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Legislation #: 051163 Introduction Date: 9/15/2005
Type: Ordinance Effective Date: none
Sponsor: None
Title: Amending ordinances in connection with certain outstanding State Revolving Fund Program Bonds of the City and prescribing related matters.

Legislation History
DateMinutesDescription
9/15/2005 Filed by the Clerk's office
9/15/2005 Referred to Finance Committee
9/21/2005 Advance and Do Pass, Debate
9/22/2005 Passed

View Attachments
FileTypeSizeDescription
051163.pdf Authenticated 496K Authenticated
factsheet for SRF 2005 refunding ordinance.xls Fact Sheet 50K Fact Sheet
Legislative Note.xls Fiscal Note 40K Fiscal Note

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ORDINANCE NO. 051163

 

Amending ordinances in connection with certain outstanding State Revolving Fund Program Bonds of the City and prescribing related matters.

 

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, stormwater 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 Missouri 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) Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1998A, dated April 1, 1998, in the original principal amount of $9,200,000 (the Series 1998A Bonds), authorized by Ordinance No. 980253 passed on March 26, 1998 and Ordinance No. 980417 passed on April 9, 1998 (collectively, the Series 1998A Bond Ordinance); and

 

(ii) Sanitary Sewer System Revenue Bonds (State Revolving Fund Program) Series 2002J, dated October 1, 2002, in the original principal amount of $10,000,000 (the Series 2002J Bonds), authorized by Ordinance No. 021206 passed on October 10, 2002 and Ordinance No. 021304 passed on October 24, 2002 (the Series 2002J Bond Ordinance); and

 


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

 

(i) the Series 1998A Bonds with proceeds of the Authoritys Water Pollution Control and Drinking Water Revenue Bonds (State Revolving Funds Programs - Master Trust) Series 1998A (the Series 1998A Authority Bonds), issued pursuant to the Bond Indenture dated as of April 1, 1998, as amended (the Series 1998A Indenture), by and between the Authority and UMB Bank & Trust, N.A. (successor to State Street Bank and Trust Company of Missouri, N.A., as trustee, the Series 1998A Trustee); and

 

(ii) the Series 2002J Bonds with the proceeds of the Authoritys Water Pollution Control and Drinking Water Revenue Bonds (State Revolving Funds Programs - Master Trust) Series 2002B (the Series 2002B Authority Bonds), issued pursuant to the Bond Indenture dated as of November 1, 2002, as amended (the Series 2002B Indenture), by and between the Authority and UMB Bank, N.A., as trustee (the Series 2002B Trustee); and

 

WHEREAS, the Council of the City 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 1998A Authority Bonds and Series 2002B Authority Bonds and to amend the Series 1998A Bond Ordinance and the Series 2002J Bond Ordinance in order to provide for the credit of net interest savings resulting from the refunding of the Series 1998A Authority Bonds and Series 2002B Authority Bonds to the payments on the Series 1998A Bonds and the Series 2002J Bonds, to further amend the Series 1998A Ordinance and the Series 2002J 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 1998A Bond Ordinance Amendments. Subject to the requirement of paragraph (e) of Section 101A below, in consideration of the Citys receipt of the net savings resulting from the refunding of certain Series 1998A 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 1998A Bond Ordinance No. 980253 and Ordinance No. 980417 are amended enacting a new section, to be inserted after Section 101 in each ordinance, and to read as follows. Terms not otherwise defined in this Section have the meanings set forth in the Series 1998A Bond Ordinance.

 

Section 101A. 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 and Drinking Water Refunding Revenue Bonds (State Revolving Funds Programs) Series 2005B of the Authority.

 

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

 

(b) Optional Redemption.

 

(i) The Director of Finance is authorized and directed to provide written instructions to the Trustee directing the optional redemption of the Series 1998A Authority Bonds allocable to the City which are being refunded by the Authority (the Series 1998A Refunded Authority Bonds). The initial schedule of the Series 1998A Refunded Authority Bonds is set forth in Schedule 1. The Director of Finance is authorized to approve a final schedule of Series 1998A Refunded Authority Bonds and authorize the Authority to redeem the Series 1998A Refunded Authority Bonds on the redemption date for the Series 1998A 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 1998A Refunded Authority Bonds is attached will be conclusive evidence of approval of the final schedule.

 

(ii) 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 1998A Refunded Authority Bonds (the Non-refundable Bonds). The initial schedule of the Series 1998A Non-refundable Bonds is set forth in Schedule 2. The Director of Finance is authorized to approve a final schedule of Series 1998A Non-refundable Bonds. The signature of the Director of Finance to a certificate to which the final schedule of Series 1998A Non-refundable Bonds is attached will be conclusive evidence of approval of the final schedule.

 

(iii) 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 1998A Refunded Authority Bonds.

 

(iv) Sections 203A, 302 and 904 of the Series 1998A Bond Ordinance, including the provisions relating to authorized denominations of the Bonds, which will be integral multiples of $1, are amended in accordance with this subsection (b).

 

(c) Application of Moneys in Funds and Accounts. Section 602(a)(2)(A) of the Series 1998A Bond Ordinance is amended by deleting clauses (I) and (II) and inserting in lieu thereof the following:

 

(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 Authority Refunding Bonds Trustee pursuant to the Indenture, an amount equal to the balances will be 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 Reserve Account for the current Interest Period and (b) actual investment earnings in the Construction Account and the Reserve Account (less the earnings in the Reserve Account projected pursuant to subclause (a)) for the prior Interest Period, an amount equal to the projected earnings and actual earnings will be credited in equal installments against the monthly deposits due prior to the next Interest Payment Date; and

 

(d) Parity Lien Bonds. Section 904 of the Series 1998A Bond Ordinance is amended and restated 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 and any Outstanding Parity Bonds. 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 (1)(d) will be deemed to modify the limitations of Section 1(b) of this Ordinance.

 

(e) Savings Requirement. The provisions of this Section 1 are subject to the requirements of this paragraph (e). The amendments under this Section 1 take effect upon notice to the Council from the Director of Finance that she has received evidence (in form and substance satisfactory to her) that the present value of the debt service savings to the City resulting from the refunding of the Series 1998A Refunded Authority Bonds is not less than 3.0% of the aggregate principal amount of the Series 1998A Refunded Authority Bonds. The present value of the debt service savings to the City will be calculated as the sum of the present values, as of the expected delivery date of the Authority Refunding Bonds, of all payments to be credited to the City under the Series 1998A Indenture as a result of the refunding, using a discount rate equal to the yield on the Authority Refunding Bonds calculated in accordance with Section 148 of the Internal Revenue Code (the arbitrage yield), a 360-day year consisting of twelve 30-day months and semiannual compounding.

 

Section 2. Series 2002J Bond Ordinance Amendments. Subject to the requirement of paragraph (d) of Section 101A below, in consideration of the Citys receipt of the net savings resulting from the refunding of certain Series 2002B 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 2002J Bond Ordinance No. 021206 and Ordinance No. 021304 are amended by enacting a new section to be inserted after Section 101 in each ordinance, and to read as follows. Terms not otherwise defined in this Section have the meanings set forth in the Series 2002J Bond Ordinance.

 

Section 101A. 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 and Drinking Water Refunding Revenue Bonds (State Revolving Funds Programs) Series 2005B of the Authority.

 

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

 

(b) Optional Redemption.

 

(i) The Director of Finance is authorized and directed to provide written instructions to the Trustee directing the optional redemption of the Series 2002B Authority Bonds allocable to the City which are being refunded by the Authority (the Series 2002B Refunded Authority Bonds). The initial schedule of the Series 2002B Refunded Authority Bonds is set forth in Schedule 1. The Director of Finance is authorized to approve a final schedule of Series 2002B Refunded Authority Bonds and authorize the Authority to redeem the Series 2002B Refunded Authority Bonds on the redemption date for the Series 2002B 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 2002B Refunded Authority Bonds is attached will be conclusive evidence of approval of the final schedule.

 

(ii) 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 2002B Refunded Authority Bonds (the Series 2002J Non-refundable Bonds). The initial schedule of the Series 2002J Non-refundable Bonds is set forth in Schedule 2. The Director of Finance is authorized to approve a final schedule of Series 2002J Non-refundable Bonds. The signature of the Director of Finance to a certificate to which the final schedule of Series 2002J Non-refundable Bonds is attached will be conclusive evidence of approval of the final schedule.

 

(iii) 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 2002B Refunded Authority Bonds.

 

(iv) Sections 203A, 302 and 904 of the Series 2002J Bond Ordinance, including the provisions relating to authorized denominations of the Series 2002J Bonds, which will be integral multiples of $1, are amended in accordance with this subsection (b).

 

(v) In addition to the current obligation of the City to pay to the Series 2002B Trustee arbitrage rebate and, if the City fails to calculate arbitrage rebate, the costs of calculating arbitrage rebate in connection with the Series 2002B Authority Bonds, the City will pay to the Series 2002B 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 2002B Trustee and the Authority Refunding Bonds Trustee in connection with the calculation of arbitrage rebate which results from any remaining balance in the Citys Construction Account held under the Series 2002B Indenture as of January 1, 2006.

 

(c) Application of Moneys in Funds and Accounts. Section 602(a)(2)(A) of the Series 2002J Bond Ordinance is amended by deleting clauses (I) and (II) and inserting in lieu thereof the following:

 

(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 Authority Refunding Bonds Trustee pursuant to the Indenture, an amount equal to the balances will be 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 Reserve Account for the current Interest Period and (b) actual investment earnings in the Construction Account and the Reserve Account (less the earnings in the Reserve Account projected pursuant to subclause (a)) for the prior Interest Period, an amount equal to the projected earnings and actual earnings will be credited in equal installments against the monthly deposits due prior to the next Interest Payment Date; and

 

(d) Savings Requirement. The provisions of this Section 2 are subject to the requirements of this paragraph (d). The amendments under this Section 2 will take effect upon notice to the Council from the Director of Finance that she has received evidence (in form and substance satisfactory to her) that the present value of the debt service savings to the City resulting from the refunding of the Series 2002B Refunded Authority Bonds is not less than 3.0% of the aggregate principal amount of the Series 2002B Refunded Authority Bonds. The present value of the debt service savings to the City will be calculated as the sum of the present values, as of the expected delivery date of the Authority Refunding Bonds, of all payments to be credited to the City under the Series 2002B Indenture as a result of the refunding, using a discount rate equal to the yield on the Authority Refunding Bonds calculated in accordance with Section 148 of the Internal Revenue Code (the arbitrage yield), a 360-day year consisting of twelve 30-day months and semiannual compounding.

 

Section 3. 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.

 

Section 4. Effective Date. This Ordinance will take effect and be in full force and effect ten days after its passage.

 

_____________________________________________

 

Approved as to form and legality:

 

___________________________________

Heather A. Brown

Assistant City Attorney


SCHEDULE 1

 

INITIAL SCHEDULE OF SERIES 1998A REFUNDED AUTHORITY BONDS

(KANSAS CITY SERIES 1998A)

 

Maturity Date Principal Amount

 

January 1, 2013

$ 775,000

January 1, 2019

3,290,000

 

 

 

INITIAL SCHEDULE OF SERIES 2002B REFUNDED AUTHORITY BONDS

(KANSAS CITY SERIES 2002J)

 

Maturity Date Principal Amount

 

July 1, 2015

$400,000

July 1, 2016

430,000

July 1, 2017

455,000

July 1, 2018

485,000

July 1, 2019

515,000

 

 


SCHEDULE 2

 

INITIAL SCHEDULE OF SERIES 1998A NON-REFUNDABLE BONDS

 

Maturity or Sinking

Fund Redemption Date Principal Amount

 

January 1, 2012

$365,000

January 1, 2013

410,000

January 1, 2014

435,000

January 1, 2015

480,000

January 1, 2016

525,000

January 1, 2017

565,000

January 1, 2018

620,000

January 1, 2019

665,000

 

 

INITIAL SCHEDULE OF SERIES 2002J NON-REFUNDABLE BONDS

 

Maturity or Sinking

Fund Redemption Date Principal Amount

 

July 1, 2015

$400,000

July 1, 2016

430,000

July 1, 2017

455,000

July 1, 2018

485,000

July 1, 2019

515,000

 

 

 


 

 

 

 

CERTIFICATE OF THE CITY CLERK

 

 

I, , Deputy City Clerk of the City of Kansas City, Missouri, hereby certify the attached is a true and correct copy of:

 

Ordinance No. 05____ [**Committee Substitute**]

 

Which was passed by the City Council September __, 2005 and effective ten days after passage.

 

The above appears in records and is on file in the Office of the City Clerk, 25th Floor, City Hall, Kansas City, Missouri, and has not been amended and is in full force and effect as of this date.

 

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed the seal of the City on this ____ day of November, 2005.

 

 

Millie Crossland

City Clerk

 

 

By:

 

CONSENT OF AUTHORITY TO

ORDINANCE NO. 05____

 

 

The State Environmental Improvement and Energy Resources Authority hereby approves Committee Substitute for Ordinance No. 05____ adopted by the governing body of the City of Kansas City, Missouri on September __, 2005.

 

Dated this ____ day of October, 2005.

 

 

STATE ENVIRONMENTAL IMPROVEMENT AND ENERGY RESOURCES AUTHORITY

 

 

By:

Chairman


CONSENT OF SERIES 1998A TRUSTEE TO ORDINANCE NO. 05____

 

UMB Bank & Trust, N.A., as trustee and holder by assignment from the State Environmental Improvement and Energy Resources Authority of all of the outstanding aggregate principal amount of the Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1998A of the City of Kansas City, Missouri, hereby approves Ordinance No. 05____ adopted by the governing body of the City of Kansas City, Missouri on September __, 2005.

 

Dated this ____ day of October, 2005.

 

UMB BANK & TRUST, N.A., as Series 1998A Trustee

 

 

By

Title:

 

CONSENT OF SERIES 2002B TRUSTEE TO ORDINANCE NO. 05____

 

UMB Bank, N.A., as trustee and holder by assignment from the State Environmental Improvement and Energy Resources Authority of all of the outstanding aggregate principal amount of the, the Sanitary Sewer System Revenue Bonds (State Revolving Fund Program) Series 2002J of the City of Kansas City, Missouri, hereby approves Ordinance No. 05____ adopted by the governing body of the City of Kansas City, Missouri on September __, 2005.

 

Dated this ____ day of October, 2005.

 

UMB BANK, N.A., as Series 2002B Trustee

 

 

By

Title: