Sewer Revenue Capital Loan Notes Seies 2013 SRF_$3.048MMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
Dubuque
kital
All- America City
II h/
2012
SUBJECT: Procedure to Complete Action on Issuance of $3,048,000 Sewer Revenue
Capital Loan Notes, Series 2013 (State of Iowa Revolving Fund Loan)
DATE: March 25, 2013
Finance Director Ken TeKippe recommends City Council approval of the suggested
proceedings to complete action required on the $3,048,000 Sewer Revenue Capital
Loan Notes from the State of Iowa Revolving Fund Loan Iowa Water Pollution Control
Works Financing Program. The borrowing permits the City to take advantage of the
1.75% fixed interest rate for 20 years, with a .25% annual administrative fee associated
with the borrowing. There is a one -time .50% loan origination fee for the borrowing.
The loan funds will be used to provide funds to pay the costs of acquisition,
construction, reconstruction, extending, remodeling, improving, repairing and equipping
all or part of the Municipal Sewer System, including those costs associated with the
acquisition and installation of microturbines, compression skid, heat recovery units and
related mechanical, electrical and site work at the Water & Resource Recovery Center
to utilize anaerobic digester gas in a combined heat and power facility.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
brit44 krt., italy,
Michael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
Kenneth J. TeKippe, Finance Director
Jennifer Larson, Budget Director
Masterpiece on the Mississippi
X
TO: Michael C. Van Milligen, City Manager
FROM: Kenneth J. TeKippe, Finance Director
DATE: March 25, 2013
SUBJECT: Procedure to Complete Action on Issuance of $3D48,000 Sewer Revenue Capital Loan Notes, Series
2013 (State of Iowa Revolving Fund Loan)
DISCUSSION
The purpose of this memorandum is to provide suggested proceedings to complete action required on the $3,048,000 Sewer
Revenue Capital Loan Notes from the State of Iowa Revolving Fund Loan Iowa Water Pollution Control Works Financing
Program. The borrowing permits the City to take advantage of the 1.75% fixed interest rate for 20 years with a .25% annual
administrative fee associated with the borrowing. There is a one -time .50% loan origination fee for the borrowing.
The loan funds will be used to provide funds to pay the costs of acquisition, construction, reconstruction, extending,
remodeling, improving, repairing and equipping all or part of the Municipal Sewer System, including those costs associated
with the acquisition and installation of microturbines, compression skid, heat recovery units and related mechanical, electrical
and site work at the Water & Resource Recovery Center to utilize anaerobic digester gas in a combined heat and power
facility.
The resolution approves and authorizes the form of Loan and Disbursement Agreement and authorizes the issuance of the
Project Note to the Iowa Finance Authority. The Loan and Disbursement Agreement also sets forth a number of covenants
and agreements on the part of the City with respect to the repayment on the Loan. 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 this Note
as tax exempt.
This is the final City Council action required on the Project Note. A copy of a March 22, 2013 letter from Attorney R. Mark
Cory with information on the loan is enclosed.
Prepared by:
cc:
KT /eml
Enclosures
cc: Barry Lindahl, City Attorney
Jenny Larson, Budget Director
Kevin Firnstahl, City Clerk
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
R. Mark Cory
rcory@ahlerslaw.com
March 22, 2013
Via Overnight Delivery
Mr. Ken TeKippe
Finance Director
City of Dubuque
50 West 13th Street
Dubuque, Iowa 52001
RE: City of Dubuque, State of Iowa
$3,048,000 Sewer Revenue Capital Loan Notes, Series 2013
(State of Iowa Revolving Fund Loan)
Dear Ken:
Enclosed are documents to cover Council action in connection with the
authorization for the issuance of the above Notes.
A. The Council procedure consists of the following:
Direct Dial:
(515)246 -0378
1. Resolution authorizing the issuance of the Notes. The resolution also
incorporates by reference the form of the Tax Exemption Certificate.
There are blank spaces appearing in the form of Note 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.
2. 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 City in order to maintain this Note as tax exempt. This Certificate contains some
blank spaces relating to matters of information dependent upon the resale price of the
Notes 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
WISHARO & BAIL? - 1888; GUERNSEY & BAILY - 1893; BAIL? & STIPP - 1901: STIPP, PERRY, BANNISTER & STARZINGER - 1914; BANNISTER, CARPENTER,
AHLERS & COONEY - 1950: AHLERS, COONEY, DORWEILER, ALLBEE, HAYNIE & SMITH - 1974: AHLERS, COONEY, DORWEILER. HAYNIE. SMITH & ALLBEE, P.C. - 1990
March 22, 2013
Page 2
spaces will be provided to you. This certificate should be signed and the original and all
copies returned to our office.
B. Closing Certificates and Documents:
1. Loan and Disbursement Agreement. Please execute all copies and return the
same to our office. We will obtain the signature of the purchaser and return a fully
executed copy for your file.
2. Delivery Certificate. This certificate also should be signed and the original
and all copies returned 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. Form of Note No. R -1. The Note should be manually signed by the Mayor
and the City Clerk on the lines indicated on page 2, the seal of the City should be
impressed as indicated and the Finance Director should manually execute as the Registrar
where indicated. The date of authentication and date of delivery are not known at this
time and should be left blank; both dates will be inserted as of the actual closing date of
the Loan. The completed Note should be returned to us for holding prior to closing.
5. Form 8038 -G -- Information Return for Tax Exempt Governmental
Obligations. Please sign, but do not date, and return the form to us for filing purposes.
Tax Exemption
The Tax Exemption Certificate is an important document and contains important
information concerning the calculated yield on the Notes and a number of covenants and
obligations on the part of the City. This certificate should be retained along with all of
your records regarding the use of proceeds, expenditure dates and investment information
needed to comply with IRS guidelines (See Exhibit attached). 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 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 must
not be sold or diverted to any private or nonpublic use unless the significance of that
action is reviewed by bond counsel.
March 22, 2013
Page 3
We understand that the proceeds of the loan will be used for the purpose of paying
costs of construction of certain improvements and extensions to the Municipal Sanitary
Sewer System of the City. All of the financed facilities are expected to be owned by the
City and used by the public generally, including industrial users. We understand that
there are no contractual arrangements or agreements of any sort between the City and any
contributing industry using the municipal system with respect to rates or use of any part
of the system. We recognize that contributing industries using the system may be subject
to additional surcharges above the current user charges, depending on the strength and
volume of the waste they generate. However, any such surcharges must be imposed by
virtue of City ordinances and apply to all entities meeting the standards set forth therein.
No other charges or payments should be imposed or paid to the City by any contributing
industry for wastewater treatment services or Project - related construction and acquisition
activities beyond those mandated by ordinance for certain classes of users. These
understandings are reflected in the Tax Exemption Certificate, so please let me know
immediately if our understandings are not correct in any respect.
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 Note proceeds fully within three years, that matter should
be referred to us.
This Note is also issued under the expectation that you will be exempt from the
requirement to rebate arbitrage earnings to the United States Government, because you
will spend the gross proceeds of the Notes within six months of the date of issue. If for
any reason it appears you will not meet this spending requirement and no other
exemption applies, the matter should be brought to our attention immediately.
These Notes are also issued under the expectation that the County will be exempt
from the requirement to rebate arbitrage earnings to the United States Government since
you intend to spend the proceeds of the Notes within 18 months of issuance in
accordance with the schedule described in Section 3.3 of the Tax Exemption Certificate.
This Note also is issued under the expectation that the City will be exempt from
the requirement to rebate arbitrage earnings to the United States Government since you
intend to spend the proceeds of the Note for construction purposes within two (2) years of
issuance and meet the other requirements of the two -year expenditure exemption from the
rebate regulations.
March 22, 2013
Page 4
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 this
Note. 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.
Extra copies of the proceedings are enclosed to be completed as the original and
certified back to our office at your first opportunity.
Should you have any questions, or if we can be of any assistance in completing the
enclosed items, please do not hesitate to contact me.
Very trey you
R. Mark Cory
FOR THE FIRM
RMC :jas
Enclosures
cc: Jenny Larson
00931865 -1 \10422 -144
(This Notice to be posted)
NOTICE AND CALL OF PUBLIC MEETING
Governmental Body: The City Council of the City of Dubuque, State of Iowa.
Date of Meeting: April 1, 2013.
Time of Meeting: o'clock .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:
$3,048,000 Sewer Revenue Capital Loan Notes, Series 2013.
• Approve form of Tax Exemption Certificate.
• Resolution approving and authorizing a form of Loan and Disbursement
Agreement by and between the City of Dubuque, Iowa, and the Iowa Finance
Authority, and authorizing and providing for the issuance and securing the
payment of $3,048,000 Sewer Revenue Capital Loan Notes, Series 2013, of the
City of Dubuque, Iowa, under the provisions of the City Code of Iowa, and
providing for a method of payment of said Notes.
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 the governmental body.
City Clerk, City of Dubuque, State of Iowa
The City Council of the City of Dubuque, State of Iowa, met in
April 1, 2013
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:
- 1 -
Council Member moved that the form of Tax
Exemption Certificate and Loan and Disbursement Agreement 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 "A RESOLUTION APPROVING AND AUTHORIZING A FORM OF LOAN
AND DISBURSEMENT AGREEMENT BY AND BETWEEN THE CITY OF
DUBUQUE, IOWA AND THE IOWA FINANCE AUTHORITY, AND
AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SECURING THE
PAYMENT OF $3,048,000 SEWER REVENUE CAPITAL LOAN NOTES, SERIES
2013, OF THE CITY OF DUBUQUE, IOWA, UNDER THE PROVISIONS OF THE
CITY CODE OF IOWA, AND PROVIDING FOR A METHOD OF PAYMENT OF
SAID NOTES ", 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:
-2-
Resolution No.
A RESOLUTION APPROVING AND AUTHORIZING A
FORM OF LOAN AND DISBURSEMENT AGREEMENT
BY AND BETWEEN THE CITY OF DUBUQUE, IOWA
AND THE IOWA FINANCE AUTHORITY, AND
AUTHORIZING AND PROVIDING FOR THE ISSUANCE
AND SECURING THE PAYMENT OF $3,048,000 SEWER
REVENUE CAPITAL LOAN NOTES, SERIES 2013, OF
THE CITY OF DUBUQUE, IOWA, UNDER THE
PROVISIONS OF THE CITY CODE OF IOWA, AND
PROVIDING FOR A METHOD OF PAYMENT OF SAID
NOTES
WHEREAS, the City Council of the City of Dubuque, Iowa, sometimes
hereinafter referred to as the "Issuer ", has heretofore established charges, rates and rentals
for services which are and will continue to be collected as system revenues of the
municipal sewer system, sometimes hereinafter referred to as the "System ", and said
revenues have not been pledged and are available for the payment of Sewer Revenue
Capital Loan Notes, Series 2013, subject to the following premises; and
WHEREAS, Issuer proposes to issue its Sewer Revenue Capital Loan Notes,
Series 2013, to the extent of $3,048,000, for the purpose of defraying the costs of the
Project as set forth in Section 1 of this Resolution; and, it is deemed necessary and
advisable and in the best interests of the City that a form of Loan and Disbursement
Agreement by and between the City and the Iowa Finance Authority, be approved and
authorized; and
WHEREAS, there were issued $2,000,000 Sewer Revenue Capital Loan Notes,
Series 2009A, $1,141,000 Sewer Revenue Capital Loan Notes, Series 2010A and
$64,885,000 Sewer Revenue Capital Loan Notes, Series 2010E part of which remain
outstanding and are a lien on the net revenues of the System (the "Outstanding
Obligations "). In the resolution authorizing the issuance of the Outstanding Obligations
it is provided that additional revenue notes or bonds may be issued on a parity with the
outstanding notes or bonds, for the costs of future improvements and extensions to the
System, provided that there has been procured and placed on file with the City Clerk, a
statement complying with the conditions and limitations therein imposed upon the
issuance of said parity notes or bonds; and
-3-
WHEREAS, the Original Purchaser of the current issue of Notes also purchased
and holds the Outstanding Obligations issue and has waived any requirement in the
resolution authorizing the Outstanding Obligations to obtain a "parity certificate" from an
independent auditor, and hereby consents to the current issue on an equal parity to the
Outstanding Obligations; and
WHEREAS, the notice of intention of Issuer to take action for the issuance of
$3,048,000 Sewer Revenue Capital Loan Notes, Series 2013, has heretofore been duly
published and no objections to such proposed action have been filed.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF DUBUQUE, STATE OF IOWA:
Section 1. Definitions. The following terms shall have the following meanings
in this 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 21 hereof.
♦ "Agreement" shall mean a Loan and Disbursement Agreement dated
as of the Closing between the City and the Original Purchaser relating to the Loan
made to the City under the Program.
♦ " City Clerk" shall mean the City Clerk or such other officer of the
successor Governing Body as shall be charged with substantially the same duties
and responsibilities.
♦ "Closing" shall mean the date of delivery of the Note to the Original
Purchaser and the funding of the Loan by the Trustee.
♦ "Corporate Seal" shall mean the official seal of Issuer adopted by the
Governing Body.
♦ "Fiscal Year" shall mean the twelve months' 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; provided, that the requirements of
-4-
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, or its successor in
function with respect to the operation and control of the System.
♦ "Independent Auditor" shall mean an independent firm of certified
public accountants or the Auditor of State.
♦ "Issuer" and "City" shall mean the City of Dubuque, Iowa.
♦ "Loan" shall mean the principal amount allocated by the Original
Purchaser to the City under the Program, equal in amount to the principal amount
of the Notes.
♦ "Net Revenues" shall mean gross earnings of the System after
deduction of Current Expenses; "Current Expenses" shall mean and include the
reasonable and necessary cost of operating, maintaining, repairing and insuring the
System, including purchases at wholesale, if any, salaries, wages, and costs of
materials and supplies, but excluding depreciation and principal of and interest on
the Notes and any Parity Obligations or payments to the various funds established
herein; capital costs, depreciation and interest or principal payments are not
System expenses.
♦ "Notes" or "Note" shall mean $3,048,000 Sewer Revenue Capital
Loan Notes, Series 2013, authorized to be issued by this Resolution.
♦ "Original Purchaser" shall mean the Iowa Finance Authority, as the
purchaser of the Notes from Issuer at the time of their original issuance.
"Outstanding Obligations" shall mean the Sewer Revenue Capital Loan
Notes, 2009A, dated January 14, 2009, issued in accordance with a resolution
adopted , 2009 $ of which obligations are still
outstanding and unpaid and remain a lien on the Net Revenues of the System;
Sewer Revenue Capital Loan Notes, Series 2010A, dated January 13, 2010 issued
in accordance with a resolution adopted , 2010 $ of
which obligations are still outstanding and unpaid and remain a lien on the Net
Revenues of the System; and Sewer Revenue Capital Loan Notes, Series 2010E,
dated August 18, 2010 issued in accordance with a resolution adopted
-5-
, $ of which obligations are still outstanding and
unpaid and remain a lien on the Net Revenues of the System.
♦ "Parity Obligations" shall mean notes or bonds payable solely from
the Net Revenues of the System on an equal basis with the Notes herein authorized
to be issued and shall include Additional Bonds as authorized to be issued under
the terms of this Resolution and the Outstanding Obligations.
♦ "Paying Agent" shall mean the Finance Director, or such successor
as may be approved by Issuer as provided herein and who shall carry out the
duties prescribed herein as Issuer's Agent to provide for the payment of principal
of and interest on the Notes as the same shall become due.
♦ "Permitted Investments" shall mean:
direct obligations of (including obligations issued or held in book
entry form on the books of) the Department of the Treasury of the United
States of America;
cash (insured at all times by the Federal Deposit Insurance
Corporation or otherwise collateralized with obligations described in the
above paragraph);
obligations of any of the following federal agencies which
obligations represent full faith and credit of the United States of America,
including:
- Export - Import Bank
- Farm Credit System Financial Assistance Corporation
- USDA - Rural Development
- General Services Administration
- U.S. Maritime Administration
- Small Business Administration
- Government National Mortgage Association (GNMA)
- U.S. Department of Housing & Urban Development (PHA's)
- Federal Housing Administration
repurchase agreements whose underlying collateral consists of the
investments set out above if the Issuer takes delivery of the collateral either
directly or through an authorized custodian. Repurchase agreements do not
include reverse repurchase agreements;
-6-
senior debt obligations rated "AAA" by Standard & Poor's
Corporation (S &P) or "Aaa" by Moody's Investors Service Inc. (Moody's)
issued by the Federal National Mortgage Association or the Federal Home
Loan Mortgage Corporation;
U.S. dollar denominated deposit accounts, federal funds and banker's
acceptances with domestic commercial banks which have a rating on their
short-term certificates of deposit on the date of purchase of "A -1" or "A-
1+" by S &P or "P -1" by Moody's and maturing no more than 360 days after
the date of purchase (ratings on holding companies are not considered as
the rating of the bank);
commercial paper which is rated at the time of purchase in the single
highest classification, "A -1 +" by S &P or "P -1" by Moody's and which
matures not more than 270 days after the date of purchase;
investments in a money market fund rated "AAAm" or "AAAm -G"
or better by S &P;
pre- refunded Municipal Obligations, defined as any bonds or other
obligations of any state of the United States of America or of any agency,
instrumentality or local governmental unit of any such state which are not
callable at the option of the obligor prior to maturity or as to which
irrevocable instructions have been given by the obligor to call on the date
specified in the notice; and (a) which are rated, based on an irrevocable
escrow account or fund (the "escrow "), in the highest rating category of
S &P or Moody's or any successors thereto; or (b)(i) which are fully secured
as to principal and interest and redemption premium, if any, by an escrow
consisting only of cash or direct obligations of the Department of the
Treasury of the United States of America, which escrow may be applied
only to the payment of such principal of and interest and redemption
premium, if any, on such bonds or other obligations on the maturity date or
dates thereof or the specified redemption date or dates pursuant to such
irrevocable instructions, as appropriate; and (ii) which escrow is sufficient,
as verified by a nationally recognized independent certified public
accountant, to pay principal of and interest and redemption premium, if
any, on the bonds or other obligations described in this paragraph on the
maturity date or dates specified in the irrevocable instructions referred to
above, as appropriate;
-7-
tax exempt bonds as defined and permitted by section 148 of the
Internal Revenue Code and applicable regulations and only if rated within
the two highest classifications as established by at least one of the standard
rating services approved by the superintendent of banking by rule adopted
pursuant to chapter 17A Code of Iowa;
an investment contract rated within the two highest classifications as
established by at least one of the standard rating services approved by the
superintendent of banking by rule adopted pursuant to chapter 17A Code of
Iowa; and
Iowa Public Agency Investment Trust.
"Prior Note Resolutions" shall mean the resolution of the City
Council adopted on , authorizing the issuance of the
Sewer Revenue Capital Loan Notes, Series 2009A, dated January 1, 2009;
resolution adopted on , authorizing the issuance of the
Sewer Revenue Capital Loan Notes, Series 2010A, dated January 13, 2010; and
resolution adopted on , authorizing the issuance of the
Sewer Revenue Capital Loan Notes, Series 2010E, dated August 18, 2010.
♦ "Program" shall mean the Iowa Water Pollution Control Works
Financing Program undertaken by the Original Purchaser.
♦ "Project" shall mean the costs of acquisition, construction,
reconstruction, extending, remodeling, improving, repairing and equipping of the
System, including those costs associated with the acquisition and installation of
microturbines, compression skid, heat recovery units and related mechanical,
electrical and site work at the Water & Resource Recovery Center to utilize
anaerobic digester gas in a combined heat and power facility.
♦ "Project Fund" shall mean the Loan Account maintained by the
Trustee under the Program for the benefit of the Issuer, into which the proceeds of
the Loan and the Note shall be allocated and held until disbursed to pay Project
costs.
♦ "Rebate Fund" shall mean the fund so defined in and established
pursuant to the Tax Exemption Certificate.
-8-
♦ "Registrar" shall be the Finance Director, or such successor as may
be approved by Issuer as provided herein and who shall carry out the duties
prescribed herein with respect to maintaining a register of the owners of the Notes.
Unless otherwise specified, the Registrar shall also act as Transfer Agent for the
Notes.
♦ "System" shall mean the municipal sewer system utility of the Issuer
and all properties of every nature hereinafter owned by the Issuer comprising part
of or used as a part of the System, including all wastewater treatment facilities,
including all wastewater treatment facilities, sanitary sewers, force mains,
pumping stations and all related property and improvements and extensions made
by Issuer while any of the Notes or Parity Obligations remain outstanding; all real
and personal property; and all appurtenances, contracts, leases, franchises and
other intangibles.
♦ "Tax Exemption Certificate" shall mean the Tax Exemption
Certificate executed by the Finance Director and delivered at the time of issuance
and delivery of the Notes.
♦ "Treasurer" shall mean the Finance Director or such other officer as
shall succeed to the same duties and responsibilities with respect to the recording
and payment of the Notes issued hereunder.
♦ "Trustee" shall mean Wells Fargo Bank, National Association, with
its principal office located in the City of Chicago, Illinois, 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.
♦ "Yield Restricted" shall mean required to be invested at a yield that
is not materially higher than the yield on the Notes under Section 148(a) of the
Internal Revenue Code or regulations issued thereunder.
Section 2. Authority. The Agreement and the Notes authorized by this
Resolution shall be issued pursuant to Sections 384.24A, 384.82, and 384.83 of the Code
of Iowa, and in compliance with all applicable provisions of the Constitution and laws of
the State of Iowa. The Agreement shall be substantially in the form attached to this
Resolution and is authorized to be executed and issued on behalf of the Issuer by the
Mayor and attested by the City Clerk.
Section 3. Authorization and Purpose. There are hereby authorized to be
issued, negotiable, serial, fully registered Revenue Notes of the City of Dubuque, in the
-9-
County of Dubuque, Iowa, each to be designated as "Sewer Revenue Capital Loan Note,
Series 2013 ", in the aggregate amount of $3,048,000, for the purpose of paying costs of
the Project. The City Council, pursuant to Sections 384.24A, 384.82, and 384.83 of the
City Code of Iowa, hereby finds and determines that it is necessary and advisable to issue
said Notes authorized by the Agreement and this Resolution.
Section 4. Source of Payment. The Notes herein authorized and Parity
Obligations and the interest thereon shall be payable solely and only out of the net
earnings of the System and shall be a first lien on the future Net Revenues of the System.
The Notes shall not be general obligations of the Issuer nor shall they be payable in any
manner by taxation and the Issuer shall be in no manner liable by reason of the failure of
the said Net Revenues to be sufficient for the payment of the Notes.
Section 5. Note Details. Sewer Revenue Capital Loan Notes, Series 2013, of
the City in the amount of $3,048,000, shall be issued to evidence the obligations of the
Issuer under the Agreement pursuant to the provisions of Sections 384.24A, 384.82, and
384.83 of the City Code of Iowa for the aforesaid purpose. The Notes shall be designated
"SEWER REVENUE CAPITAL LOAN NOTE, SERIES 2013 ", be dated the date of
delivery, and bear interest at the rate of 1.75% per annum from the date of each
advancement made under the Agreement, until payment thereof, at the office of the
Paying Agent, said interest payable on December 1, 2013, and semi - annually thereafter
on the 1st day of June and December in each year until maturity as set forth on the Debt
Service Schedule attached to the Agreement as Exhibit A and incorporated herein by this
reference. As set forth on said Debt Service Schedule, principal shall be payable on June
1, 2014 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, 2033. 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
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 Schedule and the
rules of the Program.
The Notes shall be executed by the manual or facsimile signature of the Mayor
and attested by the manual or facsimile signature of the Clerk, and impressed or
imprinted with the seal of the City and shall be fully registered as to both principal and
interest as provided in this Resolution; principal, interest and premium, if any, shall be
payable at the office of the Paying Agent by mailing of a check, wire transfer or
- 10-
automated clearing house system transfer to the registered owner of the Note. The Notes
shall be in the denomination of $1,000 or multiples thereof and may at the request of the
Original Purchaser be initially issued as a single Note in the denomination of $3,048,000
and numbered R -1.
Section 6. Initiation Fee and Servicing Fee. In addition to the payment of
principal of and interest on the Notes, the Issuer also agrees to pay the Initiation Fee and
the Servicing Fee as defined and in accordance with the terms of the Agreement.
Section 7. Redemption. The Notes 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 Project is damaged or
destroyed. Any optional redemption of the Notes 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 Note). The terms of
redemption shall be par, plus accrued interest to date of call. The Notes are also subject
to mandatory redemption as set forth in Section 5 of the Agreement.
Section 8. Registration of Notes; Appointment of Registrar; Transfer;
Ownership; Delivery; and Cancellation.
(a) Registration. The ownership of Notes may be transferred only by the
making of an entry upon the books kept for the registration and transfer of
ownership of the Notes, and in no other way. The Treasurer is hereby appointed
as Note Registrar under the terms of this Resolution. Registrar shall maintain the
books of the Issuer for the registration of ownership of the Notes for the payment
of principal of and interest on the Notes as provided in this Resolution. All Notes
shall be negotiable as provided in Article 8 of the Uniform Commercial Code
subject to the provisions for registration and transfer contained in the Notes and in
this Resolution.
(b) Transfer. The ownership of any Note may be transferred only upon the
Registration Books kept for the registration and transfer of Notes and only upon
surrender thereof at the office of the Registrar together with an 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 Note (other than a registered
owner which is the nominee of the broker or dealer in question) is that of a broker
or dealer, there must be disclosed on the Registration Books the information
pertaining to the registered owner required above. Upon the transfer of any such
Note, a new fully registered Note, of any denomination or denominations
permitted by this Resolution in aggregate principal amount equal to the unmatured
and unredeemed principal amount of such transferred fully registered Note, and
bearing interest at the same rate and maturing on the same date or dates shall be
delivered by the Registrar.
(c) Registration of Transferred Notes. In all cases of the transfer of the Notes,
the Registrar shall register, at the earliest practicable time, on the Registration
Books, the Notes, in accordance with the provisions of this Resolution.
(d) Ownership. As to any Note, the person in whose name the ownership of
the same shall be registered on the Registration Books of the Registrar shall be
deemed and regarded as the absolute owner thereof for all purposes, and payment
of or on account of the principal of any such Notes and the premium, if any, and
interest thereon shall be made only to or upon the order of the registered owner
thereof or his legal representative. All such payments shall be valid and effectual
to satisfy and discharge the liability upon such Note, including the interest thereon,
to the extent of the sum or sums so paid.
(e) Cancellation. All Notes which have been redeemed shall not be reissued
but shall be cancelled by the Registrar. All Notes which are cancelled by the
Registrar shall be destroyed and a Certificate of the destruction thereof shall be
furnished promptly to the Issuer; provided that if the Issuer shall so direct, the
Registrar shall forward the cancelled Notes to the Issuer.
(f) Non - Presentment of Notes. In the event any payment check representing
payment of principal of or interest on the Notes is returned to the Paying Agent or
if any note is not presented for payment of principal at the maturity or redemption
date, if funds sufficient to pay such principal of or interest on Notes shall have
been made available to the Paying Agent for the benefit of the owner thereof, all
liability of the Issuer to the owner thereof for such interest or payment of such
Notes shall forthwith cease, terminate and be completely discharged, and
thereupon it shall be the duty of the Paying Agent to hold such funds, without
liability for interest thereon, for the benefit of the owner of such Notes who shall
thereafter be restricted exclusively to such funds for any claim of whatever nature
on his part under this Resolution or on, or with respect to, such interest or Notes.
The Paying Agent's obligation to hold such funds shall continue for a period equal
- 12 -
to two years and six months following the date on which such interest or principal
became due, whether at maturity, or at the date fixed for redemption thereof, or
otherwise, at which time the Paying Agent, shall surrender any remaining funds so
held to the Issuer, whereupon any claim under this Resolution by the Owners of
such interest or Notes of whatever nature shall be made upon the Issuer.
Section 9. Reissuance of Mutilated, Destroyed, Stolen or Lost Notes. In case
any outstanding Note shall become mutilated or be destroyed, stolen or lost, the Issuer
shall at the request of Registrar authenticate and deliver a new Note of like tenor and
amount as the Note so mutilated, destroyed, stolen or lost, in exchange and substitution
for such mutilated Note to Registrar, upon surrender of such mutilated Note, or in lieu of
and substitution for the Note destroyed, stolen or lost, upon filing with the Registrar
evidence satisfactory to the Registrar and Issuer that such Note has been destroyed, stolen
or lost and proof of ownership thereof, and upon furnishing the Registrar and Issuer with
satisfactory indemnity and complying with such other reasonable regulations as the Issuer
or its agent may prescribe and paying such expenses as the Issuer may incur in
connection therewith.
Section 10. Record Date. Payments of principal and interest, otherwise than
upon full redemption, made in respect of any Note, shall be made to the registered holder
thereof or to their designated Agent as the same appear on the books of the Registrar on
the 15th day of the month preceding the payment date. All such payments shall fully
discharge the obligations of the Issuer in respect of such Notes to the extent of the
payments so made.
Section 11. Execution, Authentication and Delivery of the Notes. Upon the
adoption of this Resolution, the Mayor and City Clerk shall execute and deliver the Notes
to the Registrar, who shall authenticate the Notes and deliver the same to or upon order of
the Original Purchaser. No Note shall be valid or obligatory for any purpose or shall be
entitled to any right or benefit hereunder unless the Registrar shall duly endorse and
execute on such Note a Certificate of Authentication substantially in the form of the
Certificate herein set forth. Such Certificate upon any Note executed on behalf of the
Issuer shall be conclusive evidence that the Note so authenticated has been duly issued
under this Resolution and that the holder thereof is entitled to the benefits of this
Resolution.
Section 12. Right to Name Substitute Paying Agent or Registrar. Issuer reserves
the right to name a substitute, successor Registrar or Paying Agent upon giving prompt
written notice to each registered noteholder.
- 13 -
Section 13. Form of Note. Notes shall be printed in substantial compliance with
standards proposed by the American Standards Institute substantially in the form as
follows:
(6)
(7)
(6)
(8)
(1)
(2)
(3)
(4)
(5)
(9)
(9a)
(10)
(Continued on the back of this Bond)
(11)(12)(13)
(14)
FIGURE 1
(Front)
- 14 -
(15)
(10)
(Continued)
(16)
FIGURE 2
(Back)
- 15 -
The text of the Notes to be located thereon at the item numbers shown shall be as
follows:
Item 1, figure 1 = "STATE OF IOWA"
"COUNTY OF DUBUQUE"
"CITY OF CITY OF DUBUQUE"
"SEWER REVENUE CAPITAL LOAN NOTE"
"SERIES 2013"
Item 2, figure 1 = Rate: 1.75%
Item 3, figure 1 = Final Maturity:
Item 4, figure 1 = Note Date:
Item 5, figure 1 = CUSIP # - N/A
Item 6, figure 1 = "Registered"
Item 7, figure 1 = Certificate No. R -1
Item 8, figure 1 = Principal Amount:
Item 9, figure 1 = 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
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 dated as of the
date hereof until paid at the rate of 1.75% per annum, payable on December 1, 2013, 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, 2014 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, 2033.
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
- 16 -
at all times conform to said 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 of the month
next 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, 384.82, 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 those costs associated with the acquisition and installation of
microturbines, compression skid, heat recovery units and related mechanical, electrical
and site work at the Water & Resource Recovery Center to utilize anaerobic digester gas
in a combined heat and power facility, and evidences amounts payable under a certain
Loan and Disbursement Agreement dated as of the date hereof, in conformity to a
Resolution of the City Council of the City duly passed and approved. For a complete
statement of the revenues and funds from 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
Agreement 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 Project is 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 Agreement.
Ownership of this Note may be transferred only by transfer upon the books kept
for such purpose by the Finance Director, Dubuque, Iowa, Iowa, the Registrar. Such
transfer on the books shall occur only upon presentation and surrender of this Note at the
office of the Registrar, 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 Noteholders of such change. All Notes shall be
negotiable as provided in Article 8 of the Uniform Commercial Code and subject to the
provisions for registration and transfer contained in the Note Resolution.
- 17 -
This Note and the series of which it forms a part, other obligations ranking on a
parity therewith and any additional obligations which may be hereafter issued and
outstanding from time to time on a parity with said Notes, as provided in the Resolution
and Loan and Disbursement Agreement of which notice is hereby given and which are
hereby made a part hereof, are payable from and secured by a pledge of the net revenues
of the municipal sewer system utility (the "System "), as defined and provided in said
Resolution. There has heretofore been established and the City covenants and agrees that
it will maintain just and equitable rates or charges for the use of and service rendered by
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 Notes, and other
obligations ranking on a parity therewith, as the same become due. This Note is not
payable in any manner by taxation and under no circumstances shall the City be in any
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 Note, have been
existent, had, done and performed as required by law.
IN TESTIMONY WHEREOF, said City by its City Council has caused this Note
to be signed by the manual or facsimile signature of its Mayor and attested by the manual
or facsimile signature of its City Clerk, with the seal of said City impressed hereon, and
authenticated by the manual or facsimile signature of an authorized representative of the
Registrar, the Finance Director of the City of Dubuque, Iowa, all as of the
day of , 2013.
Item 11, figure 1 = Date of authentication:
Item 12, figure 1 = This is one of the Notes described in the within mentioned
Resolution, as registered by the Finance Director.
Item 13, figure 1
FINANCE DIRECTOR
By:
Registrar
Registrar and Transfer Agent: Finance Director
Paying Agent: Finance Director
SEE REVERSE FOR CERTAIN DEFINITIONS
- 18 -
Item 14, figure 1 = (Seal)
Item 15, figure 1 = (Signature Block)
CITY OF DUBUQUE, STATE OF IOWA
By: manual
Mayor
ATTEST:
By: manual
City Clerk
Item 17, 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 Note and does hereby irrevocably constitute and appoint
attorney in fact to transfer the said Note on the books kept
for registration of the within Note, with full power of substitution in the premises.
Dated:
(Person(s) executing this Assignment sign(s) here)
SIGNATURE )
GUARANTEED)
- 19 -
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* Corporation
Partnership Trust
*If the Note is to be registered in the names of multiple individual owners, the names of
all such owners and one address and social security number must be provided.
The following abbreviations, when used in the inscription on the face of this Note,
shall be construed as though written out in full according to applicable laws or
regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with rights of survivorship and not as tenants in common
IA UNIF TRANS MIN ACT - Custodian
(Cust) (Minor)
Under Iowa Uniform Transfers to Minors Act
(State)
Section 14. Equality of Lien. The timely payment of principal of and interest on
the Notes and Parity Obligations shall be secured equally and ratably by the revenues of
the System without priority by reason of number or time of sale or delivery; and the
revenues of the System are hereby irrevocably pledged to the timely payment of both
principal and interest as the same become due.
- 20 -
Section 15. Application of Note Proceeds - Project Fund. Proceeds of the Notes
shall be credited to the Project Fund and expended therefrom for the purposes of
issuance. Any amounts on hand in the Project Fund shall be available for the payment of
the principal of or interest on the Notes at any time that other funds of the System shall be
insufficient to the purpose, in which event such funds shall be repaid to the Project Fund
at the earliest opportunity. Any balance on hand in the Project Fund and not immediately
required for its purposes may be invested not inconsistent with limitations provided by
law, the Internal Revenue Code and this Resolution.
Section 16. User Rates. There has heretofore been established and published as
required by law, just and equitable rates or charges for the use of the service rendered by
the System. Said rates or charges shall be paid by the owner of each and every lot, parcel
of real estate, or building that is connected with and uses the System, by or through any
part of the System or that in any way uses or is served by the System.
Any revenue paid and collected for the use of the System and its services by the
Issuer or any department, agency or instrumentality of the Issuer shall be used and
accounted for in the same manner as any other revenues derived from the operations of
the System.
Section 17. Application of Revenues. From and after the delivery of any Notes,
and as long as any of the Notes or Parity Obligations shall be outstanding and unpaid
either as to principal or as to interest, or until all of the Notes and Parity Obligations then
outstanding shall have been discharged and satisfied in the manner provided in this
Resolution, the entire income and revenues of the System shall be deposited as collected
in a fund to be known as the Sewer Revenue Fund (the "Revenue Fund "), and shall be
disbursed only as follows:
The provisions in the Prior Note Resolution(s) heretofore adopted on
, whereby there was created and is to be maintained a Sewer Revenue Note
Principal and Interest Sinking Fund, and for the monthly payment into said fund from the
future Net Revenues of the System such portion thereof as will be sufficient to meet the
principal and interest of the Outstanding Obligations, and maintaining a reserve therefor,
are hereby ratified and confirmed, and all such provisions inure to and constitute the
security for the payment of the principal and interest on Notes hereby authorized to be
issued; provided, however, that the amounts to be set aside and paid into the Sewer
Revenue Note Principal and Interest Sinking Fund in equal monthly installments from the
earnings shall be sufficient to pay the principal and interest due each year, not only on the
Outstanding Obligations, but also the principal and interest of the Notes herein authorized
to be issued and to maintain a reserve therefor. Section(s) of the
Prior Note Resolutions is /are hereby ratified, confirmed, adopted and incorporated herein
as a part of this Resolution. Except as may be otherwise provided in the above Prior Note
- 21 -
Resolutions, proceeds of the Notes or other funds may be invested in Permitted
Investments.
Nothing in this Resolution shall be construed to impair the rights vested in the
Outstanding Obligations. The amounts herein required to be paid into the various funds
named in this Section shall be inclusive of payments required in respect to the
Outstanding Obligations. The provisions of the legislation authorizing the Outstanding
Obligations and the provisions of this Resolution are to be construed wherever possible
so that the same will not be in conflict. In the event such construction is not possible, the
provisions of the resolution first adopted shall prevail until such time as the notes or
bonds authorized by said resolution have been paid in full or otherwise satisfied as
therein provided at which time the provisions of this Resolution shall again prevail.
At such time as the Outstanding Obligations are paid and so long as the Notes or
Parity Obligations remain outstanding and unpaid the same are discharged and satisfied
in the manner provided in this Resolution, the entire income and revenues of the system
shall be deposited and collected in a fund to be known as the Revenue Fund, and shall be
disbursed only as follows:
• Operation and Maintenance Fund. Money in the Revenue Fund shall first
be disbursed to make deposits into a separate and special fund to pay current
expenses. The fund shall be known as the Sewer Utility Operation and
Maintenance Fund (the "Operation and Maintenance Fund "). There shall be
deposited in the Operation and Maintenance Fund each month an amount
sufficient to meet the current expenses of the month plus an amount equal to
1 /12th of expenses payable on an annual basis such as insurance. After the first
day of the month, further deposits may be made to this account from the Revenue
Fund to the extent necessary to pay current expenses accrued and payable to the
extent that funds are not available in the Surplus Fund.
• Sinking Fund. Money in the Revenue Fund shall next be disbursed to make
deposits into a separate and special fund to pay principal of and interest on the
Notes and Parity Obligations. The fund shall be known as the Sewer Revenue
Note Principal and Interest Sinking Fund (the "Sinking Fund "). The required
amount to be deposited in the Sinking Fund in any month shall be an amount equal
to 1 /6th of the installment of interest coming due on the next interest payment date
on the then outstanding Notes and Parity Obligations, plus 1 /12th of the
installment of principal coming due on such Notes on the next succeeding
principal payment date until the full amount of such installment is on hand. If for
any reason the amount on hand in the Sinking Fund exceeds the required amount,
the excess shall forthwith be withdrawn and paid into the Revenue Fund. Money
in the Sinking Fund shall be used solely for the purpose of paying principal of and
- 22 -
interest on the Notes and Parity Obligations as the same shall become due and
payable.
• Subordinate Obligations. Money in the Revenue Fund may next be used to
pay principal of and interest on (including reasonable reserves therefor) any other
obligations which by their terms shall be payable from the revenues of the System,
but subordinate to the Notes and Parity Obligations, and which have been issued
for the purposes of extensions and improvements to the System or to retire the
Notes or Parity Obligations in advance of maturity, or to pay for extraordinary
repairs or replacements to the System.
• Surplus Revenue. All money thereafter remaining in the Revenue Fund at
the close of each month may be deposited in any of the funds created by this
Resolution, to pay for extraordinary repairs or replacements to the System, or may
be used to pay or redeem the Notes or Parity Obligations, any of them, or for any
lawful purpose.
Money in the Revenue Fund shall be allotted and paid into the various funds and
accounts hereinbefore referred to in the order in which said funds are listed, on a
cumulative basis on the 10th day of each month, or on the next succeeding business day
when the 10th shall not be a business day; and if in any month the money in the Revenue
Fund shall be insufficient to deposit or transfer the required amount in any of said funds
or accounts, the deficiency shall be made up in the following month or months after
payments into all funds and accounts enjoying a prior claim to the revenues shall have
been met in full.
Section 18. Investments. Moneys on hand in the Project Fund and all of the funds
provided by this Resolution may be invested only in Permitted Investments or deposited
in financial institutions which are members of the Federal Deposit Insurance Corporation,
or its equivalent successor, and the deposits of which are insured thereby and all such
deposits exceeding the maximum amount insured from time to time by FDIC or its
equivalent successor in any one financial institution shall be continuously secured in
compliance with Iowa Code chapter 12C, or otherwise by a valid pledge of direct
obligations of the United States Government having an equivalent market value. All
investments shall mature before the date on which the moneys are required for the
purposes for which the fund was created or otherwise as herein provided. The provisions
of this Section shall not be construed to require the Issuer to maintain separate accounts
for the funds created by this Resolution.
- 23 -
The Sinking Fund shall be segregated in a separate account but may be invested in
the same manner as other funds of the Issuer but designated as a trust fund on the books
and records of the Issuer. The Sinking Fund shall not be available for any other purposes
other than those specified in this Resolution.
All income derived from such investments shall be deposited in the Revenue Fund
and shall be regarded as revenues of the System. Investments shall at any time necessary
be liquidated and the proceeds thereof applied to the purpose for which the respective
fund was created.
Section 19. Covenants Regarding the Operation of the System. The Issuer
hereby covenants and agrees with each and every holder of the Notes and Parity
Obligations:
(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) Sufficiency of Rates. On or before the beginning of each Fiscal Year the
Governing Body will adopt or continue in effect rates for all services rendered by
the System determined to be sufficient to produce Net Revenues for the next
succeeding Fiscal Year which are (i) adequate to pay the principal and interest
requirements thereof and to create or maintain the reserves as provided in this
Resolution, and (ii) not less than 110 percent of the principal and interest
requirements of the next succeeding Fiscal Year. No free use of the System by the
Issuer or any department, agency or instrumentality of the Issuer shall be
permitted except upon the determination of the Governing Body that the rates and
changes otherwise in effect are sufficient to provide Net Revenues at least equal to
the requirements of this subsection.
(c) Insurance. The Issuer shall maintain insurance for the benefit of the
Noteholders on the insurable portions of the System of a kind and in an amount
which normally would be carried by private companies engaged in a similar kind
of business. The proceeds of any insurance, except public liability insurance, shall
be used to repair or replace the part or parts of the System damaged or destroyed,
or if not so used shall be placed in an improvement fund for the benefit of the
System.
(d) 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 and reported upon by an Independent Auditor and will provide copies of
the audit report to the Department, all as provided in the Agreement. The Original
- 24 -
Purchaser and holders of any of the Notes and Parity Obligations shall have at all
reasonable times the right to inspect the System and the records, accounts and data
of the Issuer relating thereto.
(e) State Laws. The Issuer will faithfully and punctually perform all duties
with reference to the System required by the Constitution and laws of the State of
Iowa, including the making and collecting of reasonable and sufficient rates for
services rendered by the System as above provided, and will segregate the
revenues of the System and apply said revenues to the funds specified in this
Resolution.
(f) Property. 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
Notes and Parity Obligations shall have been provided for in the manner provided
in this Resolution; provided, however, this covenant shall not be construed to
prevent the disposal by the Issuer of property which in the judgment of its
Governing Body has become inexpedient or unprofitable to use in connection with
the System, or if it is to the advantage of the System that other property of equal or
higher value be substituted therefor, and provided further that the proceeds of the
disposition of such property shall be placed in a revolving fund to be used in
preference to other sources for capital improvements to the System. Any such
proceeds of the disposition of property acquired with the proceeds of the Notes or
Parity Obligations shall not be used to pay principal or interest on the Notes and
Parity Obligations or for payments into the Sinking or Reserve Funds.
(g) Fidelity Bond. That 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.
(h) Additional Charges. The Issuer will require proper connecting charges
and /or other security for the payment of service charges.
(i) 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 current expenses
during the current and last preceding Fiscal Years. Copies of such budget and any
amendments thereto shall be mailed to the Original Purchaser and to the
Noteholders upon request.
- 25 -
(j) Loan and Disbursement Agreement. The Issuer will comply with the terms
and conditions of the Loan and Disbursement Agreement and perform as provided
thereunder.
Section 20. Remedies of Noteholders. Except as herein expressly limited the
holder or holders of the Notes and Parity Obligations shall have and possess all the rights
of action and remedies afforded by the common law, the Constitution and statutes of the
State of Iowa, and of the United States of America, for the enforcement of payment of
their Notes and interest thereon, and of the pledge of the revenues made hereunder, and
of all covenants of the Issuer hereunder.
Section 21. Prior Lien and Parity Obligations. The Issuer will issue no other
notes, bonds or obligations of any kind or nature payable from or enjoying a lien or claim
on the property or revenues of the System having priority over the Notes or Parity
Obligations.
Additional Bonds may be issued on a parity and equality of rank with the Notes
with respect to the lien and claim of such additional obligations to the revenues of the
System and the money on deposit in the funds adopted by this Resolution, for the
following purposes and under the following conditions, but not otherwise:
(a) For the purpose of refunding any of the Notes or Parity Obligations which
shall have matured or which shall mature not later than three months after the date
of delivery of such refunding obligation and for the payment of which there shall
be insufficient money in the Sinking Fund and the Reserve Fund;
(b) For the purpose of making extensions, additions, improvements or
replacements to the System, or refunding any outstanding Notes, Parity
Obligations or other obligations issued for such extensions, additions and
improvements, if all of the following conditions shall have been met:
(i) before any such Additional Bonds ranking on a parity are issued,
there will have been procured and filed with the Clerk, a statement of an
Independent Auditor, not a regular employee of the Issuer, reciting the
opinion based upon necessary investigations that the Net Revenues of the
System for the preceding Fiscal Year (with adjustments as hereinafter
provided) were equal to at least 1.10 times the maximum amount that will
be required in any Fiscal Year prior to the longest maturity of any of the
then outstanding Notes or Parity Obligations for both principal of and
interest on all Notes or Parity Obligations then outstanding which are
payable from the net earnings of the System and the Additional Bonds then
proposed to be issued.
- 26 -
For the purpose of determining the Net Revenues of the System for the
preceding Fiscal Year as aforesaid, the amount of the gross revenues for
such year may be adjusted by an independent consulting engineer or by the
Independent Auditor, so as to reflect any changes in the amount of such
revenues which would have resulted had any revision of the schedule of
rates or charges imposed at or prior to the time of the issuance of any such
Additional Bonds been in effect during all of such preceding Fiscal Year.
(ii) the Additional Bonds must be payable as to principal and as to
interest on the same month and day as the Notes herein authorized.
(iii) for the purposes of this Section, principal and interest falling due on
the first day of a Fiscal Year shall be deemed a requirement of the
immediately preceding Fiscal Year.
(iv) for the purposes of this Section, general obligation bonds or notes
shall be refunded only upon a finding of necessity by the Governing Body
and only to the extent the general obligation bonds or notes were issued or
the proceeds thereof were expended for the System.
(v) for purposes of this Section, "preceding Fiscal Year" shall be the
most recently completed Fiscal Year for which audited financial statements
prepared by a certified public accountant are issued and available, but in no
event a Fiscal Year which ended more than eighteen months prior to the
date of issuance of the Additional Bonds.
Section 22. Disposition of Proceeds; Arbitrage Not Permitted. The Issuer
reasonably expects and covenants that no use will be made of the proceeds from the
issuance and sale of the Notes issued hereunder which will cause any of the Notes to be
classified as arbitrage bonds within the meaning of Section 148(a) and (b) of the Internal
Revenue Code of the United States, and that throughout the term of said Notes 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 Notes will be used in a manner that would cause the
Notes 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 make and insert all calculations
and determinations necessary to complete the Tax Exemption Certificate in all respects
- 27 -
and to execute and deliver the Tax Exemption Certificate at issuance of the Notes to
certify as to the reasonable expectations and covenants of the Issuer at that date.
The Issuer covenants that it will treat as Yield Restricted any proceeds of the
Notes remaining unexpended after 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 Notes and Parity Obligations, the Issuer shall treat the same for the
purpose of restricted yield as held in proportion to the original principal amounts of each
issue.
The Issuer covenants that it will exceed any investment yield restriction provided
in this Resolution only in the event that it shall first obtain an opinion of recognized bond
counsel that the proposed investment action will not cause the Notes to be classified as
arbitrage bonds under Section 148(a) and (b) the Internal Revenue Code or regulations
issued thereunder.
The Issuer covenants that it will proceed with due diligence to spend the proceeds
of the Notes for the purpose set forth in this Resolution. The Issuer further covenants that
it will make no change in the use of the proceeds available for the construction of
facilities or change in the use of any portion of the facilities constructed therefrom by
persons other than the Issuer or the general public unless it has obtained an opinion of
bond counsel or a revenue ruling that the proposed project or use will not be of such
character as to cause interest on any of the Notes not to be exempt from federal income
taxes in the hands of holders other than substantial users of the project, under the
provisions of Section 142(a) of the Internal Revenue Code of the United States, related
statutes and regulations.
Section 23. Additional Covenants, Representations and Warranties of the Issuer.
The Issuer certifies and covenants with the purchasers and holders of the Notes from time
to time outstanding that the Issuer 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 Issuer and the owners of the Notes; (c) consult with bond counsel (as defined
in the Tax Exemption Certificate); (d) pay to the United States, as necessary, such sums
of money representing required rebates of excess arbitrage profits relating to the Notes;
(e) file such forms, statements and supporting documents as may be required and in a
timely manner; and (f) if deemed necessary or advisable by its officers, to employ and
pay fiscal agents, financial advisors, attorneys and other persons to assist the Issuer in
such compliance.
- 28 -
Section 24. Amendment of Resolution to Maintain Tax Exemption. This
Resolution may be amended without the consent of any owner of the Notes if, in the
opinion of bond counsel, such amendment is necessary to maintain tax exemption with
respect to the Notes under applicable Federal law or regulations.
Section 25. Discharge and Satisfaction of Notes. The covenants, liens and
pledges entered into, created or imposed pursuant to this Resolution may be fully
discharged and satisfied with respect to the Notes and Parity Obligations, or any of them,
in any one or more of the following ways:
(a) By paying the Notes or Parity Obligations when the same shall become due
and payable; and
(b) By depositing in trust with the Treasurer, or with a corporate trustee
designated by the Governing Body, for the payment of said obligations and
irrevocably appropriated exclusively to that purpose an amount in cash or direct
obligations of the United States the maturities and income of which shall be
sufficient to retire at maturity, or by redemption prior to maturity on a designated
date upon which said obligations may be redeemed, all of such obligations
outstanding at the time, together with the interest thereon to maturity or to the
designated redemption date, premiums thereon, if any that may be payable on the
redemption of the same; provided that proper notice of redemption of all such
obligations to be redeemed shall have been previously published or provisions
shall have been made for such publication.
Upon such payment or deposit of money or securities, or both, in the amount and
manner provided by this Section, all liability of the Issuer with respect to the Notes or
Obligations shall cease, determine and be completely discharged, and the holders thereof
shall be entitled only to payment out of the money or securities so deposited.
Section 26. Resolution a Contract. The provisions of this Resolution shall
constitute a contract between the Issuer and the holder or holders of the Notes and Parity
Obligations, and after the issuance of any of the Notes no change, variation or alteration
of any kind in the provisions of this Resolution shall be made in any manner, except as
provided in the next succeeding Section, until such time as all of the Notes and Parity
Obligations, and interest due thereon, shall have been satisfied and discharged as
provided in this Resolution.
Section 27. Amendment of Resolution Without Consent. The Issuer may,
without the consent of or notice to any of the holders of the Bonds and Parity
Obligations, amend or supplement this Resolution for any one or more of the following
purposes:
- 29 -
(a) to cure any ambiguity, defect, omission or inconsistent provision in
this Resolution or in the Notes or Parity Obligations; or to comply with any
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 Notes or Parity Obligations;
(b) to change the terms or provisions of this Resolution to the extent
necessary to prevent the interest on the Notes or Parity Obligations 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 Notes or Parity
Obligations any additional rights, remedies, powers or authority that may lawfully
be granted to or conferred upon the holders of the Notes;
(d) to add to the covenants and agreements of the Issuer contained in
this Resolution other covenants and agreements of, or conditions or restrictions
upon, the Issuer or to surrender or eliminate any right or power reserved to or
conferred upon the Issuer in this Resolution; or
(e) to subject to the lien and pledge of this Resolution additional
pledged revenues as may be permitted by law.
Section 28. Amendment of Resolution Requiring Consent. This Resolution may
be amended from time to time if such amendment shall have been consented to by
holders of not less than two- thirds in principal amount of the Notes and Parity
Obligations at any time outstanding (not including in any case any Notes which may then
be held or owned by or for the account of the Issuer, but including such Refunding
Obligations as may have been issued for the purpose of refunding any of such Notes if
such Refunding Obligations shall not then be owned by the Issuer); but this Resolution
may not be so amended in such manner as to:
(a) Make any change in the maturity or interest rate of the Notes, or modify the
terms of payment of principal of or interest on the Notes or any of them or impose
any conditions with respect to such payment;
(b) Materially affect the rights of the holders of less than all of the Notes and
Parity Obligations then outstanding; and
(c) Reduce the percentage of the principal amount of Notes, the consent of the
holders of which is required to effect a further amendment.
- 30 -
Whenever the Issuer shall propose to amend this Resolution under the provisions
of this Section, it shall cause notice of the proposed amendment to be filed with the
Original Purchaser and to be mailed by certified mail to each registered owner of any
Note as shown by the records of the Registrar. Such notice shall set forth the nature of
the proposed amendment and shall state that a copy of the proposed amendatory
Resolution is on file in the office of the City Clerk.
Whenever at any time 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 Notes then outstanding
as in this Section defined, which instrument or instruments shall refer to the proposed
amendatory 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 amendatory Resolution and such Resolution shall become
effective and binding upon the holders of all of the Notes and Parity Obligations.
Any consent given by the holder of a Note pursuant to the provisions of this
Section shall be irrevocable for a period of six months from the date of the instrument
evidencing such consent and shall be conclusive and binding upon all future holders of
the same Note during such period. Such consent may be revoked at any time after six
months from the date of such instrument by the holder who gave such consent or by a
successor in title by filing notice of such revocation with the City Clerk.
The fact and date of the execution of any instrument under the provisions of this
Section may be proved by the certificate of any officer in any jurisdiction who by the
laws thereof is authorized to take 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 Notes 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 Notes described in such certificate.
Notwithstanding anything in this Section to the contrary, the holder or holders of
100% of the Notes and Parity Obligations may consent to any amendment of this
Resolution, or waive any notices required hereunder, on such terms and under such
conditions as said holders shall determine to be appropriate.
- 31 -
Section 29. 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 30. 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 Resolution are, to the extent of such conflict, hereby repealed; and this
Resolution shall be in effect from and after its adoption.
Section 31. Rule of Construction. This Resolution and the terms and conditions
of the Notes authorized hereby shall be construed whenever possible so as not to conflict
with the terms and conditions of the Loan and Disbursement Agreement. 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 Loan and Disbursement Agreement, the terms of the
Loan and Disbursement Agreement shall prevail and be given effect to the extent
necessary to resolve any such conflict or inconsistency.
PASSED AND APPROVED this 1st day of April, 2013.
ATTEST:
City Clerk
00931846 -1 \10422 -144
Mayor
- 32 -
CERTIFICATE
STATE OF IOWA
) SS
COUNTY OF DUBUQUE
I, the undersigned City Clerk of the City of Dubuque, State of Iowa, do hereby
certify that attached is a true and complete copy of the portion of the corporate records of
the City showing proceedings of the City 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 City hereto affixed this day of
, 2013.
City Clerk, City of Dubuque, State of Iowa
(SEAL)
00931846 -1 \10422 -144