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98-9882 Issue BondsDocument No. K 103 87102\Ord3 ORDINANCE NO. 98-9882 AN ORDINANCE AUTHORIZING THE ISSUANCE AND DELIVERY OF $6,010,000 PRINCIPAL AMOUNT OF GENERAL OBLIGATION WATER AND SEWAGE SYSTEM REFUNDING BONDS, SERIES 1998-B, OF THE CITY OF SALINA, KANSAS, FOR THE PURPOSE OF REFUNDING CERTAIN OUTSTANDING COMBINED WATER AND SEWAGE SYSTEM REVENUE BONDS OF THE CITY; PROVIDING FOR THE LEVY AND COLLECTION OF AN ANNUAL TAX FOR THE PURPOSE OF PAYING THE PRINCIPAL OF AND INTEREST ON THE BONDS AS THEY BECOME DUE; AND MAKING CERTAIN COVENANTS WITH RESPECT THERETO. WHEREAS, the City of Salina, Kansas (the "City") is a City of the first class, created, organized and existing under the laws of the State; and WHEREAS, the City has previously issued pursuant to K.S.A. 12-856 et seq. its (1) Combined Water and Sewage System Revenue Bonds, Series 1990-A (the "1990-A Bonds"), currently outstanding in the principal amount of $3,565,000 (2) Combined Water and Sewage System Revenue Bonds, Series 1990-B (the "1990-B Bonds"), currently outstanding in the principal amount of $2,210,000, and (3) Combined Water and Sewage System Improvement Revenue Bonds, Series 1994-B, currently outstanding in the principal amount of $1,140,000 (the "1994-B Bonds," the 1990-A Bonds, the 1990-B Bonds and the 1994-B Bonds being collectively referred to as the "Refunded Bonds"), and WHEREAS, pursuant to Charter Ordinance No. 28, the city has exempted itself from the provisions of K.S.A. 12-868 and provided substitute and additional provisions on the same subject, including provisions authorizing the issuance of the City's general obligation bonds to refund the City's revenue bonds previously issued under the K.S.A. 12-856 et seq., which include the Outstanding Bonds; and WHEREAS, the City desires to refund all of the Refunded Bonds, and the City is authorized pursuant to the provisions of Charter Ordinance No. 28 and K.S.A. 10-427 et seq. to issue the general obligation bonds herein authorized to refund the Refunded Bonds; and WHEREAS, all legal requirements pertaining to the refunding of the Refunded Bonds; and WHEREAS, the governing body. of the City hereby finds and determines it is necessary for the City to authorize the issuance and delivery of its general obligation bonds to refund the Refunded Bonds; NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALIVA, KANSAS, AS FOLLOWS: Section 1. Definitions of Words and Terms. "Act" means the Constitution and all applicable statutes of the State including but not limited to K.S.A. 10-101 et seq. and 10-427 et seq. and Charter Ordinance No. 28 of the City, all as amended and supplemented. "Bond and Interest Fund" means the Bond and Interest Fund of the City for its general bonds. "Bonds" means the General Obligation Water and Sewage System Refunding Bonds, Seri 1998-B authorized by this Ordinance in the aggregate principal amount of $6,010,000. "City" means the City of Salina, Kansas. "City Clerk" means the appointed and acting City Clerk or, in the City Clerk's absence, appointed and/or elected Deputy or Acting City Clerk of the City. "Code" means the Internal Revenue Code of 1986, as amended, and the applicable regu proposed or promulgated thereunder of the United States Department of the Treasury. "Mayor" means the elected and acting Mayor of the City or, in the Mayor's absence, appointed and/or elected Vice or Acting Mayor of the City. "Ordinance" means this Ordinance authorizing the issuance of the Bonds. "Refunded Bonds" means the combined water and sewage system revenue bonds referred to i the preamble of this Ordinance. "State" means the state of Kansas. "Treasurer" means the appointed and acting Treasurer of the City or, in the Treasurer's the appointed and/or elected Deputy or Acting Treasurer of the City. Section 2. Authorization of and Security for the Bonds. These Bonds shall be issued for purpose of providing funds to refunded the Refunded Bonds and to pay the costs of issuance of Bonds. The Bonds shall be general obligations of the City payable as to both principal and interest fro ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxab tangible property, real and personal, within the territorial limits of the City. The full faith, credit ar resources of the City are hereby irrevocably pledged for the prompt payment of the principal of ar interest on the Bonds as the same become due. Section 3. Terms, Details and Conditions of the Bonds. The Bonds shall be dated and be interest, shall mature and be payable at such times, shall be in such forms, shall be subject to redempti and payment prior to the maturity thereof, and shall be issued and delivered in the manner prescribed a subject to the provisions, covenants and agreements set forth in a resolution hereinafter adopted by t governing body of the City. Section 4. Levy and Collection of Annual Tax. The governing body of the City shall annuall; make provision for the payment of principal of, premium, if any, and interest on the Bonds as the sam become due by levying and collecting the necessary taxes upon all of the taxable tangible property withii the City in the manner provided by law. -2- The taxes referred to above shall be spread upon the tax rolls 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, and the proceeds derived from the taxes shall be deposited in the Bond and Interest Fund. If at any time the taxes are not collected in time to pay the principal of or interest on the Bonds when due, the Treasurer is hereby authorized and directed to pay the principal or interest out of the general funds of the City and to reimburse the general funds for money so expended when the taxes are collected. Section 5. Tax Covenants. The City covenants and agrees that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion of the interest on the Bonds from gross income for federal income tax purposes. The City covenants and agrees that it will use the proceeds of the Bonds as soon as practicable and with all reasonable dispatch for the purpose for which the Bonds are issued as previously set forth, and that it will not directly or indirectly use or permit the use of any proceeds of the Bonds or any other funds of the City, or take or omit to take any action that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148(a) of the Code. To that end, the City will comply with all requirements of Section 148 of the Code to the extent applicable to the Bonds. The City hereby designates the portion of the Bonds refunding the Series 1994-B Bonds as "qualified tax-exempt obligations" as defined in Section 265(b)(3) of the Code; the remaining balance of the Bonds is deemed designated under Section 265(b)(3)(D)(ii) of the Code. In addition, the City hereby represents that: (1) the aggregate face amount of all tax-exempt obligations (other than private activity bonds which are not "qualified 501(c)(3) bonds") which will be issued by the City (and all subordinate entities thereof) during calendar year 1998 is not reasonably expected to exceed $10,000,000; and (2) the City (including all subordinate entities thereof) will not issue an aggregate principal amount of obligations designated by the City to be "qualified tax-exempt obligations" during the calendar year in which the Bonds are issued, including the Bonds, in excess of $10,000,000, without first obtaining an opinion of bond counsel that the designation of the Bonds as "qualified tax-exempt obligations" will not be adversely affected. The City covenants and agrees that it will not use any portion of the proceeds of the Bonds, including any investment income earned on such proceeds, directly or indirectly, in a manner that would cause any Bond to be a "private activity bond" within the meaning of Section 141(a) of the Code. Section 6. Further Authority. The Mayor, City Clerk and other City officials are authorized and directed to execute such documents and take such actions as they may deem necessary or advisable in order to carry out the purposes of this Ordinance. Section 7. Governing Law. The Ordinance and the Bonds shall be governed 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 of the City and publication in the official City newspaper. -3- Elm PASSED by the governing body of the City on August 3, 1998. (SEAL) -4- Mayor 61