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Birch Horton Bittner & Cherot
a professional corporation
Respond to Anchorage Office
T 907.263.7226 • F 907.276.3680
November 3, 2016
Mayor & Assembly Members
Petersburg Borough, Alaska
P. 0. Box 329
Petersburg, Alaska 99833
RBC Capital Markets, LLC
Two Embarcadero Center, Suite 2100
San Francisco, California 94111
Board of Directors
Alaska Municipal Bond Bank
Department of Revenue
333 Willoughby Avenue, 11 th Floor
Juneau, Alaska 99811
Ladies and Gentlemen:
We have acted as Bond Counsel in connection with the issuance by the Petersburg
Borough, Alaska (the "Issuer"), of its $670,000 Service Area I General Obligation Refunding
Bond, 2016 Series A (the "Series A Bond") and its $520,000 Service Area I General Obligation
Refunding Bond, 2016 Series B (the "Series B Bond" and together with the Series A Bond, the
"Bonds"). We have examined the law and such certified proceedings and other papers as we
deem necessary to render this opinion.
The Series A Bond is authorized by Resolution No. 2016-22 of the Issuer and the Series
B Bond is authorized by Resolution No. 2016-21 of the Issuer, both adopted September 6, 2016
(together, the "Resolutions"). The Series A Bond is issued pursuant to a Loan Agreement dated
as of January 1, 2007, as amended by an Amendatory Loan Agreement dated October 18,
2016, between the Issuer and the Alaska Municipal Bond Bank, and the Series B Bond is issued
pursuant to a Loan Agreement dated as of October 1, 2000, as amended by an Amendatory
Loan Agreement dated as of January 1, 2007, and an amendatory Loan Agreement dated
October 18, 2016 between the Issuer and the Alaska Municipal Bond Bank (together, the "Loan
Agreements").
The Bonds are registered in form and are dated November 3, 2016. The Series A Bond
matures on December 1 in each of the years in the respective principal amounts, and bears
interest at the rates, as follows:
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 professional corporation
November 3, 2016
Page 2 of 3
Principal
Principal
Year Amount Interest Rate Year Amount Interest Rate
2016 $ 5,000.00 2.00% 2022 $ 65,000.00 5.00%
2017 55,000.00 2.00 2023 70,000.00 5.00
2018 60,000.00 4.00 2024 70,000.00 5.00
2019 60,000.00 4.00 2025 75,000.00 5.00
2020 65,000.00 4.00 2026 80,000.00 5.00
2021 65,000.00 4.00
The Series B Bond matures on December 1 in each of the years in the respective
principal amounts, and bears interest at the rates, as follows:
Principal Principal
Year Amount Interest Rate Year Amount Interest Rate
2017 $120,000.00 2.00% 2019 $130,000.00 4.00%
2018 130,000.00 4.00 2020 140,000.00 4.00
The Bonds bear interest from their date payable on December 1, 2016 and semi-
annually thereafter on June 1 and December 1 in each year. The Bonds are not subject to
optional redemption prior to maturity.
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 Bonds are the valid and legally binding general obligations of Petersburg
Borough Service Area I for the payment of the principal and interest of which the Issuer has the
power and is obligated to levy taxes upon all taxable property in Petersburg Borough Service
Area I without limitation as to rate or amount and for the payment of which the full faith and
credit of Service Area I are pledged.
2. The Loan Agreements have been duly authorized, executed and delivered by,
and constitute binding agreements in accordance with their terms of, the Issuer, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, or
other laws affecting the enforcement of creditors' rights generally, or general principles of equity.
3. 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; however, interest on the Bonds is taken into
account in determining adjusted current earnings for the purpose of computing alternative
Birch Horton Bittner & Cherot
a pmfassional corporation
November 3, 2016
Page 3 of 3
minimum tax under Section 55 of the Internal Revenue Code of 1986 (the "Code"). The opinion
set forth in the preceding sentence is subject to the conditions that the Issuer comply with all
requirements of the Code that must be satisfied subsequent to the issuance of the Bonds 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.
Sincerely,
BIRCH HORTON BITTNER & CHEROT