HomeMy WebLinkAbout1998-08-17-Resolutions 98-42_Bonds - Sewer Revenue Series 1998 - IssuanceRESOLUTION NO.98-42
1ResolutionauthorizingandapprovingLoanandDisbursement
Agreements and providing for the issuance and securing the payment of
$2,579,000 Sewer Revenue Bonds,Series 1998
WHEREAS,the City of Waukee,in the County of Dallas,State ofIowa (hereinafter referred
to as the "City"),did heretofore establish a Municipal Sanitary Sewer System in and for the City
(hereinafter referred to as the "Utility")which has continuously supplied sanitary sewer service in and
to the City and its inhabitants since its establishment;and
WHEREAS,the management and control of the Utility are vested in the Council,and no
board of trustees exists for this purpose;and
WHEREAS,pursuant to a resolution adopted and approved by the Council on May 23,1989
(the "1989 Resolution"),there have been heretofore issued $400,000 Sewer Revenue Notes,dated
June 1,1989,of which $235,000 currently remain outstanding (the "1989 Outstanding Notes");and
WHEREAS,pursuant to a resolution adopted and approved by the Council on May 18,1992
(the "1992 Resolution"),there have been heretofore issued $700,000 Sewer Revenue Notes,dated
June 1,1992,of which $565,000 currently remain outstanding (the "1992 Outstanding Notes")(the
1989 Resolution and the 1992 Resolution are collectively referred to as the "Prior Resolutions",and I
the 1989 Outstanding Notes and the 1992 Outstanding Notes are collectively referred to as the
"Outstanding Notes");and
WHEREAS,pursuant to the Outstanding Resolutions,the right was reserved to the City to
authorize,issue and deliver additional sewer revenue bonds ranking on a parity with the Outstanding
Notes under specified conditions and restrictions;and
WHEREAS,the City has heretofore proposed to contract indebtedness and enter into loan
and disbursement agreements to provide funds to pay a portion of the cost of constructing
improvements and extensions to the Utility (the "Project"),and has published notice of the proposed
action and has held a hearing thereon;and
WHEREAS,it is necessary at this time to authorize and approve three agreements in the
aggregate principal amount of$2,579,000;
NOW,THEREFORE,Be It Resolved by the City Council of the City of Waukee,Iowa,as
follows:
Section 1.It is hereby determined that the City shall enter into the following loan and
disbursement agreements in the following principal amounts:I
Denoted Series Name Amount
Series A Agreement
Series B Agreement
Series C Agreement
$455,748
$945,252
$1,178,000
(together,the "Agreements")with the Iowa Finance Authority,an agency and public instrumentality
of the State of Iowa,as lender (the "Lender"),the Iowa Department of Natural Resources (the
"Department")and Norwest Bank Iowa,National Association,as trustee (the "Trustee"shall mean
Norwest Bank Iowa,National Association,with its principal office located in the City of Des Moines,
Iowa,and its successors and any corporation resulting from or surviving any consolidation or merger
to which it or its successors may be a party and any successor trustee at the time serving as successor
trustee under the Indenture of Trust dated as of June 1,1989,between the Trustee and the Lender,
as the same may be supplemented or amended from time to time (the "Indenture").The Agreements
shall be in substantially the forms as have been placed on file with the City and shall provide for a total
amount of a loan to the City in the aggregate principal amount of $2,579,000 for the purpose as set
forth in the preamble hereof
The Mayor and City Clerk are hereby authorized and directed to sign the Agreements on
behalf of the City,and the Agreements are hereby approved.
Section 2.The following Sewer Revenue Bonds are hereby authorized to be issued to
evidence the obligation of the City under the Agreements in the total aggregate principal amount of
$2,579,000,which shall be dated the date of delivery to or upon the direction of the Lender,and shall
be denoted as follows,shall be in the following amounts,and shall bear interest from the date of each
advancement made at the following rates per annum pursuant to the respective series Agreement,
until payment thereof,as set forth in Exhibit B attached to each of the Agreements:
Sewer Revenue Bond Series Amount Interest Rate Series Agreement
Series 1998 A Bonds $455,748 4.23%Series A Agreement
Series 1998 B Bonds $945.252 4.23%Series B Agreement
Series 1998 C Bonds $1,178,000 3.62%Series C Agreement
Each series of bonds shall be initially issued as a single bond in the denomination of the total
foregoing amount of that series.The Series 1998 A Bonds,the Series 1998 B Bonds and the Series
1998 C Bonds shall be collectively referred to as the "Series 1998 Bonds".
Section 3.The City Clerk is hereby designated as the Registrar and Paying Agent for the
Series 1998 Bonds and may be hereinafter referred to as the "Registrar"or the "Paying Agent".
Payment of the principal of and interest on the Series 1998 Bonds,and premium,if any,shall
be payable at the office of the Paying Agent by mailing of a check,wire transfer or automated
Clearinghouse System transfer,to the registered owners thereof appearing on the registration books
of the City at the addresses shown on such registration books.All such payments,except full
redemption,shall be made to the registered owners appearing on the registration books at the close
of business on the fifteenth day of the month next preceding the payment date.Final payment of
principal shall only be made upon surrender of the Bond or Bonds to the Paying Agent.
In addition to the payment of principal of and interest on the Series 1998 Bonds the City also
agrees to pay the Initiation Fee and the Servicing Fee (defined in the Agreements)in accordance with
the terms of the Agreements.
The Series 1998 Bonds shall be executed on behalf of the City with the official manual or
facsimile signature of the Mayor and attested with the official manual or facsimile signature of the
City Clerk and shall have the City's seal impressed or printed thereon,and shall be fully registered
bonds without interest coupons.The issuance of the Series 1998 Bonds,and the amount of the Loan
advanced thereunder shall be recorded in the office of the City Treasurer,and the certificate on the
back of each Series 1998 Bond shall be executed with the official manual or facsimile signature of the
City Treasurer.In case any officer whose signature or the facsimile of whose signature appears on
the Series 1998 Bonds shall cease to be such officer before the delivery of such Series 1998 Bonds,
such signature or such facsimile signature shall nevertheless be valid and sufficient for all purposes,
the same as if such officer had remained in office until delivery.
The Series 1998 Bonds shall be fully registered as to principal and interest in the names of
the owners on the registration books of the City kept by the Registrar.Each Series 1998 Bond shall
be transferable without cost to the registered owner thereof only upon the registration books of the
City upon presentation to the Registrar,together with either a written instrument of transfer
satisfactory to the Registrar or the assignment form thereon completed and duly executed by the
registered owner or the duly authorized attorney for such registered owner.
The record and identity of the owners of the Series 1998 Bonds shall be kept confidential as
provided by Section 22.7 of the Code ofIowa.
The Series 1998 Bonds are subject to optional redemption on any interest payment date,in
whole,but not in part,in the event all or substantially all of the Project is damaged or destroyed,at
a price of par plus accrued interest.Principal of the Series 1998 Bonds maturing prior to December
1,2008,may be called for redemption by the City on any date and paid before maturity from any
funds regardless of source with the consent of the Lender;and principal of the Series 1998 Bonds
matnring on and after December 1,2008,may be called for redemption by the City on December 1,
2007,or on any interest payment date thereafter,and paid before maturity from any funds regardless
of source without the consent of the Lender.The Series 1998 Bonds may be so prepaid in whole or
from time to time in part in inverse order of maturity and within an annual maturity by lot by giving
30 days notice of redemption by certified mail to the registered owners of the Series 1998 Bonds or
portions thereof to be redeemed.The terms of redemption shall be par,plus accrued interest to date
of call.The Series 1998 Bonds are also subject to redemption as set forth in Section 5 of the
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Agreements.
All ofthe Series 1998 Bonds and the interest thereon are payable from the same source as
and rank on a parity with the Outstanding Notes;and the Outstanding Notes,the Series 1998 Bonds
and any additional obligations as may be hereafter issued and outstanding from time to time ranking
on a parity therewith under the conditions set forth herein (which additional obligations are
hereinafter sometimes referred to as "Parity Obligations"),shall be payable from the Net Revenues
of the Utility and the Sinking Fund hereinafter referred to,both of which are hereby pledged for such
purpose.
The Outstanding Notes and the Series 1998 Bonds are sometimes hereinafter collectively
referred to as the "Bonds".
Section 4.The Series 1998 Bonds shall be executed as herein provided as soon after the
adoption of this resolution as may be possible and thereupon they shall be delivered to the Registrar
for registration and delivery to the Lender,upon receipt of the loan proceeds,and all action
heretofore taken in connection with the Agreements is hereby ratified and confirmed in all respects.
Section 5.The Series 1998 Bonds shall be in substantially the following form with such
additions as relate to each respective series:
(Form of Bond)
UNITED STATES OF AMERICA
STATE OF IOWA
COUNTY OF DALLAS
CITY OF WAUKEE
I
SEWER REVENUE BOND
SERIES 1998_
$----No.R-_
RATE MATURITY BOND DATE
%--June 1,2018 (Closing Date)
The City of Waukee (the "City"),in the County of Dallas,State ofIowa,for value received,
promises to pay from the source and as hereinafter provided,on the maturity date of this Bond to
IOWA FINANCE AUTHORITY
or registered assigns,the principal sum of
__________________DOLLARS
.Interest at the rate specified above shall be payable semiannually on June 1 and December 1 ]
of each year,commencing December 1,1998,and principal shall be due and payable in installments
in the amounts shown on the Principal Payment Schedule hereon on June 1,1999,and annually
thereafter on June 1 in each year until the principal and interest are fully paid,except that the final
installments of the entire balance of principal and interest,if not sooner paid,shall become due and
payable on December 1,2018.Interest shall be computed on the basis of a 360-day year of twelve
30-day months.
The City Clerk shall act as Registrar and Paying Agent and may be hereinafter referred to as
the "Registrar"or the "Paying Agent".
Payment of the principal of and interest on this Bond and premium,if any,shall be payable
at the office of the Paying Agent by mailing of a check,wire transfer or automated Clearinghouse
System transfer,to the registered owners thereof appearing on the registration books of the City at
the addresses shown on such registration books.All such payments,except full redemption,shall be
made to the registered owners appearing on the registration books at the close of business on the
fifteenth day of the month next preceding the payment date.Final payment of principal shall only be
made upon surrender of this Bond to the Paying Agent.
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This Bond is one ofa series of bonds (the "Series 1998 Bonds")issued by the City to evidence
its obligation under certain Loan and Disbursement Agreements,dated the date hereof (the
"Agreements")entered into by the City for the purpose of providing funds to pay a portion of the cost
of constructing improvements and extensions to the Municipal Sanitary Sewer System of the City (the
"Project").
The Series 1998 Bonds are issued pursuant to and in strict compliance with the provisions of
Sections 384.24Aand 384.83 of the Code ofIowa,1997,and all other laws amendatory thereof and
supplemental thereto,and in conformity with a resolution of the City Council authorizing and
approving the Agreements and providing for the issuance and securing the payment of the Series
1998 Bonds (the "Resolution"),and reference is hereby made to the Resolution and the Agreements
for a more complete statement as to the source ofpayment of the Series 1998 Bonds and the rights
of the owners of the Bonds.
The Series 1998 Bonds are subject to optional redemption on any interest payment date,in
whole,but not in part,in the event all or substantially all of the Project is damaged or destroyed,at
a price of par plus accrued interest.Principal of the Series 1998 Bonds maturing prior to December
1,2008,may be called for redemption by the City on any date and paid before maturity from any
funds regardless of source with the consent of the Lender;and principal of the Series 1998 Bonds
maturing on and after December 1,2008,may be called for redemption by the City on December 1,
2007,or on any interest payment date thereafter,and paid before maturity from any funds regardless
of source without the consent ofthe Lender.The Series 1998 Bonds may be so prepaid in whole or
from time to time in part in inverse order of maturity and within an annual maturity by lot by giving
30 days notice of redemption by certified mail to the registered owners ofthe Series 1998 Bonds or
portions thereof to be redeemed.The terms of redemption shall be par,plus accrued interest to date
of call.The Series 1998 Bonds are also subject to redemption as set forth in Section 5 of the
Agreements.
The Series 1998 Bonds are not general obligations of the City but are payable from the same
source and rank on a parity with the City's outstanding Sewer Revenue Note,Series 1989 (the"Series
1989 Note"),dated June 1,1989,and the City's outstanding Sewer Revenue Note,Series 1992 (the
"Series 1992 Note"),dated June 1,1992 (together the "Outstanding Notes"),and the Series 1998
Bonds,the Outstanding Notes,together with any additional obligations as may be hereafter issued
and outstanding from time to time ranking on a parity therewith under the conditions set forth in the
Resolution,are payable solely and only out of the future Net Revenues of the Utility,which have been
pledged for that purpose.This Bond is not payable in any manner by taxation,and under no
circumstances shall the City be in any manner liable by reason of the failure of the said Net Revenues
to be sufficient for the payment of this Bond and the interest hereon.
This Bond is fully negotiable but shall be fully registered as to both principal and interest in I
the name of the owner on the books of the City in the office of the Registrar,after which no transfer
shall be valid unless made on said books and then only upon presentation of this Bond to the
Registrar,together with either a written instrument oftransfer satisfactory to the Registrar or the
assignment form hereon completed and duly executed by the registered owner or the duly authorized
attorney for such registered owner.
The City,the Registrar and the Paying Agent may deem and treat the registered owner hereof
as the absolute owner for the purpose of receiving payment of or on account of principal hereof,
premium,if any,and interest due hereon and for all other purposes,and the City,the Registrar and
the Paying Agent shall not be affected by any notice to the contrary.
And It Is Hereby Certified,Recited and Declared that all acts,conditions and things required
to exist,happen and be performed precedent to and in the issuance of the Series 1998 Bonds have
existed,have happened and have been performed in due time,form and manner,as required by law,
and that the issuance of the Series 1998 Bonds does not exceed or violate any constitutional or
statutory limitation or provision.
IN TESTIMONY WHEREOF,the City of Waukee,Iowa,has caused this Bond to be
executed by its Mayor and attested by its City Clerk,and to be sealed with the official seal of the City,
all as of (Closing Date).
CITY OF Waukee,IOWA 1
By (Signature)
Mayor
Attest:
City Clerk
(Signature)
(Seal)
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(On the back of each Bond the following certificate shall be executed with the duly
authorized signature of the City Treasurer)
STATE OF IOWA
COUNTY OF DALLAS
CITY OF Waukee
SS:CITY TREASURER'S CERTIFICATE
The original issuance of the Series 1998 Bonds,of which this Bond is a part,was dilly and
properly recorded in my office as of (Closing Date).
(Signature)
City Treasurer
ABBREVIATIONS
The following abbreviations,when used in this Bond,shall be construed as though they were
written out in full according to applicable laws or regulations:
TENCOM -
TENENT -
as tenants in common
as tenants by the entireties
UTMAc_~~~~~~~~~~_
JTTEN as joint tenants with
right of survivorship and
not as tenants in common
(Custodian)
As Custodian for _
(Minor)
under Uniform Transfers to Minors Act
(State)
Additional abbreviations may also be used though not in the list above.
ASSIGNMENT
For valuable consideration,receipt of which is hereby acknowledged,the undersigned assigns
this Bond to
(please print or type name and address of Assignee)
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
and does hereby irrevocably appoint ,Attorney,to transfer
this Bond on the books kept for registration thereof with full power of substitution.
Dated:
Signature guaranteed:
NOTICE:The signature to this Assignment must
correspond with the name of the registered owner
as it appears on this Bond in every particular,
without alteration or enlargement or any change
whatever.
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SERIES 1998ABONDS
PRINCIPAL PAYMENT SCHEDULE
Due Principal Due Principal
June 1 Amount June 1 Amount
1999 $2009 $
2000 $2010 $
2001 $2011 $
2002 $2012 $
2003 $2013 $
2004 $2014 $
2005 $2015 $
2006 $2016 $
2007 $2017 $
2008 $2018 $
SERIES 1998B BONDS
PRINCIPAL PAYMENT SCHEDULE
Due Principal Due Principal
June 1 Amount June 1 Amount
1999 $2009 $
2000 $2010 $
2001 $2011 $
2002 $2012 $
2003 $2013 $
2004 $2014 $
2005 $2015 $
2006 $2016 $
2007 $2017 $
2008 $2018 $
SERIES 1998C BONDS \PRlNCIPALPAYMENT SCHEDULE jDuePrincipalDuePrincipal
June 1 Amount June 1 Amount
1999 $2009 $
2000 $2010 $
2001 $2011 $
2002 $2012 $
2003 $2013 $
2004 $2014 $
2005 $2015 $
2006 $2016 $
2007 $2017 $
2008 $2018 $
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Section 6.The loan proceeds,exclusive of any accrued interest and except as provided
below,shall be held by the Trustee and disbursed for costs of the Project,as referred to in the
preamble hereof However,if necessary,initial Loan Proceeds may be credited to and become a part
of the Reserve Fund hereinafter referred to in order to make the first monthly payment required to
be made into the Reserve Fund,as hereinafter provided.
Section 7.So long as any of the Bonds or any Parity Obligations are outstanding,the City
shall continue to maintain the Utility in good condition,and the Utility shall continue to be operated
in an efficient manner and at a reasonable cost as a revenue producing undertaking.The City shall
establish,impose,adjust and provide for the collection of rates to be charged to customers of the
Utility,including the City,to produce gross revenues (hereinafter sometimes referred to as the "Gross
Revenues")at least sufficient to pay the expenses of operation and maintenance of the Utility,which
shall include salaries,wages,cost of maintenance and operation,materials,supplies,insurance and
all other items normally included under recognized accounting practices (but does not include
allowances for depreciation in the valuation of physical property)(which such expenses are
hereinafter sometimes referred to as the "Operating Expenses")and to leave a balance of net revenues
(herein referred to as the "Net Revenues")at least sufficient at all times to pay the principal of and
interest on all of the Bonds and any other Parity Obligations,as the same become due,and to maintain
a reasonable current reserve therefor,as hereinafter provided.
Section 8.Nothing in this resolution shall be construed to impair the rights vested in the
Outstanding Notes.The provisions of the Prior Resolutions and the provisions of this resolution are
to be construed wherever possible so that the same will not be in conflict.In the event such
construction is not possible,the provisions of the resolution first adopted shall prevail until such time
as the obligations authorized by such resolution have been paid or otherwise satisfied as therein
provided,at which time the provisions of this resolution shall again prevail.
Section 9.The provisions of the Prior Resolutions with respect to the issuance of
additional sewer revenue obligations ranking on a parity with the Outstanding Notes are hereby
recognized,and it is hereby found and determined that the officially reported Net Revenues of the
Utility for the fiscal year which ended June 30,1997,were equal to at least 125%of the average
amount that will become due in any fiscal year during the life of the Outstanding Notes for both the
principal of and interest on the Outstanding Notes and the Series 1998 Bonds issued hereunder based
upon the repayment schedule projected for the Series 1998 Bonds at the time of their issuance.
Section 10.From and after the issuance of the Series 1998 Bonds,and throughout the time )(
any of the Bonds or Parity Obligations are outstanding,the Gross Revenues of the Utility shall
continue to be set aside into the City's Sewer Revenue Fund (the "Revenue Fund")and shall be used
in maintaining and operating the Utility and,after the payment of proper and necessary maintenance
and operation expenses,the remaining Net Revenues,to the extent hereinafter and in the Prior
Resolutions provided,shall be used to pay interest on and principal of the Bonds and any Parity
Obligations.
Section 11.The provisions in and by the Prior Resolutions whereby there has been created
and is to be maintained a separate Sewer Revenue Sinking Fund (the "Sinking Fund")for the payment
of the principal of and interest on the Outstanding Notes are hereby ratified and confirmed and from
and after the issuance of the Series 1998 Bonds,there shall be set aside from the future Net Revenues
of the Utility such portion thereof as will be sufficient to pay the interest on and principal of all of the
Bonds and any Parity Obligations at any time outstanding as the same become due,and it is hereby
determined that in addition to the payments into the Sinking Fund required by the Prior Resolutions,
additional amounts shall be set aside into the Sinking Fund from the Net Revenues during each month
of each year and such additional amount shall be not less than as follows:
An amount equal to 1I6th of the installment of interest coming due on the
next interest payment date on the then outstanding Series 1998 Bonds and
any Parity Obligations,plus an amount equal to lIl2th of the installment
of principal coming due on such Series 1998 Bonds and any Parity
Obligations on the next succeeding principal payment date until the full
amount of such installment is on deposit in the Sinking Fund.
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Money in the Sinking Fund shall be used solely for the purpose of paying principal of and
interest on the Bonds and any Parity Obligations as the same shall become due and payable.
Whenever Parity Obligations are issued under the conditions and restrictions hereinafter set forth,
provisions shall be made for additional payments to be made into the Sinking Fund for the purpose
of paying the interest on and principal of such Parity Obligations.
If at any time there be a failure to pay into the Sinking Fund the full amount above stipulated,
then an amount equivalent to the deficiency shall be paid into the Sinking Fund from the Net
Revenues of the Utility as soon as available,and the same shall be in addition to the amount otherwise
required to be so set apart and paid into the Sinking Fund.
No further payments need be made into the Sinking Fund when and so long as the amount
therein is sufficient to retire all of the Bonds and any Parity Obligations then outstanding which are
payable from the Sinking Fund and to pay all interest to become due thereon prior to such retirement,
or if provision for such payment has been made.
Section 12.All of such payments required to be made into the Sinking Fund shall be made I
in equal monthly instalhnents on the first day of each month,except that when the first day of any
month shall be a Sunday or legal holiday,then such payments shall be made on the next succeeding
secular day.
Section 13.The provisions in and by the Prior Resolutions whereby there has been created
and is to be maintained a "Surplus Fund"are hereby ratified and confirmed.From and after the
issuance ofthe Series 1998 Bonds and so long as any of the Bonds or Parity Obligations remain
outstanding,the Surplus Fund shall continue to be maintained,and there shall be set apart and paid
all of the Net Revenues of the Utility remaining after first making the required payments hereunder
and the required payments under the Prior Resolutions,and after all of the special funds created and
to be maintained pursuant to the Prior Resolutions contain their required fund balances.Funds on
deposit in the Surplus Fund shall be transferred and credited to the Sinking Fund whenever necessary
to prevent or remedy a default in the payment of the principal of or interest on the Bonds and any
Parity Obligations or shall be transferred and credited to the Reserve Fund created and to be
maintained under the Prior Resolutions whenever any deficiency may exist in the Reserve Fund.
Section 14.All money held in any fund or account created or to be maintained under the
terms of this resolution shall be deposited in lawful depositories of the City or invested in accordance
with Chapters 12B and 12C of the Code ofIowa and continuously held and secured as provided by
the laws of the State of Iowa relating to the depositing,securing,holding and investing of public
funds.All interest received by the City as a result of investments under this section shall be
considered to constitute Gross Revenues of the Utility and shall be deposited in or transferred to the
Sewer Revenue Fund and used solely and only for the purposes specified herein for such funds.
Section 15.The City hereby covenants and agrees with the owner or owners of the Bonds
and Parity Obligations,or any of them,that from time to time may be outstanding,that it will
faithfully and punctually perform all duties with reference to the Utility required and provided by the
Constitution and laws of the State of Iowa,that it will segregate the Gross Revenues of the Utility
and make application thereof in accordance with the provisions of this resolution and that it will not
sell,lease or in any manner dispose of the Utility or any part thereof,including any and all extensions
and additions that may be made thereto,until all of the Bonds and Parity Obligations shall have been
paid in full,both principal and interest,or unless and until provisions shall have been made for the
payment of said Bonds and Parity Obligations and interest thereon in full;provided,however,that
the City may dispose of any property which in the judgment of the Council,or the duly constituted
body as may then be charged with the operation of the Utility,is no longer useful or profitable in the
operation of the Utility nor essential to the continued operation thereof and when the sale thereof will
not operate to reduce the revenues to be derived from the operation of the Utility.
Section 16.Upon a breach or default ofa term of the Bonds or any Parity Obligations and
this resolution,a proceeding may be brought in law or in equity by suit,action or mandamus to
enforce and compel performance of the duties required under the terms of this resolution and Division)}\
V of Chapter 384 of the Code of Iowa or an action may be brought to obtain the appointment of a
receiver to take possession of and operate the Utility and to perform the duties required by this
resolution and Division V of Chapter 384 of the Code of Iowa.
Section 17.The Bonds or any Parity Obligations shall not be entitled to priority or
preference one over the other in the application of the Net Revenues ofthe Utility regardless of the
time or times of the issuance of such Bonds or Parity Obligations,it being the intention of the City
that there shall be no priority among the Bonds or Parity Obligations,regardless of the fact that they
may have been actually issued and delivered at different times.
Section 18.The City agrees that so long as the Bonds or any Parity Obligations remain
outstanding,it will maintain insurance for the benefit of the owners of the Bonds and any Parity
Obligations on the insurable portions of the Utility of a kind and in an amount which usually would
be carried by private companies or municipalities engaged in a similar type of business.The proceeds
of any insurance,except public liability insurance,shall be used to repair or replace the part or parts
of the Utility damaged or destroyed,The City will keep proper books of record and account,
separate from all other records and accounts,showing the complete and correct entries of all
transactions relating to the Utility,and the owners of the Bonds or any Parity Obligations shall have
the right at all reasonable times to inspect the Utility and all records,accounts and data of the City
relating thereto.
Section 19.The provisions of this resolution shall constitute a contract between the City
and the owners of the Bonds and Parity Obligations as may from time to time be outstanding,and
after the issuance of the Series 1998 Bonds,no change,variation or alteration of any kind of the
provisions ofthis resolution shall be made which will adversely affect the owners of the Bonds or
Parity Obligations until all of the Bonds and Parity Obligations and the interest thereon shall have
been paid in full,except as hereinafter provided.
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The owners of two-thirds (2/3)in principal amount of the Bonds and Parity Obligations at any
time outstanding (not including in any case any obligations which may then be held or owned by or
for the account of the City,but including such obligations as may be issued for the purpose of
refunding any of the Bonds or Parity Obligations if such obligations shall not then be owned by the
City)shall have the right from time to time to consent to and approve the adoption by the City of a
resolution or resolutions modifying or amending any of the terms or provisions contained in this
resolution;provided,however,that this resolution may not be so modified or amended in such
manner as to:
(a)Make any change in the maturity or redemption terms of the
Bonds or Parity Obligations.
(b)Make any change in the rate of interest borne by any of the Bonds
or Parity Obligations.
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(c)Reduce the amount of the principal payable on any Bonds or
Parity Obligations.
(d)Modify the terms of payment of principal of or interest on the
Bonds or Parity Obligations,or any of them,or impose any conditions
with respect to such payment.
(e)Affect the rights of the owners of less than all of the Bonds or
Parity Obligations then outstanding.
(f)Reduce the percentage of the principal amount of the Bonds or
Parity Obligations,the consent of the owners of which shall be required
to effect a further modification.
Whenever the City shall propose to amend or modify this resolution under the provisions of
this section,it shall cause notice of the proposed amendment to be (1)filed with the Lender and (2)
mailed by certified mail to each registered owner of any Bond or Parity Obligation 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 within one year from the date of the mailing of said notice,there shall
be filed with the City Clerk an instrument or instruments executed by the owners of at least two-thirds
(2/3)in aggregate principal amount of the Bonds and Parity Obligations outstanding at the time of
the adoption of such amendatory resolution specifically consenting to the adoption thereof as herein
provided,no owner of any Bonds or Parity Obligations shall have any right or interest to object to
the adoption of such amendatory resolution or to object to any of the terms or provisions therein
contained or to the operation thereof or to enjoin or restrain the City from taking any action pursuant
to the provisions thereof
Any consent given by the owners of a Bond or Parity Obligation pursuant to the provisions
ofthis section shall be irrevocable for a period of six (6)months from the date of such consent and
shall be conclusive and binding upon all future owners of the same Bond or Parity Obligation during
such period.Such consent may be revoked at any time after six (6)months from the date of such
consent by the owner who gave such consent or by a successor in title,but such revocation shall not
be effective if the owners of two-thirds (2/3)in aggregate principal amount of the Bonds and Parity
Obligations outstanding as in this section defined shall have,prior to the attempted revocation,
consented to and approved the amendatory resolution referred to in such revocation.
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 acknowledgments of deeds within such jurisdiction,that the persons signing such instrument
acknowledged before such officer the execution thereof,or may be proved by an affidavit of a witness
to such execution sworn to before such officer.
Section 20.It is the intention of the City that interest on the Series 1998 Bonds be and
remain excluded from gross income for federal income tax purposes pursuant to the appropriate
provisions of the Internal Revenue Code of 1986,as amended,and the Treasury Regulations in effect
with respect thereto (all of the foregoing herein referred to as the "Internal Revenue Code").In
furtherance thereof the City covenants to comply with the provisions of the Internal Revenue Code
as they may from time to time be in effect or amended and further covenants to comply with
applicable future laws,regulations,published rulings and court decisions as may be necessary to
insure that the interest on the Series 1998 Bonds will remain excluded from gross income for federal
income tax purposes.Any and all of the officers of the City are hereby authorized and directed to
take any and all actions as may be necessary to comply with the covenants herein contained.
I
The City hereby designates the Bonds as "Qualified Tax Exempt Obligations"as that term is
used in Section 265(b)(3)(B)of the Internal Revenue Code.
Section 21.If any section,paragraph,clause or provision of this resolution shall be held
invalid,the invalidity of such section,paragraph,clause or provision shall not affect any of the
remaining provisions of this resolution.
Section 22.All resolutions and orders or parts thereof in conflict with the provisions of
this resolution are,to the extent of such conflict,hereby repealed.
Section 23.This resolution shall be in full force and effect immediately upon its adoption I
and approval,as provided by law.I
Passed and approved August 17,1998.
Mayor
Attest:
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City er,l