Water Revenue Bonds Series 2008DTHE CTTY OF Dubuque
-^^
DUB E A~~
r
Masterpiece on the Mississippi
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Procedure to Complete Action of Issuance of $1,195,000 Water Revenue
Bonds, Series 2008D
DATE: October 13, 2008
Finance Director Ken TeKippe recommends City Council approval of the suggested
proceedings to complete the action required on the issuance of $1,195,000 Water
Revenue Bonds, Series 2008D.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
/~
G~
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Ken TeKippe, Finance Director
THE CTTY OF
DuB E
~~
Memorandum
TO: Michael C. Van Milligen, City Manager
FROM: Ken TeKippe, Finance Director ~- /
SUBJECT: Procedure to Complete Action of Issuance of $1,195,000 Water Revenue
Bonds, Series 2008D
DATE: October 8, 2008
The purpose of this memorandum is to provide suggested proceedings to complete the
action required on the recent bond issue.
The first resolution appoints Wells Fargo Bank, National Association of Des Moines,
Iowa to serve as paying agent, bond registrar, and transfer agent, approving the paying
agent and bond registrar and transfer agent agreement and authorizing the execution of
the agreement.
The second master resolution authorizes the issuance of the bonds. The resolution
also incorporates by reference the form of the Tax Exemption Certificate and Continuing
Disclosure Certificate. The "master resolution" applies to all future water revenue bonds
or notes issued by the City.
A letter from attorney William Noth detailing information on the bond is enclosed.
This is the final City Council action required on the bond issue.
KT/jg
Enclosures
AHLERS ~COONEY, P.C.
100 COURT AVENUE, SUITE 600
DES MOINES, IOWA 50309-2231
PHONE: 515-243-7611
FAX: 515-243-2149
WWW.AHLERSLAW.COM
WILLIAM J. NOTH
wnoth~ahlerslaw.com
October 7, 2008
BY OVERNIGHT DELIVERY
Mr. Ken TeKippe
Finance Officer
City of Dubuque
50 West 13th Street
Dubuque, Iowa 52001-4864
RE: $1,195,000 Water Revenue Bonds, Series 2008D
Dear Mr. TeKippe:
Enclosed are documents to complete Council action in connection with the
authorization for the issuance of the above Bonds.
Direct Dial:
(5151246-0332
1. Resolution Appointing Registrar and Payin A ent. This resolution
appoints Wells Fargo Bank, N.A. to serve as Registrar. The appropriate
agreement has been forwarded to Wells Fargo Bank, N.A. for execution,
and will be sent to you directly for signature. Once they are signed, please
return two copies to us prior to closing, retaining the "Original" copy for
your records.
2. Master Resolution authorizing the issuance of the Bonds. The resolution
also incorporates by reference the form of the Tax Exemption Certificate
and Continuing Disclosure Certificate.
October 7, 2008
Page 2
As we have discussed, this is a "master resolution" which will apply to all
future water revenue bonds or notes issued by the City. It also serves as the
"series resolution" for the Series 2008D Bonds. In addition, as permitted
by the Consent and Waiver executed by the Iowa Finance Authority, this
Resolution serves to amend and restate the 2007 City Council resolution
authorizing the outstanding SRF loan to conform to the new Master
Resolution, and provides that the outstanding SRF loan is deemed to be a
"Senior SRF Bond" under this new resolution. This will maintain the
parity status of the SRF loan as far as the net revenues are concerned, but
make clear that the SRF loan is not secured by the Reserve Fund being
created under this new Resolution.
There are blank spaces appearing in the form of Bond set out in the
resolution. These need not be completed but may be left blank as a guide
since different amounts, dates and percents will be inserted within the blank
spaces.
The resolution must be adopted by an affirmative vote equal to a majority
of the full Council membership.
3. Tax Exemption Certificate. The Tax Exemption Certificate sets out in
detail a number of facts, promises and obligations which must be met and
agreed to by the Council in order to maintain these Bonds as tax exempt.
This Certificate contains some blank spaces relating to matters of
information dependent upon the resale price of the Bonds which are not
known and available at this time. The information will be calculated and
added to this certificate prior to closing and completed copies of pages with
blank spaces will be provided to you. This certificate should be SIGNED
BUT NOT DATED. Please return the "Complete and Return" copy and
Purchaser's copy to our office prior to closing.
4. Continuing Disclosure Certificate. The form of Continuing Disclosure
Certificate, which is described in detail below, is included for approval by
the Council under the Resolution authorizing issuance. This Certificate
also should be signed by the Mayor and the Clerk but not dated. Please
return the "Complete and Return" copy and Purchaser's copy to us prior to
closing.
October 7, 2008
Page 3
B. Closing Certificates and Documents:
Original Bond Nos. 1-14, inclusive. The original Bonds are enclosed to be
executed by the Mayor and the Clerk in the spaces provided and impressed
with the City's seal. Tags are attached to Bond No. 1 showing where
signatures and seals should appear on all Bonds. Please have the
executed Bonds returned to us as soon as possible so that they can be
delivered to the Registrar for authentication and forwarded to DTC
prior to closing.
2. Delivery Certificate. Please note that the Delivery Certificate requires a
local bank official's signature on the last page. This certificate also
should be signed, BUT NOT DATED. Please return the "Complete and
Return" copy and Purchaser's copy to my attention prior to closing.
3. Transcript Certificate. This certificate is to be executed and sealed in the
manner indicated on the second page and may be dated at the time of
completion. Please return the "Complete and Return" copy to us prior to
closing.
4. Authentication Order. Please execute and date all copies and return the
"Complete and Return" copy and Registrar's copy to my attention prior to
closing.
5. Form 8038-G -- Information Return for Tax Exempt Governmental
Obli ations. Please sign, but do not date, and return the form to us prior to
closing.
Tax Exemption
The Tax Exemption Certificate is an important document and contains important
information concerning the calculated yield on the Bonds and a number of covenants and
obligations on the part of the City. This certificate should be retained as a part of the
City's permanent records. I will not attempt to summarize all of the matters which are
included in this certificate but I do want to point out some important ones.
Tax exemption is based in part upon the fact that the use of the facilities to be
acquired by the City with the proceeds will be for the benefit of the public and will not be
used in the private trade or business of any business or non-tax-exempt entity. The
properties acquired with the Bond proceeds must not be sold or diverted to any private or
nonpublic use unless the significance of that action is reviewed by bond counsel.
October 7, 2008
Page 4
In addition, the Tax Exemption Certificate sets forth the best knowledge and belief
which you have as of today concerning the timely expenditure of the proceeds as the City
reasonably expects expenditures to occur. If for any reason the City finds it will be
prevented from expending the Bond proceeds fully within three years, that matter should
be referred to us.
There are a number of other general promises and commitments by the City to
take or refrain from action, which are necessary to maintain the tax exemption of these
Bonds. You should recognize that these promises and commitments are required of the
City on an ongoing basis and that the possibility of some additional future action does
exist.
Continuing Disclosure Certificate
The Continuing Disclosure Certificate requires the City to provide annual financial
information and operating data to certain information repositories so long as the Bonds
are outstanding, and also to provide notice to those repositories if certain material events
occur which could impact the ability to pay principal and interest on the Bonds. The
information to be provided annually is for the most part the same sort of data which is
included in the Official Statement. The eleven (11) material events which must be
reported are detailed in the certificate, but other events which would be of concern to the
rating agencies or bondholders also should be considered for disclosure under the anti-
fraud provisions of the federal securities laws.
These disclosure requirements are ongoing and it will be important to designate an
appropriate contact person who will have a primary responsibility for preparing and
coordinating the filing of the annual financial information, operating data and any event
notices.
The penalties for violation of the rule fall ultimately on the issuer of the bonds,
because underwriters may be precluded from agreeing to underwrite or bid on bonds of
issuers who have not complied with their disclosure obligations. Failure to comply
therefore may result in fewer bids and ultimately no bids or the inability to secure an
underwriter for an issue.
October 7, 2008
Page 5
Closing Matters.
As you know, closing of this issue is scheduled to occur on or about November 4,
2008. At the time of closing, the "Purchaser's" copies of the above items and the original
Bonds will be delivered to the Purchaser of the Bonds in exchange for the agreed
purchase price. Our legal opinion also will be delivered to the Purchaser at that time.
Should you have any questions, or if we can be of any assistance in completing the
enclosed items, please don't hesitate to contact me.
Very truly yours,
William J. Noth
WJN:dc
encl.
cc: Tionna Pooler
Michael Maloney
Jenny Larson
DCORNELL/ 594248.1 /MSWord\10422.085
(This Notice to be posted)
NOTICE AND CALL OF PUBLIC MEETING
Governmental Body: The City Council of Dubuque, Iowa.
Date of Meeting: October 20, 2008.
Time of Meeting: 6:30 o'clock P.M.
Place of Meeting: Historic Federal Building, 350 West 6th Street, Dubuque,
Iowa.
PUBLIC NOTICE IS HEREBY GIVEN that the above mentioned governmental
body will meet at the date, time and place above set out. The tentative agenda for the
meeting is as follows:
$1,195,000 Water Revenue Bonds, Series 2008D
Resolution Appointing Paying Agent, Bond Registrar, and Transfer Agent,
Approving the Paying Agent and Bond Registrar and Transfer Agent
Agreement and Authorizing the Execution of the Agreement.
Such additional matters as are set forth on the additional 14 page(s) attached hereto.
This notice is given at the direction of the Mayor pursuant to Chapter 21, Code of
Iowa, and the local rules of the governmental body.
ity Clerk, Dubuque, Iowa
October 20, 2008
The City Council of Dubuque, Iowa, met in Regular session, in the Historic
Federal Building, 350 West 6th Street, Dubuque, Iowa, at 6:30 o'clock P.M., on the
above date. There were present Mayor Roy D. Buol, in the chair, and the following
named Council Members:
Karla Braig, Joyce Connors, Ric Jones, Kevin Lynch,
David Resnick, Dirk Voetberg
Absent: None
-1-
Council Member Lynch introduced the following resolution entitled
"RESOLUTION APPOINTING WELLS FARGO BANK, NATIONAL ASSOCIATION OF
DES MOINES, IOWA, TO SERVE AS PAYING AGENT, BOND REGISTRAR, AND
TRANSFER AGENT, APPROVING THE PAYING AGENT AND BOND REGISTRAR
AND TRANSFER AGENT AGREEMENT AND AUTHORIZING THE EXECUTION OF
THE AGREEMENT", and moved that the resolution be adopted. Council Member
Voetberg seconded the motion to adopt. The roll was called and the vote was,
AYES: Braig, Buol, Connors, Jones, Lynch, Resnick, Voetberg
NAYS: None
Whereupon, the Mayor declared the resolution duly adopted as follows:
RESOLUTION NO. 378-08
RESOLUTION APPOINTING WELLS FARGO BANK,
NATIONAL ASSOCIATION OF DES MOINES, IOWA, TO
SERVE AS PAYING AGENT, BOND REGISTRAR, AND
TRANSFER AGENT, APPROVING THE PAYING AGENT
AND BOND REGISTRAR AND TRANSFER AGENT
AGREEMENT AND AUTHORIZING THE EXECUTION OF
THE AGREEMENT
WHEREAS, pursuant to the provisions of Chapter 75 of the Code of Iowa,
$1,195,000 Water Revenue Bonds, Series 2008D, dated the date of delivery, have been
sold at public sale and action should now be taken to provide for the maintenance of
records, registration of certificates and payment of principal and interest in connection
with the issuance of the bonds; and
WHEREAS, this Council has deemed that the services offered by Wells Fargo
Bank, National Association of Des Moines, Iowa, are necessary for compliance with
rules, regulations, and requirements governing the registration, transfer and payment of
registered bonds; and
WHEREAS, a Paying Agent, Bond Registrar and Transfer Agent Agreement
(hereafter "Agreement") has been prepared to be entered into between the City and
Wells Fargo Bank, National Association.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
DUBUQUE, IOWA:
-2-
WHEREAS, a Paying Agent, Bond Registrar and Transfer Agent Agreement
(hereafter "Agreement") has been prepared to be entered into between the City and
Wells Fargo Bank, National Association.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
DUBUQUE, IOWA:
Section 1. That Wells Fargo Bank, National Association of Des Moines, Iowa, is
hereby appointed to serve as Paying Agent, Bond Registrar and Transfer Agent in
connection with the issuance of $1,195,000 Water Revenue Bonds, Series 2008D,
dated the date of delivery.
Section 2. That the Agreement with Wells Fargo Bank, National Association of
Des Moines, Iowa, is hereby approved and that the Mayor and Clerk are authorized to
sign the Agreement on behalf of the City.
PASSED AND APPROVED this 20th day of October, 2008.
Roy D. Boul, Mayor
ATTEST:
Jeanne F. Schneider, CMC
City Clerk
-3-
CIG-3
CERTIFICATE
STATE OF IOWA )
SS
COUNTY OF DUBUQUE )
I, the undersigned City Clerk of Dubuque, Iowa, do hereby certify that attached is
a true and complete copy of the portion of the corporate records of the Municipality
showing proceedings of the Council, and the same is a true and complete copy of the
action taken by the Council with respect to the matter at the meeting held on the date
indicated in the attachment, which proceedings remain in full force and effect, and have
not been amended or rescinded in any way; that meeting and all action thereat was duly
and publicly held in accordance with a notice of meeting and tentative agenda, a copy of
which was timely served on each member of the Council and posted on a bulletin board
or other prominent place easily accessible to the public and clearly designated for that
purpose at the principal office of the Council (a copy of the face sheet of the agenda
being attached hereto) pursuant to the local rules of the Council and the provisions of
Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at
least twenty-four hours prior to the commencement of the meeting as required by law
and with members of the public present in attendance; I further certify that the
individuals named therein were on the date thereof duly and lawfully possessed of their
respective city offices as indicated therein, that no Council vacancy existed except as
may be stated in the proceedings, and that no controversy or litigation is pending,
prayed or threatened involving the incorporation, organization, existence or boundaries
of the City or the right of the individuals named therein as officers to their respective
positions.
WITNESS my hand and the seal of the Municipality hereto affixed this 21St day of
October, 2008.
_~° ~,
ity Clerk, Dubuque, Iowa
SEAL
DCORNELL\594222.1\WP\10422.085
-4-
(This Notice to be posted)
NOTICE AND CALL OF PUBLIC MEETING
Governmental Body: The City Council of Dubuque, Iowa.
Date of Meeting: October 20, 2008.
Time of Meeting: 6:30 o'clock P.M.
Place of Meeting: Historic Federal Building, 350 West 6th Street, Dubuque,
Iowa.
PUBLIC NOTICE IS HEREBY GIVEN that the above mentioned governmental
body will meet at the date, time and place above set out. The tentative agenda for said
meeting is as follows:
Master Resolution authorizing and providing for the issuance and securing
the payment of Water Revenue Bonds by the City of Dubuque, Iowa
Such additional matters as are set forth on the additional 14 page(s) attached hereto.
This notice is given at the direction of the Mayor pursuant to Chapter 21, Code of
Iowa, and the local rules of said governmental body.
~~~
ity Clerk, Dubuque, Iowa
October 21, 2008
The City Council of Dubuque, Iowa, met in Regular session, in the Historic
Federal Building, 350 West 6th Street, Dubuque, Iowa, at 6:30 o'clock P.M., on the
above date. There were present Mayor Roy D. Buol, in the chair, and the following
named Council Members:
Karla Braig, Joyce Connors, Ric Jones, Kevin Lynch,
David Resnick, Dirk Voetberg
Absent: None
***:~*~*
Council Member Lynch introduced the following Resolution entitled "MASTER
RESOLUTION RELATING TO THE ISSUANCE OF WATER REVENUE BONDS BY
THE CITY OF DUBUQUE UNDER THE PROVISIONS OF CHAPTER 384 OF THE
CODE OF IOWA, AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND
SECURING THE PAYMENT OF $1,195,000 WATER REVENUE BONDS, SERIES
2008D, AND PROVIDING FOR A METHOD OF PAYMENT THEREOF, FUNDING A
DEBT SERVICE RESERVE FUND, AND RELATED MATTERS" and moved that it be
adopted. Council Member Voetberg seconded the motion to adopt, and the roll being
called thereon, the vote was as follows:
AYES: Braig, Buol, Connors, Jones, Lynch, Resnick, Voetberg
NAYS: None
Whereupon, the Mayor declared said Resolution duly adopted as follows:
RESOLUTION NO. 379-08
MASTER RESOLUTION RELATING TO THE ISSUANCE OF WATER
REVENUE BONDS BY THE CITY OF DUBUQUE UNDER THE PROVISIONS
OF CHAPTER 384 OF THE CODE OF IOWA, AUTHORIZING AND PROVIDING
FOR THE ISSUANCE AND SECURING THE PAYMENT OF $1,195,000 WATER
REVENUE BONDS, SERIES 2008D, AND PROVIDING FOR A METHOD OF
PAYMENT THEREOF, FUNDING A DEBT SERVICE RESERVE FUND, AND
RELATED MATTERS
WHEREAS, the City Council of the City of Dubuque, Iowa (the "City") has
heretofore established charges, rates and rentals for services which are and will
continue to be collected as system revenues of the Municipal Water Utility System; and
WHEREAS, the City of Dubuque proposes to issue the Series 2008D Bonds
hereinafter described to pay costs of water main replacements and repairs, construction
of water main extensions, and the acquisition and installation of pump station radio
communications equipment and facilities; and
WHEREAS, the notice of intention of the Issuer to take action for the issuance of
not to exceed $1,350,000 Water Revenue Bonds for the foregoing purposes has heretofore
been duly published and no objections to such proposed action have been filed; and
WHEREAS, pursuant to the provisions of Chapter 75 of the Code of Iowa, the
above mentioned Bonds were heretofore sold at public sale and action should now be
taken to issue said Bonds conforming to the terms and conditions of the best bid received
at the advertised public sale.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF DUBUQUE, AS FOLLOWS:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. The following terms shall have the following meanings
in this Resolution unless the text expressly or by necessary implication requires otherwise:
"Authorized Denominations" shall mean $5,000 or any integral multiple thereof.
"Beneficial Owner" shall mean the person in whose name such Bond is recorded
as the beneficial owner of a Bond by a Participant on the records of such Participant
or such person's subrogee.
"Bond Principal and Interest Fund" means the fund by that name established in
Section 6.5 of this Resolution.
"Bond Register" means the books maintained by the Registrar for the registration,
transfer and exchange of Bonds.
"Bondholder" means the registered owner of one or more Bonds.
"Bonds" means any water revenue bonds; notes or other obligations authorized by
and authenticated and delivered pursuant to this Resolution and any Series
Resolution, including the Series 2008D Bonds, any other Senior Bonds, and any
Subordinate Bonds.
-4-
"City Clerk" means the individual presently serving as the City Clerk of the Issuer,
and any successor who may hereafter serve as such officer or be charged with
substantially the same duties and responsibilities.
"Code" means the Internal Revenue Code of 1986, as amended, and the applicable
regulations of the Treasury Department proposed or promulgated thereunder.
"Continuing Disclosure Certificate" shall mean that certain Continuing
Disclosure Certificate executed by the Issuer and dated the date of issuance and
delivery of the Series 2008D Bonds, as originally executed and as it may be
amended from time to time in accordance with the terms thereof.
"Costs of Issuance" means issuance costs with respect to any series of Bonds,
including but not limited to the following: underwriters' spread (whether realized
directly or derived through purchase of such Bonds at a discount below the price at
which they are expected to be sold to the public); Credit Facility fees; trustee's fees;
counsel, fees (including bond counsel, underwriter's counsel, and any other
specialized counsel fees incurred in connection with the borrowing); fees of any
Financial Advisor to the Issuer incurred in connection with the issuance of the
Bonds; Rating Agency fees; escrow agent and paying agent fees; accountant fees
and other expenses related to issuance of the Bonds; printing costs (for the Bonds
and of the preliminary and final official statement relating to the Bonds); and other
fees and expenses of the Issuer incurred in connection with the issuance of the
Bonds.
"Credit Facility" means any letter of credit, insurance policy, guaranty, surety
bond, standby bond purchase agreement, line of credit, revolving credit agreement,
or similar obligation, arrangement, or instrument issued by a bank, insurance
company, or other financial institution which is used by the Issuer to perform one or
more of the following tasks: (i} enhancing the, Issuer's credit by assuring owners of
any of the Bonds that Principal of and interest on such Bonds will be paid promptly
when due; (ii) providing liquidity for the owners of Bonds through undertaking to
cause Bonds to be bought from the owners thereof when submitted pursuant to an
arrangement prescribed by the Series Resolution relating to such Bonds; or (iii)
remarketing any Bonds so submitted to the Issuer or Credit Facility Provider for
purchase (whether or not the same Credit Facility Provider is remarketing the
Bonds).
"Credit Facility Agreement" means an agreement between the Issuer and a Credit
Facility Provider pursuant to which the Credit Facility Provider issues a Credit
Facility and may include the promissory note or other instrument evidencing the
-5-
Issuer's obligations to a Credit Facility Provider pursuant to a Credit Facility
Agreement.
"Credit Facility Provider" means any issuer of a Credit Facility then in effect for
all or part of the Bonds. Whenever in a Series Resolution the consent of the Credit
Facility Provider is required, such consent shall only be required from the Credit
Facility Provider whose Credit Facility is issued with respect to the series of Bonds
for which the consent is required.
"Debt Service Requirement" shall mean the total Principal and interest coming
due on Senior Bonds, or all Bonds, as applicable, whether at maturity, on any
Interest, Payment Date, or upon mandatory sinking fund redemption in any specified
period; provided, however, that the Debt Service Requirement with respect to any
Bonds shall mean the net amount of principal and interest coming due on such
Bonds after taking into account any so-called "subsidy" (i.e., the amount of
anticipated investment earnings which will accrue on any reserve- account relating
to the Bonds and which will reduce the debt service payments of the Issuer with
respect to such Bonds). In addition:
(a) With respect to any Bonds secured by a Credit Facility, Debt ,Service
Requirement shall include (i) any upfront or periodic commission or
commitment fee obligations with respect to such Credit Facility, (ii) the
outstanding amount of any Reimbursement Obligation owed to the
applicable Credit Facility Provider and interest thereon, and (iii) any
remarketing agent fees.
(b) The Principal of and interest on Bonds shall be excluded from the
determination of Debt Service Requirement to the extent that (1) the same
were or are expected to be paid with amounts on deposit on the date of
calculation (or Bond proceeds to be deposited on the date of issuance of
proposed Bonds) in the Project Fund, the Debt Service Reserve Fund or a
similar fund for Subordinate Bonds or (2) cash or non-callable Government
Obligations are on deposit in an irrevocable escrow or trust account in
accordance with Section 9.1 hereof (or a similar escrow or trust account for
Subordinate Bonds) and such amounts (including, where appropriate, the
earnings or other increment to accrue thereon) are required to be applied to
pay Principal or interest and are sufficient to pay such Principal or interest.
"Debt Service Reserve Fund" means the fund by that name established in Section
6.6 of this Resolution.
-6-
"Debt Service Reserve Requirement".means the amount determined to be a
reasonable reserve for the payment of Principal of and interest on Senior Bonds
(other than Senior SRF Bonds), which amount shall be the least of (a) 10% of the
stated Principal amount of the Senior Bonds (other than Senior SRF Bonds}, (b) the
maximum annual Principal and interest requirements on the Senior Bonds (other
than Senior SRF Bonds} (determined as of the issue date of each series of such
Senior Bonds), or (c) 125% of the average annual Principal and interest
requirements on the Senior Bonds (other than Senior SRF Bonds) (determined as of
the issue date of each series of such Senior Bonds}. If the aggregate initial offering
price of a series of Bonds to the public is less than 98% or more than 102% of par,
such offering price shall be used in lieu of the stated Principal amount.
Notwithstanding the foregoing, the Debt Service Reserve Requirement, if any, in
connection with any Senior SRF Bonds or any Subordinate Bonds shall be as
provided in the Series Resolution authorizing the issuance of such Senior SRF
Bonds or such Subordinate Bonds.
"Depository Bonds" shall mean the Bonds as issued in the form of one global
certificate for each maturity, registered in the Bond Register maintained by the
Registrar in the name of DTC or its nominee.
"DTC" shall mean The Depository Trust Company, New York, New York, a
limited purpose trust company, or any successor book-entry securities depository
appointed for the Bonds.
"Financial Advisor" means a financial advisory firm appointed by the Governing
Body for the purpose of assisting the Issuer with the structuring and offering of
Bonds, SRF Bonds, Subordinate Bonds or other obligations.
"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
this 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.
"Governing Body" shall mean the City Council of the Issuer, or its successor in
function with respect to the operation and control of the System.
"Government Obligations" means (a) direct obligations of the United States of
America for the full and timely payment of which the full faith and credit of the
-7-
United States of America is pledged or (b) obligations issued by an agency
controlled or supervised by and acting as an instrumentality of the United States of
America, the full and timely payment of the principal of and the interest on which is
fully and unconditionally guaranteed as a full faith and credit obligation of the
United States of America (including any securities described in (a) or (b) issued or
held in book-entry form on the books of the Department of the Treasury of the
United States of America), which obligations, in either case, (i) are not subject to
redemption or prepayment prior to maturity except at the option of the holder of
such obligations and (ii) may include U.S. Treasury Trust Receipts.
"Gross Revenues" shall mean all rents, profits, fees, charges and income derived
directly from the operation of the System, including Investment Earnings.
"Independent Auditor" shall mean an independent fine of certified public
accountants or the Auditor of the State of Iowa.
"Interest Payment Date" means each date on which interest is to become due on
any Bonds, as established in the Series Resolution for such Bonds, and with respect
to the Series 2008D Bonds, shall be as specified in Section 2.2 hereof.
"Investment Earnings" means all interest received on and profits derived from
investments of moneys in all funds and accounts of the Issuer established
hereunder, other than investments derived from or with respect to (i) all funds and
accounts established in connection with SRF Bonds and (ii) those funds or accounts
established within or as part of the Project Fund or the Rebate Fund.
"Issuer" shall mean the City of Dubuque, Iowa.
"Maximum Annual Debt Service Requirement" means the maximum amount of
Debt Service Requirements as computed for the then current or any future Fiscal
Year.
"Net Revenues" shall mean Gross Revenues of the System after provision for
payment of all Operation and Maintenance Expenses.
"Operation and Maintenance Expenses" shall mean the reasonable necessary
current expenses paid or accrued in operating and maintaining the System as
determined in accordance with generally accepted accounting principles, including
but not limited to (a) costs, including a reserve for bad debts of collecting Gross
Revenues and making refunds; (b) engineering, audit reports, legal and
administrative expenses; (c) salaries, wages, benefits and other compensation; (d)
_g_
costs of routine repairs, replacements and renewals; (e) costs of utility services; (fj
general administrative overhead, marketing or advertising; (g} losses from the sale,
abandonment, reclassification or other disposition of any property of the System;
(h) material and supplies used in the ordinary course of business; (i) contractual and
professional services; (j) costs of insurance and fidelity bonds; (k) costs of carrying
out provisions of the Resolution; (1) expenditures which do not exceed the standards
for capitalization under the Issuer's accounting basis; and (m) all other routine costs
and expenses. The term "Operation and Maintenance Expense" shall not include
any allowance for depreciation or amortization, any debt service or the costs
.associated with early extinguishment of debt, nor any other accounting charges
which are not payable from Gross Revenues.
"Operation and Maintenance Fund" means the fund by that name established in
Section 6.4 of this Resolution.
"Original Purchaser" shall mean the purchaser of the Series 2008D Bonds from
the Issuer at the time of their original issuance.
"Outstanding" shall mean, as of a particular date, all such Bonds theretofore and
thereupon delivered except: (a) any such Bond cancelled by or on behalf of the
Issuer on or before said date; (b) any such Bond defeased pursuant to Section 9.1 of
this Resolution or of the Series Resolution authorizing its issuance, or otherwise
defeased as permitted by applicable law; and (c) any such Bond in lieu of or in
substitution for which another bond shall have been delivered pursuant to the Series
Resolution authorizing the issuance of such Bond.
"Outstanding SRF Loan" shall mean the $1,037,000 Water Revenue Capital
Loan I~Tote, Series 2007, dated October 18, 2007 and authorized for issuance
under the Prior Resolution. The Outstanding SRF Loan shall be deemed to be
a Senior SRF Bond under this Resolution.
"Participants" shall mean those broker-dealers, banks and other financial
institutions for which DTC holds Bonds as securities depository.
"Paying Agent" shall mean Wells Fargo Bank, National Association, or such
successor as may be approved by the Issuer as provided herein and who shall carry
out the duties prescribed herein as the Issuer's agent to provide for the payment of
principal of and interest on the Bonds as the same shall become due.
-9-
"Permitted Investments" shall mean those obligations in which the Issuer is
permitted to invest moneys of the Issuer under applicable law and the Issuer's then-
prevailing Investment Policy, as amended from time to time.
"Principal" means the principal amount of such Bond.
"Principal Maturity Date" means each date on which Principal is to become due
on any Bonds, by maturity or mandatory sinking fund redemption, as established in
the Series Resolution for such Bonds.
"Prior Resolution" means Resolution No. 490-07 of the City Council approved
on October 1, 2007, authorizing the issuance of the Outstanding SRF Loan.
"Project" shall mean the acquisition, construction, reconstruction, extension,
improvement, repairing and equipping of any part of the System, in whole or in part
with the proceeds of a series of Bonds.
"Project Costs" with respect to any Project shall mean costs including the
following:
(a) obligations of the Issuer for labor and materials in connection with
the construction, installation and equipping of the Project;
(b) the cost of contract bonds and insurance of all kinds that may be
required or necessary during the construction of the Project;
(c) all costs of architectural and engineering services, including the costs
of the Issuer for test borings, surveys, estimates, plans and specifications and
preliminary investigation therefor, and for supervising construction, as well
as for the performance of all other duties required by or consequent upon the
proper construction of the Project;
(d) .all expenses incurred in connection with the issuance of Bonds,
including without limitation compensation and expenses of any trustee,
Registrar and Paying Agents, expenses of the Issuer, legal and accounting
expenses and fees, costs of printing and engraving, recording and filing fees,
compensation of underwriters, Rating Agency fees, costs of financial
services, and accrued interest on the Bonds;
- l0-
(e) all sums required to reimburse the Issuer for advances made by it for
any of the above items or for any other costs incurred and for work done,
whether before or after the adoption of the Series Resolution, which are
properly chargeable to the Project; and
(f) all other components of cost of labor, materials, machinery, and
equipment and financing charges attributable to the Project to the extent
permitted by law.
"Project Fund" shall mean the fund by that name established in Section 5.1 of this
Resolution.
"Rating" means a rating in one of the categories by a Rating Agency, disregarding
pluses, minuses, and numerical gradations.
"Rating Agencies" or "Rating Agency" means Fitch, Inc., Moody's Investors
Service, Inc., and Standard & Poor's, a division of The McGraw-Hill Companies,
Inc., or any successors thereto and any other nationally recognized credit rating
agency then maintaining a rating on any Bonds at the request of the Issuer. If at any
time a particular Rating Agency does not have a rating outstanding with respect to
the relevant Bonds, then a reference to Rating Agency or Rating Agencies shall not
include such Rating Agency.
"Rebate Fund" means the fund by that name established in Section 6.10 of this
Resolution.
"Registrar" shall mean Wells Fargo Bank, National Association, or such successor
as may be approved by the Issuer as provided herein and who shall carry out the
duties prescribed herein with respect to maintaining a register of the owners of the
Bonds. Unless otherwise .specified, the Registrar shall also act as Transfer Agent
for the Bonds.
"Reimbursement Obligation" means the obligation of the Issuer to directly-
reimburse any Credit Facility Provider for amounts paid by such Credit Facility
Provider under a Credit Facility, whether or not such obligation to so reimburse is
evidenced by a promissory note or other similar instrument.
"Representation Letter" shall mean the Blanket Issuer Letter of Representations
executed by the Issuer and previously delivered to DTC.
-11-
"Resolution" shall mean this Master Resolution of the Governing Body, as it may
from time to time be modified, supplemented or amended by Supplemental
Resolutions.
"Revenue Fund" means the fund by that name established in Section 6.2 of this
Resolution for the deposit of all Gross Revenues.
"Senior Bonds" means the Series 2008D Bonds and any other Bonds, including
Senior SRF Bonds, issued with a right to payment and secured by a lien on the Net
Revenues on a parity with the Series 2008D Bonds pursuant to Section 8.3 (except
with respect to any Credit Facility which may be available only to one or more
series of Senior Bonds and except that Senior SRF Bonds shall not be secured. by
the Debt Service Reserve Fund).
"Senior SRF Bonds" means the Outstanding SRF Loan and any other SRF Bonds
which are issued as Senior Bonds (except with respect to any Credit Facility which
may be available only to one or more series of Senior Bonds and except that Senior
SRF Bonds shall not be secured by the Debt Service Reserve Fund).
"Series 2008D Bonds" shall mean the $1,195,000 Water Revenue Bonds, Series
2008D, dated the date of delivery, authorized to be issued pursuant to this
Resolution.
"Series 2008D Costs of Issuance Account" means the account by that name
within the Project Fund established in Section 5.1 of this Resolution.
"Series 2008D Projects" means the water main replacements and repairs,
construction of water main extensions, and the acquisition and installation of pump
station radio communications equipment and facilities being funded with the
proceeds of the Series 2008D Bonds.
"Series Resolution" means a resolution or resolutions of the Governing Body
(which may be supplemented by one or more resolutions) to be adopted prior to and
authorizing the issuance and delivery of any series of Bonds. This Resolution shall
constitute the Series Resolution for the Series 2008D Bonds and the Outstanding
SRF Loan. Such a Series Resolution as supplemented shall establish the date or
dates of the pertinent series of Bonds, the schedule of maturities of such Bonds, the
name of the purchaser(s) of such series of Bonds, the purchase price thereof, the
rate or rates of interest to be borne thereby, whether fixed or variable, the interest
payment dates for such Bonds, the terms and conditions, if any, under which such
Bonds may be made subject to redemption (mandatory or optional) prior to
-12-
maturity, the form of such Bonds, and such other details as the Issuer may
determine.
"Sinking Fund" shall mean the Bond Principal and Interest Fund established in
Section 6.5 of this Resolution.
"SRF Bonds" shall mean such bonds, notes or other obligations as may be issued
in connection with the Issuer's participation in the Iowa Drinking Water State
Revolving Fund Program administered by the Iowa Finance Authority and Iowa.
Department of Natural Resources, which SRF Bonds may be Senior SRF Bonds or
Subordinate SRF Bonds.
"State" shall mean the State of Iowa.
"Subordinate Bond Fund" means the fund by that name established in Section 6.7
of this Resolution.
"Subordinate Bonds" means Bonds, including Subordinate SRF Bonds, issued
with a right to payment from the Net Revenues and secured by a lien on the Net
Revenues expressly junior and subordinate to the Senior Bonds.
"Subordinate SRF Bonds" means SRF Bonds which are issued as Subordinate
Bonds.
"Supplemental. Resolution" means any Series Resolution and any modification,
amendment or supplement to this Resolution (other than a Series Resolution).
"Surplus Fund" means the fund. by that name established in Section 6.8 of this
Resolution.
"System" shall mean and. include the municipal water system utility of the Issuer
and all properties of every nature hereinafter owned by the Issuer and comprising
part of or used as a part of the System, including all water treatment facilities,
storage facilities, pumping stations, water main extensions, and all related property
and improvements and extensions to the same, all related real and personal property
of the Issuer and all related appurtenances, contracts, leases, franchises and other
intangibles of the Issuer.
"Tax Exemption Certificate" shall mean the Tax Exemption Certificate executed
by the Treasurer and delivered at the time of issuance and delivery of the Series
2008D Bonds.
-13-
"Treasurer" shall mean the City Treasurer or such other officer of the Issuer as
s11a11 succeed to the same duties and responsibilities with respect to the recording
and payment of the Bonds issued hereunder.
"U.S. Treasury Trust Receipts" means receipts or certificates which evidence an
undivided ownership interest in the right to the payment of portions of the principal
of or interest on obligations described in clauses (a) or (b) of the term Government
Obligations, provided that such obligations are held by a bank or trust company
organized under the laws of the United States acting as custodian of such
obligations, in a special account separate from the general assets of such custodian.
ARTICLE II
THE BONDS
Section 2.1. Authority. The Bonds authorized by this Resolution shall be issued
pursuant to Chapter 384 of the Code of Iowa, and in compliance with all applicable
provisions of the Constitution and laws of the State of Iowa. The Bonds may be issued
and sold from time to time in one or snore series, inay be designated "City of Dubuque,
Iowa Water Revenue Bonds," and shall be in substantially the form set forth in the related
Series Resolution, but. such variations, omissions, substitutions, and insertions may be
made therein, and such particular series designation,- legends, or text may be endorsed
thereon, as may be necessary or appropriate to conform to and as required or permitted by
this Resolution and any Series Resolution or as maybe necessary or appropriate to comply
with applicable requirements of the Code.
The Series 2008D Bonds authorized pursuant to Section 2.2 shall constitute the
initial series of Bonds issued and delivered under, and secured by, this Resolution. As set
forth in Section 8.8(b) hereof, the provisions of the Prior Resolution are hereby amended
and restated to conform to the provisions of this Resolution, and the Outstanding SRF
Loan shall be deemed to be a Senior SRF Bond under the terms hereof. Additional Senior
Bonds may be issued from time to time as provided in, and subject to the limitations set
forth in Section 8.3. Subordinate Bonds may be issued from time to time as provided in,
and subject to the limitations set forth in, Section 8.4.
Unless otherwise provided in a Series Resolution, each authenticated Bond shall
bear interest .from its dated date. Each Bond shall bear interest on overdue Principal at the
rate borne by such Bond until the_Principal balance thereof is paid in full.
-14-
Unless otherwise provided in a Series Resolution, the Bonds shall be issued in fully
registered form in Authorized Denominations and shall be dated as provided in the
pertinent Series Resolution.
The Principal of, premium, if any, and interest on the Bonds shall be payable in any
coin or currency of the United States of America which, at the respective dates of payment
thereof, is legal tender for the payment of public and private debts.
The. Bonds and the Registrar's Certificate of Authentication shall be in substantially
the form set forth in the Series Resolution pursuant to which such series of Bonds are
issued.
Section 2.2. Series 2008D Bonds -Authorization and Purpose. There are
hereby authorized to be issued, negotiable, serial, fully registered $1,195,000 Water
Revenue Bonds, Series 2008D, dated the date of delivery, for the purpose of paying costs
of water main replacements and repairs, construction of water main extensions, and the
acquisition and installation of pump station radio communications equipment and
facilities, funding the Debt Service Reserve Requirement with respect thereto, and to pay
related Costs of Issuance. The Series 2008D Bonds shall be designated "CITY OF
DUBUQUE, IOWA WATER REVENIJE BONDS, SERIES 2008D", and bear interest
from the date thereof, until payment thereof, at-the office of the Paying Agent, said
interest payable on June 1, 2009 and semiannually thereafter on the 1st day of June and
December in each year until maturity at the rates hereinafter provided.
The Series 2008D Bonds and the Registrar's Certificate of Authentication shall be
in substantially the form set forth in Exhibit. A attached hereto, with such variations,
omissions, substitutions and insertions as are required or permitted by this Resolution.
The Series 2008D Bonds 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 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, wire transfer or automated clearing house system transfer to the registered
owner of the Bond. The Series 2008D Bonds shall be issued in Authorized
Denominations and shall mature and bear interest as follows:
-15-
Interest Principal Maturity
Rate Amount June 1st
3.00% $ 70,000 2010
3.25 70,000 2011
3.50 70,000 2012
3.75 75,000 2013
4.00 75,000 2014
4.15 80,000 2015
4.30 ~ 80,000 2016
4.45 85,000 2017
4.60 90,000 2018
4.70 90,000 2019
4.80 95,000 2020
4.90 100,000 2021
4.95 105,000 2022
5.00 110,000 2023
Section 2.3. Issuance of Bonds in Book-Entry Form; Replacement Bonds.
(a) Notwithstanding the other provisions of this Resolution regarding
registration, ownership, transfer, payment and exchange of the Bonds, unless the Issuer
determines in a Series Resolution to permit the exchange of Depository Bonds for Bonds.
in the Authorized Denominations, the Bonds shall be issued as Depository Bonds in
denominations of the entire principal amount of each maturity of Bonds (or, if a portion of
said principal amount is prepaid, said principal amount less the prepaid amount); and such
Depository Bonds shall be registered in the name of Cede & Co., as nominee of DTC.
Payment ofsemi-annual interest for any Depository Bond shall be made by wire transfer
or New York Clearing House or equivalent next day funds to the. account of Cede & Co.
on the interest payment date for the Bonds at the address indicated in or pursuant to the
Representation Letter.
(b) With respect to Depository Bonds, neither the Issuer nor the Paying Agent
shall have any responsibility or obligation to any Participant or to any Beneficial Owner.
Without limiting the immediately preceding sentence, neither the Issuer nor the Paying
Agent shall have any responsibility or obligation with respect to (i) the accuracy of the
records of DTC or its nominee or of any Participant with respect to any ownership interest
in the Bonds, (ii) the delivery to any Participant, any Beneficial Owner or any other
person,' other than DTC or its nominee, of any notice with respect to the Bonds, (iii} the
payment to any Participant, any Beneficial Owner or any other person, other than DTC or
-16-
its nominee, of any amount with respect to the principal of, premium, if any, or interest on
the Bonds, or (iv} the failure of DTC to provide any information or notification on behalf
of any Participant or Beneficial Owner.
The Issuer and the Paying Agent may treat DTC or its nominee as, and deem DTC
or its nominee to be, the absolute owner of each Bond for the purpose of payment of the
principal. of, premium, if any, and interest on such Bond, for the purpose of all other
matters with respect to such Bond, for the purpose of registering transfers with respect to
such Bonds, and for all other purposes whatsoever (except for the giving of certain
Bondholder consents, in accordance with the practices and procedures of DTC as may be
applicable thereto). The Paying Agent shall pay all principal of, premium, if any, and
interest on the Bonds only to or upon the order of the Bondholders as shown on the Bond
Register, and all such payments shall be valid and effective to fully satisfy and discharge
the Issuer's obligations with respect to the principal of, premium, if any, and interest on
the Bonds to the extent so paid. Notwithstanding the provisions of this Resolution to the
contrary (including without limitation those provisions relating to the surrender of Bonds,
registration thereof, and issuance in Authorized Denominations), as long as the Bonds are
Depository Bonds, full effect shall be given to the Representation Letter and the
procedures and practices of DTC thereunder, and the Paying Agent shall comply
therewith.
(c) Upon (i) a determination by the Issuer that DTC is no longer able to carry
out its functions or is otherwise determined unsatisfactory, or (ii) a determination by DTC
that the Bonds are no longer eligible for its depository services or (iii} a determination by
the Paying Agent that DTC has resigned or discontinued its services for the Bonds, if such
substitution is authorized by law, the Issuer shall (A) designate a satisfactory substitute
depository as set forth below or, if a satisfactory substitute is not found, (B} provide for
the exchange of Depository Bonds for replacement Bonds in Authorized Denominations.
(d) To the extent authorized by law, if the Issuer determines to provide for the
exchange of Depository Bonds for Bonds in Authorized Denominations, the Issuer shall
so notify the Paying Agent and shall provide the Registrar with a supply of executed
unauthenticated Bonds to be so exchanged. The Registrar shall thereupon notify the
owners of the Bonds and provide for such exchange, and to the extent that the Beneficial
Owners are designated as the transferee by the owners, the Bonds will be delivered in
appropriate form, content and Authorized Denominations to the Beneficial Owners, as
their interests appear.
(e) Any substitute depository shall be designated in writing by the Issuer to the
Paying Agent. Any such substitute depository shall be a qualified and registered "clearing
agency" as provided in Section 17A of the Securities Exchange Act of 1934, as amended.
-17-
The substitute depository shall provide for (i) immobilization of the Depository Bonds,
(ii) registration and transfer of interests in Depository Bonds by book entries made on
records of the depository or its nominee and (iii) payment of principal of, premium, if any,
and interest on the Bonds in accordance with and as such interests may appear with
respect to such book entries.
Section 2.4. Registration of Bonds; Appointment of Registrar; Transfer;
ownership; and Cancellation.
(a) Registration. The ownership of Bonds may be transferred only by the
making of an entry upon the books kept for the registration and transfer of ownership of
the Bonds, and in no other way. Wells Fargo Bank, National Association is hereby
appointed as Bond Registrar for the Series 2008D Bonds under the terms of this
Resolution and under the provisions of a separate agreement with the Issuer filed herewith
which is made a part hereof by this reference. Registrar shall maintain the books of the
Issuer for the registration of ownership of the Bonds for the payment of principal of and
interest on the Bonds as provided in this Resolution or the applicable Series Resolution.
All Bonds shall be negotiable as provided in Article 8 of the Uniform Commercial Code,
subject to the provisions for registration and transfer contained in the Bonds and in this
Resolution or the applicable Series Resolution.
(b) Transfer. The ownership of any Bond may be transferred only upon the
Bond Register kept for the registration and transfer of Bonds and only upon surrender
thereof at the office of the Registrar together with an assignment 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 Bond (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 Bond
Register the information pertaining to the registered owner required above. Upon the
transfer of any such Bond, a new fully registered Bond, of any denomination or
denominations permitted by this Resolution or the applicable Series Resolution in
aggregate principal amount equal to the unmatured and unredeemed principal amount of
such transferred fully registered Bond, and bearing interest at the same rate and maturing
on the same date or dates shall be delivered by the Registrar.
(c) Registration of Transferred Bonds. In all cases of the transfer of the Bonds,
the Registrar shall register the Bonds, at the earliest practicable time, on the Bond Register
in accordance with the provisions of this Resolution or the applicable Series Resolution.
-18-
(d) Ownership. As to.any Bond, the person in whose name the ownership of the
same shall be registered on the Bond Register 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 Bonds 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 Bond, including the interest thereon, to the extent of the ruin or sums so paid.
(e) Cancellation. All Bonds which have been redeemed shall not be reissued
but shall be cancelled by the Registrar. All Bonds which are cancelled by the Registrar
shall be destroyed and a certificate of the destruction thereof shall be furnished promptly
to the Issuer; provided that if the Issuer shall so direct, the Registrar shall forward the
cancelled Bonds to the Issuer.
(f) Non-Presentment of Bonds. In the event any payment check representing
payment of principal of or interest on the Bonds is returned to the Paying Agent or is not
presented for payment of principal at the maturity or redemption date, if funds sufficient
to pay such principal of or interest on Bonds 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 Bonds 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 Bonds
who shall thereafter be restricted exclusively to such funds for any claim of whatever
nature on his part under this Resolution or the applicable Series Resolution or on, or with
respect to, such interest or Bonds. 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 or the applicable Series
Resolution by the owners of such interest or Bonds of whatever nature shall be made upon
the Issuer.
Section 2.5. Reissuance of Mutilated, Destroyed, Stolen or Lost Bonds. In case
any outstanding Bond shall become mutilated or be destroyed, stolen or lost, the Issuer
shall at the request of Registrar authenticate and deliver a new Bond of like tenor and
amount as the .Bond so mutilated, destroyed, stolen or lost, in exchange and substitution
for such mutilated Bond to Registrar, upon surrender of such mutilated-Bond, or in lieu of
and substitution for the Bond destroyed, stolen or lost, upon filing with the Registrar
evidence satisfactory to the Registrar and Issuer that such Bond has been destroyed, stolen
or lost and proof of ownership thereof, and upon furnishing the Registrar and Issuer with
satisfactory indemnity and complying with such other reasonable regulations as the Issuer
-19-
or its agent may prescribe and paying such expenses as the Issuer may incur in connection
therewith.
Section 2.6. Record Date. Payments of principal and interest; otherwise than
upon full redemption, made in respect of any Bond, 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 preceding the payment date. All such payments shall fully discharge the
obligations of the Issuer in respect of such Bonds to the extent of the payments so made.
Payment of principal shall only be made upon surrender of the Bond to the Paying Agent.
Section 2.7. Execution, Authentication and Delivery of the Series 2008D
Bonds. Upon the adoption of this Resolution, the Mayor and City Clerk shall execute and
deliver the Series 2008D Bonds to the Registrar, who shall authenticate the same and
deliver the same to or upon order of the Original Purchaser. No such Bond 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 Bond a Certificate of Authentication.
substantially in the form of the Certificate herein set forth. Such Certificate upon any such
Bond executed on behalf of the Issuer shall be conclusive evidence that the Bond so
authenticated has been duly issued under this Resolution and that the holder thereof is
entitled to the benefits of this Resolution.
Section 2.8. Right to Name Substitute Paving Agent or Registrar. Issuer
reserves the right to name a substitute, successor Registrar or Paying Agent for any Bonds
upon giving prompt written notice to each registered Bondholder.
ARTICLE III
REDEMPTION OF BONDS
Section 3.1. Optional and Mandatory Redemption. (a) Redemption Generally.
The Bonds shall be subject to optional and mandatory redemption as provided in the
Series Resolution pursuant to which such series of Bonds are issued.
(b) Optional Redemption of Series 2008D Bonds. The Series 2008D Bonds
maturing after June l; 2016 may be called for redemption by the Issuer and paid before
maturity on said date or any date thereafter, from any funds regardless of source, in whole
or in part, in any order of maturity and within an annual maturity by lot. The terms of any
redemption shall be par, plus accrued interest to date of call.
Section 3.2. Notice of Redemption. Unless waived by any registered owner of
Bonds to be redeemed and except as may be otherwise provided in a Series Resolution,
-20-
official notice of any such redemption shall be given by the Registrar of the Bonds to be
redeemed on behalf of the Issuer by mailing a copy of an official redemption notice by
first class mail, at least 30 days prior to the date fixed for redemption to the registered
owner of the Bond or Bonds to be redeemed at the address shown on the Bond Register or
at such other address as is furnished in writing by such registered- owner to the Registrar.
All official notices of redemption shall be dated, shall contain the complete off cial
name of the Bond issue, and shall state:
(1) the redemption date;
(2} the redemption price;
(3) the interest rate, maturity date and CUSIP numbers of the Bonds being
redeemed;
(4) if less than all. the Outstanding Bonds are to be redeemed, the Bond
numbers, and, where part of the Bonds evidenced by one Bond certificate are being
redeemed, the respective Principal amounts of such Bonds to be redeemed;
(5) that on the redemption date the redemption price will become due and
payable upon each such Bond or portion thereof called for redemption and that interest
thereon shall cease to accrue from and after such date; and
(6) the place where such Bonds are to be surrendered for payment of the
redemption price (which place of payment shall be the principal payment office of the
Paying Agent or at such other office designated by the Paying Agent for such purpose)
and the name, address, and telephone number of a person or persons at the paying Agent
who may be contacted with respect to the redemption.
Any notice of an optional redemption of any Bonds (pursuant to Section 3.1(b) of
this resolution or any other Series Resolution) may specify that the redemption is
contingent upon the deposit of moneys with the Paying Agent in an amount sufficient to
pay the redemption price (which price shall include the redemption premium, if any) of all
the Bonds or portions of Bonds which are to be redeemed on that date.
Prior to any redemption date, the Issuer shall deposit with the Paying Agent an
amount of money sufficient to pay the redemption price of all the Bonds or portions of
Bonds which are to be redeemed on that date.
-21 -
For so long as DTC is effecting book-entry transfers of the Bonds, the Registrar
shall provide the notices specified in this Section to DTC. It is expected that DTC shall,
in turn, notify its Participants and that the Participants, in turn, will notify or cause to be
notified the Beneficial Owners. Any failure on the part of DTC or a Participant, or failure
on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice
from the Registrar, a Participant or otherwise) to notify the Beneficial Owner of the Bond
so affected, shall not affect the validity of the redemption of such Bond.
Any defect in any notice of redemption shall not affect the validity of proceedings
for redemption of the Bonds.
Section 3.3. Effect of Notice of Redemption. Official notice of redemption
having been given in the manner and under the conditions provided in this Article and
moneys for payment of the redemption price being held by the Paying Agent as provided
in the Series Resolution, the Bonds or portions of Bonds called for redemption shall, on
the redemption date designated in such notice, become and be due and payable at the
redemption price provided for redemption of such Bonds or portions of Bonds on such
date, and from and after such date interest on the Bonds or portions of Bonds called for
redemption shall cease to accrue, such Bonds or portions of Bonds shall cease to be
entitled to any lien, benefit, or security under the Series Resolution, and the owners of
such Bonds or portions of Bonds shall have no rights in respect thereof except to receive
payment of the redemption price thereof. Upon surrender for partial redemption of any
Bond, there shall be prepared for and delivered to the registered owner a new Bond or
Bonds of the same. series, maturity, and interest rate in the amount of the unpaid Principal.
Section 3.4. Redemption Among Series. Subject to the redemption provisions of
any Series Resolution, the Issuer in its discretion may redeem the Bonds of any series, or a
portion of the Bonds of any such series, before it redeems the Bonds of any other series.
Within any particular series, any redemption of Bonds shall be effected in the manner
provided in this Resolution and in any Series Resolution.
Section 3.5. Selection of Bonds to be Redeemed. If less than all of the Bonds of
like maturity of any series shall be called for redemption, the particular Bonds, or portions
of Bonds, to be redeemed shall be selected by the Paying Agent in such equitable manner
as the Paying Agent may determine. The portion of any Bond of a denomination of more
than $5,000 to be redeemed shall be in the Principal amount of $5,000 or an integral
multiple thereof, and, in selecting portions of such Bonds for redemption, the Issuer shall
treat each such Bond as representing that number of Bonds which is obtained by dividing
the Principal of such Bond to be redeemed in part by $5,000.
-22-
Section 3.6. Purchase in Open Market. Nothing herein contained shall be
construed to limit the right of the Issuer to purchase with any excess moneys in the
Sinking Fund (i.e., moneys not needed in the then current Fiscal Year to pay Principal of
and interest on any Senior Bonds) and for Sinking Fund purposes, any Senior Bonds in the
open market. Any such Senior Bonds so purchased shall not be reissued and shall be
cancelled.
ARTICLE IV
APPLICATION OF PROCEEDS
Section 4.1. Application of Series 2008D Bond Proceeds. The proceeds of the
Series 2008D Bonds shall be applied as follows:
(i) An amount sufficient to pay Costs of Issuance of the Series 2008D Bonds
shall be deposited into the Series 2008D Costs of Issuance Account.
(ii) An amount sufficient to meet the Debt Service Reserve Requirement for the
Series 2008D Bonds shall be deposited in the Debt Service Reserve Fund.
(iii) The balance of the proceeds shall be deposited in the Series 2008D Account
of the Project Fund and applied to pay Project Costs of the Series 2008D
Projects.
ARTICLE V
PROJECT FUND
Section 5.1. Project Fund. There is hereby established a Project Fund and within
the Project Fund, there shall be established a separate account for each Project and a
separate Costs of Issuance Account for each series of Bonds ,issued under a Series
Resolution. Except as may be otherwise provided in the Series Resolution authorizing the
issuance of SRF Bonds, moneys in the Project Fund shall be held as may from time to
time be designated by the Issuer, and applied to the payment of the Project Costs, or for
the repayment of advances made for that purpose in accordance with and subject to the
provisions and restrictions set forth in this Article. The Issuer covenants that it will not
cause or permit to be paid from the Project Fund any sums except in accordance with such
provisions and restrictions; provided, however, that any moneys in the Project Fund not
presently needed for the payment of current obligations during the course of construction
may be invested in Permitted Investments maturing not later than (i) the date upon which
such moneys will be needed or (ii) 36 months from the date of purchase, in either case
- 23 -
upon direction of the Treasurer. Any such investments shall be held in trust for the
account of the Project Fund until maturity or until sold, and at maturity or upon such sale
the proceeds received therefrom including accrued interest and premium, if any, shall be
immediately deposited in the Project Fund and shall be disposed of in the manner and for
the purposes provided in the Resolution. At such time as all Costs of Issuance have been
paid, and in any case not later than 6 months after the date of issuance of the applicable
series of Bonds, any money in a Costs of Issuance Account shall be transferred to the
applicable account of the Project Fund.
Section 5.2. Funds Remaining on Completion of Projects. For each series of
Bonds, the Issuer shall, when a Project has been completed, and may, when a Project has
been substantially completed, estimate what portion of the funds remaining in the separate
account relating to such Project will be required by the Issuer for the payment or
reimbursement of the Project Costs of such Project, and thereafter such funds that will not
be used shall be, at the direction of the Governing Body, either (1) applied to pay the costs
of other Projects, (2) transferred to the Sinking Fund and used to redeem Bonds of the
related series on the next redemption date or to pay Principal of such Bonds on the next
Principal Maturity Date, or (3) transferred to the Sinking Fund and used to pay interest on
Bonds of the related series, provided that the Issuer shall first obtain an opinion of bond
counsel to the effect that, under existing law, the application of such moneys to pay
interest on such Bonds (a) is allowed under State law, and (b) if such Bonds are tax-
exemptBonds, will not, by itself and without more, adversely affect the exclusion from
gross income for federal income tax purposes of interest payable on such Bonds. When
all moneys have been withdrawn or transferred from any separate account within the
Project Fund in accordance with the provisions of this Section, such separate account shall
terminate and cease to exist.
ARTICLE VI
PLEDGE OF NET REVENUES AND FLOW OF FUNDS
Section 6.1. Pledge of Revenues; Limited Obligations. Subject only to the rights
of the Issuer to apply amounts as provided in this Article VI, all Net Revenues shall be
and are hereby pledged to the prompt payment of the Principal of, premium, if any, and
interest on the Bonds; provided, however, that the pledge of the Net Revenues to any
Subordinate Bonds shall be junior and subordinate in lien and right of payment to all
Senior Bonds Outstanding at any time. Such moneys and securities shall immediately be
subject to the lien of this pledge for the benefit of the Bondholders without any physical
delivery thereof or further act, and the lien of this pledge shall be valid and binding
against the Issuer and against all other persons having claims against the Issuer, whether
such claims shall have arisen in tort, contract, or otherwise, and regardless of whether
-24-
such persons have notice of the lien of this pledge. This pledge shall rank superior to all
other pledges which may hereafter be made of any of the Net Revenues. The lien of the
pledge made in this Section does not secure any obligation of the Issuer other than the
Bonds.
The Bonds shall be.limited obligations of the Issuer as provided therein payable
solely from the Net Revenues. The Bonds and the interest thereon shall not constitute a
general or moral obligation of the Issuer nor a debt, indebtedness, or obligation of the
Issuer or the State or any political subdivision thereof within the meaning of any
constitutional, statutory or charter provision whatsoever. No .taxing power of the Issuer is
pledged to the payment of the Principal of, premium, if any, or interest on the Bonds or
other costs incident thereto. Neither the members of the Governing Body nor any person
executing the Bonds shall be liable personally on the Bonds by reason of the issuance
thereof.
Section 6.2. Special Funds. The following special funds shall be established,
maintained and accounted for as hereinafter provided so long as any of the Bonds remain
Outstanding:
(a) Revenue Fund;
(b) Operation and Maintenance Fund;
(c) Bond Principal and Interest Fund;
(d) Debt Service Reserve Fund;
(e) Subordinate Bond Fund (while Subordinate Bonds are Outstanding);
(f) Surplus Fund; and
(g) Rebate Fund.
The Issuer shall have the right to create special accounts, from time to time, in each
of the foregoing Funds as the Governing Body determines to be desirable.
Section 6.3. Flow of Funds. All Gross Revenues shall be deposited as received
into the Revenue Fund. Moneys from time to time credited to the Revenue Fund shall be
applied to the funds hereby established in the following order of priority:
_25_
(a) First, to transfer to the Operation and Maintenance Fund sufficient amounts
required for the payment of all current Operation and Maintenance Expenses,
as provided in Section 6.4 of this Resolution.
(b) Second, to transfer all amounts to the Bond Principal and Interest Fund as
required by Section 6.5 of this Resolution.
(c) Third, to transfer all amounts to the Debt Service Reserve Fund as required
by Section 6.6 of this Resolution. .
(d) Fourth, to transfer all amounts to the Rebate Fund as required by Section
6.10 of this Resolution.
(e) Fifth, to transfer all amounts to the Subordinate Bond Fund as required by
Section 6.7 of this Resolution.
(f) Sixth, to make deposits to the Surplus Fund as required in Section 6.8 of this
Resolution.
Section 6.4. Operation and Maintenance Fund. Money in the Revenue Fund
shall first be disbursed to make deposits into the Operation and Maintenance Fund. There
shall be deposited in the Operation and Maintenance Fund each month an amount
sufficient to pay the Operation and Maintenance Expenses due, or expected to come due,
during the month, plus an amount equal to one/twelfth of expenses payable on an annual
basis such as insurance. After the first day of the month, further deposits may be made to
the Operations and Maintenance Fund from the Revenue Fund to the extent necessary to
pay current Operation and Maintenance Expenses accrued and payable to the extent that
funds are not available in the Surplus Fund.
Section 6.5. Bond Principal and Interest Fund. On or before the last business
day of each month so long as any Bonds remain Outstanding, there shall next be
transferred into the Bond Principal and Interest Fund (also referred to as the "Sinking
Fund") from the Revenue Fund, to the extent not funded from capitalized interest, the
following amounts:
(a) General. Sufficient moneys shall be paid in periodic installments from the
Revenue Fund into the Sinking Fund for the purpose of paying the Principal of and
interest on the Senior Bonds as they become due and payable. Amounts held in the
Sinking Fund shall be used solely to pay interest and Principal of the Senior Bonds as the
same become due and payable. (whether at maturity or upon redemption).
-26-
(b) Interest. On or before the 30th day preceding each Interest Payment Date
for Senior Bonds, the Issuer shall deposit in the Sinking Fund an amount which, together
with any other moneys already on deposit therein and available to make such payment, is
not less than the interest coming due on such Senior Bonds on such Interest Payment Date.
(c) Principal. On or before the 30th day preceding each Principal Maturity Date
for Senior Bonds, the Issuer shall deposit in the Sinking Fund an amount which, together
with any other moneys already on deposit therein and available to make such payment, is
not less than the Principal coming due on such Senior Bonds on such Principal Maturity
Date.
(d) Application of Money in Sinking_Fund. No further payments need be made
into the Sinking Fund whenever the amount available in the Sinking Fund, if added to the
amount then in the Debt Service Reserve Fund, is sufficient to retire all Senior Bonds then
Outstanding and to pay all unpaid interest accrued and to accrue prior to such retirement.
No moneys in the Sinking Fund shall be used or applied to the optional purchase or
redemption of Senior Bonds prior to maturity unless: (i) provision shall have been made
for the payment of all of the Senior Bonds; or (ii) such moneys. are applied to the purchase
and cancellation of Senior Bonds which are subject to mandatory redemption on the next
mandatory redemption date, which falls due within 12 months, such Senior Bonds are
purchased at a price not more than would be required for mandatory redemption, and such
Senior Bonds are cancelled upon purchase; or (iii) such moneys are in excess of the then
required balance of the Sinking Fund and are applied to redeem a part of the Senior Bonds
Outstanding on the next succeeding redemption date for which the required notice of
redemption may be given.
Section 6.6. Debt Service Reserve Fund. Upon the issuance of the Series 2008D
Bonds, the Issuer shall deposit into the Debt Service Reserve Fund the amounts specified
in Section 4.1. There also shall be deposited into the Debt Service Reserve Fund the
amounts specified in Series Resolutions with respect to additional Senior Bonds.
Notwithstanding the foregoing, there shall be no deposit into the Debt Service Reserve
Fund with respect to any SRF Bonds nor shall the Debt Service Reserve Fund secure any
SRF Bonds. After the issuance of any Senior Bonds, the increase in the amount of the
Debt Service Reserve Requirement resulting from the issuance of such Senior Bonds shall
be accumulated, to the extent not covered by deposits from Bond proceeds or funds on
hand, over a period not exceeding 61 months from the date of delivery of such Senior
Bonds in monthly deposits ("Accumulation Payments"), none of which is less than 1/60 of
the amount to be accumulated. The balance of the Debt Service Reserve Fund shall be
maintained at an amount equal to the Debt Service Reserve Requirement (or such lesser
amount that is required to be accumulated in the Debt Service Reserve Fund in connection
-27-
with the periodic accumulation to the Debt Service Reserve Requirement after the
issuance of Senior Bonds).
There shall be transferred from the Revenue Fund to the Debt Service Reserve
Fund the amount necessary to restore, as further described below, the amount of cash and
securities in the Debt Service. Reserve Fund to an amount equal to the Debt Service
Reserve Requirement (or such lesser monthly amount that is required to be deposited into
the Debt Service Reserve Fund after the issuance of Senior Bonds). Whenever for any
reason the amount in the Sinking Fund is insufficient to pay all interest or Principal
becoming due on the Senior Bonds within the next seven days, the Issuer shall make up
any deficiency by transfers from the following funds and accounts, in the following order
of priority: first, from the Surplus Fund; and second, from the funds and accounts of the
Issuer relating to Subordinate Bonds which are not Subordinate SRF Bonds. Whenever,
on the date that such interest or Principal is due, there are insufficient moneys in the
Sinking Fund available to make such payment, the Issuer shall, without further
instructions, apply so much as may be needed of the moneys in the Debt Service Reserve
Fund to prevent default in the payment of such interest or Principal, with priority to
interest payments. Whenever by reason of any such application or otherwise (other than
required Accumulation Payments}, the amount remaining to the credit of the Debt Service
Reserve Fund is less than the amount then required to be in the Debt Service Reserve
Fund, such deficiency shall be remedied by monthly deposits from the Revenue Fund, to
the extent funds are available in the Revenue Fund for such purpose after all required
transfers set forth above have been made.
Section 6.7. Subordinate Bond Fund. On or before the last business day of each
month so long as any Subordinate Bonds remain Outstanding, there shall next be
transferred into the Subordinate Bond Fund from the Revenue Fund such amounts as may
be required to be deposited into the funds and accounts created by any Series Resolution
authorizing the issuance of Subordinate Bonds,. for the purpose of paying Principal of and
interest on Subordinate Bonds, and accumulating reserves for such payments. Moneys
credited to the Subordinate Bond Fund shall be used solely for the purpose provided in the
Series Resolutions authorizing the Subordinate Bonds.
Section 6.8. Surplus Fund. After making all payments and transfers hereinabove
required, all amounts remaining in the Revenue Fund shall be transferred by the last day
of each month to the Surplus Fund. Amounts credited to the Surplus Fund may be used
for any lawful System purposes, including without limitation, to pay for any Projects, to
pay costs of replacing any depreciable property or equipment of the System, to pay costs
of any major or extraordinary repairs, replacements or renewals of the System, to acquire
land or any interest therein, to pay any lease or contractual obligations not paid as
-28-
Operation and Maintenance Expenses and to make any transfers required to cure any
deficiencies in any funds.
Section 6.9. Deficiencies in Funds. If in any month there shall not be transferred
into any fund maintained pursuant to this Article, the full amounts required herein,
amounts equivalent to such deficiency shall be set apart and transferred to such fund or
funds from the first available and unallocated moneys in the Revenue Fund, and such
transfer shall be in addition to the amounts otherwise required to be transferred to such
funds during any succeeding month or months.
Section 6.10. Rebate Fund. The Issuer shall calculate, from time to time, as
required in order to comply with the provisions of Section 148(f) of the Internal Revenue
Code of 1986, as amended, the amounts required to be rebated (including penalties) to the
United States and shall deposit or cause to be deposited into the Rebate Fund any and all
of such amounts promptly following a determination of any such amount.
The Issuer shall direct any depository of the Rebate Fund to keep all moneys held
therein invested in Permitted Investments. To the extent and at the times required in order
to comply with Section 148(f) of the Code, the Issuer may withdraw funds. from the
Rebate Fund for the purpose of making rebate payments (including penalties) to the
United States as required by Section 148(f) of the Code. Except as otherwise specifically
provided in this Section, moneys in the Rebate Fund may not be withdrawn from the
Rebate Fund for any other purpose.
All Investments Earnings held in the Rebate Fund shall be retained in the Rebate
Fund and shall become part of the Rebate Fund. Moneys held in the Rebate Fund,
including the Investment Earnings thereon, if any, shall not be subject to a pledge in favor
of the owners of the Bonds under the Series Resolution and may not be used to pay
amounts due on the Bonds or amounts required for the operation, maintenance,
enlargement, or extension of the System.
Whenever the Issuer has filed all reports required to be filed with the United States
pursuant to Section 148(f) of the Code with respect to any series of Bonds and has made
all payments required to be made to the United States pursuant to Section 148(f) of the
Code relating thereto, all moneys or investments remaining in the Rebate Fund may be
transferred to the Surplus Fund, and such moneys and investments may be used by the
Issuer for any lawful purpose.
Section 6.1.1. Investment of Funds; Transfer of Investment Earnings. (a)
Monies in all funds shall, at the option and direction of the Treasurer, be invested and
secured in the manner required by law for public funds, in direct obligations of, or
-29-
obligations the principal of and interest on which are unconditionally guaranteed by, the.
United States of America, or in any other Permitted Investments; provided that all such
deposits .and investments shall be made in such manner that the money required to be
expended from any fund will be available at the proper time or times. All such
investments shall be valued no less frequently than the last business day of the Issuer's
fiscal year at cost (taking into account normal amortization and accretions of premiums
and discounts) or, in the case of investments having a maturity greater than five years
from the date of valuation, at market value, except that any direct obligations of the
United States of America -State and Local Government Series shall be continuously
valued at their par value or principal face amount. For purposes of maximizing
investment returns, money in such funds may be invested, together with money in-other
funds or with other money of the Issuer, in common investments of the kind described
above, or in a common pool of such investments maintained by the Issuer which shall be
kept and held at an official depository of the Issuer, which shall not be deemed to be a loss
of the segregation of such money or funds. Safekeeping receipts, certificates of
participation or other documents clearly evidencing the investment or investment pool in
which such money is invested and the share thereof purchased with such money or owned
by such fund shall be held by or on behalf of each such fund. If and to the extent
necessary, such investments shall be promptly sold to prevent any default.
(b) To the extent it is not otherwise provided for in a Series Resolution or is
needed to eliminate a deficiency, all Investment Earnings derived from deposits and
investments credited to the funds established in this Article shall be transferred or credited
to the Revenue Fund.
(c) Notwithstanding anything to the contrary contained herein, any interest and
income derived from deposits and investment of any amounts credited to any fund or
account inay be paid to the federal government if in the written opinion of bond counsel
such payment is required in order to prevent interest on any Bonds from being includable
within the gross income of the owners thereof for federal income tax purposes.
ARTICLE VII
GENERAL PROVISIONS
Section 7.1. Rate Covenant. The .Issuer shall continuously own, control, operate,
and maintain the System in an efficient and economical manner and on a revenue
producing basis and shall at all times prescribe, fix, maintain and collect rates, fees and
other charges for the services and facilities furnished by the System that are fully
sufficient at all times to:
-30-
(a) provide for 100% of the budgeted Operation and Maintenance Expenses and
for the accumulation in the Revenue Fund of a reasonable reserve therefor; and
(b) produce Net Revenues in each Fiscal Year which:
(a) will equal at least 125% of the Debt Service Requirement on all Senior
Bonds then Outstanding for the year of computation;
(b) will enable the Issuer to make all required payments, if any, into the Debt
Service Reserve Fund and the Rebate Fund;
(c) will enable the Issuer to accumulate an amount which, in the judgment of
the Governing Body, is adequate to meet the costs of major renewals; replacements,
repairs, additions, betterments, and improvements to the System, necessary to keep
the same in good operating condition or as is required by any governmental agency
having jurisdiction over the System; and
(d) will. remedy all deficiencies in required payments into any of the funds and
accounts established under the Resolution from prior Fiscal Years.
If the Issuer fails to prescribe, fix, maintain and collect rates, fees and other
charges in accordance with the provisions of this Section, the owners of not less than 25%
in aggregate principal of the Bonds then Outstanding, without regard to whether any Event
of Default shall have occurred, may institute and prosecute in any court of competent
jurisdiction an appropriate action to compel the Issuer to prescribe, fix, maintain and
collect rates, fees and other charges in accordance with the requirements of this Section.
Section 7.2. Other Covenants Re~ardin~ the Operation of the System..The
Issuer hereby covenants and agrees with each and every holder of the Bonds as follows:
(a) Maintenance and Efficiency. The. Issuer will maintain the System in good
condition and operate it in an efficient manner and at reasonable cost.
(b) Insurance. The Issuer shall maintain insurance for the benefit of the holders 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 Operations and Maintenance Fund.
-31-
(c) Accounting 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, or as soon thereafter as is practicable, by an Independent Auditor and
will provide copies of the audit report to the Bondholders upon request. The
Bondholders shall have at all reasonable times the right to inspect the System and
the records, accounts and data of the Issuer relating thereto.
(d) 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 segregate the revenues of the
System and apply said revenues to the funds specified in this Resolution.
(e) PropertX. The Issuer will not sell, lease, mortgage or in any manner dispose of
the System, or any capital part thereof, including any and all extensions and
additions that may be made thereto, until satisfaction and discharge of all of the
Bonds shall have been provided for in the manner provided in this Resolution;
provided, however, that this covenant shall not be construed to prevent the disposal
by the Issuer of property which. in the judgment of the 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 higher value be substituted
therefor, and provided further that the proceeds of the disposition of such property
shall be placed in the Operations and Maintenance Fund and used in preference to
other sources for capital improvements to the System.
(f) Fideli . Bond. The Issuer shall maintain fidelity bond coverage in 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.
(g) Additional Charges. The Issuer will require proper connecting charges and/or
other security for the payment of services charges.
(h) Budget. 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 expenses during the
current and last preceding Fiscal Years.
Section 7.3. Disposition of Bond Proceeds; Arbitrage Not Permitted. The
Issuer reasonably expects and covenants that no use will be made of the proceeds from the
-32-
issuance and sale of the Series 2008D Bonds issued hereunder which will cause any of the
Series 2048D Bonds to be classified as arbitrage bonds within the meaning of Section
148(a) and (b) of the Code, and that throughout the term of said Series 2008D Bonds it
will comply with the requirements of said statute and regulations issued thereunder.
To the best knowledge 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 Series 2,008D Bonds will be used in a manner that would
cause such Bonds to be arbitrage bonds. 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 this Resolution. The Treasurer is hereby directed to snake 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
Series 2008D Bonds 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 Series
2008D Bonds remaining unexpended after three 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 Series 2008D Bonds, 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
this Resolution only in the event that it shall first obtain an opinion of bond counsel that
the proposed investment action will not cause the Series 2008D Bonds to be classified as
arbitrage bonds under Section 148(a) and (b) of the Code.
The Issuer covenants that it will proceed with due diligence to spend the proceeds
of the Series 2008D Bonds 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 Series 2008D Bonds not to be exempt
from federal income taxes in the hands of holders under the provisions of the Code.
Section 7:4. Additional Covenants, Representations and Warranties of the
Issuer. The Issuer certifies and covenants with the purchasers and holders of the Series
2008D Bonds from time to time outstanding that the Issuer through its officers, (a) will
- 33 -
make such further 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, which Tax Exemption Certificate shall constitute a part of
the contract between the Issuer and the owners of the Series 2008D Bonds; (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 Series 2008D Bonds; (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
other persons to assist the Issuer in such compliance.
ARTICLE VIII
SENIOR BONDS AND SUBORDINATE BONDS
Section 8.1. No Prior Lien Bonds nor Senior Bonds Except as Permitted in
the Resolution. All Senior Bonds shall have complete parity of lien on the Net Revenues
despite the fact that any of the Senior Bonds may be delivered at an earlier date than any
other of the Senior Bonds. The Issuer may issue Senior Bonds. in accordance with this
Resolution, but the Issuer shall issue no other obligations of any kind or nature payable
from or enj oying a lien on the Net Revenues or any part thereof having priority over or,
except as permitted in this Resolution, on a parity with the Series 2008D Bonds.
Section 8.2. Refunding Bonds. Any or all of the Senior Bonds may be refunded
prior to maturity, upon redemption in accordance with their terms, or with the consent of
the owners of such Senior Bonds, and the refunding Bonds so issued shall constitute
Senior Bonds, if the Issuer shall have obtained a report from an Independent Auditor or a
Financial Advisor demonstrating that the refunding will reduce the total debt service
payments on the Senior Bonds being refunded on a present value basis or, as an alternative
to, and in lieu thereof, the Senior Bonds are being refunded under arrangements which
immediately result in making provision for the payment of the refunded Bonds.
Section 8.3. Senior Bonds. Bonds (including refunding Bonds which do not meet
the requirements of Section 8.2) may also be issued on a parity with the Series 2008D
Bonds pursuant to a Series Resolution, and the Bonds so issued shall constitute Senior
Bonds, if all of the following conditions are satisfied:
(a) The Issuer shall have received, at or before issuance of the Senior Bonds, a
report by an Independent Auditor or Financial Advisor to the effect that the
historical Net Revenues for the preceding Fiscal Year were equal to at least 125%
-34-
of the Maximum Annual Debt Service Requirement on all Senior Bonds which will
be Outstanding immediately after the issuance of the proposed Senior Bonds.
The report by the Independent Auditor or Financial Advisor as aforesaid may
contain profonna adjustments to historical Net Revenues equal to 100% of the
increased annual amount attributable to any revision in the schedule of rates, fees
and charges for the services and facilities furnished by the System, adopted prior to
the date of delivery of the proposed Senior Bonds and not fully reflected in the
historical Net Revenues actually received during such 12 month period.
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 than eighteen (18) months prior to the date of issuance of the
additional Senior Bonds.
(b) The Issuer shall have received, at or before issuance of the Senior Bonds, a
report from an Independent Auditor or Financial Advisor to the effect that the
payments required to be made into each account of the Sinking Fund, the Debt
Service Reserve Fund and the Subordinate Bond Fund have been made and the
balance in each account of each such Fund is not less than the balance required by
this Resolution as of the date of issuance of the proposed Senior Bonds.
(c) Except with respect to Senior SRF Bonds; the Series Resolution authorizing
the proposed Senior Bonds must require (i) that the amount to be accumulated and
maintained in the Debt Service Reserve Fund be increased to not less than 100% of
the Debt Service Reserve Requirement computed on a basis which includes all
Senior Bonds which will be Outstanding immediately after issuance of the proposed
Senior Bonds and (ii) that the amount of such increase be deposited in the Debt
Service Reserve Fund on or before the date and at least as fast as specified in
Section 6.6 of this Resolution.
(d) The Series Resolution authorizing the proposed Senior Bonds must require
the proceeds of such proposed Senior Bonds to be used solely to snake capital
improvements to the System, to fund interest on the proposed Senior Bonds, to
acquire existing or proposed water utilities, extensions or related facilities, to refund
other obligations issued for such purposes (whether or not such refunding Bonds
satisfy the requirements of Section 8.2), and to pay expenses incidental thereto and
to the issuance of the proposed Senior Bonds.
-35-
Section 8.4. Subordinate Bonds.
(a) Bonds may also be issued on a subordinate basis to the Series 2008D Bonds
and any other Senior Bonds pursuant to a Series Resolution, and the Bonds so issued shall
constitute Subordinate Bonds, if all of the following conditions are satisfied:
(1) The Series Resolution authorizing the Subordinate Bonds shall provide that
such Subordinate Bonds shall be junior and subordinate in lien and right of payment
to all Senior Bonds Outstanding at any time.
(2) The Series Resolution authorizing the Subordinate Bonds shall establish
funds and. accounts for the moneys to be used to pay debt service on the
Subordinate Bonds, and to provide any desired reserves therefor.
(3) The requirements of Section 8.3(d) are met with respect to such Subordinate
Bonds (as if such Bonds constituted Senior Bonds).
(b) In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization, or other similar proceedings in connection
therewith, relative to the Issuer or to its creditors, as such, or to its property, and in the
event of any proceedings for voluntary liquidation, dissolution, or other winding up of the
Issuer, whether or not involving insolvency or bankruptcy, the owners of all Senior Bonds
then Outstanding shall be entitled to receive payment in full of all Principal and interest
due on all such Senior Bonds in accordance with the provisions of the Series Resolution
before the owners of the Subordinate Bonds are entitled to receive any payment from the
Net Revenues or the amounts held in the funds and accounts created under the Series
Resolution on account of Principal of, premium, if any, or interest on the Subordinate
Bonds.
(c) If any Event of Default shall have occurred and be continuing (under
circumstances when the provisions of paragraph (b) are not applicable), the owners of all
Senior Bonds then Outstanding shall be entitled to receive payment in full of all Principal
and interest then due on all such Senior Bonds before the owners of the Subordinate
Bonds are entitled to receive any Payment from the Net Revenues or the amounts held in
the funds and accounts created under the Series Resolution of Principal of, premium, if
any, or interest on the Subordinate Bonds.
(d) Any series of Subordinate Bonds may have such rank or priority with
respect to any other series of Subordinate Bonds as may be provided in the Series
Resolution authorizing such series of Subordinate Bonds and may contain such other
provisions as are not in conflict with the provisions of the Series Resolution.
-36-
Section 8.5. Accession of Subordinate Bonds to Senior Status. By proceedings
authorizing all or any Subordinate Bonds, the Issuer may provide for the accession of such
Subordinate Bonds to the status of complete. parity with the Senior Bonds if, as of the date
of accession, the conditions of Section 8.3 are satisfied, on a basis which includes all
Outstanding Senior Bonds and such Subordinate Bonds, and if on the date of accession:
(a) the Debt Service Reserve Fund contains an amount equal to the Debt
Service Reserve Requirement computed on a basis which includes all Outstanding
Senior Borids and such Subordinate Bonds (but which excludes, in the case of both
Outstanding Senior Bonds and-such Subordinate Bonds, any SRF Bonds); and
(b) the Sinking Fund contains the amount which would have been required to be
accumulated therein on the date of accession if the Subordinate Bonds had
originally been issued as Senior Bonds.
Section 8.6. Adoption of Proceedings. The Governing Body shall adopt a Series
Resolution authorizing the issuance of any additional Bonds and reciting that the
requirements of this Article have been satisfied, and shall set forth in such proceedings,
among other things, the date or dates such additional Bonds shall bear and the rate or rates
of interest, interest payment date or dates, maturity date or dates, and redemption
provisions with respect to such additional Bonds and any other matters applicable to such
additional Bonds as the Governing Body may deem advisable.
Any such Series Resolution shall restate and reaffirm, by reference, all of the
applicable terms, conditions and provisions of this Resolution not modified by the Series
Resolution.
Section 8.7. Proceedings Authorizing Additional Bonds. No Series Resolution
authorizing the issuance of additional Bonds as permitted under this Article shall conflict
with the terms and conditions of this Resolution, except to the extent that the Series
Resolution is adopted for one of the purposes set forth in Section 11.1 and complies with
the provisions of Section 11.1 for the adoption of Supplemental Resolutions without the
consent of Bondholders.
Section 8.8. Applicability to Additional Bonds and Prior Resolution. (a} The-
provisions of this Resolution shall be construed as including and being applicable to any
future series of Bonds, and any such Bonds shall be treated, unless otherwise specifically
stated, as if they had been issued together with the Series 2008D Bonds and pursuant to
the terms of this Resolution.
-37-
(b) In accordance with the Consent and Waiver dated September 29, 2008
executed by the Iowa Finance Authority, in its capacity as the sole holder of the
Outstanding SRF Loan, the provisions of the Prior Resolution are hereby amended and
restated to conform to the provisions of this Resolution, and the Outstanding SRF Loan
shall be deemed to be a Senior SRF Bond within the meaning of this Resolution. This
Resolution shall be construed whenever possible so as not to conflict with the terms and
conditions of the Loan and Disbursement Agreement approved in the Prior Resolution and
entered into at the time of issuance of the Outstanding SRF Loan. In the event such
construction is not possible, or in the event of any conflict, or inconsistency between the
terms hereof and those of the foregoing Loan and Disbursement Agreement, the terms of
said Loan and Disbursement Agreement shall prevail and be given effect to the extent
necessary to .resolve any such conflict or inconsistency.
Section 8.9. Credit Facilities. In connection with the issuance of any Bonds
under the Series Resolution, the Issuer may obtain or cause to be obtained one or more
Credit Facilities providing for payment of all or a portion of the Principal of, premium, if
any, or interest due or to become due on such Bonds, providing for the purchase of such
Bonds by the Credit Facility Provider, or providing funds for the purchase of such Bonds
by the Issuer. In connection therewith the Issuer shall enter into Credit Facility
Agreements with such Credit Facility Providers providing for, among other things, (i) the
payment of fees and expenses to such Credit Facility Providers for the issuance of such
Credit Facilities; (ii) the terms and conditions of such Credit Facilities and the Bonds
affected thereby; and (iii) the security, if any, to be provided for the issuance of such
Credit Facilities. The Issuer may secure any Credit Facility by an agreement providing for
the purchase of the Bonds secured thereby with such adjustments to the rate of interest,
method of determining interest, maturity, or redemption provisions as are specified by the
Issuer in the applicable Series Resolution. The Issuer may in a Credit Facility Agreement
agree to directly reimburse such Credit Facility Provider for amounts paid under the terms
of such Credit Facility, together with interest thereon; provided, however, that no
Reimbursement Obligation. shall be created for purposes of the Series Resolution until
amounts are paid under such Credit Facility. Any such Reimbursement Obligation shall
be deemed to be a part of the Bonds to which the Credit Facility relates which gave rise to
such Reimbursement Obligation, and. references to Principal and interest payments with
respect to such Bonds shall include Principal and interest due on the Reimbursement
Obligation incurred as a result of payment of such Bonds with the Credit Facility. Any
such Credit Facility shall be for the benefit of and secure such Bonds or portion thereof as
specified in the applicable Series Resolution.
-38-
ARTICLE IX
DISCHARGE AND SATISFACTION
Section 9.1. Discharge and Satisfaction of Bonds. The covenants, liens and
pledges entered into, created or imposed pursuant to this Resolution or any Series
Resolution may be fully discharged and satisfied with respect to the Bonds authorized
thereunder, or any of them, in any one or more of the following ways:
(a) By paying the said Bonds 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 said Bonds and irrevocably appropriated
exclusively to that purpose an amount in cash or Government Obligations the
maturities and income of which shall be sufficient to retire at maturity, or by
redemption prior to maturity on a designated date upon which said Bonds may be
redeemed, all of such Bonds 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 such Bonds 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.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1. Events of Default. An Event of Default is one or more of the
following:
(a) A default shall be made in the due and punctual payment of the principal or
redemption price of any Bond when and as the same shall become due and payable,
whether at maturity or by call or proceedings for redemption, or otherwise;
-39-
(b) A default shall be made in the due and punctual payment of any installment
of interest on any Bond when and as such interest installment shall become due and
payable;
(c) A default shall be made by the Issuer in the performance or observance of
any other of the covenants, agreements or conditions on its part in the Series
Resolution or in the Bonds contained, and such default shall have continued for a
period of 90 days after written notice specifying, such default and requiring that it
shall have been remedied is given to the Issuer by the owners of not less than 25%
in principal amount of the Bonds Outstanding; provided that, if such failure cannot
be corrected within such 90 day period; it shall not constitute an Event of Default if
corrective action is instituted within such period and such corrective action is
diligently pursued until the failure is corrected, provided that if such corrective
action includes legal action such legal action shall be diligently pursued until either
the failure is corrected or such failure shall be determined by a court of final and
competent jurisdiction as not correctable as a matter of law.
Section 10.2. Default and Remedies. In the event of (a) a default on the part of
the Issuer in the prompt and full payment of principal of or interest on any Bond, or (b) a
default in the keeping of any other covenant herein contained (if such default shall
continue for a period of ninety days after written notice specifying the nature of the
default and requiring it to be remedied is received by the Issuer), the holders of the Bonds
shall have the right to proceed at law or in equity by suit, action or mandamus to enforce
and compel performance of the duties required by the terms of the Resolution authorizing
the issuance of the Bonds, or to obtain the appointment of a receiver to take possession of
and operate the System, and to perform the duties required by the teens of the Resolution.
The holders of the Bonds shall have no right to accelerate any payment obligation of the
Issuer with respect to the Bonds.
No holder of any Bond shall have the right to institute any proceeding, judicial or
otherwise, for the enforcement of the covenants herein contained, except as provided in
this Section. The holders of not less than 25% in principal amount of the Outstanding
Bonds shall have the right, either at law or in equity, through suit, action or other
proceedings, to protest and enforce the rights of all holders of such Bonds and to compel
the performance of any and all of the covenants required herein to be performed by the
Issuer, and its officers and employees, including but not limited to the fixing and
maintaining of rates, fees and charges and the collection and proper segregation of Net
Revenues and the application and use thereof. The holders of a majority in principal
amount of Outstanding Bonds shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Bondholders or the exercise of
any power conferred on them and the right to waive a default in the performance of any
-40-
such covenant, and its consequences, except a default in the payment of the principal of or
interest on any Bond when due. Nothing herein, however, shall impair the absolute and
unconditional right of the holder of each Bond to receive payment of the principal of,
premium, if any, ,and interest on such Bond as such principal, premium and interest
respectively become due, and to-institute suit for any such payment.
Section 10.3. Resolution a Contract. The provisions of this Resolution shall
constitute a contract between the Issuer and the holder or holders of the Bonds, and after
the issuance of any of the Bonds no change, variation or alteration of any kind in the
provisions of this Resolution shall be made in any manner, except as provided. in Article
XI, until such time as all of the Bonds, and interest due thereon, shall have been satisfied
and discharged as provided in this Resolution.
ARTICLE XI
SUPPLEMENTAL RESOLUTIONS
Section 11.1. Amendment of Resolution Without Consent. The Issuer may,
without the consent of or notice to any of the holders of the Bonds, approve one or more
Supplemental Resolutions., which thereafter shall form a part of 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 Bonds; or to comply with any applicable 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 Bonds;
(b) to change the terms or provisions of this Resolution to the extent necessary to
prevent the interest on the Bonds from 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 Bonds any additional rights,
remedies, powers or authority that may lawfully be granted to or conferred upon the
holders of the Bonds;
(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;
-41-
(e) To subject to the lien acid pledge of this Resolution additional Net Revenues as
may be permitted by law;
(f) To modify any of the provisions of the Resolution in any respect if such
modification shall not become effective until after the Bonds Outstanding
immediately prior to the effective date of such Supplemental Resolution shall cease
to be Outstanding and if any Bonds issued contemporaneously with or after the
effective date of such Supplemental Resolution shall contain a specific reference to
the modifications contained in such subsequent proceedings;
(g) To modify the Resolution to provide for the issuance of Senior Bonds or
Subordinate Bonds, and such modification may deal with any subjects and make
any provisions which the Issuer deems necessary or desirable for that purpose;
(h) To modify any of the provisions of the Resolution in any respect (other than a
modification of the type described in Section 11.2 requiring the consent of the
Bondholders); provided that for (i) any Outstanding Bonds which are assigned a
Rating and which are not secured by a Credit Facility providing for the payment of
the full amount of Principal and interest to be paid thereon, each Rating Agency
shall have given written notification to the Issuer that such modification will not
cause the then applicable Rating on any Bonds to be reduced or withdrawn, and (ii)
any Outstanding Bonds which are secured by Credit Facilities providing for the
payment of the full amount of the Principal and interest to be paid thereon, each
Credit Facility Provider shall have consented in writing to such modification.
Section 11.2. Amendment of Resolution Requiring Consent. The Issuer also
may approve one or more Supplemental Resolutions, which thereafter shall form a part of
this Resolution, if such Supplement Resolution shall have been consented to by holders of
not less than two=thirds (2/3) in principal amount of the Bonds at any time Outstanding
(not including in any case any Bonds which may then be held or owned by or for the
account of the Issuer, but including such, refunding Bonds as may have been issued for the
purpose of refunding any of such Bonds if such refunding Bonds 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 or interest rate of the Bonds, or modify the
terms of payment of Principal of or interest on the Bonds 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 Bonds then
Outstanding; and
-42-
(c) Reduce the percentage of the Principal amount of Bonds, the consent of the
holders of which is required to effect a further amendment;
in each case without the consent of the owners of all of the affected Bonds then
Outstanding.
Whenever the Issuer shall propose to amend this Resolution under the provisions of
this Section, it shall cause notice of the Supplemental Resolution to be filed with the
Original Purchaser and to be mailed by certified mail to each registered owner of any
Bond 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 Supplemental
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
holders of at least two-thirds in aggregate principal amount of the Bonds then outstanding
as in this Section defined, which instrument or instruments shall refer to the proposed
Supplemental Resolution described in said notice and shall specifically consent to and
approve the adoption thereof, thereupon, but not otherwise, the Governing Body of the
Issuer may adopt such Supplemental Resolution and such Supplemental Resolution shall
become effective and binding upon the holders of all of the Bonds.
Any consent given by the holder of a Bond 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 Bond 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 acknowledgments 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 Bonds held by any person executing such
instrument and the date of his holding the same may be proved by an affidavit by such
person or by a certificate 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 Bonds described in such certificate.
- 43 -
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.1. Continuing Disclosure. The Issuer hereby covenants and agrees
that it will comply with and carry out all of the provisions of the Continuing Disclosure
Certificate, and the provisions of the Continuing Disclosure Certificate are hereby
approved and incorporated by reference as part of this Resolution and made a part hereof
and the Mayor and City Clerk are hereby authorized to execute and deliver the same at
issuance of the Series 2008D Bonds. Notwithstanding any other provision of this
Resolution, failure of the Issuer to comply with the Continuing Disclosure Certificate shall
.not be considered an event of default under this Resolution; however, any holder of the
Series 2008D Bonds or Beneficial Owner may take such actions as may be necessary and
appropriate, including seeking specific performance by court order, to cause the Issuer to
comply with its obligations under the Continuing Disclosure Certificate.. For purposes of
this Section, "Beneficial Owner" means any person which (a) has the power, directly or
indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series
2008D Bonds (including.persons holding Series 2008D Bonds through nominees,
depositories or other intermediaries), or (b) is treated as the owner of any such Bonds for
federal income tax purposes.
Section 12.2. Official Statement. The use and distribution of the Preliminary
Official .Statement is hereby authorized and approved, and the execution and delivery of
the Official Statement in final form shall be and is hereby authorized, ratified, confirmed,
and. approved. The Mayor is hereby authorized and directed to ratify, confirm, approve,
execute, and deliver the Official Statement on behalf of the Issuer, and the execution of
the Official Statement by the Mayor shall constitute conclusive evidence of each such
officer's ratification, confirmation, approval, and delivery thereof on behalf of the Issuer.
Section 12.3. 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 provisions.
Section 12.4. Repeal of Conflicting Ordinances or Resolutions and Effective
Date. All other ordinances, resolutions (including the Prior Resolution) 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 from and after its adoption.
-44-
Passed and approved this 20th day of October, 2008.
Roy D. Buol, Mayor
Attest:
Jeanne F. Schneider
Clerk
- 45 -
CIG-3
CERTIFICATE
STATE OF IOWA )
} SS
COUNTY OF DUBUQUE )
I, the undersigned City Clerk of Dubuque, Iowa, do hereby certify that attached is a
true and complete copy of the portion of the corporate records of said Municipality
showing proceedings of the Council, and the same is a true and complete copy of the
action taken by said Council with respect to said matter at the meeting held on the date
indicated in the attachment, which proceedings remain in full force and effect, .and have
not been amended or rescinded in any way; that meeting and all action thereat was duly
and publicly held in accordance with a notice of meeting and tentative agenda, a copy of
which was timely served on each member of the Council and posted on a bulletin board or
other prominent place easily accessible to the public and clearly designated for that
purpose at the principal office of the Council (a copy of the face sheet of said agenda
being attached hereto) pursuant to the local rules of the Council and the provisions of
Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least
twenty-four hours prior to the commencement of the meeting as required by said law and
with members of the public present in attendance; I further certify that the individuals
named therein were on the date thereof duly and lawfully possessed of their respective city
offices as indicated therein, that no Council vacancy existed except as may be stated in
said proceedings, and that no controversy or litigation is pending, prayed or threatened
involving the incorporation, organization, existence or boundaries of the City or the right
of the individuals named therein as officers to their respective positions.
WI SS my han and the seal of said Municipality hereto affixed this
day of ~%~ ~. ~ , 2008.
ty Clerk, Dubuque, Iowa
SEAL
-46-
EXHIBIT A
FORM OF SERIES 2008D BONDS
REGISTERED STATE OF IOWA
CERTIFICATE NO. 1 COUNTY OF DUDUQUE
CITY OF DUBUQUE
WATER REVENUE BOND
SERIES 2008D
Rate Maturi Bond Date
November 4, 2008
REGISTERED
Cusip No.
The City of Dubuque, 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, promises to pay from the source and as hereinafter provided, on the maturity
date indicated above, to
CEDE & CO.
or registered assigns, the principal sum of principal amount written out THOUSAND
DOLLARS in lawful money of the United States of America, on the maturity date shown
above, only upon presentation and.surrender hereof at the office of Wells Fargo Bank,
National Association, Paying Agent of this issue, or its successor, with interest on said
sum from the date hereof until paid at the rate per annum specified above, payable on June
1, 2009, 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 Bond as shown on
the records of ownership maintained by the Registrar as of the 15th day preceding .such
interest payment date. Interest shall be computed on the basis of a 360-day year of twelve
30-day months.
This Bond is issued pursuant to the provisions of Section 384.83 of the City Code
of Iowa, as amended, for the purpose of paying costs of water main replacements and
repairs, construction of water main extensions, and the acquisition and installation of
pump station radio communications equipment and facilities), in conformity to a Series
Resolution of the City Council of said City duly passed and approved.
-47-
Unless this certificate is presented by an authorized representative of The
Depository Trust Company; a limited purpose trust company ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other entity as
is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
Bonds maturing after June 1, 2016 may be called for redemption by the Issuer and
paid before maturity on said date or any date thereafter, 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' notice of redemption shall be given by first class mail to the registered
owner of the Bond. Failure to give such notice by mail to any registered owner of the
Bonds or any defect therein shall not affect the validity of any proceedings for the
redemption of the Bonds. All Bonds 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.
Ownership of this Bond may be transferred only by transfer upon the books kept
for such purpose by Wells Fargo Bank, National Association, the Registrar. Such transfer
on the books shall occur only upon presentation and surrender of this Bond at the office of
the Registrar as designated below, together with an assignment duly executed by the
owner hereof or his 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 bondholders of such change. All Bonds shall
be negotiable as provided in Article 8 of the Uniform Commercial Code and Section
384.83(5) of the Code of Iowa, subject to the provisions for registration and transfer
contained in the Series Resolution.
This Bond and the series of which it forms a part, other bonds ranking on a parity
therewith, and any additional bonds or notes which may be hereafter issued and
outstanding from time to time on a parity with said Bonds, as provided in the Series
Resolution of which notice is hereby given and is hereby made a part hereof, are payable
from and secured by a pledge of the Net Revenues of the Municipal Water Utility (the
"System"), as defined and provided in said Series Resolution. There has heretofore been
-48-
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 said System in each year for the payment
of the proper and reasonable expenses of operation and maintenance of said System and
for the establishment of a sufficient sinking fund to meet the principal of and interest on
this series of Bonds; and other bonds ranking on a parity therewith, as the same become
due. 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 said net earnings 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 Bond, have been
existent, had, done and performed as required by law.
IN TESTIMONY WHEREOF, said City by its City Council has caused this Bond
to be signed by the manual signature of its Mayor and attested by the manual signature of
its City Clerk; with the seal of said City impressed hereon, and authenticated by the
manual signature of an authorized representative of the Registrar, Wells Fargo Bank,
National Association, Des Moines, Iowa.
Item 1 1, figure 1 =Date of authentication:
Item 12, figure 1 =This is one of the Bonds described in the within mentioned
Series Resolution, as registered by Wells Fargo Bank, National
Association.
WELLS FARGO BANK, NATIONAL ASSOCIATION,
Registrar
By:
Authorized Signature
Item 13, figure 1 =Registrar and Transfer Agent:
Wells Fargo Bank, National Association
Paying Agent: Wells Fargo Bank, National Association
SEE REVERSE FOR- CERTAIN DEFINITIONS
Item 14, figure 1 = (Seal)
Item 15, figure 1 = [Signature Block]
-49-
CITY OF DUBUQUE, IOWA
By: Mayor's manual signature
Mayor
ATTEST:
By: City Clerk's manual signature
City Clerk
Item 16; figure 2 = [Assignment Block]
[Information Required for Registration]
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
(Social Security or Tax Identification No.
the within Bond and does hereby irrevocably constitute and appoint
attorney in fact to transfer the said Bond on the books kept for registration of the within
Bond, with full power of substitution in the premises.
Dated
(Person(s) executing this Assignment sign(s) here)
SIGNATURE
GUARANTEED
IMPORTANT -READ CAREFULLY
The signature(s) to this Power must correspond with the name(s) as written
upon the face of the certificate(s) or bonds} 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
-50-
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 Transferees}
Social Security or Tax Identification
Number of Transferee(s) _
Transferee is a(n):
Individual
Partnership
Corporation
Trust
*If the Bond is to be registered in the names of multiple individual owners, the names of
alI 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 Bond,
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 right of survivorship and not as tenants in
common
IA UNIF TRANS MIN ACT -
DCORNELLl591693.1 /MSWord\10422.085
..........Custodian..........
(Gust) (Minor)
under Iowa Uniform Transfers
to Minors Act ................
(State)
-51-