19-7734 Water and Sewage System Revenue Refunding Bonds, Series 2019 a
RESOLUTION NO. 19-7734
OF THE
CITY OF SALINA, KANSAS
ADOPTED
AUGUST 19, 2019
1
S10,330,000
WATER AND SEWAGE SYSTEM REVENUE REFUNDING BONDS
SERIES 2019
1
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
Section 101. Definitions of Words and Terms. 1
= ARTICLE II AUTHORIZATION AND DETAILS OF THE BONDS
Section 201. Authorization of the Series 2019 Bonds 12
Section 202. Description of the Series 2019 Bonds. 12
Section 203. Designation of Paying Agent and Bond Registrar. 13
Section 204. Method and Place of Payment of the Bonds. 13
Section 205. Registration. Transfer and Exchange of Bonds 14
Section 206. Execution, Registration, Authentication and Delivery of Bonds. 15
Section 207. Mutilated, Lost, Stolen or Destroyed Bonds. 15
Section 208. Cancellation and Destruction of Bonds Upon Payment. 16
Section 209. Book-Entry Bonds; Securities Depository. 16
Section 210. Nonpresentment of Bonds 17
Section 211. Calculation of Debt Service Requirements. 17
Section 212. Preliminary and Final Official Statement 19
Section 213. Sale of the Series 2019 Bonds - Bond Purchase Agreement 19
Section 214. Authorization of Escrow Agreement �0
ARTICLE III REDEMPTION OF BONDS
Section 301. Redemption by Issuer 20
Section 302. Selection of Bonds to be Redeemed 20
Section 303. Notice and Effect of Call for Redemption 21
ARTICLE IV SECURITY FOR BONDS
Section 401. Security for the Bonds. 23
ARTICLE V ESTABLISHMENT OF FUNDS AND ACCOUNTS
DEPOSIT AND APPLICATION OF BOND PROCEEDS AND OTHER MONEYS
Section 501. Creation of Funds and Accounts. 23
Section 502. Deposit of Series 2019 Bond Proceeds and Other Moneys. 24
Section 503. Application of Moneys in the Rebate Fund 24
Section 504. Application of Moneys in the Costs of Issuance Account 25
Section 505. Application of Moneys in the Escrow Fund 25
ARTICLE VI COLLECTION AND APPLICATION OF REVENUES
Section 601. Revenue Fund 25
Section 602. Application of Moneys in Funds and Accounts. 25
Section 603. Transfer of Funds to Paying Agent. 28
Section 604. Payments Due on Saturdays, Sundays and Holidays. 28
ARTICLE VII DEPOSIT AND INVESTMENT OF MONEYS
Section 701. Deposits and Investment of Moneys. 28
ARTICLE VIII GENERAL COVENANTS AND PROVISIONS
Section 801. Efficient and Economical Operation. 29
Section 802. Rate Covenant. 29
Section 803. Reasonable Charges for all Services. 29
73 Section 804. Restrictions on Mortgage or Sale of System. 30
Section 805. Insurance. 30
Section 806. Books, Records and Accounts 31
Section 807. Annual Budget 31
Section 808. Annual Audit. 31
Section 809. Right of Inspection. 32
Section 810. Administrative Personnel. 32
Section 811. Performance of Duties and Covenants. 32
Section 812. Report on System Condition. 33
ARTICLE IX ADDITIONAL BONDS AND OBLIGATIONS
Section 901. Senior Lien Bonds 33
Section 902. Parity Bonds and Parity Obligations. 33
Section 903. Junior Lien Obligations. 35
Section 904. Subordinate Lien Bonds. 35
Section 905. Refunding Bonds 35
ARTICLE X DEFAULT AND REMEDIES
Section 1001. Remedies. 36
Section 1002. Limitation on Rights of Owners 36
Section 1003. Remedies Cumulative 36
Section 1004. No Obligation to Levy Taxes. 37
ARTICLE XI DEFEASANCE
Section 1101. Defeasance 37
ARTICLE XII TAX COVENANTS
Section 1201. General Covenants. 37
Section 1202. Survival of Covenants. 37
ARTICLE XIII CONTEND NG DISCLOSURE REQUIREMENTS
Section 1301. Disclosure Requirements 38
Section 1302. Failure to Comply with Continuing Disclosure Requirements. 38
ARTICLE XIV MISCELLANEOUS PROVISIONS
Section 1401. Amendments 38
Section 1402. Notices, Consents and Other Instruments by Owners. 39
Section 1403. Notices 40
Section 1404. Inconsistent Provisions 40
Section 1405. Electronic Transactions. 40
Section 1406. Further Authority 40
Section 1407. Severability 40
Section 1408. Governing Law 40
Section 1409. Effective Date 40
a
y EXHIBITA —FORM OF SERIES 2019 BONDS A-1
a
III
RESOLUTION NO. 19-7734
A RESOLUTION PRESCRIBING THE FORM AND DETAILS OF AND
AUTHORIZING AND DIRECTING THE SALE AND DELIVERY OF WATER AND
SEWAGE SYSTEM REVENUE REFUNDING BONDS, SERIES 2019, OF THE CITY
OF SAUNA, KANSAS, PREVIOUSLY AUTHORIZED BY ORDINANCE NO. 19-
a.
11011 OF THE ISSUER; MAKING CERTAIN COVENANTS AND AGREEMENTS
TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; AND
AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS CONNECTED
THEREWITH.
WHEREAS, the Issuer has passed the Ordinance authorizing the issuance of the Series 2019 Bonds;
and
WHEREAS, the Ordinance authorized the governing body of the Issuer to adopt a resolution
prescribing certain details and conditions and to make certain covenants with respect to the issuance of the
Series 2019 Bonds; and
WHEREAS, in order to provide for the payment of the Refunded Bonds it is desirable to enter into
the Escrow Agreement, by and between the Issuer and the Escrow Agent.
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 Bond 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. 10-116a, K.S.A. 10-620 et seq., and K.S.A. 10-1201 a seq., all as amended and
supplemented from time to time.
"Additional Bonds" means any bonds secured by the Revenues hereafter issued pursuant to Article
IX hereof.
"Additional Obligations" means any leases or other obligations of the Issuer payable from the
Revenues, other than the Bonds.
"Authorized Denomination" means $5,000 or any integral multiples thereof
"Balloon Indebtedness" means Long-Term Indebtedness, 25% or more of the original principal
amount of which becomes due (either by maturity or mandatory redemption) during any consecutive twelve-
month period, if such principal amount becoming due is not required to be amortized below such percentage
by mandatory redemption or prepayment prior to such twelve-month period.
"Beneficial Owner" of Bonds includes any Owner of Bonds and any other Person who, directly or
indirectly has the investment power with respect to any such 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
2 nationally recognized and acceptable to the Issuer.
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"Bond Payment Date" means any date on which principal of or interest on any Bond is payable.
"Bond Purchase Agreement" means: (a) with respect to the Series 2019 Bonds,the Bond Purchase
Agreement dated as of August 14, 2019 between the Issuer and the Purchaser; and (b) with respect to
Additional Bonds, the Bond Purchase Agreement between the Issuer and the Purchaser of such Additional
Bonds.
"Bond Register" means the books for the registration, transfer and exchange of Bonds kept at the
office of the Bond Registrar.
"Bond Registrar" means: (a) with respect to the Series 2019 Bonds, the State Treasurer, and its
successors and assigns; and (b) with respect to Additional Bonds, the entity designated as Bond Registrar in
the supplemental resolution authorizing such Additional Bonds.
"Bond Resolution" means this resolution relating to the Series 2019 Bonds and any supplemental
resolution authorizing any Additional Bonds.
"Bonds" means the Series 2019 Bonds and any Additional Bonds.
"Business Day" means a day other than a Saturday, Sunday or any day designated as a holiday by
the Congress of the United States or by the Legislature of the State and 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.
"Cede & Co." means Cede & Co., as nominee of DTC and any successor nominee of DTC.
"City" means the City of Salina, Kansas.
"Clerk" means the duly appointed and/or elected Clerk or, in the Clerk's absence, the duly
appointed Deputy Clerk or Acting Clerk of the Issuer.
"Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations
promulgated thereunder by the United States Department of the Treasury.
"Consultant" means the Consulting Engineer, the Independent Accountant, or an independent
consultant qualified and having a favorable reputation for skill and experience in financial affairs selected by
the Issuer for the purpose of carrying out the duties imposed on the Consultant by the Bond Resolution.
"Consulting Engineer" means an independent engineer or engineering firm or architect or
architectural firm, having a favorable reputation for skill and experience in the construction, financing and
operation of public utilities, at the time employed by the Issuer for the purpose of carrying out the duties
imposed on the Consulting Engineer by the Bond Resolution.
"Costs of Issuance" means all costs of issuing any series of Bonds, including 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
2
compliance with the Code, all expenses incurred in connection with receiving financial ratings on any series
of Bonds, and any premiums or expenses incurred in obtaining any credit enhancement.
"Costs of Issuance Account" means the Costs of Issuance Account for Water and Sewage System
Revenue Refunding Bonds, Series 2019 created pursuant Section 501 hereof.
w "Dated Date" means September 11, 2019.
"Debt Service Account" means the Debt Service Account for \Vater and Sewage System Revenue
Refunding Bonds, Series 2019 created by Section 501 hereof.
U
"Debt Service Coverage Ratio"- means, for any Fiscal Year: (a) with respect to the covenants
contained in Section 802 hereof, the ratio determined by dividing (i) a numerator equal to the Net Revenues
for such Fiscal Year by (ii) a denominator equal to the Debt Service Requirements for such Fiscal Year; and
(b) with respect to the covenants contained in Article IX hereof, the ratio determined by dividing (i) a
numerator equal to the Net Revenues for such Fiscal Year by (ii) a denominator equal to the Maximum
Annual Debt Service on all System Indebtedness; provided that with respect to Additional Bonds that are
proposed to be Parity Bonds, Debt Service Requirements on Junior Lien Obligations and Subordinate Lien
Bonds shall be disregarded; further provided that with respect to Additional Bonds that are proposed to be
Junior Lien Obligations, Debt Service Requirements on Subordinate Lien Bonds shall be disregarded.
"Debt Service Requirements" means the aggregate principal payments (whether at maturity or
pursuant to scheduled mandatory sinking fund redemption requirements) and interest payments on the Bonds
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 Sen-ice Requirements to the extent
that such principal or interest is payable from amounts deposited in trust, escrowed or othenvise 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.
"Debt Service Reserve Requirement" means (i) with respect to the Series 2019 Bonds, an amount
equal to 51,043,200; and (ii) with respect to any Parity Bonds, the amount, if any, set forth in the Parity
Resolution.
"Defaulted Interest" means interest on any Bond which is payable but not paid on any Interest
Payment Date.
"Defeasance Obligations"means any of the following obligations:
(a) Cash; or
• (b) United States Government Obligations that are not subject to redemption in advance of their
maturity dates; or
(c) 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;
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(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;
i
(4) such cash and United States Government Obligations serving as security for the
H 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.
"Disclosure Undertaking" means the Continuing Disclosure Undertaking dated as of the Issue Date
of any series of Bonds relating to certain obligations contained in the SEC Rule.
"Discount Indebtedness" means Long-Term Indebtedness that is originally sold at a price
(excluding accrued interest, but without deduction of any underwriters' discount) of less than 75% of the
maturity amount including the amount of principal and interest to accrete at maturity of such Long-Term
Indebtedness.
"DTC" means The Depository Trust Company, a limited-purpose trust company organized under the
laws of the State of New York, and its successors and assigns, including any successor securities depository
duly appointed.
"Escrow Agent" means Security Bank of Kansas City, Kansas City, Kansas, and its successors and
assigns.
"Escrow Agreement" means the Escrow Trust Agreement, dated as of September I1, 2019,
between the Issuer and the Escrow Agent.
"Escrow Fund" means the Escrow Fund for Refunded Bonds referred to in Section 501 hereof.
"Escrowed Securities" means the direct, noncallable obligations of the United States of America, as
described in the Escrow Agreement.
"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 Bonds shall
not be made when the same shall become due and payable, either at Stated Maturity or by proceedings for
redemption or otherwise; or
(b) Payment of any installment of interest on any of the Bonds shall not be made when the same
shall become due; or
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or (c) The Issuer shall for any reason be rendered incapable of fulfilling its obligations hereunder;
(d) Any substantial part of the System shall be destroyed or damaged to the extent of impairing
its efficient operation or adversely affecting its Net Revenues and the Issuer shall not within a reasonable
time commence the repair, replacement or reconstruction thereof and proceed thereafter to complete with
reasonable dispatch the repair, replacement or reconstruction thereof; or
(e) Final judgment for the payment of money shall be rendered against the Issuer as a result of
the ownership, control or operation of the System and any such judgment shall not be discharged within one
5 hundred twenty(120)days from the entry thereof or an appeal shall not be taken therefrom or from the order,
decree or process upon which or pursuant to which such judgment shall have been granted or entered, in such
manner as to stay the execution of or levy under such judgment, order, decree or process or the enforcement
thereof; or
(f) An order or decree shall be entered, with the consent or acquiescence of the Issuer,
appointing a receiver or receivers of the System or any part thereof or of the revenues thereof, or if such
order or decree, having been entered without the consent or acquiescence of the Issuer, shall not be vacated
or discharged or stayed on appeal within sixty(60)days after the entry thereof; or
(g) Any proceeding shall be instituted, with the consent or acquiescence of the Issuer, for the
purpose of effecting a composition between the Issuer and its creditors or for the purpose of adjusting the
claims of such creditors pursuant to any federal or state statute now or hereafter enacted, if the claims of such
creditors are under any circumstances payable from the Net Revenues; or
(h) The Issuer shall default in the due and punctual performance of any other of the covenants,
conditions, agreements and provisions contained in the Bonds or in this Bond Resolution (other than the
covenants relating to continuing disclosure contained herein and in the Disclosure Undertaking) 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 Bonds then Outstanding; or
(i) A monetary default shall have occurred on any System Indebtedness.
"Expenses" means all reasonable and necessary expenses of operation, maintenance and repair of
the System and keeping the System in good repair and working order (other than interest paid on System
Indebtedness and depreciation and amortization charges during the period of determination), determined in
accordance with generally accepted accounting principles, including without limiting the generality of the
foregoing, current maintenance charges, expenses of reasonable upkeep and repairs, salaries, wages, costs of
materials and supplies, paying agent fees and expenses, annual audits, periodic Consultant's reports, properly
allocated share of charges for insurance, the cost of purchased water, gas and power, if any, for System
operation, obligations (other than for borrowed money or for rents payable under capital leases) incurred in
the ordinary course of business, liabilities incurred by endorsement for collection or deposit of checks or
drafts received in the ordinary course of business, short-term obligations incurred and payable within a
particular Fiscal Year, other obligations or indebtedness incurred for the purpose of leasing (pursuant to a
true or operating lease) equipment, fixtures, inventory or other personal property, and all other expenses
incident to the operation of the System, but shall exclude all general administrative expenses of the Issuer not
related to the operation of the System and transfers into any debt service reserve accounts established with
respect to any Parity Bonds or Parity Obligations.
"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.
5
"Fiscal Year" means the twelve month period ending on December 31.
"Funds and Accounts" means funds and accounts created pursuant to or referred to in Section 501
hereof.
"Independent Accountant" means an independent certified public accountant or firm of
z 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 the Bond Resolution.
"Index Rate" means the rate of interest set forth in The Bond Buyer Revenue Bond Index (or, in the
event that The Bond Buyer does not compile such index or ceases publication, another comparable
publication recognized in the municipal bond market) published for the week immediately preceding the date
of determination.
"Insurance Consultant" means an individual or firm selected by the Issuer qualified to survey risks
and to recommend insurance coverage for entities engaged in operations similar to those of the System and
having a favorable reputation for skill and experience in making such surveys and recommendations.
"Interest Payment Date(s)" means: (a) with respect to the Series 2019 Bonds, the Stated Maturity
of an installment of interest on the Series 2019 Bonds which shall be April I and October 1 of each year,
commencing April 1, 2020; and (b) with respect to Additional Bonds, the Stated Maturity of an installment
of interest on such Additional Bonds, as set forth in the supplemental resolution authorizing such Additional
Bonds.
"Interim Indebtedness" means System Indebtedness having a term not less than one year, and not
in excess of five years, incurred or assumed in anticipation of being refinanced or refunded with Long-Term
Indebtedness. -
"Issue Date" means the date when the Issuer delivers any series of Bonds to the Purchaser in
exchange for the Purchase Price.
"Issuer" means the City and any successors or assigns.
"Junior Lien Obligations" means any Additional Bonds or Additional Obligations payable from,
and secured by a lien on the Revenues, which lien is junior to that of any Parity Bonds, but senior to that of
the Subordinate Lien Bonds.
"Long-Term Indebtedness" means System Indebtedness having an original stated maturity or term
greater than five years, or renewable or extendible at the option of the debtor for a period greater than one
year from the date of original issuance or incurrence thereof.
"Maturity" when used with respect to any Bond means the date on which the principal of such
Bond 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.
"Maximum Annual Debt Service" means the maximum amount of Debt Service Requirements as
computed for the then current or any future Fiscal Year; provided that the Debt Service Requirements in the
final Stated Maturity of any series of Parity Bonds shall be reduced by the value of cash and Permitted
6
Investments on deposit in the applicable debt service reserve account, so long as such debt service reserve
account is maintained at the applicable Debt Service Reserve Requirement.
"Moody's" means Moody's Investors Service, Inc., 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
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.
0
"Net Revenues" means, for the period of determination, all Revenues less all Expenses.
u "Notice Address" means with respect to the following entities:
(a) To the Issuer at:
300 West Ash, Suite 206
City/County Building
Salina, Kansas 67402
Fax: (785) 309-5738
(b) To the Paying Agent at:
Series 2019 Bonds:
State Treasurer of the State of Kansas
Landon Office Building
900 Southwest Jackson, Suite 201
Topeka, Kansas 66612-1235
Fax: (785)296-6976
Additional Bonds:
The address set forth in the supplemental resolution authorizing such Additional Bonds.
(c) To the Purchaser:
Series 2019 Bonds:
Raymond James &Associates, Inc.
1201 Walnut, 21st Floor
Kansas City, Missouri 64106
Fax: (833)887-8729
Additional Bonds:
The address set forth in the supplemental resolution authorizing such Additional Bonds.
(d) To the Rating Agency(ies):
Moody's Municipal Rating Desk
7 World Trade Center
250 Greenwich Street, 23`d Floor
New York, New York 10007
7
SRP Global Ratings, a division of S&P Global Inc.
55 Water Street, 38th Floor
New York,New York 10004
(e) To the Escrow Agent at:
H Security Bank of Kansas City
Attn: Corporate Trust
701 Minnesota Ave., Suite 206
Kansas City, Kansas 66101
or such other address as is furnished in writing to the other parties referenced herein.
"Notice Representative"means:
(a) With respect to the Issuer, the Clerk.
(b) With respect to the Bond Registrar and Paying Agent, the Director of Bond Services.
(c) With respect to any Purchaser, the manager of its Municipal Bond Department.
(d) With respect to any Rating Agency, any Vice President thereof.
(e) \Vith respect to the Escrow Agent, the Manager of the Corporate Trust Department.
"Official Statement" means Issuer's Official Statement relating to the Series 2019 Bonds.
"Operation and Maintenance Account" means the Water and Sewage System Operation and
Maintenance Account referred to in Section 501 hereof.
"Ordinance" means Ordinance No. 19-11011 of the Issuer authorizing the issuance of the Series
2019 Bonds, as amended from time to time.
"Outstanding" means, when used with reference to Bonds, as of a particular date of determination,
all Bonds theretofore, authenticated and delivered, except the following Bonds:
(a) Bonds theretofore canceled by the Paying Agent or delivered to the Paying Agent for
cancellation pursuant to the Bond Resolution;
(b) Bonds deemed to be paid in accordance with the provisions of Section 1101 of the Bond
Resolution; and
(c) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered
under the Bond Resolution.
"Owner" when used with respect to any Bond means the Person in whose name such Bond is
registered on the Bond Register. Whenever consent of the Owners is required pursuant to the terms of this
Bond Resolution, and the Owner of the Bonds, as set forth on the Bond Register, is Cede & Co., the term
Owner shall be deemed to be the Beneficial Owner of the Bonds.
8
"Parity Bonds" means the Outstanding Series 2019 Bonds, and any Additional Bonds hereafter
issued pursuant to Section 902 or Section 905 of the Bond Resolution and standing on a parity and equality
with the Series 2019 Bonds with respect to the lien on the Net Revenues.
"Parity Obligations" means any Additional Obligations hereafter issued or incurred pursuant to
Section 902 or Section 905 of this Bond Resolution and standing on a parity and equality with the Parity
Bonds with respect to the lien on the Net Revenues.
N
$ "Parity Resolution" means this Bond Resolution and the ordinances and/or resolutions under which
any Additional Bonds which constitute Parity Bonds are hereafter issued.
"Participants" means those financial institutions for whom the Securities Depository effects book-
entry transfers and pledges of securities deposited with the Securities Depository, as such listing of
Participants exists at the time of such reference.
"Paying Agent" means: (a) with respect to the Series 2019 Bonds, the State Treasurer; and its
successors and assigns; and (b) with respect to Additional Bonds, the entity designated as Paying Agent in
the supplemental resolution authorizing such Additional Bonds.
"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. I2-1677a, 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); (0 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 (ft (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: (a) with respect to the Series 2019 Bonds the amount set forth in the
Bond Purchase Agreement; and (b) with respect to Additional Bonds, the amount set forth in the
supplemental resolution authorizing such Additional Bonds.
"Purchaser" means: (a) with respect to the Series 2019 Bonds, Raymond James &Associates, Inc.,
the original purchaser of the Series 2019 Bonds, and any successor and assigns; and (b) with respect to
Additional Bonds, the original purchaser of such Additional Bonds, as set forth in the supplemental
resolution authorizing such Additional Bonds.
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"Put Indebtedness" means Long-Term Indebtedness which is (a) payable or required to be
purchased or redeemed from the holder by or on behalf of the underlying obligor, at the option of the holder
thereof, prior to its stated maturity date, or (b) payable or required to be purchased or redeemed from the
holder by or on behalf of the underlying obligor, other than at the option of the holder, prior to its stated
maturity date, other than pursuant to any mandatory sinking fund or other similar fund, or other than by
reason of acceleration upon the occurrence of an Event of Default under this Bond Resolution.
"Rating Agency" means any company, agency or entity that provides financial ratings for the
B Bonds.
"Rebate Fund" means the Rebate Fund for \Vater and Sewage System Revenue Refunding Bonds,
Series 2019 created pursuant to Section 501 hereof.
"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 Bond to be redeemed means the date fixed for
the redemption of such Bond pursuant to the terms of this Bond Resolution.
"Redemption Price" when used with respect to any Bond to be redeemed means the price at which
such Bond is to be redeemed pursuant to the terms of the Bond Resolution, including the applicable
redemption premium, if any, but excluding installments of interest whose Stated Maturity is on or before the
Redemption Date.
"Refunded Bonds" means the Series 2011 Bonds maturing in the years 2019 to 2031, inclusive, in
the aggregate principal amount of S11,850,000.
"Refunded Bonds Redemption Date" means October 1, 2019.
"Refunding Bonds" means System Indebtedness issued pursuant to Section 905 hereof for the
purpose of refunding any Outstanding System Indebtedness.
"Replacement Bonds" means Bonds issued to the Beneficial Owners of the Bonds in accordance
with Section 212 hereof.
"Revenue Fund" means the Water and Sewage System Revenue Fund created by Section 501
hereof.
"Revenues" means all income and revenues derived and collected by the City from the operation
and ownership of the System, including investment and rental income, net proceeds from business
interruption insurance, and any amounts deposited in escrow in connection with the acquisition, construction,
remodeling, renovation and equipping of facilities to be applied during the period of determination to pay
interest on System Indebtedness, but excluding any profits or losses on the early extinguishment of debt or
on the sale or other disposition, not in the ordinary course of business, of investments or fixed or capital
assets.
"SEC Rule" means Rule 15c2-12 adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as may be amended from time to time.
"Securities Depository" means, initially, DTC, and its successors and assigns.
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"Series 2011 Bonds" means the Issuer's Water and Sewage System Revenue Bonds, Series 2011,
dated April 15, 2011.
"Series 2011 Debt Service Reserve Account" means the Debt Service Reserve Account for the
Series 2011 Bonds.
"Series 2011 Principal and Interest Account" means the Principal and Interest Account for the
Series 2011 Bonds.
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"Series 2011 Resolution" means the Issuer's Ordinance No. 11-10595 and Resolution No. 11-6816,
that authorized the Series 2011 Bonds.
"Series 2019 Bonds" means the Issuer's Water and Sewage System Revenue Refunding Bonds,
Series 2019, authorized and issued by the Issuer pursuant to the Ordinance and this Bond Resolution.
"Series 2019 Debt Service Reserve Account" means the Debt Service Reserve Account for the
Water and Sewage System Revenue Refunding Bonds, Series 2019, created by Section 501 hereof.
"Short-Term Indebtedness" means System Indebtedness having an original maturity less than or
equal to one year from the date of original incurrence thereof, and not renewable or extendible at the option
of the obligor thereon for a term greater than one year beyond the date of original issuance.
"Special Record Date" means the date fixed by the Paying Agent pursuant to Section 207 hereof
for the payment of Defaulted Interest.
"Standard & Poor's" means S&P Global Ratings, a division of S&P Global Inc., New York, New
York, 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 Bond or any installment of interest thereon means
the date specified in such Bond and this Bond Resolution as the fixed date on which the principal of such
Bond or such installment of interest is due and payable.
"Subordinate Lien Bonds" means any Additional Bonds or Additional Obligations payable from
the Revenues on a subordinate lien basis to any Parity Bonds and 'Junior Lien Obligations, and which
constitute general obligations of the Issuer.
"Surplus Account" means the Water and Sewage System Surplus Account created by Section 501
hereof.
"System" means the entire combined waterworks plant and system and sewerage plant and system
owned and operated by the Issuer for the production, storage, treatment and distribution of water, and for the
collection, treatment and disposal of sewage, to serve the needs of the Issuer and its inhabitants and others,
including all appurtenances and facilities connected therewith or relating thereto, together with all
extensions, improvements, additions and enlargements thereto hereafter made or acquired by the Issuer.
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"System Indebtedness" means collectively the Bonds and any Additional Obligations which are
payable out of, or secured by an interest in, the Revenues.
"Term Bonds" means any Bonds designated as Term Bonds in this Bond Resolution or in any
supplemental resolution authorizing the issuance of Additional Bonds.
"Treasurer" means the duly appointed and/or elected Treasurer or, in the Treasurer's absence, the
B 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.
"Variable Rate Indebtedness" means any System Indebtedness which provides for interest to be
payable thereon at a rate per annum that may vary from time to time over the tenn thereof in accordance with
procedures provided in the instrument creating such System Indebtedness.
ARTICLE II
AUTHORIZATION AND DETAILS OF THE BONDS
Section 201. Authorization of the Series 2019 Bonds. The Series 2019 Bonds have been
heretofore authorized and directed to be issued pursuant to the Ordinance in the principal amount of
$10,330,000, for the purpose of providing funds to: (a) refund the Refunded Bonds, (b) pay Costs of
Issuance, and(c)make a deposit to the Series 2019 Debt Service Reserve Account.
Section 202. Description of the Series 2019 Bonds. The Series 2019 Bonds shall consist of fully
registered bonds in Authorized Denominations and shall be numbered in such manner as the Bond Registrar
shall determine. All of the Series 2019 Bonds shall be dated as of the Dated Date, shall become due in the
amounts, on the Stated Maturities, and subject to redemption and payment, prior to their Stated Maturities as
provided in Article III hereof and shall bear interest at the rates per annum as follows:
SERIAL BONDS
Stated Maturity Principal Annual Rate Stated Maturity Principal Annual Rate
October 1 Amount of Interest October 1 Amount of Interest
2020 5715,000 3.000% 2026 870,000 3.000
202I 750,000 3.000 2027 895,000 3.000
2022 775,000 3.000 2028 925,000 3.000
2023 795,000 3.000 2029 955,000 3.000
2024 820,000 3.000 2030 980,000 3.000
2025 845,000 3.000 2031 1,005,000 3.000
The Series 2019 Bonds 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
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Date to which interest has been paid on the Interest Payment Dates in the manner set forth in Section 208
hereof. The Series 2019 Bonds shall be issued as Book-Entry-Only Bonds and administered in accordance
with the provisions of Section 212 hereof.
Each of the Series 2019 Bonds, 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
w substantially in the form attached hereto as Exhibit A or as may be required by the Attorney General
Ts pursuant to the Notice of Systems of Registration for Kansas Municipal Bonds, 2 Kan. Reg. 921 (1983), in
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accordance with the Kansas Bond Registration Law, K.S.A. 10-620 et seq.
Section 203. Designation of Paying Agent and Bond Registrar. The State Treasurer is hereby
designated as the Paying. Agent for the payment of principal of and interest on the Series 2019 Bonds and
Bond Registrar with respect to the registration, transfer and exchange of the Series 2019 Bonds. The Mayor
of the Issuer is hereby authorized and empowered to execute on behalf of the Issuer an agreement with the
Bond Registrar and Paying Agent for the Series 2019 Bonds.
The Issuer will at all times maintain a Paying Agent and Bond 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 Bond Registrar by (a) filing with the Paying Agent or Bond Registrar then
performing such function a certified copy of the proceedings giving notice of the termination of such Paying
Agent or Bond Registrar and appointing a successor, and (b) causing notice of appointment of the successor
Paying Agent and Bond Registrar to be given by first class mail to each Owner. No resignation or removal
of the Paying Agent or Bond Registrar shall become effective until a successor has been appointed and has
accepted the duties of Paying Agent or Bond Registrar.
Every Paying Agent or Bond Registrar appointed hereunder shall at all times meet the requirements
of K.S.A. 10-501 et seq. and K.S.A. 10-620 et seq., respectively.
Section 204. Method and Place of Payment of the Bonds. The principal of, or Redemption
Price, and interest on the Bonds 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 Bond shall be paid at Maturity to the Person in whose
name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender
of such Bond at the principal office of the Paying Agent.
The interest payable on each Bond on any Interest Payment Date shall be paid to the Owner of such
Bond as shown on the Bond Register at the 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 Bond 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 Bonds, by electronic
transfer to such Owner upon written notice given to the Bond 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
Bond shall cease to be payable to the Owner of such Bond on the relevant Record Date and shall be payable
to the Owner in whose name such Bond 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 Bond and the date of the proposed payment (which date shall be at least 30 days
after receipt of such notice by the Paying Agent) and shall deposit with the Paying Agent at the time of such
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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
w Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each
Owner of a Bond entitled to such notice at the address of such Owner as it appears on the Bond Register not
less than 10 days prior to such Special Record Date.
8 The Paying Agent shall keep a record of payment of principal and Redemption Price of and interest
on all Bonds and at least annually shall forward a copy or summary of such records to the Issuer.
Section 205. Registration, Transfer and Exchange of Bonds. The Issuer covenants that, as long
as any of the Bonds remain Outstanding, it will cause the Bond Register to be kept at the office of the Bond
Registrar as herein provided. Each Bond when issued shall be registered in the name of the Owner thereof
on the Bond Register.
Bonds may be transferred and exchanged only on the Bond Register as provided in this Section.
Upon surrender of any Bond at the principal office of the Bond Registrar, the Bond Registrar shall transfer or
exchange such Bond for a new Bond or Bonds in any Authorized Denomination of the same Stated Maturity
and in the same aggregate principal amount as the Bond that was presented for transfer or exchange.
Bonds 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 Bond 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 Bonds is exercised, the Bond
Registrar shall authenticate and deliver Bonds in accordance with the provisions of this Bond Resolution.
The Issuer shall pay the fees and expenses of the Bond Registrar for the registration, transfer and exchange of
Bonds provided for by this Bond Resolution and the cost of printing a reasonable supply of registered bond
blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the
Bond Registrar, are the responsibility of the Owners of the Bonds. 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 Code § 3406, such amount may be deducted by the Paying Agent from amounts otherwise
payable to such Owner hereunder or under the Bonds.
The Issuer and the Bond Registrar shall not be required (a) to register the transfer or exchange of any
Bond that has been called for redemption after notice of such redemption has been mailed by the Paying
Agent pursuant to Section 303 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 Bond 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 Section 208 hereof.
The Issuer and the Paying Agent may deem and treat the Person in whose name any Bond is
registered on the Bond Register as the absolute Owner of such Bond, whether such Bond 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 Bond 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 Bond to the extent of the
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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 Bond Registrar, the Bond
Register may be inspected and copied by the Owners (or a designated representative thereof) of 10%or more
in principal amount of the Bonds then Outstanding or any designated representative of such Owners whose
authority is evidenced to the satisfaction of the Bond Registrar.
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Section 206. Execution, Registration, Authentication and Delivery of Bonds. Each of the
Bonds, including any Bonds issued in exchange or as substitutions for the Bonds 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 Bonds in the
manner herein specified, and to cause the Bonds 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 Bonds 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. In case any officer whose signature appears on any
Bonds ceases to be such officer before the delivery of such Bonds, such signature shall nevertheless be valid
and sufficient for all purposes, as if such person had remained in office until delivery. Any Bond may be
signed by such persons who at the actual time of the execution of such Bond are the proper officers to sign
such Bond although at the date of such Bond such persons may not have been such officers.
The Mayor and Clerk are hereby authorized and directed to prepare and execute the Bonds as herein
specified,and when duly executed, to deliver the Bonds to the Paying Agent for authentication.
The Series 2019 Bonds 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 Bond Registrar, but it shall not be necessary that the same officer or employee sign the
certificate of authentication on all of the Bonds that may be issued hereunder at any one time. No Series
2019 Bond shall be entitled to any security or benefit under this Bond Resolution or be valid or obligatory for •
any purpose unless and until such certificate of authentication has been duly executed by the Bond Registrar.
Such executed certificate of authentication upon any Series 2019 Bond shall be conclusive evidence that such
Series 2019 Bond has been duly authenticated and delivered under this Bond Resolution. Upon
authentication, the Bond Registrar shall deliver the Series 2019 Bond to the Purchaser upon instructions of
the Issuer or its representative.
Section 207. Mutilated, Lost, Stolen or Destroyed Bonds. If (a) any mutilated Bond is
surrendered to the Bond Registrar or the Bond Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Bond, and (b) there is delivered to the Issuer and the Bond Registrar such
security or indemnity as may be required by each of them, then, in the absence of notice to the Issuer or the
Bond Registrar that such Bond has been acquired by a bona fide purchaser, the Issuer shall execute and, upon
the Issuer's request, the Bond Registrar shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Bond, a new Bond of the same Stated Maturity and of like tenor and
principal amount.
If any such mutilated, destroyed, lost or stolen Bond has become or is about to become due and
payable, the Issuer, in its discretion, may pay such Bond instead of issuing a new Bond.
Upon the issuance of any new Bond under this Section, the Issuer and the Paying Agent may require
the payment by the Owner of a sum sufficient to cover any tax or other governmental charge that may be
15
imposed in relation thereto and any other expenses (including the fees and expenses of the Paying Agent)
connected therewith.
Every new Bond 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 Bond Resolution equally and ratably with all
2 other Outstanding Bonds.
Section 208. Cancellation and Destruction of Bonds Upon Payment. All Bonds 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 practices of the Paying
Agent. The Paying Agent shall execute a certificate in duplicate describing the Bonds so cancelled and
destroyed and shall file an executed counterpart of such certificate with the Issuer.
Section 209. Book-Entry Bonds; Securities Depository. Any series of Bonds may be issued as
Book-Entry-Only Bonds. If so, such series of Bonds shall initially be registered to Cede & Co., the nominee
for the Securities Depository, and no Beneficial Owner will receive certificates representing their respective
interests in the Bonds, except in the event the Bond Registrar issues Replacement Bonds as provided in this
Section. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry
transfers among its Participants and receive and transmit payment of principal of, premium, if any, and
interest on, the Bonds to the Participants until and unless the Bond Registrar authenticates and delivers
Replacement Bonds to the Beneficial Owners as described in the following paragraph.
(a) If the Issuer determines (1) that the Securities Depository is unable to properly discharge its
responsibilities, or (2) that the Securities Depository is no longer qualified to act as a securities depository
and registered clearing agency under the Securities and Exchange Act of 1934, as amended, or (3) that the
continuation of a book-entry system to the exclusion of any Bonds being issued to any Owner other than
Cede & Co. is no longer in the best interests of the Beneficial Owners of the Bonds, or (b) if the Bond
Registrar receives written notice from Participants having interests in not less than 50% of the Bonds
Outstanding, as shown on the records of the Securities Depository (and certified to such effect by the
Securities Depository), that the continuation of a book-entry system to the exclusion of any Bonds being
issued to any Owner other than Cede & Co. is no longer in the best interests of the Beneficial Owners of the
Bonds, then the Bond Registrar shall notify the Owners of such determination or such notice and of the
availability of certificates to owners requesting the same, and the Bond Registrar shall register in the name
of and authenticate and deliver Replacement Bonds to the Beneficial Owners or their nominees in principal
amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as
to accrued interest and previous calls for redemption; provided, that in the case of a determination under
(a)(I) or (a)(2) of this paragraph, the Issuer, with the consent of the Bond Registrar, may select a successor
securities depository in accordance with the following paragraph to effect book-entry transfers. In such
event, all references to the Securities Depository herein shall relate to the period of time when the Securities
Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references
herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be
imposed upon and performed by the Bond Registrar, to the extent applicable with respect to such
Replacement Bonds. If the Securities Depository resigns and the Issuer, the Bond Registrar or Owners are
unable to locate a qualified successor of the Securities Depository in accordance with the following
paragraph, then the Bond Registrar shall authenticate and cause delivery of Replacement Bonds to Owners,
as provided herein. The Bond Registrar may rely on information from the Securities Depository and its
Participants as to the names of the Beneficial Owners of the Bonds. The cost of printing, registration,
authentication, and delivery of Replacement Bonds shall be paid for by the Issuer.
In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or
is no longer qualified to act as a securities depository and registered clearing agency under the Securities and
16
Exchange Act of 1934, as amended, the Issuer may appoint a successor Securities Depository provided the
Bond Registrar receives written evidence satisfactory to the Bond Registrar with respect to the ability of the
successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository
shall be a securities depository which is a registered clearing agency under the Securities and Exchange Act
of 1934, as amended, or other applicable statute or regulation that operates a securities depository upon
reasonable and customary terms. The Bond Registrar upon its receipt of a Bond or Bonds for cancellation
w shall cause the delivery of Bonds to the successor Securities Depository in appropriate denominations and
y form as provided herein.
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Section 210. Nonpresentment of Bonds. If any Bond is not presented for payment when the
principal thereof becomes due at Maturity, if funds sufficient to pay such Bond have been made available to
the Paying Agent all liability of the Issuer to the Owner thereof for the payment of such Bond 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 Bond, who shall
thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Bond
Resolution or on, or with respect to, said Bond. If any Bond is not presented for payment within four years
following the date when such Bond 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 Bond, and such Bond
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. Calculation of Debt Service Requirements.
(a) Debt Service Requirements on Balloon, Put, Short-Tern[and Interim Indebtedness.
(I) The principal of Balloon Indebtedness, Put Indebtedness or Short-Term
Indebtedness being treated as Long-Term Indebtedness under Section 902 hereof, or Interim
Indebtedness shall be deemed due and payable at its Stated Maturity; provided, however, that at the
election of the Issuer for the purpose of any computation of Debt Service Requirements, whether
historical or projected, the principal deemed payable on Balloon Indebtedness, Put Indebtedness or
Short-Term Indebtedness being treated as Long-Term Indebtedness under Section 902 hereof, or
Interim Indebtedness, shall be deemed to be payable as set forth below:
(A) If the Issuer has obtained a binding commitment of a bank or other financial
institution (whose senior debt obligations, or the senior debt obligations of the holding
company of which such bank or financial institution is the principal subsidiary, are then rated
"A" or better by any Rating Agency) to refinance such Balloon Indebtedness, Put
Indebtedness, Short-Term Indebtedness or Interim Indebtedness, or a portion thereof, including
without limitation, a letter of credit or a line of credit, the Balloon Indebtedness, Put
Indebtedness, Short-Term Indebtedness or Interim Indebtedness, or portion thereof to be
refinanced, may be deemed to be payable in accordance with the terms of the refinancing
arrangement;
(B) If the Issuer has entered into a binding agreement providing for the deposit by
the Issuer with a bank or other financial institution (whose senior debt obligations, or the
senior debt obligations of the holding company of which such bank or financial institution is
the principal subsidiary, are then rated "A" or better by any Rating Agency), in trust (herein
called a "Special Redemption Fund") of amounts, less investment earnings realized and
retained in the Special Redemption Fund, equal in aggregate to the principal amount of such
Balloon Indebtedness, Put Indebtedness. Short-Tenn Indebtedness or Interim Indebtedness, or
17
a portion thereof, when due from the sums so deposited and investment earnings realized
thereon, then the principal amount of the Balloon Indebtedness, Put Indebtedness; Short-Term
Indebtedness or Interim Indebtedness, or portion thereof, may be deemed to be payable in
accordance with the terms of such agreement;
(C) If the Issuer has entered into arrangements or agreements with respect to the
principal amount of such Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or
Interim Indebtedness, other than those referred to in subsections (A) and (B) above, which a
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Consultant in a certificate filed with the Issuer determines, taking into account the interests of
the Owners of System Indebtedness, provides adequate assurances that the Issuer will be able
to meet the Debt Service Requirements due on such Indebtedness, the Balloon Indebtedness,
Put Indebtedness, Short-Term Indebtedness or Interim Indebtedness may be deemed to be
payable in accordance with the terms of such arrangement or agreement; or
(D) Such Balloon Indebtedness, Put Indebtedness or Short-Term Indebtedness
may be deemed to be System Indebtedness which, at the date of its original incurrence; was
payable over a term not to exceed twenty (20) years in equal annual installments of principal
and interest at the Index Rate.
A Consultant shall deliver to the Issuer a certificate stating that it is reasonable to assume that
installment obligations of such term of the Issuer can be incurred and stating the interest rate then applicable
to installment obligations of such term of comparable quality. Interim Indebtedness may be deemed to be
Indebtedness which, at the date of its original incurrence, would meet the conditions specified in the
statement of the Consultant as required in Section 902; provided that the Consultant shall for each annual
period that the Debt Service Requirement is computed, provide a supplemental statement that at such period,
the certifications contained in the statement are reasonable.
(2) Interest that is payable prior to the Stated Maturity of any Balloon Indebtedness, Put
Indebtedness, Short-Term Indebtedness or Interim Indebtedness shall be taken into account for such
appropriate period in computation of Debt Service Requirements. Interest payable at maturity or
early redemption on Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or Interim
Indebtedness may either be amortized over the anticipated maturity or such longer period as is
permitted under Section 902 or Section 211(a)(I)(D) or may be treated as principal payable on the
principal maturity date of such Balloon Indebtedness, Put Indebtedness, Short-Term Indebtedness or
Interim Indebtedness.
(3) In measuring compliance with the applicable tests hereunder in connection with
incurring Put Indebtedness and generally for purposes of determining the Debt Service Requirements
relating thereto, Put Indebtedness shall be deemed to mature based upon the actual amortization
requirements for the Put Indebtedness, only to the extent that the Issuer has a commitment to refinance
such Put Indebtedness.
(b) Debt Service Requirements on Discount Indebtedness. At the election of the Issuer for the
purpose of any computation of Debt Service Requirements, whether historical or projected, the principal and
interest deemed payable on Discount Indebtedness shall be deemed to be payable as set forth below:
(I) If the Issuer has obtained a binding commitment of a bank or other financial institution
(whose senior debt obligations, or the senior debt obligations of the holding company of which such
( bank or financial institution is the principal subsidiary, are then rated "A" or better by any Rating
Agency) to refinance such Discount Indebtedness, or a portion thereof, including without limitation, a
letter of credit or a line of credit,the Discount Indebtedness, or portion thereof to be refinanced, may be
deemed to be payable in accordance with the terms of the refinancing arrangement;
18
(2) If the Issuer has entered into a binding agreement providing for the deposit with a
bank or other financial institution (whose senior debt obligations, or the senior debt obligations of the
holding company of which such bank or financial institution is the principal subsidiary, are then rated
"A"or better by any Rating Agency), in trust(herein called a"Special Redemption Fund")of amounts,
less investment earnings realized and retained in the Special Redemption Fund, equal in aggregate to
the principal amount of such Discount Indebtedness, or a portion thereof, and providing for the
payment of such principal amount when due from the sums so deposited, and investment earnings
realized thereon, then the Discount Indebtedness, or portion thereof, may be deemed to be payable in
accordance with the terms of such agreement;
5
(3) If the Issuer has entered into arrangements or agreements with respect to the principal
amount of such Discount Indebtedness, other than those referred to in subsections (1) and (2) above,
which a Consultant in a certificate filed with the Issuer determines, taking into account the interests of
the holders of System Indebtedness, provides adequate assurances that the Issuer will be able to meet
the Debt Service Requirements due on such Indebtedness, the Discount Indebtedness may be deemed
to be payable in accordance with the terms of such arrangement or agreement; or
(4) As of any time the maturity amount represented by Discount Indebtedness shall be
deemed to be the accreted value of such Indebtedness computed on the basis of a constant yield to
maturity.
When calculating interest requirements on Variable Rate Indebtedness which bears a variable rate of
interest for periods as to which the rate of interest has not been determined, the rate of interest on
Outstanding Variable Rate Indebtedness shall be the average annual rate of interest which was payable on
such Variable Rate Indebtedness during the twelve (12) months immediately preceding the date as of which
the calculation is made; and the rate of interest on Variable Rate Indebtedness to be incurred (or incurred less
than twelve (12) months preceding such date) shall be the average annual rate of interest which would have
been payable on such Variable Rate Indebtedness had it been outstanding for a period of twelve (12) months
immediately preceding the date as of which the calculation is made, as evidenced in a certificate of a
Consultant, delivered to the Issuer.
Section 212. Preliminary and Final Official Statement. The Preliminary Official Statement
dated August 7, 2019, is hereby ratified and approved.
The final Official Statement is hereby authorized to be prepared by supplementing, amending and
completing the Preliminary Official Statement, with such changes and additions thereto as are necessary to
conform to and describe the transaction. The Mayor or chief financial officer are hereby authorized to
execute the final Official Statement as so supplemented, amended and completed, and the use and public
distribution of the final Official Statement by the Purchaser in connection with the reoffering of the Bonds is
hereby authorized. The proper officials of the Issuer are hereby authorized to execute and deliver a
certificate pertaining to such Official Statement as prescribed therein, dated as of the date of payment for and
delivery of the Bonds.
The Issuer agrees to provide to the Purchaser within seven business days of the date of the sale of
Bonds sufficient copies of the final Official Statement to enable the Purchaser to comply with the
requirements of the SEC Rule and with the requirements of Rule G-32 of the Municipal Securities
Rulemaking Board.
Section 213. Sale of the Series 2019 Bonds - Bond Purchase Agreement. The execution of the
Bond Purchase Agreement by the Mayor is hereby ratified and confirmed. Pursuant to the Bond Purchase
•
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Agreement, the Issuer agrees to sell the Series 2019 Bonds to the Purchaser for the Purchase Price, upon the
terms and conditions set forth therein.
Section 214. Authorization of Escrow Agreement. The Issuer is hereby authorized to enter into
the Escrow Agreement, and the Mayor and Clerk are hereby authorized and directed to execute the Escrow
z Agreement with such changes therein as such officials may deem appropriate, for and on behalf of and as the
act and deed of the Issuer. The Escrow Agent is hereby authorized to carry out, on behalf of the Issuer, the
y duties, terms and provisions of the Escrow Agreement, and the Escrow Agent, the Purchaser and Bond
Counsel are authorized to take all necessary actions for the subscription and purchase of the Escrowed
Securities described therein, including the subscription for United States Treasury Securities - State and
Local Government Series.
ARTICLE III
REDEMPTION OF BONDS
Section 301. Redemption by Issuer. The Bonds shall be subject to redemption and payment prior
to their Stated Maturity, as follows:
(a) Optional Redemption.
(1) Series 2019 Bonds. At the option of the Issuer, Series 2019 Bonds maturing on
October 1, in the years 2027 and thereafter will be subject to redemption and payment prior to their
Stated Maturity on October 1, 2026, and thereafter as a whole or in part (selection of maturities and
the amount of Series 2019 Bonds of each maturity 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.
(2) Additional Bonds. Additional Bonds are subject to redemption and payment prior to
Stated Maturity in accordance with the provisions of the supplemental resolution authorizing the
issuance of such Additional Bonds.
(b) Mandatory Redemption. Additional Bonds designated as Term Bonds shall be subject to
mandatory redemption in accordance with the provisions of the supplemental resolution authorizing such
Additional Bonds.
Section 302. Selection of Bonds to be Redeemed.
(a) In the event the Issuer desires to call the Bonds for redemption prior to maturity, written
notice of such intent shall be provided to the Bond Registrar in accordance with K.S.A. 10-129, as amended,
not less than 45 days prior to the Redemption Date. The Bond Registrar shall call Bonds for redemption and
payment and shall give notice of such redemption as herein provided upon receipt by the Bond 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 Bonds to be called for
redemption. If the Bonds are refunded more than 90 days in advance of such Redemption Date, any escrow
agreement entered into by the Issuer in connection with such refunding shall provide that such written
instructions to the Paying Agent shall be given by the escrow agent on behalf of the Issuer not more than 90
days prior to the Redemption Date. The Paying Agent may in its discretion waive such notice period so long
as the notice requirements set forth in Section 303 are met. The foregoing provisions of this paragraph shall
not apply in the case of any mandatory redemption of Term Bonds hereunder, and Term Bonds shall be
called by the Paying Agent for redemption pursuant to such mandatory redemption requirements without the
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necessity of any action by the Issuer and whether or not the Paying Agent holds moneys available and
sufficient to effect the required redemption.
(b) Bonds shall be redeemed only in an Authorized Denomination. When less than all of the
Bonds are to be redeemed and paid prior to their Stated Maturity, such Bonds shall be redeemed in such
manner as the Issuer shall determine. Bonds of less than a full Stated Maturity shall be selected by the Bond
Registrar in a minimum Authorized Denomination of principal amount in such equitable manner as the Bond
Registrar may determine.
NO '
(c) In the case of a partial redemption of Bonds by lot when Bonds of denominations greater
than a minimum Authorized Denomination are then Outstanding, then for all purposes in connection with
such redemption a minimum Authorized Denomination of face value shall be treated as though it were a
separate Bond 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 Bond 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 Bond to the Bond 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 Bond or Bonds of the aggregate principal amount of the unredeemed portion of the
principal amount of such Bond. If the Owner of any such Bond fails to present such Bond to the Paying
Agent for payment and exchange as aforesaid, such Bond 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. Unless waived by any Owner of Bonds
to be redeemed, if the Issuer shall call any Bonds for redemption and payment prior to the Stated Maturity
thereof, the Issuer shall give written notice of its intention to call and pay said Bonds to the State Treasurer.
In addition, the Issuer shall cause the Bond Registrar to give written notice of redemption to the Owners of
said Bonds. 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 Bonds are to be redeemed, the identification (and, in the case of
partial redemption of any Bonds,the respective principal amounts) of the Bonds to be redeemed;
(d) a statement that on the Redemption Date the Redemption Price will become due and payable
upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue
from and after the Redemption Date; and
(e) the place where such Bonds 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.
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Prior to any Redemption Date, the Issuer shall deposit with the Paying Agent an amount of money
sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on such
Redemption Date.
For so long as the Securities Depository is effecting book-entry transfers of any series of Bonds, the
Bond Registrar shall provide the notices specified in this Section to the Securities Depository. It is expected
Lu that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will
9
notify or cause to be notified the Beneficial Owners. Any failure on the part of the Securities Depository or a
Participant, or failure on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice
sfrom the Bond Registrar, the Securities Depository, a Participant or othenvise) to notify the Beneficial
Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond.
Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds 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 Bonds or portion of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in
accordance with such notice, the Redemption Price of such Bonds 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 Bond, there shall be prepared for the
Owner a new Bond or Bonds of the same Stated Maturity in the amount of the unpaid principal as provided
herein. All Bonds 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, the Issuer shall provide such notices of redemption as are
required by the Disclosure Undertaking. Further notice may be given by the Issuer or the Bond 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 of redemption given hereunder shall contain the information required
above for an official notice of redemption plus (I) the CUSIP numbers of all Bonds being redeemed; (2) the
date of issue of the Bonds as originally issued; (3) the rate of interest borne by each Bond being redeemed;
(4) the maturity date of each Bond being redeemed; and (5) any other descriptive information needed to
identify accurately the Bonds 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 Bond
Registrar, to all registered securities depositories then in the business of holding substantial amounts of
obligations of types comprising the Bonds and to one or more national information services that disseminate
notices of redemption of obligations such as the Bonds.
(c) Each check or other transfer of funds issued for the payment of the Redemption Price of
Bonds being redeemed shall bear or have enclosed the CUSIP number of the Bonds being redeemed with the
proceeds of such check or other transfer.
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
Bond.
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ARTICLE IV
SECURITY FOR BONDS
Section 401. Security for the Bonds. The Bonds shall be special obligations of the Issuer payable
solely from, and secured as to the payment of principal and interest by a pledge of, the Net Revenues, and the
w Issuer hereby pledges said Net Revenues to the payment of the principal of and interest on the Bonds. The
Bonds shall not be or constitute a general obligation of the Issuer, nor shall they constitute an indebtedness of
the Issuer within the meaning of any constitutional, statutory or charter provision, limitation or restriction,
and the taxing power of the Issuer is not pledged to the payment of the Bonds, either as to principal or
interest.
The covenants and agreements of the Issuer contained herein and in the Bonds shall be for the equal
benefit, protection and security of the legal owners of any or all of the Bonds, all of which Bonds shall be of
equal rank and without preference or priority of one Bond over any other Bond in the application of the funds
herein pledged to the payment of the principal of and the interest on the Bonds, or otherwise, except as to
rate of interest, date of maturity and right of prior redemption as provided in this Bond Resolution. The
Bonds shall stand on a parity and be equally and ratably secured with respect to the payment of principal and
interest from the Net Revenues and in all other respects with any Parity Bonds and Parity Obligations. The
Bonds shall not have any priority with respect to the payment of principal or interest from said net income
and revenues or otherwise over the Parity Bonds and Parity Obligations and the Parity Bonds and Parity
Obligations shall not have any priority with respect to the payment of principal or interest from said net
income and revenues or otherwise over the Bonds.
ARTICLE V
ESTABLISHMENT OF FUNDS AND ACCOUNTS
DEPOSIT AND APPLICATION OF BOND PROCEEDS AND OTHER MONEYS
Section 501. Creation of Funds and Accounts.
(a) Simultaneously with the issuance of the Series 2019 Bonds, there shall be created within the
Treasury of the Issuer the following Funds and Accounts:
(I) Debt Service Account for Water and Sewage System Revenue Refunding Bonds,
Series 2019;
(2) Rebate Fund for Water and Sewage System Revenue Refunding Bonds, Series 2019.
(3) Series 2019 Debt Service Reserve Account for Water and Sewage System Revenue
Refunding Bonds, Series 2019.
The Funds and Accounts established herein shall be administered in accordance with the provisions
of this Bond Resolution so long as the Series 2019 Bonds are Outstanding.
(b) In addition to the Funds and Accounts described above, the Escrow Agreement establishes
the following Funds and Accounts to be held and administered by the Escrow Agent in accordance with the
provisions of the Escrow Agreement:
(1) Escrow Fund for Refunded Bonds.
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(2) Costs of Issuance Account for Water and Sewage System Revenue Refunding
Bonds, Series 2019.
(c) The following separate Funds and Accounts created and established in the treasury of the
Issuer are hereby ratified and confirmed:
(1) Water and Sewage System Revenue Fund.
(2) Water and Sewage System Surplus Account.
(3) Water and Sewage System Operation and Maintenance Account.
The Funds and Accounts referred to in this paragraph shall be administered in accordance with the
provisions of this Bond Resolution.
Section 502. Deposit of Series 2019 Bond Proceeds and Other Moneys. The net proceeds
received from the sale of the Series 2019 Bonds and certain other moneys shall be deposited simultaneously
with the delivery of the Series 2019 Bonds as follows:
(a) All accrued interest received from the sale of the Series 2019 Bonds shall be deposited in the
Debt Service Account.
(b) An amount to pay Costs of Issuance shall be transferred to the Escrow Agent for deposit in
the Costs of Issuance Account and applied in accordance with the Escrow Agreement.
(c) An amount equal to the Debt Service Reserve Requirement for the Series 2019 Bonds shall
be deposited in the Series 2019 Debt Service Reserve Account.
(d) The remaining balance of the proceeds derived from the sale of the Bonds, together with
moneys provided by the Issuer in accordance with subsection (e) hereof, shall be transferred to the Escrow
Agent and deposited in the Escrow Fund and applied in accordance with the Escrow Agreement.
(e) Simultaneously with the issuance of the Series 2019 Bonds, the Issuer shall make the
following transfers:
(1) From the Series 2011 Principal and Interest Account to the Escrow Fund, the sum of
5968.995.63.
(2) From the Series 2011 Debt Service Reserve Account to the Escrow Fund, the sum of
51,214,141.26.
Section 503. 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 Series 2019 Bonds
shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund
0 shall be governed by this Section and the Federal Tax Certificate.
(b) The Issuer shall periodically determine the rebatable arbitrage, if any, under Code § 148(f) in
accordance with the Federal Tax Certificate, and the Issuer shall make payments to the United States of
24
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 Series 2019 Bonds and payment
and satisfaction of any Rebate Amount, or provision made therefor, shall be deposited into the Revenue
Fund.
(c) Notwithstanding any other provision of this Bond Resolution, including in particular Article
XI hereof, the obligation to pay rebatable arbitrage 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 Series 2019 Bonds.
Section 504. Application of Moneys in the Costs of Issuance Account. Moneys in the Costs of
Issuance Account shall be used by the Escrow Agent to pay the Costs of Issuance. Any funds remaining in
the Costs of Issuance Account, after payment of all Costs of Issuance, but not later than the later of 30 days
prior to the first Stated Maturity of principal or one year after the date of issuance of the Series 2019 Bonds,
shall be transferred to the Issuer for deposit into the Debt Service Account.
Section 505. Application of Moneys in the Escrow Fund. Under the Escrow Agreement, the
Escrow Agent will apply moneys in the Escrow Fund to purchase the Escrowed Securities and to establish an
initial cash balance in accordance with the Escrow Agreement. The cash and Escrowed Securities held in the
Escrow Fund will be applied by the Escrow Agent solely in the manner authorized by the Escrow
Agreement. All money deposited with the Escrow Agent shall be deemed to be deposited in accordance with
and subject to all of the provisions contained in the Escrow Agreement.
ARTICLE VI
COLLECTION AND APPLICATION OF REVENUES
Section 601. Revenue Fund. The Issuer covenants and agrees that from and after the delivery of
the Series 2019 Bonds, and continuing as long as any of the Bonds remain Outstanding hereunder, all of the
Revenues shall as and when received be paid and deposited into the Revenue Fund. Said Revenues shall be
segregated and kept separate and apart from all other moneys, revenues. Funds and Accounts of the Issuer
and shall not be commingled with any other moneys, revenues, Funds and Accounts of the Issuer. The
Revenue Fund shall be administered and applied solely for the purposes and in the manner provided in this
Bond Resolution, except as may be modified by the provisions of the Parity Resolution.
Section 602. Application of Moneys in Funds and Accounts. The Issuer covenants and agrees
that from and after the delivery of the Series 2019 Bonds and continuing so long as any of the Bonds shall
remain Outstanding, it will on the first day of each month administer and allocate all of the moneys then held
in the Revenue Fund as follows:
(a) Operation and Maintenance Account. There shall first be paid and credited to the
Operation and Maintenance Account an amount sufficient to pay the estimated cost of operating and
maintaining the System during the ensuing month. All amounts paid and credited to the Operation and
Maintenance Account shall be expended and used by the Issuer solely for the purpose of paying the
Expenses.
Parity Resolutions. The following transfers shall be made on a parity of lien basis with the transfers
and requirements of the Parity Resolutions.
25
(b) Debt Service Accornrt. There shall next be paid and credited monthly to the Debt Service
Account, to the extent necessary to meet on each Bond Payment Date the payment of all interest on and
principal of the Series 2019 Bonds, the following sums:
1 22 (1) Beginning with the first of said monthly deposits and continuing on the first day of
each month thereafter to and including March 1, 2020, an equal pro rata portion of the amount of
interest becoming due on the Series 2019 Bonds on April 1, 2020; and thereafter, beginning on April 1,
y 2020, and continuing on the first day of each month thereafter so long as any of the Series 2019 Bonds
2 remain Outstanding an amount not less than 1/6 of the amount of interest that will become due on the
Series 2019 Bonds on the next succeeding Interest Payment Date; and
0
(2) Beginning October 1, 2019 and continuing on the first day of each month thereafter,
so long as any of the Series 2019 Bonds remain Outstanding, an amount not less than 1/12 of the
amount of principal that will become due on the Series 2019 Bonds on the next succeeding Maturity
date.
The amounts required to be paid and credited to the Debt Service Account pursuant to this Section
shall be made at the same time and on a parity with the amounts at the time required to be paid and credited
to the debt service accounts established for the payment of the Debt Service Requirements on Parity Bonds
and Parity Obligations under the provisions of the Parity Resolution(s).
Any amounts deposited in the Debt Service Account in accordance with Section 502(n) hereof shall
be credited against the Issuer's payment obligations as set forth in subsection (b)(1)of this Section.
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 Debt Service Requirements of the Series 2019 Bonds as and when the
same become due at Maturity and on each Interest Payment Date.
If at any time the moneys in the Revenue Fund are insufficient to make in full the payments and
credits at the time required to be made to the Debt Service Account and to the debt service accounts
established to pay the principal of and interest on any Parity Bonds or Parity Obligations, the available
moneys in the Revenue Fund shall be divided among such debt service accounts in proportion to the
respective principal amounts of said series of Bonds at the time Outstanding which are payable from the
moneys in said debt service accounts.
(c) Series 2019 Debt Service Reserve Account. Except as hereinafter provided in this Section,
all amounts paid and credited to the Series 2019 Debt Service Reserve Account shall be expended and used
by the Issuer solely to prevent any default in the payment of interest on or principal of the Series 2019 Bonds
on any Maturity date or Interest Payment Date if the moneys in the Debt Service Account for the Series 2019
Bonds are insufficient to pay the Debt Service Requirements of the Series 2019 Bonds as they become due.
So long as the Series 2019 Debt Service Reserve Account aggregates the Debt Service Reserve Requirement
for the Series 2019 Bonds, no further payments into said Account shall be required, but if the Issuer is ever
required to expend and use a part of the moneys in said Account for the purpose herein authorized and such
expenditure reduces the amount of the Series 2019 Debt Service Reserve Account below the Debt Service
Reserve Requirement for the Series 2019 Bonds, or if the valuation of the Series 2019 Debt Service Reserve
Account as provided in Section 701(b) establishes that the value of the Series 2019 Debt Service Reserve
Account is below the Debt Service Reserve Requirement for the Series 2019 Bonds, the Issuer shall transfer
all available Revenues after providing for the transfers set forth above into the debt service reserve accounts
for the Parity Bonds and Parity Obligations until the Series 2019 Debt Service Reserve Account shall again
aggregate the Debt Service Reserve Requirement for the Series 2019 Bonds.
26
If at any time the moneys in the Revenue Fund are insufficient to make in full the payments and credits
111 at the time required to be made to the Series 2019 Debt Service Reserve Account and to fund any deficiencies
to the debt service reserve accounts established with respect to any Parity Bonds, the available moneys in the
Revenue Fund shall be divided among such debt service reserve accounts in proportion to the respective Debt
Service Reserve Requirement deficiencies for all other series of Parity Bonds at the time Outstanding.
Moneys in the Series 2019 Debt Service Reserve Account may be used to call the Series 2019 Bonds
for redemption and payment prior to their Stated Maturity or may be used to pay and retire the Series 2019
Bonds and interest thereon as the same become due; provided that after such redemption or payment there
shall remain in the Series 2019 Debt Service Reserve Account an amount equal to the Debt Service Reserve
Requirement for the remaining Outstanding Series 2019 Bonds. Any amounts in the Series 2019 Debt
Service Reserve Account in excess of the Debt Service Reserve Requirement for the Series 2019 Bonds on
any valuation date shall be transferred to the Debt Service Account for the Series 2019 Bonds.
(d) Debt Service Accounts-Junior Lieu Obligations. There shall next be paid and credited
monthly to the debt service account(s) for any Junior Lien Obligations, to the extent necessary to meet on
each Bond Payment Date an amount equal to the payment of all interest on and principal of any Junior Lien
Obligations. The amounts required to be paid and credited to the debt service account(s) for any Junior Lien
Obligations shall be made at the same time and on a parity with the amounts at the time required to be paid
and credited to other debt service accounts established for the payment of the Debt Service Requirements on
any Junior Lien Obligations.
(e) Debt Service Accounts-Subordinate Lien Bonds. There shall next be paid and credited
monthly to the debt service account(s) for any Subordinate Lien Bonds, to the extent necessary to meet on
each Bond Payment Date an amount equal to the payment of all interest on and principal of any Subordinate
Lien Bonds. The amounts required to be paid and credited to the debt service account(s) for any Subordinate
Lien Bonds shall be made at the same time and on a parity with the amounts at the time required to be paid
and credited to other debt service accounts established for the payment of the Debt Service Requirements on
any Subordinate Lien Bonds.
(f) Surplus Account. After all payments and credits required at the time to be made under the
provisions of the preceding subsections have been made, all moneys remaining in the Revenue Fund shall be
paid and credited to the Surplus Account. Moneys in the Surplus Account may be expended and used for the
following purposes as determined by the governing body of the Issuer:
(I) Paying the cost of the operation, maintenance and repair of the System to the extent
that may be necessary after the application of the moneys held in the Operation and Maintenance
Account under the provisions of paragraph(a)of this Section.
(2) Paying the cost of extending, enlarging or improving the System.
(3) Preventing default in, anticipating payments into or increasing the amounts in the Debt
Service Account, any debt service account for Parity Bonds or Parity Obligations, the Series 2019 Debt
Service Reserve Account, any debt service reserve account for Parity Bonds or Parity Obligations, or
any one of them, or establishing or increasing the amount of any debt service account or debt service
reserve account created by the Issuer for the payment of any Parity Bonds or Parity Obligations.
(4) Calling, redeeming and paying prior to Stated Maturity, or, at the option of the Issuer,
purchasing in the open market at the best price obtainable not exceeding the redemption price (if any
bonds are callable), any Bonds, including principal, interest and redemption premium, if any.
27
(5) Any other lawful purpose in connection with the operation of the System and
benefiting the System.
(6) To make transfers to the Revenue Fund.
min
(7) To make lawful transfers to any fund of the Issuer.
w
(g) Deficiency of Payments into Funds and Accounts. If at any time the Revenues are
g insufficient to make any payment on the date or dates hereinbefore specified, the Issuer will make good the
7.
amount of such deficiency by making additional payments or credits out of the first available Revenues, such
rzi
payments and credits being made and applied in the order hereinbefore specified in this Section.
Section 603. Transfer of Funds to Paying Agent. The Treasurer of the Issuer is hereby
authorized and directed to withdraw from the Debt Service Account, and, to the extent necessary to prevent a
default in the payment of either principal of or interest on the Series 2019 Bonds, from the Series 2019 Debt
Service Reserve Account and the Surplus Account as provided in Section 602 hereof, sums sufficient to pay
the principal of and interest on the Series 2019 Bonds as and when the same become due on any Bond
Payment Date, and to forward such sums to the Paying Agent in a manner which ensures the Paying Agent
will have available funds in such amounts on or before the Business Day immediately preceding each Bond
Payment Date. 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 Bond Resolution.
Section 604. Payments Due on Saturdays, Sundays and Holidays. In any case where a Bond
Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be
made on such Bond Payment Date but may be made on the next succeeding Business Day with the same
force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such
Bond Payment Date.
ARTICLE VII
DEPOSIT AND INVESTMENT OF MONEYS
Section 701. Deposits and Investment of Moneys.
(a) 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.
(b) Moneys held in any Fund or Account other than the Escrow Fund may be invested in
accordance with this Bond 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. All
earnings on investments held in the Series 2019 Debt Service Reserve Account shall accrue to and become a
part of the Series 2019 Debt Service Reserve Account until the amount on deposit in the Series 2019 Debt
28
Service Reserve Account shall aggregate the Debt Service Reserve Requirement for the Series 2019 Bonds;
thereafter, all such earnings shall be credited to the Debt Service Account. All earnings on investments held
in the Depreciation and Replacement Account shall accrue to and become a part of the Depreciation and
Replacement Account until the amount on deposit in the Depreciation and Replacement Account shall
aggregate the Depreciation and Replacement Requirement; thereafter, all such earnings shall be credited to
the Revenue Fund.
N In determining the amount held in any Fund or Account under the provisions of the Bond Resolution,
Permitted Investments shall be valued at their market value. Such valuation shall be made as of(i) the final
Stated Maturity of principal of any Fiscal Year that the Bonds remain Outstanding (ii) on the Redemption
Date set for any Parity Bonds, or (iii) on the Issue Date for any Additional Bonds. If and when the amount
held in any Fund or Account shall be in excess of the amount required by the provisions of this Bond
Resolution, the Issuer shall direct that such excess be paid and credited to the Revenue Fund.
ARTICLE VIII
GENERAL COVENANTS AND PROVISIONS
The Issuer covenants and agrees with each of the Owners of any of the Bonds that so long as any of
the Bonds remain Outstanding and unpaid it will comply with each of the following covenants:
Section 801. Efficient and Economical Operation. The Issuer will continuously own and will
operate the System as a revenue producing facility in an efficient and economical manner and will keep and
maintain the same in good repair and working order.
Section 802. Rate Covenant. The Issuer, in accordance with and subject to applicable legal
requirements, will fix, establish, maintain and collect such rates and charges for the use and services
furnished by or through the System as will produce Revenues sufficient to (a) pay the Expenses; (b) pay the
Debt Service Requirements on the Bonds as and when the same become due at the Maturity thereof or on any
Interest Payment Date; (c) enable the Issuer to have in each Fiscal Year, a Debt Service Coverage Ratio of
not less than 1.25 on all Parity Bonds and Parity Obligations at the time Outstanding; 1.10 on any Junior
Lien Obligations at the time Outstanding, and 1.00 on all Subordinate Lien Bonds at the time Outstanding;
and (d) provide reasonable and adequate reserves for the payment of the Bonds and the interest thereon and
for the protection and benefit of the System as provided in this Bond Resolution. The Issuer will require the
prompt payment of accounts for service rendered by or through the System and will promptly take whatever
action is legally permissible to enforce and collect delinquent charges. The Issuer will, from time to time as
often as necessary, in accordance with and subject to applicable legal requirements, revise the rates and
charges aforesaid in such manner as may be necessary or proper so that the Net Revenues will be sufficient
to cover the obligations under this Section and otherwise under the provisions of this Bond Resolution. If in
any Fiscal Year, Net Revenues are an amount less than as hereinbefore provided, the Issuer will immediately
employ a Consultant to make recommendations with respect to such rates and charges. A copy of the
Consultant's report and recommendations shall be filed with the Clerk and the Purchaser of the Bonds and
shall be furnished to any Owner of the Bonds requesting a copy of the same, at the cost of such Owner. The
Issuer shall, to the extent feasible, follow the recommendations of the Consultant.
Section 803. Reasonable Charges for all Services. None of the facilities or services provided by
the System will be furnished to any user(excepting the Issuer itself) without a reasonable charge being made
therefor. If the Revenues derived from the System are at any time insufficient to pay the reasonable
Expenses and also to pay the Debt Service Requirements of the Bonds and Additional Obligations as and
when the same become due, then the Issuer will thereafter pay into the Revenue Fund a fair and reasonable
payment in accordance with effective applicable rates and charges for all services or other facilities furnished
29
to the Issuer or any of its departments by the System, and such payments will continue so long as the same
may be necessary in order to prevent or reduce the amount of any default in the payment of the Debt Service
Requirements of the Bonds and Additional Obligations.
Section 804. Restrictions on Mortgage or Sale of System. The Issuer will not mortgage, pledge
or otherwise encumber the System or any part thereof, nor will it sell, lease or otherwise dispose of the
System or any material part thereof; provided, however, the Issuer may:
9
(a) sell at fair market value any portion of the System which has been replaced by other similar
property of at least equal value, or which ceases to be necessary for the efficient operation of the System, and
in the event of sale, the Issuer will apply the proceeds to either (1) redemption of Outstanding Bonds in
accordance with the provisions governing repayment of Bonds in advance of Stated Maturity, or (2)
replacement of the property so disposed of by other property the revenues of which shall be incorporated into
the System as hereinbefore provided;
(b) cease to operate, abandon or othenvise dispose of any property which has become obsolete,
nonproductive or othenvise unusable to the advantage of the Issuer;
(c) sell, lease or convey all or substantially all of the System to another entity or enter into a
management contract with another entity if:
(I) The transferee entity is a political subdivision organized and existing under the laws
of the State, or instrumentality thereof, or an organization described in Code § 501(c)(3), and
expressly assumes in writing the due and punctual payment of the principal of and premium, if any,
and interest on all outstanding System Indebtedness according to their tenor, and the due and
punctual performance and observance of all of the covenants and conditions of this Bond Resolution;
(2) If there remains unpaid any System Indebtedness which bears interest that is not
includable in gross income under the Code, the Issuer receives an opinion of Bond Counsel, in form
and substance satisfactory to the Issuer, to the effect that under then existing law the consummation of
such sale, lease or conveyance,whether or not contemplated on any date of the delivery of such System
Indebtedness, would not cause the interest payable on such System Indebtedness to become includable
in gross income under the Code;
(3) The Issuer receives a certificate of the Consultant which demonstrates and certifies
that immediately upon such sale or conveyance the transferee entity will not, as a result thereof, be in
default in the performance or observance of any covenant or agreement to be performed or observed by
it under this Bond Resolution;
(4) Such transferee entity possesses such licenses to operate the System as may be
required if it is to operate the System; and
(5) The Issuer receives an opinion of Bond Counsel, in form and substance satisfactory to
the Issuer, as conclusive evidence that any such sale, lease or conveyance, and any such assumption, is
permitted by law and complies with the provisions of this Section.
Section 805. Insurance. The Issuer will carry and maintain insurance with respect to the System
and its operations against such casualties, contingencies and risks (including but not limited to property and
casualty, fire and extended coverage insurance upon all of the properties forming a part of the System insofar
as the same are of an insurable nature, public liability, worker's compensation and employee dishonesty
insurance), such insurance to be of the character and coverage and in such amounts as would normally be
carried by other enterprises engaged in similar activities of comparable size and similarly situated; provided
30
the amount of such liability insurance shall be in amounts not less than the then maximum liability of a
governmental entity for claims arising out of a single occurrence, as provided by the State's tort claims act or
other similar future law(currently $500,000 per occurrence). In the event of loss or damage, the Issuer, with
reasonable dispatch, will use the proceeds of such insurance in reconstructing and replacing the property
damaged or destroyed, or in paying the claims on account of which such proceeds were received, or if such
reconstruction or replacement is unnecessary or impracticable, then the Issuer will pay and deposit the
proceeds of such insurance into the Revenue Fund. The Issuer will annually review the insurance it
maintains with respect to the System to determine that it is customary and adequate to protect its property
and operations. The cost of all insurance obtained pursuant to the requirements of this Section shall be paid
as an Expense out of the Revenues.
The Issuer may elect to be self-insured for all or any part of the foregoing requirements if(a) the
Issuer annually obtains a written evaluation with respect to such self-insurance program from an Insurance
Consultant, (b) the evaluation is to the effect that the self-insurance program is actuarially sound, (c) unless
the evaluation states that such reserves are not necessary, the Issuer deposits and maintains adequate reserves
for the self-insurance program with a corporate trustee, who may also be the Paying Agent, and (d) in the
case of workers' compensation, adequate reserves created by the Issuer for such self-insurance program are
deposited and maintained in such amount and manner as are acceptable to the State. The Issuer shall pay any
fees and expenses of such Insurance Consultant in connection therewith.
Section 806. Books, Records and Accounts. The Issuer will install and maintain proper books,
records and accounts (entirely separate from all other records and accounts of the Issuer) in which complete
and correct entries will be made of all dealings and transactions of or in relation to the System. Such
accounts shall show the amount of Revenues received from the System, the application of such funds, and all
financial transactions in connection therewith. Said books shall be kept by the Issuer according to generally
accepted accounting principles as applicable to the operation of municipal utilities.
Section 807. Annual Budget. Prior to the commencement of each Fiscal Year, the Issuer will
cause to be prepared and filed with the Clerk a budget setting forth the estimated receipts and expenditures of
the System for the next succeeding Fiscal Year. Said annual budget shall be prepared in accordance with the
requirements of the laws of the State and shall contain all information that is required by such laws,
including:
(a) An estimate of the Revenues from the System during the next ensuing Fiscal Year.
(b) A statement of the estimated Expenses during the next ensuing Fiscal Year.
(c) A statement of any anticipated unusual Expenses for the System during the next Fiscal Year.
(d) A statement of any necessary repairs or replacements to the System which may be
anticipated during the next Fiscal Year.
(e) A statement of the amount of Debt Service Requirements to be paid on Outstanding Bonds
and Additional Obligations to be paid from Net Revenues during the next Fiscal Year.
(0 A statement of the estimated Net Revenues during the next Fiscal Year.
Section 808. Annual Audit. Annually, promptly after the end of the Fiscal Year, the Issuer will
cause an audit to be made of the financial statements System for the preceding Fiscal Year by an Independent
Accountant to be employed for that purpose and paid from the Revenues. Said annual audit shall cover in
reasonable detail the operation of the System during such Fiscal Year. The report of said annual audit shall
include:
31
(a) A classified statement of the Revenues received, the Expenses for operation and
maintenance, the Net Revenues and the amount of any capital expenditures made in connection with the
System during the previous Fiscal Year;
(b) A complete balance sheet as of the end of each Fiscal Year with the amount on hand at the
w end of such Fiscal Year in each of the Funds and Accounts created by and referred to in this Bond
= Resolution:
N
s (c) A statement of all Bonds and Additional Obligations matured or redeemed and interest paid
on Bonds and Additional Obligations during said Fiscal Year;
(d) A statement of the number of customers served by the System at the beginning and the end
of such Fiscal Year;
(e) A statement showing the amount and character of the insurance carried on the property
constituting the System and showing the names of the insurers, the expiration dates of the policies and the
premiums thereon;
(f) A calculation of the Debt Service Coverage Ratio for such Fiscal Year, and a statement
regarding compliance by the Issuer with the rate covenants set forth in this Bond Resolution;
(g) Such remarks and recommendations regarding the practices and procedures of operating the
System and its accounting practices as said Independent Accountant may deem appropriate.
Within 30 days after the completion of each such annual audit, a copy of the report of thereof shall
be filed in the office of the Clerk. Such audit reports shall at all times during the usual business hours be
open to the examination and inspection by any user of the services of the System; any Owner of any of the
Bonds, or by anyone acting for or on behalf of such user or Owner.
As soon as possible after the completion of the annual audit, the governing body of the Issuer shall
review the report of such audit; and if the audit report discloses that proper provision has not been made for
all of the requirements of this Bond Resolution and the Act, the Issuer will promptly cure such deficiency
and will promptly proceed to modify the rates and charges to be charged for the use and services furnished
by the System or take such other action as may be necessary to adequately provide for such requirements.
Section 809. Right of Inspection. The Purchaser of the Bonds and any Owner or Owners of 10%
of the principal amount of the Bonds then Outstanding shall have the right at all reasonable times to inspect
the System and all records, accounts and data relating thereto, and shall be furnished all such information
concerning the System and the operation thereof which the Purchaser or such Owner or Owners may
reasonably request.
Section 810. Administrative Personnel. The Issuer shall use its best efforts to employ at all
times administrative personnel experienced and well qualified to operate the System. The Issuer further
agrees that such administrative personnel shall be employed in sufficient numbers to ensure that the System
will be operated in a prudent and efficient manner.
Section 811. Performance of Duties and Covenants. The Issuer will faithfully and punctually
perform all duties, covenants and obligations with respect to the operation of the System now or hereafter
imposed upon the Issuer by the Constitution and laws of the State and by the provisions of this Bond
Resolution.
32
Section 812. Report on System Condition. The Issuer shall annually cause a qualified employee
of the Issuer to make an examination of and report on the condition and operations of the System. Each such
report shall make recommendations as to any changes in operations of the System deemed desirable and shall
also make reference to any unusual or extraordinary items of maintenance and repair and any extensions,
enlargements or improvements that may be needed in the period prior to the preparation of the next report
required by this Section. A copy of each such report shall be filed in the office of the Clerk and, upon
0.
written request, to any Owner(at the expense of such Owner).
N
8
ARTICLE IX
ADDITIONAL BONDS AND OBLIGATIONS
Section 901. Senior Lien Bonds. The Issuer covenants and agrees that so long as any of the
Parity Bonds remain Outstanding, the Issuer will not issue any System Indebtedness payable out of the
Revenues which are superior to the Parity Bonds with respect to the lien on the Revenues.
Section 902. Parity Bonds and Parity Obligations. The Issuer covenants and agrees that it will
not issue any System Indebtedness which stands on a parity or equality of lien against the Net Revenues with
the Parity Bonds unless the following conditions are met:
(a) The Issuer shall not be in default in the payment of principal of or interest on any Parity
Bonds or Parity Obligations at the time Outstanding or in making any payment at the time required to be
made into the respective Funds and Accounts created by and referred to in this Bond Resolution or any Parity
Resolution (unless such System Indebtedness is being issued to provide funds to cure such default) nor shall
any other Event of Default have occurred and be continuing;
(b) The Issuer shall deliver the following:
(1) Long-Term Indebtedness. A certificate signed by the Issuer evidencing either of
the following:
(i) The Debt Service Coverage Ratio for the Fiscal Year immediately preceding
the issuance of such System Indebtedness, as determined by the Issuer, shall be not less than
1.25, including the System Indebtedness proposed to be issued. In the event that the Issuer has
instituted any increase in rates for the use and services of the System and such increase shall
not have been in effect during the full Fiscal Year immediately preceding the issuance of such
proposed System Indebtedness, the additional Net Revenues which would have resulted from
the operation of the System during said preceding Fiscal Year had such rate increase been in
effect for the entire period may be added to the stated Net Revenues for the calculation of the
Debt Service Coverage Ratio, provided that such estimated additional Net Revenues shall be
determined by a Consultant.
(ii) The estimated Debt Service Coverage Ratio (as determined by a Consultant),
for the Fiscal Year immediately following the Fiscal Year in which the project, the cost of
which is being financed by such System Indebtedness, is to be in commercial operation, shall
be not less than 1.25, including the System Indebtedness proposed to be issued. In the event
that the Issuer anticipates additional Revenues as a result of expansion or modification of the
System by such System Indebtedness, the Issuer may adjust the estimated Net Revenues in
determining the Debt Service Coverage Ratio, by adding thereto any estimated increase in Net
Revenues resulting from any increase in Revenues, which, in the opinion of the Consultant, are
reasonable based on projected operations of the System for such Fiscal Year.
33
(2)
the following: Short-Term Indebtedness. A certificate signed by the Issuer evidencing any one of
(i) The principal amount of all Outstanding Short-Term Indebtedness does not
exceed 15% of the Revenues for the most recently ended Fiscal Year for which financial
information is available from the Independent Accountant;
(ii) The Short-Term Indebtedness could be incurred under subsection (b)(1)
hereof assuming it was Long-Term Indebtedness.
(iii) There is delivered to the Issuer a certificate of a Consultant to the effect that
it is such Consultant's opinion that it is reasonable to assume that the Issuer will be able to
refinance such Short-Term Indebtedness prior to its Stated Maturity in compliance with the
provisions of this Section and the conditions described in subsection (b)(1) are met with
respect to such Short-Term Indebtedness when it is assumed that such Short-Term
Indebtedness is Long-Term Indebtedness maturing over 20 years (or such shorter period as
such Consultant indicates is reasonable to assume in such statement) from the date of
issuance of the Short-Term Indebtedness and bears interest on the unpaid principal.balance
at the Index Rate and is payable on a level annual debt service basis over a 20-year period
(or such shorter period as such Consultant indicates is reasonable to assume in such
statement).
(3) Interim Indebtedness. A certificate signed by the Issuer evidencing either of the
following:
(i) The Interim Indebtedness could be incurred under subsection (b)(I) hereof
assuming it was Long-Term Indebtedness.
(ii) There is delivered to the Issuer a certificate of a Consultant to the effect that
it is such Consultant's opinion that it is reasonable to assume that the Issuer will be able to
refinance such Interim Indebtedness prior to its Stated Maturity in compliance with the
provisions of this Section and the conditions described in subsection (b)(1) are met with
respect to such Interim Indebtedness when it is assumed that such Interim Indebtedness is
Long-Term Indebtedness maturing over 20 years (or such shorter period as such Consultant
indicates is reasonable to assume in such statement) from the date of issuance of the Interim
Indebtedness and bears interest on the unpaid principal balance at the Index Rate and is
payable on a level annual debt service basis over a 20-year period (or such shorter period as
such Consultant indicates is reasonable to assume in such statement).
(c) \Vhen the issuance of System Indebtedness of equal stature and priority is permitted by the
Statutes of the State.
(d) The ordinance and/or resolution authorizing such System Indebtedness shall contain or
provide for substantially the same terms, conditions, covenants and procedures as established in this Bond
Resolution.
Notwithstanding the foregoing restrictions, additional System Indebtedness may be issued under this
Section if it is necessary: (1) in the opinion of the Consulting Engineer to do so to repair the System if
damaged or destroyed by disaster to such extent necessary to keep it in good operating condition; or (2) in
the opinion of the Issuer's legal counsel to remedy any deficiency of the System relating to environmental
34
pollution matters or to comply with the requirements of any governmental agency having jurisdiction over
the Issuer with respect thereto.
Additional System Indebtedness issued under the conditions set forth in this Section shall stand on a
parity with the Parity Bonds and Parity Obligations and shall enjoy complete equality or lien on and claim
against the Net Revenues, and the Issuer may make equal provision for paying the Debt Service
w Requirements on such System Indebtedness out of the Revenue Fund and may likewise provide for the
g.
creation of reasonable debt service accounts and debt service reserve accounts for the payment of the Debt
N
8 Service Requirements on such System Indebtedness and the interest thereon out of moneys in the Revenue
Fund; provided, future System Indebtedness may, at the option of the Issuer, be issued without the creation
and funding of a debt service reserve account for such System Indebtedness.
Section 903. Junior Lien Obligations. Nothing in this Article shall prohibit or restrict the right
of the Issuer to issue Junior Lien Obligations for any lawful purpose in connection with the operation of and
benefiting the System and to provide that the Debt Service Requirements on such Junior Lien Obligations
shall be payable out of the Net Revenues, provided at the time of the issuance of such Junior Lien
Obligations the Issuer is not in default in the performance of any covenant or agreement contained in the
Bond Resolution (unless such System Indebtedness shall be issued to cure such default and shall be junior
and subordinate to the Parity Bonds and Parity Obligations) so that if at any time the Issuer shall be in default
in paying either interest on or principal of the Parity Bonds or Parity Obligations, or of the Issuer is in default
in making debt service, operation and maintenance or debt service reserve deposits or payments required to
be made by it under the Bond Resolution, the Issuer shall make no payments of either principal of or interest
on said Junior Lien Obligations until said default or defaults be cured.
Section 904. Subordinate Lien Bonds. Nothing in this Article shall prohibit or restrict the right
of the Issuer to issue Subordinate Lien Bonds for any lawful purpose in connection with the operation of and
benefiting the System and to provide.that the Debt Service Requirements on such Subordinate Lien Bonds
shall be payable out of the Net Revenues, provided at the time of the issuance of such Subordinate Lien
Bonds the Issuer is not in default in the performance of any covenant or agreement contained in the Bond
Resolution (unless such System Indebtedness shall be issued to cure such default and shall be junior and
subordinate to the Parity Bonds, Parity Obligations and Junior Lien Obligations) so that if at any time the
Issuer shall be in default in paying either interest on or principal of the Parity Bonds, Parity Obligations and
Junior Lien Bonds, or of the Issuer is in default in making debt service, operation and maintenance or debt
service reserve deposits or payments required to be made by it under the Bond Resolution, the Issuer shall
make no payments of either principal of or interest on said Subordinate Lien Bonds until said default or
defaults be cured. Such Subordinate Lien Bonds may also constitute general obligations of the Issuer.
Section 905. Refunding Bonds. The Issuer shall have the right, without complying with the
provisions of Section 902 hereof, to issue Refunding Bonds for the purpose of refunding any of the System
Indebtedness under the provisions of any law then available, and the Refunding Bonds so issued shall enjoy
complete equality of pledge as did the System Indebtedness that was refunded; provided, however, that if
only a portion of any series of System Indebtedness is refunded and if said System Indebtedness is refunded
in such manner that the Refunding Bonds bear a higher average rate of interest or become due on a date
earlier than that of the System Indebtedness which is refunded, then said System Indebtedness may be
refunded without complying with the provisions of Section 902 hereof only by and with the written consent
of the Owners of a majority in principal amount of the System Indebtedness that is not refunded; provided
that such consent is not needed from Owners of Subordinate Lien Bonds or Junior Lien Obligations, nor is
such consent needed if the System Indebtedness to be refunded constitutes Junior Lien Obligations or
Subordinate Lien Bonds.
35
ARTICLE X
DEFAULT AND REMEDIES
Section 1001. Remedies. The provisions of this Bond Resolution, including the covenants and
z agreements herein contained, shall constitute a contract between the Issuer and the Owners of the Bonds. If
an Event of Default occurs and shall be continuing, the Owner or Owners of not less than 10% in principal
amount of the Bonds at the time Outstanding shall have the right for the equal benefit and protection of all
Owners of Bonds similarly situated:
1-6 (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 Bond 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 Bonds.
The Issuer hereby directs the Paying Agent to notify, the Owners of any Event of Default of which it
has actual notice.
Section 1002. Limitation on Rights of Owners. The covenants and agreements of the Issuer
contained herein and in the Bonds shall be for the equal benefit, protection, and security of the Owners of
any or all of the Bonds, all of which Bonds of any series shall be of equal rank and without preference or
priority of one Bond over any other Bond in the application of the Funds and Accounts herein pledged to the
payment of the principal of and the interest on the Bonds, or otherwise, except as to rate of interest, date of
maturity and right of prior redemption as provided in this Bond 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 Owners of such Outstanding Bonds.
Section 1003. 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 Bond 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 Bonds by this Bond 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 Bonds shall, subject to any determination in such action
or proceeding or applicable law of the State, 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.
36
Section 1004. No Obligation to Levy Taxes. Nothing contained in this Bond Resolution shall be
construed as imposing on the Issuer any duty or obligation to levy any taxes either to meet any obligation
incurred herein or to pay the principal of or interest on the Bonds.
2 ARTICLE XI
N DEFEASANCE
Section 1101. Defeasance. When any or all of the Bonds, redemption premium, if any, or
scheduled interest payments thereon have been paid and discharged, then the requirements contained in this
Bond Resolution and the pledge of the Revenues hereunder and all other rights granted hereby shall
terminate with respect to the Bonds or scheduled interest payments thereon so paid and discharged. Bonds,
redemption premium, if any, or scheduled interest payments thereon shall be deemed to have been paid and
discharged within the meaning of this Bond 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 Bonds 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 or
Redemption Price of said Bonds 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 Bonds, no such satisfaction shall occur
until: (a) the Issuer has elected to redeem such Bonds, 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 Bond Registrar to give such notice of redemption in compliance with Section
302(a) of this Bond Resolution. 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 Bonds, 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 Bonds, 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 Bond Resolution.
ARTICLE XII
TAX COVENANTS
Section 1201. 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 Series 2019 Bonds; and (b) all provisions and requirements of the
Federal Tax Certificate. The Mayor 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 Series 2019 Bonds will remain excluded
from federal gross income, to the extent any such actions can be taken by the Issuer.
Section 1202. 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 Series 2019 Bonds
pursuant to Article XI hereof or any other provision of this Bond Resolution until such time as is set forth in
the Federal Tax Certificate.
37
ARTICLE XIII
CONTINUING DISCLOSURE REQUIREMENTS
z
Section 1301. Disclosure Requirements. The Mayor and Clerk are hereby authorized and directed
to execute the Disclosure Undertaking in a form approved by Bond Counsel, for and on behalf of and as the
act and deed of the Issuer. The Issuer hereby covenants with the Purchaser and the Beneficial Owners to
provide and disseminate such information as is required by the SEC Rule and as further set forth in the
Disclosure Undertaking, which are incorporated herein by reference. Such covenant shall be for the benefit
of and enforceable by the Purchaser and the Beneficial Owners.
Section 1302. Failure to Comply with Continuing Disclosure Requirements. In the event the
Issuer fails to comply in a timely manner with its covenants contained in the preceding section, the Purchaser
and/or any Beneficial Owner may make demand for such compliance by written notice to the Issuer. hi the
event the Issuer does not remedy such noncompliance within 10 days of receipt of such written notice, the
Purchaser or any Beneficial Owner may in its discretion, without notice or demand, proceed to enforce
compliance by a suit or suits in equity for the specific performance of such covenant or agreement contained
in the preceding section or for the enforcement of any other appropriate legal or equitable remedy, as the
Purchaser and/or any Beneficial Owner shall deem effectual to protect and enforce any of the duties of the
Issuer under such preceding section.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 1401. Amendments. The rights and duties of the Issuer and the Owners, and the terms and
provisions of the Bonds or of this Bond 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 Bonds 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 Bond;
(b) effect a reduction in the amount which the Issuer is required to pay as principal of or interest
on any Bond;
(c) permit preference or priority of any Bond over any other Bond;
(d) reduce the percentage in principal amount of Bonds required for the written consent to any
modification or alteration of the provisions of this Bond Resolution; or
(e) permit the creation of a lien on the Revenues prior or equal to the lien of the Parity Bonds or
Additional Obligations.
Any provision of the Bonds or of this Bond 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 Bonds at the time Outstanding.
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Without notice to or the consent of any Owners, the Issuer may amend or supplement this Bond
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 conform this Bond 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.
w
Every amendment or modification of the provisions of the Bonds or of this Bond Resolution, to
$ which the written consent of the Owners is given, as above provided, shall be expressed in a resolution or
ordinance adopted by the governing body of the Issuer amending or supplementing the provisions of this
8 Bond Resolution and shall be deemed to be a part of this Bond Resolution. A certified copy of every such
amendatory or supplemental resolution or ordinance, if any, and a certified copy of this Bond 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 Bond or a prospective purchaser or owner of any Bond authorized by this Bond Resolution,
and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or
supplemental resolution or ordinance or of this Bond 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 or ordinance of the Issuer hereinabove provided
for, duly certified, as well as proof of any required consent to such modification by the Owners of the Bonds
then Outstanding. It shall not be necessary to note on any of the Outstanding Bonds any reference to such
amendment or modification.
The Issuer shall furnish to the Paying Agent a copy of any amendment to the Bonds or this Bond
Resolution which affects the duties or obligations of the Paying Agent under this Bond Resolution.
Section 1402. 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 Bonds, if made in the following manner, shall be sufficient for any of the
purposes of this Bond 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 Bonds, the amount or amounts, numbers and other identification of
Bonds, and the date of holding the same shall be proved by the Bond Register.
In determining whether the Owners of the requisite principal amount of Bonds Outstanding have
given any request, demand, authorization, direction, notice, consent or waiver under this Bond Resolution,
Bonds owned by the Issuer shall be disregarded and deemed not to be Outstanding under this Bond
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 Bonds which the Owners know to
be so owned shall be so disregarded. Notwithstanding the foregoing, Bonds 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 Bonds and that the pledgee is not the Issuer.
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Section 1403. Notices. Any notice, request, complaint, demand or other communication required
or desired to be given or filed under this Bond 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
z 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 1404. Inconsistent Provisions. In case any one or more of the provisions of this Bond
Resolution or of the Bonds issued hereunder shall for any reason be inconsistent with the provisions of any
Parity Resolution or any Parity Bonds: (a)the provisions of any Parity Resolution adopted prior to this Bond
Resolution shall prevail with respect to Parity Bonds issued prior in time, so long as such Parity Bonds are
Outstanding; and (b) the provisions of this Bond Resolution shall prevail with respect to any Parity
Resolution adopted subsequent to the Bond Resolution, so long as any Parity Bonds issued under this Bond
Resolution are Outstanding.
Section 1405. Electronic Transactions. The issuance of the Series 2019 Bonds and the
transactions related thereto and described herein may be conducted and documents may be stored by
electronic means.
Section 1406. 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 of this Bond 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.
Section 1407. Severability. If any section or other part of this Bond 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 Bond Resolution.
Section 1408. Governing Law. This Bond Resolution shall be governed exclusively by and
construed in accordance with the applicable laws of the State.
Section 1409. Effective Date. This Bond Resolution shall take effect and be in full force from and
after its passage by the governing body of the Issuer.
[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
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ADOPTED by the governing body of the Issuer on August 19, 2019.
(SEAL) C
M4
Trent V. Davis, .D.,
Mayor
= ATTEST:
8
8 %Wilk
eI I
Shandi Nicks, CMC, City Clerk
a
I
(Signature Page to Bond Resolution)
EXHIBIT A
(FORM OF SERIES 2019 BONDS)
REGISTERED REGISTERED
NUMBER S
Unless this certificate is presented by an authorized representative of The Depository Trust Company,
a New York Corporation ("DTC"), to the Issuer or its agent for registration of transfer, exchange or
3 payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such
Other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
UNITED STATES OF AMERICA
STATE OF KANSAS
COUNTY OF SALINE
CITY OF SALINA
WATER AND SEWAGE SYSTEM REVENUE REFUNDING BOND
SERIES 2019
Interest Maturity Dated CUSIP:
Rate: Date: Date: September 11,2019
REGISTERED OWNER:
PRINCIPAL AMOUNT:
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
semiannually on April 1 and October 1 of each year, commencing April 1, 2020 (the "Interest Payment
Dates"), until the Principal Amount has been paid.
Method and Place of Payment. The principal or redemption price of this Series 2019 Bond shall be
paid at maturity or upon earlier redemption to the person in whose name this Series 2019 Bond is registered
at the maturity or redemption date thereof, upon presentation and surrender of this Series 2019 Bond at the
principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Paying Agent" and "Bond
Registrar"). The interest payable on this Series 2019 Bond on any Interest Payment Date shall be paid to the
person in whose name this Series 2019 Bond is registered on the registration books maintained by the Bond
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 Bond 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 Registered Owner of$500,000 or
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more in aggregate principal amount of Series 2019 Bonds, by electronic transfer to such Registered Owner
upon written notice given to the Bond 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 Series 2019 Bonds 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 Bond
Resolution.
9
= Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the hereinafter defined Bond Resolution.
Authorization of Series 2019 Bonds. This Series 2019 Bond is one of an authorized series of bonds
of the Issuer designated "Water and Sewage System Revenue Refunding Bonds, Series 2019," aggregating
the principal amount of $10,330,000 (the "Series 2019 Bonds") issued for the purposes set forth in the
Ordinance of the Issuer authorizing the issuance of the Series 2019 Bonds and the Resolution of the issuer
prescribing the form and details of the Series 2019 Bonds (collectively the "Bond Resolution"). The Series
2019 Bonds 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. 10-116a, as amended, and
all other provisions of the laws of the State of Kansas applicable thereto.
Special Obligations. The Series 2019 Bonds are special obligations of the Issuer payable solely
from, and secured as to the payment of principal and interest by a pledge of, the Net Revenues, and the
taxing power of the Issuer is not pledged to the payment of the Series 2019 Bonds either as to principal or
interest. The Series 2019 Bonds shall not be or constitute a general obligation of the issuer, nor shall they
constitute an indebtedness of the Issuer within the meaning of any constitutional, statutory or charter
provision, limitation or restriction. Under the conditions set forte in the Bond Resolution, the Issuer has
the right to issue additional System Indebtedness payable from the same source and secured by the
Revenues on a parity with said Revenues;provided, however, that such additional System Indebtedness
may be so issued only in accordance with and subject to the covenants, conditions and restrictions relating
thereto set forth in the Bond Resolution.
The Issuer hereby covenants and agrees with the Registered Owner of this Series 2019 Bond that it
will keep and perform all covenants and agreements contained in the Bond Resolution, and will fix, establish,
maintain and collect such rates, fees and charges for the use and services furnished by or through the System,
as will produce Net Revenues sufficient to pay the costs of operation and maintenance of the System, pay the
principal of and interest on the Series 2019 Bonds as and when the same become due, and provide reasonable
and adequate reserve funds. Reference is made to the Bond Resolution for a description of the covenants and
agreements made by the Issuer with respect to the collection, segregation and application of the Revenues,
the nature and extent of the security for the Series 2019 Bonds, the rights, duties and obligations of the issuer
with respect thereto, and the rights of the Registered Owners thereof.
Redemption Prior to Maturity. The Series 2019 Bonds are subject to redemption prior to maturity
as set forth in the Bond Resolution.
Book-Entry System. The Series 2019 Bonds are being issued by means of a book-entry system
with no physical distribution of bond certificates to be made except as provided in the Bond Resolution. One
certificate with respect to each date on which the Series 2019 Bonds are stated to mature or with respect to
each form of Series 2019 Bonds, registered in the nominee name of the Securities Depository, is being issued
and required to be deposited with the Securities Depository and immobilized in its custody. The book-entry
system will evidence positions held in the Series 2019 Bonds by the Securities Depository's participants,
beneficial ownership of the Series 2019 Bonds in Authorized Denominations being evidenced in the records
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of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and
its participants pursuant to rules and procedures established by the Securities Depository and its participants.
The Issuer and the Bond Registrar will recognize the Securities Depository nominee, while the Registered
Owner of this Series 2019 Bond, as the owner of this Series 2019 Bond for all purposes, including (i)
payments of principal of and redemption premium, if any, and interest on, this Series 2019 Bond, (ii)notices
and (iii) voting. Transfer of principal, interest and any redemption premium payments to participants of the
Securities Depository, and transfer of principal, interest and any redemption premium payments to Beneficial
Owners of the Series 2019 Bonds by participants of the Securities Depository will be the responsibility of
such participants and other nominees of such Beneficial Owners. The Issuer and the Bond Registrar will not
be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the
records maintained by the Securities Depository, the Securities Depository nominee, its participants or
persons acting through such participants. While the Securities Depository nominee is the Owner of this
Series 2019 Bond, notwithstanding the provision hereinabove contained, payments of principal of,
redemption premium, if any, and interest on this Series 2019 Bond shall be made in accordance with existing
arrangements among the Issuer, the Bond Registrar and the Securities Depository.
Transfer and Exchange. EXCEPT AS OTHERWISE PROVIDED IN THE BOND
RESOLUTION, THIS GLOBAL BOND MAY BE TRANSFERRED, LN WHOLE BUT NOT IN PART,
ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR
SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES
DEPOSITORY. This Series 2019 Bond may be transferred or exchanged, as provided in the Bond
Resolution, only on the Bond Register kept for that purpose at the principal office of the Bond Registrar,
upon surrender of this Series 2019 Bond together with a written instrument of transfer or authorization for
exchange satisfactory to the Bond Registrar duly executed by the Registered Owner or the Registered
Owner's duly authorized agent, and thereupon a new Series 2019 Bond or Series 2019 Bonds in any
Authorized Denomination of the same maturity and in the same aggregate principal amount shall be issued to
the transferee in exchange therefor as provided in the Bond 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 Series 2019 Bonds and the cost of a reasonable supply of bond blanks. The Issuer
and the Paying Agent may deem and treat the person in whose name this Series 2019 Bond is registered on
the Bond Register as the absolute owner hereof for the purpose of receiving payment of, or on account of,the
principal or redemption price hereof and interest due hereon and for all other purposes. The Series 2019
Bonds are issued in fully registered form in Authorized Denominations.
Authentication. This Series 2019 Bond shall not be valid or become obligatory for any purpose or
be entitled to any security or benefit under the hereinafter defined Bond Resolution until the Certificate of
Authentication and Registration hereon shall have been lawfully executed by the Bond 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 Series 2019 Bond 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, that the total indebtedness of the Issuer, including this series of bonds, does not exceed any
constitutional or statutory limitation, and that provision has been duly made for the collection and
segregation of the Revenues of the Water and Sewage System (the "System") and for the application of the
same as provided in the hereinafter defined Bond Resolution.
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IN WITNESS WHEREOF, the Issuer has caused this Series 2019 Bond 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
z
w [(Facsimile Seal)] (facsimile)
= Mayor
N
$ ATTEST:
By (facsimile)
Clerk
U
CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This Series 2019 Bond is one of a series of Water and Sewage System Revenue Refunding Bonds,
Series 2019, of the City of Salina, Kansas, described in the within-mentioned Bond Resolution.
Registration Date
Office of the State Treasurer,
Topeka, Kansas,
as Bond Registrar and Paying Agent
By
Registration Number
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 Series 2019
Bond has been duly registered in my office according to law as of September 11, 2019.
WITNESS my hand and official seal.
(Facsimile Seal) (facsimile)
Clerk
II
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CERTIFICATE OF STATE TREASURER
OFFICE OF THE TREASURER. STATE OF KANSAS
z
JAKE LATURNER, Treasurer of the State of Kansas, does hereby certify, that a transcript of the
proceedings leading up to the issuance of this Series 2019 Bond has been filed in the office of the State
Treasurer, and that this Series 2019 Bond was registered in such office according to law on
WITNESS my hand and official seal.
(Facsimile Seal) By: [(facsimile)]
Treasurer of the State of Kansas
I'
I
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•
BOND ASSIGNMENT
FOR VALUE RECEIVED, the undersigned do(es) hereby sell, assign and transfer to
(Name and Address)
0
(Social Security or Taxpayer Identification No.)
the Series 2019 Bond to which this assignment is affixed in the outstanding principal amount of
S standing in the name of the undersigned on the books of the Bond Registrar. The
undersigned do(es) hereby irrevocably constitute and appoint as agent to transfer
said Series 2019 Bond on the books of said Bond Registrar with full power of substitution in the premises.
Dated
Name
Social Security or
Taxpayer Identification No.
Signature (Sign here exactly as name(s)
appear on the face of Certificate)
Signature guarantee:
By
II
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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 Series
2019 Bonds:
GILMORE & BELL,P.C.
Attorneys at Law
2405 Grand Boulevard
Suite 1100
Kansas City, Missouri 64108-2521
(PRINTED LEGAL OPINION)
1
ft
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