Tab_143TAX CERTIFICATE
I, the undersigned officer of the City of Ketchikan, Alaska (the "City"), make this
certification for the benefit of all persons interested in the exclusion from gross income for
federal income tax purposes of the interest to be paid on the City's Port Revenue Refunding
Bond, 2016 (the "Refunding Bond"), and the City's General Obligation Bond, 2016 (Harbor
Improvements) (the "New Money Bond" and, together with the Refunding Bond, the "Bonds"),
which are being issued and delivered simultaneously with the delivery of this certificate. I do
hereby certify as follows in good faith on the date of issue of the Bonds:
1. Responsible Officer. I am the duly chosen, qualified and acting officer of the City
for the office shown below my signature; as such, I am familiar with the facts herein certified
and I am duly authorized to execute and deliver this certificate on behalf of the City. I am the
officer of the City charged, along with other officers of the City, with responsibility for issuing
the Bonds.
2. Code and Regulations. The Bonds are subject to the provisions of sections 141,
148, 149 and 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and the
Treasury Regulations (the "Regulations") promulgated under sections 141, 148, 149 and 150 of
the Code. These provisions of the Code and Regulations impose restrictions on the use of bond-
financed facilities and on the investment of bond proceeds. This certificate is being executed and
delivered pursuant to sections 1.141-1 through 1.141-15, 1.148-0 through 1.148-11, 1.149(b)-i,
1.149(d)-i, 1.149(g)-i, 1.150-1 and 1.150-2 of the Regulations.
3. Definitions. The capitalized terms used in this certificate (unless otherwise
defined) that are defined in Ordinance No. 06-1549, passed on June i, 2006, and Resolution
No. 06-2171, adopted on July 12, 2006, authorizing the City's Port Revenue Bond, 2006 (the
"Refunded Bond"), and Resolution No. 16-2636, adopted on September 15, 2016, authorizing
the refinancing of the Refunded Bond and the issuance of the Refunding Bond (together, the
"Port Bond Legislation") shall for all purposes hereof have the meanings therein specified. The
capitalized terms used in this certificate (unless otherwise defined) that are defined in Ordinance
No. 12-1697, passed on April 5, 2012, and Resolution No. 16-2635, adopted on September 15,
2016, authorizing the issuance of the New Money Bond (together, the "Harbor Bond
Legislation" and, together with the Port Bond Legislation, the "Bonds Legislation") shall for all
purposes hereof have the meanings therein specified. All terms defined in the Code or
Regulations shall for all purposes of this certificate have the same meanings as given to those
terms in the Code and Regulations unless the context clearly requires otherwise.
4. Reasonable Expectations. The facts and estimates that are set forth in this
certificate are accurate. The expectations that are set forth in this certificate are reasonable in
light of such facts and estimates. There are no other facts or estimates that would materially
change such expectations. The undersigned has to the extent necessary reviewed the
certifications set forth herein with other representatives of the City as to such accuracy and
reasonableness. The undersigned has also relied, to the extent appropriate, on pricing
information provided by RBC Capital Markets (the "Underwriter") as underwriter of bonds
issued by the Alaska Municipal Bond Bank (the "Bond Bank") and the Certificate of Exchange
with respect to the Refunded Bond executed by the City and the Bond Bank. The undersigned is
-i -
DOCSSF/132981v7/200661-0032
aware of no fact, estimate or circumstance that would create any doubt regarding the accuracy or
reasonableness of all or any portion of such certificate.
5. Description of Governmental Purpose. The City is issuing the Bonds pursuant to
the Bonds Legislation for the purposes of (a) refinancing the Refunded Bond through an
exchange of bonds, (b) financing new money capital expenditures for harbor facilities of the City
(the "2016 Harbor Project"), (c) paying the cost of acquiring a reserve fund surety policy and a
municipal bond insurance policy for the Bond Bank's bonds (the "Credit Enhancement"), and (d)
paying the costs of issuance of the Bonds. The Refunded Bond was issued for the purposes of
funding (a) the acquisition, construction and equipping of improvements to the Port Facilities
and related transportation and access improvements (the "2006 Port Project" and, together with
the 2016 Harbor Project, the "Projects"), (b) funding the Reserve Account, and (c) paying the
costs of issuance of the Refunded Bond.
6. The Refunded Bond. All of the sale and investment proceeds allocable to the
Refunded Bond have been expended. No portion of the proceeds of the Refunded Bond was
used to pay the principal of, or interest on, any other issue of governmental obligations. In
addition, other than to the extent of preliminary expenditures (i.e., architectural, engineering,
surveying, soil testing, reimbursement bond issuance, and similar costs that are incurred prior to
commencement of acquisition, construction, or rehabilitation of a project, other than land
acquisition, site preparation, and similar costs incident to commencement of construction), no
portion of the proceeds of the Refunded Bond was used to reimburse the City for any
expenditures made by the City prior to the issuance date of the Refunded Bond.
7. The 2016 Harbor Project. The City has entered into or within six months of the
issue date of the Bond will enter into a binding obligation to expend at least five percent of the
net sale proceeds of the New Money Bond on the 2016 Harbor Project. Work on the
construction and acquisition of the 2016 Harbor Project will proceed with due diligence to the
completion thereof, and at least eighty five percent (85%) of the net sale proceeds derived from
the sale of the New Money Bond will be expended within three years of the date hereof on the
2016 Harbor Project.
8. No Working Capital. The City only expended proceeds of the Refunded Bond,
and will only expend proceeds of the Bonds, for (i) costs that would be chargeable to a capital
account if the City's income were subject to federal income tax purposes, (ii) costs of issuance of
the Refunded Bond and the Bonds, respectively, and (iii) cost of the Credit Enhancement.
9. Expenditure of Sale Proceeds of the Bond. The City sold the Bonds to the Bond
Bank. The Bond Bank allocated a portion of the proceeds of the Bond Bank Bonds to
acquisition of the Bonds. The sale proceeds from the issuance of the Refunding Bond in
exchange for the Refunded Bond and the issuance of the New Money Bond will be deemed to be
$33,518,869.55.
(a) The sale proceeds of the Bonds will be expended as follows:
(i) The amount of $31,264,456.41 will be deemed used to pay the
principal of and interest on the Refunded Bond on the date hereof through the exchange of the
-2-
DOCSSF/1 32981 v7/200661-0O32
Bond for the Refunded Bond. No portion of the proceeds of the Bonds is expected to be used to
pay any interest on, or principal of, any issue of governmental obligations other than the Bonds
and the Refunded Bond.
(ii) The amount of $2,000,000.00 will be allocated to pay costs of the
2016 Harbor Project.
(iii) The amount of $234,337.58 will be used to pay costs of issuance of
the Bonds.
(iv) The amount of $20,075.56 will be used to pay the cost of acquiring
the Credit Enhancement.
(b) Prior Reserve Amount. As of the date hereof, the City has $2,634,321.52
of proceeds of the Refunded Bond in the Reserve Account with respect to the Refunded Bond
(the "Prior Reserve Amount"), of which $394,321 .S2will be used on November 3, 2016, to
discharge a portion of the Refunded Bond. That amount, when added to the amount of proceeds
of the Refunded Bonds allocated to costs of issuance paid from proceeds of the Refunded Bond,
does not exceed five percent of the proceeds of the Refunded Bond.
(c) No Sale of Conduit Loan. No portion of the sale proceeds of the Bonds
has been or will be used to acquire, finance, or refinance any conduit loan.
(d) No Overissuance. The proceeds of the Bonds will not exceed the amount
necessary to accomplish the governmental purposes of the Bonds.
(e) Allocations and Accounting. The proceeds of the New Money Bond will
be allocated to expenditures not later than 18 months after the later of the date the expenditure is
made or the date the 2016 Harbor Project is placed in service, but in no event later than the date
that is 60 days after the fifth anniversary of the date hereof. The allocation of proceeds will be
made by consistently employing the direct-tracing method of accounting. No proceeds of the
Bonds will be allocated to any expenditure to which proceeds of any other obligations have
heretofore been allocated.
10. Pre-Issuance Accrued Interest. The Bonds are dated as of the initial date of
delivery to the Bond Bank, and the City will receive no pre-issuance accrued interest on the
Bonds.
11. Reserved.
12. Transferred Proceeds. Except for proceeds of the Refunded Bond on deposit in
the Reserve Account that will become transferred proceeds of the Refunding Bond on November
3, 2016, there are no transferred proceeds with respect to the Bonds, because all of the proceeds
of the Refunded Bond have been or will be expended prior to the first dates on which amounts
are disbursed to pay principal of the Refunded Bond.
13. No Replacement Proceeds. Other than amounts described in this certificate, there
are no amounts that have a sufficiently direct nexus to the Bonds or to the governmental
-3-
DOCSSF/1 32981v71200661-0032
purposes of the Bonds, including the expected use of amounts to pay debt service on the
Refunded Bond, that the amounts would have been used for that governmental purpose if the
proceeds of the Bond were not used or to be used for that purpose. Specifically,
(a) No Sinking Funds. Other than to the extent described in this certificate,
there is no debt service fund, redemption fund, reserve fund, replacement fund, or similar fund
reasonably expected to be used directly or indirectly to pay principal or interest on the Bonds.
(b) No Pledged Funds. Other than amounts described in this certificate, there
is no amount that is directly or indirectly pledged to pay principal or interest on the Bonds, or to
a guarantor of part or all of the Bonds, such that such pledge provides reasonable assurance that
such amount will be available to pay principal or interest on the Bonds if the City encounters
financial difficulty. For purposes of this certification, an amount is treated as so pledged if it is
held under an agreement to maintain the amount at a particular level for the direct or indirect
benefit of the holders or the guarantor of the Bonds.
(c) No Other Replacement Proceeds. There are no other replacement
proceeds allocable to the Bonds because the City reasonably expects that the term of the Bonds
will not be longer than is reasonably necessary for the governmental purposes of the Bonds. The
City reasonably expects that the Bond would be issued to achieve the governmental purpose of
the Bond independent of any arbitrage benefit. The Bond would have been issued if the interest
on the Bond was included in gross income (assuming that the hypothetical taxable interest rate
would be the same as the actual tax-exempt interest rate).
(d) Weighted Average Economic Life. The weighted average maturity of the
Bonds will not be greater than 120 percent of the weighted average estimated economic life of
the portion of the Projects financed, determined in accordance with section 147(b) of the Code.
Such weighted average estimated economic life is determined in accordance with the following
assumptions: (a) The weighted average was determined by taking into account the respective
cost of each of the assets financed by the Bonds; (b) the reasonably expected economic life of an
asset was determined as of the later of the date hereof or the date on which such asset is expected
to be placed in service (i.e., available for use for the intended purposes of such asset); (c) the
economic lives used in making this determination are not greater than the useful lives used for
depreciation under section 167 of the Code prior to the enactment of the current system of
depreciation in effect under section 168 of the Code (i.e., the "mid-point lives") under the asset
depreciation range ("ADR") system of section 167(m) of the Code, as set forth in Revenue
Procedure 83-35, 1983-1 C.B. 745, where applicable, and the "guideline lives" under Revenue
Procedure 62-21, 1962-2 C.B. 418, in the case of structures; and (d) land or any interest therein
has not been taken into account in determining the average reasonably expected economic life of
such Projects, unless 25 percent or more of the net proceeds of the Bonds are to be used to
finance land. This limitation is satisfied separately as to the Refunding Bond and the New
Money Bond.
14. Yield on the Bonds. The Bonds were purchased by the Bond Bank from proceeds
of the Bond Bank Bonds. The yield on the Bond Bank Bonds is 2.5 984%, based on the pricing
information provided by the Underwriter. Pursuant to Treas. Reg. § 1.148-4(a), the yield on the
Bonds is equal to the yield on the Bond Bank Bonds.
-4-
DOCSSF/1 32981 v7/200661-0032
15. Temporary Periods and Yield Restriction - Refunding Bond. The Refunding
Bond is an exchange refunding of the Refunded Bond. Accordingly, the amount described in
paragraph 7(a)(i) will be used within 90 days of the date hereof to pay principal of and interest
on the Refunded Bond. Therefore, such amount may be invested for an allowable temporary
period.
16. Funds.
(a) Debt Service Account. Pursuant to the Bond Ordinance, the City has
established the debt service fund designated the "Debt Service Account" within the Bond Fund
of the City (the "Debt Service Account"), which will be used primarily to achieve a proper
matching of revenues and debt service on the Bonds, within each Bond Year. The revenues are
anticipated to be sufficient to pay debt service each year on the Bonds. The Debt Service
Account will be depleted at least once each year except for a reasonable carryover amount not to
exceed the greater of (a) one year's earnings on the Debt Service Account or (b) one-twelfth of
annual debt service. The City reasonably expects that any such revenues deposited in the Debt
Service Account will be disbursed within 13 months of the date of receipt of such revenues by
the City. Amounts on deposit in the Debt Service Account may be invested for an allowable
temporary period of 13 months from the date such amount are deposited into the Debt Service
Account. Any such amount not expended within such period will be invested at a yield not
"materially higher" than the yield on the Bonds, except as set forth in paragraph 15 below.
(b) Reserve Account. The Reserve Account established by the Port Bond
Legislation and funded from proceeds of the Refunded Bond will be used to secure payment of
debt service on the Refunding Bond in the event that the money in the Debt Service Account is
insufficient. The City has contractually agreed with the Bond Bank that the amount in the
Reserve Account will be invested in obligations the yield on which is not in excess of the yield
on the Bond.
(c) Harbor Project Fund. Amounts held in the Harbor Project Fund may be
invested without regard to yield restriction for a temporary period of three years from the date
hereof, and thereafter will be invested at a yield not in excess of the yield on the Bonds.
17. Reserved.
18. Description of the Projects Financed or Refinanced by the Bonds.
(a) General. On the date of this certificate, the best estimate of the City is that
the 2016 Harbor Project that the City expects to finance with the New Money Bond consists of a
representative portion of the components and related costs of construction shown in Exhibit A
hereto. The City has commenced construction on certain of the components of the 2016 Harbor
Project and expects to use $1,513,000 of proceeds of the New Money Bond to reimburse itself
for costs of the 2016 Harbor Project.
(b) Use of the Projects. All of the components of the Projects (i) have been
and will be at all times available on a regular basis to the general public use or (ii) have been and
will be at all times for use by common carriers, charter carriers or other entities that directly
serve the general public. Further, all of the components of the Project are either:
-5-
DOCSSF/1 32981 v7/200661-0032
(A) directly related and essential to the operation of a dock and wharf
facility, or
(B) functionally related and subordinate to the facilities described in
(A) above which are (1) of a character and size commensurate with the character and size of the
related dock and wharf facilities, taking into account the current and projected use of such dock
and wharf facilities and (2) located at or adjacent to one of the dock and wharf facilities.
(c) Ownership and Leasing of the Project. The City has been and will be the
owner for federal income tax purposes of all components of the Projects from the date such
facilities were first placed in service and so long as the Bonds remain outstanding. The City has
entered or may enter into licensing and/or leasing arrangements with various water carriers for
rights to use certain facilities at the Projects during specified times. In addition, the City has
entered or may enter into certain leasing arrangements for concessions at the dock and wharf
facilities included in the Projects. In the event of such arrangements, each lessee or licensee
thereunder will: (i) in the case of any U.S. licensee or lessee, execute an irrevocable election not
to claim depreciation or any investment credit with respect to such leased property, (ii) not have
the use of any such leased property for a term that exceeds 80 percent of the reasonably expected
economic life of such leased property (determined as set forth with respect to each component
under Section 2(e) below), and (iii) have no option to purchase the leased property other than at
fair market value (as of the time the option is exercised). Any office space made available in one
of the terminals included in the Projects (A) will be located within such terminal or an existing
facility at the related dock and wharf facility and not within a separate office building or office
wing of a mixed-use building and (B) will be directly related to the day-to-day operations of the
portion of such terminal being used by such lessee.
(d) Weighted Average Useful Life of Project Components. The weighted
average maturity of the Bonds (i.e. 11.339 years) is not greater than 120 percent of the weighted
average estimated economic life of the Projects. Such weighted average estimated economic life
is determined in accordance with the following assumptions: (i) the weighted average was
determined by taking into account the respective costs of each asset itemized in Exhibit A hereto;
(ii) the reasonably expected economic life of an asset was determined as of the later of the date
hereof or the date on which such asset was placed in service (i.e., available for use for the
intended purposes of such asset); (iii) the economic lives used are set forth in Exhibit A hereto
which lives are not greater than the useful lives used for depreciation under section 167 of the
Code prior to the enactment of the current system of depreciation in effect under section 168 of
the Code (i.e., the "mid-point lives") under the asset depreciation range ("ADR") system of
section 167(m) of the Code, as set forth in Revenue Procedure 83-35, 1983-1 C.B. 745, where
applicable, and the "guideline lives" under Revenue Procedure 62-21, 1962-2 C.B. 418, in the
case of structures; and (iv) land or any interest therein has not been taken into account in
determining the average reasonably expected economic life of such Project.
(e) Ownership and Leasing of the Projects. The City will be the owner for
federal income tax purposes of all components of the Projects that the City expects to finance or
refinance with the Bonds so long as the Bonds remain outstanding. The City has or intends to
enter into licensing and/or leasing arrangements with various carriers for rights to use certain
facilities at the City during specified times. To the extent required by current Regulations, in
-6-
DOCSSF/1 32981v7/200661-0032
such event, each lessee or licensee thereunder will: (i) in the case of any U.S. licensee or lessee,
execute an irrevocable election not to claim depreciation or any investment credit with respect to
such leased property, (ii) not have the use of any such leased property for a term which exceeds
80 percent of the reasonably expected economic life of such leased property (determined as set
forth with respect to each component under paragraph 9(d) above), and (iii) have no option to
purchase the leased property other than at fair market value (as of the time the option is
exercised).
(f) Definition of Qualifying Costs. For purposes of this certificate, a cost of
the Project that the City expects to finance with the Bonds shall be treated as a "Qualifying Cost"
if such cost is (i) expended for or attributable to a cost of such Project incurred by the City after
the dates referred to in paragraph 6(b) above, and before completion of such Project which will
be used for the acquisition, construction, reconstruction or improvement of land or property of a
character subject to the allowance for depreciation under section 167 of the Code, or (ii) is
expended for interest on that would properly be charged to the capital account for bond-financed
property in accordance with section 263(a) of the Code for the period commencing on the date
the interest commenced to accrue with respect to the cost of a particular item of property and
ending on (A) in the case of real property, the date on which the development or construction
work on such property was completed, and (B) in the case of personal property, the date on
which such item of property was installed or first put in use (whichever occurred later).
(g) Limitation on Issuance Costs. An amount of sale and investment proceeds
that is not greater than two percent of the aggregate issue price of the Bonds will be used to pay
the costs of issuance with respect to the Bonds. For purposes of this certificate, the term "Costs
of Issuance" with respect to the Bonds includes all costs incurred in connection with the issuance
of the Bonds, including but not limited to, Underwriter's compensation, counsel fees, financial
advisor fees, rating agency fees, initial trustee fees, paying agent or certifying and authenticating
agent fees, accounting fees, printing costs, costs incurred in connection with required public
approval process, any costs of engineering and feasibility studies necessary to the issuance of the
Bonds (as opposed to studies related to completion of the 2016 Harbor Project, but not to its
financing) and similar costs that constitute issuance costs under section 147(g) of the Code.
(h) Net Proceeds Expenditure. The "Net Proceeds" of the Bonds for purposes
of this certificate will equal the issue price of the Bond of $33,518,869.55. The Net Proceeds of
the Bonds will, pursuant to the terms of the Bonds Legislation, be expended to finance and
refinance the Projects. At least 95 percent of the Net Proceeds of the Bonds, and at least 95
percent of the Net Proceeds of the Refunded Bond, will be or were used, as applicable, to pay
Qualifying Costs of the Projects. No more than 5 percent of such Net Proceeds of the Bonds will
be spent on or attributable to Costs of Issuance (which will also not exceed 2 percent of the sale
proceeds of the Bonds) or costs of the Projects that are not Qualifying Costs.
(i) Used Property. No portion of the Net Proceeds of the Bonds will be used,
and no portion of the Net Proceeds of the Refunded Bond were used, for the acquisition of any
property (or an interest therein) unless (i) the first use of such property was pursuant to such
acquisition or (ii) the applicable rehabilitation exception contained in section 147(d)(2) of the
Code with respect to such property was met.
-7-
DOCSSF/132981v7/200661-0032
(j) Acquisition of Land. No portion of the Net Proceeds of the Bonds will be
used for the acquisition of land. No portion of the Net Proceeds of the Refunded Bond were
used for the acquisition of land.
19. No Guaranteed Investment Contract or Certificate of Deposit. None of the
gross proceeds of the Bonds will be invested in any guaranteed investment contract or certificate
of deposit.
20. Issue. There are no other obligations that (a) are sold at substantially the same
time as the Bonds (i.e., within 15 days), (b) are sold pursuant to the same plan of financing with
the Bonds, and (c) will be paid out of substantially the same source of funds as the Bonds.
21. Compliance With Rebate Requirements. The City has covenanted in the Bonds
Legislation that it will take all necessary steps to comply with the requirement that rebatable
arbitrage earnings on the investment of the gross proceeds of the Bonds, if any, within the
meaning of section 148(f) of the Code be rebated to the federal government. Specifically, the
City will (a) maintain records regarding the investment of the gross proceeds of the Bonds as
may be required to calculate such rebatable arbitrage earnings separately from records of
amounts on deposit in the funds and accounts of the City which are allocable to other bond issues
of the City or moneys which do not represent gross proceeds of any bonds of the City, (b)
calculate at such intervals as may be required by applicable Regulations, the amount of rebatable
arbitrage earnings, if any, earned from the investment of the gross proceeds of the Bonds and (c)
pay, not less often than every fifth anniversary date of the delivery of the Bonds and within 60
days following the final maturity of the Bonds, or on such other dates required or permitted by
applicable Regulations, all amounts required to be rebated to the federal government. Further,
the City will not indirectly pay any amount otherwise payable to the federal government pursuant
to the foregoing requirements to any person other than the federal government by entering into
any investment arrangement with respect to the gross proceeds of the Bonds that might result in a
reduction in the amount required to be paid to the federal government because such arrangement
results in a smaller profit or a larger loss than would have resulted if the arrangement had been at
arm's-length and had the yield on the issue not been relevant to either party.
22. Not an Abusive Transaction.
(a) General. No action taken in connection with the issuance of the Bonds
will enable the City to (i) exploit, other than during an allowable temporary period, the
difference between tax-exempt and taxable interest rates to obtain a material financial advantage
(including as a result of an investment of any portion of the gross proceeds of the Bonds over any
period of time, notwithstanding that, in the aggregate, the gross proceeds of the Bonds are not
invested in higher yielding investments over the term of the Bonds), and (ii) issue more bonds,
issue bonds earlier, or allow bonds to remain outstanding longer than is otherwise reasonably
necessary to accomplish the governmental purposes of the Bonds. To the best of our knowledge,
no actions have been taken in connection with the issuance of the Bonds other than actions that
would have been taken to accomplish the governmental purposes of the Bonds if the interest on
the Bonds was not excludable from gross income for federal income tax purposes (assuming the
hypothetical taxable interest rate would be the same as the actual tax-exempt interest rate on the
Bonds).
-8-
DOCSSF/1 32981 v7/200661-0032
(b) No Re-refunding. No portion of the Refunded Bond has been refunded
or defeased other than by reason of the issuance of the Bonds.
(c) No Sinking Fund. No portion of the Bonds has a term that has been
lengthened primarily for the purpose of creating a sinking fund or similar fund with respect to the
Bonds.
(d) No Noncallable Bonds. The Refunded Bond does not include any
noncallable Refunded Bond that has been refunded to invest proceeds in the Escrow Fund
allocable to the noncallable Refunded Bond at a yield that is higher than the yield on the Bonds
and thereby eliminate significant amounts of negative arbitrage in the Escrow Fund.
(e) No Window Refunding. No portion of the Bonds has been structured with
maturity dates the primary purpose of which is to make available released revenues that will
enable the City to avoid transferred proceeds or to make available revenues that may be invested
to be ultimately used to pay debt service on another issue of obligations.
(f) No Sale of Conduit Loan. No portion of the gross proceeds of the
Refunded Bond or the Bonds haves been or will be used to acquire, finance, or refinance any
conduit loan.
23. No Arbitrage. On the basis of the foregoing facts, estimates and circumstances, it
is expected that the gross proceeds of the Bonds will not be used in a manner that would cause
the Bonds to be an "arbitrage bond" within the meaning of section 148 of the Code and the
Regulations. To the best of the knowledge and belief of the undersigned, there are no other facts,
estimates or circumstances that would materially change such expectations.
24. Weighted Average Maturity. The weighted average maturity of the Bonds is the
sum of the products of the issue price of each maturity of the Bonds and the number of years to
maturity, divided by the aggregate sale proceeds of the Bonds.
25. Bond is Not a Hedge Bond.
(a) Not more than 50 percent of the proceeds of the Refunded Bond was
invested in nonpurpose investments (as defined in section 148(f)(6)(A) of the Code) having a
substantially guaranteed yield for four years or more within the meaning of section
149(g)(3)(A)(ii) of the Code. Further, the City reasonably expected at the time of issuance of
the Refunded Bond that at least 85 percent of the spendable proceeds of the Refunded Bond
would be used to carry out the governmental purposes of such issue within the three-year period
beginning on the date the Refunded Bond was issued.
-9-
DOCSSF/1 32981v7/200661-0032
(b) Not more than 50 percent of the proceeds of the New Money Bond will
be invested in nonpurpose investments (as defined in section 148(f)(6)(A) of the Code) having a
substantially guaranteed yield for four years or more within the meaning of section
149(g)(3)(A)(ii) of the Code. Further, the City reasonably expects that at least 85 percent of the
spendable proceeds of the Bonds will be used to carry out the governmental purposes of such
issue within the three-year period beginning on the date hereof.
Dated November 3, 2016.
CITY OF CHIKAN, AL SKA
By:
Robert E. Newell, Jr., Finance Director
_10 -
EXHIBIT A
mii' ni ii
Original
Expected
Amount Useful Life
$ 2,838,947 30
306,780 30
7,011,347 30
13,729,756 30
2,644,933 30
3,437,485 30
6,269,252 30
$ 36,238,500
Description
Dock Street Dock
Ryus Float and Gangway
Berth II Platform
Berth III Marine
Restroom & Covered Shelter
Promenade
Casey Moran Floats
Remaining weighted average useful life = 20
AMT PROJECT FINANCED BY THE BOND (NEW MONEY)
Original
Expected
Useful
Description Amount Life
Hole-in-the-Wall Harbor (replace or repair/upgrade
ramps, pilings, floats, and utilities and breakwater) $ 1,513,000 35
Bar Harbor, north marina
(replace ramp and upgrade electrical service) 487,000 35
$ 2,000,000
A-i
DOCSSF/13298 1v7/200661-0032