New Franklin Ordinance 782A: Waterworks and sewer revenue bonds (Articles I to V)

ORDINANCE NO. 182

OF

NEW FRANKLIN, MISSOURI

PASSED DECEMBER 29, 2014

AUTHORIZING

$1,353,000

COMBINED WATERWORKS AND SEWERAGE SYSTEM REVENUE BOND,

SERIES C

And

$121,000

COMBINED WATERWORKS AND SEWERAGE SYSTEM REVENUE BOND,

SERIES D

601996.60007

ORDINANCE

INDEX

Title.

Recitals...

Page

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Section 101.

Section 201.

Section 202.

Section 203.

Section 204.

Section 205.

Section 206.

Section 207.

Section 208.

Section 301.

Section 302.

Section 303.

ARTICLE I

DEFINITIONS

Definitions of Words and Terms.

ARTICLE II

AUTHORIZATION OF BONDS

Authorization of Bonds.

Description of Bonds.

Designation of Paying Agent.....

Method and Place of Payment of Bonds

Registration, Transfer and Exchange of Bonds...

Execution, Authentication and Delivery of Bonds

Mutilated, Destroyed, Lost and Stolen Bonds...

Cancellation and Destruction of Bonds Upon Payment..

ARTICLE I

REDEMPTION OF BONDS

Redemption of Bonds...

Instructions to Redeem Bonds..

Notice and Effect of Call for Redemption..

ARTICLE IV

SECURITY FOR BONDS

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Section 401.

Security for Bonds.....

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Section 501.

Section 502.

Section 503.

ARTICLE Y

CREATION AND RATIFICATION OF FUNDS AND ACCOUNTS; DEPOSIT

AND APPLICATION OF BOND PROCEEDS

Establishment of Funds and Accounts...

Deposit of Bond Proceeds....

Application of Moneys in the Project Fund

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ARTICLE VI

APPLICATION OF REVENUES

Section 601. Revenue Fund...

Section 602.

Application of Moneys in Funds and Accounts....

Section 603.

Transfer of Funds to Paying Agent.

Section 604.

Payments Due on Saturdays, Sundays and Holidays..

Section 605.

Nonpresentment of Bonds..

ARTICLE VII

DEPOSIT AND INVESTMENT OF MONEYS

Section 701.

Deposit and Investment of Moneys.

ARTICLE VIL

GENERAL COVENANTS AND PROVISIONS

Section 801.

Section 802.

Section 803.

Section 804.

Section 805.

Section 806.

Section 807.

Section 8C8.

Section 809.

Section 810.

Section 811.

Section 812.

Section 813.

Section 814.

Corporate Existence; Efficient and Economical Operation; Sewerage

System Connections to be Required.

Rate Covenant..

Reasonable Charges for all Services.

Restrictions on Mortgage or Sale of System

Insurance; Fidelity Bond Coverage..

Books, Records and Accounts

Annual Budget..

Right of Inspection

Performance of Duties and Covenants..

Consultant's Report..

Parity Bond Certification...

Tax Covenants

Refinanced Bonds - When Required

ARTICLE IX

ADDITIONAL BONDS AND OBLIGATIONS

Section 901.

Section 902.

Section 903.

Section 904.

Section 905.

Senior Lien Bonds...

Parity Lien Bonds and Other Obligations.

Junior Lien Bonds and Other Obligations

Refunding Bonds......

Consent of Purchaser Required For Additional Bonds..

ARTICLE X

DEFAULT AND REMEDIES

Section 1001. Acceleration of Maturity Upon Default.

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Section 1002.

Section 1003.

Section 1004.

Section 1005.

Other Remedies..

Limities On Ripels of Bondoners.

No Obligation to Levy Taxes....

ARTICLE XI

DEFEASANCE

Section 1101. Defeasance.

Section 1201.

Section 1202.

Section 1203.

Section 1204.

Section 1205.

Section 1206.

Section 1207.

ARTICLE XII

MISCELLANEOUS PROVISIONS

Amendments...

Notices, Consents and Other Instruments by Bondowners.

Further Authority

Severability..

Governing Law.

Effective Date.

Electronic Transactions.

Exhibit A - Form of Bond

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WHEREAS, plans and specifications for said Project and an estimate of the cost thereof have

been prepared and made by the City's engineers and the same are hereby accepted and approved and are

on file in the office of the City Clerk; and

WHEREAS, the City does not have outstanding any bonds or other obligations payable from the

income and revenues derived from the ownership and operation of the System save and except the

following:

Issue Name

Combined Waterworks and Sewerage System Revenue

Bonds (State Revolving Fund Program) Series 1999B

Combined Waterworks and Sewerage System Refunding

Revenue Bonds, Series 2012

Date

of Bonds

06/01/1999

Amount

Originally Issued

$ 505,000

04/13/2012

407,000

said Series 1999B Bonds and Series 2012 Bonds being hereinafter referred to as the "Previously Issued

Parity Bonds:" and

WHEREAS, it is hereby found and determined that it is necessary and advisable and in the best

interest of the City and of its inhabitants at this time to authorize the issuance and delivery of revenue

bonds pursuant to the Act as herein provided to provide funds for the Project;

NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF ALDERMEN OF THE

CITY OF NEW FRANKLIN, MISSOURI, AS FOLLOWS:

ARTICLE I

DEFINITIONS

Section 101. Definitions of Words and Terms. In addition to words and terms defined

elsewhere herein, the following capitalized words and terms as used in this Ordinance shall have the

following meanings:

"Act" means Chapter 250, RSMo.

"Average Annual Debt Service" means the average of the Debt Service Requirements for the

then current and all future fiscal years.

"Bond Counsel" means Gilmore & Bell, P.C., Kansas City, Missouri, or other attorney or firm of

attorneys with a nationally recognized standing in the field of municipal bond financing selected by the

"Bond Payment Date" means any date on which principal of or interest on any Bond is payable

at the Maturity thereof or on any Interest Payment Date.

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"Bond Register" means the books for the registration, transfer and exchange of Bonds kept at the

office of the Paying Agent.

"Bondowner" or "Registered Owner" when used with respect to any Bond means the Person in

whose name such Bond is registered on the Bond Register.

"Bonds" means the Combined Waterworks and Sewerage System Revenue Bonds, Series C and

Series D, of the City, in the aggregate principal amount of $1,474,000, consisting of the Series C Bond in

the principal amount of $1,353,000 and the Series D Bond in the principal amount of $121,000,

authorized and issued pursuant to this Ordinance.

"Business Day" means a day, other than a Saturday, Sunday or holiday, on which the Paying

Agent is scheduled in the normal course of its operations to be open to the public for conduct of its

operations.

"City" means the city of New Franklin, Missouri, and any successors or assigns.

"Code" means the Internal Revenue Code of 1986, as amended, and the applicable regulations of

the Treasury Department proposed or promulgated thereunder.

"Consultant" means an independent engineer or engineering firm having a favorable reputation

for skill and experience in the construction, financing and operation of public utilities and the preparation

of management studies and financial feasibility studies in connection therewith, selected by the City for

the purpose of carrying out the duties imposed on the Consultant by this Ordinance.

"Debt Service

Account" means the Debt Service Account for Combined Waterworks and

Sewerage System Revenue Bonds, Series C and Series D, created by Section 501 hereof.

"Debt Service Requirements" means the aggregate principal payments (whether at maturity or

pursuant to scheduled mandatory sinking fund redemption requirements) and net interest or interest-like

payments (net of any Subsidy Payments) on all System Revenue Bonds for the period of time for which

calculated; provided, however, that for purposes of calculating such amount, principal and interest shall

be excluded from the determination of Debt Service Requirements to the extent that such principal or

interest is payable from amounts deposited in trust, escrowed or otherwise set aside for the payment

thereof with a commercial bank or trust company located in the State of Missouri and having full trust

powers.

"Debt Service Reserve Account" means the Debt Service Reserve Account for Combined

Waterworks and Sewerage System Revenue Bonds, Series C and Series D, created by Section 501 hereof.

"Debt Service Reserve Requirement" means the sum of $68,880.

"Defaulted Interest" means interest on any Bond which is payable but not paid on any Interest

Payment Date.

"Defeasance Obligations" means any of the following obligations:

(a) United States Government Obligations that are not subject to redemption in

advance of their maturity dates; or

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obligations of any state or political subdivision of any state, the interest on which

is excluded from gross income for federal income tax purposes and which meet the following

conditions:

the obligations are (i) not subject to redemption prior to maturity or (i)

the trustee for such obligations has been given irrevocable instructions concerning their

calling and redemption and the issuer of such obligations has covenanted not to redeem

such obligations other than as set forth in such instructions;

the obligations are secured by cash or United States Government

Obligations that may be applied only to principal of, premium, if any, and interest

payments on such obligations;

such cash and the principal of and interest on such United States

Government Obligations serving as security for the obligations, plus any cash in the

escrow fund, are sufficient to meet the liabilities of the obligations;

such cash and United States Government Obligations serving as security

for the obligations are held in an escrow fund by an escrow agent or a trustee irrevocably

in trust;

such cash and United States Government Obligations serving as security

for the obligations, are not available to satisfy any other claims, including those against

the trustee or escrow agent; and

the obligations are rated in a rating category by Moody's of Standard &

Poor's Ratings Group that is no lower than the rating category then assigned by that

rating agency to United States Government Obligations.

"Depreciation and Replacement Account" means the account referred to by that name ratified

and confirmed by Section 501 hereof.

"Expenses" means all reasonable and necessary expenses of operation, maintenance and repair of

the System and keeping the System in good repair and working order (other than interest paid on System

Revenue Bonds and depreciation and amortization charges during the period of determination),

determined in accordance with generally accepted accounting principles, including without limiting the

generality of the foregoing, current maintenance charges, expenses of reasonable upkeep and repairs,

salaries, wages, costs of materials and supplies, Paying Agent fees and expenses, annual audits, periodic

Consultant's reports, properly allocated share of charges for insurance, the cost of purchased water, gas

and power, if any, obligations (other than for borrowed money or for rents payable under capital leases)

incurred in the ordinary course of business, liabilities incurred by endorsement for collection or deposit of

checks or drafts received in the ordinary course of business, short-term obligations incurred and payable

within a particular fiscal year, other obligations or indebtedness incurred for the purpose of leasing

(pursuant to a true or operating lease) equipment, fixtures, inventory or other personal property, and all

other expenses incident to the operation of the System but shall exclude all general administrative

expenses of the City not related to the operation of the System.

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"Federal Tax Certificate" means the City's Federal Tax Certificate relating to the Bonds, as the

same may be amended or supplemented in accordance with the provisions thereof.

"Government" means the United States of America, acting through the United States

Department of Agriculture.

"Interest Payment Date" means the Stated Maturity of an installment of interest on any Bond.

"Maturity" when used with respect to any Bond or installment of principal thereof means the

date on which the Bond or installment of principal of such Bond becomes due and payable as therein and

herein provided, whether at the Stated Maturity thereof or call for redemption, declaration of acceleration

or otherwise.

"Net Revenues" means all Revenues less all Expenses.

"Net Revenues Available for Debt Service" means, for the period of determination, all

Revenues less all Expenses.

"Operation and Maintenance Account" means the account referred to by that name ratified and

confirmed by Section 501 hereof.

"Ordinance" means this Ordinance as from time to time amended in accordance with the terms

hereof.

"Original Issue Date" means the date on which the Bonds are fully paid for and are delivered to

the Purchaser.

"Outstanding" means, when used with reference to Bonds, as of any particular date, all Bonds

theretofore issued and delivered hereunder, except the following Bonds:

(a) Bonds theretofore cancelled by the Paying Agent or delivered to the Paying

Agent for cancellation;

(b) Bonds or installments of principal thereof deemed to be paid in accordance with

the provisions of Section 1101 hereof; and

Bonds in exchange for or in lieu of which other Bonds have been registered and

delivered hereunder.

"Parity Bonds" means the Previously Issued Parity Bonds and any additional parity bonds or

other obligations hereafter issued or incurred pursuant to Section 902 hereof and standing on a parity and

equality with the Bonds with respect to the payment of principal and interest out of the Net Revenues of

the System.

"Parity Ordinances" means the Previously Issued Parity Ordinances and the ordinances under

which any additional Parity Bonds are hereafter issued pursuant to Section 902 hereof.

"Paying Agent" means the party designated as Paying Agent pursuant to Section 203 hereof and

any successors and assigns.

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"Permitted Investments" means any of the following securities and obligations, if and to the

extent the same are at the time legal for investment of the City's moneys held in the funds and accounts

referred to in Section 501 hereof:

(a) United States Government Obligations;

(b) certificates of deposit or time deposits, whether negotiable or nonnegotiable,

issued by any bank or trust company organized under the laws of the United States or any state,

provided that such certificates of deposit or time deposits shall be either (1) continuously and

fully insured by the Federal Deposit Insurance Corporation, or (2) continuously and fully secured

by such securities as are described above in clause (a) which shall bave a market value, exclusive

of accrued interest, at all times at least equal to the principal amount of such certificates of

deposit or time deposits; and

(e) any other securities or investments that are lawful for the investment of moneys

held in such funds or accounts under the laws of the State of Missouri.

"Person" means any natural person, corporation, partnership, firm, joint venture, association,

joint-stock company, trust, unincorporated organization, or government or any agency or political

subdivision thereof or other public body.

"Previously Issued Parity Bonds" means the outstanding Series 1999B Bonds and the

outstanding Series 2012 Bonds.

"Previously Issued Parity Ordinances" means the Series 1999B Ordinance and the Series 2012

Ordinance.

"Project" means extending and improving the City's combined waterworks and sewerage

system.

"Project Fund" means the fund by that name created by Section 501 hereof.

"Purchaser" means (1) the Government, or (2) if and to the extent any rights, privileges or duties

of the Government hereunder are assigned by the Government pursuant to an assignment of the City's

Loan Resolution (Form RUS Bulletin 1780-27).

"Record Date" for the interest payable on any Interest Payment Date means the 15th day

(whether or not a Business Day) next preceding such Interest Payment Date.

"Redemption Date" when used with respect to any Bond or installments of principal thereof to

be redeemed means the date fixed for such redemption pursuant to the terms of this Ordinance.

"Redemption Price" when used with respect to any Bond or installments of principal thereof to

be redeemed means the price at which such Bond or installments of principal thereof is to be redeemed

pursuant to the terms of this Ordinance, including the applicable redemption premium, if any, but

excluding installments of principal whose Stated Maturity is on or before the Redemption Date.

"Reduced Rate" means an alternative rate of interest at which one or both of the Bonds may be

issued by the City at the time the Bonds are originally purchased by and delivered to the Purchaser, such

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Reduced Rate being different from the rate of interest specified in Section 202 of this Ordinance. The

Reduced Rate must meet the following requirements:

(a) The Reduced Rate shall be less than 3.00% with respect to the Series C Bond and

shall be less than 3.25% with respect to the Series D Bond; and

Written approval of the Reduced Rate, showing the reduced rate of interest and

the amount of each annual installment of principal and interest, shall have been received by the

City from the Purchaser prior to the original delivery of the Bonds to the Purchaser.

"Revenue Fund" means the fund referred to by that name ratified and confirmed by Section 501

hereof.

"Revenues" means all income and revenues derived from the ownership and operation of the

System, including investment and rental income, net proceeds from business interruption insurance, and

any amounts deposited in escrow in connection with the acquisition, construction, remodeling, renovation

and equipping of System facilities to be applied during the period of determination to pay interest on

System Revenue Bonds, but excluding any profits or losses on the early extinguishment of debt or on the

sale or other disposition, not in the ordinary course of business, of investments or fixed or capital assets.

"Series 1999B Bonds" means the Combined Waterworks and Sewerage System Revenue Bonds

(State Revolving Fund Program) Series 1999B, of the City dated June 1, 1999, originally issued in the

principal amount of $505,000.

"Series 1999B Ordinance" means Ordinance No. 641 of the City passed on May i9, 1999,

authorizing the issuance of the Series 1999B Bonds.

"Series 2012 Bonds" means the Combined Waterworks and Sewerage System Refunding

Revenue Bonds, Series 2012, of the City dated April 13, 2012, originally issued in the principal amount of

$407,000.

"Series 2012 Ordinance" means Ordinance No. 760 passed on March 12, 2012, authorizing the

issuance of the Series 2012 Bonds.

"Series C Bond" means the Combined Waterworks and Sewerage System Revenue Bond, Series

C, in the principal amount of $1,353,000 authorized by this Ordinance.

"Series D Bond" means the Combined Waterworks and Sewerage System Revenue Bond, Series

D, in the principal amount of $121,000 authorized by this Ordinance.

"Special Record Date" means the date fixed by the Paying Agent pursuant to Section 204 hereof

for the payment of Defaulted Interest.

"Stated Maturity" when used with respect to any Bond or any installment of principal thereof or

installment of interest thereon means the date specified in such Bond and this Ordinance as the fixed date

on which the principal or installment of principal of such Bond or such installment of interest is due and

payable.

"Subsidy Payments" means funds received by the City that either (1) must be used, or (2) have

been and are expected to continue to be used, to reduce the interest or principal payments on System

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Revenue Bonds. Such Subsidy Payments would include, but are not limited to (a) payments received by

the City through a federal or State of Missouri program, or (b) payments related to an interest rate swap,

exchange, hedge or similar agreement.

"Surplus Account" means the account referred to by that name ratified and confirmed by

Section 501 hereof.

"System" means the entire combined waterworks plant and system and sewerage plant and

system owned and operated by the City for the production, storage, treatment and distribution of water,

and for the collection, treatment and disposal of sewage, to serve the needs of the City and its inhabitants

and others, including all appurtenances and facilities connected therewith or relating thereto, together

with all extensions, improvements, additions and enlargements thereto hereafter made or acquired by the

City.

"System Revenue Bonds" means collectively the Bonds and all other revenue bonds or other

obligations which are payable out of, or secured by an interest in, the Net Revenues.

"United States Government Obligations" means bonds, notes, certificates of indebtedness,

treasury bills or other securities constituting direct obligations of, or obligations the principal of and

interest on which are fully and unconditionally guaranteed as to full and timely payment by, the United

States of America, including evidences of a direct ownership interest in future interest or principal

payments on obligations issued or guaranteed by the United States of America (including the interest

component of obligations of the Resolution Funding Corporation).

ARTICLE I

AUTHORIZATION OF BONDS

Section 201.

Authorization of Bonds. There is hereby authorized and directed to be issued

an issue of Combined Waterworks and Sewerage System Revenue Bonds, Series C and Series D, of the

City, in the aggregate principal amount of $1,474,000 the "Bonds") for the purpose of providing funds

for the Project, as provided in this Ordinance. The Series C Bond and the Series D Bond will be issued

pari passu, neither the Series C Bond nor the Series D Bond having priority over the other.

Section 202. Description of Bonds. The Bonds shall consist of fully registered bonds without

substantially in the form set forth in Exhibit A attached hereto, and shall be subject to registration,

transfer and exchange as provided in Section 205 hereof. The Series C Bond shall be dated as of its

if the required conditions are met prior to original delivery of the Series C Bond, at the Reduced Rate,

payable annually on the anniversary of the Original Issue Date in each year. The Series D Bond shall be

dated as of its Original Issue Date and shall bear interest from the Original Issue Date at the rate of 3.25%

per annum or, if the required conditions are met prior to original delivery of the Series C Bond, at the

Reduced Rate, payable annually on the anniversary of the Original Issue Date in each year.

The Series C Bond shall be issued as a single fully registered Bond with principal and interest

payable in annual installments of $62,969.00 (unless reduced at the time of original delivery to comply

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with a Reduced Rate approved by the Purchaser) beginning on the first (1) anniversary of the Original

Issue Date, and annually thereafter on each anniversary of the Original Issue Date except that the entire

remaining principal and interest on such Bond, if not sooner paid, shall become due and payable on the

35" anniversary of the Original Issue Date.

The Series D Bond shall be issued as a single fully registered Bond with principal and interest

payable in annual installments of $5,840.00 (unless reduced at the time of original delivery to comply

with a Reduced Rate approved by the Purchaser) beginning on the first (1) anniversary of the Original

Issue Date, and annually thereafter on each anniversary of the Original Issue Date except that the entire

remaining principal and interest on such Bond, if not sooner paid, shall become due and payable on the

35*h anniversary of the Original Issue Date.

Section 203. Designation of Paying Agent. The Treasurer of the City is hereby designated as

the City's paying agent for the payment of principal of and interest on the Bonds and bond registrar with

respect to the registration, transfer and exchange of Bonds (herein called the "Paying Agent"); provided,

however, that upon the request of the Registered Owners of not less than a majority in principal amount of

the Bonds then Outstanding, the City may by Ordinance authorize a bank or trust company having its

principal office in Missouri to act as paying agent and bond registrar for the Bonds.

The City will at all times maintain a Paying Agent meeting the qualifications herein described for

the performance of the duties hereunder. The City reserves the right to appoint a successor Paying Agent

by (1) filing with the party then performing such function a certified copy of the proceedings giving

notice of the termination of such party and appointing a successor, and (2) causing notice to be given by

first class mail to each Bondowner. No resignation or removal of the Paying Agent shall become effective

until (i) a successor has been appointed and has accepted the duties of the Paying Agent and (ii) as long as

any of the Bonds are owned or insured by the Purchaser, such successor has been approved by the

Purchaser.

Every Paying Agent appointed hereunder shall at all times be either (a) the Treasurer of the City

or (b) a commercial banking association or corporation or trust company located in the State of Missouri

organized and in good standing and doing business under the laws of the United States of America or of

the State of Missouri and subject to supervision or examination by federal or state regulatory authority.

The Paying Agent shall be paid the usual fees and expenses for its services in connection

therewith, which fees and expenses shall be paid as other Expenses are paid.

Section 204.

Method and Place of Payment of Bonds. The installments of principal or

Redemption Price of and interest on the Bonds shall be payable in any coin or currency of the United

States of America that, on the respective dates of payment thereof, is legal tender for the payment of

public and private debts.

The installments of principal, or Redemption Price of installments of principal, of each Bond

shall be paid by check or draft mailed by the Paying Agent to the Person in whose name such Bond is

registered on the Bond Register at the Maturity thereof, provided that the final installment of principal or

the Redemption Price of all remaining principal shall be paid upon presentation and surrender of such

Bond at the office of the Paying Agent.

The interest payable on each Bond on any Interest Payment Date shall be paid to the Registered

Owner of such Bond as shown on the Bond Register at the close of business on the Record Date for such

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interest by check or draft mailed by the Paying Agent to such Registered Owner at the address shown on

the Bond Register.

Notwithstanding the foregoing provisions of this Section, any Defaulted Interest with respect to

any Bond shall cease to be payable to the Registered Owner of such Bond on the relevant Record Date

and shall be payable to the Registered Owner in whose name such Bond is registered at the close of

business on the Special Record Date for the payment of such Defaulted Interest, which Special Record

Date shall be fixed as hereinafter specified in this paragraph. The City shall notify the Paying Agent in

writing of the amount of Defaulted Interest proposed to be paid on each Bond and the date of the

proposed payment (which date shall be at least 30 days after receipt of such notice by the Paying Agent)

and shall deposit with the Paying Agent at the time of such notice an amount of money equal to the

aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements

satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment. Following

receipt of such funds, the Paying Agent shall fix a Special Record Date for the payment of such Defaulted

Interest which shall be not more than 15 days or less than 10 days prior to the date of the proposed

payment. The Paying Agent shall promptly notify the City of such Special Record Date and, in the name

and at the expense of the City, shall cause notice of the proposed payment of such Defaulted Interest and

the Special Record Date therefor to be mailed by first class mail, postage prepaid, to each Registered

Owner of a Bond entitled to such notice at the address of such Registered Owner as it appears on the

Bond Register not less than 10 days prior to such Special Record Date.

The Paying Agent shall keep a record of payment of principal and Redemption Price of and

interest on all Bonds and shall at least annually forward a copy or summary of such records to the City.

Section 205. Registration, Transfer and Exchange of Bonds. The City covenants that, as

long as any of the Bonds remain Outstanding, it will cause the Bond Register to be kept at the office of

the Paying Agent for the registration, transfer and exchange of Bonds as herein provided. Each Bond

when issued shall be registered in the name of the Owner thereof on the Bond Register.

Bonds may be transferred and exchanged only on the Bond Register as provided in this Section.

Upon surrender of any Bond at the office of the Paying Agent, the Paying Agent shall transfer or

exchange such Bond for a new Bond or Bonds in any authorized denomination of the same Stated

Maturity and in the principal amount of the outstanding and unpaid principal of the Bond that was

presented for transfer or exchange. Bonds presented for transfer or exchange shall be accompanied by a

written instrument or instruments of transfer or authorization for exchange, in a form and with guarantee

of signature satisfactory to the Paying Agent, duly executed by the Registered Owner thereof or by the

Registered Owner's duly authorized agent.

In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Paying

Agent shall authenticate and deliver Bonds in accordance with the provisions of this Ordinance. The City

shall pay the tees and expenses of the laying Agent tor the registration, transfer and exchange of Bonds

provided for by this Ordinance. Any additional costs or fees that might be incurred in the secondary

market, other than fees of the Paying Agent, are the responsibility of the Registered Owners of the Bonds.

In the event any Registered Owner fails to provide a correct taxpayer identification number to the Paying

Agent, the Paying Agent may make a charge against such Registered Owner sufficient to pay any

governmental charge required to be paid as a result of such failure. In compliance with Section 3406 of

the Code, such amount may be deducted by the Paying Agent from amounts otherwise payable to such

Registered Owner hereunder or under the Bonds.

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The City and the Paying Agent shall not be required (a) to register the transfer or exchange of any

Bond after notice calling such Bond or portion thereof for redemption has been given or during the period

of 15 days next preceding the first mailing of such notice of redemption, or (b) to register the transfer or

exchange of any Bond during a period beginning at the opening of business on the day after receiving

written notice from the City of its intent to pay Defaulted Interest and ending at the close of business on

the date fixed for the payment of Defaulted Interest pursuant to Section 204 hereof.

The City and the Paying Agent may deem and treat the Person in whose name any Bond is

registered on the Bond Register as the absolute owner of such Bond, whether payments on such Bond are

overdue or not, for the purpose of receiving payment of, or on account of, the principal or Redemption

Price of and interest on said Bond and for all other purposes. All payments so made to any such

Registered Owner or upon the Registered Owner's order shall be valid and effectual to satisfy and

discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City nor

the Paying Agent shall be affected by any notice to the contrary.

At reasonable times and under reasonable regulations established by the Paying Agent, the Bond

Register may be inspected and copied by the Registered Owners (or a designated representative thereof)

of 10% or more in principal amount of the Bonds then Outstanding or any designated representative of

such Registered Owners to be evidenced to the satisfaction of the Paying Agent.

Section 206. Execution, Authentication and Delivery of Bonds. Each of the Bonds,

including any Bonds issued in exchange or as substitution for the Bonds initially delivered, shall be

signed by the manual or facsimile signature of the Mayor, attested by the manual or facsimile signature of

the City Clerk, and shall have the official seal of the City affixed thereto or imprinted thereon. In case

any officer whose signature appears on any Bonds ceases to be such officer before the delivery of such

Bonds, such signature shall nevertheless be valid and sufficient for all purposes, as if such person had

remained in office until delivery. Any Bond may be signed by such persons who at the actual time of the

execution of such Bond are the proper officers to sign such Bond although at the date of such Bond such

persons may not have been such officers.

The Mayor and City Clerk are hereby authorized and directed to prepare and execute the Bonds

as herein specified, and when duly executed, to deliver the Bonds to the Paying Agent for authentication.

The Bonds shall have endorsed thereon a certificate of authentication substantially in the form set

forth in Exhibit A attached hereto, which shall be manually executed by (i) the Treasurer of the City or

(ii) if a bank or trust company is serving as Paying Agent, an authorized officer or employee of the Paying

Agent, but it shall not be necessary that the same officer or employee sign the certificate of authentication

on all of the Bonds that may be issued hereunder at any one time. No Bond shall be entitled to any

security or benefit under this Ordinance or be valid or obligatory for any purpose unless and until such

certificate of authentication has been duly executed by the Paying Agent. Such executed certificate of

authentication upon any Bond shall be conclusive evidence that such Bond has been duly authenticated

and delivered under this Ordinance. Upon authentication, the Paying Agent shall deliver the Bonds to the

Purchaser, upon payment of the purchase price of 100% of the principal amount of the Bonds plus

accrued interest thereon to the date of their delivery.

Section 207.

Mutilated, Destroyed, Lost and Stolen Bonds. If (a) any mutilated Bond is

surrendered to the Paying Agent, or the City and the Paying Agent receive evidence to its satisfaction of

the destruction, loss or theft of any Bond, and (b) there is delivered to the Paying Agent such security or

indemnity as may be required by the Paying Agent, then, in the absence of notice to the Paying Agent that

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such Bond has been acquired by a bona fide purchaser, the City shall execute and, upon the City's request,

the Paying Agent shall authenticate and deliver, in exchange for or in lieu of any such mutilated,

destroyed, lost or stolen Bond, a new Bond of the same Stated Maturity and of like tenor and principal

amount.

If the final installment of principal and interest of any such mutilated, destroyed, lost or stolen

Bond has become or is about to become due and payable, the City in its discretion may pay such Bond

instead of issuing a new Bond.

Upon the issuance of any new Bond under this Section, the City may require the payment by the

Registered Owner of a sum sufficient to cover any tax or other governmental charge that may be imposed

in relation thereto and any other expenses (including the fees and expenses of the Paying Agent)

connected therewith.

ivery new Bond issued pursuant to this Section shall constitute a replacement of the prio

bligation of the City, and shall be entitled to all the benefits of this Ordinance equally and ratably wit

all other Outstanding Bonds.

Section 208.

Cancellation and Destruction of Bonds Upon Payment. All Bonds that have

been paid or redeemed or that otherwise have been surrendered to the Paying Agent, either at or before

Maturity, shall be cancelled by the Paying Agent immediately upon the payment, redemption and

surrender thereof to the Paying Agent and subsequently destroyed in accordance with the customary

practices of the Paying Agent. The Paying Agent shall execute a certificate in duplicate describing the

Bonds so cancelled and destroyed and shall file an executed counterpart of such certificate with the City.

ARTICLE I

REDEMPTION OF BONDS

Section 301. Redemption of Bonds. Bonds that are owned by the Purchaser (including the

respective installments of principal corresponding thereto) shall be subject to redemption and prepayment

prior to Stated Matunty, in whole or in part at any time at the option of the City, upon payment of the

principal amount of the Bonds or of the instaliments of principal thereof to be redeemed or prepaid, plus

accrued interest thereon to the Redemption Date, without premium.

corespondid that are hat be set by the pumpion or plea che prop tive aliens of principal

of the City, as follows:

The Bonds or installments of principal thereof are not subject to redemption prior

to the ninth (9") anniversary of the Original Issue Date.

(b) Each of the Bonds or the respective installments of principal thereof becoming

due on and after the tenth (10) anniversary of the Original Issue Date shall be subject to

redemption and payment at the option of the City, on the ninth (9t*) anniversary of the Original

Issue Date, or at any time thereafter in whole or in part, at the principal amount thereof, plus

accrued interest thereon to the Redemption Date, without premium.

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In the event of partial redemption of a Bond, the installments of principal to be redeemed shall be

in the inverse order of the Maturity dates of such principal installments. The redemption of a portion of a

Bond shall not reduce the amount of each annual installment of principal and interest due on the Bond.

Section 302.

Instructions to Redeem Bonds.

(a) The Paying Agent shall call Bonds or installments of principal thereof for redemption and

payment and shall give notice of such redemption as herein provided upon receipt by the Paying Agent at

least 45 days prior to the Kedemption Date of written instructions of the City specitying the principal

amount, Stated Matunties, Redemption Date and Redemption Prices of the Bonds or installments of

principal thereof to be called for redemption. The Paying Agent may in its discretion waive such notice

period so long as the notice requirements set forth in Section 303 hereof are met.

(b) by the City. When less than all of an Outstanding Bond is to be redeemed, such Bond shall be redeemed

Wit Bond nay do redeed in such

A Bond may be redeemed in such portion of outstanding principal as shall be determined

in inverse order of installments of principal thereof.

Section 303.

Notice and Effect of Call for Redemption. Unless waived by any Registered

Owner of a Bond to be redeemed, official notice of any redemption of all or any portion of such Bond

shall be given by the Paying Agent on behalf of the City by mailing a copy of an official redemption

notice by first class mail at least 30 days prior to the Redemption Date, to the Purchaser of the Bond and

the Registered Owner of the Bond to be redeemed at the address shown on the Bond Register.

All official notices of redemption shall be dated and shall contain the following information:

(a) the Redemption Date;

(b) the Redemption Price;

(c) if less than all Outstanding principal of the Bond is to be redeemed, the portion of

principal of the Bond to be redeemed;

a statement that on the Redemption Date the Redemption Price will become due

and payable upon the Bond or portion thereof called for redemption and that interest on suct

Bond or portion thereof shall cease to accrue from and after the Redemption Date; an

if the Bond is to be fully redeemed and retired, the place where such Bond may

be surrendered for payment of the Redemption Price, which shall be the office of the Paying

• The failure of any Registered Owner to receive notice given as heretofore provided or an

immaterial defect therein shall not invalidate any redemption.

Prior to any Redemption Date, the City shall deposit with the Paying Agent an amount of money

sufficient to pay the Redemption Price of all the Bonds or portions of Bonds that are to be redeemed on

that date.

Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds to

be redeemed shall become due and payable on the Redemption Date, at the Redemption Price therein

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specified, and from and after the Redemption Date (unless the City defaults in the payment of the

Redemption Price) such Bonds or portion of Bonds shall cease to bear interest; provided, however, that

the redemption of a portion of a Bond shall not reduce the amount of the annual installment of principal

and interest on such Bond. Upon surrender of such Bonds for redemption in accordance with such notice,

the Redemption Price of such Bonds shall be paid by the Paying Agent. Installments of principal and

interest due on or prior to the Redemption Date shall be payable as herein provided for payment of

interest. Upon surrender for any partial redemption of any Bond, there shall, if requested by the

Registered Owner thereof, be prepared for the Registered Owner a new Bond or Bonds paying the same

annual installment of principal and interest, in the principal amount of the unpaid principal. All Bonds

that have been redeemed shall be cancelled and destroyed by the Paying Agent as provided herein and

shall not be reissued.

The Paying Agent is also directed to comply with any mandatory or voluntary standards

established by the Securities and Exchange Commission then in effect for processing redemptions of

municipal securities. Failure to comply with such standards shall not affect or invalidate the redemption

of any Bond or installments of principal thereof.

ARTICLE N

SECURITY FOR BONDS

Section 401.

Security for Bonds. The Bonds shall be special obligations of the City payable

solely from, and secured as to the payment of principal and interest by a pledge of, the Net Revenues of

the System, and the City hereby pledges said Net Revenues to the payment of the principal of and interest

on the Bonds. The Bonds shall not be or constitute a general obligation of the City, nor shall they

constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter

provision, limitation or restriction, and the taxing power of the City is not pledged to the payment of the

Bonds, either as to principal or interest.

The covenants and agreements of the City contained herein and in the Bonds shall be for the

equal benefit, protection and security of the legal owners of any or all of the Bonds, all of which Bonds

shall be of equal rank and without preference or priority of one Bond over any other Bond in the

application of the funds herein pledged to the payment of the principal of and the interest on the Bonds, or

otherwise, except as to rate of interest, date of maturity and right of prior redemption as provided in this

Ordinance. The Bonds shall stand on a parity and be equally and ratably secured with respect to the

payment of principal and interest from the Net Revenues and in all other respects with any Parity Bonds.

The Bonds shall not have any priority with respect to the payment of principal or interest from said

Net Revenues or otherwise over the Parity Bonds and the Parity Bonds shall not have any priority with

respect to the payment of principal or interest from said Net Revenues or otherwise over the Bonds.

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ARTICLE Y

CREATION AND RATIFICATION OF FUNDS AND ACCOUNTS;

DEPOSIT AND APPLICATION OF BOND PROCEEDS

Section 501. Establishment of Funds and Accounts. There are hereby created or ratified and

ordered to be established and maintained in the treasury of the City the following separate funds and

accounts to be known respectively as the:

(d) Combined Waterworks and Sewerage System Project Fund (the "Project Fund").

Combined Waterworks and Sewerage System Revenue Fund (the "Revenue Fund").

Combined Waterworks and Sewerage System Operation and Maintenance Account (the

"Operation and Maintenance Account").

Debt Service Account for Combined Waterworks and Sewerage System Refunding

Revenue Bonds, Series 2012 (the "Series 2012 Debt Service Account").

(e) Debt Service Account for Combined Waterworks and Sewerage System Revenue Bonds,

Series C and Series D (the "Debt Service Account").

Debt Service Reserve Account for Combined Waterworks and Sewerage Systen

Refunding Revenue Bonds, Series 2012 (the Series 2012 Debt Service Reserv

Account").

(g) Debt Service Reserve Account for Combined Waterworks and Sewerage System Revenue

Bonds, Series C and Series D (the "Debt Service Reserve Account").

(h) Combined Waterworks and Sewerage System Depreciation and Replacement Account

(the "Depreciation and Replacement Account").

(i) Combined Waterworks and Sewerage System Surplus Account (the "Surplus Account").

The City acknowledges the creation and continuing existence of the following accounts for the

Series 1999B Bonds:

(2) the Debt Service Account, the Principal Account and the Interest Account (hereinafter

referred to collectively as the "Series 1999B Debt Service Account"), and

the Reserve Account (the "Series 1999B Debt Service Reserve Account").

The funds and accounts referred to in paragraphs (a), (b), (a) and (i) of this Section shall be

maintained and administered by the City solely for the purposes and in the manner as provided in the Act

and in this Ordinance and in the Previously Issued Parity Ordinances so long as any of the Bonds or the

Previously Issued Parity Bonds remain Outstanding within the meaning of this Ordinance and the

Previously Issued Parity Ordinances, respectively. The funds and accounts referred to in paragraphs (d)

and (f) of this Section shall be maintained and administered by the City solely for the purposes and in the

manner as provided in the Act and in the Series 2012 Ordinance so long as the Series 2012 Bonds remain

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Outstanding within the meaning of the Series 2012 Ordinance. The funds and accounts referred to in

paragraphs (e) and (g) of this Section shall be maintained and administered by the City solely for the

purposes and in the manner as provided in the Act and in this Ordinance so long as any of the Bonds

remain Outstanding.

Section 502. Deposit of Bond Proceeds. The net proceeds received from the sale of the

Bonds shall be deposited simultaneously with the delivery of the Bonds, as follows:

Any premium and accrued interest on the Bonds shall be deposited in the Deb

ervice Account and applied in accordance with Section 602(b) hereo

The remaining balance of the proceeds of the Bonds shall be deposited in th

roject Fund and applied in accordance with Section 503 hereo

Section 503.

Application of Moneys in the Project Fund. Moneys in the Project Fund shall

be used solely for the purpose of (a) paying the cost of the Project as hereinbefore provided, in

accordance with the plans and specifications therefor prepared by the Consultant for the Project and

heretofore approved by the Board of Aldermen of the City and on file in the office of the City Clerk,

including any alterations in or amendments to said plans and specifications deemed advisable by the

Consultant and approved by the Board of Aldermen of the City, and (b) for paying the costs and expenses

incident to the issuance of the Bonds.

Withdrawals from the Project Fund shall be made only when authorized by the Board of

Aldermen and only on duly authorized and executed warrants or vouchers therefor accompanied by a

certificate executed by the Consultant that such payment is being made for a purpose within the scope of

this Ordinance and that the amount of such payment represents only the contract price of the property,

equipment, labor, materials or service being paid for or, if such payment is not being made pursuant to an

express contract, that such payment is not in excess of the reasonable value thereof. Nothing hereinbefore

contained shall prevent the payment out of the Project Fund of all costs and expenses incident to the

issuance of the Bonds and interest accruing on the Bonds during the period of acquisition and

construction of the Project or withdrawals of sums for investment or reinvestment purposes under the

terms of this Ordinance without a certificate from the Consultant.

Upon completion of the Project as hereinbefore provided, any surplus moneys remaining in the

Project Fund and not required for the payment of unpaid-costs thereof shall be used either to pay part of

the first installment of interest on due on the Bonds or for the prepayment of principal of the Bonds.