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HomeMy WebLinkAbout2015-03-02-Resolutions 15-066_Bonds - Natural Gas Revenue Refunding CLN Series 2015 - IssuanceRESOLUTION 15-066 A RESOLUTION APPROVING AND AUTHORIZING A FORM OF LOAN AGREEMENT AND AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SECURING THE PAYMENT OF $2,632,000 NATURAL GAS UTILITY REVENUE REFUNDING CAPITAL LOAN NOTES,SERIES 2015,OF THE CITY OF WAUKEE,STATE OF IOWA,UNDER THE PROVISIONS OF THE CITY CODE OF IOWA,AND PROVIDING FOR A METHOD OF PAYIvKNT OF THE NOTES WHEREAS,the City of Waukee,Iowa (heretofore the "City"or "Issuer")did heretofore establish a Municipal Natural Gas Utility,the management and control of which is vested in the City Council;and WHEREAS,the Issuer has heretofore established charges,rates and rentals for services wiiich are and will continue to be collected as system revenues of the Natiual Gas Utility, sometimes hereinafter referred to as the "System",and the Net Revenues are available for the payment of Natural Gas Utility Revenue Refunding Capital Loan Notes,Series 2015,subject to the following premises;and WHEREAS,Issuer proposes to issue its Natural Gas Utility Revenue Refunding Capital Loan Notes,Series 2015,to the extent of $2,632,000,for the purpose of defraying the costs of the project as set forth in Section 3 of this Resolution;and,it is deemed necessary and advisable and in the best interests of the City that a form of Loan Agreement be approved and authorized; and WHEREAS,the Issuer is in need of funds to pay costs of refunding outstanding City indebtedness,including Natural Gas Utility Revenue Capital Loan Notes,Series 2007,and it is deemed necessary and advisable that Natural Gas Utility Revenue Refunding Capital Loan Notes,Series 2015,to the amount of $2,632,000 be authorized for said purpose{s);and WHEREAS,the notice of intention of Issuer to take action for the issuance of not to exceed $3,200,000 Natural Gas Utility Revenue Refunding Capital Loan Notes,Series 2015,has heretofore been duly published and no objections to such proposed action have been filed;and the Issuer desires to proceed with the issuance of $2,632,000 Natural Gas Utility Revenue Refunding Capital Loan Notes: NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WAUKEE,1N THE COUNTY OF DALLAS,STATE OF IOWA: Section 1.Definitions.The following terms shall have the following meanings in tins Resolution unless the text expressly or by necessary implication requires otherwise: "Additional Obligations"shall mean any natural gas utility revenue notes or bonds issued on a parity with the Notes in accordance with the provisions of this Resolution. ~"Call Date"shall mean June 1,2015,on which date the Refunded Bonds shall be redeemed and paid. ~"Clerk"shall mean the City Clerk,or such other officer of the successor Governing Body as shall be charged with substantially the same duties and responsibilities. ~"Fiscal Year"shall mean the twelve-month period beginning on July 1 of each year and ending on the last day of June of the following year,or any other consecutive twelve-month period adopted by the Governing Body or by law as the official accounting period of the System,Requirements of a Fiscal Year as expressed in tliis Resolution shall exclude any payment of principal or interest falling due on the first day of the Fiscal Year and include any payment of principal or interest falling due on the first day of the succeeding Fiscal Year,except to the extent of any conflict with the terms of the Outstanding Bonds while the same remain outstanding. ~"Governing Body"shall mean the City Council of tbe City,or its successor in function with respect to the operation and control of the System. ~"Independent Auditor"shall mean an independent firm of Certified Public Accountants or the Auditor of State. "Issuer"and "City"shall mean the City of Waukee,State of Iowa. ~"Loan Agreement"shall mean a Loan Agreement between the Issuer and a lender or lenders in substantially the form attached to and approved by this Resolution. ~"Net Revenues"shall mean gross earnings of the System after deduction of current expenses;"Current Expenses"shall mean and include the reasonable and necessary cost of operating,maintaining,repairing and insuring the System,including purchases at wholesale,if any,salaries,wages,and costs of materials and supplies but excluding depreciation and principal of and interest on the Notes and any Parity Obligations or payments to the various funds established herein;capital costs, depreciation and interest or principal payments are not System expenses. ~"Notes"shall mean $2,632,000 Natural Gas Utility Revenue Refunding Capital Loan Notes,Series 2015,authorized to be issued by this Resolution. ~"Original Purchaser"shall mean the purchaser of the Notes fiom Issuer at the time of their original issuance. "Parity Obligations"shall mean natural gas utility revenue notes,bonds or other obligations payable solely from the Net Revenues of the System on an equal basis with. the Notes herein authorized to be issued,and shall include Additional Obligations as authorized to be issued under the terms of this Resolution and the Outstanding Obligations. ~"Paying Agent"shall mean Bankers Trust Company,or such successor as may be approved by Issuer as provided herein and who shall carry out the duties prescribed herein as Issuer's agent to provide for the payment of principal of and interest oii the Notes as the same shall become due. ~"Permitted Investments"shall mean any investments permitted in Iowa Code chapter 12B or section 12C.9.All interim investments must mahue before the date on which the moneys are required for payment of principal and interest on the Notes or project costs. ~"Prior Note Resolution"shall mean Resolution No.07-114,dated June 18,2007, authorizing the Refunded Bonds. ~"Project Fund"shall mean the fund into which a portion of the proceeds that will be used,together with interest earnings thereon,to pay the principal,interest and redemption premium,if any,on the Refunded Bonds. "Refunded Bonds"shall mean $3,110,000 of the $5,675,000 Natural Gas Utility Revenue Bonds,Series 2007 dated July 9,2007. ~"Registrar"shall mean Bankers Trust Company of Des Moines„Iowa,or such successor as may be approved by Issuer as provided herein and who shall carry out the duties prescribed herein with respect to maintaining a register of the owners of the Notes. Unless otherwise specified,the Registrar shall also act as Transfer Agent for the Notes. "Resolution"shall mean this resolution authorizing the issuance of the Notes. ~"System"shall mean the Natural Gas Utility of the Issuer and all properties of every nature hereinafter owned by the Issuer comprising part of or used as a part of the System,including all improvements and extensions made by Issuer wlule any of the Notes or Parity Obligations remain outstanding;all real and personal property;and all appurtenances,contracts,leases,franchises and other intangibles. "Tax Exemption Certificate"shall mean the Tax Exemption Certificate executed by the Treasurer and delivered at the time of issuance and delivery of the Notes. "Treasurer"shall mean the Director of Finance or such other officer as shall succeed to the same duties and responsibilities with respect to the recording and payment of the Notes issued hereunder. ~"Yield Restricted"shall mean required to be invested at a yield that is not materially higher than the yield on the Notes under section 148 (a)of the Internal Revenue Code or regulations issued thereunder. Section 2.A~uthori .The Loan Agreentent and the Notes authorized by this Resolution shall be issued pursuant to Sections 384.24A and 384.83,of the City Code of Iowa,and in compliance with all applicable provisions of the Constitution and laws of the State of Iowa.The Loan Agreement shall be substantially in the form attached to tins Resolution and is authorized to be executed and issued on behalf of the Issuer by the Mayor and attested by the City Clerk. Section 3.Authorization and Pui ose.There are hereby authorized to be issued, negotiable,serial,fully registered Revenue Notes of the City of Waukee,in the County of Dallas, State of Iowa,in the aggregate amount of $2,632,000,for the purpose of paying costs of refunding outstanding obligation of the City's Natural Gas Utility,including the Natural Gas Utility System Revenue Bonds,Series 2007. Section 4,Source of Pa ment.The Notes herein authorized and Parity Obligations and the interest thereon shall be payable solely and only out of the Net Revenues of the System and shall be a first lien on the future Net Revenues of the System.The Notes shall not be general obligations of the Issuer nor shall they be payable in any manner by taxation and the Issuer shall be in no manner liable by reason of the failure of the Net Revenues to be sufficient for the payment of the Notes. Section 5.Note Details.Natural Gas Utility Revenue Refunding Capital Loan Notes, Series 2015,of the City in the amount of $2,632,000,shall be issued to evidence the obligations of the Issuer under the Loan Agreement pursuant to the provisions of Sections 384.24A and 384.83 of the City Code of Iowa for the aforesaid purpose.The Notes shall be designated "$2,632,000 NATURAL GAS UTILITY REVENUE REI'UNDING CAPITAL LOAN NOTES, SERIES 2015",be dated March 18,2015,and bear interest from the date thereof,until payment thereof,at the office of the Paying Agent,such interest payable on December 1,2015,and semiannually thereafter on the 1st day of June and December in each year until maturity at the rates hereinafter provided. The Notes shall be executed by the manual or facsimile signature of the Mayor and attested by the manual or facsimile signature of the City Clerk,and impressed or printed with the seal of the City and shall be fully registered as to both principal and interest as provided in this Resolution;principal,interest and premium,if any,shall be payable at the office of the Paying Agent by mailing of a check to the registered owner of the Note.The Notes shall be in the denomination of $1,000 or multiples thereof.The Notes shall mature and bear interest as follows: Principal Alllount Illtel'est Rate Maturity June 1st $334,000 $358,000 $368,000 $377„000 $388,000 $398,000 $409,000 2.700% 2,700% 2.700% 2.700% 2.700% 2.700% 2.700% 2016 2017 2018 2019 2020 2021 2022 Section 6.~Redern tion.Notes may be called for redemption by the Issuer and paid before maturity at any time from any funds regardless of source,in whole or from time to time in part,in any order of maturity and within an annual maturity by lot.The terms of redemption shall be par,plus accrued interest to date of call. Thirty days'written notice of redemption shall be given to the registered owner of the Note.Failure to give such notice by mail to any registered owiier of the Notes or any defect therein shall not affect the validity of any proceedings for the redemption of the Notes.All Notes or portions thereof called for redemption will cease to bear interest after the specified redemption date,provided funds for their redemption are on deposit at the place of payment. If selection by lot witiiin a matLirity is required,the Registrar shall designate the Notes to be redeemed by random selection of the names of the registered owners of the entire annual maturity until the total amount of Notes to be called has been reached. Section 7.Re istration of Notes A ointment of Re istrar Transfer Ownershi Deliver and Cancellation. (a)R~eistration.The otanerslrlp of Notes may be traosfened only by tire malmtg of an entry upon the books kept for the registration and transfer of ownersiiip of the Notes, and in no other way.Bankers Trust Company is hereby appointed as Note Registrar under the terms of tliis Resolution and under the provisions of a separate agreement with the Issuer filed herewith winch is made a part hereof by this reference.Registrar shall maintain the books of the Issuer for the registration of ownership of the Notes for the payment of principal of and interest on the Notes as provided in this Resolution.All Notes shall be negotiable as provided in Article 8 of the Uniform Coriunercial Code subject to the provisions for registration and transfer contained in the Notes and in tliis Resolution. (b)Transfer.The ownership of any Note may be transferred only upon the Registration Books kept for the registration and transfer of Notes and only upon surrender thereof at the office of the Registrar together with an assigmnent duly executed by the holder or his duly authorized attorney in fact in such form as shall be satisfactory to the Registrar,along with the address and social security number or federal employer identification number of such transferee (or,if registration is to be made in the name of multiple individuals,of all such transferees).In the event that the address of the registered owner of a Note (other than a registered owner which is the nominee of the broker or dealer in question)is that of a broker or dealer,there must be disclosed on the Registration Books the information peitaining to the registered owner required above. Upon the transfer of any such Note,a new fully registered Note,of any denomination or denominations permitted by tliis Resolution in aggregate principal amount equal to the unmatured and unredeemed principal amount of such transfeiTed fully registered Note, and bearing interest at the same rate and maturing on the same date or dates shall be delivered by the Registrar. (c)Re istration of Transferred Notes.In all cases of the transfer of the Notes,the Registrar shall register,at the earliest practicable time,on the Registration Books,the Notes,in accordance with the provisions of this Resolution. fd)~ownershi .As to any Note,the person in whose name the ownersinp of the same shall be registered on the Registration Books of the Registrar shall be deemed and regarded as the absolute owner thereof for all purposes,and payment of or on account of the principal of any such Notes and the premium,if any,and interest thereon shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Note,including the interest thereon,to the extent of the sum or sums so paid. (e)Cancellation.All Notes which have been redeemed shall not be reissued but shall be cancelled by the Registrar.All Notes which are cancelled by the Registrar shall be destroyed and a Certificate of the destruction thereof shall be funushed promptly to the Issuer;provided that if the Issuer shall so direct,the Registrar shall forward the cancelled Notes to the Issuer. (I)Non-Presentment of Notes.In the event any payment check representing payment of principal of or interest on the Notes is returned to tbe Paying Agent or if any note is not presented for payment of principal at the maturity or redemption date,if funds sufficient to pay such principal of or interest on Notes shall have been made available to the Paying Agent for the benefit of the owner thereof,all liability of the Issuer to the owner thereof for such interest or payment of such Notes shall forthwith cease,terminate and be completely discharged,and thereupon it shall be the duty of the Paying Agent to hold such funds,without liability for interest thereon,for the benefit of the owner of such Notes who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Resolution or on,or with respect to,such interest or Notes.The Paying Agent's obligation to hold such funds shall continue for a period equal to two years and six months following the date on which such interest or principal became due,whether at maturity,or at the date fixed for redemption thereof,or otherwise,at which time the Paying Agent,shall surrender any remaining funds so held to the Issuer,whereupon any claim under this Resolution by the Owners of such interest or Notes of whatever nature shall be made upon the Issuer. (g)Re istration and Transfer Fees.The Registrar may furnish to each owner,at the Issuer's expense,one note for each annual maturity.The Registrar shall furnish additional Notes in lesser denominations (but not less than the miniinum denomination) to an owner who so requests. Section 8.Reissuance of Mutilated Destro ed Stolen or Lost Notes.In case any outstanding Note shall become mutilated or be destroyed,stolen or lost,the Issuer shall at the request of Registrar authenticate and deliver a new Note of like tenor and amount as the Note so mutilated,destroyed,stolen or lost,in exchange and substitution for such mutilated Note to Registrar,upon surrender of such mutilated Note,or in lieu of and substitution for the Note destroyed,stolen or lost,upon filing with the Registrar evidence satisfactory to the Registrar and Issuer that such Note has been destroyed,stolen or lost and proof of ownership thereof,and upon furnishing the Registrar and Issuer with satisfactory indeinizty and complying with such other reasonable regulations as the Issuer or its agent may prescribe and paying such expenses as the Issuer may incur in connection therewith. Section 9.Record Date.Payments of principal and interest,otherwise than upon full redemption,made in respect of any Notes,shall be made to the registered holder thereof or to their designated Agent as the same appear on the books of the Registrar on the 15th day of the month preceding the payment date.All such payments shall fully discharge the obligations of the Issuer in respect of such Notes to the extent of the payments so made.Payment of principal shall only be made upon surrender of the Notes to the Paying Agent. Section 10.Execution Authentication and Deliver of the Notes.Upon the adoption of this Resolution,the Mayor and Clerk shall execute and deliver the Notes to the Registrar,who shall authenticate the Notes and deliver the same to or upon order of the Original Purchaser.No Note shall be valid or obligatory for any purpose or shall be entitled to any right or benefit hereunder unless the Registrar shall duly endorse and execute on such Note a Certificate of Authentication substantially in the form of the Certificate herein set forth.Such Certificate upon any Note executed on behalf of the Issuer shall be conclusive evidence that the Note so authenticated has been duly issued under this Resolution and that the holder thereof is entitled to the benefits of this Resolution. No Notes shall be authenticated and delivered by the Registrar,unless and until there shall have been provided the following: A certified copy of the resolution of Issuer approving the execution of a Loan Agreement and a copy of the Loan Agreement; A written order of Issuer signed by the Treasurer directing the authentication and delivery of the Notes to or upon the order of the Original Purchaser upon payment of the purchase price as set forth therein; The approving opinion of Ahlers k,Cooney,P.C.,Bond Counsel,concerning the validity and legality of all the Notes proposed to be issued. Section 11.Ri ht to Name Substitute Pa in A ent or Re istrar.Issuer reserves the right to name a substitute,successor Registrar or Paying Agent upon giving prompt written notice to each registered Noteholder. Section 12.Form of Note.Notes shall be printed in substantial compliance with standards proposed by the American Standards Institute substantially in the form as follows: (2)(3)(4) (10) (Continued on the back of tins Note) (11)(12)(13)(14) FIGURE 1 Fl ont) (10) (Continued) FIGURE 2 (Back) The text of the Notes to be located thereon at the item numbers shown shall be as follows: Item 1,figure 1="STATE OF IOWA" "COUNTY OF DALLAS" "CITY OF WAUIME" "NATURAL GAS UTILITY REVENUE REFUNDING CAPITAL LOAN NOTE" "SERIES 2015" Item 2,figure 1 = Item 3,figure 1 = Item 4,figure 1 = Item 5,figure 1 = Itelll 6,flgul'e 1 = Item 7,figure 1 = Item 8,figure 1 = Rate: Maturity: Note Date:March 18,2015 CUSIP No.: "Registered" Note No. Principal Amount:5 Item 9,figure 1=The City of Waukee,State of Iowa,a municipal corporation organized and existing under and by virtue of the Constitution and laws of the State of Iowa (the "Issuer"),for value received,pronuses to pay from the source and as hereinafter provided,on the maturity date indicated above,to Item 9A,figure 1 =(Registration panel to be completed by Registrar or Printer with name of Registered Owner). Item 10,figure 1 =or registered assigns,the principal sum of THOUSAND DOLLARS in lawful money of the United States of America, ori the maturity date shown above,only upon presentation and surrender hereof at the office of Bankers Trust Company,Paying Agent of tins issue,or its successor,with interest on such sum from the date hereof until paid at the rate per annum specified above,payable on Deceinber 1, 2015,and semiannually thereafter on the 1st day of June and December in each year, Interest and principal shall be paid to the registered holder of the Note as shown on the records of ownership maintained by the Registrar as of the 15th day of the month preceding such interest payment date. This Note is issued pursuant to the provisions of Sections 384.24A and 384.83 of the City Code of Iowa,for the purpose of paying costs of refunding outstanding obligation of the City's Natural Gas Utility,including the Natural Gas Utility System Revenue Bonds,Series 2007,and in order to evidence the obligations of the Issuer under a certain Loan Agreement dated the date hereof,in conformity to a Resolution of the City Council of the City duly passed and approved. For a complete statement of the revenues and funds from wluch and the conditions under wluch tlus Note is payable,a statement of the conditions under which additional Notes or Bonds of equal standing may be issued,and the general covenants and provisions pursuant to which this Note is issued,reference is made to the above described Loan Agreement and Resolution. Notes may be called for redemption by the Issuer and paid before maturity at any time from any funds regardless of source,in whole or from time to time in past,in any order of maturity and witlnn an annual maturity by lot.The terms of redemption shall be par,plus accrued interest to date of call. Thuty days'written.notice of redemption shall be given to the registered owner of the Note.Failure to give such notice by mail to any registered owner of the Notes or any defect therein shall not affect the validity of any proceedings for the redemption of the Notes.All notes or portions thereof called for redemption will cease to bear interest after the specified redemption date,provided funds for their redemption.are on deposit at the place of payment. If selection by lot within a maturity is required,the Registrar shall designate the notes to be redeemed by random selection of the names of the registered owners of the entire annual maturity until the total amount of notes to be called has been reached. Ownership of this Note may be transferred only by transfer upon the books kept for such purpose by Bankers Trust Company,the Registrar,Such transfer on the books shall occur only upon presentation and surrender of tins Note at the office of the Registrar as designated below, together with an assiginnent duly executed by the owner hereof or lns duly authorized attorney in the form as shall be satisfactory to the Registrar.Issuer reserves the right to substitute the Registrar and Paying Agent but shall,however,promptly give notice to registered Noteholders of such change.All Notes shall be negotiable as provided in Aiticle 8 of the Uniform Comnercial Code and subject to the provisions for registration and transfer contained in the Note Resolution. This Note and the series of winch it forms a part and any Additional Obligations which may be hereafter issued and outstanding &om time to time on a parity with the Notes,as provided in the Note Resolution and Loan Agreement of which notice is hereby given and which are hereby made a pail hereof,are payable fiom and secured by a pledge of the Net Revenues of the Natural Gas Utility (the "System"),as defined and provided in the Resolution.There has heretofore been established and the City covenants and agrees that it will maintain just and equitable rates or charges for the use of and service rendered by the System in each year for the payment of the proper and reasonable expenses of operation and maintenance of the System and for the establislnnent of a sufficient sinking fund to meet the principal of and interest on this series of Notes,and other Obligations ranking on a parity therewith,as the same become due. This Note is not payable in any manner by taxation and under no circumstances shall the City be in any mailer liable by reason of the failure of the Net Revenues to be sufficient for the payment hereof. And it is hereby represented and certified that all acts,conditions and things requisite, according to the laws and Constitution of the State of Iowa,to exist,to be had,to be done,or to be performed precedent to the lawful issue of this Note,have been existent,had,done and performed as required by law. IN TESTIMONY WHEREOF,the City by its City Council has caused tins Note to be signed by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signahue of its Clerk,with the seal of the City printed or impressed hereon,and authenticated by the manual signature of an authorized representative of the Registrar,Bankers Trust Company, Des Moines,Iowa. Item 11,figure 1 =Date of Authentication:,2015 Item 12,figure 1 =Tliis is one of the Notes described in the within mentioned Resolution,as registered by Bankers Trust Company BANKERS TRUST COMPANY,Registrar By: Authorized Signahire Item 13,figure 1 =Registrar and Transfer Agent: Paying Agent: Bankers Trust Company Bankers Trust Company SEE REVERSE FOR CERTAIN DEFINITIONS Item 14,figure 1 =(Seal) Item 15,figure 1 =(Signature Block) CITY OF WAUIME,STATE OF IOWA Mayor ATTEST: (manual or facsimile signature) City Clerk (manual or facsimile signature) Item 17,figure 1 =(Assignment Block) (Information Required for Registration) ASSIGNMENT For value received,the undersigned hereby sells,assigns and transfers unto witlun Note and does hereby irrevocably constitute and appoint attorney in fact to transfer the said Note on the books kept for registration of the within Note, with full power of substitution in the premises. the Dated this day of ,2015. SIGNATURE GUARANTEED (Person(s)executing this Assignment sign(s) here) IMPORTANT —READ CAREFULLY The signature(s)to tins Power must correspond with the name(s)as written upon the face of the Certificate(s)or Note(s)in every particular without alteration or enlargement or any change whatever.Signature guarantee must be provided in accordance with the prevailing standards and procedures of the Registrar and Transfer Agent.Such standards and procedures may require signature to be guaranteed by certain eligible guarantor institutions that participate in a recognized signature guarantee program. INFORMATION REQUIRED FOR REGISTRATION OF TRANSFER Name of Transferee(s) Address of Transferee(s) Social Security or Tax Identification Number of Transferee(s) Transferee is a(n): Individual* P artnerslup Corporation Trust If the Note is to be registered in the names of multiple individual owners,the names of all such owners and one address and social security number must be provided. The following abbreviations,when used in the inscription on the face of this Note,shall be construed as though written out in full according to applicable laws or regulations: TEN COM -as tenants in common TEN ENT —as tenants by the entireties JT TEN —as joint tenants with rights of survivorship and not as tenants in common IA UNIF TRANS MIN ACT -..........Custodian .......... (Cust)(Minor) Under Iowa Uniform Transfers to Minors Act....... (State) ADDITIONAL ABBREVIATIONS MAY ALSO BE USED THOUGH NOT IN THE ABOVE LIST f i .h Notes and Parity Obligations shall be secured equally and ratably by the Net Revenues of the System.without priority by reason of number or.time of sale or delivery;and the revenues of the System are hereby iirevocabiy pledged to the timely payment of botb principal and interest as the same become due. Section 14.A lication of Note Proceeds —Redem tion and Current Refundin of Refunded Bonds,Proceeds of the Notes shall be applied as follows: $2,574,985 of proceeds shall be deposited in trust with the Treasurer along with $535,015 of released reserve funds from the Refunded Bonds for the payment of the Refunded Bonds on June 1,2015,and is irrevocably appropriated exclusively to the payment of principal of,interest on and premium,if any,due on the redemption thereof.Said amount shall be held separately from all other moneys or accounts,in cash or direct obligations of the United States,maturing on or before the Call Date of the Refunded Bonds,and is determined to be sufficient to retire on the designated Call Date all of such obligations,together with the interest thereon to the designated redemption date and premium thereon,if any,that may be payable on the redemption of the same. +The remaining proceeds shall be held by the Treasurer and applied to pay the costs of issuance of the Notes. The Refiuided Bonds are called and shall be redeemed as of the Call Date.The Clerk is hereby authorized and directed to cause notice of such redemption to be given in compliance with the terms of the Refunded Bonds. Any excess proceeds remaining on hand after completion of the purpose of issuance shall be paid into the Improvement Fund to the maximum required amounts and any remaining amounts shall be used to call or otherwise retire Notes. Section 15.User Rates.There has heretofore been.established and published as required by law,just and equitable rates or charges for the use of the service rendered by the System.The rates or charges shall be paid by the owner of each and every lot,parcel of real estate,or building that is connected with and uses the System,by or through any part of the System or that in any way uses or is served by the System.So long as the Notes are outstanding and unpaid the rates or charges to consumers of services of the System shall be sufficient in each year for the payment of the proper and reasonable expenses of operation and maintenance of the System and for the payment of principal and interest on the Notes and Parity Notes and obligations as the same fall due,and to provide for the creation of reserves as hereinafter provided. Any revenues paid and collected for the use of the System and its services by the Issuer or any department,agency or instrumentality of the Issuer shall be used and accounted for in the same manner as any other revenues derived fiom the operations of the System. Section 16.A lication of Revenues.So long as the Notes or Parity Obligations remain outstanding and unpaid the same are discharged and satisfied in the manner provided in tins Resolution,the entire income and revenues of the system shall be deposited and collected in a fund to be known as the Revenue Fund,and shall be disbursed only as follows: (a)0 eration and Maintenance Fund.Money in the Revenue Fund shall first be disbursed to make deposits into a separate and special fund to pay current expenses. The fund shall be known as the Natural Gas Utility Revenue Operation and Maintenance Fund (the "Operation and Maintenance Fund").There shall be deposited in the Operation and Maintenance Fund each month an amount sufficient to meet the current expenses of the month plus an amount equal to I/12th of expenses payable on an annual basis such as insurance.After the first day of the month,fisher deposits may be made to tins account from the Revenue Fund to the extent necessary to pay current expenses accrued and payable to the extent that funds are not available in the Surplus Fund. {b) ''««.„'»*kf».Sb» make deposits into a separate and special fund to pay the principal and interest requirements of the Fiscal Year on the Notes and Parity Obligations.The fund shall be known as the Natural Gas Utility Revenue Note and Interest Sinking Fund (the "Sinking Fund").The required amount to be deposited in the Sining Fund in any month shall be the equal monthly amount necessary to pay in full the installment of interest coming due on the next interest payment date on the then outstanding Notes and Parity Obligations, plus the equal monthly amount necessary to pay in full the installment of principal coming due on such Notes on the next succeeding piincipal payment date until the full amount of such installment is on hand.If for any reason the amount on hand in the Sinking Fund exceeds the required amount,the excess shall forthwith be withdrawn and paid into the Revenue Fund.Money in the Sinking Fund shall be used solely for the purpose of paying principal of and interest on the Notes and Parity Obligations as the same shall become due and payable. (c)No Reserve Fund is required or shall be maintained for the Notes. However,should a future issue of Parity Obligation require such,nothing in this Resolution prohibits the future establislunent of a Reserve securing only future Parity Obligations. (d)Subordinate Obli ations.Money in the Revenue Fund may next be used to pay principal of and interest on (including reasonable reserves therefor)any other obligations wliich by their terms shall be payable from the revenues of the System,but subordinate to the Notes and Parity Obligations,and which have been issued for the purposes of extensions and improvements to the System or to retire the Notes or Parity Obligations in advance of maturity,or to pay for extraordinary repairs or replacements to the System. ft '''»Pd the close of each month may be deposited in any of the funds created by this Resolution, to pay for extraordinary repairs or replacements to the System,or may be used to pay or redeem the Notes or Parity Obligations,any of them,or for any lawful purpose. Money in the Revenue Fund shall be allotted and paid into the various funds and accounts hereinbefore referred to in the order in wliich the funds are listed,on a cuni &lative basis on the 10th day of each month,or on the next succeeding business day when the 10th shall not be a business day;and if in any month the money in the Revenue Fund shall be insufficient to deposit or transfer the required amount in any of the funds or accounts,the deficiency shall be made up in the following month or months after payments into all funds and accounts enjoying a prior claim to the revenues shall have been met in full.The provisions of tbis Section shall not be construed to require the Issuer to maintain separate bank accounts for the funds created by tlus Section;except the Siiiking Fund and the Reserve Fund shall be maintained in a separate account but may be invested in conjunction with other Binds of the City but designated as a trust fund on the books and records of the City. Section 17.Investments.All of the funds provided by tlus Resolution may be invested only in Permitted Investments or deposited in financial institutions which are members of the Federal Deposit Insurance Corporation or its equivalent successor,and the deposits in winch are insured thereby and all such deposits exceeding the maximum amount insured from time to tune by FDIC or its equivalent successor in any one financial institution shall be continuously secured in compliance with Chapter 12C of the Code of Iowa,2015,as amended,or otherwise by a valid pledge of direct obligations of the United States Government having an equivalent market value. All such interim investments shall mature before the date on which the moneys are required for the purposes for which the fund was created or otherwise as herein provided but in no event maturing in more than three years in th.e case of the Reserve Fund. All income derived from such investments shall be deposited in the Revenue Fund and shall be regarded as revenues of the System.Investments shall at any time necessary be liquidated and the proceeds thereof applied to the purpose for which the respective fund was created. Section 18.Covenants Re ardin the 0 eration of the S stem.The Issuer hereby covenants and agrees with each and every holder of the Notes and Parity Obligations: (a)Maintenance and Ffficienc .The Issuer will maintain the System in good condition and operate it in an efficient manner and at reasonable cost. (b)Sufficienc of Rates.On or before the beginning of each Fiscal Year the Governing Body will adopt or continue in effect rates for all services rendered by the System determined to be sufficient to produce Net Revenues for the next succeeding Fiscal Year adequate to pay principal and interest requirements and create reserves as provided in this Resolution but not less than 125 percent of the principal and interest requirements of the Fiscal Year.No free use of the System by the Issuer or any department,agency or instrumentality of the Issuer shall be permitted except upon the determination of the Governing Body that the rates and charges otherwise in effect are sufficient to provide Net Revenues at least equal to the requirements of tliis subsection. (c)Insurance.That the Issuer shall maintain insurance for the benefit of the Noteholders on the insurable portions of the System of a kind and in an amount which normally would be carried by private companies engaged in a similar kind of business, The proceeds of any insurance,except public liability insurance,shall be used to repair or replace the part or parts of the System damaged or destroyed,or if not so used shall be placed in the Improvement Fund. (d)Accountin and Audits.The Issuer will cause to be kept proper books and accounts adapted to the System and in accordance with generally accepted accounting practices,and will diligently act to cause the books and accounts to be audited annually and reported upon not later than 180 days after the end of each Fiscal Year by an Independent Auditor and will provide copies of the audit report to the holders of any of the Notes and Parity Obligations upon request.The holders of any of the Notes and Parity Obligations shall have at all reasonable times the right to inspect the System and the records,accounts and data of the Issuer relating thereto. {e)State Laws.The Issuer will faithfully and punctually perform all duties with reference to the System required by the Constitution and laws of the State of Iowa, including the making and collecting of reasonable and sufficient rates for services rendered by the System as above provided,and will scgrcgatc thc rcvcnucs of thc System and apply the revenues to the funds specified in this Resolution. tTl ~Pro ert .The lssner will not sell,lease,mortgage or in any mararer dispose of the System,or any capital pait thereof,including any and all extensions and additions that may be made thereto,until satisfaction and discharge of all of the Notes and Parity Obligations shall have been provided for in the manner provided in tliis Resolution;provided,however,that this covenant shall not be construed to prevent the disposal by the Issuer of property wliich in the judgment of its Governing Body has become inexpedient or unprofitable to use in connection with the System,or if it is to the advantage of the System that other property of equal or liigher value be substituted therefor,and provided further that the proceeds of the disposition of such property shall be placed in a revolving fund to be used in preference to other sources for capital improvements to the System.Any such proceeds of the disposition of propeity acquired with the proceeds of the Notes or Parity Obligations shall not be used to pay principal or interest on the Notes or Parity Obligations or for payments into the Sinking or Reserve Fund. ad 1 v amounts which normally would be carried by private companies engaged in a similar kind of business on each officer or employee having custody of funds of the System. {h)Additional Char es.The Issuer will require proper connecting charges and/or other security for the payment of service charges. (I)B~ud et.The Governing Body of the Issuer shall approve and conduct operations pursuant to a system budget of revenues and current expenses for each Fiscal Year.Such budget shall take into account revenues and current expenses during tbe current and last preceding Fiscal Year.Copies of such budget and any amendments thereto shall be provided to the holders of any of the Notes upon request. Section 19.Remedies of Noteholders.Except as herein expressly limited the holder or holders of the Notes and Parity Obligations shall have and possess all the rights of action and remedies afforded by the common law,the Constitution and statutes of the State of Iowa,and of the United States of America,for the enforcement of payment of their Notes and interest thereon, and of the pledge of the revenues made hereunder,and of all covenants of the Issuer hereunder. Section20.Prior LienandPari Obli ations.TheIssuer will issueno othernotes, bonds or obligations of any kind or nature payable from or enjoying a lien or claim on the property or revenues of the System having priority over the Notes or Parity Obligations. Additional Obligations may be issued on a parity and equality of rank with the Notes with respect to the lien and claim of such Additional Obligations to the revenues of the System and the money on deposit in the funds adopted by this Resolution,for the following purposes and under the following conditions,but not otherwise: (a)For the purpose of refunding any of the Notes or Parity Obligations which shall have matured or which shall mature not later than tiuee months after the date of delivery of such refunding obligation and for the payment of wluch there shall be insufficient money in the SiiWng Fund and the Reserve Fund; (b)For the purpose of refunding any outstanding Notes,Parity Obligations or general obligation notes or making extensions,additions,improvements or replacements to the System,if all of the following conditions shall have been met: (i)before any such Additional Obligations ranlang on a parity are issued,there will have been procured and filed with the City Clerk,a statement of an Independent Auditor,independent financial consultant or consulting engineer,not a regular employee of the Issuer,reciting the opinion based upon necessary investigations that the Net Revenues of the System for the preceding Fiscal Year (with adjustments as hereinafter provided)were equal to at least 1.25 times the maximum amount that will be required in any Fiscal Year prior to the longest maturity of any of the Notes or Parity Obligations for both principal of and interest on all Notes and Parity Obligations then outstanding wluch are payable from the net earnings of the System and the Additional Obligations then proposed to be issued. For the purpose of determining the Net Revenues of the System for the preceding Fiscal Year as aforesaid,the amount of the gross revenues for such year may be adjusted by an Independent Auditor,independent financial consultant or consulting engineer,not a regular employee of the Issuer,so as to reflect any changes in the amount of such revenues wluch would have resulted had any revision of the schedule of rates or charges imposed at or prior to the time of the issuance of any such Additional Obligations been in effect during all of such preceding Fiscal Year. (ii)the Additional Obligations niust be payable as to principal and as to interest on the same month and day as the Notes herein authorized. (iii)for the purposes of this Section,principal and interest falling due on the first day of a Fiscal Year shall be deemed a requirement of the innnediately preceding Fiscal Year. (iv)for the purposes of this Section,general obligation bonds or notes shall be refunded only upon a finding of necessity by the Governing Body and only to the extent the general obligation bonds or notes were issued or the proceeds thereof were expended for the System. (v)for purposes of this Section,"preceding Fiscal Year"shall be the most recently completed Fiscal Year for which audited financial statements prepared by a certified public accountant are issued and available,but in no event a Fiscal Year which ended more tban eighteen months prior to the date of issuance of Additional Obligations, Section 21.Dis osition of Proceeds'Arbitra e Not Permitted.The Issuer reasonably expects and covenants that no use will be made of the proceeds from the issuance and sale of the Notes issued hereunder winch will cause any of the Notes to be classified as arbitrage bonds witlun the meaning of Section 148(a)and (b)of the Internal Revenue Code of the United States, and that throughout the term of the Notes it will comply with the requirements of such statute and regulations issued thereunder. To the best lmowledge and belief of the Issuer,there are no facts or circumstances that would materially change the foregoing statements or the conclusion that it is not expected that the proceeds of the Notes will be used in a manner that would cause the Notes to be arbitrage notes.Without limiting the generality of the foregoing,the Issuer hereby agrees to comply with the provisions of the Tax Exemption Certificate and the provisions of the Tax Exemption Certificate are hereby incorporated by reference as part of tins Resolution.The Treasurer is hereby directed to make and insert all calculations and determinations necessary to complete the Tax Exemption Certificate in all respects and to execute and deliver the Tax Exemption Certificate at issuance of the Notes to certify as to the reasonable expectations and covenants of the Issuer at that date, The Issuer covenants that it will treat as Yield Restricted any proceeds of the Notes remaining unexpended after tliree years from the issuance and any other funds required by the Tax Exemption Certificate to be so treated.If any investments are held with respect to the Notes and Parity Obligations,the Issuer shall treat the same for the purpose of restricted yield as held in proportion to the original principal amounts of each issue. The Issuer covenants that it will exceed any investment yield restriction provided in tliis Resolution only in the event that it shall first obtain an opinion of recognized bond counsel that the proposed investment action will not cause the Notes to be classified as arbitrage bonds under Section 148(a)and (b)the Internal Revenue Code or regulations issued thereunder. The Issuer covenants that it will proceed with due diligence to spend the proceeds of the Notes for the purpose set forth in this Resolution.The Issuer further covenants that it will make no change in the use of the proceeds available for the construction of facilities or change in the use of any portion of the facilities constructed therefrom by persons other than the Issuer or the general public unless it has obtained an opinion of bond counsel or a revenue ruling that the proposed project or use will not be of such character as to cause interest on any of the Notes not to be exempt from federal income taxes in the hands of holders other than substantial users of the project,under the provisions of Section 142(a)of the Internal Revenue Code of the United States„related statutes and regulations. Section 22.Additional Covenants Re resentations and Warranties of the Issuer.The Issuer certifies and covenants with the purchasers and holders of the Notes from time to time outstanding that the Issuer tlirough its officers,(a)will make such fiirther specific covenants, representations and assurances as may be necessary or advisable;(b)comply with all representations,covenants and assurances contained in the Tax Exemption Certificate,wluch Tax Exemption Certificate shall constitute a part of the contract between the Issuer and the owners of the Notes;(c)consult with bond counsel (as defined in the Tax Exemption Certificate);(d)pay to the United States,as necessary,such sums of money representing required rebates of excess arbitrage profits relating to the Notes;{e)file such forms,statements and supporting documents as may be required and in a timely manner;and (f)if deemed necessary or advisable by its officers,to employ and pay fiscal agents,financial advisors,attorneys and otlier persons to assist the Issuer in such compliance. Section 23.Dischar e and Satisfaction of Notes.The covenants,liens and pledges entered into,created or imposed pursuant to this Resolution may be fully discharged and satisfied with respect to the Notes and Parity Obligations,or any of them,in any one or more of the following ways: (a)By paying the Notes or Parity Obligations when the same shall become due and payable;and (b)By depositing in trust with the Treasurer,or with a corporate trustee designated by the Governing Body for the payment of the obligations and irrevocably appropriated exclusively to that purpose an amount in cash or direct obligations of the United States the maturities and income of which shall be sufficient to retire at maturity,or by redemption prior to maturity on a designated date upon winch the obligations may be redeemed,all of such obligations outstanding at the time,together with the interest thereon to maturity or to the designated redemption date,premiums thereon,if any,that may be payable on the redemption of the same;provided that proper notice of redemption of all such obligations to be redeemed shall have been previously published or provisions shall have been made for such publication. Upon such payment or deposit of money or securities,or both,in the amount and manner provided by this Section,all liability of the Issuer with respect to the Notes or Parity Obligations shall cease,determine and be completely discharged,and the holders thereof shall be entitled only to payment out of the money or securities so deposited. Section 24.Resolution a Contract.The provisions of this Resolution shall constitute a contract between the Issuer and the holder or holders of the Notes and Parity Obligations,and after the issuance of any of the Notes no change,variation or alteration of any kind in the provisions of ties Resolution shall be made in any manner„except as provided in the next succeeding Section,until such time as all of the Notes and Parity Obligations,and interest due thereon,shall have been satisfied and discharged as provided in tins Resolution. Section 25.Amendment of Resolution Without Consent.The Issuer may,without the consent of or notice to any of the holders of the Notes and Parity Obligations,amend or supplement this Resolution for any one or more of the following purposes: (a)to cure any ambiguity,defect,omission or inconsistent provision in this Resolution or in the Notes or Parity Obligations;or to comply with any application provision of law or regulation of federal or state agencies;provided,however,that such action shall not materially adversely affect the interests of the holders of the Notes or Parity Obligations; (b)to change the terms or provisions of this Resolution to the extent necessary to prevent the interest on the Notes or Parity Obligations fi om being includable within the gross income of the holders thereof for federal income tax purposes; (c)to grant to or confer upon the holders of the Notes or Parity Obligations any additional rights,remedies,powers or authority that may lawfully be granted to or conferred upon the holders of the Notes; (d)to add to the covenants and agreements of the Issuer contained in this Resolution other covenants and agreements of,or conditions or restrictions upon,the Issuer or to surrender or eliminate any right or power reserved to or conferred upon the Issuer in this Resolution;or (e)to subject to the lien and pledge of this Resolution additional pledged revenues as may be permitted by law. Section 26.Amendment of Resolution Re uirin Consent.This Resolution may be amended from time to time if such amendment shall have been consented to by holders of not less than two-thirds in principal amount of the Notes and Parity Obligations at any time outstanding (not including in any case any Notes which may then be held or owned by or for the account of the Issuer,but including such refunding obligations as may have been issued for the purpose of refunding any of such Notes if such refunding obligations shall not then be owned by the Issuer);but this Resolution may not be so amended in such manner as to: (a)Make any change in the maturity of interest rate of the Notes,or modify the terms of payment of principal of or interest on the Notes or any of them or impose any conditions with respect to such payment; (b)Materially affect the rights of the holders of less than all of the Notes and Parity Obligations then outstanding;and (c)Reduce the percentage of the principal amount of Notes,the consent of the holders of winch is required to effect a further amendment. Whenever the Issuer shall propose to amend this Resolution under the provisions of this Section,it shall cause notice of the proposed amendment to be filed with the Original Purchaser and to be mailed by certified mail to each registered owner of any Note as shown by the records of the Registrar.Such notice shall set forth the nature of the proposed amendment and shall state that a copy of the proposed amendatory Resolution is on file in the office of the City Clerk. Whenever at any time witlun one year from the date of the mailing of the notice there shall be filed with the City Clerk an instrument or instruments executed by the holders of at least two-thirds in aggregate principal amount of the Notes then outstanding as in this Section defined, which instrument or instruments shall refer to the proposed amendatory Resolution described in the notice and shall specifically consent to and approve the adoption thereof,thereupon,but not otherwise,the Governing Body of the Issuer may adopt such amendatory Resolution and such Resolution shall become effective and binding upon the holders of all of the Notes and Parity Obligations. Any consent given by the holder of a Note pursuant to the provisions of this Section shall be irrevocable for a period of six months from the date of the instrument evidencing such consent and shall be conclusive and binding upon all future holders of the same Note during such period. Such consent may be revoked at any time after six months from the date of such instrument by the holder who gave such consent or by a successor in title by filing notice of such revocation with the City Clerk. The fact and date of the execution of any instrument under the provisions of this Section may be proved by the certificate of any officer in any jurisdiction who by the laws thereof is authorized to take aclalowledgments of deeds within such jurisdiction that the person signing such instrument acknowledged before him the execution thereof,or may be proved by an affidavit of a witness to such execution sworn to before such officer. The amount and numbers of the Notes held by any person executing such instrument and the date of lus holding the same may be proved by an affidavit by such person or by a ceitificate executed by an officer of a bank or trust company showing that on the date therein mentioned such person had on deposit with such bank or trust company the Notes described in such certificate. Section 27.Severability.If any section,paragraph,or provision of this Resolution shall be held to be invalid or unenforceable for any reason,the invalidity or unenforceability of such section,paragraph or provision shall not affect any of the remaining provisioris, Section 28.Re eal of Conflictin Ordinances or Resolutions and Effective Date.All other ordinances,resolutions and orders,or parts thereof,in conflict with the provisions of this Resolution are,to the extent of such conflict,hereby repealed;and this Resolution shall be in effect fiom and after its adoption. ADOPTED AND APPROVED tlus 2"day of March,2015. ayol ATTEST: City Clerk ROLL CALL VOTE Shane Blanchard Brian Harrison Casey L,Harvey Shelly Hughes Rick Peterson AYE X X X X X ABSENT ABSTAIN