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Legislation #: 961125 Introduction Date: 8/22/1996
Type: Ordinance Effective Date: 9/1/1996
Sponsor: None
Title: Establishing the maturity dates of and fixing the interest rates on $45,550,000.00 principal amount of Water Refunding Revenue Bonds, Series 1996A, authorized by Committee Substitute for Ordinance No. 960924 passed August 8, 1996, supplementing and amending certain provisions of said Ordinance No. 960924 and authorizing the sale and delivery of said bonds to the purchaser.

Legislation History
DateMinutesDescription
8/22/1996

Waive Charter Requirements City Council

8/22/1996

Introduce an Ordinance

8/22/1996

Passed


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ORDINANCE NO. 961125

 

Establishing the maturity dates of and fixing the interest rates on $45,550,000.00 principal amount of Water Refunding Revenue Bonds, Series 1996A, authorized by Committee Substitute for Ordinance No. 960924 passed August 8, 1996, supplementing and amending certain provisions of said Ordinance No. 960924 and authorizing the sale and delivery of said bonds to the purchaser.

 

WHEREAS, in accordance with the provisions of Committee Substitute for Ordinance No. 960924 passed August 8, 1996, and pursuant to Resolution No. 960783 and a Notice of Bond Sale dated August 9, 1996 (the "Notice of Bond Sale"), the Director of Finance of the City of Kansas City, Missouri, advertised for bids for the purchase of $45,550,000.00 principal amount of Water Refunding Revenue Bonds, Series 1996A, to be dated September 1, 1996 (subject to change as provided in the Post-Bid provisions of the Notice of Bond Sale) (the "Bonds"), said bids to be received at 9:00 o'clock a.m., Central Standard Time, on August 22, 1996; and

 

WHEREAS, said sale was held at said time in the office of the City Treasurer and of the bids received pursuant to the Notice of Bond Sale, the highest and best bid received at said time for the Bonds was that of Piper Jaffray Inc., and the Council, pursuant to the recommendation of the Director of Finance, has determined that the bid aforesaid should be accepted and has authorized the City Treasurer to accept said bid; and

 

WHEREAS, it is necessary that the Council, by ordinance, immediately establish the dates of and amounts of maturities and fix the interest rates to be borne by the Bonds and supplement and amend certain provisions of Committee Substitute for Ordinance No. 960924 in order that the Bonds may be prepared, executed and delivered to the purchaser thereof in accordance with the Notice of Bond Sale and the bid of said purchaser and by reason of such conditions, it is for the immediate preservation of the public property that this ordinance take effect as an emergency measure; NOW, THEREFORE,

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. That the Bonds shall mature and shall bear interest as follows:

 

MATURITY PRINCIPAL INTEREST

DECEMBER 1 AMOUNT RATE

 

1997 $1,485,000.00 4.25%

1998 2,885,000.00 4.15%

1999 3,015,000.00 4.25%

2000 3,155,000.00 4.35%

2001 3,305,000.00 4.35%

2002 3,455,000.00 4.45%

2003 3,620,000.00 5.00%

2004 3,815,000.00 5.00%

2005 4,010,000.00 5.00%

2006 4,225,000.00 4.85%

2007 4,445,000.00 5.00%

2008 4,685,000.00 5.10%

2009 3,450,000.00 5.00%

 

Section 2. That Committee Substitute for Ordinance No. 960924 is hereby amended by deleting the third recital in the preamble thereof and adopting the following recital:

 

WHEREAS, the City hereby finds and determines that it is in the best interests

of the City to issue and deliver its Water Refunding Revenue Bonds, Series 1996A (the "Bonds"), in the principal amount not to exceed $50,000,000.00 to provide funds to refund all of the outstanding Series A Bonds and the outstanding Series B Bonds maturing in the years 1998 to 2009, inclusive (collectively, the "Refunded Bonds"); and

 

Section 3. That Committee Substitute for Ordinance No. 960924 is hereby further amended by deleting the definitions of Parity Bonds and Refunded Bonds in Exhibit "A" thereto and substituting the following:

 

"Parity Bonds" means the Series B Bonds maturing in the years 1996 and

1997, the Series C Bonds and the Series D Bonds Outstanding on the date of the issuance and delivery of the Bonds and any Additional Bonds.

 

"Refunded Bonds" means the Outstanding Series A Bonds and the

Outstanding Series B Bonds maturing in the years 1998 to 2009, inclusive.

 

Section 4. That Committee Substitute for Ordinance No. 960924 is hereby further amended by repealing Section 20 and enacting in lieu thereof a new Section 20, modifying subsection (c) thereof:

 

Section 20. Application of Moneys in Funds and Account. The City covenants and agrees that so long as any of the Bonds remain Outstanding, moneys paid and deposited in the "Waterworks Revenue Fund" by the City will be administered and disposed of as follows:

 

(a) The City, each month, shall pay or make provision for the payment

from the moneys in the Waterworks Revenue Fund of all operating expenses, all maintenance and repair charges and all costs of the System due to obsolescence or other causes.

 

(b) After paying or making provision for the payment each month of the

reasonable and proper expenses of operating and maintaining the System for the current month, the City shall next pay and credit monthly from the Waterworks Revenue Fund to the Water Revenue Bonds, 7th Issue, Series B, Principal and Interest Account created by Ordinance No. 64785 of the City so long as any of the Series B Bonds remain Outstanding, to the Water Revenue Bonds, 7th Issue Series C, Principal and Interest Account created by Committee Substitute for Ordinance No. 911538 of the City so long as any of the Series C remain Outstanding and, to the Water Revenue Bonds, 7th Issue Series D, Principal and Interest Sinking Fund created by Ordinance No. 961459 of the City so long as any of the Series D Bonds remain Outstanding, all amounts required to be so paid and credited by the provisions of said ordinances and, at the same time that said payments and credits to said principal and interest sinking fund accounts are made, and on a parity therewith, the City shall pay and credit monthly from the Waterworks Revenue Fund to the 1996A Water Debt Fund, to the extent necessary to meet at the Maturity thereof all interest on and principal of the Bonds, the following sums:

 

(i) Beginning on the first of said monthly deposits, and continuing on the

first day of each month thereafter to and including November 1, 1996,

an equal pro rata portion of the amount of interest becoming due on

the Bonds on December 1, 1996; and thereafter, beginning on

December 1, 1996, and continuing on the first day of each month

thereafter so long as any of the Bonds shall remain Outstanding, an

amount not less than 1/6 of the amount of interest that will become

due on the Bonds on the next succeeding Interest Payment Date; and

 

(ii) Beginning with the first of said monthly deposits and continuing on

the first day of each month thereafter to and including November 1,

1997, an equal pro rata portion of the amount of principal becoming

due on the Bonds on December 1, 1997; and continuing on the first

day of each month thereafter, so long as any of the Bonds shall remain

Outstanding an amount not less than 1/12 of the amount of principal

that will become due on the Bonds on the next succeeding Principal

Payment Date; and

 

(iii) On the first day of each month in which fees, if any, of the Bond

Registrar and Paying Agent are scheduled to become due, such

amounts as may be required to pay such fees of the Bond Registrar

and the Paying Agent.

 

All amounts paid and credited to the 1996A Water Debt Fund shall be expended and used by the City for the sole purpose of paying any interest on and principal of the Bonds as and when the same become due and the fees of the Bond Registrar and the Paying Agent for acting as Bond Registrar and Paying Agent, if any.

 

If at any time the moneys in the Waterworks Revenue Fund shall be insufficient to make in full the payments and credits at the time required to be made by the City to the principal and interest accounts established to pay the then outstanding water revenue bonds of the City, including only the Bonds and other water revenue bonds of the City heretofore or hereafter issued and standing on a parity with the Bonds, the available moneys in the Waterworks Revenue Fund shall be divided among such principal and interest sinking fund accounts in proportion to the respective principal amounts of said series of water revenue bonds of the City at the time outstanding which are payable from the moneys in such principal and interest sinking fund accounts.

 

(c) Simultaneously with the issuance of the Bonds, the City shall provide

for the 1996 Bond Reserve Account to contain an amount equal to the Bond Reserve Requirement. In lieu of a cash deposit, the Bond Reserve Requirement may be satisfied by the Surety Bond.

 

The Director of Finance is hereby authorized to execute any and all

agreements with the Surety Provider in order to effectuate the issuance of a Surety Bond, specifically including but not limited to any agreement necessary in order to reimburse the Surety Provider for moneys advanced under the Surety Bond. In the event moneys are advanced by the Surety Provider, the City shall reimburse the Surety Provider from all funds legally available to the Waterworks Revenue Fund, subject only to the payments required by subsections (a) and (b) of this Section and the provisions of the last paragraph of subsection (d) of this Section.

 

As long as the Surety Bond shall be in full force and effect, the City and the

Paying Agent agree to comply with the following provisions:

 

(i) In the event and to the extent that moneys on deposit in the 1996A

Water Debt Fund plus any moneys on deposit in and credited to the

1996 Bond Reserve Account are insufficient to pay the amount of

principal and interest coming due, then upon the date of: (A) one (1)

day after receipt by the general counsel of Surety Provider 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 payment due under this Ordinance to pay

both principal of and interest on the Bonds becoming due on the next

Stated Maturity has not been made to the Paying Agent; or (B) the

Stated Maturity on the Bonds as specified in the Demand for Payment

presented by the Paying Agent to the general counsel of the Surety

Provider, Surety Provider will make a deposit of funds in an account

with the Paying Agent or its successors, in New York, New York,

sufficient for the payment to the Paying Agent, of amounts which are

then required to pay the principal 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 Surety Provider the

Demand for Payment as provided in (i) above, make available to the

Surety Provider all records relating to the funds and accounts

maintained under this Ordinance; and

 

(iii) the Paying Agent shall, upon receipt of moneys received from a

Demand for Payment under the Surety Bond, as specified in the

Demand for Payment, credit the 1996 Bond Reserve Account to the

extent of moneys received pursuant to such Demand for Payment.

 

(d) All moneys in any Bond Reserve Account will 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 1996 Bond Reserve Account and thereby reduce the amount therein below the Bond Reserve Requirement, except for the purpose of retiring all Outstanding Bonds, or should a valuation of the 1996 Bonds 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 1996 Bond Reserve Account, all available funds after providing for the payment and transfers set forth above, until the 1996 Bond Reserve Account shall have again attained the Bond Reserve Requirement.

 

If at any time the moneys in the Waterworks 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 water revenue bonds of the City including the Outstanding Parity Bonds, and Additional Bonds issued and standing on a parity with the Bonds, the available moneys in said Waterworks Revenue Fund shall be divided among such Bond Reserve Accounts in proportion to the respective principal amounts of said Series of water revenue bonds of the City at the time Outstanding which are payable from the moneys in such Bond Reserve Accounts.

 

(e) When and after there shall be in the Water Revenue Fund an amount

sufficient to pay the reasonable and proper expenses of operating and maintaining the System for the current month as provided in paragraph (a) of this Section and when and after all amounts at the time required to be paid and credited from the Water Revenue Fund under the provisions of paragraphs (b), (c) and (d) of this Section shall have been paid and credited, all moneys remaining in the Water Revenue Fund shall be credited monthly to the Surplus Account. Except as hereinafter provided, moneys in the Surplus Account shall be used solely for the following purposes, as determined by the Council:

 

(i) Paying the cost of operation, maintenance and repair of the System to

the extent that may be necessary after the application of the moneys

held in the Water Revenue Fund under the provisions of paragraph (a)

of this Section;

 

(ii) Anticipating payments into or increasing the amounts of the 1996A

Water Debt Fund and/or the 1996 Bond Reserve Account, referred to

in paragraphs (b) and (c) of this Section, or either of them, or

establishing or increasing the amount of any principal and interest

account or bond reserve account created by the City for the payment

of any water revenue bonds of the City heretofore or hereafter issued

and standing on a parity with the Bonds;

 

(iii) Paying the cost of enlarging, extending or improving the System,

including the acquisition of additional facilities by construction,

purchase, or by operation of law from other governmental agencies

and the assumption of the obligations thereof;

 

(iv) Paying the principal of and interest on any general obligation bonds of

the City issued to provide funds to make enlargements, extensions or

improvements of the System, exclusive of bonds payable wholly or in

part from assessments against property benefitted;

 

(v) As and when moneys accumulate in the Surplus Account of not less

than One Million Dollar ($1,000,000.00), the Director of Finance of

the City may advertise for tenders from the Owners of any Bonds

which at the time are subject to redemption from moneys in the

Surplus Account. Each request for tenders shall be published once in

an official newspaper or journal in the City of New York, New York.

Said notice shall specify the date on which sealed tenders will be

received and shall be published not less than fifteen days prior to the

date so specified. A copy of said notice shall be mailed to the

manager of the underwriting group that purchased the Bonds.

Purchase of Bonds shall be made by the acceptance of the lowest price

tenders received, such price not to exceed the redemption price;

 

(vi) Calling, redeeming and paying prior to their Stated Maturity the

Bonds or any other water revenue bonds of the City heretofore or

hereafter issued and standing on a parity with the Bonds; or

 

(vii) Paying all costs incident to the purchase or redemption of Bonds

including any interest or premium thereon.

 

No moneys credited to the Surplus Account shall ever be diverted or applied to the general governmental or municipal functions of the City so long as any of the Bonds remain Outstanding.

 

Section 5. That Committee Substitute for Ordinance No. 960924 is hereby further amended by adding the following sections to be renumbered as Section Nos. 32 and 33, respectively, and by repealing the existing Section Nos. 32 to 37 and enacting in lieu thereof Section Nos. 34 to 39, inclusive, solely for the purpose of renumbering these sections:

 

Section 32. Consent of Surety Provider.

 

Any provision of this Ordinance expressly recognizing or granting rights in or

to the Surety Provider may not be amended in any manner which affects the rights of the Surety Provider hereunder without the prior written consent of the Surety Provider.

 

The Surety Provider's consent hereunder shall be required in addition to

consent of the Owners, when required, for the following purposes (i) execution and delivery of any supplemental Ordinance or any amendment thereof; (ii) removal of the Paying Agent or selection and appointment of any successor paying agent; and (iii) initiation or approval of any action not described in (i) or (ii) above which requires consent of the Owners.

 

Section 33. Information to be Given Surety Provider.

 

(a) While the Surety Bond is in effect, the City shall furnish to the Surety

Provider:

 

(1) as soon as practicable after the filing thereof, a copy of any financial

statement of the City and a copy of any audit and annual report of the

City;

 

(2) a copy of any notice to be given to the Owners and any certificate

rendered pursuant to this Ordinance relating to the security for the

Bonds; and

 

(3) such additional information as it may reasonably request.

 

(b) The City will permit the Surety Provider to discuss the affairs, finances

and accounts of the City or any information the Surety Provider may reasonably request regarding the security for the Bonds with appropriate officers of the City. The City will permit the Surety Provider access to and to make copies of all books and records relating to the Bonds at any reasonable time.

 

(c) Notwithstanding any other provision of this Ordinance, (1) the Paying

Agent shall immediately notify the Surety Provider if at any time there are insufficient moneys to make any payments of principal and interest as required and (2) the Director of Finance of the City shall immediately notify the Surety Provider upon the occurrence of (i) any event of default hereunder, or (ii) any payment default under any related security agreement.

 

(d) The Surety Provider shall be given a copy of all notices required to be

given by the City under the Continuing Disclosure Agreement authorized by Section 39 hereof.

 

Section 34. Defeasance. When all of the Bonds shall have been paid and

discharged, and all rebate amounts payable to the United States pursuant to Section 148(f) of the Code have been paid or provided for, then the requirements contained in this Ordinance and the pledge of Net Revenues made hereunder and all other rights granted hereby shall terminate. Bonds shall be deemed to have been paid and discharged within the meaning of this Ordinance if there shall have been deposited with a bank or trust company located in the State of Missouri and having full trust powers, at or prior to the Stated Maturity or Redemption Date of said Bonds, in trust for and irrevocably appropriated thereto, moneys and/or Defeasance Obligations which, together with the interest to be earned on any such obligations, will be sufficient for the payment of the principal of said Bonds, the redemption premium thereon, if any, and interest accrued to the Stated Maturities or Redemption Date, as the case may be, or if default in such payment shall have occurred on such date, then to the date of the tender of such payments, provided always that if any such Bonds shall be redeemed prior to the Stated Maturities thereof, the City shall have elected to redeem such Bonds and notice of such redemption shall have been given. Any moneys and obligations which at any time shall be so deposited by or on behalf of the City, for the purpose of paying and discharging any of the Bonds, shall be and are hereby assigned, transferred and set over to such bank or trust company in trust for the respective Owners of the Bonds, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All moneys deposited with said bank shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Ordinance.

 

Section 35. Approval of Preliminary Official Statement and Official

Statement. The form and content of the Preliminary Official Statement dated August 9, 1996, and the use and public distribution thereof in connection with the public sale of the Bonds is hereby ratified and confirmed. The Director of Finance is hereby directed to review the information contained in the definitive Official Statement and is further authorized and directed to execute and deliver the City's approval of the Official Statement in such form as she shall finally approve. The use and public distribution of the Official Statement are hereby authorized and approved.

 

Section 36. Ongoing 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 attached hereto as Exhibit D, with such changes therein as she deems necessary or desirable.

 

Section 37. Severability. If any part of this Ordinance whether large or

small, shall be held invalid, the invalidity thereof shall not affect the other provisions of this Ordinance.

 

Section 38. Governing Law. This Ordinance shall be governed exclusively

by and construed in accordance with the applicable laws of the State of Missouri.

 

Section 39. Effective Date. This Ordinance shall take effect and be in full

force and effect ten (10) days after its passage.

 

Section 6. That the Bonds shall be duly prepared and executed in accordance with the provisions of Committee Substitute for Ordinance No. 960924, and the Bonds when duly prepared and executed shall be sold and delivered by the Director of Finance to Piper Jaffray Inc., the purchaser thereof, upon payment of the purchase price thereof to the City Treasurer or to the Director of Finance.

 

Section 7. This Ordinance is recognized to be an emergency measure within the provisions of Section 51, Article III of the Charter and shall take effect immediately upon its passage.

 

_______________________________________________

 

Approved as to form and legality:

 

 

 

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Assistant City Attorney