WHEREAS, the
Council (the Governing Body) of the City has caused plans and specifications
for extensions and improvements to the Sanitary Sewer System and a cost
estimate to be made by the Consulting Engineer (as defined below); and
WHEREAS, the
plans and specifications and the cost estimate are accepted and approved and
are on file in the office of the City Clerk, the amount of the estimated cost
being not less than the Original Principal Amount; and
WHEREAS,
$78,950,000.00 of the bonds so authorized have been issued (the Series 1998A
Bonds, the Series 1999A Bonds, the Series 2000A Bonds, the Series 2000B Bonds,
the Series 2001B Bonds, the Series 2002D Bonds and the Series 2002J Bonds as
defined below) and the City finds and determines that it is necessary and
advisable and in the best interest of the City and of its inhabitants to issue
its Sanitary Sewer System Revenue Bonds, Series 2004A in the original principal
amount of $20,000,000.00 (the Original Principal Amount); 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 $825,000.00 remains outstanding as of the date of
passage of this Ordinance (the Series 1992B Bonds), authorized by Committee
Substitute for Ordinance No. 920636 passed on June 4, 1992 and Ordinance No.
920681 passed on June 11, 1992 (as amended, collectively, the Series 1992B
Ordinance); and
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 $14,340,000.00 remains outstanding as of the date of
passage of this Ordinance (the Series 1995A Bonds), authorized by Committee
Substitute for Ordinance No. 950353 passed on April 13, 1995 and Ordinance No.
950516 passed on April 20, 1995 (as amended, collectively, the Series 1995A
Ordinance); and
WHEREAS, the City
has issued its Sewerage System Revenue Bonds (State Revolving Fund Program)
Series 1996A, dated April 1, 1996, in the original principal amount of
$24,000,000.00, of which $17,285,000.00 remains outstanding as of the date of
passage of this Ordinance (the Series 1996A Bonds), authorized by Committee
Substitute for Ordinance No. 960253 passed on March 28, 1996 and Ordinance No.
960440 passed on April 18, 1996 (as amended, collectively, the Series 1996A
Ordinance); and
WHEREAS, the City
has issued its Sewerage System Revenue Bonds (State Revolving Fund Program)
Series 1997A, dated April 24, 1997, in the original principal amount of
$22,235,000.00, of which $15,570,000.00 remains outstanding as of the date of
passage of this Ordinance (the Series 1997A Bonds), authorized by Ordinance
No. 970285 passed on March 27, 1997 and Ordinance No. 970478 passed on April
10, 1997 (as amended, collectively, the Series 1997A Ordinance); and
WHEREAS, the City
has issued its Sewerage System Revenue Bonds (State Revolving Fund Program)
Series 1998A, dated April 1, 1998, in the original principal amount of
$9,200,000.00, of which $7,605,000.00 remains outstanding as of the date of
passage of this Ordinance (the Series 1998A Bonds, together with the Series
1992B Bonds, the Series 1995A Bonds, the Series 1996A Bonds and the Series
1997A Bonds, collectively referred to herein as the Outstanding Senior Bonds),
and authorized by Ordinance No. 980253 passed on March 26, 1998 and Ordinance
No. 980417 passed on April 9, 1998 (collectively, the Series 1998A Ordinance,
together with the Series 1992B Ordinance, the Series 1995A Ordinance, the
Series 1996A Ordinance and the Series 1997A Ordinance, collectively referred to
herein as the Outstanding Senior Bond Ordinance); and
WHEREAS, the City
has issued its Sanitary Sewer System Revenue Bonds (State Revolving Fund
Program) Series 1999A, dated June 1, 1999, in the original principal amount of
$6,000,000.00, of which $5,080,000.00 remains outstanding as of the date of
passage of this Ordinance (the Series 1999A Bonds), authorized by Ordinance
No. 990589 passed on May 6, 1999 and Ordinance No. 990750 passed on May 20,
1999 (collectively, the Series 1999A Ordinance); and
WHEREAS, the City
has issued its Sanitary Sewer System Revenue Bonds (State Revolving Fund
Program) Series 2000A, dated April 1, 2000, in the original principal amount of
$13,000,000.00, of which $11,340,000.00 remains outstanding as of the date of
passage of this Ordinance (the Series 2000A Bonds,) authorized by Ordinance
No. 000309 passed on March 9, 2000 and Ordinance No. 000415 passed on March 23,
2000 (collectively, the Series 2000A Ordinance); and
WHEREAS, the City
has issued its Sanitary Sewer System Revenue Bonds (State Revolving Fund
Program) Series 2000B, dated November 1, 2000, in the original principal amount
of $11,750,000.00, of which $10,230,000.00 remains outstanding as of the date
of passage of this Ordinance (the Series 2000B Bonds,) authorized by
Ordinance No. 001386 passed on October 26, 2000 and Ordinance No. 001492 passed
on November 2, 2000 (collectively, the Series 2000B Ordinance); and
WHEREAS, the City
has issued its Sanitary Sewer System Refunding Revenue Bonds, Series 2001A,
dated August 1, 2001, in the original principal amount of $14,055,000.00, of
which $8,025,000.00 remains outstanding as of the date of passage of this
Ordinance (the Series 2001A Bonds,) authorized by Ordinance No. 011035 passed
on July 26, 2001 and Ordinance No. 011199 passed on August 16, 2001
(collectively, the Series 2001A Ordinance); and
WHEREAS, the City
has issued its Sanitary Sewer System Revenue Bonds (State Revolving Fund
Program) Series 2001B, dated November 1, 2001, in the original principal amount
of $17,000,000.00, of which $16,290,000.00 remains outstanding as of the date
of passage of this Ordinance (the Series 2001B Bonds,) authorized by Ordinance
No. 011446, as amended, passed on October 25, 2001 and Ordinance No. 011565
passed on November 1, 2001 (collectively, the Series 2001B Ordinance); and
WHEREAS, the City
has issued its Sanitary Sewer System Revenue Bonds, Series 2002D-1, dated May
1, 2002, in the original principal amount of $9,000,000.00, of which
$9,000,000.00 remains outstanding as of the date of passage of this Ordinance,
and its Taxable Sanitary Sewer System Revenue Bonds, Series 2002D-2, dated May
1, 2002, in the original principal amount of $3,000,000.00, of which
$2,375,000.00 remains outstanding as of the date of passage of this Ordinance
(collectively, the Series 2002D Bonds) authorized by Committee Substitute for
Ordinance No. 020418, passed on April 25, 2002 and Ordinance No. 020604 passed
on May 9, 2002 (collectively, the Series 2002D Ordinance); and
WHEREAS, the City
has issued its Sanitary Sewer System Revenue Bonds, Series 2002J, dated
November 7, 2002, in the original principal amount of $10,000,000.00, of which $9,770,000.00
remains outstanding as of the date of passage of this Ordinance (the Series
2002J Bonds, together with the Series 1999A Bonds, the Series 2000A Bonds, the
Series 2000B Bonds, the Series 2001A Bonds, the Series 2001B Bonds and the
Series 2002D Bonds and the Series 2004A Bonds, collectively referred to herein
as the Outstanding Parity Bonds), and authorized by Ordinance No. 021206
passed on October 10, 2002 and Ordinance No. 021304 passed on October 24,
2002 (collectively, the Series 2002J Ordinance, together with the Series
1999A Ordinance, the Series 2000A Ordinance, the Series 2000B Ordinance, the
Series 2001A Ordinance, the Series 2001B Ordinance, the Series 2002D Ordinance
and this Ordinance, collectively referred to herein as the Outstanding Parity
Bond Ordinance); and
WHEREAS, the
City, upon the issuance of the Bonds, will not have outstanding any other bonds
or other obligations payable from the Net Sanitary Sewer Revenues other than
the Outstanding Senior Bonds, the Outstanding Parity Bonds and the Bonds; and
WHEREAS, under
the provisions of the Outstanding Senior Bond Ordinance and the Outstanding
Parity Bond Ordinance the City may issue additional bonds payable out of the
Net Sanitary Sewer Revenues that are junior and subordinate to the Outstanding
Senior Bonds and that are on a parity with the Outstanding Parity Bonds, in
each case only if certain conditions are met; and
WHEREAS, it is
hereby found and determined that it is necessary and advisable and in the best
interest of the City and its inhabitants that revenue bonds be issued and
secured in the form and manner provided in this Ordinance, subject to the Terms
Ordinance and the conditions of the Outstanding Senior Bond Ordinance and 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. In addition to the words and terms defined in the
Recitals and elsewhere in this Ordinance, capitalized words and terms have the
following meanings in this Ordinance:
Administrative
Service Fees means that portion of the Current Sanitary Sewer Expenses paid to
the general fund of the City for office space and certain administrative, data
processing, accounting and other support services provided to the Sanitary
Sewer System of the City.
Arbitrage
Instructions" means the Arbitrage Instructions attached as Exhibit
A to the Citys Arbitrage Certificate, as the same may be amended or
supplemented in accordance with the provisions thereof.
Authorized
Representative means the representative of the City designated by the City in
accordance with the Regulations.
Bond Counsel
means Gilmore & Bell, P.C. and The Martinez Law Firm, LLC, or other
attorney or firm of attorneys with a nationally recognized standing in the
field of municipal bond financing.
Bond Insurance
Policy means, with respect to the Series 2004A Bonds, the financial guaranty
insurance policy issued by the Bond Insurer that insures the scheduled payment
of the principal of and interest on the Series 2004A Bonds.
Bond Insurer
and MBIA means MBIA Insurance Corporation, Armonk, New York, a New York stock
insurance company, and its successors and assigns.
Bond Reserve
Requirement means, with respect to the Series 2004A Bonds, an aggregate amount
equal to the least of (a) the maximum annual debt service with respect to the
Series 2004A Bonds, (b) 10% of the principal amount of the Bonds or (c) an
amount equal to 125% of the average annual debt service with respect to the
Series 2004A Bonds.
Bondowner or Registered
Owner means the individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof in whose name a bond
is registered in the Bond Register.
Bond Register
means the books for the registration, transfer and exchange of Bonds kept at
the office of the Paying Agent.
Business Day
means a day other than (a) a Saturday, Sunday or holiday on which the Paying
Agent is scheduled in the normal course of its operations to be open to the
public for conduct of its banking operations or (b) a day on which the New York
Stock Exchange is closed.
"Cede &
Co." means Cede & Co., as nominee name of The Depository Trust
Company, New York, New York.
City means the
City of Kansas City, Missouri.
Code means the
Internal Revenue Code of 1986, as amended, and the applicable regulations of
the Treasury Department proposed or promulgated thereunder.
Combined System
means the Citys Sanitary Sewer System and the Citys stormwater sewer system,
serving the City, its inhabitants and others, including connected and related
appurtenances and facilities and extensions, improvements, additions and
enlargements hereafter made or acquired by the City.
Combined System
Revenue Fund refers to and identifies the Sewer Fund and the stormwater fund
as a single combined fund for purposes of this Ordinance, as ratified and confirmed
by Section 401.
Combined System
Revenues means all income and revenues derived by the City from the Combined
System, including any amounts deposited in the Combined System Revenue Fund,
but excluding any profits or losses on the early extinguishment of debt or on
the sale or other disposition of investments or fixed or capital assets not in
the ordinary course of business.
Consultant
means the Consulting Engineer, an independent certified public accountant or a
firm of independent certified public accountants.
Consulting
Engineer means each independent engineer or engineering firm with experience
in designing and constructing wastewater treatment, sanitary sewerage or water
pollution control facilities and retained by the City.
Current Sanitary
Sewer Expenses means all reasonable and necessary expenses of ownership,
operation, maintenance and repair of the Sanitary Sewer System and keeping the
Sanitary Sewer System in good repair and working order, determined in
accordance with generally accepted accounting principles, including current
maintenance charges, expenses of reasonable upkeep and repairs, salaries,
wages, costs of materials and supplies, Paying Agent fees and expenses, annual
audits, periodic Consultants reports, properly allocated share of charges for
insurance, the cost of purchased water, gas and power, obligations (other than
for borrowed money or for rents payable under capital leases) incurred in the
ordinary course of business, liabilities incurred by endorsement for collection
or deposit of checks or drafts received in the ordinary course of business,
short-term obligations incurred and payable within a particular Fiscal Year,
obligations incurred for the purpose of leasing (pursuant to a true or
operating lease) equipment, fixtures, inventory or other personal property, and
all other expenses incident to the ownership and operation of the Sanitary
Sewer System, but excluding capital lease payments, if any, and interest paid
on Sanitary Sewer System Revenue Bonds and depreciation and amortization
charges (including payments into the Sanitary Sewer System Depreciation and
Replacement Account).
Defeasance
Securities means:
(a)
Federal Securities;
(b)
obligations of the Resolution Funding Corporation or any successor, but only if
the use of the obligations to pay and discharge Bonds pursuant to Article XI
will cause the discharged Bonds to be rated in the highest long-term rating
category by the Rating Agency; or
(c)
obligations of any state of the United States of America or of any agency,
instrumentality or local governmental unit of any state that:
(i) are
not callable at the option of the obligor prior to maturity or for which
irrevocable instructions have been given by the obligor to call on the date
specified in the instructions, and
(ii) are
fully secured as to principal, redemption premium and interest by a fund,
consisting of cash or Federal Securities, that:
(A) may be
applied only to the payment of principal, redemption premium and interest on
the obligations, and
(B) is
sufficient, as verified by a nationally recognized independent certified public
accountant, to pay the principal, redemption premium and interest on the
obligations.
Depreciation and
Replacement Account means the fund or account created or ratified and
confirmed by Section 401.
"Depository"
means The Depository Trust Company.
Federal
Securities means any direct obligation of, or obligation the timely payment of
the principal of and interest on which is unconditionally guaranteed by, the
United States of America and backed by its full faith and credit.
"Fiscal
Year" means the City's fiscal year then in effect.
"Global Bond
Certificate" means one or more Bond certificates of the City, representing
the entire principal amount of a particular Series due on a particular Stated
Maturity, immobilized from general circulation in the Depository.
Interest Payment
Date means each January 1 and July 1, commencing January 1, 2005.
Net Sanitary
Sewer Revenues means Sanitary Sewer Revenues less Current Sanitary Sewer
Expenses.
Net Sanitary
Sewer Revenues Available for Debt Service means, for the period of determination,
Sanitary Sewer Revenues less Current Sanitary Sewer Expenses.
Ordinance means
this Ordinance as from time to time amended in accordance with its terms.
Outstanding
means, as of the date of determination, all Bonds issued and delivered under this
Ordinance, except:
(1) Bonds cancelled by the Paying Agent or
delivered to the Paying Agent for cancellation;
(2) Bonds for the payment of the principal or
redemption price of and interest on which money or Defeasance Securities are
held under Section 1101;
(3) Bonds in exchange for which, or in lieu of
which, other Bonds have been registered and delivered pursuant to this
Ordinance; and
(4) Bonds allegedly mutilated, destroyed, lost,
or stolen and paid under Section 208.
Outstanding
Parity Bonds means collectively, the Series 1999A Bonds, the Series 2000A
Bonds, the Series 2000B Bonds, the Series 2001A Bonds, the Series 2001B Bonds,
the Series 2002D Bonds, the Series 2002J Bonds and the Bonds.
Outstanding
Parity Bond Ordinance means collectively, the Series 1999A Ordinance, the
Series 2000A Ordinance, the Series 2000B Ordinance, the Series 2001A Ordinance,
the Series 2001B Ordinance, the Series 2002D Ordinance, the Series 2002J
Ordinance and this Ordinance.
Outstanding
Senior Bonds means collectively, the Series 1992B Bonds, the Series 1995A
Bonds, the Series 1996A Bonds, the Series 1997A Bonds and the Series 1998A
Bonds.
Outstanding
Senior Bond Ordinance means collectively, the Series 1992B Ordinance, the
Series 1995A Ordinance, the Series 1996A Ordinance, the Series 1997A Ordinance
and the Series 1998A Ordinance.
Parity Bonds
means the Outstanding Parity Bonds and any parity bonds issued under Section
1002 hereof payable from the Net Sanitary Sewer Revenues on a parity basis
with the Bonds.
Parity Ordinance
means the Outstanding Parity Bond Ordinance and the ordinance under which any
other Parity Bonds are issued.
"Participants"
means those financial institutions for whom the Depository effects book-entry transfers
and pledges of securities deposited with the Depository.
Paying Agent
means the paying agent for the Series 2004A Bonds appointed by the Acting
Director of Finance.
Permitted
Investments means any of the following securities, if and to the extent the
same are at the time legal for investment of the moneys held in the funds and
accounts listed in Section 401 hereof:
(a)
United States Treasury Securities (Bills, Notes, Bonds and Strips) Obligations
of the United States government for which the full faith and credit of the
United States are pledged for the payment of principal and interest.
(b)
United States Agency Securities. Obligations issued or guaranteed by
any agency, including government sponsored enterprises of the United States Government,
which at the time of purchase have a liquid market and a readily determinable
market value that are described as follows:
(i) U.S.
Govt. Agency Coupon and Zero Coupon Securities. Bullet coupon bonds with no
embedded options.
(ii) U.S.
Govt. Agency Discount Notes. Purchased at a discount with maximum
maturities of one (1) year.
(iii) U.S.
Govt. Agency Callable Securities. Restricted to securities callable at
par only with maximum final
maturities of five (5) years.
(iv) U.S.
Govt. Agency Step-Up Securities. The coupon rate is fixed for an initial
term. At coupon date, the coupon rate rises to a new, higher fixed interest
rate. Restricted to securities with maximum final maturities of three (3)
years.
(v) U.S.
Govt. Agency Floating Rate Securities. The coupon rate floats off of only
one index. Restricted to coupons with no interim caps that reset at least
quarterly.
(vi) U.S.
Govt. Agency Mortgage Backed Securities (MBS, CMO, Pass-Thru Securities). Restricted
to securities with final maturities of three (3) years or less or have the
final projected payment no greater than three (3) years when analyzed in a +300
basis point interest rate environment. Restricted to obligations of FNMA,
FHLMC and GNMA only.
(c)
Repurchase Agreements. Contractual agreements between the City and
commercial banks or primary government securities dealers, organized under the
laws of the United States or any state, which contractual agreements are
continuously and fully secured by any one or more of the securities described
in paragraphs (a) and (b) above and which have a market value, exclusive of
accrued interest, at all times at least equal to the principal amount of such
repurchase agreements. Securities acquired pursuant to repurchase agreements
shall be valued at the lower of the current market value or the repurchase
price thereof set forth in the repurchase agreement. The Bond Market
Associations guidelines for the Master Repurchase Agreement will be used and
will govern all repurchase agreement transactions. All repurchase agreements
shall result in transfer of legal title to identified securities that are
segregated in a custodial or trust account for the benefit of the Paying Agent
or delivered to the Paying Agent. Repurchase agreement transactions will be
either physical delivery or tri-party.
(d)
Bankers Acceptances. Bankers acceptances issued by domestic
commercial banks possessing the highest rating issued by Moodys Investor
Services, Inc. or Standard and Poors Corporation.
(e)
Commercial Paper. Commercial paper issued by domestic corporations,
which has received the highest rating issued by Moodys Investor Services,
Inc. or Standard and Poors Corporation. Eligible paper is further limited to
issuing corporations that have total assets in excess of five hundred million
dollars ($500,000,000) and are not listed on Credit Watch with negative
implications by any nationally recognized rating agency at the time of
purchase.
(f)
Any full faith and credit obligations of the State of Missouri rated at least A
or A2 by Standard and Poors or Moodys.
(g)
Any full faith and credit obligations of any county in which the City is
located rated AA or Aa2 by Standard and Poors or Moodys.
(h)
Any full faith and credit obligations of any school district in Kansas City,
Missouri rated AA or Aa2 by Standard and Poors or Moodys.
(i) Any
full faith and credit obligations or revenue bonds of the City of Kansas City,
Missouri rated AA or Aa2 by Standard and Poors
or Moodys.
(j)
Any municipal obligation as defined in (f), (g), (h) or (i) that is not rated
but either pre-refunded or escrowed to maturity with U.S. Treasury Securities
as to both principal and interest.
(k)
Money market mutual funds registered under the Federal Investment Company Act
of 1940, whose shares are registered under the Federal Securities Act of 1933,
rated in either of the two highest categories by Moodys and Standard &
Poors (in either case without regard to any modifier).
(l)
Such other investments not described above that are allowed pursuant to
Missouri law.
References
to particular ratings and rating categories in this definition are applicable
only at the time of purchase of the Permitted Investment.
Purchaser means
the original purchaser of the Bonds as named in the Terms Ordinance.
Record Date
means the 15th day (whether or not a Business Day) of the calendar
month next preceding the applicable Interest Payment Date.
Sewer Fund
means the account created by Section 401A.
Sanitary Sewer
Revenues means all income and revenues derived by the City from the Sanitary
Sewer System, including any amounts deposited in the Sewer Fund of the Combined
System Revenue Fund, but excluding any profits or losses on the early
extinguishment of debt or on the sale or other disposition of investments or
fixed or capital assets not in the ordinary course of business.
Sanitary Sewer
System or System means the Citys sanitary sewerage system, including sanitary
sewers, combined sewers, lift and pumping stations, treatment plants, with the
appurtenances necessary, useful and convenient for the collection, treatment,
purification and disposal of the sewage and shall include any part of the
system located outside of the corporate limits of the City, and shall also
include all extensions and improvements in and to the system hereafter made or
acquired by the City, wherever located.
Sanitary Sewer
System Revenue Bonds means collectively the Outstanding Senior Bonds, the
Bonds, Parity Bonds and all other revenue bonds which are payable from the Net
Sanitary Sewer Revenues.
"Securities
Depository" means initially, The Depository Trust Company, New York, New
York, and its successors and assigns.
Series 2004A
Bonds or Bonds means the City of Kansas City, Missouri, Sanitary Sewer
System Revenue Bonds, Series 2004A.
SRF Program
Bonds means the Series 1992B Bonds, the Series 1995A Bonds, the Series 1996A
Bonds, the Series 1997A Bonds, the Series 1998A Bonds, the Series 1999A Bonds,
the Series 2000A Bonds, the Series 2000B Bonds, the Series 2001B Bonds, the
Series 2002J Bonds and any additional bonds issued under the State Revolving
Fund Program administered jointly by the Missouri Department of Natural Resources
and the State Environmental Improvement and Energy Resources Authority of the
State.
SRF Subsidy
means the amount of investment earnings which will accrue on the reserve
account for any SRF Program Bonds during each Fiscal Year.
State means the
State of Missouri.
State Revolving
Fund Program means the Missouri Leveraged State Water Pollution Control
Revolving Fund Program of the Missouri Department of Natural Resources.
"Stated
Maturity" when used with respect to any Bond or any installment of
interest thereon means the date specified in the Ordinance as the fixed date on
which the principal of such Bond or such installment of interest is due and
payable.
Surplus Account
means the fund or account created or ratified and confirmed by Section 401.
Terms Ordinance
means an ordinance of the City adopted prior to the issuance of the Bonds,
which establishes the principal amounts, maturities, interest rates and sinking
fund redemption provisions for the Bonds.
ARTICLE II
AUTHORIZATION OF BONDS
Section 201. Authorization
of Bonds. The Bonds are authorized and directed to be issued in a series
designated as the Sanitary Sewer System Revenue Bonds, Series 2004A in an
aggregate original principal amount not to exceed $20,000,000 for the purposes
of this Ordinance.
Section 202. Security
for Bonds.
(a) The Bonds
are special, limited obligations of the City payable solely from, and secured
by a pledge of, the Net Sanitary Sewer Revenues. The taxing power of the City
is not pledged to the payment of the Bonds. The Bonds do not constitute a
general obligation of the City or an indebtedness of the City within the
meaning of any constitutional, statutory or charter provision, limitation or
restriction.
(b) The Bonds
are junior and subordinate to the Outstanding Senior Bonds with respect to
payment of principal and interest from the Net Sanitary Sewer Revenues. The
Bonds are not payable from the Combined System Revenues derived from the
stormwater portion of the Combined System. In the event of any default in the
payment of the Outstanding Senior Bonds, the Combined System Revenues will be
applied solely to the payment of the principal of and interest on the
Outstanding Senior Bonds until the default is cured. The Bonds are issued on a
parity with the Outstanding Parity Bonds.
Section 203. Description
of the Bonds. The Bonds shall consist of fully registered bonds
without coupons, numbered from R-1 upward, in the denomination of $5,000 or any
integral multiple thereof and not exceeding the principal amount of Bonds
maturing in the year in which such Bond becomes due, as may be specified by the
Owner of such Bond. The Bonds, as originally issued or issued upon transfer, exchange
or substitution, shall be substantially in the form set forth in Section 204 of
this Ordinance, with appropriate insertions and deletions as are approved by
the Acting Director of Finance, which approval will be conclusively evidenced
by the Acting Director of Finance's signature on the Bonds. The Bonds shall be
subject to registration, transfer and exchange as provided in Section 207 of
this Ordinance. The Bonds shall be dated April 1, 2004, shall become due in the
amounts on the Stated Maturities (subject to optional and mandatory redemption
prior to their Stated Maturities as provided in Article III hereof), and shall
bear interest at the rates per annum to be determined upon the sale of the
Bonds as set forth in the Terms Ordinance.
At the election
of the Purchaser of the Series 2004A Bonds, term Series 2004A Bonds may be
issued in lieu of serial Bonds with Stated Maturities as in this section
provided and such term Bonds shall be subject to mandatory redemption in the
annual amounts and on the dates set forth in this section as the Stated
Maturities for such serial Bonds.
The Bonds shall
bear interest (computed on the basis of a 360-day year of twelve 30-day months)
from the most recent Interest Payment Date to which interest has been paid in full
or, if no interest has been paid, from April 1, 2004. Interest on the Bonds
shall be payable semiannually on January 1 and July 1 in each year, commencing
January 1, 2005, and at their Stated Maturity. Interest is computed on the
basis of a 360-day year of twelve 30-day months from the Dated Date or from the
most recent Interest Payment Date to which interest has been paid or provided
for and is payable on each Interest Payment Date.
Section 204. Form
of Bond. The Bonds will be in substantially the following form, with
appropriate insertions and deletions as are approved by the Acting Director of
Finance, which approval will be conclusively evidenced by the Acting Director
of Finances signature on the Bond:
UNITED STATES OF AMERICA
STATE OF MISSOURI
Registered Registered
No. R- $________
CITY OF KANSAS CITY, MISSOURI
SANITARY SEWER SYSTEM REVENUE BOND
SERIES 2004A
Interest
Rate Maturity
Date Dated Date CUSIP
Number
January
1, 2024 April 1, 2004
REGISTERED
OWNER:
PRINCIPAL AMOUNT: _____________________
DOLLARS
THE
CITY OF KANSAS CITY, MISSOURI, a constitutional charter city and political
subdivision of the State of Missouri (the City), for value received, hereby
promises to pay to the Owner shown above, or registered assigns, the Principal
Amount shown above on the Maturity Date shown above, and to pay interest
thereon at the annual Interest Rate referenced above (computed on the basis of
a 360-day year of twelve 30-day months), payable semiannually on January 1 and
July 1 in each year, commencing January 1, 2005 (each an Interest Payment Date),
from the Dated Date shown above or from the most recent Interest Payment Date
to which interest has been paid or duly provided for until the Principal Amount
has been paid.
The
principal of and redemption premium, if any, on this Bond will be paid at
maturity or upon earlier redemption to the person in whose name this Bond is
registered at the maturity or redemption date, upon presentation and surrender
of this Bond at the principal office of First Bank of Missouri in Gladstone,
Missouri (the Paying Agent). The interest payable on this Bond on any
Interest Payment Date will be paid by check or draft mailed by the Paying Agent
to the person in whose name this Bond is registered on the registration books
maintained by the Paying Agent at the close of business on the Record Date.
The Record Date is the fifteenth day (whether or not a business day) of the
calendar month next preceding the Interest Payment Date. The principal of and
redemption premium, if any, and interest on the Bonds is payable by electronic
transfer in immediately available federal funds to a bank in the continental
United States of America pursuant to instructions from the Owner received by
the Paying Agent prior to the Record Date. The principal of, redemption
premium, if any, and interest on this Bond is payable in lawful money of the
United States of America.
This
Bond is one of a duly authorized series of bonds of the City designated Sanitary
Sewer System Revenue Bonds, Series 2004A aggregating the principal amount of
$20,000,000 (the Series 2004A Bonds), issued by the City for the purpose of
extending and improving the Sanitary Sewer System, under the authority of and
in full compliance with Chapter 250 of the Revised Statutes of Missouri and
[__Committee Substitute for__] Ordinance ________ and Ordinance________ adopted
by the governing body of the City (the Ordinance).
The
Bonds are being issued by means of a book-entry system with no physical
distribution of bond certificates to be made except as provided in the
Ordinance. One Bond certificate with respect to each date on which the Bonds
are stated to mature, registered in the nominee name of the Securities
Depository, is being issued and required to be deposited with Securities
Depository and immobilized in its custody. The book-entry system will evidence
positions held in the Bonds by the Securities Depositorys Participants,
beneficial ownership of the Bonds in authorized denominations being evidenced
in the records of such Participants. Transfer of ownership shall be effected on
the records of the Securities Depository and its Participants pursuant to rules
and procedures established by the Securities Depository and its Participants.
The City, the Bond Registrar and the Paying Agent will recognize the Securities
Depository nominee, while the Registered Owner of the Bond, as the Owner of the
Bond for all purposes, including (i) payments of principal of, and redemption
premium, if any, and interest on this Bond (ii) notices, and (iii) voting.
Transfers of principal, interest and any redemption premium payments to
beneficial owners of the Bonds by Participants of the Securities Depository
will be the responsibility of such Participants and other nominees of such
beneficial owners. The City, the Bond Registrar and the Paying Agent will not
be responsible or liable for such transfers of payments or for the maintaining,
supervising or reviewing the records maintained by the Securities Depository,
the Securities Depository nominee, its Participants or persons acting through
such Participants. While the Securities Depository nominee is the owner of this
bond, notwithstanding the provisions hereinabove contained payments of
principal of and interest on this Bond shall be made in accordance with
existing arrangements among the City, the Paying Agent and the Securities
Depository.
EXCEPT
AS OTHERWISE PROVIDED IN THE ORDINANCE THE GLOBAL BOND MAY BE TRANSFERRED, IN
WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR
TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES
DEPOSITORY.
THE
CITY hereby covenants with the Registered Owner of this Bond that it will keep
and perform all covenants and agreements contained in the Ordinance, and will
fix, establish, maintain and collect such rates, fees and charges for the use
and services furnished by or through the System, as will produce revenues
sufficient to pay the costs of operation and maintenance of the System, pay the
principal of and interest on the Bonds as and when the same become due and
provide reasonable and adequate reserve funds. Reference is made to the
Ordinance for a description of the covenants and agreements made by the City
with respect to the collection, segregation and application of the revenues of
the System, the nature and extent of the security for the Bonds, the rights,
duties and obligations of the City with respect thereto, and the rights of the
Registered Owners thereof.
Certain
Series 2004A Bonds are subject to mandatory redemption and payment prior to
maturity pursuant to the mandatory redemption requirements of the Ordinance, at
a redemption price equal to 100% of the principal amount plus accrued interest
to the redemption date.
At
the option of the City, certain Series 2004A Bonds may be called for redemption
and payment prior to maturity in whole or in part on any date as provided in
the Ordinance. The Series 2004A Bonds will be optionally redeemed in part in
integral multiples of $5,000 from the maturities selected by the City. Upon
redemption, the sinking fund redemption amounts for each maturity will be
proportionately reduced, subject to rounding to integral multiples of $5,000.
The City will give written notice to the Paying Agent, designating the amount
of each maturity redeemed and the reduction in each sinking fund installment,
subject to verification by the Paying Agent.
The
Paying Agent will give notice of redemption, unless waived, by mailing a
redemption notice by registered or certified mail at least 30 days prior to the
date fixed for redemption, to the Owner of each Bond to be redeemed at the
address shown on the Bond Register. If notice of redemption has been given or
waived, the Bonds or portions of Bonds called for redemption will become due
and payable on the redemption date at the redemption price specified in the
notice. From and after the redemption date the Bonds called for redemption
will cease to bear interest date unless the City defaults in the payment of the
redemption price.
The
Bonds are limited obligations of the City payable solely from, and secured as
to the payment of principal and interest by a pledge of, the Net Sanitary Sewer
Revenues (as defined in the Ordinance). The taxing power of the City is not
pledged to the payment of the Bonds either as to principal or interest. The
Bonds do not constitute a general obligation of the City or an indebtedness of
the City within the meaning of any constitutional, statutory or charter provision,
limitation or restriction. Under the conditions set forth in the Ordinance,
the City has the right to issue additional parity bonds payable from, and
secured by, the Net Sanitary Sewer Revenues.
The
Bonds are junior and subordinate to the Outstanding Senior Bonds with respect
to payment of principal and interest from the Net Sanitary Sewer Revenues. The
Bonds are not payable from the stormwater portion of the Combined System
Revenues (as defined in the Ordinance). In the event of any default in the
payment of the Outstanding Senior Bonds, the Combined System Revenues will be
applied solely to the payment of the principal of and interest on the
Outstanding Senior Bonds until the default is cured. The Bonds are issued on a
parity with respect to payment of principal and interest from the Net Sanitary
Sewer Revenues and in all other respects with the Outstanding Parity Bonds (as
defined in the Ordinance).
The
City covenants with the Owner of this Bond to keep and perform all covenants
and agreements contained in the Ordinance, and the City will fix, establish,
maintain and collect rates, fees and charges for the use and services furnished
by or through the Sanitary Sewer System to produce Revenues sufficient to pay
the operation and maintenance costs of the Sanitary Sewer System, pay the
principal of and interest on the Bonds and provide reasonable and adequate
reserve funds. Reference is made to the Ordinance for a description of the
agreements made by the City with respect to the collection, segregation and
application of the Revenues, the nature and extent of the security for the
Bonds, the rights, duties and obligations of the City with respect to the
Bonds, and the rights of the Owners.
This
Bond may be transferred or exchanged, as provided in the Ordinance, only upon
the registration books kept for that purpose at the above-mentioned office of
the Paying Agent. Upon surrender of any Bond at the principal office of the
Paying Agent, the Paying Agent will transfer or exchange the 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 must be accompanied by
a written instrument of transfer or authorization for exchange, in a form and
with guarantee of signature satisfactory to the Paying Agent, duly executed by
the Owner or by the Owners authorized agent. All Bonds presented for transfer
or exchange must be surrendered to the Paying Agent for cancellation. For
every exchange or transfer of Bonds the City or the Paying Agent may levy a
charge sufficient to reimburse it for any tax, fee or other governmental charge
required to be paid for the exchange or transfer. The charge must be paid by
the person requesting the exchange or transfer. Payment of the charge is a
condition precedent to the exchange or transfer.
This
Bond will not be valid or be entitled to any security or benefit under the
Ordinance until the Certificate of Authentication has been executed by the
Paying Agent.
IT
IS HEREBY CERTIFIED AND DECLARED that all acts, conditions and things required
to exist, happen and be performed precedent to the issuance of the Bonds have
existed, happened and been performed in due time, form and manner as required
by law, and that before the issuance of the Bonds, provision has been duly made
for the collection, segregation and application of the income and revenues of
the Sanitary Sewer System as provided in the Ordinance.
IN
WITNESS WHEREOF, the City of Kansas City, Missouri, has executed this Bond by
causing it to be signed by the manual or facsimile signature of its Mayor,
attested by the manual or facsimile signature of its City Clerk, and
countersigned by the manual or facsimile signature of its Acting Director of
Finance, with its official seal affixed or imprinted.
CERTIFICATE
OF AUTHENTICATION CITY OF KANSAS CITY, MISSOURI
This
Bond is one of the Bonds
of
the issue described
in
the within-mentioned Ordinance.
By:
_______________________________
Mayor
Registration
Date: __________________
FIRST
BANK OF MISSOURI
Paying
Agent
(Seal)
ATTEST:
By ______________________________
Authorized Signatory City
Clerk
COUNTERSIGNED
_____________________________
Acting Director of Finance
===============================================
STATEMENT OF INSURANCE
MBIA Insurance
Corporation (the "Insurer") has issued a policy containing the
following provisions, such policy being on file at First Bank of Missouri,
Gladstone, Missouri.
The Insurer, in
consideration of the payment of the premium and subject to the terms of this
policy, hereby unconditionally and irrevocably guarantees to any owner, as
hereinafter defined, of the following described obligations, the full and
complete payment required to be made by or on behalf of the City to First Bank
of Missouri or its successor (the "Paying Agent") of an amount equal
to (i) the principal of (either at the stated maturity or by any advancement of
maturity pursuant to a mandatory sinking fund payment) and interest on, the
Obligations (as that term is defined below) as such payments shall become due
but shall not be so paid (except that in the event of any acceleration of the
due date of such principal by reason of mandatory or optional redemption or
acceleration resulting from default or otherwise, other than any advancement of
maturity pursuant to a mandatory sinking fund payment, the payments guaranteed
hereby shall be made in such amounts and at such times as such payments of
principal would have been due had there not been any such acceleration); and
(ii) the reimbursement of any such payment which is subsequently recovered from
any owner pursuant to a final judgment by a court of competent jurisdiction
that such payment constitutes an avoidable preference to such owner within the
meaning of any applicable bankruptcy law. The amounts referred to in clauses
(i) and (ii) of the preceding sentence shall be referred to herein collectively
as the "Insured Amounts." "Obligations" shall mean:
$20,000,000
CITY OF KANSAS CITY, MISSOURI
SANITARY SEWER SYSTEM REVENUE BONDS
SERIES 2004A
Upon receipt of
telephonic or telegraphic notice, such notice subsequently confirmed in writing
by registered or certified mail, or upon receipt of written notice by
registered or certified mail, by the Insurer from the Paying Agent or any owner
of an Obligation the payment of an Insured Amount for which is then due, that
such required payment has not been made, the Insurer on the due date of such
payment or within one business day after receipt of notice of such nonpayment,
whichever is later, will make a deposit of funds, in an account with U.S. Bank
Trust National Association, in New York, New York, or its successor, sufficient
for the payment of any such Insured Amounts which are then due. Upon
presentment and surrender of such Obligations or presentment of such other
proof of ownership of the Obligations, together with any appropriate
instruments of assignment to evidence the assignment of the Insured Amounts due
on the Obligations as are paid by the Insurer, and appropriate instruments to
effect the appointment of the Insurer as agent for such owners of the
Obligations in any legal proceeding related to payment of Insured Amounts on
the Obligations, such instruments being in a form satisfactory to U.S. Bank
Trust National Association, U.S. Bank Trust National Association shall disburse
to such owners or the Paying Agent payment of the Insured Amounts due on such
Obligations, less any amount held by the Paying Agent for the payment of such
Insured Amounts and legally available therefor. This policy does not insure
against loss of any prepayment premium which may at any time be payable with
respect to any Obligation.
As used herein,
the term "owner" shall mean the registered owner of any Obligation as
indicated in the books maintained by the Paying Agent, the City, or any
designee of the City for such purpose. The term owner shall not include the
City or any party whose agreement with the Issuer constitutes the underlying
security for the Obligations.
Any service of
process on the Insurer may be made to the Insurer at its offices located at 113
King Street, Armonk, New York 10504 and such service of process shall be valid
and binding.
This policy is
non-cancellable for any reason. The premium on this policy is not refundable
for any reason including the payment prior to maturity of the Obligations.
MBIA INSURANCE CORPORATION
===============================================
ASSIGNMENT
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
Print or Type Name of Transferee
the within Bond and all
rights thereunder, and hereby irrevocably constitutes and appoints agent
to transfer the within Bond on the registration books kept by the Paying Agent,
with full power of substitution in the premises.
_______________________________________
Dated: By:
___________________________________
_______________________________________
NOTICE: The signature to this assignment must
correspond with the name of the Owner as it appears upon the face of the within
Bond in every particular.
Signature Guaranteed By:
, Authorized Officer
First
Bank of Missouri
NOTICE: Signature(s) must be guaranteed by an
eligible guarantor institution as defined by SEC Rule 17Ad-15 (17 CFR
240.17Ad-15).
===============================================
Section 205. Designation
of Paying Agent. The Acting Director of Finance shall designate the Paying
Agent for the payment of the principal of and interest on the Bonds and bond
registrar with respect to the registration, transfer and exchange of Bonds.
The City will at
all times maintain a Paying Agent meeting the qualifications herein described
for the performance of the duties of Paying Agent and bond registrar
hereunder. The City reserves the right to appoint a successor Paying Agent by
(1) filing with the bank or trust company then performing such function a
notice of the termination of such bank or trust company and appointing a
successor, and (2) causing notice to be given by first class mail to each
Bondowner. No resignation or removal of the Paying Agent shall become effective
until a successor has been appointed and has accepted the duties of the Paying
Agent.
Every Paying
Agent appointed hereunder shall at all times be (1) a commercial banking
association or corporation or trust company located in the State of Missouri
organized and in good standing and doing business under the laws of the United
States of America or of the State of Missouri and subject to supervision or
examination by federal or state regulatory authority and (2) shall have a
reported capital (exclusive of borrowed capital) plus surplus of not less than
$100,000,000 or consideration may be given by the City to a bank not meeting
this amount if the bank submits an acceptable form of guarantee for its
financial obligations to the City. If such institution publishes reports of
conditions at least annually pursuant to law or regulation, then for the
purposes of this Section the capital and surplus of such institution shall be
deemed to be its capital and surplus as set forth in its most recent report of
condition so published.
The Paying Agent
shall be paid in accordance with its proposal for fees and expenses submitted
to the Acting Director of Finance as an operating expense of the System.
Section
206. Method and Place of Payment of Bonds.
(a) Payment of
the Bonds will be made with any coin or currency that is legal tender for the
payment of debts due the United States of America on the payment date.
(b) Each payment
of principal of and redemption premium, if any, payable on each Bond will be
made at maturity or upon earlier redemption to the Owner shown in the Bond
Register at the maturity or optional redemption date of each Bond, upon
presentation and surrender of the Bond at the principal office of the Paying
Agent. The payment of interest payable on each Bond on any Interest Payment
Date will be made by check or draft mailed by the Paying Agent to the address
of the Owner shown in the Bond Register. The principal of and redemption
premium, if any, and interest on the Bonds is payable by electronic transfer in
immediately available federal funds to a bank in the continental United States
of America pursuant to instructions from any Owner received by the Paying Agent
prior to the Record Date.
(c) The Paying
Agent will keep a record of payment of principal of, redemption premium, if
any, and interest on all Bonds and, at least annually at the request of the
City, will forward a copy or summary of the record of payments to the City.
Section
207. Registration, Transfer and Exchange of Bonds.
(a) The City
will cause the Paying Agent to keep the Bond Register. Each Bond when issued
will be registered in the name of the Owner on the Bond Register. Bonds will
be transferred and exchanged only upon the Bond Register.
(b) Upon
surrender of any Bond at the principal office of the Paying Agent, the Paying
Agent will transfer or exchange the 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 must be accompanied by a written
instrument of transfer or authorization for exchange, in a form and with
guarantee of signature satisfactory to the Paying Agent, duly executed by the
Owner or by the Owners authorized agent. All Bonds presented for transfer or
exchange must be surrendered to the Paying Agent for cancellation.
(c) For every
exchange or transfer of Bonds the City or the Paying Agent may levy a charge
sufficient to reimburse it for any tax, fee or other governmental charge
required to be paid for the exchange or transfer. The charge must be paid by
the person requesting the exchange or transfer. Payment of the charge is a
condition precedent to the exchange or transfer.
(d) The City and
the Paying Agent will treat the person in whose name any Bond is registered as
the absolute owner of the Bond, whether or not payment of the Bond is overdue,
for the purpose of receiving payment of the principal of, redemption premium,
if any, and interest on the Bond and for all other purposes. All payments made
to any Owner or upon the Owners order will be valid and effectual to satisfy
and discharge the Citys liability for payment of the Bond to the extent of the
sum or sums paid. Neither the City nor the Paying Agent will be affected by
any notice to the contrary.
(e) At
reasonable times and under reasonable rules established by the Paying Agent,
the Owners of 25% or more in principal amount of the Outstanding Bonds, or
their representative designated in a manner satisfactory to the Paying Agent,
may inspect and copy the Bond Register.
Section
208. Execution, Authentication and Delivery of Bonds.
(a) Each Bond
must be signed by the manual or facsimile signature of the Mayor and attested
by the manual or facsimile signature of the City Clerk and countersigned by the
Acting Director of Finance, and have the official seal of the City affixed or
imprinted. If any officer whose manual or facsimile signature appears on any
Bond ceases to be an officer before the delivery of any Bond signed by the
officer, the manual or facsimile signature on the Bond will be valid and
sufficient for all purposes of this Ordinance.
(b) The Mayor,
the City Clerk and the Acting Director of Finance are directed to prepare and
execute the Bonds as specified in this Article, and when executed, to deliver
the Bonds to the Paying Agent for authentication. Upon authentication, the
Paying Agent will deliver the Bonds to the Bondowner, upon payment of the
purchase price for the Bonds.
(c) Each Bond
will be authenticated by any authorized officer or employee of the Paying
Agent. No Bond is entitled to any security or benefit under this Ordinance or
be valid or obligatory for any purpose until authenticated by the Paying Agent.
Section
209. Mutilated, Destroyed, Lost and Stolen Bonds.
(a) 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 security or indemnity as required by them, in the absence of
notice to the City or the Paying Agent that the Bond has been acquired by a
bona fide purchaser, the City will execute and the Paying Agent will register
and deliver, in exchange for or in lieu of any mutilated, destroyed, lost or
stolen Bond, a new Bond of the same maturity and of like tenor and principal
amount. If the Bond has become or is about to become due, the City may pay the
Bond instead of issuing a new Bond.
(b) 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
imposed and any other expenses (including the fees and expenses of the Paying
Agent) connected with the issuance of the Bond.
(c) Every new
Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost
or stolen Bond will constitute a replacement of the prior obligation of the
City, whether or not the mutilated, destroyed, lost or stolen Bond is
enforceable by anyone at any time, and will be entitled to all the benefits of
this Ordinance equally and ratably with all other Outstanding Bonds.
Section 210. 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, will be cancelled immediately upon the payment or
redemption and the Paying Agents receipt of the Bonds. Cancelled Bonds will
be periodically destroyed by the Paying Agent in accordance with the customary
practice of the Paying Agent and applicable retention laws.
Section
211. Sale of the Bonds; Authorization and Execution of Documents.
(a) The sale of
the Bonds in accordance with the terms of the Notice of Bond Sale dated
____________, 2004, is approved. The Acting Director of Finance is authorized
to approve the award of the Bonds for the best bid received in accordance with
the Notice of Bond Sale.
Section 212. Preliminary
and Final Official Statement. The Preliminary Official Statement, in
the form on file in the office of the Acting Director of Finance, is hereby
ratified and approved, and the final Official Statement is hereby authorized
and approved by supplementing, amending and completing the Preliminary Official
Statement, with such changes and additions thereto as are necessary to conform
to and describe the transaction. The Acting Director of Finance is hereby
authorized to execute the final Official Statement as so supplemented, amended
and completed, and the use and public distribution of the Official Statement by
the Purchaser of the Bonds in connection with the reoffering of the Bonds is
hereby 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.
For the purpose
of enabling the Purchaser to comply with the requirements of Rule
15c2-12-(b)(1) of the Securities and Exchange Commission, the City hereby deems
the information regarding the City contained in the Preliminary Official
Statement to be "final" as of its date, except for the omission of
such information as is permitted by Rule 15c2-12(b)(1), and the appropriate
officers of the City are hereby authorized, if requested, to provide the
Purchaser a letter or certification to such effect and to take such other
actions or execute such other documents as such officers in their reasonable
judgement deem necessary to enable the Purchaser to comply with such
requirement of such Rule.
The City agrees
to provide to the Purchaser within seven Business Days of the date of the sale
of Bonds sufficient copies of the final Official Statement to enable the
Purchaser to comply with the requirements of Rule 15c2-12(b)(4) of the
Securities and Exchange Commission and with the requirements of Rule G-32 of
the Municipal Securities Rulemaking Board.
Section 213. Book-Entry
Only System.
(a)
Notwithstanding any other provision hereof, upon initial issuance of the Bonds,
the Bonds shall be registered in the name of Cede & Co., as nominee of DTC.
Except as provided in this Section 6210, all of the outstanding Bonds
shall be registered in the name of Cede & Co., as nominee of DTC. The
definitive Bonds shall be initially issued in the form of one typewritten
certificate for each stated maturity of the Bonds.
(b) With respect
to the Bonds registered in the name of Cede & Co., as nominee of DTC, the
City and the Paying Agent shall have no responsibility or obligation to any DTC
Participant or to any person on behalf of whom such a DTC Participant holds an
interest in the Bonds, without limiting the immediately preceding sentence, the
City and the Paying Agent shall have no responsibility or obligation with
respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC
Participant with respect to any ownership interest in the Bonds, (ii) the
delivery to any DTC Participant or any other person, other than a Registered
Owner, as shown on the registration books of the City maintained by the Paying
Agent, of any notice with respect to the Bonds, including any notice of
redemption, or (iii) the payment to any DTC Participant or any other person,
other than a Registered Owner, as shown in the registration books of the City
maintained by the Paying Agent, of the principal, interest and premium, if any,
with respect to the Bonds. Notwithstanding any other provision of this
Ordinance to the contrary, the City and the Paying Agent shall be entitled to
treat and consider the person in whose name each Bond is registered in the Bond
Register as the absolute owner of such Bond for the purpose of payment of the
principal, interest and premium, if any, with respect to the Bonds, for the
purpose of registering transfer with respect to such Bond, and for all other
purposes whatsoever. The Paying Agent shall pay the principal, interest and
premium, if any, with respect to the Bonds only to or upon the order of the
respective Owners, as shown in the registration books of the City maintained by
the Paying Agent, as provided in this Ordinance, or their representative duly
authorized in writing, and all such payments shall be valid and effective to
fully satisfy and discharge the City's obligations with respect to payment of
the principal, interest and premium, if any, on the Bonds to the extent of the
sum or sums so paid. No person other than a Registered Owner shall receive a
Bond certificate evidencing the obligation of the City to make payments of
amounts due pursuant to this Ordinance. Upon delivery by DTC to the Paying
Agent of written notice to the effect that DTC has determined to substitute a
new nominee in place of Cede & Co., the phrase "Cede & Co" in
this Ordinance shall refer to such new nominee of DTC.
(c) Successor
Securities Depository: Transfer Outside Book-Entry Only System. In the
event that (i) the City (or DTC Participants owning at least fifty percent
(50%) of the Bonds based on current DTC records) determines that DTC is
incapable of discharging its responsibilities described herein and in any
representation letter ("Letter of Representations") of the City and
the Paying Agent to DTC, (ii) the agreement among the City, the Paying Agent
and DTC evidenced by any such Letter of Representations, or (iii) the City (or
DTC Participants owning at least fifty percent (50%) of the Bonds based on
current DTC records) determines that it is in the best interest of the
Beneficial Owners of the Bonds that they be able to obtain certificated Bonds,
the City shall (A) appoint a successor securities depository, qualified to act
as such under Section 17(a) of the Securities and Exchange Act of 1934, as
amended, notify DTC and DTC Participants of the appointment of such successor
securities depository and transfer one or more Bonds to such successor
securities depository, in which event the Bonds shall be registered in the name
of the successor securities depository or its nominee, or (B) notify DTC and DTC
Participants of the availability through DTC of certificated Bonds and transfer
one or more separate Bonds to DTC Participants having Bonds credited to their
DTC accounts, in which event the Bonds shall be registered in whatever name or
names Registered Owners transferring or exchanging Bonds shall designate, in
accordance with the provisions of this Ordinance. In connection therewith, the
Paying Agent may rely conclusively upon information provided by DTC with
respect to the identity and interests of the DTC Participants and upon
information provided by said DTC Participants with respect to the Beneficial
Owners of the Bonds. The City under such circumstances agrees to provide to the
Paying Agent a sufficient supply of Bond certificates to meet the Paying
Agent's requirements, including without limitation Bond certificates for use in
the case of transfers and exchanges of Bonds.
(d) Payments
to Cede & Co. Notwithstanding any other provision of this Ordinance to
the contrary, so long as any Bonds are registered in the name of Cede &
Co., as nominee of DTC, all payments of the principal, interest and premium, if
any, with respect to such Bonds, and all notices with respect to such Bonds,
shall be made and given, respectively, in the manner provided in the Letter of
Representations of the City and the Paying Agent to DTC.
Section 214. Public
Sale of Bonds. The public sale of the Bonds is hereby authorized via PARITY.
Notice of the public sale of the Bonds is authorized to be given by electronic
transmission and at the website address of www.springsted.com. The electronic
dissemination of the Preliminary Official Statement is hereby approved and
authorized. All bids for the Bonds should be submitted on the PARITY website;
however, telephone, telefax or personal delivery bids will also be accepted.
Section 215. Persons
Deemed Owners of Bonds. The Person in whose name any Bond shall be
registered in the Bond Register shall be deemed and regarded by the City, the
Bond Registrar and the Paying Agent as the absolute owner thereof, whether such
Bond shall be overdue or not, for the purpose of receiving payment therefor or
on account thereof and for all purposes, and neither the City, the Bond
Registrar nor the Paying Agent shall be affected by notice to the contrary.
Payment of or on account of the principal of, premium, if any, and interest on
any Bond shall be made only to or upon the order of the Owner thereof or agent
duly authorized in writing. All such payments shall be valid and effectual to
satisfy and discharge the liability upon such Bond, including the interest
thereon, to the extent of the sum or sums so paid.
Section 216. Selection
of Bond Counsel and Financial Advisor. The City has selected and hereby
retains Gilmore & Bell, P.C., Kansas City, Missouri, and The Martinez Law
Firm, LLC, Kansas City, Missouri, to serve as co-bond counsel for this
transaction. The City also has selected and hereby retains Springsted, Inc.,
Saint Paul, Minnesota, and Valdes & Moreno, Inc., Kansas City, Missouri, as
its co-financial advisors for the transaction.
ARTICLE III
REDEMPTION OF BONDS
Section 301. Redemption
of Bonds. The Bonds shall be subject to redemption and payment prior to
their Stated Maturities as follows:
(a) Mandatory
Sinking Fund Redemption. In the event one or more term Series 2004A Bonds
are issued as provided in Section 202 of this Ordinance and as more
specifically described in the Terms Ordinance, such Series 2004A Bonds shall be
subject to mandatory redemption and payment prior to their Stated Maturity
pursuant to the mandatory redemption requirements of this Section on the dates
of the Stated Maturities for serial Series 2004A Bonds at the principal amount
thereof plus accrued interest to the Redemption Dates, without premium. The
City shall redeem on such dates the principal amounts set forth as serial
maturities by this Ordinance and the remaining principal amount of Series 2004A
Bonds maturing on the Stated Maturity of the respective term bond, shall be
paid at their Stated Maturity.
The Paying Agent
shall each year in which Bonds maturing on the Stated Maturity of the
respective term bonds, are to be redeemed pursuant to this subsection make
timely selection of such Bonds or portion of such Bonds to be so redeemed and
shall gave notice thereof as hereinafter provided. Upon instructions duly
given by the City, moneys deposited in the hereinafter referred to "2004A
Debt Service Fund" may be used at any time after January 1, in the year
next preceding the first of such mandatory redemption to purchase term Bonds
maturing on the Stated Maturity of the respective term bond, in the open market
at a price not in excess of their principal amount and moneys deposited in the
2004A Debt Service Fund may be used for the purpose of paying interest on the
Bonds so purchased at the rate specified thereon to the date of purchase. Each
bond so purchased shall be credited at 100% of the principal amount thereof on
the obligation of the City to redeem Bonds on the next mandatory redemption
date applicable to Bonds of such Stated Maturity, and the principal amount of
Bonds of such Stated Maturity to be redeemed by operation of the preceding
paragraph shall be reduced accordingly.
(b) Optional
Redemption. The Series 2004A Bonds maturing on January 1, 2015, and
thereafter shall be subject to redemption and payment prior to their Stated
Maturities at the option of the City on and after January 1, 2014, at any time
as a whole or in part on any Interest Payment Date from maturities selected by
the City (Bonds of less than a full maturity to be selected in multiples of
$5,000 principal amount by the Paying Agent in such equitable manner as it
shall designate), at the redemption price equal to the principal amount
thereof, plus accrued interest to the Redemption Date.
Section 302. Selection
of Bonds to be Redeemed. The Paying Agent shall call Bonds for redemption
and payment as herein provided upon receipt at least forty-five (45) days prior
to the Redemption Date of a written request of the City; provided, however,
that no such request shall be required for mandatory redemption of Bonds
pursuant to Section 301(a) hereof. Such request shall specify the principal
amount of the Bonds to be called for redemption, the Redemption Price or
Price(s) and the Redemption Date.
Bonds shall be
redeemed in the principal amount of $5,000 or an integral multiple thereof. In
the case of a partial redemption of Bonds of the same Stated Maturity, the
Bonds to be redeemed shall be selected by the Paying Agent from the Outstanding
Bonds of that Stated Maturity by such methods as the Paying Agent shall deem
fair and appropriate and which may provide for the selection for redemption of
a portion of the principal of Outstanding Bonds of that Stated Maturity that
have been issued in a denomination larger than $5,000. The portions of the
principal of Outstanding Bonds so selected for partial redemption shall be
equal to $5,000 or integral multiples thereof. Any Bond which is to be redeemed
only in part shall be submitted to the Paying Agent and delivered to the Bond
Registrar, who shall authenticate and deliver to the Owner of such Bond,
without service charge, a new Bond or Bonds, of any authorized denomination as
requested by such Owner in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Bond so surrendered. If the
Owner of any such Bond of a denomination greater than $5,000 shall fail to
present such Bond to the Paying Agent for payment and exchange as aforesaid,
such Bond shall, nevertheless, become due and payable on the Redemption Date to
the extent of the principal amount of such Bond called for redemption (and to
that extent only).
Section 303. Notice
and Effect of Call for Redemption. The Paying Agent shall give
written notice in the name of the City of its intention to redeem and pay Bonds
at the principal corporate trust office of the Paying Agent or such other
office as the Paying Agent may designate. Notice of redemption shall be given
by first class mail, postage prepaid, mailed not less than thirty (30) days
prior to the Redemption Date, to each Owner of Bonds to be redeemed, at such
Owner's address appearing in the Bond Register. All notices of redemption shall
state:
(a) The
Redemption Date;
(b) The
Redemption Price;
(c)
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;
(d)
That on the Redemption Date, the Redemption Price will become due and payable
upon each such Bond, and that interest thereon shall cease to accrue from and
after said date;
(e)
The place where such Bonds are to be surrendered for payment of the Redemption
Price; and
(f)
The Bond Number and CUSIP number, if any.
The
failure of the Owner of any Bond to be redeemed to receive written notice
mailed as hereinabove provided shall not affect or invalidate the redemption of
said Bond. If any Bond is called for redemption and payment as aforesaid, all
interest on such Bond shall cease from and after the date for which such call
is made, provided funds are made available to the Paying Agent for its payment
on the Redemption Date at the Redemption Price.
The
Paying Agent is also directed to comply with any mandatory or voluntary
standards then in effect for processing redemptions of municipal securities
established by the Securities and Exchange Commission. Failure to comply with
such standards shall not affect or invalidate the redemption of any Bond to be
redeemed.
ARTICLE IV
RATIFICATION AND CREATION OF FUNDS AND ACCOUNTS
Section 401. Ratification
of Funds and Accounts.
(a) The separate
funds and accounts ratified and confirmed by the Series 1992 Ordinance and
redesignated the Combined Sewer System Revenue Fund (the Combined System
Revenue Fund) and the Combined System Surplus Account (the Combined System
Surplus Account), are ratified and confirmed.
(b) The separate
accounts created or acknowledged by the Outstanding Senior Bond Ordinance are
hereby acknowledged.
(1) The Series 1998A Reserve
Account, the Series 1997A Reserve Account, the Series 1996A Reserve Fund, the
Series 1995A Reserve Fund and the Series 1992B Reserve Account are collectively
the Outstanding Senior Bond Debt Service Reserve Account; and
(2) The Series 1998A Interest Account, the
Series 1998A Principal Account, the Series 1998A Debt Service Account, the
Series 1997A Interest Account, the Series 1997A Principal Account, the Series
1997A Debt Service Account, the Series 1996A Interest Account, the Series 1996A
Principal Account, the Series 1996A Debt Service Fund, the Series 1995A
Interest Account, the Series 1995A Principal Account, the Series 1995A Debt
Service Fund, the Series 1992B Interest Account, the Series 1992B Principal
Account and the Series 1992B Debt Service Account are collectively the Outstanding
Senior Bond Debt Service Account.
(c) The separate
accounts and funds created or acknowledged by the Outstanding Parity Bond
Ordinance are hereby acknowledged.
(d) There are
hereby created the following accounts to be administered and maintained
pursuant to this Ordinance.
(1) Series 2004A Construction
Account; and
(2) Series 2004A Reserve Account (the Series
2004A Reserve Account, the Series 2004A Reserve Account, the Series 2002J
Reserve Account, the Series 2002D Reserve Account, the Series 2001B Reserve
Account, the Series 2001A Reserve Account, the Series 2000B Reserve Account,
the Series 2000A Reserve Account and the Series 1999A Reserve Account are
collectively the Outstanding Parity Bond Debt Service Reserve Account); and
(3) Debt Service Account (the Series
2004A Debt Service Account, the Series 2004A Debt Service Account, the Series
2002J Interest Account, the Series 2002J Principal Account, the Series 2002J
Debt Service Account, the Series 2002D Debt Service Account, the Series 2001B
Interest Account, the Series 2001B Principal Account, the Series 2001B Debt
Service Account, the Series 2001A Debt Service Account, the Series 2000B
Interest Account, the Series 2000B Principal Account, the Series 2000B Debt
Service Account, the Series 2000A Interest Account, the Series 2000A Principal
Account, the Series 2000A Debt Service Account, the Series 1999A Interest
Account, the Series 1999A Principal Account and the Series 1999A Debt Service
Account, are collectively the Outstanding Parity Bond Debt Service Account); and
(4) Costs
of Issuance Account.
Section 402. Administration
of Funds and Accounts.
(a) The Combined
System Revenue Fund, the Combined System Surplus Account and the Combined
System Depreciation and Replacement Account will be maintained and administered
by the City while any of the Bonds, the Outstanding Senior Bonds and the
Outstanding Parity Bonds are Outstanding.
(b) The
separate funds and accounts created or acknowledged under the Outstanding
Senior Bond Ordinance will be maintained and administered by the City while the
applicable series of bonds, for which such funds and accounts were created, are
Outstanding, all in accordance with the terms of the Outstanding Senior Bond
Ordinance.
(c) The Sewer
Fund, the Sanitary Sewer System Depreciation and Replacement Account and the
Sanitary Sewer System Surplus Account, each within the Combined System Revenue
Fund, will be maintained and administered by the City while any of the Bonds
and the Outstanding Parity Bonds are Outstanding.
(d) The other
separate funds and accounts created or acknowledged under the Outstanding
Parity Bond Ordinance will be maintained and administered by the City while the
applicable series of bonds, for which such funds and accounts were created, are
Outstanding, all in accordance with the terms of the Outstanding Parity Bond
Ordinance.
Section 403. Series
2004A Reserve Account. Simultaneously with the issuance of the Series 2004A
Bonds, the City shall provide that the Series 2004A Reserve Account shall contain
an amount equal to the Bond Reserve Requirement. In lieu of a cash deposit,
the Bond Reserve Requirement may be satisfied by a Surety Bond.
The
Acting Director of Finance is hereby authorized to execute any and all
agreements with a bond surety company (the Indemnitor) in order to effectuate
the issuance of the Surety Bond, specifically including, but not limited to,
any agreement necessary in order to reimburse the Indemnitor for moneys
advanced under the Surety Bond. In the event moneys are advanced by the
Indemnitor, the City shall reimburse the Indemnitor from all funds legally
available in the Sewer Fund, subject only to the payments required by Section
601A and Section 602(a) (1) and (2).
As
long as the Surety Bond shall be in full force and effect, the City and Paying
Agent agree to comply with the following provisions:
(i) In the event and, if appropriate, to the
extent that moneys on deposit in the 2004A Debt Service Account plus all amounts
on deposit in the 2004A Reserve Account in excess of the amount of the Surety
Bond are insufficient to pay the amount of principal and interest coming due,
then upon the later of: (A) one (1) day after receipt by the general counsel of
the Indemnitor of a demand for payment in the form attached to the Surety Bond
as Attachment 1 (the "Demand for Payment"), duly executed by the
Paying Agent certifying that funds are not available in the 2004A Debt Service
Account or the 2004A Reserve Account to pay both principal and interest on the
Bonds becoming due on the next Stated Maturity; or (B) the Stated Maturity of
the Bonds as specified in the Demand for Payment presented by the Paying Agent
to the general counsel of the Indemnitor, the Indemnitor will make a deposit of
funds in an account with the Paying Agent, sufficient for the payment to the
Paying Agent, of amounts which are then required to pay the principal of and
interest becoming due on the Bonds on such Stated Maturity of the Bonds (as
specified in the Demand for Payment) up to but not in excess of the Surety Bond
Coverage, as defined in the Surety Bond;
(ii) The Paying Agent shall after submitting to
the Indemnitor the demand for Payment as provided in (i) above, make available
to the Indemnitor all records relating to the funds and accounts maintained
under this Ordinance; and the Paying Agent shall, upon receipt of moneys
received from the draw on the Surety Bond, as specified in the Demand for
Payment, credit the 2004A Reserve Account to the extent of moneys received
pursuant to such Demand.
All
moneys in any Outstanding Parity Bond Reserve Account shall be used for the
payment of principal of and interest on the related Series of bonds for which
funds might not otherwise be available, or to pay a like amount of the last
maturing bonds of such Series; provided, however, that the City shall not make
a Demand for Payment under the Surety Bond for the purpose of paying the last
maturing Bonds. Should the City expend any portion of the 2004A Reserve
Account and thereby reduce the amount therein below the Bond Reserve
Requirement, except for the purpose for retiring all Outstanding Bonds, or
should a valuation of the 2004A Reserve Account indicate that it is below the
Bond Reserve Requirement, the City shall, subject to the provisions of the last
paragraph of this Section, transfer monthly to such 2004A Reserve Account, all
available funds after providing for the payments and transfers set forth above,
until such 2004A Reserve Account shall have again attained the Bond Reserve
Requirement. Any amounts in the 2004A Reserve Account in excess of the Bond
Reserve Requirement on any valuation date shall be transferred (i) during the
period of construction of the extensions and improvements to the System, to the
2004A Construction Account, and (ii) after such construction period, to the
2004A Debt Service Account.
If
at any time the moneys in the Sanitary Sewer Revenue Fund shall be insufficient
to make in full any payments and credits at the time required to be made by the
City to the Bond Reserve Accounts established by the City to protect the
payment of the Outstanding sewerage system revenue bonds of the City including
only the Outstanding Parity Bonds and other sewerage system revenue bonds of
the City hereafter issued and standing on a parity with the Outstanding Parity
Bonds, the available moneys in the Sanitary Sewer Revenue Fund shall be divided
among such bond reserve accounts in proportion to the respective principal
amounts of said Series of sewerage system revenue bonds of the City at the time
Outstanding which are payable from the moneys in such bond reserve accounts.
ARTICLE V
APPLICATION OF BOND PROCEEDS
Section 501. Disposition
of Bond Proceeds. The proceeds received from the sale of the Bonds,
including any premium and accrued interest, will be deposited simultaneously
with the delivery of the Bonds, as follows:
(1) into the Costs of Issuance
Account an amount not to exceed $250,000 for Costs of Issuance as approved by
the Acting Director of Finance;
into
the Construction Account the balance of the proceeds of the Bonds including any
premium thereon, and
accrued
interest on the Bonds, if any, shall be deposited in the Series 2004A Debt
Service Account and be used to pay a portion of the interest on the Bonds
coming due on January 1, 2005.
Amounts remaining
in the Costs of Issuance Fund on October 1, 2004, shall be transferred to the
Series 2004A Construction Account. Upon the completion of the extensions and improvements
to the Sanitary Sewer System, the plans and specifications for which have been
approved by the Governing Body, any surplus remaining in the Construction
Account shall be deposited in and credited to the Debt Service Account created
by Section 401 (d)(3) of this Ordinance. Any surplus credited to the
Debt Service Account shall be applied by the Paying Agent as directed by the
City solely to the payment of principal of, redemption premium, if any, and
interest on the Bonds through the payment or redemption thereof at the earliest
date permissible under the terms of this Ordinance. The balance transferred to
the Debt Service Account may first be used to pay any principal payment on the
Bonds coming due in that current bond year. If the balance transferred is
greater than the current bond year principal payment, the excess shall be used
to call Bonds for redemption in accordance with subsection 301 (b) hereof. Any
Bonds purchased by the Paying Agent pursuant to this provision with moneys from
the Debt Service Account will be deemed cancelled.
ARTICLE VI
APPLICATION OF REVENUES
Section 601. Combined
System Revenue Fund and Sewer Fund.
(a) The City
covenants and agrees that prior to the termination of Section 601A, all
Combined System Revenues will be deposited into the Combined System Revenue
Fund when received. The Combined System Revenues will be segregated from all
other moneys, revenues, funds and accounts of the City.
(b) All moneys
deposited in the Combined System Revenue Fund will be designated as having been
derived from the ownership and operation of either the stormwater sewers
portion of the Combined System or the Sanitary Sewer System. All Sanitary
Sewer System Revenues will be deposited in the Sewer Fund. All revenues of the
stormwater sewers portion of the Combined System will be transferred to the
stormwater fund.
(c) From and
after the termination of Section 601A, the Sewer Fund will be
administered and applied solely for the purposes and in the manner provided in
this Ordinance and any Parity Ordinance.
Section
601A. Application of Moneys Under Outstanding Senior Bond Ordinance.
(a) The
provisions of this Section 601A will remain in effect as long as the
Outstanding Senior Bonds remain outstanding within the meaning of the
Outstanding Senior Bond Ordinance.
(b) Prior to the
payment in full of the Outstanding Senior Bonds, the City will apply moneys in
the Sewer Fund on the first day of each month, the amounts required by the
Outstanding Senior Bond Ordinance in the order as follows: FIRST, the estimated cost of operating
and maintaining the Combined System during the ensuing 30-day period (after the
application of moneys in the stormwater fund to the operation and maintenance
of the stormwater sewers portion of the Combined System), SECOND, to the Outstanding Senior Bond
Debt Service Account, and THIRD,
to the Outstanding Senior Bond Debt Service Reserve Account.
(c) If moneys in
the Sewer Fund are not sufficient to make the transfers described in clauses SECOND
and THIRD of paragraph (b), the City will apply moneys in the stormwater fund.
Section
602. Application of Moneys in Sanitary Sewer System Funds and Accounts.
(a) After the
application of moneys under Section 601A, the City will apply moneys in
the Sewer Fund on the dates, in the amounts and in the order as follows:
(1) after the termination of Section 601A,
on the first day of each month the estimated cost of operating and maintaining
the Sanitary Sewer System during the ensuing 30-day period;
(2) to the Outstanding Parity Bond
Debt Service Account, on a parity basis, the amount required under the
Outstanding Parity Bond Ordinance at the time specified therein. In the case
of the Series 2004A Bonds, the City shall transfer to the Paying Agent for the
Series 2004A Bonds on the second Business Day prior to any Interest Payment
Date the amounts of principal and interest due on the Series 2004A Bonds on the
next Interest Payment Date.;
(3) on the first day of each month,
to the Outstanding Parity Bond Debt Service Reserve Account as required by the
Outstanding Parity Bond Ordinance and, in the event the trustee or the Paying
Agent has withdrawn moneys from the Reserve Account (other than investment
earnings or the amount transferred from the Reserve Account upon the payment of
principal on the Bonds), to the Reserve Account all available moneys until the
Reserve Account has been replenished; and
(4) on the first day of each month
the remaining balance to the Sanitary Sewer Surplus Account.
(b) If the
amount in the Sewer Fund is not sufficient to make the payments at the time
required to be made by the City to the Series 2004A Reserve Account and to the
Outstanding Parity Bond Debt Service Reserve Account, the City will divide the
balance in the Sewer Fund between the Series 2004A Reserve Account and the
Outstanding Parity Bond Debt Service Reserve Account on a proportionate basis
(based upon the outstanding principal amounts of the Bonds and the Outstanding
Parity Bonds).
(c) Moneys in
the Sanitary Sewer Surplus Account are to be expended for the following
purposes as determined by the Governing Body:
(1) paying the cost of the operation,
maintenance and repair of the Sanitary Sewer System to the extent necessary
after the application of the moneys in the Sanitary Sewer Depreciation and
Replacement Account;
(2) paying the cost of extending,
enlarging or improving the Sanitary Sewer System;
(3) preventing default in,
anticipating payments into or increasing the amounts in the accounts confirmed
or established in Section 401, the Principal Account, the Interest
Account, the Reserve Account or the Sanitary Sewer System Depreciation and
Replacement Account, or establishing or increasing the amount of any debt
service account or debt service reserve account created by the City for the
payment of any Sanitary Sewer System Revenue Bonds subsequently issued; or
(4) redeeming and paying prior to
maturity, or, at the option of the City, purchasing in the open market at the
best price obtainable not exceeding the call price (if any bonds are callable),
the Bonds, the Outstanding Senior Bonds, the Outstanding Parity Bonds or any
other Sanitary Sewer System Revenue Bonds of the City hereafter issued under
the conditions hereinafter specified and standing on a parity with the Bonds,
including principal, redemption premium, if any, and interest; or
(5) making payments on capital
lease obligations; or
(6) any other lawful purpose in
connection with the operation of the System and beneficial to the System.
(d) No moneys
derived by the City from the Sanitary Sewer System will be diverted to the
general governmental or municipal functions of the City.
Section
603. Deficiency of Payments into Funds and Accounts.
(a) If the
Revenues are insufficient to make any payment on any date specified in this
Article, the City will make good the amount of the deficiency by making
additional payments out of the first available Revenues for application in the
order specified in Section 602.
(b) If the
moneys in the Outstanding Senior Bond Debt Service Account, the Outstanding
Senior Bond Debt Service Reserve Account, the Outstanding Parity Bond Debt
Service Account, the Outstanding Parity Bond Debt Service Reserve Account, the
Principal Account, the Interest Account or the Reserve Account are not
sufficient to pay the principal of and interest on the Outstanding Senior
Bonds, the Outstanding Parity Bonds and the Bonds as and when the same become
due, the City will apply moneys in the Sanitary Sewer Surplus Account and the
Depreciation and Replacement Account first to the Outstanding Senior Bond Debt
Service Account and the balance on a proportionate basis (based upon the outstanding
principal amounts of the Bonds and the Outstanding Parity Bonds) to the
Principal Account, the Interest Account and the Outstanding Parity Bond Debt
Service Account to prevent any default in the payment of the principal of and
interest on the Outstanding Senior Bonds, the Bonds and the Outstanding Parity
Bonds.
Section 604. Transfer
of Funds to Paying Agent. The Acting Director of Finance is authorized and
directed to make the payments to the Principal Account and the Interest Account
and the debt service accounts as provided in Section 602, and, to the
extent necessary to prevent a default in the payment of the Sanitary Sewer
System Revenue Bonds, from the debt service reserve accounts, the Reserve
Account, the Sanitary Sewer Surplus Account and the Sanitary Sewer Depreciation
and Replacement Account as provided in Sections 602 and 603, sums
sufficient to pay the Sanitary Sewer System Revenue Bonds when due, and to
forward amounts to the Paying Agent in a manner which ensures the Paying Agent
will have sufficient available funds on or before the second Business Day
immediately preceding the dates when payments on the Bonds are due. Upon the
payment of all principal and interest on the Bonds, the Paying Agent will
return any excess funds to the City.
ARTICLE VII
DEPOSIT AND INVESTMENT OF MONEYS
Section 701. Investment
of Moneys.
(a) Moneys in
each of the other funds and accounts created or ratified and confirmed by this
Ordinance may be invested by the City in Permitted Investments, but no
investment will be made for a period extending longer than the date when the
moneys invested may be needed. Unless stated otherwise, all earnings on any
investments held in any fund or account will accrue to the applicable fund or
account. In determining the amount held in any fund or account under this
Ordinance, obligations will be valued at the lower of cost or market value. If
the amount in any fund or account held within the Treasury of the City is
greater than the required amount, the City may transfer the excess to the Sewer
Fund.
(b) If the
Outstanding Senior Bonds and the Outstanding Parity Bonds are outstanding, any
investments made pursuant to this Section are subject to the applicable
restrictions in the Outstanding Senior Bond Ordinance and the Outstanding
Parity Bond Ordinance.
ARTICLE VIII
BOND INSURANCE
Section 801. Bond Insurance Policy. The
Series 2004A Bonds will be insured by the Bond Insurer for the timely payment
of all interest and principal at scheduled maturity in accordance with the
terms of the Bond Insurance Policy. All amounts received under the Bond
Insurance Policy shall be used solely for the payment of principal of and
interest on the Series 2004A Bonds.
Section 802. Payments
Under Bond Insurance Policy.
(a) In the event
that, on the second Business Day, and again on the Business Day, prior to any
payment date on the Series 2004A Bonds, the Paying Agent has not received
sufficient moneys to pay all principal of and interest on the Series 2004A
Bonds due on the second following or following, as the case may be, Business
Day, the Paying Agent shall immediately notify the Bond Insurer or its designee
on the same Business Day by telephone or telecopy, confirmed in writing by
registered or certified mail, of the amount of the deficiency.
(b) If the
deficiency is made up in whole or in part prior to or on the payment date, the
Paying Agent shall so notify the Bond Insurer or its designee.
(c) In addition,
if the Paying Agent has notice that any bondowner has been required to disgorge
payments of principal or interest on the Series 2004A Bonds to a trustee in
bankruptcy or creditors or others pursuant to a final judgment by a court
of competent jurisdiction that such payment constitutes an avoidable
preference to such bondowner within the meaning of any applicable bankruptcy
laws, then the Paying Agent shall notify the Bond Insurer or its designee of
such fact by telephone or telecopy notice, confirmed in writing by registered
or certified mail.
(d) The Paying
Agent is irrevocably designated, appointed, directed and authorized to act as
attorney-in-fact for owners of the Series 2004A Bonds as follows:
(1) If and to the extent there is a
deficiency in amounts required to pay interest on the Series 2004A Bonds, the
Paying Agent shall (A) execute and deliver to U.S. Bank Trust National
Association, or its successors under the applicable Bond Insurance Policy (the Insurance
Paying Agent), in form satisfactory to the Insurance Paying Agent, an
instrument appointing the Bond Insurer as agent for such owners in any legal
proceeding related to the payment of such interest and an assignment to the
Bond Insurer of the claims for interest to which such deficiency relates and
which are paid by the Bond Insurer, (B) receive as designee of the respective
owners (and not as Paying Agent) in accordance with the tenor of the applicable
Bond Insurance Policy payment from the Insurance Paying Agent with respect to
the claims for interest so assigned, and (C) disburse the same to such
respective owners; and
(2) If and to the extent of a
deficiency in amount required to pay principal of the Series 2004A Bonds, the
Paying Agent shall (A) execute and deliver to the Insurance Paying Agent in
form satisfactory to the Insurance Paying Agent an instrument appointing the
Bond Insurer as agent for such owners in any legal proceeding relating to the
payment of such principal and an assignment to the Bond Insurer of any of the
Series 2004A Bonds surrendered to the Insurance Paying Agent of so much of the
principal amount thereof as has not previously been paid or for which moneys
are not held by the Paying Agent and available for such payment (but such
assignment shall be delivered only if payment from the Insurance Paying Agent
is received), (B) receive as designee of the respective owners (and not as
Paying Agent) in accordance with the tenor of the applicable Bond Insurance
Policy payment therefor from the Insurance Paying Agent, and (C) disburse the
same to such owners.
(e) Payments
with respect to claims for interest on and principal of Series 2004A Bonds
disbursed by the Paying Agent from proceeds of the applicable Bond Insurance
Policy shall not be considered to discharge the obligation of the City with
respect to such Bonds, and the Bond Insurer shall become the owner of such
unpaid Series 2004A Bonds and claims for the interest in accordance with the
tenor of the assignment made to it under the provisions of this subsection or
otherwise.
(f) Irrespective
of whether any such assignment is executed and delivered, the City and the
Paying Agent agree for the benefit of the Bond Insurer that:
(1) They recognize that to the
extent the Bond Insurer makes payments, directly or indirectly (as by paying
through the Paying Agent), on account of principal of or interest on the Series
2004A Bonds, the Bond Insurer will be subrogated to the rights of such owners
to receive the amount of such principal and interest from the City, with
interest thereon as provided and solely from the sources stated in this
Ordinance and the Series 2004A Bonds; and
(2) They will accordingly pay to
the Bond Insurer the amount of such principal and interest (including principal
and interest covered under subparagraph (ii) of the first paragraph of the Bond
Insurance Policy, which principal and interest shall be deemed past due and not
to have been paid), with interest thereon as provided in this Ordinance and the
Series 2004A Bonds, but only from the sources and in the manner provided herein
for the payment of principal of and interest on the Series 2004A Bonds to
owners, and will otherwise treat the Bond Insurer as the owner of such rights
to the amount of such principal and interest.
Section 803. Notices
To Bond Insurer and Rating Agencies. The following notices and documents
shall be delivered to the Bond Insurer and Rating Agency as indicated:
(a) The City
shall give the Bond Insurer written notice of any proposed amendment or supplement
to this Ordinance.
(b) The City
shall give the Bond Insurer written notice of the resignation or removal of the
Paying Agent and the appointment of a successor thereto.
(c) The City
shall give the Bond Insurer at least 15 business days notice of the advance
refunding of the Series 2004A Bonds.
(d) The Bond
Insurer shall receive copies of all notices that are required hereunder to be
given to the Paying Agent or to any of the bondowners and, on an annual basis,
copies of the Citys audited combined financial statements and annual budget.
All notices required to be given to the Bond Insurer under this Ordinance shall
be in writing and shall be sent by registered or certified mail addressed to
MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504,
Attention: IPM-PCF.
(e) The City
shall give the Bond Insurer written notice of the occurrence of any event of
default under this Ordinance.
(f) Copies of
any amendments made to the documents executed in connection with the issuance
of the Series 2004A Bonds which are consented to by the Bond Insurer shall be
sent to each rating agency at the time providing a rating on the Series 2004A
Bonds.
(g) In
connection with the issuance of Additional Bonds, a copy of the disclosure
document, if any, circulated with respect to such Additional Bonds shall be
delivered to the Bond Insurer.
Section 804. Reimbursement
of Bond Insurer. The City agrees to reimburse the Bond Insurer immediately
and unconditionally upon demand, to the extent permitted by law, for all
reasonable expenses, including attorneys fees and expenses, incurred by the
Bond Insurer in connection with (i) the enforcement by the Bond Insurer of the
Citys obligations, or the preservation or defense of any rights of the Bond
Insurer, under this Ordinance and any other document executed in connection
with the issuance of the Series 2004A Bonds, and (ii) any consent, amendment,
waiver or other action with respect to the Ordinance or any related document,
whether or not granted or approved, together with interest on all such expenses
from and including the date incurred to the date of payment at Citibanks Prime
Rate plus 3% or the maximum interest rate permitted by law, whichever is less.
In addition, the Bond Insurer reserves the right to charge a fee in connection
with its review of any such consent, amendment or waiver, whether or not
granted or approved.
Section 805. Use of MBIA Name. The
City agrees not to use MBIA's name in any public document including, without
limitation, a press release or presentation, announcement or forum without
MBIA's prior consent. In the event that the City is advised by counsel that it
has a legal obligation to disclose MBIA's name in any press release, public
announcement or other public document, the City shall provide MBIA with at
least three (3) business days' prior written notice of its intent to use MBIA's
name together with a copy of the proposed use of MBIA's name and of any
description of a transaction with MBIA and shall obtain MBIA's prior consent as
to the form and substance of the proposed use of MBIA's name and any such
description.
Section 806. MBIA
Consent to Tender or Purchase. The City shall not enter into any agreement
nor shall it consent to or participate in any arrangement pursuant to which the
Series 2004A Bonds are tendered or purchased for any purpose other than the
redemption and cancellation or legal defeasance of such Series 2004A Bonds
without the prior written consent of MBIA.
Section 807. Rights
of the Bond Insurer. The provisions set forth in this Article shall apply
for so long as the Series 2004A Bonds are Outstanding and the Bond Insurance
Policy remains in effect, the Bond Insurer is not insolvent and the Bond
Insurer is not in default of its payment obligations under the Bond Insurance
Policy, unless any such provision is waived by the Bond Insurer or modified by
agreement between the Bond Insurer and the City. Anything contained in this Ordinance
or in the Series 2004A Bonds to the contrary notwithstanding, the existence of
all rights given to the Bond Insurer under this Ordinance with respect to the
giving of consents or approvals or the direction of proceedings are expressly
conditioned upon its timely and full performance of the Bond Insurance Policy.
Any such rights shall not apply if at any time the Bond Insurer is in default
with respect to any payment under the Bond Insurance Policy or is insolvent;
provided, that this Ordinance shall not in any way limit or affect the rights
of the Bond Insurer as a bondowner, as subrogee of a bondowner or as assignee
of a bondowner or to otherwise be reimbursed and indemnified for its costs and
expenses and other payment on or in connection with the Series 2004A Bonds or
the Bond Insurance Policy either by operation of law or at equity or by
contract.
ARTICLE IX
PARTICULAR COVENANTS OF THE CITY
Section 901. Efficient
and Economical Operation. The City will continuously own and will operate
the Sanitary Sewer System in an efficient and economical manner and will keep
and maintain the Sanitary Sewer System in good repair and working order.
Section 902. Rate
Covenant. The City will fix, establish, maintain and collect rates and
charges for the use and services furnished by or through the Sanitary Sewer
System to produce income and revenues sufficient to (a) pay the costs of the
operation and maintenance of the Sanitary Sewer System; (b) pay the principal
of and interest on the Bonds as and when due; (c) enable the City to have in
each Fiscal Year Net Sanitary Sewer Revenues Available for Debt Service plus
Administrative Service Fees of not less than 110% of the amount required to be
paid by the City in the Fiscal Year on account of both principal of and
interest on all Sanitary Sewer System Revenue Bonds at the time outstanding,
plus capital lease payments, if any, provided that interest on any SRF Program
Bonds will be reduced by the SRF Subsidy, if any; and (d) provide reasonable
and adequate reserves for the payment of the Bonds and the interest thereon and
for the protection and benefit of the Sanitary Sewer System as provided in this
Ordinance. The City will require the prompt payment of accounts for service
rendered by or through the Sanitary Sewer 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 Sanitary Sewer System will be furnished to any user without a reasonable
charge being made therefor.
Section 904. Performance
of Duties. The City will faithfully and punctually perform all duties and
obligations with respect to the operation of the Sanitary Sewer System now or hereafter
imposed upon the City by any applicable laws, including the Constitution and
laws of the State and the provisions of this Ordinance.
Section 905. Tax
Covenants.
(a) The City
will comply with all applicable provisions of the Code, including Sections 103
and 141 through 150, necessary to maintain the exclusion of interest on the
Series 2004A Bonds from gross income for federal income tax purposes. The City
will not use or permit the use of any proceeds of the Series 2004A Bonds or any
other funds of the City, nor take or permit any other action, or fail to take
any action, which would adversely affect the exclusion of interest on the
Series 2004A Bonds from gross income for federal income tax purposes. The City
will adopt ordinances or resolutions and take other actions necessary to comply
with the Code and with other applicable future law, in order to ensure that the
interest on the Series 2004A Bonds will remain excluded from federal gross
income.
(b) The City (1)
will use the proceeds of the Series 2004A Bonds as soon as practicable for the
purposes for which the Series 2004A Bonds are issued, and (2) will not invest
or directly or indirectly use or permit the use of any proceeds of the Series
2004A Bonds or any other funds of the City in any manner, or take or omit to
take any action, that would cause the Series 2004A Bonds to be arbitrage bonds
within the meaning of Section 148(a) of the Code.
(c) The City
will not use any portion of the proceeds of the Series 2004A Bonds, including
any investment income earned on the proceeds, directly or indirectly,
(1) in a manner that would cause any Series 2004A Bond to be a private
activity bond within the meaning of Section 141(a) of the Code, or (2) to
make or finance a loan to any person.
(d) The City
covenants that it will pay or provide for the payment from time to time of all
rebatable arbitrage to the United States pursuant to Section 148(f) of the Code
and the Arbitrage Instructions. This covenant will survive the payment in full
or defeasance of the Series 2004A Bonds. The Arbitrage Instructions may be
amended or replaced if, in the opinion of Bond Counsel, such amendment or
replacement will not adversely affect the exclusion from federal gross income
of the interest on the Series 2004A Bonds.
Section 906. Continuing
Disclosure. The City covenants and agrees to enter into a Continuing
Disclosure Agreement for the benefit of the Bondholders or similar undertaking
intended to satisfy the ongoing disclosure requirements of Securities and
Exchange Commission Rule 15c2-12. The Acting Director of Finance is authorized
to enter in a Continuing Disclosure Agreement substantially in the form on file
with the office of the Acting Director of Finance, with such changes therein as
he deems necessary or desirable.
ARTICLE X
ADDITIONAL BONDS
Section 1001. Prior
Lien Bonds. Except as provided in Section 1004, the City will not
issue any debt obligations payable out of the Net Sanitary Sewer Revenues which
are superior in lien, security or otherwise to the Bonds.
Section
1002. Parity Lien Bonds or Obligations.
(a) The City
will not issue any additional bonds or other long-term obligations payable out
of the Net Sanitary Sewer Revenues which stand on a parity or equality with the
Bonds unless the following conditions are met:
(1) The City is not in default in
the payment of principal or interest on the Bonds or the Parity Bonds or in
making any deposit into the funds and accounts under this Ordinance or any
Parity Ordinance; and
(2) The City provides to the
Bondowner and the Paying Agent a certificate showing either of the following:
(A) The average annual
Net Sanitary Sewer Revenues plus Administrative Service Fees as set forth in
the two most recent annual audits for Fiscal Years preceding the issuance of
additional bonds, are at least 110% of the average annual debt service on the
Sanitary Sewer System Revenue Bonds (excluding subordinate revenue bonds or
obligations), including the additional bonds proposed to be issued, to be paid
out of the Net Sanitary Sewer Revenues in all succeeding Fiscal Years. Interest
to be paid on any SRF Program Bonds may be reduced by the SRF Subsidy, if any.
In determining Net Sanitary Sewer Revenues, the City may rely on a certificate
of the Consultant to add the additional Net Sanitary Sewer Revenues which would
have resulted if the rate increase had been in effect for the entire period to
the audited Net Sanitary Sewer Revenues if the City has made any increase in
rates for the use and services of the Sanitary Sewer System and the increase
has not been in effect during all of the two Fiscal Years for which annual
audits are available; or
(B) The estimated
average annual Net Sanitary Sewer Revenues Available for Debt Service plus
Administrative Service Fees for the two Fiscal Years immediately following the
Fiscal Year in which the improvements to the Sanitary Sewer System being
financed by the additional bonds are to be in commercial operation, as
certified by the Consultant, is at least 110% of the average annual debt
service on the Sanitary Sewer System Revenue Bonds(excluding subordinate
revenue bonds or obligations), including the additional bonds proposed to be
issued, to be paid out of the Net Sanitary Sewer Revenues Available for Debt
Service in succeeding Fiscal Years following the commencement of commercial
operation of the improvements. Interest to be paid on any SRF Program Bonds
may be reduced by the SRF Subsidy, if any. In determining the amount of
estimated Net Sanitary Sewer Revenues Available for Debt Service for the
purpose of this subsection, the Consultant may adjust the estimated net income
and revenues by adding the estimated increase in Net Sanitary Sewer Revenues
Available for Debt Service resulting from any increase in rates for the use and
services of the Sanitary Sewer System approved by the City.
(b) If the
conditions set forth in this Section are satisfied, the City (i) may issue
additional revenue bonds or other obligations of the City on a parity with the
Bonds and that enjoy complete equality of the lien on the Net Sanitary Sewer
Revenues with the Bonds, (ii) may make equal provision for paying the
additional revenue bonds or other obligations from the Sewer Fund, and (iii)
may secure the additional revenue bonds or other obligations by funding
reasonable System debt service accounts and debt service reserve accounts from
the Net Sanitary Sewer Revenues.
Section 1003. Junior
Lien Bonds. Nothing in this Article prohibits or restricts the right of
the City to issue additional revenue obligations, including revenue bonds, for
the purpose of extending, improving, enlarging, repairing or altering the
Sanitary Sewer System, that are subordinate to the Bonds if at the time of the
issuance of the additional revenue obligations the City is not in default in
the performance of any covenant or agreement in this Ordinance. If the City is
in default in paying either interest on or principal of the Bonds, or if the
Reserve Account is not fully funded, the City shall not make any payments on
the subordinate revenue obligations until the default is cured. Subject to the
limitations in this Section, the City may make provision for paying the
principal of and interest on the subordinate revenue bonds or obligations from
moneys in the Sewer Fund.