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Tab_1674'.', I.ff 1 i' Birch Horton Bittner & Cherot a professional corporation Respond to Anchorage Office T 907.263.7226 e F 907.276.3680 November 3, 2016 Mayor and Council Members City of Kodiak, Alaska 710 Mill Bay Road Kodiak, Alaska 99615 RBC Capital Markets, LLC Two Embarcadero Center, Suite 2100 San Francisco, California 94111 Board of Directors Alaska Municipal Bond Bank Alaska Department of Revenue 333 Willoughby Avenue Juneau, Alaska 99811-0405 Ladies and Gentlemen: We have acted as Bond Counsel in connection with the issuance by the City of Kodiak, Alaska (the "Issuer"), of its $3,485,000 Boat Lift Special Facility Revenue Refunding Bond, Series 2016A (the "2016A Bond") and $875,000 Boat Lift Special Facility Revenue Refunding Bond, Series 2016B (the "2016B Bond", and together with the 2016A Bond, the "Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion. The Bonds are authorized by Resolution Number 07-32 and Resolution 07-33 of the Issuer, adopted October 25, 2007, Resolution 08-30 of the Issuer, adopted December 11, 2008, Resolution 2016-30(SUB) and Resolution 31 (SUB) of the Issuer, September 22, 2016 (together, the "Resolutions"), and is issued under a Loan Agreement dated as of December 1, 2007, a Loan Agreement dated as of January 1, 2009, as amended by an Amendatory Loan Agreement dated as of October 18, 2016 (together, the "Loan Agreement"), between the Issuer and the Alaska Municipal Bond Bank. The 2016A Bond is registered in form, is dated November 3, 2016, matures on December 1 in each of the years in the respective principal amounts, and bears interest at the rates, as follows: Year Principal Amount Interest Rate Year Principal Amount Interest Rate 2017 $ 85,000 2.00% 2028 $145,000 5.00% 2018 90,000 4.00 2029 205,000 3.00 2019 95,000 4.00 2030 215,000 3.125 2020 100,000 4.00 2031 220,000 3.125 1127 West Seventh Ave. Anchorage, AK 99501-3301 1156 15th St, N.W, Ste. 1020, Washington, D.C. 20005-1754 T 907.276.1550 800.478.1550 • F 907.276.3680 1 T 202.659.5800• F 202.659.1027 Birch Horton Bittner & Cherot a profeSa)tW1 corporation November 3, 2016 Page 2 of 3 Year Principal Amount Interest Rate 2021 105,000 4.00 2022 110,000 5.00 2023 115,000 5.00 2024 120,000 5.00 2025 125,000 5.00 2026 130,000 5.00 2027 135,000 5.00 Year Principal Amount Interest Rate 2032 225,000 3.250 2033 240,000 3.250 2034 245,000 3.375 2035 250,000 3.375 2036 260,000 3.375 2037 270,000 3.375 The 2016B Bond is registered in form, is dated November 3, 2016, matures on December 1 in each of the years in the respective principal amounts, and bears interest at the rates, as follows: Year Principal Amount Interest Rate Year Principal Amount Interest Rate 2017 $30,000 2.00% 2028 $45,000 5.00% 2018 30,000 4.00 2029 40,000 3.00 2019 30,000 4.00 2030 45,000 3.125 2020 30,000 4.00 2031 45,000 3.125 2021 30,000 4.00 2032 50,000 3.250 2022 35,000 5.00 2033 55,000 3.250 2023 35,000 5.00 2034 50,000 3.375 2024 35,000 5.00 2035 55,000 3.375 2025 40,000 5.00 2036 60,000 3.375 2026 40,000 5.00 2037 50,000 3.375 2027 45,000 5.00 The Bonds bear interest from its date payable on December 1, 2016, and semi-annually thereafter on June 1 and December 1 in each year. The Bonds are subject to optional redemption prior to maturity as provided in the Resolutions and the Loan Agreement. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion that, under existing law: 1. The Issuer is duly created and validly exists as a municipal corporation of the State of Alaska, with the corporate power to adopt the Resolutions and execute and deliver the Loan Agreement, and authorize and issue the Bonds. 2. The Bonds have been duly authorized and issued in accordance with law, including the Resolutions, and constitutes a valid, binding special obligation of the Issuer as Birch Horton Bittner & Cherot a professional corporation November 3, 2016 Page 3of3 provided in the Resolutions, enforceable in accordance with its terms, payable solely from the 2016A Bond Fund. 3. The Resolutions create a valid, duly perfected first priority lien upon the 2016A Bond Fund subject to no prior lien. 4. The Loan Agreement has been duly authorized, executed, and delivered by, and constitutes a binding agreement in accordance with its terms of, the Issuer. 5. The interest on the Bonds is excluded 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. The opinion set forth in the preceding sentence is subject to the conditions that the Issuer comply with all requirements of the Internal Revenue Code of 1986 that must be satisfied subsequent to the issuance of the Bond in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Issuer has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. It is to be understood that the rights of the owners of the Bonds and the enforceability of the Bonds, the Loan Agreement, and the Resolutions may be subject to bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that its enforcement also may be subject to the exercise of judicial discretion in appropriate cases. Sincerely, BIRCH HORTON BITTNER & CHEROT