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HomeMy WebLinkAboutA009 - Letter to Dorsey & Whitney dated October 3, 2002 - executed proceedingsCaring People 'I Quality Programs E­priowl Service October 3, 2002 Mr. Robert H. Helmick Dorsey & Whitney LLP 801 Grand, Suite 3900 Des Moines, Iowa 50309 City Clerk's Office 515 Clark Avenue, 11. 0. Box 811 Anies, 1A 50010 Phone: 515-239-5105 Fax: 515-239-5142 RE: Ames, Iowa $5,885,000 General Obligation Corporate Purpose Bonds, Series 2002B Your File No. 419370-25 General Obligation Refunding Bonds, Series 2002C Your File No. 419370-27 AY,lectric Revenue Refunding Bonds, Series 2002D our File No. 41937 28 Dear Mr. Helmick: Enclosed please find fully executed copies of the proceedings necessary to carry out the hearing, sale, and issuance of the above -captioned Bonds at the meeting of the Ames City Council held on September 24, 2002. Absent from these proceedings is the certificate attesting to the mailing ofthe Notice of Redemption pertaining to the Electric Revenue Refunding Bonds, Series 20021); it will be forwarded to you as soon as we have received the return receipt from the Post Office. If you have any questions, please call me. Sincerely, Diane Voss City Clerk /dry Enclosures Anies/419370-28/2"' '/z R13S & R131 MINUTES OF MEETING TO ADOPT RESOLUTION PROVIDING FOR THE FORM AND ISSUANCE OF BONDS 419370 - 9 (2nd V2RBS/RBI) Ames, Iowa September 24, 2002 The City Council net at the Council Chambers, City Hall, in the City, on September 24, 2002 at -- seven o'clock p.m. The Mayor presided and the roll being called, the following named Council Members were present: Present: Cross, Goodhue, Hoffman, Quirmbach, Vegge, Wirth Absent: None This being the time and place fixed in the published Notice of Sale for the consideration of proposals for the purchase of the City's Electric Revenue Refunding Bonds, Series 2002D, 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 Notice of Sale. Whereupon, the substance of such bids was noted in the minutes, as follows: Name and Address of Bidder Final Bid (interest cost) (ATTACH BID TABULATION I-IE.RL) -I- DORSFN & WHITNEX H-11, ATTORNEYS, DES MOINE's, IOWA Ames/419370-28/2"'/, RBS & R131 The Council took up for consideration the resolution next hereinafter set out, which was introduced by Council Member Cross who moved that the resolution be adopted, seconded by Council Member Goodhue The Mayor put the question on the motion and the roll being called, the following named Council Members voted: Ayes: Cross, Goodhue, Hoffman� Quirmbach, Vegge, Wirth Nays: None Whereupon, the Mayor declared the motion duly carried and the resolution duly adopted as hereinafter set out. At the conclusion of the meeting, and upon motion and vote, the Council adjourned. Mayor Attest: City Clerk DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Arnes/419370-28/2" '/, RBS & RM RESOLUTION NO. 02-523 Resolution providing for the sale and issuance and securing the payment of Electric Revenue Refunding Bonds, Series 2002D WHEREAS, the City of Ames, in Story County, Iowa (hereinafter sometimes referred to as the "City") heretofore established a Municipal Electric Light and Power Plant and System in and for the City (hereinafter sometimes referred to as the "Utility"); and WHEREAS, the management and control of such 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, 1993, the City issued its $20,745,000 (the "Series 1993 Bonds"), pursuant to a resolution duly adopted by the City Council on Mal -ell 29, 1993 (the "Series 1993 Bond Resolution"), of which $9,985,000 remain outstanding (the "Series 1993 Bonds") which are scheduled to mature on January 1. in each of the years and bearing interest at the respective rates as follows: Principal Interest Rate Principal Interest Rate Year Amount Per AnnUrn Year Amount Per Annum 2003 $1,465,000 50/1) 2006 $1,700,000 5. 3 0 `/o 2004 $1,540,000 5.10% 2007 $1,785,000 5.40%o 2005 $1,615,000 5.20% 2008 $1,880,000 5.50% and, in and by the Series 1993 Bond Resolution, the outstanding Series 1993 Bonds may be redeemed by the City prior to maturity oil any date; and WHEREAS, the City has heretofore proposed to issue its Electric Revenue Refunding Bonds, Series 2002D (the "Series 2002D Bonds"), for the purpose of refunding the Series 1993 Bonds, and has published notice of such proposal and has held a hearing thereon; and WHEREAS, pursuant to notice duly published and in strict compliance with the provisions of Chapter 75 of the Code of Iowa, scaled bids for the purchase of the Series 2002D Bonds have been received and canvassed on behalf of the City and, upon final consideration by the City Council of all such bids received, it appears that the bid of 1411 f rh i n on Shor-key Erl P)j & Co. is the best, such bid proposing the lowest interest cost to the City; and WHEREAS, it now becomes advisable and necessary and for the best interests of the City and its inhabitants that the Series 2002D Bonds be issued and delivered; NOW, THEREFORE, Be It Resolved by the City Council of the City of Allies, Iowa, as follows: -3- DORSEY & WHITNEY LLP, ATTORNEYS, DI-S MOINES, IOWA Arnes/419370-28/2" '/z RBS & R131 Section 1. The bid referred to in the preamble hereof is hereby accepted, and the Series 2002D Bonds, in the total aggregate principal amount of maturing on January I in each of the years, in the respective principal amounts and hearing interest at the respective rates, as follows: Principal Interest Rate Principal Interest Rate Year Amount Per Annum Year Amount Per Annurn 2003 $215,000 2.50 % 2006 $ 1, 820, 000 2,50% 2004 $1,750,000 2.50 % 2007 S 1, 860, 000 2.75% 2005 $1,750,000 2. 50 'yo 2008 S 1- 19.5.1000 ...3 -.-..00-'/o are hereby awarded to the said bidder at the price specified in such bid, with adjustments, if any, pursuant to the notice of sale, together with accrued interest. Section 2. The form of agreement of sale of the Series 2002D Bonds be and the same is hereby approved, and the Mayor and City 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. For the purpose referred to in the preamble hereof arid pursuant to Division V of Chapter 384 of the Code of Iowa, the Series 2002D Bonds are hereby authorized to be issued in the denomination of $5,000 each, or any integral multiple thereof, dated October 15, 2002, in the aggregate principal amount, maturing and hearing interest as set forth In Section I hereof. The City Treasurer is hereby designated as the Bond Registrar and Paying Agent for the Series 2002D Bonds and may be hereinafter referred to as the "Bond Registrar" or the "Paying Agent". None of the Series 2002D Bonds will be optional for redemption prior to maturity. All of the interest on the Series 2002D Bonds shall be payable semiannually on the first day of January and July in each year, commencing January 1, 2003. Payment of interest on the Series 2002D Bonds shall be made to the registered owners appearing oil 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 2002D 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 2002D Bond or Bonds at the office of the Paying Agent. The Series 2002D Bonds shall be executed on behalf of the City with the official manual or facsimile signature ofthe Mayor and attested with 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 2002D Bonds shall be recorded in the office of the City Treasurer and the certificate on the back of each Series 2002D 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 oil the Series -4- DORSEY & WI-ii,rNEY LIT, ATTORNEYS, DES MOINES, IOWA Anics/419370-28/2"" '/, RBS & 1<111 2002D Bonds shall cease to be such officer before the delivery of such Series 2002D 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 2002D 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 hereinafter sometimes referred to as the "Parity Bonds") (the Series 2002D 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 pail 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 2002D 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 2002D 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 duty executed by the registered owner or the duty authorized attorney for such registered owner. The record and identity of the owners of the Series 2002D Bonds shall be kept confidential as provided by Section 22.7 of the Code of Iowa. The Series 2002D 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. Notwithstanding anything above to the contrary, the Series 2002D Bonds shall be issued initially as Depository Bonds, with one fully registered Series 2002D Bond for each maturity date, in aggregate principal amounts equal to the amount of principal maturing on each such date, and registered in the name of Cede & Co., as norninee to,- The Depository 'Trust Company, New York, New York ("DTC"). On original issue, the Series 2002D 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 2002D Bonds or the City determines not to continue the book -entry system for recording ownership interests in the Series 2002D 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 -5- DORSEY & WHITNEY LIT, ATTORNEYS, DE-S MOINFS, IOWA Ames/419370-28/2""/: RBS & R131 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 2002D Bonds. Ownership interest in the Series 2002D Bonds may be purchased by or through Participants. Such Participants and the persons for whom they acquire interest in the Series 2002D Bonds as nominees will not receive certificated Series 2002D Bonds, but each such Participant will receive a credit balance in the records of [)TC in the amount of such Participant's interest in the Series 2002D 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 2002D 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. 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 all interest in the Series 2002D 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 2002D 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 tile 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, and 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 oil behalf of the Beneficial Owners detailing the terms of the Series 2002D Bonds acquired. Transfers of ownership interest in the Series 2002D 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 2002D 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. Section 4. The Series 2002D Bonds shall be in substantially the following form: -6- DORSFY & WHITNEY LIT, ATTORNEYS, DES MOINFS, IOWA Ames/419370-28/2"' '/, R13S & R131 (Forth of Bond) UNITED STATES OF AMERICA STATE OF IOWA COUNTY OF STORY CITY OF AMES ELECTRIC REVENUE REFUNDING BOND SERIES 2002D No. $ RATE MATURITY DATE BOND DATE CUSIP October 15, 2002 The City of Ames (the "City"), in the County of Story, State of Iowa, for value received, promises to pay oil the maturity date of this Bond to or registered assigns, the principal sum of DOLLARS in lawful money of the United States ofAmericaupon presentation and Surrender of this Bond at the office of the City Treasurer, Allies, Iowa (hereinafter referred to as the "Bond Registrar" or the "Paying Agent"), with interest on said sutra, 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 January I and July I of each year, commencing January 1, 2003, except as the provisions hereinafter set forth with respect to redemption prior to maturity may be and become applicable hereto. Interest on this Bond is payable to the registered owner appearing on the bond registration books of the City at the close of business oil 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. 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 is one of a series of Electric Revenue Refunding Bonds, Series 2002D (tile "Series 2002D Bonds"), issued in the aggregate principal amount of $ _.__.___.__........__...._I by the City pursuant to and in strict compliance with the provisions of Division V of Chapter 384 of the Code of Iowa, 2001, and all other laws amendatory thereof and supplemental thereto, and in conformity with a resolution of the City Council of the City providing for the sale and issuance and securing the payment of the Series 2002D Bonds (the "Series 2002D Bond Resolution"), and reference is hereby made to the Series 2002D Bond Resolution for a more complete statement as to the source of payment of the Series 2002D Bonds and the rights of the owners of the Series 2002D Bonds. The Series 2002D Bonds are issued for the purpose of refunding the City's $9,985,000 Electric Revenue Refunding Bonds, Series 1993, and are not general obligations of the City, but -7- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Ames/419370-28/2"' '/, RBS & RM the Series 2002D 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 Series 2002D Bond Resolution, are payable solely and only out of the future Net Revenues of the Municipal Electric Light and Power Plant and 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 sLifflicient for the payment of this Bond and the interest hereon. None of the Bonds will be optional for redemption prior to maturity. 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 Flereby Certified, Recited and Declared that all acts, conditions and things required to exist, happen and be perfon-ned precedent to and in the issuance of the Series 2002D Bonds have existed, have happened and have been performed in due time, form and mariner, as required by law, and that the issuance of this Bond does not exceed or violate any constitutional or statutory limitation or provision. 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 October 15, 2002. Attest: (Facsimile Signature) City Clerk (Facsimile Signature) CITY OF AMES, IOWA By (Facsimile Signature) Mayor -8- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Arnes/419370-28/2"' '/, RBS & 1�111 (On the back of each Series 2002D Bond the following certificate shall be executed with the duly authorized facsimile signature of the City Treasurer): STATE OF IOWA COUNTY OF STORY SS CITY OF AMES CITY TREASURER'S CERTIFICATE The original Issuance of the Series 2002D Bonds of which this Bond is a part was duly and properly recorded in my office as of October 15, 2002, pursuant to Section 384.83(4) of the Code of Iowa. CITY OF AMES, IOWA By (Facsimile S4),,nature) City Treasurer (On each Series 2002D Bond there shall be a registration dateline and a certificate of authentication of the Bond Registrar in the following form:) Registration Date: (Registration Date) BOND REGISTRAR'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Series 2002D Bonds described in the within-mcntioncd Series 2002D Bond Resolution. CITY OF AMES, IOWA By (Signature) City Treasurer, Bond Registrar STATEMENT OF INSURANCE (If the Series 2002D Bonds are insured, there shall be printed thereon a "Statement of Insurance" in compliance with the recommendations of the municipal bond insurer.) -9- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Anies/419370-28/2"' 1/z 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 TEN ENT JT TEN - as tenants in common UTMA - as tenants by the entireties - as joint tenants with right of survivorship and not as tenants in cotrimon As Custodian for (Gust) (Minor) under Uniform Transfers to Minors Act (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. 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 "lust 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. -10- DORSEY & wHrrNEY LLP, AITORNEYS, DES MOINES, IOWA Ariies/419370-28/2"' 1/� RBS & R131 Section S. The Series 1993 Bonds are hereby called for redemption as of November 15, 2002 (the "Redemption Date"), and the City Treasurer is hereby authorized and directed to give notice of such redemption in accordance with the provisions of the Series 1993 Bond Resolution, by rnalling notice to each of the last known holders of the Series 1993 Bonds by certified trial], return receipt requested, not less than 30 and not more than 45 days prior to the Redemption Date. The form of'notice of redemption shall be as follows: -11- IX)RSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Ames/419370-29/2"' '/: RBS & RBI NOTICE OF BOND REDEMPTION CITY OF AMES, IOWA ELECTRIC REVENUE BONDS, SERIES 1993 DATED MAY 1, 1993 Notice is hereby given that the City of Ames, Iowa, has called for redemption as of November 15, 2002, $9,985,000 in aggregate principal amount of its Electric Revenue Bonds, Series 1993, dated May 1, 1993, currently outstanding, which are scheduled to mature on January I in each of the years, bear interest, CUSIP numbers, and are payable at the redemption prices, as follows: Principal Interest Rate CUSIP Redemption Year Amount Per AnIlLim Number Price 2003 $1,465,000* 5% 030843 ESI 100% 2004 $1,540,000* 5.10% 030843 ET9 I 001yo 2005 $1,615,000* 5.20% 030843 EU6 100% 2006 $1,700,000* 5.300/0 030843 EV4 1.00% 2007 $1,785,000* 5.40% 030843 EW2 100% 2008 $1,880,000* 5.50% 030843 EXO 100% Said Bonds of such issue should be presented to the City Treasurer, City hall, 515 Clark. Avenue, Ames, Iowa 50010, for retirement as of said redemption date at the price specified above, and all further interest will cease ou said redemption date. Under the provisions of the Interest and Dividend Compliance Act of 1983 (the "Act"), the City of Ames may be obligated to withhold 31% of the principal of the Series 1993 Bonds from any Series 1993 Bondowner who has failed to furnish the City with a valid taxpayer identification number and a certification that such owner is not subject to backup withholding under the Act. Owners who wish to avoid the application of these provisions should submit a completed W-9 when presenting their Series 1993 Bonds for prepayment. Additional Information may be obtained from the undersigned. CITY OF AMES, IOWA By: Sherry Meier City Treasurer *Indicates full call on CUSIP -12- DORSFY & wfii rNF.Y LIA), ATTORNEYS, DES MOINES, IOWA Ames/419370-29/2 nd '/, RIBS & RBI Section 6. The Series 2002D 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 to the purchaser, as determined by the Council, upon receipt of the purchase price thereof, with accrued interest thereon, and all action heretofore taken in connection with the sale and award of the Series 2002D Bonds is hereby ratified and confirmed in all respects. Concurrently with the issuance of the Series 2002D Bonds, a sufficient portion of the proceeds from the sale thereof (the "Series 2002D Bond Proceeds"), exclusive of accrued interest, together with other sufficient and legally available funds of the City, shall be set aside into the debt service fund subacCOLInt for the Series 1993 Bonds established as part of the City's Sinking Fund by the Series 1993 Bond Resolution, are hereby pledged solely and only and shall be used to pay the interest on the Series 1993 Bonds and to prepay the principal of thereof on the Redemption Date, To the extent the Series 2002D Bond Proceeds and other funds are not sufficient to pay the interest on the Series 1993 Bonds and to prepay the principal thereof on the Redemption .Date, the City hereby covenants that it will immediately make up such deficiency from other legally available funds so that such payment and prepayment shall be made on the Redemption Date. Any unexpended balance of the proceeds of' the Series 2002D Bonds remaining thereafter, plus any arnount 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 2002D Bonds on the first interest payment date. Section 7. 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 expenses are hereinafter sometimes referred to as the "Operating Expenses") for the next fiscal year, and to ]cave a balance of net revenues (herein referred to as the "Net Revenues") sufficient to pay the principal of and interest on all outstanding revenue bonds and any other obligations payable from such source, in the next fiscal year as the same become due, and to maintain a reasonable reserve for the payment of such principal and interest. Section 8. From and after the issuance of the Series 2002D 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 Electric Revenue Fund (the "Revenue Fund"), which shall continue to 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 -13- DORSE"Y & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Ames/419370-28/2"d �/� RIAS & R131 provided, be used to pay the interest oil and principal of the Bonds, and to create and maintain a reserve therefor. Section 9. From and after the issuance of the Series 2002D Bonds, the City shall continue to maintain its Electric Revenue Bond Sinking Fund (the "Sinking Fund"), and there shall be deposited into such fund from the future Net Revenues of the Utility such portion thereof as will be sufficient to pay the interest upon and principal of the Series 2002D Bonds as may be outstanding from time to time, and it is hereby determined that the minimum amount to be set aside into the Sinking Fund from the Net Revenues during each month of each year shall be not less than as follows: Commencing on or before November 1, 2002, to and Including December 1, 2002, a sum equal to one half (/2) of the principal of the Series 2002D Bonds maturing on January 1, 2003, plus a sum equal to one half (1/2) of the interest becoming due on the Series 2002D Bonds on. January 1, 2003; and Commencing January 1, 2003, and continuing thereafter, a sum equal to one - twelfth (1/12) of the principal of all Series 20021) Bonds maturing on the January I 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 2002D Bonds until the full amount of the principal and/or interest installment due on such January I or interest payment date is oil deposit in the Sinking Fund; 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. 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 oil 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 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 sane shall be in addition to the amount otherwise required to be so set apart and paid into the Sinking Fund. Section 10. There shall be set apart and paid into the City's Principal and Interest Reserve Account (the "Reserve Account") from proceeds of the Series 2002D Bonds at the time of their delivery, a sum which, together with the existing balance in the Reserve Account, will be equal to the lesser of (1) the maximurn amount of principal and interest becoming due on the Bonds in any succeeding fiscal year, (ii) 125% of the average amount of principal of and interest becoming due on the Bonds in any succeeding fiscal year; or (ill) 10% of the principal amount of the Bonds then outstanding (the "Required Reserve Account Balance"). Whenever the sum on deposit in the Reserve Account has been reduced to less than the Required Reserve Account -14- DORSEY & WHITNEY 1.1-P, ATTORNEYS, DES MOINES, 1OWA Ames/419370-28/2"' '/, RBS & RBI Balance by the expenditure of all or a portion of the funds on deposit therein for any of the purposes specified herein, the City shall set apart and pay into the Reserve Account each year the balance of the Net Revenues remaining after first making the required payments into the Sinking Fund, until the amount on deposit in the Reserve Account has been restored to the Required Reserve Account Balance. From and after the issuance of the Series 2002D Bonds and throughout the time any of the Bonds are outstanding, all funds credited to the Reserve Account shall be used and are 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 are issued under the conditions set forth in this resolution, provision shall be made to create and maintain a reasonable reserve therefor. Section 11. From and after the issuance of the Series 2002D Bonds and so long as any of the Bonds are Outstanding, the City shall continue to maintain its Surplus Account, into which there shall be set apart and paid all of the Net Revenues remaining after first making the required payments into the Sinking Fund and the Reserve Account, if any, and after the Reserve Account contains the Required Reserve Account Balance. All funds credited to the Surplus Account 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 Account whenever any deficiency may exist in the Reserve Account. As long as both the Sinking Fund and the Reserve Account have the full amounts required by this resolution to be on deposit therein, the remaining portion of the annual accumulation in the Surplus Account may be used as other remaining funds of the Surplus Account. Any balance in the Surplus Account may be made available to the City as the Council, or such other duly constituted body as may be then charged with the operation of the Utility, may from tirne to time direct. All payments required to be made into any fund or account referred to herein shall be made in equal monthly installments as herembefore 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. Section 12. All funds held in any fund or account created or required to be maintained under the terms of this resolution shall be deposited in lawful depositories of the City or invested in accordance with Chapters 452 and 453 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, or as may be otherwise required to comply with the rebate provisions of the Internal Revenue Code of 1986, as amended (the "Code"). All interest received by the City as a result of investments under this section in excess of the amount, if any, required to be paid to the United States Government in order to comply with the rebate provisions of the Code, 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 for such fund. The City hereby covenants and agrees that no such investment shall ever be made so as to cause the interest on the Bonds to become taxable as "arbitrage bonds" pursuant to the provisions of Section 148 the Code. -15- D(.)RSI.:,Y & WHITNEY LIT, A I-TORNFYS, DES MOINES, IOWA Ames/419370-28/2"' V� IMS & RM Section 13. The City hereby covenants and agrees with the owner or owners of the Bonds, or any of them, that from tinne 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 below the minimum requirements for the operation and maintenance thereof and for the payment of the amounts herembefore required to be made into the several separate funds and accounts as hereiribefore provided, and the proceeds derived from the sale of any such property 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 for such fund. Section 14. 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 fi-om 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 additional bonds from time to time payable from the Net Revenues of the Utility and ranking on a parity with the Series 2002D Bonds (herein referred to as the "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 have first been procured and filed with the City Clerk a statement by an independent certified public accountant not in the regular employ of the City reciting the opinion, based upon necessary investigations that the 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% of the average amount that will become due in any 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 tile foregoing computations by an independent Certified Public Accountant or 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. The amount of said Net Revenues may be further adjusted for such purpose by a consulting engineer as follows: (a) to the extent of any demand charges (as opposed to charges for the purchase of electric energy) paid under any interconnection agreement or contract with - 16- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINEIS, IOWA Ames/419370-28/2" '/x RBS & R131 another utility system for the interchange of electric service during said preceding fiscal year to the extent that such engineer estimates that such demand charges would have been eliminated or reduced by reason of the improvements and extensions then to be constructed; (b) to the extent that the engineer estimates that reduction in base load energy costs or savings in the cost of purchased power would have been effected if the improvements and extensions then to be constructed had been in operation during said preceding year; and (c) to the extent of the average annual Net Revenues of the first full fiscal year of operation of the improvements and extensions then to be constructed from the sale of` surplus power resulting from the addition to the Utility of said improvements and extensions; provided, however, that such sale or sales may be considered only to the extent the same are supported by firril contracts requiring the purchaser to pay for available surplus power or capacity whether or not it is in fact accepted by the purchaser. 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, or the issuance of the refunding bonds will not cause an increase in the annual debt service requirements during the life of any Bonds then outstanding which are not being refunded, but otherwise any Parity Bonds shall only be issued subject to the restrictions of this resolution. Section 15. 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 all amount which usually would be carried by other municipal electric utilities or private companies rendering services of a similar character, and all proceeds of any insurance, except liability insurance, shall be considered to constitute Gross Revenues of the Utility and shall be deposited in or transferred to the Revenue Fund and shall be used in making good the loss or damage in respect of which Such funds were paid, either by repairing the property damaged or replacing the property destroyed, or if not so needed, shall be used as otherwise provided for funds on deposit in the Revenue Fund. The payment of premiums for all insurance policies required under the provisions of this section shall be considered an Operating Expense. 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 the owners of any of the Bonds shall have the right at all reasonable times to inspect the physical properties of the Utility and all records, accounts and data of the City relating thereto. Section 16. The provisions of this resolution shall constitute a contract between the City and the owners of the Bonds as may be outstanding from time to time and after the issuance of any of the Bonds, no change, variation or alteration of any kind of the provisions of tills 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 a majority in principal amount of the Bonds at any time outstanding (not including in any case any obligations which may be then held or owned by or for the account of the City, but including such obligations as may be issued for the purpose of refunding any of the 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 Council, or such other duly constituted body -17- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINES, IOWA Ames/4 19370-28/2" '/, RBS & Rill as may be then charged with the operation of the Utility, 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 (b) Make any change in the rate of interest borne by any of the Bonds. (c) Reduce the amount of the principal payable oil any Bonds. (d) Modify the terms of payment of principal of or interest on the 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 then outstanding. (f) Reduce the percentage of the principal amount of the Bonds, the consent of the owners of which shall be required to effect a further modification. Wl'ienever the City shall propose to amend or modify this resolution under the provisions of this section, it shall cause notice of the proposed amendment to be mailed to each of the owners of the Bonds at the addresses appearing on the registration books of the City and also to the original purchaser or purchasers of the Bonds. Such notice shall briefly set forth the nature of the proposed amendment and shall swte that a copy of the proposed amendatory resolution is on file in the office of the City Clerk. If the owners of at least a majority in aggregate principal amount of the 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 shall have ally 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. Any consent given by the owners of a 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 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 a majority in aggregate principal amount of the 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. -18- DORSEY & WHITNEY LIT, ATTORNEYS, DES MOINES, IOWA Anies/419370-28/2"' V, RBS & R131 Section 17. 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 18. Upon the City depositing cash, which must be invested in evidences of indebtedness of the United States Government pledged to the payment of the Series 2002D Bonds in an amount which, together with interest carried, will be sufficient to pay principal of and interest and redemption premium, if any, on the Series 2002D Bonds as the become due, all obligations of the City under this resolution shall terminate, except for the obligation to cause to be paid (through application of the deposited funds) the principal of and interest and redemption premium, if any, on the Series 2002D Bonds. Section 19. It is the intention of the City that interest on the Series 2002D 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 2002D Bonds will rernain 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 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 September 24, 2002. Mayor Attest: City Clerk -19- DORSEY & WHITNEY LLP, ATTORNEYS, DES MOINE'S, IOWA Aines/419370-28/2"d '/z RBS & Rill STATE OF IOWA COUNTY OF STORY SS: CITY OF AMES 1, 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 sale and issuance of Electric Revenue Refunding Bonds, Series 2002D. I do further certify that no petition of protest or objections of any kind have beell tiled or made, nor has any appeal been taken to the District Court, from the decision of the Council to issue the aforesaid Bonds. WITNESS MY HAND and the sea] of the City hereto affixed this 241b_ day of September ,2002. City Clerk (Seal) (Attach here a copy of the successful bid.) -20- DORSEY & WIIITNI,1'Y LIT, ATTORNEYS, DES MOINES, IOWA TO: City of Ames Council Members and Administration FROM: David Dirks E'VINSI"N DODG11", INC. I SLJBJE("Y-. S7,620,000 Electric Revenue Refunding Bonds, Series 2002D Today, September 24, 2002, the scaled bids tabulated below were received, opened and reviewed. The bids reflect and are indicative of the current conditions in the tax- exempt market. BIDDER ADDRESS ...... . ......... . .... Hutchinson, Shockey, Erley & Co. Chicago, It., I Advest, Inc. I Wachovia Bank, N.A. US Bancorp Piper Jaffray HalTiSTrust & Savings Bank. R13C Dain Rauscher Inc. I Morgan Stanley DW Inc Charlotte, NC Charlotte, NC NIA _CZ�o) TIB $506,654.02 2.4272% $520,707.79 2.4357% $516,263,20 2.4700% Minneapolis, MN $523,181.21 2.4938'Yo Chicago, IL $528,921.75 2.5362% Denver, CO $534,184.48 2.5549% Chicago, IL $534,067.91 15757% WE RECOMMEND AWARD TO; Hutchinson, Shockey, Erley & Co. Thank you for the opportunity to be of service to the Cily of Allies, Iowa. We are available to answer any questions you inaly have on this or any other issue in the futures. 100 Court Avenue, Suite 215 Des Moines, 1A 50309 515/282-6138 FAX 515/282-0252 Sep-24-2002 12:28p,,n From-EVENSEN DODGE 6123713763 T-816 P 002/003 F-540 City of Ames, I owa 67,527,000 Liectric Pcvcmic Pc1unding lkmcbs, (ScricK 2002 ,Mlc Dat,c: 8c-ptcmbcr 24, 2002 Date l'oUll Ili I DSR Const Loan Port Net New D/S Old Net D/S "'avilq"s ;ISCAL IOIAL 10/15/2002 (2,333.79) (1,439,488.00) 1,436,154 21) ll,,15/2002 (8,466,26) (8,466.20) 8,40626 1/01/2003 200,802.50 (3,671,79) 257,130,11 1 ,08KJW80 1,430,979.09 6/30/2003 - - - 3,291.14 W01/2003 93,887.50 (8,725.41) 95,162.01) 186,484.80 101,322.71 1/01/2004 1,833,887,50 (8,725.41) 1,825,162.09 ),726,494.80 (99,677 29) 6/10/20(A 2,645A2 7/01/2004 '72.13750 (8,725411 63,412.09 147,214.90 91,902,-)l I A) 1/2005 1,852,137-50 (9,725.41) 1,943.412,09 1,762,214,90 (81,197.29) 6/30/200.5 - - 205,42 49,887.50 (8,725.41) 41,162.09 105,224,80 (A,062,71 1/01/2006 1,874,887.50 (R,725.4 I 1,866,162A9 LR05,224.80 (60,937,29) 6/3012006 - - - 3,125.42 7/01/2006 27,075.00 (9,725,41) 18349.59 00,174.80 41,825.21 1/01/2007 1,887,075.00 (8,725A 1) 1,878,349.59 1,945,174.80 (33,1 /4.79) 6/30/2007 - - 8,650.42 7/01/2007 1,500M (8,725.41) (7,225,41) 11,979.90 19,205.21 I M 1/2009 10 1,500.CK) (761,225,41) (659,725,41) (94,030,20) 565,695,21 - 6/30/2008 584,900.42 Total - -------- ----- 8,054,777.50 (843,425.89) (8,406.26) 7,200,55 1.56 7,R05,769.80 10 S,218.24 I'RFSEN'I'VA It JF ANALYSIS SOMMARY (NET"TO NE'I') Gross PV Debt Se"'Ce Savings............................................................................................ 3,347,743.33 FiTmis of'chatipcs in DSR investments ........ - .... — . .... ... ....... (1,396,170.95) Net PV Cashilow Savings (q, 2.681% (AIC) .............. 1,951,572,47 1'ransfers boo Prim Issue Debt Service Fund ......... (1,438,488.00) Contingency or Rounding Amount ......................... .... .. . .. ..................................... 2,333.79 NET PRU'SEM' VALUE BENEFIT . I ... 1-4 ... .......... " —1 ...... $5 15.4 1 K26 NF'T'PV Bi,,Nl-'F1'l'/ $9,995,000 R FPI,,)NI)PD PRINCIPAL..... ..... 5. 162% NFr PV BENEF1'F/ $7,525,000 REFUNDING PRINClPAL.-....—.—.............................. 6. 8 4 ir/. Pi cpared by Evensen Dodge, Inc. File city of'ames.sf Rct93- Electric FINAL- SINGLE PURPOSE 9/24/2002 12: 19 PM Page 2 Ames/419370-28/2"'/: 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 Electric 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 establishrrient 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 Electric Revenue Refunding Bonds, Series 2002D, dated October 15, 2002; and the City's Electric Revenue Bonds, Series 1993, dated May 1, 1993, presently outstanding in the amount of $9,985,000, which Series 1993 Bonds are being refunded with the proceeds of the Series 2002D Bonds. WITNESS MY HAND and the sea] of the City hereto affixed this 2zt-h day of September ,2002. /f City Clerk (Seal) -21- DORSEY & WHITNEY LIT, ATTORNFlYS, DES MOINES, IOWA