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HomeMy WebLinkAbout~Master - Sewer Revenue Refunding, Series 1996 - $3,515,000 V Ames/419370-10/2nd 1/2 RBS/RBI MINUTES OF MEETING TO ADOPT RESOLUTION PROVIDING FOR THE FORM AND ISSUANCE OF BONDS Y 0J- R ke CORD 419370-10 (2nd 1/2 RBS/RBI) Ames, Iowa March 5, 1996 The City Council met at the Council Chambers, City Hall, in the City, on March 5, 1996 at 7:00 o'clock p.m. The Mayor presided and the roll being called, the following named Council Members were present: Present: Campbell, Hoffman, Parks, Quirmbach, Tedesco, Wirth Absent: None This being the time and place fixed in the published notice for the consideration of proposals for the purchase of the aforementioned bonds, the Mayor announced that sealed bids had been received and canvassed on behalf of the City at the time and place fixed therefor in the published Notice of Sale. Whereupon, the results of the bids were then read, the substance of such bids was noted in the minutes, as follows: Name and Address of Bidder Final Bid (interest cost) (ATTACH BID TABULATION) -1- DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA SENT B" : 'I- 5-9G : 1 1 42AM EVENSEN� DODGE INC— DES MO 1 Ni:S:" 2! 4 Pier: EVENI.S11=1`4 DODGE INC RESULTS C)F SALE SALE DATE': Maw:.h:i, 1996 :93,510,000 Sewer Revenue Refunding Bonds, Series 1996 City of Ames,lm:; Ritini;: .A1114cod; $tnk.Qwdified: NO BBi; S.Si9: AY S&,P E Address Year R= Yield PIPER 7.AI'F` i'Y,INC, Wlneapol.is 1996 4.25% 3.40% Edo ROBEIR'"'IX, E'-.AII�.;:3 . CG.,INC Milwaukee 1997 4.25% 3.70°l0 CRONIN k+�C:.,I1.1c. Minneapolis 1999 4,25% 3. OND $3,d95,026.�i rCUQPl-.R'l"Y,Mi.W1:.I14S, STRAND 1999 4215°Jn 4.10% B1GELc:'h',I't(;, Minneapolis 2000 4.25% 4.20% 200 4 a5% 4.30% 2002 4.25% 4.40% $559,653.65 Imo. 4.3668% C141L%SHEIDi3R1:11VISICNOF 1996 4.2G°lo Price SMITII BA,R'N'!!,MC. Omalui 1997 4.2C% EVEREN SEClJR1 FIE!,INC. c"'l-cago 19911 4 21M $3,494,205.00 DEAN WIT'1E k R;l:YNOLDS,INC. Ch ;qc 1999 4.2C% 2000 4.250,c Nic 200:'. 4.3C°io 2002 4 4% $562,720.% LEI$ 4.3907°M ._ J7uo0i 100 Court Aveaiae,Suit-21:;,.Des Moines,Iowa 50309 (515)292-6138 (51!)282.0252 FAX �tiv ti J'- 7—�V 11 =LLc4!�l GVGIti JG;V UVUVG 1!vt<. UGJ MI/11 VG.)• 0/ 'f GRIIY[,.4, [CIA311K,,ST]EPHENS& 1996 4.40% E IU TI3ON P 3OAJ,INC. Chicago 1997 4.50% 1998 4.50% S3,494,205.00 1999 4.50% 2000 4,50% EIL 2001 4.50% 2002 4.50% S592,202.11 LM 4.520 S% Ames/419370-10/2nd 1/2 RBS/RBI The Council took up for consideration a resolution hereinafter set out, which was introduced by Council Member Tedesco who moved that the resolution be adopted, seconded by Council Member Hoffman . The Mayor put the question on the motion and the roll being called, the following named Council Members voted: Ayes: Campbell, Hoffman, Parks, Ouirmbach, Tedesco, Wirth Nays: None Whereupon, the Mayor declared the motion duly carried and the resolution duly adopted. -2- DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI On motion and vote, the meeting adjourned. Mayor Attest: t City Clerk -3- DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI RESOLUTION NO. 96-117 Resolution authorizing and providing for the sale and issuance and securing the payment of Sewer Revenue Refunding Bonds, Series 1996 WHEREAS, the City of Ames, in Story County, Iowa (hereinafter sometimes referred to as the "City") did heretofore establish a Municipal Sanitary Sewer System in and for the City (hereinafter sometimes referred to as the "Utility"); and WHEREAS, the management and control of the Utility are now vested in the Council of the City, and no board of trustees exists for this purpose; and WHEREAS, heretofore, under date of May 1, 1987, the City issued $4,230,000 Sewer Revenue Bonds, Series 1987A, pursuant to a resolution duly adopted by the City Council on April 21, 1987 (hereinafter sometimes referred to as the "Series 1987A Bond Resolution"), of which $2,450,000 remain outstanding (the "Series 1987A Bonds") maturing on December 1 in each of the years and bearing interest at the respective rates as follows: Principal Interest Rate Principal Interest Rate Year Amount Per Annum Year Amount Per Annum 1996 $275,000 5.90% 2000 $375,000 6.50% 1997 $300,000 6.10% 2001 $400,000 6.50% 1998 $325,000 6.25% 2002 $425,000 6.50% 1999 $350,000 6.40% and WHEREAS, heretofore, under date of December 1, 1987, the City issued $2,375,000 Sewer Revenue Bonds, Series 1987B, pursuant to a resolution duly adopted by the City Council on December 8, 1987 (hereinafter sometimes referred to as the "Series 1987B Bond Resolution"), of which $1,400,000 remain outstanding (the "Series 1987B Bonds") maturing on December 1 in each of the years and bearing interest at the respective rates as follows: Principal Interest Rate Principal Interest Rate Year Amount Per Annum Year Amount Per Annum 1996 $150,000 6.80% 2000 $225,000 7.20% 1997 $175,000 6.90% 2001 $225,000 7.30% 1998 $175,000 7% 2002 $250,000 7.40% 1999 $200,000 7.10% and -4- DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI WHEREAS, all of the Series 1987A Bonds and Series 1987B Bonds (sometimes hereinafter referred to collectively as the "Series 1987 Bonds") are subject to redemption prior to maturity on June 1, 1996; and WHEREAS, in and by the Series 1987A Bond Resolution and the Series 1987B Bond Resolution (sometimes hereinafter referred to as the "Series 1987 Bond Resolutions"), refunding bonds are not subject to the restrictions contained in the Series 1987 Bond Resolutions with respect to the issuance of additional sewer revenue bonds, provided that the bonds to be refunded mature within three months of the date of issuance of the refunding bonds; and WHEREAS, pursuant to the provisions of Division V of Chapter 384 of the Code of Iowa, notice duly published and a hearing held thereon, the City has heretofore determine to issue Sewer Revenue Refunding Bonds (the "Series 1996 Bonds") in a principal amount not to exceed $4,500,000 for the purpose of refunding the Series 1987 Bonds; and WHEREAS, pursuant to Notice of Sale heretofore given in strict compliance with the provisions of Chapter 75 of the Code of Iowa, sealed bids for the purchase of the Series 1996 Bonds were received and canvassed on behalf of the City at the time and place fixed therefor and the substance of such sealed bids noted in the minutes; and WHEREAS, and, upon final consideration of all bids, the bid of Piper Jaffray, Inc., Account Manager, is the best, such bid proposing the lowest interest cost to the city; WHEREAS, it now becomes advisable and necessary and for the best interests of the City and its inhabitants that the Series 1996 Bonds be issued and delivered; NOW, THEREFORE, Be It Resolved by the City Council of the City of Ames, Iowa, as follows: Section 1. The bid referred to in the preamble hereof is hereby accepted, and the Series 1996 Bonds, maturing on December 1 in each of the years, in the respective principal amounts and bearing interest at the respective rates, as follows: Principal Interest Rate Principal Interest Rate Year Amount Per Annum Year Amount Per Annum 1996 $435,000 4.25% 2000 $595,000 4.25% 1997 $510,000 4.25% 2001 $605,000 4.25% 1998 $520,000 4.25% 2002 $290,000 4.25% 1999 $560,000 4.25% -5- (Rev.) DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI be and the same are hereby awarded and authorized to be issued to the said bidder in the principal amount of $3,515,000 at the price specified in such bid, together with accrued interest. Section 2. The form of agreement of sale of the Series 1996 Bonds be and the same is hereby approved, and the Mayor and Clerk are hereby authorized to accept and execute the same for and on behalf of the City and to affix the City seal thereto. Section 3. The Series 1996 Bonds shall be in the denomination of $5,000 each, or any integral multiple thereof, shall be dated March 15, 1996, and shall mature and bear interest as set forth in Section 1 hereof. The City Treasurer is hereby designated as the Bond Registrar and Paying Agent for the Series 1996 Bonds and may be hereinafter referred to as the "Bond Registrar" or the "Paying Agent". All of the interest on the Series 1996 Bonds shall be payable December 1, 1996, and semiannually thereafter on the first day of June and December in each year. Payment of interest on the Series 1996 Bonds shall be made to the registered owners appearing on the bond registration books of the City at the close of business on the fifteenth day of the month next preceding the interest payment date and shall be paid by check or draft mailed to the registered owners at the addresses shown on such registration books. Principal of the Series 1996 Bonds shall be payable in lawful money of the United States of America to the registered owners or their legal representatives upon presentation and surrender of the Series 1996 Bond or Bonds at the office of the Paying Agent. The Series 1996 Bonds shall be executed on behalf of the City with the official manual or facsimile signature of the Mayor and attested by the official manual or facsimile signature of the City Clerk and shall have the City's seal impressed or printed thereon, and shall be fully registered bonds without interest coupons. The issuance of the Series 1996 Bonds shall be recorded in the office of the City Treasurer and the certificate on the back of each Series 1996 Bond shall be executed with the official manual or facsimile signature of the City Treasurer. In case any officer whose signature or the facsimile of whose signature shall appear on the Series 1996 Bonds shall cease to be such officer before the delivery of such Series 1996 Bonds, such signature or such facsimile signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. All of the Series 1996 Bonds and the interest thereon, and any additional bonds as may be hereafter issued and outstanding from time to time ranking on a parity therewith under the conditions set forth herein (which additional bonds are -6- (Rev.) DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI hereinafter sometimes referred to as the 'Parity Bonds") (the Series 1996 Bonds and any Parity Bonds are sometimes hereinafter collectively referred to as the 'Bonds"), shall be payable solely from the Sinking Fund hereinafter referred to and shall be a valid claim of the holder thereof only against said fund, and none of the Bonds shall be a general obligation of the City, nor payable in any manner by taxation, and under no circumstances shall the City be in any manner liable by reason of the failure of the Net Revenues of the Utility to be sufficient for the payment in whole or in part of the Bonds and the interest thereon; but the Bonds shall be payable both as to principal and interest solely and only from the future Net Revenues of the Utility pledged therefor as hereinafter provided. The Series 1996 Bonds shall be fully registered as to principal and interest in the names of the owners on the registration books of the City kept by the Bond Registrar, and after such registration, payment of the principal and interest thereof shall be made only to the registered owners, their legal representatives or assigns. Each Series 1996 Bond shall be transferable only upon the registration books of the City upon presentation to the Bond Registrar, together with either a written instrument of transfer satisfactory to the Bond Registrar or the assignment form thereon completed and duly executed by the registered owner or the duly authorized attorney for such registered owner. The record and identity of the owners of the Series 1996 Bonds shall be kept confidential as provided by Section 22.7 of the Code of Iowa. The Series 1996 Bonds shall not be valid or become obligatory for any purpose until the Certificate of Authentication thereon shall have been signed by the Bond Registrar. Section 4. The Series 1996 Bonds shall be in substantially the following form: -7- DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI (Form of Bond) UNITED STATES OF AMERICA STATE OF IOWA COUNTY OF STORY CITY OF AMES SEWER REVENUE REFUNDING BOND SERIES 1996 No. $ RATE MATURITY DATE BOND DATE CUSIP March 15, 1996 The City of Ames (the "City"), in the County of Story, State of Iowa, for value received, promises to pay on the maturity date of this Bond to or registered assigns, the principal sum of THOUSAND DOLLARS in lawful money of the United States of America upon presentation and surrender of this Bond at the office of the City Treasurer, Ames, Iowa (hereinafter referred to as the 'Bond Registrar" or the "Paying Agent") with interest on said sum, until paid, at the rate per annum specified above from the date of this Bond, or from the most recent interest payment date on which interest has been paid, on June 1 and December 1 of each year, commencing December 1, 1996. Interest on this Bond is payable to the registered owner appearing on the bond registration books of the City at the close of business on the fifteenth day of the month next preceding the interest payment date, and shall be paid by check or draft mailed to the registered owner at the address shown on such registration books. Interest shall be calculated on the basis of a 360-day year comprised of twelve 30-day months. This Bond shall not be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by the Bond Registrar. This Bond and the series of which it is a part (the "Series 1996 Bonds") are issued by said City pursuant to and in strict compliance with the provisions of Division V of Chapter 384 of the Code of Iowa, 1995, and all other laws amendatory thereof and supplemental thereto, and in conformity with a resolution of the City -8- DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI Council of the City authorizing and providing for the sale and issuance and securing the payment of $3,515,000 Sewer Revenue Refunding Bonds, Series 1996 (the "1996 Bond Resolution"), and reference is hereby made to the 1996 Bond Resolution for a more complete statement as to the source of payment of the Series 1996 Bonds and the rights of the owners of the Series 1996 Bonds. The Series 1996 Bonds are issued for the purpose of refunding the City's Sewer Revenue Bonds, Series 1987A, and the City's Sewer Revenue Bonds, Series 1987B, and are not general obligations of the City, but the Series 1996 Bonds, together with any additional bonds as may be hereafter issued and outstanding from time to time ranking on a parity therewith under the conditions set forth in the 1996 Bond Resolution, are payable solely and only out of the future Net Revenues of the Municipal Sanitary Sewer System of the City, a sufficient portion of which has been ordered set aside and pledged for that purpose. This Bond is not payable in any manner by taxation, and under no circumstances shall the City be in any manner liable by reason of the failure of the said Net Revenues to be sufficient for the payment of this Bond and the interest hereon. This Bond is fully negotiable but shall be fully registered as to both principal and interest in the names of the owners on the books of the City in the office of the Bond Registrar, after which no transfer shall be valid unless made on said books and then only upon presentation of this Bond to the Bond Registrar, together with either a written instrument of transfer satisfactory to the Bond Registrar, or the assignment form hereon completed and duly executed by the registered owner or the duly authorized attorney for such registered owner. The City, the Bond Registrar and the Paying Agent may deem and treat the registered owner hereof as the absolute owner for the purpose of receiving payment of or on account of principal hereof, premium, if any, and interest due hereon and for all other purposes, and the City, the Bond Registrar and the Paying Agent shall not be affected by any notice to the contrary. And It Is Hereby Certified, Recited and Declared that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of the Series 1996 Bonds have existed, have happened and have been performed in due time, form and manner, as required by law, and that the issuance of this Bond does not exceed or violate any constitutional or statutory limitation or provision. -9- (Rev.) DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI IN TESTIMONY WHEREOF, the City of Ames, Iowa, by its City Council, has caused this Bond to be sealed with the facsimile of its official seal, to be executed with the duly authorized facsimile signature of its Mayor and attested with the duly authorized facsimile signature of its City Clerk, all as of March 15, 1996. CITY OF AMES, IOWA By (Facsimile Signature) Mayor Attest: (Facsimile Signature) City Clerk (Facsimile Seal) Registration Date: REGISTRAR'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Series 1996 Bonds described in the within-mentioned Resolution. /s/ Sherry M. Meier City Treasurer of the City of Ames, Iowa (On the back of each Series 1996 Bond the following certificate shall be executed with the duly authorized facsimile signature of the City Treasurer): STATE OF IOWA CITY OF AMES SS: CITY TREASURER'S CERTIFICATE COUNTY OF STORY The original issuance of the Series 1996 Bonds, of which this Bond is a part, was duly and properly recorded in my office as of March 15, 1996. (Facsimile Signature) City Treasurer -10- DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI ABBREVIATIONS The following abbreviations, when used in this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UTMA TEN ENT - as tenants by the entireties As Custodian for TEN - as joint tenants with (Minor) right of survivorship and under Uniform Transfers to Minors Act not as tenants in common (State) Additional abbreviations may also be used though not in the list above. ASSIGNMENT For valuable consideration, receipt of which is hereby acknowledged, the undersigned assigns this Bond to (please print or type name and address of Assignee) PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE and does hereby irrevocably appoint , Attorney, to transfer this Bond on the books kept for registration thereof with full power of substitution. Dated: Signature guaranteed: (Signature guarantee must be provided in accordance with the prevailing standards and procedures of the Registrar and Transfer Agent. Such standards and procedures may require signatures to be guaranteed by certain eligible guarantor institutions that participate in a recognized signature guarantee program.) NOTICE: The signature to this Assignment must correspond with the name of the registered owner as it appears on this Bond in every particular, without alteration or enlargement or any change whatever. -11- DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA 1 Ames/419370-10/2nd 1/2 RBS/RBI Section 5. The Series 1996 Bonds shall be executed as herein provided as soon after the adoption of this resolution as may be possible and thereupon they shall be delivered to the Bond Registrar, for registration, authentication and delivery upon receipt of the purchase price, with accrued interest, and all action heretofore taken in connection with the sale and award of the Series 1996 Bonds is hereby ratified and confirmed in all respects. The proceeds received from the sale of the Series 1996 Bonds, exclusive of accrued interest, shall be to used refund the Series 1987 Bonds on June 1 1996, and any unexpended balance of the proceeds of the Series 1996 Bonds remaining thereafter, plus any amount received by the City as accrued interest, shall be converted into the Sinking Fund hereinafter referred to and used to pay interest on the Series 1996 Bonds on the first interest payment date. The Series 1987 Bonds are hereby called for prepayment as of June 1, 1996, and Bankers Trust Company, Des Moines, Iowa (the "Bank"), as the Bond Registrar and Paying Agent for the Series 1987 Bonds, is hereby authorized and directed to give notice of such prepayment in accordance with the provisions of the Series 1987 Bond Resolutions, by mailing notice to each registered owner of the Series 1987 Bonds at the address shown on the City's registration books maintained by the Bank by certified mail, return receipt requested, not less than 30 nor more than 45 days prior to the date set for redemption. There is hereby established a separate special fund which shall be known as the "Refunding Account", into which there shall be set apart and paid from the proceeds of the Series 1996 Bonds and other legally available funds of the City at the time of the delivery of the Series 1996 Bonds funds which, together with interest earnings on such deposits, shall be sufficient to pay the principal of and interest on the Series 1987 Bonds on June 1, 1996. So long as any of the Series 1987 Bonds are outstanding, all money credited to the Refunding Account shall be used and is hereby pledged to the payment of the principal of and interest on the Series 1987 Bonds and for no other purpose whatsoever. After all of the Series 1987 Bonds have been paid, both principal and interest, the Refunding Account shall be closed and any money remaining in the Refunding Account shall be transferred and credited to the Sinking Fund and used to pay interest due on the Series 1996 Bonds on the first interest payment date. Section 6. So long as any of the Bonds are outstanding, the Utility shall continue to be maintained in good condition and operated in an efficient manner and at a reasonable cost as a revenue producing undertaking. On or before the beginning of each fiscal year, the City shall establish, impose, adjust and provide for the collection of rates to be charged to customers of the Utility, including the City, to produce gross revenues (hereinafter sometimes referred to as the "Gross Revenues") for the next fiscal year at least sufficient to pay the expenses of operation and maintenance of the Utility, which shall include salaries, wages, cost of maintenance and operation, materials, supplies, insurance and all other items normally included under recognized accounting practices (but does not include allowances for depreciation in the valuation of physical property) (which such -12- DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI expenses are hereinafter sometimes referred to as the "Operating Expenses") for the next fiscal year, and to leave a balance of net revenues (herein referred to as the 'Net Revenues") equal to at least 1.10 times the amount required to pay the annual installments of principal of and interest (not including capitalized interest) on all outstanding sewer revenue bonds and any other obligations which by their terms are payable from the Net Revenues of the Utility which are outstanding from time to time, as the same become due, and to maintain a reasonable reserve for the payment of such principal and interest, as hereinafter provided. Section 7. From and after the issuance of the Series 1996 Bonds and throughout the time any of the Bonds are outstanding, the Gross Revenues of the Utility shall continue to be set aside into the City's Sewer Revenue Fund (the "Revenue Fund"), which shall be used in maintaining and operating the Utility, and after payment of the proper necessary maintenance and operation expenses, the remaining Net Revenues shall, to the extent hereinafter provided, be used to pay the interest on and principal of the Bonds, and to create and maintain a reserve therefor. Section 8. The amounts to be set aside and paid into the City's Sewer Revenue Bond Sinking Fund (the "Sinking Fund"), in equal monthly installments, shall be sufficient to pay the interest and principal due in each year on all of the Bonds from time to time outstanding. In order to pay maturing installments of principal of and interest on the Series 1996 Bonds, it is hereby determined that payments shall be made each month into the Sinking Fund from the Net Revenues of the Utility and that the minimum amount to be so set aside into the Sinking Fund from the Net Revenues during each month of each year shall be not less than as follows: A sum equal to one-twelfth (1/12) of the principal of all Series 1996 Bonds maturing on the December 1 next succeeding, plus a sum equal to one-sixth (1/6) of the interest becoming due on the next succeeding interest payment date on all of the outstanding Series 1996 Bonds; provided, however, that no further payments need be made into the Sinking Fund when and so long as the amount therein is sufficient to retire all of the Bonds then outstanding and to pay all interest to become due thereon prior to such retirement or funds sufficient therefor have been set aside and pledged for that purpose. All of such payments required to be made into the Sinking Fund shall be made in equal monthly installments as hereinbefore provided on the first day of each month, except that when the first day of any month shall be a Sunday or legal holiday, then such payments shall be made on the next succeeding secular day. The Sinking Fund and that portion of the Net Revenues contained therein shall be used solely and only and are hereby pledged for the purpose of paying the interest on and principal of the Bonds, and for no other purpose. If and to whatever extent any Parity Bonds are issued under the conditions and restrictions set forth in this -13- DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI • resolution, provisions shall be made for increasing such payments into the Sinking Fund to meet maturing installments of principal of and interest on such Parity Bonds. If at any time there be a failure to pay into the Sinking Fund the full amount above stipulated, then an amount equivalent to the deficiency shall be set apart and paid into the Sinking Fund from the Net Revenues of the Utility as soon as available, and the same shall be in addition to the amount otherwise required to be so set apart and paid into the Sinking Fund. Section 9. There shall be set apart and paid from legally available funds of the City at the time of the delivery of the Series 1996 Bonds a sum equal to $351,500, which amount is equal to the lesser of: 1) 125% of the average annual debt service on the Series 1996 Bonds; or 2) 100% of the maximum annual debt service on the Series 1996 Bonds; or 3) 10% of the proceeds of the Series 1996 Bonds. Thereafter, the Reserve Fund shall be maintained at the "Required Reserve Fund Balance", which at any time of calculation is an amount equal to the lesser of: 1. 125% of the average annual debt service on the then outstanding Series 1996 Bonds and any then outstanding Parity Bonds; or 2. 100% of the maximum annual debt service on the then outstanding Series 1996 Bonds and any then outstanding Parity Bonds; or 3. 10% of the proceeds of the Series 1996 Bonds, plus 10% of the proceeds of each issue of then outstanding Parity Bonds. Prior to the issuance of any Parity Bonds, the City shall deposit into the Reserve Fund sufficient funds so that the balance of the Reserve Fund shall equal the Required Reserve Fund Balance calculated on the basis of the proposed Parity Bonds having been issued. Whenever the sum on deposit in the Reserve Fund has been reduced to less than the Required Reserve Fund Balance by the expenditure of all or a portion of the funds on deposit therein for any of the purposes specified herein there shall be deposited into the Reserve Fund from.the next available Net Revenues, after first making the required deposits into the Sinking Fund, amounts sufficient so that the sum on deposit in the Reserve Fund has been restored to the Required Reserve Fund Balance until the amount on deposit in the Reserve Fund has been restored to the Required Reserve Fund Balance. From and after the issuance of the Series 1996 Bonds and throughout the time any of the Bonds are outstanding, all money credited to the Reserve Fund shall be used and is hereby pledged for the payment of the principal of and interest on the Bonds whenever for any reason the funds on deposit in the Sinking Fund are insufficient to pay such principal and interest when due. If and to whatever extent Parity Bonds shall be issued under the conditions set -14- (Rev.) DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI forth in this resolution, provision shall be made to create and maintain a reasonable reserve therefor. Section 10. From and after the issuance of the Series 1996 Bonds and throughout the time any of the Series 1996 Bonds are outstanding, the City shall continue to maintain its Sewer Improvement Fund (the "Improvement Fund"), and there shall be set apart and paid from the balance of the Net Revenues remaining, after first making the required payments into the Sinking Fund and the required payments into the Reserve Fund, the sum of $17,000 on the first day of each month of each year until such time as there has been accumulated in the Improvement Fund the sum of $1,000,000 (the "Required Improvement Fund Balance"). If and to whatever extent it may become necessary to usee such accumulated funds for any of the purposes hereinafter specified, payments into the Improvement Fund shall be resumed until such time as the money on deposit in the Improvement Fund again equals the Required Improvement Fund Balance. All money credited to the Improvement Fund shall be used solely and only for the following purposes and with the following priorities: a. First, if for any reason there exists a deficiency in the Sinking Fund and provided sufficient amounts are not available in the Revenue Fund or the Reserve Fund to pay such deficiency, there shall be paid into the Sinking Fund an amount equal to the deficiency from the amounts on deposit in the Improvement Fund. b. Second, money in the Improvement fund shall be transferred and credited to the Reserve Fund whenever any deficiency may exist in the Reserve Fund. C. Third, money in the Improvement fund may be used to pay for the cost of capital improvements and extensions to the Utility, provided, however, that prior to any such expenditures no deficiency exists in the Sinking Fund and the Reserve Fund. Section 11. There shall be set apart and paid into the City's Surplus Fund all of the Net Revenues remaining after first making the required payments into the Sinking Fund, the Reserve Fund and the Improvement Fund. All money credited to the Surplus Fund shall be transferred and credited to the Sinking Fund whenever necessary to prevent or remedy a default in the payment of the principal of or interest on the Bonds or shall be transferred and credited to the Reserve Fund whenever any deficiency may exist in the Reserve Fund, or shall be transferred and . credited to the Improvement fund whenever any deficiency may exist in the payments required to be made into the Improvement Fund. Any balance in the Surplus Fund may be made available to the City as the Council, or such other duly constituted body as may then be charged with the operation of the Utility, may from time to time direct. -15- DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI Section 12. All money held in any fund created or to be maintained under the terms of this resolution shall be deposited in lawful depositories of the City or invested in accordance with Chapters 12B and 12C of the Code of Iowa and continuously held and secured as provided by the laws of the State of Iowa relating to the depositing, securing, holding and investing of public funds. All interest received by the City as a result of investments under this section shall be considered to constitute Gross Revenues of the Utility and shall be deposited in or transferred to the Revenue Fund and used solely and only for the purposes specified herein for such fund. Section 13. The Cityhereby covenants and agrees with the owner or owners Y g of the Bonds, or any of them, that from time to time may be outstanding, that it will faithfully and punctually perform all duties with reference to the Utility required and provided by the Constitution and laws of the State of Iowa, that it will segregate the Gross Revenues of the Utility and make application thereof in accordance with the provisions of this resolution and that it will not sell, lease or in any manner dispose of the Utility or any part thereof, including any and all extensions and additions that may be made thereto, until all of the Bonds shall have been paid in full, both principal and interest, or unless and until provisions shall have been made for the payment of said Bonds and interest thereon in full; provided, however, that the City may dispose of any property which in the judgment of the Council, or the duly constituted body as may then be charged with the operation of the Utility, is no longer useful or profitable in the operation of the Utility nor essential to the continued operation thereof and when the sale thereof will not operate to reduce the revenues to be derived from the operation of the Utility. Section 14. Upon a breach or default of a term of the Bonds and this resolution, a proceeding may be brought in law or in equity by suit, action or mandamus to enforce and compel performance of the duties required under the terms of this Resolution and Division V of Chapter 384 of the Code of Iowa or an action may be brought to obtain the appointment of a receiver to take possession of and operate the Utility and to perform the duties required by this resolution and Division V of Chapter 384 of the Code of Iowa. Section 15. The Bonds shall not be entitled to priority or preference one over the other in the application of the Net Revenues of the Utility regardless of the time or times of the issuance of such Bonds, it being the intention that there shall be no priority among the Bonds regardless of the fact that they may have been actually issued and delivered at different times. The City hereby covenants and agrees that so long as any of the Bonds are outstanding and unpaid, no other bonds or obligations payable from the Net Revenues of the Utility will be issued except upon the basis of such additional bonds or obligations being subject to the priority and security for payment of any Bonds then outstanding; provided, however, that the City reserves the right and privilege of issuing Parity Bonds in order to pay the cost of improvements and extensions to the Utility or for refunding any bonds or obligations payable from the Net Revenues of the Utility, but only if there shall -16- DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI have first been procured and filed with the City Clerk a statement by an independent certified public accountant, consulting engineer or financial consultant, not in the regular employ of the City, reciting the opinion, based upon necessary investigations, that the officially reported Net Revenues of the Utility for the last preceding fiscal year prior to the issuance of such Parity Bonds (with adjustments as hereinafter provided) were equal to at least 125 Per Cent of the maximum amount that will become due in any subsequent fiscal year during the life of any of the then outstanding Bonds for both the principal of and interest on the Bonds then outstanding and the Parity Bonds then proposed to be issued. The amount of Gross Revenues of the Utility may be adjusted for the purpose of the foregoing computations by a consulting engineer, not a regular employee of the City, so as to reflect any revision in the schedule of rates and charges being imposed at the time of the issuance of any such Parity Bonds. Bonds issued to refund any of the Bonds shall not be subject to the foregoing restrictions, provided the Bonds being refunded mature within three (3) months of the date of such refunding and no other funds are available to pay such maturing bonds, but otherwise any refunding bonds ranking on a parity shall only be issued subject to the restrictions of this resolution. Section 16. The City agrees that so long as any of the Bonds remain outstanding it will maintain insurance for the benefit of the owners of the Bonds upon all properties of the Utility which may be of an insurable nature, such insurance to be of a type and kind and in an amount which usually would be carried by other municipalities or private companies rendering services of a similar character. The proceeds of any insurance, except liability insurance, shall be used to repair or replace the part or parts of the Utility damaged or destroyed, or if not so used shall be placed in the Revenue Improvement Fund. The City will keep proper books of record and account, separate from all other records and accounts, showing the complete and correct entries of all transactions relating to the Utility, in accordance with generally accepted accounting practices and will cause the books and accounts to be audited annually. The original purchaser of the Series 1996 Bonds and any owners of outstanding Bonds shall have the right at all reasonable times to inspect the Utility and all records, accounts and data of the City relating thereto. Section 17. The provisions of this resolution shall constitute a contract between the City and the owners of the Bonds, and after the issuance of the Bonds, no change, variation or alteration of any kind of the provisions of this resolution shall be made which will adversely affect the owners of the Bonds until all of the Bonds and the interest thereon shall have been paid in full, except as hereinafter provided. The owners of two-thirds (2/3) in principal amount of the Bonds and Parity Bonds at any time outstanding (not including in any case any obligations which may then be held or owned by or for the account of the City, but including such -17- DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI obligations as may be issued for the purpose of refunding any of the Bonds or Parity Bonds if such obligations shall not then be owned by the City) shall have the right from time to time to consent to and approve the adoption by the City of a resolution or resolutions modifying or amending any of the terms or provisions contained in this resolution; provided, however, that this resolution may not be so modified or amended in such manner as to: (a) Make any change in the maturity or redemption terms of the Bonds or any Parity Bonds. (b) Make any change in the rate of interest borne by any of the Bonds or any Parity Bonds. (c) Reduce the amount of the principal payable on any Bonds or any Parity Bonds. (d) Modify the terms of payment of principal of or interest on the Bonds or any Parity Bonds, or any of them, or impose any conditions with respect to such payment. (e) Affect the rights of the owners of less than all of the Bonds or any Parity Bonds then outstanding. (f) Reduce the percentage of the principal amount of the Bonds or any Parity Bonds, the consent of the owners of which shall be required to effect a further modification. Whenever the City shall propose to amend or modify this resolution under the provisions of this section, it shall (1) prior to the publication of the notice hereinafter provided for in (2), cause notice of the proposed amendment to be mailed to each of the owners of the Bonds and Parity Bonds at the addresses appearing on the registration books of the City and also to the Lender, and (2) cause notice of the proposed amendment to be published one time in a newspaper published and/or having a general circulation in the City of Ames, Iowa. Such notice shall briefly set forth the nature of the proposed amendment and shall state that a copy of the proposed amendatory resolution is on file in the office of the City Clerk. If the owners of at least two-thirds (2/3) in aggregate principal amount of the Bonds and Parity Bonds outstanding at the time of the adoption of such amendatory resolution shall have consented to and approved the adoption thereof as herein provided, no owner of any Bonds or Parity Bonds shall have any right or interest to object to the adoption of such amendatory resolution or to object to any of the terms or provisions therein contained or to the operation thereof or to enjoin or restrain the City from taking any action pursuant to the provisions thereof. -18- DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA i Ames/419370-10/2nd 1/2 RBS/RBI Any consent given by the owners of a Bond or Parity Bond pursuant to the provisions of this section shall be irrevocable for a period of six (6) months from the date of such consent and shall be conclusive and binding upon all future owners of the same Bond or Parity Bond during such period. Such consent may be revoked at any time after six (6) months from the date of such consent by the owner who gave such consent or by a successor in title, but such revocation shall not be effective if the owners of two-thirds (2/3) in aggregate principal amount of the Bonds and Parity Bonds outstanding as in this section defined shall have, prior to the attempted revocation, consented to and approved the amendatory resolution referred to in such revocation. ' The fact and date of the execution of any instrument under the provisions of this section may be proved by the certificate of any officer in any jurisdiction who by the laws thereof is authorized to take acknowledgments of deeds within such jurisdiction, that the persons signing such instrument acknowledged before him the execution thereof, or may be proved by an affidavit of a witness to such execution sworn to before such officer. Section 18. It is the intention of the City that interest on the Series 1996 Bonds be and remain excluded from gross income for federal income tax purposes pursuant to the appropriate provisions of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations in effect with respect thereto (all of the foregoing herein referred to as the "Internal Revenue Code"). In furtherance thereof the City covenants to comply with the provisions of the Internal Revenue Code as they may from time to time be in effect or amended and further covenants to comply with applicable future laws, regulations, published rulings and court decisions as may be necessary to insure that the interest on the Series 1996 Bonds will remain excluded from gross income for federal income tax purposes. Any and all of the officers of the City are hereby authorized and directed to take any and all actions as may be necessary to comply with the covenants herein contained. Section 19. Continuing Disclosure. (a) Purpose and Beneficiaries. To provide for the public availability of certain information relating to the Bonds and the security therefor and to permit the original purchaser and other participating underwriters in the primary offering of the Bonds to comply with amendments to Rule 15c2-12 promulgated by the Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934 (17 C.F.R. § 240.15c2-12), relating to continuing disclosure (as in effect and interpreted from time to time, the "Rule"), which will enhance the marketability of the Bonds, the City hereby makes the following covenants and agreements for the benefit of the Owners (as hereinafter defined) from time to time of the Outstanding Bonds. The City is the only "obligated person" in respect of the Bonds within the meaning of the Rule for purposes of identifying the entities in respect of which continuing disclosure must be made. The City has complied in all material respects with any undertaking previously entered into by it under the Rule. -19- DORSEY & WHITNEY L.L.P., ATTORNEYS, DES MOINES, IOWA Ames/419370-10/2nd 1/2 RBS/RBI If the City fails to comply with any provisions of this section, any person aggrieved thereby, including the Owners of any outstanding Bonds, may take whatever action at law or in equity may appear necessary or appropriate to enforce performance and observance of any agreement or covenant contained in this section, including an action for a writ of mandamus or specific performance. Direct, indirect, consequential and punitive damages shall not be recoverable for any default hereunder to the extent permitted by law. Notwithstanding anything to the contrary contained herein, in no event shall a default under this section constitute a default under the Bonds or under any other provision of this resolution. As used in this section, "Owner" or "Bondowner" means, in respect of a Bond, the registered owner or owners thereof appearing in the bond register maintained by the Registrar or any "Beneficial Owner" (as hereinafter defined) thereof, if such Beneficial Owner provides to the Registrar evidence of such beneficial ownership in form and substance reasonably satisfactory to the Registrar. As used herein, "Beneficial Owner" means, in respect of a Bond, any person or entity which (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, such Bond (including persons or entities holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of the Bond for federal income tax purposes. (b) Information To Be Disclosed. The City will provide, in the manner set forth in subsection (c) hereof, either directly or indirectly through an agent designated by the City, the following information at the following times: (1) on or within 210 days after the end of each fiscal year of the City, commencing with the fiscal year ending June 30, 1996 the following financial information and operating data in respect of the City (the "Disclosure Information"): (A) the audited financial statements of the City for such fiscal year, accompanied by the audit report and opinion of the accountant or government auditor relating thereto, as permitted or required by the laws of the State of Iowa, containing balance sheets as of the end of such fiscal year and a statement of operations, changes in fund balances and cash flows for the fiscal year then ended, showing in comparative form such figures for the preceding fiscal year of the City, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under Iowa law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with such generally accepted accounting principles for reasons beyond the reasonable control of the City, noting the discrepancies therefrom and the effect thereof, and certified as to accuracy and completeness in all material respects by the fiscal officer of the City; and -20- Ames/419370-10/2nd 1/2 RBS/RBI (B) To the extent not included in the financial statements referred to in paragraph (A) hereof, the information for such fiscal year or for the period most recently available of the type contained in the following tables in the Official Statement, which information may be unaudited: Table 9 - Six-Year Historical Usage of Sewer Utility Table 10 - Largest Sewer Utility Users Table 11 - Sewer Revenue Debt Outstanding by Issue Table 12 - City of Ames Sewer System Revenue Debt/ Schedule of Annual Debt Service Table 13 - Sewer Fund/Combining Statement of Revenues, Expenses and Changes in Retained Earnings Table 14 - Historic and Projected Sewer Fund/Operations and Debt Service Coverage Notwithstanding the foregoing paragraph, if the audited financial statements are not available by the date specified, the City shall provide on or before such date unaudited financial statements in the format required for the audited financial statements as part of the Disclosure Information and, within 10 days after the receipt thereof, the City shall provide the audited financial statements. Any or all of the Disclosure Information may be incorporated by reference, if it is updated as required hereby, from other documents, including official statements, which have been submitted to each of the repositories hereinafter referred to under subsection (b) or the SEC. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The City shall clearly identify in the Disclosure Information each document so incorporated by reference. If any part of the Disclosure Information can no longer be generated because the operations of the City have materially changed or been discontinued, such Disclosure Information need no longer be provided if the City includes in the Disclosure Information a statement to such effect; provided, however, if such operations have been replaced by other City operations in respect of which data is not included in the Disclosure Information and the City determines that certain specified data regarding such replacement operations would be a Material Fact (as defined in paragraph (3) hereof), then, from and after such determination, the Disclosure Information shall include such additional specified data regarding the replacement operations. If the Disclosure Information is changed or this section is amended as permitted by this paragraph (b)(1) or subsection (d), then the City shall include in the next Disclosure Information to be delivered hereunder, to the extent necessary, an -21- (Rev.) Ames/419370-10/2nd 1/2 RBS/RBI explanation of the reasons for the amendment and the effect of any change in the type of financial information or operating data provided. (2) In a timely manner, notice of the occurrence of any of the following events which is a Material Fact (as hereinafter defined): (A) Principal and interest payment delinquencies; (B) Non-payment related defaults; (C) Unscheduled draws on. debt service reserves reflecting financial difficulties; (D) Unscheduled draws on credit enhancements reflecting financial difficulties; (E) Substitution of credit or liquidity providers, or their failure to perform; (F) Adverse tax opinions or events affecting the tax-exempt status of the security; (G) Modifications to rights of security holders; (H) Bond calls; (I) Defeasances; (J) Release, substitution, or sale of property securing repayment of the securities; and (K) Rating changes. As used herein, a "Material Fact" is a fact as to which a substantial likelihood exists that a reasonably prudent investor would attach importance thereto in deciding to buy, hold or sell a Bond or, if not disclosed, would significantly alter the total information otherwise available to an investor from the Official Statement, information disclosed hereunder or information generally available to the public. Notwithstanding the foregoing sentence, a "Material Fact" is also an event that would be deemed "material" for purposes of the purchase, holding or sale of a Bond within the meaning of applicable federal securities laws, as interpreted at the time of discovery of the occurrence of the event. (3) In a timely manner, notice of the occurrence of any of the following events or conditions: (A) the failure of the City to provide the Disclosure Information required under paragraph (b)(1) at the time specified thereunder; (B) the amendment or supplementing of this section pursuant to subsection (d), together with a copy of such amendment or supplement and any explanation provided by the City under subsection (d)(2); (C) the termination of the obligations of the City under this section pursuant to subsection (d); -22- Ames/419370-10/2nd 1/2 RBS/RBI (D) any change in the accounting principles pursuant to which the financial statements constituting a portion of the Disclosure Information or the audited financial statements furnished pursuant to subsection (b)(2) or (3) are prepared; and (E) any change in the fiscal year of the City. (c) Manner of Disclosure. The City agrees to make available the information described in subsection (b) to the following entities by telecopy, overnight delivery, mail or other means, as appropriate: (1) the information described in paragraph (1) of subsection (b), to each then nationally recognized municipal securities information repository under the Rule and to any state information depository then designated or operated by the State of Iowa as contemplated by the Rule (the "State Depository"'), if any; (2) the information described in paragraphs (2) and (3) of subsection (b), to the Municipal Securities Rulemaking Board and to the State Depository, if any; and (3) the information described in subsection (b), to any rating agency then maintaining a rating of the Bonds and, at the expense of such Bondowner, to any Bondowner who requests in writing such information, at the time of transmission under paragraphs (1) or (2) of this subsection (c), as the case may be, or, if such information is transmitted with a subsequent time of release, at the time such information is to be released. (d) Term: Amendments: Interpretation. (1) The covenants of the City in this section shall remain in effect so long as any Bonds are outstanding. Notwithstanding the preceding sentence, however, the obligations of the City under this section shall terminate and be without further effect as of any date on which the City delivers to the Registrar an opinion of Bond Counsel to the effect that, because of legislative action or final judicial or administrative actions or proceedings, the failure of the City to comply with the requirements of this section will not cause participating underwriters in the primary offering of the Bonds to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended, or any statutes or laws successory thereto or amendatory thereof. (2) This section (and the form and requirements of the Disclosure Information) may be amended or supplemented by the City from time to time, without notice to (except as provided in paragraph (c)(3) hereof) or the consent of the Owners of any Bonds, by a resolution of this Council filed in the office of the recording officer of the City accompanied by an opinion of Bond Counsel, who may rely on certificates of the City and others and the opinion may be subject to customary qualifications, to the effect that: (i) such amendment or supplement (a) is made in connection with a change in circumstances that arises from a change in law -23- (Rev.) Ames/419370-10/2nd 1/2 RBS/RBI or regulation or a change in the identity, nature or status of the City or the type of operations conducted by the City, or (b) is required by, or better complies with, the provisions of paragraph (b)(5) of the Rule; (ii) this section as so amended or supplemented would have complied with the requirements of paragraph (b)(5) of the Rule at the time of the primary offering of the Bonds, giving effect to any change in circumstances applicable under clause (i)(a) and assuming that the Rule as in effect and interpreted at the time of the amendment or supplement was in effect at the time of the primary offering; and (iii) such amendment or supplement does not materially impair the interests of the Bondowners under the Rule. If the Disclosure Information is so amended, the City agrees to provide, contemporaneously with the effectiveness of such amendment, an explanation of the reasons for the amendment and the effect, if any, of the change in the type of financial information or operating data being provided hereunder. (3) This section is entered into to comply with the continuing disclosure provisions of the Rule and should be construed so as to satisfy the requirements of paragraph (b)(5) of the Rule. (e) Further Limitation of Liability of City. In and to the extent the limitations of liability contained in subsection (a) are not effective, anything contained in this section to the contrary notwithstanding, in making the agreements, provisions and covenants set forth in this section, the City has not obligated itself except with respect to the Net Revenues of the Utility. None of the agreements or obligations of the City contained herein shall be construed to constitute an indebtedness of the City within the meaning of any constitutional or statutory provisions whatsoever or constitute a pledge of the general credit or taxing powers of the City. Section 20. If any section, paragraph, clause or provision of this resolution shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this resolution. Section 21. All resolutions and orders or parts thereof in conflict with the provisions of this resolution are, to the extent of such conflict, hereby repealed. Section 22. This resolution shall be in full force and effect immediately upon its adoption and approval, as provided by law. Passed and approved on March 5, 1996. Mayor Attest: City Clerk -24- Ames/419370-10/2nd 1/2 RBS/RBI STATE OF IOWA COUNTY OF STORY SS: CITY OF AMES I, the undersigned City Clerk of the aforementioned City, do hereby certify that the above and foregoing is a true and correct copy of the minutes of a meeting of the Council of such City, held as therein shown, including a true and correct copy of the resolution providing for the form and issuance of Sewer Revenue Refunding Bonds, Series 1996. WITNESS MY HAND and the seal of the City hereto affixed this `� day of 1 LC I` 1996. City Clerk (Seal) -25- Ames/419370-10/2nd 1/2 RBS/RBI STATE OF IOWA COUNTY OF STORY SS: CITY OF AMES 1, the undersigned Clerk of the City, do hereby certify that the City did heretofore establish a Municipal Sanitary Sewer System (hereinafter referred to as the "Utility"), that the management and control of the Utility are vested in the Council of the City and that no board of trustees exists which has any part of the control and management of the Utility. I further certify that there is not pending or threatened any question or litigation whatsoever touching the establishment, improvement or operation of the Utility and that there are no bonds or other obligations of any kind now outstanding which are payable from or constitute a lien upon the revenues derived from the operation of the Utility, except for the present issue of Sewer Revenue Refunding Bonds, Series 1996, of the City, and except for the City's Sewer Revenue Bonds, Series 1987 and Series 1987B which will be refunded with the proceeds of the Series 1996 Bonds on June 1, 1996. ,__,- WITNESS MY HAND and the seal of the City hereto affixed this < i day of 1996. City Clerk (Seal) i i -26- Ames/419370-10/Exh A(DTC) EXHIBIT A TO RESOLUTION NO. 96-117 AUTHORIZING THE ISSUANCE OF $3,515,000 SEWER REVENUE REFUNDING BONDS, SERIES 1996 DTC PROVISIONS Notwithstanding anything contained in Resolution No. 96-117 adopted by the City of Ames, Iowa (the "City") on March 5, 1996 (the "Resolution"), authorizing the issuance of the City's $3,515,000 Sewer Revenue Refunding Bonds, Series 1996, dated March 15, 1996 (the "Series 1996 Bonds"), to the contrary, the Series 1996 Bonds shall be issued initially as Depository Bonds, with one fully registered Series 1996 Bond for each maturity date, in principal amounts equal to the amount of principal maturing on each such date, and registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). On original issue, the Series 1996 Bonds shall be deposited with DTC for the purpose of maintaining a book-entry system for recording the ownership interests of its participants and the transfer of those interests among its participants (the "Participants"). In the event that DTC determines not to continue to act as securities depository for the Series 1996 Bonds or the City determines not to continue the book-entry system for recording ownership interests in the Series 1996 Bonds with DTC, the City will discontinue the book-entry system with DTC. If the City does not select another qualified securities depository to replace DTC (or a successor depository) in order to continue a book-entry system, the City will register and deliver replacement bonds in the form of fully registered certificates, in authorized denominations of $5,000 or integral multiples of $5,000, in accordance with instructions from Cede & Co., as nominee for DTC. In the event that the City identifies a qualified securities depository to replace DTC, the City will register and deliver replacement bonds, fully registered in the name of such depository, or its nominee, in the denominations as set forth above, as reduced from time to time prior to maturity in connection with redemptions or retirements by call or payment, and in such event, such depository will then maintain the book-entry system for recording ownership interests in the Series 1996 Bonds. Ownership interest in the Series 1996 Bonds may be purchased by or through Participants. Such Participants and the persons for whom they acquire interest in the Series 1996 Bonds as nominees will not receive certificated Series 1996 Bonds, but each such Participant will receive a credit balance in the records of DTC in the amount of such Participant's interest in the Series 1996 Bonds, which will be confirmed in accordance with DTC's standard procedures. Each such person for which a Participant has an interest in the Series 1996 Bonds, as nominee, may desire to make arrangements with such Participant to have all notices of redemption or other communications of the City to DTC, which may affect such person, forwarded in writing by such Participant and to have notification made of all interest payments. -1- Ames/419370-10/Exh A(DTC) The City will have no responsibility or obligation to such Participants or the persons for whom they act as nominees with respect to payment to or providing of notice for such Participants or the persons for which they act as nominees. As used herein, the term 'Beneficial Owner" shall hereinafter be deemed to include the person for whom the Participant acquires an interest in the Series 1996 Bonds. DTC will receive payments from the City, to be remitted by DTC to the Participants for subsequent disbursement to the Beneficial Owners. The ownership interest of each Beneficial Owner in the Series 1996 Bonds will be recorded on the records of the Participants whose ownership interest will be recorded on a computerized book-entry system kept by DTC. When reference is made to any action which is required or permitted to be taken by the Beneficial Owners, such reference shall only relate to those permitted to act (by statute, regulation or otherwise) on behalf of such Beneficial Owners for such purposes. When notices are given they shall be sent by the City to DTC. DTC shall forward (or cause to be forwarded) the notices to the Participants so that the Participants can forward the same to the Beneficial Owners. Beneficial Owners will receive written confirmations of their purchases from the Participants acting on behalf of the Beneficial Owners detailing the terms of the Series 1996 Bonds acquired. Transfers of ownership interest in the Series 1996 Bonds will be accomplished by book entries made by DTC and the Participants who act on behalf of the Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interest in the Series 1996 Bonds, except as specifically provided herein. Interest and principal will be paid when due by the City to DTC, then paid by DTC to the Participants and thereafter paid by the Participants to the Beneficial Owners. -2-