HomeMy Public PortalAboutOrd 417 CCUA Wtr/Sew Agreement
Gilmore & Bell, p, C.
10/22/2004
ORDINANCE NO. f 17
OF
THE CITY OF BEL AIRE, KANSAS
PASSED
NOVEMBER 2,2004
FffiST SUPPLEMENTAL WATER SUPPLY AND W ASTEW A TER
SERVICE AGREEMENT
CHISHOLM CREEK UTILITY AUTHORITY
KMC\403641 \BEL AIRE ORDINANCE
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
Section 101. Definitions ofW ords and Terms..,....................................................................,.. 2
ARTICLE II AUTHORIZATION OF THE FIRST SUPPLEMENTAL AGREEMENT
Section 201. Authorization ofthe First Supplemental Agreement....,....................,.................4
Section 202. Preliminary and Final Official Statement...............,....,....,......,......,........,......,.... 4
ARTICLE III ADDITIONAL INDEBTEDNESS
Section 301. Cure of Formal Omission in Section 803.,..........................................,............,.... 4
ARTICLE IV TAX COVENANTS
Section 401. General Covenants""""".""""""""""."""""""""""""""""""""""."""""""" 6
ARTICLE V CONTINUING DISCLOSURE REQUIREMENTS
Section 501. Disclosure Requirements "".".,'.'""""""".""".'"""""".""""..""""""""""""". 6
Section 502. Failure to Comply with Continuing Disclosure Requirements ........,.................., 6
ARTICLE VI PROVISIONS RELATING TO THE BOND INSURANCE POLICY
Section 601. Consent of Bond Insurer,."""""""",.""."."""""""""."".,."""."""""""""""", 7
Section 602. Notices".,."""""""",.,.,.""""",."".."""""""""""""."""""""""""""."."""""" 7
Section 603. Exercise of Rights by Bond Insurer"""""""",."."""""""""",...."""""""""",. 8
Section 604. Bond Insurance Provisions of Ordinance No. 365 ......,..........,...........,....,......,..,.. 8
ARTICLE VII MISCELLANEOUS PROVISIONS
Section 701. Inconsistent Provisions...........,..,...."..........,....,......,........,................,..........,..,..,.. 8
Section 702. Electronic Transactions"""""""""""""".""""""""""""""",.".""""""""""", 8
Section 703. Further Authority""".."""""""""""""",.,.,."""""""""""""""""".."".""""", 8
Section 704. Severability"""""""""""""""."""""""""""""""""",."""""""""""""""""", 8
Section 705. Governing Law""""""""""""""""""""""""""""""""""""""""",."""""""" 8
Section 706. Effective Date,....,............,...........,.......,....,..........",..,..........,....,....,..,....,....,....,.." 8
EXHIBIT A -FORM OF FIRST SUPPLEMENTAL WATER SUPPLY AND
WASTEWATER SERVI CE AGREEMENT.............. .......... .......... ....................................... A-l
KMC\403641 \BEL AIRE ORDINANCE
(PUBLISHED IN THE ARK V ALLEY NEWS ON
, 2004)
ORDINANCE NO. Jy/?
AN ORDINANCE SUPPLEMENTING ORDINANCE NO. 365 OF THE CITY;
AUTHORIZING THE EXECUTION OF A FIRST SUPPLEMENTAL WATER
SUPPLY AND WASTEWATER SERVICE AGREEMENT WITH CHISHOLM
CREEK UTILITY AUTHORITY; AND AUTHORIZING ALL OTHER
NECESSARY DOCUMENTS AND ACTIONS WITH RESPECT THERETO.
WHEREAS, the City of Bel Aire, Kansas (the "City") is a city of the second class, duly created,
organized and existing under the Constitution and laws of the State; and
WHEREAS, pursuant to an Interlocal Cooperation Agreement, certain Kansas municipalities,
including the City, have joined together under the provisions of KS,A. 12-2901 et seq. (the "Act"), to
organize and create the Chisholm Creek Utility Authority ("Authority"); and
WHEREAS, Authority has acquired, constructed, furnished and equipped a water treatment plant,
a wastewater treatment plant, and associated facilities (the "Project") for the purpose of providing an
economic means of long-term public water supply and wastewater collection and treatment for the mutual
benefit of Authority members participating in the Project (the "Contracting Members"); and
WHEREAS, the Authority financed the costs of the Project through the issuance of its Water and
Wastewater Facilities Revenue Bonds, Series 2002 (Cities of Bel Aire and Park City, Kansas Project), dated
as of the March 1,2002 (the "Series 2002 Bonds") which are secured in part by revenues generated, and an
assignment of the Authority's rights under, a Water Supply and Wastewater Service Agreement with the
City and a similar agreement with the other Contracting Member; and
WHEREAS, the Authority has found it to be desirable and in the best interest of the Authority to
refund in advance of maturity the Series 2002 Bonds scheduled to mature in the years 2013 to 2020,
inclusive (the "Refunded Bonds") and to accomplish such refunding through the issuance of the Authority's
"Water and Wastewater Facilities Refunding Revenue Bonds (Cities of Bel Aire and Park City Project),
Series 2004," in the aggregate principal amount of $7,235,000 (the "Series 2004 Bonds"); and
WHEREAS, in connection with the issuance of the Series 2004 Bonds, it is necessary and
advisable for the City to amend and supplement its Ordinance No, 365 and its Water Supply and
Wastewater Service Agreement with the Authority;
WHEREAS, Section 1401 of Ordinance No, 365 provides that, without notice to or the consent of
any other entity, the City may amend or supplement such Ordinance for the purpose of curing any formal
defect, omission, inconsistency or ambiguity herein, to grant to or confer any additional rights, remedies,
powers or authority that may lawfully be granted to or conferred, to conform this Ordinance to the Code or
future applicable federal law concerning tax-exempt obligations, or in connection with any other change
therein which is not materially adverse to the interests of the Authority;
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WHEREAS, the City hereby finds that this Ordinance will amend or supplement Ordinance No,
365 only to cure a formal defect, omission, inconsistency or ambiguity and to provide for the issuance of the
Series 2004 Bonds, which will provide debt service savings to the Authority and Agreement Obligation
savings to the City and, as such, this Ordinance is not materially adverse to the interests of the Authority,
NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY
OF BEL AIRE, KANSAS, AS FOLLOWS:
ARTICLE I
DEFINITIONS
Section 101. Definitions of Words and Terms, In addition to words and terms defined elsewhere
in Ordinance No, 365 and in the Agreement, as amended and supplemented, the following words and terms
as used in this Ordinance shall have the meanings hereinafter set forth, Unless the context shall otherwise
indicate, words importing the singular number shall include the plural and vice versa, and words importing
persons shall include firms, associations and corporations, including public bodies, as well as natural
persons,
"Additional Indebtedness Resolution" means Ordinance No, 365, this Ordinance and the
ordinances or resolutions under which any Additional Indebtedness is authorized,
"Agreement" means the Water Supply and Wastewater Service Agreement, as amended and
supplemented by the First Supplemental Agreement, and as further amended and supplemented from time
to time,
"Bond Insurance Policy" means (a) with respect to the Series 2002 Bonds, the financial
guaranty insurance policy issued by MBIA on the date of delivery of the Series 2002 Bonds insuring the
payment when due of the principal of and interest on the Series 2002 Bonds, as provided therein, and (b)
with respect to the Series 2004 Bonds, the municipal bond insurance policy issued by FSA concurrently
with the delivery of the Series 2004 Bonds guaranteeing the scheduled payment when due ofthe principal
of and interest on the Series 2004 Bonds,
"Bond Insurer" means (a) with respect to the Series 2002 Bonds, MBIA; and (b) with respect to
the Series 2004 Bonds, FSA.
"Bonds" means the Series 2002 Bonds, the Series 2004 Bonds and any additional bonds of the
Authority issued pursuant to the Indenture, secured in whole or in part by the Agreement,
"Disclosure Agreement" means, jointly, the Continuing Disclosure Agreements relating to the
Series 2002 Bonds and the Series 2004 Bonds and certain obligations contained in the SEC Rule,
"First Supplemental Agreement" means the First Supplemental Water Supply and Wastewater
Service Agreement between the City and the Authority, dated as of October 1,2004, which supplements
the Water Supply and Wastewater Service Agreement in connection with the issuance of the Series 2004
Bonds,
"FSA" means Financial Security Assurance Inc" a New York stock insurance company, or any
successor thereto or assignee thereof.
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"MBIA" means MBIA Insurance Corporation, Armonk, New York.
"Notice Address" means with respect to the following entities:
(a) To the City at:
City Hall
7651 E, Central Park Ave,
Bel Aire, Kansas 67220
(b) To the Authority:
Chisholm Creek Utility Authority
5551 N, Broadway
Bel Aire, Kansas 67219
(c) To the Bond Insurer:
Series 2002:
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Series 2004:
Financial Security Assurance Inc,
350 Park Avenue, New York, New York 10022-6022
(d) To the Trustee:
The Bank of New York Trust Company, N,A.
911 Washington Avenue
St. Louis, Missouri 63101
or such other address as is furnished in writing to the other parties referenced herein,
"Notice Representative" means:
(a)
(b)
(c)
Counsel.
With respect to the City, the Clerk.
With respect to the Authority, the Manager thereof.
With respect to the Bond Insurer, any Vice President, with a copy to its General
(d)
With respect to the Trustee and Escrow Agent, the senior Corporate Trust Officer.
"Purchaser" means (a) with respect to the Series 2002 Bonds, U.S, Bancorp Piper Jaffray,
Kansas City, Missouri, the original purchaser of the Series 2002 Bonds, and any successor and assigns;
and (b) with respect to the Series 2004 Bonds, Piper Jaffray & Co" Leawood, Kansas, the original
purchaser of the Series 2004 Bonds, and any successor and assign
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"Series 2002 Bonds" means the Authority's Water and Wastewater Facilities Revenue Bonds,
Series 2002 (Cities of Bel Aire and Park City, Kansas Project), dated as of March 1,2002,
"Series 2004 Bonds" means the Authority's Water and Wastewater Facilities Refunding Revenue
Bonds, Series 2004 (Cities of Bel Aire and Park City, Kansas Project), dated as of October 1,2004,
"Trustee" means the trustee designated in the Indenture, which is as of the date of the Series 2004
Bonds, The Bank of New York Trust Company, N,A., St, Louis, Missouri,
"Water Supply and Wastewater Service Agreement" means the Water Supply and Wastewater
Service Agreement between the City and the Authority, dated as of March 1,2002,
ARTICLE II
AUTHORIZATION OF THE FIRST SUPPLEMENTAL AGREEMENT
Section 201. Authorization of the First Supplemental Agreement, The First Supplemental
Agreement is authorized and the Mayor and the Clerk are authorized and directed to execute the First
Supplemental Agreement on behalf of the City in substantially the form presented to the governing body
this date, with such changes as may be approved by the Mayor and City Attorney,
Section 202. Preliminary and Final Official Statement. The portions of the Preliminary
Official Statement relating to the Series 2004 Bonds which set forth City information, including
Appendix A-2 thereto, dated September 29, 2004, are hereby ratified and approved,
The portions of the final Official Statement relating to the Series 2004 Bonds which set forth City
information, including Appendix A-2 thereto, are hereby authorized to be prepared by supplementing,
amending and completing the Preliminary Official Statement, with such changes and additions thereto as are
necessary to conform to and describe the transaction, The use and public distribution of the portions of the
final Official Statement setting forth City information, including Appendix A-2 thereto, by the Purchaser
in connection with the reoffering of the Series 2004 Bonds is hereby authorized, The proper officials of the
City are hereby authorized to execute and deliver a certificate pertaining to such Official Statement, dated as
of the date of payment for and delivery of the Series 2004 Bonds,
ARTICLE III
ADDITIONAL INDEBTEDNESS
Section 301. Cure of Formal Omission in Section 803. While Section 803 of Ordinance No,
365 expressly contemplates that the City may, under certain conditions, incur increases in the Base Charge
or other Agreement Obligations, including increases resulting from the issuance of Bonds, which Additional
Agreement Obligations incurred under such conditions shall stand on a parity with existing Agreement
Obligations and shall enjoy complete equality or lien on and claim against the Revenues of the System,
Section 803 does not expressly address the issuance of refunding Bonds, which may decrease the Base
Charge or other Agreement Obligations, To cure such formal omission, Section 803 is hereby amended to
read as follows:
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Section 803. Additional Agreement Obligations. Nothing in this Article shall
prohibit or restrict the right of the City to permit the amendment of the Agreement to
provide for increases in the Base Charge or other Agreement Obligations, including those
increases resulting from the issuance of Bonds (other than the Series 2002 Bonds) by the
Authority for any lawful purpose in connection with the operation of and benefiting the
System and to provide that such additional Agreement Obligations shall be payable out of
the Revenues of the System,
Prior to incurring any additional or increased Agreement Obligations, the City
shall deliver a certificate signed by the City evidencing either of the following:
(i) The Coverage Ratio for the Fiscal Year immediately preceding the
incurrence of such additional Agreement Obligations, as reflected by information provided
by the Independent Accountant, shall be not less than 1.25, including the additional
Agreement Obligations proposed to be secured, In the event that the City has instituted any
increase in rates for the use and services of the System and such increase shall not have
been in effect during the full Fiscal Year immediately preceding the issuance of such
proposed additional Agreement Obligations, the additional Net Operating Revenues which
would have resulted from the operation of the System during said preceding Fiscal Year
had such rate increase been in effect for the entire period may be added to the stated Net
Operating Revenues for the calculation of the Coverage Ratio, provided that such estimated
additional Net Operating Revenues shall be determined by a Consultant.
(ii) The estimated Coverage Ratio (as determined by a Consultant), for the
Fiscal Year immediately following the Fiscal Year in which the additional Agreement
Obligations is to be incurred, shall be not less than 1,25 including the additional Agreement
Obligations proposed to be incurred, In the event that the City anticipates additional
Revenues as a result of expansion or modification of the System by such additional
Agreement Obligations, the City may adjust the estimated Net Revenues in determining the
Coverage Ratio, by adding thereto any estimated increase in Net Revenues that will result,
or would have resulted, in the opinion of the Consultant, are reasonable,
Additional Agreement Obligations incurred under the conditions set forth in this
Section shall stand on a parity with existing Agreement Obligations and shall enjoy
complete equality or lien on and claim against the Revenues of the System, and the City
shall make equal provision for paying such additional Agreement Obligations out of the
Revenue Fund and may likewise provide for the creation of reasonable reserve accounts for
the payment of such additional Agreement Obligations out of moneys in the Revenue Fund,
Notwithstanding the foregoing restrictions, the City shall have the right, without
complying with the foregoing provisions, to amend or alter its Agreement Obligations in
connection with the issuance of Bonds for the purpose of refunding and refinancing other
Bonds, and amended or altered Agreement Obligations shall enjoy complete equality or
lien on and claim against the Revenues of the System as did the Agreement Obligations that
correspond to the Bonds being refunded or refinanced; provided, however, that if only a
portion of any series of Bonds is refunded and if said portion of Bonds is refunded in such
manner that the refunding Bonds bear a higher average rate of interest or become due on a
date earlier than that of the portion of Bonds which is refunded, then the Agreement
Obligations may be altered or amended without complying with the foregoing provisions
with complete equality of pledge only by and with the written consent of the Bond Insurer
of the portion of Bonds that is not refunded, or, if there is no such Bond Insurer, the owners
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of a majority in principal amount of the portion of Bonds that is not refunded,
ARTICLE IV
TAX COVENANTS
Section 401. General Covenants.
(a) The City covenants and agrees that (1) it will comply with all applicable provisions of the
Code, including Code ~~ 103 and 141 through 150, necessary to maintain the exclusion from gross income
for federal income tax purposes of the interest on the Series 2004 Bonds and (2) it will not use or permit the
use of any proceeds of the Series 2004 Bonds or any other funds of the City, will not take or permit any
other action, or fail to take any action, if any such action or failure to take action would adversely affect the
exclusion from gross income of the interest on the Series 2004 Bonds, The City will, in addition, adopt such
other ordinances or resolutions and take such other actions as may be necessary to comply with the Code
and with all other applicable future laws, regulations, published rulings and judicial decisions, in order to
ensure that the interest on the Series 2004 Bonds will remain excluded from federal gross income, to the
extent any such actions can be taken by the City,
(b) The City covenants and agrees that (1) it will use any proceeds of the Series 2004 Bonds as
soon as practicable and with all reasonable dispatch for the purposes for which such proceeds are intended,
and (2) it will not invest or directly or indirectly use or permit the use of any proceeds of the Series 2004
Bonds or any other funds of the City in any manner, or take or omit to take any action, that would cause the
Series 2004 Bonds to be "arbitrage bonds" within the meaning of Code ~ I 48(a),
( c) The City covenants and agrees that it will not use any portion of the proceeds of the Series
2004 Bonds, including any investment income earned on such proceeds, directly or indirectly, in a manner
that would cause any Series 2004 Bond to be a "private activity bond" within the meaning of Code ~ 141(a),
or to make or finance a loan to any Person other than the State or a political subdivision thereof.
ARTICLE V
CONTINUING DISCLOSURE REQUIREMENTS
Section 501. Disclosure Requirements. The City hereby covenants with the Purchaser and the
Beneficial Owners to provide and disseminate such information as is required by the SEC Rule and as
further set forth in the Disclosure Agreement for the Series 2004 Bonds, which are incorporated herein by
reference, Such covenant shall be for the benefit of and enforceable by the Authority and the Beneficial
Owners,
Section 502. Failure to Comply with Continuing Disclosure Requirements. In the event the
City fails to comply in a timely manner with its covenants contained in the preceding section, the Authority
and/or any Beneficial Owner may make demand for such compliance by written notice to the City, In the
event the City does not remedy such noncompliance within 10 days of receipt of such written notice, the
Authority or any Beneficial Owner may in its discretion, without notice or demand, proceed to enforce
compliance by a suit or suits in equity for the specific performance of such covenant or agreement contained
in the preceding section or for the enforcement of any other appropriate legal or equitable remedy, as the
KMC\403641\BEL AIRE ORDINANCE
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Authority and/or any Beneficial Owner shall deem effectual to protect and enforce any of the duties of the
City under such preceding section, The Authority or Beneficial Owner shall provide a copy of any such
demand or notice to the Bond Insurer,
ARTICLE VI
PROVISIONS RELATING TO THE BOND INSURANCE POLICY
Section 601. Consent of Bond Insurer. Any provision of this Ordinance expressly recognizing
or granting rights in or to the Bond Insurer may not be amended in any manner which affects the rights of
the Bond Insurer hereunder without the prior written consent of the Bond Insurer,
The Bond Insurer's consent shall be required in addition to Authority consent, when required, for
the execution and delivery of any supplemental Ordinance, or any amendment, supplement or change to or
modification of other documents relating to the security for the Agreement Obligations,
Section 602. Notices.
(a) While the Bond Insurance Policy is in effect, the City shall furnish to the Bond Insurer:
(I) As soon as practicable after the filing thereof, a copy of any financial
statement of the City and a copy of any audit and annual report of the City;
(2) A copy of any notice to be given to the Authority, including, without
limitation, notice of defeasance of the Agreement Obligations; and
(3) Such additional information it may reasonably request.
(b) The City shall notify the Bond Insurer of any failure of the City to provide relevant
notices, certificates, etc,
(c) Notwithstanding any other provision of this Ordinance, the City shall immediately notify
the Bond Insurer if at any time there are insufficient moneys to make any payments of Agreement
Obligations and immediately upon the occurrence of any Event of Default hereunder,
(d) The City agrees, and hereby directs the Authority or Trustee, to notify the Bond Insurer of
any Event of Default of which any such party has actual knowledge, such notification to be made
within five Business Days of such actual knowledge,
(e) The City shall notify the Bond Insurer of the commencement of any proceeding by or
against the City commenced under the United States Bankruptcy Code or any other applicable
bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding");
(f) Copies of any supplement, modification or amendment to this Ordinance or the
Agreement shall be sent to Standard & Poor's and Moody's at least 10 days prior to the effective
date thereof.
KMC\40364I\BELAlRE ORDINANCE
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(g) All notices required to be given to the Bond Insurer under this Ordinance shall be in
writing and shall be sent by registered or certified mail addressed to the Notice Address,
Section 603. Exercise of Rights by Bond Insurer, The rights granted to the Bond Insurer
under this Ordinance or the Agreement to request, consent to or direct any action are rights granted to the
Bond Insurer in consideration of its issuance of the Bond Insurance Policy, Any exercise by the Bond
Insurer of such rights is merely an exercise of the Bond Insurer's contractual rights and shall not be
construed or deemed to be taken for the benefit or on behalf of the Bond holders nor does such action
evidence any position of the Bond Insurer, positive or negative, as to whether a Bond holder consent is
required in addition to consent of the Bond Insurer.
Section 604. Bond Insurance Provisions of Ordinance No. 365, In addition to the provisions
of Sections 601 and 602 and all other provisions of this Ordinance that relate to the Bond Insurance Policy
or the Bond Insurer, all provisions of Ordinance No, 365 which relate to the Bond Insurance Policy or the
Bond Insurer are made expressly applicable to the Bond Insurer for the Series 2004 Bonds,
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 701. Inconsistent Provisions. Except with respect to Section 301 hereof, the provisions
of which shall apply from the Dated Date set forth in Ordinance No, 365 and shall expressly apply in
connection with the First Supplemental Agreement and the Series 2004 Bonds, in case anyone or more of
the provisions of this Ordinance shall for any reason be inconsistent with the provisions of Ordinance No,
365 or any ordinance or resolution authorizing any Additional Indebtedness: (a) the provisions of
Ordinance No, 365 shall prevail with respect to Agreement Obligations incurred prior in time to this
Ordinance, so long as such Agreement Obligations are Outstanding; and (b) the provisions of this Ordinance
shall prevail with respect to any Additional Indebtedness incurred subsequent to this Ordinance, so long as
any Agreement Obligations are Outstanding,
Section 702. Electronic Transactions. The transactions contemplated by this Ordinance may
be conducted, and documents may be stored, by electronic means,
Section 703. Further Authority. The officers and officials of the City, including the Mayor and
Clerk, are hereby authorized and directed to execute all documents and take such actions as they may deem
necessary or advisable in order to carry out and perform the purposes of this Ordinance and to make
ministerial alterations, changes or additions in the foregoing agreements, statements, instruments and other
documents herein approved, authorized and confirmed which they may approve, and the execution or taking
of such action shall be conclusive evidence of such necessity or advisability,
Section 704. Severability. If any section or other part of this Ordinance, whether large or small,
is for any reason held invalid, the invalidity thereof shall not affect the validity of the other provisions of this
Ordinance,
Section 705. Governing Law. This Ordinance shall be governed exclusively by and construed
in accordance with the applicable laws of the State,
Section 706. Effective Date. This Ordinance shall take effect and be in full force from and after
its passage by the governing body of the City,
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P e~ the governing body of the City on November 2, 2004, and APPROVED AND
SI G' ay:{6
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Clerk
CERTIFICATE
I, the undersigned, hereby certify that the above and foregoing is a true and correct copy of the
Ordinance No, iJ/7 (the "Ordinance") of The City of Bel Aire, Kansas, passed by the governing body on
November 2, 2004 as the same appears of record in my office, and that this Ordinance has not been
modified, amended or repealed and is in full force and effect as of this date,
DATED: November 2,2004,
~/~
Clerk
KMC\40364I\BELAIRE ORDINANCE
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