Transcript of KIB 2001 Solid Waste Revenue Bonds
KODIAK ISLAND BOROUGH, ALASKA $3,275,000 SOLID WASTE REVENUE BONDS, 2011 Dated: September 15, 2011 Delivered: September 15, 2011 TABLE OF CONTENTS 1. General Certificate of the Kodiak
Island Borough 2. Certified Copy of Resolution FY 2012-06 3. Proof of Notice of August 4, 2011 Borough Assembly Meeting 4. Certified Copy of a Portion of the Minutes of August 4, 2011
Borough Assembly MeetinQ ShowinQ Adoption of Resolution FY 2012-06 5. Certificate of Finance Director Fixing Date, Maturities, Interest Rates and Other Details of the Bonds 6. Loan Agreement
7. Subordination Agreement and ACWF Loan number 505041 8. Specimen Bond 9. Signature Certificate 10. Certificate as to Arbitrage and Tax Compliance 11. Certificate of Compliance with
Rule 15c-2-12 12. Certificate of Delivery and Payment and Receipt of Purchaser 13. Opinion of Wohlforth, Brecht, Cartledge & Brooking 14. No Litigation Opinion of Borough Attorney 15.
IRS 8038-G and Proof of Mailing The Preliminary Official Statement and Official Statement relating to the $78,115,000 Alaska Municipal Bond Bank General Obligation Bonds, 2011 Series
Three ("Bond Bank Bonds") are found in the transcript of proceedings related to the Bond Bank Bonds. I:\Docs\41 016001 \Closing Documents Kodiak\TOC.docx
Aug 24, 2011 2:31 pm Prepared by Morgan Stanley /BWR (Finance 6.020 Alaska Muni Bnd Bnk (pricing):2011) Page 106 SOURCES AND USES OF FUNDS Alaska Municipal Bond Bank Authority Kodiak
-Solid Waste Project New Money Dated Date Delivery Date Sources: Bond Proceeds: Par Amount Premium Other Sources of Funds: Bond Bank Contribution Uses: Project Fund Deposits: Project
Fund Delivery Date Expenses: Cost of Issuance Underwriter's Discount Borrower Cost of Issuance Other Uses of Funds: Additional Proceeds 09/15/2011 09/15/2011 3,275,000.00 408,164.20
3,683,164.20 6,708.06 3,689,872.26 3,650,000.00 6,708.06 13,187.25 15,000.00 34,895.31 4,976.95 3,689,872.26 MorganStanley \
Aug 24,2011 2:31 pm Prepared by Morgan Stanley I BWR (Finance 6.020 Alaska Muni Bnd Bnk (pricing):2011) Page 107 Dated Date Delivery Date Last Maturity BOND SUMMARY STATISTICS Alaska
Municipal Bond Bank Authority Kodiak -Solid Waste Project New Money 09/15/2011 09/15/2011 09/01/2026 Bond Component Arbitrage Yield True Interest Cost (TIC) Net Interest Cost (NIC) All-In
TIC Average Coupon Average Life (years) Duration of Issue (years) Par Amount Bond Proceeds Total Interest Net Interest Total Debt Service Maximum Annual Debt Service Average Annual Debt
Service Underwriter's Fees (per $1000) Average Takedown Other Fee Total Underwriter's Discount Bid Price Par Value Price Average Coupon 2.399960% 2.895169% 3.118906% 2.976875% 4.484539%
8.831 7.375 3,275,000.00 3,683,164.20 1,297,046.94 902,069.99 4,572,046.94 302,500.00 305,595.41 3.477863 0.548779 4.026641 112.060365 Average Life Duration PV of 1 bp change Serial
Bonds 3,275,000.00 3,275,000.00 112.463 4.485% 8.831 8.831 7.384 2,341.20 2,341.20 All-In TIC TIC TIC Par Value 3,275,000.00 3,275,000.00 + Accrued Interest + Premium (Discount) 408,164.20
408,164.20 -Underwriter's Discount -13,187.25 -13,187.25 -Cost of Issuance Expense -6,708.06 -Other Amounts -15,000.00 Target Value 3,669,976.95 3,648,268.89 Target Date 09/15/2011 09/15/2011
Yield 2.895169% 2.976875% Arbitrage Yield 3,275,000.00 408,164.20 3,683,164.20 09/15/2011 2.399960% MorganStanley
Aug 24, 2011 2:31 pm Prepared by Morgan Stanley 1BWR (Finance 6.020 Alaska Muni Bnd Bnk (pricing):2011) Page 108 BOND DEBT SERVICE -(ALIGNED TO BOND MATURITY DATE) Alaska Municipal Bond
Bank Authority Kodiak -Solid Waste Project New Money Annual Debt Date Principal Coupon Interest Debt Service Service 03/01/2012 67,621.94 67,621.94 09/01/2012 155,000 3.000% 73,325.00
228,325.00 295,946.94 03/01/2013 71,000.00 71,000.00 09/01/2013 160,000 4.000% 71,000.00 231,000.00 302,000.00 03/01/2014 67,800.00 67,800.00 09/01/2014 170,000 5.000% 67,800.00 237,800.00
305,600.00 03/01/2015 63,550.00 63,550.00 09/01/2015 175,000 4.000% 63,550.00 238,550.00 302,100.00 03/01/2016 60,050.00 60,050.00 09/01/2016 185,000 5.000% 60,050.00 245,050.00 305,100.00
03/01/2017 55,425.00 55,425.00 09/01/2017 195,000 5.000% 55,425.00 250,425.00 305,850.00 03/01/2018 50,550.00 50,550.00 09/01/2018 205,000 5.000% 50,550.00 255,550.00 306,100.00 03/01/2019
45,425.00 45,425.00 09/01/2019 215,000 4.000% 45,425.00 260,425.00 305,850.00 03/01/2020 41,125.00 41,125.00 09/01/2020 225,000 5.000% 41,125.00 266,125.00 307,250.00 03/01/2021 35,500.00
35,500.00 09/01/2021 235,000 5.000% 35,500.00 270,500.00 306,000.00 03/01/2022 29,625.00 29,625.00 09/01/2022 245,000 5.000% 29,625.00 274,625.00 304,250.00 03/01/2023 23,500.00 23,500.00
09/01/2023 260,000 5.000% 23,500.00 283,500.00 307,000.00 03/01/2024 17,000.00 17,000.00 09/01/2024 270,000 4.000% 17,000.00 287,000.00 304,000.00 03/01/2025 11,600.00 11,600.00 09/01/2025
285,000 4.000% 11,600.00 296,600.00 308,200.00 03/01/2026 5,900.00 5,900.00 09/01/2026 295,000 4.000% 5,900.00 300,900.00 306,800.00 3,275,000 1,297,046.94 4,572,046.94 4,572,046.94
MorganStanley
Aug 24, 2011 2:31 pm Prepared by Morgan Stanley 1BWR (Finance 6.020 Alaska Muni Bnd Bnk (pricing):2011) Page 109 BOND DEBT SERVICE -(ALIGNED TO FISCAL YEAR) Alaska Municipal Bond Bank
Authority Kodiak -Solid Waste Project New Money Annual Debt Date Principal Coupon Interest Debt Service Service 03/01/2012 67,621.94 67,621.94 06/30/2012 67,621.94 09/01/2012 155,000
3.000% 73,325.00 228,325.00 03/01/2013 71,000.00 71,000.00 06/30/2013 299,325.00 09/01/2013 160,000 4.000% 71,000.00 231,000.00 03/01/2014 67,800.00 67,800.00 06/30/2014 298,800.00 09/01/2014
170,000 5.000% 67,800.00 237,800.00 03/01/2015 63,550.00 63,550.00 06/30/2015 301,350.00 09/01/2015 175,000 4.000% 63,550.00 238,550.00 03/01/2016 60,050.00 60,050.00 06/30/2016 298,600.00
09/01/2016 185,000 5.000% 60,050.00 245,050.00 03/01/2017 55,425.00 55,425.00 06/30/2017 300,475.00 09/01/2017 195,000 5.000% 55,425.00 250,425.00 03/01/2018 50,550.00 50,550.00 06/30/2018
300,975.00 09/01/2018 205,000 5.000% 50,550.00 255,550.00 03/01/2019 45,425.00 45,425.00 06/30/2019 300,975.00 09/01/2019 215,000 4.000% 45,425.00 260,425.00 03/01/2020 41,125.00 41,125.00
06/30/2020 301,550.00 09/01/2020 225,000 5.000% 41,125.00 266,125.00 03/01/2021 35,500.00 35,500.00 06/30/2021 301,625.00 09/01/2021 235,000 5.000% 35,500.00 270,500.00 03/01/2022 29,625.00
29,625.00 06/30/2022 300,125.00 09/01/2022 245,000 5.000% 29,625.00 274,625.00 03/01/2023 23,500.00 23,500.00 06/30/2023 298,125.00 09/01/2023 260,000 5.000% 23,500.00 283,500.00 03/01/2024
17,000.00 17,000.00 06/30/2024 300,500.00 09/01/2024 270,000 4.000% 17,000.00 287,000.00 03/01/2025 11,600.00 11,600.00 06/30/2025 298,600.00 09/01/2025 285,000 4.000% 11,600.00 296,600.00
03/01/2026 5,900.00 5,900.00 06/30/2026 302,500.00 09/01/2026 295,000 4.000% 5,900.00 300,900.00 06/30/2027 300,900.00 3,275,000 1,297,046.94 4,572,046.94 4,572,046.94 MorganStanley
Aug 24,2011 2:31 pm Prepared by Morgan Stanley 1BWR (Finance 6.020 Alaska Muni Bnd Bnk (pricing):2011) Page 110 SOURCES AND USES OF FUNDS Alaska Municipal Bond Bank Authority Reserve
Fund Dated Date Delivery Date Sources: Other Sources of Funds: Bond Bank Contribution Uses: Other Fund Deposits: Debt Service Reserve Fund 09/15/2011 09/15/2011 6,000,000.00 6,000,000.00
6,000,000.00 6,000,000.00 MorganStanley
GENERAL CERTIFICATE I, NOVA JAVIER, Clerk of the Kodiak Island Borough, a second class borough of the State of Alaska, HEREBY CERTIFY as follows: 1. The Kodiak Island Borough was duly
incorporated as a second class borough on September 24, 1963. 2. The members of the Borough Assembly of the Kodiak Island Borough during the period from October 2010 through the present,
and the date of beginning and the date of expiration of their terms, or consecutive uninterrupted terms, were and now are, as follows: Name Commencement of Expiration of Term Term Jerome
M. Selby, Mayor October 2010 October 2013 Carol Austerman October 2010 October 2013 Jerrol Friend October 2009 October 2012 JudyT. Fulp October 2008 October 2011 Sue Jeffrey October
2008 October 2011 David Kaplan October 2008 October 2011 Chris Lynch October 2009 October 2012 Louise Stutes October 2010 October 2013 3. Each of the foregoing members of the Kodiak
Island Borough Assembly was duly elected or appointed and qualified, and held office as a member of the Borough as stated in the foregoing paragraph. 4. Since October 2010, Jerome Selby
was, and now is, the duly qualified and acting Mayor of the Kodiak Island Borough. 5. Since June 2006, Nova Javier was, and now is, the duly appointed, qualified and acting Borough Clerk
of the Kodiak Island Borough. 6. Since November 1990, Karleton Short was, and now is, the duly appointed, qualified and acting Finance Director of the Kodiak Island Borough. 1:\Docs\41016001\Closing
Documents\GENERAL CERTIFICATE.docx
7. Regular meetings of the Borough Assembly are held on the first and third Thursday of each month at 7:30 p.m. 8. The seal impressed on this certificate is the duly adopted and only
official seal of the Kodiak Island Borough. IN WITNESS WHEREOF, I have executed this certificate and impressed the seal of the Kodiak Island Borough hereon this 15th day of September,
2011. NOVA JAVIER, Borough Clerk Kodiak Island Borough 1:\Docs\41016001\Closing Documents\GENERAL CERTIFICATE.docx
CERTIFICATE OF CLERK I, NOVA JAVIER, Clerk of the Kodiak Island Borough (the "Borough") HEREBY CERTIFY that the document attached hereto is an accurate and complete copy of Resolution
FY 2012-06 of the Borough adopted by the Borough Assembly at a meeting duly called and held August 4, 2011, and that Resolution FY 2012-06 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 15th day of September, 2011. NO 'A JAVIER, C Borough Clerk -0
Kodiak Island Borough
NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH, ALASKA: Section 2. Definitions. As used in this resolution, unless a different meaning clearly appears from
the context: WHEREAS, the Kodiak Island Borough, Alaska, (the "Borough") owns, operates and maintains a solid waste disposal facility which is in need of certain additions, improvements
and extensions; and WHEREAS, it is necessary to establish the form, conditions, covenants and method of sale of such bonds and to make provision for establishing the amount, maturities,
interest rates and redemption rights and other terms; Borough Assembly Borough Assembly Borough Attorney 08/04/2011 0810412011 Introduced by: Requested by: Drafted by: Introduced on:
Adopted on: KODIAK ISLAND BOROUGH RESOLUTION NO. FY2012-06 A RESOLUTION OF THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH PROVIDING FOR THE ISSUANCE OF SOLID WASTE DISPOSAL FACILITY REVENUE
BONDS OF THE BOROUGH FOR THE PURPOSE OF PROVIDING AMOUNTS TO ACQUIRE, ENGINEER, DESIGN, AND CONSTRUCT NECESSARY ADDITIONS AND IMPROVEMENTS TO THE BOROUGH'S SOLID WASTE DISPOSAL FACILITY;
AND PROVIDING FOR THE DETAILS THEREOF WHEREAS, the Constitution and statutes of the State of Alaska and the ordinances of the Borough permit the Borough to issue revenue bonds to finance
any project which serves a public purpose which bonds are secured only by the revenues of the project and which do not constitute a debt or pledge of the faith and credit or taxing power
of the Borough and which may be authorized by the Assembly; and Section 1. Purpose. The purpose of this resolution is to authorize the issuance and sale of not to exceed $3,650,000 of
solid waste disposal facility revenue bonds, to fix the form, covenants and method of sale of the bonds, to provide for establishing the amount, maturities, interest rates, redemption
rights and other terms of the bonds and to fix the conditions under which additional solid waste disposal facility revenue bonds may be issued on a parity with the bonds. 123456789 10
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Kodiak Island Borough Resolution No. FY2012·06 Page 1 of 18
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, pIus 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. Kodiak Island Borough Resolution No. FY2012-06 Page 2
of 18
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 payor 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 Kodiak Island Borough Resolution No. FY2012-06 Page 3 of 18
A. Bond Register. The Bonds shall be issued only in registered form as to both principal and interest. The Registrar shall keep, or cause to be kept, a bond register. Annual Debt Service
Requirement for all outstanding Parity Bonds, and (iii) the maximum Annual Debt Service Requirement on all outstanding Parity Bonds. The Bonds shall be fully registered as to both principal
and interest, shall be in the denomination of $5,000 each, or any integral multiple thereof, and shall be numbered separately in such manner and with any additional designation as the
Registrar deems necessary for purposes of identification. B. Registered Ownership. The Borough and the Registrar, each in its discretion, may deem and treat the Registered Owner of each
Bond as the absolute owner thereof for all purposes, and neither the Borough nor the Registrar shall be affected by any notice to the contrary. Payment of any such Bond shall be made
only as described in Section 5 hereof, but such registration may be transferred as herein provided. All such payments Registration. Section 4. Date, Maturities, Interest Rates and Other
Details of the Bonds. The Bonds shall be dated on such dates, and mature on such dates not later than December 31, 2026, and shall bear interest from their date payable on such dates,
and at such rates, not exceeding 6% per annum, as the Manager or Finance Director may fix and determine at or prior to the time of sale of the Bonds. Section 3. Au!~~rization of Bonds
and Purpose of Issuance. The Borough shall enter into the Loan Agreement and issue and sell an issue of revenue bonds designated "Kodiak Island Borough, Alaska Solid Waste Disposal Facility
Revenue Bonds, 2011" (the "Bonds") in the aggregat~ principal amount of not to exceed $3,650,000. The proceeds of the Bonds shall be used to pay the costs of certain additions, betterments
and extensions of the Facility consisting principally of design, engineering, reconstruction and installation of a portion of the Borough's Facility. These projects serve a public purpose
of the Borough. Section 6. Section 5. Place and Medium of Payment. Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America. For so
long as all outstanding Bonds are registered in the name of the Alaska Municipal Bond Bank, payments of principal and interest thereon shall be made as provided in the Loan Agreement.
In the event that the Bonds are no longer registered in the name of the Alaska Municipal Bond Bank, interest on the Bonds shall be paid to the Registered Owners of the Bonds at the addresses
for such Registered Owners appearing on the Bond Register on the 20th day of the month preceding the interest payment date. Principal of the Bonds shall be payable upon presentation
and surrender of the Bonds by the Registered Owners at the principal office of the Registrar. 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151
152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 Kodiak Island Borough Resolution No. FY2012-06 Page 4 of 18
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 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. jf 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 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 Kodiak Island Borough Resolution No. FY2012-06 Page 5 of 18
REGISTERED OWNER: PRINCIPAL AMOUNT: This bond is one of an issue of bonds (the "Bonds") of like date and tenor except as to number, rate of interest, and date of maturity, aggregating
the principal sum of $ and is issued pursuant to the Constitution and statutes of the State of Alaska and the duly adopted resolutions and ordinances of the Borough, including Resolution
No. FY 2012-__ (the "Bond Resolution"). The definitions contained in the Bond Resolution The Kodiak Island Borough, Alaska (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, from the sources stated herein, the Principal
Amount indicated above in the folloWing installments on of each of the following years, and to pay, from the sources stated herein, interest on such installments from the date hereof,
payable on , 2012 and semiannually thereafter on the first days of each and of each year, at the rates per annum as follows: Interest Rate Principal Amount UNITED STATES OF AMERICA Form
of Bonds. The form of the Bonds shall be substantially as follows: $-----KODIAK ISLAND BOROUGH, ALASKA SOLID WASTE DISPOSAL FACILITY REVENUE BOND, 2011 Maturity Date Section 8. No.__For
so long as this Bond is owned by the Alaska Municipal Bond Bank (the "Bond Bank"), payment of principal and interest shall be made as provided in the Loan Agreement between the Bond
Bank and the Borough. In the event that this Bond is no longer owned by the Bond Bank, payment of principal of and interest on this Bond will be made by check or draft mailed by first
class mail to the registered owner at the address appearing on the bond register of the Borough, provided that the final installment of principal and interest on this Bond will be payable
at the office of the Finance Director (the "Registrar") upon surrender of this Bond. Interest shall be computed on the basis of a 360-day year composed of twelve 3D-day months. Both
principal of and interest on this bond are payable in lawful money of the United States of America solely out of the special fund of the Borough known as the "Solid Waste Disposal Revenue
Bond Account" created by Section 12 of Resolution No. FY 2012-__. 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
245 246 247 248 249 250 251 252 253 254 255 256 257 258 Kodiak Island Borough Resolution No. FY2D12-D6 Page 6 of 18
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
Kodiak Island Borough Resolution No. FY2012-06 Page 7 of 18
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, MMe, 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 31 9 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 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 Kodiak Island Borough Resolution No. FY2012-06 Page 8 of 18
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 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 (ij) the unsatisfied balance of any
sinking fund 382 installment for Parity Bonds, in each case during the next 12 months, 383 Kodiak Island Borough Resolution No. FY2012-06 Page 9 of 18
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 Kodiak Island Borough Resolution No. FY2012-06 Page 10 of 18
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 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. 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 Kodiak Island Borough Resolution No. FY2012-06
Page 11 of 18
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 Kodiak Island Borough Resolution
No. FY2012-06 Page 12 of 18
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 resolutlon. 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 Page 13 of 18
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 (iii) 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 Kodiak Island Borough Resolution No. FY2012-06
Page 14 of 18
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 Kodiak Island Borough
Resolution No. FY2012-06 Page 15 of 18
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 anyone 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. Kodiak Island Borough Resolution No. FY2012-06 Page Page 16 of 18
682 683 684 685 686 687 688 689 690 691 692 693 694 695 696 697 698 699 700 701 702 703 704 705 706 707 708 709 710 711 712 713 714 715 716 717 718 719 720 721 722 723 724 B. With the
consent of the owners of not less than 60% in aggregate principal amount of Parity Bonds at the time outstanding, the Assembly may pass 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 Parity Bonds, or reduce the rate of interest thereon, or reduce the amount or change the date of any
sinking fund installment requirement, 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 owner of each Parity Bond so affected; or (2) Reduce Reduce the aforesaid percentage of owners of Parity Bonds required to approve
any such supplemental resolution without the consent of the owners of all of the Parity Bonds then outstanding; or (3) Remove the pledge and lien of this resolution on Pledged Revenues.
It shall not be necessary for the consent of the owners of Parity Bonds under this subsection B to approve the particular form of any proposed supplemental resolution, but it shall be
sufficient if such consent shall approve the substance thereof. C. Upon the passage of any supplemental resolution pursuant to the provisions of this section, this resolution shall be
deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations of the Borough under this resolution and all owners of Parity Bonds outstanding
hereunder shall thereafter be determined, exercised and enforced thereunder, subject in all respects to such modification and amendment, and all the terms and conditions of any such
supplemental resolution shall be deemed to be part of the terms and conditions
of this resolution for any and all purposes. D. Parity Bonds executed and delivered after the execution of any supplemental resolution adopted pursuant to the provisions of 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 Parity Bonds so modified as to conform, in
the opinion of the Assembly, to any modification of this resolution contained in any such supplemental resolution, may be prepared by the Borough and delivered without cost to the owners
of Parity Bonds then outstanding, upon surrender for cancellation of such Parity Bonds in equal aggregate principal amounts. Section 22. Disposition of the Proceeds of Sale of the Bonds.
The proceeds received from the sale of the Bonds (exclusive of accrued interest, if any, which shall be paid into the Debt Service SUbaccount) shall be deposited into the fund of the
Borough designated by the Kodiak Island Borough Resolution No. FY2012-06 Page 17 of 18
Nova M: Javier, 'MM ,Borough Clerk Section 26. Effective Date. This resolution shall become effective immediately. Finance Director and shall be used to pay all costs allocable to the
issuance of the Bonds and to undertake improvements authorized by Section 3 of this resolution. ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS FOURTH DAY OF AUGUST. 2011 KODIAK
ISLAND BOROUGH Section 23. Loan Agreement. The Manager and Finance Director are each authorized to enter into a Loan Agreement with the Alaska Municipal Bond Bank providing for and relating
to the sale of the Bonds to the Alaska Municipal Bond Bank and the Manager and Finance Director are authorized to cause the same to be executed and delivered on behalf of the Borough.
Section 25. Severability. If anyone or more of the covenants or agreements provided in this resolution to be performed on the part of the Borough shall be declared by any court of competent
jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements shall be null and void and shall be deemed separable from the remaining covenants and agreements
in this resolution and shall in no way affect the validity of the other provisions of this resolution or of the Bonds. Section 24. Continuing 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" with respect to the Bond Bank bonds. In accordance
with the Rule, and as set forth in the Loan Agreement, the Borough shall undertake to provide certain annual financial information and operating data and execute a continuing disclosure
agreement. Notwithstanding any other provision of this Resolution, failure of the Borough to comply with the continuing disclosure obligations shall not be considered a default of the
Borough's obligations under this Resolution or the Parity Bonds; however the beneficial owner of any Parity Bond may bring an action for specific performance, to cause the Borough to
comply with its continuing disclosure obligations under the Rule. --ATfEST: -~ 725 726 727 728 729 730 731 732 733 734 735 736 737 738 739 740 741 742 743 744 745 746 747 748 749 750
751 752 753 754 755 756 757 758 759 760 761 762 763 764 765 766 \ Kodiak Island Borough Resolution No_ FY2012-06 Page 18 of 18
Publisher's Affidavit UNITED STATES OF AMERICA SS: State of Alaska I, the undersigned, being first duly If you have any questions about Botougf1acl Additional information is availablE
sworn, depose and say: I am Editor or Publisher of the Kodiak Daily Mirror, a daily newspaper published in ,2011 Kodiak, Third Judicial Division, printed notice was published in said
newspaper in issues of the following dates: State of Alaska, and that the annexed X.__-..",,..c:.~_·_.~...£:.~::.__···_·.;.._;~_1_a~__-._<~._ Signature of Editor or Publisher NOTARY
PUBLIC in and for the State of SUBSCRIBED AND SWORN to before h· ~ fjLflif"z-f-met~'----'" dayofci jJ l_ I) /'/7 f ,ylYtt}d15uL NOTICE OFPUBLlr Thursday. August 4,2011 . ii:' 7:30 p.m.,
Assembly Regular Meeting -Borough'~~~1:!1 Tuesday, August 9, 2011' ... " 6 p.m., Project Advisory Committee Meeting-Bor:g~~t 7 p.m., Parks and Recreation Committee RegularMll:!~ 7 p.m.,
Service Area No. 1 Board Regular Meeting ";"J3, Wednesday, August 10, 2011 6:30 p.m., Planning and Zoning Commission W()rl<:$$~ Thursday, August 11,2011 Assembly Work Session -Canceled
The Assembly work session scheduled,on Th4"'~~al scheduled on Thursday, August 18, 2011, havel'w~.n The next Assembly work session will be held go 'I' Borough Conference Room. The next
regl.llar . September 1, 2011, at 7:30 p,m. in the BOro A SEMBLY Th rsd Au ust 4 2011 7: All items listed with an asteriSk PUBLIC HEARING .. ". . (iiiii Ordinance No, FY2012·04Amending
KOdiakJsl.ClI.I~.~ tion and Personnel Chapter 2.105 Planning anct7.Hf!tf'!! Membership; Title 2 Acfministration and pers()Pf'!~M&:~~ 2.145.010 Created-Membership; Title 3 Revet1u.~fJIJ9
Section 3.35.050 Board ofEqualization; and Titleff/E Candidates SecJiori 7.20.020 Candidate Qualifications UNFINISHED BUSINESS -None. NEW BUSINESS CONTRACTS -None. RESOLUTIONS *Resolution
No, FY2012·05 Authorizing the Reoofd$1 Borough Records. Resolution No, FY2012·06 Providing for the Issual.lpe Bonds of the Borough for the Purpose of Providing Am struct Necessary Additions
and ImprovementstotheB Providing for the Details Thereof. ORDINANCES FOR INTRODUCTION ..>.\ Ordinance No, FY2012·05 Rezoning Tra'?t C,BI09W:2 4871), From R1-Single Family ResidentialToPLd:Jubl
OTHER ITEMS APPEAL TO THE ASSEMBLY -An Appeal ofthe Alaska. J Case No. S11-014 on June 15,2011, GRANTIN.>I _.~/.. ,i Amend Note(s) on Plat 2000-8, Relating toAcce§T~n( My Commission
expires__·.::::~:::.)....:.I_/...1.!_!!.-)-=·~:"'~_ Through 10 and 12, Block 2, Perez Estates Subdivh,io 1.1///#_ II -..... AT .1~~"l s. 84 --As part of the F'~2012 budgetary process,
the Ko~.. ~~••••:::::•••:t~~~ payments effective November 1, 2011, i,\ .... 0 TAFf ... ~ ~ii: ~ }-.~ ""' You may sign-up online at www.kodiakak.us. toge~~i': p ....... ,.,. : ~ letters,
or minutes of the Assembly are posted on~~~ Ij> lJS\..'c. : t: ~ L...-......;....;..,,~ .....Jt...,.Jt~··~~~~:\J;.~:('~I\' _ >'>-.". • .'V I' -·...,..I'.?s. alll~ 0 •• 3 • ~~' , -=::-.-'(1)
Eltp'\!es 111 ..'.#....?'A p..r 1'1
If you have any questions about Borough activities, please call the Borough Clerk's Office at·486·9310. Additional infbrmation is available on the Borough Web'site at wwwkodiakak.us
Kodiak Island Borough lOwer than tifth. "I really hope that he will play well," said PGAchampion Martin Kaymer, who played with Woods at TPC Sawgrass, at least fQr nine holes. "We need
him. We really need him. He's the best player who ever played that game, and obviously he's struggling a little bit at the moment, but I just hope that he can go back to basics and show
us how great of a golf player he is." .........&.1. ..." ... V~ ".l5VU\.-)' .lU! VVUUUS IS his results. Because he has rrrissed so much golf -and didn't play all that great early in
the year -he has plunged to No. 135 in the FedEx Cup standings. He needs to crack the top 125 after this World Golf Championship and the PGA Championship to qualify for the playoffs.
He could take care of that with a top 10 finish at Firestone, where only once in his career "That's what what he says and what be feels," Woods said. In his place is' Bell, who last
caddied for Woods at the 2005 Disney Classic, and previously worked for Woods when he won the 1996 U.S. Amateur and the 1999 Buick Invitational at Torrey Pines. Woods said Bell'is'only
a fill-in -"Have you seen his legs?" he said -and there no timetable for getting a permatrymg to ngnr tor a spot, for a ~ 865 yards role. It's like that every year. 1S. It's always competitive;
you >le have to alwayshave to earn your spot" ne's,a very Wilkerson spent last season ~able said. with New Orleans, but his Ie to block best s~asons came in 2008 and mmage .. , 2009
with Tampa Bay when he round. He worked with new Seattle de>locks. He 'fensive line coach Todd Wash. rie match-Wiikerson started a career-high lme." 15 games in 2009 and had caJuld spell
reer bests in tackles (46) and son, head-sacks (6). ear under Wash said Wilkerson would ,layed 15 be used as an inside pass-rush~ason but er on third downs, but could 31 passes also
play at defensive end on luchdown first and second downs. NOTICE OF PUBLIC MEETINGS ge 10 t was one Weaver, who lost the marquee I didn't matchup against fellow Cy take that. Young contender
Justin Ver. I can't lander, went on a tirade right ned, and after he was ejected by Wenpay the delstedt and carried it into the dugout, screaming at Guillen id-back from across the field.
Thursday. August 4. 2011 7:30 p.m., Assembly Regular Meeting -. Borough Assembly Chambers Tuesday. August 9. 2011 6 p.m., Project Advisory Oommittee Meeting -Borough Conference Room
7 p.m., Parks and Recreation Committee Regular Meeting -Schoof District Conference Room 7 p.m., Service Area No.1 Board Regular Meeting -Bayside Fire Hall Wednesday. August 10.2011 .
6:30 p.m., Planning and Zoning Commission Work Session -Borough Conference Room Thursday. August 11.2011 Assembly Work Session -Canceled The Assembly work session scheduled on Thursday,
August 11,2011, and the regular meeting scheduled on Thursday, August 18, 2011, have been cancelled. The next Assembly work session will be held on Thursday, August 25,2011, at 7:30
p.m. in the" Borough Conference Room. The next regular meeting of the Assembly is scheduled on Thursday, September 1,2011, at 7:30 p.m. in the Borough Assembly Chambers. ASSEMBLY REGULAR
MEETING Thursday. Auaust 4.2011.7:30 p.m.. Borough Assembly Chambers All it~ms fisted with an asterisk (*) are proposed under consent agenda. PUBLIC HEARING . . Ordinance No. FY2012·04
Amending Kodiak Island Borough Code of Ordinances Title 2 Administration and Personnel Chapter 2.105 Planning and Zoning Commission Section 2.105.010 Created-. Membership; Title 2 Administration
and Personnel Chapter 2.145 Solid Waste Advisory Board Section 2,145.010 Created-Membership; Title 3 Revenue and Finance Chapter 3.35 Real Property Tax Section 3.35.050 Board of Equalization;
and Title 7 Elections Chapter 7.20 Qualifications of Voters and Candidates Section 7.20.020 Candidate Qualifications. UNFINISHED BUSINESS -None. NEW BllSINESS CONTRACTS -None. RESOLUTIONS
*ResolutionNo. FY2012·05Authorizing the Records Manager to Dispose of Certain Kodiak Island Borough Records. . Resolution No. FY2012·06 Providing for the Issuance of Solid Waste Disposal
Facility Revenue Bonds of the Borough for the Purpose of Providing Amounts to Acquire, Engineer, Design, and ConstructNecessary Additions and Improvements to the Borough's Solid Waste
Disposal Facility; and Providing for the Details Thereof. ORDINANCES FOR INTRODUCTION Ordinance No.EY2012·05 Rezoning Tract C, Block 2, Ouzinkie Townsite Subdivision (U.S. Survey 48711,
From R1-Single Family ResidentialTo PL-Public Use Land. OTHERITEMS, . APPEAL TO THEASSEMBLY:..AnAppeal of the Planning and Zoning Comm'ission's Decision of Case No. S11-014 on June 15,2011,
GRANTING Preliminary Approval, According toKIBC 16.40, to Amend Note(s) on Plat2000-8, Relating to Access and Front Yard Setback Calculationsfor Lots 7 Through 10 and 12, Block 2, Perez
Estates Subdivision. Appellant: Amanda Breeden. ATTENTION .As part of the FY2012 budgetary process, the Kodiak Island Borough will no longer accept credit card payments effective November
1, 2011, You may sign-up online at www.kodiakak.us to get an e-mail notification once agendas, packets, news-. letters, or minutes of the Assembly are posted on the web.
CERTIFICATE OF CLERK I, NOVA JAVIER, Clerk of the Kodiak Island Borough (the "Borough") HEREBY CERTIFY that the document attached hereto is an accurate and complete copy of a portion
of the minutes of the August 4, 2011 Borough Assembly Meeting, showing adoption of Resolution FY 2012-06, and that said meeting was duly called and held with a quorum acting throughout.
IN WITNESS WHEREOF, I have executed this certificate this 15th day of September, 2011.
KODIAK ISLAND BOROUGH Assembly Regular Meeting August 4, 2011 A regular meeting of the Kodiak Island Borough Assembly was held on Thursday, August 4, 2011, 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 Sergeant Major Dave Blacketer of the Salvation Army. Mayor
Selby led the Pledge of Allegiance. Present were Mayor Jerome Selby, Assembly members Jerrol Friend, Judy Fulp, Dave Kaplan, Chris Lynch, and Louise Stutes. Staff members present were
Manager Rick Gifford, Community Development Director Bud Cassidy, Finance Director Karl Short, Clerk Nova Javier, and Assistant Clerk Jessica Kilborn. KAPLAN moved to excuse Assembly
members Austerman and Jeffrey who were absent due to personal leave. VOICE VOTE ON MOTION CARRIED UNANIMOUSLY APPROVAL OF AGENDA AND CONSENT AGENDA KAPLAN moved to approve the agenda
and consent agenda. VOICE VOTE ON MOTION CARRIED UNANIMOUSLY. APPROVAL OF MINUTES None. AWARDS AND PRESENTATIONS None. CITIZENS' COMMENTS Susan Baker, Joan Brodie, Vicky Jo Kennedy,
and John Miller spoke on the proposal for the Chiniak timber project. .~ COMMITTEE REPORTS None. Kodiak Island Borough August 4, 2011 Assembly Minutes Page 951
PUBLIC HEARING 1. Ordinance No. FY2012-04 Amending Kodiak Island Borough Code of Ordinances Title 2 Administration and Personnel Chapter 2.105 Planning and Zoning Commission Section
2.105.010 Created -Membership; Title 2 Administration and Personnel Chapter 2.145 Solid Waste Advisory Board Section 2.145.010 Created -Membership; Title 3 Revenue and Finance Chapter
3.35 Real Property Tax Section 3.35.050 Board of Equalization; and Title 7 Elections Chapter 7.20 Qualifications of Voters and Candidates Section 7.20.020 Candidate Qualifications. FRIEND
moved to adopt Ordinance No. FY2012-04. This ordinance was requested by Assembly member Stutes to avoid the possible or perception of conflict of interest of employees serving on different
boards. It sets the parameters on what those limitations were by keeping in mind that a Borough employee should not be denied the opportunity to serve as a member of a certain Borough
board or commission solely by reason of being employed by the Borough. The ordinance provided the specific qualifications for board membership for the Planning and Zoning Commission,
Board of Equalization, and Solid Waste Advisory Board. It also addressed that Borough employees should not be denied the opportunity to serve on Service Area Boards. Mayor Selby opened
the public hearing. Brent Watkins expressed concerns regarding possible employee conflicts between loyalties to the Borough and the boards they may represent and urged that the seats
held by Borough employees be kept to a minimum. Mayor Selby closed the public hearing. ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Friend, Fulp, Kaplan, Lynch, and Stutes. BOROUGH
MANAGER'S REPORT Manager Gifford reported on the following: • Addressed concerns raised regarding the funding from the government for wildlife refuges. The Borough Lobbyist would continue
to monitor the budget and keep the Borough informed. • Results of the FY2011 Vehicle Disposal Program. • He would be out of the office until August 15. MESSAGES FROM THE BOROUGH MAYOR
Mayor Selby presented a gift from the Russian Tall Ship Pal/ada to the Borough to commemorate its visit to Kodiak. He also noted that the 2011 fishing reports were good and wished everyone
a good summer. Kodiak Island Borough August 4, 2011 Assembly Minutes Page 952
UNFINISHED BUSINESS None. NEW BUSINESS Contracts None. Resolutions 1. Resolution No. FY2012-05 Authorizing the Records Manager to Dispose of Certain Kodiak Island Borough Records. This
item was approved under the consent agenda. KIBC 2.40.160 provided for the destruction of records which were certified by the Clerk and Attorney as having no legal or administrative
value, or historical interest. The list of records provided was not of historical, legal, nor administrative value, and met the minimum retention requirements. 2. Resolution No. FY2012-06
Providing for the Issuance of Solid Waste Disposal Facility Revenue Bonds of the Borough for the Purpose of Providing Amounts to Acquire, Engineer, Design, and Construct Necessary Additions
and Improvements to the Borough's Solid Waste Disposal Facility; and Providing for the Details Thereof. KAPLAN moved to adopt Resolution No. FY2012-06. This resolution allowed the Borough
to issue $3,640,000 of solid waste disposal revenue bonds to finance the initial architectural and engineering design work to enlarge the Landfill (Cell 1). At the time, the Borough
planned to sell an additional $10,000,000 bonds to finish construction of Cell 1 at the Landfill. Manager Gifford and Finance Director Short provided additional information regarding
content of the resolution. ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Fulp, Kaplan, Lynch, Stutes, and Friend. Ordinances for Introduction 1. Ordinance No. FY2012-05 Rezoning Tract
C, Block 2, Ouzinkie Townsite Subdivision (U.S. Survey 4871), From R1-Single Family Residential To PL-Public Use Land. FRIEND moved to adopt Ordinance No. FY2012-05 in first reading
to advance to public hearing at the next regular meeting of the Assembly. The Kodiak Kenai Cable Company requested permission to erect a microwave communication tower on Tract C of the
Ouzinkie Townsite Subdivision in order to extend broadband voice and data services to Ouzinkie and Port Lions. This service would be comparable to the services that were brought to the
Kodiak road road system by the submarine fiber-optic cable which connected Kodiak with the mainland. The tower would be located on a parcel of land that was part of the school which
housed the community's 250,000 gallon water tower. This location was also the access road to the facility. It was this area's elevation overlooking the community that made it important
for utilities like water tanks and a communications tower. The future goal was to separate the area from the rest of the school site and dispose of the parcel to the City of Ouzinkie.
The action to dispose of the land would occur at a future Assembly meeting. Kodiak Island Borough August 4, 2011 Assembly Minutes Page 953
In the meantime, the PL-Public Use Zone was the proper zoning district for all the facilities located at the location as well as improvements at the school. The Planning and Zoning Commission
held a public hearing on the request at its July 20,2011 regular meeting and it was recommended to approve the rezone. ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Kaplan, Lynch, Stutes,
Friend, and Fulp. Other Items 1. APPEAL TO THE ASSEMBLY An Appeal of the Planning and Zoning Commission's Decision of Case No. S11-014 on June 15,2011, Granting Preliminary Approval,
According to KIBC 16.40, to Amend Note(s) on Plat 2000-8, Relating to Access and Front Yard Setback Calculations for Lots 7 Through 10 and 12, Block 2, Perez Estates Subdivision. Appellant:
Amanda Breeden. Mayor Selby noted that eighty-one appeal hearing notices were mailed. Six responses were returned and provided to the Assembly. It was announced that the Assembly would
decide the appeal upon the appeal record and the written and oral argument presented presented on the appeal. At the hearing before the Assembly, only persons who had submitted written
argument on the appeal, testified before the Commission, or submitted written comments to the Commission were allowed to give oral argument. He outlined the order of the oral argument
and announced that rebuttal would be limited to new evidence and testimony brought forward during private persons' comments. Mayor Selby also noted that failure to observe the procedures
in the hearing would not affect the validity of the decision as long as the appellant had a reasonable opportunity to be heard. Mayor Selby announced that the following persons would
be allowed to present oral argument on the appeal: Persons who have submitted written argument on the appeal: Amanda Breeden Peter and Eileen Lyse Martha Randolph Rick and Diane Langfitt
Alan and Rose Wolf Michael W. Reuter William and Janet Arnold Testified before the Commission: Kevin Arndt Amanda Breeden Alan Wolf Submitted written comments to the Commission: None
Kodiak Island Borough August 4,2011 Assembly Minutes Page 954
The order of oral argument was as follows: 1. Borough staff represented by Community Development Director Cassidy and Planning and Zoning Commissioner Brent Watkins. Community Development
Director Cassidy introduced the case and explained staff's process in bringing the case to the Planning and Zoning Commission. He spoke on the conditions of approval of the access and
setback requirements. Commissioner Watkins spoke on the Commission's judgment on the case. It was noted that the subdivision was up to code. 2. Appellant: Amanda Breeden The appellant
presented her case on the appeal. The appeal was brought forward on behalf of the subdivision. It was noted that after the Commission meeting was held the residents understood that the
future development of the subdivision would not be amenable to the nature of the area. Safety concerns were expressed regarding traffic, children, household pets, and solid waste issues.
3. Private person supporting the appeal: Diane Langfitt spoke in support of the intent of the appeal to address zoning issues and noted the safety issues to the subdivision should the
development proceed as proposed. She urged the Assembly to request the Commission to rezone the area to R-2 Multi-family Residential. 4. Private person opposing the appeal: Kevin Arndt,
owner of MK Enterprises and the requestor of the access request, spoke in support of the appeal. At the time, there was no access to the three lots from Sharatin and he clarified that
the desire was not to build sixplexes in the subdivision as was stated by the appellant. Mr. Arndt addressed the safety concerns presented by the appellant. 5. Appellant, for rebuttal:
There was no rebuttal presented. Assembly member Friend spoke on the nature of the appeal and requested clarification on the appellant's request. COD Director Cassidy spoke on the process
of the request to access the three parcels in the subdivision on a lot by lot basis with access via Sharatin Road and Wilton White Way and in compliance with the stipulations set by
the Fire Fire Marshall. FRIEND moved to affirm -IN WHOLE -the Planning and Zoning Commission's Decision of Case No. S11-014 on June 15, 2011, Granting Preliminary Approval, According
to KIBC 16.40, to Amend Note(s) on Plat 2000-8, Relating to Access and Front Yard Setback Calculations for Lots 7 through 10 and 12, Block 2, Perez Estates Subdivision. Appellant: Amanda
Breeden. ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Lynch, Stutes, Friend, Fulp, and Kaplan. Kodiak Island Borough August 4,2011 Assembly Minutes Page 955
FRIEND moved to adopt the Findings-of-Fact of the Borough Assembly as stated in the Planning and Zoning Commission's Decision of Case No. S11-014 on June 15, 2011, Granting Preliminary
Approval, According to KIBC 16.40, to Amend Note(s) on Plat 2000-8, Relating to Access and Front Yard Setback Calculations for Lots 7 Through 10 and 12, Block 2, Perez Estates Subdivision.
Appellant: Amanda Breeden. ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Stutes, Friend, Fulp, Kaplan, and Lynch. CITIZENS' COMMENTS Vicky Jo Kennedy spoke on the Chiniak Timber project
and encouraged the Borough to sell land that it possessed. Mike Milligan spoke on the severance tax ordinance and noted that oil was not included. Mayor Selby noted that oil was a mineral
resource. ASSEMBLY MEMBER COMMENTS Assembly member Stutes commended Major Sergeant Blacketer for his presence at the meeting, the Salvation Army for its non-profit success, and addressed
concerns of Commission Watkins regarding Ordinance No. FY2010-04. Assembly member Friend expressed concerns on the process of the Appeal to the Assembly. Assembly member Fulp appreciated
the testimony presented and agreed with Mr. Miller regarding the Chiniak Timber proposal. Announcements The Assembly work session scheduled on Thursday, August 11, 2011, and the regular
meeting scheduled on Thursday, August 18, 2011 had been cancelled. The next Assembly work session would be held on Thursday, August 25, 2011, at 7:30 p.m. in the Borough Conference Room
and the next regular meeting of the Assembly was scheduled on Thursday, September 1, 2011, at 7:30 p.m. in the Borough Assembly Chambers. ADJOURNMENT FRIEND moved to adjourn the meeting.
ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Friend, Fulp, Kaplan, Lynch, and Stutes. The meeting was adjourned at 8:40 p.m. KODIAK ISLAND BOROUGH ;):M.selb~~ Assembly Minutes Page
956
CERTIFICATE OF FINANCE DIRECTOR FIXING DATE, MATURITIES, INTEREST RATES AND OTHER DETAILS OF THE BOND I, KARLETON SHORT, Finance Director ofthe Kodiak Island Borough (the "Issuer"),
HEREBY CERTIFY as follows: Pursuant to Resolution No. FY 2012-06 of the Issuer, the Kodiak Island Borough Solid Waste Revenue Bonds, 2011 (the "Bond") shall be issued in the aggregate
principal amount of $3,275,000, shall be dated September 15, 2011, and shall mature on September 1 in each of the years in the principal amounts and bear interest from their date at
their rates, set forth below: Maturity Principal Interest Maturity Principal Interest Date Amount Rate Date Amount Rate 2012 $155,000 3.0% 2019 $215,000 4.0% 2013 160,000 4.0 2020 225,000
5.0 2014 170,000 5.0 2021 235,000 5.0 2015 175,000 4.0 2022 245,000 5.0 2016 185,000 5.0 2023 260,000 5.0 2017 195,000 5.0 2024 270,000 4.0 2018 205,000 5.0 2025 285,000 4.0 2026 295,000
4.0 Interest on the Bond will be payable on September 1, 2012, and semiannually thereafter on March March 1 and September 1 of each year. Interest will be computed on the basis of a
360 day year of twelve 30-day months. The Bonds maturing on and after September 1, 2022 are subject to redemption prior to maturity at the option of the Issuer on any date on or after
September 1, 2021, either as a whole or in part and from such maturities as the Issuer shall determine, and by lot within a maturity, at a redemption price equal to the principal amount
of the Bond to be redeemed plus accrued interest to the date of redemption. IN WITNESS WHEREOF, I have executed this certificate this 15th day of September, 2011. KARLETON SHORT, Finance
Director Kodiak Island Borough I:\Docs\41 016001 \Closing Documents\CertReDetaiisoftheBonds.docx
LOAN AGREEMENT THIS AGREEMENT, dated as of the 1st day of September 2011, 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 ("Borough"): WIT N E SSE
T H: WHEREAS, pursuant to the Act, the Bank is authorized to loan 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 pursuant to the Act is authorized to accept a Loan from the Bank to be evidenced by its municipal bonds; and WHEREAS, the
Borough desires to borrow money from the Bank in the amount of not to exceed $3,650,000 and has submitted an application to the Bank for a Loan in the amount of not to exceed $3,650,000,
and the Borough has duly authorized the issuance of its fully registered bond in the aggregate principal amount of $3,275,000 (the "Municipal Bond"), which bond is to be purchased by
the Bank as evidence of the Loan in accordance with this Agreement; and WHEREAS, the application of the Borough contains the information requested by the Bank; and WHEREAS, to provide
for the issuance of bonds of the Bank in order to obtain from time to time money with which to make Loans, the Bank has adopted the General Obligation Bond Resolution on July 13, 2005,
as amended August 19, 2009 (the "General Bond Resolution") and Series Resolution No. 2011-04, approved on July 26, 2011 (together with the General Bond Resolution, the "Bond Resolution"),
authorizing the making of such Loan to the Borough and the purchase of the Municipal
Bond. NOW, THEREFORE, the parties agree: 1. The Bank hereby makes the Loan and the Borough accepts the Loan in the aggregate principal amount of $3,275,000. As evidence of the Loan made
to the Borough and such money borrowed from the Bank by the Borough, the Borough hereby sells to the Bank the Municipal Bond in the principal amount, with the principal installment payments,
and bearing interest from its date at the rate or rates per annum,
stated in Exhibit A appended hereto. For purposes of this Loan Agreement, the interest on the Municipal Bond will be computed without regard to the provision in Section 7 hereof for
the Borough to make funds available to the Trustee acting under the General Bond Resolution for the payment of principal and interest due at least seven (7) business days prior to each
respective principal and interest payment date. 2. The Borough represents that it has duly adopted or will adopt all necessary ordinances or resolutions, including Resolution No. FY
2012-06, adopted on August 4, 2011 (the "Borough Resolution"), and has taken or will take all proceedings required by law to enable it to enter into this Loan Agreement and issue its
Municipal Bond to the Bank and that the Municipal Bond will constitute a revenue bond, a special and limited obligation of the Borough secured by a net revenue pledge of amounts received
by the Borough and deposited in the Borough's Solid Waste Disposal Fund, duly authorized by Borough's Resolution. 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 maturities of the bonds sold by the Bank in order to obtain the money with which to make the 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 so as to provide funds sufficient to pay interest as the same becomes due on the Loan
Obligation. 4. The amounts to be paid by the Borough pursuant to this Loan Agreement representing principal due on its Municipal Bond (the "Municipal Bond Principal Payments"), shall
be paid at least seven (7) business days before the payment date stated in the Municipal Bond so as to provide funds sufficient to pay the principal of the Loan Obligations as the same
matures based upon the maturity schedule stated in Exhibit A appended hereto. 5. In the event the amounts referred to in Sections 3 and 4 hereof to be paid by the 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 from
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 the Act. 6. In the event 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 Municipal Bond for the corresponding year pursuant to the terms
of the Municipal Bond, then both the Municipal Bond Interest AMBB/General Obligation and Refunding Bonds, 2011 Series Three Loan Agreement 1:\Docs\37421725\Loan Agreement (KIB).Docx
Page 2
Payments 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 installment of the Municipal Bond
is equal to the interest rate paid by the Bank on the corresponding principal installment of the Bank's refunding bonds and (ii) on a present value basis the sum 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 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 with 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 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 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 fees 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 fees payable pursuant
to this Section 7 shall not constitute a subsequent waiver thereof. 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 the date indicated on Exhibit A appended hereto, 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 the date indicated on Exhibit A appended
AMBB/General Obligation and Refunding Bonds, 2011 Series Three Loan Agreement 1:\Docs\37421725\Loan Agreement (KIB).Docx Page 3
hereto, and to pay any Fees and Charges imposed by the Bank within 30 days of receiving the invoice of the Bank therefor. 9. The Bank shall not sell and the Borough shall not redeem
prior to maturity any portion of the Municipal Bond in an amount greater than the 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 applicable premium, 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' notice of intention to redeem its Municipal Bond. In the event 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 payor the Bank shall receive under item (i) above shall be the principal amount of such refunding bonds outstanding. In the event the Loan Obligations have been refunded 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 the Loan Obligations have been refunded,
the amount which the Borough shall be obligated to payor the Bank shall receive under item (iii) above, when the refunded Loan Obligations are to be redeemed, shall be the applicable
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 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 will constitute a valid and binding special and limited obligation of the Borough,
secured by the revenue of the Solid Waste Disposal Facility of the Borough. AMBB/General Obligation and Refunding Bonds, 2011 Series Three Loan Agreement 1:\Docs\37421725\Loan Agreement
(KIB).Docx Page 4
11. Invoices for payments under this Loan Agreement shall be addressed to the Kodiak Island Borough, Attention: Finance Director, 710 Mill Bay Road, Kodiak, AK 99615. The Borough shall
give the Bank and the corporate trust office of the Trustee under the General Bond Resolution at least 30 days' written notice of any change in such address. 12. The Borough hereby agrees
that it shall fully fund, at the time of loan funding, its debt service reserve fund (in an amount equal to $302,500) which secures payment of principal and interest on its Municipal
Bond and that such fund shall be held in the name of the Borough with the Loan Trustee. 13. 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 Bond Bank upon request. 14. Prior to payment of the amount of the Loan or any portion thereof, 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 for a Loan shall be incorrect or incomplete in any material respect. (b) The Borough has violated commitments made by it in the terms
of this Loan Agreement. (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. 15. The obligation of the Bank under this Loan Agreement is contingent upon delivery of its General Obligation and Refunding
Bonds, 2011 Series Three (the "2011 Series Three Bonds") and receipt of the proceeds thereof. AMBB/General Obligation and Refunding Bonds, 2011 Series Three Loan Agreement 1:\Docs\37421725\Loan
Agreement (KIB).Docx Page 5
16. The Borough agrees that it will provide the Bank with written notice of any default in covenants under the Borough's Resolution within 30 days from the date thereof.17. The Borough
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 thereof. 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 which 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 said Section 148 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. 18. The Borough
agrees that if it is one of the Governmental Units that has a ten percent or greater amount of outstanding bonds held by the Bank under its General Bond Resolution, it shall execute
a continuing disclosure agreement for purposes of Securities and Exchange Commission Rule 15c2-12, adopted under the Securities and Exchange Act of 1934, and provide the Bank for inclusion
in future official statements, upon request, financial information generally of the type included in Appendix 0, under the heading "Summaries of Borrowers Representing 10% or More of
Outstanding Principal of Bonds Issued Under the 2005 General Bond Resolution," to the Official Statement and attached hereto as Exhibit B. 19. The Borough secured a loan with the State
of Alaska Department of Environmental Conservation ("DEC") in the amount of two million six hundred twelve thousand dollars ($2,612,000) for purposes of making certain improvements to
the Borough's Solid Waste Disposal Facility. Repayment of the loan is secured by a net revenue pledge of the Borough's Solid Waste Disposal Facility. The Borough represents and warrants
that its loan arrangement with DEC does not restrict or otherwise encumber its ability to issue the Municipal Bond or its pledge of net revenues of the Borough's Solid Waste Disposal
Facility for the payment thereof. The Borough AMBB/General Obligation and Refunding Bonds, 2011 Series Three Loan Agreement I:\Docs\37421725\Loan Agreement (KI B).Docx Page 6
further represents and warrants that its repayment obligation under the DEC loan is subordinate to its Municipal Bond payment obligation. 20. The Borough agrees that each year, for the
term of the Municipal Bond, it will deposit with the Bank trustee an amount sufficient to advance fund the debt service requirement for the Municipal Bond ("Advance Funding Requirement").
The first such deposit shall be made on the date the Municipal Bond is issued, and thereafter on each September 1. In any year in which the Borough is required to comply, and has complied,
with the Advance Funding Requirement, the Borough is not required to make monthly deposits in its debt service account for payment of the principal of, and interest on, the Municipal
Bond. 21. The Borough agrees to establish, maintain and collect solid waste facility system net revenues (gross revenues less operating and maintenance costs, not including depreciation,
interest or principal amortization) in each fiscal year that will provide net revenues in an amount not less than 1.25 of the annual debt service requirement for such year on the outstanding
Municipal Bond and all bonds issued on a parity therewith ("Rate Covenant"). Gross revenues do not include State-support funding or interest earnings. The Borough agrees to provide the
Bank annually with written notice that it has, or has not, satisfied the Rate Covenant. Such notice is to be provided by the Borough to the Bank within sixty (60) days of the end of
the Borough's fiscal year. If the Rate Covenant is satisfied for three (3) consecutive fiscal years, the Advance Funding Requirement will no longer be required until, or unless, the
Borough fails to meet the Rate Covenant in any fiscal year. Upon the Borough's failure to satisfy the Rate Covenant, the Borough shall immediately (by September 1 of such calendar year)
make a deposit with the Bank's trustee sufficient to pay the Municipal Bond debt service for the following twelve months. 22. If any provision of this Loan Agreement 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 unenforceable provision had not been contained herein. 23. 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 AMBB/General
Obligation and Refunding Bonds, 2011 Series Three Loan Agreement 1:\Docs\37421725\Loan Agreement (KIB).Docx Page 7
documents or other instruments, and take such other actions as are necessary, to give effect to the terms of this Loan Agreement. 24. 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. 25. In this Loan 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. 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. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written. By:---'H-h¥-!'-""----II--'"--lf-~..:..L..-------KODIAK ISLAND BOROUGH, ALASKA By:_l,,":-,,-r~-:::-:--=_!L~~ _ KARLETON SHORT Finance Director AMBB/General
Obligation and Refunding Bonds, 2011 Series Three Loan Agreement 1:\Docs\37421725\Loan Agreement (KIB).Docx Page 8
EXHIBIT A $3,275,000 Kodiak Island Borough, Alaska Solid Waste Disposal Facility Revenue Bond, 2011 ("Municipal Bond") Due September 1 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
2022 2023 2024 2025 2026 Principal Amount $155,000 160,000 170,000 175,000 185,000 195,000 205,000 215,000 225,000 235,000 245,000 260,000 270,000 285,000 295,000 Interest Rate 3.00%
4.00 5.00 4.00 5.00 5.00 5.00 4.00 5.00 5.00 5.00 5.00 4.00 4.00 4.00 Principal installments shall be payable on September 1 in each of the years, and in the amounts set forth above.
Interest on the Municipal Bond shall be payable on March 1, 2012, and thereafter on September 1 and March 1 of each year. Optional Prepayment: The Municipal Bond principal payments due
on or after September 1, 2022 are subject to prepayment in whole or in part at the option of the Borough on any date on or after September 1, 2021, at a price of 100% of the principal
amount thereof to be prepaid, plus accrued interest to the date of prepayment. AMBB/General Obligation Obligation and Refunding Bonds, 2011 Series Three Loan Agreement -Exhibit A 1:\Docs\37421725\Loa
n Agreement (KIB).Docx Page A-1
EXHIBIT B APPENDIXD Summaries of Borrowers Representing 10% or More of Outstanding Principal ofBonds Issued Under the 2005 General Bond Resolution Page 1 of 6
EXHIBIT B I~II Y UI-"I: ,000M'''''''' GENERAL OBLIGATION FINANCIAL SUMMARY Municipal Financial Position 2006 2007 2008 2009 2010 Avera?;e ropeny I ax Louec IOns Borrower's Properly Tax
Rate per $1,000 $6.40 $6.10 $6.10 $6.10 $6.10 $6.16 Municipal Levy $4,053,256 $4,253,726 $4,689,323 $4,868,459 $4,885,779 $4,550,108.60 Current Year's Collections $4,029,013 $4,172,267
$4,644,308 $4,794,074 $4,689,396 $4,465,811.60 Current Co lection Rate 99.40% 98.08% 99.04% 98.47% 95.98% 98.15% Total Year's Collections $4,057,007 Wl,236,037 $4,675,035 $4,1544,090
$4,689,396 $4,500,313.00 Total Collection Rate 100.09% 99.58% 99.70% 99.50% 95.98% 98.91% luenerall:'una Unreserved Ending Fund Balance $ 5,590,212 $ 5,328,835 $ 5,070,342 $ 4,649,409
$ 5,101,448 $5,148,049 Expenditures $ 15,671,819 $ 16,132,631 $ 18,476,845 $ 18,084,246 $ 17,159,791 $17,105,066 Fund Balance/Expenditures 36% 33% 27% 26% 30% 30% Total Revenues $ 12,540,441
$ 13,129,154 $ 15,082,274 $ 14,019,651 $ 13,886,302 $13,731,564 Intergovernmental Revenues $ 947,656 $ 1,380,391 $ 2,047,712 $ 1,348,409 $ 1,233,173 $1,391,468 Percentage Intergovernmental
8% 11% 14% 10% 9% 10% Uverall MUnICipal vebt t'osltion ~$ Revenue Debt -Enterprise Funds 56,442,223 $ 56,063,232 Revenue Debt -Governmental Funds $ -$ -$ -$ -$ -General 0 li~alion Debt
-Governmental Funds $ 7,180,571 $ 6,617,377 $ 6,044,339 $ 5,455,000 $ 12,080,000 General Obligation Debt -Enterprise Funds $ 1,61:S5,000 $ 2,283,278 $ 2,112,504 $ 1,935,458 $ 4,942,967
Total General Obligation Debt $ 8,865,571 $ 8,900,655 $ 8,156,843 $ 7,390,458 $ 17,022,967 Total Revenue and General Obli~ationDebt $ 67,945,571 $ $ 65,8. $ 63,8. $ 73,086, n.,ht. vam
(n try) 1.13% O.!oI5% 1.5 Enterprise GO Debt /Assessed Value ( my 0.27% 0.33% 0.27% 0.24% 0.62% Total General Obligation Debt!A.V. mr) 1.40% 1.28% 1.06% 0.93% 2.13% Total Revenue and
GO Debt!A.V. IDf1 ) 10.73% 9.61% 8.57% 8.00% 9.12% ita $1,157 :n,!::>. $I,UlSo $!oII:S:J $2,J l:J Total Revenue and GO Debt Per Capita $8,868 $8,664 $8,771 $8,508 $9,079 General Economic
and Demographic Data 2006 2007 2008 2009 2010 Annual Growth Rate Population 7,662 7,732 7,508 7,503 8,050 7.29% Assessed Value $ 633,321,300 $ 697,332,200 $ 768,741,400 $ 798,108,100
$ OlD,"','"iii! Assessed Value Per Capita 1$ 82,657 $ 90,188 $ 102,390 $ 106,372 $ 99,497 Top 10 Tax Payers as a % of Total Assessed Value 10.12% 9.93% 9.60% 8.73% 10.57% mry): most
recent year D-I Page 2 of6
EXHIBIT B CITY OF KETCHIKAN KETCHIKAN PUBLIC UTILITIES ENTERPRISE FUND FINANCIAL SUMMARY 2006 2007 2008 2009 2010 Audited Audited Restated Audited Audited ASSETS Utility Plan In-Service
$63,472,399 $65,675,153 $65,397,934 $69,718,266 $67,177,925 Construction Work in Progress 3,720,138 3,046,020 8,748,881 8,017,706 14,788,563 Cash 18,036,431 17,271,704 15,351,432 13,958,674
12,566,005 Restricted Assets 3,592,407 3,881,216 5,128,164 4,062,167 3,050,592 Other Assets 7,537,978 9,709,775 11,890,125 8,686,219 12,118,366 Total Assets 96,359,353 99,583,868 106,516,536
104,443,032 109,701,451 LIABILITIES AND NET ASSETS Revenue Bonds Payable 20,580,000 20,214,266 20,574,802 19,902,223 20,233,232 Other Liabilities 4,243,388 5,320,524 6,782,025 4,045,215
3,983,215 Total Liabilities 24,823,388 25,534,790 27,356,827 23,947,438 24,216,447 NET ASSETS 71,535,965 74,049,078 79,159,709 80,495,594 85,485,004 Operating Revenues 31,085,610 30,786,551
33,275,983 33,310,537 32,975,154 Operation and Maintenance 15,188,374 17,777,974 19,912,114 20,861,336 19,060,639 Administrative and General 5,635,363 5,076,384 5,634,660 6,034,476 5,603,405
Depreciation 6,861,088 6,624,656 5,728,819 6,086,514 5,932,099 Payment in Lieu of Taxes Operating Income (Loss) 3,400,785 1,307,537 2,000,390 328,211 2,379,011 Non-Operating Revenue
(Expense) (108,887) 197,069 75,885 (402,557) (479,652) Net Income (Loss) Before Contribution 3,291,898 1,504,606 2,076,275 (74,346) 1,899,359 Contributions 907,076 1,658,507 3,601,635
2,085,231 3,818,051 Special Item 82,721 Transfer of Net Assets -Swan Lake -Lake Tyee Intertie Project Transfer -Payment In Lieu of Taxes ** (650,000) (650,000) (650,000) (675,000) (728,000)
Change in Net Assets 3,548,974 2,513,113 5,110,631 1,335,885 4,989,410 Population of Service Area 13,174 13,166 12,993 12,984 13,477 Population of City 7,662 7,732 7,508 7,503 8,050
# of Electric Customers 7,251 7,305 7,346 7,365 7,418 # of Telephone Access Lines 9,554 9,039 8,122 7,467 6,994 # of Water Customers 3,035 3,230 3,223 3,217 3,207 Revenue Bond Coverage
3.92 3.21 2.93 2.30 2.80 * Water is only provided within the City ** Change in accounting standards payment in lieu of tax must be reported as a transfer D-2 Page 3 of6
EXHIBIT B CITY OF KETCHIKAN PORT FINANCIAL SUMMARY 2006 2007 2008 2009 2010 Audited Audited Audited Audited Audited ASSETS Cash $4,529,687 $8,471,112 $4,939,650 $4,827,125 $4,364,226
Port Facilities (net) 10,405,568 41,226,714 46,312,527 44,947,620 43,642,947 Construction Work in Progress 26,082,665 3,493,927 832,620 963,018 1,116,782 Restricted Assets 19,872,348
4,743,690 4,215,907 4,819,708 5,307,521 Other Assets 515,697 560,772 2,103,049 1,730,443 1,281,312 Total Assets 61,405,965 58,496,215 58,403,753 57,287,914 55,712,788 LIABILITIES AND
NET ASSETS General Obligation Bonds Payable 1,685,000 1,480,000 1,265,000 1,035,000 795,000 Revenue Bonds Payable 38,500,000 37,875,000 37,220,000 36,540,000 35,830,000 Other Liabilities
7,105,081 5,130,176 4,191,404 3,147,957 3,134,814 Total Liabilities 47,290,081 44,485,176 42,676,404 40,722,957 39,759,814 NET ASSETS 14,115,884 14,011,039 56,063,232 16,564,957 15,952,974
Operating Revenues 6,427,207 7,895,063 8,839,267 8,922,228 8,000,492 Operation and Maintenance 2,299,099 1,506,749 3,653,251 5,368,009 5,319,252 Depreciation 657,485 985,775 1,390,850
1,460,265 1,446,527 Property Taxes 154,041 167,219 Payment in Lieu of Taxes ** Operating Income (Loss) 3,470,623 5,402,539 3,795,166 1,939,913 1,067,494 Non-Operating Revenue (Expense)
(277,726) (1,681,716) (1,896,558) (1,718,248) (1,903,421 ) Net Income (Loss) Before Contribution 3,192,897 3,720,823 1,898,608 221,665 (835,927) Contributions and Capital Grants 9,448
1,848,500 703,308 905,943 518,944 Extraordinary Item Special Item 14,789 Transfers (1,853,659) (5,572,069) (617,625) Transfer -Payment in Lieu of Taxes (1 02,1 OO} (102,100) (282,770)
(290,000) (295,000) Change in Net Assets 1,246,586 (104,846) 1,716,310 837,608 (611,983) 1.25 x Annual Debt Service 6.59 2.67 3.42 2.78 2.23 1.0 x Annual Debt Service/Reserves AccounURepair
and Replacement Fund/SPH Lease Payments N/A N/A 1.61 1.31 1.10 * Unaudited # of Ships 36 36 37 36 26 # of Calls/Stops 503 499 502 496 429 # of Water Passengers 838,880 899,638 941,910
937,419 828,929 Reflects statistical information provided by the Ketchikan Visitors Bureau D-3 Page 4 of 6
EXHIBIT B IGIIY ANU H OF SITKA GENERAL OBLIGATION FINANCIAL SUMMARY Municipal Financial Position 2007 2008 2009 2010 Avera~e !Prope ty 1 ax LouectIOns Borrower's Property Tax Rate per
$1,000 $6.00 $6.00 $6.00 $6.00 $6.00 Municipal Levv $5,003,463 $5,558,821 $5,735,000 $5,768,331 $5,516,404 Current Year's Collections $4,983,438 $5,501,591 $5,689,030 $5,735,962 $5,477,505
Current Collection Rate 99.60% 98.97% 99.20% 99.44% 99.30% Total Year's Collections $5,013,706 $5,525,653 $5,737,647 $5,777,183 $5,513,547 Total Collection Rate 100.20% 99.40% 100.05%
100.15% 99.95% ....eneral Fund 7_$ 8~936 Unreserved Ending Fund Balance $ 8,766,337 $ 6,389,357 $ $7,800,721 Expenditures $ 23,002,357 $ 23,575,260 $ 23,817,458 $ 23,597,203 $23,498,070
Fund Balance/Expenditures 38% 27% 30% 38% 33% Total Revenues $ 23,513,736 $ 24,718,668 $ 25,925,306 $ 24,882,306 $24,760,004 Intergovernmental Revenues $ 1,949,569 $ 2,174,717 $ 2,393,157
$ 2,219,501 $2,184,236 Percentage Intergoverrunenlal 8% 9% 9% 9% 9% IUverall MUnICIpal Debt Debt PosItion Revenue Debt -Enterprise Funds $ 48,625,608 $ 50,247,039 $ 50,517,063 $ 48,467,078
Revenue Debt -Goverrunental Funds $ -$ 195,000 $ 185,250 $ 175,500 General Obligation Debt -Govenunental Funds $ 30,540,000 $ 29,035,000 $ 34,410,000 $ 32,550,000 General Obligation
Debt -Enterorise Funds $ -$ -$ -$ -Total General Obligation Debt $ 30,540,000 $ 29,035,000 $ 34,410,000 $ 32,550,000 Total Revenue and General
Obligation Debt $ 7916:~ $ 79,477,039 $ 85,112,313 $ 81,192,578 Governmental GO {Jev[ A<op<oprl Value 3.47% 3.65% 3.42% Total Revenue and GO Debt/AV. 9.18% 8.49% 9.04% 8.52% ation Uebt
Per ~apita $3,533 $3,370 $3,989 $3,665 Total Revenue and GO Debt Per Capita $9,158 $9,225 $9,866 $9,142 General EconOlnic and Demographic Data 2007 2008 2009 2010 Annual Growth Rate
Population 8,644 8,615 8,627 8,881 2.94% Taxable Assessed Value $ 861,978,476 $ 935,894,126 $ 941,464,880 $ 952,574,685 1.18% Assessed Value Per Capita 1$ 99,720 $ 108,635 $ 109,130
$ 107,260 Top 10 Tax Payers as a %of Assessed Value Value 6.51% 635% 836% 8. D-4 Page 50f6
EXHIBIT B City and Borough of Sitka Electric Enterprise Fund Financial Summary 2004 2005 2006 2007 2008 2009 2010 Audited Audited Audited Audited Audited Audited Audited Assets Cash
8,143,639 9,387,420 7,413,414 8,458,918 9,393,512 8,993,721 8,868,159 Restricted Assets 6,388,355 6,412,431 6,893,530 6,964,401 7,020,244 7,376,785 7,149,277 Other Assets 1,984,033 1,821,898
2,188,653 2,189,489 3,185,865 3,602,067 4,256,023 Construction in Progress 1,220,488 1,580,484 1,504,571 1,524,810 1,130,584 2,883,684 5,555,467 Utility Plant in Service 71,247,965 69,529,520
69,974,445 69,898,054 67,869,782 66,094,407 64,914,833 Total Assets 88,984,480 88,731,753 87,974,613 89,035,672 88,599,987 88,950,664 90,743,759 Liabilities and Net Assets Liabilities
Other Liabilities 320,698 492,294 471,531 663,351 654,181 419,304 636,920 Revenue Bonds Payable 39,600,000 38,050,000 36,390,000 34,570,000 32,550,000 30,395,000 28,090,000 Deferred
loss on bonds (1,650,996) (1,511,558) (1,372,120) (1,232,682) (1,093,244) (954,781) (815,343) Revenue Note Payable 10,386,520 10,287,213 9,977,213 9,760,076 9,534,167 9,299,130 9,054,598
Total liabilities 48,656,222 47,317,949 45,466,624 43,760,745 41,645,104 39,158,653 36,966,175 Net Assets 40,328,258 41,413,804 42,507,989 45,274,927 46,954,883 49,792,011 53,777,584
Operating Revenues 9,538,911 9,976,533 9,999,043 10,716,798 10,939,726 11,846,117 10,852,914 Operating Expenses Administrative and General 1,309,195 1,204,058 1,334,555 1,392,512 1,799,393
1,955,508 1,699,737 Operation and Maintenance 2,946,610 3,582,937 3,282,047 3,752,626 4,144,733 4,465,023 4,366,115 Depreciation 1,815,328 1,877,245 1,920,919 2,006,972 2,024,708 1,998,438
1,994,177 Operating Income 3,467,778 3,312,293 3,461,522 3,564,688 2,970,892 3,427,148 2,792,885 Nonoperating revenue (expense) Investment Income 248,638 751,273 450,992 791,965 1,020,133
642,422 523,298 Interest Expense (3,045,411) (2,976,520) (2,881,055) (2,741,335) (2,621,198) (2,469,192) (2,369,426) Other --62,726 50,717 315,931 351,823 208,962 Net Income before contributions
and transfers 671,005 1,087,046 1,094,185 1,666,035 1,685,758 1,952,201 1,155,719 Capital contributions 1,300,914 603,582 2,853,752 Extraordinary Item: Net Pension Obligation Relief
281,345 Transfer In (Out) net (186,823) (1,500) --(5,802) -(23,898) Change In Net Assets 484,182 1,085,546 1,094,185 2,966,949 1,679,956 2,837,128 3,985,573 Population of City and Borough
8,805 8,947 8,833 8,644 8,615 8,627 * # of electric customers 4,975 5,012 5,061 5,113 5,197 5,257 5,278 KwH Sold 94,634,990 95,844,639 98,405,781 106,491,085 109,997,183 114,866,192
108,739,970 Revenue Bond Debt Service 3,949,208 3,987,436 4,111,182 4,024,958 4,113,594 4,106,690 4,108,407 Revenue Bond Coverage (> 1.25) 1.40 1.49 1.43 1.59 1.54 1.56 1.34 * Data not
available D-5 Page 6 of 6
SUBORDINATION AGREEMENT The Alaska Department of Environmental Conservation ("ADEC"), as lender and administrator of the Alaska Clean Water Fund ("ACWF"), entered into a Loan Agreement
with the Kodiak Island Borough ("Borough") for the Kodiak Island Borough Landfill Design and Construction Project. The Loan Agreement, ACWF Loan number 505041, was entered into April
6, 2006 evidencing a loan to the Borough in the principal amount of $2,612,000 to be repaid over a is-year term from revenues generated by the Borough's landfill. ADEC hereby agrees
to unconditionally subordinate its lien on pledged revenues to the holders of any Bonds and Parity Bonds issued by the Borough, or to be issued in the future, pursuant to the Borough's
Resolution FY 2012-06 adopted August 4, 2011. This Subordination Agreement shall not operate or be construed to amend the Loan Agreement or to affect DEC's lien priority except as stated
herein. Dated and effective August 31, 2011. Bill Griff~h, ~ing Director of Water Alaska Department of Environment Conservation Division of Water -. ;, /,/1 _~.,.r//J ./. /' ;j/Z J /'S
....pt//0 ',f /~~(j t/'«" STATE OF ALASKA THIRD JUDICIAL DISTRICT )) ss. ) THIS CERTIFIES that on this (t\ day of ::Xr;~n¥j~v-'I ,2011, before me, the undersigned Notary Public of the'
State of Alaska, personally appeared BILL GRIFFITH, known to me and to me known to be the Acting Director of Water for the Alaska Department of Environmental Conservation, and acknowledged
to me that he knows the contents of the foregoing document and executed the foregoing document on behalf ofADEC for the purposes therein set forth. WITNESS my hand and notarial seal
the day and year first hereinabove written. <-"--T/»t:> flf:W;..~\\O,.·'"vt/\ . tC.l\)Oiff D..1'\ N'ofary Publi~of the State of Alaska My Commission Expires: rn ;.f:/· \
THIS AGREEMENT is amended as of September 2, 2011, by the Alaska Depmtment of Environmental Conservation (the Department) and the Kodiak, Island Borough (the Borough), acting pursuant
to Resolution FY2006-16 approved by the Kodiak Island Borough for a loan amount of $2,612,000 and a loan term of 15 years, This loan agreement is amended by replacing Section 4.3 and
adding a new section entitled Section VII --Special Provisions Language. Section '1,3 ,'lill read as follows: The Borough assures the Department that the Borough has not pledged revenues
for the repayment of its loan that have been previously pledged or encumbered, unless specifically set forth in the Borough's approved application. The pledged revenues for repayment
of the loan and each separate source of revenue are specifically identified and described in the Borough's . submitted application, Additionally, the Borrower agrees to meet the follo'vYing
actions to assure the Department that sufficient revenues are provided fOf repayment of the loan: . la) the Borrovier will commit to a series of rate hikes for landfill user fees \ .
that achieves an operating ratio where revenues are greater than expenses, and a minimal three (3) month cash reserve can be set. (b) the Borrower wm restrict 100% of the annual loan
repayment to the Department frorn the unrestricted reserves in the Borrower's Enterprise Fund 'lHltil part (a) is considered sufficiently satisfied as determined by the Department. (c)
The borrower 'will cooperate in annual financial analysis by the department, LandfiD Design and Construction Loan Amendment -1-ACWF#505041
The Borrower must also demonstrate to the Department that this restriction for the full annual loan repayment is in place by the time of submission of the first disbursement request
under the loan. Language for the new section will read as follows: Section. 7, L As paxt of the financial capacity review completed by the Department on issuing this amendment to the
Borrower's loan based on the Department accepting a subordinate position on this loan, the following item was identified as a critical action for improving the Borough's overall capacity
for long term operation of the landfill: The Borrower will work with their Borough Assembly to bring the facilities operating revenues, with depreciation, to an operating ratio \vhere
revenues are greater than expenses. The above action is not mandatory for meeting conditions of this loan agreement. However, the progress on execution of these actions will be closely
reviewed on any loan applications on future ACWF Intended Use Plans with the Department These new Sections shall become part of the original loan agreement (ADEC Loan Number 505041)
fu'1d are hereby agreed to by: Landfill Design ~'1d Constru.ction Loan l\..ruendment ACWF#50S041
CONSJE:RVA'I'JfON By: S'TA'1i'E OF' ALAS}~A '1' '..1\0 The foregoing instcu.ment was acknowledged before me (ms .s~L ...__. day of The foregoing instrument v!as acknowledged before me
this ..._".. day of 2011 Landfill Design and Construction Loan Amendment -3-ACWF#505041
n..... I ALASl{A ClrEAN WATER FUND AGREEMENT ACWF LOAN #505041 Kodiak ,Island Borough , Landini Design and Construction THIS AGREEMENT is ,entered into as of April '6> 2006, by the Alaska
------,D~pB!Ft:m€-!lt-Qf-EIlVi:r=G-E:m(5ntal-CQIl.s~FVatiQB-{th~D€-paa:tm~rlt}--:aBe::l~-€-KQdiak,-----. Island Borough (the Borough)', acting p-qrsuant to Resolution FY2006-16 , ,approved
by the Kodiak Island Borough for a lo'an ,amount of $2,612;000 and a lo~ term of ,15 years. ' SECTION I -DEFINITIO~S section 1.1. Exc~ptwherethe Context clearly indicates otherwise,
tenns used in. this Agreement will' have the meaning ascribed to them ~ this section. (a) "Approved Application" means the application~ubmitted,tothe Department on March 30, 2006, together
with ?II attachments and supporting documentatiori, as approved by the Department and the Borough. , (b) "Finance Charge Rate" means 1.50 percent per annum: (c) "Contract period" means
the time period commencing on the date . this agreement,is sigriedby the' Borough and,tenninating on the date the Borough repays the loan in full. ' (d) "Default" means the Borough has
failed to make a loan repayment , within 90 days of the due date, as determined by the repayment schedule prepared by the Department immediately following initiation of operation of
the facility. ' ' , , , (e) , "Eligible Project Costs" include the following costs: demolition, construction, and engiheering for the Project Facility; machinery, furnish41gs, and equipment;
surveys, plans, estimates, and specifications;, necessary , in~urance; fmandal and environmental investigations; laboratory testing, ,resident engineering and inspection fees; force
account; legal expenses; and 'any other necessary miscellaneous expenditures, minus the amount of any' , grant applicable to foregoing costs. Eligible project costs for this portion
of the project are estim~tedto be $2,612,000 for this project. , Landflll Design and Construction, Loan Agreement ~l-ACWF#505041
(ij "Participation Payment" means the amount per year necessary to' amortize the loan. . (g) "Project Facility" means the facility to be constructed pursuant to this Agreement as described
generally in the Approved Application dated March 30,2006, and described in detail in the project's facility plan. This' project will provide for the design and construction of a leachate
collection and treatment system in a new lined landfill cell. SECTION II -RIGHTS OF ACCESS SectiOJL2~ The Department has the...right at alLreasonabJe timesJn....e.nte.....r. '-.t...b.
J.>e~__._._.._.._... _... project site, for the purpose of inspecting the facility. SECTION III -ACQUISITION OF PROJECT SITE, CONSTn,UCTION OF PROJECT FACILITY, LOAN DISBURSEMENT, AND
PAYMENT OF COSTS Section 3.1. With the exception of land easements, all real estate and personal property constituting the Project Facility and the project must belong to the Borough.
Section 3.2. In connection with the construction of the project facility, the Borough agrees that: (a) The Borough will not begin construction of the Project Facility until the Department
has reviewed and approved the plans and specifications for· the project. In its approvals the Department may specify changes or conditions to the plans and speCifications. The Department
must approve any subsequent changes to, or deviations from, approved plans. (b) The Borough will ensure that contract wages paid for the construction of the Project Facility conform
to the prevailing wage rates . established for the locality by the Alaska Department of Labor under AS .36.05.010, and with any applicable federal standards under 42 U.S.C. 300j-9(e).
. . (c) Any construction contract estimated to equal or exceed $50,000 will be awarded through a competitive bidding process and any construction contract estimated to be less than $50,000
may ~e negotiated if the Department approves the solic~tationand n.egotiation procedures. . Landfill Design and Construction Loan Agreement -2-ACWFlf5D5041
(d) All construction contracts and contractors' estimate forms will be prepared so that materials and equipment may be 'readily itemized as to ailowable project costs and noneligible
costs. (e) Any change in a construction contract that will alter the contract specifications, time, price or will substantially moclify the proposed treatment process must be submitted
to the Department for approval if the Borough wishes to have the modifications considered loan eligible: (f) The construction of the Project Facility will conform to applicable federal,
state, and local laws, 'ordinances, and regulations. (g) The Borough will proceed expeditiously and complete the Project Facility in accordance with the Approved Application, project
schedule, surveys, plans, profJ1es, cross-sections, specifications, and amendments. Section 3.3. The Borough agrees to administer this loan in a non-" discriminatory manner. No person
shall be discriminated against'based on race, religion, color, national origin, gender or disability. disability. Section 3.4. when applicable, the Borough will comply with Title 1-'
Employment of the Americans with Disabilities ACt of 1990 (P.L. 101-336) and in accordance with Title I of that Act, shall not discriminate against a qualified individual with a disability
because of the disability of such individual in regard to jo,!? application proc~dures, th~ hiring, advancement, or, discharge of employees~employee compensation; job training~ and other
terms, conditions, , and privileges of employment. Section 3.5 When applicable; the Borough will comply with Title II-Public' . Services of the Americans with Disabilities Act of 1990
(P.L. '101-336) and in accordance with Title II of the Act, no,qualified individual with a disability ,shall, by reason of such disability, be excluded from participation in or be de~ed
the benefits of the services. programs, or activities of a public entity, or be subjected to discrimination by any such entity. Section~ 3.6 When applicable, the Borough will comply
With Title II,' Part 35, Section 35.151 of the Act "New Construction and Alterations," (a) Design'and construction: Each facility or part of a facility constrUcted by, on behalf of,
or for the use of a public entity shall be designed and constructed in such manner that the facility or part of the facility is readily accessible to and usable by individuals with disabilities,
if the construction was commenced BIter January 26. 1992. (b) Alteration: Each facility or part of a facility altered by, on behaIf, of or for the use of a public entity in a manner
that· affects or could affect the usability of the facility or part of the facility shall, to the maximum. extent Landft11 Design and Construction Loan Agreement -3-ACWF#505041
c). '.i ()i feasible, be altered in such manner that the altered portion of the facility is readily accessible to and usable by individuals with disabilities, if the alteration was commenced
after Januaty 26, 1992. (c) ~ccessibi1ity standards: Design, construction or alteration of facilities in conformance with the Unifonn Federal Accessibility Standards (UFAS) (Appendix
A to 41 CRF part 101-19.6) or with the Americans with Disabilities Act Accessibility Guidelines for Buildings and Facilities (ADAAG) (Appendix A to 28 CFR Pari: 36) shall be deemed to
comply with the requirements of this section with respect to those .facilities, except that the elevator exemption contained at section 4.1.3(5) and section 4.1.5(1)0) of ADAAG shall
not apply. Section 3.7 When applicable, the Borough will comply with Title III, Part 36, Section 36.401 ofthe Act "New Construction." Except as provided in paragraph (b) and (c) of the
Act, discrimination for purposes of this part includ~s a failure" to design and construct facilities for first occupancy after January 26, 1993, that are readily accessible to and usable
by individuals with disabilities'. " Section 3.8 When applicable, the Borough will comply with Title III, Part 36. Section 36.402 of the Act "Alterations" (a) General: Any alteration
to a place of public accommodation or a commercial facility, after January 26, 1992t shall be made so as to ensure that, to the maximum extent feasiblet the altered portions of the facility
are readily accessible to and usable by individuals with disabilities, including individuals who use wheelchairs. (b) Alteration: An alteration is.a change to a place of public accommodation
or a commercial facility that affeCts or could affect the usability of the building or facility or any part thereof. Section 3.9. The Borough will comply with the minority and women
owned business requirements of the State Revolving Loan Fund programt and will require its contractors to also meet these requirements. Section 3.10. The Borough will require each copstruction
contractor to furnish a performance and payment bond in an amount at least equal" to 100 percent of the contract price. Section 3.11. The Borough will require its contractors and subcontractors
to maintain workers compensationt public liability, property damage, and vehicle liability insurance. Until the Project Facility is completed by the Borough, the Borough (or at the option
of the Borough, the contractor) will maintain insurance for the loss of the facility for the benefit of the Department, the Borough, the prime contractor, arid all subcontractors, as
their interests in the" Project Facility may appear. . " Landfill Design and Construction Loan Agreem~nt -4-ACWF#505041
.. Section 3.12. Subjec~ to the. terms and conditions of this Agreement, th~ 'eligible project costs less other funding sources will'be disbursed by the Department upon submittal and
departmental approval of invoice~. Section 3.13. If this project fmishes under the estimated cost of construction, it will be funded only as necessafy to complete the project. Section
3.14. Upon completion of the Project Facility, the Borough shall provide a statement to the Depar.tment of the project fmal costs by category of expenditure, including but not limited
to costs lor: administration, design, construction engiq.eering, construction and equipment. . SECTION IV -PARTICIPATION PAYMENTS BY THE BOROUGH . . Section 4.1. This.1oan is made to
the Borough from the Alaska Clean Water Fund for the maXimum amount of $2,612,000. Section 4.2. The Borough agrees to repay the principal amount and the . finance charge rate on all
cash draws made to the Borough accord~ng to the repayment schedule, which will be prepared by the Department and confinned by the Borough following initiation of operation of the facility.
The repayment schedule for the actual amount of loan payments made to the Borough wiil provide that: (a) the Borough will pay a finance charge of 1.50 percent on each disbursement. Accrual
of the finance charge will begin one year after the date of the first disbursement to the Borough. (b) the loan amount will be paid back within 15 years following initiation of operation
of the facility. Repayment of the loan will be made with either equal annual principal payments plus the fmance charge' or equal annual total payments inchiding the .finance charge.
Other r~paymentmethods may be negotiated with the Department. (c) the first loan repayment will be due one year following substantial completion and initiation of op~ration of the facility.
Section 4.3. The Borough assures the Department that the Borough has not pledged revenues for the repayment of its loan that have been previously. pledged or encumbered, unless specifically
set forth in the Borough's approved application. The pledged revenues for repayment of the loan and each separate source of revenue are specifically identified and described in the Borough's
submitted application. Landfill Design and Construction Loan Agreement -5-ACWF#505041
SECTION V -MAINTENANCEt OPERATIONt INSURANCE and AUDIT. Section 4.9. The provisions of AS 37.15.575 relating to state aid interception apply to the loan made under this agreement. Section
4.8. If, prior to completion of the contract period) the Project Facility is damaged or destroyed, the Bor"ough is liable to the Department for all amounts due under this Agreement.-6-ACWF#505041
Section 4.6, If a.payment is received by the Department more than 30 days after it is due, the Borough agrees to pay a late charge of five percent of the payment. Interest on the unpaid
balance will continue to accrue at the finance charge rate and must be paid in addition to the late charge. Payments in arrears over 90 days, will be referred to the Attorney Generals
Office for· collection. . . . Section 4,5, The Borough agrees that if pledged revenues are insufficient to meet any loan payment to the Department when due) the Borough will pay the
deficiency in its loan payment from any legally available funds accruing to or in the possession of the Borough. Repayment of the loan which is the subject of this loan agreement shall
not be a direct and general obligation of the Borough. Section 4.4, In the event that any of the revenues pledged by the Borough for the repayment of its loan are encumbered by a lien
of f:I.11Y prior outstanding debt, the Borough will furnish the·Department with legal assurance that the excess of such prior encumbered revenues are legally available for pleclging
to the Alaska Clean Water Fund. Section 4.7·, The Borough agrees that it will separately account for all monies received from the Alaska Clean Water Fund and will maintain project accounts
in accordance with gener-ally accepted governmental accounting principles. LandfIll.Design and Construction Loan Agreement Section 5.1. The Bor.ough agrees to prepare a rnailU~ for operation
and maintenance of the facility which is approved by the Department prior to initiation of operation of the facility. Section 5.2. The Borough must ensure that a Department approved
sewer use ordinance and auser charge system are adopted prior to initiation of operation of the facility.
() Section 5.3. The Borough shall initiate operation of the Project Facility immediately upon completion of construction and may not discontinue operation: of the ProjeCt Facility without
Departm~nta1approval. Within one year after the initiation of operation, the Borough must certify to the Department that the facility is performing up to design standards. The Borough
must ensure that sufficient qualified operatjng personnel certified by the State of Alaska will be retained to operate the Project Facility. Nothing contained in this Agreement shall
be construed as an obligation or pledge of the Borough to appropriate or expend general funds and general revenues of the Borough to operate or maintain the Project Facility. Section
5.4. The Borough agrees to insure the Project Facility against loss or dainage in an amount at least equal to the loan amount specified in Section 4.1. Section 5.5. An insurance policy
issued pursuant to Section 5.4 must be written or endorsed to make losses payable to the Department Department and the Borough as their interests may appear. The interests of the Department
are limited to the unpaid principal balance of the loan and any finance charge and penalties accrued as of the date such loan may be paid in full as a result of any insurance payoff,
following destruction or damage to the facility. Section 5.6. In the event the Borough fails to maintain the full insurance coverage required by this Agreement, the Department may take
out the required policies of insurance and pay the premiums. All amounts so advanced by the Department will become an additional obligation of the Borough to the Department. Seotion
5.7. The Borough agrees to submit a financial report for the Project Facility for Departmental approval within one year after initiation of operation. of the facility. A project audit,
performed by the Department, will cover the entire multi-year project. Section 5.8. Financial assistance received under this loan agreement is considered federal assistance and is to
be included when detennining the threshold amount for a Federal single Audit. However, fmandal assistance received under this loan agreement is not subject to State Single Audit. Landftll
Design and Construction Loan'Agreement -7-ACWF#505041
··0 ..) o SECTION VI -MISCELLANEOUS PROVISIONS Section 6.1. Any disbursement; or repayment made under this Agreement by eitller party to the other; shall be delivered by registered or
certified mail, postage prepaid, return receipt requested, or delivered personally, and, (a) if addressed to the Department, will be sent or delivered personally to: Alaska Department
qf Environmental Conservation Division of Water Alaska Clean Water Fund -Confidential: Terri Lowell 410 Willoughby Avenue, Suite 303 P.O. Box 111800 Juneau, Alaska 99801 (b) if addressed
to the Borough, will be sent to or delivered personally to: Kodiak Islanq Borough 710 Mill Bay Road Kodiak, AK 996-15 .Section 6;,2. Departmental approvals, required by this Agreement
will not be unreasonably withheld. Section 6.3. This Agreement is made subject to and conditional upon the availability of funds. Section 6.4•.This Agreement is effective as of the date
set forth above and continues in full force and effect until the final day of the Contract Period. Section 6.5. This Agreement is binding upon the parties specified below; and .to any
person) office) or board succeeding either of the parties. This Agreement may not be assigned by the Borough without written consent of the Department. Section 6.6. The Department may
cancel all or any part of this af?;reement if: (a) Any representation or o~er statement made by the Borough to the Department in connection with its application for a loan from th~ Alaska
Clean Water Fund is incorrect or incomplete in any material respect; Lanc!fill Design and Construction Loan Agreement -8-ACWF#505041
(b) The Borough has violated commitments made by it in its Approved Application and supporting documents, has not adhered to the regulations of the Alaska Clean Water Fund (18 MC 76),
has violated any of the terms of this Loan Agreement; or (c) The [mandaI position of the Borough has, in the opinion of the Department, suffered a materially adverse change. Section
6.7. No portion of this loan amount may be used for lobbying or propaganda purposes as prohibited by 18 U.S.C. Section 1913 or Section 607(a) of Public Law 96-74. Landfill Design and
Construction Loan Agreement ~9-ACWF#505041
ALASKA DEPARTMENT OF ENVIRONMENTAL CONSERVATION By: ACKNOWLEDGEMENT STATE OF ALASKA Third Judicial District ~,~~""""f~J.l..-as-ka-My commission expires: IDlij!)D\ }03 The foregoing instrument
was acknowledged before me this ...;(O"""cjV.,--_ day of -4n'\ \\ll!C({(frr;. L-1-----.... \~M.n,; rr..-: 4~ ,J:lY';fY",,'l ~ 'N .... ,. ~ ~ ..' O~:...;·:~-;.. ~. ....A .~';:. :::: :~
4 ....... ~':L: ... ~ .=.... ":j! v~ ,m.... -~ .... ~/C :::o~ .~.... . ~ ~ ··9':'.'U.A~,"· ~ ~ \':' :I.Q \\' :l111}} 11 Jll \ ACKNOWLEDGEMENT STATE OF ALASKA Third Judicial District
KODIAK ISLAND BOROUGH The foregoing instrument was acknowledged before me this ---,-.::....:..._ ~f)"--~---'~-"---_, 2006 ~\\""""""~ ~"~.J~N MC~A~"~ <§. ,,"' ...~ ~ ~~ ~ ~ ~"'-.~ ••
'9~'" --__Ii..'.../.OTAII"···.•...l,---~ -:-~ . .-\ 0. .... "(JB.L\C l ifl ~~ '. .0 ~~ ~ ..,~ ••••••••••• ..A0 -§ ~.. \r_.* ~,,~/8LANO~ ~\"fti ~I".IJIII"'\~ LandfIll Design and Construction
Loan Agreement ·10-of Al~sia6(l~, ires:~/{) ACWFtl505041
UNITED STATES OF AMERICA STATE OF ALASKA SPECIMEN KODIAK ISLAND BOROUGH, ALASKA SOLID WASTE DISPOSAL FACILITY REVENUE BOND, 2011 No. 1 $3,275,000 REGISTERED OWNER: ALASKA MUNICIPAL BOND
BANK PRINCIPAL AMOUNT: THREE MILLION TWO HUNDRED SEVENTY-FIVE THOUSAND DOLLARS The Kodiak Island Borough, Alaska (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, from the sources stated herein, the Principal Amount
indicated above in the following installments on September 1 of each of the following years, and to pay, from the sources stated herein, interest on such installments from the date hereof,
payable on September 1,2012 and semiannually thereafter on the first days of each March and September of each year, at the rates per annum as follows: Maturity Principal
Interest Maturity Principal Interest Date Amount Rate Date Amount Rate 2012 $155,000.00 3.00% 2020 $ 225,000.00 5.00% 2013 160,000.00 4.00 2021 235,000.00 5.00 2014 170,000.00 5.00 2022
245,000.00 5.00 2015 175,000.00 4.00 2023 260,000.00 5.00 2016 185,000.00 5.00 2024 270,000.00 4.00 2017 195,000.00 5.00 2025 285,000.00 4.00 2018 205,000.00 5.00 2026 295,000.00 4.00
2019 215,000.00 4.00 For so long as this Bond is owned by the Alaska Municipal Bond Bank (the "Bond Bank"), payment of principal and interest shall be made as provided in the Loan Agreement
between the Bond Bank and the Borough. In the event that this Bond is no longer owned by the Bond Bank, payment of principal of and interest on this Bond will be made by check or draft
mailed by first class mail to the registered owner at the address appearing on the bond register of the Borough, provided that the fmal installment of principal and interest on this
Bond will be payable at the office of the Finance Director (the "Registrar") upon surrender of this Bond. Interest shall be computed on the basis of a 360-day year composed of twelve
30-day months. Both principal of and interest on this bond are payable in lawful money of the United States of America solely out of the special fund of the Borough known as the "Solid
Waste Disposal Revenue Bond Account" created by Section 12 ofResolution No. FY 2012-06. This bond is one of an issue of bonds (the "Bonds") aggregating the principal sum of $3,275,000.00
and is issued pursuant to the Constitution and statutes ofthe State of Alaska and
the duly adopted resolutions and ordinances ofthe Borough, including Resolution No. FY 201206 (the "Bond Resolution"). The definitions contained in the Bond Resolution shall apply to
capitalized terms contained herein. The Bonds are being issued for the purpose of undertaking certain design, engineering, and capital improvements to the Borough's Solid Waste Disposal
Facility.Bonds owned by the Bond Bank: maturing on or after September 1, 2022 may be called for redemption at the option of the Borough on or after September, 2021 at a price equal to
the principal amount thereof, together with interest thereon to the redemption date and in the manner as described in the Loan Agreement. The Bonds not owned by the Bond Bank: maturing
on or after September 1, 2022 may be called for redemption by or on behalf of the Borough prior to maturity and upon notice as set forth in the Bond Resolution as a whole on any date
or in part on or after September 1,2021 at a redemption price of 100% ofthe principal amounts thereof, together with interest thereon to the redemption date. The Borough does hereby
pledge and bind itself to set aside out of Pledged Revenues of the Borough and to pay into the Bond Account the various amounts required by the Bond Resolution to be paid into and maintained
in the Bond Account all within the times provided in the Bond Resolution. The pledge of Pledged Revenues contained herein and in the Bond Resolution may be discharged by making provision,
at any time, for the payment of the principal of and interest on this Bond in the manner provided in the Bond Resolution. The pledge of amounts to be paid into the Bond Account is hereby
declared to be a lien and charge upon the Pledged Revenues superior to all other charges of any kind or nature and equal in rank: to the lien and charge thereon for amounts pledged to
the payment of any Future Parity Bonds hereafter issued. The Borough has further bound itself to maintain the Facility in good condition and repair, to operate the same in an efficient
manner and at a reasonable cost, and to establish, maintain and collect Fees for as long as any Parity Bonds are outstanding that will provide Pledged Revenues in an amount not less
than 1.25 the Annual Debt Service Requirement for such year on all outstanding Parity Bonds. It is hereby certified that all acts, conditions and things required by the Constitution
and statutes ofthe State of Alaska and the resolutions ofthe Borough to be done precedent to and in the issuance ofthis bond have happened, been done and performed.
IN WITNESS WHEREOF, the Kodiak Island Borough, Alaska, has caused this bond to be executed with the manual or facsimile signature of its Mayor and to be countersigned with the manual
or facsimile signature of its Clerk and the official seal of the Borough to be impressed or imprinted hereon, as ofthis 15th day of September, 2011. M. Selby, Mayor~~---=-:::-,,----ATTEST:
SIGNATURE CERTIFICATE We, the undersigned officers of the Kodiak Island Borough, a second-class Borough of the State of Alaska, HEREBY CERTIFY that the Kodiak Island Borough, $3,275,000
Solid Waste Revenue Bonds, 2011 (the "Bonds"), were duly and completely signed on behalf of the Kodiak Island Borough by the execution thereon of the signature of the undersigned Jerome
M. Selby, Mayor of said Borough, and duly and completely attested by the execution thereon of the signature of the undersigned Nova Javier, Borough Clerk of said Borough. We further
certify that the signatures subscribed below are the true and genuine signatures of said officers respectively. We further certify: a. that on the date of execution of the Bonds, and
on the date hereof, the undersigned were and are the duly elected or appointed, qualified and acting officers of said Borough authorized to execute the Bonds, holding the respective
offices indicated by the official titles set beneath said signatures below; and b. that the seal which is impressed upon this certificate has been impressed on the Bonds and is the official
seal of the Kodiak Island Borough, Alaska. (SEAL)
CERTIFICATE AS TO ARBITRAGE $3,275,000 Kodiak Island Borough, Alaska Solid Waste Revenue Bonds, 2011 I, KARLETON SHORT, Finance Director of the Kodiak Island Borough (the "Issuer"),
hereby state that, as of the date hereof, the Issuer reasonably expects the following regarding the amount and use of the gross proceeds of the Kodiak Island Borough, Alaska, Solid Waste
Revenue Bonds, 2011 (the "Bonds"). I. Preliminary Matters 1. Purpose of Certificate. This Certificate is provided pursuant to §1.148-2(b)(2) of the Income Tax Regulations. 2. Officer
of Issuer. I am an officer of the Issuer responsible for issuing the Bonds. To the best of my knowledge, information and belief, the expectations of the Issuer stated herein are reasonable.
3. Definitions. All capitalized terms not otherwise defined herein shall have the meanings provided in Resolution No. FY 2012-06 of the Issuer adopted August 4, 2011 (the "Resolution").
Any other terms shall have the meanings ascribed to them in §1 03 and §§141 through 150 of the the Internal Revenue Code of 1986, as amended, and the Income Tax Regulations thereunder
(the "Code"). II. Authorization and Governmental Purpose of the Issue 1. Authorization and Purpose. The Bonds are authorized by the Resolution, and pursuant to the laws of the State
of Alaska, and are issued pursuant to a Loan Agreement dated as of September 1, 2011 (the "Loan Agreement") between the Issuer and the Alaska Municipal Bond Bank (the "Bond Bank"). The
Bond Bank is purchasing the Bonds with a portion of the proceeds of its General Obligation and Refunding Bonds, 2011 Series Three (the "Series Three Bonds"). The Bonds are being issued
for the following purposes: (a) to provide funds to pay the cost of designing, constructing, and installing capital improvements to the solid waste system owned by the Issuer (the "Project");
and (b) to pay issuance costs of the Bonds. 2. No Overissuance. The total amount of the proceeds of the Bonds will not exceed the total amount necessary for the governmental purposes
of the the Bonds.
III. Sources and Uses of Sale Proceeds of the Bonds 1. Sale Proceeds. The total amount of sale proceeds of the Bonds are $3,683,164.20, consisting of the $3,275,000 face amount of the
Bonds plus $408,164.20 net original issue premium. There is no direct monetary benefit, such as a rebate of bond insurance premium, surety bond premium or letter of credit fee, being
received by the Issuer in connection with the issuance of the Bonds. 2. Allocation of Sale Proceeds. The sale proceeds of the Bonds will be allocated as follows: (a) No more than $3,650,000.00
will be allocated to expenditures for costs of the Project; and (b) The remainder will be allocated to expenditures for issuance costs of the Bonds. IV. Replacement Proceeds 1. Bonds
Not Outstanding Longer Than Necessary. All of the net sale proceeds of the Bonds will be used to finance capital expenditures for the Project. The portion of the Bonds that is to be
used to finance capital expenditures for the Project will not be outstanding for a period longer than 120% of the average reasonably expected economic life of the Project. 2. Bona Fide
Debt Service Fund. The Issuer has established under the Resolution the Debt Service Subaccount, a fund that is used primarily to achieve a proper matching of revenues of the Issuer with
principal and interest payments on Parity Bonds, including the Bonds, within each bond year. The Issuer will deplete amounts in this fund allocable to the Bonds at least once each bond
year, except for a reasonable carryover amount not exceeding the greater of (a) the earnings on the fund allocable to the Bonds for the immediately preceding bond year, or (b) onetwelfth
of the principal and interest payment on the Bonds for the immediately preceding bond year. As provided by the Loan Agreement, the Issuer has deposited $295,946.94 into the Debt Service
Subaccount; such amount will be used to pay debt service on the Bonds within thirteen months of the date of deposit. 3. Reserve Fund. The Issuer has established under the Resolution
the Reserve Subaccount. The Issuer has deposited available funds in the amount of $302,500 in the Reserve Subaccount. Moneys may be withdrawn from the Reserve Subaccount to pay principal
and interest on Parity Bonds, including the Bonds. The amount in the Reserve Subaccount allocable to the Bonds will equal the least of (i) 10 percent of the issue price of the Bonds,
(ii) maximum annual debt service on the Bonds, or (iii) 125 percent of the average annual debt service on the Bonds. Page 2
4. No Other Replacement Proceeds. Other than amounts specifically identified as replacement proceeds of the Bonds in this Certificate, there are no amounts (including without limitation
sinking funds, pledged funds and other replacement proceeds) that (i) are held by or derived from the Issuer, any related party to the Issuer, or the State of Alaska; and (ii) have a
sufficiently direct nexus to the Bonds or to the governmental purpose of the Bonds to conclude that the amounts would have been used for that governmental purpose if the proceeds of
the Bonds were not used or to be used for that governmental purpose. V. Temporary Investment Period for Capital Projects 1. Capital Expenditures. All proceeds of the Bonds not allocated
to a deposit in the Reserve Subaccount will be allocated to capital expenditures. 2. Temporary Period Tests. The Issuer has incurred orwithin six months of the date hereof will incur
a substantial binding obligation (which does not have a contingency within the control of the Issuer or a related party) to a third party to spend at least five percent of the net sale
proceeds of the Bonds on costs of the Project. Completion of the Project and the allocation of net sale proceeds of the Bonds to expenditures will proceed with due diligence. The Issuer
will allocate at least 85% of the net sale proceeds of the Bonds and the amounts received from the investment thereof to expenditures for the Project by September 15, 2014. VI. Yield
Limitations on Investments of Gross Proceeds of the Bonds 1. Investments Without Yield Limitation. The following gross proceeds of the Bonds may be invested without yield limitation:
(a) Amounts to be allocated to expenditures for costs of the Project may be invested without yield limitation for a period not to exceed three years from the date hereof. (b) Amounts
in the Debt Service Subaccount allocated to the Bonds may be invested without yield limitation for a period not to exceed 13 months from the date of their deposit therein. 2. Investments
Subject to Yield Limitation. Gross proceeds of the Bonds that cannot be invested without yield limitation under this section will be invested at a yield, computed in the manner described
in Section V11.2, which is not in excess of the yield on the Bonds by more than .125%. VII. Computation of Yield 1. Computation of Yield on Bonds. For purposes of this Certificate, the
yield on the Bonds is deemed to be equal to the yield on the Series Three Bonds. For the purpose of calculating the yield on the Series Three Bonds, the purchase Page 3
price of the Series Three Bonds is the initial offering price of the Series Three Bonds to the public (excluding bond houses, brokers, and other intermediaries) at which price at least
10% of the Series Three Bonds were sold. The yield on the Series Three Bonds has been determined to be 2.39996%. Such determination as to yield has been made by Western Financial Group,
LLC and is based on the representations made to the Issuer by Western Financial Group, LLC and in turn by Morgan Stanley & Co. LLC, as to the offering prices at which a substantial amount
of the Series Three Bonds were sold. See attached Exhibit A. 2. Computation of Yield on Investments. The yield on an investment allocated to an issue is the discount rate that, when
used in computing the present value as of the date the investment is first allocated to the issue of all unconditionally payable receipts from the investment, produces an amount equal
to the present value of all unconditionally payable payments for the investment. The frequency of of compounding interest that is used to calculate yields on investments allocated to
the Bonds is the same as that used to calculate the yield on the Series Three Bonds. VIII. Hedge Bonds Representations 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 date hereof. Not more than 50% of the proceeds of the Bonds will be invested in nonpurpose investments
(as defined in § 148(f)(6)(A) of the Code) having a substantially guaranteed yield for four years or more. IX. Reimbursement Representations None of the proceeds of the Bonds will be
applied to reimburse the Issuer for expenditures paid before the date hereof, except: (a) Preliminary expenditures such as architectural, engineering, surveying, soil testing, bond issuance
costs and similar costs that, in the aggregate, are not in excess of 20% of the sale proceeds of the Bonds. The costs of land acquisition, site preparation and similar costs incident
to commencement of construction are not preliminary expenditures. (b) Expenditures for issuance costs or for an amount of expenditures that is not in excess of the lesser of (a) five
percent of the sale proceeds of the Bonds or (b) $100,000. (c) Expenditures that are described in a reimbursement resolution or other declaration of official intent that satisfy the
requirements of Section 1.150-2 of the Income Tax Regulations and are paid no earlier than 60 days prior to the Page 4
adoption of such resolution or declaration of official intent and are reimbursed with the proceeds of the Bonds no later than 18 months after the later of (i) the date on which the expenditure
was paid or (ii) the date on which the property financed in whole or in part by the expenditure was placed in service, but in any event not later than three years after the date on which
the expenditure is made. (d) Expenditures that are paid within 60 days prior to August 4, 2011. X. General Representations 1. Other Obligations. There are no other obligations of the
Issuer which are sold at substantially the same time as the Bonds, are sold pursuant to a common plan offinancing together with the Bonds, and are reasonably expected to be paid out
of substantially the same source of funds as the Bonds. 2. Abusive Transactions. The Bonds are not and will not be part of a transaction or series of transactions that attempt to circumvent
the provisions of § 148 of the Code and the regulations thereunder by (i) enabling the Issuer to exploit the difference between tax exempt and taxable interest rates to gain a material
financial advantage, or (ii) overburdening the tax exempt bond market. The Issuer has covenanted that it will make no use or investment of the proceeds of the Bonds which will cause
the Bonds to be Aarbitrage bonds@subject to federal income taxation under the Code. XI. Expectations as to Private Activity Bonds The Issuer reasonably expects that neither the proceeds
of the Bonds, nor the property financed with the proceeds of the Bonds (the "Project"), will be used in such a manner as to cause the Bonds to be private activity bonds under § 141 of
the Code. Specifically, as long as the Bonds are outstanding: 1. General Private Activity Bonds Tests. (a) No more than 10% of the proceeds of the Bonds, and no more than 10% of the
Project, will be used in the trade or business of a nongovernmental person, other than use by a nongovernmental person as a member of the general public. A nongovernmental person is
any person or entity other than a state or local governmental unit. Nongovernmental persons include the federal government and an organization described in § 501 (c)(3) of the Code.
A nongovernmental person uses the Project as a member of the general public only if the Project is intended to be available and in fact is reasonably available for use on the same basis
by natural persons not engaged in a trade or business. Use by a nongovernmental person other than as a member of the general public includes ownership, or use under an arrangement that
conveys priority rights or other preferential benefits, including actual or beneficial use under a lease, management contract, service or incentive payment contract, output contract
or other special arrangement. Page 5
(b) No more than 10% of the debt service on the Bonds will be directly or indirectly (i) secured by any interest in property used or to be used in the trade or business of a nongovernmental
person, or secured by payments in respect of property used or to be used in the trade or business of a nongovernmental person; or (ii) derived from payments in respect of property, or
borrowed money, used or to be used in the trade or business of a nongovernmental person. This test is applied by comparing the present value of the payments or property with the present
value of the debt service to be paid over the term of each Bond, in each case discounted to the Issue Date at a discount rate equal to the yield on the Bond. 2. Private Loan Financing
Test. No proceeds of the Bonds will be used (directly or indirectly) to make or finance loans to any nongovernmental person. 3. Unrelated or Disproportionate Use Test. The amount of
use of the proceeds of the Bonds by a nongovernmental person (as described under Section XI. 1(a) above) and private security or payments (as described under Section XI.1 (b) above)
attributable to unrelated or disproportionate use by a nongovernmental person shall not exceed 5% of the proceeds of the Bonds. The term "Private Use" shall also include any contract
for services relating to or the management operation of any such facilities not in compliance with the guidelines set forth in Revenue Procedure 97-13, as modified by Revenue Procedure
2001-39 (the "Guidelines"). With respect to any management contract, service contract, agreement or arrangement that provides for the management, operation or provision of services with
respect to the Project or any portion thereof ("Service Contracts"), the Issuer represents, warrants and covenants that the Issuer will not enter into, and has not entered into, any
Service Contract with any person or organization other than a state or local government unit unless the Guidelines are satisfied. A contract for janitorial or similar services, or where
the only compensation is reimbursement for actual and direct expenses by the service provider to unrelated parties, in and of itself, will not constitute a Service Contract. The above
requirements do not apply to the extent the Issuer obtains a private letter ruling from the Internal Revenue Service or an opinion of counsel which allows for a variation from the Guidelines.
The Internal Revenue Service or the United States Department of Treasury may promulgate Treasury Regulations incorporating the Guidelines. Until such Treasury Regulations are published,
such contracts, agreements or arrangements that relate to the use or operation of the Project, professional corporations or other "service providers," as that term is used in the Guidelines
(the "Service Provider"), will satisfy the Guidelines if and only if each of the following (a) through (e) is satisfied: (a) The compensation of the Service Provider under the contract
must be reasonable for the services rendered. Page 6
(b) The contract must not provide for any compensation for services, based in whole or in part, on a share of net profits from the operation of the Project. Generally, compensation is
not based on a share of net profits if such compensation is based on a "capitation fee," a "periodic fixed fee" or a "per-unit fee." Under the Guidelines, "capitation fee" means a fixed
periodic amount for each person for whom the Service Provider assumes the responsibility to provide all needed services for a specified period (so long as the quantity and type of services
actually provided to covered persons varies substantially). Under the Guidelines, a "per-unit fee" means a fee based on a unit of service provided as specified in the Contract determined
by an independent third party or the qualified user. Under the Guidelines a "periodic fixed fee" means a stated amount for a stated period. Fixed fees and per unit fees may be subject
to adjustment as set forth in the Guidelines. (c) The contract must provide for a compensation arrangement for the Service Provider that satisfies anyone of the following five paragraphs:
(i) The maximum term of the contract does not exceed the lesser of 15 years or 80% of the reasonably expected useful life of the property financed or refinanced by the Bonds and for
each annual period during the term at least 95% of compensation is based on a periodic fixed fee. (ii) The maximum term of the contract does not exceed the lesser of 10 years or 80%
of the reasonably expected useful life of the property financed by the Bonds and for each annual period during the term at least 80% of Compensation is based on a periodic fixed fee.
(iii) The maximum term of the contract does not exceed five years and in addition the contract is terminable by the qualified user on reasonable notice without penalty or cause, at the
end of the third year of the contract term and at least 50% of the compensation for services for each annual period during the term of the service contract is based on a periodic fixed
fee or 100% of compensation is based on a capitation fee or 100% of compensation is based on a capitation fee and a periodic fixed fee. (iv) If the contract has a term, including renewal
options, that is not longer than three years, all of the Service Provider's compensation may be based on "per-unit fee" or a combination of a "per-unit fee" and a periodic fixed fee.
For this compensation arrangement to satisfy the Guidelines, the contract must be cancelable by the Issuer on reasonable notice, without penalty or cause, at the end of the second year
of the contract term. In addition, the amount of the "per-unit fee" must be specified in the service Page 7
contract or otherwise specifically limited by the Issuer, or an independent third party. (v) If the contract has a term, including renewal options, that is not longer than two years,
all of the Service Provider's compensation may be based on a percentage of fees charged or a combination of a per-unit fee and a percentage of revenue or expense fee. For this compensation
arrangement to satisfy the Guidelines, the contract must be cancelable by the Issuer on reasonable notice, without penalty or cause, at the end of the first year of the contract term.
In addition, the contract must (A) require the Service Provider to provide services primarily to third parties; or (8) involve a facility during an initial start-up period for which
there have been insufficient operations to establish a reasonable estimate of the amount of the annual gross revenues and expenses (e.g., a service contract for general management services
for the first year of operations). During the start-up period only, the Service Provider's compensation may be based on a percentage of either gross revenues, adjusted gross revenues,
or expenses of the Project. (d) For purposes of canceling a contract under the Guidelines, contract termination penalties include (i) a limitation on the Issuer's right to compete with
the Service Provider; (ii) a requirement that the Issuer purchase equipment, goods or services from the Service Provider; and (iii) a requirement that the Issuer pay liquidated damages
for cancellation of the service contract. However, the Guidelines generally do not treat the following as contract termination penalties: (A) a requirement, effective on cancellation
of the contract, that the Issuer reimburse the Service Provider for ordinary and necessary expenses; and (8) a restriction on the Issuer against hiring key personnel of the Service Provider.
(e) No Service Provider has a role or relationship with the Issuer, as appropriate, that, in effect, substantially limits the ability of the Issuer to exercise its rights, including
cancellation rights, under the service contract. Accordingly, not more than 20% of the voting power of the governing body of the Issuer, as appropriate, in the aggregate may be vested
in the Service Provider and its directors, officers, shareholders, and employees. In addition, not more than 20% of the voting power of the governing body of the Service Provider in
the aggregate may be vested in the Issuer, as appropriate, and its directors, officers, shareholders, and employees. Furthermore, the group of persons belonging to both the governing
board of the Issuer, as appropriate, and the Service Provider may not include the chief executive officers of the Issuer, as appropriate, and the Service Provider, or their respective
governing bodies. Finally, the Service Provider and the Issuer, as appropriate, may not be members of the same "controlled group" (within the Page 8
meaning of Treasury Regulations § 1.150-1 (e)) or "related persons" (within the meaning of § 144(a)(3) of the Code). 4. Sale of Property. The Issuer will not sell, encumber or otherwise
dispose of any property financed by the Bonds, except such parts or portions that may be disposed of because of normal wear, obsolescence or depreciation, priorto the final maturity
of the Bonds. XII. Arbitrage Rebate The Issuer will calculate or cause to be calculated the rebate amount with respect to the Bonds at least once every five years from the date hereof,
and on the date the last of the Bonds are redeemed, in accordance with § 1.148 of the Code. DATED this 15th day of September, 2011. KODIAK ISLAND BOROUGH By: 7f~ Jk KARLETON SHORT Finance
Director Page 9
Prepared by Morgan Stanley f BWR PROOF OF ARBITRAGE YIELD Alaska Municipal Bond Bank Authority 2011 Series Three General Obligation Bonds (Finance 6.021 Alaska Muni Bnd Bnk:2011) Date
03/01/2012 09/01/2012 03/01/2013 09/01/2013 03/01/2014 09/01/2014 03/01/2015 09/01/2015 03/01/2016 09/01/2016 03/01/2017 09/01/2017 03/01/2018 09/01/2018 03/01/2019 09/01/2019 03/01/2020
09/01/2020 03/01/2021 09/01/2021 03/01/2022 09/01/2022 03/01/2023 09/01/2023 03/01/2024 09/01/2024 03/01/2025 09/01/2025 03/01/2026 09/01/2026 03/01/2027 09/01/2027 03/01/2028 09/01/2028
03/01/2029 09/01/2029 03/01/2030 09/01/2030 03/01/2031 09/01/2031 03/01/2032 09/01/2032 03/01/2033 09/01/2033 03/01/2034 09/01/2034 03/01/2035 09/01/2035 03/01/2036 09/01/2036 Debt Service
2,124,866.09 2,289,450.00 1,837,775.00 3,797,775.00 1,798,575.00 8,123,575.00 1,640,450.00 8,510,450.00 1,503,050.00 8,788,050.00 1,320,925.00 8,155,925.00 1,150,050.00 8,330,050.00
970,550.00 8,450,550.00 820,950.00 7,985,950.00 641,825.00 25,691,825.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00
23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00
23,375.00 223,375.00 19,125.00 229,125.00 14,662.50 234,662.50 9,987.50 239,987.50 5,100.00 245,100.00 105,644,616.09 Total 2,124,866.09 2,289,450.00 1,837,775.00 3,797,775.00 1,798,575.00
8,123,575.00 1,640,450.00 8,510,450.00 1,503,050.00 8,788,050.00 1,320,925.00 8,155,925.00 1,150,050.00 8,330,050.00 970,550.00 8,450,550.00 820,950.00 7,985,950.00 641,825.00 25,691,825.00
23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00 23,375.00
23,375.00 23,375.00 223,375.00 19,125.00 229,125.00 14,662.50 234,662.50 9,987.50 239,987.50 5,100.00 245,100.00 105,644,616.09 Present Value to 09/15/2011 @2.3999603% 2,101,619.36 2,237,552.48
1,774,818.63 3,624,185.71 1,696,013.63 7,569,506.25 1,510,438.09 7,743,049.35 1,351,302.26 7,807,125.62 1,159,568.42 7,074,748.68 985,766.58 7,055,447.21 812,296.21 6,988,775.01 670,891.61
6,448,843.17 512,143.22 20,257,662.40 18,212.33 17,996.38 17,782.99 17,572.13 17,363.76 17,157.87 16,954.42 16,753.39 16,554.73 16,358.43 16,164.46 15,972.79 15,783.40 15,596.24 15,411.31
15,228.57 15,048.00 14,869.57 14,693.25 14,519.02 14,346.87 135,475.12 11,461.62 135,686.49 8,580.09 135,689.72 5,706.63 135,497.42 2,845.33 135,121.63 90,428,157.85 Proceeds Summary
Delivery date Par Value Premium (Discount) Target for yield calculation 23 09/15/2011 78,115,000.00 12,313,157.85 90,428,157.85 Exhibit A Morgan Stanley
Prepared by Morgan Stanley /BWR (Finance 6.021 Alaska Muni Bnd Bnk:2011) PROOF OF ARBITRAGE YIELD Alaska Municipal Bond Bank Authority 2011 Series Three General Obligation Bonds Assumed
Call/Computation Dates for Premium Bonds Present Value Bond Maturity Call Call to 09/15/2011 Component Date Rate Yield Date Price @2.3999603% SERIAL 09/01/2022 5.000% 2.940% 09/01/2021
100.000 459,087.79 SERIAL 09/01/2023 5.000% 3.180% 09/01/2021 100.000 415,665.54 SERIAL 09/01/2024 4.000% 3.340% 09/01/2021 100.000 42,751.58 SERIAL 09101/2025 4.000% 3.480% 09/01/2021
100.000 50,743.25 SERIAL 09/01/2026 4.000% 3.600% 09/01/2021 100.000 58,213.70 TERM 09/01/2027 5.000% 4.050% 09/01/2021 100.000 38,746.56 TERM 09/01/2028 5.000% 4.050% 09/01/2021 100.000
41,025.77 TERM 09/01/2029 5.000% 4.050% 09/01/2021 100.000 43,304.97 TERM 09/01/2030 5.000% 4.050% 09/01/2021 100.000 45,584.18 TERM 09/01/2031 5.000% 4.050% 09/01/2021 100.000 47,863.39
Rejected Call/Computation Dates for Premium Bonds Present Value Bond Maturity Call Call to 09/15/2011 Increase Component Date Rate Yield Date Price @2.3999603% to NPV SERIAL 09/01/2022
5.000% 2.940% 635,494.68 176,406.89 SERIAL 09/01/2023 5.000% 3.180% 636,759.04 221,093.50 SERIAL 09/01/2024 4.000% 3.340% 60,905.69 18,154.11 SERIAL 09/01/2025 4.000% 3.480% 75,622.58
24,879.33 SERIAL 09/01/2026 4.000% 3.600% 90,132.87 31,919.17 TERM 09/01/2027 5.000% 4.050% 67,797.55 29,050.99 TERM 09/01/2028 5.000% 4.050% 76,497.70 35,471.93 TERM 09/01/2029 5.000%
4.050% 85,604.15 42,299.18 TERM 09/01/2030 5.000% 4.050% 95,101.30 49,517.12 TERM 09/01/2031 5.000% 4.050% 104,974.06 57,110.67 24 Morgan Stanley
CERTIFICATE REGARDING COMPLIANCE WITH RULE 15c2-12 I, Karleton Short, the duly chosen, qualified Finance Director of the Kodiak Island Borough, Alaska (the "Borough"), acting in my official
capacity, DO HEREBY CERTIFY that to the best of my knowledge and belief, and except as disclosed in the Official Statement dated August 25, 2011, for the Alaska Municipal Bond Bank's
General Obligation and Refunding Bonds, 2011 Series Three, the Borough has complied with each continuing disclosure undertaking that the Borough has entered into under Rule 15c2-12 adopted
by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended from time to time. DATED as of this 15th day of September, 2011. KODIAK ISLAND BOROUGH,
ALASKA BY-----'1L--L...::.~~~iA-----'·_'_____ _ Karleton Short, Finance Director 1:\Docs\37421725\Cert Re Compl Rule 15c2 KIB.Docx
CERTIFICATE OF DELIVERY AND PAYMENT I, KARLETON SHORT, Finance Director of the Kodiak Island Borough, Alaska (the "Issuer"), HEREBY CERTIFY that: 1. On the date hereof, I caused to be
delivered to the Alaska Municipal Bond Bank (the "Purchaser") the Issuer's $3,275,000 Solid Waste Revenue Bonds, 2011 (the "Bonds"). 2. At or before the time of such delivery there was
received by the Issuer from the Purchaser $3,669,976.95 as full payment for the Bonds, consisting of $3,275,000 principal amount of the Bonds, plus net original issue premium of $408,164.20,
less $13,187.25 allocated to a portion of costs of issuance. $302,500 from other Borough sources was deposited with The Bank of NewYork Mellon Trust Company, N.A., to fund the Issuer's
Reserve Subaccount. IN WITNESS WHEREOF, I have executed this certificate this 15th day of September, 2011. KODIAK ISLAND BOROUGH, ALASKA KARLETON SHORT Finance Director RECEIPT OF PURCHASER
The undersigned hereby acknowledges receipt of the Issuer's $3,275,000 Solid Waste Revenue Bonds, 2011. DATED this 15th day of September, 2011. ALASKA MUNICIPAL BOND BANK
WOHLFORTH I BRECHT ICARTLEDGE IBROOKING A PROFESSIONAL CORPORATION Julius J. Brecht Cheryl Rawls Brooking Cynthia L. Cartledge Michael Gatti Clyde W. Hutchins Jr. Leila R. Kimbrell Eric
E. Wohlfarth ATTORNEYS AT LAW 900 WEST 5TH AVENUE, SUITE 600 ANCHORAGE, ALASKA 99501·2048 September 15,2011 TELEPHONE 907.276.6401 FACSIMILE 907.276.5093 WEBSITE WWW.AKATTY.COM Mayor
and Members Kodiak Island Borough Assembly Kodiak Island Borough 710 Mill Bay Road Kodiak, AK 99615 Alaska Municipal Bond Bank State Office Building, 11th Floor 333 Willoughby Juneau,
Alaska 99811 RE: Kodiak Island Borough $3,275,000 Solid Waste Revenue Bonds, 2011 Ladies and Gentlemen: We have acted as Bond Counsel in connection with the issuance by the Kodiak Island
Borough, Alaska (the "Issuer"), a second class municipal corporation of the State of Alaska, of its Solid Waste Revenue Bonds, 2011 (the "Bonds") in the aggregate principal amount of
$3,275,000. We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion. The Bonds are authorized by Resolution No. FY 2012-06
of the Issuer adopted August 4, 2011, (the "Resolution"), and pursuant to a Loan Agreement between the Issuer and the Alaska Municipal Bond Bank dated as of September 1, 2011 (the "Loan
Agreement"). The Bonds are registered in form, are dated September 15, 2011, mature on September 1, 2026 and bear interest semiannually from September 15, 2011, as shown on the Bonds.
Principal installments due on or after September 1, 2022 are subject to prepayment by the Issuer in whole or in part on any date on or after September 1, 2021 at a price of 100% of the
principal amount thereof to be prepaid plus interest accrued to the date of payment.
September 15, 2011 Page 2 of 3 As to questions of fact material to our opinion and in connection with the issuance of the Bonds, we have reviewed the Resolution and the Certificate as
to Arbitrage of the Issuer dated the date hereof (the "Tax Certificate"), an opinion of the Issuer Attorney, certificates of the Issuer 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 the date hereof.
We have not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. 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) by any parties other than the Issuer and the due and legal execution and delivery
thereof by any parties other than the Issuer. We have not undertaken to verify independently, and have assumed accuracy of the factual matters represented, warranted or certified in
the documents referred to in the preceding paragraph. Furthermore, we have assumed compliance with the covenants and agreements contained in the Resolution and the Tax Certificate, 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 income for federal income tax purposes. We call attention to the fact that the rights and obligations under the Bonds, the Resolution and the Tax Certificate may be subject
to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights generally and to the application of
equitable principles. Based upon the foregoing, we are of the opinion that, under existing law: The Issuer is duly created and validly exists as a municipal corporation in Alaska, with
the power to adopt the Resolution, which has been duly adopted by the Issuer and is valid and binding upon the Issuer and enforceable in accordance with its terms. The Bonds have been
duly authorized, executed, and issued in accordance with law, including the Resolution, and constitute valid, binding special obligations of the Issuer as provided in the Resolution,
payable and enforceable in accordance with the terms of the Bonds and the terms of the Resolution. The Loan Agreement has been duly authorized, executed and delivered by the Issuer and
is a valid and binding agreement of the Issuer enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or other laws affecting the enforcement of creditors' rights generally, general principals of equity, or the exercise of judicial discretion in appropriate cases.
September 15, 2011 Page 3 of 3 The interest on the Bonds is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of determining
the federal alternative minimum tax imposed on individuals and corporations. The opinions set forth in the preceding sentence are subject to the condition that the Issuer comply with
all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal
income tax purposes. The Issuer has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds
in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect
to the Bonds. The Bonds and the interest thereon are exempt from taxation by the State of Alaska except for transfer, estate and inheritance taxes and except to the extent that inclusion
of said interest in computing the federal corporate alternative minimum tax under Section 55 of the Code may affect the corresponding provisions of the State of Alaska corporate income
tax. Sincerely, WOHLFORTH, BRECHT, CARTLEDGE & BROOKING cP~/>~~ Cheryl A. Bp,ki,fg';/"'""0Y
Wohlfarth I Brecht I Cartledge IBrooking A PROFESSIONAL CORPORATION Julius J. Brecht Cheryl Rawls Brooking Cynthia L. Cartledge Michael Gatti Clyde W. Hutchins Jr. Leila R. Kimbrell
Eric E. Wohlforth ATTORNEYS AT LAW 900 WEST 5TH AVENUE, SUITE 600 ANCHORAGE, ALASKA 99501·2048 September 15, 2011 TELEPHONE 907.276.6401 FACSIMILE 907.276.5093 WEBSITE WWW.AKATTY.COM
Alaska Municipal Bond Bank State Office Building, 11th Floor 333 Willoughby Juneau, Alaska 99811 RE: Kodiak Island Borough $3,275,000 Solid Waste Revenue Bonds Ladies and Gentlemen:
I am the Borough Attorney for the Kodiak Island Borough (the "Borough"). This opinion is given in connection with the issuance and sale by the Borough of its $3,275,000 Solid Waste Revenue
Bonds (the "Bonds"). The Bonds are sold to the Alaska Municipal Bond Bank (the "Bank") pursuant to a loan agreement between the Bank and the Borough (the "Loan Agreement"). I am of the
opinion that: There is no litigation pending or threatened: A. affecting the corporate existence of the Borough, or the titles of officers to their respective offices, or seeking to
restrain or enjoin the issuance, sale or delivery of the Bonds, or the rights of the Borough to levy and collect taxes pledged to pay the principal of and interest on the Bonds, or pledge
thereof, or in any way contesting or affecting the validity or enforceability of the Bonds or the Loan Agreement between the Borough and the Bank, or contesting the power of the Borough
or its authority with respect to the Bonds; or B. against the Borough or involving any of the property or assets of or under the control of the Borough which, whether 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.
Alaska Municipal Bond Bank September 15, 2011 Page 2 Sincerely, WOHLFORTH, BRECHT, CARTLEDGE & BROOKING {l~~~ Cheryl A. ;ZOking ~------
WOHLFORTH BRECHT CARTLEDGE BROOKING Julius J. Brecht Cheryl Rawls Brooking Cynthia L. Cartledge Michael Gatti Clyde W. Hutchins Jr. Leila R. Kimbrell Eric E. Wohlforth ATTORNEYS AT LAW
900 WEST 5TH AVENUE, SUITE 600 ANCHORAGE, ALASKA 99501·2048 September 21, 2011 TELEPHONE 907.276.6401 FACSIMILE 907.276.5093 WEBSITE WWW.AKATTY.COM CERTIFIED MAIL: #7010 1060 0000 8954
7569 RETURN RECEIPT REQUESTED Internal Revenue Service Center Ogden, UT 84201 Re: Kodiak Island Borough Solid Waste Revenue Bond, 2011 Our File No. 4101.6001 Ladies and Gentlemen: Enclosed
please find Form 8038-G for filing in the above captioned matter. Sincerely, WOHLFORTH, BRECHT, CARTLEDGE & BROOKING tIl" (~O .0 /f J&r1/tMr /JvCAfAAr' Nancy Guiley, L4bal Assistant
V /ng Enclosure as stated 1:\Docs\41016001\Closing Documents Kodiak\L2 IRS Enclosing 8038.Docx
SENDER: COM1i!ff!llE THIS SECTION , COMPLETE THIS SECTION ON DELIVEfW D. Is delivery address different from Item 17 DYes If YES, enter delivery address below: 0 No B. Received by ( Printed
Name) IC. Date:fDeliVery • Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. • Print your name and address on the reverse so that we can return the
card to you. • Attach this card to the back of the mailpiece, or on the front if space permits. 1. Article Addressed to: A. Signature x o Agent o Addressee Internai Revenue Svc. Cntr.
Ogdb UT 84201 i 3. Service Type )(Certlfled Mail 0 ExpresS'Mail o Registered .)t RetulT'l Receipt for Merchandise o Insured Mall 0 C.O.D. .... 4. Restricted Delivery? (Ext!a Fee) DYes
PS Form 3811, February 2004 Domestic Return Receipt 102595-02·M·1540
Reporting Authority OMS No. 1545-0720 Form8038·G (Rev. May 2010) Department of the Treasury Internal Revenue Service Information Return for Tax-Exempt Governmental Obligations ~ Under
Internal Revenue Code section 149(e) ~ See separate instructions. Caution: Ifthe issue price is under $100,000, use Form 8038-GC. If Amended Return, check here ~ D 1 Issuer's name 2
Issuer's employer identification number (EIN) Kodiak Island Borough 92 0030845 3 Number and street (or P.O. box if mall is not delivered to street address) 710 Mill Bay Road 5 City,
town, or post office. state, and ZIP code Room/suite 4 Report number (For IRS Use Onlyj 6 Date of issue Kodiak, AK 99615 September 15,20'11 7 Name of issue Kodiak Island Borough Solid
Waste Revenue Bond, 2011 8 CUSIP number 9 Name and title of officer of the issuer or other person whom the IRS may call for more information 10 Telephone number of officer or other person
2() years years 2.39996 % (e) Yield 3,683,164 486-9320 22 years ( 907 ) (d) Weighted average maturity ((c) Stated redemption (b) Issue price price at maturity Description of Obligations.
Complete for the entire issue for which this form is being filed. Uses of Proceeds of Bond Issue (including underwriters' discount) September 1, 2026 $ 3,683,164.20 $ 3,275,000 8.7759
Proceeds used for accrued interest. Issue price of entire issue (enter amount from line 21, column (b)) Proceeds used for bond issuance costs (including underwriters' discount) r-=2:...:4=--3:....3:.
2,..:.1..:.64-+--=2cO:::_fS Proceeds used for credit enhancement r-=2:.:5=--+ __ Proceeds allocated to reasonably required reserve or replacement fund. r-=2:.:6=---+__ Proceeds used
to currently refund prior issues r-=2:..:7------+---riii Proceeds used to advance refund prior issues . '-=2:.:8=----'-_---1 Total (add lines 24 through 28) . f--""2.::.9-+-_-----'=3:..:3..'...,1:...
.:6:....4+-..::2-=...0 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) 30 3,650,000 Description of Refunded Bonds (Complete this part part only
for refunding bonds.) Karlelan Short, Finance Director Type of Issue (enter the issue price) See 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 iii'--'s:..:o-=I:..:id:-.w.:..::...=ac:::sct::e:=--_ 19 If obligations are TANs
or RANs, check only box 19a If obligations are BANs, check only box 19b 20 If obligations are in the form of a lease or installment sale, check box 22 23 24 25 26 27 28 29 30 31 Enter
the remaining weighted average maturity of the bonds to be currently refunded . ~ 32 Enter the remaining weighted average maturity of the bonds to be advance refunded . ~ 33 Enter the
last date on which the refunded bonds will be called (MM/DDIYYYY) . ~ 34 Enter the date(s) the refunded bonds were issued ~ (MM/DDIYYYY) For Privacy Act and Paperwork Reduction Act Notice,
see separate instructions. Cat. No. 63773S Form 8038-G (Rev. 5-2010)
Page 2 Enter the amount of the state volume cap allocated to the issue under section 141 (b)(5) . Enter the amount of gross proceeds invested or to be invested in a guaranteed investment
contract (GIG) (see instructions) . Enter the final maturity date of the GIC ~ Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units
. L..3"-7.:..a:::...L -L.-__ b If this issue is a loan made from the proceeds of another tax-exempt issue, check box ~ IZI and enter the name of the issuer ~ Alaska Municipal Bond Bank
and the date of the issue ~ September 15, 20"11 If the issuer has designated the issue under section 265(b)(3)(B)(i)(II1) (small issuer exception), check box ~ 0 If the issuer has elected
to pay a penalty in lieu of arbitrage rebate, check box ~ 0 If the issuer has identified a hedge, check box . ~ 0 35 36ab 37 Form 8038-G (Rev. 5-2010) Miscellaneous 38 39 40 ( 907 )
276-6401 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 further declare that I consent to the IRS's disclosure of the issuer's return information, as necessary to process this return, to the person that I have authorized
above. I ... 1i~ ,~ 1-f,r ~;( 0 II ~ Karieton Short, Finance Director I r 3J9;ature0fiSSU8r's authorized representative Date r Type or print name and title Signature and Consent ~ ;?/e
I Preparer's SSN or PTIN Paid Preparer's /signature _ P01506831 Preparer'sl-----''---+---:?q..,==--f,-L--''--(,.L--=-=-:",.,..,I-------'--!...f.!-:::.:p:.:.....:.......:.-...L.::::;~::::::!=-=~-----.
.::....::....:..::::..::..:::..::.::...:--'--Firm's name (or ~ Use Only yours if self-employed), address, and ZIP code Form 8038-G (Rev. 5-2010)