Bonds (State Revolving Fund
Program) Series 1995A, dated April 1, 1995, in the original principal amount of
$18,000,000.00, of which $17,850,000.00 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
Committee Substitute for Ordinance No. 950516 passed on April 20, 1995
(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 $22,520,000.00 remains outstanding as of the date of
passage of this Ordinance (the "Series 1996A Bonds"), authorized by
Committee Substitute for Ordinance No. 960253 passed on March 28, 1996 and
Committee Substitute for Ordinance No. 960440 passed on April 18, 1996 (the
"Series 1996A Ordinance"); and
WHEREAS, the City
has issued its Sewerage System Revenue Bonds (State Revolving Fund Program)
Series 1997A, dated April 1, 1997, in the original principal amount of
$22,235,000.00, of which $21,605,000.00 remains outstanding as of the date of
passage of this Ordinance (the "Series 1997A Bonds," the Series 1992A
Bonds, the Series 1992B Bonds, the Series 1995A Bonds, the Series 1996A Bonds
and the Series 1997A Bonds collectively referred to herein as the "Outstanding
Parity Bonds"), authorized by Ordinance No. 970285 passed on March 27,
1997 and Ordinance No. 970478 passed on April 10, 1997 (the "Series 1997A
Ordinance," the Series 1992A Ordinance, the Series 1992B Ordinance, the
Series 1995A Ordinance, the Series 1996A Ordinance and the Series 1997A
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 Revenues other than the Outstanding Parity
Bonds and the Bonds; and
WHEREAS, under the
provisions of the Outstanding Parity Bond Ordinance the City may issue
additional bonds payable out of the Revenues 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 and be sold to the
Authority under the SRF Program, subject to the conditions of the Outstanding
Parity Bond Ordinance; NOW, THEREFORE,
BE IT ORDAINED BY
THE COUNCIL OF KANSAS CITY:
ARTICLE I ARTICLE I
DEFINITIONS DEFINITIONS
Section 101. Definitions
of Words and Terms.
Capitalized words and terms not otherwise defined in this Ordinance have the meanings
set forth in the Purchase Agreement (defined below). In addition to the
foregoing and words and terms defined in the Recitals and elsewhere in this
Ordinance, capitalized words and terms have the following meanings in this
Ordinance:
"Administrative
Calculation Date" means the Business Day preceding each January 1,
commencing on the Business Day preceding January 1, 2000.
"Administrative
Fee" means the fee payable to DNR equal to 0.714% of the outstanding
principal amount of the Revolving Fund Loan on the Administrative Fee
Calculation Date.
"Authority"
means the State Environmental Improvement and Energy Resources Authority.
"Authority
Bonds" means the Water Pollution Control Revenue Bonds (State Revolving
Fund Program - Master Trust) Series 1998A of the Authority.
"Authority
Program Bonds" means the Authority Bonds and any other bonds of the
Authority issued under the SRF Program, all or a portion of the proceeds of
which are loaned to the City pursuant to the SRF Program.
"Authorized Representative"
means the representative of the City designated by the City in accordance with
the Regulations.
"Bondowner"
means the Authority or its assigns.
"Bond
Register" means the books for the registration, transfer and exchange of
Bonds kept at the office of the Paying Agent.
"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
Expenses" means all reasonable and necessary expenses of ownership,
operation, maintenance and repair of the System and keeping the System in good
repair and working order, 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 Consultant's
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 System, but excluding
interest paid on System Revenue Bonds, depreciation and amortization charges
(including payments into the Depreciation and Replacement Account), and all
general administrative expenses of the City not related to the operation of the
System.
"Defeasance
Securities" means:
(a) Federal
Securities;
(b) obligations
of the Resolution Funding Corporation or any successor, but only if the use of
the obligations to pay and discharge Bonds pursuant to Article XI will
cause the discharged Bonds to be rated in the highest long-term rating category
by the Rating Agency; or
(c) obligations
of any state of the United States of America or of any agency, instrumentality
or local governmental unit of any state that:
(i) are
not callable at the option of the obligor prior to maturity or for which
irrevocable instructions have been given by the obligor to call on the date
specified in the instructions, and
(ii) are
fully secured as to principal, redemption premium and interest by a fund,
consisting of cash or Federal Securities, that:
(A) may be
applied only to the payment of principal, redemption premium and interest on
the obligations, and
(B) is
sufficient, as verified by a nationally recognized independent certified public
accountant, to pay the principal, redemption premium and interest on the
obligations.
"Depreciation and Replacement
Account" means the fund or account created or ratified and confirmed by Section
401.
"DNR" means the Missouri
Department of Natural Resources.
"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.
"Interest Payment Date" means
each January 1 and July 1, commencing January 1, 1999.
"Net Revenues Available for Debt
Service" means, for the period of determination, Revenues less Current
Expenses.
"Operation and Maintenance
Account" means the fund or account created or ratified and confirmed by Section
401.
"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
canceled 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.
"Owner" means the Bondowner.
"Parity Bonds" means the Bonds,
the Outstanding Parity Bonds and any parity bonds issued under Section 902
payable from the Revenues on a parity basis with the Bonds.
"Parity Ordinances" means this
Ordinance, the Outstanding Parity Bond Ordinance and the ordinances under which
any other Parity Bonds are issued.
"Purchase Agreement" means the
Purchase Agreement dated as of April 1, 1998, by and among the City, the
Authority and DNR.
"Record Date" means the 15th day
(whether or not a Business Day) of the calendar month next preceding the
applicable Interest Payment Date.
"Revenues" means all income and
revenues derived by the City from the System, including investment and rental
income, net proceeds from business interruption insurance, sales tax revenues
which have been annually appropriated by the City or which are limited solely
to the payment of improvements to or expenses of the System and any amounts
deposited in escrow in connection with the acquisition, construction,
remodeling, renovation and equipping of facilities to be applied during the
period of determination to pay interest on System Revenue Bonds, 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.
"Revolving Fund Loan" means the
no-interest loan to the City by DNR from the Wastewater Loan Fund under the
Revolving Fund Agreement.
"Revolving Fund Agreement" means
the Revolving Fund Agreement dated as of April 1, 1998, by and among the City,
the Authority and DNR.
"Sewer Fund" means the fund or
account created or ratified and confirmed by Section 401.
"SRF Program" means the Missouri
Leveraged State Water Pollution Control Revolving Fund Program of DNR and the
Authority.
"SRF Program Bonds" means the
Bonds and any other System Revenue Bonds issued in connection with the City's
participation in the SRF Program.
"SRF Subsidy" means the amount
of investment earnings which will accrue on the Reserve Account or Reserve Fund
during each Fiscal Year (taking into account scheduled transfers from the
Reserve Account which will occur upon the payment of principal on the Authority
Program Bonds and assuming that the construction for the applicable project has
been completed), if the Reserve Security is equal to the Reserve Percentage of
the principal amount of the SRF Program Bonds outstanding, the Reserve Account
or the Reserve Fund is invested in an investment agreement at a fixed interest
rate during the calculation period and earnings are reduced by the
Administrative Fee payable to DNR. Administrative Fee, Reserve Account,
Reserve Fund, Reserve Percentage and Reserve Security as used in this
definition have the respective meanings set forth in the bond indentures for
the applicable Authority Program Bonds.
"State" means the State of
Missouri.
"Surplus Account" means the fund
or account created or ratified and confirmed by Section 401.
"System Revenue Bonds" means
collectively the Bonds, the Parity Bonds and all other revenue bonds which are
payable from the Revenues.
"Terms Certificate" means the
Terms Certificate of the City, dated the date of adoption of this Ordinance,
related to a purchase contract for the Authority Bonds.
"Terms Ordinance" means an
ordinance of the City adopted prior to the issuance of the Bonds, which
establishes the maturities, interest rates and sinking fund redemption provisions
for the Bonds.
"Trustee" means the trustee
acting at any time as Trustee under the Indenture.
Section 102. Additional Provisions;
Certain Terms and Provisions Not Applicable Under Certain Circumstances.
References in this Ordinance to the following words and terms are not
applicable if the Authority does not purchase the Bonds:
Administrative Calculation Date Authority
Administrative Fee Authority
Bonds
Authority
Program Bonds
Bondowner
DNR
Purchase Agreement Revolving
Fund Loan
Revolving
Fund Agreement
SRF
Program
SRF
Program Bonds
SRF Subsidy Trustee
Terms Certificate
The provisions of Sections 210(b), 211, 403,
501, 502, 602 and 701(a) are not applicable if the
Authority does not purchase the Bonds.
ARTICLE II ARTICLE II
AUTHORIZATION OF BONDS
AUTHORIZATION OF BONDS
Section 201. Authorization of Bonds.
The Bonds are authorized and directed to be issued in the Original Principal
Amount 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
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 issued on a
parity with the Outstanding Parity Bonds.
Section 203. Description of Bonds.
The Bonds consist of fully registered bonds without coupons, numbered from R-1
consecutively upward, in the denomination of $1,000.00 or any integral multiple
of $1,000.00. The Bonds will be issued in substantially the form of Section
203A (with the parenthetical reference set forth in the form of Bond if the
Bonds are purchased by the Authority) and will be registered, transferred and
exchanged as provided in Section 206. The Bonds are dated the Dated
Date as set forth on the Bonds. The Bonds become due on the dates and in the principal
amounts (subject to optional and mandatory redemption prior to maturity as
provided in Article III) and bear interest at the annual rates
established by the Terms Ordinance. 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 203A. Form of Bond. The
Bonds will be in substantially the following form, with appropriate insertions
and deletions as are approved by the Director of Finance, which approval will
be conclusively evidenced by the Director or Finance's signature on the Bond:
UNITED STATES OF AMERICA
STATE OF MISSOURI
Registered Registered
No. R-_____ $________
CITY OF KANSAS CITY, MISSOURI
SEWERAGE SYSTEM REVENUE BOND
[(STATE REVOLVING FUND
PROGRAM)]
SERIES 1998A
Interest Rate Maturity Date Dated Date
April 1, 1998
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, 1999 (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
STATE STREET BANK AND TRUST COMPANY OF MISSOURI, N.A. in the City of St. Louis,
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 "Sewerage System Revenue Bonds
[(State Revolving Fund Program)] Series 1998A" aggregating the principal
amount of $__________ (the "Bonds"), issued by the City for the
purpose of extending and improving its sewerage system (together with all
future improvements and extensions, the "System"), under the
authority of and in full compliance with Chapter 250 of the Revised Statutes of
Missouri and pursuant to an election duly held in the City and an ordinance
adopted by the governing body of the City (the "Ordinance").
Certain 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 Bonds
may be called for redemption and payment prior to maturity in whole or in part
on any date with the consent of the Bondowner, as provided in the Ordinance.
Bonds will be optionally redeemed in part
in integral multiples of $5,000 (unless otherwise approved in writing by the
Bondowner) from the maturities selected by the City with the prior written
consent of the Bondowner. Upon redemption, the sinking fund redemption amounts
for each maturity will be proportionately reduced, subject to rounding to
integral multiples of $5,000 (unless otherwise approved in writing by the
Bondowner). The City will give written notice to the Paying Agent, as trustee
(the "Trustee"), designating the amount of each maturity redeemed and
the reduction in each sinking fund installment, subject to verification by the
Trustee. In exercising its option to redeem the Bonds, the City will deposit
with the Paying Agent, in addition to the principal of, premium, if any, and
interest on the Bonds, an additional premium equal to 30-days' interest on the
Bonds to be redeemed for an additional 30-day period.
The Paying Agent will give notice of
redemption, unless waived, by mailing a redemption notice by registered or
certified mail at least 45 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 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 Revenues.
The Bonds are issued on a parity with
respect to payment of principal and interest from the 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 System to
produce Revenues sufficient to pay the operation and maintenance costs of the
System, pay the principal of and interest on the Bonds and provide
reasonable and adequate reserve funds. Reference is made to the
Ordinance for a description of the agreements made by the City with respect to
the collection, segregation and application of the Revenues, the nature and
extent of the security for the Bonds, the rights, duties and obligations of the
City with respect to the Bonds, and the rights of the Owners.
The Bonds are issuable in the form of
fully registered Bonds without coupons in the denomination of $1,000 or any
integral multiple of $1,000.
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 Owner's
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 System as
provided in the Ordinance.
IN WITNESS WHEREOF, the City of Kansas
City, Missouri, has executed this Bond by causing it to be signed by the manual
or facsimile signature of its Mayor, attested by the manual or facsimile
signature of its City Clerk, and countersigned by the manual or facsimile
signature of its Director of Finance, with its official seal affixed or
imprinted.
CERTIFICATE OF AUTHENTICATION CITY OF
KANSAS CITY, MISSOURI
This Bond is one of the Bonds
of the issue described in the
within-mentioned Ordinance. By
_____________________________
Mayor
Registration Date: _________________
STATE STREET BANK AND TRUST
COMPANY OF MISSOURI, N.A.,
Paying Agent (Seal)
ATTEST:
By _____________________ ________________________________
Authorized Signatory City
Clerk
COUNTERSIGNED
_____________________________
Director
of Finance
===============================================
RECORD OF PRINCIPAL PAYMENTS
AND PREPAYMENTS
Under the provisions of the Ordinance,
payments of the principal installments of this Bond and partial prepayments of
the principal of this Bond may be made directly to the Bondowner without
surrender of this Bond to the Paying Agent. Accordingly, any purchaser or
other transferee of this Bond should verify with the Paying Agent the principal
of this Bond outstanding prior to any purchase or transfer, and the records of
the Paying Agent are conclusive.
===============================================
===============================================
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 State Street Bank and Trust Company of
Missouri, N.A. 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
State
Street Bank and Trust Company
of Missouri, N.A.
NOTICE: Signature(s) must be
guaranteed by an eligible guarantor institution as defined by SEC Rule 17Ad-15
(17 CFR 240.17Ad-15).
===============================================
Section 204. Designation of Paying
Agent.
The Trustee is designated as the City's paying agent for the payment of the
Bonds and bond registrar for the registration, transfer and exchange of Bonds
(the "Paying Agent"). The Paying Agent will not be paid any
additional fees for its services under this Ordinance.
Section 205. 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) The 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 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 206. 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 Owner's
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 Owner's order
will be valid and effectual to satisfy and discharge
the City's 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 207. 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 208. 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 209. Cancellation and
Destruction of Bonds Upon Payment. All Bonds which have been paid or
redeemed or which have otherwise been surrendered to the Paying Agent, either
at or before maturity, will be canceled immediately upon the payment or
redemption and the Paying Agent's receipt of the Bonds. Canceled Bonds will be
periodically destroyed by the Paying Agent. The Paying Agent will execute a
certificate in duplicate describing the destroyed Bonds and file an executed
counterpart of the certificate with the City.
Section 210. Sale of the Bonds;
Authorization and Execution of Documents.
(a) The sale of the Bonds in
accordance with the terms of the Notice of Bond Sale dated March 26, 1998 is
approved. The Director of Finance is authorized to approve the award of the
Bonds for the best bid received in accordance with the Notice of Bond Sale.
(b) The City is authorized to enter
into the Purchase Agreement and the Revolving Fund Agreement, in substantially
the forms presented to the Governing Body. The Director of Finance is
authorized to execute the Purchase Agreement, the Revolving Fund Agreement and
the Terms Certificate for and on behalf of and as the act and deed of the City,
with changes approved by the Director of Finance, which approval will be
conclusively evidenced by the Director or Finance's signature. The Mayor and
the Director of Finance are further authorized and directed to execute other
documents, certificates and instruments that are necessary or desirable to
carry out the intent of this Ordinance. The City Clerk is authorized and
directed to attest the execution of the Purchase Agreement and the Revolving
Fund Agreement and any other documents, certificates and instruments that are
necessary or desirable to carry out the intent of this Ordinance, the Terms
Ordinance and the Terms Certificate.
Section 211. Administrative Fee and
Other Fees; Revolving Fund Loan.
(a) Subject to Section 202,
the City will pay to the Trustee for deposit in the Administrative Expense Fund,
within 30 days after receipt of a statement from the Trustee (i) the
Administrative Fee, (ii) the City's Allocable Portion of the Master Trustee's
Disclosure Fee, and (iii) the City's Allocable Portion of the Trustee's Fee.
(b) The City is authorized to
receive the Revolving Fund Loan under the terms of the Revolving Fund
Agreement. By this Ordinance, the City assigns the proceeds of the Revolving
Fund Loan, as and when received, to the Authority.
ARTICLE III ARTICLE III
REDEMPTION OF BONDS
Section 301. Mandatory Sinking Fund
Redemption. The Term Bonds defined in the Terms Ordinance will be redeemed
in part on the dates and in the principal amounts in the Terms Ordinance at a
redemption price equal to 100% of the principal amount redeemed plus accrued
interest to the redemption date.
Section 302. Optional Redemption. At
the option of the City, certain Bonds may be called for redemption and payment
prior to maturity in whole or in part on the dates and at the redemption prices
set forth in the Terms Ordinance. Bonds will be optionally redeemed in part in
integral multiples of $5,000.00 (unless otherwise approved in writing by the
Bondowner) from the maturities selected by the City with the prior written
consent of the Bondowner. Upon redemption, the sinking fund redemption amounts
for each Term Bond specified in the Terms Ordinance will be proportionately
reduced, subject to rounding to integral multiples of $5,000 (unless otherwise
approved in writing by the Bondowner). The City will give written notice to
the Trustee designating the amount of each maturity redeemed and the reduction
in each sinking fund redemption amount, subject to verification by the
Trustee. In exercising its option to redeem the Bonds, the City will deposit
with the Paying Agent, prior to the redemption date, an additional premium
equal to 30-days' interest on the Bonds to be redeemed.
Section 303. Selection of Bonds to Be
Redeemed. If all Outstanding Bonds are held by the Bondowner, the
redemption of the Bonds in part will be reflected in the records maintained by
the Paying Agent. If the Bonds are held by any Owner other than the Bondowner,
the City, with the prior written consent of the Paying Agent and the Owners,
will establish procedures for the selection of Bonds upon partial redemption.
Section 304. Notice and Effect of Call
for Redemption.
(a) If all Outstanding Bonds are
held by the Bondowner, no notice of the mandatory sinking fund redemption of
Bonds is required to be given. If the Bonds are held by any Owner other than
the Bondowner or if Bonds are being optionally redeemed, notice of redemption
will be given in the manner described below. Unless waived by any Owner of
Bonds to be redeemed, the Paying Agent, on behalf of the City, will give notice
by mailing a redemption notice by registered or certified mail, at least 45
days prior to the date fixed for redemption, to the each Owner of Bonds to be
redeemed at the address shown on the Bond Register.
(b) All redemption notices will be
dated and include the following information:
(1) the redemption
date,
(2) the
redemption price, consisting of the principal amount, redemption premium, if
any, and interest to the redemption date,
(3) if less
than all Outstanding Bonds are to be redeemed, the identification (and, in the
case of partial redemption, the respective principal amounts) of the Bonds to
be redeemed,
(4) a
statement that on the redemption date the redemption price will become due and
payable upon each Bond or portion of a Bond called for redemption, and that
interest ceases to accrue on the redeemed amount from and after the redemption
date, and
(5) the address
of the principal office of the Paying Agent where the Bonds must be surrendered
for payment of the redemption price.
(c) If notice of redemption has
been given or waived, the Bonds or portions to be redeemed will become due and
payable on the redemption date at the redemption price specified in the
notice. From and after the redemption date (unless the City defaults in the
payment of the redemption price), the called Bonds will cease to bear
interest. Upon the surrender of Bonds for payment of the redemption price in
accordance with the notice, the Paying Agent will pay the redemption price to
the applicable Owners. Upon the Paying Agent's receipt of any Bond being
partially redeemed, the Paying Agent will prepare a new Bond or Bonds of the same
maturity in the amount of the unpaid principal.
ARTICLE IV
RATIFICATION OF FUNDS AND
ACCOUNTS
Section 401. Ratification of Funds and
Accounts.
(a) The separate funds and accounts
created in, or ratified and confirmed by, the Series 1992A Ordinance known
respectively as the:
(1) Sewer
Fund (herein referred to as the "Sewer Fund");
(2) Sewerage
System Depreciation and Replacement Account (herein referred to as the
"Depreciation and Replacement Account");
(3) Kansas
City Sewerage System Refunding and Improvement Revenue Bonds, Series 1992, Bond
Reserve Account (the "Series 1992A Reserve Account");
(4) Kansas
City Sewerage System Refunding and Improvement Revenue Bonds, Series 1992,
Principal and Interest Account (the "Series 1992A Debt Service
Account"); and
(5) Kansas
City Sewerage System Refunding and Improvement Revenue Bonds, Series 1992,
Surplus Account (herein referred to as the "Surplus Account");
are ratified and confirmed.
(b) The separate accounts
acknowledged under Section 503 of the Series 1992B Ordinance are acknowledged:
(1) Construction
Account;
(2) Reserve
Account (the "Series 1992B Reserve Account");
(3) Debt
Service Account (the "Series 1992B Debt Service Account");
(4) Principal
Account (the "Series 1992B Principal Account"); and
(5) Interest
Account (the "Series 1992B Interest Account").
(c) The separate accounts held
under Section 503 of the Series 1995A Ordinance are acknowledged:
(1) Construction Loan
Fund;
(2) Reserve Fund (the
"Series 1995A Reserve Fund");
(3) Debt Service Fund
(the "Series 1995A Debt Service Fund");
(4) Principal Account
(the "Series 1995A Principal Account"); and
(5) Interest Account
(the "Series 1995A Interest Account").
(d) The separate accounts held
under Section 503 of the Series 1996A Ordinance are acknowledged:
(1) Construction Loan
Fund;
(2) Reserve Fund (the
"Series 1996A Reserve Fund");
(3) Debt Service Fund
(the "Series 1996A Debt Service Fund");
(4) Principal Account
(the "Series 1996A Principal Account"); and
(5) Interest Account
(the "Series 1996A Interest Account").
(e) The separate accounts held
under Section 403 of the Series 1997A Ordinance are acknowledged:
(1) Sewer System
Project Account;
(2) Sewer
System Reserve Account (the "Series 1997A Reserve Account," the
Series 1997A Reserve Account, the Series 1992A Reserve Account, the Series
1992B Reserve Account, the Series 1995A Reserve Fund and the Series 1997A
Reserve Fund are collectively the "Outstanding Parity Bond Reserve
Account";
(3) Sewer
System Debt Service Account (the "Series 1997A Debt Service
Account");
(4) Sewer System
Principal Account (the "Series 1997A Principal Account"); and
(5) Sewer
System Interest Account (the "Series 1997A Interest 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 Debt Service Account, the Series 1992B Principal
Account, the Series 1992B Interest Account and the Series 1992A Debt Service
Account are collectively the "Outstanding Parity Bond Debt Service
Account), the Public Works Principal Account and the Public Works Interest Account.
Section 402. Administration of Funds
and Accounts.
The funds and accounts described in subparagraphs (a)(1), (2) and (5) of Section
401 will be maintained and administered by the City while any of the Bonds
and the Outstanding Parity Bonds are Outstanding. The funds and accounts
referred to in subparagraphs (a)(3) and (4) of Section 401 will be
maintained and administered by the City while any of the Series 1992A Bonds
remain Outstanding and unpaid. The accounts referred to in paragraph (b) of Section
401 will be maintained and administered while any of the Series 1992B Bonds
remain Outstanding and unpaid. The accounts referred to in paragraph (c) of Section
401 will be maintained and administered while any of the Series 1995A Bonds
remain Outstanding and unpaid. The accounts referred to in paragraph (d) of Section
401 will be maintained and administered while any of the Series 1996A Bonds
remain Outstanding and unpaid. The accounts referred to in paragraph (e) of Section
401 will be maintained and administered while any of the Series 1997A Bonds
remain Outstanding and unpaid.
Section 403. Acknowledgment of
Accounts.
(a) The City acknowledges the
creation of the following accounts for the City held by the Trustee under the
Indenture:
(1) Construction
Account;
(2) Reserve Account;
(3) Debt Service
Account;
(4) Principal Account;
and
(5) Interest Account.
(b) The City further acknowledges
that certain amounts will be transferred to the Costs of Issuance Fund and the
Administrative Expense Fund under the Indenture in satisfaction of certain City
obligations under this Ordinance, the Purchase Agreement and the Revolving Fund
Agreement.
ARTICLE V ARTICLE V
APPLICATION OF BOND PROCEEDS
APPLICATION OF BOND PROCEEDS
Section 501. Disposition of Bond
Proceeds.
The proceeds received from the sale of the Bonds, including any premium and
accrued interest, will be deposited simultaneously with the delivery of the
Bonds, as follows:
(1) Into
the Costs of Issuance Fund an amount not to exceed $275,000 for Costs of
Issuance as approved by the Director of Finance;
(2) Into
the Interest Account the accrued interest on the Bonds; and
(3) Into
the Construction Account the remaining proceeds of the Bonds.
Section 502. Assignment and
Application of Moneys in the Construction Account.
(a) Moneys in the Construction
Account will be disbursed to the City for the sole purpose of paying the cost
of extending and improving the System in accordance with the plans and specifications
prepared by the Consulting Engineer, previously approved by the Governing Body
and DNR and on file in the office of the City Clerk, including any alterations
in or amendments to the plans and specifications deemed advisable by the
Consulting Engineer and approved by the Director of Water Services of the City
and DNR.
(b) Requisitions will be submitted
for withdrawals from the Construction Account in accordance with Article III
of the Purchase Agreement.
ARTICLE VI ARTICLE VI
APPLICATION OF REVENUES
APPLICATION OF REVENUES
Section 601. Sewer Fund.
The City covenants and agrees that from and after the delivery of the Bonds,
all Revenues derived and collected by the City will be deposited into the Sewer
Fund when received. The Revenues will be segregated from all other moneys,
revenues, funds and accounts of the City. 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 602. Application of Moneys in
Funds and Accounts.
(a) The City will apply moneys in
the Sewer Fund on the dates, in the amounts and in the order as follows:
(1) On the
first day of each month to the Operation and Maintenance Account an amount
sufficient to pay the estimated cost of operating and maintaining the System
during the ensuing 30-day period;
(2) On the
25th day of each month, on a parity basis (i) to the Outstanding Parity Bond
Debt Service Account the amount required under the Outstanding Parity Bond
Ordinance for the following month and (ii) the following amounts to the Trustee
for credit to the Interest Account and the Principal Account:
(A) on May
25, 1998 to and including December 25, 1998, to the Interest Account 1/8 of the
amount of interest on the Bonds due on January 1, 1999 less accrued interest
deposited to the Interest Account; and on January 25, 1998 and thereafter 1/6
of the amount of interest due on the Bonds on the next Interest Payment Date,
with these monthly payments to be reduced as follows:
(I) the
balance in the Debt Service Account on an Interest Payment Date after the
payment of the principal of and interest due on the Authority Bonds on the
Interest Payment Date will be credited against the next succeeding monthly
payment or payments; and
(II) the
projected investment earnings on the Reserve Account for the current Interest
Period and actual investment earnings for the prior Interest Period reduced by
estimated earnings for the preceding Interest Period that were previously
credited, as set forth in the Trustee's semiannual notice to the City, will be
credited in equal installments against the monthly payments due prior to the
next Interest Payment Date; and
(B) On
January 25, 1999 and each monthly payment date thereafter, to the Principal
Account 1/12 of the principal due on the Bonds on the next succeeding principal
payment date, whether at maturity or upon mandatory sinking fund redemption.
If the Initiation of Operation specified in the certificate delivered by the
City under Section 3.5 of the Purchase Agreement is earlier than the expected
Initiation of Operation on the City's signature page to the Purchase Agreement,
(i) the first monthly installment of principal will be paid no later than the
monthly payment date which is not more than 12 months after the Initiation of
Operation, and (ii) on the monthly payment date which is not more than 20 years
after the Initiation of Operation, all remaining unpaid principal installments
will be paid;
(3) On the
dates required by Section 211(a), to the Trustee, for deposit to the
Administrative Expense Fund, the amount required to pay the Administrative Fee,
the City's Allocable Portion of the Trustee's Fee and the City's Allocable
Portion of the Master Trustee's Disclosure Fee;
(4) 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 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
(5) On the
first day of each month the remaining balance to the 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 Interest Account, the Principal Account and the Outstanding Parity
Bond Debt Service Account, the City will apply the remaining balance in the
Sewer Fund 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.
(c) 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 Reserve Account and to the Outstanding Parity Bond Debt Service
Reserve Account, the City will divide the balance in the Sewer Fund between the
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).
(d) Moneys in the 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 System to the extent
necessary after the application of the moneys held in the Operation and
Maintenance Account and in the Depreciation and Replacement Account;
(2) Paying the cost of
extending, enlarging or improving the System;
(3) Preventing
default in, anticipating payments into or increasing the amounts in the
accounts confirmed or established in Section 402, the Principal Account,
the Interest Account, the Reserve Account or the Depreciation and Replacement
Account, or establishing or increasing the amount of any principal and interest
account or debt service reserve account created by the City for the payment of
any 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 Parity Bonds or any other
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.
(e) All amounts paid and credited
to the Operation and Maintenance Account will be expended solely for the
purpose of paying the Current Expenses of the System.
(f) No moneys derived by the City
from the System will be diverted to the general governmental or municipal
functions of the City.
Section 603. Deficiency of Payments
into Funds and Accounts.
(a) If the Revenues are
insufficient to make any payment on any date specified in this Article, the
City will make good the amount of the deficiency by making additional payments out
of the first available Revenues for application in the order specified in Section
602.
(b) If the moneys in the
Outstanding 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 Parity Bonds and the Bonds as and when the same become due, the
City will apply moneys in the Surplus Account 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 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 System Revenue Bonds, from the debt service
reserve accounts, the Reserve Account and the Surplus Account as provided in Sections
602 and 603, sums sufficient to pay the 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. Except as otherwise provided
in the Indenture, all moneys deposited by the City with the Paying Agent are
subject to the provisions of this Ordinance.
ARTICLE VII ARTICLE VII
DEPOSIT AND INVESTMENT OF
MONEYS DEPOSIT AND INVESTMENT OF MONEYS
Section 701. Investment
of Moneys.
(a) Moneys
in the Interest Account, the Principal Account, the Debt Service Account and
the Reserve Account are assigned by the City to the Authority to secure the
City's obligations under this Ordinance and the City acknowledges that moneys
in the Interest Account, the Principal Account, the Debt Service Account and
the Reserve Account will be invested by the Authority, subject to the Arbitrage
Instructions, in Investment Securities in accordance with Section 4.9 of
the Indenture. Moneys in the Construction Account will be invested by the
Trustee at the written direction of the City, subject to the Arbitrage
Instructions, in Investment Securities in accordance with Section 4.9 of
the Indenture. Moneys in each of the other funds and accounts created or
ratified and confirmed by this Ordinance may be invested by the City in
obligations as may be permitted by law, but no investment will be made for a
period extending longer than the date when the moneys invested may be needed.
All earnings on any investments held in any fund or account will accrue to the
applicable fund or account. In determining the amount held in any fund or
account under this Ordinance, obligations will be valued at the lower of cost
or market value. If the amount in any fund or account held within the Treasury
of the City is greater than the required amount, the City may transfer the
excess to the Sewer Fund.
(b) If the
Outstanding Parity Bonds are outstanding, any investments made pursuant to this
Section are subject to the applicable restrictions in the Outstanding Parity
Bond Ordinance.
ARTICLE VIII ARTICLE VIII
PARTICULAR COVENANTS OF THE
CITY PARTICULAR COVENANTS OF THE CITY
Section 801. Efficient and Economical
Operation.
The City will continuously own and will operate the System in an efficient and
economical manner and will keep and maintain the System in good repair and
working order.
Section 802. Rate Covenant.
The City will fix, establish, maintain and collect rates and charges for the
use and services furnished by or through the System to produce income and
revenues sufficient to (a) pay the costs of the operation and maintenance of
the System; (b) pay the principal of and interest on the Bonds as and when due;
(c) enable the City to have in each Fiscal Year Net Revenues Available for Debt
Service 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 System
Revenue Bonds at the time outstanding, 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 System as provided in this
Ordinance. The City will require the prompt payment of accounts for service
rendered by or through the System and will promptly take whatever action is
legally permissible to enforce and collect delinquent charges.
Section 803. Reasonable Charges for
all Services.
None of the facilities or services provided by the System will be furnished to
any user (excepting the City itself) without a reasonable charge being made
therefor. If the income and revenues derived by the City from the System are
insufficient to pay the reasonable expenses of operation and maintenance of the
System and the principal of and interest on the Bonds when due, the City will
pay into the Sewer Fund a fair and reasonable payment in accordance with
effective applicable rates and charges for all services or other facilities furnished
to the City or any of its departments by the System.
Section 804. Annual Budget.
Prior to the commencement of each Fiscal Year, the City will cause a budget
setting forth the estimated receipts and expenditures of the System for the
next succeeding Fiscal Year to be prepared and filed with the City Clerk. The
City Clerk, within 30 days after the end of the current Fiscal Year, will mail
a copy of the budget to the Bondowner and the Trustee. The annual budget will
be prepared in accordance with the laws of the State.
Section 805. Annual Audit.
(a) Promptly after the end of each
Fiscal Year, the City will cause an audit of the System for the preceding
Fiscal Year to be made by a certified public accountant or firm of certified
public accountants employed for that purpose and paid from the Revenues. The
annual audit will cover in reasonable detail the operation of the System during
the Fiscal Year.
(b) Within 180 days after the end
of the City's Fiscal Year, a copy of the annual audit will be filed in the
office of the City Clerk, and a duplicate copy of the audit will be mailed to
the Bondowner and the Trustee. The annual audit will be open to examination
and inspection during normal business hours by any taxpayer, any user of the
services of the System, any Owner of the Bonds, or anyone acting for or on
behalf of the taxpayer, user or Owner.
(c) As soon as possible after the
completion of the annual audit, the Governing Body will review the annual
audit, and if the annual audit reveals any breach of this Ordinance, the City
agrees to promptly cure the breach.
Section 806. Performance of Duties.
The City will faithfully and punctually perform all duties and obligations with
respect to the operation of the System now or hereafter imposed upon the City
by the Constitution and laws of the State and the provisions of this Ordinance.
Section 807. 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 Authority Bonds from
gross income for federal income tax purposes. The City will not use or permit
the use of any proceeds of the 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 Authority 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 Authority Bonds will
remain excluded from federal gross income.
(b) The City (1) will use the
proceeds of the Bonds as soon as practicable for the purposes for which the
Bonds are issued, and (2) will not invest or directly or indirectly use or
permit the use of any proceeds of the Bonds or any other funds of the City in
any manner, or take or omit to take any action, that would cause the Authority
Bonds to be "arbitrage bonds" within the meaning of Section 148(a) of
the Code.
(c) The City expects that more than
75% of the proceeds of the Bonds will be expended for "construction"
as that term is used in Section 148(f)(4)(C)(iv) of the Code.
(d) The City will not use any
portion of the proceeds of the Bonds, including any investment income earned on
the proceeds, directly or indirectly, (1) in a manner that would cause any
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.
(e) The City will pay to the
Trustee, for deposit to the Interest Account and subsequent transfer as
provided in the Indenture, an amount equal to arbitrage rebate and the costs
incurred in connection with determining arbitrage rebate, at the times required
by the Arbitrage Instructions. The provisions of this paragraph will survive
the payment in full or defeasance of the Bonds.
ARTICLE IX ARTICLE IX
ADDITIONAL BONDS ADDITIONAL
BONDS
Section 901. Prior Lien Bonds.
Except as provided in Section 904, the City will not issue any
debt obligations payable out of the Revenues which are superior in lien,
security or otherwise to the Bonds.
Section 902. Parity Lien Bonds or
Obligations.
(a) The City will not issue any
additional bonds or other long-term obligations payable out of the Revenues of
the System 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 Trustee a certificate showing either of
the following:
(A) The
average annual Net Revenues Available for Debt Service as set forth in the last
available annual audits for the two Fiscal Years immediately preceding the
issuance of additional bonds, are at least 110% of the average annual debt
service on the System Revenue Bonds, including the additional bonds proposed to
be issued, to be paid out of the Net Revenues Available for Debt Service in
succeeding Fiscal Years. Interest to be paid on any SRF Program Bonds may be
reduced by the SRF Subsidy, if any. If the City has made any increase in rates
for the use and services of the System and the increase has not been in effect
during all of the two Fiscal Years for which annual audits are available, the
City may add the additional Net Revenues Available for Debt Service which would
have resulted if the rate increase been in effect for the entire period to the
audited Net Revenues Available for Debt Service; or
(B) The
estimated average annual Net Revenues Available for Debt Service for the two
Fiscal Years immediately following the Fiscal Year in which the improvements to
the 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 System Revenue Bonds, including the additional bonds
proposed to be issued, to be paid out of the Net 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 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 Revenues Available for Debt Service
resulting from any increase in rates for the use and services of the 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 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 Revenues.
Section 903. 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 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 904. Refunding Bonds. The City may, without
complying with the provisions of Section 902, refund any of the Bonds in
a manner which provides debt service savings to the City, and the refunding
bonds so issued will be on a parity with any of the Bonds that are not
refunded. If the Bonds are refunded in part and the refunding bonds bear a higher
average rate of interest or become due on a date earlier than that of the Bonds
which are refunded, the City must obtain the prior written consent of the
Bondowner and DNR to the issuance of the refunding bonds.
ARTICLE X ARTICLE X
DEFAULT AND REMEDIES DEFAULT AND REMEDIES
Section 1001. Event of Default. If
(i) the City defaults in the payment of the principal of or interest on any of
the Bonds, or (ii) the City or its Governing Body or any of its officers,
agents or employees fails or refuses to comply with any provision of this
Ordinance, the Constitution or statutes of the State, the Purchase Agreement or
the Revolving Fund Agreement and default continues for a period of 60 days
after written notice specifying the non-payment default has been given to the
City by the Trustee, the Authority, DNR or the Owner of any Bond then
Outstanding, at any time thereafter and while the default continues, the City
shall pay to DNR the penalties assessed by DNR in accordance with the
Regulations. The penalties will be assessed as a reduction in the credit
provided in Section 602(a)(2)(A).
Section 1002. 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 10% 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 trustees 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 1003. Limitation on Rights of
Bondowners. No
Owner has any right in any manner whatever by the Owner's 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 1004. 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 1005. 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 XI ARTICLE XI
DEFEASANCE DEFEASANCE
Section 1101. Defeasance.
When all of the Bonds have been paid and discharged, the provisions of this
Ordinance (other than Section 807) 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
Trustee under the Indenture, (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, plus an additional premium
on Bonds being optionally redeemed equal to interest that would otherwise
accrue on the Bonds for an additional 30-day period, and (ii) an opinion of
Bond Counsel, addressed to the Authority and the Trustee, 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
Authority 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
XII ARTICLE XII
AMENDMENTS AMENDMENTS
Section
1201. Amendments.
(a) The
provisions of this Article are not applicable to the Terms Ordinance.
(b) Any
provision of the Bonds or of this Ordinance may be amended by an ordinance with
the written consent of the Authority and the Trustee. Consent must be
evidenced by an instrument executed by the Authority and the Trustee,
acknowledged or proved in the manner of a deed to be recorded, and filed with
the City Clerk. In addition, the prior written consent of the Bondowner and
DNR 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 delivered to the Bondowner,
the Trustee and DNR 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 Authority 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 XIII ARTICLE XIII
MISCELLANEOUS PROVISIONS
MISCELLANEOUS PROVISIONS
Section
1301. 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
1302. 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
1303. Governing Law.
This Ordinance is governed by and will be construed in accordance with the laws
of the State.
Section
1304. 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:
_______________________________________
Assistant
City Attorney