HomeMy WebLinkAbout2016-017 Master Water and Sewer System Bond Resolution CITY OF OCOEE, FLORIDA
MASTER WATER AND SEWER SYSTEM BOND RESOLUTION
TABLE OF CONTENTS
Page
ARTICLE I AUTHORITY, DEFINITIONS AND FINDINGS 2
Section 1.01. Authority for this Resolution 2
Section 1.02. Definitions. 2
Section 1.03. Findings. 16
ARTICLE II AUTHORIZATION AND DESCRIPTION OF THE SERIES 2016 BONDS;
EXCHANGE AND TRANSFER 17
Section 2.01 Authorization of the Refunding of the Refunded Obligations and
2016 Project;Authorization of Series 2016 Bonds. 17
Section 2.02 Authorization of Bonds. 17
Section 2.03 Description of the Series 2016 Bonds. 18
Section 2.04 Execution of Bonds 19
Section 2.05 Authentication of Bonds. 19
Section 2.06 Exchange of Bonds. 20
Section 2.07 Negotiability, Registration and Transfer of Bonds. 20
Section 2.08 Ownership of Bonds. 20
Section 2.09 Bonds Mutilated, Destroyed, Stolen or Lost. 21
ARTICLE III FUNDS AND ACCOUNTS 28
Section 3.01 Creation of Funds. 28
ARTICLE IV APPLICATION OF BOND PROCEEDS;SPECIAL OBLIGATIONS 29
Section 4.01 Application of Bond Proceeds. 29
Section 4.02 Disbursements from Project Fund. 30
Section 4.03 Special Obligations of City. 31
ARTICLE V COVENANTS OF THE CITY;DEFAULTS AND REMEDIES 31
Section 5.01 Covenants of the City 31
Section 5.02 Defaults;Events of Default and Remedies 45
ARTICLE VI MISCELLANEOUS 48
Section 6.01 Amending and Supplementing of Resolution without Consent of
Holders of Bonds. 48
Section 6.02 Amendment of Resolution with Consent of Holders of Bonds. 49
Section 6.03 Defeasance. 50
Section 6.04 Governmental Reorganization. 51
Section 6.05 Additional Utility Functions 51
Section 6.06 [Reserved.] 52
Section 6.07 Qualified Agreements 52
Section 6.08 Payments to Credit Facility;Rights of Credit Facility Issuers 52
Section 6.09 Capital Appreciation Bonds 52
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Section 6.10 Tax Covenants 53
Section 6.11 Bond Anticipation Notes Authorized for Interim Financing. 54
Section 6.12 Additional Rights to Insurers. 54
Section 6.13 Severability. 54
Section 6.14 Sale of Bonds. 54
Section 6.15 General Authority. 54
Section 6.16 No Third Party Beneficiaries 55
Section 6.17 No Personal Liability. 55
Section 6.18 Repeal of Inconsistent Instruments 55
Section 6.19 Effective Date. 56
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RESOLUTION NO. 2016-017
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
OCOEE, FLORIDA AUTHORIZING THE ISSUANCE OF NOT TO
EXCEED $26,000,000 WATER AND SEWER SYSTEM REVENUE
AND REFUNDING REVENUE BONDS, SERIES 2016 (THE
"BONDS"); AUTHORIZING AND PROVIDING FOR THE
PROCEEDS OF THE BONDS TO BE USED FOR THE
REFUNDING OF CERTAIN OBLIGATIONS OF THE CITY AND
FOR THE CONSTRUCTION AND ACQUISITION OF CERTAIN
IMPROVEMENTS TO THE CITY'S COMBINED WATER AND
SEWER SYSTEM AND TO PAY COSTS RELATED TO THE
ISSUANCE OF THE BONDS; PLEDGING CERTAIN NET
REVENUES OF THE SYSTEM; PROVIDING FOR THE PLEDGE
OF CERTAIN WATER AND SEWER CAPITAL FACILITIES
CHARGES FOR THE PAYMENT OF SUCH BONDS;PROVIDING
FOR THE RIGHTS, SECURITY AND REMEDIES OF THE
HOLDERS OF SUCH BONDS; MAKING OTHER COVENANTS
AND AGREEMENTS IN CONNECTION THEREWITH; AND
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City Commission (the "Commission") of the City of Ocoee, Florida (the
"City") previously adopted Resolution 93-02 on February 2, 1993, as amended and
supplemented from time to time, (collectively, the "Original Resolution"); and
WHEREAS, pursuant to the Original Resolution, the City has previously issued its
Water and Sewer System Refunding Revenue Note, Series 2012 (the "Series 2012 Note") and its
Water and Sewer System Refunding Revenue Note, Series 2013 (the "Series 2013 Note")
(collectively, the "Refunded Obligations"); and
WHEREAS, the Series 2012 Note and the Series 2013 Note, are the only obligations
currently outstanding under the Original Resolution; and
WHEREAS, the Commission now desires to replace the Original Resolution in its
entirety by adopting this resolution (the "Resolution"), in order to provide for the issuance of
Bonds, initially to refund the Series 2012 Note and the Series 2013 Note and to provide proceeds
for a Project (as herein defined) through the issuance of its Water and Sewer System Revenue
and Refunding Revenue Bonds, Series 2016 (the "Series 2016 Bonds");and
WHEREAS, the Commission also desires to authorize and finds it necessary, desirable
and in the best interest of the City and the residents thereof that the initial Project be acquired,
constructed and erected (the "2016 Project") and that the Refunded Obligations be refunded
with the proceeds of the Series 2016 Bonds.
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BE IT RESOLVED BY THE COMMISSION OF THE CITY OF OCOEE, FLORIDA THAT:
ARTICLE I
AUTHORITY, DEFINITIONS AND FINDINGS
Section 1.01. Authority for this Resolution. This Resolution is adopted pursuant to
the provisions of the Constitution of the State of Florida, the City Charter of the City, Chapter
166, Part II, Florida Statutes, and other applicable provisions of law(collectively, the "Act").
Section 1.02. Definitions. Unless the context otherwise requires, capitalized terms
used in this Resolution shall have the meanings specified in this Section. Words importing
singular number shall include the plural number in each case and vice versa, and words
importing persons shall include firms and corporations.
"Accounting Principles" shall mean generally accepted accounting principles including
those applicable to governmentally owned and operated utility systems such as the Water and
Sewer System.
"Accreted Value" shall mean, as of any date of computation with respect to any Capital
Appreciation Bond, an amount equal to the principal amount of such Capital Appreciation
Bond (the principal amount at its initial offering) plus the interest accrued on such Capital
Appreciation Bond from the date of delivery to the original purchasers thereof to the Interest
Date next preceding the date of computation or the date of computation if an Interest Date, such
interest to accrue at a rate not exceeding the legal rate, compounded semiannually, plus, with
respect to matters related to the payment upon redemption of the Capital Appreciation Bonds,
if such date of computation shall not be an Interest Date, a portion of the difference between the
Accreted Value as of the immediately preceding Interest Date and the Accreted Value as of the
immediately succeeding Interest Date, calculated based on the assumption that Accreted Value
accrues during any semi-annual period in equal daily amounts on the basis of a 360-day year.
"Acquired Obligations" shall mean cash, direct non-callable obligations of the United
States of America and securities fully and unconditionally guaranteed as to the timely payment
of principal and interest by the United States of America, to which direct obligation or
guarantee the full faith and credit of the United States of America has been pledged, Refcorp
interest strips, CATS, TIGRS, STRPS, defeased municipal bonds rated AAA by S&P Global
Markets or Aaa by Moody's Investment Services (or any combination thereof) or direct
obligations or fully guaranteed certificates of beneficial ownership of the U.S. Export-Import
Bank, certificates of beneficial ownership of the Farmers Home Administration, obligations of
the Federal Financing Bank, participation certificates of the General Services Administration,
Guaranteed Title XI financings of the U.S. Maritime Administration and project notes of the U.S.
Department of Housing and Urban Development. With respect to any Series of Bonds, the
definition of Acquired Obligations set forth above may be further limited as set forth in a
Supplemental Resolution of the City adopted prior to the issuance of such Bonds.
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"Additional Parity Obligations" shall mean additional obligations issued or incurred in
compliance with the terms, conditions and limitations contained herein and which (i) shall have
a lien on the Pledged Revenues equal to that of the Outstanding Bonds and any Parity Contract
Obligations, (ii) shall be payable from the Pledged Revenues on a parity with the Outstanding
Bonds and any Parity Contract Obligations, and (iii) shall rank equally in all other respects with
the Outstanding Bonds and any Parity Contract Obligations.
"Administrative Expenses" means the expenses of the various departments of the City
properly allocable to the System under a reasonable allocation methodology determined by the
City.
"Amortization Installment" shall mean an amount designated as such by Supplemental
Resolution of the City and established with respect to any Term Bonds.
"Average Annual Bond Service Requirement" shall mean, as of each date on which a
Series of Bonds is issued, the total amount of Bond Service Requirement which is to become due
on all Bonds deemed to be Outstanding immediately after the issuance of such Series of Bonds
divided by the total number of years for which Bonds are deemed to be Outstanding, except
that with respect to any Bonds for which Amortization Installments have been established, the
amount of principal coming due on the final maturity date with respect to such Bonds shall be
reduced by the aggregate principal amount of such Bonds that are to be redeemed from
Amortization Installments to be made in prior Bond Years.
"Balloon Indebtedness" shall mean debt 25% or more of the original principal amount of
which matures during any one Fiscal Year.
"Bond Anticipation Notes" shall mean notes described in Section 6.11 hereof of the City
issued in anticipation of any Series of Bonds and shall be secured by, amongst other things, a
first lien on the proceeds of the Bonds for which such Bond Anticipation Notes were issued.
"Bond Counsel" shall mean Bryant Miller Olive P.A., or any other attorney at law or firm
of attorneys of nationally recognized standing in matters pertaining to the exclusion from gross
income for federal income tax purposes of interest on obligations issued by states and political
subdivisions, and duly admitted to practice law before the highest court of any state of the
United States of America, approved by the City.
"Bond Holder "or "Holder" or any similar term shall mean any Persons who shall be the
registered owner of any outstanding Bonds.
"Bond Insurance Policy" shall mean a municipal bond new issue insurance policy or
policies issued by an Insurer guaranteeing the scheduled payment of principal of and interest
on any portion of a Series of Bonds when due as determined by Supplemental Resolution, if
any. A Bond Insurance Policy is a Credit Facility.
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"Bond Service Fund" shall mean the Bond Service Fund created and established
pursuant to Section 3.01 of this Resolution.
"Bond Service Requirement" shall mean, for any Bond Year, at any time, the amount
required to be deposited in such Bond Year into the Bond Service Fund, as provided herein
including any Reimbursement Obligations (any interest shall not include interest to the extent it
is to be paid from a direct subsidy payment expected to be received from the United States
Treasury relating to Build America Bonds, or any other similar interest subsidy or payments
made by the Federal government). In calculating such amount, the City shall subtract
therefrom any amounts to be transferred from the Project Fund for the purpose of paying
interest on the Bonds. With respect to Variable Rate Bonds which are not subject to a Qualified
Agreement, if any, the interest rate used to calculate the Bond Service Requirement shall be the
higher of (i) the actual rate on the date of calculation, or if the indebtedness is not yet
outstanding, the initial rate (if established and binding), (ii) if the indebtedness has been
outstanding for at least twelve months, the average rate over the twelve months immediately
preceding the date of calculation, and (iii) if the indebtedness has been outstanding for twelve
months or less, (1) if interest on the indebtedness is excludable from gross income under the
applicable provisions of the Internal Revenue Code, the most recently published Bond Buyer 25
Bond Revenue Index (or comparable index if no longer published), or (2) if interest is not so
excludable, the interest rate on direct U.S. Treasury Obligations with comparable maturities
plus fifty (50) basis points; provided, however, that for purposes of any rate covenant
measuring actual debt service coverage during a test period, Variable Rate Bonds which are not
subject to a Qualified Agreement shall be deemed to bear interest at the actual rate per annum
applicable during the test period. The Bond Service Requirement on debt that constitutes
Balloon Indebtedness, whether bearing interest at a fixed interest rate or, Balloon Indebtedness
that constitutes Variable Rate Bonds, shall be determined assuming it is amortized over 20
years on an approximately level annual debt service basis. If Bonds are Option Bonds, the date
or dates of tender shall be disregarded, unless actually tendered and not remarketed, and the
stated maturity dates thereof shall be used for purposes of this calculation. If the City has
entered into a Qualified Agreement with respect to all or a portion of certain Variable Rate
Bonds Outstanding hereunder or to be issued hereunder, the interest coming due on such
Variable Rate Bonds or portion thereof for purposes of this definition shall be deemed to be
based upon the synthetic fixed interest rate under the Qualified Agreement, without giving any
regard to fees and expenses incurred in connection with the purchase of a liquidity facility. If
the City has entered into a Qualified Agreement with respect to certain Bonds Outstanding
hereunder or to be issued hereunder which have a fixed rate of interest, the interest coming due
on such Bonds for purposes of this definition shall be deemed to be based upon the
assumptions described above for Variable Rate Bonds, without giving any regard to fees and
expenses incurred in connection with the purchase of a liquidity facility.
"Bond Year" shall mean the period commencing on October 2 of the preceding year and
ending twelve months later on October 1.
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"Bonds" shall mean (i) the Series 2016 Bonds herein authorized to be issued, and (ii) any
Additional Parity Obligations issued hereafter in accordance with the provisions hereof.
"Build America Bonds" shall mean any taxable bonds issued by the City pursuant to the
Code for which either (1) the City receives direct subsidy payments in an amount equal to a
percentage of the interest paid on such taxable bond, or (2) the holder of such taxable bond
receives a tax credit in an amount equal to a percentage of the interest paid on such taxable
bond.
"Capital Appreciation Bonds" shall mean the aggregate principal amount of the Bonds
that bear interest payable solely at maturity or upon redemption prior to maturity in the
amounts determined by reference to the Accreted Value, all as shall be determined by
Supplemental Resolution of the City. In the case of Capital Appreciation Bonds that are
convertible to Bonds with interest payable prior to maturity or redemption of such Bonds, such
Bonds shall be considered Capital Appreciation Bonds only during the period of time prior to
such conversion.
"Capital Appreciation Income Bonds" shall mean those Bonds initially issued as Capital
Appreciation Bonds and which become Serial Bonds when the original issue amount and the
Accreted Value equals $5,000 principal amount or an integral multiple thereof as determined by
Supplemental Resolution of the City.
"City"or"Issuer" shall mean the City of Ocoee, Florida.
"City Attorney" shall mean the City Attorney of the City, or any assistant or deputy City
Attorney of the City.
"City Engineer" shall mean the City Engineer of the Issuer.
"Clerk" shall mean the City Clerk or any authorized Deputy or Acting City Clerk of the
City, or such other person as may be duly authorized by the City to act on his or her behalf.
"Consulting Engineers" shall mean one or more independent, qualified and recognized
consulting engineers or firm of consulting engineers having favorable repute, skill and
experience with respect to the planning and operation of the System who shall be retained from
time to time by the City.
"Cost of Operation and Maintenance" shall mean the current expenses paid for the
operation, maintenance and repair of the System based on Accounting Principles and include,
without limiting the generality of the foregoing, (i)insurance premiums, (ii) charges for the
accumulation of appropriate reserves not annually recurrent but which are such as may
reasonably be expected to be incurred in accordance with Accounting Principles, and (iii) the
cost of product and services purchased by the City for resale to customers of the System in lieu
of the production of such product and services by the City directly and, (iv) Administrative
Expenses. "Cost Operation and Maintenance" shall not include (i) any allowance for
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depreciation, amortization or other similar non-cash expenses, except to the extent expressly
herein provided, (ii) any payments in lieu of taxes or (iii) expenses paid from the proceeds of
Bonds. In determining Cost of Operations and Maintenance, there shall not be taken into
account: (a) any gain or loss resulting from either the extinguishment or refinancing of any
Series of Bonds or other long-term indebtedness; (b) loss from the sale, exchange or other
disposition of capital assets not made in the ordinary course of business; (c) any capital
expenditures for renewal, replacement, expansion or acquisition of capital assets (including any
deposits or reserves therefor) and (d)payments in lieu of taxes.
"Credit Facility" or "Credit Facilities" shall mean either individually or collectively, as
appropriate, any Bond Insurance Policy, surety bond, letter of credit, line of credit, guaranty or
other instrument or instruments that would enhance the credit of the Bonds.
"Credit Facility Issuer" or "Credit Facility Issuers" shall mean the provider or providers
of a Credit Facility or Credit Facilities. An Insurer is a Credit Facility Issuer.
"Expansion Percentage," one to be calculated with respect to the Sewer System and one
to be calculated with respect to the Water System, shall mean that number, expressed as a
percentage, which represents that portion of the total cost of any Project or Projects financed
from the proceeds of Bonds which is attributable to any improvements, extensions and
additions to the Sewer System and/or the Water System, respectively, together with all lands or
interest therein, including plants, buildings, machinery, franchises, pipes, mains, fixtures,
equipment and all property real or personal, tangible or intangible, heretofore or hereafter
constructed or acquired in order to meet the increased demand upon the Sewer System and/or
the Water System, respectively, whether actual or anticipated, created by new users connecting
to the Sewer System and/or the Water System, respectively, as shall be calculated or re-
calculated by the Qualified Independent Consultant and set forth in a certificate delivered each
time a Series of Bonds are issued hereunder. Upon completion of a Project, the Qualified
Independent Consultant shall adjust the respective Expansion Percentages to take into
consideration proceeds expected to be utilized for Project purposes which in fact were not
utilized for Project purposes.
"Federal Securities" shall mean direct obligations of the United States of America and
obligations the principal of and interest on which are unconditionally guaranteed by the United
States of America, none of which permit redemption prior to maturity at the option of the
obligor. Federal Securities shall also include direct obligations of the Treasury which have been
stripped by the Treasury itself, CATS, TIGRS and similar securities and the interest component
of Resolution Funding Corp. (REFCORP) strips which have been stripped by request to the
Federal Reserve Bank of New York in book entry form. With respect to any Series of Bonds, the
definition of Federal Securities set forth above may be further limited as set forth in a
Supplemental Resolution of the City adopted prior to the issuance of such Bonds.
"Finance Director" shall mean, for the purposes hereunder the Finance Director of the
City, or any other officer of the City subsequently designated pursuant to law.
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"Financial Advisor" shall mean FirstSouthwest, a Division of Hilltop Securities Inc., or
any other financial advisor appointed from time to time by the City.
"Fiscal Year" shall mean the period commencing on October 1 of each year and ending
on the next succeeding September 30 or such other annual period as may be prescribed by law
from time to time for the City.
"Fitch"shall mean Fitch Ratings, Inc., and any assigns or successors thereto.
"Gross Revenues" or "Revenues" shall mean all fees, rentals or other charges or other income
received by the City in connection with the System, or accruing to the City or to any other board or
agency of the City in control of the management and operation of the System, all as calculated in
accordance with Accounting Principles. Gross Revenues include, without limitation, (a)unencumbered,
non-ad valorem special assessments relating to the System not pledged for the repayment of, or as
security for, any indebtedness of the City, whether currently outstanding or hereafter issued, other than
the Bonds and which are legally available to be used as contemplated hereunder, and (b)Investment
Earnings on moneys in all funds and accounts herein created or authorized, except the Project Fund and
the Rebate Fund, to the extent that Investment Earnings are required to be deposited into the Revenue
Fund herein created. Moneys deposited into the Rate Stabilization Fund shall be excluded from Gross
Revenues for the purposes of calculating Gross Revenues hereunder for the Fiscal Year in which such
transfer into the Rate Stabilization Fund occurs. Moneys on deposit in the Rate Stabilization Fund may
be withdrawn at any time and redeposited into the Revenue Fund, and such moneys shall be included in
Gross Revenues for the purpose of calculating Gross Revenues for the Fiscal Year in which such
redeposit into the Revenue Fund occurs. Gross Revenues do not include (i) Sewer System Capital
Facilities Charges, Water System Capital Facilities Charges or Investment Earnings thereon, (ii) any
direct subsidy payments received from the United States Treasury relating to Build America Bonds or any
other similar interest subsidy or payments made by the Federal government, (iii) non-ad valorem special
assessments which are pledged for the repayment of, or as security for, any indebtedness of the City,
whether currently outstanding or hereafter issued, other than the Bonds, and (iv) any "utility project
charge" or the like as contemplated in Section 6.06 hereof. For purposes of calculating compliance with
the rate covenant described in Section 5.01(E) hereof or the Additional Parity Obligations test described
in Section 5.01(Q) hereof, "Gross Revenues" shall not include such income or earnings which are
deposited into the Rate Stabilization Fund.
"Insurer" shall mean, with respect to any Series of Bonds, such Person, as specifically
designated by Supplemental Resolution, as shall be insuring or guaranteeing the scheduled
payment of principal of and interest on such Series of Bonds, when due. An Insurer is a Credit
Facility Issuer.
"Interest Account" shall mean the special account of the same name created within the
Bond Service Fund.
"Interest Date" or "interest payment date" shall be such date or dates for the payment of
interest on a Series of Bonds as shall be provided in Section 2.02 hereof.
"Investment Earnings" means the interest received on, or the realized gain or loss from the
purchase and sale of, the Permitted Investments held in the funds and accounts established hereunder,
except to the extent such amounts are required to be rebated to the United States of America.
7
"Maximum Bond Service Requirement" shall mean, as of any particular date of
calculation, the greatest amount of aggregate Bond Service Requirement for the then current or
any future Bond Year, except that with respect to any Bonds for which Amortization
Installments have been established, the amount of principal coming due on the final maturity
date with respect to such Bonds shall be reduced by the aggregate principal amount of such
Bonds that are to be redeemed from Amortization Installments which were to be made in prior
Bond Years.
"Mayor" means the Mayor of the City, or such other person as may be duly authorized
by the City to act on his or her behalf.
"Moody's" shall mean Moody's Investors Services, Inc. and any assigns or successors
thereto.
Net Revenues" of the System shall mean the Gross Revenues or Revenues, after
deduction of the Cost of Operation and Maintenance.
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"Option Bonds" shall mean Bonds subject to tender for payment prior to their maturity
at the option of the Holder thereof.
"Outstanding" or "Bonds Outstanding" shall mean all Bonds which have been issued
pursuant to this Resolution, except:
(i) Bonds canceled after purchase in the open market or because of payment
at or redemption prior to maturity;
(ii) Bonds for the payment or redemption of which cash funds or Acquired
Obligations or any combination thereof shall have been theretofore irrevocably set aside
in a special account with an escrow agent (whether upon or prior to the maturity or
redemption date of any such Bonds) in an amount which, together with earnings on
such Acquired Obligations, will be sufficient to pay the principal of, interest on and any
redemption premium with respect to such Bonds at maturity or upon their earlier
redemption; provided that, if such Bonds are to be redeemed before the maturity
thereof, notice of such redemption shall have been given according to the requirements
of this Resolution or irrevocable instructions directing the timely publication of such
notice and directing the payment of the principal of and interest on all such Bonds at
such redemption dates shall have been given; and
(iii) Bonds which are deemed paid pursuant to this Resolution or in lieu of
which other Bonds have been issued under Sections 2.07 and 2.09 hereof.
"Parity Contract Obligation" shall mean the net payment obligations of the City arising
under a Qualified Agreement, which are calculated on the basis of interest on a notional amount
which may correspond with the principal amount of certain Bonds issued hereunder, or a
particular series or maturity thereof, based upon a fixed or a variable rate index or formula,
8
taking into account any like payment obligations of the Qualified Agreement Provider to the
City calculated in the same manner. Parity Contract Obligations include only regularly
scheduled payments and/or receipts under a Qualified Agreement determined by reference to
interest on a notional amount and shall not include any other payments and/or receipts under
such Agreement (for example any termination fee, indemnification obligations or other fees
payable to the Qualified Agreement Provider).
"Parity Contract Obligation Account" shall mean the special account of the same name
created within the Bond Service Fund.
"Paying Agent" shall mean any paying agent for Bonds appointed by or pursuant to a
Supplemental Resolution and its successors or assigns, and any other Person which may at any
time be substituted in its place pursuant to a Supplemental Resolution. Once appointed, no
resignation or removal of the Paying Agent shall become effective until a successor has been
appointed and has accepted the duties of Paying Agent. Each of the Insurers of Bonds, if any,
shall be furnished with written notice of the resignation or removal of the Paying Agent and the
appointment of any successor thereto.
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"Permitted Investments" shall mean any of the following if and to the extent the same
are legal for investment under the laws of the State and the written investment policy of the
City: s,
(1) Cash;
(2) Obligations of, or obligations guaranteed as to principal and interest by, the
United States of America or any agency or instrumentality thereof, when such obligations are
backed by the full faith and credit of the United States of America, including: ,
U.S. Treasury obligations (including State and Local Government Series)
• All direct or fully guaranteed obligations
• Farmers Home Administration obligations
• General Services Administration obligations
• Guaranteed Title XI financing
• Government National Mortgage Association(GNMA) obligations;
(3) Obligations of any of the following federal agencies which obligations represent
the full faith and credit of the United States of America, including:
• Export-Import Bank
• Rural Economic Community Development Administration
9
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1
• U.S. Maritime Administration
• Small Business Administration
• U.S.Department of Housing&Urban Development(PHAs)
• Federal Housing Administration
• Federal Financing Bank;
(4) Direct obligations of any of the following federal agencies which obligations are
not fully guaranteed by the full faith and credit of the United States of America:
• Senior debt obligations issued by the Federal National Mortgage Association t
(FNMA) or Federal Home Loan Mortgage Corporation(FHLMC)
• Obligations of this Resolution Funding Corporation(REFCORP)
1
• Senior debt obligations of the Federal Home Loan Bank System
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• Senior debt obligations of other government sponsored agencies a,'
approved by the Insurer; K
(5) U.S. dollar denominated deposit accounts, federal funds and bankers' 4
acceptances with domestic commercial banks which have a rating on their short term t
certificates of deposit on the date of purchase of P-1 by Moody's and A-1 or A-i+ by S&P
and maturing not more than 360 calendar days after the date of purchase. (Ratings on holding
companies are not considered as the rating on the bank);
(6) Commercial paper which is rated at the time of purchase in the single highest
classification, "P-1" by Moody's and "A-1+" by S&P and which matures not more than 270
calendar days after the date of purchase;
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(7) Investments in a money market fund rated "AAAm" or "AAAm-g" or better by E.
S&P; !?
(8) Pre-refunded Municipal Obligations defined as follows: any bonds or other 1
obligations of any state of the United States of America or of any agency, instrumentality or
local government unit of any such state which are not callable at the option of the obligor prior 1
to maturity or as to which irrevocable instructions have been given by the obligor to call on the
date specified in the notice; and
t
(A) which are rated, based on an irrevocable escrow account or fund (the "escrow"),
in the highest rating category of Moody's or S&P or any successors thereto; or
i
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(B) (i) which are fully secured as to principal and interest and redemption premium,
if any,by an escrow consisting only of cash or obligations described in paragraph
A(2) above, which escrow may be applied only to the payment of such principal
of and interest and redemption premium, if any, on such bonds or other
obligations on the maturity date or dates thereof or the specified redemption
date or dates pursuant to such irrevocable instructions, as appropriate, and (ii)
which escrow is sufficient, as verified by a nationally recognized independent
certified public accountant, to pay principal of and interest and redemption
premium, if any, on the bonds or other obligations described in this paragraph
on the maturity date or dates specified in the irrevocable instructions referred to
above, as appropriate;
(9) Municipal Obligations rated "Aaa/AAA" or general obligations of States with a
rating of"A2/A"or higher by both Moody's and S&P;
(10) the Local Government Surplus Funds Trust Fund created and established
pursuant to Chapter 218,Part IV, Florida Statutes, as amended;
(11) Investment agreements approved in writing by the Insurer, if any, and if no
Insurer approved by the City (supported by appropriate opinions of counsel); and
(12) Other forms of lawful investments (including repurchase agreements) approved
by the City.
"Person" shall mean an individual, a corporation, a partnership, an association, a joint
stock company, a trust, any unincorporated organization or governmental entity.
"Pledged Revenues" shall mean the Net Revenues of the System and until applied in
accordance with this Resolution, the moneys on deposit in the various funds and accounts
created pursuant to this Resolution, except (A) as for the Rebate Fund, and (B) to the extent
moneys on deposit in an account of the Reserve Fund or the Project Fund shall be pledged
solely for the payment of the Series of Bonds for which it was established in accordance with the
provisions hereof. Pledged Revenues shall also include the Sewer System Capital Facilities
Charges and/or the Water System Capital Facilities Charges to the extent either or both are
pledged to secure a Series of Bonds, based upon the calculation of the applicable Expansion
Percentage,by the Qualified Independent Consultant.
"Principal Account" shall mean the special account of the same name created within the
Bond Service Fund.
"Project" or "Projects" shall mean any actual, proposed or potential acquisition, addition,
extension, supplement, or replacement of the System or joint ownership of similar properties or
any interest therein or any right to use the capacity from any facilities or services thereof, or any
other lawful purpose related to the System, all as determined by the City and in accordance
with plans and specifications on file or to be filed with the City.
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"Project Costs"shall mean all costs authorized to be paid from the Project Fund pursuant
to Section 4.02 hereof to the extent permitted under the laws of the State. It is intended that this
definition be broadly construed to encompass all costs, expenses and liabilities of the City
related to the System which on the date of this Resolution or in the future shall be permitted to
be funded with the proceeds of any Series of Bonds pursuant to the laws of the State.
"Project Fund" shall mean the Project Fund created and established pursuant to Section
3.01 of this Resolution.
"Prudent Utility Practice" shall mean, in respect of any particular municipal utility
industry, any of the practices, methods and acts which, in the exercise of reasonable judgment,
in light of the facts, including but not limited to the practices, methods and acts engaged in or
approved by a significant portion of such utility industry prior thereto, known at the time the
decision was made, would have been expected to accomplish the desired result at the lowest
reasonable cost consistent with reliability, safety, and expedition. It is recognized that Prudent
Utility Practice is not intended to be limited to the optimum practice, method or act to the
exclusion of all others, but rather is a spectrum of possible practices, methods or acts which
could have been expected to accomplish the desired result at the lowest reasonable cost
consistent with reliability, safety and expedition.
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"Qualified Agreement" means, to the extent from time to time permitted pursuant to
law, any contract or contracts entered into in connection with Bonds under which payments are,
in whole or in part, based on interest rate, cash flow, or other basis desired by the City,
including, without limitation, contracts commonly known as current or forward interest rate
swap or swaption agreements and interest rate floors or caps. Notwithstanding anything herein
to the contrary, "Qualified Agreement" shall not include goods and service supply contracts.
"Qualified Agreement Provider" means, an entity whose senior long term obligations,
other senior long term obligations or claims paying ability or whose payment obligations under
a Qualified Agreement are guaranteed by an entity whose senior long term debt obligations,
other senior unsecured long term obligations or claims paying ability are rated at the time of
execution of such Qualified Agreement either (i) at least as high as A3 by Moody's, and A- by
S&P, or the equivalent thereof by any successor thereto for so long as such rating agency is then
maintaining a rating on the Bonds Outstanding, or (ii) any such lower rating categories which
each such rating agency then maintaining a rating on the Bonds Outstanding indicates in
writing to the City will not, by itself, result in a reduction or withdrawal of its rating on the
Bonds Outstanding that is in effect prior to entering into such Qualified Agreement.
"Qualified Independent Consultant" shall mean one or more qualified and recognized
independent consultants, having favorable repute, skill and experience with respect to the acts
and duties of the Qualified Independent Consultant to be provided to the City, as shall from
time to time be retained by the City to perform the acts and carry out the duties herein provided
for such consultants.
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12
"Rate Stabilization Fund" shall mean the "Rate Stabilization Fund" established pursuant
to Section 3.01 of this Resolution. '
"Rebate Amount" means the excess of the future value, as of a computation date, of all 1
receipts on nonpurpose investments (as defined in Section 1.148-1(b) of the Income Tax
Regulations) over the future value, as of that date, of all payments on nonpurpose investments,
all as provided by regulations under the Code implementing Section 148 thereof.
"Rebate Fund" shall mean the City of Ocoee, Florida Water and Sewer System Revenue
Bonds Rebate Fund established pursuant to Section 6.10 hereof.
"Rebate Year" shall mean, with respect to a particular Series of Bonds issued hereunder,
a one-year period (or shorter period from the date of issue) that ends at the close of business on
the day in the calendar year selected by the City as the last day of a Rebate Year. The final
Rebate Year with respect to a particular Series of Bonds issued hereunder, however, shall end
on the date of final maturity of that Series of Bonds.
"Record Date" shall mean each date that is on the 15th day of the calendar month
immediately preceding an interest payment date on the Bonds.
"Redemption Account" shall mean the special account of the same name created within
the Bond Service Fund.
"Refunding Bonds" shall mean that amount of any Series of Bonds, the proceeds of
which will be applied to the refunding of any previously issued Bonds.
"Registrar" shall mean any registrar for the Bonds appointed by or pursuant to
Supplemental Resolution and its successors and assigns, and any other Person which may at
any time be substituted in its place pursuant to Supplemental Resolution. Once appointed, no
resignation or removal of the Registrar shall become effective until a successor has been
appointed and has accepted the duties of Registrar. The Insurers of Bonds shall be furnished
pP P g
with written notice of the resignation or removal of the Registrar and the appointment of any
successor thereto.
"Reimbursement Obligations" shall have the meaning ascribed thereto in Section 6.08
hereof.
"Renewal, Replacement and Improvement Fund" shall mean the Renewal, Replacement
and Improvement Fund created and established pursuant to Section 3.01 of this Resolution.
"Reserve Fund" shall mean the Reserve Fund created and established pursuant to
Section 3.01 of this Resolution.
"Reserve Fund Insurance Policy" shall mean an insurance policy or surety bond, if any,
deposited in the Reserve Fund in lieu of or in substitution for cash on deposit therein pursuant
to Section 5.01(B)(3)hereof.
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"Reserve Fund Letter of Credit" shall mean an unconditional irrevocable letter of credit
or line of credit (other than a Reserve Fund Insurance Policy) deposited in the Reserve Fund in
lieu of or in substitution for cash on deposit therein pursuant to Section 5.01(B)(3)hereof.
"Reserve Requirement" for the Series 2016 Bonds shall be $0.00 (zero dollars). The
Reserve Requirement for any future Series of Bonds shall be the lesser of(i) the Maximum Bond
Service Requirement with respect to Bonds secured by the Reserve Fund, (ii) 125% of the
Average Annual Bond Service Requirement with respect to Bonds secured by the Reserve Fund,
or (iii) the largest amount as shall not adversely affect the exclusion of interest on the Bonds
from gross income for Federal income tax purposes with respect to Bonds secured by the
Reserve Fund; provided, however, the City shall establish by Supplemental Resolution a
different Reserve Requirement for an account of the Reserve Fund which secures a Series of
Bonds pursuant to Section 5.01(B)(3)hereof.
"Resolution" shall mean this Master Resolution, in its entirety, as from time to time may
be amended or supplemented by Supplemental Resolution, in accordance with the terms
hereof.
"Revenue Fund" shall mean the Revenue Fund created and established pursuant to
Section 3.01 of this Resolution.
"Serial Bonds"shall mean all of the Bonds other than Term Bonds.
"Series" or "Series of Bonds" or "Bonds of a Series" shall mean all Bonds designated as
being of the same Series issued and delivered on original issuance in a simultaneous
transaction, and any Bonds thereafter delivered in lieu thereof or in substitution therefor
pursuant to this Resolution.
"Series 2016 Bonds" shall mean the City's Water and Sewer System Revenue and
Refunding Revenue Bonds, Series 2016. References to "2016" may be changed if the Series 2016
Bonds are not issued in calendar year 2016 to reflect the calendar year of issuance.
"Service Area" shall mean the geographical area in the City and certain contiguous areas served
or to be served by the System or portions thereof
"Sewer System" or "Wastewater System" shall mean the complete sewer, wastewater and
residential and commercial reclaimed water system now owned, operated and maintained by the City and
which the City is, or shall be responsible for maintaining, together with any and all acquisitions,
improvements, extensions and additions thereto, hereafter constructed or acquired, together with all lands
or interest therein, including plants, buildings, machinery, franchises, pipes, mains, fixtures, equipment
and all property, real or personal, tangible or intangible (including agreements for the providing of such
services),now or hereafter constructed and/or owned or used in connection therewith.
"Sewer System Capital Facilities Charges" shall mean the capacity or impact fees, if any,
imposed by the City upon and collected from new users of the Sewer System which represent
an equitable share of the capital costs of the Sewer System which are attributable to the
increased demand such additional connections create upon the Sewer System. The term"Sewer
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System Capital Facilities Charges" in each year shall not include any amounts in excess of the
Bond Service Requirement for such Bond Year multiplied by the Expansion Percentage.
"Sewer System Capital Facilities Charges Fund" shall mean the Sewer System Capital
Facilities Charges Fund created and established pursuant to Section 3.01 of this Resolution.
"State"shall mean the State of Florida.
"Standard & Poor's" or "Standard & Poor's Corporation" or "S&P" shall mean S&P's
Global Ratings and any assigns and successors thereto.
"Subordinated Debt" shall mean any obligations payable on a junior, inferior and
subordinate basis under Section 5.01(P) hereof. "Subordinated Debt" shall include,but shall not
be limited to, (i) Subordinated Contract Obligations, (ii) payments to a Qualified Agreement
Provider pursuant to a Qualified Agreement which the City has designated as Subordinated
Debt, (iii) Reimbursement Obligations, and (iv) any other obligations payable from any of the
Pledged Revenues on a junior, inferior and subordinate basis to the Bonds.
"Subordinated Debt Service Fund" shall mean the Subordinated Debt Service Fund.
"Supplemental Resolution" shall mean any resolution of the City amending or
supplementing this Resolution adopted and becoming effective in accordance with the terms of
Sections 6.01 and 6.02 hereof.
"System" or"Utility System" shall mean, collectively,the Water System and Sewer System of the
City. Upon compliance with the provisions of Section 6.05 hereof, the term "System" may be deemed to
include other utility functions added to the System, including, but not limited to the acquisition,
distribution and sale of natural gas, the providing of electricity, the providing of cable television services,
the providing of telecommunication services or other utility functions that are authorized from time to
time pursuant to the Act. Notwithstanding the foregoing definition of the term System, subject to
satisfaction of the requirements in Section 5.01(G) hereof, such term shall not include any properties or
interest in properties of the City which the City determines shall not constitute a part of the System for the
purpose of this Resolution.
"Term Bonds" shall mean the Bonds other than Serial Bonds which shall be stated to
mature on one date, and shall have such Amortization Installments, as shall be determined by
Supplemental Resolution of the City.
"Variable Rate Bonds" shall mean obligations issued with a variable, adjustable,
convertible or other similar rate which is not fixed in percentage at the date of issue for the
entire term thereof as shall be determined by Supplemental Resolution of the City.
"Water System" shall mean the complete water system now owned, operated and
maintained by the City or which is proposed to be acquired by and operated and maintained by
the City and which the City is, or shall be responsible for maintaining, together with any and all
acquisitions, improvements, extensions and additions thereto, hereafter constructed or
acquired, together with all lands or interests therein, including plants, buildings, machinery,
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franchises, pipes, mains, fixtures, equipment and all property, real or personal, tangible or
intangible (including agreements for the providing of such services), now or hereafter
constructed and/or owned or used in connection therewith.
"Water System Capital Facilities Charges" shall mean the capacity or impact fees, if any,
imposed by the City upon and collected from new users of the Water System which represent
an equitable share of the capital costs of the Water System which are attributable to the
increased demand such additional connections create upon the Water System. The term "Water
System Capital Facilities Charges" in each year shall not include any amounts in excess of the
Bond Service Requirement for such Bond Year multiplied by the Expansion Percentage.
"Water System Capital Facilities Charges Fund" shall mean the Water System Capital
Facilities Charges Fund created and established pursuant to Section 3.01 of this Resolution.
The terms "herein," "hereunder," "hereby," "hereto," "hereof" and any similar terms shall
refer to this Resolution; the term "heretofore" shall mean before the date of adoption of this
Resolution; and the term"hereafter" shall mean after the date of adoption of this Resolution.
Words importing the masculine gender include every other gender. Words importing
the singular number include the plural number, and vice versa.
Section 1.03. Findings. It is hereby ascertained, determined and declared that:
(A) The City now owns, operates and maintains the System and derives and will
continue to derive revenues from rates, fees, and rentals and other charges made and collected
for services of the System, and it is in the best interests of the City, and the health, safety and
welfare of its inhabitants and serves a City purpose to provide for the refunding of the
Refunded Obligations in terms of overall net debt service savings and the modernization of
bond covenants to provide more flexibility for the City and the System. The City also desires to
provide for the funding of improvements and capital expenditures to benefit the System to be
financed from a portion of the proceeds of the Series 2016 Bonds.
(B) The City will receive the Pledged Revenues, and such Pledged Revenues are not
pledged or encumbered to pay any other debts or obligations of the City other than the
Refunded Obligations. The City is authorized pursuant to the provisions of the Act to pledge
the Pledged Revenues to secure the payment of debt service on the Series 2016 Bonds.
(C) The Pledged Revenues are estimated to be sufficient to pay, as the same becomes
due and payable, the Bond Service Requirement on the Series 2016 Bonds and to make all other
payments required to be made by the provisions of this Resolution.
(D) The costs associated with issuance of the Series 2016 Bonds shall be deemed to
include, but not limited to, legal and financial advisory fees and expenses, engineering
expenses, fiscal expenses, underwriting fees and expenses, rating agency fees, expenses for
estimates of costs and of revenues, accounting expenses, municipal bond insurance premiums,
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surety policy premiums, if applicable, costs of printing, fees and expenses for the paying agent
and registrar, accrued and capitalized interest, if any, provisions for reserves, and such other
fees and expenses as may be necessary or incidental for the financing herein authorized.
(E) Any Series of Bonds, after the issuance of the Series 2016 Bonds shall be issued
upon approval by Supplemental Resolution of the City and compliance with the terms hereof.
The proceeds of any Series of Bonds shall be applied as provided in a Supplemental Resolution.
(F) The principal of and interest and redemption premium on the Series 2016 Bonds
and all reserve and other payments contemplated hereunder shall be payable solely from the
Pledged Revenues. The City shall never be required to levy ad valorem taxes on any real or
personal property therein to pay the principal of and interest on the Bonds herein authorized or
to make any other payments provided for herein. The Bonds shall not constitute a lien upon
any properties owned by or located within the boundaries of the Service Area or the City or
upon any property other than the Pledged Revenues.
Section 1.04. This Resolution to Constitute Contract. In consideration of the
acceptance of the Bonds authorized to be issued hereunder by those who shall hold the same
from time to time, this Resolution shall be deemed to be and shall constitute a contract between
the City and such Holders. The covenants and agreements herein set forth to be performed by
the City shall be for the equal benefit, protection and security of the legal Holders of any and all
of the Bonds, all of which shall be of equal rank and without preference, priority or distinction
of any of the Bonds over any other thereof, except as expressly provided therein and herein.
ARTICLE II
AUTHORIZATION AND DESCRIPTION OF THE
SERIES 2016 BONDS;EXCHANGE AND TRANSFER
Section 2.01 Authorization of the Refunding of the Refunded Obligations and 2016
Project; Authorization of Series 2016 Bonds. The refunding of the Refunded Obligations and
the financing of the 2016 Project are hereby specifically authorized. The "Water and Sewer
System Revenue and Refunding Revenue Bonds, Series 2016" are hereby specifically authorized
to be issued in an aggregate principal amount of not to exceed$26,000,000 to (i) refund all of the
Series 2012 Notes and the Series 2013 Notes, (ii) to finance improvements to the System as the
2016 Project, and (iii)pay the cost of issuing the Series 2016 Bonds.
Section 2.02 Authorization of Bonds. Subject and pursuant to the provisions hereof,
obligations of the City to be known as "Water and Sewer System Revenue Bonds" which may be
issued from time to time are hereby authorized to be issued. The aggregate principal amount of
the Bonds which may be executed and delivered under this Resolution is not limited except as
is or may hereafter be provided in this Resolution or as limited by the Act or by law.
The Bonds may, if and when authorized by the City pursuant to this Resolution, be
issued in one or more Series, with such further appropriate particular designations added to or
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incorporated in such title for the Bonds of any particular Series as the City may determine and
as may be necessary to distinguish such Bonds from the Bonds of any other Series. Each Bond
shall bear upon its face the designation so determined for the Series to which it belongs. The
Bonds shall be issued for such purpose or purposes; shall bear interest at such rate or rates not
exceeding the maximum rate permitted by law; and shall be payable in lawful money of the
United States of America on such dates; all as determined herein or by Supplemental Resolution
of the City.
The Bonds shall be issued in such denominations and such form, whether coupon or
registered; shall be dated such date; shall bear such numbers; shall be payable at such place or
places; shall contain such redemption provisions; shall have such Paying Agents and Registrars;
shall mature in such years and amounts; and the proceeds shall be used in such manner; all as
determined by Supplemental Resolution of the City, and, in the case of the Series 2016 Bonds,
by Section 2.03 hereof. The City may issue Bonds which may be secured by a Credit Facility or
by a Bond Insurance Policy all as shall be determined by Supplemental Resolution of the City.
Section 2.03 Description of the Series 2016 Bonds. The Series 2016 Bonds are hereby
authorized to be issued in the aggregate principal amount of not to exceed $26,000,000 with
further details provided in a Supplemental Resolution prior to their delivery.
The Series 2016 Bonds shall be issued hereunder in fully registered form without
coupons; may be Capital Appreciation Bonds, Serial Bonds or Term Bonds; shall be dated; shall
be numbered consecutively from one upward in order of maturity preceded by the letter "R" if
Serial Bonds or Term Bonds, and preceded by the letters "CABR" if Capital Appreciation Bonds;
shall be in the denomination of $5,000 each, or integral multiples thereof for the Serial Bonds
and Term Bonds, and in $5,000 Accreted Values at maturity for the Capital Appreciation Bonds
or in$5,000 multiples thereof, or such other denominations as shall be approved by the City in a
Supplemental Resolution prior to the delivery of such Bonds shall bear interest at such rate or
rates not exceeding the maximum rate allowed by State law, the actual rate to be approved by
the governing body of the City prior to or upon the sale of such Bonds; such interest to be
payable semiannually at such times as are fixed by Supplemental Resolution of the City if Serial
Bonds or Term Bonds or payable at maturity if Capital Appreciation Bonds, and shall mature
annually on such date in such years and such amounts as will be fixed by Supplemental
Resolution of the City prior to or upon the sale of such Bonds, and may be issued with variable,
adjustable, convertible or other rates with original issue discounts and as zero coupon bonds; all
as the City shall provide herein or hereafter by Supplemental Resolution.
Each Serial or Term Bond shall bear interest from the interest payment date next
preceding the date on which it is authenticated, unless authenticated on an interest payment
date, in which case it shall bear interest from such interest payment date, or, unless
authenticated prior to the first interest payment date, in which case it shall bear interest from its
date; provided, however, that if at the time of authentication, payment of any interest which is
due and payable has not been made, such Serial or Term Bond shall bear interest from the date
to which interest shall have been paid.
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Unless otherwise set forth in a Supplemental Resolution adopted prior to the issuance of
a Series of Bonds, interest shall be calculated based upon a 360 day year consisting of twelve-30
day months.
Each Capital Appreciation Bond shall bear interest only at maturity or upon redemption
prior to maturity in the amount determined by reference to the Accreted Value.
The principal of and the interest and redemption premium, if any, on such Bonds shall
be payable in any coin or currency of the United States of America which on the respective
dates of payment thereof is legal tender for the payment of public and private debts. The
interest on the Serial or Term Bonds shall be payable by the Paying Agent on each interest
payment date, or the first business day following an interest payment date if such interest
payment date is not a business day, to the Person appearing on the registration books of the
City hereinafter provided for as the registered Holder thereof, by check or draft mailed to such
registered Holder at his address as it appears on such registration books or by wire transfer to
Holders of $1,000,000 or more in principal amount of such Bonds. Payment of the principal of
all Serial or Term Bonds (reduced by any Amortization Installments previously paid by the City
on any Term Bonds) and the Accreted Value with respect to the Capital Appreciation Bonds
shall be made upon the presentation and surrender of such Bonds as the same shall become due
and payable.
As long as any such Bonds are outstanding in book-entry form, the provisions of this
Resolution inconsistent with such system of book-entry registration shall not be applicable to
such Bonds, and the City covenants to cause adequate records to be kept with respect to the
ownership of any Series of Bonds issued in book-entry form or the beneficial ownership of
bonds issued in the name of a nominee.
Section 2.04 Execution of Bonds. The Bonds in the form set forth in Section 2.11 of
each Series shall be executed in the name of the City by the Mayor, and attested by the Clerk
and the corporate seal of the City or facsimile thereof shall be affixed thereto or reproduced
thereon. The signatures of the Mayor and the Clerk may be manual or facsimile signatures
imprinted or reproduced thereon.
In case any one or more of the officers who shall have signed or sealed any of the Bonds
shall cease to be such officer of the City before the Bonds so signed and sealed shall have been
actually sold and delivered, such Bonds may nevertheless be sold and delivered as herein
provided and may be issued as if the Person who signed or sealed such Bonds had not ceased to
hold such office. Any Bond may be signed and sealed on behalf of the City by such Person as at
the actual time of the execution of such Bond shall hold the proper office in the City, although at
the date of such Bonds such Person may not have held such office or may not have been so
authorized.
Section 2.05 Authentication of Bonds. Only such of the Bonds as shall have endorsed
thereon a certificate of authentication substantially in the form herein below set forth, duly
executed by the Registrar, as authenticating agent, shall be entitled to any benefit or security
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under this Resolution. No Bond shall be valid or obligatory for any purpose unless and until
such certificate of authentication shall have been duly executed by the Registrar, and such
certificate of the Registrar upon any such Bond shall be conclusive evidence that such Bond has
been duly authenticated and delivered under this Resolution. The Registrar's certificate of
authentication on any Bond shall be deemed to have been duly executed if signed by an
authorized officer of the Registrar, but it shall not be necessary that the same officer sign the
certificate of authentication of all of the Bonds that may be issued hereunder at any one time.
Section 2.06 Exchange of Bonds. Any Bonds, upon surrender thereof at the
designated corporate trust office of the Registrar, together with an assignment duly executed by
the Bondholder or his attorney or legal representative in such form as shall be satisfactory to the
Registrar, may, at the option of the Bondholder, be exchanged for an aggregate principal
amount of Bonds of the same Series equal to the principal amount of the Bond or Bonds so
surrendered.
The Registrar shall make provision for the exchange of Bonds at the designated
corporate trust office of the Registrar.
Section 2.07 Negotiability, Registration and Transfer of Bonds. The Registrar shall
keep books for the registration of and for the registration of transfers of Bonds as provided in
this Resolution. The transfer of any Bonds may be registered only upon such books and only
upon surrender thereof to the Registrar together with an assignment duly executed by the
Bondholder or his attorney or legal representative in such form as shall be satisfactory to the
Registrar. Upon any such registration of transfer, the City shall execute and the Registrar shall
authenticate and deliver in exchange for such Bond, a new Bond or Bonds registered in the
name of the transferee, and in an aggregate principal amount equal to the principal amount of
such Bond or Bonds so surrendered and of the same Series.
In all cases in which Bonds shall be exchanged, the City shall execute and the Registrar
shall authenticate and deliver, at the earliest practicable time, a new Bond or Bonds of the same
type (e.g., Serial Bonds will be exchanged for Serial Bonds and Capital Appreciation Bonds will
be exchanged for Capital Appreciation Bonds) and of the same Series in accordance with the
provisions of this Resolution. All Bonds surrendered in any such exchange or registration of
transfer shall forthwith be canceled by the Registrar. The City or the Registrar may make a
charge for every such exchange or registration of transfer of Bonds sufficient to reimburse it for
any tax or other governmental charge required to be paid with respect to such exchange or
registration of transfer,but no other charge shall be made to any Bondholder for the privilege of
exchanging or registering the transfer of Bonds under the provisions of this Resolution. Neither
the City nor the Registrar shall be required to make any such exchange, registration or transfer
of Bonds after the Record Date.
Section 2.08 Ownership of Bonds. The Person in whose name any Bond shall be
registered shall be deemed and regarded as the absolute owner thereof for all purposes, and
payment of or on account of the principal or redemption price of any such Bond, and the
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interest on any such Bonds shall be made only to or upon the order of the registered owner
thereof or his legal representative. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Bond including the premium, if any, and interest thereon to
the extent of the sum or sums so paid.
Section 2.09 Bonds Mutilated, Destroyed, Stolen or Lost. In case any Bond shall
become mutilated, or be destroyed, stolen or lost, the City may, in its discretion, cause to be
executed, and the Registrar shall authenticate and deliver, a new Bond of like date and tenor as
the Bond so mutilated, destroyed, stolen or lost (e.g., Serial Bonds shall be issued in exchange
for Serial Bonds and Capital Appreciation Bonds shall be issued in exchange for Capital
Appreciation Bonds) in exchange and substitution for such mutilated Bond upon surrender and
cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen
or lost, and upon the Holder furnishing the City and the Registrar proof of his ownership
thereof and satisfactory indemnity and complying with such other reasonable regulations and
conditions as the City and the Registrar may prescribe and paying such expenses as the City
and the Registrar may incur. All Bonds so surrendered shall be canceled by the City. If any of
the Bonds shall have matured or be about to mature, instead of issuing a substitute Bond, the
City may pay the same,upon being indemnified as aforesaid, and if such Bond be lost, stolen or
destroyed, without surrender thereof.
Any such duplicate Bonds issued pursuant to this Section 2.09 shall constitute original,
additional contractual obligations on the part of the City whether or not the lost, stolen or
destroyed Bonds be at any time found by anyone, and such duplicate Bonds shall be entitled to
equal and proportionate benefits and rights as to lien on and source and security for payment
from the funds, as hereinafter pledged, to the same extent as all other Bonds issued hereunder.
Section 2.10. Provisions for Redemption. The Bonds shall be subject to redemption
prior to their maturity, at the option of the City, at such times and in such manner as shall be
fixed by Supplemental Resolution of the City prior to or at the time of sale of such Bonds. The
provisions of this Section may be modified as to any Series of Bonds by Supplemental
Resolution adopted prior to the issuance thereof.
Notice of such redemption shall, at least thirty (30) days prior to the redemption date,be
filed with the Registrar, and mailed by the Registrar on behalf of the City, first class mail,
postage prepaid, to all Holders of Bonds to be redeemed at their addresses as they appear on
the registration books hereinbefore provided for on the Record Date, but failure to mail such
notice to one or more Holders of such Bonds, or any defect therein, shall not affect the validity
of the proceedings for such redemption with respect to Holders of Bonds to which notice was
duly mailed hereunder and no defect occurred. Each such notice shall set forth the date fixed
for redemption, the redemption price to be paid and, if less than all of such Bonds, of one
maturity are to be called, the distinctive numbers of such Bonds to be redeemed and, in the case
of Bonds to be redeemed in part only, the portion of the principal amount thereof to be
redeemed.
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Any notice of optional redemption given pursuant to this Section 2.10 may state that it is
conditional upon receipt by the Paying Agent of moneys sufficient to pay the redemption price,
plus interest accrued to the redemption date, or upon the satisfaction of any other condition, or
that it may be rescinded upon the occurrence of any other event, and any conditional notice so
given may be rescinded at any time before payment of such redemption price and accrued
interest if any such condition so specified is not satisfied or if any such other event occurs.
Notice of such rescission shall be given by the Paying Agent to affected Holders of such Bonds
as promptly as practicable upon the failure of such condition or the occurrence of such other
event.
Official notice of redemption having been given as aforesaid, such Bonds or portions of
Bonds to be redeemed shall, on the redemption date, become due and payable at the
redemption price therein specified, and from and after such date (unless the City shall default in
the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear
interest. Upon surrender of such Bonds for redemption in accordance with said notice, such
Bonds shall be paid by the Registrar at the redemption price. Each check or other transfer of
funds issued by the Registrar for the purpose of the payment of the redemption price of Bonds
being redeemed shall bear the CUSIP number identifying, by issue and maturity, such Bonds
being redeemed with the proceeds of such check or other transfer. 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 such Bond, there shall be prepared for the
Holder a new Bond or Bonds of the same maturity in the amount of the unpaid principal of
such partially redeemed Bond. All such Bonds which have been redeemed shall be canceled
and destroyed by the Registrar and shall not be reissued.
Section 2.11. Form of Bonds. The text of the Bonds, together with the certificate of
authentication to be endorsed therein, shall be in substantially the following form, with such
omissions, insertions and variations as may be necessary, desirable, authorized or permitted by
this Resolution or by any Supplemental Resolution adopted prior to the issuance of a Series of
Bonds, or as may be necessary if such Bonds or a portion thereof are issued as Capital
Appreciation Bonds, Capital Appreciation Income Bonds, Option Bonds, Variable Rate Bonds,
or as may be necessary to comply with applicable laws, rules and regulations of the United
States and of the State in effect upon the issuance thereof.
[Remainder of page intentionally left blank]
22
[FORM OF BOND]
No. R- $
UNITED STATES OF AMERICA
STATE OF FLORIDA
CITY OF OCOEE,FLORIDA
WATER AND SEWER SYSTEM REVENUE [REFUNDING] BONDS, SERIES
MATURITY DATE: INTEREST RATE: DATED DATE: CUSIP:
Registered Owner:
Principal Amount:
City of Ocoee, Florida (hereinafter called the "City") for value received, hereby promises
to pay to the order of the Registered Owner identified above or registered assigns, as herein
provided, on the Maturity Date identified above, upon the presentation and surrender hereof at
the designated corporate trust office of
, Florida from the sources hereinafter mentioned, the Principal
Amount identified above in any coin or currency of the United States of America which on the
date of payment thereof is legal tender for the payment of public and private debts, and to pay,
solely from said sources, to the Registered Owner hereof by wire transfer or check transmitted
to the Registered Owner at his address as it appears on the Bond registration books of the City
as it appears on the 15th day of the calendar month preceding the applicable interest payment
date, interest on said Principal Amount at the Interest Rate per annum identified above on each
1 and 1 commencing 1, from the interest payment
date next preceding the date of registration and authentication of this Bond, unless this Bond is
registered and authenticated as of an interest payment date, in which case it shall bear interest
from said interest payment date, or unless this Bond is registered and authenticated prior to
, in which event this Bond shall bear interest from ,
(Insert Optional and/or Mandatory Redemption Provisions)
Notice of such redemption shall be given in the manner required by the Resolution (as
defined below).
This Bond is one of an authorized issue of Bonds in the aggregate principal amount of
$ of like date, tenor and effect, except as to number, principal amount, maturity,
redemption provisions and interest rate, issued to , all in full compliance
with the provisions of the Constitution of the State of Florida, the City Charter of the City,
Chapter 166, Part II, Florida Statutes, and other applicable provisions of law, and Resolution
No. 16-_ adopted by the City on November 1, 2016, as amended and supplemented,
particularly as supplemented by Resolution No. adopted by the City on ,
23
201_(collectively, "Resolution") and is subject to all the terms and conditions of such Resolution.
All capitalized undefined terms used herein shall have the meaning set forth in the Resolution.
On parity and equal status with the , this Bond is payable solely from and
secured by a pledge of the Net Revenues of the System levied and collected by the City, [the
Sewer System Capital Facilities Charges, the Water System Capital Facilities Charges,] and the
moneys in certain funds and accounts created pursuant to the Resolution (the "Pledged
Revenues") in the manner and to the extent provided in the Resolution. Reference is made to
the Resolution for more complete definition and description of the System and the Pledged
Revenues.
This Bond does not constitute a general indebtedness of the City within the meaning of
any constitutional, statutory or charter provision or limitation, and it is expressly agreed by the
Holder of this Bond that such Bondholder shall never have the right to require or compel the
exercise of the ad valorem taxing power of the City or taxation of any real or personal property
therein for the payment of the principal of and interest on this Bond or the making of any debt
service fund, reserve or other payments provided for in the Resolution.
It is further agreed between the City and the Holder of this Bond that this Bond and the
indebtedness evidenced thereby shall not constitute a lien upon the System, or any part thereof,
or on any other property of or in the City, but shall constitute a lien only on the Pledged
Revenues all in the manner provided in the Resolution.
The City has covenanted, in the Resolution, that it will fix, establish and maintain such
rates and collect such fees, rentals, or other charges for the services and facilities of the System,
and will revise the same from time to time whenever necessary, so as to provide Net Revenues
in the upcoming Fiscal Year equal to the amounts set forth below:
Net Revenues in such Fiscal Year equal to (a) one hundred fifteen percent (115%) of the
Bond Service Requirement on the Bonds in the corresponding Bond Year, and (b) one hundred
percent (100%) of the required deposits into (i) the Reserve Fund (less any portion thereof to be
deposited from proceeds of Bonds) together with any Reimbursements Obligations due and
owing in such Bond Year, and (ii) the Renewal, Replacement and Improvement Fund in such
Bond Year.
The City has entered into certain further covenants with the Holders of the Bonds of this
issue for the terms of which reference is made to the Resolution.
It is certified that this Bond is authorized by and is issued in conformity with the
requirements of the Constitution and Statutes of the State of Florida.
This Bond is and has all the qualities and incidents of a negotiable instrument under
Article 8 of the Uniform Commercial Code, the State of Florida, Chapter 678, Florida Statutes, as
amended.
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The transfer of this Bond is registrable by the Bondholder hereof in Person or by his
attorney or legal representative at the designated corporate trust office of the Registrar but only
in the manner and subject to the conditions provided in the Resolution and upon surrender and
cancellation of this Bond.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any
benefit or security under the Resolution until it shall have been authenticated by the execution
by the Registrar of the certificate of authentication endorsed hereon.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the City of Ocoee, Florida, by resolution duly adopted by its
Commission, has caused this Bond to bear the signatures of its Mayor, to be attested by the
signature of its Clerk, and a facsimile of the official seal of the City to be affixed, impressed,
imprinted, lithographed or reproduced hereon, all as of the day of , 20_.
(SEAL) CITY OF OCOEE, FLORIDA
By:
Mayor
ATTESTED:
By:
City Clerk
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds issued under the provisions of the within mentioned
Resolution.
Date of Authentication:
Registrar, as Authenticating Agent
By:
Authorized Officer
26
ASSIGNMENT AND TRANSFER
For value received the undersigned hereby sells, assigns and transfers unto
(Please insert Social Security or other identifying number of transferee)
the attached bond of the City of Ocoee, Florida, and does hereby constitute and
appoint, , attorney, to transfer the said Bond on the books kept for
Registration thereof, with full power of substitution in the premises.
Date:
Signature Guaranteed by
[member firm of the New York Stock
Exchange or a commercial bank or a trust
company.]
By: (manual or facsimile)
Authorized Officer NOTICE: No transfer will be registered and
no new Bonds will be issued in the name of
the transferee, unless the signature to this
assignment corresponds with the name as it
appears upon the face of the within Bond in
every particular, without alteration or
enlargement or any change whatever and the
Social Security or Federal Employer
Identification Number of the transferee is
supplied.
[END OF FORM OF BOND]
27
ARTICLE III
FUNDS AND ACCOUNTS
Section 3.01 Creation of Funds. There are hereby created and established the
following funds and accounts, which funds and accounts shall be trust funds held by the Clerk,
for the purposes herein provided and used only in the manner herein provided:
(A) The "City of Ocoee Water and Sewer System Revenue Fund" (hereinafter
sometimes called the "Revenue Fund") to be held by the City and to the credit of which deposits
of Gross Revenues shall be made as required by Section 5.01(A)hereof.
(B) The "City of Ocoee Water and Sewer System Bond Service Fund" (hereinafter
sometimes called the "Bond Service Fund") to be held by the City and to the credit of which
deposits shall be made as required by Section 5.01(B)(2) hereof. In such fund there shall be
maintained the following accounts: the Principal Account, the Interest Account, the Parity
Contract Obligation Account and the Redemption Account.
(C) The "City of Ocoee Water and Sewer System Reserve Fund" (hereinafter
sometimes called the "Reserve Fund") to be held by the City and to the credit of which deposits
shall be made as required by Section 5.01(B)(3) hereof. In such Fund, there may hereafter be
established accounts pursuant to Supplemental Resolution.
(D) The "City of Ocoee Water and Sewer System Subordinated Debt Service Fund"
(hereinafter sometimes called the "Subordinated Debt Service Fund") to be held by the City and
to the credit of which deposits shall be made as required by Section 5.01(B)(4)hereof.
(E) The "City of Ocoee Water and Sewer System Renewal, Replacement and
Improvement Fund" (hereinafter sometimes called the "Renewal, Replacement and
Improvement Fund") to be held by the City and to the credit of which deposits shall be made as
required by Section 5.01(B)(5)hereof.
(F) The "City of Ocoee Water and Sewer System Project Fund" (hereinafter
sometimes called the "Project Fund") to be held by the City and to the credit of which deposits
shall be made as required by Section 4.02 hereof. Within such fund, there may be created,
established and maintained separate accounts for each Series of Bonds, including the Series 2016
Bonds.
(G) The "City of Ocoee Sewer System Capital Facilities Charges Fund" (hereinafter
sometimes called the "Sewer Facilities Charges Fund") to be held by the City and to the credit of
which deposits shall be made as required by Section 5.01(R)hereof.
(H) The "City of Ocoee Water System Capital Facilities Charges Fund" (hereinafter
sometimes called the "Water System Capital Facilities Charges Fund") to be held by the City and
to the credit of which deposits shall be made as required by Section 5.01(S) hereof.
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(I) The "City of Ocoee Water and Sewer System Rate Stabilization Fund" (hereinafter
sometimes called the "Rate Stabilization Fund") to be held by the City and to the credit of which
deposits may be made as required by Section 5.01(T) hereof.
(J) The "City of Ocoee Water and Sewer System Surplus Fund" (hereinafter
sometimes called the "Surplus Fund") to be held by the City and to the credit of which deposits
may be made as required by Section 5.01 (B)(9) hereof.
The Revenue Fund, the Bond Service Fund (including the accounts therein), the Reserve
Fund (including any accounts therein), the Renewal, Replacement and Improvement Fund, the
Project Fund, the Sewer System Capital Facilities Charges Fund, the Water System Capital
Facilities Charges Fund, the Rate Stabilization Fund, the Surplus Fund and any other special
funds herein established and created shall be deemed to be held in trust for the purposes
provided herein for such funds. The money in all such funds shall be continuously secured in
the same manner as state and municipal deposits are authorized to be secured by the laws of
the State of Florida.
Notwithstanding anything herein to the contrary, the cash required to be accounted for
in each of the funds and accounts described in this Section 3.01 may be deposited in a single
bank account, provided that adequate accounting records are maintained to reflect and control
the restricted allocation of the cash on deposit therein for the various purposes of such funds
and accounts as herein and therein provided. The designation and establishment of the various
funds in and by this Resolution shall not be construed to require the establishment of any
completely independent, self-balancing funds as such term is commonly defined and used in
governmental accounting, but rather is intended solely to constitute an earmarking of certain
revenues and assets of the System for certain purposes and to establish certain priorities for
application of such revenues and assets as herein provided.
The City may at any time and from time to time appoint one or more depositaries to
hold, for the benefit of the Bondholders, any one or more of the funds, and accounts established
hereby. Such depository or depositaries shall perform at the direction of the City the duties of
the City in depositing, transferring and disbursing moneys to and from each of such funds and
accounts as herein set forth, and all records of such depositary in performing such duties shall
be open at all reasonable times to inspection by the City and its agent and employees. Any such
depositary shall be a bank or trust company duly authorized to exercise corporate trust powers
and subject to examination by federal or state authority, of good standing, and having a
combined capital, surplus and undivided profits aggregating not less than fifty million dollars
($50,000,000).
ARTICLE IV
APPLICATION OF BOND PROCEEDS; SPECIAL OBLIGATIONS
Section 4.01 Application of Bond Proceeds. The proceeds, including accrued interest
and premium, if any, received from the sale of a Series of the Bonds shall be applied by the City
29
simultaneously with the delivery of such Series of the Bonds to the purchaser thereof, as
provided in a Supplemental Resolution adopted at or prior to sale of such Series of the Bonds.
Section 4.02 Disbursements from Project Fund. Moneys on deposit from time to time
in the Project Fund or in the accounts created therein shall be used to pay or reimburse the
following Project Costs relating to the corresponding Project:
(A) Costs incurred directly or indirectly for or in connection with a Project or a
proposed or future Project or acquisition including, but not limited to, those for preliminary
planning and studies, architectural, construction management services, legal, financial,
engineering and supervisory services, labor, services, materials, equipment, accounts receivable,
acquisitions, land, rights-of-way,improvements and installation;
(B) Premiums attributable to all insurance required to be taken out and maintained
during the period of construction with respect to a Project to be acquired or constructed, the
premium on each surety bond, if any, required with respect to work on such facilities, and
taxes, assessments and other charges hereof that may become payable during the period of
construction with respect to such a Project;
(C) Costs incurred directly or indirectly in seeking to enforce any remedy against a
contractor or subcontractor in respect of any default under a contract relating to a Project or
costs incurred directly or indirectly in defending any claim by a contractor or subcontractor
with respect to a Project;
(D) Financial, legal, accounting, appraisals, title evidence and printing and engraving
fees, charges and expenses, and all other such fees, charges and expenses incurred in connection
with the authorization, sale, issuance and delivery of such Series of Bonds;
(E) Capitalized interest funded from Bond proceeds, if any, for a reasonable period
of time;
(F) Any other incidental and necessary costs including without limitation any
expenses, fees and charges relating to the acquisition, construction or installation of a Project,
and the making of extraordinary repairs, renewals and replacements, decommissioning or
retirement of any portion of the System, including the cost of temporary employees of the City
retained to carry out duties in connection with the acquisition, construction or erection of a
Project and costs related to transition of such Project into ownership by the City;
(G) Costs incurred directly or indirectly in placing any Project in operation in order
that completion of such Project may occur;
(H) Costs of acquiring an existing utility system from a Person, including but not
limited to the costs relating to any real estate transaction related thereto;
30
(I) Any other costs relating to the System authorized pursuant to a Supplemental
Resolution of the City and permitted under the laws of the State subject to the prior written
approval of Bond Counsel;and
(J) Reimbursements to the City for any of the above items hereinbefore paid by or
on behalf of the City, to the extent deemed permissible by Bond Counsel and advisable by the
Financial Advisor.
Notwithstanding anything else in this Resolution to the contrary, in the Event of Default,
the trustee acting for the Holders of Bonds shall, to the extent there are no other available funds
held hereunder, use the remaining funds in each account in the Project Fund to pay principal
and interest on the Series of Bonds for which it was established.
Section 4.03 Special Obligations of City. The Bonds and any Parity Contract
Obligations shall not be or constitute general obligations or indebtedness of the City as "bonds"
within the meaning of the Constitution of the State, but shall be payable solely from and
secured by a first lien upon and a pledge of the Pledged Revenues as herein provided. No
Holder or Holders of any Bonds issued hereunder or Qualified Agreement Provider shall ever
have the right to compel the exercise of the ad valorem taxing power of the City or taxation in
any form of any real or personal property therein, or to compel the City to pay such principal
and interest from any other funds of the City.
The payment of principal of and interest on the Bonds and any Parity Contract
Obligations shall be secured forthwith equally and ratably by, and the City hereby grants to the
Bondholders and any Qualified Agreement Provider (to the extent set forth in the related
Qualified Agreement) an irrevocable lien on the Pledged Revenues, prior and superior to all
other liens or encumbrances on such Pledged Revenues and the City does hereby irrevocably
pledge such Pledged Revenues to the payment of the principal of, redemption premium, if any,
and interest on the Bonds and any Parity Contract Obligations, for the reserves therefor and for
all other payments required hereunder. Such amounts hereby pledged and assigned shall
immediately be subject to the lien of this pledge without any further physical delivery thereof
or any further act, and the lien of this pledge shall be valid and binding as against all parties
having claims of any kind in tort, contract or otherwise against the City, irrespective of whether
such parties have notice thereof.
ARTICLE V
COVENANTS OF THE CITY; DEFAULTS AND REMEDIES
Section 5.01 Covenants of the City. For so long as any of the principal of and interest
on any of the Bonds shall be outstanding and unpaid or amounts shall be owed by the City
under any Qualified Agreement or until the City has made provision for payment of principal,
interest and redemption premiums, if any, with respect to the Bonds, as provided herein, the
City covenants with the Holders of any and all Bonds and any Qualified Agreement Provider as
follows:
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(A) REVENUE FUND. All Gross Revenues of the System, and any direct subsidy
payments received from the United States Treasury relating to Build America Bonds or any
other similar interest subsidy or payments made by the Federal government, shall, upon receipt
thereof, be deposited in the Revenue Fund. All deposits into such Revenue Fund shall be
deemed to be held in trust for the purposes herein provided and used only for the purposes and
in the manner herein provided.
(B) DISPOSITION OF REVENUES. All amounts on deposit in the Revenue Fund
shall be disposed of monthly, but not later than the twenty-fifth (25th) day of each month
commencing in the month immediately following the delivery of the first Series of Bonds issued
hereunder only in the following manner and the following order of priority:
(1) The City shall first fund the Cost of Operation and Maintenance for the
next month.
(2) The City shall next deposit into the Bond Service Fund and credit to the
following accounts, in the following order (except that payments into the Interest
Account and the Parity Contract Obligations Account shall be on parity with each other,
and the payments into the Principal Account and the Redemption Account shall be on a
parity with each other), the following identified sums:
(a) Interest Account: Taking into account actual and anticipated
earnings in the Interest Account of the Bond Service Fund within the current
Bond Year, such sum as will be sufficient to pay one-sixth(1/6th) (or such greater
fractional amount if less than six months will transpire before the next interest
payment date) of all interest coming due on all Outstanding Bonds on the next
interest payment date; provided, however, that monthly deposits of interest, or
portions thereof, shall not be required to be made to the extent that money on
deposit within such Interest Account is sufficient for such purpose. In the event
the City has issued Variable Rate Bonds pursuant to the provisions hereof,
amounts transferred from the Revenue Fund shall be deposited at such other or
additional times and amounts as necessary to pay any interest coming due on
such Variable Rate Bonds on the next interest payment date, all in the manner
provided in a Supplemental Resolution of the City. Any monthly payment from
such amounts to be deposited as set forth above, for the purpose of meeting
interest payments for any Series of Bonds, shall be adjusted, as appropriate, to
reflect the frequency of interest payment dates applicable to such Series. Moneys
in the Interest Account may be used only for the purposes set forth in this
paragraph (a). Deposits required pursuant to the foregoing shall be increased or
decreased each month to the extent required to timely pay interest next
becoming due and payable after making allowance for any accrued and
capitalized interest, and to make up any deficiency or loss that may otherwise
arise in such fund or account. Any direct subsidy payments received from the
United States Treasury relating to Build America Bonds or any other similar
32
interest subsidy or payments made by the Federal government shall be used to
pay interest on Bonds issued as Build America Bonds.
(b) Parity Contract Obligations Account: Taking into account the actual
and anticipated earnings in the Parity Contract Obligations Account in the Bond
Service Fund within the current Bond Year, a pro rata estimated amount necessary
to build up over time the amount of any Parity Contract Obligation which will next
be due and payable or reasonably expected to be due and payable under any
Qualified Agreement on the next payment date thereunder; provided, however,
that the monthly amount to be so deposited may be adjusted, as appropriate, to
reflect the frequency of payment dates thereunder (e.g., if such Parity Contract
Obligations are required to be paid semi-annually, the City shall be required to
deposit monthly an amount which is estimated to equal one-sixth (1/6th) of the next
such payment). Moneys in the Parity Contract Obligations Account may be used
only for the purposes set forth in this paragraph (b). Deposits required pursuant
to the foregoing shall be increased or decreased each month to the extent
required to timely pay Parity Contract Obligations next becoming due and
payable and to make up any deficiency or loss that may otherwise arise in such
fund or account.
(c) Principal Account: Taking into account actual and anticipated
earnings in the Principal Account of the Bond Service Fund within the current
Bond Year, such sum as will be sufficient to pay one-twelfth (1/12th) (or such
greater fractional amount if less than twelve (12)months will transpire before the
next principal is due) of the principal amount of the Outstanding Bonds which
will mature and become due on such annual maturity dates beginning the month
which is twelve (12) months prior to the first principal maturity date (or such
month which is the month after the issuance of Bonds which may be less than a
twelve (12) months prior); provided, however, that monthly deposits for
principal, or portions thereof, shall not be required to be made to the extent that
money on deposit within such Principal Account is sufficient for such purpose.
Any monthly payment from amounts transferred from the Revenue Fund to be
deposited as set forth above, for the purpose of meeting principal payments for
any Series of Bonds, shall be adjusted, as appropriate, to reflect the frequency of
principal payment dates applicable to such Series. Moneys in the Principal
Account may be used only for the purposes set forth in this paragraph (c).
Deposits required pursuant to the foregoing shall be increased or decreased each
month to the extent required to timely pay principal next becoming due and
payable and to make up any deficiency or loss that may otherwise arise in such
fund or account.
(d) Redemption Account: Taking into account actual and anticipated
earnings in the Redemption Account of the Bond Service Fund within the current
Bond Year, such sum as will be sufficient to pay one-twelfth (1/12th) of any
33
Amortization Installment established for the mandatory redemption of
Outstanding Bonds on such annual maturity date beginning the month which is
twelve (12) months prior to the first Amortization Installment date; provided,
however, that monthly deposits into the Redemption Account, or portions
thereof, shall not be required to be made to the extent that money on deposit in
the Redemption Account is sufficient for such purpose. Any monthly payment
from amounts transferred from the Revenue Fund to be deposited as set forth
above, for the purpose of meeting Amortization Installments for any Series of
Bonds, shall be adjusted, as appropriate, to reflect the frequency of dates or the
number of months prior to such dates established for Amortization Installments
applicable to such Series. The moneys in the Redemption Account shall be used
solely for the purchase or redemption of the Term Bonds payable therefrom. The
City may at any time purchase any of said Term Bonds at prices not greater than
the then redemption price of said Term Bonds. If the Term Bonds are not then
redeemable prior to maturity, the City may purchase said Term Bonds at prices
not greater than the redemption price of such Term Bonds on the next ensuing
redemption date. If Term Bonds are so purchased by the City, the City shall
credit the account of such purchased Term Bonds against any current
Amortization Installment to be paid by the City. If the City shall purchase or call
for redemption in any year Term Bonds in excess of the Amortization Installment
requirement for such year, such excess of Term Bonds so purchased or redeemed
shall be credited in such manner and at such times as the City shall determine.
Moneys in the Redemption Account in the Debt Service Fund may be used only
for the purposes set forth in this paragraph (d). Deposits required pursuant to
the foregoing shall be increased or decreased each month to the extent required
to timely pay Amortization Installments next becoming due and payable and to
make up any deficiency or loss that may otherwise arise in such fund or account.
(3) To the extent that the amounts on deposit in the Reserve Fund (or any
account therein) are less than the applicable Reserve Requirement, the City shall next
make deposits into the Reserve Fund (or any account therein) in the manner described
below from moneys remaining in the Revenue Fund. Any withdrawals from the
Reserve Fund (or any account therein) shall be subsequently restored from the first
moneys available in the Revenue Fund, after all required current payments for Cost of
Operation and Maintenance as set forth above and all current applications and
allocations to the Bond Service Fund, including all deficiencies for prior payments have
been made in full. Notwithstanding the foregoing, in case of withdrawal from the
Reserve Fund (or any account therein), in no event shall the City be required to deposit
into the Reserve Fund (or any account therein) an amount greater than that amount
necessary to ensure that the difference between the applicable Reserve Requirement and
the amounts on deposit in the Reserve Fund (or any account therein) on the date of
calculation shall be restored not later than sixty (60) months after the date of such
deficiency (assuming equal monthly payments into the Reserve Fund (or any account
therein) for such sixty (60) month period).
34
Notwithstanding anything herein to the contrary, the City may establish a
separate account in the Reserve Fund for any Series of Bonds and provide a pledge of
such account to the payment of such Series of Bonds apart from the pledge provided
herein. To the extent a Series of Bonds is secured separately by an account of the
Reserve Fund, the Holders of such Bonds shall not be secured by any other moneys in
the Reserve Fund or any other account therein. Moneys in a separate account of the
Reserve Fund shall be maintained at the Reserve Requirement applicable to such Series
of Bonds secured by the account; provided the Supplemental Resolution authorizing
such Series of Bonds may establish the Reserve Requirement relating to such separate
account of the Reserve Fund at such level as the City deems appropriate. Moneys shall
be deposited in the separate accounts in the Reserve Fund on a pro-rata basis.
Notwithstanding the foregoing, in lieu of or in substitution for the required
deposits into the Reserve Fund (or any account therein), the City may cause to be
deposited into the Reserve Fund (or any account therein) a Reserve Fund Insurance
Policy and/or a Reserve Fund Letter of Credit in an amount equal to the difference
between the applicable Reserve Requirement and the sums then on deposit in the
Reserve Fund (or any account therein) plus the amounts to be deposited therein
pursuant to the preceding paragraph.
In the event the Reserve Fund (or any account therein) contains both a Reserve
Fund Insurance Policy or Reserve Fund Letter of Credit and cash, the cash shall be
drawn down completely prior to any draw on the Reserve Fund Insurance Policy or
Reserve Fund Letter of Credit. In the event more than one Reserve Fund Insurance
Policy or Reserve Fund Letter of Credit is on deposit in the Reserve Fund (or any
account therein), amounts required to be drawn thereon shall be done on a pro-rata
basis calculated by reference to the maximum amounts available thereunder.
Moneys in the Reserve Fund and accounts therein shall be used only for the
purpose of the payment of Amortization Installments, principal of, or interest on the
Outstanding Bonds secured thereby when the other moneys allocated to the Bond
Service Fund are insufficient therefor, and for no other purpose.
Permitted Investments on deposit in the Reserve Fund (or any account therein)
shall be valued at fair value pursuant to Accounting Principles at least annually. In the
event of the refunding of any Series of Bonds, the City may withdraw from the Reserve
Fund or account securing such Series, all or any portion of the amounts accumulated
therein with respect to the Bonds being refunded and deposit such amounts as required
by the Supplemental Resolution authorizing the refunding of such Series of Bonds;
provided that such withdrawal shall not be made unless (a) immediately thereafter, the
Bonds being refunded shall be deemed to have been paid pursuant to the provisions
hereof, and (b) the amount remaining in the Reserve Fund (or any account therein) after
giving effect to the issuance of such refunding obligations and the disposition of the
35
proceeds thereof shall not be less than the applicable Reserve Requirement for any
Bonds then Outstanding which are secured thereby.
(4) From the moneys remaining in the Revenue Fund, the City shall next
deposit into the Subordinated Debt Service Fund an amount required to be paid as
provided in the resolution or agreement of the City authorizing such Subordinated Debt,
but for no other purposes.
(5) The City shall next apply and deposit monthly from the moneys
remaining on deposit in the Revenue Fund into the Renewal, Replacement and
Improvement Fund, an amount at least equal to one-twelfth (1/12th) of five percent(5%)
of the Gross Revenues received during the immediately preceding Fiscal Year, subject to
the minimum account balance set forth below. The moneys in the Renewal,
Replacement and Improvement Fund shall be used only for the purpose of paying the
cost of extraordinary repairs, extensions, enlargements or additions to, or the
replacement of capital assets of the System or emergency repairs thereto. No further
deposits shall be required to be made into the Renewal, Replacement and Improvement
Fund when there shall be on deposit therein an amount equal to or greater than
$500,000, or such other amount as may be determined from time to time by the
Consulting Engineers upon the request of the City. Funds on hand in the Renewal,
Replacement and Improvement Fund may be used to pay current Cost of Operation and
Maintenance to the extent moneys on deposit in the Revenue Fund are insufficient for
such purposes. The moneys on deposit in such fund may also be used to supplement
the Reserve Fund (or any account therein), if necessary, in order to prevent a default in
the payment of the principal and interest on the Bonds.
(6) Moneys may next, in the discretion of the Commission, be deposited into
the Rate Stabilization Fund in such sums as shall be determined by the Commission.
(7) The balance of any moneys remaining in the Revenue Fund after the
above required payments have been made shall be deposited into the Surplus Fund and
may be used for any lawful purpose; provided, however, that none of such moneys shall
be used for any purposes other than those hereinabove specified unless all current
payments, including any deficiencies for prior payments, have been made in full and
unless the City shall have complied fully with all the covenants and provisions of this
Resolution.
(C) INVESTMENTS. Moneys in any fund or account created hereunder may be
invested and reinvested in Permitted Investments which mature not later than the dates on
which the moneys on deposit therein will be needed for the purpose of such fund. All income
on such investments, except as otherwise provided, shall be deposited in the respective funds
and accounts from which such investments were made and be used for the purposes thereof
unless and until the maximum required amount (or, with respect to the Project Fund, the
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amount required to acquire, construct and erect the Project) is on deposit therein, and thereafter
shall be deposited in the Revenue Fund.
In determining the amount of any of the payments required to be made pursuant to this
Section 5.01(C), credit may be given for all investment income accruing to the respective funds
and accounts described herein, except as otherwise provided.
(D) OPERATION AND MAINTENANCE. The City will maintain the System and all
parts thereof in good condition and will operate the same in an efficient and economical
manner, making such expenditures for equipment and for renewals, repairs and replacements
as may be proper for the economical operation and maintenance thereof.
(E) RATE COVENANT. The City will fix, establish and maintain such rates and
collect such fees, rentals, or other charges for the services and facilities of the System, and will
revise the same from time to time whenever necessary, so as to provide Net Revenues in the
upcoming Fiscal Year equal to the amounts set forth below:
Net Revenues in such Fiscal Year equal to (a) one hundred fifteen percent (115%) of the
Bond Service Requirement on the Bonds in the corresponding Bond Year, and (b) one hundred
percent (100%) of the required deposits into (i) the Reserve Fund (less any portion thereof to be
deposited from proceeds of Bonds) together with any Reimbursements Obligations due and
owing in such Bond Year, and (ii) the Renewal, Replacement and Improvement Fund in such
Bond Year.
The City further covenants that, from time to time and as often as shall be necessary, it
will revise rates, fees and charges of the System or the Cost of Operation and Maintenance, and
methods of operations of the System as may be necessary so that Net Revenues in each Fiscal
Year will, subject to applicable requirements and restrictions imposed by law, not be less than
the amount required for such Fiscal Year (1) under this Section 5.01(E) and (2) to make all
deposits and payments required by the provisions of Section 5.01(B) hereof. The City further
covenants and agrees that it will annually, within thirty (30) days after adoption of the annual
budget, revise its rates, fees and charges to the extent necessary to cause the estimated Net
Revenues during the Fiscal Year to which such budget pertains to be not less than the amount
of Net Revenues (1) required by this Section 5.01(E) and (2) needed to make the deposits and
payments required by Section 5.01(B)hereof.
Nothing herein will obligate the City to impose Sewer System Capital Facilities Charges
or Water System Capital Facilities Charges other than in accordance with law.
(F) BOOKS AND ACCOUNTS; AUDIT. The City shall keep proper books, records
and accounts, separate and apart from all other records and accounts, showing correct and
complete entries of all transactions of the System, and the Holders of any of the Bonds or any
duly authorized agent or agents of such Holders shall have the right at any and all reasonable
times to inspect such books, records and accounts. The City shall, within two hundred forty
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(240) days following the close of each Fiscal Year of the City, cause an audit of such books,
records and accounts to be made by an independent firm of certified public accountants.
Copies of each such audit report shall be placed on file with the City and be made
available at reasonable times for inspection by Holders of the Bonds.
(G) SALE OF THE SYSTEM.(1) The System may be sold, mortgaged, leased or
otherwise disposed of only as a whole or substantially as a whole, and only if the net proceeds
to be realized from such transaction shall be sufficient fully to retire all of the Bonds and all
other obligations Outstanding pursuant to the provisions of this Resolution which have a lien
on the Pledged Revenues. The proceeds from such sale, mortgage, lease or other disposition of
the System pursuant to this paragraph(i) shall be used only for the purpose of providing for the
payment of the principal of and interest on the Bonds and other obligations Outstanding
pursuant to the provisions of this Resolution as the same shall become due, or for the
redemption of callable Bonds, provided, however, that any excess of such proceeds not needed
for such purpose may be used by the City for any purpose permitted by law.
(2) The foregoing provision notwithstanding, the City shall have and hereby
reserves the right to sell, lease or otherwise dispose of any of the property comprising a part of
the System which may hereafter be determined in the manner provided herein to be no longer
necessary, useful, or profitable in the operation thereof. Prior to any such sale, lease, or other
disposition of said property pursuant to this paragraph (2) the duly authorized officer in charge
of the System shall make a finding in writing determining that such property comprising a part
of the System is no longer necessary, useful, or profitable in the operation thereof. If (a) the
amount to be received as a result of such sale or other disposition is in excess of five percent
(5%) of the market value of the gross plant of the System, such finding shall be approved by
resolution of the Commission; and, if (b) the amount to be received as a result of such sale or
other disposition is in excess of ten percent (10%) of the market value of the gross plant of the
System, such finding shall be approved by the Qualified Independent Consultant and by
resolution of the Commission. Any proceeds of such sale or other disposition shall be deposited
in the Renewal, Replacement and Improvement Fund created by this Resolution and used only
as provided herein for moneys on deposit in such fund. Such payment of such proceeds into
the Renewal, Replacement and Improvement Fund shall not reduce the amounts required to be
paid into such fund by other provisions of this Resolution.
(3) The foregoing provision notwithstanding, the City shall have and hereby
reserves the right to sell, lease, or transfer operating control of, or otherwise dispose of, the
property comprising the System as a whole to any public board or body, whether created by the
City or created pursuant to the laws of the State, for the purpose of owning and operating the
System, whether independent of or together with any other utility systems of the City. Any
such transfer shall be expressly made subject to the rights of the Holders of any Bonds issued
hereunder and then Outstanding, and in particular subject to the lien upon the Pledged
Revenues of the Bonds.
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(4) The foregoing provisions notwithstanding, the City shall have the right to
merge or consolidate the System with any other City-owned and/or operated utility system,
including a sewer utility system and to combine the Gross Revenues and the Sewer Capital
Facilities Charges with corresponding receipts from the other utility system, and to subject such
combined Gross Revenues, Water Capital Facilities Charges and receipts to the lien of the Bonds
and any obligations secured by the receipts of such other utility system, provided that (i) the
requirements for the issuance of Additional Parity Obligations set forth in Section 5.01(Q)
hereof calculated with respect to the combined revenues, capital facilities charges, receipts and
debt obligations of the System and such other utility system are satisfied, and (ii) the Qualified
Independent Consultants shall certify as to the good condition of the other utility system and
operating feasibility of such merger and/or consolidation.
(H) INSURANCE. The City shall provide protection for the System both in
accordance with the requirements of all agreements, if any, to which the City may at the time be
a party with respect to joint ownership of properties by the City with others, if any, which are
part of the System, and in accordance with Prudent Utility Practice. Said protection may consist
of insurance, self-insurance and indemnities. The City will keep, or cause to be kept, the works,
plants and facilities comprising the properties of the System insured, and will carry such other
insurance against fire and other risks, accidents or casualties at least to the extent and of the
kinds that insurance is usually carried by utilities operating like properties. Any insurance shall
be in the form of policies or contracts for insurance with insurers of good standing, shall be
payable to the City and may provide for such deductibles, exclusions, limitations, restrictions,
and restrictive endorsements customary in policies for similar coverage issued to entities
operating properties similar to the properties of the System. Any self-insurance shall be in the
amounts, manner and of the type provided by entities operating properties similar to the
properties of the System. In the event of any loss or damage to the System covered by
insurance, the City will, with respect to each such loss, promptly repair, reconstruct or replace
the parts of the System affected by such loss or damage to the extent necessary to the proper
conduct of the operation of the business of the System in accordance with Prudent Utility
Practice, shall cause the proceeds of such insurance to be applied for that purpose to the extent
required therefor, and pending such application, shall hold the proceeds of any insurance
policy covering such damage or loss in trust to be applied for that purpose to the extent
required therefor. Any excess insurance proceeds received by the City may be used by the City
for any lawful purpose of the System. Notwithstanding the foregoing or any provisions of this
Resolution to the contrary, the City shall not be required to maintain insurance with respect to
facilities for which insurance shall not be available at reasonable cost or for facilities which, in
accordance with Prudent Utility Practice, are not customarily insured.
(I) NO FREE SERVICE; SERVICES RENDERED TO THE CITY; NO
PREFERENTIAL RATES. The City will neither render nor cause to be rendered any free
services of any nature by the System, or any part thereof, nor will any preferential rates be
established for users of the same class; in the event the City, or any department, agency, or
instrumentality, or any officer or employee thereof, shall avail itself of the facilities or services
provided by the System, or any part thereof, the same rates, fees, or charges applicable to other
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customers receiving like services under similar circumstances shall be charged to the City and
to any such department, agency, instrumentality, officer, or employee. Such charges shall be
paid as they accrue, and the City shall transfer from its general funds sufficient sums to pay
such charges. The moneys so received shall be deemed to be Gross Revenues derived from the
operation of the System, and shall be deposited and accounted for in the same manner as other
Gross Revenues derived from the operation of the System.
The foregoing paragraph shall not require the City to have the same rates for(a)different classes
of users or (b) for users of the services and facilities of the System residing or located within different
geographical areas, and the City may have different rates for(i)different classes of users or(ii)for users
of the services and facilities of the System located within and without the boundaries of the City, as long
as such rates comply with the foregoing paragraph, insofar as they relate to the users within (A)any class
or (B)any particular area or areas located within and without the City. The foregoing provisions
notwithstanding, the City shall set rates for customers of the System residing within the corporate limits
of the City in accordance with any applicable provisions of law.
(J) MANDATORY CUT OFF. To the full extent permitted by law, the City shall
abide by its established written policy consistent with Prudent Utility Practice for the
disconnection from the System of any customer who fails to pay for services rendered by the
System, and shall enforce such policy diligently and fairly.
(K) ENFORCEMENT OF COLLECTIONS. The City will diligently enforce and
collect the rates, fees and other charges for the services and facilities of the System and will take
all steps, actions and proceedings for the enforcement and collection of such rates, charges and
fees as shall become delinquent to the full extent permitted or authorized by law; and will
maintain accurate records with respect thereof. All such fees, rates, charges and revenues shall,
as collected,be held in trust to be applied as herein provided.
(L) OPERATING BUDGET. The City shall annually,prior to commencement of each
of its Fiscal Years, prepare and adopt a budget of the estimated expenditures for the operation
and maintenance of the System during such next succeeding Fiscal Year. The City shall mail
copies of such annual budgets (including any amendments thereto) to any Holder or Holders of
Bonds who shall file his address with the City and request in writing that copies of all such
budgets be furnished him and shall make available such budgets of the System at all reasonable
times to any Holder or Holders of Bonds or to anyone acting for and on behalf of such Holder
or Holders. Bondholders shall pay reasonable actual cost of printing and mailing of such
copies.
(M) MANDATORY CONNECTIONS; NO COMPETING SYSTEM. So long as service
is in fact available as reasonably determined by the City, the City will, to the full extent
permitted by law, require all lands, buildings and structures within the Service Area being
served by the System (other than the residential and commercial reuse/reclaimed system), to
connect with and use such facilities within one year after notification. To the extent permitted
by law, the City will not grant a franchise for the operation of any competing utility system or
systems within the Service Area until all Bonds issued hereunder, together with the interest
thereon, and premium, if any, have been paid in full. Notwithstanding the foregoing, the City
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shall not be required to duplicate services being provided by private or public utilities in the
area being served by such private or public utilities on the date of issuance of the first Series of
Bonds hereunder. In addition, the City shall not be prohibited from allowing other private or
public utilities to provide services within the Service Area, if it would be uneconomical for the
City to provide service in such portions of the Service Area. Nothing herein shall be deemed to
constitute the approval of the City for any private or public utility (other than the System) to
provide any services within the boundaries of the Service Area or the City or within any other
area of the City.
(N) SUPERVISORY PERSONNEL. The City, in operating the System, will employ or
designate, as manager, one or more of its qualified employees, or an independent contractor,
who have demonstrated ability and experience in operating similar facilities, and will require
all such employees or independent contractors, as the case may be, who may have possession of
money derived from the operation of the System to be covered by a fidelity bond, written by a
responsible indemnity company in amounts fully adequate to protect the City from loss.
(0) PAYMENT OF TAXES, ASSESSMENTS AND OTHER CLAIMS. The City shall
from time to time duly pay and discharge, or cause to be paid and discharged, all taxes,
assessments and other governmental charges, or payments in lieu thereof, lawfully imposed
upon the properties constituting the System, the Gross Revenues, Sewer System Capital
Facilities Charges or Water System Capital Facilities Charges when the same shall become due,
as well as all lawful claims for labor and materials and supplies which, if not paid, might
become a lien or charge upon such properties or any part thereof, or upon the Gross Revenues,
Sewer System Capital Facilities Charges or Water System Capital Facilities Charges or which
might in any way impair the security of the Bonds, except assessments, charges or claims which
the City shall in good faith contest by proper legal proceedings.
(P) ISSUANCE OF OTHER OBLIGATIONS. The City shall issue no bonds or
obligations of any kind or nature payable from or enjoying a lien on the Pledged Revenues if
such obligations have priority over the Bonds or any Parity Contract Obligations with respect to
payment or lien, nor shall the City create or cause or permit to be created any debt, lien, pledge,
assignment, encumbrance or other charge having priority to or being on a parity with the lien of
the Bonds and any Parity Contract Obligations upon said Pledged Revenues. Notwithstanding
any other provision in this Section 5.01(P), the City may issue Additional Parity Obligations
under the conditions and in the manner provided herein. Any obligations of the City, other
than the Bonds and any Parity Contract Obligations, which are payable from the Pledged
Revenues shall contain an express statement that such obligations are junior and subordinate in
all respects to the Bonds and any Parity Contract Obligations as to lien on and source and
security for payment from such Pledged Revenues.
(Q) ISSUANCE OF ADDITIONAL PARITY OBLIGATIONS. No Additional Parity
Obligations shall be issued after the issuance of the Series 2016 Bonds herein authorized, except
upon the conditions and in the manner hereinafter provided:
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(1) There shall have been obtained and filed with the Clerk a certificate of the
Finance Director stating:
(a) that the books and records of the City relative to the System and the
Net Revenues, and if applicable, the Sewer System Capital Facilities Charges and/or the
Water System Capital Facilities Charges, have been reviewed by the Finance
Director;and
(b) that the amount of the Net Revenues derived for any consecutive
twelve (12) months out of the preceding thirty (30) months preceding the date of
issuance of the proposed Additional Parity Obligations (the "Test Period") adjusted as
provided in paragraphs (2), (3), (4), (5) and/or(6)below, is equal to not less than 115% of
the Maximum Bond Service Requirement becoming due in any Bond Year thereafter on
(A) all Bonds issued under this Resolution, if any, then Outstanding, and (B) on the
Additional Parity Obligations with respect to which such certificate is made.
(2) Upon recommendation of the Qualified Independent Consultants, the
Net Revenues certified pursuant to (b) in the previous paragraph may be adjusted for
purposes of this Section 5.01(Q) by including: (a) 100% of the additional Net Revenues
which in the opinion of the Qualified Independent Consultant would have been derived
by the City from rate increases adopted before the Additional Parity Obligations are
issued, if such rate increases had been in place throughout the Test Period, and (b) 100%
of the additional Net Revenues estimated by the Qualified Independent Consultant to be
derived during the first full twelve month period after the facilities of the System are
extended, enlarged, improved or added to with the proceeds of the Additional Parity
Obligations with respect to which such certificate is made.
(3) Upon recommendation of the Qualified Independent Consultants, if the
Additional Parity Obligations are to be issued for the purpose of acquiring an existing
water system and/or sewer system and/or any other utility system in accordance with
Section 6.05 hereof, the Net Revenues certified pursuant to Section 5.01(Q)(1)(b) may be
adjusted by including: 100% of the additional estimated Net Revenues which in the
written opinion of the Qualified Independent Consultants will be derived from the
acquired facilities during the first full 12-month period after the issuance of such
Additional Parity Obligations (the Qualified Independent Consultants' report shall be
based on the actual operating revenues of the acquired utility for a recent 12-month
period adjusted to reflect the City's ownership and the City's rate structure in effect with
respect to the System at the time of the issuance of the Additional Parity Obligations).
(4) Upon recommendation of the Qualified Independent Consultants, if the
number of connections as of the first day of the month in which the proposed Additional
Parity Obligations are to be issued exceeds the average number of such connections
during such twelve (12) consecutive month period, then the Net Revenues certified
pursuant to Section 5.01(Q)(1)(b) may be adjusted to include the Net Revenues which
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would have been received in such twelve (12) consecutive months if those additional
connections had also been connected to the System during all of such twelve (12)
consecutive months.
(5) Upon recommendation of the Qualified Independent Consultant, if the
City shall have entered into a contract, which contract shall be for a duration of not less
than the final maturity of the proposed Additional Parity Obligations, with any public
body, whereby the City shall have agreed to furnish services for the collection, treatment
or disposal of sewage or agreed to furnish services in connection with any water system
or any other utility system, then the Net Revenues certified pursuant to
Section 5.01(Q)(1)(b) may be increased (to the extent such amounts were not reflected in
such Net Revenues) by the minimum amount which the public body shall guarantee to
pay in any one year for the furnishing of services by the City, after deducting from such
payment the estimated Cost of Operation and Maintenance attributable in such year to
such services.
(6) Upon recommendations of the Qualified Independent Consultants, if
there is an estimated increase in Net Revenues to be received by the City as a result of
additions, extensions or improvements to the System during the period of three (3)years
following the completion of such additions, extensions or improvements financed with
the proceeds of Bonds or Additional Parity Obligations, then the Net Revenues derived
from the System certified pursuant to Section 5.01(Q)(1)(b) may be increased by fifty
percent (50%) of the average annual additional Net Revenues calculated for such three
year period.
(7) The City need not comply with the provisions of paragraph (1) of this
Section 5.01(Q) if and to the extent the Additional Parity Obligations to be issued are
refunding bonds, if the City shall cause to be delivered a certificate of the Finance
Director of the City setting forth the Maximum Annual Bond Service Requirement(i) for
the Bonds then Outstanding and (ii) for all Series of Bonds to be immediately
Outstanding thereafter and stating that the Maximum Annual Bond Service
Requirement pursuant to (ii) above is not greater than that set forth pursuant to (i)
above.
(8) The City need not comply with the provisions of paragraph (1) of this
Section 5.01(Q) if and to the extent the Bonds to be issued are for the purpose of
providing any necessary additional funds required for completion of any improvements
to the System ("Completion Bonds") if originally financed with the proceeds of Bonds;
provided that such Completion Bonds for which the City need not comply with the
provision of such paragraph (1) of this Section 5.01(Q) may not exceed 10% of the total
principal amount of Bonds estimated to be required for such improvements to the
System at the time of issuance of the initial Series of Bonds to finance such
improvements.
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(9) The Finance Director of the City shall have certified that the City is not in
default in the carrying out of any of the obligations assumed under this Resolution and
no event of default shall have occurred under this Resolution and shall be continuing,
and all payments required by this Resolution to be made into the funds and accounts
established hereunder shall have been made to the full extent required.
(10) The Supplemental Resolution authorizing the issuance of the Additional
Parity Obligations shall recite that all of the covenants contained herein will be
applicable to such Additional Parity Obligations.
(11) Notwithstanding anything herein to the contrary, no Additional Parity
Obligations shall be issued if an Event of Default would continue beyond such issuance.
(R) SEWER SYSTEM CAPITAL FACILITIES CHARGES. All Sewer System Capital
Facilities Charges, if any, shall be deposited into the Sewer System Capital Facilities Charges
Fund. All moneys remaining on deposit in such fund shall be utilized on or before the 26th day
of each month and shall be applied by the City as follows:
(1) Such moneys shall, in the case of a deficiency in the Bond Service Fund,
first be applied and allocated, together with Water System Capital Facilities Charges
pursuant to Section 5.01(S) hereof on a pro rata basis, to the Bond Service Fund to
supplement other Pledged Revenues to be deposited therein or in substitution of other
Pledged Revenues to be deposited therein to the extent the Sewer System Capital
Facilities Charges are pledged to the Bonds.
(2) Thereafter, all moneys in the Sewer System Capital Facilities Charges
Fund may be applied by the City for any use allowed by law.
Notwithstanding any provision of this Resolution to the contrary, the amount of Sewer
System Capital Facilities Charges used for the payment of principal of, redemption premium, if
any, and interest on the Bonds in any Bond Year shall never exceed the maximum amount
permitted by law.
(S) WATER SYSTEM CAPITAL FACILITIES CHARGES. All Water System Capital
Facilities Charges, if any, shall be deposited into the Water System Capital Facilities Charges
Fund. All moneys remaining on deposit in such fund shall be utilized on or before the 26th day
of each month and shall be applied by the City as follows:
(1) Such moneys shall, in the case of a deficiency in the Bond Service Fund,
first be applied and allocated, together with Sewer System Capital Facilities Charges
pursuant to Section 5.01(R) hereof on a pro rata basis, to the Bond Service Fund to
supplement other Pledged Revenues to be deposited therein or in substitution of other
Pledged Revenues to be deposited therein to the extent the Water System Capital
Facilities Charges are pledged to the Bonds.
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(2) Thereafter, all moneys in the Water System Capital Facilities Charges
Fund may be applied by the City for any use allowed by law.
Notwithstanding any provision of this Resolution to the contrary, the amount of Water
System Capital Facilities Charges used for the payment of principal of, redemption premium, if
any, and interest on the Bonds in any Bond Year shall never exceed the maximum amount
permitted by law.
(T) RATE STABILIZATION FUND. Moneys on deposit in the Rate Stabilization
Fund may be used only for redeposit into the Revenue Fund. Moneys redeposited into the
Revenue Fund shall be included in Gross Revenues for the purposes of calculating Gross
Revenues hereunder for the Fiscal Year in which the redeposit occurs.
(U) UNCLAIMED MONEYS. Any moneys deposited into the Bond Service Fund,
including the Redemption Account, for the payment of principal of, premium, if any, and
interest on the Bonds and remaining unclaimed for a period of one (1)year from the date on
which such moneys were due to pay maturing principal of, premium, if any, or interest on such
Bonds may be withdrawn by the City and used for any lawful purpose of the System; provided
that (1) such withdrawal shall not give rise to any claim for additional interest due on such
Bonds on account of payment thereof not having been duly provided for under the terms of this
Resolution; and (2) such withdrawal shall not affect the right, to the extent existing under the
provisions of this Resolution or of the laws of the State, of the Holders of such Bonds to
payment of the principal and interest thereon to the interest payment date with respect to which
such moneys were originally deposited.
Section 5.02 Defaults; Events of Default and Remedies. Except as provided below, if
any of the following events occur, it is hereby defined as and declared to be and to constitute an
"Event of Default:"
(A) Default in the due and punctual payment of any interest on the Bonds;
(B) Default in the due and punctual payment of the principal of and premium, if
any, on any Bond, at the stated maturity thereof, or upon proceedings for redemption thereof;
(C) Default in the performance or observance of any other of the covenants,
agreements or conditions on the part of the City contained in this Resolution or in the Bonds
and the continuance thereof for a period of thirty (30) days after written notice to the City given
by the Holders of not less than twenty-five percent (25%) of aggregate principal amount of
Bonds then Outstanding (provided, however, that with respect to any obligation, covenant,
agreement or condition which requires performance by a date certain, if the City performs such
obligation, covenant, agreement or condition within thirty (30) days of written notice as
provided above, the default shall be deemed to be cured);
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(D) Failure by the City promptly to remove any execution, garnishment or
attachment of such consequence as will materially impair its ability to carry out its obligations
hereunder;or
(E) Any act of bankruptcy or the rearrangement, adjustment or readjustment of the
obligations of the City under the provisions of any bankruptcy or moratorium laws or similar
laws relating to or affecting creditors' rights.
The term "default" shall mean default by the City in the performance or observance of
any of the covenants, agreements or conditions on its part contained in this Resolution, any
Supplemental Resolution or in the Bonds, exclusive of any period of grace required to constitute
a default or an"Event of Default" as hereinabove provided.
Notwithstanding the foregoing, the occurrence of any default under a Qualified
Agreement, including without limitation failure on the part of the City to pay Parity Contract
Obligations or to pay a termination fee under a Qualified Agreement, shall not be construed as or
deemed to constitute an "Event of Default" hereunder; rather, such occurrence shall be remedied
pursuant to such Qualified Agreement and applicable legal and equitable principles taking into
account the parity status as to lien on Pledged Revenues which the counterparty to such Qualified
Agreement enjoys as to Parity Contract Obligations only, relative to that of the Bondholders and
their rights to payments hereunder.
For purposes of Section 5.02(A) and (B) hereof, no effect shall be given to any payments
made under any Bond Insurance Policy.
Any Holder of Bonds issued under the provisions hereof or any trustee acting for the
Holders of such Bonds may, either at law or in equity, by suit, action, mandamus or other
proceedings in any court of competent jurisdiction, protect and enforce any and all rights,
including the right to the appointment of a receiver, existing under State or federal law, or
granted and contained herein, and may enforce and compel the performance of all duties
required herein or by any applicable law to be performed by the City or by any officer thereof.
Nothing herein, however, shall be construed to grant to any Holder of the Bonds any
lien on any property of the City, except the Pledged Revenues.
The foregoing notwithstanding:
(i) No remedy conferred upon or reserved to the Bondholders is intended to
be exclusive of any other remedy, but each remedy shall be cumulative and shall be in
addition to any other remedy given to the Bondholders hereunder.
(ii) No delay or omission to exercise any right or power accruing upon any
default or Event of Default shall impair any such right or power or shall be construed to
be a waiver of any such default or acquiescence therein, and every such right and power
may be exercised as often as may be deemed expedient.
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(iii) No waiver of any default or Event of Default hereunder by the
Bondholders shall extend to or shall affect any subsequent default or Event of Default or
shall impair any rights or remedies consequent thereon.
(iv) Acceleration of the payment of principal of and interest on the Bonds
shall not be a remedy hereunder in the case of an Event of Default.
Upon the occurrence of an Event of Default, and upon the filing of a suit or other
commencement of judicial proceedings to enforce the rights of the Bondholders under this
Resolution, the Bondholders shall be entitled, as a matter of right, to the appointment of a
receiver or receivers of the System and the funds pending such proceedings, with such powers
as the court making such appointment shall confer.
Notwithstanding any provision of this Resolution to the contrary, for all purposes of this
Section 5.02, except the giving of notice of any Event of Default to the Holder of the Bonds, any
Insurer shall be deemed to be the Holder of the Bonds it has insured,unless otherwise provided
in the Supplemental Resolution pursuant to which such insured Bonds are issued.
On the occurrence of an Event of Default, to the extent such rights may then lawfully be
waived, neither the City nor anyone claiming through or under it, shall set up, claim or seek to
take advantage of any stay, extension or redemption laws now or hereafter in force, in order to
prevent or hinder the enforcement of this Resolution, and the City, for itself and all who may
claim through or under it, hereby waives, to the extent it may lawfully do so, the benefit of all
such laws and all right of redemption to which it may be entitled.
Within 30 days of knowledge thereof, both the City and the Paying Agent shall provide
notice to any and all Insurers of Bonds of the occurrence of any Event of Default.
The respective Insurers of Bonds shall be included as a party in interest and as a party
entitled to (i) notify the City or any applicable receiver of the occurrence of an Event of Default,
and (ii) request the receiver to intervene in judicial proceedings that affect the Bonds or the
security therefor. The receiver is required to accept notice of default from each Insurer of
Bonds.
Upon the occurrence and continuance of an Event of Default, the Insurers of Bonds in
default shall be entitled to control and direct the enforcement of all rights and remedies granted
to the Bondholders insured by the Insurer under this Resolution, and the Insurers of Bonds in
default shall also be entitled to approve all waivers of events of default related to the insured
Bonds, subject to any provisions in the Supplemental Resolution which is adopted and which
governs the issuance of such insured Bonds.
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ARTICLE VI
MISCELLANEOUS
Section 6.01 Amending and Supplementing of Resolution without Consent of
Holders of Bonds. The City, from time to time and at any time and without the consent or
concurrence of any Holder of any Bonds, may adopt a Supplemental Resolution amendatory
hereof or supplemental hereto if the provisions of such Supplemental Resolution shall not
materially adversely affect the rights of the Holders of the Bonds then Outstanding, for any one
or more of the following purposes:
(A) To make any changes or corrections in this Resolution as to which the City shall
have been advised by Bond Counsel that are required for the purpose of curing or correcting
any ambiguity or defective or inconsistent provisions or omission or mistake or manifest error
contained in this Resolution, or to insert in this Resolution such provisions clarifying matters or
questions arising under this Resolution as are necessary or desirable;
(B) To add additional covenants and agreements of the City for the purpose of
further securing the payments of the Bonds and any Parity Contract Obligations;
(C) To surrender any right, power or privilege reserved to or conferred upon the
City by the terms of this Resolution;
(D) To confirm, as further assurance, any lien, pledge or charge or the subjection to
any lien, pledge or charge,created or to be created by the provisions of this Resolution;
(E) To grant to or confer upon the Holders or any Qualified Agreement Provider any
additional right, remedies, powers, authority or security that lawfully may be granted to or
conferred upon them;
(F) To assure compliance with federal "arbitrage" provisions in effect from time to
time;
(G) To provide such changes as may be necessary in order to adjust the terms hereof
(but not including the provisions of Section 5.01(E) and Section 5.01(Q) hereof) so as to facilitate
the issuance of Variable Rate Bonds, Option Bonds, the execution of any Qualified Agreement,
or to obtain a Credit Facility;
(H) To provide for the combination of the System with any other utility provided the
conditions set forth in Section 6.05 hereof are satisfied;
(I) To provide for the transfer of the ownership and/or operation of the System
pursuant to a governmental reorganization as set forth in Section 6.04 hereof;
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(J) To facilitate the issuance of utility cost containment bonds by some legal entity
other than the City to be secured by a "utility project charge" or the like as contemplated in
Section 6.06 hereof;
(K) To modify any of the provisions of this Resolution in any other aspects provided
that such modifications shall not be effective until after the Bonds Outstanding at the time such
Supplemental Resolution is adopted shall cease to be Outstanding, or until the holders thereof
consent thereto pursuant to Section 6.02 hereof, and any Bonds issued subsequent to any such
modification shall contain a specific reference to the modifications contained in such
Supplemental Resolution.
(L) To amend Section 6.10 hereof to make covenants relating to Build America
Bonds, if appropriate.
Except for Supplemental Resolutions providing for the issuance of Bonds pursuant
hereto, the City shall not adopt any Supplemental Resolution authorized by the foregoing
provisions of this Section unless, in the opinion of Bond Counsel, the adoption of such
Supplemental Resolution is permitted by the foregoing provisions of this Section.
Any Insurers of the Bonds shall be provided with a full transcript of all proceedings
relating to the execution of any such amendment or supplement.
Section 6.02 Amendment of Resolution with Consent of Holders of Bonds. Except
as provided in Section 6.01 hereof, no material modification or amendment of this Resolution or
of any resolution supplemental hereto shall be made without the consent in writing of the
Holders of fifty-one percent (51%) or more in the principal amount of the Bonds of each Series
so affected and then Outstanding and any Qualified Agreement Provider; provided, however,
written consent by an underwriter of Bonds who intends to resell the Bonds to the public may
not be counted towards meeting the fifty-one percent (51%) requirement. For purposes of this
Section, so long as legally permitted, to the extent any Bonds are insured by a Bond Insurance
Policy or are secured by a Credit Facility and such Bonds are then rated in as high a rating
category as the rating category in which such Bonds were rated at the time of initial issuance
and delivery thereof by either S&P, Moody's or Fitch or successors and assigns, then the consent
of the Insurer or Insurers of such Bond Insurance Policy or the issuer or issuers of such letter of
credit shall be deemed to constitute the consent of the Holder of such Bonds. No modification
or amendment shall permit a change in the maturity of such Bonds or a reduction in the rate of
interest thereon or in the amount of the principal obligation thereof or reduce the percentage of
the Holders of the Bonds required to consent to any material modification or amendment hereof
without the consent of the Holder or Holders of all such obligations. For purposes of the
immediately preceding sentence only, the issuer or issuers of a Bond Insurance Policy or a
Credit Facility shall not consent on behalf of the Holders of the Bonds. No amendment or
supplement pursuant to this Section 6.02 (but not including Section 6.01 hereof) shall be made
without the consent of each of the Insurers of Bonds, if any.
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Section 6.03 Defeasance. The covenants and obligations of the City shall be defeased
and discharged under terms of this Resolution as follows:
(A) If the City shall pay or cause to be paid, or there shall otherwise be paid, to any
Qualified Agreement Provider any and all Parity Contract Obligations and to the Holders of all
Bonds the principal, redemption premium, if any, and interest due or to become due thereon, at
the times and in the manner stipulated herein, then the pledge of the Pledged Revenues and all
covenants, agreements and other obligations of the City to any Qualified Agreement Provider
and the Bondholders shall thereupon cease, terminate and become void and be discharged and
satisfied. If the City shall pay or cause to be paid, or there shall otherwise be paid, to any
Qualified Agreement Provider any and all Parity Contract Obligations and to the Holders of
any Outstanding Bonds the principal, redemption premium, if any, and interest due or to
become due thereon, at the times and in the manner stipulated herein, such Parity Contract
Obligations and such Bonds shall cease to be entitled to any lien, benefit or security under this
Resolution, and all covenants, agreements and obligations of the City to any Qualified
Agreement Provider and the Holders of such Bonds shall thereupon cease, terminate and
become void and be discharged and satisfied.
(B) The Bonds, redemption premium, if any, and interest due or to become due for
the payment or redemption of which moneys shall have been set aside and shall be held in trust
(through deposit by the City of funds for such payment or redemption or otherwise) at the
maturity or redemption date thereof shall be deemed to have been paid within the meaning and
with the effect expressed in paragraph (A) of this Section 6.03. Subject to the provisions of
paragraph (C) and (D) of this Section 6.03, any Outstanding Bonds shall, prior to the maturity or
redemption date thereof, be deemed to have been paid within the meaning and with the effect
expressed in paragraph (A) of this Section if(i) in case any of said Bonds are to be redeemed on
any date prior to their maturity, the City shall have given to the escrow agent instructions
accepted in writing by the escrow agent to notify Holders of Outstanding Bonds in the manner
required herein of the redemption of such Bonds on said date, and (ii) there shall have been
deposited with the escrow agent either moneys in an amount which shall be sufficient, or
Acquired Obligations (including any Acquired Obligations issued or held in book-entry form
on the books of the Department of the Treasury of the United States) the principal of and the
interest on which when due will provide moneys which, together with the moneys, if any,
deposited with the escrow agent at the same time, shall be sufficient, to pay when due the
principal of and premium, if any, and interest due and to become due on said Bonds on or prior
to the redemption date or maturity date thereof, as the case may be. In the event of a
defeasance pursuant to clause (ii) above, the City shall cause to be delivered a verification
report of an independent nationally recognized certified public accountant or such other firm
recognized as providing the skill and expertise necessary to deliver a verification report. If a
forward supply contract is employed in connection with the refunding, (i) such verification
report shall expressly state that the adequacy of the escrow to accomplish the refunding project
relies solely on the initial escrowed investments and the maturing principal thereof and interest
income thereon and does not assume performance under or compliance with the forward
supply contract, and (ii) the applicable escrow agreement shall provide that in the event of any
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discrepancy or difference between the terms of the forward supply contract and the escrow
agreement and this Resolution, the terms of the escrow agreement and this Resolution shall be
controlling.
(C) For purposes of determining whether Variable Rate Bonds shall be deemed to
have been paid prior to the maturity or redemption date thereof, as the case may be, by the
deposit of moneys, or Acquired Obligations and moneys, if any, in accordance with paragraph
(B) of this Section 6.03, the interest to come due on such Variable Rate Bonds on or prior to the
maturity date or redemption date thereof, as the case may be, shall be calculated assuming that
interest thereon will accrue at the maximum rate of interest such Variable Rate Bonds may bear
pursuant to the Supplemental Resolution authorizing the issuance thereof, or the maximum rate
permitted by law if such Supplemental Resolution provides no maximum rate of interest.
(D) Option Bonds shall be deemed to have been paid in accordance with the second
sentence of paragraph (B) of this Section 6.03 only if, in addition to satisfying the requirements
of clauses (i) and (ii) of such sentence, there shall have been deposited with the escrow agent
moneys in an amount which shall be sufficient to pay when due the maximum amount of
principal of and redemption premium, if any, and interest on such Bonds which could become
payable to the Holders of such Bonds upon the exercise of any options provided to the Holders
of such Bonds; provided, however, that if, at the time a deposit is made with the escrow agent
pursuant to paragraph (B) of this Section 6.03, the options originally exercisable by the Holder
of an Option Bond are no longer exercisable, such Bond shall not be considered an Option Bond
for purposes of this paragraph (D). If any portion of the moneys deposited with the escrow
agent for the payment of the principal of and redemption premium, if any, and interest on
Option Bonds is not required for such purpose, the escrow agent shall, if requested by the City,
pay the amount of such excess to the City free and clear of any trust, lien, security interest,
pledge or assignment securing said Bonds or otherwise existing under the Resolution.
Section 6.04 Governmental Reorganization. Notwithstanding any other provisions of
this Resolution, this Resolution shall not prevent any lawful reorganization of the governmental
structure of the City, including a merger or consolidation of the City with another public body
or the transfer of a public function of the City to another public body, provided that any
reorganization which affects the System shall provide that the System shall be continued as a
single enterprise and that any public body which succeeds to the ownership and operation of
the System shall also assume all rights, powers, obligations, duties and liabilities of the City
under this Resolution and pertaining to all Bonds and any Qualified Agreement.
Section 6.05 Additional Utility Functions. The City may expand the utility functions
of the System as they exist on the date hereof as permitted in the definition of "System"
contained herein, provided that the City has received the prior written consent of any Insurer
(provided such Insurer is not in default of its obligations under its Credit Facility), and adopted
resolutions of the City to the effect that, based upon such certificates and opinions of its
Consulting Engineers, independent certified public accountants, Bond Counsel, Financial
Advisor or other Qualified Independent Consultants as the City shall deem necessary, desirable
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or appropriate, the addition of such utility functions (a) will not impair the ability of the City to
comply with the provisions of this Resolution, and (b) will not materially adversely affect the
rights of the Holders of the Bonds.
Section 6.06 [Reserved.]
Section 6.07 Qualified Agreements. Any payments received by the City from a
Qualified Agreement Provider shall constitute Gross Revenues hereunder. Any payments to a
Qualified Agreement Provider under a Qualified Agreement so designated by the City, can
constitute Parity Contract Obligations or Subordinated Debt. Notwithstanding the foregoing,
termination payments, indemnification payment, or other fees to be paid by the City to a
Qualified Agreement Provider under a Qualified Agreement and which do not constitute
regularly scheduled payments determined by reference to interest on a notional amount may
only constitute Subordinated Debt, and may not constitute Parity Contract Obligations.
The City may enter into one or more Qualified Agreements with respect to one or more
Series of Bonds (or portions thereof); provided, however, that if such Qualified Agreement is
not entered into at the time of initial issuance of the Series of Bonds to which it relates, the
requirements of Section 5.01(Q)(1) hereof must be met, applying the same as if$1.00 in principal
amount of Additional Parity Obligations are being issued as of the effective date of such
Qualified Agreement.
Section 6.08 Payments to Credit Facility; Rights of Credit Facility Issuers. (A) In
connection with any Bonds, the City may obtain or cause to be obtained one or more Credit
Facilities and agree with any Credit Facility Issuer to reimburse such City directly for amounts
paid under the terms of such Credit Facility, together with interest thereof; provided, however,
that no obligation to reimburse a Credit Facility Issuer shall be created, for purposes of this
Resolution, until amounts are paid under such Credit Facility. Such payments are referred to
herein as "Reimbursement Obligations." Any Reimbursement Obligation may be secured by a
pledge of and a lien on the Pledged Revenues on a subordinate basis to the lien created herein
in favor of the Holders of the Bonds and any Qualified Agreement Provider. Any such
Reimbursement Obligation shall be deemed to be a part of the Series to which the Credit
Facility which gave rise to such Reimbursement Obligation relates. Payments to reimburse the
provider of a Credit Facility shall constitute Subordinated Debt.
(B) Notwithstanding any provision hereof granting consent and approval rights to a
Credit Facility Provider, if such Credit Facility Provider shall be in default under the terms of
the Credit Facility, the rights and powers shall be restricted as set forth in the Supplemental
Resolution relating to the Bonds secured by such Credit Facility.
Section 6.09 Capital Appreciation Bonds. For the purposes of (i) receiving payment
of the redemption price of a Capital Appreciation Bond if redeemed prior to maturity, (ii)
computing Bond Service Requirement, and (iii) computing the amount of Holders required for
any notice, consent, request or demand hereunder for any purpose whatsoever, the principal
amount of a Capital Appreciation Bond shall be deemed to be its Accreted Value.
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Section 6.10 Tax Covenants.
(A) The City covenants with the Holders of each Series of Bonds (other than Taxable
Bonds) that it shall not use the proceeds of such Series of Bonds in any manner which would
cause the interest on such Series of Bonds to be or become includable in the gross income of the
Holder thereof for federal income tax purposes.
(B) The City covenants with the Holders of each Series of Bonds (other than Taxable
Bonds) that neither the City nor any Person under its control or direction will make any use of
the proceeds of such Series of Bonds (or amounts deemed to be proceeds under the Code) in
any manner which would cause such Series of Bonds to be "arbitrage bonds" within the
meaning of Section 148 of the Code and neither the City nor any other Person shall do any act or
fail to do any act which would cause the interest on such Series of Bonds to become includable
in the gross income of the Holder thereof for federal income tax purposes.
(C) The City hereby covenants with the Holders of each Series of Bonds (other than
Taxable Bonds) that it will comply with all provisions of the Code necessary to maintain the
exclusion of interest on the Bonds from the gross income of the Holder thereof for federal
income tax purposes, including, in particular, the payment of any amount required to be
rebated to the U.S. Treasury pursuant to the Code.
(D) The City may, if it so elects, issue one or more Series of Taxable Bonds the
interest on which is (or may be) includable in the gross income of the Holder thereof for federal
income tax purposes, so long as each Bond of such Series states in the body thereof that interest
payable thereon is (or may be) subject to federal income taxation and provided that the issuance
thereof will not cause the interest on any other Bonds theretofore issued hereunder to be or
become includable in the gross income of the Holder thereof for federal income tax purposes.
The covenants set forth in paragraphs (A), (B) and (C) above shall not apply to any Taxable
Bonds.
(E) There is hereby created and established a fund to be known as the "City of Ocoee
Utilities System Revenue Bonds Rebate Fund" (the "Rebate Fund"), and a separate account
therein for each Series of Bonds. The City shall deposit into the appropriate account in the
Rebate Fund, from investment earnings on moneys deposited in the other funds and accounts
created hereunder, or from any other legally available funds of the City, an amount equal to the
Rebate Amount for such Rebate Year. The City shall use such moneys deposited in the
appropriate account in the Rebate Fund only for the payment of the Rebate Amount to the
United States as required by this Section 6.10. In complying with the foregoing, the City may
rely upon any instructions or opinions from Bond Counsel.
If any amount shall remain in the Rebate Fund after payment in full of all Bonds issued
hereunder that are not Taxable Bonds and after payment in full of the Rebate Amount to the
United States in accordance with the terms hereof, such amounts shall be available to the City
for any lawful purpose of the System.
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The Rebate Fund shall be held separate and apart from all other funds and accounts of
the City, shall not be impressed with a lien in favor of the Bondholders and the moneys therein
shall be available for use only as herein provided.
Section 6.11 Bond Anticipation Notes Authorized for Interim Financing. Pursuant
to authority granted by Section 215.431, Florida Statutes, the City is authorized to issue Bond
Anticipation Notes, in one or more series, from time to time for the purposes authorized by this
Resolution, and for the purpose of obtaining interim financing. Prior to the sale of Bonds
authorized by this Resolution, the City may issue its Bond Anticipation Notes as provided
herein and as provided in Section 215.431, Florida Statutes. Any such Bond Anticipation Notes
authorized by the City shall be issued upon the adoption of a resolution by the City specifying
the amount of Bond Anticipation Notes to be issued, the series designation, the maturity of such
Bond Anticipation Notes, the denomination, date and the rate of interest which shall be borne
by such Bond Anticipation Notes which shall not be at a rate greater than the highest rate
authorized by law. Any such Bond Anticipation Notes issued may be sold in the manner
provided by Section 215.431, Florida Statutes and shall satisfy all other requirements contained
therein, including those related to the maturity of such Bond Anticipation Notes.
Section 6.12 Additional Rights to Insurers. All notices required to be given to any
party hereunder shall also be given to any Insurer. Pursuant to one or more Supplemental
Resolutions, the City may provide additional rights, covenants, agreements and restrictions
relating to any Insurer and any Bond Insurance Policy.
Section 6.13 Severability. If any one or more of the covenants, agreements or
provisions of this Resolution should be held contrary to any express provision of law or
contrary to the policy of express law, though not expressly prohibited, or against public policy,
or shall for any reason whatsoever be held invalid or shall in any manner be held to adversely
affect the validity of the Bonds, then such covenants, agreements or provisions shall be null and
void and shall be deemed separate from the remaining covenants, agreements or provisions of
this Resolution or of the Bonds issued hereunder.
Section 6.14 Sale of Bonds. The Bonds may be issued and sold at public or private
sale at one time or in installments from time to time and at such price or prices as shall be
consistent with the provisions of the requirements of this Resolution and other applicable
provisions of law.
Section 6.15 General Authority. The members of the Commission of the City and the
City's officers, attorneys and other agents and employees are hereby authorized to perform all
acts and things required of them by this Resolution or desirable or consistent with the
requirements hereof for the full, punctual and complete performance of all of the terms,
covenants and agreements contained in the Bonds and this Resolution, and they are hereby
authorized to execute and deliver all documents which shall be required by Bond Counsel to
effectuate the sale of the Bonds to said initial purchasers.
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Section 6.16 No Third Party Beneficiaries. Except such other Persons as may be
expressly described herein, in the Bonds, or in a Qualified Agreement, nothing in this
Resolution, or in the Bonds, expressed or implied, is intended or shall be construed to confer
upon any Person, other than the City, an Insurer and the Holders, any right, remedy or claim,
legal or equitable, under and by reason of this Resolution or any provision hereof, or of the
Bonds or any Qualified Agreement, all provisions hereof and thereof being intended to be and
being for the sole and exclusive benefit of the City, an Insurer and the Persons who shall from
time to time be the Holders and any Qualified Agreement Provider.
Section 6.17 No Personal Liability. Neither the members of the Commission of the
City, any Person executing the Bonds, nor employees of the City shall be personally liable
therefor or be subject to any personal liability or accountability by reason of the issuance
thereof.
Section 6.18 Repeal of Inconsistent Instruments. All resolutions or parts or
resolutions in conflict herewith are hereby repealed to the extent of such conflict.
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Section 6.19 Effective Date. This Resolution shall become effective immediately upon
(i) its adoption as provided by law, and (ii) at such time as the Series 2012 Note and Series 2013
Note are no longer Outstanding.
Passed and Adopted this 1st day of November, 2016, at a regular meeting duly called
and held.
CITY COMMISSION OF THE CITY OF
e OE . •
(SEAL) !NO `'
Rusty Johns l yor
ATTEST:
•Jtitze
Melanie Sibbitt, City Clerk
FOR USE AND RELIANCE ONLY BY THE APPROVED BY THE OCOEE CITY
CITY OF OCOEE, APPROVED AS TO FORM COMMISSION AT A MEETING HELD ON
AND LEGALITY, THIS 1ST DAY OF NOVEMBER 1, 2016,UNDER AGENDA ITEM
NOVEMBER, 2016. NO. Co a
CITY • O;.
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