FY2012-06 Solid Waste Disposal Facility Revenue Bonds 1 Introduced by: Borough Assembly
2 Requested by: Borough Assembly
3 Drafted by: Borough Attorney
Introduced on: 08/04/2011
4 Adopted on: 08/94/2011
5
6 KODIAK ISLAND BOROUGH
7 RESOLUTION NO. FY2012 -06
8
9 A RESOLUTION OF THE ASSEMBLY OF THE KODIAK ISLAND
10 BOROUGH PROVIDING FOR THE ISSUANCE OF SOLID WASTE
11 DISPOSAL FACILITY REVENUE BONDS OF THE BOROUGH FOR THE
12 PURPOSE OF PROVIDING AMOUNTS TO ACQUIRE, ENGINEER,
13 DESIGN, AND CONSTRUCT NECESSARY ADDITIONS AND
14 IMPROVEMENTS TO THE BOROUGH'S SOLID WASTE DISPOSAL
15 FACILITY; AND PROVIDING FOR THE DETAILS THEREOF
16
17 WHEREAS, the Kodiak Island Borough, Alaska, (the "Borough ") owns, operates and
18 maintains a solid waste disposal facility which is in need of certain additions, improvements
19 and extensions; and
20
21 WHEREAS, the Constitution and statutes of the State of Alaska and the ordinances of the
22 Borough permit the Borough to issue revenue bonds to finance any project which serves a
23 public purpose which bonds are secured only by the revenues of the project and which do
24 not constitute a debt or pledge of the faith and credit or taxing power of the Borough and
25 which may be authorized by the Assembly; and
26
27 WHEREAS, it is necessary to establish the form, conditions, covenants and method of sale
28 of such bonds and to make provision for establishing the amount, maturities, interest rates
29 and redemption rights and other terms;
30
31 NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND
32 BOROUGH, ALASKA:
33
34 Section 1. Purpose. The purpose of this resolution is to authorize the issuance and sale
35 of not to exceed $3,650,000 of solid waste disposal facility revenue bonds, to fix the form,
36 covenants and method of sale of the bonds, to provide for establishing the amount,
37 maturities, interest rates, redemption rights and other terms of the bonds and to fix the
38 conditions under which additional solid waste disposal facility revenue bonds may be issued
39 on a parity with the bonds.
40
41 Section 2. Definitions. As used in this resolution, unless a different meaning clearly
42 appears from the context:
43
Kodiak Island Borough Resolution No. FY2012 -06
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44 "Arbitrage and Tax Certificate" means the certificate executed and delivered by the
45 Borough at the time of issuance and delivery of the Bonds setting forth the Borough's
46 expectations as to the use of Bond proceeds.
47
48 "Annual Debt Service Requirement" means, with respect to any particular Fiscal
49 Year and to any specified bonds, an amount equal to (i) interest accruing during such Fiscal
50 Year on such bonds, except to the extent such interest is to be paid from deposits in the
51 Debt Service Subaccount from bond proceeds, (ii) the principal amount of such bonds due
52 during such Fiscal Year for which no sinking fund installments have been established, plus
53 (iii) the unsatisfied balance of any sinking fund installment for such bonds due during such
54 Fiscal Year.
55
56 "Assembly" means the general legislative authority of the Borough, as the same may
57 be constituted from time to time.
58
59 "Bond Account" means the Solid Waste Disposal Revenue Bond Account created by
60 Section 12 of this resolution.
61
62 "Bond Register" means the registration books maintained by the Registrar containing
63 the names and addresses of the owners of the Bonds.
64
65 "Bonds" means the Kodiak Island Borough, Alaska, Solid Waste Disposal Facility
66 Revenue Bonds, 2011.
67
68 "Bond Year" has the meaning given such term in the Arbitrage and Tax Certificate.
69
70 "Borough" means the Kodiak Island Borough, Alaska, a municipal corporation
71 organized and existing under the Constitution and laws of the State of Alaska.
72
73 "Code" means the Internal Revenue Code of 1986, as amended, and all applicable
74 regulations thereunder.
75
76 "Consulting Engineer" means an independent consulting engineer or engineering
77 firm licensed to practice in the State of Alaska, retained and appointed pursuant to Section
78 15(F).
79
80 "Debt Service Subaccount" means the Debt Service Subaccount created in the Bond
81 Account by Section 12 hereof.
82
83 "Facility" means the Borough's solid waste disposal facility.
84
85 "Fiscal Year" means the 12 -month period commencing on July 1 each year through
86 and including June 30 of the following calendar year.
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87
88 "Future Parity Bonds" means any solid waste disposal revenue bonds, notes or other
89 obligations of the Borough, other than the Bonds, issued under a resolution wherein the
90 Borough pledges that the payments to be made out of the Pledged Revenues into the Bond
91 Account and Reserve Subaccount therein to pay and secure the payment of the principal of
92 and interest on such revenue bonds, notes or other obligations will be on a parity with the
93 payments required by this resolution to be made out of such Pledged Revenues into such
94 Bond Account and Reserve Subaccount to pay and secure the payment of the principal of
95 and interest on the Bonds.
96
97 "Government Obligations" means direct obligations, or obligations on which the
98 payment of and interest on are unconditionally guaranteed by the United States.
99
100 "Loan Agreement" means the Loan Agreement between the Borough and the Alaska
101 Municipal Bond Bank.
102
103 "Net Revenues" means, for any Fiscal Year, all amounts received by the Borough
104 and deposited in the Solid Waste Disposal Fund and interest and profits derived from the
105 investment of moneys held in the Solid Waste Disposal Fund during such period, less
106 Operating Expenses for such period.
107
108 "Operating Expenses" means, for any Fiscal Year, the expenses incurred for
109 operation, maintenance or repair of the Facility. Operating Expenses shall not include any
110 allowances for depreciation or amortization or any principal, redemption price or purchase
111 price of, or interest on, any obligations of the Borough incurred in connection with and
112 payable from Pledged Revenues or any fee or charge in lieu of Borough taxes.
113
114 "Parity Bonds" means the Bonds and any Future Parity Bonds.
115
116 "Pledged Revenues" means Net Revenues and interest received and profits derived
117 from the investment of moneys obtained from moneys held in any fund solely to pay or
118 secure the payment of any Parity Bonds issued under this resolution.
119
120 "Registered Owner" means the person named as the registered owner of a Parity
121 Bond in the Bond Register.
122
123 "Registrar" means the Finance Director of the Borough.
124
125 "Reserve Subaccount" means the Reserve Subaccount created in the Bond Account
126 by Section 12 hereof.
127
128 "Reserve Subaccount Requirement" means an amount equal to the least of (i) 10%
129 of the initial principal amount of all outstanding Parity Bonds, (ii) 125% of the average
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130 Annual Debt Service Requirement for all outstanding Parity Bonds, and (iii) the maximum
131 Annual Debt Service Requirement on all outstanding Parity Bonds.
132
133 Section 3. Authorization of Bonds and Purpose of Issuance. The Borough shall enter
134 into the Loan Agreement and issue and sell an issue of revenue bonds designated "Kodiak
135 Island Borough, Alaska Solid Waste Disposal Facility Revenue Bonds, 2011" (the "Bonds ")
136 in the aggregate principal amount of not to exceed $3,650,000. The proceeds of the Bonds
137 shall be used to pay the costs of certain additions, betterments and extensions of the Facility
138 consisting principally of design, engineering, reconstruction and installation of a portion of
139 the Borough's Facility. These projects serve a public purpose of the Borough.
140
141 Section 4. Date, Maturities, Interest Rates and Other Details of the Bonds. The Bonds
142 shall be dated on such dates, and mature on such dates not later than December 31, 2026,
143 and shall bear interest from their date payable on such dates, and at such rates, not
144 exceeding 6% per annum, as the Manager or Finance Director may fix and determine at or
145 prior to the time of sale of the Bonds.
146
147 The Bonds shall be fully registered as to both principal and interest, shall be in the
148 denomination of $5,000 each, or any integral multiple thereof, and shall be numbered
149 separately in such manner and with any additional designation as the Registrar deems
150 necessary for purposes of identification.
151
152 Section 5. Place and Medium of Payment. Both principal of and interest on the Bonds
153 shall be payable in lawful money of the United States of America. For so long as all
154 outstanding Bonds are registered in the name of the Alaska Municipal Bond Bank, payments
155 of principal and interest thereon shall be made as provided in the Loan Agreement. In the
156 event that the Bonds are no longer registered in the name of the Alaska Municipal Bond
157 Bank, interest on the Bonds shall be paid to the Registered Owners of the Bonds at the
158 addresses for such Registered Owners appearing on the Bond Register on the 20th day of
159 the month preceding the interest payment date. Principal of the Bonds shall be payable
160 upon presentation and surrender of the Bonds by the Registered Owners at the principal
161 office of the Registrar.
162
163 Section 6. Registration.
164
165 A. Bond Register. The Bonds shall be issued only in registered form as to both
166 principal and interest. The Registrar shall keep, or cause to be kept, a bond register.
167
168 B. Registered Ownership. The Borough and the Registrar, each in its discretion,
169 may deem and treat the Registered Owner of each Bond as the absolute owner thereof for
170 all purposes, and neither the Borough nor the Registrar shall be affected by any notice to
171 the contrary. Payment of any such Bond shall be made only as described in Section 5
172 hereof, but such registration may be transferred as herein provided. All such payments
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173 made as described in Section 5 shall be valid and shall satisfy and discharge the liability of
174 the Borough upon such Bond to the extent of the amount or amounts so paid.
175
176 C. Transfer or Exchange. Bonds shall be transferred only upon the Bond
177 Register kept by the Registrar. Upon surrender for transfer or exchange of any Bond at the
178 office of the Registrar, with a written instrument of transfer or authorization for exchange in
179 form and with guaranty of signature satisfactory to the Registrar, duly executed by the
180 registered owner or its duly authorized attorney, the Borough shall execute and the
181 Registrar shall deliver an equal aggregate principal amount of Bonds of the same maturity of
182 any authorized denominations, subject to such reasonable regulations as the Registrar may
183 prescribe and upon payment sufficient to reimburse it for any tax, fee or other governmental
184 charge required to be paid in connection with such transfer or exchange. All Bonds
185 surrendered for transfer or exchange shall be cancelled by the Registrar. The Registrar
186 shall not be required to transfer or exchange Bonds subject to redemption during the 15
187 days preceding any principal or interest payment date or the date of mailing of notice of
188 redemption of such Bonds, or any Bond after such Bond has been called for redemption.
189
190 D. Registration Covenant. The Borough covenants that, until all Bonds have
191 been surrendered and cancelled, it will maintain a system for recording the ownership of
192 each Bond that complies with the provisions of Section 149 of the Code.
193
194 Section 7. Redemption. The Bonds maturing on or after September 1, 2022 are subject
195 to redemption on or after September 1, 2021, and may be redeemed at the times and in the
196 manner described in the Loan Agreement. When the Borough determines to redeem any
197 Bonds not owned by the Bond Bank:
198
199 A. The Borough shall give notice of such redemption, which notice shall state
200 the redemption date and identify the Bonds to be redeemed by reference to their numbers
201 and further state that on such redemption date there shall become due and payable upon
202 each such Bond the principal amount thereof plus the applicable premium, if any (the
203 "Redemption Price "), together with interest accrued to the redemption date, and that from
204 and after such date interest thereon shall cease to accrue. Such notice shall be given at
205 least thirty (30) days but not more than forty -five (45) days prior to the redemption date by
206 first class mail, postage prepaid, to the registered owner of any Bond to be redeemed at the
207 address appearing on the Bond Register.
208
209 B. Notice of Redemption having been given in the manner provided in this
210 Resolution, the Bonds so called for redemption shall become due and payable on the
211 redemption date stated in the notice at the applicable Redemption Price plus interest
212 accrued and unpaid to the redemption date upon presentation and surrender thereof,
213 together with a written instrument of transfer duly executed by the registered owner or the
214 owner's duly authorized attorney.
215
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216 Section 8. Form of Bonds. The form of the Bonds shall be substantially as follows:
217
218 No. $
219
220 UNITED STATES OF AMERICA
221
222 KODIAK ISLAND BOROUGH, ALASKA
223 SOLID WASTE DISPOSAL FACILITY REVENUE BOND, 2011
224
225 REGISTERED OWNER:
226
227 PRINCIPAL AMOUNT:
228
229 The Kodiak Island Borough, Alaska (the "Borough"), a municipal corporation of the State of
230 Alaska, hereby acknowledges itself to owe and for value received promises to pay to the
231 Registered Owner identified above, or its registered assigns, from the sources stated herein,
232 the Principal Amount indicated above in the following installments on of each
233 of the following years, and to pay, from the sources stated herein, interest on such
234 installments from the date hereof, payable on , 2012 and semiannually
235 thereafter on the first days of each and of each year, at the
236 rates per annum as follows:
237
238 Maturity Principal Interest
239 Date Amount Rate
240
241 For so long as this Bond is owned by the Alaska Municipal Bond Bank (the "Bond
242 Bank "), payment of principal and interest shall be made as provided in the Loan Agreement
243 between the Bond Bank and the Borough. In the event that this Bond is no longer owned by
244 the Bond Bank, payment of principal of and interest on this Bond will be made by check or
245 draft mailed by first class mail to the registered owner at the address appearing on the bond
246 register of the Borough, provided that the final installment of principal and interest on this
247 Bond will be payable at the office of the Finance Director (the "Registrar") upon surrender of
248 this Bond. Interest shall be computed on the basis of a 360 -day year composed of twelve
249 30 -day months. Both principal of and interest on this bond are payable in lawful money of
250 the United States of America solely out of the special fund of the Borough known as the
251 "Solid Waste Disposal Revenue Bond Account" created by Section 12 of Resolution No. FY
252 2012-
253
254 This bond is one of an issue of bonds (the "Bonds") of like date and tenor except as
255 to number, rate of interest, and date of maturity, aggregating the principal sum of
256 $ and is issued pursuant to the Constitution and statutes of the State of Alaska
257 and the duly adopted resolutions and ordinances of the Borough, including Resolution No.
258 FY 2012- (the "Bond Resolution "). The definitions contained in the Bond Resolution
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259 shall apply to capitalized terms contained herein. The Bonds are being issued for the
260 purpose of financing certain design, engineering, and capital improvements to the Borough's
261 Solid Waste Disposal Facility.
262
263 Bonds owned by the Bond Bank, or its registered assigns, maturing on or after
264 , may be called for redemption on or after _, 20_on any
265 date, in whole or in part, at the option of the Borough at a price equal to 100% of the
266 principal amount thereof to be redeemed plus accrued interest to the date of redemption as
267 described in the Loan Agreement.
268
269 Bonds not owned by the Bond Bank maturing on or after September 1, 2022 may be
270 called for redemption by or on behalf of the Borough prior to maturity and upon notice as set
271 forth in the Bond Resolution as a whole on any date or in part on or after September 1, 2021
272 at a redemption price of 100% of the principal amounts thereof, together with interest
273 thereon to the redemption date.
274
275 The Borough does hereby pledge and bind itself to set aside out of Pledged
276 Revenues of the Borough and to pay into the Bond Account the various amounts required
277 by the Bond Resolution to be paid into and maintained in the Bond Account all within the
278 times provided in the Bond Resolution.
279
280 The pledge of Pledged Revenues contained herein and in the Bond Resolution may
281 be discharged by making provision, at any time, for the payment of the principal of and
282 interest on this Bond in the manner provided in the Bond Resolution.
283
284 The pledge of amounts to be paid into the Bond Account is hereby declared to be a
285 lien and charge upon the Pledged Revenues superior to all other charges of any kind or
286 nature and equal in rank to the lien and charge thereon for amounts pledged to the payment
287 of any Future Parity Bonds hereafter issued.
288
289 The Borough has further bound itself to maintain the Facility in good condition and
290 repair, to operate the same in an efficient manner and at a reasonable cost, and to
291 establish, maintain and collect fees for as long as any Parity Bonds are outstanding that will
292 provide Pledged Revenues in an amount equal to at least 1.25 times the maximum Debt
293 Service Requirement for such year on all outstanding Parity Bonds.
294
295 It is hereby certified that all acts, conditions and things required by the Constitution
296 and statutes of the State of Alaska and the resolutions of the Borough to be done precedent
297 to and in the issuance of this bond have happened, been done and performed.
298
299 IN WITNESS WHEREOF, the Kodiak Island Borough, Alaska, has caused this bond
300 to be executed with the manual or facsimile signature of its Mayor and to be countersigned
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301 with the manual or facsimile signature of its Clerk and the official seal of the Borough to be
302 impressed or imprinted hereon, as of this day of , 2011.
303
304 KODIAK ISLAND BOROUGH, ALASKA
305
306
307
308 Jerome M. Selby, Borough Mayor
309
310 ATTEST:
311
312
313
314 Nova M. Javier, MMC, Borough Clerk
315
316 Section 9. Execution of Bonds. The Bonds shall be executed on behalf of the Borough
317 with the manual or facsimile signature of the Mayor of the Borough, attested by the manual
318 or facsimile signature of the Clerk. The official seal of the Borough shall be impressed or
319 imprinted on each Bond. The execution of a Bond on behalf of the Borough by persons that
320 at the time of the execution are duly authorized to hold the proper offices shall be valid and
321 sufficient for all purposes, regardless of whether any such person shall have ceased to hold
322 office at the time of issuance and delivery of the Bond or shall not have held office on the
323 date of the Bond.
324
325 Section 10. Mutilated, Destroyed, Stolen or Lost Bonds. Upon surrender to the Registrar
326 of a mutilated Bond, the Borough shall execute and deliver a new Bond of like maturity and
327 principal amount. Upon filing with the Registrar of evidence satisfactory to the Borough that
328 a Bond has been destroyed, stolen or lost and of the ownership thereof, and upon furnishing
329 the Borough with indemnity satisfactory to it, the Borough shall execute and deliver a new
330 Bond of like maturity and principal amount. The person requesting the authentication and
331 delivery of a new Bond pursuant to this section shall comply with such other reasonable
332 regulations as the Borough may prescribe and pay such expenses as the Borough may
333 incur. Any Bonds issued pursuant to this section in substitution for Bonds alleged to be
334 destroyed, stolen or lost shall constitute original additional contractual obligations on the part
335 of the Borough, whether or not the Bonds alleged to be destroyed, stolen or lost be at any
336 time enforceable by anyone, and shall be equally and proportionately secured with all other
337 Bonds issued hereunder.
338
339 Section 11. Priority of Use of Pledged Revenues. Pledged Revenues are hereby pledged
340 to and shall be used only for the following purposes and in the following order of priority:
341
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342 First, to make all payments, including sinking fund payments, required to be made
343 into the Debt Service Subaccount for the payment of the principal of and interest on Parity
344 Bonds;
345
346 Second, to make all payments required to be made into the Reserve Subaccount;
347
348 Third, to make all payments, including sinking fund payments, required to be made
349 into a subordinate lien debt service account for the payment of the principal of and interest
350 on any subordinate lien bonds;
351
352 Fourth, to make all payments required to be made into a reserve account for
353 subordinate lien bonds; and
354 Fifth, to pay the costs of additions, betterments, improvements and repairs to and
355 extensions and replacements of the Facility, to purchase or redeem Facility improvement
356 revenue bonds or notes of the Borough, or for any other proper purpose in connection with
357 the operation of the Facility.
358
359 Section 12. Solid Waste Disposal Revenue Bond Account and Subaccounts Therein.
360 There is hereby created a special restricted account within the Solid Waste Fund of the
361 Borough known as the "Solid Waste Disposal Revenue Bond Account" (the "Bond
362 Account "), which account is to be drawn upon for the sole purpose of paying the principal of
363 and interest and premium, if any, on all Parity Bonds. The Bond Account consists of two
364 subaccounts, the Debt Service Subaccount and the Reserve Subaccount. Amounts
365 pledged to be paid into the Bond Account are hereby declared to be a lien and charge upon
366 Pledged Revenues superior to all other charges of any kind or nature and equal in rank to
367 the charge thereon to pay and secure the payment of the principal of and interest on all
368 Parity Bonds.
369
370 From and after the time of issuance and delivery of the Bonds and as long thereafter
371 as any of the same remain outstanding, the Borough hereby irrevocably obligates and binds
372 itself to set aside and pay the following each month into the Debt Service Subaccount out of
373 Pledged Revenues on or before the date due:
374
375 A. Such amounts, in approximately equal monthly installments, as will be
376 sufficient to accumulate the amount required to pay the interest scheduled to become due
377 on Parity Bonds on the next interest payment date; and
378
379 B. Such amounts, in approximately equal monthly installments, as will be
380 sufficient to accumulate (i) the principal amount of all Parity Bonds due for which no sinking
381 fund installments have been established, plus (ii) the unsatisfied balance of any sinking fund
382 installment for Parity Bonds, in each case during the next 12 months.
383
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384 C. For so long as Parity Bonds are held by the Bond Bank, the Borough will pay
385 such amounts into the Debt Service Subaccount out of Pledged Revenues as may be
386 required by the Loan Agreement.
387
388 Moneys in the Debt Service Subaccount may be held in cash or invested in
389 accordance with Borough policy such that investments will mature prior to the time such
390 money is required for the payment of the principal of or interest on the Parity Bonds. All
391 interest earned on and profits derived from such investments shall remain in and become a
392 part of the Debt Service Subaccount.
393
394 Section 13. Reserve Subaccount. The Borough hereby covenants and agrees that it will
395 at the time of issuance of the Bonds cause amounts to be paid into the Reserve Subaccount
396 such that the total amount in the Reserve Subaccount will be equal to the Reserve
397 Subaccount Requirement.
398
399 The Borough further covenants and agrees that it will set aside and pay into the
400 Reserve Subaccount amounts from Pledged Revenues, commencing with the first month
401 following the closing and delivery of the Bonds, so that the amount on deposit in the
402 Reserve Subaccount will at all times be at least equal to the Reserve Subaccount
403 Requirement.
404
405 The Borough further covenants and agrees that in the event it issues any Future
406 Parity Bonds hereafter it will provide in each resolution authorizing the same that at the time
407 of issuance of such Future Parity Bonds payments will be made into the Reserve
408 Subaccount such that the total amount of such payments together with the money already in
409 the Reserve Subaccount will be equal to the Reserve Subaccount Requirement.
410
411 The Borough further covenants and agrees that it will at all times maintain therein an
412 amount at least equal to the Reserve Subaccount Requirement until there is a sufficient
413 amount in the Bond Account and Reserve Subaccount to pay the principal of, premium, if
414 any, and interest on all outstanding Parity Bonds in the manner set forth in Section 19
415 hereof , at which time the money in the Reserve Subaccount may be used to pay such
416 principal, premium, if any, and interest; provided, however, that moneys in the Reserve
417 Subaccount may be withdrawn, or set aside in a special account in the Bond Account
418 pursuant to Section 19 of this resolution, to pay (with or without other available funds) the
419 principal, premium, if any, and interest on all of the outstanding Parity Bonds of any single
420 issue or series payable out of the Bond Account, so long as the moneys remaining on
421 deposit in the Reserve Subaccount are at least equal to the Reserve Subaccount
422 Requirement on all of the remaining outstanding Parity Bonds. The Borough may, from time
423 to time, transfer from the Reserve Subaccount to the Debt Service Subaccount amounts in
424 excess of the Reserve Subaccount Requirement.
425
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426 In the event there shall be a deficiency in the Debt Service Subaccount for meeting
427 maturing installments of either principal of or interest on Parity Bonds, such deficiency shall
428 be made up from the Reserve Subaccount by the withdrawal of cash therefrom. Any
429 deficiency created in the Reserve Subaccount by reason of any such withdrawal shall then
430 be made up from Pledged Revenues first available therefor after making necessary
431 provision for the required payments into the Debt Service Subaccount.
432
433 All money in the Reserve Subaccount may be kept in cash or invested in accordance
434 with the Arbitrage and Tax Certificate. Such investments shall mature not later than the last
435 maturity of Parity Bonds outstanding at the time of their purchase. Interest on any such
436 investments and /or any profits realized from the sale thereof shall be deposited in and
437 become a part of the Debt Service Subaccount.
438
439 Section 14. Investment of Certain Accounts. Moneys held in the Bond Account and in the
440 Reserve Subaccount shall be invested and reinvested to the fullest extent practicable in
441 accordance with Borough policy, such investments to mature not later than at such times as
442 shall be necessary to provide moneys when needed for payments to be made from such
443 Accounts, and in the case of the Reserve Subaccount not later than November 1, 2026.
444
445 Nothing in this resolution shall prevent any Government Obligations from being
446 issued or held in book -entry form on the books of the Department of the Treasury of the
447 United States.
448
449 Obligations purchased as an investment of moneys in any Account or Subaccount
450 created under this resolution shall be deemed at all times to be a part of such Account or
451 Subaccount and any profit realized from the liquidation of such investment shall be credited
452 to such Account or Subaccount and any loss resulting from the liquidation of such
453 investment shall be charged to the respective Account or Subaccount.
454
455 Section 15. Specific Covenants. The Borough hereby covenants with the owners of each
456 of the Parity Bonds for so long as any of the same remain outstanding as follows:
457
458 A. The Borough will establish, maintain, and collect Facility fees and Net
459 Revenues in each Fiscal Year that will provide Pledged Revenues in an amount equal to the
460 amount of the Annual Debt Service Requirement for such year on all outstanding Parity
461 Bonds. For so long as the Parity Bonds are held by the Alaska Municipal Bond Bank, the
462 Borough will establish, maintain, and collect Facility fees and Net Revenues as required by
463 the terms of the Loan Agreement, and the Finance Director will provide a certificate annually
464 to the Bond Bank as to compliance with this covenant.
465
466 B. The Borough will at all times maintain, preserve and keep the Facility and
467 every part and parcel thereof in good repair, working order and condition; will from time to
468 time make or cause to be made all necessary and proper repairs, renewals and
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469 replacements thereto so that the business carried on in connection therewith may be
470 properly and advantageously conducted; and will at all times operate the Facility in an
471 efficient manner and at a reasonable cost.
472
473 C. The Borough will at all times carry such forms of insurance on such of the
474 buildings, equipment, and property of the Facility as are ordinarily insured in such amounts
475 and with such deductibles as under good business practice are ordinarily carried on such
476 facilities. All such insurance shall be carried with responsible insurers and the policies shall
477 be payable to the Borough.
478
479 D. The Borough will keep and maintain proper books and accounts with respect
480 to the operation of the Facility in such manner as prescribed by any authorities having
481 jurisdiction over the Facility; will cause its books and accounts to be audited annually be a
482 certified public accountant not later than 210 days following the end of each Fiscal Year,
483 copies of which audits shall, upon request, be furnished to the owners of the Parity Bonds.
484 The audit shall show whether or not the Borough has in all respects performed and complied
485 with the covenants set forth in this resolution, including the payments into the Debt Service
486 Subaccount and Reserve Subaccount provided for herein.
487
488 E. All employees and agents of the Borough collecting or handling money of the
489 Borough in connection with the management and operation of the Facility shall be bonded in
490 an amount commensurate with the funds they handle and in an amount sufficient to protect
491 the Borough from loss.
492
493 F. The Borough will not sell or otherwise dispose of the Facility unless
494 contemporaneously with such sale or disposal there shall be paid into the Bond Account a
495 sum sufficient to pay the principal of and interest on all Parity Bonds then outstanding to the
496 date or dates on which they first may be redeemed, nor will it sell or otherwise dispose of
497 any part of the Facility which is material to the production of Pledged Revenues unless, in
498 the opinion of a Consulting Engineer, the remaining Facility will generate Pledged Revenues
499 sufficient to enable the Borough to comply with the requirements of this resolution and each
500 resolution authorizing the issuance of Future Parity Bonds.
501
502 G. The Borough will not at any time create or permit to accrue or exist any lien or
503 other encumbrance or indebtedness upon the Facility or the Pledged Revenues, or any part
504 thereof, or upon any Account or Subaccount created hereunder, prior or superior to the lien
505 thereon for the payment of the Parity Bonds, and will pay and discharge, or cause to be paid
506 and discharged, any and all lawful claims for labor, materials or supplies which, if unpaid,
507 might become a lien or charge upon the Pledged Revenue, or any part thereof, or upon any
508 Account or Subaccount in the hands of the Borough, prior or superior to the lien of the Parity
509 Bonds, or which might impair the security of the Parity Bonds.
510
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•
511 H. The Borough will not expend any of the Pledged Revenues or the proceeds
512 of any indebtedness payable from Pledged Revenues for any additions, betterments or
513 improvements to the Facility which are not economically sound and which will not properly
514 and advantageously contribute to the conduct of the business of the Facility in an efficient
515 and economical manner.
516
517 I. At any and all times the Borough shall, as far as it may be authorized by law,
518 make, do, execute, acknowledge, and deliver all further resolutions, acts, deeds,
519 conveyances, assignments, transfers, and assurances as may be necessary or desirable for
520 better assuring, conveying, granting, pledging, assigning, and confirming all and singular the
521 rights, revenues, and other funds, moneys, and securities pledged or assigned under the
522 resolution, or intended so to be, or which the Borough may become bound to pledge or
523 assign.
524
525 J. The Borough is duly authorized under all applicable laws to create and issue
526 the Bonds and to adopt this resolution and to pledge the Pledged Revenues and other
527 funds, moneys, and securities purported to be pledged by this resolution in the manner and
528 to the extent provided in this resolution. The Pledged Revenues and other funds, moneys,
529 and securities so pledged are and will be free and clear of any pledge, lien, charge, or
530 encumbrance thereon or with respect thereto prior to, or of equal rank with, the pledge and
531 assignment created by this resolution, and all corporate or other action on the part of the
532 Borough to that end has been and will be duly and validly taken. The Bonds and the
533 provisions of this resolution are and will be the valid and legally enforceable obligations of
534 the Borough in accordance with their terms and the terms of this resolution.
535
536 K. The Borough has, and will have so long as any Parity Bonds are outstanding,
537 good right, and lawful power to operate, maintain, and repair the Facility and to fix and
538 collect rates, fees, and other charges related to the Facility.
539
540 L. The Borough shall do and perform or cause to be done and performed all
541 acts and things required to be done or performed by or on behalf of the Borough under
542 applicable laws and this resolution.
543
544 Section 16. Parity Bonds. As described in this Section 16, the Borough may issue Parity
545 Bonds. The Borough hereby covenants with the owners of each of the Parity Bonds for so
546 long as the same remain outstanding that it will not issue any bonds having a greater or
547 equal lien on Pledged Revenues to pay and secure the payment of the principal of and
548 interest on such bonds than the lien created thereon to pay and secure the payment of the
549 principal of and interest on the Parity Bonds except that the Borough reserves the right to
550 issue future Parity Bonds as follows:
551
552 A. For the purpose of acquiring, constructing and installing additions,
553 betterments and improvements to and extensions of, acquiring necessary property and
Kodiak Island Borough Resolution No. FY2012 -06
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554 equipment for, or making necessary replacements or repairs to the Facility, for funding
555 interest and reserves and for the purpose of refunding at or prior to their redemption or
556 maturity any outstanding revenue bonds or notes of the Borough that have a lien on
557 Pledged Revenues for the payment of the principal thereof and interest thereon junior and
558 inferior to the lien on Pledged Revenues for the payment of the principal of and interest on
559 the Bonds and upon compliance with the following conditions:
560
561 (1) The Borough will covenant in each resolution authorizing the issuance of
562 Future Parity Bonds that it will pay into and maintain in the Reserve Subaccount the
563 amounts required by Section 13 of this resolution to be paid into and maintained in the
564 Reserve Subaccount in the event Future Parity Bonds are issued.
565
566 (2) At the time of the issuance of such Future Parity Bonds the Borough shall
567 have on file a certificate of the Finance Director showing that the "annual income available
568 for revenue bond debt service," as hereinafter set forth, shall be at least equal to 1.25 times
569 the maximum Annual Debt Service Requirement on all outstanding Parity Bonds and the
570 Future Parity Bonds being issued.
571
572 Such "annual income available for revenue bond debt service" shall be determined
573 by adding the following:
574
575 (I) The historical Pledged Revenues for any 12 consecutive
576 months out of the 24 months immediately preceding the month of delivery of the Future
577 Parity Bonds being issued.
578
579 (ii) The estimated annual Pledged Revenues to be derived from
580 the operation of any additions or improvements to or extensions of the Facility under
581 construction but not completed at the time of such certificate and not being paid for out of
582 the proceeds of sale of such Future Parity Bonds being issued, and which Pledged
583 Revenues are not otherwise included in any of the sources of Pledged Revenues described
584 in this subsection (2).
585
586 (Hi) The estimated Pledged Revenues to be derived from the
587 operation of any additions and improvements to or extensions of the Facility being paid for
588 out of the proceeds of sale of such Future Parity Bonds being issued.
589
590 The computation of "annual income available for revenue bond debt service" shall be
591 adjusted to reflect the Facility fees effective on the date of such certificate or approved by
592 the regulatory authority with jurisdiction to become effective thereafter if there has been any
593 change in such rates and charges put into effect or so approved during or after such 12-
594 consecutive -month base period.
595
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596 Notwithstanding the preceding provisions of this subparagraph (2), the certificate
597 referred to above shall not be required if one -half of Pledged Revenues, verified from certain
598 financial statements of the Facility, for a period of any consecutive two out of the three
599 Fiscal Years immediately preceding the issuance and delivery of such Future Parity Bonds,
600 was equal to at least 1.25 times the maximum Annual Debt Service required to be paid in
601 any Fiscal Year succeeding the date of issuance of such Future Parity Bonds on all
602 outstanding Parity Bonds and the Future Parity Bonds being issued.
603
604 Further, notwithstanding the preceding provisions of this subparagraph (2), Future
605 Parity Bonds may be issued if the Borough shall have on file a certificate stating that the
606 Pledged Revenues for the next full Fiscal Year after the initial operation of any additions or
607 improvements to or extensions of the Facility being paid for out of the proceeds of the
608 Future Parity Bonds will be at least equal to [1.25] times the maximum Annual Debt Service
609 Requirement on all outstanding Parity Bonds and the Future Parity Bonds being issued; and
610 that at the time of the issuance of such Future Parity Bonds there is no deficiency in the
611 Debt Service Subaccount or Reserve Subaccount.
612
613 B. For the purpose of refunding at or prior to their redemption or maturity any
614 part or all of the then outstanding Parity Bonds if the issuance of such refunding Future
615 Parity Bonds does not require a greater amount to be paid out of Pledged Revenues for
616 principal and interest over the life of such refunding Future Parity Bonds being refunded,
617 and if the conditions required in subsections (a)(1) and (a)(3) of this section are complied
618 with.
619
620 Proceeds of Parity Bonds to be used to fund interest or reserves shall be deposited
621 in the Debt Service Subaccount or the Reserve Subaccount, as the case may be.
622
623 Section 17. Subordinate Lien Bonds. Nothing contained herein shall prevent the Borough
624 from issuing revenue bonds or notes which are a charge upon Pledged Revenues
625 subordinate or inferior to the payments required herein to be made therefrom into the Debt
626 Service Subaccount and Reserve Subaccount, or from issuing solid waste disposal revenue
627 bonds to refund maturing bonds for the payment of which moneys are not otherwise
628 available.
629
630 Section 18. Covenants Regarding Arbitrage and Private Activity Bonds. The Borough
631 hereby covenants that it will not make any use of the proceeds of sale of the Bonds or any
632 other funds of the Borough which may be deemed to be proceeds of such Bonds pursuant
633 to Section 148 of the Code which will cause the Bonds to be "arbitrage bonds" within the
634 meaning of such section and the regulations applicable thereunder. The Borough will
635 comply with the requirements of Section 148 of the Code (or any successor provision
636 thereof applicable to the Bonds) and the applicable regulations thereunder throughout the
637 term of the Bonds.
638
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639 The Borough further covenants that it will not take any action or permit any action to
640 be taken that would cause the Bonds to constitute "private activity bonds" under Section 141
641 of the Code. The Borough will take any action determined by the Borough, after
642 consultation with its bond counsel, to be legal and practicable and required to be taken by
643 the Borough under future federal laws or regulations in order to maintain the exemption of
644 the interest on the Bonds from federal income taxation.
645
646 Section 19. Defeasance. In the event that money and /or Government Obligations
647 maturing at such time or times and bearing interest to be earned thereon in amounts
648 sufficient to redeem and retire any or all of the Bonds in accordance with their terms are set
649 aside in a special restricted account in the Bond Account to effect such redemption or
650 retirement and such money and the principal of and interest on such obligations are
651 irrevocably set aside and pledged for such purpose, then no further payments need to be
652 made into the Bond Account for the payment of the principal of and interest on such Bonds,
653 and such Bonds shall cease to be entitled to any lien, benefit or security of this resolution
654 except the right to receive the funds so set aside and pledged, and such Bonds shall be
655 deemed not to be outstanding hereunder or under any other resolution authorizing the
656 issuance of Future Parity Bonds.
657
658 Section 20. General Authorization to Municipal Officials. After the sale of the Bonds, the
659 proper officials of the Borough are hereby authorized and directed to do everything
660 necessary to complete such sale and to deliver the Bonds to the purchaser thereof upon
661 payment of the purchase price thereof.
662
663 Section 21. Amendatory and Supplemental Resolutions.
664
665 A. The Assembly from time to time and at any time may pass a resolution or
666 resolutions supplemental hereof, which resolution or resolutions thereafter shall become a
667 part of this resolution, for any one or more of the following purposes:
668
669 (1) To add to the covenants and agreements of the Borough contained in
670 this resolution, other covenants and agreements thereafter to be observed, or to surrender
671 any right or power herein reserved to or conferred upon the Borough.
672
673 (2) To make such provisions for the purpose of curing any ambiguities or
674 of curing, correcting or supplementing any defective provision contained in this resolution or
675 in regard to matters or questions arising under this resolution as the Assembly may deem
676 necessary or desirable and not inconsistent with this resolution and which shall not
677 adversely affect the interest of the owners of Parity Bonds.
678
679 Any such supplemental resolution of the Assembly may be adopted without the
680 consent of the owner of any Parity Bonds at any time outstanding, notwithstanding any of
681 the provisions of subsection B of this section.
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682
683 B. With the consent of the owners of not less than 60% in aggregate principal
684 amount of Parity Bonds at the time outstanding, the Assembly may pass a resolution or
685 resolutions supplemental hereto for the purpose of adding any provisions to or changing in
686 any manner or eliminating any of the provisions of this resolution or of any supplemental
687 resolution; provided, however, that no such supplemental resolution shall:
688
689 (1) Extend the fixed maturity of any of the Parity Bonds, or reduce the
690 rate of interest thereon, or reduce the amount or change the date of any sinking fund
691 installment requirement, or extend the time of payments of interest from their due date, or
692 reduce the amount of the principal thereof, or reduce any premium payable on the
693 redemption thereof, without the consent of the owner of each Parity Bond so affected; or
694
695 (2) Reduce the aforesaid percentage of owners of Parity Bonds required
696 to approve any such supplemental resolution without the consent of the owners of all of the
697 Parity Bonds then outstanding; or
698
699 (3) Remove the pledge and lien of this resolution on Pledged Revenues.
700
701 It shall not be necessary for the consent of the owners of Parity Bonds under
702 this subsection B to approve the particular form of any proposed supplemental resolution,
703 but it shall be sufficient if such consent shall approve the substance thereof.
704
705 C. Upon the passage of any supplemental resolution pursuant to the provisions
706 of this section, this resolution shall be deemed to be modified and amended in accordance
707 therewith, and the respective rights, duties and obligations of the Borough under this
708 resolution and all owners of Parity Bonds outstanding hereunder shall thereafter be
709 determined, exercised and enforced thereunder, subject in all respects to such modification
710 and amendment, and all the terms and conditions of any such supplemental resolution shall
711 be deemed to be part of the terms and conditions of this resolution for any and all purposes.
712
713 D. Parity Bonds executed and delivered after the execution of any supplemental
714 resolution adopted pursuant to the provisions of this section may bear a notation as to any
715 matter provided for in such supplemental resolution, and if such supplemental resolution
716 shall so provide, new Parity Bonds so modified as to conform, in the opinion of the
717 Assembly, to any modification of this resolution contained in any such supplemental
718 resolution, may be prepared by the Borough and delivered without cost to the owners of
719 Parity Bonds then outstanding, upon surrender for cancellation of such Parity Bonds in
720 equal aggregate principal amounts.
721
722 Section 22. Disposition of the Proceeds of Sale of the Bonds. The proceeds received
723 from the sale of the Bonds (exclusive of accrued interest, if any, which shall be paid into the
724 Debt Service Subaccount) shall be deposited into the fund of the Borough designated by the
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725 Finance Director and shall be used to pay all costs allocable to the issuance of the Bonds
726 and to undertake improvements authorized by Section 3 of this resolution.
727
728 Section 23. Loan Agreement. The Manager and Finance Director are each authorized to
729 enter into a Loan Agreement with the Alaska Municipal Bond Bank providing for and relating
730 to the sale of the Bonds to the Alaska Municipal Bond Bank and the Manager and Finance
731 Director are authorized to cause the same to be executed and delivered on behalf of the
732 Borough.
733
734 Section 24. Continuing Disclosure. The Borough acknowledges that, under Rule 15c2 -12
735 of the Securities and Exchange Commission (the "Rule ") the Borough may now or in the
736 future be an "obligated person" with respect to the Bond Bank bonds. In accordance with
737 the Rule, and as set forth in the Loan Agreement, the Borough shall undertake to provide
738 certain annual financial information and operating data and execute a continuing disclosure
739 agreement. Notwithstanding any other provision of this Resolution, failure of the Borough to
740 comply with the continuing disclosure obligations shall not be considered a default of the
741 Borough's obligations under this Resolution or the Parity Bonds; however the beneficial
742 owner of any Parity Bond may bring an action for specific performance, to cause the
743 Borough to comply with its continuing disclosure obligations under the Rule.
744
745 Section 25. Severability. If any one or more of the covenants or agreements provided in
746 this resolution to be performed on the part of the Borough shall be declared by any court of
747 competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or
748 agreements shall be null and void and shall be deemed separable from the remaining
749 covenants and agreements in this resolution and shall in no way affect the validity of the
750 other provisions of this resolution or of the Bonds.
751
752 Section 26. Effective Date. This resolution shall become effective immediately.
753
754 ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH
755 THIS FOURTH DAY OF AUGUST, 2011
756
757 KODIAK ISLAND BOROUGH
758
759
760 "
761 ATTEST: Jer me M. Selby, Borg: -v•
762 n
763 c M' . 7
n
764 . -
765 Nova M. Javier, MM' , Borough Clerk
766
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