08/13/2013 Ordinances 9434 ORDINANCE NO. 9434
AN ORDINANCE OF THE CITY OF GRAND ISLAND, NEBRASKA, AUTHORIZING THE
ISSUANCE OF SEWER SYSTEM REVENUE AND REFUNDING BONDS, SERIES 2013, OF THE
CITY OF GRAND ISLAND, NEBRASKA, IN THE PRINCIPAL AMOUNT NOT TO EXCEED
FORTY MILLION DOLLARS ($40,000,000) FOR THE PURPOSES OF REFUNDING THE CITY'S
OUTSTANDING SEWER SYSTEM REVENUE AND REFUNDING BONDS, SERIES 2003, PAYING
A PORTION OF THE COSTS OF CONSTRUCTING ADDITIONS AND IMPROVEMENTS TO THE
CITY'S SEWER SYSTEM, FUNDING A DEBT SERVICE RESERVE FOR SUCH BONDS AND
PAYING COSTS OF ISSUANCE; PRESCRIBING THE FORM, TERMS AND DETAILS OF SAID
BONDS; PLEDGING AND HYPOTHECATING THE REVENUES OF THE SANITARY SEWER
SYSTEM OF SAID CITY FOR THE PAYMENT OF SAID BONDS AND INTEREST THEREON
AND PROVIDING FOR THE COLLECTION, SEGREGATION AND APPLICATION OF THE
REVENUE OF SAID SANITARY SEWER SYSTEM; ENTERING INTO A CONTRACT WITH THE
REGISTERED OWNERS OF SAID BONDS; AUTHORIZING THE SALE OF SAID BONDS AND
DELEGATING AUTHORITY TO OFFICERS OF THE CITY TO DETERMINE FINAL PRICING
TERMS; PROVIDING FOR THE APPLICATION OF THE PROCEEDS OF SAID BONDS AND THE
REDEMPTION OF THE SERIES 2003 BONDS; AUTHORIZING THE DELIVERY OF SAID BONDS
TO THE PURCHASER AND PROVIDING FOR THE PUBLICATION OF THE ORDINANCE IN
PAMPHLET FORM.
BE IT ORDAINED by the Mayor and Council of the City of Grand Island, Nebraska, as
follows:
Section 1. The Mayor and City Council of the City of Grand Island, Nebraska (the "City")
hereby find and determine:
(a) The City owns and operates a wastewater treatment plant and sanitary
sewer system (such plant and system, together with all additions and improvements
thereto hereafter acquired and constructed are herein referred to as the "Sewer System")
which represents a revenue-producing undertaking of the City;
(b)The City has issued and outstanding the following revenue bonds which are
a lien upon and secured by a pledge of the Revenues of the Sewer System:
Sewer System Revenue and Refunding Bonds, Series 2003, Date of
Original Issue — June 25, 2003, issued pursuant to Ordinance No. 8811 of
the City, of which $1,420,000 in principal amount are presently
outstanding(the "Refunded Bonds");
(c) That it is necessary and advisable for the City to refund the Refunded
Bonds on the Redemption Date, as hereinafter defined;
(d) That it is necessary and advisable for the City to construct additions and
improvements to the Sewer System (collectively, the "2013 Project") for which the
estimated total cost is not less than$34,000,000.
Approved as to Form • ;1%W
August 12,2013 tr Cit Mrney
ORDINANCE NO. 9434 (Cont.)
(d) The Refunded Bonds represent the only indebtedness of the City for which
the Revenues of the Sewer System have been pledged.
(1) To satisfy the funding requirements described in this Section 1, including
funding of appropriate reserves and payment of issuance costs, it is necessary for the
City to issue its Sewer System Revenue and Refunding Bonds, Series 2013, in the
aggregate principal amount not to exceed $40,000,000 pursuant to Sections10-142 and
Sections 18-1803 to 18-1805 R.R.S. Neb. 2012. All conditions, acts and things required
by law to exist or to be done precedent to the issuance of the City's Sewer System
Revenue and Refunding Bonds as provided herein, do exist and have been done and
performed in regular and due time and foiin as required by law. Said bonds will be
payable from the Revenues of the Sewer System.
Section 2. In addition to the definitions provided in parentheses elsewhere in this Ordinance,the
following definitions of terms shall apply,unless the context shall clearly indicate otherwise:
(a) the term "Revenues" shall mean all of the rates, rentals, fees and charges,
earnings and other monies, including investment income, from any source derived by
the City of Grand Island, Nebraska, through its ownership and operation of the Sewer
System.
(b) the term "Additional Bonds" shall mean any and all bonds hereafter issued
by the City pursuant to the terms of this Ordinance which are equal in lien to the 2013
Bonds, including all such bonds issued pursuant to Section 13 and refunding bonds
issued pursuant to Section 14.
(c) the term "Average Annual Debt Service Requirements" shall mean that
number computed by adding all of the principal and interest due when computed to the
absolute maturity of the bonds for which such computation is required and dividing by
the number of years remaining that the longest bond of any issue for which such
computation is required has to run to maturity. In making such computation, the
principal of any bonds for which mandatory redemptions are scheduled shall be treated
as maturing in accordance with such schedule of mandatory redemptions.
(d) the term "Deposit Securities" shall mean obligations of the United States of
America, direct or unconditionally guaranteed, including any such obligations issued in
book entry form.
(e) the term "Net Revenues" shall mean the Revenues derived by the City from
the ownership or operation of the Sewer System, including investment income, but not
including any income from the sale or other disposition of any property belonging to or
forming a part of the Sewer System, less the ordinary expenses for operating and
maintaining the Sewer System payable from the Operation and Maintenance Account
described in Section 11 of this Ordinance. Operation and Maintenance expenses for
purposes of determining "Net Revenues" shall not include depreciation, amortization of
financing expenses or interest on any bonds or other indebtedness. Net Revenues for all
purposes of this Ordinance shall be shown by an audit for the fiscal year in question as
conducted by an independent certified public accountant or firm of such accountants.
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ORDINANCE NO. 9434 (Cont.)
(g) the term "Paying Agent and Registrar" shall mean the paying agent and
registrar appointed to act as paying agent and registrar for the 2013 Bonds pursuant to
Section 4 hereof, or any successor thereto.
Section 3. For the purposes described in Section 1 of this ordinance, there shall be and there are
hereby ordered issued negotiable bonds of the City of Grand Island,Nebraska,to be designated as "Sewer
System Revenue and Refunding Bonds, Series 2013" (the "2013 Bonds") in the aggregate stated principal
amount not to exceed Forty Million Dollars ($40,000,000), with said bonds to become due in such
amounts, on such dates and bear interest at such rates per annum as shall be determined in a written
designation (separately or as part of the Bond Purchase Agreement referred to in Section 9 hereof, the
"Designation") signed by the Mayor or the City Treasurer(the"Authorized Officers") on behalf of the City
and which may be agreed to by the Underwriter(as defined herein), which Designation may also determine
the principal amount for each maturity of the Bonds, optional and mandatory redemption provisions(if any)
and pricing terms as set forth herein and other matters not specifically set forth herein, all within the
following limitations:
(a) the aggregate principal amount of the Bonds shall not exceed $40,000,000 but may be
reduced in principal amount;
(b) the true interest cost of the Bonds shall not exceed 5.25%;
(c) the longest maturity of the Bonds may not be later than September 15,2038;
(d) two or more of the principal maturities may be combined and issued as "term bonds"
and the Authorized Officers may deteinmine the mandatory sinking fund payments and
mandatory redemption amounts. Any Bonds issued as"term bonds"shall be redeemed
at a redemption price equal to 100% of the principal amount thereof plus accrued
interest thereon to the date of redemption and may be selected for redemption by any
random method of selection determined appropriate by the Paying Agent and Registrar
(as hereinafter designated)or by the Depository(as hereinafter designated).
The Authorized Officers are hereby authorized to make such determinations on behalf of the City and to
evidence the same by execution and delivery of the Designation and such determinations, when made and
agreed to by the Underwriter, shall constitute the action of the without further action of them Mayor and
City Council.
The 2013 Bonds shall be issued in fully registered foiiu in the denomination of$5,000 or any
integral multiple thereof. The date of original issue for the 2013 Bonds shall be the date of delivery
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ORDINANCE NO. 9434 (Cont.)
thereof. Interest on the 2013 Bonds, at the respective rates for each maturity, shall be payable on March
15, 2014, and semiannually thereafter on September 15 and March 15 of each year(or such other dates as
determined in the Designation, an "Interest Payment Date"), and the 2013 Bonds shall bear such interest
from the date of original issue or the most recent Interest Payment Date, whichever is later. Interest shall
be computed on the basis of a 360-day year consisting of twelve 30-day months. The interest due on each
Interest Payment Date shall be payable to the registered owners of record as of the last day of the calendar
month immediately preceding the calendar month in which the Interest Payment Date occurs (or such
other date as determined in the Designation, the "Record Date"), subject to the provisions of Section 5
hereof The 2013 Bonds shall be numbered from 1 upwards in the order of their issuance. No 2013 Bond
shall be issued originally or upon transfer or partial redemption having more than one principal maturity.
The initial bond numbering and principal amounts for each of the 2013 Bonds issued shall be as
designated by the City Treasurer as directed by the Underwriter(as defined herein). Payments of interest
due on the 2013 Bonds prior to maturity or earlier redemption shall be made by the Paying Agent and
Registrar as designated pursuant to Section 4 hereof, by mailing a check or draft in the amount due for
such interest on each Interest Payment Date to the registered owner of each 2013 Bond, as of the Record
Date for such Interest Payment Date, to such owner's registered address as shown on the books of
registration as required to be maintained in Section 4 hereof Payments of principal due at maturity or at
any date fixed for redemption prior to maturity together with any unpaid interest accrued thereon shall be
made by said Paying Agent and Registrar to the registered owners upon presentation and surrender of the
2013 Bonds to the Paying Agent and Registrar. The City and the Paying Agent and Registrar may treat
the registered owner of any 2013 Bond as the absolute owner of such 2013 Bond for the purpose of
making payments thereon and for all other purposes and neither the City nor the Paying Agent and
Registrar shall be affected by any notice or knowledge to the contrary, whether such 2013 Bond or any
installment of interest due thereon shall be overdue or not. All payments on account of interest or
principal made to the registered owner of any 2013 Bond in accordance with the terms of this Ordinance
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ORDINANCE NO. 9434 (Cont.)
shall be valid and effectual and shall be a discharge of the City and the Paying Agent and Registrar, in
respect of the liability upon the 2013 Bonds or claims for interest to the extent of the sum or sums so paid.
Section 4. Wells Fargo Bank, National Association (or such other institution as shall be set forth
in the Designation) is hereby designated as Paying Agent and Registrar for the 2013 Bonds. Said Paying
Agent and Registrar shall serve in such capacities under the terms of an agreement entitled"Paying Agent
and Registrar's Agreement" between the City and said Paying Agent and Registrar, in substantially the
form presented in connection with the adoption of the Ordinance, which form is hereby approved. The
Mayor and City Clerk are each hereby authorized to execute the Paying Agent and Registrar's Agreement
on behalf of the City in the foim presented or with such changes, modifications and completions as such
officers shall deem appropriate on behalf of the City. The Paying Agent and Registrar shall keep and
maintain for the City books for the registration and transfer of the 2013 Bonds at its principal corporate
trust office. The names and registered addresses of the registered owner or owners of the 2013 Bonds
shall at all times be recorded in such books. Any 2013 Bond may be transferred pursuant to its provisions
at the principal corporate trust office of said Paying Agent and Registrar by surrender of such bond for
cancellation, accompanied by a written instrument of transfer, in form satisfactory to said Paying Agent
and Registrar, duly executed by the registered owner in person or by such owner's duly authorized agent,
and thereupon the Paying Agent and Registrar on behalf of the City will deliver at its office (or send by
registered mail to the transferee owner or owners thereof at such transferee owner's or owners' risk and
expense), registered in the name of such transferee owner or owners, a new 2013 Bond or 2013 Bonds of
the same interest rate, aggregate principal amount and maturity. To the extent of the denominations
authorized for the 2013 Bonds by this Ordinance, one 2013 Bond may be transferred for several such
2013 Bonds of the same interest rate and maturity, and for a like aggregate principal amount, and several
such 2013 Bonds may be transferred for one or several such 2013 Bonds, respectively, of the same
interest rate and maturity and for a like aggregate principal amount. In every case of transfer of a 2013
Bond, the surrendered 2013 Bond or 2013 Bonds shall be canceled and destroyed. All 2013 Bonds issued
upon transfer of the 2013 Bonds so surrendered shall be valid obligations of the City evidencing the same
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ORDINANCE NO. 9434 (Cont.)
obligations as the 2013 Bonds surrendered and shall be entitled to all the benefits and protection of this
Ordinance to the same extent as the 2013 Bonds upon transfer of which they were delivered. The City and
said Paying Agent and Registrar shall not be required to transfer any 2013 Bond during any period from
any Record Date until its immediately following Interest Payment Date or to transfer any 2013 Bond
called for redemption for a period of 30 days next preceding the date fixed for redemption.
Section 5. In the event that payments of interest due on the 2013 Bonds on an Interest Payment
Date are not timely made, such interest shall cease to be payable to the registered owners as of the Record
Date for such Interest Payment Date and shall be payable to the registered owners of the 2013 Bonds as of
a special date of record for payment of such defaulted interest as shall be designated by the Paying Agent
and Registrar whenever monies for the purpose of paying such defaulted interest become available.
Section 6. The 2013 Bonds which are subject to mandatory sinking fund redemption as may be
determined in the Designation, shall be redeemed at a redemption price equal to 100% of the principal
amount thereof and accrued interest to the redemption date, and in the principal amounts, as may be
deteimined in the Designation.
The 2013 Bonds shall be subject to redemption, in whole or in part, prior to maturity at any time
on or after the tenth anniversary of the date of delivery thereof, or at any time thereafter (or such other
date or dates as determined in the Designation), at the principal amount thereof(or such other redemption
price as detei mined in the Designation) together with accrued interest on the principal amount redeemed
to the date fixed for redemption. Such optional redemption shall be made from time to time as shall be
directed by the Mayor and Council of the City. The City may select the 2013 Bonds for optional
redemption in its sole discretion. The 2013 Bonds shall be redeemed only in amounts of $5,000 or
integral multiples thereof. Any 2013 Bond redeemed in part only shall be surrendered to said Paying
Agent and Registrar in exchange for a new 2013 Bond evidencing the unredeemed principal thereof.
Notice of redemption of any 2013 Bond called for redemption shall be given at the direction of the City
(except in the case of term bonds)by said Paying Agent and Registrar by mail not less than 30 days prior
to the date fixed for redemption, first class, postage prepaid, sent to the registered owner of such 2013
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ORDINANCE NO. 9434 (Cont.)
Bond at said owner's registered address. Such notice shall designate the 2013 Bond or 2013 Bonds to be
redeemed by maturity or otherwise, the date of original issue and the date fixed for redemption and shall
state that such 2013 Bond or 2013 Bonds are to be presented for prepayment at the principal corporate
trust office of said Paying Agent and Registrar. In case of any 2013 Bond partially redeemed, such notice
shall specify the portion of the principal amount of such bond to be redeemed.No defect in the mailing of
notice for any 2013 Bond shall affect the sufficiency of the proceedings of the City designating the 2013
Bonds called for redemption or the effectiveness of such call for 2013 Bonds for which notice by mail has
been properly given and the City shall have the right to further direct notice of redemption for any such
2013 Bond for which defective notice has been given.
Section 7. If the date for payment of the principal of or interest on the 2013 Bonds shall be a
Saturday, Sunday, legal holiday or a day on which banking institutions in the city where the principal
corporate trust office of the Paying Agent and Registrar is located are authorized by law or executive
order to close, then the date for such payment shall be the next succeeding day which is not a Saturday,
Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on
such day shall have the same force and effect as if made on the nominal date of payment.
Section 8. The 2013 Bonds shall be in substantially the following form:
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ORDINANCE NO. 9434 (Cont.)
UNITED STATES OF AMERICA
STATE OF NEBRASKA
COUNTY OF HALL
CITY OF GRAND ISLAND
SEWER SYSTEM REVENUE AND REFUNDING BOND
SERIES 2013
No. R- $
Date of
Interest Rate Maturity Date Original Issue CUSIP NUMBER
September 15, ,2013
Registered Owner: CEDE&CO.
Principal Amount: DOLLARS
KNOW ALL PERSONS BY THESE PRESENTS: That the City of Grand Island, in the County
of Hall, in the State of Nebraska (the "City"), hereby acknowledges itself to owe and for value received
promises to pay,but only from the special sources hereinafter described,to the registered owner specified
above, or registered assigns, the principal amount specified above in lawful money of the United States of
America on the date of maturity specified above with interest thereon to maturity (or earlier redemption)
from the date of original issue or most recent Interest Payment Date, whichever is later, at the rate per
annum specified above, payable March 15, 2014, and semiannually thereafter on September 15 and
March 15 of each year(each, an"Interest Payment Date"). Such interest shall be computed on the basis of
a 360-day year consisting of twelve 30 day months. The principal of this bond together with interest
thereon unpaid and accrued at maturity(or earlier redemption) is payable upon presentation and surrender
of this bond at the principal corporate trust office of Wells Fargo Bank, National Association, as Paying
Agent and Registrar, in Minneapolis, Minnesota. Interest on this bond due prior to maturity or earlier
redemption will be paid on each Interest Payment Date by a check or draft mailed by the Paying Agent
and Registrar to the registered owner of this bond, as shown on the books of record maintained by the
Paying Agent and Registrar, at the close of business on the last day of the month immediately preceding
the month in which the Interest Payment Date occurs, to such owner's address as shown on such books
and records. Any interest not so timely paid shall cease to be payable to the person entitled thereto as of
the record date such interest was payable, and shall be payable to the person who is the registered owner
of this bond(or of one or more predecessor bonds hereto) on such special record date for payment of such
defaulted interest as shall be fixed by the Paying Agent and Registrar whenever monies for such purpose
become available.
This bond is one of an issue of fully registered bonds of the total principal amount of
Dollars ($ ) of even date and like tenor, except as of
the date of maturity, rate of interest and denomination, (the "Series 2013 Bonds") which were issued by
the City for the purposes of(a) refunding the City's outstanding Revenue and Refunding Bonds, Series
2003, in the aggregate principal amount outstanding of $1,420,000, (b) paying costs of constructing
improvements to the City's Sewer System (as defined below), (c) funding a portion of the debt service
reserve sub-account for the bonds and (d) paying costs of issuance and is issued pursuant to the terms of
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ORDINANCE NO. 9434 (Cont.)
an ordinance (the "Ordinance")passed and approved by the Mayor and Council of the City in accordance
with and under the provisions of Sections 10-142 and 18-1803 to 18-1805,R.R.S.Neb. 2012.
Any or all of the bonds of said issue maturing on or after , 20 , are subject to
redemption at the option of the City, in whole or in part, on , 20 , or at any time thereafter,
at par together with accrued interest on the principal amount redeemed to the date fixed for redemption.
Such optional redemption shall be made from time to time as shall be directed by the Mayor and Council
of the City. The City may select the Series 2013 Bonds for optional redemption in its sole discretion.
Notice of redemption shall be given by mail to the registered owner of any Series 2013 Bond called for
redemption in the manner specified in the Ordinance authorizing said issue of bonds. Individual bonds
may be redeemed in part but only in the amount of$5,000 or integral multiples thereof.
This bond is transferable by the registered owner or such owner's attorney duly authorized in
writing at the principal corporate trust office of the Paying Agent and Registrar upon surrender and
cancellation of this bond, and thereupon a new bond or bonds of the same aggregate principal amount,
interest rate and maturity will be issued to the transferee as provided in the Ordinance, subject to the
limitations therein prescribed. The City, the Paying Agent and Registrar and any other person may treat
the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving
payment due hereunder and for all other purposes and shall not be affected by any notice to the contrary,
whether this bond be overdue or not.
If the day for payment of the principal of or interest on this bond shall be a Saturday, Sunday,
legal holiday or a day on which banking institutions in the city where the principal corporate trust office
of the Paying Agent and Registrar is located are authorized by law or executive order to close, then the
date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or
a day on which such banking institutions are authorized to close, and payment on such date shall have the
same force and effect as if made on the nominal date of payment.
The Revenues (as such term is defined in the Ordinance) of the wastewater treatment plant and
sanitary sewer system of the City of Grand Island, Nebraska, including all improvements and additions
thereto hereafter constructed or acquired, (the "Sewer System") are pledged and hypothecated by the City
for the payment of this bond and the other Series 2013 Bonds and for the payment of any additional bonds
of equal priority issued in accordance with the teiuis of the Ordinance. The Series 2013 Bonds are a lien
only upon said Revenues and are not general obligations of the City of Grand Island,Nebraska.
The Ordinance sets forth the covenants and obligations of the City with respect to the Sewer
System and the applications of the Revenues thereof, which Revenues under the terms of the Ordinance
are required to be deposited to the "Grand Island Sewer System Fund" (as previously established) and
disbursed to pay costs of operation and maintenance of the Sewer System, make payments of principal
and interest on the Series 2013 Bonds and any additional bonds of equal priority with the Series 2013
Bonds and other payments as specified in the Ordinance. The Ordinance also designates the terms and
conditions under which additional bonds of equal priority with the Series 2013 Bonds may be issued. The
Ordinance also designates the terms and conditions upon which this bond shall cease to be entitled to any
lien, benefit or security under the Ordinance and all covenants, agreements and obligations of the City
under the Ordinance may be discharged and satisfied at or prior to the maturity or redemption of this bond
if monies or certain specified securities shall have been deposited with a trustee bank. In the Ordinance
the City also reserves the right to issue bonds or notes junior in lien to the Series 2013 Bonds and any
additional bonds of equal priority to the Series 2013 Bonds, the principal and interest of which shall be
payable from monies in the "Surplus Account" of the Grand Island Sewer System Fund as described in
the Ordinance.
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ORDINANCE NO. 9434 (Cont.)
IT IS HEREBY CERTIFIED AND WARRANTED that all conditions, acts and things required
by law to exist or to be done precedent to and in the issuance of this bond did exist, did happen and were
done and performed in regular and due foam and time as provided by law.
AS PROVIDED IN THE ORDINANCE REFERRED TO HEREIN, UNTIL THE
TERMINATION OF THE SYSTEM OF BOOK-ENTRY-ONLY TRANSFERS THROUGH THE
DEPOSITORY TRUST COMPANY, NEW YORK, NEW YORK (TOGETHER WITH ANY
SUCCESSOR SECURITIES DEPOSITORY APPOINTED PURSUANT TO THE ORDINANCE,
"DTC"), AND NOTWITHSTANDING ANY OTHER PROVISIONS OF THE ORDINANCE TO THE
CONTRARY, A PORTION OF THE PRINCIPAL AMOUNT OF THIS BOND MAY BE PAID OR
REDEEMED WITHOUT SURRENDER HEREOF TO THE PAYING AGENT AND REGISTRAR.
DTC OR A NOMINEE, TRANSFEREE OR ASSIGNEE OF DTC OF THIS BOND MAY NOT RELY
UPON THE PRINCIPAL AMOUNT INDICATED HEREON AS THE PRINCIPAL AMOUNT
HEREOF OUTSTANDING AND UNPAID. THE PRINCIPAL AMOUNT HEREOF OUTSTANDING
AND UNPAID SHALL FOR ALL PURPOSES BE THE AMOUNT DETERMINED IN THE MANNER
PROVIDED IN THE ORDINANCE.
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED OFFICER OF DTC (A) TO
THE PAYING AGENT AND REGISTRAR FOR REGISTRATION OF TRANSFER OR EXCHANGE
OR (B) TO THE PAYING AGENT AND REGISTRAR FOR PAYMENT OF PRINCIPAL, AND ANY
BOND ISSUED IN REPLACEMENT HEREOF OR SUBSTITUTION HEREOF IS REGISTERED IN
THE NAME OF DTC AND ANY PAYMENT IS MADE TO DTC OR ITS NOMINEE, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSONS IS WRONGFUL BECAUSE ONLY THE REGISTERED OWNER HEREOF, DTC OR ITS
NOMINEE,HAS AN INTEREST HEREIN.
This bond shall not be valid and binding on the City until authenticated by the Paying Agent and
Registrar.
IN WITNESS WHEREOF, the Mayor and Council of the City of Grand Island, Nebraska, have
caused this bond to be executed on behalf of the City with the facsimile signatures of the Mayor and City
Clerk of the City and by causing the official seal of the City to be impressed or imprinted hereon (which
may be a facsimile seal), all as of the Date of Original Issue shown above.
CITY OF GRAND ISLAND,NEBRASKA
[SEAL]
(facsimile signature)
Mayor
ATTEST:
(facsimile signature)
City Clerk
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ORDINANCE NO. 9434 (Cont.)
CERTIFICATE OF AUTHENTICATION
This bond is one of the bonds authorized by Ordinance passed and approved by the Mayor and
Council of the City of Grand Island,Nebraska, as described in said bond.
Paying Agent and Registrar
Authorized Signature
BOND INSURANCE LEGEND
Financial Security Assurance Inc. ("Financial Security"), New York, New York, has delivered its
municipal bond insurance policy with respect to the scheduled payments due of principal of and interest
on this Bond to Wells Fargo Bank Nebraska, National Association, of Lincoln,Nebraska, or its successor,
as paying agent for the Bonds (the "Paying Agent"). Said Policy is on file and available for inspection at
the principal office of the Paying Agent and a copy thereof may be obtained from Financial Security or
the Paying Agent.
(FORM OF ASSIGNMENT)
For value received hereby sells, assigns, and transfers
unto the within bond and hereby irrevocably constitutes and
appoints ,Attorney, to transfer the same on the books of registration
in the office of the within mentioned Paying Agent and Registrar with full power of substitution in the
premises.
Date:
Registered Owner
Signature Guaranteed
By
Authorized Officer
Note: The signature(s) on this assignment MUST CORRESPOND with the name(s) as written on
the face of the within bond in every particular, without alteration, enlargement or any change whatsoever,
and must be guaranteed by a commercial bank or a trust company or by a fi m having membership on the
New York, Chicago or other stock exchange.
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ORDINANCE NO. 9434 (Cont.)
--- Section 9. Each of the 2013 Bonds shall be executed on behalf of the City with the facsimile
signatures of the Mayor and the City Clerk and shall have imprinted thereon the City's seal(which may be
a facsimile seal). The 2013 Bonds shall be issued initially as "book-entry-only" bonds under the services
of The Depository Trust Company (the "Depository"), with one typewritten bond per maturity being
issued to the Depository. In such connection said officers of the City are authorized to execute and deliver
a Letter of Representations (the "Letter of Representations") in the form required by the Depository
(which may be in the form of a blanket letter, including any such letter previously executed and
delivered), for and on behalf of the City, which shall thereafter govern matters with respect to registration,
transfer, payment and redemption of the 2013 Bonds. With respect to the issuance of the 2013 Bonds as
"book-entry-only" bonds, the following provisions shall apply:
(a) The City and the Paying Agent and Registrar shall have no responsibility or
obligation to any broker-dealer, bank or other financial institution for which the
Depository holds 2013 Bonds as securities depository (each, a "Bond Participant") or to
any person who is an actual purchaser of a 2013 Bond from a Bond Participant while the
2013 Bonds are in book-entry form (each, a "Beneficial Owner") with respect to the
following:
(i) the accuracy of the records of the Depository, any nominees
of the Depository or any Bond Participant with respect to any ownership
interest in the 2013 Bonds,
(ii) the delivery to any Bond Participant, any Beneficial Owner
or any other person, other than the Depository, of any notice with respect
to the 2013 Bonds,including any notice of redemption,or
(iii) the payment to any Bond Participant, any Beneficial Owner
or any other person, other than the Depository, of any amount with
respect to the 2013 Bonds. The Paying Agent and Registrar shall make
payments with respect to the 2013 Bonds only to or upon the order of the
Depository or its nominee, and all such payments shall be valid and
effective fully to satisfy and discharge the obligations with respect to
such 2013 Bonds to the extent of the sum or sums so paid. No person
other than the Depository shall receive an authenticated Bond, except as
provided in(e)below.
(b) Upon receipt by the Paying Agent and Registrar of written notice from the Depository
to the effect that the Depository is unable or unwilling to discharge its responsibilities, the Paying
Agent and Registrar shall issue, transfer and exchange 2013 Bonds requested by the Depository
in appropriate amounts. Whenever the Depository requests the Paying Agent and Registrar to do
so, the Paying Agent and Registrar will cooperate with the Depository in taking appropriate
action after reasonable notice (i) to arrange, with the prior written consent of the City, for a
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ORDINANCE NO. 9434 (Cont.)
substitute depository willing and able upon reasonable and customary tei His to maintain custody
of the 2013 Bonds or(ii) to make available 2013 Bonds registered in whatever name or names as
the Beneficial Owners transferring or exchanging such 2013 Bonds shall designate.
(c) If the City determines that it is desirable that certificates representing the 2013 Bonds
be delivered to the ultimate beneficial owners of the 2013 Bonds and so notifies the Paying Agent
and Registrar in writing, the Paying Agent and Registrar shall so notify the Depository,
whereupon the Depository will notify the Bond Participants of the availability through the
Depository of bond certificates representing the 2013 Bonds. In such event,the Paying Agent and
Registrar shall issue, transfer and exchange bond certificates representing the 2013 Bonds as
requested by the Depository in appropriate amounts and in authorized denominations.
(d) Notwithstanding any other provision of this Ordinance to the contrary, so long as any
2013 Bond is registered in the name of the Depository or any nominee thereof, all payments with
respect to such 2013 Bond and all notices with respect to such 2013 Bond shall be made and
given,respectively,to the Depository as provided in the Letter of Representations.
(e) Registered ownership of the 2013 Bonds may be transferred on the books of
registration maintained by the Paying Agent and Registrar, and the 2013 Bonds may be delivered
in physical form to the following:
(i)any successor securities depository or its nominee;
(ii) any person, upon (A) the resignation of the Depository from its
functions as depository or (B) termination of the use of the Depository pursuant
to this Section and the terms of the Paying Agent and Registrar's Agreement.
(f) In the event of any partial redemption of a 2013 Bond unless and until such partially
redeemed bond has been replaced in accordance with the provisions of this Ordinance, the books
and records of the Paying Agent and Registrar shall govern and establish the principal amount of
such bond as is then outstanding and all of the 2013 Bonds issued to the Depository or its
nominee shall contain a legend to such effect.
If for any reason the Depository resigns and is not replaced, or upon termination by the City of book-
entry-only form, the City shall immediately provide a supply of printed bond certificates for issuance
upon the transfers from the Depository and subsequent transfers or in the event of partial redemption. In
the event that such supply of certificates shall be insufficient to meet the requirements of the Paying
Agent and Registrar for issuance of replacement bond certificates upon transfer or partial redemption, the
City agrees to order printed an additional supply of bond certificates and to direct their execution by
manual or facsimile signatures of its then duly qualified and acting officers. In case any officer whose
signature or facsimile thereof shall appear on any 2013 Bond shall cease to be such officer before the
delivery of such bond (including such certificates delivered to the Paying Agent and Registrar for
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ORDINANCE NO. 9434 (Cont.)
issuance upon transfer or partial redemption), such signature or such facsimile signature shall nevertheless
be valid and sufficient for all purposes the same as if such officer or officers had remained in office until
the delivery of the 2013 Bond. The 2013 Bonds shall not be valid and binding on the City until
authenticated by the Paying Agent and Registrar. The 2013 Bonds shall be delivered to the Paying Agent
and Registrar for registration and authentication. Upon execution, registration, and authentication of the
2013 Bonds, they shall be delivered to the City Treasurer, acting on behalf of the City, who is authorized
to deliver them to Ameritas Investment Corp., as initial purchaser thereof (the "Underwriter"). The
Mayor and City Treasurer are each hereby authorized to execute and deliver a Bond Purchase Agreement
for and on behalf of the City, which may include the Designation pursuant to Section 3 hereof. The
Underwriter shall have the right to direct the registration of the 2013 Bonds and the denominations
thereof within each maturity, subject to the restrictions of this Ordinance. The City Clerk shall make and
certify a transcript of the proceedings of the Mayor and Council with respect to the 2013 Bonds which
shall be delivered to the Underwriter. The City Treasurer shall maintain a record of information with
respect to the 2013 Bonds in accordance with the requirements of Section 10-140, R.R.S. Neb. 2012, as
amended, and shall cause the same to be filed in the Office of the Auditor of Public Accounts of the State
of Nebraska.
Section 10. The proceeds of the 2013 Bonds herein authorized may be applied to: (a) refunding
the Refunded Bonds; (b)payment of costs of construction and acquisition of the 2013 Project; (c) funding
a portion of the 2013 sub-account in the Debt Service Reserve Account; and (d) paying the costs of
issuance of the 2013 Bonds. Accrued interest, if any, received upon closing of the 2013 Bonds shall be
applied to pay interest next falling due on the 2013 Bonds and shall be credited to the Bond Payment
Account as described in Section 11 hereof. A portion of the proceeds of the 2013 Bonds is to be deposited
to a separate construction account of the City which is hereby established and designated as the "2013
Project Construction Fund" to be applied to pay costs of the 2013 Project and a portion of the proceeds of
the 2013 Bonds shall be deposited to the sub-account for the 2013 Bonds in the Debt Service Reserve
Account as described in Section 11 below.
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ORDINANCE NO. 9434 (Cont.)
Section 11. The Revenues of the Sewer System are hereby pledged and hypothecated for the
payment of the 2013 Bonds and any Additional Bonds as authorized by this Ordinance and interest on
such 2013 Bonds and Additional Bonds and the City does hereby agree with the holders of the 2013
Bonds and Additional Bonds as follows:
(a) GRAND ISLAND SEWER SYSTEM FUND - The entire gross
Revenues derived from the operation of the Sewer System shall be set aside as collected
and deposited in a separate fund which has been previously created and designated as the
"Grand Island Sewer System Fund." For purposes of allocating the monies in the Grand
Island Sewer System Fund, the City shall maintain the following accounts: (1) Operation
and Maintenance Account; (2) Bond Payment Account; (3) Debt Service Reserve
Account; and(4) Surplus Account.
(b) OPERATION AND MAINTENANCE ACCOUNT -Out of the Grand
Island Sewer System Fund there shall be monthly credited into the Operation and
Maintenance Account such amounts as the City shall from time to time determine to be
necessary to pay the reasonable and necessary expenses of operating and maintaining the
Sewer System, and the City may withdraw funds credited to the Operation and
Maintenance Account as necessary from time to time to pay such expenses.
(c) BOND PAYMENT ACCOUNT - Out of the Grand Island Sewer
System Fund there shall be credited monthly on or before the first day of each month to
the Bond Payment Account, starting with the month of October, 2013, the following
amounts (or such other amounts on such dates as set forth in the Designation to conform
to the final maturities and interest payment dates):
(1) Beginning October 1, 2013, and continuing for the period from October
1, 2013 so long as the 2013 Bonds remain outstanding, an amount equal
to 1/6 of the next maturing semiannual interest payment on the 2013
Bonds; and
(2) For the period from and including October 1, 2013, and continuing so
long as the 2013 Bonds remain outstanding an amount equal to 1/12 of
the next maturing principal payment on the 2013 Bonds.
The City Treasurer is hereby authorized and directed, without further authorization, to withdraw
monies credited to the Bond Payment Account, or if the monies in such Account are insufficient,
then from the Debt Service Reserve Account and next from the Surplus Account, in an amount
sufficient to pay, when due, the principal of and interest on the 2013 Bonds or any Additional
Bonds and to transfer such amounts due to the Paying Agent and Registrar(or other paying agent
for any Additional Bonds, as applicable) at least five (5) business days before each principal and
interest payment date. Upon the issuance of any Additional Bonds pursuant to this Ordinance
appropriate additional credits to the Bond Payment Account shall be provided for sufficient to
pay principal and interest on said Additional Bonds.
(d) DEBT SERVICE RESERVE ACCOUNT -The City agrees that it shall deposit
an amount to be determined pursuant to Section 3 hereof(consisting of a portion of proceeds of
the 2013 Bonds) as the amount required to be maintained attributable to the 2013 Bonds in a
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ORDINANCE NO. 9434 (Cont.)
separate sub-account which is hereby established for the 2013 Bonds in the Debt Service Reserve
Account. Monies credited to the Debt Service Reserve Account may be withdrawn, but only from
the designated sub-account for a specific issue, as needed, to provide funds to pay, when due, the
principal of and interest on the 2013 Bonds and any Additional Bonds issued pursuant to this
Ordinance, as the case may be, if the Bond Payment Account contains insufficient funds for that
purpose, and the City Treasurer is hereby authorized and directed to make such withdrawal if and
when needed. In the event of a withdrawal from the Debt Service Reserve Account, there shall be
credited to the Debt Service Reserve Account in the month following such withdrawal all monies
in the Grand Island Sewer System Fund remaining after making the payments required to be
made in such month to the Operation and Maintenance Account and Bond Payment Account and
each month thereafter all such remaining monies shall be credited to the Debt Service Reserve
Account until such account has been restored to the required balance. Upon the issuance of any
Additional Bonds, the amount required to be accumulated and maintained in the Debt Service
Reserve Account, in a separate sub-account for such Additional Bonds, shall be set at an amount
determined appropriate by the Mayor and Council in connection with any such issue of
Additional Bonds (which may be $-0-). Any such required increase shall be provided for either
by credit made from bond proceeds or current funds of the Sewer System then available or by
equal monthly credits from the Grand Island Sewer System Fund made in such amounts so that
the required amount shall be accumulated in a period of not more than five years. Each sub-
account in the Debt Service Reserve Account shall be held solely for the specific issue for which
it is established. In the event of withdrawal from any such sub-account which results in the
amount in such sub-account being deficient to meet the required balance, available amounts for
restoring sub-account balances shall be credited to each deficient sub-account on a pro rata basis
in accordance with the respective outstanding principal amounts for those issues for which the
respective sub-accounts are then deficient. When the 2013 Bonds or any issue of Additional
Bonds for which a sub-account has been established is no longer outstanding, the particular sub-
account for such issue shall no longer be required to be maintained. Anything in this subsection
11(d) to the contrary notwithstanding, the amount required to be maintained in the Debt Service
Reserve Account with respect to the 2013 Bonds or any issue of Additional Bonds shall not at
any time exceed the maximum amount permitted to be invested without yield restriction under
Sections 103(b) and 148 of the Internal Revenue Code of 1986, as amended, and applicable
regulations of the United States Treasury Department.
(e) SURPLUS ACCOUNT - Monies from the Grand Island Sewer System Fund
remaining after the credits required in the foregoing Subsections 11(b), 11(c) and 11(d) shall be
credited to the Surplus Account. Monies in the Surplus Account may be used to make up any
deficiencies in the preceding Accounts, to retire any of the 2013 Bonds or any Additional Bonds
prior to their maturity, to pay principal of and interest on any junior lien indebtedness incurred
with respect to the Sewer System, to provide for replacements or improvements for the Sewer
System, to provide for in lieu of tax payments in an amount not to exceed 1% of the gross
revenues of the Sewer System in any fiscal year (as and to the extent permitted by law), or to
provide for any other purpose related to the Sewer System.
The provisions of this Section shall require the City to maintain a set of books and records in accordance
with such accounting methods and procedures as are generally applicable to a municipal utility enterprise,
which books and records shall show credits to and expenditures from the several Accounts required by
this Section. Monies credited to the Grand Island Sewer System Fund or any of the Accounts therein as
16
ORDINANCE NO. 9434 (Cont.)
established by this Ordinance shall be deposited or invested separate and apart from other City funds.
Except as specified below for the Debt Service Reserve Account, the City shall not be required to
establish separate bank or investment accounts for the Accounts described in Subsection 11(b), 11(c),
11(d)and 11(e). Monies credited to the Debt Service Reserve Account(or any sub-account therein) shall,
if maintained in a demand or time deposit account, be kept in a separate account and not commingled
with other Sewer System funds or accounts. If invested, monies credited to the Debt Service Reserve
Account (or any sub-account therein) may be commingled with other Sewer System funds or accounts so
long as the City maintains books and records clearly identifying the specific investments, or portions
thereof, which belong to the Debt Service Reserve Account(or any sub-account therein).
Monies in any of said Accounts except the Debt Service Reserve Account may be invested in
investments permissible for a city of the first class. Monies in the Debt Service Reserve Account (or any
sub-account therein) may be invested in Deposit Securities or bank depository accounts or certificates of
deposit which are either fully insured or fully collateralized as provided by law for investments of funds
of Cities of the First Class. Monies invested from the Debt Service Reserve Account shall be invested to
mature in not more than five years. Investments held for the Debt Service Reserve Account will be
valued at cost for purposes of determining compliance with the requirements of this Ordinance as to the
amount required to be maintained in the Debt Service Reserve Account or any sub-account therein.
Income from or profit realized from investments for any Account or any sub-account shall be credited to
such Account or sub-account until such Account or sub-account contains any amount then required to be
therein, and thereafter such income or profit shall be transferred to the Grand Island Sewer System Fund
and treated as other revenues from the operation of the Sewer System. The ordinance authorizing any
series of Additional Bonds for which a debt service reserve sub-account is to be established may establish
different terms for investment related to such sub-account.
The pledge of the Revenues of the Sewer System provided for in this Ordinance for the 2013
Bonds, subject to the right of the City to issue Additional Bonds as provided in this Ordinance, is
intended as a first and prior pledge of, lien on and security interest in such Revenues for the payment of
17
ORDINANCE NO. 9434 (Cont.)
principal and interest of the 2013 Bonds, superior to any pledge or promise made with respect to any
other indebtedness of the City as to its Sewer System, and is intended to be a full exercise of the powers
of the City provided for in Sections 18-1803 to 18-1805 with respect to its Sewer System.
Section 12. So long as any of the 2013 Bonds and any Additional Bonds issued pursuant to this
Ordinance shall remain outstanding and unpaid, the City covenants and agrees to establish, revise, from
time to time as necessary, and collect such rates and charges for the service furnished from the Sewer
System adequate to produce Revenues sufficient at all times:
(a) To provide funds to pay, when due, the principal of and interest on the
2013 Bonds and any Additional Bonds issued pursuant to this Ordinance.
(b) To pay all proper and necessary costs of operation and maintenance of
the Sewer System and to pay for the necessary and proper repairs, replacements,
enlargements, extensions and improvements to the Sewer System.
(c) To provide funds sufficient to make the credits into the Accounts and at
the times and in the amounts required by Section 11 of this Ordinance.
(d) To maintain Net Revenues in each fiscal year adopted by the City for the
Sewer System in an amount not less than 1.10 times the total amount of principal paid or
payable (exclusive of any principal redeemed prior to maturity other than principal
redeemed in accordance with any schedule of mandatory redemptions) and interest
falling due during such fiscal year on the 2013 Bonds and any Additional Bonds.
Section 13. To provide funds for any purpose related to the Sewer System, the City may issue
Additional Bonds, except for Additional Bonds issued for refunding purposes which are governed by
Section 14 of this Ordinance, payable from the Revenues having equal priority and on a parity with the
2013 Bonds and any Additional Bonds then outstanding, only upon compliance with the following
conditions:
(a) Such Additional Bonds shall be issued only pursuant to an ordinance
which shall provide for an increase in the monthly credits into the Bond Payment
Account in amounts sufficient to pay, when due, the principal of and interest on the 2013
Bonds, any Additional Bonds then outstanding and the proposed Additional Bonds and
for any monthly credits to the Debt Service Reserve Account as are required under
Subsection 11(d).
(b) The City shall have complied with one or the other of the two following
requirements:
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ORDINANCE NO. 9434 (Cont.)
(1) The Net Revenues derived by the City from its Sewer System for
the fiscal year next preceding the issuance of the Additional
Bonds shall have been at least equal to 1.25 times the Average
Annual Debt Service Requirements of the 2013 Bonds and any
Additional Bonds, all as then outstanding, and of the proposed
Additional Bonds; or
(2) The City shall have received a projection made by a consulting
engineer or firm of consulting engineers, recognized as having
experience and expertise in municipal utility systems, projecting
that the Net Revenues of the Sewer System in each of the three
full fiscal years after the issuance of such Additional Bonds will
be at least equal to 1.25 times the Average Annual Debt Service
Requirements of the 2013 Bonds and any Additional Bonds, all
as then outstanding, and of the proposed Additional Bonds. In
making such projection, the consulting engineer shall use as a
basis the Net Revenues of the Sewer System during the last
fiscal year for which an independent audit has been prepared and
shall adjust such Net Revenues as follows: (A) to reflect
changes in rates which have gone into effect since the beginning
of the year for which the audit was made, (B) to reflect his
estimate of the net increase over or net decrease under the Net
Revenues of the Sewer System for the year which the audit was
made by reason of: (i) changes of amounts payable under
existing contracts for service; (ii) additional general income from
sales to customers under existing rate schedules for various
classes of customers or as such schedules may be revised under a
program of changes which has been adopted by the Mayor and
Council of the City; (iii) projected revisions in costs for labor,
wages, salaries, machinery, equipment, supplies and other
operational items; (iv) revisions in the amount of service to be
supplied and any related administrative or other costs associated
with such increases due to increased supply from the acquisition
of any new facility; and (v) such other factors affecting the
projections or revenues and expenses as the consulting engineer
deems reasonable and proper. Annual debt service on any
proposed Additional Bonds to be issued may be estimated by the
consulting engineer in projecting Average Annual Debt Service
Requirements, but no Additional Bonds shall be issued requiring
any annual debt service payment in excess of the amount so
estimated by the consulting engineer.
The City hereby covenants and agrees that so long as any of the 2013 Bonds and any Additional
Bonds are outstanding, it will not issue any bonds or notes payable from the Revenues except in
accordance with the provisions of this Ordinance, provided, however, the City reserves the right to issue
bonds or notes which are junior in lien to the 2013 Bonds and any such Additional Bonds with the
principal and interest on such bonds or notes to be payable from monies credited to the Surplus Account
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ORDINANCE NO. 9434 (Cont.)
as provided in Subsection 11(e). In the event that Additional Bonds are proposed to be issued at a time
when the audited financial statements of the City for its Sewer System for the most recently completed
fiscal year are not yet available, compliance with the test based upon Net Revenues as set forth in Section
13(b)(1) may be determined with reference to the Net Revenues for the most recent fiscal year for which
financial statements have been issued and unaudited financial statements for the most recently completed
fiscal year as certified by the City Treasurer, provided that compliance shall be determined to be shown
for each such fiscal year.
Section 14. The City may issue refunding bonds, which shall qualify as Additional Bonds of
equal lien to refund any 2013 Bonds or any Additional Bonds then outstanding,provided, that, if any such
2013 Bonds or Additional Bonds are to remain outstanding after the issuance of such refunding bonds,the
principal payments due in any calendar year in which those bonds which are to remain outstanding
mature, or in any calendar year prior thereto, shall not be increased over the amount of such principal
payments due in such calendar years immediately prior to such refunding. Refunding bonds issued in
accordance with this paragraph of this Section 14 may be issued as Additional Bonds of equal lien
without compliance with the conditions set forth in Subsection 13(b)of this Ordinance.
The City may also issue refunding bonds which shall qualify as Additional Bonds of equal lien to
refund any 2013 Bonds or Additional Bonds then outstanding, provided, that, if any 2013 Bonds or
Additional Bonds then outstanding are to remain outstanding after the application of the proceeds of the
refunding bonds to the payment of the bonds which are to be refunded, such issuance must comply with
the Net Revenues test set forth in Subsection 13(b)(1) of this Ordinance and, if the proceeds of such
refunding bonds are not to be applied immediately to the satisfaction of the bonds which are to be
refunded, then such refunding bonds must provide by their terms that they shall be junior in lien to all
2013 Bonds and any Additional Bonds outstanding at the time of issuance of such refunding bonds until
the time of application of their proceeds to the satisfaction of the bonds which are to be refunded. In the
event that refunding bonds are proposed to be issued at a time when the audited financial statements of
the City for its Sewer System for the most recently completed fiscal year are not yet available, compliance
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ORDINANCE NO. 9434 (Cont.)
with the test based upon Net Revenues as set forth in Section 13(b)(1) may be determined with reference
to the Net Revenues for the most recent fiscal year for which financial statements have been issued and
unaudited financial statements for the most recently completed fiscal year as certified by the City
Treasurer, provided that compliance shall be determined to be shown for each such fiscal year. In
computing Average Annual Debt Service Requirements to show compliance with said Net Revenues test
for such refunding bonds, all payments of principal and interest due on such refunding bonds from time of
their issuance to the time of application of the proceeds of such refunding bonds to the satisfaction of the
bonds which are to be refunded shall be excluded from such computation to the extent that such principal
and interest are payable from sources other than the Revenues (such as bond proceeds held in escrow or
investment earnings thereon) or from monies in the Surplus Account and all payments of principal and
interest due on the bonds which are to be refunded from and after the time of such application shall also
be excluded. For purposes of this paragraph of this Section 14, the time of application of the proceeds of
the refunding bonds to the satisfaction of the bonds which are to be refunded shall be the time of deposit
with the paying agent for such bonds which are to be refunded pursuant to Section 10-126, R.R.S. Neb.
2012 (or any successor statutory provision thereto) or the time when such bonds which are to be refunded
under the terms of their authorizing ordinance or ordinances are no longer deemed to be outstanding,
whichever occurs sooner.
Section 15. So long as any 2013 Bonds or Additional Bonds are outstanding, the City hereby
covenants and agrees as follows:
(a) The City will maintain the Sewer System in good condition and will
continuously operate the same in a reasonable and efficient manner, and the City will
punctually perform all duties with reference to said system required by the Constitution
and statutes of the State of Nebraska, but this covenant shall not prevent the City from
discontinuing the use and operation of all or any portion of the Sewer System so long as
the Revenues derived from the City's ownership of the properties constituting the Sewer
System shall be sufficient to fulfill the City's obligations under Section 12 of this
Ordinance.
(b) The City will not grant any franchise or right to any person, firm or
corporation to own or operate a sewer system in competition with the Sewer System.
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ORDINANCE NO. 9434 (Cont.)
(c) The City will maintain insurance on the property constituting the Sewer
System (other than such portions of the system as are not normally insured) against risks
customarily carried by similar utilities, but including fire and extended coverage
insurance in an amount which would enable the City to repair, restore or replace the
property damaged to the extent necessary to make the Sewer System operable in an
efficient and proper manner to carry out the City's obligations under this Ordinance. The
Mayor and Council shall annually examine the amount of insurance carried with respect
to the Sewer System and shall evidence approval of such insurance by resolution. The
proceeds of any such insurance received by the City shall be used to repair, replace or
restore the property damaged or destroyed to the extent necessary to make the Sewer
System operable in an efficient and proper manner, and any amount of insurance
proceeds not so used shall be credited to the Surplus Account. In the event of any such
insured casualty loss, the City may advance funds to make temporary repairs or provide
for an advance on costs of the permanent repair, restoration or replacement from the
Operation and Maintenance Account and any such advances shall be repaid from
insurance proceeds received.
(d) The City will keep proper books, records and accounts separate from all
other records and accounts in which complete and correct entries will be made of all
transactions relating to the Sewer System. The City will have its operating and financial
statements related to the Sewer System audited annually by a certified public accountant
or firm of certified public accounts. The City will furnish to the original purchaser of the
2013 Bonds and to the original purchaser or purchasers of each series of Additional
Bonds issued hereunder, within four months after the end of each fiscal year of the Sewer
System, a copy of the financial statements of the Sewer System and the report thereon of
the certified public accountants.
(e) The City shall cause each person handling any of the monies in the
Grand Island Sewer System Fund to be bonded by an insurance company licensed to do
business in Nebraska in an amount or amounts deemed sufficient by the Mayor and
Council to cover the amount of money belonging to said system reasonably expected to
be in the possession or control of any such person. The amount of such bond or bonds
shall be fixed by the Mayor and Council and the costs thereof shall be paid as an
operating and maintenance expense from the Operation and Maintenance Account.
Section 16. The City's obligations under this Ordinance and the liens, pledges, covenants and
agreements of the City herein made or provided for, shall be fully discharged and satisfied as to the 2013
Bonds issued pursuant to this Ordinance and any such bonds shall no longer be deemed outstanding
hereunder if such bonds shall have been purchased and cancelled by the City, or when payment of the
principal of and interest thereon to the respective date of maturity or redemption(a) shall have been made
or caused to be made in accordance with the terms thereof, or (b) shall have been provided for by
depositing with the Paying Agent and Registrar, or with a national or state bank having trust powers or
trust company, in trust solely for such payment, (i) sufficient money to make such payment and/or
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ORDINANCE NO. 9434 (Cont.)
-„- (ii)Deposit Securities in such amount and bearing interest payable and maturing or redeemable at stated
fixed prices at the option of the holder as to principal,at such time or times, as will ensure the availability
of sufficient money to make such payment; provided, however, that, with respect to any 2013 Bond to be
paid prior to maturity, the City shall have duly given notice of redemption of such bond as provided by
law or made irrevocable provisions for the giving of such notice. Any such money so deposited with a
bank or trust company or the Paying Agent and Registrar may be invested and reinvested in Deposit
Securities and all interest and income from such Deposit Securities in the hands of such bank or trust
company or Paying Agent and Registrar, in excess of the amount required to pay principal of and interest
on the bonds for which such monies were deposited, shall be paid over to the City as and when collected.
Section 17. The terms and provisions of this Ordinance do and shall constitute a contract
between the City and the registered owner or owners of the 2013 Bonds and no changes, variations or
alterations of any kind, except for changes necessary to cure any ambiguity, formal defect or omission,
shall be made to this Ordinance without the written consent of the registered owners of two-thirds(2/3rds)
in principal amount of the 2013 Bonds then outstanding,provided, however, that neither the principal and
interest to be paid upon any 2013 Bond nor the maturity date of any 2013 Bond shall be changed without
the written consent of the registered owners of all such bonds then outstanding. Any registered owner of
a 2013 Bond may by mandamus or other appropriate action or proceedings at law or in equity in any court
of competent jurisdiction enforce and compel performance of this Ordinance and every provision and
covenant hereof, including without limiting the generality of the foregoing, the enforcement of the perfor-
mance of all duties required of the City by this Ordinance and the applicable laws of the State of
Nebraska, including in such duties the collecting of Revenues and the segregation and application of such
Revenues as described in Section 11 of this Ordinance. After any default in payment or other default in
perfoimance, the registered owners of the 2013 Bonds or any Additional Bonds shall be entitled to the
appointment of a receiver for the Sewer System. Any and all actions brought by any registered owner or
owners of the 2013 Bonds or Additional Bonds shall be maintained for the equal and ratable benefit of all
registered owners of the 2013 Bonds and Additional Bonds outstanding and no registered owners of any
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ORDINANCE NO. 9434 (Cont.)
of the 2013 Bonds or Additional Bonds shall have any right in any manner whatsoever by any action or
proceedings to affect,disturb or prejudice the pledge created by this Ordinance.
Section 18. The Mayor and City Clerk and City Treasurer of the City are hereby authorized to do
all things and execute all documents as may by them be deemed necessary and proper to complete the
issuance and sale of the 2013 Bonds contemplated by this Ordinance.
Section 19. If any section,paragraph, clause or provision of this Ordinance shall be held invalid,
the invalidity of such section,paragraph, clause or provision shall not affect any of the other provisions of
this Ordinance.
Section 20. The City hereby ratifies and approves the publication, distribution and use of the
Preliminary Official Statement in connection with the offering of the 2013 Bonds substantially in the
form presented, but with such changes, if any,therein, as may be approved by the Mayor, City Clerk, City
Treasurer or any other officer of the City. The City hereby deems the information contained in the
Preliminary Official Statement to be "final" as of its date, except for the omission of such information as
is permitted by Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (the "Rule"), such
as offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per
maturity, delivery dates, ratings and identity of the Underwriter. The City further authorizes and directs
the preparation of, and authorizes and directs the execution and delivery by the Mayor, City Clerk, City
Treasurer or any other officer of the City of an Official Statement for use in connection with the sale of
the 2013 Bonds.
Section 21. In accordance with the requirements of the Rule, the City hereby (a) authorizes and
directs that an officer of the City (or any one of them) execute and deliver, on the date of issue of the
2013 Bonds, a Continuing Disclosure Undertaking in order for the Underwriter to comply with the Rule,
in such form as shall be satisfactory to such officer, and(b) covenants and agrees that it will comply with
and carry out all of the provisions of such Continuing Disclosure Undertaking. Notwithstanding any
other provision of this Ordinance, failure of the City to comply with any Continuing Disclosure
Undertaking shall not be considered an event of default hereunder; however, any Participating
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ORDINANCE NO. 9434 (Cont.)
Underwriter(as such term is defined in the Continuing Disclosure Undertaking) or any Beneficial Owner
or any Registered Owner of a 2013 Bond may take such actions as may be necessary and appropriate,
including seeking mandamus or specific performance by court order, to cause the City to comply with its
obligations under this Section.
25
Section 22. The City hereby covenants and agrees that it will make no use of the proceeds of the
2013 Bonds which would cause the 2013 Bonds to be arbitrage bonds within the meaning of
Sections 103(b)(2) and 148 of the Internal Revenue Code of 1986, as amended (the "Code") and further
covenants to comply with said Sections 103(b)(2) and 148 and all applicable regulations thereunder
throughout the term of said issue. The City hereby covenants to take all action necessary to preserve the
tax-exempt status of the interest on the 2013 Bonds for federal income tax purposes under the Code with
respect to taxpayers generally. The City further agrees that it will not take any actions which would cause
the 2013 Bonds to constitute "private activity bonds"within the meaning of Section 141 of the Code.
Section 23. This Ordinance shall be in force and take effect from and after its passage and
approval as provided by law and shall be published in pamphlet faun.
PASSED AND APPROVED this 13th day of st,2013.1
ATTEST:
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