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Legislation #: 960223 Introduction Date: 3/7/1996
Type: Ordinance Effective Date: 3/31/1996
Sponsor: None
Title: Authorizing the issuance and delivery of $8,000,000.00 principal amount of General Obligation Sewer Special Assessment Bonds, Series 1996A, of the City of Kansas City, Missouri, for the purpose of constructing, extending and improving City sewers; providing for the levy and collection of an annual tax for the purpose of paying the principal of and interest on the Bonds as they become due; and making certain covenants with respect thereto.

Legislation History
DateMinutesDescription
3/7/1996

Prepare to Introduce

3/7/1996

Referred Finance & Administration Committee

3/13/1996

Do Pass as a Committee Substitute

3/14/1996

Assigned to Third Read Calendar

3/21/1996

Passed as Substituted


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COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 960223

 

Authorizing the issuance and delivery of $8,000,000.00 principal amount of General Obligation Sewer Special Assessment Bonds, Series 1996A, of the City of Kansas City, Missouri, for the purpose of constructing, extending and improving City sewers; providing for the levy and collection of an annual tax for the purpose of paying the principal of and interest on the Bonds as they become due; and making certain covenants with respect thereto.

 

WHEREAS, the City of Kansas City, Missouri (the "City"), is a constitutional charter city and political subdivision of the state of Missouri (the "State"), duly created, organized and existing under and by the virtue of the Constitution and the laws of the State; and

 

WHEREAS, the City is authorized under the provisions of Article VI, Section 26, of the Constitution of Missouri, 1945, as amended, and Section 95.115 et seq., RSMo. 1994, as amended, to incur indebtedness and issue and sell general obligation bonds of the City to evidence such indebtedness for any lawful purpose upon obtaining the approval of at least four-sevenths of the qualified voters of the City voting on the question to incur indebtedness at the general municipal election day or the primary or general election; and

 

WHEREAS, a special election was held in the City at the general election on Tuesday, November 8, 1988, on the following question:

 

PROPOSITION NO. 2: Shall the City of Kansas City, Missouri issue $30,000,000.00 of bonds for the purpose of constructing, extending and improving its sewers, such bonds to be an indebtedness of the City, and the costs of such projects to be assessed against the property benefited?

 

(the construction, extension and improvement of the City's sewers to be referred to in this Ordinance as the "Sewer Improvements"); and

 

WHEREAS, the votes cast at the election on such question were duly canvassed as provided by law, and it was found and declared that more than four-sevenths of the qualified voters of the City voting at such election on such question voted in favor of the issuance of the bonds, the vote on such question having been 95,401 votes for the issuance of the bonds and 41,959 votes against the issuance of the bonds; and

 

WHEREAS, of the $30,000,000.00 of bonds authorized to be issued by the election, the City has previously issued $9,115,000.00 of bonds, leaving $20,885,000.00 of bonds that may be issued under the authority established by the election; and

 

WHEREAS, the City needs to issue $8,000,000.00 of bonds to pay the cost of certain Sewer Improvements with such bonds are to be sold at competitive public sale; and

 

WHEREAS, the City has selected A.G. Edwards & Sons, Inc. and The Knight Group, Inc. to serve as financial advisor; Craft Fridkin & Rhyne and Logan Riley Carson & Kaup, L.C. to serve as bond counsel; Mercantile Bank to serve as paying agent; and Financial Printing Resource, Inc. to serve as printer for this issue; and

 

WHEREAS, it is necessary to authorize the issuance and delivery of such bonds; NOW, THEREFORE,

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

 

ARTICLE I

DEFINITIONS

 

Section 101. Definitions of Words and Terms.

 

"Bond Counsel" means any attorney or firm of attorneys whose expertise in matters relating to the issuance of obligations by states and their political subdivisions is nationally recognized and acceptable to the City.

 

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

 

"Bonds" means the City's General Obligation Sewer Special Assessment Bonds, Series 1996A, in the aggregate principal amount of $8,000,000, and dated April 1, 1996.

 

"Business Day" means a day other than a Saturday, Sunday or holiday on which the Paying Agent is scheduled in the normal course of its operations to be open to the public for conduct of its banking operation.

 

"City" means the city of Kansas City, Missouri.

 

"Co-Bond Counsel" means Logan Riley Carson & Kaup, L.C., Kansas City, Missouri, and Overland Park, Kansas, and Craft Fridkin & Rhyne, Kansas City, Missouri.

 

"Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations proposed or promulgated thereunder of the United States Department of the Treasury.

 

"Costs of Issuance" shall mean all costs of issuing the Bonds, including all publication, printing, signing and mailing expenses, registration fees, all legal fees and expenses of Co-Bond Counsel and other legal counsel, all fees and expenses of the Financial Advisor, accounting expenses incurred in connection with determining the yield on the Bonds or investment of the proceeds thereof, and all expenses incurred in connection with receiving ratings on the Bonds.

 

"Financial Advisor" means A.G. Edwards and Sons, Inc., and The Knight Group, Inc..

 

"Final Official Statement" means the final official statement prepared by the City or its representatives in connection with the sale of the Bonds and delivered to the original purchaser.

 

"General Debt and Interest Fund" means the debt service fund established in the financial accounts and records of the City and maintained and administered by the Director of Finance for the retirement of general obligation bonds of the City.

 

"Interest Payment Dates" means May 15 and November 15 of each year, commencing November 15, 1996, and ending on the date the principal of the Bonds and the interest thereof are paid in full or provision is made for such payment.

 

"Maturity" when used with respect to any Bond means the date on which the principal of such Bond becomes due and payable as provided, whether at the Stated Maturity or call for redemption or otherwise.

 

"Ordinance" means the ordinance passed by the Council of the City authorizing the issuance of the Bonds.

 

"Outstanding" means as of a particular date of determination, all Bonds executed, authenticated and delivered under the provisions of this Ordinance, except:

 

A. Bonds canceled by the Paying Agent or delivered to the Paying Agent for cancellation pursuant to this Ordinance;

 

B. Bonds for the payment or redemption of which moneys or investments have been deposited in accordance with Article XII of this Ordinance; and

 

C. Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered pursuant to this Ordinance.

 

"Owner or Owners" when used with respect to any Bond means the Person in whose name such Bond is registered on the registration books of the Bond Register.

 

"Paying Agent" means Office of the Director of Finance of the City or a bank or trust company duly appointed as paying agent for the Bonds under the provisions of this Ordinance and any successors and assigns.

 

"Person" means any natural person, corporation, partnership, joint venture, association, firm, joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision or other public body.

 

"Preliminary Official Statement" means the Preliminary Official Statement used in connection with the competitive public sale of the Bonds which was prepared by the City and its advisors and distributed to potential purchasers of the Bonds before the Final Official Statement, as described in the SEC Rule, was made available.

 

"Rebate Fund" means the fund by that name created in Section 501.

 

"Record Dates" for the interest payable on any Interest Payment Date means the first day (whether or not a Business Day) of the month preceding such Interest Payment Date.

 

"Redemption Date" when used with respect to any Bond to be redeemed means the date fixed for such redemption pursuant to the terms of this Ordinance.

 

"Redemption Price" when used with respect to any Bond to be redeemed means the price at which such Bond is to be redeemed pursuant to the terms of this Ordinance.

 

"SEC Rule" means the Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (17 CFR part 240, 240. 15c2-12).

 

"Sewer Improvements" means the construction, extension and improvement of the City's sewers.

 

"Sewer Improvement Fund" means the fund by that name referred to in Section 601 of this Ordinance.

 

"State" means the state of Missouri.

 

"Stated Maturity" means the date specified in Section 202 of this Ordinance as the fixed date on which the principal of such Bond is due and payable.

 

 

ARTICLE II

DETAILS OF THE BONDS

 

Section 201. Authorization of the Bonds. The Bonds shall be issued in the principal amount of $8,000,000.00 for the purpose of providing funds to pay the costs of the Sewer Improvements including the Costs of Issuance.

 

Section 202. Description of the Bonds. The Bonds shall consist of fully registered bonds in the denomination of $5,000.00 or any integral multiple thereof and shall be numbered in such manner as the Paying Agent shall determine. All of the Bonds shall be dated April 1, 1996, shall become due on the Stated Maturities as follows:

 

Stated Maturity Principal Stated Maturity Principal May 15 Amount May 15 Amount

 

1997 $365,000.00 2005 $545,000.00

1998 390,000.00 2006 575,000.00

1999 410,000.00 2007 600,000.00

2000 435,000.00 2008 630,000.00

2001 460,000.00 2009 660,000.00

2002 480,000.00 2010 695,000.00

2003 500,000.00 2011 730,000.00

2004 525,000.00

 

The Bonds shall bear interest at rates to be established by an ordinance of the City which interest shall accrue from the most recent Interest Payment Date to which interest has been paid or provided for or, if no interest has been paid, from April 1, 1996. Interest shall be payable on the Interest Payment Dates.

 

Section 203. Designation of Paying Agent. Either a commercial bank located in the City and designated by the Director of Finance or the Director of Finance may be designated as the Paying Agent for the Bonds. The Paying Agent, if a commercial bank, may be removed at any time without cause by the City. The Paying Agent shall furnish a list of the Owners to the City within 10 days after receipt of a written request for such list from the City.

 

Section 204. Method and Place of Payment of the Bonds. The principal of, or Redemption Price, if any, and interest on the Bonds shall be payable in any coin or currency of the United States of America which, on the respective dates of payment, is legal tender for the payment of public and private debts.

 

The principal or Redemption Price of each Bond shall be paid at Maturity to the Person in whose name such Bond is registered on the Bond Register at Maturity, upon presentation and surrender of such Bond at the principal office of the Paying Agent in the City.

 

The interest payable on each Bond on any Interest Payment Date shall be paid to the Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (a) by check or draft mailed by the Paying Agent to the address of such Owner shown on the Bond Register; (b) at such other address as is furnished to the Paying Agent in writing by such Owner; or (c) in the case of an interest payment to any Owner of $1,000,000.00 or more in aggregate principal amount of Bonds, by wire transfer to such Owner upon written notice given to the Paying Agent by such Owner, not less than 15 days prior to the Record Date for such interest, containing the wire transfer address (which shall be in the continental United States) to which such Owner wishes to have such wire directed.

 

The Paying Agent shall keep a record of payment of principal and Redemption Price of and interest on all Bonds and, if the Paying Agent is a bank, the Paying Agent at least annually shall forward a copy or summary of such records to the Director of Finance of the City.

 

Section 205. Method of Execution and Authentication of the Bonds. The Bonds shall be executed for and on behalf of the City by the manual or facsimile signature of the Mayor, attested by the manual or facsimile signature of the City Clerk, countersigned by the manual or facsimile signature of the Director of Finance and the seal of the City shall be affixed or imprinted on the Bonds. In the event that any of the previously mentioned officers shall cease to hold such offices before the Bonds are delivered, the Bonds may be delivered as though the officers had not ceased to hold office, and such signatures appearing on the Bonds shall be valid and sufficient for all purposes as if they had remained in office until such delivery.

 

The Bonds shall not be valid obligations under the provisions of the Ordinance until authenticated by the Paying Agent or an authorized representative of the Paying Agent by execution of the certificate of authentication appearing on each Bond. Such executed certificate of authentication on any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Ordinance. The certificate of authentication on any Bond shall be deemed to have been duly executed if signed by any authorized officer or employee of the Paying Agent, but it shall not be necessary that the same representative of the Paying Agent execute the certificate of authentication on all of the Bonds.

 

Section 206. Registration, Transfer and Exchange of Bonds. The City covenants that, as long as any of the Bonds remain Outstanding, it will cause the Bond Register to be kept at the office of the Paying Agent as provided. Each Bond when issued shall be registered in the name of the Owner on the Bond Register.

 

Bonds may be transferred and exchanged only on the Bond Register as provided in this Section. Upon surrender of any Bond at the principal office of the Paying Agent, the Paying Agent shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange.

 

Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Paying Agent, executed by the Owner or by the Owner's authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Paying Agent shall authenticate and deliver Bonds in accordance with the provisions of this Ordinance. The City shall pay the fees and expenses of the Paying Agent for the registration, transfer and exchange of Bonds provided for by this Ordinance and the cost of printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Paying Agent, are the responsibility of the Owners of the Bonds.

 

The City and the Paying Agent shall not be required to issue, transfer or exchange any Bond selected for redemption, after the opening of business 15 days preceding the date of mailing of a notice of redemption applicable to the redemption of such Bonds.

 

The City and the Paying Agent may deem and treat the Person in whose name any Bond is registered on the Bond Register as the absolute Owner of such Bond, whether such Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price of and interest on the Bond and for all other purposes. All payments so made to any such Owner or upon the Owner's order shall be valid and effective to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City nor the Paying Agent shall be affected by any notice to the contrary.

 

Section 207. Cancellation and Destruction of Bonds Upon Payment. All Bonds that have been paid or redeemed or that otherwise have been surrendered to the Paying Agent, either at or before Maturity, shall be cancelled by the Paying Agent immediately upon the payment, redemption and surrender to the Paying Agent and subsequently destroyed in accordance with the customary practices of the Paying Agent. The Paying Agent shall execute a certificate in duplicate describing the Bonds so cancelled and destroyed and shall file an executed counterpart of such certificate with the City within 30 days of such action.

 

Section 208. Mutilated, Lost, Stolen or Destroyed Bonds. If any mutilated Bond is surrendered to the Paying Agent or the Paying Agent receives evidence to its satisfaction of the destruction, loss or theft of any Bond; and there is delivered to the City and the Paying Agent such security or indemnity as may be required by each of them, then, in the absence of notice to the City or the Paying Agent that such Bond has been acquired by a bona fide purchaser, the City shall execute and, upon the City's request, the Paying Agent shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond of the same Stated Maturity and of like tenor and principal amount. If any such mutilated, destroyed, lost or stolen Bond has become or is about to become due and payable, the City, in its discretion, may pay such Bond instead of issuing a new Bond.

 

Upon the issuance of any new Bond under this Section, the City may require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed and any other expenses (including the fees and expenses of the Paying Agent).

 

Every new Bond issued pursuant to this Section shall constitute a replacement of the prior obligation of the City, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Bonds. These provisions are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, stolen or destroyed Bonds.

 

Section 209. Delivery of the Bonds. The Mayor, City Clerk and Director of Finance are hereby authorized and directed to prepare and execute the Bonds in the manner set forth in this Ordinance, and, when duly executed and registered, to deliver the Bonds to the Paying Agent for authentication, and the Director of Finance is hereby authorized to deliver the Bonds to the original purchaser of the Bonds upon receipt by the City of the purchase price of the bonds which shall be not less than 100% of the principal amount of the Bonds plus accrued interest thereon to the date of their delivery.

 

Section 210. Temporary Bonds. Until definitive bonds are issued, the City may execute in the same manner as is provided in this Ordinance, and, upon the option of the City, the Paying Agent shall authenticate and deliver, in lieu of definitive bonds, and subject to the same provisions, limitations and conditions as the definitive bonds, one or more temporary bonds substantially of the tenor of the definitive Bonds in lieu of which such temporary bond or bonds are issued, in denominations authorized in Section 202 hereof, and with such omissions, insertions and corrections as may be appropriate to such temporary bonds. The City at its own expenses may prepare and execute and, upon the surrender of such temporary bonds for exchange upon the cancellation of such surrendered temporary bonds, the Paying Agent shall authenticate and, without charge to the Owner thereof, deliver in exchange therefor definitive bonds of the same principal amount and maturity as the temporary bonds tendered and in such authorized denominations as shall be requested by the Owners.

 

If the City shall authorize the issuance of the temporary bonds in more than one denomination, the Owner of any temporary bond or bonds may, at such Owner's option, surrender the same to the Paying Agent in exchange for another temporary bond or bonds of like principal amount and maturity of any other authorized denomination or denominations, and thereupon the City shall execute and the Paying Agent shall authenticate and, upon payment of any applicable taxes, fees and charges, shall delivery temporary bond or bonds of like principal amount and maturity in such other authorized denomination or denominations as shall be requested by such Owner.

 

All temporary bonds surrendered in exchange either for another bond or bonds or for a definitive bond or bonds shall be forthwith canceled by the Paying Agent.

 

 

ARTICLE III

REDEMPTION OF THE BONDS

 

Section 301. Optional Redemption. At the option of the City, Bonds maturing on May 15, 2007, and thereafter may be called for redemption and payment prior to maturity in whole or in part on May 15, 2006, or at any time thereafter at the Redemption Prices set forth below (expressed as percentages of the principal amount), plus accrued interest to the date of redemption:

 

Redemption Dates Redemption Price

May 15, 2006, to May 14, 2007 101.00%

May 15, 2007, to May 14, 2008 100.50%

May 15, 2008, and thereafter 100.00%

 

Section 302. Selection of Bonds to be Redeemed. The Bonds shall be redeemed only in the principal amount of $5,000.00 or any integral multiple thereof. When less than all of the Bonds are to be redeemed and paid prior to their Stated Maturity, the Bonds shall be redeemed in such manner and from such maturities as the City shall determine, Bonds of less than a full Stated Maturity to be selected by lot in units of $5,000.00.

 

In the case of a partial redemption of Bonds by lot when Bonds of denominations greater than $5,000.00 are then Outstanding, then for all purposes in connection with such redemption each $5,000.00 of face value shall be treated as though it were a separate Bond of the denomination of $5,000.00. If it is determined that one or more, but not all, of the $5,000.00 units of face value represented by any Bond is selected for redemption, then upon notice of intention to redeem such $5,000.00 unit or units, the Owner or the Owner's authorized agent shall present and surrender such Bond to the Paying Agent:

 

(a) for payment of the redemption price (including the redemption, if any, and interest to the date fixed for redemption) of the $5,000.00 unit or units of face value called for redemption; and

 

(b) for exchange, without charge to the Owner, for a new Bond(s) of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any Bond of a denomination greater than $5,000.00 shall fail to present such Bond as described above, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of the amount called for redemption (and to that extent only).

 

Section 303. Notice of Redemption. Unless waived by any Owner of Bonds to be redeemed, if the City shall call any Bonds for redemption and payment prior to the maturity, notice of any such redemption shall be given by the Paying Agent on behalf of the City by mailing a copy of a redemption notice by United States first-class mail, postage prepaid, at least 30 days prior to the date fixed for redemption to the original purchaser of the Bonds and to the Owners of the Bonds at the address shown on the Bond Register or at such other address as is furnished in writing by such Owner to the Paying Agent.

 

All official notices of redemption shall be dated and shall state:

 

(a) the Redemption Date;

 

(b) the Redemption Price;

 

(c) the Bond number;

 

(d) the date of issue of the Bonds as originally issued;

 

(e) the principal amount;

 

(f) the rate of interest borne by each Bond being redeemed;

 

(g) CUSIP number and maturity;

 

(h) if less than all Outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed;

 

(i) that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion called for redemption, and that interest shall cease to accrue from and after the Redemption Date; and

 

(j) the place where such Bonds are to be surrendered for payment of the Redemption Price, which place of payment shall be the principal office of the Paying Agent.

 

On or prior to any redemption date, the City shall deposit with the Paying Agent an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on that date. Upon surrender of such Bonds for redemption in accordance with the notice, such Bonds shall be paid by the Paying Agent at the Redemption Price. Installments of interest due on or prior to the Redemption Date shall be payable as provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Owner a new Bond or Bonds of the same maturity in the amount of the unpaid principal. All Bonds which have been redeemed shall be canceled and destroyed by the Paying Agent and shall not be reissued.

 

Section 304. Effect of Call for Redemption. Whenever any Bond is called for redemption and payment as provided in this Article, all interest on such Bond shall cease from and after the date for which such call is made, provided funds are available for its payment at the Redemption Price specified. Neither the failure of any Owner to receive any notice so mailed nor any defect therein will affect the sufficiency of the proceedings for redemption of any Bond nor the cessation of accrual of interest thereon.

 

ARTICLE IV

FORM OF THE BONDS

 

Section 401. Form of the Bonds. The Bonds shall be contain information substantially in the form set forth in Exhibit A attached to this Ordinance.

 

 

ARTICLE V

ESTABLISHMENT OF FUNDS AND ACCOUNTS

 

Section 501. Creation of Funds. There is hereby created and ordered to be established among the financial accounts and records of the City the following special funds in the name of the City to be designated as follows:

 

(a) "The City of Kansas City, Missouri, Sewer Improvement Fund, Series 1996A"; and

 

(b) "The City of Kansas City, Missouri, Rebate Fund - General Obligation Sewer Special Assessment Bonds, Series 1996A."

 

There has been previously created in the financial books, records and accounts of the City the following funds:

 

(a) Sewer Special Assessment Fund; and

 

(b) General Debt and Interest Fund.

 

The Director of Finance is hereby authorized to establish such accounts within the Sewer Special Assessment Fund and the General Debt and Interest Fund as may be appropriate for the purpose of accounting for payment of principal of and interest on the Bonds.

 

 

ARTICLE VI

APPLICATION OF BOND PROCEEDS AND OTHER FUNDS

 

Section 601. Disposition of Bond Proceeds. The proceeds of the Bonds, upon issuance and delivery, shall be deposited as follows:

 

(a) In the Sewer Special Assessment Fund, a sum equal to the accrued interest and any premium paid on the Bonds.

 

(b) The balance of the proceeds of the Bonds shall be deposited into the Sewer Improvement Fund.

 

Section 602. Application of Moneys in the Sewer Improvement Fund. Moneys in the Sewer Improvement Fund shall be used by the City solely for the purpose of paying the Costs of Issuance and the cost of constructing, extending and improving the Sewer Improvements in accordance with the plans and specifications developed and prepared by the Director of Public Works of the City and filed in the office of the City Clerk.

 

The Director of Finance shall make withdrawals from the Sewer Improvement Fund only upon duly authorized and executed order of the Council therefor accompanied by a certificate executed by the Director of Public Works that such payment is being made for a purpose within the scope of this Ordinance and that the amount of such payment represents only the contract price of the property, equipment, labor, materials or service being paid for or, if such payment is not being made pursuant to an express contract, that such payment is not in excess of the reasonable value thereof.

 

Section 603. Surplus in the Sewer Improvement Fund. All moneys remaining in the Sewer Improvement Fund after the completion of the Sewer Improvements shall be transferred immediately to the Sewer Special Assessment Fund.

 

ARTICLE VII

PAYMENT OF THE BONDS

 

Section 701. Security for Bonds. The Bonds shall be general obligations of the City payable as to both principal and interest from special assessments levied against the property benefited from the Sewer Improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due.

 

Section 702. Levy and Collection of Annual Tax. For the purpose of providing for the payment of the principal of and interest on the Bonds as the same become due, there shall be levied annually special assessments upon all property benefited by the Sewer Improvements sufficient to pay the principal of and interest on the Bonds and, to the extent funds shall not be available or to the extent the amounts produced by such special assessments or from other sources shall not be sufficient to pay the principal of and interest on the Bonds as and when the same become due, there shall be levied upon all the taxable tangible property real and personal, within the City a direct ad valorem tax sufficient to produce the additional amounts required to pay such principal of and interest on the Bonds as and when the same become due.

 

The taxes and/or assessments above referred to shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the other taxes of the City are levied and collected. The proceeds derived from special assessments levied on property benefited by the Sewer Improvements shall be deposited in the Sewer Special Assessment Fund to be used solely to pay the principal of and interest on the Bonds as and when the same become due and payable and the fees and expenses of the Paying Agent. The proceeds derived from all other taxes levied and collected as hereinbefore provided shall be deposited in the General Debt and Interest Fund, shall be kept separate and apart from all other funds of the City and shall be used solely for the payment of the principal of and interest on the Bonds as and when the same shall become due and the fees and expenses of the Paying Agent.

 

If at any time such taxes and/or assessments are not collected in time to pay the principal of or interest on the Bonds when due, the Director of Finance is authorized and directed to pay the principal or interest out of the general funds of the City available for such purposes and to reimburse the general funds for money so expended when the taxes and/or assessments are collected.

 

Section 703. Application of Moneys in the General Debt and Interest Fund and Sewer Special Assessment Fund. All amounts paid and credited to the General Debt and Interest Fund and all amounts representing proceeds derived from special assessments levied against the property benefited by the Sewer Improvements paid and credited to the Sewer Special Assessment Fund shall be expended and used by the City for the sole purpose of paying the principal of, premium, if any, and interest on the Bonds as and when the same become due and paying the usual and customary fees and expenses of the Paying Agent.

 

Section 704. Transfer of Funds to Paying Agent. The Director of Finance is authorized and directed to withdraw from the General Debt and Interest Fund and from the Sewer Special Assessment Fund and forward to the Paying Agent sums sufficient to pay both principal of and premium, if any, and interest on the Bonds as and when the same become due, and also to pay the charges made by the Paying Agent for acting in such capacity in the payment of principal and interest on the Bonds, and the charges shall be forwarded to the Paying Agent over and above the amount of the principal of, premium, if any, and interest on the Bonds. If, through the lapse of time, or otherwise, the Owners of Bonds shall no longer be entitled to enforce payment of their obligations, it shall be the duty of the Paying Agent to return the funds to the City. All moneys deposited with the Paying Agent shall be deemed to be deposited in accordance with and subject to all of the provisions contained in the Ordinance.

 

Section 705. Surplus in General Debt and Interest Fund and Sewer Special Assessment Fund. Any moneys or investments remaining in the Sewer Special Assessment Fund after the retirement of the indebtedness for which the Bonds were issued shall be disbursed in accordance with the City Charter. Any moneys or investments remaining in the General Debt and Interest Fund after the retirement of the indebtedness for which the Bonds were issued and all other indebtedness of the City shall be transferred and paid into the general fund of the City.

 

 

ARTICLE VIII

DEPOSITS AND INVESTMENT OF FUNDS

 

Section 801. Deposits. Cash moneys in each of the funds and accounts created and established by this Ordinance shall be deposited in a bank or banks located in the City which are members of the Federal Deposit Insurance Corporation, and all such bank deposits shall be continuously and adequately secured by the banks holding such deposits as provided by the laws of the State and the City's Charter and Administrative Code. All moneys held in the funds and accounts created by this Ordinance shall be kept separate and apart from all other funds of the City so that there shall be no mingling of such funds with any other funds of the City.

 

Section 802. Investments. Moneys held in the funds and accounts created or established in conjunction with the issuance of the Bonds may be invested by the Director of Finance in bonds or other direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, having fixed redemption value or becoming due within five years from the date of purchase, or in such other obligations as may be permitted by law and the City's Charter and Administrative Code; provided, however, that no such investment shall be made for a period extending longer than to the date when the moneys invested may be needed for the purpose for which such fund or account was created. The City may pool moneys for investment purposes, except moneys held in the yield-restricted portion of any fund or account, which shall be recorded and accounted for separately. All earnings on any fund or account shall (except amounts required to be deposited into the Rebate Fund as provided by Section 803 of this Ordinance) accrue to and become a part of such fund or account. In determining the amount held in any fund or account under the provisions of the Ordinance, obligations of the United States government shall be valued at market value thereof.

 

Section 803. Deposits into and Application of Moneys in the Rebate Fund.

 

(a) There shall be deposited in the Rebate Fund such amounts as are required to be deposited pursuant to this Section and Article XII. All money at any time deposited in the Rebate Fund shall be held in trust, to the extent required to pay rebatable arbitrage to the federal government of the United States of America, and no Owner of any Bonds shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section, by the preceding Section and by Article XII.

 

(b) The City shall periodically determine the amounts subject to rebate under Section 148(f) of the Code, and the City shall make payments to the United States at the times and in the amounts determined under Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be applicable to the Bonds from time to time. Any moneys remaining in the Rebate Fund after redemption and payment of all of the Bonds and payment and satisfaction of any rebatable arbitrage, or provision made therefor, shall be withdrawn and released to the City.

 

(c) Notwithstanding any other provision of the Ordinance, including in particular this Article, the obligation to remit rebatable arbitrage to the United States and to comply with all other requirements of this Section, the preceding Section and Article XII shall survive the defeasance or payment in full of the Bonds.

 

(d) The City shall maintain records designed to show compliance with the provisions of this Section for at least six years after the payment of all of the Bonds.

 

 

ARTICLE IX

DEFAULT AND REMEDIES

 

Section 901. Remedies. The provisions of the Ordinance, including the covenants and agreements contained herein, shall constitute a contract between the City and the Owners of the Bonds. The Owner or Owners of not less than 25% in principal amount of the Bonds at the time Outstanding shall have the right, for the equal benefit and protection of all Owners of Bonds similarly situated:

 

(a) by mandamus or other suit, action or proceedings at law or in equity, to enforce the rights of such Owner or Owners against the City and its officers, agents and employees, and to require and compel duties and obligations required by the provisions of the Ordinance or by the Constitution and laws of the State;

 

(b) by suit, action or other proceedings in equity or at law, to require the City, its officers, agents and employees to account as if they were the trustees of an express trust; and

 

(c) by suit, action or other proceedings in equity or at law, to enjoin any acts or things which may be unlawful or in violation of the rights of the Owners of the Bonds.

 

Section 902. Limitation on Rights of Owners. The covenants and agreements of the City contained in this Ordinance and in the Bonds shall be for the equal benefit, protection, and security of the Owners of any or all of the Bonds, all of which Bonds shall be of equal rank and without preference or priority of one Bond over any other Bond in the application of the funds pledged to the payment of the principal of and the interest on the Bonds, or otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in this Ordinance. No one or more Owners secured shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for in this Ordinance, or to enforce any right hereunder, except in the manner provided, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Owners of such Outstanding Bonds.

 

Section 903. Remedies Cumulative. No remedy conferred upon the Owners is intended to be exclusive of any other remedy, but each such remedy shall be cumulative of and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred. No waiver of any default or breach of duty or contract by the Owner of any Bond shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies thereon. No delay or omission of any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence. Every substantive right and every remedy conferred upon the Owners of the Bonds by this Ordinance may be enforced and exercised from time to time and as often as may be deemed expedient. In case any suit, action or proceedings taken by any Owner on account of any default or to enforce any right or exercise any remedy shall have been discontinued or abandoned for any reason, or shall have been determined adversely to such Owner, then, and in every such case, the City and the Owners of the Bonds shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Owners shall continue as if no such suit, action or other proceedings had been brought or taken.

 

ARTICLE X

AMENDMENTS

 

Section 1001. Amendments. Except as set forth in this Ordinance, the provisions of the Bonds and the provisions of the Ordinance may be modified or amended at any time by the City with the written consent of the Owners of not less than 60% in aggregate principal amount of the Bonds authorized at the time Outstanding; provided, however, that no such modification or amendment shall permit or be construed as permitting the following modifications or amendments without the consent of 100% of the Owners:

 

(a) the extension of the maturity of the principal of any of the Bonds, or the extension of the maturity of any interest on any of the Bonds; or

 

(b) a reduction in the principal amount of any of the Bonds or the rate of interest; or

 

(c) a reduction in the aggregate principal amount of the Bonds.

 

The City may from time to time, without the consent of or notice to any of the Owners, provide for amendment to the Bonds or the Ordinance, for any one or more of the following purposes:

 

(a) To cure any ambiguity or formal defect or omission in the Ordinance or to make any other change not prejudicial to the Owners;

 

(b) To grant to or confer upon the Owners any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Owners; or

 

(c) To conform the Ordinance to the Code or future applicable federal law concerning tax-exempt obligations.

 

Section 1002. Written Evidence of Amendments. Every amendment or modification of a provision of the Bonds or of the Ordinance to which the written consent of the Owners is given as above provided shall be expressed in an ordinance of the City amending or supplementing the provisions of the Ordinance and shall be deemed to be a part of the Ordinance. It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification, if any. A certified copy of every such amendatory or supplemental ordinance, if any, and a certified copy of the Ordinance shall always be kept on file in the office of the City Clerk and shall be made available for inspection by the Owners of any Bond or prospective purchaser or Owners of any Bond authorized by the Ordinance.

 


ARTICLE XI DEFEASANCE

 

Section 1101. Defeasance. When all or any part of the Bonds or scheduled interest payments shall have been paid and discharged, then the requirements contained in this Ordinance and the pledge of the City's faith and credit and all other rights granted shall cease and determine as to such Bonds or interest payments. Bonds or scheduled interest payments shall be deemed to have been paid and discharged within the meaning of the Ordinance if there shall have been deposited with the Paying Agent or a bank or trust company located in the State and having full trust powers, at or prior to the Stated Maturity or Redemption Date of the Bonds, in trust for and irrevocably appropriated to such payment and discharge, moneys and/or direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America which, together with the interest to be earned on any such obligations, will be sufficient for the payment of the principal of the Bonds and interest accrued to the Stated Maturity or Redemption Date, as the case may be, or if default in such payment shall have occurred on such date, then to the date of the tender of such payments; provided always, that if any Bonds shall be redeemed prior to the Maturity thereof, (a) the City shall have elected to redeem such Bonds, (b) either notice of such redemption shall have been given, or the City shall have given irrevocable instructions to the Paying Agent to redeem such Bonds; and (c) the City has received the opinion of Bond Counsel that such deposit will not adversely affect the exclusion of the interest on the Bonds from gross income for federal tax purposes. Any moneys and obligations which at any time shall be deposited with the Paying Agent or other bank or trust company by or on behalf of the City, for the purpose of paying and discharging any of the Bonds, shall be and are hereby assigned, transferred and set over to the Paying Agent or other bank or trust company in trust for the respective Owners of the Bonds, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All moneys deposited with the Paying Agent or other bank or trust company shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Ordinance.

 

 

ARTICLE XII

TAX COVENANTS

 

Section 1201. General Covenants.

 

(a) The City covenants and agrees that (1) it will comply with all applicable provisions of the Code, including Sections 103 and 141 through 150, necessary to maintain the exclusion from gross income for federal income tax purposes of the interest on the Bonds and (2) it will not use or permit the use of any proceeds of Bonds or any other funds of the City not take or permit any other action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest on the Bonds. The City will, in addition, adopt such other ordinances or resolutions and take such other actions as may be necessary to comply with the Code and with all other applicable future laws, regulations, published rulings and judicial decisions, in order to ensure that the interest on the Bonds will remain excluded from federal gross income, to the extent any such actions can be taken by the City.

 

(b) The City covenants and agrees that (1) it will comply with all requirements of Section 148 of the Code to the extent applicable to the Bonds, (2) it will use the proceeds of the Bonds as soon as practicable and with all reasonable dispatch for the purposes for which the Bonds are issued; and (3) it will not invest or directly or indirectly use or permit the use of any proceeds of the Bonds or any other funds of the City in any manner, or take or omit to take any action, that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148(a) of the Code.

 

(c) The City covenants and agrees that it will not use any portion of the proceeds of the Bonds, including any investment income earned on such proceeds, directly or indirectly, in a manner that would cause any Bond to be a "private activity bond" within the meaning of Section 141(a) of the Code.

 

Section 1202. Rebate Covenants. The City covenants and agrees that it will pay or provide for the payment from time to time all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any Treasury Regulations applicable to the Bonds from time to time. This covenant shall survive payment in full or defeasance of the Bonds.

 

Section 1203. Survival of Covenants. The covenants contained in this Article shall remain in full force and effect notwithstanding the payment in full or defeasance of the Bonds pursuant to Article XII or any other provision of this Ordinance.

 

ARTICLE XIII

DISCLOSURE

 

Section 1301. Preliminary Official Statement and Final Official Statement. The form and content of the Preliminary Official Statement and the use and public distribution thereof in connection with the public sale of the Bonds is hereby ratified, confirmed and approved and the Director of Finance is hereby authorized to cause the Final Official Statement to be completed by supplementing, completing and amending the Preliminary Official Statement. The Director of Finance is hereby authorized to execute the Final Official Statement, and the use and public distribution of the Final Official Statement by the original purchaser of the Bonds in connection with the reoffering of the Bonds is hereby authorized and approved. The Preliminary Official Statement is "deemed final" by the City except for the omission of certain information as provided in the SEC Rule. The proper officials of the City are authorized to execute and deliver a certificate pertaining to the accuracy and adequacy of the information in the Preliminary Official Statement and the Final Official Statement.

 

Section 1302. Continuing Disclosure. The City covenants to enter into an undertaking for the benefit of the holders of the Bonds to provide continuing disclosure as required by paragraph (b)(5)(i) of the SEC Rule. The proper officials of the City are authorized to execute and deliver an agreement pertaining to the continuing disclosure requirement.

 

 

ARTICLE XIV

MISCELLANEOUS PROVISIONS

 

Section 1401. Severability. In case any one or more of the provisions of the Ordinance or of the Bonds issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of the Ordinance, or of the Bonds appertaining thereto, but the Ordinance and the Bonds shall be construed and enforced as if such illegal or invalid provision had not been contained. In case any covenant, stipulation, obligation or agreement contained in the Bonds or in the Ordinance shall for any reason be held to be in violation of law, then such covenant, stipulation, obligation or agreement shall be deemed to be the covenant, stipulation, obligation or agreement of the City to the full extent permitted by law.

 

Section 1402. Further Authority. The Mayor, City Clerk, Director of Finance and other officials of the City are further authorized and directed to execute any and all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of the Ordinance to make alterations, changes or additions in the agreements, statements, instruments and other documents herein approved, authorized and confirmed which they may approve and the execution or taking of such action shall be conclusive evidence of such necessity or advisability.

 

Section 1403. Governing Law. The Ordinance and the Bonds shall be governed exclusively by and construed in accordance with the applicable laws of the State.

 

Section 1404. Effective Date. This Ordinance shall take effect and be in full force from and 10 days after its passage.

 

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Approved as to form and legality:

 

 

 

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Assistant City Attorney