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Home My Public Portal AboutORD16052BILL NO. 2020-003 SPONSORED BY Councilmember HensleV ORDINANCE NO /CoDcj2 AN ORDINANCE AUTHORIZING THE ISSUANCE OF SEWERAGE SYSTEM REFUNDING REVENUE BONDS SERIES 2020, IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $6,300,000, PRESCRIBING THE FORM AND DETAILS OF SAID BONDS AND THE COVENANTS AND AGREEMENTS TO PROVIDE FOR THE PAYMENT AND SECURITY THEREOF; AND AUTHORIZING CERTAIN ACTIONS AND DOCUMENTS AND PRESCRIBING OTHER MATTERS RELATING THERETO. WHEREAS, the City of Jefferson, Missouri (the "City"), a home rule charter city and political subdivision duly organized and existing under the laws of the State of Missouri, and pursuant to Article VI, Section 27 of the Missouri Constitution and Chapter 250 of the Revised Statutes of Missouri, as amended (the "Act"), now owns and operates a revenue producing sewerage system serving the City and its inhabitants and others within its service area (the "System," as hereinafter more fully defined); and WHEREAS, the City has no bonds or other obligations outstanding payable from the Net Revenues (as hereinafter more fully defined) of the System save and except the following: Amount Amount Series of Bonds Dated Issued Outstanding Sewerage System Refunding and Improvement Revenue Bonds (State Revolving Fund Program), Series 2001 B 11/01/2001 $24,875,000 $3,740,000 Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2005A 5/19/2005 $4,600,000 $1,575,000 Sewerage System Refunding and Improvement Revenue Bonds (State Revolving Fund Program), Series 2005B 11/01/2005 $10,105,000 $4,025,000 Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2008 10/30/2008 $3,900,000 $2,310,000 Taxable Sewerage System Revenue Bonds, Series 2010B (Build America Bonds — Direct Payment) 8/05/2010 $6,445,000 $6,015,000 Sewerage System Revenue Bonds (State of Missouri — Direct Loan Program), Series 2012 11/13/2012 $15,000,000 Sewerage System Revenue Bonds, Series 2014 5/15/2014 $9,940,000 Sewerage System Revenue Bonds, Series 2016 6/20/2016 $9,380,000 $10,723,000 $8,225,000 $9,380,000 WHEREAS, the Series 2010B Bonds in the principal amount of $5,790,000 scheduled to mature on September 1 in the years 2025 and thereafter are herein referred to as the "Refunded Bonds," which Refunded Bonds will be defeased as a result of the refunding herein authorized; and WHEREAS, the City desires to refund the Refunded Bonds and is authorized under the provisions of Section 108.140(2), RSMo (the "Refunding Bond Law"), to issue and sell refunding revenue bonds for the purpose of refunding the Refunded Bonds, which refunding revenue bonds may be payable from the same sources as were pledged to the payment of the Refunded Bonds; and WHEREAS, the Refunding Bond Law authorizes the issuance of refunding revenue bonds in an amount not to exceed the principal amount of the bonds to be refunded, the interest accruing to the maturity or redemption date of the refunded bonds, any premium which may be due under the terms of the refunded bonds and any amounts necessary for the payment of issuance expenses for such refunding revenue bonds and to fund a debt service reserve fund therefor (the "Maximum Allowable Refunding Amount"), which Maximum Allowable Refunding Amount is shown in the Certificate of Final Terms, the form of which is attached hereto as Exhibit C; and WHEREAS, it is hereby found and determined that it is necessary and advisable and in the best interest of the City and its inhabitants that revenue bonds be issued and secured in the form and manner as hereinafter provided to provide funds for refunding the Refunded Bonds; NOW, THEREFORE, BE IT ENACTED BY THE COUNCIL OF THE CITY OF JEFFERSON, MISSOURI, AS FOLLOWS: ARTICLE I DEFINITIONS Section 101. Definitions of Words and Terms. In addition to words and terms defined elsewhere herein, the following capitalized words and terms as used in this Ordinance shall have the following meanings: "Accountant" means an independent certified public accountant or firm of certified public accountants. "Act" means Article VI, Section 27 of the Missouri Constitution and Chapter 250 of the Revised Statutes of Missouri, as amended. "Authority" means the State Environmental Improvement and Energy Resources Authority, a governmental instrumentality of the State of Missouri. "Authority Program Bonds" means any bonds of the Authority heretofore or hereafter issued under the SRF Program, all or a portion of the proceeds of which are loaned to the City with respect to the System and pursuant to the SRF Program. "Average Annual Debt Service" means the average of the Debt Service Requirements as computed for the then current and all future fiscal years. -2- "Bond Counsel" means Gilmore & Bell, P.C., Kansas City, Missouri, or any other attorney or firm of attorneys with a nationally recognized standing in the field of municipal bond financing selected by the City. "Bond Payment Date" means any date on which principal of or interest on any Bond is payable at the Maturity thereof or on any Interest Payment Date. "Bond Register" means the books for the registration, transfer and exchange of Bonds kept at the office of the Paying Agent. "Bondowner," "Owner" or "Registered Owner" when used with respect to any Bond means the Person in whose name such Bond is registered on the Bond Register. "Bonds" means the Sewerage System Refunding Revenue Bonds, Series 2020, of the City, authorized and issued pursuant to this Ordinance. "Business Day" means a day, other than a Saturday, Sunday or holiday, on which the Paying Agent is scheduled in the normal course of its operations to be open to the public for conduct of its banking operations. "Cede & Co." means Cede & Co., as nominee name of The Depository Trust Company, New York, New York, and any successor nominee with respect to the Bonds. "Certificate of Final Terms" means the Certificate of Final Terms, the form of which is attached to this Ordinance as Exhibit C. "City" means the City of Jefferson, Missouri, and any successors or assigns. "Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations of the Treasury Department proposed or promulgated thereunder. "Consultant" means a registered municipal advisor, an Accountant, or an independent engineer or engineering firm with experience in designing and constructing wastewater treatment, sanitary sewerage, water pollution control facilities, selected by the City for the purpose of carrying out the duties imposed on the Consultant by this Ordinance. "Continuing Disclosure Undertaking" means the Continuing Disclosure Undertaking dated the date set forth therein, the form of which is attached to this Ordinance as Exhibit B. "Dated Date" means the date of initial delivery and payment for the Bonds specified in the Certificate of Final Terms. "Debt Service Account" means the Series 2020 Debt Service Account in the Debt Service Fund created by Section 501 hereof. "Debt Service Requirements" means the aggregate principal payments (whether at maturity or pursuant to scheduled mandatory sinking fund redemption requirements) and net interest or interest -like payments (after taking into account any applicable Subsidy Payments) on all System Revenue Bonds for the period of time for which calculated; provided, however, that for purposes of calculating such amount, principal and interest shall be excluded from the determination of Debt Service Requirements to the extent that such principal or interest is payable from amounts deposited in trust, escrowed or otherwise set -3- aside for the payment thereof with the Paying Agent or other commercial bank or trust company located in the State of Missouri and having full trust powers. "Defaulted Interest" means interest on any Bond which is payable but not paid on any Interest Payment Date. "Defeasance Obligations" means any of the following obligations: (a) United States Government Obligations that are not subject to redemption in advance of their maturity dates; or (b) obligations of any state or political subdivision of any state, the interest on which is excluded from gross income for federal income tax purposes and which meet the following conditions: (1) the obligations are (i) not subject to redemption prior to maturity or (ii) the trustee for such obligations has been given irrevocable instructions concerning their calling and redemption and the issuer of such obligations has covenanted not to redeem such obligations other than as set forth in such instructions; (2) the obligations are secured by cash or United States Government Obligations that may be applied only to principal of, premium, if any, and interest payments on such obligations; (3) such cash and the principal of and interest on such United States Government Obligations (plus any cash in the escrow fund) are sufficient to meet the liabilities of the obligations; (4) such cash and United States Government Obligations serving as security for the obligations are held in an escrow fund by an escrow agent or a trustee irrevocably in trust; (5) such cash and United States Government Obligations are not available to satisfy any other claims, including those against the trustee or escrow agent; and (6) the obligations are rated in a rating category by Moody's or Standard & Poor's Ratings Group that is no lower than the rating category then assigned by that rating agency to United States Government Obligations. "Depreciation and Replacement Account" means the account by that name ratified and confirmed by Section 501 hereof. "Depreciation and Replacement Accumulation Requirement" means $500,000, which includes amounts required to be accumulated in the Depreciation and Replacement Account pursuant to the ordinances of the City authorizing all other outstanding issues of System Revenue Bonds, as such amounts may be decreased upon redemption or maturity of each series of System Revenue Bonds. "Expenses" means all reasonable and necessary expenses of operation, maintenance and repair of the System and keeping the System in good repair and working order (other than interest paid on System Revenue Bonds and depreciation and amortization charges during the period of determination), determined in accordance with generally accepted accounting principles, including without limiting the me generality of the foregoing, current maintenance charges, expenses of reasonable upkeep and repairs, salaries, wages, costs of materials and supplies, Paying Agent fees and expenses, annual audits, periodic Consultant's reports, properly allocated share of charges for insurance, the cost of purchased water, gas and power, if any, obligations (other than for borrowed money or for rents payable under capital leases) incurred in the ordinary course of business, liabilities incurred by endorsement for collection or deposit of checks or drafts received in the ordinary course of business, short-term indebtedness incurred and payable within a particular fiscal year, other obligations or indebtedness incurred for the purpose of leasing (pursuant to a true or operating lease) equipment, fixtures, inventory or other personal property, and all other expenses incident to the operation of the System, but shall exclude all general administrative expenses of the City not related to the operation of the System. "FAST Agent" means the Paying Agent when acting as agent for DTC in accordance with rules established by DTC for Fast Automated Securities Transfers. "Federal Tax Certificate" means the Federal Tax Certificate dated as of date of issuance and delivery of the Bonds, delivered by the City for the Bonds, which sets forth certain facts, covenants, representations, and expectations relating to the use of Bond proceeds and the use of property financed or refinanced with those proceeds, and the investment of the Bond proceeds and certain other related money in order to comply with the requirements of Code imposed on the Bonds. "Interest Payment Date" means the Stated Maturity of an installment of interest on any Bond. "Maturity" when used with respect to any Bond means the date on which the principal of such Bond becomes due and payable as therein and herein provided, whether at the Stated Maturity thereof or by call for redemption or otherwise. "Net Revenues" means all Revenues less all Expenses. "Notice of Bond Sale" means the Notice of Bond Sale relating to the public offering for sale of the Bonds, the form of which is attached to this Ordinance as Exhibit D. "Operation and Maintenance Account" means the account by that name ratified and confirmed by Section 501 hereof. "Ordinance" means this Ordinance as from time to time amended in accordance with the terms hereof. "Original Principal Amount" means the Original Principal Amount of the Bonds specified in the Certificate of Final Terms. "Outstanding," when used with reference to Bonds, means, as of any particular date of determination, all Bonds theretofore issued and delivered hereunder, except the following Bonds: (a) Bonds theretofore cancelled by the Paying Agent or delivered to the Paying Agent for cancellation; (b) Bonds deemed to be paid in accordance with the provisions of Section 1101 hereof, and (c) Bonds in exchange for or in lieu of which other Bonds have been registered and delivered hereunder. -5- "Parity Bonds" means the Previously Issued Parity Bonds and any additional bonds or other obligations hereafter issued or incurred pursuant to Section 902 hereof and standing on a parity and equality with the Bonds with respect to the payment of principal and interest from the Net Revenues of the System. "Parity Ordinances" means the Previously Issued Parity Ordinances and the ordinance or ordinances under which any additional Parity Bonds are hereafter issued pursuant to Section 902 hereof. "Participants" means those financial institutions for whom the Securities Depository effects book -entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. "Paying Agent" means UMB Bank, N.A., St. Louis, Missouri, and any successors and assigns. "Paying Agent Agreement" means the Paying Agent Agreement between the City and the Paying Agent in substantially the form attached hereto as Exhibit E. "Permitted Investments" means any of the following securities and obligations, if and to the extent the same are at the time legal for investment of the moneys held in the funds and accounts listed in Section 501 hereof: (a) United States Government Obligations; (b) certificates of deposit or time deposits, whether negotiable or nonnegotiable, issued by any bank or trust company organized under the laws of the United States or any state, provided that such certificates of deposit or time deposits shall be either (1) continuously and fully insured by the Federal Deposit Insurance Corporation, or (2) continuously and fully secured by United States Government Obligations which shall have a market value, exclusive of accrued interest, at all times at least equal to the principal amount of such certificates of deposit or time deposits; and (c) any other securities or investments that are lawful for the investment of moneys held in such funds or accounts under the laws of the State of Missouri. "Person" means any natural person, corporation, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof or other public body. "Previously Issued Parity Bonds" means, collectively, the Series 2001B Bonds, the Series 2005A Bonds, the Series 2005B Bonds, the Series 2008 Bonds, the portion of the Series 2010B Bonds scheduled to mature on September 1, 2020, oustanding in the aggregate principal amount of $225,000, the Series 2012 Bonds, the Series 2014 Bonds and the Series 2016 Bonds. "Previously Issued Parity Ordinances" means, collectively, the Series 2001B Ordinance, the Series 2005A Ordinance, the Series 2005B Ordinance, the Series 2008 Ordinance, the Series 2010 Ordinance, the Series 2012 Ordinance, the Series 2014 Ordinance and the Series 2016 Ordinance. "Purchase Price" means the purchase price of the Bonds specified in the Certificate of Final Terms. "Purchaser" means the purchaser of the Bonds specified in the Certificate of Final Terms. "Rebate Fund" means the fund by that name referred to in Section 501 hereof. "Record Date" for the interest payable on any Interest Payment Date means the 15th day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date. "Redemption Date" when used with respect to any Bond to be redeemed means the date fixed for such redemption pursuant to the terms of this Ordinance. "Redemption Price" when used with respect to any Bond to be redeemed means the price at which such Bond is to be redeemed pursuant to the terms of this Ordinance, including the applicable redemption premium, if any, but excluding installments of interest whose Stated Maturity is on or before the Redemption Date. "Refunded Bonds" means the portion of the Series 2010B Bonds maturing on September 1, 2025, and thereafter outstanding in the aggregate principal amount of $5,790,000 described in the preamble to this Ordinance. "Refunding Bond Law" means Section 108.140(2), of the Revised Statutes of Missouri, as amended. "Revenue Fund" means the fund by that name ratified and confirmed by Section 501 hereof. "Revenues" means all income and revenues derived from the ownership and operation of the System, including investment and rental income, net proceeds from business interruption insurance, sales tax revenues which have been annually appropriated by the City or which are limited solely to the payment of improvements to or expenses of the System, and any amounts deposited in escrow in connection with the acquisition, construction, remodeling, renovation and equipping of System facilities to be applied during the period of determination to pay interest on System Revenue Bonds, but excluding any profits or losses on the early extinguishment of debt or on the sale or other disposition, not in the ordinary course of business, of investments or fixed or capital assets. "Securities Depository" means, initially, The Depository Trust Company, New York, New York, and its successors and assigns. "Series 2001B Bonds" means the Sewerage System Refunding and Improvement Revenue Bonds, Series 2001B, of the City, in the original aggregate principal amount of $24,875,000, authorized and issued pursuant to the Series 2001B Ordinance. "Series 2001B Ordinance" means Ordinance No. 13295 of the City passed on October 31, 2001, under which the Series 2001B Bonds were issued. "Series 2005A Bonds" means the Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2005A, of the City, in the original aggregate principal amount of $4,600,000, authorized and issued pursuant to the Series 2005A Ordinance. "Series 2005A Ordinance" means Ordinance No. 13878 of the City passed on May 4, 2005, under which the Series 2005A Bonds were issued. -7- "Series 2005B Bonds" means the Sewerage System Refunding and Improvement Revenue Bonds (State Revolving Fund Program), Series 2005B, of the City, in the original aggregate principal amount of $10,105,000, authorized and issued pursuant to the Series 2005B Ordinance. "Series 2005B Ordinance" means Ordinance No. 13961 of the City passed on October 17, 2005, under which the Series 2005B Bonds were issued. "Series 2008 Bonds" means the Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2008, of the City, in the original aggregate principal amount of $3,900,000, authorized and issued pursuant to the Series 2008 Ordinance. "Series 2008 Ordinance" means Substitute Bill 2008-64 for Ordinance No. 14411 of the City passed on October 6, 2008, under which the Series 2008 Bonds were issued. "Series 2010B Bonds" means the Taxable Sewerage System Revenue Bonds, Series 2010B (Build America Bonds — Direct Payment), of the City, in the original aggregate principal amount of $6,445,000, authorized and issued pursuant to the Series 2010 Ordinance. "Series 2010 Ordinance" means Ordinance No. 14698 of the City passed on July 19, 2010, under which the Sewerage System Revenue Bonds, Series 2010A (which are no longer outstanding), and the Series 2010B Bonds were issued. "Series 2012 Bonds" means the Sewerage System Revenue Bonds (State of Missouri — Direct Loan Program), Series 2012, of the City, in the original aggregate principal amount of $15,000,000, authorized and issued pursuant to the Series 2012 Ordinance. "Series 2012 Ordinance" means Ordinance No. 15039 of the City passed on November 5, 2012, under which the Series 2012 Bonds were issued. "Series 2014 Bonds" means the Sewerage System Revenue Bonds, Series 2014, of the City, in the original aggregate principal amount of $9,940,000, authorized and issued pursuant to the Series 2014 Ordinance. "Series 2014 Ordinance" means Ordinance No. 15256 of the City passed on May 5, 2014, under which the Series 2014 Bonds were issued. "Series 2016 Bonds" means the Sewerage System Revenue Bonds, Series 2016, of the City, in the original aggregate principal amount of $9,380,000, authorized and issued pursuant to the Series 2016 Ordinance. "Series 2016 Ordinance" means Ordinance No. 15536 of the City passed on June 6, 2015, under which the Series 2016 Bonds were issued. "Special Record Date" means the date fixed by the Paying Agent pursuant to Section 204 hereof for the payment of Defaulted Interest. "SRF Program" means the Missouri Leveraged State Water Pollution Control Revolving Fund Program of the DNR and the Authority. "SRF Program Bonds" means any System Revenue Bonds heretofore or hereafter issued in connection with the City's participation in the SRF Program. In "Stated Maturity" when used with respect to any Bond or any installment of interest thereon means the date specified in such Bond and this Ordinance as the fixed date on which the principal of such Bond or such installment of interest is due and payable. "Subsidy Payments" means funds received (or with respect to Section 902(b) hereof funds that are reasonably expected to be received) by the City that either (a) must be used or (b) have been used (or with respect to Section 902(b) hereof are reasonably expected to be used) to reduce the interest or principal payments on System Revenue Bonds. Such Subsidy Payments would include, but are not limited to, payments received by the City through a federal or State of Missouri program. "Surplus Account" means the account by that name ratified and confirmed by Section 501 hereof. "System" means the entire sewerage plant and system owned and operated by the City for the collection, treatment and disposal of sewage, to serve the needs of the City and its inhabitants and others, including all appurtenances and facilities connected therewith or relating thereto, together with all extensions, improvements, additions and enlargements thereto hereafter made or acquired by the City. "System Revenue Bonds" means collectively the Bonds and all other revenue bonds or other obligations which are payable out of, or secured by an interest in, the Net Revenues of the System. "United States Government Obligations" means bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed as to full and timely payment by, the United States of America, including evidences of a direct ownership interest in future interest or principal payments on obligations issued or guaranteed by the United States of America (including the interest component of obligations of the Resolution Funding Corporation). "Valuation Date" means the first business day of each fiscal year of the System. ARTICLE II AUTHORIZATION OF BONDS Section 201. Authorization of Bonds. There is hereby authorized and directed to be issued, subject to the limitations set forth in Section 202 hereof, a series of bonds of the City, designated "Sewerage System Refunding Revenue Bonds, Series 2020," in the Original Principal Amount specified in the Certificate of Final Terms (the "Bonds"), for the purpose of providing funds to refund the Refunded Bonds and pay certain costs of issuing the Bonds. Section 202. Description of Bonds. (a) The Bonds shall consist of fully registered bonds without coupons, numbered from R-1 upward, in denominations of $5,000 or any integral multiple thereof. The Bonds, as originally issued or issued upon transfer, exchange or substitution, shall be substantially in the form set forth in Exhibit A attached hereto and shall be subject to registration, transfer and exchange as provided in Section 205 hereof. ME (b) All of the Bonds shall be dated as of the Dated Date, shall become due in the amounts on the Stated Maturities of September 1 in the years (subject to redemption prior to Stated Maturities thereof as provided in Article III hereof), shall bear interest at the rates per annum, and shall be issued with such terms and provisions specified in the Certificate of Final Terms, subject to the following terms and conditions: (1) The Original Principal Amount of the Bonds shall not exceed the Maximum Allowable Refunding Amount. (2) The true interest cost on the Bonds, as described in Section 108.170(7), RSMo, shall not exceed 3.25%. (3) The weighted average maturity of the Bonds will not be less than 7.0 years or more than 10.0 years. (4) The present value savings resulting from the refunding of the Refunded Bonds, calculated using the true interest cost on the Bonds (TIC), shall not be less than 5.75% of the aggregate principal amount on the Refunded Bonds. (5) The final stated maturity date shall be not later than September 1, 2035. (6) The Bonds will be subject to redemption at the option of the City prior to the Stated Maturities of the Bonds on a date that is not later than September 1, 2030, at a Redemption Price not to exceed 100%. (c) The Certificate of Final Terms, in the form attached hereto as Exhibit C, shall be completed and shall be executed by the Mayor or President Pro Tempore, and the signature of the Mayor or President Pro Tempore on said Certificate of Final Terms, attested by the City Clerk, shall constitute conclusive evidence of the approval of both the Mayor or President Pro Tempore and the City Council. (d) The Bonds shall bear interest at the rates specified in the Certificate of Final Terms (computed on the basis of a 360 -day year of twelve 30 -day months) from the Dated Date of the Bonds or from the most recent Interest Payment Date to which interest has been paid or duly provided for, payable semiannually on March 1 and September 1, beginning on the date specified in the Certificate of Final Terms. Section 203. Designation of Paying Agent. (a) UMB Bank, N.A., St. Louis, Missouri, is hereby designated as the City's Paying Agent for the payment of principal of and interest on the Bonds and as bond registrar with respect to the registration, transfer and exchange of Bonds (herein called the "Paying Agent"). The City is hereby authorized to enter into the Paying Agent Agreement between the City and the Paying Agent, in substantially the form attached to this Ordinance as Exhibit E, and the Mayor, President Pro Tempore, the City Administrator, the Director of Finance or the City Clerk are hereby authorized and directed to execute the Paying Agent Agreement with such changes therein as such officials may deem appropriate, for and on behalf of and as the act and deed of the City. (b) The City will at all times maintain a Paying Agent meeting the qualifications herein described for the performance of the duties hereunder. The City reserves the right to appoint a successor Paying Agent by (1) filing with the Paying Agent then performing such function a certified copy of the proceedings giving notice of the termination of such Paying Agent and appointing a successor, and -10- (2) causing notice of the appointment of the successor Paying Agent to be given by first class mail to each Bondowner. The Paying Agent may resign upon giving written notice by first class mail to the City and the Bondowners not less than 60 days prior to the date such resignation is to take effect. No resignation or removal of the Paying Agent shall become effective until a successor has been appointed and has accepted the duties of the Paying Agent. (c) Every Paying Agent appointed hereunder shall at all times be a commercial banking association or corporation or trust company located in the State of Missouri organized and in good standing and doing business under the laws of the United States of America or of the State of Missouri and subject to supervision or examination by federal or state regulatory authority. (d) The Paying Agent shall be paid its fees and expenses for its services in connection herewith, which fees and expenses shall be paid as other Expenses are paid. Section 204. Method and Place of Payment of Bonds. (a) The principal or Redemption Price of and interest on the Bonds shall be payable in any coin or currency of the United States of America that, on the respective dates of payment thereof, is legal tender for the payment of public and private debts. (b) The principal or Redemption Price of each Bond shall be paid at Maturity by check, draft or electronic transfer to the Person in whose name such Bond is registered on the Bond Register at the Maturity thereof, upon presentation and surrender of such Bond at the principal corporate trust office of the Paying Agent. (c) The interest payable on each Bond on any Interest Payment Date shall be paid to the Registered Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such interest (1) by check or draft mailed by the Paying Agent to the address of such Registered Owner shown on the Bond Register or such other address furnished to the Paying Agent in writing by such Registered Owner, or (2) by electronic transfer to such Registered Owner upon written notice signed by such Registered Owner and given to the Paying Agent not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the name and address of the bank, the bank's ABA routing number and account number to which such Registered Owner wishes to have such transfer directed and an acknowledgment that an electronic transfer fee may be applicable (d) Notwithstanding the foregoing provisions of this Section, any Defaulted Interest with respect to any Bond shall cease to be payable to the Registered Owner of such Bond on the relevant Record Date and shall be payable to the Registered Owner in whose name such Bond is registered at the close of business on the Special Record Date for the payment of such Defaulted Interest, which Special Record Date shall be fixed as hereinafter specified in this subsection (d). The City shall notify the Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the proposed payment (which date shall be at least 30 days after receipt of such notice by the Paying Agent) and shall deposit with the Paying Agent at the time of such notice an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment. Following receipt of such funds the Paying Agent shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Paying Agent shall promptly notify the City of such Special Record Date and, in the name and at the expense of the City, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, by first class mail, postage prepaid, to each Registered Owner of a -11- Bond entitled to such notice at the address of such Registered Owner as it appears on the Bond Register not less than 10 days prior to such Special Record Date. (e) The Paying Agent shall keep a record of payment of principal and Redemption Price of and interest on all Bonds and shall upon the written request of the City at least annually forward a copy or summary of such records to the City. Section 205. Registration, Transfer and Exchange of Bonds. (a) The City covenants that, as long as any of the Bonds remain Outstanding, it will cause the Bond Register to be kept at the office of the Paying Agent for the registration, transfer and exchange of Bonds as herein provided. Each Bond when issued shall be registered in the name of the owner thereof on the Bond Register. (b) Bonds may be transferred and exchanged only on the Bond Register as provided in this Section. Upon surrender of any Bond at the principal payment office of the Paying Agent, the Paying Agent shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Paying Agent, duly executed by the Registered Owner thereof or by the Registered Owner's duly authorized agent. (c) In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Paying Agent shall authenticate and deliver Bonds in accordance with the provisions of this Ordinance. The City shall pay the fees and expenses of the Paying Agent for the registration, transfer and exchange of Bonds provided for by this Ordinance and the cost of printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Paying Agent, are the responsibility of the Registered Owners of the Bonds. In the event any Registered Owner fails to provide a correct taxpayer identification number to the Paying Agent, the Paying Agent may make a charge against such Registered Owner sufficient to pay any governmental charge required to be paid as a result of such failure. In compliance with Section 3406 of the Code, such amount may be deducted by the Paying Agent from amounts otherwise payable to such Registered Owner hereunder or under the Bonds. (d) The City and the Paying Agent shall not be required (a) to register the transfer or exchange of any Bond after notice calling such Bond or portion thereof for redemption has been given or during the period of fifteen days next preceding the first mailing of such notice of redemption; or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest pursuant to Section 204 hereof. (e) The City and the Paying Agent may deem and treat the Person in whose name any Bond is registered in the Bond Register as the absolute owner of such Bond, whether such Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption Price of and interest on said Bond and for all other purposes. All payments so made to any such Registered Owner or upon the Registered Owner's order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City nor the Paying Agent shall be affected by any notice to the contrary. -12- (f) At reasonable times and under reasonable regulations established by the Paying Agent, the Bond Register may be inspected and copied by the Registered Owners of 10% or more in principal amount of the Bonds then Outstanding or any designated representative of such Registered Owners whose authority is evidenced to the satisfaction of the Paying Agent. Section 206. Execution, Authentication and Delivery of Bonds. (a) The Bonds, including any Bonds issued in exchange or as substitution for the Bonds initially delivered, shall be signed by the manual or facsimile signature of the Mayor, attested by the manual or facsimile signature of the City Clerk, and shall have the official seal of the City affixed thereto or imprinted thereon. In case any officer whose signature appears on any Bond ceases to be such officer before the delivery of such Bond, such signature shall nevertheless be valid and sufficient for all purposes, as if such person had remained in office until delivery. Any Bond may be signed by such persons who at the actual time of the execution of such Bond shall be the proper officers to sign such Bond although at the date of such Bond such persons may not have been such officers. (b) The Mayor and City Clerk are hereby authorized and directed to prepare and execute the Bonds as herein specified, and when duly executed, to deliver the Bonds to the Paying Agent for authentication. (C) The Bonds shall have endorsed thereon a certificate of authentication substantially in the form set forth in Exhibit A attached hereto, which shall be manually executed by an authorized signatory of the Paying Agent, but it shall not be necessary that the same signatory sign the certificate of authentication on all of the Bonds that may be issued hereunder at any one time. No Bond shall be entitled to any security or benefit under this Ordinance or be valid or obligatory for any purpose unless and until such certificate of authentication has been duly executed by the Paying Agent. Such executed certificate of authentication upon any Bond shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Ordinance. Upon authentication, the Paying Agent shall deliver the Bonds to or upon the order of the Purchaser of the Bonds, or shall hold the Bonds as FAST Agent for the benefit of the Beneficial Owners (as hereinafter defined), upon payment of the Purchase Price to the City as set forth in the Certificate of Final Terms. Section 207. Mutilated, Destroyed, Lost and Stolen Bonds. (a) If (1) any mutilated Bond is surrendered to the Paying Agent or the Paying Agent receives evidence to its satisfaction of the destruction, loss or theft of any Bond, and (3) there is delivered to the City and the Paying Agent such security or indemnity as may be required by the Paying Agent, then, in the absence of notice to the City and the Paying Agent that such Bond has been acquired by a bona fide purchaser, the City shall execute and the Paying Agent shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond of the same Stated Maturity and of like tenor and principal amount. (b) If any such mutilated, destroyed, lost or stolen Bond has become or is about to become due and payable, the Paying Agent, in its discretion may pay such Bond instead of delivering a new Bond. (c) Upon the issuance of any new Bond under this Section, the City or the Paying Agent may require the payment by the Registered Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Paying Agent) connected therewith. -13- (d) Every new Bond issued pursuant to this Section shall constitute a replacement of the prior obligation of the City, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Bonds. Section 208. Cancellation and Destruction of Bonds Upon Payment. All Bonds that have been paid or redeemed or that otherwise have been surrendered to the Paying Agent, either at or before Maturity, shall be cancelled by the Paying Agent immediately upon the payment, redemption and surrender thereof to the Paying Agent and subsequently destroyed in accordance with the customary practices of the Paying Agent. The Paying Agent shall execute a certificate in duplicate describing the Bonds so cancelled and shall file an executed counterpart of such certificate with the City. Section 209. Preliminary and Final Official Statement. (a) The Preliminary Official Statement, in the form attached hereto as Exhibit F as previously reviewed and approved by the City's Director of Finance and Bond Counsel and authorized by the City Council of the City pursuant to Resolution RS2019-39 adopted by the City Council on June 1, 2020, is hereby ratified and approved, and the final Official Statement is hereby authorized and approved 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 Mayor of the City is hereby authorized to execute the final Official Statement as so supplemented, amended and completed, and the use and public distribution of the Official Statement by the Purchaser in connection with the reoffering of the Bonds is hereby authorized. The proper officials of the City are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the date of payment for and delivery of the Bonds. (b) For the purpose of enabling the Purchaser to comply with the requirements of Rule 15c2 - 12(b)(1) of the Securities and Exchange Commission, the City hereby deems the information regarding the City contained in the Preliminary Official Statement to be "final" as of its date, except for the omission of such information as is permitted by Rule 15c2 -12(b)(1), and the appropriate officers of the City are hereby authorized, if requested, to provide the Purchaser a letter or certification to such effect and to take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Purchaser to comply with the requirement of such Rule. (c) The City agrees to provide to the Purchaser within seven business days of the date of the sale of the Bonds sufficient copies of the final Official Statement to enable the Purchaser to comply with the requirements of Rule 15c2 -12(b)(4) of the Securities and Exchange Commission and with the requirements of Rule G-32 of the Municipal Securities Rulemaking Board. Section 210. Notice of Bond Sale. (a) The Notice of Bond Sale, in the form attached hereto as Exhibit D as previously reviewed and approved by the City's Director of Finance and Bond Counsel and authorized by the City Council of the City pursuant to Resolution RS2019-39 adopted by the City Council on June 1, 2020, is hereby ratified and approved. Pursuant to the terms of the Notice of Bond Sale, the Bonds shall be sold at public sale to the bidder whose bid is in compliance with the Notice of Bond Sale and the limitations set forth in Section 202 of this Ordinance, is not otherwise rejected by the City in accordance with the provisions of the Notice of Bond Sale, and will result in the lowest "true interest cost," determined as follows: the true interest cost is the discount rate (expressed as a per -annum percentage rate) which, when used in computing the present value of all payments of principal and interest to be paid on the Bonds, from the scheduled payment dates back to the dated date of the Bonds, produces an amount equal to the price bid, including net premium or original issue discount, if any. -14- (b) Subject to the limitations set forth in Section 202 hereof, the Bonds shall be sold to the Purchaser at the Purchase Price set forth in the winning bid, as such Purchase Price may be adjusted in connection with issue sizing adjustments made in accordance with the terms of the Notice of Bond Sale. The Mayor, the President Pro Tempore, the City Administrator, the Director of Finance or the City Clerk is authorized to execute the Purchaser's winning bid form for and on behalf of and as the act and deed of the City, such officer's signature thereon being conclusive evidence of such official's and the City's approval thereof. Simultaneously therewith, as provided in Section 202 hereof, the Certificate of Final Terms, in the form attached hereto as Exhibit C, shall be completed and shall be executed by the Mayor or the President Pro Tempore and the signature of the Mayor or President Pro Tempore on said Certificate of Final Terms, attested by the City Clerk, shall constitute conclusive evidence of the approval of both the Mayor or President Pro Tempore, as appropriate, and the City Council. Delivery of the Bonds shall be made to the Purchaser as soon as practicable after the passage of this Ordinance and the acceptance of the Purchaser's bid, upon payment of the Purchase Price in accordance with the terms of the Notice of Bond Sale and this Ordinance. Section 211. Book -Entry Bonds; Securities Depository. (a) For purposes of this Section 211, the following terms shall have the following meanings: "Beneficial Owner" means, whenever used with respect to a Bond, the Person in whose name such Bond is recorded as the beneficial owner of such Bond by a Participant on the records of such Participant, or such Person's subrogee. "Cede & Co." means Cede & Co., the nominee of the Securities Depository, and any successor nominee of the Securities Depository with respect to the Bonds. "Participant" means any broker-dealer, bank or other financial institution for which the Securities Depository holds Bonds as securities depository. "Representation Letter" means, collectively, the Representation Letter from the City to the Securities Depository and the Representation Letter from the Paying Agent to the Securities Depository. "Securities Depository" means The Depository Trust Company, New York, New York. (b) The Bonds shall be initially issued as one single authenticated fully registered bond for each Stated Maturity. Upon initial issuance, the ownership of such Bonds shall be registered in the City's Bond Register kept by the Paying Agent in the name of Cede & Co., as nominee of the Securities Depository. The Paying Agent and the City may treat the Securities Depository (or its nominee) as the sole and exclusive owner of the Bonds registered in its name for the purposes of payment of the principal of and interest on the Bonds, selecting the Bonds or portions thereof to be redeemed, giving any notice permitted or required to be given to Registered Owners of Bonds under this Ordinance, registering the transfer of Bonds, and for all other purposes whatsoever; and neither the Paying Agent nor the City shall be affected by any notice to the contrary. Neither the Paying Agent nor the City shall have any responsibility or obligation to any Participant, any Person claiming a beneficial ownership interest in the Bonds under or through the Securities Depository or any Participant, or any other Person which is not shown on the Bond Register kept by the Paying Agent as being a Registered Owner of any Bonds, with respect to the accuracy of any records maintained by the Securities Depository or any Participant, with respect to the payment by the Securities Depository or any Participant of any amount with respect to the principal of and interest on the Bonds, with respect to any notice which is permitted or required to be given to the Registered Owners of Bonds under this Ordinance, with respect to the selection by the -15- Securities Depository or any Participant of any Person to receive payment in the event of a partial redemption of the Bonds, or with respect to any consent given or other action taken by the Securities Depository as Registered Owner of the Bonds. The Paying Agent shall pay all principal of and interest on the Bonds only to Cede & Co. in accordance with the Representation Letter, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to the principal of and interest on the Bonds to the extent of the sum or sums so paid. No Person other than the Securities Depository (or the Paying Agent as "FAST Agent") shall receive an authenticated Bond for each separate stated maturity evidencing the City's obligation to make payments of principal and interest. Upon delivery by the Securities Depository to the Paying Agent of written notice to the effect that the Securities Depository has determined to substitute a new nominee in place of Cede & Co., the Bonds will be transferable to such new nominee in accordance with subsection (e) of this Section 211. (c) If the City determines that it is in the best interest of the Beneficial Owners that they be able to obtain certificated Bonds, the City may notify the Securities Depository and the Paying Agent, whereupon the Securities Depository shall notify the Participants of the availability through the Securities Depository of Bond certificates. In such event, the Bonds will be transferable in accordance with subsection (e) of this Section 211. The Securities Depository may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and the Paying Agent and discharging its responsibilities with respect thereto under applicable law. In such event the Bonds will be transferable in accordance with subsection (e) of this Section 211. (d) Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of the Securities Depository, all payments with respect to the principal of and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, to the Securities Depository as provided in the Representation Letter. (e) If any transfer or exchange of Bonds is permitted under subsections (b) or (c) of this Section 211, such transfer or exchange shall be accomplished upon receipt by the Paying Agent from the Registered Owners thereof of the Bonds to be transferred or exchanged and appropriate instruments of transfer to the permitted transferee in accordance with the provisions of this Ordinance. If Bonds are issued to holders other than Cede & Co., its successor as nominee for the Securities Depository as holder of all the Bonds, or other securities depository as holder of all the Bonds, the provisions of this Ordinance shall also apply to all matters relating thereto, including, without limitation, the printing of such Bonds and the method of payment of the principal of and interest on such Bonds. In the event that Bonds are issued to holders other than the Securities Depository, the Paying Agent may rely on information provided by the Securities Depository or any Participant as to the names, addresses of and principal amounts held by the Beneficial Owners of the Bonds. ARTICLE III REDEMPTION OF BONDS Section 301. Optional and Mandatory Redemption of Bonds. (a) Optional Redemption. At the option of the City, certain Bonds specified in the Certificate of Final Terms or portions thereof may be called for redemption and payment prior to their Stated Maturity in whole or in part on the dates and at the Redemption Prices specified in the Certificate of Final Terms. (b) Mandatory Redemption of Bonds. The Bonds, if any, designated as "Term Bonds" in the Certificate of Final Terms will be subject to mandatory redemption and payment prior to Stated -16- Maturity in part on the dates and in the principal amounts specified in the Certificate of Final Terms at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. At its option, to be exercised on or before the 45th day next preceding any mandatory Redemption Date, the City may: (1) deliver to the Paying Agent for cancellation Bonds subject to mandatory redemption on said mandatory Redemption Date, in any aggregate principal amount desired; or (2) furnish the Paying Agent funds, together with appropriate instructions, for the purpose of purchasing any Bonds subject to mandatory redemption on said mandatory Redemption Date from any Registered Owner thereof, whereupon the Paying Agent shall expend such funds for such purpose to such extent as may be practical; or (3) receive a credit with respect to the mandatory redemption obligation of the City under this Section for any Bonds subject to mandatory redemption on said mandatory Redemption Date which, prior to such date, have been redeemed (other than through the operation of the mandatory redemption requirements of this subsection (b)) and cancelled by the Paying Agent and not theretofore applied as a credit against any redemption obligation under this subsection (b). Each Term Bond so delivered or previously purchased or redeemed shall be credited at 100% of the principal amount thereof on the obligation of the City to redeem Bonds of the same Stated Maturity on such mandatory Redemption Date, and any excess of such amount shall be credited on future mandatory redemption obligations for Bonds of the same Stated Maturity in chronological order, and the principal amount of Bonds of the same Stated Maturity to be redeemed by operation of the requirements of this Section shall be accordingly reduced. If the City intends to exercise any option granted by the provisions of clauses (1), (2) or (3) above, the City will, on or before the 45th day next preceding each mandatory Redemption Date, furnish the Paying Agent a written certificate indicating to what extent the provisions of said clauses (1), (2) and (3) are to be complied with respect to such mandatory redemption payment. Section 302. Selection of Bonds to Be Redeemed. (a) The Paying Agent shall call Bonds for redemption and payment and shall give notice of such redemption as herein provided upon receipt by the Paying Agent at least 45 days prior to the Redemption Date of written instructions from the City specifying the principal amount, Stated Maturities, Redemption Date and Redemption Prices of the Bonds to be called for redemption. If any Bonds are refunded more than 90 days in advance of such Redemption Date, any escrow agreement entered into by the City in connection with such refunding shall provide that such written instructions to the Paying Agent shall be given by the escrow agent on behalf of the City not less than 45 days prior to the Redemption Date. The Paying Agent may in its discretion waive such notice period so long as the notice requirements set forth in Section 303 are met. The foregoing provisions of this subsection (a) shall not apply to the mandatory redemption of Bonds hereunder, and Bonds shall be called by the Paying Agent for redemption pursuant to such mandatory redemption requirements without the necessity of any action by the City and whether or not the Paying Agent holds moneys available and sufficient to effect the required redemption. (b) Bonds shall be redeemed only in the principal amount of $5,000 or any integral multiple thereof. When less than all of the Outstanding Bonds are to be redeemed, such Bonds shall be redeemed from Stated Maturities selected by the City, and Bonds of less than a full Stated Maturity shall be selected by the Paying Agent in $5,000 units of principal amount by lot or in such other equitable manner as the Paying Agent may determine. (c) In the case of a partial redemption of Bonds at the time Outstanding in denominations greater than $5,000, then for all purposes in connection with such redemption each $5,000 of face value shall be treated as though it were a separate Bond of the denomination of $5,000. If it is determined that one or more, but not all, of the $5,000 units of face value represented by any Bond are selected for -17- redemption, then upon notice of intention to redeem such $5,000 unit or units, the Registered Owner of such Bond or the Registered Owner's duly authorized agent shall present and surrender such Bond to the Paying Agent (1) for payment of the Redemption Price and interest to the Redemption Date of such $5,000 unit or units of face value called for redemption, and (2) for exchange, without charge to the Registered Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Registered Owner of any such Bond fails to present such Bond to the Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the Redemption Date to the extent of the $5,000 unit or units of face value called for redemption (and to that extent only). Section 303. Notice and Effect of Call for Redemption. (a) Unless waived by any Registered Owner of Bonds to be redeemed, official notice of any redemption shall be given by the Paying Agent on behalf of the City by mailing a copy of an official redemption notice by first class mail at least 20 days prior to the Redemption Date to the Purchaser of the Bonds and each Registered Owner of the Bonds to be redeemed at the address shown on the Bond Register. (b) All official notices of redemption shall be dated and shall contain the following information: (1) the Redemption Date; (2) the Redemption Price; (3) if less than all Outstanding Bonds of a maturity are to be redeemed, the identification number, Stated Maturity, and, in the case of partial redemption of any Bonds, the respective principal amounts of the Bonds to be redeemed; (4) a statement that on the Redemption Date the Redemption Price will become due and payable upon each such Bond or portion thereof called for redemption and that interest thereon shall cease to accrue from and after the Redemption Date; and (5) the place where such Bonds are to be surrendered for payment of the Redemption Price, which shall be the principal corporate office of the Paying Agent. (c) With respect to optional redemptions, such notice may be conditioned upon moneys being on deposit with the Paying Agent on or prior to the Redemption Date in an amount sufficient to pay the Redemption Price on the Redemption Date. If such notice is conditional and either the Paying Agent receives written notice from the City that moneys sufficient to pay the Redemption Price will not be on deposit on the Redemption Date, or such moneys are not received on the Redemption Date, then such notice shall be of no force and effect, the Paying Agent shall not redeem such Bonds and the Paying Agent shall give notice, in the same manner in which the notice of redemption was given, that such moneys were not or will not be so received and that such Bonds will not be redeemed. (d) The failure of any Registered Owner to receive notice given as heretofore provided or any defect therein shall not invalidate any redemption. (e) Prior to any Redemption Date, the City shall deposit with the Paying Agent an amount of money sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on that date. ME (f) Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with such notice, the Redemption Price of such Bonds shall be paid by the Paying Agent. Installments of interest due on or prior to the Redemption Date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Registered Owner a new Bond or Bonds of the same Stated Maturity in the amount of the unpaid principal as provided herein. All Bonds that have been redeemed shall be cancelled and destroyed by the Paying Agent as provided herein and shall not be reissued. (g) The Paying Agent is also directed to comply with any mandatory standards established by the Securities and Exchange Commission and then in effect for processing redemptions of municipal securities. Failure to comply with such standards shall not affect or invalidate the redemption of any Bond. (h) For so long as the Securities Depository is effecting book -entry transfers of the Bonds, the Paying Agent shall provide the notices specified in this Section to the Securities Depository. It is expected that the Securities Depository shall, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the beneficial owners. Any failure on the part of the Securities Depository or a Participant, or failure on the part of a nominee of a beneficial owner of a Bond (having been mailed notice from the Paying Agent, the Securities Depository, a Participant or otherwise) to notify the beneficial owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. ARTICLE IV SECURITY FOR BONDS Section 401. Security for Bonds. (a) The Bonds shall be special obligations of the City payable solely from, and secured as to the payment of principal and interest by a pledge of, the Net Revenues of the System, and the City hereby pledges said Net Revenues to the payment of the principal of and interest on the Bonds. The Bonds shall not be or constitute a general obligation of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional or statutory provision, limitation or restriction, and the taxing power of the City is not pledged to the payment of the Bonds either as to principal or interest. (b) The covenants and agreements of the City contained herein and in the Bonds shall be for the equal benefit, protection and security of the legal Owners of any or all of the Bonds, all of which Bonds shall be of equal rank and without preference or priority of one Bond over any other Bond in the application of the funds herein pledged to the payment of the principal of and the interest on the Bonds, or otherwise, except as to rate of interest, Stated Maturity and right of redemption prior to Stated Maturity as provided in this Ordinance. The Bonds shall stand on a parity and be equally and ratably secured with respect to the payment of principal and interest from the Net Revenues of the System and in all other respects with any Parity Bonds. The Bonds shall not have any priority with respect to the payment of principal or interest from said Net Revenues or otherwise over Parity Bonds and Parity Bonds shall not have any priority with respect to the payment of principal or interest from said Net Revenues or otherwise over the Bonds. -19- ARTICLE V CREATION AND RATIFICATION OF FUNDS AND ACCOUNTS; DEPOSIT AND APPLICATION OF BOND PROCEEDS Section 501. Establishment of Funds and Accounts. (a) There are hereby created or ratified and ordered to be established and maintained in the treasury of the City the following separate funds and accounts to be known respectively as the: (1) Sewerage System Revenue Fund (the "Revenue Fund") (2) Sewerage System Operation and Maintenance Account (the "Operation and Maintenance Account"). (3) Series 2020 Debt Service Account for the Bonds, in the Debt Service Fund (the "Debt Service Account"). (4) Sewerage System Depreciation and Replacement Account (the "Depreciation and Replacement Account"). (5) Sewerage System Surplus Account (the "Surplus Account") (6) Rebate Fund. (b) The funds and accounts referred to in subsections (a)(1) through (a)(6) of this Section 501 shall be maintained and administered by the City solely for the purposes and in the manner as provided in the Act and in this Ordinance and in the Previously Issued Parity Ordinances so long as any of the Bonds or the Previously Issued Parity Bonds remain outstanding within the meaning of this Ordinance and said Previously Issued Parity Ordinances, respectively. (c) The City acknowledges the creation and continuing existence of the reserve accounts, debt service accounts, principal accounts and interest accounts, as applicable, established under the Previously Issued Parity Ordinances. Section 502. Deposit of Bond Proceeds. The Purchase Price received from the sale of the Bonds specified in the Certificate of Final Terms shall be deposited simultaneously with the delivery of the Bonds with UMB Bank, N.A., as paying agent for the Refunded Bonds and Paying Agent for the Bonds, and applied to (a) pay costs of refunding and redeeming the Refunded Bonds on September 1, 2020, and (b) pay costs of issuing the Bonds in accordance with the Certificate of Final Terms. Section 503. Redemption of Refunded Bonds. The Refunded Bonds are hereby called for redemption and payment prior to maturity as follows: Redemption Principal Maturities Redemption Date Amount Redeemed Redeemed Price 09/01/2020 $5,790,000 09/01/2025-09/01/2035 100% -20- Said Refunded Bonds shall be redeemed at the office of UMB Bank, N.A., as paying agent for such Refunded Bonds, by the payment on September 1, 2020, the redemption date for the Refunded Bonds, of the principal thereof, together with accrued interest thereon to the September 1, 2020, redemption date. In accordance with the requirements of the Series 2010 Ordinance of the City authorizing the Refunded Bonds, the Mayor, Director of Finance, City Administrator or City Clerk or the City is hereby directed to cause notice of the call for redemption and payment of the Refunded Bonds described above to be given in the manner provided in said Series 2010 Ordinance. The officers of the City and UMB Bank, N.A., as the paying agent for the Refunded Bonds described above, are hereby authorized and directed to take such other action as may be necessary in order to effect the redemption and payment of such Refunded Bonds as herein provided. ARTICLE VI APPLICATION OF REVENUES Section 601. Revenue Fund. The City covenants and agrees that from and after the delivery of the Bonds, and continuing as long as any of the Bonds remain Outstanding hereunder, all of the Revenues shall as and when received be paid and deposited into the Revenue Fund unless otherwise specifically provided by this Ordinance. Said Revenues shall be segregated and kept separate and apart from all other moneys, revenues, funds and accounts of the City and shall not be commingled with any other moneys, revenues, funds and accounts of the City. The Revenue Fund shall be administered and applied solely for the purposes and in the manner provided in this Ordinance. Section 602. Application of Moneys in Funds and Accounts. The City covenants and agrees that from and after the delivery of the Bonds and continuing so long as any of the Bonds shall remain Outstanding, it will administer and allocate all of the moneys then held in the Revenue Fund as follows: (a) Operation and Maintenance Account. On the 25th day of each month, there shall be paid and credited to the Operation and Maintenance Account an amount sufficient to pay the estimated Expenses during the ensuing month. All amounts paid and credited to the Operation and Maintenance Account shall be expended and used by the City solely for the purpose of paying the Expenses of the System. (b) Debt Service Account. On the 25th day of each month, there shall next be paid and credited to the Debt Service Account, to the extent necessary to meet on each Bond Payment Date the payment of all interest on and principal of the Bonds, the following sums: (1) Beginning with the first of said deposits and continuing on the 25th day of each month thereafter to and including February 25, 2021, an equal pro rata portion of the amount of interest becoming due on the Bonds on March 1, 2021, and thereafter, beginning on March 25, 2021, and continuing on the 25th day of each month thereafter so long as the Bonds shall remain outstanding and unpaid, an amount not less than 1/6 of the amount of interest that will become due on the Bonds on the next succeeding Interest Payment Date; and (2) Beginning with the first of said deposits and continuing on the 25th day of each month thereafter to and including August 25, 2021, an equal pro rata portion of the amount of principal becoming due on the respective series of the Bonds on September -21- 1, 2021; and thereafter, beginning on September 25, 2020, and continuing on the 25"' day of each month thereafter so long as any of the the Bonds shall remain outstanding and unpaid, an amount not less than 1/12 of the amount of principal that will become due on the Bonds on the next succeeding Maturity. The amounts required to be paid and credited to the Debt Service Account pursuant to this Section 602(b) shall be so paid at the same time and on a parity with the amounts at the time required to be paid and credited to the debt service accounts established for the payment of principal and interest on Parity Bonds under the provisions of the Parity Ordinances. If at any time the moneys in the Revenue Fund are insufficient to make in full the payments and credits at the time required to be made to the Debt Service Account and to the debt service accounts established to pay the principal of and interest on any Parity Bonds, the available moneys in the Revenue Fund shall, unless otherwise directed by the Previously Issued Parity Ordinances, be divided among such debt service accounts in proportion to the respective principal amounts of said series of bonds at the time outstanding which are payable from the moneys in said debt service accounts. All amounts paid and credited to the Debt Service Account shall be expended and used by the City for the sole purpose of paying the interest on and principal of the Bonds as and when the same become due on each Bond Payment Date. (c) Depreciation and Replacement Account. So long as the amount in the Depreciation and Replacement Account aggregates $500,000 (the "Depreciation and Replacement Accumulation Requirement"), no further deposits will be required in the Depreciation and Replacement Account. But if the City shall ever be required to expend and use a part of the moneys in said Depreciation and Replacement Account for its authorized purposes and such expenditure shall reduce the amount of said Depreciation and Replacement Account below the Depreciation and Replacement Accumulation Requirement, then the City shall beginning November 1 of the fiscal year immediately following fiscal year in which the Depreciation and Replacement Account fell below the Depreciation and Replacement Accumulation Requirement, and on each November 1 thereafter, deposit the sum of $120,000 each year until such Depreciation and Replacement Account aggregates the Depreciation and Replacement Accumulation Requirement. The amounts required to be deposited in the Depreciation and Replacement Account by this Ordinance shall include those amounts required to be deposited by the Previously Issued Parity Bonds. Except as hereinafter provided in Section 603, moneys in the Depreciation and Replacement Account shall be expended and used by the City, if no other funds are available therefor, solely for the purpose of making unusual or extraordinary replacements and repairs in and to the System as may be necessary to keep the System in good repair and working order and to assure the continued effective and efficient operation thereof, including replacing or repairing portions of the System or major items of any plant or equipment which either have been fully depreciated and are worn out or have become obsolete, inefficient or uneconomical. No moneys in said Account shall be used for the purpose of extending or enlarging the System. (d) Surplus Account. After all payments and credits required at the time to be made under the provisions of the foregoing subsections of this Section 602 have been made, all moneys remaining in the Revenue Fund shall be paid and credited to the Surplus Account. Moneys in the Surplus Account may be expended and used for the following purposes as determined by the Council of the City: -22- (1) Paying Expenses of the System to the extent that may be necessary after the application of the moneys held in the Operation and Maintenance Account under the provisions of subsection (a) of this Section 602; (2) Paying the cost of extending, enlarging or improving the System; (3) Preventing default in, anticipating payments into or increasing the amounts in the debt service accounts or debt service reserve accounts for System Revenue Bonds or the Depreciation and Replacement Account, or any one of them, said payments made to prevent default to be made in the order prescribed in this Section 602 of this Ordinance or in the applicable sections of ordinances authorizing additional System Revenue Bonds hereafter issued, or establishing or increasing the amount of any debt service account or debt service reserve account created by the City for the payment of any additional System Revenue Bonds; or (4) Calling, redeeming and paying prior to Stated Maturity, or, at the option of the City, purchasing in the open market at the best price obtainable not exceeding the redemption price (if any bonds are callable), the Bonds or any other System Revenue Bonds, including principal, interest and redemption premium, if any; or (5) Any other lawful purpose in connection with the operation of the System and benefitting the System. So long as any of the Bonds remain Outstanding, no moneys derived from the operation of the System shall be diverted to the general governmental or municipal functions of the City. (e) Deficiency of Payments into Funds and Accounts. If at any time the Revenues shall be insufficient to make any payment on the date or dates hereinbefore specified, the City will make good the amount of such deficiency by making additional payments or credits out of the first available Revenues thereafter received by the City, such payments and credits being made and applied in the order hereinbefore specified in this Section. Section 603. Transfer of Funds to Paying Agent. The Director of Finance or other authorized officer of the City is hereby authorized and directed to withdraw from the Debt Service Account, and, to the extent necessary to prevent a default in the payment of either principal of or interest on the Bonds, from the Surplus Account and the Depreciation and Replacement Account as provided in Section 602 hereof, sums sufficient to pay the principal of and interest on the Bonds as and when the same become due on any Bond Payment Date, and to forward such sums to the Paying Agent in a manner which ensures the Paying Agent will have available funds in such amounts on or before the Business Day immediately preceding each Bond Payment Date. If, through lapse of time, or otherwise, the Registered Owners of Bonds shall no longer be entitled to enforce payment of their obligations, it shall be the duty of the Paying Agent forthwith to return said funds to the City as provided in Section 605 hereof. All moneys deposited with the Paying Agent shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Ordinance. Section 604. Payments Due on Saturdays, Sundays and Holidays. In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date. -23- Section 605. Nonpresentment of Bonds. In the event any Bond shall not be presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Bond shall have been made available to the Paying Agent all liability of the City to the Registered Owner thereof for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Registered Owner of such Bond, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Ordinance or on, or with respect to, said Bond. If any Bond is not presented for payment within one year following the date when such Bond becomes due at Maturity, the Paying Agent shall repay to the City without liability for interest thereon the funds theretofore held by it for payment of such Bond, and such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the City, and the Registered Owner thereof shall be entitled to look only to the City for payment, and then only to the extent of the amount so repaid to it by the Paying Agent, and the City shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. ARTICLE VII DEPOSIT AND INVESTMENT OF MONEYS Section 701. Deposit and Investment of Moneys. (a) Moneys in each of the funds and accounts created by and referred to in this Ordinance shall be deposited in a bank or banks or other legally permitted financial institutions located in the State of Missouri that are members of the Federal Deposit Insurance Corporation. All such deposits shall be continuously and adequately secured by the banks or financial institutions holding such deposits as provided by the laws of the State of Missouri. (b) Moneys held in any fund or account held in the custody of the City referred to in this Ordinance may be invested in Permitted Investments; provided, however, that no such investment shall be made for a period extending longer than the date when the moneys invested may be needed for the purpose for which such fund or account was created. All earnings on any investments held in any fund or account shall accrue to and become a part of such fund or account. In determining the amount held in any fund or account under any of the provisions of this Ordinance, obligations shall be valued at the lower of the cost or the market value thereof. If and when the amount held in any fund or account shall be in excess of the amount required by the provisions of this Ordinance, the City shall direct that such excess be paid and credited to the Revenue Fund. (c) So long as any of the Previously Issued Parity Bonds remain outstanding and unpaid, any investments made pursuant to this Section 701 shall be subject to any restrictions in the Previously Issued Parity Ordinances with respect to the funds and accounts created or ratified by and referred to in the Previously Issued Parity Ordinances. ARTICLE VIII GENERAL COVENANTS AND PROVISIONS The City covenants and agrees with each of the Registered Owners of the Bonds that so long as any of the Bonds remain Outstanding it will comply with each of the following covenants: -24- Section 801. Efficient and Economical Operation. The City will continuously own and will operate the System as a revenue producing System in an efficient and economical manner and will keep and maintain the same in good repair and working order. The City will establish and maintain such rules and regulations for the use of the System as may be necessary to assure maximum utilization and most efficient operation of the System. Section 802. Continuing Disclosure. The City is authorized to enter into the Continuing Disclosure Undertaking in substantially the form attached hereto as Exhibit B. The Mayor or President Pro Tempore is authorized to execute the Continuing Disclosure Undertaking with such changes, omissions, insertions and revisions therein, as such official deems advisable. The execution of the Continuing Disclosure Undertaking by the Mayor or President Pro Tempore shall be conclusive evidence of such approval. The Continuing Disclosure Undertaking is subject to amendment and modification only as provided therein. Notwithstanding any other provision of this Ordinance, failure of the City to comply with the Continuing Disclosure Undertaking shall not be considered a default under this Ordinance. Remedies for a default under the Continuing Disclosure Undertaking shall be limited to those set forth in the Continuing Disclosure Undertaking. Section 803. Rate Covenant. The City will fix, establish, maintain and collect such rates and charges for the use and services furnished by or through the System as will produce Revenues sufficient to (a) pay the Expenses of the System; (b) pay the principal of and interest on the Bonds as and when the same become due; and (c) provide reasonable and adequate reserves for the payment of the Bonds and the interest thereon and for the protection and benefit of the System as provided in this Ordinance. The City further covenants and agrees that such rates and charges will be sufficient to enable the City to have in each fiscal year Net Revenues not less than 110% of the Debt Service Requirements for such fiscal year. The City will require the prompt payment of accounts for service rendered by or through the System and will promptly take whatever action is legally permissible to enforce and collect delinquent charges. The City will, from time to time as often as necessary, in accordance with and subject to applicable legal requirements, revise the rates and charges aforesaid in such manner as may be necessary or proper so that the Net Revenues will be sufficient to cover the obligations of the City under this Section and otherwise under the provisions of this Ordinance. If for any two consecutive fiscal years Net Revenues shall be an amount less than as hereinbefore provided, the City will immediately employ a Consultant to make recommendations with respect to such rates and charges. A copy of the Consultant's report and recommendations shall be filed with the City Clerk and with the Purchaser of the Bonds and shall be furnished to any Registered Owner of the Bonds requesting a copy of the same, at the cost of such Registered Owner. The City shall, to the extent feasible, follow the recommendations of the Consultant. Section 804. Reasonable Charges for all Services. None of the facilities or services provided by the System will be furnished to any user (excepting the City itself) without a reasonable charge being made therefor. If the Revenues are at any time insufficient to pay the Expenses of the System and also to pay all interest on and principal of the Bonds as and when the same become due, then the City will thereafter pay into the Revenue Fund a fair and reasonable payment in accordance with effective applicable rates and charges for all use and services furnished to the City by the System, and such payments will continue so long as the same may be necessary in order to prevent or reduce the amount of any default in the payment of the interest on or principal of the Bonds. Section 805. Corporate Existence. The City will maintain its corporate identity and existence so long as any of the Bonds remain Outstanding, unless another body corporate and politic by operation of law succeeds to the powers, privileges, rights, liabilities, disabilities and duties of the City and is obligated by law to comply with the terms and provisions of this Ordinance without materially adversely affecting at any time the privileges and rights of any Owner of any Outstanding Bond. -25- Section 806. Restrictions on Mortgage or Sale of System. The City will not mortgage, pledge or otherwise encumber the System or any part thereof, nor will it sell, lease or otherwise dispose of the System or any material part thereof, provided, however, the City may (a) sell at fair market value any portion of the System which shall have been replaced by other similar property of at least equal value, or which shall cease to be necessary for the efficient operation of the System, and in the event of sale, the City will apply the proceeds to either (1) redemption of Outstanding Bonds in accordance with the provisions governing redemption of Bonds in advance of Stated Maturity, or (2) replacement of the property so disposed of by other property the Revenues of which shall be incorporated into the System as hereinbefore provided; (b) cease to operate, abandon or otherwise dispose of any property which has become obsolete, nonproductive or otherwise unusable to the advantage of the City; or (c) lease, (1) as lessor, any real or personal property which is unused or unimproved, or which has become obsolete, nonproductive or otherwise unusable to the advantage of the City, or which is being acquired as a part of a lease/purchase financing for the acquisition and/or improvement of such property; and/or (2) as lessee, with an option of the City to purchase, any real or personal property for the extension and improvement of the System. Property being leased as lessor and/or lessee pursuant to this subsection (c) shall not be treated as part of the System for purposes of this Section 805 and may be mortgaged, pledged or otherwise encumbered. Section 807. Insurance. The City will carry and maintain insurance with respect to the System and its operations against casualties, contingencies and risks (including but not limited to property and casualty, fire and extended coverage insurance upon all of the properties forming a part of the System insofar as the same are of an insurable nature, public liability insurance, business interruption insurance, worker's compensation and employee dishonesty insurance), such insurance to be of the character and coverage and in such amounts as would normally be carried by other municipalities or public entities engaged in similar activities of comparable size and similarly situated. In the event of loss or damage, the City, with reasonable dispatch, will use the proceeds of such insurance in reconstructing and replacing the property damaged or destroyed, or in paying the claims on account of which such proceeds were received, or if such reconstruction or replacement is unnecessary or impracticable, then the City will pay and deposit the proceeds of such insurance into the Revenue Fund. The City will annually review the insurance it maintains with respect to the System to determine that such insurance is customary and adequate to protect its property and operations. The cost of all insurance obtained pursuant to the requirements of this Section shall be paid as an Expense out of the Revenues. Section 808. Books, Records and Accounts. The City will install and maintain proper books, records and accounts (entirely separate from all other records and accounts of the City) in which complete and correct entries will be made of all dealings and transactions of or in relation to the System. Such accounts shall show the amount of Revenues of the System, the application of such Revenues, and all financial transactions in connection therewith. Said books shall be kept by the City according to standard accounting practices as applicable to the operation of facilities comparable to the System. Section 809. Annual Budget. Prior to the commencement of each fiscal year, the City will cause to be prepared and filed with the City Clerk a budget setting forth the estimated receipts and expenditures of the System for the next succeeding fiscal year. The City Clerk, promptly upon the filing of said budget in the City Clerk's office, will mail a copy of said budget to the Purchaser of the Bonds. -26- Section 810. Annual Audit. Annually, promptly after the end of the fiscal year, the City will cause an audit of the System to be made for the preceding fiscal year by an Accountant to be employed for that purpose and paid from the Revenues. Said annual audit shall cover in reasonable detail the operation of the System during such fiscal year. Within 30 days after the completion of each such audit, a copy thereof shall be filed in the office of the City Clerk, and, upon the Purchaser's request, a duplicate copy of said audit shall be mailed to the Purchaser of the Bonds. Such audits shall at all times during the usual business hours be open to the examination and inspection by any taxpayer, any user of the services of the System, any Registered Owner of any of the Bonds, or by anyone acting for or on behalf of such taxpayer, user or Registered Owner. A copy of any such audit will, upon request and upon receipt by the City of payment of the reasonable cost of preparing and mailing the same, be sent to any Bondowner or prospective Bondowner. As soon as possible after the completion of the annual audit, the governing body of the City shall review such audit, and if any audit shall disclose that proper provision has not been made for all of the requirements of this Ordinance, the City will promptly cure such deficiency and will promptly proceed to increase the rates and charges to be charged for the use and services furnished by the System as may be necessary to adequately provide for such requirements. Section 811. Right of Inspection. The Purchaser of the Bonds or any Registered Owner or Owners of 10% of the principal amount of the Bonds then Outstanding shall have the right at all reasonable times to inspect the System and all records, accounts and data relating thereto, and shall be furnished all such information concerning the System and the operation thereof which the Purchaser or such Registered Owner or Owners may reasonably request. Section 812. Performance of Duties and Covenants. The City will faithfully and punctually perform all duties, covenants and obligations with respect to the operation of the System now or hereafter imposed upon the City by the Constitution and laws of the State of Missouri and by the provisions of this Ordinance. Section 813. Parity Bond Certification. The City hereby represents and covenants that the Bonds directed to be issued by this Ordinance are so issued in full compliance with the restrictions and conditions upon which the City may issue additional bonds payable out of the Net Revenues of the System and which stand on a parity with the Previously Issued Parity Bonds now outstanding, as set forth and contained in the Previously Issued Parity Ordinances, and that the Bonds herein directed to be issued are so issued in all respects on a parity and equality with the Previously Issued Parity Bonds now outstanding. Section 814. Tax Covenants. (a) The City covenants and agrees that (1) it will comply with all applicable provisions of the Code, including Sections 103 and 141 through 150, necessary to maintain the exclusion from federal gross income of the interest on the Bonds and (2) it will not use or permit the use of any proceeds of Bonds or any other funds of the City, nor 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 federal gross income of the interest on the Bonds. The City will also pass 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 law in order to ensure that the interest on the Bonds will remain excluded from federal gross income, to the extent any such actions can be taken by the City. -27- (b) The City covenants and agrees that (1) it will use the proceeds of the Bonds as soon as practicable for the purposes for which the Bonds are issued, and (2) it will not invest or directly or indirectly use or permit the use of any proceeds of the Bonds or any other funds of the City in any manner, or take or omit to take any action, that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148(a) of the Code. (c) The City covenants that it will pay or provide for the payment from time to time of all arbitrage rebate to the United States pursuant to Section 148(f) of the Code and the Federal Tax Certificate. This covenant shall survive payment in full or defeasance of the Bonds. The Federal Tax Certificate may be amended or replaced if, in the opinion of Bond Counsel, such amendment or replacement will not adversely affect the exclusion from federal gross income of the interest on the Bonds. (d) The City covenants that it will not use any portion of the proceeds of the Bonds, including any investment income earned on such proceeds, directly or indirectly, in a manner that would cause any Bond to be a "private activity bond" within the meaning of Section 141 of the Code. (e) The foregoing covenants shall remain in full force and effect notwithstanding the defeasance of the Bonds pursuant to Article XI of this Ordinance or any other provision of this Ordinance, until the final Maturity of all Bonds Outstanding. ARTICLE IX ADDITIONAL BONDS AND OBLIGATIONS Section 901. Senior Lien Bonds. The City covenants and agrees that so long as any of the Bonds remain Outstanding, the City will not issue any additional bonds or incur or assume any other debt obligations appearing as liabilities on the balance sheet of the System for the payment of moneys determined in accordance with generally accepted accounting principles consistently applied, including capital leases as defined by generally accepted accounting principles, payable out of the Net Revenues of the System or any part thereof which are superior to the Bonds. Section 902. Parity Bonds and Other Obligations. The City covenants and agrees that so long as any of the Bonds remain Outstanding, it will not issue any additional bonds or other long-term obligations payable out of the Net Revenues of the System or any part thereof which stand on a parity or equality with the Bonds ("Parity Bonds") unless the following conditions are met: (a) The City shall not be in default in the payment of principal of or interest on any Bonds or any Parity Bonds at the time outstanding or in making any payment at the time required to be made into the respective funds and accounts created by and referred to in this Ordinance or any Parity Ordinance for Parity Bonds at the time outstanding (unless such additional revenue bonds or obligations are being issued to provide funds to cure such default); and (b) Either of the following: (1) The average annual Net Revenues as set forth in the two most recent annual audits for the two fiscal years immediately preceding the issuance of additional bonds, as determined by a Consultant, shall have been equal to at least 110% of the Average Annual Debt Service for all System Revenue Bonds of the City, including the additional bonds proposed to be issued. In determining the average annual Net Revenues ME for the two preceding fiscal years for the purpose of this subsection, the City may obtain a Consultant to adjust said Net Revenues for the two preceding fiscal years by adding thereto, in the event the City shall have made any increase in rates for the use and services of the System and such increase shall not have been in effect during all of the two fiscal years for which annual audits are available immediately preceding the issuance of additional bonds, the amount, as estimated by the Consultant, of the additional Net Revenues which would have resulted from the operation of the System during said two preceding fiscal years had such rate increase been in effect for the entire period; or (2) The projected average annual Net Revenues for the two fiscal years immediately following the fiscal year in which the improvements to the System, the cost of which is being financed by such additional bonds, are to be placed in commercial operation, as determined by a Consultant, shall be equal to at least 110% of the average of the Debt Service Requirements in all fiscal years succeeding said fiscal year in which such improvements are expected to be placed in commercial operation. In determining the projected average annual Net Revenues for the purpose of this subsection, the Consultant may adjust said projections by adding thereto any estimated increase in Net Revenues resulting from any increase or increases in rates for the use and services of the System duly made by the City which shall be in effect for the period of such projections and which, in the opinion of the Consultant, are economically feasible and reasonably considered necessary based on projected operations of the System. Additional sewerage system revenue bonds of the City issued under the conditions set forth in this Section shall stand on a parity with the Bonds and shall enjoy complete equality of lien on and claim against the Net Revenues with the Bonds, and the City may make equal provision for paying said bonds and the interest thereon out of the Revenue Fund and may likewise provide for the creation of reasonable debt service accounts and debt service reserve accounts for the payment of such additional bonds and the interest thereon out of moneys in the Revenue Fund. Section 903. Junior Lien Bonds and Other Obligations. Nothing in this Section contained shall prohibit or restrict the right of the City to issue additional revenue bonds or other revenue obligations for any lawful purpose in connection with the operation of the System and to provide that the principal of and interest on said revenue bonds or obligations shall be payable out of the Net Revenues of the System, provided at the time of the issuance of such additional revenue bonds or obligations the City shall not be in default in the performance of any covenant or agreement contained in this Ordinance (unless such additional revenue bonds or obligations are being issued to provide funds to cure such default), and provided further that such additional revenue bonds or obligations shall be junior and subordinate to the Bonds so that if at any time the City shall be in default in paying either interest on or principal of the Bonds, or if the City shall be in default in making any payments required to be made by it under the provisions of subsections (a), (b), (c) and (d) of Section 602 of this Ordinance, the City shall make no payments of either principal of or interest on said junior and subordinate revenue bonds or obligations until said default or defaults be cured. In the event of the issuance of any such junior and subordinate revenue bonds or obligations, the City, subject to the provisions aforesaid, may make provision for paying the principal of and interest on said revenue bonds or for paying said obligations out of moneys in the Revenue Fund. Section 904. Refunding Bonds. The City shall have the right, without complying with the provisions of Section 902 hereof, to refund any of the Bonds or any of the Parity Bonds under the provisions of any law then available, and the refunding bonds so issued shall enjoy complete equality of pledge with any of the Bonds and the Parity Bonds that are not refunded, if any, upon the Net Revenues of the System; provided, however, that if only a portion of the Bonds are refunded and if said Bonds are -29- refunded in such manner that the aggregate amount of principal and interest scheduled to become due on the refunding bonds in any fiscal year (taking into account scheduled mandatory redemptions) exceeds the aggregate amount of principal and interest scheduled to become due on the refunded Bonds in said fiscal year (taking into account scheduled mandatory redemptions), then said Bonds may be refunded without complying with the provisions of Section 902 hereof only by and with the written consent of the Registered Owners of a majority in principal amount of the Bonds not refunded. ARTICLE X DEFAULT AND REMEDIES Section 1001. Acceleration of Maturity Upon Default. The City covenants and agrees that if it defaults in the payment of the principal of or interest on any of the Bonds as the same shall become due on any Bond Payment Date, or if the City or its governing body or any of the officers, agents or employees thereof fail or refuse to comply with any of the provisions of this Ordinance or of the constitution or statutes of the State of Missouri, and such default continues for a period of 60 days after written notice specifying such default has been given to the City by the Registered Owner of any Bond then Outstanding, then, at any time thereafter and while such default continues, the Registered Owners of 25% in principal amount of the Bonds then Outstanding may, by written notice to the City filed in the office of the City Clerk or delivered in person to said City Clerk, declare the principal of all Bonds then Outstanding to be due and payable immediately, and upon any such declaration given as aforesaid, all of said Bonds shall become and be immediately due and payable, anything in this Ordinance or in the Bonds contained to the contrary notwithstanding. This provision, however, is subject to the condition that if at any time after the principal of said Outstanding Bonds has been so declared to be due and payable, all arrears of interest upon all of said Bonds, except interest accrued but not yet due on such Bonds, and all arrears of principal upon all of said Bonds has been paid in full and all other defaults, if any, by the City under the provisions of this Ordinance and under the provisions of the statutes of the State of Missouri have been cured, then and in every such case the Registered Owners of a majority in principal amount of the Bonds then Outstanding, by written notice to the City given as hereinbefore specified, may rescind and annul such declaration and its consequences, but no such rescission or annulment shall extend to or affect any subsequent default or impair any rights consequent thereon. Section 1002. Other Remedies. The provisions of this Ordinance, including the covenants and agreements herein contained, shall constitute a contract between the City and the Registered Owners of the Bonds, and the Registered Owner or Owners of not less than 10% in principal amount of the Bonds at the time Outstanding shall have the right for the equal benefit and protection of all Registered Owners of Bonds similarly situated: (a) by mandamus or other suit, action or proceedings at law or in equity to enforce the rights of such Registered Owner or Owners against the City and its officers, agents and employees, and to require and compel duties and obligations required by the provisions of this Ordinance or by the constitution and laws of the State of Missouri; (b) by suit, action or other proceedings in equity or at law to require the City, its officers, agents and employees to account as if they were the trustees of an express trust; and (c) by suit, action or other proceedings in equity or at law to enjoin any acts or things which may be unlawful or in violation of the rights of the Registered Owners of the Bonds. -30- Section 1003. Limitation on Rights of Bondowners. No one or more Bondowners secured hereby shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for herein, or to enforce any right hereunder, except in the manner herein provided, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Registered Owners of such Outstanding Bonds. Section 1004. Remedies Cumulative. No remedy conferred herein upon the Bondowners is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred herein. No waiver of any default or breach of duty or contract by the Registered Owner of any Bond shall extend to or affect any subsequent default or breach of duty or contract or shall impair any rights or remedies consequent thereon. No delay or omission of any Bondowner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the Registered Owners of the Bonds by this Ordinance may be enforced and exercised from time to time and as often as may be deemed expedient. If any suit, action or proceedings taken by any Bondowner on account of any default or to enforce any right or exercise any remedy has been discontinued or abandoned for any reason, or shall have been determined adversely to such Bondowner, then, and in every such case, the City and the Registered Owners of the Bonds shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Bondowners shall continue as if no such suit, action or other proceedings had been brought or taken. Section 1005. No Obligation to Levy Taxes. Nothing contained in this Ordinance shall be construed as imposing on the City any duty or obligation to levy any taxes either to meet any obligation incurred herein or to pay the principal of or interest on the Bonds. Section 1006. Exception for Continuing Disclosure. This Article X shall not apply to Section 802 of this Ordinance regarding continuing disclosure requirements, and Bondowners or Beneficial Owners of Bonds shall have no remedies for enforcement of said Section 802 other than the remedies provided in said Section 802. ARTICLE XI DEFEASANCE Section 1101. Defeasance. (a) When any or all of the Bonds or the interest payments thereon shall have been paid and discharged, then the requirements contained in this Ordinance and the pledge of Net Revenues made hereunder and all other rights granted hereby shall terminate with respect to the Bonds or interest payments so paid and discharged. Bonds or the interest payments thereon shall be deemed to have been paid and discharged within the meaning of this Ordinance if there has been deposited with the Paying Agent or other commercial bank or trust company located in the State of Missouri and having full trust powers, at or prior to the Stated Maturity or Redemption Date of said Bonds or the interest payments thereon, in trust for and irrevocably appropriated thereto, moneys and/or Defeasance Obligations which, together with the interest to be earned thereon, will be sufficient for the payment of the principal or Redemption Price of said Bonds, and/or interest to accrue on such Bonds to the Stated Maturity or Redemption Date, as the case may be, or if default in such payment shall have occurred on such date, then to the date of the tender of such payments; provided, however, that if any such Bonds shall be redeemed prior to the Stated Maturity thereof, (1) the City shall have elected to redeem such Bonds, and (2) either -31- notice of such redemption shall have been given, or the City shall have given irrevocable instructions, or shall have provided for an escrow agent to give irrevocable instructions, to the Paying Agent to redeem such Bonds in compliance with Section 302(a) of this Ordinance. (b) Any moneys and Defeasance Obligations that at any time shall be deposited with the Paying Agent or other commercial bank or trust company by or on behalf of the City, for the purpose of paying and discharging any of the Bonds or the interest payments thereon, shall be and are hereby assigned, transferred and set over to the Paying Agent or other bank or trust company in trust for the respective Registered Owners of such Bonds, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All moneys and Defeasance Obligations deposited with the Paying Agent or other bank or trust company shall be deemed to be deposited in accordance with and subject to all of the provisions contained in this Ordinance. (c) In the event of an advance refunding, the City shall cause to be delivered a verification report of an independent nationally recognized certified public accountant. I:1A11Colin 0;4I1 MISCELLANEOUS PROVISIONS Section 1201. Amendments. (a) The Continuing Disclosure Undertaking is exempt from the provisions of this Section 1201 and is subject to amendment and modification only as provided therein. The rights and duties of the City and the Bondowners, and the terms and provisions of the Bonds or of this Ordinance, may be amended or modified at any time in any respect by ordinance of the City with the written consent of the Registered Owners of not less than a majority in principal amount of the Bonds then Outstanding, such consent to be evidenced by an instrument or instruments executed by such Registered Owners and duly acknowledged or proved in the manner of a deed to be recorded, and such instrument or instruments shall be filed with the City Clerk, but no such modification or alteration shall: (1) extend the maturity of any payment of principal or interest due upon any Bond; (2) effect a reduction in the amount which the City is required to pay by way of principal of or interest on any Bond; (3) permit the creation of a lien on the Net Revenues of the System prior or equal to the lien of the Bonds or Parity Bonds; (4) permit preference or priority of any Bonds over any other Bonds; or (5) reduce the percentage in principal amount of Bonds required for the written consent to any modification or alteration of the provisions of this Ordinance. (b) Any provision of the Bonds or of this Ordinance may, however, be amended or modified by Ordinance duly adopted by the governing body of the City at any time in any respect with the written consent of the Registered Owners of all of the Bonds at the time Outstanding. (c) Without notice to or the consent of any Bondowners, the City may amend or supplement the Ordinance for the purpose of curing any formal defect, omission, inconsistency or ambiguity therein -32- or in connection with any other change therein which is not materially adverse to the interests of the Bondowners. (d) Every amendment or modification of the provisions of the Bonds or of this Ordinance to which the written consent of the Bondowners is given, as above provided, shall be expressed in an ordinance passed by the governing body of the City amending or supplementing the provisions of this Ordinance and shall be deemed to be a part of this Ordinance. Any and all modifications made in the manner hereinabove provided shall not become effective until there has been filed with the City Clerk a copy of the ordinance of the City herein provided for, duly certified, as well as proof of any required consent to such modification by the Registered Owners of the Bonds then Outstanding. It shall not be necessary to note on any of the Outstanding Bonds any reference to such amendment or modification. A certified copy of every such amendatory or supplemental proceedings and a certified copy of this Ordinance shall be made available for inspection by the Registered Owner of any Bond or a prospective purchaser or owner of any Bond authorized by this Ordinance, and upon payment of the reasonable cost of preparing the same, a certified copy of any such amendatory or supplemental proceedings or of this Ordinance will be sent by the City Clerk to any such Bondowner or prospective Bondowner. (e) The City shall furnish to the Paying Agent a copy of any amendment to the Bonds or this Ordinance made hereunder which affects the duties or obligations of the Paying Agent under this Ordinance. Section 1202. Notices, Consents and Other Instruments by Bondowners. (a) Any notice, consent, request, direction, approval, objection or other instrument required by this Ordinance to be signed and executed by the Bondowners may be in any number of concurrent writings of similar tenor and may be signed or executed by such Bondowners in person or by agent appointed in writing. Proof of the execution of any such instrument or of the writing appointing any such agent and of the ownership of Bonds (except for the assignment of ownership of a Bond as provided for in the form of Bond set forth in Exhibit A), if made in the following manner, shall be sufficient for any of the purposes of this Ordinance, and shall be conclusive in favor of the City and the Paying Agent with regard to any action taken, suffered or omitted under any such instrument, namely: (1) The fact and date of the execution by any person of any such instrument may be proved by a certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such instrument acknowledged before such officer the execution thereof, or by affidavit of any witness to such execution. (2) The fact of ownership of Bonds, the amount or amounts, numbers and other identification of Bonds, and the date of holding the same shall be proved by the Bond Register. (b) In determining whether the Registered Owners of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver under this Ordinance, Bonds owned by the City shall be disregarded and deemed not to be Outstanding under this Ordinance, except that, in determining whether the Bondowners shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Bondowners know to be so owned shall be so disregarded. Notwithstanding the foregoing, Bonds so owned which have been pledged in good faith shall not be disregarded as aforesaid if the pledgee establishes to the satisfaction of the Bondowners the pledgee's right so to act with respect to such Bonds and that the pledgee is not the City. -33- Section 1203. Further Authority. The officers of the City, including the Mayor, the President Pro Tempore, the City Administrator, the Director of Finance, the Director of Public Works, the Wastewater Division Director, the City Counselor and the City Clerk, shall be, and they hereby are, 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 1204. Severability. If any section or other part of this Ordinance, whether large or small, shall for any reason be held invalid, the invalidity thereof shall not affect the validity of the other provisions of this Ordinance. Section 1205. Governing Law. This Ordinance shall be governed exclusively by and constructed in accordance with the applicable laws of the State of Missouri. Section 1206. Electronic Storage. The parties hereto agree that the transaction described herein may be conducted and related documents may be sent, stored and received by electronic means. [Remainder of this page intentionally left blank] -34- Section 1207. Effective Date. This Ordinance shall take effect and be in full force from and after its passage by the Council and approval by the Mayor. Passed: July 20, 2020 Presiding Officer (SEAL) ATTEST: I APPROVED AS TO FORM: , n d W,,j I -35- Approved: July' t, 2020 Mayor Carrie Tergin City orne EXHIBIT A TO ORDINANCE FORM OF SERIES 2020 BOND EXCEPT AS OTHERWISE PROVIDED IN THE ORDINANCE (DESCRIBED HEREIN), THIS GLOBAL BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY (DESCRIBED HEREIN) OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. UNITED STATES OF AMERICA STATE OF MISSOURI Registered Registered 101�� Interest Rate CITY OF JEFFERSON, MISSOURI SEWERAGE SYSTEM REFUNDING REVENUE BOND SERIES 2020 Maturity Date September 1, 20 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: Dated Date August , 2020 16111K`I_Ier I.71 Mi DOLLARS THE CITY OF JEFFERSON, MISSOURI, a home rule charter city and a political subdivision of the State of Missouri (the "City"), for value received, hereby promises to pay to the Registered Owner shown above, or registered assigns, but solely from the source and in the manner herein specified, the Principal Amount shown above on the Maturity Date shown above, unless called for redemption prior to said Maturity Date, and to pay interest thereon, but solely from the source and in the manner herein specified, at the Interest Rate per annum shown above (computed on the basis of a 360 -day year of twelve 30 -day months) from the Dated Date shown above or from the most recent Interest Payment Date to which interest has been paid or duly provided for, payable semiannually on March 1 and September 1 in each year, beginning on March 1, 2021, until said Principal Amount has been paid. The Principal Amount or Redemption Price of this Bond shall be paid at Maturity or upon earlier redemption by check, draft or electronic transfer to the Person in whose name this Bond is registered at the Maturity or Redemption Date thereof, upon presentation and surrender of this Bond at the principal payment office of UMB Bank, N.A., St. Louis, Missouri (the "Paying Agent"). The interest payable on this Bond on any Interest Payment Date shall be paid to the Registered Owner of this Bond as shown on the Bond Register at the close of business on the Record Date for such interest (1) by check or draft mailed by the Paying Agent to the address of such Registered Owner shown on the Bond Register or such other address furnished to the Paying Agent in writing by such Registered Owner, or (2) by electronic transfer to such Registered Owner upon written notice signed by such Registered Owner and given to the FEW Paying Agent not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the name and address of the bank, the bank's ABA routing number and account number to which such Registered Owner wishes to have such transfer directed and an acknowledgment that an electronic transfer fee may be applicable This Bond is one of a duly authorized series of bonds of the City designated "Sewerage System Refunding Revenue Bonds, Series 2020," aggregating the principal amount of $[Principal Amount] (the "Bonds"), issued by the City for the purpose of paying the costs of refunding the City's Taxable Sewerage System Revenue Bonds, Series 2010B (Build America Bonds — Direct Payment), scheduled to mature on September 1, 2025, and thereafter (said sewerage system, together with all future improvements and extensions thereto hereafter constructed or acquired by the City, being herein called the "System"), under the authority of and in full compliance with the Constitution and laws of the State of Missouri, including particularly Chapter 250, RSMo, and Section 108.140, RSMo, and pursuant to an ordinance duly passed by the Council of the City (herein called the "Ordinance"). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Ordinance. At the option of the City, Bonds or portions thereof maturing on September 1 in the years 20_ and thereafter may be called for redemption and payment prior to maturity on September 1, 20_, and thereafter in whole or in part at any time in such amounts for each maturity as shall be determined by the City (Bonds of less than a full maturity to be selected in multiples of $5,000 principal amount in such equitable manner as the Paying Agent shall designate) at the Redemption Price of 100% of the principal amount thereof, plus accrued interest thereon to the Redemption Date. [The Bonds are subject to mandatory redemption and payment prior to maturity pursuant to the mandatory redemption requirements of the Ordinance at a redemption price equal to 100% of the Principal Amount thereof plus accrued interest to the Redemption Date.] Notice of redemption, unless waived, is to be given by the Paying Agent by mailing an official redemption notice by first class mail at least 20 days prior to the Redemption Date, to the original Purchaser of the Bonds and to each Registered Owner of each of the Bonds to be redeemed at the address shown on the Bond Register. Notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the City defaults in the payment of the Redemption Price) such Bonds or portions of Bonds shall cease to bear interest. The Bonds are being issued by means of a book -entry system with no physical distribution of bond certificates to be made except as provided in the Ordinance. One Bond certificate with respect to each date on which the Bonds are stated to mature, registered in the nominee name of the Securities Depository, is being issued and required to be deposited with the Securities Depository and immobilized in its custody. The book -entry system will evidence positions held in the Bonds by the Securities Depository's participants, beneficial ownership of the Bonds in authorized denominations being evidenced in the records of such participants. Transfers of ownership shall be effected on the records of the Securities Depository and its participants pursuant to rules and procedures established by the Securities Depository and its participants. The City and the Paying Agent will recognize the Securities Depository nominee, while the registered owner of this Bond, as the owner of this Bond for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on, this Bond, (ii) notices and (iii) voting. Transfers of principal, interest and any redemption premium payments to participants of the Securities Depository, and transfers of principal, interest and any redemption premium payments to beneficial owners of the Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of such beneficial owners. The City and the ON Paying Agent will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, the Securities Depository nominee, its participants or persons acting through such participants. While the Securities Depository nominee is the owner of this Bond, notwithstanding the provision hereinabove contained, payments of principal of and interest on this Bond shall be made in accordance with existing arrangements among the City, the Paying Agent and the Securities Depository. EXCEPT AS OTHERWISE PROVIDED IN THE ORDINANCE, THIS GLOBAL BOND MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY. The Bonds are issued in fully registered form in the denomination of $5,000 or any integral multiple thereof. This Bond may be exchanged at the office of the Paying Agent for a like aggregate principal amount of Bonds of the same maturity of other authorized denominations upon the terms provided in the Ordinance. This Bond is transferable by the Registered Owner hereof in person or by the Registered Owner's agent duly authorized in writing, at the office of the Paying Agent, but only in the manner, subject to the limitations and upon payment of the charges provided in the Ordinance and upon surrender and cancellation of this Bond. The City shall pay all costs incurred in connection with the issuance, payment and initial registration of the Bonds and the cost of a reasonable supply of bond blanks. The Bonds are special obligations of the City payable solely from, and secured as to the payment of principal and interest by a pledge of, the Net Revenues of the System, and the taxing power of the City is not pledged to the payment of the Bonds either as to principal or interest. The Bonds shall not be or constitute a general obligation of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction. The Bonds stand on a parity and are equally and ratably secured with respect to the payment of principal and interest from the Net Revenues and in all other respects with (i) an issue of Sewerage System Refunding and Improvement Revenue Bonds (State Revolving Fund Program), Series 200113, of the City, (ii) an issue of Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2005A, of the City, (iii) an issue of Sewerage System Refunding and Improvement Revenue Bonds (State Revolving Fund Program), Series 2005B, of the City, (iv) an issue of Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2008, of the City, (v) the Taxable Sewerage System Revenue Bonds, Series 2010B (Build America Bonds — Direct Payment), of the City, scheduled to mature on September 1, 2020, that will remain outstanding after the issuance of the Bonds, (vi) an issue of Sewerage System Revenue Bonds (State of Missouri — Direct Loan Program), Series 2012, of the City, (vii) an issue of Sewerage System Revenue Bonds, Series 2014, of the City, and (viii) an issue of Sewerage System Revenue Bonds, Series 2016, of the City. Under the conditions set forth in the Ordinance, the City has the right to issue additional parity bonds and other obligations payable from and secured by the Net Revenues; provided, however, that such additional bonds may be so issued only in accordance with and subject to the covenants, conditions and restrictions relating thereto set forth in the Ordinance. The City hereby covenants and agrees with the Registered Owner of this Bond that it will keep and perform all covenants and agreements contained in the Ordinance, and will fix, establish, maintain and collect such rates, fees and charges for the use and services furnished by or through the System as will produce Revenues sufficient to pay the costs of operation and maintenance of the System, pay the principal of and interest on the Bonds as and when the same become due, and provide reasonable and adequate reserve funds. Reference is made to the Ordinance for a description of the covenants and agreements made by the City with respect to the collection, segregation and application of the Revenues A-3 of the System, the nature and extent of the security of the Bonds, the rights, duties and obligations of the City with respect thereto, and the rights of the Registered Owners thereof. This Bond may be transferred or exchanged, as provided in the Ordinance, only on the Bond Register kept for that purpose at the principal payment office of the Paying Agent, upon surrender of this Bond together with a written instrument of transfer or exchange satisfactory to the Paying Agent duly executed by the Registered Owner or the Registered Owner's duly authorized agent, and thereupon a new Bond or Bonds in any authorized denomination having the same Maturity Date and in the same aggregate principal amount shall be issued to the transferee in exchange therefor as provided in the Ordinance and upon payment of the charges therein prescribed. The City and the Paying Agent may deem and treat the Person in whose name this Bond is registered on the Bond Register as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price hereof and interest due hereon and for all other purposes and neither the City nor the Paying Agent shall be affected by any notice to the contrary. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Ordinance until the Certificate of Authentication hereon has been executed by the Paying Agent. IT IS HEREBY CERTIFIED AND DECLARED that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of the Bonds have existed, happened and been performed in due time, form and manner as required by law, and that before the issuance of the Bonds, provision has been duly made for the collection and segregation of the Revenues of the System and for the application of the same as provided in the Ordinance. IN WITNESS WHEREOF, THE CITY OF JEFFERSON, MISSOURI, has executed this Bond by causing it to be signed by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its City Clerk and its official seal to be affixed hereto or imprinted hereon. CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds of the issue described in the within -mentioned Ordinance. Registration Date: UMB BANK, N.A., Paying Agent Authorized Signatory FEW CITY OF JEFFERSON, MISSOURI In Mayor Carrie Tergin (SEAL) ATTEST: City Clerk ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto Print or Type Name, Address and Social Security Number or other Taxpayer Identification Number of Transferee the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints agent to transfer the within Bond on the Bond Register kept by the Paying Agent for the registration thereof, with full power of substitution in the premises. Dated: A-5 NOTICE: The signature to this assignment must correspond with the name of the Registered Owner as it appears upon the face of the within Bond in every particular. Signature Guaranteed By: (Name of Eligible Guarantor Institution as defined by SEC Rule 17 Ad -15 (17 CFR 240.17 Ad -15)) or such other similar rule as Paying Agent deems applicable) By: Title: LEGAL OPINION The following is a true and correct copy of the approving legal opinion of Gilmore & Bell, P.C., Bond Counsel, which was dated and issued as of the date of original issuance and delivery of the Bonds: GILMORE & BELL, P.C. 2405 Grand Boulevard Suite 1100 Kansas City, Missouri 64108 o EXHIBIT B TO ORDINANCE FORM OF CONTINUING DISCLOSURE UNDERTAKING Gilmore & Bell, P.C. Draft v2 — June 29, 2020 CONTINUING DISCLOSURE UNDERTAKING This CONTINUING DISCLOSURE UNDERTAKING dated as of August 27, 2020 (this "Continuing Disclosure Undertaking"), is executed and delivered by CITY OF JEFFERSON, MISSOURI (the "Issuer"). RECITALS 1. This Continuing Disclosure Undertaking is executed and delivered by the Issuer in connection with the issuance by the Issuer of $[Principal Amount] Sewerage System Refunding Revenue Bonds, Series 2020 (the "Bonds"), pursuant to an Ordinance adopted by the governing body of the Issuer (the "Ordinance"). 2. The Issuer is entering into this Continuing Disclosure Undertaking for the benefit of the Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"). The Issuer is the only "obligated person" with responsibility for continuing disclosure hereunder. The Issuer covenants and agrees as follows: Section 1. Definitions. In addition to the definitions set forth in the Ordinance, which apply to any capitalized term used in this Continuing Disclosure Undertaking unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the Issuer pursuant to, and as described in, Section 2 of this Continuing Disclosure Undertaking. "Beneficial Owner" means any registered owner of any Bonds and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Business Day" means a day other than (a) a Saturday, Sunday or legal holiday, (b) a day on which banks located in any city in which the principal office or designated payment office of the paying agent or the Dissemination Agent is located are required or authorized by law to remain closed, or (c) a day on which the Securities Depository or the New York Stock Exchange is closed. "Dissemination Agent" means any entity designated in writing by the Issuer to serve as dissemination agent pursuant to this Continuing Disclosure Undertaking and which has filed with the Issuer a written acceptance of such designation. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of (a) or (b) in this definition; provided however, the term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. "Fiscal Year" means the 12 -month period beginning on November 1 and ending on October 31 or any other 12 -month period selected by the Issuer as the Fiscal Year of the Issuer for financial reporting purposes. "Material Events" means any of the events listed in Section 3 of this Continuing Disclosure Undertaking. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the Rule. "Participating Underwriter" means any of the original underwriter(s) of the Bonds required to comply with the Rule in connection with the offering of the Bonds. Section 2. Provision of Annual Reports. (a) The Issuer shall, not later than April 30th immediately following the end of the Issuer's Fiscal Year, commencing with the Fiscal Year ending October 31, 2020, file with the MSRB, through EMMA, the following financial information and operating data (the "Annual Report"): (1) The audited financial statements of the Issuer for the prior Fiscal Year, prepared in accordance with accounting principles described in the notes to the financial statements contained in Appendix B to the final Official Statement related to the Bonds. If audited financial statements are not available by the time the Annual Report is required to be provided pursuant to this Section, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement relating to the Bonds, and the audited financial statements shall be provided in the same manner as the Annual Report promptly after they become available. (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement related to the Bonds, as described in Exhibit A, in substantially the same format contained in the final Official Statement with such adjustments to formatting or presentation determined to be reasonable by the Issuer. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been provided to the MSRB and are available through EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB on EMMA. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided 2 in this Section; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3, and the Annual Report deadline provided above shall automatically become the last day of the sixth month after the end of the Issuer's new fiscal year. (b) The Annual Report shall be filed with the MSRB in such manner and format as is prescribed by the MSRB. Section 3. Reporting of Material Events. Not later than 10 Business Days after the occurrence of any of the following events, the Issuer shall give, or cause to be given to the MSRB, through EMMA, notice of the occurrence of any of the following events with respect to the Bonds ("Material Events"): (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the obligated person; (13) the consummation of a merger, consolidation, or acquisition involving the obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of the trustee, if material; (15) incurrence of a Financial Obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties. If the Issuer has not submitted the Annual Report to the MSRB by the date required in Section 2(a), the Issuer shall send a notice to the MSRB, in substantially the form attached hereto as Exhibit B, of the failure of the Issuer to file on a timely basis the Annual Report, which notice shall be given by the Issuer in accordance with this Section 3. Section 4. Termination of Reporting Obligation. The Issuer's obligations under this Continuing Disclosure Undertaking shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If the Issuer's obligations under this Continuing Disclosure Undertaking are assumed in full by some other entity, such person shall be responsible for compliance with this Continuing Disclosure Undertaking in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility hereunder. If such termination or substitution occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3. Section 5. Dissemination Agents. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Continuing Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Continuing Disclosure Undertaking. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Continuing Disclosure Undertaking, the Issuer may amend this Continuing Disclosure Undertaking and any provision of this Continuing Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Continuing Disclosure Undertaking. In the event of any amendment or waiver of a provision of this Continuing Disclosure Undertaking, the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (1) notice of such change shall be given in the same manner as for a Material Event under Section 3, and (2) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this Continuing Disclosure Undertaking shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Continuing Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that required by this Continuing Disclosure Undertaking. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that specifically required by this Continuing Disclosure Undertaking, the Issuer shall have no obligation under this Continuing Disclosure Undertaking to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Default. If the Issuer fails to comply with any provision of this Continuing Disclosure Undertaking, any Participating Underwriter or any Beneficial Owner of the Bonds may take 4 such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under this Continuing Disclosure Undertaking. A default under this Continuing Disclosure Undertaking shall not be deemed an event of default under the Ordinance or the Bonds, and the sole remedy under this Continuing Disclosure Undertaking in the event of any failure of the Issuer to comply with this Continuing Disclosure Undertaking shall be an action to compel performance. Section 9. Beneficiaries. This Continuing Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Participating Underwriter, and the Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Section 10. Severability. If any provision in this Continuing Disclosure Undertaking, the Ordinance or the Bonds shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 11. Electronic Transactions. The arrangement described herein may be conducted and related documents may be sent, received, or stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 12. Governing Law. This Continuing Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State of Missouri. [Remainder of this page intentionally left blank.] E IN WITNESS WHEREOF, the Issuer has caused this Continuing Disclosure Undertaking to be executed as of the day and year first above written. Continuing Disclosure Undertaking Sewerage System Refunding Revenue Bonds, Series 2020 0 CITY OF JEFFERSON, MISSOURI By: Title: Mayor EXHIBIT A TO CONTINUING DISCLOSURE UNDERTAKING FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The operating data in the sections and tables contained in the final Official Statement relating to the Bonds(generally described as follows: A. All of the tables under "FINANCIAL INFORMATION." B. The tables under "HISTORY AND OPERATION OF THE SYSTEM." C. The information contained in the table "Historical Debt Service Coverage" under "FINANCIAL INFORMATION CONCERNING THE SYSTEM" for the most recently ended fiscal year. Continuing Disclosure Undertaking Sewerage System Refunding Revenue Bonds, Series 2020 Exhibit A EXHIBIT B TO CONTINUING DISCLOSURE UNDERTAKING FORM OF FAILURE TO FILE NOTICE Event Notice Pursuant to SEC Rule 15c2-12(b)(5)(C) Issuer/Obligated Person: City of Jefferson, Missouri Issues to which this Notice relates: Sewerage System Refunding Revenue Bonds, Series 2020 CUSIP Numbers for Issue to which this Notice relates: Maturity Date CUSIP Number Event Reported: Failure to Timely File Annual Financial Information/Audited Financial Statements The Obligated Person did not timely file its operating data for the fiscal year ended October 31, 20_. Such operating data [*will be*] [*was*] filed with the MSRB through EMMA on 120. The Obligated Person did not timely file its audited financial statements for the fiscal year ended October 31, 20 Such audited financial statements [*will be*] [*were*] filed with the MSRB through EMMA on 520 The information contained in this Notice has been submitted by the Obligated Person pursuant to contractual undertakings the Obligated Person made in accordance with SEC Rule 15c2-12. Nothing contained in the undertaking or this Notice is, or should be construed as, a representation by the Obligated Person that the information included in this Notice constitutes all of the information that may be material to a decision to invest in, hold or dispose of any of the securities listed above, or any other securities of the Obligated Person. For additional information, contact: Margaret Mueller, Director of Finance City of Jefferson, Missouri 320 E. McCarty Street Jefferson City, Missouri 65101 (573) 645-6435 Date Submitted: [Date] Continuing Disclosure Undertaking Sewerage System Refunding Revenue Bonds, Series 2020 CITY OF JEFFERSON, MISSOURI Exhibit B EXHIBIT C TO ORDINANCE FORM OF CERTIFICATE OF FINAL TERMS $[Principal Amount] CITY OF JEFFERSON, MISSOURI SEWERAGE SYSTEM REFUNDING REVENUE BONDS SERIES 2020 CERTIFICATE OF FINAL TERMS City of Jefferson, Missouri Jefferson City, Missouri Ladies and Gentlemen: July 20, 2020] The undersigned, [ ] (the "Purchaser"), hereby offers to purchase from the City of Jefferson, Missouri (the "City") $[Principal Amount] aggregate principal amount of City of Jefferson, Missouri Sewerage System Refunding Revenue Bonds, Series 2020 (the "Bonds") to be issued by the City under and pursuant to an ordinance passed by the City Council of the City on July 20, 2020 (the "Bond Ordinance"). Upon the terms and conditions of the Official Bid Form, the Notice of Bond Sale and the Preliminary Official Statement, all of which are made a part hereof, the Purchaser hereby agrees to purchase from the City, and the City hereby agrees to sell to the Purchaser, all (but not less than all) of the Bonds at a purchase price of $ (the principal amount of the Bonds plus [net] original issue premium of $ , less an underwriter's discount of $ ). The Bonds shall mature, shall bear interest and shall be subject to redemption as set forth in Schedule I hereto. Very truly yours, By: _ Title: C-1 Accepted and agreed to as of the date first above written: (SEAL) ATTEST By: _ Name: Title: Emily Donaldson City Clerk CITY OF JEFFERSON, MISSOURI By: _ Name Title: C-2 Carrie Tergin Mayor SCHEDULE I TO CERTIFICATE OF FINAL TERMS $[Principal Amount] CITY OF JEFFERSON, MISSOURI SEWERAGE SYSTEM REFUNDING REVENUE BONDS SERIES 2020 1. Original Principal Amount - Sections 101, 201 and 202: ........................... $[Principal Amount]. 2. Maximum Allowable Refunding Amount - Recitals, Sections 101 and 202 (not to exceed the principal amount of the Refunded Bonds ($5,790,000), the interest accruing to the maturity or redemption date of the refunded bonds, any premium which may be due under the terms of the refunded bonds and any amounts necessary for the payment of issuance expenses for such refunding revenue bonds and to fund a debt service reserve fund) :...................$[ ] 3. Purchaser - Sections 101 and 210:........................................................................ [ ] 4. Purchase Price - Sections 101 and 210: $ (Original Principal Amount plus a premium of $ less an underwriting discount of $ ), which underwriting discount is % of the Original Principal Amount 5. Dated Date, Maturity Schedule, Interest Payment Dates and Interest Rates: (a) Interest Payment Dates - Sections 101 and 202: Semiannually on March 1 and September 1, beginning [March 1, 2021]. (b) Dated Date - Sections 101 and 202: ............................................................August 27, 2020 (c) Maturity Schedule and Interest Rates - Section 202: (see table below) SERIAL BONDS Stated Maturity Principal Annual Rate Stated Maturity Principal September 1 Amount of Interest September 1 Amount TERM BONDS(') Maturity Principal Annual Rate September 1(') Amount of Interest C-3 Annual Rate of Interest 'Term Bonds subject to mandatory redemption 6. Optional Redemption — Section 301(a): At the option of the City, the Bonds or portions thereof maturing on September 1, 20_, and thereafter may be called for redemption and payment prior to the Stated Maturity thereof on September 1, 20_, and thereafter in whole or in part at any time in such amounts for each Stated Maturity as shall be determined by the City at the Redemption Price of 100% of the principal amount thereof, plus accrued interest thereon to the Redemption Date. 7. Mandatory Redemption - Section 301(b): (a) Term Bonds maturing September 1, 20_, shall be redeemed and paid as follows: Year Principal September 1 Amount *Final Maturity 8. Deposit of Purchase Price of Bonds - Section 502: The Purchase Price received from the sale of the Bonds in the amount of J shall be deposited simultaneously with the issuance of the Bonds as follows: (a) $[ 1 from the Purchase Price of the Bonds shall be transferred to UMB Bank, N.A., as paying agent for the Refunded Bonds, which will be sufficient to redeem and retire on September 1, 2020, the Refunded Bonds at a redemption price equal to 100% of the principal amount thereof, plus accrued interest thereon to the September 1, 2020, redemption date for the Refunded Bonds. (b) The remaining proceeds received from the Purchase Price of the Bonds in the amount of $[ J shall be deposited with the Paying Agent for the Bonds and shall be disbursed, on the City's behalf, to pay the following costs of issuing the Bonds, promptly upon receipt of invoices therefor, with all remaining amounts being remitted to the City for deposit in the Debt Service Account established for the Bonds: C-4 Payee Gilmore & Bell, P.C. S&P Global Ratings Piper Sandler & Co. MuniHub UMB Bank, N.A. Purpose Bond Counsel fee Rating Agency fee Financial Advisor fee Official Statement/Notice of Sale posting fee Paying Agent Fee (acceptance & first annual fees) Amount CUSIP Global Services CUSIP Fee TOTAL* Maximum amount. Any excess over the invoiced amount shall be remitted to the City and deposited in the Debt Service Account for the Series 2020 Bonds. 9. Compliance with provisions of Section 202(b) of the Ordinance: (a) Original Principal Amount of the Bonds (not to exceed Maximum Allowable Refunding Amount) — Section 202(b)(1): ..................... $ (b) True Interest Cost on the Bonds (not to exceed 3.25% as described in Section 108.170(7), RSMo, as amended) — Section 202(b)(2): .................................... % (c) Weighted Average Maturity on the Bonds (not less than 7.0 years nor more than 10.0 years) — Section 202(b)(3): ............................................................................. % (d) Present Value Savings (not less than 5.75% of the aggregate principal amount on the Refunded Bonds) - Section 202(b)(4): ....................................... $ or % of the principal amount of the Refunded Bonds. (e) Final Stated Maturity of the Bonds (not later than September 1, 2035) — Section 202(b)(5): ................................................................................ September 1, (f) Optional call date for Bonds (not later than September 1, 2030 at a Redemption Price not to exceed 100% of the principal amount thereof plus accrued interest thereon to the Redemption Date) - Section 202(b)(6): ................................................................................................ September 1, 20 C-5 EXHIBIT D TO ORDINANCE FORM OF NOTICE OF BOND SALE Gilmore & Bell, P.C. Draft v3 — June 30, 2020 NOTICE OF BOND SALE $5,800,000 CITY OF JEFFERSON, MISSOURI SEWERAGE SYSTEM REFUNDING REVENUE BONDS SERIES 2020 Bids. Electronic bids for the purchase of $5,800,000* principal amount of Sewerage System Refunding Revenue Bonds, Series 2020 (the "Bonds"), of the City of Jefferson, Missouri (the "City"), herein described, will be received until 10:00 A.M., Central Time, on MONDAY, JULY 20, 2020 (the "Sale Date") All proposals must be submitted electronically through PARITY® as further described herein. No oral or auction bids will be considered. All bids will be read and evaluated at that time and place, and the award of the Bonds, if any, to the successful bidder (the "Successful Bidder") will be approved by the City Council of the City at a regular meeting of the City Council scheduled for 6:00 p.m. on the Sale Date, with the approval of the award to the Successful Bidder to occur no later than 11:59 p.m. on the Sale Date. Pre -Bid Revisions. The City reserves the right to issue a Supplemental Notice of Bond Sale not later than 24 hours prior to the sale date through PARITY and MuniHub ("Supplemental Notice"). If issued, the Supplemental Notice may modify such terms of this Notice of Bond Sale as the City determines, including the date and time of the sale. Any such modifications will supersede the terms as set forth herein. Terms of the Bonds. The Bonds will consist of fully registered bonds in the denomination of $5,000 or any integral multiple thereof. The Bonds will be dated their date of delivery, and will become due in principal installments on September 1 in the years, subject to adjustment as provided herein, as follows: Year (September 1) * Principal Amount 2021 $260,000 2022 270,000 2023 345,000 2024 355,000 2025 365,000 2026 380,000 2027 385,000 2028 400,000 2029 410,000 2030 420,000 2031 425,000 2032 435,000 2033 440,000 2034 450,000 2035 460,000 The Bonds will bear interest from the date thereof at rates to be determined when the Bonds are sold as hereinafter provided, which interest will be payable semiannually on March 1 and September 1 in each year, beginning on March 1, 2021. Preliminary, subject to change. Election to Specify Term Bonds. A bidder may elect to have all or a portion of the Bonds scheduled to mature consecutively issued as one or more term bonds scheduled to mature in the latest of said consecutive years and subject to mandatory redemption requirements consistent with the schedule of serial maturities set forth above, and subject to the bidder making such an election by including such information in the electronic bid submitted via PARITY®. Not less than all the Bonds of a single maturity may be converted to term bonds. Authority, Purpose and Security. The Bonds are being issued pursuant to and in full compliance with the Constitution and statutes of the State of Missouri, including particularly Article VI, Section 27 of the Missouri Constitution, as amended, Chapter 250 of the Revised Statutes of Missouri, as amended, Section 108.140(2) of the Revised Statutes of Missouri, as amended, and ordinance passed by the City Council of the City on July 20, 2020 (the "Bond Ordinance"), for the purpose of (i) providing funds to refund and redeem, on September 1, 2020, a portion of the City's outstanding Taxable Sewerage System Revenue Bonds, Series 2010B (Build America Bonds - Direct Payment)(the "Series 2010B Bonds"), consisting of the Series 2010B Bonds scheduled to mature on September 1, 2025 and thereafter, outstanding in the aggregate principal amount of $5,790,000 (the "Refunded Bonds") and (ii) paying costs and expenses related to the issuance of the Bonds. The City's Series 2010B Bonds scheduled to mature on September 1, 2020, including accrued interest thereon, outstanding in the aggregate principal amount of $225,000 will not be refunded with proceeds of the Bonds and will remain outstanding on the date of issuance of the Bonds. The Bonds are special obligations of the City and are payable solely out of net income and revenues arising from the operation of the City's revenue-producing sewerage system serving the City and its inhabitants (the "System") after providing for the costs of operation and maintenance thereof. The Bonds are on a parity with seven series of the City's outstanding sewerage system revenue bonds, including the portion of the Series 2010B Bonds scheduled to mature on September 1, 2020. The Bonds do not constitute a general obligation of the City and do not constitute an indebtedness of the City within the meaning of any constitutional, charter or statutory provision, limitation or restriction. The Bonds are not payable by and have no recourse to the power of taxation. The Bondowners have no lien on or security interest in any of the physical assets of the City, including the System. All capitalized terms used herein and not otherwise defined herein have the meanings assigned to those terms in the Bond Ordinance. The Bonds are more particularly described in the Preliminary Official Statement dated the date hereof, available from the City's financial advisor, Piper Sandler & Co. (the "Financial Advisor"). This Notice of Bond Sale contains certain information for quick reference only. It is not, and is not intended to be, a summary of the Bonds. Each bidder is required to read the entire Preliminary Official Statement to obtain information essential to making an informed investment decision. All capitalized terms used herein and not otherwise defined herein have the meanings assigned to those terms in the Bond Ordinance. A summary of the Bond Ordinance, including definitions of certain words and terms used herein, in the Preliminary Official Statement and in the Bond Ordinance, is included in Appendix C to the Preliminary Official Statement. Adjustment of Issue Size. In order to properly structure the transaction, the City reserves the right to decrease the total principal amount of the Bonds and increase or decrease the principal amount of any maturity, depending on the purchase price and interest rates bid and the offering prices specified by the Successful Bidder. Such adjustments to the principal amounts may be made by the City in order to properly size the Bond issue for the refunding of the Refunded Bonds. The Successful Bidder may not withdraw its bid for the Bonds or change the interest rates bid as a result of any changes made to the total principal amount of the Bonds or principal of any maturity thereof as described herein, provided that the total principal amount of the Bonds will not be decreased by more than 20%, and that the principal amount of any maturity will not be increased or decreased by more than 20% without the consent of the Successful Bidder. If there is an increase or decrease in the final total principal amount of the Bonds or a change in the schedule of principal payments for the Bonds as described above, the City will notify the Successful Bidder of the Bonds of such increases or decreases by means of telephone, fax or electronic mail transmission, subsequently confirmed in writing, no later than 11:30 A.M., Central Time on the Sale Date. In the event that the maturity amounts of the Bonds are adjusted, the purchase price will be adjusted to ensure that the percentage net compensation (i.e., the percentage resulting -2- from dividing (i) the aggregate difference between the offering price of the Bonds to the public and the price to be paid to the City by (ii) the principal amount of the Bonds) remains constant. Optional Redemption of Bonds Prior to Maturity. At the option of the City, the Bonds maturing on September 1, 2029, and thereafter may be called for redemption and payment prior to maturity on September 1, 2028, and thereafter, in whole or in part at any time at the redemption price of 100% of the principal amount thereof, plus accrued interest thereon to the redemption date. Bonds shall be redeemed only in the principal amount of $5,000 or any integral multiple thereof. When less than all of the Outstanding Bonds are to be redeemed, such Bonds shall be redeemed from the Stated Maturities selected by the City, and Bonds of less than a full Stated Maturity shall be selected by the Paying Agent in $5,000 units of principal amount by lot or in such other equitable manner as the Paying Agent may determine. Submission of Bids. Electronic bids must be submitted via PARITY® in accordance with its Rules of Participation and this Notice of Bond Sale. If provisions of this Notice of Bond Sale conflict with those of PARITY®, this Notice of Bond Sale shall control. Bids for the Bonds must be received before 10:00 A.M. Central Time on the Sale Date. Neither the City nor the Financial Advisor, shall be responsible for any failure, misdirection, delay or error in the means of transmission selected by the bidder. PARITY®. All proposals must be submitted electronically through PARITY®, and no other proposals will be considered. Information about the electronic bidding services of PARITY® may be obtained from i - Deal LLC at 1359 Broadway, 2nd Floor, New York, New York 10018, Phone No. (212) 849-5000 and from the following web site: www.newissuehome.i-deal.com. The City shall not be responsible for proper operation of, or have any liability for, any delays, interruptions, or damages caused by the use of the PARITY® system. The City is using the PARITY system as a communication mechanism, and not as the City's agent, to conduct the electronic bidding for the Bonds. The use of the PARITY® system shall be at the bidder's risk and expense, and the City and its agents shall have no liability with respect thereto. The bids must be received as provided herein and by the time specified. The City is not bound by any advice or determination of PARITY® to the effect that any particular bid complies with the terms of this Notice of Bond Sale and the bid specifications. An electronic bid made through the facilities of PARITY® shall be deemed an irrevocable offer to purchase the Bonds on the terms provided in this Notice of Bond Sale, and such bid shall be binding upon the bidder as if made by a signed and sealed bid delivered to the City. Conditions of Bids. Proposals will be received on all of the Bonds bearing such rate or rates of interest as may be specified by the bidders, subject to the following conditions: (a) the same rate shall apply to all Bonds of the same maturity; (b) each interest rate specified shall be a multiple of 1/8 or 1/20 of 1%, with no zero coupon bonds allowed; (c) no supplemental interest payments will be authorized; (d) the Bonds shall be sold by the City for a price not less than 99.00% or more than 108.00% of the total principal amount thereof; and (e) the interest rate on each maturity of the Bonds shall not exceed 4.00%. Each bid shall specify the total interest cost during the life of the Bonds on the basis of such bid, the premium or discount, if any, offered by the bidder, the net interest cost (expressed in dollars) on the basis of such bid and the TIC (as hereinafter defined) on the basis of such bid. Each bidder agrees that, if it is awarded the Bonds, it will provide to the City the certification as to Initial Offering Prices (defined herein) described under the caption "Establishment of Issue Price" in this Notice of Bond Sale. Basis of Award. The Bonds will be awarded to the bidder whose bid will result in the lowest "true interest cost" ("TIC"), determined as follows: the TIC is the discount rate (expressed as a per -annum percentage rate) that, when used in computing the present value of all payments of principal and interest to be paid on the Bonds, from the scheduled payment dates back to the dated date of the Bonds, produces an amount equal to the price bid, including premium or discount, if any. Payments of principal and interest on the Bonds shall be based on the principal amounts set forth in this Notice of Bond Sale and the interest rates specified by each bidder. Present value shall be computed on the basis of semiannual compounding and a 360 -day year of twelve 30 -day months. No bidder shall be awarded the Bonds unless its bid shall be in compliance with the other terms and conditions of this Notice of Bond Sale. The City or its Financial Advisor will verify the TIC -3- based on the bids received. In the event that two or more bidders offer bids at the same lowest TIC, the City shall determine which bid, if any, shall be accepted, and its determination shall be final. In the event the TIC specified in the bid does not correspond to the bid price and the interest rates specified, the bid price and the interest rates specified will govern and the TIC will be adjusted accordingly. The City reserves the right to waive irregularities and to reject any or all bids. Good Faith Deposit. The Successful Bidder is required to submit a good faith deposit in the amount of $100,000 (the "Deposit") to the City in the form of an electronic transfer of federal reserve funds, immediately available for use by the City, as instructed by the City or its Financial Advisor, no later than 2:00 P.M., Central Time, on the day the proposals are received. If the Deposit is not received by such time, the City may terminate its proposed award of the Bonds to such Successful Bidder, and the City may contact the bidder with the next lowest TIC and offer said bidder the opportunity to become the Successful Bidder. The Deposit of the Successful Bidder shall constitute a good faith deposit and shall be retained by the City to insure performance of the requirements of the sale by the Successful Bidder. In the event the Successful Bidder shall fail to comply with the terms of its bid, the Deposit will be forfeited as full and complete liquidated damages. Upon delivery of the Bonds, the Deposit will be applied to the purchase price of the Bonds or shall be returned to the Successful Bidder, but no interest shall be allowed thereon. If a bid is accepted but the City fails to deliver the Bonds to the bidder in accordance with the terms and conditions of this Notice of Bond Sale, the Deposit shall be returned to the Successful Bidder. Certificate of Final Terms. Prior to the delivery of the Bonds, the Successful Bidder will be required to execute and enter into with the City, a Certificate of Final Terms setting out the final terms of the Bonds, including the principal amounts, interest rates and pricing per maturity and the redemption provisions. Delivery and Payment. The City will deliver the Bonds, properly prepared, executed and registered, without cost to the Successful Bidder on or about August 27, 2020 (the "Closing Date"), in book -entry form only through the facilities of The Depository Trust Company in New York, New York. The Successful Bidder will also be furnished with a certified transcript of the proceedings evidencing the authorization and issuance of the Bonds and the usual closing documents, including a certificate that there is no litigation pending or threatened at the time of delivery of the Bonds affecting their validity and a certificate regarding the completeness and accuracy of the Official Statement. Payment for the Bonds shall be made in federal reserve funds, immediately available for use by the City. Establishment of Issue Price. The Successful Bidder shall assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at Closing an "issue price" or similar certificate setting forth the reasonably expected Initial Offering Price (hereinafter defined) to the Public or the sales price or prices of the Bonds, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit A, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Successful Bidder, the City and Gilmore & Bell, P.C., Kansas City, Missouri, as Bond Counsel to the City ("Bond Counsel"). All actions to be taken by the City under this Notice of Bond Sale to establish the issue price of the Bonds may be taken on behalf of the City by the City's Financial Advisor identified herein and any notice or report to be provided to the City may be provided to the City's Financial Advisor. The City intends that the provisions of Treasury Regulation Section 1.148-1(f)(3)(i) (defining "competitive sale" for purposes of establishing the issue price of the Bonds) will apply to the initial sale of the Bonds (the "Competitive Sale Requirements") because: (i) the City shall disseminate this Notice of Bond Sale to potential Underwriters in a manner that is reasonably designed to reach potential Underwriters; (ii) all bidders shall have an equal opportunity to bid; -4- (iii) the City may receive bids from at least three Underwriters of municipal bonds who have established industry reputations for underwriting new issuances of municipal bonds; and (iv) the City anticipates awarding the sale of the Bonds to the bidder who submits a firm offer to purchase the Bonds at the highest price (or lowest interest cost), as set forth in this Notice of Bond Sale. Any bid submitted pursuant to this Notice of Bond Sale shall be considered a firm offer for the purchase of the Bonds, as specified in the bid. In the event that the Competitive Sale Requirements are not satisfied, the City shall so advise the Successful Bidder. The City may determine to treat (i) the price at which the first 10% of a maturity of the Bonds (the "10% Test") is sold to the Public as the issue price of that maturity and/or (ii) the Initial Offering Price to the Public as of the Sale Date of any maturity of the Bonds as the issue price of that maturity (the "Hold -The -Offering -Price Rule"), in each case applied on a maturity -by -maturity basis (and if different interest rates apply within a maturity, to each separate CUSIP number within that maturity). The Successful Bidder shall advise the City if any maturity of the Bonds satisfies the 10% Test as of the date and time of the award of the Bonds. The City shall promptly advise the Successful Bidder, at or before the time of award of the Bonds, which maturities (and if different interest rates apply within a maturity, which separate CUSIP number within that maturity) of the Bonds shall be subject to the 10% Test or shall be subject to the Hold -The - Offering -Price Rule. Bids will not be subject to cancellation in the event that the City determines to apply the Hold -The -Offering -Price Rule to any maturity of the Bonds. Bidders should prepare their bids on the assumption that some or all of the maturities of the Bonds will be subject to the Hold -The -Offering -Price Rule in order to establish the issue price of the Bonds. By submitting a bid, the Successful Bidder shall (i) confirm that the Underwriters have offered or will offer the Bonds to the Public on or before the date of award at the offering price or prices (the "Initial Offering Price"), or at the corresponding yield or yields, set forth in the bid submitted by the Successful Bidder and (ii) agree, on behalf of the Underwriters participating in the purchase of the Bonds, that the Underwriters will neither offer nor sell unsold Bonds of any maturity to which the Hold -The -Offering -Price Rule shall apply to any person at a price that is higher than the Initial Offering Price to the Public during the period starting on the Sale Date and ending on the earlier of the following: (i) the close of the fifth (5th) business day after the Sale Date; or (ii) the date on which the Underwriters have sold at least 10% of that maturity of the Bonds to the Public at a price that is no higher than the Initial Offering Price to the Public. The Successful Bidder shall promptly advise the City when the Underwriters have sold 10% of that maturity of the Bonds to the Public at a price that is no higher than the Initial Offering Price to the Public, if that occurs prior to the close of the fifth (5th) business day after the Sale Date. If the Competitive Sale Requirements are not satisfied, then until the 10% Test has been satisfied as to each maturity of the Bonds, the Successful Bidder agrees to promptly report to the City the prices at which the unsold Bonds of that maturity have been sold to the Public. At or promptly after the award of the Bonds, the Successful Bidder shall report to the City the price at which it has sold to the Public the Bonds of each maturity sufficient to satisfy the 10% Test. If as of the award of the Bonds the 10% Test has not been satisfied as to any maturity of the Bonds, the Successful Bidder agrees to promptly report to the City the prices at which it subsequently sells Bonds of that maturity to the Public until the 10% Test is satisfied. In either case, if Bonds constituting the first 10% of a certain maturity are sold at different prices, the Successful Bidder shall report to the City the prices at which Bonds of such maturity are sold until the Successful Bidder sells 10% of the Bonds -5- of such maturity at a single price. The Successful Bidder's reporting obligation shall continue as set forth above, whether or not the Closing Date has occurred. The City acknowledges that, in making the representation set forth above, the Successful Bidder will rely on (i) the agreement of each Underwriter to comply with the Hold -The -Offering -Price Rule, as set forth in an agreement among Underwriters and the related pricing wires, (ii) in the event a selling group has been created in connection with the initial sale of the Bonds to the Public, the agreement of each dealer who is a member of the selling group to comply with the Hold -The -Offering -Price Rule, as set forth in a selling group agreement and the related pricing wires, and (iii) in the event that an Underwriter is a party to a third -party distribution agreement that was employed in connection with the initial sale of the Bonds to the Public, the agreement of each broker-dealer that is a party to such agreement to comply with the Hold -The -Offering -Price Rule, as set forth in the third -party distribution agreement and the related pricing wires. The City further acknowledges that each Underwriter shall be solely liable for its failure to comply with its agreement regarding the Hold -The -Offering -Price Rule and that no Underwriter shall be liable for the failure of any other Underwriter, or of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third -party distribution agreement to comply with its corresponding agreement regarding the Hold -The - Offering -Price Rule as applicable to the Bonds. By submitting a bid, each bidder confirms that: (i) any agreement among Underwriters, any selling group agreement and each third -party distribution agreement (to which the bidder is a party) relating to the initial sale of the Bonds to the Public, together with the related pricing wires, contains or will contain language obligating each Underwriter, each dealer who is a member of the selling group, and each broker-dealer that is a party to such third -party distribution agreement, as applicable, to (A) report the prices at which it sells to the Public the unsold Bonds of each maturity allotted to it until it is notified by the Successful Bidder that either the 10% Test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the Public and (B) comply with the Hold -The -Offering -Price Rule, if applicable, in each case if and for so long as directed by the Successful Bidder and as set forth in the related pricing wires, and (ii) any agreement among Underwriters relating to the initial sale of the Bonds to the Public, together with the related pricing wires, contains or will contain language obligating each Underwriter that is a party to a third -party distribution agreement to be employed in connection with the initial sale of the Bonds to the Public to require each broker- dealer that is a party to such third -party distribution agreement to (A) report the prices at which it sells to the Public the unsold Bonds of each maturity allotted to it until it is notified by the Successful Bidder or such Underwriter that either the 10% Test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the Public and (B) comply with the Hold -The -Offering -Price Rule, if applicable, in each case if and for so long as directed by the Successful Bidder or such Underwriter and as set forth in the related pricing wires. Sales of any Bonds to any person that is a Related Party to an Underwriter shall not constitute sales to the Public for purposes of this Notice of Bond Sale. Further, for purposes of this Notice of Bond Sale: (i) "Public" means any person other than an Underwriter or a Related Party, (ii) "Underwriter" means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a third -party distribution agreement participating in the initial sale of the Bonds to the Public), (iii) a purchaser of any of the Bonds is a "Related Party" to an Underwriter if the Underwriter and the purchaser are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both M entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and (iv) "Sale Date" means the date that the Bonds are awarded by the City to the Successful Bidder. The Successful Bidder shall provide such Initial Offering Prices to the City and its Financial Advisor no later than 11:30 A.M., Central Time, on the Sale Date. Legal Opinion. The Bonds will be sold subject to the approving legal opinion of Bond Counsel, which opinion will be furnished and paid for by the City and printed on the Bonds and delivered to the Successful Bidder when the Bonds are delivered. Said opinion will also include the opinion of Bond Counsel relating to the exclusion of the interest on the Bonds from gross income for federal and Missouri income tax purposes. Reference is made to the Preliminary Official Statement for further discussion of federal and Missouri income tax matters relating to the interest on the Bonds. Bond Rating. S&P Global Ratings, a division of Standard & Poor's Financial Services LLC ("S&P"), has assigned the Bonds a rating of "A+", which reflects its evaluation of the investment quality of the Bonds. Any explanation as to the significance of the rating may be obtained only from the rating agency. The rating is not a recommendation to buy, sell, or hold the Bonds, and such rating may be subject to revision or withdrawal at any time by the rating agency. Any downward revision or withdrawal of the rating may adversely affect the market price of the Bonds. Place of Payment. Principal will be payable upon presentation and surrender of the Bonds by the registered owners thereof at the payment office of UMB Bank, N.A., St. Louis, Missouri (the "Paying Agent"). Interest shall be paid to the registered owners of the Bonds as shown on the bond register at the close of business on the Record Date for such interest by check or draft mailed by the Paying Agent to the address of such Registered Owners shown on the Bond Register or, in the case of an interest payment to the Securities Depository or any Registered Owner, by electronic transfer to such Registered Owner upon written notice signed by such Registered Owner and given to the Paying Agent not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the bank (which shall be in the continental United States), address, ABA routing number and account number to which such Registered Owner wishes to have such transfer directed, and an acknowledgment that an electronic transfer fee may be applicable. Book -Entry Only System and Blue Sky. The Bonds will initially be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York, to which payments of principal of and interest on the Bonds will be made. Individual purchases of Bonds will be made in book -entry form only. Purchasers will not receive certificates representing their interest in Bonds purchased. It shall be the obligation of the Successful Bidder to furnish to DTC an underwriter's questionnaire. It shall be the obligation of the Successful Bidder to qualify the Bonds, if such qualification is necessary, in the jurisdictions in which it intends to reoffer the Bonds. Preliminary Official Statement and Official Statement. The City has prepared a Preliminary Official Statement dated July r], 2020, "deemed final" by the City except for the omission of certain information as provided by Securities and Exchange Commission Rule 15c2-12, electronic copies of which may be obtained from the Financial Advisor as provided herein. Upon the sale of the Bonds, the City will adopt the final Official Statement and will furnish the Successful Bidder with an electronic copy of the final -7- Official Statement within seven business days of the acceptance of the Successful Bidder's proposal in order to comply with Rule 15c2 -12(b)(4) of the Securities and Exchange Commission and Rule G-32 of the Municipal Securities Rulemaking Board (collectively, the "Rules"). The City's acceptance of the Successful Bidder's proposal for the purchase of the Bonds, including electronic acceptance through PARITY®, shall constitute a contract between the City and the Successful Bidder for purposes of said Rules. Continuing Disclosure. The City covenants and agrees to enter into a continuing disclosure undertaking (the "Continuing Disclosure Undertaking") to provide ongoing disclosure about the City for the benefit of the bondholders on or before the date of delivery of the Bonds as required by Section (b)(5)(i) of Rule 15c2-12 of the Securities and Exchange Commission. See the Preliminary Official Statement for statements about the City's compliance with undertakings previously entered into by the City pursuant to Rule 15c-2-12 and for the form of such Continuing Disclosure Undertaking. CUSIP Numbers. It is anticipated that CUSIP numbers will be assigned to and printed on the Bonds and the Successful Bidder agrees by submitting its bid proposal to pay the costs thereof. In no event will the City, Bond Counsel or the Financial Advisor be responsible for the review of or express any opinion that the CUSIP numbers are correct. Incorrect CUSIP numbers on the Bonds shall not be cause for the Successful Bidder to refuse to accept delivery of the Bonds. Additional Information. Additional information regarding the Bonds may be obtained from the Financial Advisor, Piper Sandler & Co., 11635 Rosewood Street, Leawood, Kansas, 66211, Attention: Todd Goffoy, Office: (913) 345-3373, Mobile: (913) 201-3270, Email: Todd.Goffoygpsc.corn or Matt Courtney, Office: (913) 345-3355, Email: Matthew.T.Courtneykpsc.com. DATED this th day of July, 2020. ATTEST: City Clerk 10 CITY OF JEFFERSON, MISSOURI By: Mayor EXHIBIT A TO NOTICE OF BOND SALE FORM OF UNDERWRITER'S RECEIPT FOR BONDS AND REPRESENTATIONS $[Principal Amount] CITY OF JEFFERSON, MISSOURI SEWERAGE SYSTEM REFUNDING REVENUE BONDS SERIES 2020 The undersigned, on behalf of (the "Original Purchaser"), as the Original Purchaser and an Underwriter of the above-described bonds (the "Bonds"), being issued on the date of this Certificate by the City of Jefferson, Missouri (the "City"), certifies and represents as follows: 1. Receipt for Bonds. The Original Purchaser acknowledges receipt on the date hereof of all of the Bonds, consisting of fully registered Bonds numbered from 1 consecutively upward in denominations of $5,000 or integral multiples thereof in a form acceptable to the Original Purchaser. Each of said Bonds has been signed by the manual or facsimile signature of the Mayor of the City and attested by the manual or facsimile signature of the City Clerk of the City, with the City's official seal affixed or imprinted thereon, and has been authenticated by the manual signature of an authorized officer or signatory of UMB Bank, N.A., as the paying agent for the Bonds. 2. Issue Price. (a) Public Offering. The Original Purchaser offered all of the Bonds to the Public (as defined below) in a bona fide initial offering. (b) Reasonably Expected Initial Offering Price. As of the sale date of the Bonds (July 20, 2020), the reasonably expected initial offering prices of the Bonds to the Public by the Original Purchaser are the prices listed in Schedule 1 (the "Expected Offering Prices"). The Expected Offering Prices are the prices for the Maturities of the Bonds used by the Original Purchaser in formulating its bid to purchase the Bonds (c) Defined Terms. For purposes of this paragraph 2, the following definitions apply: (i) The term "Maturity" means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. (ii) The term "Public" means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" is defined in U.S. Treasury Regulation § 1.150-1(b) which generally provides that the term related party means any two or more persons who have a greater than 50 percent common ownership, directly or indirectly. (iii) The term "Underwriter" means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a third - party distribution agreement participating in the initial sale of the Bonds to the Public). Exhibit A - 1 ALTERNATIVE LANGUAGE IF COMPETITIVE SALES REQUIREMENTS ARE NOT MET: 2. Issue Price. For purposes of this paragraph 2, the following definitions shall apply: "Holding Period" means with respect to each Undersold Maturity the period beginning on the Sale Date and ending on the earlier of the following: (1) the close of the fifth (5t') business day after the Sale Date; or (2) the date and time at which the Purchaser has sold at least 10% of that Undersold Maturity of the Bonds to the Public at one or more prices that are no higher than the Initial Offering Price. "Initial Offering Price" means the price listed on Schedule 1 for each Maturity. "Maturity" means Bonds with the same credit and payment terms; Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. "Public" means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriting Firm or a related party to an Underwriting Firm. An Underwriting Firm and a person are related if it and the person are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other). "Purchaser" means Underwriting Firm]. "Sale Date" means July 20, 2020. [on its own behalf and as representative of each "Undersold Maturity" or "Undersold Maturities" means any Maturity for which less than 10% of the principal amount of Bonds of that Maturity were sold as of the Effective Time. "Underwriting Firm" means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) of this definition to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a third -party distribution agreement participating in the initial sale of the Bonds to the Public). The Purchaser represents as follows: (a) Attached as Attachment A is a copy of the pricing wire or similar communication used to communicate the Initial Offering Price of each Maturity to the Public. Exhibit A - 2 (b) As of the Sale Date, all the Bonds were the subject of an initial offering to the Public. (c) As of the Sale Date, none of the Bonds were sold to any person at a price higher than the Initial Offering Price for that Maturity. (d) [[As of the Sale Date, there were no Undersold Maturities.][*For any Undersold Maturity, during the Holding Period each Underwriting Firm did not offer nor sell Bonds of the Undersold Maturity to the Public at a price that is higher than the respective Initial Offering Price for that Undersold Maturity.*] [*(e) Any separate agreement among any Underwriting Firm related to the sale of an Undersold Maturity during the Holding Period contained the agreement referenced in (d) above.*] The representations set forth in this Certificate are limited to factual matters only. Nothing in this Certificate represents the Original Purchaser's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the certifications contained herein will be relied upon by the City in executing and delivering the Federal Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds and by Gilmore & Bell, P.C., as Bond Counsel to the City, in rendering its opinion relating to the exclusion from federal gross income of the interest on the Bonds and other federal income tax advice that it may give to the City from time to time relating to the Bonds. [ORIGINAL PURCHASER] By: Title: Exhibit A - 3 Schedule 1 Expected Offering Prices/Initial Offering Prices {Attach Initial Offering Prices Used in Formulating Bid} Exhibit A - 4 [**ATTACHMENTS IF COMPETITIVE SALES REQUIREMENTS ARE NOT MET**] Attachment A Initial Offering Price Documentation [Attach Pricing Wire or Other Offering Price Documentation] Exhibit A - 5 EXHIBIT E TO ORDINANCE FORM OF PAYING AGENT AGREEMENT REGISTRAR / PAYING AGENT AGREEMENT THIS AGREEMENT is made and entered into this 27L' day of August 2020 by and between the City of Jefferson, Missouri Sewerage System, hereinafter called "ISSUER", and UMB Bank, N.A., a national banking association with its principal payment office in Kansas City, Missouri, in its capacity as paying agent and registrar, hereinafter called the "AGENT". WHEREAS, the ISSUER has issued, or is currently in the process of issuing, pursuant to an ordinance, resolution, order, final terms certificate, notice of sale or other authorizing instrument of the governing body of the ISSUER, hereinafter collectively called the "Bond Document" certain bonds, certificates, notes and/or other debt instruments, more particularly described as $5,800,000 City of Jefferson, Missouri, Sewerage System Refunding Revenue Bonds, hereinafter called the "Bonds"; and WHEREAS, pursuant to the Bond Document, the ISSUER has designated and appointed the AGENT as agent for the purpose of performing registrar and paying agent services, to wit: establishing and maintaining a record of the owners of the Bonds, effecting the transfer of ownership of the Bonds in an orderly and efficient manner, making payments of principal and interest when due pursuant to the terms and conditions of the Bonds, and for other related purposes; and WHEREAS, the AGENT has represented that it possesses the necessary qualifications and maintains the necessary facilities to properly perform the required services as such registrar and paying agent and is willing to serve in such capacities for the ISSUER; NOW THEREFORE, in consideration of mutual promises and covenants herein contained the parties agree as follows: 1. The ISSUER has designated and appointed the AGENT as registrar and paying agent of the Bonds pursuant to the Bond Document, and the AGENT has accepted such appointment and agrees to provide the services set forth therein and herein. 2. The ISSUER agrees to deliver or cause to be delivered to the AGENT a transcript of the proceedings related to the Bonds to contain the following documents: (a) A copy of the Bond Document, and the consent or approval of any other governmental or regulatory authority, required by law to approve or authorize the issuance of the Bonds; (b) A written opinion by an attorney or by a firm of attorneys with a nationally recognized standing in the field of municipal bond financing, and any supporting or supplemental opinions, to the effect that the Bonds and the Bond Document have been duly authorized and issued by, are legally binding upon and are enforceable against the ISSUER; (c) A closing certificate of the ISSUER, a closing certificate and/or receipt of the purchaser(s) of the Bonds, and such other documents related to the issuance of the Bonds as the Agent reasonably deems necessary or appropriate; and (d) Unless Paragraph 20 hereof is applicable, in addition to the transcript of proceedings a reasonable supply of blank Bond certificates bearing the manual or facsimile signatures of officials of the ISSUER authorized to sign certificates and, if required by the Bond Document, impressed with the ISSUER's seal or facsimile thereof, to enable the AGENT to provide Bond Certificates to the holders of the Bonds upon original issuance or the transfer thereof. The foregoing documents may be subject to the review and approval of legal counsel for the AGENT. Furthermore, the ISSUER shall provide to the AGENT prompt written notification of any future amendment or change in respect of any of the foregoing, together with such documentation as the AGENT reasonably deems necessary or appropriate. 3. Unless Paragraph 20 hereof is applicable, Bond certificates provided by the ISSUER shall be printed in a manner to minimize the possibility of counterfeiting. This requirement shall be deemed satisfied by use of a certificate format meeting the standard developed by the American National Standards Committee or in such other format as the AGENT may accept by its authentication thereof. The AGENT shall have no responsibility for the form or contents of any such certificates. The ISSUER shall, while any of the Bonds are outstanding, provide a reasonable supply of additional blank certificates at any time upon request of the AGENT. All such certificates shall satisfy the requirements set forth in Paragraphs 2(d) and 3. 4. The AGENT shall initially register and authenticate, pursuant to instructions from the ISSUER and/or the initial purchaser(s) of the Bonds, one or more Bonds and shall enter into a Bond registry record the certificate number of the Bond and the name and address of the owner. The AGENT shall maintain such registry of owners of the Bonds until all of the Bonds have been fully paid and surrendered. The initial owner of each Bond as reflected in the registry of owners shall not be changed except upon transfers of ownership and in accordance with procedures set forth in the Bond Document or this Agreement. 5. Transfers of ownership of the Bonds shall be made by the AGENT as set forth in the Bond Document. Absent specific guidelines in the Bond Document, transfers of ownership of the Bonds shall be made by the AGENT only upon delivery to the AGENT of a properly endorsed Bond or of a Bond accompanied by a properly endorsed transfer instrument, accompanied by such documents as the AGENT may deem necessary to evidence the authority of the person making the transfer, and satisfactory evidence of compliance with all applicable laws relating to the collection of taxes. The AGENT reserves the right to refuse to transfer any Bond until it is satisfied that each necessary endorsement is genuine and effective, and for that purpose it may require guarantees of signatures in accordance with applicable rules of the Securities and Exchange Commission and the standards and procedures of the AGENT, together with such other assurances as the AGENT shall deem necessary or appropriate. The AGENT shall incur no liability for delays in registering transfers as a result of inquiries into adverse claims or for the refusal in good faith to make transfers which it, in its judgment, deems improper or unauthorized. In all cases, the AGENT need impose no greater requirements regarding documentation and evidence, nor make greater inquiry, than would be required by prevailing rules of the Securities Transfer Association, Inc. Upon presentation and surrender of any duly registered Bond and satisfaction of the transferability requirements, the AGENT shall (a) cancel the surrendered Bond; (b) register a new Bond(s) as directed in the same aggregate principal amount and maturity; (c) authenticate the new Bond(s); and (d) enter the transferee's name and address, together with the certificate number of the new Bond(s), in its registry of owners. 6. The AGENT may deliver Bonds by first class, certified, or registered mail, or by courier, and all such deliveries will be insured under such coverage, if any, deemed appropriate by the AGENT. 7. Ownership of, payment of the principal amount of, redemption premium, if any, and interest due on the Bonds and delivery of notices shall be subject to the provisions of the Bond Document, and for all other purposes. The AGENT shall have no responsibility to determine the beneficial owners of any Bonds and shall owe no duties to any such beneficial owners. Upon written request and reasonable notice from the ISSUER, the AGENT will mail, at the ISSUER's expense, notices or other communications from the ISSUER to the holders of the Bonds as recorded in the registry maintained by the AGENT. 8. Unless the Bond Document provides otherwise, the ISSUER shall, without notice from or demand of the AGENT, provide to the AGENT funds that are immediately available at least one business day prior to the relevant interest and/or principal payment date, sufficient to pay on each interest payment date and each principal payment date, all interest and principal then payable under the terms and provisions of the Bond Document and the Bonds. The AGENT shall have no responsibility to make any such payments to the extent ISSUER has not provided sufficient immediately available funds to AGENT on the relevant payment date. In the event that an interest and/or principal payment date shall be a date that is not a business day, payment may be made on the next succeeding business day and no interest shall accrue. The term "business day" shall include all days except Saturdays, Sundays and legal holidays recognized by the Federal Reserve Bank of Kansas City, Missouri. 9. Unless otherwise provided in the Bond Document and subject to the provisions of Paragraph 12 hereof, to the extent that the ISSUER has made sufficient funds available to it, the AGENT will pay to the record owners of the Bonds as of any record date (as specified in the Bond certificate or Bond Document) the interest due thereon as of the related interest payment date or any redemption date and, will pay upon presentation and surrender of such Bond at maturity or earlier date of redemption to the owner of any Bond, the principal or redemption amount of such Bond. 10. The AGENT may make a charge against any Bond owner sufficient for the reimbursement of any governmental tax or other charge required to be paid for any reason, including, but not limited to, failure of such owner to provide a correct taxpayer identification number to the AGENT. Such charge may be deducted from an interest or principal payment due to such owner. 11. Unless payment of interest, principal, and redemption premium, if any, is made by electronic transfer all payments will be made by check or draft and mailed to the address of the owner as reflected on the registry of owners, or to such other address as directed by the owner. 2 12. Subject to the provisions of the Bond Document, the AGENT may pay at maturity or redemption or issue new certificates to replace certificates represented to the AGENT to have been lost, destroyed, stolen or otherwise wrongfully taken, but may first may require the Bond owner to pay a replacement fee, to furnish an affidavit of loss, and/or furnish either an indemnity bond or other indemnification satisfactory to the AGENT indemnifying the ISSUER and the AGENT. 13. The AGENT shall comply with the provisions, if any, of the Bond Document and the rules of the Securities and Exchange Commission pertaining to the cancellation and retention of Bond certificates and the periodic certification to the Issuer of the cancellation of such Bond certificates. In the event that the ISSUER requests in writing that the AGENT forward to the ISSUER the cancelled Bond certificates, the ISSUER agrees to comply with the foregoing described rules. The AGENT shall have no duty to retain any documents or records pertaining to this Agreement, the Bond Document or the Bonds any longer than six years after final payment on the Bonds, unless otherwise required by the rules of the Securities and Exchange Commission or other applicable law. 14. In case of any request or demand for inspection of the registry of owners or other related records maintained by the AGENT, the AGENT may be entitled to receive appropriate instructions from the ISSUER before permitting or refusing such inspection. The AGENT reserves the right, however, to only permit such inspection at a location and at such reasonable time or times designated by the Agent. 15. The AGENT is authorized to act on the order, directions or instructions of such officials as the governing body of ISSUER as the ISSUER by resolution or other proper action shall designate. The AGENT shall be protected in acting upon any paper or document believed by it to be genuine and to have been signed by the proper official(s), and the ISSUER shall promptly notify AGENT in writing of any change in the identity or authority of officials authorized to sign Bond certificates, written instructions or requests. If not so provided in the Bond Document, if any official whose manual or facsimile signature appears on blank Bond certificates shall die, resign or be removed from office or authority before the authentication of such certificates by the Agent, the AGENT may nevertheless issue such certificates until specifically directed to the contrary in writing by the ISSUER. 16. The AGENT shall provide notice(s) to the owners of the Bonds and such depositories, banks, brokers, rating agencies, information services, repositories, or publications as required by the terms of the Bond Document and to any other entities that request such notice(s) and, if so directed in such other manner and to such other parties as the Issuer shall so direct in writing and at the expense of the ISSUER, and in any event in accordance with current industry regulations, guidelines or practice. 17. The ISSUER shall compensate the AGENT for the AGENT's ordinary services as paying agent and registrar and shall reimburse the AGENT for all ordinary out-of-pocket expenses, charges, advances, counsel fees and other costs incurred in connection with the Bonds, the Bond Document and this Agreement as set forth in the Exhibit A or as otherwise agreed to by the Issuer and Agent. In addition, should it become necessary for the AGENT to perform extraordinary services, the AGENT shall be entitled to extra compensation therefor and reimbursement for any out-of-pocket extraordinary costs and expenses, including, but not limited to, attorneys' fees. 18. The AGENT may resign, or be removed by the ISSUER, as provided in the Bond Document, or, if not so provided in the Bond Document, upon thirty days written notice to the other. Upon the effective date of resignation or removal, all obligations of the AGENT hereunder shall cease and terminate. In the event of resignation or removal, the AGENT shall deliver the registry of owners and all related books and records in accordance with the written instructions of the ISSUER or any successor agent designated in writing by the Issuer within a reasonable period following the effective date of its removal or resignation. 19. Whenever in the performance of its duties as Agent hereunder, the Bond Document or under the Bonds the AGENT shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, under the Bond Document or under the Bonds, the AGENT may consult with legal counsel, including, but not limited to, legal counsel for the ISSUER, with respect to any matter in connection with this Agreement and it shall not be liable for any action taken or omitted by it in good faith in reliance upon the advice or opinion of such counsel. 20. In the event that the Bond Document provides that the initial registered owner of all of the Bond certificates is or may be the Depository Trust Company, or any other securities depository or registered clearing agency qualified under the Securities and Exchange Act of 1934, as amended (a "Securities Depository"), none of the beneficial owners will receive certificates representing their respective interest in the Bonds. In those cases where the provisions of the Bond Document are silent, the following provisions shall apply: (a) The registry of owners maintained by the AGENT will reflect as owner of the Bonds only the Securities Depository or its nominee, until and unless the ISSUER authorizes the delivery of Bond certificates to the beneficial owners as described in subsection (d) below. (b) It is anticipated that during the term of the Bonds, the Securities Depository will make book -entry transfers among its participants and receive and transmit payments of principal and interest on the Bonds to the participants, unless and until the ISSUER authorizes the delivery of Bonds to the beneficial owners as described in subsection (d) below. (c) The ISSUER may at any time, in accordance with the Bond Document, select and appoint a successor Securities Depository and shall notify the Agent of such selection and appointment in writing. (d) If the ISSUER determines that the holding of the Bonds by the Securities Depository is no longer in the best interests of the beneficial owners of the Bonds, then the AGENT, at the written instruction and expense of the ISSUER, shall notify the beneficial owners of the Bonds by first class mail of such determination and of the availability of certificates to owners requesting the same. The AGENT shall register in the names of and authenticate and deliver certificates representing their respective interests in the Bonds to the beneficial owners or their nominees, in principal amounts and maturities representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption. In such event, all references to the Securities Depository herein shall relate to the period of time when at least one Bond is registered in the name of the Securities Depository or its nominee. For the purposes of this paragraph, the AGENT may conclusively rely on information provided by the Securities Depository and its participants as to principal amounts held by and the names and mailing addresses of the beneficial owners of the Bonds and shall not be responsible for any investigation to determine the beneficial owners. The cost of printing certificates for the Bonds and expenses of the AGENT shall be paid by the ISSUER. 21. The AGENT shall incur no liability whatsoever in taking or failing to take any action in accordance with the Bond Document and shall not be liable for any error in judgment made in good faith by an officer or employee of the AGENT unless it shall be proved the AGENT was grossly negligent in ascertaining the pertinent facts or acted intentionally in bad faith. The AGENT shall not be under any obligation to prosecute or defend any action or suit in connection with its duties under the Bond Document or this Agreement or in respect of the Bonds, which, in its opinion, may involve it in expense or liability, unless satisfactory security and indemnity is furnished to the Agent (except as may result from the AGENT's own gross negligence or willful misconduct). To the extent permitted by law, the ISSUER agrees to indemnify the AGENT for, and hold it harmless against, any loss, liability, or expense incurred without negligence or bad faith on its part, arising out of or in connection with its acceptance or administration of its duties hereunder, including the cost and expense against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. To the extent that the ISSUER may now or hereafter be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (before or after judgment) or other legal process, the ISSUER irrevocably agrees not to claim, and it hereby waives, such immunity in connection with any suit or other action brought by the AGENT to enforce the terms of the Bond Document or this Agreement. The Agent shall only be responsible for performing such duties as are required by the Bond Document or as otherwise agreed to by the Agent. 22. It is mutually understood and agreed that, unless otherwise provided in the Bonds or Bond Document, this Agreement shall be governed by the laws of the State of Missouri, both as to interpretation and performance. 23. It is understood and agreed by the parties that if any part, term, or provision of this Agreement is held by the courts to be illegal or in conflict with any applicable law, regulation or rule, the validity of the remaining portions or provisions shall not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term, or provision held to be invalid. 24. The name "UMB Bank, N.A." shall include its successor or successors, any surviving corporation into which it may be merged, any new corporation resulting from its consolidation with any other corporation or corporations, the successor or successors of any such surviving or new corporation, and any corporation to which the fiduciary business of said Bank may at any time be transferred. 25. All notices, demands, and request required or permitted to be given to the ISSUER or AGENT under the provisions hereof must be in writing and shall be deemed to have been sufficiently give, upon receipt if (i) personally delivered, (ii) sent by telecopy and confirmed by phone or (iii) mailed by registered or certified mail, with return receipt requested, delivered as follows: Cl If to AGENT: UMB Bank, n.a. Attn: Corporate Trust & Escrow Services 1010 Grand Blvd., 4' Floor Kansas City, Missouri 64106 If to ISSUER: City of Jefferson Missouri Attn: Director of Finance 320 E. McCarty Street Jefferson City, Missouri, 65101 26. The parties hereto agree that the transactions described herein may be conducted and related documents may be sent, received or stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. 27. In order to comply with provisions of the USA PATRIOT Act of 2001, as amended from time to time, the AGENT may request certain information and/or documentation to verify confirm and record identification of persons or entities who are parties to this Agreement. 28. If the Bonds are eligible for receipt of any U.S. Treasury Interest Subsidy and if so directed by the Bond Document or, as agreed to between the Issuer and the Paying Agent, the Paying Agent shall comply with the provisions, if any, relating to it as described in the Bond Document or as otherwise agreed upon between the Issuer and the Paying Agent. The Paying Agent shall not be responsible for completion of or the actual filing of Form 8038 -CP (or any successor form) with the IRS or any payment from the United States Treasury in accordance with 54AA and 6431 of the Code. IN WITNESS WHEREOF, the parties hereto have, by their duly authorized signatories, set their respective hands and seals this 27' day of August 2020. ISSUER Authorized Signatory UMB BANK, N.A., as PAYING AGENT/REGISTRAR By: Authorized Signatory EXHIBIT A Paying Agent/Registrar's Fee Commitment Fee Pa_mg Agent/Registrar $300.00 Escrow Agent (if applicable) $0.00 Administrative Fee Annual Administration Fee $300.00 Escrow Agent Administration Fee (if applicable) $0.00 Other Services (if required) Dissemination Agent (Annual Filings) $150.00 Failure to File Notice $150.00 Additional Disclosures $150.00 Administration fees, other fees and expenses will be billed annually in arrears as of each July beginning July 1, 2020. Miscellaneous administrative expenses such as postage, shipping, courier, long distance telephone, supplies, etc., will be represented by a miscellaneous expense charge of 6% of the invoice's total fee amount. The fees, charges and expenses specified herein are for the typical and customary services as paying agent and registrar. Fees for additional or extraordinary services not now part of the customary services provided, such as special services during defaults, additional government reporting requirements, or document amendments will be charged at the then current rates for such services. Extraordinary expenses, such as legal fees and travel expenses, shall be invoiced to the client based upon the actual out of pocket cost to the Agent. UMB reserves the right to renegotiate its current fee schedule to correspond with changing economic conditions, inflation, and changing requirements relating to the day to day service delivery. I EXHIBIT F TO ORDINANCE FORM OF PRELIMINARY OFFICIAL STATEMENT PRELIMINARY OFFICIAL STATEMENT DATED JULY 2020 NEW ISSUE S&P Rating: A+ BANK -QUALIFIED See "RATING" herein. In the opinion of Gilmore & Bell, P.C., as Bond Counsel to the City, under existing law and assuming continued compliance with certain requirements of the Internal Revenue Code of 1986, as amended (the "Code'), the interest on the Bonds (including any original issue discount properly allocable to an owner thereoj) (1) is excludable from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax and (2) is exempt from income taxation by the State of Missouri. The Bonds are "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. See the caption "TAX MATTERS" in this Official Statement. Dated: Date of Issuance CITY OF JEFFERSON, MISSOURI $5,800,000 Sewerage System Refunding Revenue Bonds Series 2020 Due: September 1, as shown on inside cover page The Sewerage System Refunding Revenue Bonds, Series 2020 (the "Bonds"), will be issued by the City of Jefferson, Missouri (the "City"), for the purpose of providing funds to pay (1) costs of refunding a portion of the City's outstanding Taxable Sewerage System Revenue Bonds, Series 2010B (Build America Bonds - Direct Payment)(the "Series 2010B Bonds"), consisting of the Series 2010B Bonds scheduled to mature on September 1, 2025 and thereafter, as further described herein under the caption "PLAN OF FINANCING - Refunding of the Refunded Bonds" and (2) costs related to the issuance of the Bonds. The Bonds will be issued as fully registered bonds and will be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company, New York, New York ("DTC"). DTC will act as securities depository for the Bonds. The Bonds will be available for purchase in denominations of $5,000 or any integral multiple thereof, under the book -entry system maintained by DTC. DTC will receive all payments with respect to the Bonds from UMB Bank, N.A., St. Louis, Missouri, as Paying Agent for the Bonds. DTC is required to remit such payments to DTC Participants for subsequent disbursement to the beneficial owners of the Bonds. Semiannual interest will be payable on March 1 and September 1, beginning on March 1, 2021. The Bonds are special obligations of the City, payable solely from the net income and revenues derived by the City from the operation of its sewerage system after payment of costs of operation and maintenance. The Bonds are on a parity with seven series of the City's outstanding sewerage system revenue bonds, including the portion of the Series 2010B Bonds scheduled to mature on September 1, 2020. The Bonds do not constitute a general obligation of the City and do not constitute an indebtedness of the City within the meaning of any constitutional or statutory provision, limitation or restriction, and the taking power of the City is not pledged to the payment of the Bonds or the interest thereon. The Bonds are subject to optional redemption prior to maturity as further described herein. See the caption "THE BONDS - Redemption Provisions" in this Official Statement. See inside cover for maturities, principal amounts, interest rates, yields and CUSIP numbers. The Bonds are offered when, as and if issued by the City, subject to the approval of legality by Gilmore & Bell, P. C, Kansas City, Missouri, as Bond Counsel to the City. Gilmore & Bell, P. C, will also pass upon certain matters relating to this Oficial Statement as disclosure counsel to the City. It is expected that the Bonds will be available for delivery in book - entry form through DTC, New York, New York on or about August 27, 2020. Bids for the Bonds will only be received electronically through PARITY electronic bid submission system until [10:30 ]A.M., Central Daylight Time, on Monday, July 20, 2020. * Preliminary; subject to change. The date of this Official Statement is July _, 2020 CITY OF JEFFERSON, MISSOURI $5,800,000* Sewerage System Refunding Revenue Bonds Series 2020 MATURITY SCHEDULE* Maturity Principal Interest September 1 Amount Rate Yield CUSIP 2021 $260,000 2022 270,000 2023 345,000 2024 355,000 2025 365,000 2026 380,000 2027 385,000 2028 400,000 2029 410,000 2030 420,000 2031 425,000 2032 435,000 2033 440,000 2034 450,000 2035 460,000 * Preliminary; subject to change. CITY OF JEFFERSON, MISSOURI 320 E. McCarty Street Jefferson City, Missouri 65101 (573)634-6300 CITY OFFICIALS Mayor Carrie Tergin Council Members Hank Vogt, Councilmember Ward 1 Mike Lester, Councilmember Ward 2 Erin L. Wiseman, Councilmember Ward 3 Carlos M. Graham, Councilmember Ward 4 Mark Schreiber, Councilmember Ward 5 David Kemna, Councilmember Ward 1 Laura A. Ward, Councilmember Ward 2 Ken Hussey, Councilmember Ward 3 Ron L. Fitzwater, Councilmember Ward 4 Jon Hensley, Councilmember Ward 5 Administrative Officials Steven S. Crowell, Jr., City Administrator Ryan Moehlman, City Counselor Emily Donaldson, City Clerk Margaret Mueller, Director of Finance Sheila Pearre, Chief Accountant Matt Morasch, Public Works Director Eric Seaman, Wastewater Division Director BOND COUNSEL AND DISCLOSURE COUNSEL Gilmore & Bell, P.C. Kansas City, Missouri FQ -I PLYMOTOOMWEV DAY C111 .11 Piper Sandler & Co. Leawood, Kansas PAYING AGENT UMB Bank, N.A., St. Louis, Missouri (i) REGARDING USE OF THIS OFFICIAL STATEMENT No dealer, broker, salesman or other person has been authorized by the City or the Underwriter to give any information or to make any representations with respect to the Bonds other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been furnished by the City and other sources which are believed to be reliable, but such information is not guaranteed as to accuracy or completeness, and is not to be construed as a representation, by the Underwriter. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of that information. In connection with this offering, the Underwriter may overallot or effect transactions that stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The Bonds have not been registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or under any state securities or "blue sky" laws. The Bonds are offered pursuant to an exemption from registration with the Securities and Exchange Commission. CAUTIONARY STATEMENTS REGARDING FORWARD- LOOKING STATEMENTS IN THIS OFFICIAL STATEMENT Certain statements included in or incorporated by reference in this Official Statement that are not purely historical are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended, and reflect the City's current expectations, hopes, intentions, or strategies regarding the future. Such statements may be identifiable by the terminology used such as "plan," "expect," "estimate," "budget," "intend" or other similar words. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. INCLUDED IN SUCH RISKS AND UNCERTAINTIES ARE (i) THOSE RELATING TO THE POSSIBLE INVALIDITY OF THE UNDERLYING ASSUMPTIONS AND ESTIMATES, (ii) POSSIBLE CHANGES OR DEVELOPMENTS IN SOCIAL, ECONOMIC, BUSINESS, INDUSTRY, MARKET, LEGAL AND REGULATORY CIRCUMSTANCES, AND (iii) CONDITIONS AND ACTIONS TAKEN OR OMITTED TO BE TAKEN BY THIRD PARTIES, INCLUDING CUSTOMERS, SUPPLIERS, BUSINESS PARTNERS AND COMPETITORS, AND LEGISLATIVE, JUDICIAL AND OTHER GOVERNMENTAL AUTHORITIES AND OFFICIALS. ASSUMPTIONS RELATED TO THE FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE ECONOMIC, COMPETITIVE, AND MARKET CONDITIONS AND FUTURE BUSINESS DECISIONS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY. FOR THESE REASONS, THERE CAN BE NO ASSURANCE THAT THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS OFFICIAL STATEMENT WILL PROVE TO BE ACCURATE. UNDUE RELIANCE SHOULD NOT BE PLACED ON FORWARD-LOOKING STATEMENTS. ALL FORWARD-LOOKING STATEMENTS INCLUDED IN THIS OFFICIAL STATEMENT ARE BASED ON INFORMATION AVAILABLE TO THE CITY ON THE DATE HEREOF, AND THE CITY ASSUMES NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR OR FAIL TO OCCUR, OTHER THAN AS SET FORTH IN APPENDIX D - FORM OF CONTINUING DISCLOSURE UNDERTAKING TO THIS OFFICIAL STATEMENT. TABLE OF CONTENTS Page INTRODUCTION...................................................1 17 Purpose of the Official Statement .........................1 TheCity................................................................ l TheSystem...........................................................1 TheBonds............................................................1 Security and Source of Payment ...........................2 18 Financial Statements.............................................3 19 Bondowners' Risk ................................................ 3 Summary of the Bond Ordinance .........................4 Continuing Disclosure Information ......................4 BondRating..........................................................4 PLAN OF FINANCING..........................................4 Authorization and Purpose of the Bonds ..............4 Refunding of the Refunded Bonds .......................4 Sources and Uses of Funds...................................6 THE BONDS............................................................6 General Description..............................................6 Redemption Provisions.........................................7 Registration, Transfer and Exchange of Bonds................................................................ 8 Book -Entry Only System.....................................9 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS...................................................9 Special Limited Obligations.................................9 The Bond Ordinance............................................9 THE SYSTEM........................................................11 Description of the System..................................11 Historical Debt Service Coverage ......................12 Additional System Information ..........................12 BONDOWNERS' RISKS......................................12 General...............................................................12 Failure to Comply with Rate Covenant in Fiscal Year Ended October 31, 2019 ..............13 Potential Risks Relating to COVID-19 ..............13 Limited Obligations............................................14 Additional Bonds................................................14 No Mortgage on the Project...............................15 Risk of IRS Audit...............................................15 Page Taxability...................................................... 15 Investment Rating and Secondary Market .... 15 Loss of Premium from Prepayment .............. 16 Defeasance Risk ............................................ 16 Enforcement of Remedies ............................. 16 No Bond Reserve Fund ................................. 16 Factors Affecting the Operations of the System........................................................... 17 LEGAL MATTERS.........................................17 Legal Proceedings ......................................... 17 Approval of Legality.....................................18 TAX MATTERS..............................................18 Opinion of Bond Counsel .............................. 18 Other Tax Consequences ............................... 19 RATING........................................................... 20 CONTINUING DISCLOSURE ...................... 20 MISCELLANEOUS ........................................ 21 Financial Advisor .......................................... 21 Certain Relationships .................................... 21 Underwriting ................................................. 21 Certification and Other Matters Regarding Official Statement ......................................... 21 APPENDIX A: City of Jefferson, Missouri APPENDIX B: City of Jefferson, Missouri Comprehensive Annual Financial Report with Independent Auditor's Report for the Year Ended October 31, 2019 APPENDIX C: Summary of the Bond Ordinance APPENDIX D: Form of Continuing Disclosure Undertaking APPENDIX E: Book -Entry Only System OFFICIAL STATEMENT CITY OF JEFFERSON, MISSOURI $5,800,000* Sewerage System Refunding Revenue Bonds Series 2020 INTRODUCTION This introduction is only a brief description and summary of certain information contained in this Official Statement and is qualified in its entirety by reference to the more complete and detailed information contained in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. Purpose of the Official Statement The purpose of this Official Statement is to furnish information relating to (1) the City of Jefferson, Missouri (the "City") and (2) the City's Sewerage System Refunding Revenue Bonds, Series 2020, to be issued in the aggregate principal amount of $5,800,000" (the "Bonds"), in order to provide funds to refund and redeem a portion of the City's outstanding Taxable Sewerage System Revenue Bonds, Series 2010B (Build America Bonds - Direct Payment)(the "Series 2010B Bonds"), consisting of the Series 2010B Bonds scheduled to mature on September 1, 2025 and thereafter, outstanding in the aggregate principal amount of $5,790,000 (the "Refunded Bonds") as further described herein under the caption "PLAN OF FINANCING - Refunding of the Refunded Bonds." The City The City is the capital of the State of Missouri and county seat of Cole County, Missouri. It is a home rule charter city and political subdivision of the State of Missouri, organized, existing and operating under the constitution and laws of the State of Missouri and the City Charter, adopted in 1986, and exercises powers of municipal government specifically granted by the State of Missouri. For more information about the City, see Appendix A and Appendix B to this Official Statement. The System The City owns and operates a revenue-producing sewerage system serving the City and its inhabitants (the "System"). The System includes [34] pumping stations, [429] miles of sewers and two treatment facilities (11 million gallons per day capacity total). The City has been served by a sewer system since pre - 1895. Treatment was provided in the late 1960's when major interceptors and pumping stations were constructed to collect sanitary wastes and convey them to a central plant for treatment. For more information about the System, see the captions "THE SYSTEM" herein and "FINANCIAL INFORMATION CONCERNING THE SYSTEM" in Appendix A to this Official Statement. The Bonds The Bonds are being issued pursuant to an ordinance expected to be passed by the City Council of the City on July 20, 2020 (the "Bond Ordinance"). The proceeds received from the sale of the Bonds will be used to (1) current refund and redeem the Refunded Bonds on September 1, 2020, and (2) pay certain costs of * Preliminary; subject to change. issuing the Bonds. See the captions "PLAN OF FINANCING - Refunding of the Refunded Bonds" and "THE BONDS" herein. The City's Series 2010B Bonds scheduled to mature on September 1, 2020, including accrued interest thereon, in the aggregate principal amount of $225,000 will not be refunded with proceeds of the Bonds and will remain outstanding on the date of issuance of the Bonds. All capitalized terms used herein and not otherwise defined herein have the meanings assigned to those terms in the Bond Ordinance. Security and Source of Payment The Bonds will be special limited obligations of the City payable from the Net Revenues derived by the City from the operation of its System. A depreciation and replacement reserve has previously been established for the System and ratified by the Bond Ordinance, to provide funds to make unusual or extraordinary replacements and repairs. No Bond proceeds will be used to provide additional funds for the depreciation and replacement reserve. In addition to the $5,800,000* aggregate principal amount of the Bonds being issued, the City has outstanding the following series of System Revenue Bonds standing on a parity and equality with the Bonds with respect to the payment of principal and interest from the Net Revenues of the System: (i) $3,740,000 principal amount of Sewerage System Refunding and Improvement Revenue Bonds (State Revolving Fund Program), Series 2001B (the "Series 2001B Bonds"); (ii) $1,575,000 principal amount of Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2005A (the "Series 2005A Bonds"); (iii) $4,025,000 principal amount of Sewerage System Refunding and Improvement Revenue Bonds (State Revolving Fund Program), Series 2005B (the "Series 2005B Bonds"); (iv) $2,310,000 principal amount of Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2008 (the "Series 2008 Bonds"); (v) $225,000 principal amount of the Series 2010B Bonds, consisting of the Series 2010B Bonds scheduled to mature on September 1, 2020, that will not be refunded with proceeds of the Bonds; (vi) $10,723,000 principal amount of Sewerage System Revenue Bonds (State of Missouri — Direct Loan Program), Series 2012 (the "Series 2012 Bonds"); (vii) $8,225,000 principal amount of Sewerage System Revenue Bonds, Series 2014 (the "Series 2014 Bonds"); and (viii) $9,380,000 principal amount of Sewerage System Revenue Bonds, Series 2016 (the "Series 2016 Bonds"); The Series 2001B Bonds, the Series 2005A Bonds, the Series 2005B Bonds, the Series 2008 Bonds, the Series 2010B Bonds (consisting only of the portion outstanding in the principal amount of $225,000 scheduled to mature on September 1, 2020), the Series 2012 Bonds, the Series 2014 Bonds and the Series 2016 Bonds are collectively referred to herein as the "Previously Issued Parity Bonds." The Bonds will be issued on a parity with the Previously Issued Parity Bonds with respect to the Net Revenues of the System. The City has the right under the Bond Ordinance to issue additional bonds on a parity with the Bonds and the Previously Issued Parity Bonds payable from a pledge of the Net Revenues of the System, but only in * Preliminary, subject to change. -2- accordance with and subject to the terms and conditions set forth in the Bond Ordinance. The Previously Issued Parity Bonds and any additional System Revenue Bonds or other obligations hereafter issued or incurred pursuant to the Bond Ordinance and standing on a parity and equality with the Bonds with respect to the payment of principal and interest from the Net revenues of the System are collectively referred to as the "Parity Bonds." The Bonds will not be or constitute a general obligation of the City, nor will they constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction, and the taxing power of the City is not pledged to the payment of the Bonds either as to principal or interest. See the caption "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS" herein. Financial Statements Audited financial statements of the City as of and for the fiscal year ended October 31, 2019, are included in the City's Comprehensive Annual Financial Report in Appendix B to this Official Statement. These financial statements have been audited by Evers & Company, CPA's, L.L.C., Jefferson City, Missouri, independent certified public accountants, to the extent and for the periods indicated in their report which is also included in Appendix B to this Official Statement. Bondowners' Risk Payment of the principal of and interest on the Bonds and the City's Previously Issued Parity Bonds is dependent on the City generating sufficient Net Revenues from the operation of the System. Certain risks inherent in the production of such Net Revenues are discussed in this Official Statement. See the caption "BONDOWNERS' RISKS" herein. The ordinances previously approved by the City under which the City's Previously Issued Parity Bonds were authorized (the "Previously Issued Parity Ordinances") require the City to comply with certain covenants, including a rate covenant requiring the City to charge rates for the System sufficient to produce in each fiscal year Net Revenues of the System equal to at least 110% of the debt service requirements (the "Debt Service Requirements") due on the all of the City's System Revenue Bonds secured and payable from a pledge of Net Revenues of the System (the "Rate Covenant"). During the fiscal year ended October 31, 2019, the City incurred a significant increase in System operating expenses (excluding depreciation, the System operating expenses increased by approximately $1,275,698 compared to System operating expenses in fiscal year ended October 31, 2018) because the City had to repair and replace certain System infrastructure that was damaged by flooding that occurred in the City and surrounding central Missouri region in the Summer of 2019. As a result of the increased operating expenses incurred during the fiscal year ended October 31, 2019, the Net Revenues of the System were only equal to approximately 96% of the Debt Service Requirements to be paid by the City during the fiscal year ended October 31, 2019, which fell below the 110% Rate Covenant requirement set forth in the City's Previously Issued Parity Ordinances. See also the table under the caption "THE SYSTEM - Historical Debt Service Coverage" in this Official Statement and the caption `BONDOWNERS' RISK - Failure to Comply with Rate Covenant in Fiscal Year Ended October 31, 2019" in this Official Statement. The Previously Issued Parity Bond Ordinances authorizing the City's Series 2016 Bonds, Series 2014 Bonds and the Series 2010B Bonds require the City to employ a Consultant (as defined in Appendix C) to make recommendations with respect to System rates and charges if the Net Revenues generated from the operation of the System fall below the 110% Rate Covenant requirement for two consecutive fiscal years. Although the Net Revenues of the System only fell below the 110% Rate Covenant requirement during the fiscal year ended October 31, 2019, and have not fallen below the Rate Covenant requirement for two consecutive fiscal years, on April 6, 2020, the City engaged Rafetlis Financial Consultants, Inc. ("Raftelis"), to conduct a comprehensive rate study for the City's System. The City expects Raftelis to complete the rate study by the City's current fiscal year ending October 31, 2020, and the City will likely implement increased System rates and charges based upon the conclusions and recommendations of the Raftelis rate study in order to ensure that the System generates sufficient Net Revenues to meet the 110% Rate Covenant requirement in -3- future fiscal years. See also the caption "BONDOWNERS' RISK - Failure to Comply with Rate Covenant in Fiscal Year Ended October 31, 2019" in this Official Statement. Summary of the Bond Ordinance A summary of the Bond Ordinance, including definitions of certain words and terms used in this Official Statement and in the Bond Ordinance, is included in Appendix C to this Official Statement. Such summary and definitions do not purport to be comprehensive or definitive. All references herein to the Bond Ordinance are qualified in their entirety by reference to the Bond Ordinance. Copies of the Bond Ordinance and this Official Statement may be viewed at the office of the City's financial advisor, Piper Sandler & Co., 11635 Rosewood Street, Leawood, KS 66211, (913) 345-3373, or will be provided to any prospective purchaser requesting the same, upon payment by such prospective purchaser of the cost of complying with such request. All capitalized terms used in this Official Statement and not otherwise defined in this Oficial Statement have the meanings assigned to those terms in the Bond Ordinance. Continuing Disclosure Information The City has agreed to provide certain annual financial information and notices of certain enumerated events relating to the Bonds to the Municipal Securities Rulemaking Board (the "MSRB") via the Electronic Municipal Market Access system ("EMMA"), in accordance with Rule 15c2-12 promulgated by the Securities and Exchange Commission (the "Rule"). Pursuant to a Continuing Disclosure Undertaking, the City has agreed to provide to the MSRB via EMMA the annual financial information and notices of certain enumerated events in compliance with the Rule. For further details, see the caption "CONTINUING DISCLOSURE" herein and Appendix D - "Form of Continuing Disclosure Undertaking" to this Official Statement. Bond Rating The City has received the rating set forth on the cover page of this Official Statement from S&P Global Ratings, a division of Standard & Poor's Financial Services LLC ("S&P"), on the Bonds. See the caption "RATING" herein. PLAN OF FINANCING Authorization and Purpose of the Bonds The Bonds are being issued pursuant to and in full compliance with the Constitution and statutes of the State of Missouri, including particularly Article VI, Section 27 of the Missouri Constitution, as amended, Chapter 250 of the Revised Statutes of Missouri, as amended, Section 108.140(2) of the Revised Statutes of Missouri, as amended, and the Bond Ordinance. The Bonds are being issued to (1) current refund and redeem the Refunded Bonds and (2) pay costs of issuing the Bonds. Refunding of the Refunded Bonds The City will transfer a portion of the proceeds of the Bonds in the amount of $[ ] to UMB Bank, N.A., St. Louis, Missouri, as paying agent for the Refunded Bonds (the "Refunded Bonds Paying Agent"), which amount will be sufficient to pay the redemption price of the Refunded Bonds on September 1, 2020, equal to 100% of the principal amount of the Refunded Bonds plus accrued interest thereon to the September 1, 2020, redemption date. -4- The Refunded Bonds will be redeemed on September 1, 2020, at a redemption price equal to 100% of the principal amount of the Refunded Bonds, plus accrued interest thereon to the September 1, 2020, redemption date. Set forth below is a description of the Refunded Bonds: Dated Maturity Interest Principal Redemption Redemption 2022 Date Date Rate Amount Date Price CUSIP 08/05/2010 09/01/20250) 5.760% $1,470,000 09/01/2020 100% 472556 HXO 08/05/2010 09/01/20300) 6.350 1,945,000 09/01/2020 100% 472556 HY8 08/05/2010 09/01/20350) 6.500 2,375,000 09/01/2020 100% 472556 HZ5 (1) The Term Bonds scheduled to mature on September 1, 2025, 2030 and 2035, will include the following mandatory redemption amounts: Term Bonds Maturing on September 1. 2025 Year Principal Amount 2021 $235,000 2022 240,000 2023 320,000 2024 330,000 2025+ 345,000 + Final Maturity Term Bonds Maturing on September 1. 2030 Year Principal Amount 2026 $360,000 2027 370,000 2028 390,000 2029 405,000 2030+ 420,000 Term Bonds Maturing on September 1. 2035 Year Principal Amount 2031 $435,000 2032 455,000 2033 475,000 2034 495,000 2035+ 515,000 -5- Sources and Uses of Funds The following table summarizes the estimated sources of funds, including the proceeds from the sale of the Bonds, and the expected uses of such funds, in connection with the plan of financing: Sources of Funds: Principal Amount of the Bonds Original issue premium Total $5,800,000.00* Uses of Funds: Deposit with Refunded Bonds Paying Agent to Redeem Refunded Bonds on September 1, 2020 Costs of issuance, including Underwriter's Discount Total THE BONDS The following is a summary of certain terms and provisions of the Bonds. Reference is hereby made to the Bonds and the provisions with respect thereto in the Bond Ordinance for the detailed terms and provisions thereof. General Description The Bonds are being issued in the aggregate principal amount of $5,800,000*. The Bonds are dated as of the date of original delivery of and payment for such Bonds and the principal is payable on September 1 in the years and in the principal amounts set forth on the inside cover page of this OS, subject to redemption and payment prior to maturity, upon the terms and conditions described under the section herein captioned "THE BONDS — Redemption Provisions." Interest on the Bonds is calculated at the rates per annum set forth on the inside cover page, computed on the basis of a 360 -day year of twelve 30 -day months. The Bonds shall consist of fully -registered bonds in denominations of $5,000 or any integral multiple thereof. Interest on the Bonds is payable from the date thereof or the most recent date to which said interest has been paid and is payable semiannually on March 1 and September 1 (each an "Interest Payment Date"), beginning March 1, 2021. The interest payable on each Bond on any Interest Payment Date will be paid to the person in whose name such Bond is registered (the "Registered Owner" or "Owner") as shown on the registration books (the "Bond Register") at the close of business on the 15th day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date (the "Record Date") for such interest (1) by check or draft mailed by UMB Bank, N.A., St. Louis, Missouri, as paying agent for the Bonds (the "Paying Agent"), to the address of such Registered Owner shown on the Bond Register or such other address furnished to the Paying Agent in writing by such Registered Owner, or (2) or, in the case of an interest payment to the Securities Depository or any Registered Owner, by electronic transfer to such Registered Owner upon written notice signed by such Registered Owner and given to the Paying Agent not less than 15 days prior to the Record Date for such interest, containing the electronic transfer instructions including the name and address of the bank (which shall be in the continental United States), its ABA routing number and the account number to which such Registered Owner wishes to have such transfer directed, and an acknowledgment that an electronic transfer fee may be applicable. * Preliminary, subject to change. In The principal or Redemption Price (as defined herein) of each Bond will be paid at Maturity by check, draft or electronic transfer to the Registered Owner at the Maturity thereof, upon presentation and surrender of such Bond at the principal payment office of the Paying Agent, or such other office designated by the Paying Agent. Redemption Provisions Optional Redemption. At the option of the City, the Bonds or portions thereof maturing on September 1, 2029, and thereafter will be subject to redemption and payment prior to maturity, on September 1, 2028, and thereafter in whole or in part at any time at the redemption price of 100% of the principal amount thereof, plus accrued interest to the redemption date. Selection of Bonds for Redemption. Bonds shall be redeemed only in the principal amount of $5,000 or any integral multiple thereof. When less than all of the Outstanding Bonds are to be redeemed, such Bonds shall be redeemed from maturities selected by the City, and Bonds of less than a full maturity shall be selected by the Paying Agent in $5,000 units of principal amount in such equitable manner as the Paying Agent may determine. In the case of a partial redemption of Bonds at the time Outstanding in denominations greater than $5,000, then for all purposes in connection with such redemption each $5,000 of face value shall be treated as though it were a separate Bond of the denomination of $5,000. If it is determined that one or more, but not all, of the $5,000 units of face value represented by any Bond are selected for redemption, then upon notice of intention to redeem such $5,000 unit or units, the Registered Owner of such Bond or the Registered Owner's duly authorized agent shall present and surrender such Bond to the Paying Agent (1) for payment of the price which such Bonds are to be redeemed (the "Redemption Price") and interest to the date fixed for redemption (the "Redemption Date") of such $5,000 unit or units of face value called for redemption, and (2) for exchange, without charge to the Registered Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Registered Owner of any such Bond shall fail to present such Bond to the Paying Agent for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the Redemption Date to the extent of the $5,000 unit or units of face value called for redemption (and to that extent only). Notice of Call for Redemption. Unless waived by any Registered Owner of Bonds to be redeemed, official notice of any redemption shall be given by the Paying Agent on behalf of the City by mailing a copy of an official redemption notice by first class mail at least 20 days prior to the Redemption Date to the Underwriter of the Bonds and each Registered Owner of the Bonds to be redeemed at the address shown on the Bond Register. With respect to optional redemptions, such notice may be conditioned upon moneys being on deposit with the Paying Agent on or prior to the Redemption Date in an amount sufficient to pay the Redemption Price on the Redemption Date. If such notice is conditional and either the Paying Agent receives written notice from the City that moneys sufficient to pay the Redemption Price will not be on deposit on the Redemption Date, or such moneys are not received on the Redemption Date, then such notice shall be of no force and effect, the Paying Agent shall not redeem such Bonds and the Paying Agent shall give notice, in the same manner in which the notice of redemption was given, that such moneys were not or will not be so received and that such Bonds will not be redeemed. The failure of any Registered Owner to receive notice given as heretofore provided or any defect therein shall not invalidate any redemption. So long as DTC is effecting book -entry transfers of the Bonds, the Paying Agent shall provide the notices specified in the Bond Ordinance to DTC. It is expected that DTC will, in turn, notify its Participants and that the Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the -7- part of DTC or a Participant, or failure on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice from the Paying Agent, a Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, will not affect the validity of the redemption of such Bond. See Appendix E - "Book -Entry Only System" to this Official Statement. Effect of Call for Redemption. Official notice of redemption having been given as provided in the Bond Ordinance, the Bonds or portions of Bonds to be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein specified, and from and after the Redemption Date (unless the City defaults in the payment of the Redemption Price) such Bonds or portion of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with such notice, the Redemption Price of such Bonds shall be paid by the Paying Agent. Installments of interest due on or prior to the Redemption Date shall be payable as provided in the Bond Ordinance for payment of interest. Upon surrender for any partial redemption of any Bond, the Paying Agent shall prepare for the Registered Owner a new Bond or Bonds of the same Stated Maturity in the amount of the unpaid principal as provided in the Bond Ordinance. All Bonds that have been surrendered for redemption shall be canceled and destroyed by the Paying Agent pursuant to the Bond Ordinance and shall not be reissued. The failure of any Registered Owner to receive notice given as provided in the Bond Ordinance or any defect therein shall not invalidate any redemption. Registration, Transfer and Exchange of Bonds The City will cause the Bond Register to be kept at the principal office of the Paying Agent for the registration, transfer and exchange of Bonds as provided in the Bond Ordinance. Each Bond when issued shall be registered in the name of the Owner thereof on the Bond Register. Bonds may be transferred and exchanged only on the Bond Register as provided in the Bond Ordinance. Upon surrender of any Bond at the principal payment office of the Paying Agent, the Paying Agent shall transfer or exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Stated Maturity and in the same aggregate principal amount as the Bond that was presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee of signature satisfactory to the Paying Agent, duly executed by the Registered Owner thereof or by the Registered Owner's duly authorized agent. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Paying Agent shall authenticate and deliver Bonds in accordance with the provisions of the Bond Ordinance. The City shall pay the fees and expenses of the Paying Agent for the registration, transfer and exchange of Bonds provided for in the Bond Ordinance and the cost of printing a reasonable supply of registered bond blanks. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Paying Agent, are the responsibility of the Registered Owners of the Bonds. In the event any Registered Owner fails to provide a correct taxpayer identification number to the Paying Agent, the Paying Agent may make a charge against such Registered Owner sufficient to pay any govermnental charge required to be paid as a result of such failure. The City and the Paying Agent shall not be required (a) to register the transfer or exchange of any Bond after notice calling such Bond or portion thereof for redemption has been given or during the period of fifteen days next preceding the first mailing of such notice of redemption; or (b) to register the transfer or exchange of any Bond during a period beginning at the opening of business on the day after receiving written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on the date fixed for the payment of Defaulted Interest pursuant the Bond Ordinance. in Book -Entry Only System Ownership interests in the Bonds will be available to purchasers only through a book -entry only system (the "Book -Entry Only System") described in Appendix E - "Book -Entry Only System" to this Official Statement. SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Special Limited Obligations The Bonds are special obligations of the City payable from and secured as to the payment of principal and interest by a pledge of the Net Revenues derived by the City from the operation of the System. The Bonds will not be or constitute a general obligation of the City, nor will they constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction, and the taxing power of the City is not pledged to the payment of the Bonds either as to principal or interest. The Bond Ordinance Pledge of Revenues. The Bonds shall be special obligations of the City payable from, and secured as to the payment of principal and interest by a pledge of the Net Revenues derived from the operation of the System, and the City pledges said Net Revenues to the payment of the principal of and interest on the Bonds. The Bonds shall not be or constitute a general obligation of the City, nor shall they constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision, limitation or restriction, and the taxing power of the City is not pledged to the payment of the Bonds, either as to principal or interest. The covenants and agreements of the City contained in the Bond Ordinance and in the Bonds shall be for the equal benefit, protection and security of the legal owners of any or all of the Bonds, all of which Bonds shall be of equal rank and without preference or priority of one Bond over any other Bond in the application of the funds pledged to the payment of the principal of and the interest on the Bonds, or otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in the Bond Ordinance. The Bonds will stand on a parity and be equally and ratably secured with respect to the payment of principal and interest from the Net Revenues and in all other respects with the Previously Issued Parity Bonds and with any Parity Bonds issued in the future. The Bonds will not have any priority with respect to the payment of principal or interest from the Net Revenues or otherwise over the Parity Bonds and the Parity Bonds will not have any priority with respect to the payment of principal or interest from the Net Revenues or otherwise over the Bonds. Depreciation and Replacement Account. A Depreciation and Replacement Account has been established for the System and certain deposits are required to be made into the Depreciation and Replacement Account under the ordinances authorizing the Previously Issued Parity Bonds. So long as the amount in the Depreciation and Replacement Account aggregates $500,000, no further deposits will be required in the Depreciation and Replacement Account. But if the City shall ever be required to expend and use a part of the moneys in the Depreciation and Replacement Account for its authorized purposes and such expenditure shall reduce the amount of the Depreciation and Replacement Account below $500,000, then the City shall beginning November 1 of the fiscal year immediately following fiscal year in which the Depreciation and Replacement Account fell below $500,000, and on each November 1 thereafter, deposit the sum of $120,000 each year until the Depreciation and Replacement Account aggregates $500,000. The amounts required to be deposited in the Depreciation and Replacement Account by the Bond Ordinance shall include those amounts required to be deposited by the Previously Issued Parity Bonds. Except as provided in the Bond Ordinance, moneys in the Depreciation and Replacement Account shall be expended and used by the City, if no other funds are available therefor, solely for the purpose of making emergency replacements and repairs in and to the System as may be necessary to keep the System in good repair and working order and to assure the continued effective and efficient operation thereof. In Rate Covenant. The City will fix, establish, maintain and collect such rates and charges for the use and services furnished by or through the System as will produce Revenues sufficient to (a) pay the Expenses of the System; (b) pay the principal of and interest on the Bonds as and when the same become due; and (c) provide reasonable and adequate reserves for the payment of the Bonds and the interest thereon and for the protection and benefit of the System as provided in the Bond Ordinance. The City further covenants and agrees that such rates and charges will be sufficient to enable the City to have in each fiscal year Net Revenues not less than 110% of the Debt Service Requirements for such fiscal year. The City will require the prompt payment of accounts for service rendered by or through the System and will promptly take whatever action is legally permissible to enforce and collect delinquent charges. The City will, from time to time as often as necessary, in accordance with and subject to applicable legal requirements, revise the rates and charges aforesaid in such manner as may be necessary or proper so that the Net Revenues will be sufficient to cover the obligations of the City under the provisions of the Bond Ordinance. If for any two consecutive fiscal years Net Revenues shall be an amount less than as hereinbefore provided, the City will immediately employ a Consultant to make recommendations with respect to such rates and charges. A copy of the Consultant's report and recommendations shall be filed with the City Clerk and with the Underwriter of the Bonds and shall be furnished to any Registered Owner of the Bonds requesting a copy of the same, at the cost of such Registered Owner. The City shall, to the extent feasible, follow the recommendations of the Consultant. Parity Obligations. The City has the right under the Bond Ordinance to issue additional bonds on a parity with the Bonds and the Previously Issued Parity Bonds payable from the same sources and secured by the same revenues as the Bonds, but only in accordance with and subject to the terms and conditions set forth in the Bond Ordinance, which conditions include meeting either of the following requirements (such capitalized terms used below having the definitions set forth in Appendix C): (1) The average annual Net Revenues as set forth in the two most recent annual audits for the two fiscal years immediately preceding the issuance of additional bonds, as determined by an Accountant or a Consultant, shall have been equal to at least 110% of the Average Annual Debt Service for all System Revenue Bonds of the City, including the additional bonds proposed to be issued. In determining the average annual Net Revenues for the two preceding fiscal years for the purpose of this subsection, the City may obtain an Accountant or a Consultant to adjust said Net Revenues for the two preceding fiscal years by adding thereto, in the event the City shall have made any increase in rates for the use and services of the System and such increase shall not have been in effect during all of the two fiscal years for which annual audits are available immediately preceding the issuance of additional bonds, the amount, as estimated by the Accountant or Consultant, of the additional Net Revenues which would have resulted from the operation of the System during said two preceding fiscal years had such rate increase been in effect for the entire period; or (2) The projected average annual Net Revenues for the two fiscal years immediately following the fiscal year in which the improvements to the System, the cost of which is being financed by such additional bonds, are to be placed in commercial operation, as determined by an Accountant or a Consultant, shall be equal to at least 110% of the average of the Debt Service Requirements in all fiscal years succeeding said fiscal year in which such improvements are expected to be placed in commercial operation. In determining the projected average annual Net Revenues for the purpose of this subsection, the Accountant or Consultant may adjust said projections by adding thereto any estimated increase in Net Revenues resulting from any increase or increases in rates for the use and services of the System duly made by the City which shall be in effect for the period of such projections and which, in the opinion of the Accountant or Consultant, are economically feasible and reasonably considered necessary based on projected operations of the System. Further provisions of the Bond Ordinance are set forth in "SUMMARY OF THE BOND ORDINANCE" in Appendix C to this Official Statement -10- THE SYSTEM Description of the System [**TO BE UPDATED** The System includes [34 pumping stations, 440 miles of sanitary sewer lines, an [I I ] million gallons per day ("mgd") treatment facility and a [0.8] mgd treatment facility. The City has been served by a sewer system since pre -1895. Treatment was provided in the late 1960's when major interceptors and pumping stations were constructed to collect sanitary wastes and convey them to a central plant for treatment. The facilities were expanded and upgraded to secondary treatment in 1979. The City acquired a major network of sewer mains from Cole County, Missouri, in the early 1990's which serves an area of approximately 11 square miles outside the City. The state agency governing such systems, the Department of Natural Resources, has designated the City as a regional sewer authority. The City of Holts Summit, Missouri, contracts with the City for sewerage treatment and the City of St. Martins, Missouri, contracts with the City for sewerage treatment and maintenance. The City owns a sequencing batch reactor plant with a design capacity of [ 11 ] mgd in normal weather to a peak rate of [60] mgd, and a central pump station which will pump [60] mgd. The capacity will serve the needs of the City for the next 20-25 years. The System is operated by the Wastewater Division within the Department of Public Works who reports to the City Administrator. The elected City Council sets policy for the Wastewater Division by ordinance. The utility currently operates all systems with [33] employees. [Remainder of this page intentionally left blank.] -11- Historical Debt Service Coverage The following table shows historical debt service coverage for all obligations of the System prepared from audits of the City and the System for the last three fiscal years: Fiscal Year Ended October 31 2017 2018 2019 Operating Revenue $11,172,107 $11,564,490 $11,588,856 Non -Operating Revenue 1,095,188 969,275 869,551 Capital Contributions(') 184,267 202,011 183,576 Total Revenue $12,451,562 $12,735,776 $12,641,983 Operating Expenses(2) $5,834,648 $5,536,848 $6,812,546(3) Total Expenses $5,698,309 $5,834,648 $6,812,546 Net Revenue Available for Debt Service Debt Service Debt Service Coverage $6,616,914 $7,198,928 $5,829,437 $5,721,265 $6,065,813 $6,068,595 1.16x 1.19X 0.96x(4) (1) Capital contributions include federal grant moneys and customer contributions in the form of sewer capital recovery moneys received during fiscal years ended October 31, 2017 through October 31, 2019. (2) Excludes depreciation and amortization expenses. (3) Operating expenses increased during fiscal year ended October 31, 2019, due to numerous repairs to System infrastructure damaged by flooding in the Summer of 2019. �4> The City's Debt Service Coverage requirement for fiscal year ended October 31, 2019, fell below the required 110% Rate Covenant requirement set forth in the City's Previously Issued Parity Ordinances as further discussed under the caption `BONDOWNERS' RISK - Failure to Comply with Rate Covenant in Fiscal Year Ended October 31, 2019" herein. Additional System Information For additional information about the System, see Appendix A to this Official Statement. BONDOWNERS' RISKS The following is a discussion of certain risks that could affect payments to be made by the City with respect to the Bonds. Such discussion is not, and is not intended to be, exhaustive and should not be considered as a complete description of all risks that could affect such payments. Prospective purchasers of the Bonds should analyze carefully all the information contained in this Official Statement, including the Appendices hereto, and additional information in the form of the complete documents summarized herein and in the Appendices hereto, copies of which are available as described herein. General The Bonds are special obligations of the City and are payable solely out of Net Revenues derived from the operation of the System. The Bonds do not constitute a general obligation of the City and do not constitute an indebtedness of the City within the meaning of any constitutional, charter or statutory provision, limitation -12- or restriction. The Bonds are not payable by and have no recourse to the power of taxation. The Bondowners have no lien on or security interest in any of the physical assets of the City, including the System. Although the City has agreed in the Bond Ordinance and is required by law to charge rates sufficient to pay, among other things, the principal of and interest on the Bonds (see "Summary of the Bond Ordinance — Rate Covenant" in Appendix C), there is no assurance that, because of adverse economic conditions, unexpected repairs, replacements or improvements to the System or other unanticipated circumstances, the City will be successful in collecting sufficient revenues to pay debt service on the Bonds on a timely basis. Failure to Comply with Rate Covenant in Fiscal Year Ended October 31, 2019 The Previously Issued Parity Ordinances under which the City's Previously Issued Parity Bonds were authorized require the City to comply with certain covenants, including a rate covenant requiring the City to charge rates for the System sufficient to produce in each fiscal year Net Revenues of the System equal to at least 110% of the Debt Service Requirements due on the all of the City's System Revenue Bonds secured and payable from a pledge of Net Revenues of the System (the "Rate Covenant"). During the fiscal year ended October 31, 2019, the City incurred a significant increase in System operating expenses (excluding depreciation, the System operating expenses increased by approximately $1,275,698 compared to System operating expenses in fiscal year ended October 31, 2018) because the City had to repair and replace certain System infrastructure that was damaged by flooding that occurred in the City in the Summer of 2019. As a result of the increased operating expenses incurred during the fiscal year ended October 31, 2019, the Net Revenues of the System were only equal to approximately 96% of the Debt Service Requirements to be paid by the City during the fiscal year ended October 31, 2019, which fell below the 110% Rate Covenant requirement set forth in the City's Previously Issued Parity Ordinances. See also the table under the caption "THE SYSTEM - Historical Debt Service Coverage" in this Official Statement. The Previously Issued Parity Bond Ordinances authorizing the City's Series 2016 Bonds, Series 2014 Bonds and the Series 2010B Bonds require the City to employ a Consultant to make recommendations with respect to System rates and charges if the Net Revenues generated from the operation of the System fall below the 110% Rate Covenant requirement for two consecutive fiscal years. Although the Net Revenues of the System only fell below the 110% Rate Covenant requirement during the fiscal year ended October 31, 2019, and have not fallen below the Rate Covenant requirement for two consecutive fiscal years, on April 6, 2020, the City engaged Rafetlis Financial Consultants, Inc. ("Raftelis"), to conduct a comprehensive rate study for the City's System. The City expects Raftelis to complete the rate study by the end of the City's current fiscal year October 31, 2020, and the City will likely implement increased System rates and charges based upon the conclusions and recommendations of the Raftelis rate study in order to ensure that the System generates sufficient Net Revenues to meet the 110% Rate Covenant requirement in future fiscal years. Potential Risks Relating to COVID-19 A novel strain of coronavirus (which leads to the disease known as "COVID-19"), has recently spread throughout the world and has been characterized by the World Health Organization as a pandemic. The impact of the COVID-19 pandemic on the U.S. economy is expected to be broad based and to negatively impact national, state and local economies. In response to such expectations, President Trump on March 13, 2020, declared a "national emergency," which, among other effects, allows the executive branch to disburse disaster relief funds to address the COVID-19 pandemic and related economic dislocation. On March 13, 2020, the Governor of the State of Missouri (the "State") signed an Executive Order declaring a state of emergency in the State in response to COVID-19. On April 24, 2020, the Governor signed another Executive Order extending the state of emergency in the State through June 15, 2020. On June 11, 2020, the Governor signed another Executive Order extending the state of emergency in the State through December 30, 2020. The stated purpose of the Executive Order is to allow more flexibility in utilizing resources and deploying them around the State where they are most appropriate, including allowing the Governor to waive certain State laws and regulations where necessary. On April 3, 2020, the Governor of the State issued a -13- statewide "Stay Home Missouri" order for all State residents (the "State Order"), which began on April 6, 2020, and ended on May 3, 2020. The State Order required all State residents to avoid leaving their residences unless necessary and to practice social distancing when they need to travel outside their residences to work, access groceries, prescriptions, health care, and other necessities, or to engage in an outdoor activity. To slow the spread of the virus, the Governor also announced on April 9, 2020, that all school districts across the State must discontinue in-person classes for the remainder of the 2019-2020 school year. Numerous municipalities and counties, including the City and Cole County, Missouri, previously enacted their own "shelter -in-place" orders, consistent with the State Order, which require residents in these areas to limit non-essential travel and also require many businesses in these areas that are deemed to provide "non-essential" goods and services to close through at least May 3, 2020, as required by the State Order. On April 27, 2020, the Missouri Department of Health and Senior Services ("DHS") issued the "Show Me Strong Recovery Order," which went into effect on May 4, 2020 and remained in effect through May 31, 2020. On May 28, 2020, DHS issued the "Economic Reopening Order," which went into effect on June 1, 2020 and remained in effect until June 15, 2020. Both DHS orders provided guidelines for individuals and businesses in Missouri to gradually reopen economic and social activity. On June 16, 2020, the DHS orders expired and the State is not currently under a statewide public health order. Despite the expiration of statewide orders, cities and counties have the ability, and continue, to impose local public health orders restricting economic activities within the State. The proliferation of COVID-19 throughout the City and the surrounding central Missouri region may adversely impact the amount of property tax and sales tax revenues available to fund the City's general operations and may also negatively impact the amount of Net Revenues the City generates from the operation of the System that is pledged to pay debt service on the Bonds and the Previously Issued Parity Bonds if the economic ramifications of the spread of COVID-19 have a lasting impact on the economy in and around the City. In addition, the Governor has ordered the suspension of disconnection of utility services for those unable to pay during the COVID-19 outbreak. Significant instances of late payment or nonpayment could result in Net Revenues that are insufficient to pay debt service on the Bonds. Developments regarding COVID-19 continue to occur on a daily basis and the extent to which COVID-19 will impact the general operations of the City, the operation of the City's System and the ability of the City to generate sufficient Net Revenues from the operation of the System is highly uncertain and cannot be predicted. The Bonds do not constitute a general obligation of the City and do not constitute an indebtedness of the City within the meaning of any constitutional or statutory provision, limitation or restriction, and the taxing power of the City is not pledged to the payment of the Bonds or the interest thereon. See the section captioned "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS" in this Official Statement. Limited Obligations The Bonds are limited obligations of the City and are payable solely from and secured by a pledge of the Net Revenues of the System. The City's actual collection of these revenues is dependent upon, among other things, future changes in economic and other conditions that are unpredictable and cannot be determined at this time. The Bonds are not general obligations of the City and do not constitute indebtedness of the City within the meaning of any constitutional, statutory, or charter provision, limitation, or restriction. THE BONDS ARE NOT PAYABLE BY AND HAVE NO RECOURSE TO THE CITY'S POWERS OF TAXATION, AND THE BONDOWNERS HAVE NO LIEN ON OR SECURITY INTEREST IN ANY OF THE PHYSICAL ASSETS OF THE SYSTEM OR THE CITY. Additional Bonds Under the Bond Ordinance, the City may issue additional bonds in certain circumstances. Any additional bonds may be secured on a parity basis with the Bonds if certain tests are met, or may be junior and subordinate to the Bonds. The issuance of such additional System Revenue Bonds may have a dilutive effect -14- on the debt service coverage ratio for the Owners of the Bonds. See the discussion of additional System Revenue Bonds and the conditions on which they may be issued under the sections captioned "Parity Bonds" and "Junior Lien Bonds" in Appendix C attached to this Official Statement. In addition to the tests that must be met under the Bond Ordinance for the City to issue additional System Revenue Bonds on parity with the Bonds, in order for the City to issue additional System Revenue Bonds to finance System capital improvements, the City will need to call an election at which at least a majority of the qualified voters of the City approve the issuance of the additional System Revenue Bonds for the purpose of financing such System improvements. Currently, the City anticipates it may call an election as early as April 2021 at which it may ask voters to approve the issuance of System Revenue Bonds in the principal amount of approximately $15,000,000 to $20,000,000 to finance certain System improvements, such as the replacement of biosolids sludge equipment and the construction of a regional pump station in order to extend System services to certain unincorporated areas of Cole County, Missouri, located west of the City limits. No Mortgage on the System Payment of the principal of and interest on the Bonds is not secured by any deed of trust, mortgage, or other lien on any real or personal property. The Bonds are payable solely from Net Revenues derived from the City's operation of the System. Risk of IRS Audit The Internal Revenue Service has established an ongoing program to audit tax-exempt obligations to determine the legitimacy of the tax status of such obligations. No assurance can be given that the Internal Revenue Service will not commence an audit of the Bonds. Bondowners are advised that, if an audit of the Bonds were commenced, in accordance with its current published procedures, the Internal Revenue Service is likely to treat the City as the taxpayer, and the Bondowners may not have a right to participate in such audit. Public awareness of any audit could adversely affect the market value and liquidity of the Bonds during the pendency of the audit, regardless of the ultimate outcome of the audit. Taxability The Bonds are not subject to prepayment nor is the interest rate subject to adjustment in the event of a determination by the Internal Revenue Service or a court of competent jurisdiction that the interest paid or to be paid on any Bonds is or was includible in the gross income of the Owners of the Bonds for federal income tax purposes. It may be that Owners of the Bonds would continue to hold their Bonds, receiving principal and interest as and when due, but would be required to include such interest payments in gross income for federal income tax purposes. Investment Rating and Secondary Market The lowering or withdrawal of the investment rating initially assigned to the Bonds could adversely affect the market price for and the marketability of the Bonds. There is no assurance that a secondary market will develop for the purchase and sale of the Bonds. Prices of municipal securities in the secondary market are subject to adjustment upward and downward in response to changes in the credit markets and changes in operating performance of the entities operating the facilities subject to the municipal securities. From time to time the secondary market trading in selected issues of municipal securities will fluctuate as a result of the financial condition or market position of the underwriter, prevailing market conditions, or a material adverse change in the operations of that entity, whether or not the subject securities are in default as to principal and interest payments, and other factors which may give rise to uncertainty concerning prudent secondary market practices. Municipal securities are generally viewed as long-term investments, subject to material unforeseen changes in the investor's circumstances, and may require commitment of the investor's funds for an indefinite period of time, perhaps until maturity. -15- Loss of Premium from Prepayment Any person who purchases a Bond at a price in excess of its principal amount or who holds such Bond trading at a price in excess of par should consider the fact that the Bonds are subject to redemption prior to maturity at the Redemption Prices described herein in the event such Bonds are redeemed prior to maturity. See the section captioned "THE BONDS — Redemption Provisions" herein. Defeasance Risks When all of the Bonds are deemed paid as provided in the Bond Ordinance, the requirements contained in the Bond Ordinance and all other rights granted to Bondowners thereby shall terminate. Bonds or scheduled interest payments thereon shall be deemed to have been paid and discharged within the meaning of the Bond Ordinance if there has been deposited with the Paying Agent, or other commercial bank or trust company and having full trust powers, at or prior to the Stated Maturity or Redemption Date of said Bonds or the interest payments thereon, in trust for and irrevocably appropriated thereto, moneys and Defeasance Obligations which, together with the interest to be earned on any such Defeasance Obligations, will be sufficient for the payment of the principal of said Bonds and interest accrued to the stated maturity or Redemption Date, or if default in such payment has occurred on such date, then to the date of the tender of such payments; provided, however, that if any such Bonds are to be redeemed prior to their stated maturity, (1) the City has elected to redeem such Bonds, and (2) either notice of such redemption shall have been given, or the City shall have given irrevocable instructions, or shall have provided for an escrow agent to give irrevocable instructions, to the Paying Agent to give such notice of redemption in compliance with the Bond Ordinance. Defeasance Obligations include, in addition to cash and obligations pre -refunded with cash, bonds, notes, certificates of indebtedness, treasury bills and other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed as to full and timely payment by, the United States of America. Historically, such United States obligations have been rated in the highest rating category by the rating agencies. There is no legal requirement in the Bond Ordinance that Defeasance Obligations consisting of such United States obligations be or remain rated in the highest rating category by any rating agency. Prices of municipal securities in the secondary market are subject to adjustment upward and downward in response to changes in the credit markets and that could include the rating of Bonds defeased with Defeasance Obligations to the extent the Defeasance Obligations have a change or downgrade in rating. Enforcement of Remedies The enforcement of the remedies under the Bond Ordinance may be limited or restricted by federal or state laws or by the application of judicial discretion, and may be delayed in the event of litigation to enforce the remedies. State laws concerning the use of assets of political subdivisions and federal and state laws relating to bankruptcy, fraudulent conveyances, and rights of creditors may affect the enforcement of remedies. Similarly, the application of general principles of equity and the exercise of judicial discretion may preclude or delay the enforcement of certain remedies. The legal opinions to be delivered with the delivery of the Bonds will be qualified as they relate to the enforceability of the various legal instruments by reference to the limitations on enforceability of those instruments under (1) applicable bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors' rights, (2) general principles of equity, and (3) the exercise of judicial discretion in appropriate cases. No Bond Reserve Fund The City has not established a reserve account to secure the payment of the principal of and interest on the Bonds. There is no assurance that the net revenues of the System will be sufficient or that the City will have other funds available for the timely payment of the principal of and interest on the Bonds. The Debt -16- Service Reserve Accounts established in connection with the Previously Issued Parity Bonds secure only those bonds. Factors Affecting the Operations of the System One or more of the following factors or events, or the occurrence of other unanticipated factors or events, could adversely affect the System's operations and financial performance to an extent that cannot be determined at this time: 1. Changes in Management. Changes in key management personnel could affect the capability of the management of the System. 2. Future Economic Conditions. Increased unemployment or other adverse economic conditions or changes in demographics in the service area of the City; cost and availability of energy; an inability to control expenses in periods of inflation and difficulties in increasing charges could affect the System's operation and financial performance. 3. Insurance Claims. Increases in the cost of general liability insurance coverage and the amounts paid in settlement of liability claims not covered by insurance. 4. Environmental Regulation. Sewer utilities are both subject to continuing environmental regulation. Federal, state and local standards and procedures which regulate the environmental impact of water and sewer utilities are subject to change. These changes may arise from continuing legislative, regulatory and judicial action regarding such standards and procedures. Consequently, there is no assurance that facilities in operation will remain subject to the regulations currently in effect, will always be in compliance with further regulations or will always be able to obtain all required operating permits. An inability to comply with environmental standards could result in reduced operating levels or the complete shutdown of facilities not in compliance. Legislative, regulatory, administrative or enforcement action involving environmental controls could adversely affect the operation of the facilities of the System. For example, if property of the System is determined to be contaminated by hazardous materials, the City could be liable for significant clean-up costs even if it were not responsible for the contamination. 5. Natural Disasters. The occurrence of natural disasters, such as floods or droughts, could damage the facilities of the System, affect water supply, interrupt services or otherwise impair operations and the ability of the System to produce revenues. 6. Miscellaneous Factors. Sewer utilities in general have experienced, or may in the future experience, problems including (a) the effects of inflation upon the costs of operation of facilities, (b) uncertainties in predicting future demand requirements, (c) increased financing requirements coupled with the increased cost and uncertain availability of capital, and (d) compliance with rapidly changing environmental regulations and requirements. LEGAL MATTERS Legal Proceedings As of the date hereof, there is no controversy, suit or other proceeding of any kind pending or threatened wherein or whereby any question is raised or may be raised, questioning, disputing or affecting in any way the legal organization of the City or its boundaries, or the right or title of any of its officers to their respective offices, or the legality of any official act in connection with the authorization, issuance and sale of the Bonds, or the constitutionality or validity of the Bonds or any of the proceedings had in relation to the -17- authorization, issuance or sale thereof, or the imposition and collection of rates and charges to pay the principal and interest thereof, or which might affect the City's ability to meet its obligations to pay the Bonds. Approval of Legality All legal matters incident to the authorization and issuance of the Bonds are subject to the approval of Gilmore & Bell, P.C., Kansas City, Missouri, as Bond Counsel to the City. Gilmore & Bell, P.C., will also pass upon certain legal matters relating to this Official Statement, as disclosure counsel to the City. The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of that expression of professional judgment, of the transactions opined upon, or of the future performance of parties to such transaction, nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. TAX MATTERS The following is a summary of the material federal and State of Missouri income tax consequences of holding and disposing of the Bonds. This summary is based upon laws, regulations, rulings and judicial decisions now in effect, all of which are subject to change (possibly on a retroactive basis). This summary does not discuss all aspects of federal income taxation that may be relevant to investors in light of their personal investment circumstances or describe the tax consequences to certain types of owners subject to special treatment under the federal income tax laws (for example, dealers in securities or other persons who do not hold the Bonds as a capital asset, tax-exempt organizations, individual retirement accounts and other tax deferred accounts, and foreign taxpayers), and, except for the income tax laws of the State of Missouri, does not discuss the consequences to an owner under any state, local or foreign tax laws. The summary does not deal with the tax treatment of persons who purchase the Bonds in the secondary market. Prospective investors are advised to consult their own tax advisors regarding federal, state, local and other tax considerations of holding and disposing of the Bonds. Opinion of Bond Counsel In the opinion of Gilmore & Bell, P.C., as Bond Counsel to the City, under the law existing as of the issue date of the Bonds: Federal and State of Missouri Tax Exemption. The interest on the Bonds (including any original issue discount properly allocable to an owner thereof)is excludable from gross income for federal income tax purposes and is exempt from income taxation by the State of Missouri. Alternative Minimum Tax. The interest on the Bonds is not an item of tax preference for purposes of computing the federal alternative minimum tax. Bank Qualification. The Bonds are "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. Bond Counsel's opinions are provided as of the date of the original issue of the Bonds, subject to the condition that the City 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, excludable from gross income for federal income tax purposes. The City has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for an federal and State of Missouri income tax purposes retroactive to the date of issuance of the Bonds. Bond Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with respect to the Bonds, but has reviewed the discussion under the heading "TAX MATTERS." Other Tax Consequences Original Issue Discount. For federal income tax purposes, original issue discount is the excess of the stated redemption price at maturity of a Bond over its issue price. The issue price of a Bond is generally the first price at which a substantial amount of the Bonds of that maturity have been sold to the public. Under Section 1288 of the Code, original issue discount on tax-exempt bonds accrues on a compound basis. The amount of original issue discount that accrues to an owner of a Bond during any accrual period generally equals (1) the issue price of that Bond, plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (2) the yield to maturity on that Bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), minus (3) any interest payable on that Bond during that accrual period. The amount of original issue discount accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excludable from gross income for federal income tax purposes, and will increase the owner's tax basis in that Bond. Prospective investors should consult their own tax advisors concerning the calculation and accrual of original issue discount. Original Issue Premium. For federal income tax purposes, premium is the excess of the issue price of a Bond over its stated redemption price at maturity. The issue price of a Bond is generally the first price at which a substantial amount of the Bonds of that maturity have been sold to the public. Under Section 171 of the Code, premium on tax-exempt bonds amortizes over the term of the Bond using constant yield principles, based on the purchaser's yield to maturity. As premium is amortized, the owner's basis in the Bond and the amount of tax-exempt interest received will be reduced by the amount of amortizable premium properly allocable to the owner, which will result in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes on sale or disposition of the Bond prior to its maturity. Even though the owner's basis is reduced, no federal income tax deduction is allowed. Prospective investors should consult their own tax advisors concerning the calculation and accrual of bond premium. Sale, Exchange or Retirement of Bonds. Upon the sale, exchange or retirement (including redemption) of a Bond, an owner of the Bond generally will recognize gain or loss in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale, exchange or retirement of the Bond (other than in respect of accrued and unpaid interest) and such owner's adjusted tax basis in the Bond. To the extent a Bond is held as a capital asset, such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the Bond has been held for more than 12 months at the time of sale, exchange or retirement. Reporting Requirements. In general, information reporting requirements will apply to certain payments of principal, interest and premium paid on the Bonds, and to the proceeds paid on the sale of the Bonds, other than certain exempt recipients (such as corporations and foreign entities). A backup withholding tax will apply to such payments if the owner fails to provide a taxpayer identification number or certification of foreign or other exempt status or fails to report in full dividend and interest income. The amount of any backup withholding from a payment to an owner will be allowed as a credit against the owner's federal income tax liability. Collateral Federal Income Tax Consequences. Prospective purchasers of the Bonds should be aware that ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch profits tax, life insurance companies, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred -19- certain expenses allocable to the Bonds. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Bonds should consult their tax advisors as to the applicability of these tax consequences and other federal income tax consequences of the purchase, ownership and disposition of the Bonds, including the possible application of state, local, foreign and other tax laws. RATING S&P has assigned the Bonds the rating of "A+", as set forth on the cover page of this official statement. The rating reflects only the view of S&P at the time such rating is given, and the Underwriter and the City make no representation as to the appropriateness of such rating. An explanation of the significance of such rating may be obtained only from S&P. The City has furnished S&P with certain information and materials relating to the Bonds and the City that have not been included in this Official Statement. Generally, rating agencies base their rating on the information and materials so furnished and on investigations, studies and assumptions made by the rating agencies. The above rating are not a recommendation to buy, sell or hold the Bonds. There is no assurance that a particular rating will be maintained for any given period of time or that it will not be lowered or withdrawn entirely if, in the judgment of the rating agency originally establishing such rating, circumstances so warrant. Except as described in the City's Continuing Disclosure Undertaking, neither the Underwriter nor the City have undertaken any responsibility to bring to the attention of the holders of the Bonds any proposed revision or withdrawal of the rating of the Bonds or to oppose any such proposed revision or withdrawal. See "Appendix D - FORM OF CONTINUING DISCLOSURE UNDERTAKING" attached to this Official Statement. Any such revision or withdrawal of the rating could have an adverse effect on the market price and marketability of the Bonds. CONTINUING DISCLOSURE Pursuant to a Continuing Disclosure Undertaking (the "Disclosure Undertaking"), the City has agreed to provide to the MSRB, via the EMMA system, not later than April 30th after the end of each fiscal year, beginning with the City's fiscal year ending October 31, 2020, (1) the audited financial statements of the City for the prior fiscal year and (2) certain operating data of the City in accordance with the Rule. The financial statements of the City are audited by the City's independent certified public accountants. Under the Disclosure Undertaking, the City has also agreed to provide prompt notice of the occurrence of certain enumerated events relating to the Bonds in compliance with the Rule. See also Appendix D - "Form of Continuing Disclosure Undertaking" to this Official Statement. The City has entered into prior undertakings under Rule. The City believes that in the past five years it has complied in all material respects with its prior undertakings under the Rule. The City has also approved a Tax and Securities Compliance Policy and Procedure dated May 5, 2014, setting forth policies and procedures to promote compliance with federal tax law and with the City's continuing disclosure undertakings for all tax-exempt and other tax -advantaged obligations of the City after issuance of such bonds and obligations. In connection with the issuance of the City's Sewerage System Revenue Bonds, Series 2014, the City entered into a five-year engagement with Gilmore & Bell, P.C., whereby Gilmore & Bell, P.C., assists the City in preparing and submitting the City's Annual Reports on a timely basis to the MSRB, via EMMA. -20- MISCELLANEOUS Financial Advisor Piper Sandler & Co., Leawood, Kansas, is employed as financial advisor to the City to render certain professional services, including advising the City on a plan of financing in connection with the planning, structuring and issuance of the Bonds and various other debt related matters (the "Financial Advisor"). The Financial Advisor will not be a manager or a member of any purchasing group submitting a proposal for the purchase of the Bonds. Certain Relationships Gilmore & Bell, P.C., as Bond Counsel to the City, has represented the Financial Advisor in transactions unrelated to the issuance of the Bonds, but is not representing the Financial Advisor in connection with the issuance of the Bonds. Underwriting Based upon bids received by the City on July 20, 2020, the Bonds were awarded to [ ] (the "Underwriter"). The Bonds are being purchased for reoffering by the Underwriter. The Underwriter has agreed to purchase the Bonds from the City at a price equal to $ (representing the par amount of the Bonds less an underwriters' discount of $ and plus [net] original issue premium of $ ). The Underwriter is purchasing the Bonds from the City for resale in the normal course of the Underwriter's business activities. The Underwriter may sell certain of the Bonds at a price greater than such purchase price, as shown on the inside cover page hereof. The Underwriter reserves the right to offer any of the Bonds to one or more purchasers on such terms and conditions and at such price or prices as the Underwriter, in its discretion, shall determine. The Underwriter reserves the right to join with dealers and other purchasers in offering the Bonds to the public. The Underwriter may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) at prices lower than the public offering prices. Certification and Other Matters Regarding Official Statement Information set forth in this Official Statement has been furnished or reviewed by certain officials of the City, certified public accountants, and other sources, as referred to herein, which are believed to be reliable. Any statements made in this Official Statement involving matters of opinion, estimates or projections, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates or projections will be realized. The descriptions contained in this Official Statement of the Bonds and the Bond Ordinance do not purport to be complete and are qualified in their entirety by reference thereto. Simultaneously with the delivery of the Bonds, the Mayor of the City, acting on behalf of the City, will furnish to the Underwriter a certificate which shall state, among other things, that to the best knowledge and belief of such officer, this Official Statement (and any amendment or supplement hereto) as of the date of sale and as of the date of delivery of the Bonds does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements herein, in light of the circumstances under which they were made, not misleading in any material respect. -21- The form of this Official Statement, and its distribution and use by the Underwriter has been approved by the City. Neither the City nor any of its councilmembers, officers or employees, in either their official or personal capacities, has made any warranties, representations or guarantees regarding the financial condition of the City or the City's ability to make payments required of it; and further, neither the City nor its officers, directors or employees assumes any duties, responsibilities or obligations in relation to the issuance of the Bonds other than those either expressly or by fair implication imposed on the City by the Bond Ordinance. [Remainder of this page intentionally left blank.] -22- CITY OF JEFFERSON, MISSOURI LI -A -23- Mayor APPENDIX A CITY OF JEFFERSON, MISSOURI Gilmore & Bell, P.C. Draft v3 — June 30, 2020 APPENDIX A CITY OF JEFFERSON, MISSOURI GENERAL, ECONOMIC AND FINANCIAL INFORMATION TABLE OF CONTENTS GENERAL AND ECONOMIC INFORMATION CONCERNING THE CITY Locationand Size..................................................................................... Government and Organization................................................................... City Services, Utilities.............................................................................. Transportation and Communication Facilities ............................................ Medical and Health Facilities.................................................................... Educational Institutions and Facilities....................................................... Employment............................................................................................. Housing.................................................................................................... Building Construction............................................................................... General Demographic Statistics................................................................ Tornado and Flooding in Summer 2019 ..................................................... HISTORY AND OPERATION OF THE SYSTEM Description of the System ........................... Utility Rates ............................................... Customers .................................................. FINANCIAL INFORMATION CONCERNING THE SYSTEM Accounting, Budgeting and Auditing Procedures ................ Financial Statements.......................................................... Long -Term Sewerage System Revenue Bond Obligations.. Historical Debt Service Coverage ....................................... Debt Service Schedule....................................................... Summary of Operations for Sewer Fund .............................. Balance Sheet for Sewer Fund ............................................. DEBT INFORMATION OF THE CITY ................ Long -Term General Obligation Indebtedness Legal Debt Capacity .................................... Series 2019 Special Obligation Bonds.......... Other Obligations of the City ....................... FINANCIAL INFORMATION ..................................... Accounting, Budgeting and Auditing Procedures Sources of Revenue ........................................... Financial Summary ............................................ Risk Management .............................................. Self -Funded Health Insurance ............................ Employee Retirement and Pension Plans............ Other Post -Employment Benefits ....................... History of Property Valuations ........................... Property Tax Levies and Collections .................. Sales Tax Collections ......................................... Page A_ 1 2 2 2 3 13 13 13 14 15 16 16 17 18 19 19 19 20 20 21 21 GENERAL AND ECONOMIC INFORMATION CONCERNING THE CITY Location and Size The majority of the City is located in Cole County, Missouri, and a portion of the City is located in Callaway County, Missouri (collectively, the "Counties"), in the central portion of the State of Missouri approximately 150 miles from both Kansas City and St. Louis, Missouri. The City encompasses approximately 37.48 square miles and has a 2018 estimated population of 42,838 according to the U.S. Census Bureau. Government and Organization The City is the capital of Missouri and county seat of Cole County. It is a home rule charter city and political subdivision of the State of Missouri, organized, existing and operating under the constitution and laws of the State of Missouri and the City Charter, adopted in 1986, and exercises powers of municipal government specifically granted by the State of Missouri. The City is governed by the Mayor, elected for a four-year term, and ten Council members elected for overlapping two-year terms from five districts. The Mayor presides over Council meetings, and has veto power over Council enactments. The City Administrator is nominated and appointed by the Mayor, and is responsible for coordination and general supervision of all departmental operations. The City Administrator recommends the appointment and removal of department and division heads to the Mayor and the Council, with the exception of those divisions governed under the Parks and Recreation Commission and the Police Personnel Board. The City budget is prepared by the City Administrator after consultation with each department, and is reviewed and adopted by the City Council. As required by Missouri law, the aggregate City budget may not include any expenditures in excess of anticipated revenues. The City's fiscal year ends on October 31 and begins on November 1. The elected City Council members and Mayor of the City are as follows: M Councilmember Fitzwater was elected in April 2017 to serve the remaining one-year term of former councilmember Glen Costales who resigned from the City Council in November 2017. Several key members of the City management are listed below: Steven S. Crowell, Jr., City Administrator. Mr. Crowell was selected to be the City's City Administrator in March of 2014. He manages the City Departments which are Administration (City Clerk, Human Resources, Information Technology Services and City Counselor), Public Works, Planning and Protective Services, Finance, Fire, Police and coordinates with Parks and Recreation and Forestry. A-1 First Current Name Title Term Beuan Term Began Term Expires Carrie Tergin Mayor 2015 2019 2023 Hank Vogt Ward 1, Councilmember 2020 2020 2022 David Ken -ma Ward 1, Councilmember 2017 2019 2021 Mike Lester Ward 2, Councilmember 2020 2020 2022 Laura A. Ward Ward 2, Councilmember 2015 2019 2021 Erin L. Wiseman Ward 3, Councilmember 2016 2020 2022 Ken Hussey Ward 3, Councilmember 2013 2019 2021 Carlos M. Graham Ward 4, Councilmember 2013 2019 2021 Ron L. Fitzwater Ward 4, Councilmember 2017(1) 2020 2022 Mark Schreiber Ward 5, Councilmember 2015 2019 2021 Jon Hensley Ward 5, Councilmember 2018 2020 2022 M Councilmember Fitzwater was elected in April 2017 to serve the remaining one-year term of former councilmember Glen Costales who resigned from the City Council in November 2017. Several key members of the City management are listed below: Steven S. Crowell, Jr., City Administrator. Mr. Crowell was selected to be the City's City Administrator in March of 2014. He manages the City Departments which are Administration (City Clerk, Human Resources, Information Technology Services and City Counselor), Public Works, Planning and Protective Services, Finance, Fire, Police and coordinates with Parks and Recreation and Forestry. A-1 Ryan Moehlman, City Counselor. Mr. Moehlman was selected to be the City's City Counselor in 2016. He holds a Juris Doctorate (J.D.) from the University of Missouri - Kansas City School of Law. Mr. Moehlman supervises the Law Department and represents the City in legal matters. Margaret Mueller, Director of Finance. Ms. Mueller was selected to be the City's Director of Finance and Information Technology Services in March of 2016. Ms. Mueller services as the fiscal officer of the City and supervises the finance division. Ms. Mueller's responsibilities include planning, organizing and supervising the fiscal management of the City, advising the City Administrator and City Council on financial matters, and supervising and managing Information Technology services and staff. Ms. Mueller has a B.S. Degree in Business Administration with an emphasis in Accounting from Columbia College and is a Certified Public Accountant. Matt Morasch, Public Works Director. Mr. Morasch became Public Works Director for the City in 2013. He has a B.S. Degree in Civil Engineering from the University of Missouri and is a registered professional engineer (PE) in the State of Missouri. Mr. Morasch supervises the divisions of engineering, wastewater, parking, transit, airport, central maintenance, stormwater and streets. Eric Seaman, PE, Wastewater Division Director. Mr. Seaman has been employed as the Waste Water Division Director since September of 2004. Mr. Seaman has a B.S. Degree in Civil Engineering from the University of Missouri -Rolla and is a registered professional engineer (PE) in the State of Missouri. Mr. Seaman supervises the day-to-day operations required for the System. City Services, Utilities The City's Police Department is comprised of approximately 89 sworn officers and 37 civilian personnel, who are all assigned to one of three divisions within the Police Department: operations, special services, and support services. The City Fire Department is comprised of approximately 72 fire suppression personnel and 4 administrative staff personnel. The City Fire Department maintains five fire stations, an administration office, reserve apparatus storage facility and a training facility. Electricity and natural gas are provided to the community by Ameren UE and Three Rivers Electric. Water is provided to the City by Missouri American Water Company, Public Water District #1, Public Water District #2 and Public Water District #4. Wastewater and sewage treatment is provided by the System, which is owned and operated by the City. Transportation and Communication Facilities The City is located 30 miles south of Interstate 70. U.S. Highways 54, 63 and 50 go through the City. The City operates a public bus system. Amtrak makes daily stops in the City. Local phone service is provided by CenturyLink. One daily newspaper, the News Tribune, is published in the City. Several radio stations are operated in the City. Jefferson City Memorial Airport, located two miles north of Jefferson City's central business district, is owned by the City and operated by the City Department of Public Works. The Jefferson City Memorial Airport sustained significant damage as a result of the flooding of the Missouri River in May and June of 2019 and was closed for approximately 51 days during that period. The Airport is currently operational; however, the City is in the process of demolishing the Airport terminal, which was severely damaged, and plans to construct a new terminal building. Medical and Health Facilities The City is served by two hospitals including St. Mary's Health Center and Capital Region Medical Center, as well as several privately -owned, multi -specialty clinics. In addition other hospitals and medical A-2 centers close to the City include Callaway Community Hospital and Fulton State Hospital about 22 miles in Fulton, Missouri and Boone Hospital Center about 26 miles in Columbia, Missouri. Educational Institutions and Facilities Public elementary and secondary education is provided by the Jefferson City School District (the "District"). The District's boundaries encompasses the entire City as well as portions of Cole County and Callaway County outside of the City's limits. The District consists of an early childhood center (Pre -K), 11 elementary schools (grades K-5), two middle schools (grades 6-8), one freshman center (grade 9), two high schools (grades 9-12), one career center providing vocational training (grades 9-12) and one family center/alternative high school (grades 9-12), with an approximate total enrollment of 9,049 students. The District is also in the process of constructing a new high school that is expected to be completed by January 2020. The City also has four parochial elementary schools and three parochial high schools. There are also two private boarding schools in the central -Missouri region area: Kemper Military School in Boonville, Missouri and Missouri Military Academy in Mexico, Missouri. There are numerous colleges and universities located in the area providing higher education opportunities, which include Lincoln University, located in the City; the University of Missouri -Columbia, located in Columbia, Missouri; Columbia College of Missouri, located in Columbia, Missouri; Stephens College, located in Columbia, Missouri; and State Technical College, located in Linn, Missouri. Employment Listed below is the most recent list of major employers located in the City and the number employed by each: Maior Employers State of Missouri Jefferson City Public Schools Capital Region Medical Center Scholastic, Inc. Quaker Windows & Doors Central Bancompany SSM - St. Mary's Hospital ABB, Inc. City of Jefferson Walmart Supercenter (2 locations) Jefferson City Medical Group Source: Jefferson City Chamber of Commerce - 2018. Type of Business State government Public education Healthcare School material distribution Manufacturing Banking services Healthcare Manufacturing City government Retail Healthcare The following table sets forth unofficial employment figures for the City: Average for Total 683 Year Labor Force Employed 2020(') 20,624 19,941 2019 20,670 20,092 2018 20,291 19,738 2017 20,625 19,962 2016 21,321 20,505 Number of Employees 14,174 1,627 1,527 1,500 1,051 1,020 982 865 830 665 629 Unemployment Unemployed Rate 683 3.31% 578 2.80% 553 2.73% 663 3.21% 816 3.83% Source: MERIC (Missouri Economic Research and Information Center). (1) Average for January 2020 through March 2020. The number of unemployed individuals in the City has likely increased in April, May and June of 2020 due to the recent outbreak of COVID-19 and the restrictions imposed by the State of Missouri and A-3 the City resulting in the closure of certain "non-essential" businesses during a period beginning toward the end of March 2020 through May 3 2020. Housing The following table shows the median value of owner -occupied housing units in the City, Cole County, Callaway County and the State of Missouri: (2014-2018 Average Estimate) Median Home Value Jefferson City $145,200 Cole County 160,300 Callaway County 144,200 State of Missouri 151,600 Source: Missouri Census Data Center, American Community Survey, 5 -year estimates (2014-2018). Building Construction [**TO BE UPDATED**] The following table indicates the number of building permits and total estimated valuation of these permits issued within the City over the fiscal years ended October 31, 2015 through October 31, 2019. These numbers reflect permits issued either for new construction or for major renovation. Fiscal Year Ended October 31 2015 2016 2017 2018 2019 Number 403 468 384 408 597 Value $50,308,558 $57,258,162 $69,686,310 $160,445,576(') Source: The City. 0) Increase as a result of permits for commercial alterations and additions valued at approximately $79,588,687 and a permit for construction of a new high school for Jefferson City School District valued at approximately $54,698,812. General Demographic Statistics Population. The following table shows the population of the City according to the last three decennial censuses and the latest available estimate. Year Population 2018") 43,013 2010 43,079 2000 39,636 1990 35,481 Source: U.S. Census Bureau. (1) U.S. Census Bureau — American FactFinder — 2018 Population Estimates (as of July 1, 2018). A-4 Income. The following table presents per capita personal income(') and the estimated median household income additional for the City, Cole County, Callaway County and the State of Missouri: Cole Callaway State of City County County Missouri Median Household Income (2014-2018 average) $50,832 $57,587 $55,376 $53,560 Per Capital Income (2014-2018 average) $29,537 29,433 25,069 26,797 Source: Missouri Census Data Center, American Community Survey, 5 -year estimates (2014-2018). (1) Per Capita Personal Income is the annual total personal income of residents divided by resident population as of July 1. "Personal Income" is the sum of net earnings by place of residence, rental income of persons, personal dividend income, personal interest income, and transfer payments. "Net Earnings" is earnings by place of work — the sum of wage and salary disbursements (payrolls), other labor income, and proprietors' income — less personal contributions for social insurance, plus an adjustment to convert earnings by place of work to a place -of -residence basis. Personal Income is measured before the deduction of personal income taxes and other personal taxes and is reported in current dollars (no adjustment is made for price changes). Tornado and Flooding in Summer 2019 On May 22, 2019, a tornado struck in an approximate 3 square -mile area of the City causing damage to various commercial and residential properties as well as properties and infrastructure owned and maintained by the State of Missouri and the City. In May and June of 2019, severe storms and rainfall also resulted in flooding of the Missouri River and various waterways throughout the central Missouri region, including certain areas of the City. While the City is located on the Missouri River, the vast majority of the commercial and residential properties within the City, as well as the majority of City -owned property, is located on the south side of the Missouri River (in Cole County, Missouri), which is at an elevation higher than the banks of the Missouri River. As a result of the higher elevation, this portion of the City only sustained minimal damage as a result of the flooding that occurred in the Summer of 2019. The area of the City located on the north side of the Missouri River (in Callaway County, Missouri), which is where the City -owned Jefferson City Memorial Airport is located, is at a lower elevation that borders the Missouri River and has historically been prone to flooding. As a result of the lower elevation, the properties located in this area, including the City -owned Jefferson City Memorial Airport, sustained significant damage as a result of flooding in the Summer of 2019; however, this area of the City is sparsely populated and only contains a small number of commercial properties. Although the tornado and flooding has resulted in increased expenses for the City, including increased operating expenses related to the System, and caused property damage that may decrease the future assessed valuation of residential and commercial properties that sustained damage within the City, the City does not anticipate that these repercussions will materially impact the City's general or financial operations or System operations in future fiscal years. The City applied for and received federal grants to offset a portion of the costs the City has incurred as a result of repairing and reconstructing property and infrastructure damaged by the tornado and flooding, including costs incurred for repairing System infrastructure. However, as a result of the increased System operating expenses incurred during the fiscal year ended October 31, 2019, the Net Revenues of the System were only equal to approximately 96% of the Debt Service Requirements to be paid by the City during the fiscal year ended October 31, 2019, which fell below the 110% Rate Covenant requirement set forth in the City's Previously Issued Parity Ordinances. See the table under the caption "FINANCIAL INFORMATION CONCERNING THE SYSTEM - Historical Debt Service Coverage" in this Appendix A and the discussion under the caption "BONDOWNERS' RISK - Failure to Comply with Rate Covenant in Fiscal Year Ended October 31, 2019" in this Official Statement. A-5 HISTORY AND OPERATION OF THE SYSTEM Description of the System The City's System includes [34] pumping stations, [440] miles of sanitary sewer lines, an [I I] million gallons per day ("mgd") treatment facility and a [0.8] mgd treatment facility. The System has a capacity of 11 mgd, with average daily flows of 7 mgd and peak daily flows of 40 mgd. [This capacity will serve the needs of the City for the next 20-25 years.] The City has been served by a sewer system since pre -1895. Treatment was provided in the late sixties when major interceptors and pumping stations were constructed to collect sanitary wastes and convey them to a central plant for treatment. The City acquired a major network of sewer mains from the County in the early 1990's which serves an area of approximately [ 11 ] square miles outside the City. The state agency governing such systems, the Department of Natural Resources, has designated the City as a regional sewer authority. The community of Holts Summit contracts with the City for treatment and the community of St. Martins contracts with the City for treatment and maintenance. The System is operated by the Wastewater Division within the Department of Public Works who reports to the City Administrator. The elected Council sets policy for the Wastewater Division by ordinance. The utility currently operates all systems with [33] employees. Utility Rates Pursuant to the City's current rate ordinance pertaining to the City's System, which went into effect on June 1, 2017, all residential, commercial, industrial and governmental establishments are charged for sewer service in accordance with the following rate table: Fixed Minimum Charge Volume Charge Per Month Per 100 Cubic Feet $11.33 $3.42 Source: City. A surcharge rate has been established for any wastewater discharged into the city treatment works which contains certain levels of suspended solids or biochemical oxygen demand ("BOD"). The surcharge for suspended solids is at a rate of $0.185 per pound, and the surcharge for BOD is at a rate of $0.106 per pound. [**All customers of the System located outside the corporate limits of the City are required to pay an additional charge for use of that part of the System that serves their respective area, which is triple the fixed rate. All customers of the System residing within the City of St. Martins, Missouri, corporate boundaries pay double the fixed rate.**]["Discuss rate charged to City of Holt Summit customers**] As further discussed under the caption "FINANCIAL INFORMATION CONERNING THE SYSTEM - Historical Debt Service Coverage" in this Appendix A, the City has engaged Rafetlis Financial Consultants, Inc. ("Raftelis"), to conduct a comprehensive rate study for the City's System. The City expects Raftelis to complete the rate study by the end of the City's current fiscal year October 31, 2020, and the City will likely implement increased System rates and charges based upon the conclusions and recommendations of the Raftelis rate study in order to ensure that the System generates sufficient Net Revenues to meet the 110% Rate Covenant requirement in future fiscal years. G6: Customers The total number of customers of the System as of fiscal year ended October 31, 2019 was 20,812. Below is a list of the top ten customers of the System during fiscal year ended October 31, 2019, and the approximate average amount of System use: Customer % of System Usage Jefferson City Correctional Center 2.00% Unilver, Inc. 1.96 Algoa Correctional Center 1.94 St. Mary's Health Center 0.43 Capital Region Health Center 0.42 Central Dairy 0.42 Capitol Plaza Hotel 0.28 Lincoln University 0.25 Schumate Chapel Trailer Park 0.20 Missouri Highway Headquarters 0.18 Total 8.08% Source: City. The following table sets forth the total number of customers of the System for the last three fiscal years: Fiscal Year Ended October 31 Number of Customers 2019 20,812 2018 20,616 2017 20,764 FINANCIAL INFORMATION CONCERNING THE SYSTEM Accounting, Budgeting and Auditing Procedures An annual budget of estimated receipts and disbursements of the System for the coming fiscal year is prepared by the City Administrator and is presented to the City Council for approval. The fiscal year of the City is November 1 through October 31. The budget lists estimated receipts by fund and sources and estimated disbursements by funds and purposes and includes a statement of the rates required to raise each amount shown on the budget as coming from System revenues. Financial Statements Audited financial statements of the City, which include the financial statements of the wastewater fund for the System, as of and for the fiscal year ended October 31, 2019, are included in the City's 2019 CAFR in Appendix B to this Official Statement. These financial statements have been audited by Evers & Company, CPA's, L.L.C., Jefferson City, Missouri, independent certified public accountants, to the extent and for the periods indicated in their report which is also included in Appendix B hereto. A-7 Long -Term Sewerage System Revenue Bond Obligations Current Outstanding System Revenue Bonds. The following table sets forth all of the outstanding System Revenue Bonds of the City, which are payable solely from the Net Revenues derived by the City from the operation of the City's System, including the Bonds being offered, but excluding the Refunded Bonds: (1) Reflects the Series 2010B Bonds scheduled to mature on September 1, 2020, that will remain outstanding after the issuance of the Bonds. Proceeds of the Bonds will be used to refund and redeem the City's remaining Series 2010B Bonds scheduled to mature on September 1, 2025, and thereafter, outstanding in the aggregate principal amount of $5,790,000. After September 1, 2020, the Series 2010B Bonds will no longer be outstanding. Additional System Revenue Bonds. Under the Bond Ordinance and the Previously Issued Parity Bond Ordinances, the City may issue additional System Revenue Bonds in certain circumstances. Any additional System Revenue Bonds may be secured on a parity basis with the Bonds if certain tests are met, or may be junior and subordinate to the Bonds. The issuance of such additional System Revenue Bonds may have a dilutive effect on the debt service coverage ratio for the Owners of the Bonds. See the discussion of additional System Revenue Bonds and the conditions on which they may be issued under the sections captioned "Parity Bonds" and "Junior Lien Bonds" in Appendix C attached to this Official Statement and the section captioned `BONDOWNERS' RISKS - Additional Bonds" in the Official Statement. Preliminary, subject to change. A-8 Original Outstanding Name of Bonds Principal Amount Principal Amount Sewerage System Improvement and Refunding Revenue Bonds $24,875,000 $3,740,000 (State Revolving Fund Program), Series 2001B Sewerage System Revenue Bonds (State Revolving Fund Program), $4,600,000 $1,575,000 Series 2005A Sewerage System Refunding and Improvement Revenue Bonds $10,105,000 $4,025,000 (State Revolving Fund Program), Series 2005B Sewerage System Revenue Bonds (State Revolving Fund $3,900,000 $2,310,000 Program), Series 2008 Taxable Sewerage System Revenue Bonds, Series 2010B (Build $6,445,000 $225,000(1)" America Bonds — Direct Payment) Sewerage System Revenue Bonds (State Revolving Fund $15,000,000 $10,723,000 Program), Series 2012 Sewerage System Revenue Bonds, Series 2014 $9,940,000 $8,225,000 Sewerage System Revenue Bonds, Series 2014 $9,380,000 $9,380,000 Sewerage System Refunding Revenue Bonds, Series 2020 $5,800,000 $5,800,000" Total Revenue Bonds $90,045,000 $46,003,000* (1) Reflects the Series 2010B Bonds scheduled to mature on September 1, 2020, that will remain outstanding after the issuance of the Bonds. Proceeds of the Bonds will be used to refund and redeem the City's remaining Series 2010B Bonds scheduled to mature on September 1, 2025, and thereafter, outstanding in the aggregate principal amount of $5,790,000. After September 1, 2020, the Series 2010B Bonds will no longer be outstanding. Additional System Revenue Bonds. Under the Bond Ordinance and the Previously Issued Parity Bond Ordinances, the City may issue additional System Revenue Bonds in certain circumstances. Any additional System Revenue Bonds may be secured on a parity basis with the Bonds if certain tests are met, or may be junior and subordinate to the Bonds. The issuance of such additional System Revenue Bonds may have a dilutive effect on the debt service coverage ratio for the Owners of the Bonds. See the discussion of additional System Revenue Bonds and the conditions on which they may be issued under the sections captioned "Parity Bonds" and "Junior Lien Bonds" in Appendix C attached to this Official Statement and the section captioned `BONDOWNERS' RISKS - Additional Bonds" in the Official Statement. Preliminary, subject to change. A-8 In addition to the tests that must be met under the Previously Issued Parity Bond Ordinances and the Bond Ordinance for the City to issue additional System Revenue Bonds on parity with the Bonds and Previously Issued Parity Bonds, in order for the City to issue additional System Revenue Bonds to finance System capital improvements, the City will need to call an election at which at least a majority of the qualified voters of the City approve the issuance of the additional System Revenue Bonds for the purpose of financing such System improvements. Currently, the City anticipates it may call an election as early as April 2021 at which it may ask voters to approve the issuance of System Revenue Bonds in the principal amount of approximately $15,000,000 to $20,000,000 to finance certain System improvements, such as the replacement of biosolids sludge equipment and the construction of a regional pump station in order to extend System services to certain unincorporated areas of Cole County, Missouri, located west of the City limits. Historical Debt Service Coverage The following table shows historical debt service coverage for all obligations of the System prepared for the last three fiscal years: Fiscal Year Ended October 31 2017 2018 2019 Operating Revenue $11,172,107 $11,564,490 $11,588,856 Non -Operating Revenue 1,095,188 969,275 869,551 Capital ContributionsM 184,267 202,011 183,576 Total Revenue $12,451,562 $12,735,776 $12,641,983 Operating Expenses (2) $5,834,648 $5,536,848 $6,812,546(3) Total Expenses $5,698,309 $5,834,648 $6,812,546 Net Revenue Available for Debt Service Debt Service Debt Service Coverage $6,616,914 $7,198,928 $5,829,437 $5,721,265 $6,065,813 $6,068,595 1.16X 1.19X 0.96X(4) (1) Capital contributions include federal grant moneys and customer contributions in the form of sewer capital recovery moneys received during fiscal years ended October 31, 2017 through October 31, 2019. (2) Excludes depreciation and amortization expenses. (3) Operating expenses increased during fiscal year ended October 31, 2019, due to numerous repairs to System infrastructure damaged by flooding in the Summer of 2019. (4) The City's Debt Service Coverage requirement for fiscal year ended October 31, 2019, fell below the required 110% Rate Covenant requirement set forth in the City's Previously Issued Parity Ordinances as further discussed below and under the caption `BONDOWNERS' RISK - Failure to Comply with Rate Covenant in Fiscal Year Ended October 31, 2019" in this Official Statement. The Previously Issued Parity Ordinances under which the City's Previously Issued Parity Bonds were authorized require the City to comply with certain covenants, including a rate covenant requiring the City to charge rates for the System sufficient to produce in each fiscal year Net Revenues of the System equal to at least 110% of the Debt Service Requirements due on the all of the City's System Revenue Bonds secured and payable from a pledge of Net Revenues of the System (the "Rate Covenant"). During the fiscal year ended October 31, 2019, the City incurred a significant increase in System operating expenses (excluding depreciation, the System operating expenses increased by approximately $1,275,698 compared to System operating expenses in fiscal year ended October 31, 2018) because the City had to repair and replace certain A-9 System infrastructure that was damaged by flooding that occurred in the City in the Summer of 2019. As a result of the increased operating expenses incurred during the fiscal year ended October 31, 2019, the Net Revenues of the System were only equal to approximately 96% of the Debt Service Requirements to be paid by the City during the fiscal year ended October 31, 2019, which fell below the 110% Rate Covenant requirement set forth in the City's Previously Issued Parity Ordinances. The Previously Issued Parity Bond Ordinances authorizing the City's Series 2016 Bonds, Series 2014 Bonds and the Series 2010B Bonds require the City to employ a Consultant to make recommendations with respect to System rates and charges if the Net Revenues generated from the operation of the System fall below the 110% Rate Covenant requirement for two consecutive fiscal years. Although the Net Revenues of the System only fell below the 110% Rate Covenant requirement during the fiscal year ended October 31, 2019, and have not fallen below the Rate Covenant requirement for two consecutive fiscal years, on April 6, 2020, the City engaged Rafetlis Financial Consultants, Inc. ("Raftelis"), to conduct a comprehensive rate study for the City's System. The City expects Raftelis to complete the rate study by the end of the City's current fiscal year October 31, 2020, and the City will likely implement increased System rates and charges based upon the conclusions and recommendations of the Raftelis rate study in order to ensure that the System generates sufficient Net Revenues to meet the 110% Rate Covenant requirement in future fiscal years. See also the caption `BONDOWNERS' RISK - Failure to Comply with Rate Covenant in Fiscal Year Ended October 31, 2019" in this Official Statement Debt Service Schedule The following table shows the aggregate debt service schedule for the City's outstanding System Revenue Bonds including the Bonds being offered, but excluding the Refunded Bonds (these numbers do not take into account any federal or state subsidy payments to be received by the City): Fiscal Year Series 2020 Ended Series Series Series Series Series Series Series Series Bonds Total October 31 2001B(2) 2005A(2) 2005C(2) 2008(2) 2010BO) 2012(2) 2014 2016 Principal Interest Debt Service 2020 $2,043,036.47 $372,702.17 $809,586.86 $338,313.01 $230,625.00 $955,352.30 $698,870.00 $281,400.00 2021 2,031,816.86 372,659.06 806,651.34 341,951.52 955,371.50 699,970.00 281,400.00 $260,000.00 2022 2,020,896.87 371,785.16 805,168.86 339,467.55 956,027.50 695,870.00 281,400.00 270,000.00 2023 370,080.95 802,108.26 336,226.84 956,286.25 696,670.00 831,400.00 345,000.00 2024 367,548.28 797,472.85 337,124.90 956,170.45 699,920.00 829,900.00 355,000.00 2025 364.187.76 791,261.14 336,959.09 956,657.40 697,795.00 827,950.00 365,000.00 2026 788.473.97 330,815.81 956,735.75 697,945.00 830,550.00 380,000.00 2027 333,596.17 957,394.15 697,645.00 832,550.00 385,000.00 2028 330,265.05 957,632.60 696,895.00 828,950.00 400,000.00 2029 330,847.46 958,428.40 695,695.00 829,900.00 410,000.00 2030 958,770.20 699,045.00 830,250.00 420,000.00 2031 958,658.00 696,795.00 830,000.00 425,000.00 2032 958,091.80 697,620.00 829,150.00 435,000.00 2033 958,060.25 697,795.00 832,700.00 440,000.00 2034 696,375.00 830,500.00 450,000.00 2035 698.625.00 832,700.00 460,000.00 2036 829.150.00 Total $6,095,750.19 $2,218,963.38 $5,600,723.29 $3,355,567.40 $230,625.00 $13,399,636.55 $11,163,530.00 $12,469,850.00 $5,800,000.00 (Less)(1) (2,043,036.47) (372,702.17) (809,586.86) (338,313.01) (955,352.30) (698,870.00) (281,400.00) TOTAL $4,052,713.72 $1,846,261.21 $4,791,136.42 $3,017,254.39 $230,625.00 $12,444,284.25 $10,464,660.00 $12,188,450.00 $5,800,000.00' (1) Reflects debt service payments already paid by the City during the current fiscal year ending October 31, 2020. (Z) Debt service totals for the City's Series 2001B Bonds, Series 2005A Bonds, Series 2005C Bonds, Series 2008 Bonds and Series 2012 Bonds, which were issued through the Missouri Department of Natural Resources State Revolving Fund or Direct Loan Programs, includes Department of Natural Resources and State Revolving Fund fees required to be paid during each fiscal year. (3) Reflects principal and interest on the Series 2010B Bonds scheduled to mature on September 1, 2020, that is not being refunded with proceeds of the Bonds and will remain outstanding. Preliminary, subject to change. A-10 Summary of Operations for Sewer Fund The following table sets forth a summary of the statement of revenues, expenses and changes in net position for the wastewater/sewer fund for the fiscal years ended October 31, 2017, 2018 and 2019. This summary was derived from the annual audited financial statements of the City for such fiscal years and were prepared on the accrual basis of accounting: OPERATING REVENUES: OPERATING EXPENSES: Personnel services Contractual services Claims Expense Material and supplies Repairs and maintenance Utilities Depreciation Other operating Total Operating Expenses: OPERATING INCOME (LOSS): NON-OPERATING REVENUES (EXPENSES): Intergovernmental Interest and investment revenue Interest expense and fees Gain/(Loss) on sale of capital assets TOTAL NON-OPERATING REVENUES (EXPENSES) INCOME (LOSS) BEFORE OPERATING TRANSFERS: CAPITAL CONTRIBUTIONS Fiscal Year Ended October 31 2017 2018 2019 $11,172,107 $11,564,490 $11,588,856 $2,501,889 $2,510,545 $2,467,716 1,277,269 1,261,349 1,302,320 38,826 42,310 27,711 396,224 578,932 751,102 525,879 521,214 531,141 550,665 533,001 568,030 3,478,920 3,565,989 3,734,349 543,896 89,497 1,164,5260) $9,313,568 $9,102,837 $10,546,895 $1,858,539 $2,461,653 $1,041,961 $1,095,188 $969,275 $869,551 (1,915,809) (2,101,422) (1,923,454) 12,783 24,209 19,815 $(807,838) $(1,107,938) $(1,034,088) $1,050,701 $1,353,715 $7,873 $513,06 $349,851 $1,357,416 TRANSFERS IN -- -- -- CHANGE IN NET POSITION $1,563,768 $1,703,566 $1,365,289 NET POSITION -BEGINNING $53,257,334 $54,821,102 $56,402,906 Prior Period Adjustment -- (121, 762) NET POSITION -ENDING $54,821,102 $56,402,906 $57,768,195 Source: City's Comprehensive Annual Financial Reports for fiscal years ended October 31, 2017 through 2019. (1) "Other Operating Expenses" increased during fiscal year ended October 31, 2019, due to numerous repairs/improvements to System infrastructure damaged by flooding in the Summer of 2019. Impact of C011ID-19 Outbreak on System Collections. As a result of the recent COVID-19 outbreak, significant instances of late payment or nonpayment could result in Net Revenues of the System that are insufficient to pay debt service on the Bonds. Developments regarding COVID-19 continue to occur on a daily basis and the extent to which COVID-19 will impact the general operations of the City, the operation of the City's System and the ability of the City to generate sufficient Net Revenues from the operation of the System is highly uncertain and cannot be predicted. See also the section captioned "BONDOWNERS' RISKS - Potential Risks Relating to COVID-19" in the Official Statement. A-11 Balance Sheet for Sewer Fund The following table sets forth a summary of the balance sheet for the wastewater/sewer fund for the fiscal years ended October 31, 2017, 2018, and 2019. This summary was derived from the annual audited financial statements of the City for such fiscal years and were prepared on the accrual basis of accounting: ASSETS: Current assets: Cash and cash equivalents Receivables (net of allowance for uncollectibles): Accounts Receivables from other governments Prepaid items Current restricted assets: Cash and cash equivalents Accrued Interest Total current assets Noncurrent assets: Restricted assets: Cash and cash equivalents Investments - revenue bond reserve fund Net pension asset Capital assets: Land Distribution and collection systems Buildings and equipment Construction in progress Less accumulated depreciation Total noncurrent assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES: Deferred outflows related to pensions Deferred outflows related to OPEB Deferred outflows related to advance refunding TOTAL DEFERRED LIABILITIES: Current liabilities: Accounts payable Accrued liabilities Compensated absences Revenue bonds payable -current Current liabilities payable from restricted assets: Accounts payable Retainage payable Accrued interest payable Deposits Payable to other governments (less than 1 year) Revenue bonds payable -current Total current liabilities Fiscal Years Ended October 31 2017 2018 2019 $5,941,204 $5,763,682 $6,696,469 1,079,298 1,090,829 1,064,539 22,463 72,228 111,981 27,977 36,785 35,603 6,080,054 5,326,823 2,818,574 240,733 214,320 183,415 $13,391,729 $12,504,667 $10,910,581 $500,000 $500,000 $500,000 6,767,756 5,599,081 4,458,462 499,850 1,093,959 1,012,701 942,043 942,043 942,043 62,099,173 68,426,006 69,599,846 76,692,499 78,687,360 79,585,130 7,594,575 981,864 1,741,375 (47,272,034) (50,694,416) (54,383,123) $107,823,862 $105,535,897 $103,456,434 $121,215,591 $118,040,564 $114,367,015 528,765 $195,484 $244,364 -- -- 18,068 13,510 10,808 8,109 542,275 $206,292 $270,541 $167,792 $137,152 $124,460 63,293 75,582 86,092 23,019 23,814 22,456 2,549,783 2,666,600 2,769,283 $260,102 $14,121 $354,491 139,986 27,392 74,310 634,336 582,893 530,600 306,148 339,949 376,931 1,099,000 1,158,500 1,218,000 1,247,817 1,310,900 1,359,017 $6,491,276 $6,336,903 $6,915,640 A-12 Noncurrent liabilities: Payable from restricted assets: Payable to other governments (less than 1 Compensated absences Total OPEB liability Revenue bonds payable (net of unamortized premiums and deferred amount of refunding) Total noncurrent liabilities TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES: Deferred inflows related to pensions Deferred inflows related to OPEB Total deferred inflows related to pensions NET POSITION: Net Investment in capital assets Restricted for: Pensions/OPEB Bond service debt Bond renewal and replacement Capital projects Unrestricted TOTAL NET POSITION $5,082,674 $3,836,000 $2,618,000 232,744 240,791 258,249 34,476 152,773 163,685 54,834,374 50,738,824 46,492,474 $60,184,268 $54,968,388 $49,532,408 $66,675,544 $61,305,291 $56,448,048 $261,220 $533,282 $408,979 -- 5,377 12,331 $261,220 $538,659 $421,310 $46,712,593 $48,516,586 $48,856,342 767,395 598,011 690,138 842,722 2,076,982 2,020,933 500,000 500,000 500,000 2,110,563 2,324,443 2,221,290 3,887,829 2,386,884 3,479,492 $54,821,102 $56,402,906 $57,768,195 Source: City's Comprehensive Annual Financial Reports for fiscal years ended October 31, 2017 through 2019. DEBT INFORMATION OF THE CITY Long -Term General Obligation Indebtedness The City does not have any outstanding general obligation indebtedness. Legal Debt Capacity Article VI, Sections 26(b) and (c) of the Constitution of the State of Missouri limit the net outstanding amount of authorized general obligation indebtedness for a city to 10 percent of the assessed valuation of the city by a two-thirds (four -sevenths at certain elections) vote of the qualified voters. Article VI, Section 26(d) provides that a city may, by a two-thirds (four -sevenths at certain elections) vote of the qualified voters, incur indebtedness in an amount not to exceed an additional 10 percent for the purpose of acquiring rights-of-way, construction, extending and improving streets and avenues, and sanitary or storm sewer systems, provided the total general obligation indebtedness of a city does not exceed 20 percent of the assessed valuation. Article VI, Section 26(e) provides that a city may, by a two-thirds (four -sevenths at certain elections) vote of the qualified voters, incur indebtedness in an amount not exceeding an additional 10 percent for the purpose of purchasing or constructing waterworks, electric or other light plants to be owned exclusively by the city, provided that the total general obligation indebtedness of a city does not exceed 20 percent of the assessed valuation. Based on the City's assessed valuation for 2019, after Board of Equalization adjustments, in the amount of $910,339,512 (which excludes the assessed valuation in the amount of $1,471,550 attributable to the incremental increase in assessed valuation over the established assessed valuation base within tax increment financing redevelopment areas located within the City), prior to any Board of Equalization adjustments, the current legal debt limit of the City is $182,067,902 (equal to 20% of the assessed valuation for 2019 of $910,339,512) and the current legal debt margin is $182,067,902 (the City's current legal debt margin is equal to the City's current legal debt limit because the City does not have any general obligation bonds outstanding). A-13 Series 2019 Special Obligation Bonds On December 3, 2019, the City issued its Special Obligation Improvement Bonds (Parks System Project), Series 2019, in the aggregate principal amount of the $7,305,000 (the "Series 2019 Special Obligation Bonds"), to finance improvements to its parks system. The Series 2019 Special Obligation Bonds are payable solely from amounts appropriated by the City in each fiscal year (1) out of the income and revenues of the City provided for such fiscal year, plus (2) any unencumbered balances from previous fiscal years. No property of the City is pledged or encumbered to pay to secure payment of the Series 2019 Special Obligation Bonds. The following schedule shows the annual principal and interest payments of the Series 2019 Special Obligation Bonds that are payable by the City during each fiscal year, subject to annual appropriation by the City Council of the City: Fiscal Year Ended Principal Interest October 31 Amount Amount Total 2020 $325,000.00 $144,360.81 $469,360.81 2021 285,000.00 184,167.50 469,167.50 2022 295,000.00 175,617.50 470,617.50 2023 300,000.00 166,767.50 466,767.50 2024 310,000.00 157,767.50 467,767.50 2025 320,000.00 148,467.50 468,467.50 2026 330,000.00 138,867.50 468,867.50 2027 340,000.00 128,967.50 468,967.50 2028 350,000.00 118,767.50 468,767.50 2029 360,000.00 108,267.50 468,267.50 2030 370,000.00 101,067.50 471,067.50 2031 375,000.00 93,112.50 468,112.50 2032 385,000.00 84,675.00 469,675.00 2033 395,000.00 75,627.50 470,627.50 2034 400,000.00 66,147.50 466,147.50 2035 410,000.00 56,347.50 466,347.50 2036 420,000.00 46,097.50 466,097.50 2037 435,000.00 35,387.50 470,387.50 2038 445,000.00 24,077.50 469,077.50 2039 455,000.00 12,285.00 467,285.00 Total $7,305,000.00 $2,066,843.31 $9,371,843.31 (Less March 1, 2020 Payment)(V -- ($47,402.06) ($47,402.06) TOTAL $7,305,000.00 $2,019,441.25 $9,324,441.25 Reflects $47,402.06 of interest already paid by the City on the Series 2019 Special Obligation Bonds on March 1, 2020, during the current fiscal year ending October 31, 2020. A-14 Other Obligations of the City 2017 Fire Equipment Lease. On May 19, 2017, the City entered into an annually -renewable equipment lease purchase agreement (the "2017 Fire Equipment Lease") in the principal amount of $5,037,541 for the purpose of financing the cost of acquiring various fire -fighting vehicles and related equipment. Rental payments scheduled to become due under the 2017 Fire Equipment Lease on April 1 st of each year, consisting of a principal portion and an interest portion, are subject to annually appropriation by the City Council. The interest portion of such rental payments accrues at an interest rate of 2.485%, the final rental payment is due on April 1, 2028. The remaining rental payments scheduled to become due under the 2017 Fire Equipment Lease, subject to annual appropriation by the City Council, are as follows: Total $3,447,792 $453,602 $3,901,394 (Less April 1, 2020 Payment)() ($314,326) ($85,674) ($400,000) TOTAL $3,133,466 $367,928 $3,501,394 (i) Reflects principal portion and interest portion of the rental payments already paid by the City on April 1, 2020, during the current fiscal year ending October 31, 2020. Tax Increment and Special District Revenue Bonds (Capital Mall Project), Series 2019. On August 30, 2019, the Industrial Development Authority of the City of Jefferson, Missouri (the "Authority"), issued Tax Increment and Special District Revenue Bonds (Capital Mall Project), Series 2019 (the "Series 2019 TIF Bonds"), in the original principal amount of $9,550,000, in order to refinance certain costs related to the renovation of a retail development known as the Capital Mall (the "Capital Mall") undertaken by Capital Mall JC, LLC, a Missouri limited liability company (the "Developer") in accordance with the Real Property Tax Increment Allocation Redevelopment Act, Sections 99.800 to 99.865, RSMo (the "TIF Act"). Principal of and interest on the Bonds is payable solely from the Net Revenues (defined below) and other moneys pledged by the Authority to UMB Bank, N.A., as trustee (the "Trustee"), as provided in a Trust Indenture dated as of August 1, 2019, between the Trustee and the Authority (the "Indenture"). Interest on the Series 2019 TIF Bonds is payable semiannually on each May 1 and November 1, beginning May 1, 2020, and the Series 2019 TIF Bonds are scheduled to mature in the principal amounts and accrue interest at the rates specified below, subject to special mandatory redemption in accordance with the Indenture: Maturity Principal Interest Total Rental Fiscal Year Ended October 31 Portion Portion Payments 2020 $314,326 $85,674 $400,000 2021 322,136 77,864 400,000 2022 330,141 69,859 400,000 2023 388,577 61,655 450,232 2024 398,233 51,999 450,232 2025 408,129 42,104 450,233 2026 418,270 31,962 450,232 2027 428,664 21,568 450,232 2028 439,316 10,917 450,233 Total $3,447,792 $453,602 $3,901,394 (Less April 1, 2020 Payment)() ($314,326) ($85,674) ($400,000) TOTAL $3,133,466 $367,928 $3,501,394 (i) Reflects principal portion and interest portion of the rental payments already paid by the City on April 1, 2020, during the current fiscal year ending October 31, 2020. Tax Increment and Special District Revenue Bonds (Capital Mall Project), Series 2019. On August 30, 2019, the Industrial Development Authority of the City of Jefferson, Missouri (the "Authority"), issued Tax Increment and Special District Revenue Bonds (Capital Mall Project), Series 2019 (the "Series 2019 TIF Bonds"), in the original principal amount of $9,550,000, in order to refinance certain costs related to the renovation of a retail development known as the Capital Mall (the "Capital Mall") undertaken by Capital Mall JC, LLC, a Missouri limited liability company (the "Developer") in accordance with the Real Property Tax Increment Allocation Redevelopment Act, Sections 99.800 to 99.865, RSMo (the "TIF Act"). Principal of and interest on the Bonds is payable solely from the Net Revenues (defined below) and other moneys pledged by the Authority to UMB Bank, N.A., as trustee (the "Trustee"), as provided in a Trust Indenture dated as of August 1, 2019, between the Trustee and the Authority (the "Indenture"). Interest on the Series 2019 TIF Bonds is payable semiannually on each May 1 and November 1, beginning May 1, 2020, and the Series 2019 TIF Bonds are scheduled to mature in the principal amounts and accrue interest at the rates specified below, subject to special mandatory redemption in accordance with the Indenture: Maturity Principal (May 1) Amount Interest Rate 2040 $4,250,000 3.625% 2049 5,300,000 4.000% A-15 In accordance with the TIF Act, the City designated a redevelopment area within the City on January 21, 2014, consisting of approximately 78 acres, including the Capital Mall (the "Redevelopment Area"). In connection with the issuance of the Series 2019 TIF Bonds, the City, the Authority and the Capital Mall Community Improvement District (the "District"), entered into a Financing Agreement dated as of August 1, 2019 (the "Financing Agreement"). Under the Financing Agreement, the City agreed to transfer payments in lieu of taxes (the "PILOTS") and economic activity tax revenues (the "Economic Activity Tax Revenues") to the payment of debt service on the Series 2019 TIF Bonds, and the District agreed to transfer certain revenues generated from a 1.00% District sales tax imposed within the Redevelopment Area to the payment of debt service on the Serie 2019 TIF Bonds (collectively, the "Net Revenues"). The PILOTS consist of payments in lieu of taxes, as defined in the TIF Act, attributable to the increase in the equalized assessed valuation of all taxable real property within the Redevelopment Area over and above the initial assessed valuation of such real property at the time the Redevelopment Area was formed. The Economic Activity Tax Revenues consist of 50% of the total additional revenues from sales taxes imposed by the City generated by economic activities within the Redevelopment Area, which is subject to annual appropriation by the City Council. The City's agreement to transfer PILOTS and, subject to annual appropriation by the City Council, Economic Activity Tax Revenues to the payment of the Series 2019 TIF Bonds expires on July 6, 2037, in accordance with the TIF Act. The Series 2019 TIF Bonds do not constitute general obligations or indebtedness of the City within the meaning of any constitutional or statutory limitation or provision, and the City has not pledged its full faith and credit and is not obligated to levy taxes or resort to any other moneys or property of the City to pay the principal of and interest on the Series 2019 TIF Bonds. FINANCIAL INFORMATION Accounting, Budgeting and Auditing Procedures The City produces government -wide financial statements in accordance with the accrual basis of accounting and produces governmental fund financial statements in accordance with the modified accrual basis of accounting, which are both accounting principal generally accepted in the United States, as more fully described in the notes to the City's audited financial statements for fiscal year ended October 31, 2019, contained in the Comprehensive Annual Financial Report attached as Appendix B to this Official Statement (the "2019 CAFR"). The City, like other Missouri state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City can be divided into three categories: Governmental Funds, Proprietary Funds, and Fiduciary/Agency Funds, as further described below: Governmental Funds. Governmental Funds are used to account for government activities focusing on near-term inflows and outflows of spendable resources as well as balances of spendable resources available at the end of the City's fiscal year. The City maintains nine individual governmental funds. The City's major governmental funds include the following: ■ General Fund: acts as the primary operating fund of the City and accounts for all financial resources of the general government, except those required to be accounted for in another fund. Parks Fund (special revenue fund): accounts for revenue sources from the operations of Parks and Recreation and 0.50% Local Parks Sales Tax (defined herein) that are legally restricted to expenditures for specific parks related purposes including major capital projects. A-16 ■ Capital Improvement Tax Fund. accounts for revenue from the City's 0.50% capital improvement sales tax, the acquisition of capital assets or construction of major capital projects not being financed by other funds. The non -major governmental funds include Police Training, Lodging Tax, JC Veterans Plaza Trust, City Hall Art Trust, USS Jefferson City Submarine Trust and Woodland Cemetery Trust, which each account for specific revenues that are legally restricted to expenditures for particular purposes. For further details, see Note 1 to the City's audited financial statements included in the City's 2019 CAFR attached as Appendix B to this Official Statement. Proprietary Funds. Proprietary Funds are used to account for business -like activities of the City. The City maintains two types of Proprietary Funds: Enterprise Funds and Internal Service Funds. The Enterprise Funds account for the operations of the City's business -type activities, such as the City's wastewater (System), airport, parking and transit operations. The City's major Enterprise Funds include: ■ Wastewater Fund: accounts for operations of the City's System ■ Transit Fund: accounts for operations of bus fixed route and handicap public transit. The non -major Enterprise Funds include the Airport Fund and the Parking Division Fund. The Internal Service Funds account for the operations that provide self-insurance workers compensation/risk managements services and self-funded health insurance, both of which are considered non -major funds. For further details, see Note I to the City's audited financial statements included in the City's 2019 CAFR attached as Appendix B to this Official Statement. Fiduciary/Agency Funds. Fiduciary/Agency Funds are used to account for resources held for the benefit of parties outside of the City's governmental operations. The City's Tax Increment Financing Fund is the only Fiduciary/Agency fund currently maintained by the City and is considered a non -major custodial fund. For further details, see Note 1 to the City's audited financial statements included in the City's 2019 CAFR attached as Appendix B to this Official Statement. The City is required by law to prepare an annual budget of estimated receipts and disbursements for the coming fiscal year under the direction of the City Administrator and Director of Finance after consultation with each department. The annual budget is then presented to the Mayor and proposed by the Mayor to the City Council prior to October 31 each year for approval after a public hearing. The City's fiscal year is November 1 through October 31. The City's annual budget lists estimated receipts by fund and sources and estimated disbursements by fund and purpose. The financial records of the City are audited annually by a firm of independent certified public accountants. In recent years, the annual audit has been performed by Evers & Company, CPA's, LLC, Jefferson City, Missouri, independent certified public accountants. Copies of the audited financial statements for the prior fiscal years of the City are on file with the City and are available for review. Sources of Revenue The City finances its operations through a local property tax levy, sales taxes, franchise taxes, charges for services, fines and forfeitures and miscellaneous sources. The City's major governmental funds, which account for City's governmental activities, include the General Fund, the Parks Fund (which is a special revenue fund) and the Capital Improvement Tax Fund. The City's budgeted sources of revenue for its general A-17 operations, which are accounted for in the City's General Fund, for the City's fiscal year ended October 31, 2019, were as follows: Source Amount of Projected Percent of General Fund Revenues General Fund Revenues Fund Revenues Sales and other use taxes $11,610,233 35.53% Property Tax 5,447,766 16.67% Utility and Franchise Taxes 6,695,255 20.49% Licenses, permits and fees 999,288 3.06% Intergovernmental 3,672,161 11.24% Charges for services 2,800,278 8.57% Fines and forfeitures 670,632 2.05% Miscellaneous 778,187 2.38% Total $32,673,800 100.00% Source: City's adopted budget for fiscal year ended October 31, 2019. The City's projected budgeted sources of revenue for its general operations, which are accounted for in the City's General Fund, for the City's current fiscal year ending October 31, 2020, are as follows: Source Sales and other use taxes Property Tax Utility and Franchise Taxes Licenses, permits and fees Intergovernmental Charges for services Fines and forfeitures Miscellaneous Total Amount of Projected Percent of General General Fund Revenues Fund Revenues $11,980,085 36.38% 5,466,399 16.60 7,205,000 21.88 902,520 2.74 3,052,150 9.27 2,875,130 8.73 766,600 2.33 682,596 2.07 $32,930,480 100.00% Source: City's adopted budget for fiscal year ending October 31, 2020. Financial Summary The following table reflects the City's total budgeted General Fund revenues, actual General Fund revenues, actual General Fund expenditures and General Fund balances for the City's General Fund for each of the last five fiscal years: Source: City's Comprehensive Financial Reports for fiscal years ended October 31, 2015 through 2019. (1) In accordance with state law, the City budgets on a cash basis. (Z) Includes transfers in and proceeds from the sale of assets. 0) Includes transfers out. A-18 Fiscal Years Ended October 31 2015 2016 2017 2018 2019 Total Budgeted Revenues(l) $31,493,920 $32,490,989 $34,080,749 $34,136,455 $34,050,279 Actual General Fund Revenues(Z) 32,037,068 32,650,444 33,099,852 33,504,812 33,074,657 Actual General Fund Expenditures (3) 29,733,603 30,984,506 33,851,110 33,859,108 34,934,391 Ending General Fund Balance $9,395,754 $11,061,692 $10,310,434 $9,956,138 $8,096,404 Source: City's Comprehensive Financial Reports for fiscal years ended October 31, 2015 through 2019. (1) In accordance with state law, the City budgets on a cash basis. (Z) Includes transfers in and proceeds from the sale of assets. 0) Includes transfers out. A-18 Risk Management Property and Casualty Insurance. The City is exposed to risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. As of October 31, 2019, the City had purchased insurance up to $3.6 million for these risks from the Midwest Public Risk Fund, except for Worker's Compensation Risk Management as further described below. There have been no settlements in excess of insured coverage during the past five years. The Midwest Public Risk Fund ("MPRF") is structured such that member premiums are based on an actuarial review that will provide adequate reserves to allow the MPRF to meet its expected financial obligations. The MPRF has the authority to assess its members additional premiums should reserves and annual premiums be insufficient to meet MPRF's obligations. The City purchases other commercial policies from various vendors for property and equipment, excess property, boiler and machinery, commercial crime, excess workers compensation, and airport owners and operator's liability. In the area of loss prevention and control, the City has contracted for services through a commercial insurance company and a professional broker. The City has also instituted internal safety and supervisory training programs designed to minimize risk exposure and claims. For further details about the City's risk management policies and initiatives, see Note B.A. to the City's audited financial statements in the City's 2019 CAFR included as Appendix B to this Official Statement. Worker's Compensation. On July 1, 1991, the City established a Worker's Compensation Risk Management Fund (an internal service fund) to account for and finance its uninsured risks of this loss. Under this program, the Worker's Compensation Risk Management Fund provides coverage for up to a maximum of $350,000 for each worker's compensation claim, with the exception that claims for public safety (fire/police) provide maximum coverage of $450,000 per claim. The City purchases commercial reinsurance for claims in excess of individual coverage provided by the Worker's Compensation Fund (stop loss of $350,000 individual with a policy maximum of $1 million). Payments are made to the Worker's Compensation Risk Management Fund based on payroll at State of Missouri Worker's Compensation rates which are estimates of the amounts needed to pay prior and current - year claims and to build an unreserved fund balance. For further details about the City's worker's compensation risk management initiatives, see Note 8.B. to the City's audited financial statements in the City's 2019 CAFR included as Appendix B to this Official Statement. Self -Funded Health Insurance On January 1, 2016, the City established a Self -Funded Health Insurance Fund (an internal service fund) to account for the transactions and reserves associated with the City's medical and prescription drug programs for City employees. Coverage for health and prescription drug plans are self-insured. As of October 31, 2019, the City had a stop -loss attachment point of $125,000 per individual with a policy maximum of $4,515,378. Payments are made to the Self -Funded Health Insurance Fund based on estimates of the amounts needed to pay prior and current -year claims and to establish net position sufficient for catastrophic losses. For further details about the City's Self -Funded Health Insurance Fund, see Note S.C. to the City's 2019 CAFR included as Appendix B to this Official Statement. Employee Retirement and Pension Plans The City participates in the Missouri Local Government Employees' Retirement System ("LAGERS"), an agent multiple -employer public employee retirement system that acts as a common investment and administrative agent for local government entities in Missouri. LAGERS was created and is governed by state statute, and is a defined -benefit pension plan that provides retirement, disability and death benefits. The plan is qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended, and is tax-exempt. LAGERS is governed by a seven -member Board of Trustees ("LAGERS' Board") consisting of A-19 three trustees elected by participating employees, three trustees elected by participating employers and one trustee appointed by the Missouri Governor. LAGERS issues a publicly available financial report that includes financial statements and required supplementary information. The LAGERS Comprehensive Annual Financial Report for the fiscal year ended June 30, 2019 (the "2019 LAGERS CAFR") is available at https://www.molagers.org/financial-reports.htnil. The link to the 2019 LAGERS CAFR is provided for general background information only, and the information in the 2019 LAGERS CAFR is not incorporated by reference into this Official Statement. The 2019 LAGERS CAFR provides detailed information about LAGERS, including its financial position, investment policy and performance information, actuarial information and assumptions affecting plan design and policies, and certain statistical information about the plan. All full-time general, police and fire employees of the City are eligible to participate in LAGERS. As permitted by LAGERS, the City has elected the non-contributory plan, meaning its participating employees do not contribute to the pension plan. The City is required by statute to contribute at an actuarially determined rate for each category of participating employees, subject to certain limitations. An employer that participates in LAGERS has its actuarially determined contribution rate calculated as follows: using the financial assumptions adopted by the LAGERS' Board, an actuary computes the contribution rate that, if paid annually by each employer during the total service of its participating employees, will be sufficient to provide the pension reserves required at the time of said employees' retirements to cover the pensions that such employees may be entitled to receive. However, this actuarially -determined contribution rate cannot result in an employer contributing an amount in any fiscal year equal to more than 101% of its total contributions for the immediately preceding fiscal year. For information specific to the City's participation in LAGERS, including the City's past contributions, net pension liability and related sensitivities, and pension expense, see Note 10 and the "Schedule of Changes in Net Pension Liability and Related Ratios" and "Schedule of Contributions" tables on pages 81 and 82, respectively, in the Required Supplementary Information section of the City's 2019 CAFR included in Appendix B to this Official Statement. For additional information regarding LAGERS, see the 2019 LAGERS CAFR. Other Post -Employment Benefits In addition to pensions, many state and local governments, including the City, provide other postemployment benefits as part of the total compensation offered to attract and retain the services of qualified employees. The City sponsors a single -employer, defined benefit healthcare plan that provides healthcare benefits to retirees and their dependents. The City requires retirees to pay the same medical premium charged for active employees. For further details relating to the City's other postemployment benefits, see Note 7.E. and the table "Schedule of Changes in Total OPEB Liability and Related Ratios" on page 83 in the Required Supplementary Information section of the City's 2019 CAFR included in Appendix B to this Official Statement. History of Property Valuations The total assessed valuation of all taxable tangible property situated in the City according to the assessments of January 1 in each of the following years, has been as follows: Calendar Assessed % Year Valuation Chante 2019 $910,339,512 1.72% 2018 894,954,520 0.20 2017 893,179,890 1.22 A-20 2016 882,456,576 2.25 2015 863,071,468 0.73 Source: Missouri State Auditor Property Tax Rate Reports. Property Tax Levies and Collections years: The following table sets forth property tax collection information for the City for the last five fiscal Fiscal Year 1.00% Total Net Current & Delinquent Ended Total Taxes Taxes Collected October 31 Levy Levief) Amount % 2019 $0.5561 $4,902,680 $4,760,932 97.1% 2018 0.5561 4,896,931 4,761,805 97.2 2017 0.5561 4,838,766 4,746,033 98.1 2016 0.5561 4,728,336 4,624,345 97.8 2015 0.5561 4,693,499 4,604,610 98.1 Source: City's Comprehensive Annual Financial Report for fiscal year ended October 31, 2019, "Property Tax Levies and Collections" table in the "Statistical Section" on pg. 118. (1) "Total Net Taxes Levied" is calculated by dividing the assessed valuation (as of the calendar year prior to the fiscal year shown) by 100 and multiplying by the Total Levy then subtracting the one percent (1%) fee charged by Callaway County and Cole County for collecting property taxes for the benefit of the City. Sales Tax Collections The City's revenue for the fiscal years ended October 31, 2015 through 2019, generated from the sales tax levies are as follows: Fiscal 1.00% 0.50% Year Ended General Capital October 31 Fund Improvements( ) 2019 $11,610,233 $5,599,211 2018 11,577,513 5,545,522 2017 11,418,901 5,500,311 2016 11,121,425 5,356,330 2015 10,976,960 5,260,753 0.50% Local Parks Total $5,597,755 $22,807,199 5,554,002 22,677,037 5,492,397 22,411,609 5,358,988 21,836,743 5,259,477 21,497,190 Source: City's Comprehensive Annual Financial Reports for fiscal years ended October 31, 2015 through 2019. (1) The voters of the City approved the most -recent renewal of the 0.50% capital improvement sales tax for a period of five years, which five-year period began on April 1, 2017, and is set to expire on March 31, 2022. The City expects to call an election in August 2021 to renew the 0.50% capital improvement sales tax for an additional five-year period. A-21 A-22 APPENDIX B CITY OF JEFFERSON, MISSOURI COMPREHENSIVE ANNUAL FINANCIAL REPORT WITH INDEPENDENT AUDITOR'S REPORT FOR THE YEAR ENDED OCTOBER 31, 2019 APPENDIX C SUMMARY OF THE BOND ORDINANCE The following is a summary of certain provisions contained in the Bond Ordinance. The following is not a comprehensive description, however, and is qualified in its entirety by reference to the Bond Ordinance for a complete recital of the terms thereof. Definitions In addition to words and terms defined elsewhere in this Official Statement, the following are definitions of certain words and terms used in the Bond Ordinance and this Official Statement unless the context clearly otherwise requires. Reference is hereby made to the Bond Ordinance for complete definitions of all terms. "Accountant" means an independent certified public accountant or firm of certified public accountants. "Act" means Article VI, Section 27 of the Missouri Constitution and Chapter 250 of the Revised Statutes of Missouri, as amended. "Authority" means the State Environmental Improvement and Energy Resources Authority, a governmental instrumentality of the State of Missouri. "Authority Program Bonds" means any bonds of the Authority heretofore or hereafter issued under the SRF Program, all or a portion of the proceeds of which are loaned to the City with respect to the System and pursuant to the SRF Program. "Average Annual Debt Service" means the average of the Debt Service Requirements as computed for the then current and all future fiscal years. "Bond Counsel" means Gilmore & Bell, P.C., Kansas City, Missouri, or any other attorney or firm of attorneys with a nationally recognized standing in the field of municipal bond financing selected by the City. "Bond Payment Date" means any date on which principal of or interest on any Bond is payable at the Maturity thereof or on any Interest Payment Date. "Bond Register" means the books for the registration, transfer and exchange of Bonds kept at the office of the Paying Agent. "Bondowner," "Owner" or "Registered Owner" when used with respect to any Bond means the Person in whose name such Bond is registered on the Bond Register. "Bonds" means the Sewerage System Refunding Revenue Bonds, Series 2020, of the City, authorized and issued pursuant to the Bond Ordinance. "Business Day" means a day, other than a Saturday, Sunday or holiday, on which the Paying Agent is scheduled in the normal course of its operations to be open to the public for conduct of its banking operations. "Cede & Co." means Cede & Co., as nominee name of The Depository Trust Company, New York, New York, and any successor nominee with respect to the Bonds. C-1 "Certificate of Final Terms" means the Certificate of Final Terms, the form of which is attached to the Bond Ordinance. "City" means the City of Jefferson, Missouri, and any successors or assigns. "Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations of the Treasury Department proposed or promulgated thereunder. "Consultant" "Consultant' means a registered municipal advisor, an independent certificated public accountant or a firm of independent certified public accountants, or an independent engineer or engineering firm with experience in designing and constructing wastewater treatment, sanitary sewerage, water pollution control facilities, selected by the City for the purpose of carrying out the duties imposed on the Consultant by the Bond Ordinance. "Continuing Disclosure Undertaking" means the Continuing Disclosure Undertaking dated the date set forth therein, the form of which is attached to the Bond Ordinance. "Dated Date" means the date of initial delivery and payment for the Bonds specified in the Certificate of Final Terms. "Debt Service Account" means the Series 2020 Debt Service Account in the Debt Service Fund created by the Ordinance. "Debt Service Requirements" means the aggregate principal payments (whether at maturity or pursuant to scheduled mandatory sinking fund redemption requirements) and net interest or interest -like payments (after taking into account any applicable Subsidy Payments) on all System Revenue Bonds for the period of time for which calculated; provided, however, that for purposes of calculating such amount, principal and interest shall be excluded from the determination of Debt Service Requirements to the extent that such principal or interest is payable from amounts deposited in trust, escrowed or otherwise set aside for the payment thereof with the Paying Agent or other commercial bank or trust company located in the State of Missouri and having full trust powers. "Defaulted Interest" means interest on any Bond which is payable but not paid on any Interest Payment Date. "Defeasance Obligations" means any of the following obligations: (a) United States Government Obligations that are not subject to redemption in advance of their maturity dates; or (b) obligations of any state or political subdivision of any state, the interest on which is excluded from gross income for federal income tax purposes and which meet the following conditions: (1) the obligations are (i) not subject to redemption prior to maturity or (ii) the trustee for such obligations has been given irrevocable instructions concerning their calling and redemption and the issuer of such obligations has covenanted not to redeem such obligations other than as set forth in such instructions; (2) the obligations are secured by cash or United States Government Obligations that may be applied only to principal of, premium, if any, and interest payments on such obligations; C-2 (3) such cash and the principal of and interest on such United States Government Obligations (plus any cash in the escrow fund) are sufficient to meet the liabilities of the obligations; (4) such cash and United States Government Obligations serving as security for the obligations are held in an escrow fund by an escrow agent or a trustee irrevocably in trust; (5) such cash and United States Government Obligations are not available to satisfy any other claims, including those against the trustee or escrow agent; and (6) the obligations are rated in a rating category by Moody's or Standard & Poor's Ratings Group that is no lower than the rating category then assigned by that rating agency to United States Government Obligations. "Depreciation and Replacement Account" means the account by that name ratified and confirmed by the Bond Ordinance. "Depreciation and Replacement Accumulation Requirement" means $[500,000], which includes amounts required to be accumulated in the Depreciation and Replacement Account pursuant to the ordinances of the City authorizing all other outstanding issues of System Revenue Bonds, as such amounts may be decreased upon redemption or maturity of each series of System Revenue Bonds. "Expenses" means all reasonable and necessary expenses of operation, maintenance and repair of the System and keeping the System in good repair and working order (other than interest paid on System Revenue Bonds and depreciation and amortization charges during the period of determination), determined in accordance with generally accepted accounting principles, including without limiting the generality of the foregoing, current maintenance charges, expenses of reasonable upkeep and repairs, salaries, wages, costs of materials and supplies, Paying Agent fees and expenses, annual audits, periodic Consultant's reports, properly allocated share of charges for insurance, the cost of purchased water, gas and power, if any, obligations (other than for borrowed money or for rents payable under capital leases) incurred in the ordinary course of business, liabilities incurred by endorsement for collection or deposit of checks or drafts received in the ordinary course of business, short-term indebtedness incurred and payable within a particular fiscal year, other obligations or indebtedness incurred for the purpose of leasing (pursuant to a true or operating lease) equipment, fixtures, inventory or other personal property, and all other expenses incident to the operation of the System, but shall exclude all general administrative expenses of the City not related to the operation of the System. "FAST Agent" means the Paying Agent when acting as agent for DTC in accordance with rules established by DTC for Fast Automated Securities Transfers. "Federal Tax Certificate" means the Federal Tax Certificate dated as of date of issuance and delivery of the Bonds, delivered by the City for the Bonds, which sets forth certain facts, covenants, representations, and expectations relating to the use of Bond proceeds and the use of property financed or refinanced with those proceeds, and the investment of the Bond proceeds and certain other related money in order to comply with the requirements of Code imposed on the Bonds. "Interest Payment Date" means the Stated Maturity of an installment of interest on any Bond. "Maturity" when used with respect to any Bond means the date on which the principal of such Bond becomes due and payable as provided therein and in the Bond Ordinance, whether at the Stated Maturity thereof or by call for redemption or otherwise. "Net Revenues" means all Revenues less all Expenses. C-3 "Notice of Bond Sale" means the Notice of Bond Sale relating to the public offering for sale of the Bonds, the form of which is attached to the Bond Ordinance. "Operation and Maintenance Account" means the account by that name ratified and confirmed by the Bond Ordinance. "Original Principal Amount" means the Original Principal Amount of the Bonds specified in the Certificate of Final Terms. "Outstanding," when used with reference to Bonds, means, as of any particular date of determination, all Bonds theretofore issued and delivered hereunder, except the following Bonds: (a) Bonds theretofore cancelled by the Paying Agent or delivered to the Paying Agent for cancellation; (b) Bonds deemed to be paid in accordance with the provisions of the Bond Ordinance; and (c) Bonds in exchange for or in lieu of which other Bonds have been registered and delivered hereunder. "Parity Bonds" means the Previously Issued Parity Bonds and any additional bonds or other obligations hereafter issued or incurred pursuant to the Bond Ordinance and standing on a parity and equality with the Bonds with respect to the payment of principal and interest from the Net Revenues of the System. "Parity Ordinances" means the Previously Issued Parity Ordinances and the ordinance or ordinances under which any additional Parity Bonds are hereafter issued pursuant to the Bond Ordinance. "Participants" means those financial institutions for whom the Securities Depository effects book - entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference. "Paying Agent" means UMB Bank, N.A., St. Louis, Missouri, and any successors and assigns. "Paying Agent Agreement" means the Paying Agent Agreement between the City and the Paying Agent in substantially the form to the Bond Ordinance. "Permitted Investments" means any of the following securities and obligations, if and to the extent the same are at the time legal for investment of the moneys held in the funds and accounts listed in the Bond Ordinance: (a) United States Government Obligations; (b) certificates of deposit or time deposits, whether negotiable or nonnegotiable, issued by any bank or trust company organized under the laws of the United States or any state, provided that such certificates of deposit or time deposits shall be either (1) continuously and fully insured by the Federal Deposit Insurance Corporation, or (2) continuously and fully secured by United States Government Obligations which shall have a market value, exclusive of accrued interest, at all times at least equal to the principal amount of such certificates of deposit or time deposits; and (c) any other securities or investments that are lawful for the investment of moneys held in such funds or accounts under the laws of the State of Missouri. C-4 "Person" means any natural person, corporation, partnership, firm, joint venture, association, joint- stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof or other public body. "Previously Issued Parity Bonds" means, collectively, the Series 2001B Bonds, the Series 2005A Bonds, the Series 2005B Bonds, the Series 2008 Bonds, the portion of the Series 2010B Bonds scheduled to mature on September 1, 2020, outstanding in the aggregate principal amount of $225,000, the Series 2012 Bonds, the Series 2014 Bonds and the Series 2016 Bonds. "Previously Issued Parity Ordinances" means, collectively, the Series 2001B Ordinance, the Series 2005A Ordinance, the Series 2005B Ordinance, the Series 2008 Ordinance, the Series 2010 Ordinance, the Series 2012 Ordinance, the Series 2014 Ordinance and the Series 2016 Ordinance. "Purchase Price" means the purchase price of the Bonds specified in the Certificate of Final Terms. "Purchaser" means the purchaser of the Bonds specified in the Certificate of Final Terms. "Rebate Fund" means the fund by that name referred to in the Bond Ordinance. "Record Date" for the interest payable on any Interest Payment Date means the 15th day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date. "Redemption Date" when used with respect to any Bond to be redeemed means the date fixed for such redemption pursuant to the terms of the Bond Ordinance. "Redemption Price" when used with respect to any Bond to be redeemed means the price at which such Bond is to be redeemed pursuant to the terms of the Bond Ordinance, including the applicable redemption premium, if any, but excluding installments of interest whose Stated Maturity is on or before the Redemption Date. "Refunded Bonds" means the portion of the Series 2010B Bonds maturing on September 1, 2025, and thereafter outstanding in the aggregate principal amount of $5,790,000. "Refunding Bond Law" means Section 108.140(2), of the Revised Statutes of Missouri, as amended. "Revenue Fund" means the fund by that name ratified and confirmed by the Bond Ordinance. "Revenues" means all income and revenues derived from the ownership and operation of the System, including investment and rental income, net proceeds from business interruption insurance, sales tax revenues which have been annually appropriated by the City or which are limited solely to the payment of improvements to or expenses of the System, and any amounts deposited in escrow in connection with the acquisition, construction, remodeling, renovation and equipping of System facilities to be applied during the period of determination to pay interest on System Revenue Bonds, but excluding any profits or losses on the early extinguishment of debt or on the sale or other disposition, not in the ordinary course of business, of investments or fixed or capital assets. "Securities Depository" means, initially, The Depository Trust Company, New York, New York, and its successors and assigns. "Series 2001B Bonds" means the Sewerage System Refunding and Improvement Revenue Bonds, Series 2001B, of the City, in the original aggregate principal amount of $24,875,000, authorized and issued pursuant to the Series 2001B Ordinance. C-5 "Series 2001B Ordinance" means Ordinance No. 13295 of the City passed on October 31, 2001, under which the Series 2001B Bonds were issued. "Series 2005A Bonds" means the Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2005A, of the City, in the original aggregate principal amount of $4,600,000, authorized and issued pursuant to the Series 2005A Ordinance. "Series 2005A Ordinance" means Ordinance No. 13878 of the City passed on May 4, 2005, under which the Series 2005A Bonds were issued. "Series 2005B Bonds" means the Sewerage System Refunding and Improvement Revenue Bonds (State Revolving Fund Program), Series 2005B, of the City, in the original aggregate principal amount of $10,105,000, authorized and issued pursuant to the Series 2005B Ordinance. "Series 2005B Ordinance" means Ordinance No. 13961 of the City passed on October 17, 2005, under which the Series 2005B Bonds were issued. "Series 2008 Bonds" means the Sewerage System Revenue Bonds (State Revolving Fund Program), Series 2008, of the City, in the original aggregate principal amount of $3,900,000, authorized and issued pursuant to the Series 2008 Ordinance. "Series 2008 Ordinance" means Substitute Bill 2008-64 for Ordinance No. 14411 of the City passed on October 6, 2008, under which the Series 2008 Bonds were issued. "Series 2010B Bonds" means the Taxable Sewerage System Revenue Bonds, Series 2010B (Build America Bonds — Direct Payment), of the City, in the original aggregate principal amount of $6,445,000, authorized and issued pursuant to the Series 2010 Ordinance. "Series 2010 Ordinance" means Ordinance No. 14698 of the City passed on July 19, 2010, under which the Sewerage System Revenue Bonds, Series 2010A (which are no longer outstanding), and the Series 2010B Bonds were issued. "Series 2012 Bonds" means the Sewerage System Revenue Bonds (State of Missouri — Direct Loan Program), Series 2012, of the City, in the original aggregate principal amount of $15,000,000, authorized and issued pursuant to the Series 2012 Ordinance. "Series 2012 Ordinance" means Ordinance No. 15039 of the City passed on November 5, 2012, under which the Series 2012 Bonds were issued. "Series 2014 Bonds" means the Sewerage System Revenue Bonds, Series 2014, of the City, in the original aggregate principal amount of $9,940,000, authorized and issued pursuant to the Series 2014 Ordinance. "Series 2014 Ordinance" means Ordinance No. 15256 of the City passed on May 5, 2014, under which the Series 2014 Bonds were issued. "Series 2016 Bonds" means the Sewerage System Revenue Bonds, Series 2016, of the City, in the original aggregate principal amount of $9,380,000, authorized and issued pursuant to the Series 2016 Ordinance. "Series 2016 Ordinance" means Ordinance No. 15536 of the City passed on June 6, 2015, under which the Series 2016 Bonds were issued. W "Special Record Date" means the date fixed by the Paying Agent pursuant to the Bond Ordinance for the payment of Defaulted Interest. "SRF Program" means the Missouri Leveraged State Water Pollution Control Revolving Fund Program of the DNR and the Authority. "SRF Program Bonds" means any System Revenue Bonds heretofore or hereafter issued in connection with the City's participation in the SRF Program. "Stated Maturity" when used with respect to any Bond or any installment of interest thereon means the date specified in such Bond and the Bond Ordinance as the fixed date on which the principal of such Bond or such installment of interest is due and payable. "Subsidy Payments" means funds received (or with respect to the Bond Ordinance funds that are reasonably expected to be received) by the City that either (a) must be used or (b) have been used (or with respect to the Bond Ordinance are reasonably expected to be used) to reduce the interest or principal payments on System Revenue Bonds. Such Subsidy Payments would include, but are not limited to, payments received by the City through a federal or State of Missouri program. "Surplus Account" means the account by that name ratified and confirmed by the Bond Ordinance. "System" means the entire sewerage plant and system owned and operated by the City for the collection, treatment and disposal of sewage, to serve the needs of the City and its inhabitants and others, including all appurtenances and facilities connected therewith or relating thereto, together with all extensions, improvements, additions and enlargements thereto hereafter made or acquired by the City. "System Revenue Bonds" means collectively the Bonds and all other revenue bonds or other obligations which are payable out of, or secured by an interest in, the Net Revenues of the System. "United States Government Obligations" means bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the principal of and interest on which are fully and unconditionally guaranteed as to full and timely payment by, the United States of America, including evidences of a direct ownership interest in future interest or principal payments on obligations issued or guaranteed by the United States of America (including the interest component of obligations of the Resolution Funding Corporation). "Valuation Date" means the first business day of each fiscal year of the System. Establishment of Funds and Accounts (a) There are created or ratified and ordered to be established and maintained in the treasury of the City the following separate funds and accounts to be known respectively as the: (1) Sewerage System Revenue Fund (the "Revenue Fund"). (2) Sewerage System Operation and Maintenance Account (the "Operation and Maintenance Account"). (3) Series 2020 Debt Service Account for the Bonds, in the Debt Service Fund (the "Debt Service Account"). (4) Sewerage System Depreciation and Replacement Account (the "Depreciation and Replacement Account"). (5) Sewerage System Surplus Account (the "Surplus Account"). (6) Rebate Fund. C-7 (b) The funds and accounts referred to in subparagraphs (a)(1) through (a)(6) of shall be maintained and administered by the City solely for the purposes and in the manner as provided in the Act and in the Bond Ordinance and in the Previously Issued Parity Ordinances so long as any of the Bonds or the Previously Issued Parity Bonds remain outstanding within the meaning of the Bond Ordinance and said Previously Issued Parity Ordinances, respectively. (c) The City acknowledges the creation and continuing existence of the reserve accounts, debt service accounts, principal accounts and interest accounts, as applicable, established under the Previously Issued Parity Ordinances. Revenue Fund The City covenants and agrees that from and after the delivery of the Bonds, and continuing as long as any of the Bonds remain Outstanding hereunder, all of the Revenues shall as and when received be paid and deposited into the Revenue Fund unless otherwise specifically provided by the Bond Ordinance. Said Revenues shall be segregated and kept separate and apart from all other moneys, revenues, funds and accounts of the City and shall not be commingled with any other moneys, revenues, funds and accounts of the City. The Revenue Fund shall be administered and applied solely for the purposes and in the manner provided in the Bond Ordinance. Application of Moneys in Funds and Accounts The City covenants and agrees that from and after the delivery of the Bonds and continuing so long as any of the Bonds shall remain Outstanding, it will administer and allocate all of the moneys then held in the Revenue Fund as follows: (a) Operation and Maintenance Account. On the 25th day of each month, there shall be paid and credited to the Operation and Maintenance Account an amount sufficient to pay the estimated Expenses during the ensuing month. All amounts paid and credited to the Operation and Maintenance Account shall be expended and used by the City solely for the purpose of paying the Expenses of the System. (b) Debt Service Account. On the 25th day of each month, there shall next be paid and credited to the Debt Service Account, to the extent necessary to meet on each Bond Payment Date the payment of all interest on and principal of the Bonds, the following sums: (1) Beginning with the first of said deposits and continuing on the 25th day of each month thereafter to and including February 25, 2021, an equal pro rata portion of the amount of interest becoming due on the Bonds on March 1, 2021, and thereafter, beginning on March 25, 2021, and continuing on the 25th day of each month thereafter so long as the Bonds shall remain outstanding and unpaid, an amount not less than 1/6 of the amount of interest that will become due on the Bonds on the next succeeding Interest Payment Date; and (2) Beginning with the first of said deposits and continuing on the 25th day of each month thereafter to and including August 25, 2021, an equal pro rata portion of the amount of principal becoming due on the respective series of the Bonds on September 1, 2021; and thereafter, beginning on September 25, 2020, and continuing on the 25th day of each month thereafter so long as any of the the Bonds shall remain outstanding and unpaid, an amount not less than 1/12 of the amount of principal that will become due on the Bonds on the next succeeding Maturity. AD The amounts required to be paid and credited to the Debt Service Account pursuant to this subparagraph (b) shall be so paid at the same time and on a parity with the amounts at the time required to be paid and credited to the debt service accounts established for the payment of principal and interest on Parity Bonds under the provisions of the Parity Ordinances. If at any time the moneys in the Revenue Fund are insufficient to make in full the payments and credits at the time required to be made to the Debt Service Account and to the debt service accounts established to pay the principal of and interest on any Parity Bonds, the available moneys in the Revenue Fund shall, unless otherwise directed by the Previously Issued Parity Ordinances, be divided among such debt service accounts in proportion to the respective principal amounts of said series of bonds at the time outstanding which are payable from the moneys in said debt service accounts. All amounts paid and credited to the Debt Service Account shall be expended and used by the City for the sole purpose of paying the interest on and principal of the Bonds as and when the same become due on each Bond Payment Date. (c) Depreciation and Replacement Account. So long as the amount in the Depreciation and Replacement Account aggregates $[500,000] (the "Depreciation and Replacement Accumulation Requirement"), no further deposits will be required in the Depreciation and Replacement Account. But if the City shall ever be required to expend and use a part of the moneys in said Depreciation and Replacement Account for its authorized purposes and such expenditure shall reduce the amount of said Depreciation and Replacement Account below the Depreciation and Replacement Accumulation Requirement, then the City shall beginning November 1 of the fiscal year immediately following fiscal year in which the Depreciation and Replacement Account fell below the Depreciation and Replacement Accumulation Requirement, and on each November 1 thereafter, deposit the sum of $[120,000] each year until such Depreciation and Replacement Account aggregates the Depreciation and Replacement Accumulation Requirement. The amounts required to be deposited in the Depreciation and Replacement Account by the Bond Ordinance shall include those amounts required to be deposited by the Previously Issued Parity Bonds. Except as provided in the Bond Ordinance, moneys in the Depreciation and Replacement Account shall be expended and used by the City, if no other funds are available therefor, solely for the purpose of making unusual or extraordinary replacements and repairs in and to the System as may be necessary to keep the System in good repair and working order and to assure the continued effective and efficient operation thereof, including replacing or repairing portions of the System or major items of any plant or equipment which either have been fully depreciated and are worn out or have become obsolete, inefficient or uneconomical. No moneys in said Account shall be used for the purpose of extending or enlarging the System. (d) Surplus Account. After all payments and credits required at the time to be made under the provisions of the subparagraphs above have been made, all moneys remaining in the Revenue Fund shall be paid and credited to the Surplus Account. Moneys in the Surplus Account may be expended and used for the following purposes as determined by the City Council of the City: (1) Paying Expenses of the System to the extent that may be necessary after the application of the moneys held in the Operation and Maintenance Account under the provisions of subparagraph (a) above. (2) Paying the cost of extending, enlarging or improving the System; (3) Preventing default in, anticipating payments into or increasing the amounts in the debt service accounts or debt service reserve accounts for System Revenue Bonds or the Depreciation and Replacement Account, or any one of them, said payments made to NK prevent default to be made in the order prescribed in the Bond Ordinance or in the applicable sections of ordinances authorizing additional System Revenue Bonds hereafter issued, or establishing or increasing the amount of any debt service account or debt service reserve account created by the City for the payment of any additional System Revenue Bonds; or (4) Calling, redeeming and paying prior to Stated Maturity, or, at the option of the City, purchasing in the open market at the best price obtainable not exceeding the redemption price (if any bonds are callable), the Bonds or any other System Revenue Bonds, including principal, interest and redemption premium, if any; or (5) Any other lawful purpose in connection with the operation of the System and benefitting the System. So long as any of the Bonds remain Outstanding, no moneys derived from the operation of the System shall be diverted to the general governmental or municipal functions of the City. (e) Deficiency of Payments into Funds and Accounts. If at any time the Revenues shall be insufficient to make any payment on the date or dates specified above, the City will make good the amount of such deficiency by making additional payments or credits out of the first available Revenues thereafter received by the City, such payments and credits being made and applied in the order specified above. Payments Due on Saturdays, Sundays and Holidays In any case where a Bond Payment Date is not a Business Day, then payment of principal, Redemption Price or interest need not be made on such Bond Payment Date but may be made on the next succeeding Business Day with the same force and effect as if made on such Bond Payment Date, and no interest shall accrue for the period after such Bond Payment Date. Nonpresentment of Bonds In the event any Bond shall not be presented for payment when the principal thereof becomes due at Maturity, if funds sufficient to pay such Bond shall have been made available to the Paying Agent all liability of the City to the Registered Owner thereof for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the Registered Owner of such Bond, who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under the Bond Ordinance or on, or with respect to, said Bond. If any Bond is not presented for payment within one year following the date when such Bond becomes due at Maturity, the Paying Agent shall repay to the City without liability for interest thereon the funds theretofore held by it for payment of such Bond, and such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured obligation of the City, and the Registered Owner thereof shall be entitled to look only to the City for payment, and then only to the extent of the amount so repaid to it by the Paying Agent, and the City shall not be liable for any interest thereon and shall not be regarded as a trustee of such money. Deposit and Investment of Moneys (a) Moneys in each of the funds and accounts created by and referred to in the Bond Ordinance shall be deposited in a bank or banks or other legally permitted financial institutions located in the State of Missouri that are members of the Federal Deposit Insurance Corporation. All such deposits shall be continuously and adequately secured by the banks or financial institutions holding such deposits as provided by the laws of the State of Missouri. C-10 (b) Moneys held in any fund or account held in the custody of the City referred to in the Bond Ordinance may be invested in Permitted Investments; provided, however, that no such investment shall be made for a period extending longer than the date when the moneys invested may be needed for the purpose for which such fund or account was created. All earnings on any investments held in any fund or account shall accrue to and become a part of such fund or account. In determining the amount held in any fund or account under any of the provisions of the Bond Ordinance, obligations shall be valued at the lower of the cost or the market value thereof. If and when the amount held in any fund or account shall be in excess of the amount required by the provisions of the Bond Ordinance, the City shall direct that such excess be paid and credited to the Revenue Fund. (c) So long as any of the Previously Issued Parity Bonds remain outstanding and unpaid, any investments made pursuant to the Bond Ordinance shall be subject to any restrictions in the Previously Issued Parity Ordinances with respect to the funds and accounts created or ratified by and referred to in the Previously Issued Parity Ordinances. Efficient and Economical Operation The City will continuously own and will operate the System as a revenue producing System in an efficient and economical manner and will keep and maintain the same in good repair and working order. The City will establish and maintain such rules and regulations for the use of the System as may be necessary to assure maximum utilization and most efficient operation of the System. Rate Covenant The City will fix, establish, maintain and collect such rates and charges for the use and services furnished by or through the System as will produce Revenues sufficient to (a) pay the Expenses of the System; (b) pay the principal of and interest on the Bonds as and when the same become due; and (c) provide reasonable and adequate reserves for the payment of the Bonds and the interest thereon and for the protection and benefit of the System as provided in the Bond Ordinance. The City further covenants and agrees that such rates and charges will be sufficient to enable the City to have in each fiscal year Net Revenues not less than 110% of the Debt Service Requirements for such fiscal year. The City will require the prompt payment of accounts for service rendered by or through the System and will promptly take whatever action is legally permissible to enforce and collect delinquent charges. The City will, from time to time as often as necessary, in accordance with and subject to applicable legal requirements, revise the rates and charges aforesaid in such manner as may be necessary or proper so that the Net Revenues will be sufficient to cover the obligations of the City under the Bond Ordinance. If for any two consecutive fiscal years Net Revenues shall be an amount less than as provided above, the City will immediately employ a Consultant to make recommendations with respect to such rates and charges. A copy of the Consultant's report and recommendations shall be filed with the City Clerk and with the Purchaser of the Bonds and shall be furnished to any Registered Owner of the Bonds requesting a copy of the same, at the cost of such Registered Owner. The City shall, to the extent feasible, follow the recommendations of the Consultant. Restrictions on Mortgage or Sale of System The City will not mortgage, pledge or otherwise encumber the System or any part thereof, nor will it sell, lease or otherwise dispose of the System or any material part thereof; provided, however, the City may (a) sell at fair market value any portion of the System which shall have been replaced by other similar property of at least equal value, or which shall cease to be necessary for the efficient operation of the System, and in the event of sale, the City will apply the proceeds to either (1) redemption of Outstanding Bonds in accordance with the provisions governing redemption of Bonds in advance of Stated Maturity, or (2) replacement of the property so disposed of by other property the Revenues of which shall be incorporated into the System as provided in the Bond Ordinance; C-11 (b) cease to operate, abandon or otherwise dispose of any property which has become obsolete, nonproductive or otherwise unusable to the advantage of the City; or (c) lease, (1) as lessor, any real or personal property which is unused or unimproved, or which has become obsolete, nonproductive or otherwise unusable to the advantage of the City, or which is being acquired as a part of a lease/purchase financing for the acquisition and/or improvement of such property; and/or (2) as lessee, with an option of the City to purchase, any real or personal property for the extension and improvement of the System. Property being leased as lessor and/or lessee pursuant to this subparagraph (c) shall not be treated as part of the System for purposes of the Bond Ordinance and may be mortgaged, pledged or otherwise encumbered. Insurance The City will carry and maintain insurance with respect to the System and its operations against casualties, contingencies and risks (including but not limited to property and casualty, fire and extended coverage insurance upon all of the properties forming a part of the System insofar as the same are of an insurable nature, public liability insurance, business interruption insurance, worker's compensation and employee dishonesty insurance), such insurance to be of the character and coverage and in such amounts as would normally be carried by other municipalities or public entities engaged in similar activities of comparable size and similarly situated. In the event of loss or damage, the City, with reasonable dispatch, will use the proceeds of such insurance in reconstructing and replacing the property damaged or destroyed, or in paying the claims on account of which such proceeds were received, or if such reconstruction or replacement is unnecessary or impracticable, then the City will pay and deposit the proceeds of such insurance into the Revenue Fund. The City will annually review the insurance it maintains with respect to the System to determine that such insurance is customary and adequate to protect its property and operations. The cost of all insurance obtained pursuant to the requirements of the Bond Ordinance shall be paid as an Expense out of the Revenues. Books, Records and Accounts The City will install and maintain proper books, records and accounts (entirely separate from all other records and accounts of the City) in which complete and correct entries will be made of all dealings and transactions of or in relation to the System. Such accounts shall show the amount of Revenues of the System, the application of such Revenues, and all financial transactions in connection therewith. Said books shall be kept by the City according to standard accounting practices as applicable to the operation of facilities comparable to the System. Annual Budget Prior to the commencement of each fiscal year, the City will cause to be prepared and filed with the City Clerk a budget setting forth the estimated receipts and expenditures of the System for the next succeeding fiscal year. The City Clerk, promptly upon the filing of said budget in the City Clerk's office, will mail a copy of said budget to the Purchaser of the Bonds. Annual Audit Annually, promptly after the end of the fiscal year, the City will cause an audit of the System to be made for the preceding fiscal year by an Accountant to be employed for that purpose and paid from the Revenues. Said annual audit shall cover in reasonable detail the operation of the System during such fiscal year. C-12 Within 30 days after the completion of each such audit, a copy thereof shall be filed in the office of the City Clerk, and, upon the Purchaser's request, a duplicate copy of said audit shall be mailed to the Purchaser of the Bonds. Such audits shall at all times during the usual business hours be open to the examination and inspection by any taxpayer, any user of the services of the System, any Registered Owner of any of the Bonds, or by anyone acting for or on behalf of such taxpayer, user or Registered Owner. A copy of any such audit will, upon request and upon receipt by the City of payment of the reasonable cost of preparing and mailing the same, be sent to any Bondowner or prospective Bondowner. As soon as possible after the completion of the annual audit, the governing body of the City shall review such audit, and if any audit shall disclose that proper provision has not been made for all of the requirements of the Bond Ordinance, the City will promptly cure such deficiency and will promptly proceed to increase the rates and charges to be charged for the use and services furnished by the System as may be necessary to adequately provide for such requirements. Tax Covenants (a) The City covenants and agrees that (1) it will comply with all applicable provisions of the Code, including Sections 103 and 141 through 150, necessary to maintain the exclusion from federal gross income of the interest on the Bonds and (2) it will not use or permit the use of any proceeds of Bonds or any other funds of the City, nor 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 federal gross income of the interest on the Bonds. The City will also pass 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 law in order to ensure that the interest on the 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 the proceeds of the Bonds as soon as practicable for the purposes for which the Bonds are issued, and (2) it will not invest or directly or indirectly use or permit the use of any proceeds of the Bonds or any other funds of the City in any manner, or take or omit to take any action, that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148(a) of the Code. (c) The City covenants that it will pay or provide for the payment from time to time of all arbitrage rebate to the United States pursuant to Section 148(f) of the Code and the Federal Tax Certificate. This covenant shall survive payment in full or defeasance of the Bonds. The Federal Tax Certificate may be amended or replaced if, in the opinion of Bond Counsel, such amendment or replacement will not adversely affect the exclusion from federal gross income of the interest on the Bonds. (d) The City covenants that it will not use any portion of the proceeds of the Bonds, including any investment income earned on such proceeds, directly or indirectly, in a manner that would cause any Bond to be a "private activity bond" within the meaning of Section 141 of the Code. (e) The foregoing covenants shall remain in full force and effect notwithstanding the defeasance of the Bonds pursuant to the Bond Ordinance or any other provision of the Bond Ordinance, until the final Maturity of all Bonds Outstanding. Senior Lien Bonds The City covenants and agrees that so long as any of the Bonds remain Outstanding, the City will not issue any additional bonds or incur or assume any other debt obligations appearing as liabilities on the balance sheet of the System for the payment of moneys determined in accordance with generally accepted accounting principles consistently applied, including capital leases as defined by generally accepted accounting principles, payable out of the Net Revenues of the System or any part thereof which are superior to the Bonds. C-13 Parity Bonds and Other Obligations The City covenants and agrees that so long as any of the Bonds remain Outstanding, it will not issue any additional bonds or other long-term obligations payable out of the Net Revenues of the System or any part thereof which stand on a parity or equality with the Bonds ("Parity Bonds") unless the following conditions are met: (a) The City shall not be in default in the payment of principal of or interest on any Bonds or any Parity Bonds at the time outstanding or in making any payment at the time required to be made into the respective funds and accounts created by and referred to in the Bond Ordinance or any Parity Ordinance for Parity Bonds at the time outstanding (unless such additional revenue bonds or obligations are being issued to provide funds to cure such default); and (b) Either of the following: (1) The average annual Net Revenues as set forth in the two most recent annual audits for the two fiscal years immediately preceding the issuance of additional bonds, as determined by an Accountant or a Consultant, shall have been equal to at least 110% of the Average Annual Debt Service for all System Revenue Bonds of the City, including the additional bonds proposed to be issued. In determining the average annual Net Revenues for the two preceding fiscal years for the purpose of this subparagraph, the City may obtain an Accountant or a Consultant to adjust said Net Revenues for the two preceding fiscal years by adding thereto, in the event the City shall have made any increase in rates for the use and services of the System and such increase shall not have been in effect during all of the two fiscal years for which annual audits are available immediately preceding the issuance of additional bonds, the amount, as estimated by the Accountant or Consultant, of the additional Net Revenues which would have resulted from the operation of the System during said two preceding fiscal years had such rate increase been in effect for the entire period; or (2) The projected average annual Net Revenues for the two fiscal years immediately following the fiscal year in which the improvements to the System, the cost of which is being financed by such additional bonds, are to be placed in commercial operation, as determined by an Accountant or a Consultant, shall be equal to at least 110% of the average of the Debt Service Requirements in all fiscal years succeeding said fiscal year in which such improvements are expected to be placed in commercial operation. In determining the projected average annual Net Revenues for the purpose of this subparagraph, the Accountant or Consultant may adjust said projections by adding thereto any estimated increase in Net Revenues resulting from any increase or increases in rates for the use and services of the System duly made by the City which shall be in effect for the period of such projections and which, in the opinion of the Accountant or Consultant, are economically feasible and reasonably considered necessary based on projected operations of the System. Additional sewerage system revenue bonds of the City issued under the conditions set forth in the Bond Ordinance shall stand on a parity with the Bonds and shall enjoy complete equality of lien on and claim against the Net Revenues with the Bonds, and the City may make equal provision for paying said bonds and the interest thereon out of the Revenue Fund and may likewise provide for the creation of reasonable debt service accounts and debt service reserve accounts for the payment of such additional bonds and the interest thereon out of moneys in the Revenue Fund. C-14 Junior Lien Bonds and Other Obligations Nothing in the Bond Ordinance contained shall prohibit or restrict the right of the City to issue additional revenue bonds or other revenue obligations for any lawful purpose in connection with the operation of the System and to provide that the principal of and interest on said revenue bonds or obligations shall be payable out of the Net Revenues of the System, provided at the time of the issuance of such additional revenue bonds or obligations the City shall not be in default in the performance of any covenant or agreement contained in the Bond Ordinance (unless such additional revenue bonds or obligations are being issued to provide funds to cure such default), and provided further that such additional revenue bonds or obligations shall be junior and subordinate to the Bonds so that if at any time the City shall be in default in paying either interest on or principal of the Bonds, or if the City shall be in default in making any payments required to be made by it under the provisions of subparagraphs (a), (b), (c) and (d) under the heading "Application of Moneys in Funds and Accounts" the City shall make no payments of either principal of or interest on said junior and subordinate revenue bonds or obligations until said default or defaults be cured. In the event of the issuance of any such junior and subordinate revenue bonds or obligations, the City, subject to the provisions aforesaid, may make provision for paying the principal of and interest on said revenue bonds or for paying said obligations out of moneys in the Revenue Fund. Refunding Bonds The City shall have the right, without complying with the provisions of the Bond Ordinance summarized under the heading "Parity Bonds" above, to refund any of the Bonds under the provisions of any law then available, and the refunding bonds so issued shall enjoy complete equality of pledge with any of the Bonds that are not refunded, if any, upon the Net Revenues of the System; provided, however, that if only a portion of the Bonds are refunded and if said Bonds are refunded in such manner that the aggregate amount of principal and interest scheduled to become due on the refunding bonds in any fiscal year (taking into account scheduled mandatory redemptions) exceeds the aggregate amount of principal and interest scheduled to become due on the refunded Bonds in said fiscal year (taking into account scheduled mandatory redemptions), then said Bonds may be refunded without complying with the provisions of the Bond Ordinance summarized under the heading "Parity Bonds" above only by and with the written consent of the Registered Owners of a majority in principal amount of the Bonds not refunded. Acceleration of Maturity Upon Default The City covenants and agrees that if it defaults in the payment of the principal of or interest on any of the Bonds as the same shall become due on any Bond Payment Date, or if the City or its governing body or any of the officers, agents or employees thereof fail or refuse to comply with any of the provisions of the Bond Ordinance or of the constitution or statutes of the State of Missouri, and such default continues for a period of 60 days after written notice specifying such default has been given to the City by the Registered Owner of any Bond then Outstanding, then, at any time thereafter and while such default continues, the Registered Owners of 25% in principal amount of the Bonds then Outstanding may, by written notice to the City filed in the office of the City Clerk or delivered in person to said City Clerk, declare the principal of all Bonds then Outstanding to be due and payable immediately, and upon any such declaration given as aforesaid, all of said Bonds shall become and be immediately due and payable, anything in the Bond Ordinance or in the Bonds contained to the contrary notwithstanding. This provision, however, is subject to the condition that if at any time after the principal of said Outstanding Bonds has been so declared to be due and payable, all arrears of interest upon all of said Bonds, except interest accrued but not yet due on such Bonds, and all arrears of principal upon all of said Bonds has been paid in full and all other defaults, if any, by the City under the provisions of the Bond Ordinance and under the provisions of the statutes of the State of Missouri have been cured, then and in every such case the Registered Owners of a majority in principal amount of the Bonds then Outstanding, by written notice to the City given as specified above, may rescind and annul such declaration and its consequences, but C-15 no such rescission or annulment shall extend to or affect any subsequent default or impair any rights consequent thereon. Other Remedies The provisions of the Bond Ordinance, including the covenants and agreements therein contained, shall constitute a contract between the City and the Registered Owners of the Bonds, and the Registered Owner or Owners of not less than 10% in principal amount of the Bonds at the time Outstanding shall have the right for the equal benefit and protection of all Registered Owners of Bonds similarly situated: (a) by mandamus or other suit, action or proceedings at law or in equity to enforce the rights of such Registered Owner or Owners against the City and its officers, agents and employees, and to require and compel duties and obligations required by the provisions of the Bond Ordinance or by the constitution and laws of the State of Missouri; (b) by suit, action or other proceedings in equity or at law to require the City, its officers, agents and employees to account as if they were the trustees of an express trust; and (c) by suit, action or other proceedings in equity or at law to enjoin any acts or things which may be unlawful or in violation of the rights of the Registered Owners of the Bonds. Limitation on Rights of Bondowners No one or more Bondowners secured hereby shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security granted and provided for in the Bond Ordinance, or to enforce any right hereunder, except in the manner provided in the Bond Ordinance, and all proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of all Registered Owners of such Outstanding Bonds. No Obligation to Levy Taxes Nothing contained in the Bond Ordinance shall be construed as imposing on the City any duty or obligation to levy any taxes either to meet any obligation incurred in the Bond Ordinance or to pay the principal of or interest on the Bonds. Defeasance (a) When any or all of the Bonds or the interest payments thereon shall have been paid and discharged, then the requirements contained in the Bond Ordinance and the pledge of Net Revenues made hereunder and all other rights granted hereby shall terminate with respect to the Bonds or interest payments so paid and discharged. Bonds or the interest payments thereon shall be deemed to have been paid and discharged within the meaning of the Bond Ordinance if there has been deposited with the Paying Agent or other commercial bank or trust company located in the State of Missouri and having full trust powers, at or prior to the Stated Maturity or Redemption Date of said Bonds or the interest payments thereon, in trust for and irrevocably appropriated thereto, moneys and/or Defeasance Obligations which, together with the interest to be earned thereon, will be sufficient for the payment of the principal or Redemption Price of said Bonds, and/or interest to accrue on such Bonds to the Stated Maturity or Redemption Date, as the case may be, or if default in such payment shall have occurred on such date, then to the date of the tender of such payments; provided, however, that if any such Bonds shall be redeemed prior to the Stated Maturity thereof, (1) the City shall have elected to redeem such Bonds, and (2) either notice of such redemption shall have been given, or the City shall have given irrevocable instructions, or shall have provided for an escrow agent to give irrevocable instructions, to the Paying Agent to redeem such Bonds in compliance with the Bond Ordinance. C-16 (b) Any moneys and Defeasance Obligations that at any time shall be deposited with the Paying Agent or other commercial bank or trust company by or on behalf of the City, for the purpose of paying and discharging any of the Bonds or the interest payments thereon, shall be and are hereby assigned, transferred and set over to the Paying Agent or other bank or trust company in trust for the respective Registered Owners of such Bonds, and such moneys shall be and are hereby irrevocably appropriated to the payment and discharge thereof. All moneys and Defeasance Obligations deposited with the Paying Agent or other bank or trust company shall be deemed to be deposited in accordance with and subject to all of the provisions contained in the Bond Ordinance. (c) In the event of an advance refunding, the City shall cause to be delivered a verification report of an independent nationally recognized certified public accountant. Amendments (a) The Continuing Disclosure Undertaking is exempt from the provisions of the Bond Ordinance summarized under this "Amendments" caption and is subject to amendment and modification only as provided therein. The rights and duties of the City and the Bondowners, and the terms and provisions of the Bonds or of the Bond Ordinance, may be amended or modified at any time in any respect by ordinance of the City with the written consent of the Registered Owners of not less than a majority in principal amount of the Bonds then Outstanding, such consent to be evidenced by an instrument or instruments executed by such Registered Owners and duly acknowledged or proved in the manner of a deed to be recorded, and such instrument or instruments shall be filed with the City Clerk, but no such modification or alteration shall: (1) extend the maturity of any payment of principal or interest due upon any Bond; (2) effect a reduction in the amount which the City is required to pay by way of principal of or interest on any Bond; (3) permit the creation of a lien on the Net Revenues of the System prior or equal to the lien of the Bonds or Parity Bonds; (4) permit preference or priority of any Bonds over any other Bonds; or (5) reduce the percentage in principal amount of Bonds required for the written consent to any modification or alteration of the provisions of the Bond Ordinance. (b) Any provision of the Bonds or of the Bond Ordinance may, however, be amended or modified by Ordinance duly adopted by the governing body of the City at any time in any respect with the written consent of the Registered Owners of all of the Bonds at the time Outstanding. (c) Without notice to or the consent of any Bondowners, the City may amend or supplement the Ordinance for the purpose of curing any formal defect, omission, inconsistency or ambiguity therein or in connection with any other change therein which is not materially adverse to the interests of the Bondowners. C-17 APPENDIX D FORM OF CONTINUING DISCLOSURE UNDERTAKING This CONTINUING DISCLOSURE UNDERTAKING dated as of August [ ], 2020 (this "Continuing Disclosure Undertaking"), is executed and delivered by CITY OF JEFFERSON, MISSOURI (the "Issuer"). RECITALS 1. This Continuing Disclosure Undertaking is executed and delivered by the Issuer in connection with the issuance by the Issuer of $5,800,000 Sewerage System Refunding Revenue Bonds, Series 2020 (the "Bonds"), pursuant to an Ordinance adopted by the governing body of the Issuer (the "Ordinance"). 2. The Issuer is entering into this Continuing Disclosure Undertaking for the benefit of the Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"). The Issuer is the only "obligated person" with responsibility for continuing disclosure hereunder. The Issuer covenants and agrees as follows: Section 1. Definitions. In addition to the definitions set forth in the Ordinance, which apply to any capitalized term used in this Continuing Disclosure Undertaking unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the Issuer pursuant to, and as described in, Section 2 of this Continuing Disclosure Undertaking. "Beneficial Owner" means any registered owner of any Bonds and any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Business Day" means a day other than (a) a Saturday, Sunday or legal holiday, (b) a day on which banks located in any city in which the principal office or designated payment office of the paying agent or the Dissemination Agent is located are required or authorized by law to remain closed, or (c) a day on which the Securities Depository or the New York Stock Exchange is closed. "Dissemination Agent" means any entity designated in writing by the Issuer to serve as dissemination agent pursuant to this Continuing Disclosure Undertaking and which has filed with the Issuer a written acceptance of such designation. "EMMA" means the Electronic Municipal Market Access system for municipal securities disclosures established and maintained by the MSRB, which can be accessed at www.emma.msrb.org. "Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of (a) or (b) in this definition; provided however, the term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. D-1 "Fiscal Year" means the 12 -month period beginning on November 1 and ending on October 31 or any other 12 -month period selected by the Issuer as the Fiscal Year of the Issuer for financial reporting purposes. "Material Events" means any of the events listed in Section 3 of this Continuing Disclosure Undertaking. "MSRB" means the Municipal Securities Rulemaking Board, or any successor repository designated as such by the Securities and Exchange Commission in accordance with the Rule. "Participating Underwriter" means any of the original underwriter(s) of the Bonds required to comply with the Rule in connection with the offering of the Bonds. Section 2. Provision of Annual Reports. (a) The Issuer shall, not later than April 30th immediately following the end of the Issuer's Fiscal Year, commencing with the Fiscal Year ending October 31, 2020, file with the MSRB, through EMMA, the following financial information and operating data (the "Annual Report"): (1) The audited financial statements of the Issuer for the prior Fiscal Year, prepared in accordance with accounting principles described in the notes to the financial statements contained in Appendix B to the final Official Statement related to the Bonds. If audited financial statements are not available by the time the Annual Report is required to be provided pursuant to this Section, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement relating to the Bonds, and the audited financial statements shall be provided in the same manner as the Annual Report promptly after they become available. (2) Updates as of the end of the Fiscal Year of certain financial information and operating data contained in the final Official Statement related to the Bonds, as described in Exhibit A, in substantially the same format contained in the final Official Statement with such adjustments to formatting or presentation determined to be reasonable by the Issuer. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Issuer is an "obligated person" (as defined by the Rule), which have been provided to the MSRB and are available through EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB on EMMA. The Issuer shall clearly identify each such other document so included by reference. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in this Section; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Issuer's Fiscal D-2 Year changes, it shall give notice of such change in the same manner as for a Material Event under Section 3, and the Annual Report deadline provided above shall automatically become the last day of the sixth month after the end of the Issuer's new fiscal year. (b) The Annual Report shall be filed with the MSRB in such manner and format as is prescribed by the MSRB. Section 3. Reporting of Material Events. Not later than 10 Business Days after the occurrence of any of the following events, the Issuer shall give, or cause to be given to the MSRB, through EMMA, notice of the occurrence of any of the following events with respect to the Bonds ("Material Events"): (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to rights of bondholders, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the obligated person; (13) the consummation of a merger, consolidation, or acquisition involving the obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of the trustee, if material; (15) incurrence of a Financial Obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties. If the Issuer has not submitted the Annual Report to the MSRB by the date required in Section 2(a), the Issuer shall send a notice to the MSRB, in substantially the form attached hereto as Exhibit B, of the failure of the Issuer to file on a timely basis the Annual Report, which notice shall be given by the Issuer in accordance with this Section 3. Section 4. Termination of Reporting Obligation. The Issuer's obligations under this Continuing Disclosure Undertaking shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If the Issuer's obligations under this Continuing Disclosure Undertaking are assumed in full by some other entity, such person shall be responsible for compliance with this Continuing Disclosure Undertaking in the same manner as if it were the Issuer, and the Issuer shall have no further responsibility D-3 hereunder. If such termination or substitution occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination or substitution in the same manner as for a Material Event under Section 3. Section 5. Dissemination Agents. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Continuing Disclosure Undertaking, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign as dissemination agent hereunder at any time upon 30 days prior written notice to the Issuer. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report (including without limitation the Annual Report) prepared by the Issuer pursuant to this Continuing Disclosure Undertaking. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Continuing Disclosure Undertaking, the Issuer may amend this Continuing Disclosure Undertaking and any provision of this Continuing Disclosure Undertaking may be waived, provided that Bond Counsel or other counsel experienced in federal securities law matters provides the Issuer with its written opinion that the undertaking of the Issuer contained herein, as so amended or after giving effect to such waiver, is in compliance with the Rule and all current amendments thereto and interpretations thereof that are applicable to this Continuing Disclosure Undertaking. In the event of any amendment or waiver of a provision of this Continuing Disclosure Undertaking, the Issuer shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (1) notice of such change shall be given in the same manner as for a Material Event under Section 3, and (2) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 7. Additional Information. Nothing in this Continuing Disclosure Undertaking shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Continuing Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that required by this Continuing Disclosure Undertaking. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event, in addition to that specifically required by this Continuing Disclosure Undertaking, the Issuer shall have no obligation under this Continuing Disclosure Undertaking to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 8. Default. If the Issuer fails to comply with any provision of this Continuing Disclosure Undertaking, any Participating Underwriter or any Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under this Continuing Disclosure Undertaking. A default under this Continuing Disclosure Undertaking shall not be deemed an event of default under the Ordinance or the Bonds, and the sole remedy under this Continuing Disclosure Undertaking in the event of any failure of the Issuer to comply with this Continuing Disclosure Undertaking shall be an action to compel performance. D-4 Section 9. Beneficiaries. This Continuing Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Participating Underwriter, and the Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Section 10. Severability. If any provision in this Continuing Disclosure Undertaking, the Ordinance or the Bonds shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 11. Electronic Transactions. The arrangement described herein may be conducted and related documents may be sent, received, or stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Section 12. Governing Law. This Continuing Disclosure Undertaking shall be governed by and construed in accordance with the laws of the State of Missouri. IN WITNESS WHEREOF, the Issuer has caused this Continuing Disclosure Undertaking to be executed as of the day and year first above written. CITY OF JEFFERSON, MISSOURI By: Title: Mayor D-5 EXHIBIT A TO CONTINUING DISCLOSURE UNDERTAKING FINANCIAL INFORMATION AND OPERATING DATA TO BE INCLUDED IN ANNUAL REPORT The operating data in the sections and tables in Appendix A contained in the final Official Statement relating to the Bonds generally described as follows: The tables under "HISTORY AND OPERATION OF THE SYSTEM." • The information contained in the table "Historical Debt Service Coverage" under "FINANCIAL INFORMATION CONCERNING THE SYSTEM" for the most recently ended fiscal year. MO EXHIBIT B TO CONTINUING DISCLOSURE UNDERTAKING FORM OF FAILURE TO FILE NOTICE Event Notice Pursuant to SEC Rule 15c2-12(b)(5)(C) Issuer/Obligated Person: City of Jefferson, Missouri Issues to which this Notice relates: Sewerage System Refunding Revenue Bonds, Series 2020 CUSIP Numbers for Issue to which this Notice relates: Maturity Date CUSIP Number Event Reported: Failure to Timely File Annual Financial Information/Audited Financial Statements The Obligated Person did not timely file its operating data for the fiscal year ended October 31, 20 Such operating data [*will be*] [*was*] filed with the MSRB through EMMA on , 20. The Obligated Person did not timely file its audited financial statements for the fiscal year ended October 31, 20 . Such audited financial statements [*will be*] [*were*] filed with the MSRB through EMMA on ,20 The information contained in this Notice has been submitted by the Obligated Person pursuant to contractual undertakings the Obligated Person made in accordance with SEC Rule 15c2-12. Nothing contained in the undertaking or this Notice is, or should be construed as, a representation by the Obligated Person that the information included in this Notice constitutes all of the information that may be material to a decision to invest in, hold or dispose of any of the securities listed above, or any other securities of the Obligated Person. For additional information, contact: Margaret Mueller, Director of Finance City of Jefferson, Missouri 320 E. McCarty Street Jefferson City, Missouri 65101 (573)645-6435 Date Submitted: [Date] D-7 CITY OF JEFFERSON, MISSOURI APPENDIX E BOOK -ENTRY ONLY SYSTEM The following information concerning DTC and DTC's Book -Entry Only System has been obtained from sources that the City believes to be reliable, but is not guaranteed as to accuracy or completeness by and is not to be construed as a representation by the City, the Paying Agent or the Underwriter. The City, the Paying Agent and the Underwriter make no assurances that DTC, Direct Participants, Indirect Participants or other nominees of the Beneficial Owners will act in accordance with the procedures described above or in a timely manner. General. The Bonds are available in book -entry only form. Purchasers of the Bonds will not receive certificates representing their interests in the Bonds. Ownership interests in the Bonds will be available to purchasers only through a book -entry system (the "Book -Entry System") maintained by The Depository Trust Company "DTC"), New York, New York. DTC will act as securities depository for the Bonds. The Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered Bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. The following discussion will not apply to any Bonds issued in certificate form due to the discontinuance of the DTC Book Entry Only System, as described below. DTC and its Participants. DTC, the world's largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchase of Ownership Interests. Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond (`Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of E-1 Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book -entry system for the Bonds is discontinued. Transfers. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of the Bonds with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Notices. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond Ordinance. For example, Beneficial Owners of the Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Paying Agent and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Voting. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments of Principal, Redemption Price and Interest. Payment of principal or redemption price of and interest on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from the City or the Paying Agent, on the payment date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, its nominee, the Paying Agent or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal or redemption price of and interest on the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Paying Agent. Disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. Discontinuation of Book -Entry System. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered as described in the Bond Ordinance. The City may decide to discontinue use of the system of book -entry -only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed, registered in the name of DTC's partnership nominee, Cede & Co. (or such other name as may be requested by an authorized E-2 representative of DTC), and delivered to DTC (or a successor securities depository), to be held by it as securities depository for Direct Participants. If, however, the system of book -entry -only transfers has been discontinued and a Direct Participant has elected to withdraw its Bonds from DTC (or such successor securities depository), Bond certificates may be delivered to Beneficial Owners in the manner described in the Bond Ordinance. RESPONSIBILITY OR OBLIGATIONS TO SUCH PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES WITH RESPECT TO THE PAYMENTS TO OR THE PROVIDING OF NOTICE FOR THE PARTICIPANTS, THE INDIRECT PARTICIPANTS, OR THE BENEFICIAL OWNERS. THE INFORMATION IN THIS SECTION CONCERNING DTC AND DTC'S BOOK -ENTRY SYSTEM HAS BEEN OBTAINED FROM SOURCES THAT THE CITY AND THE UNDERWRITER BELIEVE TO BE RELIABLE, BUT THE CITY AND THE UNDERWRITER TAKE NO RESPONSIBILITY FOR THE ACCURACY THEREOF, AND NEITHER THE PARTICIPANTS NOR THE BENEFICIAL OWNERS SHOULD RELY ON THE FOREGOING INFORMATION WITH RESPECT TO SUCHMATTERS BUT SHOULD INSTEAD CONFIRM THE SAME WITHDTC OR THE PARTICIPANTS, AS THE CASE MAYBE. E-3