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FY2014-24 Authorizing the Issuance of General Obligation School Bonds 1 Introduced by: Borough Manager 2 Requested by: Finance Director 3 Drafted by: Bond Counsel 4 Introduced: 01/16/2014 5 Adopted: 01/16/2014 6 7 KODIAK ISLAND BOROUGH, ALASKA 8 RESOLUTION NO. FY2014-24 9 10 A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY 11 AUTHORIZING THE BOROUGH TO ISSUE GENERAL OBLIGATION SCHOOL 12 BONDS IN THE PRINCIPAL AMOUNT NOT TO EXCEED $25,000,000 TO 13 PROVIDE FUNDS FOR SCHOOL AND RELATED CAPITAL IMPROVEMENTS 14 IN THE BOROUGH AND TO PAY COSTS OF ISSUING THE BONDS, FIXING 15 CERTAIN DETAILS OF SUCH BONDS, AUTHORIZING THEIR SALE, AND 16 PROVIDING FOR RELATED MATTERS 17 18 WHEREAS, pursuant to Ordinance No. FY2010-03 of the Kodiak Island Borough, Alaska (the 19 "Borough"), adopted August 6, 2009, a question whether the Borough should issue not to 20 exceed $76,310,000 in general obligation bonds for the purpose of paying the cost of 21 planning, designing, and constructing school and related capital improvements in the 22 Borough, including without limitation, the reconstruction and renovation of the Kodiak High 23 School, referred to the regular Borough election held on October 6, 2009, as Proposition No. 1 24 ("Proposition 1"), was passed and approved; and 25 26 WHEREAS, pursuant to Resolution No. FY2011-18, the Borough issued its General 27 Obligation School Bond, 2011 Series A, in the principal amount of $8,000,000, as a general 28 obligation bond referred to in Proposition 1; and 29 30 WHEREAS, pursuant to Resolution No. FY2013-26, the Borough issued its General 31 Obligation School Bond, Series 2013, in the principal amount of $21,595,000, as a general 32 obligation bond referred to in Proposition 1; and 33 34 WHEREAS, $43,310,000 principal amount of general obligation bonds remains unissued 35 under Proposition 1; and 36 37 WHEREAS, the Borough received $7,000,000 grant funding that may ultimately reduce the 38 amount of bond proceeds needed for the project; and 39 40 WHEREAS, the Assembly finds that it is in the best interest of the Borough to plan, design, 41 and construct the school capital improvements described in Proposition 1 as the 42 reconstruction and renovation of the Kodiak High School (the "Project"), and to issue not to 43 exceed $25,000,000 principal amount of general obligation bonds referred to in Proposition 1, 44 to pay part of the costs of the Project and costs of issuing the bonds; and 45 46 WHEREAS, Section 29.47.410 of the Alaska Statutes provides that the Assembly by 47 resolution may provide for the form and manner of safe of bonds and notes; and 48 49 50 Kodiak Island Borough, Alaska Resolution No. FY2014-24 Page 1 of 13 51 WHEREAS, the Assembly finds that it is necessary and appropriate to delegate to each of the 52 Borough Manager and Borough Finance Director authority to determine the maturity amounts, 53 interest rates, and other details of the bonds, and to determine other matters that are not 54 provided for in this resolution, including without limitation, whether to sell the Bonds to the 55 Alaska Municipal Bond Bank (the "Bond Bank") or another Financial Institution or to offer the 56 Bonds at public sale; 57 58 NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND 59 BOROUGH THAT: 60 61 Section 1: Definitions. In addition to terms which are defined in the recitals above, the 62 following terms shall have the following meanings in this Resolution: 63 64 (a) "Assembly" means the Assembly of the Kodiak Island Borough, as the 65 general legislative authority of the Kodiak Island Borough, as the same shall be 66 duly and regularly constituted'from time to time. 67 68 (b) "Bond" or "Bonds" means any of the "General Obligation School Bonds" 69 of the Kodiak Island Borough, the issuance and sale of which are authorized 70 herein. 71 72 (c) "Bond Bank" meahs the Alaska Municipal Bond Bank, a public 73 corporation of the State of Alaska. 74 75 (d) "Bond Bank Bonds" means the series of general obligation bonds 76 issued by the Bond Bank, all or part of the proceeds of which are used to 77 purchase the Bonds. 78 79 (e) "Bond Register" means the registration books maintained by the 80 Registrar, which include the names and addresses of the Registered Owners of 81 the Bonds or their nominees. 82 83 (f) "Borough" means the Kodiak Island Borough, a municipal corporation of 84 the State of Alaska, organized as a second class borough under Title 29 of the 85 Alaska Statutes. 86 87 (g) "Borough Manager" means the Manager or Administrative Official of the 88 Borough. 89 90 (h) "Code" means the Internal Revenue Code of 1986, as amended from 91 time to time, together with all regulations applicable thereto. 92 93 (i) "Cost" or "Costs" means the cost of planning, designing, acquiring 94 property for, acquiring, constructing, installing and equipping the Project, 95 including interest on the Bonds during the period of planning, designing, 96 acquiring property for, acquiring, constructing, installing, and equipping the 97 Project, the cost whether incurred by the Borough or by another of field surveys 98 and advance planning undertaken in connection with the Project properly 99 allocable to the Project, the cost of acquisition of any land or interest therein 100 required as the site or sites of the Project or for use in connection therewith, the Kodiak Island Borough, Alaska Resolution No. FY2014-24 Page 2 of 13 101 cost of any indemnity and surety bonds and premiums on insurance incurred in 102 connection with the Project prior to or during construction thereof, all related 103 direct administrative and inspection expenses whether incurred by the Borough 104 or by another in connection with the Project prior to or during construction 105 thereof and allocable portions of direct costs of the Borough, legal fees, costs 106 of issuance of the Bonds by the Borough, including financing charges and fees 107 and expenses of bond counsel, financial advisors and consultants in 108 connection therewith,. cost of any bond insurance premium and bond 109 ratings, the cost of audits, the cost of all machinery, apparatus, and equipment, 110 cost of engineering, architectural services, designs, plans, specifications and 111 surveys, estimates of cost, the reimbursement of all moneys advanced from 112 whatever source for the payment of any item or items of cost of the Project, 113 and ail other expenses necessary or incidental to the acquisition and 114 development of the Project, the financing thereof and the putting of the same in 115 use and operation. 116 117 (j) "Financial Institution" means any bank or other financial institution 118 insured by the Federal Deposit Insurance Corporation or the Federal Savings 119 and Loan Insurance Corporation. 120 121 (k) "Government Obligations" means obligations that are either (i) direct 122 obligations of the United States of America or (ii) obligations of an agency or 123 instrumentality of the' United States of America the timely payment of the 124 principal of and interest on which are unconditionally guaranteed by the United 125 States of America. 126 127 (I) "Loan Agreement" means the Loan Agreement between the Borough 128 and the Bond Bank or other Financial Institution concerning the Bonds. 129 130 (m) "Registered Owner" means the person named as the registered owner 131 of a Bond in the Bond Register. 132 133 (n) "Registrar" means the Borough Finance Director, or any successor that 134 the Borough may appoint by resolution. 135 136 (o) "Resolution" means this Resolution No. FY2014-_ of the Borough. 137 138 Section 2: Authorization of Bonds and Purpose of Issuance. For the purpose of providing 139 funds for financing the Costs of the Project, the Borough shall issue and sell 140 general obligation bonds designated "Kodiak Island Borough, Alaska, General 141 Obligation School Bonds" (the "Bonds") in the aggregate principal amount of 142 not to exceed $25,000,000. The proceeds of the Bonds shall be used to pay 143 Costs of the Project. The Project serves a public purpose of the Borough. 144 145 The Manager and/or the Finance Director are hereby authorized to determine 146 whether the Bonds shall be sold to the Bond Bank or a Financial Institution or 147 sold at public sale, and whether to issue the Bonds in one or more issues, but 148 in no event shall the aggregate principal amount of the Bonds exceed 149 $25,000,000. 150 Kodiak Island Borough, Alaska Resolution No. FY2014-24 Page 3 of 13 C. 151 Section 3: Obligation of Bonds. The Bonds shall be direct and general obligations of the 152 Borough, and the full faith and credit of the Borough are hereby pledged to the 153 payment of the principal of and interest on the Bonds. The Borough hereby 154 irrevocably pledges and covenants that it will levy and collect taxes upon all 155 taxable property within the Borough without limitation as to rate or amount, in 156 amounts sufficient together with other funds legally available therefor, to pay 157 the principal of and interest on the Bonds as the same become due and 158 payable. 159 160 Section 4: Designation, Maturities, Interest Rates, and Other Details of Bonds. The 161 Bonds shall be designated "Kodiak Island Borough, Alaska, General Obligation 162 School Bonds." The Bonds shall be in the denomination of $5,000 or any 163 integral multiple thereof, shall be numbered separately in the manner and with 164 such additional designation as the Registrar deems necessary for purposes of 165 identification, and may have endorsed thereon such legends or text as may be 166 necessary or appropriate to conform to the rules and regulations of any 167 governmental authority or any usage or requirement of law with respect 168 thereto. 169 170 The Bonds shall mature in one or more years commencing no earlier than 2014 171 and ending no later than 2034. The Bonds shall bear interest from their date, 172 payable commencing on a date on or after July 1, 2014, and semi-annually 173 thereafter. Interest will be computed on the basis of a 360-day year consisting 174 of twelve 30-day months. 175 176 Subject to Section 2 and the remainder of this Section, the dated date, the 177 principal and interest payment dates, the record dates for interest payments, 178 the aggregate principal amount, the principal amount of each maturity, and the 179 interest rates on the Bonds shall be determined at the time of execution of the 180 Loan Agreement at or before public sale of the Bonds under Section 17. 181 182 Section 5: Optional Redemption. The Bonds, if any, subject to optional redemption by the 183 Borough, the time or times when such Bonds are subject to optional 184 redemption, the terms upon which such Bonds may be redeemed, and the 185 redemption price or redemption prices for such Bonds, shall be determined at 186 the time of sale of the Bonds by the Borough Manager or Finance 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 a 191 Financial Institution is the Registered Owner of the Bonds, the selection of 192 Bonds to be redeemed shall be made as provided in the Loan Agreement. 193 When and if the Bond Bank or a Financial Institution is not the Registered 194 Owner of the Bonds, the selection of Bonds to be redeemed shall be made as 195 provided in this subsection (a). If the Borough redeems at any one time fewer 196 than all of the Bonds having the same maturity date, the particular Bonds or 197 portions of Bonds of such maturity to be redeemed shall be selected by lot (or 198 in such other manner determined by the Registrar) in increments of $5,000. In 199 the case of a Bond of a denomination greater than $5,000, the Borough shall 200 treat such Bond as representing such number of separate Bonds each of the Kodiak Island Borough, Alaska Resolution No. FY2014-24 Page 4 of 13 201 denomination of $5,000 as is obtained by dividing the actual principal amount 202 of such Bond by $5,000. In the event that only a portion of the principal 203 amount of a Bond is redeemed, upon surrender of such Bond at the office of 204 the Registrar there shall be issued to the Registered Owner, without charge 205 therefor, for the then unredeemed balance of the principal amount thereof, at 206 the option of the Registered Owner, a Bond or Bonds of like maturity and 207 interest rate in any of the denominations authorized herein. 208 209 (b) Notice of Redemption. When and if the Bond Bank or a Financial 210 Institution is the Registered Owner of the Bonds, notice of any intended 211 redemption of Bonds shall be given as provided in the Loan Agreement. When 212 and if the Bond Bank or a Financial Institution is not the Registered Owner of 213 the Bonds, notice of any intended redemption of Bonds shall be given as 214 provided in this subsection (b). Notice of redemption shall be mailed not less 215 than 20 or more than 45 days prior to the date fixed for redemption by first 216 class mail to Registered Owners of the Bonds to be redeemed at their 217 addresses as they appear on the Bond Register on the day the notice is 218 prepared. Notice of redemption shall be deemed to have been given when the 219 notice is mailed as herein provided, whether or not it is actually received by the 220 Registered Owners. All notices of redemption shall be dated and shall state: 221 (1) the redemption date; (2) the redemption price; (3) if fewer than all 222 outstanding Bonds are to be redeemed, the identification (and, in the case of 223 partial redemption, the respective principal amounts) of the Bonds to be 224 redeemed; (4) that on the redemption date the redemption price will become 225 due and payable upon each such Bond or portion thereof called for redemption, 226 and that interest thereon shall cease to accrue from and after said date; and (5) 227 the place where such Bonds are to be surrendered for payment of the 228 redemption price, which place of payment shall be the office of the Registrar. 229 230 Official notice of redemption having been given as stated above, Bonds or 231 portions of Bonds to be redeemed shall, on the redemption date, become due 232 and payable at the redemption price therein specified, and from and after such 233 date, such Bonds or portions of Bonds shall cease to bear interest. Upon 234 surrender of such Bonds for redemption in accordance with said notice, such 235 Bonds shall be paid at the redemption price. Installments of interest due on or 236 prior to the redemption date shall be payable as herein provided for payment of 237 interest. All Bonds which have been redeemed shall be canceled and 238 destroyed by the Registrar and shall not be reissued. 239 240 Each check or other transfer of funds issued to pay the redemption price of 241 Bonds shall bear the CUSIP number, if any, identifying, by maturity the Bonds 242 being redeemed with the proceeds of such check or other transfer. 243 Kodiak Island Borough, Alaska Resolution No. FY2014-24 Page 5of13 244 Section 7: Form of Bond. Each Bond shall be in substantially the following form, with 245 such variations, omissions, and insertions as may be required or permitted by 246 this Resolution: 247 248 UNITED STATES OF AMERICA 249 250 KODIAK ISLAND BOROUGH, ALASKA 251 252 NO. $ 253 254 GENERAL OBLIGATION SCHOOL BOND 255 256 REGISTERED OWNER: 257 258 PRINCIPAL AMOUNT: 259 260 The Kodiak Island Borough (the "Borough"), a municipal corporation of 261 the State of Alaska, hereby acknowledges itself to owe and for value received 262 promises to pay to the Registered Owner identified above, or its registered 263 assigns, the principal amount identified above in the following installments on 264 each of the following years, and to pay interest on such installments from the 265 date hereof, payable on 1, 201_, and semiannually thereafter on _ 1, 266 and 1, of each year, at the rates per annum as follows: 267 268 Maturity Principal Interest 269 Date Amount Rate 270 271 272 273 When and if this Bond is owned by the Alaska Municipal Bond Bank or 274 a Financial Institution, payment of principal and interest shall be made 275 as provided in the Loan Agreement between the Bond Bank or Financial 276 Institution and the Borough (the "Loan Agreement'). When and if this Bond is 277 not owned by the Bond Bank or a Financial Institution, installments of principal 278 of and interest on this Bond 'shall be paid by check or draft mailed by first class 279 mail to the Registered Owner as of the close of business on the 15th day of the 280 month before each installment payment date; provided, that the final 281 installment of principal of and interest on this Bond shall be payable upon 282 presentation and surrender of this Bond by the Registered Owner at the office 283 of the Registrar. Interest will be computed on the basis of a 360-day year 284 consisting of twelve 30-day months. Both principal of and interest on this Bond 285 are payable in lawful money of the United States of America which, on the 286 respective dates of payment thereof, shall be legal tender for the payment of 287 public and private debts. 288 289 290 291 292 293 Kodiak Island Borough, Alaska Resolution No. FY2014-24 Page 6 of 13 294 This Bond is one of the General Obligation School Bonds of the Kodiak 295 Island Borough, Alaska, of like tenor and effect except as to interest rate, serial 296 number, right of redemption or prepayment and maturity, and constituting 297 Bonds authorized for the purpose of paying the cost of school and related 298 capital improvements in the Borough, and is issued under Resolution No. 299 FY2014-_ of the Borough entitled: 300 301 A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY 302 AUTHORIZING THE BOROUGH TO ISSUE GENERAL OBLIGATION 303 SCHOOL BONDS IN THE PRINCIPAL AMOUNT OF NOT TO 304 EXCEED $25,000,000 TO PROVIDE FUNDS FOR SCHOOL AND 305 RELATED CAPITAL IMPROVEMENTS IN THE BOROUGH AND TO 306 PAY COSTS OF ISSUING THE BONDS, FIXING CERTAIN DETAILS 307 OF SUCH BONDS, AUTHORIZING THEIR SALE, AND PROVIDING 308 FOR RELATED MATTERS 309 310 (the 'Resolution"). 311 312 The Bonds [Installments of principal of this Bond] maturing on and after 313 1, 20 , shall be subject to prepayment on and after 1, 20_, at 314 the option of the Borough [(subject to any applicable provisions of the Loan 315 Agreement)], in such principal amounts and from such maturities as the 316 Borough may determine, and by lot within a maturity, at a redemption price 317 equal to the principal amount to be prepaid, plus accrued interest to the date of 318 prepayment. 319 320 This Bond is transferable as provided in the Resolution, (i) only upon 321 the Bond Register of the Borough, and (ii) upon surrender of this Bond together 322 with a written instrument of transfer duly executed by the Registered Owner or 323 the duly authorized attorney of the Registered Owner, and thereupon a new 324 fully registered Bond or Bonds in the same aggregate principal amount and 325 maturity shall be issued to the transferee in exchange therefor as provided in 326 the Resolution and upon the payment of charges, if any, as therein prescribed. 327 The Borough may treat and consider the person in whose name this Bond is 328 registered as the absolute owner hereof for the purpose of receiving payment 329 of, or on account of, the principal or redemption price, if any, hereof and 330 interest due hereon and for all other purposes whatsoever. 331 332 This Bond is a general obligation of the Kodiak Island Borough, and the 333 full faith and credit of the Borough are pledged for the payment of the principal 334 of and interest on this Bond as the same shall become due. 335 336 IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts or 337 things required by the constitution or statutes of the State of Alaska to exist, to 338 have happened or to have been performed precedent to or in the issuance of 339 this Bond exist, have happened and have been performed, and that the series 340 of Bonds of which this is one, together with all other indebtedness of the 341 Borough, is within every debt and other limit prescribed by such constitution or 342 statutes. 343 Kodiak Island Borough, Alaska Resolution No. FY2014-24 Page 7 of 13 344 IN WITNESS WHEREOF, THE KODIAK ISLAND BOROUGH, ALASKA, 345 has caused this Bond to be signed in its name and on its behalf by the manual 346 or facsimile signature of its Mayor and its corporate seal (or a facsimile thereof) 347 to be impressed or otherwise reproduced hereon and attested by the manual or 348 facsimile signature of its Clerk, all as of the day of , 2014. 349 350 KODIAK ISLAND BOROUGH 351 352 353 /specimen/ 354 Borough Mayor 355 356 357 ATTEST: 358 359 360 361 /specimen/ 362 Borough Clerk 363 364 Section 8: Execution. The Bonds shall be executed in the name of the Borough by the 365 manual or facsimile signature of the Mayor, and its corporate seal (or a 366 facsimile thereof) shall be impressed or otherwise reproduced thereon and 367 attested by the manual or facsimile signature of the Borough Clerk. The 368 execution of a Bond on behalf of the Borough by persons who at the time of the 369 execution are duly authorized to hold the proper offices shall be valid and 370 sufficient for all purposes, although any such person shall have ceased to hold 371 office at the time of delivery of the Bond or shall not have held office on the 372 date of the Bond. 373 374 Section 9: Payment of Principal and Interest. The Bonds shall be payable in lawful money 375 of the United States of America which at the time of payment is legal tender for 376 the payment of public and private debts. When and if the Bond Bank or a 377 Financial Institution is the Registered Owner of the Bonds, payment of principal 378 of and interest on the Bonds shall be made as provided in the Loan Agreement. 379 When and if the Bond Bank or a Financial Institution is not the Registered 380 Owner of the Bonds, installments of principal of and interest on the Bonds shall 381 be paid by check mailed by first class mail to the Registered Owner as of the 382 record date for the installment payment at the address appearing on the Bond 383 Register; provided, that the final installment of principal and interest on a Bond 384 shall be payable upon presentation and surrender of the Bond by the 385 Registered Owner at the 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 Director 389 as Registrar for the Bonds. The Registrar shall keep, or cause to be kept, the 390 Bond Register at the principal office of the Borough. The Borough covenants 391 that, until all Bonds have been surrendered and canceled, it will maintain a 392 system for recording the ownership of each Bond that complies with the 393 provisions of Section 149 of the Code. The Borough and the Registrar may Kodiak Island Borough, Alaska Resolution No. FY2014-24 Page 8of13 394 treat the person in whose name any Bond shall be registered as the absolute 395 owner of such Bond for all purposes, whether or not the Bond shall be overdue, 396 and all payments of principal of and interest on a Bond made to the Registered 397 Owner thereof or upon its order shall be valid and effectual to satisfy and 398 discharge the liability upon such Bond to the extent of the sum or sums so paid, 399 and neither the Borough nor the Registrar shall be affected by any notice to the 400 contrary. 401 402 Section 11: Transfer and Exchange. Bonds shall be transferred only upon the Bond 403 Register. Upon surrender for transfer or exchange of any Bond at the office of 404 the Registrar, together with a written instrument of transfer or authorization for 405 exchange in form and with guaranty of signature satisfactory to the Registrar, 406 duly executed by the Registered Owner or the duly authorized attorney of the 407 Registered Owner, the Borough shall execute and deliver an equal aggregate 408 principal amount of Bonds of the same maturity of any authorized 409 denominations, subject to such reasonable regulations as the Borough may 410 prescribe and upon payment sufficient to reimburse it for any tax, fee or other 411 governmental charge required to be paid in connection with such transfer or 412 exchange. All Bonds surrendered for transfer or exchange shall be canceled 413 by the Registrar. 414 415 Section 12: Bonds Mutilated. Destroyed, Stolen, or Lost. Upon surrender to the Registrar 416 of a mutilated Bond, the Borough shall execute and deliver a new Bond of like 417 maturity and principal amount. Upon filing with the Registrar of evidence 418 satisfactory to the Borough that a Bond has been destroyed, stolen, or lost and 419 of the ownership thereof, and upon furnishing the Borough with indemnity 420 satisfactory to it, the; Borough shall execute and deliver a new Bond of like 421 maturity and principal amount. The person requesting the execution and 422 delivery of a new Bond under this section shall comply with such other 423 reasonable regulations as the Borough may prescribe and shall pay such 424 expenses as the Borough may incur in connection therewith. 425 426 Section 13: Disposition of the Sale Proceeds of the Bonds. The sale proceeds of the 427 Bonds representing accrued interest on the Bonds shall be applied to pay a 428 portion of the interest due on the Bonds on the first interest payment date for 429 the Bonds. The sale proceeds of the Bonds representing original issue 430 premium on the Bonds shall be applied to pay a portion of the interest due on 431 the Bonds on the first interest payment date for the Bonds, or Costs of the 432 Project, and shall be deposited in such manner as the Borough Manager or the 433 Borough Finance Director may determine. The remaining sale proceeds of the 434 Bonds shall be applied to pay Costs of the Project, and shall be deposited in 435 the appropriate funds or accounts of the Borough for such purposes. 436 Kodiak Island Borough, Alaska Resolution No. FY2014-24 Page 9 of 13 437 Section 14: Tax Covenants. The Borough covenants to comply with any and all applicable 438 requirements set forth in the Code in effect from time to time to the extent that 439 such compliance shall be necessary for the exclusion of the interest on the 440 Bonds from gross income for federal income tax purposes. The Borough 441 covenants that it will make ho use of the proceeds of the Bonds which will 442 cause the Bonds to be "arbitrage bonds" subject to federal income taxation by 443 reason of Section 148 of the Code. The Borough covenants that it will not take 444 or permit any action that would cause the Bonds to be "private activity bonds" 445 as defined in Section 141 of the Code. 446 447 Section 15: Amendatory and Supplemental Resolutions. 448 449 (a) The Assembly from time to time and at any time may adopt a resolution 450 or resolutions supplemental hereto, which resolution or resolutions thereafter 451 shall become a part of this Resolution, for any one or more of the following 452 purposes: 453 454 (1) To add to the covenants and agreements of the Borough in this 455 Resolution, other covenants and agreements thereafter to be observed 456 or to surrender any right or power herein reserved to or conferred upon 457 the Borough. 458 459 (2) To make such provisions for the purpose of curing any 460 ambiguities or of curing, correcting or supplementing any defective 461 provision contained in this Resolution or in regard to matters or 462 questions arising under this Resolution as the Assembly may deem 463 necessary or desirable and not inconsistent with this Resolution and 464 which shall not adversely affect the interests of the Registered Owners 465 of the Bonds. 466 467 Any such supplemental resolution may be adopted without the consent of the 468 Registered Owners of any of the Bonds at any time outstanding, 469 notwithstanding any of the provisions of subsection (b) of this section. 470 471 (b) With the consent of the Registered Owners of not less than 60 percent 472 in aggregate principal amount of the Bonds at the time outstanding, the 473 Assembly may adopt a resolution or resolutions supplemental hereto for the 474 purpose of adding any provisions to or changing in any manner or eliminating 475 any of the provisions of this Resolution or of any supplemental resolution; 476 provided, however, that no such supplemental resolution shall: 477 478 (1) Extend the fixed maturity of any of the Bonds, or reduce the rate 479 of interest thereon, or extend the time of payments of interest from their 480 due date, or reduce the amount of the principal thereof, or reduce any 481 premium payable on the redemption thereof, without the consent of the 482 Registered Owner of each Bond so affected; or 483 484 485 Kodiak Island Borough, Alaska Resolution No. FY2014-24 Page 10 of 13 486 (2) Reduce the aforesaid percentage of Registered Owners of 487 Bonds required to approve any such supplemental resolution without 488 the consent of the Registered Owners of all of the Bonds then 489 outstanding. 490 491 It shall not be necessary for the consent of the Registered Owners of the 492 Bonds under this subsection to approve the particular form of any proposed 493 supplemental resolution, but it shall be sufficient if such consent approves the 494 substance thereof. 495 496 (c) Upon the adoption of any supplemental resolution under this section, 497 this Resolution shall be deemed to be modified and amended in accordance 498 therewith, and the respective rights, duties, and obligations under this 499 Resolution of the Borough and all Registered Owners of outstanding Bonds 500 shall thereafter be subject in all respects to such modification and amendment, 501 and all the terms and conditions of the supplemental resolution shall be 502 deemed to be part of the terms and conditions of this Resolution for any and all 503 purposes. 504 505 (d) Bonds executed and delivered after the adoption of any supplemental 506 resolution under this section may bear a notation as to any matter provided for 507 in such supplemental resolution, and if such supplemental resolution shall so 508 provide, new Bonds modified so as to conform, in the opinion of the Borough, 509 to any modification of this Resolution contained in any such supplemental 510 resolution may be prepared by the Borough and delivered without cost to the 511 Registered Owners of the Bonds then outstanding, upon surrender for 512 cancellation of such Bonds in equal aggregate principal amounts. 513 514 Section 16: Defeasance. In the event money and/or non-callable Government Obligations 515 maturing at such times and bearing interest to be earned thereon in amounts 516 sufficient to redeem and retire any or all of the Bonds in accordance with their 517 terms are set aside in a special trust account to effect such redemption or 518 retirement and such moneys and the principal of and interest on such 519 Government Obligations are irrevocably set aside and pledged for such 520 purpose, then no further payments need be made to pay or secure the 521 payment of the principal of and interest on such Bonds and such Bonds shall 522 be deemed not to be outstanding. 523 524 Section 17: Sale of Bonds. The Bonds shall be sold at negotiated sale to the Bond Bank or 525 a Financial Institution as provided in the form of Loan Agreement or at public 526 sale as the Borough Manager and Finance Director determine is in the best 527 interest of the Borough. Subject to the limitations provided in Sections 2 and 4, 528 each of the Borough Manager and the Borough Finance Director is hereby 529 authorized to determine the aggregate principal amount, maturity amounts, 530 interest rates, yields, dated date, principal and interest payment dates, 531 redemption terms, if any, for the Bonds, and other details of the Bonds; 532 provided that the true interest cost of the Bonds, expressed as an annual rate, 533 does not exceed 6.0 percent. In determining the maturity amounts, interest 534 rates, yields, and redemption terms, if any, for the Bonds, the Borough 535 Manager or Borough Finance Director shall take into account those factors Kodiak Island Borough, Alaska Resolution No, FY2014-24 Page 11 of 13 536 which, in the judgment of each, will result in the lowest true interest cost on the 537 Bonds to their maturity, including without limitation current financial market 538 conditions and current interest rates for obligations comparable in tenor and 539 quality to the Bonds. Based upon the foregoing determinations, the Borough 540 Manager and the Borough Finance Director each is authorized to execute the 541 Loan Agreement, in substantially the form presented at this meeting, or to sell 542 the Bonds at public sale as they deem appropriate and cost effective to, and in 543 the best interest of, the Borough. 544 545 Section 18: Authority of Officers. The Mayor, the Borough Manager, the Borough Finance 546 Director, and the Borough Clerk each is authorized and directed to do and 547 perform all things and determine all matters not determined by this Resolution, 548 to the end that the Borough may carry out its obligations under the Bonds and 549 this Resolution. 550 551 Section 19: Prohibited Sale of Bonds. No person, firm, or corporation, or any agent or 552 employee thereof, acting as financial consultant to the Borough under an 553 agreement for payment in connection with the sale of the Bonds is eligible to 554 purchase the Bonds as a member of the original underwriting syndicate either 555 at public or private sale. 556 557 Section 20: Ongoing Disclosure. The Borough acknowledges that under Rule 15c2-12 of 558 the Securities and Exchange Commission (the "Rule") the Borough may now or 559 in the future be an "obligated person." In accordance with the Rule, and as the 560 Bond Bank or a Financial Institution may require, the Borough shall undertake 561 to provide certain annual financial information and operating data as shall be 562 set forth in the Loan Agreement. 563 564 Section 21: Miscellaneous. 565 566 (a) All payments made by the Borough of, or on account of, the principal of 567 or interest on the Bonds shall be made on the several Bonds ratably and in 568 proportion to the amount due thereon, respectively, for principal or interest as 569 the case may be. 570 571 (b) No recourse shall be had for the payment of the principal of or the 572 interest on the Bonds or for any claim based thereon or on this Resolution 573 against any member of the Assembly or officer of the Borough or any person 574 executing the Bonds. The Bonds are not and shall not be in any way a debt or 575 liability of the State of Alaska or of any political subdivision thereof, except the 576 Borough, and do not and shall not create or constitute an indebtedness or 577 obligation, either legal, moral, or otherwise, of such state or of any political 578 subdivision thereof, except the Borough. 579 580 Section 22: Severability. If any one or more of the provisions of this Resolution shall be 581 declared by any court of competent jurisdiction to be contrary to law, then such 582 provision shall be null and void and shall be deemed separable from the 583 remaining provisions of this Resolution and shall in no way affect the validity of 584 the other provisions of this Resolution or of the Bonds. 585 Kodiak Island Borough, Alaska Resolution No. FY2014-24 Page 12 of 13 586 Section 23: Effective Date. This Resolution shall become effective upon passage and 587 approval. 588 589 ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH 590 THIS SIXTEENTH DAY OF JANUARY, 2014 591 592 KODIAK ISLA D c *ROUGH 593 594 j 595 '� pp ') t/ 596 !Z 597 Ie fol Erie' Borough Mayor 598 599 ATTEST: 600 601 602 I ( 7 14 - 603 604 Nova M. Javier, MMC, trough Clerk Kodiak Island Borough, Alaska Resolution No. FY2014-24 Page 13 of 13