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TranscriptGFOster arvey TRANSCRIPT OF PROCEEDINGS KODIAK ISLAND BOROUGH, ALASKA $345,000 GENERAL OBLIGATION SCHOOL BOND, 2020 SERIES A Dated Date: July 7, 2020 Closing Date: July 7, 2020 Bond Counsel Foster Garvey PC KODIAK ISLAND BOROUGH, ALASKA $345,000 GENERAL OBLIGATION SCHOOL BOND, 2020 SERIES A INDEX OF PROCEEDINGS JULY 7, 2020 Document Tab Certificate of B. C. D. E. F. G. H. J. K. L. M. N. O. Borough Clerk ............................................................................................. 1 Ordinance No. FY2010-03 (Ballot Ordinance) Proof of Notice of Borough Assembly Meeting July 16, 2009 Minutes of Borough Assembly Meeting July 16, 2009 Notice of Public Hearing on Ballot Ordinance Proof of Notice of Borough Assembly Meeting August 6, 2009 Minutes of Borough Assembly Meeting August 6, 2009 Proof of Publication of Notice of Election Proof of Publication of Notice of Bonded Indebtedness Ballot used in October 6, 2009 Election Resolution No. FY2010-09 (Election Certification) Proof of Notice of Borough Assembly Meeting October 15, 2009 Minutes of Borough Assembly Meeting October 15, 2009 Resolution No. FY2020-22 (Bond Resolution) Notice of Borough Assembly Meeting March 19, 2020 Minutes of Borough Assembly Meeting March 19, 2020 Loan Agreement .............................................................................................................. 2 Official Statement ............................................................................................................ 3 Tax Certificate .................................................................................................................. 4 Exhibit A- Issue Price Certificate Exhibit B - Post-Issuance Compliance Procedures IRS Form 8038-G ............................................................................................................ 5 No Litigation Certificate .................................................................................................... 6 Sig natu re Certificate ........................................................................................................ 7 Specimen Bond ............................................................................................................... 8 Certificate of Finance Director ......................................................................................... 9 Payment, Delivery, and Application of Proceeds Certificate .......................................... 10 Opinion of Bond Counsel ............................................................................................... 11 CERTIFICATE OF BOROUGH CLERK KODIAK ISLAND BOROUGH, ALASKA $345,000 GENERAL OBLIGATION SCHOOL BOND, 2020 SERIES A I, Alise L. Rice, Borough Clerk of Kodiak Island Borough (the "Borough"), hereby certify as follows on behalf of the Borough in connection with the above-referenced bond: 1. The Borough was duly incorporated as a second-class borough under the Constitution and laws of the State of Alaska on September 24, 1963. 2. The members of the Borough Assembly during the period from July 16, 2009, to the present, and the date of beginning and the date of expiration of their terms, are as follows: Sue Jeffrey Judy Fulp Jerrol Friend Louise Stutes Dave Kaplan Tuck Bonney Melvin Stephens Carol Austerman Chris Lynch Aaron Griffin Frank Peterson, Jr. Mel Stephens Larry LeDoux Dan Rohrer Rebecca Skinner Dennis Symmons Kyle Crow Julie Kavanaugh Andrew Schroeder Rebecca Skinner Dennis Symmons James Turner Scott Arndt Duane Dvorak October 2005 to October 2011 October 2008 to October 2011 October 2006 to October 2012 October 2007 to October 2013 October 2008 to October 2014 October 2011 to October 2014 October 2011 to October 2014 October 2010 to June 2015 October 2006 to October 2015 October 2012 to October 2015 October 2013 to October 2016 October 2015 to October 2016 October 2014 to October 2017 October 2014 to October 2017 October 2014 to October 2017 July 2015 to October 2018 October 2015 to October 2018 October 2017 to October 2020 October 2017 to October 2020 October 2017 to October 2020 October 2018 to October 2021 October 2018 to October 2021 October 2019 to October 2022 October 2019 to October 2022 3. Each of the foregoing members of the Borough Assembly was duly elected or appointed and qualified, and held office as a member of the Borough Assembly as stated in the foregoing paragraph. 4. From October 2004 through October 2013, Jerome M. Selby was the duly elected, qualified, and acting Mayor of the Borough. FG:53732914.1 5. From October 2013 through October 2016, Jerrol Friend was the duly elected, qualified, and acting Mayor of the Borough. 6. From October 2016 through October 2019, Dan Rohrer was the duly elected, qualified, and acting Mayor of the Borough. 7. Since October 2019, William Roberts has been, and now is, the duly elected, qualified, and acting Mayor of the Borough. 8. Since May 2016, Michael Powers has been, and now is, the duly appointed, qualified, and acting Manager of the Borough. 9. From April 2006 to March 2019, Nova M. Javier, MMC, was the duly appointed, qualified, and acting Borough Clerk of the Borough. 10. From March 2019 to May 2020, Tara Welinsky was the duly appointed, qualified, and acting Borough Clerk of the Borough. 11. Since May 2020, Alise L. Rice has been, and now is, the duly appointed, qualified, and acting Borough Clerk of the Borough. 12. Since November 2018, Scott Brandt-Erichsen has been, and now is, the duly appointed, qualified, and acting Borough Attorney of the Borough. 13. Since May 2016, Dora Cross has been, and now is, the duly appointed, qualified, and acting Finance Director of the Borough. 14. Attached hereto as Exhibit"A" is a true and correct copy of Ordinance No. FY2010-03 (the "Ballot Ordinance"), as adopted at a regular meeting of the Borough Assembly held on August 6, 2009, after introduction at a regular meeting of the Borough Assembly held on July 16, 2009, and a public hearing held on August 6, 2009, and duly recorded in my office. 15. Attached hereto as Exhibit "B" is a true and correct copy of proof of notice of the July 16, 2009 Borough Assembly meeting. 16. Attached hereto as Exhibit "C" is a true and correct copy of the minutes of the regular meeting of the Borough Assembly held on July 16, 2009, reflecting introduction of the Ballot Ordinance. 17. Attached hereto as Exhibit "D" is a true and correct copy of proof of notice of the public hearing on the Ballot Ordinance. 18. Attached hereto as Exhibit "E" is a true and correct copy of proof of notice of the August 6, 2009 Borough Assembly Meeting. 19. Attached hereto as Exhibit "F" is a true and correct copy of the minutes of the regular meeting of the Borough Assembly held on August6, 2009, reflecting adoption of the Ballot Ordinance. FG:53732914.1 20. Each of the meetings at which actions referred to in paragraphs 14 through 19 were taken was duly convened and held in all respects in accordance with law, and to the extent required by law, due and proper notice of such meetings was given; a quorum of the Borough Assembly was present throughout such meetings and a legally sufficient number of members of the Borough Assembly voted in the proper manner for adoption of the Ballot Ordinance; the Ballot Ordinance has not been amended, modified, superseded, rescinded, or repealed since the date of adoption thereof; and all other requirements and proceedings incident to the proper adoption of the Ballot Ordinance have been duly fulfilled, carried out, and otherwise observed. 21. Attached hereto as Exhibit"G" is a true and correct copy of proof of publication of Notice of Election held on October 6, 2009. 22. Attached hereto as Exhibit"H" is a true and correct copy of proof of publication of Notice of Bonded Indebtedness. 23. Attached hereto as Exhibit ’T’ is a true and correct copy of the ballot used in the October 6, 2009 election. 24. Attached hereto as Exhibit"J" is a true and correct copy of Resolution No. FY2010-09 certifying the October 6, 2009 election. 25 Attached hereto as Exhibit "K" is a true and correct copy of proof of notice of the October 15, 2009 Borough Assembly meeting certifying the October 6, 2009 election. 26. Attached hereto as Exhibit "L" is a true and correct copy of the minutes of the meeting of the Borough Assembly held on October 15, 2009, reflecting receipt and approval of the Canvass Board Report and the certification of the October 6, 2009 election. 27. The October 6, 2009 election was held in all respects in accordance with law, and to the extent required by law, due and proper notice of such election was given; the meeting at which actions referred to in paragraphs 24 through 26 were taken was duly convened and held in all respects in accordance with law, and to the extent required by law, due and proper notice of such meeting was given; a quorum of the Borough Assembly was present throughout such meeting and a legally sufficient number of members of the Borough Assembly voted in the proper manner for certification of the October6, 2009 election; the election certification has not been amended, modified, superseded, rescinded, or repealed since the date thereof; and all other requirements and proceedings incident to the proper conduct of such election have been duly fulfilled, carried out, and otherwise observed. 28. Attached hereto as Exhibit"M" is a true and correct copy of Resolution No. FY2020-22 (the "Bond Resolution"), as adopted at a regular meeting of the Borough Assembly held on March 19, 2020, and duly recorded in my office. 29. Attached hereto as Exhibit "N" is a true and correct copy of proof of notice of the March 19, 2020 Borough Assembly meeting. FG:53732914.1 30. Attached hereto as Exhibit "O" is a true and correct copy of the minutes of the regular meeting of the Borough Assembly held on March 19, 2020, reflecting adoption of the Bond Resolution. 31. The meetings at which actions referred to in paragraphs 28 through 30 were taken were duly convened and held in all respects in accordance with law, and to the extent required by law, due and proper notice of such meetings were given; a quorum of the Borough Assembly was present throughout such meetings and a legally sufficient number of members of the Borough Assembly voted in the proper manner for adoption of the Bond Resolution; the Bond Resolution has not been amended, modified, superseded, rescinded, or repealed since the date of adoption thereof; and all other requirements and proceedings incident to the proper adoption of the Bond Resolution have been duly fulfilled, carried out, and otherwise observed. Dated as of July 7, 2020. [SEA ~ ~GH, ALASKA ALISI~ L. RI(~E, Borough Cle--~ FG:53732914.1 Exhibit A 9 4 7 8 ~.2 13 14 :IS Z7 20 21 22 2.3 24 2.5 26 2? 28 29 30 3~ 32 33 34 3S 36 37 3~ 41 42. 43 45 46 47 48 Introduced by: . Manager Giff~rd Requor,~ed by’; School BoardtA~embly Oraft~d by:. Finance IDlrector/Bond Counsel Introduced on: 07/16/2009 Publi’~ Hearing: 08/06/2009 Amended: 08106/2009 Adopled; 08/06/2009 KODIAK ISLAND BOROUGH ORDINANCE NO. FY2010--03 AN ORDINANCE OF THE KODIAK ISLAND BOROUGH ASSEMBLY AUT.HORIZING THE BOROUGH TO ISSUE GENERAL OBLIGATION BONDS IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED $76,310,000 TO FINANCE THE PLANNING, DESIGN AND CONSTRUCTION OF SCHOOL AND RELATED CAPITAL IMPROVEMENTS IN THE BOROUGH INCLUDINGWITHOUT LIMITATION THE RECONSTRUCTION AND RENOVATION OF THE KODIAK HIGH SCHOOL~ AND TO SUBMIT THI~ QUESTION OF THE ISSUANCE OF SUCH BONDS TO THE QUALIFIED VO-I-ERS OF THE BOROUGH AT THE OCTOBER 6, 2009 REGULAR BOROUGH ELECTION WHEREAS, under the prov~s|ons ofA~ 29,~7.190, a municipality may incur general obllgatbn debt onty’ after a bond authorization ordinari~e is approved by a majority of those voting on the quesllon at a regular or special electton; and WHEREAS, educational requirements have changed since Kodiak High School was.originally constructed in 1906 as a regional education c~nt.er;, and WHEREAS, Kodiak High School’s design sh’ortfalls were recognized and multiple remodeling projects have been cornpleted to,brjng the faclll~/Into code compJiance; and WHEREAS, the lasl addition of vocational or academic space to Kodiak High School occurred In 1972; and : WHEREA~, In the late 1880s enrollment at Kodiak High School grew beyond 500 students and a four-phase reconstruction project began; and WHERi~AS, the fourth phase of the above project, ~hich would have addressed needed additional acad~mlc Instructional space, was never started; and WHEREAS, enrollment at Kodiak ’High School has soared from. 550 students Io as high as 850 over the past. twenty years and is forecasted to remain at approximately 800 students Into the foreseeable l’uturo; and WHEREAS, enrollment projections demonstrate a continued enrollment of 200 or more Students above the capacity of the exialing Kodiak High School educational facllily; and. WHEREAS, providing the space that currently is needed for Kodlak High School instruction requires the use of comrnunity schools factlllJes, auditorium space and rented space, as well as overcrowding of lira exlsting high school faci]itles; and Kodiak Island Borough Ordinance No, FY2010-03 Page 1 of 5 51 53 54 56 57 59 60 61 62 63 64 65 66 67 68 69° 70 71 72 73 74 76 79 80 81 82 8~ 84 85 87 88 89 90 91 94 9& 96 97 99 WHEREAS, the instructional space available for Kodiak High School does not support.~he Instruclionel programs which are needed to prepare our high school students for success word rnerketplace; and WHEREAS~ ..................... service m|mbursement planprovJdes that the 8ta’te of Alaska will reimburse the Borough for not less than ~ixty percent (60%) Qf debt service on lhe eligible portion of bonds authorized by the qLtalifle.d voter’s Of the Borough bn or after October 1, 2008 but before November 30, 2010, to pay~costs of school construction, additions to schools, and major rehabilitation proje~.~s; and; WHEREA~., the Soard of Education and Borough Assembly have commiss!oned an architect to fully evaluate reconstruction options that suppgrt the k!nd of programs necessary for Kodiak High School to fully meet the educational expectations defined by our Community; and WHEREAS, the conceptual process has undergone two years of reflnemenl; and WHEREAS, the educational faclli~es and space survey identil~ed if, hat a substantial remodel and new expansion of Kodiak High School Will meet instructional space no.ads In grades K312 throughout our community; and WHEREAS, the Kodiak Island Borough School District’s educational mission is severely con~promlsed by ~cllity limitations at Kodiak High School; and WHEREAS, the Board of Education believes the District would be best served by all District- wide services being congregated in renovated space in the existing Kodiak High School building; and WHEREAS, public feedback since the first bond election In i008 has yielded a more cost- effective design for the renovation and e~pansion of Kodiak High School; WHEREAS, funding for further architectural design woW, and cast estimation for the runowatlon and expansion of Kodiak High School depends on velar approval of a bond ordinance for the project; and ., ,WHEREAS, the School District has Identified grants and industry-based .tax lnceritive programs which could fund rail(lens of dollars towards the Borough’s debt service for construction of Kodiak High Gchool, but for which an application can be submltt~J only after a bond ordinance Is approved; and WHEREAS, ll~e Borough and School D~std~t will continue ~o seek and apply for additional grants and reimbursement options to reduce the debt service cost of the renovation and expansion of Kodiak High School; and WHEREAS. $4,490,000 in proceeds of 13~rough sch(~ol bonds previously Issued for school repair and replacements projects is available for lhe renovation of Kodiak High School; and WHEREAS, the Borough views the school and related capital Improvements authorized herein as necessary and beneficial to the community; Kodiak Island l~orough Ordinance No. FY20t0-03 Page 2 of 5 ¯ ’" 102 I03 105 106 ~07 108 110- 112 11~ 116 117 119 124 --- 125 ~26 .~27 ~29 ~31 ~32 ~33 134 ~36 ~3~ 140 ~42 NOW, THEREFORE, BE’IT ORDAINED BY THE ASSEMBLY OF "iHE KODIAK ISLAND BOROUGH THAT:. Section 1: Section 2: Section Section 4: This ordinance’is not of a general or permanent nature and shall not become a part of the Kodiak Island Borough Code of Ordinances. It ]s hereby determ!ned to be for a public purpose and In the publlc interestof lhe Borough to In0ur general obllgalton bonded Indebtedness In an amount not to exceed Seventy Six Million Three Hundred and Ten Thousand Dollars ($71~,310,000) "for the purpose of paying the cost of planning, .design, construction, furnishing an41 equipping, of school and related capital improvemohts in the Borough, including without limitation addilion~ to Kodiak High School, renovation of Kodiak High School for Instructional and School District administrative space~ and demolition of the Business Department]Leamlng Center. The Borough is authorized to borrow’ the sum o~ Seventy Six Million Three Hundred and Tan Thousand Dotla[s ($76~310,000) to finance the capital improvements described in Section 2, and the borrowing shall be evidenced by the Issuance of gen~rat obligation bonds of the Bo~:ough; provided that bonds may not be Issued for ariy proJeot unless the project is eligible tbr dsbt servloe reimbursement by the State of Alaska, -The full faith and oredit of the Borough are pledged for payment of the principal of and Interest on the bonds, and ad valorem taxes upon. all taxable property in the Borough shall be levied without limitation as to rate or amount to pay tl~e principa! of. and interest on the bo0ds when due. The Borough shall submit the following proposition to the qualified voles of the Borough at the October 6o 2009 r~gutar Borough election. The proposJ!ion must receive an affJrmallvo vole from a majority of the qualified voters v0lJng on the question to be approved. PROPOSITION NO. 1 GENERAL OBLIGATION BONDS ~ ~76,310~00B - KODIAK H!GH SC~OO~ Shall the Kodiak Island Borough inc’ur debt and issue general obligation bonds in an, amoun.t not to exceed Seventy Six M~{llon Three Hundred and Te~} Thousand Dollars ($76,310,0130) for the purpose of Paying the cost of planning, design, consh’uction, furnishing and equipping of school and related capital improvements in the Borough, including wllhout limltallon the projects described below? Kodiak Island l~orough Ordinance No. FY2010-03 Page 3 of 5 145 148 149 15(i} "--’-- 152 156 157 1.58 161 162 164 16.5 ~1.66 167 169 170 5ectlon 5: Project Add~ons to Kodiak High Schoo! Renovate existing Kodiak High School Renovate part of Kodiak High School for School DtstYlct Adminlst~[on DemoFLsh Existing Business Department and Learning Oen~er Total IEstimated Cost $ 44,270,000 220,000 80,B00;000 Less available Funds In o~er proje, ,c~ KHS Extedor Insulation and Wlndov¢ Replacement KHS Vo¢ led RenovaUon & Pool Reclamation Total deductions (590,000) ’~rotal ~mount of bond lss~~’ , $ ze_310,oo0. The projects are expected to qual!fy for not less than 60% State debt service reimbursement, funding for willGh is subject to annual appropriation. The projects will be phased to limit disruption to the education of students, and bonds will bu sold only as needed to pay project costs. If the State fu!ly funds the debt service reimbursemez~t program, the average anrlua! debt service payable by the Borough after State re|mbursemer[t, Is =estimated to be $2<-,108-~52 ~2,409,31..Z7. Thls amount of debt service may require an additional annual.property tax levy of $r~7 $660_ per $250,000 of assessed value, or Its eqUIvalent, This examp|e of/a property tax levy’ Is provided for illustrative purposes only. If additional funding becomes available for the projects from grants or other sources, only enough bonds to finish the projects will be sold. The bonds shall be secured by a pledge of the ful! falth and credit of the Borough. (Ordinance No. FY 2010-03) The proposition shall be pdnted on a ballot which may set fedh other general obligallon bondpropositions, and the following words shall be added as appropriate next to an oval provided for maiktng the ballot for voting by hand or machine: PROPOSITION NO, 1 <:Z~. YES Kodiak 161and Borough Ordinance No. FY2010-03 Page .. 171- 172 173 174 17.5 177 :t.78 179 180 1~6 189’ 19.2 Se~lon 6: Sections 2 and .3 of this ordinance shall becom~ effective only if the proposition described in Section 4 is approved by a majority of the qualified voters voting on the proposition at the October 6, 2009 regular l:]orough election. The remaining sections of this ordinance shall t)ecome effective upon adoption by the Kodiat~ IsJand Borough Assembly. ADOPTED BY THE ASSEMBLY OF THE KODI~K ISLAND BOROUGH THIS SIXTH DAY OF AUGUST~ 2009 KODIAK ISLAND BOROUGH A]-I-EST: M. Javier, Clerk Kodiak.Island Borough Ordinance No. FY20!0-03 Page 5 of 5 Exhibit B UNITED STATES OF AMERICA State of Alaska Publis iei"s Affidavit SS: ..’ I, the undersigned," being first duly sworn, depose and say: I am Editor or PubIisher of the Kodiak Daily Mirror, a daily newspaper published in Kodiak, Third judicial Division, State of Alaska, and that the annexed printed notice was published in said newspaper in issues of the following dates: SUBSCRIBED AND SWORN to before NOTARY I~UBLIC in and for the State of Alaska. My Commissi’on expir es~" ~ Kodiak Island Borough Exhibit C KODIAK ISLAND BOROUGH Assembly Regular Meeting July 16, 2009 A regular meeting of the Kodiak Island Borough Assembly was held Thursday, July 16, 200.9 In the Assembly Chambers of the Kodiak Island Borough Building, 710 Mill Bay Road. The tussling was called to order at 7:30 The invocation was given by Sergeant Major Dave Ellacketer of the SalvalJon Army. Deputy P.residing Officer ]3ranson led the Pledge.of Allegiance, Present were Deputy Presiding Oft’lcer Pat "i]ranson, Assembly membem Jam01 Friend, Judy ¯ Fulp, Dew Kaplan, Chris Lynch, and Louise Stutes. Staff members present were Manager Rick Glfford, Clark Nova Javler, and Depu~ Clerk Marylynn McFarland.. KAPLAN moved to excuse May~r Selby wh~. was attending the NACO Conference and Assembly member Jeffreywho was out on personal leave. VOICE VOTE ON MOTION CARRIED UNANIMOUSLY. APPROVAL OF AGENDA AND CONSENT AGENDA STUTES moved to approw the agenda and consent agenda. VOICE VOTE ON MOTION. CARRIED.UNANIMOUSLY.. APPROVAL OF MINUTES AWARDS AND PRESENTATIONS ~ Manager GIIford presented the Employee of the Quarter Award to Teresa Medina, Cashier in the Finance Department. CITIZENS’ COMMENTS Roxar)~e Salcido. Environmental Coordinator for the Native Vi)lage of Afogl]ak. spoke on the importance of the ro~yctlag program provided by Threshold Services, tn~. Em!l~ N_qrk~_n and Gretchen.Sau~c~ spoke In support of the Senior Cltlzeris of Kodiak, nomprofit agencies, and thanked the A~sembly for financial support. Madan J_ot~nson and Bonnie Dglard spoke In support of recycling in Kodiak. Nick.Troxell, owner of Nick’s Auto Wrucking Salvage and Metal Recycling, spoke about specific language in the Recycling Pmcess Request for Proposal (RFP), Mare_ ie Ja~kovicl! spol~ in support of the Threshold contract and a ban on ~rewo~ks. Ma.~ie Rechelea~ spoke in support of the bond ordinances and the Threshold conlzact. Usa Polll~. ~ ,Eric Engv~, ~chel Nummp~r J~,nn~l’er i~,qhc~eel~, _Rhonda Make_,~ ¯ Ltnda I-timmelbloorr_~ __Sylvia .Panzarella_, S_t_o~_hanto Love~ and Jennifer Polley spoke in ~upport of the Threshold contracL Kodiak Island Borough July 16, 2009 .Assembly Minutes Page 703 Karen.Yashin spoke in support of recycling, nomp~fits, and the Humane Society of Kodiak. iver M~lut~n spoke [n support of education, the bond ordinances, and recycling. ~et_ts_=sa Bettor!, ~ S1;eve Doerks_e~n, Nick Wa_’~tld_ ns., Jesslca~l~wo!f, ~!alr Brodle, Joe Floyd and JoeMendoza spoke In Support of the bond ordinances. Mike ~ spoke In support of recycling and non-profit organizations, Genenblva P.,ea, men spoke in support of the bond ordinances, recycling, ar~.d a stop light at Blmh and Mill Bay Road. ~ spoke against the bond ordinances and lhB Indebtedness that they would incui-, and questioned the cost estimations and the currant school dts~ coffers. Bob Bmdi~ and M_a~g~ spoke in support of recycling and t~e bond ordinances. .S. co~. Williams’ spoke in support of the. bond ordinances and addressed the Issue of the school dls~ot’s cost estimation, in Ihat every step possible had been taken Iio bring the reconslructlon and re,nodal of the high su-’hool to this stage of development. .C. h~ .ryl McNe_l~ spoke against the Threshold contract quesllon[ng the cost ratios. Heather Paterson volc~l her support of recycling and did not support the bond ordinances. Petal Ruch spoke in support of the bond ordinances addressing the muM-functional uses of the high school building which includ~l an emergency evacuation site. Ellen Simeon0ff spoke in defense of the Recycling Services RFP that was submitted by Threshold Services, Inc. and spoke In support of the bond ordinances. COMMITTE~ REPORTS Assembly member Kaplan repo.rted that the Parks and Recreation Committee was In negotiations for the Master Trails Plan end it should be before the as~,embly for approval In the very near future. PUBLIC HEARING A. Ordinance No. FY2009-01E Amending Ordinance No. FY2009-01 Fiscal Year 2009 Budget b~i Amending Budgel~ to Account for Various. Revenues that are Over Budget, Provide for Addltioi]al Expenditures, Budget New Projects, and Move Funds Between Projects. FRIEND moved to adopt Ordinance No. FY20Dg-O1E. Ordinance No. FY2009-01E was for the fiscal year end budget adjustments. In the General Fund, the Miscellaneous ]lna item In the r~venue section of the General Fund was Increased by $67,000.’rhe "use of fund balance" In the General Fund wns decreased by $69,000. The Dlstdct Suppolt Department was decreased by $84,000. Transfers out was Increased by $272,000; $62,000 was for increased costs in the S ,cheol Buildings Department in the Building and Grounds Fund and $210,0o0 was for hospital parking. In the Building and Grounds Fund Schaol E~ulldlngs Department, expenditures w~re expected to exceed the budget by $70,000. n~w department entitled School Building Major Maintenance was created and bu~Jgeted $12,000. The Women,s Bay Road Service £)tstdct expenditures exceeded it’s budget by $6,006. The E]ay View’ Road Service Diatrtct expenditures exceeded lt’~ budget by $4,670. Kodiak lst~nd Borough Assembly Minutes July 16, 2009 Page 704 The.t3orough needed to amend the debt ser~ce budget to account for the refunding of the 1998 b~nd L~sue. TIle Borough closed certain ~ompleted projects at the end or P’Y2009 and this ordinance moved the ,unexper~dod funds I:o other pmJecls. The Borough cancelled cedain projects and th~s ordinance moved the urmxpended funds to-oth~ projects. The Borough received a $2,500,000 grant to repair’ and pave the roads In Service District Area Nq. 1, a $130,000 grant f6rschool suppJtes and equipment, a" $125,000 gra~t from the Denall Commission for an islar~ wide transpoltation study, and expected to receive a $100,000 grant from the State o~. APaska Department of Transportation for an Island wlde transporlatJon sludy. The Borough was reimbursed $3,238,143 by f~e State for the Bomugh’s Seismic projects, the ¯ proceeds of which would be used for other Borough project, s, Clerk.’s Note: Between the Inf~oduction and the pubil~ hearing, them were changes proposed by sfaff and tt was necessary to amend theordinance by sub~tu[lon. KAPI_A. N moved to amend Ordinance No. FY2009--OIE l~y substitution. ROLL CALL VOTE ON MOTION TO AMEND C/~RIED .UNANIMOUSLY: Rranson, Friend, Fulp, Kaplan, Lyn ~cb, and States. Deputy Pmsldlng Officer Brar~son ~pened tl-~ public hearing. Seeing and hearing none, Deputy Presiding Ofl~cer Bransor] dOsed De publlo headng. ROLL CALL VOTE ON MOTION AS AMENDED CARRIED UNANIMOUSLY: Friend, Fulp, Kaplan, Lynch,.Stutes, and Branson, Ordinanc~ No. FY2010-02 Amending the Kodiak Island Borough Code of Ordinances T’rtle 2 Administration and Personnel, Chapter 2,40 Record~ Managemen~ Chal~er 2.50 Borough Clerk, Section 2.50.O20 Duties, and Chapter 2,55 Engt.neeri.ng and Fac//itie~ l~apartmont, Section 2.55.010 ,~_ngfne~r/ng and Facilities Department Director. STUTES moved to adopt Ordinance No, FY2010~2. The existing Records Management code was put In place in 1975 with minor changes In 1979 and 1998. Staff detemdned the need to bring It Into compliance with recent and existing laws and regulations. The old KIBC 2.25~200 was repealed in Its entirety and a now Chapter 2.40 was established. The new chapter included l~ollcles that reflected Industry best practices. $tafFs research and proposal considered Alaska ~tatutes, ’codes from other munlclpaltties, and consultation with Borough staff and Borough Attorney. Deputy Presiding Officer Branson opened the public hearing. Seeing and headng none, Deputy Presiding Officer Branson closed th~ public headng. ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Fulp, Kaplan0 Lynch, Stutes, Branrmn, and Friend, BOROUGH MANAGER’S REPORT Mana0or Gifford reported on the/~ollowing: = New pool expected to ba completed In August. o Bids for Woodland Acres pav~ng project were due July 21 and would be awarded by July 30, 2009. ÷ 13orough proJ0ct up.dates were available on the Kodiak Island Borough v~ebsite. Kodiak Island Borough July 16, 2009 Assembly Minutes Page 705 He w~uld be out of the office July 24 through August 2 for personal leave and the Alaska Municipal League.conference. MESSAGES FROM THE BOROUGH MAYOR None. to attend UNFINISHED ~BUSINESS None. Deputy Presiding Officer Branson recessed the meeting at 8:50 p;m. and roconvened ’the meeting at 8:55 p.m. NEW BUSINESS Contracts 1. Contract No, FY2010-09 Providence Kodiak Island Cou .nsellng Center Serv~.’ces to KIB School District for Scheol Year 2009-2010. FRIEND mo~l to authorfze tho Manager to execute Contract No. FY2010~09 with Providence Kodiak Island .(?,ounsellng Center of Kodiak, Alaska to pFovido mental health services for the 2009-2010 schoo! year In an amount not to exceed $38t,350. The Agreement was between the Kod|ak laland Bbrough and Providence Kodiak Island C~unseling Center ("Contractor") s~ttlng forth the terms and ~’ondit~ons pursuant to the contractor providing menial health servl~s for the Kodiak Island Borough schools. The contractor _w.,o_rked wffh the SchoOl. District to identify and doct~nlent a mutual understanding of the program s scope and requirements with a f~=cus on:ensuring the greatest amount of quality service within the budgeted amount of $38t,350 whlch was the same amount as last year. ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: .Kaplan, Lynch, Stutes, Branson, Friend, and Fulp. 2. Contract No. F-’Y2010-01 Kodiak Island Borough ’Facill~s Fuel Oil Delivery. This item was approved under the consent agenda. The contract would supply and deliver #1 and -#2 heating oil to KIB facilities which included the Landfill/Baler Building, KIB Admln Building, Chlnhik Tsunami Shelter, KFRC Laboratory Fac.ll]ty and dorms, Fire Stations, ether KI]~ rental facilities such as the cottage buildings (720 Egan), and the Annex Building. The benefit ef the bid process was to comblt’te the quantity of heating fuel needed for all KIB facilities with the quantities of fuel needed by the School District and the Hospital, for a bulk purchase, The bid packet for heatJng fuel went out for a 1 year (option A’) term er a 3 year (opl~on B) term. Results came back with one bidder. The bid offered a margin of 17 cents for a one year contract and 16 cents for a three year ~ntract. Because the margin for the three-year contract was lower than the one year contract, It was recommended that KIB enter into a contract wilh Petro Star for a three year contract based on a margin of 16 cents above the weakly average of the posted Seattle OPIS price. Th~se were the same terms that the school distdct selected when they approved the l~eating fuel contract with Petro Star, Inc. at the last meeting. M~:ND. OR #1 Town #2 Tov, rn CHINIAK Petro Star, Inc. ~1 year) $0.17 $0.17 $0.17 Petro Star, |nc. (3 year) $0.16 $0.16 $0.16 Kodiak Island Borough July 16, 2009 Assembly Minutes Page 706 3. Conlract No. FY20~0~10 Recycling Contract wtth Threshold KAPLAN mov~l lo-authorize the Manager to execute Contract No. FY’2010-10 with Threshold Services, Inc. of Kodiak, Alaska for a time and material contract estimated to be $281,450 for the period of July 1, 2009 through June 30, 2010. The Kodiak Island Borough’s landfill enteq~rise fund was financed through user fees, residenlial and commercial garbage fees, as well as fees charged at the landfill for van]ing wastes. These funds covered cosls for the solid waste collection contract, landfill operational d~sposal costs, and community recycling efforts. A Request for Proposal (RFP) was advertised end the only responder was :]’hreshold Services, Inc. The cost propgsed, by 3"hroshold Ihc, of $380 per ton exceeded the $150 per ten desired In the RFP; however, dudng negotiation the price.was reduced to $325 per ton. The contract was based on the amount of recyclables shipped og" Island (slmllar to a time and matedal contract) and it was estimated that the contract would total $281,450, The landfill bu~lget was budgeted at $130,000 for recycling services. In order for the landfill budget to cover the balance ot’ this expense, it was estimated that rates would need to be lncreased.31~e negotiated contract was for one year, July 1, 2009 through June 30, 2010 with two one-year options.to exlend. As,~embly member Fulp spoke in support of the Threshold contract and was hopeful thal the garbage rates would not be increased. She also wanted to s~e a financial plan from Threshold Services, Inc. where their revenues would meet their expenses. Assembly member States agreed that recycling ’was an Important service In the community; however, she was concerned wi~ the RFP process.followed on the contract. She spoke to the l’act that other bidders-should h~vo been able to have the same information as Threshold Services, i11c. STUTES moved to postpone awarding the. contract until ,~;eptember 3, 2009 regular meeting order that everyone would have the same opporlunity to bid. ROLL CALL VOTE ON THE MOTION TO POSTPONE FAILED THREE TO THREE: Ly~h, Brenson, and Kaplan (Noes); Friend, Fulp, and States (Ayes). In response to Assembly member Friend’s ’~ueslJon about the cost of services tf the contract was awarded for one month, Manager Glfford reported that he had slgnlng authority up to $25,000 and depending upon volume, he would see how long that amou~t would last. Assembly member Lynch disclosed her position as President of the Board of Threshold Services, Inc. She outlined how Threshold responded to the RFP. She explained in det~]l how the Borough followed the code for the RFP. ’ Assembly member Kaplan spoke in support of the Threshold contract and summarized comments from a letter received from Llnda Kewan in Port Lforis stating that their tribal council was dependent on the recycling of Threshold Services, Inc. and their ~nvimnmentel efforts would suffer great~, without their services. Assembly member Branson explained ~ho difference between an RFP and a Request for Bid. She explalned that the Threshold contract Was for a year and advtsod offer tackling businesses Interested to stay tune for future developments. In response to Assembly member Branson’s question of what would happen If lhe contract was not renewed, Manager Glffo~l reported lhat Borough funding would not be available and he did not know how long It would take for someone else to t~ke on a recycling program. Assembly Minutes Page 707 Kodiak Island 13orough July 16, 2009 .~, ROLL CALL VOTE ON MAIN MOTION CARRIED UNANIMOUSLY." Stules, Branson, Friend, Fulp, Kaplan, and Lynch. A~sernbly member Stutes changed her vote to the prevailing side. R’esolutlor~ " ’ 1. Resolution No, FY2010-03 Approving Fiscal Year 2010 Kodiak Island Borough Non-Proflt Funding. LYNCH moved to adopt Resolution No. FY2010-03. Resolution No. FY2010-03 was the framework in which the Assembly distributed the Borough funds set aside In the Fiscal Year 2010 budget to various.nen-pm~ agencies, Assembly member Friend spoke in support of non-profits. ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Slutes, Branson, Friend, Fulp, Kaplan, and Lynch. 2. Resolul~on No, FY2010-05 Appointing Members to the Kodiak: Fisheries Development As,~ociation, This item was approved under the consent agenda, The Kodiak Island Borough and Ck’y of Kodiak jo~nt!y designated the Kodiak Fisheries Development Association (KFDA) as the eligIble crab community entity {ECCE)., The by-laws of the KFDA provided for appointment of Directors to the Board by the Kodiak Island Borough Assembly and the Kodiak City Council. The by, laws state that appointments ~ake place ¯ annually, at July meetings of the Assembly and City Coundl, and that Directors have staggered three yea/" terms of ofl]c~. The following Individuals are appointed as Directors 6f the Kodiak Fisheries .Development Association, with the noted terms. City Appointees: Crab Processor Rap. - Mike Woodruff (7110) (appointment) Crab Harvester Rap. - Jeff Stephan (7/11) (roappoInlment) Joint Appointees: Stosh Ander,~on (7/10) (joint appointment) Donna Jones (7/08) (joint appolntmenl) Lalne Welch.(7108) (joint appointment) E]orough Appointees: Crab Processor Rape - Tuck Bonney (7112} (reappointment) Crab Harvosler Rap. - Jerry Bongen (7112) (reappointment) 3. Resolution No. FY2010-O2A Amending Resolution No. FY2010-02 Amending the Fees of the Kodiak Island Borough. ’ KAPLAN moved to adopt Resolution No, FY2010-O2A. The Assembly requested a proposal for metals recyc,qng in Kodiak and until a contracl was awarded, the Assembly wished 1o amend page 11 of the FY2010 fee schedule as follows: 8a. Metals : $275.00/ton 8b. Vehicles up to 7,000 pounds $475.00 par vehicle The Intent of the resolution was to put a Request for Proposal out to evaluate costs of recycling metals. Kc~liak Island Borough July t6, 2009 Assembly Minutes Page 708 Assembly members Fulp, Stutes, and Branson-spoke in suPl:~Ort of tho resolution Assembly member Lynch spoke against the resolution. ROLL CALL VOTE oN MOTION CARRIED UNANIMOUSLY: Bmnson, Friend, Fulp, Kaplan, and S~utes (A~yes); Lynch (No). Ordl~ances for Introduction 1. Ordinance No. FY2010-03 Authorizing ~e Borough to issue General Obligation Bonds in the Principal Amount of not to Exceed $78,310,000 to Rnance the Planning, Deslgn and Constmotion of School and Related Capital Improvements Jn the Borough Including Without UmitatJen the Reconstru~tion and Renovation of the Kodla~ High School, end to Submit the ¯ Question of the Issuance of Such Bonds to the Qualified Votem of the Borough at October 6, 2009 Regular Borough EleVen. KAPLAN moved to adopt Ordlhance No. FY2010-03 In first reading to advance to public hearing at the next regular Assembly meeting. The Kodiak Island Borough School Dlstdct desired to renovate the. Kodiak Island H~gh ~o01 and construct additional facility space. Educational requirements had changed since Kodiak High Gchool.was originally constructed In 1966 as a regional education center. Th~ |nstru~-’tienal space available, for Kodtak High School did not suppart.the Instructional programs which were needed to prepare high school students for success. The current state debt service reimbursement plan provided that the State of Alaska ~vould reimburse the Borough for not less than 60% of debt servine on the eligtbre portion of bonds authorized by the qua.li~d voter~ of the Borough between October 1, 2006 and Novemba~ 30, 2010, to pay coals of school construction, addtl~ons to schools, and major rehabilitation projects. Stewart McDonald, SupeJtntendent of the. Kodiak Island Borough School District, gave a . presentation in support of the bond ordinanc~.s. , Assembly members Stutes, Lynch, Fdend, Kaplan, ~r~d Bmnson spoke In support of the bond ordinances in order "that questions would go before the voters, Th.ey stressed the Impedance of educating the voters on the costs. ROLL CALL VOTE ON MOTION CARRII~D UNANIMQUSLY: Fd,end, Fulp, Kaplan, Lynch, Stules, and Branson. Ordinance No. FY2010-04 Authorizing the Borough to Issue General Obligation Bo=~ds In the PdncJpal Amount of not to Exceed $12,500,000 to Finance the Planning, Design, and Construction of Renewals and Replacements of Borough Fadlltles; and to Submit the Question of the Issuance of Such Bonds to the Qui~lified Voters of the Borough at the. October O, 2009 Regular Borough Election. FRIEND moved to adopt Ordinance No. FY’2010-04 in first reading ~o advance to public hearing at the next regular Assembly’ meeting. The l~omugh currently owned over $200,000,000 worth of buildings as reflected on the values listed on the Insurance schedules. The number did not include the cost of the land or site imp~vernents and part of the cost of" ownership was to renew and/or replace parts of the buildings. The proceeds of the bond ($12.500,000) eqvaled 6.25% of th~ current value of the buildings and would be in the best interest of the Borough to keep buildings propedy Kodiak Island Borough July 16, 2009 Assembly Minutes Page 709 malntalnedo Approximately 73% of the buildings were school buildings which qualified for a 70% debt reimbursement from the State of Alaska: Assembly. member Stutes spoke in support of moving the bond ordinances fom/ard and expressed a concern about securing a bond for maintenance items. Assembly member Branson noted that renova~n In the ~,lllages were included in the bond ordinances and encouraged the public to become familiar with them. " ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Fulp, Kaplan, Lynch, Slut.as, Branson, and Friend. Other Items None. CITIZENS’ COMMENTS ; . .M...~el Stel)h~ns spoke against the bondordjnan=~s commenting spec~ca}~ abo~ ~e $4.2 mlllbn ~ond pm~sition ~at ~s passed in 20~ ’~ ~nd v~onal’edu~flon mfu~Nng. Mr. Stephens spoke ~ainst ~e approval of the Thr~hold ~n~, ~mlng ~e ~omb~ ~ ~Jng In vto~tion of the ~mugh’s pr~umme~ pm~s. ASSEMBLY MEMBER COMMENTS Assembly member Stutes, Kap|an, Lynch, bnd Branson congratulated Teresa Medina for her receipt of the Employee ef the QuarterAward. Assembly member Friend had no ~,omments. Assembly member Fulp was pleased to see the arrival of the cruise ships in Kodiak. AnnouncemenL~ Deputy Presiding Officer Branson announced lhal; ~e ~embly ~uld meet ~n a spec~ meeting and work sesslon on ~u~day, Ju~ 9, 2009 at 7:30 p.m. In the Borough ~nferen~ Room. T~ n~ ~u]ar m~fing ~s ~hedul~ on Thu~ay, August 6, July 16, 2~9 at 7:30 p.m. In the B~rough Assembly Cham~m. ADJOURNMENT FRIEND moved to adjourn the meeting. =. ’ ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Kaplan, Lynch, Stutes, Branson, Fdend, and Fulp. The meeting adjourned at 9:50 ATTEST; Nova M. Javier, ~101(~, Borough Clark 1 i~ODI.AK ISLAND BOROUGH Je~’0me M. Selby, Mayor _ ~ Approved: September 3, 2009 Kodiak Island Borough July 16, 2009 Assembly Minutes Page 710 Exhibit D STATES OF.. AAVIERICA State of Alaska I, the undersigned, being first duly ’~wo .rn, depose and say: I am Editor or Publisher of the Kodiak Daily Mirror~ a daily newspapex published Kodiak, Third Judicial Divis|on, State of Alaska, and that the amiexed printed notice was published ~ said newspaper in issues of the following dates: Signature of Editor or Publisher SUBSCRIBED AND SWORN to before NOTARY P~LIC In ~d Nr Ne State of Maska. Exhibit E UNITED STATES OF AMERICA State of AIaska L.the undersigned, being ~rst°d~ly sworn, depose and say: ][ am Editor or Publisher of the Ko~tiak Daily Mirror, a daily newspaper published in. Kodiak, Third Judicial Division, State of. Alaska, and that the annexed printed notice was publishedin said newspaper in issues of the following dates: "~ Signature of Editor or Publishex SUBSCRIBED AN}) SWORN to before NOTARY PUBLIC in and for the State Alaska. D~I ¥oit know there Is a reduced r’~to f~r r~[danf|a| g~nb~ge =;;ustomen~ who ore 65 and olde~? Piees~ c~l 480-9323 for ~e~its. yo~ may rJgn-Up online at £~w.~.~k~k~=~ to get an o-mall noSficatlon onc~ agendas, packets, newsielters, or minutes of Lhe Assemb~/are poMod on the Web. |131 !042 |86-9310 /2009 ~alesper~on: Roby Total ,,,~ 250.57 ,ference: Total: 258,57 Tz~x: 0.00 Net: 258.57 Prepaid; Total Due 258.5"7 Exhibit F KODIAK ISLAND BOROUGH Assembly Regular Meeting August 6, 2009 A regular meeting of the Kodiak Island Borough Assembly was held on Thursday, August 6, 2009 in the Assembly Chambers of the Kodiak Island Borough Building, 710 Mill Bay Road. The meeting was called to order at 7:30 p.m. The invocation was given by Captain John Quinn of the Salvation Army. Mayor Selby led the Pledge of Allegiance. Present were Mayor Jerome Selby, Assembly members Pat Branson, Jerrol Friend, Judy Fulp, Dave Kaplan, Chris Lynch, and Louise Stutes. Staff members present were Manager Rick Gifford, Community Development Director Bud Cassidy, Engineering and Facilities Director Woody Koning, Finance Director Karl Short, Deputy Clerk Marylynn McFarland, and Assistant Clerk Jessica Kilborn. BRANSON moved to excuse Assembly member Jeffrey who was out on personal leave. VOICE VOTE ON MOTION CARRIED UNANIMOUSLY. APPROVAL OF AGENDA AND CONSENT AGENDA BRANSON moved to approve the agenda and consent agenda. VOICE VOTE ON MOTION CARRIED UNANIMOUSLY. APPROVAL OF MINUTES A. Regular Meeting Minutes of June 4, 2009 and July 2, 2009, and Special Meeting Minutes of June 25, 2009 and July 9, 2009 were approved under the consent agenda. AWARDS AND PRESENTATIONS CITIZENS’ COMMENTS Pam Foreman, Parks and Recreation Committee Vice-Chair spoke in favor of Contract FY2010- 13. COMMITTEE REPORTS Assembly member Stutes reported on the Providence Kodiak Island Counseling Center Advisory Council meeting. Assembly member Kaplan reported on the activities of the Parks and Recreation Committee. Assembly member Branson reported that the Providence Alaska Region Board will hold a board and community meeting on Tuesday, September 22, 2009. PUBLIC HEARING A. Ordinance No. FY2010-03 Authorizing the Borough to Issue General Obligation Bonds in the Principal Amount of not to Exceed $76,310,000 to Finance the Planning, Design and Construction of School and Related Capital Improvements in the Borough Including Without Limitation the Reconstruction and Renovation of the Kodiak High School, and to Submit the Question of the Issuance of Such Bonds to the Qualified Voters of the Borough at the October 6, 2009 Regular Borough Election. Kodiak Island Borough August 6, 2009 Assembly Minutes Page 712 KAPLAN moved to adopt Ordinance No. FY2010-03. Mayor Selby noted that a substituted version of Ordinance No. FY2010-03 which included corrections that were made at the last Assembly work session was provided to the Assembly. The Kodiak Island Borough School District (KIBSD) desired to renovate the Kodiak High School and construct additional facility space. Educational requirements had changed since Kodiak High School was originally constructed in 1966 as a regional education center. The instructional space available for Kodiak High School did not support the instructional programs which were needed to prepare high school students for success in the world marketplace. The state debt service reimbursement plan provided that the State of Alaska would reimburse the Borough for not less than 60% of debt service on the eligible portion of bonds authorized by the qualified voters of the Borough between October 1, 2006 and November 30, 2010, to pay costs of school construction, additions to schools, and major rehabilitation projects. Total principal and interest costs would be $120,465,845, after state reimbursement of approximately 60% the total cost to the Borough would be $48,186,338 and could require a mill rate increase of 2.64 mills. KIBSD’s educational mission was severely compromised by facility limitations at the high school. KIBSD Superintendent McDonald provided the Assembly with additional information regarding the ordinance. He spoke on the needs of the students and the community to meet the education requirements provided at the high school facility. FRIEND moved to amend Ordinance No. FY2010-03 by substitution. ROLL CALL VOTE ON MOTION TO AMEND CARRIED UNANIMOUSLY: Fulp, Kaplan, Lynch, Stutes, Branson, and Friend. Mayor Selby opened the public hearing. Bob Brodie, Carson Schick, Arne Schick, An.qela Eastman, Jesse Laird, 8olvei.q Christenson, Pe.cl_qV Tuttle, Nick Watkins, and Roqer Estelle spoke in favor of Ordinance No. FY2010-03 and commented on the health, safety, and education concerns facing KHS students. Isa Stihl Wirz and Charlie Davidson urged the Assembly to support Ordinance No. FY2010-03. Mary Forbes spoke in support of Ordinance No. FY2010-03 and commended KHS students for speaking to the Assembly in support of the ordinance. Mayor Selby closed the public hearing. Assembly members Branson, Kaplan, and Stutes commended the community’s involvement in support of Ordinance FY2010-03. ROLL CALL VOTE ON MAIN MOTION AS AMENDED CARRIED UNANIMOUSLY: Friend, Fulp, Kaplan, Lynch, Stutes, and Branson. Kodiak Island Borough August 6, 2009 Assembly Minutes Page 713 go Ordinance No. FY2010-04 Authorizing the Borough to Issue General Obligation Bonds in the Principal Amount of Not to Exceed $12,500,000 to Finance the Planning, Design, and Construction of Renewals and Replacements of Borough Facilities; and to Submit the Question of the Issuance of Such Bonds to the Qualified Voters of the Borough at the October 6, 2009 Regular Borough Election. KAPLAN moved to adopt Ordinance No. FY2010-04. The Borough currently owned over $200,000,000 worth of buildings as reflected on the values listed on the insurance schedules. The number did not include the cost of the land or site improvements. Part of the cost of ownership was to renew and/or replace parts of these buildings. The proceeds of the bond ($12,500,000) equaled 6.25% of the current value of the buildings. It was in the best interest of the Borough to keep the buildings properly maintained and deferred maintenance would cost more in the long run. Approximately 73% of the buildings were school buildings which qualified for a 70% debt reimbursement from the State of Alaska. Total principal and interest costs would be $19,841,337, after state reimbursement of approximately 51% the total cost to the Borough would be $10,138,923 and could require a mill rate increase of .53 mills. Engineering and Facilities Director Koning provided additional information regarding Ordinance No. FY2010-04. Mayor Selby opened the public hearing. Bob Brodie spoke in support of Ordinance No. FY2010-04. Solvei,q Christenson requested clarification be provided to voters about the specifics of each bond ordinance so that it was understood that the ordinances were two distinct issues. Mayor Selby closed the public hearing. Mayor Selby noted that there were no overlaps of either the two ordinances or the funds that would be passed by voters and directed staff to provide information to the public showing a probable rate that the bonds would be sold at. Assembly members spoke in favor of clarification of the two ordinances so the public would clearly understand the two ordinances were separate issues. ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Kaplan, Lynch, Stutes, Branson, Friend, and Fulp. BOROUGH I~IANAGER’S REPORT Manager Gifford reported the following: ¯ Reported on the results of the Junk Vehicle Disposal program. ¯ Provided an update on the construction projects. ¯ Recommended cancelling the work session of August 13 and the regular meeting of August 20 due to a lack of items for the agenda. Consensus of the Assembly was given. Assembly member Friend asked that information be provided to property owners of the Woodland Acres Subdivision regarding development issues due to the paving of the subdivisions roads. Kodiak Island Borough August 6, 2009 Assembly Minutes Page 714 MESSAGES FROM THE BOROUGH MAYOR Mayor Selby reported on his attendance at the National Association of Counties (NACo) Annual Conference. Proposed resolutions and platform changes presented at the conference were made available to the Clerk’s office. Mayor Selby provided explanation on the proposed changes to the Clean Waters Act which would affect future development near creeks and streams in the Kodiak area. He also reported that there would be a local legislative delegation that would be traveling to Washington D.C. to meet with the Borough lobbyists and Alaska congressional delegation. UNFINISHED BUSINESS None. NEW BUSINESS Contracts A. Amending the Motion Previously Adopted at the July 16, 2009 Regular Meeting on Contract No. FY2010-01 Kodiak Island Borough Facilities Fuel Oil Delivery. BRANSON moved to amend the motion adopted at the July 16, 2009 regular meeting authorizing the manager to execute Contract No. FY2010-01 with Petro Star, Inc of Kodiak, Alaska for a three year contract based on a margin FROM $.16 above the weekly average of the posted Seattle OPIS price TO $.25 above the weekly average of the posted Seattle OPIS price. Contract No. FY2010-01 was approved by the Assembly on July 16, 2009 under the consent agenda. What was reflected on the agenda statement summary was correct; however, the motion that was indicated in the original agenda statement was incorrect and needed to be corrected for the record. ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Lynch, Stutes, Branson, Friend, Fulp, and Kaplan. B. Contract No. FY2010-13 Kodiak Road System Trails Master Plan. KAPLAN moved to authorize the manager to execute Contract No. FY2010-13 with Alta Planning and Design of Portland, Oregon for the Kodiak Road System Trails Plan in the amount not to exceed $128,013. Assembly member Lynch declared a conflict of interest regarding the contract because she was part of the design team. Mayor Selby ruled in favor of the declaration and asked Assembly member Lynch to step down from the dais. Parks and Recreation Committee members worked through the process of selecting a contractor to perform the Road System Trails Master Plan. Nine planning firms responded to the Borough’s Request for Proposals (RFP). Three firms were "short listed" and travelled to Kodiak to participate in an interview process, where they were rated and ranked. After the interview process the Committee chose ALTA Planning and Design to perform the work. ALTA had a strong background of trails planning, and included on its team was Mr. Matt Hastie who had developed a successful public participation program and project website for the KIB Comprehensive Plan that was completed during past years. Funds for the planning project would include primary funding through the Community Development Department budget and a State of Alaska ClAP grant of $23,500 which included another $80,000 to "improve" or "harden" various trails with what was known as geo-block. It Kodiak Island Borough August 6, 2009 Assembly Minutes Page 715 was noted that much of the preliminary work had been performed by the Borough which would reduce the ultimate price of the contract. ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Stutes, Branson, Friend, Fulp, and Kaplan. C. Contract No. FY2010-14 Kodiak Schools Mechanical Electrical and Plumbing Equipment Seismic Upgrades. BRANSON moved to authorize the manager to execute Contract No. FY2010-14 with Parkhurst Mechanical, LLC for the Kodiak Area Schools Mechanical, Electrical, and Plumbing Seismic Upgrades in an amount not to exceed $127,340. The contract was for the Kodiak Area Schools Mechanical, Electrical, and Plumbing Seismic Upgrades as shown on construction documents prepared by Jensen Yorba Lott, Inc. The project was to be funded in part by a FEMA HMGP Grant in the amount of $132,249 and other funds were to be determined. Bids were received in response to KIB’s Invitation to Bid dated June 26, 2009. Parkhurst Mechanical, LLC. was the low bidder for the project. ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Branson, Friend, Fulp, Kaplan, Lynch, and Stutes. Resolutions None. Ordinances for Introduction A. Ordinance No. FY2010-05 Amending Kodiak Island Borough Code Title 3 Revenue and Finance Chapter 3.05 Fiscal Policy Section 3.05.030 Debt Policies. KAPLAN moved to adopt Ordinance No. FY2010-05 in first reading to advance to public hearing at the next regular Assembly meeting. The ordinance would update the debt policies of the Borough. The Borough had a very conservative debt policy and in many ways it made sense to not have it so restrictive. The reasons for this were: 1. The State of Alaska generally reimbursed the Borough for 60 to 70% of its debt. 2. Under the Governmental Accounting Standards Board (GASB) the State reimbursement was not considered in the net bonded debt calculation but was a very real commodity. 3. General Fund expenditures made up a very small percentage of total Borough revenues. 4. The financial stability of the Borough was further enhanced by the Facilities Fund which did not exist when the policies were originally adopted. The ordinance would change the net debt as a percentage of the estimated market value of taxable property from five percent to fifteen percent. The International City/County Management Association (ICMA) in its publication "Evaluating Financial Condition" recommended that a government’s net debt should not exceed 10 percent and what was left out of the formula was the large amount of State reimbursement for the Borough’s debt. The ordinance would remove the paragraph stating: "The ratio of debt service expenditures as a percent of governmental fund expenditures should not exceed 20 percent". Generally the ratio was for debt service expenditures compared to governmental revenues, The general fund in the Borough was a very small part of its total operations. Kodiak Island Borough August 6, 2009 Assembly Minutes Page 716 ROLL CALL VOTE ON MOTION CARRIED FIVE TO ONE: Friend, Fulp, Kaplan, Lynch, and Branson (Ayes); Stutes (No). Other Items A. Declaring a Seat on the Solid Waste Advisory Board Vacant. This item was approved under the consent agenda. Mr. Rick Pillans verbally advised the Clerk’s Office on July 14, 2009 of his resignation from the Solid Waste Advisory Board. The Assembly accepted, with regret, the resignation of Mr. Pillans for a term to expire December 31, 2009 from the Solid Waste Advisory Board and directed the Borough Clerk to advertise the vacancy per Borough Code. Assembly Approval of a Vacation in Accordance With KIBC 16.40 and KIBC 16.60 to Allow a 10-Foot Wide Utility Easement Over Lot 1A, U.S. Survey 3466 (Originally Created by Plat 80-22) and the Vacation of a Portion of a Driveway and Utility Easement Located Over a Portion of the Same Lot. (Case S09-021) BRANSON moved to approve the vacation of a 10-foot wide utility easement over Lot 1A, U.S. Survey 3466 (originally created by Plat 80-22) and the vacation of a portion of a driveway and utility easement located over a portion of the same lot. The petitioner requested the vacation of a 10-foot utility easement located on a portion of land that was acquired from the Borough in 2008. The easement was located in an area where the petitioner was planning to build a residential addition. In addition, a portion of the driveway and utility easement was to be vacated which was no longer necessary to serve the petitioner’s lot since they had acquired the portion of land from the Borough on which the portion of easement was located. The Planning and Zoning Commission at its July 15, 2009 regular meeting agreed with the request to vacate the easements and recommended approval to the Assembly based on the condition of approval that the vacation would be reviewed and approved by the Assembly prior to the granting of final plat approval. ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Fulp, Kaplan, Lynch, Stutes, Branson, and Friend. C. Declaring a Seat on the Service Area No. 1 Board Vacant. This item was approved under the consent agenda. Ms. Sharon Lea Adinolfi submitted a letter of resignation from the Service Area No. 1 Board on July 24, 2009, for a term to expire October 2011. The Assembly accepted, with regret, the resignation of Ms. Adinolfi for a term to expire October 2011 from the Service Area No. 1 Board and directed the Borough Clerk to advertise the vacancy per Borough Code. CITIZENS’ COMMENTS Pam Foreman thanked the Assembly for approving Contract No. FY2010-13. ASSEMBLY MEMBER COMMENTS Assembly member Lynch had no comment. Assembly member Stutes thanked the public for testifying on issues that were presented to the Assembly and commended the students who spoke in support of Ordinance No. FY2010-03, Kodiak Island Borough August 6, 2009 Assembly Minutes Page 717 Assembly member Friend spoke on the new street lighting on Rezanof Drive and thanked all who participated in the project, and thanked the students and public for testifying on Ordinance No. FY2010-03. Assembly member Kaplan wished everyone a great weekend. Assembly member Fulp spoke on local reunions that were being held, thanked CDD Director Cassidy for acting as the Administrative Official in the absence of the Manager, thanked Manager Gifford for submitting the letter to the State urging re-painting of the Near Island bridge, and thanked Assessor Tom Anderson for his hard work as the Borough Assessor and wished him well in Kenai. Assembly member Branson was impressed with the progress of the construction projects, expressed interest in the possibility of the Legislature overriding the Governor’s veto on the $28 million dollar stimulus money, and alerted community members aged 65 and older that there were support systems in place to help cover the $70/month tax exemption rate increase mandated by the state. Announcements Mayor Selby announced that the Assembly would hold a special meeting on Tuesday, August 18, 2009 at 7:30 p.m. in the Borough Assembly Chambers. The Assembly would meet in a work session on Thursday, August 27, 2009 at 7:30 p.m. in the Borough Conference Room. The next regular meeting was scheduled on Thursday, September 3, 2009 at 7:30 p.m. in the Borough Assembly Chambers. Mayor Selby urged the public to attend a luncheon and to participate in discussion with the University of Alaska Fairbanks Chancellor on Thursday, August 20, 2008 at 12 p.m. at the Kodiak Inn. ADJOURNMENT BRANSON moved to adjourn the meeting. ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Kaplan, Lynch, Stutes, Branson, Friend, and Fulp. The meeting adjourned at 9:05 p.m. KODIAK ISLAND BOROUGH Nova M. Javier, MMC, Bolough Clerk Approved: October 15, 2009 Kodiak Island Borough August 6, 2009 Assembly Minutes Page 718 Exhibit G [RESERVED] Exhibit H Publisher’s Affidavit UNITED STAIT_~ OF AMERICA Sta~e of Alaska SS: I, the undersigned, being first duIy ¯ sworn, depose and say: ~[ am Editor or I’ublisher of the Kodiak Daily Mirror, a daily newspaper published in Kodiak, Third Judicial Division, State of Alaska, and that the annexed printed notice was published in said newspaper in i.ssues of the following Signature of Editor or Publisher SUBSCR_IB~:D AND SWORN’to before methis .~ ...,20~(~)([~ NOTARY PU33LIC in and for the State of SUBSCRIBED AND SWORN to before .11~.~+ ~H~ "’+~ NOTARY PUBLIC in and for theStale of Exhibit I -Pnbiisher’s-At idavR " UNITED STATES OFAMERICA I, the undersigned, being first duly sworn, depose and ~ay: I am Editor or Pvtbllsher of the Kodiak Dally Mirror," a daily no.paper published in Kotllak. Third Judicial Division. S~mt~ of Alaska. and ~&at the atmexed printed notice was published in said newspaper i~ issues of the follovdng 8ErBSCRIBRI~ AI~ SWORN ~o bet’or~ ¯ AIm~km ~ 1-1 C { Cc~rr,~ 7~3 p.m. UBA ~t D.C. UnlIed, low I{ODIAK ISLAND BOROUGH TUESDAY, OCI~OBER 6,~2009 REGULAR EL .ECTION SAMPLE BALLOTS . Take it Out?ide. ÷ 1.-800-LUNG-USA Exhibit J 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 26 27 28 29 30 ~ 31 32 33 34 35 36 37 38 39 4O 42 43 45 46 47 48 49. 50 KODIAK ISLAND BOROUGH RESOLUTION NO. FY2010-09 A RESOLUTION OF THE ASSEMBLY OF THE KOD!AK ISLAND BOROUGH RATIFYING AND CERTIFYING THE RESULTS OF THE MUNICIPAL ELECTION HELD OCTOBER 6, 2009 WHEREAS, the Kodiak island Borough held a Regular Election on October 6, 2009, at time, candidates for the following offices were voted on: BOROUGH ASSEMBLY ~ Tw~ Seats BOROUGH SCHOOL BOARD - ~l~wo Seats FIRE PROTECTION AREA NO. I BOARD - Two Seats SERVICE AREA NO. 1 BOARD - Two Seats BAY VIEW ROAD SERVICE AREA BOARD - Two Seats MONASHKA BAY ROAD SERVICE AREA BOARD d Two Seats WOMENS BAY SERVICE AREA BOARD - Two Seats WHEREAS, the following propositions ware submitted to the qualified voters t~l: the Kodiak Island Borough; and PROPOSITION NO.!_ GENERAL OBUGA.TI,ION BONDS, ’ }~B,310,i)00~7_.KODl~ HIGH SCHO~ Shall the Kodiak Island B0rou~~l Incur d6bt and Issue gi~neral obligat!on bonds in an arr|ount not to exceed Seventy Six Million Three Hundred Ten Thousand Dollars ($76,310,000) for the purpose of paying, the cost of planning, design, construction, fumls.hlng and equipping of school and related ~pltal Improvements In the Borough, Including without limitation the projects described below? PROPOSITION NO. 2 GENERAL OBLIGATIONBOND~OR RENEVVALS ~ND .... R~P-LACEMENTs OF BOROUGH FACILITIES -- Shall the Kodiak Island B0-r6Ugh incur debt a-~’ i~ue g~fe(ai 0bii~i~ ~nds in an amount not to ex~ed Twelve Million Fi~ Hundred Thousand Dolla~ ($12,500,000) to finan~ the planning, design and cons~ion of renewals and repla~ments of Borough buildings and other fa~llties? 73% of these projects are schoo! related. WliEREAS, the Canvass Board of the Kodiak Island Borough met on October 8 and 14 and tallied the votes of Write-Ins, Absentee Ballots, Queslioned Ballots, and Per.serial Representatiye Ballots together wtth ~otes counted on eleotion night; and WHEREAS, the tallies as recorded by the Canvass Board are as follows. KODIAK ISLAND BOROUGH ASSEMBLY - TWO SEATS, THREE-YEAR TERMS Chris Lynch Davfd King Steve Branson Jerrot Friend Write-Ins 12.68. ..................................... : ........................................ Kodiak Island Borough, AFaska Resolution No. FY2010-09 Page 1 of 4 KIB SCtlOOL DISTRICT BOARD OF EDUCATION - TWO SEATS, THREE-YEAR TERMS Petal Ruch Norman Wooten Wdtmlr~s .......................................... . .................................... 1592 FiRE PROTECTION ARF~,., NO. I "BOARD- TWO SEATS,.THREE-YEAR TERMS Rebecca Nelson Write-Ins Scott L, Amdt Cliff Davldson James R. Mullican .............................................................................. ,722 Only the top three are lis~ed below: 85 SERV/CE AREA.NO. 1 BOARD- TWO SEATS, THREE-YEAR TERMS Write-ins Charles F, Lorenson Alan Tones Scott L. Arndt Only the top three are listed below: 144 13AYVI~ ROAD SERVICE AREA BOARD - TWO SEATS, THREE-YEAR TERMS Write-ins Only the top three are listed below: 2~4 Reed Oswait .................................................................... ’, ......... 6 Fred Roberts James Schauff ................................... MONASHKA BAY ROAD.~ERVICE AREA BOARD- TWO SEATS, THREE-YF-_AR TERMS Dadene Turner Write-ins Bruce McNeil David Sundber9 Don Fox Only the top three are listed below:. 28 WOMENS BAY SERVICE AREA BOARD ~ TWO sEATS, THREE-YEAR TERMS David Conrad Write-ins George Leo James Cobis Jim Rlppey Ed Gondek 203" Only the top fogr are listed below: 39 Kodiak Island I~erough, Alaska Resolution No. FY2010-09 Page 2 of 4 PROPOSITION NO. 1 GENERAL OB’LIGATION BONDS ~ $76,310,000 - KODIAK HIGH SCHO ,O,L, , Shall the kodi:ak I~1~. r~d B0r~ugh in~t~l: debt and Issue general obligation bonds in an amount not to cx~d Seventy Six Million Three Hundred Ten Thousand Dollars ($76,310,000) for the purpose of payln~, lhe cost of planning, design, construction, furnlshlng and equipping of school and related capital Improvemen~ in the Borough, ln~ludlng without limitation the projects described below? ’ - " PROPOSITION NO. 2 GENERAL OBLIG~A¥1ONBONDB~R’RENEWALS _,AND REPLACEMENTS 0 F"BO~OUGH FACI[I~ES . Shall the Kodiak Island B~’tBugh Incd~ debt and Issue gene’ral obllg~t~-o~" bonds in ~n amount not to exceed Twelve Million Five Hundred Thousand Dollars ($t2,500,000) to finance the planning, design and construction of renewals and replacements of Borough bi~lldlngs and other fa(~Jt~es? 73% of these projects an~ school related. ........................................... .. .................................. .............................................................................. 1307 TOTAL REGISTERED VOTERS 361605-Chlnlak . 36/608-Flats 36/615-KI South (Larsen Bay) 36/618-K~diak No. 1 36L620~Kodiak No, 2 36/622-Mission Road 36/625-Oid Harbor 36t635-OuzJnkle 36/645-Port Lions Total. TOTAl. VOTES CASTIPERCENTAGE / 36/605-ChlnIak 36/608-Flats ................................. 361615-KI S6i3th (Larsen Bay) ........... .: .................... 36/618-Kodlak No. 1 ................................. 36/620-Kediak No. 2 ................................. ¯ 36/622-Mission Road ................................. 361625-Oid Harbor ................................. 36/635-Ouzlnkfe ................................. 36/645-Pod Lions Absentee In Person ................................. Absentee by Mail ................................. Questioned Ballots ................................. Personal Representative .............................. Total ................................. 127 203 3082 128 _Vote~ Cas_t Percentage 2._~9 22.83% ’ 263, 13,29% ~ 16.75% 18.~% 2B.00% 21.47% 15.25% 1.45% 25.70% Kodiak Isl~nd Borough, Alaska Resolution No. P-Y2010-09 Page 3 of 4 NOW, THEREFORE,. BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THAT the Assembly finds thai the Municipal EleVen of October 6, 2009 was validly held.and hereby ratifies and certifies th~ results of the election as reflected below: Borough Assembly - Two Seats, Three Y0ar T0rms Chris Lynch - 1268 .. Jen’ol Friend - 1083 School Beard. Two Seats, Throe Year Terms Norman Woeten - 1753 Petal Ruth - 1592 Fire Protection Area No. I Board - "13~to Seat~, Three Year Terms Rebecca Nelson - 722 ’ S.cott L. Arndt- 14 Service Area No, 1 Board, Two ~at~ Three Year Terms Charles F. Lorenson- 19 Alan R. Tones- 14 Bayv|eW Road Service Area Board. Two Seats, 3-brae Year Terms Reed Oswalt - 6 James Schauff- 3 (Drawnby Lot) Mo~.mshka Bay Road Servi~’,e ~,roa Board - Two Seats, Three Year Terms Darlene Turner- 54 David Sundberg - 3 (Drawn by Lot) Womens Bay Service Area Board - Two Seats Throe Year Terms David G. Conrad = 203 Geo=ge Lee- 14 " Proposition No, 1 - Kodiak High ~;chool- Passed Yes - 1281 No- 1114 Proposltlon No, 2 - Borough Fa(il]t.ies - Failed Yes - 1059 No - 1307 ADOPTED BY THE KODIAK I~LAND BOROUGH ASSEMBLY THIS FIFTEENTH DAY OF OCTOBER 200@ Nova Me Jav|er, MMC, E~.’6Qgh Clerk Kodiak Island Borough. Alaska KODIAK ISLAND B~JR~UGH Resolution No. FY2010-09 Exhibit K .. ’ " Publisher’s Affidavit UNITED STA~I:ES OF AMERICA State of Alaska SS: .- I, the mldersig~ed, being first duly sworn, depose and say: l am Editor or Publishe~ Of tim Kodiak Daily Mirror, a daily newspaper published in Kodiak, Third Jfidieial Division, State of Alaska, and that the annexed printed notice was published in said newspaper in isst~es of the following dates: S|g~atur~ of EOitor or P~bllsh~r SUBSCRIBED AND SWORN to before NOTARY pI~BLIC in and for (he State of Alaska. My Commission cxpir Exhibit L KODIAK ISLAND BOROUGH Assembly Regular Meeting October 15, 2009 A regular, meeting of the Kodiak Island Borough Assembly was held on Thursday, October 15, - 2009 In the Assembly Chambers of the Kodiak Istalld Borough Building, 710 Mill Say Road. The meeting was called to order at 7:30 p.m. The invocation was given by Captain John Qulnn of the Salvation Army. Deputy Presiding Officer Branson led the Pledge of Allegiance. Present were Deputy Presiding Ofl]c_~. r Pat Bransen, Assembly Members jerrol Friend, ,Judy Fulp, Sue Jeffrey, Dave Kaplan, Chris Lynch; and Louise .Stutes, Staff members present were Manager Rick Gifford, Clerk Nova Javier, and Deputy Clerk Marylynn MoFarland. JEFFREY moved to e~cuse Mayor Selby who was attending the Western Interstate Region Conference. VOICE VOTE ON MOTION CARRIED UNANIMOUSLY. APPROVAL OF AGEN DA AND CONSENT AGENDA JEFFREY moved t~ approve the agenda and consent agenda as submitted. VOICE VOTE ON MOTION CARRIED UNANIMOUSL?. APPROVAL OF MINUTES A. Regular Meeting Minutes of August ’6 and Specla! Meeting Minutes of August 18 and September 2.4, 2009 were approved under consent agenda. AWARDS AND PRESENTATIONS Manager Gifford presented the Employee of the Quarter (EOQ) Award to Pau! VanDyke, IT Supervise[ in the IT Department. Manager Gifford presented a Ten-Year Longevity Award to Ma~y Barber, Secretary III in the Engineering!Facilities DeparlmenL Deputy Presiding Officer Branson, on behalf of Mayer Selby, proclaimed the month of October 2009 as Domestic Violence Awareness Month urging all citizens to actively support and participate In the ongolng programs designed to reduce and eventually ellmlnate vie~ence as a social problem. She also proclalmed October 24, 2009 as" Coast Guard Appreciation Day In Kodiak urging citizens to recognize our Coast Guard Community for their individual and collective efforts In making Kodiak and all the navigable waters of Alaska a safer and. bert.or place to live, work, and play, CITIZENS’ COMMENTS _A__rthur Schultz, resident of 3580 Sltkinak Drive, read a letter to the Assembly regarding franc issues on Perenosa Drive. He urged the Assembly to look Into the matter. Kodiak Island Borough Assembly Minutes October 15, 2009 Page 728 COMMll"IFEE REPORTS Assembly member Stutes reported that SWAMC board mat On Thursday, October !5, 2009. Discussion Included lhe Inledm Report of the Interagency Oceans Policy Task Force. She gave en update regarding the ~qaa Llot~ rrlillg~fJon program funds. S~e mentioned the next Board mooting would be In A~,chorago on November 15, Assembly member Kaplan attended the Parks and Recreation Committee Meeting where shooting problems at White Sands Beach recreation area was addressed. Many agencies w~re represented at the meeting and Ideas were exchanged whlch included education in the schools and signaga on varl. ous properties, Assembly member Jeffrey reported that the Kodiak Fisher[as Advisory Committee meeting would be held at the Kodiak Community College, O~tober 10, 2009 at 9 a,m. PUBLIC HF.ARING None. BOROUGH MANAGER’~ RE, PORT Manager Glfford provided an update on the floodlng’.and landslide issues that occurred over the weekend. The Slate DiviSion of Homeland Security and Eme~ency Management was contacted end a request would be sent for possible response and recovery ~Inanclal assistance. He reporf~d damage and massive erosions to lhe roads servicing the Terror Lake Electric power plant and other Department of Transportation (DOT) managed roads. He reported he will be out of town to attend :AML/JIA Conference and for some personal leave October 17-26. In response to Assembly member 13ranson, he advised Ih&t the Borough has not received notice of the Block Grant for the Long Term Care facility yet, Upon receipt of updates and notices from both KANA and Providence Kodiak Islan~l Medical Center. KIB should be asia to move forward with the Block GranL MESSAGES FROM THE BOROUGH MAYOR None. UNRNISHED BUSINESS None. NEW BUSINESS Contracts None. Resolutions A. Resolution No. P-Y2010-09 Ra~ff’ylng and Certifying the Results of the Municipal Election Held October 6, 2009 STUTES moved to adopt Resolution No. FY2010-09. The Kodiak Island Borough election was held on October 6, 2009. The Canvass Review Board met on October 8 and 14 and examined in detail the resLilts from the different precincts including write-ins, absentee and questioned ballots, by mail .and personal representative ballots. Provided to the Assembly and public was a report of the canvass which included the resolution ratifying and certifying the results of the munlclpal elections. Clerk Javier thanked the election workers who worked hard In ensuring that the municipal election was conducted as Smooth as possible., Kodiak Island 13trough Assembly-Minutes Ootober 151 2009 Page ?’29 ROLL CALL VOTE ON MOTION CARRIED "UNANIMOUSLY: Branson, Fdend, Fulp, Jeffrey, Kaplan, Lynch, and Stutes. Resolution No. ,FY2010-10 Expressing Appreciation to Attorney Matt Jamln for His Tireless Efforts in Representing the Cl~ens of Kodiak In the. Exxon Valdez Oil Spill Litigation. JEFFREY movo~l to adopt ResolutionNo. FY2010=10. This resolution’ expressed appreciation to KIB Attorney Matt Jamln for his tireless efforts In representing Coastal Fishing Communities tn lhe Exxon Valdez Oil Spill litigation. ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Friend, Fu]p, Jeffrey,. Kaplan, ¯ Lynch, Stutes, and Branson. C. Resolution No. FY2010-11 Appointing a Member to the Kodiak Fisheries ’.Development Association. KAPLAN moved ]o adopt RosolulJon No. FY2010-11. The Kodiak Island Borough and City of Kodiak jointly designated the Kodiak Fisheries Development Association (KFDA) as the eligible crab community entity (ECCE). The by-laws of the KFDA provide for appointment of Directors to the Board b~/the Kodiak Island Borough Assembly end the Kodiak City Council. TWO of the three joint KFOA Director sea.ts’ terms expired in July 2008. Mr. Albert Tyler Schmeil indicated his desire to be appointed to one of the expired Jolnt seats for a term to expire’July 2011. Since. there was no Borough/City ~oint Work Session currently scheduled, both the Borough and City Managers proposed to present lhe appointment el~ Mr. Schmeil, ROLL CALL VOTE ’ON MOTION CARRIED "UNANIMOUSL’;(: Fulp, Jeffrey, Kaplan, Lynch, Stutes, Branson, and Friend. Ordinances for Introduction None. Other ttoms A_ Oath of Newly Elected Oflici~ls. Borough Clerk Javior adm]nlstered the Oath of Office to newly elected Assembly .members J~rml Friend and Chris L~lch. CITIZENS’ COMMENTS None. ASSEMBLY MEMBER COMMENTS Assembly members congratulated Ernployo.o of ~he Quarter Award recipient Paul VanDyke and Lon Longevity Award recipient, Mary Barbers, and newly~elected Assembly members Fdend and Lynch. They also thanked the Clerk’s Office staff and the olocl~on workers. Kodiak Island Borough Assembly Minu~es October 15, 2009 Page 730 A~embly member Lynch thanked those who worked on the flood areas and eroded roads. She emphasized the need to pdoritJze the Womens Bay emergency shelter. Assembly member Kaplan thanked the Coast Guard for its contribution to the community. Assembly member Fulp thanked the Clerk’s Office staff for organizing the trip to DC. She applauded everyone who am making Improvements to new and old buildings in Kodiak. She atlended the Community Health C~nter’s grand openlng and with the recent passage of ProposltJon No. 1, she hoped thai’the building project would go well. Assembly member Fdend thanked everyone for their support dudng election. She thanked the Clerk’s Office let a successful election. Assembly member Stutes concurred with ~11 the congratulatory comments of other Assembly member~. She noted that E~rechan, ink. dld a wonderful Job paving Sharatln Roa’d. Deputy Presiding OITIcer Branson thanked all those who ran fo.r office. ~he looked forward to seeing lhe new high school ]~reject progress and. thanked 1he community for its support. ADJOURNMENT JEFFREY moved to adjourn the meeting, ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Jeffrey, Kaplan, Stutas, Branson, Fdend~ Fuip, Jeffrey, and Kapian: The meeting adjourned at 8:10 p.m. ¯ ATTEST: .KOD.1AK ISLAND BOROUGH Approved: November 5, 2~)09 Kodiak Island Borough O~ober 15, 2009 Assembly Minutes Page 731 Exhibit M CERTIFICATE OF CLERK 1, TARA WELINSKY, Clerk of the Kodiak Island Borough (the "Borough"), HEREBY CERTIFY that the document attached hereto is an accurate and complete copy of Resolution No. FY2020-22 of the Borough adopted by the Borough Assembly at a meeting duly called and held March 19, 2020, and that Resolution No. FY2020-22 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 19th day of March, 2020. Borough Clerk Kodiak Island Borough Introduced by: Requested by: Drafted by: Introduced: Adopted: Borough Manager Finance Director Bond Counsel 03/19/2020 03/19/2020 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 3O 31 32 33 34 35 36 37 38 39 40 41 42 43 KODIAK ISLAND BOROUGH, ALASKA RESOLUTION NO. FY2020-22 A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY AUTHORIZING THE BOROUGH TO ISSUE GENERAL OBLIGATION SCHOOL BONDS IN THE PRINCIPAL AMOUNT NOT TO EXCEED $500,000 TO PROVIDE FUNDS FOR SCHOOL AND RELATED CAPITAL IMPROVEMENTS IN THE BOROUGH AND TO PAY COSTS OF ISSUING THE BONDS, FIXING CERTAIN DETAILS OF SUCH BONDS, AUTHORIZING THEIR SALE, AND PROVIDING FOR RELATED MATTERS WHEREAS, pursuant to Ordinance No. FY2010-03 of the Kodiak Island Borough, Alaska (the "Borough"), adopted August 6, 2009, a question whether the Borough should issue not to exceed $76,310,000 in general obligation bonds for the purpose of paying the cost of planning, designing, and constructing school and related capital improvements in the Borough, including without limitation, the reconstruction and renovation of the Kodiak High School, referred to the regular Borough election held on October 6, 2009, as Proposition No. 1 ("Proposition 1"), was passed and approved; and WHEREAS, pursuant to Resolution No. FY2011-18, the Borough issued its General Obligation School Bond, 2011 Series A, as a general obligation bond referred to in Proposition 1, which bond produced net proceeds of $8,000,000; and WHEREAS, pursuant to Resolution No. FY2013-26, the Borough issued its General Obligation School Bond, Series 2013, as a general obligation bond referred to in Proposition 1, which bond produced net proceeds of $25,000,000; and WHEREAS, pursuant to Resolution No. FY2014-24, the Borough issued its General Obligation School Bond, 2014 Series A, as a general obligation bond referred to in Proposition 1, which bond produced net proceeds of $25,000,000; and WHEREAS, pursuant to Resolution No. FY2016-05, the Borough issued its General Obligation School Bond, 2015 Series A, as a general obligation bond referred to in Proposition 1, which bond produced net proceeds of $7,000,000; and WHEREAS, pursuant to Resolution No. FY2016-23 the Borough issued its General Obligation School Bond, 2016 Series A, as a general obligation bond referred to in Proposition 1, which bond produced net proceeds of $2,000,000; and WHEREAS, pursuant to Resolution No. FY2019-13, the Borough issued its General Obligation School Bond, 2018 Series A, as a general obligation bond referred to in Proposition 1, which bond produced net proceeds of $550,000; and Kodiak Island Borough, Alaska FG:53683383.1 Resolution No, FY2020-22 Page 1 of 13 44 45 46 47 48 49 5O 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 8O 81 82 83 84 85 86 87 88 89 9O 91 92 93 94 WHEREAS, $8,760,000 principal amount of general obligation bonds remains unissued under Proposition 1; and WHEREAS, the Borough received $7,538,000 grant funding that may ultimately reduce the amount of bond proceeds needed for the project; and WHEREAS, the Assembly finds that it is in the best interest of the Borough to plan, design, and construct the school capital improvements described in Proposition 1 as the reconstruction and renovation of the Kodiak High School (the "Project"), and to issue not to exceed $500,000 principal amount of general obligation bonds referred to in Proposition 1, to pay part of the costs of the Project and costs of issuing the bonds; and WHEREAS, Section 29.47.410 of the Alaska Statutes provides that the Assembly by resolution may provide for the form and manner of sale of bonds and notes; 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, including without limitation, whether to sell the Bonds to the Alaska Municipal Bond Bank (the "Bond Bank") or another Financial Institution or to offer the Bonds at public sale; 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" or "Bonds" means any of the "General Obligation School Bonds" of the Kodiak Island Borough, the issuance and sale of which are authorized herein. (c) "Bond Bank" means the Alaska Municipal Bond Bank, a public corporation of the State of Alaska. (d) "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 Bonds. (e) "Bond Reqister" means the registration books maintained by the Registrar, which include the names and addresses of the Registered Owners of the Bonds or their nominees. (f) "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. Kodiak Island Borough, Alaska Resolution No. FY2020-22 Page 2 of 13 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 t24 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 (g) "Borough Manaqer" means the Manager or Administrative Official of the Borough. (h) "Code" means the Internal Revenue Code of 1986, as amended from time to time, together with all regulations applicable thereto. (i) "Cost" or "Costs" means the cost of planning, designing, acquiring property for, acquiring, constructing, installing, and equipping the Project, including interest on the Bonds during the period of planning, designing, acquiring property for, acquiring, constructing, installing, and equipping the Project, the cost whether incurred by the Borough or by another of field surveys and advance planning undertaken in connection with the Project properly allocable to the Project, the cost of acquisition of any land or interest therein required as the site or sites of the Project or for use in connection therewith, the cost of any indemnity and surety bonds and premiums on insurance incurred in connection with the Project prior to or during construction thereof, all related direct administrative and inspection expenses whether incurred by the Borough or by another in connection with the Project prior to or during construction thereof and allocable portions of direct costs of the Borough, legal fees, costs of issuance of the Bonds by the Borough, including financing charges and fees and expenses of bond counsel, financial advisors, and consultants in connection therewith, the cost of any bond insurance premium and bond ratings, the cost of audits, the cost of all machinery, apparatus, and equipment, cost of engineering, architectural services, designs, plans, specifications and surveys, estimates of cost, the reimbursement of all money advanced from whatever source for the payment of any item or items of cost of the Project, and all other expenses necessary or incidental to the acquisition and development of the Project, the financing thereof and the putting of the same in use and operation. (j) "Financial Institulion" means any bank or other financial institution insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation. (k) "Government Obliqations" 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) "Loan A.qreement" means the Loan Agreement between the Borough and the Bond Bank or other Financial Institution concerning the Bonds. (m) "Reqistered Owner" means the person named as the registered owner of a Bond in the Bond Register. (n) "Reqistrar" means the Borough Finance Director, or any successor that the Borough may appoint by resolution. Kodiak Island Borough, Alaska Resolution No. FY2020-22 Page 3 of 13 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 Section 2: Section 3: Section 4: (o) "Resolution" means this Resolution No. FY2020-22 of the Borough. Authorization of Bonds and Purpose of Issuance. For the purpose of providing funds for financing the Costs of the Project, the Borough shall issue and sell general obligation bonds designated "Kodiak Island Borough, Alaska, General Obligation School Bonds" (the "Bonds") in the aggregate principal amount of not to exceed $500,000. The proceeds of the Bonds shall be used to pay Costs of the Project. The Project serves a public purpose of the Borough. The Manager and/or the Finance Director are hereby authorized to determine whether the Bonds shall be sold to the Bond Bank or a Financial Institution or sold at public sale, and whether to issue the Bonds in one or more issues, but in no event shall the aggregate principal amount of the Bonds exceed $500,000. Obli.qation of Bonds. The Bonds shall be direct and general obligations 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 Bonds. 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 Bonds as the same become due and payable. Desiqnation, Maturities, Interest Rates, a.nd Other Details of Bond.~. The Bonds shall be designated "Kodiak Island Borough, Alaska, General Obligation School Bonds." The Bonds shall be in the denomination of $5,000 or any integral multiple thereof, shall be numbered separately 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 Bonds shall mature in one or more years commencing no earlier than July 1, 2020, and ending no later than twenty years after their date of issuance. The Bonds shall bear interest from their date, payable commencing on a date on or after July 1, 2020, and semi-annually thereafter. 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 and interest payment dates, the record dates for interest payments, the aggregate principal amount, the principal amount of each maturity, and the interest rates on the Bonds shall be determined at the time of execution of the Loan Agreement at or before public sale of the Bonds under Section 17. Kodiak Island Borough, Alaska Resolution No. FY2020-22 Page 4 of 13 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 Section 5: Section 6: Optional Redemption. The Bonds, if any, subject to optional redemption by the Borough, the time or times when such Bonds are subject to optional redemption, the terms upon which such Bonds may be redeemed, and the redemption price or redemption prices for such Bonds, shall be determined at the time of sale of the Bonds by the Borough Manager or Finance Director. Selection of Bonds for Redemption; Notice of Redemption. (a) Selection of Bonds for Redemption. When and if the Bond Bank or a Financial Institution is the Registered Owner of the Bonds, the selection of Bonds to be redeemed shall be made as provided in the Loan Agreement. When and if the Bond Bank or a Financial Institution is not the Registered Owner of the Bonds, the selection of Bonds to be redeemed shall be made as provided in this subsection (a). If the Borough redeems at any one time fewer than all of the Bonds having the same malurity date, the particular Bonds or portions of Bonds of such maturity to be redeemed shall be selected randomly (or in such other manner determined by the Registrar) in increments of $5,000. In the case of a Bond of a denomination greater than $5,000, the Borough shall treat such Bond as representing such number of separate Bonds each of the denomination of $5,000 as is obtained by dividing the actual principal amount of such Bond by $5,000. In the event that only a portion of the principal amount of a Bond is redeemed, upon surrender of such Bond at the office of the Registrar there shall be issued to the Registered Owner, without charge therefor, for the then unredeemed balance of the principal amount thereof, at the option of the Registered Owner, a Bond or Bonds of like maturity and interest rate in any of the denominations authorized herein. (b) Notice of Redemption. When and if the Bond Bank or a Financial Institution is the Registered Owner of the Bonds, notice of any intended redemption of Bonds shall be given as provided in the Loan Agreement. When and if the Bond Bank or a Financial Institution is not the Registered Owner of the Bonds, notice of any intended redemption of Bonds shall be given as provided in this subsection (b). Notice of redemption shall be mailed not less than 20 or more than 45 days prior to the date fixed for redemption by first class mail to Registered Owners of the Bonds to be redeemed at their addresses as they appear on the Bond Register on the day the notice is prepared. Notice of redemption shall be deemed to have been given when the notice is mailed as herein provided, whether or not it is actually received by the Registered Owners. All notices of redemption shall be dated and shall state: (1) the redemption date; (2) the redemption price; (3) if fewer than all outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed; (4) that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date; and (5) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the office of the Registrar. Kodiak Island Borough, Alaska Resolution No. FY2020-22 Page 5 of 13 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 27O 271 272 273 274 275 276 277 278 279 28O 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 Section 7: Official notice of redemption having been given as stated above, Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date, such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. All Bonds which have been redeemed shall be canceled and destroyed by the Registrar and shall not be reissued. Each check or other transfer of funds issued to pay the redemption price of Bonds shall bear the CUSIP number, if any, identifying by maturity the Bonds being redeemed with the proceeds of such check or other transfer. Form of Bond. Each Bond shall be in substantially the following form, with such variations, omissions, and insertions as may be required or permitted by this Resolution: UNITED STATES OF AMERICA KODIAK ISLAND BOROUGH, ALASKA NO. GENERAL OBLIGATION SCHOOL BOND REGISTERED OWNER: 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 1, 20m, and semiannually thereafter on ....................... 1, and ~ 1, of each year, at the rates per annum as follows: Maturity Principal Interest D..a.te. Amount Rate When and if this Bond is owned by the Alaska Municipal Bond Bank or a Financial Institution, payment of principal and interest shall be made as provided in the Loan Agreement between the Bond Bank or Financial Institution and the Borough (the "Loan Agreement"). When and if this Bond is not owned by the Bond Bank or a Financial Institution, 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 Kodiak Island Borough, Alaska Resolution No. FY2020-22 Page 6 of 13 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 lhe 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 Bend 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 one of the General Obligation School Bonds of the Kodiak Island Borough, Alaska, of like tenor and effect except as to interest rate, serial number, right of redemption or prepayment and maturity, and constituting Bonds authorized for the purpose of paying the cost of school and related capital improvements in the Borough, and is issued under Resolution No. FY2020-22 of the Borough entitled: A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY AUTHORIZING THE BOROUGH TO ISSUE GENERAL OBLIGATION SCHOOL BONDS IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED $500,000 TO PROVIDE FUNDS FOR SCHOOL AND RELATED CAPITAL IMPROVEMENTS IN THE BOROUGH AND TO PAY COSTS OF ISSUING THE BONDS, FIXING CERTAIN DETAILS OF SUCH BONDS, AUTHORIZING THEIR SALE, AND PROVIDING FOR RELATED MATTERS (the "Resolution"). The Bonds [Installments of principal of this Bond] maturing on and after ~ 1, 20__, shall be subject to prepayment on and after ~ 1, 20__, at the option of the Borough [(subject to any applicable provisions of ihe Loan Agreement)], in such principal amounts and from such maturities as the Borough may determine, and by lot within a maturity, at a redemption price equal to the principal amount to be prepaid, plus accrued interest to the date of prepayment. This Bond is transferable as provided in the Resolution, (i) only upon the Bond Register of the Borough, and (ii)upon surrender of this Bond together with a written instrument of transfer duly executed by the Registered Owner or the duly authorized attorney of the Registered Owner, and thereupon a new fully registered Bond or Bonds in the same aggregate principal amount and maturity shall be issued to the transferee in exchange therefor as provided in the Resolution and upon the payment of charges, if any, as therein prescribed. The Borough may treat and consider the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price, if any, hereof and interest due hereon and for all other purposes whatsoever. This Bond is a general obligation of the Kodiak Island Borough, and the full faith and credit of the Borough are pledged for the payment of the principal of and interest on this Bond as the same shall become due. Kodiak Island Borough, Alaska Resolution No. FY2020-22 Page 7 of 13 348 349 350 351 352 353 354 355 356 357 358 359 360 361 362 363 364 365 366 367 368 369 370 371 372 373 374 375 376 377 378 379 38O 381 382 383 384 385 386 387 388 389 390 391 392 393 394 395 396 397 Section 8: Section 9: IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, or things required by the constitution or statutes of the State of Alaska to exist, to have happened, or to have been performed precedent to or in the issuance of this Bond exist, have happened, and have been performed, and that the series of Bonds of which this is one, together with all other indebtedness of the Borough, is within every debt and other limit prescribed by such constitution or statutes. IN WITNESS WHEREOF, THE KODIAK ISLAND BOROUGH, ALASKA, has caused this Bond to be signed in its name and on its behalf by the manual or facsimile signature of its Mayor and its corporate seal (or a facsimile thereof) to be impressed or otherwise reproduced hereon and attested by the manual or facsimile signature of its Clerk, all as of the day of ,2020. KODIAK ISLAND BOROUGH /specimen/ Borough Mayor ATTEST: /specimen/ Borough Clerk Execution. The Bonds shall be executed in the name of the Borough by the manual or facsimile signature of the Mayor, and its corporate seal (or a facsimile thereof) shall be impressed or otherwise reproduced thereon and attested by the manual or facsimile signature of the Borough Clerk. The execution of a Bond on behalf of the Borough by persons who at the time of the execution are duly authorized to hold the proper offices shall be valid and sufficient for all purposes, although any such person shall have ceased to hold office at the time of delivery of the Bond or shall not have held office on the date of the Bond. Payment of Principal and Interest. The Bonds shall be payable in lawful money of the United States of America which at the time of payment is legal tender for the payment of public and private debts. When and if the Bond Bank or a Financial Institution is the Registered Owner of the Bonds, payment of principal of and interest on the Bonds shall be made as provided in the Loan Agreement. When and if the Bond Bank or a Financial Institution is not the Registered Owner of the Bonds, installments of principal of and interest on the Bonds shall be paid by check mailed by first class mail to the Registered Owner as of the record date for the installment payment at the address appearing on the Bond Register; provided, that the final installment Kodiak Island Borough, Alaska Resolution No. FY2020-22 Page 8 of 13 398 399 400 401 402 403 404 405 406 407 4O8 409 410 411 412 413 414 415 416 417 418 419 420 421 422 423 424 425 426 427 428 429 430 431 432 433 434 435 436 437 438 439 44O 441 442 443 444 445 446 447 448 Section 10: Section 11: Section 12: Section 13: of principal and interest on a Bond shall be payable upon presentation and surrender of the Bond by the Registered Owner at the office of the Registrar. ReClistration. The Bonds shall be issued only in registered form as to both principal and interest. The Borough designates the Borough Finance Director as Registrar for the Bonds. The Registrar shall keep, or cause to be kept, the Bond Register at the principal office of the Borough. The Borough covenants that, until all Bonds have been surrendered and canceled, it will maintain a system for recording the ownership of each Bond that complies with the provisions of Section 149 of the Code. The Borough and the Registrar may treat the person in whose name any Bond shall be registered as the absolute owner of such Bond for all purposes, whether or not the Bond shall be overdue, and all payments of principal of and interest on a Bond made to the Registered Owner thereof or upon its order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the Borough nor the Registrar shall be affected by any notice to the contrary. Transfer and Exchancje. Bonds shall be transferred only upon the Bond Register. Upon surrender for transfer or exchange of any Bond at the office of the Registrar, together with a written instrument of transfer or authorization for exchange in form and with guaranty of signature satisfactory to the Registrar, duly executed by the Registered Owner or the duly authorized attorney of the Registered Owner, the Borough shall execute and deliver an equal aggregate principal amount of Bonds of the same maturity of any authorized denominations, subject to such reasonable regulations as the Borough may prescribe and upon payment sufficient to reimburse it for any tax, fee or other governmental charge required to be paid in connection with such transfer or exchange. All Bonds surrendered for transfer or exchange shall be canceled by the Registrar. Bonds Mutilated. Destroyed, Stolen, or Lost. Upon surrender to the Registrar of a mutilated Bond, the Borough shall execute and deliver a new Bond of like maturity and principal amount. Upon filing with the Registrar of evidence satisfactory to the Borough that a Bond has been destroyed, stolen, or lost and of the ownership thereof, and upon furnishing the Borough with indemnity satisfactory to it, the Borough shall execute and deliver a new Bond of like maturity and principal amount. The person requesting the execution and delivery of a new Bond under this section shall comply with such other reasonable regulations as the Borough may prescribe and shall pay such expenses as the Borough may incur in connection therewith. Disposition of the Sale Proceeds of the Bonds. The sale proceeds of the Bonds representing accrued interest on the Bonds shall be applied to pay a portion of the interest due on the Bonds on the first interest payment date for the Bonds. The sale proceeds of the Bonds representing original issue premium on the Bonds shall be applied to pay a portion of the interest due on the Bonds on the first interest payment date for the Bonds, or Costs of the Project, and shall be deposited in such manner as the Borough Manager or the Borough Finance Director may determine. The remaining sale proceeds of the Bonds shall be applied to pay Costs of the Project, and shall Kodiak Island Borough, Alaska Resolution No. FY2020-22 Page 9 of 13 449 450 451 452 453 454 455 456 457 458 459 460 461 462 463 464 465 466 467 468 469 470 471 472 473 474 475 476 477 478 479 480 481 482 483 484 485 486 487 488 489 490 491 492 493 494 495 496 497 498 Section 14: Section 15: be deposited in the appropriate funds or accounts of the Borough for such purposes. Tax Covenants. The Borough covenants to comply with any and all applicable requirements set forth in the Code in effect from time to time to the extent that such compliance shall be necessary for the exclusion of the interest on the Bonds from gross income for federal income tax purposes. The Borough covenants that it will make no use of the proceeds of the Bonds which will cause the Bonds to be "arbitrage bonds" subject to federal income taxation by reason of Section 148 of the Code. The Borough covenants that it will not take or permit any action that would cause the Bonds to be "private activity bonds" as defined in Section 141 of the Code. Amendatory and Supplemental Resolutions. (a) The Assembly from time to time and at any time may adopt a resolution or resolutions supplemental hereto, which resolution or resolutions thereafter shall become a part of this Resolution, for any one or more of the following purposes: (1) To add to the covenants and agreements of the Borough in this Resolution, other covenants and agreements thereafter to be observed or to surrender any right or power herein reserved to or conferred upon the Borough. (2) To make such provisions for the purpose of curing any ambiguities or of curing, correcting, or supplementing any defective provision contained in this Resolution or in regard to matters or questions arising under this Resolution as the Assembly may deem necessary or desirable and not inconsistent with this Resolution and which shall not adversely affect the interests of the Registered Owners of the Bonds. Any such supplemental resolution may be adopted without the consent of the Registered Owners of any of the Bonds at any time outstanding, notwithstanding any of the provisions of subsection (b) of this section. (b) With the consent of the Registered Owners of not less than 60 percent in aggregate principal amount of the Bonds at the time outstanding, the Assembly may adopt a resolution or resolutions supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Resolution or of any supplemental resolution; provided, however, that no such supplemental resolution shall: (1) Extend the fixed maturity of any of the Bonds, or reduce the rate of interest thereon, or extend the time of payments of interest from their due date, or reduce the amount of the principal thereof, or reduce any premium payable on the redemption thereof, without the consent of the Registered Owner of each Bond so affected; or Kodiak Island Borough, Alaska Resolution No. FY2020-22 Page 10 of 13 499 5OO 501 502 503 504 5O5 506 507 5O8 509 510 511 512 513 514 515 516 517 518 519 52O 521 522 523 524 525 526 527 528 529 530 531 532 533 534 535 536 537 538 539 540 541 542 543 544 545 546 547 548 549 Section 16: Section 17: (2) Reduce the aforesaid percentage of Registered Owners of Bonds required to approve any such supplemental resolution without the consent of the Registered Owners of all of the Bonds then outstanding. It shall not be necessary for the consent of the Registered Owners of the Bonds under this subsection to approve the particular form of any proposed supplemental resolution, but it shall be sufficient if such consent approves the substance thereof. (c) Upon the adoption of any supplemental resolution under this section, this Resolution shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties, and obligations under this Resolution of the Borough and all Registered Owners of outstanding Bonds shall thereafter be subject in all respects to such modification and amendment, and all the terms and conditions of the supplemental resolution shall be deemed to be part of the terms and conditions of this Resolution for any and all purposes. (d) Bonds executed and delivered after the adoption of any supplemental resolution under this section may bear a notation as to any matter provided for in such supplemental resolution, and if such supplemental resolution shall so provide, new Bonds modified so as to conform, in the opinion of the Borough, to any modification of this Resolution contained in any such supplemental resolution may be prepared by the Borough and delivered without cost to the Registered Owners of the Bonds then outstanding, upon surrender for cancellation of such Bonds in equal aggregate principal amounts. Defeasance In the event money and/or non-callable Government Obligations maturing at such times and bearing interest to be earned thereon in amounts sufficient to redeem and retire any or all of the Bonds in accordance with their terms are set aside in a special trust account to effect such redemption or retirement and such money and the principal of and interest on such Government Obligations are irrevocably set aside and pledged for such purpose, then no further payments need be made to pay or secure the payment of the principal of and interest on such Bonds and such Bonds shall be deemed not to be outstanding. Sale of Bonds. The Bonds shall be sold at negotiated sale to the Bond Bank or a Financial Institution as provided in the form of Loan Agreement or at public sale as the Borough Manager and Finance Director determine is in the best interest of the Borough. Subject to the limitations provided in Sections 2 and 4, each of the Borough Manager and the Borough Finance Director is hereby authorized to determine the aggregate principal amount, maturity amounts, interest rates, yields, dated date, principal and interest payment dates, redemption terms, if any, for the Bonds, and other details of the Bonds; provided that the true interest cost of the Bonds, expressed as an annual rate, does not exceed four percent. In determining the maturity amounts, interest rates, yields, and redemption terms, if any, for the Bonds, the Borough Manager or Borough Finance Director shall take into account Kodiak Island Borough, Alaska Resolution No. FY2020-22 Page 11 of 13 55O 551 552 553 554 555 556 557 558 559 560 561 562 563 564 565 566 567 568 569 57O 571 572 573 574 575 576 577 578 579 580 581 582 583 584 585 586 587 588 589 590 591 592 593 594 595 596 597 598 599 Section 18: Section 19: Section 20: Section 21: Section 22: those factors which, in the judgment of each, will result in the lowest true interest cost on the Bonds, including without limitation current financial market conditions and current interest rates for obligations comparable in tenor and quality to the Bonds. Based upon the foregoing determinations, the Borough Manager and the Borough Finance Director each is authorized to execute the Loan Agreement or to sell the Bonds at public sale as they deem appropriate and cost effective to, and in the best interest of, the Borough. Authority of Officers. The Mayor, the Borough Manager, the Borough Finance Director, and the Borough Clerk each is authorized and directed to do and perform all things and determine all matters not determined by this Resolution, to the end that the Borough may carry out its obligations under the Bonds and this Resolution. Prohibited Sale of Bonds. No person, firm, or corporation, or any agent or employee thereof, acting as financial consultant to the Borough under an agreement for payment in connection with the sale of the Bonds is eligible to purchase the Bonds as a member of the original underwriting syndicate either at public or private sale. Onqoinq Disclosure. The Borough acknowledges that under Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") the Borough may now or in the future be an "obligated person." In accordance with the Rule, and as the Bond Bank or a Financial Institution may require, the Borough shall undertake to provide certain annual financial information and operating data as shall be set forth in the Loan Agreement. Miscellaneous. (a) All payments made by the Borough of, or on account of, the principal of or interest on the Bonds shall be made on the several Bonds ratably and in proportion to the amount due thereon, respectively, for principal or interest as the case may be. (b) No recourse shall be had for the payment of the principal of or the interest on the Bonds or for any claim based thereon or on this Resolution against any member of the Assembly or officer of the Borough or any person executing the Bonds. The Bonds are not and shall not be in any way a debt or liability of the State of Alaska or of any political subdivision thereof, except the Borough, and do not and shall not create or constitute an indebtedness or obligation, either legal, moral, or otherwise, of such state or of any political subdivision thereof, except the Borough. Severability. If any one or more of the provisions of this Resolution shall be declared by any court of competent jurisdiction to be contrary to law, then such provision shall be null and void and shall be deemed separable from the remaining provisions of this Resolution and shall in no way affect the validity of the other provisions of this Resolution or of the Bonds. Kodiak Island Borough, Alaska Resolution No. FY2020-22 Page 12 of 13 6O0 601 602 603 604 605 606 607 608 609 610 611 612 613 614 615 616 617 618 Section 23: Effective Date. This Resolution shall become effective upon passage and approval. ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS 19TH DAY OF MARCH, 2020 KODIAK UGH AFTEST: Borough Mayor Kodiak Island Borough, Alaska Resolution No. FY2020-22 Page 13 of 13 Exhibit N Kodiak Island Borough Assembly Regular Meeting Agenda Thursday, March 19, 2020, 6:30 p.m., Teleconference 1. INVOCATION 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL APPROVAL OFAGENDAAND CONSENTAGENDA All items listed with an asterisk (*) are considered to be routine and non- controversial by the Assembly and will be approved by one motion. There will be no separate discussion of these items unless an Assembly member so requests, in which case the item will be removed from the Consent Agenda and considered in its normal sequence on the agenda. *APPROVAL OF MINUTES A. *Regular Meeting Minutes Of March 5, 2020 and Special Meeting Minutes of March 12, 2020. 2020-03-05 RM Minutes 2020-03-12 SM Minutes o CITIZENS’ COMMENTS (Limited To Three Minutes Per Speaker) A. Agenda Items Not Scheduled For Public Hearing And General Comments AWARDS AND PRESENTATIONS A. * Child Abuse Prevention Month Proclamation Child Abuse Prevention 2020 * Sexual Assault Awareness Month Proclamation Sexual Assault 2020 C. Bear Awareness Presentation - Alaska Department of Fish and Meeting broadcast live over radio station KMXT 100.1 FM. Citizens’ Comments and Public Hearing Numbers: Toll Free (855) 492-9202 and Local 486-3231. Visit our website at i~[ ~ @KodiakBorough Game, Nate Svoboda. 8. COMMITTEE REPORTS PUBLIC HEARING Ordinance No. FY2020-18 Emergency Ordinance To Allow Regular Meetings To Be Conducted Via Teleconference Ordinance No. FY 2020-18 Declaring An Emergency And Amending KIB Code Section 2.30.020, General Rules, And Providing For An Immediate Effective Date 10. BOROUGH MANAGER’S REPORT A. Borough Manager’s Report For March 19, 2020 2020-03-19 11. MESSAGES FROM THE BOROUGH MAYOR 12. UNFINISHED BUSINESS A. Ordinance No. FY2020-15 Amending Title 3 Revenue And Finance Chapter 3.10.030 Permissible Investments And Chapter 3.10.120 Facilities Fund Output Document (AS - 1092) - Pdf 13. NEW BUSINESS 13.A. Contracts Approval of Collective Bargaining Agreement with IBEW Output Document (AS - 1144) - Pdf 13.B. Resolutions Resolution No. FY2020-22 A Resolution Of The Kodiak Island Borough Assembly Authorizing The Borough To Issue General Obligation School Bonds In The Principal Amount Not To Exceed $ To Provide Funds For School And Related Capital Improvements In The Borough And To Pay Costs Of Issuing The Bonds, Fixing Certain Details Of Such Bonds, Authorizing Their Sale, And Providing For Related Matters Meeting broadcast live over radio station KMXT 100.1 FM. Citizens’ Comments and Public Hearing Numbers: Toll Free (855) 492-9202 and Local 486-3231. Visit our website at ~,~ ~i4 @KodiakBorough Output Document (AS - 1132) - Pdf Ordinances for Introduction Other Items * Confirmation of the Mayoral Appointment to the Prince William Sound Regional Citizens Advisory Council (Ms. Rebecca Skinner). Output Document (AS - 1122) - Pdf * Confirmation Of The Mayoral Appointment To The Solid Waste Advisory Board (Ms. Pruitt). Output Document (AS - 1138) - Pdf * Letter of Support Senior Citizens Of Kodiak (SCOK) Grant Application For Family Caregiver Support Services Family Caregiver Support Services - Dept of Health Services o * Letter Of Support Senior Citizens Of Kodiak (SCOK) Grant Application For Island Cove Adult Day Services Island Cove Adult Day Services - Dept of Health Services 14. 15. CITIZENS’ COMMENTS (Limited To Three Minutes Per Speaker) ASSEMBLY MEMBERS’ COMMENTS 16. EXECUTIVE SESSION A. The Potential Sale, Including Terms And Price, Of Real Property Known As Killarney Hills Tract Located On E. Rezanoff And Woody Way Loop B. Disposal Of Borough Land On Borough Hill: Terms, Conditions and Price C. Borough Clerk’s Evaluation 17. ADJOURNMENT 18. INFORMATIONAL MATERIALS (No Action Required) 18.A. Minutes of Other Meetings Meeting broadcast live over radio station KMXT 100.1 FM. Citizens’ Comments and Public Hearing Numbers: Toll Free (855) 492-9202 and Local 486-3231. Visit our website at ~ ~ @KodiakBorough 18.B. Reports 1. February 2020 Projects Report Meeting broadcast live over radio station KMXT 100.1 FM. Citizens’ Comments and Public Hearing Numbers: Toll Free (855) 492-9202 and Local 486-3231. Visit our website at ~i~!, .~. @KodiakBorough Exhibit 0 KODIAK ISLAND BOROUGH Assembly Regular Meeting Teleconference March 19, 2020 A regular meeting of the Kodiak Island Borough Assembly was held on March 19, 2020 via teleconference. The meeting was called to order at 6:56 p.m. Mayor Roberts led the Pledge of Allegiance. Present were Mayor Bill Roberts, Assembly members Scott Arndt, Duane Dvorak, Julie Kavanaugh, Andy Schroeder, Rebecca Skinner, Dennis Symmons, and James Turner. Also present were Borough Manager Michael Powers, Borough Clerk Tara Welinsky, and Deputy Clerk Alise Rice. APPROVAL OF AGENDA AND CONSENT AGENDA ARNDT moved to approve the agenda and consent agenda. ARNDT moved to amend the agenda and consent agenda by removing the Bear Awareness Presentation from Awards and Presentations, Ordinance No. FY2020-18 Emergency Ordinance To Allow Regular Meetings To Be Conducted Via Teleconference from Public Hearing, and The Potential Sale, Including Terms And Price, Of Real Property Known As Killarney Hills Tract Located On E. Rezanof And Woody Way Loop, Disposal Of Borough Land On Borough Hill: Terms, Conditions and Price, and the Borough Clerk’s Evaluation from Executive Session. ROLL CALL VOTE ON MOTION TO AMEND THE AGENDA AND CONSENT AGENDA CARRIED UNANIMOUSLY: Dvorak, Kavanaugh, Schroeder, Skinner, Symmons, Turner, and Arndt. ROLL CALL VOTE ON THE MAIN MOTION AS AMENDED CARRIED UNANIMOUSLY: Kavanaugh, Schroeder, Skinner, Symmons, Turner, Arndt, and Dvorak. The following items were approved under consent agenda: ¯ Regular Meeting Minutes of March 5, 2020 and Special Meeting Minutes of March 12, 2020. ¯ Confirmation of the Mayoral Appointment to the Prince William Sound Regional Citizens Advisory Council (Ms. Skinner). ¯ Confirmation Of The Mayoral Appointment To The Solid Waste Advisory Board (Ms. Pruitt). ¯ Letter of Support Senior Citizens Of Kodiak (SCOK) Grant Application For Family Caregiver Support Services. ¯ Letter Of Support Senior Citizens Of Kodiak (SCOK) Grant Application For Island Cove Adult Day Services. ° Child Abuse Prevention Month Proclamation. ° Sexual Assault Awareness Month Proclamation Kodiak Island Borough March 19, 2020 Assembly Regular Meeting Minutes Pase 1 of 5 APPROVAL OF MINUTES o Regular Meeting Minutes of March 5, 2020 and Special Meeting Minutes of March 12, 2020 were approved under consent agenda. CITIZENS’ COMMENTS ¯ Mary Forbes ¯ Aaron Williams ¯ Mike Litzow AWARDS AND PRESENTATIONS ¯ **Mayor Roberts Proclaimed The Month Of March 2020 As Child Abuse Prevention Month. ¯ **Mayor Roberts Proclaimed The Month Of March 2020 As Sexual Assault Awareness Month. ¯ **Bear Awareness Presentation - Alaska Department of Fish and Game, Nate Svoboda. **These items were removed from the agenda and consent agenda. COMMITTEE REPORTS PUBLIC HEARING 1. ** Ordinance No. FY2020-18 Emergency Ordinance To Allow Regular Meeting To Be Conducted Via Teleconference. **This item was removed from the agenda and consent agenda. BOROUGH MANAGER’S REPORT Manager Powers reported on the following: ¯ Gave an update on the status of COVID-19 ¯ A local emergency has been declared by the Emergency Services Council. ¯ The Emergency Operations Center (EOC) has been activated and specific objectives and action plans are being completed. ¯ The ONLY effective prevention of COVID-19 is social distancing. If you must go out in public, wash your hands, use sanitizer, avoid groups of people. ¯ The Borough Building (Borough and City Offices) will be closed to the public effective March 20, 2020. Employees who will be managing this disaster must remain healthy. ¯ The food supply chain is secure. ¯ There have been numerous meetings in the past two weeks. ¯ A word about responsibilities. We have the Emergency Services Council (ESC) which is responsible for policy level decisions related to emergencies. We have the Emergency Operations Center/Emergency Operations Team which is responsible for carrying out the policies of the ESC. The Local Emergency Planning Committee is a planning committee, not a response committee. ¯ Travel for Borough Business is halted until June 1, 2020. Will reconsider as needed. ¯ All employees who have traveled or do voluntarily travel will be quarantined on their return 14 days. ¯ Don’t travel. ¯ Help crush the rumor mill-if the source of information is not an official source, it is a rumor and should be treated as such. Ask people for their source. At this time, the official sources are the Federal Government, the State of Alaska and the Emergency Kodiak Island Borough March 19, 2020 Assembly Regular Meeting Minutes Page 2 of 5 Operations Center on Kodiak. Just because the New York Times cites "unnamed government personnel" does not make it so. Your friend who heard it from a friend on the XYZ non-profit/government/native corporation (fill in the blank) is NOT an official source. The City of Kodiak has expressed interest in purchasing Borough land on Borough Hill. Kodiak Island Native Association (KANA) has expressed interest in purchasing Killarney Hills. MESSAGES FROM THE BOROUGH MAYOR ¯ Borough Clerk, Tara Welinsky, has resigned from her position as Borough Clerk. May 22nd will be her last day. ¯ Agendas will be streamlined. Work Sessions will be focused on packet review of important, time-sensitive items coming up at the Regular Meetings. UNFINISHED BUSINESS 1. Ordinance No. FY2020-15 Amending Title 3 Revenue And Finance Permissible Investments And Chapter 3.10.120 Facilities Fund. Chapter 3.10.030 *Clerks Note: This was postponed from the February 6, 2020 regular meeting. ARNDT moved to postpone Ordinance No. FY2020-15 indefinitely. ROLL CALL VOTE ON MOTION TO POSTPONE INDEFINITELY CARRIED UNANIMOUSLY: Kavanaugh, Schroeder, Skinner, Symmons, Turner, Arndt, and Dvorak. NEW BUSINESS Contracts ARNDT moved to authorize the Borough Manager to execute Contract No. FY2020-18 Agreement Between Kodiak Island Borough And International Brotherhood Of Electrical Workers ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Schroeder, Skinner, Symmons, Turner, Arndt, Dvorak and Kavanaugh, Resolutions Resolution No. FY2020-22 A Resolution Of The Kodiak Island Borough Assembly Authorizing The Borough To Issue General Obligation School Bonds In The Principal Amount Not To Exceed $1,222,000 To Provide Funds For School And Related Capital Improvements In The Borough And To Pay Costs Of Issuing The Bonds, Fixing Certain Details Of Such Bonds Authorizing Their Sale, And Providing For Related Matters. ARNDT moved to approve Resolution No. FY2020-02. SKINNER moved to amend the motion not to exceed $500,000.00 ROLL CALL VOTE ON MOTION AS AMENDED CARRIED FIVE TO TWO: Skinner, Symmons, Dvorak, Kavanaugh, Schroeder (AYES); Turner and Arndt (NOES). Kodiak Island Borough March 19, 2020 Assembly Regular Meeting Minutes Page 3 of 5 ROLL CALL VOTE ON MAIN MOTION CARRIED FIVE TO TWO: Symmons, Dvorak, Kavanaugh, Schroeder, and Skinner (AYES); Turner and Arndt (NOES). Ordinances for Introduction None. Other Items 1. *Confirmation of the Mayoral Appointment to the Prince William Sound Regional Citizens Advisory Council (Ms. Skinner). 2. *Confirmation Of" The Mayoral Appointment To The Solid Waste Advisory Board (Ms. Pruitt). 3. *Letter of Support Senior Citizens Of Kodiak (SCOK) Grant Application For Family Caregiver Support Services 4. *Letter Of Support Senior Citizens Of Kodiak (SCOK) Grant Application For Island Cove Adult Day Services *These items were approved under consent agenda CITIZENS’ COMMENTS ¯ Aaron Williams ASSEMBLY MEMBERS’ COMMENTS ¯ Assembly Member Kavanaugh thanked the community for coming together at this difficult time. ¯ Assembly Member Schroeder stated that the country is abiding by a ’social contract’ and spoke about the health care workers at Providence Hospital has been resolved ¯ Assembly Member Turner commented on filling the clerk’s office position. ¯ Assembly Member Dvorak commented on the Clerk resigning. Spoke about the land sales discussed earlier in the meeting and DMV. ¯ Assembly Member Arndt spoke about closing the borough building and hiring for the Clerk’s position. ¯ Assembly Member Symmons thanked citizens for calling in and thanked staff for all their hard work. Assembly Member Skinner spoke about telephonic meetings and the process of hiring for the Clerk’s position. ANNOUNCEMENTS Kodiak Island Borough March 19, 2020 Assembly Regular Meeting Minutes Pase 4 of 5 The next Assembly work session is scheduled on Thursday, March 26, 2020 at 6:30 p.m. The next regular meeting is scheduled on Thursday, April 2, 2020 at 6:30 p.m. in the Borough Assembly Chambers. These meetings will be held via teleconference. Notice of Public Meetings and Assembly meeting agendas are available on the KIB website, posted on the KIB Facebook page, and are also posted at the Library, Safeway, and Borough building. For those who do not have internet, you may call the Borough meeting notification line at 907-486-9315. EXECUTIVE SESSION 1. **The Potential Sale, Including Terms And Price, Of Real Property Known As Killarney Hills Tract Located On E. Rezanoff And Woody Way Loop. 2. **Disposal Of Borough Land On Borough Hill: Terms, Conditions and Price. 3. **Borough Clerk’s Evaluation. **These items were removed from the agenda and consent agenda. ADJOURNMENT ARNDT moved to adjourn the meeting. VOICE VOTE ON THE MOTION CARRIED UNANIMOUSLY. Turner, Arndt, Dvorak, Kavanaugh, Skinner and Symmons. The meeting adjourned at 8:17 p.m. KODIAK ATTEST: Welinsky, Borough Clerk // William Roberts, Mayor Approved on: April 2, 2020 Kodiak Island Borough March 19, 2020 Assembly Regular Meeting Minutes Page 5 of 5 LOAN AGREEMENT THIS LOAN AGREEMENT, dated the 7lh day of July 2020 (the "Loan Agreement"), between the Alaska Municipal Bond Bank (the "Bank"), a body corporate and politic constituted as an instrumentality of the State of Alaska (the "State") exercising public and essential governmental functions, created pursuant to the provisions of Chapter 85, Title 44, Alaska Statutes, as amended (the "Act"), having its principal place of business at Juneau, Alaska, and the Kodiak Island Borough, Alaska, a duly constituted second class borough of the State (the "Borough"): WITNESSETH: WHEREAS, pnrsuant to the Act, the Bank is authorized to issue bonds and make loans of money (the "Loan" or "Loans") to governmental units; and WHEREAS, the Borough is a "Governmental Unit" as defined in the General Bond Resolution of the Bank hereinafter mentioned and is authorized to accept a Loan from the Bank, evidenced by its municipal bond; and WHEREAS, the Borough desires to borrow money from the Bank in the amount not to exceed $500,000 to finance a portion of costs related to the Kodiak High School (the "High School Project") and has submitted an application to the Bank for a Loan in the amount not to exceed $500,000 (the "High School Project Loan") to pay a portion of the costs of the High School Project; and WHEREAS, the Borough has duly authorized the issuance of its fully registered General Obligation School Bond, 2020 Series A, dated July 7, 2020, in the principal amount of $345,000 (the "Municipal Bond"), which Municipal Bond is to be purchased by the Bank as evidence of and security for the Borough’s obligation to repay the High School Project Loan in accordance with this Loan Agreement; and WHEREAS, the application of the Borough contains the intbrmation requested by the Bank; and WHEREAS, to provide for the issuance of bonds of the Bank to obtain from time to time money with which to make, and/or to refinance Loans, the Board of Directors of the Bank (the "Board") has adopted its General Obligation Bond Resolution on July 13, 2005 (as amended, the "General Bond Resolution"); and WHEREAS, the Board approved certain modifications to the General Bond Resolution, effective on the date when all bonds issued under the terms of the General Bond Resolution, prior to February 19, 2013, cease to be outstanding; and WHEREAS, on April 29, 2020, the Board adopted Series Resolution No. 2020-01 (the "’Series Resolution" and together with the General Bond Resolution, the "Bond Resolution"), authorizing the Bank to, among other things, issue the Bank’s General Obligation and Refi.mding Bonds, 2020 Series One Bonds (the "2020 Bonds"’), make the High School Project Loan to the Borough and purchase the Borough’s Municipal Bond. NOW, THEREFORE, the parties agree as follows:, 1. The Bank hereby makes the High School Project Loan, and the Borough, hereby accepts the Loan in the principal amount of $345,000. As evidence of the High School Project Loan made to the Borough and such money borrowed from the Bank by the Borough, the Borough hereby agrees to sell to the Bank the Municipal Bond in the principal amount, with the principal instalhnent paylnents, and bearing interest from its date at the rate or rates per annum, stated in Exhibit A. 2. The Borough represents that it has duly adopted or will adopt all necessary ordinances or resolutions, including Ordinance No. FY2010-03, enacted on August 6, 2009 (the "Borough Ordinance") and Resolution No. FY2020-22, adopted on March 19, 2020 (the "Borough Resolution" and together with the Borough Ordinance, the "Borough Authorizations"). The Borough further represents to the Bank that the Borough has taken or will take all other proceedings required by law to enable it to enter into this Loan Agreement and to issue its Municipal Bond to the Bank and that the Municipal Bond will constitute a general obligation bond, secured by the full faith and credit of the Borough, all duly authorized by the Borough Authorizations. The Borough represents that the Borough Authorizations are in full force aud effect and have not been amended, supplemented or otherwise modified, other than as may have been previously certified by the Borough to the Bank. 3. Subject to any applicable legal limitations, the amounts to be paid by the Borough pursuant to this Loan Agreement representing interest due on its Municipal Bond (the "Municipal Bond Interest Payments") shall be computed at the same rate or rates of interest borne by the corresponding lnaturities of the bonds sold by the Bank in order to obtain the money with which to make the High School Project Loan and to purchase the Municipal Bond (the "Loan Obligations") and shall be paid by the Borough at least seven (7) Business Days before the interest Payment Date to provide funds sufficient to pay interest as the same becomes due on the Loan Obligations. 4. The amounts to be paid by the Borough pursuant to this Loan Agreement representing principal due on its Municipal Bond in amounts sufficient to pay the principal of the Loan Obligations as the same matures based upon the maturity schedule stated in Exhibit A (the "Municipal Bond Principal Payments"), shall be paid at least seven (7) Business Days before the payment date stated in the Municipal Bond. 5. In tile event the amounts referred to in Sections 3 and 4 hereof to be paid by tile Borough pursuant to this Loan Agreement are not made available at any time specified herein, the Borough agrees that any money payable to it by any department or agency of the State may be withheld fiom it and paid over directly to the Trustee acting under the General Bond Resolution, and this Loan Agreement shall be full warrant, authority and direction to make such payment upon notice to such department or agency by the Bank, with a copy provided to the Borough, as provided in tile Act. 6. In the event that all or a portion of the Loan Obligations have been refunded and the interest rates the Bank is required to pay on its refunding bonds in any year are less than the interest rates payable by the Borough on the Municipa! Bond for the corresponding year pursuant to the terms of the Borough’s Municipal Bond, then both the Municipal Bond Interest Paylnents and the Municipal Bond Principal Payments will be adjusted in such a manner that (i) the interest rate paid by the Borough on any principal instalhnent of the Municipal Bond is equal to the interest rate paid by the Bank on the corresponding principal instalhnent of the Bank’s refunding bonds and (ii) on a present value basis the SUln of the adjusted Municipal Bond Interest Payments and Municipal Bond Principal Payments is equal to or less than the sum of the Municipal Bond Interest Payments and Municipal Bond Principal Payments due over the remaining term of the Municipal Bond as previously established under this Loan Agreement. In the event of such a refunding of the Loan Obligations, the Bank shall present to the Borough for the Borough’s approval, a revised schedule of principal installment amounts and interest rates for the Municipal Bond. If approved by the Borough the revised schedule shall be attached hereto as Exhibit A and incorporated herein in replacement of the previous Exhibit A detailing said principal installment amounts and interest rates. 7. The Borough is obligated to pay to the Bank Fees and Charges. Such Fees and Charges actually collected from the Borough shall be in an amount sufficient, together ~vith the Borough’s Allocable Proportion (as defined below) of other money available therefor under the provisions of the Bond Resolution, and other money available therefor, including any specific grants made by the United States of America or any agency or instrmnentality thereof or by the State or any agency or instrumentality thereof and amounts applied therefor from alnounts transferred to the Operating Fund pursuant to Section 606 of the General Bond Resolution: (a) to pay, as the same become due, the Borough’s Allocable Proportion of the Administrative Expenses of the Bank; and (b) to pay, as the same become due, the Borough’s Allocable Proportion of the tees and expenses of the Trustee and paying agent for the Loan Obligations. The Borough’s Allocable Proportion as used herein shall mean the proportionate amount of the total requirement in respect to which the term is used determined by the ratio that the principal amount of the Municipal Bond outstanding bears to the total of all Loans then outstanding to all Governmental Units under the General Bond Resolution, as certified by the Bank. The waiver by the Bank of any tees payable pursuant to this Section 7 shall not constitute a subsequent waiver thereol: 8. The Borough is obligated to make the Municipal Bond Principal Payments scheduled by the Bank. The first such Municipal Bond Principal Payment is due at least seven (7) Business Days prior to each date indicated in Exhibit A, and thereafter on the anniversary thereof each year. The Borough is obligated to make the Municipal Bond Interest Payments scheduled by the Bank on a semi-annual basis commencing seven (7) Business Days prior to each date indicated in Exhibit A, and to pay any Fees and Charges imposed by the Bank within 30 days alter receiving the invoice of the Bank theretbr. 9. The Bank shall not sell and the Borough shall not redeem prior to maturity any portion of the Borough’s Municipal Bond in an amount greater than the related Loan Obligations which are then outstanding and which are then redeemable, and in the event of any such sale or redemption, the same shall be in an amount not less than the aggregate of(i) the principal amount of the Municipal Bond (or portion thereof) to be redeemed, (ii) the interest to accrue on the Municipal Bond (or portion thereof) to be redeemed to the next redemption date thereof not previously paid, (iii) the prelnium, if any, payable on the Municipal Bond (or portion thereof) to be redeemed, and (iv) the cost and expenses of the Bank in effecting the redemption of the Municipal Bond (or portion thereof) to be redeemed. The Borough shall give the Bank at least 50 days’ prior written notice of the Borough’s intention to redeem its Municipal Bond. In the event that the Loan Obligations with respect to which the sale or redemption prior to maturity of such Municipal Bond is being made have been refunded and the refunding bonds of the Bank issued for the purpose of refunding such Loan Obligations were issued in a principal amount in excess of or less than the principal amount of the Municipal Bond remaining unpaid at the date of issuance of such refunding bonds, the amount which the Borough shall be obligated to pay or the Bank shall receive under item (i) above shall be the principal amount of such refunding bonds outstanding. In the event that all or a portion of the Loan Obligations have been reftmded and the interest the Bank is required to pay on the refunding bonds is less than the interest the Bank was required to pay on the Loan Obligations, the amount which the Borough shall be obligated to pay or the Bank shall receive under item (ii) above shall be the amount of interest to accrue on such refunding bonds outstanding. In the event that all or a portion of the Loan Obligations have been refunded, the amount which the Borough shall be obligated to pay or the Bank shall receive under item (iii) above, when the refunded Loan Obligations or portion thereof are redeemed, shall be the premium, if any, on the Loan Obligations to be redeemed. Nothing in this Section shall be construed as preventing the Borough from refunding the Municipal Bond in exchange for a new Municipal Bond in conjunction with a refunding of all or a portion of the Loan Obligations. 10. Simultaneously with the delivery of the Municipal Bond to the Bank, the Borough shall furnish to the Bank evidence satisfactory to the Bank which shall set forth, among other things, that the Municipal Bond ~vill constitute a valid and binding general obligation of the Borough, secured by the full faith and credit of the Borough. 11. Invoices lbr payments under this Loan Agreement shall be addressed to the Borough, Attention: Borough Manager, 710 Mill Bay Road, Kodiak, Alaska 99615. The Borough shall give the Bank and the corporate trust office of the Trustee under the General Bond Resolution at least 30 days’ prior written notice of any change in such address. 12. The Borough hereby agrees to keep and retain, until the date six years after the retirement of the Municipal Bond, or any bond issued to refund the Municipal Bond, or such longer period as may be required by the Borough’s record retention policies and procedures, records with respect to the investment, expenditure and use of the proceeds derived from the sale of its Municipal Bond, including without limitation, records, schedules, bills, invoices, check registers, cancelled checks and supporting documentation evidencing use of proceeds, and investments and/or reinvestments of proceeds. The Borough agrees that all records required by the preceding sentence shall be made available to the Bank upon request. 13. Prior to payment of the amount of the Loan or any portion thereot; and the delivery of the Municipal Bond to the Bank or its designee, the Bank shall have the right to cancel all or any part of its obligations hereunder if." (a) Any representation, warranty or other statement made by the Borough to the Bank in connection with its application to the Bank tbr a Loan shall be incorrect or incomplete in any material respect. Agreement. (b) The Borough has violated commitments made by it in the terms of this Loan (c) The financial position of the Borough has, in the opinion of the Bank, suffered a materially adverse change between the date of this Loan Agreement and the scheduled time of delivery of the Municipal Bond to the Bank. 16. The obligation of the Bank under this Loan Agreement is contingent upon delivery of its 2020 Bonds and receipt of the proceeds thereof. 17. The Borough agrees that it will provide the Bank with written notice of any default in covenants under the Borough Authorizations within thirty (30) days after the date thereof. 18. The Borough agrees that it shall not take, or omit to take, any action lawful and within its power to take, which action or omission would cause interest on the Municipal Bond to become subject to federal income taxes in addition to federal income taxes to which interest on such Municipal Bond is subject on the date of original issuance thereot: The Borough shall not permit any of the proceeds of the Municipal Bond, or any facilities financed with such proceeds, to be used in any manner that would cause the Municipal Bond to constitute a "private activity bond" within the meaning of Section 141 of the Code. The Borough shall make no use or investment of the proceeds of the Municipal Bond that will cause the Municipal Bond to be an "arbitrage bond" under Section 148 of the Code. So long as the Municipal Bond is outstanding, the Borough, shall comply with all requirements of Section 148 of the Code and all regulations of the United States Department of Treasury issued thereunder, to the extent that such requirements are, at the time, applicable and in effect. The Borough shall indemnify and hold harmless the Bank from any obligation of the Borough to make rebate payments to the United States under said Section 148 arising from the Borough’s use or investment of the proceeds of the Municipal Bond. 19. Upon request of the Bank, the Borough agrees that if its bonds constitute twenty percent (20%) or more of the outstanding principal of municipal bonds held by the Bank under its General Bond Resolution, it shall execute a continuing disclosure agreement prepared by the Bank tbr purposes of Securities and Exchange Commission Rule 15c2-12, adopted under the Securities and Exchange Act of 1934. 20. The Borough agrees that if its bonds constitute twenty percent (20%) or more of the outstanding principal of municipal bonds held by the Bank under its General Bond Resolution it shall provide to the Bank for inclusion in future official statements of the Bank and the Bank’s annual reports, to the exteut required by the Bank’s continuing disclosure undertakings, financial and operating information of the Borough of the type and in the form requested by the Bank. 21. If any provision of this Loan Agreelnent shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such provision shall not affect any of the remaining provisions of this Loan Agreement and this Loan Agreement shall be construed and enforced as if such invalid or unenlbrceable provision had not been contained herein. 22. This Loan Agreement may be executed in one or more counterparts, any of which shall be regarded for all purposes as an original and all of which constitute but one and the same instrument. Each party agrees that it will execute any and all documents or other instruments, and take such other actions as are necessary, to give effect to the terms of this Loan Agreement. 23. No waiver by either party of any term or condition of this Loan Agreement shall be deemed or construed as a waiver of any other term or condition hereof, nor shall a waiver of any breach of this Loan Agreement be deemed to constitute a waiver of any subsequent breach, whether of the same or of a different section, subsection, paragraph, clause, phrase or other provision of this Loan Agreement. 24. In this Loau Agreement, unless otherwise defined herein, all capitalized terms which are defined in Article I of the General Bond Resolution shall have the same meanings, respectively, as such terms are given in Article I of the General Bond Resolution. 25. This Loan Agreement shall remain in full force and effect so long as the Municipal Bond remains outstanding. 26. This Loan Agreement merges and supersedes all prior negotiations, representations and agreements between the parties hereto relating to the subject matter hereof and constitutes the entire agreement between the parties hereto in respect thereof. [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the parties hereto have executed this Loan Agreement as of the date first set forth above. ALASKA MUNICIPALBOND/~,~K _D,~VEN J. ~VIITCHE~LL " l~xecutive Director KODIAK ISLAND BOROUGH, ALASKA By: DORA CROSS Finance Director SIGNATURE PAGE - LOAN AGREEMENT IN WITNESS WHEREOF, the parties hereto have executed this Loan Agreement as of the date first set forth above. ALASKA MUNICIPAL BOND BANK By: DEVEN J. MITCHELL Executive Director KODIAK ISLAND BOROUGH, ALASKA By: DORA CROSS Finance Director SIGNATURE PAGE - LOAN AGREEMENT EXHIBIT A $345,000 Kodiak Island Borough, Alaska General Obligation School Bond, 2020 Series A (the "Municipal Bond") Due Principal Interest Decemberl Amount Rate 2021 $25,000 5.000% 2022 30,000 5.000 2023 30,000 5.000 2024 30,000 5.000 2025 35,000 5.000 2026 35,000 5.000 2027 35,000 5.000 2028 40,000 5.000 2029 40,000 5.000 2030 45,000 5.000 Principal instalhnents shall be payable on December 1 in each of the years, and in the amounts set forth above. Interest on the Municipal Bond shall be payable on December 1, 2020, and thereafter on June 1 and December 1 of each year. Prepayment Provisions: The Municipal Bond principal instalhnents are not subject to prepaylnent prior to maturity. EXttlBIT A-- LOAN AGREEMENT 4137-~637-0,~51.3 NEW ISSUE MOODY’S RATING: A1 BOOK-ENTRY ONLY S&P GLOBAL RATING: A+ (See "RATINGS") In the opknio~ of Orrick, llerr’ington & Sutcl~]l?~ LLP, Bond Counsel, based W~on a~n ~tm~lysis qf exislir~g laws, refpdalions, ruli~tg.s" a~td cowrl decisions, a~’td ass’wining, among other matters, the acc’uracy qf certain representations and compliance wilh certain cot~enan.ts, inte~vst on the 2020 Se~qes One Bonds is exchuled.l)-om gross incomeJb~2federal income taa: purposes under Section 103 of’the bzte~n~,al Revenue Code qf1986 (the "Code"). In the further opinion of Bond Counsel, interest o~ the 2020 Se~qes O~te Bonds is not a speciJic preJOre~ce item )br pn~)oses qf theJOderal alternative minimum tax. Bond Counsel also is of the opinion based upon existing laws &" the State &’Alaska that int~’est on all of the 2020 Se~4es One Bonds is exempt from taxation by the State of Alaska except for tra~sfe~; inhcn"itance, arm estate taxes. Bond Covnsel expresses no opinion regardi.ng any othc~r tax consequences related to the ownership or disposition q~ or lhe amounl, accrual, or receipl qf inle~vst on, the 2020 Series One Bounds. See "T~v MA77~s." ALASKA MUNICIPAL BOND BANK $98,310,000 GENERAL OBLIGATION AND REFUNDING BONDS, 2020 SERIES ONE Dated: Date of Delivery Due: December 1, as shown on inside cover The Alaska Municipal Bond Break (the "Bond Break") is issuing $98,310,000 aggregate principal amount of its General Obligation and Refunding Bonds, 2020 Series One (the "2020 Series One Bonds"). The 2020 Series One Bonds initially will be issued as fully registered bonds, in book-entry tbnn only, registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), which will smwe as depository for the 2020 Series One Bonds. Individual purchases of the 2020 Series One Bouds will be made in principal mnounts of $5,000 or integral multiples thereof within a maturity. Purchasers of the 2020 Series One Bonds will not receive certificates representing their beneficial ownership interests in the 2020 Series One Bonds. Interest on the 2020 Series One Bonds will accrue from the date of delivery of the 2020 Series One Bonds, or from the most recent interest payment date to which interest has been p~d, and is payable on each June 1 and December 1, commencing December 1, 2020. The Bank of New York Mellon Trust Company, N.A., of San Francisco, California, as the Trustee and Paying Agent for the 2020 Series One Bonds, will make principal and interest payments to DTC as the registered owner of the 2020 Series One Bonds. Disbursement of such payments to DTC Participants is the responsibility of DTC. Disbursement of such payments to the Beneficial Owners is the responsibility of DTC Participants. See "DEscmm’~ON OV "mE 2020 S~mES ant,: BONDS" and Appendix H - "DTC AND ITS BOOt{-ENTRY SYS’I’EM." The 2020 Series Oue Bonds are subject to redemption prior to their stated maturity dates. See "D~:scmPT~O~ ov Till-." 2020 SEmiS ONE BONDS." The 2020 Series One Bouds will be issued nnder the General Obligation Bond Resolution, adopted by the Board of Directors of the Bond Bank on July 13, 2005 (as amended on August 19, 2009, the "2005 Geueral Bond Resolution"), as supplemented by Series Resolution No. 2020-01, adopted on April 29, 2020 (the "Bond Resolntion," and together with the 2005 General Bond Resolution, the "Resolutions"). The 2020 Series One Bonds are direct and geueral obligations of the Bond Bank, and the t\fil faith and credit of the Bond Bank are pledged to the payment of the principal of and interest on the 2020 Series One Bonds, subject to any agreemeuts made with the holders of any other uotes or bonds of the Baud Bank pledging any particular revenues or assets not pledged under the 2005 General Bond Resolution. The 2020 Series Oue Bonds are equally and ratably secured by the pledge and assignment of all Municipal Bonds acquired by the Bond Bank under the 2005 General Bond Resolution on a parity with other Bonds of the Bond Bank issued under the 2005 General Bond Resolution. The 2020 Series One Bonds are the 46th Series of Bonds issued under the 2005 Geueral Baud Resolution. The 2020 Series One Bonds are payable solely from the sources provided in the 2005 General Bond Resolution and the Bond Resolution described herein. The 2020 Series One Bonds do not constitute a debt or other liability of the State of Alaska, and the 2020 Series One Bonds do not directly, indirectly, or contingently obligate the State of Alaska to levy any form of taxation or make any appropriation for the payment of the 2020 Series One Bonds. Neither the faith and credit nor the taxing power of the State of Alaska is pledged for the payment of the 2020 Series One Bonds. The Bond Bank has no taxing power. This cover page comains certain inlbrmation for quick reference only. it is not a summary of Ibis issue. Investors must read the eutire Oflicial Statement to obtain information essential to the making of an iuforme(! inveslmenl decision. 77~e 2020 Series One 13o’nds are o.gOred when, as, a)~d ~iI issued, subject to the ol)provi~g legal apiarian qf Orrick, ller~Sngto~ & Sutcl{~b LLP, go)~d Counsel to the Bond Bank. Certai)~ legal matte~w will be passed ~pon.lbr the Governmental [h~its by their respecti~,e bo~d counsels. C~)’tain legal matters will be passed Ill)On ./br the I ~mleru,rite~:~’ by their special counsel, ~%ster Ga~’~)ey PC It is expected that the 2020 Series One Bo)~ds i’n d(qi~iti~e.[bmn will be issued a~d a~milable by ~Y~st Automated Sec~trities Tra~.2l~r.lbr deli~:e~T] thro~tgh ~he.lbcililies qf DTC in New Yo~#, New York, on or aboul July T, 2020. RBC Capital Markets BofA Securities Wells Fargo Securities ,hme 24, 2020. ALASKA MUNICIPAL BOND BANK $98,310,000 GENERAL OBLIGATION AND REFUNDING BONDS, 2020 SERIES ONE MATURITIES, AMOUNTS, INTEREST RATES, YIELDS AND PRICES (Base CUSIP No.’° 01179R) Due Principal Interest (December 1) Amount Rate Yield Price CUSIP No.* 2020 $7,490,000 5.00% 0.54% 101.779 01179R D75 2021 8,595,000 5.00 0.62 106.095 01179R D83 2022 8,975,000 5.00 0.69 110.240 01t79R D91 2023 9,225,000 5.00 0.75 114.240 01179R E25 2024 9,980,000 5.00 0.84 117.932 01179R E33 2025 8,765,000 5.00 0.99 121.033 01179R E41 2026 8,215,000 5.00 1.17 123.549 01179R E58 2027 7,790,000 5.00 1.34 125.701 01179R E66 2028 7,385,000 5.00 1.45 127.978 01179R E74 2029 7,740,000 5.00 1.56 129.966 01179R E82 2030 6,670,000 5.00 1.68 131.557 01179R E90 2031 1,425,000 5.00 1.82 130.004"* 01179R F24 2032 795,000 5.00 1.91 129.018"* 01179R F32 2033 830,000 4.00 2.20 116.649"* 01179R F40 2038 695,000 4.00 2.45 114.152"* 01179R F99 2039 720,000 4.00 2.49 113.758"* 01179R G23 $1,710,000 4.00% Term Bonds due December 1, 2035 Yield 2.33% Price 115.343"* CUSIP No.* 01179R F65 $1,305,000 4.00% Term Bonds due December 1,2037 Yield 2.41% CUSIP No.* 01179R FS1 Price 114.547"* CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services ("CGS") is managed on behalf of the American Bankers Association by S&P Global Market Intelligence. Copyright 2020, CGS. All rights reserved. The CUSIP mm~bers herein are not intended to create a database and do not serve in any way as a substitute tbr the CGS database. The CUSIP numbers herein are provided for the convenience of refference only and are subject to change. Neither the Bond Bank nor tl~e Underwriters take any responsibility for the accuracy of such CUSIP numbers. ** Priced to the par call date of December 1,2030. ALASKA MUNICIPAL BOND BANK 333 Willoughby Avenue, 1 lth Floor P.O. Box 110405 Juneau, Alaska 99811-0405 (907) 465-2388 http://treasury.dor.alaska.gov/ambba/* Luke Welles Bruce Tangeman Kendell Koelsch Julie Anderson (John Springsteen Lucinda Mahoney (Mike Barnhill Board of Directors Chair Member Member Member First Delegate) Member First Delegate) Executive Director Deven J. Mitchell Finance Director Ryan S. Williams Bond Counsel Orrick, Hemngton & Sutcliffe LLP Seattle, Washington Trustee The Bank of New York Mellon Trust Company, N.A. San Francisco, California Municipal Advisor PFM Financial Advisors LLC Seattle, Washington The Flond 1Bank’s webs~tc is not part of this Official Statement, and in\cstors should not rely on information presented in the Bond Bank’s websile in determining whethe, to purchase the 2020 Series One Bonds. This inaclive textual reference to the Bond Bank’s \vebsite is not a hyperlink and does not incorporate the Bond Bank’s website by reference. No dealer, broker, salesperson, or other person has been authorized by the Bond Bank or the Underwriters to give any information or to make any representations with respect to the 2020 Series One Bonds other than those contained in this Official Statement and, if given or made, such information or representations must not be relied upon as having been authorized by the Bond Bank or the Underwriters. This Official Statement does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of, the 2020 Series One Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation, or sale. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made by use of this Official Statement shall, under any circumstances, create any implication that there has been no change in the affairs of the Bond Bank since the date hereof. Information on website addresses set forth in this Official Statement is not incorporated into this Official Statement and cannot be relied upon to be accurate as of the date of this Official Statement, nor should any such information be relied upon in making investment decisions regarding the 2020 Series One Bonds. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The 2020 Series One Bonds have not been registered under the Securities Act of 1933, as amended, and the Resolutions have not been qualified under the Trust Indenture Act of 1939, as amended, in reliance upon exemptions contained in such acts. The 2020 Series One Bonds have not been recommended by any federal or state securities commission or regulatory authority. The foregoing authorities have not confirmed the accuracy or determined the adequacy of this Official Statement. Any representation to the contrary may be a criminal offense. Certain statements contained in this Official Statement reflect not historical facts but forecasts and "forward-looking statements." The words "estimate," "project," "anticipate," "expect," "intend," "believe," "plan," "budget," "forecast," "assume," and similar expressions are intended to identify forward-looking statements. The achievement of certain results or other expectations contained in forward-looking statements involves known and unknown risks, uncertainties and other factors that may cause actual results, perfomaance, or achievements described to be materially different fl’om any future results, performance, or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based upon underlying assumptions, many of which in tuna are based upon further assumptions. No assurance can be given that the future results or plans discussed herein will be achieved, and actual results may differ, perhaps materially, flom the plans, budgets, assumptions, forecasts, and projections described herein. Except for the historical information described in the continuing disclosure undertaking of the Bond Bank, the Bond Bank does not plan to issue any updates or revisions to any forward-looking statements contained herein. See "CONTINUING DISCLOSURE UNDERTAKINGS." For a discussion of certain risks associated with an investment in the Bonds. see ~’CERTAIN BONDOWNERS’ RISKS." TABLE OF CONTENTS ] NTI~,OI)UCTION .................................................................. 1 General .............................................................................. I Alaska Municipal Bond Bank ........................................... 2 PURPOSE OF THE 2020 SERIES ONE BONDS ....................... .3 Purpose of the 2020 Series One Bonds ............................. 3 Refunding Plan .................................................................. 3 SOURCES AND USES O1: FUNDS ........................................... 5 DESCRIPTION OF TIlE 2020 SERIES ONE BONDS ................. 5 General Description ........................................................... 5 2020 Series One Bonds ..................................................... 6 Optional Redemption ........................................................ 6 Mandatory Redemption ..................................................... 6 Notice and Effect of Redemption ...................................... 7 Selection of 2020 Series One Bonds for Redemption ................................................................... 7 SECURITY AND SOURCES OF PAYMENT FOR TItE BONDS ...................................................................... 7 General .............................................................................. 7 Pledge Effected by tile 2005 General Bond Resolution ..................................................................... 9 Municipal Bonds ............................................................... 9 2005 General Bond Resolution Rese~we Fund ................. 10 State Payments to Governmental Units ........................... 12 Pledge and Agreement of tile State ................................. 12 ALASKA MUNICIPAL BOND BANK ................................... 13 Organization .................................................................... 13 Board of Directors ........................................................... 13 Management .................................................................... 14 BONDS OUTSTANDING ..................................................... 15 2005 General Bond Resolution ....................................... 15 2010 Master Bond Resolution ......................................... 15 2016 Master Bond Resolution ......................................... 15 Coastal Energy Impact Program ...................................... 15 Direct Loans .................................................................... l 6 Loans by the State of Alaska ........................................... 16 BONDS ISSUED AND OUTSTANDING AS OE MAY l, 2020 ........................................................................ 17 DEBT CAPACITY AS OF MAY 1,2020 ............................... 17 DEBT SERVICF. REQUIREMENTS ....................................... 18 Future Financing Plans .................................................... 18 Debt Payment Record ...................................................... t 9 SUMMARY OF TIlE 2005 GENERAL BOND RESOLUTION ........................................................... 19 2005 General Bond Resolution Constitutes Contract ...................................................................... 19 Obligation of the Bond Bank ........................................... 19 Pledge .............................................................................. 19 Power to Issue Bonds and Make Pledges ........................ 20 General ........................................................................... 20 Waiver of Laws ............................................................... 20 Loan Agreement Provisions ............................................ 20 Modification of Loan Agreement Terms ........................ 21 Enforcement of Municipal Bonds ................................... 21 Funds and Accounts ........................................................ 22 Security tbr Deposits and Investment of Funds .............. 23 Payment of Bonds ........................................................... 24 Fees and Charges ............................................................ 24 Issuance of Additional Obligations ................................. 24 Defeasance ...................................................................... 25 Supplements and Amendments ....................................... 25 Events of Default and Remedies ..................................... 26 Excess Earnings .............................................................. 28 Modifications to the 2005 General Bond Resolution .................................................................. 28 CERTAIN BONDOWNERS’ RISKS ...................................... 28 General ........................................................................... 29 State and Governmental Unit Revenues ......................... 29 Adequacy of Revenues ................................................... 30 Infectious Disease Outbreak - COVID- 19 ..................... 31 Other Factors Affecting the State and Governmental Units ................................................... 33 Ratings ............................................................................ 34 Limitations on Enforceability of Obligations and Remedies .................................................................... 34 Early Redemption ........................................................... 34 Federal income Tax Considerations ............................... 34 Secondary Market and Prices .......................................... 35 LITIGATION ..................................................................... 35 TAX MATTERS ................................................................. 35 CERTAIN LEGAL MATTERS .............................................. 37 UNDERWRITING ............................................................... 38 MUNICIPAL A DV1SOP, ...................................................... 39 FINANCIAL STATEMENTS ................................................. 39 RATINGS .......................................................................... 39 CONTINUING DISCLOSURE UNDERTAKINGS .................... 40 Bond Bank Continuing Disclosure Undertaking ............. 40 Governmenlal Unit Continuing Disclosure Undertakings .............................................................. 40 Compliance with Prior Continuing Disclosure Undertakings .............................................................. 40 DEFINITIONS .................................................................... 41 M ISCEL1.ANEOUS ............................................................. 43 OFFI(’IAL STATI-;M E_NT ..................................................... 43 Appendix A: Appendix B: Appendix C: Appendix D: Appendix E: Appendix F: Appendix G: Appendix H: PROPOSED FORM OF OPINION OF BOND COUNSEL STATE PAYMENTS TO GOVERNMENTAL UNITS GOVERNMI!NTAL UNIT STATISTICS RI:.GARI)ING PARTICIPATION IN THE BOND BANK FINANCIAL NTATI:.MENTS OF THE ALASK/k MUNI(’IPAL BOND BANK FOR THE YEAR ENI)ED JUNE 30, 2019 2005 GENERAL BOND RESOLUTION AND 2013 FIP.ST SUPPLEMENTAL RESOLUTION INFORMATION CONCERNING TIlE STATE OF AL.~SKA PROPOSED I:ORM OF CONTINUING DISCLOSURE CERTIFI(ATE DTC AND ITS BOOK-I~NTRY SYSTEM [This page intentionally left blank.] OFFICIAL STATEMENT Relating to ALASKA MUNICIPAL BOND BANK $98,310,000 GENERAL OBLIGATION AND REFUNDING BONDS, 2020 SERIES ONE INTRODUCTION General This Official Statement is furnished by the Alaska Municipal Bond Bank (the "Bond Bank") in connection with the sale of $98,310,000 aggregate principal amount of its General Obligation and Refunding Bonds, 2020 Series One (the "2020 Series One Bonds"). See "PURPOSE OF THE 2020 SERIES ONE BONDS." The 2020 Series One Bonds will be issued under the General Obligation Bond Resolution, adopted by the Board of Directors of the Bond Bank (the "Board") on July 13, 2005 (as amended on August 19, 2009, the "2005 General Bond Resolution"), and as supplemented by Series Resolution No. 2020-01, adopted by the Board on April 29, 2020 (the "Bond Resolution," and together with the 2005 General Bond Resolution, the "Resolutions"). On February 19, 2013, the Board adopted a First Supplemental Resolution (the "2013 First Supplernental Resolution") that amends certain provisions of the 2005 General Bond Resolution, effective as of the first date on which all Bonds issued prior to February 19, 2013, are no longer Outstanding. Holders and Beneficial Owners of the 2020 Series One Bonds are deemed to have consented to all of the alnendrnents authorized in the 2013 First Supplemental Resolution. Copies of the 2005 General Bond Resolution and the 2013 First Supplemental Resolution are included as Appendix E. See "SUMMARY OF THE 2005 GENERAL BOND RESOLUTION - Modifications to the 2005 General Bond Resolution" and Appendix E- "2005 GENERAL BOND RESOLUTION AND 2013 FIRST SUPPLEMENTAL RESOLUTION." The Bond Bank was created pursuant to Alaska Statutes 44.85.005 - 44.85.420, as alnended (the "Act"), for the primary purpose of lending money to eligible borrowers in the State of Alaska (the "State"), including the purchase of bonds and promissory notes issued by such borrowers. Certain capitalized terms used in this Official Statement, and not otherwise defined herein, are defined in the 2005 General Bond Resolution. The Bank of New York Mellon Trust Company, N.A., of San Francisco, California, as Trustee under the 2005 General Bond Resolution (the "Trustee"), serves as the Trustee and Paying Agent for the 2020 Series One Bonds. The 2020 Series One Bonds are direct and general obligations of the Bond Bank, and the full faith and credit of the Bond Bank are pledged to the payment of the principal of and interest on the 2020 Series One Bonds, subject to any agreements lnade with the holders of any other notes or bonds of the Bond Bank pledging any particular revenues or assets not pledged under the 2005 General Bond Resolution. The 2020 Series One Bonds are equally and ratably secured by the pledge and assignment of all Municipal Bonds acquired by the Bond Bank under the 2005 General Bond Resolution on a parity with other Bonds of the Bond Bank heretofore or hereafter issued under the 2005 General Bond Resolution. The 2020 Series One Bonds are the 46th Series of Bonds issued under the 2005 General Bond Resolution. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS" and "BONDS OUTSTANDING." The 2020 Series One Bonds are payable solely h’om the sources provided in the 2005 General Bond Resolution and the Bond Resolution. The 2020 Series One Bonds do not constitute a debt or other liability of the State of Alaska, and the 2020 Series One Bonds do not directly, indirectly, or contingently obligate the State of Alaska to levy any form of taxation or make any appropriation for the payment of the 2020 Series One Bonds. Neither the faith and credit nor the taxing power of the State of Alaska is pledged for the payment of the 2020 Series One Bonds. The Bond Bank has no taxing power. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS." All references herein to agreements and documents are qualified in their entirety by reference to the definitive forms thereof, and all references to the 2020 Series One Bonds are further qualified by reference to the provisions with respect thereto contained in the Bond Resolution. All bonds issued under and pursuant to the terms of the 2005 General Bond Resolution are referred to as the "Bonds." The outbreak of the 2019 novel coronavirus ("COVID-19") is a significant event that has had and will continue to have ongoing, material effects on the State and the Governmental Units. Although the effects of COVID-19 cannot be predicted with certainty, COVID-19 and related social distancing measures implemented in response to COVID-19 have had and are expected to continue to have a material adverse effect on the global economy and financial markets; economic activity ~vithin the State, including the oil and gas, tourisrn, and healthcare industries, among others; revenues collected by the State and Governmental Units; and the value of the Alaska Permanent Fund and Earnings Reserve. Historic information in this Official Statement about the finances and operations of the State, the Bond Bank, and the Governmental Units that predates the outbreak of COV1D-19 should be considered in light of the possible or probable negative effects the COVID-19 outbreak may have on the current and future finances and operations thereof. Any budgets or projections that have been updated since the outbreak of COVID-19 should be considered in light of the possible or probable further negative impact from the COVID-19 outbreak. On April 6, 2020 the Department of Revenue’s Tax Division issued its Revenue Sources Book Spring 2020 Revenue Forecast (the "Spring 2020 Revenue Forecast"), which provides updated projections that reflect certain impacts from the COVID-19 outbreak. See Appendix F- "INFORMATION CONCERNING THE STATE OF ALASKA." The Spring 2020 Revenue Forecast and any other budget and projection information and all other forward-looking statements in this Official Statement are based on current expectations and are not intended as representations of fact or guarantees of results. Any such forward-looking statements are inherently subject to a variety of risks and uncertainties that could cause actual results or performance to differ materially from those that have been forecast, estimated, or projected. For a discussion of COVID-19 and certain other risks associated with an investment in the 2020 Series One Bonds, see "CERTAIN BONDOWNERS’ RISKS." Alaska Municipal Bond Bank The Bond Bank is a public corporation of the State and an instrumentality of the State established and organized by the Act in 1975 within the State of Alaska Department of Revenue (the "DOR"), initially to assist municipalities in the State in accessing the financial lnarkets by lending money through the purchase of municipal general obligation bonds. The Bond Bank is currently administered by staff that is shared with the DOR. A board of five directors authorizes the Bond Bank’s actions including issuing bonds and approving loans. See "ALASKA MUNICIPAL BOND BANK." The Act has been modified fiom time to time, including changes to alloxv the Bond Bank to finance loans to port authorities, joint action agencies, the Alaska Municipal League .!oint Insurance Association, the University of Alaska. and regional health organizations and for purposes inchlding revenue bond issues~ other debt obligations, and electrical generation projects including hydroelectric projects. The bonds issued by the Bond Bank for the purpose of making loans to governmental bon’owers are issued primarily pursuant to the 2005 General Bond Resolution, and in one instance pursuant to the 2010 General Bond Resolution adopted by the Board on October 19, 2010 (the "20!0 Master Bond Resolution"). The bonds issued by the Bond Bank for the purpose of making loans to regional health organizations are issued pursuant to the 2016 Master Resolution, adopted by the Board on May 5, 2016 (the "2016 Master Bond Resolution"). The Bond Bank provides capital timds for the majority of eligible borrowers through loans to such entities funded by issuing its bonds and notes in the national market to finance such loans under conditions set forth in the Act and the administrative regulations thereunder (Chapter 144 of the Alaska Administrative Code). Loan payments by Governmental Units to the Bond Bank provide the primary source of funds for payment of principal of and interest on the Bonds, including the 2020 Series One Bonds. Although payments made by the Governmental Units on their Municipal Bonds are the primary security for the payment of principal of and interest on the Bonds, including the 2020 Series One Bonds, the Bond Bank also maintains a reserve account within the reserve fund created under the Act as additional security for the payment of the Bonds and separate reserve accounts as security for bonds issued under the 2010 Master Bond Resolution and the 2016 Master Bond Resolution. The Bond Bank is required under the Act to report the sufficiency of the reserve fund and to seek appropriations from the Legislature to replenish the reserve fund if needed. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS- 2005 General Bond Resolution Reserve Fund." For information regarding the State of Alaska and its appropriation process, see Appendix F - "INFORMATION CONCERNING THE STATE OF ALASKA." PURPOSE OF THE 2020 SERIES ONE BONDS Purpose of the 2020 Series One Bonds The 2020 Series One Bond proceeds are being used for the following purposes: (1) to make new loans to Governmental Units; (2) to refund outstanding bonds previously issued by the Bond Bank; and (3) to pay a portion of the costs of issuance of the 2020 Series One Bonds. The new loans to the Governmental Units are expected .to be used to finance: (1)for the Fairbanks North Star Borough, the refunding of certain outstanding general obligation school bonds; (2) for the City of Ketchikan, costs of certain capital improvements related to an undersea fiber optic telecommunications cable; (3) for the City of King Cove, costs of electric utility improvements; and (4) for the Kodiak Island Borough, certain costs of capital improvements related to schools. The outstanding bonds previously issued by the Bond Bank to be refunded were used to make loans to the City and Borough of Juneau, the City of Kenai, the Kenai Peninsula Borough, the City of Ketchikan, the Ketchikan Gateway Borough, the City of King Cove, the Northwest Arctic Borough, the City of Petersburg (predecessor in interest to the Petersburg Borough), the City and Borough of Sitka, the City of Soldotna, and the City of Unalaska. Refunding Plan A portion of the proceeds of the 2020 Series One Bonds is to be used to refund certain outstanding bonds of the Bond Bank described below (the "Refunded Bonds"). The refunding of the Retimded Bonds is being undertaken to achieve net present value debt service savings for the Bond Bank and the Governmental Units. Refunded Bonds The outstanding bonds of the Bond Bank to be refunded with a portion of the proceeds of the 2020 Series One Bonds are set forth below. Redemption Maturity Principal Interest or Maturity Redemption Series Date Amount Rate Date Price 20t0A One 9/01/2020 $ 130,000 4.000% 7/29/2020 100% 2010A One 3/01/2021 410,000 5.000 7/29/2020 l O0 2010A One 9/01/2021 140,000 5.000 7/29/2020 100 2010B One {~} 9/01/2025 2,965,000 5.993 7/29/2020 1 O0 2010B One {~ 9/01/2030 4,260,000 6.341 7/29/2020 1 O0 2010B Two ~-) {3} 8/01/2020 1,435,000 4.757 8/01/2020 100 2010B Two 8/01/2021 1,550,000 4.907 8/01/2020 100 2010B Two ~11 8/01/2025 4,760,000 5.557 8/01/2020 100 2010B Two (~ 8/01/2029 135,000 6.038 8/01/2020 100 2010B Three ~(4) 10/01/2025 1,940,000 4.925 10/01/2020 100 2010B Three 1~1~4~ 10/01/2030 1,890,000 5.432 10/01/2020 100 2010A Four (3} 8/01/2020 2,375,000 4.000 8/01/2020 1 O0 2010A Four ~s} 8/01/2021 1,150,000 4.000 8/01/2020 1 O0 2010A Four ~5~ 8/01/2021 500,000 5.000 8/0 t/2020 100 2010A Four 8/01/2022 2,565,000 4.000 8/01/2020 100 2010A Four 8/01/2023 2,090,000 4.000 8/01/2020 100 2010B Four 13) 8/01/2020 1,525,000 4.609 8/01/2020 100 2010B Four 8/01/2021 2,380,000 4.859 8/01/2020 100 2010B Four 8/01/2022 1,600,000 5.109 8/01/2020 100 2010B Four 8/01/2023 2,220,000 5.359 8/01/2020 100 2010B Four 8/01/2024 4,470,000 5.609 8/01/2020 1 O0 2010B Four 8/01/2025 4,615,000 5.759 8/01/2020 1 O0 2010B Four I~) 8/01/2030 23,975,000 6.256 8/01/2020 100 2010A Two ~13 (6~ 7/01/2025 930,000 5.781 7/29/2020 100 2010A Two {~)((’/ 7/01/2035 2,435,000 6.863 7/29/2020 1 O0 Total $72,445,000 (1) Term Bonds. (2) Partial redemption; $725,000 of the 2010B Series Two Bonds maturing in 2020 wilt relnain outstanding. (3) To be defeased to maturity. (4) Partial redemption; $1,560,000 of the 2010B Series Three Bonds maturing in 2025 and $1,510,000 of the 2010B Series Three Bonds maturing in 2030 will remain outstanding. (5) Bifurcated coupon. (6) Issued under the 2010 Master Bond Resolution. Certain proceeds of the 2020 Series One Bonds, together ~vith other legally available funds, are to be deposited in one or more redemption accounts (the "Redemption Account") to be held by The Bank of New York Mellon Trust Company, N.A., San Francisco, California, as escrow agent, pursuant to one or more escrow deposit agreements. Certain proceeds deposited in the Redemption Account are to be invested in noncallable direct obligations o1; or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (the "Escrow Obligations"). The maturing principal of and interest on tile Escrow Obligations and the other money in the Redemption Account are to be used to pay the interest, if any, due on the Rel\~nded Bonds and, on the redemption date, tile principal of and accrued interes! on the Refunded Bonds. The mathematical accuracy of (1)the computations of the adequacy of the maturing principal amounts of and interest on the Escrow Obligations and the other money in the Redemption Account to pay principal of and interest on the Refunded Bonds as described above, and (2)the computations supporting the conclusion that the 2020 Series One Bonds are not "arbitrage bonds" under Section 148 of the Code is to be verified by Causey Demgen & Moore P.C., independent certified public accountants. SOURCES AND USES OF FUNDS The table below sets forth the sources and uses of funds related to tile 2020 Series One Bonds, rounded to the nearest dollar. Sollrces: Principal Amount Original Issue Premium Prior Governmental Unit Reserves Other Sources Total Sources $ 98,310,000 18,396,057 2,207,483 91,539 $ 119,005,079 Uses: Deposit to Redemption Account $ Deposit to Interest Account Loan to the Fairbanks North Star Borough Loan to the City of Ketchikan Loan to the City of King Cove Loans to the Kodiak Island Borough Costs of Issuance ~2~ Total Uses $ 74,344,935 65,000 29,265,478 11,306,005 462,591 2,646,473 914,597 119,005,079 (1) Represents Bond Bank contribution to payment of costs of issuance. (2) Includes Bond Bank and Governmental Unit costs of issuance such as Underwriters’ discount, legal tees, municipal advisory fees, rating agency fees, Trustee fees, accounting, printing, and other costs of issuing 2020 Series One Bonds and rounding. DESCRIPTION OF THE 2020 SERIES ONE BONDS General Description The 2020 Series One Bonds are issuable only as fully registered bonds, registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), as securities depositmT for the 2020 Series One Bonds. Principa! of and interest on the 2020 Series One Bonds are payable by the Trustee to DTC which, in turn, is obligated to disburse such principal and interest payments to its participants (the "’DTC Participants") in accordance with DTC procedures. See Appendix H - "DTC AND ITS BOOK-ENTRY SYSTEM." 2020 Series One Bonds The 2020 Series One Bonds mature, subject to prior redemption, on the dates and bear interest at the rates set forth on the inside cover of this Official Statement. The 2020 Series One Bonds are issuable in denominations of $5,000 or any integral multiple thereof within a maturity. Interest on the 2020 Series One Bonds will accrue fiom the date of delivery of the 2020 Series One Bonds, or flom the most recent interest payment date to which interest has been paid, and is payable on each June 1 and December 1, commencing December 1,2020. Optional Redemption The 2020 Series One Bonds maturing on or after December 1, 2031, are subject to redemption in whole or in part at the option of the Bond Bank on any date on or after December 1, 2030, at a price of 100 percent of the principal amount thereof to be redeemed plus accrued interest to the date fixed for redemption. The Loans to the Governmental Units have corresponding optional prepayment provisions. Mandatory Redemption The 2020 Series One Bonds maturing on December 1, 2035, are subject to mandatory sinking fund redemption on December 1 of the years and in the principal amounts set forth in the following table. Such redemption will be at a price equal to 100 percent of the principal amount to be redeemed plus accrued and unpaid interest thereon to the date fixed for redemption, but without premium. 2020 Series One Bonds Due 2035 Year Principal Amount 2034 $855,000 2035* 855,000 * Maturity. The 2020 Series One Bonds maturing on December 1, 2037, are subject to mandatory sinking fund redemption on December 1 of the years and in the principal amounts set forth in the following table. Snch redemption will be at a price equal to 100 percent of the principal amount to be redeemed plus accrued and unpaid interest thereon to the date fixed for redemption, but without premium. 2020 Series One Bonds Due 2037 Year Principal Amount * Maturity. 2036 $640,000 2037* 665,000 The Bond Resolution provides that if the Bond Bank redeems a portion of the 2020 Series One Term Bonds pursuant to the optional redemption provisions described above or purchases for cancellation or dcfeases 2020 Series One Term Bonds, the 2020 Series One Term Bonds so redeemed, purchased, or defeased may be credited against one or more of the scheduled mandatory sinking l\md redemption amounts of the same maturity in the order directed by the Bond Bank (or if no direction is givcr~, then in a random manner as determined by the Trustee). Notice and Effect of Redemption The Bond Resolution provides that at least 20 days, but not more than 60 days, prior to the date upon which any 2020 Series One Bonds are to be redeemed, the Trustee will mail a notice of redemption to the registered owner (DTC so long as all of the 2020 Series One Bonds are held under the DTC book- entry system) of any 2020 Series One Bond all or a portion of which is to be redeemed, at the owner’s last address appearing on the registration books of the Bond Bank kept by the Trustee. So long as all of the 2020 Series One Bonds are held under the DTC book-entry system, such notice will be sent only to DTC, and any notice to the Beneficial Owners of the 2020 Series One Bonds will be the responsibility of DTC Participants. Neither the Bond Bank nor the Trustee will provide redemption notices to the Beneficial Owners. The Bond Resolution provides that notice of redemption is required to state that on the date fixed for redemption the redemption price will become due and payable on each 2020 Series One Bond called for redemption, unless, in the case of optional redemption, money sufficient to redeem the 2020 Series One Bonds is not on deposit with the Trustee, and that if sufficient money is on deposit with the Trustee interest thereon will cease to accrue from and after such date. In the case of optional redemptions, the Bond Resolution requires that the notice state that it is a conditional notice and that on the date fixed for redemption, provided that money sufficient to redeem the 2020 Series One Bonds specified in the notice is on deposit with the Trustee, the redemption price will become due and payable and interest thereon will cease to accrue. The 2005 General Bond Resolution provides that if at the time of mailing any notice of optional redemption, money sufficient to redeem the 2020 Series One Bonds to be redeemed is not on deposit with the Trustee, the notice is required to state that the redemption is subject to the deposit of the redemption money with the Trustee and that the notice will be of no effect unless such money is so deposited. Selection of 2020 Series One Bonds lbr Redemption If fewer than all of the 2020 Series One Bonds are to be redeemed prior to maturity at the option of the Bond Bank, the Bond Bank may select the maturity or maturities to be redeemed. If, at the time notice of redemption is given the 2020 Series One Bonds to be redeemed are in book-entry only form, then DTC will select the 2020 Series One Bonds for redemption within a maturity in accordance with operational procedures of DTC referred to in the Letter of Representations. The 2005 General Bond Resolution provides that if less than all of the Bonds of any maturity are called for redemption and the Bonds are not in book-entry form, the Bonds to be redeemed are to be selected by lot by the Trustee or in any manner as the Trustee, in its sole discretion, may deem appropriate and fair. See Appendix tl - "DTC AND lTS BOOK-ENTRY SYSTEM." SECURITY AND SOURCES OF PAYMENT FOR THE BONDS General The Bonds, inclnding the 2020 Series One Bonds, are direct and general obligations of the Bond Bank, and the lhll faith and credit of the Bond Bank are pledged to the payment of the principal of and interest on the Bonds, subject to any agreements made with the holders of any, other notes or bonds of the Bond Bank pledging any particular revenues or assets not pledged under the 2005 General Bond Resolution. In addition to Bonds outstanding under the 2005 General Bond Resolution. the Bond Bank has issued and currently has bonds outstanding under the 2010 Master Bond Resolution and the 2016 Master Bond Resolution. and the revenues and assets pledged under those resolutions are not pledged to or available for payment of Bonds issued under the 2005 General Bond Resolution, including the 2020 Series One Bonds. See "BONDS OUTSTANDING." The 2020 Series One Bonds are equally and ratably secured by the pledge and assignment of" all Municipal Bonds acquired by the Bond Bank under the 2005 General Bond Resolution on a parity with other Bonds of the Bond Bank issued under the 2005 General Bond Resolution. The 2020 Series One Bonds are the 46th Series of Bonds issued under the 2005 General Bond Resolution. The 2020 Series One Bonds are payable solely from the sources provided in the 2005 General Bond Resolution and the Bond Resolution. The 2020 Series One Bonds do not constitute an indebtedness or other liability of the State of Alaska, and the 2020 Series One Bonds do not directly, indirectly, or contingently obligate the State of Alaska to levy any form of taxation or make any appropriation lbr the payment of the 2020 Series One Bonds. As provided in thc Act, the Bond Bank is obligated to pay the principal of and interest on the Bonds only from revenues or funds of the Bond Bank, and the State of Alaska is not obligated to pay the principal of or the interest on the Bonds, including the 2020 Series One Bonds. Neither the faith and credit nor the taxing power of the State of Alaska is pledged lbr the payment of the 2020 Series One Bonds. The Bond Bank has no taxing power. As additional security for payment of principal of and interest on the 2020 Series One Bonds and the other Bonds issued under the 2005 General Bond Resolution, the Bond Bank has established a common Reserve Fund. See "2005 General Bond Resolution Reserve Fund." The Reserve Fund is a separate reserve account within the reserve fund created by the Act and does not secure the payment of bonds issued under the 2010 Master Bond Resolution, the 2016 Master Bond Resolution, or any other resolution. The Reserve Fund is separate fl’om, and the Bonds are not secured by, the reserve accounts established pursuant to the 2010 Master Bond Resolution and the 2016 Master Bond Resolution. The Act provides that to assure the maintenance of the Reserve Fund Requirement, the Legislature may appropriate annually to the Bond Bank for deposit in the Reserve Fund the amount, if any, necessary to restore the Reserve Fund to an amount equal to the Reserve Fund Requirement. The Chair of the Board is required annually (before each January 30) to make and deliver to the Governor and to the Legislature a certificate stating the amount, if any, required to restore the Reserve Fund to the amount of the Reserve Fund Requirement. Money received by the Bond Bank fl’om the State pursuant to such certification is required, to the extent such certification was occasioned by the fact that the amount in the Reserve Fund was less than the Reserve Fund Requirement, to be deposited in the Reserve Fund. The Legislature is legally authorized, but not legally obligated, to appropriate such sums during the then- current State fiscal year. The State’s fiscal year begins Jtlly 1 and ends June 30. This provision of the Act does not create a debt obligation on behalf of the State or a legally enforceable obligation of the State. Beginning in 2009, the Bond Bank has been obligated by the 2005 General Bond Resolution to seek annually an appropriation within the State’s annual operating budget to replenish the Reserve Fund, if necessary. The 2010 Master Bond Resolution and the 2016 Master Bond Resolution also require the Bond Bank to seek an annual appropriation to satisfy any unanticipated deficiency in the Bond Bank’s reserve accounts established under those resolutions. An appropriation for replenishment of the Bond Bank’s reserve accounts, including the Reserve Fund, has been included in each State operating budget since the fiscal year 2010 budget, including tbr the current fiscal year 2020 and the upcoming fiscal year 2021. No such replenishment fi’om State appropriation has been necessary. If the Bond Bank is required to draw on the Reserve Fund because of a default by a Governmental Unit, the appropriation provides thai an amount equal to the amount drawn fi’om the Reserve Fund is appropriated fl’om the State’s General Fund to the Reserve Fund. There is no guarantee that the Bond Bank will be able to secure future appropriations within the State’s operating budget for replenishment of the Bond Bank’s reserve accounts, including the Reserve Fund. See "2005 General Bond Resolution Reserve Fund" and Appendix F- "INFORMATION CONCERNING THE STATE OF ALASKA - Government Budgets and Appropriations." Starting in fiscal year 2010 and continuing through fiscal year 2021, the Bond Bank also has obtained annual appropriations of earnings on reserve accounts held by the Bond Bank in excess of the Bond Bank’s operating expenses for the fiscal year; the Act otherwise would require such earnings to be appropriated to the General Fund. See "2005 General Bond Resolution Reserve Fund- Custodian Account." Pledge Effected by the 2005 General Bond Resolution Pursuant to the 2005 General Bond Resolution, all Municipal Bonds, all Municipal Bonds Payments, the investments thereof, and the proceeds of such investments, it" any, and all funds and accounts established by the 2005 General Bond Resolution to be held by the Trustee are pledged and assigned to secure the payment of the principal of, redemption premimn, if any, and interest on all Bonds, subject only to the provisions of the 2005 General Bond Resolution permitting the application thereof for the purposes and on the terms and conditions specified in the 2005 General Bond Resolution. The Act and the 2005 General Bond Resolution provide among other things that (i) any pledge made in respect of the Bonds will be valid and binding from the time the pledge is made, (ii)the Municipal Bonds, the Municipal Bonds Payments, and all other money and securities so pledged and thereafter received by the Bond Bank immediately will be subject to the lien of such pledge without any further act, and (iii) the lien of any such pledge will be valid and binding against all parties having any claims of any kind in tort, contract, or otherwise against the Bond Bank irrespective of whether the parties have notice. Municipal Bonds Under the provisions of the Act and the 2005 General Bond Resolution, the Bond Bank is authorized to purchase Municipal Bonds from any Governmental Unit. The 2005 General Bond Resolution defines Municipal Bonds as "general obligation bonds, revenue bonds, notes, or other evidences of debt issued by any Governmental Unit as now or hereafter defined in the Act which have heretofore been or will hereafter be acquired by the Bond Bank as evidence of a Loan to the Governmenlal Unit pursuant to the Act." For each issue of Municipal Bonds that the Bond Bank purchases, the 2005 General Bond Resolution requires the Bond Bank to obtain fi’om bond counsel to the Governmental Unit an opinion stating that (i)such Municipal Bouds are valid obligations of the Governmental Unit as required by the Act and (ii)a Loan Agreement has been duly authorized and executed between the Bond Bank and the Governmental Unit that constitutes a valid and binding obligation of the Governmental Unit. Each Loan Agreement obligates a Governmental Unit to (i)make interest payments on its Municipal Bond sufficient in amount and at such times to provide the Bond Bank funds to meet interest payments on its Loan Obligations as they become due; and (ii) make principal payments on its Municipal Bond sufficient in amount and at such times to provide the Bond Bank l\mds to meet principal payments on its Loan Obligations as they become due. Pursuant to the Loan Agreement, the Governmental Unit may be required to pay lees and charges to the Bond Bank to meel lhe Govemmenta! Unit’s allocable portion of certain expenses. Pursuant to each Loan Agreement relating to a revenue bond issued by a Governmental Unit, the Governmental Unit may be required to maintain with the Trustee a separate debt service reserve account to secure payment by the Governmental Unit of its Loan Obligations. Each Loan Agreement also contains restrictions on the sate or redemption of the Governmental Unit’s Municipal Bonds. 2005 General Bond Resolution Reserve Fund To secure the payment of all Bonds issued under the 2005 General Bond Resolution, the 2005 General Bond Resolution established the Reserve Fund to be held by the Trustee and maintained at an amount at least equal to the Reserve Fund Requirement, equal to approximately $59.3 million following the issuance of the 2020 Series One Bonds. The Reserve Fund Requirement is equal to the least of the following: (i)10 percent of the initial principal amount of each Series of Bonds then Outstanding; (ii) Maximum Annual Debt Service with respect to all Bonds Outstanding; (iii) 125 percent of Average Annual Debt Service on all Bonds Outstanding; or (iv) such lower amount as may be required by law. See "DEFINITIONS- Required Debt Service Reserve." The Reserve Fund Requirement may be satisfied entirely, or in part, by a letter of credit, line of credit, credit facility, surety bond, bond insurance, or any other instrument or arrangement obtained in connection with the issuance of a Series of Bonds. See "Debt Service Reserve Fund Surety Bond." As of March 31, 2020, the valuation of assets in the Reserve Fund was approximately $61.7 million, an amount sufficient to satisfy the Reserve Fund Requirement. As of that date, approximately $43.7 million, representing 71 percent of the assets in the Reserve Fund, was funded from cash deposits by the Bond Bank, of which approximately $1.4 million ~vas funded from Bonds issued by the Bond Bank to make deposits in the Reserve Fund ("Reserve Fund Obligations"); and approximately $ l 8.0 million, representing 29 percent, was funded with a surety policy (the "Debt Service Reserve Fund Surety Bond") from National Public Finance Guarantee Corporation ("National"). The Reserve Fund currently is funded at a level sufficient to meet the Reserve Fund Requirement with the issuance of the 2020 Series One Bonds. See "--Debt Service Reserve Fund Surety Bond." The 2005 General Bond Resolution requires the Bond Bank to submit annually to the State a budget request for an appropriation to replenish the Reserve Fund to the Reserve Fund Requirement in the event that there is a deficiency as a result of a default by a Governmental Unit. Since fiscal year 2010 and continuing through fiscal year 2021, the State has included in its operating budget an appropriation to replenish the Reserve Fund, if necessary. Although the Bond Bank is obligated under the 2005 General Bond Resolution to seek and has obtained an appropriation within the State’s annual operating budget in every year since fiscal year 2010, the State is not obligated, legally or otherwise, to include the appropriation in its annual operating budget. The Bond Bank’s annual obligation to submit to the State a budget request for an appropriation is in addition to the Bond Bank’s obligation to seek an appropriation to restore the Reserve Fund to the amount of the Required Debt Service Reserve as described below. See "Moral Obligation." The 2005 General Bond Resolution provides that on or before December 31 of each year, and subject to the requirements of the 2005 General Bond Resolution, the Trustee will transfer fi’om the Reserve Fund any amounts remaining in the Reserve Fund derived fiom income or interest earned and profits realized by the Reserve Fund due to investments thereof to the Operating Fund, but only to the extent that there remains after such transfer an amount in the Reserve Fund equal to the Required Debt Service Reserve. See "SUMMARY OF THE 2005 GENERAL BOND RESOLUTION- Funds and Accounts- Reserve Fund" and Section 911 of the 2005 General Bond Resolution in Appendix E. Debt Service Reserve Fund Sllrel.F Bond. The amount credited to the Reserve Fund includes the Debt Service Reserve Fund Surety Bond, in the lhce amount of approximately 518.0 million. The Debt Service Reserve Fund Surety Bond provides that upon notice from the Trustee to National to the effect 10 that insufficient amounts are on deposit in the Debt Service Fund to pay the principal of (at maturity or pursuant to mandatory redemption requirements) and interest on the Bonds, National will be required to deposit with the Trustee an amount sufficient to pay the principal of and interest on the Bonds or the available amount of the Debt Service Reserve Fund Surety Bond, whichever is less. Upon the later of: (i) three days after receipt by National of a demand for payment, duly executed by the Paying Agent; or (it) the payment date of the Bonds as specified in the demand for payment presented by the Trustee to National, National will be required to make a deposit of funds in an account with U.S. Bank Trust National Association, in New York, New York, or its successor, sufficient for the payment to the Trustee of amounts then due to the Trustee (as specified in the demand for payment), subject to the coverage limits of the Debt Service Reserve Fund Surety Bond. The available amount of the Debt Service Reserve Fund Surety Bond is the face amount of the Debt Service Reserve Fund Surety Bond then in effect less the amount of any previous deposits by National with the Trustee that have not been reimbursed by the Bond Bank. The Bond Bank and National have entered into a Financial Guaranty Agreement in connection with the Debt Service Reserve Fund Surety Bond. Pursuant to the Financial Guaranty Agreement, the Bond Bank is required to reimburse National, with interest, within one year after any deposit, the amount of such deposit made by National with the Trustee under the Debt Service Reserve Fund Surety Bond. The Bond Bank is also required to obtain National’s consent to any amendment or modification of the 2005 General Bond Resolution that would also require consent of holders of the Bonds. The Financial Guaranty Agreement also provides that no optional redemption of Bonds may be made until the Debt Service Reserve Fund Surety Bond is reinstated. Moral Obligation. The Bond Bank is required by the Act to deliver a statement to the Governor and the Legislature annually, before January 30, stating the amount, if any, necessary to restore the Reserve Fund to the Required Debt Service Reserve resulting from a draw on the Reserve Fund at any time during the prior year. The Legislature may, but is under no legal obligation to, appropriate money sufficient to restore the Reserve Fund to the Required Debt Service Reserve. Since its creation, the Bond Bank has annually reported a reserve sufficiency in all of the reserve accounts held by the Bond Bank. Custodian Account. Money not held in the Reserve Fund, loaned to authorized borrowers, or held in reserve accounts for bonds issued under other bond resolutions is maintained by the Bond Bank in an account within the Operating Fund referred to as the Custodian Account (the "Custodian Account"). The Custodian Account contains direct and indirect State appropriations, prior year retained earnings, and current year investrnent earnings and as with the Operating Fund is not held by the Trustee or pledged to the payment of the Bonds. As of May 1, 2020, the market value of the Custodian Account was $9.5 million. The Act requires that earnings on funds direclly appropriated by the State to the Bond Bank, net of the Bond Bank’s operating expenses, be transferred to the State in the following fiscal year. Starting in fiscal year 2009, however, and continuing through fiscal year 2021, all such fiscal year earnings due to the General Fund by statute have been appropriated to the Bond Bank for deposit in the Custodian Account. The Legislature may, but is under no legal obligation to, appropriale statutory earnings back to the Bond Bank. The entire Custodian Account balance is available for appropriation by the Legislature, with a majority vote and the Governor’s concurrence or with a three-quarter ma.jority vote to overcome a Governor’s veto of the appropriation, during any legislative session. The Legislature has r~ot appropriated funds out of the Custodian Account for non-Bond Bank related purposes in the current, or any prior, fiscal year. The Bond Bank uses the Custodian Account to pay operating expenses, to make direct loans to eligible borrowers, and to make deposits to the Reserve Fund. 11 State Payments to Governmental Units The Act provides that, to the extent that any department or agency of the State is the custodian of money payable to a Governmental Unit, at any time after notice from the Bond Bank that the Governmental Unit is in default on the payment of the principal of or interest on its Municipal Bonds then held or owned by the Bond Bank, the department or agency is required to withhold the payment of such money held by it and pay over such lnoney to the Bond Bank for the purpose of paying principal of and interest on the bonds of the Bond Bank. State payments to Governmental Units include, but are not limited to, payments through the School Debt Reimbursement Program (the "SDRP") and Education Support Funding through the Department of Education and Early Development; and community jail funding through the Department of Con-ections. A table in Appendix B sets forth the amount of State payments to Governmental Units that have borrowed from the Bond Bank as well as the fiscal year 2019 Loan Obligations and estimated coverage provided by those State payments. Capital expenditures by the State that are the source of matching grant funding to municipalities have been reduced significantly since fiscal year 2015. Payments through the SDRP were reduced by 25 percent in fiscal year 2017 and were reduced by 50 percent in fiscal year 2020, and by 100 percent in fiscal year 2021. The Governor indicated that funding from the federal Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") would be made available to municipalities to pay for COVID-19 impacts and mute the impact of this reduction. The Governor proposed distribution of, and the Legislature approved, $562.5 million of CARES Act funding to municipalities in the State. The State’s enacted budget for fiscal year 2021 diminished spending from fiscal year 2020 from $10.623 billion to $10.027 billion, a reduction of approximately $596 million, of which approximately $389 million is reduced State fund spending. The enacted budget reduced State payments to Governmental Units subject to the Bond Bank’s intercept authority under the Act by reducing payments for the SDRP and for the State’s Transportation and Infrastructure Debt Service Reimbursement Program (the "TIDSRP") by 100 percent from authorized amounts, among other reductions. See Appendix F- "INFORMATION CONCERNING THE STATE OF ALASKA." Diminished State funding may continue to result in a diminishment of the balances in the matching grant column of the table in Appendix B. There is no guarantee that State payments to Governmental Units will continue, and all of the payments could be reduced flom current levels. The payment and amount of such State payments is uncertain, and legislative authorization for such payments is subject to appropriation and to amendment or repeal. Other State agencies may have similar rights to intercept State payments to local governments or to limit the amount intercepted, and no assurance can be given that the Bond Bank’s claim would have priority or that the amount of available State payments would be sufficient. See Appendix F- "INFORMATION CONCERNING THE STATE OF ALASKA- Government Budgets and Appropriations" and "-Government Funds" and Appendix B- "STATE PAYMENTS TO GOVERNMENTAL UNITS." The Bond Bank has never ilnplemented the State payment intercept remedy. Pledge and Agreement of the State In the Act, the State has pledged and agreed with the holders of the Bonds that it will not limit 01- restrict the rights vested in the Bond Bank by the Act to, among other things, purchase, hold, and dispose of Municipal Bonds and fulfill the terlns of an agreement (including the 2005 General Bond Resolution) made by the Bond Bank with such holders, ol-in any way impair the rights or remedies of such holders until the Bonds, including interest on the Bonds and interest on unpaid installments of interest and all costs and expenses in connection with an action or proceeding by o1" on behalf of such holders, are fully met, paid and discharged. ]2 ALASKA MUNICIPAL BOND BANK Organization The powers of the Bond Bank are vested in the Board. The membership of the Board consists of five Directors: the Commissioners of the DOR and the Department of Commerce, Comlnunity and Economic Development ("DCCED") of the State and three Directors appointed by the Governor. The three appointees serve four-year staggered terms and must be qualified voting residents of the State. The Commissioners of the DOR and the DCCED may appoint delegates to serve in their absence. The Act requires the Board in the first meeting of each fiscal year to elect one of the Directors as chair and one of the Directors as vice chair and also to elect a secretary and a treasurer, who need not be Directors. Action may be taken and motions and resolutions adopted by the Board at any meeting by the affirmative vote of at least three Directors. The Directors appoint an Executive Director and a Finance Director to manage the business of the Bond Bank. Board of Directors The members of the Board are listed below. Luke Welles - Chair. Term expires July 15, 2023. Mr. Welles was originally appointed to tile Board on May 21, 2008. Mr. Welles became Vice President of Finance of the Arctic Slope Native Association, Ltd. in 2011. Prior to his current job, he served as Chief Financial Officer of LifeMed Alaska, LLC, which provides medivac services in Alaska. Previously, Mr. Welles was the Chief Financial Officer for Yukon-Kuskokwim Health Corporation. He has management experience in healthcare, civil construction, and commercial real estate. Over the past 15 years he has served on several economic development commissions in the State, as a city council member in Homer, Alaska, and on multiple boards. Mr. Welles received a Bachelor of Arts Degree in Foreign Service and International Business from Baylor University. Bruce Tangeman - Member: Term expires July 15, 2022. Mr. Tangeman was appointed to the Board on May 28, 2020. Mr. Tangeman most recently served as the Commissioner of the Department of Revenue under Governor Michael Dunleavy. Prior to that, he served as Policy Director for the Senate Majority during the 2017/2018 sessions. Mr. Tangeman also served as Vice President and Chief Financial Officer for the Alaska Gasline Development Corporation, as Deputy Commissioner fbr tile Department of Revenue, as Chief Financial Officer for Doyon Utilities, and as Corporate Budget Officer for the Alaska Railroad. He has served on many boards and commissions throughout his career, including the Alaska Permanent Fund Board, the Alaska Housiug Finance Corporation Board, and the Alaska Retirement Management Board. Mr. Tangeman received a Bachelor of Science Degree in Public Finance and Double Minors in Economics and Management fiom Indiana University. Kemlell Koeisch - Member. Term expires July 15, 2021. Mr. Koelsch was appointed to the Board on May 28, 2020. He is currently a member of Juneau’s Economic Stabilization Task Force. He served as Mayor of the City and Borough of Juneau fiom 2016 to 2018. Prior to that, he was Deputy Mayor from 2001 to 2003 and a Borough Assembly member fiom 1997 to 2001. His work experience also includes United States Customs Inspector and Port Director fi’om 1980 to 2003 and Port Director and founding member of Customs and Border Protection, United States Depal-tment of Homeland Security fl’om 2003 to 2014. Mr. Koelsch also taught English, history, and government at ,hmeau-Douglas high school fi’om 1968 to 1996. He has a Bachelor of Arts Degree from Michigan State University, a Master of Arts in Teaching florn the University of Alaska Fairbanks, and a Masters in Administration fi’om the University of Alaska Southeast Juneau. 13 John Sprhtgsteen - Member: Mr. Springsteen is the first delegate for Julie Anderson, Commissioner of the DCCED. Mr. Springsteen is the Deputy Connnissioner of the DCCED, and began his working career as an environmental engineer. He has served as an economic advisor to multi-national corporations, as a managcment consultant to industrial and high-tech companies, and as Chief Financial Officer of a U.S. publicly traded natural gas exploration company. More recently, he was CO0 at the Alaska Industrial Development and Export Authority (AIDEA), where he worked in project finance and industrial infi’astructure investment. Deputy Commissioner Springsteen received his undergraduate degree in Civil Engineering fi-om the Massachusetts Institute of Technology and holds a Master of Business Administration (MBA) fi’om the Kellogg Graduate School of Management, Northwestern University. Mike Barnhili - Member: Mr. Barnhil! is the first delegate tbr the Commissioner of the DOR. Mr. Barnhill was named Acting Commissioner of the DOR in December 2019 and was named the Deputy Commissioner of the DOR in February 2020. He most recently served as the Director of Policy in the Office of Management and Budget. He previously served in the DOR as an Investment Officer and Deputy Commissioner, in the Department of Administration as Deputy Commissioner, and in the Department of Law as an Assistant Attorney General. Mr. Barnhill is a graduate of Cornell Law School, where he was editor of the Cornell International Law Journal, and he earned his undergraduate degree in religious studies from the College of Wooster. Management The Bond Bank is a public corporation of the State of Alaska established and organized within the DOR in 1975. Following creation, the Bond Bank was independently staffed by a full time Executive Director, full-time Secretary, and additional short-term staff and maintained separate offices in Anchorage, Alaska. The Legislature determined in 1997 that the operation and management responsibility for the Bond Bank would be incorporated into the duties of existing DOR- Treasury Division staff. This resulted in the partial delegation of the State’s Debt Manager to the Bond Bank. Staffing was augmented in 2013 when the DOR - Treasury Division Operations Research Analyst position was partially delegated to the Bond Bank. Deven J. Mitchell, ~vho also serves as State Debt Manager and Investment Officer in the DOR - Treasury Division, with responsibility for the management of all debt of the State, was appointed Executive Director of the Bond Bank in 1999. Mr. Mitchell has worked for the DOR since 1992. He previously held several positions in Alaska financial institutions. Mr. Mitchell holds a Bachelor of Science Degree in Business Administration fi’om Northern Arizona University. He has served as board member and chairman of the Wildflower Court Nursing Home and as board member and president of the Alaska Government Finance Officers Association, the Alaska Municipal League and the Alaska Municipal League Joint Insurance Association. Ryan S. Williams, who also serves as Operations Research Analyst in the DOR- Treasury Division, was appointed Finance Director of the Bond Bank in 2014. Mr. Williams has worked tbr the DOR since 2009. Mr. Williams holds a Bachelor of Science Degree in Business Administration fi’om the University of Southern California, with a concentration in International Business. He has served as a board member and president of the Alaska Government Finance Officers Association. The Bond Bank contracts in the private sector fox" a wide range of professional services. The Executive Di~-ector and Finance Director coordinate the activities of these professionals, which include bond counsel, municipal advisor, accountants, auditors, fund trustees, bond trustees, arbitrage rebate consultants, and investment managers. 14 BONDS OUTSTANDING Under the provisions of the Act, within the limitations described below, the Bond Bank may issue additional Series of Bonds under the 2005 General Bond Resolution and, subject to certain additional limitations, may issue bonds under other resolutions. The total amount of Bond Bank bonds and notes outstanding at any one time may not exceed $1,792.5 million, consisting of statutory authorizations of: $87.5 million for the University of Alaska, $205 million for regional health organizations, and $1,500 million for municipalities and all other authorized purposes. As of May 1, 2020, the total principal amount of Bond Bank bonds and notes outstanding, not including the 2020 Series One Bonds, was $1,046,627,339. The Bond Bank currently has bonds outstanding under the following resolutions. 2005 General Bond Resolution The 2020 Series One Bonds are the 46th Series of Bonds issued under the 2005 General Bond Resolution. As of May 1, 2020, the Bond Bank has issued $1,584,870,000 of general obligation bonds nnder the 2005 General Bond Resolution (not including the 2020 Series One Bonds), $932,495,000 of which remains outstanding. After the issuance of the 2020 Series One Bonds, the Bond Bank will have issued $1,683,180,000 of general obligation bonds under the 2005 Genera! Bond Resolution, $961,725,000 of which will remain outstanding. Bonds may be issued by the Bond Bank pursuant to the 2005 General Bond Resolution only to finance loans to Governmental Units. The Bond Bank expects to issue additional bonds under the 2005 General Bond Resolution within the next year and to continue to use the 2005 General Bond Resolution as the primary means of financing loans to Governmental Units. 2010 Master Bond Resolution Bonds issued under the 2010 Master Bond Resolution are general obligations of the Bond Bank, equally and ratably secured by a pledge and assignment of all obligations acquired by the Bond Bank under the 2010 Master Bond Resolution. As of May 1, 2020, the Bond Bank has issued $4,765,000 of bonds under the 2010 Master Bond Resolution, $3,535,000 of which remain outstanding. The Bond Bank has no plans at this time to issue additional bonds under the 2010 Master Bond Resolution, and all of the bonds outstanding under the 2010 Master Bond Resolution are being refunded upon issuance of the 2020 Series One Bonds. See "PURPOSE OF THE 2020 SERIES ONE BONDS - Refunding Plan." 2016 Master Bond Resolution Bonds issued under the 2016 Master Bond Resolution are general obligations of the Bond Bank, payable solely from the sources provided in and pledged pursuant to the 2016 Master Bond Resolution and the related series resolutions. As of May 1, 2020, the Bond Bank has issued $144,850,000 of bonds under the 2016 Master Bond Resolution, $100,715,000 of which remain outstanding. The Bond Bank expects to continue to use the 2016 Master Bond Resolution as the primary means of financing loans to regional health organizations. Coastal Energy Impact Program In the 1980s, the Bond Bank privately placed conduit bonds with the United States Department of Commerce National Oceanic and Atmospheric Administration ("NOAA") to provide loans to local governments that qualified for aid under the Coastal Energy hnpact Prograln ("CEIP"). CEIP is a federal program designed to provide financial assistance to coastal states and municipalities facing impacts from offshore oil development. NOAA and the Bond Bank entered into an agreement whereby the Bond Bank was the direct lending agency lbr the CEIP in the State, with $50 million available to make loans to local governments or to establish reserves for loans to local governments. 15 The CEIP bonds that remain outstanding were issued for the City of Nome and the City of St. Paul. The total amount of CEIP bonds outstanding as of June 30, 2019, is $9,882,339. The CEIP loans are administered directly by NOAA without involvement of the Bond Bank. Bonds issued for the CEIP are not liabilities of the Bond Bank and are not secured by a pledge of any amounts held by or payable to the Bond Bank under the 2005 General Bond Resolution, including the Reserve Fund, nor are they secured directly or indirectly by any reserve account created under the Act. The CEIP loans are included, however, when calculating the amount of bonds the Bond Bank may issue under the Act. See Note 8 in Appendix D. The Bond Bank has no plans at this time to issue additional CEIP bonds. The City of St. Paul’s cotlnsel has reported to the Bond Bank that in April 2020, NOAA agreed to recommend to Congress that the CEIP loan be forgiven. A letter dated April 16, 2020 from the Chief of the Business Operations Division of NOAA’s Ofrice for Coastal Management requests the City of St. Paul to remit a $150,000 reserve fund to NOAA. Once these funds are received, NOAA is to move forward with a recommendation to Congress that the CEIP loan be forgiven. Direct Loans With ~noney from the Custodian Account, the Bond Bank has periodically acquired certain Municipal Bonds and has defeased certain bonds while retaining the underlying Municipal Bonds. Additionally, on two occasions the State has appropriated funds to the Bond Bank for acquisition of t~vo Municipal Bonds. In the State’s fiscal year 2011 capital budget, $2,450,000 was appropriated to the Bond Bank for the specific purpose of making loans to the City of Galena for electric utility and general fired needs at an interest rate of 1 percent. As of May 1, 2020, the Bond Bank held $790,348 of City of Galena utility revenue bonds and $86,501 of City of Galena appropriation obligations. As of May 1, 2020, the Bond Bank held $2,640,000 of Kenai Peninsula Borough taxable revenue bonds. The related loans were funded with money flom the Custodian Account, bear interest at market rates, and are secured by a pledge of gross revenues of the Central Peninsula Hospital and a debt service reserve fund, all on a parity with other loans made for the Central Peninsula Hospital. As of May 1, 2020, the Bond Bank held $500,000 of Kodiak Island Borough taxable general obligation bonds. The loan was funded with money from the Custodian Account, bears interest at market rates, and is a general obligation, secured by the full faith and credit of the Kodiak Island Borough. Loans by the State of Alaska The Bond Bank has statutory authority to borrow funds from the General Fund at the discretion of lhc Commissioner of the DOR. In 2010 and 2011 the Bond Bank borrowed money from the State for authorized uses of the Bond Bank. The State’s fiscal year 2013 capital budget converted the 2010 and 2011 loans to grants through an appropriation to the Bond Bank. The Bond Bank does not currently have any outstanding loans from the State. 16 BONDS ISSUED AND OUTSTANDING AS OF MAY l, 2020 2005 General Bond Resolution Bonds !~) 2016 Master Resolution Bonds 1976 Master Bond Resolution Bonds 12) 2010 Master Bond Resohttion Bonds t3) Coastal Energy hnpact Program Loans Principal Amount Principal Amount Issued Outstanding $1,688,045,000 $961,725,000 144,850,000 100,715,000 721,985,000 - 4,765,000 - 35,456,046 9,882,339 (1) Includes the 2020 Series One Bonds; outstanding amount excludes the Refunded Bonds. (2) As of February 1, 2016, no bonds remain outstanding under the 1976 Master Bond Resolution. (3) The Bond Bank is refunding all of the bonds outstanding under the 2010 Master Bond Resolution upon issuance of the 2020 Series One Bonds. (4) The CE1P loans are not liabilities of the Bond Bank but are included when calculating the amount of bonds outstauding under the Act. CE1P bonds outstanding as of June 30, 2019. DEBT CAPACITY AS OF MAY 1, 2020 Debt Limit/t~ University of Alaska Regional Health Organizations All Other Authorized Purposes Less Outstanding Debt General Obligation Bonds 2005 General Bond Resolution 2016 Master Resolution Coastal Energy Impact Program Loans Is) Total Outstanding Debt $ 87,500,000 205,000,000 1,500,000,000 961,725,000 100,715,000 $1,792,500,000 $1,062,440,000 9,882,339 $1,072,322,339 Remaining Debt Capacity University of Alaska Regional Health Organizations All Other Authorized Purposes 4,610,000 104,285,000 611,282,661 720,177,661 (1) Excludes the aulhority of the Bond Bank (or a subsidiary corporation of the Bond Bank) to issue bonds to finance loans to governmental employers to prepay all o1" a portion of their shares of the unfunded accrued actuarial liabililies of retirement systems. The Bond Bank has never used this authority and has no current plans to do so. See Appendix F- "’INI:()RMATION CONCF.RNING THE STATE OF ALASKA- Public Debt and Other Obligations of the State ~ Potential State-Supported Pension Obligation Bonds." (2) Includes the 2020 Series One Bonds; excludes the Refimded Bonds. (3) Of this amount, $82,890,000 is att,ibutable to the University of Alaska. (4) All of this amount ~vas issued to make loans 1o regional health organizations. (5) The CE1P loans are not liabilities of the Bond Bank bnt are included when calculating the amount of bonds outstanding under the Act. CEIP bonds oulslanding as of June 30, 2019. 17 DEBT SERVICE REQUIREMENTS BONDS ISSUED AND OUTSTANDING UNDER THE 2005 GENERAL BOND RESOLUTION AND THE 2020 SERIES ONE BONDS (Fiscal Years Ending June 30) Outstanding 2020 Series One Bonds Fiscal Year Bonds ~1 Principal Interest Total 2021 $ 99,634,775 2022 95,678,431 2023 92,303,402 2024 85,694,241 2025 75,267,653 2026 72,544,812 2027 67,912,076 2028 64,442,551 2029 60,392,377 2030 53,888,731 2031 53,534,484 2032 55,161,545 2033 54,273,245 2034 48,296,852 2035 37,299,880 2036 34,304,759 2037 27,130,100 2038 26,492,750 2039 22,088,591 2040 18,049,163 2041 18,055,900 2042 17,910,700 2043 17,910,000 2044 15,904,975 2045 13,319,800 2046 5,429,750 2047 5,428,500 2048 2,155,000 2049 2,152,500 Totalt~ $ 1,242,657,541 $ 7,490,000 8,595,000 8,975,000 9,225,000 9,980,O00 8,765,000 8,215,000 7,790,000 7,385,000 7,740,000 6,670,000 1,425,000 795,000 830,000 855,000 855,000 640,000 665,000 695,000 720,000 $ 4,189,360 $ 111,314,135 4,273,525 108,546,956 3,834,275 105,112,677 3,379,275 98,298,516 2,899,150 88,146,803 2,430,525 83,740,337 2,006,025 78,133,101 1,605,900 73,838,451 1,226,525 69,003,902 848,400 62,477,131 488,150 60,692,634 285,775 56,872,320 230,275 55,298,520 193,800 49,320,652 160,100 38,314,980 125,900 35,285,659 96,000 27,866,100 69,900 27,227,650 42,700 22,826,291 14,400 18,783,563 - 18,055,900 - 17,910,700 - 17,910,000 - 15,904,975 - 13,319,800 - 5,429,750 - 5,428,500 - 2,155,000 - 2,152,500 $ 98,310,000 $ 28,399,960 $ 1,369,367,501 (1) Excludes the Refhnded Bonds. (2) Tolals may not loot due to rounding. Future Financing Plans The Bond Bank anticipates issuing additional bonds pursuant to the 2005 General Bond Resolution within the next year and making related loans to eligible borrowers. The principal amount ot" such additional bonds depends on the number and size of the applications fi-om eligible borrowers. 18 Debt Payment Record The Bond Bank has always made principal and interest payments on its general obligation and revenue bonds when due. No deficiencies have arisen in any Bond Bank debt service fund or reserve fired, nor has there been a need to exercise the provision requiring that State payments to Governmental Units be paid to the Bond Bank. SUMMARY OF THE 2005 GENERAL BOND RESOLUTION The following is a summary of certain provisions of the 2005 General Bond Resolution. A copy of the 2005 General Bond Resolution, together with the First Supplemental Resolution adopted in February 2013, is included as Appendix E. The 2013 First Supplelnental Resolution includes amendments to the 2005 General Bond Resolution that take effect after all Bonds outstanding as of February 19, 2013 are no longer outstanding. See "Modifications to the 2005 General Bond Resolution." Capitalized terms used in this sumnmry are defined in Section 103 of the 2005 General Bond Resolution. 2005 General Bond Resolution Constitutes Contract The 2005 General Bond Resolution provides that the 2005 General Bond Resolution constitutes a contract between the Bond Bank, the Trustee, and the owners from time to time of the Bonds, that the pledges made in the 2005 General Bond Resolution and the covenants and agreements therein set forth to be performed by the Bond Bank will be for the benefit, protection, and security of the holders of any and all of the Bonds, and that each Bond, Credit Enhancement facility, and Interest Rate Exchange Agreement will be of equal rank without preference, priority or distinction. Obligation of the Bond Bank The Bonds are general obligations of the Bond Bank, and the fldl faith and credit of the Bond Bank are pledged for the payment of the principal and redemption premium, if any, of, and interest on the Bonds solely fi-om the sources provided in the 2005 General Bond Resolution and any Series Resolution. The Act and the 2005 General Bond Resolution each provides that the State is not obligated to pay the principal, premium, if any, or interest on the Bonds, and that the Bonds, are not a debt or liability of the State and neither the faith and credit of the State nor the taxing power of the State is pledged to the payment of the principal of; preminm, if any, or interest on the Bonds. Pledge The Municipal Bonds and the Municipal Bonds Payments, the investments thereof, and the proceeds of such investments, if any, and all funds and accounts established by the 2005 General Bond Resolution to be held by the Trustee are pledged and assigned fbr the payment of the principal of, redemption price ot; interest on, and sinking fund installments for, the Bonds in accordance with the terms and provisions of the 2005 General Bond Resolution, subject only to the provisions of the 2005 General Bond Resolution permitting the application thereof for the purposes and on the terms and conditions set forth in the 2005 General Bond Resolution. See Section 601 of the 2005 General Bond Resohllion m Appendix E. The 2005 General Bond Resolution provides that Municipal Bonds and the Municipal Bonds Payments and all other money and securities pledged pursuant to the 2005 General Bond Resolution immediately xvill be subject to the lien of such pledge without any further act, and such lien will be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise againsl file Bond Bank. regardless of whether such parties have notice thereot: 19 Power to Issue Bonds and Make Pledges The Bond Bank represents in the 2005 General Bond Resolution that it is duly authorized by law to authorize and issue the Bonds and to pledge the Municipal Bonds Payments, the Municipal Bonds, and other money, securities, funds, and property purported to be pledged by the 2005 General Bond Resolution, fi’ee and clear of any pledge, lien, charge, or encumbrance thereon or with respect thereto prior to, or of equal rank with, the pledge created by the 2005 General Bond Resolution, except for the liens in favor of the Trustee and Paying Agent as provided in the 2005 General Bond Resolution. The Bond Bank covenants in the 2005 General Bond Resolution that it will at all times, to the extent permitted by law, defend, preserve, and protect the pledge of the Municipal Bonds Payments, the Municipal Bonds, and other money, securities, funds, and property pledged under the 2005 General Bond Resolution and all the rights of the Bondholders under the 2005 General Bond Resolution against all claims and demands of all persons whomsoever. General The Bond Bank covenants in the 2005 General Bond Resolution that it will do and perform or cause to be done and performed all acts and things required to be done or performed by or on behalf of the Bond Bank under law and the 2005 General Bond Resolution in accordance with the terms thereof. The Act provides that the State will not limit or restrict, and the Bond Bank pledges and agrees in the 2005 General Bond Resolution with the Holders of the Bonds that it will not cause the State to limit or alter, the rights vested by the Act in the Bond Bank to fulfill the terms of any agreements made with Bondholders, or in any way impair the rights and remedies of such Bondholders, until the Bonds, together with the interest thereon, with interest on any unpaid instalhnents of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of such Holders, are fully met and discharged. Waiver of Laws The Bond Bank covenants in the 2005 General Bond Resolution in addition that it will not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of any stay or extension of law now or at any time hereafter in force which may affect the covenants and agreements contained in the 2005 General Bond Resolution or in any Series Resolution or in the Bonds, and all benefit or advantage of any such law or laws is expressly waived by the Bond Bank. Loan Agreement Provisions The 2005 General Bond Resolution provides that no loan will be made by the Bond Bank from proceeds of the sale of Bonds and no Bonds will be issued for the purpose of providing funds with which to make a loan, unless the Loan Agreement under which such loan is to be made will comply with, among other requirements in the 2005 General Bond Resolution, the following: (a) The Governmental Unit which is a party to such Loan Agreement must be a Governmental Unit as defined by the 2005 General Bond Resolution, and the Loan Agreement must be executed in accordance with existing laws. (b) The Governmental Unit, prior to or simultaneously with the issuance of Bonds issued to make a Loan to the Governmental Unit, will issue Municipal Bonds which are valid debt obligations of the Governmental Unit as required by the Act. 2O (c) The Municipal Bonds Payment to be made by the Governmental Unit under snch Loan Agreement will be not less than tile interest and principal payments tile Bond Bank is required to make on the Loan Obligations and will be scheduled by the Bond Bank in such manner and at such times as to provide funds sufficient to pay principal and interest on the Loan Obligations as the same become due. (d) The Governmental Unit will be obligated to pay Fees and Charges to the Bond Bank at the times and in the amounts which will enable tile Bond Bank to comply with the provisions of the 2005 General Bond Resolution to pay Administrative Expenses and lees and expenses of the Trustee and Paying Agent. (e) The Governmental Unit will agree that in the event the Municipal Bonds Payment is uot paid by it to the Bond Bank on or before the times specified in the Loan Agreement, any money payable to the Governmental Unit by any department or agency of the State will be withheld fi-om such Governmental Unit and paid over directly to the Trustee acting under the 2005 General Bond Resolution. (f) The Bond Bank will not sell, and the Governmental Unit \viii not redeem prior to maturity, any of the Municipal Bonds ~vith respect to which the Loan is made in an amount greater than the Outstanding Bonds issued with respect to such Loan which are then redeemable, and any such sale or redemption of such Municipal Bond will be in an amount not less than the aggregate of (i) the principal amount of the Loan Obligation so to be redeemed (or the alnount of Refunding Bonds if the Loan is being refunded), (ii) the interest to accrue on the Loan Obligation so to be redeemed to the next redemption date, (iii) the applicable premium, if any, payable on the Loan Obligation so to be redeemed, and (iv) the costs and expenses of the Bond Bank in effecting the redemption of the Loan Obligation so to be redeemed. (g) The Governmental Unit must give the Bond Bank at least fifty (50) days’ notice of its intent to redeem its Municipal Bonds. Modification of Loan Agreement Terms The Bond Bank covenants in the 2005 General Bond Resolution that it will not consent to the modification of, or modify, the rates of interest of, or the amount or time of payment of any instalhnent of principal of or interest on, any Municipal Bonds evidencing a Loan, or the amount or time of payment of any Fees and Charges payable with respect to such Loan, or the security for or any terms or provisions of such Loan or the Municipal Bonds evidencing the same, in a manner which adversely affects or diminishes the rights of the Bondholders. Enforcement of Municipal Bonds Tile 2005 General Bond Resolution provides that the Bond Bank will diligently enforce, and take all reasonable steps, actions, and proceedings necessary for tile enforcement of, all terms, covenants, and conditions of all Loan Agreements and the Municipal Bonds, including the prompt collection, and the giving of notice to the Commissioner of Revenue, Commissioner of Commerce, Community and Economic Development, and Commissioner of Administration and any other department or agency of the State which is custodian of any money payable to the Governmeutal Unit of any failure or defanlt of the Governmental Unit in tile payment of its Municipal Bonds Payments and will promptly transfer any such money, upon receipt thereot; to the Trustee and that in such event, or if such money is paid directly to the Trustee, the Trustee will deposit any such money in the Principal Account and Interest Account in place 21 of said unpaid Municipal Bonds Payment or in the event deficiencies in said Accounts created by such default has been made up by the Reserve Fund, into the Reserve Fund to the extent of such deficiencies. Funds and Accounts The 2005 General Bond Resolution established a Debt Service Fund, consisting of an Interest Account, a Principal Account, and a Redemption Account; a Reserve Fund; a Rebate Fund, which consists of a separate sub-account for each Series of Bonds; and an Operating Fund. The Debt Service Fund, the Rebate Fund, and the Reserve Fund are held by the Trustee. The Operating Fund is held by the Bond Bank and is not pledged to the paynaent of the Bonds. Debt Service Fund. The Trustee is required to deposit Municipal Bonds Interest Payments and any other money available for the payment of interest in the Interest Account upon receipt thereof and on or before each interest payment date, to pay out of the Interest Account the amounts required for the payment of the interest becoming due on each Series of Bonds on such interest payment date. The Trustee is required to deposit Municipal Bonds Principal Payments and any other money available for the payment of principal in the Principal Account upon receipt thereof. The Trustee is required, on or before each principal payment date or Sinking Fund lnstalhnent date, to pay out of the Principal Account the amounts required for the payment of the principal or Sinking Fund Installment due on each Series of Bonds on such date. The Trustee establishes in the Redemption Account a separate sub-account for each Series of Bonds. Any money deposited in the Redemption Account from any source other than excess money transferred fl’om the Reserve Fund or certain proceeds received from sales or redemptions of Municipal Bonds pursuant to Section 607 or Section 916 of the 2005 General Bond Resolution will be applied to the purchase or redemption of Bonds. Any money deposited in the Redemption Account from the Reserve Fund because of a reduction in the Required Debt Service Reserve is to be applied to the purchase or redemption of Reserve Fund Obligations. Reserve Fund. The 2005 General Bond Resolution established the Reserve Fund as a 2005 General Obligation Bond Resolution Reserve Account within the Alaska Municipal Bond Bank Reserve Fund created by the Act and provides that monthly, the Trustee will set aside fiom amounts in the Reserve Fund derived fiom investment earnings and profits realized by the Reserve Fund due to investments thereof, an amount which, when added to the amounts theretofore set aside for such purpose and not paid into the Interest Account, will on such date be equal to the unpaid interest on the Reserve Fund Obligations accrued and to accrue to the last day of such month. On or before each principal payment date and Sinking Fund Instalhnent payment date of Reserve Fund Obligations, the Trustee is to withdraw from amounts in the Reserve Fund and deposit in the Principal Account an amount which, xvhen added to the amount then on deposit in the Principal Account and derived fiom sources other than Municipal Bonds Payments, \vill be equal to the Principal lnstalhnent of the Reserve Fund Obligations falling due on such date. On or befbre December 31 of each year, after satisfying the deposit requirements described above, the Trustee is to withdraw from the Reserve Fund any amount remaining therein derived fi-om investment earnings or profits due to investments thereof, and pay over said alnount to the Bond Bank for deposit in the Custodian Account within the Operating Fund, but only to the extent that there remains after such withdrawal an amount in the Reserve Fund at least equal to the Reserve Fund Requirement. The 2005 General Bond Resolution provides that the Reserve Fund Requirement may be satisfied with (i)money made available by tile State and paid to the Bond Bank for the purpose of the Alaska Municipal Bond Bank Reserve Fund created by the Act in tile amount provided by a Series Resolution; (ii) all money paid to the Bond Bank pursuant to the Act for the purpose of restoring the Reserve Fund to tile amount of the Reserve Fund Requirement; (iii) such portion of the proceeds of sale of Bonds, if any, as provided by any Series Resolution; (iv) Credit Enhancement; (v) any other money which may be made available to tile Bond Bank for the purposes of the Reserve Fund flom any other source or sources; or (vi) any combination of the foregoing. The Reserve Fund Requirement may be satisfied entirely, or in part, by a letter of credit, a line of credit, a credit facility, a surety bond, bond insurance, or any other instrument or a~Tangement obtained in connection with the issuance of a Series of Bonds; provided, however, any credit enhancement satisfying all or any part of the Reserve Fund Requirement after the initial issuance of Bonds or issued in substitution for any prior credit enhancement previously issued will not, by itself, cause a withdrawal or downward revision of the ratings maintained by any Rating Agency with respect to the Bonds. In the event there is a deficiency in the Interest Account on any interest payment date or in the Principal Account on any principal payment date or Sinking Fund Instalhnent payment date, the Trustee is to make up such deficiencies from the Resmwe Fund. Administration of Reserve Fund. The 2005 General Bond Resolution provides that money and securities held in the Reserve Fund will not be withdrawn therefrom at any time in such amount as would reduce the amount in such Fund to an amount less than the Reserve Fund Requirement except for the payment when due of debt service on Reserve Fund Obligations and to cure a deficiency in the Principal Account or the Interest Account. Rebate Fund. There is to be deposited in the Rebate Fund the amount of the Rebate Requirement for each Series of Bonds, and the Trustee is to pay over to the United States Government such amounts as determined by the Bond Bank and as set forth in the 2005 General Bond Resolution. All amounts held in the Rebate Fund, including income earned from investment of the Rebate Fund, shall be held by the Trustee free and clear of the lien of the 2005 General Bond Resolution. Operath~g Fund. The 2005 General Bond Resolution requires the deposit in the Operating Fund of all Fees and Charges, to the extent not otherwise encumbered or pledged, and any other money which may be made available to the Bond Bank for purposes of the Operating Fund fi’om any other source or sources. Money at any time held for the credit of the Operating Fund is to be used for and applied solely to the following purposes: (i) to pay the Administrative Expenses of tile Bond Bank; (ii) to pay the fees and expenses of the Trustee and any Paying Agent; (iii) to pay financing costs incurred with respect to a Series of Bonds; and (iv) to pay any expenses in carrying out any other purpose then authorized by the Act. The Operating Fund is held by the Bond Bank, not by the Trustee, and the 2005 General Bond Resolution provides that all amounts in the Operating Fund will be free and clear of any lien or pledge created by the 2005 General Bond Resolution. Security for Deposits and Investment of Funds The 2005 General Bond Resolution provides that all money held by the Trustee under tile 2005 General Bond Resolution will be continuously and fully secured, for the benefit of the Bond Bank and the Bondholders in such manner as may then be required or permitted by applicable State or federal laws and regulations regarding the security tbr, or granting a preference in the case of, the deposit of trust funds but does not require the Trustee or any Paying Agent to give security for tile deposit of any money with them 23 held in trust for the payment of the principal or Redemption Price of or interest on any Bonds, or for the Trustee to give security for any money which is represented by obligations purchased under the provisions of the 2005 General Bond Resolution as an investment of such money. The 2005 General Bond Resolution also provides lbr the invesm~ent of funds held by the Trustee. See the definition of "Investment Securities" and Sections 702 and 703 of the 2005 General Bond Resolution in Appendix E. Payment of Bonds The Bond Bank covenants in the 2005 General Bond Resolution that it will duly and punctually pay or cause to be paid the principal or Redemption Price, if any, of every Bond and the interest thereon, at the dates and places and in the manner stated in the Bonds according to the true intent and meaning thereof, and will duly and punctually pay, or caused to be paid, all Sinking Fund Instalhnents, if any, becoming payable with respect to any Series of Bonds. Fees and Charges The Bond Bank may charge such Fees and Charges to each Governmental Unit to which a Loan is made, and will from time to time revise such Fees and Charges whenever necessary, so that such Fees and Charges actually collected from each such Governmental Unit will at all times produce money which, together with such Governmental Unit’s Allocable Proportion of other money available under the provisions of the 2005 General Bond Resolution, and other money available therefor, will be at least sufficient to pay, as the same become due, the Governmental Unit’s Allocable Proportion of (i)the Administrative Expenses of the Bond Bank and (ii) the fees and expenses of the Trustee and any Paying Agent. Issuance of Additional Obligations The Bond Bank may issue additional Bonds and refunding Bonds pursuant to the terms of the 2005 General Bond Resolution; however, no additional Series of Bonds are to be issued unless: (a) the aggregate principal amount of Bonds and Notes Outstanding at the time of issuance and delivery of such additional Bonds, including the principal amount of such additional Bonds, wilt not exceed any limit thereon imposed by law; (b) there is at the time of the issuance of such additional Bonds no deficiency in the amounts required by the 2005 General Bond Resolution or any Series Resolution to be paid into the Debt Service Fund and into the Reserve Fund; (c) the amount of the Reserve Fund, upon the issuance and delivery of snch additional Bonds, and the deposit in the Reserve Fund of any amount provided therefor in the Series Resolution authorizing the issuance of such additional Bonds, will not be less than the Required Debt Service Reserve; and (d) the maturities of, or Sinking Fund lnstalhnents for, the additional Bonds representing Loan Obligations, unless such additional Bonds are being issued to refnnd Outstanding Bonds, will be equal to the scheduled Municipal Bonds Principal Payments to be made in respect of the Loans with respect to which such additional Bonds are to be issued. The Bond Bank expressly reserves the right to adopt other general bond resolutions and reserves the right to issue Notes and any other obligations so long as the same are not a charge or lien on the 24 Municipal Bonds, the Municipal Bonds Payments, and the Fees and Charges or payable from the Debt Service Fund or the Reserve Fund. Defeasance If the Bond Bank pays or causes to be paid to the holders of all Bonds then Outstanding the principal and interest and/or Redemption Price, if any, to become due thereon, at the times and in the manner stipulated therein and in the 2005 General Bond Resolution and also pays or causes to be paid all other sums payable under the 2005 General Bond Resolution by the Bond Bank, including any amounts payable to the United States, then, at the option of the Bond Bank, as expressed in an instrument in writing signed by an Authorized Officer and delivered to the Trustee, the covenants, agreements, and other obligations of the Bond Bank to the Bondholders will be discharged and satisfied. The 2005 General Bond Resolution provides that Bonds may, prior to the lnaturity or redemption date thereof, be deemed to have been paid if(i) in case any of said Bonds are to be redeemed on any date prior to their maturity, the Bond Bank has given to the Trustee in form satisfactory to it irrevocable instructions to publish notice of redemption on said date of such Bonds, and (ii) there has been deposited with the Trustee either monies in an amount which will be sufficient or Investment Securities which are not subject to redemption prior to the dates on which amounts will be needed to make payments on the Bonds and described in clause (1) of the definition of Investment Securities in the 2005 General Bond Resolution, the principal of and the interest on which when due will provide money which, together with the money, if any, deposited with the Trustee or Paying Agent at the same time, is sufficient, to pay, when dne, the principal or Redemption Price, if applicable, and interest due and to become due on said Bonds on and prior to the redemption date or maturity date thereof, as may be the case. See the definition of "Outstanding," the definition of "Investment Securities," and Article Xlll of the 2005 General Bond Resolution in Appendix E. Supplements and Amendments The Bond Bank may adopt a Series Resolution or Supplemental Resolution without the consent of the Bondholders or the Trustee for various purposes not inconsistent with the 2005 General Bond Resolution, to provide for the issuance of additional Series of Bonds, to impose additional limitations or restrictions on the issuance of Bonds, to impose other restrictions on the Bond Bank, to surrender any right, power, or privilege, or to confirm any pledge of or lien upon the Municipal Bonds or the Municipal Bonds Payments or any other fiends. The Bond Bank may also supplement the 2005 General Bond Resolution to cure any ambiguity or defect in the 2005 General Bond Resolution, provided such modifications are not contrary to or inconsistent with the 2005 General Bond Resolution as theretofore in effect. Any other modification or amendment of the 2005 General Bond Resolution and of the rights and obligations of the Bond Bank and of the Bondholders may be made with the written consent (i)of the holders of at least two-thirds in principal amount of the Bonds Outstanding at the time such consent is given, or (ii) in case less than all of the several Series of Bonds then Outstanding are affected by the modification or amendment, of the holders of at Feast two-thirds in principal amount of the Bonds of each Series so affected and Outstanding at the time such consent is given; provided, however, that such modification or amendment will not permit (i)a change in the terms of redemption or maturity of the principal of any outstanding Bond or of any instalhnent of interest thereon or Sinking Fund Instalhnent therefor, (ii) a reduction in the principal amount or the Redemption Price thereof or in the rate of interest thereon, (iii)a reduction of the percentage of the Holders of which is required to effect any such modification or amendment, or (iv) the creation of any lien prior to ol- on a parity with the lien created by the 2005 General Bond Resolution (except in the manner provided by the 2005 General Bond Resolution) 25 or deprive the Bondholders of the lien created by the 2005 General Bond Resolution, without the consent of the holders of all the Bonds Outstanding or of the Series of" Bonds affected by such modification or amendment. To the extent that the f‘ull payment of the interest and principal of Bonds of a Series is secured by Credit Enhancement, the Credit Enhancement Agency will be considered to be the Bondholder of all the Bonds of the Series for purposes of exercising any rights with respect to supplements and amendlnents to the 2005 General Bond Resolution if the Credit Enhancement so provides. See Articles X and XI and the definition of"Bondholder" in the 2005 General Bond Resolution and Section 202 of the 2013 First Supplemental Resolution in Appendix E. Events of Default and Remedies Each of the following events is an Event of Default under the 2005 General Bond Resolution: (a) the Bond Bank defaults in the payment of the principal or Redemption Price of, Sinking Fund Instalhnent for, or interest on, any Bond when and as the same becomes dne whether at maturity or upon call for redemption, or otherwise; (b) the Bond Bank fails or refuses to comply with the provisions of the Act regarding the certification of deficiencies in the 2005 General Bond Resolution Reserve Fund, or such amounts as are certified by the Chair of the Bank to the Governor and to the Legislature pursuant to the Act are not appropriated and paid to the Bond Bank prior to the termination of the then- current State fiscal year; or (c) the Bond Bank fails or refuses to comply with the provisions of the Act, other than as described in clause (b) above, or defaults in the performance or observance of any other of the covenants, agreements, or conditions on its part in the 2005 General Bond Resolution, any Series Resolution, any Supplemental Resolution, or in the Bonds contained, and such failure, refusal, or default continues for a period of 45 days after written notice thereof by the Trustee or the Holders of not less than 25 percent in principal amount of the Outstanding Bonds; provided, however, that an event of default will not be deemed to exist under the provisions described in clause (c) above upon the failure of the Bond Bank to make and collect Fees and Charges required to be made and collected by the 2005 General Bond Resolution or upon the failure of the Bond Bank to enforce any obligation undertaken by a Governmental Unit pursuant to a Loan Agreement including the making of the stipulated Municipal Bonds Payments so long as the Bond Bank may be otherwise directed by law and so long as the Bond Bank is provided with money from the State or otherwise, other than withdrawals from or reimbursements of the Reserve Fund, sufficient in amount to pay the principal of and interest on all Bonds as the same becomes due during the period for which the Bond Bank is directed by law to abstain from making and collecting such Fees and Charges and from enforcing the obligations of a Governmental Unit under the applicable Loan Agreement. The 2005 General Bond Resolution provides that upon the happening and continuance of‘ any Event of‘ Default described in clause (a) above, the Trustee will proceed, or upon the happening and continuance of‘ any Event of‘ Default described in clauses (b) and (c) above, the Trustee may proceed, and upon the written request of the holders of not less than 25 percent in principal amount of the Outstanding Bonds will proceed, in its own name, to protect and enforce its rights and the rights of the Bondholders by such of the following remedies as the Trustee, being advised by counsel, deems most eff‘ectual to protect and enforce such rights: (a) by mandamus or other suit. action, or proceeding at law or in equity, enlbrce all rights of the Bondholders, including the right to require the Bond Bank to make and collect Fees 26 and Charges and Municipal Bonds Payments adequate to carry out the covenants and agreelnents as to, and pledge of, such Fees and Charges and Municipal Bonds Payments and other properties and to require the Bond Bank to carry out any other covenant or agreement with Bondholders and to perform its duties under the Act; (b) by bringing suit upon tile Bonds; (c) by action or suit in equity, require the Bond Bank to account as if it were the trustee of an express trust for the holders of tile Bonds; and (d) by action or suit in equity, enjoin any acts or things which may be unlawful or in violation of the rights of the holders of the Bonds. Acceleration. The 2005 General Bond Resolution provides that upon the occurrence of an event of default in the payment of principal or Redemption Price of, Sinking Fund Instalhnent for, or interest on Bonds then Outstanding, unless the principal of all Bonds has already become due and payable, the Trustee, by notice in writing to the Bond Bank, may, and upon the written request of the holders of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding will, declare the principal of all the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same will be immediately due and payable. This provision, however, is subject to the condition that if, at any time after the principal of the Bonds has been so declared due and payable, and before any judgment or decree for the payment of the money due has been obtained or entered, the Bond Bank deposits with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all matured instalhnents of interest upon all the Bonds, with interest on such overdue installments of principal at the rate borne by the respective Bonds, and the reasonable expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) have been made good or cured to the satisfaction of tile Trustee or provision deemed by the Trustee to be adequate have been made therefor, then the holders of at least a majority in aggregate principal amount of the Bonds then outstanding, by written notice to the Bank and to the Trustee, may, on behalf of the holders of all of the Bonds, rescind and annul such declaration and its consequences and waive such default. See Sections 1203 and 1204 in Appendix E. BondhoMers’ Direction of Proceedings. Tile holders of a m~jority in principal amount of the Bonds then Outstanding will have the right to direct the method of conducting all remedial proceedings to be taken by the Trustee, provided that such direction is not otherwise than in accordance with law or the 2005 General Bond Resolution, and that the Trustee has the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondholders not parties to such direction. Limitation on Rights qfBondholders. No holder of any Bond will have any right to institute any suit, action, mandamus, or other proceeding in equity or at law tinder the 2005 General Bond Resolution, or tbr the protection or enforcement of any right under the 2005 General Bond Resolution or any right tinder law, unless such holder has given to the Trustee written notice of the event of default or breach of duty on account of which such suit, action, or proceeding is to be taken, and unless the holders of not less than 25 percent in principal amount of the Bonds then Outstanding have made written request of the Trustee and has aftbrded the Trustee a reasonable opportunity either to proceed to exercise the powers granted under law or to institute such action, suit, or proceeding in its name and unless, also, there has been offered to tile Trustee reasonable security and indenmity against the costs, expenses, and liabilities to be incurred thereby, and the Trustee has refused or neglected to comply with such request within a reasonable time. No holder of the Bonds will have any right to affect, disturb, or prejudice the security of 27 the 2005 General Bond Resolution, or to enforce any right with respect to the Bonds or the 2005 General Bond Resolution, except in the manner provided in the 2005 General Bond Resolution, and all proceedings at law or in equity will be instituted, held, and maintained in the manner provided in the 2005 General Bond Resolution and for the benefit of all Bondholders. Excess Earnings The Bond Bank covenants and agrees in the 2005 General Bond Resolution to calculate Rebatable Arbitrage and to pay Rebatable Arbitrage to the United States of America in the manner necessary to comply with the then applicable federal tax law. Within 30 days after the end of every fifth Bond Year, and within 60 days of the date when all of each Series of Bonds have been retired (or at such other time or times as may then be required by the Code and the applicable Income Tax Regulations), the Bond Bank will determine the Rebatable Arbitrage with respect to each Series of Bonds, and pay rebate amounts due the United States of America with respect thereto, as provided in Section 148(f) of the Code. Modifications to the 2005 General Bond Resolution In addition to modifications with and without consent of Bondholders, the 2005 General Bond Resolution authorizes modifications of any provision set forth in the 2005 General Bond Resolution by the terms of a Supplemental Resolution, with such modifications becoming effective after all Bonds of each Series Outstanding as of the date of such Supplemental Resolution authorizing such modification cease to be Outstanding. The 2013 First Supplemental Resolution was adopted by the Board on February 19, 2013. The 2013 First Supplemental Resolution authorizes the following modifications to the 2005 General Bond Resolution: (i)to authorize the Trustee to release to the Bond Bank amounts held in the Reserve Fund which exceed the Required Debt Service Reserve whenever there is a reduction in the Required Debt Service Reserve, (ii)to authorize the Trustee to release to the Bond Bank earnings and profits realized from investments in the Reserve Fund on or before June 30 of each year so long as the balance therein equals the Required Debt Service Reserve, (iii)to allow for certain amendments and modifications to the 2005 General Bond Resolution to be effective upon securing the consent of Holders of at least two-thirds in principal amount of Bonds then Outstanding, and (iv) to establish that consent of Holders of Bonds, when required under the terms of the 2005 General Bond Resolution, specifically includes the consent of an underwriter or purchaser of a Series of Bonds at the time such Bonds are issued. The modifications to the 2005 General Bond Resolution set forth in the 2013 First Supplemental Resolution shall become effective after all Bonds issued prior to the 2013 Series Three Bonds cease to be Outstanding and compliance by the Bank with certain requirements set forth in the 2005 General Bond Resolution, at which time these modifications will apply to the 2020 Series One Bonds and govern the rights and obligations of the Holders thereof. CERTAIN BONDOWNERS’ RISKS TheJbllowi~g is a dLs’cussion qf certain risks that could qffi, ct pco,ments to be made with re.v)ec’~ to the 2020 Series O~e Bonds. This discussion is ~ot, and is not intemled to be, exlmustive, should he read in c’o,{jzt~,c’lion with all other paris (~/" this Q//icial Slatemenl, aml should ~ol be c(msidered Io he a complete description q! all riskr that could qffi, c’t such p(o,menls. Prospective purchase~w q/ the 2020 Series One Bonds should analyze carg/hl{v the i~{fi)rmalion contained in lhis Q//icial Slalemenl, i~cluding the at)l)endices, aml additional i~{[b~wmtion in lhe jbrm qf the complete documents .s’.mmarized herei~, copies qf which a~’e a vailable as described in lh is (~[/ic’ial Slalem en I. 28 General An investment in the 2020 Series One Bonds involves certain risks, inch~ding the risk of nonpayment of interest or principal due to owners of the 2020 Series One Bonds and the risk that the 2020 Series One Bonds will be redeemed prior to maturity. The enforceability of the Bond Bank’s obligations pursuant to the 2005 General Bond Resolution may be limited by the laws of the State and the United States with respect to bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors’ rights generally and by the availability of equitable remedies. The 2020 Series One Bonds are general obligations of the Bond Bank, and the full faith and credit of the Bond Bank are pledged for the payment of the principal and redemption premium, if any, of, and interest on the 2020 Series One Bonds solely from the sources provided in the 2005 General Bond Resolution and any Series Resolution. The Act and the 2005 General Bond Resolution each provides that the State is not obligated to pay the principal, premium, if any, or interest on the 2020 Series One Bonds, that the 2020 Series One Bonds are not a debt or liability of the State, and that neither the faith and credit of the State nor the taxing power of the State is pledged to the payment of the principal of, premium, if any, or interest on the 2020 Series One Bonds. In addition to the 2020 Series One Bonds, the Bond Bank may issue additional series of Bonds secured on a parity under the 2005 General Bond Resolution. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS." State and Governmental Unit Revenues Payments made by the Governmental Units on their Municipal Bonds are the primary security for the payment of principal of and interest on the Bonds, including the 2020 Series One Bonds. The Bond Bank also maintains a reserve account within the reserve fund created under the Act as additional security for the payment of the Bonds. The Bond Bank is required under the Act to report the sufficiency of the reserve fund and to seek appropriations from the Legislature to replenish the reserve fund if needed. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS- 2005 General Bond Resolution Reserve Fund." State Payments to Governmental Units. State payments to Governmental Units include payments through the SDRP and Education Support Funding through the Department of Education and Early Development and conmmnity jail funding through the Department of Corrections. A table in Appendix B sets forth the amount of State payments to Governmental Units that have borrowed fiom the Bond Bank as well as the fiscal year 2019 Loan Obligations and estimated coverage provided by those State payments. The payment and amount of such State payments is uncertain, and legislative authorization tbr such payments is subject to appropriation and to amendlnent or repeal. See Appendix F- "INFORMATION CONCERNING THE STATE OF ALASKA- Government Budgets and Appropriations" and "- Government Funds" and Appendix B - "STATE PAYMENTS TO GOVERNMENTAL UNITS." Capital expenditures by the State that are the source of matching grant funding to municipalities have been reduced significantly since fiscal year 2015. Payments through the SDRP were reduced by 25 percent in fiscal year 2017 and have been reduced by 50 percent in fiscal year 2020. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS- State Payments to Governmental Units." The State’s enacted budget for fiscal year 2021 reduced State payments to Governmental Units by reducing paylnents for the SDRP and the TIDSRP by 100 percent fi’om authorized amounts, among other reductions. See Appendix F - "INFORMATION CONCERNING THE STATE OF ALASKA." 29 Effect on State Intercept. The Act provides that, to the extent that any departnaent or agency of the State is the custodian of money payable to a Governmental Unit, at any time after notice froln the Bond Bank that the Governmental Unit is in default on the payment of the principal or" or interest on its Municipal Bonds thcn held or owned by the Bond Bank, the department or agency is required to ~vithhold the payment of such money held by it and pay over such money to the Bond Bank lbr the purpose of paying principal of and interest on the bonds of the Bond Bank. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS- State Payments to Governmental Units." Other State agencies may have similar rights to intcrccpt State payments to local governments or to limit the amount intercepted, and no assurance can be given that the Bond Bank’s claim would have priority or that the amount of available State payments would be sufficient. State payments to Governmental Units have been reduced in recent years, and there can be no assurance that additional reductions will not be made, reducing the amount available to the Bond Bank under the intercept remedy. Effect on Reserve Fund. If the Bond Bank is required to draw on the Reserve Fund because of a default by a Governmental Unit, the appropriation provides that an amount equal to the amount drawn from the Reserve Fund is appropriated from the State’s General Fund to the Reserve Fund. There is no guarantee that the Bond Bank will be able to secure furore appropriations within the State’s operating budget for replenishment of the Bond Bank’s reserve accounts, including the Reserve Fund. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS - 2005 General Bond Resolution Reserve Fund" and Appendix F- "INFORMATION CONCERNING THE STATE OF ALASKA- Government Budgets and Appropriations." Adequacy of Revenues No representation or assurance can be given that the Bond Bank will realize revenues in amounts sufficient to make payments when due under the 2005 General Bond Resolution. The realization of furore revenues is dependent upon, among other things, payments to be made by Governmental Units, which are subject to future changes in economic, legal, legislative, regulatory, and other conditions that are unpredictable and cannot be determined at this time. The risk of nonpayment or that the 2020 Series One Bonds will be redeemed prior to maturity is affected by the following factors, among others, which should be considered by prospective investors, along with other information set forth in this Official Statement, in judging the suitability of an investment in the 2020 Series One Bonds. The 2020 Series One Bonds may not be a suitable investment for all prospective purchasers. Prospective purchasers should consult their investment advisors before making any decisions as to the purchase of the 2020 Series One Bonds. The future financial condition of the State and of the Governmental Units could be adversely affected by, among other things: detrimental State or federal legislation; detrimental State or federal regulatory actions; lower investment returns; decreased demand and lower prices for petroleum products; decreased tourism and other retail activity; demographic changes; the occmTence of natural, national, or international calamities, including a national or localized outbreak of a highly coutagious or epidemic disease; security breaches in information technology systems; and tax law changes. There can be no assurance that revenues available to the Bond Bank and the Governmental Units to make payment on the 2020 Series One Bonds will not decrease. Investment Earnhtgs. Ii’~vestment earnings are a principal source of unrestricted General Fnnd revenue for the State. In 2018, the Legislature enacted Seuate Bill 26, which directs the State to appropriate amounts flom the Earnings Reserve of the Alaska Permanent Fund to the General Fund as unrestricted General Fund revenue. The State has forecasted for fiscal year 2020 that of $4.522.3 billion of unrestricted General Fund revenue, $2,969.4 billion, or 66 percent, ",viii be derived fl’om transfers flom the Permanent Fund Earnings Reserve. See Appendix F- "INFORMATION CONCERNING THE STATE OF ALASKA- State Revenues" and "-Government Funds- The Alaska Permanent Fund." The past 3O performance of such investments cannot be used as a basis to predict future results. The results in subsequent fiscal years will depend upon the state of general economic conditions and market results of investments that may be held by the State fl-om tilne to time for its investment purposes. Oil and Gas Revenues. The State’s unrestricted General Fund revenue has historically been generated primarily fi’om petroleum production activities. Approximately 80 percent of fiscal year 2018 unrestricted General Fund revenue was generated from petroleum. The State has forecasted for fiscal year 2020 that of $4,522.3 billion of unrestricted General Fund revenue, $1,098.8 billion, or 24 percent, will be derived fi-om oil and gas revenue. Many factors affect the ability of the petroleum industry to sustain production in the State, including: fi~ture economic conditions; energy prices; technological changes; transportation costs; availability and cost of materials used in processing; availability and affordability of insurance; availability and capability of qualified management and personnel; technical difficulties or supplier interruptions; and seasonality. Energy prices are affected by, among other factors outside the control of the State: the supply and demand for oil and gas and expectations regarding supply and demand; the development of energy production technology, such as hydraulic fiacturing; political conditions in other oil-producing countries, including the possibility of insurgency or war in such areas; economic conditions in the United States and worldwide; governmental regulations and taxation, including regulations on carbon emissions and other greenhouse gases; the impact of energy conservation efforts; the price and availability of alternative fuel sources; weather conditions; the availability of transportation systems and storage; and market uncertainty. The spread of COVID-19 has had a material adverse effect on the demand for and price of petroleum products. As a result of the global decrease in demand for petroleum products, in April 2020 the operator of the Trans-Alaska Pipeline System temporarily reduced the amount of oil flowing through the pipeline by up 75 thousand barrels per day to address storage capacity at the pipeline terminal in Valdez, Alaska. On May 21, 2020 the operator of the Trans-Alaska Pipeline System announced that it would restore the operations of the pipeline to full capacity. It is anticipated the reduction in delnand for and the price of petroleum products will have a negative effect on revenues of the State, and there can be no assurance that oil and gas revenue of the State will not decrease further. See Appendix F- "INFORMATION CONCERNING ]’fiE STATE OF ALASKA - State Revenues - Oil and Gas Revenues." Federal Revenues. The State receives federal revenues for specific purposes that are generally subject to review or audit by grantor agencies. Entitlement to federal revenues is generally conditioned upon compliance with the terms of grant agreements and applicable federal regulations, including the expenditure of assistance for allowable purposes. Any disallowance resulting from a review or audit may become a liability of the State. In addition, pending legal challenges to the Affordable Care Act pose risks to federal revenues received by the State through the Medicare and Medicaid programs. Reductions in federal funding could result in reduced economic activity and increased State costs. There can be no assurance that federal revenues available to the State will not decrease. See Appendix F - "’INFORMATION CONCERNING THE STATE OF ALASKA - State Revenues - Federal Revenue." Infectious Disease Outbreak- COVID-19 COVID-19. The outbreak of COVID-19, a respiratory disease caused by a new strain of coronavirus, which was first detected in China and has since spread to other countries, including the United States (and the State of Alaska), has been declared a pandemic by the World Health Organization. The outbreak of the disease has affected travel, commerce, and financial markets globally. 31 On Marcia 11, 2020, Governor Dunleavy declared a public health disaster emergency under State law as a result of COVID-I 9. On March 13, 2020, President Tromp declared a national emergency due to the COVID-19 outbreak, and on April 9, 2020, President Trump declared that a major disaster exists in the State of Alaska and ordered federal assistance to supplement State, tribal, and local recovery efforts in the areas affected by COVID-19. The Governor issued a series of health mandates, including: (I) suspending and limiting visitation to various State facilities; (2)closing State libraries and museulns; (3)sending students home from residential school programs; (4)postponing or canceling elective procedures at surgical centers and hospitals and by oral health care providers; (5) closing all public and private schools through the end of the school year, subject to each school district’s individual plan to provide distance-delivered educational services to students; (6) requiring all people arriving in the State (residents, workers, and visitors) to self- quarantine for 14 days; (7) effective March 28, 2020, mandating all persons in Alaska except for those engaged in essential health services, public government services, and essential business activities, to remain at their place of residence and to practice social distancing, and closing all non-essential businesses; and (8)prohibiting in-State travel between communities except to support critical infrastructure or for critical personal needs. The Legislature extended all tax returns and payments (other than for oil and gas taxes) that would otherwise be due March 31, 2020, until July 15, 2020. The State will not assess penalties or interest if taxpayers comply with filing and payment requirements by July 15, 2020. Effective April 24, 2020, the Governor issued a health mandate entitled the <’Reopen Alaska Responsibly Plan," modifying a number of previous health mandates and permitting the resumption of certain activities under specified conditions and guidance. This and other health mandates were subsequently rescinded, and as of the date of this Official Statement, only a limited number of health mandates remain in effect, including: (1)permitting people arriving in the State to demonstrate that they have tested negative for COVID-19 within 72 hours of arrival in lieu of self-quarantine; (2)providing shelter for first responders, healthcare workers, and homeless families and individuals who require quarantine and isolation; (3)providing guidance for services provided by certain health care providers; (4) providing protective measures for independent commercial fishing vessels; and (5)increasing the ability of individuals within the State to travel. The COVID-19 outbreak and the associated responses by goverlnner~ts, businesses, and individuals are rapidly evolving. The Bond Bank cannot predict if any of the health mandates will be further modified or extended, or if the Governor will issue additional proclalnations that may adversely impact the finances or operations of the State or of Governmental Units. The United States government and the Federal Reserve Board are taking legislative and regulatory actions and implementing measures to mitigate the bl-oad disruptive effects of the COVID-19 outbreak. As described below, the State has received and expects to receive additional funds through federal legislation, which among other things, provides relief for a portion of the costs incurred by the State in response to COVID-19. The CARES Act established a $150 billion Coronavirus Relief Fund to, among other things, provide financial assistance to states. The State has received its approximately S1.25 billion allocation fi-om the Coronavirus Relief Fund, ~vhich can be used to cover COVID-19 related medical expenses, public heal01 expenses, including among other things public safety measures taken in response to COVID-19, payroll expenses for public safety, public health, healthcarc, human services, and similar employees dedicated to the COVID-I 9 public health emergency, economic support, and other emergency 32 response costs. The CARES Act limits the State’s use of funds from the Coronavirus Relief Fund to COVID-19 expense reimbursement rather than to offset anticipated state tax revenue losses. The State, governmental agencies, and local governments within tile State have received additional grants fi’om the federal government including approximately $87 million in pass-through funding to school districts, $50 million in pass-through funding tbr fisheries reliel; $49 million for rural airports, and $29 million related to Federal Transit Administration pass-through funding, among other grants. In addition, the State is eligible to receive a 6.2 percent increase to its federal medical assistance percentage related to Medicaid, applied retroactively to January 1, 2020, through the end of the calendar quarter in which the COV1D-19 pandemic is determined to be over. The State anticipates that it will receive an additional $40 million to $60 million in federal funding as a result of the percentage increase. Although the federal government is considering additional legislation that may provide additional assistance to the State, Governmental Units, and businesses, including economic stimulus packages and other financial assistance, passage of any such further legislation is uncertain. The continued spread of COVID-19 and the continued impact on social interaction, travel, economies, and financial markets may adversely impact State and Governmental Unit finances and operations and may: (1) continue to adversely affect the ability of the State and Governmental Units to conduct their operations and adversely affect the cost of operations, (2) adversely affect financial markets and consequently adversely affect the returns on and value of the State’s investments, including the Alaska Permanent Fund, and (3) adversely affect the secondary market for and value of tile 2020 Series One Bonds. The full impact of COVID-19 and the scope of any adverse impact on State and Governmental Unit finances and operations cannot be fully determined at this time. Other Factors Affecting the State and Governmental Units Future Economic Conditions. Increased unemployment, adverse economic conditions, volatility in tile tourism industry including the summer cruise ship season, changes in demographics, the cost and availability of energy, the inability to control expenses in periods of inflation, and difficulty in increasing revenues while maintaining a competitive economic environment could all affect the finances and operations of the State and Governmental Units. Cybersecurity R&ks. The State and Governmental Units rely on electronic systems and technologies to conduct their operations. In the past several years, a number of entities have sought to gain unauthorized access to electronic systems of various organizations for the purpose of misappropriating assets or personal, operational, financial, or other sensitive information that can cause operational disruption. These attempts, which are increasing, include highly sophisticated efforts to electronically circumvent security measures as well as more traditional intelligence gathering aimed at obtaining information necessary to gain such access. No assurance can be given that security measures implemented by tile State and Governmental Units ~vill be able to prevent cyber-attacks on their electronic systems, and no assurances can be given that any cyber-attacks, if successful, xvill not have a material adverse effect on their finances or operations. Earthquakes. The State contains many regions of seismic activity, with fl’equent small earthquakes and occasionally moderate and larger earthquakes. A 1964 earthquake with its epicenter in southcentral Alaska measuring 9.2 on the Richter scale was the most powerful earthquake recorded in North American history, and tile second most powertM in world history, causing over 130 deaths. Certain soil types and property located in certain areas of the State could become subject to liqnefaction and could 33 result in landslides following a major earthquake and any afiershocks. Areas of the State also could experience the effects of a tsunami following a major earthquake. Volcanic Eruptions. Tile State contains many active volcanoes. A volcanic eruption could result in landslides and releases of gas and ash that can interfere with air travel, a principal lnode of transportation in the State. Wildfires. Areas of the State have experienced drought conditions and increased wildfire activity. Warmer and drier summer conditions increase the risk of wildfires that may threaten the health, economy, and environment of the State and Governmental Units by creating unhealthy air quality levels, threatening infrastructure, businesses, and residences, destroying natural resources, and damaging wildlife habitat. Climate Change. Climate change poses potential risks to the State and Governmental Units and their finances and operations. Extreme weather events can result in droughts, wildfires, floods, and other natural disasters. Climate change may also affect population migration and shifts in economic activities such as agriculture, fishing, and construction of facilities and roads on permafrost and ice. No assurance can be given that climate change will not have a material adverse effect on the finances and operations of the State and Governmental Units. Ratings The lowering, suspension, or withdrawal of either or both of tile ratings initially assigned to the 2020 Series One Bonds could adversely affect the market price and the market for the 2020 Series One Bonds. See "RATINGS." Limitations on Enforceability of Obligations and Remedies Tile enforceability of the Bond Bank’s obligations under the 2005 General Bond Resolution may be limited by the laws of the State and the United States with respect to bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors’ rights generally and by the availability of equitable remedies. The opinions of Bond Counsel will so state. The practical realization of any rights upon any default will depend upon the exercise of various remedies specified in the 2005 General Bond Resolution. These remedies, in certain respects, may require judicial action, which is often subject to discretion and delay. Under existing law, certain of the remedies specified in tile 2005 General Bond Resolution may not be readily available or may be limited. A court may decide not to order the specific performance of these covenants. Early Redemption Purchasers of 2020 Series One Bonds, including those who purchase 2020 Series One Bonds at a price in excess of their principal amount or xvho hold such a 2020 Series One Bond trading at a price in excess of par, should consider the fact that the 2020 Series One Bonds are subject to redemption at a price equal to their principal amount plus accrued interest in the event such 2020 Series One Bonds are redeemed prior to maturity. See "DESCRIPTION OF THE 2020 SERIES ONE BONDS - Optional Redemption" and "- Mandatory Redemption." Federal Income Tax Considerations The exemption of interest on tile 2020 Series One Bonds from federal income taxes is dependent upon continuing compliance by the Bond Bank and the Governmental Units with the requirements of the 34 Code. If there is a failure to continuously comply with the covenants of tile Code, interest on the 2020 Series One Bonds could become includible for federal income tax purposes in the gross income of tile owners thereof, retroactive to the date of issuance of the 2020 Series One Bonds. If interest on the 2020 Series One Bonds becomes so includible in the owners’ gross incomes, the effect will be to reduce the yield on an owner’s 2020 Series One Bonds as a result of the federal and, in certain cases, state and local, incolne tax liability incurred in connection with the receipt of interest on tile 2020 Series One Bonds. There is no provision for any adjustment to the interest rate borne by the 2020 Series One Bonds in the event of any such loss of tax-exempt stares, nor is any provision made for the payment of any penalties or premium in such event. As a result, the owners of the 2020 Series One Bonds may be forced to bear the adverse economic consequences of any such loss of tax-exempt status and may not have adequate remedies against the Bond Bank to recover any losses or damages so sustained. Secondary Market and Prices It has been tile practice of the Underwriters to maintain a secondary market in municipal securities they sell, and the Underwriters currently intend to engage in secondary market trading of the 2020 Series One Bonds, subject to applicable securities laws. The Undm~vriters, however, are not obligated to engage in secondary trading or to repurchase any of the 2020 Series One Bonds at the request of the owners thereof. No assurance can be given that a market will exist for the resale of the 2020 Series One Bonds. Because of general market conditions or because of adverse history or economic prospects connected with a particular issue or issuer, secondary marketing activity in connection with a particular issue may be suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then-prevailing circumstances. Such prices could be substantially different from the original purchase price. There can be no guarantee that there will be a secondary market for the 2020 Series One Bonds, or if a secondary market exists, that the 2020 Series One Bonds can be sold for any particular price. LITIGATION As a condition to tile delivery of the 2020 Series One Bonds, tile Alaska Department of Law, as counsel to the Bond Bank, is required to furnish a certificate to the effect that as of tile date of delivery, there is no litigation pending against the Bond Bank in any State court to restrain or enjoin the issuance or delivery by the Bond Bank of the 2020 Series One Bonds or contesting the validity or enforceability of tile 2020 Series One Bonds, the 2005 General Bond Resolution, or the pledge made under the Bond Resolution. TAX MATTERS In the opinion of Orrick, Herrington & Sutcliffe LLP ("Bond Counsel"), based upon an analysis of existing laws, regulations, rulings, and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the 2020 Series One Bonds is excluded fi’om gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the "Internal Revenue Code"). In the opinion of Bond Counsel, interest on the 2020 Series One Bonds is not a specific preference item for purposes of the federal alternative minimum tax. Bond Counsel is also of the opinion, based on existing laws of the State of Alaska, that interest on tile 2020 Series One Bonds is exempt fi’om taxation by the State of Alaska except for transfer, estate, and inheritance taxes. A complete copy of the proposed form of opinion of Bond Counsel is included as Appendix A. 35 To the extent the issue price of any maturity of the 2020 Series One Bonds is less than the amount to be paid at maturity of such 2020 Series One Bonds (excluding amounts stated to be interest and payable at least annually over the term of such 2020 Series One Bonds), the difference constitutes "original issue discount," the accrual of which, to the extent properly allocable to each Beneficial Owner thereof; is treated as interest on the 2020 Series One Bonds which is excluded fiom gross income for federal income tax purposes. For this purpose, the issue price of a particular maturity of the 2020 Series One Bonds is the first price at which a substantial amount of such maturity of the 2020 Series One Bonds is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents, or wholesalers). The original issue discount with respect to any maturity of the 2020 Series One Bonds accrues daily over the term to maturity of such 2020 Series One Bonds on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such 2020 Series One Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such 2020 Series One Bonds. Beneficial Owners of the 2020 Series One Bonds should consult their o~vn tax advisors with respect to the tax consequences of ownership of 2020 Series One Bonds with original issue discount, including the treatment of Beneficial Owners who do not purchase such Bonds in the original offering to the public at the first price at which a substantial amount of such 2020 Series One Bonds is sold to the public. 2020 Series One Bonds purchased, whether at original issuance or otherwise, for an amount higher than their principal amount payable at maturity (or, in some cases, at their earlier call date) ("Premium Bonds") will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of bonds, like the Premium Bonds, the interest on which is excluded from gross income for federal income tax purposes. However, the amount of tax-exempt interest received, and a Beneficial Owner’s basis in a Premium Bond, will be reduced by the amount of amortizable bond premium properly allocable to such Beneficial Owner. Beneficial Owners of Premium Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances. The Code imposes various restrictions, conditions, and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the 2020 Series One Bonds. The Bond Bank and each Governmental Unit have made certain representations and covenanted to comply with certain restrictions, conditions, and requirements designed to ensure that interest on the 2020 Series One Bonds will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the 2020 Series One Bonds being included in gross income for federal income tax purposes, possibly fi’om the date of original issuance of the 2020 Series One Bonds. The opinion of Bond Counsel assumes the accuracy of these representations and compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel’s attention after the date of issuance of the 2020 Series One Bonds may adversely affect the value o1; or the tax status of interest on. the 2020 Series One Bonds. Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events or matters. Although Bond Counsel is of the opinion that interest on the 2020 Series One Bonds is excluded from gross income for federal income tax purposes, the ownership or disposition of, or the accrual or receipt of amounts treated as interest on, the 2020 Series One Bonds may otherwise affect a Beneficial Owner’s federal, state or local tax liability. The nature and extent of these other tax consequences depends upon the particular tax status of the Beneficial Owner or the Beneficial Owner’s other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences. 36 Current and future legislative proposals, if enacted into law, clarification of the Internal Revenue Code, or court decisions may cause interest on the 2020 Series One Bonds to be subject, directly or indirectly, in whole or in part, to federal income taxation or to be subject to or exempted fl-om state income taxation, or otherwise prevent Beneficial Owners from realizing the lull current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals or clarification of the Internal Revenue Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the 2020 Series One Bonds. Prospective purchasers of the 2020 Series One Bonds should consult their own tax advisors regarding the potential impact of any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel is expected to express no opinion. The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel’s judgment as to the proper treatment of the Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service ("IRS") or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the Bond Bank or the Governmental Units or about the effect of future changes in the Internal Revenue Code, the applicable regulations, the interpretation thereof, or the enforcement thereof by the IRS. The Bond Bank and the Governmental Units have covenanted, however, to comply with the requirements of the Internal Revenue Code. Bond Counsel’s engagement with respect to the 2020 Series One Bonds ends with the issuance of the 2020 Series One Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the Bond Bank, the Governmental Units, or the Beneficial Owners regarding the tax-exempt status of interest on the 2020 Series One Bonds in the event of an audit examination by the IRS. Under current procedures, parties other than the Bond Bank, the Governmental Units, and their appointed counsel, including the Beneficial Owners, would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of tax-exempt bonds is difficult, obtaining an independent review of IRS positions with which the Bond Bank or the Governmental Units legitimately disagree may not be practicable. Any action of the IRS, including but not limited to selection of the 2020 Series One Bonds for audit, or the course or result of such audit, or an audit of bonds presenting similar tax issues may affect the market price for, or the marketability of, the 2020 Series One Bonds, and may cause the Bond Bank, the Governmental Units, or the Beneficial Owners to incur significant expense. CERTAIN LEGAL MATTERS Bond Bank. Legal matters incident to the authorization, issuance, and sale by the Bond Bank of the 2020 Series One Bonds are subject to the approving legal opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Bond Bank. The proposed form of the opinion of Bond Counsel is included as Appendix A. Governmental Units. Certain legal matters will be passed upon for (!) the Fairbanks North Star Borough, the City of Ketchikan, the Ketchikan Gateway Borough, the Petersburg Borough, and the City and Borough of Sitka by their bond counsel, Stradling Yocca Carlson & Rauth, P.C., Seattle, Washington; (2) the City and Borough of Juneau by its bond counsel. K&I_ Gates LLP, Seattle, Washington; (3) the City of Kenai, the Northwest Arctic Borough, and the City of Soldotna by their bond counsel, Birch Horton Bittner & Cherot, Anchorage, Alaska; (4)the Kenai Peninsula Borough by its bond counsel, Jermain, Dunnagan & Owens P.C., Anchorage, Alaska: and (5) the City ol" King Cove. the Kodiak Island Borough, and the City of Unalaska by their bond counsel. Foster Garvey PC, Seattle, Washingtom. 37 Underwriters. Certain legal matters will be passed upon for the Underwriters by their special counsel, Foster Garvey PC, Seattle, Washington. Any opinion of such counsel will be limited in scope and delivered only to the Underwriters, and may not be relied upon by investors. Relationships Among Parties. The firm of Foster Garvey PC is representing the Underwriters and the Governmental Units of the City of" King Cove, the Kodiak Island Borough, and the City of Unalaska in this transaction. From time to time, the firms of Orrick, Herrington & Sutcliffe LLP, K&L Gates LLP, Stradling Yocca Carlson & Rauth, P.C., and Jermain, Dunnagan & Owens P.C. represent the Underwriters in transactions unrelated to the issuance of the 2020 Series One Bonds. UNDERWRITING The 2020 Series One Bonds are to be purchased from the Bond Bank at an aggregate purchase price of $!16,377,832.82 (the principal amount of the 2020 Series One Bonds, plus premium of $18,396,056.70, less Underwriters’ discount of $328,223.88), subject to the terms of a bond purchase contract (the "Purchase Contract") bet~veen the Bond Bank and RBC Capital Markets, LLC, acting on behalf of itself and as representative of BofA Securities, Inc. and Wells Fargo Bank, National Association (collectively, the "Underwriters"). The Purchase Contract provides that the Underwriters will purchase all of the 2020 Series One Bonds if any are purchased and that the obligation of the Underwriters to accept and pay for the 2020 Series One Bonds is subject to certain terms and conditions set forth therein, including the approval by counsel of certain legal matters. The initial offering prices or prices corresponding to the yields set forth on the inside cover of this Official Statement may be changed from time to time by the Underwriters without prior notice to any person. The Under~vriters may offer and sell the 2020 Series One Bonds to certain dealers, unit investment trusts, or money market funds at prices lower than the initial offering prices or prices corresponding to the yields set forth on the inside cover of this Official Statement. The Underwriters and their affiliates are frill-service financial institutions engaged in various activities that may include securities trading, commercial and investment banking, financial advisory, brokerage, and asset management. In the ordinary course of business, the Underwriters and their affiliates may actively trade debt and, if applicable, equity securities (or related derivative securities) and provide financial instruments (which may include bank loans, credit support, or interest rate swaps). The Underwriters and their affiliates may engage in transactions for their own accounts involving the securities and instruments made the subject of this securities offering or other offerings of the Bond Bank or the Governmental Units. The Underwriters and their affiliates may make a market in credit default swaps with respect to municipal securities in the future. The Underwriters and their affiliates may also co~nmunicate independent investment recommendations, market color, or trading ideas and publish independent research views in respect of this securities offering or other offerings of the Bond Bank and the Governmental Units. BofA Securities, Inc., an Underwriter of the 2020 Series One Bonds, has entered into a distribution agreement with its affiliate Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"). As part of this arrangement, BofA Securities, Inc. may distribute securities to MLPF&S, ~vhich may in turn distribute such securities to investors through the financial advisor network of MLPF&S. As part of this arrangement, BofA Securities, Inc. may compensate MLPF&S as a dealer for their selling efforts with respect tO the 2020 Series One Bonds. Wells Fargo Securities is the trade name l’or certain securities-related capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Bank, National Association, which conducts its municipal securities sales, trading and underwriting 38 operations through the Wells Fargo Bank, NA Municipal Finance Group, a separately identifiable department of Wells Fargo Bank, National Association, registered with the Securities and Exchange Commission as a municipal securities dealer pursuant to Section 15B(a) of the Securities Exchange Act of 1934. Wells Fargo Bank, National Association, acting through its Municipal Finance Group ("WFBNA"), has entered into an agreement (the "WFA Distribution Agreement") with its affiliate, Wells Fargo Clearing Services, LLC (which uses the trade name "Wells Fargo Advisors") ("WFA") tot- the distribution of certain municipal securities offerings, including the 2020 Series One Bonds. Pursuant to the WFA Distribution Agreement, WFBNA will share a portion of its underwriting compensation with respect to the 2020 Series One Bonds with WFA. WFBNA has also entered into an agreement (the "WFSLLC Distribution Agreement") with its affiliate Wells Fargo Securities, LLC ("WFSLLC"), for the distribution of municipal securities offerings, including the 2020 Series One Bonds. Pursuant to the WFSLLC Distribution Agreement, WFBNA pays a portion of WFSLLC’s expenses based on its municipal securities transactions. WFBNA, WFSLLC and WFA are each wholly-owned subsidiaries of Wells Fargo & Company. MUNICIPAL ADVISOR The Bond Bank has retained PFM Financial Advisors LLC ("PFM") to serve as municipal advisor to provide certain advice to the Bond Bank with respect to the issuance of the 2020 Series One Bonds. PFM is not obligated to undertake, and has not undertaken, either to make an independent verification of or to assume responsibility for, the accuracy, completeness, or fairness of the information contained in this Official Statement. PFM is an independent financial advisory firm registered with the Securities and Exchange Commission and is not engaged in the business of underwriting, trading, or distributing municipal securities or other public securities. FINANCIAL STATEMENTS The financial statements of the Bond Bank for the fiscal year ended June 30, 2019, included in this Official Statement as Appendix D, have been audited by BDO USA, LLP, independent certified public accountants, to the extent and for the periods indicated in their report thereon. Such financial statements have been included in reliance upon the report of BDO USA, LLP. The Bond Bank has not requested BDO USA, LLP to provide xvritten consent for inclusion of the financial statements in this Official Statement. RATINGS Moody’s Investors Service, Inc. ("Moody’s"), and S&P Global Ratings ("S&P") have assigned ratings of "AI" and "A+," respectively, to the 2020 Series One Bonds. The Bond Bank has not retained Fitch Ratings, Inc. ("Fitch") to rate the 2020 Series One Bonds. Fitch has rated other series of Bonds issued under the 2005 General Bond Resolution since 2014. Such ratings reflect only the views of such organizations, and any desired explanation of the significance of such ratings should be obtained fiom the rating agency furnishing the same, at the following addresses: Moody’s, 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, (212) 553-0300: S&P, 55 Water Street, New York, New York 10041, (212) 438-1000. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies, and assumptions of its own. There can be no assurance that such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agencies if; in the judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the ~narket price and marketability of the 2020 Series One Bonds. 39 CONTINUING DISCLOSURE UNDERTAKINGS Bond Bank Continuing Disclosure Undertaking The Bond Bank has covenanted for the benefit of the holders and Beneficial Owners of the 2020 Series One Bonds to provide, or to cause to be provided, certain historical financial and operating infon-nation not later than 210 days after the end of each Fiscal Year (currently June 30) in which any 2020 Series One Bonds are outstanding, commencing with its report for the Fiscal Year ended June 30, 2020 (each an "Annual Report"). The Bond Bank has also covenanted to not later than 120 days after the end of each Fiscal Year notify each Governmental Unit that had, as of the end of such Fiscal Year, an amount of its Municipal Bonds equal to or greater than 20 percent of the outstanding principal amount of the Municipal Bonds held by the Bond Bank under the 2005 General Bond Resolution, of such Governmental Unit’s continuing disclosure undertaking responsibility. In addition, the Bond Bank has covenanted to provide notices of the occurrence of certain enumerated events. The Annual Reports are required to be tiled by the Bond Bank with the MSRB through its EMMA system. The specific nature of information to be contained in the Annual Report and the enumerated events of which the Bond Bank is to give notice are set forth in the proposed form of the Continuing Disclosure Certificate of the Bond Bank included as Appendix G. These covenants have been made in order to assist the Underwriter in complying with paragraph (b)(5) of Securities and Exchange Commission Rule 15c2-12 ("Rule 15c2-12"). Governmental Unit Continuing Disclosure Undertakings Each of the Governmental Units from which the Bond Bank is purchasing Municipal Bonds with proceeds of the 2020 Series One Bonds (the "2020 Series One Governmental Units") has covenanted in its Loan Agreement that if its Municipal Bonds constitute 20 percent or more of the outstanding principal amount of the Municipal Bonds held by the Bond Bank under the 2005 General Bond Resolution, such 2020 Series One Governmental Unit will execute a continuing disclosure agreement prepared by the Bond Bank for purposes of complying with Rule 15c2-12. There are currently no Governmental Units that reach this 20 percent threshold. In connection with certain previous Bonds issued under the 2005 Master Resolution, each applicable Governmental Unit was required to covenant in its Loan Agreement to execute a continuing disclosure certificate if such Governmental Unit’s Municipal Bonds constituted 10 percent or more of the outstanding principal amount of the Municipal Bonds held by the Bond Bank under the 2005 General Bond Resolution. As described above, the 10 percent threshold described in the previous sentence has been replaced with a 20 percent threshold for the 2020 Series One Governmental Units. The Bond Bank expects to retain the 20 percent threshold in connection with future Bonds issued under the 2005 Master Resolution. Compliance with Prior Continuing Disclosure Undertakings Bonds Issued Umh, r the 2005 General Bond Resolution. The Bond Bank previously has entered into continuing disclosure undertakings under Rule 15c2-12 in connection with Bonds issued under the 2005 General Bond Resohltion. The Bond Bank did not retain Moody’s to rate bonds issued under the 2005 General Bond Resolution from February 20. 2014, through the date of this Official Statement. During that period, Moody’s did rate other bonds ol’the State and on February 29, 2016, when it reduced its rating on the State’s general obligation bor~ds, moody’s also reduced its rating on all of the State’s moral obligation debt. This rating change affected bonds issued by the Bond Bank through February 20, 2014. Notices of 4O Moody’s downgrades were linked to the CUSIP numbers for the State’s bonds and other obligations but were not linked to the CUSIP numbers for the Bond Bank’s bonds. The Bond Bank has subsequently linked the notice to the applicable Bond Bank CUSIP numbers. Moody’s has been engaged to rate the 2020 Series One Bonds. For a discussion of the ratings assigned to the 2020 Series One Bonds by Moody’s and S&P, see "RATINGS." Other Bonds Issued by the Bond Bank. The Bond Bank previously entered into continuing disclosure undertakings lbr bonds issued under its 2010 Master Bond Resolution. The Bond Bank subsequently discovered it had not filed certain event notices in connection with rating downgrades of insurers and underlying ratings upgrades. The Bond Bank subsequently filed event notices with the MSRB. The Bond Bank discovered that certain annual information relating to the Bond Bank and the borrower under the 2010 Master Bond Resolution had not been filed in a timely manner. This deficiency was cured and such information was filed with the MSRB. General The Bond Bank has developed procedures to help ensure its compliance with its continuing disclosure obligations in all material respects. Although there have been instances of technical deficiencies with its previous undertakings, tile Bond Bank has established appropriate written policies and procedures, including trainings and identifying a designated point of contact to help facilitate future compliance with Rule 15c2-12. Governmental Units. The Bond Bank has been notified that certain Govemmenta! Units that previously entered into continuing disclosure certificates have failed to fully comply with their continuing disclosure obligations. The Bond Bank has not verified such information. DEFINITIONS The following terms are used in this Official Statement with the following meanings. See also the definitions in Article I of the 2005 General Bond Resolution in Appendix E. "Act" -- The Alaska Municipal Bond Bank Authority Act, codified as Chapter 85, Title 44, of the Alaska Statutes, as amended. "Bond Bank"-- Tile Alaska Municipal Bond Bank, a public corporation and instrumentality of the State of Alaska within the Deparmaent of Revenue but with legal existence independent of and separate from the State. "Bonds" -- Bonds issued by the Bond Bank under the 2005 General Bond Resolution pursuant to a Series Resolution. These include "Loan Obligations" and "Reserve Fund Obligations" as defined below. "Code" -- Internal Revenue Code of 1986 and the regulations thereunder, as amended. "Credit Enhancement" -- A letter of credit, a line of credit, a credit facility, a surety bond, bond insurance, or any other instrument or arrangement obtained in connection with tile issuance of a Series of Bonds to further secure the payment of the Bonds of such Series or to satisfy the Resmwe Fund Req uirement. "Credit Enhancement Agency" -- Any bank or other institution that provides Credit Enhancement. 41 "Debt Service Fund"-- A fired established by the 2005 General Bond Resolution to be maintained and held by the Trustee. The 2005 General Bond Resolution defines and provides that the "Interest Account," "Principal Account," and "Redemption Account" are maintained within the Debt Service Fund. "Fees and Charges" -- All fees and charges authorized to be charged by the Bond Bank pursuant to Section 44.85.080(8), (15), and (16) of the Act and charged by the Bank to Governmental Units pursuant to the terms and provisions of the Loan Agreements. "Governmental Unit" -- A municipality or such other entity from which the Bond Bank is authorized by law to purchase its revenue bonds, general obligation bonds, notes, or other forms of indebtedness and which othepa, ise satisfies conditions found in the 2005 General Bond Resolution and in the Loan Agreement. "Loan Agreement" -- An agreement, and any amendments thereto, entered into between the Bond Bank and a Govermnental Unit setting forth the terms and conditions of a loan. "Loan Obligations" -- The amount of Bonds and the Bonds themselves issued by the Bond Bank for the purchase of Municipal Bonds of a Governmental Unit. "Municipal Bonds" -- General obligation bonds, revenue bonds, notes, or other evidence of debt issued by any Governmental Unit, as defined in the Act, which have been acquired by the Bond Bank as evidence of a loan to the Governmental Unit pursuant to the Act. "Municipal Bonds Payment" -- The amounts paid or required to be paid, from time to time, for principal and interest by a Governmental Unit to the Bond Bank on the Governmental Unit’s Municipal Bonds. "Notes" -- Any obligations referred to in the 2005 General Bond Resolution issued by the Bond Bank other than Bonds. "Operating Fund" -- A ff~nd established by the 2005 General Bond Resolution. This fund is not held by the Trustee and money therein is not pledged as security for Bonds. "Outstanding" -- When used ,vith reference to Bonds, as of any date, Bonds theretoforc or then being authenticated and delivered under the provisions of the 2005 General Bond Resolution, other than Bonds owned or held by or for the account of the Bond Bank except: (i) any Bonds cancelled by the Bond Bank or the Trustee at or prior to such date, (ii) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds have been authenticated and delivered pursuant to the 2005 General Bond Resolution, and (iii)Bonds deemed to have been paid as provided in the 2005 General Bond Resolution. "Reserve Fund" -- The reserve account established by the 2005 General Bond Resolution and held by the Trustee pursuant to the provisions of the 2005 General Bond Resolution. ’~Reserve Fund Obligations" -- Bonds issued by the Bond Bank to obtain funds to be deposited in the Reserve Fund. "Reserve Fund Requirement" -- The amount required to be on deposit in the 2005 General Bond Resolution Reserve Fund is the least of the following: (i) 10 percent of the initial principal amount of each Series of Bonds then Outstanding; (ii) maximum annual principal and interest requirements on all 42 Bonds then Outstanding; (iii) 125 percent of average annual principal and interest requirements on all Bonds then Outstanding; or (iv)such lower amount as may be required by law. The Reserve Fund Requirement lnay be satisfied entirely, or in part, by Credit Enhancement; provided, however, any Credit Enhancement satisfying all or any part of the Reserve Fund Requirement after the initial issuance of Bonds or issued in substitution for any prior Credit Enhancement previously issued will not, by itself; cause a withdrawal or downward revision of the ratings maintained by any Rating Agency with respect to the Bonds. "Required Debt Service Reserve" -- As of any date of calculation, the amount required to be on deposit in the Reserve Fund which amount is required to be at least equal to the Reserve Fund Requirement. "Series Resolution" -- A resolution of the Bond Bank authorizing the issuance of a Series of Bonds in accordance with the terms of the 2005 General Bond Resolution. "2005 General Bond Resolution" -- The Bond Bank’s General Obligation Bond Resolution adopted July 13, 2005, as amended on August 19, 2009. The amendments adopted in the 2013 First Supplemental Resolution will be effective after all Bonds outstanding on February 19, 2013, are no longer are outstanding. See the forms of the 2005 General Bond Resolution and the 2013 First Supplemental Resolution in Appendix E. MISCELLANEOUS The summaries or descriptions of provisions in the 2005 General Bond Resolution and all references to other materials not purporting to be quoted in fi~ll are only brief outlines of certain provisions thereof and do not constitute complete statements of such documents or provisions, and reference is hereby made to the complete documents and materials, copies of which will be furnished by the Bond Bank on request. The 2005 General Bond Resolution is included as Appendix E. Any statements made in this Official Statement indicated to involve matters of opinion or estimates are represented as opinions or estimates in good faith. No assurance can be given, however, that the facts will materialize as so opined or estimated. OFFICIAL STATEMENT The Bond Bank has authorized the execution and distribution of this Official Statement. ALASKA MUNICIPAL BOND BANK By: /s/Deven J. Mitchell Executive Director 43 [This page intentionally left blank.] APPENDIX A PROPOSED FORM OF OPINION OF BOND COUNSEL ,2020 Alaska Municipal Bond Bank Juneau, Alaska Alaska Municipal Bond Bank General Obligation and Refunding Bonds, 2020 Series One (Final Opinion) Ladies and Gentlemen: We have acted as bond counsel to the Alaska Municipal Bond Bank (the "Bond Bank") in connection with the issuance of $98,310,000 aggregate principal amount of Alaska Municipal Bond Bank General Obligation and Refunding Bonds, 2020 Series One (the "Bonds"), issued pursuant to the General Obligation Bond Resolution, adopted by the Board of Directors (the "Board") of the Bond Bank on July 13, 2005 (as amended, the "2005 General Bond Resolution"), as supplemented by Resolution No. 2020-01, adopted by the Board on April 29, 2020 (the "2020 Series One Resolution" and together ~vith the 2005 General Bond Resolution, the "Bond Resolution"). The Bond Bank has appointed The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee") under the Bond Resolution. The Bonds are issued for the stated purposes of: (i) making a loan to the Kodiak Island Borough, Alaska (the "Kodiak Island Borough"), a Governmental Unit, to finance a portion of the capital costs related to the Kodiak High School; (ii)making a loan to the Fairbanks North Star Borough, Alaska (the "Fairbanks North Star Borough"), a Governmental Unit, to finance a portion of the costs related to the refunding of bonds issued by Fairbanks North Star Borough; (iii) making a loan to the City of Ketchikan, Alaska (the "City of Ketchikan"), a Governmental Unit, to finance a portion of the capital costs related to an undersea fiber optic telecommunications cable; (iv) making a loan to the Ketchikan Gateway Borough, Alaska (the "Ketchikan Gateway Borough"), to finance a portion of the costs of refunding bonds previously issued by the Bond Bank; (v) making a loan to the City of King Cove, Alaska (the "City of King Cove"), to finance a portion of the capital costs related to certain hydro-electric facilities; (vi) making loans to the City of Ketchikan, the Ketchikan Gateway Borough, the City of King Cove and nine other Governmental Units to refund Municipal Bonds previously issued to the Bond Bank by the Governmental Units to finance or refinance projects and to refund corresponding portions of bonds previously issued by the Bond Bank; and (vii) paying costs of issuing the Bonds. In connection with such loans, the Bond Bank is purchasing Municipal Bonds issued by the Governmental Units to secure payments to be made pursuant to the Loan Agreements and Amendatory Loan Agreements mentioned below. Capitalized ten33s not otherwise defined herein shall have the meanings ascribed thereto in the Bond Resolution. In such connection, we have reviewed the Bond Resolution; the Loan Agreements between the Bond Bank and each of the City of Ketchikan, the Fairbanks North Star Borough, the Kodiak Island Borough, the Ketchikan Gateway Borough and the City of King Cove, the 2020 Amendatory Loan Agreements, between the Bond Bank and each of the Northwest Arctic Borough, Alaska, the Petersburg Borough, Alaska, the City of Unalaska, Alaska, the City of Kenai, Alaska. the City and Borough of Juneau, Alaska, the City of King Cove, Alaska, the City and Borough of Sitka, Alaska, the Kenai Peninsula Borough, Alaska, the City of Ketchikan, Alaska, the Ketchikan Gateway Borough, Alaska and the City of Soldotna, Alaska; the Tax Certificate, dated the date hereof, of the Bond Bank (the "Tax Certificate"); authorizing ordinances, resolutions and tax certificates of the Governmental Units; a Certificate of the State of Alaska Department of Law, as counsel to the Bond Bank; opinions of counsel to the Governmental Units; certificates of the Bond Bank, the Trustee, the Governmental Units and others; and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein. The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after original delivew of the Bonds on the date hereof. We have not undertaken to determine, or to infon-n any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after original delivery of the Bonds on the date hereof. Accordingly, this letter speaks only as of its date and is not intended to, and may not, be relied upon or otherwise used in connection with any such actions, events or matters. We disclaim any obligation to update this letter. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the Bond Bank. We have assumed, without undertaking to verif~’, the accuracy of the factual matters represented, warranted or certified in the documents and of the legal conclusions contained in the opinions, referred to in the second paragraph hereof. Furthermore, we have assumed compliance with all covenants and agreements contained in the Bond Resolution, each of the Loan Agreements, the 2020 Amendatory Loan Agreements and the Tax Certificate and in each of the tax certificates of the Governmental Units, including (without limitation) covenants and agreements compliance with which is necessary to assure that future actions, omissions or events will not cause interest on the Bonds to be included in gross incolne for federal income tax purposes. We call attention to the fact that the rights and obligations ullder the Bonds, the Bond Resolution, the Loan Agreements, the Amendatory Loan Agreements, the Municipal Bonds and the Tax Certificate and their enforceability may be subject to bankruptcy, insolvency, receivership, reorganization, anangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against public corporations of the State of Alaska. We express no opinion with respect to any indemnification, contribution, liquidated damages, penalty (including any remedy deemed to constitute or having the effect of a penalty), right of set-ofl; arbitration, choice of law, choice of forum, choice of venue, non-exclusivity of remedies, waiver or severability provisions contained in the foregoing documents, nor do we express any opinion with respect to the state or quality of title to or interest in any of the assets described in or as subject to the lien of the Bond Resolution, the Loan Agreements, the Amendatory Loan Agreements or the Municipal Bonds or agreements related thereto or the accuracy or sufficiency of the description contained therein of, or the remedies available to enforce liens on, any such assets. Our services did not include financial or other non-legal advice. Finally, we undertake no responsibility for the accuracy, completeness or fairness of the Official Statement or other offering material relating to the Bonds and express no opinion with respect thereto. Based on and subject to the ~tbregoing, and in reliance thereon, as of the date hereol; we are of the following opinions: 1. The Bonds constitute the valid and binding general obligations of the Bond Bank. 2. The Bond Resolution has been duly adopted by, and constitutes the valid and binding obligation of, the Bond Bank. To secure the payment of the principal of and interest on the Bonds, the Bond Resolution creates a valid pledge of the Municipal Bonds, all Municipal Bonds Payments, the investments thereof and the proceeds of such investments, and any other amounts held by the Trustee in any fund or account established pursuant to the Bond Resolution, except the Rebate Fund, subject to the provisions of the Bond Resolution permitting the application thereof for the purposes and on the terms and conditions set forth in the Bond Resolution. 3. Interest on the Bonds is excluded from gross incolne for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986. Interest on the Bonds is not a specific preference item for purposes of the federal alternative minimum tax. Interest on the Bonds is exempt from taxation by the State of Alaska except for transfer, inheritance and estate taxes. We express no opinion regarding other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds. Faithfully yours, ORRICK, HERRINGTON & SUTCL1FFE LLP per A-3 [This page intentionally left blank.] APPENDIX B STATE PAYMENTS TO GOVERNMENTAL UNITS The State of Alaska (the "State") disburses to Alaskan cities and boroughs funds that may be available for uses other than paying municipal bond debt selwice. In the event of default by a Governmental Unit with respect to a Loan Agreement, the Act requires that such funds held in custody by tile State prior to disbursement be paid over to the Bond Bank. Tile State, however, may at any time reduce or terminate the disbursements or programs under which they are made. See Appendix F- "INFORMATION CONCERNING THE STATE OF ALASKA." In addition, other State agencies have similar rights to intercept State payments to Govermnental Units. No assurance can be given that the Bond Bank’s claim would have priority over any other eligible State agency’s claim. Four of the departments of the State that disburse money to Governmental Units are as follows: (1) Department of Education and Early Development. The Department of Education and Early Development ("DEED") disburses State aid for educational purposes primarily through the school debt reimbursement, foundation funding, and pupil transportation progralns, in addition to funding for boarding homes, residential boarding, youth in detention, special schools, and the Alaska Challenge Youth Academy programs. The school debt reimbursement program provides a system under which the State, subject to annual appropriation by the Legislature, reimburses municipalities that operate school districts for certain costs of school construction. State reimbursement applies to debt service on locally issued general obligation school bonds. Tinting of reimbursements is detemained by municipalities’ debt service payments, and is made throughout the year. This program provides that subject to statutory and regulatory conditions, the State will reimburse municipalities for a pre-determined percentage of debt service incurred for such bonds, depending on when such bonds were issued and the project components. The State may appropriate less than the full amount to which the municipalities are entitled. When appropriations are less than 100 percent of the entitlement, funds have been allocated pro rata among the eligible school districts. See Appendix F- "INFORMATION CONCERNING THE STATE OF ALASKA- Government Budgets and Appropriations" and "- Public Debt and Other Obligations of the State." Under the foundation funding program, the State aids local school districts in paying operating expenses under the State "K-12 foundation" funding, which provides education-related aid for operating costs associated with qualified K-12 schools as well as programs such as the handicapped facilities and nutrition programs. The program provides for monthly distributions to school districts. Under the pupil transportation program, the State aids local school districts for pupil transportation. The program provides for monthly distributions to school districts. Under other programs, the State has provided one-time grant funds. (2) Department of Revenue. The Department of Revenue disburses shares of various State laxes collected by the Department of Revenue within tile jurisdiction of certain Governmental Units, including aviation fuel, commercial passenger vessel, electric, telephone, liquor, and fisheries resources landed and business taxes. Payments are distributed both semi-annually in January and July and annually in October depending upon the type of tax. (3) Dcpartlnent of Commerce. Community and Economic Development. Tile Department of Comnaerce, Community and Economic Development ("DCCED") administers a payment in lieu of taxes program under which the federal government pays a lee for use of land. The payments received fiom the federal goverrn-ner~t are passed through the State to certain Governlnental Units. Distributions occur annually in July. The State also disburses money to certain Governmental Units through DCCED’s Capital Matching Grants program to provide assistance in financing capital projects. Distributions are made throughout the year as approved projects are constructed. Additionally, the State Revenue Sharing program provides an annual transfer to certain Governmental Units based on population. The revenue sharing transfers occur in the first quarter of the fiscal year. (4) Department of Corrections. The Department of Corrections transfers monthly amounts to pay operational expenses of local communities that house prisoners in municipal-owned thcilities. In addition to the four sources listed above, the State disburses to Governmental Units funds that are not available for intercept by the Bond Bank. A reduction in the amount of such funds and the distribution of such funds, such as State assistance to Governmental Units to address pension liabilities, also could have a negative impact on the finances of Governmental Units. The table included below sets forth the amount of State payments to Governmental Units that have borrowed from the Bond Bank subject to intercept under the Act as well as the fiscal year 2019 Loan Obligations and estimated coverage provided by those State payrnents. 13-2 Alaska Municipal Bond Bank Capability to Intercept Funds F’V 2021) Educalion :\clive 51atchiug FY 2020 Support Grants as of Cammunit.v Jails Revenue Sharing transferred iu 12 April 8, 2020, will transferred in 12 FY 2020 level monlhly be drawn do~vn level monthly disbursed :11 one installments as projects payments during time by October during fiscal year complete (current fiscal year uf l~scal year (current year and past year (current year F~,’ 2021! (current year annual capital grant annual PILT annual Tutal Intercept apprapriation) appropriations)~ appropriation) transfers appropriation) Capability ,,\leulians I!asI !3orough $ 1,977.969 $ 319,103 $ 4,695,101 $ 1,456,891 $ $ $ 316.424 $ 8,765,488 Municipalily of Anchorage 1.391,488 19,982,499 322.94 I,t90 78,267,828 4,557,777 427.140.782 [:airbanks Nol~h Slar I)orou~h ~ :~ 420,441 4,276,714 I ! 0.565,543 9,493,104 1,370,831 126.126,633 [ laines P, ovou.~h 494.297 436,967 2.292.445 1,942,976 215,954 441,698 5,824.337 (’ill; & l:loro:t~h ol’,luneau ~:~ 5.774.854 3,471,301 37.248.902 921.065 831,662 48.247.784 Kcnai Pcninsuln I’Iorough ~> 1.351.691 1,373,455 79,297.077 722,323 1,269.916 84,014,462 Kclchikan (3alcway Borou.~h ~-’’ 2.788.1157 1,I 44,498 25,314,6(13 855.033 374,560 30.476,75 I Kodiak Isl:lnd [’lorou~h ~-’~ 851.575 2,786.589 24,406,757 457,799 408.022 28.910.742 l,akc & I’cninsula I’loro:l~h 230.658 468,222 9, I 15.328 65,734 455.455 10.335,397 Niw~hv,esl .,\relic [";orou~:h ’-’~ 8.925 1,978,859 37.351.895 - 329.228 39.668,907 Petersburg l~orou~h, ~:~ 755.871 ~’"_~6.,q 66 6.074.143 473.452 173,626 344,9/)6 8.(148,564 (’its,’, & F~orough of Silka ~:’ t.(’ 1(I ,_,~’~ 909,640 12.323,983 1,5 I0,909 391,194 497,524 17.243.472 Munici ~alil,v of Ska~way 4,735.565 - 986,909 8,829,647 33 I, 197 14.883,3 [ 8 ("it5’ & [~orough o f \Vrangcll 344.139 81,931 4.13 !. 196 2,048,522 325,274 - 409,356 7.340,418 ,\dak S 5~)7,253 S - $ - $ 42,369 $ $ 60,391 $ 79,192 $ 779,205 Bethel* t 9.843 - - 150.270 909,685 161,88,0 1.241.678 (’ovdova 1.540.017 221.760 4.320.363 18.072,319 135.303 464,556 t (18.421 24.862.739 ( "~aig 152.782 - 4,568,844 l, 164,! 88 322.724 30t,913 90,507 6,600.958 t)iltingha ~ 843,040 360.083 6.004,662 110.378 526.851 466.164 108,732 8,419.910 l loonah 994.403 - 2.314.49 [ 19(/.77(I - 96.629 86.173 3.682,466 t ton~cr’~’ 142.3 t 5 - ~ 107.962 424.080 152.(180 826,437 Kcuai* ’2~ I 15.767 - - 4,226,233 - !74,116 4.516.1 Ki~ { "o\’c~ ’: 439,489 - - 612.748 - - 88,028 I. 140,265 K lawock 1.413 - 2, t ~6.875 293.967 - 214,234 86.0{}3 2,782,492 Kodiak* t. 179.17(1 - - 177.451 991,552 159.147 2.507,320 Name I t.777 76,434 8,846.733 1,994,403 - 486.862 126,859 I 1.543 North Pole* 20.050 - - - - 104.753 124,803 Palmcr* 147.626 - - 93, ! 50 - - 163.126 403.902 ,q;Ind Poilll* 1623)51 - - 12,742 - - 87,901 263,594 - 67,093 - 80.962 148,055 Scw;ud* 892,787 - - 1,226,934 368,952 I I 1,593 2.600,266 Noldt)lIla* ~21 42.!158 - - 906 ] 36.276 179.240 I J nalaska ’:~ 8.383.238 t 33,364 4,411,9t 3 128.020 431,207 884,1)37 136.361 14.508.1411 Va Idcz 626.747 795.933 4,803,918 1,215,028 354,749 768,288 130.272 8.694.935 Whittier 946.226 30,890 48.227 78,470 1.103,813 lhliversily of/\taskn ’ :~ S 310.553,325 F~, 21120 School Debt I:X.’ 2tll 9 reimbursement Shared Taxes lransferred as & Fees Olle delll service for 7 categories annually (current license type appropriation) FM 2020 Total Debt Service 2,482,416 298,500 4,847,644 1.372,019 19.012.116 6.450,170 5.087.c) 12 9.320.496 1.423,900 6,908,032 1,448. I [ 9 1,927,770 1.509,(’,38 268.250 S 104,500 253,115(I 1.238.363 134,288 ! .338.,’q t 7 90.500 683.73 7.146.393 172.704 3 ! 4.607 85.050 845.54.4 725,525 100,775 104.850 180,930 12.125 2.0 ~ 0,338 2 t 1,752 5.1 343,725 159.025 I Ratio 3.53 .430.96 26.02 4.25 5.11 3.t0 7.26 5.74 5.56 1.45 9.86 27.36 7.4(~ 4.91 20,08 49.16 6.29 40.(~9 0.47 26,15 3.¢~2 32.37 2.97 15.91 1.24 3.85 12.21 2.83 25.3(I 6.94 55.56 * (’omnlunilics Ihal arc located in a borough which opcralcs the public schools in II1¢ comlalunity and receives that relaled Educalion Support Funding. ( I ) XlulchH~g g~ants arc al~proptiatcd by the I,cgislaturc and can vary significantly l)om year to year. (2) [gorrowcF Io ~l~is issue. (31 Inlc~ccplalMc revenue ot’{hc Unix cr~ily of Alaska consists of dirccl approprialions fiom Ihc Slate of Alaska: appropriations listed arc lbr fiscal year 2020. .go;ire ~, Stab, ~l ,.lla~/,a L)~q~a;’lm~,;~t r~/’.qd, titti.vtrrttir;,~l*’it~a;~ce Oivisio~: S/ate" o[ dlaxlca. Office q[ ma;;ag, emet~t a,d Budget: ~md State q/Alaska Dwartme~l q[Reve, t;c~Ta.v DivLs’iot~. Fro’their i~?fi~r~atioH ~~’~¢~t~’dDtg tht~ Slag{" o[ B-3 [This page intentionally left blank.] APPENDIX C GOVERNMENTAL UNIT STATISTICS REGARDING PARTICIPATION IN THE BOND BANK 2005 GENERAL BOND RESOLUTION OUTSTANDING LOAN PRINCIPAL TO GOVERNMENTAL UNIT BORROWERS AS OF MAY 1,2020 (Does Not Include 2020 Series One Bonds) Borrower City and Borough of Sitka Kenai Peninsula Borough City and Borough of Juneau City of Ketchikan University of Alaska Kodiak Island Borough Fairbauks North Star Borough City of Unalaska City of Seward Northwest Arctic Borough Ketchikan Gateway Borough Aleutians East Borough Municipality of Skagway Lake & Peninsula Borough City of Cordova City of Kodiak City of Dillingham Haines Borough Petersburg Borough City of Homer SE Alaska Power Agency Municipality of Anchorage City of Nome City of King Cove City of Sand Point City of Whittier City of Bethel City of Soldotna City of Craig City of Valdez City of Klawock City of Kenai City of Hoonah City of North Pole City of Pahner City, of Adak City and Borough of Wrangell City of Saxman Reserve Obligations Tolal Ot~t~,sta~ti~, P,~2ar Outstanding Principa! Perceut of Outstanding $136,355,000 112,320,000 110,630,000 86,395,000 82,890,000 75,125,000 58,995,000 54,670,000 29,215,000 25,910,000 22,885,000 18,930,000 17,790,000 14,430,000 13,685,000 l 1,450,000 10,400,000 8,085,000 7,175,000 6,825,000 3,475,000 3,100,000 2,705,000 2,395,000 2,155,000 1,805,000 1,665,000 1,550,000 1,505,000 1.500,000 1,230,000 1,165.000 830,000 540,000 475,000 450.000 260,000 140.000 1.390,000 $932.495.000 14.62% 12.05 11.86 9.26 8.89 8.06 6.33 5.86 3.13 2.78 2.45 2.03 1.91 1.55 1.47 1.23 1.12 0.87 0.77 0.73 0.37 0.33 0.29 0.26 0.23 0.19 0.18 0.17 0.16 0.16 0.13 0.12 0.09 0.06 0.05 0.05 0.03 0.02 0.15 100.00% [This page intentionally left blank.] APPENDIX D FINANCIAL STATEMENTS OF THE ALASKA MUNICIPAL BOND BANK FOR THE YEAR ENDED JUNE 30, 2019 [This page intentionally left blank.] ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of A!.aska) Financial Statements For the Year Ended June 30, 2019 Together with Independent Auditor’s Report Thereon ALASKA iVlUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Ataska) Tabte of Contents Independent Auditor’s Report Management’s Discussion and Anatysis F[nanc[a[ Statements Statement of Net Position and Governmentat Funds Batance Sheets Statement of Activities and Governmenta[ Funds Statement of Revenues, Expenditures, and Changes in Fund Batances/Net Position Notes to F[nancia[ Statements Supptementa[ Schedute of Statutory Reserve Accounts - Assets, Liabilities, and Account Reserves Continuing Disclosure Tabtes Page 1-2 3-9 10 ii 12-29 3O 31-38 JBDO Tel: 907- 278- 8878 Fax: 907- 278-5779 www .bdo.com 3601 C Street, Suite 600 Anchorage, AK 99503 Independent Auditor’s Report Board of Directors Alaska Municipal Bond Bank Authority Juneau, Alaska Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities and each major fund of the Alaska Municipal Bond Bank Authority (the Authority), a component unit of the State of Alaska, as of and for the year ended June 30, 2019, and the related notes to the financial statements, which coUectively comprise the Authority’s basic financial statements as [isled in the tame of contents. Idanagement’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. BOO USA. LLF. a Oe[awa!e limited liability partr)ership, is tile U.S. rr e r [~i c f B DO Intema[iona[ L.imfted, a UK c ) ~l)a Y r ted )y gL ara tee, ~t ( f ) ~r s pa t of the intel rli~tior~ai BOO network of inde[~ndent, l~el1~lxel film!L BDO is the b~ar;d n~me fo~ t{~:’ BDQ network arid for each of the BDO t~ember Fi~ ms. 1 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the Authority, as of June 30, 2019, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 3-9 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Authority’s basic financial statements. The supplemental schedules and continuing disclosure tables noted in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The supplemental schedules and continuing disclosure tables are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental schedules and continuing disclosure tables are fairly stated, in at[ material respects, in relation to the basic financial statements as a whole. Anchorage, Alaska September 26,2019 ALASKA IVlUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) h4anagement’s Discussion anct Ana/ysis Year Ended June 30, 2019 This Management’s Dkscussion and Ana[ysks (MD&A) [s requkred by GASB Statement No. 34, a standard established by the Governmentat Accounting Standards Board. Thks sectkon ks intended to make the financial statements more understandable to the average reader who [s not familiar wkth traditkona[ accountkng terminology. This financial report has two integral parts: th[s MD&A and the financial statements with the accompany[ng notes that follow. Together, they present the Alaska Municipal Bond Bank Author[ty’s (Bond Bank) financial performance during the fiscal year ended June 30, 2019. Summarized pr[or fiscal year [nformation [s shown w[th[n this MD&A, as needed, for comparative purposes. Required Financial Statements GASB Statement No. 34 requires two types of financial statements: the Statement of Net Position and Governmental Fund Balance Sheets and the Statement of Activ[t[es and Governmental Fund Revenues, Expenditures and Changes [n Fund Balances/Net Position. These statements report financial information about the Bond Bank’s activities using account[ng principles generat[y accepted in the United States of America. In addition to the basic financial statements, the Notes to Financial Statements provide information that is essential to a furl understanding of the data provided [n the basic financial statements. Financiat Highlights During fiscal year 2019 the Bond Bank entered into nine loan agreements to fund approximately $50.4 mi[t[on [n loans resulting in an estimated $4.3 mit[[on in savings. In fisca[ year 2019, Bond Bank loans funded eight projects located in seven communities and refinanced one loan for savings. The Bond Bank issued approximately $44.2 million in bonds that generated $49.8 million and provided a $0.6 million direct loan, providing a total of $50.4 m[ttion [n funding during fiscal year 2019. tn comparison, during fiscal year 2018 the Bond Bank issued approximately $29.0 m[llion in bonds that generated $31.2 million to fund one loan agreement resulting [n an estimated $3.4 m[llion [n savings. Statement of Net Position The Statement of Net Position reports assets, [iab[l[ties and net position of the Bond Bank. Assets Assets represent 1) The value of the Bond Bank’s investments and investment income receivable on the financial statement date, recorded at fair market value, and 2) Bond principal and interest payments receivable from borrowers. The investments generate income for the Bond Bank, used to meet reserve requirements and pay operating costs. Historically excess operating account earnings were transferred to the State of Alaska’s (State) general fund each year. Since fiscat year 2009, and cont[nu[ng through fiscal year 2020, the State operating budget has appropriated any excess earnings of the operating account to the Bond Bank’s reserve fund (HB 39, Sec. 33(g)). -3- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Ataska) /Vlanagemen t’s D~scuss[on and A nalysis Year Ended June 30, 2019 Interest received on bonds purchased from borrowers is used to pay the Bond Bank’s corresponding interest payments on the bonds that it has issued. Li.a bi.ti.ti.es Liab[Uties represent ctaims against the fund for 1) goods and services provided before the financiat statement date but not yet paid for at that date, and 2) interest and bond payments due to purchasers of the Bond Bank’s bonds after the financial statement date. Restricted and Unrestricted Net Position Net position is comprised of two components. The restricted portion reflects monies maintained in separate trust accounts where their use is timited by app[icabte bond covenants for repayment of bonds. The unrestricted portion reflects monies that are avaitabte for any authorized purpose of the Bond Bank. The fotlowing table shows the vatue of Bond Bank assets summarized as of June 30, 2019 and 2018, as wett as UabiUties and net position: Assets: Cash and investments Bonds and bond interest receivable Other receivables Total assets Liabilities: Accounts payable and accrued Uab[lit[es Bonds and bond i.nterest payabte Totat [iab~Ut(es Net Position: Restricted Unrestricted Total net posit~on As of June 30, 2019 2018 Changes from 2018 to 2019 I ncrease/(Decrease) DoUars Percent $ 66,970,604 $ 68,247,354 $ (1,276,750) 1,127,903,301 1,154,164,155 (26,260,854) 9,323 9,323 1,194,883,228 1,222,420,832 (27,537,604 12,257,469 12,208,319 49,150 1,125,168,299 1,156,062,992 (30,894,693 1,137,425,768 1,168,271,311 (30,845,543 36,532,035 36,064,283 467,752 20,925,425 18,085,238 2,840,187 $ 57,457,460 $ 54,149,521 $ 3,307,939 -1.87% -2.28% 0.00% -2.25% 0.40% -2.67% -2.64% 1,30% 15.70% 6.11% The Bond Bank’s investments are art herd in U.S. Government securities. The decrease in bonds and bond interest receivabte, as weft as in bonds and bond interest payabte, reflects the issuance of approximatety $44.2 miUion [n new bonds during the year, net of principat payments on bonds previousty issued of approximate[y $74.8 miUion. The Bond Bank reatized a net decrease in 2019 tong term debt batances due to greater principal payments during the fiscal year on bonds previously issued when compared to the issuance activity during the fiscal year. The Bond Bank issued the 2018 Series One, 2019 Series One, and 2019 Series Two in the aggregate principat amount of approximately $44.2 mUUon during the year to make toans to authorized -4- ALASKA IVlUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Management’s [~[scussion and Analysis Year Ended June 30, 2019 borrowers. Additionally, the Bond Bank provided a direct roan to one community in the amount of $0.6 mi[tion. Statement of Activities The statement of activities shows how the Bond Bank’s net position changed during the most recent fiscal year. Revenues Revenues include total return on investments and interest payments received from municipalities. Earnings on investments include interest on fixed income marketable securi.ties and the change in fair market value of those investments. Expenses Expenses include interest payments made to bond hotders who purchased the Bond Bank’s bonds, payments made to the State of Alaska and operating expenses. Operating expenses inctude a[[ expenditures required to issue bonds during the current year and inctude in-house expenses, as we[[ as externa[ consultant fees. Expenses are subtracted from revenues. The following is a condensed statement of the Bond Bank’s changes in net position as of June 30, 2019, and 2018: Revenues: Interest i.ncome on bonds receivable Investment earnings Total income Expenses: Interest expense on bonds payable Operating expenses Total expenses Change in net positi.on Net positi.on, beginning of period Net posi.t[on, end of period As of June 30, 2019 2018 Changes from 2018 to 2019 lncrease/(Decrease) Dot[ars Percent $ 51,784,009 $ 53,365,097 $ (1,581,088) -2.96% 4,135,937 34,724 4,101,213 11810.89% 55,919,946 53,399,821 2,520,125 4.72% 51,927,628 53,689,219 (1,761,591) -3.28% 684,379 498,279 186,100 37.35% 52,612,007 54,187,498 (1,575,491) -2.91% 3,307,939 (787,677) 4,095,616 519.96% 54,149,521 54,937,198 (787,677) -1.43% $ 57,457,460 $ 54,149,521 $ 3,307,939 6.11% Interest income and expense on bonds receivable and payable are a function of the total amount of bonds outstanding, the age of the bonds and the interest rates at which they are issued. The interest income and expense decreases are consistent with the decreases in bond receivable and payable balances, respectively. Investment earnings are a function of market conditions, and active management. The Bond Bank uses other assets to subsidize debt service during times of low investment returns in bond reserve funds. During fiscal year 2019, the Bond Bank optionally redeemed approximately $4.4 million in outstanding reserve obligation bonds. The increase in net position is primarily due to improved investment returns and decreased debt service on reserve obligations. -5- ALASKA IVlUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) [Vlanagement’~ D~~cuss[on and Analysi~ Year Ended June 30, 2019 Governmental Funds The governmental funds include the Genera[ Fund, which accounts for the primary operations of the Bond Bank, and the Debt Service Fund, which accounts for the resources accumulated and payments made on the tong-term debt of the Bond Bank. The primary difference between the governmental funds balance sheet and the statement of net position [s the elimination of inter- fund payables and receivables. Bond proceeds are reported as another financing source in the governmental funds statement of revenues, expenditures and changes [n fund balances, and th[s contributes to the change in fund balance. In the statement of net position, however, issuing debt increases tong-term [[abi[it[es and does not affect the statement of activities. Similarly, repayment of debt principal is recorded as expenditure in the governmental funds statement of revenues, expenditures and changes in fund balances and reduces the [iab[[[ty [n the statement of net position. The following tables show governmental funds’ condensed balance sheets and statements of revenues, expenditures and changes [n fund balances as of June 30, 2019, and 2018. Genera[ Fund As of June 30, 2019 2018 Changes from 2018 to 2019 Increase/(Decrease) Dol.lars Percent Assets: Cash, investments and related accrued interest $ 8,301,893 $ 12,343,305 $ (4,041,412) -32.74% Bonds and bond interest receivable 5,087,690 5,536,894 (449,204) -8.11% Other receivables 9,323 9,323 0.00% Interfund receivable 10,876,628 6,290,067 4,586,561 72.92% Total assets 24,275,534 24,179,589 95,945 0.40% Liabilities: Accounts payable and accrued liabilities 158,471 81,455 77,016 94.55% Fund Balance: Restricted for debt service 4,956,430 4,956,430 0.00% Unassigned 19,160,633 19,141,704 18,929 0.10% Total fund balance 24,117,063 24,098,134 18,929 0.08% To[at liabilities and fund balance $ 24,275,534 $ 24,179,589 $ 95,945 0.40% -6- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) h4anagement’s L3~scussion ancl Analysis Year Ended June 30, 2019 Debt Service Fund Assets: Cash, investments and related accrued i.nterest Bonds and bond interest receivable Total assets Lia bi.[it[es: Accounts payabl.e and accrued liabilities Interfund payables Total liabilities Fund Ba!.ance: Restricted for debt service Total [i.abiliti.es and fund balance As of June 30, 2019 2018 $ 58,668,711 $ 55,904,049 1,122,815,611 1,148,627,261 1,181,484,322 1,204,531,310 12,098,998 12,126,864 10,876,628 6,290,067 22,975,626 18,416,931 1,158,508,696 1,186,114,379 $ 1,181,484,322 $ 1,204,531,310 Changes from 2018 to 2019 Increase/(Decrease) Dollars Percent $ 2,764,662 (25,811,650) (23,046,988 (27,866 4,586,561 4,558,695 (27,605,683 $ (23,046,988 4.95% -2.25% -1.91% -0.23% 72.92% 24.75% -2.33% -1.91% Genera[ Fund Revenues: Interest income on bonds receivable Investment earnings Total income Expenditures: Operating expenses Deficiency of revenues over expenditures Other financing sources - transfers Excess (defi.c[ency) of revenues and transfers over expenditures Fund balance, beginning of year Fund balance, end of year As of June 30, 2019 2018 $ 113,043 $ 154,435 441,446 554,489 154,435 684,379 498,279 (129,890) (343,844) 148,819 124,960 18,929 (218,884) 24,098,134 24,317,018 $ 24,117,063 $ 24,098,134 Changes from 2018 to 2019 Increase/(Decrease) Dollars Percent $ (41,392) -26.80% 441,446 100.00% 400,054 259.04% 186,100 37.35% 213,954 62.22% 23,859 19.09% 237,813 108.65% (218,884) -0.90% $ 18,929 0.08% -7- Debt Service Fund ALASKA IVlUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of ALaska) 1~4anagement’s D[scuss~on ancl Analysis Year Ended June 30, 2019 Revenues: Interest {ncome on bonds receivabl.e Investment earnings (loss) Total revenues Expenditures: Interest payments Principal payments Total. expenditures Deficiency of revenues over expenditures Other f[nanci, n9 sources (uses): Bonds issued Transfers Total. other financin9 sources (uses): Deficiency of revenues and transfers over expenditures Fund balance, beginning of year Fund balance, end of year As of June 30, 2019 2018 51,670,966 $ 53,246,419 3,694,491 (1,033) 55,365,457 53,245,386 52,237,321 54,761,904 74,810,000 74,905,000 127,047,321 129,666,904 Changes from 2018 to 2019 I ncrease/(Decrease) Do[rats Percent $ (1,575,453) -2.96% 3,695,524 357746.76% 2,120,071 3.98% (2,524,583) -4.61% (95,000) -0.13% (2,619,583) -2.02% (71,681,864) (76,421,518) 4,739,654 -6.20% 44,225,000 28,955,000 (148,819) (124,960) 44,076,181 28,830,040 (27,605,683) (47,591,478) 19,985,795 1,186,114,379 1,233,705,857 (47,591,478) $ 1,158,508,696 $ 1,186,114,379 $ (27,605,683) 15,270,000 52.74% (23,859) -19.09% 15,246,141 52.88% 41.99% -3.86% -2.33% Long-term Debt At June 30, 2019, the Bond Bank had $1,111,080,000 of bonds and notes outstanding, down 2.68% from $1,141,665,000 at June 30, 2018. This excludes conduit debt obligations of the Coastal Energy Loan Program. Payment of principal and interest on the Bond Bank’s Coastal Energy Bond [s not secured by a pledge of any amounts held by or payable to the Bond Bank under the General Bond ResoLution, i.nc[uding the Reserve Account, and is not in any way a debt or Liabitity of the Bond Bank and accordingly, are not included in the basic financial statements. Ptease see note (8) to the financiat statements. As di.scussed in the previous section, the net decrease in 2019 Long term debt balances is due to greater principal payments during the fiscal year on bonds previously issued as compared to new i~ssuance activity. AS 44.85.180(c) was originally enacted in 1975, [kmiting the Bond Bank outstanding bonds at any tkme to $150 mk[lion. This Statute has been periodkcaL[y amended to raise the limit, and modify the definition of authorized borrowers. The total debt Limit as of June 30, 2019 was $1,792,500,000, comprised of $1.5 bit[ion in authorkty for potit[cat subdivisions including joint actkon agencies and the ALaska Municipal League’s Joknt Insurance Association, $87.5 million for the Unkversity of ALaska, and $205 mi[[ion for Regkonal Hearth Organ[zations. Total Bond Bank bonds and notes outstanding as of June 30, 2019 was approximately $1,111,080,000. The [imkt on addktionaL bond [ssuance as of June 30, 2019 was approximately $681.4 million, of whkch $606.3 ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Management’s Discussion and Analysis Year Ended June 30, 2019 million of authority is available for the main political subdivision program, $3.0 million is available to the University of Alaska, and $72.1 million is available to Regional Health Organizations. Outstanding [ong term debt is comprised of the following bonds and loans at year end: GO bonds payabte $ $ Changes from 20:18 to 20:19 As of June 30, Increase/(Decrease) 20:19 20:18 Dotiars Percent :1,:11:1,080,000 $ :1,:14:1,665,000 $ (30,585,000) -2.68% i,I II,080,000 $ 1,141,665,000 $ (30,585,000) -2.68% Contacting the Bond Bank’s Financiat Management This financial report is designed to provide our customers, investors, and creditors with a genera[ overview of the Bond Bank’s finances and to demonstrate the Bond Bank’s accountability of its assets. If you have any questions about this report or need additional financial information, contact the Finance Director or the Executive Director of the Bond Bank at (907) 465-2893 or (907) 465-3750, respectively. -9- ASSETS Cash and cash equivalents Investments, at fair value (note 4) Accrued interest receivable: Bonds receivable Investment securities Bonds receivable (note 5) Other receivables Interfund receivables Totalassets LIABILITIES Accounts payable Due to Primary Government Pr(ncipal and interest payments received in advance Accrued interest payable Interfund payables Bond proceeds held (n reserve (note 6) Long-term l[abUit(es (note 7): Portion due or payabl’e within one year: General obligation bonds payable Portion due or payabl’e after one year: General obligation bonds payable Total, liabilities FUND BALANCES/NET POSITION Fund balances: Restricted (note 2) Unassigned Total fund balances Total Uabilities and fund balances Net position: Restricted (note 2) Unrestricted Total net position ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Statement of Net Position and Governmental Funds Balance Sheets June 30, 2019 General Fund Debt Service Fund 393,150 7,871,927 $ 7,421,666 50,967,999 37,293 36,816 5,050,397 9,323 10,876,628 $ 24,275,534 14,050,611 279,046 1,108,765,000 $ 1,181,484,322 8,409 150,062 $ 5,105,848 10,876,628 6,993,150 158,471 22,975,626 4,956,430 1,158,508,696 19,160,633 24,117,063 1,158,508,696 24,275,534 $ t,181,484,322 Total 7,814,816 58,839,926 Adiustments $ Statement of Net Pos(tion $ 7,814,816 58,839,926 14,087,904 315,862 1,113,815,397 9,323 10,876,628 $ 1,205,759,856 (10,876,628) (10,876,628) 14,087,904 315,862 1,113,815,397 9,323 1,194,883,228 8,409 150,062 5,105,848 10,876,628 6,993,150 14,088,299 (10,876,628) 8,409 150,062 5,105,848 14,088,299 6,993,150 23,134,097 1,163,465,126 19,160,633 1,182,625,759 $ 1,205,759,856 72,190,000 1,038,890,000 1,114,291,671 72,190,000 1,038,890,000 1,137,425,768 (I,163,465,126) (19,160,633) (1,182,625,759) 36,532,035 20,925,425 $ 57,457,460 36,532,035 20,925,425 $ 57,457,460 Tile accompanying notes to the financ(al statements are an integral part of these statements. - 10- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of A[aska) Statement of Activities and Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances/Net Position For the Year Ended June 30, 2019 Revenues: Investment earnings Interest income on bonds receivable Total revenues Debt Service GeneralFund Fund Total $ 441,446 $ 3,694,491 $ 4,135~937 113,043 51,670,966 51,784,009 554,489 55,365,457 55,919,946 Expenditures / expenses: Debt service: Principal payments Interest payments / expense Professional services Personal services Administrative travel Office expense Total expenditures / expenses Adjustments Excess (deficiency) of revenues over expenditures / expenses Other financing sources / (uses): Bonds issued Transfers - internal activities Total other financing sources / (uses) Net change in fund balance / net position Fund balances / net position: Beginning of the year End ofthe year 74,810,000 74,810,000 (74,810,000) 52,237,321 52,237,321 (309,693) 469,842 469,842 193,296 193,296 17,543 17,543 3,698 3,698 684,379 127,047,321 127,731,700 (75,119,693) (129,890) (71,681,864) (71,811,754) 75,119,693 44,225,000 44,225,000 (44,225,000) 148,819 (148,819) 148,819 44,076,181 44,225,000 (44,225,000) Statement of Activities $ 4,135,937 51,784,009 55,919,946 51,927,628 469,842 193,296 17,543 3,698 52,612,007 3,307,939 18,929 (27,605,683) (27,586,754) 30,894,693 3,307,939 24,098,134 1,186,114,379 1,210,212,513 (1,156,062,992) 24,117,063 $ 1,158,508,696 $ 1,182,625,759 $ (1,125,168,299) 54,149,521 $ 57,457,46O The accompanying notes to the financial statements are an integral part of these statements. -!1- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements For the Year Ended June 30, 2019 (1) History/Reporting Entity The Alaska Municipal Bond Bank Authority (Authority or Bond Bank) was created pursuant to Alaska Statute, Chapter 85, Title 44, as amended, (Act) as a public corporation and instrumentality of the State of Alaska (State), but with a legal existence independent of and separate from the State. The Authority is a discretely presented component unit of the State of Alaska for purposes of financial reporting. The Authority commenced operations in August 1975. The Authority was created for the purpose of making monies available to authorized borrowers within the State to finance cap[tat projects primarily through the issuance of bonds by the Authority. Bond proceeds are then used to purchase, from authorized borrowers, general obligation and revenue bonds. The bonds are obligations of the Authority, payable only from revenues or funds of the Authority, and the State of Alaska is not obligated to pay principal or interest thereon, and neither the faith and credit nor the taxing power of the State is pledged to the bonds. The municipal bonds and municipal bond payments, investments thereof and proceeds of such investments, if any, and at[ funds and accounts established by the bond resolution to be held by the Trustee (with the exception of the Coastal Energy Loan Debt Service Program, which is administered by the Authority) are pledged and assigned for the payment of bonds. ALaska Statue (AS) 44.85.180(c) was originally enacted in 1975, timiting Bond Bank outstanding bonds at any time to $150 million. This Statue has been period[catty amended to raise the limit, and modify the definition of authorized borrowers. At the beginning of fiscal year 2015, the Limit was $1.5875 billion. During fiscal year 2015, the LegisLature passed, and the Governor signed into Law a biLL to authorize the Authority to make Loans to Joint Action Agencies and Regional HeaLth Organizations, effective May 26, 2015. Joint Action Agency [ending is now part of the main political subdivision program. Regional Health Organization Lending is limited to no more than $205 miLLion in total, no more than 49% of any single project where the other 51% of the project’s funding is in place, and not more than $102.5 miLLion for any single project. With the 2015 legislation, the total debt limit as of June 30, 2019 was $1,792,500,000, comprised of $1.5 b[t[ion in authority for political subdivisions, $87.5 million for the University of ALaska, and $205 million for Reg[onaL HeaLth Organizations. Total Bond Bank bonds and notes outstanding as of June 30, 2019 was approximately $1,111,080,000. The limit on additional bond issuance as of June 30, 2019 was approximately $681.4 miLLion, of which $606.3 million of authority [s available for the main political subdivision program, $3.0 miLLion is avaiLabLe to the University of ALaska, and $72.1 mitt[on is avaiLabLe to Regional Health Organizations. (2) Summary of Significant Accounting Pot[c[es The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial principles. The most significant of the Authority’s accounting policies are described below. - 12- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements (a) Government-wide and Fund Financiat Statements The government-wide statement of net position and the statement of activities report information on a[[ of the activities of the Authority. For the most part, the effect of interfund activity has been removed from these statements. The balance sheet and statement of revenues, expenditures and changes in fund balances are provided for governmental funds. (b) Pleasurement Focus, Basis of Accounting, and Financiat Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrua/basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are co[tect[b[e within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are co[[ected within 180 days of the end of the current fiscal period. Expenditures generally are recorded when a tiabitity is incurred, as under accrua[ accounting. However, debt service expenditures are recorded only when payment is due. The Authority reports the following major governmental funds: The General Fund is the Authority’s primary operating fund. It accounts for all financial resources of the Authority, except those required to be accounted for in another fund. The Authority adopts an annual budget for the operating account only which does not encompass entire operations of the General Fund, therefore, budgetary comparison information for the Genera[ Fund is not presented. The Debt Service Fund accounts for the resources accumulated and payments made for principal and interest on long-term debt of the Authority. The Authority does not adopt a budget for the Debt Service Fund because it is not [egaEy required to do so. The purposes of each of these funds are described in the following paragraphs: General. Fund The Genera[ Fund is comprised of a Custodian Account and an Operating Account. The Custodian Account is estabt[shed to account for appropriations by the State of Alaska Legislature available to fund the Specia[ Reserve Accounts. The Operating Account is estabt[shed to account for the ordinary operations of the Authority. Monies are derived from the for[owing sources: (a) amounts appropriated by the Leg[stature, (b) fees and charges co[tected, (c) income on investments of the Statutory Reserve Account in excess of required debt service reserves required by bond resolutions and (d) any other monies made avaitabte for purposes of the GeneraI Fund from any other source. Amounts in the Operating Account may be used to pay (a) administrative expenses of the Authority, (b) fees and expenses of the Trustee and paying agents, (c) financing costs incurred with - 13- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Akaska) Notes to Financial Statements respect to issuance of bonds and (d) any expenses in carrying out any other purpose then authorized by the Act. The excess revenues of the Operating Account are returned to the State of Akaska. The State of Al‘aska may appropriate the excess revenues to the Bond Bank Custodian Account to fund Reserve Accounts. Debt Service Fund Within the Debt Service Fund, separate Debt Service Programs have been estabkished for each bond resokution to account for the portion of bond sake proceeds used to purchase obkigations of the authorized borrowers and for the payment of interest and principak on at[ bonds of the Authority issued under its resokutions. Each program is comprised of an "interest account" and a "principak account", both of which are maintained by a trustee. The receipts of interest and principal‘ from the authorized borrowers and the Statutory Reserve Account are deposited in these programs and are used to pay interest and principak on the Authority bonds. One additional‘ Debt Service Program has been established to account for transactions not invokving bond resolutions. This is the Coastal. Energy Loan Debt Service Program. The Coastal Energy Loan Debt Service Program is not maintained by a trustee. Payments of interest and principak by municipa[ities having coasta[ energy koans are made directky to the federak government by the municipakities and are accounted for in the Coastal‘ Energy Loan Debt Service Program. Each Debt Service Fund Program contains a Statutory Reserve Account estabkished to account for (a) money avail‘able to fund debt service reserves required by future bond sakes under various bond resokutions (Custodian Account) and (b) debt service reserves which have already been estabkished under various bond resokutions which are to be used in the case of deficiency in a Debt Service Program in accordance with its respective bond resol‘ution (reserve accounts). Separate reserve accounts exist under each bond resokution as fo[kows: 2005 General Bond Resolution - The reserve fund may be funded with transfers from the custodian account, surety pokicies, bond proceeds, or other funds avaikabke to the Bond Bank. 2010 General Bond Resolution - The reserve fund may be funded with transfers from the custodian account, surety pokicies, bond proceeds, or other funds available to the Bond Bank. 2016 Master Bond Resolution- The reserve fund may be funded with transfers from the custodian account, surety policies, bond proceeds, or other funds available to the Bond Bank. At June 30, 2019, the 2005 General Bond Resolution, 2010 General Bond Resolution and 2016 Master Bond Resolution reserves must be the [east of: ([) :10% of the initial principal amount of each Series of Bonds outstanding; (ii) the maximum annua[ principak and interest requirements on aik bonds outstanding; (iii) 125% of the average annuak debt service on a[[ bonds then outstanding; or (iv) such kower amount as may be a[[owed by kaw. Amounts [n excess of the debt service reserve requirement in any reserve are transferred to the Operating Account on a periodic basks. - :14- (c) Adjustments ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements Certain adjustments are considered to be necessary to the governmental funds in order to present the Author[ty’s financial position and the results of its operations. These adjustments include the elimination of inter-fund payables and receivables. Additionally, bond proceeds are reported as financing sources in governmental funds and thus contribute to the change in fund balance. In the statement of net position, however, issuing debt increases long-term liabilities and does not affect the statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds and reduces the liability in the statement of net position. (d) Restricted Assets Certain resources set aside for the repayment of the Authority’s bonds, net of certain proceeds from additi.onal bonds issued, are classified as restricted on the statement of net position because they are mai.ntained in separate trust accounts and thei.r use is limited by applicable bond covenants. Cash and cash equivalents and investments include $36,532,035 of restricted assets. These assets were funded as follows: Original State of Alaska appropriation 2008 appropriation of excess earnings 2009 appropriation of excess earni.ngs 2010 appropriation of excess earnings 2011 appropriati.on of excess earni.ngs 2012 appropriation for loan forgiveness Total State of Alaska appropriated equity 18,601,414 855,347 819,843 32,628 86,814 13,000,000 $ 33,396,046 Restricted for Debt Service: Appropriated amounts resi.ding in reserve accounts Appropriated amounts residing in Custodian account Total State of Alaska appropriated equity Bond Bank equity residing in reserve accounts Total restricted for debt service/net position 28,439,616 4,956,430 33,396,046 3,135,989 36,532,035 (e) Bond Receivables Bond receivables are secured by the pledged revenues or are general obligations of the authorized borrowers. Interest rates correspond with the interest rates on the related bonds payable by the Authority. The bond receivables mature during the same period as the related bond payables. Bond receivables are recorded at the par amount of the bonds issued. -15- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements (f) Long- Term Obligations In the government-wide financiat statements, tong-term debt and other tong-term obligations are reported as [iabitit[es in the statement of net position. Any premium or discount on bond issuance or refunding [s not recorded by the Authority, as the premium or discount is recorded by the authorized borrowers associated with the issuance and amortized by them. Therefore, bonds payabte are presented at par. Bond issue costs are generatty paid by the authorized borrowers but when a portion is paid by the Authority they are paid from the Genera[ Account and considered operating expenses. (g) Fund Equity Generatty, fund equity represents the difference between the current assets and current tiabi[ities and is classified as fund batance. Bond Bank, in accordance with GASB Statement No. 54 provisions, which require ctassification of fund batance as nonspendabte, restricted, committed, assigned or unassigned, had fund batances in restricted and unassigned categories. Restricted Fund Balance- Restricted fund batance is that portion of fund equity that has constraints ptaced upon the use of the resources either by an external party or imposed by taw. Unassigned Fund Balance - this ctassification represents fund balance that has not been restricted, committed or assigned to specific purposes within the genera[ fund. The Authority does not have a poticy for its use of unrestricted fund balance amounts, therefore, it considers that committed amounts are reduced first (if any), fo[towed by assigned amounts (if any), and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of those unrestricted fund batance ctassifications coutd be used. In the government-wide financiat statements, restrictions of net position are reported when constraints placed on net position are either externatty imposed by creditors or taws or regulations of other governments or imposed by taw through constitutionat provisions or enabling legislation. (h) Interfund Receivab/es, Payabtes and Transfers Interfund batances represent cash corrected or disbursed on behatf of another fund. Interfund transfers are transfers between funds that are required when revenue is generated in one fund and expenditures are paid from another fund. Interest Arbitrage Rebate Bonds issued and funds segregated into reserves after August 15, 1986 are subject to Internat Revenue Service income tax regutations which require rebates to the U.S. Government of interest income earned on investments purchased with the proceeds from the bonds or any applicable reserves in excess of the at[owab[e yield of the issue. Amounts owed are expensed when paid and refunds are recorded when received at the five year anniversary date of the bond issue or upon final repayment. The Bond Bank’s arbitrage rebate - 16- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements consuttant witt update alt genera[ obtigation bond rebate anatysis annuatty as of June 30. The Bond Bank did not have an arbitrage rebate liability as of June 30, 2019. (1") Income Taxes The Authority is exempt from paying federal and state income taxes. (3) Cash The Authority considers at[ highly liquid investments purchased with an original maturity of three months or tess at the date of purchase to be cash equivalents. Cash and cash equivalents at June 30, 2019 consist of money market accounts held with the trustee or custodial bank. The bank balance of art of the Authodty’s cash and cash equivalents are coltateratized by securities held in the Authority’s name by its custodial agent. (4) Investments In accordance with the authoritative guidance on fair value measurements and disclosures, the Authority discloses the fair value of its investments in a hierarchy that ranks the inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest ranking to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest ranking to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows: Level 1 - Quoted prices in active markets for identical assets. Level 2 - Inputs other than quoted prices that are observabte for the assets, inctuding quoted prices for similar investments based on interest rates, credit risk and tike factors. Lever 3 - Unobservabte inputs for the assets. Investments are assigned a level based upon the observabi[ity of the inputs which are significant to the overall valuation. The inputs and methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. - 17- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Ataska) Notes to Financial Statements The aggregate fair value by input [eve[, as of June 30, 2019 is as follows: Level Debt Securities 6/30/2019 1 2 3 Genera[ Fund U.S. Treasury securities $ 7,041,975 $ 7,041,975 $ $ U.S. Government agency securities 829,952 829,952 Total General Fund 7,871,927 7,041,975 829,952 Debt Service Fund U.S. Treasury securities U.S. Government agency securities Total Debt Service Fund Total Debt Securities 44,297,222 44,297,222 6,670,777 6,670,777 50,967,999 44,297,222 6,670,777 $58,839,926 $51,339,197 $ 7,500,729 U.S. Treasury securities are liquid and have quoted market prices. Fair value of U.S. Treasuries securities is based on live trading feeds. U.S. Treasury securities are categorized in Level 1 of the fair value hierarchy. Government agency securities use market-based and observable inputs. As such, these securities are classified as Level 2 of the fair value hierarchy. The fair value of debt security investments by contractual maturity as of June 30, 2019 is shown below. Genera[ Fund U.S. Treasury securities U.S. Government agency secur[t[es Total Genera[ Fund Less than 1 Year 1-5 Years 6-10 Years More than 10 Years Total. $ 1,899,520 $ 4,266,641 $ 875,814 $ $ 7,041,975 829,952 829,952 1,899,520 5,096,593 875,814 7,871,927 4,689,803 34,544,606 5,062,813 44,297,222 6,670,777 6,670,777 4,689,803 41,215,383 5,062,813 50,967,999 $ 6,589,323 $ 46,311,976 $ 5,938,627 $ $ 58,839,926 Debt Service Fund U.S. Treasury securities U.S. Government agencies securit[es Total Debt Serv[ce Fund Total investments Expected matur[t[es may differ from contractual maturit[es because borrowers may have the right to ca[[ or prepay obligations with or without penalty. (a) Investment Policies The Authority has distinct investment objectives and policies associated with funds held in the Custodian Account, Reserve Funds, and municipal debt payments received prior to scheduled debt service payment dates. The three classes of funds are listed below: - 18- Custodian Account ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements The Custodian Account investment portfolio is designed with the objective of attaining the highest market rate of return subject to the required use of the Custodian Account for operations, funding transfers to the state, and funding reserves. The Custodian Account balance must maintain a minimum balance of $5 million, and be forecasted to maintain that $5 million balance for the subsequent twelve-month period, and an analysis of risk profi[e and historical benefit between the varying strategies must be undertaken before any shift in the investment strategy of the Account. Up to $1,000,000 shall be used for longer term, 5 to 10 year U.S. Treasury and Agency securities. The Custodian Account has to maintain sufficient liquidity to meet operating requirements, provide the prior fiscal year’s state dividend (if not otherwise appropriated back to the Bond Bank), and to allow transfers to reserves as needed for bond issuance activity. Long-term preservation of principal is the third objective of the Custodian Account’s investment program. Investments shall be undertaken in a manner that minimizes the probability of long-term loss. o There are no arbitrage restrictions. The bond resolutions limit investments to: o 5% +/- 2% money market funds (no less than $350,000). o 95% +/- 3% government agencies and U.S. Treasuries. o The performance benchmark is 5% +/- 2% three month U.S. Treasury Bill, and 95% +/- 3% Barc[ays 1-5 year government bond index; Barclays U.S. Aggregate. The following transactions are prohibited with the Custodian Account unless those transactions have the prior written consent of the Investment Committee: o Short sale of securities (the sale and settlement of a security not currently owned by t.he Autho.rity and a formal agreement to borrow the security to facilitate the settlement of the short sale); o Purchases of futures, forwards or options for the purpose of Sl:~eculating (currency futures, forwards and options are permitted only for hedging or to facilitate otherwise permissible transactions); o Borrowing to leverage the return on investments. Extended settlement of securities purchases executed to facilitate or improve the efficiency of a transaction will not be considered borrowing, provided that sufficient cash equivalent securities or receivables are available to facilitate the extended settlement; o Purchases of "private placement" or unrated corporate bonds. Bond Reserve Funds Preservation of principal is the foremost objective of the Bond Reserve Funds investment program. These funds shall be managed to ensure that the corpus is preserved. These funds will not be expended until the final maturity of the bond issue they secure, unless there is a failure to pay debt service by a borrower. As there is limited benefit - ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements in maximizing return it is the [east important objective of the Bond Reserve Funds. It is anticipated that the Reserve Funds cumulative average return should target the blended arbitrage yield limit of the bond issues secured. Bond resolutions limit at[owed investment of these funds. Investment risk is examined on an annual basis to ensure that no greater than the minimum [eve[ of risk required to achieve the highest probability of earning the arbitrage yield limit on the bonds is incurred. The 2005, 2010 and 2016 Reserve Fund bond resolutions limit investments to: o 90% +/- 10% government agencies and U.S. Treasuries with maturities of less than 5 years. o 10% +/- 10% government agencies and U.S. Treasuries with maturities of more than 5 years an:d less than 10 years. o Performance benchmark is 90% Barc[ays U.S. 1-5 year government bond index and 10% Barc[ays U.S. Aggregate index. lV]unicipa[ Debt Payments Preservation of principal and [iqui.dity are the foremost objectives of the Municipa[ Debt Payments investment program, as these funds w[[[ be expended within seven business days of receipt. Return on investment is a benefit of holding these funds for the advance payment period, but not the focus of investing the funds. The bond resolutions limit investments to: o 100% Money Market Fund. o Performance benchmark is three-month U.S. Treasury Bill. (b) Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of the Authority~s investment in a single issuer. Concentration limits are not established in the bond indentures and governing agreements for pledged investments. More than 5 percent of the Authority’s investments are in Government Sponsored Enterprise (GSE) debt, including the Federal Home Loan Bank, Federal Farm Credit Bank and Federal Home Loan Mortgage Corporation. These investments are 10.7%, 1.3%, and 0.8% of the Author[ty’s total investments, respectively. The Authority~s policies set out maximum concentration limits for investments managed by the external investment manager. (c) Credit Risk Credit risk is the risk of loss due to the failure of the security or backer. The Authority mitigates its credit risk by limiting investments permitted in the investment policies. U.S. Treasury securities that are explicitly guaranteed by the U.S. government are not considered to have credit risk. GSE~s are considered to have an implicit guarantee. The Federal Home Loan Bank, Federal Farm Credit Bank, and Federal Home Loan Mortgage - 20- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Ataska) Notes to Financia[ Statements Corporation at[ carry senior debt credit ratings of ’Aaa’ by Moody’s Investors Service and °AA+’ by Standard and Poor~s. (d) Custodial Credit Risk The Authority assumes revels of custodial credit risk for its deposits with financia[ institutions, bank investment agreements, and investments. For deposits, custodial credit risk is the risk that, in the event of a bank faiture, the Authority’s deposits may not be returned. For an investment, custodia[ credit risk is the risk that, in the event of the faiture of the counterparty, the Authority wilt not be able to recover the value of the investment or co[[aterat securities that are in the possession of an outside party. The Authority has not established a formal custodiat credit risk poticy for its investments. The Authority had no investments registered in the name of a counterparty. (e) Interest Rate Risk Interest rate risk is the risk that the market vatue of investments wit[ dectine as a result of changes in genera[ interest rates. For non-ptedged investments, the Authority mitigates interest rate risk by structuring its investments’ maturities to meet cash requirements, thereby avoiding the need to set[ securities in the open market prior to maturity. For investments herd in trust, investment maturities are structured to meet cash requirements as outtined in its bond indentures and contractuat and statutory agreements. (5) Bonds Receivable The Genera[ Fund inctudes bonds receivabte with interest rates varying from :[% to 5% due from the City of Galena, Kena[ Peninsuta Borough and Kodiak Istand Borough with maturities as follows: Kena[Pen[nsuta Kod[aklstand TotatGeneratFund C[~ of Gatena Borough Borough Bonds Receivabte 2020 $ Z68,798 $ 843,000 $ 50,000 $ 1,061,798 2021 170,494 861,000 50,000 1,081,494 2022 172,207 879,000 50,000 1,101,207 2023 173,937 900,000 55,000 1,128,937 2024 175,684 - 55,000 230,684 2025-2029 156,277 - 290,000 446,277 1,017,397 $ 3,483,000 $ 550,000 $ 5,050,397 -21- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements Bonds rece[vab[e by debt service program at June 30, 2019 mature [n varyi.ng ins[ailments as fottows: annuat Year ending June 30 2005 Genera[ 2010 Genera[ 2016 Genera[ Tota[Princ[pa[ 2020 $ 65,875,000 $ 165,000 $ 5,225,000 $ 71,265,000 2021 64,960,000 170,000 5,485,000 70,615,000 2022 63,345,000 175,000 7,930,000 71,450,000 2023 61,890,000 180,000 8,280,000 70,350,000 2024 59,040,000 185,000 8,690,000 67,915,000 2025-2029 241,600,000 1,030,000 16,570,000 259,200,000 2030-2034 204,525,000 1,235,000 16,460,000 222,220,000 2035-2039 111,970,000 560,000 19,985,000 132,515,000 2040-2044 72,785,000 25,425,000 98,210,000 2045-2049 26,165,000 18,860,000 45,025,000 $ 972,155,000 $ 3,700,000 $ 132,910,000 $ 1,108,765,000 (6) Authority Reserve Funds Derived from Series 2017A Bond Proceeds The Authority deposited bond proceeds from the issuance of the Series 2017A bonds to satisfy the Authority’s 2016 Master Resolution Reserve requirement. The Yukon-Kuskokwim Hearth Corporat[on (2017A Borrower) is obti.gated by the loan agreement to pay at[ interest expense associated with the Ser[es 2017A bonds inctud[ng the bonds that funded the deposit to the 2016 Master Resotut[on. These reserve funds are held by the Trustee until the maturity of the bonds when per the roan agreement proceeds attr[butabte to funding the Authority’s 2016 Master Resotut[on reserve requirement w[t[ be used to repay the 2017A bonds that funded them. The amount [nit[arty required to satisfy the Author[ty’s reserve at t[me of issuance was $6,993,150. (7) Long-Term L[ab[t[t[es The Authority does not have unused tines of cred[t, direct borrowings or direct ptacements, which woutd now be required presentation in accordance w[th GASB Statement No. 88 Certain Disctosures Related to Debt, Inc[ud[ng Direct Borrowings and Direct Ptacements. During the year ended June 30, 2019 the Author[ty’s tong-term [lab[titles changed as fo[tows: Beg[nning Repayments/ End of year New debt Adiustments of year Genera[ ob%ation bonds payabte $ :[,:[4:[,665,000 $ 44,225,000 $ (74,8:[0,000) $ ].,1:[:[,080,000 Totat $ :[,141,665,000 $ 44,225,000 $ (74,8:[0,000) $ :[,:[:[:[,080,000 - 22 - ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Ataska) Notes to Financial Statements Bond Bank’s tong term tiabi[ities consist of the foUow[ng as of June 30, 2019: 2005 Bond Resotution: 2009-Three Series - Juneau, City and Borough of 2.00%-4.00% 2009-A-Four Series 3.00%-4.00% Kenai. Peninsula Borough Ketchikan Gateway Borough 2009-B-Four Series - Ketch&an Gateway Borough 4.63%-5.40% 2010-A-Series One 2.00%-5.00% Ketchikan, City of Ketchikan Gateway Borough Kena[, City of Northwest Arcti.c Borough Petersburg Unataska 20].O-B Series One 5.99%-6.34% Kenai~ City of Northwest Arctic Borough Petersburg Unataska 2010-B Series Two 3.75%-4.91% Juneau, City and Borough of Cordova King Cove, City of 2010-A Series Three 2.00%-4.00% Aleutians East Borough Una[aska King Cove, City of 20].0-B Series Three 4.93%-5.43% Ateutians East Borough Unataska King Cove, City of 2010-A Series Four 2.00%-5.00% Kenai Peninsula Borough Ketchi.kan, City of Ketchikan Gateway Borough Sitka, City and Borough of Sitka , City and Borough of (Refunding) Sotdotna 2010-B Series Four 1.42%-6.26% Kena[ Peninsuta Borough Ketchikan, City of Ketchikan Gateway Borough Sitka, City and Borough of Sotdotna 2011-Series One 3.00%-5.13% Kodiak Istand Borough Wranget[ 2011-Series Two 2.00%-4.38% Juneau, City and Borough of Sitka, City and Borough of Debt Service Account Principal Interest rate outstanding Statutory Reserve Account Ordinary Reserve Sub-Account Principal Interest rate outstanding 1,440,000 2.00%-4.00% $ 495,000 3.00%-4.00% 430,000 18,600,000 1,895,000 7,320,000 9,335,000 525,000 6,900,000 10,940,000 42,270,000 5,590,000 5,060,000 (continued) -23 - ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements Debt Service Account Principal Issue Interest rate outstanding 20$1-Series Three 2.00%-5.00% $ 39,405,000 Wrangell Aleutians East Borough Northwest Arctic Borough Ketchikan Gateway Borough Kenai Peninsula Borough Cordova Hoonah Skagway Seward Kodiak Island Borough 20$2-Series One 2.00%-5.00% 4,240,000 Juneau, City and Borough of (Wildftower Court) Juneau, City and Borough of 20$2-Series Two $.75%-5.00% 24,690,000 Juneau, City and Borough of Ketchikan, City of Ketchikan Gateway Borough Kodiak Istand Borough Nome, City of North Pole, City of Palmer, City of Petersburg Sitka, City and Borough of Valdez 20$2-Series Three $.50%-5.00% 10,900,000 Juneau, City and Borough of (SchooD Juneau, City and Borough of (REF) Petersburg Haines Borough 20:13~Series One 2.00%-5.00% 82,050,000 Juneau, City and Borough of (Hospital Rev REF) Juneau, City and Borough of Kenai Peninsuta Borough Ketcbikan Gateway Borough Kodiak Island Borough Sand Point, City of Sitka, City and Borough of (Harbor) Sitka, City and Borough of (Etectric) 20$3-Series Two A 2.00%-4.00% $4,330,000 Homer, City of Ketchikan, City of Ketchikan, City of (REF) Skagway 20$3-Series Two B 3.00%-4.00% $2,$30,000 Kodiak Island Borough 20:13 Series Three :1.50%-5.00% 62,$20,000 Juneau, City and Borough of Kenai Peninsula Borough Lake and Peninsula Borough Sitka, City and Borough of 2014-Series One A 0.38%-5.00% 47,130,000 Juneau, City and Borough of Kodiak Island Borough Kenai Peninsula Borough- Exempt Kenai Peninsuta Borough- Taxabte 2014-Series Two A 3.00%-5.00% 42,590,000 Ketch&an, City of (Harbor) Ketchikan, City of (Hospita[) King Cove, City of Statutory Reserve Account Ordinary Reserve Sub-Account Principal Interest rate outstanding 2.00%-5.00% $ 1,390,000 (contu~ued) - 24 - ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements Debt Service Account Principal. Issue Interest rate outstanding 2014-Series Three 1.25%-5.00% $ 47,115,000 City & Borough of Juneau City of Saxman City & Borough of Sitka City of Adak (REF) lunicipa[ity of Ancorage (Rev REF) Haines Borough (REF) Kenai Peninsula City of Nome (REF) Northwest Arctic Borough (REF) Petersburg Borough (REF) City of Seward (REF) City of Seward (REF) - 2 2015-Series One 2.00%-5.00% 44,000,000 City of Craig - New Money City of Cordova - New Money City of Cordova (REF2005A) City of Ketchikan (REF2005A) Northwest Arctic Borough (REF2OO5A) City and Borough of Sitka (REF2OOSA) City of Unalaska (REF200SA) Ketchikan Gateway Borough (REF2OOSE) Aleutians East Borough (REF2006A) City of Nome (REF2006A) City of Wrangell (REF2OO6A) City and Borough of Sitka (REF2008-2) City of Una[aska (REF2009-1) City of Cordova (REF2009-2) City of Nome (REF2009-2) 201S-Series Two 2.00%-S.00% 50,665,000 City of Cordova - CC Municipality of Skagway - PSB City and Borough of Juneau - PP Municipality of Skagway - PP City and Borough of Juneau - School City and Borough of Juneau (REF2007-3) Kenai Peninsula Borough (REF2007-4) 2015-Series Three 2.00%-S.25% 93,485,000 University of Alaska Haines Borough Kodiak Island Brough - Schoot Kodiak Island Borough - R&R King Cove, City of 2016-Series One 2.00%-5.00% 30,830,000 Kenai Peninsula Borough CES 7-Year Loan Kena[ Peninsula Borough CES 15-Year Loan City of Klawock Kodiak Island Borough - R&R Kodiak Island Borough - School City of Seward (REF2008-1) City of Seward (REF 2008-2) 2016-Series Two 3.00%-5.00% $1,925,000 Fa[rbanks North Star Borough Ketchikan, City of Statutory Reserve Account Ordinary Reserve Sub-Account Principal Interest rate outstanding $ (continued) -25 - ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements 2016-Series Three City of Petersburg 2007 One Current Refunding City of Nome 2007 One Refunding Northwest Arctic Borough 2007 One Refunding City of Seward 2007 One Refunding City of Wasilta 2007 One Refunding City and Borough of Sitka 2007 One Refundl‘ng Aleutians East Borough 2007 Two Refunding Kenai Peninsu[a Borough 2007 Two Refunding City of Bethel 2007 Three Refunding City of Kodiak 2007 Five Float Refunding City of Kodiak 2007 Five Lift Refunding City of Di~tingham 2008 One Loan Refunding City of Kodiak 2008 One Loan Refunding Kodiak Island Borough 2008 One Loan Refunding City of Skagway 2008 Two Loan Refunding City of Kodiak 2009 One Loan Refunding City and Borough of Juneau 2006B Refunding City and Borough of Juneau New Money 2016-Series Four City of Ketchikan Port 2006 Two Loan Refunding City of Ketchikan Port New Money 2017-Series One Kenai Peninsul‘a Borough Hospital Loan City of Seward Kenai Peni.nsu[a Borough Solid Waste Loan 2017-Series Two City of Una~aska City of Whittier 2017-Series Three Central‘ Peninsula Hospital District 2018-Series One Sitka Airport Loan Sitka Harbor Loan 2019-Series One Fai.rbanks North Star Borough - Tax-Exempt City of Homer Pol‘ice Station Northwest Arctic Borough Loan to Kivatina SE Alaska Power - Refunding City of Dillingham 2019-Series Two Fairbanks North Star Borough - Taxable Total 2005 Bond Resol‘ution Debt Service Account Prindpa[ Interest rate outstandinq 2.00%-5.00% 63,715,000 2.00%-5.00% 26,850,000 2.50%-5.00% 10,525,000 3.63%-5.00% 31,530,000 3.00%-5.00% 28,060,000 5.00% 11,840,000 5.00% 28,445,000 2.65%-3.600% Statutory Reserve Account Ordinary Reserve Sub-Account Principal. Interest rate outstanding 3,710,000 972,155,000 3,700,000 3,700,000 32,195,000 100,715,000 132,910,000 $ 1,108,765,000 2,315,000 $ 2,315,000 2010 Bond Resolution: 2010-A-1 Series One - Ketchikan Gateway Borough 20t0-A-2 Seri.es One - Ketchikan Gateway Borough Total 2010 Bond Resolution 3.00%-4.00% 5.78%-6.86% 2016 Master Bond Resolution: 2016-Series A - Tanana Chiefs Conference 2017 Series A - Yukon-Kuskokwim Health Corporation Total 2016 Master Bond Resolution Tota[ Long-Term Liabitities 5.00% 3.00%-5.50% - 26- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements bonds are secured by bonds rece[vabte and by amounts in the reserve account. The Act further provides that [f an author[zed borrower defaults on its pr[nc[pa[ and/or interest payments, upon written notice by the Authority, the State of Alaska must consider paying to the Authority a[[ funds due from the defaulting authorized borrower from the State in an amount sufficient to clear the default. The Bond Bank Executive Director is obligated per resolution to seek and the State may provide an appropriation annuat[y to replenish reserves. The above bonds mature in varying annual [nstattments. The maturit[es at June 30, 2019 are as fot[ows: 2005 Resolution 2010 Resolution 2016 Resolution Year ending June 30 Genera[ Reserve Genera[ Genera[ 2020 $ 65,875,000 $ 925,000 $ 165,000 $ 5,225,000 2021 64,960,000 170,000 5,485,000 2022 63,345,000 235,000 175,000 7,930,000 2023 61,890,000 1,155,000 180,000 8,280,000 2024 59,040,000 185,000 8,690,000 2025-2029 241,600,000 1,030,000 16,570,000 2030-2034 204,525,000 1,235,000 16,460,000 2035-2039 111,970,000 560,000 19,985,000 2040-2044 72,785,000 25,425,000 2045-2049 26,165,000 18,860,000 $ 972,155,000 $ 2,315,000 $ 3,700,000 $ 132,910,000 Year ending June 30 TotatPrincipa[ Tota[Interest 2020 $ 72,190,000 $ 51,113,569 2021 70,615,000 47,909,728 2022 71,685,000 44,663,723 2023 71,505,000 41,293,511 2024 67,915,000 37,924,392 2025-2029 259,200,000 148,187,979 2030-2034 222,220,000 90,689,926 2035-2039 132,515,000 49,787,262 2040-2044 98,210,000 23,878,050 2045-2049 45,025,000 3,913,360 $ 1,111,080,000 $ 539,361,500 (8) Conduit Debt Under the Coasta[ Energy Loan Program (Program), the Authority issued $5,000,000 1986 Series A Coastal Energy Bonds (Bonds) payable to the National Oceanic and Atmospheric Administration (NOAA). The proceeds of these bonds were used to purchase port revenue bonds from the City of Nome. The City of Nome entered into a tripartite agreement with NOAA and the Author[ty effective August 2, 1994 to defer payment of the pr[nc[pa[ and accrua[ of interest for ten years. Effect[ve January 29, 2009 a second amendment to the tripartite agreement was executed. The amendment authorized the issuance of 2009A Bonds for the purpose of refunding by exchange the outstanding City of Nome, Alaska, Port Revenue Bond 1986Ser[esA. As of June 30, 2019 the aggregate amount outstand[ng for condu[t debt obligations was $3,876,460. - 27- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements Also under the Program, the Authority issued $6,563,000 1987 Series A Coastal Energy Bonds payable to NOAA. The proceeds of these bonds were used to purchase port revenue bonds from the City of St. Paul The City of St. Paul entered into a tripartite agreement with NOAA and the Authority effective December 14, 2000 to modify and defer payment. As of June 30, 2019 the aggregate amount outstanding for the City of St. Paul conduit debt obligations was $6,005,878. The related loan payabtes do not represent a genera[ obligation of the Authority as they are payabte only from proceeds received from the City of Nome and St. Paul respectively. Payment of principal and interest on the Bond Bank’s Coastal Energy Bond is not secured by a pledge of any amounts herd by or payable to the Bond Bank under the Genera[ Bond Resolution, including the Reserve Account, and is not in any way a debt or liability of the Bond Bank and according[y, are not included in the basic financial statements. The Coastal Energy Bonds and related accounts are inctuded in the Bond Bank’s statutory tim[t for total bonds outstanding. (9) Commitments During 2011 State Leg[stature appropriated $2,450,000 to Bond Bank to issue a 15-year, one percent [nterest roan to the City of Galena to retire existing debt obtigat[ons and make certain utility improvements. The intent of the legislature was that loan repayments made for the loan be paid into the State of Alaska Genera[ Fund in accordance with the prov[si.ons of the AS 44.85.270(h). The amount of receipts avaitab[e to the Authority during fiscal year 2019 as discussed in Note 2(d), inctuded $167,119 of City of Gatena loan repayments for the year ended June 30, 2019. There were no excess receipts over operating expenditures during fiscal year 2019. The amount of Authority receipts determined under AS 44.85.270(h) and, as discussed in Note 2(d), available for transfer by the Authority and appropriation to the Bond Bank Authority Reserve Fund under AS 44.85.270(a) was $-0- for fiscal year 2019; the cumulative state appropriated amount, therefore, remained $33,396,046 at June 30, 2019. The entire Custodian Account balance is available for appropriation, at any time, by the State Leg[stature. (10) Subsequent Events Subsequent to June 30, 2019, the Bond Bank has not issued additional bonds. At a meeti.ng on September 5, 2019, the Bond Bank Board of Directors approved a resolution authorizing the i.ssuance of the 2019 Series Three, Four, and Five bonds. The Bond Bank anticipates the issuance of the 2019 Series Three, Four, and Five bonds before the end of calendar year 2019. Subsequent to June 30, 2019, the outstanding Bond Bank Series 2016A Bonds, in the amount of $32.195 mitt[on were defeased on August 6, 2019. Escrow ob[igat[ons, together with additional funds, have been deposited with the Bond Bank’s Trustee as escrow agent to be used to sat[sfy such defeasance. The Series 2016A Bonds maturing on or after April 1, 2021, wit[ be opt[ona[[y redeemed on October 1, 2020. - 28- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements (11) Recent Accounting Pronouncements The Bond Bank implemented GASB Statement No. 88 - Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements in fi.sca[ year 2019. There was no significant impact on the financia[ statements of the Bond Bank. There are several recently issued Governmental Accounting Standards Board standards that the Bond Bank must consider with upcoming implementation dates as follows: ¯ GASB 84- Fiduciary Activities. Effective for fiscal years beginning after December 15, 2018. ¯ GASB 87- Leases. Effective for fiscal years beginning after December 15, 2019. ¯ GASB 89 - Accounting for Interest Cost Incurred before the End of a Construction Period Effective for fiscal years beginning after December 25, 2019. ¯ GASB 90 - Majority Equity Interest - an Amendment of GASB Statement No. J4 and No. 6J- Effective for reporting periods beginning after December 15, 2018. ¯ GASB 92 - Conduit Debt Obligations. Effective for reporting periods beginning after December 15, 2020. Currently, the Bond Bank does not expect any of these standards to have any significant impact on the financial statements of the Bond Bank. -29- Supplemental Schedule ALASKA MUNICIPAL BOND BANK AUTHORITY (A Component Unit of the State of Alaska) Supplemental Schedule of Statutory Reserve Accounts - Assets, Liabilities, and Account Reserves June 30, 2019 2005 Resolution 2010 Resolution 2016 Resoluti.on ASSETS Cash $ 902,175 $ 14,565 $ 17,474 Accrued interest receivable 239,067 2,010 37,969 Marketable securities 43,544,952 397,154 7,025,893 Total Assets $ 44,686,194 $ 413,729 $ 7,081,336 LIABILITIES Accrued interest payable $ 37,688 $ $ Interaccount payables 9,474,872 16,051 4,101 Bond proceeds held in reserve 6,993,150 Bonds payable 2,315,000 Total Liabilities 11,827,560 16,051 6,997,251 RESERVES State appropriated 28,046,530 393,086 Unappropr[ated 3,134,525 1,464 Unrealized gain (loss) 1,677,579 3,128 Total Reserves Total Liabilities & Reserves 32,858,634 397,678 $ 44,686,194 $ 413,729 Total $ 934,214 279,046 50,967,999 $ 52,181,259 $ 37,688 9,495,024 6,993,150 2,315,000 18,840,862 28,439,616 3,135,989 84,085 1,764,792 84,085 33,340,397 $ 7,081,336 $ 52,181,259 See Independent Auditor’s report - 30- Continuing Disclosure Tables Pursuant to the Securities and Exchange Commission Rule :~5c2-:[2 and the Author[ty’s continuing disclosure undertakings, the Authority is obligated to provi.de annual financial information. In addition to annual financial statements the Authority must provide a statement of authorized, issued and outstanding bonded debt, reserve fund balances, and government unit statistics in substantially the same form as Appendix C of official statements of the Authority. The following supplemental information related to the 2005, 20:~0 genera[ and 20:~6 master resolutions is provided in compliance with the Appendix C filing requirement. ALASKA MUNICIPAL BOND BANK AUTHORITY (A Component Unit of the State of Alaska) Supplemental Schedule of 2005 Bond Resolution Program - Borrower Concentration June 30, 2019 Outstanding Percent of Borrower Par Outstanding City and Borough of Sitka $ 141,270,000 14.53% Kena[ Peninsuta Borough 121,970,000 12.54% City and Borough of Juneau 103,695,000 10.66% City of Ketchikan 87,995,000 9.05% University of Ataska 84,525,000 8.69% Kodiak Island Borough 79,945,000 8.20% Fairbanks North Star Borough 61,400,000 6.31% City of Una[aska 57,285,000 5.89% Northwest Arctic Borough 31,390,000 3.23% City of Seward 30,935,000 3.18% Ketchikan Gateway Borough 26,165,000 2.69% Aleutians East Borough 20,450,000 2.10% Municipatity of Skagway 18,455,000 1.90% Lake & Peninsula Borough 15,145,000 1.56% City of Cordova 14,245,000 1.47% City of Kodiak 11,845,000 1.22% City of Di[[ingham 11,215,000 1.15% Haines Borough 9,040,000 0.93% Petersburg Borough 8,235,000 0.85% City of Homer 7,0]_5,000 0.72% SE Alaska Power Agency 4,245,000 0.44% City of Nome 3,285,000 0.34% Municipality of Anchorage 3,240,000 0.33% City of King Cove 2,455,000 0.25% City of Sand Point 2,230,000 0.23% City of Whittier 1,875,000 0.19% City of Bethel 1,835,000 0.19% City of Va[dez 1,765,000 0.18% City of So[dotna 1,670,000 0.17% City of Craig 1,570,000 0.16% City of K[awock 1,270,000 0.13% City of Kenai 1,260,000 0.13% City of Hoonah 880,000 0.09% City of North Po(e 615,000 0.06% City of Palmer 555,000 0.06% City of Adak 530,000 0.05% City and Borough of Wrangell 510,000 0.05% City of Saxman 145,000 0.01% Reserve Obligations 2,315,000 0.24% Total Outstanding Par $ 974,470,000 100.00% See Independent Auditor’s report -31- ALASKA MUNICIPAL BOND BANK AUTHORITY (A Component Unit of the State of Alaska) Supplemental Schedule of 2005 Bond Resolution Program - Debt Service Requirements June 30, 2019 Borrower City and Borough of Juneau - 2009 Three Loan Ke[chikan Gateway Borough - 2009 Four Loan City of Kenai - 20[0 One Loan Ketchikan Gateway 8orough - 2010 One Loan Northwest Aletic Borough - 2010 One Loan Petersburg Borough - 2010 One Loan City Of Una[aska - 2010 One Loan City and Borough of Juoeau - 20[0 Two Loans City ot Cordova 2010 Two Loan City of King Cove 20[0 Two Loan Aleutians East Borough - 2010 Loan City of Ku~g Cove 20[0 Ti~ree Loan City ol Una[aska 2010 Three Loan Kenai Peninsula Borough 2010 Four Loan City of Ketchikan 20]0 Four Loan Ketchikan Gateway Borough 2010 [our Loan Oty and Borough of S~tka 20]0 Fou~ ( oan City of Sotdotna 20[0 Four Loan City and Borough Of Wrangell 2011 One t oan Juneau 2012 Three Refunding Juneau 2012 Three School ConstrucOon 2020 2021 2022 2023 2024 L468,800 1,743,479 1,731,390 1,722,642 L707,107 1,694,654 172,704 172,0!1 171,018 164,725 163,433 728,000 280,765 284,565 281,315 276,127 275,640 234,894 234,794 238,694 235,849 232,010 425,949 426,549 424,299 424,017 417,835 t,!07,744 2,472,665 1,820,539 1,779,639 1,517,673 4&188 46,070 42,540 41,363 40,155 38,847 42,319 397,966 392.943 390,877 383,441 380,636 59,680 58,205 61,359 59,389 57,419 433,605 432,617 429.319 420,652 416,616 1,411,775 1.395,269 1,376,201 1.358,946 1,338,264 603,500 597,854 586,163 578,214 568,842 315,233 314,574 308.091 300,753 292,534 4,047~570 4,058,570 4,050,648 4.038,926 4.030,419 211,752 206,311 205,509 199,279 197,602 27,000 2&O00 622,800 623,600 623,800 625,513 626,275 659,600 655,200 407,590 407,390 411,790 407,690 408,071 226000 231,625 230,625 1,617,850 967,375 958,750 953,250 615,900 616,875 614,000 609,875 2,492,700 2,488,875 2,485,000 2,485,625 1,681,000 3,521,000 3,525,500 3,528,625 3,533,750 3,520,875 56,250 54,000 56,375 90,500 93,125 90,375 92,500 89,500 30t.550 301,625 300,125 298,125 300,500 35,900 35,000 34,000 37,875 36,625 244,350 244,275 243,400 242,275 245,775 t,555,825 437,725 484,575 534,966 583,463 352.019 355,894 355,344 354,294 351,544 681,625 1.439,025 1,442,275 1.433,950 1,433,125 1,433,250 147,950 146,825 146,100 150,000 133,250 100,775 I01,900 t03,200 104,250 99,750 104,850 105,725 106,800 107,625 107,750 488,125 488,375 489,750 485,250 468,125 1,455,650 1,456,650 1,451,200 1,453,000 1,450,375 343,725 340,225 342,550 344,125 343,500 85,344 82,844 85,219 87.344 84,344 937,125 948,625 947,875 959,750 973,750 1,363,625 1,364,875 1,363,125 1,363,250 2O25 1,684,964 161,840 269,552 227,870 411,055 1,742,096 40,652 372,462 55,449 407,211 L314,029 562,857 288,269 4,000,527 195,333 626,088 431,271 91,700 298,600 35,500 244,600 442,172 353,169 1,435,000 100,125 107,625 246,000 630,375 317,750 86,544 2026 1,664,500 159,948 268,t66 228,281 403,675 38,985 368,918 53,479 397,559 1,291,441 550,401 282,919 3,930,489 192,515 624,950 408,871 89.100 302,500 34,500 243,900 491.063 357,306 101,375 83,944 2027 1,652,551 152,339 260,484 222,947 399,652 37,246 359,283 56,271 396,616 1,264.032 540,902 B,845,859 188,948 622,863 411,071 91,400 300,900 33,500 243,000 353~894 86,594 2028 1,633,521 149,730 257,485 217,009 389,678 40,283 353,530 53,827 389.233 1,232.410 529,470 3.758.179 184,721 623,006 407,671 88,250 37,250 241,125 354~703 84,494 2O29 1,617,708 146,804 253,852 215.595 384,070 38,170 342,370 51,383 376,444 1.203,756 512.257 3.669.087 180,180 621,869 408,526 89,625 35,750 243,125 354,819 87,272 (continued) See Independent Auditor’s report -32 - Borlowel Petersburg Borough 2012 Three Kenai Peninsula Borough {Sear Oeek Fire) 2013 One City and Borough of Juneau {Bat~Iett Hospital) 2013 One City and Borough of Juneau 2013 One Ketchikao Gateway Sorough 2013 One Kodiak Is(and Borough 2013 One City of Sand Point 2013 One City and Borough of Sitka (Harbor) 2013 One City and Borough of Sitka (Etectdc) 2013 One City of Homer 20!3 Two City of KetchJkan 2013 Two Kodiak Island Borougl~ 2013 Two Municipality of Skagway 2013 Two City and Borough of Juneau 2013 Three Kenai Peninsula Sorough Lake and Peninsula Borough 2013 Three City and Borough of Sitka 2013 Three Kenai Peninsula Bolough 2014 One Kodiak Island Borough 2014 One City and Borough Of Juneau 2014 One Oty of Ketchikan Hospital (G.O.) 2014 Two City of Ketchikan Harbor ~G.O) 2014 Two CiW of King Cove Electdc 2014 Two City of Cordova 20t5 One 2005 Refunding Nome 2015 One 2006 Refunding Cordova 2015 Two ALASKA MUNICIPAL BOND BANK AUTHORITY (A Component Unit of the State of Alaska) Supplementa[ Schedule of 2005 Bond Resotut(on Program - Debt Service Requirements June 30, 2019 2020 2021 2022 2023 101,500 102,875 104,000 104,875 105.500 94,520 97,520 95,320 93,120 95,920 1,661,863 1,661,513 1,666,713 1,665,313 1,667,513 204,610 200,210 200,810 201,210 201,410 608,400 607.600 611,000 608,400 1,687,590 1,691,790 1,689,390 1,690,590 1,690,190 181,680 183,680 180,480 182,280 183,880 310,150 308,550 311,750 309,550 312,150 1,757,360 1,757,360 1,757,360 1,757,360 1,757,360 289,300 293,300 291,900 290,300 293,500 1,072,250 1,069,850 1,071,650 1,072,450 1,077,250 1,272,938 1,274,338 1,274,538 1,275,788 1,280,038 68,200 71,800 70,200 68,600 72,000 903,650 902.125 902,O00 905,000 902,000 1,626,600 1.627,325 1,628,500 1,627,675 1,630,175 1,423,900 1,423,250 1,424,250 1,423,500 1,422,000 1.274,975 1,274375 1.274,975 1,274.975 1,274,975 2,960,062 2,959,103 2,955,849 2,957,500 2,955,500 1.775.113 1,772,113 1,776,363 1,773,113 1,772,613 406.538 403.138 404,638 405,638 406.138 2,551,700 2,552,700 2,556,450 2,557,700 2,556,450 205.550 205,300 204,800 209,050 207,800 163,800 42,050 41,050 40,050 39,050 909.000 911,375 907,625 907,750 911,500 816,250 816.250 816,250 816,250 816,250 12,125 11,875 II,625 11,375 16,000 104,500 100,500 101,375 102,000 102,375 298,500 296,375 294,000 296,250 298.000 1.195,375 ],191,125 ].194,625 1,190,750 1,189,500 180.000 183,250 ]8t,125 178,750 181,000 269.625 269,125 268,t25 266,625 269,500 448.875 447,250 449.750 446,375 447.125 401,000 401,125 400,500 399,125 401.875 104,125 105.250 106,125 106,750 107,125 320.475 318,975 316,975 319,350 320.975 134,125 136.075 132,575 133,950 135,075 193,800 593,350 1,354,000 1,348,500 t,345,875 1,345,875 134.288 136,238 132,738 134,113 135,238 250.400 251,375 255,750 269,125 169,125 83,950 86,125 87,750 89,125 90,250 49,100 52,625 50,875 49,125 52,250 1,630,400 1,640,000 397,800 535,075 533.500 539,125 538,625 537,688 392,700 1,852,438 1,853,125 1,849,844 1.848,994 1,846,138 24],250 240,875 212,650 212,400 211,900 211,150 213,750 2025 101,450 92,920 1,668,263 200,160 1,687,690 184,380 307,400 1,757,360 294,500 1,079,250 1,027,038 69,750 1,630,175 1,423,375 1,274,975 2,958,250 1,769,613 406,138 2,557,700 206,300 38,050 908,875 816,250 15,500 102,500 294,375 1.190,625 177,875 271,625 442,000 398,750 102,375 321.850 135,950 1,343,375 136,113 117,500 86,250 50,250 536,000 1,841,825 212,500 2026 102,750 94,920 1,667,663 203.660 1,687,690 184,630 307,400 1,757,360 295.000 1,079,500 1,024,538 67,500 1,627,675 1,422,500 1,274,975 2,959,500 1.774,925 404,575 2,561,200 209,550 37,050 909,875 816,250 15,000 290,500 1,189,000 179,375 445,875 399,750 102,500 637.100 136,575 L343,250 136~738 97~375 87.125 48.250 537,875 1.840.$75 211,000 2027 99,425 96,670 1,673,913 201.660 1.689.940 184,630 306.900 1,757,360 295.000 1,078,000 1,025,538 70,250 1,627,550 1,419,375 1,274,975 2,957,750 1,772,425 403,825 Z561,700 207,300 41.050 909,375 8t6,250 14,500 291,250 136,950 1.330.625 137,113 51,125 533,625 1,841,200 214,250 2028 I01,500 93,170 1,676,063 199,410 1,689,190 184,380 310,900 1,757,360 294.500 1,079,750 1,024,788 67,750 1,629,550 !,423,750 1,274,975 2,960.000 1,772,175 407,575 2.559.200 209,800 39,800 907,375 816,250 14,000 296,375 137,075 1,325,500 137,238 53,750 538,125 1,833,700 212,000 2029 94,670 1,673,625 201.910 1,690.440 183,880 309,150 1,757,360 293,500 1,079,S00 1.027,288 70,250 1,628,550 1,420,500 1,274,975 2.955,750 1,773.925 405,575 2,556.800 208.400 38,800 908,750 816,250 13,500 29].000 136350 1,327,375 137,113 51,250 1.837,825 214,500 (continued) See Independent Auditor’s report -33 - ALASKA MUNICIPAL BOND BANK AUTHORITY (A Component Unit of the State of Alaska) Supplemental Schedule of 2005 Bond Resolution Program - Debt Service Requirements June 30, 2019 Borrower Skagway 2015 Two Cily and Borough of ;uneau 2015 Two (G.O Refunding’, City and Borough of Juneau 2015 Two (Harbor Refunding’, Kenal Peninsula Borough 2015 TWO Juneau 2015 Two (Ouise Doc<) Skagway 20~5 Two (Port) Un[ve, sdy O[ Alaska 20!5 Three Haines Borough 2015 Three Kodiak Island Borough 20~5 Three H~gl~ School Kod~a~ Is{and Borough 20] 5 Ti~ree Re~ewai & Replace King Cove 2015 Three Kena[ PemnsLda Borough CES 7-Year Loan - 2016 O~e Kenm Peninsula Borough CES ] 5-Yea~ Loan ~ 2016 One C~ty of K[awock New ~oney Loan - 20~6 One Kodmk Island Borough R&R Loan - 20[60t]e Kod(ak Island Borough High S(t~oot Loan - 2016 One C~ty of Seward 2008 One Refunding - 20[6 One C~ty of Seward 2008 Two Refundh~g - 20[6 One Faubanks Nolth Star Borough - 20~6 Two City o~ Petersburg 2007 One New Noney Refunding - 20~6 Three City of Petersburg 2007 One Current Refunding - 2016 Three City of Nome 2007 One Refunding - 20[6 Three Northwest Archc Borough 2007 One Refunding - 2016 Three Ctty of Seward 2007 One Refund{rig - 2016 Three Aleutians East Borough 2007 Two Refunding - 20~6 Three Kena[ Peninsula Borough 2007 Two Refundhlg - 2016 Three C~ty o{ Bethel 2007 Three Refunding - 20~6 Three Cky of Kodiak 2007 Five Float Refund(rig - 2056 Three C~ty of Kod~a~ 2007 Five Lift Refunding - 2016 Thee City of Oillingham 2008 One Loan Refunding - 2056 Three C~ty of Kodiak 2008 One Loan Refunding - 2056 Thee KocBa~ island Borough 2008 One Loan Refunding - 20~6 Three CKy of Skagway 2008 Two Loan Refund(ng - 20~6 Tlvee City of Kodiak 2009 One Loan Refunding - 2016 Three Cdy a~d Borough of Juneau 20068 Refunding - 2016 Three City and Borough of Juneau New Money - 2016 Three City of Ketch&an Port 2006 Two Loan Refund(ng - 2016 Fou~ City of Ketchikan Port New Money - 2016 Fou~ Kenm Pen~nsuta Borough Hospital Loan - 2017 One Kenai Pe~insuia Borough So[~d Waste Loan - 2017 One C~ty of Seward - 2017 One C~ty of Una~aska - 2017 Two City of Wt~dtJer * 20[7 Two Kenm Peninsula 8orough Centra~ Hospital ~ 20~7 Three SKka Harbor - 20[8 One S~tka A{rport - 2018 One D[[Bngham Fire - 20~9 One D{tt[ngi~am Street - 2019 One Fahbanks North Star Borough - 2019 One City of Homer - 2019 One Northwest A~ct[c 8o{ough - 2019 One Southeast Alaska Power Agency - 2019 One Fabbanks North Star Borough - 2019 Two Total Loan Obligation Debt Service 2020 684,400 708,750 738,100 1,097,300 1.688.250 363,438 5,589,588 91,300 491.838 222.500 48.588 89,125 177,813 85,950 677.750 132,169 1,458,256 341,075 4,113,275 84,400 138,200 174,900 1,188,800 232,000 1,608,050 119,350 253,050 115,1!3 218,550 1,060,550 450,450 619,250 357,700 61,431 3,849,800 332,700 2,215,500 145,875 397,669 1,063,500 210,056 2,O13,350 159,025 2,061,663 589,750 337,250 42,673 235,594 287~449 394,431 866,492 981,660 446,920 110,184,838 2021 2022 2023 2024 2025 2026 2027 2028 2029 682.900 680,900 683,400 683,100 684,600 680,350 680,600 680,100 683,850 738,350 737,600 740,850 741.650 1,090,800 1,092,800 1,092,800 1,091,000 1.692,250 1,689,000 1,688,750 1,686,250 359,688 360,688 361,188 361,188 5,585,838 5,587,838 5,590,213 5,587,838 89.300 92175 89,925 92.550 490.838 494,213 491,963 494,088 224.250 225.500 226,250 226,500 72,963 76,588 75,088 73,588 90~250 86.250 87,125 177.188 176,313 175,188 178,688 88,825 86,575 84,325 86,950 677,625 676,250 678,500 674.375 133.544 134,669 130,669 131,544 1,455,756 1.451,256 1,444,756 1.446,OO6 337,700 338,950 339,700 339,950 4,111,900 4,110,150 4,112,650 4,109,150 86,900 84,300 81,375 83,000 142.800 168.300 1,183,200 228,500 234,600 1.616,550 1,683,050 1,895,625 2,044,875 726,950 726,650 722,000 722,625 251,150 253,950 250,500 255,625 I12,913 t15,613 1!2,913 114,788 219,650 220,550 220,700 220,075 1,061,550 1,066,250 1,065,500 1,O64,O00 45t,650 447,550 446,950 449,575 617,350 619,750 619,000 619,875 357,900 357,700 355,750 356,875 60,231 59,031 62,556 60,806 3,784,100 4,029,000 333,100 333,100 331,375 332,750 2,210,375 2,207,875 2,207,750 2,204,875 142,625 144,250 145,625 141,875 400,919 398,419 400,419 401,669 1,064,750 1,063,750 !,060,500 209,806 209,306 208,556 207.556 2,014,100 2,013,100 2,015,350 2,010,600 155,525 157,025 158,275 154.275 2,058,288 2,062,413 2,058,913 2,057,788 589,750 584,250 588,500 587,000 335,500 333,500 336.250 333,500 47.000 46,000 45,000 44,000 236,500 236,750 231,750 231,750 288,250 288,250 288,250 288,250 395,500 395,500 395,000 39<000 871,750 869,500 871,500 872,500 978,750 978,500 981,250 981,750 448.501 449,151 449.088 448,288 106,390,079 5 101,860,873 $ 97,484,397 $ 91,742,604 743,150 738,400 737,650 735,650 737,400 1,093,250 1,088,250 1,091,250 1.086,750 1,686,500 1,689,250 1,689.250 1,686.500 1,691.000 360,688 359,688 363,188 360,938 363,188 %590,463 5,587,838 5.589.713 5,585,835 5,585.963 90.050 92,425 89,675 91,800 93,675 490,588 491,463 491,588 490,963 489.588 226,250 225,500 76,963 75,213 73.463 76,588 74,588 176,813 179,563 179,263 179,513 178,013 89,325 91.450 89.350 87550 85,150 678,750 676,500 132,169 132,544 134,169 131,169 132,069 1,439~881 1,441,256 1.452.256 1,437,356 1,434656 334,825 339,200 341,400 339,400 334,900 4,109,400 4,112,900 4,109,400 4,1 i0,000 4.11 !.775 79,500 80,875 82.000 2,119,750 2,167,375 2,193,625 2,209.000 2,208,875 250,250 249,500 253,125 251,125 111,538 113,163 114,538 110,788 116,788 219,200 218,075 216,700 215,075 218,075 1,060,500 1,064,750 1,066,500 1.060,875 451.450 447,700 448,325 453,075 447,075 619,500 622,750 619,625 620,125 357,250 356,875 355,750 358,750 59,056 62,181 60,181 63,056 60,806 328,500 328,625 328,000 2,204,125 2~200,375 2.198,500 2,198.250 2,199.375 143,000 143,875 144,500 144,875 145,000 399,419 399,669 399,169 397,919 402,719 209,431 207,931 206,181 209,181 209,681 2,014100 2,010,350 2,014.600 2,01!,350 2.010,850 155,275 156,025 156,525 156,775 156,775 2,058,788 2,061,663 2,061,288 2,062.538 2.060.288 590,000 592,250 593,750 589,500 589,750 335.500 337,000 333,000 333.750 334.000 43,000 47,000 45.750 44,500 43,250 231,500 236,000 235,000 233,750 232,250 288.250 288.250 288,250 288,250 363,250 397,500 395.250 392.500 394,250 395.250 872,500 871,500 874,500 871,250 872,000 446,818 81,447,150 449,544 $ 76,847,675 446,430 447,660 372,960 71,782,378 $ 70,858,331 5 66,646,855 See Independent Auditor’s report - 34 - ALASKA MUNICIPAL BOND BANK AUTHORITY (A Component Unit of the State of Alaska) Supptementa[ Schedule of 2010 Bond Resolution Program - Borrower Concentration June 30, 2019 Borrower Ketchikan Gateway Borough Total Outstanding Par Outstanding Percent of Par Outstanding $ 3,700,000 100.00% $ 3,700,000 100.00% See Independent Auditor’s report - 35- Borrower Ketchikan Gateway 8orough Total Loan Obligation Debt Service ALASKA MUNICIPAL BOND BANK AUTHORITY (A Componer~t Unit of the State of Alaska) Supplemental Scbedute of 20].0 Bond Resolution Program - Debt Service Requirements June 30, 20].9 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 400,474 8 395,791 S 390,819 S 385,558 S 380,007 $ 374,168 $ 372,895 $ 365,080 $ 360,667 S 350,740 400,474 395,791 S 390,819 S 385,558 5 380,007 S 374,168 5 372,895 S 365,080 $ 360,667 S 350,740 See Independent Auditor’s report - 36- ALASKA MUNICIPAL BOND BANK AUTHORITY (A Component Unit of the State of Alaska) Supplementa[ Schedule of 2016 Master Resolution Program - Borrower Concentration June 30, 2019 Borrower Tanana Chiefs Conference Yukon-Kuskokw[m Health Corporation Total Outstanding Par Outstanding Par $ 32,195,000 100,715,000 $ 132,910,000 Percent of Outstanding 30.47% 69.53% 100.00% See Independent Auditor’s report - 37- Total Loan Obl(gation Debt Sew{ce Ai ASKA MUNICIPAL BOND BANK AUTHORITY (A Component Und of the Stale of Alaska) Supplemental Schedule of 2016 Master Resolution Program - Debt Service Requiremenls June 30, 2019 2021 2022 2023 2024 4,833,238 6,955,913 6,944,188 6,932,038 2025 2026 2027 2028 2029 S $ 6,940,788 6,929,163 6,924,786 6,919,038 6,916,538 $ 11,604,363 $ ii,599,863 $ 13,734,788 $ 13,715,813 $ 13,716.788 $ I0.292,538 $ 6.929,163 S 6,924,788 $ 6,919,038 S 6,916,538 See Independent Auditors report - 38 APPENDIX E 2005 GENERAL BOND RESOLUTION AND 2013 FIRST SUPPLEMENTAL RESOLUTION [This page intentionally left blank.] GENERAL OBLIGATION BOND RESOLUTION ALASKA MUNICIPAL BOND BANK Adopted July 13, 2005 TABLE OF CONTENTS ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS Section !01 - Authority for This Resolution .................................................................................................. 1 Section 102 - Resolution Constitutes Contract ............................................................................................ 1 Section 103 - Definitions .............................................................................................................................. 1 ARTICLE II AUTHORIZATION AND ISSUANCE OF BONDS Section 201 -Authorization of Bonds and Interest Rate Exchange Agreements ...................................... 12 Section 202 - Issuance and Delivery of Bonds .......................................................................................... 12 Section 203 - Provisions for Issuance of Bonds ........................................................................................ 12 Section 204 ~ Provisions for Refunding Bonds .......................................................................................... 15 ARTICLE III GENERAL TERMS AND PROVISIONS OF BONDS Section 301 - Description of Bonds; Payment ........................................................................................... 16 Section 302 - Legends ............................................................................................................................... 17 Section 303 - Execution and Authentication .............................................................................................. 17 Section 304 - Interchangeability of Bonds ................................................................................................. 18 Section 305 - Negotiability, Transfer and Registry .................................................................................... 18 Section 306 - Regulations with Respect to Exchanges and Transfers ...................................................... 18 Section 307 - Bonds Mutilated, Destroyed, Stolen or Lost ........................................................................ t9 Section 308 - Preparation of Definitive Bonds; Temporary Bonds ............................................................ 20 Section 309 - Cancellation and Destruction of Bonds ............................................................................... 20 ARTICLE IV REDEMPTION OF BONDS Section 401 - Redemption Provisions ........................................................................................................ 20 Section 402 - Notice of Redemption .......................................................................................................... 21 Section 403 - Partially Redeemed Fully Registered Bonds ....................................................................... 22 ARTICLE V CUSTODY AND APPLICATION OF CERTAIN PROCEEDS OF BONDS Section 501 - Application of Certain Proceeds .......................................................................................... 23 Section 502 - Loans ............................................................................................................................. 23 Section 503 -Retention and Inspection of Documents .............................................................................. 24 ARTICLE VI ESTABLISHMENT OF FUNDS AND ACCOUNTS AND APPLICATION THEREOF Section 601 - Pledge .................................................................................................................................. 24 Section 602 - Establishment of Funds and Accounts ................................................................................ 25 Section 603 - Reserve Fund ...................................................................................................................... 25 Section 604 - Interest Account, Principal Account and Redemption Account ........................................... 27 ALAKSA MUNICPAL BOND BANK Table of Contents (Amended) Page 1 Section 605 - Rebate Fund ........................................................................................................................ 29 Section 606 - Operating Fund .................................................................................................................... 30 Section 607 - Reduction of Required Debt Service Reserve ..................................................................... 30 Section 608 - Trustee’s Maintenance of Records on Payment of Bonds .................................................. 30 Section 609 - Obtaining Credit Enhancements and Interest Rate Exchange Agreements ...................... 30 Section 610 - Creation of Additional Funds, Accounts and Subaccounts; Separate Credit Enhancement Funds; Pledge with Respect to Credit Enhancements and Interest Rate Exchange Agreements ........................................................................ 32 ARTICLE VII SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS Section 701 - Security for Deposits ............................................................................................................ 33 Section 702 - Investment of Funds and Accounts Held by the Trustee ..................................................... 33 Section 703 - Liability of Trustee for Investments ...................................................................................... 34 ARTICLE VIII THE TRUSTEE AND THE PAYING AGENTS Section 801 - Appointment and Acceptance of Duties of Trustee ............................................................. 34 Section 802 - Appointment and Acceptance of Duties of Paying Agents .................................................. 34 Section 803 - Responsibilities of Fiduciaries ............................................................................................. 34 Section 804 Evidence on Which Fiduciaries May Act ............................................................................. 36 Section 805 Compensation ...................................................................................................................... 37 Section 806 Permitted Acts and Functions .............................................................................................. 37 Section 807 Resignation of Trustee ......................................................................................................... 37 Section 808 RemovaI of Trustee ............................................................................................................. 37 Section 809 Appointment of Successor Trustee ...................................................................................... 38 Section 810 Transfer of Rights and Property to Successor Trustee ....................................................... 38 Section 8!1 Merger or Consolidation ...................................................................................................... 39 Section 812 Resignation or Removal of the Paying Agents and Appointment of Successors ................ 39 Section 813 - Evidence of Signatures of Bondholders and Ownership of Bonds ...................................... 39 ARTICLE IX COVENANTS QF THE BANK Section 901 - Payment of Bonds ............................................................................................................... 40 Section 902 - Extension of Payment of Bonds ........................................................................................... 41 Section 903 - Offices for Servicing Bonds ................................................................................................. 41 Section 904 - Further Assurances ............................................................................................................. 41 Section 905- Power to Issue Bonds and Make Pledges ............................................................................ 41 Section 906 - General Covenants of the Bank ........................................................................................... 42 Section 907 - Accounts and Reports ......................................................................................................... 43 Section 908 - Personnel and Servicing of Programs ................................................................................. 43 Section 909 - Waiver of Laws .................................................................................................................... 44 Section 9t0 - Fees and Charges ............................................................................................................... 44 Section 911 - Administration of Reserve Fund .......................................................................................... 44 Section 912 - Issuance of Additional Obligations ...................................................................................... 45 Section 913 - Loan Agreement Provisions ................................................................................................. 46 Section 914 - Modification of Loan Agreement Terms ............................................................................... 47 Section 915 - Sale of Municipal Bonds by Bank ........................................................................................ 48 Section 916 - Disposition of the Proceeds of Sale or Redemption of Municipal Bonds ............................ 48 Section 917 - Enforcement of Municipal Bonds ......................................................................................... 48 Section 918 - Continuing Disclosure; Bankruptcy ...................................................................................... 49 Section 919 - Tax Covenants ..................................................................................................................... 49 ARTICLE X SERIES RESOLUTION AND SUPPLEMENTAL RESOLUTIONS Section I001 - Modification and Amendment without Consent ................................................................. 49 Section 1002 - Supplemental Resolutions Effective with Consent of Bondholders ................................... 50 Section 1003 - General Provisions Relating to Series Resolutions and Supplemental Resolutions ......... 50 ARTICLE XI AMENDMENTS Section 1101 - Powers of Amendment ...................................................................................................... 51 Section 1102 - Consent of Bondholders .................................................................................................... 51 Section 1103 - Modifications by Unanimous Consent ............................................................................... 53 Section ! 104 - Mailing and Publication ...................................................................................................... 53 Section 1105 - Exclusion of Bonds ............................................................................................................ 53 Section 1106- Notation on Bonds ............................................................................................................. 53 ARTICLE Xll DEFAULTS AND REMEDIES Section 1201 - Trustee to Exercise Powers of Statutory Trustee .............................................................. 54 Section 1202 - Events of Default ............................................................................................................... 54 Section 1203 - Remedies ........................................................................................................................... 55 Section 1204 - Priority of Payments After Default ...................................................................................... 56 Section 1205 - Termination of Proceedings ............................................................................................... 58 Section 1206 - Bondholders’ Direction of Proceedings .............................................................................. 58 Section 1207 - Limitation on Rights of Bondholders .................................................................................. 58 Section 1208 - Possession of Bonds by Trustee Not Required ................................................................. 59 Section 1209 - Remedies Not Exclusive .................................................................................................... 59 Section 1210 - No Waiver of Default .......................................................................................................... 59 Section 1211 - Notice of Event of Default .................................................................................................. 59 ARTICLE Xlll DEFEASANCE Section 1301 - Defeasance ........................................................................................................................ 60 ARTICLE XlV MISCELLANEOUS Section 1401 - Preservation and Inspection of Documents ....................................................................... 62 Section 1402 - Parties of interest ............................................................................................................... 62 Section 1403 - No Recourse Under Resolution or on Bonds .................................................................... 62 Section 1404 - Severability ........................................................................................................................ 62 Section 1405 - Headings ............................................................................................................................ 62 Section 1406 - Conflict ............................................................................................................................... 62 Section 1407 - Governing Law ................................................................................................................... 63 Section 1408 - Effective Date ................................................................................................................ 63 ALAKSA MUNICPAL BOND BANK ALAKSA MUNICPAL BOND BANK Table of Contents (Amended) Table of Contents (Arnended~ Page 2 Page 3 GENERAL OBLIGATION BOND RESOLUTION A RESOLUTION CREATING AND ESTABLISHING AN ISSUE QF BONDS QF THE ALASKA MUNICIPAL BOND BANK: PROVIDING FOR THE ISSUANCE FROM TIME TO TIME OF SAID BONDS; PROVIDING FOR THE PAYMENT QF PRINCIPAL OF AND INTEREST ON SAID BONDS; AND PROVIDING FOR THE RIGHTS QF THE HOLDERS THEREOF. BE IT RESOLVED by the Board of Directors of the Alaska Municipal Bond Bank as follows: ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS Section 101 - Authority for This Resolution. This Resolution is adopted pursuant to the provisions of the Act. Section 102 - Resolution Constitutes Contract. In consideration of the purchase and acceptance of the Bonds by those who shall hold the same from time to time, the provisions of this Resolution shall be a part of the contract of the Bank with the Holders of Bonds and shall be deemed to be and shall constitute a contract between the Bank, the Trustee and the Holders from time to time of the Bonds. The pledge hereof and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the Bank shall be for the benefit, protection and security of the Holders of any and all of such Bonds. Each Bond, Credit Enhancement facility, and Interest Rate Exchange Agreement, regardless of the time or times of ils issue or maturity, shall be of equal rank without preference, priority or distinction over any other Bond, Credit Enhancement facility, or Interest Rate Exchange Agreement except as expressly provided in this Resolution. Section 103 - Definitions. The following terms shall, for all purposes of this Resolution, have lhe following meanings unless the context shall clearly indicate some other meaning: "Accountant’s Certificate" shall mean a certificate signed by an independent certified public accountant or a firm of independent certified public accountants selected by the Bank. "Accreted Amount" shall mean, with respect to Capital Appreciation of Bonds of any Series and as of the date of calculation, the amount established pursuant to the Series Resolution authorizing such Capital Appreciation Bonds as the amount representing the initial public offering price, plus the accumulated and compounded principal and interest on such Bonds. "Ac.~t" shall mean the Alaska Municipal Bond Bank Authority Act, constituting Chapter 85, Title 44, of the Alaska Statutes, as amended to the date of adoption of this Resolution. "Administrative Expeeses" shall mean the Bank’s expenses of carrying out and administering its powers, duties and functions, as authorized by the Act, and shall include, without limiting the generality of the foregoing: administrative and operating expenses, legal, accounting and consultant’s services and expenses, payments to pension, retirement, health and hospitalization funds, and any other expenses required or permitted to be paid by the Bank under the provisions of the Act or this Resolution or otherwise. "Aqqreqa e Debt Service" for any period shall mean, as of any date of calculation and with respect to all Bonds, the sum of the amounts of Debt Service for such period. "Annual Debt Service" shall mean the total amount of Debt Service for any Outstanding Bonds in any Fiscal Year. "Authorized Denominations" with respect to any Series of Bonds issued hereunder, has the meaning specified in the related Series Resolution, "Authorized Officer" shall mean the Chairman, Vice Chairman, Executive Secretary, or Executive Director of the Bank and any other director, officer or employee of the Bank authorized by resolution of the Bank to perform such act or discharge such debt. "Bank" shall mean the Alaska Municipal Bond Bank, a public body corporate and politic constituted as a public corporation and instrumentality of lhe State of Alaska within the Department of Revenue but having a legal existence independent of and separate from the State exercising public and essential governmental functions and created by the Act, or any body, agency or instrumentality of the State which shall hereafter succeed to the powers, duties and functions of the Bank. "Beneficial Owner" shall mean the person in whose name a Bond is recorded as the beneficial owner of such Bond by the respective systems of DTC and the DTC Participants or the Holder of the Bond if the Bond is not then held in book-entry form. "Bond" or "Bonds" shall mean any Alaska Municipal Bond Bank Bond or Bonds, or Alaska Municipal Bond Bank Authority Bond or Bonds, as the case may be, authenticated and delivered under this Resolution pursuant to a Series Resolution. "Bondholder" or "Holder" or words of similar import, when used with reference to a Bond or Bonds, shall mean any person who shall be the registered owner of any Outstanding Bond or Bonds issued in fully registered form or the bearer of any Bond or Bonds issued in bearer form or registered to bearer. When all Bonds of a Series are held by a securities depository, "Bondholder" or "Holder" shall mean the beneficial owner of the Series in question determined under the rules of that securities depository; otherwise "Bondholder" or "Holder" means owner of record on the bond register maintained by the Paying Agent. To the extent that the full payment of the interest on and principal of Bonds of a Series is secured by Credit Enhancement, the Credit Enhancement Agency shall be considered to be the ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 2 "Bondholder" or "Holder" of all the Bonds of that Series for purposes of exercising any rights with respect to supplements and amendments to this Resolution if the Credit Enhancement Agreement so provides. "Bond Year" shall mean each one-year period that ends on an anniversary of the date of issue of the Bonds. "Book-Entry System" shall mean the system in which the Bonds (represented by one Bond certificate for each maturity of the Bonds) are delivered into the possession of DTC and are issued and fully-registered as to principal and interest in the name of Cede & Co., and whereby beneficial interests in the Bonds are purchased by investors through DTC Participants, such interests shown and transfers thereof effected only through the records maintained by the respective DTC Participants from whom each such investor acquired such beneficial interest. "Business Day" shall mean any day other than a Saturday or Sunday or any other day on which banks in New York. Alaska, or the state or states in which any Trustee appointed hereunder performs its duties hereunder are authorized or required to be closed or are closed. "Capital Appreciation Bonds" shall mean Bonds, the interest on which (a) is compounded and accumulated at the rates and on the dates set forth in the Series Resolution authorizing the issuance of such Bonds and designating them as Capital Appreciation Bonds, and (b) is payable upon maturity or redemption of such Bonds. "Continuinq Disclosure Certificate" shall mean, for each Series, the continuing disclosure certificate executed by the Bank for the purpose of satisfying the continuing disclosure requirements of Rule 15c2-I2 of the Securities aed Exchange Commission with respect to such Series, as such continuing disclosure certificate is originally executed and as it may be amended from time to time in accordance with its terms. "Counsel’s Opinion" shall mean an opinion signed by an attorney or firm of attorneys of nationally recognized standing in the field of law relating to state and municipal financing (who may be counsel to the Bank) selected by the Bank and acceptable to the Trustee. "Credit Enhancement" shall mean a letter of credit, a line of credit, a credit facility, a surety bond, bond insurance, or any other instrument or arrangement obtained in connection with the issuance of a Series of Bonds to further secure the payment of the Bonds of such Series or to satisfy the Reserve Fund Requirement. "Credit Enhancement Agency" shall mean any bank or other institution that provides Credit Enhancement, "Current Interest Bonds" shall mean Bonds not constituting Capital Appreciation Bonds. Interest on Current Interest Bonds shall be payable periodically on the Interest Payment Dates provided therefor in a Series Resolution. "Debt Service" shall mean for any Series of Bonds Outstanding, an amount equal to the sum of (a) all interest payable during such period of calculation, plus (b) the Principal Installments, if any, payable during such period of calculation on such Series of Bonds. "Executive Director" shall mean the Executive Director or Acting Executive Director of the Bank. "Fees and Charqes" shall mean all fees and charges authorized to be charged by the Bank pursuant to section 44.85.080(8), (15) and (16) of the Act and charged by the Bank to Governmental Units pursuant to the terms and provisions of Loan Agreements. "Fiduciary" or "Fiduciaries" shall mean the Trustee, and Paying Agent, or any or all of them, as may be appropriate. "Fiscal Year" shall mean any twelve (12) consecutive calendar months commencing with the first day of July and ending on the last day of the following June or such other date as is authorized by statute and/or selected by the Bank. "Fitch" shall mean Fitch Ratings, organized and existing under the taws of the State of Delaware. its successors and their assigns, and, if such organization shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Fitch" shall be deemed to refer to any other nationally recognized securities rating agency (other than Standard & Poor’s or Moody’s) designated by the Authorized Officer. "Government Obliqations" shall mean direct obligations of, or obligations of the payment of and interest on which are unconditionally guaranteed by, the United States of America. "Governmental Unit" shall mean a municipality or such other entity of which the Bank is authorized by law to purchase its revenue bonds, general obligation bonds, notes, or other forms of indebtedness and which otherwise satisfies conditions found herein and in the Loan Agreement. "Governmental Unit’s Allocable Proportion" shall mean the proportionate amount of the total requirement in respect of which the term is used determined by the ratio that the Loan then outstanding to such Governmental Unit bears to the total of all Loans then outstanding to all Governmental Units. "Interest Account" shall mean the account by that name established by Section 602, ALAKSA MUNICPAL BOND BANK ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) General Obligation Bond Resolution (Amended) Page 3 Page 4 "Interest Payment Date" shall mean any date upon which interest on any Bonds is payable in accordance with the terms thereof. "Interest Rate Exchanqe Aqreement" shall mean an agreement entered into by the Bank or the Trustee, on behalf of the Bank, providing for an interest rate cap, floor or swap with respect to any Bonds or Municipal Bonds. "lnvestmenl Securities" shall mean the following to the extent permitted by the Act and the laws of the State of Alaska: (1) Governmental Obligations; (2) Bonds. debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itseff); (a) Farmers Home Administration ("FmHA") Certificates of Ownership; (b) Federal Housing Administration ("FHA") Debentures; (c) General Sen/ices Administration Participation certificates: (d) Government Nahonal Mortgage Association ("GNMA" or "Ginnie Mae") GNMA-guaranteed mortgage-backed bonds or GNMA-guaranteed pass-through obligations (participation certificates); (e) United States Maritime Administration Guaranteed Title XI financing; (f) Untied States Department of Housing and Urban Development ("HUD") Project Notes Local Authority Bonds; (3) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following government agencies (stripped securities are only permitted if they have been stripped by lhe agency itself); (a) Federal Home Loan Bank System. Senior debt obligations (Consolidated debt obligations); A£AKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) (b) Federal Home Loan Mortgage Corporation. ("FHLMC" or "Freddie Mac") rated AAA by Standard & Poor’s and Aaa by Moody’s Participation Certificates (Mortgage-backed securities) Senior debt obligations; (c) Federal National Mortgage Association. ("FNMA" or "Fannie Mae") rated AAA by Standard & Poor’s and Aaa by Moody’s Mortgage-backed securities and senior debt obligations (excluded are stripped mortgage securities which are valued greater than par on the portion of unpaid principal); (d) Student Loan Market Association. ("SLMA" or "Sallie Mae") Senior debt obligations; (e) Resolution Funding Corp. ("REFCQRP") Only the interest component of REFCQRP strips which have been stripped by request of the Federal Reserve Bank of New York in book-entry form are acceptable; and (f) Farm Credit System. Consolidated systemwide bonds. (4) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of "AAAm-G," "AAAm" or "AAm" or by Moody’s of "Aaa" including funds from which the Trustee or its affiliates receive fees for investment advisory or other services to such fund; (5) Certificates of Deposit ("CD") secured at all times by collateral described in (a) and/or (b) above. CD’s must have a one-year or less maturity. Such certificates must be issued by commercial banks, savings and loan associations or mulual savings banks whose short-term obligations are rated "Aq+" or better by S&P, and "Prime-1" or better by Moody’s. The collateral must be held by a third party and the third pady must have a perfected firsl security inlerest in the collateral; (6) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by the Federal Deposit Insurance Corporation ("FDIC"), including Bank Insurance Fund ("BIF") and Savings Association Insurance Fund ("SAIF"); (7) Commercial paper rated "Prime-l" by Moody’s and "A-l+" or better by S&P and which matures not more than 270 days after the date of purchase; (8) Bonds or notes issued by any state or municipality which are rated by Moody’s and S&P in the highest long-term rating category assigned by such agencies; ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 5 Page 6 (9) Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of "Prime-l" by Moody’s and "A-l+" by S&P; (10) Repurchase agreements providing for the transfer of securities from a dealer bank or securities firm (seller/borrower) to a municipal entity (buyer/lender), and the transfer of cash from a municipal entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the municipal entity in exchange for the securities at a specified date; provided, however, that the repurchase agreement must satisfy certain criteria articulated in writing to the Bank by the Rating Agencies and such agreement must be approved in writing prior to its acquisition by each bond insurer then insuring any Series of Bonds: and (1 t) Investment contracts with providers the long term, unsecured debt obligations of which are rated at least "Aaa" by the Rating Agencies, "Loan" shall mean a loan heretofore or hereafter made by the Bank to a Governmental Unit pursuant to the Act and more particularly described in the applicable Series Resolution. "Loan Aqreement" shall mean an agreement, and any amendments thereto, heretofore or hereafter entered into between the Bank and a Governmental Unit setting forth the terms and conditions of a Loan. "Loan Obliqation" shall mean that amount of Bonds and the Bonds themselves issued by the Bank for the purchase of Municipal Bonds of a Governmental Unit. "Maximum Annuat Debt Service" shall mean, with respect to any Outstanding Series of Bonds, the highest remaining Annual Debt Service for such Series of Bonds. "Moody’s" shall mean Moody’s Investors Service, Inc., a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term "Moody’s" shall be deemed to refer to any other nationally recognized securities rating agency (other than Fitch or Standard & Poor’s) designated by the Authorized Officer. "Municipal Bonds" shall mean general obligation bonds, revenue bonds, notes or other evidences of debt issued by any Governmental Unit as now or hereafter defined in the Act which have heretofore been or will hereafter be acquired by the Bank as evidence of a Loan to the Governmental Unit pursuant to the Act. ALAKSA MUNtCPAL BOND BANK General Obligation Bond Resolution (Amended) Page 7 "Municipal Bonds Interest Payment" shall mean that portion of a Municipal Bonds Payment made or required to be made by a Governmental Unit to the Bank which represents the interest due or to become due on the Governmental Unit’s Municipal Bonds. "Municipal Bonds Payment" shall mean the amounts paid or required to be paid, from time to time, for principal and interest by a Governmental Unit to the Bank on the Governmental Unit’s Municipal Bonds. "Municipal Bonds Principal Payment" shall mean that portion of a Municipal Bonds Payment made or required to be made by a Governmental Unit to the Bank which represents the principal due or to become due on the Governmental Unit’s Municipal Bonds. "Notes" shall mean any obligations referred to herein issued by the Bank other than Bonds. "Qperatinq Fund" shall mean the fund by that name established by Section 602. "q)vt~tendinq" when used with reference to Bonds, other than Bonds referred to in Section 1105 hereof, shall mean, as of any date, all Bonds theretofore or thereupon being authenticated and delivered under this Resolution except: (1) Any Bonds canceled by the Bank or the Trustee at or prior to such date; (2) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered pursuant to this Resolution; and (3) Bonds deemed to have been paid as provided in subsection (B) of Section 1301. "Payinq Aqent" for the Bonds of any Series shall mean the bank or trust company and its successor or successors, which may include the Trustee, designated by the Bank as Paying Agent pursuant to the provisions of this Resolution and a Series Resolution or any other resolution of the Bank adopted prior to authentication and delivery of Bonds for which such Paying Agent or Paying Agents shall be so appointed. "Principal Account" shall mean the account by that name established by Section 602. "Principal Installment" shall mean, as of any date of calculation and with respect to the Outstanding Bonds of any Series, (i) the principal amount of such Bonds which are due on a certain future date, reduced by the aggregate principal amount of such Bonds which would be retired by reason of the payment when due and application in accordance with this Resolution of Sinking Fund Payments payable before such future date for the retirement of such Bonds or (ii) the unsatisfied balance of any Sinking Fund Payment due on a certain future date for such Bonds, plus the aggregate amount of the ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 8 premiums, if any, which would be applicable on such future date upon the redemption of such Bonds by appticalion of such Sinking Fund Payments in a principal amount equal to said unsatisfied balance or (iii) if such future dales coincide as to different Bonds of such Series, the sum of such principal amount of Bonds, unsatisfied balance and applicable premiums, if any or (iv) for any particular Series of Bonds the amount specified in the Supplemental Resolution authorizing such Series of Bonds. "Put Bond" shall mean any Bond that is part of a Series of Bonds subject to mandatory purchase by the Bank, its agent or a third party from the Owner of the Bond pursuant to provisions of the Series Resolution authorizing the issuance of the Bond. "Ratinq Aqencies" shall mean Moody’s, Standard & Poor’s and Fitch or their respective successors and assigns and/or such other securities rating agency selected by the Bank to provide a rating with respect to a Series of Bonds, or any portion thereof, which Rating Agency, as of the applicable date, shall have assigned a rating to any Series of Bonds or any portion thereof. "Rebate Calculation Date" shall mean, with respect to each Series of Bonds, the interest payment date next preceding the fifth anniversary of the issue date of such Series of Bonds, each fifth anniversary of the initial Rebate Calculation Date for such Series of Bonds, and the date of retirement of the last bond for such Series. "Rebate Fund" shall mean the fund by that name established by Section 602. "Rebate Requirement" shall mean the amount of arbitrage profits earned from the investment of gross proceeds of the Bonds in nonpurpose investments described in Section 148(f)(2) of the Code and defined as "Rebate Amount" in Section 1.148-3 of the Treasury Regulations, which are payable to the United States at the times and in the amounts specified in Section 148(D)(3) of the Code and Section 1,148-3 of the Treasury Regulations. "Record Date" shall have the meaning set forth in the Series Resolution authorizing the particular Series of Bonds. "Redemption Account" shall mean the account by that name established by Section 602. "Redemption Price" shall mean, with respect to any Bond, the principal amount thereof, plus the applicable premium, of any, payable upon redemption thereof pursuant to the provisions of such Bond, this Resolution and the Series Resolution pursuant to which the same was issued. "Refundinq Bonds" shall mean all Bonds, whether issued in one or more series, authenticated and delivered on original issuance for the purpose of refunding Bonds or other obligations of the Bank At AKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) and all Bonds thereafter authenticated and delivered upon the transfer or exchange of or in lieu of or in substitution for such Bond pursuant to this Resolution. "Re~qular Record Date" shall mean, unless otherwise provided in a Series Resolution, with respect to the Bonds, the fifteenth (15th) day immediately preceding each Interest Payment Date (or the Business Day immediately preceding such fifteenth (15th) day, if such fifteenth (15th) day is not a Business Day). "Required Debt Service Reserve" shall mean as of any date of calculation, the amount required to be on deposit in the Reserve Fund which amount shall be at least equal to the Reserve Fund Requirement. "Reserve Fund" shall mean the 2005 General Obligation Bond Resolution Reserve Account established by Section 602 within the Alaska Municipal Bond Bank Reserve Fund created by Section 44.85,270 of the Act. "Reserve Fund Obliqations" shall mean the amount of Bonds issued by the Bank to obtain funds deposited in the Reserve Fund, "Reserve Fund Requirement" shall mean the least of (i) Maximum Annual Debt Service with respect to all Bonds Outstanding; (ii) 125% of Average Annual Debt Service with respect to all Bonds Outstanding; (iii) 10% of the initial principal amount of each Series of Bonds then Outstanding, or (iv) such lower amount as may be required by law. The Reserve Fund Requirement may be satisfied entirely, or in part, by Credit Enhancement as provided for herein; provided, however, any Credit Enhancement satisfying all or any part of the Reserve Fund Requirement after the initial issuance of Bonds or issued in substitution for any prior Credit Enhancement previously issued shall not, by itself, cause a withdrawal or a downward revision of the ratings maintained by any Rating Agency with respect to the Bonds. "Resolution" shall mean this General Obligation Bond Resolution as from time to time amended or supplemented by Supplemental Resolutions or Series Resolutions in accordance with the terms and provisions hereof. "Security Instrument" shall mean an instrument or other device issued by a Security Instrument Issuer to pay, or to provide security or liquidity for, a Series of Bonds. The term "Security Instrument" includes, by way of example and not of limitation, letters of credit, bond insurance policies, standby bond purchase agreements, lines of credit and other security instruments and credit enhancement or liquidity devices; provided, however, that no such device or instrument shall be a "Security Instrument" for purposes of this Resolution unless specifically so designated in a Series Resolution authorizing the use of such device or instrument. ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 9 Page ~0 "Security Instrument Aqreement" shatl mean any agreement entered into by the Bank and a Security Instrument Issuer pursuant to a Series Resolution and/or the applicable portions of a Series Resolution providing for the issuance by such Security Instrument Issuer of a Security Instrument. "Security Instrument Costs" shall mean, with respect to any Security Instrument, all fees, premiums, expenses and similar costs, other than Security Instrument Repayment Obligations, required to be paid to a Security Instrument Issuer pursuant to a Security Instrument Agreement or the Series Resolution authorizing the use of such Security Instrument. Such Security Instrument Agreement or Series Resolution shall specify any fees, premiums, expenses and costs constituting Security Instrument Costs~ "Security Instrument Issuer" shall mean any bank or other financial institution, insurance company, surety company or other institution issuing a Security Instrument. "Security Instrument Repayment Obliqafions" shall mean, as of any date of calculation and with respect to any Security Instrument Agreement. any outstanding amounts payable by the Bank under the Security Instrument Agreement or the Series Resolution authorizing the use of such Security Instrument [o repay the Security Instrument Issuer for payments previously or concurrently made by the Security Instrument Issuer pursuant to a Security Instrument. There shall not be included in the calculation of the amount of Security Instrument Repayment Obligations any Security Instrument Costs, Each Security Instrument Agreement or the Series Resolution authorizing the use of such Security Instrument shall specify any amounts payable under it which, when outstanding, shall constitute Security Instrument Repayment Obligations and shall specify the portions of any such amounts that are allocable as principal of and as interest on such Security Instrument Repayment Obligations. "Series of Bonds" or "Bonds of a Series" or words of similar meaning shall mean the Series of Bonds authorized by a Series Resolution. "Series Resolution" shall mean a resolution of the Bank authorizing the issuance of a Series of Bonds in accordance with the terms and provisions hereof and adopted in accordance with Article X. "Sinkinq Fund Installment" shall mean, as of any particular date of calculation and with respect to the Outstanding Bonds of any Series, the amount required to be paid at all events by the Bank on a single future date for the retirement of Bonds of such Series which mature after said future date. but does not include any amount payable by the Bank by reason only of the maturity of a Bond. "Standard & Poor’s" shall mean Standard & Poor’s Ratings Services, a Division of The McGraw- Hill Companies, Inc., aed its successors and assigns, except that if such corporation or division shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term "Standard & Poor’s" shall be deemed to refer to any other nationally recognized securities rating agency (other than Moody’s or Fitch) designated by the Authorized Officer. "State" shall mean the State of Alaska. "Supplemental Resolution" shall mean a resolution supplemental to or amendatory of this Resolution, (other than a Series Resolution) adopted by the Bank in accordance with Article X. "Trustee" shall mean the bank or trust company appointed pursuant to Section 801 to act as trustee hereunder, and its successor or successors and any other bank or trust company at any time substituted in its place pursuant to this Resolution. "Variable Rate Bonds" shall mean, as of any date of calculation, Bonds the terms of which on such date of calculation are such that interest thereon for any future period of time is expressed to be calculated at a rate which is not susceptible to a precise determination. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and associations, including public bodies, as wel! as natural persons. The terms "hereby," "hereof," "hereto," "herein," "hereunder," and any similar terms, as used in this Resolution, refer to this Resolution. ARTICLE II AUTHORIZATION AND ISSUANCE OF BONDS Section 201 - Authorization of Bonds and Interest Rate Exchanqe Aqreements. (A) Bonds are hereby authorized for issuance hereunder by the Bank. The Bonds may be issued in one or more Series pursuant to one or more Series Resolutions which shall state the purpose or purposes for which each Series of Bonds is being issued as hereinafter provided without limitation as to amount except as provided in this Resolution or as may be limited by law. Interest Rate Exchange Agreements may only be executed and delivered by the Bank in connection with the issuance and detivery of a Series of Bonds hereunder or in connection with the renewal, substitution or extension of an Interest Rate Exchange Agreement. (B) There is hereby created by this Resolution, in the manner and to the extent provided herein, a continuing pledge and lien to secure the full and final payment of the principal or Redemption Price of, interest on and Sinking Fund Installments for, all of the Bonds issued pursuant to this Resolution. The Bonds shall be general obligations of the Bank payable as to principal or Redemption Price of, interest ALAKSA MUNICPAL BOND BANK ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) General Obligation Bond Resolution (Amended) Page 11 Page 12 on, and Sinking Fund Installments for the Bonds solely from the sources provided in this Resolution and any Series Resolution. The State shall not be liable on the Bonds and the Bonds shall not be a debt or liability, or conslitute a pledge or loan of the faith and credit, of the State. The Bonds shall contain on the face thereof a statement to the effect that the Bank is obligated to pay the principal or Redemption Price, if any. of the Bonds and the interest thereon only from revenues or funds of the Bank and that the State is not obligated to pay such principal or Redemption Price, if any, or interest and that neither the faith and credit nor the taxing power of the State is pledged to the payment of the principal or Redemption Price, if any, of, or the interest on, the Bonds. Section 202 - Issuance and Delivery of Bonds After their authorization by a Series Resolution, Bonds of a Series may be executed by or on behalf of the Bank and delivered to the Trustee for authentication and, upon compliance by the Bank with the requirements, if any, set fodh in such Series Resolution and with the requirements of Section 203 or, in the case of Refunding Bonds, Section 204, the Trustee shall thereupon authenticate and deliver such Bonds to or upon the order of the Bank. Section 203- Provisions for Issuance of Bonds. (A) The issuance of the Bonds shall be authorized by a Series Resolution or Series Resolutions of the Bank adopted subsequent hereto and the Bonds may be issued in one or more Series. The Bonds of each Series, including Refunding Bonds, shall, in addition to the title "Alaska Municipal Bond Bank General Obligation Bonds," contain such further appropriate particular designations added to such title and the appropriate Series designation as the Bank may determine in such Series Resolution. Each Bond shall bear upon its face lhe designations so determined for the Series to which it belongs. (B) Each Series Resolution authorizing the issuance of a Series of Bonds shall specify: (1) The authorized principal amount of said Series of Bonds; (2) The purposes for which such Series of Bonds is being issued, which shall be one or more of the following: (i) making Loans to Governmental Units, (ii) making payments into the Reserve Fund, (iii) the funding of Notes theretofore issued by the Bank for any purposes for which Bonds may have been issued, (iv) the refunding of Bonds and related purposes, as provided in Section 204, and (v) any other purpose authorized by law: (3) The date and the maturity date or dates and amounts of each maturity of the Bonds of said Series or the method of determining the same; (4) (i) The interest rate or rates (if any) or maximum interest rate of the Bonds of such Series, or the method of determining such rale or tales (which may be determinable at one or more specified times Al AKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) set forth in the Series Resolution, which may accrete or compound with such frequencies or in such manner as shall be specified in such Series Resolution and which shall be as otherwise specified in the Series Resolution), and the Interest Payment Dates and Record Dates therefor and (ii)a manner of calculating accreted value or compounded principal value during all or any part of the term of the Series of Bonds being authorized, if interest is not payable currently and the Bank determines that it is necessary or appropriate; (5) The denomination or denominations of, and the manner of numbering and lettering, the Bonds of such Series, provided that each Bond shall be of the denomination of $5,000 or a multiple thereof, not exceeding the aggregate principal amount of the Bonds of such Series maturing in the year of maturity of the Bond for which the denomination is to be specified unless otherwise provided in the Series Resolution authorizing the issuance of such Bonds; (6) The Paying Agent or Paying Agents and the place or places of payment of the principal and Redemption Price, if any, of and interest on the Bonds of such Series or the manner of appointing and designating the same; (7) The Redemption Price or Prices, if any, and, subject to the provisions of Articte IV, the redemption terms for the Bonds of such Series or the method of determining the same; (8) The amount and due date of each Sinking Fund Installment, if any, for Bonds of like maturity of such Series, or the method of determining such Sinking Fund Installment; (9) The form or forms of the Bonds of such Series and of the Trustee’s certificate of authentication; (10) The manner of execution of the Bonds of such Series; (11) If, at the time of issuance of the Bonds of such Series, an Interest Rate Exchange Agreement will apply to such Bonds or such Bonds are to be secured by Credit Enhancement, the form of Credit Enhancement or Interest Rate Exchange Agreement to be obtained, the identity of the Credit Enhancement Agency or of the counterparty to the Interest Rate Exchange Agreement, and the substantial form of the significant documents relating to the Credit Enhancement or Interest Rate Exchange Agreement; (!2) If Bonds of such Series are to contain any tender or put options or the like, whether such Bonds are to be remarketed and, if so, the identity of any remarketing agent and the substantial form of any remarketing agreement relating to such Bonds; and ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 13 Page 14 (13) Any other provisions deemed advisable by the Bank, not in conflict with the provisions of this Resolution. All Bonds of each Series of like maturity shall be identical in all respects, except as to denominations, interest rate, and numbers and letters. (C) All (but not less than all) the Bonds of each Series shall be executed by the Bank for issuance under the Resolution and delivered to the Trustee and thereupon shall be authenticated by the Trustee and by it delivered to the Bank or to such other party as may be specified in a written order of the Bank, but only upon the receipt by the Trustee of: (1) A Counsel’s Opinion to the effect that (i) the Bank has the right and power to execute and deliver Ibis Resolution and the Series Resolution authorizing such Series under the Act as amended to the date of such Opinion; (ii) this Resolution and such Series Resolution has been duly and lawfully executed and delivered by the Bank, is in full force and effect and is valid and binding upon the Bank and enforceable in accordance with its terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, or other laws affecting creditors’ rights generally from time to time in effect); (iii) this Resolution and such Series Resolution creates the valid pledge and assignment which it purports to create of the Municipal Bonds, subject to the application thereof to the purposes and on the conditions permitted by this Resolution; (iv) the Bonds of such Series are valid and binding general obligations of the Bank, enforceable in accordance with their terms and the terms of this Resolution and such Series Resolution; and (v) the Bonds of such Series have been duly and validly authorized and issued in accordance with the constitution and statutes of the State, including the Act as amended to the date of such Opinion, and in accordance with this Resolution; (2) A written order as to the delivery of such Bonds, signed by an Authorized Officer; (3) Either an original of lhe Series Resolution authorizing such Series or a copy thereof certified by an Authorized Officer; (4) Except in the case of Refunding Bonds, a certificate of an Authorized Officer stating that the Bank is not in default in [he performance of any of the covenants, conditions, agreements or provisions contained in the Resolution; (5) Such further documents, moneys and securities as are required by the provisions of this Seciion 203, and Section 204, or Article X, or any Series Resolution or Supplemental Resolution adopted pursuant to Article X. Sechon 204 - Provisions for Refundinq Bonds. (A) All or any part of one or more Series of Refunding Bonds may be authenticated and delivered to refund att Oulstanding Bonds or any part of one or more Series of Outstanding Bonds. Refunding Bonds shall be issued in a principal amount sufficient, together with other moneys available therefor, to accomplish such refunding and to make such deposits as are required by the provisions of the Act, this Section and of the Series Resolution authorizing said Series of Refunding Bonds. (B) A Series of Refunding Bonds may be authenticated and delivered only upon receipt by the Trustee (in addition to the receipt by it of the documents required by Section 203) of: (1) Instructions to the Trustee to give due notice of redemption (which notice, in the case of an optional redemption, shall state that the redemption is conditioned by the Trustee on the receipt of sufficient funds for redemption) of all the Bonds to be refunded on the redemption date specified in such instructions; (2) Either (i) moneys (which may include al! or a portion of the proceeds of the Refunding Bonds to be issued) in an amount sufficient to effect payment at the applicable Redemption Price of the Bonds or other obligations to be refunded, together with accrued interest on such Bonds or other obligations to the redemption date, or (ii) direct obligations of (including obligations issued or held in book-entry form on the books of) the Department of the Treasury of the United States of America which are not subject to redemption prior to the dates on which amounts will be needed to make payments on the Bonds or other obligations to be refunded and the principal of and interest on which when due, together with the moneys (which may include all or a portion of the proceeds of the Refunding Bonds to be issued), if any, contemporaneously deposited with the Trustee, will be sufficient to pay when due the applicable Redemption Price of the Bonds or other obligations to be refunded, together with accrued interest on such Bonds or other obligations to the redemption date, which moneys or Investment Securities shall be held by the Trustee or any one or more of the Paying Agents or an escrow agent or trustee for other obligations in a separate account irrevocably in trust for and assigned to the respective Holders of the Bonds or other obligations to be refunded; and (3) A certificate of an Authorized Officer containing such addilionat statements as may be reasonably necessary to show compliance with the requirements of subsection (A) and this subsection (B) of this Section 204. (C) From and after the delivery of the Refunding Bonds of a Series, the Trustee shall make appropriate adjustment between the Interest Account and Principal Account when disbursing and applying Municipal Bonds Payments deposited in the Debt Service Fund pursuant to the provisions of Section 604 to the end that such portion of the Municipal Bonds Payment as shall represent Municipal Bonds Interest Payment not required for deposit in the Interest Account [or the purpose of paying interest accruing upon the Bonds shall be deposited in the Principal Account. Any surplus which might result upon ALAKSA MUNICPAL BOND BANK ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) General Obligation Bond Resolution (Amended~ Page 15 Page 16 and after such deposit shall be disposed of in the manner specified in the Series Resolution authorizing such Series. (D) Neither Investmenl Securities nor moneys deposited with the Trustee or an escrow agent or trustee for other obligations pursuan~ Io paragraph (B)(2) of this Section nor principal or interest payments on any such Investment Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, Ihe paymenl of Ihe applicable Redemption Price of the Bonds or other obligalions to be refunded, together with accrued interest on such Bonds or other obligations to the redemption date, and any cash received from such priecipal or interest payments, if not then needed for such purpose, shall, to the extent practicable, be reinvested in such Investment Securities as are described in clause (it) of said paragraph maturing at times and in amounts sufficient Io pay when due the applicable Redemption Price of such Bonds or other obligations, together with such accrued interest. ARTICLE III GENERAL TERMS AND PROVISIONS OF BONDS Section 301 - Description of Bonds; Payment. (A) The Bonds of each Series issued under the provisions hereof may be issued only as registered bonds and subject to Section 303 hereof, each Bond shall be entitled "General Obligation Bonds" and shall bear such additional letter or number series designation as shall be determined in tile Series Resolution authorizing the Bonds of the Series of which such Bond is oae. Unless otherwise specified in the Series Resolution authorizing such Series of Bonds, Bonds of each Series shall be in Authorized Denominations each or any integral multiple thereof, shall be numbered consecutively from 1 upwards and shall bear interest payable on Interest Payment Dates. (B) The Bonds of each Series issued hereunder shall be dated as of and bear interest from the date specified in the Series Resolution that authorized such Series, which date may be contemporaneous with or prior to or after the date of issuance of such Bonds, (C) Both the principal of alld the interest on the Bonds shall be payable in any coin or currency of the United States of America, as at the respective time of payment shall be legal tender for payment of public and private debts. Payment of the interest on any Bond shall be made to lhe person appearing on the Bond registration books of the Bank kept for such purpose by the Trustee, the registrar hereinafter provided for as the Holder thereof, by check or draft mailed to the Holder at her or his address as it appears on such registration books or to owners of $1,000,000 or more in aggregate principal amount of Bonds by wire transfer to a bank account designated by the Holder in written instructions furnished to the Trustee, The interest on Bonds so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the person who is the Holder lhereof at the close of business on the applicable Record Date for such interest. The principal of and premium, if any, on Bonds are payable upon presentation and surrender thereof at the principal corporate trust office of the Trustee, as paying ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) agent, except as otherwise provided by Series Resolution, All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of lhe sum or sums so paid. (D) The Bonds of each Series may contain or have endorsed thereon such provisions, specifications and descriptive words not inconsistent with the provisions hereof as may be necessary or desirable to comply with custom, the rules of any securities exchange or commission or brokerage board or olherwise, as may be specified in the Series Resolution authorizing such Series of Bonds. Section 302- Leqends. The Bonds of each Series shall contain or have endorsed thereon a statement to the effect that the State shall not be liable thereon and that such Bond shall not be a debt of the State and may contain or have endorsed thereon such provisions, specifications and descriptive words not inconsistent with the provisions of this Resolution as may be necessary or desirable to comply with custom, or otherwise, as may be determined by the Bank prior to the delivery thereof to the Bondholder, Section 303 - Execution and Authentication. (A) The Bonds shall be executed in the name of the Bank by the manual or facsimile signature of its Chairman or Vice-Chairman and its corporate seal (or a facsimile thereof) shall be thereunto affixed, imprinted, engraved or otherwise reproduced, and attested by the manual or facsimile signature of its Secretary or such officer or employee of the Bank as shall be directed by the Series Resolution authorizing the issuance thereof, or in such other manner as may be required by law. In case any one or more of the officers or employees who shall have signed or sealed any of the Bonds shall cease to be such officer or employee before the Bonds so signed and sealed shall have been actually authenticated and delivered by the Trustee, such Bonds may, nevertheless, be authenticated and delivered as herein provided, and may be issued as if the persons who signed or sealed such Bonds had not ceased to hold such offices or be so employed. Any Bonds of a Series may be signed and sealed on behalf of the Bank by such persons as at the actual time of the execution of such Bond shall be duly authorized or hold the proper office in or employment by the Bank, although at the date of the Bonds of such Series such persons may nol have been so authorized or have held such office or employment. (B) The Bonds of each Series shall bear thereon a certificate of authentication, in the form set forth in the Series Resolution authorizing such Bonds, executed manually by the Trustee. Only such Bonds as shall bear thereon such certificate of authentication shall be entitled to any right or benefit under the Resolution and no Bond shall be valid or obligatory for any purpose until such cedificate of authentication shall have been duly executed by the Trustee. Such certificate of the Trustee upon any Bond executed on behalf of the Bank shall be conclusive evidence that the Bond so authenticated has been duly authenticated and delivered under the Resolution and that the Holder thereof is entitled to the benefits of the Resolution. ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 17 Page Section 304 - InterchanqeabiNy of Bonds. Bonds, upon surrender thereof at the corporate trust office of the Trustee with a written instrument of transfer satisfactory to the Trustee, duly executed by the registered owner or their attorney duty authorized in writing, may, at the option of the registered owner thereof, be exchanged for an equal aggregate principal amount of registered Bonds of the same Series, maturity, and interest rate as the surrendered Bond. Section 305 - Neqotiability, Transfer and Reqistry. All the Bonds issued under this Resolution shall be negotiable as provided in the Act, subject to the provisions for registration and transfer contained ~n this Resolution and in the Bonds. So long as any of the Bonds shall remain Outstanding, the Bank shall maintain and keep. at the corporate trust office of the Trustee, books for the registration and transfer of Bonds; and, upon presentation thereof for such purpose at said office, the Bank shall register or cause to be registered therein, and permit to be transferred thereon, under such reasonable regulations as it or the Trustee may prescribe, any Bond entitled to registration or transfer. So long as any of the Bonds remain Outstanding. the Bank shall make all necessary provisions to permit the exchange of Bonds at the corporate trust office of the Trustee. The Bank and each Fiduciary may deem and treat the person in whose name any Bond shall be registered upon the books of the Bank as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal and Redemption Price, if any, of and interest on such Bond and for all other purposes, and all such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the Bank nor any Fiduciary shall be affected by any notice to the contrary, The Bank agrees to indemnify and save each Fiduciary harmless from and against any and all loss, cost, charge, expense judgment or liability incurred by it, acting in good faith and without negligence under this Resolution, in so treating any such registered owner. Section 306 - Requlations with Respect to Exchanqes and Transfers. In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the Bank shall execute and the Trustee shall authenticate and deliver Bonds in accordance with the provisions of this Resolution. All Bonds surrendered in any such exchanges or transfers shall forthwith be cancelled by the Trustee. For every such exchange or transfer of Bonds. whether temporary or definitive, the Bank or the Trustee may, as a condition precedent to the privilege of making such exchange or transfer, make a charge sufficient to reimburse it for any tax. fee or other governmental charge required to be paid with respect to such exchange or transfer. Notwithstanding any other provision of this Resolution the cost of preparing each registered Bond upon each exchange or transfer, and any other expenses of the Bank or the Trustee incurred in connection therewith (except any applicable tax, fee or other governmental charge) shall be paid by the Bank as an Administrative Expense. Neither the Bank or the Trustee shall be required (i) to make any exchange or transfer of Bonds of any Series during the ten (10) days (or such other period of time as may be specified in the Series Resolution authorizing such Series) next preceding an interest payment date on the Bonds of such Series or preceding any selection of Bond of such Series to be redeemed or (ii) to transfer or exchange any Bonds previously called for redemption. Section 307- Bonds Mutilated Destroyed Stolen or Lost. In case any Bond shall become mutilated or be destroyed, stolen or lost, the Bank shall execute and the Trustee shall authenticate and deliver a new Bond of like Series, maturity and principal amount as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond, upon surrender and cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost. upon filing with the Bank evidence satisfactory to the Bank and the Trustee that such Bond have been destroyed, stolen or lost and proof of ownership thereof, and upon furnishing the Bank and the Trustee with indemnity satisfactory to them and complying with such other reasonable regulations as the Bank and the Trustee may prescribe and paying such expenses as the Bank and the Trustee may incur in connection therewith. All Bonds so surrendered to the Trustee shall be cancelled by it and evidence of such cancellation shall be given to the Bank. Any such new Bonds issued pursuant to this section in substitution for Bonds alleged to be destroyed, stolen or lost shall constitute original additional contractual obligations on the part of the Bank, regardless of whether the Bonds so alleged to be destroyed, stolen or lost be at any time enforceable by anyone, and shall be equally secured by and entitled to equal and proportionate benefits with all other Bonds issued under this Resolution, in any moneys or securities held by the Bank or the Fiduciaries for the benefit of the Bondholders, If a Bondholder satisfies the conditions set forth in this section for the replacement of a mutilated Bond or a Bond alleged to be destroyed, stolen, or lost and such Bond has matured or all principal thereof and interest thereon shall become due for any other reason, then the Trustee may pay such principal of and interest on such Bond without issuing a replacement Bond. Section 308 - Preparation of Definitive Bonds; Temporary Bonds, Until the definitive Bonds of any Series are prepared, the Bank may execute, in the same manner as is provided in Section 303, and upon the request of the Bank, the Trustee shall authenticate and deliver, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds, except as to the denominations thereof and as to exchangeability for registered Bonds, one or more temporary Bonds, substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued in such denominations as may be authorized by the Bank, and with such omissions, insertions and variations as may be appropriate to temporary Bonds. The Bank at its own expense shall prepare and execute and, upon the surrender thereof of such temporary Bonds to the Trustee. The Trustee shall authenticate and, without charge to the holder thereof, deliver in exchange therefor definitive Bonds of the same aggregate principal amount and Series and maturity as the temporary Bonds surrendered. Until so ALAKSA MUNICPAI. BOND BANK ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) General Obligation Bond Resolution (Atnended) Page 19 Page 20 exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as definitive Bonds authenticated and issued pursuant to this Resolution. If the Bank shal! authorize the issuance of temporary Bonds in more than one denomination, the holder of any temporary Bond or Bonds may, at his option, surrender the same to the Trustee in exchange for another temporary Bond or Bonds of like aggregate principal amount, Series and maturity of any nlher authorized denominalion or denominations, and thereupon the Bank shall execute and the Trustee shall authenticate and, in exchange for the temporary Bond or Bonds so surrendered and upon payment of the taxes, fees and charges provided for in Section 306, shall deliver a temporary Bond or Bonds of like aggregate principal amount, Series and maturity in such other authorized denomination or denominations as shall be requested by such holder. All temporary Bonds surrendered in exchange either for another temporary Bond or Bonds or for a definitive Bond or Bonds shall be forthwith cancelled by the Trustee. Section 309 - Cancellation and Destruction of Bonds. All Bonds paid or redeemed, either at or before maturity, shall be delivered to the Trustee when such payment or redemption is made, and such Bonds, together with all Bonds purchased by the Trustee, shall thereupon be promptly cancelled. Bonds so cancelled may, at any time, be cremated or otherwise destroyed by the Trustee, who shall execute a Certificate of cremation or destruction in duplicate by the signature of one of its authorized officers describing the Bonds so cremated or otherwise destroyed, and one executed Certificate shall be filed with the Bank and the other executed Certificate shall be retained by the Trustee. ARTICLE IV REDEMPTION OF BONDS Section 40I - Redemption Provisions. The Bonds of each Series may be subject to redemption prior to maturity at such times and upon such terms as shall be fixed by the related Series Resolution. If less than all of the Bonds of any one maturity of a Series shall be called for redemption, the particular units of Bonds, as determined in accordance with Section 403 herein, to be redeemed shall be selected by lot by the Trustee, or in any manner as the Trustee, in its sole discretion, may deem appropriate and fair. Section 402 - Notice of Redemption. (A) In the event any of the Bonds are to be redeemed, the Registrar shall cause notice to be given as provided in this Section 402. Unless otherwise specified in the Series Resolution authorizing the issuance of the applicable Series of Bonds, notice of redemption (i) shall be filed with the paying agent designated for the Bonds being redeemed and (ii) shall be mailed by first class mail. postage prepaid, to all Bondholder of Bonds to be redeemed at their addresses as they AI AKSA MONICPAI BOND BANK General Obligation Bond Resolution (Amended) appear on the registration books of the Trustee, at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption. Such notice shall state the following information: (1) the complete official name of the Bonds, including Series, to be redeemed, the identification numbers of Bonds and the CUSIP numbers, if any, of the Bonds being redeemed, provided that any such notice shall state that no representation is made as to the correctness of CUSlP numbers either as printed on such Bonds or as contained in the notice of redemption and that reliance may be placed only on the identification numbers contained in the notice or printed on such Bonds; (2) any other descriptive information needed to identify accurately the Bonds being redeemed, including, but not limited to, the original issue date or dated date of and interest rate on such Bonds: (3) in the case of partial redemption of any Bonds, the respective principal amounts thereof to be redeemed: (4) the date of mailing of redemption notices and the redemption date; (5) the redemption price; (6) that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date; and (7) the place where such Bends are to be surrendered for payment of the redemption price, designating the name and address of the redemption agenl with the name of a contact person and telephone number. (B) In addition to the foregoing, further notice of any redemption of Bonds hereunder shall be given by the Trustee, at least two (2) Business Days in advance of the mailed notice to Bondholders, by registered or certified mail or overnight delivery service, to all registered securities depositories then in the business of holding substantial amounts (as reasonably determined by the Bondholders) of obligations of types comprising the Bonds and to at least two national information services that dis’seminate notices of redemption of obligations such as the Bonds. Such further notice shall contain the information required in clause (a) above. Failure to give all or any portion of such further notice shall not in any manner defeat the effectiveness of a call for redemption, ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 21 Page 22 (C) Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall bear the CUSlP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. (D) If at the time of mailing of any notice of redemption there shall not be on deposit with the Trustee moneys sufficient to redeem all the Bonds called for redemption, such notice shall state that such redemption is subject to the deposit of the redemption moneys with the Trustee not later than the redemption date and that such notice shall be of no effect unless such moneys are so deposited. (E) A second notice of redemption shall be given, not later than ninety (90) days subsequent to the redemption date, to Bondholders of Bonds or portions thereof redeemed but who failed to deliver Bonds for redemption prior to the 60th day following such redemption date. Any notice mailed shall be conclusively presumed to have been duly given, whelher or not the owner of such Bonds receives the notice. Receipt of such notice shall not be a condition precedent to such redemption, and failure so to recewe any such notice by any of such Bondholders shall not affect the validity of the proceedings for the redemption of the Bonds. (F) In case any Bond is to be redeemed in part only, the notice of redemption which relates to such Bond shall state also that on or after the redemption date, upon surrender of such Bond, a new Bond in principal amount equal to the unredeemed portion of such Bond will be issued. Section 403- Partially Redeemed Fully Reqistered Bonds. Unless otherwise specified in the Series Resolution authorizing the issuance of the applicable Series of Bonds, in case any registered Bond shall be redeemed in part only, upon the presentation of such Bond for such partial redemption, the Bank shall execute and the Trustee shall authenticate and shall deliver or cause to be delivered to or upon the written order of the Holder thereof, at the expense of the Bank, a Bond or Bonds of the same Series, ~nterest rate and maturity, in aggregate principal amount equal to the unredeemed portion of such registered Bond. Unless otherwise provided by Series Resolution, a portion of any Bond of a denorn~nafion of more than the minimum Authorized Denomination to be redeemed will be in the principal amount of the minimum Authorized Denomination or an integral multiple ~hereof, and in selecting portions of such Bonds for redemption, the Trustee wil! treat each such Bond as representing that number of Bonds of the minimum Authorized Denomination which is obtained by dividing the principal amount of such Bonds by the minimum Authorized Denomination. ARTICLE V CUSTODY AND APPLICATION OF CERTAIN PROCEEDS OF BONDS Section 501- Application of Certain Proceeds. (A) Each Series Resolution authorizing the issuance of a Series of Bonds, a portion of the proceeds derived from the sale of which is to be applied to the purchase of Municipal Bonds, shall specify the name of each Governmental Unit which is to receive a Loan by the Bank from such proceeds and the amount of such proceeds to be applied to the making of each such Loan which shall be the amount of each such Loan. Contemporaneously with the issuance, sale and delivery of any Series of Bonds, the Bank shall apply the amount of the proceeds derived from the sale of such Series of Bonds, if any, as shall be specified in said Series Resolution for the purpose of making such Loans to each of the Governmental Units specified in the Series Resolution authorizing the issuance of such Series of Bonds. (B) Accrued interest, if any, received upon the delivery of such Series of Bonds shall be deposited in the Interest Account. The amount received as a premium over the principal amount of such Series of Bonds, if any, upon the delivery of such Series of Bonds shall be applied as provided in the Series Resolution authorizing such Series of Bonds. (C) The amount, if any, necessary to cause the amount on deposit in the Reserve Fund to satisfy the Reserve Fund Requirement. (D) Any remaining proceeds derived from the sale of a Series of Bonds shall be applied as provided in the Series Resolution authorizing such Series of Bonds. Section 502 - Loans. (A) A Loan to each Governmental Unit shall be made from the portion of the proceeds derived from the sale of each Series of Bonds specified in the Series Resolution authorizing the issuance of such Series of Bonds and the amount of each such Loan shall be the amount specified in such Series Resolution. All such payments made pursuant to such Series Resolution shall be subject to the provisions and restrictions of this Article V, and the Bank covenants that it will not cause or permit to be paid from such portion of the proceeds derived from the sale of such Series of Bonds any sums except in accordance with such provisions and restrictions. (B) The Trustee shall pay to each Governmental Unit the amount of the Loan upon receipt by the Trustee of: (1) a written requisition of the Bank signed by an Authorized Officer stating (i) the name of the Governmental Unit to which the payment is to be made; and (ii) the amount to be paid: (2) a certificate signed by an Authorized Officer and attached to the requisition certifying that the terms and provisions of the Loan Agreement providing for such Loan are in compliance with Section 9!3, and that to the knowledge of such Authorized Officer such Governmental Unit is not in default under any of the terms or provisions of said Loan Agreement; ALAKSA MUNICPAL BOND BANK ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) General Obligation Bond Resolution (Amended) Page 24 Page 23 (3) a Counsel’s Opinion stating that such Municipal Bonds are valid obligations of such Governmental Unit as required by the Act and that the Loan Agreement has been duly authorized and executed by the Governmental Unit and constitutes a valid and binding obligation of the Governmental Unit enforceable in accordance with its terms; and (4) such Municipal Bonds of such Governmental Unit, registered as to both principal and interest in the name of the Bank or the Trustee and delivered in accordance with the Act. Upon receipt of such requisition, accompanying certificate, Counsel’s Opinion and Municipal Bonds. the Trustee shall pay such amount directly to the Governmental Unit entitled thereto as named in such requisition. Section 503- Retention and Inspection of Documents All requisitions and certificates and Counsel’s Opinions and Municipal Bonds received by the Trustee, as required in this Article V as conditions of payment may be relied upon by and shall be retained in the possession of the Trustee, subject at all times during normal business hours to the inspection of the Bank and, after written request received by the Trustee at least five business days prior to the date of inspection, by any Holder of at leasl five per cent in principa! amount of the Series of Outstanding Bonds. ARTICLE Vl ESTABLISHMENT OF FUNDS AND ACCOUNTS AND APPLICATION THEREOF Section 601 - Pledqe. (A) The Bonds shall be direct and general obligations of the Bank, and its full faith and credil are pledged to the payment of the principal and redemption premium, if any, of and interest on the Bonds, subject to any agreements heretofore and hereafter made with the Holders of any other notes or bonds of the Bank pledging any particular revenues or assets not pledged under this Resolution. (B) The Municipal Bonds and the Municipal Bonds Payment, the investments thereof and the proceeds of such investments, if any, and all funds and accounts established by this Resolution to be held by the Trustee are hereby pledged and assigned for the payment of the principal of, Redemption Price of, interesl on, and Sinking Fund Installments for, the Bonds in accordance with the terms and provisions of this Resolution, subject only to the provisions of this Resolution permitting the application thereof for the purposes and on the terms and conditions set forth in this Resolution authorizing the Bank to create Security Interests in said Municipal Bonds and Municipal Bonds Payment in favor of Credit Enhancement Agencies and counterparties to Interest Rate Exchange Agreements, Subject to the provisions of Section 805 of this Resolution. this pledge shall be valid and binding from and after the date of adoption of th~s Resotulion. and the Municipal Bonds and the Municipal Bonds Paymenl and all other momes and securities in the funds and accounts established by this Resolution to be held by the Trustee AI AKSA M JNICPAI_ BOND BANK General Obligation Bond Resolution (Amended) hereby pledged shall immediately be subject to the lien of such pledge without any further act, and such lien shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Bank, regardless of whether such parties have notice thereof. Section 602 - Establishment of Funds and Accounts. (A) The Alaska Municipal Bond Bank Debt Service Fund (the "Debt Service Fund") is hereby established and shall be maintained and held by the Trustee pursuant to the provisions of this Resolution. There is hereby created and established in the Debt Service Fund an "Interest Account," a "Principal Account" and a "Redemption Account" each of which shall be held by the Trustee. Amounts in the Interest Account, the Principal Account and the Redemption Account shall be used solely for the purpose of paying the principal of, Redemption Price of, interest on and Sinking Fund Installments for, the Bonds and of retiring such Bonds at or prior to maturity in the manner provided herein and in any Series Resolution. Amounts deposited in the Interest Account and the Principal Account shall be disbursed and applied by the Trustee at the times and in lhe manner provided in this Article VI and in paragraph (3) of Section 203, (B) There is hereby established within the Alaska Municipal Bond Bank Reserve Fund created by Section 44.85.270 of the Act, a 2005 General Obligation Bond Resolution Reserve Account (the "Reserve Fund") which shall be maintained and held by the Trustee pursuant to the provisions of this Resolution. (C) There is hereby established a Rebate Fund, and within such fund, a separate account for each Series of Bonds. (D) There is hereby established an Operating Fund which shall be held by the Bank pursuant to the provisions of this Resolution. Section 603 - Reserve Fund. (A) On or before Ihe first day of each month, the Trustee shall sel aside from amounts in the Reserve Fund derived from income or interest earned and profits realized by the Reserve Fund due to the investment thereof, an amount which, when added to the amounts theretofore set aside for such purpose and not paid into the Interest Account, will on such day be equal to the unpaid interest on the Reserve Fund Obligations accrued and to accrue to the last day of such month. If the Trustee so determines, said amounts may be deposited in an account which the Trustee may create in the Reserve Fund under the name of "Reserve Fund Obligations Interest Account". On or before each interest payment date of the Reserve Fund Obligations, said amounts shall be deposited in the Interest Account. (B) On or before each principal payment date and Sinking Fund Inslatlment payment date of Reserve Fund Obligations, the Trustee shall withdraw from amounts in the Reserve Fund and deposit in the Principal Account, an amount which, when added to the amount then on deposit in the Principal ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 25 Page 26 Account and derived from sources other than Municipal Bonds Payment, will be equal to the Principal Installment of the Reserve Fund Obligations falling due on such date. (C) On or before December 31 of each year, after complying with the provisions of paragraphs (1) and (2) above to the extent required by such date, the Trustee shall withdraw from the Reserve Fund, any amount remaining therein derived from income or interest earned and profits realized by the Reserve Fund due to the investment thereof, and pay over said amount to the Bank for deposit in the Operating Fund but only to the extent that there remains after such withdrawal an amount in the Reserve Fund at least equal to the Required Debt Service Reserve. (D) The Reserve Fund Requirement may be satisfied with (i) monies made available by the State and paid to the Bank for the purpose of the Alaska Municipal Bond Bank Reserve Fund created by Section 44.85.270 of the Act in the amount provided by a Series Resolution; (ii) all monies paid to the Bank pursuant to the Act for the purpose of restoring the Reserve Fund to the amount of the Required Debt Service Reserve; (iii) such portion of the proceeds of sale of Bonds, if any, as shall be provided by any Series Resolution: (iv) Credit Enhancement; (v) any other monies which may be made available to the Bank for the purposes of the Reserve Fund from any other source or sources; or (vi) any combination of the foregoing. (E) In the even( there shall be, on any interest payment date, a deficiency in the Inlerest Accounl, or, in the event there shall be, on any principal payment date or Sinking Fund Installment paymenl date, a deficiency in the Principal Accouot, the Trustee shall make up such deficiencies from the Reserve Fund by the withdrawal of cash therefrom for lhat purpose and by (he sale or redemption of securities held in (he Reserve Fund. if necessary, in such amounts as will, at the respective times, provide monies in the Interest Account and Principal Account sufficien~ to make up any such deficiency. If a deficiency still exists immediately prior to a debt service payment date and after the withdrawal of cash, the Bank shall then draw from aoy Credit Enhancement for Ihe Bonds in sufficient amount to make up such dirl"erence. Drawings under the Credit Enhancement shall be made on a pro-rata basis (in proportion to the respective maximum coverages) available under the Credit Enhancement. Such draw shall be made at such times and under such conditions as such Credit Enhancement shall provide. Section 604 - Interest Account, Principal Account and Redemption Account. (A) Except as otherwise provided in paragraph (3) of Section 204, the Trustee shall deposit Municipal Bonds Interest Payments and any other monies available for the payment of interest in the Interest Account upon receipt thereof. The Trustee shall, on or before each interest payment date of the Bonds. pay. out of amounts then held for the credit of the Interest Account, to itself and the Paying Agents. the amounts required for the payment by it and such Paying Agents of the interest becoming due on the Bonds on such interest payment date, and such amounts so withdrawn are hereby irrevocably pledged for and shall be applied to the payment of such interest. The Trustee shall also pay out of the Interest Account to itself and the appropriate Paying Agents, on or before any redemption date for Bonds being refunded by Refunding Bonds, the amount required for the payment of interest on the Bonds then to be redeemed, to the extent not otherwise provided in this Resolution. (B) The Trustee shall deposit Municipal Bonds Principal Payments and any other monies available for the payment of principal in the Principal Account, upon receipt thereof. The Trustee shall, on or before each principal payment date of or Sinking Fund Installment date for, the Bonds, pay, out of the monies then held for the credit of the Principal Account, to itself and the Paying Agents, the amounts required for the payment by it and such Paying Agents of the principal or Sinking Fund Installment due on the Bonds on such date, and such amounts so withdrawn are hereby irrevocably pledged for and shall be applied to the payment of such principal or Sinking Fund Installment, (C) The Trustee shall establish in the Redemption Account a separate sub-account for the Bonds of each Series Outstanding. (1) Any monies deposited into the Redemption Account from any source other than pursuant to Section 607 or Section 916 shall be applied to the purchase or redemption of Bonds in a manner to be determined by the Bank in accordance with Article IV. Any monies deposited into the Redemption Account pursuant to Section 607 shall be applied to the purchase or redemption of Reserve Fund Obligations in a manner to be determined by the Bank in accordance with Article IV. (2) The Bank shall deposit or cause to be deposited in the Redemption Account such portion of the monies received as the proceeds of sale or redemption of Municipal Bonds, as required by Section 916 hereof, and, upon any such deposit, shall advise the Trustee in writing of the Series of Bonds to which the same relates. Upon receipt, such monies shall be set aside by (he Trustee in the appropriate Series sub-account, Monies so held in each separate sub-account by the Trustee shall be applied to the purchase or retirement of the Bonds of the Series in respect of which such sub-account was created as follows: (i) The Trustee shall promptly apply such monies to the purchase of Bonds of the Series in respect of which such sub-account was created having the same malurity date or dates and in the same principal amount within each maturity as the Municipal Bonds Principal Payments required to be made for the Municipal Bonds sold by the Bank or redeemed by the Governmental Unit at the most advantageous price obtainable with reasonable diligence, such price, however, not to exceed the Redemption Price which would be payable on the next ensuing date on which the Bonds of the Series so purchased are redeemable according to their terms, The Trustee shall pay the interest accrued on the Bonds so purchased to the date of sale or redemption of the Municipal Bonds from the Interest account and the balance of the purchase price from the ALAKSA MUNICPAL BOND BANK ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) General Obligation Bond Resolution (Amended) Page 27 Page 28 applicable sub-account in the Redemption Account, as hereinabove provided, but no such purchase shall be made by the Trustee within the period of forty-five (45) days next preceding a date on which such Bonds are subject to redemption under the provisions of the Series Resolution authorizing the issuance thereof. (ii) In the event the Trustee is able to purchase the requisite principal amount of Bonds from a sub-account in accordance with and under the foregoing provisions of this subparagraph (b) at a purchase price less than the sum of the deposits to such sub-account from the proceeds from the sale or redemption of Municipal Bonds and the applicable transfers from the Interest Accounl. upon the payment by the Trustee of the purchase price of such Bonds, the Trustee shall transfer the balance of monies remaining in such sub-account to the Bank for deposit in the Operating Fund, (iii) In the event the Trustee is unable to purchase the requisite principal amount of Bonds the Truslee shall call for redemption on the next ensuing redemption date such amount of Bonds of the Series in respect of which such sub-account was created having the same maturity date or dates and in the same principal amount within each maturity as the Municipal Bonds Principal Payments required to be made for the Municipal Bonds sold by the Bank or redeemed by lhe Governmental Unit, as, at the Redemption Price thereof, will exhaust said sub-account as nearly as may be. Such redemption shall be made pursuant to lhe provisions of Article IV hereof. The Trustee shall pay the interest accrued on the Bonds so redeemed to the date of sale or redemption of the Municipal Bonds from the Interest Account and the balance of such interest to the date of redemption of the Bonds and the Redemption Price from the applicable sub-account. (3) The Bank may. from time to time. by written instructions direct the Trustee to make purchases under subparagraph (b) above only after receipt of lenders. The Bank may specify the length of notice to be given and the date on which tenders are to be accepted or may authorize the Trustee to determine the same ~o ils discretion. Atl such tenders shall be by sealed proposals and no tenders shall be considered or accepled el any pnce exceeding lhe price specified under subparagraph (b) above for lhe purchase of Bonds The Truslee shall accept lenders with the lowest price, as determined by the Trustee, and if lhe monies available for purchase pursuanl to such tenders are nol sufficienl to permit acceptance of all tenders and Ihere shall be tenders al an equal price above the amount of monies available for purchase then the Trustee shall select by lot, in such manner as the Trustee shall determine in its discretion, the Bonds tendered which shall be purchased. No purchase of Bonds, either or~ tenders or olherwise, shall be made by the Trustee within the period of forty-five (45) days nexl preceding any date on which such Bonds are subject to redemplion. (D) Monies sel aside from time Io time with the Truslee and Paying Agents for the payment of principal or Redemption Price of, interest on and Sinking Fund Installments for, the Bonds shall be held in ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended} Page 29 trust for the Holders of the Bonds. Until so set aside for the payment of such principal, Redemption Price. interest, and Sinking Fund Installments. all monies in such accounts shall be held in trust for the benefit of the Holders of all Bonds at the time Outstanding equally and ratably and without any preference or distinction as between Bonds of different Series, except that monies on deposit in the separate sub- accounts established in the Redemption Account shall be held in trust for and applied to the payment of the Bonds of the Series for which the applicable sub-account was established. Section 605 - Rebate Fund. (A) The Trustee shall establish and thereafter maintain, so long as the Bonds are Outstanding, a Rebate Fund which shall be held separate and apart from all other funds and accounts established under this Resolution and from all other moneys of the Trustee. (B) All amounts in the Rebate Fund. including income earned from investment of the fund, shall be held by the Trustee free and clear of the lien of this Resolution. In the event the amount on deposit in the Rebate Fund exceeds the aggregate amount of the Rebate Requirement for all Series of Bonds. as verified in writing by an independent public accountant or other qualified professional selected by the Bank at the time the Rebate Requirement is determined, less amounts of the Rebate Requirement theretofore paid to the United States for all Series of Bonds, the Trustee shall, upon the Bank’s request, withdraw from the Rebate Fund and pay to or upon the order of the Bank an amount not to exceed such excess to the Bank for deposit in the Operating Fund. (C) The Bank shall determine the amount of the Rebate Requirement with respect to each Series of Bonds on each applicable Rebate Calculation Date. The Bank shall deposit into the Rebate Fund the Rebate Requirement, if any, with respect to each Series of Bonds. The Bank shall instruct the Trustee to withdraw from the Rebate Fund and pay over to the United States Government with respect to each Series of Bonds: (1) not less frequently than once each five years commencing no later than 60 days after the first Rebate Calculation Date for such Series of Bonds and upon each fifth anniversary of such date, an amount which when added to all previous rebate payments made with respect to such Series of Bonds equals 90% of the sum of the Rebate Requirement pertaining to such Series of Bonds plus the amount, if any, of Rebate Requirement theretofore paid to the United States with respect to such Series of Bonds, and (2) nol later than 60 days after the retirement of lhe last Bond of such Series, 100% of the Rebate Requirement with respect to such Series. The determination of rebatable arbitrage made with respect to each such payment date and with respect to any withdrawal and payment to the Bank from the Rebate Fund pursuant to this Resolution must be verified in writing by an independent public accountant or other qualified professional selected by the Bank. (D) The Trustee shall, at least sixty (60) days prior to each Rebate Calculation Date, notify the Bank of the requirements of this Section. By agreeing to give this notice, the Trustee assumes no responsibility whatsoever for compliance by the Bank with the requirements of Section 148 of the Code or any successor. The Bank expressly agrees that (notwithstanding any other provision of this Resolution) ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 30 any failure of the Trustee to give any such notice, for any reason whatsoever, shall not cause the Trustee to be responsible for any failure of the Bank to comply with the requirements of said Section 148 or any successor thereof. (E) The Trustee, on behalf of the Bank, shall keep and retain, until the date six years after the retirement of the last of the Bonds of each Series, records with respect to each Series of the Bonds and the investment and expenditure of amounts on deposit with the Trustee to comply with the aforementioned arbitrage rebate requirements, including without limitation a complete fist of all investments and reinvestments of amounts on deposit with the Trustee with respect to each Series of the Bonds. For purposes of the computation required above, the Trustee shall, upon request, furnish to the Bank all information in the Trustee’s control which is necessary for such computations. (F) The Bank hereby covenants and agrees that it will not enter, and will not cause the Trustee to enter into. any transaction or cause any transaction to be entered into with respect to the investment of gross proceeds of the Bonds. or otherwise, which reduces the amount which may be required to be paid to the United States pursuant to the arbitrage rebate requirements specified herein above, because such transaclion results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm’s length and had the y~etd on each Series of the Bonds not been relevant to either party. (G) The provisions of this Section may be amended or deleted, with respect to any or all series of the Bonds, from this Resolution upon receipt by the Bank and the Trustee of an opinion of bond counsel lhat such amendment or deletion wilt not adversely affect the exclusion from gross income of interest on the Bonds. Section 606- Operatinq Fund. There shall be deposited in the Operating Fund all Fees and Charges collected by the Bank or file Trustee, to the extent not otherwise encumbered or pledged, and any other monies which may be made available to the Bank for the purposes of the Operating Fund from any other source or sources including, without limiting the generality of the foregoing, amounts transferred pursuant to paragraph (3) of Section 603, subparagraph (b)(ii) of paragraph (3) of Section 604 and the amount received as a premium over the principal amount of a Series of Bonds, if any, to the extent provided in the Series Resolution authorizing such Series. Monies at any time held for the credit of the Operating Fund shall be used for and applied solely to the following purposes: (a) To pay the Administrative Expenses of the Bank: (b) To pay the fees and expenses of the Trustee and Paying Agents; (c) To pay financing costs incurred with respect to a Series of Bonds, including fees and expenses of the attorneys, initial Trustee’s and Paying Agents’ fees and expenses, costs and expenses of financial consultants, printing costs and expenses, the payment to any officers, departments, boards, Al AKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 31 agencies, divisions and commissions of, or reimbursement to, the State of any statement of cost and expense or advances rendered to the Bank pursuant to the Act, and all other financing and other miscellaneous costs; and (d) To pay any expenses in carrying out any other purpose then authorized by the Act. All amounts in the Operating Fund shall be free and clear of any lien or pledge created by this Resolution but shall be held and applied in accordance with this section. Section 607- Reduction of Required Debt Service Reserve. Whenever the amount of the Required Debt Service Reserve is reduced, the Trustee, only upon the written request of the Bank signed by an Authorized Officer, shall withdraw from any amounts on deposit in the Reserve Fund and deposit in the Redemption Account any amount not exceeding the amount of such reduction of the Required Debt Service Reserve. The amount to be withdrawn from the Reserve Fund in each instance pursuant to the provisions of this paragraph shall be determined by the Bank and the amount thereof certified to the Trustee in writing signed by an Authorized Officer. Section 608 - Trustee’s Maintenance of Records on Payment of Bonds. In connection with the payment, redemption or purchase of all Bonds under the provisions of this Resolution, the Trustee shall keep accurate records of the source of the monies used to pay, redeem or purchase such Bonds. Section 609 - Qbtaininq Credit Enhancements and Interest Rate Exchanqe Aqreements. Except as otherwise provided in a Series Resolution authorizing the issuance of a Series of Bonds, the Bank may obtain Credit Enhancement or an Interest Rate Exchange Agreement with respect to such Bonds either at the time of issuance of the Bonds or any time thereafter. Section610- Creation of Additional Funds Accounts and Subaccounts; Separate Credit Enhancement Funds: Pledqe with Respect to Credit Enhancements and Interest Rate Exchanqe Aqreements. (A) The Trustee shall establish within any Fund such Accounts in addition to the Accounts herein established as the Bank shall by Series Resolution or Supplemental Resolution determine and shall in like manner establish within any Account such additional subaccounts for the purposes of such Account as the Bank shall so determine, (B) The Bank may at any time by execution of a Series Resolution or Supplemental Resolution establish a Fund or Account in which to hold any Credit Enhancement and the proceeds thereof or drawings thereunder (a "Credit Enhancement Fund") for the benefit of any Series of Bonds to which such Credit Enhancement has been pledged, which pledge may be (but is not required to be) exclusively for the benefit of such Series of Bonds or certain designated Series of Bonds and not equally and ratably among all the Series of Bonds. Amounts held in a Credit Enhancement Fund shall not be considered a ALAKSA MUNtCPAL BOND BANK General Obligation Bond Resolution (Amended) Page 32 pad of the Municipal Bonds Payment but, rather, shall be subject to such lien and pledge as may be created in the Series Resolution creating such Credit Enhancement Fund. {C) If the Bank creates a Credit Enhancemenl Fund, the Bank may direct, in the Series Resolution creating such Credit Enhancement Fund, that the Trustee pay, and if so directed in writing by the Bank the Trustee shall pay, principal (including premium, if any) of and interest on the Bonds secured by such Credit Enhancement Fund directly from amounts in such Credit Enhancement Fund and that the Trustee reimburse, and if so directed in writing by the Bank the Trustee shall so reimburse, such Credit Enhancement Fund for such payment from the Credit Enhancement Fund; provided, however, that the Bank may, in the Series Resolution authorizing the Series of Bonds to be secured by Credit Enhancement, treat any, or any part of any, obligation owed or which may in the future be owed to the Credit Enhancement Agency pursuant to the Credit Enhancement Instrument as the Series of Bonds secured by such Credit Enhancement if the Corporation, at the time of issuance of said Series of Bonds and at the time of the creation of any such obligation satisfies the requirements of Section 203, in which case the Trustee shall pay the principal of and interest on any such obligations in accordance with the terms of this Resolufion treating such obligations as a Series of Bonds, In a Series Resolution authorizing a Series of Bonds secured by a Credit Enhancement Fund the Bank may fix provisions relaling to such Fund pursuanl to Ihe terms of a Series Resolution. In addition to the foregoing, the Bank may agree to permit a Credit Enhancement Agency to be subrogated to the rights of any Bondholders whose Bonds are secured by the Credit Enhancement provided that such Credit Enhancement Agency is not in default under such Credit Enhancemenl. ARTICLE VII SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS Seclion 701- Security for Depos!ls. All monies held hereunder by the Trustee shall be continuously and fully secured for the benefit of the Bank and the Holders of the Bonds in such manner as may lhen be required or permitted by applicable State or federal laws and regulations regarding the secunty for, or granting a preference in the case of, the deposit of trust funds. The Trustee or any Paying Agenl shall not be required to give security for the deposit of any monies with them held in trust for the payment of tile principal or Redemption Price of or interest oil any Bonds, or for the Trustee to give secunty for any monies which shall be represented by obligations purchased under the provisions of this Resolution as an investment of such monies. Section 702 - Investment of Funds and Accounts Held by the Truste~. (A) Upon the deposit of any amounts in any fund or account held by the Trustee under the provisions of this Resolution, in the manner hereinabove prescribed, the Bank may furnish the Trustee with a schedule of dates on which it is estimated by the Bank that such momes in said fund or account will be required to be expended. The Bank may from time to time amend the schedule so furnished. Upon receipt of such schedule or ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 33 amended schedule, the Bank may direct the Trustee to, or in the absence of receipt of such schedule or such direction the Trustee shall, invest and reinvest in Investment Securities the monies in said fund or account so that the maturity date or date of redemption at the option of the holder of such obligations shall coincide as nearly as practicable with the times at which monies are needed by the Bank to be so expended. The Bank also may direct the Trustee that all or part of the amounts in the Interest Account and the Principal Account in the Debt Service Fund not be invested for specified periods of time. (B) Obligations purchased as an investment of monies in any fund or account held by the Trustee under the provisions of this Resolution shall be deemed at all times to be a part of such fund or account and the income or interest earned, profits realized or losses suffered by a fund or account due to the investment thereof shall be retained in, credited or charged, as the case may be, to such fund or account, except that the income or interest earned and profits realized by the Reserve Fund due to the investment thereof shall be transferred by the Trustee in accordance with and to the extent provided by paragraphs (1), (3) and (5) of Section 603. (C) In determining whether or not the amount in the Reserve Fund is at least equal to the Reserve Fund Requirement, the Trustee shall include the amount of interest earned or accrued thereon as of the date of evaluation and shall also include, but only if any other requirement therefor specified in a Series Resolution has been satisfied, the principal component of any Credit Enhancement then on deposit in the Reserve Fund. (D) Except as otherwise provided in the Resolution, the Trustee shall sell at the best price obtainable, or present for redemption or exchange, any obligation purchased by it as an investment pursuant to this Resolution whenever it shall be requested in writing by an Authorized Officer of the Bank to do so or whenever it shall be necessary in order to provide monies to meet any payment or transfer from the fund or account for which such investment was made. The Trustee shall advise the Bank in wrifing, on or before the twentieth day of each calendar month, of the details of all investments held for the credit of each fund and account in its custody under the provisions of this Resolution as of the end of the preceding month, Section 703 - Liability of Trustee for Investments. The Trustee shall not be liable or responsible for the making of any investment authorized by the provisions of this Article, in the manner provided in this Article, or for any loss resulting from any such investment so made except for its own negligence or default. ARTICLE VIII THE TRUSTEE AND THE PAYING AGENTS ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 34 Section 801 - Appointment and Acceptance of Duties of Trustee, J.P. Morgan Trust Company, National Association, a trust company or bank having the powers of a trust company doing business and having a corporate trust office in Seattle, Washington, is hereby appointed as Trustee for the Holders from time to time of the Bonds. The Trustee shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by executing the certificate of authentication endorsed upon the Bonds, and, by executing such certificate upon any Bond, the Trustee shall be deemed to have accepted such duties and obligations not only with respect to the Bond so authenticated, but with respect to all the Bonds thereafter to be issued, but only, however, upon the terms and conditions set forth in the Resolution. Section 802 - Appointment and Acceptance of Duties of Payinq Aqents. The Bank shall appoint one or more Paying Agents for the Bonds of any Series in the Series Resolution authorizing such Bonds or shall appoint such Paying Agent or Paying Agents by or pursuant to a resolution of the Bank adopted poor to the authentication and delivery of such Bonds, and may at any time or from time to time appoint one or more other Paying Agents in the manner and subject to the conditions set forth in Section 812 for the appointment of a successor Paying Agent. The Trustee may be appointed to act as Paying Agent notwithstanding that it may then be acting in the capacity of Trustee. Each Paying Agent shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by written instrument of acceplance executed and delivered to the Bank and the Trustee. The principal or corporate trust offices of the Paying Agents are hereby designated as the respective agencies of the Bank for the payment of the interest on and principal or Redemption Price of the Bonds. Section 803- Responsibilities of Fiduciaries, (A) The recitals of fact herein and in the Bonds contained shall be taken as the statements of the Bank and the Fiduciaries assume any responsibility for the correctness of the same. No Fiduciary shall be deemed to make any representations as to the validity or sufficiency of this Resolution or of any Bonds issued hereunder or in respect of the security afforded by this Resolution, and no Fiduciary shall incur any responsibility in respect thereof. The Trustee shall, however, be responsible for its representations contained in its certificate on the Bonds. No Fiduciary shall be under any responsibility or duty with respect to any other Fiduciary. No Fiduciary shall be under any obligation or duty to perform any act which would involve it in expense or liability or to institute or defend any suit in respect hereof, or to advance any of its own moneys, unless indemnified to its satisfaction. No Fiduciary shall be liable in connection with the performance of its duties hereunder except for its own negligence or willful misconduct. Neither the Trustee nor any Paying Agent shall be under any responsibility or duty with respect to the application of any moneys paid to any one of the others or the use or application by the Bank of the Bonds or the proceeds thereof. (B) Except during the continuance of an Event of Default, the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Resolution, and no implied covenants or obligations shall be read into this Resolution against the Trustee, and, in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinion expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Resolution. (C) In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Resolution and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his own affairs, (D) No provision of this Resolution shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that (1) the Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts, (2) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Bonds relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Resolution, and (3) no provision of this Resolution shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Except as otherwise expressly provided herein, the Trustee shall determine whether any conditions or requirements set forth herein for any purpose have been met, and such determination by the Trustee shall be conclusive. (E) Regardless of whether it is therein expressly so provided, every provision of this Resolution, any Series Resolution, or any related document relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article. (F) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Resolution at the request or direction of any of the Bondholders pursuant to this Resolution, unless such Bondholders shall have offered to the Trustee security or indemnity to its satisfaction against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. (G) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, or other paper or document. ALAKSA MUNICPAL BOND BANK ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) General Obligation Bond Resolution (Amended) Page 35 Page 36 (H) The Trustee rnay execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. (I) The permissive right of the Trustee to do things enumerated in this Resolution shall not be construed as a duty. (J) In accepting the trusts hereby created, the Trustee acts solely as Trustee for the Bondholders and not in its individual capacity and all persons, including, without limitation, the Bondholders and the Bank having any claim against the Trustee arising from this Resolution shall look only to the funds and accounts held by the Trustee or its agent hereunder for payment except as otherwise provided herein. Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Bonds. Section 804- Evidence on Which Fiduciaries May Act. Each Fiduciary may rely and shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bond or other paper or document believed by it to be genuine, and to have been signed or presented by the proper party or parties. Each Fiduciary may consult with counsel, who may or may not be of counsel to lhe Bank. and the opinion of such shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in reliance thereon. Whenever any Fiduciary shall deem il necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action hereunder, including payment of moneys out of any Fund or Account, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed Io be conclusively proved and established by a certificate signed by an Authorized Officer, and such certificate shall be full warranl for any aclion taken or suffered in good faith under the provisions of this Resolulion upon the failh thereof, but in ils discretion the Fiduciary may in lieu thereof accept other evidence of such fact or matter or may require such further or additional evidence as to it may seem reasonable. Excepl as otherwise expressly provided herein, any request, order, notice or other direction required or permitted to be furnished pursuant to any provision hereof by the Bank to any Fiduciary shall be sufficiently executed if executed in the name of the Bank by an Authorized Officer. Section 805- Compensation. The Bank shall pay to the Trustee and to each Paying Agent from time ~o time reasonable compensation for al! services rendered under this Resolution, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of its attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Resolution, and the Trustee and each Paying Agent shall have a lien therefor on any and all funds at any time held by il under this Resolution. The Bank further agrees to indemnify and save the Trustee and AL AKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) each Paying Agent harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder, and which are not due to its negligence or default. Section 806 - Permitted Acts and Functions The Trustee and any Paying Agent may become the owner of any Bonds, with the same rights it would have if it were not such Trustee or Paying Agent. The Trustee and any Paying Agent may act as depository for, and permit any of its officers or directors Io act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bondholders or to effect or aid in any reorganization growing out of the enforcement of the Bonds or this Resolution, whether or not any such committee shall represent the Holders of a majority in principal amount of the Bonds then Outstanding. Section 807 - Resiqnation of Trustee. The Trustee may at any time resign and be discharged of the duties and obligations created by this Resolution by giving not less than ninety (90) days’ written notice to the Bank and to the registered owners of Bonds, specifying the date when such resignation shall take effect and such resignation shall take effect immediately upon the appointment of a successor Trustee pursuant to Section 809 hereof. Section 808 - Removal of Trustee The Trustee shall be removed by the Bank if at any time so requested by an instrument or concurrent instruments in writing, filed with the Trustee and the Bank, and signed by the Holders of a majority in principal amount of the Bonds then Outstanding or their attorneys- in-fact duly authorized, excluding any Bonds held by or for the account of the Bank. The Bank may remove the Trustee at anytime, except during the existence of an Event of Default, for such cause as shall be determined in the sole discretion of the Bank by filing with the Trustee an instrument signed by an Authorized Officer of the Bank. Section 809 - Appointment of Successor Trustee. In case at any time the Trustee shall resign or shall be removed or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of the Trustee, or of its property, shall be appointed, or if any public officer shall take charge or control of the Trustee, or of its property or affairs, the Bank covenaats and agrees that it will thereupon appoint a successor Trustee. The Bank shall provide written notice of such appointment to the registered owners of the Bonds. If in a proper case no appointment of a successor Trustee shall be made pursuant to the foregoing provisions of this Section within forty-five (45) days after the Trustee shall have given to the Bank written notice, as provided in Section 807, or after a vacancy in the office of the Trustee shall have occurred by reason of its inabitity to act, the Trustee or the Holder of any Bond may apply to any court of competent jurisdiction to appoint a successor Trustee. Said court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Trustee. ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 37 Page 38 Any Trustee appointed under the provisions of this Section 809 in succession to the Trustee shall be a trust company or bank in good standing having the powers of a trust company within or outside the Stale, and having a capital and surplus aggregating at least Fifty Million Dollars (S50,000,000) if there be such a trust company or bank willing and able to accept the office on reasonable and customary terms and authorized by law to perform aii the duties imposed upon it by this Resolution. Section 810- Transfer of Riqhts and Property to Successor Trustee. Any successor Trustee appointed under this Resolution shall execute, acknowledge and deliver to its predecessor Trustee, and also to the Bank. an instrument accepting such appointment, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become fully vested with all monies, estates, properties, rights, powers, duties and obligations of such predecessor Trustee, with like effect as if originally named as Trustee: but the Trustee ceasing to act shall nevertheless, on the written request of the Bank. or of the successor Trustee, execute, acknowledge and deliver such instruments of conveyance and further assurance and do such other things as may reasonably be required for more fully and certainly vesting and confirming in such successor Trustee all the right, title and interest of the predecessor Trustee in and to any property held by it under this Resolution, and shall pay over, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Should any deed, conveyance or instrument in writing from the Bank be required by such successor Trustee for more fully and certainly vesting in and confirming to such successor Trustee any such estates, rights, powers and duties, any and all such deeds, conveyances and instruments in writing shall, on request, and so tar as may be authorized by law, be executed, acknowledged and delivered by the Bank, Any such successor Trustee shall promptly notify the Paying Agents of its appointment as Trustee. The Bank shall pay the expenses of effecting a transfer under this Section. Section 811 - Merqer or Consolidation. Any company into which the Fiduciary may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which Fiduciary may sell or transfer all of its corporate trust business, shall be the successor to such Fiduciary without the execution or filing of any paper or the performance of any further act, provided that such company shall be a trust company or bank which is qualified to be a successor to the Trustee under Section 809 or which is qualified to be a successor to the Paying Agent under Section 8!2. Section 812 - Resiqnation or Removal of the Pa¥inq Aqents and Appointment of Successors. Any Paying Agent may at any time resign and be discharged of the duties and obligations created by this Resolution by giving at least sixty (60) days written notice to the Bank and the Trustee. Any Paying Agent may be removed at any time by an instrument filed with such Paying Agent and the Trustee and signed by an Authorized Officer of the Bank. Any successor Paying Agent shall be appointed by the Bank and shaIt be a trust company or bank having the powers of a trust company having a capital and surplus aggregating at least Fifty Million Dollars ($50,000,000)~ and willing and able to accept the office of Paying Agent on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Resolution. In the event of the resignation or removal of any Paying Agent. such Paying Agent shall pay over. assign and deliver any monies held by it to its successor, or if there be no successor then appointed, to the Trustee until such successor be appointed. In the event that for any reason there shall be a vacancy in the office of Paying Agent, the Trustee shall act as such Paying Agent. Section 813 - Evidence of Siqnatures of Bondholders and Ownership of Bonds. (A) Any request, consent or other instrument which this Resolution may require or permit to be signed and executed by the Bondholders may be in one or more instruments of similar tenor, and shall be signed or executed by such Bondholders in person or by their attorneys appointed in writing. Proof of (i) the execution of any such instrument, or of an instrument appointing any such attorney, or (ii) the holding by any person of the Bonds shall be sufficient for any purpose of this Resolution (except as otherwise herein expressly provided) if made in the following manner, but the Trustee may nevertheless in its discretion require further or other proof in cases where it deems the same desirable: (1) The fact and date of the execution by any Bondholder or his attorney of such instrument may be proved by the certificate, which need not be acknowledged or verified, of an officer of a bank or trust company satisfactory to the Trustee or of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which she purports to act, that the person signing such request or other instrument acknowIedged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. The authority of the person or persons executing any such instrument on behalf of a corporate Bondholder may be established without further proof if such instrument is signed by a person purporting to be the president or a vice president of such corporation with a corporate seal affixed and attested by a person purporting to be its secretary or an assistant secretary; (2) The amount of Bonds transferable by delivery held by any person executing such request or other instrument as a Bondholder, and the numbers and other identification thereof, and the date of his holding such Bonds, may be proved by a certificate, which need not be acknowledged or verified, satisfactory to the Trustee, executed by an officer of a trust company, bank, financial institution or other depository or member of the National Association of Securities Dealers, Inc. wherever situated, showing that at the date therein mentioned such person exhibited to such officer or had on deposit with such depository the Bonds described in such certificate. Continued ownership after the date stated in such certificate may be proved by the ALAKSA MUNICPAL BOND BANK ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) General Obligation Bond Resolution {Amended) Page 39 Page 40 presentation of such certificate if the certificate contains a statement by such officer that the depository held that Bonds therein referred to on the date of the certificate and that they will not be surrendered without the surrender of the certificate to the depository, except with the consent of the Trustee, and a certificate of the Trustee, which need not be acknowledged or verified, that such consent has not been given. (B) Except in the case of Bonds transferable by delivery only, the ownership of Bonds and the amounL numbers and other identification, and date of holding the same shall be proved by the registry books, Any request, consent or vote of the owner of any Bond shall bind all future owners of such Bond in respect of anything done or suffered to be done by lhe Bank or any Fiduciary in accordance therewith. ARTICLE IX COVENANTS OF THE BANK The Bank covenants and agrees with the Holders of the Bonds as follows: Section 901 - Paymen~ of Bonds. The Bank shall duly and punctually pay or cause to be paid the prmcipat or Redemption Price, if any, of every Bond and the interest thereon, at the dates and places and m the manner stated in the Bonds according to the true intent and meaning thereof, and shall duly and puncluatty pay, or cause to be paid, al! Sinking Fund Installments, if any, becoming payable with respect to any Series of Bonds. Section 902 - Extension of Payment of Bonds The Bank shalI not directly or indirectly extend or assent to the extension of the maturity of any of lhe Bonds or the time of payment of any claims for interest by the purchase or funding of such Bonds or claims for interest or by any other arrangement and in case the maturity of any of the Bonds or the time for payment of any claims for interest shall be extended, such Bonds or claims for interest shall not be entitled in case of any default under this Resolution to the benefit of this Resolution or to any payment out of any assets of the Bank or the funds (except funds held in trust for the payment of particular Bonds or claims for interest pursuant to this Resolulion) prior to benefits accorded to or the payment of the principal of all Bonds issued and Oulstanding the maturity of which has not been extended and of such portion of the accrued interest on the Bonds as shall not be represented by such extended claims for interest, Nothing herein shall be deemed to limit the right of the Bank to issue Refunding Bonds as provided in Section 203 and such issuance shall not be deemed to constitute an extension of maturity of Bonds. Section 903- Offices for Servicinq Bonds. The Bank shall at all times maintain an office or agency where Bonds may be presented for transfer or exchange, and where notices, presentalions and demands upon the Bank in respect of the Bonds or of this Resolution may be served, The Bank hereby appoints the Trustee as its agent to maintain such office or agency for the transfer or exchange of Bonds ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) and for the service of such notices, presentations and demands upon the Bank and may appoint one or more co-registrars for such purposes, The Bank hereby appoints the Trustee as Paying Agent and hereby appoints the Paying Agent as its agent to maintain such offices or agencies for the payment of Bonds. Section 904- Further Assurances. At any and all times the Bank shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary for the better assuring, conveying, granting, assigning, confirming all and singular the rights, Municipal Bonds Payments, the Municipal Bonds and other monies, securities, funds and property hereby pledged or assigned, or intended so to be, or which the Bank may hereafter become bound to pledge or assign. Section 905 - Power to Issue Bonds and Make Pledqes, The Bank is duly authorized pursuant to law to authorize and issue the Bonds for the purposes herein authorized and to adopt this Resolution and to pledge the Municipal Bonds Payments, the Municipal Bonds and other monies, securities, funds and property purported to be pledged by this Resolution in the manner and to the extent provided in this Resolution. The Municipal Bonds Payments, the Municipal Bonds, and other monies, securities, funds and property so pledged are and will be free and clear of any pledge, lien, charge or encumbrance thereon or with respect thereto prior to, or of equal rank with, the pledge created by this Resolution, except for the liens in favor of the Trustee and Paying Agents provided in Section 805 hereof, and all corporate or other action on the part of the Bank to that end has been duly and will be duly and validly taken. The Bonds and the provisions of this Resolution are and will be the valid and legally enforceable obligations of the Bank in accordance with their terms. The Bank shall at all times, to the extent permitted by law, defend, preserve and protect the pledge of the Municipal Bonds Payments, the Municipal Bonds and other monies, securities, funds and property pledged under this Resolution and all the rights of the Bondholders under this Resolution against all claims and demands of all persons whomsoever. Section 906 - General Covenants of the Bank. (A) The Bank shall do and perform or cause to be done and performed all acts and things required to be done or performed by or on behalf of the Bank under law and this Resolution in accordance with the terms hereof. (B) Upon the date of issuance of any of the Bonds, all conditions, acts and things required by law and this Resolution to exist, to have happened and to have been performed precedent to and in the issuance of such Bonds shall exist, have happened and have been performed and the issue of such Bonds, together with all other indebtedness of the Bank, shall be within every debt and other limit prescribed by the laws of the State. (C) The Bank does hereby pledge to and agree with the Holders of the Bonds that it will not cause the State to limit or alter the rights vested by the Act in the Bank to fulfill the terms of any ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolutiotl (Amended) Page 41 Page 42 agreements made with Bondholders, or in any way impair the rights and remedies of such Holders until the Bonds, together with the interest tllereon, with interest on any unpaid installments of interest, and all costs and expenses ~n connection with any action or proceeding by or on behalf of such Holders, are fully met and discharged. (D) Upon failure of a Governmental Unit to make any principal or interest payment on the date specified in, and as required by, the applicable Loan Agreement securing payment of the Municipal Bonds, the Trustee shall immediately notify the Executive Director of the Bank who shall then take the following actions: (i) the Executive Director shall within two days of the Governmental Unit’s failure to make the Municipal Bonds Payment pursuant to the terms of the applicable Loan Agreement, contact such Governmental Unit and request payment: (it) in the event payment is not made by the Governmental Unit pursuant to (i) above, the Trustee shall make up such deficiencies from the Reserve Fund as provided for in Section 603(E) of this Resolution: (iii) in the event payment is not made by the Governmental Unit pursuant to (i) above, and the Reserve Fund is drawn upon to make up such deficiency pursuant to (ii) above, the Executive Director shall initiate intercept proceedings with the applicable State agencies pursuant to Section 917 of this Resolution; (iv) in the event amounts collected pursuant to (iii) above are insufficient to replenish amounts held in the Reserve Fund to lhe Reserve Fund Requirement, the Executive Director shall contact the Governor of the State and the State legislature as set forth in Section 9! I(B) of this Resolution; and (v) if there remains a deficiency in the Reserve Fund after the Executive Director has exhausted the requirements found in (i) through (iv) above, the Executive Director shall request a loan from the Department of Revenue pursuant to AS 44.85.270(i) and provide for such loan to be used to cause the amount in the Reserve Fund to satisfy the Reserve Fund Requirement. Section 907 - Accounts and Reports. (A) The Bank shall keep, or cause to be kept, proper books of record and account in which complete and correct entries shall be made of its transactions relating to all Municipal Bonds Payments, Municipal Bonds, the Fees and Charges and all funds and accounts established by this Resolution, which shall at all reasonable times be subject to the inspection of the Trustee or the Holders of an aggregate of not less than twenty-five per centum (25%) in principal amount of Bonds then Outstanding or their representatives duly authorized in writing. ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 43 (B) The Bank shall annually, on or before the last day of January in each year. file with the Trustee a copy of an audit for the preceding Fiscal Year, accompanied by an Accountant’s Certificate, and an annual report setting forth in complete and reasonable detail: (a) its operations and accomplishments; (b) its receipts and expenditures during such Fiscal Year in accordance with the categories or classifications established by the Bank for its operating and capital outlay purposes: (c) its assets and liabilities at the end of such Fiscal Year, including a schedule of its Municipal Bonds Payments, Municipal Bonds, Fees and Charges and the status of reserve, funds and the funds and accounts established by this Resolution; and (d) a schedule of its Bonds Outstanding and other obligations outstanding at the end of such Fiscal Year, together with a statement of the amounts paid, redeemed and issued during such Fiscal Year. A copy of each such annual report and Accountant’s Certificate shall be mailed promptly thereafter by the Trustee to each Bondholder who shall have filed his name and address with the Bank for such purpose. Section 908- Personnel and Servicinq of Proqrams. (A) The Bank shall at all times appoint, retain and employ competent personnel for the purpose of carrying out its respective programs and shall establish and enforce reasonable rules, regulations, tests and standards governing the employment of such personnel at reasonable compensation, salaries, fees and charges and all persons employed by the Bank shall be qualified for their respective positions. (B) The Bank may pay to the respective State agency, governmental unit or political subdivision of the State from the Operating Fund such amounts as are necessary to reimburse the respective State agency, governmental unit or political subdivision of the state for the reasonable costs of any services performed for the Bank. Section 909 - Waiver of Laws. The Bank shall not at any time insist upon or plead in any manner whatsoever, Or claim or take the benefit or advantage of any stay or extension law now or at any time hereafter in force which may affect the covenants and agreements contained in this Resolution or in any Series Resolution or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the Bank. Section 910- Fees and Charqes. The Bank shall establish, make, maintain and charge such Fees and Charges to each Governmental Unit to which a Loan is made, and shall from time to time revise such Fees and Charges whenever necessary, so that such Fees and Charges actually collected from each such Governmental Unit will at all times produce monies which, together with such Governmental Unit’s Allocable Proportion of other monies available under the provisions of this Resolution, and other monies available therefor, including any grants made by the United States of America or any agency or instrumentality thereof or by the State or any agency or instrumentality thereof and amounts applied therefor from amounts transferred to the Operating Fund pursuant to paragraph (3) of Section 603, will be at least sufficient: ALAKSA MUNICPAL BOND BANK General Obligation Bo~ld Resolution (Amended) Page 44 (a) To pay, as the same become due, the Governmental Unit’s Allocable Proportion of the Administrative Expenses of the Bank: and (b) To pay, as the same become due, the Governmental Unit’s Allocable Proportion of the fees and expenses of the Trustee and Paying Agents. The Bank shall provide the Truslee with a schedule of the Fees and Charges to be paid by each Governmental Unit, and of each revision thereof, and shall require each Governmental Unit to make payment of the Fees and Charges required to be paid by it directly to the Trustee. The Trustee shall promptly advise the Bank of each and every failure of a Governmental Unil to make payment of Fees and Charges when due in accordance wilh the applicable schedule. Section 911 - Administration of Reserve Fund. (A) The Bank shall establish and maintain the Reserve Fund in accordance with the provisions of this Resolution. All monies and securities held in the Reserve Fund shall be used. disbursed and applied only in accordance with the provisions of this Resolution and for no other purpose. Monies and securities held in the Reserve Fund shall not be withdrawn therefrom at any ~ime in such amount as would reduce the amount in such Fund to an amount less than the Required Debt Service Reserve except as otherwise provided in this Resolution, (B) The Bank shall cause the Chairman of the Board of Directors of the Bank annually, before each January 30, to make and deliver to the Governor of the State and to the legislature his certificate stating the amount, if any, required to restore the Alaska Municipal Bond Bank Reserve Fund to the amounl of the Required Debl Service Reserve and a copy of such certificate shall be promptly delivered by the Bank to the Trustee. Monies received by the Bank from the State pursuant to such a certification, ~n accordance with the provisions of Section 44.85.270(g) of the Act shall, to the extent such certification was occasioned by ~he fact thai the amount in the Reserve Fund was less than the Required Debt Service Reserve, be deposited in the Reserve Fund, as required by paragraph (D) of Section 603. (C) The Bank sha!l annua!ty submit to the State a budget request for an appropriation to cause, if necessary, amounts held in the Reserve Fund to equal the Reserve Fund Requirement. (Amendment: Effective August 19, 2009) Section912- Issuance of Additional Obliqations. (A) The Bank shall not subsequent to the issuance of the initial Series of Bonds under Ihis Resolution create or permit the creation of or issue any obligations or create any additional indebtedness which will be secured by a charge and lien on the Municipal Bonds and the Municipal Bonds Payments or which will be payable from the Debt Service Fund or the Reserve Fund, except that additional Series of Bonds may be issued from time to time pursuant to a Series Resolution subsequent to the issuance of the initial Series of Bonds under this Resolution on a parity with the Bonds of such initial Series of Bonds and secured by an equal charge and lien on the ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Municipal Bonds and the Municipal Bonds Payments and payable equally and ratably from the Debt Service Fund and Reserve Fund for the purposes of (i) making Loans to Governmental Units, (ii) making payments into the Interest Account, (iii) making payments into the Reserve Fund, (iv) funding of Notes theretofore issued by the Bank for any purposes for which Bonds may have been issued, and (v) subject to the provisions and limitations of Section 203, the refunding of any Bonds then Outstanding, under the conditions and subject to the limitations in this Section 9!2 provided. (B) No additional Series of Bonds shall be issued subsequent to the issuance of the initial Series of Bonds under this Resolution unless: (1) the aggregate principal amount of Bonds and Notes of the Bank outstanding at the time of issuance and delivery of such additional Bonds including the principal amount of such additional Bonds will not exceed any limit thereon imposed by !aw; (2) there is at the time of the issuance of such additional Bonds no deficiency in the amounts required by this Resolution or any Series Resolution to be paid into the Debt Service Fund and into the Reserve Fund; (3) the amount of the Reserve Fund, upon the issuance and delivery of such additional Bonds and the deposit in the Reserve Fund of any amount provided therefor in the Series Resolution authorizing the issuance of such additional Bonds, shall not be less than the Required Debt Service Reserve: and (4) the maturities of, or Sinking Fund Installments for, the additional Bonds then being issued representing Loan Obligations, unless such additional Bonds are being issued to refund Outstanding Bonds in accordance with the provisions of Section 203, shall be equal to the scheduled Municipal Bonds Principal Payments to be made in respect of the Loans with respect to which such additional Bonds are to be issued. (C) The Bank expressly reserves the right to adopt one or more other general obligation bond resolutions and reserves the right to issue Notes and any other obligations so long as the same are not a charge or lien on the Municipal Bonds, the Municipal Bonds Payments and the Fees and Charges or payable from the Debt Service Fund or the Reserve Fund created pursuan~ to this Resolution. Section 913- Loan Aqreement Provisions. No Loan shall be made by the Bank from the proceeds of the sale of Bonds, and no Bonds shall be issued by the Bank for the purpose of providing funds with which to make a Loan, unless the Loan Agreement under which such Loan is to be made shall comply with, and no Bonds shall be issued by the Bank to fund Notes or to refund Bonds unless the Loan Agreement under which the Loan was made from the proceeds of such Notes or Bonds, shall also comply with, the following terms, conditions, provisions and limitations: ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 45 Page 46 (a) The Governmental Unit which is a party to such Loan agreement must be a Governmental Unit as defined by the Resolution and the Loan Agreement must he executed in accordance with existing taws: (b) The Governmental Unit, prior to or simultaneously with the issuance of Bonds of the Bank issued to make a Loan to the Governmental Unit, shall issue Municipal Bonds which are valid obligations of the Governmental Unit as required by the Act: (c) The Municipal Bonds Interest Paymeets to be made by the Governmental Unit under such Loan Agreement shall be not less than the interest payments the Bank is required to make on the Loan Obligation and shall be scheduled by the Bank in such manner and at such times (notwithstanding the dates of payment as stated in the Municipal Bonds) as to provide funds sufficient to pay interest on the Loan Obligation as the same becomes due; (d) The Municipal Bonds Principal Payments to be made by the Governmental Unit under such Loan Agreement shall be scheduled by the Bank in such manner and at such times (notwithstanding the dates of payment as stated in the Municipal Bonds) as to provide funds sufficient to pay the principal of the Loan Obligation as the same matures; (e) The Governmental Unit shall be obligated to pay Fees and Charges to the Bank at the times and in the amounts which will enable the Bank to comply with the provisions of Section 910; (f) The Governmental Unil shall agree that in the event the amounts referred to in paragraphs (c) and (d) are not paid by it to the Bank on or before the times specified in the Loan Agreement, any money payable to the Governmental Unit by any department or agency of the State shall be withheld from such Governmental Unit and paid over directly to the Trustee acting under the General Obligation Bond Resolution and that the said agreement shall be full warrant, authority and direction to make such payment to any official of the State responsible for such payment upon notice to such official by the Bank as provided in the Act: (g) The Bank shall not sell and the Governmental Unit shall not redeem prior to maturity any of the Municipal Bonds with respect to which the Loan is made in an amount greater than the Outstanding Bonds issued with respect to such Loan which are then redeemable, and in the event of any such sale or redemption of such Municipal Bonds, the same shall be in an amount not tess than the aggregate of (i) the principal amount of the Loan Obligation so to be redeemed, (ii) the interest to accrue on the Loan Obligation so to be redeemed to the next redemption date thereof not previously paid, (iii) the applicable premium, if any, payable on the Loan Obligation so to be redeemed, and (iv) the costs and expenses of the Bank in effecting the redemption of the Loan Obligation so to be redeemed; provided, however, that in the event the Loan Obligation has been refunded and the Refunding Bonds therefor were issued in a ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 47 principal amount in excess of or less than the Loan Obligation remaining unpaid at the date of issuance of such Refunding Bonds, the amount which the Governmental Unit shall be obligated to pay or the Bank shall receive under item (i) above shall be the principal amount of such Refunding Bonds Outstanding. In the event the Loan Obligation has been refunded and the interest the Bank is required to pay on the Refunding Bonds therefor is less than the interest that the Bank was required to pay on the Loan Obligation, the amount which the Governmental Unit sha!l be obligated to pay or the Bank shall receive under item (ii) above shall be the amount of interest to accrue on such Refunding Bonds Outstanding. (h) The Governmental Unit shall give the Bank at least fifty (50) days’ notice of intention Io redeem its Municipal Bonds. Section 914- Modification of Loan Aqreement Terms. The Bank shall not consent to the modification of, or modify, the rate or rates of interest of, or the amount or time of payment of any installment of principal of or interest on any Municipal Bonds evidencing a Loan, or the amount or time of payment of any Fees and Charges payable with respect to such Loan, or the security for or any terms or provisions of such Loan or the Municipal Bonds evidencing the same, in a manner which adversely affects or diminishes the rights of the Bondholders; provided, however, that, in the event the Loan Obligation is being or has been refunded and the Refunding Bonds therefor are in a principal amount in excess of or less than the principal amount of the Bonds refunded, the Bank may consent to the modification of and modify the Loan agreement relating to such Loan and the Municipal Bonds evidencing the same, and the Municipal Bonds Payments to be made thereunder so long as such Municipal Bonds Payments are sufficient in amount and payable at the times required for the payment of the principal of and interest on such Refunding Bonds, and further provided, however, that, in the event the Loan Obligation has been refunded and the interest the Bank is required to pay on tbe Refunding Bonds issued for the purpose of refunding such original Bonds is less than the interest the Bank was required to pay on such original Bonds refunded by the Bank, the Municipal Bonds Interest Payments to be made by the Governmental Unit in respect of such Loan may be reduced so that the amounts required to be paid shall be sufficient to pay interest on such Refunding Bonds Outstanding. Section 915 - Sale of Municipal Bonds by Bank. The Bank shall not sell any Municipal Bonds except as provided in subsection (g) of Section 913. Section 916- Disposition of the Proceeds of Sale or Redemption of Municipal Bonds. In the event Municipal Bonds or other obligations securing a Loan shall be sold by the Bank or redeemed by the Governmental Unit in accordance with terms of the applicable Loan Agreement, the Bank shall, upon such sale by the Bank or redemption by the Governmental Unit, deposit the proceeds of such sale or redemption, except an amount thereof equal to the costs and expenses of the Bank in effecting the redemption of the Bonds to be redeemed, into the applicable sub-account or sub-accounts in the Redemption Account and shall apply the same to the purchase, retirement or redemption of the ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 48 appropriate Bonds in accordance with the provisions of this Resolution. The balance in such applicable sub-account or sub-accounts of such proceeds of sale or redemption of Municipal Bonds after the redemption of the Bonds to be redeemed shall be deposited in the Operating Fund. Section 917- Enforcement of Municipal Bonds The Bank shall diligenlly enforce, and take all reasonable steps, actions and proceedings necessary for lhe enforcement of, all lerms, covenants and conditions of al! Loan Agreements and ~he Municipal Bonds evidencing Loans made by the Bank, including the prompt collection, and ~he giving of notice Io ~he Commissioner of Revenue, Commissioner of Commerce, Community and Economic Development and the Commissioner of Administration and any other department or agency of the State which is custodian of any money payable to the Governmental Unit of any failure or default of the Governmental Unil in the payment of its Municipal Bonds Payment and shall promptly transfer any such monies, upon receipt thereof, to the Trustee and, in such event, or if such monies are paid directly ~o ~he Truslee, the Trustee shall deposit any such monies in the Principal Account and Inleres~ Account in place of said unpaid Municipal Bonds Payment or in the event deficiencies in said Accounts created by such delaull shall have been made up by the Reserve Fund pursuant ~o paragraph (5) of Section 603, ie the Reserve Fund to the extent of such deficiencies. Section 918 - Continuinq Disclosure: Bankruptcy. (A) The Bank hereby covenants and agrees that it will comply with and carry out all the provisions of each Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the Bank to comply with any Continuing Disclosure Certificate shall not be considered an Event of Default, and any Bondholder may take such actions only as may be provided in such Continuing Disclosure Certificate. (B) The Bank hereby covenants and agrees that it will notify the Rating Agencies then rating the Bonds of any change in the Act which would permit it or require it to declare bankruptcy under the Bankruptcy Code. Section 919 - Tax Covenants. The Bank shall not knowingly take or cause any action to be taken which would cause interest on any Bonds to become taxable for federal income tax purposes. The Bank shall at all times do and perform all acts and things necessary or desirable, including, but not limited to, complying with the rebate provisions of Section 148 of the Code, as applicable, and complying with the provisions of any letter of instructions from bond counsel, in order to assure that interest paid on Bonds shall, for purposes of federal income taxation, be excludable from the gross income of the recipients thereof and exempt from taxation. The Bank shall not permit at any time or times any proceeds of any Bonds or any amounts held hereunder to be used, directly or indirectly, in a manner which would result in the exclusion of any Bond from the treatmenl afforded by subsection (a) of Section 103 of the Code. ARTICLE X SERIES RESOLUTION AND SUPPLEMENTAL RESOLUTIONS ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 49 Section 1001- Modification and Amendment without Consent. Notwithstanding any other provisions of this Article X, or Article Xl, the Bank may adopt at any time or from time to time Series Resolutions or Supplemental Resolutions for any one or more of the following purposes, and any such Series Resolution or Supplemental Resolution shall become effective in accordance with its terms upon the filing with the Trustee of a copy thereof certified by an Authorized Officer: (A) To provide for the issuance of a Series of Bonds pursuant to the provisions of this Resolution and to specify and determine such matters and things referred to in Article II of this Resolution and to prescribe the terms and conditions pursuant to which such Bonds may be issued, paid or redeemed: (B) To add to the covenants and agreements of the Bank for the purpose of further securing the payment of the Bonds, provided such additional covenants and agreements are not contrary to or inconsistent with the covenants and agreements of the Bank contained in this Resolution; (C) To prescribe further limitations and restrictions upon the issuance of Bonds and the incurring of indebtedness by the Bank which are not contrary to or inconsistent with the limitations and restrictions thereon theretofore in effect; (D) To surrender any right, power or privilege reserved to or conferred upon the Bank by the terms of this Resolution, provided that the surrender of such right, power or privilege is not contrary to or inconsistent with the covenants and agreements of the Bank contained in this Resolution; rE) To confirm as further assurance any pledge under and the subjection to any lien, claim or pledge created or to be created by the provisions of this Resolution of the Municipal Bonds and Municipal Bonds Payments or of any other monies, securities or funds; (F) To modify any of the provisions of this Resolution or any previously adopted Series Resolution in any other respect; provided that such modifications shall not be effective until after all Bonds of any Series of Bonds Outstanding as of the date of adoption of such Series Resolution or Supplemental Resolution shall cease to be Outstanding, and all Bonds issued under such modified resolutions shall contain a specific reference to the modifications; (G) To cure any ambiguity or defect or inconsistent provision in this Resolution or to insert such provisions clarifying matters or questions arising under this Resolution as are necessary or desirable in the event any such modifications are not contrary to or inconsistent with this Resolution as theretofore in effect. Section 1002 - Supplemental Resolutions Effective with Consent of Bondholders. The provisions of this Resolution may also be modified or amended at any time or from time to time by a Supplemental Resolution, with the consent of Bondholders in accordance with and subject to the provis~ons of Article XI ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 50 which Supplemental Resolution, upon the filing with the Trustee of a copy thereof, certified by an Authorized Officer and upon compliance with the Articte XI, shall become fully effective in accordance with its terms as provided in said Article. Section 1003- General Provisions Retatinq to Series Resolutions and Supplemental Resolutions. This Resolution shall not be modified or amended in any respect except as provided in and in accordance with and subject to the provisions of this Article X and Article XI. Nothing contained in this Article X or Article XI shall affect or limit the rights or obligations of the Bank to adopt, make, do, execute or deliver any resolution, act or other instrument pursuant to the provisions of Section 904 or the right or obligation of the Bank to execute and deliver to the Trustee or any Paying Agent any instrument which elsewhere in this Resolution it is provided or permitted to be delivered to the Trustee or any Paying Agent. A copy of every Series Resolution and Supplemental Resolution adopted by the Bank when filed with the Trustee shall be accompanied by a Counsel’s Opinion stating that such Series Resolution or Supplemental Resolution has been duly and lawfully adopted in accordance with the provisions of this Resolution, is authorized or permitted by this Resolution and is valid and binding upon the Bank and enforceable in accordance with its terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, or other laws affecting creditor’s rights generally from time to time in effect). The Trustee is hereby authorized to accept delivery of a certified copy of any Series Resolution or Supplemental Resolution permitted or authorized pursuant to the provisions of this Resolution and to make all further agreements and stipulations which may be contained therein, and, in taking such action, the Trustee shall be fully protected in relying on Counsel’s Opinion that such Series Resolution or Supplemental Resolution is authorized or permitted by the provisions of this Resolution. No Series Resolution or Supplemental Resolution changing, amending or modifying any of the righls or obligations of the Trustee or of any Paying Agent may be adopted by the Bank without the written consent of the Trustee or Paying Agent affected thereby. ARTICLE XI AMENDMENTS Section 1101 - Powers of Amendment. Any modification or amendment of this Resolution and of the rights and obligations of the Bank and of the Hotders of the Bonds, in any particular, may be made by a Supplemental Resolution, with the written consent given as hereinafter provided in Section 1102, (a) of the Holders of at least two-thirds in principal amount of the Bonds Outstanding at the time such consent is given, or (b) in case less than all of the several Series of Bonds then Outstanding are affected by the modification or amendment, of the Holders of at least two-thirds in principal amount of the Bonds of each Series so affected and Outstanding at the time such consent is given: provided, however, that such modification or amendment shall not (i) permit a change in the terms of redemption or maturity of the principal of any Outstanding Bond or of any installment of interest thereon or Sinking Fund Installment therefor, (ii) or a reduction in the principal amount or the Redemption Price thereof or in the rate of interest thereon, or (iii) a reduction of the percentage of the Holders of which is required to effect any such modification or amendment, or (iv) permit the creation of any lien prior to or on a parity with the lien created by this Resolution (except in the manner provided by this Resolution) or deprive the Holders of the Bonds of the lien created by this Resolution, without the consent of the Holders of all the Bonds Outstanding or of the Series of Bonds affected by such modification or amendment. For the purposes of this Section, a Series shall be deemed to be affected by a modification or amendment of this Resolution if the same adversely affects or diminishes the rights of the Holders of Bonds of such Series. Section 1102 - Consent of Bondholders. (A) The Bank may at any time adopt a Supplemental Resolution making a modification or amendment permitted by the provisions of Section 1101, to take effect when and as provided in this Section. A copy of such Supplemental Resolution (or brief summary thereof or reference thereto), together with a request to Bondholders for their consent thereto, shall be to by, or on behalf of, the Bank’s to Bondholders . Such Supplemental Resolution shall not be effective unless and until there shall have been filed with the Trustee (a) the written consents of Holders of the percentages of Outstanding Bonds specified in Section 1101 and (b) a Counsel’s Opinion stating that such Supplemental Resolution has been duly and lawfully adopted and filed by the Bank in accordance with the provisions of this Resolution, is authorized or permitted hereby and is valid and binding upon the Bank and enforceable in accordance with its terms, and (ii) a notice shall have been mailed as hereinafter provided in this Section. (B) The consent of a Bondholder to any modification or amendment shall be effective only if accompanied by proof of the holding, at the date of such consent, of the Bonds with respect ~o which such consent is given, which proof shall be such as is permitted by Section 813. A certificate or certificates by the Trustee filed with the Trustee that it has examined such proof and that such proof is sufficient in accordance with Section 813 shall be conclusive that the consents have been given by the Holders of the Bonds described in such certificate or certificates of the Trustee. Any such consent shall be binding upon the Holder of the Bonds giving such consent and upon any subsequent Holder of such Bonds and of any Bonds issued in exchange therefor (regardless of whether such subsequent Holder thereof has notice thereof) unless such consent is revoked in writing by the holder of such Bonds giving such consent or a subsequent holder thereof by filing with the Trustee, prior to the time when the written statement of the Trustee hereinafter provided for in this Section is filed, such revocation and, if such Bonds are transferable by delivery, proof that such Bonds are held by the signer of such revocation in the manner permitted by Section 813. The fact that a consent has not been revoked may likewise be proved ALAKSA MUNICPAL BOND BANK ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) General Obligation Bored Resolution (Amended) Page 51 Page 52 by a certificate of the Truslee filed with the Trustee to the effect that no revocation thereof is on file with the Trustee, (C) AI any time after the Holders of the required percentages of Bonds shall have filed their consents to the Supplemental Resolution, the Trustee shall make and file with the Bank and the Trustee a written stalemenl that the Holders of such required percenlages of Bonds have filed such consents. Such wn/len slatemenl shall be conclusive that such coosents have been so filed. At any time thereafter notice, stating in substance thai the Supplemental Resolution adopted by the Bank on a stated date, a copy of which is on fife with the Trustee, has been consented to by the Holders of the required percentages of Bonds and will be effective as provided in this Section, may be given to Bondholders by the Bank by mailing such notice to Bondholders at least once not more than ninety days (90) after the Holders of the required percenlages of Bonds shall have filed their consents to the Supplemental Resolution and the written statement of the Trustee hereinabove provided for is filed. The Bank shall file with the Trustee proof of the publication of such notice and, if the same shall have been mailed to Bondholders, of the mailing thereof. A record, consisting of the papers required or permitted by this Section to be filed with the Trustee, shall be proof of the matters therein stated. Such Supplemental Resolution making such amendment or modification shall be deemed conclusively binding upon the Bank, lhe Fiduciaries and the Holders of all Bonds at the expiration of forty (40) days after the filing wilh lhe Trustee of the proof of the first publicalion of such last mentioned notice, except in the event of a final decree of a court of competent jurisdiction setting aside such Supplemental Resolution in a legal action or equitable proceeding for purpose commenced within such fody day period; except that any Fiduciary and the Bank during such forty day period and any such fudher period during which any such action or proceeding may be pending shall be entitled in their absolute discretion to take such action, or to refrain from taking such action, with respect to such Supplemental Resolution as they may deem expedient. Section 1103 - Modifications by Unanimous Consent. The terms and provisions of this Resolution and the rights and obligations of the Bank and of the Holders of the Bonds may be modified or amended in any respect upon the adoption and filing with the Trustee by the Bank of a copy of a Supplemental Resolution certified by an Authorized Officer and the consent of the Holders of all of the Bonds then Outstanding, such consent to be g~ven as provided in Section 1102, except that no notice to Bondholders either by mailing or publication shall be required provided, however, that no such modification or amendment shall change or modify any of the rights or obligations of the Trustee or Paying Agents without the filing with the Trustee of its written asseat thereto in addition to the consent of Bondholders. Section 1104 - Mailinq and Publication. Any provision in this Article for the mailing of a notice or other document to Bondholders shall be fully complied with if it is mailed postage prepaid only (i) to each registered owner of Bonds then Outstanding at his address, if any, appearing upon the registry books of ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) the Bank, (it) to each Holder of any Bond payable to bearer who shall have filed with the Trustee an address for notices, and (iii) to the Trustee. Section 1105 - Exclusion of Bonds, Bonds owned or held by or for the account of the Bank shall not be deemed Outstanding for the purpose of consent or other action or any calculation of Outstanding Bonds provided for in this Resolution, and the Bank shall not be entitled with respect to such Bonds to give any consent or take any other action provided for in this Resolution. At the time of any consent or other action taken under this Resolution, the Bank shall furnish the Trustee a certificate of an authorized Officer, upon which the Trustee may rely, describing all Bonds so to be excluded. Section 1106 - Notation on Bonds, Bonds delivered affer the effective date of any action taken as in Article X or Xl provided may, and if the Trustee so determines, shall, bear notation by endorsement or otherwise in form approved by the Bank and the Trustee as to such action, and in that case upon demand of the Holder of any Bond Outstanding at such effective date and upon presentation of his Bond for such purpose at the corporate trust office of the Trustee suitable notation shall be made on such Bond by the Trustee as to any such action. If the Bank or the Trustee shall so determine, new Bonds so modified as in the opinion of the Trustee and the Bank to conform to such action shall be prepared and delivered, and upon demand of the Holder of any Bond then Outstanding shall be exchanged, without cost to such Bondholder, for Bonds of the same Series and maturity then Outstanding, upon surrender of such Bonds. ARTICLE Xll DEFAULTS AND REMEDIES Section 1201 - Trustee to Exercise Powers of Statutory Trustee The Trustee shall be and hereby is vested with all of the rights, powers and duties of a trustee appointed by Bondholders pursuant to Section 44,85,310 and 320 of the Act and the right of Bondholders to appoint a trustee pursuant to Section 44.85.310 and 320 of the Act is hereby abrogated pursuant to Section 44.85.220(18) of the Act. Section 1202 - Events of Default. Each of the following events is hereby declared an "Event of Default," that is to say; if (a) the Bank shall default in the payment of the principal or Redemption Price of, Sinking Fund Installment for, or interest on, any Bond when and as the same shall become due whether at maturity or upon call for redemption, or otherwise; or (b) the Bank shall fail or refuse to comply with the provisions of Section 44.85.270(g) of the Act, or such amounts as shall be certified by the Chair of the Bank to the Governor and to the Legislature pursuant to such provisions of the Act shall not be appropriated and paid to the Bank prior to the termination of the then current State fiscal year; or ALAKSA MUN!CPAL BOND BANK General Obligation Bond Resolution (Amended) Page 53 Page 54 (c) the Bank shall fail or refuse to comply with the provisions of the Act, other than as provided in (b) above, or shall default in the performance or observance of any other of the covenants, agreements or conditions on its part in this Resolution, any Series Resolution, any Supplemental Resolution, or in the Bonds contained, and such failure, refusal or default shall continue for a period of forty-five (45) days after written notice thereof by the Trustee or the Holders of not less than twenty-five per centum (25%) in principal amount of the Outstanding Bonds. Provided. however, that an Event of Default shall not be deemed to exist under the provisions of this paragraph (c) upon the failure of the Bank to make and collect Fees and Charges required to be made and collected by the provisions of this Resolution or upon the failure of the Bank to enforce any obligation undertaken by a Governmental Unit pursuant to a Loan Agreement including the making of the stipulated Municipal Bonds Payment so long as the Bank may otherwise be directed by law and so long as the Bank shall be provided with monies from the State or otherwise, other than withdrawals from or reimbursements of the Reserve Fund, sufficient in amount to pay the principal of and interest on all Bonds as the same shall become due during the period for which the Bank shall be directed by law to abstain from making and collecting such Fees and Charges and from enforcing the obligations of a Governmental Unit under the applicable Loan Agreement. Section 1203- Remedies. (A) Upon the happening and continuance of any Event of Default specified in paragraph (a) of Section 1202, the Trustee shall proceed, or upon the happening and continuance of any Event of Default specified in paragraphs (b) and (c) of Section 1202, the Trustee may proceed, and upon the written request of the Holders of not less than twenty-five per centum (25%) in priocipal amount of the Outstanding Bonds shall proceed, in its own name, to protect and enforce its nghts and the rights of the Bondholders by such of the following remedies, as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce such rights: (1) by mandamus or other suit, action or proceeding at law or in equity, enforce all rights of the Bondholders, including the right to require the Bank to make and collect Fees and Charges and Municipal Bonds Payments adequate to carry out the covenants and agreements as to, and pledge of, such Fees and Charges and Municipal Bonds Payments, and other properties and to require the Bank to carry out any other covenant or agreement with Bondholders and to perform its duties under the Act; (2) by bringing suit upon the Bonds; (3) by action or suit in equity, require the Bank to account as if it were the trustee of an express trust for the Holders of the Bonds; (4) by action or suit in equity, enjoin any acts or things which may be unlawful or in violation of the rights of the Holders of the Bonds; (B) Upon the occurrence of an Event of Default under Section 1202(a), unless the principal of all the Bonds shall have already become due and payable, the Trustee, by notice in writing to the Bank, may, and upon the written request of the Holders of not tess than a majority in aggregate principal amount of the Bonds at the time outstanding, shall, in accordance with the provisions of the Act, declare the principal of all the Bonds then outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Resolution or in the Bonds contained to the contrary notwithstanding. This provision, however, is subject to the condition that if, at any time after the principal of the Bonds shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered, the Bank shall deposit with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest on such overdue installments of principal at the rate borne by the respective Bonds, and the reasonable expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Holders of at least a majority in aggregate principal amount of the Bonds then outstanding, by written notice to the Bank and to the Trustee, may, on behalf of the Holders of all of the bonds, rescind and annul such declaration and its consequences and waive such default; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon. (C) In the enforcement of any remedy under this Resolution, the Trustee shall be entitled to sue for, enforce payment on and receive any and all amounts then or during any default becoming, and at any time remaining, due from the Bank for principal, Redemption Price, interest or otherwise, under any provision of this Resolution or a Series Resolution or of the Bonds, and unpaid, with interest on overdue payments at the rate or rates of interest specified in such Bonds. together with any and all costs and expenses of collection and of all proceedings hereunder and under such Bonds, without prejudice ~o any other right or remedy of the Trustee or of the Bondholders, and to recover and enforce a judgment or decree against the Bank for any portion of such amounts remaining unpaid, with interest, costs and expenses, and to collect from any monies available for such purpose, in any manner provided by law, the monies adjudged or decreed to be payable. Section 1204 - Pdority of Payments After Default. During the continuance of an Event of Default, in the event that the funds held by the Trustee and Paying Agents shall be insufficient for the payment of interest and principal or Redemption Price then due on the Bonds, such funds (other than funds held for the payment or redemption of particular Bonds which have theretofore become due at maturity or by call ALAKSA MUNICPAL BOND DANK ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) General Obligation Bond Resolution (Amended) Page 55 Page 56 for redemption) and any other monies received or collected by the Trustee acting pursuant to the Act and this Adicle Xll. after making provision for the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Holders of the Bonds, and for the payment of the charges and expenses and liabilities incurred and advances made by the Trustee or any Paying Agents in the performance of their respective duties under this Resolution, shall be applied as follows: (a) Unless the principal of all of the Bonds shall have become or have been declared due and payable. FIRST: To the payment to the persons entitled thereto of all installments of interest then due in the order of the maturity of such installments, together with interest on overdue installments of interest and, if the amount available shall not be sufficient to pay in full any installment, then to the payment thereof ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference; and SECOND: To the payment to the persons entitled thereto of the unpaid principal or Redemption Price of any Bonds which shall have become due, whether at maturity or by call for redemption, in the order of their due dates and, if the amounts available shall not be sufficient to pay in full all the Bonds due on any date, then to the payment thereof ratably, according to the amounts of principal or Redemption Price due on such date, to the persons entitled thereto, without any discrimination or preference. (b) If the principal of all of the Bonds shall have become or have been declared due and payable, to the payment of the principal and interest then due and unpaid upon the Bonds together with interest on overdue installments of interest without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or preference except as to any difference in lhe respective rates of interest specified in the Bonds. Whenever monies are to be applied by the Trustee pursuant to the provisions of this Section 1204, such monies shall be applied by the Trustee at such times, and from time to time, as the Trustee in ~ts sole discretion shall determine, having due regard to the amount of such monies available for application and the likelihood of additional money becoming available for such application in the future; the deposit of such monies wilh the Paying Agents, or otherwise setting aside such monies in trust for the proper purpose, shall constitute proper application by the Trustee; and the Trustee shall incur no liability whatsoever to the Bank, to any Bondholder or to any other person for any delay in applying any such monies, so long as the Trustee acts with reasonable diligence, having due regard for the circumstances, and ultimately applies the same in accordance with such provisions of lhis Resolution as may be ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 57 applicable at the time of application by the Trustee. Whenever the Trustee shall exercise such discretion in applying such monies, it shall fix the date (which shall be an interest payment date unless the Trustee shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue. The Trustee shall give such notice as it may deem appropriate for the fixing of any such date. The Trustee shall not be required to make payment to the Holder of any unpaid Bond unless such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid. Interest on overdue installments of interest shall be equal to the rate on the Bond as to which the interest installment is overdue. The provisions of this Section 1204 are in all respects subject to the provisions of Section 902. Section 1205 - Termination of Proceedinqs. In case any proceeding taken by the Trustee on account of any Event of Default shall have been discontinued or abandoned for any reason, then in every such case the Bank, the Trustee and the Bondholders shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Trustee shall continue as though no such proceeding had been taken. Section 1206 - Bondholders’ Direction of Proceedinqs Anything in this Resolution to the contrary notwithstanding, the Holders of the majority in principal amount of the Bonds then Outstanding shall have the right by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the method of conducting all remedial proceedings to be taken by the Trustee hereunder, provided that such direction shall not be otherwise then in accordance with law or the provisions of this Resolution, and that the Trustee shall have the right to decline to following any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondholders not parties to such direction. Section 1207 - Limitation on Riqhts of Bondholders. No Holder of any Bond shall have any right to institute any suit, action, mandamus or other proceeding in equity or at law hereunder, or for the protection or enforcement of any right under this Resolution or any right under law unless such Holder shall have given to the Trustee written notice of the event of default or breach of duty on account of which such suit, action or proceeding is to be taken, and unless the Holders of not less than twenty-five per centum (25%) in principal amount of the Bonds then Outstanding shall have made written request of the Trustee after the right to exercise such powers or right of action, as the case may be, shall have occurred, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers herein granted or granted under the law or to institute such action, suit or proceeding in its name and unless, also, there shall have been offered to the Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby and the Trustee shall have refused or neglected to comply with such request within a reasonable time; and such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Trustee, to be conditions precedent to the execution of the powers under this Resolution or for any other remedy hereunder or ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 58 under law. It is understood and intended that no one or more Holders of the Bonds hereby secured shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Resolution, or to enforce any right hereunder or under law with respect to the Bonds or this Resolution, except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the benefit of all Holders of the Outstanding Bonds. Notwithstanding the foregoing provisions of this Section or any other provisions of this Article XlI, the obligation of the Bank shall be absolute and unconditional to pay the principal or Redemption Price of and interest on the Bonds to the respective Holders thereof at the respective due dates thereof, and nothing herein shall affect or impair the right of action, which is absolute and unconditional, of such Holders to enforce such payment. Section 1208 - Possession of Bonds by Trustee Not Required, All rights of action under this Resolution or under any of the Bonds, enforceable by the Trustee, may be enforced by it without the possession of any of the Bonds or the production thereof on the trial or other proceeding relative thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in its name for the benefit of all the Holders of such Bonds, subject to the provisions of this Resolution. Section 1209 - Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Holders of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity, or by statute. Section 1210 - No Waiver of Default. No delay or omission of the Trustee or of any Holder of the Bonds to exercise any nght or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by this Resolution to the Trustee and the Holders of the Bonds, respectively, may be exercised from time to time and as often as may be deemed expedient. Section 1211 - Notice of Event of Default. The Trustee shall give to the Bondholders notice of each Event of Default hereunder known to the Trustee within ninety (90) days after knowledge of the occurrence thereof, unless such Event of Default shall have been remedied or cured before the giving of such notice: provided that, except in the case of default in the payment of the principal or Redemption Price of or interest on any of the Bonds, or in the making of any payment required to be made into the Debt Service Fund or the Reserve Fund, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors or responsible officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Bondholders. Each such notice of Event of Default shall be given by the Trustee by mailing written notice thereof: (1) to all registered Holders of Bonds, as the names and addresses of such Holders appear upon the books for registration and transfer of Bonds as kept by the Trustee; (2) to such Bondholders as have ALAKSA MUNICPAL BOND BANK General Obligation1 Bond Resolution (Amended) Page 59 filed their names and addresses with the Trustee for that purpose; and (3) to such other persons as is required by law. ARTICLE Xlll DEFEASANCE Section 1301 - Defeasance. (A) If the Bank shall pay or cause to be paid to the Holders of the Bonds, the principal and interest and Redemption Price, if any, to become due thereon, at the times and in the manner stipulated therein and in this Resolution, and also shall pay or cause to be paid all other sums payable hereunder by the Bank, including any amounts payable to the United States, then the pledge of any revenues and assets hereby pledged and all other rights granted hereby shall, at the election of the Bank (evidenced by a certificate of an Authorized Officer filed with the Trustee, signifying the intention of the Bank to discharge all such indebtedness and this Resolution and any Supplemental Resolution), and notwithstanding that any Bonds shall not have been surrendered for payment, be discharged and satisfied. In such event, the Trustee shall, upon the written request of the Bank, execute and deliver to the Bank all such instruments as may be desirable to evidence such discharge and satisfaction and the Fiduciaries shall pay over or deliver to the Bank all moneys or securities held by them pursuant to this Resolution which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption. (B) If funds shall have been set aside and shall be held in trust by Fiduciaries for the payment of principal, interest and Redemption Price (through deposit by the Bank of funds for such paymenl or redemption or otherwise) at the maturity or upon the date upon which such Bonds have been duty called for redemption thereof, such Bonds shall be deemed to have been paid within the meaning and with the effect expressed in subsection (A) of this Section. All Outstanding Bonds shall, prior to the maturity or redemption date thereof, be deemed to have been paid within the meaning and with the effect expressed in subsection (A) of this Section if (i) in case any of said Bonds are to be redeemed on any date prior to their maturity, the Bank shall have given to the Trustee in form satisfactory to it irrevocable instructions to publish as provided in Article IV notice of redemption on said date of such Bonds, (ii) there shall have been deposited with the Trustee either funds in an amount which shall be sufficient, or Investment Securities which are not subject to redemption prior to the dates on which amounts will be needed to make payments on the Bonds defeased and the principal of and the interest on which when due wilt provide moneys which, together with the moneys, if any, deposited with the Trustee at the same time, shall be sufficient in the opinion of an Accountant delivered to the Trustee, to pay when due the principal or Redemption Price, if any, and interest due and to become due on said Bonds on any date prior to the redemption date or maturity date thereof, as the case may be, (iii) in the event said Bonds are not by their terms subject to redemption within the next succeeding sixty (60) days, the Bank shall have given the Trustee in form satisfactory to it irrevocable instructions to mail a notice to the Holders of such Bonds that ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 60 the deposit required by (it) above has been made with the Trustee and that said Bonds are deemed to bare been paid in accordance with this Section and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal or Redemption Price, if any, of said Bonds and (iv) a Counsel’s Opinion stating that all conditions precedent to the satisfaction and discharge of this Resolution have been complied with, the defeasance complies with the terms of this Resolution, and the defeasance will not adversely affect the tax status of the Bonds. Neither Investment Securities or moneys deposited wilh the Trustee pursuant to this Section nor principal or interest payments on any such Investment Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal or Redemption Price, if any, of and interest on said Bonds; provided that any cash received from such principal or interest payments on such Investment Securities deposited with the Trustee, if not then needed for such purpose, shall, to the extent practicable, be reinvested in Inveslment Securities maturing at times and in amounts sufficient to pay when due the principal or Redemption Price, if any, and interest to become due on said Bonds on and prior to such redemption date or maturity date thereof, as the case may be, and interest earned from such reinveslments shall be paid over to the Bank. as received by the Trustee, free and clear of any trust, lien or pledge. (C) If, through the deposit of moneys by the Bank or othePwise, the Fiduciaries shall hold, pursuant to this Resolution, moneys sufficient to pay the principal and interest to maturity on all Outstanding Bonds or to pay, in the case of Bonds in respect of which the Bank shall have taken all action necessary to redeem prior to maturity, the Redemption Price and interest to such redemption date, then at the written request of the Bank all moneys held by any Paying Agent shall be paid over to the Trustee and, together wilh other moneys held by it hereunder, shall be held by lhe Trustee for the payment or redemption of Outstanding Bonds. (D) Anything in this Resolution to the contrary notwithstanding, any moneys held by a Fiduciary ~n trusl for the payment and discharge of any of the Bonds which remain unclaimed for one year after the dale when all of the Bonds have become due and payable, either at their stated maturity dates or by call for earlier redemption, if such moneys were held by the Fiduciary at such date, or for one year after the date of deposil of such moneys if deposited with the Fiduciary after the said date when all of the Bonds became due and payable, shall be repaid by Ihe Fiduciary to the Bank, as its absolute property and free from IrusL and the Fiduciary shall thereupon be released and discharged. (E) The references in this section to "Investment Securities described in clause (1) of the definition thereof" shall include only direct and general obligations of the United States which are not- callable prior to the scheduled maturity in lhe related escrow deposit agreement where the Outstanding Bonds to be deemed to be paid upon the deposit thereof are insured by a municipal bond insurance company licensed and authorized to issue the policy in the State. ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) ARTICLE XIV MISCELLANEOUS Section 1401- Preservation and Inspection of Documents. All documents received by the Trustee or any Paying Agent under the provisions of this Resolution or any Series Resolution shall be retained in its possession and shall be subject at all reasonable times to the inspection of the Bank, the Trustee or any Paying Agent and, after written request received by the Trustee at least five business days prior to the date of inspection, by any Holder of five percent in principal amount of any Series of Outstanding Bonds, and their agents and representatives, any of whom may make copies thereof. Section 1402 - Parties of Interest. Nothing in this Resolution or in any Series Resolution adopted pursuant to the provisions hereof, expressed or implied, is intended to or shall be construed to confer upon or to give to any person or party other than the Bank, Trustee, Paying Agents and the Holders of the Bonds, remedies or claims under or by reason of this Resolution or any Series Resolution or any covenants, conditions or stipulations thereof: and all covenants, stipulations, promises and agreenqents in this Resolution and any Series Resolution contained by or on behalf of the Bank shall be for the sole and exclusive benefit of the Bank, Trustee and Paying Agents and the Holders from time to time of the Bonds. Section 1403- No Recourse Under Resolution or on Bonds, All covenants, stipulations, promises, agreements and obligations of the Bank contained in this Resolution shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Bank and not of any member, officer or employee of the Bank in his individual capacity, and no recourse shall be had for the payment of the principal or Redemption price of or interest on the Bonds or for any claim based thereon or on this Resolution against any member, officer or employee of the Bank or any natural person executing the Bond. Section 1404- Severability. If any one or more of the covenants, stipulations, promises, agreements or obligations, provided in this Resolution on the part of the Bank, Trustee or any Paying Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, then such covenant or covenants, stipulation or stipulations, promise or promises, agreement or agreements, obligation or obligations shall be deemed and construed to be severable from the remaining covenants, stipulations, promises, agreements and obligations herein contained and shall in no way affect the validity of the other provisions of this Resolution. Section 1405 - Headinqs. Any headings preceding the texts of the several Ariicles and Sections hereof, and any table of contents or marginal notes appended to copies hereof, shall be solely for ALAKSA MUNICPAL BOND BANK General Obligation Bond Resolution (Amended) Page 61 Page 62 col~venience of reference and shall not constitute a part of this Resolution, nor shall they affect its meaning, construction or effect. Section 1406 - Conflict. All resolutions or parts of resolutions or other proceedings of the Bank in conflict herewith be and the same are repealed insofar as such conflict exists. Section 1407 - Governinq Law. This Resolution and the Bonds shall be construed in accordance with, and governed by, the laws of the State of Alaska. Section 1408 - Effective Date. This Resolution shall take effect immediately upon its adoption. AI AKSA MUNICPAL BOND BANK Genel’al (~bliga~ti¢~ Bond Resolution (Amended) ALASKA MUNICIPAL BOND BANK RESOLUTION NO. 2013-02 FIRST SUPPLEMENTAL RESOLUTION AUTHORIZING MODIFICATIONS TO THE 2005 GENERAL OBLIGATION BOND RESOLUTION OF THE ALASKA MUNICIPAL BOND BANK WHEREAS, the Board of Oirectors of the Alaska Mun}cipal Bond Bank (the "Bank") by Resolution entitled "A Resolution Creating And Establishing An issue Of Bonds Of The Alaska Municipal Bond Bank; Providing For The Issuance From Time To Time Of Said Bonds; Providing For The Payment Of Principal Of And Interest On Said Bonds; And Providing For The Rights Of The Holders Thereof," adopted July 13, 2005, as amended August 19, 2009 (the "Resolution"), has created and established an issue of Bonds of the Bank; and WHEREAS, the Resolution authoriTes the issuance of said Bonds in one or more series pursuant to a Series Resolution authorizing each such series; and WHEREAS, the Resolution authorizes modifications of any of the provisions of the Resolution provided that such modifications shall not be effective until all Bonds of any Series of Bonds Outstanding as of the date of such Supplemental Resolution shall cease to be Outstanding; and WHEREAS, it has been determined to be in the best interests of the Bank to make certain modifications to the Resolution; and WHEREAS, it is the purpose of this First Supplemental Resolution to modify the terms of the Resolution as follows: (i) to authorize ~he Trustee to release to the Bank. amounts held in the Reserve Fund which exceed the Required Debt Service Reserve whenever there is a reduction in the Required Debt Service Reserve, (ii) to require the Trustee to withdraw earnings and profits realized in the Reserve Fund, and to provide such amounts to the Bank. on or before June 30 of each year, so long as the balance therein equals the Required Debt Service Reserve, (iii) to allow for certain amendments and modifications to the Resolution to be effective upon securing the consent of Holders of at least two-thirds in principal amount of Bonds then Outstanding. and (iv) to establish that consent of Holders of Bonds, when required under the terms of the Resolution, includes the consent of an underwriter or purchaser of a Series of Bonds at the time such Bonds are issued: WHEREAS, in order to provide for the modifications to the Resolution, the Bank has authorized the delivery of this First Supplemental Resotufionl BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE ALASKA MUNICIPAL BONd BANK AS FOLLOWS: ARTICLE I AUTHORITY AND DEFINITIONS Section 101 - First Su }_~lemenla[ Resolution. This First Supplemental Resolution fthe "Supplemental Resolution" is adopted in accordance with the provisions of the Resolution and pursuant to the authority coqtained in the Act. Section 102 - Definitions. In this Supplemental Resolution: unless otherwise defined herein, all capital zed te#~s herein sha~l have the same meanings, respeclively, as such terms are graven m Article I of the Resolution "Effective Date" means the date this Supplemental Resolution is adopted by the Bank, ARTICLE II MODIFICATIONS TO THE RESOLUTION Section 2C1 - Authority to Modify the Resolution. The Resolution, at Section 1001(F), authorizes the modification of any of the provisions of the Resolution, effective only after all Bonds of any Series of Bonds Outstanding as of the date of adoption of such Supplemental Resolution shall cease to be Outstanding, and all Bonds issued thereafter shall contain a spedfic reference to the modifications. Section 202 - Modifications (a) Reduction of Required Debt Service Reserve. This Supplemental Resolution authorizes the Trustee to release to the Bank amounts held in the Reserve Fund which exceed the Reserve Fund Requirement whenever there ’.s a reduction in the Required Debt Service Reserve. The Bank agrees that any amounts released to it shall be used in a manner which will not adversely impact the tax exempt status of any Bonds issued pursuant to the temqs of the Resolution. The Trustee shall have no duty or ob.ligaUon [o monitor or determine whether the Bank’s use ~f funds released from the Reserve Fund adversely impacts the tax exempt states of any Bonds Sections 604(C)(1) and 607 of the Resolution are hereby modified as set forlh on Schedule A-1 hereto, effective after all Bonds issued prior to the Effective Date shall Page 2 cease to be Outstanding and satisfaction of the requirements set forth in Section 203 hereof. (b) Withdrawal of Incomeand Interest Earnedi and Profits Realized in the Reserve Fund. Section 603(C) of the Resolution authorizes the Trustee to withdraw from the Reserve Fund amounts derived from income or interest eamed and profits realized and to pay to the Bank such amounts on or before December 31 of each year subject to certain oondition set forth therein. This Supplemental Resolution modifies Section 603(C) to require that income or interest earned and profits realized from investments in the Reserve Fund be withdrawn by the Trustee and paid to the Bank on or before June 30 of each year. Section 603(C) of the Resolution is hereby modified as set forth in Schedule A-2 hereto, effective affer all Bonds issued prior to the Effective Date shall cease to be Outstanding and satisfaction of the requirements set forth in Section 203 hereof. (c) Powers of Amendment. Section 110! of the Resolution authorizes modifications to, and amendments of, the Resolution subject to, among other things, the wrilten consent of the Bondholders of at least two-thirds in principal amount of the Bonds Outstanding at the time such consent is given. This Supplemental Resolution modifies Section 110t of the Resolution to allow modifications to, and amendments of, the Resolution. subject to the remaining requireq]ents set forth in Section 1101, effective upon the written consent of Bondholders of at least two4hirds in principal amount of Bonds then Outstanding. Section 1101 of the Resolution is hereby modified as set forth in Schedule A-3 hereto, effective after all Bonds issued prior to the Effective Date shall cease to be Outstanding and satisfaction of the requirements set forth in Section 203 hereof. Id) Consent of Underwriters or Purchasers of Bonds. This Supplemental ResoluIion modifies Article XI of the Resolution by adding Section 1107, providing that for all purposes of Article XI and Article X of the Resolution, an underwriter or purchaser of a Series of Bonds may consent to a modification of, or amendment to, the Resolution as Bondholder of such Bonds at the time such Series of Bonds is issued. A.rti.c[e X[ of the Resolution is hereby modified as set forth on Schedule A-4 here’~o, effec~ve after nil Bonds issued prior to the Effective Date shall cease to be Outstanding and satisfaction of the requirements sol forth in Section 203 hereof. Section 203 - Effective Date. The modifications of the Resolution as set forth in this A~ticle 11 shall take effect upon (i) the filing with the Trustee of a copy of this Supplemental Resolution adopted by the Bank, certified by an Authorized Officer, (it) the Bonds of each Series Outstanding as of the Effective Date of this Supplemental Resolution shall cease to be Outstanding, and (iii) the delivers! to the Trustee of an Opinion of Counsel as required by Section !003 of the Resolution. In addition, Bends issued after the Effective Date shall include language specifically referring to this Supplemental Resolution and the modifications to the Resolution authorized herein. ARTICLE Ill MISCELLANEOUS Section 304 - Chairman and Executive Director. The Chairman and the Executive Director are each hereby authorized to execute all documents and to take any action necessary or desirable to carp,/out the provisions of this Supplemental Resolution. Section 305 - Effective Date. This Supplemental Resolution is hereby approved and adopted by the Bank this 19th day of FebruaO’, 2013, which shal~ be the Effective Date as defined herein. Ftrst Supplemental Resolution No. 2013-~2 Page 3 First Supplemental MODIFICATION TO THE RESOLUTION SCHEDULE A-1 Release of Amounts Held in the Reserve Fund [Strike-out = deletions: double underscc, re = insertions] 1. Seclion 504[C’,(1) of the Resolution is hereby modified to read as follows: (C) The Trustee shall eslablish in the Redenlption Account a separate sub-acr-oL~nt i:or the Bonds of each Series Outstanding (1) Any monies deposited into tile Recemption Account from an,.,, source ether thar~ pursuant to Sect!c~: ’207 or Section 916 shall be applied to the purchase or redemption of Bonds in a manner to I:,e determined by the Bank in accordance with Article Any-mon4ee-del~,eCited~to-t-he R-e~en:ff~ion-Aecee-~ pursus~t t~ ~t~o~7 ~1. b~ a~c ~8~u~~se~r redemption of £ank in acco{eance with Ar~cle IV. 2. Section 607 of the Resolution is hereb,~ £’~odified to read as follows: Section 607 - Reduction of Required Debt Service Reserve. Whenever tile P_,~uired Debt Service Reser,.,e is reduced and tl~ amount on ~J#posi~ in th# Re~P./~und~xcee~s_d the R~J~re~ DeN Service Reserve ~ reduce, the Truslee ~,h~!l, ~ upon the written request of the Bank s~gned by an Authorized Officer, s~l withdraw ~Lich excess arnoun~s frorn.an~m~s on dspcs~t ~n lhe Reserve FLorid and provJde lh~ Ba~: witA suc~ arL~n~e~q ~n~on ~o~a~n~l ~-e~edi~ the a~unt~f ~uch reduction of the Requ~re~ Deb£SeR~e ~e~ The amounl to be wkhdrawn from lhe Reserve Fu~d i~ each instance pursuant to the provisions of this paragraph shall be determined by the Bank and the amount lhereof codified to the Truslee in wr ring signed by an Authorized O~cer. T~e~k a~rees tha.t any amounts released to il pursua~I to lhis Sec~on 607 sha!l be used in a mant~er ~c~ ;,v~tl ~t adb~rs~lpacLt qe t~z e~!p~ ~l~s~f a~Bq~ds :~sued pu~_ ua#t to the terms of the Resolulion~ Page SCHEDULE A-2 Modification to Section 603(C) - Withdrawals from the Reserve Fund ~Strike-out = deletions: doub!e underscore = inse~lions.] Section 603tC) of the Resolutior~ is hereby modified to {end as follows: (C) On or before .De,somber 31 _J...~,~.,3~,,~of each year, after complying with the provisions of paragraphs (1) and (2) above to the extent required by such date, the Trustee shall withdraw from the Reserve Fund, any amount remaining therein derived from income or interest earned and profits realized by the Reserve Fund due to the investment thereof, and pay over said amount to the Bank for deposit in the Operating Fund but only to the extent that there remains after such withdrawal an amount in the Reserve Fund at least equal to the Required Debt Service Reserve. AM, B£ZGenend Obhgation and Ref4mdmg Bond~, 2013 Series Series Resoll~tlon NO. ZO13-01 Page !’~-2 SCHEDULE A-3 Modification to Section t101 - Powers of Amendment [Stri~.:e-out = deletions: double lnderscore = insertions] Sec(~on 1 t01 of the Resolution is hereby modified to read as follows: Section 1101 - Powers of Amendment. Any modification or amendment of this Resolution and of the rights and obligations of the Bank and of the Holders of the Bonds, in any particular, may be made by a Supplementa Resolution, with the wdtten consent given as hereinafter provided in Section 1102, (a) of the Holders of at least two-thirds in principal amount of the Bonds ~h#EQutstanding at...th÷4imeq~ueh.e(:~se~ given, or (b) in case less than all of the several Sedes of Bonds then Outstanding are affected by the modification or amendment, of the Holders of at least two-thirds in principal amount of the Bonds of each Series so affected and the_. n Outstanding at~4e.e-.~rne~r:,u~-’~.~t is g~vea; provided, however, that such modification or amendment shall not (i) permit a change in the terms of redemption or maturity of the principal of any Outstanding Bond or of any installment of interest thereon or Sinking Fund Installmenl therefor, (ii) or a reduction in the principal amount or the Redemption Price thereof or in the rate of interest thereon, or (iii) a reduction of the percentage of the Holders of which is required to effect any such modification or amendment, or (iv) permit the creation of any lien prior to or on a parity with the lien created by this Resolution (except in the manner provided by this Resolution) or deprive the Holders of the Bonds of the lien created by this Resolution, without the consent of the Holders of all the Bonds Outstanding or of the Series of Bonds affected by such modification or amendmer~t. For the purposes of this Section, a Series shall be deemed to be affected by a modification or amendment of this Resolution if the same adversely affects or diminishes the rights of the Holders of Bonds of such Series. SCHEDULE A-4 Cor~ser~t of Underwriter or Pt, rchaser Modification [Strike-out = deletions; double underscore = insertions ] Article Xl of the Resolutior~ is modified by addition of Section 1107 to read as follows: Section 1 !07 - Underwriter o- Purchaser ~.s Bondholder of Bonds. .E#.r_a.II purposes of this Article XI and of Adicle X. at? unden, vriler or purchaser of a Series of Bonds may consent to an amendrnecEt~ this Resolutio[q. as a Ber)dholde[ of such Bonds at the.time such Ser!gs of Bonds is issued. APPENDIX F INFORMATION CONCERNING THE STATE OF ALASKA The information concerning the State of Alaska ("Alaska" or the "State") set forth in this Appendix is dated as of the date of the Official Statement. The information contained herein is subject in all respects to the complete text of the financial reports referenced. The information contained herein has been obtained fi-om sources that the State believes to be reliable but is not guaranteed as to accuracy. General Although paylnents made by the Governmental Units on their Municipal Bonds are the primary security for the payment of principal of and interest on the Bonds, including the 2020 Series One Bonds, the Bond Bank also maintains the Reserve Fund as additional security for the payment of the Bonds. The Bond Bank is required under the Act to annually report the sufficiency of and to seek appropriations from the Legislature to replenish the Reserve Fund if needed. Starting in fiscal year 2010, the Bond Bank has been obligated by the 2005 General Bond Resolution to seek an annual appropriation from the State’s General Fund for the Reserve Fund, in the event of a deficiency due to a payment default. From fiscal year 2010, and each subsequent year including fiscal year 2021, the Bond Bank has obtained an annual appropriation from the State’s General Fund to replenish the Reserve Fund, which includes the Bond Bank reserve accounts under the 2010 Master Bond Resolution and the 2016 Master Bond Resolution in the event of a deficiency due to a payment default. No such defaults have occurred and none of the replenishment appropriation has been used. During these same years the Bond Bank has obtained an appropriation for any earnings on reserve accounts held by the Bond Bank in excess of the Bond Bank’s operating expenses for the fiscal year; the Act otherwise would require such earnings to be appropriated to the General Fund. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS - 2005 General Bond Resolution Reserve Fund" in the front of this Official Statelnent and "-Government Budgets and Appropriations" below. Alaska is a sovereign state of the United States of America, located in the thr northwest of North America to the west of Canada, with its southeastern border approximately 500 miles north of the State of Washington. Alaska became a state in 1959. The State’s population grew each year and increased approximately 7.7percent between fiscal year 2008 and fiscal year 2016; however, since 20!6 the population has contracted by approximately 1.2 percent with a population estimate as of June 30, 2019 of 731,007 (Alaska Department of Labor and Worldbrce Development, Research & Analysis Section). The State’s fiscal year is July 1 to June 30. Alaska includes approximately 586,412 square miles (approximately 365 million acres) of land and is the largest state of the United States (roughly equivalent in size to one-fifth of all of the other 49 states combined). Unlike the other 49 states, where significant portions of the land may be owned by individuals or entities in the private sector, less than one percent of the land in Alaska is owned by private, non-Alaska Native owners. As described below, most of the State’s revenue is derived from resources owned by the State itselt~ including petroleum and minerals extracted from State-owned lands and investment income on securities in funds owned by the State. State Government Alaska became the 49th state in 1959 pursuant to the Alaska Statehood Act, which was enacted by the United States Congress in 1958 (the "Statehood Act"). The Alaska Constitution was adopted by the Constitutional Convention on February 5, 1956, ratified by the people of Alaska on April 24, 1956, and became operative with the forlnal proclamation of statehood on January 3, 1959. Alaska government has three branches: legislative, executive, and judicial. The legislative power of the State is vested in a legislature consisting of a Senate with a membership of 20 and a House of Representatives with a membership of 40 (the "Legislature"). The executive power of the State is vested in the Governor. The judicial power of the State is vested in a supreme court, a superior conrt, and the courts established by tile Legislature. Tile jurisdiction of courts and judicial districts is prescribed by law. The courts constitute a unified judicial system for operation and adnfinistration. The State provides or funds a range of services including education, health and human services, transportation, law enfbrcement, judicial, public safety, community and economic development, public improvements, and general administrative services. There are 19 organized boroughs in Alaska and 145 cities, 49 of which are located within an organized borough and 96 of which are located within the unorganized borough. Of these, 15 boroughs and 21 cities impose property taxes and 9 boroughs and 94 cities impose general sales taxes. State Revenues The State does not currently impose personal income taxes and has never imposed statewide general sales taxes. The State does, ho~vever, impose a number of business-related taxes that, together with rents and royalties and fines and fees, represented nearly 100 percent of designated and unrestricted non-investment General Fund revenue in fiscal year 2019. Grants, contributions, and other revenue from the federal government and interest and investment income represent the remaining portions of State revenue. The key drivers of the Alaska economy include natural resource development, federal (including national defense) and State government, seafood, and tourism. Approximately 24.2 percent of the State’s total nonfarm employment is derived from government (including federal, state, and local). Other major industries in Alaska include the education and health services industry, and trade, transportation, and utilities, making up 15.4 percent and 19.6 percent of total nonfann employment, respectively. The State’s major exports are oil, seafood (primarily salmon, halibut, cod, pollock, and crab), coal, gold, silver, zinc, and other minerals (Alaska Department of Labor and Workforce Development, Research & Analysis, Employment Statistics; 2019 Annual Average). The Department of Revenue- Tax Division (the "Tax Division") produces a semi-annual revenue sources book. The revenue sources book published each fall is the comprehensive annual forecast released in December, and the revenue forecast published in the spring is an annual, partial update of the revenue sources book published m the preceding fall. The most recent revenue forecast comes from tile Revenue Sources Book Spring 2020 Revenue Forecast (the "Spring 2020 Revenue Forecast"), released by the Tax Division on Apri! 6, 2020. The next comprehensive annual forecast, the Revenue Sources Book Fall 2020, is anticipated to be released in December 2020. Tile Spring 2020 Revenue Forecast reflects a significant reduction in expected unrestricted General Fund revenue compared to the Revenue Sources Book Fall 2019. Reductions in petroleum- related revenue are largely a function of lower oil price forecasts related to global market supply/demand fluctuations and the outbreak of the 2019 novel coronavirus ("COVID-19"). The production forecast was developed prior to tile crash in the price ofoil in March 2020, and due to tile long lead time for Alaska oil projects and the high level of uncertainty surrounding the market, the production lk)recast in the Spring 2020 Revenue Forecast was not further revised. For similar reasons, no adjusmaents were made to mining production projections. The 2020 Spring Revenue Forecast for federal revenue is based on federal receipts as of March 2020, and did not include additional federal revenue, including from tile Coronavirus Aid, Relief and Economic Security ("CARES") Act. Reductions ill non-petroleum revenue are due in part F-2 to the impacts of the COVID-19 outbreak. In updating its forecasts in the Spring 2020 Revenue Forecast, the Tax Division analyzed the effects of the COVID-19 outbreak on its assumptions stemming fi’om: a sharp reduction in econolnic activity and business closures due to the COVID-19 outbreak for the first half of 2020, assuming that the shutdowns are reversed in the first half of fiscal year 2021; ¯ the effects of global financial volatility on the Alaska Permanent Fund; ¯ the effects of global supply and demand, including as a result of the COVID-19 outbreak, on the price ofoil; reductions in petroleum corporate tax revenue due to low oil prices and reductions in non-petroleum corporate tax revenue due to reduced economic activity; minimal tourism activity during the 2020 summer tourism season, a 75 percent recovery in the 2021 summer tourism season, and a full recovery by the 2022 summer tourism season; lower mining revenues due to lower expected prices for industrial metals, partially offset by high gold prices; lower fisheries revenues due to uncertainty related to demand for fish and uncertainty l-elated to worker supply; and reduction in motor fuel taxes due to reduction in fuel use for the remainder of fiscal year 2020. The COVID-19 outbreak is a significant event that has had and will continue to have ongoing, material effects on the State and the Governmental Units. Although the effects of COVID-19 cannot be predicted with certainty, COVID-19 and related social distancing measures implemented in response to COVID-19 have had and are expected to continue to have a material adverse effect on the global economy and financial markets; economic activity within the State, including the oil and gas, tourism, and healthcare industries, among others; revenues collected by the State and Govemlnental Units; and the value of the Alaska Permanent Fund and Earnings Reserve. Historic information in this Official Statement about the finances and operations of the State, the Bond Bank, and the Governmental Units that predates the outbreak of COVID-19 should be considered in light of the possible or probable negative effects the COVID-19 outbreak may have on the current and future finances and operations thereof. Any budgets or projections that have been updated since the outbreak of COVID-19 should be considered in light of the possible or probable further negative impact from the COVID-19 outbreak. The Spring 2020 Revenue Forecast and any other budget and projection infomaation and all other forward-looking statements in this Official Statement are based on current expectations and are not intended as representations of fact or guarantees of results. Any such forward-looking statements are inherently subject to a variety of risks and uncertainties that could cause actual results or performance to differ materially fi-om those that have been forecast, estimated, or projected. Historically, petroleum-related revenue has been the largest source of unrestricted revenue for the General Fund. Approximately 80 percent of fiscal year 2018 unrestricted General Fund revenue was generated flom petroleum. In 2018, the Legislature enacted Senate Bill 26 ("SB 26"). which directs the State to appropriate amounts fi-om the earnings reserve of the Alaska Permanent Fund to the General Fund as unrestricted General Fund revenue, diminishing the percentage of unreslricted General Fund revenue that petroleum-related revenue represents to approximately 38 percent in fiscal year 2019. In the Spring 2020 Revenue Forecast, the State forecasts the percentage of unrestricted General Fund revenue that F-3 petroleum-related revenue represents to be approximately 24 percent in fiscal year 2020 and 17 percent in fiscal year 2021. The Alaska Permanent Fund was established by a voter-approved constitutional amendment that took effect in February 1977. Pursuant to legislation enacted in 1982, annual appropriations are made from the Perlnanent Fund Earnings Reserve, first for dividends to qualified Alaska residents and then for inflation proofing. The principal portion of the Permanent Fund, approximately $45.4 billion as of April 30, 2020, may not be spent without anaending the State Constitution. The earnings reserve, approximately $17.1 billion as of April 30, 2020 (subsequent to June 30, 2019, and with enacted legislation in the fiscal year 2021 budget, this amount includes approximately $3.1 billion committed to the General Fund for fiscal year 2021 and approximately $4.8 billion committed to the principal of the Permanent Fund for current and fnture fiscal year inflation proofing), may be appropriated by a majority vote of the Legislature. See "Government Funds - The Alaska Permanent Fund" below. In fiscal year 2019, pursuant to SB 26, the State began appropriating amounts from the Permanent Fund Earnings Reserve to the General Fund as unrestricted General Fund revenue. SB 26 adjusted the transfers from the Permanent Fund Earnings Reserve to an amount determined by taking 5.25 percent of the average market value of the Permanent Fund for the first five of the preceding six fiscal years, including the fiscal year just ended. Effective July 1, 2021, the amount determined for transfers from the Permanent Fund Earnings Reserve is reduced to 5.00 percent of the average market value of the fund for the first five of the preceding six fiscal years, including the fiscal year just ended. As described below in "Government Funds- The Alaska Permanent Fund," this calculation does not include the principal attributable to the settlement of State v. Amerada Hes’s. The Alaska Permanent Fund Corporation, which manages the Permanent Fund, projects these annual transfers to the General Fund as unrestricted revenue in their monthly histow and projections report, as reflected in Table 2. For fiscal year 2020, SB 26 resulted in transfers of approximately $2.9 billion from the Permanent Fund Earnings Reserve to unrestricted General Fund revenue. For fiscal year 2021, SB 26 will result in transfers of approximately $3.1 billion from the Permanent Fund Earnings Reserve to unrestricted General Fund revenue. The Permanent Fund Dividend may be paid out of these transfers, and any residual revenue is available for other appropriation. In fiscal year 2019, the Permanent Fund Dividend appropriation was approximately $1,015 million. The 2019 Permanent Fund Dividend amount was $1,606 per qualified resident, and the 2020 Permanent Fund Dividend amount is $992 per qualified resident. In the Spring 2020 Revenue Forecast, the State forecasted general purpose unrestricted revenue forecast to be approximately $4,522.3 million in fiscal year 2021 and $4,244.3 million in fiscal year 2022, compared to $5,349.8 million in fiscal year 2019 and $2,413.5 million m fiscal year 2018. The primary reason i:or this decrease was unrestricted petroleum revenue decreasing fiom $2,043.8 million in fiscal year 2019 to an estimated $1,098.8 million in fiscal year 2020, and an estimated $716.6 million in fiscal year 2021. In the Spring 2020 Revenue Forecast, the State forecasts that Alaska North Slope ("ANS") oil prices will be $51.65 in fiscal year 2020 and $37.00 in fiscal year 2021, compared to actual prices of $69.46 in fiscal year 2019 and $63.61 in fiscal year 2018. The State forecasts that ANS production will be approximately 486.4 thousand barrels of oil per day in fiscal year 2020 and 486.5 thousand barrels of oil per day in fiscal year 2021, compared to 496.9 thousand barrels of oil per day in fiscal year 2019 and 518.4 thousand barrels of oil peT" day in fiscal year 2018. In the Spring 2020 Revenue Forecast, the State forecasts ANS oil prices and production and general purpose unrestricted revenue through fiscal year 2029. See Table 4. Oil attd Gas Revemtes. The State’s unrestricted General Fund revenues have historically been generated primarily fl’om petroleum production activities. The State receives petroleum revenues (some of F-4 which are restricted) fi-om five sources: oil and gas propelq.y taxes, oil and gas production taxes, bonuses and rents, oil and gas royalties, and corporate income taxes. Oil and Gas P~’opet’O~ Tax. The State levies an oil and gas property tax on the value of taxable oil and gas exploration, production and pipeline transportation property in the State at a rate of 20 mills (two percent) of the assessed value of the property. This is the only centrally assessed statewide property tax program in Alaska. Oil and gas reserves, oil or gas leases, the rights to explore or produce oil or gas, and intangible drilling expenses are not considered taxable property under the statute. The most notable properties that are subject to this tax are the Trans-Alaska Pipeline System, including the terminal at Valdez ("TAPS") and the field production systems at Prudhoe Bay. The assessed value of all existing prope~-ties subject to this tax was approximately $28.5 billion as of JanuaW 1, 2019, $28.2 billion as of January 1, 2018, $28.4 billion as of January 1, 2017, $27.7 billion as of January 1, 2016, and $28.6 billion as of January 1,2015. Property taxes on exploration property are based upon estimated market value of the property. For property taxes on production property, values are based upon replacement cost, less depreciation based on the economic life of the proven reserves (or the economic lirnit in the case of taxes on offshore platforms or onshore facilities). The amount collected from property taxes on existing production property is expected to decrease in the future. For property taxes on pipeline transportation property (primarily TAPS property), values are determined based upon the economic value, taking into account the estimated life of tile proven reserves of gas or unrefined oil expected to be transported by the pipeline and replacement cost, less depreciation based on the economic life of the reserves. When the oil and gas property is located within the jurisdiction of a municipality, the municipality may also levy a tax on the propm~_y at the same rate the municipality taxes all other non-oil and gas property. The tax paid to a municipality on oil and gas property acts as a credit toward tile payment to the State. Of the $569.5 million of gross tax levied in fiscal year 2019 on oil and gas property in the State, the State’s share was $123.0 million; $119.5 million of gross tax was actually collected due to a combination of credits and late payments. In the Spring 2020 Revenue Forecast, tile State forecasts income from the oil and gas property tax to be approximately $123.2 million in fiscal year 2020 and $116.7 million in fiscal year 2021. Revenue fi-om oil and gas property taxes is deposited in the General Fund; however, the State Constitution requires that settlement payments received by the State after a property tax assessment dispute be deposited in the Constitutional Budget Reserve Fund (tile "CBRF"). In fiscal year 2018, $121.3 million in total settlements were deposited into the CBRF, $181.2 million in fiscal year 2019, and in the Spring 2020 Revenue Forecast, the State forecasts settlements to be $235 million in fiscal year 2020 and $75 million in fiscal year 2021. See "Government Funds- The Constitutional Budget Reserve Fund" below. Oil a~,d Gas P~’odz~ctio~ Taxes. The State levies a tax on oil and gas production income generated flom production activities in the State. The tax on production is levied on sales of all onshore oil and gas production, except for federal and State royalty shares and on offshore developments within three miles of shore. The oil and gas production tax can be a significant source of revenue and in many past years has been tile State’s single largest source of revenue. The production tax is levied differently based upon the type of production (oil versus gas) and tile geographical location (North Slope versus Cook Inlet, the State’s two producing petroleum basins). F-5 For North Slope oil and export gas, the tax uses the concept of"Production Tax Value" ("PTV"), which is the gross value at the point of production minus lease expenditures. PTV is similar in concept to net profit, but different in that all lease expenditures can be deducted in the year incurred; that is, capital expenditures are not subject to a depreciation schedule. The production tax rate is 35 percent of PTV with an alternative minimum tax of 0 percent to 4 percent of gross value, with the 4 percent minimum tax applying when average ANS oil prices for the year exceed $25 per barrel. Several tax credits and other mechanisms are available for North Slope oil production to provide incentives for additional investment. A per-taxable-barrel credit is available, which is reduced progressively from $8 per barrel to $0 as wellhead value increases fi’om $80 per barrel to $150 per barrel. A company that chooses to take this credit may not use any other credits to reduce tax paid to below the gross minimum tax. An additional incentive applies for qualifying new production areas on the North Slope. The so-called "Gross Value Reduction" ("GVR") allows a company to exclude 20 percent or 30 percent of the gross value for that production from the tax calculation. Qualifying production includes areas surrounding a currently producing area that may not be commercial to develop, as well as new oil pools. Oil that qualifies for this GVR receives a fiat $5 per-taxable-barrel credit rather than the sliding- scale credit available for most other North Slope production. As a further incentive, this $5 per-taxable- barrel credit can be applied to reduce tax liability beloxv the minimum tax. The GVR is available only for the first seven years of production and ends early if ANS prices exceed $70 per barrel for any three years. Effective January 1, 2022, for North Slope export gas, the tax rate will be 13 percent of gross value at the point of production. Currently, only a very small amount of gas is technically export gas, which is sold for field operations ira federal offshore leases. However, this tax rate would apply to any major gas export project developed in the future. For the North Slope, a Net Operating Loss ("NOL") credit in the amount of 35 percent of losses was available until December 31, 2017. It allowed a credit to be carried forward to offset a future tax liability or, in some cases, to be transferred or repurchased by the State. Effective January 1, 2018, the NOL credit was replaced with a new carried-forward annual loss provision. In lieu of credits, a company may carry forward 100 percent of lease expenditures not applied against the tax and may apply all or part of lease expenditures in a future year. A carried-forward annual loss may not reduce tax below the minimum tax and may only be used after the start of regular production from the area in which the expenditures ~vere incurred. An unused carried-forward annual loss declines in value by one-tenth each year beginning in the eighth or eleventh year after it is earned, depending on whether the carried-forward annual loss was earned fiom a producing or non-producing area. Cook Inlet oil production is officially subject to the same tax rate of 35 percent of PTV. However, the tax is limited by statute to a maximum of $! per barrel. For Cook Inlet gas production, the tax rate is 35 percent of PTV, and the tax is limited to a maximum value averaging 17.7 cents per thousand cubic feet. This rate also applies to North Slope gas used for qualifying in-State uses, commonly referred to as "non-export gas." Taxpayers are required to make monthly estimated payments, based upon activities of the preceding month. These payments are due on the last day of the following month, and taxpayers are required to file an annual tax return to "true up" any tax liabilities or overpayments made during the year. From fiscal year 2007 through fiscal year 2017, as an incentive for new exploration, companies without tax liability against which to apply credits could apply for a tel\rod of the value of most of the credits, subject to appropriation. In fiscal year 2016, the State credited for potential purchase $498 million fiom companies claiming such credits. For fiscal year 2017, the State appropriated the minimum provided for in the statutorily based fornmla of $32.7 million l’or payments of such credits. In fiscal year 2018, the F-6 State purchased $75 million in tax credits through the Oil and Gas Tax Credit Fund and purchased an additional $103 million in fiscal year 2019. For fiscal year 2021. an estimated $738 million in tax credits are projected to be available for State repurchase, with the majority of those being credits earned in prior years. Payments of these credits are subject to future fiscal year appropriation. In 2017, HB 111 was enacted, making multiple changes to the State’s oil and gas production tax and tax credit statutes. Following passage of HB I 11, new credits were no longer be eligible for cash repurchase. Instead, companies retained their credits until such time as they owe a tax liability to the State, at which time the credits could be used to offset the company’s oil and gas production taxes. In 2018, HB 331 was enacted, creating a tax credit bonding program that would allow the State to purchase outstanding oil and gas tax credits at a discount to face value, and spread the funding out over several years through issuance of subject to appropriation bonds. A legal challenge has delayed the tax credit bonding program. The fiscal year 2020 operating budget appropriated $700 million of bond proceeds to the Oil and Gas Tax Credit Fund for expenditure in fiscal year 2020 or 2021. Contingent on a favorable outcome from the Alaska Supreme Court, the Alaska Tax Credit Certificate Bond Corporation will be able to issue bonds to finance purchase of tax credit certificates in fiscal year 2021, with an estimated $700 million of appropriation authority that provides the flexibility to purchase up to the entire $738 million of anticipated eligible credits. No funds have been appropriated for the purchase of tax credit certificates outside of the bonding program since fiscal year 2019. In the Spring 2020 Revenue Forecast, the State forecasts purchases of tax credit certificates to be $1 million in fiscal year 2020 and $738 million in fiscal year 2021. All unrestricted revenue generated by the oil and gas production taxes ($390 million in fiscal year 2015, $186 million in fiscal year 2016, $134 million in fiscal year 2017, $750 million in fiscal year 2018, $596 million in fiscal year 2019 and forecasted in the Spring 2020 Revenue Forecast to be $268 million in fiscal year 2020 and $122 million in fiscal year 2021) is deposited in the General Fund, except that any paylnents received as a result of an audit assesslnent under the oil and gas production tax or as a result of litigation with respect to the tax are deposited into the CBRF. See Table 1. Oil and Gas Royalties, Rents" and Bonuses. In fiscal year 2019, approximately 97 percent of all cunent oil production in the State, including the reserves at Prudhoe Bay, ~vas from State land leased for exploration and development. As the land owner, through the Department of Natural Resources ("DNR"), the State earns revenue from leasing as (i)upfiont bonuses, (it)annual rent charges and (iii)retained royalty interests in the oil and gas production. State land historically has been leased largely based on a competitive bonus bid system. Under this system, the State retains a statutorily prescribed minimum royalty interest of at least 12.5 percent on oil and gas production fi-om land leased from the State, although some leases contain royalty rates of 16.67 percent and some also include a net profit-share or sliding scale component. Under all lease contracts the State has ever written, the State reserves the right to switch between taking its royalty in-kind or in cash (in cash royalty is valued according to a formula based upon the contract prices received by the producers, net of transportation charges). When the State elects to take its royalty share in-kind, the State becomes responsible for selling and transporting that royalty share, which means establishing complex contracts to accomplish these tasks. The State regularly negotiates these contracts and has historically sold roughly 95 percent of North Slope oil royalties in this way. State royalty revenue from production on State land that is not obligated to the Permanent Fund or Public School Trust Fund is nnrestricted revenue that is available for general appropriations. In addition to royalties fi’om production on State land, the State receives 50 percent of royalties and lease bonuses and rents received by the federal government fi-om leases ol federal lands in the National Petroleum Reserve Alaska (the "NPR-A"). The State is required to deposit its entire share of lease bonuses, rents, and royalties from oil activity in the NPR-A in the NPR-A Special Revenue Fund, F-7 from which a portion is used to make grants to municipalities that demonstrate present or future impact from oil development in the NPR-A. Of the revenue in the NPR-A Special Revenue Fund that is not appropriated to municipalities, 50 percent is to be deposited to the Permanent Fund, with up to 0.5 percent to the Public School Trust Fund and then to the Power Cost Equalization Fund. Any remaining amount is then available for General Fund appropriations. The State also receives a portion of revenues flom federal royalties and bonuses on all other federal lands located within State borders and from certain federal waters. Table 1 summarizes tile sources and initial applications of oil and other petroleum-related revenue for fiscal years 2010 through 2019. Table 1 Sources and Initial Applications of Oil and Other Petroleum-Related Revenue Fiscal Years Ended June 30, 2010 - 2019 Oil Revenue to the General Fund ($ millions) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Subtotal .............. $4,912.9 Oil Revenue to Other Funds Royalties to the Permanent Fund and School Fund ~:~{31 ......... $ 707.2 Tax settlements to CBRF .......... 552.7 NPR-A royalties, renls and bonuses ~a~ ............ Subtotal .............. $ 121.6 $ 119.5 66.4 217.7 749.9 595.5 Property Tax ..... $ 118.8 $ 110.6 $ 111.2 $ 99.3 $ 128.1 $ 125.2 $ 111.7 $ 120.4 Corporate Income Tax {i} 446.1 542. l 568.8 434.6 307.6 94.8 (58.8) (59.4) Production Tax. 2,871.0 4,552.9 6,146.1 4,050.3 2,614.7 389.7 186.0 134.4 Royalties (including bonuses, rents and interest){zt{3~ 1,477.0 1,843.3 2,03t.7 1,767.8 1,712.4 1,078.2 870.6 681.5 1,002.3 1,111.t $7,048.9 $8,857.8 $6.352.0 $4,762.8 $1,687.9 $1,109.5 $ 876.9 $ 1,940.2 $ 2,043.8 Total Oil Revenne $ 870.9 $ 919.6 $ 855.9 $ 786.2 $ 518.3 $ 396.9 $ 340.0 $ 363.1 $ 382.3 187.2 102.8 357.4 177.4 149.9 119.1 481.9 121.3 181.2 21.3 3.0 4.8 3.6 6.8 3.2 1.8 1.4 23.7 12.3 1,281.2 1,061.1 1,027.2 1,216.9 970.4 671.4 5 t 7.8 823.2 508.0 575.8 $6,194.1 $8,110.0 $9,885.0 $7,568.9 $5,733.2 $2,359.3 $1,627.3 $1,700.1 $2,448.2 $2,619.6 (I) Corporate income tax collections l’or fiscal years 2016 and 2(117 were negative due to large reffmds of prior-year estimated taxes and low estimated taxes lbr fiscal years 2016 and 2017. (2) Net of deposits in the Permanent Fund and the CBRF. The State Constitntion requires the State to deposit at least 25 percent in the Pennanenl Fund, and between 1980 and 2003. Slale statutes required the State lo deposil at leasl 50 percenl ill the Permanent Fund. The stamlory n-dnimum was changed m 25 percenl beginning July 1, 2003, and changed back m 5(I percent as of October 1. 2008. In fiscal years 2018 and 2019. only the constitutionally reqnired 25 percent of royalties were deposited into the Permanent Fulld. See "’Go~crnment Ful3ds The Alaska Permanenl Ftuld’" below. (3) Includes proceeds of royahies taken in-kind. (4) By f’ederal statule, the State receives 50 percent of" federal revenues from oil and gas lease sales located in lhe NPR-A. Som’ce. 2010 through 2019 Fall Re~emw Source.~ Bool¢.~’ and Spring 2020 Revemte Forecast. Tax Divixion. Corporate htcome Tax. The State levies a corporate income tax on Alaska taxable net income of corporations doing business in Alaska (other than certain qualified small businesses and income received by cmaain corporations fl’om the sale of salmon or sahnon eggs). Corporate income tax rates are graduated and range fiom zero percent to 9.4 percent of income earned in Alaska. Taxable income generally is calculated using the provisions of the federal Internal Revenue Code, and the calculation of Alaska taxable income varies, depending upon whether the corporation does business solely in Alaska, does business both inside and outside Alaska, or is part of a group of corporations that operate as a unit in the conduct of a single business (a "unitary" or "combined" group). Oil and gas companies are combined on a world-wide basis, although for other industries only the companies doing business in the United States are combined. Taxpayers may claim all federal incentive credits, but federal credits that refund other federal taxes are not allowed as credits against State corporate income taxes. In addition to the federal incentive credits, the State provides additional incentives, including an education credit for contributions made to accredited State universities or colleges for education purposes, a minerals exploration incentive, an oil and gas exploration incentive, and a gas exploration and development tax credit. Most corporate net income tax collections are deposited in the General Fund, although collections from corporate income tax audit assessments ofoil and gas corporations are deposited in the CBRF. Non-OH Revemtes. The State also receives unrestricted and restricted General Fund revenues from activities unrelated to petroleum. The State receives revenues from corporate income taxes paid by corporations other than petroleum producers, cigarette/tobacco (and beginning in fiscal year 2017, marijuana) excise taxes, motor fuel taxes, alcoholic beverage taxes, fishery business taxes, electric and telephone cooperative taxes, insurance premium taxes, commercial passenger vessel excise taxes and service charges, permit fees, fines and fbrfeitures, mining license taxes, and miscellaneous revenues. See "Govermnent Budgets and Appropriations- General Appropriations" below. A number of these non-oil tax, license, and fee revenues (but not investment income and federal revenue) are shared with municipalities. In fiscal year 2019, unrestricted revenues unrelated to petroleum production (excluding investment income and federal revenues) was $490.1 million, and in the Spring 2020 Revenue Forecast, the State forecasts the value to be $454.2 million in fiscal year 2020 and $411.5 million in fiscal year 2021. Contained in the non-oil figures is the minerals industry, which contributes State revenue in the form of corporate income tax, mining license tax, and mining rents and royalties. For additional information, see "Government Budgets and Appropriations - General Appropriations" below. Federal Revenue. The federal government is a significant employer in Alaska, directly and indirectly, in connection with its military bases and as a result of procurement contracts, grants, and other spending. In addition to expenditures in connection with federal military bases and other activities in Alaska, the State receives funding from the federal government, approximately $2.5 billion in fiscal year 2015, $2.6 billion in fiscal year 2016, $3.2 billion in fiscal year 2017, $3.1 billion in fiscal year 2018, and $3.4 billion in fiscal year 2019. In the Spring 2020 Revenue Forecast, the State forecasts restricted federal revenue to be approximately $4.3 billion in fiscal year 2020 and $4.3 billion in fiscal year 2021. The forecasts represent total budgeted spending authority for federal receipts, and actual federal receipts are subject to change. The federal funds are used primarily fbr road and airport improvements, aid to schools, and Medicaid payments, all of which are restricted by legislative appropriation to specific uses. Federal fl~nds are most often transferred to the State on a reimbursement basis, and all transfers are subject to federal and State audit. Most federal funding requires State matching. The unrestricted General Fund State match for federal spending in fiscal year 2019 was approximately $793 million for the operating budget and $38 million lbr the capital budget. Investment Revenues. The State earns unrestricted and restricted by custom investment earnings fi-om a nunaber of internal funds. Two primary sources of investment income for the Slate are the two constitutionally-mandated t\mds, the Permanent Fund and the CBRF. The Permanent Fund had a fnnd F-9 balance (principal and earnings reserve) of approximately $66.3 billion as of June 30, 2019, which includes the value of the fiscal year 2020 General Fund transfer commitment of $2.9 billion and approximately $4.8 billion committed to the principal of the Permanent Fund for inflation proofing. The Permanent Fund had a fund balance of $64.9 billion as of June 30, 2018, $59.8 billion as of June 30, 2017, $52.8 billion as of June 30, 2016, and $52.8 billion as of June 30, 2015. The CBRF had an asset balance of approxilnately $1.8 billion as of June 30, 2019, $2.4 billion as of June 30, 2018, $3.9 billion as of June 30, 2017. $7.3 billion as of June 30, 2016, and $10.1 billion as of June 30, 2015. Restricted investment revenue fl-om the CBRF was approximately $74.8 million in fiscal year 2019. In the Spring 2020 Revenue Forecast, the State forecasts restricted investment revenue fi-om the CBRF to be $33.1 million in fiscal year 2020 and $9.5 million in fiscal year 2021. The next comprehensive annual forecast, the Revenue Sources Book Fall 2020, is anticipated to be released in the last quarter of calendar year 2020. The Permanent Fund Earnings Reserve balance is available for appropriation with a ~najority vote of the Legislature, while appropriation of the Permanent Fund’s principal balance requires amendment of the State Constitution. The balance of the CBRF is available for appropriation with a tbree- fburths vote of each house of the Legislature, and as described below, the State has historically borrowed from the CBRF when needed to address mismatches between revenue receipts and expenditures in the General Fund and/or to balance the budget at the end of the fiscal year. As previously described, Senate Bill 26 ("SB 26"), relating to the earnings of the Permanent Fund, was enacted in 2018. The Alaska Permanent Fund Corporation ("APFC") projects these annual transfers of unrestricted General Fund revenue from the Permanent Fund Earnings Reserve to the General Fund in their monthly history and projections report, as reflected in Table 2. Table 2 State of Alaska Transfers from the Permanent Fund Earnings Reserve to the General Fund for the Fiscal Year Ending June 30, 2020 APFC Forecast for Fiscal Years Ending June 30, 2021 - 2029 ($ millions) Fiscal Transfer Year Amount 2020 $2,933 Projected ~? 2021 3,091 2022 3,094 2023 3,260 2024 3,372 2025 3,450 2026 3,530 2027 3,612 2028 3,695 2029 3,780 (1) APFC transfer projections as of the unaudited April 30. 2020 report, and subjecl to change. General Fund asset balances listed as of June 30 may include borrowings flom the CBRF for future fiscal year operating requirements. All CBRF values for fiscal year 2019 stated above are asset F-10 values. See "Government Funds- The Constitutional Budget Reserve Fund" and "-The Alaska Permanent Fund" below. In the past, the State has also received earnings on the Statutory Budget Reserve Fund (the "SBRF"). Earnings on the SBRF arc considered General Fund unrestricted revenue unless otherwise appropriated back to the SBRF. Article IX, Section 17(d) of the Alaska Constitution provides that the amount of money in the General Fund available for appropriation at the end of each succeeding fiscal year is to be deposited in the CBRF until the amount appropriated fiom the CBRF is repaid. The available fund balance of the SBRF diminished to zero by June 30, 2016, where it has remained since. See "Government Funds - The Statutory Budget Reserve Fund" below. In addition to investment income from the above-described funds, the State receives investment income (including interest paid) from investment of other unrestricted funds ($93.3 million in fiscal year 2019, $16.3 million in fiscal year 2018, $17.3 million in fiscal year 2017, $22.5 million in fiscal year 2016, and $47.9 million in fiscal year 2015). In the Spring 2020 Revenue Forecast, the State forecasts investment revenue of other unrestricted funds to be approximately $36.3 million in fiscal year 2020 and $24.8 million in fiscal year 2021. See "Government Funds" below. Major Components of State Revenues. Table 3 summarizes the sources of unrestricted and restricted revenues available to the State in fiscal years 2014 through 2019, with a forecast for fiscal years 2020 and 2021 from the Spring 2020 Revenue Forecast. [Remainder of page intentionally left blank.] Table 3 Total State Government Revenue by Major Component Fiscal Years Ended ,lune 30, 2014 - 2019 Forecast for Fiscal Years Ended and Ending June 30, 2020 - 2021 ($ minions) 2014 2015 2016 2017 2018 2019 2020f2) 2021!2) Revenue Source Unrestricted Oil Revenue $ 4,762.8 $ 1,687.9 $ 1,109.5 $ 876.9 $ 1,940.2 $ 2,043.8 $ 1,098.8 $ 716.6 Non-Oil Revenue 497.1 520.5 400.7 460.3 457.0 490.1 454.2 411.5 Investment Earnings 130.2 47.9 22.5 17.3 16.3 2,815.9 2,969.4 3,116.3 Subtotal $ 5,390.1 $ 2,256.3 $ 1,532.7 $ 1,354.6 $ 2,413.5 $ 5,349.8 $ 4,522.3 $ 4,244.3 Restricted Oil Revenue ~! $ 934.4 $ 670.5 $ 517.8 $ 823.8 $ 508.1 $ 575.8 $ 562.8 $ 294.3 Non-Oil Revenue 473.5 491.2 647.5 656.3 697.4 631.2 633.3 614.3 Investment Earnings/31 7,927.7 2,603.4 556.0 6,832.2 5,616.4 1,188.0 (3,448.4) 1,112.0 Federal Revenue 2,511.9 2,512.7 2,640.1 3,198.2 3,124.6 3,434.5 4,304.8 4,304.8 Subtotal 11,847.5 6,277.8 4,361.4 11,510.5 9,446.5 5,829.6 2,052.5 6,325.5 $17,237.6 $ 8,534.1 $ 5,894.1 $12,865.1 $12,360.0 $11,179.4 $ 6,574.8 $10,569.9 Total Totals may not foot due to rounding. (1) "Restricted Oil Revenue" includes oil revenue for tim State’s share of rents, royalties, and bonuses from the NPR-A, shared by the federal government. (2) Forecasts for fiscal years 2020 and 2021 include projections for the transfers fi’om the Permanent Fund Earnings Reserve to the General Fund for unrestricted General Fund expenditures, including the Permanent Fund Dividend, based on SB 26. All values for fiscal years 2020 and 2021 are based on projections as of lhe release of the Spring 2020 Revenue Forecast and are subject to change. (3) A portion of the Restricted investment earnings starting in fiscal year 2019 consist ot~ Permanent Fund unrealized gains and realized gains, less the transfers to the General Fund classified as unrestricted revenue pursuant to SB 26. Source. 2014 through 2019 Fall Revemte Sources Books and Spring 2020 Revenue l~)~recast. Tax Divisim~. Government Budgets and Appropriations The Legislature is responsible for enacting the laws of the State, including laws that impose State taxes, and tot" appropriating money to operate the government. The State is limited by federal law, the State Constitution and statutes, and by policy in how it manages its funds and, as in other states, no funds, regardless of source, may be spent without a valid appropriation fi’om the Legislature. The Legislature has a 90-day statutory time limit, and a constitutional time limit of 120 days with an allowance tot up to an additional 10 days, to approve a budget. If the Legislature fails to approve a budget, or if other limited purpose legislation needs to be considered, the Governor or Legislature may call a special session to consider such matters. See "General Appropriations" below. Budgets. The State’s fiscal year begins on July ! and ends on the following June 30, anti the Legislature meets in regular session beginning on the fourth Monday of January in each year. The Governor is required by AS 37.07.020(a) to prepare: (l)a statutorily conforming budget for the F-12 succeeding fiscal year, including capital, operating, and mental health budgets, setting forth all proposed expenditures (including expenditures of federal and other funds not generated by the State) and anticipated income of all departments, offices, and agencies of the State; (2) a general appropriation bill to authorize proposed expenditures; and (3) in the case of proposed new or additional revenues, one or lnore bills containing recommendations for such new or additional revenues. In accordance with AS 37.07.020(b), the Governor is also required to prepare a six-year capital budget covering the sncceeding six fiscal years and a 10-year fiscal plan. To assist the Governor in preparing budgets, proposed appropriation bills, and fiscal plans, the Tax Division prepares forecasts of annual revenues in December and March or April of each year. See "State Revenues" above and "General Appropriations," Table 4, "Government Funds," and "Revenue Forecasts" below. The State Constitution prohibits the withdrawal from the treasury of nearly all funds, regardless of source, without an appropriation. As a consequence, the Governor’s proposed budget and the Legislature’s appropriation bills include federal and other funds as well as funds from the State and, by practice, funds that may be available for withdrawal without an appropriation. The State has customarily restricted certain revenue sources each fiscal year by practice. Such revenue is nonetheless available for appropriation. General Appropriations. Tile Governor is required by State law to submit the three budgets--an operating budget, a mental health budget, and a capital budget--by December 15 and to introduce the budgets and appropriation bills formally to the Legislature in January by the fourth day of the regular Legislative session. These three budgets then to go the House Finance Committee and are voted upon by the House of Representatives. The three budgets then go to the Senate Finance Committee, are voted upon by the full Senate, and may go to a conference committee to work out differences between the House and Senate versions (and then be submitted to both houses for final votes). Bills passed by both houses are delivered to the Governor for signature. The Governor may veto one or more of the appropriations made by the Legislature in all appropriations bill (a "line-item veto") or may sign the bill or permit the bill to become law without a signature or veto. The Legislature may override a veto by the Governor (by a vote of three-fourths of the members of each house of the Legislature in the case of appropriation bills and by a vote of two-thirds of the members of each house in the case of other bills). Either the Governor or the Legislature may initiate supplemental appropriations during the fiscal year to deal with new or changed revenue receipts, to correct errors, or i-br any other reason. An appropriation is all authorization to spend, not a requirement to spend. Enacted budget appropriations may be expended beginning July 1. The Governor is permitted to prioritize or restrict expenditures, to redirect funds within an operating appropriation to fund core services, and to expend unanticipated federal funds or program receipts. Historically, Alaskan Governors have placed restrictions on authorized operating and capital expenditures during years in which actual revenues were less than forecast and budgeted. Such expenditure restrictions have included deferring capital expenditures, State employment hiring and compensation fieezes, lay-ofl~ and furloughs, and restrictions on non-core operating expenses. As described below, unrestricted General Fund revenue began declining after the end of fiscal year 2012, increased in fiscal years 2018 and 20!9, is projected to decrease in fiscal years 2020 and 2021, and is projected to increase over the remaining forecast period fi’om fiscal years 2022 through 2029. See Tables 4 and 5 below. Operating and capital expenditures have generally declined over the same time-period through, among other actions, use of administrative restrictions on spending. See "Public Debt and Other Obligations of the State" below. Additional options for tile State to manage budget funding include reducing State expenditures, transferring spending authority among line items, providing additional incentives to develop petroleum or mining resources, reinstitnting a State personal income tax, or imposing other broad-based statewide F-13 taxes, such as a sales tax. Most of these options, including the imposition of personal income taxes or other taxes, would require action by the Legislature. Governor Michael J. Dunleavy was elected in November 2018 and took ot’fice in December 2018. The Governor has declared that additional adjustments to the State budget are needed to allow for a full statutory Permanent Fund Dividend distribution to State residents. For fiscal year 2021 the statutory Permanent Fund Dividend calculation would have resulted in approximately $2.0 billion being appropriated for this purpose. The Legislature appropriated approximately $680 million for the fiscal year 2021 Permanent Fund Dividend. The State’s enacted budget for fiscal year 2021 diminished spending from fiscal year 2020 from $10.62 billion to $10.03 billion, a reduction of approximately $588 million, of which approximately $389 million is reduced State fund spending. In January 2019, Governor Dunleavy introduced three constitutional amendments: one to add the requirement for a statutory Permanent Fund Dividend distribution from the Permanent Fund, one to add a requirement for voter approval for new or increased taxes, and one to place a cap on annual growth in State expenditures and prioritize the deposit of any fiscal year’s unappropriated State General Fund surplus to the Permanent Fund. These proposals will be considered independently, and to be implemented, must receive a two-thirds vote of approval from both the House of Representatives and the Senate followed by approval in a statewide election. Appropriations for Debt and Appropriations for Subject-to-Appropriation Obligations. The Governor’s appropriations bills include separate subsections t-br appropriations for State debt and other subject-to-appropriation obligations and specify the sources of funds to pay such obligations. For the State’s outstanding voter-approved general obligation bonds and bond anticipation notes and for revenue anticipation notes to which the State’s full faith and credit are pledged, money is appropriated fi’om the General Fund and, if necessary, to the General Fund from other funds, including the Permanent Fund, to the State Bond Committee to make all required payments of principal, interest, and redemption premium. For these full faith and credit obligations, the State legally is required to raise taxes if State revenues are not sufficient to make the required payments. The Governor’s appropriation bills also include separate subsections for appropriations for subject-to-appropriation obligations, such as outstanding capital leases and lease-purchase financings authorized by law, and for State "moral obligation" debt, appropriations to replenish debt service reserves in the event of a deficiency. Such appropriations are made from the General Fund or from appropriations transfen’ing to the General Fund money available in other funds such as the CBRF, the Po~ver Cost Equalization Fund, unencumbered funds of tile State’s public corporations, and the Permanent Fund Earnings Reserve. Appropriation Limits. The State Constitution does not limit expenditures but does provide for an appropriation limit and reserves one-third of the amount within the limit [br capital projects and loan appropriations. Because State appropriations have never approached the limit, tile reservation for capital projects and loan appropriations has not been a constraint. The appropriation limit does not include appropriations for Permanent Fund Dividends described below, appropriations of revenue bond proceeds, appropriations to pay general obligation bonds, or appropriations of funds received in trust from a non- State source for a specific purpose, inchlding revenues of a public enterprise or public corporation of the State that issues revenue bonds. In general, under the State Constitution, appropriations that do not qualil’y for an exception may not exceed $2.5 billion by more than the cumulative change, derived flom federal indices, in population and inflation since July 1. 1981. For fiscal year 2020, the Office of Management and Budget estimated the limit to be approximately $10.6 billion. The enacted fiscal year F-14 2021 budget includes approximately $3.6 billion in unrestricted General Fund revenue net of the appropriated dividend distribution. As shown in Table 4, unrestricted General Fund revenue increased to $2.4 billion in fiscal year 2018 and increased to $2.6 billion in fiscal year 2019 (excluding in fiscal year 2019 the Permanent Fund Earnings Reserve transfers). Unrestricted General Fund revenue was approximately $5.4 billion in fiscal year 2019 inclusive of the $2.7 billion Permanent Fund transfers. In fiscal year 2019, the State began appropriating amounts from the Permanent Fund Earnings Reserve to the General Fund as unrestricted General Fund revenue, which significantly diminishes the percentage of unrestricted revenue that petroleum-related revenue represents. The enacted fiscal year 2021 budget includes approximately $3.1 billion in transfers from the Permanent Fund Earnings Reserve to the General Fund as unrestricted revenue. This shift of classification of revenue of the Permanent Fund from restricted to unrestricted was incorporated into the State’s revenue projections in Table 4. [Remainder of page intentionally left blank.] F-15 Table 4 State of Alaska Total Unrestricted General Fund Revenue, ANS West Coast Oil Price, and ANS Oil Production Fiscal Years Ended June 30, 2010 - 2019 and Forecast for Fiscal Years Ending June 30, 2020 - 2029 Total Unrestricted General Fund Revenue Fiscal Year ($ millions) 2010 $5,513 2011 7,673 2012 9,485 2013 6,929 2014 5,390 2015 2,257 2016 1,533 2017 1,355 2018 2,414 2019 5,350 ANS West Coast ANS Oil Production Oil Price (thousands of barrels S/bahel) per day) $ 74.90 642.6 94.49 599.9 112.65 579.4 107.57 531.6 107.57 530.4 72.58 501.0 43.18 514.7 49.43 526.4 63.61 518.5 69.46 496.9 Projected¢~ 2020 4,522 51.65 486.4 2021 4,244 37.00 486.5 2022 4,330 41.00 458.0 2023 4,560 44.00 438.2 2024 4,687 46.00 433.2 2025 4,751 48.00 448.9 2026 4,801 49.00 457.0 2027 4,904 50.00 466.2 2028 5,089 51.00 479.0 2029 5,266 53.00 491.0 The values for fiscal years 2020 through 2029 use the projections included in the Spring 2020 Revenne Forecast, and are subject to change. Fiscal year 2019 includes $2.7 billion in transfers fi’om the Permanent Fund Earnings Reserve to the General Fuud as unrestricted revenne. The forecast period includes projections for the transfers fiom the Permanent Fund Earnings Reserve to the General Fund for unrestricted General Fund expenditures, including the Permanent Fnud Dividend, based on SB 26. Source: 2010 Ihrot¢gh 2019 Fall Revenue Sources Books and Spring 2020 Revemte t7orecasl, Tax Division. The State has historically provided fiscal stability by fo~-ward funding or endowing programs, including the method used by the State to fund K-12 education. The State’s constitutionally based obligation tbr K-12 education has been one of the largest single recurring budget line items in the State’s budget. See "Public Debt and Other Obligations of the State- State-Supported Debt- State-Supported Municipal Debt Eligible for State Reimbursement" below. The enacted fiscal year 2021 budget includes approximately $3.6 billion in unrestricted General Fund revenue net of the permanent fund dividend distribution, and approximately $4.5 billion in total F-16 unrestricted General Fund operating and capital budget appropriations. The enacted fiscal year 2021 budget includes approximately $3. l billion in transfers fi’om the Permanent Fund Earnings Reserve to the General Fund as unrestricted revenue. Of the $3.1 billion in transfers for fiscal year 2021, approximately $0.7 billion has been appropriated for the Permanent Fund Dividend transfers, and approximately $2.4 billion has been appropriated for governmental use. In fiscal year 2020, including the use of Perlnanent Fund earnings authorized in SB 26, the deficit is projected to be approximately $1.1 billion (based on information available as of the Spring 2020 Revenue Forecast; Source: Office of Management and Budget, Enacted FY2021 Fiscal Summary, revised April 28, 2020). Fiscal year 2021 will be the sixth consecutive fiscal year that unrestricted General Fund capital budget appropriations have been under $200 million, compared to $608 million in fiscal year 2015. The State’s fiscal year 2021 unrestricted General Fund capital budget is approximately $120.5 million, with a total capital budget of approximately $1.2 billion (Source: Office of Management and Budget, Enacted FY2021 Fiscal Summary, revised April 28, 2020). Government Funds Because the State is dependent upon taxes, royalties, fees, and other revenues that can be volatile, the State has developed a fiamework of constitutionally and statutorily restricted revenue that is held in a variety of reserve funds to provide long-term and short-term options to address cash flow mismatches and budgetary deficits. The State Constitution provides that with three exceptions, the proceeds of State taxes or licenses "shall not be dedicated to any special purpose." The three exceptions are when required by the federal government for State participation in federal programs, any dedication existing before statehood, and when provided by the State Constitution, such as restricted for savings in the Permanent Fund or the CBRF. Current State funding options available on a statutory basis include General Fund unrestricted revenue (which pursuant to SB 26 includes annual transfers from the Permanent Fund Earnings Reserve), use of the earnings or the principal balance of the SBRF, borrowing restricted earnings revenue or principal balance from the CBRF, use of the statutorily restricted oil revenue currently flowing to the Permanent Fund, and use of the unrestricted earnings revenue of the Pen-nanent Fund. To balance revenues and expenditures in a time of financial stress, each of these funds can be drawn upon, following various protocols. The CBRF may be accessed with a majority vote of the Legislature following a year- over-year total decline in total revenue available for appropriation, or in any year by a three-quarters vote of both houses of the Legislature. A majority vote of the Legislature is needed to appropriate from the SBRF and fl’om the Permanent Fund Earnings Reserve. The General Fund. Unrestricted State revenue is annually deposited in the General Fund, which serves as the State’s primary operating fund and accounts for most of the State’s unrestricted financial resources. The State has, however, created more than approximately 55 subfunds and "cash pools" within the General Fund to account for funds allocated to particular purposes or reserves, including the CBRF, the SBRF, an Alaska Capital Income Fund, and a debt retirement fund. In terms of long-term and short- term financial flexibility, the CBRF and the SBRF (subfunds within the General Fund) have been of particular importance lo the State. The Cot~stitutio~tal Budget Reserve Fumi. The State Constitution requires that oil and gas and mineral dispute-related revenue be deposited in the CBRF. The State Constitution provides that other than money required to be deposited in the Permanent Fund and the Public School Trust Fund, all money received by tl~e State after July 1, 1990 as a result of the termination, through settlement or otherwise, of an administrative proceeding or of litigation involving mineral lease bonuses, rentals, royalties, royalty sale proceeds, federal mineral revenue sharing payments or bonuses, or involving taxes imposed on F-17 mineral income, production, or property, are required to be deposited in the CBRF. Money in the CBRF may be appropriated (i) for any public purpose, upon the affirmative vote of three-fourths of each house of the Legislature; or (ii) by majority vote if the amount available to the State for appropriation for a fiscal year is less than the amount appropriated for the previous fiscal year; however, the amount appropriated may not exceed the amount necessary, when added to other funds available for appropriation, to provide for total appropriations equal to the amount of appropriations made in the previous calendar year for the previons fiscal year. The State Constitution also provides that until the amount appropriated fi’om the CBRF is repaid, excess money in the General Fund at the end of each fiscal year must be deposited in the CBRF. The State historically has borrowed from the CBRF as part of its cash management plan to address timing mismatches between revenues and disbursements within a fiscal year and also to balance the budget when necessary at the end of the fiscal year. Prior to draws in fiscal years 2015, 2016, 2017, 2018, and 2019, the Legislature last appropriated fnnds from the CBRF in fiscal year 2005. All borrowing from the CBRF was completely repaid in fiscal year 2010 and no borrowing activity from the CBRF occurred during fiscal years 2011, 2012, 2013, or 2014. The fiscal year 2015 capital budget approved by the Legislature included a $3 billion transfer from the CBRF to the Public Employees Retirement System ("PERS") and Teachers Retirement System ("TRS"). PERS received $1 billion and TRS received $2 billion. This transfer resulted in a liability of the General Fund. Additional amounts were appropriated from the CBRF to the General Fund during fiscal years 2016, 2017, 2018, and 2019, to fund shortfalls between State revenue and General Fund appropriations. The total net amount appropriated from the CBRF since fiscal year 2015 as of June 30, 2019 was $9.1 billion. The State’s fiscal year 2020 comprehensive annual financial report ("CAFR") is anticipated to be released in December 2020. Pursuant to the State’s fiscal year 2019 CAFR, the June 30, 2019, unassigned fund balance of the CBRF was approximately $4.2 billion. The State’s enacted fiscal year 2021 unrestricted General Fund budget contains appropriations from the CBRF in an amount necessary to balance revenue and General Fund appropriations during the fiscal year estimated at approximately $960.4 million (based on information available as of the Spring 2020 Revenue Forecast; Source: Office of Management and Budget, Enacted FY2021 Fiscal Summary, revised April 28, 2020). The asset balance in the CBRF as of June 30, 2019, was approximately $1.8 billion, including earnings of approximately $74.8 million. General Fund asset balances listed as of June 30 may include borrowings from the CBRF for future fiscal year operating requirements. As of June 30, 2018, the asset balance was approximately $2.4 billion, with earnings of approximately $47.2 million; as of June 30, 2017, the asset balance was approximately $3.9 billion, with earnings of approximately $94.2 million; as of June 30, 2016, the asset balance was approximately $7.3 billion, with earnings of approximately $138.3 million; and as of June 30, 2015, the asset balance was approximately $10.1 billion, with earnings of approximately $197.7 million. Tite Statutory Budget Reserve Fumi. The SBRF has existed in the State’s accounting structure since 1986. When funded, the SBRF is available lbr use lot" legal purposes by m~iority vote of the Legislature and with approval by the Governor. If the unrestricted amount available for appropriation in the fiscal year was insufficient to cover General Fund appropriations, the amount necessary to balance revenue and General Fund appropriations or to prevent a cash deficiency in the General Fund was appropriated fiom the SBRF to the General Fund. For fiscal year 2015, this resulted in a year-end transfer fl’om the SBRF to the General Fund of approxilnately $2.5 billion. As of June 30. 2015, the SBR[: held approximately $288 million. Article IX, Section 17(d) of the Alaska Constitution provides that the amount of money in the General Fund available tbr appropriation at the end of each succeeding fiscal F-18 year is to be deposited in the CBRF until the amount appropriated fl-om the CBRF is repaid. For fiscal year 2016, this resulted in a year-end sweep fiom the SBRF to the General Fund for transfer to the CBRF in the amount of $288 million. The available fund balance of the SBRF, as of June 30, 2019, was zero. Any earnings on the SBRF are considered unrestricted investment revenue and flow to the General Fund. The Alaska Permanent Fund. The Permanent Fund was established by a voter-approved constitutional amendment that took effect in February 1977. The amendment provides that "at least twenty-five percent of all mineral lease rentals, royalties, royalty sale proceeds, federal mineral revenue sharing payments and bonuses received by the State shall be placed in a permanent fund, the principal of which shall be used only for those income-producing investments specifically designated by law as eligible for permanent fund investments" and that "all income from the permanent fund shall be deposited in the General Fund unless otherwise provided by law." In 1980, legislation was enacted that provided for the management of the Permanent Fund by the APFC, a public corporation within the DOR managed by a board of trustees. The same legislation modified the contribution rate to the Permanent Fund from 25 percent (the minimum constitutionally mandated contribution) to 50 percent of all mineral lease rentals, royalties, royalty sale proceeds, net profit shares, federal mineral revenue sharing payments, and bonuses received by the State from mineral leases issued after December 1, 1979 or, in the case of bonuses, after May 1, 1980. The statutory contribution rate was changed back to 25 percent by legislation as of July 1, 2003 but then returned to 50 percent as of October 1, 2008. In fiscal years 2018 and 2019, only the constitutionally required 25 percent of royalties were deposited into the Permanent Fund. For fiscal year 2019, State oil and mineral revenues deposited in the Permanent Fund were $385 million, compared to $353 million in fiscal year 2018, $365 million in fiscal year 2017, $284 million in fiscal year 2016, and $600 million in fiscal year 2015. In addition to these constitutionally and statutorily mandated transfers to the Permanent Fund, the Legislature has made special appropriations from the General Fund to the Permanent Fund several times, totaling in the aggregate approximately $2.7 billion as of June 30, 2019. The Permanent Fund tracks earnings on a basis compliant with statements pronounced by the Governmental Accounting Standards Board ("GASB’) in the compilation of the financial statements of the Permanent Fund. Fund balance consists of two parts: (1)plincipal, which is non-spendable, and (2) earnings reserve, which is spendable with an appropriation by the Legislature. By statute, only realized gains are deposited in the earnings reserve. Unrealized gains and losses associated with principal remain allocated to principal. Because realized gains deposited in the earnings reserve are invested alongside the principal, however, the unrealized gains and losses associated with the earnings reserve are spendable with an appropriation of the Legislature. Pursuant to legislation enacted in 1982, annual appropriations are made fl-om the Permanent Fund Earnings Reserve, first for dividends to qualified Alaska residents and then for inflation proofing. Between 1982 and 2019, $25.7 billion of dividends were paid to Alaska residents and $17.2 billion of Permanent Fund income has been added to principal for inflation proofing; for fiscal year 2015, the inflation proofing transfer was S624 million, up fi’om the fiscal year 2014 amount of $546 million. For fiscal years 2016. 2017, and 2018, there were no appropriations and therefore no transfers from the earnings reserve to principal for inflation proofing. The amount calculated under statute for fiscal year 2019 inflation proofing, $989 million, provided for in the enacted fiscal year 2019 operating budget, was appropriated fi-om the earnings reserve to the principal of the Permanent Fund to offset the effect of inllation on ~he principal for fiscal year 2019. The State’s fiscal year 2020 budget included an appropriation of approximately $4.8 billion fi’om the earnings reserve to the principal of the Permanent Fund. The 2018 dividend paid in fiscal year 2019 was S1,606 per qualified resident, and the 2019 dividend to be paid in fiscal year 2020 is $992 per qualified resident. In addition to the statutorily directed F-19 inflation proofing transfers, the Legislature has made special appropriations fi’om the earnings reserve to principal totaling approximately $4.2 billion as of June 30, 2019. If any income remains after these transfers (except the portion transferred to the Alaska Capital Income Fund as described below), it remains in the Permanent Fund Earnings Reserve as undistributed income. The Legislature may appropriate funds fl’om the earnings reserve at any time for any other lawful purpose. The principal portion of the Permanent Fund, approximately $47.8 billion as of June 30, 2019, up fi’om approximately $46.0 billion as of June 30, 2018, may not be spent without amending the State Constitution. The earnings reserve, approximately $18.5 billion as of June30, 2019 (subsequent to June 30, 2019, with enacted legislation in the fiscal year 2020 budget, this amount includes approximately $2.9 billion committed to the General Fund and approximately $4.8 billion committed to the principal of the Permanent Fund for inflation proofing), down from approximately $18.9 billion as of June 30, 2018, may be appropriated by a majority vote of the Legislature. During fiscal years 1990 through 1999, the Permanent Fund received dedicated State revenues from settlements of a number of North Slope royalty cases (known collectively as State v. Amerada Hess). The total of the settlements and retained income thereon, as of June 30, 2019, ~vas approximately $424.4 million. Earnings on the settlements are excluded from the dividend calculation and are not subject to inflation proofing in accordance with State law, and beginning in 2005, the settlement earnings have been appropriated to the Alaska Capital Income Fund, a subfund within the General Fund. The Alaska Capital Income Fund realized earnings on settlement principal of approximately $22.3 million as of June 30, 2019, down from approximately $43.4 million as of June 30, 2018. As previously discussed, SB 26 created a percent of market value to provide a sustainable draw on the Permanent Fund Earnings Reserve for transfer to the General Fund as unrestricted revenue. [Relnainder of page intentionally left blank.] F-20 Table 5 State of Alaska Available Funds and Recurring and Discretionary General Fund Expenditures Fiscal Years Ended June 30, 2010 - 2019 Permanent General Recurring& Unrestricted EndingSBRF EndingCBRF Fund ANSOil Purpose Discretionary Revenue Reserves Reserves Earnings Productiou Unrestricted General Fund Surplus/ Available Available Reserve (thousands Fiscal Revenue Expenditures (Deficit) Balance Balance Balance Oil Price of barrels Year (S rail) ($ rail) ($ rail) ($ rail) ($ rail) iI) ($ rail) (S/barrel) per day) 2010 $5,515 $4,995 $ 520 $1,000 58,664 $1,210 S 74.90 642.6 2011 7,673 6,355 1,318 1,248 10,330 2,308 94.49 599.9 2012 9,485 7,252 2,233 2,683 10,642 2,081 112.65 579.4 2013 6.929 7,455 (526) 4,711 12) 11.564 4,054 107.57 531.6 2014 5,394 7,314 (1,920) 2,791 12) 12,780 6,211 107.57 530.4 2015 2,257 4,760 (2,503) 13~ 288 121 10, I Ol 7,162 72.58 501.0 2016 1,533 5,213 (3,680) ~ _ !~ 7,331 8,570 43.18 514.7 2017 1,354 4,498 (3,144) ~3~ - ~-~) 3,896 12,816 49.43 526.4 2018 2,414 4,489 (2,075) ~3) - ~-’~ 2,360 18,864 14i 63.61 518.5 2019 5,350 ~s~ 4,889 461 ~) _ ~2~ 1,832 18.481 [4) 69.46 496.9 (1) The CBRF available balance represents the historical asset values. (2) Includes available balance through net transfer fi’om the SBRF to the General Fund reconciled at the release of the State CAFR for fiscal years 2013 through 2019. (3) The SBRF was used to balance the fiscal year 2015 deficit, with $288 million remaining as of June 30, 2015. Article IX, Section 17(d) of the Alaska Constitution provides that the amount of money in the General Fund available for appropriation at the end of each succeeding fiscal year is to be deposited in the CBRF until the amount appropriated is repaid. The available fund balance of the SBRF as of June 30, 2019, was zero. (4) Inclndes alr~onnt committed for the fiscal year 2019 and 2020 General Fuud lra~lsfers pursuant to SB 26, as ~vell as appropriation commitments for inflation proofing. (5) Includes Permanent Fnnd Earuings Reserve transfer prior 1o dividend paymeuls during fiscal year 2019 of approximately $1.02 billion. Source." State qf Alaska Department qf Revemte. Revenue Forecasts The State regularly prepares revenue tbrecasts for planning and budgetaU purposes. Of necessity, such forecasts include assumptions about events that are not within the State’s control. The forecast oil production volumes include only production expected fi-om projects currently under development or evaluation. The forecast does not include any revenues that could be received if a natural gas pipeline is constructed. In making its forecasts, the State makes assumptions about, among other things, the demand tot- oil and national and international economic factors and assumes that the Legislature will not amend current laws to change materially the sources and uses of State revenue and that no inajor calamities such as ea,thquakes or catastrophic damage to TAPS will occur. Portions of TAPS are located in areas that have experienced and may in the future again experience major earthquakes. Actual revenues and expenditures will vary, perhaps materially, from year to year, particularly if any one or more of the assumptions upon which the State’s forecasts are based proves to be incotTect or if other unexpected events occur. The State’s most recent forecast is set forth in the Spring 2020 Revenue Forecast. The State will next update its lbrecast in the Fal! 2020 Revenne Sources Book, updating the prior forecasts, which is anticipated to be released m December 2020. The State has provided certain estimates for fiscal year 2020 and 2021 based on int’ormation available as of the Spring 2020 Revenue Forecast, as well as certain F-21 attdited results for fiscal year 2019 for the CBRF and the APFC. See "Government Funds" above for a description of some of the actions the State can take when revenues prove to be lower than expected. The State has customarily restricted certain revenue sources each fiscal year by practice. Such revenue is nonetheless available for appropriation. Table 6 provides a summary of the State’s most recent forecast tbr revenues subject to appropriation in fiscal years 2020 through 2025. Table 6 State of Alaska Revenues Subject to Appropriation Forecast Summary for Fiscal Years 2020 through 2025 (millions) 2020 2021 2022 2023 2024 2025 Petroleum Revenue Unrestricted GeneralFund $1,098.8 $ 716.6 $ 805.4 $ 897.0 $ 941.5 $ 971.7 Royalties to Alaska Permanent Fund beyond 25% dedication ~2~ 62.9 43.7 45.4 45.7 49.0 56.3 Tax and Royalty Settlements to CBRF 235.0 75.0 50.0 50.0 50.0 50.0 Subtotal PetroleumRevenue $1,396.7 $ 835.3 $ 900.8 $ 992.7 $1,040.5 $1,078.0 Non-Petroleum Revenue Unrestricted GeneralFund S 454.2 $ 411.5 $ 442.6 $ 456.3 $ 469.9 $ 472.7 Designated General Fund 416.4 413.4 432.8 434.9 437.1 439.0 Royalties to Alaska Permanent Fund beyond 25% dedication/-~t 3.2 3.8 3.8 3.8 3.8 3.9 Tax and Royalty Settlements to CBRF - - - Subtotal Non-Petroleum Revenue $ 873.8 $ 828.6 $ 879.2 $ 895.0 $ 910.7 $ 915.6 Investment Revenue Unrestricted General Fund $3,116.3 $3,082.2 $3,206.9 $ 3,275.6 $3,306.3 Designated General Fund 38.2 38.9 39.6 40.3 41.0 Constitutional Budget Reserve Fund 33.1 9.5 5.4 7.5 9.6 I 1.6 Subtotal Investment Revenne $2,960.0 $3.164.0 $3,126.6 $3,254.0 $3,325.5 $3,359.0 Total Revenue Subject to Appropriation $ 4,827.9 $ 4,906.6 $ 5,141.7 $ 5,276.7 $ 5,352.6 $2,969.4 (42.4) $ 5,230.4 (1) This table presents only the largest kno\vn categories of current year funds subject to appropriation. A comprehensive review of all accounts in the State acconnting system would likely reveal additional revenues subject to appropriation beyond those identified here. (2) Estimated based on deposit in Permanent Fund minus 25 percent of total royalties. In fiscal years 2018 and 2019, only the constitutionally required 25 percent of royalties \vere deposited into the Permanent Fund. Source. Spring 2020 Revemte Forecaxt. Tax Divixion. Public Debt and Other Obligations of the State State debt includes general obligation bonds and revenue anticipation notes, and State-supported debt inchtdes lease-purchase financings and revenue bonds. The State also provides guarantees and other support tbr certain debt and operates the SDRP and the Transportation and lnfl-astructure Debt Service Reimbursement Program (the "TIDSRP"). Other than the Veterans" Mortgage Program, these programs F-22 do not constitute indebtedness of the State but do provide, annually on a subject-to-appropriation basis, financial support for certain bonds of local governments and obligations of State agencies. Outstanding State Debt. State debt includes general obligation bonds and revenue anticipation notes. The State Constitution provides that general obligation bonds nmst be authorized by law and be ratified by the voters and permits authorization of general obligation bonds only for capital improvements. The amount and timing of a bond sale nmst be approved by the State Bond Committee. For both general obligation bonds and revenue anticipation notes, the fnll faith, credit, and resources of the State are pledged to the payment of principal and interest. If future State revenues are insufficient to make the required principal and interest paylnents, the State is legally required to raise taxes to provide sufficient funds for this purpose. Approximately $670.1 million of general obligation bonds were outstanding as of June 30, 2019. See "Summary of Outstanding Debt" and Tables 7 and 8 below. In November 2012, voters approved $453,499,200 in general obligation bonds for the purpose of design and construction of State transportation projects. To date, the State has obtained $343,150,958 in funding under the $453,499,200 authorization, leaving $110,348,242 of unissued authority. The State anticipates utilizing all or a portion of the remaining authority during fiscal year 2021. The following other debt and debt programs of the State were outstanding as of June 30, 2019, except as otherwise noted. State Guaranteed Debt. The only propose for which State guaranteed debt may be issued is for payment of principal and interest on revenue bonds issued for the Veterans Mortgage Program by the Alaska Housing Finance Corporation ("AHFC") tbr the purpose of purchasing mortgage loans made for residences of qualifying veterans. These bonds are also general obligation bonds of the State, and they must be authorized by law, ratified by the voters, and approved by the State Bond Committee. In November 2010, voters approved $600 million of State guaranteed veterans’ mortgage bonds, and the total unissued authorization was $584.6 million as of June 30, 2019. As of June 30, 2019, approximately $106.8 million of State guaranteed debt was outstanding. State-Supported Debt. State-supported debt is debt for which the ultimate source of payment is, or may include, appropriations fiom the General Fund. The State does not pledge its full faith and credit to State-supported debt, but another public issuer may have pledged its fnl! faith and credit to it. State- supported debt is not considered "debt" under the State Constitution, because the State’s payments on this debt are subject to annual appropriation by the Legislature. Voter approval of such debt is not required. State-supported debt includes lease-purchase financing obligations (structured as certificates of participation ("COPs")) and capital leases the State has entered into with respect to the Linny Pacillo Parking Garage (with AHFC) and the Goose Creek Correctional Center (with the Matanuska-Susitna Borough). Approximately $215.2 million of State-supported debt was outstanding as of June 30, 2019. State-Supported U~fimded Actuarially Assumed Liability (UAAL). In 2008, Senate Bill 125 became law, requiring that the State fund any actuarially determined employer contribution rate above 22 percent for the Public Employees’ Retirement System ("PERS") or 12.56 percent ~br the Teachers’ Retirement System ("TRS") out of the General Fund, to the extent the actuarially determined employer contribution rate exceeds payment of (i) the employer normal cost and (ii)required employer contributions for retiree major medical insurance, health reimbursement arrangement plans, and occupational death and disability benefits. This change was designed to address stress municipal employers were experiencing due to high acmarial ly determined percentage of payroll amotlnts to pay for actuarially assumed unfunded liabilities of the retirement systems. In 2015, GASB Statement No. 68 ("GASB 68") ~vas enacted, updating reporting and disclosure requirements related to pension-related liabilities. One of the key changes was requiring a government that is committed to making payments on a F-23 pension system’s unfunded actuarially assumed liability ("UAAL") on behalf of another entity to record the liability as a debt of the government making the payment. As a result of GASB 68, $5.8 billion of long-term debt was reflected in the State’s CAFR for fiscal year 2015 for a total of $6.0 billion of UAAL. This liability will be paid through fiscal year 2039 with annual payments determined based on a variety of actuarial assumptions, and the evolving experience as it occurs. Both the current balance of liabilities as well as the magnitude in change in liability flom future outcomes highlight the impact that PERS and TRS funding needs have on the State. Effective January 11, 2019, the Alaska Retirement Management Board voted to change the actuarially assumed rate of investment return to 7.38 percent fi-om 8.00 percent, along with several other actuarial assumptions. According to the PERS and TRS CAFR, as of June 30, 2019, a one percent reduction in the rate of return on investments to 6.38 percent would increase the net PERS pension and OPEB liability by approximately $2.8 billion and the TRS pension and OPEB liability by approximately $1.1 billion. As long as the Senate Bill 125 statutory fiamework is in place, the State is statutorily obligated to obtain amounts required to meet all actuarially determined employer contribution rates for PERS employers above 22 percent and TRS employers above 12.56 percent (subject to the exceptions described above). This payment is subject to annual appropriation. The UAAL for PERS and TRS as of June 30, 2018, was approximately $6.7 billion, based on the most recent June 30, 2018, actuarial valuation reports for PERS and TRS. State-Supported Municipal Debt Eligible Jbr State Reimbursement. The State administers two programs that reimburse municipalities for municipal debt: the SDRP and the TIDSRP. These programs provide for State reimbursement of annual debt service on general obligation bonds of municipalities for the SDRP and a combination of general obligation and revenue bonds of authorized participants in the TIDSRP. The State may choose not to fund these programs in part or whole. DEED administers the SDRP, which was created by law in 1970. The SDRP allows municipalities to apply, and if structured correctly, be eligible for reimbursement on up to 100 percent of the debt service on general obligation bonds issued for school construction. All nmnicipal bonds are required to be authorized as general obligation bonds of the municipality, providing the ultimate source of payment commitment. The SDRP has been partially funded in a number of years. Access to the SDRP was restricted during the 1990s due to State budgetary pressure. Beginning in the early 2000s, and through 2014, the program was generally available for any qualified municipal project at reimbursement rates of 60 to 70 percent of debt service. In 2015, the Legislature passed a moratorium on the SDRP and eliminated DEED’s authority to issue agreements to reimburse debt from school bonds that voters approved after January 1, 2015, and before July 1, 2020. In addition, in June 2016, the Governor signed the fiscal year 2017 budgets translnitted by the Legislature and exercised his line-item veto authority to reduce fiscal year 2017 appropriations by approximately $1.29 billion, including a 25 percent reduction in the SDRP. The SDRP was funded at 100 percent of the authorized amount for fiscal years 2018 and 2019. The State’s fiscal year 2020 budget reduced funding by 50 percent of the authorized SDRP amount, and the enacted fiscal year 2021 budget reduced funding by 100 percent. As of June 30, 2019, State-supported SDRP debt was $704.8 million. The Department of Transportation and Public Facilities and the Alaska Energy Authority administer TIDSRP. The program currently includes University of Alaska revenue bonds, seven municipalities’ general obligation bonds, and two electric associations’ revenue bonds. There are no additional authorized participants in TIDSRP and no efforts have been made to add to the program since creation in 2002. The State’s enacted budgets for fiscal years 2020 and 2021 elilninate all l’unding t~or the TIDSRP. As of June 30, 2019, State-supported T1DSRP debt was approximately $22.1 million. F-24 The Governor indicated that funding from the CARES Act would be made available to municipalities to pay for COVID-19 impacts and mute the impact of these reductions. The Governor proposed distribution ot~. and the Legislature approved, $562.5 million of CARES Act funding to municipalities in the State. State-Supported Toll Revenue Bonds. In 2014, the Legislature authorized funding of the proposed Knik Arm Crossing with a combination of (i) up to $300 million of State-supported toll revenue bonds subordinated to a Transportation lnfl-astrncture Finance and Innovation Act ("TIFIA") loan, (ii) a maximized loan under TIFIA of not less than $300 million and estimated to be approximately $350 million, and (iii) up to $300 million of appropriations of additional Federal Highway Administration funds to the project. The State expected to pay debt service on the State toll revenue bonds using a combination of annual State appropriations and toll collections that exceeded the TIFIA loan payment. As of July 2016, all spending on the Knik Arm Crossing was discontinued. State Moral Obligation Debt. State moral obligation debt consists of bonds issued by certain State agencies or authorities that are secured, in part, by a debt service reserve fund benefited by a discretionary replenishment provision that permits, but does not legally obligate, the Legislature to appropriate to the particular State agency or authority the amount necessary to replenish the debt service reserve fund up to its funding requirement (generally the maximum amount of debt service required in any year). State moral obligation debt is payable in the first instance by revenues generated from loan repayments or by the respective projects financed from bond proceeds. Among those State agencies that have the ability to issue State moral obligation debt are: Alaska Aerospace Development Corporation ("AADC"), which has not issued any debt; Alaska Energy Authority ("AEA"); AHFC; Alaska Industrial Development and Export Authority ("AIDEA"); Alaska Municipal Bond Bank Authority ("AMBBA"); and Alaska Student Loan Corporation ("ASLC"). Approximately $1,229.5 million of State moral obligation debt was outstanding as of June 30, 2019. State and University Revemte Debt. This type of debt is issued by the State or by the University of Alaska but is secured only by revenues derived from projects financed fiom bond proceeds. Revenue debt is not a general obligation of the State or of the University and does not require voter approval. Such debt is authorized by law and issued by the State Bond Committee or the University of Alaska for projects approved by the Commissioner of Transportation and Public Facilities or by the University of Alaska. This type of debt includes Sportfish Revenue Bonds, International Airport System Revenue Bonds, various University Revenue Bonds, Notes, and Contracts, Clean Water and Drinking Water Fund Bonds, and Toll Facilities Revenue Bonds. As of June 30, 2019, there was $647.8 million of State and University revenue debt outstanding, consisting of $287.4 million of University of Alaska Revenue Bonds, Notes, and Contracts, $13.9 million of Sportfish Revenue Bonds, and $346.5 million of Alaska International Airport System Revenue Bonds. State Agenty Debt. State agency debt is secured by revenues generated from the nse of bond proceeds or the assets of the agency issuing the bonds. This debt is not a general obligation of the State nor does the State provide security for the debt in any other manner, i.e., by appropriations, guarantees, or moral obligation pledges. As of June 30, 2019, there was $440.4 million aggregate principal amount of State agency debt outstanding, consisting of $49.6 million of AHFC obligations, $9.9 million of Bond Bank Coastal Energy hnpact Program Bonds payable to the National Oceanic and Atmospheric Administration, $78.7 million of Alaska Railroad Notes, and $302.2 million of obligations of the Northern Tobacco Securitization Corporation. State Agenty Colhtteralized or lnsured Debt. As security for State agency collateralized or insured debt, the particular State agency pledges mortgage loans or other securities as prilnary security which, in turn, may be 100 percent insured or guaranteed by another party with a superior credit standing. F-25 This upgrades the credit rating on the debt and lowers the interest cost and makes it less likely that the State will assume responsibility for the debt. As of June 30, 2019, the total principal amount outstanding of State agency collateralized or insured debt was approximately $2,382.6 million, consisting of approximately $2,285.7 million issued by AHFC and $96.9 million issued by AIDEA. Potential State-Snpported Pension Obligation Bonds. Through the Alaska Pension ObLigation Bond Corporation (the "Corporation"), a public corporation created in 2008 within the DOR, the State initially authorized the issuance of up to $5.0 billion of bonds and/or entry into contracts with governmental employers to finance the payment by governmental employers of their shares of the unfunded accrued actuarial liabilities of the State retirement systems. The State is required by Senate Bill 125, enacted in 2008, to make supplernental contributions to the State retirement system defined benefit plans to reduce the plans’ unfunded accrued actuarial liabilities. In 20!6, the Board of Directors of the Corporation authorized the Corporation to issue up to $3.5 billion of pension obligation bonds to finance for the State a portion of its statutorily required contributions to PERS and TRS. The Corporation has not issued bonds, and there is no current plan to issue bonds at this time. In 2018, the Legislature reduced the authorization to $1.5 billion. If the Corporation were to issue pension obligation bonds, such bonds would be payable from payments to be made by the State, acting by and through the Depamnent of Administration, ~vhich ~vould be subject to annual appropriation by the Legislature. Potential State-Supported Tax Credit Certificate Bonds. In 2018, AS 37.18.010 was enacted creating the Alaska Tax Credit Certificate Bond Corporation (the "ATCCBC") for the purpose of selling bonds for up to $1 billion to provide for the purchase of certain State tax credits. The ATCCBC bonds would be considered State-supported debt as they would be secured by agreements entered into by other State agencies that are subject to annual appropriation. The legislation authorizing the ATCCBC is subject to a legal challenge related to the legal authority for ATCCBC to issue its bonds, which will need to be satisfactorily resolved prior to any bond issuance by the ATCCBC. The ATCCBC has not issued any bonds. [Remainder of page intentionally left blank.] F-26 Summary of Outstanding Debt. Table 7 lists, by type, the outstanding State-related debt as of June 30, 2019, except as otherwise noted. Table 7 State of Alaska Debt and State-Related Debt by Type as of June 30, 2019 ($ millions) State Debt State of Alaska General Obligation Bonds State Guarauteed Debt Alaska Housing Finance Corporation State Guaranteed Bonds (Veterans’ Mortgage Program) State Supported Debt Certificates of Participation Lease Revenue Bonds with State Credit Pledge and Paylnent Total State Supported Debt State Supported Municipal Debt State Reimbursement of Municipal School Debt Service Slate Reimbursement of Capital Projects Total State Supported Muuicipal Debt Pension System Unfunded Actuarial Accrued Liability (UAAL) Public Employees’ Retirement System UAAL Teachers’ Retirement System UAAL Total UAAL State Moral Obligation Debt Alaska Municipal Bond Bank: 2005, 2010, & 2016 General Resolution General Obligation Bonds Alaska Energy Authority: Power Revenue Bonds #1 through #8 Alaska Student Loan Corporation Education Loan Backed Notes Total State Moral Obligation Debt State Revenue Debt Sportfish Revenue Bonds International Airport System Revenue Bonds University of Alaska Debt University of Alaska Revenue Bonds University Lease Liabilily and Notes Payable lnslalhnent Contracts Total University of Alaska Debt Total State Revenue and University Debt Total debt Principal Interest to service to outstanding maturity maturity $ 670.1 $ 278.5 $ 948.6 106.8 54.9 161.7 22.4 6.5 28.9 192.8 73.6 266.4 215.2 80.1 295.3 704.8 201.4 906.2 22.5 9.7 32.2 727.3 211.1 938.4 5,147.0 N/A 5,147.0 1,520.0 N/A 1,520.0 6,667.0 N/A 6,667.0 1,111.1 539.4 t650.5 74.7 32.4 107.1 43.7 2.9 46.6 1,229.5 574.7 1,804.2 13.9 t.8 15.7 346.5 160.0 506.5 271.3 144.4 415.7 15.4 3.7 19.1 0.7 0.1 0.8 287.4 148.2 435.6 647.8 310.0 957.8 [Table 7 continues on next page] F-27 State Agency Debt Alaska Housing Finance Corporation: Commercial Paper Alaska Municipal Bond Bank Coastal Energy Loan Bonds Alaska Railroad Northern Tobacco Securitization Corporation 2006 Tobacco Settlement Asset-Backed Bonds Total State Agency Debt State Agency Collateralized or Insured Debt Alaska Housing Finance Corporation: Collateralized Home Mortgage Revenue Bonds & Mortgage Revenue Bonds: 2002 Through 2011 (First Time Homebuyer Program) General Mortgage Revenue Bonds II -2012 & 2016 Government Purpose Bonds 1997 & 2001 State Capital Project Bonds, 2002-2011 State Capital Project Bonds, II 2012-2018 Alaska Industrial Development and Export Authority: Revolving Fund Bonds Power Revenue Bonds, 2015 Series (Snettisham Hydro Project) Total State Agency Collateralized or Insured Debt Total State and State Agency Debt Municipal Debt School G.O. Debt Other G.O. Debt ~4) Revenue Debt Total Municipal Debt Debt Reported in More than One Category Less: State Reimbursable Municipal Debt and Capital Leases Less: State Reimbursable Mnnicipal School G.O. Debt Less: Alaska Municipal Bond Bank debt included in University debt Less: Alaska Municipal Bond Bank debt included in Municipal debt Total Deductions Due to Reporting in More than One Category Total Alaska Public Debt Principal outstanding Total debt Interest to service to maturity maturity 49.6 N/A $ 49.6 9.9 $ 2.1 12.0 78.7 10.2 88.9 302.2 387.2 689.4 440.4 399.5 839.9 694.1 312.6 1,006.7 346.4 164.3 510.7 105.2 22.0 127.2 27.7 2.3 30.0 1,112.3 451.0 1,563.3 39.7 11. t 50.8 57.2 24.7 81.9 2,382.6 988.0 3,370.6 13,086.7 1,052.1 N/A N/A 1,394.2 N/A N/A 872.5 N/A N/A 3,318.8 215.3) 704.8) (84.5) 893.7) ( ,898.3) $14,507.2 (1) "Interest to Maturity" and "Total Debt Service to Maturity" includes accretcd interest due at maturity ofS125.2 million. (2) Does not include defeased bonds. (3) From most recent .hme 30. 2018 actuarial valuation. (4) Other G.O. Debt and Revelme Debt derived from intbrmation available as orJanuary 31,2020. Source. 2019 - 2020 Alaska Public Debt Book, State qf Alaska. F-28 General Fund Supported Obligations. General Fund support is pledged and required for only a portion of the total outstanding public debt. General obligation bonds are unconditionally supported, and COPs and capital leases are sub.ject-to-appropriation commitments with associated obligations. The SDRP and TIDSRP provide discretionary annual payments to municipal issuers for qualified bonds of the municipalities that are eligible by statute to participate in the programs. Table 8 sets forth existing debt service on outstanding State-supported debt the State has provided from the General Fund for these outstanding obligations and the lbrecast support required to retire the outstanding obligations into the future. With the State’s fiscal year 2020 budget, the "Capital Project Reimbursements" column was reduced to zero. [Remainder of page intentionally left blank.] F-29 Fiscal Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Table 8 State of Alaska Payments on General Fund Paid Debt as of June 30, 2019 ($ millions) School Debt Statutory Debt State Lease / Capital Reimburse- Capital Project Pay~nent to Total Debt G.O.* Purchase Leases lu ment ~2) Reimbursement PERS/TRS ~3~ Service $ 89.3 $ 2.9 $ 19.7 $ 105.0 $ 4.5 $ 263.4 $ 484.8 77.8 2.9 l 9.7 97.6 4.5 300.2 502.7 77.0 2.9 19.5 95.4 3.6 338.6 537.0 66.5 2.9 19.5 82.6 3.6 317. I 492.1 66.4 2.9 19.5 83.0 3.6 318.7 494.1 66.2 2.9 19.5 67.6 3.6 322.4 482.2 61.3 2.9 19.5 57.9 3.6 326.3 471.6 61.1 2.9 19.5 48.0 2.8 _.~1.7 466.0 60.6 2.9 20.9 43.3 2.6 337.2 467.5 59.7 2.9 20.9 40.6 2.2 344.8 471.1 58.8 2.9 17.6 35.8 0.9 352.4 468.4 58.1 - 17.6 33.2 0.9 361.0 470.7 45.8 - 17.6 30.8 0.4 370.1 464.6 45.4 - 17.6 27.5 - 380.1 470.6 45.0 - 17.6 20.6 - 390.5 473.7 44.5 - - 18.1 - 401.9 464.5 20.9 - - 13.0 - 414.2 448.1 20.9 - - 5.6 - 426.8 453.3 0.5 - - 0.5 - 439.8 440.8 12.2 - - 0.3 - 453.9 466.5 ..... 468.4 468.4 (2) (3) Soll]’e(~." A prison and a parking garage have been financed with capital leases. Payments in fiscal years 2020 through 2038 are based on actual bond repayment schedules on file xvith DEED as of June 30, 2019. Based on PERS and TRS Actuarial Valuation Reports as of June 30, 2018. State G.O. debt service is net of federal subsidies on interest expense through 2038. 2019 - 2020 Alaska Public Debt Book, State of Alaska. P~(vment History. The State has never delhulted on its general obligation bond obligations nor has it ever failed to appropriate funds for any State-supported outstanding sccuritized lease obligations. State Debt Capacity. The State has historically used the ratio of debt service to revenue as a guideline for detertnining debt capacity of the State. This policy was established due to the State’s relatively small population and high per capita revenue due to oil resource-generated revenue. Historically the State’s policy has been that debt service should not exceed five percent of unrestricled revenue when considering only general obligation bonds and COPs that are State-supported. More recently, the State has included more discretionary General Fund supported obligations and programs, including the SDRP, TIDSRP, and certain capital leases. With the more inclusive funding, the State’s policy allows the annual payments on these items to range up to seven percent o[" unrestricted revenue. F-30 Fiscal Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 pr~ected 202O 2021 2022 2023 2024 2025 2026 2027 2028 2029 Table 9 State of Alaska Debt Service on Outstanding Obligations to Unrestricted Revenues Fiscal Years Ended June 30, 1996 - 2019 Forecast for Fiscal Years Ending June 30, 2020 - 2029 State G.O. Unrestricted Debt Revenues Service ($ lnillions) (%) $2,133.3 1.0% 2,494.9 0.7 1,825.5 O.8 1,348.4 0.7 2,081.7 0.1 2,281.9 0.0 1,660.3 0.0 1,947.6 0.0 2,345.6 0.8 3,188.8 1.5 4,200.4 1.1 5,158.6 0.9 10,728.2 0.4 State School Debt Stalutory Supported Total Slate Reimburse- Payment to Debt Service Debt Service merits PERS/TRS (%) (%) (%) (%) 0.5% 1.4% 3.7% - 0.4 1.0 2.5 - 0.6 1.3 3.4 - 1.1 1.8 4.6 - 0.9 1.0 3.1 - 0.7 0.7 2.3 - 1.3 1.3 3.3 - 1.1 1.1 2.7 - 0.9 1.7 2.6 - 0.7 2.2 2.2 - 0.6 1.7 1.9 - 0.5 1.4 1.7 - 0.3 0.6 0.8 - 5,838.0 0.8 5,512.7 0.9 7,673.0 0.7 9,485.2 0.8 6,928.5 1.1 5,390.0 1.4 2,256.0 3.3 1,533.0 4.0 1,355.0 6.1 2,413.5 3.7 5,349.8 1.7 0.6 1.3 1.6 0.8 1.7 1.7 0.6 1.3 1.3 0.4 1.3 1.1 0.6 1.7 1.6 0.7 2.1 2.0 1.6 4.9 5.2 2.3 6.3 7.6 2.3 8.3 6.7 1.1 4.8 4.6 0.4 2.1 2.0 5,049.4 1.5 5,059.0 1.5 5,071.4 1.3 5,206.9 1.3 5,335.5 1.2 5,481.0 1.1 5,588.0 1.1 5,749.0 1.1 5,893.4 1.0 6,071.7 1.0 Total Payments to Revenues (%) 5.2% 3.5 4.7 6.3 4.1 3.0 4.5 3.7 4.3 4.4 3.6 3.1 1.4 2.9 3.4 2.6 2.3 3.3 4.1 I0.1 13.9 15.0 9.5 4.2 0.4 2.0 2.0 5.9 10.0 0.4 2.0 2.0 6.7 10.6 0.4 1.8 1.7 6.3 9.7 0.4 1.7 1.7 6.1 9.5 0.4 1.7 1.3 6.0 9.0 0.4 1.5 1.1 6.0 8.6 0.4 1.5 0.9 5.9 8.3 0.4 1.5 0.8 5.9 8.1 0.4 1.4 0.7 5.9 8.0 0.3 1.3 0.6 5.8 7.7 SouJz’e. 2019 - 2020 Alaska Public Debt Book. State qf Alaska. F-31 [This page intentionally left blank.] APPENDIX G PROPOSED FORM OF CONTINUING DISCLOSURE CERTIFICATE The Alaska Municipal Bond Bank (the "lssner") executes and delivers this Continuing Disclosure Certificate (the "Disclosure Certificate") in connection with the issuance of $98,310,000 Alaska Municipal Bond Bank General Obligation and Refunding Bonds, 2020 Series One (the "Bonds"). The Bonds are being issued under the General Bond Resolution of the Issuer entitled "A Resolution Creating And Establishing An Issue Of Bonds Of The Alaska Municipal Bond Bank; Providing For The Issuance From Time To Time Of Said Bonds; Providing For The Paylnent Of Principal Of And Interest On Said Bonds; And Providing For The Rights Of The Holders Thereof," adopted July 13, 2005, as amended on August 19, 2009 (the "General Bond Resolution"), and Series Resolution No. 2020-01, adopted on April 29, 2020 (the "Series Resolution" and together ~vith the General Bond Resolution, the "Resolutions"). The Issuer covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. The Issuer is executing and delivering this Disclosure Certificate for the benefit of the Beneficial Owners of the Bonds, and to assist the Participating Underwriter in complying with Securities and Exchange Commission ("SEC") Rule 15c2-12(b)(5). Section 2. Definitions. In addition to the definitions set forth in the Resolutions, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the Issuer pursuant to, and as described in, Section 3 of this Disclosure Certificate. "Financial Obligation" shall mean, for purposes of the Listed Events set out in Section 5(a)(10) and Section 5(b)(8), a (i)debt obligation; (ii)derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term "Financial Obligation" shall not include municipal securities (as defined in the Securities Exchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule. "Fiscal Year" means the fiscal year of the Issuer (currently the 12-month period ending June 30), as such fiscal year may be changed fiom time to tirne as required by State law. "MSRB" means the Municipal Securities Rulemaking Board or any other entity designated or authorized by the SEC to receive reports pursuant to the Rule. Until other~vise designated by the MSRB or the SEC, filings with the MSRB are to be made through the Electronic Municipal Market Access ("EMMA") website of the M SRB, currently located at http:!/emma.msrb.org. "Official Statement" means the final official statement dated June 24, 2020 relating to the Bonds. "Participating Underwriter" means the original underwriter of the Bonds required to comply with the Rule in connection with the offering of the Bonds. ~’Rule" means Rule 15c2-12(b)(5) adopted by the SEC under the Securities Exchange Act of 1934, as amended fi-om time to time. Section 3. Provision of Annual Reports and Fiuancial Statements. Commencing with its Annual Report for Fiscal Year ending June 30, 2020, the issuer will provide to the MSRB, in a format as prescribed by the Rule: (a) Not later than 210 days after the end of each Fiscal Year, an Annual Report for the Fiscal Year. The Annual Report shall contain or incorporate by reference: (i) annual audited financial statements of the Issuer; (ii)a statelnent of authorized, issued and outstanding bonded debt of the Issuer; (iii)the Reserve Fund balance; and (iv) financial and operating data of Governmental Units that had an amount of bonds equal to or greater than twenty percent (20%) of all outstanding bonds under the General Bond Resolution of the type included in the Official Statement, if any, as of the end of the prior Fiscal Year. Any or all of these items may be included by specific reference to documents available to the public or the internet website of the MSRB or filed with the SEC. The Issuer shall clearly identify each such other document so incorporated by reference. The Annual Report may be submitted as a single document or as separate documents comprising a package, provided that audited financial statements may be submitted separately from the remainder of the Annual Report. (b) Not later than 120 days after the end of each Fiscal Year, the Issuer wilt notify each Governmental Unit, that had, as of the end of such Fiscal Year, an amount of bonds equal to or greater than twenty percent (20%) of all outstanding bonds under the General Bond Resolution, of its continuing disclosure undertaking responsibility. A list of such Governmental Units for the prior Fiscal Year will be included in the Annual Report. The Issuer undertakes no responsibility and shall incur no liability whatsoever to any person, including any holder or beneficial owner of the Bonds, in respect of any obligations or reports, notices or disclosures provided or required to be provided by such Governmental Unit under its continuing disclosure agreement. Section 4. Notice of Failure to Provide Information. The Issuer shall provide in a timely manner to the MSRB notice of any failure to satisfy the requirements of Section 3 of this Disclosure Certificate. Section 5. Reporting of Significant Events. (a) The Issuer shall file with the MSRB a notice of any of the following events with respect to the Bonds, within ten (10) business days of the occurrence of such event: (1) (2) (3) (4) (5) Principal and interest payment delinquencies. Unscheduled draws on debt service reserves reflecting financial difficulties. Unscheduled draws on credit enhancements reflecting financial difficulties. Substitution of credit or liquidity providers, or their failure to perform. Adverse tax opinions or thc issuance by the Internal Revenue Service ("IRS") of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701-TEB). (6) Defeasances. (7) Rating changes. (8) Tender offers. G-2 (9) Bankruptcy, insolvency, receivership or similar event of the Issuer.~ (10) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the Issuer, any of which reflect financial difficulties. (b) The Issuer shall file with the MSRB a notice of any of the following events with respect to the Bonds, within ten (10) business days of the occurrence of such event, if material: (1) Unless described in Section 5(a)(5), other notices or determinations by the IRS with respect to the tax status of the Bonds or other events affecting the tax status of the Bonds. (2) Nonpayment-related defaults. (3) Modifications to rights of holders of the Bonds. (4) Bond calls. (5) Release, substitution or sale of property securing repayment of the Bonds. (6) The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business the entry into a definitive agreement to undertake such an action, or a termination of a definitive agreement relating to any such actions, other than pursuant to its terms. (7) Appointment of a successor or additional trustee or the change in name of the trustee for the Bonds. (8) Incunence of a Financial Obligation of the Issuer, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the Issuer, any of which affect holders of the Bonds. Section 6. Termination of Reporting Obligation. The Issuer’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. Section 7. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, provided that the amendment meets each of the following conditions: (a) The amendlnent is made in connection with a change in circumstances that arises fiom a change in legal requirements, change in law, or change in the identity, nature or stares of the Issuer; Note: tbr the purposes of the event identified in subparagraph 5(a)(9). the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer tbr the Issuer in a proceeding unde,- the U.S. Bankruptcy Code or in any other proceeding under slate or federal law in \vhich a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirmilag a plan of reorganization, arrangen~erlt or liquidation by a coui-I or go\’elnnlontal authority having supervision or jurisdiction over substantially all of the assets or business oflhe Issuer. G-3 (b) This Disclosure Certificate, as amended, would have complied with the requirements of tile Rule as of the date hereof, after taking into account any amendments or interpretations of the Rule, as well as any changes in circumstances; (c) The Issuer obtains an opinion of cotmsel unaffiliated with the Issuer that the amendment does not materially impair the interests of the Beneficial Owners of the Bonds; and (d) Tile Issuer notifies and provides the MSRB with copies of the opinions and amendments. Any such amendment may be adopted without the consent of any Beneficial Owner of any of the Bonds, notwithstanding any other provision of this Disclosure Certificate or the Resolutions. The first Annual Report containing amended operating data or financial information pursuant to an amendment of this Disclosure Certificate sha!l explain, in narrative form, the reasons for the amendment and its effect on the type of operating data and financial information being provided. Section 8. Filing. Any filing required under the terms of this Disclosure Certificate may be made solely by transmitting such filing to the Electronic Municipal Market Access as provided at http://www.emma.msrb.org, or in such other manner as may be perlnitted from time to time by the Securities Exchange Commission. Section 9. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any Beneficial Owner may take such actions as may be necessary and appropriate, including an action to compel specific performance, to cause the Issuer to comply with its obligations under this Disclosure Certificate. No failure to comply with any provision of this Disclosure Certificate shall be deemed an Event of Default under the Resolutions, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel specific performance. Section 10. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Trustee, the Participating Underwriter and the Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. DATED this __ day of ,2020. ALASKA MUNICIPAL BOND BANK DEVEN J. MITCHELL Executive Director G-4 APPENDIX !t DTC AND ITS BOOK-ENTRY SYSTEM 1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the 2020 Series One Bonds. The 2020 Series One Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for each maturity of the 2020 Series One Bonds in the aggregate principal amount of such maturity, and will be deposited with DTC. 2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S, equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book- entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S, securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a rating fi-om Standard & Poor’s of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Conamission. More information about DTC can be found at www.dtcc.com. 3. Purchases of 2020 Series One Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 2020 Series One Bonds on DTC’s records. The ownership interest of each actual purchaser of each 2020 Series One Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation fi’om DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as we!l as periodic statements of their holdings, from the Direct or Indirect Participant through xvhich the Beneficial Owner entered into the transaction. Transfers of ownership interests in the 2020 Series One Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their OWlaership interests in 2020 Series One Bonds, except in the event that use of the book-entry system for the 2020 Series One Bonds is discontinued. 4. To facilitate subsequent transfers, all 2020 Series Oue Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partne,’ship nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of 2020 Series One Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change m beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2020 Series One Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such 2020 Series One Bonds are credited, which may o,-may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. Conveyance of notices and other commnnications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Iudirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of 2020 Series One Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2020 Series One Bonds, such as redemptions, tenders, defaults, and proposed amendments to the 2020 Series One Bond documents. For example, Beneficial Owners of 2020 Series One Bonds may wish to ascertain that the nominee holding the 2020 Series One Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. 6. Redemption notices shall be sent to DTC. If less than all of the 2020 Series One Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to 2020 Series One Bonds unless authorized by a Direct Participant in accordance with DTC’s MM! Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Bond Bank as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts 2020 Series One Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Payments on the 2020 Series One Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Bond Bank or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in %treet name," and will be the responsibility of such Participant and not of DTC, the Bond Bank or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest payments on the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Bond Bank or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. DTC may discontinue providing its services as depository with respect to the 2020 Series One Bonds at any time by giving reasonable notice to the Bond Bank or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, 2020 Series One Bond certificates are required to be printed and delivered. 10. The Bond Bank may decide to discontinue use of the system of book-entry-only transfers through DTC (or a succcssor securities depository). In that event, 2020 Series One Bond certificates will be printed and delivered to DTC. 11. The int-brmation in this appendix concerning DTC and DTC’s book-entry system has been obtained fl-om sources that the Bond Bank believes to be reliable, bt.~t the Bond Bank takes no responsibility for the accuracy thereof. I ~1~ Mixed Sources Printed by: ImageMaster, LLC TAX EXEMPTION AND NONARBITRAGE CERTIFICATE CONCERNING KODIAK ISLAND BOROUGH, ALASKA $345,000 GENERAL OBLIGATION SCHOOL BOND, 2020 SERIES A AND $1,855,000 GENERAL OBLIGATION SCHOOL BOND, 2020 SERIES B I, Dora Cross, on behalf of Kodiak Island Borough, Alaska (the "Borough"), certify as follows: 1. General. 1.1 Responsible Officer. I am the Finance Director of the Borough and, as such, am an officer of the Borough responsible for issuing the Borough’s $345,000 principal amount General Obligation School Bond, 2020 Series A (the "2020A Bond") and $1,855,000 principal amount General Obligation School Bond, 2020 Series B (the "2020B Bond," and together with the 2020A Bond, the "Bonds"), dated, delivered, and paid for on the same date as the date of this certificate (the "issue date"). Pursuant to the provisions of Treasury Regulations Section 1.150-1(c)(4)(iii), the Borough elects to treat the 2020A Bond and the 2020B Bond as part of the same issue because all of the Bonds are secured by a pledge of the full faith and credit of the Borough and all of the Bonds were sold and are being issued on the same date. 1.2 Purpose of Certificate. This certificate is executed to establish the facts, estimates, and circumstances in existence on the issue date and the bona fide reasonable expectations of the Borough on the issue date as to future events in connection with the Bonds for the purposes of the applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable Treasury Regulations under Sections 103, 141 and 148-150 of the Code. 1.3 Reasonable Basis for Expectations. To the best of my knowledge, information, and belief, this certificate accurately summarizes the facts, estimates, and circumstances in existence on the issue date, and the expectations of the Borough on the issue date about future events in connection with the Bonds are reasonable. 1.4 Defined Terms. Capitalized words used but not otherwise defined in this certificate have the meaning set forth in Resolution No. FY2020-22 of the Borough authorizing the issuance of the 2020A Bond and Resolution No. FY2016-06 authorizing the issuance of the 2020B Bond (together, the "Bond Resolutions"). 2. Purpose of Issuinq the Bonds. 2.1 Governmental Purpose. The Borough is a local government unit of the State of Alaska. The Bonds are being issued by the Borough to the Alaska Municipal Bond Bank (the "Bond Bank") to evidence the obligation of the Borough to repay a loan made by the Bond Bank to the Borough from the portion of the proceeds of the Bond Bank’s General Obligation and Refunding Bonds, 2020 Series One, allocable to the Borough (the "Bond Bank Bonds"). The Bond Bank is loaning the proceeds of the Bond FG:53754535.2 Bank Bonds to the Borough pursuant to a loan agreement (the "Loan Agreement"). Pursuant to Treasury Regulations Section 1.150-1(d)(2)(ii)(B), the Borough is treated as the obligor on the Bond Bank Bonds. (a) 2020A Bond. The 2020A Bond is being issued for the purpose of providing the funds necessary to finance part of the costs of planning, designing, and constructing school and related capital improvements in the Borough, including without limitation, the reconstruction and renovation of Kodiak High School, referred to the regular Borough election held on October 6, 2009, as Proposition No. 1 (the "2020A Improvements"), and to pay costs of issuance, as provided by the Bond Resolutions. (b) 2020B Bond. The 2020B Bond is being issued for the purpose of providing the funds necessary to finance the renewal and replacement schedule related to Borough-owned school facilities including without limitation, those projects listed in Resolution No. FY2016-06, referred to the regular Borough election held on October 7, 2014, as Proposition 1 (the "2020B Improvements," and together with the 2020A Improvements, the "Improvements"), and to pay costs of issuance, as provided by the Bond Resolutions. 2.2 No Impermissible Private Business Use. No more than 10% ($268,406) of the proceeds of the Bonds (or of a corresponding portion of the Improvements being financed with proceeds of the Bond) will be used for any private business use. No more than 5% ($134,203) of the proceeds of the Bonds (or of a corresponding portion of the Improvements being financed with proceeds of the Bond) will be used either for any private business use that is unrelated to the governmental purpose of the Bonds or for any private business use that is related to a governmental purpose of the Bonds but exceeds the amount of proceeds of the Bonds that are expected to be used for that governmental purpose. No more than 5% of the proceeds of the Bonds will be used directly or indirectly to make or finance loans to any person other than a governmental unit, except a loan, if any, which enables the borrower to finance a governmental tax or assessment of general application for a specific essential governmental function, or that constitutes a nonpurpose investment within the meaning of Section 148 of the Code. 3. Source and Disbursement of Proceeds. 3.1 Purchaser and Purchase Price of the Bonds. The Borough has entered into the Loan Agreement with the Bond Bank to secure payment of the sum of $2,200,000 (the "Loan Amount"). Pursuant to the Loan Agreement, the Bond Bank will issue the Bond Bank Bonds at a price equal to the Loan Amount, plus an original issue premium on the Bond Bank Bonds of $484,068.50, less an underwriters’ discount on the Bond Bank Bonds of $7,595.39. 3.2 Funds Into Which Proceeds From the Issuance and Sale of the Bonds and the Bond Bank Bonds Will Be Deposited. The proceeds received by the Borough from the issuance and sale of the Bonds will be used and applied as follows: (i) $30,000 will be used to pay costs of issuance of the Bonds; (ii)$6,051.11, representing the contingency amount (an amount less than 1% of the sale proceeds of the Bonds), will 2 be deposited in an account used primarily to achieve a proper matching of revenues of the Borough with principal and interest payments on the Bonds (the "Bond Fund") and used to pay interest on the Bonds on December 1, 2020; and (iii)$2,640,422 will be deposited in a fund established by the Borough to pay costs of the Improvements (the "Construction Fund") and used to carry out the Improvements. 3.3 Cost of the 2020A Improvements. The cost of the 2020A Improvements is estimated to be $76,310,000, which cost will be paid from the proceeds of the issuance and sale of the 2020A Bond, reasonably expected investment earnings therefrom in the amount of $150, proceeds of the Borough’s: General Obligation School Bond, 2011 Series A, in the amount of $8,000,000, General Obligation School Bond, Series 2013, in the amount of $21,595,000, General Obligation School Bond, 2014, in the amount of $22,660,000, General Obligation School Bond, 2015 Series A, in the amount of $6,210,000, General Obligation School Bond, 2016 SeriesA, in the amount of $2,000,000, General Obligation School Bond, 2018 Series A, in the amount of $550,000, and investment earnings therefrom, grant funding in the amount of $7,538,000, and other money of the Borough legally available to be used therefor. The net amount received by the Borough as a result of the sale of the 2020A Bond, after payment of all expenses of issuing, selling, and delivering the 2020A Bond and the Bond Bank Bonds, is not expected to exceed the amount necessary to pay the costs of the 2020A Improvements. 3.4 Cost of the 2020B Improvements. The cost of the 2020B Improvements is estimated to be $10,230,000, which cost will be paid from the proceeds of the issuance and sale of the 2020B Bond, reasonably expected investment earnings therefrom in the amount of $850, proceeds of the Borough’s General Obligation School Bond, 2015 Series B, in the amount of $2,000,000, proceeds of the Borough’s General Obligation School Bond, 2016 Series B, in the amount of $6,000,000, and investment earnings therefrom, and other money of the Borough legally available to be used therefor. The net amount received by the Borough as a result of the sale of the 2020B Bond, after payment of all expenses of issuing, selling, and delivering the 2020B Bond and the Bond Bank Bonds, is not expected to exceed the amount necessary to pay the costs of the 2020B Improvements. 4. Construction Schedule for the Improvements. 4.1 Commencement and Prosecution of Construction of the Improvements. Construction of the Improvements has already commenced, and the Borough has entered into a contract or otherwise incurred a substantial binding obligation toward commencement of the Improvements involving an amount equal to at least 5% of the sale proceeds of the Bonds, or will have entered into such a contract or other substantial binding obligation within six months after the issue date. Work on the Improvements and expenditure of the sale proceeds of the Bonds are expected to proceed with due diligence to completion. 3 4.2 Completion of the Improvements. It is expected that at least 85% of the sale proceeds of the Bonds will be spent for the Improvements by July 7, 2023, the date that is three years after the issue date. 4.3 No Sale of Improvements Expected. The Improvements are not expected to be sold or otherwise disposed of in whole or in part prior to maturity of the Bonds other than to dispose of any portion of the Improvements that becomes inadequate, obsolete, worn out, unfit, or no longer necessary or useful to the operation of the Improvements. 5. Payment of Bonds. 5.1 Debt Service Structure. The Bonds are general obligation bonds of the Borough. The Bonds mature on December 1, 2030. Principal of the Bonds is payable annually in installments on December 1 of each year from 2021 through 2030, inclusive. Interest on the Bonds is payable semiannually on each June 1 and December 1, commencing on December 1, 2020. The principal installments of the Bonds are not subject to prepayment. 5.2 Source of Payment. The Bonds are payable from the proceeds of taxes levied against all of the taxable property located within the Borough and other funds available therefor. Funds that are expected to be used to pay principal of or interest on the Bonds will be deposited in the Bond Fund and used within 13 months of their deposit in the Bond Fund for payment of principal of or interest on the Bonds. The Bond Fund will be used primarily to achieve a proper matching of tax revenues of the Borough and debt service on the Bonds within each bond year. It is expected that the Bond Fund will be depleted at least once a year (on each December 1), except for a reasonable carryover amount not expected to exceed the greater of one year’s earnings on the Bond Fund or 1/12 of the annual debt service on the Bonds. 5.3 Absence of Other Sinkin.q Funds. Except for the Bond Fund, the Borough has not created or established and does not expect to create or establish any reserve fund, sinking fund, or other similar fund that is reasonably expected to be used directly or indirectly to pay debt service on the Bonds or any pledged fund with respect to which there is reasonable assurance that money will be available in that fund to pay debt service on the Bonds even if the Borough were to encounter financial difficulties. 6. Restrictions on Investin.q Proceeds of the Bonds in Hiqher Yieldinq Investments. 6.1 Calculation of Yield on Bonds. Pursuant to Treasury Regulations Section 1.148-4(a), the yield on the Bonds is deemed to be equal to the yield on the Bond Bank Bonds. The yield on the Bond Bank Bonds has been calculated as the yield that when used in computing the present worth of all payments of principal of and interest on the Bond Bank Bonds, produces an amount equal to the issue price of the Bond Bank Bonds. As reflected in Section 3 of the Bond Purchase Contract dated June 24, 2020, between the Bond Bank and the underwriters named therein (the "Underwriters"), the "issue price" of the Bond Bank Bonds is being determined under the 4 general rule of Treasury Regulations Section 1.148-1(f)(2)(i) based upon the first price (including original issue premium or discount) at which a substantial amount (at least 10%) of each maturity of the Bond Bank Bonds has been sold to the public, except the Bond Bank Bonds maturing on December 1, 2032 (the "H01d-the-Offering Price Maturity"). The issue price of the Hold-the-Offering-Price Maturity is determined based on its initial offering price to the public as of the sale date pursuant to the special rule of Treasury Regulations Section 1.148-1(f)(2)(ii). Based upon the issue price certificate provided by the representative of the Underwriters to the Bond Bank, including Schedule A attached thereto showing the prices at which at least 10% of the Bond Bank Bonds have been sold to the public and the initial offering price to the public of the Hold- the-Offering-Price Maturity, attached hereto as Exhibit A, the yield on the Bond Bank Bonds has been calculated to be 1.380505%. In determining this yield, no adjustments were made for underwriters’ discount or other costs of issuance of the Bond Bank Bonds. However, pursuant to the special yield calculation rule provided by Treasury Regulations Section 1.148-4(b)(3)(ii)(B), for the purposes of determining the yield on the Bond Bank Bonds, the Bond Bank Bonds maturing on or after December 31, 2031, each of which is being issued with original issue premium that exceeds 0.25% multiplied by the number of complete years to its first optional redemption date ("Yield-to-Call Bonds"), were treated as redeemed at par on December 1, 2030, because such redemption would produce the lowest yield on each such Yield-to-Call Bond. 6.2 Restrictions on Investment of Proceeds in Hiqher Yieldinq Investments. (a) Construction Fund. The proceeds of the Bond Bank Bonds loaned to the Borough pursuant to the Loan Agreement and used to carry out the Improvements will be deposited in the Construction Fund and may be invested in higher yielding investments for a temporary period not exceeding three years after the issue date. (b) Proceeds Used for Costs of Issuance. Proceeds of the Bonds to be used to pay costs of issuance are expected to be spent for that purpose on the issue date and not invested. (c) Bond Fund. Proceeds of the Bonds representing the contingency amounts deposited in the Bond Fund and other amounts treated as replacement proceeds of the Bonds because they are held in the Bond Fund may be invested in higher yielding investments for a temporary period not exceeding 13 months after the date of their deposit in the Bond Fund. (d) Investment Earninqs. Investment proceeds of the Bonds for which no other temporary period is available may be invested in higher yielding investments for a temporary period of one year after the date of receipt of those investment earnings. (e) Restricted Yield Investments. Proceeds (and amounts treated as replacement proceeds) of the Bonds that may not be invested in higher yielding investments will be invested only in (i) obligations purchased at fair market value in 5 bona fide, arm’s-length transactions in an established market for those obligations and having yields not materially higher than the yield on the Bonds when calculated using the same frequency interval of compounding interest as used for the Bonds, (ii) obligations the interest on which is excluded from gross income under Section 103 of the Code that are not private activity bonds under Section 141 of the Code (or obligations treated as tax-exempt obligations under Section 103 of the Code, e.g., obligations issued by certain qualified regulated investment companies that invest, to the extent practicable, all of their assets in tax-exempt governmental bonds and meet certain other conditions), (iii)Demand Deposit Securities issued by the United States Treasury pursuant to the State and Local Government Series program or (iv)other United States Treasury Obligations--State and Local Government Series having yields not materially higher than the yield on the Bonds. o Compliance With Arbitraqe Rebate Requirement or Conditions for Exception From Arbitraqe Rebate Requirement. 7.1 General Arbitraqe Rebate Compliance. Proceeds of the Bond Bank Bonds used pursuant to the Loan Agreement to acquire the Bonds from the Borough are not treated as spent until those proceeds are used to carry out the Improvements, and those proceeds continue to be treated as proceeds of the Bond Bank Bonds until spent for that purpose. If the Bond Bank Bonds become subject to the rebate requirement imposed by Section 148(0 of the Code, the Borough, on behalf of the Bond Bank, in the manner and to the extent required by that Section, will calculate and rebate to the United States any investment earnings on gross proceeds of the Bond Bank Bonds and the Bonds, plus any income attributable to such excess earnings. Investment earnings on amounts held in the Bond Fund will not be taken into account for this purpose at any time, even if the amount earned is $100,000 or more in a bond year, because the Bonds bear interest at fixed rates (i.e., rates that do not vary during the term of the Bonds) and have an average maturity of at least 5 years. If the Borough for any reason fails to comply with the rebate requirement to the extent applicable to the Bond Bank Bonds and the Bonds, the Borough, to the extent permitted and required by Section 148(0(7) of the Code, will pay any penalty that may be necessary to preserve the tax exemption for interest on the Bonds. 7.2 Bonds Eliqible for Small Governmental Issuer Rebate Exception. The Borough is a duly organized and existing governmental unit of the State of Alaska and has general taxing power. Neither the Bond Bank’s General Obligation and Refunding Bonds, 2020 Series One, nor any of the bonds being acquired by the Bond Bank from proceeds thereof (including the Bonds) are "private activity bonds" within the meaning of Section 141 of the Code. At least 95% of the net proceeds of the Bonds will be used for local governmental activities of the Borough (or of a governmental unit the jurisdiction of which is entirely within the jurisdiction of the Borough). The aggregate face amount of all tax-exempt obligations (other than private activity bonds and other obligations not required to be included in such calculations) issued by the Borough and all entities subordinate to the Borough (including any entity that the Borough controls, that derives its authority to issue tax-exempt obligations from the Borough, or that issues tax-exempt obligations on behalf of the Borough) during the current calendar year is not reasonably 6 expected to exceed $5,000,000. No tax-exempt obligations have been or are expected to be issued in the current calendar year by any entity formed or availed of by the Borough to avoid the $5,000,000 limit on tax-exempt obligations eligible for the small governmental issuer arbitrage rebate exception. Therefore, the Bonds are eligible for the small governmental issuer arbitrage rebate exception under Section 148(f)(4)(D) of the Code and Treasury Regulations Section 1.148-8(d). 8. Bonds Meet Other Arbitraqe Requirements. 8.1 No Other Governmental Obligations Part of This Issue. There are no other obligations of the Borough that are being sold at substantially the same time (less than 15 days apart) as the Bonds pursuant to the same plan of financing and that are reasonably expected to be paid from substantially the same source of funds. 8.2 No Replacement of Funds Invested in Hiqher Yieldinq Investments. No portion of the proceeds of the Bonds will be used directly or indirectly to replace funds of the Borough invested in higher yielding investments. 8.3 No Abusive Arbitraqe Device. The primary, bona fide governmental purpose of issuing the Bonds is to finance the costs of the Improvements. No action is being taken or will be taken in connection with the issuance of the Bonds that has the effect of (i) enabling the Borough to exploit the difference between tax-exempt and taxable interest rates to obtain a material financial advantage by investing any portion of the gross proceeds of the Bonds over any period of time, and (ii) overburdening the tax-exempt bond market as a result of issuing the Bonds in a greater amount, issuing the Bonds earlier, or allowing the Bonds to remain outstanding longer than is otherwise reasonably necessary to finance the Improvements. 8.4 No Intent To Earn Impermissible Arbitraqe Profit. The Borough will not take any intentional action to earn any impermissible arbitrage profit from the investment of gross proceeds of the Bonds. 9. Bonds Meet Other Requirements for Tax Exemption. 9.1 Bonds In Reqistered Form. The Bonds are issued only in registered form. 9.2 No Federal Guaranty. Except as otherwise permitted by the Code, payment of the principal of or interest on the Bonds is not guaranteed in whole or in part by the United States or any agency or instrumentality thereof. 9.3 Information Return To Be Filed. The Borough will cause a Form 8038-G Information Return respecting the Bonds to be timely filed with the Internal Revenue Service. 9.4 Bonds Not Hedge Bonds. The Borough reasonably expects that (i)at least 85% of the spendable proceeds of the Bonds will be used to carry out the governmental purposes of the Bonds within the three-year period beginning on the 7 issue date and (ii) not more than 50% of the proceeds of the Bonds will be invested in nonpurpose investments having a substantially guaranteed yield for 4 years or more. 9.5 Post-Issuance Compliance Procedures. The Borough has previously established written procedures, attached hereto as Exhibit B, to (a)monitor the requirements of Sections 141 and 148 of the Code after the issue date and (b) ensure that any portion of the Bonds that becomes nonqualified is remediated in accordance with the requirements under Treasury Regulations Section 1.141-12. [Signature page follows] 8 10. Bonds Tax Exempt and Not Arbitraqe Bonds. The Borough expects that bond counsel to the Borough will rely upon the foregoing facts, estimates, and circumstances in existence on the issue date and the reasonable expectations of the Borough as to future events respecting the Bonds to enable them to conclude that it is not expected that proceeds of the Bonds will be used in any manner that would cause the Bonds to be arbitrage bonds and to provide their opinion that the Bonds are governmental obligations the interest on which is excluded from gross income for federal income tax purposes under Section 103 of the Code. Dated July 7, 2020. KODIAK ISLAND BOROUGH, ALASKA Dora Cross, Finance Director 9 EXHIBIT A ISSUE PRICE CERTIFICATE FG:53732881.1 EXHIBIT A ISSUE PRICE CERTIFICATE $98,310,000 Alaska Municipal Bond Bank General Obligation and Refunding Bonds 2020 Series One The undersigned, on behalf of RBC Capital Markets, LLC (the "Representative"), on behalf of itself and BofA Securities, Inc. and Wells Fargo Bank, National Association (collectively, the "UndeJn~riting Group"), hereby certifies as set ibrth below with respect to the sale and issuance of the above-captioned obligations (the "Bonds"). 1. Sale of the General Rule Maturities. As of the date of this Certificate, fbr each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity ~vas sold to the Public is the respective price listed in Schedule A. 2. Initial O_[fering Price of the Hohi-the-Offering-Price-Maturities. (a) The Underwriting Group offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the "Initial Offering Prices") on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this Certificate as Schedule B. (b) As set forth in the Purchase Contract, the members of the Underwriting Group have each agreed in writing that, (i) for each Maturity of the Hold-the-Offering-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period ibr such Maturity (the "hoht-the-oJfering-price rule"), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any third-party distribution agreement shall contain the agreement of each broker-dealer who is a party to the third-party distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Hold- the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period for such Maturity. Defined Terms. (a) BondBank means the Alaska Municipal Bond Bank Authority. (b) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the "’General Rule Maturities." (c) Hold-/he-OJ]bring-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the "Hold-the-Offering-Price Maturities." A-1 155-8570-474 (d) I-Iolding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of(i) the close of the fifth business day after the Sale Date (July 1, 2020), or (ii) the date on which the Underwriters have sold at least 10% of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity. (e) MaturiO~ means Bonds with the same credit and payment terms. The Bonds with different maturity dates, or Bonds with the same matnrity date but different stated interest rates, are treated as separate Maturities. (t) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a Related Party to an Underwriter. (g) A purchaser of any of the Bonds is a Related ParO~ to the Underwriter if the Underwriter and the purchaser are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation 02" the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other). (h) Sale Date means the first day on which there is a bindiug contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is June 24, 2020. (f) Under~friter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to tbrm an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Representative’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the tbregoing information will be relied upon by the Bond Bank with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax roles affecting the Bonds, and by Orrick, Herrington & Sutcliffe LLP, as Bond Counsel. in connection with rendering its opinion that the interest on the Bonds is excluded from gross income tbr federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G. and other federal income tax advice that it may give to the Issuer fiom time to time relating to the Bonds. [SIGNATURE PAGE FOLLOWS] A-2 4155-8570-4741 RBC CAPITAL MARKETS, LLC, as Representative By: Tom A. Yang, Managing Director Dated: July 7, 2020 A-3 55-8570-4741 Schedule A Initial Offering Prices ALASKA MUNICIPAL BOND BANK AUTHORITY GENERAL OBLIGATION AND REFUNDING BONDS, 2020 SERIES ONE Maturity Date Principal Interest (December 1 ) Amount Rate Yield Price 2020 $7,490,000 5.00% 0.54% 101.779 2021 8,595,000 5.00 0.62 106.095 2022 8,975,000 5.00 0.69 110.240 2023 9,225,000 5.00 0.75 114.240 2024 9,980,000 5.00 0.84 117.932 2025 8,765,000 5.00 0.99 121.033 2026 8,215,000 5.00 1.17 123.549 2027 7,790,000 5.00 1.34 125.701 2028 7,385,000 5.00 1.45 127.978 2029 7,740,000 5.00 1.56 129.966 2030 6,670,000 5.00 1.68 131.557 2031 1,425,000 5.00 1.82 130.004 2032 (2) 795,000 5.00 1.91 129.018 2033 830,000 4.00 2.20 116.649 2035 (3) 1,710,000 4.00 2.33 115.343 2037 (3) 1,305,000 4.00 2.41 114.547 2038 695,000 4.00 2.45 114.152 2039 720,000 4.00 2.49 113.758 (1) Priced to the par call date of December 1,2030. (2) Hold-the-Offering-Price Maturity. (3) Term Bonds. 55-857/)-4741 Schedule B Pricing Wire or Equivalent Communication 55-8570-4741 6/25/2020 Wires Wire Details Rec’d Date/Time (CST) 06/25/20 Ipreo View Deal Inbox v Actions: ~, ~ ~[ Email ii ............... ose 4i Sender ST Wire Type/Title Master Message # Deal Type 09:01 AM RBC Capital Markets NY FINAL PRICING WIRE Neg RE: $ 98,310,000 ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION AND REFUNDING BONDS 2020 SERIES ONE WE HAVE RECEIVED THE WRITTEN AWARD. MOODY’S: A1 S&P: A+ (Neg) (Neg) FITCH: KROLL: DATED:07/O7/2020 FIRST COUPON:12/01/2020 DUE: 12/01 INITIAL TRADE DATE: 06/25/2020 @ I:3OPM Eastern ADD’L TAKEDOWN MATURITY AMOUNT COUPON PRICE ( Pts ) 12/01/2020 7,490M 5.00% 0.54 O.15 (Approx. $ Price I01.779) 12/O1/2021 8,595M 5.00% 0.62 0.15 (Approx. $ Price 106.095) 12/O1/2022 8,975M 5.00% 0.69 0.275 (Approx. $ Price 110.240) 12/01/2023 9,225M 5.00% 0.75 0.275 (Approx. $ Price 114.240) 12/01/2024 9,980M 5.00% 0.84 0.275 (Approx. $ Price 117.932) 12/01/2025 8,765M 5.00% 0.99 0.2?5 (Approx. $ Price 121.033) 12/01/2026 8,215M 5.00% 1.17 0.275 (Approx. $ Price 123.549) 12/01/2027 7j790M 5.00% 1.34 0.275 (Approx. $ Price 125.701) 12/01/2028 7,385M 5.00% 1.45 0.325 (Approx. $ Price 127.978) 12/01/2029 7,740M 5.00% 1.56 0.325 (Approx. $ Price 129.966) 12/01/2030 6,670M 5.00% 1.68 0.325 (Approx. $ Price 131.557) 12/01/2031 1,425M 5.00% 1.82 0.325 (Approx. $ Price PTC 12/01/2030 130.004 Approx. YTM 2.037) 12/01/2032 795M 5.00% 1.91 0.325 01179RF32 (Approx. $ Price PTC 12/01/2030 129.O18 Approx. YTM 2.297) 12/01/2033 830M 4.00% 2.20 0.325 OII79RF40 CUSIP 01179RD75 01179RD83 01179RD91 01179RE25 01179RE33 01179RE41 01179RE58 01179RE66 01179RE74 01179RE82 01179RE90 01179RF24 h t tps ://www. n e wis s u e h o m e. i-d e a l.co m/Wire s/a s p/wi re_d e tail. a s p ? hid P ro d C o d e = LT& hid W ireld = 1452474852 & hid M o d e = D 1/3 6/25/2020 YTM 2.527) 12/01/2035 YTM 2.769) 12/01/2037 YTM 2.927) 12/01/2038 YTM 2.994) 12/01/2039 YTM 3.055) Ipreo (Approx. $ Prlce PTC 12/01/2030 116.649 Approx. 1,71OM 4.00% 2.33 3/8 01179RF65 (Approx. $ Price PTC 12/01/2030 115.343 Approx. 1,305M 4.00% 2.41 3/8 OII79RF81 (Approx. $ Price PTC 12/01/2030 114.547 Approx. 695M 4.00% 2.45 3/8 01179RF99 (Approx. $ Price PTC 12/01/2030 114.152 Approx. 720M 4.00% 2.49 3/8 01179RG23 (Approx. $ Price PTC 12/01/2030 113.758 Approx. CALL FEATURES: Optional call in 12/01/2030 ~ 100.00 Slnking Fund Schedule 2035 Term Bond 12/01/2034 855M 12/01/2035 855M Sinking Fund Schedule 2037 Term Bond 12/01/2036 640M 12/01/2037 665M PRIORITY OF ORDERS AS FOLLOWS: 1. Alaska Retail (Individual and Professional) 2. Natlonal Retail (Individual and Professional) 3. Net Designated Exception: If an investor ls affiliated wlth a syndicate member who may not be compensated for the investor’s order, the lnvestor wlll not be requlred to designate that syndicate member. 4. Member RETAIL DEFINITION: A "Retail Order" is defined as an order directly placed by an individual or an investment advisor or bank trust department actlng on behalf of an individual, wlth a maxlmum of $1,000,000 per account, unless otherwise approved by the senior manager in conjunction with the issuer. Retail orders do not include orders from bank portfolios, insurance companies, bond funds or municipalities. Zip code and category selection are required on all retail orders at the time the order is entered. PRIORITY POLICY: All managers must be designated. No firm may receive more than 60.00% of any designation. https:~~www~newissueh~rne~i-dea~~comA~ires~asp~wire-detail.asp?hidPr~d~~de=LT&hid~ire~d=1452474852&hidM~de=D 2/3 6/25/2020 Ipreo The co-senior, BofA Securities, must be designated a minimum of 20% of each designation. The Senior Manager requests the identification of all priority orders at the time the orders are entered. Pursuant to MSRB Rule G-ll, all syndicate members must inform RBC Capital Markets, LLC if they are submitting an order for their own account, an affiliated account or a related account to themselves or to any other syndicate member. ***************************************************************************************** The compliance addendum MSRB Rule G-ll will apply. The Award is final for Wednesday, 3une 24, 2020 at 8:OOPM Eastern . Delivery is firm for Tuesday, 3uly 7, 2020. This issue is book entry only. This issue is clearing through DTC. Award: 06/24/2828 Award Time: 8:00PM Eastern Delivery: 87/87/2828 (Firm) Initial trade: 06/25/2020 Date of Execution: 06/25/2020 Time of Execution: 1:30PM Eastern RBC Capital Markets BofA Securities Wells Fargo Securities (trade name for Wells Fargo Bank N.A. Munidpal Finance Group) By: RBC Capital Markets New York, NY Email Address Date Sent Terms and Conditions of Use and Privacy. Statement © 2020 Ipreo. All rights reserved. https://www.n e wissuehorne.i-de a l.co m/Wires/a sp/wire_d etail.a sp?hid Prod Code= LT&hidWireld = 1452474852&hid Mode = D 3/3 EXHIBIT B POST-ISSUANCE COMPLIANCE PROCEDURES POST-ISSUANCE COMPLIANCE PROCEDURES FOR TAX-EXEMPT BONDS Kodiak Island Borough, Alaska (the "Borough") issues governmental tax-exempt bonds subject to ongoing compliance obligations that must be met to preserve the tax-exempt status of the bonds. In addition to loss of tax-exemption, adverse consequences can result from ti~ilure to comply with Internal Revenue Service (IRS) restrictions relating to arbitrage, timing and use of bond proceeds, and other aspects of a bond issue. However, issuers that discover noncompliance as a result of the adoption and adherence to a written post-issuance compliance policy are eligible for significantly more favorable treatment when remediating the noncompliance tba’ough the IRS’s Voluntary Closing Agreement Program. Accordingly, the Borough has adopted these procedures to assist in identifying and correcting noncompliance in a timely manner. Responsibili~, for Maintaining Co~npliance The Assembly of Borough has the overall, final responsibility for monitoring whether the Borough is in compliance with post-issuance federal tax requirements for its tax-exempt bonds. However, the Assembly has delegated to the Finance Director the primary operating responsibility for implementing and monitoring compliance with this policy document. The Finance Director should consult with bond counsel when there are questions or concerns about the application of applicable federal law to a tax-exempt bond financing or a post-issuance tax compliance issue. Expenditures of Tax-Exempt Bond Proceeds For each project financed in whole or part with tax-exempt bond proceeds, the Finance Director will monitor the expenditure of both tax-exempt bond proceeds and funds that are not proceeds of tax-exempt bonds and will track allocations of tax-exempt bond proceeds and funds that are not proceeds of tax-exempt bonds to project expenditures. For expenditures of tax-exempt bond proceeds, the Finance Director will record the date, purpose, property financed mad vendor associated with each expenditure of bond proceeds and identify which expenditures are tbr the purpose of reimbursing the Borough for prior expenditures. Use of Property Financed with Tax-Exempt Bond Proceeds For each issue of tax-exempt bonds, the Finance Director wilt monitor the use of property financed with tax-exempt bond proceeds tbr the tem~ of the bond issue and fbr the term of any bonds issued to refund the original issue or issued to refi.md an issue thin refunded the original issue. The Finance Director will monitor such use no less frequently than once a year. Arbitrage Yield Restriction and Rebate For each issue of tax-exempt bonds, the Finance Director ~vill monitor the interest earned on investment of tax-exempt bond proceeds on an annual basis and will cause arbitrage rebate calculations to be made as required by applicable federal law. If necessary, the Finance Director also wilt cause the appropriate federal arbitrage tax returns to be prepared and timely filed with the 1RS together with any rebate amount owed. 1 Identification of Potential Violations tf at any time during the term of an issue of tax-exempt bonds, the Borough discovers that a violation of federal tax requirements applicable to that issue may have occurred, the Finmace Director will consult with bond counsel to determine whether any such violation actually has occurred and, if so, take t~rompt action to accomplish an available remedial action under applicable IRS regulations or enter into a closing agreement with the tRS under the Voluntary Closing Agreement Program described under Notice 2008-31 or other future published guidance. Record Retention Records relating to tax-exempt bonds must be maintained as required by the State Auditor’s Office. However, notwithstanding the record retention requirements set forth by the State Auditor’s Office, records relating to tax-exempt bonds must be maintained for the tema of the bond issue plus three years, or, in the case of an issue refhnded by one or more subsequent bond issues, for the combined term of the issues plus three years. Training It is the policy of Borough that the Finance Director and his or her staff, as well as the principal operating officials of flmse departments of the Borough for which property is financed with tax-exempt bonds should be provided with education and training on federal tax requirements applicable to tax-exempt bonds. The Borough therefore will enable and encourage those perso~mel to attend m~d participate in educational and training programs offered by, among others, bond counsel, the Washington Municipal Treasurers Association and the Washington Finance Ofricers Association with regard to the federal tax requirements applicable to tax-exernpt bonds. 2 orm8038-GI (Rev. September 2018) ] Department of the Treasu~ ~ internal Revenue Service ~ | t,~"~ | | Reporting Authority 1 Issuer’s name Kodiak Island Borough, Alaska 3a Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions) Information Return for Tax-Exempt Governmental Bonds 1~ Under Internal Revenue Code section 149(e) ¯ " See separate instructions. OMB No. 1545-0720 Caution: If the issue price is under $100,000, use Form 8038-GC. I~ Go to www.irs.gov/FSO38G for instructions and the latest information. If Amended Return, check here ¯ [] 2 Issuer’s employer identification number (EIN) 92-0030845 3b Telephone number of other person shown on 3a 4 Number and street (or P.O. box if mail is not delivered to street address) I Room/suite 710 Mill Bay Road 6 City, town, or post office, state, and ZIP code Kodiak, AK 99615 8 Name of issue General Obligation School Bonds, 2020A and 2020B 10a Name and title of officer or other employee of the issuer whom the IRS may call for more information (see instructions) Dora Cross, Finance Director |;~"~|1| Type of Issue (enter the issue price). See the instructions and attach schedule. 11 Education .............................. 12 Health and hospital .......................... 13 Transportation ............................ 14 Public safety ............................. 15 Environment (including sewage bonds) .................... 16 Housing .............................. 17 Utilities .............................. 18 Other. Describe ¯ 19 If bonds are TANs or RANs, check only box 19a . . ¯ [] If bonds are BANs, check only box 19b ¯ [] 20 If bonds are in the form of a lease or installment sale, check box . ¯ [] I~Ti|lll Description of Bonds. Complete for the entire issue for which this form is being filed. 21 (a) Final maturity date (b) Issue price (c) Stated redemption (d) Weighted price at maturity average maturity 12/01/2030 $ 2,684,069 $ 2,200,000 6.161 years |~f~|LvJ Uses of Proceeds of Bond Issue (including underwriters’ discount) 22 Proceeds used for accrued interest ..................... 23 Issue price of entire issue (enter amount from line 21, column (b)) ........... 24 Proceeds used for bond issuance costs (including underwriters’ discount). 37,596 25 Proceeds used for credit enhancement ............ 25 26 Proceeds allocated to reasonably required reserve or replacement fund 26 27 Proceeds used to refund prior tax-exempt bonds. Complete Part V 27 28 Proceeds used to refund prior taxable bonds. Complete Part V .... 28 29 Total (add lines 24 through 28) ....................... 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) |~"l~,vJ Description of Refunded Bonds. Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the ~ax-exemp~ bonds to be refunded .... ¯ 32 Enter the remaining weighted average maturity of the taxable bonds to be refunded ..... ¯ 33 Enter the last date on which the refunded tax-exempt bonds will be called (MM/DDiYYYY) ¯ 34 Enter the date(s) the refunded bonds were issued ¯ (MM/DD/YYYY) For Paperwork Reduction Act Notice, see separate instructions. 5 Report number (For IRS Use Only) 13 I 1@ 7 Date of issue 0710712020 9 CUSIP number None 10b Telephone number of officer or other employee shown on 10a 907-486-9323 2,684,069i (e) Yield 1.3805 2,684,069 37,596 2,646,473 years years Cat. No. 63773S Form 8038-G (Rev. 9-2018) Form 8038-G (Rev. 9-2018) ~=~’~r~ M iscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) .... 36a b 38a b d 39 40 41a b c d 42 43 44 45a Page 2 Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract ~ (GIC) (See instructions) ......................... ----136al Enter the final maturity date of the GIC ¯ (MM/DD/YYYY) Enter the name of the GIC provider ¯ Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units ........................ 37 I If this issue is a loan made from the proceeds of another tax-exempt issue, check box ¯ [] and enter the following information: Enter the date of the master pool bond ¯ (MM/DD/YYYY) 07/07/2020 Enter the FIN of the issuer of the master pool bond ¯ 92-6001185 Enter the name of the issuer of the master pool bond ¯ Alaska Municipal Bond Bank If the issuer has designated the issue under section 265(b)(3)(B)(i)(lll) (small issuer exception), check box .... ¯ [] If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box ............. ¯ [] If the issuer has identified a hedge, check here ¯ [] and enter the following information: Name of hedge provider ¯ Type of hedge ¯ Term of hedge ¯ If the issuer has superintegrated the hedge, check box ..................... ¯ [] If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated according to the requirements under the Code and Regulations (see instructions), check box ........ I~ [] If the issuer has established written procedures to monitor the requirements of section 148, check box ..... ¯ [] If some portion of the proceeds was used to reimburse expenditures, check here ¯ [] and enter the amount of reimbursement ......... ¯ Enter the date the official intent was adopted ¯ (MM/DD/YYYY) Signature and Consent Paid Preparer Use Only Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. I fuK(her declare that 1 consent to the IRS’s disclosure of the issuer’s return information, as necessary to process this return, to the person ~at I have authorized above. ~ ~’~"~ (~k ~)~f~~ 07/07/2020 ) Dora Cross, Finance Director Signature of issuer’s authorized representative Date Type or print name and title Print/Type preparer’s name ~e~~~ Date I Check [] ,f PTIN Marc R. Greenough 07/07/2020 self-employed P01061698 Firm’s name i~ Foster Garvey P.C. I Firm’s FIN I~ 91-0876461 Firm’s address I~ 1111 Third Avenue, Suite 3000, Seattle, WA 98101 I Phone no. (206) 447-4400 Form 8038-G (nev. 9-2018) Department of the Treasury Internal Revenue Service Ceater Ogden, UT 84201 !t1111t11111!111111 !111 Ii!11 9590 9402 5574 9274 7821 65 7001 1940 0000 3668 1819 9402 5574 9590 United States Postal Service Potage & Fees usPs ,., .~ ,~. ,~o. ,~-,o 9274 7821 65 ’Sender:, Please print your name, addre~, and ZIP+4~ In this box~ oFoster arvey CERTIFICATE OF MAILING I, Rachel Giles-Klein, a legal practice assistant at Foster Garvey P.C., Washington, certify that on this day I mailed the original IRS Form 8038-G relating to in Seattle, Kodiak Island Borough, Alaska General Obligation School Bonds, 2020A and 2020B $2,200,000 Dated Date: July 7, 2020 Closing Date: July 7, 2020 to the Department of the Treasury, Internal Revenue Service, Ogden, Utah 84201, by certified mail, return receipt requested (No. 7001 1940 0000 3668 1819). DATED: July 21, 2020 FG:53774497.1 8/7/2020 USPS.com® - USPS Tracking® Results ALERT: DUE TO LIMITED TRANSPORTATION AVAILABILITY AS A RESULT OF NATIONWIDE CO... ALERT: THIS SITE WILL BE UNDERGOING MAINTENANCE ON SATURDAY, AUGUST 8TH AT 9 P... USPS Tracking® FAQs ) Track Another Package Tracking Number: 70011940000036681819 Remove X Your item was delivered to an individual at the address at 9:02 am on July 24, 2020 in OGDEN, UT 84201. Delivered July 24, 2020 at 9:02 am Delivered, Left with Individual OGDEN, UT 84201 Get Updates v Text & Email Updates V Tracking History V Product Information V See Less Can’t find what you’re looking for? https://tools.usps.com/go/TrackConfirmAction?qtc_tLabels 1 =70011940000036681819 1/2 H. CLAY KEENE cle, y.keene@keenecurrall.com SCOTT A. BRANDT-ERICHSEN s.br andt-eriohsen@keenecurrall.com GEOFFREY G. CURRALL- 1944-~01~; KEENE & CURRALL A PARTNERSHIP OF PROFESSIONAL COMF~ANIES ATTORNEYS AT LAW KETCHIKAN, ALASKA 99901 NO LITIGATION CERTIFICATE AREA CODE (907) TELEPHONE 225-4131 FACSIMILE 22. S-O 540 KODIAK ISLAND BOROUGH, ALASKA $345,000 GENERAL OBLIGATION SCHOOL BOND, 2020 SERIES A I, Scott Brandt-Erichsen, certify that I am the duly appointed and acting Borough Attorney of Kodiak Island Borough, Alaska (the ’Borouuh"), and that I am authorized to execute and deliver this certificate and further certify on behalf of the Borough as follows: 1. This certificate is delivered in connection with the issuance by the Borough of its $345,000 General Obligation School Bond, 2020 Series A (the "2020A Bond"). 2. No litigation of any nature is now pending or, to my knowledge, threatened, affecting the corporate existence or boundaries of the Borough or the title of the present officers to their respective offices; and no authority or proceeding for the issuance of the 2020A Bond has been repealed, revoked, or rescinded. 3. No litigation of any nature is now pending, or, to my knowledge, threatened seeking to restrain or enjoin the issuance, sale, or delivery of the 2020A Bond, or the right of the Borough to levy and collect taxes pledged or to be pledged to pay the principal of and interest on the 2020A Bond, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the 2020A Bond or the loan agreement between the Borough and the Alaska Municipal Bond Bank relating to the 2020A Bond, or contesting the power of the Borough or its authority with respect to the 2020A Bond. 4. No litigation of any nature is now pending, or, to my knowledge, threatened against the Borough involving any of the property or assets of or under the control of the Borough, which, individually or in the aggregate, involves the possibility of any judgment or uninsured liability which may result in any material change in the revenues, properties, or assets, or in the condition, financial or otherwise, of the Borough. Dated: July 7, 2020. Scott Brahdt-Erichsen, Borough Attorney SIGNATURE CERTIFICATE KODIAK ISLAND BOROUGH, ALASKA $345,000 GENERAL OBLIGATION SCHOOL BOND, 2020 SERIES A STATE OF ALASKA THIRD JUDICIAL DIVISION ) ) SS: ) I, ALISE L. RICE, certify as follows: 1. I am the duly appointed, qualified, and acting Borough Clerk of Kodiak Island Borough, Alaska (the "Borough"), and as such am authorized to execute this certificate. 2. The Kodiak Island Borough, Alaska $345,000 General Obligation School Bond, 2020 Series A (the "2020A Bond"), was duly signed on behalf of the Borough by William Roberts, Mayor of the Borough, and duly attested by Alise L. Rice, Borough Clerk of the Borough. 4. The signatures of the Mayor and the Borough Clerk on the 2020A Bond are the true and genuine signatures of such respective officers. 5. Such officers are the duly elected or appointed, qualified, and acting officers of the Borough, holding such respective offices and authorized to execute the 2020A Bond. 6. The seal that is impressed upon this Certificate is the duly adopted and only official seal of the Borough been impressed on the 2020A Bond. Dated: July 7 [SEAL] The foregoing instru Alise L. Rice, Borougt" Notary Public State of Alaska My Commission Expires Sep 26, 2020 3rough Clerk d before me this / ~’?-" day of and Borough, Alaska. J~/ ,2020, by (Signature of Notary) Notary public for the State.of Alaska My commission expires ~" - .2_t,. FG:53732914.1 NO. R-1 SPECIMEN $345,000 UNITED STATES OF AMERICA KODIAK ISLAND BOROUGH, ALASKA GENERAL’OBLIGATION SCHOOL BOND, 2020 SERIES A REGISTERED OWNER: PRINCIPAL AMOUNT: ALASKA MUNICIPAL BOND BANK THREEHUNDRED FORTY.~FIVE THOUSAND AND NO/io0 D~L’EARS " . annum as follows: Year Principal Interest Year Principal Interest (DeCernber 1) Installment Rate .(December 1) Instaiiment Rate 2021 $25,000 5.00% 2026 -:$35,000 5.00% 2022 130,000 5.00 2027 35,000 5.00 2023 30;000 5!00 2028 40,000 5.00 2024 30;000 5:00 2029 40,000 5.00 2025 35,000 5.00 2030 45,000 5.00 Loan Agreement between the Bond Bank or Financial Institution and the Borough (the "Loan Agreement,). When and if this Bond is not owned by the Bond Bank or a Financial Institution, 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 installmentpayment 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. Page 1 of 3 FG 53732879.1 This Bond is one of the General Obligation School Bonds of the Kodiak Island Borough, Alaska, of like tenor and effect except as to interest rate, serial number, right of redemption or prepayment and maturity, and constituting Bonds authorized for the purpose of paying the cost of school and related capital improvements in the Borough, and is issued under Resolution :No. FY2020-22 of the Borough entitled: A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY this Bond as the same shall become due. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts or things required by the constitution or statutes of the State of Alaska to exist, to h~ve happened, Or to have been performed precedent to or in the issuance of this Bond exist, have happened and have been performed, and that the series of Bonds of which this is one, together with all other indebtedness of the Borough, is within every debt and other limit prescribed by such constitution or statutes. Page 2 of 3 FG;53732879, I IN WITNESS WHEREOF, THE KODIAK ISLAND BOROUGH, ALASKA, has caused this Bond.to be signed in its name and on its behalf by the manua or facsimile signature of its Mayor anci its corporate seal (or a facsimile thereof) to be impressed otherwise reproduced hereon and attested by the manual or facsimile signature of its Borough Clerk, all as of the 7th day of July, 2020. KODIAK ISLAND BOROUGH i~orough Cl~rk [SEAL] Page 3 of 3 FG53732879 1 CERTIFICATE OF FINANCE DIRECTOR KODIAK ISLAND BOROUGH, ALASKA $345,000 GENERAL OBLIGATION SCHOOL BOND, 2020 SERIES A I, Dora Cross, certify as follows: 1. I am the duly appointed, qualified, and acting Finance Director of Kodiak Island Borough, Alaska (the "Borough"), and as such am authorized to execute this certificate. 2. Pursuant to Resolution No. FY2020-22 of the Borough, I have approved the dated date, denomination, principal and interest payment dates, principal amount, principal amount of each installment, interest rates, optional prepayment terms, and other details of the Borough’s General Obligation School Bond, 2020 Series A (the "2020A Bond"), as set forth in the 2020A Bond and the Loan Agreement relating to the 2020A Bond between the Borough and Alaska Municipal Bond Bank, dated as of July 7, 2020. 3. The determination of the foregoing matters is in accordance with Resolution No. F¥2020-22 of the Borough. Dated: July 7, 2020. Dora Cross, Finance Director PAYMENT, DELIVERY, AND APPLICATION OF PROCEEDS CERTIFICATE KODIAK ISLAND BOROUGH, ALASKA $345,000 GENERAL OBLIGATION SCHOOL BOND, 2020 SERIES A I, Dora Cross, certify as follows: 1. I am the duly appointed, qualified, and acting Finance Director of Kodiak Island Borough, Alaska (the "Borough"), and as such am authorized to execute this certificate. 2. On the date hereof, I delivered to the Alaska Municipal Bond Bank, Juneau, Alaska (the "Bond Bank") the $345,000 General Obligation School Bond, 2020 Series A of the Borough (the "2020A Bond"). 3. At or before the time of delivery of the 2020A Bond, the Borough received from the Bond Bank the following amounts as full payment for the 2020A Bond. Principal of 2020A Bond Original issue premium Total Sources of Funds $345,000.00 76,224.65 $421,224.65 4. The Borough will apply the amount received from the Bond Bank as payment for the 2020A Bond in the following manner. Project Fund Debt Service Account Costs of Issuance Underwriters’ Discount Total Uses of Funds $410,422.00 4,903.58 4,704.55 1,194.52 $421,224.65 Dated: July 7, 2020. Dora Cross, Finance Director I, Deven J. Mitchell, Executive Director of the Alaska Municipal Bond Bank, Juneau, Alaska, acknowledge receipt from Kodiak Island Borough, Alaska (the "Borough") of the following bond of the Borough: $345,000 General Obligation School Bond, 2020 Series A. Dated: July 7, 2020. Deven J. Mitchell, Executive Director Alaska Municipal Bond Bank FG:53732914.1 GFoster arvey July 7, 2020 Kodiak Island Borough, Alaska Alaska Municipal Bond Bank Re: Kodiak Island Borough, Alaska $345,000 General Obligation School Bond, 2020 Series A We have served as bond counsel to Kodiak Island Borough, Alaska (the "Borough"), in connection with the issuance of the above-referenced bond (the "2020A Bond"), and in that capacity have examined such law and such certified proceedings and other documents as we have deemed necessary to render this opinion. As to matters of fact material to this opinion, we have relied upon representations contained in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. The 2020A Bond is issued by the Borough pursuant to Resolution No. FY2020-22 (the "Resolution"), under and in accordance with the Constitution and laws of the State of Alaska and the ordinances and resolutions of the Borough. We express no opinion herein concerning the completeness or accuracy of any official statement, offering circular, or other sales or disclosure material relating to the issuance of the 2020A Bond or the Alaska Municipal Bond Bank General Obligation and Refunding Bonds, 2020 Series One (the "Bond Bank Bonds"), a portion of the proceeds of which are being used to acquire the 2020A Bond, or otherwise used in connection with the 2020A Bond or the Bond Bank Bonds. Under the Internal Revenue Code of 1986, as amended (the "Code"), the Borough is required to comply with certain requirements after the date of issuance of the 2020A Bond in order to maintain the exclusion of the interest on the 2020A Bond from gross income for federal income tax purposes, including, without limitation, requirements concerning the qualified use of 2020A Bond proceeds and the facilities financed or refinanced with 2020A Bond proceeds, limitations on investing gross proceeds of the 2020A Bond in higher yielding investments in certain circumstances, and the arbitrage rebate requirement to the extent applicable to the 2020A Bond. The Borough has covenanted in the Resolution to comply with those requirements, but if the Borough fails to comply with those requirements, interest on the 2020A Bond could become taxable retroactive to the date of issuance of the 2020A Bond. We have not undertaken and do not undertake to monitor the Borough’s compliance with such requirements. SEATTLE PORTLAND WASHINGTON, D,C. NEW YORK SPOKANE BEIJING Kodiak Island Borough, Alaska Alaska Municipal Bond Bank July 7, 2020 Page 2 Based upon the foregoing, as of the date of initial delivery of the 2020A Bond to the purchaser thereof and full payment therefor, it is our opinion that under existing law: 1. The Borough is a duly organized and legally existing second-class borough under the laws of the State of Alaska. 2. The Loan Agreement between the Borough and the Alaska Municipal Bond Bank dated July 7, 2020, relating to the 2020A Bond, has been duly authorized, executed, and delivered by the Borough and is a valid and binding obligation of the Borough, enforceable against the Borough in accordance with its terms, except only to the extent that enforcement may be limited by bankruptcy, insolvency, or other laws affecting creditors’ rights and by the application of equitable principles and the exercise of judicial discretion in appropriate cases. 3. The 2020A Bond has been duly authorized and issued by the Borough and is issued in full compliance with the provisions of the Constitution and laws of the State of Alaska and the ordinances and resolutions of the Borough relating thereto. 4. The Borough has pledged its full faith and credit to the payment of the principal of and interest on the 2020A Bond and has irrevocably pledged and covenanted 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 2020A Bond as the same become due and payable. 5. The 2020A Bond is a valid and binding general obligation of the Borough, except only to the extent that enforcement of payment may be limited by bankruptcy, insolvency, or other laws affecting creditors’ rights and by the application of equitable principles and the exercise of judicial discretion in appropriate cases. 6. Assuming compliance by the Borough after the date of issuance of the 2020A Bond with applicable requirements of the Code, the interest on the 2020A Bond is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the alternative minimum tax applicable to individuals; however, interest on the 2020A Bond received by certain S corporations may be subject to tax, and interest on the 2020A Bond received by foreign corporations with United States branches may be subject to a foreign branch profits tax. 7. Interest on the 2020A Bond is free from taxation by the State of Alaska except for transfer, estate, and inheritance taxes. We express no opinion regarding any other federal or state tax consequences of receipt of interest on the 2020A Bond. This opinion is given as of the date hereof, and we assume no obligation to 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. FG:53732884.1 Kodiak Island Borough, Alaska Alaska Municipal Bond Bank July 7, 2020 Page 3 We bring to your attention the fact that the foregoing opinions are expressions of our professional judgment on the matters expressly addressed and do not constitute guarantees of result. No attorney-client relationship has existed or exists between our firm and the Alaska Municipal Bond Bank in connection with the 2020A Bond or by virtue of this letter. Respectfully submitted, FOSTER GARVEY P.C. FG:53732884.1