KC Skyline

City Clerk Web Search

Search the Ordinances:

Legislation #: 960253 Introduction Date: 3/14/1996
Type: Ordinance Effective Date: none
Sponsor: None
Title: Authorizing the issuance of $24,000,000.00 principal amount of Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1996A, of the City of Kansas City, Missouri, for the purpose of extending and improving the City's sewerage system; prescribing the form and details of said Bonds and the covenants and agreements made by the City to facilitate and protect the payment thereof; providing for the collection, segregation and application of the revenues of the sewerage system of the City for the purpose of paying the cost of operation and maintenance of said system, paying the principal of and interest on said Bonds, and providing reasonable and adequate reserve funds; and authorizing a non-interest bearing loan from The Water and Wastewater Loan Fund of the State of Missouri and prescribing other matters relating thereto.

Legislation History
DateMinutesDescription
3/14/1996

Prepare to Introduce

3/14/1996

Referred Finance & Administration Committee

3/20/1996

Do Pass as a Committee Substitute

3/21/1996

Assigned to Third Read Calendar

3/28/1996

Passed as Substituted


View Attachments
FileTypeSizeDescription
No attachment(s) found

Printer Friendly Version

 

COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 960253

 

Authorizing the issuance of $24,000,000.00 principal amount of Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1996A, of the City of Kansas City, Missouri, for the purpose of extending and improving the City's sewerage system; prescribing the form and details of said Bonds and the covenants and agreements made by the City to facilitate and protect the payment thereof; providing for the collection, segregation and application of the revenues of the sewerage system of the City for the purpose of paying the cost of operation and maintenance of said system, paying the principal of and interest on said Bonds, and providing reasonable and adequate reserve funds; and authorizing a non-interest bearing loan from The Water and Wastewater Loan Fund of the State of Missouri and prescribing other matters relating thereto.

 

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

 

WHEREAS, the City now owns and operates an entire sewerage plant and system for the collection, treatment and disposal of sewage, to serve the needs of the City and its inhabitants and others, including all appurtenances and facilities connected therewith or relating thereto, together with all extensions, improvements, additions and enlargements thereto hereafter made or acquired by the City (the "System"); and

 

WHEREAS, the City desires to make extensions and improvements to the System to be financed in whole or in part by the issuance, pursuant to this Ordinance, of its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1996A (the "Bonds") in the Original Principal Amount as set forth in Exhibit A hereto; and

 

WHEREAS, in order to provide for the most cost effective financing of such extensions and improvements the City desires to participate 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"); 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 System, provided that the cost of operation and maintenance thereof and the principal of and interest on such revenue bonds shall be payable solely from the income and revenues derived by the City from the ownership and operation of the System (the "Revenues"); and

 

WHEREAS, pursuant to the authority of the Act, an election was duly held in the City on March 8, 1988, for the purpose of submitting to the qualified electors of the City the following question:

 

 

PROPOSITION NO. 10

 

Shall the City of Kansas City, Missouri, issue its sewer system revenue bonds in the principal amount of $66,000,000 for the purpose of paying the cost of extending and improving the sewer system of the City, including the construction of sewage treatment and disposal facilities, the principal of and interest on said sewer revenue bonds to be payable solely from the revenues derived by the City from the operation of its sewer plant and system, including all future improvements and extensions thereto?

 

and it was found and determined that more than a majority of the qualified electors of the City voting on the question had voted in favor of the issuance of said revenue bonds for the purpose aforesaid, the vote on said question having been 46,479 votes for said question to 30,161 votes against said question; and

 

WHEREAS, the Council of the City has caused plans and specifications for said extensions and improvements and an estimate of the cost thereof to be made by the City's Consulting Engineer (as herein defined) and the same are hereby accepted and approved and are on file in the office of the City Clerk, the amount of said estimated cost being not less than $24,000,000; and

 

WHEREAS, after a competitive selection process, the City has retained the Hardwick Law Firm and Gilmore & Bell, P.C. to serve as bond counsel for this issue; and

 

WHEREAS, $19,765,000.00 of the bonds so authorized have heretofore been issued and the City hereby finds and determines that, in order to provide funds for said purpose, it is necessary and advisable and in the best interest of the City and of its inhabitants to issue $24,000,000.00 of the bonds so authorized, and to provide the remainder of said estimated costs which may be required from subsequent issues of bonds or funds of the City otherwise available; and

 

WHEREAS, the City has issued its Sewerage System Refunding and Improvement Revenue Bonds, Series 1992, dated March 1, 1992, in the original principal amount of $37,340,000.00, of which $28,250,000.00 remains outstanding as of the date of approval of this Ordinance (the "Series 1992A Bonds"), authorized by Committee Substitute for Ordinance No. 911537 passed and approved on January 30, 1992 (the "Series 1992A Ordinance"); and

 

WHEREAS, the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1992B, dated June 1, 1992, in the original principal amount of $1,265,000.00, of which $1,195,000.00 remains outstanding as of the date of approval of this Ordinance (the "Series 1992B Bonds"), authorized by Committee Substitute for Ordinance No. 920636 passed and approved on June 4, 1992 and Committee Substitute for Ordinance No. 920681 passed and approved on June 11, 1992 (collectively, the "Series 1992B Ordinance").

 

WHEREAS, the City has issued its Sewerage System Revenue Bonds (State Revolving Fund Program) Series 1995A, dated April 1, 1995, in the original principal amount of $18,000,000.00, of which $17,950,000.00 remains outstanding as of the date of approval of this Ordinance (the "Series 1995A Bonds", the Series 1992A Bonds, the Series 1992B Bonds and the Series 1995A Bonds collectively referred to herein as the "Outstanding Parity Bonds"), authorized by Committee Substitute for Ordinance No. 950353 passed and approved on April 13, 1995 and Committee Substitute for Ordinance No. 950516 passed and approved on April 20, 1995 (collectively, the "Series 1995A Ordinance", the Series 1992A Ordinance, the Series 1992B Ordinance and the Series 1995A Ordinance collectively referred to herein as the "Outstanding Parity Bond Ordinance"); and

 

WHEREAS, the City does not have outstanding any other bonds or other obligations payable from the Revenues save and except the Outstanding Parity Bonds; and

 

WHEREAS, under the provisions of the Outstanding Parity Bond Ordinance, the City may issue additional bonds payable out of the Revenues which are on a parity with the Outstanding Parity Bonds, in each case only if certain conditions are met, and it is hereby found and determined that it is necessary and advisable and in the best interest of the City and of its inhabitants that sewerage system revenue bonds be issued and secured in the form and manner as hereinafter provided to provide funds for such purposes and be sold to the Authority under the SRF Program, subject to the conditions of the Outstanding Parity Bond Ordinance; NOW, THEREFORE,

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

ARTICLE I

 

DEFINITIONS

 

Section 101. 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 hereof.

 

"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 1996A 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.

 

"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" shall mean 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 ownership, 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 Engineer's reports, properly allocated share of charges for insurance, and all other expenses incident to the ownership and operation of the System, but excluding interest paid on System Revenue Bonds, depreciation and amortization charges, all general administrative expenses of the City which are not related to the ownership and 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" shall mean (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 hereof 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 account by that name created or ratified and confirmed by Section 501 of this Ordinance.

 

"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, 1996 between the Authority and the Trustee pursuant to which the Authority Bonds are issued.

 

"Interest Payment Date" means each January 1 and July 1, commencing January 1, 1997.

 

"Net Revenues Available for Debt Service" means, for the period of determination, all income and revenues derived by the City from the ownership and 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.

 

"Operation and Maintenance Account" means the fund or account created or ratified and confirmed by Section 501 of this Ordinance.

 

"Ordinance" means this Ordinance as from time to time amended and supplemented 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 cancelled 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 hereof; 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 hereof.

 

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

 

"Purchase Agreement" means the Purchase Agreement dated as of April 1, 1996, 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, 1996, by and among the City, the Authority and DNR.

 

"Sewer Fund" means the fund or account created or ratified and confirmed by Section 501 of this Ordinance.

 

"SRF Program Bonds" means the Bonds and any other System Revenue Bonds of the City issued in connection with the City's participation in the SRF Program.

 

"SRF Subsidy" means the amount of investment earnings which will accrue on the Reserve Account or Reserve Fund 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), provided the Reserve Security is equal to the Reserve Percentage of the principal amount of the SRF Program Bonds outstanding, the Reserve Account or Reserve Fund is invested in an investment agreement at a fixed interest rate during the calculation period and such earnings are reduced by the Administrative Fee payable to DNR. Administrative Fee, Reserve Account, Reserve Fund and Reserve Percentage as used in this definition shall have the respective meanings as set forth in the bond indentures pursuant to which the applicable Authority Program Bonds have been issued.

 

"State" means the State of Missouri.

 

"Surplus Account" means the fund or account created or ratified and confirmed by Section 501 of this Ordinance.

 

"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 ownership and operation of the System.

 

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

 

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

 

Section 102. Additional Provisions. Additional provisions are set forth in Exhibit A attached hereto and incorporated herein by this reference.

 

ARTICLE II

 

AUTHORIZATION OF BONDS

 

Section 201. Authorization of Bonds. There is hereby authorized and directed to be issued the Bonds of the City in the Original Principal Amount as set forth in Exhibit A for the purpose of extending and improving the System, as provided in this Ordinance.

 

Section 202. Security for Bonds. The Bonds shall be special obligations of the City payable solely from, and secured as to the payment of principal and interest by a pledge of, the net income and revenues derived by the City from the ownership and operation of the System, and the taxing power of the City is not pledged to the payment of the Bonds either as to principal or interest. The Bonds shall not be or constitute a general obligation of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction.

 

The Bonds are issued on a parity with the Outstanding Parity Bonds.

 

Section 203. Description of Bonds. The Bonds shall consist of fully registered bonds without coupons, numbered from R-1 consecutively upward, in the denomination of $5,000 or any integral multiple thereof. The Bonds shall be substantially in the form set forth in Section 401 hereof, and shall be subject to registration, transfer and exchange as provided in Section 206 hereof. The Bonds shall be dated the Dated Date as set forth on the Bonds, shall become due on the dates and in the principal amounts (subject to optional and mandatory redemption prior to maturity as provided in Article III hereof), and shall bear interest at the rates per annum established by the Terms Ordinance.

 

The Bonds shall bear interest at the rates aforesaid (computed on the basis of a 360-day year of twelve 30-day months) from the Dated Date thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for, payable semiannually on each Interest Payment Date.

 

Section 204. Designation of Paying Agent. The Trustee is hereby designated as the City's paying agent for the payment of principal of, redemption premium, if any, and interest on the Bonds and bond registrar with respect to the registration, transfer and exchange of Bonds (herein called the "Paying Agent"). The Paying Agent shall not be paid any additional fees for its services in connection herewith.

 

Section 205. Method and Place of Payment of Bonds. The principal of, redemption premium, if any, and interest on the Bonds shall be payable in any coin or currency which, on the respective dates of payment thereof, is legal tender for the payment of debts due the United States of America.

 

The principal of and redemption premium, if any, on each Bond shall be paid at maturity or upon earlier redemption to the person in whose name such Bond is registered at the maturity or redemption date thereof, upon presentation and surrender of such Bond at the principal office of the Paying Agent.

 

The interest payable on each Bond on any Interest Payment Date shall be paid in immediately available funds to the person in whose name such Bond is registered at the close of business on the Record Date for such interest.

 

The Paying Agent shall keep in its office a record of payment of principal of, redemption premium, if any, and interest on all Bonds and shall at least annually, at the request of the City, forward a copy or summary of such records to the City.

 

Section 206. Registration, Transfer and Exchange of Bonds. The City covenants that it will, as long as any of the Bonds remain Outstanding, cause to be kept at the office of the Paying Agent books for the registration, transfer and exchange of Bonds as herein provided (the "Bond Register"). Each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register kept by the Paying Agent.

 

Bonds may be transferred and exchanged only upon the Bond Register maintained by the Paying Agent as provided in this Section.

 

Upon surrender thereof at the principal office of the Paying Agent, the Paying Agent shall transfer or exchange any Bond for a new Bond or Bonds in any authorized denomination of the same maturity and in the same aggregate principal amount as the Bond which was presented for transfer or exchange. All 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, duly executed by the Registered Owner thereof or by the Registered Owner's duly authorized agent. All Bonds presented for transfer or exchange shall be surrendered to the Paying Agent for cancellation.

 

For every such exchange or transfer of Bonds, whether temporary or definitive, the City or the Paying Agent may make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer, which sum or sums shall be paid by the person requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer.

 

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 and the Paying Agent may deem and treat the person in whose name any Bond shall be registered as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of, redemption premium, if any, and interest on said Bond and for all other purposes, and all such payments so made to any such Registered Owner or upon the Registered Owner's order shall be valid and effectual 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, but such registration may be changed as herein provided.

 

To the extent that such information shall be made known to the Paying Agent under the terms of this Section, it will keep on file on the Bond Register at the principal office of the Paying Agent a list of names and addresses of the Registered Owners of all Bonds. The Paying Agent shall be under no responsibility with regard to the accuracy of said list. At reasonable times and under reasonable regulations established by the Paying Agent, said list may be inspected and copied by the City and the Owners (or a designated representative thereof) of 25% or more in principal amount of the Bonds then Outstanding or any such designated representative to be evidenced to the satisfaction of the Paying Agent.

 

Section 207. Execution, Authentication and Delivery of Bonds. Each of the Bonds, including any Bond issued in exchange or as substitution for the Bonds initially delivered, shall be signed 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 shall have the official seal of the City affixed thereto or imprinted thereon. In case any officer whose signature or facsimile thereof appears on any Bonds shall cease to be such officer before the delivery of such Bonds, such signature or facsimile thereof shall nevertheless be valid and sufficient for all purposes, the same as if such person had remained in office until delivery. Any Bond may be signed by such persons who at the actual time of the execution of such Bond shall be the proper officers to sign such Bond although at the date of such Bond such persons may not have been such officers.

 

The Mayor, the City Clerk and the Director of Finance are hereby authorized and directed to prepare and execute the Bonds as hereinbefore specified, and when duly executed, to deliver the Bonds to the Paying Agent for authentication. Upon authentication, the Paying Agent shall deliver the Bonds to the Bondowner, upon payment of the purchase price thereof.

 

The Bonds shall have endorsed thereon a certificate of authentication substantially in the form set forth in Section 401 hereof, which shall be manually executed by the Paying Agent. No Bond shall be entitled to any security or benefit under this Ordinance or be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Paying Agent. Such executed certificate of authentication upon 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 officer or employee sign the certificate of authentication on all of the Bonds that may be issued hereunder at any one time.

 

Section 208. Mutilated, Destroyed, Lost and Stolen Bonds. If (i) any mutilated Bond is surrendered to the Paying Agent, or the City and the Paying Agent receive evidence to their satisfaction of the mutilation, destruction, loss or theft of any Bond, and (ii) there is delivered to the City and the Paying Agent such security or indemnity as may be required by them to save each of them harmless, 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 its request the Paying Agent shall register and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond of the same maturity and of like tenor and principal amount, bearing a number not contemporaneously outstanding.

 

In case any such mutilated, destroyed, lost or stolen Bond has become or is about to become due and payable, the City in its discretion may, instead of issuing a new Bond, pay such 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 in relation thereto and any other expenses (including the fees and expenses of the Paying Agent) connected therewith.

 

Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost or stolen Bond shall constitute a replacement of the prior obligation of the City, whether or not the mutilated, destroyed, lost or stolen Bond shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Bonds.

 

Section 209. Cancellation and Destruction of Bonds Upon Payment. All Bonds which have been paid or redeemed or which have otherwise been surrendered to the Paying Agent, either at or before maturity, shall be cancelled immediately upon the payment or redemption of such Bonds and the surrender thereof to the Paying Agent and periodically destroyed by 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.

 

Section 210. Sale of the Bonds. The sale of the Bonds pursuant to the terms of the Notice of Bond Sale dated March 28, 1996 is hereby approved. The Director of Finance is hereby authorized to approve the award of the Bonds for the best bid received pursuant to the Notice of Bond Sale. In connection with the participation by the City in the SRF Program, the Director of Finance is hereby authorized to enter into the Purchase Agreement, the Revolving Fund Agreement and the Terms Certificate of the City in substantially the forms on file with the City Clerk, with such changes therein as shall be approved by the Director of Finance, which officer is hereby authorized to execute such document for and on behalf of the City, and such officer's signature thereon shall be conclusive evidence of his approval thereof.

 

Section 211. Official Statement. The City hereby ratifies and confirms the information in the Preliminary Official Statement prepared in the initial offering and sale of the Authority Bonds, in the form presented at this meeting, with respect to the City in Appendix C thereto and hereby approves the form and content of any addenda, supplement, or amendment thereto, and authorizes and approves information in the final Official Statement by supplementing, completing and amending the Preliminary Official Statement and the Director of Finance is hereby authorized to execute said portion of Appendix C to the Official Statement. The use of such Official Statement in the reoffering of the Authority Bonds by the Authority is hereby approved and authorized. The proper officials of the City are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the date of payment for and delivery of the Bonds.

 

Section 212. Administrative Fee and Other Fees; Revolving Fund Loan.

 

(a) Subject to the provisions of Section 202 hereof, the City shall pay to the Trustee for deposit in the Administrative Expense Fund, (i) for transfer to DNR, no later than the fifteenth day following each Administrative Fee Calculation Date as set forth in Exhibit A an amount equal to 0.714% of the outstanding principal amount of the Revolving Fund Loan on the Administrative Fee Calculation Date (the "Administrative Fee"), (ii) for payment to the Master Trustee, an amount equal to the Master Trustee's Disclosure Fee, and (iii) for payment to the Trustee, an amount equal to the Trustee's Fee.

 

(b) The City is hereby authorized to receive a loan (the "Revolving Fund Loan") from the Wastewater Loan Fund. The Revolving Fund Loan shall be made in the amounts and at the times and shall be repayable on the dates and in the amounts as set forth in the Revolving Fund Agreement. The Revolving Fund Loan shall not bear interest. The City hereby assigns the proceeds of the Revolving Fund Loan, as and when the installments thereof are received, to the Authority, which proceeds shall be held in the Reserve Fund.

 

ARTICLE III

 

REDEMPTION OF BONDS

 

Section 301. Mandatory Redemption. The Term Bonds set forth in the Terms Ordinance shall be subject to mandatory redemption and payment prior to maturity pursuant to the mandatory redemption requirements of this Section and the Terms Ordinance at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the redemption date. The payments specified in Section 702(b)(1)(B) hereof which are to be deposited into the Principal Account shall be sufficient to redeem, and the City shall redeem on the dates, the principal amounts of the Term Bonds as set forth in the Terms Ordinance.

 

Section 302. Optional Redemption. At the option of the City, Bonds maturing on and after January 1, 2007 may be called for redemption and payment prior to maturity 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 in part pursuant to the optional redemption provisions shall be in integral multiples of $5,000.00 (unless otherwise approved in writing by the Bondowner) and shall be selected by lot from such maturities as shall be determined by the City with the prior written consent of the Bondowner. Upon such redemption, the sinking fund installments described in Section 301 shall be proportionately reduced, subject to rounding to integral multiples of $5,000.00. 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 Paying Agent, in addition to the principal of, premium, if any, as calculated above and interest on the Bonds, additional premium in an amount equal to not more than the interest that would otherwise have accrued on the Bonds for an additional 30-day period.

 

Section 303. Selection of Bonds to Be Redeemed. Bonds to be redeemed pursuant to the redemption provisions of this Article III shall be redeemed only in the principal amount of $5,000.00 or any integral multiple thereof. When less than all of the Outstanding Bonds of any series are to be redeemed and paid prior to maturity, Bonds of less than a full maturity shall be selected by the Paying Agent in $5,000.00 units of face value in such equitable manner as the Paying Agent may determine. In the case of a partial redemption of Bonds pursuant to the optional redemption provisions of this Article III 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 fully registered Bond is selected for redemption, then upon notice of intention to redeem such $5,000.00 unit or units, the Owner of such fully registered Bond or the Owner's duly authorized agent shall forthwith present and surrender such Bond to the Paying Agent (1) for payment of the redemption price (including the redemption premium, 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 (2) for endorsement on such Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such fully registered Bond. If the Owner of any such fully registered Bond of a denomination greater than $5,000.00 shall fail to present such Bond to the Paying Agent for payment and endorsement as aforesaid, such Bond shall, nevertheless, become due and payable on the redemption date to the extent of the $5,000.00 unit or units of face value called for redemption (and to that extent only).

 

Section 304. Notice and Effect of Call for Redemption. Unless waived by any Owner of Bonds to be redeemed, official notice of any such redemption shall be given by the Paying Agent on behalf of the City by mailing a copy of an official redemption notice by first class, registered or certified mail, postage prepaid, at least 45 days prior to the date fixed for redemption, to the Registered Owner of the Bond or Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such Registered Owner to the Paying Agent.

 

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

 

(1) the redemption date,

 

(2) the redemption price,

 

(3) 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,

 

(4) that on the redemption date the redemption price will become due and payable

upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and

 

(5) 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.

 

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.

 

Official notice of redemption having been given or waived as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City shall default in the payment of the redemption price) such Bonds or portion of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said 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 herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Registered 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 cancelled and periodically destroyed by the Paying Agent and shall not be reissued.

 

 

ARTICLE IV

 

FORM OF BONDS

 

Section 401. Form of Bonds. Each of the Bonds, as originally issued or issued upon transfer, exchange or substitution, shall be in substantially the form as set forth in Exhibit B hereto.

 

 

ARTICLE V

 

RATIFICATION OF FUNDS AND ACCOUNTS

 

Section 501. Ratification of Funds and Accounts. (i) The separate funds and accounts created in, or ratified and confirmed by, the Outstanding Parity Bond Ordinance known respectively as the:

 

(a) Sewer Fund (herein referred to as the "Sewer Fund");

 

(b) Sewerage System Depreciation and Replacement Account (herein referred to as the "Depreciation and Replacement Account");

 

(c) Kansas City Sewerage System Refunding and Improvement Revenue Bonds, Series 1992, Bond Reserve Account (the "Series 1992A Reserve Account");

 

(d) Kansas City Sewerage System Refunding and Improvement Revenue Bonds, Series 1992, Principal and Interest Account (the "Series 1992A Debt Service Account"),

 

(e) Kansas City Sewerage System Refunding and Improvement Revenue Bonds, Series 1992, Surplus Account (herein referred to as the "Surplus Account");

 

are hereby ratified and confirmed.

 

(ii) The separate accounts held under Section 503 of the Series 1992B Ordinance are hereby acknowledged:

 

(a) Construction Account;

 

(b) Reserve Account (the "Series 1992B Reserve Account");

 

(c) Debt Service Account (the "Series 1992B Debt Service Account");

 

(d) Principal Account (the "Series 1992B Principal Account"); and

 

(e) Interest Account (the "Series 1992B Interest Account").

 

(iii) The separate accounts held under Section 503 of the Series 1995A Ordinance are hereby acknowledged:

 

(a) Construction Loan Fund;

 

(b) Reserve Fund (the "Series 1995A Reserve Fund", the Series 1995A Reserve Fund, the Series 1992A Reserve Account and the Series 1992B Reserve Account are

collectively herein referred to as the "Outstanding Parity Bond Reserve Account");

 

(c) Debt Service Fund (the "Series 1995A Debt Service Fund");

 

(d) Principal Account (the "Series 1995A Principal Account"); and

 

(e) Interest Account (the "Series 1995A Interest Account", the Series 1995A Interest Account, the Series 1995A Principal Account, the Series 1995A Debt Service Fund,

the Series 1992B Debt Service Account, the Series 1992B Principal Account, the

Series 1995B Interest Account and the Series 1992A Debt Service Account are

collectively herein referred to as the "Outstanding Parity Bond Debt Service

Account").

 

Section 502. Administration of Funds and Accounts. The funds and accounts described in subparagraphs (i)(a) through (e) of Section 501 shall be maintained and administered by the City as hereinafter provided so long as any of the Bonds and the Outstanding Parity Bonds remain Outstanding and unpaid; provided, however, that the funds and accounts referred to in subparagraphs (i)(c) and (d) of Section 501 shall be maintained and administered by the City so long as any of the Series 1992A Bonds remain Outstanding and unpaid. The accounts referred to in paragraph (ii) of Section 501 shall be maintained and administered so long as any of the Series 1992B Bonds remain Outstanding and unpaid. The accounts referred to in paragraph (iii) of Section 501 shall be maintained and administered so long as any of the Series 1995A Bonds remain Outstanding and unpaid.

 

Section 503. Acknowledgment of Accounts. The City acknowledges the creation of the following funds and accounts held by the Trustee under the Indenture:

 

(a) Construction Loan Fund;

 

(b) Reserve Fund;

 

(c) Debt Service Fund;

 

(d) Principal Account; and

 

(e) Interest Account.

 

The City further acknowledges that certain amounts will be transferred to the Costs of Issuance Fund and the Administrative Expense Fund under the Indenture in satisfaction of certain obligations of the City under this Ordinance, the Purchase Agreement and the Revolving Fund Agreement.

 

 

ARTICLE VI

 

APPLICATION OF BOND PROCEEDS

 

Section 601. Disposition of Bond Proceeds. The net proceeds received from the sale of the Bonds, including any premium or accrued interest thereon, and other moneys provided by the City shall be deposited simultaneously with the delivery of the Bonds, as follows:

 

(a) There shall be deposited in the Costs of Issuance Fund an amount equal to the

Costs of Issuance which shall be in an amount not to exceed the amount set forth in Exhibit A.

 

(b) There shall be deposited in the Interest Account the accrued interest on the

Bonds; and

 

(c) There shall be deposited in the Construction Loan Fund the remaining

proceeds of the Bonds.

 

Section 602. Application of Moneys in the Construction Loan Fund. (a) Moneys in the Construction Loan Fund shall be disbursed to the City pursuant to the Purchase Agreement for the sole purpose of paying the cost of extending and improving the System as hereinbefore provided, in accordance with the plans and specifications therefor prepared by the Consulting Engineer, heretofore approved by the Council of the City and on file in the office of the City Clerk, including any alterations in or amendments to said plans and specifications deemed advisable by the Consulting Engineer and approved by the Director of Water Services of the City, and for paying the costs and expenses incident to the issuance of the Bonds.

 

(b) Requisitions shall be submitted for disbursements from the Construction Loan Fund in accordance with Article III of the Purchase Agreement, and accompanied by a certificate executed by the Authorized Representative 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.

 

 

ARTICLE VII

 

APPLICATION OF REVENUES

 

Section 701. Sewer Fund. The City covenants and agrees that from and after the delivery of the Bonds, and continuing as long as any of the Bonds remain Outstanding hereunder, all of the Revenues derived and collected by the City from the ownership and operation of the System shall be paid and deposited into the Sewer Fund as and when received. Said Revenues shall be segregated and kept separate and apart from all other moneys, revenues, funds and accounts of the City and shall not be commingled with any other moneys, revenues, funds and accounts of the City. The Sewer Fund shall be administered and applied solely for the purposes and in the manner provided in the Outstanding Parity Bond Ordinance and this Ordinance.

 

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) an amount equal to the moneys

remaining in the Debt Service Fund after the payment of the principal of and interest

due on the Authority Bonds on an Interest Payment Date shall be credited against the

next succeeding monthly payment or payments, (ii) upon the City's receipt of the

Trustee's quarterly notice of actual investment earnings such actual investment

earnings shall be credited against the monthly payments due on and prior to the next

Interest Payment Date in inverse order of their due date, commencing with the

monthly installment due on the next succeeding Interest Payment Date, and (iii) upon

the City's receipt of the Trustee's notice of projected investment earnings in the

Reserve Fund, an amount equal to such projected earnings shall be credited against

the monthly payments due on and prior to the next Interest Payment Date on a pro

rata basis; 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 City's 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 Trustee's Fee, the Administrative Fee and the Master Trustee's Disclosure Fee are scheduled to become due, such amounts as may be required to pay the Trustee's Fee, the Administrative Fee and the Master Trustee's 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) [Reserved]

 

(e) [Reserved]

 

(f) 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 hereof, 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 703. Deficiency of Payments into Funds and Accounts. If at any time the income and revenues derived by the City from the ownership and operation of the System shall be insufficient to make any payment on the date or dates hereinbefore specified, the City will make good the amount of such deficiency by making additional payments or credits out of the first available income and revenues thereafter received by the City from the ownership and operation of the System, such payments and credits being made and applied in the order hereinbefore specified in Section 702 of this Ordinance.

 

If at any time the moneys in the Outstanding Parity Bond Debt Service Account, the Outstanding Parity Bond Debt Service Reserve Account, the Principal Account, the Interest Account or the Reserve Fund are not sufficient to pay the principal of and interest on the Bonds and the Outstanding Parity Bonds as and when the same become due, then moneys in the Surplus Account and the Depreciation and Replacement Account may and shall be used by the City, in that order, to prevent any default in the payment of the principal of and interest on the Bonds and the Outstanding Parity Bonds.

 

Section 704. Transfer of Funds to Paying Agent. The Director of Finance of the City is hereby authorized and directed to make the payments to the Repayment Fund and the debt service accounts as provided in Section 702 hereof, and, to the extent necessary to prevent a default in the payment of either principal of or interest on the System Revenue Bonds, from the debt service reserve accounts, the Surplus Account and the Depreciation and Replacement Account as provided in Sections 702 and 703 hereof, sums sufficient to pay the principal of and interest on the System Revenue Bonds as and when the same become due, and to forward such sums to the Paying Agent in a manner which ensures the Paying Agent will have available funds in such amounts on or before the second Business Day immediately preceding the dates when such principal and interest will become due. Upon the payment in full of all principal of and interest on the Bonds, it shall be the duty of the Paying Agent forthwith to return any excess 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 this Ordinance.

 

 

ARTICLE VIII

 

DEPOSIT AND INVESTMENT OF MONEYS

 

Section 801. Investment of Moneys. Moneys held in the Interest Account, the Principal Account, the Debt Service Fund and the Reserve Fund have been assigned to the Authority to secure the City's obligations under this Ordinance and the City acknowledges that moneys in the Interest Account, the Principal Account, the Debt Service Fund, the Costs of Issuance Fund and the Reserve Fund shall be invested by the Authority, subject to the Arbitrage Instructions, in Investment Securities in accordance with Section 4.9 of the Indenture. Moneys in the Construction Loan Fund shall be invested by the Trustee at the written direction of the City, subject to the Arbitrage Instructions, in Investment Securities in accordance with Section 4.9 of the Indenture. Moneys in each of the other funds and accounts created or ratified and confirmed by this Ordinance may be invested by the City in such other obligations as may be permitted by law; provided, however, that no such investment shall be made for a period extending longer than the date when the moneys invested may be needed for the purpose for which such fund or account was created. All earnings on any investments held in any fund or account shall accrue to such fund or account. In determining the amount held in any fund or account under any of the provisions of this Ordinance, obligations shall be valued at the lower of the cost or the market value thereof. If and when the amount held in any fund or account held within the Treasury of the City shall be in excess of the amount required by the provisions of this Ordinance, the City shall direct that such excess be paid and credited to the Sewer Fund.

 

So long as any of the Outstanding Parity Bonds remain outstanding and unpaid, any investments made pursuant to this Section shall be subject to any restrictions in the Outstanding Parity Bond Ordinance with respect to the funds and accounts created by and referred to in the Outstanding Parity Bond Ordinance.

 

 

ARTICLE IX

 

PARTICULAR COVENANTS OF THE CITY

 

The City covenants and agrees with each of the Owners of any of the Bonds that so long as any of the Bonds remain Outstanding and unpaid:

 

Section 901. Efficient and Economical Operation. The City will continuously own and will operate the System in an efficient and economical manner and will keep and maintain the same in good repair and working order.

 

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 income and 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 shall 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 903. Reasonable Charges for all Services. None of the facilities or services provided by the System will be furnished to any user (excepting the City itself) without a reasonable charge being made therefor. In the event that the income and revenues derived by the City from the System shall at any time be insufficient to pay the reasonable expenses of operation and maintenance of the System and also to pay all interest on and principal of the Bonds as and when the same become due, then the City will thereafter pay into the Sewer Fund a fair and reasonable payment in accordance with effective applicable rates and charges for all services or other facilities furnished to the City or any of its departments by the System, and such payments will continue so long as the same may be necessary in order to prevent or reduce the amount of any default in the payment of the interest on or principal of the Bonds.

 

Section 904. Annual Budget. Prior to the commencement of each Fiscal Year, the chief financial officer of the City or other representative of the City designated by the Council of the City will cause to be prepared and filed with the City Clerk a budget setting forth the estimated receipts and expenditures of the System for the next succeeding Fiscal Year. The City, within 30 days after the end of the current Fiscal Year, will mail a copy of said budget to the Bondowner and the Trustee. Said annual budget shall be prepared in accordance with the requirements of the laws of the State and shall contain all information as shall be required by such laws.

 

Section 905. Annual Audit. Annually, promptly after the end of the Fiscal Year, the City will cause an audit to be made of the System for the preceding Fiscal Year by a certified public accountant or firm of certified public accountants to be employed for that purpose and paid from the income and revenues of the System. Said annual audit shall cover in reasonable detail the operation of the System during such Fiscal Year.

 

Within 180 days after the end of the City's Fiscal Year, a copy of the annual audit shall be filed in the office of the City Clerk, and a duplicate copy of said audit shall be mailed to the Bondowner and the Trustee. Such audits shall at all times during the usual business hours be open to the examination and inspection by any taxpayer, any user of the services of the System, any Owner of any of the Bonds, or by anyone acting for or on behalf of such taxpayer, user or Owner.

 

As soon as possible after the completion of such annual audit, the governing body of the City shall review such audit, and if any audit shall disclose that proper provision has not been made for all of the requirements of this Ordinance and the law under which the Bonds are issued, the City covenants and agrees that it will promptly cure such deficiency and will promptly proceed to increase the rates and charges to be charged for the use and services furnished by the System as may be necessary to adequately provide for such requirements.

 

Section 906. Performance of Duties. The City will faithfully and punctually perform all duties and obligations with respect to the operation of the System, including all extensions and improvements thereto, now or hereafter imposed upon the City by the Constitution and laws of the State and by the provisions of this Ordinance.

 

Section 907. Tax Covenants. The City will comply with the provisions of the Code relating to the exclusion from federal 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 excludable from federal gross income, to the extent any such actions can be taken by the governing body of the City.

 

The City covenants and agrees that it will not take any 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 under Section 103 of the Code. The City covenants and agrees that it will use the proceeds of the Bonds as soon as practicable and with all reasonable dispatch for the purpose for which the Bonds are issued as hereinbefore set forth, and that it will not directly or indirectly use or permit the use of any proceeds of the Bonds or any other funds of the City, 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. To that end, the City will comply with all requirements of Section 148 of the Code to the extent applicable to the Bonds. In the event that at any time the City is of the opinion that for purposes of this Section it is necessary to restrict or limit the yield on the investment of any moneys held by the City under this Ordinance, the City shall take such action as may be necessary.

 

Without limiting the generality of the foregoing, the City agrees that there shall be paid from time to time all amounts required to be rebated to the United States pursuant to 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. This covenant shall survive payment in full or defeasance of the Bonds. The City specifically covenants to pay or cause to be paid to the United States the rebatable arbitrage in accordance with the Arbitrage Instructions.

 

 

ARTICLE X

 

ADDITIONAL BONDS

 

Section 1001. Prior Lien Bonds. The City covenants and agrees that so long as any of the Bonds remain Outstanding, the City will not issue any debt obligations payable out of the income and revenues of the System or any part thereof which are superior in lien, security or otherwise to the Bonds.

 

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 ownership and 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 shall 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 ownership and operation of the System during said two preceding

Fiscal Years had such rate increase been in effect for the entire period, as certified by

the Consulting Engineer; or

 

(2) The estimated average annual Net Revenues Available for Debt

Service derived by the City from the ownership and 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 income

and 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 shall 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 income and

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 income and 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 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 1003. Junior Lien Bonds. Nothing in this Article contained shall prohibit or restrict the right of the City to issue additional revenue bonds or other revenue obligations for the purpose of extending, improving, enlarging, repairing or altering the System and to provide that the principal of and interest on said revenue bonds or obligations shall be payable out of the income and revenues of the System, provided at the time of the issuance of such additional revenue bonds or obligations the City shall not be in default in the performance of any covenant or agreement contained in this Ordinance, and provided further that such additional revenue bonds or obligations shall be junior and subordinate to the Bonds so that if at any time the City shall be in default in paying either interest on or principal of the Bonds, or if the City shall be in default in making any payments required to be made by it under the provisions of paragraphs (a), (b) and (c) of Section 702 of this Ordinance, the City shall make no payments of either principal of or interest on said junior and subordinate revenue bonds or obligations until said default or defaults be cured. In the event of the issuance of any such junior and subordinate revenue bonds or obligations, the City, subject to the provisions aforesaid, may make provision for paying the principal of and interest on said revenue bonds or obligations out of moneys in the Sewer Fund.

 

Section 1004. Refunding Bonds. The City shall have the right, if it shall find it desirable, without complying with the provisions of Section 1002 hereof 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 hereof only by and with the written consent of the Authority and DNR.

 

ARTICLE XI

 

DEFAULT AND REMEDIES

 

Section 1101. Event of Default. The City covenants and agrees that if (i) it shall default in the payment of the principal of or interest on any of the Bonds as the same shall become due, or (ii) if the City or its governing body or any of the officers, agents or employees thereof shall fail or refuse to comply with any of the provisions of this Ordinance, the Constitution or statutes of the State, the Purchase Agreement or the Revolving Fund Agreement and such default shall continue for a period of 60 days after written notice specifying such default shall have been given to the City by the Trustee, the Authority, DNR or the Owner of any Bond then Outstanding, then, at any time thereafter and while such default shall continue, the City shall pay to DNR such penalties as are assessed by DNR in accordance with the Regulations. Such penalties shall be assessed as a reduction in the credit provided in Section 702(b)(1)(A) of this Ordinance.

 

Section 1102. Remedies. The provisions of this Ordinance, including the covenants and agreements herein contained, shall constitute a contract between the City and the Owners of the Bonds, and the Owner or Owners of not less than 10% 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 this 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.

 

Any amounts paid on the Bonds to the Owners thereof shall be applied first to interest and second to principal, to the extent due and payable.

 

Section 1103. Limitation on Rights of Bondowners. No one or more Bondowners secured hereby shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in the manner herein 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 1104. Remedies Cumulative. No remedy conferred herein upon the Bondowners is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred herein. 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 Bondowner 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 therein. 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 Bondowner 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 Bondowner, 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 Bondowners shall continue as if no such suit, action or other proceedings had been brought or taken.

 

Section 1105. No Obligation to Levy Taxes. Nothing contained in this Ordinance shall be construed as imposing on the City any duty or obligation to levy any taxes either to meet any obligation incurred herein or to pay the principal of or interest on the Bonds.

 

 

ARTICLE XII

 

DEFEASANCE

 

Section 1201. Defeasance. When all of the Bonds shall have been paid and discharged, then the requirements contained in this Ordinance and the pledge of income and revenues made hereunder and all other rights granted hereby shall terminate. Bonds shall be deemed to have been paid and discharged within the meaning of this Ordinance if there shall have been deposited with the Paying Agent, or other bank or trust company located in the State of Missouri, having full trust powers and meeting the requirements of a successor Trustee under the Indenture impressed with a first lien to the Paying Agent for the benefit of the Bondowners, (a) at or prior to the maturity or redemption date of said Bonds, in trust for and irrevocably appropriated thereto, moneys and/or non-callable Defeasance Securities which, together with the interest to be earned on any such obligations, as evidenced by the written report of an independent certified public accountant, will be sufficient for the payment of the principal of said Bonds, the redemption premium thereon, if any, and interest to accrue to the date of maturity or redemption, as the case may be, plus an additional premium on Bonds being optionally redeemed equal to interest that would otherwise accrue on the Bonds for an additional 30-day period, or if default in such payment shall have occurred on such date, then to the date of the tender of such payments, provided, however, that if any such Bonds shall be redeemed prior to the maturity thereof, (i) the City shall have elected to redeem such Bonds, (ii) 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 (b) an opinion of Bond Counsel addressed to the Authority and the Trustee to the effect that providing for the payment of the Bonds by depositing moneys or Defeasance Securities with the Trustee in accordance with this Section will not cause the interest on the Bonds to be included in gross income for federal income tax purposes. Any moneys and obligations which at any time shall be deposited with the Paying Agent or other bank 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 in trust for the respective Owners of the Bonds, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge hereof. All moneys deposited with the Paying Agent or other bank shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Ordinance.

 

ARTICLE XIII

 

AMENDMENTS

 

Section 1301. Amendments. The provisions of this Article shall not be applicable to the Terms Ordinance. The rights and duties of the City and the Bondowner, and the terms and provisions of the Bonds or of this Ordinance, may be amended or modified at any time in any respect by ordinance of the City with the written consent of the Bondowner, DNR and the Trustee, such consent to be evidenced by an instrument or instruments executed by such parties and duly acknowledged or proved in the manner of a deed to be recorded, and such instrument or instruments shall be filed with the City Clerk, but no such modification or alteration shall:

 

(a) extend the maturity of any payment of principal or interest due upon any

Bond;

 

(b) effect a reduction in the amount which the City is required to pay by way of

principal of or interest on any Bond;

 

(c) permit the creation of a lien on the Revenues of the System prior to the lien

of the Bonds or additional bonds hereafter issued on a parity with the Bonds as hereinbefore provided;

 

(d) permit preference or priority of any Bonds over any other Bonds; or

 

(e) reduce the percentage in principal amount of Bonds required for the written

consent to any modification or alteration of the provisions of this Ordinance.

 

Notwithstanding anything to the contrary in this Section, before the City enters into any amendment of or modification of this Ordinance, there shall have been delivered to the Bondowner, the Trustee, DNR and the City an opinion of Bond Counsel stating that such amendment of or modification of this Ordinance is authorized or permitted by this Indenture and the Act, complies with their respective terms, will, upon the execution and delivery thereof, be valid and binding upon the City in accordance with its terms and will not adversely affect the exclusion of interest on the Authority Bonds from gross income for federal income tax purposes.

 

Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the City Clerk a copy of the ordinance of the City hereinabove provided for, duly certified, as well as proof of any required consent to such modification by the Bondowner. It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification.

 

 

ARTICLE XIV

 

MISCELLANEOUS PROVISIONS

 

Section 1401. Further Authority. The officers of the City, including the Mayor, the City Clerk and the Director of Finance, shall be, and they hereby are, authorized and directed to execute all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of this Ordinance and to make ministerial alterations, changes or additions in the foregoing 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 1402. Severability. If any section or other part of this Ordinance, whether large or small, shall for any reason be held invalid, the invalidity thereof shall not affect the validity of the other provisions of this Ordinance.

 

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

 

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

 

__________________________________________________________________

 

Approved as to form and legality:

 

 

 

_________________________

Assistant City Attorney