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6.4 Resolution 22-8029 and Ordinance 22-11102 General Obligation BondsCITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 03/21/2022 4:00 P.M. AGENDA SECTION NO: ITEM NO: Page 1 ITEM: Resolution No. 22-8029, Ordinance No. 22-11102 A) Resolution No. 22-8029, authorizing the offering for public sale of general obligation bonds. B) First reading of Ordinance No. 22-11102, authorizing the issuance and delivery of approximately $8,200,000 principal amount of general obligation internal improvement bonds. C) Authorize the City Manager to enter into an agreement with Stifel, Nicolaus & Company, Incorporated to provide Financial Advisor services for the City of Salina for the Issuance of the 2022 general obligation bonds. BACKGROUND: Generally there are five (5) Commission action steps for a project financed with debt. 1. Budget and Capital Improvement approval — departments recommend projects they deem necessary for the next 5 years as part of the budget process. 2. Project Authorization — sets the maximum amount of funding (excluding financing costs) that a project may incur. 3. Temporary Note financing — to provide cash flow for the project and to enable the City to determine the final cost to be permanently financed. (This step may be skipped if the City has cash on hand to temporarily fund a project) 4. Contract Award — contractually commits City to the project (on occasion we may award a contract prior to issuance of temp notes if sufficient funds are on deposit to satisfy the cash basis law). 5. Permanent (Bond) Financing after the project is complete and final costs can be determined The process for the City to issue Temporary Notes and Bonds includes approximately 2.5 months of preparation (calendar attached). This step allows the process to formally begin and the process culminates with the City Commission accepting the bids for the sale of the Notes and Bonds in mid-April. Resolution 22-8029 authorizes the offering for public sale of the Bonds, and also provides for the preparation of the sale materials necessary for the offering of the Bonds, including the official statement, which is the document that describes and offers the issues to potential investors. Cities must issue bonds pursuant to an ordinance. Ordinance No. 22-11102, to be considered on first reading, authorizes the issuance and delivery of general obligation bonds. The second reading of the ordinance is scheduled for April 4, 2022, which coincides with the consideration of the bids on the bonds. The ordinance will be updated on the day of the bond sale to reflect the final terms of the bonds. CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 03F2-1—/2022 4:00 P.M. AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL: NO: FINANCE AND ADMINISTRATION Finance/Administration BY: ITEM FINAL APPROVAL: NO: Page 2 BY: Debbie Pack BY: The Bonds: General obligation bonds will retire a portion of the City's General Obligation Temporary Note Series 2021- 1, which matures on May 1, 2022, and permanently finance the following projects which are all in Step 5 of the financing process: Annual Debt Source of Debt Pro'ect Descri tion Fundin Amount* Term Payment" Payment 9'h Street Bride $ 1,935,000 20 yrs $ 125,000 PropertyTax Smoky Hill River $ 1,680,000 14 yrs $ 143,000 Property Tax Renewal Final Design Sanitation Trucks $ 1,610,000 7 yrs $ 254,000 Sanitation Fund Heritage Hall HVAC $ 165,000 10 yrs $ 19,000 Property Tax Magnolia Hills Estates 2 $ 1,530,000 15 yrs $ 124,000 Special Assessment Stone Lake Phase 3A $ 1,250,000 15 yrs $ 101,000 Special Assessment Markle Road Trail $ 25,000 15 yrs $ 2,000 Special Assessment Total $ 8,195,000 $ 768,000 *Includes the estimated cost of issuance. **Assumes 2.5% interest rate. The total amount of Bonds to be issued will be approximately $ 8,200,000 subject to final adjustments and cost of issuance. The current debt service payment paid from taxes and special assessments is approximately $5.5 to 6.0 million per year. That amount fluctuates over the next 20 years based on the payment schedule of every bond issue of the City. Based upon current payment schedules and estimates of payment schedules for the projects being funded in this issuance (via cash and Bonds), staff has estimated the following for the next 5 years: The following table identifies total future debt payment estimates including Construction of Fire Station #2 Debt Service Payments 2023 2024 2025 2026 2027 202 Total Debt Payments 14,413,745 14,056,375 1 14,227,600 13,375,283 13,018,772 12,521,555 These debt payments are supported by the following sources of revenue: • Taxes • Special Assessments 0 Enterprise Fund Revenues (Water/Wastewater, Solid Waste, Sanitation) AGENDA SECTION NO: ITEM NO: Page 3 CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 03/21/2022 4:00 P.M. ORIGINATING DEPARTMENT: FINANCE AND ADMINISTRATION Finance/Administration BY: Debbie Pack FISCAL APPROVAL: BY: FINAL APPROVAL: BY: Tax supported debt currently issued by the City is funded by the levy of a current property tax mill levy, delinquent tax collections, motor vehicle property tax collections, sales tax and transient guest tax collections. The following graphs show the effect on the revenues needed from Property Tax, Special Assessments and Sanitation Fees before and after the new debt is added, including debt for Fire Station No. 2 construction. 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 11500,000 1,000,000 500,000 0 Property Tax Revenue Supported Debt Payments Current Debt Service Fund perty Tax Revenue )55,000 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Property Tax Before — Property Tax After Depending on delinquent and motor vehicle tax collections, the City may need to utilize Debt Service Fund fund balance ($1.5 million at 12/31/21) or allocate additional property tax to Debt Service over the next few years. CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 03/21/2022 4:00 P.M. AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL: NO: FINANCE AND ADMINISTRATION BY. ITEM Finance/Administration FINAL APPROVAL: NO: Page 4 BY: Debbie Pack BY: Special Assessment Revenue Supported Debt Payments 1,800,000 1,600,D00 1AD0,000 1,200.000 l,0oo,oao —Special Assessments Before 800,000 —Special Assessments After 600,000 400,000 200,000 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Sanitation Revenue Supported Debt Payments 300000 250000 200000 150000 — Sanitation Before —Sanitation After 100000 50000 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 During the annual budget process, staff budgets and subsequently transfers into the Debt Service Fund the amount needed to make the scheduled debt payment from the Enterprise Funds for the budget year. Staff also budgets and transfers a flat $650,000 per year plus the scheduled debt payment amount for designated projects from the Sales Tax Capital Fund into the Debt Service Fund. The amount required from Property Tax for the next year is estimated annually during the budget process as follows: CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 03/21/2022 4:00 P.M. AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL: NO: FINANCE AND ADMINISTRATION BY: ITEM Finance/Administration FINAL APPROVAL: NO: Page 5 BY: Debbie Pack BY: Total Debt Payments Less Enterprise Fund Transfers Less Sales Tax Transfers Less Special Assessment Levied Less Delinquent Tax Collection Estimate Less Motor Vehicle Tax Collection Estimate Less Transient Guest Tax Estimate Equal Property Tax Dollars Required for Debt Payments The following table identifies the anticipated Property Tax requirement over the next 5 years: Debt Service Revenue Sources w/ 2021 Financing 2022 2023 2024 2025 2026 2027 Current Prop Tax 2,309,714 3,139,319 3,104,770 3,504,189 3,141,643 3,021,503 The following variables will affect the future Property Tax mill levy rate required to support debt: • Future issuance of debt supported by Property Taxes • Collection of other sources of taxes • Availability of Debt Service Fund fund balance (currently $1.5 million) (Target $800,000) • Interest rate of debt 1 Mill currently provides $452,800 in Property Taxes. $1,000,000 in debt carried over 20 years costs approximately $70,000/year. The current Debt Service Fund mill levy is 6.759. With the addition of the 2022 debt, the current debt service mill levy may change if any of the above variables fluctuate or fund balance is utilized. This rate is determined during the annual budget process. CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 03/21/2022 4:00 P.M. AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL: NO: FINANCE AND ADMINISTRATION BY: ITEM Finance/Administration FINAL APPROVAL: NO: Page 6 BY: Debbie Pack BY: The following graph shows the historical Debt Service Fund mill levy rates: Financial Advisory Services: Stifel, Nicolaus & Company, Inc. has provided financial advisory services to the City of Salina for many years as it relates to cash management, investments and debt issuance. In accordance with the Municipal Securities Rulemaking Board (MSRB), including MSRB Rule G-2, Stifel, Nicolaus & Company, Inc. is required to enter into a Financial Advisory Services Agreement, which outlines the scope of work, the fees and other disclosures, with the City to perform duties for each issuance of debt. Services to be provided by Stifel, Nicolaus & Company, Inc. include, but are not limited to, financial analysis and structuring, issuing official statements and offering documents, and coordination of all parties involved in the process. A draft of the agreement is attached. FISCAL NOTE: The cost of issuance will be added to the financing total at the time of issuing bonds. Debt payments will be supported as noted in the above tables. COMMISSION ACTION: Resolution 22-8029 Option 1: Approve Resolution No. 22-8029 authorizing the offering for public sale of general obligation bonds Option 2: Approve Resolution No. 22-8029 with amendments as City Commission deems appropriate. Option 3: Postpone consideration of Resolution No. 22-8029 to a specific date and time and provide staff AGENDA SECTION NO: ITEM NO: Page 7 CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 03/21/2022 4:00 P.M. ORIGINATING DEPARTMENT: FINANCE AND ADMINISTRATION Finance/Administration BY: Debbie Pack FISCAL APPROVAL: M FINAL APPROVAL: 93 with direction regarding additional information or amendments the city Commission would like to request for their further consideration. This option would postpone the sale of the notes and bonds which would require the City to pay off the current notes using cash. Option 4: Vote to deny Resolution No. 22-8029 resulting in the City not being able to debt finance these projects and having to come up with alternative funding methods for the projects. Staff Recommends Option 1. Ordinance 22-11102 Option 1: Adopt on first reading Ordinance No. 22-11102 authorizing issuance of general obligation bonds to fund the North gch Street Bridge, Final Design of River Renewal Project, Automated Sanitation Trucks, Heritage Hall HVAC, Magnolia Hills Estates 2, Stone Lake Phase 3A, and Markley Road Trail projects. Option 2: Adopt on first reading Ordinance 22-11102 with amendments as City Commission deems appropriate. Option 3: Postpose first reading of Ordinance 22-11102 until a specific time and date and give staff direction on additional information requested. This option would cause the City to have to pay off the current notes on these projects from cash or issue more temporary notes. Option 4: Do not adopt on first reading Ordinance No. 22-11102 which would require the City to find an alternative funding source for these projects which have already been completed. Staff Recommends Option 1. Financial Advisory Services: Option 1: Authorize the City Manager to sign the Financial Advisory Services Agreement with Stifel, Nicolaus & Company, Inc. Option 2: Authorize the City Manager to sign the Financial Advisory Services Agreement with Stifel, Nicolaus & Company, Inc. with amendments as City Commission deems appropriate. Option 3: Postpose consideration of the Financial Advisory Services Agreement with Stifel, Nicolaus & Company, Inc. This option would cause the City to have to pay off the current notes on these projects from cash or issue more temporary notes Option 4: Do not authorize the City Manager to sign the Financial Advisory Services Agreement with Stifel, Nicolaus & Company, Inc. which would require the City to find an alternative funding source for these projects. CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 03/21/2022 4:00 P.M. AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL: NO: FINANCE AND ADMINISTRATION BY: ITEM Finance/Administration FINAL APPROVAL: NO: Page 8 BY: Debbie Pack BY: Staff Recommends Option 1 Attachments: Debt Issuance Calendar Resolution No. 22-8029 Ordinance No. 22-11102 Financial Advisory Services Agreement City of Salina, Kansas General Obligation Bonds and Temporary Notes Series 2022-A and 2021-1 Responsible Activity Party January, 19 Cityprovide draft final feasibilityreports to Gilmore & Bell for review 24 Certification of Statement of Final Costs and proposed assessment rolls Preparation of inttial assessment proceedings February 4 Bond and Note projects determined and financing plan developed 7 Commission approves final project costs andsets assessment hearing date First reading of Assessment Ordinance Begin preliminary official statement ('POS") data collection 8 Notice of Assessment Hearing sent to local paper Notice of Assessment Hearing mailed to property owners 10 Notice of Assessment Heartngpublished in local paper 21 Draft POS distributed for comment Information forwarded to rating agency, Rating call scheduled 28 Assessment Ordinance sent to local paper (by 1:00pm) Assessment Hearing date Pass Assessment Ordinance on second reading Commission reviews financing plan (optional) March 1 Find assessment statements mailed to property owners Draft Bond Ordinance distributed Draft resolution authorizing sale of Bonds/Notes ("Sale Resolution") distributed Draft notice of sale ("NOS") and summary notice ("SNOS") distributed 2 Assessment Ordinance published' Begin 30 day prepayment period 7 Comments due on draft Sale Resolution Final Sale Resolution forwarded to City 14 Commission adopts Sale Resolution First reading of Bond Ordinance 15 CUSIP numbers applied 17 Comments due on SNOS; SNOS forwarded to KS Register and local paper Pre -rating meeting (on or before this date) 18 Rating conference call (on or before this date) 24 SNOS Published in KS Register and local paper 25 Comments due on POS and NOS Receive rating from rating agency 28 Draft Bond/Note Resolutions distributed NOS forwarded to Bloomberg and The Bond Buyer POS distributed to potential bidders Aortl 1 30 day assessment prepayment period expires Finalize bond sizing 4 Bond/Note sale date Final terms incorporated into Bond Ordinance and Bond/Now Resolutions Final Bond Ordinance and Bond/Note Resolutions Forwarded to City Results of sale presented to Commission Pass Bond Ordinance on second reading and Pass Bond/Note Resolutions 5 Bond Ordinance forwarded to local paper Transcript assembly begins 7 Final Official Statement printed Bond Ordinance published in local paper 20 Bond/Note printing complete; Bonds/Notes forwarded to State Treasurer Transcript completed and forwarded to Attorney General Bond/Note registration instructions to State Treasurer 21 Closing arrangements distributed in writing 25 Transcript approved Bonds/Notes registered and forwarded to DTC 28 Closing and delivery of funds mav I Series 2021-1 temporary note redeemed Assessment related activity I = Issuer, City of Salina BC = Bond Counsel, Gilmore & Bell MA= Municipal Advisor, Stifel, Nicolaus & Company I/BC/MA BC IBC/MA MA IBC I MA MA VBC I 1 VMA BC BC BC UBC/MA BC VBC/MA 1 MA VBC/MA VMA VMA 1/BC/MA VMA BC MA MA February ©©n©oo© ■■n©©o© oAnoimimim mmmmmmm mimmimmimim imm■W■E■ EMEMEEN 5 M r W R F 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 la 19 20 21 22 23 24 25 26 27 28 29 30 31 VMA 5 M r W R F 5 1/BC/MA 1 2 BC 4 5 6 7 8 9 BC 10 11 12 13 14 15 16 VMA 17 18 19 10 21 22 23 1 24 25 26 27 28 29 30 I/BC BC MA BC BC MA VBC/MA STIFEL 1 °pb°`n""0f 01)19)22 RESOLUTION NO. 22-8029 A RESOLUTION AUTHORIZING THE OFFERING FOR SALE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2022-A, OF THE CITY OF SALINA, KANSAS. WHEREAS, the City of Salina, Kansas (the "Issuer") has previously authorized certain improvements described as follows (collectively the "Improvements"): Date Amount Amount 2021-1 04/29/2021 Estimated $5,230,000 $5,230,000 Improvement Project Description Ord./Res. No. Authoritv (K.S.A.) Fund Deposit* Ord. 02-10071; Res No. 19 - North 9th Street Bridge 7677 K.S.A. 12-685 et seq. $1,917,141.87 Smoky Hill River Renewal Ord. 17-10885 Kan. Const. Article 12, §5 1,658,443.62 Automated Sanitation Trucks Res. 20-7818 K.S.A. 12-2104 1,592,503.73 Great Plains Manufacturing Center Convention Hall HVAC Tony's Pizza Event Center Res. 21-7931 K.S.A. 12-1736 et seq. 167,091.89 Magnolia Hills Estates No. 2 Res. 19-7760 K.S.A. 12-6a01 et seg. 1,512,451.14 Stone Lake Phase 3a Res. 19-7751 K.S.A. 12-6a01 et seq. 1,236,043.56 Magnolia Hills Estates No. 2 - Markley Road Trail Res. 21-7957 K.S.A. 12-6a01 et seg. 25,190.49 Total. $8,109,136£30 *Excludes costs of issuance. WHEREAS, the Issuer desires to issue its general obligation bonds in order to permanently finance the costs of such Improvements and to retire the following temporary notes of the Issuer, which were issued to temporarily finance a portion of the costs of the Improvements (the "Refunded Notes"): Dated Maturity Original Outstanding Series Date Date Amount Amount 2021-1 04/29/2021 05/01/2022 $5,230,000 $5,230,000 WHEREAS, the Issuer proposes to issue its general obligation bonds to pay a portion of the costs of the Improvements and to retire the Refunded Notes; and WHEREAS, the Issuer has selected the firm of Stifel, Nicolaus & Company, Incorporated, Kansas City, Missouri ("Municipal Advisor"), as municipal advisor for one or more series of municipal temporary notes and one or more series of general obligation bonds of the Issuer, to be issued in order to provide funds to pay the costs of the Improvements; and WHEREAS, the Issuer desires to authorize the Municipal Advisor to proceed with the offering for sale of said general obligation bonds and related activities; and WHEREAS, one of the duties and responsibilities of the Issuer is to prepare and distribute a preliminary official statement relating to said general obligation bonds; and WHEREAS, the Issuer desires to authorize the Municipal Advisor and Gilmore & Bell, P.C., Kansas City, Missouri, the Issuer's bond counsel ("Bond Counsel'), in conjunction with the Clerk, and other officers and representatives of the Issuer to proceed with the preparation and distribution of a preliminary official statement and notice of sale and to authorize the distribution thereof and all other preliminary action necessary to sell said general obligation bonds and general obligation temporary notes. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. There is hereby authorized to be offered for sale the Issuer's General Obigation Internal Improvment Bonds, Series 2022-A (the "Bonds") described in the Notice of Bond Sale, which is hereby approved in substantially the form presented to the Governing Body this date (the "Notice of Bond Sale'). All proposals for the purchase of the Bonds shall be delivered to the Governing Body at its meeting to be held on the sale date referenced in the Notice of Bond Sale, at which meeting the Governing Body shall review such bids and award the sale of the Bonds or reject all proposals. Section 2. The Mayor, Clerk and Director of Finance in conjunction with the Municipal Advisor and Bond Counsel are hereby authorized to cause to be prepared a Preliminary Official Statement relating to the Bonds (the "Preliminary Official Statement', and such officials and other representatives of the Issuer are hereby authorized to use such document in connection with the sale of the Bonds. Section 3. The Clerk, in conjunction with the Municipal Advisor and Bond Counsel, is hereby authorized and directed to give notice of said bond sale by publishing a summary of the Notice of Bond Sale not less than 6 days before the date of the bond sale in a newspaper of general circulation in Saline County, Kansas, and the Kansas Register and by distributing copies of the Notice of Bond Sale and Preliminary Official Statement to prospective purchasers of the Bonds. Proposals for the purchase of the Bonds shall be submitted upon the terns and conditions set forth in the Notice of Bond Sale, and awarded or rejected in the manner set forth in the Notice of Bond Sale. Section 4. For the purpose of enabling the purchaser of the Bonds (the "Purchaser") to comply with the requirements of Rule 15c2-12 of the Securities and Exchange Commission (the "Rule'), the Mayor, Clerk, City Manager, Director of Finance or other appropriate officers of the Issuer are hereby authorized: (a) to approve the form of the Preliminary Official Statement and to execute the "Certificate Deeming Preliminary Official Statement Final" in substantially the form attached hereto as Exhibit A as approval of the Preliminary Official Statement, such official's signature thereon being conclusive evidence of such official's and the Issuer's approval thereof; (b) covenant to provide continuous secondary market disclosure by annually transmitting certain financial information and operating data and other information necessary to comply with the Rule to the Municipal Securities Rulemaking Board; and (c) take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Purchaser to comply with the requirement of the Rule. Section 5. The Issuer agrees to provide to the Purchaser within seven business days of the date of the sale of Bonds or within sufficient time to accompany any confirmation that requests payment from any customer of the Purchaser, whichever is earlier, sufficient copies of the final Official Statement to enable the Purchaser to comply with the requirements of the Rule and with the requirements of Rule G- 32 of the Municipal Securities Rulemaking Board. Section 6. The Mayor, Clerk, City Manager, Director of Finance and the other officers and representatives of the Issuer, the Municipal Advisor and Bond Counsel, are hereby authorized and directed to take such other action as may be necessary to carry out the sale of the Bonds, including making provision for payment and/or redemption of the Refunded Notes. Any sale of the Bonds shall be subject to further approval by the governing body. The transactions described in this Resolution may be conducted, and documents related to the Obligations may be sent, received, executed, and stored, by electronic means or transmissions. Copies, telecopies, electronic files and other reproductions of original executed documents (or documents executed by electronic means or transmissions) shall be deemed to be authentic and valid counterparts of such documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 7. This Resolution shall be in full force and effect from and after its adoption by the governing body. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] ADOPTED by the City Commission on March 21, 2022. (SEAL) Trent W. Davis, M.D., Mayor ATTEST: JoVonna A. Rutherford, City Clerk ORDINANCE NO. 22-11102 OF THE CITY OF SALINA, KANSAS PASSED APRIL 4, 2022 GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS SERIES 2022-A ORDINANCE NO. 22-11102 AN ORDINANCE AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION INTERNAL IMPROVEMENT BONDS, SERIES 2022- A, OF THE CITY OF SALINA, KANSAS; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON SAID BONDS AS THEY BECOME DUE; AUTHORIZING CERTAIN OTHER DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH; AND MAKING CERTAIN COVENANTS WITH RESPECT THERETO. WHEREAS, the City of Salina, Kansas (the "City") is a city of the first class, duly created, organized and existing under the Constitution and laws of the State; and WHEREAS, pursuant to the Constitution and laws of the State of Kansas, by proceedings duly had, the City Commission of the City (the "Governing Body") has authorized the following improvements (the "Improvements") to be made in the City, to -wit: WHEREAS, the Governing Body is authorized by law to issue general obligation bonds of the City to pay a portion of the costs of the Improvements; and WHEREAS, the Governing Body has advertised the sale of the Bonds in accordance with the law and at a meeting held in the City on this date, awarded the sale of such Bonds to the best bidder. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. Definitions of Words and Terms. In addition to words and terms defined elsewhere herein, the following words and terms in this Ordinance 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. Allocable Principal Project Description Ord./Res. No. Authority (K.S.A.) Amount of Bonds Ord. 02-10071; Res No. 19 - North 9' Street Bridge 7677 K.S.A. 12-685 et seg. $1,935,000 Smoky Hill River Renewal Ord. 17-10885 Kan. Const. Article 12, §5 1,680,000 Automated Sanitation Trucks Res. 20-7818 K.S.A. 12-2104 1,610,000 Great Plains Manufacturing Center Convention Hall HVAC Tony's Pizza Event Center Res. 21-7931 K.S.A. 12-1736 et seq. 165,000 Magnolia Hills Estates No. 2 Res. 19-7760 K.S.A. 12-6a01 et seg. 1,530,000 Stone Lake Phase 3a Res. 19-7751 K.S.A. 12-6a01 et seq. 1,250,000 Magnolia Hills Estates No. 2 - Markley Road Trail Res. 21-7957 K.S.A. 12-6a0I etseq. 25.000 Total. $8,195,000 WHEREAS, the Governing Body is authorized by law to issue general obligation bonds of the City to pay a portion of the costs of the Improvements; and WHEREAS, the Governing Body has advertised the sale of the Bonds in accordance with the law and at a meeting held in the City on this date, awarded the sale of such Bonds to the best bidder. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. Definitions of Words and Terms. In addition to words and terms defined elsewhere herein, the following words and terms in this Ordinance 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, particularly Article 12, § 5 thereof, and statutes of the State including K.S.A. 10-101 to 10-125, inclusive, K.S.A. 10-620 et seq., K.S.A. 12-685 et seq., K.S.A. 12-1736 et seq., K.S.A. 12-6a01 et seq., and K.S.A. 12- 2104, all as amended and supplemented from time to time. "Bond and Interest Fund" means the Bond and Interest Fund of the City for its general obligation bonds. "Bond Resolution" means the resolution to be adopted by the Governing Body prescribing the terms and details of the Bonds and making covenants with respect thereto. "Bonds" means the City's General Obligation Internal Improvement Bonds, Series 2022-A, dated April 28, 2022, authorized by this Ordinance. "City" means the City of Salina, Kansas. "Clerk" means the duly appointed and acting Clerk of the City or, in the Clerk's absence, the duly appointed Deputy or Acting Clerk. "Director of Finance" means the duly appointed and/or elected Director of Finance or, in the Director of Finance's absence, the duly appointed Deputy Director of Finance or Acting Director of Finance of the Issuer. "Improvements" means the improvements referred to in the preamble to this Ordinance and any Substitute Improvements. "Mayor" means the duly elected and acting Mayor of the City or, in the Mayor's absence, the duly appointed and/or elected Vice Mayor or Acting Mayor of the City. "Ordinance" means this Ordinance authorizing the issuance of the Bonds. "Refunded Notes" means the Series 2021-1 Notes. "Series 2021-1 Notes" means the City's General Obligation Temporary Notes, Series 2021-1, dated April 29, 2021, in the aggregate principal amount of $5,230,000. "State" means the State of Kansas. "Substitute Improvements" means the substitute or additional improvements of the City authorized in the manner set forth in the Bond Resolution. Section 2. Authorization of the Bonds. There shall be issued and hereby are authorized and directed to be issued the General Obligation Internal Improvement Bonds, Series 2022-A, of the City in the principal amount of $8,195,000* for the purpose of providing funds to: (a) pay a portion of the costs of the Improvements, including retiring the Refunded Notes; and (b) pay the costs of issuance of the Bonds. Section 3. Security for the Bonds. The Bonds shall be general obligations of the City payable as to both principal and interest in part from special assessments levied upon the property benefited by the construction of the Improvements and, if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The balance of the principal and interest on the Bonds is payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of the principal of and interest on the Bonds as the same become due. Section 4. Terms, Details and Conditions of the Bonds. The Bonds shall be dated and bear interest, shall mature and be payable at such times, shall be in such forms, shall be subject to redemption and payment prior to the maturity thereof, and shall be issued and delivered in the manner prescribed and subject to the provisions, covenants and agreements set forth in the Bond Resolution hereafter adopted by the Governing Body. Section 5. Levy and Collection of Annual Tax. The Governing Body shall annually make provision for the payment of principal of, premium, if any, and interest on the Bonds as the same become due by levying and collecting the necessary taxes and/or assessments upon all of the taxable tangible property within the City in the manner provided by law. The taxes and/or assessments above referred to shall be extended upon the tax rolls in each of the several years, respectively, and shall be levied and collected at the same time and in the same manner as the general ad valorem taxes of the City are levied and collected, shall be used solely for the payment of the principal of and interest on the Bonds as and when the same become due and the fees and expenses of the paying agent for the Bonds. The proceeds derived from said taxes [and/or assessments] shall be deposited in the Bond and Interest Fund. If at any time said taxes and/or assessments are not collected in time to pay the principal of or interest on the Bonds when due, the City Treasurer is hereby authorized and directed to pay said principal or interest out of the general funds of the City and to reimburse said general funds for money so expended when said taxes and/or assessments are collected. Section 6. Further Authority. The Mayor, Director of Finance, Clerk and other City officials are hereby further authorized and directed to execute any and all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of the Ordinance, and to make 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 7. Governing Law. This Ordinance and the Bonds shall be governed exclusively by and construed in accordance with the applicable laws of the State. Section 8. Effective Date. This Ordinance shall take effect and be in full force from and after its passage by the Governing Body, and publication of the Ordinance (or a summary thereof) in the official City newspaper. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] PASSED by the Governing Body on April 4, 2022 and SIGNED by the Mayor. (SEAL) Trent W. Davis, M.D., Mayor ATTEST: JoVonna A, Rutherford, City Clerk Debbie Pack, Finance Director City of Salina, Kansas 300 West Ash Street Salina, Kansas 67401 RE: FINANCIAL ADVISORY SERVICES General Obligation Internal Improvement Bonds, Series 2022-A General Obligation Temporary Notes, Series 2022-1 Stifel, Nicolaus & Company, Incorporated ("Stifel") presents for your acceptance this agreement to retain Stifel as financial advisor to the City of Salina, Kansas ('Issuer') for the proposed General Obligation Internal Improvement Bonds, Series 2022-A and General Obligation Temporary Notes, Series 2022-1 (collectively, the "Securities') estimated to be issued in the aggregate principal amount of approximately $7,000,000 and $5,000,000, respectively. This agreement will be effective on the date signed by an authorized representative of Issuer and will authorize Stifel to act as financial advisor through the completed sale of the proposed Securities, at which time this agreement will terminate. This agreement may also be terminated on thirty (30) days written notice by either party. 1. Scope of Work. Stifel agrees to perform the following services for Issuer with respect to the Securities: a. Assume overall responsibility for the financial analysis and structuring recommendations for the Securities; b. Draft the preliminary and final official statements, offering memoranda or term sheets ("Offering Documents") based on information provided by the Issuer as well as information derived from other sources. The information contained in the Offering Documents will be derived from the sources stated or, if not otherwise sourced, from the Issuer. Stifel makes no representation, warranty or guarantee regarding the accuracy or completeness of the information in the Offering Document, and its assistance in preparing the Offering Document should not be construed as a representation that it has independently verified such information. The Issuer will be expected to examine, approve and make certifications with respect to the information in the Offering Documents in accordance with its obligations under the federal securities laws. c. Assist Issuer, as requested, in the selection of an underwriter(s) or placement agent, including review of underwriter or placement agent recommendations to the extent requested in writing by Issuer, and coordinate all activities of the underwriter(s) or placement agent; d. Coordinate with consultants, accountants, bond counsel, other attorneys and staff in connection with the sale of the Securities; e. Coordinate financing time schedule, distribution of documents, preliminary and final official statement printing, wire -transfer of funds, delivery of the Securities and closing; 1 f. Assist Issuer on the matter of rating(s) for the proposed issues and coordinate the preparation of credit information for submission and presentation to the rating agency(ies); g. Coordinate pre -pricing discussions of security pricing and structuring, supervise the sale process, and advise on acceptability of offer to purchase the Securities by the underwriters; h. If requested, assist Issuer in procuring any appropriate ancillary financing -related products and services including, credit enhancement (e.g., bond insurance), paying agent/registrar/trustee, escrow agent (if applicable), escrow investments, and other such products and services as Issuer may deem necessary or desirable in connection with any financing. i. Attend Issuer meetings as requested, with reasonable advance notice; Provide such other services as are mutually agreed upon in writing by Issuer and Stifel 2. Issuer's Obligations. Issuer agrees that, with respect to the Securities, its staff and consultants will cooperate with Stifel and make available any data in the possession of Issuer necessary to perform Stifel's financial advisory services and regulatory obligations as described in Exhibit A to this agreement. 3. Regulatory Disclosures: a. Issuer is aware of Section 975 of the Dodd -Frank Wall Street Reform and Consumer Protection Act and the Securities and Exchange Commission's adopted rule commonly known as the "Municipal Advisor Rule" (SEC Rule 1513a1-1 to 1513a1-8 -"the Rule"). Stifel will be serving as a municipal advisor to the Issuer under the Rule and this agreement documents the municipal advisory relationship between Stifel and the Issuer. b. MSRB Rule G-42 requires that a municipal advisor provide its client with certain written disclosures. Please see Exhibit A to this agreement for those disclosures. 4. Compensation: For Stifel's financial advisory services and expenses in processing the Securities to be sold in simultaneous sales, Stifel shall be paid a fee for each series equal to 0.50% of the par amount for the first $500,000 of par plus 0.25% for all par amount in excess of $500,000, to be paid at the completion of the sale of the Securities. This amount includes all out of pocket expenses. 5. Authority to Direct Financial Advisor: The following individuals have the authority to direct Stifel's performance of its scope of work under this agreement: Mike Schrage, City Manager; Debbie Pack, Finance Director; Jacob Wood, Deputy City Manager. 2 Respectfully submitted this _ day of 2022. STIFEL, NICOLAUS & COMPANY, INCORPORATED By: Name: Title: ACCEPTANCE I, [insert title], upon approval by the governing body of the City of Salina, Kansas, hereby accept the agreement as submitted by Stifel, Nicolaus & Company, Incorporated relative to the financial advisory services, as described herein. By: _ Name: Title: Date: EXHIBIT A City of Salina, Kansas Financial Advisory Services for General Obligation Internal Improvement Bonds, Series 2022-A General Obligation Temporary Notes, Series 2022-1 MSRB Rule G-42 Disclosures As municipal advisor to the City of Salina, Kansas ("you"), Stifel Nicolaus ("Stifel" or "we") is subject to the rules of the Municipal Securities Rulemaking Board (MSRB), including MSRB Rule G42. The rule directs us to make certain disclosures to you. Please review the following disclosures and contact your Stifel municipal advisor if you have any questions. Our Duties as Your Municipal Advisor Rule G-42 describes our basic duties to you. Most importantly, we owe you a fiduciary duty, the principal element of which is a duty of loyalty. Under the duty of loyalty, we are required to deal honestly and in the utmost good faith with you and to act in your best interests without regard to our financial or other interests. We may not serve as your municipal advisor if we believe that we have any conflicts of interest that we cannot manage or mitigate so that we can act in your best interests. Rule G42 also provides that we owe you a duty of care. As part of that duty, we must possess the degree of knowledge and expertise needed to provide you with informed advice. Also, under that duty, when we make recommendations to you or help you to evaluate the recommendations of others, we may need to ask questions to make sure that we have all the relevant facts. Disclosure of Conflicts Rule G-42 requires us to disclose to you any known material, actual or potential conflicts of interest that could reasonably be expected to impair our ability to provide you with advice, including any conflicts associated with contingent fee arrangements. As described in our engagement letter, the payment of our fee will be contingent on the closing of the bond issue described in the engagement letter and the amount of compensation will be based on a percentage of the principal amount of the bond issue. While this form of compensation is customary in the municipal securities market, it presents a conflict of interest since we may have an incentive to recommend a transaction to you that is unnecessary or to recommend that the size of the bond issue be larger than is necessary. We would, of course, be willing to discuss an alternative fee arrangement, if that is your preference. Stifel has not identified any additional potential or actual material conflicts that require disclosure. Legal and Disciplinary Event Disclosures Each firm that is registered as a municipal advisor with the U.S. Securities and Exchange Commission (SEC) is required to file Form MA with the SEC and update that form periodically and as events change. The firm is also required to file a Form MA -I for each of its employees who is engaged in municipal advisory activities. Stifel's most recent Forth MA and the Form MA -1 for each current Stifel municipal advisor employee may be found on the SEC's EDGAR website using the following hyperlink: hhi! //www sec.dov/cgi-binfbrowse-edgar?CIK=0000094403&owner—exclude&action=eetcoml)any&Find=Search. Item 9 of Form MA requires each municipal advisor firm to disclose any criminal, regulatory violations, or self-regulatory violations and certain civil litigation. Because we are a broker-dealer firm, Form MA permits us to cross-reference to our Form BD, which is available on the website of the Financial Industry Regulatory Authority (FINRA), and our Form ADV, which is available on the SEC website. For your convenience, you may access our Form BD by using the following hyperlink: htto'//brokercheck.finra.ore/Firm/Summary/793. You may access our Form ADV by using the following hyperlink: bMs://www.adviscrinfo.sec.gov/IAPD/IAPDSearch.aspx and entering Firm 793 in the search field. Item 6 of each Form MA -I requires comparable disclosure about a municipal advisor individual, as well as customer complaint, arbitration, investigation, termination, financial, and judgment/lien disclosure. When an individual has a disciplinary history, Form MA -1 permits us to cross-reference to that individual's Form U-4. The disciplinary history on an individual's Form U4 is accessible entering the individual's name in FINRA's "Broker -Check" service, using the following hyperlink: hap://brokercheck.finm.ore/. In May 2020, Stifel, Nicolaus & Company, Incorporated (the Firm) entered into a Letter of Acceptance, Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) whereby the Firm without admitting or denying any specific findings, consented to findings that, from January 2012 through December 2016, the Firm failed to establish, maintain 4 and enforce written supervisory procedures (WSPS) that were reasonably designed to achieve compliance with FINRA's suitability rule as it pertains to early rollovers of unit investment trusts (UITs). Asa result the Firm violated NASD Rule 3010, FINRA Rule 3110, and FINRA Rule 2010. Additionally, the Firm consented to a further violation of FINRA Rule 2010 in connection with the sending of "switch letters" to customers containing inaccurate information about the costs they incurred as a result of the early UIT rollovers. The Firm agreed to pay a fine of $1.75 million and restitution in the amount of $1,891,188.13, plus interest. The FINRA staff did not require any remedial undertakings by the Firm in the AWC. The Firm has implemented various enhancements to its supervision and compliance oversight of early rollovers of UITs which it believes addresses the alleged deficiencies identified by FINRA. Those enhancements include implementation of a switch alert notification for early rollovers, a risk-based approach of compliance oversight for early rollover activity and a periodic "look - back" by the compliance department of early rollover activity by selected financial advisors. None of the activities addressed in the AWC were municipal advisory services provided to our municipal entity or obligated person clients. We do not believe that any of the legal or disciplinary event disclosures described in our Form MA is material to our ability to serve as your municipal advisor. Evaluation of Recommendations/Suitability As provided in our engagement letter, we will assist you in evaluating recommendations, whether made by Stifel or, upon your written request, by third -parties, such as underwriters. We will provide you with our evaluation of the material risks, potential benefits, structure, and other characteristics of the transaction or product. We will discuss with you why we think a recommendation we make is suitable for you. In the case of recommendations made by an underwriter or other third -party that you request in writing that we review, we will discuss with you why we think the recommended transaction or product is or is not suitable for you. We will also inform you of any other reasonably feasible alternatives considered. In order for us to evaluate whether we think a recommendation is suitable for you, we are required to consider the following factors and we may need information from you about those factors, much as if you were opening a brokerage account: • financial situation and needs, • objectives, • tax status, • risk tolerance, • liquidity needs, • experience with municipal securities transactions or municipal financial products generally or of the type and complexity being recommended, • financial capacity to withstand changes in market conditions during the term of the municipal financial product or the period that municipal securities to be issued in the municipal securities transaction were reasonably expected to be outstanding, and • any other material information known by the municipal advisor about the client and the municipal securities transaction or municipal financial product, after reasonable inquiry. Additional Information We also wish to inform you that Stifel is registered as a municipal advisor with both the SEC and the MSRB. Information about the duties of a municipal advisor, as well as the procedures for filing a complaint, may be found on the MSRB's website by clicking on the following link: http://www msrb.org/—/media/Files/Resources/MSRB-MA-Clients-Brochure.ashx?la=en. The general website for the MSRB is www.msrb.ore. If you have any questions, please contact your municipal advisor.