KC Skyline

City Clerk Web Search

Search the Ordinances:

Legislation #: 070362 Introduction Date: 3/22/2007
Type: Ordinance Effective Date: none
Sponsor: COUNCILMEMBER EDDY
Title: Authorizing the issuance, sale and delivery of $40,000,000.00 Sanitary Sewer System Revenue Bonds, Series 2007A of the City of Kansas City, Missouri, for the purpose of extending and improving the City’s Sanitary Sewer System, prescribing the form and details of said Bonds and the covenants and agreements made by the City to facilitate and protect the payment thereof; providing for the collection, segregation and application of the revenues of the sanitary sewer portion of the City’s sewerage system for the purpose of paying the cost of operation and maintenance of the sanitary sewer portion of the City’s sewerage system, paying the principal of and interest on said Bonds, and providing reasonable and adequate reserve funds; and prescribing other matters relating thereto.

Legislation History
DateMinutesDescription
3/22/2007 Filed by the Clerk's office
3/22/2007 Referred to Finance and Audit Committee
3/28/2007 Advance and Do Pass as a Committee Substitute, Debate
3/29/2007 Passed as Substituted

View Attachments
FileTypeSizeDescription
Sewer 2007A Certificate of Final Terms.pdf Other 97K Sewer 2007A Certificate of Final Terms
070362.pdf Authenticated 3000K Authenticated
SewerBondProj_20Feb07R3.xls Advertise Notice 16K Sewer Bond Project
Sewer Fiscal Note.xls Fiscal Note 24K Sewer Bond Fiscal Note
Sewer 2007A Factsheet 3-19-07.xls Fact Sheet 42K Sewer Bond Fact Sheet

Printer Friendly Version

COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 070362

 

Authorizing the issuance, sale and delivery of $40,000,000.00 Sanitary Sewer System Revenue Bonds, Series 2007A of the City of Kansas City, Missouri, for the purpose of extending and improving the Citys Sanitary Sewer System, prescribing the form and details of said Bonds and the covenants and agreements made by the City to facilitate and protect the payment thereof; providing for the collection, segregation and application of the revenues of the sanitary sewer portion of the Citys sewerage system for the purpose of paying the cost of operation and maintenance of the sanitary sewer portion of the Citys sewerage system, paying the principal of and interest on said Bonds, and providing reasonable and adequate reserve funds; and prescribing other matters relating thereto.

 

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

 

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

 

WHEREAS, the City desires to extend and improve the Sanitary Sewer System (as defined herein); and

 

WHEREAS, the City desires to finance the proposed extensions and improvements to the Sanitary Sewer System, in whole or in part, from the proceeds of revenue bonds; and

 

WHEREAS, the City is authorized under the provisions of Chapter 250 of the Revised Statutes of Missouri (the Act) to issue and sell revenue bonds for the purpose of paying all or part of the cost of extending and improving the Sanitary Sewer System, with the cost of operation and maintenance of the Sanitary Sewer System and the principal of and interest on revenue bonds payable solely from the Net Sanitary Sewer Revenues (as defined below); and

WHEREAS, pursuant to the Act, a special bond election was duly held in the City on August 2, 2005 on the following question:

 

QUESTION NO. 2

 

Shall the City of Kansas City, Missouri, issue and sell wastewater revenue bonds in the principal amount of $250,000,000.00 for the purpose of extending and improving the wastewater system of the City including, without limitation (1) reduction or elimination of sewer overflows and backups, (2) compliance with current and future federal and state regulations, (3) rehabilitation of combined sewers to reduce or eliminate overflows and flooding, (4) continued expansion of the Citys interceptor sewer system, (5) acquisition of necessary property interests, and (6) rehabilitation of existing aged wastewater treatment plants, pumping stations, and other wastewater facilities, with the principal and interest of said bonds to be payable solely from the revenues derived by the City from the operation of its wastewater system, including all future improvements and extensions thereto?

 

and it was found and determined that more than a majority of the qualified electors of the City voting on the question had voted in favor of the issuance of said revenue bonds for the purpose aforesaid, the vote on said question having been 15,156 votes for said question to 5,422 votes against said question; and

 

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, none of the bonds so authorized have been issued 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 2007A in the original principal amount of $40,000,000.00 (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 $630,000.00 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 $10,795,000.00 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 $14,055,000.00 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 27, 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 $12,330,000.00 remains outstanding as of the date of passage of this Ordinance (the Series 1997A Bonds), authorized by Ordinance No. 970285 passed on March 26, 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 $6,480,000.00 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 $4,390,000.00 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 $9,600,000.00 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 $8,650,000.00 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 $3,255,000.00 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 $14,145,000.00 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, of which $8,750,000 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 $1,360,000.00 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 $8,420,000.00 remains outstanding as of the date of passage of this Ordinance (the Series 2002J Bonds) authorized by Ordinance No. 021206 passed on October 10, 2002 and Ordinance No. 021304 passed on October 24, 2002 (collectively, the Series 2002J Ordinance); and

 

WHEREAS, the City has issued its Sanitary Sewer System Revenue Bonds, Series 2004A, dated April 1, 2004, in the original principal amount of $20,000,000.00, of which $17,585,000.00 remains outstanding as of the date of passage of this Ordinance (the Series 2004A Bonds) authorized by Ordinance No. 040249 passed on March 18, 2004 and Ordinance No. 040378 passed on April 1, 2004 (collectively, the Series 2004A Ordinance); and

WHEREAS, the City has issued its Sanitary Sewer System Revenue Bonds (State Revolving Fund Program), Series 2004H, dated December 9, 2004, in the original principal amount of $10,500,000.00, of which $9,600,000.00 remains outstanding as of the date of passage of this Ordinance (the Series 2004H Bonds) authorized by Committee Substitute for Ordinance No. 041202 passed on November 4, 2004 and Ordinance No. 041314 passed on November 18, 2004 (collectively, the Series 2004H Ordinance); and

 

WHEREAS, the City has issued its Sanitary Sewer System Revenue Bonds, Series 2005B, dated January 15, 2005, in the original principal amount of $15,550,000.00, of which $14,465,000.00 remains outstanding as of the date of passage of this Ordinance (the Series 2005B Bonds, together with 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, the Series 2004A Bonds, the Series 2004H Bonds and the Series 2007A Bonds, collectively referred to herein as the Outstanding Parity Bonds) authorized by Ordinance No. 041390 passed on December 16, 2004 and Ordinance No. 050034 passed on January 6, 2005 (collectively, the Series 2005B 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, the Series 2002J Ordinance, the Series 2004A Ordinance, the Series 2004H 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 Certificate of Final Terms 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 2007A 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 2007A 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 on the date of original issuance, with respect to the Series 2007A Bonds, an aggregate amount equal to the least of (a) the maximum annual debt service with respect to the Series 2007A 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 2007A 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.

 

Certificate of Final Terms means Exhibit B, executed and delivered by the Mayor pursuant to Section 211 hereof, in substantially the form attached as Exhibit C.

 

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 within the Combined System Revenue Fund created or ratified and confirmed by Section 401.

 

"Depository" means The Depository Trust Company.

 

Director means, in reference to the Department of Water Services of the City, the Director or any Deputy Director of the Department of Water Services of the City, and in reference to the Department of Finance of the City, the Director or any Acting Director of the Department of Finance of the City.

 

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, 2008.

 

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, the Series 2004A Bonds, the Series 2004H Bonds, the Series 2005B 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, the Series 2004A Ordinance, the Series 2004H Ordinance, the Series 2005B 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 2007A Bonds appointed by the 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 Certificate of Final Terms.

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 401.

 

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 2007A Bonds or Bonds means the City of Kansas City, Missouri, Sanitary Sewer System Revenue Bonds, Series 2007A.

 

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, the Series 2004H 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.

 

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 2007A in an aggregate original principal amount not to exceed $40,000,000 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 Mayor, which approval will be conclusively evidenced by the Mayors 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 15, 2007, 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 Certificate of Final Terms.

 

At the election of the Purchaser of the Series 2007A Bonds, term Series 2007A 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 15, 2007. Interest on the Bonds shall be payable semiannually on January 1 and July 1 in each year, commencing January 1, 2008, 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 Mayor, which approval will be conclusively evidenced by the Mayors 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 2007A

 

Interest Rate Maturity Date Dated Date CUSIP Number

January 1, 2032 April 15, 2007

 

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, 2008 (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 Wells Fargo Bank, National Association in Kansas City, 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 2007A aggregating the principal amount of $40,000,000 (the Series 2007A 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 2007A 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 2007A 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 2007A 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 first class mail, postage prepaid 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 Sanitary Sewer 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 Sanitary Sewer 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, 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

 

Registration Date: __________________

WELLS FARGO BANK, N.A.

Paying Agent

 

(Seal)

ATTEST:

 

By

Authorized Signatory City Clerk

 

 

===============================================

 

STATEMENT OF INSURANCE

 

MBIA Insurance Corporation (the "Insurer") has issued a policy containing the following provisions, such policy being on file at Wells Fargo Bank, National Association, Kansas City, 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 Wells Fargo Bank, National Association 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:

 

$40,000,000

CITY OF KANSAS CITY, MISSOURI

SANITARY SEWER SYSTEM REVENUE BONDS

SERIES 2007A

 

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

Wells Fargo Bank, National Association

 

 

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 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 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 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 and the City Clerk 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. Public Sale and terms of the Bonds; Authorization and Execution of Certificate of Final Terms. The public sale of the Bonds is hereby authorized via PARITY. Notice of the public sale of the Bonds in accordance with the terms of the Notice of Bond Sale dated April 2, 2007 is authorized to be given by electronic transmission via PARITY and at the website address of www.pfm.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 (www.newissuehome@I-deal.com); however, telephone, telefax or personal delivery bids will also be accepted. The Mayor is authorized and directed to approve the purchase price for the Bonds, the principal amounts by maturity, the interest rates, the terms of credit enhancement and the other final terms of the Bonds, including applicable redemption provisions, subject to the limitations set forth in this Section and in Exhibit A hereto, and in that connection, to execute and deliver the Certificate of Final Terms for and on behalf of and as the act and deed of the City, which approval will be conclusively evidenced by the Mayors execution of the Certificate of Final Terms. Upon execution, the Certificate of Final Terms will be attached to this Ordinance as Exhibit B, and the City Clerk is hereby authorized to file the Certificate of Final Terms with this Ordinance.

 

Section 212. Preliminary and Final Official Statement. The Preliminary Official Statement, in the form on file in the office of the 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 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 213, 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. 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 therefore 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 215. 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 Public Financial Management, Des Moines, Iowa, and TKG & Associates, Chicago, Illinois, 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 2007A Bonds are issued as provided in Section 202 of this Ordinance and as more specifically described in the Certificate of Final Terms, such Series 2007A 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 2007A 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 2007A 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 "2007A 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 2007A 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 2007A Bonds maturing on January 1, 2018, 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, 2017, at any time as a whole or in part 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 2007A Construction Account; and

 

(2)               Series 2007A Reserve Account (the Series 2007A Reserve Account, the Series 2007A Reserve Account, the Series 2005B Reserve Account, the Series 2004H 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 2007A Debt Service Account, the Series 2007A Debt Service Account, the Series 2005B Debt Service Account, the Series 2004H Interest Account, the Series 2004H Principal 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 2007A Reserve Account. Simultaneously with the issuance of the Series 2007A Bonds, the City shall provide that the Series 2007A 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 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 2007A Debt Service Account plus all amounts on deposit in the 2007A 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 2007A Debt Service Account or the 2007A 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 2007A 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 2007A 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 2007A 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 2007A Reserve Account, all available funds after providing for the payments and transfers set forth above, until such 2007A Reserve Account shall have again attained the Bond Reserve Requirement. Any amounts in the 2007A 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 2007A Construction Account, and (ii) after such construction period, to the 2007A 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. After payment of the premiums for the Bond Insurance Policy and the Surety Bond, the net 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 $170,000.00 for Costs of Issuance as approved by the Director of Finance;

 

(2)               into the Construction Account the balance of the proceeds of the Bonds including any premium thereon, and

 

(3)               accrued interest on the Bonds shall be deposited in the Series 2007A Debt Service Account and be used to pay interest on the Bonds.

 

Amounts remaining in the Costs of Issuance Fund on August 31, 2007, shall be transferred to the Series 2007A 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 2007A Bonds, the City shall transfer to the Paying Agent for the Series 2007A Bonds on the second Business Day prior to any Interest Payment Date the amounts of principal and interest due on the Series 2007A 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 2007A 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 2007A 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 Sanitary Sewer 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 Sanitary Sewer 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 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 Sewer Fund of the Combined System Revenue Fund. Notwithstanding the preceding sentence, all earnings on amounts in the Construction Account will accrue to the Construction 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 2007A 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 2007A 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 2007A Bonds, the Paying Agent has not received sufficient moneys to pay all principal of and interest on the Series 2007A 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 2007A 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 2007A Bonds as follows:

 

(1) If and to the extent there is a deficiency in amounts required to pay interest on the Series 2007A 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 2007A 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 2007A 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 2007A 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 2007A 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 2007A 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 2007A 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 2007A Bonds, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Series 2007A 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 2007A 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: Insured Portfolio Management.

 

(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 2007A 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 2007A 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 2007A 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 2007A Bonds are tendered or purchased for any purpose other than the redemption and cancellation or legal defeasance of such Series 2007A 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 2007A 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 2007A 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 2007A 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 therefore.

 

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 2007A Bonds from gross income for federal income tax purposes. The City will not use or permit the use of any proceeds of the Series 2007A 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 2007A 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 2007A Bonds will remain excluded from federal gross income.

 

(b) The City (1) will use the proceeds of the Series 2007A Bonds as soon as practicable for the purposes for which the Series 2007A Bonds are issued, and (2) will not invest or directly or indirectly use or permit the use of any proceeds of the Series 2007A Bonds or any other funds of the City in any manner, or take or omit to take any action, that would cause the Series 2007A 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 2007A Bonds, including any investment income earned on the proceeds, directly or indirectly, (1) in a manner that would cause any Series 2007A 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 2007A 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 2007A 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 Director of Finance is authorized to enter in a Continuing Disclosure Agreement substantially in the form on file with the office of the Director of Finance, with such changes therein as she 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 Available for Debt Service 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 Available for Debt Service 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 Available for Debt Service, the City may rely on a certificate of the Consultant to add the additional Net Sanitary Sewer Revenues Available for Debt Service 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.

 

Section 1004. Refunding Bonds.

 

(a)                The City may, without complying with the provisions of Section 1002, refund any of the Bonds in a manner which provides debt service savings to the City, and the refunding bonds so issued will be on a parity with any of the Bonds that are not refunded and any Outstanding Parity Bonds.

 

(b) The Citymay refund any of the Outstanding Senior Bonds in a manner which provides debt service savings to the City in each subsequent Fiscal Year, and the refunding bonds so issued may have a priority lien on the Net Sanitary Sewer System Revenues.

 

ARTICLE XI

DEFAULT AND REMEDIES

 

Section 1101. Acceleration of Maturity in Event of Default. The City covenants and agrees that if it shall default in the payment of the principal of or interest on any of the Bonds as the same shall become due on any bond payment date, or if the City or the Council of the City or any of the officers, agents, or employees thereof shall fail or refuse to comply with any of the provisions of this Ordinance or of the constitution or statutes of the State, and such default continues for a period of sixty (60) days after written notice specifying such default has been given to the City by the Registered Owner of any Bond then Outstanding, then, at any time thereafter and while such default continues, the Registered Owners of twenty‑five percent (25%) in principal amount of the Bonds then Outstanding may, by written notice to the City filed in the office of the City Clerk or delivered in person to the City Clerk, declare the principal of all Bonds then Outstanding to be due and payable immediately, and upon any such declaration given as aforesaid, all of the Bonds shall become and be immediately due and payable, anything in this Ordinance or in the Bonds contained to the contrary notwithstanding. This provision, however, is subject to the condition that if at any time after the principal of the Outstanding Bonds has been so declared to be due and payable, all arrears of interest upon all Outstanding Bonds, except interest accrued but not yet due on such Bonds, and all arrears of principal upon all of said Bonds shall have been paid in full, and all other defaults, if any, by the City under the provisions of this Ordinance and under the provisions of the statutes of the State shall have been cured, then and in every such case, the Registered Owners of a majority in principal amount of the Bonds then Outstanding, by written notice to the City given as hereinbefore specified, may rescind and annul such declaration and its consequences, but no such rescission or annulment shall extend to or affect any subsequent default or impair any rights consequent thereon.

 

Section 1102. Remedies.

 

(a) The provisions of this Ordinance constitute a contract between the City and the Owners of the Bonds. The Owner or Owners of not less than 25% in principal amount of the Bonds at the time Outstanding have the right for the equal benefit and protection of all Owners of Bonds similarly situated:

 

(1) by any proceeding at law or in equity to enforce the rights of the Owner or Owners against the City and its officers, agents and employees, and to compel the performance by the City of its duties and obligations under this Ordinance, the Constitution and the laws of the State;

 

(2) by any proceeding at law or in equity to require the City, its officers, agents and employees to account as if they were the Paying Agents of an express trust; and

 

(3) by any proceeding at law or in equity to enjoin any act or thing which is unlawful or in violation of the rights of the Owners of the Bonds.

 

(b) Any amounts paid on the Bonds to the Owners will be applied first to interest and second to principal, to the extent due and payable.

 

Section 1103. Limitation on Rights of Bondowners. No Owner has any right in any manner whatever by the Owners action to affect, disturb or prejudice the security granted and provided for in, or enforce any right under, this Ordinance, except in the manner provided in this Ordinance. All proceedings at law or in equity will be for the equal benefit of all Owners.

 

Section 1104. Remedies Cumulative. No remedy conferred upon the Owners is intended to be exclusive of any other remedy. Each remedy is in addition to every other remedy and may be exercised without exhausting any other remedy conferred under this Ordinance. No waiver by any Owner of any default or breach of duty or contract of the City under this Ordinance will affect any subsequent default or breach of duty or contract by the City or impair any rights or remedies thereon. No delay or omission of any Owner to exercise any right or power accruing upon any default will impair any right or power or will be construed to be a waiver of any default. Every substantive right and every remedy conferred upon the Owners of the Bonds by this Ordinance may be enforced and exercised from time to time and as often as may be expedient. If any Owner discontinues any proceeding or the decision in the proceeding is against the Owner, the City and the Owners of the Bonds will be restored to their former positions and rights under this Ordinance.

 

Section 1105. No Obligation to Levy Taxes. Nothing in this Ordinance imposes any duty or obligation on the City to levy any taxes either to meet any obligation incurred under this Ordinance or to pay the principal of or interest on the Bonds.

 

ARTICLE XII

DEFEASANCE

 

Section 1201. Defeasance. When all of the Bonds have been paid and discharged, the provisions of this Ordinance will terminate. Bonds will be treated as paid and discharged within the meaning of this Ordinance if the City has deposited with the Paying Agent, or other bank or trust company located in the State, having full trust powers and meeting the requirements of a successor paying agent, (i) moneys and non-callable Defeasance Securities which, together with interest to be earned, as evidenced by the written report of an independent certified public accountant, will be sufficient for the payment of the principal and redemption premium, if any, of and interest to accrue on the Bonds to the date of maturity or redemption, and (ii) an opinion of Bond Counsel, addressed to the Paying Agent, that providing for the payment of the Bonds by depositing moneys or Defeasance Securities with the Paying Agent in accordance with this Section will not cause the interest on the Bonds to be included in gross income for federal income tax purposes. If any Bonds will be redeemed prior to maturity, the City must have given irrevocable instructions to the Paying Agent to redeem the Bonds. Any moneys and obligations which at any time are deposited with the Paying Agent or other bank by or on behalf of the City, for the purpose of paying and discharging any of the Bonds, are assigned, transferred and set over in trust for the applicable Owners, and the moneys and obligations are irrevocably appropriated to the payment and discharge of the applicable Bonds.

 

ARTICLE XIII

AMENDMENTS

 

Section 1301. Amendments.

 

(a) The provisions of this Article are not applicable to the Certificate of Final Terms.

 

(b) Any provision of the Bonds or of this Ordinance may be amended by an ordinance, provided however, that the prior written consent of the Bondowners is required for any amendment which would:

 

(1) extend the maturity of any payment of principal or interest on any Bond;

 

(2) reduce the amount of principal or interest payable on any Bond; or

 

(3) permit the priority of any Bond over any other Bond.

 

(c) No amendment will be effective until (i) the City has received an opinion of Bond Counsel stating that the amendment is permitted by this Ordinance and the Act, complies with their respective terms, is valid and binding upon the City in accordance with its terms and does not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes, and (ii) the City Clerk has on file a copy of the amendment and all required consents.

 

ARTICLE XIV

MISCELLANEOUS PROVISIONS

 

Section 1401. Further Authority. The officers of the City, including the Mayor, the City Manager, the City Treasurer, the Director of Finance and the City Clerk, are authorized and directed to execute all documents and take the actions as are necessary or advisable in order to carry out and perform the purposes of this Ordinance and to make ministerial changes in the documents approved by this Ordinance which they may approve. The execution of any document or taking of any related action constitutes conclusive evidence of the necessity or advisability of the action or change.

 

Section 1402. Severability. If any section or other part of this Ordinance is for any reason held invalid, the invalidity will not affect the validity of the other provisions of this Ordinance.

 

Section 1403. Electronic Transaction. The transaction described herein may be conducted and related documents may be stored by electronic means.

 

Section 1404. Governing Law. This Ordinance is governed by and will be construed in accordance with the laws of the State.

 

Section 1405. Effective Date. This Ordinance will take effect and be in full force and effect ten days after its passage.

 

__________________________________________________

 

Approved as to form and legality:

 

 

Heather A. Brown

Assistant City Attorney


EXHIBIT A

 

TERMS OF BONDS

 

 

1. Purchase Price: Not less than 99.5% of the Principal Amount.

 

2. Weighted Average Maturity of the Bonds: Not less than 13.16 years nor more than 17.16 years.

 

3. True Interest Cost: Not to exceed 4.87%.

 

4. Underwriters Discount: Not to exceed 0.625% of the Principal Amount.

 

5. Final Maturity: Not to exceed January 1, 2032.

 

 

 


EXHIBIT B

 

 

CERTIFICATE OF FINAL TERMS


EXHIBIT C

 

FORM OF CERTIFICATE OF FINAL TERMS

 

The undersigned Mayor of the City of Kansas City, Missouri (the City), in connection with the issuance of the Citys Sanitary Sewer System Revenue Bonds Series 2007A (the Bonds), certifies pursuant to Section 211 of Ordinance No. 07____:

 

1. Principal Amount. The Bonds are issued in the Principal Amount of $__________.

 

2. Maturity Schedule. The Bonds will mature on the dates and in the amounts and bear interest at the rates as follows:

 

Maturity Principal Interest

January 1 Amount Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Bond

 

3. Weighted Average Maturity of the Bonds: The weighted average maturity of the Bonds is _____ years, as shown on Schedule 1 to this Certificate.

 

4. True Interest Cost: The True Interest Cost of the Bonds is ______%, as shown on Schedule 2 to this Certificate.

 

5. Purchaser and Purchase Price. The best bid received for the Bonds was that of _____________________, as representative of the underwriters (the "Purchaser"), at a total purchase price of $_________________, (representing the principal amount of $_________________, plus the premium of $_____________________, less the underwriters discount of $____________, plus accrued interest in the amount of $____________), which purchase price is _____% of the Principal Amount.

 

6. Mandatory Sinking Fund Redemption. [**There are no Term Bonds subject to mandatory sinking fund redemption prior to maturity.**][**The Term Bonds identified in paragraph 2 are subject to mandatory sinking fund redemption pursuant to Section 301(a) of the Ordinance on the dates and in the amounts as follows:

 

 

 

 

 

 

 

**]

 

7. Deposit of Bond Proceeds. The net proceeds received from the sale of the Bonds shall be deposited simultaneously with the delivery of the Bonds as follows:

 

(a) All accrued interest of $____________ received from the sale of the Bonds shall be deposited in the Series 2007A Debt Service Account and applied in accordance with Section 501.

 

(b) $______________ shall be deposited in the Costs of Issuance Fund to pay the costs of issuing the Bonds as authorized by the Director of Finance.

 

(c) The balance of the proceeds of the Bonds of $_______________ [and premium of $__________________] shall be deposited in the Construction Account.

 

The terms set forth in this Certificate of Final Terms are within the limitations of Exhibit A to the Ordinance.

 

Delivered this ____ day of April, 2007.

 

CITY OF KANSAS CITY, MISSOURI

 

 

 

By:

Mayor


Schedule 1

 

 

 


Schedule 2