HomeMy WebLinkAboutA012 - Letter to Dorsey & Whitney dated October 10, 2018 - final proceedings .., CITY OF
A m e s."
Smart Choice
October 10, 2018
Dorsey & Whitney LLP
801 Grand, Suite 4100
Des Moines, Iowa 50309
Attention Robert E. Josten
RE: Ames, Iowa
$5,700,000 SRF Sewer Revenue Loan and Disbursement Agreement
Your File No. 419370-63
Dear Mr. Josten:
Enclosed please find:
1. Signed Certificate attesting to the transcript from the October 9, 2018, City Council
meeting when the hearing was held and a Resolution adopted approving the SRF
Sewer Revenue Loan and Disbursement Agreement and providing for the issuance
of the Bonds
2. Establishment and Non-Litigation Certificate with respect to the Municipal Sanitary
Sewer System
3. Bond that has been signed by the Mayor,the City Treasurer, and me
4. Closing Certificate
5. Three originals of the Loan and Disbursement Agreement, all executed by Mayor
Haila and attested to by me. Thank you, in advance, for furnishing me with a signed
original after you have obtained the signature of a representative of the Iowa
Finance Authority.
Sincerely,
Diane R. Voss
City Clerk
/dry
Enclosures
Ames/419370-63/2'd%Iss—Sewer Rev.
(Issuance - Revenue)
4193 70-63
Ames, Iowa
October 9, 2018
A meeting of the City Council of Ames, Iowa, was held on October 9, 2018, at 6:00
o'clock p.m. at the City Hall Council Chambers, Ames, Iowa.
The meeting was called to order, and the roll was called showing the following Council
Members present and absent:
Present: Beatty-Hansen, Betcher, Corrieri, Gartin, Martin,Nelson.
Absent: None.
The City Council took up for consideration the proposal to enter into a Sewer Revenue
Loan and Disbursement Agreement.
After due consideration and discussion, Council Member Nelson introduced the
following resolution and moved its adoption, seconded by Council Member Gartin. The Mayor
put the question upon the adoption of said resolution, and the roll being called, the following
Council Members voted:
Ayes: Beatty-Hansen, Betcher, Corrieri, Gartin, Martin, Nelson.
Nays: None.
Whereupon, the Mayor declared the resolution duly adopted as hereinafter set out.
DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES, IOWA
Ames/419370-63/2nd'/z Hrg&Iss—Sewer Rev.
RESOLUTION NO. 18-558
Resolution authorizing and approving a Loan and Disbursement Agreement and
providing for the issuance and securing the payment of$5,700,000 Taxable Sewer
Revenue Bonds, Series 2018-2
WHEREAS, the City of Ames (the "City"), in Story County, State of Iowa, did
heretofore establish a Municipal Sanitary Sewer System (the "Utility") in and for the City which
has continuously supplied sanitary sewer service in and to the City and its inhabitants since its
establishment; and
WHEREAS, the management and control of the Utility are vested in the City Council
(the"Council") and no board of trustees exists for this purpose; and
WHEREAS, pursuant to a prior resolution of the Council, the City has heretofore issued
its $3,121,000 Sewer Revenue Bond, SRF Series 2012, dated November 16, 2012 (the "Series
2012 Bond"), a portion of which remains outstanding; and
WHEREAS, pursuant to a prior resolution of the Council, the City has heretofore issued
its $797,000 Taxable Sewer Revenue Bond, SRF Series 2016, dated September 30, 2016 (the
"Series 2016 Bond"), a portion of which remains outstanding; and
WHEREAS, pursuant to a prior resolution of the Council, the City has heretofore issued
its $1,001,000 Taxable Sewer Revenue Bond, SRF Series 2018, dated February 16, 2018 (the
"Series 2018 Bond"), a portion of which remains outstanding; and
WHEREAS, pursuant to the resolutions (the "Outstanding Bond Resolutions")
authorizing the issuance of the Series 2012 Bond, the Series 2016 Bond and the Series 2018
Bond (collectively, the "Outstanding Bonds"), the City reserved the right to issue additional
obligations payable from the Net Revenues (as defined herein) of the Utility and ranking on a
parity with the Outstanding Bonds under the terms and conditions set forth in the Outstanding
Bond Resolutions; and
WHEREAS, the City has heretofore proposed to contract indebtedness and enter into a
Sewer Revenue Loan and Disbursement Agreement (the "Agreement") and to borrow money
thereunder in a principal amount not to exceed $5,700,000, pursuant to the provisions of Section
384.24A of the Code of Iowa, for the purpose of paying the cost, to that extent, of planning,
designing and constructing improvements and extensions to the Utility (the "Project"), and has
published notice of the proposed action and has held a hearing thereon on September 25, 2018;
and
WHEREAS, it is necessary at this time for the City Council to approve the Agreement
with the Iowa Finance Authority, an agency and public instrumentality of the State of Iowa, as
lender (the "Lender") and to issue Taxable Sewer Revenue Bonds, Series 2018-2 (the "Bonds")
in evidence thereof in the principal amount of$5,700,000 in order to pay the costs of the Project;
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DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
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NOW, THEREFORE, Be It Resolved by the City Council of the City of Ames, Iowa, as
follows:
Section 1. It is hereby determined that the City shall enter into the Agreement with
the Lender. The Agreement shall be in substantially the form as has been placed on file with the
City and shall provide for a loan (the "Loan") to the City in the amount of $5,700,000, for the
purpose as set forth in the preamble hereof.
The Mayor and City Clerk are hereby authorized and directed to sign the Agreement on
behalf of the City, and the Agreement is hereby approved.
Section 2. The Bonds are hereby authorized to be issued in evidence of the obligation
of the City under the Agreement, in the aggregate principal amount of $5,700,000, to be dated
the date of delivery to or upon the direction of the Lender, and bearing interest from the date of
each advancement made at the rate of 1.75% per annum pursuant to the Agreement, until
payment thereof, as set forth in Exhibit A attached to the Agreement.
The Bonds may be in the denomination of $1,000 each or any integral multiple thereof
and, at the request of the Lender, shall be initially issued as a single Bond in the denomination of
$5,700,000 and numbered R-1.
The City Clerk is hereby designated as the Registrar and Paying Agent for the Bonds and
may be hereinafter referred to as the"Registrar" or the "Paying Agent."
Payment of the principal of and interest on the Bonds and premium, if any, shall be
payable at the office of the Paying Agent to the registered owners thereof appearing on the
registration books of the City. All such payments, except full redemption, shall be made to the
registered owners appearing on the registration books at the close of business on the fifteenth day
of the month next preceding the payment date. Final payment of principal shall only be made
upon surrender of the Bond or Bonds to the Paying Agent.
In addition to the payment of principal of and interest on the Bonds, the City also agrees
to pay the Initiation Fee and the Servicing Fee (defined in the Agreement) in accordance with the
terms of the Agreement.
The Bonds shall be executed on behalf of the City with the official manual or facsimile
signature of the Mayor and attested with the official manual or facsimile signature of the City
Clerk, and shall be fully registered bonds without interest coupons. The issuance of the Bonds
and the amount of the Loan advanced thereunder shall be recorded in the office of the City
Treasurer, and the certificate on the back of each 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 appears on the Bonds shall cease to be such officer before the delivery of
such 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.
The 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 Registrar. Each Bond shall be transferable
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DORSEY &WHITNEY LLP, ATTORNEYS,DES MOINES, IOWA
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without cost to the registered owner thereof only upon the registration books of the City upon
presentation to the Registrar, together with either a written instrument of transfer satisfactory to
the 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 Bonds shall be kept confidential as provided
by Section 22.7 of the Code of Iowa.
The Bonds are subject to optional redemption by the City at a price of par plus accrued
interest (i) on any date with the prior written consent of the Lender, or (ii) in the event that all or
substantially all of the Project is damaged or destroyed. Any optional redemption of the Bonds
by the City may be made from any funds regardless of source, in whole or from time to time in
part, in inverse order of maturity upon not less than thirty (30) days' notice of redemption by
facsimile, e-mail, certified or registered mail to the Lender (or any other registered owner of the
Bonds). The Bonds are also subject to mandatory redemption as set forth in Section 5 of the
Agreement.
All of the Bonds and the interest thereon, together with the Outstanding Bonds and any
additional obligations as may be hereafter issued and outstanding from time to time ranking on a
parity therewith under the conditions set forth herein (which additional obligations are
hereinafter sometimes referred to as "Parity Obligations"), shall be payable solely from the Net
Revenues of the Utility and the Sinking Fund hereinafter referred to, both of which are hereby
pledged to the payment of the Bonds. The Bonds shall be a valid claim of the owners thereof
only against said Net Revenues and Sinking Fund. 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 or the Utility 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.
Section 3. The 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 Registrar for
registration and delivery to the Lender, upon receipt of the loan proceeds (the "Loan Proceeds"),
and all action heretofore taken in connection with the Agreement is hereby ratified and
confirmed in all respects.
Section 4. The Bonds shall be in substantially the following form:
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DORSEY &WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
Ames/419370-63/2"d%Hrg&Iss—Sewer Rev.
(Form of Bond)
UNITED STATES OF AMERICA
STATE OF IOWA
STORY COUNTY CITY OF AMES
TAXABLE SEWER REVENUE BOND, SERIES 2018-2
No. R-1 $5,700,000
RATE MATURITY BOND DATE
1.75% June 1, 2038 October 19, 2018
The City of Ames (the "City"), in Story County, State of Iowa, for value received,
promises to pay from the source and as hereinafter provided, on the maturity date of this Bond to
the
IOWA FINANCE AUTHORITY
or registered assigns, the principal sum of
FIVE MILLION SEVEN HUNDRED THOUSAND DOLLARS.
Interest at the rate specified above shall be payable semiannually on June 1 and
December 1 of each year, commencing December 1, 2018, and principal shall be due and
payable in installments in the amounts shown on the Principal Payment Schedule, attached
hereto as Exhibit A, on June 1, 2019, and annually thereafter on June 1 in each year until the
principal and interest are fully paid, except that the final installments of the entire balance of
principal and interest, if not sooner paid, shall become due and payable on June 1, 2038. Interest
shall be computed on the basis of a 360-day year comprised of twelve 30-day months.
The City Clerk shall act as Registrar and Paying Agent and may be hereinafter referred to
as the "Registrar" or the "Paying Agent."
Payment of the principal of and interest on this Bond and premium, if any, shall be
payable at the office of the Paying Agent to the registered owners thereof appearing on the
registration books of the City at the addresses shown on such registration books. All such
payments, except full redemption, shall be made to the registered owners appearing on the
registration books at the close of business on the fifteenth day of the month next preceding the
payment date. Final payment of principal shall only be made upon surrender of this Bond to the
Paying Agent.
This Bond is one of a series of bonds (the "Bonds") issued by the City to evidence its
obligation under a certain Sewer Revenue Loan and Disbursement Agreement, dated the date
hereof (the "Agreement") entered into by the City for the purpose of providing funds to pay a
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DORSEY &WHITNEY LLP, ATTORNEYS,DES MOINES,IOWA
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portion of the cost of planning, designing and constructing improvements and extensions (the
"Project")to the Municipal Sanitary Sewer System of the City (the "Utility").
The Bonds are issued pursuant to and in strict compliance with the provisions of
Sections 384.24A and 384.83 of the Code of Iowa, 2017, and all other laws amendatory thereof
and supplemental thereto, and in conformity with a resolution of the City Council authorizing
and approving the Agreement and providing for the issuance and securing the payment of the
Bonds (the "Resolution"), and reference is hereby made to the Resolution and the Agreement for
a more complete statement as to the source of payment of the Bonds and the rights of the owners
of the Bonds.
The Bonds are subject to optional redemption by the City at a price of par plus accrued
interest (i) on any date with the prior written consent of the Iowa Finance Authority, or (ii)in the
event that all or substantially all of the Project is damaged or destroyed. Any optional
redemption of the Bonds by the City may be made from any funds regardless of source, in whole
or from time to time in part, in inverse order of maturity upon not less than thirty (30) days'
notice of redemption by facsimile, e-mail, certified or registered mail to the Iowa Finance
Authority (or any other registered owner of the Bonds). The Bonds are also subject to
mandatory redemption as set forth in Section 5 of the Agreement.
The Bonds are not general obligations of the City but, together with the City's
outstanding Sewer Revenue Bond, SRF Series 2012, dated November 16, 2012; Taxable Sewer
Revenue Bond, SRF Series 2016, dated September 30, 2016; Taxable Sewer Revenue Bond,
SRF Series 2018, dated February 16, 2018; and any additional obligations as may be hereafter
issued and outstanding from time to time ranking on a parity therewith under the conditions set
forth in the Resolution, are payable solely and only out of the future Net Revenues of the Utility
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 thereon.
This Bond is fully negotiable but shall be fully registered as to both principal and interest
in the name of the owner on the books of the City in the office of the Registrar, after which no
transfer shall be valid unless made on said books and then only upon presentation of this Bond to
the Registrar, together with either a written instrument of transfer satisfactory to the 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 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
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 Bonds have
existed, have happened and have been performed in due time, form and manner, as required by
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DORSEY &WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
Ames/419370-63/2""'/2 Hrg&Iss—Sewer Rev.
law, and that the issuance of the Bonds does not exceed or violate any constitutional or statutory
limitation or provision.
IN TESTIMONY WHEREOF, the City of Ames, Iowa, has caused this Bond to be
executed by its Mayor and attested by its City Clerk, all as of the Bond Date.
CITY OF AMES, IOWA
By (Do Not Sign)
Mayor
Attest:
(Do Not Sin)
City Clerk
(On the back of each Bond the following certificate shall be executed with the duly
authorized signature of the City Treasurer)
STATE OF IOWA
STORY COUNTY SS: CITY TREASURER'S CERTIFICATE
CITY OF AMES
The original issuance of the Bonds, of which this Bond is a part, was duly and properly
recorded in my office as of the Bond Date.
(Do Not Sign)
City Treasurer
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DORSEY & WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
Ames/419370-63/2"d'/z Hrg&Iss—Sewer Rev.
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 (Custodian)
JT TEN - as joint tenants with right of As Custodian for
survivorship and not as (Minor)
tenants in common 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.
Dated:
Signature guaranteed:
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.
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DORSEY & WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
Ames/419370-63/2nd'/2 Hrg&Iss—Sewer Rev.
PRINCIPAL PAYMENT SCHEDULE
Date Date
June 1 Amount June 1 Amount
2019 $235,000 2029 $286,000
2020 $239,000 2030 $292,000
2021 $244,000 2031 $298,000
2022 $249,000 2032 $303,000
2023 $254,000 2033 $310,000
2024 $259,000 2034 $316,000
2025 $264,000 2035 $322,000
2026 $269,000 2036 $328,000
2027 $275,000 2037 $335,000
2028 $280,000 2038 $342,000
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DORSEY &WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
Ames/419370-63/2""%Hrg&Iss—Sewer Rev.
Section 5. The Loan Proceeds shall be held by the Lender and disbursed for costs of
the Project, as referred to in the preamble hereof. The City will keep a detailed, segregated
accounting of the expenditure of the Loan Proceeds.
Section 6. So long as any of the Bonds, the Outstanding Bonds or any Parity
Obligations are outstanding, the City shall continue to maintain the Utility in good condition, and
the Utility shall continue to be operated in an efficient manner and at a reasonable cost as a
revenue producing undertaking. 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") 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") and to leave a balance of net revenues
(herein referred to as the "Net Revenues") equal to at least 110% of the principal of and interest
on all of the Bonds, the Outstanding Bonds and any other Parity Obligations due in such fiscal
year, as the same become due.
Section 7. The provisions, covenants, undertakings and stipulations for the operation of
the Utility and for the collection, application and use of the Gross Revenues and income from
such operation, as set forth in the Outstanding Bond Resolutions shall inure and appertain to the
Bonds to the same extent and with like force and effect as if herein set out in full, except only
insofar as the same may be inconsistent with this resolution.
Nothing in this resolution shall be construed to impair the rights vested in the
Outstanding Bonds. The amounts herein required to be paid into the various funds hereafter
named shall be inclusive of said payments required with respect to the Outstanding Bonds. The
provisions of the Outstanding Bond Resolutions and the provisions of this resolution are to be
construed whenever possible so that the same will not be in conflict. In the event such
construction is not possible, the provisions of the resolution first adopted shall prevail until such
time as the obligations authorized by such resolution have been paid or otherwise satisfied as
therein provided, at which time the provisions of this resolution shall again prevail.
Section 8. From and after the issuance of the Bonds, the Gross Revenues of the
Utility shall continue to be set aside into the City's Sewer Revenue Fund ("Sewer Revenue
Fund") created under the Outstanding Bond Resolutions. The Sewer Revenue Fund shall be
used in maintaining and operating the Utility, and after payment of the Operating Expenses shall,
to the extent provided in this resolution and the Outstanding Bond Resolutions, be used to pay
the principal of and interest on the Bonds, the Outstanding Bonds and any Parity Obligations,
and to create and maintain the several separate funds hereinafter described.
Section 9. The provisions in and by the Outstanding Bond Resolutions, whereby
there has been created and is to be maintained a Sewer Revenue Bond Sinking Fund (herein
referred to as the "Sinking Fund"), and for the payment into said fund from the Net Revenues of
the Utility such portion thereof as will be sufficient to pay the interest on and principal of the
Outstanding Bonds, are all hereby ratified and confirmed, and all such provisions shall inure and
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DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
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constitute the security for the payment of the interest on and principal of the Bonds hereby
authorized as may be outstanding from time to time; provided, however that on the first day of
each month of each year, the minimum amount to be set aside, in addition to the amounts
required to be set aside in the Outstanding Bond Resolutions, and paid into the Sinking Fund
shall be not less than as follows:
On November 1, 2018, an amount equal to the installment of interest coming due
on December 1, 2018, and thereafter, commencing on December 1, 2018, and
continuing to final maturity, an amount equal to 1/6th of the installment of interest
coming due on the next succeeding interest payment date on the then outstanding
Bonds. In addition, commencing on November 1, 2018 and continuing to and
including May 1, 2019, an amount equal to 1/7th of the installment of principal
coming due on the Bonds on June 1, 2019, and, thereafter commencing on June 1,
2019, and continuing to final maturity, an amount equal to 1/12th of the
installment of principal coming due on such Bonds on the next succeeding
principal payment date until the full amount of such installment is on deposit in
the Sinking Fund.
Money in the Sinking Fund shall be used solely for the purpose of paying principal of and
interest on the Bonds, the Outstanding Bonds and any Parity Obligations as the same shall
become due and payable. Whenever Parity Obligations are issued under the conditions and
restrictions hereinafter set forth, provisions shall be made for additional payments to be made
into the Sinking Fund for the purpose of paying the interest on and principal of such Parity
Obligations.
If at any time there should be a failure to pay into the Sinking Fund the full amount above
stipulated, then an amount equivalent to the deficiency shall be 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.
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, the Outstanding Bonds and any Parity
Obligations then outstanding which are payable from the Sinking Fund and to pay all interest to
become due thereon prior to such retirement, or if provision for such payment has been made.
All of such payments required to be made into the Sinking Fund shall be made in equal
monthly installments 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 10. The provisions in and by the Outstanding Bond Resolutions whereby there
has been created and is to be maintained a special fund to be known and designated as the
Surplus Fund 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 are all hereby ratified and confirmed.
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, the Outstanding Bonds and any Parity Obligations.
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DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
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As long as the Sinking Fund has the full amounts required to be deposited therein by the
Outstanding Bond Resolutions and this resolution, any balance in the Surplus Fund may be
expended by the City in such manner 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.
Section 11. All money held in any fund or account 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 Sewer Revenue Fund and used solely and only for the purposes specified
herein for such funds.
Section 12. The City hereby covenants and agrees with the owner or owners of the
Bonds, the Outstanding Bonds and any Parity Obligations, 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, the Outstanding Bonds and any Parity Obligations shall have been paid in
full, both principal and interest, or unless and until provisions shall have been made for the
payment of the Bonds, the Outstanding Bonds and any Parity Obligations and interest thereon in
full; provided, however, that the City may dispose of any property which in the judgment of the
Council, or such 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 13. Upon a breach or default of a term of the Bonds,the Outstanding Bonds or
any Parity Obligations, the Outstanding Bond Resolutions 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 14. The Bonds, the Outstanding Bonds or any Parity Obligations 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, the Outstanding Bonds or
any Parity Obligations, it being the intention of the City that there shall be no priority among the
Bonds, the Outstanding Bonds or any Parity Obligations, regardless of the fact that they may
have been actually issued and delivered at different times. The City hereby reserves the right
and privilege of issuing additional Parity Obligations.
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DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES, IOWA
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Section 15. The City agrees that so long as the Bonds, the Outstanding Bonds or any
Parity Obligations remain outstanding, it will maintain insurance for the benefit of the owners of
the Bonds, the Outstanding Bonds and any Parity Obligations on the insurable portions of the
Utility of a kind and in an amount which usually would be carried by private companies or
municipalities engaged in a similar type of business. The proceeds of any insurance, except
public liability insurance, shall be used to repair or replace the part or parts of the Utility
damaged or destroyed. 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, and the owners of the Bonds, the Outstanding Bonds or any Parity Obligations
shall have the right at all reasonable times to inspect 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 and Parity Obligations as may from time to time be
outstanding, 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 or Parity Obligations until all of the Bonds, the Outstanding Bonds and Parity Obligations
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 and Parity Obligations 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 obligations as may be issued for the purpose of
refunding any of the Bonds, the Outstanding Bonds or Parity Obligations 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
Parity Obligations.
(b) Make any change in the rate of interest borne by any of the Bonds or
Parity Obligations.
(c) Reduce the amount of the principal payable on any Bonds or Parity
Obligations.
(d) Modify the terms of payment of principal of or interest on the Bonds or
Parity Obligations, 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 Parity
Obligations then outstanding.
(f) Reduce the percentage of the principal amount of the Bonds or Parity
Obligations, the consent of the owners of which shall be required to effect a further
modification.
-13-
DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
Ames/419370-63/2nd'/2 Hrg&Iss—Sewer Rev.
Whenever 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 (1) filed with the Lender
and (2) mailed by certified mail to each registered owner of any Bond or Parity Obligation as
shown by the records of the Registrar. Such notice shall 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.
Whenever at any time within one year from the date of the mailing of said notice, there
shall be filed with the City Clerk an instrument or instruments executed by the owners of at least
a majority in aggregate principal amount of the Bonds and Parity Obligations outstanding at the
time of the adoption of such amendatory resolution specifically consenting to the adoption
thereof as herein provided, no owner of any Bonds or Parity Obligations 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.
Any consent given by the owners of a Bond or Parity Obligation 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
Obligation 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 and Parity Obligations 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 such officer the execution thereof, or may be proved by an
affidavit of a witness to such execution sworn to before such officer.
Section 17. 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 18. All resolutions and orders or parts thereof in conflict with the provisions
of this resolution are,to the extent of such conflict, hereby repealed.
-14-
DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
Ames/419370-63/2"%Hrg&Iss—Sewer Rev.
Section 19. This resolution shall be in full force and effect immediately upon its
adoption and approval, as provided by law.
Passed and approved October 9, 2018.
Mayor
Attest:
City Clerk
On motion and vote, the meeting adjourned.
Mayor
Attest:
City Clerk
-15-
DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
Ames/419370-63/2"d'/2 Hrg&Iss—Sewer Rev.
ATTESTATION CERTIFICATE:
STATE OF IOWA
STORY COUNTY SS:
CITY OF AMES
I, the undersigned, City Clerk of the City of Ames, Iowa, do hereby certify that I have in
my possession or have access to the complete corporate records of the City and of its Council
and officers and that I have carefully compared the transcript hereto attached with those
corporate records and that the transcript hereto attached is a true, correct and complete copy of
all the corporate records in relation to the authorization and approval of a certain Sewer Revenue
Loan and Disbursement Agreement (the "Agreement") and the issuance of$5,700,000 Taxable
Sewer Revenue Bonds, Series 2018-2 (the"Bonds") of said City evidencing the City's obligation
under such Agreement and that the transcript hereto attached contains a true, correct and
complete statement of all the measures adopted and proceedings, acts and things had, done and
performed up to the present time with respect thereto.
I further certify that no objections were filed in my office and no objections of any kind
were made to the matter of entering into such Agreement or issuing such Bonds at the time and
place set for hearing thereon, and that no petition of protest or objections of any kind have been
filed or made, nor has any appeal been taken to the District Court from the decision of the City
Council to enter into the Agreement or to issue the Bonds.
WITNESS MY HAND this 9th day of October, 2018.
�k0 1�
City Clerk
-16-
DORSEY &WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
Ames/419370-63/2nd'/2 Hrg&Iss—Sewer Rev.
ESTABLISHMENT CERTIFICATE:
STATE OF IOWA
STORY COUNTY SS:
CITY OF AMES
I, the undersigned, City Clerk of the City of Ames, Iowa, do hereby certify that I have
complete access and control of all of the corporate records of the City and that, based upon
examination of such records, I have determined that the City did heretofore establish a Municipal
Sanitary Sewer System (the "Utility"), that the management and control of the Utility are vested
in the City Council, 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 City's
outstanding Sewer Revenue Bond, SRF Series 2012, dated November 16, 2012; Taxable Sewer
Revenue Bond, SRF Series 2016, dated September 30, 2016; Taxable Sewer Revenue Bond,
SRF Series 2018, dated February 16, 2018; and the current issue of$5,700,000 Taxable Sewer
Revenue Bonds, Series 2018-2 of the City.
WITNESS MY HAND this 9th day of October, 2018.
City Clerk
-17-
DORSEY &WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA
UNITED STATES OF AMERICA
STATE OF IOWA
STORY COUNTY
CITY OF AMES
TAXABLE SEWER REVENUE BOND,SERIES 2018-2
No. R-1 $5,700,000
RATE MATURITY BOND DATE
1.75% ,Lune 1,2038 October 19,2018
The City of Ames(tile"City"),in Story County, State of Iowa,for value received,promises to pay from the source and as hereinafter provided,on the
maturity date of this Bond to the
IOWA FINANCE AUTHORITY
or registered assigns,the principal sum of
FIVE MILLION SEVEN HUNDRED THOUSAND DOLLARS.
Interest at the rate specified above shall be payable semiannually on June 1 and December I of each year,commencing December 1,2018,and principal
shall be due and payable in installments in the amounts shown on the Principal Payment Schedule, attached hereto as Exhibit A, on June 1,2019,and annually
thereafter on.tune I in each year until the principal and interest are fully paid,except that the final installments of the entire balance of principal and interest,if not
sooner paid,shall become due and payable on.tune 1,2038. Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months.
The City Clerk shall act as Registrar and Paying Agent and may be hereinafter referred to as the"Registrar"or the"Paying Agent."
Payment of the principal of and interest on this Bond and premium, if any, shall be payable at the office of the Paying Agent to the registered owners
thereof appearing on the registration books of the City at the addresses shown on such registration books. All such payments,except full redemption,shall be made
to the registered owners appearing on the registration books at the close of business on the fifteenth day of the month next preceding the payment date. Final
payment of principal shall only be made upon surrender of this Bond to the Paying Agent.
This Bond is one of a series of bonds(the"Bonds")issued by the City to evidence its obligation under a certain Sewer Revenue Loan and Disbursement
Agreement,dated the date hereof(the"Agreement")entered into by the City for the purpose of providing funds to pay a portion of the cost of planning,designing
and constructing improvements and extensions(the"Project")to the Municipal Sanitary Sewer System of the City(the"Utility").
The Bonds are issued pursuant to and in strict compliance with the provisions of Sections 384.24A and 384.83 of the Code of Iowa,2017,and all other
laws amendatory thereof and supplemental thereto,and in conformity with a resolution of the City Council authorizing and approving the Agreement and providing
for the issuance and securing the payment of the Bonds(the`Resolution"),and reference is hereby made to the Resolution and the Agreement for a more complete
statement as to the source of payment of the Bonds and the rights of the owners of the Bonds.
Tile Bonds are subject to optional redemption by the City at a price of par plus accrued interest(i)on any date with the prior written consent of the Iowa
Finance Authority,or(ii)in the event that all or substantially all of the Project is damaged or destroyed. Any optional redemption of the Bonds by the City may be
made from any funds regardless of source, in whole or from time to time in part, in inverse order of maturity upon not less than thirty (30) days' notice of
redemption by facsimile, e-mail, certified or registered mail to the Iowa Finance Authority (or any other registered owner of the Bonds). The Bonds are also
subject to mandatory redemption as set forth in Section 5 of the Agreement.
The Bonds are not general obligations of the City but,together with the City's outstanding Sewer Revenue Bond,SRF Series 2012,dated November 16,
2012;Taxable Sewer Revenue Bond,SRF Series 2016,dated September 30,2016;Taxable Sewer Revenue Bond,SRF Series 2018,dated February 16,2018;and
any additional obligations as may be hereafter issued and outstanding from time to time ranking on a parity therewith under the conditions set forth in the
Resolution, are payable solely and only out of the future Net Revenues of the Utility 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 thereon.
This Bond is fully negotiable but shall be fully registered as to both principal and interest in the name of the owner on the books of the City in the office
of the Registrar,after which no transfer shall be valid unless made on said books and then only upon presentation of this Bond to the Registrar,together with either
a written instrument of transfer satisfactory to the 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 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 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 Bonds have existed.have happened and have been performed in due time,form and manner,as required by law,and that the issuance of the Bonds
does not exceed or violate any constitutional or statutory limitation or provision.
IN TESTIMONY WHEREOF, the City of Ames, Iowa, has caused this Bond to be executed by its Mayor and attested by its City Clerk, all as of the
Bond Date.
CITY A S IOWA
By
Mayor
Attest'
City Clerk
STATE OF IOWA
STORY COUNTY SS: CITY TREASURER'S CERTIFICATE
CITY OF AMES
The original issuance of the Bonds,of which this Bond is a part,was duly and properly recorded in my office as of the Bond Date.
� -" I.°
City Trea ure
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 (Custodian)
JT TEN as joint tenants with right of survivorship As Custodian for
and not as tenants in common (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 I'or registration thereof with full
power of substitution.
Dated:
r
Signature guaranteed:
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.
EXHIBIT A
PRINCIPAL PAYMENT SCHEDULE
Date Date
June I Amount June 1 Amount
2019 $235,000 2029 $286,000
2020 $239,000 2030 $292,000
2021 $244,000 2031 $298,000
2022 $249,000 2032 $303,000
7023 $254,000 2033 $310,000
2024 $259,000 2034 $316,000
2025 $264,000 2035 $322,000
2026 $269,000 2036 $328,000
2027 $275,000 2037 $335,000
2028 $280,000 2038 $342,000
Ames/A19370-63/FDC-Rev r 'ease Return To:
cr Y & WHITNEY
CLOSING CERTIFICATE I atid, SAT LAW
bc, v,a1�d Suite 4100
D" Iowa 50309
We, the undersigned, Mayor and City Clerk of the City of Ames, Iowa (the "City"), do
hereby certify as of October 19, 2018 (the "Dated Date"), that we are now and were at the time of
the execution of the City's $5,700,000 Taxable Sewer Revenue Bond, Series 2018-2 (the "Series
2018-2 Bond"), the officers respectively above indicated of the City; that in pursuance of
Chapter 384 of the Code of Iowa, a resolution adopted by the City Council on October 9, 2018 (the
"Resolution"), and a certain Loan and Disbursement Agreement (the "Agreement"), by and between
the City and the Iowa Finance Authority, Des Moines, Iowa, as lender (the "Lender"), the Series
2018-2 Bond has been heretofore lawfully authorized and this day by us lawfully issued and
delivered to the Lender and pursuant to the Agreement, the Lender shall loan to the City the
maximum sum of$5,700,000.
The Series 2018-2 Bond has been executed by the aforesaid officers; the certificate on the
back of the Series 2018-2 Bond has been executed by the City Treasurer; and the Series 2018-2
Bond has been fully registered as to principal and interest in the name of the Lender on the
registration books of the City.
We further certify that the Series 2018-2 Bond is being issued to evidence the City's
obligation under the Agreement entered into by the City for the purpose of providing funds to pay a
portion of the cost of planning, designing and constructing improvements and extensions (the
"Project") to the Municipal Sanitary Sewer System of the City (the "Utility).
We further certify that no controversy or litigation is pending, prayed or threatened
involving the incorporation, organization, existence or boundaries of the City or the titles of the
aforesaid officers to their respective positions or the proceedings incident to the authorization of the
Series 2018-2 Bond or in any way concerning the validity of the Series 2018-2 Bond or the power
and duty of the City to appropriate and apply the Net Revenues (as defined in the Resolution) from
the operation of the Utility to the full and prompt payment of the principal of and interest on the
Series 2018-2 Bond, and that none of the proceedings incident to the authorization and issuance of
the Series 2018-2 Bond have been repealed or rescinded.
We further certify that no appeal of the decision of the City to enter into the Agreement and
to issue the Series 2018-2 Bond has been taken to the district court.
We further certify that the City has no other bonds or obligations of any kind now
outstanding secured by or payable from the revenues to be derived from the operation of the Utility,
except for the City's outstanding Sewer Revenue Bond, SRF Series 2012, dated November 16,
2012; Taxable Sewer Revenue Bond, SRF Series 2016, dated September 30, 2016; and Taxable
Sewer Revenue Bond, SRF Series 2018. dated February 16, 2018.
We further certify that no board of trustees has been created for the management and control
of the Utility and such management and control are vested in the Council of the City.
We further certify that all meetings held in connection with the Series 2018-2 Bond were
open to the public at a place reasonably accessible to the public and that notice was given at least 24
hours prior to the commencement of all meetings by advising the news media who requested notice
of the time, date, place and the tentative agenda and by posting such notice and agenda at the City
Hall or principal office of the City on a bulletin board or other prominent place which is easily
accessible to the public and is the place designated for the purpose of posting notices of meetings.
D013 SFY v. %V111TNEY L1.P_A 1TOW TYS DES MOINES 10%V e,
Am es/4193 70-63/FDC-Rev
IN WITNESS WHEREOF, we have hereunto affixed our hands on the Dated Date.
CITY Oli AMES, IOWA
i
Mayor
Attest:
City Clerk
-2-
DORSEY l.L,11 ATTORNEYS.i)1.c NIONI.c 10WA
LOAN AND DISBURSEMENT AGREEMENT
$5,700,000 TAXABLE SEWER REVENUE BONDS
This Loan and Disbursement Agreement (the "Agreement") is made and entered into as
of October 19, 2018, by and between the City of Ames, Iowa (the "Participant") and the Iowa
Finance Authority, an agency and public instrumentality of the State of Iowa (the "Issuer").
WHEREAS, the Issuer, in cooperation with the Iowa Department of Natural Resources
(the "Department"), is authorized to undertake the creation, administration and financing of the
Iowa Water Pollution Control Works Financing Program (the "Program") established in Iowa
Code Sections 16.131 through 16.135 and Sections 455B.291 through 455B.299, including,
among other things, the making of loans to Iowa municipalities for purposes of the Program; and
WHEREAS, the Participant desires to participate in the Program as a means of financing
all or part of the construction of certain wastewater treatment facilities serving the Participant
and its residents; and
WHEREAS, to assist in financing the Project (defined herein), the Issuer desires to make
a loan to the Participant in the amount set forth in Section 2 hereof,
NOW, THEREFORE, the parties agree as follows:
Section 1. Definitions. In addition to other definitions set forth herein, the following
terms as used in this Agreement shall, unless the context clearly requires otherwise, have the
following meanings:
(a) "Bonds" shall mean any State Revolving Fund Revenue Bonds that were
or in the future are issued by the Issuer for the purpose of providing moneys to finance
the Loan to the Participant.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended, and
all lawfully promulgated regulations thereunder.
(c) "Project" shall mean the particular construction activities approved by the
Department and being undertaken by the Participant with respect to its Wastewater
Treatment S}/stem, as described in the Resolution.
(d) "Regulations" shall mean the administrative rules of the Department
relating to the Program. set forth in Title 567. Chapter 92 of the Iowa Administrative
Code, and the administrative rules of the Issuer relating to the Program set forth in Title
265, Chapter 26 of the Iowa Administrative Code.
(e) "Resolution" shall mean the resolution of the Council of the Participant,
adopted on On-)11(21- Q. 22018, a1nr(w1n0 and authorizinu the execution ofthis Agreement
and the issuance of the Revenue Bond (defined herein).
1
(f) "Wastewater Treatment System" shall mean the wastewater treatment
system of the Participant, all facilities being used in conjunction therewith and all
appurtenances and extensions thereto, including but not limited to the wastewater
treatment system project which the Participant is financing under this Agreement.
Section 2. Loan; Purchase of Revenue Bond. The Issuer agrees to purchase a duly
authorized and issued sewer revenue bond or capital loan note of the Participant (the "Revenue
Bond") in order to make a loan to the Participant, and will disburse proceeds as set forth herein.
The Participant agrees to borrow and accept from the Issuer, a loan in the principal amount of
$5,700,000 (the "Loan").
The Participant shall use the proceeds of the Loan strictly (a) to finance a portion of the
costs of construction of the Project and (b), where applicable, to reimburse the Participant for a
portion of the costs of the Project, which portion was paid or incurred in anticipation of
reimbursement through the Program and which is eligible for such reimbursement under and
pursuant to the Regulations and the Code.
Section 3. Disbursements. Proceeds of the Loan shall be made available to the
Participant in the form of one or more periodic disbursements as provided in this Section. The
Issuer thereafter shall make disbursements of a portion of the Loan for payment of costs of the
Project upon receipt of the following:
(a) a completed payment request on a form acceptable to and available from
the Issuer;
(b) current construction payment estimates;
(c) engineering service statements;
(d) purchase orders or invoices for items not included within other contracts;
and
(e) evidence that the costs for which the disbursement is requested have been
incurred.
Solely with respect to the request for the final disbursement of proceeds of the Loan, the
Participant shall submit to the Issuer (via the Department). in addition to items (a) through (e)
above, a certification of completion and acceptance of-tie Project by the Participant or evidence
of an acceptable settlement if the Project is subject to a dispute between the Participant and any
contractor.
Disbursements shall be made in a timely fashion following the receipt of the information
as set forth above. Unless otherwise agreed to in writing by the Issuer. funds shall be payable to
the Participant via automated clearin�1house system transfer to the account specified by the
Participani.
Section 4. Completion of Project. The Participant covenants and agrees (i) to exercise its
best efforts in accordance with prudent wastewater- treatment utility practices to complete the
Project; and (ii) to provide fi-om its own fiscal resources all monies, in excess of the total amount
of Loan proceeds it receives under the Agreement, required to complete the Project.
Section 5. Repayment of Loan- Issuance of Revenue Bonds. The Participant's obligation
to repay the Loan and interest thereon shall be evidenced by the Revenue Bond in the principal
amount of the Loan, complying in all material respects with the Regulations and being in
substantially the form set forth in the Resolution. The Revenue Bond shall be delivered to the
Issuer as the original purchaser and registered holder thereof at the closing of the Loan. The
Revenue Bond shall be accompanied by a legal opinion of bond counsel, in form satisfactory to
the Issuer, to evidence the legality, security position and tax-exempt status of interest on the
Revenue Bond. The parties agree that a payment of principal of or interest on the Revenue Bond
shall be deemed to be a payment of the same on the Loan and a payment of principal of or
interest on the Loan shall be deemed to be a payment of the same on the Revenue Bond. Unless
otherwise agreed to in writing by the Issuer, all payments of principal and interest due under the
Loan shall be made via automated clearinghouse transfer, from an account specified by the
Participant.
The Revenue Bond shall be dated the date of delivery to the Issuer, with interest and the
Servicing Fee (together, the "Interest Rate" as set forth in Section 6 hereof) payable
semiannually on June 1 and December 1 of each year (unless the resolution authorizing a
previous series of outstanding bonds on a parity with the Revenue Bond requires interest to be
paid on other interest payment dates, in which case such other dates shall apply) from the date of
each disbursement of a part of the Loan from the Issuer to the Participant (which are initially
expected to be on approximately the dates set forth on Exhibit A attached hereto and
incorporated herein). The first repayment of principal of the Loan shall be due and payable not
later than one year after substantial completion of the Project and payments of principal, interest
and the Servicing Fee shall continue thereafter until the Loan is paid in full. Following the final
disbursement of Loan proceeds to the Participant, Exhibit A shall be adjusted by the Issuer, with
the approval of the Participant. based upon actual disbursements to the Participant under the
Agreement. Such revised Exhibit A thereafter shall be deemed to be incorporated herein by
reference and made a part hereof and shall supersede and replace that initially attached hereto
and to the Revenue Bond.
The Revenue Bond shall be subject to optional redemption by the Participant at a price of
par plus accrued interest (i) on any date upon receipt of written consent by the Issuer. or (ii) in
the event that all or substantially all ol'the Project is damaged or destroyed. Any such optional
redemption of the Revenue Bond by the Participant may be made from any funds regardless of'
source. in whole or fi-om time to time in part. upon not less than thirty (30) days notice of
redemption by e-mail. facsimile. certified or registered mail to the Issuer (or anY other registered
ovyner ol•the Revenue Bond). The Revenue Bond is also subject to mandatory redemption m the
event the costs of' the Project are less than initially projected. in which case the amount of the
1_..II G._ 1. 1 I , , it„> , -,I P,• et nc•tc ll>burtiC I. The P irt;Clj::^t
Lllilll SI-1all Le lCCIIiCCCI tt) it Lqu,"'i to i„` "'C"u d � '"I� costs `
1
and the Issuer agree that following such adjustment, the principal amount due under the Revenue
Bond shall be automatically reduced to equal the principal amount of the adjusted Loan.
The Revenue Bond and the interest thereon and any additional obligations as may be
hereafter issued and outstanding from time to time under the conditions set forth in the
Resolution shall be payable solely and only from the Net Revenues (as defined in the Resolution)
of the Wastewater Treatment System of the Participant, a sufficient portion of which has been
and shall be ordered set aside and pledged for such purpose under the provisions of the
Resolution. Neither this Agreement nor the Revenue Bond is a general obligation of the
Participant, and under no circumstance shall the Participant be in any manner liable by reason of
the failure of the aforesaid Net Revenues to be sufficient to pay the Revenue Bond and the
interest thereon or to otherwise discharge the Participant's obligation hereunder.
Section 6. Interest Rate Initiation Fee and Servicing Fees. (a) The Participant agrees
to pay to the Issuer, as additional consideration for the Loan, a loan initiation fee (the "Initiation
Fee") equal to one-half of one percent (0.50%) of the amount of the Loan ($28,500), which shall
be due and payable on the date of this Agreement. Unless the Issuer shall be otherwise notified
by the Participant that the Participant intends to pay such Initiation Fee from other funds, and has
received such other finds from the Participant on the date hereof, the Issuer shall be authorized
to deduct the full amount of the Initiation Fee from the proceeds of the Loan being made
hereunder, and such deduction by the Issuer shall be deemed to be an expenditure by the
Participant of the Loan proceeds.
(b) The Participant agrees to pay a Loan servicing fee (the "Servicing Fee") to the Issuer
in an amount equal to 0.25% per annum of the principal amount of the Loan outstanding. The
Servicing Fee shall be paid as described in Section 5 and Section 6(c) hereof.
(c) The Loan shall bear interest at 1.75% per annum (the "Rate"). As described in
Section 5, payments hereunder shall be calculated based on the Rate plus the Servicing Fee (such
2.00%, the "Interest Rate").
Section 7. Compliance with Applicable Laws Performance Under Loan Agreement;
Rates. The Participant covenants and agrees (i) to comply with all applicable State of Iowa and
federal laws, rules and regulations (including but not limited to the Regulations), judicial
decisions, and executive orders in the performance of the Agreement and in the financing,
construction, operation, maintenance and use of the Project and the Wastewater Treatment
System, (ii) to maintain its Wastewater "Treatment System in good repair, working order and
operating condition: (iii) to cooperate with the Issuer in the observance and performance of their
respective duties. covenants. obligations and agreements under the Agreement; (iv) to comply
with all terms and conditions of-tic Resolution: and (v) to establish, levy and collect rents, rates
and other charges for the products and services provided by its Wastewater Treatment System.
x,\�hich rents. rates and other charges shall be at least sulicient (A) to meet the operation and
maintenance expenses of' such Wastewater Treatment System. (13) to produce and maintain Net
Revenues at a level not less than 1 10°4) of the amount of principal and interest on the Revenue
Bond and an% other obligations sccrn-ed by a pledge of the Net Revenues billing due in the same
4
year, (C) to comply with all covenants pertaining thereto contained in, and all other provisions
of; any bond resolution, trust indenture or other security agreement, if any, relating to any bonds
or other evidences of indebtedness issued or to be issued by the Participant, (D) to pay the debt
service requirements on any bonds, notes or other evidences of indebtedness, whether now
outstanding or incurred in the future, secured by such revenues or other receipts and issued to
finance improvements to the Wastewater Treatment System and to make any other payments
required by the laws of the State of Iowa, (E) to generate fiends sufficient to fulfill the terms of
all other contracts and agreements made by the Participant, including, without limitation, the
Agreement and the Revenue Bond and (F) to pay all other amounts payable from or constituting
a lien or charge on the operating revenues of its Wastewater Treatment System.
Section 8. Insurance; Audits; Disposal of Property. The Participant covenants and
agrees (a) to maintain insurance on, or to self-insure, the insurable portions of the Wastewater
Treatment System of a kind and in an amount which normally would be carried by private
companies engaged in a similar type of business, (b) to keep proper books and accounts adapted
to the Wastewater Treatment System, showing the complete and correct entry of all transactions
relating thereto, and to cause said books and accounts to be audited or examined by an
independent auditor or the State Auditor (1) at such times and for such periods as may be
required by the federal Single Audit Act of 1984, OMB Circular A-133 or State law, and (ii) at
such other times and for such other periods as may be requested at any time and from time to
time by the Issuer (which requests may require an audit to be performed for, a period that would
not otherwise be required to be audited under State law), and (c) not to sell, lease or in any
manner dispose of the Wastewater Treatment System, or any capital part thereof, including any
and all extensions and additions which may be made thereto, until the Revenue Bond shall have
been paid in full or otherwise discharged as provided in the Resolution; provided, however, that
the Participant may dispose of any property which in the judgment of its governing body is no
l;-nger ,isPfi,l or prnfitable to use in connection with the operation of the Wastewater Treatment
System or essential to the continued operation thereof.
Section 9. Maintenance of Documents, Access. The Participant agrees to maintain
its project accounts in accordance with generally accepted accounting principles ("GAAP") as
issued by the Governmental Accounting Standards Board, including GAAP requirements
relating to the reporting of infrastructure assets.
The Participant agrees to permit the Issuer or its duly authorized representative access to
all files and documents relating to the Project for purposes of conducting audits and reviews in
accordance with any of the Regulations.
Section 10. Continuing Disclosure. As a means of enabling the Issuer to comply with
the "continuing disclosure" requirements set forth in IZule ISc2-12 (the "Rule") of the Securities
and Lxchange Commission the Participant agrces. during the term of the Loan. to provide the
Issuer With (i) the comprehensive audit report of the Participant. prepared and certified by an
independent auditor or the State Auditor not later than 180 days after the end of each fiscal year
.. . , �....-:,� ld (;;� c,�l�h i)t hl�i- ipf{lri i�Kt�nn ;�:�11 �l l'�P['��t1 n1.7 dC�tL aC 1}lP tc�IlPt"
I lil ::iillll tI'IC iC'p�:ll as p:e1;u:�..: ai:.: �::j .. .. .... _ operating, _ ---
5
may reasonably request from time to time with respect to the Wastewater Treatment System, the
Project or the Participant.
The Participant hereby consents to the inclusion of all or any portion of the foregoing
information and materials in a public filing made by the Issuer under the Rule. The Participant
agrees to indemnify and hold harmless the Issuer, and its officers, directors, employees and
agents from and against any and all claims, damages, losses, liabilities, reasonable costs and
expenses whatsoever (including attorney fees) which such indemnified party may incur by
reason of or in connection with the disclosure of information permitted under this Section;
provided that no such indemnification shall be required for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent, caused by the willful
misconduct or gross negligence of the Issuer in the disclosure of such information.
Section 11. Events of Default. If any one or more of the following events occur, it is
hereby defined as and declared to constitute an "Event of Default" under this Agreement:
(a) Failure by the Participant to pay, or cause to be paid, any Loan repayment
(including the Servicing Fee) required to be paid under this Agreement when due, which
failure shall continue for a period of fifteen (15) days.
(b) Failure by the Participant to make, or cause to be made, any required
payments of principal, redemption premium, if any, and interest on any bonds, notes or
other obligations of the Participant (other than the Loan and the Revenue Bond), the
payment of which are secured by operating revenues of the Wastewater Treatment
System.
(c) Failure by the Participant to observe and perform any duty, covenant,
obligation or agreement on its part to be observed or performed under the Agreement or
the Resolution, other than the obligation to make Loan repayments, which failure shall
continue for a period of thirty (30) days. after- written notice, specifying such failure and
requesting that it be remedied, is given to the Participant by the Issuer, unless the Issuer
shall agree in writing to an extension of such time prior to its expiration or the failure
stated in such notice is correctable but cannot be corrected in the applicable period, in
which case the Issuer may not unreasonably withhold its consent to an extension of such
time up to one hundred twenty (120) days from the delivery of the written notice referred
to above if corrective action is commenced by the Participant within the applicable period
and diligently pursued until the Event of Default is corrected.
Section 12. Remedies on Default. Whenever an Event of Default shall have occurred
and be continuing, the Issuer shall have the right to take any action authorized under the
Regulations, the Revenue Bond or this Agreement and to take whatever other- action at law or
equity may appear necessary or desirable to collect the amounts then due and thereafter to
become due under the Agreement or to enforce the performance and observance of anv duty.
covenant. obligation or agreement of the Participant under- the A21-eeme11t or the Resolution.
6
Section 13. Amendments. This Agreement may not be amended, supplemented or
modified except by a writing executed by all of the parties hereto.
Section 14. Termination. The Participant understands and agrees that the Loan may
be terminated at the option of the Issuer if construction of the Project has not commenced within
one year of the date of execution of this Agreement, all as set forth in the Regulations.
Section 15. Rule of Construction. This Agreement is executed pursuant to the
provisions of Section 384.24A of the Code of Iowa and shall be read and construed as
conforming to all provisions and requirements of that statute.
In the event of any inconsistency or conflict between the terms and conditions of the
Revenue Bond and this Agreement or the Regulations, the parties acknowledge and agree that
the terms of this Agreement or the Regulations, as the case may be, shall take precedence over
any such terms of the Revenue Bond and shall be controlling; and that the payment of principal
and interest on the Loan shall at all times conform to the schedule set forth on Exhibit A, as
adjusted, and the Regulations.
Section 16. Federal Requirements. The Participant agrees to comply with all
applicable federal requirements including, but not limited to, Davis-Bacon wage requirements
and the requirements relating to the use of American iron and steel products.
Section 17. Repayment of Planning and Design Loan. The Participant entered into an
Interim Loan and Disbursement Agreement with the Issuer to provide funds to pay the costs of
planning and designing the Project. The Participant agrees to repay the Interim Loan and
Disbursement Agreement on the date of this Agreement. Unless the Participant notifies the
Issuer that the Participant intends to repay the Interim Loan and Disbursement Agreement from
other funds, and the Issuer has received such other funds from the Participant on the date hereof,
the Issuer shall be authorized to deduct the frill amount due under the Interim Loan and
Disbursement Agreement frorn the proceeds of the Loan being made hereunder, and such
deduction by the Issuer shall be deemed to be an expenditure by the Participant of the Loan
proceeds.
7
IN WITNESS WHEREOF, we have hereunto affixed our signatures all as of the date first
above written.
CITY OF AMES, IOWA
By:
Mayor
Attest:
City Clerk
Participant Si`znatUrc Pauc to LDA
IN WITNESS WHEREOF, I have hereunto affixed my signature all as of the date first
above written.
IOWA FINANCE AUTHORITY
By:
Its: Executive Director
�1FA S11-In<Iture PLIUC t0 I-DAI
EXHIBIT A
ESTIMATED DISBURSEMENTS AND
DEBT SERVICE REPAYMENT SCHEDULE
i�-I
LOAN AND DISBURSEMENT AGREEMENT
$5,700,000 TAXABLE SEWER REVENUE BONDS
This Loan and Disbursement Agreement (the "Agreement") is made and entered into as
of October 19, 2018, by and between the City of Ames, Iowa (the "Participant'') and the Iowa
Finance Authority, an agency and public instrumentality of the State of Iowa (the "Issuer").
WHEREAS, the Issuer, in cooperation with the Iowa Department of Natural Resources
(the "Department"), is authorized to undertake the creation, administration and financing of the
Iowa Water Pollution Control Works Financing Program (the "Program") established in Iowa
Code Sections 16.131 through 16.135 and Sections 455B.291 through 455B.299, including,
among other things, the making of loans to Iowa municipalities for purposes of the Program; and
WHEREAS, the Participant desires to participate in the Program as a means of financing
all or part of the construction of certain wastewater treatment facilities serving the Participant
and its residents; and
WHEREAS, to assist in financing the Project (defined herein), the Issuer desires to make
a loan to the Participant in the amount set forth in Section 2 hereof,
NOW, THEREFORE, the parties agree as follows:
Section 1. Definitions. In addition to other definitions set forth herein, the following
terms as used in this Agreement shall, unless the context clearly requires otherwise, have the
following meanings:
(a) "Bonds" shall mean any State. Revolving Fund Revenue Bonds that were
or in the future are issued by the Issuer for the purpose of providing moneys to finance
the Loan to the Participant.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended, and
all lawfully promulgated regulations thereunder.
(c) "Project" shall mean the particular construction activities approved by the
Department and being undertaken by the Participant with respect to its Wastewater
Treatment System, as described in the Resolution.
(d) "R_egulations" shall mean the administrative rules of the Department
relating to the Program. set forth in Title 567, Chapter 92 of' the Iowa Administrative
Code. and the administrative rules of the Issuer relating to the Program set forth in Title
265. Chapter 26 of the Iowa Administrative Code.
(e) "Resolution" shall mean the resolution of the Council of the Participant.
adon!�:d oil Oc oller Q, ')01 u_ �inpr(_lyim) and ,luthorizlng the execUtlon of tills Agreement
and the issuance ol'the Revenue Bond (defned herein).
1
(f) "Wastewater Treatment System" shall mean the wastewater treatment
system of the Participant, all facilities being used in conjunction therewith and all
appurtenances and extensions thereto, including but not limited to the wastewater
treatment system project which the Participant is financing under this Agreement.
Section 2. Loan; Purchase of Revenue Bond. The Issuer agrees to purchase a duly
authorized and issued sewer revenue bond or capital loan note of the Participant (the "Revenue
Bond") in order to make a loan to the Participant, and will disburse proceeds as set forth herein.
The Participant agrees to borrow and accept from the Issuer, a loan in the principal amount of
$5,700,000 (the "Loan").
The Participant shall use the proceeds of the Loan strictly (a) to finance a portion of the
costs of construction of the Project and (b), where applicable, to reimburse the Participant for a
portion of the costs of the Project, which portion was paid or incurred in anticipation of
reimbursement through the Program and which is eligible for such reimbursement under and
pursuant to the Regulations and the Code.
Section 3. Disbursements. Proceeds of the Loan shall be made available to the
Participant in the form of one or more periodic disbursements as provided in this Section. The
Issuer thereafter shall make disbursements of a portion of the Loan for payment of costs of the
Project upon receipt of the following:
(a) a completed payment request on a form acceptable to and available from
the Issuer;
(b) current construction payment estimates;
(c) engineering service stateirlei;ts;
(d) purchase orders or invoices for items not included within other contracts;
and
(e) evidence that the costs for which the disbursement is requested have been
incurred.
Solely with respect to the request for the final disbursement of proceeds of the Loan, the
Participant shall submit to the Issuer (via the Department), in addition to items (a) through (e)
above, a certification of completion and acceptance of the Project by the Participant or evidence
of an acceptable settlement if the Project is subject to a dispute between the Participant and any
contractor.
Disbursements shall he made in a timely fashion following the receipt of the information
as set forth above. Unless otherwise agreed to in writing by the Issuer. funds shall be payable to
the Participant via automated clearmudiouse system transfer to the account specified by the
Participant.
Section 4. Completion of Project. The Participant covenants and agrees (i) to exercise its
best efforts in accordance with prudent wastewater treatment utility practices to complete the
Project; and (ii) to provide fi-om its own fiscal resources all monies, in excess of the total amount
of Loan proceeds it receives under the Agreement, required to complete the Project.
Section 5. Repayment of Loan: Issuance of Revenue Bonds. The Participant's obligation
to repay the Loan and interest thereon shall be evidenced by the Revenue Bond in the principal
amount of the Loan, complying in all material respects with the Regulations and being in
substantially the form set forth in the Resolution. The Revenue Bond shall be delivered to the
Issuer as the original purchaser and registered holder thereof at the closing of the Loan. The
Revenue Bond shall be accompanied by a legal opinion of bond counsel, in form satisfactory to
the Issuer, to evidence the legality, security position and tax-exempt status of interest on the
Revenue Bond. The parties agree that a payment of principal of or interest on the Revenue Bond
shall be deemed to be a payment of the same on the Loan and a payment of principal of or
interest on the Loan shall be deemed to be a payment of the same on the Revenue Bond. Unless
otherwise agreed to in writing by the Issuer, all payments of principal and interest due under the
Loan shall be made via automated clearinghouse transfer, from an account specified by the
Participant.
The Revenue Bond shall be dated the date of delivery to the Issuer, with interest and the
Servicing Fee (together, the "Interest Rate" as set forth in Section 6 hereof) payable
semiannually on June 1 and December 1 of each year (unless the resolution authorizing a
previous series of outstanding bonds on a parity with the Revenue Bond requires interest to be
paid on other interest payment dates, in which case such other dates shall apply) from the date of
each disbursement of a part of' the Loan from the Issuer to the Participant (which are initially
expected to be on approximately the dates set forth on Exhibit A attached hereto and
incorporated herein). The first repayment of principal of the Loan shall be due and payable not
later than one year after substantial completion of the Project and payments of principal, interest
and the Servicing Fee shall continue thereafter until the Loan is paid in full. Following the final
disbursement of Loan proceeds to the Participant, Exhibit A shall be adjusted by the Issuer, with
the approval of the Participant, based upon actual disbursements to the Participant under the
Agreement. Such revised Exhibit A thereafter shall be deemed to be incorporated herein by
reference and made a part hereof and shall supersede and replace that initially attached hereto
and to the Revenue Bond.
The Revenue Bond shall be subject to optional redemption by the Participant at a price of
par plus accrued interest (i) on any date upon receipt of'written consent by the Issuer, or (ii) in
the event that all or substantially all of the Project is damaged or destroyed. Any such optional
redemption of the Revenue Bond by the Participant may be made from any funds regardless of'
source. in whole or from time to time in part. upon not less than thirty (30) days notice of'
redemption by e-mail. facsimile. certified or registered mail to the Issuer (or any other registered
owner of the Revenue Bond). The Revenue Bond is also subject to mandatory redemption in the
event the costs of' the Project are less than initially projected. in which case the amount of the
t 1_,_n L 1. 1 1 t, tl„ t :,l etc disbursed. f 1 Participant
Loan S'nall be redfu.ed to ai, a11,vIO It CCluci� he "'C u.0 Projectcosts The 1
1
and the Issuer agree that following such adjustment, the principal amount due under the Revenue
Bond shall be automatically reduced to equal the principal amount of the adjusted Loan.
The Revenue Bond and the interest thereon and any additional obligations as may be
hereafter issued and outstanding from time to time under the conditions set forth in the
Resolution shall be payable solely and only from the Net Revenues (as defined in the Resolution)
of the Wastewater Treatment System of the Participant, a sufficient portion of which has been
and shall be ordered set aside and pledged for such purpose tinder the provisions of the
Resolution. Neither this Agreement nor the Revenue Bond is a general obligation of the
Participant, and under no circumstance shall the Participant be in any manner liable by reason of
the failure of the aforesaid Net Revenues to be sufficient to pay the Revenue Bond and the
interest thereon or to otherwise discharge the Participant's obligation hereunder.
Section 6. Interest Rate, Initiation Fee and Servicing Fees. (a) The Participant agrees
to pay to the Issuer, as additional consideration for the Loan, a loan initiation fee (the "Initiation
Fee") equal to one-half of one percent (0.50%) of the amount of the Loan ($28,500), which shall
be due and payable on the date of this Agreement. Unless the Issuer shall be otherwise notified
by the Participant that the Participant intends to pay such Initiation Fee from other funds, and has
received such other funds from the Participant on the date hereof, the Issuer shall be authorized
to deduct the full amount of the Initiation Fee from the proceeds of the Loan being made
hereunder, and such deduction by the Issuer shall be deemed to be an expenditure by the
Participant of the Loan proceeds.
(b) The Participant agrees to pay a Loan servicing fee (the "Servicing Fee") to the Issuer
in an amount equal to 0.25% per amnum of the principal amount of the Loan outstanding. The
Servicing Fee shall be paid as described in Section 5 and Section 6(c) hereof.
(c) The Loan shall bear interest at 1.75% per annum (the "Rate"). As described in
Section 5, payments hereunder shall be calculated based on the Rate plus the Servicing Fee (such
2.00%, the "Interest Rate").
Section 7. Compliance with Applicable Laws. Performance Under Loan Agreement;
Rates. The Participant covenants and agrees (1) to comply with all applicable State of Iowa and
federal laws, rules and regulations (including but not limited to the Regulations), judicial
decisions, and executive orders in the performance of the Agreement and in the financing,
construction, operation, maintenance and use of the Project and the Wastewater Treatment
System; (ii) to maintain its Wastewater Treatment System in good repair, working order and
operating condition: (iii) to cooperate with the Issuer in the observance and performance of their
respective duties. covenants. obligations and aoreements under the Agreement; (iv) to comply
with all terms and conditions of the Resolution: and (v) to establish, levy and collect rents, rates
and other charges for the products and services provided by its Wastewater Treatment System,
which rents. rates and other charges shall be at least sufficient (A) to meet the operation and
maintenance expenses of such Wastewater Treatment System, (B) to produce and maintain Net
Revl'nL1eS at a level not less than 1 I V)° ) of the amount of principal and interest on the Revenue
Bond and am other obligations secured by a pledge of the Net Revenues falling due in the same
4
year, (C) to comply with all covenants pertaining thereto contained in, and all other provisions
of, any bond resolution, trust indenture or other security agreement, if any, relating to any bonds
or other evidences of indebtedness issued or to be issued by the Participant, (D) to pay the debt
service requirements on any bonds. notes or other evidences of indebtedness, whether now
outstanding or incurred in the future, secured by such revenues or other receipts and issued to
finance improvements to the Wastewater Treatment System and to make any other payments
required by the laws of the State of Iowa, (E) to generate finds sufficient to fulfill the terms of
all other contracts and agreements made by the Participant, including, without limitation, the
Agreement and the Revenue Bond and (F) to pay all other amounts payable from or constituting
a lien or charge on the operating revenues of its Wastewater Treatment System.
Section 8. Insurance; Audits; Disposal of Property. The Participant covenants and
agrees (a) to maintain insurance on, or to self-insure, the insurable portions of the Wastewater
Treatment System of a kind and in an amount which normally would be carried by private
companies engaged in a similar type of business, (b) to keep proper books and accounts adapted
to the Wastewater Treatment System, showing the complete and correct entry of all transactions
relating thereto, and to cause said books and accounts to be audited or examined by an
independent auditor or the State Auditor (1) at such times and for such periods as may be
required by the federal Single Audit Act of 1984, OMB Circular A-133 or State law, and (ii) at
such other times and for such other periods as may be requested at any time and from time to
time by the Issuer (which requests inay require an audit to be performed for a period that would
not otherwise be required to be audited under State law), and (c) not to sell, lease or in any
manner dispose of the Wastewater Treatment System, or any capital part thereof, including any
and all extensions and additions which may be made thereto, until the Revenue Bond shall have
been paid in full or otherwise discharged as provided in the Resolution; provided, however, that
the Participant may dispose of any property which in the judgment of its governing body is no
r'1^•b'�..r u ! r of-i
YnrtaNe to rice in rnpneriinn with the operation of the Wastewater Treatment
.. a v._-_.
System or essential to the continued operation thereof.
Section 9. Maintenance of Documents; Access. The Participant agrees to maintain
its project accounts in accordance with generally accepted accounting principles ("GAAP") as
issued by the Governmental Accounting Standards Board, including GAAP requirements
relating to the reporting of infrastructure assets.
The Participant agrees to permit the Issuer or its duly authorized representative access to
all files and documents relating to the Project for purposes of conducting audits and reviews in
accordance with any of the Regulations.
Section 10. ContlnUlilQ Disclosure. As a means of enablino the Issuer to comply with
the "continuing disclosure's requirements set forth in IZule 15c2-12 (the "Rule") of the Securities
and Exchange Commission, the Participant agrees. during the term of the Loan. to provide the
Issuer with (1) the comprehensive audit report of' the Participant, prepared and certified by an
independent auditor Or the State Auditor not later than 180 days after the end of each fiscal year
iiir ..'iil�li ti1C iL}/�: . ':�ii5 1repared ..,iis f'i) �1`Ei ;�f�a_e- .n���rr33 att`�n '171 Ct 'Inortztl»() date ;rc the tczllor
5
may reasonably request from time to time with respect to the Wastewater Treatment System, the
Project or the Participant.
The Participant hereby consents to the inclusion of all or any portion of the foregoing
information and materials in a public filing made by the Issuer under the Rule. The Participant
agrees to indemnify and hold harmless the Issuer, and its officers, directors, employees and
agents from and against any and all claims, darnages, losses, liabilities, reasonable costs and
expenses whatsoever (including attorney fees) which such indemnified party may incur by
reason of or in connection with the disclosure of information permitted under this Section;
provided that no such indemnification shall be required for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent, caused by the willful
misconduct or gross negligence of the Issuer in the disclosure of such information.
Section 11. Events of Default. If any one or more of the following events occur, it is
hereby defined as and declared to constitute an "Event of Default" under this Agreement:
(a) Failure by the Participant to pay, or cause to be paid, any Loan repayment
(including the Servicing Fee) required to be paid under this Agreement when due, which
failure shall continue for a period of fifteen (15) days.
(b) Failure by the Participant to make, or cause to be made, any required
payments of principal, redemption premium, if any, and interest on any bonds, notes or
other obligations of the Participant (other than the Loan and the Revenue Bond), the
payment of which are secured by operating revenues of the Wastewater Treatment
System.
(c) Failure by the Participant to observe and perform any duty, covenant,
obligation or agreement on its part to be observed or performed under the Agreement or
the Resolution, other than the obligation to make Loan repayments, which failure shall
continue for a period of thirty (30) days after written notice, specifying such failure and
requesting that it be remedied, is given to the Participant by the Issuer, unless the Issuer
shall agree in writing to an extension of- such time prior to its expiration or the failure
stated in such notice is correctable but cannot be corrected in the applicable period, in
which case the Issuer may not unreasonably withhold its consent to an extension of such
time up to one hundred twenty (120) days from the delivery of the written notice referred
to above if corrective action is commenced by the Participant within the applicable period
and diligently pursued until the Event of-Default is corrected.
Section 12. IZemedies on Default. Whenever an Event of'Default shall have occurred
and be continuing. the Issuer shall have the right to take any action authorized under the
Regulations. the Revenue Bond or this Agreement and to take whatever other action at law or
equity may appear necessary or desirable to collect the amounts then due and thereafter to
become due under the Agreement or to enforce the performance and observance of any duty.
covenant. obhuation or agreement of'tileParticipant under the Agreement or the Resolution.
6
Section 13. Amendments. This Agreement may not be amended, supplemented or
modified except by a writing executed by all of the parties hereto.
Section 14. Termination. The Participant understands and agrees that the Loan may
be terminated at the option of the Issuer if construction of the Project has not commenced within
one year of the date of execution of this Agreement, all as set forth in the Regulations.
Section 15. Rule of Construction. This Agreement is executed pursuant to the
provisions of Section 384.24A of the Code of Iowa and shall be read and construed as
conforming to all provisions and requirements of that statute.
In the event of any inconsistency or conflict between the terms and conditions of the
Revenue Bond and this Agreement or the Regulations, the parties acknowledge and agree that
the terms of this Agreement or the Regulations, as the case may be, shall take precedence over
any such terms of the Revenue Bond and shall be controlling, and that the payment of principal
and interest on the Loan shall at all times conform to the schedule set forth on Exhibit A, as
adjusted. and the Regulations.
Section 16. Federal Requirements. The Participant agrees to comply with all
applicable federal requirements including, but not limited to, Davis-Bacon wage requirements
and the requirernents relating to the use of American iron and steel products.
Section 17. Repayment of Planning, and Design Loan. The Participant entered into an
Interim Loan and Disbursement Agreement with the Issuer to provide funds to pay the costs of
planning and designing the Project. The Participant agrees to repay the Interim Loan and
Disbursement Agreement on the date of this Agreement. Unless the Participant notifies the
Issuer that the Participant intends to repay the Interim Loan and Disbursement Agreement from
other funds, and the Issuer has received such other hinds from the Participant on the date hereof,
the Issuer shall be authorized to deduct the frill amount due under the Interim Loan and
Disbursement Agreement from the proceeds of the Loan being made hereunder, and such
deduction by the Issuer shall be deemed to be an expenditure by the Participant of the Loan
proceeds.
7
IN WITNESS WHEREOF, we have hereunto affixed our signatures all as of the date first
above written.
CITY OF AMES, IOWA
w l
B
Mayor
Attest:
City Clerk
11'articipant Si-unature P wc to LUA]
IN WITNESS WHEREOF, I have hereunto affixed my signature all as of the date first
above written.
IOWA FINANCE AUTHORITY
By:
Its: Executive Director
II=A Si�_Inatum PL11_1C to LDA)
EXHIBIT A
ESTIMATED DISBURSEMENTS AND
DEBT SERVICE REPAYMENT SCHEDULE
\-I
LOAN AND DISBURSEMENT AGREEMENT
$5,700,000 TAXABLE SEWER REVENUE BONDS
This Loan and Disbursement Agreement (the "Agreement") is made and entered into as
of October 19, 2018, by and between the City of Ames, Iowa (the "Participant") and the Iowa
Finance Authority, an agency and public instrumentality of the State of Iowa (the "Issuer").
WHEREAS, the Issuer, in cooperation with the Iowa Department of Natural Resources
(the "Department"), is authorized to undertake the creation, administration and financing of the
Iowa Water Pollution Control Works Financing Program (the "Program") established in Iowa
Code Sections 16.131 through 16.135 and Sections 455B.291 through 45513.299, including,
among other things, the making of loans to Iowa municipalities for purposes of the Program; and
WHEREAS, the Participant desires to participate in the Program as a means of financing
all or part of the construction of certain wastewater treatment facilities serving the Participant
and its residents; and
WHEREAS, to assist in financing the Project (defined herein), the Issuer desires to make
a loan to the Participant in the amount set forth in Section 2 hereof,
NOW, THEREFORE, the parties agree as follows:
Section 1. Definitions. In addition to other definitions set forth herein, the following
terms as used in this Agreement shall, unless the context clearly requires otherwise, have the
following meanings:
(a) "Bonds" shall mean anv State Revolving Fund Revenue Bonds that were
or in the future are issued by the Issuer for the purpose of providing moneys to finance
the Loan to the Participant.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended, and
all lawfully promulgated regulations thereunder.
(c) "Project" shall mean the particular construction activities approved by the
Department and being undertaken by the Participant with respect to its Wastewater
TreaU»ent System. as described in the Resolution.
(d) "Regulations" shall mean the administrative rules of the Department
relating to the Program, set forth in Title 567. Chapter 92 of the Iowa Administrative
Code. and the administrative rules of the Issuer relating to the Program set forth in Title
265, Chapter 26 of the lowa Administrative Code.
(e) "Resolution'" shall mean the resolution of the Council of the Participant.
;,do!)Ic�d on October 0 2018- ;_i1nnroving and authorizlnp, the execution of this Agreement
and the issuance of the IBCv CnUe Bond (defined herein).
1
(f) "Wastewater Treatment System" shall mean the wastewater treatment
system of the Participant, all facilities being used in conjunction therewith and all
appurtenances and extensions thereto, including but not limited to the wastewater
treatment system project which the Participant is financing under this Agreement.
Section 2. Loan; Purchase of Revenue Bond. The Issuer agrees to purchase a duly
authorized and issued sewer revenue bond or capital loan note of the Participant (the "Revenue
Bond") in order to make a loan to the Participant, and will disburse proceeds as set forth herein.
The Participant agrees to borrow and accept from the Issuer, a loan in the principal amount of
$5,700,000 (the "Loan").
The Participant shall use the proceeds of the Loan strictly (a) to finance a portion of the
costs of construction of the Project and (b), where applicable, to reimburse the Participant for a
portion of the costs of the Project, which portion was paid or incurred in anticipation of
reimbursement through the Program and which is eligible for such reimbursement under and
pursuant to the Regulations and the Code.
Section 3. Disbursements. Proceeds of the Loan shall be made available to the
Participant in the form of one or more periodic disbursements as provided in this Section. The
Issuer thereafter shall make disbursements of a portion of the Loan for payment of costs of the
Project upon receipt of the following:
(a) a completed payment request on a form acceptable to and available from
the Issuer;
(b) current construction payment estimates;
(c) engineering service statennents;
(d) purchase orders or invoices for items not included within other contracts:
and
(e) evidence that the costs for which the disbursement is requested have been
incurred.
Solely with respect to the request for the final disbursement of proceeds of the Loan, the
Participant shall submit to the Issuer (via the Department), in addition to items (a) through (e)
above. a certification of completion and acceptance of the Project by the Participant or evidence
of an acceptable settlement if the Project is subject to a dispute between the Participant and any
contractor.
Disbursements shall he made in a timely fashion following the receipt of the information
as set forth above. Unless otherwise agreed to in writing by the Issuer. funds shall be payable to
the Participant via automated cleal-M--house system transfer to the account specified by the
I'arUClpant.
2
Section 4. Completion of Project. The Participant covenants and agrees (1) to exercise its
best efforts in accordance with prudent wastewater treatment utility practices to complete the
Project; and (ii) to provide from its own fiscal resources all monies, in excess of the total amount
of Loan proceeds it receives under the Agreement, required to complete the Project.
Section 5. Repayment of Loan_ Issuance of Revenue Bonds. The Participant's obligation
to repay the Loan and interest thereon shall be evidenced by the Revenue Bond in the principal
amount of the Loan, complying in all material respects with the Regulations and being in
substantially the form set forth in the Resolution. The Revenue Bond shall be delivered to the
Issuer as the original purchaser and registered holder thereof at the closing of the Loan. The
Revenue Bond shall be accompanied by a legal opinion of bond counsel, in form satisfactory to
the Issuer, to evidence the legality, security position and tax-exempt status of interest on the
Revenue Bond. The parties agree that a payment of principal of or interest on the Revenue Bond
shall be deemed to be a payment of the same on the Loan and a payment of principal of or
interest on the Loan shall be deemed to be a payment of the same on the Revenue Bond. Unless
otherwise agreed to in writing by the Issuer, all payments of principal and interest due under the
Loan shall be made via automated clearinghouse transfer, from an account specified by the
Participant.
The Revenue Bond shall be dated the date of delivery to the Issuer, with interest and the
Servicing Fee (together, the "Interest Rate" as set forth in Section 6 hereof) payable
semiannually on .Lune l and December 1 of each year (unless the resolution authorizing a
previous series of outstanding bonds oil a parity with the Revenue Bond requires interest to be
paid on other interest payment dates, in which case such other dates shall apply) from the date of
each disbursement of a part of the Loan from the Issuer to the Participant (which are initially
expected to be on approximately the dates set forth on Exhibit A attached hereto and
incorporated herein). The first repayment of principal of the Loan shall be due and payable not
later than one year after substantial completion of the Project and payments of principal, interest
and the Servicing Fee shall continue thereafter until the Loan is paid in full. Following the final
disbursement of Loan proceeds to the Participant, Exhibit A shall be adjusted by the Issuer, with
the approval of the Participant. based upon actual disbursements to the Participant under the
Agreement. Such revised Exhibit A thereafter shall be deemed to be incorporated herein by
reference and made a part hereof and shall supersede and replace that initially attached hereto
and to the Revenue Bond.
The Revenue Bond shall be subject to optional redemption by the Participant at a price of
par plus accrued interest (1) on any date upon receipt of written consent by the Issuer, or (ii) in
the event that all or substantially all of the Project is damaged or destroyed. Any such optional
redemption of the Revenue Bond by the Participant may be made from any funds regardless of'
source_ in whole or from time to time in part. upon not less than thirty (30) days notice of'
redemption by c-mail, facsimile. certified or registered mail to the Issuer (or any other registered
owner of the Revenue Bond). The Revenue Bond is also subject to mandatory redemption in the
event the costs of the Project are less than initially projected. in which case the amount of the
1 hall be 1,.cc-1! - t � • 1 to the .ctual Project
r jest costs dic�h r ed Tile
1
and the Issuer agree that following such adjustment, the principal amount due under the Revenue
Bond shall be automatically reduced to equal the principal amount of the adjusted Loan.
The Revenue Bond and the interest thereon and any additional obligations as may be
hereafter issued and outstanding from time to time under the conditions set forth in the
Resolution shall be payable solely and only from the Net Revenues (as defined in the Resolution)
of the Wastewater Treatment System of the Participant, a sufficient portion of which has been
and shall be ordered set aside and pledged for such purpose under the provisions of the
Resolution. Neither this Agreement nor the Revenue Bond is a general obligation of the
Participant, and under no circumstance shall the Participant be in any manner liable by reason of
the failure of the aforesaid Net Revenues to be sufficient to pay the Revenue Bond and the
interest thereon or to otherwise discharge the Participant's obligation hereunder.
Section 6. Interest Rate, Initiation Fee and Servicing Fees. (a) The Participant agrees
to pay to the Issuer, as additional consideration for the Loan, a loan initiation fee (the "Initiation
Fee") equal to one-half of one percent (0.50%) of the arnount of the Loan ($28,500), which shall
be due and payable on the date of this Agreement. Unless the Issuer shall be otherwise notified
by the Participant that the Participant intends to pay such Initiation Fee from other funds, and has
received such other funds from the Participant on the date hereof, the Issuer shall be authorized
to deduct the full amount of the Initiation Fee from the proceeds of the Loan being made
hereunder, and such deduction by the Issuer shall be deemed to be an expenditure by the
Participant of the Loan proceeds.
(b) The Participant agrees to pay a Loan servicing fee (the "Servicing Fee") to the Issuer
in an amount equal to 0.25% per annum of the principal amount of the Loan outstanding. The
Servicing Fee shall be paid as described in Section 5 and Section 6(c) hereof.
(c) The Loan shall bear interest at 1.75% per annum (the "Rate"). As described in
Section 5, payments hereunder shall be calculated based on the Rate plus the Servicing Fee (such
2.00%, the "Interest Rate").
Section 7. Compliance with Applicable Laws. Performance Under Loan Agreement;
Rates. The Participant covenants and agrees (i) to comply with all applicable State of Iowa and
federal laws, rules and regulations (including but not limited to the Regulations), judicial
decisions, and executive orders in the performance of the Agreement and in the financing,
construction, operation, maintenance and use of the Project and the Wastewater Treatment
System; (Hi) to maintain its Wastew-titer Treatment System in good repair, working order and
operating condition; (iii) to cooperate with the Issuer in the observance and performance of their
respective duties. covenants. obligations and agreements tinder the Agreement; (iv) to comply
with all terms and conditions of the Resolution; and (v) to establish, levy and collect rents, rates
and other charges for the products and services provided by its Wastewater Treatment System.
which rents. rates and other charges shall be at ]east sufficient (A) to meet the operation and
maintenance expenses of such Wastewater Treatment System. (R) to produce and maintain Net
Revenues at a leVe1 not less than 110') , of the amount of principal and interest on the Revenue
Bond and any other obligations secured hN a pledge of the Net Revenues ftnlling due in the same
4
year, (C) to comply with all covenants pertaining thereto contained in, and all other provisions
of, any bond resolution, trust indenture or other security agreement, if any, relating to any bonds
or other evidences of indebtedness issued or to be issued by the Participant, (D) to pay the debt
service requirements on any bonds, notes or other evidences of indebtedness, whether now
outstanding or incurred in the future, secured by such revenues or other receipts and issued to
finance improvements to the Wastewater Treatment System and to make any other payments
required by the laws of the State of Iowa, (E) to generate funds sufficient to fulfill the terms of
all other contracts and agreements made by the Participant, including, without limitation, the
Agreement and the Revenue Bond and (F) to pay all other amounts payable from or constituting
a lien or charge on the operating revenues of its Wastewater Treatment System.
Section 8. Insurance; Audits; Disposal of Property. The Participant covenants and
agrees (a) to maintain insurance on, or to self-insure, the insurable portions of the Wastewater
Treatment System of a kind and in an amount which normally would be carried by private
companies engaged in a similar type of business, (b) to keep proper books and accounts adapted
to the Wastewater Treatment System, showing the complete and correct entry of all transactions
relating thereto, and to cause said books and accounts to be audited or examined by an
independent auditor or the State Auditor (i) at such times and for such periods as may be
required by the federal Single Audit Act of 1984, OMB Circular A-133 or State law, and (ii) at
such other times and for such other periods as may be requested at any time and from time to
time by the Issuer (which requests may require an audit to be performed for a period that would
not otherwise be required to be audited under State law), and (c) not to sell, lease or in any
manner dispose of the Wastewater Treatment System, or any capital part thereof, including any
and all extensions and additions which may be made thereto, until the Revenue Bond shall have
been paid in full or otherwise discharged as provided in the Resolution; provided, however, that
the Participant may dispose of any property which in the judgment of its governing body is no
lC)ngc,.- 11jPTli! or profitable to ,tse in cr,nnertinn with. the operation of the Wastewater Treatment
System or essential to the continued operation thereof.
Section 9. Maintenance of Documents; Access. The Participant agrees to maintain
its project accounts in accordance with generally accepted accounting principles ("GAAP") as
issued by the Governmental Accounting Standards Board, including GAAP requirements
relating to the reporting of infrastructure assets.
The Participant agrees to permit the Issuer or its duly authorized representative access to
all files and documents relating to the Project for purposes of conducting audits and reviews in
accordance with any of tine Regulations.
Section 10. Continuing, Disclosure. As a means of enablinLl the Issuer to comply with
the "continuing disclosure" requimments set forth in Rule ]5c2-]2 (the "Rule") of the Securities
and Exchange Connnnission. the Participant a��rees. during the term of the Loan, to provide the
Issuer with (1) the comprehensive audit report of- the Participant. prepared and certified by an
independent auditor or the State Auditor not later than 180 days alter the end of each fiscal year
1'._.- ..1-. .I, ,1 ,.,-� (..,,-—I it (,;1 '.I"� 1, /fit li Pi' t -(\i'i�li 1 �lyl i�li it illy j'lull(i data as 1IlP tCl'1 IF i-
ii}i Yilli.11 i lc ii:pi::: '«aS �:i-elx �: ..:i:: �.. .._. :n: .. _ 1 a,.<< 'i t.....0 a
5
may reasonably request from time to time with respect to the Wastewater Treatment System, the
Project or the Participant.
The Participant hereby consents to the inclusion of all or any portion of the foregoing
information and materials in a public filing made by the Issuer under the Rule. The Participant
agrees to indemnify and hold harmless the Issuer, and its officers, directors, employees and
agents frorn and against any and all claims, damages, losses, liabilities, reasonable costs and
expenses whatsoever (including attorney fees) which such indemnified party may incur by
reason of or in connection with the disclosure of information permitted under this Section;
provided that no such indemnification shall be required for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent, caused by the willful
misconduct or gross negligence of the Issuer in the disclosure of such information.
Section 11. Events of Default. If any one or more of the following events occur, it is
hereby defined as and declared to constitute an "Event of Default"under this Agreement:
(a) Failure by the Participant to pay, or cause to be paid, any Loan repayment
(including the Servicing Fee) required to be paid under this Agreement when due, which
failure shall continue for a period of fifteen (15) days.
(b) Failure by the Participant to make, or cause to be made, any required
payments of principal, redemption premium, if any, and interest on any bonds, notes or
other obligations of the Participant (other than the Loan and the Revenue Bond), the
payment of which are secured by operating revenues of the Wastewater Treatment
System.
(c) Failure by the Participant to observe and perform any duty, covenant,
obligation or agreement on its part to be observed or performed under the Agreement or
the Resolution, other than the obligation to make Loan repayments, which failure shall
continue for a period of thirty (30) days after written notice, specifying such failure and
requesting that it be remedied, is given to the Participant by the Issuer, unless the Issuer
shall agree in writing to an extension of' such time prior to its expiration or the failure
stated in such notice is correctable but cannot be corrected in the applicable period, in
which case the Issuer may not unreasonably withhold its consent to an extension of such
time up to one hundred twenty (120) days from the delivery of the written notice referred
to above if corrective action is commenced by the Participant within the applicable period
and diligently pursued until the Event of Default is corrected.
Section 12. Remedies on Default. Whenever an Event of'Default shall have occurred
and be continuing. the Issuer shall have the right to take any action authorized under- the
Regulations. the Revenue Bond or this Agreement and to take whatever other action at law or
equity may appear- necessary or desirable to collect the amounts then due and thereafter to
become due under- the Agreement or to enforce the performance and observance of any duty.
covenant. oblivation or agreement of the Participant under the Aoreennent or the Resolution.
6
IN WITNESS WHEREOF, we have hereunto affixed our signatures all as of the date first
above written.
CITY OF AMES, IOWA
By:
Mayor
Attest:
City Clerk
jParticipant Si`,naturc Page to LDAJ
IN WITNESS WHEREOF, I have hereunto affixed m signature
y s �,Ina toe all as of the date first
above written.
IOWA FINANCE AUTHORITY
By:
Its: Executive Director
(11 \ SiUMIMI-c 1'a2e to LDA]
EXl11131T A
ESTIMATED DISBURSEMENTS AND
DEIST SERVICE REPAYMENT SCHEDULE
I