaranteed by, the United States of America and backed by the full faith and credit thereof.

 

Indenture means the Bond Indenture dated as of June 1, 1992 between the Authority and the Trustee pursuant to which the Authority Bonds are issued, as amended in accordance with its terms.

 

Net Revenues Available for Debt Service means, for the period of determination, all income and revenues derived by the City from the operation of the System, including investment and rental income, net proceeds from business interruption insurance, and any amounts deposited in escrow in connection with the acquisition, construction, remodeling, renovation and equipping of facilities to be applied during the period of determination to pay interest on System Revenue Bonds, less all Current Expenses (other than interest paid on System Revenue Bonds, depreciation and amortization charges during the period of determination) and other proper charges, all as determined in accordance with generally accepted accounting principles, but excluding any profits or losses on the early extinguishment of debt or on the sale or other disposition, not in the ordinary course of business, of investments or fixed or capital assets.

 

Ordinance means this Ordinance as from time to time amended in accordance with the terms hereof.

 

Outstanding when used with respect to Bonds means, as of the date of determination, all Bonds theretofore issued and delivered under this Ordinance, except:

 

(1) Bonds theretofore canceled by the Paying Agent or delivered to the Paying Agent for cancellation;

 

(2) Bonds for whose payment or redemption money in the necessary amount has been theretofore deposited with the Paying Agent in trust for the Owners of such Bonds, provided that, if such Bonds are to be redeemed, notice of such redemption has been duly given pursuant to this Ordinance, irrevocably provided for to the satisfaction of the Paying Agent, or waived;

 

(3) Bonds in exchange for or in lieu of which other Bonds have been registered and delivered pursuant to this Ordinance;

 

(4) Bonds alleged to have been mutilated, destroyed, lost, or stolen which have been paid as provided in Section 208; and

 

(5) Bonds for the payment of the principal (or redemption price) of and interest on which money or Government Obligations or both are held by the Paying Agent or other bank or trust company with the effect specified in Section 1201.

 

Owner or Registered Owner means the same as the term Bondowner.

Parity Bonds means the Outstanding Parity Bonds and any parity bonds hereafter issued pursuant to Section 1002 and standing on a parity and equality with the Bonds with respect to the payment of principal and interest out of the Revenues of the System.

 

Parity Ordinances means the ordinances under which any Parity Bonds shall hereafter be issued pursuant to Section 1002.

 

Purchase Agreement means the Purchase Agreement dated as of June 1, 1992, by and between the City and the Bondowner and DNR.

 

Record Date for the interest payable on any Interest Payment Date means the 15th day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date.

 

Revolving Fund Agreement means the Revolving Fund Agreement dated as of June 1, 1992, by and between the City and the Bondowner and DNR.

 

SRF Program Bonds means the Public Entity Bonds and any other System Revenue Bonds issued in connection with the Citys participation in the SRF Program.

 

SRF Subsidy means the amount of investment earnings which will accrue on the Reserve Account during each Fiscal Year (taking into account scheduled transfers from the Reserve Account which will occur upon the payment of principal on the Authority Program Bonds and assuming that the construction for the applicable project has been completed), if the Reserve Security is equal to the Reserve Percentage of the principal amount of the SRF Program Bonds outstanding, the Reserve Account is invested in an investment agreement at a fixed interest rate during the calculation period and earnings are reduced by the Administrative Fee payable to DNR. Administrative Fee, Reserve Account, Reserve Percentage and Reserve Security as used in this definition have the respective meanings set forth in the bond indentures for the applicable Authority Program Bonds.

 

State means the State of Missouri.

 

System Revenue Bonds means collectively the Bonds, the Parity Bonds and all other revenue bonds which are payable out of, or secured by an interest in, the income and revenues derived by the City from the operation of the System.

 

Trustee means the trustee acting at any time as Trustee under the Indenture.

 

Section 6. Committee Substitute for Ordinance No. 920636 is amended by enacting a new section, Section 101A, to read as follows:

Section 101A. Optional Redemption. The Director of Finance is authorized and directed to provide written instructions to the Trustee directing the optional redemption of the Series 1992A Authority Bonds allocable to the Series 1992B Bonds which are being refunded by the Authority (the Series 1992A Refunded Authority Bonds (KC Series 1992B)). The initial schedule of the Series 1992A Refunded Authority Bonds (KC Series 1992B) is set forth in Schedule 1. The Director of Finance is authorized to approve a final schedule of Series 1992A Refunded Authority Bonds (KC Series 1992B) and authorize the Authority to redeem the Series 1992A Refunded Authority Bonds (KC Series 1992B) on the redemption date for the Series 1992A Refunded Authority Bonds as designated by the Authority. The signature of the Director of Finance to a certificate to which the final schedule of Series 1992A Refunded Authority Bonds (KC Series 1992B) is attached will be conclusive evidence of approval of the final schedule.

 

Section 7. Committee Substitute for Ordinance No. 920636 is amended by repealing Section 302 and enacting in its place a new section to read as follows:

 

Section 302. Optional Redemption.

 

(a) Except as provided in paragraphs (b) and (c), Bonds maturing July 1, 2008 and July 1, 2013 may be called for redemption and payment prior to maturity, at the option of the City, in whole or in part on each June 1 and December 1, commencing June 1, 2002, at the redemption prices set forth below (expressed as percentages of principal amount) plus accrued interest thereon to the date of redemption:

 

Redemption Redemption

Dates Prices

 

June 1, 2002 and December 1, 2002 102%

June 1, 2003 and December 1, 2003 101

June 1, 2004 and thereafter 100

 

Bonds to be redeemed pursuant to the optional redemption provisions shall be selected by lot on a proportionate basis from all outstanding maturities of the Bonds. Upon such redemption, the sinking fund installments described in Section 301 above shall be proportionately reduced, subject to rounding to integral multiples of $5,000, or with the prior written consent of the Bondowner, integral multiples of $1. In the event of the redemption of the Bonds in part, the City shall designate the amount of each maturity redeemed and of the reduction in each sinking fund installment in writing to the Trustee, subject to the foregoing requirements and verification thereof by the Trustee. In exercising its option to redeem the Bonds pursuant to this provision, the City shall deposit with the Bondowner, in addition to the principal of, premium, if any, as calculated above and interest on the Bonds, an additional premium equal to interest that would otherwise have accrued on the Bonds for an additional 30-day period.

 

(b) The City irrevocably and unconditionally waives its right to optionally redeem Bonds maturing or subject to mandatory sinking fund redemption on the dates and in the principal amounts corresponding to the Series 1992A Refunded Authority Bonds (the Series 1992A Non-refundable Bonds (KC Series 1992B)). The initial schedule of the Series 1992A Non-refundable Bonds is set forth in Schedule 2. The Director of Finance is authorized to approve a final schedule of Series 1992A Non-refundable Bonds (KC Series 1992B). The signature of the Director of Finance to a certificate to which the final schedule of Series 1992A Non-refundable Bonds (KC Series 1992B) is attached will be conclusive evidence of approval of the final schedule.

 

(c) The City will not exercise its right to optionally redeem any other Bonds without the prior written consent of the Authority, which consent is not to be unreasonably withheld and is conditioned upon a determination by the Authority that such redemption would not adversely affect the timely payment of the principal of and interest on the portion of the Authority Refunding Bonds allocable to the Series 1992A Refunded Authority Bonds (KC Series 1992B).

 

Section 8. Application of Moneys in Revenue Fund. Committee Substitute for Ordinance No. 920636 is amended by repealing Section 702 and enacting in its place a new section to read as follows:

 

Section 702. Application of Moneys in Funds and Accounts. The City covenants and agrees that from and after the delivery of the Bonds and continuing so long as any of the Bonds shall remain Outstanding, the City will administer and allocate all of the moneys then held in the Revenue Fund on the dates and in the amounts as follows:

 

(a) There shall first be paid and credited on the first day of each month to the Operation and Maintenance Account an amount sufficient to pay the estimated cost of operating and maintaining the System during the ensuing 30-day period. All amounts paid and credited to the Operation and Maintenance Account shall be expended and used by the City solely for the purpose of paying the Current Expenses of the System.

 

(b) (1) There shall next be paid and credited on a parity basis on the first day of each month to the Outstanding Parity Bond Debt Service Account any amounts at the time required to be paid and credited to such account under the Parity Bond Ordinance and to the Trustee for credit to the Interest Account and the Principal Account, to the extent necessary to pay the interest on and principal of the Bonds when due, the following sums:

 

(A) Beginning with the first of said monthly deposits and continuing thereafter to and including the January 1, 1993 monthly deposit, an equal pro rata portion of the amount of interest becoming due on the Bonds on January l, 1993; and thereafter, beginning on the February 1, 1993 monthly deposit, and continuing thereafter so long as any of the Bonds shall remain outstanding and unpaid, an amount not less than 1/6 of the amount of interest that will become due on the Bonds on the next succeeding Interest Payment Date; payments to the Interest Account shall be reduced as follows:

 

(i) upon the Citys receipt of the Trustees semiannual notice of the balances remaining in the Debt Service Account and the Interest Account as of the Business Day following the transfer by the Trustee to the Refunding Bonds Trustee pursuant to the Indenture, an amount equal to such balances credited in equal installments against the monthly deposits due on and prior to the next Interest Payment Date; and

 

(ii) upon the Citys receipt of the Trustees semiannual notice of (a) projected investment earnings in the Reserve Account for the current Interest Period and (b) actual investment earnings in the Construction Account and in the Reserve Account (less the earnings in the Reserve Account projected pursuant to subclause (a)) for the prior Interest Period, an amount equal to such projected earnings and actual earnings will be credited in equal installments against the monthly deposits due on and prior to the next Interest Payment Date; and

 

(B) Beginning on the first day of the twelfth month preceding the first date principal on the Bonds is due and payable, and continuing thereafter on the first day of each month so long as any of the Bonds shall remain outstanding and unpaid, an amount not less than 1/12 of the amount of principal that will become due on the Bonds on the next succeeding principal payment date.

 

(2) There shall next be paid to the Trustee for deposit to the Administrative Expense Fund, on each Interest Payment Date that the Allocable Portion of the Trustees Fee and the Administrative Fee are scheduled to become due, such amounts as may be required to pay the Allocable Portion of the Trustees Fee and the Administrative Fee becoming due on such date.

 

If at any time the moneys in the Revenue Fund shall be insufficient to make in full the payments and credits at the time required to be made by the City to the Interest Account and the Principal Account and to the debt service accounts established by the City to pay the principal of and interest on the outstanding Parity Bonds, the available moneys in the Revenue Fund shall be divided among the Interest Account and the Principal Account and such principal and interest debt service accounts in proportion to the respective principal amounts of said series of the Parity Bonds of the City at the time Outstanding which are payable from the moneys in the Repayment Fund and such debt service accounts.

 

(c) After all payments and credits required at the time to be made under the provisions of paragraphs (a) and (b) of this Section have been made, there shall next be paid and credited on the first day of each month to the Outstanding Parity Bond Debt Service Reserve Account such amount as shall be required to be paid and credited to the Outstanding Parity Bond Debt Service Reserve Account and, in the event the Trustee has withdrawn moneys from the Reserve Account (other than investment earnings or the amount transferred from the Reserve Account upon the payment of principal on the Bonds), beginning with the first day of each month after such withdrawal, and continuing on the first day of each month thereafter (to and including the sixth such month), there shall next be paid to the Trustee for credit to the Reserve Account an equal pro rata portion of the amount withdrawn from the Reserve Account.

 

If at any time the moneys in the Revenue Fund shall be insufficient to make in full the payments and credits at the time required to be made to the Reserve Account and to the reserve funds established for any outstanding Parity Bonds, the available moneys in the Revenue Fund shall be divided among such funds in proportion to the respective principal amounts of said series of bonds at the time outstanding which are payable from the moneys in such accounts.

 

(d) After all payments and credits required at the time to be made by the City under the provisions of paragraphs (a), (b) and (c) of this Section have been made, there shall next be paid and credited on the first day of each month to the Depreciation and Replacement Account, an amount equal to the amount required to be deposited pursuant to any Parity Ordinance plus 1/24 of the Depreciation and Replacement Account Requirement until said Account shall aggregate the sum of the amount established in the Parity Ordinances plus the Depreciation and Replacement Account Requirement, which amount shall remain in said Account for so long as any of the Bonds remain Outstanding. Except as hereinafter provided in Section 704, moneys in the Depreciation and Replacement Account shall be expended and used by the City, if no other funds are available therefor, solely for the purpose of making emergency replacements and repairs in and to the System as may be necessary to keep the System in good repair and working order and to assure the continued effective and efficient operation thereof. After the Depreciation and Replacement Account aggregates the Depreciation and Replacement Account Requirement, no further payments into said Account shall be required, but if the City shall ever be required to expend and use a part of the moneys in said Account for its authorized purposes and such expenditure shall reduce the amount of said Account below the Depreciation and Replacement Account Requirement, then the City shall resume and continue said monthly payments into said Account until said Account shall again aggregate the Depreciation and Replacement Account Requirement.

 

(e) After all payments and credits required at the time to be made by the City under the provisions of paragraphs (a), (b), (c) and (d) of this Section have been made, all moneys remaining in the Revenue Fund on the first day of each month shall be paid and credited to the Surplus Account. Moneys in the Surplus Account may be expended and used for the following purposes as determined by the Governing Body of the City:

 

(1) Paying the cost of the operation, maintenance and repair of the System to the extent that may be necessary after the application of the moneys held in the Operation and Maintenance Account under the provisions of paragraph (a) of this Section;

 

(2) Paying the cost of extending, enlarging or improving the System;

 

(3) Preventing default in, anticipating payments into or increasing the amounts in the accounts confirmed in Section 502 hereof, the Principal Account, the Interest Account, the Reserve Account or the Depreciation and Replacement Account referred to in paragraphs (b), (c) and (d) of this Section, or any one of them, or establishing or increasing the amount of any principal and interest account or bond reserve account created by the City for the payment of any Parity Bonds of the City hereafter issued; or

 

(4) Calling, redeeming and paying prior to maturity, or, at the option of the City, purchasing in the open market at the best price obtainable not exceeding the call price (if any bonds are callable), the Bonds or any other Parity Bonds of the City hereafter issued under the conditions hereinafter specified and standing on a parity with the Bonds, including principal, interest and redemption premium, if any.

 

So long as any of the Bonds remain Outstanding, no moneys derived by the City from the operation of the System shall be diverted to the general governmental or municipal functions of the City.

 

Section 9. Rate Covenant. Committee Substitute for Ordinance No. 920636 is amended by repealing Section 902 and enacting in its place a new section to read as follows:

 

Section 902. Rate Covenant. The City will fix, establish, maintain and collect such rates and charges for the use and services furnished by or through the System, including all extensions and improvements thereto hereafter constructed or acquired by the City, as will produce revenues sufficient to (a) pay the costs of the operation and maintenance of the System; (b) pay the principal of and interest on the Bonds as and when the same become due; (c) enable the City to have in each fiscal year Net Revenues Available for Debt Service in an amount not less than 110% of the amount required to be paid by the City in such fiscal year on account of both principal of and interest on all System Revenue Bonds at the time outstanding; provided that interest on any SRF Program Bonds will be reduced by the SRF Subsidy, if any; and (d) provide reasonable and adequate reserves for the payment of the Bonds and the interest thereon and for the protection and benefit of the System as provided in this Ordinance. The City will require the prompt payment of accounts for service rendered by or through the System and will promptly take whatever action is legally permissible to enforce and collect delinquent charges.

 

Section 10. Parity Lien Bonds. Committee Substitute for Ordinance No. 920636 is amended by repealing Section 1002 and enacting in its place a new section to read as follows:

 

Section 1002. Parity Lien Bonds or Obligations. The City covenants and agrees that so long as any of the Bonds remain Outstanding, the City will not issue any additional bonds or other long-term obligations payable out of the net income and revenues of the System or any part thereof which stand on a parity or equality with the Bonds unless the following conditions are met:

 

(a) The City shall not be in default in the payment of principal of or interest on any Bonds or the Parity Bonds or in making any payment at the time required to be made into the respective funds and accounts created by and referred to in this Ordinance or any Parity Ordinance; and

 

(b) The City shall obtain a certificate showing either of the following:

 

(1) The average annual Net Revenues Available for Debt Service derived by the City from the operation of the System as set forth in the last available audit, for the two fiscal years immediately preceding the issuance of additional bonds, shall have been equal to at least 110% of the average annual amount required to be paid out of said Net Revenues Available for Debt Service in succeeding fiscal years on account of both principal (at maturity or upon mandatory redemption) and interest becoming due with respect to all System Revenue Bonds of the City, including the additional bonds proposed to be issued; provided that interest on any SRF Program Bonds will be reduced by the SRF Subsidy, if any. In determining the Net Revenues Available for Debt Service for the purpose of this subsection, the City may adjust said Net Revenues Available for Debt Service by adding thereto, in the event the City shall have made any increase in rates for the use and services of the System and such increase shall not have been in effect during all of the two fiscal years immediately preceding the issuance of additional bonds, the amount of the additional Net Revenues Available for Debt Service which would have resulted from the operation of the System during said two preceding fiscal years had such rate increase been in effect for the entire period; or

 

(2) The estimated average annual Net Revenues Available for Debt Service derived by the City from the operation of the System for the two fiscal years immediately following the fiscal year in which the improvements to the System, the cost of which is being financed by such additional bonds, are to be in commercial operation, as certified by the Consulting Engineer shall be equal to at least 110% of the average annual amount required to be paid out of said revenues in succeeding fiscal years following such commercial operation on account of both principal (at maturity or upon mandatory redemption) and interest becoming due with respect to all System Revenue Bonds of the City, including the additional bonds proposed to be issued; provided that interest on any SRF Program Bonds will be reduced by the SRF Subsidy, if any. In determining the amount of estimated Net Revenues Available for Debt Service for the purpose of this subsection, the Consulting Engineer may adjust said estimated net revenues by adding thereto any estimated increase in Net Revenues Available for Debt Service resulting from any increase in rates for the use and services of the System which have been approved by the City.

 

Additional revenue bonds or other obligations of the City issued under the conditions set forth in this Section shall stand on a parity with the Bonds and shall enjoy complete equality of lien on and claim against the net revenues of the System with the Bonds, and the City may make equal provision for paying said bonds and the interest thereon out of the Revenue Fund and may likewise provide for the creation of reasonable system debt service funds and system debt service reserve funds for the payment of such additional bonds and the interest thereon out of moneys in the Revenue Fund.

Section 11. Parity Lien Bonds. Committee Substitute for Ordinance No. 920636 is amended by repealing Section 1004 and enacting in its place a new section to read as follows:

 

Section 1004. Refunding Bonds. The City shall have the right, if it shall find it desirable, without complying with the provisions of Section 1002 to refund any of the Bonds under the provisions of any law then available and the refunding bonds so issued shall enjoy complete equality of pledge with any of the Bonds which are not refunded, if any, upon the revenues of the System; provided, however, that if only a portion of the Bonds be refunded and if said Bonds are refunded in such manner that the refunding bonds bear a higher average rate of interest or become due on a date earlier than that of the Bonds which are refunded, then said Bonds may be refunded without complying with the provisions of Section 1002 only by and with the written consent of the Authority and DNR. Nothing in this Section will be deemed to modify the limitations of Section 302(b) and (c).

 

Section 12. Series 1995A Bond Ordinance Amendments. In consideration of the Citys receipt of the net savings resulting from the refunding of certain Series 1995B Authority Bonds and in order to provide for the proper credit of investment earnings to be received by the City pursuant to the Citys participation in the SRF Program under the Series 1995A Bond Ordinance, the Series 1995A Bond Ordinance is amended as provided in this Section. Terms not otherwise defined in this Section have the meanings set forth in the Series 1995A Bond Ordinance.

 

Definitions. Committee Substitute for Ordinance No. 950353 is amended by repealing Section 101 and enacting in its place a new section to read as follows:

 

Section 101. Additional Definitions of Words and Terms. Words and terms not otherwise defined herein shall have the meanings as set forth in the hereinafter described Indenture and Purchase Agreement. In addition to the foregoing and words and terms defined elsewhere in this Ordinance, the following capitalized words and terms as used in this Ordinance shall have the following meanings:

 

Act means Chapter 250 and Section 108.140, RSMo.

 

Administrative Fee means the fee payable to the Trustee for transfer to DNR as described in Section 212.

 

Authority means the State Environmental Improvement and Energy Resources Authority, a body corporate and politic and a governmental instrumentality of the State.

 

Authority Bonds means the Water Pollution Control Revenue Bonds (State Revolving Fund Program City of Kansas City Project) Series 1995B of the Authority.

 

Authority Program Bonds means the Authority Bonds and any other bonds of the Authority issued under the SRF Program, all or a portion of the proceeds of which are loaned to the City pursuant to the SRF Program.

 

Authority Refunding Bonds means the Water Pollution Control Revenue Refunding Bonds (State Revolving Fund Program - Master Trust) Series 2001B of the Authority.

 

Authority Refunding Bonds Trustee means the bond trustee with respect to the Authority Refunding Bonds, and its successors and assigns.

 

Authorized Representative means the representative of the City designated as such by the City in accordance with the Regulations.

 

Bondowner means the Authority or its assigns.

 

Bond Register means the books for the registration, transfer and exchange of Public Entity Bonds kept at the office of the Paying Agent.

 

Consulting Engineer means each independent engineer or engineering firm or corporation of reputation for skill and experience with respect to the design and construction of wastewater treatment, sanitary sewerage or water pollution control facilities as may from time to time be retained by the City.

 

Current Expenses means all reasonable and necessary expenses of operation, maintenance and repair of the System and keeping the System in good repair and working order, including without limiting the generality of the foregoing, current maintenance charges, expenses of reasonable upkeep and repairs, salaries, wages, costs of materials and supplies, Paying Agent fees and expenses, annual audits, periodic Consulting Engineers reports, properly allocated share of charges for insurance, and all other expenses incident to the operation of the System, but shall exclude interest paid on System Revenue Bonds, depreciation and amortization charges, all general administrative expenses of the City not related to the operation of the System, and the payments into the Depreciation and Replacement Account hereinafter provided for, all as determined in accordance with generally accepted accounting principles.

 

Defeasance Securities means (i) Federal Securities, (ii) obligations of the Resolution Funding Corporation or any successor thereto, but only if the use of such obligations to pay and discharge Public Entity Bonds pursuant to Article XII will cause such Public Entity Bonds to be rated in the highest long_term rating category by the Rating Agency, or (iii) any bonds or any other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (A) which are fully secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or Federal Securities, which fund may be applied only to the payment of such principal of and interest on and prior to the redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (B) which fund is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to above, as appropriate.

 

Depreciation and Replacement Account means the account by that name created or ratified and confirmed by Section 501.

 

DNR means the Missouri Department of Natural Resources, a department of the State.

 

Federal Securities means any direct obligation of, or obligation the timely payment of the principal of and interest on which are unconditionally guaranteed by, the United States of America and backed by the full faith and credit thereof.

 

Indenture means the Bond Indenture dated as of April 1, 1995 between the Authority and the Trustee pursuant to which the Authority Bonds are issued, as amended in accordance with its terms.

 

Net Revenues Available for Debt Service means, for the period of determination, all income and revenues derived by the City from the operation of the System, including investment and rental income, net proceeds from business interruption insurance, sales tax revenues which have been annually appropriated by the City or which are limited solely to the payment of improvements to or expenses of the System and any amounts deposited in escrow in connection with the acquisition, construction, remodeling, renovation and equipping of facilities to be applied during the period of determination to pay interest on System Revenue Bonds, less all Current Expenses (other than interest paid on System Revenue Bonds, depreciation and amortization charges during the period of determination) and other proper charges, all as determined in accordance with generally accepted accounting principles, but excluding any profits or losses on the early extinguishment of debt or on the sale or other disposition, not in the ordinary course of business, of investments or fixed or capital assets.

 

Ordinance means this Ordinance as from time to time amended and supplemented in accordance with the terms hereof.

 

Outstanding when used with respect to Public Entity Bonds means, as of the date of determination, all Public Entity Bonds theretofore issued and delivered under this Ordinance, except:

 

(1) Public Entity Bonds theretofore cancelled by the Paying Agent or delivered to the Paying Agent for cancellation;

 

(2) Public Entity Bonds for whose payment or redemption money in the necessary amount has been theretofore deposited with the Paying Agent in trust for the Owners of such Public Entity Bonds, provided that, if such Public Entity Bonds are to be redeemed, notice of such redemption has been duly given pursuant to this Ordinance, irrevocably provided for to the satisfaction of the Paying Agent, or waived;

 

(3) Public Entity Bonds in exchange for or in lieu of which other Public Entity Bonds have been registered and delivered pursuant to this Ordinance;

 

(4) Public Entity Bonds alleged to have been mutilated, destroyed, lost, or stolen which have been paid as provided in Section 208; and

 

(5) Public Entity Bonds for the payment of the principal (or redemption price) of and interest on which money or Government Obligations or both are held by the Paying Agent or other bank or trust company with the effect specified in Section 1201.

 

Owner or Registered Owner means the same as the term Bondowner.

 

Parity Bonds means the Outstanding Parity Bonds and any parity bonds hereafter issued pursuant to Section 1002 and standing on a parity and equality with the Public Entity Bonds with respect to the payment of principal and interest out of the Revenues of the System.

 

Parity Ordinances means the Outstanding Parity Bond Ordinance and the ordinances under which any Parity Bonds shall hereafter be issued pursuant to Section 1002.

 

Purchase Agreement means the Purchase Agreement dated as of April 1, 1995, by and among the City, the Authority and DNR.

 

Record Date for the interest payable on any Interest Payment Date means the 15th day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date.

 

Revolving Fund Agreement means the Revolving Fund Agreement dated as of April 1, 1995, by and among the City, the Authority and DNR.

 

SRF Program Bonds means the Public Entity Bonds and any other System Revenue Bonds issued in connection with the Citys participation in the SRF Program.

 

SRF Subsidy means the amount of investment earnings which will accrue on the Reserve Account during each Fiscal Year (taking into account scheduled transfers from the Reserve Account which will occur upon the payment of principal on the Authority Program Bonds and assuming that the construction for the applicable project has been completed), if the Reserve Security is equal to the Reserve Percentage of the principal amount of the SRF Program Bonds outstanding, the Reserve Account is invested in an investment agreement at a fixed interest rate during the calculation period and earnings are reduced by the Administrative Fee payable to DNR. Administrative Fee, Reserve Account, Reserve Percentage and Reserve Security as used in this definition have the respective meanings set forth in the bond indentures for the applicable Authority Program Bonds.

 

State means the State of Missouri.

 

System Revenue Bonds means collectively the Public Entity Bonds, the Parity Bonds and all other revenue bonds which are payable out of, or secured by an interest in, the income and revenues derived by the City from the operation of the System.

 

Terms Ordinance means an ordinance of the City adopted prior to the issuance of the Public Entity Bonds, which ordinance shall establish the maturities, interest rates and sinking fund redemption provisions for the Public Entity Bonds.

 

Trustee means the trustee acting at any time as Trustee under the Indenture.

 

Section 13. Committee Substitute for Ordinance No. 950353 is amended by enacting a new section, Section 101A, to read as follows:

 

Section 101A. Optional Redemption. The Director of Finance is authorized and directed to provide written instructions to the Trustee directing the optional redemption of the Series 1995B Authority Bonds allocable to the City which are being refunded by the Authority (the Series 1995B Refunded Authority Bonds). The initial schedule of the Series 1995B Refunded Authority Bonds is set forth in Schedule 1. The Director of Finance is authorized to approve a final schedule of Series 1995B Refunded Authority Bonds and authorize the Authority to redeem the Series 1995B Refunded Authority Bonds on the redemption date for the Series 1995B Refunded Authority Bonds as designated by the Authority. The signature of the Director of Finance to a certificate to which the final schedule of Series 1995B Refunded Authority Bonds is attached will be conclusive evidence of approval of the final schedule.

 

Section 14. Committee Substitute for Ordinance No. 950353 is amended by repealing Section 302 and enacting in its place a new section to read as follows:

 

Section 302. Optional Redemption.

 

(a) Except as provided in paragraphs (b) and (c), Public Entity Bonds maturing on and after January 1, 2006 may be called for redemption and payment prior to maturity, at the option of the City, in whole or in part on each June 1 and December 1, commencing December 1, 2004, at the redemption prices set forth below (expressed as percentages of principal amount) plus accrued interest thereon to the date of redemption:

 

Redemption Redemption

Dates Prices

 

December 1, 2004 through November 30, 2005 102%

December 1, 2005 through November 30, 2006 101

December 1, 2006 and thereafter 100

 

Public Entity Bonds to be redeemed pursuant to the optional redemption provisions shall be selected by lot on a proportionate basis from all outstanding maturities of the Public Entity Bonds. Upon such redemption, the sinking fund installments described in Section 301 above shall be proportionately reduced, subject to rounding to integral multiples of $5,000, or with the prior written consent of the Bondowner, integral multiples of $1. In the event of the redemption of the Public Entity Bonds in part, the City shall designate the amount of each maturity redeemed and of the reduction in each sinking fund installment in writing to the Trustee, subject to the foregoing requirements and verification thereof by the Trustee. In exercising its option to redeem the Public Entity Bonds pursuant to this provision, the City shall deposit with the Bondowner, in addition to the principal of, premium, if any, as calculated above and interest on the Public Entity Bonds, an additional premium equal to interest that would otherwise have accrued on the Public Entity Bonds for an additional 30-day period.

 

(b) The City irrevocably and unconditionally waives its right to optionally redeem Public Entity Bonds maturing or subject to mandatory sinking fund redemption on the dates and in the principal amounts corresponding to the Series 1995B Refunded Authority Bonds (the Series 1995B Non-refundable Bonds). The initial schedule of the Series 1995B Non-refundable Bonds is set forth in Schedule 2. The Director of Finance is authorized to approve a final schedule of Series 1995B Non-refundable Bonds. The signature of the Director of Finance to a certificate to which the final schedule of Series 1995B Non-refundable Bonds is attached will be conclusive evidence of approval of the final schedule.

 

(c) The City will not exercise its right to optionally redeem any other Public Entity Bonds without the prior written consent of the Authority, which consent is not to be unreasonably withheld and is conditioned upon a determination by the Authority that such redemption would not adversely affect the timely payment of the principal of and interest on the portion of the Authority Refunding Bonds allocable to the Series 1995B Refunded Authority Bonds.

 

Section 15. Application of Moneys in Revenue Fund. Committee Substitute for Ordinance No. 950353 is amended by repealing Section 702 and enacting in its place a new section to read as follows:

 

 

Section 702. Application of Moneys in Funds and Accounts. The City covenants and agrees that from and after the delivery of the Public Entity Bonds and continuing so long as any of the Public Entity Bonds shall remain Outstanding, the City will administer and allocate all of the moneys then held in the Sewer Fund on the dates and in the amounts as follows:

 

(a) There shall first be paid, or provision therefor made, each month an amount sufficient to pay the estimated cost of operating and maintaining the System during such month.

 

(b) (1) There shall next be paid and credited on a parity basis on the first day of each month to the Outstanding Parity Bond Debt Service Account any amounts at the time required to be paid and credited to such account under the Outstanding Parity Bond Ordinance and to the Trustee for credit to the Interest Account and the Principal Account, to the extent necessary to pay the interest on and principal of the Public Entity Bonds when due, the following sums:

 

(A) Beginning with the first of said monthly deposits and continuing thereafter to and including the January 1, 1996 monthly deposit, an equal pro rata portion of the amount of interest becoming due on the Public Entity Bonds on January l, 1996; and thereafter, beginning on the February 1, 1996 monthly deposit, and continuing thereafter so long as any of the Public Entity Bonds shall remain outstanding and unpaid, an amount not less than 1/6 of the amount of interest that will become due on the Public Entity Bonds on the next succeeding Interest Payment Date; payments to the Interest Account shall be reduced as follows:

 

(i) upon the Citys receipt of the Trustees semiannual notice of the balances remaining in the Debt Service Account and the Interest Account as of the Business Day following the transfer by the Trustee to the Refunding Bonds Trustee pursuant to the Indenture, an amount equal to such balances credited in equal installments against the monthly deposits due on and prior to the next Interest Payment Date; and

 

(ii) upon the Citys receipt of the Trustees semiannual notice of (a) projected investment earnings in the Reserve Account for the current Interest Period and (b) actual investment earnings in the Construction Account and in the Reserve Account (less the earnings in the Reserve Account projected pursuant to subclause (a)) for the prior Interest Period, an amount equal to such projected earnings and actual earnings will be credited in equal installments against the monthly deposits due on and prior to the next Interest Payment Date; and

 

(B) Beginning with the first of said monthly deposits and continuing thereafter to and including the January 1, 1996 monthly deposit, an equal pro rata portion of the amount of principal becoming due on the Public Entity Bonds on January l, 1996; and thereafter, beginning on the February 1, 1996 monthly deposit and continuing thereafter on the first day of each month so long as any of the Public Entity Bonds shall remain outstanding and unpaid, an amount not less than 1/12 of the amount of principal that will become due on the Public Entity Bonds on the next succeeding principal payment date.

 

(2) The completion of construction of the Project shall be evidenced to the Authority, the Trustee and DNR by a certificate signed by the Authorized Representative of the City stating (i) that the construction of the Project has been completed in accordance with the plans and specifications therefor, (ii) that all costs and expenses incurred in the construction of the Project have been paid except costs and expenses the payment of which is not yet due or is being retained or contested in good faith by the City and (iii) the Initiation of Operations.

 

(3) The provisions of this subparagraph (3) shall be applicable in the event that the Initiation of Operation occurs prior to the expected date for the Initiation of Operation set forth on the Citys signature page to the Purchase Agreement. Notwithstanding the above provisions of subparagraph (1) of this paragraph (b) with respect to the payment of installments of principal, the first monthly installment of principal shall be paid and credited to the Trustee no later than the first day of the month which is not more than 12 months after the Initiation of Operation. On the first day of the month which is not more than 20 years after the Initiation of Operation, all remaining unpaid principal installments shall be paid and credited to the Trustee.

 

(4) There shall next be paid to the Trustee for deposit to the Administrative Expense Fund, on each Interest Payment Date that the Trustees Fee and the Administrative Fee are scheduled to become due, such amounts as may be required to pay the Trustees Fee and the Administrative Fee becoming due on such date.

 

If at any time the moneys in the Sewer Fund shall be insufficient to make in full the payments and credits at the time required to be made by the City to the Interest Account and the Principal Account and to the debt service accounts established by the City to pay the principal of and interest on the Outstanding Parity Bonds, the available moneys in the Sewer Fund shall be applied to the payment of debt service on the Public Entity Bonds and the Outstanding Parity Bonds in proportion to the respective outstanding principal amounts of the Public Entity Bonds and the Outstanding Parity Bonds which are payable from the moneys in the Interest Account and the Principal Account and such debt service accounts for the Outstanding Parity Bonds.

 

(c) After all payments and credits required at the time to be made under the provisions of paragraphs (a) and (b) of this Section have been made, there shall next be paid and credited on the first day of each month to the Outstanding Parity Bond Debt Service Reserve Account such amount as shall be required to be paid and credited to the Outstanding Parity Bond Debt Service Reserve Account and, in the event the Trustee has withdrawn moneys from the Reserve Fund (other than investment earnings or the amount transferred from the Reserve Fund upon the payment of principal on the Public Entity Bonds), beginning with the first day of each month after such withdrawal, and continuing on the first day of each month thereafter (to and including the sixth such month), there shall next be paid to the Trustee for credit to the Reserve Fund an equal pro rata portion of the amount withdrawn from the Reserve Fund.

 

If at any time the moneys in the Sewer Fund shall be insufficient to make in full the payments and credits at the time required to be made to the Reserve Fund and to the reserve funds established for any outstanding Parity Bonds, the available moneys in the Sewer Fund shall be divided among such funds in proportion to the respective principal amounts of said series of bonds at the time outstanding which are payable from the moneys in such accounts.

 

(d) So long as any of the Series 1992A Bonds remain Outstanding and unpaid, the City shall comply with the provisions of Section 21(d) of the Series 1992A Ordinance. Thereafter, the provisions of this paragraph shall be followed. After all payments and credits required at the time to be made by the City under the provisions of paragraphs (a), (b) and (c) of this Section have been made, all moneys remaining in the Sewer Fund on the first day of each month shall be paid and credited to the Surplus Account. Moneys in the Surplus Account may be expended and used for the following purposes as determined by the Governing Body of the City:

 

(1) Paying the cost of the operation, maintenance and repair of the System to the extent that may be necessary after the application of the moneys held in the Operation and Maintenance Account under the provisions of paragraph (a) of this Section;

 

(2) Paying the cost of extending, enlarging or improving the System;

 

(3) Preventing default in, anticipating payments into or increasing the amounts in the accounts confirmed in Section 502, the Principal Account, the Interest Account, the Reserve Fund or the Depreciation and Replacement Account referred to in paragraphs (b) and (c) of this Section, or any one of them, or establishing or increasing the amount of any principal and interest account or bond reserve account created by the City for the payment of any Parity Bonds of the City hereafter issued; or

 

(4) Calling, redeeming and paying prior to maturity, or, at the option of the City, purchasing in the open market at the best price obtainable not exceeding the call price (if any bonds are callable), the Public Entity Bonds or any other Parity Bonds of the City hereafter issued under the conditions hereinafter specified and standing on a parity with the Public Entity Bonds, including principal, interest and redemption premium, if any.

 

So long as any of the Public Entity Bonds remain Outstanding, no moneys derived by the City from the operation of the System shall be diverted to the general governmental or municipal functions of the City.

 

Section 16. Rate Covenant. Committee Substitute for Ordinance No. 950353 is amended by repealing Section 902 and enacting in its place a new section to read as follows:

 

Section 902. Rate Covenant. The City will fix, establish, maintain and collect such rates and charges for the use of and services furnished by or through the System, including all extensions and improvements thereto hereafter constructed or acquired by the City, as will produce revenues sufficient to (a) pay the costs of the operation and maintenance of the System; (b) pay the principal of and interest on the Public Entity Bonds as and when the same become due; (c) enable the City to have in each fiscal year Net Revenues Available for Debt Service in an amount not less than 110% of the amount required to be paid by the City in such fiscal year on account of both principal of and interest on all System Revenue Bonds at the time outstanding; provided that interest on any SRF Program Bonds will be reduced by the SRF Subsidy, if any; and (d) provide reasonable and adequate reserves for the payment of the Public Entity Bonds and the interest thereon and for the protection and benefit of the System as provided in this Ordinance. The City will require the prompt payment of accounts for service rendered by or through the System and will promptly take whatever action is legally permissible to enforce and collect delinquent charges.

 

Section 17. Parity Lien Bonds. Committee Substitute for Ordinance No. 950353 is amended by repealing Section 1002 and enacting in its place a new section to read as follows:

 

Section 1002. Parity Lien Bonds or Obligations. The City covenants and agrees that so long as any of the Public Entity Bonds remain Outstanding, the City will not issue any additional bonds or other long_term obligations payable out of the net income and revenues of the System or any part thereof which stand on a parity or equality with the Public Entity Bonds unless the following conditions are met:

 

(a) The City shall not be in default in the payment of principal of or interest on any Public Entity Bonds or the Parity Bonds or in making any payment at the time required to be made into the respective funds and accounts created by and referred to in this Ordinance or any Parity Ordinance; and

 

(b) The City shall obtain a certificate showing either of the following:

 

(1) The average annual Net Revenues Available for Debt Service derived by the City from the operation of the System as set forth in the last available audit, for the two fiscal years immediately preceding the issuance of additional bonds, shall have been equal to at least 110% of the average annual amount required to be paid out of said Net Revenues Available for Debt Service in succeeding fiscal years on account of both principal (at maturity or upon mandatory redemption) and interest becoming due with respect to all System Revenue Bonds of the City, including the additional bonds proposed to be issued; provided that interest on any SRF Program Bonds will be reduced by the SRF Subsidy, if any. In determining the Net Revenues Available for Debt Service for the purpose of this subsection, the City may adjust said Net Revenues Available for Debt Service by adding thereto, in the event the City shall have made any increase in rates for the use and services of the System and such increase shall not have been in effect during all of the two fiscal years immediately preceding the issuance of additional bonds, the amount of the additional Net Revenues Available for Debt Service which would have resulted from the operation of the System during said two preceding fiscal years had such rate increase been in effect for the entire period; or

 

(2) The estimated average annual Net Revenues Available for Debt Service derived by the City from the operation of the System for the two fiscal years immediately following the fiscal year in which the improvements to the System, the cost of which is being financed by such additional bonds, are to be in commercial operation, as certified by the Consulting Engineer, shall be equal to at least 110% of the average annual amount required to be paid out of said revenues in succeeding fiscal years following such commercial operation on account of both principal (at maturity or upon mandatory redemption) and interest becoming due with respect to all System Revenue Bonds of the City, including the additional bonds proposed to be issued; provided that interest on any SRF Program Bonds will be reduced by the SRF Subsidy, if any. In determining the amount of estimated Net Revenues Available for Debt Service for the purpose of this subsection, the Consulting Engineer may adjust said estimated net revenues by adding thereto any estimated increase in Net Revenues Available for Debt Service resulting from any increase in rates for the use and services of the System which have been approved by the City.

 

Additional revenue bonds or other obligations of the City issued under the conditions set forth in this Section shall stand on a parity with the Public Entity Bonds and shall enjoy complete equality of lien on and claim against the net revenues of the System with the Public Entity Bonds, and the City may make equal provision for paying said bonds and the interest thereon out of the Sewer Fund and may likewise provide for the creation of reasonable system debt service funds and system debt service reserve funds for the payment of such additional bonds and the interest thereon out of moneys in the Sewer Fund.

 

Section 18. Parity Lien Bonds. Committee Substitute for Ordinance No. 950252 is amended by repealing Section 1004 and enacting in its place a new section to read as follows:

 

Section 1004. Refunding Bonds. The City shall have the right, if it shall find it desirable, without complying with the provisions of Section 1002 to refund any of the Public Entity Bonds under the provisions of any law then available and the refunding bonds so issued shall enjoy complete equality of pledge with any of the Public Entity Bonds which are not refunded, if any, upon the revenues of the System; provided, however, that if only a portion of the Bonds be refunded and if said Public Entity Bonds are refunded in such manner that the refunding bonds bear a higher average rate of interest or become due on a date earlier than that of the Public Entity Bonds which are refunded, then said Public Entity Bonds may be refunded without complying with the provisions of Section 1002 only by and with the written consent of the Authority and DNR. Nothing in this Section will be deemed to modify the limitations of Section 302(b) and (c).

 

Section 19. Series 1996A Bond Ordinance Amendments. In consideration of the Citys receipt of the net savings resulting from the refunding of certain Series 1996A Authority Bonds and in order to provide for the proper credit of investment earnings to be received by the City pursuant to the Citys participation in the SRF Program under the Series 1996A Bond Ordinance, the Series 1996A Bond Ordinance is amended as provided in this Section. Terms not otherwise defined in this Section have the meanings set forth in the Series 1996A Bond Ordinance.

 

Definitions. Committee Substitute for Ordinance No. 960253 is amended by enacting a new section, Section 101A, to read as follows:

 

Section 101A. Additional Definitions of Words and Terms. In addition to the words and terms defined in Section 101 and elsewhere in this Ordinance, the following capitalized words and terms as used in this Ordinance shall have the following meanings:

 

Authority Refunding Bonds means the Water Pollution Control Revenue Refunding Bonds (State Revolving Fund Program - Master Trust) Series 2001B of the Authority.

 

Authority Refunding Bonds Trustee means the bond trustee with respect to the Authority Refunding Bonds, and its successors and assigns.

 

Section 20. Committee Substitute for Ordinance No. 960253 is amended by enacting a new section, Section 101B, to read as follows:

 

Section 101B. Optional Redemption. The Director of Finance is authorized and directed to provide written instructions to the Trustee directing the optional redemption of the Series 1996A Authority Bonds allocable to the City which are being refunded by the Authority (the Series 1996A Refunded Authority Bonds). The initial schedule of the Series 1996A Refunded Authority Bonds is set forth in Schedule 1. The Director of Finance is authorized to approve a final schedule of Series 1996A Refunded Authority Bonds and authorize the Authority to redeem the Series 1996A Refunded Authority Bonds on the redemption date for the Series 1996A Refunded Authority Bonds as designated by the Authority. The signature of the Director of Finance to a certificate to which the final schedule of Series 1996A Refunded Authority Bonds is attached will be conclusive evidence of approval of the final schedule.

 

Section 21. Committee Substitute for Ordinance No. 960253 is amended by repealing Section 302 and enacting in its place a new section to read as follows:

 

Section 302. Optional Redemption.

 

(a) Except as provided in paragraphs (b) and (c), Bonds maturing on and after January 1, 2007 may be called for redemption and payment prior to maturity, at the option of the City, in whole or in part on any date, commencing January 1, 2006, at the redemption prices set forth below (expressed as percentages of principal amount) plus accrued interest thereon to the date of redemption:

 

Redemption Redemption

Dates Prices

 

January 1, 2006 through December 31, 2006 101.0%

January 1, 2007 through December 31, 2007 100.5

January 1, 2008 and thereafter 100.0

 

Bonds to be redeemed pursuant to the optional redemption provisions shall be selected by lot on a proportionate basis from all outstanding maturities of the Bonds. Upon such redemption, the sinking fund installments described in Section 301 shall be proportionately reduced, subject to rounding to integral multiples of $5,000, or with the prior written consent of the Bondowner, integral multiples of $1. In the event of the redemption of the Bonds in part, the City shall designate the amount of each maturity redeemed and of the reduction in each sinking fund installment in writing to the Trustee, subject to the foregoing requirements and verification thereof by the Trustee. In exercising its option to redeem the Bonds pursuant to this provision, the City shall deposit with the Bondowner, in addition to the principal of, premium, if any, as calculated above and interest on the Bonds, an additional premium equal to interest that would otherwise have accrued on the Bonds for an additional 30-day period.

 

(b) The City irrevocably and unconditionally waives its right to optionally redeem Bonds maturing or subject to mandatory sinking fund redemption on the dates and in the principal amounts corresponding to the Series 1995B Refunded Authority Bonds (the Series 1996A Non-refundable Bonds). The initial schedule of the Series 1996A Non-refundable Bonds is set forth in Schedule 2. The Director of Finance is authorized to approve a final schedule of Series 1996A Non-refundable Bonds. The signature of the Director of Finance to a certificate to which the final schedule of Series 1996A Non-refundable Bonds is attached will be conclusive evidence of approval of the final schedule.

 

(c) The City will not exercise its right to optionally redeem any other Bonds without the prior written consent of the Authority, which consent is not to be unreasonably withheld and is conditioned upon a determination by the Authority that such redemption would not adversely affect the timely payment of the principal of and interest on the portion of the Authority Refunding Bonds allocable to the Series 1996A Refunded Authority Bonds.

 

Section 22. Application of Moneys in Revenue Fund. Committee Substitute for Ordinance No. 960253 is amended by repealing Section 702 and enacting in its place a new section to read as follows:

 

Section 702. Application of Moneys in Funds and Accounts. The City covenants and agrees that from and after the delivery of the Bonds and continuing so long as any of the Bonds shall remain Outstanding, the City will administer and allocate all of the moneys then held in the Sewer Fund on the dates and in the amounts as follows:

(a) There shall first be paid, or provision therefor made, each month an amount sufficient to pay the estimated cost of operating and maintaining the System during such month.

 

(b) (1) There shall next be paid and credited on a parity basis on the first day of each month (or if such day is not a Business Day, on the next preceding day which is a Business Day) to the Outstanding Parity Bond Debt Service Account any amounts at the time required to be paid and credited to such account under the Outstanding Parity Bond Ordinance and to the Trustee for credit to the Interest Account and the Principal Account, to the extent necessary to pay the interest on and principal of the Bonds when due, the following sums:

 

(A) Beginning with the first of said monthly deposits and continuing thereafter to and including the December 31, 1996 monthly deposit, an equal pro rata portion of the amount of interest becoming due on the Bonds on January l, 1997; and thereafter, beginning on the January 31, 1997 monthly deposit, and continuing thereafter so long as any of the Bonds shall remain outstanding and unpaid, an amount not less than 1/6 of the amount of interest that will become due on the Bonds on the next succeeding Interest Payment Date; provided, however, that payments to the Interest Account shall be reduced as follows:

 

(i) upon the Citys receipt of the Trustees semiannual notice of the balances remaining in the Debt Service Account and the Interest Account as of the Business Day following the transfer by the Trustee to the Refunding Bonds Trustee pursuant to the Indenture, an amount equal to such balances credited in equal installments against the monthly deposits due on and prior to the next Interest Payment Date; and

 

(ii) upon the Citys receipt of the Trustees semiannual notice of (a) projected investment earnings in the Reserve Account for the current Interest Period and (b) actual investment earnings in the Construction Account and in the Reserve Account (less the earnings in the Reserve Account projected pursuant to subclause (a)) for the prior Interest Period, an amount equal to such projected earnings and actual earnings will be credited in equal installments against the monthly deposits due on and prior to the next Interest Payment Date; and

 

(B) Beginning on the twelfth monthly payment date preceding the first date principal on the Bonds is due and payable, and continuing thereafter on each monthly payment date so long as any of the Bonds shall remain outstanding and unpaid, an amount not less than 1/12 of the amount of principal that will become due on the Bonds on the next succeeding principal payment date, whether at maturity or upon mandatory sinking fund redemption.

 

(2) The completion of construction of the Project shall be evidenced to the Authority, the Trustee and DNR by a certificate signed by the Authorized Representative of the City stating (i) that the construction of the Project has been completed in accordance with the plans and specifications therefor, (ii) that all costs and expenses incurred in the construction of the Project have been paid except costs and expenses the payment of which is not yet due or is being retained or contested in good faith by the City and (iii) the Initiation of Operation.

 

(3) The provisions of this subparagraph (3) shall be applicable in the event that the Initiation of Operation occurs prior to the expected date for the Initiation of Operation set forth on the Citys signature page to the Purchase Agreement. Notwithstanding the above provisions of subparagraph (1) of this paragraph (b) with respect to the payment of installments of principal, the first monthly installment of principal shall be paid and credited to the Trustee no later than the first day of the month which is not more than 12 months after the Initiation of Operation. On the first day of the month which is not more than 20 years after the Initiation of Operation, all remaining unpaid principal installments shall be paid and credited to the Trustee.

 

(4) There shall next be paid to the Trustee for deposit to the Administrative Expense Fund, on each Interest Payment Date that the Trustees Fee, the Administrative Fee and the Master Trustees Disclosure Fee are scheduled to become due, such amounts as may be required to pay the Trustees Fee, the Administrative Fee and the Master Trustees Disclosure Fee becoming due on such date.

 

If at any time the moneys in the Sewer Fund shall be insufficient to make in full the payments and credits at the time required to be made by the City to the Interest Account and the Principal Account and to the debt service accounts established by the City to pay the principal of and interest on the Outstanding Parity Bonds, the available moneys in the Sewer Fund shall be applied to the payment of debt service on the Bonds and the Outstanding Parity Bonds in proportion to the respective outstanding principal amounts of the Bonds and the Outstanding Parity Bonds which are payable from the moneys in the Interest Account and the Principal Account and such debt service accounts for the Outstanding Parity Bonds.

 

(c) After all payments and credits required at the time to be made under the provisions of paragraphs (a) and (b) of this Section have been made, there shall next be paid and credited on the first day of each month in the event the Trustee has withdrawn moneys from the Reserve Fund (other than investment earnings or the amount transferred from the Reserve Fund upon the payment of principal on the Bonds), beginning with the first day of each month after such withdrawal, and continuing on the first day of each month thereafter (to and including the sixth such month), there shall next be paid to the Trustee for credit to the Reserve Fund all available moneys until an amount equal to the amount withdrawn from the Reserve Fund has been deposited in the Reserve Fund.

 

If at any time the moneys in the Sewer Fund shall be insufficient to make in full the payments and credits at the time required to be made to the Reserve Fund and to the reserve funds established for any outstanding Parity Bonds, the available moneys in the Sewer Fund shall be divided among such funds in proportion to the respective principal amounts of said series of bonds at the time outstanding which are payable from the moneys in such accounts.

 

(d) So long as any of the Series 1992A Bonds remain Outstanding and unpaid, the City shall comply with the provisions of Section 21(d) of the Series 1992A Ordinance. Thereafter, the provisions of this paragraph shall be followed. After all payments and credits required at the time to be made by the City under the provisions of paragraphs (a), (b) and (c) of this Section have been made, all moneys remaining in the Sewer Fund on the first day of each month shall be paid and credited to the Surplus Account. Moneys in the Surplus Account may be expended and used for the following purposes as determined by the Council of the City:

 

(1) Paying the cost of the operation, maintenance and repair of the System to the extent that may be necessary after the application of the moneys held in the Operation and Maintenance Account under the provisions of paragraph (a) of this Section;

 

(2) Paying the cost of extending, enlarging or improving the System;

 

(3) Preventing default in, anticipating payments into or increasing the amounts in the accounts confirmed in Section 502 , the Principal Account, the Interest Account, the Reserve Fund or the Depreciation and Replacement Account referred to in paragraphs (b) and (c) of this Section, or any one of them, or establishing or increasing the amount of any principal and interest account or bond reserve account created by the City for the payment of any Parity Bonds of the City hereafter issued; or

 

(4) Calling, redeeming and paying prior to maturity, or, at the option of the City, purchasing in the open market at the best price obtainable not exceeding the call price (if any bonds are callable), the Bonds or any other Parity Bonds of the City hereafter issued under the conditions hereinafter specified and standing on a parity with the Bonds, including principal, interest and redemption premium, if any.

 

So long as any of the Bonds remain Outstanding, no moneys derived by the City from the ownership and operation of the System shall be diverted to the general governmental or municipal functions of the City.

 

Section 23. Parity Lien Bonds. Committee Substitute for Ordinance No. 960253 is amended by repealing Section 1004 and enacting in its place a new section to read as follows:

 

Section 1004. Refunding Bonds. The City shall have the right, if it shall find it desirable, without complying with the provisions of Section 1002 to refund any of the Bonds under the provisions of any law then available and the refunding bonds so issued shall enjoy complete equality of pledge with any of the Bonds which are not refunded, if any, upon the income and revenues of the System; provided, however, that if only a portion of the Bonds be refunded and if said Bonds are refunded in such manner that the refunding bonds bear a higher average rate of interest or become due on a date earlier than that of the Bonds which are refunded, then said Bonds may be refunded without complying with the provisions of Section 1002 only by and with the written consent of the Authority and DNR. Nothing in this Section will be deemed to modify the limitations of Section 302(b) and (c).

 

Section 24. Series 1997A Bond Ordinance Amendments. In consideration of the Citys receipt of the net savings resulting from the refunding of certain Series 1997B Authority Bonds and in order to provide for the proper credit of investment earnings to be received by the City pursuant to the Citys participation in the SRF Program under the Series 1997A Bond Ordinance, the Series 1997A Bond Ordinance is amended as provided in this Section. Terms not otherwise defined in this Section have the meanings set forth in the Series 1997A Bond Ordinance.

 

Definitions. Ordinance No. 960285 is amended by enacting a new section, Section 101A, to read as follows:

 

Section 101A. Additional Definitions of Words and Terms. In addition to the words and terms defined in Section 101 and elsewhere in this Ordinance, the following capitalized words and terms as used in this Ordinance shall have the following meanings:

 

Authority Refunding Bonds means the Water Pollution Control Revenue Refunding Bonds (State Revolving Fund Program - Master Trust) Series 2001B of the Authority.

 

Authority Refunding Bonds Trustee means the bond trustee with respect to the Authority Refunding Bonds, and its successors and assigns.

 

Section 25. Ordinance No. 970285 is amended by enacting a new section, Section 101B to read as follows:

 

Section 101B. Optional Redemption. The Director of Finance is authorized and directed to provide written instructions to the Trustee directing the optional redemption of the Series 1997B Authority Bonds allocable to the City which are being refunded by the Authority (the Series 1997B Refunded Authority Bonds). The initial schedule of the Series 1997B Refunded Authority Bonds is set forth in Schedule 1. The Director of Finance is authorized to approve a final schedule of Series 1997B Refunded Authority Bonds and authorize the Authority to redeem the Series 1997B Refunded Authority Bonds on the redemption date for the Series 1997B Refunded Authority Bonds as designated by the Authority. The signature of the Director of Finance to a certificate to which the final schedule of Series 1997B Refunded Authority Bonds is attached will be conclusive evidence of approval of the final schedule.

 

Section 26. Ordinance No. 970285 is amended by repealing Section 302 and enacting in its place a new section to read as follows:

 

Section 302. Optional Redemption.

 

(a) Except as provided in paragraphs (c) and (d), Bonds maturing on and after January 1, 2008 may be called for redemption and payment prior to maturity, at the option of the City, in whole or in part on any date with the consent of the Bondowner, or on each Interest Payment Date, commencing January 1, 2007, at the redemption prices set forth below (expressed as percentages of principal amount) plus accrued interest to the redemption date:

 

Redemption Dates (Inclusive) Redemption Price

 

January 1, 2007 through December 31, 2007 101.0%

January 1, 2008 through December 31, 2008 100.5

January 1, 2009 and thereafter 100.0

 

(b) Bonds will be optionally redeemed in part in integral multiples of $5,000 (unless otherwise approved in writing by the Bondowner) from the maturities selected by the City with the prior written consent of the Bondowner. Upon redemption, the sinking fund redemption amounts for each Term Bond in Exhibit A will be proportionately reduced, subject to rounding to integral multiples of $5,000 (unless otherwise approved in writing by the Bondowner). The City will give written notice to the Trustee designating the amount of each maturity redeemed and the reduction in each sinking fund redemption amount, subject to verification by the Trustee.

 

(c) The City irrevocably and unconditionally waives its right to optionally redeem Bonds maturing or subject to mandatory sinking fund redemption on the dates and in the principal amounts corresponding to the Series 1997B Refunded Authority Bonds (the Series 1997B Non-refundable Bonds). The initial schedule of the Series 1997B Non-refundable Bonds is set forth in Schedule 2. The Director of Finance is authorized to approve a final schedule of Series 1997B Non-refundable Bonds. The signature of the Director of Finance to a certificate to which the final schedule of Series 1997B Non-refundable Bonds is attached will be conclusive evidence of approval of the final schedule.

 

(d) The City will not exercise its right to optionally redeem any other Bonds without the prior written consent of the Authority, which consent is not to be unreasonably withheld and is conditioned upon a determination by the Authority that such redemption would not adversely affect the timely payment of the principal of and interest on the portion of the Authority Refunding Bonds allocable to the Series 1997B Refunded Authority Bonds.

 

Section 27. Application of Moneys in Revenue Fund. Ordinance No. 970285 is amended by repealing Section 602 and enacting in its place a new section to read as follows:

 

Section 602. Application of Moneys in Funds and Accounts.

 

(a) The City will apply moneys in the Sewer Fund on the dates, in the amounts and in the order as follows:

 

(1) On the first day of each month to the Operation and Maintenance Account an amount sufficient to pay the estimated cost of operating and maintaining the System during the ensuing 30-day period;

 

(2) On the 25th day of each month, on a parity basis (i) to the Outstanding Parity Bond Debt Service Account the amount required under the Outstanding Parity Bond Ordinance and (ii) the following amounts to the Trustee for credit to the Sewer System Interest Account and the Sewer System Principal Account:

 

(A) on May 25, 1997 to and including December 25, 1997, to the Sewer System Interest Account 1/8 of the amount of interest on the Bonds due on January 1, 1998 less accrued interest deposited to the Sewer System Interest Account; and on January 25, 1998 and thereafter 1/6 of the amount of interest due on the Bonds on the next Interest Payment Date, with these monthly payments to be reduced as follows:

 

(I) upon the Citys receipt of the Trustees semiannual notice of the balances remaining in the Sewer System Debt Service Account and the Sewer System Interest Account as of the Business Day following the transfer by the Trustee to the Refunding Bonds Trustee pursuant to the Indenture, an amount equal to such balances credited in equal installments against the monthly deposits due prior to the next Interest Payment Date; and

 

(II) upon the Citys receipt of the Trustees semiannual notice of: (a) projected investment earnings in the Sewer System Reserve Account for the current Interest Period and (b) actual investment earnings in the Sewer System Project Account and in the Sewer System Reserve Account (less the earnings in the Reserve Account projected pursuant to subclause (a)) for the prior Interest Period, an amount equal to such projected earnings and actual earnings will be credited in equal installments against the monthly deposits due prior to the next Interest Payment Date; and

 

(B) On May 25, 1997 to and including December 25, 1997, to the Sewer System Principal Account 1/8 of the amount of principal on the Bonds due on January 1, 1998, and on January 25, 1998 and thereafter, to the Sewer System Principal Account 1/12 of the principal due on the Bonds on the next succeeding principal payment date, whether at maturity or upon mandatory sinking fund redemption. If the Initiation of Operation specified in the certificate delivered by the City under Section 3.5 of the Purchase Agreement is earlier than the expected Initiation of Operation as defined in the Purchase Agreement, (i) the first monthly installment of principal will be paid no later than the monthly payment date which is not more than 12 months after the Initiation of Operation, and (ii) on the monthly payment date which is not more than 20 years after the Initiation of Operation, all remaining unpaid principal installments will be paid;

 

(3) On the dates required by Section 211(a), to the Trustee, for deposit to the Administrative Expense Fund, the amount required to pay the Administrative Fee, the Trustees Fee and the Master Trustees Disclosure Fee;

(4) On the first day of each month, to the Outstanding Parity Bond Debt Service Reserve Account as required by the Outstanding Parity Bond Ordinance and, in the event the Trustee has withdrawn moneys from the Sewer System Reserve Account (other than investment earnings or the amount transferred from the Sewer System Reserve Account upon the payment of principal on the Bonds), to the Sewer System Reserve Account all available moneys until the Sewer System Reserve Account has been replenished; and

 

(5) On the first day of each month the remaining balance to the Surplus Account.

 

(b) If the amount in the Sewer Fund is not sufficient to make the payments at the time required to be made by the City to the Sewer System Interest Account, the Sewer System Principal Account and the Outstanding Parity Bond Debt Service Account, the City will apply the remaining balance in the Sewer Fund on a proportionate basis (based upon the outstanding principal amounts of the Bonds and the Outstanding Parity Bonds) to the Sewer System Principal Account, the Sewer System Interest Account and the Outstanding Parity Bond Debt Service Account.

 

(c) If the amount in the Sewer Fund is not sufficient to make the payments at the time required to be made by the City to the Sewer System Reserve Account and to the Outstanding Parity Bond Debt Service Reserve Account, the City will divide the balance in the Sewer Fund between the Sewer System Reserve Account and the Outstanding Parity Bond Debt Service Reserve Account on a proportionate basis (based upon the outstanding principal amounts of the Bonds and the Outstanding Parity Bonds).

 

(d) While the Series 1992A Bonds remain Outstanding and unpaid, the City shall comply with the provisions of Section 21(d) of the Series 1992A Ordinance. Moneys in the Surplus Account are to be expended for the following purposes as determined by the Governing Body:

 

(1) Paying the cost of the operation, maintenance and repair of the System to the extent necessary after the application of the moneys held in the Operation and Maintenance Account;

 

(2) Paying the cost of extending, enlarging or improving the System;

 

(3) Preventing default in, anticipating payments into or increasing the amounts in the accounts confirmed or established in Section 402, the Sewer System Principal Account, the Sewer System Interest Account or the Sewer System Reserve Account, or establishing or increasing the amount of any principal and Sewer System Interest Account or debt service reserve account created by the City for the payment of any System Revenue Bonds subsequently issued; or

(4) Redeeming and paying prior to maturity, or, at the option of the City, purchasing in the open market at the best price obtainable not exceeding the call price (if any bonds are callable), the Bonds, the Outstanding Parity Bonds or any other System Revenue Bonds of the City hereafter issued under the conditions hereinafter specified and standing on a parity with the Bonds, including principal, redemption premium, if any, and interest.

 

(e) All amounts paid and credited to the Operation and Maintenance Account will be expended solely for the purpose of paying the Current Expenses of the System.

 

(f) No moneys derived by the City from the System will be diverted to the general governmental or municipal functions of the City.

 

Section 28. Parity Lien Bonds. Committee Substitute for Ordinance No. 960253 is amended by repealing Section 904 and enacting in its place a new section to read as follows:

 

Section 904. Refunding Bonds. The City may, without complying with the provisions of Section 902, refund any of the Bonds in a manner which provides debt service savings to the City, and the refunding bonds so issued will be on a parity with any of the Bonds that are not refunded. If the Bonds are refunded in part and the refunding bonds bear a higher average rate of interest or become due on a date earlier than that of the Bonds which are refunded, the City must obtain the prior written consent of the Bondowner and DNR to the issuance of the refunding bonds. Nothing in this Section will be deemed to modify the limitations of Section 302(c) and (d).

 

Section 29. Arbitrage Rebate.

 

(a) In addition to the current obligation of the City to pay to the Series 1992A Trustee arbitrage rebate and the Citys allocable portion of the costs of calculating arbitrage rebate in connection with the Series 1992A Authority Bonds, the City will pay to the Series 1992A Trustee and the Authority Refunding Bonds Trustee, as appropriate, arbitrage rebate and the extraordinary expenses incurred by the Series 1992A Trustee and the Authority Refunding Bonds Trustee in connection with the calculation of arbitrage rebate which results from any remaining balance in the Construction Account (Series 1992A) or Construction Account (Series 1992B) held under the Series 1992A Indenture as of January 1, 2002.

 

(b) In addition to the current obligation of the City to pay to the Series 1995B Trustee arbitrage rebate and, if the City fails to calculate arbitrage rebate, the costs of calculating arbitrage rebate in connection with the Series 1995B Authority Bonds, the City will pay to the Series 1995B Trustee and the Authority Refunding Bonds Trustee, as appropriate, arbitrage rebate and, if the City fails to make the appropriate calculations, the extraordinary expenses incurred by the Series 1995B Trustee and the Authority Refunding Bonds Trustee in connection with the calculation of arbitrage rebate which results from any remaining balance in the Construction Loan Fund held under the Series 1995B Indenture as of January 1, 2002.

 

(c) In addition to the current obligation of the City to pay to the Series 1996A Trustee arbitrage rebate and, if the City fails to calculate arbitrage rebate, the costs of calculating arbitrage rebate in connection with the Series 1996A Authority Bonds, the City will pay to the Series 1996A Trustee and the Authority Refunding Bonds Trustee, as appropriate, arbitrage rebate and, if the City fails to make the appropriate calculations, the extraordinary expenses incurred by the Series 1996A Trustee and the Authority Refunding Bonds Trustee in connection with the calculation of arbitrage rebate which results from any remaining balance in the Construction Loan Fund held under the Series 1996A Indenture as of January 1, 2002.

 

(d) In addition to the current obligation of the City to pay to the Series 1997B Trustee arbitrage rebate and, if the City fails to calculate arbitrage rebate, the costs of calculating arbitrage rebate in connection with the Series 1997B Authority Bonds, the City will pay to the Series 1997B Trustee and the Authority Refunding Bonds Trustee, as appropriate, arbitrage rebate and, if the City fails to make the appropriate calculations, the extraordinary expenses incurred by the Series 1997B Trustee and the Authority Refunding Bonds Trustee in connection with the calculation of arbitrage rebate which results from any remaining balance in the Sewer System Project Account of the Construction Loan Fund held under the Series 1997B Indenture as of January 1, 2002.

 

Section 30. Further Authority. The City shall, and the Mayor, the City Clerk and the Director of Finance are hereby authorized and directed to, take such further action, and execute such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Ordinance.

 

____________________________________________________________________

 

Approved as to form and legality:

 

 

 

_________________________________________

Assistant City Attorney