HomeMy Public PortalAboutOrd. 779 - Water Revenue Refunding Bond, Series 2003ORDINANCE NO. 779
AN ORDINANCE OF THE CITY OF McCALL, IDAHO, AUTHORIZING AND
PROVIDING FOR THE ISSUANCE OF WATER REVENUE REFUNDING
BONDS, SERIES 2003, IN THE PRINCIPAL AMOUNT OF $5,630,000,
FOR THE PURPOSE OF CURRENTLY REFUNDING THE CITY'S
OUTSTANDING WATER REVENUE BONDS, SERIES 1994, AND ITS
PARITY LIEN WATER REVENUE BONDS, SERIES 1996; DESCRIBING
THE BONDS; SPECIFYING THE DATE, FORM, MATURITIES,
REGISTRATION, AND AUTHENTICATION OF THE BONDS; FIXING THE
RATES OF INTEREST ON THE BONDS; PROVIDING FOR THE
APPLICATION OF BOND PROCEEDS; ESTABLISHING FUNDS AND
ACCOUNTS; PROVIDING FOR THE COLLECTION AND DISPOSITION OF
REVENUES; PROVIDING COVENANTS RELATING TO -THE BONDS AND TO
THE TAX-EXEMPT STATUS OF THE INTEREST ON THE BONDS;
PROVIDING FOR THE SALE AND DELIVERY OF THE BONDS; PROVIDING
FOR RELATED MATTERS; AND PROVIDING AN EFFECTIVE DATE
WHEREAS, the City of McCall, Valley County, Idaho (the
"City"), is a municipal corporation duly organized and
operating under the laws of the State of Idaho; and
WHEREAS, the City now has outstanding a portion of its
Water Revenue Bonds, Series 1994 (the "Series 1994 Bonds"),
issued, pursuant to Ordinance No. 669, adopted on August
25, 1994, in the original principal amount of $5,000,000,
the principal amount of $3,855,000 of which remains
outstanding, and a portion of its Parity Lien Water Revenue
Bonds, Series 1996 (the "Series 1996 Bonds"), issued,
pursuant to Ordinance No. 700, adopted on July 11, 1996, in
the original principal amount of $4,990,000, the principal
amount of $4,050,000 of which remains outstanding; and
WHEREAS, the City is authorized by the Constitution
and laws of Idaho to issue refunding bonds to refund its
outstanding bonds whenever the Mayor and Council determine
that a savings or. other -,beneficial public objective can be
achieved thereby, without'an approving vote of the electors
of the City, and to sell such refunding bonds at private
sale; and
WHEREAS, Ordinance No. 669, pursuant to which the
Series 1994 Bonds were issued, sold, and delivered,
reserves the right of the City to redeem the Series 1994
Bonds maturing on and after September 1, 2007, on any
interest payment date on or after September 1, 2006, at a
redemption price of par plus accrued interest to the
redemption date, and also reserves the right of the City to
defease the Series 1994 Bonds prior to maturity in the
manner provided in Ordinance No. 669; and
WHEREAS, Ordinance No. 700, pursuant to which the
Series 1996 Bonds were issued, sold, and delivered,
0,
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reserves the right of the City to redeem
Bonds maturing on and after March 1, 2008,
payment date on or after March 1, 2007,
price of par plus accrued interest to the
and also reserves the right of the City
Series 1996 Bonds prior to maturity in the
in Ordinance No. 700; and
the Series 1996
on any interest
at a redemption
redemption date,
to defease the
manner provided
WHEREAS, the Mayor and Council have determined that it
is in the best interests of the City and its water
ratepayers to advance refund its Series 1994 Bonds and its
Series 1996 Bonds in order to achieve a beneficial public
objective, and the Mayor and Council desire to issue the
refunding bonds of the City for such purpose; and
WHEREAS, the City has received an offer from Seattle -
Northwest Securities Corporation to purchase the refunding
bonds of the City, and the Mayor and Council have
determined to sell the water revenue refunding bonds of the
City to Seattle -Northwest Securities Corporation in
accordance with such offer.
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND
COUNCIL OF THE CITY OF MCCALL, Valley County, Idaho, as
follows:
Section 1: DEFINITIONS
As used in this Ordinance, the following
have the following meanings:
Act means, collectively, Sections 50-1027
1042, inclusive, Section 57-504, and Title 57,
Idaho Code.
Additional Bonds means any bonds issued
Section 16 of this Ordinance.
words shall
through 50-
Chapter 9,
pursuant to
Annual Debt Service means the amount required in a
given fiscal year of the City for the payment of the
principal of, premium, if any, and interest on the Bonds
and any Additional Bonds, except interest to be paid from
the proceeds of the Additional Bonds.
Average Annual Debt Service means the average annual
amount required over the term of the Bonds from the time of
calculation for the payment of the principal of, premium,
if any, and interest on the Bonds and any Additional Bonds
(except interest to be paid from the proceeds of the
Additional Bonds).
Beneficial Owner(s) means the owners of Bonds whose
ownership is recorded under the Book -Entry -Only System
maintained by the Depository.
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Bonds means the principal amount of $5,630,000 "City
of McCall Water Revenue Refunding Bonds, Series 2003,"
herein authorized to be issued, sold, and delivered.
Bond Fund means the "City of McCall Water Revenue Bond
Fund" described in Section 13 of this Ordinance.
Bond Purchase Agreement means the agreement between
the City and the Underwriter for the purchase of the Bonds.
Bond Register means the registration books on which
are maintained the names and addresses of the owners or
nominees of the owners of the Bonds.
Bond Registrar means the Trustee, appointed and
designated in Section 6 of this Ordinance.
Book -Entry -Only System means the system of recordation
of ownership of the Bonds on the books of the Depository
pursuant to Section 3 of this Ordinance.
Business Day means a day, other than a Saturday or
Sunday, on which banks located in the State of Idaho and in
the state where the Trustee's Principal Corporate Trust
Office is located are open for the purpose of conducting
commercial banking business.
Cede means Cede & Co., the nominee of the Depository,
and any successor nominee of Depository with respect to the
Bonds.
Certificated Bond(s) means a Bond or Bonds evidenced
by a printed certificate in the event that the Book -Entry -
Only System is discontinued.
City means the City of McCall, Valley County, Idaho.
City Clerk means the Clerk of the City, or other
officer of the City who is the custodian of the seal of the
City and of the records of the proceedings of the City, or
his/her successor in functions, if any.
Code means the Internal Revenue Code of 1986, as
amended.
Cost of Issuance Fund means the fund created by
Section 11 (A) of this Ordinance for the payment of the
costs of issuance of the Bonds.
Council means the City Council of the City.
Depository means The Depository Trust Company,
New York, New York, or its successors and assigns.
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Escrow Fund means the Escrow Fund established by the
Escrow Agreement.
Escrow Agent means U.S. Bank National Association as
escrow agent under the Escrow Agreement.
Escrow Agreement means the Escrow Deposit Agreement
between the City and U.S. Bank National Association, as
authorized in Section 11(C) of this Ordinance.
Estimated Net Revenues means, for any year, the
estimated Revenues of the System for such year less the
estimated Operation and Maintenance Expenses for such year,
based upon estimates prepared by the City Engineer or an
independent engineer, or an independent certified public
accountant. In computing Estimated Net Revenues, Revenues
of the System may be adjusted as necessary to reflect any
changed schedule of rates and charges.
Event of Default means one of the events enumerated in
Section 23A of this Ordinance.
Insurer means Financial Security Assurance, Inc., or
any successor thereto or assignee thereof.
Interest Payment Date(s) means the payment date(s) set
forth in Section 3 of this Ordinance.
Investment Securities means investments in which a
city is authorized to invest its surplus funds under
Section 50-1013, Idaho Code.
Mandatory Redemption Amount(s) means the mandatory
deposits into the Bond Fund established for the term Bonds
pursuant to Section 8(B) of this Bond Ordinance.
Maximum Annual Debt Service means an amount equal to
the greatest Annual Debt Service with respect to the Bonds
and any Additional Bonds for the current or any future
fiscal year of the City.
Mayor means the Mayor of the City, or his/her
successor in functions, if any.
Net Revenues means Revenue of the System after the
deduction of Operation and Maintenance Expenses.
Operation and Maintenance Expenses or. any phrase of
similar import means all reasonable and necessary current
expenses of the City, paid or accrued, of operating,
maintaining, and repairing the System or of levying,
collecting, and otherwise administering the Net Revenues
for the payment of the Bonds; and the term includes (except
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as limited by contract or otherwise limited by law) without
limiting the generality of the foregoing:
(1) Engineering, auditing, reporting, legal, and
other overhead expenses of the City directly relating
and reasonably allocable to the administration of the
System;
(2) Fidelity bonds and property and liability
insurance premiums pertaining to the System, or a
reasonably allocable share of a premium of any blanket
bond or policy pertaining thereto;
(3) Payments to pension, retirement, health, and
hospitalization funds and other insurance;
(4) Any taxes, assessments, excise taxes, or
other charges which may be lawfully imposed on the
City, the System, revenues therefrom, or any privilege
in connection with their operation;
(5) The reasonable charges of the bond
registrar, fiscal or paying agent, commercial bank,
trust bank, or other depository bank pertaining to the
Bond issued by the City or pertaining to the Project,
if any;
(6) Contractual services, professional services,
salaries, other administrative expenses, and the cost
of materials, supplies, repairs, and labor, pertaining
to the issuance of the Bond and to the ordinary
operation of the System; and
(7) All other administrative, general, and
commercial expenses.
Ordinance or Bond Ordinance means this Ordinance No.
779, adopted on June 26, 2003.
Outstanding, when used with reference to the Bonds, as
of any particular date, means Bonds, the principal of and
interest on which have not been paid pursuant to this
Ordinance or which have not been replaced pursuant to
Section 7 of this Ordinance.
Owner means a Registered Owner or a Beneficial Owner
of any Bond.
Participants means those broker -dealers, banks, and
other financial institutions for which the Depository holds
Bonds as securities depository.
Payment Date means any scheduled interest payment date
or principal payment date on the Bonds.
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Policy means the municipal bond insurance policy
issued by the Insurer insuring the payment of the Bonds.
Principal Corporate Trust Office means, with respect
to the Trustee, the office of the Trustee at Salt Lake
City, Utah; provided, however, that with respect to
payments on the Bonds and any exchange, transfer, or
surrender of the Bonds, Principal Corporate Trust Office
shall mean the office of the Trustee at U.S. Bank National
Association, 180 East 5th Street, St. Paul, MN 55101 or
such other or additional offices as may be specified by the
Trustee.
Record Date means, in the case of an interest payment
date, the fifteenth day next preceding such interest
payment date.
Refunded Bonds means, collectively, the outstanding
Series 1994 Bonds maturing on and after September 1, 2003,
and the outstanding Series 1996 Bonds maturing on and after
March 1, 2004.
Registered Owner(s) means the person or persons in
whose name or names the Bonds shall be registered in the
Bond Register maintained by the Trustee.
Representation Letter means the representation letter
from the City to the Depository, as authorized in Section 3
of this Ordinance.
Reserve Fund means the City of McCall Water Revenue
Bonds Debt Service Reserve Fund created by Ordinance No.
669 of the City, adopted on August 25, 1994, and referred
to in Section 14 of this Ordinance.
Reserve Requirement means the lesser of (i) the
Maximum Annual Debt Service on the Bonds or (ii) 125% of
the Average Annual Debt Service on the Bonds, not to exceed
10% of the proceeds of the Bonds as provided in Section
148(d) of the Internal Revenue Code of 1986, as amended.
Revenue Fund, also known as the Water Fund, means the
"City of McCall Water Revenue Fund," created by Ordinance
No. 669, adopted on August 25, 1994, and referred to in
Sections 11 and 12 of this Ordinance.
Revenue of the System means allrevenues received by
the City from its System and may include, at the discretion
of the City, moneys derived from one, all, or any
combination of revenue sources pertaining to the System,
including, without limitation, rates, charges, rents, fees,
and any other income derived from the operation or
ownership of, the use of services of, or the availability
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of or services pertaining to, or otherwise derived in
connection with, the System or all or any part of any
property pertaining to the System.
Series 1994 Bonds means the City of McCall Water
Revenue Bonds, Series 1994, dated September 1, 1994, issued
pursuant to Ordinance No. 669, adopted on August 25, 1994.
Series 1996 Bonds means the City of McCall Parity Lien
Water Revenue Bonds, Series 1996, dated August 1, 1996,
issued pursuant to Ordinance No. 700, adopted on July 11,
1996.
System for purposes of this Ordinance, means the
domestic water system of the City, as the same now exists,
including its assets, real and personal, tangible and
intangible, and as it may later be added to, extended, and
improved, •and shall include buildings, structures,
utilities, or other income producing water facilities from
the operation of or in connection with which the revenues
for the payment of the Bonds to be issued hereunder will be
derived, and the lands pertaining thereto.
Treasurer means the Treasurer of the City, or his/her
successor in functions, if any.
Trustee means the Corporate Trust Department of U.S.
Bank National Association as trustee, bond registrar,
transfer agent, and authenticating and paying agent for the
Bonds, appointed and designated in Section 6 of this
Ordinance.
Underwriter means Seattle -Northwest Securities
Corporation, Boise, Idaho.
Section 2: FINDINGS
The Mayor and Council hereby find, determine, and
declare:
A. That the City's Refunded Bonds can be refunded to
the benefit of the City and its water ratepayers; that it
is desirable and necessary for the benefit of the City and
its water ratepayers to refund the Refunded Bonds of the
City for the purpose of achieving certain beneficial public
objectives; and that the net proceeds of the Bonds,
together with other lawfully available moneys of the City,
shall be used to advance refund the Refunded Bonds.
B. That it is the intent of the Mayor and Council to
issue the Bonds for the purpose of providing funds in an
amount sufficient, together with other lawfully available
funds of the City to advance refund and defease the
Refunded Bonds.
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Section 3: THE BONDS
A. Authorization. Fully registered water revenue
refunding bonds of the City, designated "City of McCall
Water Revenue Refunding Bonds, Series 2003" (the "Bonds"),
in the aggregate principal amount of $5,650,000, are hereby
authorized to be issued, sold, and delivered pursuant to
the Act.
B. Description of the Bonds. The Bonds shall be
issued in accordance with the Book -Entry -Only System
described in this Section 3, shall be dated July 15, 2003,
shall be issued in fully registered form in denominations
of $5,000 each or integral multiples thereof (provided that
no Bond shall represent more than one maturity), shall
mature in the years 2003 through 2018, and shall bear
interest from their date, or from the most recent date to
which interest has been paid or duly provided, at the rates
set forth below, payable commencing September 1, 2003, and
semiannually thereafter on each March 1 and September 1
until their respective dates of maturity or prior
redemption, and shall mature on September 1 in the
following years and principal amounts:
Maturity Date
September
September
September
September
September
September
September
September
September
September
September
September
September
September
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2015
2016
2017
2018
Principal Amount Interest Rate
$400,000
270,000
235,000
240,000
240,000
250,000
320,000
360,000
370,000
380,000
1,220,000
430,000
450,000
465,000
2.00%
2.00
2.00
2.00
2.00
2.25
2.50
2.75
3.00
3.00
3.40
3.50
3.60
3.70
Interest shall be computed on the basis of a twelve-
month, 360-day year.
Bonds maturing on September 1, 2015, are term Bonds
and are subject to mandatory redemption and retirement
prior to maturity from the deposit of Mandatory Redemption
Amounts in to the Bond Fund in the amounts and at the times
set forth in Section 8(B) of this Ordinance.
The Bonds shall be numbered separately in the manner
and with any additional designation as the Trustee shall
deem necessary for the purposes of identification. After
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execution, as hereinafter provided, the Bonds shall be
authenticated by the Trustee.
C. The Book -Entry -Only System. The Bonds shall be
issued in book -entry -only form, with no Bonds being made
available to Beneficial Owners thereof unless the Book -
Entry -Only System is discontinued. So long as the Bonds
are issued in book -entry -only form, the City and the
Trustee shall recognize the Depository or its nominee as
the Registered Owner of the Bonds for all purposes.
Beneficial ownership interests in the Bonds will be
available to Beneficial Owners in book -entry -only form, in
accordance with the book -entry -only practices of the
Depository.
The Bonds shall be issued in the form of one Bond
representing each maturity of the Bonds, in conformance
with the book -entry -only practices of the Depository. Each
Bond shall be substantially in the form set forth in
Exhibit "A" attached hereto and incorporated herein by
reference. Each Bond shall be executed by the manual
signatures of the Mayor and Treasurer and attested by the
manual signature of the Clerk, shall have the official seal
of the City impressed thereon, and. shall be manually
authenticated by the Trustee. Each Bond shall be
registered in the name of Cede & Co. as nominee of the
Depository and shall be lodged with the Depository until
maturity of the Bonds. The Bond Registrar shall remit each
payment of interest, or principal and interest, and
redemption premium, if applicable, directly to the
Depository for distribution to the Beneficial Owners by
recorded entry on the books of the Depository in accordance
with the book -entry -only practices of the Depository, and
the City and the Bond Registrar shall have no liability
therefor. Such payment shall be valid and effective fully
to satisfy and discharge the City's obligation to each
Beneficial Owner with respect to the payment thereof to the
extent of the sums so paid.
With respect to the Bonds registered in the name of
Cede & Co. as nominee for the Depository, neither the City
nor the Bond Registrar shall have any responsibility to any
Beneficial Owner with respect to:
(i) the sending of transaction statements,
or maintenance, supervision, or review of records
of the Depository;
(ii) the accuracy of the records of the
Depository or its nominee with respect to any
ownership interest in the Bonds;
(iii) the payment to any Beneficial Owner,
or any other person other than the Depository, of
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any amount with respect to principal of, interest
on, or redemption premium, if any, on the Bonds;
(iv) any consent given or other action
taken by the Depository or its nominee as owner
of the Bonds.
In the event that either the City or the Depository
shall determine to discontinue the Book -Entry -Only System
as to the Bonds, and the City elects not to designate a
substitute depository, then the City will cause its
Certificated Bonds to be issued to the Beneficial Owners in
accordance with Section 5 of this Ordinance.
The Representation Letter dated August 1, 1996, a copy
of which is annexed hereto as Exhibit "B," is hereby
authorized for use in connection with the Bonds.
Section 4: PLACE AND MANNER OF PAYMENT
Both principal of and interest on the Bonds shall be
payable in lawful money of the United States of America to
the Registered Owner thereof whose name and address appear
on the Bond Register maintained by the Bond Registrar.
Payment of each installment of interest on the Bonds
shall be made on its semiannual due date to the Registered
Owner whose name appears on the Bond Register on the 15th
day next preceding the interest payment date, at the
address appearing on the Bond Register, and shall be paid
by check or draft of the Bond Registrar mailed to such
Registered Owner on the due date at such address, or at
such other address as may be furnished in writing by such
Registered Owner to the Bond Registrar.
Principal of the Bonds shall be payable to the
Registered Owner upon presentation and surrender of the
Bonds on the date of maturity or prior redemption, at the
office of the Bond Registrar.
Section 5: EXECUTION OF CERTIFICATED BONDS
In the event that the Book -Entry -Only System is
discontinued with respect tothe Bonds, the City shall
cause Certificated Bonds to be prepared, executed,
authenticated, and delivered. The Certificated Bonds shall
be substantially in the form set forth in Exhibit "C" which
is annexed hereto and by reference made a part hereof. The
Certificated Bonds shall be numbered separately in the
manner and with such additional designation as the Bond
Registrar shall deem necessary for purposes of
identification. The Certificated Bonds shall be
lithographed or printed with engraved or lithographed
borders. The Certificated Bonds shall be signed by the
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Mayor, countersigned by the Treasurer, and attested by the
City Clerk (any of which signatures may be manual or by
facsimile), and the seal of the City shall be impressed
thereon or the facsimile seal of the City shall be
imprinted thereon. The Certificated Bonds shall then be
delivered to the Bond Registrar for authentication.
In case any of the officers who shall have signed or
countersigned any of the Certificated Bonds shall cease to
be such officer or officers of the City before the
Certificated Bonds so signed or countersigned shall have
been authenticated or delivered by the Bond Registrar, or
issued by the City, such Certificated Bonds may
nevertheless be authenticated, delivered, and issued and,
upon such authentication, delivery, and issue, shall be as
binding upon the City as though those who signed and
countersigned the same had continued to be such officers of
the City. Any Certificated Bond may also be signed and
countersigned on behalf of the City by such persons as at
the actual date of execution of such Certificated Bonds
shall be the proper officers of the City although at the
original date of such Certificated Bond any such person
shall not have been such officer of the City.
Only such of the Certificated Bonds as shall bear
thereon a certificate of authentication in the form set
forth in Exhibit "C," manually executed by the Bond
Registrar, shall be valid or obligatory for any purpose or
entitled to the benefits of this Ordinance, and such
certificate of authentication shall be conclusive evidence
that the Certificated Bonds so authenticated have been duly
executed, authenticated, and delivered hereunder and are
entitled to the benefits of this Ordinance.
Section 6: THE TRUSTEE
A. Trustee: Acceptance of Duties. The Corporate
Trust Department of U.S. Bank National Association is
hereby appointed as Trustee and shall also act as bond
registrar, authenticating agent, paying agent, and transfer
agent with respect to the Bonds, subject to the terms and
conditions set forth in this Ordinance. The Trustee shall
signify its acceptance of the duties and obligations
imposed upon it by this Ordinance by executing and
delivering to the City a written acceptance thereof, and
upon executing such acceptance the Trustee shall be deemed
to have accepted the duties and obligations with respect to
all of the Bonds thereafter to be issued, but only,
however, upon the terms and conditions set forth in this
Ordinance.
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B. Duties and Responsibilities of Trustee.
(1) Prior to the occurrence of an Event of
Default of which it has or is deemed to have notice
hereunder, and after the curing or waiver of any Event
of Default which may have occurred:
(a) the Trustee undertakes to perform such
duties and only such duties as are specifically
set forth in this Ordinance, and no implied
covenants or obligations shall be read into this
Ordinance against the Trustee; and
(b) in the absence of bad faith on its
part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness
of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee
that conform to the requirements of this
Ordinance: but the Trustee is under a duty to
examine such certificates and opinions to
determine whether they conform to the
requirements of this Ordinance.
(2) In case an Event of Default of which the
Trustee has or is deemed to have notice hereunder has
occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this
Ordinance, and use the same degree of care and skill
in their exercise, as a prudent person would exercise
or use in the conduct of such person's own affairs.
(3) No provision of this Ordinance shall be
construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to
act, or its own willful misconduct, except that:
(a) this subsection shall not be construed
to limit theeffect of subsection (A) of this
Section;
(b) the Trustee is not liable for any error
of judgment made in good faith, unless it is
proven that the Trustee was negligent in
ascertaining the pertinent facts;
(c) the Trustee is not liable with respect
to any action it takes or omits to be taken by it
in good faith in accordance with the direction of
the Owners under any provision of this Ordinance
relating to the time, method and place of
conducting any proceeding for any remedy
available to the Trustee, or exercising any trust
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or power conferred upon the Trustee under this
Ordinance; and
(d) no provision of this Ordinance shall
require the Trustee to expend or risk its own
funds or otherwise incur any liability in the
performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if
it has reasonable grounds for believing that the
repayment 'of such funds or adequate indemnity
against such risk or liability is not reasonably
assured to it.
(4) The Trustee shall maintain records of all
investments and disbursements of proceeds in the funds
and accounts established pursuant to this Ordinance
through the date ending six (6) years following the
date on which all the Bonds and Additional Bonds have
been retired.
(5) Whether or not expressly so provided, every
provision of this Ordinance relating to the conduct or
affecting the liability of or affording protection to
the Trustee is subject to the provisions of this
Section.
C. Certain Rights of Trustee. Except as otherwise
provided in Section B above:
(1) the Trustee may rely and is protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, approval,
bond, debenture or other paper or document believed by
it to be genuine and to have been signed or presented
by the proper party or parties;
(2) any request, direction, order or demand of
the City under this Ordinance shall be sufficiently
evidenced by a Written Certificate (unless other
evidence thereof is specifically prescribed).
(3) whenever in the administration of this
Ordinance the Trustee deems it desirable that a matter
be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless
other evidence thereof is specifically prescribed)
may, in the absence of bad faith on its part, rely
upon a Written Certificate of the City.
(4) the Trustee is under no obligation to
exercise any of the rights or powers vested in it by
this Ordinance at the request or direction of any of
the Registered Owners or Beneficial Owners unless such
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owners have offered to the Trustee security or
indemnity satisfactory to the Trustee as to its terms,
coverage, duration, amount and otherwise with respect
to the costs, expenses and liabilities which may be
incurred by it in compliance with such request or
direction, and the provision of such indemnity shall
be mandatory for any remedy taken upon direction of
the owners of a majority in aggregate principal amount
of the Bonds.
D. Trustee Not Responsible for Recitals. The
recitals contained in this Ordinance and in the Bonds
(other than the certificate of authentication on the Bonds)
are statements of the City, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no
representations as to the value, condition, or sufficiency
of any assets pledged or assigned as security for the
Bonds, the right, title or interest of the City therein,
the security provided thereby or by this Ordinance, the
compliance of the Ordinance with the Act, or the tax-exempt
status of the Bonds. The Trustee is not accountable for
the use or application by the City of any of the Bonds or
the proceeds of the Bonds, or for the use or application of
any moneys paid over by the Trustee in accordance with any
provision of this Ordinance.
E. Compensation and Expenses of the Trustee. The
City has covenanted and agree, pursuant to this Ordinance:
(1) to pay to the Trustee compensation for all
services rendered by it hereunder and under the other
agreements relating to the Bonds to which the Trustee
is a party in accordance with terms agreed to from
time to time, and, subsequent to default, in
accordance with the Trustee's then -current fee
schedule for default administration (the entirety of
which compensation shall not be limited by any
provision of law regarding compensation of a trustee
of an express trust);
(2) to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance
with any provision of this Ordinance, any other
agreement relating to the Bonds to which it is a party
or in complying with any request by the City or any
rating service with respect to the Bonds, including
the reasonable compensation, expenses and
disbursements of its agents and counsel, except any
such expense, disbursement or advance attributable to
the Trustee's negligence or bad faith; and
(3) to indemnify, defend and hold the Trustee
harmless from and against any loss, liability or
Page 14
expense incurred without negligence or bad faith on
its part, arising out of or in connection with the
acceptance or administration of the office of Trustee
under this Ordinance, including the costs of defending
itself against any claim or liability in connection
with the exercise or performance of any of its powers
or duties hereunder or thereunder.
In the event the Trustee incurs expenses or renders
services in any proceedings under bankruptcy law relating
to the City, the expenses so incurred and compensation for
services so rendered are intended to constitute expenses of
administration under bankruptcy law.
The obligations of the City to make the payments
described in this Section shall survive discharge of this
Ordinance, the resignation or removal of the Trustee and
payment in full of the Bonds.
F. Qualifications of Trustee. There shall at all
times be a trustee hereunder which shall be a corporation
or banking association organized and doing business under
the laws of the United States of America or of any state,
authorized under such laws to exercise corporate trust
powers, which has a combined capital and surplus of at
least $20,000,000, or is an affiliate of, or has a
contractual relationship with, a corporation or banking
association meeting such capital and surplus requirement
which guarantees the obligations and liabilities of the
proposed trustee, and which is subject to supervision or
examination by federal or state banking authority. If such
corporation or banking association publishes reports of
condition at least annually, pursuant to law or the
requirements of any supervising or examining authority
above referred to, then for purposes of this Section, the
combined capital and surplus of such corporation or banking
association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section,
it shall resign promptly in the manner and with the effect
specified in this Section.
G. Resignation or Removal of Trustee.
(1) No resignation or removal of the Trustee and
no appointment of a successor Trustee pursuant to this
Section shall become effective until the acceptance of
appointment by the successor Trustee under Section 6
(H) .
(2) The Trustee may resign at any time by giving
written notice to the City. Upon receiving such
notice of resignation, the City shall promptly appoint
Page 15
a Successor Trustee by an instrument in writing. If
an instrument of acceptance has not been delivered to
the resigning Trustee within 30 days after the giving
of such notice of resignation, the resigning Trustee
may petition a court of competent jurisdiction for the
appointment of a successor Trustee.
(3) Prior to the occurrence and continuance of
an Event of Default hereunder, or after the curing or
waiver of any such Event of Default, the Issuer, the
Owners of a majority in aggregate principal amount of
the Outstanding Bonds may remove the Trustee and shall
appoint a successor Trustee. In the event there shall
have occurred and be continuing an Event of Default
hereunder, the Owners of a majority in aggregate
principal amount of the Outstanding Bonds may remove
the Trustee and shall appoint a successor Trustee.
H. Successor Trustee.
1. Appointment of Successor Trustee.
(a) In case at any time the Trustee shall resign
or shall be removed or shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent,
or if a receiver, liquidator or conservator of the
Trustee, or of its property shall be appointed, or if
any public officer shall take charge or control of the
trust or of its property or affairs, a successor shall
be appointed by the City.
(b) If in a proper case no appointment of a
successor Trustee shall be made pursuant to the
foregoing provisions of this Section within 30 days
after the Trustee shall have given to the City written
notice or after a vacancy in the office of the Trustee
shall have occurred by reason of its inability to act,
the Trustee shall apply to any court of competent
jurisdiction to appoint a successor Trustee. • Said
court may thereupon, after such notice, if any, as
such court may deem proper, appoint a successor
Trustee.
(c) Any Trustee appointed under the provisions
of this subsection (A) in succession to the Trustee
shall be a bank or trust company or national banking
association or subsidiary thereof doing business or
qualified to do business in the State of Idaho, and
having capital stock and surplus aggregating at least
$20,000,000, if there be such bank or trust company or
national banking association willing and able to
accept the office on reasonable customary terms and
authorized by law to perform all the duties imposed
upon it by this Ordinance.
Page 16
A
2. Transfer of Rights and Property to Successor
Trustee. Any successor Trustee appointed under this
Ordinance shall execute, acknowledge and deliver to its
predecessor Trustee, and also to the City, an instrument
accepting such appointment, and thereupon such successor
Trustee, without any further act, shall become fully vested
with all rights, powers, duties, and obligations of such
predecessor Trustee, with like effect as if originally
named as Trustee; but the Trustee, ceasing to act shall,
nevertheless, on the written request of the City, or of the
successor Trustee, execute, acknowledge and deliver such
instrument of conveyance and further assurance and do such
other things as may reasonably be required for more fully
and certainly vesting and confirming in such successor
Trustee all the right, title and interest of the
predecessor Trustee in and to any property held by it under
this Ordinance, and shall pay over, assign, and deliver to
the successor Trustee any money or other property subject
to the trusts and conditions herein set forth. Should any
deed, conveyance, or instrument in writing from the City be
required by such successor Trustee for more fully and
certainly vesting in and confirming to such successor
Trustee any such estates, rights, power and duties, any and
all such deeds, conveyances and instruments in writing
shall, on request, and so far as may be authorized by law,
be executed, acknowledged and delivered by the City.
3. Merger or Consolidation. Any company into which
the Trustee may be merged or converted or with which it may
be consolidated or any company resulting from any merger,
conversion or consolidation to which it shall be a party or
any company to which the Trustee may sell or transfer all
or substantially all of its corporate trust business,
provided such company shall be a bank or trust company
organized under the laws of any state of the United States
or a national banking association and shall be authorized
by law to perform all the duties imposed upon it by this
Ordinance, shall be the successor to the Trustee without
the execution or filing of any paper or the performance of
any further act.
Section 7: TRANSFER AND EXCHANGE OF BONDS
A. Transfer of Bonds.
(1) Any Bond may, in accordance with its terms,
be transferred, upon the registration books kept by
the Trustee pursuant to Paragraph C of this Section 7,
by the Registered Owner, in person or by his duly
authorized attorney, upon surrender of such Bond for
cancellation, accompanied by delivery of a written
instrument of transfer in a form approved by the
Trustee, duly executed. No transfer shall be
Page 17
effective until entered on the registration books kept
by the Trustee. The City and the Trustee may treat
and consider the Registered Owner as the absolute
owner thereof for the purpose of receiving payment of,
or on account of, the principal, if any, or redemption
price thereof and interest due thereon and for all
other purposes whatsoever.
(2) Whenever any Bond or Bonds shall be
surrendered for transfer, the Trustee shall
authenticate and deliver a new fully registered Bond
or Bonds of the same series, designation, maturity, or
due date, as applicable, and interest rate and of
authorized denominations duly executed by the City,
for a like aggregate principal amount or interest
amount, as applicable. The Trustee shall require the
payment by the Registered Owner requesting such
transfer of any tax or other governmental charge
required to be paid with respect to such transfer.
With respect to each Bond, no such transfer shall be
required to be made after the Record Date with respect
to any interest payment date to and including such
interest payment date.
B. Exchange of Bonds. Bonds may be exchanged at the
Principal Corporate Trust Office of the Trustee for a like
aggregate principal amount of fully registered Bonds of the
same series, designation, maturity, or due date, as
applicable, and interest rate of other authorized
denominations or amounts, as applicable. The Trustee shall
require the payment by the Registered Owner requesting such
exchange of any tax or other governmental charge required
to be paid with respect to such exchange. With respect to
each Bond, no such exchange shall be required to be made
after the Record Date with respect to any interest payment
date of and including such interest payment date.
C. Bond Registration Books. This Ordinance shall
constitute a system of registration within the meaning and
for all purposes of the Registered Public Obligations Act
of Idaho, Chapter 9 of Title 57, Idaho Code. The Trustee
shall keep or cause to be kept, at its Principal Corporate
Trust Office, sufficient books for the registration and
transfer of the Bonds, which shall at all times be open to
inspection by the City, and, upon presentation for such
purpose, the Trustee shall, under such reasonable
regulations as it may prescribe, register or transfer or
cause to be registered or transferred, on said books, Bonds
as herein provided.
D. Duties of Bond Registrar. If requested by the
Trustee, the Mayor is authorized to execute the Trustee's
standard form of agreement between the City and the Trustee
Page 18
with respect to the compensation, obligations, and duties
of the Trustee hereunder which may include the following:
(1) to act as bond registrar, authenticating
agent, paying agent, and transfer agent as provided
herein;
(2) to maintain a list of Registered Owners and
to furnish such list to the City upon request, but
otherwise to keep such list confidential;
(3) to give notice of redemption of Bonds as
provided herein;
(4) to cancel and/or destroy Bonds which have
been paid at maturity or upon earlier redemption or
submitted for exchange or transfer;
(5) to furnish the City at least annually a
certificate with respect to Bonds canceled and/or
destroyed;
(6) to furnish the City at least annually an
audit confirmation of Bonds paid, Bonds outstanding
and payments made with respect to interest on the
Bonds; and
(7) to comply with all applicable provisions of
the Representation Letter, as called for in Section
3(C) hereof.
Section 8: REDEMPTION PRIOR TO MATURITY; DEFEASANCE
A. Optional Redemption. Bonds maturing on or before
September 1, 2013 shall not be subject to call or
redemption prior to their stated dates of maturity. On any
interest payment date on or after September 1, 2013, at the
option of the City, the Bonds maturing on or after
September 1, 2014, shall be subject to redemption, in whole
or in part, at the discretion of the City (and by lot
selected by the Bond Registrar within a maturity), at a
price of 100% of the principal amount of the Bond being
redeemed, plus accrued interest to the redemption date,
upon notice as hereinafter provided.
B. Mandatory Redemption. Bonds maturing on
September 1, 2015, are term Bonds and are subject to
mandatory redemption and retirement prior to maturity, in
part, by lot in such manner as the Bond Registrar shall
determine, at a redemption price equal to 100% of the
principal amount of the Bonds being redeemed, together with
accrued interest to the date of redemption, from the
deposit of Mandatory Redemption Amounts into the Bond Fund
in the amounts and on the dates set forth below. The
Page 19
amounts and due dates of the Mandatory Redemption Amounts
for the term Bonds maturing on September 1, 2015, are as
follows:
Mandatory
Redemption Date
September 1, 2013
September 1, 2014
September 1, 2015*
*Maturity
Mandatory
Redemption Amount
$395,000
405,000
420,000
C. Redemption Provisions Portions of any Bond of a
denomination of more than $5,000 may be redeemed. The
portion of any Bond of a denomination of more than $5,000
to be redeemed shall be in the principal amount of $5,000
or any integral multiple of $5,000, and in selecting
portions of such Bonds for redemption the Bond Registrar
will treat each such Bond as representing that number of
Bonds of $5,000 denomination which is obtained by dividing
the principal amount of such Bond by $5,000.
Notice of redemption of any Bonds shall be given by
mailing of notice by the Bond Registrar to the registered
owner of any Bond being called for redemption not less than
thirty nor more than sixty days prior to the redemption
date by first class mail, postage prepaid, at the address
appearing on the Bond Register, or at such other address as
may be furnished in writing by such registered owner to the
Bond Registrar. The foregoing requirements shall be deemed
to be complied with when notice is mailed as provided
herein, regardless of whether or not it is actually
received by the owner of such Bond. The notice shall
specify the Bonds to be redeemed, the date and place of
redemption, and shall provide that the Bonds so called for
redemption shall cease to accrue interest on the specified
redemption date, provided funds for such redemption are on
deposit at the place of payment at such time, and shall not
be deemed to be outstanding as of such redemption date.
D. Defeasance. In the event that money and/or
government obligations, maturing or having guaranteed
redemption prices at the option of the owner at such time
or times and bearing interest to be earned thereon in such
amounts as are sufficient (together with any resulting cash
balances) to redeem and retire part or all of the Bonds in
accordance with their terms, are hereafter irrevocably set
aside in a special account and pledged to effect such
redemption and retirement, then no further payments need be
made into the Bond Fund or Reserve Fund for the payment of
the principal of and interest on the Bonds so provided for,
and such Bonds and interest accrued thereon shall then
cease to be entitled to any lien, benefit, or security of
Page 20
this Ordinance, except the
set aside and pledged, and
thereon shall no longer
hereunder.
right to receive the funds so
such Bonds and interest accrued
be deemed to be outstanding
Section 9: CHARGES AND RATE COVENANT
The City has established, may from time to time
revise, and shall maintain and collect water rates and
charges for furnishing the services of the System to its
customers, which rates and charges are, and shall continue
to be, uniform as to all persons or properties which are of
the same class, which rates and charges shall be collected
from the users thereof.
The City hereby covenants and agrees with the
Registered Owners and Beneficial Owners that it will
establish, revise as necessary, maintain, and collect
charges sufficient, together with other revenues received,
after taking into consideration anticipated delinquencies,
to provide Net Revenues for each fiscal year equal to not
less than 1.20 times the required Annual Debt Service
payments on the Bonds and any Additional Bonds then
outstanding. The City further covenants that the Revenue
of the System will at all times be sufficient to pay
Operation and Maintenance Expenses, to make all payments
required to be made on account of the Bonds and any
Additional Bonds as and when the same shall become due and
payable, and all other payments which the City is obligated
to make pursuant to this Ordinance, and to pay all
governmental charges lawfully imposed on the System and all
other amounts which the City may now be or hereafter become
obligated to pay from the Revenue of the System.
Section 10: PLEDGE OF REVENUES
The Net Revenues of the System are hereby pledged for
the payment of the Bonds and shall be used and applied in
the order of priority provided in Section 12 of this
Ordinance.
Section 11: FUNDS AND ACCOUNTS - REDEMPTION OF
REFUNDED BONDS
A. Establishment of Funds and Accounts.
following funds and accounts are created or confirmed
respect to the Bonds.
(1) Revenue Fund, to be held by the City.
(2) Bond Fund, to be held by the Trustee.
(3) Reserve Fund, to be held by the Trustee.
The
with
Page 21
(4) Escrow Fund, to be held by the Trustee.
(5) Cost of Issuance Fund, to be held by the
Trustee.
B. Delivery of Bonds; Application of Proceeds. The
Treasurer of the City is hereby instructed to make delivery
of the Bonds to the Underwriter and to receive payment
therefore in accordance with the terms of the Bond Purchase
Agreement and to deposit the proceeds of sale (after
deduction of Underwriter's discount) as follows:
(1) A portion of the proceeds of sale of the
Bonds shall be deposited in the Cost of Issuance Fund
to be used as described in Section 11(E).
(2) Accrued interest on the Bonds from their
date to their date of delivery shall be deposited into
the Bond Fund and utilized to make a portion of the
first interest payment on the Bonds on September 1,
2003.
(3) The remaining proceeds of sale of the Bonds
shall be deposited into the Escrow Fund, together with
other funds of the City in an amount sufficient to
defease the Refunded Bonds, to be used as described in
Sections 11(C) and 11(D) of this Ordinance.
C. Approval of Escrow Agreement; Deposits into
Escrow Fund.
(1) The Escrow Agreement, in substantially the
form set forth in Exhibit "D" which is annexed hereto
and by reference incorporated herein, with such
changes, omissions, insertions, and revisions as the
Mayor shall approve, is hereby authorized, and the
Mayor and Clerk shall sign such Escrow Agreement,
which signature shall evidence such approval. The
Mayor and the Clerk are, and each of them is, hereby
authorized to do or perform all such acts as may be
necessary or advisable to comply with the Escrow
Agreement and to carry the same into effect.
(2) The portion of the proceeds of the sale of
the Bonds specified in Section 11(B)(3) hereof,
together with other funds of the City as shall be
specified in a Written Certificate to be filed with
the Trustee at the time of the delivery of the Bonds,
if any, shall, simultaneously with the delivery of the
Bonds be invested or reinvested (except for any amount
to be retained as cash) and the obligations in which
such moneys are so invested and any remaining cash
shall be deposited in trust with the Trustee in
Page 22
accordance with the provisions of the Escrow
Agreement.
D. Redemption of Refunded Bonds; Pledge, Etc. of
Escrow Fund.
(1) The Series 1994 Bonds maturing on and after
September 1, 2007, are hereby irrevocably called for
redemption on September 1, 2006. Notice of such
redemption shall be given as provided in Ordinance No.
669, adopted on August 25, 1994, pursuant to which the
Series 1994 Bonds were issued. The Series 1994 Bonds
are being redeemed at a redemption price of par plus
accrued interest to the date of redemption.
(2) The Series 1996 Bonds maturing on and after
March 1, 2008, are hereby irrevocably called for
redemption on March 1, 2007. Notice of such
redemption shall be given as provided in Ordinance No.
700, adopted on July 11, 1996, pursuant to which the
Series 1996 Bonds were issued. The Series 1996 Bonds
are being redeemed at a redemption price of par plus
accrued interest to the date of redemption.
(3) Moneys in the Escrow Fund shall be utilized
exclusively for the purpose of (i) paying the interest
on the Refunded Bonds as the same falls due; (ii)
paying the maturing principal of the Series 1994
Bonds, as the same falls due, through September 1,
2005, and, on September 1, 2006, paying and redeeming
the outstanding Series 1994 Bonds in full, principal
and interest; and (iii) paying the maturing principal
of the Series 1996 Bonds, as the same falls due,
through March 1, 2006, and, on March 1, 2007, paying
and redeeming the outstanding Series 1996 Bonds in
full, principal and interest.
(4) Moneys in the Escrow Fund shall be invested,
until needed for the purposes of the Escrow Fund, in
cash and Government Obligations, as permitted in the
Escrow Agreement. It is hereby found and determined
by the City, pursuant to Section 57-504, Idaho Code,
that moneys in the Escrow Fund, together with other
funds of the City pledged to the payment of the
Refunded Bonds, will be sufficient to pay, when due,
pursuant to stated maturity or call for redemption,
the principal of and interest due and to become due on
the Refunded Bonds, and provision has been made in the
Escrow Agreement for the refunding of the Refunded
Bonds.
(5) Any moneys remaining in the Escrow Fund and
not needed for refunding of the Refunded Bonds shall
be applied to pay any costs of issuance of the Bonds
Page 23
that remain unpaid, if any, and any moneys remaining
thereafter may be used by the City for any lawful
purpose.
(6) It is hereby found and determined that, upon
compliance by the City and the Trustee with the
foregoing provisions of this Section 11(D), adequate
provision shall have been made for the payment of the
Refunded Bonds.
E. Cost of Issuance Fund. There is hereby
established in the hands of the Trustee a separate account
designated as the "Cost of Issuance Fund." At the time of
the delivery of the Bonds, the Trustee shall deposit into
the Cost of Issuance Fund such amount as shall be required
to pay the reasonable and necessary costs of issuance of
the Bonds. Moneys in the Cost of Issuance Fund shall be
used for the payment of costs of issuance of the Bonds.
Any moneys remaining in the Cost of Issuance Fund on the
date of the full and final payment of all costs of issuance
of the Bonds shall be transferred into the Bond Fund.
Section 12: THE REVENUE FUND
There has heretofore been created a special fund known
as the "City of McCall Water Revenue Fund," also known as
the "City of McCall Water Fund" (the "Revenue Fund"), which
shall be maintained by the Treasurer and into which the
Revenue of the System shall be deposited forthwith upon its
receipt.
A. Use of Revenues. The Revenue of the System shall
be used for payment of the following obligations in the
following order of priority:
(1) First Charge and Lien: the costs of
Operation and Maintenance Expenses;
(2) Second Charge and Lien: the principal of
and interest on the Bonds by payment into the Bond
Fund; and
(3) Third Charge and Lien: To maintain the Debt
Service Reserve Fund, and to provide for any
deficiency in the Debt Service Reserve Fund.
(4) To administer surplus funds.
B. Surplus Funds: Funds remaining in the Revenue
Fund, after having been applied to the purposes provided in
this Section, shall constitute surplus funds and may be
used for the purposes set forth in Section 16 of this
Ordinance.
Page 24
Section 13: THE BOND FUND
A. There is hereby created a special fund, to be
held by the Trustee, known as the "City of McCall Water
Revenue Refunding Bond Fund" (the "Bond Fund"), into which
shall be deposited by the City, from Net Revenues, monthly,
by the third Tuesday of each month, an amount equal to one -
twelfth (1/12) of the next principal payment coming due on
the Bonds and an amount equal to one -sixth (1/6) of the
next interest payment accruing on the Bonds; provided, that
the first interest payment falling due on September 1,
2003, shall be deposited in approximately equal payments on
or before July 15 and August 15, 2003.
B. If the City for any reason shall fail to make
such required deposits from the Revenue Fund by the third
day prior to a payment date on the Bonds, then an amount
equal to the deficiency shall be deposited into the Bond
Fund out of the Reserve Fund.
C. From the amounts so paid into the Bond Fund, the
Trustee shall pay (i) on or before each interest payment
date for any of the Bonds, the amount required for the
interest payable on such date; and (ii) on or before any
redemption date for the Bonds, the amount required for the
payment of principal of and interest on the Bonds then to
be redeemed.
D. Amounts in the Bond Fund shall be invested at the
written direction of the City by the Trustee in Investment
Securities until needed for the purposes of the Bond Fund.
Earnings on deposits in the Bond Fund shall remain in the
Bond Fund to be used for the purposes of the Bond Fund.
Revenue deposits described in Section 13A may be reduced by
earnings on deposits in the Bond Fund.
Section 14: DEBT SERVICE RESERVE FUND
A. Deposits. There is hereby created a separate
fund, known as the "City of McCall Water Revenue Refunding
Bonds Debt Service Reserve Fund" (the "Reserve Fund"),
which shall be maintained by the Trustee. It is the
intention of the City to fund the Reserve Fund with a
policy of municipal bond insurance pursuant to Section
14(D) of this Ordinance. If a policy of municipal bond
insurance is not obtained, then, simultaneously with the
issuance of the Bonds, there shall be transferred from the
debt service reserve fund established for the Refunded
Bonds and, to the extent necessary to achieve the Reserve
Requirement, from other lawfully available moneys of the
City, to the Reserve Fund an amount equal to the Reserve
Requirement, which sum shall be maintained as a debt
service reserve fund for the Bonds until the Bonds have
been paid in full. Moneys in the Reserve Fund may be
Page 25
applied by the City to the payment of the final maturity of
principal of and interest on the Bonds. So long as the
amount on deposit in the Reserve Fund equals the Reserve
Requirement, earnings on amounts in the Reserve Fund shall
be deposited as received into the Bond Fund. In no event
shall the amount accumulated in the Reserve Fund exceed the
Reserve Requirement.
B. Deficiencies or Withdrawals. Whenever any moneys
are withdrawn from the Reserve Fund to pay the principal of
or interest on the Bonds, or if a deficiency exists in such
Fund, the amount so withdrawn or the amount of such
deficiency shall be restored within one year of the date of
such withdrawal by monthly deposits from Net Revenues until
there has been restored therein the gross amount provided
heretofore in subdivision A of this Section.
C. Refunding. In the event Refunding Bonds are ever
issued, the amount set aside into the Reserve Fund to
secure the payment of the Bonds may be used to retire bonds
or may be held in the Reserve Fund to secure payment of the
refunding bonds issued, to refund the outstanding refunding
bonds, or may be held in the Reserve Fund to secure the
payment of any other issue or series of bonds payable out
of the Revenue Fund and issued on a parity with the Bonds.
D. Reserve Equivalent. The City may, at any time,
elect to fund the Reserve Fund with an insurance policy
issued by a municipal bond insurance company having a long-
term debt credit rating, at the time the insurance policy
is issued, in one of the two highest rating categories of
Moody's Investors Services, Inc., or Standard & Poor's
Corporation, in which the insurance • company agrees
unconditionally to provide -the City with funds in the
amount of the Reserve Requirement.
Section 15: INVESTMENT OR DEPOSIT OF FUNDS
Moneys on deposit in the funds established pursuant to
Section 11 shall be invested and reinvested by the Trustee
as follows:
(a) A11 moneys on deposit in funds shall be
invested in Investment Securities which shall mature,
or be subject to repurchase, withdrawal without
penalty or redemption at the option of the holder on
or before the dates on which the amounts invested are
reasonably expected to be needed for the purposes
hereof.
(b) All purchases or sales of Investment
Securities shall be made at the direction of the City
(given in writing or orally, confirmed in writing),
or, in the absence of such direction, by the Trustee.
Page 26
(c) (1) Any securities or investments held by
the Trustee may be transferred by the Trustee, if
required in writing by the City, from any of the funds
or accounts mentioned in Section 11 and held by the
Trustee to any other City fund or account mentioned in
Section 11 at the then current market value thereof
without having to be sold and purchased or
repurchased; provided, however, that after any such
transfer or transfers, the investments in each such
fund or account shall be in accordance with the
provisions as stated in this Ordinance; and (2)
whenever any other transferor payment is required
to be made from any particular fund, such transfer or
payment shall be made from such combination of
maturing principal, redemption premiums, liquidation
proceeds and withdrawals of principal as the Trustee
deems appropriate for such purpose.
(d) Neither the City nor the Trustee shall be
accountable for any depreciation in the value of
Investment Securities or for any losses incurred upon
any authorized disposition thereof.
(e) The City acknowledges that to the extent
regulations of the Comptroller of the Currency or any
other regulatory entity grant the City the right to
receive brokerage confirmations of the security
transactions as they occur, the City specifically
waives receipt of such confirmations to the extent
permitted by law. The Trustee will furnish the City
periodic cash transaction statements which include the
detail for all investment transactions made by the
Trustee hereunder.
Section 16: SURPLUS FUNDS
Funds remaining in the Revenue Fund after having been
applied to or designated funds for the purposes provided in
Section 12A of this Ordinance shall constitute surplus
funds and may be used for any of the following purposes:
A. To pay the costs of unusual or extraordinary
maintenance of or repair to the System;
B. To pay the principal of and interest on any
subordinate lien obligations which may have been issued to
provide water facilities in or for the City;
C. To improve, extend, enlarge, or replace any water
facilities;
D. To acquire or construct additional water
facilities in or for the City;
Page 27
E. To prepay the principal, interest, and any costs
of the Bonds; and
F. For any other lawful purpose.
Section 17: ADDITIONAL BONDS OR OTHER OBLIGATIONS
A. Limitation Upon Issuance of Parity Obligations.
Nothing contained in this Ordinance shall be construed in
such a manner as to prevent the issuance by the City of
Additional Bonds or other additional obligations payable
from the Net Revenues on a parity with, but neither prior
nor superior to, the lien of the Bonds herein authorized;
provided, however, that before any such Additional Bonds or
other additional parity obligations are authorized or
actually issued:
(1) The City is not, and has not been, in
default as to any payments required by the provisions
of this Ordinance for a period of not less than twelve
(12) months immediately preceding the issuance of such
Additional Bonds or other additional parity obliga-
tions, and there is no deficiency in the Bond Fund or
Reserve Fund.
(2) The principal of and interest on the
Additional Bonds shall be payable from the Bond Fund
and further secured by the Reserve Fund, and the
Reserve Requirement shall be increased in proportion
to the Additional Bonds being issued.
(3) Prior to the delivery of any Additional
Bonds, the City shall have on file at the office of
the City Clerk a certificate of a licensed
professional engineer, who may be the City Engineer,
or a certificate of an independent certified public
accountant, dated prior to the authorization of such
Additional Bonds, showing that the Estimated Net
Revenues, determined and adjusted as hereafter
provided, for each fiscal year after the issuance of
such Additional Bonds, will equal at least 1.20 times
the amount required for the payment of the average
annual principal of and interest on the Certificates,
the Bonds, and any Additional Bonds then outstanding,
plus the Additional Bonds proposed to be issued.
(4) In determining Estimated Net Revenues, the
Net Revenues for the past twelve (12) consecutive
months immediately preceding the year of the proposed
Additional Bonds shall be adjusted by such engineer or
accountant to take into consideration changes in Net
Revenues estimated to occur under one or more of the
following conditions for each year after delivery of
Page 28
the Additional Bonds for so long as the Bond and any
Additional Bonds, including the Additional Bonds to be
issued, shall be outstanding:
a. any increase or decrease in Net Revenues
which would result if any change in rates or
charges adopted prior to the date of such
certificateand subsequent to the beginning
of such twelve (12) month period had been in
force during the full twelve (12) month
period;
b. any increase or decrease in Net Revenues
estimated by such engineer or accountant to
result from any additions, betterments, and
improvements to and extension of any
facilities of the System which (i) become
fully operational during such twelve (12)
month period, (ii) were under construction
at the time of such certificate, or (iii)
will be constructed from the proceeds of the
Additional Bonds to be issued; and/or
c. the additional Net Revenue which would have
been received if any customers added to the
System prior to the date of such certificate
and subsequent to the beginning of such
twelve (12) month period were customers for
the entire period.
(5) The foregoing limitations, or any of them,
may be waived or modified by the written consent of
the Registered Owners of the Bonds.
Such engineer or accountant shall base his or her
certificate upon, and his certificate shall have attached
thereto, audited financial statements of the water System
(unless such an audit is not available within such twelve-
month period) showing income and expenses for the period
upon which the same is based.
B. Subordinate Lien Bonds. No provision of this
Ordinance or of any instrument pertaining thereto shall be
deemed to limit or restrict the power of the City to issue
bonds, notes or warrants, or to make pledges of the
revenues which shall be subordinate as to the lien of the
Bonds and which shall provide for compliance with the
current provisions hereof prior to the application of any
funds to said subordinate purpose.
C. Refunding. The restrictions with respect to the
issuance of parity obligations shall not apply if such
additional parity bonds proposed to be issued are for the
Page 29
sole purpose of refunding outstanding water revenue bonds
or obligations.
D. Complete Pro-ject. The foregoing restrictions
with respect to the issuance of parity obligations shall
not apply to obligations issued to fund the completion of
the water system improvement project under construction at
the time of the issuance of the Bonds.
Section 18: GENERAL COVENANTS
For the protection and security of the Bonds, it is
covenanted and agreed to and with the Registered Owners of
the Bonds from time to time, that the City will perform the
following covenants:
A. Maintain Corporate Status. The City will
maintain its identity as a municipal corporation and will
make no attempt to cause its corporate status to be
abolished.
B. Budget Laws. The City will comply with
applicable state budget laws in preparing its annual budget
and in keeping accounts and records.
C. Operate System. It will operate the System in an
efficient and economical manner and prescribe, revise, and
collect such charges in connection therewith so that the
services, facilities, and properties of the System may be
furnished at the lowest possible cost consistent with sound
economy and prudent management.
D. Good Repair. It will operate, maintain,
preserve, and keep the System and every part hereof in good
repair, working order, and condition.
E. Preserve Security. It will preserve and protect
the security of the Bonds and the rights of the Registered
Owners thereof.
F. Collect Revenues. It will collect and hold in
trust the revenues and other funds pledged to the payment
of the Bonds and apply such revenue or other funds only as
provided in this Ordinance.
G. Service Bonds. It will pay and cause to be paid
punctually the principal of the Bonds and the interest
thereon on the date or dates and at the place or places and
in the manner mentioned in the Bonds, and in accordance
with this Ordinance.
H. Pay Claims. It will pay and discharge any and
all lawful claims for labor, materials, and supplies which,
if unpaid, might by law become a lien or charge upon the
Page 30
Revenue of the System, or any part of said Revenue of the
System, or any funds in the hands of the Treasurer, prior
or superior to the lien of the Bonds or which might impair
the security of the Bonds, to the end that the priority and
security of the Bonds shall be fully preserved and
protected.
I. Encumbrances. It will not mortgage or otherwise
encumber, sell, lease, or dispose of the System or any part
thereof, nor enter into any lease or agreement which would
impair or impede the operation of the System or any part
thereof necessary to secure adequate revenues for the
payment of the principal of and interest on the Bonds, nor
which would otherwise impair or impede the rights of the
Registered Owner of the Bonds with respect to such revenues
of the operation of the System without provisions for the
retirement of the Bonds then outstanding from the proceeds
thereof.
J. Insurance. It will procure and keep in force
insurance upon all buildings and structures of the System
and the machinery and equipment therein, which are usually
insured by entities operating like property, in good and
responsible insurance companies. The Trustee shall be
named as an additional loss payee on any policy, and the
City shall cause proof of such insurance to be filed with
the Trustee. The amount of the insurance shall be not less
than the full replacement cost thereof and shall be such as
may be required to adequately protect it and the Owners of
the Bonds from loss due to any casualty, and in the event
of any such loss, the proceeds shall be used to repair or
restore the System or for the payment of the Bonds issued
under this Ordinance.
K. Fidelity Bonds. It will procure suitable
fidelity bonds covering all of its officers and other
employees charged with the collection and disbursement of
revenues from the System.
L. Engineers. It will employ consulting engineers
of acknowledged reputation, skill, and experience in the
improvement and operation of the System for any unusual or
extraordinary items of maintenance, repair, or betterments
as shall be required from time to time, all reports,
estimates, and recommendations of such consulting engineers
to be filed with the Clerk and furnished to the Registered
Owner of the Bond issued hereunder, upon request.
M. Accounts. It will establish and maintain proper
methods of accounting and bookkeeping, keep proper and
separate accounts and records in which complete and
separate entries shall be made of all transactions relating
to the System, and furnish complete operating and income
statements to the Registered Owner upon request.
Page 31
N. Delinquencies. it will not furnish water service
to any customer whatsoever free of charge, and it shall not
later than sixty (60) days after the end of each calendar
year, take such legal action as may be reasonable to
enforce collection of all collectible delinquent accounts.
Section 19: SPECIAL COVENANTS
The City further covenants and agrees:
A. In accordance with Section 149(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), the Bonds
shall be issued and remain in fully registered form in
order that interest thereon be excluded from gross income
of the Registered Owners for federal income tax purposes.
The City covenants and agrees that it will take no action
to permit the Bonds to be issued in or converted to bearer
or coupon form.
B. The Bonds are hereby designated as "qualified
tax-exempt obligations" within the meaning and for the
purposes of Section 265(b)(3) of the Code, and the City
does not reasonably anticipate that it will designate more
than $10,000,000, including the Bonds, as qualified tax-
exempt obligations during the calendar year 2003.
C. None of the proceeds of the Bonds will be used
directly or indirectly (i) to make or finance loans to
persons or (ii) in any trade or business carried on by any
person (other than use as a member of the general public) .
For purposes of the preceding sentence, the -term "person"
does not include a government unit other than the United
States or any agency or instrumentality thereof, and the
term "trade or business" means any activity carried on by a
person other than a natural person. The City further
covenants and agrees to take no action which would cause
the Bonds to be "private activity bonds," nor will it omit
to take any action necessary to prevent the Bonds from
becoming "private activity bonds," within the meaning of
Section 141 of the Code.
D. The Mayor, Clerk, and Treasurer, and other
appropriate officials of the City, or any one or more of
such officials, as may be appropriate, are each hereby
authorized and directed to execute, on behalf of the City,
such certificate or certificates as shall be necessary to
establish that the Bonds are not "arbitrage bonds" within
the meaning of Section 148 of the Code and the Treasury
Regulations promulgated thereunder, and to establish that
interest on the Bonds is not and will not become includable
in the gross income of the owners of the Bonds under the
Code and applicable regulations. The City covenants and
agrees that no use will be made of the proceeds of the
Page 32
Bonds, or any funds of the City which may, pursuant to
Section 148 of the Code and applicable regulations, be
deemed to be proceeds of the Bonds, which would cause the
Bonds to be "arbitrage bonds" within the meaning of Section
148 of the Code. The City further covenants to comply
throughout the term of the Bonds with the requirements of
Section 148 of the Code and the regulations promulgated
thereunder in order to prevent the Bonds from becoming
"arbitrage bonds."
E. The City will comply with the information
reporting requirements of Section 149(e) of the Code.
F. None of the proceeds of the Bond will be used to
reimburse the City for capital expenditures made prior to
the date of delivery of the Bond unless the City, not later
than 60 days after the payment of such expenditure, shall
have adopted an official intent resolution as provided by
Section 1.150-2 of the Treasury Regulations.
G. The City will comply with the requirements of SEC
Rule 15c2-12(b)5 with respect to the continuous disclosure
of financial information and operating data and of certain
material events with respect to the Bonds, as set forth in
the Information Reporting Agreement which is annexed hereto
as Exhibit "E." The Trustee, or its successor entity, is
hereby designated as agent of the City for purposes of Rule
15c2-12 (b) 5 .
Section 20: SALE OF BONDS
The sale of the Bonds to, and the execution of a Bond
Purchase Agreement for the purchase of the Bonds by,
Seattle -Northwest Securities Corporation, as Underwriter,
are hereby approved, and the Mayor and City Clerk are
authorized to execute the Bond Purchase Agreement,
substantially in the form annexed hereto as Exhibit "H," on
behalf of the City.
Section 21: AMENDMENTS
A. Without the consent of the Registered Owners, the
City from time to time and at any time may adopt an
ordinance or ordinances supplemental hereto, which
ordinance or ordinances thereafter shall become a part of
this Ordinance, for any one or more of all of the following
purposes:
(1) To add to the covenants and agreements of
the City in this Ordinance, other covenants and
agreements thereafter to be observed, which shall not
adversely affect the interest of the Beneficial Owners
of the .Bonds, or to surrender any right or power
herein reserved.
Page 33
(2) To make such provisions for the purpose of
curing any ambiguities or of curing, correcting, or
supplementing any defective provisions contained in
this Ordinance, or any ordinance authorizing future
bonds in regard to matters or questions arising under
such ordinances as the Council may deem necessary or
desirable and not inconsistent with such ordinances
and which shall not adversely affect, in any material
respect, the interest of the Beneficial Owners of the
Bonds.
Any such supplemental ordinance may be adopted
without the consent of the Registered Owners of the
Bonds at any time outstanding, notwithstanding any of
the provisions of subsection B of this Section.
B. With the consent of the Registered Owners of not
less than 75% in aggregate principal amount of the Bonds at
the time outstanding, the Council may adopt an ordinance or
ordinances supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating
any of the provisions of this Ordinance or of any
supplemental ordinance; provided, however, that no such
supplemental ordinance shall:
(1) Extend the fixed maturities of the Bonds, or
reduce the rate of interest thereon, or extend the
time of payments of interest from their due date, or
reduce the amount of the principal thereof, or reduce
any premium payable on the redemption thereof, if
applicable, without the consent of the Registered
Owners of the Bonds so affected; or
(2) Reduce the aforesaid percentage of the
Registered Owners required to approve any such
supplemental ordinance, without the consent of the
Registered Owners of the Bonds then outstanding.
It shall not be necessary for the consent of the Registered
Owners under this subsection B to approve the particular
form of any proposed supplemental ordinance, but it shall
be sufficient if such consent shall approve the substance
thereof.
C. Upon the adoption of any supplemental ordinance
pursuant to the provisions of this Section, this Ordinance
shall be deemed to be modified and amended in accordance
therewith, and the respective rights, duties, and
obligations of the City under this Ordinance and the
Registered Owners of the Bonds outstanding hereunder shall
thereafter be determined, exercised, and enforced
thereunder, subject in all respects to such modification
and amendments, and all terms and conditions of any such
Page 34
supplemental ordinance shall be deemed to be part of the
terms and conditions of this Ordinance for any and all
purposes. The City shall notify the Trustee of the
adoption of any supplemental ordinance. The Trustee shall
notify the Registered Owners of the adoption of any
supplemental ordinance.
D. Any Bonds executed and delivered after the
execution of any supplemental ordinance adopted pursuant to
the provisions of this Section may have a notation as to
any matter provided for in such supplemental ordinance, and
if such supplemental ordinance shall so provide, new bonds
so modified as to conform, in the opinion of the Council,
to any modification of this Ordinance contained in any such
supplemental ordinance, may be prepared and delivered
without cost to the Registered Owners of any affected Bonds
then outstanding, upon surrender for cancellation of such
Bonds.
Section 22: VALIDITY OF ISSUANCE
The Bonds are issued pursuant to the Idaho Revenue
Bond Act, being Idaho Code Sections 50-1027 through
50-1042. This recital is conclusive evidence of the
validity of the Bonds and the regularity of their issuance.
Section 23: EVENTS OF DEFAULT AND REMEDIES
A. Events of Default.
If one or more of the following events occur, it is
hereby declared to constitute and Event of Default under
this Ordinance.
1. Failure to make any payment of interest or
principal on the Bonds as the same shall become due; or
2. Filing by the City, or any successor or assignee
of the City, while in possession of the System, of a
petition in bankruptcy or insolvency, or for reorganization
under any bankruptcy act, or the making of an assignment
for the benefit of creditors; or
3. Any other default by the City under this
Ordinance, and failure to remedy the same for a period of
sixty days after written notice thereof, as set forth in
paragraph B below, specifying such failure and requiring
the same to be remedied, shall have been given to the City
by the Trustee, or to the City and the Trustee by the
Owners of not less than twenty-five percent in aggregate
principal amount of the Bonds at the time outstanding.
Page 35
B. Remedies upon Event of Default.
1. Remedies. Upon the occurrence of an Event of
Default, the Trustee may, in its discretion (or, as
provided hereinafter, at the direction of the Owners of not
less than twenty-five percent in aggregate principal amount
of the Bonds at the time outstanding, shall), take one or
more of the following actions:
a. Bring action at law or in equity for payment
of any Net Revenue duly appropriated by the City for
the then -current Fiscal year and not yet paid to the
Trustee.
b. Take any other action for which provision is
made in this Section 23, including, without
limitation, application of the funds under the control
of the Trustee.
2. Declaration of Event of Default. Prior to taking
any such action, the Trustee shall cause written notice,
declaring an Event of Default to have occurred and
specifying the Event of Default complained of, to be given
the City. If, within sixty (60) days of the mailing or
delivery of such written notice, such Event of Default
specified in the written notice shall have been cured, and
the reasonable and proper charges of the Trustee shall be
paid to the Trustee, then in such case the Owners of not
less than fifty percent in aggregate principal amount of
the Bonds at the time outstanding, by written notice to the
City and the Trustee, may rescind such declaration and
annul such Event of Default in its entirety, or, if the
Trustee shall have acted without a direction of the Owners
of not less than twenty-five percent in aggregate principal
amount of the Bonds outstanding at the time of the written
direction, and if there shall not have been theretofore
delivered to the Trustee written direction to the contrary
by the Owners of not less than fifty percent in aggregate
principal amount of the Bonds then outstanding, then any
such declaration shall ipso facto be deemed to be annulled.
No such rescission and annulment shall affect any
subsequent Event of Default.
The Trustee shall, within 30 days after receipt of
notice of the occurrence thereof, give written notice by
first class mail to Registered Owners of all Events of
Default known to the Trustee and send a copy of such notice
to the City, unless such Events of Default have been
remedied. The Trustee shall not be deemed to have notice
of any Events of Default unless it has actual knowledge
thereof or has been notified in writing of such Events of
Default by the Owners of at least 25% in principal amount
of the Bonds then outstanding.
Page 36
C. Accounting and Examination of Records after Event
of Default.
The City covenants that if an Event of Default shall
have occurred and shall not have been remedied, the books
of record and accounts of the City shall at all times be
subject to the inspection and use of the Trustee and of its
agents and attorneys.
D. Application of Revenues and other Moneys after
Event of Default.
1. During the continuance of an Event of Default,
the Trustee shall apply the Net Revenues and such moneys,
securities and funds and the income therefrom as follows
and in the following order:
(a) to the payment of the reasonable and proper
charges and expenses of the Trustee and the reasonable
fees and disbursements of its counsel;
(b) to the payment of the Bonds, first to
interest and then to principal.
2. If and whenever all overdue sums payable by the
City under this Ordinance, shall be paid by or for the
account of the City, and all defaults under this Ordinance
or the Bonds shall be made good or secured to the satisfac-
tion of the Trustee, the City and the Trustee shall
thereupon be restored, respectively, to their former
positions and rights under this Ordinance.
E. Rights and Remedies of Bond Owners.
1. No Owner of any Bond shall have any right to
institute any proceeding, judicial or otherwise, with
respect to this Ordinance, or for any other remedy
hereunder, unless
(a) such Owner has previously given written
notice to the Trustee of a continuing Event of
Default;
(b) the Owners of not less than twenty-five
percent (25%) in principal amount of the Bonds shall
have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(c) such Owners have provided to the Trustee
reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such
request;
Page 37
(d) the Trustee for sixty (60) days after its
receipt of such notice, request and offer of indemnity
has failed to institute any such proceedings; and
(e) no direction inconsistent with such written
request has been given to the Trustee during such
sixty-day period by the Owners of a majority in
principal amount of the Bonds; it being understood and
intended that no one or more Owners of Bonds shall
have any right in any manner whatever by virtue of, or
by availing of, any provision of this Ordinance to
affect, disturb or prejudice the rights of any other
Owner of Bonds, or to obtain or to seek to obtain
priority or preference over any other Owner or to
enforce any right under this Ordinance, except in the
manner herein and therein provided and for the equal
and ratable benefit of all the Owners of Bonds.
2. The Owners of a majority in principal amount of
the Outstanding Bonds shall have the right to direct the
time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or
power conferred on the Trustee, provided that
(a) such direction shall not be in conflict with
any rule of law or this Ordinance,
(b) the Trustee shall not determine that the
action so directed would be unjustly prejudicial to
the Owners not taking part in such direction, and
(c) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with
such direction.
F. Waiver of Trustee.
The Trustee may, in its discretion, waive any Event of
Default, provided there has been no default in any
scheduled payment of interest on or principal of the Bonds.
The Owners shall have no rights under this Section 23 if
the Trustee waives an Event of Default. The Trustee may
consult with counsel, who may be counsel to the City, with
regard to legal questions'arising under this Ordinance, and
the opinion of such counsel shall be full and complete
authorization and protection with respect to any action or
non -action taken in good faith hereunder.
Page 38
Section 24: ORDINANCE A CONTRACT
The provisions of this Ordinance shall constitute a
contract between the City and the Owners so long as the
Bonds hereby authorized remain unpaid.
Section 25: SEVERABILITY
If any one or more of the covenants or agreements
provided in this Ordinance to be performed on the part of
the City shall be declared by any court of competent
jurisdiction to be contrary to law, then such covenant or
covenants, agreement or agreements, shall be null and void
and shall be deemed separable from the remaining covenants
and agreements in this Ordinance and shall in no way affect
the validity of the other provisions of this Ordinance or
of the Bonds.
Section 26: REPEALER
All prior ordinances inconsistent herewith are to the
extent of such inconsistency, hereby repealed and shall, to
the extent of such inconsistency, have no further force or
effect.
Section 27: BOND INSURANCE
The City has obtained a policy of municipal bond
insurance (the "Policy") from the Insurer, insuring the
timely payment of the principal of and interest on the
Bonds. A statement of insurance in the form required by
the Insurer shall appear on each Bond. The Mayor and City
Clerk are hereby authorized to execute any additional
agreements or other documents, on behalf of the City, as
may be required by the Insurer to insure the payment of the
Bonds. The "Provisions Relating to Municipal Bond
Insurance" set forth in Exhibit "G" which is annexed hereto
are hereby incorporated by reference and made a part of
this Ordinance as though fully set forth herein, which
Provisions shall govern, notwithstanding anything to the
contrary set forth in this Ordinance.
Section 28: FURTHER AUTHORIZATION
The Mayor, Clerk, and Treasurer, or any one of such
officers, as may be appropriate, are hereby authorized to
execute, on behalf of the City, all such additional
certificates and other documents as may be necessary or
appropriate to effect the sale and delivery of the Bonds in
accordance with this Ordinance.
Page 39
Section 29: PUBLICATION
This Ordinance, or a summary thereof in compliance
with Section 50-901A, Idaho Code, substantially in the form
annexed hereto as Exhibit "F," shall be published once in
the official newspaper of the City, and shall take effect
immediately upon its passage, approval, and publication.
DATED this 26th day of June, 2003.
CITY OF McCALL
Valley County, Idaho
Mayor
ATTEST:
( S ;.o.� 4„TH,o;
♦t �CALL *••
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• SEAL it
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Page 40
[Form of Global Bond]
Number
R-1
CUSIP:
Dollars
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to Issuer or its agent for registration of
transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
UNITED STATES OF AMERICA
STATE OF IDAHO
COUNTY OF VALLEY
CITY OF MCCALL
WATER REVENUE REFUNDING BOND, SERIES 2003
The CITY OF MCCALL, Valley County, Idaho (the "City"), for
value received, promises to pay from the "City of McCall Water
Revenue Refunding Bond Fund" (the "Bond Fund"), created by
Ordinance No. 779, adopted on June 26, 2003 (the "Bond
Ordinance"), to CEDE & CO. or registered assigns, on
, the principal sum of
and to pay interest thereon from the aforesaid Bond Fund from
July 15, 2003, or the most recent date to which interest has been
paid or duly provided .for, at the rate of percent ( o) per
annum, payable on September 1, 2003, and semiannually on each
March 1 and September 1 thereafter, until the date of maturity or
prior redemption of this Bond. Interest shall be computed on the
basis of a 12-month, 360-day year.
Both principal of and interest on this Bond are payable in
lawful money of the United States of America to the registered
owner hereof whose name and address shall appear on the
registration books of the City maintained by U.S. Bank National
Association (the "Trustee"). Interest shall be paid to the
registered owner whose name appears on the Bond Register on the
fifteenth day next preceding the interest payment date, at the
Page 1 - EXHIBIT "A"
address appearing on the Bond Register, and shall be paid by
check or draft of the Trustee mailed to such registered owner on
the due date at the address appearing on the Trustee, or at such
other address as may be furnished in writing by such registered
owner to the Trustee. Principal shall be paid to the registered
owner upon presentation and surrender of this Bond at the
principal corporate trust office of the Trustee, on or after the
date of maturity or prior redemption.
This Bond shall not be valid or become obligatory for any
purpose or be entitled to any security or benefit under the Bond
Ordinance until the Certificate of Authentication hereon shall
have been manually signed by the Trustee.
This Bond is one of a duly authorized issue of Bonds of like
date, tenor, and effect, except for variations required to state
numbers, denominations, rates of interest, and dates of maturity,
aggregating $5,630,000 in principal amount. The Bonds are issued
pursuant to and in full compliance with the Constitution and
statutes of the State of Idaho, particularly Sections 50-1027
through 50-1042 and Section 57-504, Idaho Code, and proceedings
duly adopted and authorized by the City Council of the City
acting for and on behalf of the City, more particularly the Bond
Ordinance.
Bonds maturing on or before September 1, 2013, are not
subject to call or redemption prior to their stated dates of
maturity. The City has reserved the right to redeem any Bonds
maturing on or after September 1, 2014 any interest payment date
on or after September 1, 2013, in whole or in part, at the
discretion of the City (and by lot selected by the Trustee within
a maturity), at par plus accrued interest to the redemption date.
Bonds of this series maturing on September 1, 2015, are term
Bonds and are subject to mandatory redemption and retirement
prior to maturity, in part, by lot in such manner as the Bond
Registrar shall determine, at a redemption. price equal to 100% of
the principal amount of the Bonds being redeemed, together with
accrued interest to the date of redemption, from Mandatory
Redemption Amounts deposited into the Bond Fund. The Amounts and
due dates of the Mandatory Redemption Amounts for Bond maturing
on September 1, 2015, are as follows:
Mandatory
Redemption Date
September 1, 2013
September 1, 2014
September 1, 2015*
Page 2 - EXHIBIT "A"
Mandatory
Redemption Amount
$395,000
405,000
420,000
*Maturity
Notice of any intended redemption shall be given by mailing
of notice to the registered owner of any Bond being called for
redemption not less than thirty nor more than sixty days prior to
the redemption date by first class mail, postage prepaid, at the
address appearing on the Bond Register. The requirements of the
Bond Ordinance shall be deemed to be complied with when notice is
mailed as herein provided, regardless of whether or not it is
actually received by the owner of such Bond. Interest on all of
such Bonds so called for redemption shall cease to accrue on the
specified redemption date unless such Bond or Bonds so called for
redemption are not redeemed upon presentation made pursuant to
such call.
Portions of any Bond in a denomination in excess of $5,000
may also be redeemed, and, in such case, upon the surrender of
the Bond, there shall be issued to the registered owner thereof,
without charge therefor, for the unredeemed balance of the
principal amount of the Bond, fully registered Bonds of any
authorized denominations (at the option of the registered owner).
In selecting portions of any Bond which is of a denomination of
more than $5,000 for redemption, the .Trustee will treat each such
Bond as representing that number of Bonds of $5,000 denomination
which is obtained by dividing the principal amount of such Bond
by $5,000.
This Bond and the Bonds of this issue are issued for the
purpose of providing funds to currently refund certain
outstanding water revenue bonds of the City, as more fully
described in the Bond Ordinance.
This Bond creates a first lien and charge upon the Net
Revenues of the System (as said terms are defined in the Bond
Ordinance), equal to the lien of any additional bonds or other
obligations which may hereafter be issued on a parity with the
Bonds of this issue in accordance with the provisions of the Bond
Ordinance, and superior to all other charges of any kind or
nature. This Bond is a limited obligation of the City and is
payable as to principal and interest solely from a special fund
created by the Bond Ordinance and designated "City of McCall
Water Revenue Refunding Bond Fund" (the "Bond Fund"). For a more
particular description of the Bond Fund, the revenues to be
deposited therein, and the nature and extent of the security
afforded thereby, reference is made to the provisions of the Bond
Ordinance pursuant to which this Bond is issued, and such Bond
Fund will be maintained.
This Bond is transferable by the registered owner hereof in
person, or by his attorney duly authorized in writing, upon
Page 3 - EXHIBIT "A"
presentation and surrender of this Bond at the principal
corporate trust office of the Trustee. Upon such transfer, a new
Bond, of the same denomination, maturity, and interest rate, will
be issued to the transferee, in exchange therefor.
Reference is hereby made to the Bond Ordinance for the
covenants and declarations of the City and other terms and
conditions under which this Bond and the Bonds of this issue have
been issued. The covenants contained herein and in the Bond
Ordinance may be discharged by making provision, at any time, for
the payment of the principal of and interest on this Bond in the
manner provided in the Bond Ordinance.
The City and the Trustee may deem and treat the registered
owner hereof as the absolute owner hereof for the purpose of
receiving payments of principal hereof. and interest due hereon
and for all other purposes, and neither the City nor the Trustee
shall be affected by any notice to the contrary.
IT IS HEREBY CERTIFIED AND DECLARED that all acts,
conditions, and things required by the Constitution and statutes
of the State of Idaho to exist, to have happened, been done, and
performed precedent to and in the issuance of this Bond have
happened, been done, and performed, and that the issuance of this
Bond and the Bonds of this issue does not violate any
Constitutional, statutory, or other limitation upon the amount of
bonded indebtedness that the City may incur.
IN WITNESS WHEREOF, the City of McCall, Valley County,
Idaho, has caused this Bond to be executed by its Mayor,
countersigned by its Treasurer, and attested by the its City
Clerk, and the seal of the City to be impressed hereon, as of
this fifteenth day of July, 2003.
CITY OF MCCALL
Valley County, Idaho
Mayor
COUNTERSIGNED:
Treasurer
ATTEST:
City Clerk
[SEAL]
Page 4 - EXHIBIT "A"
CERTIFICATION OF AUTHENTICATION
Date of Authentication:
This Bond is one of the City of McCall Water Revenue Refunding
Bonds, Series 2003, dated as of July.15, 2003, described in the
within -mentioned Bond Ordinance.
U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:
Authorized Signature
STATEMENT OF INSURANCE
Financial Security Assurance, Inc. ("Financial Security"),
New York, New York, has delivered its municipal bond insurance
policy with respect to the scheduled payments due of principal of
and interest on this Bond to U.S. Bank National Association, Salt
Lake City, Utah, or its successor, as paying agent for the Bonds
(the "Paying Agent"). Said Policy is on file and available for
inspection at the principal office of the Paying Agent and a copy
thereof may be obtained from Financial Security or the Paying
Agent.
Page 5 - EXHIBIT "A"
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto:
Name of Transferee:
Address:
Tax Identification No.
the within Bond and hereby irrevocably constitutes and appoints
of
to transfer said Bond on the books kept for registration thereof
with full power of substitution in the premises.
Dated:
Registered Owner
NOTE: The signature on this
Assignment must correspond with the
name of the registered owner as it
appears upon the face of the within
Bond in every particular, without
alteration or enlargement or any
change whatever.
SIGNATURE GUARANTEED:
Bank, Trust Company or Member
Firm of the New York Stock
Exchange
Authorized Officer
Page 6 - EXHIBIT "A"
Blanket issuer Letter of Representations
[To be Completed by Issuer]
CITY OF McCALL
Valley County, Idaho
[Dame of Issuer]
August 1, 1996
[Date,
Attention: Underwriting Department — Eligibility
The Depository Trust Company
55 Water Street; 50th Floor
New York, NY 10041-0099
Ladies and Gentlemen:
This letter sets forth our understanding with respect to all issues (the "Securities") that Issuer
shall request be made eligible for deposit by The Depository Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at DTC, and to act in accordance
with DTC's Rules with respect to the Securities, Issuer represents to DTC that Issuer will comply
with the requirements stated in DTC's Operational Arrangements, as they may be amended from
time to time.
Note-
Schedule A contains statements that DTC believes
accuratek describe DTC, the method of effecting book -
entry traiufers of securities distributed through DTC, and
certain related matters.
Received and Accepted:
THE DEPOSITORY TRUST COMP
I)
'40
By:
EXHIBIT "B"
Very truly yours,
CITY OF McCALL
By:
(Issuer)
(Authorized Of£aer's igiumm0
William Killen, Mayor
(Typewrite Name Ec Title)
216 Park Street
McCall
(Street Address)
Idaho 83638
(City)
(208) 634-7142
(State) (Zip)
(Phone Number)
SCHEDULE A
SAMPLE OFERING DOCUMENT LANGUAGE
DIESCRIBING BOOK -ENTRY -ONLY ISSUANCE
(Prepared by DTC—bracketed material may be applicable only to certain issues)
I. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the
securities (the "Securities"). The Securities will be issued as fully -registered securities registered in the
name of Cede & Co. (DTC's partnership nominee). One fully -registered Security certificate will be
issued for [each issue off the Securities, [each] in the aggregate principal amount of such issue, and will
be deposited with DTC. [If, however, the aggregate principal amount of [any] issue exceeds $200
million, one certificate will be issued with respect to each $200 million of principal amount and an
additional certificate will be issued with respect to any remaining principal amount of such issue.]
2. DTC is a limited -purpose trust company organized under the Neu 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 I7A of the Securities Exchange Act of
1934. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book -entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its. Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers,
Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks,
and trust companies that clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants
are on rile with the Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or through Direct Participants,
which will receive a credit for the Securities on DTC's records. The ownership interest of each actual
purchaser of each Security ("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, but Beneficial Owners are 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
Securities are to be accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests
in Securities, except in the event that use of the book -entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Participants with DTC are registered
in the name of DTC's partnership nominee, Cede & Co. The deposit of Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no
lmowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of
the Direct Participants to whose accounts such Securities are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
5. 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.
[6. Redemption notices shall be sent to Cede & Co. If less than all of the Securities within an issue are
being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.]
7. Neither DTC nor Cede 6r Co. will consent or vote with respect to Securities. Under its usual
procedures, DTC mails an Omnibus Proxy to the Issuer 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 Securities are credited on the record date (identified in a listing attached to the Omnibus
Proxy).
S. Principal and interest payments on the Securities will be made to DTC. DTC's practice is to credit
Direct Participants' accounts on payable date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive payment on payable date.
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, the Agent, or the
Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to DTC is the responsibility of the Issuer or the Agent, disbursement
of such payments to Direct Participants shall be the responsibility. of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through
its Participant, to the [Tender/Remarketing] Agent, and shall effect delivery of such Securities by causing
the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to the
[Tender/Remarketing] Agent. The requirement for physical delivery of Securities in connection with a
demand for purchase or a mandatory purchase will be deemed satisfied when the ownership rights in
the Securities are transferred by Direct Participants on DTC's records.]
10. DTC may discontinue providing its services as securities depository with respect to the Securities
at any time by giving reasonable notice to the Issuer or the Agent. Under such circumstances, in the
event that a successor securities depository is not obtained, Security certificates are required to be
printed and delivered.
11. The Issuer may decide to discontinue use of the system of book -entry transfers through DTC (or
a successor securities depository). In that event, Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book -entry system has been obtained
from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the
accuracy thereof.
[Form of Certificated Bond]
[Face of Bond]
UNITED STATES OF AMERICA
STATE OF IDAHO
COUNTY OF VALLEY
CITY OF McCALL
WATER REVENUE REFUNDING BOND, SERIES 2003
Number
R-1
See Reverse Side for
Additional Provisions
INTEREST RATE:
Registered Owner:
Principal Amount:
Dollars
MATURITY DATE: DATED DATE: CUSIP:
July 15, 2003
THE CITY OF McCALL, Valley County, Idaho (the "City"), for
value received, promises to pay from the "City of McCall Water
Revenue Refunding Bond Fund" (the "Bond Fund") created by
Ordinance No. 779, adopted on June 26, 2003, (the "Bond
Ordinance"), to the registered owner identified above, or
registered assigns, on the maturity date specified above, the
principal sum indicated above, and to pay interest thereon from
the aforesaid Bond Fund from July 15, 2003, or the most recent
date to which interest has been paid or duly provided for, at the
rate per annum specified above, payable on September 1, 2003, and
semiannually on each March 1 and September 1 thereafter, until
the date of maturity or prior redemption of this Bond.
Both principal of and interest on this Bond are payable in
lawful money of the United States of America to the registered
owner hereof whose name and address shall appear on the
registration books of the City maintained by U.S. Bank National
Association (the "Trustee"). Interest shall be paid to the
registered owner whose name appears on the Bond Register on the
fifteenth day next preceding the interest payment date, at the
address appearing on the Bond Register, and shall be paid by
check or draft of the Trustee mailed to such registered owner on
the due date at the address appearing on the Bond Register, or at
such other address as may be furnished in writing by such
registered owner to the Trustee. Principal shall be paid to the
registered owner upon presentation and surrender of this Bond at
the principal corporate trust office of the Trustee, on or after
Page 1 - EXHIBIT "C"
the date of maturity or prior redemption.
Reference is hereby made to additional provisions of this
Bond set forth on the reverse, side hereof, and such additional
provisions shall for all purposes have the same effect as if set
forth in this space.
This Bond shall not be valid or become obligatory for any
purpose or be entitled to any security or benefit under the Bond
Ordinance until the Certificate of Authentication hereon shall
have been manually signed by the Trustee.
IT IS HEREBY CERTIFIED AND DECLARED that all acts,
conditions, and things required by the Constitution and statutes
of the State of Idaho to exist, to have happened, been done, and
performed precedent to and in the issuance of this Bond have
happened, been done, and performed, and that the issuance of this
Bond and the Bonds of this issue does not violate any
Constitutional, statutory, or other limitation upon the amount of
bonded indebtedness that the City may incur.
IN WITNESS WHEREOF, the City of McCall, Valley County,
Idaho, has caused this Bond to be executed by the facsimile
signature of its Mayor, countersigned by the facsimile signature
of its Treasurer, and attested by the facsimile signature of its
City Clerk, and a facsimile of the seal of the City to be
imprinted hereon, as of this fifteenth day of July, 2003.
CITY OF McCALL
Valley County, Idaho
[facsimile signature]
Mayor
COUNTERSIGNED:
[facsimile signature]
Treasurer
ATTEST:
[facsimile signature]
City Clerk
[FACSIMILE SEAL]
Page 2 - EXHIBIT "C"
CERTIFICATION OF AUTHENTICATION
Date of Authentication:
This Bond is one of the City of McCall Water Revenue Refunding
Bonds, Series 2003, dated as of July 15, 2003, described in the
within -mentioned Bond Ordinance.
as Trustee
By:
Authorized Signature
[Reverse Side of Bond]
ADDITIONAL BOND PROVISIONS
This Bond is one of a duly authorized issue of Bonds of like
date, tenor, and effect, except for variations required to state
numbers, denominations, rates of interest, and dates of maturity,
aggregating $5,630,000 in principal amount. The Bonds are issued
pursuant to and in full compliance with the Constitution and
statutes of the State of Idaho,. particularly Sections 50-1027
through 50-1042 and Section 57-504, Idaho Code, and proceedings
duly adopted and authorized by the Mayor and Council of the City
acting for and on behalf of the. City, more particularly the Bond
Ordinance.
Bonds maturing on or before September 1, 2013, are not
subject to call or redemption prior to their stated dates of
maturity. The City has reserved the right to redeem any Bonds
maturing on or after September 1, 2014, on any interest payment
date on or after September 1, 2013, in whole or in part, at the
discretion of the City (and by lot selected by the Trustee within
a maturity), at par plus accrued interest to the redemption date.
Bonds of this series maturing on September 1, 2015, are
term Bonds and are subject to mandatory redemption and retirement
prior to maturity, in part, by lot in such manner as the Bond
Registrar shall determine, at a redemption price equal to 1000 of
the principal amount of the Bonds being redeemed, together with
accrued interest to the date of redemption, from Mandatory
Redemption Amounts deposited into the Bond Fund. The Amounts and
Page 3 - EXHIBIT "C"
due dates of the Mandatory Redemption
on September 1, 2015, are as follows:
Mandatory
Redemption Date
September 1, 2013
September 1, 2014
September 1, 2015*
*Maturity
Amounts for Bond
Mandatory
Redemption Amount
$395,000
405,000
420,000
maturing
Notice of any intended redemption shall be given by mailing
of notice to the registered owner of any Bond being called for
redemption not less than thirty nor more than sixty days prior to
the redemption date by first class mail, postage prepaid, at the
address appearing on the Bond Register. The requirements of the
Bond Ordinance shall be deemed to be complied with when notice is
mailed as herein provided, regardless of whether or not it is
actually received by the owner of such Bond. Interest on all of
such Bonds so called for redemption shall cease to accrue on the
specified redemption date unless such Bond or Bonds so called for
redemption are not redeemed upon presentation made pursuant to
such call.
Portions of any Bond of a denomination of more than $5,000
may be redeemed. The portion of any Bond of a denomination of
more than $5,000 to be redeemed shall be in the principal amount
of $5,000 or any integral multiple of $5,000, and in selecting
portions of such Bonds for redemption the Trustee will treat each
such Bond as representing that number of Bonds of $5,000
denomination which is obtained by dividing the principal amount
of such Bond by $5,000.
Notice of any intended redemption shall be given by mailing
of notice to the registered owner of any Bond being called for
redemption not less than thirty nor more than sixty days prior to
the redemption date by first class mail, postage prepaid, at the
address appearing on the Bond Register. The requirements of the
Bond Ordinance shall be deemed to be complied with when notice is
mailed as herein provided, regardless of whether or not it is
actually received by the owner of such Bond. Interest on all of
such Bonds so called for redemption shall cease to accrue on the
specified redemption date unless such Bond or Bonds so called for
redemption are not redeemed upon presentation made pursuant to
such call.
This Bond and the Bonds of this issue are issued for the
purpose of providing funds to currently refund certain.
outstanding water revenue bonds of the City, as more fully
described in the Bond Ordinance.
Page 4 - EXHIBIT "C"
This Bond creates a first lien and charge upon the Net
Revenues of the System (as said terms are defined in the Bond
Ordinance), and any additional bonds or other obligations which
may hereafter be issued on a parity with the Bonds of this issue
in accordance with the provisions of the Bond Ordinance, and
superior to all other charges of any kind or nature. This Bond
is a limitedobligation of the City and is payable as to
principal and interest solely from a special fund created by the
Bond Ordinance and designated "City of McCall Water Revenue
Refunding Bond Fund" (the "Bond Fund"). For a more particular
description of the Bond Fund, the revenues to be deposited
therein, and the nature and extent of the security afforded
thereby, reference is made to the provisions of the Bond
Ordinance pursuant to which this Bond is issued, and such Bond
Fund will be maintained.
This Bond is transferable by the registered owner hereof in
person, or by his attorney duly authorized in writing, upon
presentation and surrender of this Bond at the principal
corporate trust office of the Trustee. Upon such transfer, a new
Bond, of the same denomination, maturity, and interest rate, will
be issued to the transferee, in exchange therefor.
Reference is hereby made to the Bond Ordinance for the
covenants and declarations of the City and other terms and
conditions under which this Bond and the Bonds of this issue have
been issued. The covenants contained herein and in the Bond
Ordinance may be discharged by making provision, at any time, for
the payment of the principal of and interest on this Bond in the
manner provided in the Bond Ordinance.
The City and the Trustee may deem and treat the registered
owner hereof as the absolute owner hereof for the purpose of
receiving payments of principal hereof and interest due hereon
and for all other purposes, and neither the City nor the Trustee
shall be affected by any notice .to the contrary.
Page 5 - EXHIBIT "C"
LEGAL OPINION
It is hereby certified that the following is a true and
complete copy of the legal opinion of Moore Smith Buxton &
Turcke, Chartered, of Boise, Idaho, which opinion was dated the
date of delivery of and payment for the Bonds described therein,
an original of which was delivered to me on said date, and is a
part of the permanent records of the City of McCall, Idaho.
CITY OF McCALL
Valley County, Idaho
[facsimile signature]
Clerk
[INSERT LEGAL OPINION OF MOORE SMITH BUXTON & TURCKE, CHARTERED]
The following abbreviations, when used in the inscription on
the face of this Bond, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM -- as tenants UNIF TRFS MIN ACT
in common (Gust) (Minor)
TEN ENT -- as tenants under Uniform Transfer to Minors
by the entireties Act
(State)
JT TEN -- as joint tenants
with right of
survivorship and
not as tenants
in common
Additional abbreviations may also be used although not in
the above list.
Page 6 - EXHIBIT "C"
STATEMENT OF INSURANCE
Financial Security Assurance, Inc. ("Financial Security"),
New York, New York, has delivered its municipal bondinsurance
policy with respect to the scheduled payments due of principal of
and interest on this Bond to U.S. Bank National Association, Salt
Lake City, Utah, or its successor, as paying agent for the Bonds
(the "Paying Agent"). Said Policy is on file and available for
inspection at the principal office of the Paying Agent and a copy
thereof may be obtained from Financial Security or the Paying
Agent.
Page 7 - EXHIBIT "C"
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto:
Name of Transferee:
Address:
Tax Identification No.
the within Bond and hereby irrevocably constitutes and appoints
of
to transfer said Bond on the books kept for registration thereof
with full power of substitution in the premises.
Dated:
Registered Owner
NOTE: The signature on this
Assignment must correspond with the
name of the registered owner as it
appears upon the face of the within
Bond in every particular, without
alteration or enlargement or any
change whatever.
SIGNATURE GUARANTEED:
Bank, Trust Company or Member
Firm of the New York Stock
Exchange
Authorized Officer
Page 8 - EXHIBIT "C"
ESCROW DEPOSIT AGREEMENT
between
THE CITY OF McCALL,
Valley County, Idaho
and
U.S. Bank National Association
Dated as of July 15, 2003
EXHIBIT "D"
TABLE OF CONTENTS
Article 1. Definitions and Interpretations. 3
Section 1.1. Definitions. 3
Section 1.2. Other Definitions. 4
Section 1.3. Interpretations. 4
Article 2. Deposit of Funds and Escrowed Securities. 4
Section 2.1. Deposits in the Escrow Fund. 4
Section 2.2 Deposits in the Cost of Issuance Fund 4
Article 3. Creation and Operation of Escrow Fund. 4
Section 3.1. Escrow Fund. 4
Section 3.2. Payment of Principal and Interest. 5
Section 3.3. Sufficiency of Escrow Fund. 5
Section 3.4. Trust Fund. 5
Section 3.5. Security for Cash Balances. 6
Article 4. Limitation on Investments. 6
Section 4.1. Investments. 6
Section 4.2. Substitution of Securities. 6
Article 5. Application of Cash Balances. 7
Section 5.1. In General. 7
Article 6. Redemption of Refunded Bonds. 7
Section 6.1. Call for Redemption. 7
Section 6.2. Notice of Redemption. 8
Article 7. Records and Reports. 8
Section 7.1. Records. 8
Section 7.2. Reports. 8
Article 8. Concerning the Paying Agents and Escrow Agent 8
Section
Section
Section
Section
8.1. Representations. 8
8.2. Limitation on Liability. 9
8.3. Compensation. 10
8.4. Successor Escrow Agents. 10
Article 9. Miscellaneous 11
Section
Section
Section
Section
Section
Section
Section
9.1.
9.2.
9.3.
9.4.
9.5.
9.6.
9.7.
Notice. 11
Termination of Responsibilities. 12
Binding Agreement. 12
Severability. 12
Idaho Law Governs. 12
Time of the Essence. 12
Amendments. 13
Exhibit A - Addresses of the Issuer and Escrow Agent
Exhibit B - Description of the Refunded Bonds
Exhibit C - Schedule of Debt Service on Refunded Bonds
Exhibit D
- Description of Beginning
Escrowed Securities
Appendix A- Notice of Redemption
Cash Deposit (if any) and
ESCROW DEPOSIT AGREEMENT
The City of McCall
Valley County, Idaho
Water Revenue Refunding Bonds
Series 2003
THIS ESCROW AGREEMENT, dated as of July 15, 2003 (herein,
together with any amendments or supplements hereto, called the
"Agreement"), is entered into by and between the City of McCall,
Valley County, Idaho (herein called the "Issuer"), and U.S. Bank
National Association, as escrow agent (herein, together with any
successor in such capacity, called the "Escrow Agent"). The
notice addresses of the Issuer and the Escrow Agent are shown on
Exhibit A attached hereto and made a part hereof.
WITNESSETH:
WHEREAS, the Issuer heretofore has issued and there
presently remain outstanding the Series 1994 Bonds and Series
1996 Bonds described in Exhibit B attached hereto (the "Refunded
Bonds"); and
WHEREAS, pursuant to Ordinance No. 779 of the Issuer,
adopted on June 26, 2003 (the "Authorizing Action"), the Issuer
has determined to issue its Water Revenue Refunding Bonds, Series
2003 (the "Refunding Bonds") for the purpose of providing funds
to pay (i) interest on the Refunded Bonds as the same falls due;
(ii) the maturing principal of the Series 1994 Bonds through
September 1, 2005, and on September 1, 2006, to pay and redeem
the outstanding Series 1994 Bonds in full, principal and
interest; and (iii) the maturing principal of the Series 1996
Bonds. through March 1, 2006 and, on March 1, 2007, to pay and
redeem the outstanding Series 1996 Bonds in full, principal and
interest (the "Dates Fixed for Redemption"); and
WHEREAS, the Escrow Agent has reviewed
Action and this Agreement, and is willing to
Agent hereunder; and
WHEREAS, Balukoff, Lindstrom & Co., P.A.,
the Authorizing
serve as Escrow
Certified Public
Accountants, have prepared a verification report dated as of July
15, 2003 (the "Verification Report") relating to the source and
use of funds available to accomplish the refunding of the
Refunded Bonds, the investment of such funds, and the adequacy of
EXHIBIT "D"
Page 1 - Escrow Deposit Agreement
such funds and investments to provide for the payments as set
forth above; and
WHEREAS, pursuant to the Authorizing Action, the Refunded
Bonds have been designated for redemption prior to their
scheduled maturity dates and, after provision is made for such
redemption, the Refunded Bonds will be payable at such time& and
in such amounts as are set forth in Exhibit C attached hereto and
made a part hereof; and
WHEREAS, the Issuer's Authorizing Action authorizes the
Issuer to issue Refunding Bonds and to deposit the proceeds from
the sale thereof, and any other available funds or resources,
with the Escrow Agent for the discharge and final payment of the
Refunded Bonds; and
WHEREAS, the Authorizing Action further authorizes the
Issuer to enter into an escrow agreement with the Escrow Agent
with respect to the safekeeping, investment, administration and
disposition of any such deposit, upon such terms and conditions
as the Issuer and the Escrow Agent may agree, provided that such
deposits may be invested only in direct obligations of the United
States of America, including obligations the principal of and
interest on which are unconditionally guaranteed by the United
States of America, and which may be in book entry form, and which
shall mature and/or bear interest payable at such times and in
such amounts as will be sufficient to provide for the scheduled
payment of the principal of and interest and redemption premium,
if any, on the Refunded Bonds when due; and
WHEREAS, the Refunding Bonds have been duly authorized to be
issued, sold, and delivered for the purpose of obtaining the
funds required to provide for the payment of the principal of and
interest and redemption premium (if any) on the Refunded Bonds
when due as shown on Exhibit C attached hereto; and
WHEREAS, the Issuer desires that, concurrently with the
delivery of the Refunding Bonds to the purchasers thereof,
certain proceeds of the Refunding Bonds, together with certain
other available funds of the Issuer, shall be applied to purchase
certain direct obligations of the United States of America
hereinafter defined as the "Escrowed Securities" for deposit to
the credit of the Escrow Fund created pursuant to the terms of
this Agreement and to establish a beginning cash balance (if
needed) in such Escrow Fund; and
WHEREAS, the Escrowed Securities shall mature and the
interest thereon shall be payable at such times and in such
EXHIBIT "D"
Page 2 - Escrow Deposit Agreement
amounts so as to provide moneys which, together with cash
balances from time to time on deposit in the Escrow Fund, will be
sufficient to pay the principal of and interest on the Refunded
Bonds on to their final date of redemption; and
WHEREAS, to facilitate the receipt and transfer of proceeds
of the Escrowed Securities, particularly those in book entry
form, the Issuer desires to establish the Escrow Fund at the
principal corporate trust office of the Escrow Agent; and
WHEREAS, the Escrow Agent is a party to this Agreement to
acknowledge its acceptance of the terms and provisions hereof;
NOW, THEREFORE, in consideration of the mutual undertakings,
promises and agreements herein contained, the sufficiency of
which hereby are acknowledged, and to secure the full and timely
payment of principal of and the interest and redemption premium
on the Refunded Bonds, the Issuer and the Escrow Agent mutually
undertake, promise and agree for themselves and their respective
representatives and successors, as follows:
Article 1. Definitions and Interpretations.
Section 1.1. Definitions.
Unless the context clearly indicates otherwise, the
following terms shall have the meanings assigned to them below
when they are used in this Agreement:
"Escrow Fund" means the fund created by this Agreement to be
established, held and administered by the Escrow Agent pursuant
to the provisions of this Agreement.
"Escrowed Securities" means the noncallable Government
Obligations described in Exhibit D attached to this Agreement, or
cash or other Government Obligations substituted therefor
pursuant to Section 4.2 of this Agreement.
"Government Obligations" means direct non -callable
obligations of the United States of America and securities fully
and unconditionally guaranteed as to the timely payment of
principal and interest by the United States of America, to which
direct obligation or guarantee the full faith and credit of the
United States of America has been pledged, including, but not
necessarily limited to, State and Local Government Series
Obligations (SLGS).
EXHIBIT "D"
Page 3 - Escrow Deposit Agreement
"Paying Agent" means U.S. Bank National Association, as the
paying agent for the Refunded Bonds.
Section 1.2. Other Definitions.
The terms "Agreement," "Issuer," "Escrow Agent,"
"Authorizing Action," "Verification Report," "Refunded Bonds,"
and "Refunding Bonds" when they are used in this Agreement, shall
have the meanings assigned to them in the preamble to this
Agreement.
Section 1.3. Interpretations.
The titles and headings of the articles and sections of this
Agreement have been inserted for convenience and reference only
and are not to be considered a part hereof and shall not in any
way modify or restrict the terms hereof. This Agreement and all
of the terms and provisions hereof shall be liberally construed
to effectuate the purposes set forth herein and to achieve the
intended purpose of providing for the refunding of the Refunded
Bonds in accordance with applicable law.
Article 2. Deposit of Funds and Escrowed Securities.
Section 2.1. Deposits in the Escrow Fund.
Concurrently with the sale and delivery of the Refunding
Bonds, the Issuer shall deposit, or cause to be deposited, with
the Escrow Agent, for deposit in the Escrow Fund, the funds and
Escrowed Securities described in Exhibit D attached hereto, and
the Escrow Agent shall, upon the receipt thereof, acknowledge
such receipt to the Issuer in writing.
Article 3. Creation and Operation of Escrow Fund.
Section 3.1. Escrow Fund.
The Escrow Agent has created on its books a special trust
fund and irrevocable escrow to be known as the City of McCall,
Valley County, Idaho, Water Revenue Bonds, Series 1994 and Series
1996, Escrow Fund (the "Escrow Fund"). The Escrow Agent hereby
agrees that upon receipt thereof it will deposit to the credit of
the Escrow Fund the funds and the Escrowed Securities described
in Exhibit "D" attached hereto. Such deposit, all proceeds
therefrom, and all cash balances from time to time on deposit
therein (a) shall be the property of the Escrow Fund, (b) shall
be applied only in strict conformity with the terms and
EXHIBIT "D"
Page 4 - Escrow Deposit Agreement
conditions of this Agreement, and (c) are hereby irrevocably
pledged to the payment of the principal of and interest on the
Refunded Bonds, which payment shall be made by timely transfers
of such amounts at such times as are provided for in Section 3.2
hereof. When the final transfers have been made for such
payments, any balance then remaining in the Escrow Fund shall be
transferred to the Issuer, and the Escrow Agent shall thereupon
be discharged from any further duties hereunder.
Section 3.2. Payment of Principal and Interest.
The Escrow Agent is hereby irrevocably instructed to
transfer to the Paying Agent from the cash balances from time to
time on deposit in the Escrow Fund, the . amounts required to pay
the interest and maturing principal on the Refunded Bonds as the
same shall become due, and to pay the principal of the Refunded
Bonds on the Dates Fixed for Redemption, together with any
redemption premium on the Refunded Bonds, in the amounts and at
the times shown in Exhibit C attached hereto.
Section 3.3. Sufficiency of Escrow Fund.
The Issuer represents that the receipts of the principal of
and interest on the Escrowed Securities will assure that the cash
balance on deposit in the Escrow Fund will be sufficient to
provide moneys for transfer to the Paying Agent at the times and
in the amounts required to pay the interest and the maturing
principal on the Refunded Bonds as the same shall become due and
to pay the principal of the Refunded Bonds on the Dates Fixed for
Redemption If, for any reason, the cash balances on deposit or
scheduled to be on deposit in the Escrow Fund shall be
insufficient to transfer the amounts required by the Paying Agent
to make the payments set forth in Section 3.2. hereof, the Issuer
shall timely deposit in the Escrow Fund, from any funds that are
lawfully available therefor, additional funds in the amounts
required to make such payments. Notice of any such insufficiency
shall be given promptly as hereinafter provided, but the Escrow
Agent shall not in any manner be responsible for any
insufficiency of funds in the Escrow Fund or the Issuer's failure
to make additional deposits thereto.
Section 3.4. Trust Fund.
The Escrow Agent shall hold at all times the Escrow Fund,
the Escrowed Securities, and all other assets of the Escrow Fund,
wholly segregated from all other funds and securities on deposit
with the Escrow Agent; it shall never allow the Escrowed
EXHIBIT "D"
Page 5 - Escrow Deposit Agreement
Securities or any other assets of the Escrow Fund to be
commingled with any other funds or securities of the Escrow
Agent; and it shall hold and dispose of the assets of the Escrow
Fund only as set forth herein. The Escrowed Securities and other
assets of the Escrow Fund shall always be maintained by the
Escrow Agent as trust funds for the benefit of the owners of the
Refunded Bonds; and a special account thereof shall at all times
be maintained on the books of the Escrow Agent. The owners of
the Refunded Bonds shall be entitled to the same preferred claim
and first lien upon the Escrowed Securities, the proceeds
thereof, and all other assets of the Escrow Fund to which they
are entitled as owners of the Refunded Bonds. The amounts
received by the Escrow Agent under this Agreement shall not be
considered as a banking deposit by the Issuer, and the Escrow
Agent shall have no right to title with respect thereto except as
a trustee and Escrow Agent under the terms of this Agreement.
The amounts received by the Escrow Agent under this Agreement
shall not be subject to warrants, drafts or checks drawn by the
Issuer or, except to the extent expressly herein provided, by the
Paying Agent.
Section 3.5. Security for Cash Balances.
Cash balances from time to time on deposit in the Escrow
Fund shall, to the extent not insured by ,the Federal Deposit
Insurance Corporation or its successor, be continuously secured
by a pledge of direct obligations of, or obligations
unconditionally guaranteed by, the United States of America,
having a market value at least equal to such cash balances.
Article 4. Limitation on Investments.
Section 4.1. Investments.
Except for the initial investment in the Escrowed
Securities, the Escrow Agent shall not have any power or duty to
invest or reinvest any money held hereunder, or to make
substitutions of the Escrowed Securities, or to sell, transfer,
or otherwise dispose of the Escrowed Securities.
Section 4.2. Substitution of Securities.
At the written request of the Issuer, and upon compliance
with the conditions hereinafter stated, the Escrow Agent shall
utilize cash balances in the Escrow Fund, or sell, transfer,
otherwise dispose of or request the redemption of the Escrowed
Securities and apply the proceeds therefrom to purchase Refunded
EXHIBIT "D"
Page 6 - Escrow Deposit Agreement
Bonds or Government Obligations which do not permit the
redemption thereof at the option of the obligor, and in
connection therewith the issuer reserves the right to call for
redemption prior to maturity any of the Refunded Bonds to the
extent permitted by their authorizing order. The Issuer may, in
connection with such transaction, withdraw funds or Escrowed
Securities from the Escrow Fund. Any such transaction may be
effected by the Escrow Agent only if (a) the Escrow Agent shall
have received a written opinion from a nationally recognized firm
of certified public accountants that such transaction will not
cause the amount of money and securities in the Escrow Fund to be
reduced below an amount sufficient to provide for the full and
timely payment of principal of and interest on the Refunded Bonds
on the Date Fixed for Redemption; and (b) the Escrow Agent shall
have received the unqualified written legal opinion of nationally
recognized bond counsel or tax counsel to the effect that such
transaction will not cause any of the Refunding Bonds or Refunded
Bonds to be an "arbitrage bond" within the meaning of Section 148
of the Internal Revenue Code of 1986, as amended or, if
applicable, Section 103(c) of the Internal Revenue Code of 1954,
as amended and (c) notice of such transaction is provided to the
rating agencies, if any, which have rated the Refunded Bonds.
This Section 4.2 shall not apply to purchases made pursuant to
the Securities Purchase Agreement.
Article 5. Application of Cash Balances.
Section 5.1. In General.
Except as provided in Section 3.2 and 4.2 hereof, no
withdrawals, transfers, or reinvestment shall be made of cash
balances in the Escrow Fund. Cash balances shall be held by the
Escrow Agent as cash and as cash balances as shown on the books
and records of the Escrow Agent and shall not be reinvested by
the Escrow Agent.
Article 6. Redemption of Refunded Bonds.
Section 6.1. Call for Redemption.
The Issuer hereby irrevocably calls the Series 1994 Bonds
maturing on and after September 1, 2007, for redemption on
September 1, 2006, which is their earliest redemption date. The
Issuer hereby irrevocably calls the Series 1996 Bonds maturing on
and after March 1, 2008, for redemption on March 1, 2007, which
is their earliest redemption date.
EXHIBIT "D"
Page 7 - Escrow Deposit Agreement
Section 6.2. Notice of Redemption.
The Escrow Agent agrees to give notice of the redemption of
the Refunded Bonds on the dates set forth above, pursuant to the
terms of the Refunded Bonds and in substantially the form
attached hereto as Appendix A attached hereto. The Escrow Agent
hereby acknowledges that provision satisfactory and acceptable to
the Escrow Agent has been made for the giving of notice of
redemption of the Refunded Bonds.
Article 7. Records and Reports.
Section 7.1. Records.
The Escrow Agent will keep books of record and account in
which complete and accurate entries shall be made of all
transactions relating to the receipts, disbursements, allocations
and application of the money and Escrowed Securities deposited to
the Escrow Fund and all proceeds thereof, and such books shall be
available for inspection during business hours and after
reasonable notice.
Section 7.2. Reports.
While this Agreement remains in effect, the Escrow Agent
annually shall prepare and send to the Issuer a written report
summarizing all transactions relating to the Escrow Fund during
the preceding year, including, without limitation, credits to the
Escrow Fund as a result of interest payments on or maturities of
the Escrowed Securities and transfers from the Escrow Fund for
payments on the Refunded Bonds and Refunding Bonds or otherwise,
together with a detailed statement of all Escrowed Securities and
the cash balance on deposit in the Escrow Fund as of the end of
such period.
Article 8. Concerning the Paying Agents and Escrow Agent
Section 8.1. Representations.
The Escrow Agent hereby represents that it has all necessary
power and authority to enter into this Agreement and undertake
the obligations and responsibilities imposed upon it herein, and
that it will carry out all of its obligations hereunder.
EXHIBIT "D"
Page 8 - Escrow Deposit Agreement
Section 8.2. Limitation on Liability.
The liability of the Escrow Agent to transfer funds for the
payment of the principal of and interest on the Refunded Bonds
shall be limited to the proceeds of the Escrowed Securities and
the cash balances from time to time on deposit in the Escrow
Fund. Notwithstanding any provision contained herein to the
contrary, the Escrow Agent shall have no liability whatsoever for
the insufficiency of funds from time to time in the Escrow Fund
or any failure of the obligors of the Escrowed Securities to make
timely payment thereon, except for the obligation to notify the
Issuer promptly of any such occurrence.
The recitals herein and in the proceedings authorizing the
Refunding Bonds shall be taken as the statements of the Issuer
and shall not be considered as made by, or imposing any
obligation or liability upon, the Escrow Agent.
The Escrow Agent is not a party to the proceedings
authorizing the Refunding Bonds or the Refunded Bonds and is not
responsible for nor bound by any of the provisions thereof
(except to the extent that the Escrow Agent may be a place of
payment and paying agent and/or a paying agent/registrar
therefor). In its capacity as Escrow Agent, it is agreed that the
Escrow Agent need look only to the terms and provisions of this
Agreement. It is further agreed that the Escrow Agent has no
duties or obligations other than those specifically set forth in
this Agreement and in the Securities Purchase Agreement.
The Escrow Agent makes no representations as to the value,
conditions or sufficiency of the Escrow Fund, or any part
thereof, or as to the title of the Issuer thereto, or as to the
security afforded thereby or hereby, and the Escrow Agent shall
not incur any liability or responsibility in respect to any of
such matters.
It is the intention of the parties hereto that the Escrow
Agent shall never be required to use or advance its own funds or
otherwise incur personal financial liability in the performance
of any of its duties or the exercise of any of its rights and
powers hereunder.
The Escrow Agent shall not be liable for any action taken or
neglected to be taken by it in good faith in any exercise of
reasonable care and believed by it to be within the discretion or
power conferred upon it by this Agreement, nor shall the Escrow
Agent be responsible for the consequences of any error of
judgment; and the Escrow Agent shall not be answerable except for
EXHIBIT "D"
Page 9 - Escrow Deposit Agreement
its own action, neglect or default, nor for any loss unless the
same shall have been through its negligence or want of good
faith.
Unless it is specifically otherwise provided herein, the
Escrow Agent has no duty to determine or inquire into the
happening or occurrence of any event or contingency or the
performance or failure of performance of the Issuer with respect
to arrangements or contracts with others, with the Escrow Agent's
sole duty hereunder being to safeguard the Escrow Fund, to
dispose of and deliver the same in accordance with this
Agreement. If, however, the Escrow Agent is called upon by the
terms of this Agreement to determine the occurrence of any event
or contingency, the Escrow Agent shall be obligated, in making
such determination, only to exercise reasonable care and
diligence, and in event of error in making such determination the
Escrow Agent shall be liable only for its own misconduct or its
negligence. In determining the occurrence of any such event or
contingency the Escrow Agent may request from the Issuer or any
other person such reasonable additional evidence as the Escrow
Agent in its discretion may deem necessary to determine any fact
relating to the occurrence of such event or contingency, and in
this connection may make inquiries of, and consult with, among
others, the Issuer at any time.
Section 8.3. Compensation.
The Issuer shall pay to the Escrow Agent fees for performing
the services hereunder and for the expenses incurred or to be
incurred by the Escrow Agent in the administration of this
Agreement pursuant to the terms of its fee schedule. The Escrow
Agent hereby agrees that in no event shall it ever assert any
claim or lien against the•Escrow Fund for any fees for its
services, whether regular or extraordinary, as Escrow Agent, or
in any other capacity, or for reimbursement for any of its
expenses as Escrow Agent or in any other capacity.
Section 8.4. Successor Escrow Agents.
If at any time the Escrow Agent or its legal successor or
successors should become unable, through operation or law or
otherwise, to act as escrow agent hereunder, or if its property
and affairs shall be taken under the control of any state or
federal court or administrative body because of insolvency or
bankruptcy or for any other reason, a vacancy shall forthwith
exist in the office of Escrow Agent hereunder. In such event the
Issuer, by appropriate action, promptly shall appoint an Escrow
Agent to fill such vacancy. If no successor Escrow Agent shall
EXHIBIT "D"
Page 10 - Escrow Deposit Agreement
have been appointed by the Issuer within 60 days, a successor may
be appointed by the owners of a majority in principal amount of
the Refunded Bonds then outstanding by an instrument or
instruments in writing filed with the Issuer, signed by such
owners or by their duly authorized attorneys -in -fact. If, in a
proper case, no appointment of a successor Escrow Agent shall be
made pursuant to the foregoing provisions of this section within
three months after a vacancy shall have occurred, the owner of
any Refunded Bond may apply to any court of competent
jurisdiction to appoint a successor Escrow Agent. Such court may
thereupon, after such notice, if any, as it may deem proper,
prescribe and appoint a successor Escrow Agent.
Any successor Escrow Agent shall be a corporation organized
and doing business under the laws of the United States or the
State of Idaho, authorized under such laws to exercise corporate
trust powers, having its principal office and place of business
in the State of Idaho, having a combined capital and surplus of
at least $25,000,000 and subject to the supervision or
examination by federal or state authority.
Any successor Escrow Agent shall execute, acknowledge and
deliver to the Issuer and the Escrow Agent an instrument
accepting such appointment hereunder, and the Escrow Agent shall
execute and deliver an instrument transferring to such successor
Escrow Agent, subject to the terms of this Agreement, all the
rights, powers and trusts of the Escrow Agent hereunder. Upon the
request of any such successor Escrow Agent, the Issuer shall
execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor Escrow
Agent all such rights, powers and duties.
The obligations assumed by the Escrow Agent pursuant to this
Agreement may be transferred by the Escrow Agent to a successor
Escrow Agent if (a) the requirements of this Section 8.4 are
satisfied; (b) the successor Escrow Agent has assumed all the
obligations of the Escrow Agent under this Agreement; and (c) all
of the Escrowed Securities and money held by the Escrow Agent
pursuant to this Agreement have been duly transferred to such
successor Escrow Agent.
Article 9. Miscellaneous
Section 9.1. Notice.
Any notice, authorization, request, or demand required or
permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when mailed by registered or
EXHIBIT "D"
Page 11 - Escrow Deposit Agreement
certified mail, postage prepaid addressed to the Issuer or the
Escrow Agent at the address shown on Exhibit A attached hereto.
The United States Post Office registered or certified mail
receipt showing delivery of the aforesaid shall be conclusive
evidence of the date and fact of delivery. Any party hereto may
change the address to which notices are to be delivered by giving
to the other parties not less than ten (10) days prior notice
thereof.
Section 9.2. Termination of Responsibilities.
Upon the taking of all the actions as described herein by
the Escrow Agent, the Escrow Agent shall have no further
obligations or responsibilities hereunder to the Issuer, the
owners of the Refunded Bonds or to any other person or persons in
connection with this Agreement.
Section 9.3. Binding Agreement.
This Agreement shall be binding upon the Issuer and the
Escrow Agent and their respective successors and legal
representatives, and shall inure solely to the benefit of the
owners of the Refunded Bonds, the Issuer, the Escrow Agent and
their respective successors and legal representatives.
Section 9.4. Severability.
In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
Agreement, but this Agreement shall be construed as if such
invalid or illegal or unenforceable provision had never been
contained herein.
Section 9.5. Idaho Law Governs.
This Agreement shall be governed exclusively by the
provisions hereof and by the applicable laws of the State of
Idaho.
Section 9.6. Time of the Essence.
Time shall be of the essence in the performance of
obligations from time to time imposed upon the Escrow Agent by
this Agreement.
EXHIBIT "D"
Page 12 - Escrow Deposit Agreement
Section 9.7. Amendments.
This Agreement shall not be amended except to cure any
ambiguity or formal defect or omission in this Agreement. No
amendment shall be effective unless the same shall be in writing
and signed by the parties thereto. No such amendment shall
adversely affect the rights of the holders of the Refunding Bonds
or the Refunded Bonds. No such amendment shall be made without
first receiving written confirmation from the rating agencies,
(if any) which have rated the Refunded Bonds that such
administrative changes will not result in a withdrawal or
reduction of its rating then assigned to the Refunded Bonds. If
this Agreement is amended, prior written notice and copies of the
proposed changes shall be given to the rating agencies which have
rated the Refunded Bonds.
EXECUTED as of the date first written above.
ATTEST:
City Clerk
[SEAL]
CITY OF McCALL
Valley County, Idaho
Mayor
U.S. BANK NATIONAL ASSOCIATION
as Escrow Agent
Authorized Officer
EXHIBIT "D"
Page 13 - Escrow Deposit Agreement
Issuer:
EXHIBIT A
Addresses of the Issuer and Escrow Agent
City of McCall
216 E. Park Street
McCall, Idaho 83638
Attention: City Treasurer
Escrow Agent:
U.S. Bank National Association
Corporate Trust Services
15 West South Temple, Suite 200
Salt Lake City, Utah 84101
Page 1 - Exhibit A
EXHIBIT B
Description of the Refunded Bonds
(1) City of McCall, Valley County, Idaho, Water Revenue
Bonds, Series 1994, dated September 1, 1994, maturing on and
after September 1, 2003.
(2) City of McCall, Valley County, Idaho, Parity Lien Water
Revenue Bonds, Series 1996, dated August 1, 1996, maturing on and
after March 1, 2004.
Page 1 - Exhibit 13
EXHIBIT C
Schedule of Principal and Interest Due on Refunded Bonds
1. Series 1994 Bonds
Date Payable
2. Series 1996 Bonds
Date Payable
Page 1 - Exhibit C
Principal Interest
Principal Interest
I. Cash $
EXHIBIT D
Escrow Deposit
II. Other Obligations
Type of
Security Maturity Date Par Amount Yield Total Cost
0
Page 1 - Exhibit D
APPENDIX A(1)
Notice of Redemption
City of McCall
Valley County, Idaho
Water Revenue Bonds, Series 1994
NOTICE IS HEREBY GIVEN that the City of McCall, Valley
County, Idaho, has called for redemption on September 1, 2006,
all of its then outstanding City of McCall Water Revenue Bonds,
Series 1994, maturing on and after September 1, 2007 (the
"Bonds").
The Bonds will be redeemed at a price of one hundred one
percent (1000) of their principal amount, plus interest accrued
to September 1, 2006. The redemption price of the Bonds is
payable on presentation and surrender of the Bonds at the office
of:
U.S. Bank National Association
« Paying Agent Address»
Interest on all Bonds or portions thereof which are redeemed
shall cease to accrue on September 1, 2006.
The following Bonds are being redeemed:
Bond Number Principal Amount Date of Maturity Cusip Number
By Order of the City of McCall, Valley County, Idaho
U.S. Bank National Association, as Paying Agent
Dated:
Page 1 - Appendix A(2)
Under the Interest and Dividend Tax Compliance Act of 1983,
payor may be required to withhold 31% of the redemption price
from any Bondowner who fails to provide to payor and certify
under penalties of perjury, a correct taxpayer identifying number
(employer identification number or social security number, as
appropriate) or an exemption certificate on or before the date
the Bonds are presented for payment. Bondowners who wish to
avoid the application of these provisions should submit a
completed Form W-9 when presenting their Bonds.
Page 2 - Appendix A(2)
APPENDIX A (2 )
Notice of Redemption
City of McCall
Valley County, Idaho
Parity Lien Water Revenue Bonds, Series 1996
NOTICE IS HEREBY GIVEN that the City of McCall, Valley
County, Idaho, has called for redemption on March 1, 2007, all of
its then outstanding City of McCall Parity Lien Water Revenue
Bonds, Series 1996, maturing on and after March 1, 2008 (the
"Bonds").
The Bonds will be redeemed at a price of one hundred one
percent (100%) of their principal amount, plus interest accrued
to March 1, 2007. The redemption price of the Bonds is payable
on presentation and surrender of the Bonds at the office of:
U.S. Bank National Association
« Paying Agent Address»
Interest on all Bonds or portions thereof which are redeemed
shall cease to accrue on March 1, 2007.
The following Bonds are being redeemed:
Bond Number Principal Amount Date of Maturity Cusip Number
By Order of the City of McCall, Valley County, Idaho
U.S. Bank National Association, as Paying Agent
Dated:
Page 3 - Appendix A(2)
Under the Interest and Dividend Tax Compliance Act of 1983,
payor may be required to withhold 31% of the redemption price
from any Bondowner who fails to provide to payor and certify
under penalties of perjury, a correct taxpayer identifying number
(employer identification number or social security number, as
appropriate) or an exemption certificate on or before the date
the Bonds are presented for payment. Bondowners who wish to
avoid the application of these provisions should submit a
completed Form W-9 when presenting their Bonds.
Page 4 - Appendix A(2)
INFORMATION REPORTING AGREEMENT
AGREEMENT executed as of the 15th day of July, 2003, by and
between the CITY OF McCALL, Valley County, Idaho (the "Issuer"),
and U.S. BANK NATIONAL ASSOCIATION, (the "Agent")
The parties agree:
FIRST: DEFINITIONS
For purposes of this Agreement, the following terms shall have
the following definitions:
"Agent" means the Corporate Trust Department of U.S. Bank
National Association.
"Agreement" means this Information Reporting Agreement between
the Issuer and the Agent.
"Annual Financial Information" means the Financial Statements
and other financial information and operating data set forth in
Paragraph THIRD of this Agreement.
"Bonds" means the City of McCall Water Revenue Refunding
Bonds, Series 2003, dated July 15, 2003, and issued in the initial
principal amount of $5,630,000 pursuant to the Ordinance.
"Financial Statements" means the annual financial statements
of the Issuer for the most current Fiscal Year, prepared in
accordance with generally accepted accounting principles applicable
to governmental units, as such principles may be changed from time
to time and as permitted by Idaho law, which may or may not be
audited; provided, that if and when audited financial statements
are prepared and available to the Issuer, such audited statements
will be provided.
"Fiscal Year" means the fiscal year of the Issuer, commencing
October 1 of each year and ending on September 30 of the following
year.
"Issuer" means the City of McCall, Valley County, Idaho, a
municipal corporation of the State of Idaho.
"Material Event" means any of the events listed in paragraph
FOURTH of this Agreement.
"MSRB" means the Municipal Securities Rulemaking Board,
Washington, D.C.
Page 1 - Exhibit "E"
"NRMSIR" means a nationally recognized municipal securities
information repository designated by the SEC.
"Ordinance" means Ordinance No. 779 of the Issuer, adopted on
June 26, 2003, pursuant to which the Bonds were sold.
"Owners" means the beneficial owners, registered owners, and
holders of the Bonds.
"Repository" means a NRMSIR or SID.
"Rule" means SEC Rule 15c2-12(b)(5), as amended or interpreted
by the SEC.
"SEC" means the U.S. Securities and Exchange Commission.
"SID" means the state information depository for the State of
Idaho designated by the SEC, if any.
SECOND: PURPOSE
This Agreement is being executed for the benefit of the Owners
of the Bonds in accordance with the Rule. The Agent hereby accepts
appointment, pursuant to the Ordinance, as agent of the Issuer fro
purposes of the Rule.
THIRD: PROVISION OF ANNUAL FINANCIAL INFORMATION
The Issuer, through the Agent, shall file annually, with each
Repository, not later than 180 days following the end of each
Fiscal Year of the Issuer, beginning with the Fiscal Year which
ends on September 30, 2003, the following financial information and
operating data.
1. Financial Statements of the Issuer.
2. A copy of the duly -adopted budget for.the then -current
fiscal year of the City.
3. A statement of authorized, issued and outstanding bond
debt secured by the Net Revenues of the Water System.
4. Debt service requirements and coverage ratios similar to
the information contained in the Official Statementunder
the heading "City of McCall Water Revenue Fund Historic
Coverage."
5. List of 10 largest customers billed by the City.
6. Current rates and fees charged and collected by the City
in connection with the operation of the water System,
similar to the information contained in the Official
Page 2 - Exhibit "E"
Statement under the heading "Water Service Rates and
Charges."
7. Information on Water Treatment Plant capacity and water
demand similar to the information contained in the
Official Statement under the heading "Water Treatment
Plant & City of McCall - Water Demand Table."
If the Issuer fails to provide the required Annual Financial
Information, the Agent shall provide notice of such failure to each
NRMSIR or to the MSRB and to the SID.
The Issuer reserves the right to modify from time to time the
specific types of information provided, or the format of the
presentation of such information, in a manner consistent with the
Rule.
FOURTH: REPORTING OF MATERIAL EVENTS
The Issuer shall provide, through the Agent, in a timely
manner, notice of the occurrence of any of the following events, if
material, with respect to the Bonds:
1. Principal and interest payment delinquencies on the
Bonds;
2. Nonpayment related defaults under the Resolution;
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 or events affecting the tax-exempt
status of the Bonds;
7. Modifications to rights of Bondholders;
8. Bond calls;
9. Defeasances;
10. Release, substitution or sale of property securing
repayment of the Bonds; and
11. Rating changes.
Page 3 - Exhibit "E"
Whenever the Issuer obtains knowledge of the occurrence of a
Material Event, the Issuer shall, as soon as possible, determine
whether such event would constitute material information for Owners
of the Bonds; provided, that any event listed under 8, 9, or 11
above will always be deemed to be material.
If the Issuer determines that knowledge of the occurrence of a
Material Event would be material, the Issuer shall promptly file a
notice of such occurrence with each NRMSIR or with the MSRB and
with the SID.
FIFTH: AMENDMENTS
This Agreement may be amended only if the Issuer receives an
opinion of independent bond counsel to the effect that:
1. such amendment is made on connection with a change in
circumstances that arises from a change in legal
requirements, a change in law, or a change in the types
of activities in which the Issuer is engaged;
2. this Agreement, as so amended, would have complied with
the requirements of the Rule at the time of the primary
offering of the Bonds, after taking into account any
amendments or interpretations of the Rule as well as any
change in circumstances; and
3. such amendment does not materially impair the interest of
the Owners of the Bonds.
If the amendment results in a change of the annual financial
information and operating data required to be reported pursuant to
.this Agreement, the first annual report that contains the amended
operating data or financial information shall explain, in narrative
form, the reasons for the amendment and the impact of such change
in the type of operating data or financial information being
provided. If the amendment involves a change in the accounting
principles to be followed in preparing financial statements, the
first annual report shall present a comparison between the
financial statements or information based on the new accounting
principles and those prepared based on the former accounting
principles. Further, if the annual financial information required
to be provided in the annual report can no longer be generated
because the operations to which it related have been materially
changed or discontinued, a statement to that effect shall be
included in the first annual report that does not include such
information.
SIXTH: TERMINATION
The Issuer reserves the right to terminate its obligation to
provide Annual Financial Information and notices of Material
Page 4 - Exhibit "E"
Events, as set forth above, if and when the Issuer no longer
remains an "obligated person" with respect to the Bonds within the
meaning of the Rule.
SEVENTH: REMEDIES
In the event of a failure of the Issuer to comply with any
provision of this Agreement, the Owner of any Bond may take such
actions as may be necessary and appropriate, including seeking
specific performance by court order, to cause the Issuer to comply
with its obligations under this Agreement. A default under this
disclosure Agreement shall not be deemed to constitute a default
under the Resolution, and the sole remedy under this Agreement in
the event of any failure of the Issuer to comply with this
Agreement shall be an action to compel performance.
EIGHTH: ADDITIONAL INFORMATION
Nothing in this Agreement shall be deemed to prevent the
Issuer from disseminating any other information, using the means of
dissemination set forth in this Agreement 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 which is required by this Agreement. If the Issuer chooses to
include any information in any annual report or notice of
occurrence of a Material Event in addition to that which is
specifically required by this Agreement, the Issuer shall have no
obligation under this Agreement to update such information or
include it in any future annual report or notice of occurrence of a
Material Event.
NINTH: BENEFICIARIES
This Agreement shall inure solely for the benefit of the
Issuer and the Owners of the Bonds, and shall create no rights in
any other person or entities.
Page 5 - Exhibit "E"
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
ATTEST:
CITY OF McCALL
Valley County, Idaho
By
Mayor
City Clerk
U.S. BANK NATIONAL ASSOCIATION
By
Corporate Trust Officer
Page 6 - Exhibit "E"
SUMMARY OF
ORDINANCE NO. 779
AN ORDINANCE OF THE CITY OF McCALL, IDAHO, AUTHORIZING AND
PROVIDING FOR THE ISSUANCE OF WATER REVENUE REFUNDING BONDS,
SERIES 2003, IN THE PRINCIPAL AMOUNT OF $5,630,000, FOR THE
PURPOSE OF CURRENTLY REFUNDING THE CITY'S OUTSTANDING WATER
REVENUE BONDS, SERIES 1994, AND ITS PARITY LIEN WATER REVENUE
BONDS, SERIES 1996; DESCRIBING THE BONDS; SPECIFYING THE DATE,
FORM, MATURITIES, REGISTRATION, AND AUTHENTICATION OF THE BONDS;
FIXING THE RATES OF INTEREST ON THE BONDS; PROVIDING FOR THE
APPLICATION FO BOND PROCEEDS; ESTABLISHING FUNDS AND ACCOUNTS;
PROVIDING FOR THE COLLECTION AND DISPOSITION OF REVENUES;
PROVIDING COVENANTS RELATING TO THE BONDS AND TO THE TAX-EXEMPT
STATUS OF THE INTEREST ON THE BONDS; PROVIDING FOR THE SALE AND
DELIVERY OF THE BONDS; PROVIDING FOR RELATED MATTERS; AND
PROVIDING AN EFFECTIVE DATE
A summary of the principal provisions of Ordinance No. 779
of the City of McCall, Valley County, Idaho, adopted on June 26,
2003, is as follows:
Section 1: Defines the terms and phrases used in said
Ordinance.
Section 2: Finds that the City's outstanding Water
Revenue Bonds, Series 1994 and its outstanding Parity Lien Water
Revenue Bonds, Series 1996, can be refunded at a savings to the
City and its water ratepayers.
Section 3: Describes the City of McCall Water Revenue
Refunding Bonds, Series 2003 (the "Bonds"), and provides for the
Book -Entry -Only System for the Bonds.
Section 4: Provides for the place and manner of payment
of the Bonds.
Section 5: Provides for the manner and method of
execution of Certificated Bonds.
Section 6: Appoints U.S. Bank National Association as
Trustee for the Bonds.
Section 7:
Bonds.
Section 8:
Bonds.
Provides for
Provides for
transfer and exchange of the
redemption and defeasance of the
Section 9: Provides for water rates and charges,
provides that the City shall establish and collect rates
Page 1 - EXHIBIT "F"
and
and
a
charges sufficient to provide Net Revenues equal to not less than
1.20 times the annual debt service on the Bonds and any other
obligations payable from the Net Revenues of the water system.
Section 10: Pledges the Net Revenues of the water system
for the payment of the Bonds.
Section 11: Establishes funds and accounts and provided
for the redemption of the Refunded Bonds.
Section 12: Establishes the "City of McCall Water Revenue
Fund."
Section 13: Establishes the "City of McCall Water Revenue
Refunding Bond Fund."
Section 14: Establishes the "City of McCall Water Revenue
Refunding Bonds Debt Service Reserve Fund."
Section 15: Provides for the disposition of surplus
funds.
Section 16: Establishes the conditions of and limitations
on the issuance of additional bonds or parity obligations.
Section 17: Provides for the investment of funds.
Section 18: Provides certain general covenants
City with the registered owners of the Bonds.
Section 19: Provides certain special covenants
City with respect to the tax-exempt status of interest
Bonds.
Section 20: Authorizes the
Northwest Securities Corporation.
Section 21: Provides for
Ordinance and provides that the
ordinances.
of the
of the
on the
sale of the Bonds to Seattle -
manner of amending this
City may adopt supplemental
Section 22: Recites that the Bonds are
the Idaho Revenue Bond Act.
Section 23: Provides for remedies in
issued pursuant to
case of default.
Section 24: States that the Ordinance constitutes a
contract with the registered owners and beneficial owners of the
Bonds.
Page 2 - EXHIBIT "F"
Section 25: Provides for severability.
Section 26: Repeals prior inconsistent ordinances, to the
extent of any inconsistency.
Section
insurance to
Section
execute any
the Bonds.
27: Provides for
insure the payment of
28: Authorizes the
additional documents
a policy of municipal bond
the Bonds
Mayor, Clerk, and Treasurer to
necessary to sell and deliver
Section 29: Provides for the publication of the Ordinance
or a summary thereof and the effective date of the Ordinance.
The full text of Ordinance No. 779 is available at City Hall
and will be provided to any citizen upon personal request during
normal office hours.
DATED as of the 26th day of June, 2003.
CITY OF MCCALL
Valley County, Idaho
Mayor
ATTEST:
City Clerk
Page 3 - EXHIBIT "F"
CERTIFICATION OF CITY ATTORNEY
I, the undersigned City Attorney for and legal advisor to
the City of McCall, Idaho, hereby certify that I have read the
attached summary of Ordinance No. 779 of the City of McCall and
that the same is true and complete and provides adequate notice
to the public of the contents of said Ordinance.
DATED as of the 26th day of June, 2003.
McCall City Attorney
Page 4 - EXHIBIT "F"
3,
(f)
(g)
(c)
EXHIBIT "G"
Page 1 of 3
ORDINANCE REQUIREMENTS
The Ordinance shall incorporate the following requirements either in one section or article entitled "Provisions Relating to
Bond Insurance" (or the like) the provisions of which section or article shall be stated in the Ordinance to govern,
notwithstanding anything to the contrary set forth in the Ordinance, or individually in the appropriate sections:
(a)
"Insurance Policy" shall be defined as follows: "the insurance policy issued by the Insurer guaranteeing the
scheduled payment of principal of and interest on the Bonds when due". "Insurer" shall be defined as follows:
"Financial Security Assurance Inc., a New York stock insurance company, or any successor thereto or assignee
thereof'.
(b) The Insurer shall be deemed to be the sole holder of the Insured Bonds for the purpose of exercising any voting
right or privilege or giving any consent or direction or taking any other action that the holders of the Bonds
insured by it are entitled to take pursuant Section 23 of the Ordinance (pertaining to defaults and remedies) and
Section 6 of the Ordinance (pertaining to the duties and obligations of the Trustee).
If acceleration is permitted under the Ordinance, the maturity of Bonds insured by the Insurer shall not be
accelerated without the consent of the Insurer.
(d) The Insurer shall be included as a third party beneficiary to the Ordinance.
(e) No modification or amendment to the Ordinance made pursuant to Section 21A(2) or Section 21B may become
effective except upon obtaining the prior written consent of the Insurer. Copies of any modification or
amendment to the Ordinance shall be sent to Standard & Poor's Credit Market Services and Moody's Investors
Service, Inc. at least 10 days prior to the effective date thereof.
The rights granted to the Insurer under the Ordinance or any other Related Document to request, consent to or
direct any action are rights granted to the Insurer in consideration of its issuance of the Insurance Policy. Any
exercise by the Insurer of such rights is merely an exercise of the Insurer's contractual rights and shall not be
construed or deemed to be taken for the benefit or on behalf of the Bondholders nor does such action evidence
any position of the Insurer, positive or negative, as to whether Bondholder consent is required in addition to
consent of the Insurer.
Only (1) cash, (2) non -callable direct obligations of the United States of America ("Treasuries"), (3) evidences of
ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or
trust company as custodian, under which the owner of the investment is the real party in interest and has the
right to proceed directly and individually against the obligor and the underlying Treasuries are not available to
any person claiming through the custodian or to whom the custodian may be obligated, (4) pre -refunded
municipal obligations rated "AAA" and "Aaa" by S&P and Moody's, respectively or (5) securities eligible for
"AAA" defeasance under then existing criteria of S & P or any combination thereof, shall be authorized to be
used to effect defeasance of the Bonds unless the Insurer otherwise approves.
To accomplish defeasance the Issuer shall cause to be delivered (i) a report of an independent firm of nationally
recognized certified public accountants or such other accountant as shall be acceptable to the Insurer
("Accountant") verifying the sufficiency of the escrow established to pay the Bonds in full on the maturity or
redemption date ("Verification"), (ii) an Escrow Deposit Agreement (which shall be acceptable in form and
substance to the Insurer), (iii) an opinion of nationally recognized bond counsel to the effect that the Bonds are
no longer "Outstanding" under the Ordinance and (iv) if there is a Trustee for the Bonds a certificate of
discharge of the Trustee with respect to the Bonds; each Verification and defeasance opinion shall be
acceptable in form and substance, and addressed, to the Issuer, the Trustee and the Insurer. The Insurer shall
be provided with final drafts of the above -referenced documentation not less than five business days prior to the
funding of the escrow.
Bonds shall be deemed "Outstanding" under the Ordinance unless and until they are in fact paid and retired or
the above criteria are met.
(h) Amounts paid by the Insurer under the Insurance Policy shall not be deemed paid for purposes of the Ordinance
and shall remain Outstanding and continue to be due and owing until paid by the Issuer in accordance with the
Ordinance. The Ordinance shall not be discharged unless all amounts due or to become due to the Insurer
have been paid in full or duly provided for.
L:ILEGAI MUNISISTATES11D164707 G.doc
Page 2 of 3
Each of the Issuer and the Trustee covenant and agree to take such action (including, as applicable, filing of
UCC financing statements and continuations thereof) as is necessary from time to time to perfect or otherwise
preserve the priority of the pledge of Trust Estate under applicable law.
Claims Upon the Insurance Policy and Payments by and to the Insurer.
If, on the third Business Day prior to the related scheduled interest payment date .or principal payment date
("Payment Date") there is not on deposit with the Trustee, after making all transfers and deposits required under
the Ordinance, moneys sufficient to pay the principal of and interest on the Bonds due on such Payment Date,
the Trustee shall give notice to the Bond Insurer and to its designated agent (if any) (the "Insurer's Fiscal
Agent") by telephone or telecopy of the amount of such deficiency by 12:00 noon, New York City time, on such
Business Day. If, on the second Business Day prior to the related Payment Date, there continues to be a
deficiency in the amount available to pay the principal of and interest on the Bonds due on such Payment Date,
the Trustee shall make a claim under the Insurance Policy and give notice to the Insurer and the Insurer's Fiscal
Agent (if any) by telephone of the amount of such deficiency, and the allocation of such deficiency between the
amount required to pay interest on the Bonds and the amount required to pay principal of the Bonds, confirmed
in writing to the Insurer and the Insurer's Fiscal Agent by 12:00 noon, New York City time, on such second
Business Day by filling in the form of Notice of Claim and Certificate delivered with the Insurance Policy.
In the event the claim to be made is for a mandatory sinking fund redemption installment, upon receipt of the
moneys due, the Trustee shall authenticate and deliver to affected Bondholders who surrender their Bonds a
new Bond or Bonds in an aggregate principal amount equal to the unredeemed portion of the Bond surrendered.
The Trustee shall designate any portion of payment of principal on Bonds paid by the Insurer, whether by virtue
of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in
the principal amount of Bonds registered to the then current Bondholder, whether DTC or its nominee or
otherwise, and shall issue a replacement Bond to the Insurer, registered in the name of Financial Security
Assurance Inc., in a principal amount equal to the amount of principal so paid (without regard to authorized
denominations); provided that the Trustee's failure to so designate any payment or issue any replacement Bond
shall have no effect on the amount of principal or interest payable by the Issuer on any Bond or the subrogation
rights of the Insurer.
The Trustee shall keep a complete and accurate record of all funds deposited by the Insurer into the Policy
Payments Account (defined below) and the allocation of such funds to payment of interest on and principal paid
in respect of any Bond. The Insurer shall have the right to inspect such records at reasonable times upon
reasonable notice to the Trustee.
Upon payment of a claim under the Insurance Policy the Trustee shall establish a separate special purpose trust
account for the benefit of Bondholders referred to herein as the "Policy Payments Account" and over which the
Trustee shall have exclusive control and sole right of withdrawal. The Trustee shall receive any amount paid
under the Insurance Policy in trust on behalf of Bondholders and shall deposit any such amount in the Policy
Payments Account and distribute such amount only for purposes of making the payments for which a claim was
made. Such amounts shall be disbursed by the Trustee to Bondholders in the same manner as principal and
interest payments are to be made with respect to the Bonds under the sections hereof regarding payment of
Bonds. It shall not be necessary for such payments to be made by checks or wire transfers separate from the
check or wire transfer used to pay debt service with other funds available to make such payments.
Notwithstanding anything to the contrary otherwise set forth in the Ordinance, and to the extent permitted by law,
in the event amounts paid under the Insurance Policy are applied to claims for payment of principal of or interest
on the Bonds, interest on such principal of and interest on such Bonds shall accrue and be payable from the
date of such payment at the greater of (i) the per annum rate of interest, publicly announced from time to time by
JPMorgan Chase Bank or its successor at its principal office in the City of New York, as its prime or base
lending rate plus 3%, and (ii) the then applicable rate of interest on the Bonds provided that in no event shall
such rate exceed the maximum rate permissible under applicable usury or similar laws limiting interest rates.
Funds held in the Policy Payments Account shall not be invested by the Trustee and may not be applied to
satisfy any costs, expenses or liabilities of the Trustee. Any funds remaining in the Policy Payments Account
following a Bond payment date shall promptly be remitted to the Insurer.
(k) The Insurer shall, to the extent it makes any payment of principal of (or, in the case of Capital Appreciation
Bonds, accreted value) or interest on the Bonds, become subrogated to the rights of the recipients of such
payments in accordance with the terms of the Insurance Policy. The obligations to the Insurer shall survive
discharge or termination of the Related Documents.
LALEGALIMUNISISTATESIID164707 G.doc
p)
(m)
Page 3 of 3
The Issuer shall pay or reimburse the Insurer any and all charges, fees, costs and expenses which the Insurer
may reasonably pay or incur in connection with (i) the administration, enforcement, defense or preservation of
any rights or security in the Ordinance; (ii) the pursuit of any remedies under the Ordinance or otherwise
afforded by law or equity, (iii) any amendment, waiver or other action with respect to, or related to, the
Ordinance whether or not executed or completed, (iv) the violation by the Issuer of any law, rule or regulation, or
any judgment, order or decree applicable to it or (v) any litigation or other dispute in connection with the
Ordinance or the transactions contemplated thereby, other than amounts resulting from the failure of the Insurer
to honor its obligations under the Insurance Policy.
The Insurer shall be entitled to pay principal (or, in the case of Capital Appreciation Bonds, accreted value) or
interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the
Issuer (as such terms are defined in the Insurance Policy) and any amounts due on the Bonds as a result of
acceleration of the maturity thereof in accordance with the Ordinance, whether or not the Insurer has received a
Notice of Nonpayment (as such terms are defined in the Insurance Policy) or a claim upon the Insurance Policy.
(n) The notice address of the Insurer is: Financial Security Assurance Inc., 350 Park Avenue, New York, New York
10022-6022, Attention: Managing Director — Surveillance, Re: Policy No. , Telephone: (212) 826-0100;
Telecopier: (212) 339-3556. In each case in which notice or other communication refers to an Event of Default,
then a copy of such notice or other communication shall also be sent to the attention of the General Counsel
and shall be marked to indicate "URGENT MATERIAL ENCLOSED."
(o) The Insurer shall be provided with the following information:
c)
Annual audited financial statements within 150 days after the end of the Issuer's fiscal
year (together with a certification of the Issuer that it is not aware of any default or Event
of Default under the Ordinance), and the Issuer's annual budget within 30 days after the
approval thereof together with such other information, data or reports as the Insurer shall
reasonably request from time to time;
(ii) Notice of any draw upon the Debt Service Reserve Fund within two Business Days after
knowledge thereof other than (i) withdrawals of amounts in excess of the Debt Service
Reserve Requirement and (ii) withdrawals in connection with a refunding of Bonds;
(iii) Notice of any default known to the Trustee [or the Issuer] within five Business Days after
knowledge thereof;
(iv) Prior notice of the advance refunding or redemption of any of the Bonds, including the
principal amount, maturities and CUSIP numbers thereof;
(v) Notice of the resignation or removal of the Trustee, Paying Agent and Bond Registrar and
the appointment of, and acceptance of duties by, any successor thereto;
(vi) Notice of the commencement of any proceeding by or against the Issuer or the Obligor
commenced under the United States Bankruptcy Code or any other applicable
bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency
Proceeding");
(vii) Notice of the making of any claim in connection with any Insolvency Proceeding seeking
the avoidance as a preferential transfer of any payment of principal of, or interest on, the
Bonds;
(viii) A full original transcript of all proceedings relating to the execution of any amendment or
supplement to the Related Documents; and
(ix) All reports, notices and correspondence to be delivered to Bondholders under the terms
of the Related Documents.
LALEGAUMUNISISTATESMEA64707 G.doc
Publisher's Affidavit of Publication
STATE OF IDAHO
.SS
County of Valley
I, Carol J. Wright, being duly sworn and say, I am the receptionist of
The Star -News, a weekly newspaper published at McCall, in the County of
Valley, State of Idaho; that said newspaper is in general circulation in the
county of afore said and is a legal newspaper; that the PUBLIC NOTICE, a
copy of which is enclosed hereto and is a part hereof, was published in said
newspaper once a week for a period of one week in the regular and entire
issue of every number there of during the period of time of publication, and was
published in the newspaper proper and not in a supplement; and that publica-
tion of such notice began August 7, 2003 and ended August 7, 2003.
Subscribed and s(audrn before%he this the 7th day of August, 2003.
STATE OF IDAHO
COUNTY OF VALLEY
d VeC^
On this 7th day of August, in the year of 2003, before me, a Notary
Public, personally appeared Carol J. Wright, known or identified to me to be the
person whose name subscribed to the within instrument, and being by me first
duly sworn, declared that the statements therein are true, and acknowledged to,
me that she executed the same.
Tom Grote
Notary Public for Idaho
Residing at McCall, Idaho
Commission Expires 2/8/06
ORDINANCE NO.'779:
N ORDINANCE OF`THE CITY: OF:,
MCCALI IDAHO AUTHORIZING AND .
PROVIDING FOR THE ISSUANCE :OF
WATER REVENUE REFUNDING BONDS; :
FRIES 2003A.N. THE PRINCIPAL
UNT OF $5 650,000 FOR THE PUR= •
OF CURRENTLY REFUNDING THE
S .OUTSTANDING WATER REV
j :ENUE BONDS SERIES 1994 AND ITS
I ARITYLIEN:WATERREVENUEBONDS ,
SERIES 1996 ,QESCRIBING TI-IE BONDS
� SI'1rCIFYfl��,,'T�IE DATE FORM MATU
RTPIES itOI,SrTIMT /0ND AUT,
T1ATION OF•THE:BOND$; FIXINCx'.
RAZES OF INTEREST ON THE BONDS,
t PROVIDINGFOR:THEAPPLICATIONFO••
134)Nt) :PROCEEDS ESTABLISHING,
1.21PAINDS AND. ACCOUNTS;;.PROVIDING
FOX THE COLLECTION AND `DISPOSI= .
TION OF REVENUES;,PROVIDING COY, . ,
WANTS RELATING TO THE BONDS.AND '
:THE TAX-EXEMPT STATUS 'OF -THE ,
11 ,EREST ON THE BONDS;TROVIDINO '
l'�R THE.SALE AND DELIVERY OF THE
;0NDS;. PROVIDING .FOR RELATED •
llfATTERS;;AND PROVIDING_AN E1 iEC - .
TIVE DATE
s A summaryof the; principal provisions of
j Ordinance No 779 bf the City of McCall;
Valley County Idaho; adopted on June 26
2003 is as follows.
Section 1` Defines the terms and phrases
used m said::Ordinanee .: ,
Section 2'.. _Finds that the City.s outstand-
rng Water:Revenue Bonds; Series 1994 and its
loutstandingParity,Lien WaterRevenueBonds;
Series 1996, canbe refunded at asavmgs:to the.
City and its Water ratepayers
Section 3 Describes the City of McCall, •
Water RevenueRefundirig Bonds=Serres 2003 ..'
:'(the` `(15onds"); and providesjfop the, Bopk-
IEntryOnly System for the Fonds
Section 4.:. Provides for. the.place:•and .
t_%^s^ner of'paymentof the Bonds
,ection 5... Provides for the. manner'.and'
iod of execption.of_Certificateillionds.
�ectioi 6.'.Appoints U:S.Gank-National .
Association ;as Trustee for the Bonds..
`.:Section 7:' Provides for 'transfer and'ex-
%change of die'Eona&
:Section 8: Provides for':feeleiitption-and
defeasanee of•the Beads: '`'
Section, 9:: Provides :for 'water .rates and
:charges; and provides dietthe CityshalIestab=
fish and 'collect rates.and charges. sufficient to
;• `provide Net Revenues equal to not less than.
1 20 times the annual debtservice Ori;the Bonds
sand any'otherobligations payable from the Net
Revenges of, the water system;' ,,:. , 1- •
"= Section 10: Pledges the;NetRevenues of
the water system for the payment of the Bonds:' ,j
Section 11: Establishes furidsatidaccounts
.and •provided%for.thempt e:redion of 'die ;Re-
,
,funded:Bonds..• • .. • •
Section.12: Establishes the ”,City of MeCall
Water Re4enue Fund:'' . ••
Section 13: Establishes the "City ofMcCa11 .
Water Revenue Refunding Bond Fund!'
• Section 14:• Establishes the._City of McCall .
Water. Revenue .Refunding .fonds. Debt:Ser-
j.avieeReserve Fund.; .
I. Section 15; Provides for the disposition of
.'•••surplus funds.
Section 16;,Bstablishes the .conditions of
and limitations on the,isstiance of additional
bonds or parity obligations..
.
Section:17: Provides for theihvestnrentof
}f
,`. unds.. Section IS: `Provides`certain general cov-
enants of the Citywith the registered owners of
the Bonds. ,..,
Section 19:. Provides certainspeeial cov-
mi.Of'the City With;.respeet•to.the•tax-_
mpt status of interest on the Bonds
Section: 20 Authonzes`.the Sale of. the
Bonds to:Seattle-NothwestSecunties Corpo-
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