HomeMy WebLinkAbout2021-02-16-H04B GO Lease-Purchase for Golf Course Rough Mower_Receipt-File TECAGENDA ITEM:
CITY OF WAUKEE, IOWA
CITY COUNCIL MEETING COMMUNICATION
MEETING DATE: February 16, 2021
AGENDA ITEM:Consideration of approval of a motion that the form of Tax Exemption
Certificate be placed on file and approved
FORMAT:Motion
SYNOPSIS INCLUDING PRO & CON:
FISCAL IMPACT INCLUDING COST/BENEFIT ANALYSIS:$47,750
COMMISSION/BOARD/COMMITTEE COMMENT:
STAFF REVIEW AND COMMENT:
RECOMMENDATION: Approve the motion.
ATTACHMENTS: I. Tax Exemption Certificate
PREPARED BY:Becky Schuett
REVIEWED BY:
PUBLIC NOTICE INFORMATION –
NAME OF PUBLICATION:
DATE OF PUBLICATION:
H4B
TAX EXEMPTION CERTIFICATE
of
CITY OF WAUKEE, COUNTY OF DALLAS, STATE OF IOWA, ISSUER
$47,750 General Obligation Lease Purchase Agreement (Golf Course Equipment)
This instrument was prepared by:
Ahlers & Cooney, P.C.
100 Court Avenue, Suite 600
Des Moines, Iowa 50309
(515) 243-7611
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TABLE OF CONTENTS
This Table of Contents is not a part of this Tax Exemption Certificate and is provided only for
convenience of reference.
INTRODUCTION 1
ARTICLE I DEFINITIONS ..................................................................................................1
ARTICLE II SPECIFIC CERTIFICATIONS, REPRESENTATIONS AND
AGREEMENTS ...............................................................................................4
Section 2.1 Authority to Certify and Expectations ............................................................. 4
Section 2.2 Proceeds ........................................................................................................... 5
Section 2.3 Receipts and Expenditures ............................................................................... 5
Section 2.6 Facts Supporting Temporary Periods for Proceeds ......................................... 5
Section 2.7 Resolution Funds at Restricted or Unrestricted Yield ..................................... 6
Section 2.8 Pertaining to Yields ......................................................................................... 6
Section 2.9 Further Certifications ....................................................................................... 6
ARTICLE III REBATE ...........................................................................................................7
Section 3.1 Records ............................................................................................................ 7
Section 3.2 Rebate Fund ..................................................................................................... 8
Section 3.3 Exceptions to Rebate ....................................................................................... 8
Section 3.4 Calculation of Rebate Amount ........................................................................ 8
Section 3.5 Rebate Requirements and the Bond Fund ....................................................... 9
Section 3.6 Investment of the Rebate Fund ........................................................................ 9
Section 3.7 Payment to the United States ........................................................................... 9
Section 3.8 Records ............................................................................................................ 9
Section 3.9 Additional Payments ...................................................................................... 10
ARTICLE IV INVESTMENT RESTRICTIONS ..................................................................10
Section 4.1 Avoidance of Prohibited Payments ............................................................... 10
Section 4.2 Market Price Requirement ............................................................................. 11
Section 4.3 Investment in Certificates of Deposit ............................................................ 11
Section 4.4 Investment Pursuant to Investment Contracts and Agreements .................... 11
Section 4.5 Records .......................................................................................................... 12
Section 4.6 Investments to be Legal ................................................................................. 12
ARTICLE V GENERAL COVENANTS .............................................................................12
ARTICLE VI AMENDMENTS AND ADDITIONAL AGREEMENTS .............................12
Section 6.1 Opinion of Bond Counsel; Amendments ....................................................... 12
Section 6.2 Additional Covenants, Agreements ............................................................... 12
Section 6.3 Amendments .................................................................................................. 13
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TAX EXEMPTION CERTIFICATE
CITY OF WAUKEE, STATE OF IOWA
THIS TAX EXEMPTION CERTIFICATE is made and entered into on
_________________, 2021, by the City of Waukee, State of Iowa (the "Issuer").
INTRODUCTION
This Certificate is executed and delivered in connection with the issuance of a General
Obligation Lease Purchase Agreement, securing the Master Lease and related schedule, in the
aggregate principal amount of $47,750 (the "Lease "), by and between the Issuer and VGM
Financial Services (the "Lessor"). The Lease is entered into pursuant to the provisions of the
Resolution of the Issuer authorizing the execution and delivery of the Lease. Such Resolution
provides that the covenants contained in this Certificate constitute a part of the Issuer's contract
with the owners of the Lease.
The Issuer recognizes that under the Code (as defined below) the tax-exempt status of the
interest received by the owners of the Lease is dependent upon, among other things, the facts,
circumstances, and reasonable expectations of the Issuer as to future facts not in existence at this
time, as well as the observance of certain covenants in the future. The Issuer covenants that it
will take such action with respect to the Lease as may be required by the Code, and pertinent
legal regulations issued thereunder in order to establish and maintain the tax-exempt status of the
Lease, including the observance of all specific covenants contained in the Resolution and this
Certificate.
ARTICLE I
DEFINITIONS
The terms defined in the Resolution shall retain the meanings set forth therein when used
in this Certificate unless the context clearly indicates another meaning is intended. The following
terms as used in this Certificate shall have the meanings set forth below. Other terms used in this
Certificate shall have the meanings set forth in the Code or in the Regulations unless the context
clearly indicates another meaning is intended.
"Annual Debt Service" means the principal of and interest on the Lease scheduled to be
paid during a given Bond Year.
"Available Earnings" means those amounts of earnings on all funds discussed herein
either not deposited into the Rebate Fund or deposited into and then withdrawn from the Rebate
Fund for any purpose other than payment to the United States.
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"Bond Counsel" means Ahlers & Cooney, P.C., Des Moines, Iowa, or an attorney at law
or a firm of attorneys of nationally recognized standing in matters pertaining to the tax-exempt
status of interest on obligations issued by states and their political subdivisions, duly admitted to
the practice of law before the highest court of any State of the United States of America.
"Bond Year" means a one-year period beginning on the day after expiration of the
preceding Bond Year. The first Bond Year shall be the one-year or shorter period beginning on
the Closing Date and ending on a principal or interest payment date.
"Bond Yield" means that discount rate which produces an amount equal to the Issue Price
of the Lease when used in computing the present value of all payments of principal and interest
to be paid on the Lease, using semiannual compounding on a 360-day year as computed under
Regulation 1.148-4.
"Certificate" means this Tax Exemption Certificate.
"Closing" means the delivery of the Lease in exchange for the agreed upon purchase
price.
"Closing Date" means the date of Closing.
"Code" means the Internal Revenue Code of 1986, as amended, and any statutes which
replace or supplement the Internal Revenue Code of 1986.
"Computation Period" means each five-year period from the Closing Date through the
last day of the fifth and each succeeding fifth Bond Year.
"Excess Earnings" means the amount earned on all Nonpurpose Investments minus the
amount which would have been earned if such Nonpurpose Investments were invested at a rate
equal to the Bond Yield, plus any income attributable to such excess.
"Final Bond Retirement Date" means the date on which the Lease is actually paid in full.
"Governmental Obligations" means direct general obligations of, or obligations the
timely payment of the principal of and interest on which is unconditionally guaranteed by the
United States.
"Gross Proceeds", as defined in Regulation 1.148-1(b), means any Proceeds of the Lease
and any Replacement Proceeds (as defined in Regulation 1.148-1(c).
"Gross Proceeds Funds" means the Project Fund and any other fund or account held for
the benefit of the owners of the Lease or containing Gross Proceeds of the Lease except the
Rebate Fund.
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"Issue Price", as defined in Regulation 1.148-1(b), means the initial offering price of the
Lease to the public (not including bond houses, brokers or similar persons or organizations
acting in the capacity of underwriters or wholesalers) at which price a substantial amount of the
Lease was sold. The Lessor has certified the Lease will be held in Lessor's account, not re-sold
to the public.
"Issuer" means the City of Waukee, State of Iowa.
"Lease" means the Lease Purchase Agreement dated as of the date of closing, in the
aggregate principal amount of $46,400, by and between the Issuer and the Lessor, authorized
pursuant to the Resolution.
"Lessor" means VGM Financial Services of Waterloo, Iowa, in its capacity as Lessor
under the Lease.
"Minor Portion of the Lease", as defined in Regulation 1.148-2(g), means the lesser of
five (5) percent of Proceeds or $100,000. The Minor Portion of the Lease is computed to be
$2,367.50.
"Nonpurpose Investments" means any investment property which is acquired with Gross
Proceeds and is not acquired to carry out the governmental purpose of the Lease, and may
include but is not limited to U.S. Treasury bonds, corporate bonds, or certificates of deposit.
"Proceeds" as defined in Regulation 1.148-1(b), means the amount of proceeds of the
Lease calculated in Section 2.2 of this Certificate and shall include Sale Proceeds, investment
proceeds and transferred proceeds as those terms are defined in the Regulations.
"Project" shall mean the acquisition of equipment for the City’s golf course enterprise, as
described in the Resolution.
"Project Fund" means the Fund established pursuant to the Resolution.
"Regulations" means the Income Tax Regulations, amendments and successor provisions
promulgated by the Department of the Treasury under Sections 103, 148 and 149 of the Code, or
other Sections of the Code relating to "arbitrage bonds", including without limitation Regulations
1.148-1 through 1.148-11, 1.149(b)-1, 1.149-d(11), 1.150-1 and 1.150-2.
"Resolution" means the resolution of the Issuer adopted on March 7, 2016 authorizing the
Lease.
"Sale Proceeds", as defined in Regulation 1.148-1(b), means any amounts actually or
constructively received from the sale of the Lease, including amounts used to pay underwriter's
discount or compensation and accrued interest other than pre-issuance accrued interest as
calculated in Section 2.2 of this Certificate.
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"Tax Exempt Obligations" means bonds or other obligations the interest on which is
excludable from the gross income of the owners thereof under Section 103 of the Code.
"Tax Exemption Certificate" means this Certificate.
"Taxable Obligations" means all investment property, obligations or securities other than
Tax Exempt Obligations.
"Verification Certificate" means the certificate attached to this Certificate as Exhibit A.
ARTICLE II
SPECIFIC CERTIFICATIONS, REPRESENTATIONS
AND AGREEMENTS
The Issuer hereby certifies, represents and agrees as follows:
Section 2.1 Authority to Certify and Expectations
(a) The undersigned officer of the Issuer along with other officers of the Issuer, are
charged with the responsibility of issuing the Lease.
(b) This Certificate is being executed and delivered in part for the purposes specified in
Section 1.148-2(b)(2) of the Regulations and is intended (among other purposes) to establish
reasonable expectations of the Issuer at this time.
(c) The Issuer has not been notified of any disqualification or proposed disqualification of
it by the Commissioner of the Internal Revenue Service as a bond issuer which may certify bond
issues under Section 1.148-2(b)(2) of the Regulations.
(d) The certifications, representations and agreements set forth in this Article II are made
on the basis of the facts, estimates and circumstances in existence on the date hereof, including
the following: (1) with respect to amounts expected to be received from delivery of the Lease,
amounts actually received, (2) with respect to payments of amounts into various funds or
accounts, review of the authorizations or directions for such payments made by the Issuer
pursuant to the Resolution and this Certificate, (3) with respect to the Issue Price, the
certifications of the Lessor as set forth in Exhibit A hereto, (4) with respect to expenditure of the
Proceeds of the Lease, actual expenditures and reasonable expectations of the Issuer as to when
the Proceeds will be spent for purposes of the Project, and (5) with respect to Bond Yield, review
of the Verification Certificate. The Issuer has no reason to believe that such facts, estimates or
circumstances are untrue or incomplete in any material way.
(e) To the best of the knowledge and belief of the undersigned officer of the Issuer, there
are no facts, estimates or circumstances that would materially change the representations,
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certifications or agreements set forth in this Certificate, and the expectations herein set out are
reasonable.
Section 2.2 Proceeds
The Issuer will constructively receive $47,750, which shall be applied to the purchase of
the Equipment. Per the terms of the Lease, the Issuer shall pay to holder principal and interest in
accordance with the schedule therein.
Section 2.3 Receipts and Expenditures
Receipts from the issuance of the Lease as identified in the preceding Section are to be
used by the Lessor and expended to acquire the equipment.
Proceeds and estimated Available Earnings on such amounts do not exceed the amount
necessary to accomplish the governmental purposes of the Lease.
The Lessor will not reoffer or sell the Lease to the public, certified by Exhibit A.
Section 2.4 Purpose of Lease
The Issuer is issuing the Lease to pay for the costs of the lease or lease purchase of
equipment for the City’s golf course enterprise.
Section 2.5 Facts Supporting Tax-Exemption Classification
The Lease Purchase is considered to be a governmental bond under the Code and not
subject to the provisions of the alternate minimum tax. The Proceeds will be used for the
purpose described in Section 2.4 hereof. The Lease is not a private activity bond because no
amount of Proceeds of the Lease is to be used in a trade or business carried on by a non-
governmental unit. Rather, the Proceeds will be used to finance the general government
operations and facilities of the Issuer described in Section 2.4 hereof. None of the payment of
principal or interest will be derived from, or secured by, money or property used in a trade or
business of a non-governmental unit. In addition, none of the government operations or facilities
of the Issuer being financed with the Proceeds of the Lease are subject to any management
contract or other similar arrangement or to any arrangement for use other than as by the general
public.
Section 2.6 Facts Supporting Temporary Periods for Proceeds
(a) At Closing, the Issuer will receive delivery of the Equipment (as defined in the
Resolution) and be bound to Lessor for payments in accordance with the Lease. Purchase
agreements with vendors for all of the equipment and improvements to be acquired under the
Lease have been approved and entered into and the equipment is expected to be acquired and
placed in service in the near future.
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(b) Not less than eighty-five percent (85%) of the Sale Proceeds is expected to be
expended for Project costs, including the reimbursement of other funds expended to date, within
a temporary period ending thirty-six (36) months from the Closing Date.
Section 2.7 Resolution Funds at Restricted or Unrestricted Yield
(a) Any Proceeds of the Lease received by the City will be held and accounted for in the
Project Fund provided in the Resolution. Except for the funds hereinafter described, the Issuer
has not and does not expect to create or establish any bond fund, reserve fund, or similar fund or
account for the Lease. The Issuer has not and will not pledge any moneys or Taxable Obligations
in order to pay debt service on the Lease or restrict the use of such moneys or Taxable
Obligations so as to give reasonable assurances of their availability for such purposes.
(b) Any monies which are invested beyond a temporary period are expected to constitute
less than a major portion of the Lease or to be restricted for investment at a yield not greater than
one-eighth of one percent above the Bond Yield.
Section 2.8 Pertaining to Yields
(a) The purchase price of all Taxable Obligations to which restrictions apply under this
Certificate as to investment yield or rebate of Excess Earnings, if any, has been and shall be
calculated using (i) the price taking into account discount, premium and accrued interest, as
applicable, actually paid or (ii) the fair market value if less than the price actually paid and if
such Taxable Obligations were not purchased directly from the United States Treasury. The
Issuer will acquire all such Taxable Obligations directly from the United States Treasury or in an
arm's length transaction without regard to any amounts paid to reduce the yield on such Taxable
Obligations. The Issuer will not pay or permit the payment of any amounts (other than to the
United States) to reduce the yield on any Taxable Obligations. Obligations pledged to the
payment of debt service on the Lease, or deposited into any reserve fund after they have been
acquired by the Issuer will be treated as though they were acquired for their fair market value on
the date of such pledge or deposit. Obligations on deposit in any reserve fund on the Closing
Date shall be treated as if acquired for their fair market value on the Closing Date.
(b) The Bond Yield has been computed as not less 5.104335% percent. This Bond Yield
has been computed on the basis of a purchase price for the Lease equal to the Issue Price.
Section 2.9 Further Certifications
(a) The Issuer will file with the Internal Revenue Service in a timely fashion Form 8038-
GC, Information Return for Small Tax-Exempt Governmental Bond Issues, Leases and
Installment Sales, with respect to the Lease and such other reports required to comply with the
Code and applicable Regulations.
(b) The Issuer will not take any action which would cause the Lease to become a "private
activity bond" as defined in Section 141(a) of the Code, including any use of the Project to or by
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any person other than a governmental unit if such use will be as other than a member of the
general public. None of the Proceeds of the Lease will be used directly or indirectly to make or
finance loans to any person other than a governmental unit. None of the Proceeds will be or has
been used directly or indirectly in any trade or business carried on by any person other than a
governmental unit.
(c) The Issuer will make no change in the nature or purpose of the Project except as
provided in Section 6.1 hereof.
(d) Except as provided in Section 6.1 hereof, the Issuer will not establish any sinking
fund, bond fund, reserve fund, debt service fund or other fund reasonably expected to be used to
pay debt service on the Lease, exercise its option to prepay the Lease prior to maturity or effect a
refunding of the Lease.
(e) No bonds or other obligations of the Issuer (1) were sold in the 15 days preceding the
date of sale of the Lease, (2) were sold or will be sold within the 15 days after the date of sale of
the Lease, (3) have been delivered in the past 15 days or (4) will be delivered in the next 15 days
pursuant to a common plan of financing for the issuance of the Lease and payable out of
substantially the same source of revenues.
(f) None of the Proceeds of the Lease will be used directly or indirectly to replace funds
of the Issuer used directly or indirectly to acquire obligations having a yield higher than the Bond
Yield.
(g) No portion of the Lease will be issued for the purpose of investing such portion at a
higher yield than the Bond Yield.
(h) The Issuer does not expect that the Proceeds of the Lease will be used in a manner
that would cause them to be "arbitrage bonds" as defined in Section 148(a) of the Code. The
Issuer does not expect that the Proceeds of the Lease will be used in a manner that would cause
the interest on the Lease to be includible in the gross income of the owners of the Lease under
the Code. The Issuer will not intentionally use any portion of the Proceeds to acquire higher
yielding investments.
ARTICLE III
REBATE
Section 3.1 Records
Sale Proceeds of the Lease will be held and accounted for in the manner provided in the
Resolution. The Issuer will maintain adequate records for funds created by the Resolution and
this Certificate including all deposits, withdrawals, transfers from, transfers to, investments,
reinvestments, sales, purchases, redemptions, liquidations and use of money or obligations until
six years after the Final Bond Retirement Date.
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Section 3.2 Rebate Fund
(a) In the Resolution, the Issuer has covenanted to pay to the United States the Rebate
Amount, an amount equal to the Excess Earnings on the Gross Proceeds Funds, at the times and
in the manner required or permitted and subject to stated special rules and allowable exceptions
or exemptions.
(b) The Rebate Amount is expected to be zero. If not, the Issuer will establish pursuant
to the Resolution and this Certificate a fund which is herein referred to as the Rebate Fund.
(c) The Issuer will deposit into the Rebate Fund or pay to the United States from legally
available money of the Issuer (whether or not such available money is on deposit in any fund or
account related to the Bonds) any amount which is required to be deposited into the Rebate Fund
or paid to the United States.
Section 3.3 Exceptions to Rebate
The Issuer reasonably expects that the Lease is eligible for one or more exceptions from
the arbitrage rebate rules set forth in the Regulations. If any Proceeds are ineligible, or become
ineligible, for an exception to the arbitrage rebate rules, the Issuer will comply with the
provisions of this Article III. A description of the applicable rebate exceptions is as follows:
● Six Month Exception
The Gross Proceeds of the Bonds are expected to be fully expended for the governmental
purposes for which the Bonds were issued no later than six months after the date of issue. If
contrary to the reasonable expectations of the Issuer, the Gross Proceeds are not expended within
six months, the Issuer will comply with the arbitrage rebate requirements of the Code.
Section 3.4 Calculation of Rebate Amount
(a) As soon after each Computation Date as practicable, the Issuer shall, if necessary,
calculate and determine the Excess Earnings on the Gross Proceeds Funds (the "Rebate
Amount"). All calculations and determinations with respect to the Rebate Amount will be made
on the basis of actual facts as of the Computation Date and reasonable expectations as to future
events.
(b) If the Rebate Amount exceeds the amount currently on deposit in the Rebate Fund,
the Issuer may deposit an amount in the Rebate Fund such that the balance in the Rebate Fund
after such deposit equals the Rebate Amount. If the amount in the Rebate Fund exceeds the
Rebate Amount, the Issuer may withdraw such excess amount provided that such withdrawal can
be made from amounts originally transferred to the Rebate Fund and not from earnings thereon,
which may not be transferred, and only if such withdrawal may be made without liquidating
investments at a loss.
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Section 3.5 Rebate Requirements and the Bond Fund
It is expected that the Bond Fund described in the Resolution and Section 2.6(c) of this
Certificate will be treated as a bona fide debt service fund as defined in Regulation 1.148-1(b).
As such, any amount earned during a Bond Year on the Bond Fund and amounts earned on such
amounts, if allocated to the Bond Fund, will not be taken into account in calculating the Rebate
Amount if the annual gross earnings on the Bond Fund for such Bond Year are less than
$100,000 or if average annual debt service will not exceed $2,500,000. However, should annual
gross earnings exceed $100,000 or should the Bond Fund cease to be treated as a bona fide debt
service fund, the Bond Fund will become subject to the rebate requirements set forth in Section
3.4 hereof.
Section 3.6 Investment of the Rebate Fund
(a) Immediately upon a transfer to the Rebate Fund, the Issuer may invest all amounts in
the Rebate Fund not already invested and held in the Rebate Fund, to the extent possible, in (1)
SLGS, such investments to be made at a yield of not more than one-eighth of one percent above
the Bond Yield, (2) Tax Exempt Obligations, (3) direct obligations of the United States or (4)
certificates of deposit of any bank or savings and loan association. All investments in the Rebate
Fund shall be made to mature not later than the next Rebate Payment Date.
(b) If the Issuer invests in SLGS, the Issuer shall file timely subscription forms for such
securities (if required). To the extent possible, amounts received from maturing SLGS shall be
reinvested immediately in zero yield SLGS maturing on or before the next Rebate Payment Date.
Section 3.7 Payment to the United States
(a) On each Rebate Payment Date, the Issuer will pay to the United States at least ninety
percent (90%) of the Rebate Amount less a computation credit of $1,000 per Bond Year for
which the payment is made.
(b) The Issuer will pay to the United States not later than sixty (60) days after the Final
Bond Retirement Date all the rebatable arbitrage as of such date and any income attributable to
such rebatable arbitrage as described in Regulation 1.148-3(f)(2).
(c) If necessary, on each Rebate Payment Date, the Issuer will mail a check to the Internal
Revenue Service Center, Ogden, UT 84201. Each payment shall be accompanied by a copy of
Form 8038-T, Arbitrage Rebate, filed with respect to the Bonds or other information reporting
form as is required to comply with the Code and applicable Regulations.
Section 3.8 Records
(a) The Issuer will keep and retain adequate records with respect to the Bonds, the Gross
Proceeds Funds, the Bond Fund, and the Rebate Fund until six years after the Final Bond
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Retirement Date. Such records shall include descriptions of all calculations of amounts
transferred to the Rebate Fund, if any, and descriptions of all calculations of amounts paid to the
United States as required by this Certificate. Such records will also show all amounts earned on
moneys invested in such funds, and the actual dates and amounts of all principal, interest and
redemption premiums (if any) paid on the Bonds.
(b) Records relating to the investments in such Funds shall completely describe all
transfers, deposits, disbursements and earnings including:
(i) a complete list of all investments and reinvestments of amounts in each such Fund
including, if applicable, purchase price, purchase date, type of security, accrued interest
paid, interest rate, dated date, principal amount, date of maturity, interest payment dates,
date of liquidation, receipt upon liquidation, market value of such investment on the Final
Bond Retirement Date if held by the Issuer on the Final Bond Retirement Date, and
market value of the investment on the date pledged to the payment of the Bonds or the
Closing Date if different from the purchase date.
(ii) the amount and source of each payment to, and the amount, purpose and payee of
each payment from, each such Fund.
Section 3.9 Additional Payments
The Issuer hereby agrees to pay to the United States from legally available money of the
Issuer (whether or not such available money is on deposit in any fund or account related to the
Bonds) any amount which is required to be paid to the United States, but which is not available
in a fund related to the Bonds for transfer to the Rebate Fund or payment to the United States.
ARTICLE IV
INVESTMENT RESTRICTIONS
Section 4.1 Avoidance of Prohibited Payments
The Issuer will not enter into any transaction that reduces the amount required to be
deposited into the Rebate Fund or paid to the United States because such transaction results in a
smaller profit or a larger loss than would have resulted if the transaction had been at arm's length
and had the Bond Yield not been relevant to either party. The Issuer will not invest or direct the
investment of any funds in a manner which reduces an amount required to be deposited into the
Rebate Fund or paid to the United States because such transaction results in a small profit or
larger loss than would have resulted if the transaction had been at arm's length and had the Bond
Yield not been relevant to the Issuer. In particular, notwithstanding anything to the contrary
contained herein or in the Resolution, the Issuer will not invest or direct the investment of any
funds in a manner which would violate any provision of this Article IV.
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Section 4.2 Market Price Requirement
(a) The Issuer will not purchase or direct the purchase of Taxable Obligations for more
than the then available market price for such Taxable Obligations. The Issuer will not sell,
liquidate or direct the sale or liquidation of Taxable Obligations for less than the then available
market price.
(b) For purposes of this Certificate, United States Treasury obligations purchased directly
from the United States Treasury will be deemed to be purchased at the market price.
Section 4.3 Investment in Certificates of Deposit
(a) Notwithstanding anything to the contrary contained herein or in the Resolution, the
Issuer will invest or direct the investment of funds on deposit in the Project Fund or any other
Gross Proceeds Fund, in a certificate of deposit of a bank or savings and loan association which
is permitted by law and by the Resolution only if (1) the price at which such certificate of deposit
is purchased or sold is the bona fide bid price quoted by a dealer who maintains an active
secondary market in certificates of deposit of the same type or (2) if there is no active secondary
market in such certificates of deposit, the certificate of deposit must have a yield (A) as high or
higher than the yield on comparable obligations traded on an active secondary market, as
certified by a dealer who maintains such a market, and (B) as high or higher than the yield
available on comparable obligations of the United States Treasury.
(b) The certificate of deposit described in part 2(A) of paragraph 4.3(a) above must be
executed by a dealer who maintains an active secondary market in comparable certificates of
deposit and must be based on actual trades adjusted to reflect the size and term of that certificate
of deposit and the stability and reputation of the bank or savings and loan association issuing the
certificate of deposit.
Section 4.4 Investment Pursuant to Investment Contracts and Agreements
The Issuer will invest or direct the investment of funds on deposit in the Project Fund or
any other Gross Proceeds Fund, pursuant to an investment contract (including a repurchase
agreement) only if (A) the Issuer receives at least three bids on the investment contract from
persons other than those with an interest in the Lease (e.g. underwriters, financial advisors), (B)
the person whose bid is accepted provides a certification stating that based on that person's
reasonable expectations on the date the investment contract is entered into, Taxable Obligations
will not be purchased pursuant to the investment contract at a price in excess of their fair market
value or sold pursuant to the investment contract at a price less than their fair market value, (C)
the yield on the investment contract is at least equal to the yield offered on similar obligations
under similar investment contracts.
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Section 4.5 Records
The Issuer will maintain records of all purchases, sales, liquidations, investments,
reinvestments, redemptions, disbursements, deposits, and transfers of amounts on deposit.
Section 4.6 Investments to be Legal
All investments required to be made pursuant to this Certificate shall be made to the
extent permitted by law. In the event that any such investment is determined to be ultra vires,
such investment shall be liquidated and the proceeds thereof shall be invested in a legal
investment, provided that prior to reinvesting such proceeds, the Issuer shall obtain an opinion of
Bond Counsel to the effect that such reinvestment will not cause the Lease to become an
arbitrage bond under Section 103, Section 148, Section 149, or any other applicable provision of
the Code.
ARTICLE V
GENERAL COVENANTS
The Issuer hereby covenants to perform all acts within its power necessary to ensure that
the reasonable expectations set forth in Article II hereof will be realized. The Issuer reasonably
expects to comply with all covenants contained in this Certificate.
ARTICLE VI
AMENDMENTS AND ADDITIONAL AGREEMENTS
Section 6.1 Opinion of Bond Counsel; Amendments
The various provisions of this Certificate need not be observed and this Certificate may
be amended or supplemented at any time by the Issuer if the Issuer receives an opinion or
opinions of Bond Counsel that the failure to comply with such provisions will not cause any of
the Lease to become an arbitrage bond under the Code and that the terms of such amendment or
supplement will not cause any of the Lease to become an arbitrage bond under the Code, or
otherwise cause interest on any of the Lease to become includable in gross income for federal
income tax purposes.
Section 6.2 Additional Covenants, Agreements
The Issuer hereby covenants to make, execute and enter into (and to take such actions, if
any, as may be necessary to enable it to do so) such agreements as may be necessary to comply
with any changes in law or regulations in order to preserve the tax-exempt status of the Lease to
the extent that it may lawfully do so. The Issuer further covenants (1) to impose such limitations
on the investment or use of moneys or investments related to the Lease, (2) to make such
payments to the United States Treasury, (3) to maintain such records, (4) to perform such
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calculations, and (5) to perform such other lawful acts as may be necessary to preserve the tax-
exempt status of the Lease.
Section 6.3 Amendments
Except as otherwise provided in Section 6.1 hereof, all the rights, powers, duties and
obligations of the Issuer shall be irrevocable and binding upon the Issuer and shall not be subject
to amendment or modification by the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Certificate to be executed by its
duly authorized officer, all as of the day first above written.
CITY OF WAUKEE, STATE OF IOWA
Director of Finance of the City of Waukee,
State of Iowa
A -1
EXHIBIT A
VERIFICATION CERTIFICATE OF THE LESSOR
The undersigned, ____________________, ____________________ of VGM Financial
Services (the "Lessor"), hereby certifies as follows:
1. The Lessor and City of Waukee (the "Issuer"), have entered into a Master Lease
dated as of January 13, 2014, supplemented with equipment schedule # 004-0651601-103 (the
"Lease"), providing for the acquisition from the Lessor of certain items of Equipment, as defined
in the Lease.
2. The Lease is in full force and effect and has not been repealed, rescinded or
amended.
3. None of the interest rates on the Lease, the Lessor's spread, or the production or
profits in connection with the purchase and sale of the Lease is unreasonably high.
4. The Lessor hereby confirms that the Lease will be held by Lessor, as purchaser, in its
own account.
IN WITNESS WHEREOF, the Lessor has caused this Verification Certificate to be
executed by its duly authorized officer this __________ day of _______________, 2021.
VGM Financial Services
By:
Title:
01828229-1\21938-252