Transcript of ProceedingsLegal Opinion
Gilmore & Bell, P.C.
Kansas City, Missouri
TRANSCRIPT OF PROCEEDINGS
AUTHORIZING THE ISSUANCE
OF
$4,615,000
CITY OF SALINA, KANSAS
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
DATED JULY 20, 2016
CITY OF SALINA, KANSAS
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
DATED JULY 20, 2016
CLOSING LIST
Copies of the transcript of proceedings, which will be in CD-ROM format unless otherwise noted,
for the above referenced issue (the "Notes"), will be prepared and distributed as follows:
1. City of Salina, Kansas (the "Issuer")
2. Attorney General of the State of Kansas
3. The Bennington State Bank, Salina, Kansas (the "Original Purchaser")
4. George K. Baum & Company, Kansas City, Missouri (the "Financial Advisor")
5. Gilmore & Bell, P.C., Kansas City, Missouri ("Bond Counsel")
Document
Number
PROCEEDINGS AUTHORIZING THE IMPROVEMENTS
1. Proceedings Relating to Charter Ordinance No. 39
2. Ordinance No. 16-10840 authorizing the Project and the issuance of general obligation
bonds therefor
3. Excerpt of Minutes of the governing body meeting of June 20, 2016, evidencing first
reading of Ordinance No. 16-10840
4. Excerpt of Minutes of the governing body meeting of June 20, 2016, evidencing second
reading and passage of Ordinance No. 16-10840
5. Affidavit of Publication of Ordinance No. 16-10840
PROCEEDINGS AUTHORIZING THE SALE
AND ISSUANCE OF THE NOTES
6. Excerpt of Minutes of the governing body meeting evidencing adoption of Resolution No.
16-7377
7. Resolution No. 16-7377 authorizing the offering for sale of the Notes
8. Note Purchase Agreement
9. Excerpt of Minutes of the governing body meeting evidencing adoption of Resolution No.
16-7382
10. Resolution No. 16-7382 authorizing the issuance of the Notes and prescribing the form and
details of the Notes
CLOSING DOCUMENTS
11. Transcript Certificate
Exhibit A -Schedule of Outstanding General Obligation Indebtedness
12. Specimen Note
13. Agreement between Issuer and Agent
14. Underwriting Safekeeping Agreement
15. Closing Certificate
16. Federal Tax Certificate with attachments as follows:
Exhibit A -Internal Revenue Service Form 8038-G and evidence of filing
Exhibit B -Receipt for Purchase Price
Exhibit C -Receipt and Representation
Exhibit D -Description of Property Comprising the Financed Improvements and List of
Reimbursement Expenditures
Exhibit E -Sample Annual Compliance Checklist
Exhibit F -Form of Final Allocation
Schedule 1 -Debt Service Schedule & Proof of Yield
LEGAL OPINIONS
17. Approving legal opinion of Gilmore & Bell, P.C.
18. Approval letter of Attorney General
MISCELLANEOUS DOCUMENTS
19. Closing Letter
20. Letter from State Treasurer Confirming Registration Number
21. Representation Letter -The Bennington State Bank
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CITY OF SALINA, KANSAS'.
REGULAR MEETING OF THE BOARD OF COMMISSIONERS
February 1, 2016
4:00p.m.
The City Commission convened at 3:45 p.m. for Citizens Forum.
The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107,
City-County Building. Roll call was taken followed by the Pledge of Allegiance and a moment of
silence.
Those present and comprising a quorum: Mayor Jon R. Blanchard (presiding), Commissioners
Kaye Crawford, Trent Davis, Randall Hardy, and Karl Ryan.
Also present: Jason Gage, City Manager; Michael Schrage, Deputy City. Manager; Greg Bengtson,
City Attorney; and Shandi Wicks, City Oerk.
AWARDS AND PROCLAMATIONS
(3.1) The month of'February, 2016 as "Black History Month" in the city of Salina.
Gregory Gibson read the proclamation.
CITIZEN FORUM
None.
PUBLIC HEARINGS AND ITEMS SCHEDULED FOR A CERTAIN TIME
None.
CONSENT AGENDA
(6.1) Approve the minutes of January 25, 2016.
(6.2) -Approve Resolution No. 16-7316 amending Section 5.c. of Resolution No. 12-6875
regarding terms of appointment for youth liaisons.
(6.3) Authorize the City Manager to approve the purchase of a used vehicle for the fire
department in the amount of $20,789.
16-0033 Moved by Commissioner Hardy, seconded by Commissioner Ryan, to approve the consent agenda
as presented. Aye: (5). Nay: (0). Motion carried.
ADMINISTRATION
(7.1) Consider the authorization of donated funds for 2 acres of unused land at East·
Crawford Recreation Area for the construction of a public dog park.
Vanessa Cowie, Animal Services Manager, explained the process, public outreach
campaign, results, Parks & Recreation Advisory Board input, construction estimates and
recommended action.
Commissioner Davis asked if there were any plans to put a public restroom in the park. Ms.
Cowie stated the initial construction did not include the construction of a public restroom.
Commissioner Davis asked if there would be running water accessible for the park. Ms.
Cowie stated there would be running water available and the water bowls would be heated
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Commissioner Crawford asked if there were complaints received for the Indian Rock Park
location. Ms. Cowie stated written complaints were received for both Indian Rock Park and
Lakewood Park.
A conversation ensued between Mayor Blanchard and Ms. Cowie regarding the park
location.
Mayor Blanchard asked how the park would be funded on a yearly basis and how the use
of the park would be measured. Ms. Cowie stated the cost for running the park would
come out of the Animal Shelter operating budget and staff could install a data tracker to
help determine the usage of the park.
Mayor Blanchard asked how long the fencing around the park would last. Ms. Cowie
stated a poly coated chain link fence would be installed and the fence would last longer
than a regular chain link fence.
Jason Gage, City Manager, asked if the donated funds could be used to replace the fence in
the future. Ms. Cowie stated the funds were unrestricted and could be used for anything.
Abner Perney, 101 Overhill Road, stated he would like to propose three alternative
locations at East Crawford Recreation Area and he did not like that the location would
impinge on the car activities that have been located there for over forty (40) years.
Mayor Blanchard stated the car show was brought up during the study session and it could
be worked around.
Norman Manne!, 7532 W. Pleasant Hill Road, stated he was concerned about the cleanup of
the park and the health of the animals going to the location.
Ms. Cowie stated the car events were considered when the location was 'chosen, the park
would be closed for maintenance a couple times a year for sanitizing, fertilizing and
cleaning.
Mr. Gage asked if the location of the park could be adjusted if need be to accommodate the
car shows. Ms. Cowie stated the location could be adjusted to work with the car shows.
16-0034 Moved by Commissioner Davis, seconded by Commissioner Crawford, to authorize the use of up
to $80,000 in donated funds and 2 acres of unused land at East Crawford Recr~ation Area for the
construction of a public dog park. Aye: (5). Nay: (0). Motion carried.
(7.2) Select a real estate firm to assist city staff in selling the vacant building parcel
located at 2626 Quail Hollow Drive.
Gary Hobbie, Director of Development Services, explained the history of the property and
selection criteria.
Commissioner Davis asked if there was a list of criteria to select the firms. Mr. Hobbie
stated the list provided included all real estate brokerage firms located in Sa°Iina.
Mayor Blanchard asked if there was a specific firm that sold vacant lots more than a home.
Mr. Hobbie stated he was not aware of a specific firm.
Commissioner Crawford asked if they could choose a first choice and an alternate choice.
Mayor Blanchard picked Advantage (aka:ReMax Advantage) for the first choice.
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Commissioner Crawford picked an alternative to be All American Realty.
Moved by Commissioner Crawford, seconded by Commissioner Davis, to select Advantage
(aka:ReMax Advantage) as the first choice and All American Realty as the second choice as the real
estate brokerage firm to handle the sale of a vacant parcel of land located at 2626 Quail Hollow
Drive. Aye: (5). Nay: (0). Motion carried.
(7.3) First reading Charter Ordinance No. 39 a charter ordinance exempting the City of
Salina, Kansas from the provisions of KS.A. 13-1024a and providing substitute and
additional provisions on the same subject relating to general improvements and the
issuance of bonds for the purpose of paying for said improvements; and repealing
Charter Ordinance Number 38.
Jason Gage, City Manager, explained the changes, field house design work and cost
estimation.
Commissioner Hardy asked if the final design option of the field house would affect the
decision today. Mr. Gage stated the decision today would not affect the final design.
Commissioner Hardy asked if the timeframe would allow for the alternate design option to
be considered. Mr. Gage stated staff had the question in to the designer and are currently
waiting on the answer
Commissioner Davis stated he would like to get the number right this time so the number
would not have to be increased in the future. Mr. Gage stated he felt the number was high
but he wanted to put a larger number to keep from coming back in the future.
Commissioner Davis asked what the probability was for the STAR Bonds to be used for the
project. Mr. Gage stated the basic primary needs would be able to be funded by STAR
Bonds.
Commissioner Hardy stated he was hoping the private-public partnership could continue
to be a 50/50 partnership. Mr. Gage stated the commission had been very clear the funding
would be a 50/50 partnership.
Mayor Blanchard stated he was very supportive of the field house.
Guy Walker, Salina 2020, Inc., thanked the Commission for considering the item and staff
for all of their work on the project so far.
Dave Miller, 133 East Lake Drive, stated some of the cost estimates bothered him. Mr. Gage
stated the project was brought by the private sector and the preliminary work that was
done brought the estimate of $9 million dollars but did state the demand for construction
work was driving up the costs.
Commissioner Davis asked when the design would be finalized. Mr. Gage stated the
guaranteed maximum price would be ready in late March to early April.
Commissioner Davis asked if there was a requirement for the final design to come before
the board. Mr. Gage stated the design would come before the commission for approval.
Judy Larson, 2801 Ray A venue, encouraged the city to communicate to the community and
stated there were a lot of people that were skeptical of the project.
Brian Richardson, 519 S. Santa Fe, stated he had the 3 bids received in 2013 for the
construction of the field house and stated there were increases in the construction industry
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all over the country. Mayor Blanchard asked if there was any feeling there would be a need
for additional money. Mr. Richardson stated if you look at design today and design 3 years
ago things have changed.
Commissioner Davis asked who was going to decide on the exterior fa~ade and when. Mr.
Gage stated the input of the private partner and the commission would both be in on the
decision and estimated the plan to come before the Commission in a couple of weeks.
Don Boos, 2532 Angus Lane, stated there had been an increase of tourism and there was a
~eed for the field house to begin construction on time in order for the other downtown
businesses to develop.
Commissioner Crawford stated she was in favor of the field house but did not think we
needed the Taj Mahal.
Mayor Blanchard thanked everyone for the work and provided his thoughts on the project.
Commissioner Hardy asked if there was an end to the ordinance. Mr. Gage stated a surety
of the project estimates and alternates would happen and he did not think the project
would be that high.
16-0036 Moved by Commissioner Ryan, seconded by Commissioner Crawford, to pass Charter Ordinance
No. 39 on first reading. Aye: (4). Nay: (1) Blanchard. Motion carried.
DEVELOPMENT BUSINESS
(8.1) First reading Ordinance No. 16-10819 amending Section 2-207 through 2-212 of the
Salina Business Improvement District Design Review Board ordinance.
Dean Andrew, Director of Planning, explained the guidelines, proposed ordinance
amendments, board recommendation and action alternatives.
Commissioner Davis asked if the Lee District Board of Advisors had authority to change
the Design Review Board recommended amendments. Mr. Andrew stateq the Lee District
Board of Advisors would provide input on how the board was working or an opinion on
the changes.
Commissioner Hardy asked how many certificates of compatibility were approved last
year. Mr. Andrew stated there were 12 certificates approved.
Commissioner Hardy asked how long it took to approve a certificate of compatibility and if
staff felt a fee should be charged for the service. Mr. Andrew stated it took the same
amount of time to approve a certificate of compatibility as it did for a conditional use
permit. He stated a fee was charged for a conditional use permit and felt the fee should be
modest, to help off-set the service provided.
Mayor Blanchard asked if the amendments would help allow more items to be approved
administratively instead of requiring them to go to the board. Mr. Andrew stated the
amendments would allow a larger amount of applications to be handled administratively.
Mayor Blanchard asked if now was a good time to make the changes and asked if there.
were several applications filed. Mr. Andrew stated there was currently 1 application on file.
16-0037 Moved by Commissioner Davis, seconded by Commissioner Hardy, to pass Ordinance No. 16-
10819 amending Section 2-207 of the Salina Business Improvement District Design Review Board
ordinance, repealing the existing Section 2-207 on first reading. Aye: (5). Nay: (0). Motion carried.
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16-0038 Moved by Commissioner Davis, seconded by Commissioner Hardy, to declare a compelling public
purpose exists for second reading approval of Ordinance No. 16-10819 on the same day as the first
reading.
Moved by Commissioner Davis, seconded by Commissioner Hardy, to adopt Ordinance No. 16-
10819 amending Section 2-207 of the Salina Business Improvement District Design Review Board
ordinance, repealing the existing Section 2-207 on second reading. A roll call vote was taken. Aye:
(5) Crawford, Davis, Hardy, Ryan, Blanchard. Nay: (0). Motion carried.
OTHER BUSINESS
(9.1) Request for executive session (legal/personnel).
16-0040 Moved by Commissioner Ryan, seconded by Commissioner Hardy, to recess into executive session
for 65 minutes to discuss with legal counsel matters subject to the attorney-client privilege for the
reason that public discussion of those matters would waive the privilege and adversely affect the
City's interest in the matters and for the purpose of discussing matters pertaining to non-elected
City personnel for the reason that public discussion of the matter would violate the privacy rights
of the non-elected personnel involved; and reconvene at 7:00 p.m.
16-0041
16-0042
The City Commission recessed into executive session at 5:55 p.m. and reconvened at 7:00
p.m. No action was taken.
Moved by Commissioner Hardy, seconded by Commissioner Crawford, to extend the current
executive session for an additional 30 minutes. Aye: (5). Nay: (0). Motion carried.
The City Commission recessed into executive session at 7:00 p.m. and reconvened at 7:30
p.m. No action was taken.
Moved by Commissioner Davis, seconded by Commissioner Hardy, to extend the current
executive session for an additional 30 minutes. Aye: (5). Nay: (0). Motion carried.
The City Commission recessed into executive session at 7:30 p.m. and reconvened at 8:00
p.m. No action was taken.
16-0043 Moved by Commissioner Davis, seconded by Commissioner Ryan, to extend the current executive
session for an additional 1 hour and 20 minutes. Aye: (5). Nay: (0). Motion carried.
The City Commission recessed into executive session at 8:00 p.m. and reconvened at 9:20
p.m. No action was taken.
ADJOURNMENT
16-0044 Moved by Commissioner Davis, seconded by Commissioner Ryan, that the regular meeting of the
Board of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting
adjourned at 9:20 p.m.
[SEAL]
ATTEST:
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I Shandi Wicks, CMC, City Clerk
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CITY OF SALINA, KANSAS
SPECIAL MEETING OF THE BOARD OF COMMISSIONERS
February 16, 2016
8:30a.m.
~ The Special Meeting of the Board of Commissioners was called to order at 8:30 a.m. in Room 107,
~ City-County Building. Roll call was taken followed by th~ Pledge of Allegiance and a moment of
~ silence. ~ ~ Those present and coinprising a quorum: Mayor Jon R. Blanchard (presiding), Commissioners,
8 Kaye J. Crawford, Trent Davis, Randall R. Hardy and Karl Ryan.
Also present: Jason A. Gage, City Manager; Michael D. Schrage, Deputy City Manager; Greg
Bengtson, City Attorney; and Shandi Wicks, City Clerk.
ADMINISTRATION
(3.1) Second reading Charter Ordinance No. 39 a charter ordinance exempting the City of Salina,
Kansas from the provisions of K.S.A. 13-1024a and providing substitute and additional
provisions on the same subject relating to general improvements and the issuance of bonds
for the purpose of paying for said improvements; and repealing Charter Ordinance
Number38.
Jason Gage, City Manager, stated John Frew, FREW Development, would introduce a
project theme and a presentation for the field house project.
John Frew, FREW Development, stated the company was the owner's representative for the
City of Salina and continued to provide information on the various projects Frew
Development has built in various cities across the United States. Mr. Frew provided a brief
overview of the project scope.
Kerry Newman, SFS Architecture, provided a presentation on the options of the layout for
the project.
John Frew, FREW Development and Chris Stanton, McCown Gordon Constrw:tion,
explained the budget for the layout options.
Mayor Blanchard asked if the time to convert the court surface for the two (2) options were
comparable. Mr. Gage stated the conversion time would vary depending on the layout and
·court types.
Mayor Blanchard requested a 5 minute break at 9:20 a.m. The meeting reconvened at 9:25
a.m.
Mayor Blanchard asked for the commissioners' thoughts on the design direction and
project funding. A conversation ensued between the Coinmission and Mr. Gage regarding
the layout and the budget.
Commissioner Hardy asked who was involved in the initial design. Mr. Gage stated Parks
and Recreation staff, SFS Architecture, FREW Development and McCown Gordon
Construction.
Mayor Blanchard asked if the commissioners were all in favor of the 3 x 3 B option.
Comrnissionei: Davis asked if the two (2) plastic courts would have turf on them unless
they are needed for basketball. Mr. Gage stated there would be four (4) hardwood courts
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and two (2) synthetic courts with the ability to install the turf over the top of the synthetic
courts.
Commissioner Davis asked if there was a separation between the courts and asked how
much time it would take to convert the court to turf. Mr. Gage stated there would be a
curtain separating each of the courts and utilizing 4 to 5 people the court could be
converted in a couple hours.
Mayor Blanchard asked who the members of the private group were. Mr. Gage stated Brian
Richardson was a good part of the group and there were 70 to 80 private stakeholders.
Mayor Blanchard stated if there was a gap, it would be helpful to determine the private
group in order to have an agreement in the future.
Commissioner Ryan asked how much longer it would take to develop the budget. Mr.
Newman stated it would take an additional 4 weeks.
Commissioner Davis asked if the purchase of the property and the fire lane were included
in the 12.5 million dollar project. Mr. Newman stated the property acquisition and the fire
lane were included in the project total.
Mayor Blanchard asked if the outside of the building would look similar to the Assurance
Partners building. Mr. Newman stated the outside of the building had been approved by
the Design Review Board and had stone on the lower portion of the building with a metal
design on the upper portion of the building.
Commissioner Hardy asked about the lighting for the building. Mr. Newman stated there
would be natural lighting with panels to reduce the glare of the natural light.
Commissioner Davis asked if there was a solid wall between the lobby and the courts. Mr.
Newman stated the wall was a combination of both wall and glass.
Commissioner Crawford asked why there was a need for 3 courts on the north and why
there was a need for the turf. Mr. Gage stated the idea for the turf was a practice space for
soccer, baseball and softball.
Mayor Blanchard asked about the mezzanine and the enhanced option. Mr. Gage stated he
felt the mezzanine should be eliminated and stated there would need to be a closer look at
the storage of the materials.
Commissioner Crawford stated she was in favor of the larger lobby. Mr. Gage stated there
was not a perfect formula to determine the number of people that would be inside the
lobby at any given time but felt the expanded lobby would be a benefit.
Mayor Blanchard stated the next step was the cost reduction and value engineering. Mr.
Gage stated there were a lot of small things that need to be evaluated.
Mayor Blanchard stated the project was currently at 12.5 million. Mr. Gage stated yes with
contingencies and there could be a consideration of a competitive bid process.
Mayor Blanchard asked if the contract with McCown Gordon Construction would
determine the guaranteed maximum price. Mr. Gage stated yes but if the commission
would like to consider the competitive bid process, the decision would need to be made
today.
Mayor Blanchard asked if there was a recommendation from staff and the construction
manager at risk to go with the competitive bid process versus the guaranteed maximum
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price and if the specifications would be the same for either process. Mr. Gage stated the
specifications would be the same for both processes. Todd Knight, McCown Gordon
Construction, stated McCown Gordon Construction was part of an interview process for
the competitive process of the construction manager at risk process. Mr. Knight stated the
project would be competitively bid and there would be the ability to reduce the cost by the
50 cost reduction options. Mr. Knight stated McCown Gordon Construction had obtained
budget numbers from approximately 20 sub-contractors to help determine the budget for
the layout options. Mr. Knight provided information on the differences on the bidding
processes.
Commissioner Davis asked if the construction manager at risk would acquire any of the
cost savings. Mr. Knight stated the savings would go to the City.
Commissioner Hardy asked if McCown Gordon Construction worked directly with FREW
Development on the bid process. Mr. Knight stated FREW Development would be at the
bid opening of all of the sub-contractors for the project. Mr. Frew stated FREW
Development would not have a role in determining the sub-contractors.
Commissioner Davis asked if there was a preference in local contractors. Mr. Knight stated
the decision for hiring local contractors would be up to city staff and the Commission. He
continued to state the sub-contractors would be determined by the cost they submitted and
the types of work they have done in the past. Mr. Gage stated to determine the most
competitive process, the use of the competitive bid process would be best.
Mayor Blanchard asked if a formal motion would need to be made on the use of the
competitive bid process. Mr. Gage stated a consensus on the use of the competitive bid
process would be needed today and staff would bring back a formal request at the next
meeting. The Commission determined in a consensus to use the competitive bid process.
Mr. Gage stated staff would bring back a formal request at the next meeting.
Mr. Gage stated the charter ordinance does not in any way determine the budget of the
project; staff was trying to avoid encumbering the general fund by allowing the charter
ordinance to cover the gap. Mr. Gage also stated information on the availability for the
New Market Tax Credits and the ST AR Bond District would probably be available at the
time of the approval of the project.
Commissioner Davis asked if the gap would need to be funded by the private donors and
the City of Salina, what type of agreement would need to be developed for the private
donors. Mr. Gage stated there would not be a formal agreement for the private donors, and
he did not think it was unreasonable to request the private donors to provide additional
funding.
Commissioner Ryan stated he did not think the private donors would need to be asked to
provide additional funding.
Commissioner Ryan asked where the charter ordinance amount would need to be if the
project was at the budget amount today. Mr. Gage stated $8 million.
Mayor Blanchard called for a 5 minute recess at 10:24 a.m. The meeting reconvened at 10:30
a.m.
Jim Vint, 1115 Andrew Avenue, provided his thoughts on the field house and urged the
Commission to vote no on the second reading of the ordinance.
Norman Mannel, 7532 W. Pleasant Hill Road, stated the private funding money needed to
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be acquired first. Mr. Gage stated there was commitment for the private funding.
Pat Beatty, 14 Crestview, provided his thoughts on the competitive bid process, New.
Market Tax Credits and urged the Commission to move to the next step.
Ray Hruska, 235 N. Santa Fe, stated there was concern about the donor list. He asked Brian
Richardson to provide the donor list and stated the list should be subject to open public
records. Mr. Hruska provided his thoughts on the project and the funding.
Mayor Blanchard asked if the donor list was available. Mr. Gage stated he did not know if a
· Jist was available but reiterated that he stated there were 70 or so stakeholders.
Judy Larson, 2801 Ray Avenue, stated she was asked to ask how many cars could be
parked at the location. Mr. Gage stated depending on the option chosen, there could be
anywhere from 20 to approximately 70 spaces and Assurance Partners has offered their
parking lot through an agreement for use for the facility along with additional parking in
approximately a block radius.
Mayor Blanchard asked how many parking spaces would be needed. Michael Schrage,
Deputy City Manager, stated there was not a requirement for parking in the C-4 District.
Mr. Gage stated staff felt there was an ability to distribute the cars in a close proximity of
the field house.
Brian Richardson, 519 S. Santa Fe, thanked the developing team for their time yesterd~y
and felt the stakeholders were in favor of the option chosen today.
Mayor Blanchard asked Mr. Richardson if there was a willingness of the stakeholders to
provide additional funding. Mr. Richardson stated once the gap was determined, he could
take the request to the stakeholders.
Commissioner Davis asked if the commission would like to change to a lower amount,
could it be approved on second reading today. Greg Bengtson, City Attorney, stated if the
amount was equal or a lesser amount, it could be approved on second reading today.
Commissioner Ryan stated he would be in favor of approving the ordinance on second
reading at $7.5 million.
Mr. Bengtson stated the main motion of the second reading should include the section and
number for the amount.
A conversation ensued between Mayor Blanchard and Mr. Gage regarding the funding of
the project and the gap. ·
Mayor Blanchard asked for a status on the STAR Bond District. Mr. Gage stated the STAR
Bond District for Salina would be allowed as long as the budget bill was passed by both
chambers and the governor signed the bill. He continued to explain the current issues
regarding the ST AR Bond Districts and the Kansas Legislature.
Monte Shadwick, Saline County Commission Chair, announced the County Commission
would have their formal meeting at 11:00 a.m. in the City-County Building, Room 209.
Commissioner Davis asked for a status on the New Market Tax Credits. Mr. Schrage stated
staff, upon request, provided additional information and would know more in a couple
weeks.
Mayor Blanchard asked how much money could come out of the New Market Tax Credits.
Mr. Schrage stated the top end would be in the $2 million dollar range and if the budget
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would remain at $12 million, there would still be a $1 million dollar gap.
Commissioner Davis asked if there was a way to prioritize the primary use of the ST AR
Bond District for the field house. Mr. Gage stated there was flexibility and it would fall to
the Commission for administration of the plan.
Mayor Blanchard asked if the utility relocation could be recouped through the STAR Bond
District. Mr. Gage stated it would be an eligible cost but would be part of the final priorities
of the plan.
Mayor Blanchard provided his thoughts on the project and stated there was a need for clear
leadership for a private partnership to help fund the gap.
Mayor Blanchard asked for a status on the downtown development. Mr. Gage stated there
would be development agreements attached to the various downtown developments.
Trace Walker, 1608 Reece Road, Brookville, Kansas, stated with the action by the Kansas
Legislature, it was important to submit the plan to the Kansas Department of Commerce for
the STAR Bond District and the legal fees up to today were paid by Salina 2020, Inc. Mr.
Walker stated the field house was a big piece of the STAR Bond District and we would not
know an answer if it was accepted until the plan was submitted.
Mayor Blanchard asked when the application would be submitted for the STAR Bond
District. Mr. Gage stated the application was ready to be submitted and an answer would
hopefully be received soon.
Moved by Corrunissioner Ryan, seconded by Commissioner Davis, to approve second reading
Charter Ordinance No. 39 a charter ordinance exempting the City of Salina, Kansas from the
provisions of KS.A. 13-1024a and providing substitute and additional provisions on the same
subject relating to general improvements and the issuance of bonds for the purpose of paying for
said improvements; and repealing Charter Ordinance Number 38, and amending Section 2 (4) a
maximum of $7,500,000 under project category H.
Commissioner Hardy stated he was not comfortable with the $7.5 million but would consider $7
million and would like to amend the motion.
16-0056 Moved by Corrunissioner Hardy, seconded by Commissioner Davis, to amend the motion to reflect
a reduction of the amount of $9,500,000 to $7,000,000. Aye: (5). Nay: (0). Motion carried.
Mayor Blanchard restated the motion to approve second reading Charter Ordinance No. 39 a
charter ordinance exempting the City of Salina, Kansas from the provisions of KS.A. 13-1024a and
providing substitute and additional provisions on the same subject relating to general
improvements and the issuance of bonds for the purpose of paying for said improvements; and
repealing Charter Ordinance Number 38, and amending Section 2. (4) a maximum of $7,000,000
under project category H.
Commissioner Davis stated he was hoping the discussi_on would allow the local sub-contractors to
bid on the project and stated the gap would be funded by the City of Salina.
Mayor Blanchard stated this project was one step of a very publicized and very ambitious plan. He
stated he was a strong proponent of downtown and felt the only way downtown was successful
was housing in the core and health in the core. He went on to say there was a need to get the
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wages up in the community and the creation of the economic development organization was a
benefit to the community.
Commissioner Crawford stated she hoped the citizens would get on board with the project once
the building started going up.
Aye: (5) Crawford, Davis, Hardy, Ryan, Blanchard. Nay: (0). Motion carried.
Mayor Blanchard noted there was a petition period av~able for a charter ordinance. Greg
Bengtson, City Attorney, stated the petition process was a process to conduct an election through
the County Election Office upon review by the County Counselor.
Mayor Blanchard asked if a packet of information could be put together on the petition process.
Mr. Gage stated the County Election Office would be the appropriate office to provide information.
Mr. Bengtson stated the sixty days would start after the second publication of the ordinance.
16-0057 Moved by Commissioner Hardy, seconded by Co:rnmissioner Davis, to direct staff to work with the
design team to move towards the 3 x 3 B option for the Salina Field House. Aye: (5). Nay: (0).
Motion carried.
16-0058
16-0059
Moved by Commissioner Crawford, seconded by Commissioner Davis, to direct staff to work to
with the project team to value engineer for the project budget cost and focus on options such as
New Market Tax Credits and STAR Bond Districts or any other options. Aye: (5). Nay: (0).
Motion carried.
Mr. Gage stated if the Commission would like to go through the complete independent sealed bid
approach, the Commission could make a motion to direct staff to bring back the approach at a later
meeting.
A conversation ensued between the Commission, Mr. Gage· and Mr. Frew regarding the bid
processes.
Mr. Knight stated there were benefits to both processes and stated McCown Gordon Construction
provided a discount of $75,000 for the overlap of the Bicentennial Center project and the Salina
Field House project.
Bob Miller, 500 Country Club Road, stated in our market area, there were only a third of the sub-
contractors that would bid the CMAR process but more contractors would bid the design, bid,
build process. Commissioner Davis asked why the local sub-contractors would not bid the CMAR
process. Mr. Miller stated it was a new process that not a lot of contractors were familiar with.
Mayor Blanchard thanked everyone who worked on the Bicentennial Center project and the Fire
Station No. 1 project and would like to stay with the process that was currently under way.
Moved by Commissioner Hardy, seconded by Commissioner Ryan, to direct staff to make
provisions to provide for a design, bid, build process approach for the Salina Field House at a
future meeting. Aye: (5). Nay: (0). Motion carried.
ADJOURNMENT
Page 6
16-0060
I
z Q. w .. c =a <J)
~ ~ 8
oved by Commissioner Davis, seconded by Cbmmissioner Hardy, that the regular meeting of the
oard of City Commissioners be adjourned. Aye: (5). Nay: (0). Motion carried. The meeting
adjourned at 12:09 p.m.
[SEAL]
ATTEST:
~lQW
Shandi Wicks, CMC, City Clerk
Page 7
(Published in the Salina Journal February 19 and February 26, 2016)
Effective April 27, 2016
CHARTER ORDINANCE NUMBER 39
A CHARTER ORDINANCE EXEMPTING THE CITY OF SALINA, KANSAS
FROM THE PROVISIONS OF K.S.A. 13-1024a AND PROVIDING SUBSTITUTE ANU
ADDITIONAL PROVISIONS ON THE SAME SUBJECT RELATING TO GENERAL
IMPROVEMENTS AND THE ISSUANCE OF BONDS FOR THE PURPOSE OF PAYING
FOR THE IMPROVEMENTS; Ai'\TJ> REPEALING CHARTER ORDINANCE NUMBER 38.
BE IT ORDAINED by the Governing Body of the City of Salina, Kansas:
Section 1. Election to Exempt. The City of Salina, Kansas (the "City") by virtue of the
powers vested in it by Article 12, Section 5, of the Constitution of the State of Kansas, hereby elects
to exempt itself from and hereby make inapplicable to it Section 13-1024a, Kansas Statutes
Annotated, that applies to the City, but is part of an enactment which does not apply uniformly to all
cities, and thereby provides substitute and additional provisions on the same subject as hereinafter
provided.
Section 2. Substitute and Additional Provisions. The City of Salina, Kansas hereby adopts
the following substitute and additional provisions of Section 13-1024a, Kansas Statutes Annotated:
As a complete alternative to all other methods provided by law, the city may borrow money
and issue its bonds for the purpose of paying the project cost (which may include acquisition
of interests in real estate and architectural, engineering, and other professional services) for
the following categories of projects:
Project
Categorv Description
A. Streets. Construction, reconstruction, improvement or repair of
any street or roadway located within or partially within the city limits and not
designated as a main trafficway pursuant to K.S.A. 12-685 et seq.
B. Bridges and Viaducts. Construction, reconstruction, improvement or repair
of any bridge or viaduct located within or partially within the city limits and
not located on a street designated as a main trafficway pursuant to K.S.A. 12-
685 et seq.
C. Public Parks. Acquisition of land for public park purposes and acquisition,
construction, reconstruction, improvement and repair of park and recreation
facilities other than those more specifically addressed under categories G and
H below, whether located inside or outside the city limits.
D. Public Buildings. Acquisition, construction, reconstruction, improvement or
repair of public buildings or acquisition of land for the construction,
reconstruction, improvement or repair of public buildings, whether located
inside or outside the city limits.
I
I
"' L')
E.
F.
G.
Storm Water Drainage Svstems. Improvement, extension, or repair of the
city-owned water works and/or sanitary sewer systems, and appurtenances
thereto, whether located inside or outside the city limits.
Water Works and/or Sanitarv Sewer Svstems. Improvement, extension, or
repair of the city-owned water works and/or sanitary sewer systems, and
appurtenances thereto, whether located inside or outside the city limits.
Family Aquatic Park. Financing, constructing, equipping, supplying and
maintaining a family aquatic park.
H. Public Building for Recreational Purposes. Acquisition or construction of a
public building for recreational purposes and acquisition of land for the
construction of a public building for recreational purposes.
ssuance of bonds by the city pursuant to this charter ordinance shal1 require authorization by a
ajority of the votes cast at an election held for that purpose, except, however, that in any calendar
ear the city may issue bonds pursuant to this charter ordinance without an election, as follows:
(1) a maximum of $1,000,000 under each of project categories A through E;
(2) a maximum of $2,000,000 under project category F;
(3) a maximum of $12,500,000 under project category G; and
(4) a maximum of$7,000,000 under project category H.
Section 3.
epealed.
Repealer. That Charter Ordinance 38 of the City of Salina, Kansas, is hereby
Section 4. Publication of Ordinance. This Charter Ordinance shall be published once
each week for two consecutive weeks in the official City newspaper.
Section 5. Effective Date. This Charter Ordinance shall take effect sixty-one ( 61) days
after final publication unless a sufficient petition for a referendum is filed requiring a referendum to
be held on this ordinance as provided in Article 12, Section 5, Subdivision (c)(3) of the Constitution
of the State of Kansas, in which case the ordinance shall become effective if approved by a majority
of the electors voting thereon.
Passed by the governing body, not less than two-thirds of the members elect voting in favor thereof.
[SEAL]
ATIEST:
!nlwJ;_,~ Sh~~ -W~ks, CMC, City Clerk
Introduced: February 1, 2016
Passed: February 16, 2016
P ote of 5 yes; 0 no; 0 abstain
Publisher's Affidavit
I, Christy Fink , being duly sworn ;_ ____ ...::.----~--
declare that I am a Legal Coordinator
of THE SALINA JOURNAL, a daily newspaper
published at Salina, Saline County, Kansas, and of
general circulation in said county, which newspaper
has been admitted to the mails as second class matter in
said county, and continuously and uninterruptedly
published for five consecutive years prior to first
publication of attached notice, and that the attached
Ordinance 39 notice
has been correctly published in the entire issues of said
newspaper _____ tw:..;.;.;::.o ______ times,
towit-once each week fo.._r ____ --1h..1.VL0,,._ _____ _,.._
consecutive weeks, the first publication being given in
the issue of February 19, 2016
C.h·ltSl:L~ ~.
Subscribed and sworn to before me, this ...... /_.S:_,,,__~ __ _
A.D.20 -1..k
lb11.Jublic
Printer's Fee 5924.00
~, '\ MELISSA WINDHOLZ ~ 3-~1(o
nm Of Ulllll My Appl. Eicp.
·";· • # ~, -?
. -c.!~PBiks-At~•cn:arter ~tWI (FllSt Published In the .. w-ltlon of land for be published once each
saJ!ne Journal • public palk purposes week for tw0 consecu-
February ·19, 2016) ;' and acquisition, con-tive weeks In the official
CHARTER structlon, recon· City newspaper. .
ORDINANCE · structlon, impr~ve· • Section 5. ~!-
NUMBER 39 ' ment and repau of ~· This Charter ord A CHARTER ORDI· 1 park· and recreation nance shaU take effect
NANCE EXEMPTING . facilities oth!lr th!!~ sixty-<>ne (61) days after
lHE CITY OF SAUNA; I those more speaf1· final publication unless a
KANSAS FROM THE . cally addressed un-sufficient petition for a
PROVISIONS • OF I der catBQOrles '•G referendum is med re-
K.S.A. 13-1024• ANO , and H · belovii quiring a referendum to
PROVIDING SUBSTI· · whether.located In: be held .on this ordi
TUTE. AND 'ADDI· side or outside .tha nence es provided in Ar· TIONAL PROVISIONS cltv limits. : ticle ·12, .Section 5, Sutr
ON THE SAME SUB•' 0. public Bu!!d!ngs. At;-. division (c)(3) of tne
JECT RELATING TO qulsition, construe-Constitution ol the State
GENERAL IMPROVE-tlon, reconstruction, of~. In which case
MENTS AND THE IS.· =rovement or re-the ord"inance shall be-
SUANCE OF BONDS of public build· come ettectlVe ii ap· FOR THE. PURPOSE or acquisition of proved by e majority of
OF PAYING FOR lHE land 'for tile con-the electors voting
IMPROVEMENTS; AND structlon, recpn" thereori. REPEALING CHAR· structlon, Improve·
TER ·ORDINANCE ment or repair of Passedbythegovemlng
NUMBER 38. ·-•. :· public bulldinQS, body; not less than
BE rT ORDAINED by Whether located IO·; two-thlrds of the mem·
the Govemln~ Bo%::1,.' side or OU1Slde tha bars elect voting In favor =::City of Sa na, • E. ~t~:'';ater '0~n-ttiereof.
.. -~1 1 c~ • .-· ..... '-_,: "' """"' on · . ............., ;;agefSystems. ~ h!l'1 Introduced: to uemDt. The City of provement, exten~ February 1, 2016 .Saline, .Kans!l_S1 (the slon, or repair of the-P.assed:
"Cify") by virtue ot the clty-owned.-water; ~ February 16, 2016 powers vested Jn It by i--wot11s-enl1fos-_. • .passed tiya · Article 12. Section 5. of ...,.,... • --:;;.,ft"ol·5· ...... ·
the ConstltuUon Of .... i,-!ll!Y·sewer v1w-11'1S,.! """" • .!=\. u... aria' apPllrtenances. \ o no: o """" ..... ' State of Kansas, hereby thereto, whe-.her 10:.~ elects to 1exenipt itself cated Inside or out,; · · Jon R. Blanchard,
from and hereb}' make side the city Drnlts. • Mayor
inapplicable· to It Section F. Water Worlss andlor
13-10248, Kans&$ Stat· sanltarv Sewer Sys· {SEALl utes Annotated,.1hat 8P" 111m. Improvement,: ATTEST:
piles to the City; but is extension, or repair. part of an enactment 01 • the city-owned
which does not' apply water works and/or.
uniformly· to an cities, sanitary sewer sys-
Shandi Wicks,
CMC, City Clerk (2tsp) and thereby provides terns; and appurte·
substitute and additional nances thereto,
i.._ _____ _J
proviSians on the same whether located in·; subject as hereinafter side· or outside the
provided• • • I city limits. . ,
Section 2, ~ G.Eam!ly Aqua!!c Par!I: and Addljjona)' Pcovi· . F'mancl"!J, construct·. mos.. The City of Sa· • Ing, eQUlpplng, sup-
lina, t<ansas • hereby , plying and malntain-
adopts the lollowlng : mg 8 family aquatic substitute and l\ddltional f park. •
provisloris of: Section 'H. pub!lc Building foe
13·1024a, ~ Stat· Becrestlonal pur-
utes Annotated: ; ~ . AcquiSl!lon
' As a complete alter-· or construc1ion of a
native to all other public building for
L .... melhods prOYided by recreational pur· law, the citf may poses and acquisi·
bofroW .money and lion of land tor the
Issue its bonds for construction of e
the purpose of pay-publlc building for
Ing the project cost recreetlonal pur-(which may Include poses
acquiSitlon of Inter· Issuance· of bonds by
ests in. real estate the city pursuan1 to" thlS
and_ architectural, charter ordinance sheD
. eng1!:'eerlng, -.and . uire.authorizatlon .by . ·other professional ~ajority of the votes
services) for the lol· -1 · h Id lowir19 categorias·of cast·at an e ectlOn e projects:· for that purpose, except,
· however, thet In any cal-
Project
~DesCrlQl!OD
A.· Sttnll;. Construe·
· lion, raconstrvctlon,
improvement or re·
pair of lll'!Y street or
roadway located within or partlally
within Iha City limits
and not designated as a main traffic:waY , pursuant to K.S.A.
12-685 et seq.
B. Bridges and Via· mm. construction. reeonstruc!lon, Im·
provement or repair
of any bridge or via·
duct loeat&d within
or J>¥!ielly wllhln the city limilS and not ~
cated on a street
deslgnated as a
main trafficway pu r· •. suant to K.S.A.
. 12:685.~· .
endar year the city may
issue bonds pursuant to
·this charter ordinance
without ari election, es
follows:
(1) a maximum 01
$1 ,000,000 under
each or project ca~· gories A tlltough E;
(2) e maximum of· $2,000,000 under
project categOry F; (3) a maximum · of
$12,500,000 under
' ~ect category G;
(~) a· maximum. oi
$7,000,000 under
project category H.
Sm:tlon 3. Bmlu!m·
!That Charter Ordinanc:e 38 of ttie City of Sanna,
Kansas, is 1 ~ereby re-
IP1e~ion 4. ~ !loo ofOrdinaoce. This
l
l
l
(Published in The Salina Journal on Jun~ 2016)
ORDINANCE NO. 16-10840
AN ORDINANCE OF THE CITY OF SALINA, KANSAS, AUTHORIZING THE
CONSTRUCTION OF A MULTI-SPORT ATHLETIC COMPLEX AND THE
ISSUANCE OF GENERAL OBLIGATION BONDS OF THE CITY TO FUND A
PORTION OF THE COSTS THEREOF, ALL PURSUANT TO CHARTER
ORDINANCE NO. 39 OF THE CITY AND ARTICLE 12, SECTION 5 OF THE
CONSTITUTION OF THE STATE OF KANSAS.
WHEREAS, pursuant to Article 12, § 5 of the Constitution of the State of Kansas the City of Salina,
ansas (the "City") previously passed Charter Ordinance No. 39 (the "Charter Ordinance") relating to
eneral improvements in the City, including the acquisition or construction of public buildings for
ecreational purposes and the acquisition of land therefor, and the issuance of general obligation bonds of the
City to finance the costs thereof in an amount not to exceed $7 ,000,000; and
WHEREAS, after publication of the Charter Ordinance according to the law and expiration of the
rescribed protest period with no sufficient protest, the Charter Ordinance became effective; and
WHEREAS, Article 12, § 5 of the Constitution of the State of Kansas (the "Home Rule
mendment") empowers cities to determine their local affairs and government and provides that such power
nd authority granted thereby to cities shall be liberally construed for the purpose of giving to cities the
largest measure of self-government; and
WHEREAS, the City is a city within the meaning of the Home Rule Amendment; and
WHEREAS, the governing body of the City has considered the needs of the City for a downtown
ixed-use development, including, but not limited to, a multi-sport athletic complex, museum facilities, an
istoric theater, other various commercial and residential uses, and associated infrastructure for the
stimulation and fostering of economic development in the City and its environs in order to enhance and
provide for the general and economic development and welfare of the City and its citizens; and
WHEREAS, the City has entered into discussions and negotiations with various parties to develop,
construct, equip and acquire an approximately 69,000 square foot multi-sport athletic complex generally
located at 5th & Ash Street in the City (the "Project"); and
WHEREAS, the Project when constructed will be operated by the City; and
WHEREAS, the total costs of the Project are approximately $11,500,000, with not to exceed
$7,000,000 of such funds provided by City funds and the balance of such funds to be provided by grants
ade by private entities to the City and, if available, New Market Tax Credits to be obtained by or on behalf
fthe City in connection with the Project; and
WHEREAS, the City hereby finds and determines that it is necessary and advisable to issue general
bligation bonds and/or temporary notes in an amount not to exceed $7,000,000 to pay and provide for the
costs of a portion of the Project, including, if necessary, making an economic development grant of such
funds to a Kansas non-profit corporation for the purpose of obtaining New Market Tax Credits, all for use in
connection with the Project.
NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF
SALINA, KANSAS:
l
L
l
Section 1. Authorization. The governing body of the City hereby finds and detennines
ursuant to the Home Rule Amendment and the Charter Ordinance that it is necessary and appropriate for the
ity to provide for the acquisition, construction and equipping of the Project as described above, and to
issue general obligation bonds and/or temporary notes in an amount not to exceed $7 ,000,000 to pay and
rovide for the costs of a portion of the Project, including making an economic development grant to a
Kansas non-profit corporation for the purpose of obtaining New Market Tax Credits, all for use in connection
ith the Project. The governing body of the City further finds and detennines that the Project and the
proposed financing thereof will stimulate and foster economic development in the City and its environs in
order to enhance and provide for the general and economic development and welfare of the City and its
citizens.
Section 2. Reimbursement. The City may make expenditures related to the Project prior to
e issuance of general obligation bonds and/or temporary notes described in Section 1 hereof, and the
proceeds of such general obligation bonds and/or temporary notes may be used to reimburse expenditures
made on or after the date which is 60 days before the date of this Ordinance, pursuant to Treasury Regulation
§1.150-2.
Section 3. Further Authority. The Mayor, Clerk and other City officials are hereby further
authorized and directed to execute any and all documents and take such actions as they may deem necessary
or advisable in order to carry out and perfonn the purposes of the Ordinance, and the execution or taking of
such action shall be conclusive evidence of such necessity or advisability.
Section 4. Effective Date. This Ordinance shall be effective from and after final passage by
the governing body, approval and signature by the Mayor and publication once in the official City
newspaper.
PASSED by the governing body of the City of Salina, Kansas, on June 20, 2016 and APPROVED
AND SIGNED by the Mayor. .
(SEAL)
I hereby certify that the above and foregoing is a true
and correct copy of Ordinance No. 16-10840 that was adopt~d by the Governing Body of the City of Salina
at thetr regular meeting on June 20 2016 ' .
Shandi Wicks
City Clerk
EXCERPT OF MINUTES OF A MEETING
OF THE GOVERNING BODY OF
THE CITY OF SALINA, KANSAS
HELD ON JUNE 20, 2016
The governing body met in regular session at the usual meeting place in the City, at 4:00 p.m., the
following members being present and participating, to-wit:
Mayor Kaye J. Crawford, Commissioners Jon Blanchard. Trent Davis, Randall Hardy and Karl
The Mayor declared that a quorum was present and called the meeting to order.
* * * * * * * * * * * * * *
(Other Proceedings)
Thereupon, there was presented for first reading an Ordinance entitled:
AN ORDINANCE OF THE CITY OF SALINA, KANSAS, AUTHORIZING THE
CONSTRUCTION OF A MULTI-SPORT ATHLETIC COMPLEX A1'TJ> THE
ISSUANCE OF GENERAL OBLIGATION BONDS OF THE CITY TO FUND A
PORTION OF THE COSTS THEREOF, ALL PURSUANT TO CHARTER
ORDINANCE NO. 39 OF THE CITY AND ARTICLE 12, SECTION 5 OF THE
CONSTITUTION OF THE STATE OF KANSAS.
Thereupon, Commissioner Ryan moved that said Ordinance be approved on first reading. The
motion was seconded by Commissioner Davis. Said Ordinance was duly read and considered, and upon
being put, the motion for approval was carried by the vote of the governing body, the vote being as
follows:
Yea: Mayor Kaye J. Crawford, Commissioners Jon Blanchard, Trent Davis, Randall Hardy and
Karl Ryan.
Nay: None.
* * * * * * * * * * * * * *
(Other Proceedings)
[BALANCE OF THIS PAGE INTENTrONALLY LEFT BLANK]
CERTIFICATE
hereby certify that the foregoing Excerpt of Minutes is a true and correct excerpt of the
proceedings of the governing body of the City of Salina, Kansas held on the date stated therein, and that
the official minutes of such proceedings are on file in my office.
(Signature page to Excerpt of Minutes)
EXCERPT OF MINUTES OF A MEETING
OF THE GOVERNING BODY OF
THE CITY OF SALINA, KANSAS
HELD ON JUNE 20, 2016
The governing body met in regular session at the usual meeting place in the City, at 4:00 p.m., the
following members being present and participating, to-wit:
Present: Mayor Kaye J. Crawford, Commissioners Jon Blanchard, Trent Davis, Karl Ryan and
Randall Hardy
Absent: None.
The Mayor declared that a quorum was present and called the meeting to order.
**************
(Other Proceedings)
Thereupon, there was presented for first reading an Ordinance entitled:
AN ORDINANCE OF THE CITY OF SALINA, KANSAS, AUTHORIZING THE
CONSTRUCTION OF A MULTI-SPORT ATHLETIC COMPLEX AND THE
ISSUANCE OF GENERAL OBLIGATION BONDS OF THE CITY TO FUND A
PORTION OF THE COSTS THEREOF, ALL PURSUANT TO CHARTER
ORDINANCE NO. 39 OF THE CITY AND ARTICLE 12, SECTION 5 OF THE
CONSTITUTION OF THE STATE OF KANSAS.
Thereupon, Commissioner Ryan_ moved that said Ordinance be passed. The motion was
seconded by Commissioner Davis. Said Ordinance, having been approved by a first reading on June 20,
2016, was duly read and considered, and upon being put, the motion for the passage of said Ordinance
was carried by the vote of the governing body, the vote being as follows:
Aye: Mayor Kaye J. Crawford, Commissioners Jon Blanchard, Trent Davis, Karl Ryan and
Randall Hardy
Nay: None.
Thereupon, the Mayor declared said Ordinance duly passed and the Ordinance was then duly
numbered Ordinance No. 16-10840, was signed and approved by the Mayor and attested by the Clerk and
was directed to be published one time in the official newspaper of the City.
**************
(Other Proceedings)
[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
On motion duly made, seconded and carried, the meeting thereupon adjourned.
CERTIFICATE
I hereby certify that the foregoing Excerpt of Minutes is a true and correct excerpt of the
proceedings of the governing body of the City of Salina, Kansas, held on the date stated therein, and that
the official minutes of such proceedings are on file in my office.
(Signature page to Excerpt of Minutes)
Publisher's Affidavit
I, ---~C...1h..L<rui.i2s.1..,,ty):.....J.F...1.i.&.Jn~k..__ ___ , being duly sworn
declare that I am a I egal Coordinator
of THE SALINA JOURNAL, a daily newspaper
published at Salina, Saline County, Kansas, and of
general circulation in said county, which newspaper
bas been admitted to the mails as second class matter in
said cow1ty, and continuously and uninterruptedly
published for five consecutive years prior to first
publication of attached notice, and that the
Ordinance 16-10840 Notice bas
been co rrectly published in the enti_re issue of said
newspaper one time, publication being given in the issue
of June 24,
(
Subscribed and sworn to before me, this
day of
Printer's Fee $458.00
MELISSA WINDHOU
-:z &--"M My Appl Exp. J
2016
A.D. 20 /&
(Published in the Salina WHEREAS, the Pro-
Joumal June 24 2016) ject when constructed
-Section 3.
ORDINANCE 'No. · will be operated by the
16-10840 City; and
AN ORDINANCE OF WHEREAS, the total
THE CITY OF SALINA, costs of the Project are approximately KANSAS, AUTHORIZ-$11 ,500,000, with not to
ING THE CONSTRUC-exceed $7,000,000 of
TI 0 N 0 F A such funds provided by MULTI-SPORT ATH-City funds and the bal-
LETIC COMPLEX AND ance of such funds to be
THE ISSUANCE OF provided by grants made
GENERAL OBLIGA-by private entities to the
TION BONDS OF THE City and, if available,
CITY TO FUND A POR-New Market Tax Credits
TION OF THE COSTS to be obtained by or on THEREOF, ALL PUR-behalf of the City in con-
SUANT TO CHARTER nection with the Project;
ORDINANCE NO. 39 an~HEREAS, the City
OF THE CITY AND AR-hereby finds and deter-
TICLE 12, SECTION 5 mines that it is neces-
OF THE CONSTITU-sary and advisable to is-
TION OF THE STATE sue general obligation
OF KANSAS. • bonds and/or temporary
Further Authority.
The Mayor, Clerk and
other City officials are
hereby further author-
ized and directed to exe-
cute any and all docu-
ments and take such ac-
tions as they may deem necessary or advisable in order to carry out and
pertorm the purposes of
the Ordinance, and the
execution or taking of such action shall be con-clusive evidence of such
necessity or advisability.
Sectlon4. Effective Date. This
Ordinance shall be ef-
fective from and after fi-nal passage by the gov-erning body, approval
and signature by the
Mayor and publication
once in the official City
newspaper. PASSED by the gov-
erning body of the City
of Salina, Kansas, on
June 20, 2016 and AP-
PROVED AND SIGNED
by the Mayor.
Kaye J. Crawford,
Mayor
WHEREAS, pursuant notes in an amount not
to Article 12, § 5 of the to exceed $7,000,000 to Constitution of the State pay and provide for the
of Kansas the City of costs of a portion of the
Salina, Kansas (the Project, including, if nec-"City") previously passed essary, making an eco-Charter Ordinance No. nomic development
39 (the "Charter Ordi-grant of such funds to a
nance") relating to gen-Kansas non-profit corpo-
eral improvements in the ration for the purpose of
City, including the acqui-obtaining New Market
sition or construction of Tax Credits, all for use (SEAL)
public buildings for rec-in connection with the ATTEST: reational purposes and Project.
the acquisition of land NOW, THEREFORE, Shandi Wicks,
therefor, and the issu-BE IT ORDAINED BY CMG, City Clerk
ance of general obliga-THE GOVERNING
tion bonds of the City to BODY OF THE CITY
finance the costs thereof OF SALINA, KANSAS: in an amount not to ex-Section 1.
ceed $7,000,000; and Authorization. The WHEREAS, after pub -· b d f the
ll·cat1·on of the Charter governing 0 y 0
City hereby finds and Ordinance according to determines pursuant to the law and expiration of the Home Rule Amend-
the prescribed protest ment and the Charter
period with no sufficient Ordinance that it is nec-
protest, the Charter Or-essary and appropriate
dinance became effec-for the City to provide for
tive; and the acquisition, con-WHEREAS, Article 12, struction and equipping
§ 5 of the Constitution of of the Project as de-
the State of Kansas (the scribed above, and to is-
"Home Rule Amend-sue general obligation
ment") empowers cities bonds and/or temporary
to determine their local notes in an amount not
affairs and government to exceed $7,000,000 to
and provides that such pay and provide for the
power and authority • costs of a portion of the
granted thereby to cities Project, including mak-
shall be liberally con-ing an economic devel-
strued for the purpose of opment grant to a Kan-
giving to cities the larg-sas non-profit corpora-
est measure of self-gov-lion for the purpose of
emment; and obtaining New Market
WHEREAS, the City is Tax Credits, all for use .
a city within the meaning in connection with the
of the Home Rule Project. The governing
Amendment; and body of the City further
WHEREAS, the gov-finds and determines eming body of the City that the Project and the has considered the proposed financing
needs of the City for a thereof will stimulate and downtown mixed-use foster economic devel-
development, including, opment in the City and
but not limited to, a its environs in order to multi-sport athletic com-enhance and provide for
plex, museum facilities, the general and eco-
an historic theater, other nomic development and
various commercial and welfare of the City and
residential uses, and as-its citizens.
sociated infrastructure Section 2.
• for the stimulation and Reimbursement. The
fostering of economic City may make expendi-
• development in the City tures related to the Pro-
' and its environs in order ject prior to the issuance
•to enhance and provide of general obligation
• for the general and eco-bonds and/or temporary
nomic development and notes described in Sec-
welfare of the City and lion 1 hereof, and the
its citizens; and proceeds of such gen-
WHEREAS, the City eral obligation bonds
has entered into discus-and/or temporary notes
sions and negotiations may be used to reim-
with various parties to burse expenditures
develop, construct, made on or after the
equip and acquire an date which is 60 days
approximately 69,000 before the date of this
square foot multi-sport Ordinance, pursuant to
athletic complex gener-Treasury Regulation
ally located at 5th & Ash §1 .150-2. Street in ·the City (the
"ProiQCO;..and
(1!)
EXCERPT OF MINUTES OF A MEETING
OF THE GOVERNING BODY OF
THE CITY OF SALINA, KANSAS
HELD ON JUNE 27, 2016
The governing body met in regular session at the usual meeting place in the City, at 4:00 p.m., the
following members being present and participating, to-wit:
Mayor Kaye J. Crawford. Commissioners Jon Blanchard. Trent Davis. Randall Hardy, and Karl
Absent: None.
The Mayor declared that a quorum was present and called the meeting to order.
**************
(Other Proceedings)
The matter of providing for the offering for sale of General Obligation Temporary Notes, Series
20 I 6-2, came on for consideration and was discussed.
Commissioner Ryan presented and moved the adoption of a Resolution entitled:
A RESOLUTION AUTHORIZING THE OFFERING FOR SALE OF GENERAL
OBLIGATION TEMPORARY NOTES, SERIES 2016-2, OF THE CITY OF
SALINA, KANSAS.
Commissioner Hardy seconded the motion to adopt the Resolution. Thereupon, the Resolution
was read and considered, and, the question being put to a roll call vote, the vote thereon was as follows:
Aye: Mayor Kaye J. Crawford, Commissioners Jon Blanchard. Trent Davis, Randall Hardv, and
Karl Ryan.
Nay: None.
The Mayor declared the Resolution duly adopted; the Clerk designating the same Resolution
No. 16-7377.
**************
(Other Proceedings)
[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
* * * * * * * * * * * * * *
CERTIFICATE
(Signature Page to Excerpt of Minutes)
I
I
I
RESOLUTION NO. 16-7377
A RESOLUTION AUTHORIZING THE OFFERING FOR SALE OF GENERAL
OBLIGATION TEMPORARY NOTES, SERIES 2016-2, OF THE CITY OF SALINA,
KANSAS.
WHEREAS, the City of Salina, Kansas (the "Issuer") has previously authorized certain internal
improvements described as follows (the "Improvements"):
Project Description
Field House Project
Ordinance No.
16-10840
Autliori{y
Charter Ord. No. 39; Art. 12, Section
5 of the Kansas Constitution
Amount Authorized
Not to exceed
$7,000,000
WHEREAS, the governing body of the Issuer is authorized by law to issue general obligation bonds
to pay a portion of the costs of the Improvements;· and
WHEREAS, it is necessary for the Issuer to provide cash funds (from time to time) to meet its
obligations incurred in constructing the Improvements prior to the completion thereof, and it is desirable and
in the interest of the Issuer that such fund~ be raised by the issuance of temporary notes of the Issuer; and
WHEREAS, none of such general obligation temporary notes previously authorized have been
issued and the Issuer proposes to issue its temporary notes to pay a portion of the costs of the Improvements;
and
WHEREAS, the Issuer has selected the firm of George K. Baum & Co., Kansas City, Missouri (the
"Financial Advisor"), as financial advisor to the Issuer for one or more series of temporary notes of the Issuer
in order to provide funds to temporarily finance the Improvements; and
WHEREAS, the Issuer desires to authorize the Financial Advisor to proceed with the negotiating for
sale of said temporary and related activities; and .
WHEREAS, due to the volatile nature of the municipal bond market and the desire of the Issuer to
achieve maximum benefit oftiming of the sale o'f said temporary, the governing body desires to authorize the
Mayor to confirm the sale of such temporary notes, if necessary, prior to the next meeting of the governing
body to adopt the necessary resolution providing for the issuance thereof.
BE IT RESOLVED BY THE GOVERNJNG BODY OF THE CITY OF SALINA, KANSAS, AS
FOLLOWS:
Section 1. The Issuer is hereby authorized to proceed with the negotiating of the sale of the Issuer's
General Obligation Temporary Notes, Series 2016-2 (the ''Notes") in accordance with the presentation made
by the City's Finance Director this date. The offering for sale of the Notes shall be accomplished in ·
consultation with the Clerk, Gilmore & Bell, P.C., Kansas City, Missouri, the Issuer's bond counsel ("Bond
Counsel"), and the Financial Advisor. The confirmation of the sale of the Notes shall be subject to the
execution of a note purchase agreement (the ''Note Purchase Agreement") between the purchaser of the
Notes (the "Purchaser") and the Issuer in a form approved by Bond Counsel and the Issuer's legal counsel,
and the adoption of a resolution by the governing body of the Issuer authorizing the issuance of the Notes
and ·the execution of various documents necessary to deliver the Notes. The Mayor is hereby authorized to
execute the Note Purchase Agreement subject to the following parameters: (a) the principal amount of the
. Notes shall hot exceed $4,700,000; (b) the coupon rate of the Notes shall not exceed 1.00%; (c) the final
maturity of the Notes shall be no later than September 1, 2019; {d) the Notes shall be callable for redemption
I
I
z n. w .. c ~ ~ 'O 1
prior to maturity not later than September I, 2017; and ( e) the Notes shall be sold to the Purchaser at a price
not Jess than 99.50% of the final principal amount.
Section 2. The Mayor, City Manager, Clerk and the other officers and representatives of the Issuer,
the Finance Director and Bond Counsel are hereby autl)orized and directed to take such other action as may
be necessary to carry out the sale of the Notes.
Section 3. This Resolution shall be in full force and effect from and after its adoption.
ADOPTED by the governing body on June 27, 2016.
(SEAL)
ATTEST:
2
NOTE PURCHASE AGREEMENT
BETWEEN
CITY OF SALINA, KANSAS
AND
THE BENNINGTON STATE BANK
SALINA, KANSAS
$4,615,000
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
DATED AS OF JULY 20, 2016
Mayor and
Governing Body
City of Salina, Kansas
$4,615,000
CITY OF SALINA, KANSAS
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
NOTE PURCHASE AGREEMENT
July 1, 2016
On the basis of the representations, warranties and covenants and upon the terms and conditions
contained in this Note Purchase Agreement, The Bennington State Bank, Salina, Kansas (the
"Purchaser"), hereby offers to purchase all (but not less than all) of the above-described notes (the
"Notes"), to be issued by the City of Salina, Kansas (the "Issuer"), under and pursuant to a Resolution to
be adopted by the governing body of the Issuer on July 11, 2016 (the "Note Resolution"). All capitalized
terms not specifically defined herein shaJl have the same meaning as defined in the Note Resolution,
unless some other meaning is plainly indicated.
This offer is made subject to acceptance of this Note Purchase Agreement by or on behalf of the
governing body of the Issuer on or before 5:00 p.m., applicable Central time, on July 1, 2016.
SECTION 1. PURCHASE, SALE AND DELIVERY OF THE NOTES
(a) On the basis of the representations, warranties and covenants contained herein and in the
other agreements and documents referred to herein, and subject to the terms and conditions herein set
forth, the Purchaser agrees to purchase from the Issuer and the Issuer agrees to sell to the Purchaser the
Notes not later than 12:00 noon, applicable Central time on July 20, 2016, or such other place, time or
date as shall be mutually agreed upon by the Issuer and the Purchaser at the purchase price set forth on
Exhibit A attached hereto, plus accrued interest from the Dated Date to the Closing Date (the "Purchase
Price"). The date of such delivery and payment is herein called the "Closing Date," the hour and date of
such delivery and payment is herein called the "Closing Time" and the transactions to be accomplished
for delivery of the Notes on the Closing Date shall be herein called the "Closing." The Notes shall be
issued under and secured as provided in the Note Resolution and the Notes shall have the maturities and
interest rates as set forth therein and on Exhibit A attached hereto, which also contains a summary of the
redemption provisions of the Notes. The Notes shall contain such other provisions as are described in the
Note Resolution.
(b) The Issuer acknowledges and agrees that: (1) the purchase and sale of the Notes pursuant
to this Note Purchase Agreement is an arm's-length commercial transaction between the Issuer and the
Purchaser; (2) in connection with such transaction, the Purchaser is acting solely as a principal and not as
an agent or a fiduciary of the Issuer; (3) the Purchaser has not assumed (individually or collectively) a
fiduciary responsibility in favor of the Issuer with respect to the offering of the Notes or the process
leading thereto (whether or not the Purchaser, or any affiliate of the Purchaser, has advised or is currently
advising the Issuer on other matters) or any other obligation to the Issuer except with respect to the
obligations expressly set forth in this Note Purchase Agreement; and ( 4) the Issuer has consulted with its
own legal and financial advisors to the extent it deemed appropriate in connection with the offe1ing of the
Notes.
( c) Payment of the Purchase Price for the Notes shall be made by federal wire transfer in
immediately available federal funds, payable to the order of a financial institution to be designated by the
Issuer for the account of the Issuer on or before the Closing Time on the Closing Date. Upon such
payment, the Notes shall be delivered and released pursuant to the instructions of the Purchaser.
(d) The delivery of the Notes shall be made in definitive form, as fully registered Notes (in
such denominations as the Purchaser shall specify in writing at least 48 hours prior to the Closing Time)
duly executed and authenticated; provided, however, that the Notes may be delivered in temporary fonn.
The Notes shall be available for examination and packaging by the Purchaser at least 24 hours prior to the
Closing Time.
SECTION 2. NO OFFICIAL STATEMENT
No official statement or other offering document bas been prepared in connection with the sale of
the Notes.
SECTION 3. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF
THE PURCHASER
By the execution hereof the Purchaser hereby represents, warrants and agrees with the Issuer that
as of the date hereof and at the Closing Time:
(a) Purchaser is a banking corporation organized and existing under the laws of the State of
Kansas with its principal corporate offices located in Salina, Kansas, and, pursuant to all necessary
corporate action, is authorized to purchase the Notes and to execute and perform this Note Purchase
Agreement.
(b) Purchaser is knowledgeable and experienced in financial and business matters and is
capable of evaluating investment merit and risks associated with its purchase of the Notes. The Purchaser
has been furnished and has reviewed the provisions of the Note Resolution relating to the authorization of
and security for payment of the Notes. Prior to the execution hereof Purchaser also obtained and
examined such financial records and information necessary in order to enable itself to fully evaluate the
terms and provisions of the Notes and of the Note Resolution authorizing their issuance and providing for
the payment thereof and the financial and investment merits and risks associated with the purchase of the
Notes. On the basis of such information materials and Purchaser's investigation, Purchaser has made the
decision to purchase the Notes and has not relied upon any representations of the Issuer or any of its
officers or employees with respect to the Notes.
( c) Purchaser is purchasing the Notes as an investment for its own account and not with a
view to the sale, redistribution or other disposition thereof in the ordinary course of business in a
transaction not amounting to a public offering as contemplated by Section 4(2) of the Securities Act of
1933, as amended (the "1933 Act"). Purchaser acknowledges that the Notes will not be registered under
the 1933 Act or any applicable state securities law.
SECTION 4. ISSUER'S REPRESENTATIONS AND WARRANTIES
By the Issuer's acceptance hereof the Issuer hereby represents and warrants to, and agrees with,
the Purchaser that as of the date hereof and at the Closing Time:
2
(a) The Issuer is a municipal corporation duly organized under the laws of the State of
Kansas (the "State").
(b) The Issuer has complied with all provisions of the Constitution and laws of the State and
has full power and authority to consummate all transactions contemplated by the Note Resolution and this
Note Purchase Agreement, and all other agreements relating thereto.
( c) The Issuer has duly authorized by all necessary action to be taken by the Issuer: ( 1) the
adoption and performance of the Note Resolution; (2) the execution, delivel)' and performance of this
Note Purchase Agreement; (3) the execution and performance of any and all such other agreements and
documents as may be required to be executed, delivered and performed by the Issuer in order to carry out,
give effect to and consummate the transactions contemplated by the Note Resolution and this Note
Purchase Agreement; and (4) the carl)1ing out, giving effect to and consummation of the transactions
contemplated by the Note Resolution and this Note Purchase Agreement. Executed counterparts of the
Note Resolution and all such other agreements and documents specified herein will be made available to
the Purchaser by the Issuer at the Closing Time.
(d) The Note Resolution and this Note Purchase Agreement, when executed and delivered by
the Issuer, will be the legal, valid and binding obligations of the Issuer enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by any applicable bankruptcy,
reorganization, insolvency, moratorium or other law or laws affecting the enforcement of creditors' rights
generally or against entities such as the Issuer and further subject to the availability of equitable remedies.
(e) The Notes have been duly authorized by the Issuer, and when issued, delivered and paid
for as provided for herein and in the Note Resolution, will have been duly executed, authenticated, issued
and delivered and will constitute valid and binding general obligations of the Issuer enforceable in
accordance with their terms and entitled to the benefits and security of the Note Resolution (subject to any
applicable bankruptcy, reorganization, insolvency, moratorium or other law or laws affecting the
enforcement of creditors' rights generally or against entities such as the Issuer and further subject to the
availability of equitable remedies). The Notes are general obligations of the Issuer, payable as to both
principal and interest, if necessary, from ad valorem taxes which may be levied without limitation as to
rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the
Issuer.
(f) The execution and delivery of the Note Resolution, this Note Purchase Agreement, the
Notes and compliance with the provisions thereof, will not conflict with or constitute on the part of the
Issuer a violation or breach of, or a default under, any existing law, regulation, court or administrative
decree or order, or any agreement, ordinance, resolution, mortgage, lease or other instrument to which it is
subject or by which it is or may be bound.
(g) The Issuer is not, or with the giving of notice or lapse of time or both would not be, in
violation of or in default under its organizational documents or any indenture, mortgage, deed of trust,
loan agreement, notes or other agreement or instrument to which the Issuer is a party or by which it is or
may be bound, except for violations and defaults which individually and in the aggregate are not material
to the Issuer and will not be material to the beneficial owners of the Notes. As of the Closing Time, no
event will have occurred and be continuing which with the lapse of time or the giving of notice, or both,
would constitute an event of default under the Note Resolution or the Notes.
3
Any certificate signed by any of the authorized officials of the Issuer and delivered to the
Purchaser in connection with the Closing shall be deemed a representation and warranty by the Issuer to
the Purchaser as to the statements made therein.
SECTION 5. COVENANTS AND AGREEMENTS OF THE ISSUER
The Issuer covenants and agrees with the Purchaser for the time period specified, and if no period
is specified, for so Jong as any of the Notes remain Outstanding, as follows:
(a) The proceeds of the Notes will be used as provided in the Note Resolution in accordance
with the laws of the State.
(b) The proceeds of the Notes shall not be used in a manner which would jeopardize the
exclusion of interest on the Notes from gross income for federal income tax purposes.
SECTION 6. CONDITIONS TO THE PURCHASER'S OBLIGATIONS
The Purchaser's obligations hereunder shall be subject to the due performance by the Issuer of the
Issuer's obligations and agreements to be performed hereunder at or prior to the Closing Time and to the
accuracy of and compliance with the Issuer's representations and warranties contained herein, as of the
date hereof and as of the Closing Time, and are also subject to the following conditions:
(a) The Note Resolution and the Notes shall have been duly authorized, executed and
delivered in the fonn heretofore approved by the Purchaser with only such changes therein as shall be
mutually agreed upon by the Issuer and the Purchaser.
(b) At the Closing Time, the Purchaser shall receive:
(1) An opinion dated as of the Closing Date of Gilmore & Bell, P.C. ("Bond
Counsel"), substantially in the form attached hereto as Exhibit B.
(2) A certificate of the Issuer, satisfactory in form and substance to the Purchaser,
dated as of the Closing Date, to the effect that: (A) since the date of the financial statements
provided to the Purchaser, there has not been any material adverse change in the business,
properties, financial condition or results of operations of the Issuer, whether or not arising from
transactions in the ordinary course of business, from that set forth in such financial statements,
and except in the ordinary course of business or as set forth in such financial statements, the
Issuer has not incurred any material liability; (B) there is no action, suit, proceeding or, to the
knowledge of the Issuer, any inquiry or investigation at law or in equity or before or by any
public board or body pending or, to the knowledge of the Issuer, threatened against or affecting
the Issuer, its officers or its property or, to the best of the knowledge of the Issuer, any basis
therefor, wherein an unfavorable decision, ruling or finding would adversely affect the Issuer, the
transactions contemplated hereby or by the Note Resolution, the validity or enforceability of the
Notes or the Note Purchase Agreement, or the levy and collection of ad valorem taxation in
amounts necessary to provide for payment of the principal of and interest on the Notes which are
not disclosed herein or in such financial statements; (C) the Issuer has duly authorized, by all
necessary action, the execution, delivery and due performance by the Issuer of this Note Purchase
Agreement; and (D) the representations and warranties of the Issuer set forth in this Note
Purchase Agreement were accurate and complete as of the date hereof and are accurate and
complete as of the Closing Time.
4
Subsequent to Closing, the Purchaser shall receive a complete Transcript of the Proceedings
relating to the issuance of the Notes in CD-ROM format, which shall specifically include each of the
forgoing documents.
SECTION 7. CONDITIONS TO THE ISSUER'S OBLIGATIONS
The obligations of the Issuer hereunder are subject to the Purchaser's performance of its
obligations hereunder.
SECTION 8. PAYMENT OF EXPENSES
(a) Whether or not the Notes are sold by the Issuer to the Purchaser (unless such sale be
prevented at the Closing Time by the Purchaser's default), the Purchaser, unless otherwise contracted for,
shall be under no obligation to pay any expenses incident to the performance of the obligations of the
Issuer hereunder; nor shall the Issuer, unless otherwise contracted for, be under any obligation to pay any
expenses incident to the performance of the obligations of the Purchaser hereunder (unless such sale be
prevented at the Closing Time by the Issuer's default).
(b) If the Notes are sold by the Issuer to the Purchaser, except as hereinafter set forth, all
expenses and costs to effect the authorization, preparation, issuance, delivery and sale of the Notes shall
be paid by the Issuer out of the proceeds of the Notes or other Issuer funds. Such expenses and costs shall
include, but not be limited to: (I) the fees and disbursements of Bond Counsel; (2) the fees and
disbursements of the Issuer's legal counsel; (3) the expenses and costs for the preparation, printing,
photocopying, execution and delivery of the Notes, this Note Purchase Agreement and all other
agreements and documents contemplated hereby; (4) fees of the Note Registrar and Paying Agent
designated by the Issuer pursuant to the Note Resolution; and (5) all costs and expenses of the Issuer
relating to the issuance of the Notes.
SECTION 9. NOTICE
Any notice or other communication to be given under this Note Purchase Agreement may be
given by mailing or delivering the same in writing to the applicable person, as follows:
(a) If to the Issuer at: City of Salina, Kansas, 300 W. Ash Street, Salina, Kansas 67401,
Attention: Michelle Meyer, Finance Director.
(b) If to the Purchaser at: The Bennington State Banlc, 2130 South Ohio Street, Salina,
Kansas 67401, Attention: Darren Gragg, Senior Vice President/COO.
SECTION 10. MISCELLANEOUS
(a) This Note Purchase Agreement shall be binding upon the Purchaser, the Issuer, and their
respective successors. This Note Purchase Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that the representations, warranties, indemnities and agreements of
the Issuer contained in this Note Purchase Agreement shall also be deemed to be for the benefit of the
person or persons, if any, who control the Purchaser (within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act). Nothing in this Note Purchase Agreement is intended or shall be construed
to give any person, other than the persons referred to in this Paragraph, any legal or equitable right,
remedy or claim under or in respect of this Note Purchase Agreement or any provision contained herein.
All of the representations, warranties and agreements of the Issuer contained herein shall remain in full
5
force and effect, regardless of: (1) any investigation made by or on behalf of the Purchaser, (2) delivery
of and payment for the Notes of (3) any tennination of this Note Purchase Agreement.
(b) For purposes of this Note Purchase Agreement, "business day" means any day on which
the New York Stock Exchange is open for trading.
(c) This Note Purchase Agreement shall be governed by and construed in accordance with
the laws of the State.
(d) This Note Purchase Agreement may be executed in one or more counterparts, and if
executed in more than one counterpart, the executed counterparts shall together constitute a single
instrument.
(e) This Note Purchase Agreement may not be assigned by either party without the express
written consent of the other party.
SECTION 11. EFFECTIVE DATE
This Note Purchase Agreement shall become effective upon acceptance hereof by the Issuer.
[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
6
Upon your acceptance of the offer, the foregoing agreement will be binding upon you and the
Purchaser. Please acknowledge your agreement with the foregoing by executing the enclosed copy of this
Note Purchase Agreement and returning it to the undersigned.
Date:
Time:
July 1, 2016
_If!_: J.-f d_.m.
Accepted and agreed to as of
the date first above written.
THE BENNINGTON STATE BANK
SALINA, KANSAS,
as the Purchaser
CITY OF SALINA, KANSAS
ATTEST:
By: ~·wwu
Clerk
Date: July 1, 2016
Time: ~:~ \\.m.
(Signature Page to Note Purchase Agreement)
EXHIBIT A
$4,615,000
CITY OF SALINA, KANSAS
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
CALCULATION OF PURCHASE PRICE
Principal Amount $4,615,000.00
Stated Maturity
September 1
2019
MATURITY SCHEDULE
SERIAL NOTES
Principal
Amount
$4,615,000
Annual Rate
Of Interest
1.00%
(Plus accrued interest from July 20, 2016)
REDEMPTION OF NOTES
Redemption by Issuer.
Price
100%
Optional Redemptio11. At the option of the Issuer, the Notes will be subject to redemption and
payment prior to maturity at any time on August 1, 2017, and thereafter, as a whole or in part (selection of
the amount of Notes to be redeemed to be determined by the Issuer in such equitable manner as it may
determine) at any time, at the redemption price of 100% (expressed as a percentage of the principal
amount), plus accrued interest to the date ofredemption.
[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
A-1
EXHIBITB
FORM OF BOND COUNSEL OPINION
B-1
Governing Body
City of Salina, Kansas
The Bennington State Bank
Salina, Kansas
[FORM OF BOND COUNSEL OPINION]
GILMORE & BELL, P.C.
Attorneys at Law
2405 Grand Boulevard
Suite 1100
Kansas City, Missouri 64108-2521
July 20, 2016
Re: $4,615,000 General Obligation Temporary Notes, Series 2016-2, of the City of
Salina, Kansas, Dated July 20, 2016
We have acted as Bond Counsel in connection with the issuance by the City of Salina, Kansas
(the "Issuer"), of the above-captioned notes (the "Notes"). In this capacity, we have examined the law
and the certified proceedings, certifications and other documents that we deem necessary to render this
opinion. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the
resolution adopted by the governing body of the Issuer authorizing the issuance of the Notes.
Regarding questions of fact material to our opinion, we have relied on the certified proceedings
and other certifications of public officials and others furnished to us without undertaking to verify them
by independent investigation.
Based upon the foregoing, we are of the opinion, under existing law, as follows:
1. The Notes have been duly authorized, executed and delivered by the Issuer and are valid
and legally binding general obligations of the Issuer.
2. The Notes are payable as to both principal and interest from general obligation bonds of
the Issuer and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or
amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer.
The Issuer is required by law to include in its annual tax levy the principal and interest coming due on the
Notes to the extent that necessary funds are not provided from other sources.
3. The interest on the Notes (including any original issue discount properly allocable to an
owner of a Note) is: (a) excludable from gross income for federal income tax purposes; and (b) not an
item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and
corporations, but is taken into account in determining adjusted current earnings for the purpose of
computing the alternative minimum tax imposed on certain corporations. The opinions set forth in this
paragraph are subject to the condition that the Issuer complies with all requirements of the Internal
Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the
Notes in order that interest thereon be, or continue to be, excludable from gross income for federal
income tax purposes. The Issuer has covenanted to comply with all of these requirements. Failure to
comply with certain of these requirements may cause interest on the Notes to be included in gross income
for federal income tax purposes retroactive to the date of issuance of the Notes. The Notes have not been
designated as "qualified tax-exempt obligations" within the meaning of Code § 265(b )(3). We express no
opinion regarding other federal tax consequences arising with respect to the Notes.
4. The interest on the Notes is exempt from income taxation by the State of Kansas.
We express no opinion regarding tax consequences arising with respect to the Notes other than as
expressly set forth in this opinion.
The rights of the owners of the Notes and the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights
generally and by equitable principles, whether considered at law or in equity.
This opinion is given as of its date, and we assume no obligation to revise or supplement this
opinion to reflect any facts or circumstances that may come to our attention or any changes in law that
may occur after the date of this opinion.
GILMORE & BELL, P.C.
EXCERPT OF MINUTES OF A MEETING
OF THE GOVERNING BODY OF
THE CITY OF SALINA, KANSAS
HELD ON JULY 11, 2016
The governing body met in regular session at the usual meeting place in the City, at 4:00 p.m., the
following members being present and participating, to-wit:
Present: Vice-Mayor Karl Ryan Commissioners Jon Blanchard, Trent Davis, and Randall Hardy.
Absent: Mayor Kaye J. Crawford.
The Mayor declared that a quorum was present and called the meeting to order.
**************
(Other Proceedings)
Thereupon, there was presented a Resolution entitled:
A RESOLUTION AUTHORIZING AND DIRECTING THE ISSUANCE, SALE
AND DELIVERY OF GENERAL OBLIGATION TEMPORARY NOTES, SERIES
2016-2, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY
AND COLLECTION OF AN ANNUAL TAX, IF NECESSARY, FOR THE
PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID NOTES
AS THEY BECOME . DUE; MAKING CERTAIN COVENANTS AND
AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY
THEREOF; AND AUTHORIZING CERTAIN OTHER DOCUMENTS AND
ACTIONS CONNECTED THEREWITH.
Thereupon, Commissioner Davis moved that said Resolution be adopted. The motion was
seconded by Commissioner Blanchard. Said Resolution was duly read and considered, and upon being
put, the motion for the adoption of said Resolution was carried by the vote of the governing body, the vote
being as follows:
Yea: Vice-Mayor Karl Ryan, Commissioners Jon Blanchard, Trent Davis, and Randall Hardy.
Nay: None.
Thereupon, the Mayor declared said Resolution duly adopted and the Resolution was then duly
numbered Resolution No. 16-7382 and was signed by the Mayor and attested by the Clerk.
**************
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} r
·,. -.. -
On motion duly made, seconded and carried, the meeting thereupon adjourned.
CERTIFICATE
I hereby certify that the foregoing Excerpt of Minutes is a true and correct excerpt of the
proceedings of the governing body of the City of Salina, Kansas, held on the date stated therein, and that the
official minutes of such proceedings are on file in my office.
-·_-,_;. -
(Signature Page to Excerpt of Minutes -Notes)
RESOLUTION NO. 16-7382
OF
THE CITY OF SALINA, KANSAS
ADOPTED
JULY 11, 2016
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
Section 101.
Section 201.
Section 202.
Section 203.
Section 204.
Section 205.
Section 206.
Section 207.
Section 208.
Section 209.
Section 210.
Section 211.
Section 301.
Section 302.
Section 303.
Section 401.
Section 402.
Section 501.
Section 502.
Section 503.
Section 504.
Section 505.
Section 506.
Section 507.
Section 601.
Section 602.
Section 603.
RESOLUTION
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
Definitions of Words and Tenns ............................................................................... 2
ARTICLE II AUTHORIZATION AND DETAILS OF THE NOTES
Authorization of the Notes ........................................................................................ 7
Description of the Notes ............................................................................................ 8
Designation of Paying Agent and Note Registrar ..................................................... 8
Method and Place of Payment of the Notes .............................................................. 8
Payments Due on Saturdays, Sundays and Holidays ................................................ 9
Registration, Transfer and Exchange of Notes .......................................................... 9
Execution, Registration, Authentication and Delivery of Notes ............................. 10
Mutilated, Lost, Stolen or Destroyed Notes ............................................................ 11
Cancellation and Destruction of Notes Upon Payment. .......................................... 11
Nonpresentment of Notes ........................................................................................ 12
Sale of the Notes -Note Purchase Agreement. ....................................................... 12
ARTICLE III REDEMPTION OF NOTES
Redemption by Issuer. ............................................................................................. 12
Selection of Notes to be Redeemed ......................................................................... 12
Notice and Effect of Call for Redemption ............................................................... 13
ARTICLE IV SECURITY FOR NOTES
Security for the Notes .............................................................................................. 14
Levy and Collection of Annual Tax ........................................................................ 14
ARTICLE V ESTABLISHMENT OF FUNDS AND ACCOUNTS
DEPOSIT AND APPLICATION OF NOTE PROCEEDS
Creation of Funds and Accounts ............................................................................. 15
Deposit of Note Proceeds ........................................................................................ 15
Application of Moneys in the Improvement Fund .................................................. 15
Substitution of Improvements; Reallocation of Proceeds ....................................... 15
Application of Moneys in Debt Service Account... ................................................. 16
Application of Moneys in the Rebate Fund ............................................................. 16
Deposits and Investment of Moneys ....................................................................... 17
ARTICLE VI DEFAULT AND REMEDIES
Remedies ................................................................................................................. 17
Limitation on Rights of Owners .............................................................................. 17
Remedies Cumulative .............................................................................................. 18
Section 701.
Section 801.
Section 802.
ARTICLE VII DEFEASANCE
Defeasance ............................................................................................................... 18
ARTICLE VIII TAX COVENANTS
General Covenants .................................................................................................. 19
Survival of Covenants ............................................................................................. 19
ARTICLE IX NO OFFERING DOCUMENTS; CONTINUING DISCLOSURE
Section 901.
Section 1001.
Section 1002.
Section 1003.
Section 1004.
Section 1005.
Section 1006.
Section 1007.
Section 1008.
Section 1009.
Disclosure ................................................................................................................ 19
ARTICLE X MISCELLANEOUS PROVISIONS
Annual Audit. .......................................................................................................... 19
Amendments ............................................................................................................ 20
Notices, Consents and Other Instruments by Owners ............................................. 21
Notices ..................................................................................................................... 21
Electronic Transactions ........................................................................................... 21
Further Authority ..................................................................................................... 21
Severability .............................................................................................................. 22
Governing Law ......................................................................................................... 22
Effective Date .......................................................................................................... 22
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
11
RESOLUTION NO. 16-7382
A RESOLUTION AUTHORIZING AND DIRECTING THE ISSUANCE, SALE
AND DELIVERY OF GENERAL OBLIGATION TEMPORARY NOTES, SERIES
2016-2, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY
AND COLLECTION OF AN ANNUAL TAX, IF NECESSARY, FOR THE
PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID NOTES
AS THEY BECOME DUE; MAKING CERTAIN COVENANTS AND
AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY
THEREOF; AND AUTHORIZING CERTAIN OTHER DOCUMENTS AND
ACTIONS CONNECTED THEREWITH.
WHEREAS, the City of Salina, Kansas (the "Issuer") is a municipal corporation, duly created,
organized and existing under the Constitution and laws of the State; and
WHEREAS, pursuant to the provisions of the laws of the State of Kansas applicable thereto, by
proceedings duly had, the governing body of the Issuer has caused the following improvements (the
"Improvements") to be made in the City, to-wit:
Project
Description
Field House Project
Ord.No.
16-10840
Authority
Charter Ordinance No. 39; Art. 12,
Sec. 5 of Kansas Constitution
Allocable
Principal Amount
$4,615,000
WHEREAS, the governing body of the Issuer is authorized by law to issue general obligation
bonds to pay a portion of the costs of the Improvements; and
WHEREAS, it is necessary for the Issuer to provide cash funds (from time to time) to meet its
obligations incurred in constructing the Improvements prior to the completion thereof, and it is desirable and
in the interest of the Issuer that such funds be raised by the issuance of temporary notes of the Issuer
pursuant to the Act; and
WHEREAS, none of such general obligation bonds or temporary notes previously authorized
have been issued and the Issuer proposes to issue its temporary notes to pay a portion of the costs of the
Improvements; and
WHEREAS, the governing body of the Issuer hereby finds and determines that it is necessary for
the Issuer to authorize the issuance and delivery of the Notes in the principal amount of $4,615,000 to pay
a portion of the costs of the Improvements.
NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY
OF SALINA, KANSAS, AS FOLLOWS:
ARTICLE I
DEFINITIONS
Section 101. Definitions of Words and Terms. In addition to words and terms defined
elsewhere herein, the following words and terms as used in this Note Resolution shall have the meanings
hereinafter set forth. Unless the context shall otherwise indicate, words importing the singular number
shall include the plural and vice versa, and words importing persons shall include firms, associations and
corporations, including public bodies, as well as natural persons.
"Act" means the Constitution and statutes of the State including K.S.A. 10-101 to 10-125,
inclusive, specifically including K.S.A. 10-123, Charter Ordinance No. 39 of the Issuer and Article 12,
Section 5 of the Constitution of the State of Kansas, all as amended and supplemented from time to time.
"Authorized Denomination" means $100,000 or an integral multiple of $5,000 in excess
thereof.
"Beneficial Owner" of the Notes includes any Owner of the Notes and any other Person who,
directly or indirectly has the investment power with respect to any of the Notes.
"Bond and Interest Fund" means the Bond and Interest Fund of the Issuer for its general
obligation bonds.
"Bond Counsel" means the firm of Gilmore & Bell, P.C., or any other attorney or firm of
attorneys whose expertise in matters relating to the issuance of obligations by states and their political
subdivisions is nationally recognized and acceptable to the Issuer.
"Business Day" means a day other than a Saturday, Sunday or holiday on which the Paying
Agent is scheduled in the normal course of its operations to be open to the public for conduct of its
operations.
"City" means the City of Salina, Kansas.
"Clerk" means the duly elected/appointed and acting Clerk of the Issuer or, in the Clerk's
absence, the duly appointed Deputy, Assistant or Acting Clerk of the Issuer.
"Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations
proposed or promulgated thereunder of the United States Department of the Treasury.
"Costs of Issuance" means all costs of issuing the Notes, including but not limited to all
publication, printing, signing and mailing expenses in connection therewith, registration fees, financial
advisory fees, all legal fees and expenses of Bond Counsel and other legal counsel, expenses incurred in
connection with compliance with the Code, and all expenses incurred in connection with receiving ratings
on the Notes.
"Dated Date" means July 20, 2016.
"Debt Service Account" means the Debt Service Account for General Obligation Temporary
Notes, Series 2016-2 (within the Bond and Interest Fund) created pursuant to Section 501 hereof.
2
"Debt Service Requirements" means the aggregate principal payments and interest payments on
the Notes for the period of time for which calculated; provided, however, that for purposes of calculating
such amount, principal and interest shall be excluded from the determination of Debt Service
Requirements to the extent that such principal or interest is payable from amounts deposited in trust,
escrowed or otherwise set aside for the payment thereof with the Paying Agent or other commercial bank
or trust company located in the State and having full trust powers.
"Defaulted Interest" means interest on any Note which is payable but not paid on any Interest
Payment Date.
"Defeasance Obligations" means any of the following obligations:
(a) United States Government Obligations that are not subject to redemption in advance of
their maturity dates; or
(b) obligations of any state or political subdivision of any state, the interest on which is
excluded from gross income for federal income tax purposes and which meet the following conditions:
(1) the obligations are (i) not subject to redemption prior to maturity or (ii) the
trustee for such obligations has been given irrevocable instructions concerning their calling and
redemption and the issuer of such obligations has covenanted not to redeem such obligations
other than as set forth in such instructions;
(2) the obligations are secured by cash or United States Government Obligations that
may be applied only to principal of, premium, if any, and interest payments on such obligations;
(3) such cash and the principal of and interest on such United States Government
Obligations (plus any cash in the escrow fund) are sufficient to meet the liabilities of the
obligations;
(4) such cash and United States Government Obligations serving as security for the
obligations are held in an escrow fund by an escrow agent or a trustee irrevocably in trust;
(5) such cash and United States Government Obligations are not available to satisfy
any other claims, including those against the trustee or escrow agent; and
(6) such obligations are rated in a rating category by Moody's or Standard & Poor's
that is no lower than the rating category then assigned by that Rating Agency to United States
Government Obligations.
"Derivative" means any investment instrument whose market price is derived from the
fluctuating value of an underlying asset, index, currency, futures contract, including futures, options and
collateralized mortgage obligations.
"Event of Default" means each of the following occurrences or events:
(a) Payment of the principal and of the redemption premium, if any, of any of the Notes shall
not be made when the same shall become due and payable, either at Stated Maturity or by proceedings for
redemption or otherwise;
3
(b) Payment of any installment of interest on any of the Notes shall not be made when the
same shall become due; or
( c) The Issuer shall default in the due and punctual performance of any other of the
covenants, conditions, agreements and provisions contained in the Notes or in this Note Resolution on the
part of the Issuer to be performed, and such default shall continue for thirty (30) days after written notice
specifying such default and requiring same to be remedied shall have been given to the Issuer by the
Owner of any of the Notes then Outstanding.
"Federal Tax Certificate" means the Issuer's Federal Tax Certificate dated as of the Issue Date,
as the same may be amended or supplemented in accordance with the provisions thereof.
"Financeable Costs" means the amount of expenditure for an Improvement which has been duly
authorized by action of the governing body of the Issuer to be financed by general obligation bonds, less:
(a) the amount of any temporary notes or general obligation bonds of the Issuer which are currently
Outstanding and available to pay such Financeable Costs; and (b) any amount of Financeable Costs which
has been previously paid by the Issuer or by any eligible source of funds unless such amounts are entitled
to be reimbursed to the Issuer under State or federal law.
"Fiscal Year" means the twelve month period ending on December 31.
"Funds and Accounts" means funds and accounts created by or referred to in Sectio11 501
hereof.
"Improvement Fund" means the Improvement Fund for General Obligation Temporary Notes,
Series 2016-2 created pursuant to Sectio11 501 hereof.
"Improvements" means the improvements referred to in the preamble to this Note Resolution
and any Substitute Improvements.
"Independent Accountant" means an independent certified public accountant or firm of
independent certified public accountants at the time employed by the Issuer for the purpose of carrying
out the duties imposed on the Independent Accountant by this Note Resolution.
"Interest Payment Date(s)" means the Stated Maturity of an installment of interest on any Note
which shall be September 1 of each year, commencing September 1, 2017.
"Issue Date" means the date when the Issuer delivers the Notes to the Purchaser in exchange for
the Purchase Price.
"Issuer" means the City and any successors or assigns.
"Maturity" when used with respect to any Note means the date on which the principal of such
Note becomes due and payable as therein and herein provided, whether at the Stated Maturity thereof or
call for redemption or otherwise.
"Mayor" means the duly elected and acting Mayor, or in the Mayor's absence, the duly
appointed and/or elected Vice Mayor or Acting Mayor of the Issuer.
"Moody's" means Moody's Investors Service, a corporation organized and existing under the laws
of the State of Delaware, and its successors and assigns, and, if such corporation shall be dissolved or
4
liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed
to refer to any other nationally recognized securities rating agency designated by the Issuer.
"Note Payment Date" means any date on which principal of or interest on any Note is payable.
"Note Purchase Agreement" means the Note Purchase Agreement dated as of July 1, 2016,
between the Issuer and the Purchaser.
"Note Register" means the books for the registration, transfer and exchange of Notes kept at the
office of the Note Registrar.
"Note Registrar" means the State Treasurer and any successors or assigns.
"Note Resolution" means this resolution relating to the Notes.
"Notes" means the General Obligation Temporary Notes, Series 2016-2, authorized and issued by
the Issuer pursuant to this Note Resolution.
"Notice Address" means with respect to the following entities:
(a) To the Issuer at:
City of Salina, Kansas
Attn: City Clerk
300 West Ash
Salina, Kansas 67402
Fax: (785)309-5738
(b) To the Paying Agent at:
State Treasurer of the State of Kansas
Landon Office Building
900 Southwest Jackson, Suite 201
Topeka,Kansas 66612-1235
Fax: (785) 296-6976
( c) To the Purchaser:
The Bennington State Bank
2130 South Ohio Street
Salina, Kansas 67401
"Notice Representative" means:
(a) With respect to the Issuer, the Clerk.
(b) With respect to the Note Registrar and Paying Agent, the Director of Bond Services.
(c) With respect to the Purchaser, Darren Gragg, Senior Vice President/COO.
5
"Outstanding" means, when used with reference to the Notes, as of a particular date of
determination, all Notes theretofore authenticated and delivered, except the following Notes:
(a) Notes theretofore canceled by the Paying Agent or delivered to the Paying Agent for
cancellation;
(b) Notes deemed to be paid in accordance with the provisions of Article VII hereof; and
(c) Notes in exchange for or in lieu of which other Notes have been authenticated and
delivered hereunder.
"Owner" when used with respect to any Note means the Person in whose name such Note is
registered on the Note Register. Whenever consent of the Owners is required pursuant to the terms of this
Note Resolution, and the Owner of the Notes, as set forth on the Note Register, is Cede & Co., the term
Owner shall be deemed to be the Beneficial Owner of the Notes.
"Paying Agent" means the State Treasurer, and any successors and assigns.
"Permitted Investments" shall mean the investments hereinafter described, provided, however,
no moneys or funds shall be invested in a Derivative: (a) investments authorized by K.S.A. 12-1675 and
amendments thereto; (b) the municipal investment pool established pursuant to K.S.A. 12-1677a, and
amendments thereto; (c) direct obligations of the United States Government or any agency thereof; (d) the
Issuer's temporary notes issued pursuant to K.S.A. 10-123 and amendments thereto; (e) interest-bearing
time deposits in commercial banks or trust companies located in the county or counties in which the
Issuer is located which are insured by the Federal Deposit Insurance Corporation or collateralized by
securities described in (c); (f) obligations of the federal national mortgage association, federal home loan
banks, federal home loan mortgage corporation or government national mortgage association; (g)
repurchase agreements for securities described in (c) or (f); (h) investment agreements or other
obligations of a financial institution the obligations of which at the time of investment are rated in either
of the three highest rating categories by Moody's or Standard & Poor's; (i) investments and shares or
units of a money market fund or trust, the portfolio of which is comprised entirely of securities described
in (c) or (f); (j) receipts evidencing ownership interests in securities or portions thereof described in (c) or
(f); (k) municipal bonds or other obligations issued by any municipality of the State as defined in K.S.A.
10-1101 which are general obligations of the municipality issuing the same; or (I) bonds of any
municipality of the State as defined in K.S.A. 10-1101 which have been refunded in advance of their
maturity and are fully secured as to payment of principal and interest thereon by deposit in trust, under
escrow agreement with a bank, of securities described in (c) or (f), all as may be further restricted or
modified by amendments to applicable State law.
"Person" means any natural person, corporation, partnership, joint venture, association, firm,
joint-stock company, trust, unincorporated organization, or government or any agency or political
subdivision thereof or other public body.
"Purchase Price" means the amount set forth in the Note Purchase Agreement.
"Purchaser" means The Bennington State Bank, Salina, Kansas, the original purchaser of the
Notes, and any successors and assigns.
"Rebate Fund" means the Rebate Fund for General Obligation Temporary Notes, Series 2016-2
created pursuant to Section 501 hereof.
6
"Record Dates" for the interest payable on any Interest Payment Date means the fifteenth day
(whether or not a Business Day) of the calendar month next preceding such Interest Payment Date.
"Redemption Date" when used with respect to any Note to be redeemed means the date fixed for
the redemption of such Note pursuant to the terms of this Note Resolution.
"Redemption Price" when used with respect to any Note to be redeemed means the price at
which such Note is to be redeemed pursuant to the terms of this Note Resolution, including the applicable
redemption premium, if any, but excluding installments of interest whose Stated Maturity is on or before
the Redemption Date.
"Special Record Date" means the date fixed by the Paying Agent pursuant to Article II hereof
for the payment of Defaulted Interest.
"Standard & Poor's" or "S&P" means S&P Global Ratings, a division of S&P Global Inc., a
corporation organized and existing under the laws of the State of New York, and its successors and assigns,
and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, Standard & Poor's shall be deemed to refer to any other nationally recognized
securities rating agency designated by the Issuer.
"State" means the state of Kansas.
"State Treasurer" means the duly elected Treasurer or, in the Treasurer's absence, the duly
appointed Deputy Treasurer or acting Treasurer of the State.
"Stated Maturity" when used with respect to any Note or any installment of interest thereon
means the date specified in such Note and this Note Resolution as the fixed date on which the principal of
such Note or such installment of interest is due and payable.
"Substitute Improvements" means the substitute or additional improvements of the Issuer
described in Article Vhereof.
"Treasurer" means the duly appointed and/or elected Treasurer or, in the Treasurer's absence,
the duly appointed Deputy Treasurer or acting Treasurer of the Issuer.
"United States Government Obligations" means bonds, notes, certificates of indebtedness,
treasury bills or other securities constituting direct obligations of, or obligations the principal of and
interest on which are fully and unconditionally guaranteed as to full and timely payment by, the United
States of America, including evidences of a direct ownership interest in future interest or principal
payment on obligations issued by the United States of America (including the interest component of
obligations of the Resolution Funding Corporation), or securities which represent an undivided interest in
such obligations, which obligations are rated in the highest rating category by a nationally recognized
rating service and such obligations are held in a custodial account for the benefit of the Issuer.
ARTICLE II
AUTHORIZATION AND DETAILS OF THE NOTES
Section 201. Authorization of the Notes. There shall be issued and hereby are authorized
and directed to be issued the General Obligation Temporary Notes, Series 2016-2, of the Issuer in the
7
principal amount of $4,615,000, for the purpose of providing funds to: (a) pay a portion of the costs of
the Improvements; (b) pay interest on the Notes during the construction of the Improvements; and ( c) pay
Costs of Issuance.
Section 202. Description of the Notes. The Notes shall consist of fully registered notes in
Authorized Denominations, and shall be numbered in such manner as the Note Registrar shall determine.
All of the Notes shall be dated as of the Dated Date, shall become due in the amounts, on the Stated
Maturity, subject to redemption and payment prior to the Stated Maturity as provided in Article III
hereof, and shall bear interest at the rates per annum as follows:
Stated Maturity
September 1
2019
Principal
Amount
$4,615,000
Annual Rate
of Interest
1.000%
The Notes shall bear interest at the above specified rates (computed on the basis of a 360-day
year of twelve 30-day months) from the later of the Dated Date or the most recent Interest Payment Date
to which interest has been paid on the Interest Payment Dates in the manner set forth in Section 204
hereof.
Each of the Notes, as originally issued or issued upon transfer, exchange or substitution, shall be
printed in accordance with the format required by the Attorney General of the State and shall be
substantially in the form attached hereto as EXHIBIT A or as may be required by the Attorney General
pursuant to the Notice of Systems of Registration for Kansas Municipal Bonds, 2 Kan. Reg. 921 (1983),
in accordance with the Kansas Bond Registration Law, K.S.A. 10-620 et seq.
Section 203. Designation of Paying Agent and Note Registrar. The State Treasurer is
hereby designated as the Paying Agent for the payment of principal of and interest on the Note and Note
Registrar with respect to the registration, transfer and exchange of Notes. The Mayor of the Issuer is
hereby authorized and empowered to execute on behalf of the Issuer an agreement with the Note Registrar
and Paying Agent for the Notes.
The Issuer will at all times maintain a Paying Agent and Note Registrar meeting the qualifications
herein described for the performance of the duties hereunder. The Issuer reserves the right to appoint a
successor Paying Agent or Note Registrar by (a) filing with the Paying Agent or Note Registrar then
performing such function a certified copy of the proceedings giving notice of the termination of such
Paying Agent or Note Registrar and appointing a successor, and (b) causing notice of appointment of the
successor Paying Agent and Note Registrar to be given by first class mail to each Owner. No resignation
or removal of the Paying Agent or Note Registrar shall become effective until a successor has been
appointed and has accepted the duties of Paying Agent or Note Registrar.
Every Paying Agent or Note Registrar appointed hereunder shall at all times meet the
requirements ofK.S.A. 10-501 et seq. and K.S.A. 10-620 et seq., respectively.
Section 204. Method and Place of Payment of the Notes. The principal of, or Redemption
Price, if any, and interest on the Notes shall be payable in any coin or currency which, on the respective
dates of payment thereof, is legal tender for the payment of public and private debts.
The principal or Redemption Price of each Note shall be paid at Maturity to the Person in whose
name such Note is registered on the Note Register at the Maturity thereof, upon presentation and
surrender of such Note at the principal office of the Paying Agent. The interest payable on each Note on
any Interest Payment Date shall be paid to the Owner of such Note as shown on the Note Register at the
8
close of business on the Record Date for such interest (a) by check or draft mailed by the Paying Agent to
the address of such Owner shown on the Note Register or at such other address as is furnished to the
Paying Agent in writing by such Owner; or (b) in the case of an interest payment to any Owner of
$500,000 or more in aggregate principal amount of Notes, by electronic transfer to such Owner upon
written notice given to the Note Registrar by such Owner, not less than 15 days prior to the Record Date
for such interest, containing the electronic transfer instructions including the bank, ABA routing number
and account number to which such Owner wishes to have such transfer directed.
Notwithstanding the foregoing provisions of this Section, any Defaulted Interest with respect to
any Note shall cease to be payable to the Owner of such Note on the relevant Record Date and shall be
payable to the Owner in whose name such Note is registered at the close of business on the Special
Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as
hereinafter specified in this paragraph. The Issuer shall notify the Paying Agent in writing of the amount
of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment (which date
shall be at least 45 days after receipt of such notice by the Paying Agent) and shall deposit with the
Paying Agent at the time of such notice an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent
for such deposit prior to the date of the proposed payment. Following receipt of such funds the Paying
Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more
than 15 nor less than 10 days prior to the date of the proposed payment. The Paying Agent shall promptly
notify the Issuer of such Special Record Date and, in the name and at the expense of the Issuer, shall
cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, by first class mail, postage prepaid, to each Owner of a Note entitled to such notice at the
address of such Owner as it appears on the Note Register not less than 10 days prior to such Special
Record Date.
The Paying Agent shall keep a record of payment of principal and Redemption Price of and
interest on all Notes and at least annually shall forward a copy or summary of such records to the Issuer.
Section 205. Payments Due on Saturdays, Sundays and Holidays. In any case where a
Note Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need
not be made on such Note Payment Date but may be made on the next succeeding Business Day with the
same force and effect as if made on such Note Payment Date, and no interest shall accrue for the period
after such Note Payment Date.
Section 206. Registration, Transfer and Exchange of Notes. The Issuer covenants that, as
long as any of the Notes remain Outstanding, it will cause the Note Register to be kept at the office of the
Note Registrar as herein provided. Each Note when issued shall be registered in the name of the Owner
thereof on the Note Register.
Notes may be transferred and exchanged only on the Note Register as provided in this Section.
Upon surrender of any Note at the principal office of the Note Registrar, the Note Registrar shall transfer
or exchange such Note for a new Note or Notes in any Authorized Denomination of the same Stated
Maturity and in the same aggregate principal amount as the Note that was presented for transfer or
exchange.
The Notes shall be transferable by the Purchaser or subsequent transferee only upon prior
delivery to the Note Registrar and the Issuer an investment letter in substantially the form of Exhibit B
hereto, signed by the transferee, stating that (a) the transferee is either (1) an "accredited investor" as
defined in Rule 501 of Regulation D of the Securities and Exchange Commission (the "SEC") or (2) a
"qualified institutional buyer" as defined in Rule 144A under the Securities Act of 1933, as amended, (b)
9
the transferee is purchasing the Notes for its own account for investment and with no present intention of
selling or transferring the Notes, ( c) the transferee has been provided with or given access to all financial
and other information requested relating to the Notes or which it deems material in connection with the
purchase of Notes, (d) the transferee considers that it has such knowledge and experience in financial and
business matters, including the purchase of tax-exempt obligations, as to be independently capable of
evaluating the merits and risks of investment in the Notes and to make an informed decision with respect
thereto, and (e) the transferee understands that the Notes are subject to all terms and conditions of this
Note Resolution. The Notes shall be held by no more than five (5) persons at any time.
Notes presented for transfer or exchange shall be accompanied by a written instrument or
instruments of transfer or authorization for exchange, in a form and with guarantee of signature
satisfactory to the Note Registrar, duly executed by the Owner thereof or by the Owner's duly authorized
agent.
In all cases in which the privilege of transferring or exchanging Notes is exercised, the Note
Registrar shall authenticate and deliver Notes in accordance with the provisions of this Note Resolution.
The Issuer shall pay the fees and expenses of the Note Registrar for the registration, transfer and exchange
of Notes provided for by this Note Resolution and the cost of printing a reasonable supply of registered
note blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees
of the Note Registrar, are the responsibility of the Owners of the Notes. In the event any Owner fails to
provide a correct taxpayer identification number to the Paying Agent, the Paying Agent may make a
charge against such Owner sufficient to pay any governmental charge required to be paid as a result of
such failure. In compliance with Section 3406 of the Code, such amount may be deducted by the Paying
Agent from amounts otherwise payable to such Owner hereunder or under the Notes.
The Issuer and the Note Registrar shall not be required (a) to register the transfer or exchange of
any Note that has been called for redemption after notice of such redemption has been mailed by the
Paying Agent pursuant to Article III hereof and during the period of 15 days next preceding the date of
mailing of such notice of redemption; or (b) to register the transfer or exchange of any Note during a
period beginning at the opening of business on the day after receiving written notice from the Issuer of its
intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of
Defaulted Interest pursuant to this Article II.
The Issuer and the Paying Agent may deem and treat the Person in whose name any Note is
registered on the Note Register as the absolute Owner of such Note, whether such Note is overdue or not,
for the purpose of receiving payment of, or on account of, the principal or Redemption Price of and
interest on said Note and for all other purposes. All payments so made to any such Owner or upon the
Owner's order shall be valid and effective to satisfy and discharge the liability upon such Note to the
extent of the sum or sums so paid, and neither the Issuer nor the Paying Agent shall be affected by any
notice to the contrary.
At reasonable times and under reasonable regulations established by the Note Registrar, the Note
Register may be inspected and copied by the Owners (or a designated representative thereof) of 10% or
more in principal amount of the Notes then Outstanding or any designated representative of such Owners
whose authority is evidenced to the satisfaction of the Note Registrar.
Section 207. Execution, Registration, Authentication and Delivery of Notes. Each of the
Notes, including any Notes issued in exchange or as substitutions for the Notes initially delivered, shall
be executed for and on behalf of the Issuer by the manual or facsimile signature of the Mayor, attested by
the manual or facsimile signature of the Clerk and the seal of the Issuer shall be affixed thereto or
imprinted thereon. The Mayor and Clerk are hereby authorized and directed to prepare and execute the
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Notes in the manner herein specified, and to cause the Notes to be registered in the office of the Clerk,
which registration shall be evidenced by the manual or facsimile signature of the Clerk with the seal of
the Issuer affixed thereto or imprinted thereon. The Notes shall also be registered in the office of the State
Treasurer, which registration shall be evidenced by the manual or facsimile signature of the State
Treasurer with the seal of the State Treasurer affixed thereto or imprinted thereon. The Notes shall be
countersigned by the manual or facsimile signature of the Clerk and the seal of the Issuer shall be affixed
or imprinted adjacent thereto following registration of the Notes by the Treasurer of the State of Kansas.
In case any officer whose signature appears on any Notes ceases to be such officer before the delivery of
such Notes, such signature shall nevertheless be valid and sufficient for all purposes, as if such person had
remained in office until delivery. Any Note may be signed by such persons who at the actual time of the
execution of such Note are the proper officers to sign such Note although at the date of such Note such
persons may not have been such officers.
The Mayor and Clerk are hereby authorized and directed to prepare and execute the Notes as
herein specified, and when duly executed, to deliver the Notes to the Note Registrar for authentication.
The Notes shall have endorsed thereon a certificate of authentication substantially in the form
attached hereto as EXHIBIT A hereof, which shall be manually executed by an authorized officer or
employee of the Note Registrar, but it shall not be necessary that the same officer or employee sign the
certificate of authentication on all of the Notes that may be issued hereunder at any one time. No Note
shall be entitled to any security or benefit under this Note Resolution or be valid or obligatory for any
purpose unless and until such certificate of authentication has been duly executed by the Note Registrar.
Such executed certificate of authentication upon any Note shall be conclusive evidence that such Note has
been duly authenticated and delivered under this Note Resolution. Upon authentication, the Note
Registrar shall deliver the Notes to the Purchaser upon instructions of the Issuer or its representative.
Section 208. Mutilated, Lost, Stolen or Destroyed Notes. If (a) any mutilated Note is
surrendered to the Note Registrar or the Note Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (b) there is delivered to the Issuer and the Note Registrar such
security or indemnity as may be required by each of them, then, in the absence of notice to the Issuer or
the Note Registrar that such Note has been acquired by a bona fide purchaser, the Issuer shall execute
and, upon the Issuer's request, the Note Registrar shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Note, a new Note of the same Stated Maturity and of like
tenor and principal amount.
If any such mutilated, destroyed, lost or stolen Note has become or is about to become due and
payable, the Issuer, in its discretion, may pay such Note instead of issuing a new Note.
Upon the issuance of any new Note under this Section, the Issuer may require the payment by the
Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Paying Agent) connected
therewith.
Every new Note issued pursuant to this Section shall constitute a replacement of the prior
obligation of the Issuer, and shall be entitled to all the benefits of this Note Resolution equally and ratably
with all other Outstanding Notes.
Section 209. Cancellation and Destruction of Notes Upon Payment. All Notes that have
been paid or redeemed or that otherwise have been surrendered to the Paying Agent, either at or before
Maturity, shall be cancelled by the Paying Agent immediately upon the payment, redemption and
surrender thereof to the Paying Agent and subsequently destroyed in accordance with the customary
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practices of the Paying Agent. The Paying Agent shall execute a certificate in duplicate describing the
Notes so cancelled and destroyed and shall file an executed counterpart of such certificate with the Issuer.
Section 210. Nonpresentment of Notes. If any Note is not presented for payment when the
principal thereof becomes due at Maturity, if funds sufficient to pay such Note have been made available
to the Paying Agent all liability of the Issuer to the Owner thereof for the payment of such Note shall
forthwith cease, determine 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 Note,
who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part
under this Note Resolution or on, or with respect to, said Note. If any Note is not presented for payment
within four ( 4) years following the date when such Note becomes due at Maturity, the Paying Agent shall
repay, without liability for interest thereon, to the Issuer the funds theretofore held by it for payment of
such Note, and such Note shall, subject to the defense of any applicable statute of limitation, thereafter be
an unsecured obligation of the Issuer, and the Owner thereof shall be entitled to look only to the Issuer for
payment, and then only to the extent of the amount so repaid to it by the Paying Agent, and the Issuer
shall not be liable for any interest thereon and shall not be regarded as a trustee of such money.
Section 211. Sale of the Notes -Note Purchase Agreement. The execution of the Note
Purchase Agreement by the Mayor is hereby ratified and confirmed. Pursuant to the Note Purchase
Agreement, the Issuer agrees to sell the Notes to the Purchaser for the Purchase Price, upon the terms and
conditions set forth therein.
ARTICLE III
REDEMPTION OF NOTES
Section 301. Redemption by Issuer.
Optional Redemption. At the option of the Issuer, the Notes will be subject to redemption and
payment prior to maturity on August 1, 2017, and thereafter, as a whole or in part (selection of the amount
of Notes to be redeemed to be determined by the Issuer in such equitable manner as it may determine) at
any time, at the redemption price of 100% (expressed as a percentage of the principal amount), plus
accrued interest thereon to the Redemption Date.
Section 302. Selection of Notes to be Redeemed. Notes shall be redeemed only in an
Authorized Denomination. When less than all of the Notes are to be redeemed and paid prior to their
Stated Maturity, such Notes shall be redeemed in such manner as the Issuer shall determine. Notes of less
than a full Stated Maturity shall be selected by the Note Registrar in a minimum Authorized
Denomination of principal amount in such equitable manner as the Note Registrar may determine.
In the case of a partial redemption of Notes by lot when Notes of denominations greater than a
minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such
redemption each minimum Authorized Denomination of face value shall be treated as though it were a
separate Note of the denomination of a minimum Authorized Denomination. If it is determined that one
or more, but not all, of a minimum Authorized Denomination of face value represented by any Note is
selected for redemption, then upon notice of intention to redeem a minimum Authorized Denomination,
the Owner or the Owner's duly authorized agent shall forthwith present and surrender such Note to the
Note Registrar: (1) for payment of the Redemption Price and interest to the Redemption Date of a
minimum Authorized Denomination of face value called for redemption, and (2) for exchange, without
charge to the Owner thereof, for a new Note or Notes of the aggregate principal amount of the
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unredeemed portion of the principal amount of such Note. If the Owner of any such Note fails to present
such Note to the Paying Agent for payment and exchange as aforesaid, such Note shall, nevertheless,
become due and payable on the redemption date to the extent of a minimum Authorized Denomination of
face value called for redemption (and to that extent only).
Section 303. Notice and Effect of Call for Redemption. In the event the Issuer desires to
call the Notes for redemption prior to maturity, written notice of such intent shall be provided to the Note
Registrar in accordance with K.S.A. 10-129, as amended, not less than 45 days prior to the Redemption
Date. The Note Registrar shall call Notes for redemption and payment and shall give notice of such
redemption as herein provided upon receipt by the Note Registrar at least 45 days prior to the Redemption
Date of written instructions of the Issuer specifying the principal amount, Stated Maturities, Redemption
Date and Redemption Prices of the Notes to be called for redemption. The Paying Agent may in its
discretion waive such notice period so long as the notice requirements set forth in this Section are met.
Unless waived by any Owner of Notes to be redeemed, if the Issuer shall call any Notes for
redemption and payment prior to the Stated Maturity thereof, the Issuer shall give written notice of its
intention to call and pay said Notes to the Note Registrar, the State Treasurer and the Purchaser. In
addition, the Issuer shall cause the Note Registrar to give written notice of redemption to the Owners of
said Notes. Each of said written notices shall be deposited in the United States first class mail not less
than 30 days prior to the Redemption Date.
All official notices of redemption shall be dated and shall contain the following information:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Notes are to be redeemed, the identification (and, in the case
of partial redemption of any Notes, the respective principal amounts) of the Notes to be redeemed;
( d) a statement that on the Redemption Date the Redemption Price will become due and
payable upon each such Note or portion thereof called for redemption and that interest thereon shall cease
to accrue from and after the Redemption Date; and
(e) the place where such Notes are to be surrendered for payment of the Redemption Price,
which shall be the principal office of the Paying Agent.
The failure of any Owner to receive notice given as heretofore provided or an immaterial defect
therein shall not invalidate any redemption.
Prior to any Redemption Date, the Issuer shall deposit with the Paying Agent an amount of
money sufficient to pay the Redemption Price of all the Notes or portions of Notes that are to be
redeemed on such Redemption Date.
Official notice ofredemption having been given as aforesaid, the Notes or portions of Notes to be
redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein
specified, and from and after the Redemption Date (unless the Issuer defaults in the payment of the
Redemption Price) such Notes or portion of Notes shall cease to bear interest. Upon surrender of such
Notes for redemption in accordance with such notice, the Redemption Price of such Notes shall be paid
by the Paying Agent. Installments of interest due on or prior to the Redemption Date shall be payable as
herein provided for payment of interest. Upon surrender for any partial redemption of any Note, there
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shall be prepared for the Owner a new Note or Notes of the same Stated Maturity in the amount of the
unpaid principal as provided herein. All Notes that have been surrendered for redemption shall be
cancelled and destroyed by the Paying Agent as provided herein and shall not be reissued.
In addition to the foregoing notice, further notice may be given by the Issuer or the Note Registrar
on behalf of the Issuer as set out below, but no defect in said further notice nor any failure to give all or
any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if
official notice thereof is given as above prescribed:
(a) Each further notice ofredemption given hereunder shall contain the information required
above for an official notice of redemption plus ( 1) the date of issue of the Notes as originally issued; (2)
the rate of interest borne by each Note being redeemed; (3) the maturity date of each Note being
redeemed; and ( 4) any other descriptive information needed to identify accurately the Notes being
redeemed.
(b) Each further notice of redemption shall be sent at least one day before the mailing of
notice to Owners by first class, registered or certified mail or overnight delivery, as determined by the
Note Registrar, to all registered securities depositories then in the business of holding substantial amounts
of obligations of types comprising the Notes and to one or more national information services that
disseminate notices of redemption of obligations such as the Notes.
The Paying Agent is also directed to comply with any mandatory standards then in effect for
processing redemptions of municipal securities established by the State or the Securities and Exchange
Commission. Failure to comply with such standards shall not affect or invalidate the redemption of any
Note.
ARTICLE IV
SECURITY FOR NOTES
Section 401. Security for the Notes. The Notes shall be general obligations of the Issuer
payable as to both principal and interest from general obligation bonds of the Issuer and, if not so paid, from
ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible
property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of
the Issuer are hereby irrevocably pledged for the prompt payment of the principal of and interest on the
Notes as the same become due.
Section 402. Levy and Collection of Annual Tax. The governing body of the Issuer shall
annually make provision for the payment of principal of, premium, if any, and interest on the Notes as the
same become due, if necessary, by levying and collecting the necessary taxes upon all of the taxable
tangible property within the Issuer in the manner provided by law. .
The taxes referred to above shall be extended upon the tax rolls and shall be levied and collected
at the same time and in the same manner as the other ad valorem taxes of the Issuer are levied and
collected. The proceeds derived from said taxes shall be deposited in the Bond and Interest Fund, shall be
kept separate and apart from all other funds of the Issuer shall thereafter be deposited in the Debt Service
Account and shall be used solely for the payment of the principal of and interest on the Notes as and when
the same become due, and the fees and expenses of the Paying Agent.
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If at any time said taxes are not collected in time to pay the principal of or interest on the Notes
when due, the Treasurer is hereby authorized and directed to pay said principal or interest out of the
general funds of the Issuer and to reimburse said general funds for money so expended when said taxes
are collected.
ARTICLEV
ESTABLISHMENT OF FUNDS AND ACCOUNTS
DEPOSIT AND APPLICATION OF NOTE PROCEEDS
Section 501. Creation of Funds and Accounts. Simultaneously with the issuance of the
Notes, there shall be created within the Treasury of the Issuer the following funds and accounts:
(a) Improvement Fund for General Obligation Temporary Notes, Series 2016-2;
(b) Debt Service Account for General Obligation Temporary Notes, Series 2016-2; and
(c) Rebate Fund for General Obligation Temporary Notes, Series 2016-2.
The Funds and Accounts established herein shall be administered in accordance with the
provisions ofthis Note Resolution so long as the Notes are Outstanding.
Section 502. Deposit of Note Proceeds. The net proceeds received from the sale of the Notes
shall be deposited simultaneously with the delivery of the Notes as follows:
(a) All accrued interest received from the sale of the Notes, and $97,555.97, representing
interest on the Notes during the construction of the Improvements, shall be deposited in the Debt Service
Account.
(b) The remaining balance of the proceeds derived from the sale of the Notes shall be
deposited in the Improvement Fund.
Section 503. Application of Moneys in the Improvement Fund. Moneys in the
Improvement Fund shall be used for the sole purpose of: (a) paying the costs of the Improvements, in
accordance with the plans and specifications therefor approved by the governing body of the Issuer and
on file in the office of the Clerk, including any alterations in or amendments to said plans and
specifications deemed advisable and approved by the governing body of the Issuer; (b) paying Costs of
Issuance; and ( c) transferring any amounts to the Rebate Fund required by this Article V. Upon
completion of the Improvements, any surplus in the Improvement Fund shall be deposited in the Debt
Service Account.
Section 504. Substitution of Improvements; Reallocation of Proceeds.
(a) The Issuer may elect for any reason to substitute or add other public improvements to be
financed with proceeds of the Notes provided the following conditions are met: (1) the Substitute
Improvement and the issuance of general obligation bonds to pay the cost of the Substitute Improvement
has been duly authorized by the governing body of the Issuer in accordance with the Jaws of the State; (2)
a resolution authorizing the use of the proceeds of the Notes to pay the Financeable Costs of the
Substitute Improvement has been duly adopted by the governing body of the Issuer pursuant to this
Section, (3) the Attorney General of the State has approved the amendment made by such resolution to the
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transcript of proceedings for the Notes to include the Substitute Improvements; and (4) the use of the
proceeds of the Notes to pay the Financeable Cost of the Substitute Improvement will not adversely affect
the tax-exempt status of the Notes under State or federal law.
(b) The Issuer may reallocate expenditure of Note proceeds among all Improvements
financed by the Notes; provided the following conditions are met: (1) the reallocation is approved by the
governing body of the Issuer; (2) the reallocation shall not cause the proceeds of the Notes allocated to
any Improvement to exceed the Financeable Costs of the Improvement; and (3) the reallocation will not
adversely affect the tax-exempt status of the Notes under State or federal law.
Section 505. Application of Moneys in Debt Service Account. All amounts paid and
credited to the Debt Service Account shall be expended and used by the Issuer for the sole purpose of
paying the principal or Redemption Price of and interest on the Notes as and when the same become due
and the usual and customary fees and expenses of the Note Registrar and Paying Agent. The Treasurer is
authorized and directed to withdraw from the Debt Service Account sums sufficient to pay both principal
or Redemption Price of and interest on the Notes and the fees and expenses of the Note Registrar and
Paying Agent as and when the same become due, and to forward such sums to the Paying Agent, if other
than the Issuer, in a manner which ensures that the Paying Agent will receive immediately available funds
in such amounts on or before the Business Day immediately preceding the dates when such principal,
interest and fees of the Note Registrar and Paying Agent will become due. If, through the lapse of time or
otherwise, the Owners of Notes are no longer entitled to enforce payment of the Notes or the interest
thereon, the Paying Agent shall return said funds to the Issuer. All moneys deposited with the Paying
Agent shall be deemed to be deposited in accordance with and subject to all of the provisions contained in
this Note Resolution and shall be held in trust by the Paying Agent for the benefit of the Owners of the
Notes entitled to payment from such moneys.
Any moneys or investments remaining in the Debt Service Account after the retirement of the
indebtedness for which the Notes were issued shall be transferred and paid into the Bond and Interest
Fund.
Section 506. Application of Moneys in the Rebate Fund.
(a) There shall be deposited in the Rebate Fund such amounts as are required to be deposited
therein pursuant to the Federal Tax Certificate. All money at any time deposited in the Rebate Fund shall
be held in trust, to the extent required to satisfy the Rebate Amount (as defined in the Federal Tax
Certificate), for payment to the United States of America, and neither the Issuer nor the Owner of any
Notes shall have any rights in or claim to such money. All amounts deposited into or on deposit in the
Rebate Fund shall be governed by this Section and the Federal Tax Certificate.
(b) The Issuer shall periodically determine the arbitrage rebate, if any, under Code § 148(f)
of the Code in accordance with the Federal Tax Certificate, and the Issuer shall make payments to the
United States of America at the times and in the amounts determined under the Federal Tax Certificate.
Any moneys remaining in the Rebate Fund after redemption and payment of all of the Notes and payment
and satisfaction of any Rebate Amount, or provision made therefor, shall be deposited into the Bond and
Interest Fund.
(c) Notwithstanding any other provision of this Note Resolution, including in particular
Article VII hereof, the obligation to pay arbitrage rebate to the United States of America and to comply
with all other requirements of this Section and the Federal Tax Certificate shall survive the defeasance or
payment in full of the Notes.
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Section 507. Deposits and Investment of Moneys. Moneys in each of the Funds and
Accounts shall be deposited in accordance with laws of the State, in a bank, savings and loan association
or savings bank organized under the laws of the State, any other state or the United States: (a) which has
a main or branch office located in the Issuer; or (b) if no such entity has a main or branch office located in
the Issuer, with such an entity that has a main or branch office located in the county or counties in which
the Issuer is located. All such depositaries shall be members of the Federal Deposit Insurance
Corporation, or otherwise as permitted by State law. All such deposits shall be invested in Permitted
Investments as set forth in this Article or shall be adequately secured as provided by the laws of the State.
All moneys held in the Funds and Accounts shall be kept separate and apart from all other funds of the
Issuer so that there shall be no commingling with any other funds of the Issuer.
Moneys held in any Fund or Account may be invested in accordance with this Note Resolution
and the Federal Tax Certificate in Permitted Investments; provided, however, that no such investment
shall be made for a period extending longer than to the date when the moneys invested may be needed for
the purpose for which such fund was created. All earnings on any investments held in any Fund or
Account shall accrue to and become a part of such Fund or Account; provided that, during the period of
construction of the Improvements, earnings on the investment of such funds may be credited to the Debt
Service Account.
ARTICLE VI
DEFAULT AND REMEDIES
Section 601. Remedies. The provisions of the Note Resolution, including the covenants and
agreements herein contained, shall constitute a contract between the Issuer and the Owners of the Notes.
If an Event of Default occurs and shall be continuing, the Owner or Owners of not less than 10% in
principal amount of the Notes at the time Outstanding shall have the right for the equal benefit and
protection of all Owners of Notes similarly situated:
(a) by mandamus or other suit, action or proceedings at law or in equity to enforce the rights
of such Owner or Owners against the Issuer and its officers, agents and employees, and to require and
compel duties and obligations required by the provisions of the Note Resolution or by the Constitution
and laws of the State;
(b) by suit, action or other proceedings in equity or at law to require the Issuer, its officers,
agents and employees to account as if they were the trustees of an express trust; and
(c) by suit, action or other proceedings in equity or at law to enjoin any acts or things which
may be unlawful or in violation of the rights of the Owners of the Notes.
Section 602. Limitation on Rights of Owners. The covenants and agreements of the Issuer
contained herein and in the Notes shall be for the equal benefit, protection, and security of the Owners of
any or all of the Notes, all of which Notes shall be of equal rank and without preference or priority of one
Note over any other Note in the application of the funds herein pledged to the payment of the principal of
and the interest on the Notes, or otherwise, except as to rate of interest, date of maturity and right of prior
redemption as provided in this Note Resolution. No one or more Owners secured hereby shall have any
right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and
provided for herein, or to enforce any right hereunder, except in the manner herein provided, and all
proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all
Outstanding Notes.
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Section 603. Remedies Cumulative. No remedy conferred herein upon the Owners is
intended to be exclusive of any other remedy, but each such remedy shall be cumulative and in addition to
every other remedy and may be exercised without exhausting and without regard to any other remedy
conferred herein. No waiver of any default or breach of duty or contract by the Owner of any Note shall
extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or
remedies thereon. No delay or omission of any Owner to exercise any right or power accruing upon any
default shall impair any such right or power or shall be construed to be a waiver of any such default or
acquiescence therein. Every substantive right and every remedy conferred upon the Owners of the Notes
by this Note Resolution may be enforced and exercised from time to time and as often as may be deemed
expedient. If action or proceedings taken by any Owner on account of any default or to enforce any right
or exercise any remedy has been discontinued or abandoned for any reason, or shall have been determined
adversely to such Owner, then, and in every such case, the Issuer and the Owners of the Notes shall be
restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and
duties of the Owners shall continue as if no such suit, action or other proceedings had been brought
or taken.
ARTICLE VII
DEFEASANCE
Section 701. Defeasance. When any or all of the Notes, redemption premium, if any, or
scheduled interest payments thereon have been paid and discharged, then the requirements contained in
this Note Resolution and the pledge of the Issuer's faith and credit hereunder and all other rights granted
hereby shall terminate with respect to the Notes or scheduled interest payments thereon so paid and
discharged. Notes, redemption premium, if any, or scheduled interest payments thereon shall be deemed
to have been paid and discharged within the meaning of this Note Resolution if there has been deposited
with the Paying Agent, or other commercial bank or trust company located in the State and having full
trust powers, at or prior to the Stated Maturity or Redemption Date of said Notes or the interest payments
thereon, in trust for and irrevocably appropriated thereto, moneys and/or Defeasance Obligations which,
together with the interest to be earned on any such Defeasance Obligations, will be sufficient for the
payment of the principal of or Redemption Price of said Notes and/or interest accrued to the Stated
Maturity or Redemption Date, or if default in such payment has occurred on such date, then to the date of
the tender of such payments. If the amount to be so deposited is based on the Redemption Price of any
Notes, no such satisfaction shall occur until (a) the Issuer has elected to redeem such Notes, and (b) either
notice of such redemption has been given, or the Issuer has given irrevocable instructions, or shall have
provided for an escrow agent to give irrevocable instructions, to the Note Registrar to give such notice of
redemption in compliance with Article III. Any money and Defeasance Obligations that at any time shall
be deposited with the Paying Agent or other commercial bank or trust company by or on behalf of the
Issuer, for the purpose of paying and discharging any of the Notes, shall be and are hereby assigned,
transferred and set over to the Paying Agent or other bank or trust company in trust for the respective
Owners of the Notes, and such moneys shall be and are hereby irrevocably appropriated to the payment
and discharge thereof. All money and Defeasance Obligations deposited with the Paying Agent or such
bank or trust company shall be deemed to be deposited in accordance with and subject to all of the
provisions of this Note Resolution.
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ARTICLE VIII
TAX COVENANTS
Section 801. General Covenants. The Issuer covenants and agrees that: it will comply with
(a) all applicable provisions of the Code necessary to maintain the exclusion from gross income for
federal income tax purposes of the interest on the Notes; and (b) all provisions and requirements of the
Federal Tax Certificate. The Mayor, Finance Director and Clerk are hereby authorized and directed to
execute the Federal Tax Certificate in a form approved by Bond Counsel, for and on behalf of and as the
act and deed of the Issuer. The Issuer will, in addition, adopt such other ordinances or resolutions and
take such other actions as may be necessary to comply with the Code and with all other applicable future
laws, regulations, published rulings and judicial decisions, in order to ensure that the interest on the Notes
will remain excluded from federal gross income, to the extent any such actions can be taken by the Issuer.
Section 802. Survival of Covenants. The covenants contained in this Article and in the
Federal Tax Certificate shall remain in full force and effect notwithstanding the defeasance of the Notes
pursuant to Article WI hereof or any other provision of this Note Resolution until such time as is set forth
in the Federal Tax Certificate.
ARTICLE IX
NO OFFERING DOCUMENTS; CONTINUING DISCLOSURE
Section 901. Disclosure. The Issuer has not prepared an official statement or other offering
document relating to the Notes and is relying on exemption to provide and disseminate such information
contained in Section ( d)(l) of the SEC Rule. In furtherance of such exemption, the Issuer certifies that:
(a) the Purchaser has certified that the Notes are being issued in denominations of $100,000 or more; and
(b) the Notes are being sold to no more than thirty-five persons, each of whom the Purchaser reasonably
believes: (1) has the knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of the prospective investment and (2) is not purchasing for more than one
account or with a view to distributing the Notes.
ARTICLEX
MISCELLANEOUS PROVISIONS
Section 1001. Annual Audit. Annually, promptly after the end of the Fiscal Year, the Issuer
will cause an audit to be made of the financial statements of the Issuer for the preceding Fiscal Year by an
Independent Accountant. Within 30 days after the completion of each such audit, a copy thereof shall be
filed in the office of the Clerk, and a duplicate copy of the audit shall be mailed to the Purchaser. Such
audit shall at all times during the usual business hours be open to the examination and inspection by any
taxpayer, any Owner of any of the Notes, or by anyone acting for or on behalf of such taxpayer or Owner.
Upon payment of the reasonable cost of preparing and mailing the same, a copy of any annual audit will,
upon request, be sent to any Owner or prospective Owner. As soon as possible after the completion of the
annual audit, the governing body of the Issuer shall review such audit, and if the audit discloses that
proper provision has not been made for all of the requirements of this Note Resolution, the Issuer shall
promptly cure such deficiency.
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Section 1002. Amendments. The rights and duties of the Issuer and the Owners, and the terms
and provisions of the Notes or of this Note Resolution, may be amended or modified at any time in any
respect by resolution of the Issuer with the written consent of the Owners of not less than a majority in
principal amount of the Notes then Outstanding, such consent to be evidenced by an instrument or
instruments executed by such Owners and duly acknowledged or proved in the manner of a deed to be
recorded, and such instrument or instruments shall be filed with the Clerk, but no such modification or
alteration shall:
(a) extend the maturity of any payment of principal or interest due upon any Note;
(b) effect a reduction in the amount which the Issuer is required to pay as principal of or
interest on any Note;
(c) permit preference or priority of any Note over any other Note; or
( d) reduce the percentage in principal amount of Notes required for the written consent to
any modification or alteration of the provisions of this Note Resolution.
Any provision of the Notes or of this Note Resolution may, however, be amended or modified by
resolution duly adopted by the governing body of the Issuer at any time in any legal respect with the
written consent of the Owners of all of the Notes at the time Outstanding.
Without notice to or the consent of any Owners, the Issuer may amend or supplement this Note
Resolution for the purpose of curing any formal defect, omission, inconsistency or ambiguity herein, to
grant to or confer upon the Owners any additional rights, remedies, powers or authority that may lawfully
be granted to or conferred upon the Owners, to more precisely identify the Improvements, to reallocate
proceeds of the Notes among Improvements, to provide for Substitute Improvements, to conform this
Note Resolution to the Code or future applicable federal law concerning tax-exempt obligations, or in
connection with any other change therein which is not materially adverse to the interests of the Owners.
Every amendment or modification of the provisions of the Notes or of this Note Resolution, to
which the written consent of the Owners is given, as above provided, shall be expressed in a resolution
adopted by the governing body of the Issuer amending or supplementing the provisions of this Note
Resolution and shall be deemed to be a part of this Note Resolution. A certified copy of every such
amendatory or supplemental resolution, if any, and a certified copy of this Note Resolution shall always
be kept on file in the office of the Clerk, and shall be made available for inspection by the Owner of any
Note or a prospective purchaser or owner of any Note authorized by this Note Resolution, and upon
payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or
supplemental resolution or of this Note Resolution will be sent by the Clerk to any such Owner or
prospective Owner.
Any and all modifications made in the manner hereinabove provided shall not become effective
until there has been filed with the Clerk a copy of the resolution of the Issuer hereinabove provided for,
duly certified, as well as proof of any required consent to such modification by the Owners of the Notes
then Outstanding. It shall not be necessary to note on any of the Outstanding Notes any reference to such
amendment or modification.
The Issuer shall furnish to the Paying Agent a copy of any amendment to the Notes or this Note
Resolution which affects the duties or obligations of the Paying Agent under this Note Resolution.
20
Section 1003. Notices, Consents and Other Instruments by Owners. Any notice, consent,
request, direction, approval or other instrument to be signed and executed by the Owners may be in any
number of concurrent writings of similar tenor and may be signed or executed by such Owners in person
or by agent appointed in writing. Proof of the execution of any such instrument or of the writing
appointing any such agent and of the ownership of Notes, if made in the following manner, shall be
sufficient for any of the purposes of this Note Resolution, and shall be conclusive in favor of the Issuer
and the Paying Agent with regard to any action taken, suffered or omitted under any such instrument,
namely:
(a) The fact and date of the execution by any person of any such instrument may be proved
by a certificate of any officer in any jurisdiction who by law has power to take acknowledgments within
such jurisdiction that the person signing such instrument acknowledged before such officer the execution
thereof, or by affidavit of any witness to such execution.
(b) The fact of ownership of Notes, the amount or amounts, numbers and other identification
of Notes, and the date of holding the same shall be proved by the Note Register.
In determining whether the Owners of the requisite principal amount of Notes Outstanding have
given any request, demand, authorization, direction, notice, consent or waiver under this Note Resolution,
Notes owned by the Issuer shall be disregarded and deemed not to be Outstanding under this Note
Resolution, except that, in determining whether the Owners shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Notes which the Owners know
to be so owned shall be so disregarded. Notwithstanding the foregoing, Notes so owned which have been
pledged in good faith shall not be disregarded as aforesaid if the pledgee establishes to the satisfaction of
the Owners the pledgee's right so to act with respect to such Notes and that the pledgee is not the Issuer.
Section 1004. Notices. Any notice, request, complaint, demand or other communication required
or desired to be given or filed under this Note Resolution shall be in writing, given to the Notice
Representative at the Notice Address and shall be deemed duly given or filed if the same shall be: (a) duly
mailed by registered or certified mail, postage prepaid; or (b) communicated via fax, with electronic or
telephonic confirmation of receipt. Copies of such notices shall also be given to the Paying Agent. The
Issuer, the Paying Agent and the Purchaser may from time to time designate, by notice given hereunder to
the others of such parties, such other address to which subsequent notices, certificates or other
communications shall be sent.
All notices given by: (a) certified or registered mail as aforesaid shall be deemed duly given as of
the date they are so mailed; (b) fax as aforesaid shall be deemed duly given as of the date of confirmation of
receipt. If, because of the temporary or permanent suspension of regular mail service or for any other reason,
it is impossible or impractical to mail any notice in the manner herein provided, then such other form of
notice as shall be made with the approval of the Paying Agent shall constitute a sufficient notice.
Section 1005. Electronic Transactions. The issuance of the Notes and the transactions related
thereto and described herein may be conducted and documents may be stored by electronic means.
Section 1006. Further Authority. The officers and officials of the Issuer, including the Mayor
and Clerk, are hereby authorized and directed to execute all documents and take such actions as they may
deem necessary or advisable in order to carry out and perform the purposes ofthis Note Resolution and to
make ministerial alterations, changes or additions in the foregoing agreements, statements, instruments
and other documents herein approved, authorized and confirmed which they may approve, and the
execution or taking of such action shall be conclusive evidence of such necessity or advisability.
21
Section 1007. Severability. If any section or other part of this Note Resolution, whether large
or small, is for any reason held invalid, the invalidity thereof shall not affect the validity of the other
provisions of this Note Resolution.
Section 1008. Governing Law. This Note Resolution shall be governed exclusively by and
construed in accordance with the applicable laws of the State.
Section 1009. Effective Date. This Note Resolution shall take effect and be in full force from
and after its passage by the governing body of the Issuer.
22
-:;"J'. .:.:. • •. -.•• t< ,·;···· -,.·
(
(Signature Page to Resolution-Notes)
REGISTERED
NUMBER
EXHIBIT A
(FORM OF NOTES)
REGISTERED
$
THIS NOTE OR ANY PORTION HEREOF MAY BE TRANSFERRED ONLY (1)
TO AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501 OF
REGULATION D OF THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION AND (2) IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS SET FORTH IN THE NOTE RESOLUTION.
Interest
Rate: 1.000%
UNITED STATES OF AMERICA
STATE OF KANSAS
COUNTY OF SALINE
CITY OF SALINA
GENERAL OBLIGATION TEMPORARY NOTE
SERIES 2016-2
Maturity
Date: September 1, 2019
REGISTERED OWNER:
PRINCIPAL AMOUNT:
Dated
Date: July 20, 2016
KNOW ALL PERSONS BY THESE PRESENTS: That the City of Salina, in the County of
Saline, State of Kansas (the "Issuer"), for value received, hereby acknowledges itself to be indebted and
promises to pay to the Registered Owner shown above, or registered assigns, but solely from the source
and in the manner herein specified, the Principal Amount shown above on the Maturity Date shown
above, unless called for redemption prior to said Maturity Date, and to pay interest thereon at the Interest
Rate per annum shown above (computed on the basis of a 360-day year of twelve 30-day months), from
the Dated Date shown above, or from the most recent date to which interest has been paid or duly
provided for, payable September 1 of each year, commencing September 1, 2017 (the "Interest Payment
Dates"), until the Principal Amount has been paid.
Method and Place of Payment. The principal or redemption price of this Note shall be paid at
maturity or upon earlier redemption to the person in whose name this Note is registered at the maturity or
redemption date thereof, upon presentation and surrender of this Note at the principal office of the
Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Note Registrar"). The
interest payable on this Note on any Interest Payment Date shall be paid to the person in whose name this
Note is registered on the registration books maintained by the Note Registrar at the close of business on
the Record Date(s) for such interest, which shall be the 15th day (whether or not a business day) of the
A-1
calendar month next preceding the Interest Payment Date. Such interest shall be payable (a) by check or
draft mailed by the Paying Agent to the address of such Registered Owner shown on the Note Register or
at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in
the case of an interest payment to any Owner of $500,000 or more in aggregate principal amount of
Notes, by electronic transfer to such Owner upon written notice given to the Note Registrar by such
Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the
electronic transfer instructions including the bank, ABA routing number and account number to which
such Registered Owner wishes to have such transfer directed. The principal or redemption price of and
interest on the Notes shall be payable in any coin or currency that, on the respective dates of payment
thereof, is legal tender for the payment of public and private debts. Interest not punctually paid will be
paid in the manner established in the within defined Note Resolution.
Definitions. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the hereinafter defined Note Resolution.
Authorization of Notes. This Note is one of an authorized series of Notes of the Issuer
designated "General Obligation Temporary Notes, Series 2016-2," aggregating the principal amount of
$4,615,000 (the "Notes") issued for the purposes set forth in the Resolution of the Issuer authorizing the
issuance of the Notes (the "Note Resolution"). The Notes are issued by the authority of and in full
compliance with the provisions, restrictions and limitations of the Constitution and laws of the State of
Kansas, including K.S.A. 10-123, Charter Ordinance No. 39 of the Issuer and Article 12, Section 5 of the
Constitution of the State of Kansas, as amended, and all other provisions of the laws of the State of
Kansas applicable thereto.
General Obligations. The Notes constitute general obligations of the Issuer payable as to both
principal and interest from the proceeds of general obligation bonds of the Issuer and, if not so paid, from
ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible
property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources
of the Issuer are hereby pledged for the payment of the principal of and interest on this Note and the issue
of which it is a part as the same respectively become due.
Redemption Prior to Maturity. The Notes are subject to redemption prior to maturity as set
forth in the Note Resolution.
Transfer and Exchange. This Note may be transferred or exchanged, as provided in the Note
Resolution, only on the Note Register kept for that purpose at the principal office of the Note Registrar,
upon surrender of this Note together with a written instrument of transfer or authorization for exchange
satisfactory to the Note Registrar duly executed by the Registered Owner or the Registered Owner's duly
authorized agent, and thereupon a new Note or Notes 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 Note Resolution and upon payment of the charges therein prescribed. The Issuer shall
pay all costs incurred in connection with the issuance, payment and initial registration of the Notes and
the cost of a reasonable supply of note blanks. The Issuer and the Paying Agent may deem and treat the
person in whose name this Note is registered on the Note 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. The Notes are issued in fully registered form in Authorized
Denominations.
THIS NOTE OR ANY PORTION HEREOF MAY BE TRANSFERRED ONLY (1) TO AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501 OF REGULATION D OF THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION AND (2) IN ACCORDANCE WITH THE
A-2
TRANSFER RESTRICTIONS SET FORTH IN THE NOTE RESOLUTION.
Authentication. This Note shall not be valid or become obligatory for any purpose or be entitled
to any security or benefit under the hereinafter defined Note Resolution until the Certificate of
Authentication and Registration hereon shall have been lawfully executed by the Note Registrar.
IT IS HEREBY DECLARED AND CERTIFIED that all acts, conditions, and things required
to be done and to exist precedent to and in the issuance of this Note have been properly done and
performed and do exist in due and regular form and manner as required by the Constitution and laws of
the State of Kansas, and that the total indebtedness of the Issuer, including this series of notes, does not
exceed any constitutional or statutory limitation.
IN WITNESS WHEREOF, the Issuer has caused this Note to be executed by the manual or
facsimile signature of its Mayor and attested by the manual or facsimile signature of its Clerk, and its seal
to be affixed hereto or imprinted hereon.
CITY OF SALINA, KANSAS
(Facsimile Seal) By: ~~~~~(~m=a=n=u=a=l~o~r~fa~c~s=im==il=e~)~~~~
Mayor
ATTEST:
By: (manual or facsimile)
Clerk
This General Obligation Temporary Note shall not be negotiable unless and until countersigned
below following registration by the Treasurer of the State of Kansas.
(Facsimile Seal) (manual or facsimile)
Clerk
A-3
CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This Note is one of a series of General Obligation Temporary Notes, Series 2016-2, of the City of
Salina, Kansas, described in the within-mentioned Note Resolution.
Registration Date __________ _
Registration Number: _________ _
Office of the State Treasurer,
Topeka, Kansas,
as Note Registrar and Paying Agent
CERTIFICATE OF CLERK
STATE OF KANSAS )
) SS.
COUNTY OF SALINE )
The undersigned, Clerk of the City of Salina, Kansas, does hereby certify that the within Note has
been duly registered in my office according to law as of July 20, 2016.
WITNESS my hand and official seal.
(Facsimile Seal) (facsimile)
Clerk
CERTIFICATE OF STATE TREASURER
OFFICE OF THE TREASURER, STATE OF KANSAS
RON ESTES, Treasurer of the State of Kansas, does hereby certify that a transcript of the
proceedings leading up to the issuance of this Note has been filed in the office of the State Treasurer, and
that this Note was registered in such office according to law on ___________ _
WITNESS my hand and official seal.
(Seal) By:
Treasurer of the State of Kansas
A-4
NOTE ASSIGNMENT
FOR VALUE RECENED, the undersigned do( es) hereby sell, assign and transfer to
(Name and Address)
(Social Security or Taxpayer Identification No.)
the Note to which this assignment is affixed in the outstanding principal amount of $ -----standing in the name of the undersigned on the books of the Note Registrar. The undersigned do( es)
hereby irrevocably constitute and appoint as agent to transfer said Note on the
books of said Note Registrar with full power of substitution in the premises.
Name
Social Security or
Taxpayer Identification No.
Signature (Sign here exactly as name(s)
appear on the face of Certificate)
Signature guarantee:
LEGAL OPINION
The following is a true and correct copy of the approving legal opinion of Gilmore & Bell, P.C.,
Bond Counsel, which was dated and issued as of the date of original issuance and delivery of such Notes:
GILMORE & BELL, P.C.
Attorneys at Law
2405 Grand Boulevard
Suite 1100
Kansas City, Missouri 64108
(PRINTED LEGAL OPINION)
A-5
EXHIBITB
TO NOTE RESOLUTION
FORM OF REPRESENTATION LETTER
City of Salina, Kansas
Salina, Kansas
Treasurer of the State of Kansas,
as Note Registrar
Topeka, Kansas
[date]
Re: City of Salina, Kansas, General Obligation Temporary Notes, Series 2016-2
Ladies and Gentlemen:
The undersigned is the transferee of$ of the notes described above (the "Notes") issued by
the City of Salina, Kansas (the "Issuer") pursuant to a Note Resolution adopted by the Issuer on July 11,
2016 (the "Note Resolution").
The undersigned hereby represents, acknowledges and covenants as follows in connection with the
purchase of the Notes:
1. In purchasing the Notes, the undersigned is relying solely on information provided by the Issuer and
on statements, certifications, covenants, warranties and representations of the Issuer, and on the
undersigned's own knowledge and investigation of the facts and circumstances relating to the
purchase of the Notes.
2. The undersigned is an "accredited investor" within the meaning of Regulation D of the Securities and
Exchange Commission. The undersigned has sufficient knowledge and experience in financial and
business matters, including the purchase and ownership of tax-exempt obligations, to be capable of
evaluating the merits and risks of an investment in the Notes. The undersigned has had an
opportunity to obtain and has received such information and materials from the Issuer as the
undersigned considers necessary to evaluate the merits and risks involved in the purchase of the
Notes.
3. The undersigned has been advised that the Notes (a) have not been rated by any rating service, (b) are
not being registered under the Securities Act of 1933 and are not being registered or otherwise
qualified for sale under the "Blue Sky" laws and regulations of any state, ( c) will not be listed on any
stock or other securities exchange, (d) will not be readily marketable and (e) are subject to provisions
regarding restrictions on transfer set forth in the Note Resolution.
4. The undersigned is purchasing the Notes for the undersigned's own account and not with a view to
other resale or other distribution thereof provided, however, that the undersigned may transfer the
Notes in accordance with the provisions of the Note Resolution and applicable law.
B-1
Sincerely yours,
[TRANSFEREE]
By: _____________ _
Name: ______________ _
Date: ______________ _
B-2
TRANSCRIPT CERTIFICATE
$4,615,000
CITY OF SALINA, KANSAS
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
DATED JULY 20, 2016
The undersigned Vice-Mayor and Clerk of the City of Salina, Kansas (the "Issuer"), do hereby
make this certificate for inclusion in the transcript of and as a part of the proceedings authorizing and
providing for the issuance of the above described notes (the "Notes"); and do hereby certify as of July 11,
2016, as follows:
1. Meaning of Words and Terms. Capitalized words and terms used herein, unless
otherwise defined herein or the context requires otherwise, shall have the same meanings ascribed to such
words and terms in the hereinafter defined Note Resolution authorizing the Notes.
2. Organization. The Issuer is a legally constituted city of the first class organized and
existing under the laws of the State of Kansas.
3. Transcript of Proceedings. The transcript of proceedings (the "Transcript") relating to
the authorization and issuance of the Notes is to the best of our knowledge, information and belief full
and complete; none of such proceedings have been modified, amended or repealed, except as might be
shown in the Transcript, and the facts stated in the Transcript still exist. In each and every instance where
copies appear in the Transcript, such copies are true and correct duplicates of the original instruments now
on file with the Clerk.
4. Newspaper. The Salina Journal was the official newspaper of the Issuer at all times
during these proceedings.
5. Meetings. All of the meetings of the governing body of the Issuer at which action was
taken as shown in the Transcript were either regular meetings or duly adjourned regular meetings or
special meetings duly called and held in accordance with law and the ordinances and rules of the Issuer.
6. Incumbency of Officers. The following named persons were and are the duly qualified
and acting officers of the Issuer at and during all the times when action was taken as indicated in the
Transcript as follows:
Name
Kaye Crawford
Karl Ryan
Randall Hardy
Trent Davis
Karl Ryan
Jon Blanchard
Shandi Wicks
Title
Mayor
Vice-Mayor
Commissioner
Commissioner
Commissioner
Commissioner
Clerk
Term of Office
April 18, 2016 to Present
April 18, 2016 to Present
April 15, 2013 to Present
September 8, 2014 to Present
April 20, 2015 to Present
April 18, 2016 to Present
March 10, 2014 to Present
Officers as of February 16, 206 (Charter Ordinance No. 39)
Name
Jon Blanchard
Kaye Crawford
Randall Hardy
Trent Davis
Karl Ryan
Shandi Wicks
Title
Mayor
Commissioner
Commissioner
Commissioner
Commissioner
Clerk
7. Execution of Notes. The Notes have been executed with manual or facsimile signatures;
and the manual or facsimile signatures appearing on the face of the Notes are manual or facsimiles of the
true and genuine signatures of the Vice-Mayor and Clerk of the Issuer. Each signature has been duly filed
in the office of the Secretary of State of Kansas pursuant to K.S.A. 75-4001 et seq. A facsimile of the seal
of the Issuer is affixed to or imprinted on each of the Notes and on the reverse side of each of the Notes at
the place where the Clerk has executed by facsimile signature the Certificate of Registration; and each
Notes bears a Certificate of Registration evidencing the fact that it has been registered in the office of the
Clerk. A true impression of the seal is set forth adjacent to the signature of the Clerk below. The
specimen note included in the Transcript is in the form adopted by the governing body of the Issuer for
the Notes.
8. Authorization of Notes. The Notes are being issued pursuant to Resolution No. 16-7382
(the "Note Resolution") of the Issuer pursuant to K.S.A. 10-123 for the purpose of paying a portion of the
costs of certain public improvements (the "Improvements") authorized by the governing body of the
Issuer pursuant to Charter Ordinance No. 39 of the Issuer and Article 12, Section 5 of the Constitution of
the State of Kansas, as amended, and all other applicable provisions of the laws of the State of Kansas.
· The total principal amount of the Notes does not exceed the cost of the Improvements for which
the Notes are issued.
The interest rates on the Notes on the date of the sale of the Notes were within the maximum
legal limit for interest rates under K.S.A. 10-1009, as amended.
9. Indebtedness. The currently outstanding applicable indebtedness of the Issuer, including
the Notes, does not exceed any applicable constitutional or statutory limitations. A schedule of general
obligation indebtedness is attached hereto as Exhibit A and made a part hereof by reference as though
fully set out herein.
10. Valuation. The total assessed valuation of the taxable tangible property within the Issuer
for the year 2015 was $463,030,260.
11. Non-litigation. There is no controversy, suit or other proceedings of any kind pending or
threatened wherein or whereby any question is raised or may be raised, questioning, disputing or affecting
in any way: (a) the legal organization of the Issuer or its boundaries; (b) the right or title of any of its
officers to their respective offices; ( c) the legality of any official act shown to have been done in the
Transcript; ( d) the constitutionality or validity of the indebtedness represented by the Notes shown to be
authorized in the Transcript; ( e) the validity of the Notes, or any of the proceedings had in relation to the
authorization, issuance or sale thereof; or (f) the levy and collection of a tax to pay the principal of and
interest on the Notes.
2
EXHIBIT A
SCHEDULE OF OUTSTANDING GENERAL OBLIGATION INDEBTEDNESS
(as of July 20, 2016)
General Obligation Bonds:
Date Amount Final Amount . Issued Series Purpose of Issue Maturit~ Outstanding
07-15-06 2006-B Internal Improvements $885,000 10-01-21 $ 255,000
06-15-07 2007-A Internal Improvements 6,545,000 10-01-27 3,645,000
07-15-08 2008-A Internal Improvements 3,720,000 10-01-23 2,000,000
12-15-08 2008-B Internal Improvements 3,525,000 07-01-28 2,870,000
07-15-09 2009-A Internal Improvements 23,695,000 10-01-29 13,485,000
05-01-10 2010-A Refunding & Improvement 6,875,000 10-01-25 3,375,000
10-15-10 2010-B Refunding 7,860,000 10-01-23 3,735,000
07-15-11 2011-A Internal Improvements 6,565,000 10-01-31 5,385,000
07-15-12 2012-A Internal Improvements 2,365,000 10-01-27 1,950,000
07-15-12 2012-B Refunding 3,785,000 10-01-20 1,835,000
02-15-13 2013-A Taxable Improvements 1,360,000 10-01-28 1,240,000
07-15-13 2013-B Improvements 4,330,000 10-01-33 3,890,000
07-30-14 2014-A Improvements 7,570,000 10-01-34 7,045,000
07-29-15 2015-A Revenue and Internal Imp. 6,825,000 10-01-35 6,825,000
07-26-16 2016-A Internal Improvements 6,570,000 10-01-36 6,570,000
07-26-16 2016-B Refunding 13,570,000 10-01-31 13,750,000
Total $77,825,000
*Includes the Bonds; excludes the Refunded Bonds.
Temporary Notes:
Final Original
Date Maturity Note Amount
Project Series Issued Date Amount Outstanding.
Street & Bldg Imp. 2015-1 07-29-15 08-01-16 $5,995,000 $ 0
Bicentennial Center 2016-1 02-10-16 08-01-17 6,890,000 6,890,000
Field House 2016-2 07-20-16 09-01-19 4,615,000 4,615,000
$11,505,000
*To be paid at maturity with proceeds from the sale of the Series 2016-A Bonds.
REGISTERED
NUMBERR-1
REGISTERED
$4,615,000
THIS NOTE OR ANY PORTION HEREOF MAY BE TRANSFERRED ONLY (1)
TO AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501 OF
REGULATION D OF THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION AND (2) IN ACCORDANCE WITH THE TRANSFER
RESTRICTIONS SET FORTH IN THE NOTE RESOLUTION.
UNITED STATES OF AMERICA
STATE OF KANSAS
COUNTY OF SALINE
CITY OF SALINA
GENERAL OBLIGATION TEMPORARY NOTE
SERIES 2016-2
Interest Maturity
Rate: 1.000% Date: September 1, 2019
PRINCIPAL AMOUNT: FOUR MILLION SIX HUND N THOUSAND DOLLARS
KNOW ALL PERSONS BY THESE
Method an Place o ayment. The principal or redemption price of this Note shall be paid at
maturity or upon e ·erreoe 1ptt6~ to the person in whose name this Note is registered at the maturity or
redemption date thereof, upa presentation and surrender of this Note at the principal office of the
Treasurer of the State o ansas, Topeka, Kansas (the "Paying Agent" and ''Note Registrar"). The
interest payable on this Note on any Interest Payment Date shall be paid to the person in whose name this
Note is registered on the registration books maintained by the Note Registrar at the close of business on
the Record Date(s) for such interest, which shall be the 15th day (whether or not a business day) of the
calendar month next preceding the Interest Payment Date. Such interest shall be payable (a) by check or
draft mailed by the Paying Agent to the address of such Registered Owner shown on the Note Register or
at such other address as is furnished to the Paying Agent in writing by such Registered Owner; or (b) in
the case of an interest payment to any Owner of $500,000 or more in aggregate principal amount of
Notes, by electronic transfer to such Owner upon written notice given to the Note Registrar by such
Registered Owner, not less than 15 days prior to the Record Date for such interest, containing the
electronic transfer instructions including the bank, ABA routing number and account number to which
such Registered Owner wishes to have such transfer directed. The principal or redemption price of and
interest on the Notes shall be payable in any coin or currency that, on the respective dates of payment
thereof, is legal tender for the payment of public and private debts. Interest not punctually paid will be
paid in the manner established in the within defined Note Resolution .
•
Definitions. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the hereinafter defined Note Resolution.
Authorization of Notes. This Note is one of an authorized series of Notes of the Issuer
designated "General Obligation Temporary Notes, Series 2016-2,'' aggregating the principal amount of
$4,615,000 (the ''Notes") issued for the purposes set forth in the Resolution of the Issuer authorizing the
issuance of the Notes (the ''Note Resolution"). The Notes are issued by the authority of and in full
compliance with the provisions, restrictions and limitations of the Constitution and laws of the State of
Kansas, including K.S.A. 10-123, Charter Ordinance No. 39 of the Issuer and Article 12, Section 5 of the
Constitution of the State of Kansas, as amended, and all other provisions of the laws of the State of
Kansas applicable thereto.
General Obligations. The Notes constitute general obligations of the Issuer payable as to both
principal and interest from the proceeds of general obligation bonds of the Issuer and, if not so paid, from
ad valorem taxes which may be levied without limitation as to rate or amo nt upon all the taxable tangible
property, real and personal, within the territorial limits of the Issuer. T·h full faith, credit and resources
of the Issuer are hereby pledged for the payment of the principal of and intern t on this Note and the issue
of which it is a part as the same respectively become due.
Redemption Prior to Maturity.
forth in the Note Resolution.
Transfer and Exchange. This Note may: be tran fe ed OP-exchanged, as provided in the Note
Resolution, only on the Note Register kept for , a QU ose at t, e principal office of the Note Registrar,
upon surrender of this Note together with a · en in trument of transfer or authorization for exchange
satisfactory to the Note Registrar duly exec ted 15 the Reg~·stered Owner or the Registered Owner's duly
authorized agent, and thereupon a ne Note or Netes-)in any Authorized Denomination of the same
maturity and in the same aggregate prin ipal amou :it shall be issued to the transferee in exchange therefor
as provided in the Note Resolutio and u n pa ent of the charges therein prescribed. The Issuer shall
pay all costs incurred in connee ·on w'itb tlie ·ssuance, payment and initial registration of the Notes and
the cost of a reasonable su -1 o o e bla s. The Issuer and the Paying Agent may deem and treat the
Denominations.
. is r is red on the Note Register as the absolute owner hereof for the
f, or on: account of, the principal or redemption price hereof and interest
urr,oses. The Notes are issued in fully registered form in Authorized
THIS NOTE O~ PORTION HEREOF MAY BE TRANSFERRED ONLY (1) TO AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501 OF REGULATION D OF THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION AND (2) IN ACCORDANCE WITH THE
TRANSFER RESTRICTIONS SET FORTH IN THE NOTE RESOLUTION.
Authentication. This Note shall not be valid or become obligatory for any purpose or be entitled
to any security or benefit under the hereinafter defined Note Resolution until the Certificate of
Authentication and Registration hereon shall have been lawfully executed by the Note Registrar.
IT IS HEREBY DECLARED AND CERTIFIED that all acts, conditions, and things required
to be done and to exist precedent to and in the issuance of this Note have been properly done and
performed and do exist in due and regular form and manner as required by the Constitution and laws of
the State of Kansas, and that the total indebtedness of the Issuer, including this series of notes, does not
exceed any constitutional or statutory limitation.
IN WITNESS WHEREOF, the Issuer has caused this Note to be executed by the manual or
facsimile signature of its Vice-Mayor and attested by the manual or facsimile signature of its Clerk, and
its seal to be affixed hereto or imprinted hereon.
CITY OF SALINA, KANSAS
Vice-Mayor
ATTEST:
~-~
By: -------------
Clerk
This General Obligation Temporary Note shall no dess and until countersigned
below following registration by the Treasurer of the State of Kansas.
CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This Note is one of a series of General Obligation Temporary Notes, Series 2016-2, of the City of
Salina, Kansas, described in the within-m entioned Note Resolution.
Registration Date __________ _
Registration Number: 0322-085-072016-847
STATE OF KANSAS )
) SS.
COUNTY OF SALINE )
The undersigned, Clerk of the Ci
been dul y registered in my office accord
Office of the State Treasurer,
Topeka, Kansas,
as Note Registrar and Paying Agent
By:
Clerk
CERTIFICATE OF STATE TREASURER
OFFICE OF THE TREASURER, STATE OF KANSAS
RON ESTES, Treasurer of the State of Kansas, does hereby certify that a transcript of the
proceedings leading up to the issuance of this Note has been filed in the office of the State Treasurer, and
that this Note was registered in such office according to law on ___________ _
WITNESS my hand and official seal.
(Seal) By:
Treasurer of the State of Kansas
NOTE ASSIGNMENT
FOR VALUE RECEIVED, the undersigned do( es) hereby sell, assign and transfer to
(Name and Address)
(Social Security or Taxpayer Identification No.)
the Note to which this assignment is affixed in the outstanding principal amount of $ -----standing in the name of the undersigned on the books of the Note R~istrar. The undersigned do(es)
hereby irrevocably constitute and appoint as ag t to transfer said Note on the
books of said Note Registrar with full power of substitution in the p
~~~~.
Dated ________ _
Name
re (Sign here exactly as name(s)
on the face of Certificate)
LEGAL OPINION
The following is a true and correct copy of the approving legal opinion of Gilmore & Bell, P.C.,
Bond Counsel, which was dated and issued as of the date of original issuance and delivery of such Notes:
Governing Body
City of Salina, Kansas
The Bennington State Bank
Salina, Kansas
Re:
GILMORE & BELL, P.C.
Attorneys at Law
2405 Grand Boulevard
Suite 1100
Kansas City, Missouri 64108
July 20, 2016
eries 2016-2, of the City of
We have acted as Bond Counsel ill conn ction 'th the issuance by the City of Salina, Kansas
(the "Issuer"), of the above-captioned n tes (the " o S"'). In this capacity, we have examined the law
and the certified proceedings, certi cations and ot' e documents that we deem necessary to render this
opinion. Capitalized tern1s not otlierwise efine 1erein shall have the meanings ascribed thereto in the
resolution adopted by the gave 1ing b yo t e ssuer authorizing the issuance of the Notes.
1. The Notes have been duly authorized, executed and delivered by the Issuer and are valid
and legally binding general obligations of the Issuer.
2. The Notes are payable as to both principal and interest from general obligation bonds of
the Issuer and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or
amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer.
The Issuer is required by law to include in its annual tax levy the principal and interest coming due on the
Notes to the extent that necessary funds are not provided from other sources.
3. The interest on the Notes (including any original issue discount properly allocable to an
owner of a Note) is: (a) excludable from gross income for federal income tax purposes; and (b) not an
item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and
corporations, but is taken into account in determining adjusted current earnings for the purpose of
computing the alternative minimum tax imposed on certain corporations. The opinions set forth in this
paragraph are subject to the condition that the Issuer complies with all requirements of the Internal
Revenue Code of 1986, as amended (the "Code"), that must be satisfied su bsequent to the issuance of the
Notes in order that interest thereon be, or continue to be, excludable from gross income for federal
income tax purposes. The Issuer has covenanted to comply with all of these requirements. Failure to
comply with certain of these requirements may cause interest on the Notes to be included in gross income
for federal income tax purposes retroactive to the date of issuance of the Notes. The Notes have not been
designated as "qualified tax-exempt obligations" within the meaning of Code§ 265(b)(3). We express no
opinion regarding other federal tax consequences arising with respect to the Notes.
4. The interest on the Notes is exempt from income taxation by the State of Kansas.
We express no opinion regarding tax consequences arising with respect to the Notes other than as
expressly set forth in this opinion.
The rights of the owners of the Notes and the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other simil~laws affecting creditors' rights
generally and by equitable principles, whether considered at law or in e,quity.
This opinion is given as of its date, and we assume o o
opinion to reflect any facts or circumstances that may com to ou
may occur after the date of this opinion.
AGREEMENT BETWEEN ISSUER AND AGENT
$4,615,000
CITY OF SALINA, KANSAS
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
DATED JULY 20, 2016
THIS AGREEMENT, dated as of July 20, 2016, between the City of Salina, Kansas, a
municipality (the "Issuer"), and the State Treasurer of Kansas, as Agent (the "Agent").
WHEREAS, for its lawful purposes, the Issuer has duly authorized the issue of the above-
captioned notes (the "Securities"), and the Issuer wishes the Agent to act as its Paying Agent, Note
Registrar, and Transfer Agent for the Securities:
Now, therefore, it is hereby agreed as follows:
I. APPOINTMENT
Issuer hereby appoints or has heretofore appointed the State Treasurer of Kansas to act as Paying
Agent, Note Registrar and Transfer Agent for the Securities. The State Treasurer of Kansas hereby
accepts its appointment as the Paying Agent, Note Registrar and Transfer Agent.
II. BASIC DUTIES
A. Issuer or its duly authorized representative agrees to furnish Agent the name(s) and
address(es) of the initial registered owner(s) of the Securities together with such
registered owners' tax identification (social security) number(s), the maturity date(s),
denomination(s) and interest rate(s) for each Security.
B. Agent shall manually authenticate the originally issued Securities upon the written order
of one or more authorized officers of Issuer. Thereafter, Agent shall manually
authenticate all Securities resulting from transfer or exchange of Securities.
C. Agent shall maintain an office in the City of Topeka, Kansas, where Securities may be
presented for registration, transfer and exchange; and shall also maintain an office in the
City of Topeka, Kansas, where Securities may be presented for payment. Agent shall
keep a register of the Securities and their transfer and exchange.
D. Agent may rely upon any document believed by it to be genuine and to have been signed
or presented by the proper person. Agent need not investigate any fact or matter stated in
the document. Agent undertakes to perform such duties and only such duties set forth in
K.S.A. 10-620 et seq., except as specifically provided in this Agreement.
Agent shall notify the owners of the Securities upon default in payment of principal or
interest on the Securities and the Agent shall have no duties or responsibilities thereafter.
III. COMPENSATION
Issuer covenants and agrees to pay to Agent, as reasonable compensation for the services
provided as Agent, an initial setup fee of $300, a registration fee of $30, plus a fee of $600, which is
based on "Book-entry Only" Securities.
This amount will be due at the time of registration unless such fee is to be paid from the proceeds
of the note issue in which case Issuer agrees to pay such fee within two (2) business days of the closing of
the note issue. In addition to the aforementioned fee, Issuer covenants and agrees to pay to Agent the fee
as stated and required by K.S.A. 10-505 for performing the duties of paying the principal of the
Securities.
IV. STANDARD OF PERFORMANCE
Issuer shall provide, or shall cause to be provided to Agent, a designation of whether its Securities
are to be issued in certificated or uncertificated form, or both.
A. STATEMENTS OF OWNERSHIP
Agent agrees to provide Statements of Ownership to the owner of uncertificated
Securities. Such Statements shall be in accordance with the standards set forth by the
Attorney General. All Statements shall be issued in the denominations of $1,000 or
$5,000 or integral multiples thereof except for one additional Security in another
denomination, which additional Security shall mature in the initial maturity year of the
series of the Securities. Interest is computed on the basis of $1,000 or $5,000 units and in
all transactions involving the payment of interest, fractions of a cent equaling or
exceeding five mills shall be regarded as one cent; fractions of a cent less than five mills
shall be disregarded. Agent shall at all times maintain an adequate supply of Statements
of Ownership for any anticipated transfers or exchanges of the Statements.
B. CERTIFICATED SECURITIES
All certificated Securities issued by Issuer under this Agreement shall be in accordance
with the standards set forth by the Attorney General and unless otherwise authorized by
Agent, the principal thereof shall be payable only upon surrender of the Security to
Agent. All certificates shall be issued in the denomination of $1,000 or $5,000 or integral
multiples thereof except one authorized Security in another denomination which
additional Security shall mature in the initial maturity year of the series of Securities.
Interest is computed on the basis of $1,000 or $5,000 units and in all transactions
involving the payment of interest, fractions of a cent equaling or exceeding five mills
shall be regarded as one cent; fractions of a cent less than five mills shall be disregarded.
Issuer shall at Issuer's cost provide Agent with an adequate supply of certificates for any
anticipated transfers or exchanges of the certificates. Issuer shall be responsible for the
payment of the printing or other expenses for such certificates. Issuer shall be
responsible for obtaining appropriate "CUSIP" number(s) and shall notify Agent of each
number( s) prior to the issuance of the applicable Securities.
C. INTEREST CALCULATIONS
Agent shall calculate interest on the basis of $1,000 and $5,000 units, or in the case of
one odd denomination, calculate the unit separately. Each intermediate unit calculation is
2
first determined, then rounded to the sixth decimal position; i.e. whenever the seventh
decimal place is equal to or greater than five the sixth decimal place is increased by one.
The final per unit calculation is subsequently rounded to two decimal positions. (See
Attachment "A" for sample calculation.)
D. SURRENDER
Securities surrendered for payment, cancellation or partial redemption shall be cancelled
by Agent and returned to Issuer in accordance with K.S.A. 10-111.
E. TRANSFERS AND EXCHANGES
1. When Securities are presented to Agent for transfer or exchange, Agent shall so
transfer or exchange such Securities if the requirements of Section 8-401 ( 1) of
the Uniform Commercial Code are met.
2. In accordance with the authorizing Resolution of the Issuer (the "Note
Resolution"), payments of interest shall be made to the owner of record of each
Security as of the close of business on the fifteenth day of the month preceding
each interest payment date. The Agent shall make such payments to the record
owner of each Security as set forth on the registration books maintained by Agent
as of such date.
3. Agent shall not be required to transfer or exchange any Security during a period
beginning on the day following the fifteenth day of the month preceding any
interest payment date for such Securities and ending at the close of business on
the interest payment date, or to transfer or exchange any Security selected or
called for redemption in whole or in part subsequent to the date notice of such
redemption is given in accordance with the Note Resolution authorizing the
Securities.
F. REGISTRATION DATES AND FUNDS FOR PAYMENTS
Date of Registration shall be affixed on the initial Securities. Subsequent transfers or
exchanges shall bear a Date of Registration as of the date that all the required
documentation is received at the Agent's official place of business. Issuer will provide
funds to make any interest or principal payments in accordance with K.S.A. 10-130 and
amendments thereto. Agent is hereby authorized to effect any semiannual payment of
interest or any principal by charging the Issuer's Fiscal Agency account with Agent.
G. REPLACEMENT OF SECURITIES
If the owner of a Security claims that a Security has been lost, destroyed or wrongfully
taken, Issuer shall issue and Agent shall authenticate a replacement Security if the
requirements of Section 8-405 of the Uniform Commercial Code are met. Only Agent
shall perform this function. An indemnity bond and affidavit of loss shall be provided to
Agent and Issuer at the expense of the owner of the Security. Such indemnity bond and
affidavit of loss must be sufficient in the judgment of Issuer and Agent to protect Issuer
and Agent from any loss which any of them may suffer if the Security is replaced. Issuer
may charge the Security owner for its expenses in the replacement of a Security.
3
H. MISCELLANEOUS
Agent hereby acknowledges receipt of numbered Securities of Issuer (in a number equal
to one Security for each maturity) for registration and exchange, and shall safeguard any
"blank" Securities held for purpose of exchange or transfer.
I. REPORTS
Agent shall provide Issuer an annual report of the activity with respect to the issuance of
Securities upon written request of Issuer.
J. CONSTRUCTION
This Agreement shall be construed in accordance with the laws of the State of Kansas and
also the Note Resolution.
[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
4
ATTACHMENT "A"
SAMPLE
$5,000.00000 ........................ Bond Unit
x .06875 ........................ Interest Rate
343.750000 Rounded to six decimal places
I 360 ........................ Days per year
.954861 Rounded to six decimal places
x 180 ........................ Day in interest period
171.874980 (Rounded to second decimal= $171.87)
Unit interest is then multiplied by the number of units in the maturity.
UNDERWRITING SAFEKEEPING AGREEMENT
BY AND BETWEEN
THE BENNINGTON STATE BANK
AND
THE CITY OF SALINA, KANSAS
AND
THE OFFICE OF THE KANSAS STATE TREASURER
$4,615,000
CITY OF SALINA, KANSAS
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
DATED JULY 20, 2016
In order to induce The Bennington State Bank (the "Purchaser") to accept delivery of the above
captioned notes (the "Notes") for safekeeping prior to the delivery of the Notes on July 20, 2016 (the
"Closing Date"), the City of Salina, Kansas (the "Issuer") and the Treasurer of the State of Kansas (the
"Agent") hereby agree to place the entire principal amount of the Notes, in the custody, control and
possession of the Purchaser at least one day prior to the Closing Date.
By executing this agreement, the Purchaser acknowledges receipt from the Agent of possession,
custody, and control of the Notes, and agrees to safekeep and hold in escrow the Notes until it shall have
received notification from one of the following authorized representatives of the Issuer to release or return
the Notes: Shandi Wicks, Clerk, or Gilmore & Bell, P.C., Bond Counsel. Notification may be made by
telephone or by receipt of an executed notice, delivered or telecopied to the Purchaser; provided,
however, that if the notification is made by telephone, written notice must be sent within 24 hours of the
original notification. In the event the Issuer executes the release of the Notes the Purchaser may release
the Notes from escrow; however, in the event a demand for the return of the Notes is received, the
Purchaser shall return the Notes as soon as practicable, but in any event, no later than the following
business day.
The Purchaser agrees to hold the Issuer and the Agent, as their interests may appear, and any of
their officers or employees, harmless from any liability, loss, damage or reasonable expense in connection
with the loss, theft, destruction or other disappearance of the Notes while they are in the possession,
custody or control of the Purchaser, prior to concluding the Closing with respect to the Notes and prior to
releasing the Notes from escrow as provided herein.
[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
CITY OF SALINA, KANSAS
Dated: July 11, 2016
By: ~UJWil
Cle
(Signature page to Underwriting Safekeeping Agreement -Notes)
THE BENNINGTON STATE BANK
Dated: July g, 2016
(Signature page to Underwriting Safekeeping Agreement -Notes)
CLOSING CERTIFICATE
$4,615,000
CITY OF SALINA, KANSAS
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
DATED JULY 20, 2016
The undersigned Vice-Mayor and Clerk of the City of Salina, Kansas (the "Issuer"), make this
Certificate for inclusion in the transcript of and as a part of the proceedings authorizing and providing for
the issuance of the above described notes (the "Notes"); and certify as of July 20, 2016 (the "Issue Date"),
as follows:
1. Meaning of Words and Terms. Capitalized words and terms used in this Certificate, unless
otherwise defined in this Certificate or the context requires otherwise, have the same meanings ascribed to
such words and terms in the Note Resolution (defined below) authorizing the Notes.
2. Transcript of Proceedings. The transcript of proceedings relating to the authorization and
issuance of the Notes (the "Transcript"), furnished to the Purchaser of the Notes, is to the best of our
knowledge, information and belief full and complete; none of such proceedings have been modified,
amended or repealed, except as might be shown in the Transcript; and the facts stated in the Transcript
still exist. In each instance where copies appear in the Transcript, such copies are true and correct
duplicates of the original instruments now on file with the Clerk. All certifications made by the Issuer in
the Transcript Certificate dated July 11, 2016 are true and correct as of this date and are incorporated in
this Certificate by reference.
3. The Note Resolution. The Issuer is issuing and delivering the Notes simultaneously with the
delivery of this Certificate, pursuant to and in full compliance with the Constitution and statutes of the
State, including particularly K.S.A. 10-123, Charter Ordinance No. 39 of the Issuer, Article 12, Section 5
of the Constitution of the State of Kansas, as amended, and Resolution No. 16-7382 of the Issuer duly
adopted by the governing body of the Issuer on July 11, 2016 (the "Note Resolution").
4. Purpose of the Notes. The Notes are being issued pursuant to the Note Resolution for the
purpose of paying a portion of the costs of certain public improvements (the "Improvements").
5. Security for the Notes. The Notes are general obligations of the Issuer payable from the
proceeds of general obligation bonds of the Issuer and, if not so paid, to the extent necessary, from ad
valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible
property, real and personal, within the territorial limits of the Issuer. The full faith, credit and resources of
the Issuer are pledged under the Note Resolution to the payment of the principal of and interest on the
Notes.
6. Non-Litigation. There is no controversy, action, suit, proceeding, or to the best of our
knowledge, any inquiry or investigation at law or in equity or before or by any public board or body
pending or, to the best or our knowledge, threatened against or affecting the Issuer, its officers or its
property, or, to the best of our knowledge, any basis therefor questioning, disputing or affecting in any
way: (a) the legal organization of the Issuer or its boundaries; (b) the right or title of any of its officers to
their respective offices; ( c) the legality of any official act shown to have been done in the Transcript; ( d)
the constitutionality or validity of the indebtedness represented by the Notes shown to be authorized in the
Transcript; (e) the validity of the Notes, or any of the proceedings had in relation to the authorization,
issuance or sale thereof; (f) the levy and collection of an ad valorem property tax to pay the principal of
and interest on the Notes; or (g) the federal or state tax-exempt status of the interest on the Notes; wherein
any unfavorable decision, ruling or finding would adversely affect the Issuer, the transactions
contemplated by the Note Purchase Agreement or the Note Resolution, or the validity or enforceability of
the Notes or the Note Purchase Agreement.
7. Representations and Warranties Required by the Note Purchase Agreement. The Issuer
has duly performed all of its obligations required to be performed at or prior to the date of this Closing
Certificate by the Note Purchase Agreement and each of the Issuer's representations and warranties
contained in the Note Purchase Agreement are true as of the date of this Certificate.
[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
2
FEDERAL TAX CERTIFICATE
Dated as of July 20, 2016
Between
CITY OF SALINA, KANSAS
And
SALINA FIELD HOUSE QUALIFIED ACTIVE
LOW-INCOME COMMUNITY BUSINESS, INC.
$4,615,000
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
Section 1.01
Section 1.02
Section 2.01
Section 2.02
Section 2.03
Section 3.01
Section 3.02
Section 3.03
Section 3.04
Section 3.05
Section 3.06
Section 3.07
Section 3.08
Section 3.09
Section 3.10
Section 3.11
Section 3.12
Section 3.13
Section 4.01
Section 4.02
Section 4.03
Section 4.04
Section 4.05
Section 4.06
Section 5.01
Section 5.02
Section 5.03
Section 5.04
Section 5.05
Section 5.06
FEDERAL TAX CERTIFICATE
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
Definitions of Words and Terms ................................................................................... !
Plan of Finance .............................................................................................................. 6
ARTICLE II GENERAL REPRESENTATIONS AND COVENANTS
Representations and Covenants of the Issuer ................................................................ 6
Representations and Covenants of the Corporation ...................................................... 9
Continuing Application of Representations and Covenants ........................................ 11
ARTICLE III ARBITRAGE CERTIFICATIONS AND COVENANTS
General. ....................................................................................................................... 11
Reasonable Expectations ............................................................................................. 11
Purpose of Financing ................................................................................................... 12
Funds and Accounts .................................................................................................... 12
Amount and Use of Note Proceeds ............................................................................. 12
No Advance Refunding ............................................................................................... 12
No Current Refunding ................................................................................................. 12
Completion of Financed Improvements ...................................................................... 12
Sinking Funds .............................................................................................................. 12
Reserve, Replacement and Pledged Funds .................................................................. 12
Purchase Prices and Yield on Notes ............................................................................ 13
Miscellaneous Arbitrage Matters ................................................................................ 13
Conclusion ................................................................................................................... 13
ARTICLE IV TAX COMPLIANCE POLICIES AND PROCEDURES
General. ....................................................................................................................... 13
Record Keeping; Use of Note Proceeds and Use of Financed Improvements ............ 14
Restrictions on Investment Yield ................................................................................ 15
Procedures for Establishing Fair Market Value of Investments .................................. 15
Certain Gross Proceeds Exempt from the Rebate Requirement. ................................. 17
Computation and Payment of Arbitrage Rebate .......................................................... 19
ARTICLE V MISCELLANEOUS PROVISIONS
Term of Tax Certificate ............................................................................................... 20
Amendments ................................................................................................................ 20
Opinion of Bond Counsel. ........................................................................................... 21
Reliance ....................................................................................................................... 21
Severability .................................................................................................................. 21
Benefit of Certificate ................................................................................................... 21
Section 5.07
Section 5.08
Section 5.09
Default, Breach and Enforcement. .............................................................................. 21
Governing Law ............................................................................................................ 21
Electronic Transactions ............................................................................................... 21
LIST OF EXHIBITS TO FEDERAL TAX CERTIFICATE
A. IRS Form 8038-G
Evidence of filing
B. Receipt for Purchase Price
C. Receipt and Representation
D. Description Of Property Comprising The Financed Improvements
E. Sample Annual Compliance Checklist
F. Form of Final Allocation
Schedule 1 Debt Service Schedule and Proof of Yield
11
FEDERAL TAX CERTIFICATE
THIS FEDERAL TAX CERTIFICATE (the "Tax Certificate"), dated as of July 20, 2016 (the
"Issue Date"), is between the City of Salina, Kansas, a political subdivision of the State of Kansas (the
"Issuer"), and Salina Field House Qualified Active Low-Income Community Business, Inc., a nonprofit
corporation duly organized and validly existing under the laws of the State of Kansas (the "Corporation").
RECITALS
1. This Tax Certificate is being executed and delivered in connection with the issuance by
the Issuer of $4,615,000 principal amount of General Obligation Temporary Notes, Series 2016-2 (the
"Notes"), under the Note Resolution (as defined herein), for the purposes described in this Tax Certificate
and in the Note Resolution.
2. The Internal Revenue Code of 1986, as amended (the "Code"), and the applicable
Regulations and rulings issued by the U.S. Treasury Department (the "Regulations"), impose certain
limitations on the uses and investment of the Note proceeds and of certain other money relating to the
Notes and set forth the conditions under which the interest on the Notes will be excluded from gross
income for federal income tax purposes.
3. The Issuer and the Corporation are executing this Tax Certificate in order to set forth
certain facts, covenants, representations, and expectations relating to the use of Note proceeds and the
property financed or refinanced with those proceeds and the Investment of the Note proceeds and of
certain other related money, in order to establish and maintain the exclusion of the interest on the Notes
from gross income for federal income tax purposes and to provide guidance for complying with the
arbitrage rebate provisions of Code § 148(f).
4. The Issuer adopted a Tax Compliance Procedure (as defined below) for the purpose of
setting out general procedures for the Issuer and the Corporation to continuously monitor and comply
with the federal income tax requirements set out in the Code and the Regulations. This Tax Certificate is
entered into as required by the Tax Compliance Procedure to set out specific tax compliance procedures
applicable to the Notes.
NOW, THEREFORE, in consideration of the foregoing and the mutual representations,
covenants and agreements set forth in this Tax Certificate, the Issuer and the Corporation represent,
covenant and agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions of Words and Terms.
Except as otherwise provided in this Tax Certificate or unless the context otherwise requires,
capitalized words and terms used in this Tax Certificate have the same meanings as set forth in the Note
Resolution, and certain other words and phrases have the meanings assigned in Code§§ 103, 141-150 and
the Regulations. The following words and terms used in this Tax Certificate have the following
meanings:
"Adjusted Gross Proceeds" means the Gross Proceeds of the Notes reduced by amounts: (a) in
a Bona Fide Debt Service Fund or a reasonably required reserve or replacement fund; (b) that as of the
Issue Date, are not expected to be Gross Proceeds, but which arise after the end of the applicable spending
period; and ( c) representing grant repayments or sale or Investment proceeds of any purpose Investment.
"Annual Compliance Checklist" means a checklist for each of the Financed Improvements
designed to measure compliance with the requirements of this Tax Certificate and the Tax Compliance
Procedure after the Issue Date as further described in Section 4.02, a sample form of which is attached as
ExhibitE.
"Available Construction Proceeds" means the sale proceeds of the Notes, increased by: (a)
Investment earnings on the sale proceeds; (b) earnings on amounts in a reasonably required reserve or
replacement fund allocable to the Notes but not funded from the Notes; and ( c) earnings on such earnings,
reduced by sale proceeds (1) in any reasonably required reserve fund or (2) used to pay issuance costs of
the Notes. But Available Construction Proceeds do not include Investment earnings on amounts in a
reasonably required reserve or replacement fund after the earlier of: (a) the second anniversary of the
Issue Date; or (b) the date the Financed Improvements are substantially completed.
"Bona Fide Debt Service Fund" means a fund, which may include Note proceeds, that: (a) is
used primarily to achieve a proper matching of revenues with principal and interest payments within each
Note Year; and (b) is depleted at least once each Note Year, except for a reasonable carryover amount not
to exceed the greater of (1) the earnings on the fund for the immediately preceding Note Year, or (2) one-
twelfth of the principal and interest payments on the Notes for the immediately preceding Note Year.
"Bond Compliance Officer" means the Issuer's Director of Finance or other person named in
the Tax Compliance Procedure.
"Bond Counsel" means Gilmore & Bell, P.C., or other firm of nationally recognized bond
counsel acceptable to the Issuer.
"Code" means the Internal Revenue Code of 1986, as amended.
"Computation Date" means each date on which arbitrage rebate for the Notes is computed. The
date the last Note is discharged, September 1, 2019, is selected as the Computation Date, but, consistent
with the Regulations, a different date may be selected.
"Corporation" means Salina Field House Qualified Active Low-Income Community Business,
Inc., a nonprofit corporation duly organized and validly existing under the laws of the State of Kansas,
intended to be a "qualified active low income community business," within the meaning of Code §
45D(d).
"Final Allocation" means the Final Allocation of expenditures prepared by the Bond Compliance
Officer in accordance with the Tax Compliance Procedure and Section 4.02(b) of this Tax Certificate.
"Financed Improvements" means the portion of the Improvements being financed or refinanced
with the proceeds of the Notes as described in the Note Resolution and on Exhibit D.
"Gross Proceeds" means (a) sale proceeds (any amounts actually or constructively received by
the Issuer from the sale of the Notes, including amounts used to pay underwriting discount or fees, but
excluding pre-issuance accrued interest), (b) Investment proceeds (any amounts received from investing
2
sale proceeds or other Investment proceeds, (c) any amounts held in a sinking fund for the Notes, (d) any
amounts held in a pledged fund or reserve fund for the Notes, and (e) any other replacement proceeds.
Specifically, the term Gross Proceeds includes (but is not limited to) amounts held in the
following funds and accounts:
(1) Improvement Fund;
(2) Debt Service Account; and
(3) Rebate Fund (to the extent funded with sale proceeds or Investment proceeds of
the Notes).
"Guaranteed Investment Contract" is any Investment with specifically negotiated withdrawal
or reinvestment provisions and a specifically negotiated interest rate, including any agreement to supply
Investments on two or more future dates (e.g., a forward supply contract).
"Improvements" means all of the property being acquired, developed, constructed, renovated,
and equipped by the Issuer using Note proceeds and other money contributed by the Issuer, as described
on Exhibit D.
"Investment" means any security, obligation, annuity contract or other investment-type property
that is purchased directly with, or otherwise allocated to, Gross Proceeds This term does not include a
tax-exempt bond, except for "specified private activity bonds" as defined in Code § 57(a)(5)(C), but does
include the investment element of most interest rate caps.
"IRS" means the United States Internal Revenue Service.
"Issue Date" means July 20, 2016.
"Issuer" means the City of Salina, Kansas, and its successors and assigns, or any body, agency or
instrumentality of the State succeeding to or charged with the powers, duties and functions of the Issuer.
"Management Agreement" means a legal agreement defined in Regulations § l .141-3(b) as a
management, service, or incentive payment contract with an entity that provides services involving all or
a portion of any function of the Financed Improvements, such as a contract to manage the entire Financed
Improvements or a portion of the Financed Improvements. However, contracts for services that are solely
incidental to the primary governmental function of the Financed Improvements (for example, contracts
for janitorial, office equipment repair, billing, or similar services) are not treated as Management
Agreements.
"Measurement Period" means, with respect to each item of property financed as part of the
Financed Improvements, the period beginning on the later of: (a) the Issue Date or (b) the date the
property is placed on service and ending on or the earlier of (1) the final maturity date of the Notes or (2)
the expected economic useful life of the property.
"Minor Portion" means the lesser of $100,000 or 5% of the sale proceeds of the Notes.
"Net Proceeds" means, when used in reference to the Notes, the sale proceeds of the Notes
(excluding pre-issuance accrued interest), less any proceeds deposited in a reasonably required reserve or
replacement fund, plus all Investment earnings on such sale proceeds.
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"Non-Qualified Use" means use of Note proceeds or the Financed Improvements in a trade or
business carried on by any Non-Qualified User. The rules set out in Regulations § 1.141-3 determine
whether Note proceeds or the Financed Improvements are "used" in a trade or business. Generally,
ownership, a lease, or any other use that grants a Non-Qualified User a special legal right or entitlement
with respect to the Financed Improvements, will constitute use under Regulations § 1.141-3.
"Non-Qualified User" means any person or entity other than a Qualified User.
"Note" or "Notes" means any note or notes described in the recitals, authenticated and delivered
under the Note Resolution.
"Note Resolution" means Resolution No. 16-7382 of the Issuer duly adopted by the governing
body of the Issuer on July 11, 2016 as originally executed by the Issuer as amended and supplemented in
accordance with the provisions of the Note Resolution.
"Note Year" means each 1-year period (or shorter period for the first Note Year) ending
September 1, or another 1-year period selected by the Issuer.
"Opinion of Bond Counsel" means the written opinion of Bond Counsel to the effect that the
proposed action or the failure to act will not adversely affect the exclusion of the interest on the Notes
from gross income for federal income tax purposes.
"Post-Issuance Tax Requirements" means those requirements related to the use of proceeds of
the Notes, the use of the Financed Improvements and the investment of Gross Proceeds after the Issue
Date of the Notes.
"Proposed Regulations" means the proposed arbitrage regulations REG 106143-07 (published at
72 Fed. Reg. 54606 (Sept. 26, 2007)).
"Purchaser" means The Bennington State Bank, Salina, Kansas, the purchaser of the Notes, and
any successor and assigns.
"Qualified Use Agreement" means any of the following:
(a) A lease or other short-term use by members of the general public who occupy the
Financed Improvements on a short-term basis in the ordinary course of the Issuer's governmental
purposes.
(b) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the
Financed Improvements for a period up to 200 days in length pursuant to an arrangement whereby (1) the
use of the Financed Improvements under the same or similar arrangements is predominantly by natural
persons who are not engaged in a trade or business and (2) the compensation for the use is determined
based on generally applicable, fair market value rates that are in effect at the time the agreement is
entered into or renewed. Any Qualified User or Non-Qualified User using all or any portion of the
Financed Improvements under this type of arrangement may have a right of first refusal to renew the
agreement at rates generally in effect at the time of the renewal.
(c) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the
Financed Improvements for a period up to 100 days in length pursuant to arrangements whereby (1) the
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use of the property by the person would be general public use but for the fact that generally applicable
and uniformly applied rates are not reasonably available to natural persons not engaged in a trade or
business, (2) the compensation for the use under the arrangement is determined based on applicable, fair
market value rates that are in effect at the time the agreement is entered into or renewed, and (3) the
Financed Improvements was not constructed for a principal purpose of providing the property for use by
that Qualified User or Non-Qualified User. Any Qualified User or Non-Qualified User using all or any
portion of the Financed Improvements under this type of arrangement may have a right of first refusal to
renew the agreement at rates generally in effect at the time of the renewal.
(d) Agreements with Qualified Users or Non-Qualified Users to use all or a portion of the
Financed Improvements for a period up to 50 days in length pursuant to a negotiated arm's-length
arrangement at fair market value so long as the Financed Improvements was not constructed for a
principal purpose of providing the property for use by that person.
"Qualified User" means a state, territory, possession of the United States, the District of
Columbia, or any political subdivision thereof, or any instrumentality of such entity, but it does not
include the United States or any agency or instrumentality of the United States.
"QLICI Loans" means the loans expected to be made some time after the issuance of the Notes
by CNMC Sub-CDE 114, LLC and Dakotas XXII, LLC to the Corporation, intended to be "qualified low
income community investments," within the meaning of Code§ 45D(d).
"Reasonable Retainage" means Gross Proceeds retained by the Issuer for reasonable business
purposes, such as to ensure or promote compliance with a construction contract; provided that such
amount may not exceed: (a) for purposes of the 18-month spending test, 5% of Net Proceeds of the Notes
on the date 18 months after the Issue Date, or (b) for purposes of the 2-year spending test, 5% of the
Available Construction Proceeds as of the end of the 2-year spending period.
"Rebate Analyst" means Gilmore & Bell, P.C. or any successor rebate analyst selected pursuant
to this Tax Certificate.
"Regulations" means all Regulations issued by the U.S. Treasury Department to implement the
provisions of Code § § 103 and 141 through 150 and applicable to the Notes.
"State" means the State of Kansas.
"Tax Certificate" means this Federal Tax Certificate as it may from time to time be amended and
supplemented in accordance with its terms.
"Tax Compliance Procedure" means the Issuer's Tax and Securities Compliance Policy and
Procedure, dated June 11, 2012, as amended and supplemented in accordance with the terms of the Tax
Compliance Procedure.
"Tax-Exempt Bond File" means documents and records for the Notes, maintained by the Bond
Compliance Officer pursuant to the Tax Compliance Procedure.
"Transcript" means the Transcript of Proceedings relating to the authorization and issuance of
the Notes.
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"Yield" means yield on the Notes, computed under Regulations § 1.148-4, and yield on an
Investment, computed under Regulations § 1.148-5.
Section 1.02 Plan of Finance.
On the Issue Date, the Issuer will transfer to the Corporation fee simple title to certain real
property, including the real property upon which the Project will be located, and the Corporation will
lease such real property back to the Issuer under a base lease, and in tum the Corporation will lease the
property to the Issuer under. an operating lease. The Notes are being issued by the Issuer under the Note
Resolution in order to make a grant to Salina Field House Lender, Inc., a Kansas nonprofit corporation
and a party unrelated to the Issuer), which is expected to use such funds to make a leveraged loan to
Chase NMTC Salina Fieldhouse Investment Fund, LLC (a limited liability company wholly owned by
Chase Community Equity, LLC), which expects to use such amount, along with other funds, to fund a
portion of its 99.99% equity investment interests in CNMC Sub-CDE 114, LLC and Dakotas XXII, LLC,
which expect to use this money to fund the various QLICI Loans to the Corporation. The Corporation
expects to use amounts received from the QLICI Loans to pay a portion of the costs of the Project.
ARTICLE II
GENERAL REPRESENTATIONS AND COVENANTS
Section 2.01 Representations and Covenants of the Issuer.
The Issuer represents and covenants as follows:
(a) Organization and Authority. The Issuer: (1) is a city of the first class, duly created,
organized and existing under the Constitution and laws of the State, (2) has lawful power and authority to
issue the Notes for the purposes set forth in the Note Resolution, to enter into, execute and deliver the
Note Resolution, the Notes, and this Tax Certificate and to carry out its obligations under this Tax
Certificate and under such documents, and (3) by all necessary action has been duly authorized to execute
and deliver the Note Resolution, the Notes, and this Tax Certificate, acting by and through its duly
authorized officials.
(b) Tax-Exempt Status of Notes-General Covenant. The Issuer (to the extent within its
power or direction) will not use any money on deposit in any fund or account maintained in connection
with the Notes, whether or not such money was derived from the proceeds of the sale of the Notes or from
any other source, in a manner that would cause the Notes to be "arbitrage bonds," within the meaning of
Code § 148, and will not (to the extent within its power or direction) otherwise use or permit the use of
any Note proceeds or any other funds of the Issuer, directly or indirectly, in any manner, or take or permit
to be taken any other action or actions, that would cause interest on the Notes to be included in gross
income for federal income tax purposes.
(c) Governmental Obligations-Use of Proceeds. Throughout the Measurement Period: (1)
all of the Financed Improvements are expected to be owned by the Issuer, the Corporation, or another
Qualified User; (2) no portion of the Financed Improvements are expected to be used in a Non-Qualified
Use; and (3) the Issuer will not permit any Non-Qualified Use of the Financed Improvements without first
obtaining an Opinion of Bond Counsel. The Issuer will monitor the usage of all portions of the Financed
Improvements during the Measurement Period. If the Non-Qualified Use of the Financed Improvements
exceeds 10% of the total use over the Measurement Period, then the Issuer will take "remedial action" in
6
accordance with Regulations § 1.141-12, as specified in an Opinion of Bond Counsel, as necessary to
maintain the exclusion of the interest on the Notes from gross income for federal income tax purposes.
The Issuer understands that remedial action could include redemption or defeasance of all or a portion of
the Notes.
(d) Governmental Obligations-Private Security or Payment. As of the Issue Date the Issuer
expects that none of the principal and interest on the Notes will be (under the terms of the Notes or any
underlying arrangement) directly or indirectly:
(1) secured by (i) any interest in property used or to be used for a private business
use, or (ii) any interest in payments in respect of such property; or
(2) derived from payments (whether or not such payments are made to the Issuer or
the Corporation) in respect of property, or borrowed money, used or to be used for a private
business use.
For purposes of the foregoing, taxes of general application, including payments in lieu of taxes,
are not treated as private payments or as private security. The Issuer will not permit any private security
or payment with respect to the Notes without first obtaining an Opinion of Bond Counsel.
(e) No Private Loan. Not more than 5% of the net proceeds of the Notes will be loaned
directly or indirectly to any Non-Qualified User.
(f) Management Agreements. As of the Issue Date, the Issuer has no Management
Agreements with Non-Qualified Users. During the Measurement Period, the Issuer will not enter into or
renew any Management Agreement with any Non-Qualified User without first obtaining an Opinion of
Bond Counsel.
(g) Leases. Except for the leases with the Corporation, neither of which gives rise to Non-
Qualified Use, as of the Issue Date, the Issuer has not entered into any leases of any portion of the
Financed Improvements. During the Measurement Period, the Issuer will not enter into or renew any
lease or similar agreement or arrangement, other than a Qualified Use Agreement, without first obtaining
an Opinion of Bond Counsel.
(h) Limit on Maturity of Notes. A list of the assets included in the Financed Improvements
and a computation of the "average reasonably expected economic life" is attached to this Tax Certificate
as Exhibit D. Based on this computation, the "average maturity" of the Notes of 3.114 years, as
computed by Bond Counsel, does not exceed 120% of the average reasonably expected economic life of
the Financed Improvements.
(i) Expenditure of Note Proceeds.
(1) Reimbursement of Expenditures: Official Intent. The governing body of the
Issuer adopted a resolution declaring the intent of the Issuer to finance the Financed
Improvements with tax-exempt obligations and to reimburse the Issuer for expenditures made for
the Financed Improvements prior to the issuance of those obligations. The resolution is contained
in the Transcript as Item #1. No portion of the Net Proceeds of the Notes will be used to
reimburse an expenditure paid by the Issuer more than 60 days prior to the date the respective
resolution was adopted. The Issuer will evidence each allocation of the proceeds of the Notes to
an expenditure in writing. No reimbursement allocation will be made for an expenditure made
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more than 3 years before the date of the reimbursement allocation. In addition, no reimbursement
allocation will be made more than 18 months following the later of (A) the date of the
expenditure or (B) the date the Financed Improvements were placed in service. The Issuer does
not expect to reimburse itself for any Project expenditures made prior to the Issue Date.
(2) Final Allocation of Note Proceeds to Expenditures. The Issuer understands that,
under Regulations § 1.148-6( d), the Issuer is required to account for the allocation of Note
proceeds to Improvement expenditures (including expenditures made before and after the Issue
Date of the Note) within 18 months after the later of (A) the date the expenditure is made, or (B)
the date the Improvements are placed in service, and in any event not later than the date that is 60
days after the fifth anniversary of the Issue Date or the date the Notes are retired, if earlier (a
"Final Allocation"). The Issuer will maintain accurate records of all expenditures made for the
Improvements, including the amount, the date paid, a description of the purpose, and the source
of funds (whether Note proceeds or other money) initially allocated to each Improvement
expenditure. After completion of the Improvements, the Issuer will prepare a Final Allocation
showing the allocation of Note proceeds and other money to all Improvement costs and
identifying the Financed Improvement, and will maintain the Final Allocation in its books and
records in accordance with Section 4.02 hereof. A sample form of Final Allocation is attached to
this Tax Certificate as Exhibit F. The Issuer reserves the right to make modifications to the
expected allocation of Note proceeds and other money for purposes of compliance with the
limitations on Non-Qualified Use following completion of the Financed Improvement in
accordance with, and within the time limits prescribed in, the Regulations. In the absence of such
subsequent allocation, the Note proceeds will be deemed allocated as shown on Exhibit D.
(j) Registered Notes. The Note Resolution requires that all of the Notes will be issued and
held in registered form within the meaning of Code§ 149(a).
(k) Notes Not Federally Guaranteed. The Issuer will not take any action or permit any
action to be taken which would cause any Note to be "federally guaranteed" within the meaning of Code
§ 149(b).
(1) IRS Form 8038-G. Bond Counsel will prepare IRS Form 8038-G (Information Return
for Tax-Exempt Governmental Obligations) based on the representations and covenants of the Issuer
contained in this Tax Certificate or otherwise provided by the Issuer. Bond Counsel will sign the return as
a paid preparer following completion and will then deliver copies to the Issuer for execution and for the
Issuer's records. The Issuer agrees to timely execute and return to Bond Counsel the execution copy of
Form 8038-G for filing with the IRS. A copy of the IRS Form 8038-G as filed with the IRS with proof of
filing will be included in Exhibit A of the Tax Certificate.
(m) Hedge Bonds. At least 85% of the Net Proceeds of the Notes will be used to carry out
the governmental purpose of the Notes within 3 years after the Issue Date, and not more than 50% of the
proceeds of the Notes will be invested in Investments having a substantially guaranteed Yield for four
years or more.
(n) Single Issue; No Other Issues. The Notes constitute a single "issue" under Regulations
§ 1.150-1 ( c ). No other debt obligations of the Issuer: (1) are being sold within 15 days of the sale of the
Notes, (2) are being sold under the same plan of financing as the Notes, and (3) are expected to be paid
from substantially the same source of funds as the Notes (disregarding guarantees from unrelated parties,
such as bond insurance). For purposes of the foregoing, the Issuer sold and is issuing its General
Obligation Internal Improvement Bonds, Series 2016-A, and General Obligation Refunding Bonds, Series
8
2016-B within 15 days of the sale of the Notes, but such bonds were not sold pursuant to the same plan of
financing as the Notes and are not expected to be paid from substantially the same source of funds as the
Notes, and therefore are not part of the same "issue" as the Notes under Regulations § 1.150-l(c). A
separate Federal Tax Certificate and IRS Form 8038-G are being executed in connection with the issuance
of the Series 2016-A Bonds and Series 2016-B Bonds.
( o) Interest Rate Swap. As of the Issue Date, the Issuer has not entered into an interest rate
swap agreement or any other similar arrangement designed to modify its interest rate risk with respect to
the Notes. The Issuer will not enter into any such arrangement in the future without obtaining an Opinion
of Bond Counsel.
(p) Guaranteed Investment Contract. As of the Issue Date, the Issuer does not expect to
enter into a Guaranteed Investment Contract for any Gross Proceeds of the Notes. The Issuer will be
responsible for complying with Section 4.04(d) hereof if it decides to enter into a Guaranteed Investment
Contract at a later date.
(q) Bank Qualified Tax-Exempt Obligation. The Notes are not "qualified tax exempt
obligations" under Code§ 265(b)(3).
(r) Compliance with Future Tax Requirements. The Issuer understands that the Code and
the Regulations may impose new or different restrictions and requirements in the future. The Issuer will
comply with such future restrictions that are necessary to maintain the exclusion of the interest on the
Notes from gross income for federal income tax purposes.
Section 2.02 Representations and Covenants of the Corporation.
The Corporation represents and covenants as follows:
(a) Organization and Authority. The Corporation: (1) is a nonprofit corporation duly
organized and existing under the laws of the State of Kansas, (2) has lawful power and authority to
execute and deliver this Tax Agreement and to carry out its obligations under this Tax Agreement, and
(C) by all necessary action has been duly authorized to execute and deliver this Tax Agreement, acting by
and through its duly authorized officials.
(b) Authorization and Proceedings. The creation and formation of the Corporation as a
nonprofit corporation under the general nonprofit corporation law of the State of Kansas was approved by
Issuer resolution, and the initial board of directors of the Corporation was appointed by the Issuer.
( c) Qualification of the Corporation as Instrumentality of the Issuer. The Corporation is a
governmental "instrumentality" of the Issuer (a political subdivision of the State of Kansas), in
compliance with the guidance provided by the IRS in Revenue Ruling 57-128, 1957-1 C.B. 311. In
accordance therewith:
(1) The Corporation is used for a governmental purpose and performs a
governmental function, in that the Corporation is organized and operated exclusively for the
benefit of, to perform the functions of, and to carry out the purposes of the Issuer, a political
subdivision of the State of Kansas;
(2) The Corporation performs its function on behalf of the Issuer, a political
subdivision of the State of Kansas;
9
(3) There are no private interests involved in the Corporation, in that the
Corporation's articles of incorporation provide that, and in fact, none of the Corporation's income
will inure to the benefit of or be distributed to any private person;
(4) The Issuer has the powers and interests of an owner in the Corporation, given
that there is no capital stock in the Corporation, the board of directors of the Corporation is
appointed and subject to removal by the Issuer, and, upon dissolution, all net assets of the
Corporation shall be distributed to the Issuer for a public purpose;
(5) Control and supervision of the Corporation is vested in the Issuer, because the
board of directors of the Corporation is appointed and subject to removal by the Issuer, with or
without cause;
( 6) The Corporation is authorized and will be operated pursuant to the statutory
powers of the Issuer under Kansas Revised Statutes, Sections 23-3528 to 23-3552, inclusive, to
further the purposes of the Issuer, and therefore statutory authority exists for the creation and use
of the Corporation as an instrumentality of the Issuer; and
(7) The beneficial interest in the Corporation resides with the Issuer, and the
Corporation is financially responsible to the Issuer.
(d) Governmental Obligations-Use of Proceeds. Throughout the Measurement Period: (1)
all of the Financed Improvements are expected to be owned by the Issuer, the Corporation, or another
Qualified User; (2) no portion of the Financed Improvements are expected to be used in a Non-Qualified
Use; and (3) the Corporation will not permit any Non-Qualified Use of the Financed Improvements
without first obtaining an Opinion of Bond Counsel. The Corporation will assist the Issuer in monitoring
the usage of all portions of the Financed Improvements during the Measurement Period.
(e) Governmental Obligations-Private Security or Payment. As of the Issue Date the
Corporation expects that none of the principal and interest on the Notes will be (under the terms of the
Notes or any underlying arrangement) directly or indirectly:
(1) secured by (i) any interest in property used or to be used for a private business
use, or (ii) any interest in payments in respect of such property; or
(2) derived from payments (whether or not such payments are made to the
Corporation or the Issuer) in respect of property, or borrowed money, used or to be used for a
private business use.
For purposes of the foregoing, taxes of general application, including payments in lieu of taxes,
are not treated as private payments or as private security. The Corporation will not permit any private
security or payment with respect to the Notes without first obtaining an Opinion of Bond Counsel.
(f) No Private Loan. Not more than 5% of the net proceeds of the Notes will be loaned
directly or indirectly to any Non-Qualified User.
(g) Management Agreements. As of the Issue Date, the Corporation has no Management
Agreements with Non-Qualified Users. During the Measurement Period, the Corporation will not enter
10
into or renew any Management Agreement with any Non-Qualified User without first obtaining an
Opinion of Bond Counsel.
(h) Leases. Except for the leases with the Issuer, neither of which gives rise to Non-
Qualified Use, as of the Issue Date, the Corporation has not entered into any leases of any portion of the
Financed Improvements. During the Measurement Period, the Issuer will not enter into or renew any
lease or similar agreement or arrangement, other than a Qualified Use Agreement, without first obtaining
an Opinion of Bond Counsel.
(i) IRS Forms. The Corporation will assist and instruct the Corporation in completing and
executing any IRS Forms in the future, based on the instructions of Bond Counsel.
(j) Compliance with Future Tax Requirements. The Corporation understands that the Code
and the Regulations may impose new or different restrictions and requirements in the future. The
Corporation will comply with such future restrictions that are necessary to maintain the exclusion of the
interest on the Notes from gross income for federal income tax purposes.
Section 2.03 Continuing Application of Representations and Covenants.
All representations, covenants and certifications contained in this Tax Certificate or in any
certificate or other instrument delivered by the Issuer under this Tax Certificate, will survive the execution
and delivery of such documents and the issuance of the Notes, as representations of facts existing as of
the date of execution and delivery of the instruments containing such representations. The foregoing
covenants of this Section will remain in full force and effect notwithstanding the defeasance of the Notes.
ARTICLE III
ARBITRAGE CERTIFICATIONS AND COVENANTS
Section 3.01 General.
The purpose of this Article is to certify, under Regulations § 1.148-2(b ), the Issuer's expectations
as to the sources, uses and Investment of Note proceeds and other money, in order to support the Issuer's
conclusion that the Notes are not arbitrage bonds. The person executing this Tax Certificate on behalf of
the Issuer is an officer of the Issuer responsible for issuing the Notes.
Section 3.02 Reasonable Expectations.
The facts, estimates and expectations set forth in this Article are based upon and in reliance upon
the Issuer's understanding of the documents and certificates that comprise the Transcript, and the
representations, covenants and certifications of the parties contained therein. To the Issuer's knowledge,
the facts and estimates set forth in this Tax Certificate are accurate, and the expectations of the Issuer set
forth in this Tax Certificate are reasonable. The Issuer has no knowledge that would cause it to believe
that the representations, warranties and certifications described in this Tax Certificate are unreasonable or
inaccurate or may not be relied upon.
11
Section 3.03 Purpose of Financing.
The Notes are being issued for the purpose of providing funds to pay a portion of the costs of the
Financed Improvements.
Section 3.04 Funds and Accounts.
The following funds and accounts have been established under the Note Resolution:
(a) Improvement Fund;
(b) Debt Service Account; and
( c) Rebate Fund.
Section 3.05 Amount and Use of Note Proceeds.
(a) Amount of Note Proceeds. The total proceeds to be received by the Issuer from the sale
of the Notes are as evidenced in Exhibit B attached to this Tax Certificate.
(b) Use of Note Proceeds. The Note proceeds are expected to be allocated to expenditures
as follows:
(1) All accrued interest, if any, will be deposited in the Debt Service Account and
allocated to pay interest on the Notes.
(2) The Note proceeds will be deposited in the Improvement Fund, of which
$13,324.00 will be used to pay costs of issuing the Notes and $4,601,676.00 will be used to pay
costs of the Financed Improvements, including capitalized interest on the Notes.
Section 3.06 No Advance Refunding. No proceeds of the Notes will be used more than 90
days following the Issue Date to pay principal or interest on any other debt obligation.
Section 3.07 No Current Refunding. No proceeds of the Notes will be used to pay principal
or interest on any other debt obligation.
Section 3.08 Completion of Financed Improvements. The Issuer has incurred, or will incur
within 6 months after the Issue Date, a substantial binding obligation to a third party to spend at least 5%
of the Net Proceeds of the Notes on the Financed Improvements. The completion of the Financed
Improvements and the allocation of the Net Proceeds of the Notes to expenditures will proceed with due
diligence. At least 85% of the Net Proceeds of the Notes will be allocated to expenditures on the
Financed Improvements within 3 years after the Issue Date.
Section 3.09 Sinking Funds. Except for the Debt Service Account, no sinking fund or other
similar fund that is expected to be used to pay principal of or interest on the Notes has been established or
is expected to be established.
Section 3.10 Reserve, Replacement and Pledged Funds.
(a) No Reserve Fund. No reserve fund has been or will be established for the Notes.
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(b) No Replacement or Pledged Funds. None of the Note proceeds will be used as a
substitute for other funds that were intended or earmarked to pay costs of the Financed Improvements,
and that instead has been or will be used to acquire higher yielding Investments. Except for the Debt
Service Account, there are no other funds pledged or committed in a manner that provides a reasonable
assurance that such funds would be available for payment of the principal of or interest on the Notes if the
Issuer encounters financial difficulty.
Section 3.11 Purchase Prices and Yield on Notes.
(a) Purchase Prices. In the Purchaser's Receipt and Representations attached to this tax
Certificate as Exhibit C, the Purchaser has certified that it has committed to purchase the Notes as
principal for its own account, has not acted as agent for any person or entity, and, as of the date hereof,
has not sold and has no present intention to sell the Notes to any person. The initial aggregate purchase
price of the Notes is $4,615,000.
(b) Note Yield. Based on the purchase prices, the Yield on the Notes is 0.99730%, as
computed by Bond Counsel and shown on Schedule 1 attached to this Certificate. The Issuer has not
entered into an interest rate swap agreement with respect to any portion of the proceeds of the Notes.
(c) No Purpose Investment. The proceeds of the Notes will not be used to purchase an
Investment for the purpose of carrying out the governmental purpose of the financing.
Section 3.12 Miscellaneous Arbitrage Matters.
(a) No Abusive Arbitrage Device. The Notes are not and will not be part of a transaction or
series of transactions that has the effect of (1) enabling the Issuer to exploit the difference between tax-
exempt and taxable interest rates to gain a material financial advantage, and (2) overburdening the tax-
exempt bond market.
(b) No Over-Issuance. The sale proceeds of the Notes, together with expected Investment
earnings thereon and other money contributed by the Issuer, do not exceed the cost of the governmental
purpose of the Notes as described above.
Section 3.13 Conclusion. On the basis of the facts, estimates and circumstances set forth in
this Tax Certificate, the Issuer does not expect that the Note proceeds will be used in a manner that would
cause any Note to be an "arbitrage bond" within the meaning of Code § 148 and the Regulations.
ARTICLE IV
TAX COMPLIANCE POLICIES AND PROCEDURES
Section 4.01 General.
(a) Purpose of Article. The purpose of this Article is to supplement the Tax Compliance
Procedure and to set out specific policies and procedures governing compliance with the federal income
tax requirements that apply after the Notes are issued. The Issuer recognizes that interest on the Notes
will remain excludable from gross income only if the Post-Issuance Tax Requirements are followed after
the Issue Date. The Issuer further acknowledges that written evidence substantiating compliance with the
Post-Issuance Tax Requirements must be retained in order to permit the Notes to be refinanced with tax-
13
exempt obligations and substantiate the position that interest on the Notes is exempt from gross income in
the event of an audit of the Notes by the IRS.
(b) Written Policies and Procedures of the Issuer. The Issuer intends for the Tax
Compliance Procedure, as supplemented by this Tax Certificate, to be its primary written policies and
procedures for monitoring compliance with the Post-Issuance Tax Requirements for the Notes and to
supplement any other formal policies and procedures related to the Post-Issuance Requirements that the
Issuer has established or establishes in the future. The provisions of this Tax Certificate are intended to be
consistent with the Tax Compliance Procedure. In the event of any inconsistency between the Tax
Compliance Procedure and this Tax Certificate, the terms of this Tax Certificate will govern.
(c) Bond Compliance Officer. The Issuer when necessary to fulfill the Post-Issuance Tax
Requirements will, through its Bond Compliance Officer, sign Form 8038-T in connection with the
payment of arbitrage rebate or yield reduction payments, participate in any federal income tax audit of the
Notes or related proceedings under a voluntary compliance agreement procedures (VCAP) or undertake a
remedial action procedure pursuant to Regulations § 1.141-12. In each case, all costs and expenses
incurred by the Issuer shall be treated as a reasonable cost of administering the Notes and the Issuer shall
be entitled to reimbursement and recovery of its costs to the same extent as provided in the Note
Resolution or State law.
Section 4.02 Record Keeping; Use of Note Proceeds and Use of Financed Improvements.
(a) Record Keeping. The Bond Compliance Officer will maintain the Tax-Exempt Bond File
for the Notes in accordance with the Tax Compliance Procedure. Unless otherwise specifically instructed
in a written Opinion of Bond Counsel or to the extent otherwise provided in this Tax Certificate, the Bond
Compliance Officer shall retain records related to the Post-Issuance Tax Requirements until 3 years
following the final maturity of (1) the Notes or (2) any obligation issued to refund the Notes. Any records
maintained electronically must comply with Section 4.01 of Revenue Procedure 97-22, which generally
provides that an electronic storage system must (A) ensure an accurate and complete transfer of the
hardcopy records which indexes, stores, preserves, retrieves and reproduces the electronic records, (B)
include reasonable controls to ensure integrity, accuracy and reliability of the electronic storage system
and to prevent unauthorized alteration or deterioration of electronic records, (C) exhibit a high degree of
legibility and readability both electronically and in hardcopy, (D) provide support for other books and
records of the Issuer and (5) not be subject to any agreement that would limit the ability of the IRS to
access and use the electronic storage system on the Issuer's premises.
(b) Accounting and Allocation of Note Proceeds to Expenditures. The Bond Compliance
Officer will account for the investment and expenditure of Note proceeds in the level of detail required by
the Tax Compliance Procedure. The expected allocation of Note proceeds to Project expenditures is set
forth on Exhibit D attached to this Tax Certificate. After completion of the Improvements, the Bond
Compliance Officer will supplement the expected allocation of Note proceeds to expenditures with a
Final Allocation as required by the Tax Compliance Procedure. A sample form of Final Allocation is
attached to this Tax Certificate as Exhibit F.
( c) Annual Compliance Checklist. A sample form of Annual Compliance Checklist is
attached as Exhibit E. After completion of the Improvements, the Bond Compliance Officer will prepare
and complete an Annual Compliance Checklist for the Financed Improvements at least annually in
accordance with the Tax Compliance Procedure. In the event the Annual Compliance Checklist identifies
a deficiency in compliance with the requirements of this Tax Certificate, the Bond Compliance Officer
will take the actions identified in an Opinion of Bond Counsel or Section 4.4 of the Tax Compliance
Procedure to correct any deficiency.
14
( d) Opinions of Bond Counsel. The Bond Compliance Officer is responsible for obtaining
and delivering to the Issuer any Opinion of Bond Counsel required under the provisions of this Tax
Certificate or the Annual Compliance Checklist.
Section 4.03 Restrictions on Investment Yield. Except as described below, Gross Proceeds
must not be invested at a Yield greater than the Yield on the Notes:
(a) Improvement Fund. Note proceeds deposited in the Improvement Fund and Investment
earnings on those proceeds may be invested without Yield restriction for up to 3 years following the Issue
Date. If any unspent proceeds remain in such fund after 3 years, those amounts may continue to be
invested without Yield restriction so long as the Issuer pays to the IRS all Yield reduction payments in
accordance with Regulations § 1.148-5(c). These payments are required whether or not the Notes are
exempt from the arbitrage rebate requirements of Code § 148.
(b) Debt Service Account. To the extent that the Debt Service Account qualifies as a Bona
Fide Debt Service Fund, money in such account may be invested without Yield restriction for 13 months
after the date of deposit. Earnings on such amounts may be invested without Yield restriction for 1 year
after the date of receipt of such earnings.
( c) Rebate Fund. Money other than sale proceeds or Investment proceeds of the Notes on
deposit in the Rebate Fund may be invested without Yield restriction.
(d) Minor Portion. In addition to the amounts described above, Gross Proceeds not
exceeding the Minor Portion may be invested without Yield restriction.
Section 4.04 Procedures for Establishing Fair Market Value of Investments.
(a) General. No Investment may be acquired with Gross Proceeds for an amount (including
transaction costs) in excess of the fair market value of such Investment, or sold or otherwise disposed of
for an amount (including transaction costs) less than the fair market value of the Investment. The fair
market value of any Investment is the price a willing buyer would pay to a willing seller to acquire the
Investment in a bona fide, arm's-length transaction. Fair market value will be determined in accordance
with Regulations § 1.148-5.
(b) Established Securities Market. Except for Investments purchased for a yield-restricted
defeasance escrow, if an Investment is purchased or sold in an arm's-length transaction on an established
securities market (within the meaning of Code § 1273), the purchase or sale price constitutes the fair
market value. Where there is no established securities market for an Investment, market value must be
established using one of the paragraphs below. The fair market value of Investments purchased for a
Yield-restricted defeasance escrow must be determined in a bona fide solicitation for bids that complies
with Regulations § 1.148-5.
(c) Certificates of Deposit. The purchase price of a certificate of deposit (a "CD") is treated
as its fair market value on the purchase date if (1) the CD has a fixed interest rate, a fixed payment
schedule, and a substantial penalty for early withdrawal, (2) the Yield on the CD is not less than the Yield
on reasonably comparable direct obligations of the United States, and (3) the Yield is not less than the
highest Yield published or posted by the CD issuer to be currently available on reasonably comparable
CDs offered to the public.
15
(d) Guaranteed Investment Contracts. The Issuer is applying Regulations § 1.148-
5(d)(6)(iii)(A) as amended by the Proposed Regulations (relating to electronic bidding of Guaranteed
Investment Contracts) to the Notes. The purchase price of a Guaranteed Investment Contract is treated as
its fair market value on the purchase date if all of the following requirements are met:
(1) Bona Fide Solicitation for Bids. The Issuer makes a bona fide solicitation for the
Guaranteed Investment Contract, using the following procedures:
(A) The bid specifications are in writing and are timely forwarded to
potential providers, or are made available on an internet website or other similar
electronic media that is regularly used to post bid specifications to potential bidders. A
writing includes a hard copy, a fax, or an electronic e-mail copy.
(B) The bid specifications include all "material" terms of the bid. A term is
material if it may directly or indirectly affect the yield or the cost of the Guaranteed
Investment Contract.
(C) The bid specifications include a statement notifying potential providers
that submission of a bid is a representation (i) that the potential provider did not consult
with any other potential provider about its bid, (ii) that the bid was determined without
regard to any other formal or informal agreement that the potential provider has with the
Issuer, or any other person (whether or not in connection with the bond issue), and (iii)
that the bid is not being submitted solely as a courtesy to the Issuer, or any other person,
for purposes of satisfying the requirements of the Regulations.
(D) The terms of the bid specifications are "commercially reasonable." A
term is commercially reasonable if there is a legitimate business purpose for the term
other than to increase the purchase price or reduce the yield of the Guaranteed Investment
Contract.
(E) The terms of the solicitation take into account the Issuer's reasonably
expected deposit and draw-down schedule for the amounts to be invested.
(F) All potential providers have an equal opportunity to bid. If the bidding
process affords any opportunity for a potential provider to review other bids before
providing a bid, then providers have an equal opportunity to bid only if all potential
providers have an equal opportunity to review other bids. Thus, no potential provider
may be given an opportunity to review other bids that is not equally given to all potential
providers (that is no exclusive "last look").
(G) At least 3 "reasonably competitive providers" are solicited for bids. A
reasonably competitive provider is a provider that has an established industry reputation
as a competitive provider of the type of investments being purchased.
(2) Bids Received. The bids received by the Issuer must meet all of the following
requirements:
(A) The Issuer receives at least 3 bids from providers that were solicited as
described above and that do not have a "material financial interest" in the issue. For this
purpose, (i) a lead underwriter in a negotiated underwriting transaction is deemed to have
a material financial interest in the issue until 15 days after the issue date of the issue, (ii)
16
any entity acting as a financial advisor with respect to the purchase of the Guaranteed
Investment Contract at the time the bid specifications are forwarded to potential providers
has a material financial interest in the issue, and (iii) a provider that is a related party to a
provider that has a material financial interest in the issue is deemed to have a material
financial interest in the issue.
(B) At least 1 of the 3 bids received is from a reasonably competitive
provider, as defined above.
(C) If the Issuer uses an agent or broker to conduct the bidding process, the
agent or broker did not bid to provide the Guaranteed Investment Contract.
(3) Winning Bid. The winning bid is the highest yielding bona fide bid (determined
net of any broker's fees).
(4) Fees Paid. The obligor on the Guaranteed Investment Contract certifies the
administrative costs that it pays (or expects to pay, if any) to third parties in connection with
supplying the Guaranteed Investment Contract.
(5) Records. The Issuer retains the following records with the bond documents until
3 years after the last outstanding Note is redeemed:
(A) A copy of the Guaranteed Investment Contract.
(B) The receipt or other record of the amount actually paid by the Issuer for
the Guaranteed Investment Contract, including a record of any administrative costs paid
by the Issuer, and the certification as to fees paid, described in paragraph (d)(4) above.
(C) For each bid that is submitted, the name of the person and entity
submitting the bid, the time and date of the bid, and the bid results.
(D) The bid solicitation form and, if the terms of the Guaranteed Investment
Contract deviated from the bid solicitation form or a submitted bid is modified, a brief
statement explaining the deviation and stating the purpose for the deviation.
(e) Other Investments. If an Investment is not described above, the fair market value may
be established through a competitive bidding process, as follows:
(1) At least 3 bids on the Investment must be received from persons with no financial
interest in the Notes (e.g., as underwriters or brokers); and
(2) the Yield on the Investment must be equal to or greater than the Yield offered
under the highest bid.
Section 4.05 Certain Gross Proceeds Exempt from the Rebate Requirement.
(a) General. A portion of the Gross Proceeds of the Notes may be ·exempt from rebate
pursuant to one or more of the following exceptions. The exceptions typically will not apply with respect
to all Gross Proceeds of the Notes and will not otherwise affect the application of the Investment
limitations described in Section 4.03. Unless specifically noted, the obligation to compute, and if
necessary, to pay rebate as set forth in Section 4. 06 applies even if a portion of the Gross Proceeds of the
17
Notes is exempt from the rebate requirement. To the extent all or a portion of the Notes is exempt from
rebate the Rebate Analyst may account for such fact in connection with its preparation of a rebate report
described in Section 4.06. The Issuer may defer the final rebate Computation Date and the payment of
rebate for the Notes to the extent permitted by Regulations§§ 1.148-7(b)(l) and 1.148-3(e)(2) but only in
accordance with specific written instructions provided by the Rebate Analyst.
(b) Applicable Spending Exceptions.
(1) The Issuer expects that at least 7 5% of the Available Construction Proceeds will
be used for construction or rehabilitation expenditures for property owned by the Issuer.
(2) The following optional rebate spending exceptions can apply to the Notes:
(A)
§ 1.148-7(c)).
(B)
(C)
§ 1.148-7(e)).
6-month spending exception (Code § 148(f)(4)(B) and Regulations
18-month spending exception (Regulations§ 1.148-7(d)).
2-year spending exception (Code § 148(f)(4)(C) and Regulations
(c) Special Elections Made with Respect to Spending Exception Elections. No special
elections are being made in connection with the application of the spending exceptions.
( d) Bona Fide Debt Service Fund. To the extent that the Debt Service Account qualifies as a
Bona Fide Debt Service Fund, Investment earnings in the Debt Service Account cannot be taken into
account in computing arbitrage rebate: (1) with respect to such portion that meets the 6-month, or (2) for
a given Note Year, if the gross earnings on the Debt Service Account for such Note Year are less than
$100,000. If the average annual debt service on the Notes does not exceed $2,500,000, the $100,000
earnings test may be treated as satisfied in every Note Year.
( e) Documenting Application of Spending Exception. At any time prior to the first
Computation Date, the Issuer may engage the Rebate Analyst to determine whether one or more spending
exceptions has been satisfied, and the extent to which the Issuer must continue to comply with
Section 4.06.
(f) General Requirements for Spending Exception. The following general requirements
apply in determining whether a spending exception is met:
(1) Using Adjusted Gross Proceeds or Available Construction Proceeds to pay
principal of any Note is not taken into account as an expenditure for purposes of meeting any of
the spending tests.
(2) The six-month spending exception generally is met if all Adjusted Gross
Proceeds of the Notes are spent within 6 months following the Issue Date. The test may still be
satisfied even if up to 5% of the sale proceeds remain at the end of the initial six-month period, so
long as this amount is spent within one year of the Issue Date.
(3) The 18-month spending exception generally is met if all Adjusted Gross
Proceeds of the Notes are spent in accordance with the following schedule:
18
Time Period
After the
Issue Date
6 months
12 months
18 months (Final)
Minimum
Percentage of
Adjusted Gross
Proceeds Spent
15%
60%
100%
(4) The 2-year spending exception generally is met if all Available Construction
Proceeds are spent in accordance with the following schedule:
Time Period
After the
Issue Date
6 months
12 months
18 months
24 months (Final)
Minimum
Percentage of
Available Construction
Proceeds Spent
10%
45%
75%
100%
(5) For purposes of applying the 18-month and 2 year spending exceptions only, the
failure to satisfy the final spending requirement is disregarded if the Issuer uses due diligence to
complete the Financed Improvements and the failure does not exceed the lesser of 3% of the
aggregate issue price the Notes or $250,000. No such exception applies for any other spending
period.
(6) For purposes of applying the 18-month and 2 year spending exceptions only, the
Notes meet the applicable spending test even if, at the end of the final spending period, proceeds
not exceeding a Reasonable Retainage remain unspent, so long as such Reasonable Retainage is
spent within 30 months (in the case of the 18-month exception) or 3 years (in the case of the 2
year spending test) after the Issue Date.
Section 4.06 Computation and Payment of Arbitrage Rebate.
(a) Rebate Fund. The Issuer will keep the Rebate Fund separate from all other funds and
will administer the Rebate Fund under this Tax Certificate. Any Investment earnings derived from the
Rebate Fund will be credited to the Rebate Fund, and any Investment loss will be charged to the Rebate
Fund.
(b) Computation of Rebate Amount. The Issuer will provide the Rebate Analyst Investment
reports relating to each fund held by it that contains Gross Proceeds of the Notes together with copies of
Investment reports for any funds containing Gross Proceeds that are held by a party other than the Issuer
annually as of the end of each Note Year and not later than 10 days following each Computation Date.
Each Investment report provided to the Rebate Analyst will contain a record of each Investment,
including (1) purchase date, (2) purchase price, (3) information establishing the fair market value on the
date such Investment was allocated to the Notes, (4) any accrued interest paid, (5) face amount, (6)
coupon rate, (7) frequency of interest payments, (8) disposition price, (9) any accrued interest received,
and (10) disposition date. Such records may be supplied in electronic form. The Rebate Analyst will
compute rebate following each Computation Date and deliver a written report to the Issuer together with
an opinion or certificate of the Rebate Analyst stating that arbitrage rebate was determined in accordance
19
with the Regulations. Each report and opinion will be provided not later than 45 days following the
Computation Date to which it relates. In performing its duties, the Rebate Analyst may rely, in its
discretion, on the correctness of financial analysis reports prepared by other professionals.
(c) Rebate Payments. Within 60 days after each Computation Date, the Issuer will pay to
the United States the rebate amount then due, determined in accordance with the Regulations. Each
payment must be (1) accompanied by IRS Form 8038-T and such other forms, documents or certificates
as may be required by the Regulations, and (2) mailed or delivered to the IRS at the address shown below,
or to such other location as the IRS may direct:
Internal Revenue Service Center
Ogden, UT 84201
( d) Successor Rebate Analyst. If the firm acting as the Rebate Analyst resigns or becomes
incapable of acting for any reason, or if the Issuer desires that a different firm act as the Rebate Analyst,
then the Issuer by an instrument or concurrent instruments in writing delivered to the firm then serving as
the Rebate Analyst and any other party to this Tax Certificate, will name a successor Rebate Analyst. In
each case the successor Rebate Analyst must be a firm of nationally recognized bond counsel or a firm of
independent certified public accountants and such firm must expressly agree to undertake the
responsibilities assigned to the Rebate Analyst hereunder.
(e) Filing Requirements. The Issuer will file or cause to be filed with the IRS such reports
or other documents as are required by the Code in accordance with an Opinion of Bond Counsel.
(f) Survival after Defeasance. Notwithstanding anything in the Note Resolution to the
contrary, the obligation to pay arbitrage rebate to the United States will survive the payment or
defeasance of the Notes.
ARTICLEV
MISCELLANEOUS PROVISIONS
Section 5.01 Term of Tax Certificate. This Tax Certificate will be effective concurrently
with the issuance and delivery of the Notes and will continue in force and effect until the principal of,
redemption premium, if any, and interest on all Notes have been fully paid and all such Notes are
cancelled; provided that the provisions of Section 4.06 of this Tax Certificate regarding payment of
arbitrage rebate and all related penalties and interest will remain in effect until all such amounts are paid
to the United States and the provisions in Section 4.02 relating to record keeping shall continue in force
for the period described therein for records to be retained.
Section 5.02 Amendments. This Tax Certificate may be amended from time to time by the
Issuer without notice to or the consent of any of the Noteowners, but only if such amendment is in writing
and is accompanied by an Opinion of Bond Counsel to the effect that, under then existing law, assuming
compliance with this Tax Certificate as so amended and the Note Resolution, such amendment will not
cause any Note to be an arbitrage bond under Code § 148 or otherwise cause interest on any Note to be
included in gross income for federal income tax purposes. No amendment will become effective until the
Issuer receives an Opinion of Bond Counsel, addressed to the Issuer that the amendment will not
adversely affect the exclusion of the interest on the Notes from gross income for federal income tax
purposes.
20
Section 5.03 Opinion of Bond Counsel. The Issuer may deviate from the provisions of this
Tax Certificate if furnished with an Opinion of Bond Counsel to the effect that the proposed deviation
will not adversely affect the exclusion of interest on the Notes from gross income for federal income tax
purposes. The Issuer further agrees to comply with any further or different instructions provided in an
Opinion of Bond Counsel to the effect that the further or different instructions need to be complied with
in order to maintain the validity of the Notes or the exclusion from gross income of interest on the Notes.
Section 5.04 Reliance. In delivering this Tax Certificate the Issuer is making only those
certifications, representations and agreements as are specifically attributed to them in this Tax Certificate.
The Issuer is not aware of any facts or circumstances which would cause it to question the accuracy of the
facts, circumstances, estimates or expectations of any other party providing certifications as part of this
Tax Certificate and, to the best of its knowledge, those facts, circumstances, estimates and expectations
are reasonable. The Issuer understands that its certifications will be relied upon by Bond Counsel in
rendering its opinion as to the validity of the Notes and the exclusion from federal gross income of the
interest on the Notes.
Section 5.05 Severability. If any provlSlon in this Tax Certificate or in the Notes is
determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions will not be affected or impaired.
Section 5.06 Benefit of Certificate. This Tax Certificate is binding upon the Issuer, its
respective successors and assigns, and inures to the benefit of the Issuer and the owners of the Notes.
Nothing in this Tax Certificate, the Note Resolution or the Notes, express or implied, gives to any person,
other than the Issuer, its successors and assigns, and the owners of the Notes, any benefit or any legal or
equitable right, remedy or claim under this Tax Certificate.
Section 5.07 Default, Breach and Enforcement. Any misrepresentation of a party contained
herein or any breach of a covenant or agreement contained in this Tax Certificate may be pursued by the
Noteowners pursuant to the terms of the Note Resolution or any other document which references this
Tax Certificate and gives remedies for a misrepresentation or breach thereof.
Section 5.08 Governing Law. This Tax Certificate will be governed by and construed in
accordance with the laws of the State.
Section 5.09 Electronic Transactions. The transactions described in this Tax Certificate may
be conducted, and related documents may be stored, by electronic means.
[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
21
VIA FEDERAL EXPRESS
Internal Revenue Service Center
Ogden, Utah 84201
/j
GILMOI\_EBELL
GILMORE & BELL PC
2405 GRAND BOULEVARD. SUITE 1100
KANSAS CITY, MISSOURI 64108-2521
816-221-1000 I 816-221-1018 FAX
GILMOREBELL.COM
August 16, 2016
Ref: 600596.60155 GMR Dale: 16Aus16
Dep : Wg l : 1 . 00 LBS
DV:
Svcs: ** 2DAY **
SHIPPING:
SPECIAL:
HANDLING:
0.00 TOTAL:
TRCK: 6658 3446 8744
Re: City of Salina, Kansas General Obligation Temporary Notes, Series 2016-2
Ladies and Gentlemen:
Enclosed for filing pursuant to Section 149(e) of the Internal Revenue Code of 1986 Form 8038-
G, Information Return for Tax-Exempt Governmental Obligations, being filed with respect to the above-
captioned transaction.
If you have any questions, please do not hesitate to contact me.
GMR:jac
Enclosure
600596.60 I 55
Very truly yours,
Gina M. Riekhof
11.55
0.29
0.00
11.84
Fed
August 24,2016
Dear Customer:
The following is the proof-of-delivery for tracking number 665834468744.
Delivery Information:
Status:
Signed for by:
Service type:
Special Handling:
Shipping Information:
Tracking number:
Recipient:
Delivered
R.SCHWINGHAMMER
FedEx 2Day
Deliver Weekday
No Signature Required
665834468744
INTERNAL REVENUE SERVICE CENTER
1973 N. RULON WHITE BLVD.
OGDEN , UT 84201 US
Reference
Thank you for choosing FedEx.
Delivered to:
Delivery location:
Delivery date:
Ship date:
Weight:
Shipper:
Gilmore & Bell
Gilmore & Bell, P.C.
2405 Grand Boulevard
Suite 1100
Kansas City, MO 64108 US
600596.60155 GMR
Shipping/Receiving
1973 RULON WHITE BLVD
OGDEN, UT 84201
Aug 17, 2016 09:53
Aug 16, 2016
0.5 lbs/0.2 kg
Form8038•G Information Return for Tax-Exempt Governmental Obligations
(Rev. September 2011)
Department of the Treasury
Internal Revenue Service
.,. Under Internal Revenue Code section 149(e)
.,. See separate Instructions. OMB No. 1545-0720
Caution: If the issue price is under $100,000, use Form 8038-GC.
Reporting Authority If Amended Return, check here .... D
1 Issuer's name 2 Issuer's employer identification number (EIN)
City of Salina, Kansas 48-6017288
3a Name of person (other than issuer) with whom the IRS may communicate about this return (see Instructions)
Gina M. Riekhof, Gilmore & Bell, P.C., Bond Counsel
3b Telephone number of other person shown on 3a
816-221-1000
4 Number and street (or P .0. box If mail Is not delivered to street address)
2405 Grand Boulevard
6 City, town, or post office, state, and ZIP code
Kansas City, MO 64108
B Name of issue General Obligation Temporary Notes, Series 2016-2
Room/suite
1100
10a Name and title of officer or other employee of the issuer whom the IRS may call for more information (see
instructions)
Michelle Meyer, Director of Finance and Administration
5 Report number (For IRS Use Only)
3
7 Date of issue
07/20/2016
9 CUSIP number
None
1 Db Telephone number of officer or other
employee shown on 10a
785-309-5735
Type of Issue (enter the issue price). See the instructions and attach schedule.
11 Education.
12 Health and hospital
13 Transportation .
14
15
16
Public safety .
Environment (including sewage bonds)
Housing
Utilities
.·. ·, ..
17
18
19
Other. Describe .... Public Improvements • Recreation and Associated Infrastructure
If obligations are TANs or RANs, check only box 19a
20
If obligations are BANs, check only box 19b
If obligations are in the form of a lease or installment sale, check box
(b) Issue price (c) Stated redemption
price at maturity
·,
(cl) Weighted
average maturity
11
12
13
14
15
16
17
18 4,615,000
(e)Yieid
•
09/01/2019 4,615,000 4,615,000 3.114 ears 0.9973 %
22
23
24
25
26
27
28
29
30
31
32
33
34
Uses of Proceeds of Bond Issue (including underwriters' discount)
Proceeds used for accrued interest 22 0
Issue price of entire issue (enter amount from line 21, column (b)) 23 4,615,000 +------+---Proceeds used for bond issuance costs (including underwriters' discount). 24 13,324
Proceeds used for credit enhancement . ~2"'5-+-------1>----1
Proceeds allocated to reasonably required reserve or replacement fund 1--2_6-+-------1f----1
Proceeds used to currently refund prior issues ~2"-7-+-------1f----1
Proceeds used to advance refund prior issues .__28_.._ ____ ....__-1
Total (add lines 24 through 28) . 1--29_. ___ 1_3..:..,3_2_4-1---
Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) 30 4,601,676
Enter the remaining weighted average maturity of the bonds to be currently refunded .
Enter the remaining weighted average maturity of the bonds to be advance refunded .
Enter the last date on which the refunded bonds will be called (MM/DDIYYYY)
Enter the date(s) the refunded bonds were issued .... (MM/DD!YYYY)
years
years
For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 63773$ Form 8038-G (Rev. 9-2011)
Form 8038-G (Rev. 9-2011) Page2
Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141 (b)(S)
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract
(GIC) (see instructions) . . . . . . . . . • .
b Enter the final maturity date of the GIG..,.--------------
Enter the name of the GIC provider..,. c
37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans
to other governmental units . . . . . . . . . .
35 -36a
37
38a If this issue is a loan made from the proceeds of another tax-exempt issue, check box ..,. 0 and enter the following information:
b Enter the date of the master pool obligation..,. --------------------
c Enter the EIN of the issuer of the master pool obligation..,.----------------
d Enter the name of the issuer of the master pool obligation..,. ----------------
39 If the issuer has designated the issue under section 265(b)(3)(B)(i)(lll) (small issuer exception), check box
40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . .
41a If the issuer has identified a hedge, check here..,. 0 and enter the following information:
b Name of hedge provider ..,.
c Type of hedge..,. ------------------
d Term of hedge..,. ------------------
....
.... D
D
42 If the issuer has superintegrated the hedge, check box . ..,. D
43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated
according to the requirements under the Code and Regulations (see instructions), check box . ..,. !Z]
44 If the issuer has established written procedures to monitor the requirements of section 148, check box . . . ..,. 0
45a If some portion of the proceeds was used to reimburse expenditures, check here ..,. D and enter the amount
of reimbursement . . ..,.
b Enter the date the official intent was adopted..,. -------------------
Signature
and
Consent
Paid
Preparer
Use Only
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge
and belief, they are true, correct, and complete. I further declare that I consent to the IRS's disclosure of the Issuer's return information, as necessary to
process thi tu ( to the person that I have authorized above.
Check 0 If PTIN
James Dummitt self-employed P01062537
Firm's EIN ... 43-1611738
Phone no. 816-221-1000
Form 8038-G (Rev. 9·2011)
072280
~
IRS
Department of Treasury
Internal Revenue Service
Ogden UT 84201-0074
Notice CP152
Tax period July 31, 2016
Notice date September 26, 2016
·~~~~~~~~~~~~
Employer ID number 48-6017288
To contact us Phone 1-877-829-5500
FAX 801-620-5555
072280.543100.68495.28633 1 AT 0.399 373
11111 111 II11' 11I11 1II11 1I1I11I11! 11h 11IIII1IIIII111l 11111II1I1ll
Page 1 of 1
CITY OF SALINA KANSAS
% ROD FRANZ FINANCE DIRECTOR
2405 GRAND BLVD STE 1100
KANSAS CITY MO 64108-2521
Acknowledgment of your July 20, 2016 Form 8038-G
We received your tax-exen1pt bond forn1
This notice serves as official acknowledgment
that we received your Form 8038-G. If you filed
more than one form, you will receive a separate
acknowledgment for each one.
Important reminders
Additional information
Tax-exempt bond information
Name of issue
CUSIP number
Issue date
Issue price
Maturity date
GENERAL OBLIGATION TEMPORARY NOTES
NONE
July 20, 2016
$4,615,000.00
September 1, 2019
• Attach a copy of this notice to all of your correspondence and documents related to
this tax-exempt bond.
• If a tax practitioner or someone else prepared your form, you may want to give them
a copy of this notice. (A copy was automatically sent to all representatives
authorized with a Power-of-Attorney for this form.)
• Visit www.irs.gov/cp152.
• For tax forms, instructions, and publications, visit www.irs.gov or call
1-800-TAX-FORM (1-800-829-3676).
• if you have questions about tax-exempt bonds, call TEGE Customer Account Services
at 1-877-829-5500.
• Keep this notice for your records.
If you need assistance, please don't hesitate to contact us.
EXHIBITB
RECEIPT FOR PURCHASE PRICE
$4,615,000
CITY OF SALINA, KANSAS
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
DATED JULY 20, 2016
The undersigned Director of Finance and Administration of the City of Salina, Kansas (the
"Issuer"), this day received from The Bennington State Bank, Salina, Kansas, the original purchaser of
the above-described notes (the "Series 2016-2 Notes"), the full purchase price of the Series 2016-2 Notes,
said purchase price and net amount received by the Issuer being calculated as follows:
Principal Amount. ................................. .
Plus Accrued Interest ............................ .
Total Purchase Price ................. .
DATED: July 20, 2016.
B-1
$4,615,000.00
0.00
$4,615,000.00
CITY OF SALINA, KANSAS
C-1
EXHIBIT C
RECEIPT AND REPRESENTATION
$4,615,000
CITY OF SALINA, KANSAS
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
DATED JULY 20, 2016
This certificate is being delivered by The Bennington State Bank, Salina, Kansas (the
“Purchaser”) as original purchaser of the above-described notes (the “Notes”), being issued on the date of
this Receipt (the “Issue Date”) by the City of Salina, Kansas (the “Issuer”), certifies and represents as
follows:
1. Authorized Representative. The undersigned is the duly authorized representative of
the Purchaser.
2. Receipt for Notes. The Purchaser acknowledges receipt on the Issue Date, consisting of
fully registered notes in Authorized Denominations in a form acceptable to the Purchaser.
3. No Public Offering or Present Intent to Resell. The Purchaser has purchased all of the
Notes as principal for its own account and has not acted as agent for any person or entity. As of the date
hereof, the Purchaser has not sold and has no present intention to sell the Notes to any person. The
aggregate purchase price for the Notes is $4,615,000, plus accrued interest (the “Purchase Price”). The
Purchase Price for the Notes was established based on bona fide arm’s length negotiations between the
Issuer and the Purchaser and was established without regard to any other services, products, or assets are
being delivered by either party to the other in other transactions, if any.
4. Compliance with Note Purchase Agreement. The Purchaser acknowledges that it has
timely received in satisfactory form and manner all proceedings, certificates, opinions, letters and other
documents required to be submitted to it pursuant to the Note Purchase Agreement on the date of the
delivery of and payment for the Notes (except to the extent the Purchaser has waived or consented to
modification of certain provisions thereof), and that the Issuer has in all respects complied with and
satisfied all of its obligations to us which are required under the Note Purchase Agreement to be complied
with and satisfied on or before the date hereof.
5. Reliance. The Issuer may rely on the foregoing representations in executing and
delivering its Federal Tax Certificate with respect to its certification as to issue price of the Notes under
the Internal Revenue Code of 1986, as amended (the “Code”), and Gilmore & Bell, P.C., Bond Counsel
may rely on the foregoing representations in rendering its opinion relating to the exclusion from federal
gross income of the interest on the Notes under the Code.
[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
Dated: July 20, 2016.
THE BENNINGTON STATE BANK
SALINA, KANSAS
(Signature Page to Purchaser's Receipt)
EXHIBITD
DESCRIPTION OF PROPERTY COMPRISING THE FINANCED IMPROVEMENTS
$4,615,000
CITY OF SALINA, KANSAS
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
DATED JULY 20, 2016
EXHIBIT D TO FEDERAL TAX CERTIFICATE
Description of Property Comprising the Financed Facility
Series 2016-2 Project -Salina Fieldhouse Project -69,000 sq. ft. multisport athletic complex and related infrastructure
Original
Economic
Asset Description Life
Land Acquisition
General Contractor 40
Site Improvements 20
Soft Costs (architect, engineer,
environmental, misc.) 40
FF&E 10
Less land costs
Net costs, excluding land
Original Average, Reasonably Expected Economic Life:
120% of Original Economic Life
Note Proceeds Allocated to Project Costs*
Other Money Allocated to Project Costs
Total Pro"ect Costs
Estimated
Placed in
Service
Date
June-17
June-17
June-17
June-17
July-17
120%
Elapsed Estimated
Time Remaining
from Economic
Issue Date Life
0.94 40.94
0.94 20.94
0.94 40.94
0.95 10.95
37.03 years
44.44
* Includes approximately $100,000 of capitalized interest to be paid from Note proceeds.
**Based on final budget
Salina, KS, 2016-2 GO Temp Notes D-1
Asset
Type
Land
Building
Other
Other
Other
Cost
681,109
6,894,000
733,596
2,559,265
965,000
11,832,970
{681,109}
11,151,861
4,601,676
7,231,294
11,832,970
Economic
Lifex
Financed
Cost
282,240,360
15,361,500
104,776,309
10,566,750
412,944,919
38.9%
61.1%
July 20, 2016
EXHIBITE
SAMPLE ANNUAL COMPLIANCE CHECKLIST
$4,615,000
CITY OF SALINA, KANSAS
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
DATED JULY 20, 2016
The Bond Compliance Officer is the person that the Issuer has identified in the Tax Compliance
Procedure who is primarily responsible for working with other Issuer officials, departments and
administrators and for consulting with Bond Counsel, other legal counsel and outside experts to the
extent necessary to carry out the Post-Issuance Tax Requirements for the Notes. On the Issue Date,
the Issuer identified certain assets financed in whole or in part by the Notes (the "Financed
Improvements"), as evidenced on Exhibit D to the Federal Tax Certificate. Please complete this
checklist within 90 days after the conclusion of the Issuer's Fiscal Year. Should you have questions
or need assistance in completing the checklist, please contact Bond Counsel at the address below. A
completed copy of this annual checklist should be placed in the Tax-Exempt Bond File and retained
in the Issuer's permanent records for at least 3 years after the final maturity of (1) the Notes or (2)
any obligation issued to refund the Notes.
Bond Compliance Officer Name: [.__ _____ _.
Bond Compliance Officer Signature:
Date of Report: [ ]
Annual Period Covered by Report:
**If the answers to any of the following questions identify any compliance deficiencies, the Bond
Compliance Officer should immediately contact Bond Counsel and take actions required in the Tax
Compliance Procedure.**
Item Question Response
1 Were all of the Financed Improvements owned by the Issuer (or Salina 0Yes
Ownership Field House Qualified Active Low-Income Community Business, Inc.) 0No
during the entire Annual Period?
If answer above was "No," was an Opinion of Bond Counsel obtained 0Yes
prior to the transfer? 0No
If Yes, include a copy of the Opinion in the Tax-Exempt Bond File.
If No, contact Bond Counsel and include description of resolution in the
Tax-Exempt Bond File.
E-1
Item Question Response
2 During the Annual Period, was any part of the Financed Improvements 0Yes
Leases & leased at any time pursuant to a lease or similar agreement for more than 0No
Other Rights 50 days (other than the leases with Salina Field House Qualified Active
to Possession Low-Income Community Business, Inc.)?
If answer above was "Yes," was an Opinion of Bond Counsel obtained 0Yes
prior to entering into the lease or other arrangement? 0No
If Yes, include a copy of the Opinion in the Tax-Exempt Bond File.
If No, contact Bond Counsel and include description of resolution in the
Tax-Exempt Bond File.
3 During the Annual Period, has the management of all or any part of the 0Yes
Management operations of the Financed Improvements (e.g., operations, concessions, 0No
or Service etc.) been assumed by or transferred to another entity?
Agreements
If answer above was "Yes," was an Opinion of Bond Counsel obtained 0Yes
prior to entering into the management agreement? 0No
If Yes, include a copy of the Opinion in the Tax-Exempt Bond File.
If No, contact Bond Counsel and include description ofresolution in the
Tax-Exempt Bond File.
4 Was any other agreement entered into with an individual or entity that 0Yes
Other Use grants special legal rights to the Financed Improvements (other than 0No
Salina Field House Qualified Active Low-Income Community Business,
Inc.)?
If answer above was "Yes," was an Opinion of Bond Counsel obtained 0Yes
prior to entering into the agreement? 0No
If Yes, include a copy of the Opinion in the Tax-Exempt Bond File.
If No, contact Bond Counsel and include description of resolution in the
Tax-Exempt Bond File.
5 Have any Gross Proceeds of the Notes been invested in a Guaranteed 0Yes
Proceeds & Investment Contract? 0No
Investments
Has the Issuer entered into an Interest Rate Swap Agreement with 0Yes
respect to the Notes? 0No
Has any sinking or reserve fund for the payment of the Notes been 0Yes
established (other than funds and accounts created in the Note 0No
Resolution)?
Have any of the Notes been redeemed or refunded in advance of their 0Yes
scheduled maturities? 0No
If answer to any of the above questions was "Yes," notify Bond Counsel
with such information and place a copy of documentation in the Tax-
Exempt Bond File,
E-2
Item
6
Arbitrage
& Rebate
Bond Counsel:
Question
Have all rebate and yield reduction calculations mandated in the Federal
Tax Certificate or Compliance Agreement been prepared for the current
year?
If No, contact Rebate Analyst and incorporate report or include
description ofresolution in the Tax-Exempt Bond File.
Gilmore & Bell, P.C.
2405 Grand Blvd., Suite 1100
Kansas City, MO 64108
Phone: (816) 221-1000
Fax: (816)221-1018
Attn: Gina Riekhof
Email: griekhoj@gilmorebell.com
E-3
Response
0Yes
0No
EXHIBITF
FORM OF FINAL ALLOCATION
$4,615,000
CITY OF SALINA, KANSAS
GENERAL OBLIGATION TEMPORARY NOTES
SERIES 2016-2
DATED JULY 20, 2016
The undersigned is the Director of Finance of the City of Salina, Kansas (the "Issuer") and in that
capacity is authorized to execute federal income tax returns required to be filed by the Issuer and to make
appropriate elections and designations regarding federal income tax matters on behalf of the Issuer. This
allocation of the proceeds of the above-captioned debt obligations (the "Notes") is necessary for the
Issuer to satisfy ongoing reporting and compliance requirements under federal income tax laws.
Purpose. This document, together with the schedules and records referred to below, is intended
to memorialize allocations of Note proceeds to expenditures for purposes of §§ 141 and 148 of the
Internal Revenue Code (the "Code"). All allocations are or were previously made no later than 18 months
following the date the expenditure was made by the Issuer or, if later, the date the "project" was "placed
in service" (both as defined below), and no later than 60 days following the 5th anniversary of the issue
date of the Notes.
Background. The Notes were issued by the Issuer on July 20, 2016 (the "Issue Date") under
Resolution No. 16-7382 duly adopted by the governing body of the Issuer on July 11, 2016. The Note
proceeds, along with other funds, were granted to Salina Field House Lender, Inc., a Kansas nonprofit
corporation and a party unrelated to the Issuer, which used such funds to make a leveraged loan to Chase
NMTC Salina Fieldhouse Investment Fund, LLC (a limited liability company wholly owned by Chase
Community Equity, LLC), which used such amount, along with other funds, to fund a portion of its
99.99% equity investment interests in CNMC Sub-CDE 114, LLC and Dakotas XXII, LLC, which used
this money to fund the various loans to Salina Field House Qualified Active Low-Income Community
Business, Inc., a Kansas nonprofit corporation (the "Corporation"), which used such amounts to pay a
portion of the costs of the Project. The above-described transaction was intended to help facilitate a new-
markets tax credit transaction under Code§ 45D.
Identification of Financed Assets. The portion of the Project financed from Note proceeds (i.e.,
the "Financed Facility" referenced in the Tax Compliance Agreement), as well as the portion of the
Project financed from other funds, is listed on the Attachment to this Final Written Allocation.
Identification and Timing of Expenditures for Arbitrage Purposes. For purposes of complying
with the arbitrage rules, the Issuer allocates the proceeds of the Notes to the various expenditures
described in the invoices, requisitions or other substantiation attached as part of the Attachment to this
Final Written Allocation. In each case, the cost requisitioned was either paid directly to a third party or
reimbursed an amount previously paid or incurred for such purpose. Amounts allocated to interest
expense are treated as paid on the interest payment dates for the Notes.
Placed In Service. The Project was "placed in service" on the date set out the Attachment to this
Final Written Allocation. For this purpose, the assets are considered to be "placed in service" as of the
date on which, based on all the facts and circumstances: (1) the constructing and equipping of the asset
has reached a degree of completion which would permit its operation at substantially its design level; and
(2) the asset is, in fact, in operation at that level.
F-1
This allocation has been prepared based on statutes and regulations existing as of this date. The
Issuer reserves the right to amend this allocation to the extent permitted by future Treasury Regulations or
similar authorities.
CITY OF SALINA, KANSAS
By:
Title:
Dated: ________ _
Name of Legal Counsel/Law Firm Reviewing Final Written Allocation:
Date of Review:
~-------------------
F-2
ATTACHMENT
TO FINAL WRITTEN ALLOCATION
ALLOCATION OF SOURCES AND USES
IDENTIFICATION OF FINANCED ASSETS
DETAILED LISTING OF EXPENDITURES
[Insert Spreadsheet]
SCHEDULE I
DEBT SERVICE SCHEDULE AND PROOF OF YIELD
S-1
City of Salina, Kansas
General Obligation Temporary Notes
Series 2016-2
Net Debt Service Schedule
Date Principal Coupon Interest
07/20/2016
09/01/2017 51,405.97
09/01/2018 46,150.00
09/01/2019 4,615,000.00 1.000% 46,150.00
Total $4,615,000.00 $143, 705.97
2016-2NoteFinal I SINGLE PURPOSE I 7/6/2016 111:37AM
Total P+I CIF Net New D/S Fiscal Total
51,405.97 (51,405.97)
46,150.00 (46,150.00)
4,661,150.00 4,661,150.00 4,661, 150.00
$4, 758, 705.97 (97,555.97) $4,661,150.00
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
George K. Baum & Company
Kansas Public Finance Page 2
City of Salina, Kansas
General Obligation Temporary Notes
Series 2016-2
Pricing Summary
Maturity
Type of
Bond
09/01/2019 Serial Coupon
Total
Bid Information
Par Amount of Bonds
Gross Production
Bid (100.000%)
Total Purchase Price
Bond Year Dollars
Average Life
Average Coupon
Net Interest Cost (NJC)
True Interest Cost (TIC)
Coupon
1.000%
2016-2 Note Final I SINGLE PURPOSE I 7/ 6/2016 I 11 :37 AM
George K. Baum & Company
Yield
1.000%
Maturity
Value
4,615,000.00
$4,615,000.00
Price
100.000%
Dollar Price
4,615,000.00
$4,615,000.00
$4,615,000.00
$4,615,000.00
4,615,000.00
$4,615,000.00
$14,370.60
3.114 Years
1.0000000%
1.0000000%
0.9973085%
Kansas Public Finance Page 3
City of Salina, Kansas
General Obligation Temporary Notes
Series 2016-2
Proof Of Bond Yield @ 0.9973085°/o
Date Cashflow PV Factor
07/20/2016 1.0000000x
09/01/2017 51,405.97 0.9889799x
0910112018 46,150.00 0.9791900x
0910112019 4,661,150.00 0.9694970x
Total $4,758,705.97
Derivation Of Target Amount
Par Amount of Bonds
Original Issue Proceeds
2016-2 Note Final I SINGLE PURPOSE I 716/2016 I 11:37 AM
George K. Baum & Company
Cumulative
Present Value PV
50,839.47 50,839.47
45,189.62 96,029.09
4,518,970.91 4,615,000.00
$4,615,000.00
$4,615,000.00
$4,615,000.00
~
Kansas Public Finance Page 4
816-221-1000 MAIN
816-221-1018 FAX
GILMOREBELL.COM
Governing Body
City of Salina, Kansas
The Bennington State Bank
Salina, Kansas
/J
GILM01'_EBELL
GILMORE & BELL PC
2405 GRAND BOULEVARD, SUITE 1100
KANSAS CITY, MISSOURI 64108-2521
July 20, 2016
ST. LOUIS
WICHITA
OMAHA I LINCOLN
Re: $4,615,000 General Obligation Temporary Notes, Series 2016-2, of the City of Salina,
Kansas, Dated July 20, 2016
We have acted as Bond Counsel in connection with the issuance by the City of Salina, Kansas
(the "Issuer"), of the above-captioned notes (the ''Notes"). In this capacity, we have examined the law
and the certified proceedings, certifications and other documents that we deem necessary to render this
opinion. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the
resolution adopted by the governing body of the Issuer authorizing the issuance of the Notes.
Regarding questions of fact material to our opinion, we have relied on the certified proceedings
and other certifications of public officials and others furnished to us without undertaking to verify them
by independent investigation.
Based upon the foregoing, we are of the opinion, under existing law, as follows:
1. The Notes have been duly authorized, executed and delivered by the Issuer and are valid
and legally binding general obligations of the Issuer.
2. The Notes are payable as to both principal and interest from general obligation bonds of
the Issuer and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or
amount upon all the taxable tangible property, real and personal, within the territorial limits of the Issuer.
The Issuer is required by law to include in its annual tax levy the principal and interest coming due on the
Notes to the extent that necessary funds are not provided from other sources.
3. The interest on the Notes (including any original issue discount properly allocable to an
owner of a Note) is: (a) excludable from gross income for federal income tax purposes; and (b) not an
item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and
corporations, but is taken into account in determining adjusted current earnings for the purpose of
computing the alternative minimum tax imposed on certain corporations. The opinions set forth in this
paragraph are subject to the condition that the Issuer complies with all requirements of the Internal
Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the
Notes in order that interest thereon be, or continue to be, excludable from gross income for federal
income tax purposes. The Issuer has covenanted to comply with all of these requirements. Failure to
comply with certain of these requirements may cause interest on the Notes to be included in gross income
for federal income tax purposes retroactive to the date of issuance of the Notes. The Notes have not been
designated as "qualified tax-exempt obligations" within the meaning of Code § 265(b )(3). We express no
opinion regarding other federal tax consequences arising with respect to the Notes.
4. The interest on the Notes is exempt from income taxation by the State of Kansas.
We express no opinion regarding tax consequences arising with respect to the Notes other than as
expressly set forth in this opinion.
The rights of the owners of the Notes and the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights
generally and by equitable principles, whether considered at law or in equity.
This opinion is given as of its date, and we assume no obligation to revise or supplement this
opinion to reflect any facts or circumstances that may come to our attention or any changes in law that
may occur after the date of this opinion.
Very Truly Yours,
STATE OF KANSAS
OFFICE OF THE ATTORNEY GENERAL
DEREK SCHMIDT
ATIORNEY GENERAL
The Honorable Ron Estes
State Treasurer
July 20, 2016
Landon State Office Building, Room 201 N
Topeka, KS 66612
Dear Mr. Estes:
MEMORIAL HALL
1 20 SW 1 OTH AVE .. 2ND FLOOR
TOPEKA, KS 66612· I 597
(785) 296·2215 •FAX (785) 296-6296
WWW.AG.KS.GOV
Pursuant to K.S.A. 10-108, basic or supplemental transcript material is hereby approved
and you may register the following:
Municipality: City of Salina, Kansas
Description: General Obligation Temporary Note
Series: 2016-2 Numbered: Registered
Dated: July 20, 2016
Aggregate Amount: $4,615,000.00
Date of First Payment: September 1, 2017
Fiscal Agent: Kansas State Treasurer
RDS:sb
cc: Shandi Wicks, Clerk
Gilmore & Bell-Kansas City
Sincerely,
OFFICE OF THE ATTORNEY GENERAL
DEREK SCHMIDT
R~/
Assistant,Attorney General
/ I
TO:
FROM:
SEE DISTRIBUTION LIST
DAVID ARTEBERRY
ROGER EDGAR
Q George K. Baum & Company
~ !!\'VESTMENT BANKERS S11"CE 1928
July 14, 2016
REVISED MEMORANDUM
RE: NOTE ISSUE CLOSING ARRANGEMENTS
NAME OF ISSUER: City of Salina, Kansas
AMOUNT, NAME AND DATE
OF ISSUE:
TIME AND DATE OF CLOSING:
SETILEMENT NUMBERS:
METHOD OF FUNDS TRANSFER:
$4,615,000
City of Salina, Kansas
General Obligation Temporary Notes
Series 2016-2
Dated July 20, 2016
10:00 a.m.
Wednesday, July 20, 2016
Via telephone
Par Amount of Notes
Net Amount Due at Closing
Wire Transfer of Federal Funds
$4.615.000.00
$4,615,000.00
4801 Main Street • Suite 500 • Kansas City, Missouri 64112 • 816.474.1100
TRANSFER INSTRUCTIONS:
(Bennington State Bank)
DISPOSITION OF NOTE PROCEEDS:
(City)
DELIVERY OF TRANSCRIPT
AND LEGAL OPINION:
NOTE DELIVERY INSTRUCTIONS:
PAYMENT OF COSTS OF ISSUANCE:
On Wednesday, July 20, 2016 Bennington State Bank will wire transfer an amount of
$4,615,000.00 to Sunflower Bank, ABA #1011-0062-1, AC #10218 7275 for credit to the
City of Salina, Attn: Kayleen Chaput.
Upon receipt of $4,615,000.00 from Bennington State Bank, the City will deposit the funds
into the following funds accounts:
$4,517,444.03 into the Improvement Fund
$ 97.555.97 into Debt Service
$4,615,000.00 in Total
Upon receiving confirmation of receipt of funds, Gilmore & Bell will email a signed legal
opinion to the City, George K. Baum & Company, and Bennington State Bank. Original
signed legal opinions and transcripts will be mailed when completed.
Notes will be delivered to the offices Bennington State Bank at least one day prior to
closing.
All reimbursable costs associated with the issuance of the Notes will be paid after closing
by the City upon presentation of the proper invoices.
Engelman, Heather (G&B)
From:
Sent:
To:
Cc:
webmaster@treasurer.ks.gov
Wednesday, July 06, 2016 4:27 PM
Engelman, Heather (G&B)
bonds@treasurer.ks.gov
Subject: Updated Bond Registration: SALINA
July 6, 2016, 16:27:08
This bond issue has been updated in the KST Bond Registration System. Below is the updated information:
Registration #: 0322-085-072016-847
Municipality: SALINA
Bond Counsel: GILMORE BELL: HEATHER ENGLEMAN
Paying Agent: STATE
Purpose & Series: G 0 TMP NTS SR 2016-2
Principal: $4,615,000.00
Closing Date: July 20, 2016
The issue was updated by JILL SCHELL.
1
City of Salina, Kansas
Salina, Kansas
Treasurer of the State of Kansas,
as Note Registrar
Topeka, Kansas
REPRESENTATION LETTER
July 20, 2016
Re: City of Salina, Kansas, General Obligation Temporary Notes, Series 2016-2
Ladies and Gentlemen:
The undersigned is the tnmsferee of $4,615,000 of the notes described above (the "Notes") issued by the
City of Salina, Kansas (the "Issuer") pursuant to a Note Resolution adopted by the Issuer on July 11, 2016
(the "Note Resolution").
The undersigned hereby represents, acknowledges and covenants as follows in connection with the
purchase of the Notes:
1. In purchas.illg the Notes, the undersigned is relying solely on information provided by the Issuer and
on statements, certifications, covenants, wan-anties and representations of the Issuer, and on the
undersigned's own knovdedge and investigation of the facts and circumstances relating to the
purchase of the Notes.
2. The undersigned is au "accredited investor" within the meaning of Regulation D of the Securities and
Exchange Commissjon. The undersigned has sufficient knowledge and experience in financial and
business matters, including the purchase and ownership of tax-exempt obligations, to be capable of
evaluating the merits and risks of an investment in the Notes. The undersigned has had an
opportunity to obtain and has received such information and materials from the Issuer as the
undersigned considers necessary to evaluate the merits and risks involved in the purchase of the
Notes.
3. The undersigned has been advised that the Notes (a) have not been rated by any rating service, (b) are
not being registered under the Securities Act of 1933 and are not being registered or otherwise
qualified for sale under the "Blue Sky" laws and regulations of any state, (c) will not be listed on any
stock or other securities exchange, (d) will not be readily marketable and (e) are subject to provisions
regarding restrictions on transfer set forth in the Note Resolution.
4. The undersigned is purchasing the Notes for the undersigned's own account and not with a view to
other resale or other distribution thereof provided, however, that the undersigned may transfer the
Notes in accordance with the provisions of the Note Resolution and applicable law.
Sincerely yours,
THE BENNINGTON STATE BANK,
SALINA, KANSAS
(Signature Page to Representation Letter)