99-9923 Issue IRBGILMORE & BELL, P.C.
May 11, 1999
ORDINANCE NO. 99-9923
OF THE
CITY OF SALINA, KANSAS
AUTHORIZING THE ISSUANCE OF
NOT TO EXCEED
$9,000,000
INDUSTRIAL REVENUE BONDS
SERIES A, 1999
AND
SUBORDINATED TAXABLE INDUSTRIAL REVENUE BONDS
SERIES B, 1999
(A -PLUS GALVANIZING, INC.)
PCL\401885\ORDINANCE.2
CmwIiOAIMSdina
(Published in The Salina Journal, May ,�J , 1999)
ORDINANCE NO. 99-9923
AN ORDINANCE AUTHORIZING THE CITY OF SALINA, KANSAS
TO ISSUE ITS INDUSTRIAL REVENUE BONDS, SERIES A, 1999 AND
SERIES B, 1999 (A -PLUS GALVANIZING, INC.) IN THE AGGREGATE
PRINCIPAL AMOUNT OF NOT TO EXCEED $9,000,000 FOR THE
PURPOSES OF ACQUIRING, CONSTRUCTING AND EQUIPPING A
MANUFACTURING FACILITY; AUTHORIZING EXECUTION OF A TRUST
INDENTURE BY AND BETWEEN THE CITY AND INTRUST BANK, N.A.,
WICHITA, KANSAS, AS TRUSTEE; AUTHORIZING THE CITY TO LEASE
SUCH FACILITY TO A -PLUS GALVANIZING, INC. AND AUTHORIZING
EXECUTION OF A LEASE BETWEEN SAID CITY AND A -PLUS
GALVANIZING, INC.; APPROVING THE FORM OF A GUARANTY
AGREEMENT BY AND AMONG THE TENANT, PAUL K. MAI AND
INTRUST BANK, N.A., AS TRUSTEE; AND AUTHORIZING THE
EXECUTION OF A BOND PURCHASE AGREEMENT FOR THE BONDS BY
AND AMONG THE CITY, A -PLUS GALVANIZING, INC. AND RIEDL FIRST
SECURITIES COMPANY OF KANSAS, INC., AS PURCHASER OF THE
BONDS.
THE GOVERING BODY OF THE CITY OF SALINA, KANSAS HAS FOUND AND
DETERMINED:
A. The City of Salina, Kansas (the "Issuer") is authorized by the Kansas Economic
Development Revenue Bond Act, as amended, as codified in K.S.A. 12-1740 et seq. (the "Act"), to
acquire, construct, improve and equip certain facilities (as defined in the Act) for commercial,
industrial and manufacturing purposes, to enter into leases and lease -purchase agreements with any
person, firm or corporation for such facilities, and to issue revenue bonds for the purpose of paying the
costs of such facilities; and
B. The Issuer's governing body has heretofore by resolution determined that it is desirable
in order to promote, stimulate and develop the general economic welfare and prosperity of the Issuer
and the State of Kansas that the Issuer issue its Industrial Revenue Bonds, for the purpose of paying
the costs of acquiring, constructing and equipping a certain manufacturing facility (the "Project") in
an amount not to exceed $7,500,000. The governing body has further determined that since adoption
of its resolution of intent, the costs of the Project to be financed with bonds have increased, such that
it is now deemed desirable that the Issuer issue its Industrial Revenue Bonds, Series A, 1999 and Series
B, 1999 (A -Plus Galvanizing, Inc.) dated May 1, 1999 in the aggregate principal amount of not to
exceed $9,000,000 (jointly, the "Bonds") to pay the costs of the Project, a part of the costs of issuing
the Series 1999 Bonds, and to fund a debt service reserve, as more fully described in the Indenture and
in the Lease authorized in this ordinance for lease to A -Plus Galvanizing, Inc. (the "Tenant"); and
C. The Issuer's governing body finds that it is necessary and desirable in connection with
the issuance of the Bonds to execute and deliver the following documents (collectively, the "Bond
Documents"):
(i) a Trust Indenture to be dated as of the date of the Bonds (the "Indenture"), with INTRUST
Bank, N.A., Wichita, Kansas, as Trustee (the "Trustee"), prescribing the terms and conditions
of issuing and securing the Bonds;
(ii) a Lease to be dated as of the date of the Bonds (the "Lease"), with the Tenant, under which
the Issuer will acquire, construct and equip the Project and lease it to the Tenant in
consideration of Basic Rent and other payments as required by the Lease; and
(iii) a Bond Purchase Agreement (the "Bond Purchase Agreement") providing for the sale of
the Series A, 1999 Bonds by the Issuer to Riedl First Securities Company of Kansas, Inc. and
for the sale of the Series B, 1999 Bonds to the Tenant, and
(iv) an Agreement for Payment in Lieu of Taxes (the "Agreement for Payment in Lieu of
ConmliEpte U.
Taxes") with the Tenant, under which the Tenant will make certain payments in lieu of taxes
for each year after issuance of the Bonds that the Project is exempt from ad valorem taxation.
D. The Issuer's governing body has found that under the provisions of K.S.A. 79-201a
Second, the Project purchased or constructed with the proceeds of the Bonds is eligible for exemption
from ad valorem property taxes for up to 10 years, commencing in the calendar year following the
calendar year in which the Bonds are issued, if proper application is made. The Issuer's governing
body has further found that the Project should be exempt from ad valorem property taxes for a period
of 10 years, subject to a payment in lieu of taxes for each year of the exemption, as more particularly
described in the Agreement for Payment in Lieu of Taxes. Prior to making this determination, the
governing body of the Issuer has conducted the public hearing and reviewed the analysis of costs and
benefits of such exemption required by K.S.A. Supp. 12-1749d.
NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE
CITY OF SALINA, KANSAS:
Section 1. Definition of Terms. All terms and phrases not otherwise defined in this ordinance
will have the meanings set forth in the Indenture and the Lease.
Section 2. Authority to Cause the Project to Be Purchased and Constructed. The Issuer
is authorized to cause the Project to be acquired, constructed and equipped in the manner described in
the Indenture and the Lease.
Section 3. Authorization of and Security for the Bonds. The Issuer is authorized and
directed to issue the Bonds, to be designated "City of Salina, Kansas Industrial Revenue Bonds, Series
A, 1999 and Subordinated Taxable Industrial Revenue Bonds, Series B, 1999 (A -Plus Galvanizing)"
in the aggregate principal amount of not to exceed $9,000,000, for the purpose of providing funds to
pay the costs of acquiring, constructing and equipping the Project. The Bonds will be in such principal
amounts per series, will be dated and bear interest, will mature and be payable at such times, will be
in such forms, will be subject to redemption and payment prior to maturity, and will be issued
according to the provisions, covenants and agreements in the Indenture. The Bonds will be special
limited obligations of the Issuer payable solely from the Trust Estate under the Indenture, including
revenues from the Lease of the Project. The Bonds will not be general obligations of the Issuer, nor
constitute a pledge of the faith and credit of the Issuer, and will not be payable in any manner by
taxation.
Section 4. Authorization of Indenture. The Issuer is authorized to enter into the Indenture
with the Trustee in the form approved in this ordinance. The Issuer will pledge the Trust Estate
described in the Indenture to the Trustee for the benefit of the owners of the Bonds on the terms and
conditions in the Indenture.
Section 5. Lease of the Project. The Issuer will acquire, construct and equip the Project and
lease it to the Tenant according to the provisions of the Lease in the form approved in this ordinance.
Section 6. Approval of the Guaranty Agreement. The form of the Guaranty Agreement to
be dated as of the date of the Bonds among the Tenant, Paul K. Mai, and the Trustee, for the benefit
of the owners of the Bonds is approved.
Section 7. Authorization of Bond Purchase Agreement. The Issuer is authorized to sell the
Series A, 1999 Bonds to Riedl First Securities Company of Kansas, Inc., Wichita, Kansas, and the
Series B, 1999 Bonds to the Tenant according to the terms and provisions of the Bond Purchase
Agreement, in the form approved in this ordinance, among the Issuer, the Tenant and Riedl First
Securities Company of Kansas, Inc.
Section 8. Execution of Bonds and Bond Documents. The Mayor of the Issuer is authorized
and directed to execute the Bonds and deliver them to the Trustee for authentication on behalf of the
Issuer in the manner provided by the Act and in the Indenture. The Mayor or member of the Issuer's
governing body authorized by law to exercise the powers and duties of the Mayor in the Mayor's
absence is further authorized and directed to execute and deliver the Bond Documents on behalf of the
Issuer in substantially the forms presented for review prior to final passage of this ordinance, with such
CaMdkUdFSal'na
may approve, which approval shall be evidenced by his or her signature. The authorized signatory may
all sign and deliver other documents, or certificates as may be necessary or desirable to carry out the
purposes and intent of this ordinance and the Bond Documents. The City Clerk or the Deputy City
Clerk of the Issuer is hereby authorized and directed to attest the execution of the Bonds, the Bond
Documents and such other documents, certificates and instruments as may be necessary or desirable
to carry out the intent of this ordinance under the Issuer's corporate seal.
Section 9. Tax Exemption; Payment in Lieu of Taxes. The Project will be exempt from ad
valorem property taxes for 10 years, commencing in the calendar year 2000. The Tenant will prepare
the application for exemption and submit it to the Issuer for its review. After its review, the Issuer will
submit the application for exemption to the State Board of Tax Appeals. The Issuer is authorized to
enter into the Agreement for Payment in Lieu of Taxes in substantially the form presented for review
prior to final passage of this ordinance.
Section 10. Pledge of the Project and Net Lease Rentals. The Issuer hereby pledges the
Project and the net rentals generated under the Lease to the payment of the Bonds in accordance with
K.S.A. 12-1744. The lien created by the pledge will be discharged when all of the Series A 1999
Bonds are paid or deemed to have been paid under the Indenture.
Section 11. Election Under Section 144(a)(4) of the Internal Revenue Code. The Issuer
elects that Section 144(a)(4) of the Internal Revenue Code of 1986, as amended, will apply to the
Bonds, and the Mayor or City Clerk is hereby authorized and directed to file evidence of said election
with any appropriate officer of the United States, including the Secretary of the Treasury or his or her
delegate, and to take such other action as may be necessary to make effective such election.
Section 12. Approval of Preliminary Official Statement and Official Statement. The
Preliminary Official Statement for the Series A, 1999 Bonds, as submitted for review, and the Official
Statement for the Series A, 1999 Bonds, in substantially the form of the Preliminary Official
Statement, are approved. Public distribution of the Preliminary Official Statement and Official
Statement by the Purchaser are approved. The Issuer has not participated in the preparation of the
Preliminary Official Statement or the Official Statement and has not verified the accuracy of the
information in them (except as respects the Issuer). Accordingly, approval does not constitute a
representation by the Issuer as to the completeness or accuracy of the information contained in them.
Section 13. Further Authority. The officials, officers, agents and employees of the Issuer are
authorized and directed to take whatever action and execute whatever other documents or certificates
as may be necessary or desirable to carry out the provisions of this ordinance and to carry out and
perform the duties of the Issuer with respect to the Bonds and the Bond Documents.
Section 14. Effective Date. This ordinance shall take effect after its final passage by the
governing body of the Issuer, signature by the Mayor and publication once in the Issuer's official
newspaper.
Introduced: April 19, 1999
Passed: May 17, 1999
[SEAL]
Alan Jilka,ice-Mayor
ATTEST:
Jdv D.Lo , CMC, City rk