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FY2013-26 Authorizing the Issuance of General Obligation Bonds for the School and Capital Improvements 1 Introduced by: Borough. Manager 2 Requested by: Finance Director Drafted by: Bond Counsel 3 Introduced: 02121/2013 4 Adopted: 02/21/2013 5 6 7 KODIAK ISLAND BOROUGH, ALASKA 8 RESOLUTION NO. FY2013 -26 9 10 A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY 11 AUTHORIZING THE BOROUGH TO ISSUE GENERAL OBLIGATION 12 SCHOOL BONDS IN THE PRINCIPAL AMOUNT NOT TO EXCEED 13 $25,000,000 TO PROVIDE FUNDS FOR SCHOOL AND RELATED 14 CAPITAL IMPROVEMENTS IN THE BOROUGH AND TO PAY COSTS 15 OF ISSUING THE BONDS, FIXING CERTAIN DETAILS OF SUCH 16 BONDS, AUTHORIZING THEIR SALE, AND PROVIDING FOR RELATED 17 MATTERS 18 19 WHEREAS, pursuant to Ordinance No. FY2010 -03 of the Kodiak Island Borough, Alaska 20 (the "Borough") adopted August 6, 2009, a question whether the Borough should issue 21 not to exceed $76,310,000, in general obligation bonds for the purpose of paying the cost 22 of planning, designing, and constructing school and related capital improvements in the 23 Borough, including without limitation, the reconstruction and renovation of the Kodiak High 24 School, referred to at the regular Borough election held on October 6, 2009, as 25 Proposition No. 1 ( "Proposition 1 "), was passed and approved; and 26 27 WHEREAS, $68,310,000 principal amount of general obligation bonds remains unissued 28 under Proposition 1; and 29 30 WHEREAS, the Borough received $7,000,000 grant funding that may ultimately reduce 31 the amount of bond proceeds needed for the project; and 32 33 WHEREAS, the Assembly finds that it is in the best interest of the Borough to plan, 34 design, and construct the school capital improvements described in Proposition 1 as the 35 reconstruction and renovation of the Kodiak High School (the "Project "), and to issue not 36 to exceed $25,000,000 principal amount of general obligation bonds referred to in 37 Proposition 1, to pay part of the costs of the Project and costs of issuing the bonds; and 38 39 WHEREAS, Section 29.47.410 of the Alaska Statutes provides that the Assembly by 40 resolution may provide for the form and manner of sale of bonds and notes; and 41 42 WHEREAS, the Assembly finds that it is necessary and appropriate to delegate to each of 43 the Borough Manager and Borough Finance Director authority to determine the maturity 44 amounts, interest rates, and other details of the bonds, and to determine other matters 45 that are not provided for in this resolution, including without limit, whether to sell the Bonds 46 to the Alaska Municipal Bond Bank (the "Bond Bank ") or another Financial Institution or to 47 offer the Bonds at public sale. 48 49 Kodiak Island Borough, Alaska Resolution No. FY2013 -26 Page 1 of 13 50 NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK 51 ISLAND BOROUGH THAT: 52 53 Section 1. Definitions. In addition to terms which are defined in the recitals above, the 54 following terms shall have the following meanings in this Resolution: 55 (a) "Assembly" means the Assembly of the Kodiak Island Borough, as 56 the general legislative authority of the Kodiak Island Borough, as the same 57 shall be duly and regularly constituted from time to time. 58 59 (b) "Bond" or "Bonds" means any of the "General Obligation School 60 Bonds" of the Kodiak Island Borough, the issuance and sale of which are 61 authorized herein. 62 63 (c) "Bond Bank" means the Alaska Municipal Bond Bank, a public 64 corporation of the State of Alaska. 65 66 (d) "Bond Bank Bonds" means the series of general obligation bonds 67 issued by the Bond Bank, all or part of the proceeds of which are used to 68 purchase the Bonds. 69 70 (e) "Bond Register" means the registration books maintained by the 71 Registrar, which include the names and addresses of the Registered 72 Owners of the Bonds or their nominees. 73 74 (f) "Borough" means the Kodiak Island Borough, a municipal 75 corporation of the State of Alaska, organized as a second class Borough 76 under Title 29 of the Alaska Statutes. 77 78 (g) "Borough Manager" means the Manager or Administrative Official of 79 the Borough. 80 81 (h) "Code" means the Internal Revenue Code of 1986, as amended 82 from time to time, together with all regulations applicable thereto. 83 84 (i) "Cost" or "Costs" means the cost of planning, designing, acquiring 85 property for, acquiring, constructing, installing and equipping the Project, 86 including interest on the Bonds during the period of planning, designing, 87 acquiring property for, acquiring, constructing, installing, and equipping the 88 Project, the cost whether incurred by the Borough or by another of field 89 surveys and advance planning undertaken in connection with the. Project 90 properly allocable to the Project, the cost of acquisition of any land or 91 interest therein required as the site or sites of the Project or for use in 92 connection therewith, the cost of any indemnity and surety bonds and 93 premiums on insurance incurred in connection with the Project prior to or 94 during construction thereof, all related direct administrative and inspection 95 expenses whether incurred by the Borough or by another in connection 96 with the Project prior to or during construction thereof and allocable 97 portions of direct costs of the Borough, legal fees, costs of issuance of the 98 Bonds by the Borough, including financing charges and fees and expenses 99 of bond counsel, financial advisors and consultants in connection therewith, 100 the cost of any bond insurance premium and bond ratings, the cost of Kodiak Island Borough, Alaska Resolution No. FY2013 -26 Page 2 of 13 101 audits, the cost of all machinery, apparatus, and equipment, cost of 102 engineering, architectural services, designs, plans, specifications and 103 surveys, estimates of cost, the reimbursement of all moneys advanced 104 from whatever source for the payment of any item or items of cost of the 105 Project, and all other expenses necessary or incidental to the acquisition 106 and development of the Project, the financing thereof and the putting of the 107 same in use and operation. 108 109 (j) "Financial Institution" means any bank or other financial institution 110 insured by the Federal Deposit Insurance Corporation or the Federal 111 Savings and Loan Corporation. 112 (k) "Government Obligations" means obligations that are either (i) 113 direct obligations of the United States of America or (ii) obligations of an 114 agency or instrumentality of the United States of America the timely 115 payment of the principal of and interest on which are unconditionally 116 guaranteed by the United States of America. 117 118 (1) "Loan Agreement" means the Loan Agreement between the 119 Borough and the Bond Bank or other Financial Institution concerning the 120 Bonds. 121 122 (m) "Registered Owner" means the person named as the registered 123 owner of a Bond in the Bond Register. 124 125 (n) "Registrar" means the Borough Finance Director, or any successor 126 that the Borough may appoint by resolution. 127 128 (o) "Resolution" means this Resolution No. FY2013 -26 of the Borough. 129 130 Section 2. Authorization of Bonds and Purpose of Issuance. For the purpose of 131 providing funds for financing the acquisition, design, construction, and 132 equipping of the Project and paying costs of issuance of the Bonds, the 133 Borough shall issue and sell revenue bonds designated "Kodiak Island 134 Borough, Alaska, General Obligation School Bonds" (the "Bonds ") in the 135 aggregate principal amount of not to exceed $25,000,000. The proceeds 136 of the Bonds shall be used to pay the costs to finance, design, acquire, 137 construct, and equip the Project. Issuance costs financed by the Bonds 138 shall not exceed two percent of the proceeds of the Bonds. The Project 139 serves a public purpose of the Borough. 140 141 The Manager and /or the Finance Director are hereby authorized to 142 determine whether the Bonds shall be sold to the Bond Bank or Financial 143 Institution or sold at public sale, whether to issue a portion of the Bonds as 144 bank - qualified small issuer bonds, and whether to issue the Bonds in one 145 or more issues, but in no event shall the aggregate principal exceed 146 $25,000,000. 147 148 Kodiak Island Borough, Alaska Resolution No, FY20.13 -26 Page 3 of 13 149 Section 3. Obligation of Bonds. The Bonds shall be direct and general obligations of 150 the Borough and the full faith and credit of the Borough are hereby pledged 151 to the payment of the principal of and interest on the Bonds. The Borough 152 hereby irrevocably pledges and covenants that it will levy and collect taxes 153 upon all taxable property within the Borough without limitation as to rate or 154 amount, in amounts sufficient, together with other funds legally available 155 therefor, to pay the principal of and interest on the Bonds as the same 156 become due and payable. 157 158 Section 4. Designation, Maturities, Interest Rates, and Other Details of Bonds. The 159 Bonds shall be designated "Kodiak Island Borough, Alaska, General 160 Obligation School Bonds." The Bonds shall be in the denomination of 161 $5,000 or any integral multiple thereof, shall be numbered separately in the 162 manner and with such additional designation as the Registrar deems 163 necessary for purposes of identification, and may have endorsed thereon 164 such legends or text as may be necessary or appropriate to conform to the 165 rules and regulations of any governmental authority or any usage or 166 requirement of law with respect thereto. 167 168 The Bonds shall mature in one or more years commencing no earlier than 169 2014 and ending no later than 2034. The Bonds shall bear interest from 170 their date, payable commencing on a date on or after July 1, 2013, and 171 semi - annually thereafter. Interest will be computed on the basis of a 360- 172 day year consisting of twelve 30 -day months. 173 174 Subject to Section 2 and the remainder of this Section, the dated date, the 175 principal and interest payment dates, the record dates for interest 176 payments, the aggregate principal amount, the principal amount of each 177 maturity, and the interest rates on the Bonds shall be determined at the 178 time of execution of the Loan Agreement at or before public sale of the 179 Bonds under Section 17. 180 181 Section 5. Optional Redemption. The Bonds, if any, subject to optional redemption by 182 the Borough, the time or times when such Bonds are subject to optional 183 redemption, the terms upon which such Bonds may be redeemed, and the 184 redemption price or redemption prices for such Bonds, shall be determined 185 at the time of sale of the Bonds by the Borough Manager or Finance 186 Director. 187 188 Section 6. Selection of Bonds for Redemption; Notice of Redemption. 189 190 (a) Selection of Bonds for Redemption. When and if the Bond Bank or 191 a Financial Institution is the Registered Owner of the Bonds, the selection 192 of Bonds to be redeemed shall be made as provided in the Loan 193 Agreement. When and if the Bond Bank or a Financial Institution is not the 194 Registered Owner of the Bonds, the selection of Bonds to be redeemed 195 shall be made as provided in this subsection (a). If the Borough redeems at 196 any one time fewer than all of the Bonds having the same maturity date, 197 the particular Bonds or portions of Bonds of such maturity to be redeemed 198 shall be selected by lot (or in such other manner determined by the 199 Registrar) in increments of $5,000. In the case of a Bond of a Kodiak Island Borough, Alaska Resolution No..FY2013 -26 Page 4of 13 200 denomination greater than 5,000, the Borough shall treat such Bond as 201 representing such number of separate Bonds each of the denomination of 202 $5,000 as is obtained by dividing the actual principal amount of such Bond 203 by $5,000. In the event that only a portion of the principal amount of a 204 Bond is redeemed, upon surrender of such Bond at the office of the 205 Registrar there shall be issued to the Registered Owner, without charge 206 therefor, for the then unredeemed balance of the principal sum thereof, at 207 the option of the Registered Owner, a Bond or Bonds of like maturity and 208 interest rate in any of the denominations authorized herein. 209 210 (b) Notice of Redemption. When and if the Bond Bank or a Financial 211 Institution is the Registered Owner of the Bonds, notice of any intended 212 redemption of Bonds shall be given as provided in the Loan Agreement. 213 When and if the Bond Bank or a Financial Institution is not the Registered 214 Owner of the Bonds, notice of any intended redemption of Bonds shall be 215 made as provided in this subsection (b). Notice of redemption shall be 216 mailed not less than 30 or more than 45 days prior to the date fixed for 217 redemption by first class mail to Registered Owners of the Bonds to be 218 redeemed at their addresses as they appear on the Bond Register on the 219 day the notice is mailed. Notice of redemption shall be deemed to have 220 been given when the notice is mailed as herein provided, whether or not it 221 is actually received by the Registered Owners. All notices of redemption 222 shall be dated and shall state: (1) the redemption date; (2) the redemption 223 price; (3) if fewer than all outstanding Bonds are to be redeemed, the 224 identification (and, in the case of partial redemption, the respective 225 principal amounts) of the Bonds to be redeemed; (4) that on the 226 redemption date the redemption price will become due and payable upon 227 each such Bond or portion thereof called for redemption, and that interest 228 thereon shall cease to accrue from and after said date; and (5) the place 229 where such Bonds are to be surrendered for payment of the redemption 230 price, which place of payment shall be the office of the Registrar. 231 232 Official notice of redemption having been given as stated above, Bonds or 233 portions of Bonds to be redeemed shall, on the redemption date, become 234 due and payable at the redemption price therein specified, and from and 235 after such date, such Bonds or portions of Bonds shall cease to bear 236 interest. Upon surrender of such Bonds for redemption in accordance with 237 said notice, such Bonds shall be paid at the redemption price. Installments 238 of interest due on or prior to the redemption date shall be payable as herein 239 provided for payment of interest. All Bonds which have been redeemed 240 shall be canceled and destroyed by the Registrar and shall not be reissued. 241 242 Each check or other transfer of funds issued to pay the redemption price of 243 Bonds shall bear the CUSIP number, if any, identifying, by maturity the 244 Bonds being redeemed with the proceeds of such check or other transfer. 245 246 Kodiak Island Borough, Alaska Resolution No. FY2013 -26 Page ,5 of 13 247 Section 7. Form of Bond. Each Bond shall be in substantially the following form, with 248 such variations, omissions, and insertions as may be required or permitted 249 by this Resolution: 250 251 UNITED STATES OF AMERICA 252 253 KODIAK ISLAND BOROUGH, ALASKA 254 255 NO. $ 256 257 258 GENERAL OBLIGATION SCHOOL BONDS 259 260 REGISTERED OWNER: 261 262 PRINCIPAL AMOUNT: 263 264 The Kodiak Island Borough (the "Borough ") a municipal corporation 265 of the State of Alaska, hereby acknowledges itself to owe and for value 266 received promises to pay to the Registered Owner identified above, or its 267 registered assigns, the principal amount shown above in the following 268 installments on of each of the following years, and to pay interest on such 269 installments from the date hereof, payable on 201_ and semiannually 270 thereafter on the _ days of and of each year, at the rates per annum as 271 follows: 272 Maturity Principal Interest Date Amount Rate 273 274 When and if this Bond is owned by the Alaska Municipal Bond Bank 275 or a Financial Institution, payment of principal and interest shall be made 276 as provided in the Loan Agreement between the Bond Bank/Financial 277 Institution and the Borough (the "Loan Agreement "). When and if this Bond 278 is not owned by the Bond Bank /Financial Institution, installments of 279 principal and interest on this Bond shall be paid by check or draft mailed 280 first class mail to the Registered Owner as of the close of business on the 281 15th day of the month before each installment payment date; provided that 282 the final installment of principal and interest on this Bond shall be payable 283 upon presentation and surrender of this Bond by the Registered Owner at 284 the office of the Registrar. Interest will be computed on the basis of a 360- 285 day year consisting of twelve 30 -day months. Both principal of and interest 286 on this Bond are payable in lawful money of the United States of America 287 which, on the respective dates of payment thereof, shall be legal tender for 288 the payment of public and private debts. 289 290 This Bond is one of the General Obligation School Bonds of the 291 Kodiak Island Borough, Alaska, of like tenor and effect except as to interest 292 rate, serial number, and maturity, aggregating in principal amount, and 293 constituting Bonds authorized for the purpose of paying the cost of school Kodiak island Borough, Alaska Resolution No. FY2013 -26 .Page 6 of 13 294 and related capital improvements in the Borough, and is issued under 295 Resolution No. FY2013 -26 of the Borough entitled: 296 297 A RESOLUTION OF THE KODIAK ISLAND BOROUGH 298 ASSEMBLY AUTHORIZING THE BOROUGH TO ISSUE 299 GENERAL OBLIGATION SCHOOL BONDS IN THE 300 PRINCIPAL AMOUNT OF NOT TO EXCEED $25,000,000 301 TO PROVIDE FUNDS FOR SCHOOL AND RELATED 302 CAPITAL IMPROVEMENTS IN THE BOROUGH AND TO 303 PAY COSTS OF ISSUING THE BONDS, FIXING CERTAIN 304 DETAILS OF SUCH BONDS, AUTHORIZING THEIR 305 SALE, AND PROVIDING FOR RELATED MATTERS 306 307 (the "Resolution "). 308 309 The Bonds [Installments of principal of this Bond] maturing on and 310 after , 20_, shall be subject to prepayment on and after 311 , 20_, at the option of the Borough [(subject to any applicable 312 provisions of the Loan Agreement)], in such principal amounts and from 313 such maturities as the Borough may determine, and by lot within a maturity, 314 at a redemption price equal to the principal amount to be prepaid, plus 315 accrued interest to the date of prepayment. 316 317 This Bond is transferable as provided in the Resolution, (i) only 318 upon the bond register of the Borough, and (ii) upon surrender of this Bond 319 together with a written instrument of transfer duly executed by the 320 registered owner or the duly authorized attorney of the registered owner, 321 and thereupon a new fully registered Bond or Bonds in the same aggregate 322 principal amount and maturity shall be issued to the transferee in exchange 323 therefor as provided in the Resolution and upon the payment of charges, if 324 any, as therein prescribed. The Borough may treat and consider the 325 person in whose name this Bond is registered as the absolute owner 326 hereof for the purpose of receiving payment of, or on account of, the 327 principal or redemption price, if any, hereof and interest due hereon and for 328 all other purposes whatsoever. 329 330 This Bond is a general obligation of the Kodiak Island Borough, and 331 the full faith and credit of the Borough are pledged for the payment of the 332 principal of and interest on the Bond as the same shall become due. 333 IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts 334 or things required by the constitution or statutes of the State of Alaska to 335 exist, to have happened or to have been performed precedent to or in the 336 issuance of this Bond exist, have happened and have been performed, and 337 that the series of Bonds of which this is one, together with all other 338 indebtedness of the Borough, is within every debt and other limit prescribed 339 by said constitution or statutes. 340 341 Kodiak Island Borough, Alaska Resolution No. FY2013 -26 Page 7 of 13 342 IN WITNESS WHEREOF, THE KODIAK ISLAND BOROUGH, 343 ALASKA, has caused this Bond to be signed in its name and on its behalf 344 by the manual or facsimile signature of its Mayor and its corporate seal (or 345 a facsimile thereof) to be impressed or otherwise reproduced hereon and 346 attested by the manual or facsimile signature of its Clerk, all as of the 347 day of 2013. 348 349 KODIAK ISLAND BOROUGH 350 351 352 353 Jerome M. Selby, Borough 354 Mayor 355 356 357 ATTEST: 358 359 360 361 Nova M. Javier, MMC, Borough Clerk 362 363 Section 8. Execution. The Bonds shall be executed in the name of the Borough by 364 the manual or facsimile signature of the Mayor, and its corporate seal (or a 365 facsimile thereof) shall be impressed or otherwise reproduced thereon and 366 attested by the manual or facsimile signature of the Borough Clerk. The 367 execution of a Bond on behalf of the Borough by persons who at the time 368 of the execution are duly authorized to hold the proper offices shall be valid 369 and sufficient for all purposes, although any such person shall have ceased 370 to hold office at the time of delivery of the Bond or shall not have held office 371 on the date of the Bond. 372 373 Section 9. Payment of Principal and Interest. The Bonds shall be payable in lawful 374 money of the United States of America which at the time of payment is 375 legal tender for the payment of public and private debts. When and if the 376 Bond Bank or a Financial Institution is the Registered Owner of the Bonds, 377 payment of principal and interest on the Bonds shall be made as provided 378 in the Loan Agreement. When and if the Bond Bank or a Financial 379 Institution is not the Registered Owner of the Bonds, installments of 380 principal and interest on the Bonds shall be paid by check mailed by first 381 class mail to the Registered Owner as of the record date for the installment 382 payment at the address appearing on the Bond Register; provided that the 383 final installment of principal and interest on a Bond shall be payable upon 384 presentation and surrender of the Bond by the Registered Owner at the 385 office of the Registrar. 386 387 Section 10. Registration. The Bonds shall be issued only in registered form as to both 388 principal and interest. The Borough designates the Borough Finance 389 Director as Registrar for the Bonds. The Registrar shall keep, or cause to 390 be kept, the Bond Register at the principal office of the Borough. The 391 Borough covenants that, until all Bonds have been surrendered and 392 canceled, it will maintain a system for recording the ownership of each Kodiak Island Borough, Alaska Resolution No. FY2013 -26 Page 8 of 13 393 Bond that complies with the provisions of Section 149 of the Code. The 394 Borough and the Registrar may treat the person in whose name any Bond 395 shall be registered as the absolute owner of such Bond for all purposes, • 396 whether or not the Bond shall be overdue, and all payments of principal of 397 and interest on a Bond made to the Registered Owner thereof or upon its 398 order shall be valid and effectual to satisfy and discharge the liability upon 399 such Bond to the extent of the sum or sums so paid, and neither the 400 Borough nor the Registrar shall be affected by any notice to the contrary. 401 402 Section 11. Transfer and Exchange. Bonds shall be transferred only upon the books 403 for the registration and transfer of Bonds kept at the office of the Registrar. 404 Upon surrender for transfer or exchange of any Bond at such office, with a 405 written instrument of transfer or authorization for exchange in form and with 406 guaranty of signature satisfactory to the Registrar, duly executed by the 407 Registered Owner or the duly authorized attorney of the Registered Owner, 408 the Borough shall execute and deliver an equal aggregate principal amount 409 of Bonds of the same maturity of any authorized denominations, subject to 410 such reasonable regulations as the Borough may prescribe and upon 411 payment sufficient to reimburse it for any tax, fee or other governmental 412 charge required to be paid in connection with such transfer or exchange. 413 All Bonds surrendered for transfer or exchange shall be canceled by the 414 Registrar. 415 416 Section 12. Bonds Mutilated, Destroyed, Stolen, or Lost. Upon surrender to the 417 Registrar of a mutilated Bond, the Borough shall execute and deliver a new 418 Bond of like maturity and principal amount. Upon filing with the Registrar of 419 evidence satisfactory to the Borough that a Bond has been destroyed, 420 stolen, or lost and of the ownership thereof, and upon furnishing the 421 Borough with indemnity satisfactory to it, the Borough shall execute and 422 deliver a new Bond of like maturity and principal amount. The person 423 requesting the execution and delivery of a new Bond under this section 424 shall comply with such other reasonable regulations as the Borough may 425 prescribe and pay such expenses as the Borough may incur in connection 426 therewith. 427 428 Section 13. Disposition of the Sale Proceeds of the Bonds. The sale proceeds of the 429 Bonds representing accrued interest on the Bonds shall be applied to pay a 430 portion of the interest due on the Bonds on the first interest payment date 431 for the Bonds. The sale proceeds of the Bonds representing original issue 432 premium on the Bonds shall be applied to pay issuance costs of the Bonds, 433 a portion of the interest due on the Bonds on the first interest payment date 434 for the Bonds, or Costs of the Project, and shall be deposited in such 435 manner, as the Borough Manager or the Borough Finance Director may 436 determine. The remaining sale proceeds of the Bonds shall be applied to 437 pay Costs of the Project. and issuance costs of the Bonds, and shall be 438 deposited in the appropriate funds or accounts of the Borough for such 439 purposes. • 440 441 442 Kodiak Island Borough, Alaska Resolution. No. FY2013 -26 Page 9 of 13 443 Section 14. Tax Covenants. The Borough covenants to comply with any and all 444 applicable requirements set forth in the Code in effect from time to time to 445 the extent that such compliance shall be necessary for the exclusion of the 446 interest on the Bonds from gross income for federal income tax purposes. 447 The Borough covenants that it will make no use of the proceeds of the 448 Bonds which will cause the Bonds to be "arbitrage bonds" subject to 449 federal income taxation by reason of Section 148 of the Code. The 450 Borough covenants that it will not take or permit any action that would 451 cause the Bonds to be "private activity bonds" as defined in Section 141 of 452 the Code. 453 Section 15. Amendatory and Supplemental. Resolutions. 454 455 (a) The Assembly from time to time and at any time may adopt a 456 resolution or resolutions supplemental hereto, which resolution or 457 resolutions thereafter shall become a part of this Resolution, for any one or 458 more of the following purposes: 459 460 (1) To add to the covenants and agreements of the Borough in 461 this Resolution, other covenants and agreements thereafter to be 462 observed or to surrender any right or power herein reserved to or 463 conferred upon the Borough. 464 465 (2) To make such provisions for the purpose of curing any 466 ambiguities or of curing, correcting or supplementing any defective 467 provision contained in this Resolution or in regard to matters or 468 questions arising under this Resolution as the Assembly may deem 469 necessary or desirable and not inconsistent with this Resolution and 470 which shall not adversely affect the interests of the Registered 471 Owners of the Bonds. 472 473 Any such supplemental resolution may be adopted without the consent of 474 the Registered Owners of any of the Bonds at any time outstanding, 475 notwithstanding any of the provisions of subsection (b) of this section. 476 477 (b) With the consent of the Registered Owners of not less than 60 478 percent in aggregate principal amount of the Bonds at the time outstanding, 479 the Assembly may adopt a resolution or resolutions supplemental hereto 480 for the purpose of adding any provisions to or changing in any manner or 481 eliminating any of the provisions of this Resolution or of any supplemental 482 resolution; provided, however, that no such supplemental resolution shall: 483 484 (1) Extend the fixed maturity of any of the Bonds, or reduce the 485 rate of interest thereon, or extend the time of payments of interest 486 from their due date, or reduce the amount of the principal thereof, or 487 reduce any premium payable on the redemption thereof, without the 488 consent of the Registered Owners of each Bond so affected; or 489 490 (2) Reduce the aforesaid percentage of Registered Owners of 491 Bonds required to approve any such supplemental resolution 492 without the consent of the Registered Owners of all of the Bonds 493 then outstanding. Kodiak Island Borough, Alaska Resolution No, FY2013 -26 Page 10 of 13 494 495 It shall not be necessary for the consent of the Registered Owners of the 496 Bonds under this subsection to approve the particular form of any proposed 497 supplemental resolution, but it shall be sufficient if such consent approves 498 the substance thereof. 499 500 (c) Upon the adoption of any supplemental resolution under this 501 section, this Resolution shall be deemed to be modified and amended in 502 accordance therewith, and the respective rights, duties, and obligations 503 under this Resolution of the Borough and all Registered Owners of 504 outstanding Bonds shall thereafter be subject in all respects to such 505 modification and amendment, and all the terms and conditions of the 506 supplemental resolution shall be deemed to be part of the terms and 507 conditions of this Resolution for any and all purposes. 508 509 (d) Bonds executed and delivered after the adoption of any 510 supplemental resolution under this section may bear a notation as to any 511 matter provided for in such supplemental resolution, and if such 512 supplemental resolution shall so provide, new Bonds modified so as to 513 conform, in the opinion of the Borough, to any modification of this 514 Resolution contained in any such supplemental resolution may be prepared 515 by the Borough and delivered without cost to the Registered Owners of the 516 Bonds then outstanding, upon surrender for cancellation of such Bonds in 517 equal aggregate principal amounts. 518 519 Section 16. Defeasance. In the event money and /or non - callable Government 520 Obligations maturing at such times and bearing interest to be earned 521 thereon in amounts sufficient to redeem and retire any or all of the Bonds in 522 accordance with their terms are set aside in a special trust account to effect 523 such redemption or retirement and such moneys and the principal of and 524 interest on such Government Obligations are irrevocably set aside and 525 pledged for such purpose, then no further payments need be made to pay 526 or secure the payment of the principal of and interest on such Bonds and 527 such Bonds shall be deemed not to be outstanding. 528 529 Section 17. Sale of Bonds. The Bonds shall be sold at negotiated sale to the Bond 530 Bank or a Financial Institution as provided in the form of Loan Agreement 531 or at public sale as the Borough Manager and Finance Director determine 532 is in the best interest of the Borough. Subject to the limitations provided in 533 Sections 2 and 4, each of the Borough Manager and the Borough Finance 534 Director is hereby authorized to determine the aggregate principal amount, 535 maturity amounts, interest rates, yields, dated date, principal and interest 536 payment dates, redemption terms, if any, for the Bonds, and other details 537 of the Bonds; provided that the true interest cost of the Bonds, expressed 538 as an annual rate, does not exceed 6.0 percent. In determining the 539 maturity amounts, interest rates, yields, and redemption terms, if any, for 540 the Bonds, the Borough Manager or Borough Finance Director shall take 541 into account those factors which, in his judgment, will result in the lowest 542 true interest cost on the Bonds to their maturity, including without limitation 543 current financial market conditions and current interest rates for obligations 544 comparable in tenor and quality to the Bonds. Based upon the foregoing Kodiak Island Borough, Alaska Resolution No. FY2013 -26 Page 11 of 13 545 determinations, the Borough Manager and the Borough Finance Director 546 each is authorized to execute the Loan Agreement, in substantially the 547 form presented at this meeting or to sell the Bonds at public sale as they 548 deem appropriate and cost effective to, and in the best interest of, the 549 Borough. 550 551 Section 18. Authority of Officers. The Mayor, the Borough Manager, the Borough 552 Finance Director, and the Borough Clerk each is authorized and directed to 553 do and perform all things and determine all matters, not determined by this 554 Resolution, to the end that the Borough may carry out its obligations under 555 the Bonds and this Resolution. 556 ■ 557 Section 19. Prohibited Sale of Bonds. No person, firm, or corporation, or any agent or 558 employee thereof, acting as financial consultant to the Borough under an 559 agreement for payment in connection with the sale of the Bonds is eligible 560 to purchase the Bonds as a member of the original underwriting syndicate 561 either at public or private sale. 562 563 Section 20. Ongoing Disclosure. The Borough acknowledges that under Rule 15c2 -12 564 of the Securities and Exchange Commission (the "Rule ") the Borough may 565 now or in the future be an 'obligated person." In accordance with the Rule, 566 and as the Bond Bank or a Financial Institution may require, the Borough 567 shall undertake to provide certain annual financial information and 568 operating data as shall be set forth in the Loan Agreement. 569 570 Section 21. Miscellaneous. 571 572 (a) All payments, made by the Borough of, or on account of, the 573 principal of or interest on the Bonds shall be made on the several Bonds 574 ratably and in proportion to the amount due thereon, respectively, for 575 principal or interest as the case may be. 576 577 (b) No recourse shall be had for the payment of the principal of or the 578 interest on the Bonds or for any claim based thereon or on this Resolution 579 against any member of the Assembly or officer of the Borough or any 580 person executing the Bonds. The Bonds are not and shall not be in any 581 way a debt or liability of the State of Alaska or of any political subdivision 582 thereof, except the Borough, and do not and shall not create or constitute 583 an indebtedness or obligation, either legal, moral, or otherwise, of said 584 state or of any political subdivision thereof, except the Borough. 585 586 Section 22. Severability. If any one or more of the provisions of this Resolution shall be 587 declared by any court of competent jurisdiction to be contrary to law, then 588 such provision shall be null and void and shall be deemed separable from 589 the remaining provisions of this Resolution and shall in no way affect the 590 validity of the other provisions of this Resolution or of the Bonds. 591 592 Section 23. Effective Date. This Resolution shall become effective upon passage and 593 approval. 594 595 Kodiak Island Borough, Alaska Resolution No. FY2013 -26 Page 12 of 13 596 ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH 597 THIS TWENTY FIRST DAY OF FEBRUARY, 2013. 598 599 KODIAK ISLAND BOROUGH 600 601 \ 603 \ // 604 Jerome M. Selby, Borow.•• • - or 605 ATTEST: 606 607 608 '��,•� 609 610 No a M. Javier, MMC, Borough Clerk Kodiak Island Borough, Alaska Resolution No. , FY2013 -26 Page 13of13