FY2017-10 Issuing A 'General Obligation School Refunding Bond' To Refund Some Principal Installments Of A 'General ObligationCERTIFICATE OF CLERK
I, NOVA JAVIER, Clerk of the Kodiak Island Borough (the "Borough"), HEREBY CERTIFY
that the document attached hereto is an accurate and complete copy of Resolution FY2017-10 of the
Borough adopted by the Borough Assembly at a meeting duly called and held September 15, 20165
and that Resolution No. FY2017-10 has not been modified, amended, repealed, or rescinded, but is
in full force and effect on the date hereof.
IN WITNESS WHEREOF, I have executed this certificate this day of
al
NOVA JAVIER, MMC
Borough Clerk
Kodiak Island Borough
51546706.1
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Introduced by:
Borough Manager
Requested by:
Finance Director
Drafted by:
Bond Counsel
Introduced on:
09/15/2016
Adopted on:
09/15/2016
KODIAK ISLAND BOROUGH
RESOLUTION NO. FY2017-10
A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY
AUTHORIZING THE BOROUGH TO ISSUE A GENERAL OBLIGATION
SCHOOL REFUNDING BOND TO REFUND CERTAIN PRINCIPAL
INSTALLMENTS OF AN OUTSTANDING GENERAL OBLIGATION
SCHOOL BOND OF THE BOROUGH AND TO PAY COSTS OF ISSUING
THE BOND, FIXING CERTAIN DETAILS OF SUCH BOND, AUTHORIZING
ITS SALE, AND PROVIDING FOR RELATED MATTERS
WHEREAS, pursuant to Ordinance No. FY2007-05 of the Kodiak Island Borough, Alaska (the
"Borough"), adopted on August 17, 2006, approved by a majority of the qualified voters voting on the
proposition at the regular Borough election held on October 3, 2006, and Resolution No. FY2008-12,
adopted December 6, 2007 (the "Bond Resolution"), the Borough issued its General Obligation
School Bond, 2008 Series A (the "2008 Bond") in the original principal amount of $8,000,000, of
which $5,620,000 is now outstanding; and
WHEREAS, under AS 29.47.300, if the Borough has outstanding general obligation bonds and the
Assembly determines it would be financially advantageous to refund those bonds, the Borough may
provide by resolution for the issuance of general obligation refunding bonds, and under AS 29.47.320,
no election is required to authorize the issuance and sale of refunding bonds; and Ili
WHEREAS, under AS 29.47.340, refunding bonds may be exchanged for the bonds being refunded;
and
WHEREAS, the Borough sold the 2008 Bond to the Alaska Municipal Bond Bank Authority (the "Bond
Bank"), as authorized by the Bond Resolution, on the terms and conditions set forth in the Bond
Resolution and in the loan agreement between the Borough and the Bond Bank dated as of April 1,
2008 (the "2008 Loan Agreement"); and
WHEREAS, the Bond Bank issued its General Obligation Bonds, 2008 Series One (the "2008 Bond
Bank Bonds"), among other purposes, to provide funds to purchase the 2008 Bond, as provided in
the 2008 Loan Agreement; and
WHEREAS, the Bond Bank has expressed its intent to issue refunding bonds (the "Bond Bank
Refunding Bonds") for the purpose of refunding a portion of the 2008 Bond Bank Bonds and
achieving a debt service savings; and
WHEREAS, Section 6 of the 2008 Loan Agreement provides that payments of principal of and
interest on the 2008 Bond may be adjusted to reduce debt service on the 2008 Bond if the Bond Bank
is able to achieve debt service savings by refunding the 2008 Bond Bank Bonds; and
WHEREAS, the Bond Bank has offered to enter into an Amendatory Loan Agreement (the
"Amendatory Loan Agreement") to effect a reduction in debt service on all or a portion of the principal
installments of the 2008 Bond payable on or after April 1, 2017 (the "Refundable Principal
Installments"); and
Kodiak Island Borough, Alaska Resolution No. FY2017-10
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WHEREAS, the Assembly wishes to effect a reduction in debt service on all or a portion of the
Refundable Principal Installments by entering into the Amendatory Loan Agreement, issuing the Bond
(and a replacement 2008 Bond) in exchange for the 2008 Bond and participating in the refunding of a
portion of the 2008 Bond Bank Bonds; and
WHEREAS, the Assembly finds that it is necessary and appropriate to delegate to each of the
Borough Manager and Borough Finance Director authority to determine the maturity amounts,
interest rates, and other details of the bonds, and to determine other matters that are not provided for
in this Resolution;
NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND
BOROUGH THAT:
Section 1: Definitions. In addition to terms which are defined in the recitals above, the following
terms shall have the following meanings in this Resolution:
(a) "Assembly" means the Assembly of the Kodiak Island Borough, as the
general legislative authority of the Kodiak Island Borough, as the same shall be duly
and regularly constituted from time to time.
(b) "Bond" means the "General Obligation School Refunding Bond" of the Kodiak
Island Borough, the issuance and sale of which are authorized herein.
(c) "Bond Bank Bonds" means the series of general obligation bonds issued by
the Bond Bank, all or part of the proceeds of which are used to purchase the Bond.
(d) "Bond Register" means the registration books maintained by the Registrar,
which include the names and addresses of the Registered Owners of the Bond or
their nominees.
(e) "Borough" means the Kodiak Island Borough, a municipal corporation of the
State of Alaska, organized as a second class borough under Title 29 of the Alaska
Statutes.
(f) "Borough Manager" means the Manager or Administrative Official of the
Borough.
(g) "Code" means the Internal Revenue Code of 1986, as amended from time to
time, together with all regulations applicable thereto.
(h) "Government Obligations" means obligations that are either (i) direct
obligations of the United States of America or (ii) obligations of an agency or
instrumentality of the United States of America the timely payment of the principal of
and interest on which are unconditionally guaranteed by the United States of
America.
(i) "Registered Owner" means the person named as the registered owner of a
Bond in the Bond Register.
0) "Registrar" means the Borough Finance Director, or any successor that the
Borough may appoint by resolution.
(k) "Resolution" means this Resolution No. FY2017-10 of the Borough.
Kodiak Island Borough, Alaska
Resolution No. FY2017-10
Page 2 of 9
108 Section 2: Authorization of Bond and Purpose of Issuance. The Assembly hereby determines it
109 would be financially advantageous to refund all or a portion of the Refundable
110 Principal Installments by issuing the Bond (and a replacement 2008 Bond) on the
111 terms and conditions provided in this Resolution. For the purpose of providing the
112 funds required to refund all or a portion of the Refundable Principal Installments and
113 to pay all costs incidental thereto and to the issuance of the Bond, the Borough
114 hereby authorizes and determines to issue and sell the Bond in the principal amount
115 of not to exceed $6,000,000. The Bond shall be designated "Kodiak Island Borough
116 General Obligation School Refunding Bond," with such additional series and year
117 designation as the Borough Manager or the Borough Finance Director may fix and
118 determine.
119
120 The Borough Manager and/or the Borough Finance Director are hereby authorized to
121 fix and determine which of the Refundable Principal Installments are to be refunded
122 by issuing the Bond (and a replacement 2008 Bond) in exchange therefor.
123
124 Section 3:
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132 Section 4:
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Section 5:
Obligation of Bond. The Bond shall be a direct and general obligation of the
Borough, and the full faith and credit of the Borough are hereby pledged to the
payment of the principal of and interest on the Bond. The Borough hereby irrevocably
pledges and covenants that it will levy and collect taxes upon all taxable property
within the Borough without limitation as to rate or amount, in amounts sufficient
together with other funds legally available therefor, to pay the principal of and interest
on the Bond as the same become due and payable.
Designation, Maturities, Interest Rates, and Other Details of Bond. The Bond shall
be designated "Kodiak Island Borough, Alaska, General Obligation School Refunding
Bond." Each principal installment of the Bond shall be in the denomination of $5,000
or any integral multiple thereof, shall be numbered in the manner and with such
additional designation as the Registrar deems necessary for purposes of
identification, and may have endorsed thereon such legends or text as may be
necessary or appropriate to conform to the rules and regulations of any governmental
authority or any usage or requirement of law with respect thereto.
The Bond shall bear interest payable semi-annually on the dates and shall mature on
the date and each principal installment shall be payable annually in the amount and
on the dates, all as shall be set forth in the Amendatory Loan Agreement. Interest will
be computed on the basis of a 360-day year consisting of twelve 30-day months.
Subject to Section 2 and the remainder of this Section, the dated date, the principal
installment and interest payment dates, the record dates for interest payments, the
aggregate principal amount, the amount of each principal installment, and the interest
rate on each principal installment shall be determined at the time of execution of the
Amendatory Loan Agreement under Section 15, provided that (i) no rate of interest
on any principal installment shall exceed the rate of interest on the corresponding
maturity of the Bond Bank Refunding Bonds; and (ii) the net present value of the
savings to the Borough effected by issuing the Bond (and a replacement 2008 Bond)
and refunding the Refundable Principal Installments that are refunded shall be at
least 3 percent of the aggregate principal amount of the Refundable Principal
Installments that are refunded; and (iii) the Bond shall mature on or before six months
after the date on which the last Refundable Principal Installment that is refunded is
payable.
Optional Prepay. The principal installments of the Bond shall be subject to
prepayment, at the Borough's option, on the dates and at the prices to be set forth in
the Amendatory Loan Agreement. If fewer than all of the principal installments of the
Kodiak Island Borough, Alaska
Resolution No. FY2017-10
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Bond are to be prepaid, the principal installments to be prepaid shall be determined
by the Borough. Notice of any such prepayment shall be sent by the Borough not
less than 50 days prior to the date fixed for prepayment by first class mail to the
Registered Owner at the Registered Owner's address as it then appears on the Bond
Register. Notice of prepayment having been duly given and the prepayment having
been duly effected, interest on the principal installments to be prepaid shall cease to
accrue on the date fixed for prepayment.
Section 6: Form of Bond. Each Bond shall be in substantially the following form, subject to the
provisions of the Amendatory Loan Agreement and with such variations, omissions,
and insertions as may be required or permitted by this Resolution:
NO.
UNITED STATES OF AMERICA
KODIAK ISLAND BOROUGH, ALASKA
GENERAL OBLIGATION SCHOOL REFUNDING BOND
REGISTERED OWNER: ALASKA MUNICIPAL BOND BANK AUTHORITY
PRINCIPAL AMOUNT:
The Kodiak Island Borough (the "Borough"), a municipal corporation of the
State of Alaska, hereby acknowledges itself to owe and for value received promises
to pay to the Registered Owner identified above, or its registered assigns, the
principal amount identified above in the following installments on each of the
following years, and to pay interest on such installments from the date hereof,
payable on 17 20 , and semiannually thereafter on ® 1, and ® 1, of
each year, at the rates per annum as follows:
Maturity Principal Interest
nntA Amoi int RatA
For so long as the Alaska Municipal Bond Bank Authority (the "Bond Bank")
is the Registered Owner, payment of principal and interest shall be made as provided
in the Loan Agreement between the Bond Bank and the Borough, as amended (the
"Amended Loan Agreement"). When and if this Bond is not owned by the Bond Bank,
installments of principal of and interest on this Bond shall be paid by check or draft
mailed by first class mail to the Registered Owner as of the close of business on the
15th day of the month before each installment payment date; provided, that the final
installment of principal of and interest on this Bond shall be payable upon
presentation and surrender of this Bond by the Registered Owner at the office of the
Registrar. Interest will be computed on the basis of a 360-day year consisting of
twelve 30-day months. Both principal of and interest on this Bond are payable in
lawful money of the United States of America which, on the respective dates of
payment thereof, shall be legal tender for the payment of public and private debts.
This Bond is the General Obligation School Refunding Bond of the Kodiak
Island Borough, Alaska, and is authorized for the purpose of refunding certain
principal installments of an outstanding general obligation bond of the Borough under
Resolution No. FY2017-10 of the Borough entitled:
Kodiak Island Borough, Alaska
Resolution No. FY2017-10
Page 4 of 9
218
219 A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY
220 AUTHORIZING THE BOROUGH TO ISSUE A GENERAL OBLIGATION
221 SCHOOL REFUNDING BOND TO REFUND CERTAIN PRINCIPAL
222 INSTALLMENTS OF AN OUTSTANDING GENERAL OBLIGATION
223 SCHOOL BOND OF THE BOROUGH AND TO PAY COSTS OF ISSUING
224 THE BOND, FIXING CERTAIN DETAILS OF SUCH BOND, AUTHORIZING
225 ITS SALE, AND PROVIDING FOR RELATED MATTERS
226
227 (the "Resolution").
228
229 Installments of principal of this Bond maturing on and after 11 20 ,
230 shall be subject to prepayment on and after 17 20 , at the option of the
231 Borough (subject to any applicable provisions of the Amended Loan Agreement), in
232 such principal amounts and from such maturities as the Borough may determine, and
233 by lot within a maturity, at a redemption price equal to the principal amount to be
234 prepaid, plus accrued interest to the date of prepayment.
235
236 This Bond is transferable as provided in the Bond Resolution, (i) only upon
237 the Bond Register of the Borough, and (ii) upon surrender of this Bond together with
238 a written instrument of transfer duly executed by the Registered Owner or the duly
239 authorized attorney of the Registered Owner, and thereupon a new fully registered
240 Bond in the same aggregate principal amount and maturity shall be issued to the
241 transferee in exchange therefor as provided in the Bond Resolution and upon the
242 payment of charges, if any, as therein prescribed. The Borough may treat and
243 consider the person in whose name this Bond is registered as the absolute owner
244 hereof for the purpose of receiving payment of, or on account of, the principal or
245 redemption price, if any, hereof and interest due hereon and for all other purposes
246 whatsoever.
247
248 This Bond is a general obligation of the Kodiak Island Borough, and the full
249 faith and credit of the Borough are pledged for the payment of the principal of and
250 interest on this Bond as the same shall become due.
251
252 IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts or things
253 required by the constitution or statutes of the State of Alaska to exist, to have
254 happened or to have been performed precedent to or in the issuance of this Bond
255 exist, have happened and have been performed, and that this Bond, together with all
256 other indebtedness of the Borough, is within every debt and other limit prescribed by
257 such constitution or statutes.
258
259 IN WITNESS WHEREOF, THE KODIAK ISLAND BOROUGH, ALASKA, has
260 caused this Bond to be signed in its name and on its behalf by the manual or
261 facsimile signature of its Mayor and its corporate seal (or a facsimile thereof) to be
262 impressed or otherwise reproduced hereon and attested by the manual or facsimile
263 signature of its Clerk, all as of the day of ,
264
265 KODIAK ISLAND BOROUGH
266
267 /specimen/
268 Borough Mayor
269
270 ATTEST:
271
272 /specimen/
Kodiak Island Borough, Alaska Resolution No. FY2017-10
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273 Borough Clerk
274
275 Section 7: Execution. The Bond shall be executed in the name of the Borough by the manual or
276 facsimile signature of the Mayor, and its corporate seal (or a facsimile thereof) shall
277 be impressed or otherwise reproduced thereon and attested by the manual or
278 facsimile signature of the Borough Clerk. The execution of a Bond on behalf of the
279 Borough by persons who at the time of the execution are duly authorized to hold the
280 proper offices shall be valid and sufficient for all purposes, although any such person
281 shall have ceased to hold office at the time of delivery of the Bond or shall not have
282 held office on the date of the Bond.
283
284 Section 8: Payment of Principal Installments and Interest. The Bond shall be payable in lawful
285 money of the United States of America which at the time of payment is legal tender
286 for the payment of public and private debts. For so long as the Bond Bank is the
287 Registered Owner of the Bond, payment of principal installments of and interest on
288 the Bond shall be made as provided in the Loan Agreement, as amended by the
289 Amendatory Loan Agreement. When and if the Bond Bank is not the Registered
290 Owner of the Bond, installments of principal of and interest on the Bond shall be paid
291 by check mailed by first class mail to the Registered Owner as of the record date for
292 the installment payment at the address appearing on the Bond Register; provided,
293 that the final installment of principal and interest on the Bond shall be payable upon
294 presentation and surrender of the Bond by the Registered Owner at the office of the
295 Registrar.
296
297 Section 9: Registration. The Bond shall be issued only in registered form as to both principal
298 and interest. The Borough designates the Borough Finance Director as Registrar for
299 the Bond. The Registrar shall keep, or cause to be kept, the Bond Register at the
300 principal office of the Borough. The Borough covenants that, until the Bond has been
301 surrendered and canceled, it will maintain a system for recording the ownership of
302 the Bond that complies with the provisions of Section 149 of the Code. The Borough
303 and the Registrar may treat the person in whose name the Bond shall be registered
304 as the absolute owner of such Bond for all purposes, whether or not the Bond shall
305 be overdue, and all payments of principal of and interest on the Bond made to the
306 Registered Owner thereof or upon its order shall be valid and effectual to satisfy and
307 discharge the liability upon such Bond to the extent of the sum or sums so paid, and
308 neither the Borough nor the Registrar shall be affected by any notice to the contrary.
309
310 Section 10: Transfer and Exchange. The Bond shall be transferred only upon the Bond Register.
311 Upon surrender for transfer or exchange of the Bond at the office of the Registrar,
312 together with a written instrument of transfer or authorization for exchange in form
313 and with guaranty of signature satisfactory to the Registrar, duly executed by the
314 Registered Owner or the duly authorized attorney of the Registered Owner, the
315 Borough shall execute and deliver a Bond in equal aggregate principal amount,
316 subject to such reasonable regulations as the Borough may prescribe and upon
317 payment sufficient to reimburse it for any tax, fee or other governmental charge
318 required to be paid in connection with such transfer or exchange. If the Bond is
319 surrendered for transfer or exchange it shall be canceled by the Registrar.
320
321 Section 11: Bond Mutilated. Destroyed, Stolen, or Lost. Upon surrender to the Registrar of a
322 mutilated Bond, the Borough shall execute and deliver a new Bond of like maturity
323 and principal amount. Upon filing with the Registrar of evidence satisfactory to the
324 Borough that a Bond has been destroyed, stolen, or lost and of the ownership
325 thereof, and upon furnishing the Borough with indemnity satisfactory to it, the
326 Borough shall execute and deliver a new Bond of like maturity and principal amount.
327 The person requesting the execution and delivery of a new Bond under this Section
Kodiak Island Borough, Alaska Resolution No. FY2017-10
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328 shall comply with such other reasonable regulations as the Borough may prescribe
329 and shall pay such expenses as the Borough may incur in connection therewith.
330
331 Section 12: Tax Covenants. The Borough covenants to comply with any and all applicable
332 requirements set forth in the Code in effect from time to time to the extent that such
333 compliance shall be necessary for the exclusion of the interest on the Bond from
334 gross income for federal income tax purposes. The Borough covenants that it will
335 make no use of the proceeds of the Bond which will cause the Bond to be an
336 "arbitrage bond" subject to federal income taxation by reason of Section 148 of the
337 Code. The Borough covenants that it will not take or permit any action that would
338 cause the Bond to be a "private activity bond" as defined in Section 141 of the Code.
339
340 Section 13: Amendatory and Supplemental Resolutions.
341
342 (a) The Assembly from time to time and at any time may adopt a resolution or
343 resolutions supplemental hereto, which resolution or resolutions thereafter shall
344 become a part of this Resolution, for any one or more of the following purposes:
345
346 (1) To add to the covenants and agreements of the Borough in this
347 Resolution, other covenants and agreements thereafter to be observed or to
348 surrender any right or power herein reserved to or conferred upon the
349 Borough.
350
351 (2) To make such provisions for the purpose of curing any ambiguities or
352 of curing, correcting or supplementing any defective provision contained in
353 this Resolution or in regard to matters or questions arising under this
354 Resolution as the Assembly may deem necessary or desirable and not
355 inconsistent with this Resolution and which shall not adversely affect the
356 interests of the Registered Owner of the Bond.
357
358 Any such supplemental resolution may be adopted without the consent of the
359 Registered Owner of the Bond at any time outstanding, notwithstanding any of the
360 provisions of subsection (b) of this Section.
361
362 (b) With the consent of the Registered Owner, the Assembly may adopt a
363 resolution or resolutions supplemental hereto for the purpose of adding any
364 provisions to or changing in any manner or eliminating any of the provisions of this
365 Resolution or of any supplemental resolution.
366
367 It shall not be necessary for the consent of the Registered Owner of the Bond under
368 this subsection to approve the particular form of any proposed supplemental
369 resolution, but it shall be sufficient if such consent approves the substance thereof.
370
371 (c) Upon the adoption of any supplemental resolution under this Section, this
372 Resolution shall be deemed to be modified and amended in accordance therewith,
373 and the respective rights, duties, and obligations under this Resolution of the
374 Borough and the Registered Owner shall thereafter be subject in all respects to such
375 modification and amendment, and all the terms and conditions of the supplemental
376 resolution shall be deemed to be part of the terms and conditions of this Resolution
377 for any and all purposes.
378
379 (d) Bonds executed and delivered after the adoption of any supplemental
380 resolution under this Section may bear a notation as to any matter provided for in
381 such supplemental resolution, and if such supplemental resolution shall so provide, a
382 new Bond modified so as to conform, in the opinion of the Borough, to any
Kodiak Island Borough, Alaska Resolution No. FY2017-10
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modification of this Resolution contained in any such supplemental resolution may be
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prepared by the Borough and delivered without cost to the Registered Owner of the
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Bond, upon surrender for cancellation of such Bond in an equal aggregate principal
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amount.
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Section 14:
Defeasance. In the event money and/or nor -callable Government Obligations
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maturing at such times and bearing interest to be earned thereon in amounts
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sufficient to redeem and retire the Bond in accordance with its terms are set aside in
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a special trust account to effect such redemption or retirement and such moneys and
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the principal of and interest on such Government Obligations are irrevocably set
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aside and pledged for such purpose, then no further payments need be made to pay
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or secure the payment of the principal of and interest on the Bond and the Bond shall
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be deemed not to be outstanding.
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Section 15:
Exchange of the Bond; Amendatory Loan Agreement; Continuing Disclosure
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Certificate. The exchange of the Bond for all the Refundable Principal Installments
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that are refunded (and the issuance of a replacement 2008 Bond), as provided in the
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Amendatory Loan Agreement and this Resolution, is hereby authorized and
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approved. The Amendatory Loan Agreement and the Continuing Disclosure
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Certificate in substantially the form filed with this Resolution are hereby approved.
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The Mayor and the Borough Manager are each hereby authorized to execute and
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deliver the Amendatory Loan Agreement and the Continuing Disclosure Certificate in
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such forms, together with such changes not inconsistent herewith as may be
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approved by the Mayor or the Borough Manager (such approval to be conclusively
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evidenced by such official's execution and delivery of such document).
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Section 16:
Authority of Officers. The Mayor, the Borough Manager, the Borough Finance
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Director, and the Borough Clerk each is authorized and directed to do and perform all
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things and determine all matters not determined by this Resolution, to the end that
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the Borough may carry out its obligations under the Bond and this Resolution.
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Section 17:
Ongoing Disclosure. The Borough acknowledges that under Rule 15c2-12 of the
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Securities and Exchange Commission (the "Rule") the Borough may now or in the
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future be an "obligated person." In accordance with the Rule, and as the Bond Bank
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may require, the Borough shall undertake to provide certain annual financial
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information and operating data as shall be set forth in the Amendatory Loan
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Agreement.
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Section 18:
Miscellaneous. No recourse shall be had for the payment of the principal of or the
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interest on the Bond or for any claim based thereon or on this Resolution against any
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member of the Assembly or officer of the Borough or any person executing the Bond.
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The Bond is not and shall not be in any way a debt or liability of the State of Alaska
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or of any political subdivision thereof, except the Borough, and does not and shall not
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create or constitute an indebtedness or obligation, either legal, moral, or otherwise, of
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such state or of any political subdivision thereof, except the Borough.
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Section 19:
Severability. If any one or more of the provisions of this Resolution shall be declared
430
by any court of competent jurisdiction to be contrary to law, then such provision shall
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be null and void and shall be deemed separable from the remaining provisions of this
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Resolution and shall in no way affect the validity of the other provisions of this
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Resolution or of the Bond.
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Section 20:
Effective Date. This Resolution shall become effective upon passage and approval.
436
Kodiak Island Borough, Alaska Resolution No. FY2017-10
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ADOPTED BY THE ASSEMBLY OF TH KODIAK ISLAND BOROUGH
THIS 1'5DAY OF , 2016
ATTEST:
NV V
ova M. Javier, orough CI r
KODIAK ISLAN77e
OUGH
/
errol Frien�r B4ough Mayor
Kodiak Island Borough, Alaska
Resolution No. FY2017-10
Page 9 of 9