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07/29/2014 Ordinances 9493 ORDINANCE NO.9493 AN ORDINANCE OF THE CITY OF GRAND ISLAND, NEBRASKA, AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF NOT TO EXCEED $40,000,000 TOTAL PRINCIPAL AMOUNT SEWER SYSTEM REVENUE BONDS IN THE FORM OF ONE OR MORE PROMISSORY NOTES OF THE CITY, TO PAY THE COSTS OF ACQUIRING, CONSTRUCTING, IMPROVING, EXTENDING, EQUIPPING AND FURNISHING IMPROVEMENTS TO THE CITY'S SANITARY SEWER DISPOSAL PLANT AND SEWER SYSTEM; APPROVING THE EXECUTION AND DELIVERY OF ONE OR MORE LOAN CONTRACTS WITH THE NEBRASKA DEPARTMENT OF ENVIRONMENTAL QUALITY; PRESCRIBING THE FORM AND DETAILS OF THE BONDS AND THE COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; PROVIDING FOR THE PUBLICATION OF THIS ORDINANCE IN PAMPHLET FORM; AND AUTHORIZING CERTAIN ACTIONS AND DOCUMENTS AND PRESCRIBING OTHER MATTERS RELATING THERETO. 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 Nebraska Department of Environmental Quality ("NDEQ") has approved construction of additions and improvements to the City's Sewer System (collectively, the "Project") and has proposed to lend monies for the Project in one or more loans (each, an"NDEQ Loan"). Each NDEQ Loan shall be governed as to terms and conditions by a Loan Contract between the City and NDEQ, each of which shall be in substantially the form presented herewith(each, an"NDEQ Contract"). To evidence each NDEQ Loan and the debt obligation incurred by the City in connection with each NDEQ Contract, NDEQ has agreed to accept a bond payable from the revenues of the Sewer System to be evidenced by and in the form of a promissory note (each, an "NDEQ Note" and together the "NDEQ Notes"; sometimes all of the NDEQ Notes issued hereunder are collectively referred to herein as the "Bonds") in substantially the form attached to the NDEQ Contract. (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 2013, Date of Original Issue — September 17, 2013, issued pursuant to Ordinance No. 9434 of the City, of which $36,915,000 in principal amount are presently outstanding(the "Outstanding Parity Bonds"); (c) That it is necessary and advisable for the City to construct additions and improvements to the Sewer System for which the estimated total cost is not less than $40,000,000. Approved as to Form AIWA ,< July 28,2014 0 Cit V orney ORDINANCE NO. 9493 (Cont.) (d) The Outstanding Parity Bonds represent the only indebtedness of the City for which the Revenues of the Sewer System have been pledged. (e) Section 7 of the Ordinance authorizing the issuance of the Outstanding Parity Bonds (the "Outstanding Parity Bonds Ordinance") permits the issuance of Additional Bonds which are payable on a parity with the Outstanding Parity Bonds and equally and ratably secured therewith under the terms of the Outstanding Parity Bonds Ordinance; provided that 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(as defined in the Outstanding Parity Bonds Ordinance) in each of the three full fiscal years after the issuance of such series of Additional Bonds will be at least equal to 1.25 times the Average Annual Debt Service Requirements of the Outstanding Parity Bonds, as then outstanding, and of each series of Additional Bonds as then proposed to be issued, which projections shall be made in such manner as more fully described in the Outstanding Parity Bonds Ordinance(the"Projections"). (f) To satisfy the funding requirements described in this Section 1, it is necessary for the City to issue its Sewer System Revenue Bonds, in one or more series and in the form of one or more NDEQ Note, in the aggregate total principal amount of not to exceed $40,000,000 pursuant to Sections 18-1803 to 18-1805 R.R.S. Neb. 2012, each of which series shall be an NDEQ Loan. In connection with each NDEQ Loan, it is necessary and advisable for the City to approve the execution and delivery of the form of NDEQ Contract and NDEQ Note. Upon acceptance and approval of the Projections as provided herein for each series of bonds authorized herein, 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 Bonds in the principal amount of not to exceed $40,000,000 in one or more series, will exist and been done and performed in regular and due time and form 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 telnis 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 teiins of this Ordinance which are equal in lien to the Bonds and the Outstanding Parity Bonds, including all such bonds issued pursuant to Section 7 and refunding bonds issued pursuant to Section 8. (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 2 ORDINANCE NO. 9493 (Cont.) 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 5 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. (0 the term "Outstanding Parity Bonds" shall have the meaning set forth in Section 1 hereof. (g) the term "Paying Agent and Registrar" shall mean the Treasurer of the City, as appointed to act as paying agent and registrar for the Bonds pursuant to Section 4 hereof, or any successor thereto. Section 3. To provide for the payment of the costs of the Project, there is hereby approved the issuance of the Bonds, in one or more series, each of which shall be in the form of and evidenced by a single NDEQ Note, and which Bonds in the aggregate may be issued in an amount not to exceed Forty Million Dollars ($40,000,000). In connection with the issuance of each NDEQ Note, the City shall enter into an NDEQ Contract. The final terms of each NDEQ Note and NDEQ Contract shall be approved by resolution of the City Council prior to execution and delivery thereof, with such changes as shall be determined necessary and appropriate by the Mayor or the City Treasurer(each, an"Authorized Officer", and together, the "Authorized Officers") for and on behalf of the City. Prior to the issuance of each NDEQ Note and entering into each NDEQ Contract, the City shall have received and approved the Projections made in connection with the delivery of each NDEQ Note. The temis of each NDEQ Note and each NDEQ Loan Contract in substantially the form attached hereto, are hereby approved and the Authorized Officers are each hereby authorized to execute and deliver the NDEQ Note and the NDEQ Loan Contract with such changes from the forms presented and attached hereto as such officer shall deem appropriate for and on behalf of the City in connection with each NDEQ Loan, provided, however, each NDEQ Note shall provide for interest to be paid at an interest rate of not to exceed 2.50%per annum and with an administrative fee payable to NDEQ of not to exceed 1% per annum. The Mayor and City 3 ORDINANCE NO. 9493 (Cont.) Treasurer and any other officer or officers of the City are hereby further authorized to take such further actions and to execute such certificates and other documents as shall be deemed necessary or appropriate by any of them in connection with the issuance and delivery of each NDEQ Note and the NDEQ Loan Contract. Section 4. The City Treasurer shall maintain a record of information with respect to the 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. The City Treasurer is hereby appointed to serve as paying agent and registrar for the Bonds. Section 5. The Revenues of the Sewer System are hereby pledged and hypothecated for the payment of the Outstanding Parity Bonds, the Bonds and any Additional Bonds as authorized by this Ordinance and interest on such Outstanding Parity Bonds, Bonds and Additional Bonds and the City does hereby agree with the holders of the Outstanding Parity Bonds, the 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 fifteenth day of each month to the Bond Payment Account the following amounts: (1) After taking into consideration any amount on deposit in the Bond Payment Account for payment of the next installment amount (principal and interest) on the Bonds, an amount equal to such next installment amount divided by the number of monthly periods which will elapse before such installment amount is due; 4 ORDINANCE NO. 9493 (Cont.) (2) During such periods and in such amounts, all payments as are required under the terms of the Outstanding Parity Bonds Ordinance with respect to the principal and interest on the Outstanding Parity 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 for the Bonds and next from the Surplus Account, in an amount sufficient to pay,when due,the principal of and interest on the Bonds,the Outstanding Parity Bonds or any Additional Bonds and to transfer such amounts due to the Paying Agent and Registrar (or other paying agent for the Outstanding Parity Bonds or 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 the amount of$-0- as the amount required to be maintained attributable to the Bonds in a separate sub-account which is hereby established for the 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 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 Outstanding Parity Bonds,the 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 to the contrary notwithstanding, the amount required to be maintained in the Debt Service Reserve Account with respect to the 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. 5 ORDINANCE NO. 9493 (Cont.) (e) SURPLUS ACCOUNT - Monies from the Grand Island Sewer System Fund remaining after the credits required in the foregoing Subsections 5(b), 5(c) and 5(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 Bonds, Outstanding Parity 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 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 5(b), 5(c), 5(d) and 5(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 pei inissible 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. 6 ORDINANCE NO. 9493 (Cont.) 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 ternis for investment related to such sub-account. The pledge of the Revenues of the Sewer System provided for in this Ordinance for the Bonds and the Outstanding Parity 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 principal and interest of the Bonds and the Outstanding Parity 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 6. So long as any of the Bonds, the Outstanding Parity 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 Bonds, the Outstanding Parity 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 5of 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 Bonds, the Outstanding Parity Bonds and any Additional Bonds. 7 ORDINANCE NO. 9493 (Cont.) Section 7. 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 8 of this Ordinance, payable from the Revenues having equal priority and on a parity with the Bonds, the Outstanding Parity 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 Bonds then outstanding, the Outstanding Parity 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: (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 Bonds, the Outstanding Parity 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 Bonds, the Outstanding Parity 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, 8 ORDINANCE NO. 9493 (Cont.) 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 Bonds, the Outstanding Parity 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 Bonds, the Outstanding Parity 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 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 deteiinined to be shown for each such fiscal year. Section 8. The City may issue refunding bonds, which shall qualify as Additional Bonds of equal lien to refund any Bonds, Outstanding Parity Bonds or any Additional Bonds then outstanding, provided, that, if any such Bonds, Outstanding Parity 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. 9 ORDINANCE NO. 9493 (Cont.) Refunding bonds issued in accordance with this paragraph of this Section 8 may be issued as Additional Bonds of equal lien without compliance with the conditions set forth in Subsection 7(b)of this Ordinance. The City may also issue refunding bonds which shall qualify as Additional Bonds of equal lien to refund any Bonds, Outstanding Parity Bonds or Additional Bonds then outstanding, provided, that, if any Bonds, Outstanding Parity 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 7(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 Bonds, Outstanding Parity 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 with the test based upon Net Revenues as set forth in Section 7(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 8, the time of application of the proceeds of the refunding bonds to the 10 ORDINANCE NO. 9493 (Cont.) 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 9. So long as any Bonds, Outstanding Parity 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 perfouu 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 6 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. (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 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. 11 ORDINANCE NO. 9493 (Cont.) (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 10. 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 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(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 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 11. The terms and provisions of this Ordinance do and shall constitute a contract between the City and the registered owner or owners of the 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 Bonds then outstanding, provided, however, that neither the principal and 12 ORDINANCE NO. 9493 (Cont.) interest to be paid upon any Bond nor the maturity date of any Bond shall be changed without the written consent of the registered owners of all such bonds then outstanding. Any registered owner of a 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 performance 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 5 of this Ordinance. After any default in payment or other default in performance, the registered owners of the Bonds, the Outstanding Parity 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 Bonds, the Outstanding Parity Bonds or Additional Bonds shall be maintained for the equal and ratable benefit of all registered owners of the Bonds, the Outstanding Parity Bonds and Additional Bonds outstanding and no registered owners of any of the Bonds, the Outstanding Parity 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 12. 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 Bonds contemplated by this Ordinance. Section 13. 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 14. 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 form. 13 ORDINANCE NO. 9493 (C PASSED AND APPROVED tiBs2ƒdye y )01. . z ,---- \ \ - \ . AlLtit � � ^�f V ''s ^ d` / { « « ATTEST: pR&6 D , A 2 � �„ « - )_, � a_ • Nicb ?o!!e b rg, AS£4a!h e City Administrator \ J % /W 7 % , y ° y a 14