HomeMy WebLinkAboutOrd.4096.01-04-2010 Gilmore&Bell,P.C.
601068.043/Cape Girardeau Ordinance Q
BILL NO. 09-205
ORDINANCE NO. '09&
OF THE
CITY OF CAPE GIRARDEAU,MISSOURI
PASSED JANUARY 4,2010
AUTHORIZING:
NOT TO EXCEED $1,000,000
WATERWORKS SYSTEM REVENUE BONDS
(STATE OF MISSOURI-DIRECT LOAN PROGRAM-ARRA)
SERIES 2010
r
TABLE OF CONTENTS
Page
Recitals............................................................................................................................. 1
ARTICLE I
DEFINITIONS
Section 101. Definition of Words and Terms........................................................................................3
ARTICLE II
AUTHORIZATION OF BONDS
Section 201. Authorization of Bonds.................................................................................................... 8
Section202. Security for Bonds........................................................................................................... 8
Section203. Description of Bonds ....................................................................................................... 8
Section 204. Designation of Paying Agent...........................................................................................9
Section 205. Method and Place of Payment of Bonds..........................................................................9
Section 206. Registration, Transfer and Exchange of Bonds................................................................9
Section 207. Execution,Authentication and Delivery of Bonds......................................................... 10
Section 208. Mutilated, Destroyed, Lost and Stolen Bonds................................................................ 10
Section 209. Cancellation and Destruction of Bonds Upon Payment................................................. 11
Section 210. Sale of the Bonds;Authorization and Execution of Documents.................................... 11
Section 211. Administrative Fee and Paying Agent's Fee.................................................................. 11
ARTICLE III
REDEMPTION OF BONDS
Section301. Optional Redemption..................................................................................................... I 1
Section 302. Mandatory Redemption Provisions................................................................................ I 1
Section 303. Selection of Bonds to Be Redeemed.............................................................................. 12
Section 304. Notice and Effect of Call for Redemption ..................................................................... 12
ARTICLE IV
RATIFICATION AND ESTABLISHMENT OF FUNDS AND ACCOUNTS
Section 401. Ratification and Establishment of Funds and Accounts................................................. 13
Section 402. Administration of Funds and Accounts.......................................................................... 14
Section 403. Deposits and Application of Bond Proceeds.................................................................. 14
ARTICLE V
APPLICATION OF REVENUES AND CAPITAL IMPROVEMENT SALES
TAX REVENUES
Section 501. Revenue Fund and Capital Improvement Sales Tax Revenue Fund .............................. 14
(i)
Section 502. Application of Moneys in Funds and Accounts............................................................. 15
Section 503. Deficiency of Payments into Funds and Accounts......................................................... 17
Section 504. Transfer of Funds to Paying Agent................................................................................ 17
Section505. Business Days................................................................................................................ 18
ARTICLE VI
INVESTMENT OF MONEYS
Section 601. Investment of Moneys.................................................................................................... 18
ARTICLE VII
PARTICULAR COVENANTS OF THE CITY
Section 701. Efficient and Economical Operation; User Charge Ordinance...................................... 18
Section702. Rate Covenant................................................................................................................ 18
Section 703. Reasonable Charges for all Services.............................................................................. 19
Section704. Annual Budget............................................................................................................... 19
Section705. Annual Audit.................................................................................................................. 19
Section 706. Performance of Duties ................................................................................................... 19
ARTICLE VIII
ADDITIONAL BONDS
Section801. Prior Lien Bonds............................................................................................................ 19
Section 802. Parity Lien Bonds or Obligations................................................................................... 19
Section803. Junior Lien Bonds..........................................................................................................20
Section804. Refunding Bonds............................................................................................................21
ARTICLE IX
DEFAULT AND REMEDIES
Section901. Events of Default ...........................................................................................................21
Section902. Remedies........................................................................................................................21
Section 903. Limitation on Rights of Owners.....................................................................................21
Section 904. Remedies Cumulative....................................................................................................21
Section 905. No Obligation to Levy Taxes.........................................................................................22
ARTICLE X
DEFEASANCE
Section1001. Defeasance.....................................................................................................................22
ARTICLE XI
AMENDMENTS
Section1101. Amendments..................................................................................................................22
(ii)
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 1201. Further Authority............................................................................................................23
Section 1202. Electronic Transactions.........................:........................................................................23
Section1203. Severability....................................................................................................................23
Section1204. Governing Law ..............................................................................................................23
Section1205. Effective Date.................................................................................................................23
Passage...........................................................................................................................24
ExhibitA Form of Bond.................................................................................................................A-1
Exhibit B Mandatory Sinking Fund Redemption Schedule............................................................B-1
(iii)
e '
BILL NO. 09-205 ORDINANCE NO.
AN ORDINANCE AUTHORIZING THE ISSUANCE OF NOT TO EXCEED
$1,000,000 PRINCIPAL AMOUNT OF WATERWORKS SYSTEM REVENUE
BONDS (STATE OF MISSOURI—DIRECT LOAN PROGRAM—ARRA) SERIES
2010 OF THE CITY OF CAPE GIRARDEAU, MISSOURI, FOR THE PURPOSE
OF EXTENDING AND IMPROVING THE CITY'S WATERWORKS SYSTEM;
PRESCRIBING THE FORM AND DETAILS OF THE BONDS AND THE
AGREEMENTS MADE BY THE CITY TO FACILITATE AND PROTECT THEIR
PAYMENT AND PRESCRIBING OTHER RELATED MATTERS
WHEREAS, the City of Cape Girardeau, Missouri (the "City") is a municipal corporation and
constitutional charter city operating under a home rule form of government, organized"`and existing under
the constitution and laws of the State of Missouri; and
WHEREAS, the City now owns and operates a revenue producing waterworks system, serving
the City, its inhabitants and others within its service area, including connected and related appurtenances
and facilities and extensions, improvements, additions and enlargements made or acquired by the City
after the date of this Ordinance (the"System"); and
WHEREAS, the City desires to acquire, construct, extend and improve the System, such
extensions and improvements to be financed in part by the issuance by the City pursuant to this Ordinance
of its Waterworks System Revenue Bonds (State of Missouri — Direct Loan Program — ARRA) Series
2010 (the "Bonds") in the maximum principal amount of $1,000,000 (the "Maximum Principal
Amount"); and
WHEREAS, to provide for the most cost-effective financing of the Project, the City desires to
participate in the State of Missouri Direct Loan Program (the "Direct Loan Program") of the Missouri
Department of Natural Resources ("DNR") and the Safe Drinking Water Commission of the State of
Missouri (the "Commission"); and
WHEREAS, the City is authorized under the provisions of Section 91.010 of the Revised Statutes
of Missouri (the "Act") to issue and sell revenue bonds for the purpose of paying all or part of the cost of
extending and improving the System, with the cost of operation and maintenance of the System and the
principal of and interest on revenue bonds payable solely from the Net Revenues(as defined below); and
WHEREAS, pursuant to the Act, a special bond election was duly held in the City on November 5,
1996 (the"Election")on the following proposition:
PROPOSITION 2
Shall the City of Cape Girardeau, Missouri, issue its waterworks system revenue
bonds in the amount of$26,500,000 for the purpose of acquiring, constructing, extending
and improving the waterworks system of the City? The authorization of the bonds will
authorize the City Council to fix, establish, maintain and collect rates and charges for the
a
services provided by said system as will produce income and revenues sufficient to provide
funds to pay the costs of operation and maintenance of the system and the principal of and
interest on the bonds as they become due and to provide for the establishment of reasonable
reserves therefor,any provision of the City's charter to the contrary notwithstanding.
and it was found and determined that more than a simple majority of the qualified electors of the City voting
on the proposition had voted in favor of the proposition, the vote having been 8,236 votes for the
proposition and 4,873 votes against the proposition;and
WHEREAS, the City Council (the "Governing Body") of the City has caused plans and
specifications for the Project and a cost estimate to be made by the Consulting Engineer (as defined
below); and
WHEREAS, the plans and specifications and the cost estimate are accepted and approved and are
on file in the office of the City Clerk, the amount of the estimated cost being not less than the sum of the
Maximum Principal Amount and the initial maximum amount of the grant ($1,000,000) as described in
the Grant Agreement(defined below); and
WHEREAS, $25,495,000 of the bonds authorized at the Election have been issued, and the City
finds and determines that it is necessary and advisable and in the best interest of the City and of its
inhabitants to issue the Bonds; and
WHEREAS, by Ordinance No. 2451 adopted on November 18, 1998 (the "Series 1998 SRF
Ordinance"), the City has issued its Waterworks System Revenue Bonds (State Revolving Fund Program)
Series 1998 (the "Series 1998 SRF Bonds"), dated December 1, 1998, in the original principal amount of
$25,495,000,of which $16,375,000 remains outstanding as of the date of adoption of this Ordinance; and
WHEREAS, by Ordinance No. 3575 adopted on November 21, 2005 (the "Series 2006A
Ordinance,"together with the Series 1998 SRF Ordinance, the"Outstanding Parity Bond Ordinance"),the
City has issued its Waterworks System Refunding Revenue Bonds, Series 2006A (the "Series 2006A
Bonds," together with the Series 1998 SRF Bonds, the "Outstanding Parity Bonds"), dated January 1,
2006, in the original principal amount of$7,160,000, of which $4,485,000 remains outstanding as of the
date of adoption of this Ordinance; and
WHEREAS, the City, upon the issuance of the Bonds, will not have outstanding any other bonds
or other obligations payable from the Net Revenues other than the Outstanding Parity Bonds and the
Bonds; and
WHEREAS, under the provisions of the Outstanding Parity Bond Ordinance, the City may issue
additional bonds payable out of the,Net Revenues that are on a parity with the Outstanding Parity Bonds,
only if certain conditions are met.; and
WHEREAS, it is hereby found and determined that it is necessary and advisable and in the best
interest of the City and its inhabitants that revenue bonds be issued and secured in the form and manner
provided in this Ordinance and be sold to DNR under the Direct Loan Program, and to provide the
remainder of costs of extending and improving the System which may be required from subsequent issues
of bonds or funds of the City otherwise available.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CAPE
GIRARDEAU, MISSOURI, AS FOLLOWS:
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ARTICLE I
DEFINITIONS
Section 101. Definition of Words and Terms. Capitalized words and terms not otherwise
defined in this Ordinance have the meanings set forth in the Purchase Agreement and the Escrow
Agreement (each as defined below). In addition to the foregoing and words and terms defined in the
Recitals and elsewhere in this Ordinance, capitalized words and terms have the.following meanings in this
Ordinance:
"Administrative Expense Fund" means the fund designated as such and established by Section 4
of the Escrow Agreement. The Administrative Expense Fund does not constitute part of the Direct Loan
Program.
"Administrative Fee" means the semiannual administrative fee of DNR equal to 0.25% of the
aggregate amount of the Bonds Outstanding as of each Administrative Fee Calculation Date (including
the final maturity date of the Bonds), payable to the Paying Agent within 30 days after the City's receipt
of a statement from the Paying Agent for deposit to the Administrative Expense Fund and subsequent
transfers to DNR as described in Section 9 of the Escrow Agreement.
"Administrative Fee Calculation Date" means the Business Day preceding each Principal
Payment Date.
"Authority" means the State Environmental Improvement and Energy Resources Authority, a
body corporate and politic and a governmental instrumentality of the State.
"Authority Program Bonds" means any bonds of the Authority issued under the SRF Leveraged
Program, all or a portion of the proceeds of which are loaned to the City pursuant to the SRF Leveraged
Program.
"Authorized Representative" means the representative of the City designated as such by the City
in accordance with the Regulations.
"Bond Debt Service" means the amount of the principal of and interest due on the Bonds on the
date of calculation required in this Ordinance.
"Bond Register" means the books for the registration, transfer and exchange of Bonds kept at the
office of the Paying Agent.
"Bonds" means the Waterworks System Revenue Bonds (State of Missouri — Direct Loan
Program—ARRA) Series 2010 authorized and issued under this Ordinance.
"Capital Improvement Sales Tax" means the sales tax for capital improvements at the rate of one—
fourth of one percent ('/4 of 1%) on the receipts from all retail sales within the City, authorized by the
Capital Improvement Sales Tax Ordinance, imposed upon all sellers within the City for the privilege of
engaging in the business of selling tangible personal property or rendering taxable services at retail to the
extent provided by law, pursuant to the Capital Improvement Sales Tax Ordinance.
"Capital Improvement Sales Tax Ordinance" means Ordinance No. 2032 of the City imposing a
sales tax at a rate of '/4 of 1% on the receipts from all retail sales of property or services within the City
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which are subject to taxation as provided by law and any ordinance of the City authorizing an extension of
the sales tax authorized by Ordinance No.2032.
"Capital Improvement Sales Tax Revenues" means the net revenues of the Capital Improvement
Sales Tax received by the City under the Capital Improvement Sales Tax Ordinance and deposited in the
Capital Improvement Sales Tax Revenue Fund.
"Capital Improvement Sales Tax Revenue Fund" means the Capital Improvement Sales Tax
Revenue Fund ratified and confirmed in Section 401.
"Closing Date"means the date of the initial issuance and deliveryof the Bonds.
"Construction Fund" means the Construction Fund established by Section 4 of the Escrow
Agreement.
"Consultant" means the Consulting Engineer, an independent certified public accountant or a firm
of independent certified public accountants.
"Consulting Engineer" means each independent engineer or engineering firm with experience in
designing and constructing water production and transmission facilities, and retained by the City.
"Cumulative Principal Amount Outstanding".means the sum of (i) the purchase price of the
Bonds paid by the Owner to the Paying Agent on the Closing Date in accordance with the Purchase
Agreement and deposited into the funds pursuant to Section 403, and (ii) each additional Purchase Price
Installment, as notated on the Bonds by the Paying Agent, less the principal amount redeemed pursuant to
Article 111.
"Current Expenses" means all reasonable and necessary expenses of ownership, operation,
maintenance and repair of the System and keeping the System in good repair and working order,
determined in accordance with accounting principles generally accepted in the United States of America,
including current maintenance charges, expenses of reasonable upkeep and repairs, salaries, wages, costs
of materials and supplies, Paying Agent fees and expenses, annual audits, periodic Consultant's reports,
properly allocated share of charges for insurance, the cost of purchased water, gas and power, obligations
(other than for borrowed money or for rents payable under capital leases) incurred in the ordinary course
of business, liabilities incurred by endorsement for collection or deposit of checks or drafts received in the
ordinary course of business, short-term obligations incurred and payable within a particular Fiscal Year,
obligations incurred for the purpose of leasing(pursuant to a true or operating lease) equipment, fixtures,
inventory or other personal property, and al l other expenses incident to the ownership and operation of the
System, but excluding interest paid on System Revenue Bonds, depreciation, amortization and other
noncash charges (including payments into the Depreciation and Replacement Account), and all general
administrative expenses of the City not related to the operation of the System.
"Debt Service Fund" means the Debt Service Fund established by Section 4 of the Escrow
Agreement.
"Debt Service Reserve Account" means the Special Participant Bond Reserve Account
established by Section 4 of the Escrow Agreement.
"Debt Service Reserve Requirement"means an amount equal to $28,500.
"Defeasance Securities" means:
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(a) Federal Securities;
(b) obligations of the Resolution Funding Corporation or any successor, but only if
the use of the obligations to pay and discharge Bonds pursuant to Article X will cause the
discharged Bonds to be rated in the highest long-term category by the Rating Agency; or
(c) obligations of any state of the United States of America or of any agency,
instrumentality or local government unit of any state that:
(i) are not callable at the option of the obligor prior to maturity or for which
irrevocable instructions have been given by the obligor to call on the date specified in the
instructions, and
(ii) are fully secured as to principal, redemption premium and interest by a
fund, consisting of cash or Federal Securities,that:
_- (A) may be applied only to the payment of principal, redemption
premium and interest on the obligations, and
(B) is sufficient, as verified by an independent certified public
accountant, to pay the principal, redemption premium and interest on the
obligations.
"Depreciation and Replacement Account" means the fund or account designated as such and
created or ratified by Section 401.
"Escrow Agreement" means the Escrow Trust Agreement dated as of January 1, 2010, between
the City and the Paying Agent, as supplemented, modified or amended in accordance with its terms,
related to the Bonds.
"Federal Securities" means any direct obligation of, or obligation the timely payment of the
principal of and interest on which is unconditionally guaranteed by, the United States of America and
backed by its full faith and credit.
"Funds Transfer Method" means electronic transfer in immediately available funds, automated
clearing house (ACH) funds, or other method approved by DNR at the written request of the City with
written notice to the Paying Agent.
"Grant Agreement" means the Financial Assistance Agreement dated on or prior to the Closing
Date, between the City and DNR, in the maximum amount of$1,000,000 (or such higher amount as may
be approved by the Commission and DNR), together with all related attachments, as supplemented,
modified or amended by the City and DNR.
"Interest Payment Date" means each January 1 and July 1, commencing July 1, 2010.
"Interest Rate" means the annual rate equal to 30% of the Revenue Bond Index as published in
The Bond Buyer most recently prior to the Closing Date, rounded up to the nearest 0.01%.
"Investment Securities" means any of the following securities that are legal for the investment of
funds of the City at the time of purchase:
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(a) Federal Securities;
(b) Direct and general obligations of the State, the payment of the principal of and
interest on which the full faith and credit of the State is pledged;
(c) Obligations of the Federal National Mortgage Association, the Government
National Mortgage Association, the Federal Financing Bank, the Federal Intermediate Credit
Corporation, Federal Banks for Cooperatives, Federal Land Banks, Federal Home Loan Banks,
Farmers Home Administration and Federal Home Loan Mortgage Corporation;
(d) Deposits which are either (1) continuously and fully insured by the Federal
Deposit Insurance Corporation, or (2) continuously and fully secured by such securities as are
described above in clauses (a) through (c), which shall have a market value, exclusive of accrued
interest, at all times at least equal to the principal amount of such certificates of deposit or time
deposits, in one or more of the following institutions: banks, trust companies or savings and loan
associations (including without limitation, the Paying Agent or any bank affiliated with the
Paying Agent)organized under the laws of the United States of America or any state thereof,
(e) Money market mutual funds that are invested in Federal Securities or repurchase
agreements that are collateralized by Federal Securities; and
(f) Any other securities or investments that are lawful for the investment of moneys
held in such funds or accounts under the laws of the State of Missouri.
"Net Revenues" means Revenues less Current Expenses.
"Operation and Maintenance Account" means the fund or account designated as such and created
or ratified by Section 401.
"Ordinance" means this Ordinance as from time to time amended in accordance with its terms.
"Outstanding" means, as of the date of determination, all Bonds issued and delivered under this
Ordinance, except:
(1) Bonds canceled by the Paying Agent or delivered to the Paying Agent for
cancellation;
(2) Bonds for the payment of the principal or redemption price of and interest on
which money or Defeasance Securities are held under Section 1001;
(3) Bonds in exchange for which, or in lieu of which, other Bonds have been
registered and delivered pursuant to this Ordinance; and
(4) Bonds allegedly mutilated, destroyed, lost, or stolen and paid under Section 208.
"Owner" means DNR or any assignee, successor or transferee of DNR under the Direct Loan
Program or the SRF Leveraged Program.
"Parity Bonds" means the Outstanding Parity Bonds and any other parity bonds issued under
Section 802 payable from the Net Revenues on a parity basis with the Bonds.
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"Parity Ordinance" means this Ordinance, the Outstanding Parity Bond Ordinance and the
ordinances under which any other Parity Bonds are issued.
"Paying Agent" means UMB Bank, N.A., the paying agent and escrow agent, and its successors
and assigns acting at any time as Paying Agent and Escrow Agent under this Ordinance and the Escrow
Agreement.
"Principal Payment Date" means each January 1 and July 1, commencing January 1, 2011, and
any date on which the Bonds are optionally redeemed in accordance with Section 301.
"Purchase Agreement" means the Purchase Agreement dated as of January 1, 2010, between the
City and DNR, as supplemented, modified or amended in accordance with its terms, related to the Bonds.
"Purchase Price Installment" means the amount paid by DNR from time to time in accordance
with Section 3.3 of the Purchase Agreement and deposited in the Construction Fund or otherwise in
accordance with Section 403.
�Vv 41
"Quarterly Payment Date" means each March 15, June 15, September 15 and December 15.
"Rating Agency" means Moody's Investors Service, Inc. or Standard &Poor's Ratings Services.
"Record Date" for the interest payable on any Interest Payment Date means the 25th day(whether
or not a Business Day) of the calendar month next preceding the applicable Interest Payment Date.
"Repayment Fund" means the fund designated as such and established by Section 4 of the Escrow
Agreement. The Repayment Fund does not constitute part of the Direct Loan Program.
"'Revenue Fund" means the fund or account designated as such and created or ratified by
Section 401.
"Revenues" means all income and revenues derived by the City from the System, including
investment and rental income, net proceeds from business interruption insurance, sales tax revenues
which have been annually appropriated by the City or which are limited solely to the payment of
improvements to or expenses of the System, and any amounts deposited in escrow in connection with the
acquisition, construction, remodeling, renovation and equipping of facilities to be applied during the
period of determination to pay interest on System Revenue Bonds, but excluding any profits or losses on
the early extinguishment of debt or on the sale or other disposition of investments or fixed or capital
assets not in the ordinary course of business.
"SRF Leveraged Program" means the Missouri Leveraged State Drinking Water Revolving Fund
Program and the Missouri Leveraged State Water Pollution Control Revolving Fund Program.
"SRF Leveraged Program Bonds" means any bonds of the City issued in connection with the
City's participation in the SRF Leveraged Program.
"SRF Subsidy" means the amount of investment earnings which will accrue on the Reserve
Account during each Fiscal Year (taking into account scheduled transfers from the Reserve Account
which will occur upon the payment of principal on Authority Program Bonds and assuming that the
construction for the applicable project has been completed), if the balance in the Reserve Account is equal
to the Reserve Percentage of the principal amount of the SRF Leveraged Program Bonds outstanding, the
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Reserve Account is invested in an investment agreement at a fixed rate during the calculation period and
earnings are reduced by the Administrative Fee payable to DNR. Administrative Fee, Reserve Account
and Reserve Percentage as used in this definition have the respective. meanings set forth in the bond
indentures for the applicable Authority Program Bonds.
"State" means the State of Missouri.
"Stated Maturity" means January I, 2030,the final maturity date of the Bonds.
"Surplus Account" means the fund or account created or ratified in Section 401.
"System Revenue Bonds" means, collectively, the Bonds, the Outstanding Parity Bonds and all
other revenue bonds which are payable from the Net Revenues.
"User Charge Ordinance"'means Ordinance No. 4040, passed June 15, 2009, as amended,
supplemented or replaced.
>` ARTICLE II ..
AUTHORIZATION OF BONDS
Section 201. Authorization of Bonds. The Bonds are authorized and directed to be issued in
the Maximum Principal Amount subject to the terms and for the purposes of this Ordinance. Upon the
Completion of Funding pursuant to the Purchase Agreement, the principal amount of the Bonds issued
under this Ordinance will be the Cumulative Principal Amount Outstanding as of the Completion of
Funding plus the principal amount previously redeemed pursuant to Article III. The remaining voted
authorization, if any, will be the voted amount less the amount issued as calculated pursuant to the
preceding sentence.
Section 202. Security for Bonds.
(a) The Bonds are special, limited obligations of the City payable solely from, and secured
by a pledge of, the Net Revenues. The taxing power of the City is not pledged to the payment of the
Bonds. The Bonds do not constitute a general obligation of the City or an indebtedness of the City within
the meaning of any constitutional, statutory or charter provision, limitation or restriction.
(b) The Bonds are issued on a parity with the Outstanding Parity Bonds.
Section 203. Description of Bonds. The Bonds consist of registered bonds without coupons,
numbered from R-1 consecutively upward, in the denomination of$100 or any integral multiple of$0.01
in excess thereof. The Bonds will be issued in substantially the form of Exhibit A and will be registered,
transferred and exchanged as provided in Section 206. The Bonds are dated the Closing Date. The Bonds
will mature and become due on the Stated Maturity (subject to optional and mandatory redemption prior
to Stated Maturity as provided in Article III). The Bonds will bear interest on the Cumulative Principal
Amount Outstanding at the Interest Rate from the Closing Date and the date of receipt of each Purchase
Price Installment by the Paying Agent pursuant to the Purchase Agreement(as set forth on Schedule A to
a Bond) or from the most recent Interest Payment Date to which interest has been paid or provided for.
Interest is computed on the basis of a 360-day year of twelve 30-day months and is payable on each
Interest Payment Date.
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Section 204. Designation of Paying Agent. The City has designated the Paying Agent as the
City's paying agent for the payment of the principal of and interest on the Bonds, bond registrar for the
registration, transfer and exchange of Bonds and escrow agent with respect to the funds established with
the Paying Agent under the Escrow Agreement.
Section 205. Method and Place of Payment of Bonds.
(a) Payment of the Bonds will be made with any coin or currency that is legal tender for the
payment of debts due the United States of America on the payment date.
(b) The payment of the principal of and redemption premium, if any, payable on each Bond
at Stated Maturity or upon earlier redemption and the interest payable on each Bond on any Interest
Payment Date will be made by check or draft mailed by the Paying Agent to the address of the Owner
shown in the Bond Register. The principal of and redemption premium, if any, and interest on the Bonds
is payable by electronic transfer in immediately available federal funds to a bank in the continental United
States of America pursuant to instructions from any Owner received by the Paying Agent prior to the
Record Date.
(c) Payments of principal on the Bonds pursuant to Article III may be made directly to the
Owner without surrender of any Bond to the Paying Agent. Accordingly, any transferee of a Bond should
verify with the Paying Agent the principal of the Bond outstanding prior to such purchase or transfer, and
the records of the Paying Agent shall be conclusive for such purposes.
(d) The Paying Agent will keep a record of payment of principal of, redemption premium, if
any, and interest on all Bonds and, at least annually at the request of the City, will forward a copy or
summary of the record of payments to the City.
(e) The Bonds will be held by the Paying Agent in trust for each Owner, unless the Paying
Agent is otherwise directed in writing by an Owner.
Section 206. Registration, Transfer and Exchange of Bonds.
(a) The City will cause the Paying Agent to keep the Bond Register. Each Bond when issued
will be registered in the name of the Owner on the Bond Register. Bonds will be transferred and
exchanged only upon the Bond Register.
(b) Upon surrender of any Bond at the payment office of the Paying Agent in St. Louis,
Missouri (or other office designated by the Paying Agent), the Paying Agent will transfer or exchange the
Bond for a new Bond or Bonds in any authorized denomination of the same Stated Maturity and in the
same aggregate principal amount as the Bond which was presented for transfer or exchange. All Bonds
presented for transfer or exchange must be accompanied by a written instrument of transfer or
authorization for exchange, in a form and with guarantee of signature satisfactory to the Paying Agent,
duly executed by the Owner or by the Owner's authorized agent. All Bonds presented for transfer or
exchange must be surrendered to the Paying Agent for cancellation.
(c) For every exchange or transfer of Bonds the City or the Paying Agent may levy a charge
sufficient to reimburse it for any tax, fee or other governmental charge required to be paid for the
exchange or transfer. The person requesting the exchange or transfer must pay the charge. Payment of
the charge is a condition precedent to the exchange or transfer. If any Owner fails to provide a correct
taxpayer identification number to the Paying Agent, the Paying Agent may make a charge against the
Owner sufficient to pay any governmental charge required to be paid as a result of such failure. In
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compliance with Section 3406 of the Internal Revenue Code of 1986, as amended, this amount may be
deducted by the Paying Agent from amounts payable to the Owner under this Ordinance and the Bonds.
(d) The City and the Paying Agent will treat the person in whose name any Bond is
registered on the Bond Register as the absolute owner of the Bond, whether or not payment of the Bond is
overdue, for the purpose of receiving payment of the principal of, redemption premium, if any, and
interest on the Bond and for all other purposes. All payments made to any Owner or upon the Owner's
order will be valid and effectual to satisfy and discharge the City's liability for payment of the Bond to
the extent of the sum or sums paid. Neither the City nor the Paying Agent will be affected by any notice
to the contrary.
(e) At reasonable times and under,reasonable rules established by the Paying Agent, the
Owners of 25% or more in principal amount of the Outstanding Bonds, or their representative designated
in a manner satisfactory to the Paying Agent, may inspect and copy the Bond Register.
Section 207. Execution, Authentication and Delivery of Bonds.
(a) Each Bond must be signed by the manual or facsimile signature of the Mayor and attested
by the manual or facsimile signature of the City Clerk, and have the official seal of the City affixed or
imprinted thereon. If any officer whose manual or facsimile signature appears on any Bond ceases to be
an officer before the delivery of any Bond signed by the officer, the manual or facsimile signature on the
Bond will be valid and sufficient for all purposes of this Ordinance.
(b) The Mayor and the City Clerk are directed to prepare and execute the Bonds as specified
in this Article, and when executed, to deliver the Bonds to the Paying Agent for authentication. Each
Bond will be authenticated by any authorized signatory of the Paying Agent. No Bond is entitled to any
security or benefit under this Ordinance or is valid or obligatory for any purpose until authenticated by the
Paying Agent.
(c) Prior to the Completion of Funding, promptly upon the receipt by the Paying Agent of
each Purchase Price Installment paid by the Owner in accordance with the Purchase Agreement, an
authorized signatory of the Paying Agent will endorse Schedule A to a Bond with the date of receipt of
the Purchase Price Installment, the amount of the Purchase Price Installment and the resulting Cumulative
Principal Amount Outstanding. No further entries to Schedule A will be made after the Completion of
Funding.
Section 208. Mutilated, Destroyed, Lost and Stolen Bonds.
(a) If(i) any mutilated Bond is surrendered to the Paying Agent, or the City and the Paying
Agent receive evidence to their satisfaction of the mutilation, destruction, loss or theft of any Bond, and
(ii) there is delivered to the City and the Paying Agent security or indemnity as required by them, in the
absence of notice to the City or the Paying Agent that the Bond has been acquired by a bona fide
purchaser, the City will execute and the Paying Agent will register and deliver, in exchange for or in lieu
of any mutilated, destroyed, lost or stolen Bond, a new Bond of the same Stated Maturity and of like tenor
and principal amount. If the Bond has become or is about to become due, the City may pay the Bond
instead of issuing a new Bond.
(b) Upon the issuance of any new Bond under this Section, the City or the Paying Agent may
require the payment by the Owner of a sum sufficient to cover any tax or other governmental charge
imposed and any other expenses (including the fees and expenses of the Paying Agent) connected with
the issuance of the Bond.
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(c) Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost
or stolen Bond will constitute a replacement of the prior obligation of the City, whether or not the
mutilated, destroyed, lost or stolen Bond is enforceable by anyone at any time, and will be entitled to all
the benefits of this Ordinance equally and ratably with all other Outstanding Bonds.
Section 209. Cancellation and Destruction of Bonds Upon Pam. All Bonds which have
been paid or redeemed or which have otherwise been surrendered to the Paying Agent, either at or before
Stated Maturity, will be canceled immediately upon the payment or redemption and the Paying Agent's
receipt of the Bonds. The Paying Agent will periodically destroy canceled Bonds. The Paying Agent will
execute a certificate in duplicate describing the destroyed Bonds and file an executed counterpart of the
certificate with the City.
Section 210. Sale of the Bonds: Authorization and Execution of Documents.
(a) The Bonds will be sold to the Owner at the purchase price of 100% of the initial
installment paid on the Closing Date plus each Purchase Price Installment made by the Owner thereafter
pursuant to Section 3.3 of the Purchase Agreement, without accrued interest.
(b) The City is authorized to enter into the Purchase Agreement, the Escrow Agreement and
the Grant Agreement, in substantially the forms presented to the Governing Body. The Mayor is
authorized to execute the Purchase Agreement, the Escrow Agreement and the Grant Agreement for and
on behalf of and as the act and deed of the City, with changes approved by the Mayor, which approval
will be conclusively evidenced by the signature of the Mayor of the City. The Mayor is further
authorized and directed to execute other documents, certificates and instruments that are necessary or
desirable to carry out the intent of this Ordinance. The City Clerk is authorized and directed to attest the
execution of the Purchase Agreement, the Escrow Agreement and the Grant Agreement and any other
documents, certificates and instruments that are necessary or desirable to carry out the intent of this
Ordinance.
Section 211. Administrative Fee and Paying Agent's Fee. Subject to Section 202, the City
will pay to the Paying Agent, within 30 days after receipt of a statement from the Paying Agent, (i) the
Administrative Fee, and (ii) an amount equal to the Paying Agent's fees and expenses as provided in the
Escrow Agreement.
ARTICLE III
REDEMPTION OF BONDS
Section 301. Optional Redemption. At the option of the City, with the prior written consent of
the Owner, Bonds may be called for redemption and payment prior to Stated Maturity in whole or in part
at any time, at the redemption price of 100% of the principal amount thereof plus accrued interest thereon
to the date of redemption.
Section 302. Mandatory Redemption Provisions.
(a) The Bonds are subject to mandatory sinking fund redemption in part, at a redemption
price equal to 100% of the principal amount thereof plus accrued interest to the redemption date, on the
Principal Payment Dates and in the principal amounts as set forth on Exhibit B.
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(b) If upon the Completion of Funding, the Cumulative Principal Amount Outstanding is less
than the Maximum Principal Amount (disregarding any scheduled redemptions above that have occurred
prior to the Completion of Funding), the principal amount for each Principal Payment Date following the
Completion of Funding will be reduced on a proportionate basis (to the nearest $0.01). The Owner will
provide a replacement Exhibit B reflecting the reductions to the principal amounts to the Paying Agent
and the City, which will be binding on the City absent manifest error and will replace the previous Exhibit
B without any further action on the part of the City. The revised Exhibit B is subject to such verification
requirements as may be reasonably established by the Paying Agent.
Section 303. Selection of Bonds'to Be Redeemed. The redemption of the Bonds in part will
be reflected in the records maintained by the Paying Agent.
Section 304. Notice and Effect of Call for Redemption.
(a) No notice of the mandatory redemption of Bonds is required to be given. If the Bonds
are being optionally redeemed, notice of redemption will be given in the manner described below. Unless
waived'by any Owner of Bonds to be redeemed, the Paying Agent, on.behalf of the City, will give notice
=' by mailing a redemption notice, at least 15 days, but not more than` 0 days;prior to the date fixed for
redemption,to the Owner of Bonds to be redeemed at the address shown on the Bond Register.
(b) All redemption notices will be dated and include the following information:
(1) the redemption date,
(2) the redemption price, consisting of the principal amount, redemption premium, if
any, and interest to the redemption date,
(3) if less than all Outstanding Bonds are to be redeemed, the identification number,
Stated Maturity and, in the case of partial redemption of any Bond, the respective principal
amounts of the Bonds to be redeemed,
(4) a statement that on the redemption date the redemption price will become due
and payable upon each Bond or portion of a Bond called for redemption, and that interest ceases
to accrue on the redeemed amount from and after the redemption date, and
(5) the address of the principal office of the Paying Agent where the Bonds must be
surrendered for payment of the redemption price.
(c) If notice of redemption has been given or waived, the Bonds or portions to be redeemed
will become due and payable on the redemption date at the redemption price specified in the notice.
From and after the redemption date (unless the City defaults in the payment of the redemption price), the
called Bonds will cease to bear interest. Upon the surrender of Bonds for payment of the redemption
price in accordance with the notice, the Paying Agent will pay the redemption price to the applicable
Owners.
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ARTICLE IV
RATIFICATION AND ESTABLISHMENT OF FUNDS AND ACCOUNTS
Section 401. Ratification and Establishment of Funds and Accounts.
(a) The separate funds and accounts created in, or ratified by, the Outstanding Parity Bond
Ordinance known respectively as the:
(1) Waterworks.System Revenue Fund (the"Revenue Fund");
(2) Waterworks System Operation and Maintenance Account (the "Operation and
Maintenance Account');
(3) Interest Account, Principal Account and Debt Service Account for the Waterworks
System Revenue Bonds (State Revolving Fund Program) Series 1998 (collectively the "Series
1998 SRF Parity Bond Debt Service Account');
(3 a) Debt Service Account for the Waterworks System Refunding Revenue Bonds,
Series 2006A (the "Series 2006A Parity Bond Debt Service Account," together with the Series
1998 SRF Parity Bond Debt Service Account, the "Outstanding Parity Bond Debt Service
Account');
(4) Reserve Account for the Waterworks System Revenue Bonds (State Revolving
Fund Program) Series 1998 (the"Series 1998 SRF Parity Bond Debt Service Reserve Account');
(4a) Debt Service Reserve Account for the Waterworks System Refunding Revenue
Bonds, Series 2006A (the "Series 2006A Parity Bond Debt Service Reserve Account," together
with the Series 1998 SRF Parity Bond Debt Service Reserve Account, the "Outstanding Parity
Bond Debt Service Reserve Account');
(5) Waterworks System Depreciation and Replacement Account (the "Depreciation
and Replacement Account'); and
(6) Waterworks System Surplus Account(the"Surplus Account')
are hereby ratified.
(b) The City hereby establishes the following special funds and accounts with the Paying
Agent under the Escrow Agreement:
(1) the Debt Service Fund;
(2) the Construction Fund;
(3) the Repayment Fund, consisting of the Principal Account and the Interest
Account; and
(4) the Administrative Expense Fund; and
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(5) the Debt Service Reserve Account.
(c) The separate fund known as the Capital Improvement Sales Tax Revenue Fund
established in the treasury of the City under the Capital Improvement Sales Tax Ordinance is ratified.
Section 402. Administration of Funds and Accounts. The funds and accounts described in
Section 401(a)(1), (2), (5) and (6) will be maintained and administered by the City under this Ordinance
and the Outstanding Parity Bond Ordinance while any of the Bonds and the Outstanding Parity Bonds, as
applicable, are outstanding. The funds and accounts described in Section 401(a)(3),(3a),(4)and (4a)will
be maintained and administered by the City while any of the Outstanding Parity Bonds are outstanding.
The funds and accounts described in Section 401(b) will be maintained and administered by the Paying
Agent pursuant to the Escrow Agreement while the Bonds are Outstanding.
Section 403. Deposits and Application of Bond Proceeds.
(a) The proceeds received from the sale of the Bonds on the Closing Date will be deposited
upon the delivery of the Bonds into the Construction Fund and the Administrative Expense Fund as
provided in the Escrow Agreement. Thereafter, each Purchase Price Installment will be deposited into the
Construction Fund.
(b) Moneys in the Construction Fund will be disbursed to the City for the sole purpose of
paying the Eligible Costs of the Project in accordance with the plans and specifications prepared by the
Consulting Engineer, previously approved by the Governing Body and DNR and on file in the office of
the City Clerk, including any alterations in or amendments to the plans and specifications approved by the
Governing Body and DNR with the advice of the Consulting Engineer.
(c) Requisitions will be submitted for funding of the Purchase Price Installments and
resulting withdrawals from the Construction Fund in accordance with Article III of the Purchase
Agreement. Funds will be disbursed from the Administrative Expense Fund as provided in the Escrow
Agreement.
ARTICLE V
APPLICATION OF REVENUES AND CAPITAL IMPROVEMENT SALES TAX REVENUES
Section 501. Revenue Fund and Capital Improvement Sales Tax Revenue Fund.
(a) The City covenants and agrees that from and after the delivery of the Bonds and so long
as any of the Bonds remain outstanding and unpaid, all Revenues derived and collected by the City(other
than Capital Improvement Sales Tax Revenues) will be deposited into the Revenue Fund when received.
The Revenues will be segregated from all other moneys, revenues, funds and accounts of the City. The
Revenue Fund will be administered and applied solely for the purposes and in the manner provided in
Outstanding Parity Bond Ordinance,this Ordinance and any other Parity Ordinance.
(b) The City covenants and agrees that from and after the delivery of the Bonds, all Capital
Improvement Sales Tax Revenues will be deposited into the Capital Improvement Sales Tax Revenue Fund
when received. The Capital Improvement Sales Tax Revenues will be segregated from all other moneys,
revenues, funds and accounts of the City.
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Section 502. Application of Moneys in Funds and Accounts.
(a) The City will apply moneys in the Revenue Fund and, subject to annual appropriation by
the Governing Body, moneys in the Capital Improvement Sales Tax Revenue Fund on the dates, in the
amounts and in the order as follows:
(1) on the first day of each month, to the Operation and Maintenance Account an
amount sufficient to pay the estimated cost of operating and maintaining the System during the
month;
(2) on a parity basis (i) at the times required under the Outstanding Parity Bond
Ordinance, to the Outstanding Parity Bond Debt Service Account the amount required under the
Outstanding Parity Bond Ordinance and (ii) by the Funds Transfer Method, on each Quarterly
Payment Date, to the Paying Agent for credit to the Interest Account and the Principal Account:
(A) to the Interest Account, on March 15, 2010 and each Quarterly Payment
Date thereafter, 1/2 of the amount of interest due on the Bonds on the next Interest
Payment Date, with the balance in the Debt Service Fund and the Interest Account on an
Interest Payment Date after the payment of the principal of and interest due on the Bonds
on the Interest Payment Date to be credited against the next succeeding quarterly
payment; provided that prior to the Completion of Funding,
(i) the investment earnings on the Construction Fund for the
preceding calendar quarter will be credited against the next quarterly payment,
(ii) for purposes of the first quarterly payment of each Interest
Period, the amount of interest due on the next Interest Payment Date will be
estimated based upon an expected disbursement schedule for the Interest Period
provided by the City to DNR and the Paying Agent, and
(iii) for purposes of the second quarterly payment of each Interest
Period, the interest due on the next Interest Payment Date will be calculated by
the Paying Agent based upon Purchase Price Installments funded at least three
Business Days prior to the Quarterly Payment Date and the second quarterly
payment calculated so that the amount on deposit in the Interest Account after
receipt of the second quarterly payment will equal interest payable on the Bonds
on the Interest Payment Date; and
(B) to the Principal Account, on September 15, 2010, and each Quarterly
Payment Date thereafter, 1/2 of the principal due on the Bonds on the next succeeding
Principal Payment Date, whether at Stated Maturity or upon mandatory sinking fund
redemption. If the Initiation of Operations specified in the certificate delivered by the
City under Section 3.5 of the Purchase Agreement is earlier than the expected Initiation
of Operations, (i) the first quarterly installment of principal of the Bonds will be paid no
later than the Quarterly Payment Date which is not more than 12 months after the
Initiation of Operations, and (ii) on the Quarterly Payment Date which is not more than
20 years after the Initiation of Operations, all remaining unpaid principal installments of
the Bonds will be paid;
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(3) at the times required under the Outstanding Parity Bond Ordinance, to the
Outstanding Parity Bond Debt Service Reserve Account the amount required under the
Outstanding Parity Bond Ordinance;
(4) on the dates required by Section 211, to the Paying Agent for deposit to the
Administrative Expense Fund,the amounts required to pay the Administrative Fee and the Paying
Agent's Fees and expenses;
(5) to the Depreciation and Replacement Account, the amounts on the dates required
by the User Charge Ordinance; and
(6) on each Quarterly Payment Date,the remaining balance to the Surplus Account.
(b) The City will make deposits (subject to annual appropriation)to, and apply the moneys in,
the Debt Service Reserve Account as provided in.this paragraph.
(1) On the Closing Date, the City will transfer to the Paying Agent for deposit to the
Debt Service Reserve Account, from the Capital Improvement Sales Tax -Revenue Fund, an
amount equal to the Debt Service Reserve Requirement.
(2) Moneys in the Debt Service Reserve Account will be expended and used solely
to prevent any default in the payment of interest on or principal of the Bonds on any maturity date
or Interest Payment Date if the moneys in the Principal Account and the Interest Account are
insufficient to pay the interest on or principal of the Bonds as they become due.
(3) If any amount in the Debt Service Reserve Account is expended in accordance
with subparagraph (2), commencing on the first Quarterly Payment Date following the
expenditure, the City will transfer to the Paying Agent for deposit to the Debt Service Reserve
Account, from the Capital Improvement Sales Tax Revenue Fund, an amount equal to 1/4 of the
amount expended until the balance in the Debt Service Reserve Account again equals the Debt
Service Reserve Requirement.
(4) Moneys in the Debt Service Reserve Account may be used to call the Bonds for
redemption and payment prior to their stated maturity, provided all of the Bonds at the time
Outstanding are called for payment and funds are available to pay the same according to their
terms. Moneys in the Debt Service Reserve Account will be used to pay and retire the last
Outstanding Bonds unless the Bonds are otherwise paid.
(5) Any investment earnings on the Debt Service Reserve Account or amounts in
excess of the Debt Service Reserve Requirement will be deposited in the Capital Improvement
Sales Tax Revenue Fund.
(c) Except as provided in Section 503, moneys in the Depreciation and Replacement Account
will be used by the City for the purpose of making replacements and repairs to the System in order to
keep the System in good repair and working order and to assure the continued effective and efficient
operation of the System.
(d) Moneys in the Surplus Account are to be expended for the following purposes as
determined by the Governing Body:
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(1) paying the cost of the operation, maintenance and repair of the System to the
extent necessary after the application of the moneys held in the Operation and Maintenance
Account;
(2) paying the cost of extending,enlarging or improving the System;
(3) preventing default in, anticipating payments into or increasing the amounts in the
accounts confirmed or established in Section 401, the Principal Account, the Interest Account or
the Depreciation and Replacement Account, or establishing or increasing the amount of any debt
service account or debt service reserve account created by the City for the payment of any System
Revenue Bonds subsequently issued; or
(4) redeeming and paying prior to Stated Maturity, or, at the option of the City,
purchasing in the open market at the best price obtainable not exceeding the call price (if any
bonds are callable), the Bonds, the Outstanding Parity Bonds or any other System Revenue Bonds
hereafter issued under the conditions hereinafter specified and standing on a parity with the
Bonds, including principal, redemption premium, if any, and interest.
(e) All amounts paid and credited to the Operation and Maintenance Account will be
expended solely for the purpose of paying the Current Expenses of the System.
(f) No moneys derived by the City from the System will be diverted to the general
governmental or municipal functions of the City.
(g) If the deposits to the Operation and Maintenance Account (the "OM Deposits") required
under this Section are greater than the OM Deposits required in the User Charge Ordinance, the OM
Deposits under the User Charge Ordinance will be deemed a credit toward OM Deposits required under
this Section. If the OM Deposits required under this Section are less than those required in the User
Charge Ordinance, OM Deposits under this Section will be deemed a credit to OM Deposits required
under the User Charge Ordinance.
Section 503. Deficiency f Payments into Funds and Accounts.
(a) If the Revenues are insufficient to make any payment on any date specified in this
Article, the City will make good the amount of the deficiency by making additional payments out of the
first available Revenues for application in the order specified in Section 502.
(b) If the moneys in the Outstanding Parity Bond Debt Service Account, the Outstanding
Parity Bond Debt Service Reserve Account, the Principal Account or the Interest Account are not
sufficient to pay the principal of and interest on the Outstanding Parity Bonds and the Bonds as and when
the same become due, the City will apply moneys in the Surplus Account and the Depreciation and
Replacement Account on a proportionate basis (based upon the outstanding principal amounts of the
Bonds and the Outstanding Parity Bonds) to the Outstanding Parity Bond Debt Service Account, the
Principal Account and the Interest Account to prevent any default in the payment of the principal of and
interest on the Outstanding Parity Bonds and the Bonds.
Section 504. Transfer of Funds to Paying_Agent. The Mayor or the City Clerk is authorized
and directed to make the payments to the Principal Account and the Interest Account as provided in
Section 502, and, to the extent necessary to prevent a default in the payment of any System Revenue
Bonds, from the Surplus Account and from the Depreciation and Replacement Account as provided in
Sections 502 and 503, sums sufficient to pay the System Revenue Bonds when due, and to forward
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amounts to the Paying Agent by the Funds Transfer Method which ensures the Paying Agent will have
sufficient available funds on or before the second Business Day immediately preceding the dates when
payments on the Bonds are due. Upon the payment of all principal and interest on the Bonds, the Paying
Agent will return any excess funds to the City. Except as otherwise provided in the Escrow Agreement,
all moneys deposited by the City with the Paying Agent are subject to the provisions of this Ordinance.
Section 505. Business Days. If any date for the payment of principal of, or redemption
premium, if any, or interest on the Bonds or the taking of any other action hereunder is not a Business
Day, then such payment shall be due, or such action shall be taken, on the first Business Day thereafter
with the same force and effect as if made on the date fixed for payment or performance.
ARTICLE VI
INVESTMENT OF MONEYS
Section 601. Investment of Moneys.
(a) Moneys held in any fund or account referred to in this Ordinance may be invested in
Investment Securities; provided, however, that any fund or account held by the Paying Agent shall be
invested as provided in Section I I of the Escrow Agreement. No such investment will be made for a
period extending longer than the date when the money invested may be needed. All earnings on any
investments held in any fund or account will accrue to the applicable fund or account. In determining the
amount held in any fund or account under this Ordinance, obligations will be valued at the lower of cost
or market value. If the amount in any fund or account held within the Treasury of the City is greater than
the required amount,the City may transfer the excess to the Revenue Fund.
(b) If the Outstanding Parity Bonds are outstanding, any investments made pursuant to this
Section are subject to the applicable restrictions in the Outstanding Parity Bond Ordinance.
ARTICLE VII
PARTICULAR COVENANTS OF THE CITY
Section 701. Efficient and Economical Operation; User Charge Ordinance. The City will
continuously own and will operate the System in an efficient and economical manner and will keep and
maintain the System in good repair and working order. The City has duly approved the User Charge
Ordinance and will enforce the provisions thereof.
Section 702. Rate Covenant. The City will fix, establish, maintain and collect rates and
charges for the use and services furnished by or through the System to produce income and revenues
sufficient to (a)pay the costs of the operation and maintenance of the System; (b) pay the principal of and
interest on the Bonds as and when due; (c) enable the City to have in each Fiscal Year Net Revenues of
not less than 1 10% of the amount required to be paid by the City in the Fiscal Year on account of both
principal of and interest on all System Revenue Bonds at the time outstanding, provided that interest on
any SRF Leveraged Program Bonds will be reduced by the SRF Subsidy, if any; and (d) provide
reasonable and adequate reserves for the payment of the Bonds and the interest thereon and for the
protection and benefit of the System as provided in this Ordinance. The City will require the prompt
payment of accounts for service rendered by or through the System and will promptly take whatever
action is legally permissible to enforce and collect delinquent charges.
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Section 703. Reasonable Charges for all Services. None of the facilities or services provided
by the System will be furnished to any user (excepting the City itself) without a reasonable charge being
made therefor. If the income and revenues derived by the City from the System are insufficient to pay the
reasonable expenses of operation and maintenance of the System and the principal of and interest on the
Bonds when due, the City will pay into the Revenue Fund a fair and reasonable payment in accordance
with effective applicable rates and charges for all services or other facilities furnished to the City or any
of its departments by the System.
Section 704. Annual Budget. Prior to the commencement of each Fiscal Year, the City will
cause a budget setting forth the estimated receipts and expenditures of the System for the next succeeding
Fiscal Year to be prepared and filed with the City Clerk. The City Clerk, within 30 days after the end of
the current Fiscal Year, will mail a copy of the budget to the Owner. The annual budget will be prepared
in accordance with the laws of the State.
Section 705. Annual Audit.
(a) Promptly after the end of each Fiscal Year, the City will cause an audit of the System for
the preceding Fiscal Year to be +made b" a certified public accountant or firm of certified public
accountants employed for that purpose and paid from the Revenues. The annual audit will cover in
reasonable detail the operation of the System during the Fiscal Year.
(b) As soon as possible after the completion of the annual audit, the Governing Body will
review the annual audit, and if the annual audit reveals any breach of this Ordinance, the City agrees to
promptly cure the breach.
(c) Within 30 days after the acceptance of the audit by the Governing Body, a copy of the
annual audit will be filed in the office of the City Clerk, and a copy of the audit will be mailed to the
Owner. The annual audit will be open to examination and inspection during normal business hours by
any taxpayer, any user of the services of the System, the Owner, or anyone acting for or on behalf of the
taxpayer, user or Owner.
(d) The City acknowledges its undertakings set forth in Section 2.40 of the Purchase
Agreement.
Section 706. Performance of Duties. The City will faithfully and punctually perform all duties
and obligations with respect to the operation of the System, including all extensions and improvements
thereto, now or hereafter imposed upon the City by the constitution and laws of the State and by the
provisions of this Ordinance.
ARTICLE VIII
ADDITIONAL BONDS
Section 801. Prior Lien Bonds. The City will not issue any debt obligations payable out of the
Net Revenues which are superior in lien, security or otherwise to the Bonds.
Section 802. Parity Lien Bonds or Obligations.
(a) The City will not issue any additional bonds or other long-term obligations payable out of
the Net Revenues of the System that stand on parity or equality with the Bonds unless the following
conditions are met:
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(1) the City is not in default in the payment of principal or interest on the Bonds or
any Parity Bonds or in making any deposit into the funds and accounts under this Ordinance or
any Parity Ordinance; and
(2) the City provides to the Owner a certificate showing either of the following:
(A) the average annual Net Revenues as set forth in the two most recent
annual audits for Fiscal Years preceding the issuance of additional bonds, are at least
110% of the average annual debt service on the System Revenue Bonds, including the
additional bonds proposed to be issued, to be paid out of the Net Revenues in all
succeeding Fiscal Years. Interest to be paid on any SRF Leveraged Program Bonds may
be reduced by the SRF Subsidy, if any. If the City has made any increase in rates for the
use and services of the System and the increase has not been in effect during all of the
two Fiscal Years for which annual audits are available, the City may add the additional
Net Revenues which would have resulted if the rate increase had been in effect for the
entire period to the audited Net Revenues, as certified by a Consultant; or
(B) the estimated average annual Net Revenues for the two Fiscal Years
immediately following the Fiscal Year in which the improvements to the System being
financed by the additional bonds are to be in commercial operation, as certified by a
Consultant, is at least 110% of the average annual debt service on the System Revenue
Bonds, including the additional bonds proposed to be issued, to be paid out of the Net
Revenues in succeeding Fiscal Years following the commencement of commercial
operation of the improvements. Interest to be paid on any SRF Leveraged Program
Bonds may be reduced by the SRF Subsidy, if any. In determining the amount of
estimated Net Revenues for the purpose of this subsection, a Consultant may adjust the
estimated net income and revenues by adding the estimated increase in Net Revenues
resulting from any increase in rates for the use and services of the System approved by
the City and to become effective during the two Fiscal Years immediately following the
Fiscal Year in which the improvements to the System being financed by the additional
bonds are to be in commercial operation.
(b) If the conditions set forth in this Section are satisfied, the City (i) may issue additional
revenue bonds or other obligations of the City on a parity with the Bonds and that enjoy complete
equality of the lien on the Net Revenues with the Bonds, (ii) may make equal provision for paying the
additional revenue bonds or other obligations from the Revenue Fund, and (iii) may secure the additional
revenue bonds or other obligations by funding reasonable System debt service accounts and debt service
reserve accounts from the Net Revenues.
Section 803. Junior Lien Bonds. Nothing in this Article prohibits or restricts the right of the
City to issue additional revenue obligations, including revenue bonds, for the purpose of extending,
improving, enlarging, repairing or altering the System, or refunding obligations issued for such purposes,
that are subordinate to the Bonds if at the time of the issuance of the additional revenue obligations the
City is not in default in the performance of any covenant or agreement in this Ordinance. If the City is in
default in paying either interest on or principal of the Bonds, the City will not make any payments on the
subordinate revenue obligations until the default is cured. Subject to the limitations in this Section, the
City may make provision for paying the principal of and interest on the subordinate revenue bonds or
obligations from moneys in the Revenue Fund.
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Section 804. Refunding Bonds. The City may, without complying with the provisions of
Section 802, refund any of the Bonds or any Outstanding Parity Bonds in a manner that provides debt
service savings to the City, and the refunding bonds so issued will be on a parity with any of the Bonds
that are not refunded and any Outstanding Parity Bonds. If the Bonds are refunded in part and the
refunding bonds bear a higher average rate of interest or become due on a date earlier than that of the
Bonds that are refunded,the City must obtain the prior written consent of the Owner to the issuance of the
refunding bonds.
ARTICLE IX
DEFAULT AND REMEDIES
Section 901. Events of Default. If(i) the City defaults in the payment of the principal of or
interest on any of the Bonds, or (ii) the City or its Governing Body or any of its officers, agents or
employees fails or refuses to comply with any provision of this Ordinance, the Constitution or statutes of
the State, the Purchase Agreement or the Escrow Agreement and default continues for a period of 60 days
after written notice specifying the non-payment default has been given to the City by the Owner of any
Bond then Outstanding, at any time thereafter acid while the default continues, the City shall pay to DNR
the penalties assessed by DNR in accordance with the Regulations.
Section 902. Remedies.
(a) The provisions of this Ordinance constitute a contract between the City and the Owners
of the Bonds. The Owner or Owners of not less than 10% in principal amount of the Bonds at the time
Outstanding have the right for the equal benefit and protection of all Owners of Bonds similarly situated:
(1) by any proceeding at law or in equity to enforce the rights of the Owner or
Owners against the City and its officers, agents and employees, and to compel the performance
by the City of its duties and obligations under this Ordinance, the Constitution and the laws of the
State;
(2) by any proceeding at law or in equity to require the City, its officers, agents and
employees to account as if they were the trustees of an express trust; and
(3) by any proceeding at law or in equity to enjoin any act or thing which is unlawful
or in violation of the rights of the Owners of the Bonds.
(b) Any amounts paid on the Bonds to the Owners will be applied first to interest and second
to principal,to the extent due and payable.
Section 903. Limitation on Rights of Owners. No Owner has any right in any manner
whatever by the Owner's action to affect, disturb or prejudice the security granted and provided for in, or
enforce any right under, this Ordinance, except in the manner provided in this Ordinance. All proceedings
at law or in equity will be for the equal benefit of all Owners.
Section 904. Remedies Cumulative. No remedy conferred upon the Owners is intended to be
exclusive of any other remedy. Each remedy is in addition to every other remedy and may be exercised
without exhausting any other remedy conferred under this Ordinance. No waiver by any Owner of any
default or breach of duty or contract of the City under this Ordinance will affect any subsequent default or
breach of duty or contract by the City or impair any rights or remedies thereon. No delay or omission of
any Owner to exercise any right or power accruing upon any default will impair any right or power or will
-21-
be construed to be a waiver of any default. Every substantive right and every remedy conferred upon the
Owners of the Bonds by this Ordinance may be enforced and exercised from time to time and as often as
may be expedient. If any Owner discontinues any proceeding or the decision in the proceeding is against
the Owner, the City and the Owners of the Bonds will be restored to their former positions and rights
under this Ordinance.
Section 905. No Obligation to Levy Taxes. Nothing in this.Ordinance imposes any duty or
obligation on the City to levy any.taxes either to meet any obligation incurred under this Ordinance or to
pay the principal of or interest on the Bonds.
'ARTICLE X
DEFEASANCE
Section 1001. Defeasance: When'all of the Bonds shall have been paid and discharged,then the
requirements contained in this Ordinance and the pledge of revenues made hereunder and all other rights
granted hereby shall terminate.. Bonds shall be deemed to have been paid and discharged within the
meaning of this Ordinance if there shall have'been deposited with the Paying Agent, or other-bank&trust
company located in the State of Missouri, having full trust powers and meeting the requirements of a
successor Paying Agent (as set forth in the Escrow Agreement) impressed with a first lien to the Paying
Agent for the benefit of the Owners, at or prior to Stated Maturity or redemption date of said Bonds, in
trust for and irrevocably appropriated thereto, moneys and/or non-callable Defeasance Securities (the
"Defeasance Escrow") which, together with the interest to be earned on any such obligations, will be
sufficient for the payment of the principal of said Bonds and interest to accrue to the Stated Maturity or
date of redemption, as the case may be, or if default in such payment shall have occurred on such date,
then to the date of the tender of such payments, provided, however, that if any such Bonds shall be
redeemed prior to Stated Maturity, (i) the City shall have elected to redeem such Bonds, and (ii) either
notice of such redemption shall have been given or the City shall have given irrevocable instructions to
the Paying Agent to redeem such Bonds; and provided further, however, there shall be filed with the City,
the Owner and the Paying Agent an opinion of Bond Counsel to the effect that the conditions for the
defeasance of the Bonds pursuant to this Section have been complied with and, if the payment of the
Bonds at Stated Maturity or upon redemption will occur more than 90 days after the deposit of the
Defeasance Escrow and interest on the Defeasance Escrow is to be used to pay debt service on the Bonds,
the written report of an independent certified public accountant evidencing the sufficiency of the
Defeasance Escrow. Any moneys and obligations which at any time shall be deposited with the Paying
Agent, or other bank by or on behalf of the City, for the purpose of paying and discharging any of the
Bonds shall be and are hereby assigned,transferred and set over to the Paying Agent or other bank in trust
for the respective Owners of the Bonds, and such moneys shall be and are hereby irrevocably
appropriated to the payment and discharge of this Ordinance. All moneys deposited with the Paying
Agent or other bank shall be deemed to be deposited in accordance with and subject to all of the
provisions contained in this Ordinance.
ARTICLE XI
AMENDMENTS
Section 1101. Amendments.
(a) Any provision of the Bonds or of this Ordinance may be amended by an ordinance with
the prior written consent of the Owners. Consent must be evidenced by an instrument executed by the
Owners, acknowledged or proved in the manner of a deed to be recorded, and filed with the City Clerk.
-22-
(b) No amendment will be effective until (i) the City has delivered to the Owners and the
Paying Agent an opinion of Bond Counsel stating that the amendment is permitted by this Ordinance and
the Act, complies with their respective terms and is valid and binding upon the City in accordance with its
terms, and (ii)the City Clerk has on file a copy of the amendment and all required consents.
ARTICLE XII
MISCELLANEOUS PROVISIONS`-
Section 1201. Further Authority. The officers of.the.Cit
, including the Mayor and the City
Clerk, are authorized and directed to execute all documents,"d take the actions as are necessary or
advisable in order to carry out and perform the purposes?;of,�this Ordinance and to make ministerial
changes in the documents approved by this Ordinance Aicli„they;may approve. The execution of any
document or taking of any related action constitutes conclusive_eviaence__of:the necessity or advisability
of the action or change. a -
Section 1202. Electronic Transactions. The`trarisactions described in this Ordinance and the
Bonds may be conducted and related documents may be stored-tiy.electronic means. Copies, telecopies,
facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be
authentic and valid counterparts of such original documents for all purposes, including the filing of any
claim, action or suit in the appropriate court of law.
Section 1203. Severability. If any section or other part of this Ordinance is for any reason held
invalid,the invalidity will not affect the validity of the other provisions of this Ordinance.
Section 1204. Governing Law. This Ordinance is governed by and will be construed in
accordance with the laws of the State.
Section 1205. Effective Date. This Ordinance shall take effect 10 days from and after its final
passage.
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PASSED by the City Council of the City of Cape Girardeau, Missouri, this 4th day of January,
2010.
May
(Seal) EA��t -
ATTEST:
ma
.Ci rk bra.. ,,�4►�
First Reading: December 21, 2009
-24-
i
EXHIBIT A
FORM OF BOND
[THIS BOND IS TRANSFERABLE ONLY TO ANY SUCCESSOR TO THE
MISSOURI DEPARTMENT OF NATURAL RESOURCES OR ITS ASSIGNS]
Registered Registered
No. R- Not to exceed $1,000,000
UNITED STATES OF AMERICA
STATE OF MISSOURI
CITY OF CAPE GIRARDEAU,MISSOURI
WATERWORKS SYSTEM REVENUE BOND
(STATE OF MISSOURI—DIRECT LOAN PROGRAM—ARRA)
SERIES 2010
Closing Date Interest Rate Stated Maturity
REGISTERED OWNER: MISSOURI DEPARTMENT OF NATURAL RESOURCES
PRINCIPAL AMOUNT: NOT TO EXCEED ONE MILLION DOLLARS
The CITY OF CAPE GIRARDEAU, MISSOURI, a home rule city and political subdivision of
the State of Missouri (the `'City"), for value received, hereby promises to pay to the Owner shown above,
or registered assigns, the Cumulative Principal Amount Outstanding set forth on Schedule A to this Bond
on the Maturity Date shown above, and to pay interest thereon at the Interest Rate per annum shown
above, on January 1 and July 1 in each year, commencing July 1, 2010 (each an "Interest Payment Date"),
from the date shown on Schedule A or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, computed on the basis of a 360-day year of twelve 30-day months. Terms
not otherwise defined in this Bond have the respective meanings as set forth in the Ordinance.
The principal of this Bond shall be paid at maturity or upon earlier redemption to the person in
whose name this Bond is registered on the Bond Register at the maturity or redemption date thereof, upon
presentation and surrender of this Bond at the payment office of UMB BANK, N.A. in the City of St.
Louis, Missouri (the "Paying Agent'). The payment of the principal of and redemption premium, if any,
payable on this Bond at maturity or upon earlier redemption and the interest payable on this Bond on any
Interest Payment Date will be made by check or draft mailed by the Paying Agent to the address of the
Owner shown in the Bond Register. The principal of and redemption premium, if any, and interest on the
Bonds is payable by electronic transfer in immediately available federal funds to a bank in the continental
United States of America pursuant to instructions from any Owner received by the Paying Agent prior to
the Record Date. The principal of and interest on this Bond is payable in lawful money of the United
States of America.
A-I
This Bond is one of a duly authorized series of bonds of the City designated Waterworks System
Revenue Bonds (State of Missouri — Direct Loan Program — ARRA) Series 2010" (the "Bonds"), issued
by the City for the purpose of acquiring, constructing, extending and improving the waterworks system
owned and operated by the City (said waterworks system, together with all future improvements and
extensions thereto hereafter constructed or acquired by the City, being herein called the "System"), under
the authority of and in full compliance with Section 91.010 of the Revised Statutes of Missouri, as
amended, and pursuant to an election duly held in the City and an ordinance duly adopted by the
governing body of the City(the"Ordinance").
At the option of the City, the Bonds may be called for redemption and payment prior to maturity
in whole or in part as provided in the Ordinance, with the prior written consent of the Owners.
The Bonds are subject to mandatory redemption and payment prior to maturity pursuant to the
mandatory redemption requirements of the Ordinance, at a redemption price equal to 100% of the
principal amount plus accrued interest to the redemption date.
Except as otherwise provided in the Ordinance, notice of redemption, unless waived, is to be
given by the Paying Agent by mailing an official redemption notice by registered or certified mail at least
15 days, but not more than 30 days, prior to the date fixed for redemption, to the Owner of the Bond or
Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished
in writing by such Owner to the Paying Agent. Notice of redemption having been given or waived as
aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due
and payable at the redemption price therein specified, and from and after such date (unless the City shall
default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear
interest.
The Bonds are limited obligations of the City payable solely from, and secured as to the payment
of principal and interest by a pledge of, the Net Revenues. The taxing power of the City is not pledged to
the payment of the Bonds either as to principal or interest. The Bonds do not constitute a general
obligation of the City or an indebtedness of the City within the meaning of any constitutional, statutory or
charter provision, limitation or restriction. Under the conditions set forth in the Ordinance, the City has
the right to issue additional parity bonds payable from, and secured by, the Net Revenues.
The Bonds are issued on parity with the Outstanding Parity Bonds.
Under the conditions set forth in the Ordinance, the City has the right to issue additional bonds
payable from the Net Revenues; provided, however, that such additional bonds may be so issued only in
accordance with and subject to the covenants, conditions and restrictions relating thereto set forth in the
Ordinance.
The City covenants with the Owner of this Bond to keep and perform all covenants and
agreements contained in the Ordinance, and the City will fix, establish, maintain and collect rates, fees
and charges for the use and services furnished by or through the System to produce Revenues sufficient to
pay the operation and maintenance costs of the System, pay the principal of and interest on the Bonds and
provide reasonable and adequate reserve funds. Reference is made to the Ordinance for a description of
the agreements made by the City with respect to the collection, segregation and application of the
Revenues, the nature and extent of the security for the Bonds, the rights, duties and obligations of the City
with respect to the Bonds, and the rights of the Owners.
The Bonds are issuable in the form of fully registered Bonds without coupons in the
denomination of$100 or any integral multiple of$0.01 in excess thereof.
A-2
i
This Bond may be transferred or exchanged, as provided in the Ordinance, only upon the
registration books kept for that purpose at the above-mentioned office of the Paying Agent, upon
surrender of this Bond together with a written instrument of transfer or exchange satisfactory to the
Paying Agent duly executed by the Owner or the Owner's duly authorized agent, and thereupon a new
Bond or Bonds in any authorized denomination of the same maturity and in the same aggregate principal
amount shall be issued to the transferee in exchange therefor as provided in the Ordinance, and upon
payment of the charges therein prescribed. The City and the Paying Agent may deem and treat the person
in whose name this Bond is registered on the Bond Register as the absolute owner hereof for the purpose
of receiving payment of, or on account of, the principal or redemption price hereof and interest due
hereon and for all other purposes.
This Bond will not be valid or be entitled to any security or benefit under the Ordinance until the
Paying Agent has executed the Certificate of Authentication.
IT IS HEREBY CERTIFIED AND DECLARED that all acts, conditions and things required to
exist, happen and be performed precedent to the issuance of the Bonds have existed, happened and been
performed in due time, form and manner as required by law, and that before the issuance of the Bonds,
provision has been duly made for the collection, segregation and application of the income and revenues
of the System as provided in the Ordinance.
IN WITNESS WHEREOF, the City of Cape Girardeau, Missouri has executed this Bond by
causing it to be signed by the manual signature of its Mayor and attested by the manual signature of its
City Clerk, and its official seal to be affixed hereto or imprinted hereon.
(SEAL) CITY OF CAPE GIRARDEAU, MISSOURI
ATTEST:
By
City Clerk Mayor
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds of the issue described in the within-mentioned Ordinance.
Registration Date:
UMB BANK,N.A., Paying Agent
By
Authorized Signatory
A-3
RECORD OF PRINCIPAL PAYMENTS AND PREPAYMENTS
Under the provisions of the Ordinance, payments of the principal installments of this Bond and
partial prepayments of the principal of this Bond will be made directly to the Owner without surrender of
this Bond to the Paying Agent. Accordingly, any purchaser or other transferee of this Bond should verify
with the Paying Agent the principal of this Bond outstanding prior to such purchase or transfer, and the
records of the Paying Agent shall be conclusive for such purposes.
A-4
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
Print or Type Name of Transferee
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints UMB Bank,
N.A. agent to transfer the within Bond on the books kept by the Paying Agent for the registration thereof,
with full power of substitution in the premises.
Dated:
NOTICE: The name of the Owner must correspond with
the name that appears upon the face of the within Bond
in every particular.
By:
Name:
Title:
A-5
i
SCHEDULE A
CITY OF CAPE GIRARDEAU,MISSOURI
WATERWORKS SYSTEM REVENUE BOND
(STATE OF MISSOURI—DIRECT LOAN PROGRAM—ARRA)
SERIES 2010
CUMULATIVE PRINCIPAL AMOUNT OUTSTANDING
Purchase Price Principal Amount Cumulative Principal Authorized Signatory of
Date(l) Installment Redeemed(2) Amount Outstanding fting Agent
Date constitutes date of registration with respect to such portion of the Bond.
(Z) Commencing with first Principal Payment Date if prior to Completion of Funding.
A-6
EXHIBIT B
MANDATORY SINKING FUND REDEMPTION SCHEDULE
Redemption Date Principal Amount Redemption Date Principal Amount
January 1, 2011 $20,600 July 1, 2020 $25,400
July 1, 2011 20,800 January 1, 2021 25,700
January 1, 2012 21,000 July 1, 2021 26,000
July 1, 2012 21,300 January 1, 2022 26,300
January 1, 2013 21,500 July 1, 2022 26,600
July 1, 2013 21,800 January 1, 2023 26,900
January 1, 2014 22,000 July 1, 2023 27,200
July 1, 2014 22,200 January 1, 2024 27,500
January 1, 2015 22,500 July 1,2024 27,800
July 1, 2015 22,700 January 1, 2025 28,100
January 1, 2016 23,000 July 1, 2025 28,400
July 1, 2016 23,300 January 1, 2026 28,800
January 1, 2017 23,500 July 1, 2026 29,100
July 1, 2017 23,800 January 1, 2027 29,400
January 1, 2018 24,100 July 1, 2027 29,800
July 1, 2018 24,300 January 1, 2028 30,100
January 1, 2019 24,600 July 1, 2028 30,400
July 1, 2019 24,900 January 1, 2029 30,800
January 1, 2020 25,200 July 1, 2029 31,100
January 1, 20301 31,500
t Maturity
B-1
CERTIFICATE
I, the undersigned, City Clerk of the City of Cape Girardeau, Missouri, hereby certify that the
above and foregoing constitutes a full, true and correct copy of Ordinance No. qoq.(P duly adopted by
the City Council of the City at a meeting duly and regularly held, after proper notice thereof, on January
4, 2010; that said Ordinance has not been modified, amended or repealed, and is
in full force and effect as
of the date hereof; and that the same is on file in my office.
WITNESS my hand and official seal this 5�L day of January, 2010.
City Clerk
(Seal)