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Sewer Revenue Capital Loan Notes Series 2010ATHE CITY OF Dubuque .r-- D'1' T~ ~ Aq-AmedcaCi~ (.,,~ ' I 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 on Issuance of $1,141,000 Sewer Revenue Capital Loan Notes, Series 2010A (State of Iowa Revolving Fund Loan) DATE: December 15, 2009 Finance Director Ken TeKippe is recommending City Council approval of the suggested proceedings to complete action required on the Sewer Revenue Capital Loan Notes from the Iowa Water Pollution Control Works Financing Program under the State of Iowa Revolving Fund Loan (SRF) program. The loan funds will be used for Phase I, II and III of the reconstruction of North Fork Catfish Creek interceptor sanitary sewer. I concur with the recommendation and respectfully request Mayor and City Council approval. Michael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Kenneth J. TeKippe, Finance Director THE CITY OF ~ ~,. I~UB E Masterpiece on the Mississippi TO: Michael C. Van Milligen, City Manager FROM.: Kenneth J. TeKippe, Finance Director Dubuque AI-AIIIBdCBCIty q 2007 ~~ x~~~ -~. SUBJECT: Procedure to Complete Action on Issuance of $1,141,000 Sewer Revenue Capital Loan Notes, Series 2010A (State of Iowa Revolving Fund Loan) DATE: December 94, 2009 The purpose of this memorandum is to provide suggested proceedings to complete action required on the Sewer Revenue Capital Loan Notes from the Iowa Water Pollution Control Works Financing Program under the State of Iowa Revolving Fund Loan (SRF) program. This action will permit the City to take advantage of a 3% fixed interest rate for 20 years for one Note in the amount of $912,000 (with a .25% annual administrative fee and cone-time 1 % loan origination fee for the borrowing) and a second forgivable Note in the amount of $229,000. The loan funds will be used for Phase I, II and III of the reconstruction of North Fork Catfish Creek interceptor sanitary sewer. Reconstructing the sanitary sewer system will prevent inflow and infiltration of rain water during and following heavy rains. The public hearing for the loan was held at the June 16, 2008 City Council meeting. Engineering recommends closing the sewer loan for all three phases of the project in the amount of $1,141,000. This amount is based on the contract for phase one awarded in June and contract for phase two awarded in July and the contract for phase III awarded December 10, 2009. The proceedings include a resolution approving and authorizing the form of separate Loan and Disbursement Agreements for the $912,000 portion and for the $229,000 portion of the issuance, and authorizing the issuance of the above Notes to the Iowa Finance Authority (the "Authority"). The resolution approves and authorizes the form of Loan and Disbursement Agreements and authorizes the issuance of the Notes to the Iowa Finance Authority. The resolution also incorporates by reference the form of the Tax Exemption Certificate and Loan and Disbursement Agreements, copies of which are on file in the office of the City Clerk. The Tax Exemption Certificate sets out in detail a number of facts, promises and obligations which must be met and agreed to by~,the City in order to maintain the Notes as tax exempt. The Loan and Disbursement Agreements also set forth a number of covenants and agreements on the part of the City with respect to the repayment on the Loan. This is the final City Council action required on the Sewer Revenue Capital Loan Notes. A letter from Attorney William Noth detailing information on the loan is enclosed. KT/jg Enclosures cc: Barry Lindahl, City Attom~y Jenny Larson, Budget Director Jeanne Schneider, City Clerk ~~r``~'tl~ `vf~~.. (This Notice to be posted) Governmental Body Date of Meeting: Time of Meeting: Place of Meeting NOTICE AND CALL OF PUBLIC MEETING The City Council of Dubuque, Iowa. 2009. o'clock .M. 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: $1,141,000 Sewer Revenue Capital Loan Notes, Series 20.10A Approve forms of Tax Exemption Certificate and Loan and Disbursement Agreements. Series Resolution authorizing and providing for the issuance and securing the payment of $1,141,000 Sewer Revenue Capital Loan Notes, Series 2010A by the City of Dubuque, Iowa under the provisions of Chapter 384 of the Code of Iowa, providing for a method of payment thereof, approving Loan and Disbursement Agreements, and other related matters Such additional matters as are set forth on the additional page(s) attached hereto. (number} 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. City Clerk, Dubuque, Iowa 2009 The City Council of Dubuque, Iowa, met in session, in the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at o'clock .M., on the above date. There were present Mayor in the chair, and the following named Council Members: Absent: -2- Council Member moved that the forms of Tax Exemption Certificate and Loan and Disbursement Agreements be placed on file and approved. Council Member seconded the motion and the roll being called thereon, the vote was as follows: AYES: NAYS: Council Member introduced the following Resolution entitled "SERIES RESOLUTION AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SECURING THE PAYMENT OF $1,141,000 SEWER REVENUE CAPITAL LOAN NOTES, SERIES 2010A, BY THE CITY OF DUBUQUE, IOWA UNDER THE PROVISIONS OF CHAPTER 384 OF THE CODE OF IOWA, PROVIDING FOR A METHOD OF PAYMENT THEREOF, APPROVING LOAN AND DISBURSEMENT AGREEMENTS, AND OTHER RELATED MATTERS", and moved its adoption. Council Member seconded the motion to adopt. The roll was called and the vote was: AYES: NAYS: Whereupon the Mayor declared the following Resolution duly adopted: -3- RESOLUTION NO. SERIES RESOLUTION AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SECURING THE PAYMENT OF $1,141,000 SEWER REVENUE CAPITAL LOAN NOTES, SERIES 2010A BY THE CITY OF DUBUQUE, IOWA UNDER THE PROVISIONS OF CHAPTER 384 OF THE CODE OF IOWA, PROVIDING FOR A METHOD OF PAYMENT THEREOF, APPROVING LOAN AND DISBURSEMENT AGREEMENTS, AND OTHER 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 Sanitary Sewer System, and said revenues have not been pledged and are available for the payment of sewer revenue bonds or notes, subject to the following premises; and WHEREAS, by Resolution No. 437-08 passed and approved on December 15, 2008 (the "Master Resolution"), the City Council heretofore has authorized the issuance of $2,000,000 Sewer Revenue Capital Loan Notes, Series 2009A, for the purpose of financing the construction of the Series 2009A Project described therein, and to pay related costs of issuance; and WHEREAS, pursuant to the American Recovery and Reinvestment Act of 2009 ("ARRA"), and in accordance with the terms of the Forgivable Loan and Disbursement Agreement, the Iowa Finance Authority has authority to make and desires to make a forgivable loan to the City in the amount of $229,000, from funds available to the Iowa Finance Authority under the ARRA, for the purpose of assisting in financing a portion of the Project (defined herein); and WHEREAS, the notice of intention of the City Council to take action for the issuance of not to exceed $1,141,000 Sewer Revenue Capital Loan Notes has heretofore been duly published and no objections to such proposed action have been filed; and WHEREAS, Section 8.3 of the Master Resolution authorizes the issuance of additional Senior Bonds, including Senior SRF Bonds, by the City from time to time, if all of the conditions set forth therein are satisfied; and WHEREAS, the Council has determined to issue additional Senior SRF Bonds, and has determined that, upon passage of this Series Resolution all of the requirements of -4- Article VIII of the Master Resolution with respect to the issuance of additional Senior SRF Bonds will have been satisfied. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IN THE COUNTY OF DUBUQUE, STATE OF IOWA: ARTICLE I DEFINITIONS Section 1.1. Definitions. Except as otherwise provided below in this Article I, all words and terms defined in Article I of the Master Resolution shall have the same meanings in this Series Resolution as such defined words and terms are given in Article I of the Master Resolution. In addition, the following terms shall have the following meanings in this Series Resolution unless the text expressly or by necessary implication requires otherwise: "Additional Bonds" shall mean any sewer revenue bonds or notes or other obligations issued on a parity with the Notes in accordance with the provisions of Section 23 hereof. Provided, however, Additional Bonds which are SRF Obligations shall not be secured by the Reserve Fund and shall not be subject to the Reserve Fund Requirement. "Agreements" shall mean Loan and Disbursement Agreements dated as of the Closing between the City and the Original Purchaser relating to the Loan made to the City under the Program. "City" or "Issuer" shall mean the City of Dubuque, Iowa. "Closing" shall mean the date of execution of the Agreements and delivery of the Series 201 OA Bonds to the Original Purchaser and the funding of the Loan by the Trustee. "Loan" shall mean the total principal amount allocated by the Original Purchaser to the City under the Program, equal in amount to the aggregate principal amount of the Series 2010A Bonds. "Master Resolution" means the City Council Resolution No. 437-08, passed and approved on December I5, 2008, entitled "Master Resolution relating to the issuance of Sewer Revenue Bonds by the City of Dubuque, Iowa under the provisions of Chapter 3 84 of the Code of Iowa, authorizing and providing for the issuance and securing the payment of $2,000,000 Sewer Revenue Capital Loan -5- Notes, Series 2009A, providing for a method of payment thereof, and related matters," as the same may be amended from time to time. "Original Purchaser" means the Iowa Finance Authority, as the purchaser of the Series 201 OA Bonds from the City at the time of their original issuance. "Program" shall mean the Iowa Water Pollution Control Works Financing Program administered by the Original Purchaser. "Series 2010A Bonds" means the $1,141,000 Sewer Revenue Capital Loan Notes, Series 2010A, dated the date of delivery, authorized to be issued pursuant to this Series Resolution. "Series 2010A Costs of Issuance Account" means the account by that name within the Project Fund established in Section 5.1 of the Master Resolution. "Series 2010A Projects" shall mean the Projects being financed with the proceeds of the Series 2010A Bonds, consisting of the construction of the North Fork Catfish Creek Stormwater and Sanitary Sewer Improvements, Phase I Sanitary Sewer Project, as described generally in the Agreements and more particularly in the plans and specifications on file from time to time with the City Clerk. "Series 2010A Projects Account" means the account by that name within the Project Fund established in Section 5.1 of the Master Resolution. "Series 2010A Rebate Account" means the account by that name within the Rebate Fund established in Section 6.10 of the Master Resolution. "Series Resolution" means this Resolution of the Council. "Tax Exemption Certificate" means the Tax Exemption Certificate executed by the Treasurer and delivered at the time of issuance and delivery of the Series 2010A Bonds. "Trustee" shall mean Wells Fargo Bank, National Association, with its principal office located in the City of Des Moines, Iowa, and its successors and any corporation resulting from or surviving any consolidation or merger to which it or its successors may be a party and any successor trustee under the Program. -6- ARTICLE II THE SERIES 2010A BONDS Section 2.1. _Series 2010A Bonds -Authorization and Purpose. Pursuant to the provisions of the Master Resolution and in particular Section 8.3 thereof, there are hereby authorized to be issued, negotiable, serial, fully registered Sewer Revenue Capital Loan Notes, Series 2010A, in the aggregate principal amount of $1,141,000, dated the date of delivery, for the purpose of constructing the Series 2010A Projects and paying Project Costs relating thereto, and to pay related Costs of Issuance. The Series 2010A Bonds shall be issued as Senior SRF Bonds under the terms of the Master Resolution, shall be designated "CITY OF DUBUQUE, IOWA, SEWER REVENUE CAPITAL LOAN NOTES, SERIES 201 OA", for the purpose of paying costs of the Project. The Council, pursuant to Sections 384.24A and 384.82 of the Code of Iowa, hereby finds and determines that it is necessary and advisable to issue said Notes authorized by the Agreements and this Resolution. The Series 2010A 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 Series Resolution. The Series 2010A 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 of the Council, and shall be fully registered as to both principal and interest as provided in this Series 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 2010A Bonds may be in the denomination of $1,000 or multiples thereof and shall at the request of the Original Purchaser be initially issued in the respective denominations of $912,000 numbered R-1 and $229,000 numbered R-2. Sewer Revenue Capital Loan Notes, Series 2010A, of the Issuer in the amount of $1,141,000, shall be issued to evidence the obligations of the Issuer under the Agreements pursuant to the provisions of Sections 384.24A and 384.82 of the Code of Iowa for the aforesaid purpose. The Series 2010A Bonds shall be designated "SEWER REVENUE CAPITAL LOAN NOTE, SERIES 2010A", be dated the date of delivery, and bear interest at the rate of 3.0% per annum from the date of each advancement made under the Agreements, until payment thereof, at the office of the Paying Agent, said interest payable on June 1, 2010, and semi-annually thereafter on the 1st day of June and December in each year until maturity as set forth on the Debt Service Schedules attached to the Agreements as Exhibit A and incorporated herein by this reference. As set forth on -7- said Debt Service Schedules, principal shall be payable on June 1, 2011 and annually thereafter on the 1st day of June in the amounts set forth therein until principal and interest are fully paid, except that the final installment of the entire balance of principal and interest, if not sooner paid, shall become due and payable on June 1, 2030. Notwithstanding the foregoing or any other provision hereof, principal and interest shall be payable as shown on said Debt Service Schedules until completion of the Project, at which time the final Debt Service Schedules shall be determined by the Trustee based upon actual advancements, final costs and completion of the Project, all as provided in the administrative rules governing the Program. Payment of principal and interest on the Notes shall at all times conform to said Debt Service Schedules and the rules of the Program. In addition to the payment of principal of and interest on the Series 2010A Bonds, the City also agrees to pay the Initiation Fee and the Servicing Fee as defined and in accordance with the terms of the Agreements. Section 2.2. Issuance of Series 2010A Bonds in Certificated Farm. The Series 2010A Bonds shall be issued as Bonds in Authorized Denominations and may at the request of the Original Purchaser be issued as two single Series 2010A Bonds in the full authorized amount thereof, and shall be registered in the name of the Original Purchaser. Sectian 2.3. Appointment of Registrar. The Treasurer is hereby appointed as Registrar for the Series ZO l OA Bonds under the terms of this Series Resolution. Section 2.4. Execution, Authentication and Delivery of the Series 2010A Bonds. Upon the adoption of this Resolution, the Mayor and City Clerk shall execute and deliver the Series 2010A Bonds to the Registrar, who shall authenticate the same and deliver the same to or upon order of the Original Purchaser. No such Series 2010A 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 Series 2010A Bond a Certificate of Authentication substantially in the form of the Certificate herein set forth. Such Certificate upon any such Series 2010A Bond executed on behalf of the Issuer shall be conclusive evidence that the Series 2010A Bond so authenticated has been duly issued under this Series Resolution and that the holder thereof is entitled to the benefits of this Series Resolution. Section 2.5. Forgivable Loan. Notwithstanding anything in this Series Resolution to the contrary, with regard to Note R-2, provided that the Issuer proceeds with diligence to completion of the Project and complies with all applicable ARRA requirements as fully set forth in section 14 of the Forgivable Loan and Disbursement Agreement (the "Forgivable Loan"), (i) no payments of interest, principal, Servicing Fee or Initiation Fee shall be due under the Forgivable Loan during construction of the -S- Project and (ii) following completion of the Project and receipt by the Iowa Finance Authority of a certificate of completion from the Issuer, the Forgivable Loan shall be forgiven, in full, by the Iowa Finance Authority, and no payments of principal or interest shall be due under the Forgivable Loan and Disbursement Agreements. ARTICLE III REDEMPTION OF BONDS Section 3.1. Optional Redemption. The Series 2010A Bonds are subject to optional redemption at a price of par plus accrued interest (i) on any date upon receipt of written consent of the Original Purchaser or (ii) in the event that all or substantially all of the Series 2010A Projects are damaged or destroyed. Any optional redemption of the Series 2010A Bonds may be made from any funds regardless of source, in whole or from time to time in part, in inverse order of maturity, by giving not less than thirty (30) days notice of redemption by certified or registered mail to the Original Purchaser (or any other registered owner of the Series 2010A Bonds). The terms of redemption shall be par, plus accrued interest to date of call. The Series 2010A Bonds are also subject to mandatory redemption as set forth in Section 5 of the Agreements. ARTICLE IV DELIVERY AND APPLICATION OF PROCEEDS Section 4.1. Application of Series 2010A Bond Proceeds. The Series 2010A Bonds shall be delivered as provided in Sections 6.1 and 6.2 and the proceeds thereof shall be applied as follows: (i) An amount sufficient to pay the Costs of Issuance of the Series 2010A Bonds shall be deposited into the Series 2010A Costs of Issuance Account. (ii) The balance of proceeds shall be deposited into the Series 2010A Projects Account of the Project Fund and applied thereafter to pay Project Costs of the Series 2010A Projects. Section 4.2. No Adjustment to Debt Service Reserve Requirement. The Series 2010A Bonds shall be issued as Senior SRF Bonds under the Master Resolution, and shall not be secured by or payable from amounts held in the Debt Service Reserve Fund established in the Master Resolution. Upon issuance of the Series 2010A Bonds, the amount to be accumulated and maintained in the Debt Service Reserve Fund shall not be -9- increased, but shall continue to remain equal to 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 Series 2010A Bonds and which are not Senior SRF Bonds. ARTICLE V TAX PROVISIONS Section 5.1. Disposition of Bond Proceeds; Arbitrage Not Permitted. The City reasonably expects and covenants that no use will be made of the proceeds from the issuance and sale of the Series 201 OA Bonds issued hereunder which will cause any of the Series 2010A 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 2010A Bonds it will comply with the requirements of said statute and regulations issued thereunder. To the best knowledge and belief of the City, 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 2010A Bonds will be used in a manner that would cause such Bonds to be arbitrage bonds. Without limiting the generality of the foregoing, the City 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 Series Resolution. The Treasurer is hereby directed to make and insert all calculations and determinations necessary to complete the Tax Exemption Certificate in all respects and to execute and deliver the Tax Exemption Certificate at issuance of the Series 2010A Bonds to certify as to the reasonable expectations and covenants of the City at that date. The City covenants that it will treat as yield restricted any proceeds of the Series 2010A 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 2010A Bonds, the City shall treat the same for the purpose of restricted yield as held in proportion to the original principal amounts of each issue. The City covenants that it will exceed any investment yield restriction provided in this Series 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 2010A Bonds to be classified as arbitrage bonds under Section 148(a) and (b) of the Code. The City covenants that it will proceed with due diligence to spend the proceeds of the Series 2010A Bonds for the purpose set forth in this Series Resolution. The City - 10- 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 City 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 2010A Bonds not to be exempt from federal income taxes in the hands of holders under the provisions of the Code. Section 5.2. Additional Covenants, Representations and Warranties of the Cam. The City certifies and covenants with the purchasers and holders of the Series 201 OA Bonds from time to time outstanding that the City through its officers, (a) will 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 City and the owners of the Series 2010A 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 2010A 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 City in such compliance. ARTICLE VI MISCELLANEOUS PROVISIONS Section 6.1. Delivery of Series 2010A Bonds. The City shall deliver the executed Agreements and the Series 2010A Bonds to the Original Purchaser at the price of par on the date of Closing. Delivery of the executed Agreements and the Series 2010A Bonds shall be made to the Original Purchaser as soon as practicable after the effective date of this Series Resolution. Section 6.2. Approval of Agreements. The Agreements in substantially the form presented at this meeting of the Council is hereby authorized and approved, and the Mayor and City Clerk are authorized to execute and deliver the Agreements, with such changes therein as such officials deem appropriate, for and on behalf of the City, such officers' signatures thereon being conclusive evidence of such officials' and the City's approval thereof. Section b.3. General Authorization. From and after the date of adoption of this Series Resolution, the officers, employees and agents of the City are hereby authorized to do all such acts and things and to execute and deliver any and all other documents, -11- agreements, certificates and instruments relating to the Series 2010A Bonds, the investment of the proceeds thereof and the other transactions contemplated on the part of the City by this Series Resolution, including, but not limited to, the Tax Exemption Certificate referred to in Section 5.1 hereof. Section 6.4. Construction. Except to the extent set forth herein, all of the applicable terms,. conditions and provisions of the Master Resolution shall be deemed and construed to apply to the Series 2010A Bonds and are hereby incorporated by reference and made a part hereof to the same extent as if fully set forth herein. Except as may otherwise be provided herein, the Master Resolution shall remain in full force and effect. Section 6.5. Severability. If any section, paragraph, or provision of this Series 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 6.6. Repeal of Conflicting Ordinances or Resolutions and Effective Date. All other ordinances, resolutions and orders, or parts thereof, in conflict with the provisions of this Series Resolution are, to the extent of such conflict, hereby repealed; and this Series Resolution shall be in effect from and after its adoption. PASSED AND APPROVED this 2009. day of Mayor ATTEST: City Clerk -12- 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. WITNESS my hand and the seal of said Municipality hereto affixed this day of , 2009. City Clerk, Dubuque, Iowa SEAL -I3- EXHIBIT A FORM OF SERIES 2010A BONDS REGISTERED Bond No. R- Rate 3.00% REGISTERED STATE OF IOWA $ CITY OF DUBUQUE, IOWA SEWER REVENUE CAPITAL LOAN NOTES REGISTERED OWNER: PRINCIPAL AMOUNT: SERIES 2010A Final Maturity June 1, 2030 Dated Date 2010 IOWA FINANCE AUTHORITY Item 10, figure 1 = or registered assigns, the principal sum of (principal amount written out) in lawful money of the United States of America, on the maturity dates and in the principal amounts set forth on the Debt Service Schedule attached hereto and incorporated herein by this reference, with interest on said sum from the date of each advancement made under a certain Loan and Disbursement Agreement [Option for Note R-2: Forgivable Loan and Disbursement AgreementJ, dated as of the date hereof until paid at the rate of 3.0% per annum, payable on June 1, 2010, and semi-annually thereafter on the 1st day of June and December in each year. As set forth on said Debt Service Schedule, principal shall be payable on June 1, 2011 and annually thereafter on the first day of June in the amounts set forth therein until principal and interest are fully paid, except that the final installment of the entire balance of principal and interest, if not sooner paid, shall become due and payable on June 1, 2030. Notwithstanding the foregoing or any other provision hereof, principal and interest shall be payable as shown on said Debt Service Schedule until completion of the Project, at which time the final Debt Service Schedule shall be determined by the Trustee and attached hereto based upon actual advancements, final costs and completion of the Project, all as provided in the administrative rules governing the Iowa Water Pollution Control Works Financing Program. Payment of principal and interest of this Note shall at all times conform to said -14- Debt Service Schedule and the rules of the Iowa Water Pollution Control Works Financing Program. Interest and principal shall be paid to the registered holder of the Note as shown on the records of ownership maintained by the Registrar as of the 15th day preceding such interest payment date. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. This Note is issued pursuant to the provisions of Sections 384.24A and 384.83 of the Code of Iowa, for the purpose of paying costs of acquisition, construction, reconstruction, extending, remodeling, improving, repairing and equipping all or part of the System, including constructing the North Fork Catfish Creek Stormwater and Sanitary Sewer Improvements, Phase I Sanitary Sewer Project (as defined in the Series Resolution hereinafter referred to), and evidences amounts payable under a certain Loan and Disbursement Agreement) [Option for Note R-2: Forgivable Loan and Disbursement Agreement), dated as of the date hereof, in conformity to a Resolution of the City Council of said City duly passed and approved. For a complete statement of the revenues and funds from which and the conditions under which this Note is payable, a statement of the conditions under which additional notes or bonds of equal standing may be issued, and the general covenants and provisions pursuant to which this Note is issued, reference is made to the above-described Loan and Disbursement Agreements and Resolution. This Note is subject to optional redemption at a price of par plus accrued interest (i) on any date upon receipt of written consent of the Iowa Finance Authority or (ii) in the event that all or substantially all of the Series 2010A Projects are damaged or destroyed. Any optional redemption of this Note may be made from any funds regardless of source, in whole or from time to time in part, in inverse order of maturity, by lot by giving thirty (30) days notice of redemption by certified or registered mail, to the Iowa Finance Authority (or any other registered owner of the Note). This Note is also subject to mandatory redemption as set forth in Section 5 of the Agreements. Ownership of this Note may be transferred only by transfer upon the books kept for such purpose by the Registrar. Such transfer on the books shall occur only upon presentation and surrender of this Note 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 Notes shall be negotiable as provided in Article 8 of the Uniform Commercial Code, subject to the provisions for registration and transfer contained in the Master Resolution. -15- This Note, other obligations currently outstanding, and such other revenue bonds or notes of the Issuer as may in the future be issued on a parity therewith as Senior Bonds under the Master Resolution, are equally and ratably secured by pledge of the "Net Revenues" of the System, as defined in the Master Resolution. THE NOTES AND THE INTEREST THEREON ARE PAYABLE SOLELY AND ONLY FROM THE NET REVENUES. NEITHER THE PAYMENT OF THE PRINCIPAL NOR ANY PART THEREOF NOR ANY INTEREST THEREON CONSTITUTES A DEBT, LIABILITY OR OBLIGATION OF THE ISSUER WITHIN THE MEANING OF ANY CONSTITUTIONAL, STATUTORY OR CHARTER PROVISION WHATSOEVER. THE ISSUER HAS NO AUTHORITY TO LEVY ANY TAXES TO PAY THE NOTES. The Issuer has covenanted and hereby covenants and agrees at all times while any Notes are Outstanding and unpaid to budget for and collect amounts in respect of the use of the System fully sufficient at all times to: (i) provide for 100% of the budgeted Operation and Maintenance Expenses of the System and for the accumulation in the Revenue Fund of a reasonable reserve therefor, and (ii) produce Net Revenues in each Fiscal Year which will: (a) equal at least 1 I O% of the Debt Service Requirement on all Senior Bonds then Outstanding for the year of computation, (b) enable the Issuer to make all required payments, if any, into the Debt Service Reserve Fund and the Rebate Fund, (c) enable the Issuer to accumulate an amount which, in the judgment of the Council, is adequate to meet the costs of major renewals, replacements, repairs, additions, betterments and improvements to the System, necessary to keep the wine in good operating condition or as is required by any governmental agency having jurisdiction over the System, and (d) remedy all deficiencies in required payments into any of the funds and accounts established under the Master Resolution from prior Fiscal Years. The Master Resolution contains a more particular statement of the covenants and provisions securing the Notes, the conditions under which the owner of this Note may enforce covenants (other than the covenant to pay Principal of and interest on this Note when due from the sources provided, the right to enforce which is unconditional), the conditions upon which additional revenue bonds may be issued on a parity or achieve parity status with this Note under the Master Resolution, and the conditions upon which the Master Resolution may be amended with the consent of the owners of not less than two-thirds in aggregate Principal amount of the Bonds Outstanding or the issuer of any Credit Facility, if any, of such Bonds. Upon the occurrence of an Event of Default under the Master Resolution, the owner of this Note shall be entitled to the remedies provided by the Master Resolution. 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, -16- to be done, or to be performed precedent to the lawful issue of this Note, have been existent, had, done and performed as required by law. IN TESTIMONY WHEREOF, said Issuer by its City Council has caused this Note to be signed by the manual signature of its Mayor and attested by the manual signature of its City Clerk, and authenticated by the manual signature of an authorized representative of the Registrar, the City Treasurer. ATTEST: By: City Clerk (SEAL) Date of authentication: By: CITY OF DUBUQUE, IOWA Mayor This is one of the Series 2010A Bonds described in the within mentioned Series Resolution, as registered by the City Treasurer. CITY TREASURER, Registrar By: Authorized Signature Registrar and Transfer Agent: City Treasurer Paying Agent: City Treasurer ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto (Social Security or Tax Identification No. the within Revenue Bond and does hereby irrevocably constitute and appoint attorney in fact to transfer the said Revenue Bond on the books kept for registration of the within Revenue Bond, with full power of substitution in the premises. Dated -17- (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 bond(s) in every particular without alteration or enlargement or any change whatever. Signature guarantee must be provided in accordance with the prevailing standards and procedures of the Registrar and Transfer Agent. Such standards and procedures may require signature to be guaranteed by certain eligible guarantor institutions that participate in a recognized signature guarantee program. INFORMATION REQUIRED FOR REGISTRATION OF TRANSFER Name of Transferee(s) Address of Transferee(s) Social Security or Tax Identification Number of Transferee(s) Transferee is a(n): Individual* Partnership Corporation Trust *If the Bond is to be registered in the names of multiple individual owners, the names of all such owners and one address and social security number must be provided. The following abbreviations, when used in the inscription on the face of this 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 -18- JT TEN - as joint tenants with right of survivorship and not as tenants in common IA UNIF TRANS MIN ACT - ..........Custodian.......... (Gust) (Minor) under Iowa Uniform Transfers to Minors Act ................ (State) DCORNELU 623662.1 /MSWord110422.082 - 19-