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November 3, 2016
City and Borough of Juneau
Juneau, Alaska
Alaska Municipal Bond Bank
Juneau, Alaska
Re: City and Borough of Juneau, Alaska
General Obligation School Refunding Bond, 2016 - $17,575,000
Ladies and Gentlemen:
We have acted as bond counsel to the City and Borough of Juneau, Alaska (the "City and
Borough"), and have examined a certified transcript of the proceedings taken in the matter of the
issuance by the City and Borough of its General Obligation School Refunding Bond, 2016, dated
November 3, 2016, in the total principal amount of $17,575,000 (the "Bond"), The Bond is
issued pursuant to Ordinance Serial No. 2016-31 of the City and Borough passed on
September 12, 2016, and Resolution No. 2772 passed on October 17, 2016 (together, the "Bond
Ordinance"). As authorized by the Bond Ordinance, the City and Borough has entered into a
loan agreement dated October 18, 2016 (the "Loan Agreement") with the Alaska Municipal
Bond Bank (the "Bond Bank") for the sale of the Bond to the Bond Bank. Capitalized terms not
otherwise defined in this opinion shall have the meanings given such terms in the Bond
Ordinance.
The Bond is not subject to prepayment.
As to questions of fact material to our opinion, we have relied on representations of the
City and Borough contained in the Bond Ordinance and Loan Agreement and in the certified
proceedings and other certifications of public officials and others furnished to us without
undertaking to verify the same by independent investigation.
Based on the foregoing, we are of the opinion that, under existing law:
1. The Bond has been legally issued and constitutes a valid and binding general
obligation of the City and Borough, except to the extent that the enforcement of the rights and
remedies of the holders and owners of the Bond may be limited by laws relating to bankruptcy,
insolvency, moratorium, reorganization or other similar laws of general application affecting the
rights of creditors, by the application of equitable principles and the exercise of judicial
discretion.
IIIin
November 3, 2016
Page 2
2. Both principal of and interest on the Bond are payable out of annual levies of
ad valorem taxes to be made upon all of the taxable property within the City and Borough
without limitation as to rate or amount and in amounts which, together with. other available
funds, will be sufficient to pay such principal and interest as the same shall become due.
3. The City and Borough is duly organized and legally existing under the laws of the
State of Alaska.
4. The Bond has been duly authorized and executed by the City and Borough and is
issued in full compliance with the provisions of the Constitution and laws of the State of Alaska
and the legislation of City and Borough relating thereto.
5. The Loan Agreement has been duly authorized, executed, delivered by, and
(assuming due authorization, execution and delivery of the Loan Agreement by the Bond Bank)
constitutes a valid and binding agreement of the City and Borough, enforceable in accordance
with its terms, except for provisions therein that purport to obligate the City and Borough to
indemnify the Bond Bank and except to the extent that the enforcement of the rights and
remedies of the Bond Bank may be subject to the laws of bankruptcy, insolvency, moratorium,
reorganization or other similar laws of general application affecting the rights of creditors, by the
application of equitable principles and the exercise of judicial discretion.
6. Interest on the Bond is excludable from gross income for federal income tax
purposes and is not an item of tax preference for purposes of the federal alternative minimum tax
imposed on individuals and corporations; however, interest on the Bond is taken into account in
determining adjusted current earnings for the purpose of computing the alternative minimum tax
imposed on certain corporations. The opinion set forth in the preceding sentence is subject to the
condition that the City and Borough comply with all requirements of the Internal Revenue Code
of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the Bond
in order that the interest thereon be, and continue to be, excludable from gross income for federal
income tax purposes. The City and Borough has covenanted to comply with all applicable
requirements. Failure to comply with certain of such covenants may cause interest on the Bond
to be included in gross income for federal income tax purposes retroactively to the date of
issuance of the Bond.
7. Interest on the Bond is not included in taxable income for purposes of the Alaska
income tax imposed on corporations. Interest on the Bond may be indirectly subject to the
Alaska alternative minimum tax imposed on corporations to the extent that interest on the Bond
is subject to the federal alternative minimum tax.
The City and Borough has not designated the Bond as a "qualified tax-exempt
obligation" under Section 265(b)(3) of the Code.
We express no opinion regarding any other federal, state or local tax consequences
arising with respect to ownership of the Bond.
November 3, 2016
Page 3
We have not been engaged nor have we undertaken to review the accuracy, completeness
or sufficiency of the official statement or other offering material related to the Bond Bank's
General Obligation and Refunding Bonds, 2016 Series Three and General Obligation and
Refunding Bonds, 2016 Series Four (except to the extent, if any, stated in the official statement),
and we express no opinion relating thereto.
This opinion is given as of the date hereof and we assume no obligation to update, revise
or supplement this opinion to reflect any facts or circumstances that may hereafter come to our
attention or any changes in law that may hereafter occur.
Very truly yours,
K&L GATES LIP
500034321 vi